Form 8-K
8-K — Proficient Auto Logistics, Inc
Accession: 0001213900-26-114421
Filed: 2026-10-30
Period: 2026-10-30
CIK: 0001998768
SIC: 4700 (TRANSPORTATION SERVICES)
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Regulation FD Disclosure
Item: Financial Statements and Exhibits
Documents
8-K — ea0310028-8k_proficient.htm (Primary)
EX-10.1 — EMPLOYMENT AGREEMENT, DATED AS OF AUGUST 13, 2026, BY AND AMONG STEVEN HANSEN, HANSEN & ADKINS AUTO TRANSPORT, LLC, AND THE COMPANY (ea031002801ex10-1.htm)
EX-10.2 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (3552 GREEN AVENUE), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC (ea031002801ex10-2.htm)
EX-10.3 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (351 MARTIN PALMER DRIVE), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC (ea031002801ex10-3.htm)
EX-10.4 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (1814 WESTFIELD LOOP ROAD), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC (ea031002801ex10-4.htm)
EX-10.5 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (480 DICK BUCHANAN STREET), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 480 DICK BUCHANAN STREET, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC (ea031002801ex10-5.htm)
EX-99.1 — PRESS RELEASE, DATED OCTOBER 30, 2026 (ea031002801ex99-1.htm)
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8-K — CURRENT REPORT
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of
the Securities Exchange Act of 1934
Date
of report (date of earliest event reported): October 30, 2026
Proficient
Auto Logistics, Inc.
(Exact
name of registrant as specified in its charter)
Delaware
001-42035
93-1869180
(State or other jurisdiction
of incorporation)
(Commission file number)
(IRS employer
identification number)
12276
San Jose Blvd., Suite 426
Jacksonville,
FL 32223
(Address
of principal executive offices)
Registrant’s
telephone number, including area code: (904) 506-7918
Check
the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligations of the registrant under any of
the following provisions:
☐
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☒
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading
Symbol(s)
Name
of each exchange on which registered
Common
Stock, $0.01 par value per share
PAL
Nasdaq Global
Market
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers
On
October 30, 2026, the Board of Directors (the “Board”) of Proficient Auto Logistics, Inc. (the “Company”) increased
the size of the Board and appointed Steven Hansen (“Mr. Hansen”) to serve as a member of the Board, effective immediately,
until the Company’s annual meeting of stockholders to be held in 2027.
Mr.
Hansen is a co-founder of Hansen & Adkins, Inc. (“H&A”), a finished-vehicle logistics and automobile
transportation company, which was acquired by the Company in August 2026. Mr. Hansen served in various roles with H&A and its
subsidiaries since he co-founded H&A in 1994. Mr. Hansen is a founding member and founding chairman of the Auto Haulers
Association of America and currently serves on its board of directors. His experience includes automobile transportation operations,
fleet maintenance, risk management, finance, personnel management, insurance, and U.S. Department of Transportation regulations. Mr.
Hansen earned a Bachelor of Science in Public Administration from the University of Southern California. We believe that Mr.
Hansen’s long and extensive experience in the auto hauling business qualifies him to serve as a director of the
Company.
Pursuant
to an employment agreement, dated August 14, 2026 (the “Employment Agreement”), Mr. Hansen agreed to provide advisory services
to the Company from August 14, 2026 through December 31, 2026. The Employment Agreement provides for compensation at a prorated annual
rate of $250,000 and includes medical and dental insurance benefits. The foregoing description
of the Employment Agreement is not complete and is qualified in its entirety by reference to the full text of the Employment Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K. There are currently no arrangements or understandings between
Mr. Hansen and any person pursuant to which Mr. Hansen was selected as a director.
On
August 14, 2026, the Company entered into (i) three lease arrangements with 3611 Farquhar Investments, LLC (the “Farquhar Leases”),
and (ii) one lease arrangement with 480 Dick Buchanan Street, LLC (the “Buchanan Lease”). Each lease has an initial term
commencing on August 13, 2026 and expiring December 31, 2027. Each lease provides the Company, as lessee, with five options to extend
the term for two years each. The leases contain specified termination rights relating to, among other things, tenant defaults, casualty,
condemnation, hazardous-substance conditions and certain required capital expenditures, subject to their applicable notice, cure and
other conditions. Mr. Hansen owns a 50% equity interest in each of these lessors. The aggregate annual value of the leases with 3611 Farquhar
Investments, LLC is approximately $1,200,000 and the aggregate annual value of the lease with 480 Dick Buchanan Street, LLC is approximately
$180,000. The foregoing descriptions of the Farquhar Leases and the Buchanan Lease are not complete and are qualified in their entirety
by reference to the full text of the lease agreements, which are filed as Exhibits 10.2, 10.3, 10.4, and 10.5 to this Current Report
on Form 8-K.
As
set forth in the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission on August 10, 2026 and
August 14, 2026, Proficient Services, Inc., a wholly owned subsidiary of the Company, acquired Hansen & Adkins Auto Transport, LLC
and certain affiliated entities, pursuant to that certain Equity Purchase Agreement, dated August 10, 2026 (the “Purchase Agreement”).
Pursuant to the terms of the Purchase Agreement, the Company paid an upfront purchase price of approximately $130 million, including
assumed debt of approximately $75 million. Of the approximately $55 million remaining, 421,354 shares of common stock of the Company
were issued to Mr. Hansen and approximately $52 million was paid in cash (subject to customary post-closing adjustments set forth in
the Purchase Agreement). The terms of the Purchase Agreement also provide for potential earnout payments of up to approximately $22.1
million, of which $2 million would be payable in shares of common stock to Mr. Hansen with the remainder payable in cash. Other than
the Farquhar Leases, the Buchanan Lease and the Purchase Agreement, there are no current or proposed transactions in which Mr. Hansen
has or will have a direct or indirect material interest and in which the Company is or will be a participant that require disclosure
pursuant to Item 404(a) of Regulation S-K.
In
light of the various agreements between the Company and Mr. Hansen, the Board has determined that Mr. Hansen is not independent under
the applicable rules of The Nasdaq Stock Market LLC. Accordingly, Mr. Hansen is not expected to be appointed to serve on any committees
of the Board. Mr. Hansen has also agreed to waive all compensation payable by the Company in connection with his service on the Board.
The Company and Mr. Hansen entered into the Company’s standard indemnification agreement, the form of which is incorporated by
reference as Exhibit 10.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
1
Item 7.01
Regulation FD Disclosure
On
October 30, 2026, the Company issued a press release announcing the appointment of Mr. Hansen to the Board. A copy of the press release
is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Exhibit
99.1 is being furnished to the Securities and Exchange Commission and shall not be deemed “filed” for purposes of Section
18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that
Section, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended,
or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item
9.01
Financial
Statements and Exhibits
(d)
Exhibits
Exhibit Number
Description
10.1
Employment Agreement, dated as of August 13, 2026, by and among Steven Hansen, Hansen & Adkins Auto Transport, LLC, and the Company.
10.2
Standard Industrial/Commercial Single-Tenant Lease (3552 Green Avenue), dated as of August 10, 2026, by and between 3611 Farquhar Investments, LLC and Hansen & Adkins Auto Transport, LLC.
10.3
Standard Industrial/Commercial Single-Tenant Lease (351 Martin Palmer Drive), dated as of August 10, 2026, by and between 3611 Farquhar Investments, LLC and Hansen & Adkins Auto Transport, LLC.
10.4
Standard Industrial/Commercial Single-Tenant Lease (1814 Westfield Loop Road), dated as of August 10, 2026, by and between 3611 Farquhar Investments, LLC and Hansen & Adkins Auto Transport, LLC.
10.5
Standard Industrial/Commercial Single-Tenant Lease (480 Dick Buchanan Street), dated as of August 10, 2026, by and between 480 Dick Buchanan Street, LLC and Hansen & Adkins Auto Transport, LLC.
99.1
Press release, dated October 30, 2026
104
Cover Page Interactive Data File (embedded within the Inline XBRL document).
2
Signature
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date:
October 30, 2026.
Proficient Auto Logistics, Inc.
By:
/s/ Brad Wright
Brad Wright
Chief Financial Officer and Secretary
3
EX-10.1 — EMPLOYMENT AGREEMENT, DATED AS OF AUGUST 13, 2026, BY AND AMONG STEVEN HANSEN, HANSEN & ADKINS AUTO TRANSPORT, LLC, AND THE COMPANY
EX-10.1
Filename: ea031002801ex10-1.htm · Sequence: 2
Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT
(this “Agreement”), by and among Proficient Auto Logistics, Inc., a Delaware corporation (“Parent”),
Hansen & Adkins Auto Transport, LLC, a California limited liability company, a wholly-owned subsidiary or Parent (the “Company”),
and Steven Hansen, an individual (“Employee”), is dated as of August 13, 2026. Employee and the Company are each referred
to as a “Party” and collectively, as the “Parties”.
WHEREAS, the Company
and certain other parties have entered into an Equity Purchase Agreement dated as of August 10, 2026 (the “Purchase Agreement”)
pursuant to which the Company will purchase all of the issued and outstanding equity securities of Hansen & Adkins, Inc., Hansen &
Adkins Canada, Ltd. and Royal Truck Leasing, LLC.
WHEREAS, the Company
desires to employ Employee following and contingent upon the closing of the transactions contemplated by the Purchase Agreement (the “Closing”)
in the position of Advisor of the Company and Employee desires to be employed by the Company in such capacity, all on the terms and subject
to the conditions set forth herein.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements set forth herein, the Parties, intending to be legally bound, agree as follows:
1. Effective
Date. This Agreement shall become effective upon the Closing (the “Effective Date”). If the Closing does not
occur, this Agreement shall be null and void and without force or effect.
2.
Term of Employment. The Company hereby agrees to employ Employee beginning on the Effective Date and ending on December 31,
2026, unless earlier terminated as provided in Section 5 (the “Employment Period”). The Company may, upon written
notice to Employee no later than thirty (30) days prior to the expiration of the Employment Period, continue Employee’s employment
beyond the expiration of the Employment Period, in which case Employee shall be considered an “at-will” employee and shall
not be entitled to any payments or benefits under this Agreement upon any subsequent termination of employment for any reason whatsoever.
During the Employment Period, Employee shall (i) devote such business time and attention as is reasonably necessary to perform his advisory
duties for the Company and its subsidiaries and affiliates (collectively, with the Company, the “Company Group”);
and (ii) endeavor in all respects to promote, advance and further the Company’s interests in all matters relating to such duties,
including observance of and compliance with the Company’s rules and policies as adopted by the Company from time to time. Employee
shall perform all assigned duties to the best of his or her abilities in a diligent, trustworthy, professional, businesslike and efficient
manner.
3.
Position and Duties.
(a)
During the Employment Period, Employee will serve as an Advisor to the Company and Parent, reporting to the President and Chief Operating
Officer of the Parent. Employee shall have such authorities and powers as are inherent to the undertaking of this position and necessary
to carry out the commensurate duties and responsibilities of the position, provided, however, that Employee may not enter into any agreement
or commitment on behalf of the Company or Parent unless Employee receives prior written authorization from the Parent. Notwithstanding
the foregoing or any other provisions of this Agreement, Employee and the Company understand and agree that the responsibilities and
duties of Employee may change from time to time due to changes in the nature, structure or needs of any of the Company Group’s
businesses and that any such changes in Employee’s duties and responsibilities that are consistent with such changes in any of
the Company’s or any other member of the Company Group’s businesses shall not constitute a reduction or increase in Employee’s
duties and responsibilities for purposes of this Agreement. Nothing in this Agreement shall prohibit Employee from (i) making or holding
passive investments, (ii) serving on boards of directors, advisory boards or similar governing or advisory bodies, or (iii) participating
in charitable, civic, community or industry activities, in each case so long as such activities do not materially interfere with Employee’s
performance of his duties under this Agreement, do not otherwise violate Employee’s confidentiality or other obligations to the
Company Group, or violate the terms of the Purchase Agreement.
(b)
The Parent will recommend that Employee be nominated by the Parent’s Nominating and Governance Committee to the Parent’s
Board of Directors at, or prior to (subject to the Nominating and Governance Committee’s and the Parent’s Board of Directors’
discretion), the next stockholder meeting in May 2027.
4.
Compensation. Subject to the terms and conditions of this Agreement, during the Employment Period, Employee shall be compensated
by the Company for services as follows:
(a) Annual
Base Salary. Employee’s total annual salary shall be $250,000 (the “Annual Base Salary”), less applicable
deductions, payable in approximately equal installments under the Company’s general payroll practices.
(b) Benefits.
Employee shall be provided with retirement, health, welfare and other fringe benefits to the same extent and on the same terms as those
benefits are provided by the Company from time to time to other similarly situated employees of the Company; provided, that nothing
in this Agreement will preclude the amendment or termination of such plans or programs. For the avoidance of doubt, Employee shall not
be eligible for or entitled to any severance benefits.
(c) Holidays
and Paid Time Off. Notwithstanding any policies of the Company to the contrary, during the Employment Period, Employee shall be entitled
to take unlimited Paid Time Off in his discretion, provided it does not materially interfere with Employee’s provision of services
under this Agreement. Accordingly, Employee shall not have a Paid Time Off allotment and shall not accrue any specific period of Paid
Time Off.
(d) Expenses.
Employee shall be reimbursed by the Company, on terms and conditions that are substantially similar to those applicable to other similarly
situated employees of the Company, for reasonable documented out-of-pocket expenses for entertainment, travel, meals, lodging and similar
items, consistent with the Company’s expense reimbursement policy, actually incurred by Employee while employed in the promotion
of the Company’s or the Company Group’s business. Nothing in this Agreement will preclude the Company from amending or terminating
its expense reimbursement policy.
-2-
5. Rights
and Payments Upon Termination.
(a) Employee’s
right to benefits and payments, if any, upon the effective date of the termination of Employee’s employment with the Company and
all other members of the Company Group (the “Termination Date”) shall be determined in accordance with this Section
5.
(b) Employee’s
employment with the Company Group may be terminated prior to the end of the Employment Period (1) due to Employee’s death or Disability,
(2) by the Company at any time, for any reason or no reason (other than Cause (as defined below)), provided the Company Group provides
Employee at least thirty (30) days prior written notice of its intention to terminate Employee, (3) by the Company at any time for Cause
or (4) by Employee for any reason, provided Employee provides the Company at least thirty (30) days prior written notice of his intention
to terminate. If Employee’s Termination Date occurs for any reason, Employee shall be entitled to: (i) any unpaid Annual Base Salary
under Section 4(a) hereof for any period prior to the Termination Date; (ii) any accrued but unpaid benefits under Section 4(b) hereof
for any period prior to the Termination Date; and (iii) any accrued but unused vacation under Section 4(c) for any period prior to the
Termination Date to the extent provided for under the Company’s policies. Employee shall not be entitled to receive any other payments
or benefits under this Agreement for periods after Employee’s Termination Date and the Company shall have no obligation to make
any additional payments or provide any other benefits for periods after Employee’s Termination Date (except as may otherwise be
required under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, other applicable law or the express terms of an
employee benefit plan).
(c) “Cause”
means, as determined by the Company in its reasonable good-faith discretion: (i) Employee’s refusal to (A) perform Employee’s
duties and responsibilities as set forth herein or (B) to follow material lawful instructions issued by the Company; (ii) Employee’s
intentional and persistent refusal or failure to comply in any material respect with any written policies or procedures of the Company
Group; (iii) Employee’s willful, reckless or illegal misconduct; (iv) Employee’s engagement in any act or omission of willful
misfeasance or willful nonfeasance with respect to Employee’s assigned duties; (v) Employee’s engagement in any act of theft,
fraud, embezzlement, falsification of documents, misappropriation of funds or other assets or in any misconduct which is or reasonably
may be damaging to the goodwill, business or reputation of the Company Group; (vi) Employee’s breach of a fiduciary duty to the
Company Group and any of their affiliates; (vii) Employee’s conviction by a court of competent jurisdiction of, or Employee’s
pleading guilty or nolo contendere to, any felony or crime (A) involving moral turpitude or (B) that relates to, or has a material adverse
effect on the business or reputation of, the Company Group; or (viii) Employee’s material breach of any of his obligations contained
in any agreement between Employee and the Company Group.
(d) “Disability”
means the Employee has been determined to be disabled under the Company’s long-term disability plan then in effect.
-3-
6. Confidentiality.
(a) Generally.
In connection with Employee’s employment, Employee will be entrusted with knowledge of the Company Group’s confidential and
proprietary information and trade secrets, including their businesses, product information, operational methods, technology, customer
lists and strategy. The Company Group wishes to protect the foregoing information through the restrictions and covenants specified herein.
Employee recognizes that such information of the Company Group requires protection, and Employee is willing to protect such information
through the restrictions and covenants specified herein.
(b) Confidential
Information. Employee acknowledges and agrees that the Confidential Information is the property of the Company Group. Accordingly,
except as may be required by applicable law or the lawful order of a court or regulatory body, or except to the extent that Employee has
express authorization from the Company Group to do otherwise, Employee will keep secret and confidential indefinitely all Confidential
Information and not disclose such Confidential Information, either directly or indirectly, in any capacity whatsoever, either on his or
her own behalf or on behalf of any other person or entity, or use it in any way. For purposes of this Agreement, “Confidential
Information” means all non-public information, observations or data relating to any member(s) of the Company Group which Employee
learns through the Employee’s employment with the Company, whether or not a trade secret within the meaning of applicable law, including
but not limited to: (1) new products and new product development; (2) marketing strategies and plans, market experience with products,
and market research; (3) formulas, research in progress and unpublished manuals or know how devices, methods, techniques, processes and
inventions; (4) regulatory filings and communications; (5) identity of and relationship with licensees, licensors or suppliers; (6) finances,
financial information and financial management systems; (7) technological and engineering data; (8) customer lists and identities of and
information concerning customers, vendors and suppliers and prospective customers, vendors and suppliers; (9) development, expansion and
business strategies, pricing strategies, plans and techniques; (10) computer programs; (11) research and development activities; (12)
litigation and pending litigation; (13) Work Product (as defined below); (14) personnel information; and (15) any other information or
documents which Employee knows or should know is proprietary or confidential. Employee understands and agrees that Confidential Information
includes information developed by Employee in the course of his or her employment with the Company as if the Company furnished the same
Confidential Information to Employee in the first instance.
(c) Requests.
To the extent that any court or agency seeks to have Employee disclose Confidential Information, and to the extent allowed by law, Employee
shall promptly inform the Company, and Employee shall take such reasonable steps to prevent disclosure of Confidential Information until
the Company has been informed of such requested disclosure. To the extent that Employee obtains information on behalf of the Company Group
that may be subject to attorney-client privilege as to any member(s) of the Company Group’s attorneys, Employee shall take reasonable
steps to maintain the confidentiality of such information and to preserve such privilege.
-4-
(d) Trade
Secrets. In compliance with 18 U.S.C. § 1833(b) (“Section 1833(b)(1)”), as established by the Defend Trade
Secrets Act of 2016, Employee is given notice of the following immunities listed in Sections 1833(b)(1) and (2) (Immunity From Liability
For Confidential Disclosure Of A Trade Secret To The Government Or In A Court Filing): (1) IMMUNITY. An individual shall not be held criminally
or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that (A) is made (i) in confidence
to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of
reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding,
if such filing is made under seal. (2) USE OF TRADE SECRET INFORMATION IN ANTI-RETALIATION LAWSUIT. An individual who files a lawsuit
for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual
and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under
seal; and (B) does not disclose the trade secret, except pursuant to court order.
(e) Return
of Property. Upon the Termination Date or at the Company’s earlier request, Employee will promptly return to the Company any
and all records, documents, data, memoranda, reports, physical property, information, computer disks, tapes or software or other materials,
and all copies thereof, relating to any of the businesses of the Company Group obtained by Employee during his or her employment with
any member(s) of the Company Group. Employee further agrees to deliver to the Company, at its request, any computers in Employee’s
possession or control which have contained any Confidential Information for the purpose of ensuring that all Confidential Information
stored on the computers has been delivered to the Company.
(f) Cooperation
in Certain Matters. Employee agrees that, during the Employment Period and after the Termination Date, Employee will cooperate with
the Company in any current or future or potential legal, business or other matters in any reasonable manner as the Company may request,
including but not limited to meeting with and fully answering the questions of the Company or its representatives or agents, and in any
legal matter testifying and preparing to testify at any deposition or trial; provided, however, that this Section 6(f) shall not apply
with respect to any claims made against Employee arising out of this Agreement. The Company agrees to compensate Employee for any reasonable
expenses incurred as a result of such cooperation. Should Employee be compelled to testify, nothing in this Agreement is intended or shall
prohibit Employee from providing complete and truthful testimony.
(g) Work
Product. Employee agrees that all inventions, innovations, discoveries, improvements, developments, trade secrets, processes, procedures,
methods, designs, analyses, drawings, reports and all similar or related information which relates to any member of the Company Group’s
actual or anticipated businesses, research and development or existing or future products or services and which are conceived, developed
or made, in whole or in part, by the Employee while employed by any member(s) of the Company Group (“Work Product”)
belong to the Company Group. Employee shall promptly inform the Company of such Work Product, and shall execute such assignments as the
Company or other member(s) of the Company Group may request to transfer to the Company or other member(s) of the Company Group the benefits
of the Work Product, in whole or in part, or conceived by Employee either alone or with others, which result from any work which Employee
may do for or at the request of the Company or any other member(s) of the Company Group, whether or not conceived by Employee while on
holiday, on vacation, or off the premises of the Company, including such of the foregoing items conceived during the course of employment
which are developed or perfected after the Termination Date. Employee shall assist the Company, any other member(s) of the Company Group,
or its respective nominee to obtain patents, trademarks and service marks and Employee agrees to execute all documents and to take all
other actions which are necessary or appropriate to secure to the Company Group the benefits thereof. Such patents, trademarks and service
marks shall become the property of the Company Group. Employee shall deliver to the Company all sketches, drawings, models, figures, plans,
outlines, descriptions or other information with respect thereto.
-5-
(h) Disclosures.
This Agreement shall not in any way prevent Employee from cooperating with any investigation by any federal, state or local governmental
agency. Nothing in this Agreement prohibits Employee from reporting possible violations of applicable law or regulation to any governmental
agency or entity or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation.
7. Code
Section 409A. The intent of the Parties is that payments and benefits under the Agreement comply with or be exempt from Section
409A of the Internal Revenue Code of 1986, as amended (“Code Section 409A”), and the regulations and guidance promulgated
thereunder and, accordingly, to the maximum extent permitted the Agreement shall be interpreted to be in compliance therewith or exempt
therefrom. To the extent any such cash payment or continuing benefit payable upon Employee’s termination of employment is nonqualified
deferred compensation subject to Code Section 409A, then, only to the extent required by Code Section 409A, such payment or continuing
benefit shall not commence until the date that is six (6) months after the date of separation from service. All references in this Agreement
to Employee’s termination of employment shall mean a “separation from service” within the meaning of Code Section 409A
and Treasury Regulation Section 1.409A-1(h)(1)(ii). Any series of payments hereunder shall be considered a series of separate payments
for purposes of Code Section 409A. To the extent any reimbursements or in-kind benefit payments under this Agreement are subject to Code
Section 409A, such reimbursements and in-kind benefit payments shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv)
(or any similar or successor provisions). The preceding shall not be construed as a guarantee of any particular tax effect or indemnity
for Employee’s compensation and benefits, and the Company does not guarantee that any compensation or benefits provided under this
Agreement will satisfy the provisions of Code Section 409A.
8. No
Conflict. Employee represents that Employee is not a party to any agreement with any third party containing a non-competition
provision or other restriction that would prohibit or restrict Employee’s employment with the Company or any part of the services
that Employee provides to the Company, the Company Group or their respective clients. Moreover, Employee represents that Employee is not
limited by any court order or other legal obligation from performing any assigned duties for the Company or the Company Group and Employee
has no rights that may conflict with the interests of the Company or the Company Group or with Employee’s obligations hereunder.
9. Change
of Title, Duties. Employee agrees that if, at any time during the Employment Period, Employee’s title or duties are changed
by the Company, or Employee is transferred to employment with any other member of the Company Group, Employee will continue to be bound
to the terms and conditions of this Agreement.
-6-
10. Validity.
If any one or more of the provisions contained in the Agreement shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
11. Reasonableness
of Restrictions/Injunctive Relief.
(a) Employee
acknowledges that his or her rights to disclose Confidential Information and trade secrets are limited hereby only to the extent necessary
to protect the Company and the Company Group and that, in the event Employee’s employment with the Company terminates for any reason,
Employee will be able to earn a livelihood without violating the foregoing restrictions. Employee acknowledges that the restrictions cited
herein are reasonable and necessary for the protection of the Company’s and the Company Group’s legitimate business interests.
(b) Employee
acknowledges that because the services to be rendered by Employee are of a special, unique and extraordinary character and because, in
connection with such services, Employee has access to Confidential Information and Work Product vital to the Company’s and the Company
Group’s business, money damages would be an inadequate remedy for any breach of this Agreement. By reason of this, Employee consents
and agrees that in the event of a breach or threatened breach of this Agreement by Employee, the Company would sustain irreparable harm
and, therefore, in addition to any other remedies which the Company may have under this Agreement or otherwise, the Company shall be entitled
to an injunction from any court of competent jurisdiction (without posting a bond or other security) restraining Employee from committing
or continuing any such violation of this Agreement, including, without limitation, restraining Employee from disclosing, using for any
purpose, selling, transferring or otherwise disposing of, in whole or in part, any trade secrets, Confidential Information, proprietary
information, client or customer lists or other information pertaining to the financial condition, business, manner of operation, affairs,
plans or prospects of the Company. Employee acknowledges that damages at law would not be an adequate remedy for violation of this Agreement,
and Employee therefore agrees that the provisions may be specifically enforced against Employee in any court of competent jurisdiction.
Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach
or threatened breach, including the recovery of damages.
12. Withholding.
All compensation payable under this Agreement shall be subject to customary withholding taxes and other employment taxes as required
with respect to compensation paid by a corporation to an employee and the amount of compensation payable hereunder shall be reduced appropriately
to reflect the amount of any required withholding. The Company shall have no obligation to make any payments to Employee or to make Employee
whole for the amount of any required taxes.
13. Successors.
This Agreement shall be binding on, and inure to the benefit of, the Company and its successors and assigns and any person acquiring,
whether by purchase of membership interests, merger, reorganization, consolidation, by purchase of assets or otherwise, all or substantially
all of the assets of the Company. Employee agrees that the Company may assign its rights and obligations under this Agreement. Employee
may not assign this Agreement.
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14. Nonalienation.
The interests of Employee under this Agreement are not subject to the claims of his or her creditors, other than the Company, and may
not otherwise be voluntarily or involuntarily assigned, alienated or encumbered.
15. Notification.
Employee shall notify all future employers of the existence of Section 6 of this Agreement and the terms hereof, to the extent then still
in effect. Employee will also provide the Company with information the Company may from time to time request to determine Employee’s
compliance with the terms of this Agreement. Employee hereby authorizes the Company to contact Employee’s future employers and other
parties with whom Employee has engaged or may engage in any business relationship to determine Employee’s compliance with this Agreement
and to communicate the contents of this Agreement to such employers and parties.
16. Right
of Set Off. In the event of a breach by Employee of the provisions of this Agreement, the Company is hereby authorized at any
time and from time to time (and Employee hereby agrees to execute any necessary documents consenting to such authorization), to the fullest
extent permitted by law, and after ten (10) days prior written notice to Employee, to set-off and apply any and all amounts at any time
held by the Company on behalf of Employee under this Agreement and all indebtedness at any time owing by the Company to Employee against
any and all of the obligations of Employee now or hereafter existing.
17. Governing
Law. In the event of any dispute arising under this Agreement, it is agreed that the laws of the State of California shall govern
the interpretation, validity and effect of this Agreement without regard to the place of performance or execution thereof.
18. Enforcement.
The Parties hereby submit to the jurisdiction and venue of any state or federal court located within the City of Los Angeles in the State
of California and/or the Central District of California for resolution of any and all claims, causes of action or disputes arising out
of, related to or concerning this Agreement and agree that services by registered mail to the addresses set forth below shall constitute
sufficient service of process for any such action. If any Party is required to seek enforcement of any of the provisions of this Agreement,
the Party bringing the action will be entitled to recover from the other Party(ies) its reasonable attorneys’ fees plus costs and
expenses as to any issues on which it prevails.
19. Notices.
All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b) sent by facsimile, portable document format (a/k/a “.pdf”)
or other electronic transmission, provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses
and facsimile numbers set forth below (or to such other addresses and facsimile numbers as a Party may designate by notice to the other
Parties):
if to the Company, to:
Amy Rice
President and Chief Operating Officer
12276 San Jose Blvd, Suite 426,
Jacksonville,
FL 32223
Email: ARice@proautologistics.com
Tel: (904) 752-9985
if to Employee, to:
Steven Hansen
3 Johns Canyon Rd
Rolling Hills, CA 90274
Email: steve@hansenadkins.com
Tel: 310-940-2056
-8-
20. Waiver
of Breach. The waiver by either the Company or Employee of a breach of any provision of this Agreement shall not operate as or
be deemed a waiver of any subsequent breach by either the Company or Employee. Continuation of payments hereunder by the Company following
a breach by Employee of any provision of this Agreement shall not preclude the Company from thereafter terminating said payments based
upon the same violation.
21. Survival
of Agreement. Except as otherwise expressly provided in this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of Employee’s employment with the Company.
22. Acknowledgment
by Employee. Employee represents to the Company that he is knowledgeable and sophisticated as to business matters, including the
subject matter of this Agreement, that he has read this Agreement and that he understands its terms. Employee acknowledges that, before
assenting to the terms of this Agreement, Employee has been given a reasonable time to review it, to consult with counsel of his choice,
and to negotiate at arm’s-length with the Company as to the contents.
23. Other
Agreements and Modification. This Agreement constitutes the sole and complete Agreement between the Company and Employee and supersedes
all other agreements, both oral and written, between the Company and Employee with respect to the matters contained herein. No verbal
or other statements, inducements, or representations have been made to or relied upon by Employee. This Agreement may only be amended
or cancelled by written mutual agreement executed by the parties. The Parties have read and understand this Agreement.
24. Ambiguities.
This Agreement has been negotiated at arms-length between persons knowledgeable in the matters dealt with herein. In addition, each Party
has been represented by experienced and knowledgeable legal counsel. Accordingly, the Parties agree that neither the Company nor Employee
is the drafting Party and that any rules of law or any other statutes, legal decisions or common law principles of similar effect that
require interpretation of any ambiguities in this Agreement against the Party that has drafted it are of no application and are hereby
expressly waived. The provisions of this Agreement shall be interpreted in a reasonable manner to give effect to the intentions of the
Parties.
25. Counterparts.
This Agreement may be executed in more than one counterpart, each of which shall be deemed an original instrument and all of which
together shall constitute a single instrument. Execution and delivery of this Agreement by electronic exchange bearing the copies of a
Party’s signature shall constitute a valid and binding execution and delivery of this Agreement by such Party. Such electronic copies
shall constitute enforceable original documents.
* * * * *
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IN WITNESS WHEREOF, Employee
has hereunto set his or her hand, and the Company has caused these presents to be executed in their names and on their behalf, as of the
date above first written.
THE COMPANY:
Hansen & Adkins Auto Transport, LLC
By:
/s/ Amy Rice
Name:
Amy Rice
Title:
Authorized Signatory
THE PARENT:
Proficient Auto Logistics, Inc.
By:
/s/ Amy Rice
Name:
Amy Rice
Title:
Authorized Signatory
EMPLOYEE:
/s/ Steve Hansen
Steven Hansen
Signature Page
Employment Agreement
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EX-10.2 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (3552 GREEN AVENUE), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC
EX-10.2
Filename: ea031002801ex10-2.htm · Sequence: 3
Exhibit 10.2
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT
LEASE – NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic
Provisions (“Basic Provisions”).
1.1 Parties.
This Lease(“Lease”), dated for reference purposes only 8/10/2026 , is made by and between
3611 FARQUHAR INVESTMENTS, LLC (“Lessor”) and HANSEN & ADKINS AUTO TRANSPORT, LLC (”Lessee”),
(collectively the “Parties,” or individually a “Party”).
1.2 Premises:
That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, commonly known
as (street address, city, state, zip): 3552 Green Avenue, Los Alamitos, CA 90720 (“Premises”). The Premises
are located in the County of Orange, CA , and are generally described as (describe briefly the nature of the property and, if applicable,
the “Project,” if the property is located within a Project): Entire building and surrounding parking and landscaped
areas. (See also Paragraph 2)
1.3 Term:
1 years and 4.61 months(“Original Term”) commencing
8/13/26 (“Commencement Date”) and ending 12/31/2027 (“Expiration
Date”). (See also Paragraph 3)
1.4 Early
Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing N/A
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)
1.5 Base
Rent: $22,605.00 per month (“Base Rent”), payable on the 1st
day of each month commencing 8/13/2026 . (See also Paragraph 4)
☒ If
this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 52 .
1.6 Base
Rent and Other Monies Paid Upon Execution:
(a) Base
Rent: $22,605.00 for the period 8/13/2026 - 12/31/2027 .
(b) Security
Deposit: $0 (“Security Deposit”). (See also Paragraph 5)
(c) Association
Fees: $0 for the period __________.
(d) Other:
$0 for 0 .
(e) Total
Due Upon Execution of this Lease: $13,854.68 .
1.7 Agreed
Use: office use . (See also Paragraph 6)
1.8 Insuring
Party. Lessor is the “Insuring Party” unless otherwise stated herein. (See also Paragraph 8)
Page 1 of 32
1.9 Real
Estate Brokers. (See also Paragraph 15 and 25) Not Applicable. No Brokers in this transaction.
(a) Representation:
Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Relationship, confirms and consents to the following agency
relationships in this Lease with the following real estate brokers (“Broker(s)”) and/or their agents (“Agent(s)”):
Lessor’s Brokerage Firm _____ License No.
_____ is the broker of (check one): ☐ the Lessor; or ☐ both the Lessee and Lessor (dual agent).
Lessor’s Agent·_____ License No.
_____ is (check one): ☐ the Lessor’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
Lessee’s Brokerage Firm _____ License No.
____ is the broker of (check one): ☐ the Lessee; or ☐ both the Lessee and Lessor (dual agent).
Lessee’s Agent _____ License No. _____ is
(check one): ☐ the Lessee’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
(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 _____ or _____% of the total Base Rent) for the brokerage
services rendered by the Brokers.
1.10 Guarantor.
The obligations of the Lessee under this Lease are to be guaranteed by _____ (“Guarantor”). (See also Paragraph 37)
1.11 Attachments.
Attached hereto are the following, all of which constitute a part of this Lease:
☒ an Addendum consisting of Paragraphs 51 through 53 ;
☐ a plot plan depicting the Premises;
☐ a current set of the Rules and Regulations;
☐ a Work Letter;
☐ other (specify): _____.
Page 2 of 32
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. While the approximate square footage of the Premises may have been used in the marketing
of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment
should the actual size be determined to be different. NOTE: Lessee is advised to verify the actual size prior to executing this Lease.
2.2 Condition.
Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs (“Start Date”), and, so long as the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if any, and all other
such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free
of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state
or federal law. If a non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction
or fail within the appropriate warranty period, Lessor shall, as Lessor’s sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, 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 Building. 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. Lessor also warrants, that unless otherwise specified in writing,
Lessor is unaware of (i) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured
by the Premises; and (iii) any bankruptcy proceeding affecting the Premises,
2.3 Compliance.
Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants
or restrictions of record, regulations, and ordinances (“Applicable Requirements”) that were in effect at the time
that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see
Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE:
Lessee is responsible for determining whether or not the 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 Lessor’s expense. If Lessee does not give Lessor written notice of a non-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 Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall
allocate the cost of such work as follows:
(a) Subject
to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee
as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such Capital
Expenditure is required during the last 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 to pay the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.
Page 3 of 32
(b) If
such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during
the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th
of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation
at any time. If, however, 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 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days
written notice to Lessor.
(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use
or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii)
complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.
2.4 Acknowledgements.
Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Lessor
and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities
Act), and their suitability for Lessee’s intended use, (c) 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, (d) it is not relying on
any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to
Lessee’s decision to Lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers
have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability
and/or suitability of all proposed tenants.
2.5 Lessee
as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.
3. Term.
3.1 Term.
The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early
Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises
being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to
pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such Early Possession
shall not affect the Expiration Date.
Page 4 of 32
3.3 Delay
In Possession. Lessor agrees to use commercially reasonable efforts to deliver exclusive possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be obligated
to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, as the same may be extended under the terms of any Work letter executed by Parties, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee’s
right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee
Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1 Rent
Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to
be rent (“Rent”).
4.2 Payment.
Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except
as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee
shall be obligated to pay the amount set forth in this Lease. 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 Charge and Lessor, at its option, may require all
future Rent be paid by cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or
costs.
4.3 Association
Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner’s association or condominium
fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent.
Page 5 of 32
5. Security
Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future,
and/ 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 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security
Deposit not used or applied by Lessor. Lessor shall upon written request provide Lessee with an accounting showing how that portion of
the Security Deposit that was not returned was applied. 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. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN
LIEU OF PAYMENT OF THE LAST MONTH’S RENT.
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. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. 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, byproducts 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,
ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, 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.
Page 6 of 32
(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, comply with all Applicable
Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that
was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.
(d) Lessee
Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless
from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party
(provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the
cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
(e) Lessor
Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse
and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease.
(f) Investigations
and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities
at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor’s investigative and remedial responsibilities.
(g) Lessor
Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee
is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph
13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated
cost to remediate such condition exceeds 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. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the
cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.
In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably
possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.
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6.3 Lessee’s
Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense,
fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner
to the Premises, without regard to whether said Applicable Requirements are now in effect or become 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 of any documents involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness
or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold
in the Premises. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10
days of the receipt of a written request therefor. In addition, Lessee shall provide Lessor with copies of its business license, certificate
of occupancy and/or any similar document within 10 days of the receipt of a written request therefor.
6.4 Inspection;
Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants authorized by Lessor
shall have the right to enter into Premises at any time in the case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting and/or testing the condition of the Premises and/or 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 Hazardous Substance
Condition (see paragraph 9.1(e)) 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. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to
Lessor within 10 days of the receipt of a written request therefor. Lessee acknowledges that any failure on its part to allow such inspections
or testing will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which
will be extremely difficult to ascertain. Accordingly, should the Lessee fail to allow such inspections and/or testing in a timely fashion
the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing
Base Rent or $100, whichever is greater for the remainder to the Lease. The Parties agree that such increase in Base Rent represents fair
and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to allow such inspection
and/or testing. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such
failure nor prevent the exercise of any of the other rights and remedies granted hereunder.
7. Maintenance;
Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee’s
Obligations.
(a) In
General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole
expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use,
any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such
as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement
and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee’s obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g.
graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including,
when necessary, the exterior repainting of the Building.
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(b) Service
Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if
any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including
fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers. However,
Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure
to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to
Lessor a sum equal to 115% of the cost thereof.
(d) Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting
from Lessee’s failure to exercise and perform good maintenance practices, If an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the
cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term
of this Lease or any extension thereof, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost
of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost per month).
Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2 Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.3 Utility
Installations; Trade Fixtures; Alterations.
(a) Definitions.
The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in
or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed
without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations”
are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(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 Alterations or 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, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for
additional modifications and/or improvements to the Premises resulting from Applicable Requirements, such as compliance with Title 24,
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, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions
of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. For work which costs an amount 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.
Page 9 of 32
(c) Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises
or any interest therein. Lessee shall give Lessor not less than 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 and the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises 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 Premises)
to the level specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.
Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below.
8. Insurance;
Indemnity.
8.1 Payment
For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior
to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within
10 days following receipt of an invoice.
Page 10 of 32
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. Lessee
shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement. 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. Lessee shall provide an endorsement on its liability policy(ies) which
provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain
liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein. •
8.3 Property
Insurance- Building, Improvements and Rental Value.
(a) Building
and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to
the full insurable 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 Lessee’s personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department
of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage
has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.
(b) Rental
Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental
Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss.
(c) Adjacent
Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused
by Lessee’s acts, omissions, use or occupancy of the Premises.
Page 11 of 32
8.4 Lessee’s
Property; Business Interruption Insurance; Worker’s Compensation Insurance.
(a) Property
Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed
$1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures
and Lessee Owned Alterations and Utility Installations.
(b) Business
Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) Worker’s
Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by
Applicable Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement. Lessee shall provide Lessor with
a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.
(d) No
Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein
are adequate to cover Lessee’s property, business operations or obligations under this Lease.
8.5 Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating”
of at least A-, VII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may
be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required
endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification
except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may increase his liability insurance
coverage and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be
for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure
and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver
of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required,
or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right
to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated
thereby.
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8.7 Indemnity.
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises,
Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of,
involving, or in connection with, a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee
and/or by Lessee’s employees, contractors or invitees. If any action or proceeding is brought against Lessor by reason of any of
the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 Exemption
of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor
nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property
of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures,
or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of
the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any
other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other Lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse
in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to
the provisions of paragraph 8.
8.9 Failure
to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose
Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult
to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide
Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically
increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this
Lease.
9. Damage
or Destruction.
9.1 Definitions.
(a) ”Premises
Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
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(b) “Premises
Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits involved.
(d) “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) “Hazardous
Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2 Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense,
repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make
the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute
the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives 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 in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect
by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) 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.
9.3 Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate
this Lease by giving written notice to Lessee within 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.
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9.4 Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage
Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month’s
Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such
damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written
notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds,
Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then
this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.
9.6 Abatement
of Rent; Lessee’s Remedies.
(a) Abatement.
In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee ls not responsible
under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.
If Lessor is 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 Lessee’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 as of the date specified in said notice. If the repair or restoration is commenced
within such 30 days, this Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization
of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination;
Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much
of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.
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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 Premises or 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 Building address. Real Property Taxes shall also include any tax, fee, levy, assessment or charge,
or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change
in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this
Lease.
10.2 Payment
of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20
days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration
or termination of this Lease, Lessee’s share of such installment shall be prorated. In the event Lessee incurs a late charge on
any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee
monthly in advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount
of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee
shall pay Lessor, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance
payments may be treated by Lessor as an additional Security Deposit.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor
from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available.
10.4 Personal
Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee
Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement
setting forth the taxes applicable to Lessee’s property.
11. Utilities
and Services.
11.1 Lessee
shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion,
to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable
in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental
request or directions.
11.2 Within
fifteen days of Lessor’s written request, Lessee agrees to deliver to Lessor such information, documents and/or authorization as
Lessor needs in order for Lessor to comply with new or existing Applicable Requirements relating to commercial building energy usage,
ratings, and/or the reporting thereof.
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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) Unless
Lessee is a corporation and its stock is publicly traded on a national stock exchange, 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 buyout 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 of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. “Net Worth of Lessee” shall mean the net
worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An
assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d), or
a non-curable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting
as a non-curable 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 110% of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 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.
(f) Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding
the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection
with the installation of a vending machine or payphone shall not constitute a subletting.
12.2 Terms
and Conditions Applicable to Assignment and Subletting.
(a) Regardless
of Lessor’s 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, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
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(b) Lessor
may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute
a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.
(c) Lessor’s
consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In
the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s
remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of $500 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. (See also Paragraph 36)
(f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.
(g) Lessor’s
consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)
12.3 Additional
Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance
of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then
outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform
and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this
Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee
to the contrary.
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(b) In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for
any prior Defaults or Breaches of such sublessor.
(c) Any
matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d) No
sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.
(e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default;
Breach; Remedies.
13.1 Default;
Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A “Breach” is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The
abandonment of the Premises; the vacating of the Premises prior to the expiration or termination of this Lease without providing a commercially
reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,
or without providing reasonable assurances to minimize potential vandalism; or failure to deliver to Lessor exclusive possession of the
entire Premises in accordance herewith prior to the expiration or termination of this Lease.
(b) The
failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to
a third party, when due to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee.
THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The
failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public
or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days
following written notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, the
Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.
(d) The
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material
safety data sheets (MSDS), or (ix) 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.
(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b),(c) or (d), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required
for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.
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(f) The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition
filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially
all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located
at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in
the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and
not affect the validity of the remaining provisions.
(g) The
discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(h) If
the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s
becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory 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
or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies.
If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor
an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event
of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:
(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion
of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus
one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover any damages to which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,
or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.
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(b) Continue
the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.
(c) Pursue
any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy
of the Premises.
13.3 Inducement
Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed
by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s
entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions,” shall be
deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach
by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed
a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late
Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by
Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately 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 by reason of such late payment. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount,
nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder,
whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary,
Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.
13.5 Interest.
Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the
31st day after it was due. The interest (“Interest”) charged shall be computed at the rate of 10% per annum 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.
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13.6 Breach
by Lessor.
(a) Notice
of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt
by Lessor, and any Lender whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that
more than 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.
(b) Performance
by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek
reimbursement from Lessor for any such expense in excess of such offset. 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 Building, or more than 25% of that portion of the Premises
not occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 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 paid by the condemnor 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
Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, Lessor agrees that: (a) if Lessee exercises any Option,
(b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within
the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent
of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.
The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary.
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15.2 Assumption
of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and 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 to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.
15.3 Representations
and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker, agent or finder (other than the Brokers and Agents, if any) in connection with this Lease, and that no one other
than said named Brokers and Agents is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
16. Estoppel
Certificates.
(a) Each
Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current
“Estoppel Certificate” form published by AIR CRE, plus such additional information, confirmation and/or statements
as may be reasonably requested by the Requesting Party.
(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 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 no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting
Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.
In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent
shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent
or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase in Base Rent represents fair and reasonable
compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to provide the Estoppel Certificate.
Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide
the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.
(c) If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after
written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
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17. Definition
of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior Lease. In the event of a transfer of Lessor’s
title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the
Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon
the Lessor as hereinabove defined.
18. Severability.
The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19. Days.
Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer
to calendar days.
20. Limitation
on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, or its partners, members,
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 Lessor’s partners, members, directors, officers
or shareholders, or any of their personal assets for such satisfaction.
21. Time
of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under
this Lease.
22. No
Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants
to the Brokers that It has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the 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.
23. 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 or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid,
or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking
possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
23.2 Date
of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given
72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service
or courier. Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
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23.3 Options.
Notwithstanding the foregoing, in order to exercise any Options (see paragraph 39), the Notice must be sent by Certified Mail (return
receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt
establishing the date the notice was received by the Lessor.
24. Waivers.
(a) No
waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant
or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s
consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent.
(b) The
acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of monies or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
(c) THE
PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF
ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures
Regarding the Nature of a Real Estate Agency Relationship.
(a) When
entering into a discussion with a real estate agent regarding a 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 in this transaction, as follows:
(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 Lessor: A fiduciary duty of utmost care, integrity,
honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (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.
(ii) Lessee’s
Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not 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. An agent acting
only for a Lessee 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 Lessor: (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.
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(iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licensees, can
legally be the agent of both 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 agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary
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 Lessor and Lessee, the agent may not, without the express
permission of the respective Party, disclose to the other Party confidential information, including, but not limited to, facts relating
to either Lessee’s or Lessor’s financial position, motivations, bargaining position, or other personal information that may
impact rent, including Lessor’s willingness to accept a rent less than the listing rent or Lessee’s willingness to pay rent
greater than the rent offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility
to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding
of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult
a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the
federal and state tax consequences of a transaction can be complex and subject to change.
(b) Brokers
have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after
the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit
and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing
limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor
and Lessee agree to identify to Brokers as “Confidential” any communication or information given Brokers that is considered
by such Party to be confidential.
26. No
Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination
of this Lease. At or prior to the expiration or termination of this Lease Lessee shall deliver exclusive possession of the Premises to
Lessor. For purposes of this provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises,
removed all of its personal property therefrom and that the Premises have been returned in the condition specified in this Lease. In the
event that Lessee does not deliver exclusive possession to Lessor as specified above, then Lessor’s damages during any holdover
period shall be computed at the amount of the Rent (as defined in Paragraph 4.1) due during the last full month before the expiration
or termination of this Lease (disregarding any temporary abatement of Rent that may have been in effect), but with Base Rent being 150%
of the Base Rent payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding
over by Lessee.
27. Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
29. Binding
Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or
similar technology shall be legal and binding.
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30. Subordination;
Attornment; Non-Disturbance.
30.1 Subordination.
This Lease and any Option granted hereby shall be subject and subordinate to any ground Lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any lender may elect to have this Lease and/or any Option granted hereby superior to the lien
of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment.
In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination
of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3,
attorn to such new owner, and upon request, enter into a new 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 the new owner, this Lease will automatically become a new Lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior
lessor or with respect to events 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 which was not paid or credited to such new owner.
30.3 Non-Disturbance.
With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from
the lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing.
The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that,
upon written request from Lessor or a lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
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31. Attorneys’
Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled
to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action
or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor
shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).
32. Lessor’s
Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises
as long as there is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without abatement of
rent or liability to Lessee.
33. Auctions.
Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs.
Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the
last 6 months of the term hereof. Except for ordinary “for sublease” signs, Lessee shall not place any sign upon the Premises
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.
35. Termination;
Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease
or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s
failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor’s election to have such event constitute the termination of such interest.
36. Consents.
All requests for consent shall be in writing. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required
to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs
and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred
in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment,
a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach
by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable
with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 10 business days following such request.
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37. Guarantor.
37.1 Execution.
The Guarantors, if any, shall each execute a guaranty in the form most recently published by AIR CRE, and each such Guarantor shall have
the same obligations as Lessee under this Lease.
37.2 Default.
It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution
of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a
corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial
statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
38. Quiet
Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the
term hereof.
39. Options.
If Lessee is granted any Option, as defined below, then the following provisions shall apply.
39.1 Definition.
“Option” shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term
of or renew any Lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to Lease either the Premises
or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase
the Premises or other property of Lessor.
39.2 Options
Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.
39.3 Multiple
Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless
the prior Options have been validly exercised.
39.4 Effect
of Default on Options.
(a) Lessee
shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default,
whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
(b) The
period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) An
Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if,
after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for
a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a
Breach of this Lease.
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40. Multiple
Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform
to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties,
including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses
incurred in connection with such rules and regulations.
41. 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 no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42. Reservations.
Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43. Performance
Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party
to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.
A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived
its right to protest such payment.
44. Authority;
Multiple Parties; Execution.
(a) 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.
(b) If
this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be jointly and severally
liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such
document.
(c) This
Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
45. Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer.
Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to Lease
to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
47. Amendments.
This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
48. 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 LEASE.
Page 30 of 32
49. Arbitration of Disputes. An Addendum
requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease ☐ is ☐ is not
attached to this Lease.
50. Accessibility;
Americans with Disabilities Act.
(a) The
Premises:
☒ have not undergone an
inspection by a Certified Access Specialist (CASp). Note: A Certified Access Specialist (CASp) can inspect the subject premises and determine
whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although
state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee
or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if
requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection,
the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that It received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential except as necessary to complete repairs and corrections
of violations of construction related accessibility standards.
In the event that the Premises have been issued an inspection report
by a CASp the Lessor shall provide a copy of the disability access inspection certificate to Lessee within 7 days of the execution
of this Lease.
(b) Since
compliance with the Americans with Disabilities Act (ADA) and other state and local accessibility statutes are dependent upon Lessee’s
specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in
compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s
expense.
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 AIR CRE
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.
2. RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
WARNING: IF THE PREMISES 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.
Page 31 of 32
The parties hereto have executed this Lease at the place and on the
dates specified above their respective signatures.
Executed at: Los Alamitos, CA
Executed at:
On:
On:
By LESSOR:
By LESSEE:
3611 FARQUHAR INVESTMENTS, LLC
HANSEN & ADKINS AUTO TRANSPORT, LLC
By:
/s/ Steve Hansen
By:
/s/ Amy Rice
Name Printed:
Steve Hansen
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
By:
/s/ Louie Adkins
By:
Name Printed:
Louie Adkins
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Address:
Address:
Federal ID No.:
Federal ID No.:
BROKER
BROKER
Attn:
Attn:
Title:
Title:
Address:
Address:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Federal ID No.:
Federal ID No.:
Broker DRE License #:
Broker DRE License #:
Agent DRE License #:
Agent DRE License #:
Page 32 of 32
ADDENDUM TO LEASE
Date:
8/10/2026
By and Between
Lessor:
3611 FARQUHAR INVESTMENTS, LLC
Lessee:
HANSEN & ADKINS AUTO TRANSPORT, LLC
Property Address:
3552 Green Avenue, Los Alamitos, CA 90720
(street address, city, state, zip)
Paragraph: 51, 52, 53
Paragraph 51: Lessor hereby releases and waives, to the fullest extent
permitted by applicable law, any and all landlord’s liens and/or security interests, statutory or otherwise, now or hereafter created,
in, on and against any furniture, business or trade fixtures, equipment, inventory, or other personal property of Lessee from time to
time situated on or used in connection with the Premises. Lessor shall promptly execute any documents, instruments and agreements reasonably
requested by Lessee to evidence such release and waiver. Lessor further agrees that, within ten (10) days of written request from Lessee,
Lessor shall execute and deliver to any lender providing financing to Lessee a commercially reasonable access agreement in such lender’s
customary form, permitting such lender and its agents to access to the Premises for the purposes of exercising its rights and remedies
with respect to Lessee’s furniture, business or trade fixtures, equipment, inventory, or other personal property situated on or
used in connection with the Premises.
Paragraph 52: Base Rent shall be prorated for 19 of 31 for the month
of August 2026, and shall be set to $13,854.68.
Paragraph 53: The separate Addendum to Lease, Exhibit A, and Schedule
6.2(e) attached hereto are incorporated herein by reference.
In the event of any conflict between the provisions of this Addendum
and the printed provisions of the Lease, this Addendum shall control.
AIR CRE * https://www.aircre.com
* 213-687-8777 * contrats@aircre.com
NOTICE : No part of these works may be reproduced in any form without permission in writing.
Page 1 of 1
Execution Version
ADDENDUM TO LEASE
1. Guarantor: Paragraphs 1.10 and 37 are each hereby deleted in their entirety.
2. Warranty Periods: Paragraph 2.2 is hereby modified as follows:
a. Notwithstanding anything to the contrary contained in Paragraph 2.2, the warranty periods with respect
to (i) the electrical, plumbing, fire sprinkler, lighting, and HVAC systems, shall be one (1) year from the Start Date and (ii) the remaining
systems and other elements of the Building, shall be six (6) months from the Start Date.
b. The first sentence of Section 2.2 is hereby deleted in its entirety and replaced as follows:
Lessor
shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first
occurs (“Start Date”), and,
so long as Lessee is in compliance with Section 7.2, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all other such elements in the Premises,
other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing
walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects, and that
the Premises do not contain hazardous levels of any mold or fungi defined as toxic under Applicable Requirements.
3. Compliance. Paragraph 2.3 is hereby modified as follows:
a. Paragraph 2.3 is hereby modified to add the following language immediately following the last sentence
thereof:
“Notwithstanding anything to
the contrary contained in this Lease, to the extent any improvements are in non-compliance with Applicable Requirements as of the Start
Date, Lessee shall be under no obligation to take any action or incur any expense so as to make any such improvements in compliance with
the Applicable Requirements and such non-compliance shall not be deemed a breach by Lessee hereunder, it being the intent of the parties
that remedying any such non-compliance shall be a Lessor obligation and expense hereunder.”
b. Paragraph 2.3(b) is hereby deleted in its entirety and replaced as follows:
“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 shall pay for such Capital Expenditure.”
4. Lessee as Prior Owner/Occupant: Paragraph 2.5 is hereby deleted in its entirety.
5. Association Fees: Paragraph 4.3 is hereby amended to add the following language immediately following
the last sentence thereof:
“Lessor covenants, warrants and
represents that, as of the Start Date, there are no such owner’s association or condominium fees affecting the Premises.”
6. Security Deposit: Paragraph 5 is hereby deleted in its entirety.
Page 1 of 9
7. Hazardous Substances: Paragraph 6.2 is hereby modified as follows:
a. Paragraph 6.2(b) is hereby deleted in its entirety and replaced as follows:
“Duty to Inform Lessor.
If Lessee becomes aware 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, within ten (10) Business Days of such awareness, 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
Substances, provided, however, that if the Lessee has a good faith reason to believe that there is an immediate danger of personal injury
or property damage as a result of the presence of the Hazardous Substance, the 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 Substances.”
b. Paragraph 6.2(c) is hereby deleted in its entirety and replaced as follows:
“Lessee Remediation. Lessee
shall not cause or permit any Hazardous Substances to be spilled or released in, on, under or about the Premises (including through the
plumbing or sanitary sewer systems) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements, and take,
as and when required by Applicable Requirements, (i) all investigatory and/or remedial action reasonably required, for the maintenance,
security and/or monitoring of the Premises or neighboring properties, and (ii) all remedial action reasonably required for the cleanup
of any contamination of the Premises or neighboring properties, that was caused by Lessee, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the Term of this Lease, by or for Lessee. Notwithstanding the foregoing, Lessee shall not be
responsible or liable for the cleanup, remediation, or any associated costs (including any contributory costs) for Hazardous Substances
present at or otherwise brought onto the Premises by Lessor, its agents, or employees nor for any Pre-Existing Hazardous Substances or
Scheduled Environmental Conditions (as such terms are defined in Paragraph 6.2(e)). In the event of any dispute regarding the attribution
of environmental contamination or liability for conditions at the Premises that may have resulted from activities occurring both prior
to and during the Term, there shall be a rebuttable presumption that such contamination or liability is attributable to Pre-Existing Hazardous
Substances or other pre-existing conditions, and the burden of proof to establish that such contamination or liability is attributable
to Lessee’s activities during the Term shall rest with Lessor.”
c. Paragraph 6.2(d) is hereby deleted in its entirety and replaced as follows:
“Lessee Indemnification.
Lessee and its successors and assigns shall indemnify, defend, reimburse and hold Lessor, its employees and lenders, harmless from and
against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances brought onto the
Premises by or for Lessee during the Term or which are caused by the gross negligence or willful misconduct of Lessee, its agents or employees.
Lessee’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. Notwithstanding anything
to the contrary contained in this Lease, in no event shall Lessee’s indemnification obligations include consequential, special or
punitive damages, including, without limitation, any claims for diminution in value of the Premises, except that the foregoing limitation
shall not apply to any consequential, special or punitive damages awarded to a third party in connection with a third-party claim for
which Lessee is obligated to indemnify Lessor under this Lease, and in such event Lessee’s indemnification obligation shall extend
only to the amounts actually awarded to such third-party in a final, non-appealable judgment in a court of competent jurisdiction.”
Page 2 of 9
d. Paragraph 6.2(e) is hereby deleted in its entirety and replaced as follows:
“Except
as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from
Hazardous Substances which existed 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 (collectively, “Pre-Existing Hazardous Substances”). The parties acknowledge that,
prior to the Start Date, one or more Phase I Environmental Site Assessments were obtained with respect to the Premises for the purpose
of establishing a baseline of environmental conditions existing as of the Start Date. Notwithstanding anything herein to the contrary,
the existence, identification or description of any environmental condition, concern, recognized environmental condition (REC), historical
recognized environmental condition (HREC), controlled recognized environmental condition (CREC), area of concern or similar matter in
any such Phase I Environmental Site Assessment shall not, in and of itself, create any obligation on the part of Lessor to investigate,
remove, remediate, restore or abate such matter unless required by Applicable Requirements. Lessor shall have responsibility under this
Paragraph 6.2 to remediate only those pre-existing environmental conditions as required by Applicable Requirements or otherwise expressly
identified on Schedule 6.2(e) attached hereto (the “Scheduled Environmental Conditions”), and Lessor’s obligation
with respect thereto shall be limited to performing the remediation activities described on such Schedule and such other remediation efforts
as are necessary to comply with Applicable Requirements relating to Hazardous Substances, with the selection of remedial methods, technologies
and cleanup standards to be determined by Lessor in its reasonable discretion without unreasonably interference to or disruption of the
use of the Premises of Lessee. Lessee acknowledges that, except with respect to the Scheduled Environmental Conditions, Lessor shall have
no duty under this Lease to investigate, remove, remediate, restore or abate any environmental condition existing on the Premises prior
to the Start Date solely because such condition was identified or referenced in a Phase I Environmental Site Assessment. Lessor’s
obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement with respect to the Pre-Existing Hazardous Materials, and shall survive the expiration or termination
of this Lease. Lessee shall not, except as required by Applicable Requirements or a governmental order or as otherwise agreed, conduct,
commission, authorize, permit, or cause any Phase II Environmental Site Assessment or other intrusive environmental investigation of the
Premises (each, a “Phase II Investigation”) without Lessor’s prior written consent, which may be granted, conditioned,
delayed, or withheld in Lessor’s sole and absolute discretion. Any voluntary Phase II Investigation consented to by Lessor, shall
be performed by qualified consultants reasonably approved by Lessor, pursuant to a scope of work reasonably approved by Lessor, at Lessee’s
sole cost and expense, in compliance with Applicable Requirements, and subject to Lessee’s obligations to restore the Premises and
indemnify Lessor against all losses, claims, liabilities, costs, and expenses arising from such Phase II Investigation, to the extent
the results of such Phase II Investigation are the responsibility of Lessee hereunder. Lessee shall promptly provide Lessor with copies
of all reports, sampling results, and governmental correspondence relating to any Phase II Investigation. Lessee shall not submit any
report, data, findings, or conclusions generated from any environmental investigation to any governmental authority or other third party
without first providing Lessor with a copy thereof and a reasonable opportunity to review the same; provided, however, that nothing herein
shall prohibit disclosures required by Applicable Requirements or governmental order.
e. The last sentence of Paragraph 6.2(f) is hereby deleted in its entirety and replaced as follows:
“Lessee shall reasonably cooperate
in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the
Premises during normal business hours after reasonable prior written notice in order to carry out Lessor’s investigative and remedial
responsibilities, provided, however, Lessee shall have the right to have a representative of Lessee present upon any entry into the Premises.”
Page 3 of 9
f. Paragraph 6.2(g) is hereby deleted in its entirety and replaced as follows:
“Lessor Termination Option.
If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s
option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition
exceeds 12 times the then monthly Base Rent or $250,000, whichever is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this
Lease as of the date one hundred twenty (120) days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which
the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $250,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurances thereof within thirty (30) days following
such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation
as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds
or assurances thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.”
8. Lessee’s Compliance with Applicable Requirements: Paragraph 6.3 is hereby deleted in its
entirety and replaced as follows:
“Except as otherwise provided
in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants which relate in any manner to the Premises, without regard to whether said Applicable Requirements are now
in effect or become effective after the Start Date. Lessee shall, within ten (10) days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other reasonable documents, and other reasonable information evidencing Lessee’s compliance
with any Applicable’ Requirements specified by Lessor in such request, and shall promptly upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to materially comply with any Applicable Requirements. Likewise, Lessee shall give
written notice to Lessor within ten (10) Business Days of actual knowledge of: (i) any water damage to the Premises or any suspected seepage,
pooling, dampness or other condition reasonably likely to result in the production of mold; or (ii) material mustiness or other odors
reasonably likely to indicate the presence of mold in the Premises. In addition, Lessee shall provide copies of all relevant material
safety data sheets (MSDS) to Lessor within ten (10) days of the receipt of a written request therefor. In addition, Lessee shall provide
Lessor with copies of its business license and certificate of occupancy within ten (10) days of the receipt of a written request therefor.
Notwithstanding anything in this Paragraph 6.3 to the contrary, Lessor may not request compliance documentation more than two (2) times
in any 12-month period; provided, however, this limitation shall not apply in the event Lessor is requesting such compliance documentation
on behalf of Lessor’s lender, insurer or any governmental agency, or in relation to a proposed sale of the Premises.”
Page 4 of 9
9. Inspection Compliance: Paragraph 6.4 is hereby deleted in its entirety and replaced as follows:
“Lessor and Lessor’s “Lender”
(as defined in Paragraph 30) and consultants authorized by Lessor shall have the right to enter the Premises at any time in the case of
an emergency, and otherwise at reasonable times after reasonable written notice, for the purpose of inspecting and/or testing the condition
of the Premises and/or 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 Hazardous Substance Condition (see paragraph 9.1(e)) is found to exist or be imminent, or
the inspection is requested or ordered by a governmental authority, in each case, as a result of a breach of Lessee’s obligations
hereunder. In such case, Lessee shall within ten (10) Business Days of written request therefore, together with reasonable backup documentation,
reimburse Lessor for the reasonable, out-of-pocket cost of such inspection, so long as such inspection is reasonably related to the violation
or contamination resulting from Lessee’s breach. In addition, Lessee shall provide copies of all relevant material safety data sheets
(MSDS) in Lessee’s possession to Lessor within ten (10) days of the receipt of a written request therefor.”
10. Maintenance and Repair Obligations: Paragraphs 7.1 and 7.2 are each hereby deleted in their entirety
and replaced as follows:
“7.1 Lessor’s Obligations:
Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 7.2 (Lessee’s Obligations), 9 (Damage or Destruction)
and 14 (Condemnation), it is intended by the Parties hereto that Lessor shall, except to the extent such maintenance is the responsibility
of Lessee under Paragraph 7.2, at Lessor’s sole expense, keep and maintain in good order and repair (including replacements to the
extent necessary), the following equipment or facilities with respect to the Premises: plumbing, HVAC equipment, boilers, pressure vessels,
fire protection system, walls (interior and exterior), foundations, roofs, roof drainage systems, driveways, parking lots, fences, retaining
walls, sidewalks and parkways located in, on, or adjacent to the Premises, except that Lessee will reimburse Lessor for the reasonable,
out-of-pocket cost of any repair occasioned by the act or negligence of Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.2. Lessee’s Obligations:
a. Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable Requirements), 7.1 (Lessor’s Obligations), 9 (Damage
or Destruction), it is intended by the Parties hereto that Lessee shall, at Lessee’s sole expense, keep and maintain the Premises
in good order and repair in the ordinary course including maintenance and repair of (i) overhead, dock and roll-up doors and door operators;
(ii) entry gates and gate operators; (iii) access control, alarm, monitoring and life-safety systems; (iv) interior electrical systems,
lighting, fixtures and lamping; (v) interior ceilings, walls, floors and finishes; (vi) locks, keying and hardware; (vii) fencing; (viii)
pest control; (ix) landscaping; (x) interior plumbing and exterior landscape irrigation; (xi) HVAC (limited to servicing and preventive
maintenance); and (xii) other routine repairs of the nature customarily performed by a general maintenance contractor or handyman.
b. If Lessee fails to perform Lessee’s
obligations under this Paragraph 7.2, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in
the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put the Premises
in good order, condition and repair, and Lessee shall, within ten (10) Business Days of written demand therefor, pay to Lessor a sum equal
to 110% of the reasonable, out-of-pocket costs thereof.”
11. Alterations: The second sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Lessee may, however, make nonstructural
Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent provided that Lessee delivers
at least ten (10) days prior written 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, will not adversely affect the electrical, plumbing, HVAC, and/or life safety systems, comply
with Applicable Requirements and do not trigger the requirement for additional modifications and/or improvements to the Premises resulting
from Applicable Requirements, such as compliance with Title 24, and the cost of such alteration is not in excess of Fifty Thousand and
00/100 Dollars ($50,000.00).”
Page 5 of 9
12. Removal: The first sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Any Lessee Owned Alteration
or Utility Installation required by Lessor to be removed by the expiration or termination of this Lease shall be identified by Lessor
at the time for which Lessor provides consent to the installation of such Lessee Owned Alteration or Utility Installation.”
13. Payment for Insurance: The last sentence of Paragraph 8.1 is hereby deleted in its entirety and
replaced as follows:
“Notwithstanding anything to
the contrary contained in this Section 8.1, so long as no insurance claims were filed in the immediately preceding calendar year as a
result of Lessee’s actions, Lessee shall not be responsible for any insurance premiums increases attributable to insurance held
by Lessor (“Lessor’s Premiums”) in excess of 2.5% of such costs for the immediately preceding calendar year.
Lessee shall pay to Lessor, on the first day of each calendar month, together with Base Rent, one-twelfth (1/12) of the estimated Lessor’s
Premiums for such calendar year (the “Monthly Premiums”). Within sixty (60) days following the end of each calendar
year during the Lease term, Lessor shall furnish Lessee with a written statement (each, an “Insurance Statement”) setting
forth, in reasonable detail, Lessor’s Premiums incurred by Lessor for the preceding calendar year. If the Insurance Statement indicates
the total actual Lessor’s Premiums exceeded the total Monthly Premium payments made by Lessee during such year, then Lessee shall
pay the deficiency to Lessor within thirty (30) days after Lessee’s receipt of the Insurance Statement. If the Insurance Statement
indicates that the total Monthly Premium payments made by Lessee during the preceding calendar year exceeded the total actual Lessor’s
Premiums for such year, then Lessor shall credit the amount of overpayment against the next Monthly Premium payment(s) due from Lessee;
provided, however, if this Lease has expired or been terminated, then Lessor shall refund any overpayment to Lessee within thirty (30)
days after Lessor’s delivery of the Insurance Statement. Lessee shall have the right, at Lessee’s sole cost and expense, to
examine and audit Lessor’s books and records relating to Lessor’s Premiums for any calendar year.”
14. Real Property Taxes: Paragraph 10 is hereby modified as follows:
a. Paragraph 10.2 is hereby deleted in its entirety and replaced as follows: “All Real Property Taxes
shall be paid by Lessor.”
b. Paragraph 10.3 is hereby deleted in its entirety.
15. Assignment and Subletting: Paragraph 12.1(g) is hereby added immediately following Paragraph 12.1(f):
“12.1(g) Notwithstanding anything
to the contrary in this Lease, including, without limitation, Paragraphs 12.1(a)-(d) hereof, Lessee may, without the prior written consent
of Lessor, (i) assign this Lease or sublet the Premises or any portion thereof to any entity that controls, is controlled by, or is under
common control with, Lessee, (ii) effect, directly or indirectly, (a) any merger, consolidation, recapitalization or other similar transaction
of Lessee, (b) the sale, assignment, conveyance, or other transfer of all or substantially all of Lessee’s assets, (c) a transfer
of all or substantially all of the stock, equity or other interests of Lessee, and/or (d) any other transaction, or series of transactions,
that results in the change of control of Lessee (each of the foregoing transactions described in (a), (b), (c) and (d), a “Corporate
Transaction”), (iii) assign this Lease in connection with a Corporate Transaction. The foregoing assignments, subleases and
Corporate Transactions shall be referred to herein as “Permitted Transfers”. Provided, however, that no such Permitted
Transfer shall release Lessee from any of its obligations under this Lease, and Lessee shall remain fully and primarily liable for the
payment of Rent and the performance of all other obligations to be performed by Lessee hereunder.
Page 6 of 9
16. Defaults: Paragraph 13 is hereby modified as follows:
a. Paragraph 13.1(d) is hereby deleted in its entirety and replaced with the following:
“The failure by Lessee to provide
(i) reasonable written evidence of compliance with Applicable Requirements, (ii) intentionally omitted, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) any document requested
under Paragraph 42, (vii) material safety data sheets (MSDS), or (viii) any other documentation or information which Lessor may reasonably
require of Lessee, each to the extent expressly required to be provided by Lessee under the terms of this Lease, where any such failure
continues without cure for a period of 30 days following written notice to Lessee.”
b. The second sentence of 13.2 is hereby deleted in its entirety and replaced with the following:
“Lessee shall pay to Lessor an
amount equal to 110% of the reasonable, out-of-pocket costs and expenses actually incurred by Lessor in such performance within ten (10)
Business Days of receipt of an invoice therefor.”
c. Paragraph 13.3 is hereby deleted in its entirety.
d. Paragraph 13.6(c) is hereby added immediately following Paragraph 13.6 (b): “13 .6(c) Notwithstanding
anything to the contrary contained herein, including, without limitation, Paragraphs 13.6 (a)-(b) hereof, in the event Lessor fails to
perform or provide any Essential Service (as defined herein) to the Premises for more than ten (10) consecutive Business Days following
notice thereof from Lessee, and such failure materially interferes with Lessee’s ability to conduct its business in or from the
Premises, then the Rent shall thereupon abate commencing on the eleventh (11th) consecutive Business Day, based upon the portion
of the Premises so affected or the impact on Lessee’s conduct of its business in and from the Premises until such failure is remedied.
Lessee shall reasonably cooperate with Lessor to the extent reasonably necessary for Lessor to perform or provide any Essential Service.
In the event Lessee fails to cooperate, Lessor’s time to satisfy its obligations under this section shall be extended in accordance
with the delay caused by Lessee. “Essential Service” means any of the following: heating or air-conditioning, electricity,
water or plumbing systems, parking or anything that prevents Lessee from accessing or using the Premises for normal business purposes
provided, however, that “Essential Service” shall strictly exclude any maintenance, repair, servicing, or other obligations
of Lessee set forth under Section 7.2 of this Lease. For the avoidance of doubt, during any such abatement, Lessee may (but shall not
be obligated to) exercise Lessee’s self-help rights in accordance with Section 13.6(b) to remedy such failure.”
17. Brokers: Paragraphs 1.9, 15.1, 15.2 are each hereby deleted in their entirety. Paragraph 15.3 is
deleted in its entirety and replaced as follows:
“Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker, agent or finder in connection with this Lease, and
that no one is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto.”
Page 7 of 9
18. Estoppel Certificates:
a. The last three sentences of Paragraph 16(b) are hereby deleted in their entirety and replaced as follows:
a. “Accordingly, should the Lessee fail to execute and deliver any Estoppel Certificate required under
this Lease within the time required, Lessee shall pay to Lessor, as additional rent, an administrative charge of Two Hundred Fifty Dollars
($250.00) per day commencing on the fifth (5th) day after written notice from Lessor of such failure and continuing until the Estoppel
Certificate is delivered. Such charge is intended to compensate Lessor for the administrative burden, delay, and costs resulting from
Lessee’s failure to comply and shall not constitute a waiver of Lessee’s Default or Breach and shall be in addition to, and
not in lieu of, any other rights and remedies available to Lessor under this Lease.” The first sentence of Paragraph 16(c) is hereby
deleted in its entirety and replaced as follows:
“If Lessor desires to finance, refinance,
or sell the Premises, or any part thereof, Lessee and all Guarantors shall, within ten (10) Business Days after written notice from Lessor
deliver to any potential lender or purchaser designated by Lessor such publicly available financial statements as may be reasonably required
by such lender or purchaser.”
19. Limitation on Liability: Paragraph 20 is hereby deleted in its entirety and replaced as follows:
“The obligations of Lessor under
this Lease shall not constitute personal obligations of Lessor, or its partners, members, 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 Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets
for such satisfaction. The obligations of Lessee under this Lease shall not constitute personal obligations of Lessee, or its partners,
members, directors, officers or shareholders, and Lessor shall not seek recourse against Lessee’s partners, members, directors,
officers or shareholders, or any of their personal assets for such satisfaction. Notwithstanding anything to the contrary contained herein,
in no event shall any Party hereunder be liable for special, consequential or punitive damages; provided, however, that the foregoing
limitation shall not apply to any special, consequential or punitive damages awarded to a third party in connection with a third-party
claim for which a Party is obligated to indemnify the other Party under this Lease, and in such event such Party’s indemnification
obligation shall extend only to the amounts actually awarded to such third-party in a final, non-appealable judgment issued by a court
of competent jurisdiction.”
20. Non-Disturbance: Paragraph 30.3 is hereby deleted in its entirety and replaced as follows:
“Notwithstanding anything to
the contrary contained herein, including, without limitation, Paragraph 30.1 hereof, with respect to Security Devices entered into by
Lessor prior to or after the execution of this Lease, Lessee’s subordination of this Lease to such Security Device shall be subject
to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which
Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any Extension Term, will
not be disturbed so long as Lessee is not in breach hereof and attorns to the record owner of the Premises. Further, Lessor shall use
its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is
secured by the Premises and deliver same to Lessee within twenty (20) days after execution of this Lease. In the event that Lessor is
unable to provide the Non-Disturbance Agreement within said twenty (20) days, then Lessee may, at Lessee’s option, directly contact
Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.”
Page 8 of 9
21. Access: Paragraph 32 is hereby modified by adding the following language immediately following
the last sentence thereof:
“Lessee shall have the right
to have a representative present during any such access by Lessor or Lessor’s agents and for purposes of showing the Premises to
prospective tenants, such access shall be limited to the last six (6) months of the Term.”
22. Extension Option: Paragraph 39 is hereby deleted in its entirety and replaced as follows:
“Lessee
shall have five (5) options to extend the Term of the Lease (each, an “Extension Option”) for a period of two (2) years
each (each, an “Extension Term”), commencing on the date immediately following the Expiration Date of the then existing
Term. Lessee may exercise an Extension Option, upon written notice to Lessor at least one hundred eighty (180) days prior to the expiration
of the then existing Term or Extension Term, as applicable. If Lessee exercises an Extension Option, each Extension Term shall be upon
the same terms, covenants and conditions as those contained in this Lease, other than Base Rent, which shall be adjusted a follows: (x)
Base Rent for the first Extension Term shall equal one hundred three percent (103%) of the Base Rent in effect immediately prior to the
commencement of such Extension Term, and (y) thereafter, Base Rent for each of the remaining four (4) Extension Terms (each a “FMV
Extension Term”), shall be set at fair market value as of the commencement of such FMV Extension Term in accordance with Exhibit
A.”
Page 9 of 9
Exhibit A
Fair Market Value
Fair Market Value Base Rent shall be determined as follows:
(a) During the Extension Term(s) the amount of Rent shall be the amount
forecasted to be the fair market rental value of the Premises during such Extension Term established pursuant to the procedures, terms,
assumptions and conditions set forth herein (“Fair Market Value”); provided, however, regardless of such Fair Market Value,
Base Rent during an Extension Term shall not be greater than one hundred ten percent (110%) of the Base Rent scheduled as of when the
prior Term expires, nor less than the Base Rent scheduled as of when the prior Term expires. Starting as of Lessee’s exercise of
the applicable Extension Option (but not earlier than six (6) months before the start of the applicable Extension Term), the Parties shall,
for thirty (30) days (“Negotiation Period”), attempt to agree upon the Fair Market Value. If during the Negotiation Period
the Parties do not agree on the Fair Market Value, then the Fair Market Value shall be established pursuant to the procedures set forth
herein, which shall be binding.
(b) Each Party shall, within fifteen (15) days after the end of the
Negotiation Period, in writing, submit to the other Party such Party’s determination of the Fair Market Value (“Submitted
Value(s)”). If a Party fails to timely provide a Submitted Value, then the other Patty’s Submitted Value shall be the Fair
Market Value. If both Parties timely provide Submitted Values, then each Party shall, within fifteen (15) days after both Parties have
exchanged Submitted Values, in writing notify the other Party of such Party’s selected valuator who shall meet the qualifications
set forth herein (“Advocate Valuator(s)”). Lessor and Lessee may select an Advocate Valuator who is favorable to such Party’s
position and may, prior to or after appointment of an Advocate Valuator, consult with such Party’s Advocate Valuator. If a Party
fails to timely and properly provide notice of such Party’s chosen Advocate Valuator, then the other Party’s Submitted Value
shall be the Fair Market Value.
(c) If both Parties timely and properly designate Advocate Valuators,
then such Advocate Valuators shall, within fifteen (15) days after their selection, choose a third (3rd) neutral valuator who shall meet
the qualifications set forth herein (“Neutral Valuator”). The Neutral Valuator shall be engaged jointly by Lessor and Lessee.
If Advocate Valuators fail to agree upon and timely appoint a Neutral Valuator, then the President of AIR CRE shall appoint such Neutral
Valuator within fifteen (15) days after request by either Party. If the President of AIR CRE does not timely appoint the Neutral Valuator,
then either Party may file an appropriate legal action for a judge with competent jurisdiction over the Parties to appoint the Neutral
Valuator.
(d) The Advocate Valuators and the Neutral Valuator (“Valuator(s)”)
shall be duly licensed real estate brokers or salespersons in good standing in the state in which the Premises is located, shall have
been active over the five (5) year period before their appointment in the leasing of properties similar to the Premises within the general
real estate market of the Premises. The Neutral Valuator shall additionally not be related to or affiliated with either Party or Advocate
Valuator, and shall not have previously represented in a real estate transaction a Party or anyone related to or affiliated with a Party.
All matters to be determined by the Valuators shall be decided by a majority vote of the Valuators, with each Valuator having one (1)
vote. The Valuators may, as the Valuators determine, hold hearings and require briefs, including market data and additional information.
Page 1 of 2
(e) Within thirty (30) days after selection of the Neutral Valuator,
the Valuators shall first determine the Fair Market Value established by taking into account the terms, assumptions and conditions set
forth herein (‘‘Valuators’ Market Value”), then decide which Party’s Submitted Value is closer in monetary
amount to the Valuators’ Market Value (‘‘Selected Market Value”), then provide the Parties a copy of the Valuators’
Market Value and finally notify the Parties of the Selected Market Value. The Selected Market Value shall be the Fair Market Value. The
Valuators shall have no right to decide a Selected Market Value which is a compromise to (or modification of) the Submitted &ed Values.
The decision of the Valuators shall be binding upon the Parties. The Party whose Submitted Value is not the Selected Market Value shall,
within ten (10) days after the Valuators decide the Selected Market Value, pay the fees and costs of all three (3) Valuators.
(f) If the Fair Market Value has not been established before the start
of the applicable Extension Term, then Lessee shall continue to pay to Lessor rent in the amount payable for the month immediately preceding
the start of such Extension Term, and Lessor’s acceptance of such rent shall not waive, adversely affect or prejudice the Parties’
right to complete establishment of the Fair Market Value or Lessor’s right to collect the full amount of the Fair Market Value once
the Fair Market Value is established. Lessee shall, within ten (10) days after establishment of the Fair Market Value, pay to Lessor any
deficiency in rent then due for the Extension Term. Following establishment of Fair Market Value, the Parties shall, within ten (10) days
after request by either Party, sign an amendment to this Lease to confirm the Fair Market Value and the expiration date of this Lease,
but the Parties’ failure to request or to sign such an amendment shall not affect establishment of the Fair Market Value or extension
of the Lease term.
(g) The Valuators, in deciding the Valuators’ Market Value, shall
take into account rent rates, rent abatements, periodic rent increases, real property taxes, insurance premiums and other operating expenses,
tenant improvement and other applicable allowances, building services, length of Lease term and all other relevant factors professional
real estate brokers and/or appraisers customarily consider in determining fair market rent of property in an arm’s length transaction
by ready, willing and able parties for space of comparable location, size, age, condition, quality, parking, visibility, view, signage
and accessibility if the Premises were marketed in a normal and customary manner for a reasonable length of time on the open market to
be leased to a tenant with financial strength and credit worthiness comparable to Lessee and guarantors (if any) of this Lease (as of
Lessee’s exercise of the Extension Option) for a term comparable to the length of the applicable Extension Term and used for the
Agreed Use (or other reasonably comparable uses). The Valuators, in deciding the Valuators’ Market Value, shall not consider as
a comparable transaction any of the following: a sublease, Lease assignment, Lease renewal or extension; Lease with a tenant that has
equity, is related to or affiliated with the landlord; or a Lease of space that was subject to a right of first refusal, right of first
offer, expansion option or other encumbrances. The Valuators, in deciding the Valuators’ Market Value, shall reduce the Fair Market
Value on account of Alterations and improvements made by Lessee to the extent the cost thereof was paid solely by Lessee (in excess of
any applicable improvement allowance, abated rent in lieu of improvement allowance or other consideration provided by Lessor for Lessee’s
improvement of the Premises), shall not reduce the Fair Market Value on account of any real estate brokerage commission savings by Lessor,
and shall not reduce the Fair Market Value on account of deferred maintenance or repair of the Premises for which Lessee was responsible
under the Lease but did not perform.
Page 2 of 2
Schedule 6.2(e)
Scheduled Environmental Conditions
(Green)
None.
Page 1 of 1
EX-10.3 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (351 MARTIN PALMER DRIVE), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC
EX-10.3
Filename: ea031002801ex10-3.htm · Sequence: 4
Exhibit 10.3
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT
LEASE – NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic
Provisions (“Basic Provisions”).
1.1 Parties.
This Lease(“Lease”), dated for reference purposes only 8/10/2026 , is made by and between
3611 FARQUHAR INVESTMENTS, LLC (“Lessor”) and HANSEN & ADKINS AUTO TRANSPORT, LLC (”Lessee”),
(collectively the “Parties,” or individually a “Party”).
1.2 Premises: That
certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, commonly known as
(street address, city, state, zip): 351 Martin Palmer Drive, Brunswick, GA 31523 (“Premises”). The Premises
are located in the County of Glynn, GA, and are generally described as (describe briefly the nature of the property and, if applicable,
the “Project,” if the property is located within a Project): An approximately 20 acre storage yard with two guard
shacks, a shop and a planned administration building (to be completed). (See also Paragraph 2)
1.3 Term:
1 years and 4.61 months(“Original Term”) commencing
8/13/26 (“Commencement Date”) and ending 12/31/2027 (“Expiration
Date”). (See also Paragraph 3)
1.4 Early
Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing N/A
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)
1.5 Base
Rent: $70,000.00 per month (“Base Rent”), payable on the 1st
day of each month commencing 8/13/2026 . (See also Paragraph 4)
☒ If
this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 52 .
1.6 Base
Rent and Other Monies Paid Upon Execution:
(a) Base
Rent: $70,000.00 for the period 8/13/2026 - 12/31/2027 .
(b) Security
Deposit: $0 (“Security Deposit”). (See also Paragraph 5)
(c) Association
Fees: $0 for the period __________.
(d) Other:
$0 for 0 .
(e) Total
Due Upon Execution of this Lease: $42,903.23 .
1.7 Agreed Use: Vehicle
and equipment storage, repair and maintenance. (See also Paragraph 6)
1.8 Insuring
Party. Lessor is the “Insuring Party” unless otherwise stated herein. (See also Paragraph 8)
Page 1 of 32
1.9 Real
Estate Brokers. (See also Paragraph 15 and 25) Not Applicable. No Brokers in this transaction.
(a) Representation:
Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Relationship, confirms and consents to the following agency
relationships in this Lease with the following real estate brokers (“Broker(s)”) and/or their agents (“Agent(s)”):
Lessor’s Brokerage Firm _____ License No.
_____ is the broker of (check one): ☐ the Lessor; or ☐ both the Lessee and Lessor (dual agent).
Lessor’s Agent·_____ License No.
_____ is (check one): ☐ the Lessor’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
Lessee’s Brokerage Firm _____ License No.
____ is the broker of (check one): ☐ the Lessee; or ☐ both the Lessee and Lessor (dual agent).
Lessee’s Agent _____ License No. _____ is
(check one): ☐ the Lessee’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
(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 _____ or _____% of the total Base Rent) for the brokerage
services rendered by the Brokers.
1.10 Guarantor.
The obligations of the Lessee under this Lease are to be guaranteed by _____ (“Guarantor”). (See also Paragraph 37)
1.11 Attachments.
Attached hereto are the following, all of which constitute a part of this Lease:
☒ an Addendum consisting of Paragraphs 51 through 53 ;
☐ a plot plan depicting the Premises;
☐ a current set of the Rules and Regulations;
☐ a Work Letter;
☐ other (specify): _____.
Page 2 of 32
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. While the approximate square footage of the Premises may have been used in the marketing
of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment
should the actual size be determined to be different. NOTE: Lessee is advised to verify the actual size prior to executing this Lease.
2.2 Condition.
Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs (“Start Date”), and, so long as the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if any, and all other
such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free
of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state
or federal law. If a non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction
or fail within the appropriate warranty period, Lessor shall, as Lessor’s sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, 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 Building. 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. Lessor also warrants, that unless otherwise specified in writing,
Lessor is unaware of (i) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured
by the Premises; and (iii) any bankruptcy proceeding affecting the Premises,
2.3 Compliance.
Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants
or restrictions of record, regulations, and ordinances (“Applicable Requirements”) that were in effect at the time
that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see
Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE:
Lessee is responsible for determining whether or not the 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 Lessor’s expense. If Lessee does not give Lessor written notice of a non-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 Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall
allocate the cost of such work as follows:
(a) Subject
to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee
as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such Capital
Expenditure is required during the last 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 to pay the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.
Page 3 of 32
(b) If
such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during
the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th
of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation
at any time. If, however, 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 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days
written notice to Lessor.
(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use
or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii)
complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.
2.4 Acknowledgements.
Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Lessor
and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities
Act), and their suitability for Lessee’s intended use, (c) 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, (d) it is not relying on
any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to
Lessee’s decision to Lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers
have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability
and/or suitability of all proposed tenants.
2.5 Lessee
as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.
3. Term.
3.1 Term.
The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early
Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises
being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to
pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such Early Possession
shall not affect the Expiration Date.
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3.3 Delay
In Possession. Lessor agrees to use commercially reasonable efforts to deliver exclusive possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be obligated
to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, as the same may be extended under the terms of any Work letter executed by Parties, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee’s
right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee
Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1 Rent
Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to
be rent (“Rent”).
4.2 Payment.
Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except
as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee
shall be obligated to pay the amount set forth in this Lease. 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 Charge and Lessor, at its option, may require all
future Rent be paid by cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or
costs.
4.3 Association
Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner’s association or condominium
fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent.
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5. Security
Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future,
and/ 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 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security
Deposit not used or applied by Lessor. Lessor shall upon written request provide Lessee with an accounting showing how that portion of
the Security Deposit that was not returned was applied. 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. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN
LIEU OF PAYMENT OF THE LAST MONTH’S RENT.
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. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. 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, byproducts 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,
ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, 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.
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(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, comply with all Applicable
Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that
was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.
(d) Lessee
Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless
from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party
(provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the
cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
(e) Lessor
Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse
and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease.
(f) Investigations
and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities
at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor’s investigative and remedial responsibilities.
(g) Lessor
Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee
is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph
13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated
cost to remediate such condition exceeds 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. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the
cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.
In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably
possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.
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6.3 Lessee’s
Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense,
fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner
to the Premises, without regard to whether said Applicable Requirements are now in effect or become 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 of any documents involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness
or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold
in the Premises. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10
days of the receipt of a written request therefor. In addition, Lessee shall provide Lessor with copies of its business license, certificate
of occupancy and/or any similar document within 10 days of the receipt of a written request therefor.
6.4 Inspection;
Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants authorized by Lessor
shall have the right to enter into Premises at any time in the case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting and/or testing the condition of the Premises and/or 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 Hazardous Substance
Condition (see paragraph 9.1(e)) 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. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to
Lessor within 10 days of the receipt of a written request therefor. Lessee acknowledges that any failure on its part to allow such inspections
or testing will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which
will be extremely difficult to ascertain. Accordingly, should the Lessee fail to allow such inspections and/or testing in a timely fashion
the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing
Base Rent or $100, whichever is greater for the remainder to the Lease. The Parties agree that such increase in Base Rent represents fair
and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to allow such inspection
and/or testing. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such
failure nor prevent the exercise of any of the other rights and remedies granted hereunder.
7. Maintenance;
Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee’s
Obligations.
(a) In
General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole
expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use,
any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such
as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement
and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee’s obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g.
graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including,
when necessary, the exterior repainting of the Building.
Page 8 of 32
(b) Service
Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if
any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including
fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers. However,
Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure
to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to
Lessor a sum equal to 115% of the cost thereof.
(d) Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting
from Lessee’s failure to exercise and perform good maintenance practices, If an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the
cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term
of this Lease or any extension thereof, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost
of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost per month).
Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2 Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.3 Utility
Installations; Trade Fixtures; Alterations.
(a) Definitions.
The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in
or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed
without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations”
are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(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 Alterations or 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, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for
additional modifications and/or improvements to the Premises resulting from Applicable Requirements, such as compliance with Title 24,
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, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions
of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. For work which costs an amount 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.
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(c) Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises
or any interest therein. Lessee shall give Lessor not less than 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 and the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises 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 Premises)
to the level specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.
Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below.
8. Insurance;
Indemnity.
8.1 Payment
For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior
to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within
10 days following receipt of an invoice.
Page 10 of 32
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. Lessee
shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement. 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. Lessee shall provide an endorsement on its liability policy(ies) which
provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain
liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein. •
8.3 Property
Insurance- Building, Improvements and Rental Value.
(a) Building
and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to
the full insurable 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 Lessee’s personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department
of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage
has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.
(b) Rental
Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental
Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss.
(c) Adjacent
Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused
by Lessee’s acts, omissions, use or occupancy of the Premises.
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8.4 Lessee’s
Property; Business Interruption Insurance; Worker’s Compensation Insurance.
(a) Property
Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed
$1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures
and Lessee Owned Alterations and Utility Installations.
(b) Business
Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) Worker’s
Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by
Applicable Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement. Lessee shall provide Lessor with
a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.
(d) No
Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein
are adequate to cover Lessee’s property, business operations or obligations under this Lease.
8.5 Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating”
of at least A-, VII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may
be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required
endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification
except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may increase his liability insurance
coverage and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be
for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure
and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver
of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required,
or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right
to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated
thereby.
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8.7 Indemnity.
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises,
Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of,
involving, or in connection with, a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee
and/or by Lessee’s employees, contractors or invitees. If any action or proceeding is brought against Lessor by reason of any of
the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 Exemption
of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor
nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property
of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures,
or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of
the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any
other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other Lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse
in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to
the provisions of paragraph 8.
8.9 Failure
to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose
Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult
to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide
Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically
increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this
Lease.
9. Damage
or Destruction.
9.1 Definitions.
(a) ”Premises
Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
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(b) “Premises
Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits involved.
(d) “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) “Hazardous
Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2 Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense,
repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make
the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute
the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives 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 in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect
by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) 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.
9.3 Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate
this Lease by giving written notice to Lessee within 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.
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9.4 Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage
Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month’s
Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such
damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written
notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds,
Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then
this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.
9.6 Abatement
of Rent; Lessee’s Remedies.
(a) Abatement.
In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee ls not responsible
under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.
If Lessor is 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 Lessee’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 as of the date specified in said notice. If the repair or restoration is commenced
within such 30 days, this Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization
of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination;
Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much
of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.
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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 Premises or 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 Building address. Real Property Taxes shall also include any tax, fee, levy, assessment or charge,
or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change
in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this
Lease.
10.2 Payment
of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20
days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration
or termination of this Lease, Lessee’s share of such installment shall be prorated. In the event Lessee incurs a late charge on
any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee
monthly in advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount
of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee
shall pay Lessor, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance
payments may be treated by Lessor as an additional Security Deposit.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor
from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available.
10.4 Personal
Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee
Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement
setting forth the taxes applicable to Lessee’s property.
11. Utilities
and Services.
11.1 Lessee
shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion,
to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable
in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental
request or directions.
11.2 Within
fifteen days of Lessor’s written request, Lessee agrees to deliver to Lessor such information, documents and/or authorization as
Lessor needs in order for Lessor to comply with new or existing Applicable Requirements relating to commercial building energy usage,
ratings, and/or the reporting thereof.
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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) Unless
Lessee is a corporation and its stock is publicly traded on a national stock exchange, 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 buyout 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 of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. “Net Worth of Lessee” shall mean the net
worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An
assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d), or
a non-curable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting
as a non-curable 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 110% of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 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.
(f) Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding
the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection
with the installation of a vending machine or payphone shall not constitute a subletting.
12.2 Terms
and Conditions Applicable to Assignment and Subletting.
(a) Regardless
of Lessor’s 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, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
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(b) Lessor
may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute
a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.
(c) Lessor’s
consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In
the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s
remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of $500 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. (See also Paragraph 36)
(f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.
(g) Lessor’s
consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)
12.3 Additional
Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance
of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then
outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform
and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this
Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee
to the contrary.
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(b) In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for
any prior Defaults or Breaches of such sublessor.
(c) Any
matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d) No
sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.
(e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default;
Breach; Remedies.
13.1 Default;
Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A “Breach” is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The
abandonment of the Premises; the vacating of the Premises prior to the expiration or termination of this Lease without providing a commercially
reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,
or without providing reasonable assurances to minimize potential vandalism; or failure to deliver to Lessor exclusive possession of the
entire Premises in accordance herewith prior to the expiration or termination of this Lease.
(b) The
failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to
a third party, when due to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee.
THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The
failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public
or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days
following written notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, the
Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.
(d) The
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material
safety data sheets (MSDS), or (ix) 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.
(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b),(c) or (d), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required
for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.
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(f) The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition
filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially
all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located
at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in
the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and
not affect the validity of the remaining provisions.
(g) The
discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(h) If
the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s
becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory 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
or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies.
If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor
an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event
of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:
(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion
of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus
one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover any damages to which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,
or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.
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(b) Continue
the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.
(c) Pursue
any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy
of the Premises.
13.3 Inducement
Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed
by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s
entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions,” shall be
deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach
by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed
a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late
Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by
Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately 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 by reason of such late payment. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount,
nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder,
whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary,
Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.
13.5 Interest.
Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the
31st day after it was due. The interest (“Interest”) charged shall be computed at the rate of 10% per annum 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.
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13.6 Breach
by Lessor.
(a) Notice
of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt
by Lessor, and any Lender whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that
more than 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.
(b) Performance
by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek
reimbursement from Lessor for any such expense in excess of such offset. 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 Building, or more than 25% of that portion of the Premises
not occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 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 paid by the condemnor 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
Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, Lessor agrees that: (a) if Lessee exercises any Option,
(b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within
the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent
of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.
The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary.
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15.2 Assumption
of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and 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 to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.
15.3 Representations
and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker, agent or finder (other than the Brokers and Agents, if any) in connection with this Lease, and that no one other
than said named Brokers and Agents is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
16. Estoppel
Certificates.
(a) Each
Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current
“Estoppel Certificate” form published by AIR CRE, plus such additional information, confirmation and/or statements
as may be reasonably requested by the Requesting Party.
(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 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 no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting
Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.
In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent
shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent
or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase in Base Rent represents fair and reasonable
compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to provide the Estoppel Certificate.
Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide
the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.
(c) If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after
written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
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17. Definition
of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior Lease. In the event of a transfer of Lessor’s
title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the
Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon
the Lessor as hereinabove defined.
18. Severability.
The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19. Days.
Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer
to calendar days.
20. Limitation
on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, or its partners, members,
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 Lessor’s partners, members, directors, officers
or shareholders, or any of their personal assets for such satisfaction.
21. Time
of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under
this Lease.
22. No
Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants
to the Brokers that It has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the 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.
23. 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 or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid,
or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking
possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
23.2 Date
of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given
72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service
or courier. Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
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23.3 Options.
Notwithstanding the foregoing, in order to exercise any Options (see paragraph 39), the Notice must be sent by Certified Mail (return
receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt
establishing the date the notice was received by the Lessor.
24. Waivers.
(a) No
waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant
or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s
consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent.
(b) The
acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of monies or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
(c) THE
PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF
ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures
Regarding the Nature of a Real Estate Agency Relationship.
(a) When
entering into a discussion with a real estate agent regarding a 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 in this transaction, as follows:
(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 Lessor: A fiduciary duty of utmost care, integrity,
honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (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.
(ii) Lessee’s
Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not 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. An agent acting
only for a Lessee 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 Lessor: (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.
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(iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licensees, can
legally be the agent of both 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 agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary
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 Lessor and Lessee, the agent may not, without the express
permission of the respective Party, disclose to the other Party confidential information, including, but not limited to, facts relating
to either Lessee’s or Lessor’s financial position, motivations, bargaining position, or other personal information that may
impact rent, including Lessor’s willingness to accept a rent less than the listing rent or Lessee’s willingness to pay rent
greater than the rent offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility
to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding
of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult
a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the
federal and state tax consequences of a transaction can be complex and subject to change.
(b) Brokers
have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after
the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit
and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing
limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor
and Lessee agree to identify to Brokers as “Confidential” any communication or information given Brokers that is considered
by such Party to be confidential.
26. No
Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination
of this Lease. At or prior to the expiration or termination of this Lease Lessee shall deliver exclusive possession of the Premises to
Lessor. For purposes of this provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises,
removed all of its personal property therefrom and that the Premises have been returned in the condition specified in this Lease. In the
event that Lessee does not deliver exclusive possession to Lessor as specified above, then Lessor’s damages during any holdover
period shall be computed at the amount of the Rent (as defined in Paragraph 4.1) due during the last full month before the expiration
or termination of this Lease (disregarding any temporary abatement of Rent that may have been in effect), but with Base Rent being 150%
of the Base Rent payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding
over by Lessee.
27. Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
29. Binding
Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or
similar technology shall be legal and binding.
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30. Subordination;
Attornment; Non-Disturbance.
30.1 Subordination.
This Lease and any Option granted hereby shall be subject and subordinate to any ground Lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any lender may elect to have this Lease and/or any Option granted hereby superior to the lien
of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment.
In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination
of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3,
attorn to such new owner, and upon request, enter into a new 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 the new owner, this Lease will automatically become a new Lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior
lessor or with respect to events 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 which was not paid or credited to such new owner.
30.3 Non-Disturbance.
With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from
the lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing.
The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that,
upon written request from Lessor or a lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
Page 27 of 32
31. Attorneys’
Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled
to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action
or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor
shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).
32. Lessor’s
Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises
as long as there is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without abatement of
rent or liability to Lessee.
33. Auctions.
Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs.
Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the
last 6 months of the term hereof. Except for ordinary “for sublease” signs, Lessee shall not place any sign upon the Premises
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.
35. Termination;
Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease
or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s
failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor’s election to have such event constitute the termination of such interest.
36. Consents.
All requests for consent shall be in writing. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required
to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs
and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred
in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment,
a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach
by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable
with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 10 business days following such request.
Page 28 of 32
37. Guarantor.
37.1 Execution.
The Guarantors, if any, shall each execute a guaranty in the form most recently published by AIR CRE, and each such Guarantor shall have
the same obligations as Lessee under this Lease.
37.2 Default.
It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution
of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a
corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial
statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
38. Quiet
Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the
term hereof.
39. Options.
If Lessee is granted any Option, as defined below, then the following provisions shall apply.
39.1 Definition.
“Option” shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term
of or renew any Lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to Lease either the Premises
or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase
the Premises or other property of Lessor.
39.2 Options
Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.
39.3 Multiple
Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless
the prior Options have been validly exercised.
39.4 Effect
of Default on Options.
(a) Lessee
shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default,
whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
(b) The
period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) An
Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if,
after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for
a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a
Breach of this Lease.
Page 29 of 32
40. Multiple
Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform
to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties,
including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses
incurred in connection with such rules and regulations.
41. 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 no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42. Reservations.
Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43. Performance
Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party
to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.
A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived
its right to protest such payment.
44. Authority;
Multiple Parties; Execution.
(a) 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.
(b) If
this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be jointly and severally
liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such
document.
(c) This
Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
45. Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer.
Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to Lease
to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
47. Amendments.
This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
48. 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 LEASE.
49. Arbitration of Disputes. An Addendum
requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease ☐ is ☐ is not
attached to this Lease.
Page 30 of 32
50. Accessibility;
Americans with Disabilities Act.
(a) The
Premises:
☒ have not undergone an
inspection by a Certified Access Specialist (CASp). Note: A Certified Access Specialist (CASp) can inspect the subject premises and determine
whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although
state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee
or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if
requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection,
the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that It received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential except as necessary to complete repairs and corrections
of violations of construction related accessibility standards.
In the event that the Premises have been issued an inspection report
by a CASp the Lessor shall provide a copy of the disability access inspection certificate to Lessee within 7 days of the execution
of this Lease.
(b) Since
compliance with the Americans with Disabilities Act (ADA) and other state and local accessibility statutes are dependent upon Lessee’s
specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in
compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s
expense.
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 AIR CRE
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.
2. RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
WARNING: IF THE PREMISES 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.
Page 31 of 32
The parties hereto have executed this Lease at the place and on the
dates specified above their respective signatures.
Executed at: Los Alamitos, CA
Executed at:
On:
On:
By LESSOR:
By LESSEE:
3611 FARQUHAR INVESTMENTS, LLC
HANSEN & ADKINS AUTO TRANSPORT, LLC
By:
/s/ Steve Hansen
By:
/s/ Amy Rice
Name Printed:
Steve Hansen
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
By:
/s/ Louie Adkins
By:
Name Printed:
Louie Adkins
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Address:
Address:
Federal ID No.:
Federal ID No.:
BROKER
BROKER
Attn:
Attn:
Title:
Title:
Address:
Address:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Federal ID No.:
Federal ID No.:
Broker DRE License #:
Broker DRE License #:
Agent DRE License #:
Agent DRE License #:
Page 32 of 32
ADDENDUM TO LEASE
Date:
8/10/2026
By and Between
Lessor:
3611 FARQUHAR INVESTMENTS, LLC
Lessee:
HANSEN & ADKINS AUTO TRANSPORT, LLC
Property Address:
351 Martin Palmer Drive, Brunswick, GA 31523
(street address, city, state, zip)
Paragraph: 51, 52, 53
In the event of any conflict between the provisions of this Addendum
and the printed provisions of the Lease, this Addendum shall control
Paragraph 51: Lessor hereby releases and waives, to the fullest extent
permitted by applicable law, any and all landlord’s liens and/or security interests, statutory or otherwise, now or hereafter created,
in, on and against any furniture, business or trade fixtures, equipment, inventory, or other personal property of Lessee from time to
time situated on or used in connection with the Premises. Lessor shall promptly execute any documents, instruments and agreements reasonably
requested by Lessee to evidence such release and waiver. Lessor further agrees that, within ten (10) days of written request from Lessee,
Lessor shall execute and deliver to any lender providing financing to Lessee a commercially reasonable access agreement in such lender’s
customary form, permitting such lender and its agents to access to the Premises for the purposes of exercising its rights and remedies
with respect to Lessee’s furniture, business or trade fixtures, equipment, inventory, or other personal property situated on or
used in connection with the Premises.
Paragraph 52: The Base Rent for August 2026
shall be prorated for 19 out of 31 days and shall be set to $42,903.23.
Paragraph 53: The separate Addendum to Lease,
Exhibit A, and Schedule 6.2(e) attached hereto are incorporated herein by reference.
AIR CRE * https://www.aircre.com
* 213-687-8777 * contrats@aircre.com
NOTICE : No part of these works may be reproduced in any form without permission in writing.
Page 1 of 1
Execution Version
ADDENDUM TO LEASE
1. Guarantor: Paragraphs 1.10 and 37 are each hereby deleted in their entirety.
2. Warranty Periods: Paragraph 2.2 is hereby modified as follows:
a. Notwithstanding anything to the contrary contained in Paragraph 2.2, the warranty periods with respect
to (i) the electrical, plumbing, fire sprinkler, lighting, and HVAC systems, shall be one (1) year from the Start Date and (ii) the remaining
systems and other elements of the Building, shall be six (6) months from the Start Date.
b. The first sentence of Section 2.2 is hereby deleted in its entirety and replaced as follows:
Lessor
shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first
occurs (“Start Date”), and,
so long as Lessee is in compliance with Section 7.2, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all other such elements in the Premises,
other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing
walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects, and that
the Premises do not contain hazardous levels of any mold or fungi defined as toxic under Applicable Requirements.
3. Compliance. Paragraph 2.3 is hereby modified as follows:
a. Paragraph 2.3 is hereby modified to add the following language immediately following the last sentence
thereof:
“Notwithstanding anything to
the contrary contained in this Lease, to the extent any improvements are in non-compliance with Applicable Requirements as of the Start
Date, Lessee shall be under no obligation to take any action or incur any expense so as to make any such improvements in compliance with
the Applicable Requirements and such non-compliance shall not be deemed a breach by Lessee hereunder, it being the intent of the parties
that remedying any such non-compliance shall be a Lessor obligation and expense hereunder.”
b. Paragraph 2.3(b) is hereby deleted in its entirety and replaced as follows:
“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 shall pay for such Capital Expenditure.”
4. Lessee as Prior Owner/Occupant: Paragraph 2.5 is hereby deleted in its entirety.
5. Association Fees: Paragraph 4.3 is hereby amended to add the following language immediately following
the last sentence thereof:
“Lessor covenants, warrants and
represents that, as of the Start Date, there are no such owner’s association or condominium fees affecting the Premises.”
6. Security Deposit: Paragraph 5 is hereby deleted in its entirety.
Page 1 of 11
7. Hazardous Substances: Paragraph 6.2 is hereby modified as follows:
a. Paragraph 6.2(b) is hereby deleted in its entirety and replaced as follows:
“Duty to Inform Lessor.
If Lessee becomes aware 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, within ten (10) Business Days of such awareness, 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
Substances, provided, however, that if the Lessee has a good faith reason to believe that there is an immediate danger of personal injury
or property damage as a result of the presence of the Hazardous Substance, the 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 Substances.”
b. Paragraph 6.2(c) is hereby deleted in its entirety and replaced as follows:
“Lessee Remediation. Lessee
shall not cause or permit any Hazardous Substances to be spilled or released in, on, under or about the Premises (including through the
plumbing or sanitary sewer systems) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements, and take,
as and when required by Applicable Requirements, (i) all investigatory and/or remedial action reasonably required, for the maintenance,
security and/or monitoring of the Premises or neighboring properties, and (ii) all remedial action reasonably required for the cleanup
of any contamination of the Premises or neighboring properties, that was caused by Lessee, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the Term of this Lease, by or for Lessee. Notwithstanding the foregoing, Lessee shall not be
responsible or liable for the cleanup, remediation, or any associated costs (including any contributory costs) for Hazardous Substances
present at or otherwise brought onto the Premises by Lessor, its agents, or employees nor for any Pre-Existing Hazardous Substances or
Scheduled Environmental Conditions (as such terms are defined in Paragraph 6.2(e)). In the event of any dispute regarding the attribution
of environmental contamination or liability for conditions at the Premises that may have resulted from activities occurring both prior
to and during the Term, there shall be a rebuttable presumption that such contamination or liability is attributable to Pre-Existing Hazardous
Substances or other pre-existing conditions, and the burden of proof to establish that such contamination or liability is attributable
to Lessee’s activities during the Term shall rest with Lessor.”
c. Paragraph 6.2(d) is hereby deleted in its entirety and replaced as follows:
“Lessee Indemnification.
Lessee and its successors and assigns shall indemnify, defend, reimburse and hold Lessor, its employees and lenders, harmless from and
against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances brought onto the
Premises by or for Lessee during the Term or which are caused by the gross negligence or willful misconduct of Lessee, its agents or employees.
Lessee’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. Notwithstanding anything
to the contrary contained in this Lease, in no event shall Lessee’s indemnification obligations include consequential, special or
punitive damages, including, without limitation, any claims for diminution in value of the Premises, except that the foregoing limitation
shall not apply to any consequential, special or punitive damages awarded to a third party in connection with a third-party claim for
which Lessee is obligated to indemnify Lessor under this Lease, and in such event Lessee’s indemnification obligation shall extend
only to the amounts actually awarded to such third-party in a final, non-appealable judgment in a court of competent jurisdiction.”
Page 2 of 11
d. Paragraph 6.2(e) is hereby deleted in its entirety and replaced as follows:
“Except
as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from
Hazardous Substances which existed 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 (collectively, “Pre-Existing Hazardous Substances”). The parties acknowledge that,
prior to the Start Date, one or more Phase I Environmental Site Assessments were obtained with respect to the Premises for the purpose
of establishing a baseline of environmental conditions existing as of the Start Date. Notwithstanding anything herein to the contrary,
the existence, identification or description of any environmental condition, concern, recognized environmental condition (REC), historical
recognized environmental condition (HREC), controlled recognized environmental condition (CREC), area of concern or similar matter in
any such Phase I Environmental Site Assessment shall not, in and of itself, create any obligation on the part of Lessor to investigate,
remove, remediate, restore or abate such matter unless required by Applicable Requirements. Lessor shall have responsibility under this
Paragraph 6.2 to remediate only those pre-existing environmental conditions as required by Applicable Requirements or otherwise expressly
identified on Schedule 6.2(e) attached hereto (the “Scheduled Environmental Conditions”), and Lessor’s obligation
with respect thereto shall be limited to performing the remediation activities described on such Schedule and such other remediation efforts
as are necessary to comply with Applicable Requirements relating to Hazardous Substances, with the selection of remedial methods, technologies
and cleanup standards to be determined by Lessor in its reasonable discretion without unreasonably interference to or disruption of the
use of the Premises of Lessee. Lessee acknowledges that, except with respect to the Scheduled Environmental Conditions, Lessor shall have
no duty under this Lease to investigate, remove, remediate, restore or abate any environmental condition existing on the Premises prior
to the Start Date solely because such condition was identified or referenced in a Phase I Environmental Site Assessment. Lessor’s
obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement with respect to the Pre-Existing Hazardous Materials, and shall survive the expiration or termination
of this Lease. Lessee shall not, except as required by Applicable Requirements or a governmental order or as otherwise agreed, conduct,
commission, authorize, permit, or cause any Phase II Environmental Site Assessment or other intrusive environmental investigation of the
Premises (each, a “Phase II Investigation”) without Lessor’s prior written consent, which may be granted, conditioned,
delayed, or withheld in Lessor’s sole and absolute discretion. Any voluntary Phase II Investigation consented to by Lessor, shall
be performed by qualified consultants reasonably approved by Lessor, pursuant to a scope of work reasonably approved by Lessor, at Lessee’s
sole cost and expense, in compliance with Applicable Requirements, and subject to Lessee’s obligations to restore the Premises and
indemnify Lessor against all losses, claims, liabilities, costs, and expenses arising from such Phase II Investigation, to the extent
the results of such Phase II Investigation are the responsibility of Lessee hereunder. Lessee shall promptly provide Lessor with copies
of all reports, sampling results, and governmental correspondence relating to any Phase II Investigation. Lessee shall not submit any
report, data, findings, or conclusions generated from any environmental investigation to any governmental authority or other third party
without first providing Lessor with a copy thereof and a reasonable opportunity to review the same; provided, however, that nothing herein
shall prohibit disclosures required by Applicable Requirements or governmental order.
e. The last sentence of Paragraph 6.2(f) is hereby deleted in its entirety and replaced as follows:
“Lessee shall reasonably cooperate
in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the
Premises during normal business hours after reasonable prior written notice in order to carry out Lessor’s investigative and remedial
responsibilities, provided, however, Lessee shall have the right to have a representative of Lessee present upon any entry into the Premises.”
Page 3 of 11
f. Paragraph 6.2(g) is hereby deleted in its entirety and replaced as follows:
“Lessor Termination Option.
If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s
option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition
exceeds 12 times the then monthly Base Rent or $250,000, whichever is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this
Lease as of the date one hundred twenty (120) days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which
the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $250,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurances thereof within thirty (30) days following
such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation
as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds
or assurances thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.”
8. Lessee’s Compliance with Applicable Requirements: Paragraph 6.3 is hereby deleted in its
entirety and replaced as follows:
“Except as otherwise provided
in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants which relate in any manner to the Premises, without regard to whether said Applicable Requirements are now
in effect or become effective after the Start Date. Lessee shall, within ten (10) days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other reasonable documents, and other reasonable information evidencing Lessee’s compliance
with any Applicable’ Requirements specified by Lessor in such request, and shall promptly upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to materially comply with any Applicable Requirements. Likewise, Lessee shall give
written notice to Lessor within ten (10) Business Days of actual knowledge of: (i) any water damage to the Premises or any suspected seepage,
pooling, dampness or other condition reasonably likely to result in the production of mold; or (ii) material mustiness or other odors
reasonably likely to indicate the presence of mold in the Premises. In addition, Lessee shall provide copies of all relevant material
safety data sheets (MSDS) to Lessor within ten (10) days of the receipt of a written request therefor. In addition, Lessee shall provide
Lessor with copies of its business license and certificate of occupancy within ten (10) days of the receipt of a written request therefor.
Notwithstanding anything in this Paragraph 6.3 to the contrary, Lessor may not request compliance documentation more than two (2) times
in any 12-month period; provided, however, this limitation shall not apply in the event Lessor is requesting such compliance documentation
on behalf of Lessor’s lender, insurer or any governmental agency, or in relation to a proposed sale of the Premises.”
Page 4 of 11
9. Inspection Compliance: Paragraph 6.4 is hereby deleted in its entirety and replaced as follows:
“Lessor and Lessor’s “Lender”
(as defined in Paragraph 30) and consultants authorized by Lessor shall have the right to enter the Premises at any time in the case of
an emergency, and otherwise at reasonable times after reasonable written notice, for the purpose of inspecting and/or testing the condition
of the Premises and/or 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 Hazardous Substance Condition (see paragraph 9.1(e)) is found to exist or be imminent, or
the inspection is requested or ordered by a governmental authority, in each case, as a result of a breach of Lessee’s obligations
hereunder. In such case, Lessee shall within ten (10) Business Days of written request therefore, together with reasonable backup documentation,
reimburse Lessor for the reasonable, out-of-pocket cost of such inspection, so long as such inspection is reasonably related to the violation
or contamination resulting from Lessee’s breach. In addition, Lessee shall provide copies of all relevant material safety data sheets
(MSDS) in Lessee’s possession to Lessor within ten (10) days of the receipt of a written request therefor.”
10. Maintenance and Repair Obligations: Paragraphs 7.1 and 7.2 are each hereby deleted in their entirety
and replaced as follows:
“7.1 Lessor’s Obligations:
Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 7.2 (Lessee’s Obligations), 9 (Damage or Destruction)
and 14 (Condemnation), it is intended by the Parties hereto that Lessor shall, except to the extent such maintenance is the responsibility
of Lessee under Paragraph 7.2, at Lessor’s sole expense, keep and maintain in good order and repair (including replacements to the
extent necessary), the following equipment or facilities with respect to the Premises: plumbing, HVAC equipment, boilers, pressure vessels,
fire protection system, walls (interior and exterior), foundations, roofs, roof drainage systems, driveways, parking lots, fences, retaining
walls, sidewalks and parkways located in, on, or adjacent to the Premises, except that Lessee will reimburse Lessor for the reasonable,
out-of-pocket cost of any repair occasioned by the act or negligence of Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.2. Lessee’s Obligations:
a. Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable Requirements), 7.1 (Lessor’s Obligations), 9 (Damage
or Destruction), it is intended by the Parties hereto that Lessee shall, at Lessee’s sole expense, keep and maintain the Premises
in good order and repair in the ordinary course including maintenance and repair of (i) overhead, dock and roll-up doors and door operators;
(ii) entry gates and gate operators; (iii) access control, alarm, monitoring and life-safety systems; (iv) interior electrical systems,
lighting, fixtures and lamping; (v) interior ceilings, walls, floors and finishes; (vi) locks, keying and hardware; (vii) fencing; (viii)
pest control; (ix) landscaping; (x) interior plumbing and exterior landscape irrigation; (xi) HVAC (limited to servicing and preventive
maintenance); and (xii) other routine repairs of the nature customarily performed by a general maintenance contractor or handyman.
b. If Lessee fails to perform Lessee’s
obligations under this Paragraph 7.2, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in
the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put the Premises
in good order, condition and repair, and Lessee shall, within ten (10) Business Days of written demand therefor, pay to Lessor a sum equal
to 110% of the reasonable, out-of-pocket costs thereof.”
11. Alterations: The second sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Lessee may, however, make nonstructural
Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent provided that Lessee delivers
at least ten (10) days prior written 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, will not adversely affect the electrical, plumbing, HVAC, and/or life safety systems, comply
with Applicable Requirements and do not trigger the requirement for additional modifications and/or improvements to the Premises resulting
from Applicable Requirements, such as compliance with Title 24, and the cost of such alteration is not in excess of Fifty Thousand and
00/100 Dollars ($50,000.00).”
Page 5 of 11
12. Removal: The first sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Any Lessee Owned Alteration
or Utility Installation required by Lessor to be removed by the expiration or termination of this Lease shall be identified by Lessor
at the time for which Lessor provides consent to the installation of such Lessee Owned Alteration or Utility Installation.”
13. Payment for Insurance: The last sentence of Paragraph 8.1 is hereby deleted in its entirety and
replaced as follows:
“Notwithstanding anything to
the contrary contained in this Section 8.1, so long as no insurance claims were filed in the immediately preceding calendar year as a
result of Lessee’s actions, Lessee shall not be responsible for any insurance premiums increases attributable to insurance held
by Lessor (“Lessor’s Premiums”) in excess of 2.5% of such costs for the immediately preceding calendar year.
Lessee shall pay to Lessor, on the first day of each calendar month, together with Base Rent, one-twelfth (1/12) of the estimated Lessor’s
Premiums for such calendar year (the “Monthly Premiums”). Within sixty (60) days following the end of each calendar
year during the Lease term, Lessor shall furnish Lessee with a written statement (each, an “Insurance Statement”) setting
forth, in reasonable detail, Lessor’s Premiums incurred by Lessor for the preceding calendar year. If the Insurance Statement indicates
the total actual Lessor’s Premiums exceeded the total Monthly Premium payments made by Lessee during such year, then Lessee shall
pay the deficiency to Lessor within thirty (30) days after Lessee’s receipt of the Insurance Statement. If the Insurance Statement
indicates that the total Monthly Premium payments made by Lessee during the preceding calendar year exceeded the total actual Lessor’s
Premiums for such year, then Lessor shall credit the amount of overpayment against the next Monthly Premium payment(s) due from Lessee;
provided, however, if this Lease has expired or been terminated, then Lessor shall refund any overpayment to Lessee within thirty (30)
days after Lessor’s delivery of the Insurance Statement. Lessee shall have the right, at Lessee’s sole cost and expense, to
examine and audit Lessor’s books and records relating to Lessor’s Premiums for any calendar year.”
14. Real Property Taxes: Paragraph 10 is hereby modified as follows:
a. Paragraph 10.2 is hereby deleted in its entirety and replaced as follows: “All Real Property Taxes
shall be paid by Lessor.”
b. Paragraph 10.3 is hereby deleted in its entirety.
15. Assignment and Subletting: Paragraph 12.1(g) is hereby added immediately following Paragraph 12.1(f):
“12.1(g) Notwithstanding anything
to the contrary in this Lease, including, without limitation, Paragraphs 12.1(a)-(d) hereof, Lessee may, without the prior written consent
of Lessor, (i) assign this Lease or sublet the Premises or any portion thereof to any entity that controls, is controlled by, or is under
common control with, Lessee, (ii) effect, directly or indirectly, (a) any merger, consolidation, recapitalization or other similar transaction
of Lessee, (b) the sale, assignment, conveyance, or other transfer of all or substantially all of Lessee’s assets, (c) a transfer
of all or substantially all of the stock, equity or other interests of Lessee, and/or (d) any other transaction, or series of transactions,
that results in the change of control of Lessee (each of the foregoing transactions described in (a), (b), (c) and (d), a “Corporate
Transaction”), (iii) assign this Lease in connection with a Corporate Transaction. The foregoing assignments, subleases and
Corporate Transactions shall be referred to herein as “Permitted Transfers”. Provided, however, that no such Permitted
Transfer shall release Lessee from any of its obligations under this Lease, and Lessee shall remain fully and primarily liable for the
payment of Rent and the performance of all other obligations to be performed by Lessee hereunder.
Page 6 of 11
16. Defaults: Paragraph 13 is hereby modified as follows:
a. Paragraph 13.1(d) is hereby deleted in its entirety and replaced with the following:
“The failure by Lessee to provide
(i) reasonable written evidence of compliance with Applicable Requirements, (ii) intentionally omitted, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) any document requested
under Paragraph 42, (vii) material safety data sheets (MSDS), or (viii) any other documentation or information which Lessor may reasonably
require of Lessee, each to the extent expressly required to be provided by Lessee under the terms of this Lease, where any such failure
continues without cure for a period of 30 days following written notice to Lessee.”
b. The second sentence of 13.2 is hereby deleted in its entirety and replaced with the following:
“Lessee shall pay to Lessor an
amount equal to 110% of the reasonable, out-of-pocket costs and expenses actually incurred by Lessor in such performance within ten (10)
Business Days of receipt of an invoice therefor.”
c. Paragraph 13.3 is hereby deleted in its entirety.
d. Paragraph 13.6(c) is hereby added immediately following Paragraph 13.6 (b): “13 .6(c) Notwithstanding
anything to the contrary contained herein, including, without limitation, Paragraphs 13.6 (a)-(b) hereof, in the event Lessor fails to
perform or provide any Essential Service (as defined herein) to the Premises for more than ten (10) consecutive Business Days following
notice thereof from Lessee, and such failure materially interferes with Lessee’s ability to conduct its business in or from the
Premises, then the Rent shall thereupon abate commencing on the eleventh (11th) consecutive Business Day, based upon the portion
of the Premises so affected or the impact on Lessee’s conduct of its business in and from the Premises until such failure is remedied.
Lessee shall reasonably cooperate with Lessor to the extent reasonably necessary for Lessor to perform or provide any Essential Service.
In the event Lessee fails to cooperate, Lessor’s time to satisfy its obligations under this section shall be extended in accordance
with the delay caused by Lessee. “Essential Service” means any of the following: heating or air-conditioning, electricity,
water or plumbing systems, parking or anything that prevents Lessee from accessing or using the Premises for normal business purposes
provided, however, that “Essential Service” shall strictly exclude any maintenance, repair, servicing, or other obligations
of Lessee set forth under Section 7.2 of this Lease. For the avoidance of doubt, during any such abatement, Lessee may (but shall not
be obligated to) exercise Lessee’s self-help rights in accordance with Section 13.6(b) to remedy such failure.”
17. Brokers: Paragraphs 1.9, 15.1, 15.2 are each hereby deleted in their entirety. Paragraph 15.3 is
deleted in its entirety and replaced as follows:
“Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker, agent or finder in connection with this Lease, and
that no one is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto.”
Page 7 of 11
18. Estoppel Certificates:
a. The last three sentences of Paragraph 16(b) are hereby deleted in their entirety and replaced as follows:
a. “Accordingly, should the Lessee fail to execute and deliver any Estoppel Certificate required under
this Lease within the time required, Lessee shall pay to Lessor, as additional rent, an administrative charge of Two Hundred Fifty Dollars
($250.00) per day commencing on the fifth (5th) day after written notice from Lessor of such failure and continuing until the Estoppel
Certificate is delivered. Such charge is intended to compensate Lessor for the administrative burden, delay, and costs resulting from
Lessee’s failure to comply and shall not constitute a waiver of Lessee’s Default or Breach and shall be in addition to, and
not in lieu of, any other rights and remedies available to Lessor under this Lease.” The first sentence of Paragraph 16(c) is hereby
deleted in its entirety and replaced as follows:
“If Lessor desires to finance, refinance,
or sell the Premises, or any part thereof, Lessee and all Guarantors shall, within ten (10) Business Days after written notice from Lessor
deliver to any potential lender or purchaser designated by Lessor such publicly available financial statements as may be reasonably required
by such lender or purchaser.”
19. Limitation on Liability: Paragraph 20 is hereby deleted in its entirety and replaced as follows:
“The obligations of Lessor under
this Lease shall not constitute personal obligations of Lessor, or its partners, members, 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 Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets
for such satisfaction. The obligations of Lessee under this Lease shall not constitute personal obligations of Lessee, or its partners,
members, directors, officers or shareholders, and Lessor shall not seek recourse against Lessee’s partners, members, directors,
officers or shareholders, or any of their personal assets for such satisfaction. Notwithstanding anything to the contrary contained herein,
in no event shall any Party hereunder be liable for special, consequential or punitive damages; provided, however, that the foregoing
limitation shall not apply to any special, consequential or punitive damages awarded to a third party in connection with a third-party
claim for which a Party is obligated to indemnify the other Party under this Lease, and in such event such Party’s indemnification
obligation shall extend only to the amounts actually awarded to such third-party in a final, non-appealable judgment issued by a court
of competent jurisdiction.”
20. Non-Disturbance: Paragraph 30.3 is hereby deleted in its entirety and replaced as follows:
“Notwithstanding anything to
the contrary contained herein, including, without limitation, Paragraph 30.1 hereof, with respect to Security Devices entered into by
Lessor prior to or after the execution of this Lease, Lessee’s subordination of this Lease to such Security Device shall be subject
to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which
Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any Extension Term, will
not be disturbed so long as Lessee is not in breach hereof and attorns to the record owner of the Premises. Further, Lessor shall use
its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is
secured by the Premises and deliver same to Lessee within twenty (20) days after execution of this Lease. In the event that Lessor is
unable to provide the Non-Disturbance Agreement within said twenty (20) days, then Lessee may, at Lessee’s option, directly contact
Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.”
Page 8 of 11
21. Access: Paragraph 32 is hereby modified by adding the following language immediately following
the last sentence thereof:
“Lessee shall have the right
to have a representative present during any such access by Lessor or Lessor’s agents and for purposes of showing the Premises to
prospective tenants, such access shall be limited to the last six (6) months of the Term.”
22. Extension Option: Paragraph 39 is hereby deleted in its entirety and replaced as follows:
“Lessee
shall have five (5) options to extend the Term of the Lease (each, an “Extension Option”) for a period of two (2) years
each (each, an “Extension Term”), commencing on the date immediately following the Expiration Date of the then existing
Term. Lessee may exercise an Extension Option, upon written notice to Lessor at least one hundred eighty (180) days prior to the expiration
of the then existing Term or Extension Term, as applicable. If Lessee exercises an Extension Option, each Extension Term shall be upon
the same terms, covenants and conditions as those contained in this Lease, other than Base Rent, which shall be adjusted a follows: (x)
Base Rent for the first Extension Term shall equal one hundred three percent (103%) of the Base Rent in effect immediately prior to the
commencement of such Extension Term, and (y) thereafter, Base Rent for each of the remaining four (4) Extension Terms (each a “FMV
Extension Term”), shall be set at fair market value as of the commencement of such FMV Extension Term in accordance with Exhibit
A.”
Page 9 of 11
Exhibit A
Fair Market Value
Fair Market Value Base Rent shall be determined as follows:
(a) During the Extension Term(s) the amount
of Rent shall be the amount forecasted to be the fair market rental value of the Premises during such Extension Term established
pursuant to the procedures, terms, assumptions and conditions set forth herein (“Fair Market Value”); provided, however,
regardless of such Fair Market Value, Base Rent during an Extension Term shall not be greater than one hundred six percent (106 %)
of the Base Rent scheduled as of when the prior Term expires, nor less than the Base Rent scheduled as of when the prior Term
expires. Starting as of Lessee’s exercise of the applicable Extension Option (but not earlier than six (6) months before the
start of the applicable Extension Term), the Parties shall, for thirty (30) days (“Negotiation Period”), attempt to
agree upon the Fair Market Value. If during the Negotiation Period the Parties do not agree on the Fair Market Value, then the Fair
Market Value shall be established pursuant to the procedures set forth herein, which shall be binding.
(b) Each Party shall, within fifteen (15) days after the end of the
Negotiation Period, in writing, submit to the other Party such Party’s determination of the Fair Market Value (“Submitted
Value(s)”). If a Party fails to timely provide a Submitted Value, then the other Patty’s Submitted Value shall be the Fair
Market Value. If both Parties timely provide Submitted Values, then each Party shall, within fifteen (15) days after both Parties have
exchanged Submitted Values, in writing notify the other Party of such Party’s selected valuator who shall meet the qualifications
set forth herein (“Advocate Valuator(s)”). Lessor and Lessee may select an Advocate Valuator who is favorable to such Party’s
position and may, prior to or after appointment of an Advocate Valuator, consult with such Party’s Advocate Valuator. If a Party
fails to timely and properly provide notice of such Party’s chosen Advocate Valuator, then the other Party’s Submitted Value
shall be the Fair Market Value.
(c) If both Parties timely and properly designate Advocate Valuators,
then such Advocate Valuators shall, within fifteen (15) days after their selection, choose a third (3rd) neutral valuator who shall meet
the qualifications set forth herein (“Neutral Valuator”). The Neutral Valuator shall be engaged jointly by Lessor and Lessee.
If Advocate Valuators fail to agree upon and timely appoint a Neutral Valuator, then the President of AIR CRE shall appoint such Neutral
Valuator within fifteen (15) days after request by either Party. If the President of AIR CRE does not timely appoint the Neutral Valuator,
then either Party may file an appropriate legal action for a judge with competent jurisdiction over the Parties to appoint the Neutral
Valuator.
(d) The Advocate Valuators and the Neutral Valuator (“Valuator(s)”)
shall be duly licensed real estate brokers or salespersons in good standing in the state in which the Premises is located, shall have
been active over the five (5) year period before their appointment in the leasing of properties similar to the Premises within the general
real estate market of the Premises. The Neutral Valuator shall additionally not be related to or affiliated with either Party or Advocate
Valuator, and shall not have previously represented in a real estate transaction a Party or anyone related to or affiliated with a Party.
All matters to be determined by the Valuators shall be decided by a majority vote of the Valuators, with each Valuator having one (1)
vote. The Valuators may, as the Valuators determine, hold hearings and require briefs, including market data and additional information.
Page 1 of 2
(e) Within thirty (30) days after selection of the Neutral Valuator,
the Valuators shall first determine the Fair Market Value established by taking into account the terms, assumptions and conditions set
forth herein (‘‘Valuators’ Market Value”), then decide which Party’s Submitted Value is closer in monetary
amount to the Valuators’ Market Value (‘‘Selected Market Value”), then provide the Parties a copy of the Valuators’
Market Value and finally notify the Parties of the Selected Market Value. The Selected Market Value shall be the Fair Market Value. The
Valuators shall have no right to decide a Selected Market Value which is a compromise to (or modification of) the Submitted &ed Values.
The decision of the Valuators shall be binding upon the Parties. The Party whose Submitted Value is not the Selected Market Value shall,
within ten (10) days after the Valuators decide the Selected Market Value, pay the fees and costs of all three (3) Valuators.
(f) If the Fair Market Value has not been established before the start
of the applicable Extension Term, then Lessee shall continue to pay to Lessor rent in the amount payable for the month immediately preceding
the start of such Extension Term, and Lessor’s acceptance of such rent shall not waive, adversely affect or prejudice the Parties’
right to complete establishment of the Fair Market Value or Lessor’s right to collect the full amount of the Fair Market Value once
the Fair Market Value is established. Lessee shall, within ten (10) days after establishment of the Fair Market Value, pay to Lessor any
deficiency in rent then due for the Extension Term. Following establishment of Fair Market Value, the Parties shall, within ten (10) days
after request by either Party, sign an amendment to this Lease to confirm the Fair Market Value and the expiration date of this Lease,
but the Parties’ failure to request or to sign such an amendment shall not affect establishment of the Fair Market Value or extension
of the Lease term.
(g) The Valuators, in deciding the Valuators’ Market Value, shall
take into account rent rates, rent abatements, periodic rent increases, real property taxes, insurance premiums and other operating expenses,
tenant improvement and other applicable allowances, building services, length of Lease term and all other relevant factors professional
real estate brokers and/or appraisers customarily consider in determining fair market rent of property in an arm’s length transaction
by ready, willing and able parties for space of comparable location, size, age, condition, quality, parking, visibility, view, signage
and accessibility if the Premises were marketed in a normal and customary manner for a reasonable length of time on the open market to
be leased to a tenant with financial strength and credit worthiness comparable to Lessee and guarantors (if any) of this Lease (as of
Lessee’s exercise of the Extension Option) for a term comparable to the length of the applicable Extension Term and used for the
Agreed Use (or other reasonably comparable uses). The Valuators, in deciding the Valuators’ Market Value, shall not consider as
a comparable transaction any of the following: a sublease, Lease assignment, Lease renewal or extension; Lease with a tenant that has
equity, is related to or affiliated with the landlord; or a Lease of space that was subject to a right of first refusal, right of first
offer, expansion option or other encumbrances. The Valuators, in deciding the Valuators’ Market Value, shall reduce the Fair Market
Value on account of Alterations and improvements made by Lessee to the extent the cost thereof was paid solely by Lessee (in excess of
any applicable improvement allowance, abated rent in lieu of improvement allowance or other consideration provided by Lessor for Lessee’s
improvement of the Premises), shall not reduce the Fair Market Value on account of any real estate brokerage commission savings by Lessor,
and shall not reduce the Fair Market Value on account of deferred maintenance or repair of the Premises for which Lessee was responsible
under the Lease but did not perform.
Page 2 of 2
Schedule 6.2(e)
Scheduled Environmental Conditions
(Brunswick)
None.
Page 1 of 1
EX-10.4 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (1814 WESTFIELD LOOP ROAD), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 3611 FARQUHAR INVESTMENTS, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC
EX-10.4
Filename: ea031002801ex10-4.htm · Sequence: 5
Exhibit 10.4
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT
LEASE – NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic
Provisions (“Basic Provisions”).
1.1 Parties.
This Lease(“Lease”), dated for reference purposes only 8/10/2026 , is made by and between
3611 FARQUHAR INVESTMENTS, LLC (“Lessor”) and HANSEN & ADKINS AUTO TRANSPORT, LLC (“Lessee”),
(collectively the “Parties,” or individually a “Party”).
1.2 Premises:
That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, commonly
known as (street address, city, state, zip): 1814 Westfield Loop Road, Houston, TX 77073 (“Premises”). The
Premises are located in the County of Harris, TX, and are generally described as (describe briefly the nature of the property
and, if applicable, the “Project,” if the property is located within a Project): 4.2856 acre parcel with a
vehicle yard, warehouse office, and garage. (See also Paragraph 2)
1.3 Term:
1 years and 4.61 months(“Original Term”) commencing
8/13/26 (“Commencement Date”) and ending 12/31/2027 (“Expiration
Date”). (See also Paragraph 3)
1.4 Early
Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing N/A
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)
1.5 Base
Rent: $21,321.42 per month (“Base Rent”), payable on the 1st
day of each month commencing 8/13/2026 . (See also Paragraph 4)
☒ If
this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 52 .
1.6 Base
Rent and Other Monies Paid Upon Execution:
(a) Base
Rent: $21,321.42 for the period 8/13/2026 - 12/31/2027 .
(b) Security
Deposit: $0 (“Security Deposit”). (See also Paragraph 5)
(c) Association
Fees: $0 for the period __________.
(d) Other:
$0 for 0 .
(e) Total
Due Upon Execution of this Lease: $13,067.97 .
1.7 Agreed Use: office
use, repair and maintenance facility. (See also Paragraph 6)
1.8 Insuring
Party. Lessor is the “Insuring Party” unless otherwise stated herein. (See also Paragraph 8)
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1.9 Real
Estate Brokers. (See also Paragraph 15 and 25) Not Applicable. No Brokers in this transaction.
(a) Representation:
Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Relationship, confirms and consents to the following agency
relationships in this Lease with the following real estate brokers (“Broker(s)”) and/or their agents (“Agent(s)”):
Lessor’s Brokerage Firm _____ License No.
_____ is the broker of (check one): ☐ the Lessor; or ☐ both the Lessee and Lessor (dual agent).
Lessor’s Agent·_____ License No.
_____ is (check one): ☐ the Lessor’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
Lessee’s Brokerage Firm _____ License No.
____ is the broker of (check one): ☐ the Lessee; or ☐ both the Lessee and Lessor (dual agent).
Lessee’s Agent _____ License No. _____ is
(check one): ☐ the Lessee’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
(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 _____ or _____% of the total Base Rent) for the brokerage
services rendered by the Brokers.
1.10 Guarantor.
The obligations of the Lessee under this Lease are to be guaranteed by _____ (“Guarantor”). (See also Paragraph 37)
1.11 Attachments.
Attached hereto are the following, all of which constitute a part of this Lease:
☒ an Addendum consisting of Paragraphs 51 through 53 ;
☐ a plot plan depicting the Premises;
☐ a current set of the Rules and Regulations;
☐ a Work Letter;
☐ other (specify): _____.
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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. While the approximate square footage of the Premises may have been used in the marketing
of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment
should the actual size be determined to be different. NOTE: Lessee is advised to verify the actual size prior to executing this Lease.
2.2 Condition.
Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs (“Start Date”), and, so long as the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if any, and all other
such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free
of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state
or federal law. If a non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction
or fail within the appropriate warranty period, Lessor shall, as Lessor’s sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, 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 Building. 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. Lessor also warrants, that unless otherwise specified in writing,
Lessor is unaware of (i) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured
by the Premises; and (iii) any bankruptcy proceeding affecting the Premises,
2.3 Compliance.
Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants
or restrictions of record, regulations, and ordinances (“Applicable Requirements”) that were in effect at the time
that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see
Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE:
Lessee is responsible for determining whether or not the 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 Lessor’s expense. If Lessee does not give Lessor written notice of a non-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 Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall
allocate the cost of such work as follows:
(a) Subject
to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee
as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such Capital
Expenditure is required during the last 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 to pay the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.
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(b) If
such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during
the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th
of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation
at any time. If, however, 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 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days
written notice to Lessor.
(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use
or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii)
complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.
2.4 Acknowledgements.
Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Lessor
and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities
Act), and their suitability for Lessee’s intended use, (c) 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, (d) it is not relying on
any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to
Lessee’s decision to Lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers
have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability
and/or suitability of all proposed tenants.
2.5 Lessee
as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.
3. Term.
3.1 Term.
The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early
Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises
being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to
pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such Early Possession
shall not affect the Expiration Date.
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3.3 Delay
In Possession. Lessor agrees to use commercially reasonable efforts to deliver exclusive possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be obligated
to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, as the same may be extended under the terms of any Work letter executed by Parties, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee’s
right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee
Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1 Rent
Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to
be rent (“Rent”).
4.2 Payment.
Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except
as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee
shall be obligated to pay the amount set forth in this Lease. 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 Charge and Lessor, at its option, may require all
future Rent be paid by cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or
costs.
4.3 Association
Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner’s association or condominium
fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent.
Page 5 of 32
5. Security
Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future,
and/ 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 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security
Deposit not used or applied by Lessor. Lessor shall upon written request provide Lessee with an accounting showing how that portion of
the Security Deposit that was not returned was applied. 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. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN
LIEU OF PAYMENT OF THE LAST MONTH’S RENT.
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. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. 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, byproducts 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,
ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, 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.
Page 6 of 32
(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, comply with all Applicable
Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that
was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.
(d) Lessee
Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless
from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party
(provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the
cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
(e) Lessor
Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse
and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease.
(f) Investigations
and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities
at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor’s investigative and remedial responsibilities.
(g) Lessor
Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee
is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph
13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated
cost to remediate such condition exceeds 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. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the
cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.
In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably
possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.
Page 7 of 32
6.3 Lessee’s
Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense,
fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner
to the Premises, without regard to whether said Applicable Requirements are now in effect or become 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 of any documents involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness
or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold
in the Premises. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10
days of the receipt of a written request therefor. In addition, Lessee shall provide Lessor with copies of its business license, certificate
of occupancy and/or any similar document within 10 days of the receipt of a written request therefor.
6.4 Inspection;
Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants authorized by Lessor
shall have the right to enter into Premises at any time in the case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting and/or testing the condition of the Premises and/or 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 Hazardous Substance
Condition (see paragraph 9.1(e)) 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. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to
Lessor within 10 days of the receipt of a written request therefor. Lessee acknowledges that any failure on its part to allow such inspections
or testing will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which
will be extremely difficult to ascertain. Accordingly, should the Lessee fail to allow such inspections and/or testing in a timely fashion
the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing
Base Rent or $100, whichever is greater for the remainder to the Lease. The Parties agree that such increase in Base Rent represents fair
and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to allow such inspection
and/or testing. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such
failure nor prevent the exercise of any of the other rights and remedies granted hereunder.
7. Maintenance;
Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee’s
Obligations.
(a) In
General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole
expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use,
any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such
as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement
and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee’s obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g.
graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including,
when necessary, the exterior repainting of the Building.
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(b) Service
Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if
any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including
fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers. However,
Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure
to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to
Lessor a sum equal to 115% of the cost thereof.
(d) Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting
from Lessee’s failure to exercise and perform good maintenance practices, If an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the
cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term
of this Lease or any extension thereof, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost
of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost per month).
Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2 Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.3 Utility
Installations; Trade Fixtures; Alterations.
(a) Definitions.
The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in
or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed
without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations”
are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(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 Alterations or 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, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for
additional modifications and/or improvements to the Premises resulting from Applicable Requirements, such as compliance with Title 24,
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, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions
of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. For work which costs an amount 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.
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(c) Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises
or any interest therein. Lessee shall give Lessor not less than 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 and the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises 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 Premises)
to the level specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.
Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below.
8. Insurance;
Indemnity.
8.1 Payment
For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior
to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within
10 days following receipt of an invoice.
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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. Lessee
shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement. 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. Lessee shall provide an endorsement on its liability policy(ies) which
provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain
liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein. •
8.3 Property
Insurance- Building, Improvements and Rental Value.
(a) Building
and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to
the full insurable 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 Lessee’s personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department
of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage
has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.
(b) Rental
Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental
Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss.
(c) Adjacent
Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused
by Lessee’s acts, omissions, use or occupancy of the Premises.
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8.4 Lessee’s
Property; Business Interruption Insurance; Worker’s Compensation Insurance.
(a) Property
Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed
$1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures
and Lessee Owned Alterations and Utility Installations.
(b) Business
Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) Worker’s
Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by
Applicable Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement. Lessee shall provide Lessor with
a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.
(d) No
Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein
are adequate to cover Lessee’s property, business operations or obligations under this Lease.
8.5 Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating”
of at least A-, VII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may
be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required
endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification
except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may increase his liability insurance
coverage and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be
for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure
and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver
of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required,
or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right
to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated
thereby.
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8.7 Indemnity.
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises,
Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of,
involving, or in connection with, a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee
and/or by Lessee’s employees, contractors or invitees. If any action or proceeding is brought against Lessor by reason of any of
the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 Exemption
of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor
nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property
of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures,
or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of
the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any
other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other Lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse
in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to
the provisions of paragraph 8.
8.9 Failure
to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose
Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult
to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide
Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically
increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this
Lease.
9. Damage
or Destruction.
9.1 Definitions.
(a) “Premises
Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
Page 13 of 32
(b) “Premises
Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits involved.
(d) “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) “Hazardous
Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2 Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense,
repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make
the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute
the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives 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 in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect
by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) 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.
9.3 Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate
this Lease by giving written notice to Lessee within 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.
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9.4 Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage
Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month’s
Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such
damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written
notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds,
Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then
this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.
9.6 Abatement
of Rent; Lessee’s Remedies.
(a) Abatement.
In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee ls not responsible
under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.
If Lessor is 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 Lessee’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 as of the date specified in said notice. If the repair or restoration is commenced
within such 30 days, this Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization
of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination;
Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much
of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.
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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 Premises or 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 Building address. Real Property Taxes shall also include any tax, fee, levy, assessment or charge,
or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change
in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this
Lease.
10.2 Payment
of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20
days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration
or termination of this Lease, Lessee’s share of such installment shall be prorated. In the event Lessee incurs a late charge on
any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee
monthly in advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount
of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee
shall pay Lessor, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance
payments may be treated by Lessor as an additional Security Deposit.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor
from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available.
10.4 Personal
Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee
Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement
setting forth the taxes applicable to Lessee’s property.
11. Utilities
and Services.
11.1 Lessee
shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion,
to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable
in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental
request or directions.
11.2 Within
fifteen days of Lessor’s written request, Lessee agrees to deliver to Lessor such information, documents and/or authorization as
Lessor needs in order for Lessor to comply with new or existing Applicable Requirements relating to commercial building energy usage,
ratings, and/or the reporting thereof.
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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) Unless
Lessee is a corporation and its stock is publicly traded on a national stock exchange, 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 buyout 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 of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. “Net Worth of Lessee” shall mean the net
worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An
assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d), or
a non-curable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting
as a non-curable 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 110% of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 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.
(f) Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding
the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection
with the installation of a vending machine or payphone shall not constitute a subletting.
12.2 Terms
and Conditions Applicable to Assignment and Subletting.
(a) Regardless
of Lessor’s 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, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
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(b) Lessor
may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute
a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.
(c) Lessor’s
consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In
the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s
remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of $500 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. (See also Paragraph 36)
(f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.
(g) Lessor’s
consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)
12.3 Additional
Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance
of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then
outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform
and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this
Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee
to the contrary.
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(b) In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for
any prior Defaults or Breaches of such sublessor.
(c) Any
matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d) No
sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.
(e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default;
Breach; Remedies.
13.1 Default;
Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A “Breach” is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The
abandonment of the Premises; the vacating of the Premises prior to the expiration or termination of this Lease without providing a commercially
reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,
or without providing reasonable assurances to minimize potential vandalism; or failure to deliver to Lessor exclusive possession of the
entire Premises in accordance herewith prior to the expiration or termination of this Lease.
(b) The
failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to
a third party, when due to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee.
THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The
failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public
or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days
following written notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, the
Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.
(d) The
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material
safety data sheets (MSDS), or (ix) 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.
(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b),(c) or (d), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required
for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.
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(f) The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition
filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially
all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located
at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in
the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and
not affect the validity of the remaining provisions.
(g) The
discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(h) If
the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s
becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory 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
or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies.
If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor
an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event
of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:
(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion
of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus
one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover any damages to which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,
or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.
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(b) Continue
the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.
(c) Pursue
any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy
of the Premises.
13.3 Inducement
Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed
by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s
entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions,” shall be
deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach
by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed
a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late
Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by
Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately 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 by reason of such late payment. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount,
nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder,
whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary,
Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.
13.5 Interest.
Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the
31st day after it was due. The interest (“Interest”) charged shall be computed at the rate of 10% per annum 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.
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13.6 Breach
by Lessor.
(a) Notice
of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt
by Lessor, and any Lender whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that
more than 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.
(b) Performance
by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek
reimbursement from Lessor for any such expense in excess of such offset. 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 Building, or more than 25% of that portion of the Premises
not occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 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 paid by the condemnor 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
Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, Lessor agrees that: (a) if Lessee exercises any Option,
(b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within
the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent
of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.
The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary.
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15.2 Assumption
of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and 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 to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.
15.3 Representations
and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker, agent or finder (other than the Brokers and Agents, if any) in connection with this Lease, and that no one other
than said named Brokers and Agents is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
16. Estoppel
Certificates.
(a) Each
Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current
”Estoppel Certificate” form published by AIR CRE, plus such additional information, confirmation and/or statements
as may be reasonably requested by the Requesting Party.
(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 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 no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting
Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.
In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent
shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent
or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase in Base Rent represents fair and reasonable
compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to provide the Estoppel Certificate.
Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide
the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.
(c) If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after
written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
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17. Definition
of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior Lease. In the event of a transfer of Lessor’s
title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the
Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon
the Lessor as hereinabove defined.
18. Severability.
The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19. Days.
Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer
to calendar days.
20. Limitation
on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, or its partners, members,
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 Lessor’s partners, members, directors, officers
or shareholders, or any of their personal assets for such satisfaction.
21. Time
of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under
this Lease.
22. No
Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants
to the Brokers that It has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the 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.
23. 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 or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid,
or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking
possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
23.2 Date
of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given
72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service
or courier. Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
Page 24 of 32
23.3 Options.
Notwithstanding the foregoing, in order to exercise any Options (see paragraph 39), the Notice must be sent by Certified Mail (return
receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt
establishing the date the notice was received by the Lessor.
24. Waivers.
(a) No
waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant
or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s
consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent.
(b) The
acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of monies or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
(c) THE
PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF
ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures
Regarding the Nature of a Real Estate Agency Relationship.
(a) When
entering into a discussion with a real estate agent regarding a 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 in this transaction, as follows:
(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 Lessor: A fiduciary duty of utmost care, integrity,
honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (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.
(ii) Lessee’s
Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not 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. An agent acting
only for a Lessee 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 Lessor: (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.
Page 25 of 32
(iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licensees, can
legally be the agent of both 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 agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary
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 Lessor and Lessee, the agent may not, without the express
permission of the respective Party, disclose to the other Party confidential information, including, but not limited to, facts relating
to either Lessee’s or Lessor’s financial position, motivations, bargaining position, or other personal information that may
impact rent, including Lessor’s willingness to accept a rent less than the listing rent or Lessee’s willingness to pay rent
greater than the rent offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility
to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding
of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult
a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the
federal and state tax consequences of a transaction can be complex and subject to change.
(b) Brokers
have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after
the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit
and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing
limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor
and Lessee agree to identify to Brokers as “Confidential” any communication or information given Brokers that is considered
by such Party to be confidential.
26. No
Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination
of this Lease. At or prior to the expiration or termination of this Lease Lessee shall deliver exclusive possession of the Premises to
Lessor. For purposes of this provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises,
removed all of its personal property therefrom and that the Premises have been returned in the condition specified in this Lease. In the
event that Lessee does not deliver exclusive possession to Lessor as specified above, then Lessor’s damages during any holdover
period shall be computed at the amount of the Rent (as defined in Paragraph 4.1) due during the last full month before the expiration
or termination of this Lease (disregarding any temporary abatement of Rent that may have been in effect), but with Base Rent being 150%
of the Base Rent payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding
over by Lessee.
27. Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
29. Binding
Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or
similar technology shall be legal and binding.
Page 26 of 32
30. Subordination;
Attornment; Non-Disturbance.
30.1 Subordination.
This Lease and any Option granted hereby shall be subject and subordinate to any ground Lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any lender may elect to have this Lease and/or any Option granted hereby superior to the lien
of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment.
In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination
of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3,
attorn to such new owner, and upon request, enter into a new 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 the new owner, this Lease will automatically become a new Lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior
lessor or with respect to events 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 which was not paid or credited to such new owner.
30.3 Non-Disturbance.
With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from
the lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing.
The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that,
upon written request from Lessor or a lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
Page 27 of 32
31. Attorneys’
Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled
to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action
or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor
shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).
32. Lessor’s
Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises
as long as there is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without abatement of
rent or liability to Lessee.
33. Auctions.
Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs.
Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the
last 6 months of the term hereof. Except for ordinary “for sublease” signs, Lessee shall not place any sign upon the Premises
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.
35. Termination;
Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease
or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s
failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor’s election to have such event constitute the termination of such interest.
36. Consents.
All requests for consent shall be in writing. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required
to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs
and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred
in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment,
a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach
by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable
with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 10 business days following such request.
Page 28 of 32
37. Guarantor.
37.1 Execution.
The Guarantors, if any, shall each execute a guaranty in the form most recently published by AIR CRE, and each such Guarantor shall have
the same obligations as Lessee under this Lease.
37.2 Default.
It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution
of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a
corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial
statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
38. Quiet
Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the
term hereof.
39. Options.
If Lessee is granted any Option, as defined below, then the following provisions shall apply.
39.1 Definition.
“Option” shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term
of or renew any Lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to Lease either the Premises
or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase
the Premises or other property of Lessor.
39.2 Options
Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.
39.3 Multiple
Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless
the prior Options have been validly exercised.
39.4 Effect
of Default on Options.
(a) Lessee
shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default,
whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
(b) The
period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) An
Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if,
after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for
a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a
Breach of this Lease.
Page 29 of 32
40. Multiple
Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform
to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties,
including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses
incurred in connection with such rules and regulations.
41. 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 no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42. Reservations.
Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43. Performance
Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party
to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.
A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived
its right to protest such payment.
44. Authority;
Multiple Parties; Execution.
(a) 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.
(b) If
this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be jointly and severally
liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such
document.
(c) This
Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
45. Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer.
Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to Lease
to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
47. Amendments.
This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
48. 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 LEASE.
49. Arbitration of Disputes. An Addendum
requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease ☐ is ☐ is not
attached to this Lease.
Page 30 of 32
50. Accessibility;
Americans with Disabilities Act.
(a) The
Premises:
☒ have not undergone an
inspection by a Certified Access Specialist (CASp). Note: A Certified Access Specialist (CASp) can inspect the subject premises and determine
whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although
state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee
or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if
requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection,
the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that It received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential except as necessary to complete repairs and corrections
of violations of construction related accessibility standards.
In the event that the Premises have been issued an inspection report
by a CASp the Lessor shall provide a copy of the disability access inspection certificate to Lessee within 7 days of the execution
of this Lease.
(b) Since
compliance with the Americans with Disabilities Act (ADA) and other state and local accessibility statutes are dependent upon Lessee’s
specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in
compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s
expense.
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 AIR CRE
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.
2. RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
WARNING: IF THE PREMISES 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.
Page 31 of 32
The parties hereto have executed this Lease at the place and on the
dates specified above their respective signatures.
Executed at: Los Alamitos, CA
Executed at:
On:
On:
By LESSOR:
By LESSEE:
3611 FARQUHAR INVESTMENTS, LLC
HANSEN & ADKINS AUTO TRANSPORT, LLC
By:
/s/ Steve Hansen
By:
/s/ Amy Rice
Name Printed:
Steve Hansen
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
By:
/s/ Louie Adkins
By:
Name Printed:
Louie Adkins
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Address:
Address:
Federal ID No.:
Federal ID No.:
BROKER
BROKER
Attn:
Attn:
Title:
Title:
Address:
Address:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Federal ID No.:
Federal ID No.:
Broker DRE License #:
Broker DRE License #:
Agent DRE License #:
Agent DRE License #:
Page 32 of 32
ADDENDUM TO LEASE
Date:
8/10/2026
By and Between
Lessor:
3611 FARQUHAR INVESTMENTS, LLC
Lessee:
HANSEN & ADKINS AUTO TRANSPORT, LLC
Property Address:
1814 Westfield Loop Road, Houston, TX 77073
(street address, city, state, zip)
Paragraph: 51, 52, 53
In the event of any conflict between the provisions of this Addendum
and the printed provisions of the Lease, this Addendum shall control
Paragraph 51: Lessor hereby releases and waives, to the fullest extent
permitted by applicable law, any and all landlord’s liens and/or security interests, statutory or otherwise, now or hereafter created,
in, on and against any furniture, business or trade fixtures, equipment, inventory, or other personal property of Lessee from time to
time situated on or used in connection with the Premises. Lessor shall promptly execute any documents, instruments and agreements reasonably
requested by Lessee to evidence such release and waiver. Lessor further agrees that, within ten (10) days of written request from Lessee,
Lessor shall execute and deliver to any lender providing financing to Lessee a commercially reasonable access agreement in such lender’s
customary form, permitting such lender and its agents to access to the Premises for the purposes of exercising its rights and remedies
with respect to Lessee’s furniture, business or trade fixtures, equipment, inventory, or other personal property situated on or
used in connection with the Premises.
Paragraph 52: The Base Rent for August 2026 shall
be prorated for 19 days out of 31 for the month and shall be set to $13,067.97.
Paragraph 53: The separate Addendum to Lease,
Exhibit A, and Schedule 6.2(e) attached hereto are incorporated herein by reference.
AIR CRE * https://www.aircre.com
* 213-687-8777 * contrats@aircre.com
NOTICE : No part of these works may be reproduced in any form without permission in writing.
Page 1 of 1
Execution Version
ADDENDUM TO LEASE
1. Guarantor: Paragraphs 1.10 and 37 are each hereby deleted in their entirety.
2. Warranty Periods: Paragraph 2.2 is hereby modified as follows:
a. Notwithstanding anything to the contrary contained in Paragraph 2.2, the warranty periods with respect
to (i) the electrical, plumbing, fire sprinkler, lighting, and HVAC systems, shall be one (1) year from the Start Date and (ii) the remaining
systems and other elements of the Building, shall be six (6) months from the Start Date.
b. The first sentence of Section 2.2 is hereby deleted in its entirety and replaced as follows:
Lessor
shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first
occurs (“Start Date”), and,
so long as Lessee is in compliance with Section 7.2, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all other such elements in the Premises,
other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing
walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects, and that
the Premises do not contain hazardous levels of any mold or fungi defined as toxic under Applicable Requirements.
3. Compliance. Paragraph 2.3 is hereby modified as follows:
a. Paragraph 2.3 is hereby modified to add the following language immediately following the last sentence
thereof:
“Notwithstanding anything to
the contrary contained in this Lease, to the extent any improvements are in non-compliance with Applicable Requirements as of the Start
Date, Lessee shall be under no obligation to take any action or incur any expense so as to make any such improvements in compliance with
the Applicable Requirements and such non-compliance shall not be deemed a breach by Lessee hereunder, it being the intent of the parties
that remedying any such non-compliance shall be a Lessor obligation and expense hereunder.”
b. Paragraph 2.3(b) is hereby deleted in its entirety and replaced as follows:
“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 shall pay for such Capital Expenditure.”
4. Lessee as Prior Owner/Occupant: Paragraph 2.5 is hereby deleted in its entirety.
5. Association Fees: Paragraph 4.3 is hereby amended to add the following language immediately following
the last sentence thereof:
“Lessor covenants, warrants and
represents that, as of the Start Date, there are no such owner’s association or condominium fees affecting the Premises.”
6. Security Deposit: Paragraph 5 is hereby deleted in its entirety.
Page 1 of 9
7. Hazardous Substances: Paragraph 6.2 is hereby modified as follows:
a. Paragraph 6.2(b) is hereby deleted in its entirety and replaced as follows:
“Duty to Inform Lessor.
If Lessee becomes aware 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, within ten (10) Business Days of such awareness, 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
Substances, provided, however, that if the Lessee has a good faith reason to believe that there is an immediate danger of personal injury
or property damage as a result of the presence of the Hazardous Substance, the 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 Substances.”
b. Paragraph 6.2(c) is hereby deleted in its entirety and replaced as follows:
“Lessee Remediation. Lessee
shall not cause or permit any Hazardous Substances to be spilled or released in, on, under or about the Premises (including through the
plumbing or sanitary sewer systems) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements, and take,
as and when required by Applicable Requirements, (i) all investigatory and/or remedial action reasonably required, for the maintenance,
security and/or monitoring of the Premises or neighboring properties, and (ii) all remedial action reasonably required for the cleanup
of any contamination of the Premises or neighboring properties, that was caused by Lessee, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the Term of this Lease, by or for Lessee. Notwithstanding the foregoing, Lessee shall not be
responsible or liable for the cleanup, remediation, or any associated costs (including any contributory costs) for Hazardous Substances
present at or otherwise brought onto the Premises by Lessor, its agents, or employees nor for any Pre-Existing Hazardous Substances or
Scheduled Environmental Conditions (as such terms are defined in Paragraph 6.2(e)). In the event of any dispute regarding the attribution
of environmental contamination or liability for conditions at the Premises that may have resulted from activities occurring both prior
to and during the Term, there shall be a rebuttable presumption that such contamination or liability is attributable to Pre-Existing Hazardous
Substances or other pre-existing conditions, and the burden of proof to establish that such contamination or liability is attributable
to Lessee’s activities during the Term shall rest with Lessor.”
c. Paragraph 6.2(d) is hereby deleted in its entirety and replaced as follows:
“Lessee Indemnification.
Lessee and its successors and assigns shall indemnify, defend, reimburse and hold Lessor, its employees and lenders, harmless from and
against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances brought onto the
Premises by or for Lessee during the Term or which are caused by the gross negligence or willful misconduct of Lessee, its agents or employees.
Lessee’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. Notwithstanding anything
to the contrary contained in this Lease, in no event shall Lessee’s indemnification obligations include consequential, special or
punitive damages, including, without limitation, any claims for diminution in value of the Premises, except that the foregoing limitation
shall not apply to any consequential, special or punitive damages awarded to a third party in connection with a third-party claim for
which Lessee is obligated to indemnify Lessor under this Lease, and in such event Lessee’s indemnification obligation shall extend
only to the amounts actually awarded to such third-party in a final, non-appealable judgment in a court of competent jurisdiction.”
Page 2 of 9
d. Paragraph 6.2(e) is hereby deleted in its entirety and replaced as follows:
“Except
as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from
Hazardous Substances which existed 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 (collectively, “Pre-Existing Hazardous Substances”). The parties acknowledge that,
prior to the Start Date, one or more Phase I Environmental Site Assessments were obtained with respect to the Premises for the purpose
of establishing a baseline of environmental conditions existing as of the Start Date. Notwithstanding anything herein to the contrary,
the existence, identification or description of any environmental condition, concern, recognized environmental condition (REC), historical
recognized environmental condition (HREC), controlled recognized environmental condition (CREC), area of concern or similar matter in
any such Phase I Environmental Site Assessment shall not, in and of itself, create any obligation on the part of Lessor to investigate,
remove, remediate, restore or abate such matter unless required by Applicable Requirements. Lessor shall have responsibility under this
Paragraph 6.2 to remediate only those pre-existing environmental conditions as required by Applicable Requirements or otherwise expressly
identified on Schedule 6.2(e) attached hereto (the “Scheduled Environmental Conditions”), and Lessor’s obligation
with respect thereto shall be limited to performing the remediation activities described on such Schedule and such other remediation efforts
as are necessary to comply with Applicable Requirements relating to Hazardous Substances, with the selection of remedial methods, technologies
and cleanup standards to be determined by Lessor in its reasonable discretion without unreasonably interference to or disruption of the
use of the Premises of Lessee. Lessee acknowledges that, except with respect to the Scheduled Environmental Conditions, Lessor shall have
no duty under this Lease to investigate, remove, remediate, restore or abate any environmental condition existing on the Premises prior
to the Start Date solely because such condition was identified or referenced in a Phase I Environmental Site Assessment. Lessor’s
obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement with respect to the Pre-Existing Hazardous Materials, and shall survive the expiration or termination
of this Lease. Lessee shall not, except as required by Applicable Requirements or a governmental order or as otherwise agreed, conduct,
commission, authorize, permit, or cause any Phase II Environmental Site Assessment or other intrusive environmental investigation of the
Premises (each, a “Phase II Investigation”) without Lessor’s prior written consent, which may be granted, conditioned,
delayed, or withheld in Lessor’s sole and absolute discretion. Any voluntary Phase II Investigation consented to by Lessor, shall
be performed by qualified consultants reasonably approved by Lessor, pursuant to a scope of work reasonably approved by Lessor, at Lessee’s
sole cost and expense, in compliance with Applicable Requirements, and subject to Lessee’s obligations to restore the Premises and
indemnify Lessor against all losses, claims, liabilities, costs, and expenses arising from such Phase II Investigation, to the extent
the results of such Phase II Investigation are the responsibility of Lessee hereunder. Lessee shall promptly provide Lessor with copies
of all reports, sampling results, and governmental correspondence relating to any Phase II Investigation. Lessee shall not submit any
report, data, findings, or conclusions generated from any environmental investigation to any governmental authority or other third party
without first providing Lessor with a copy thereof and a reasonable opportunity to review the same; provided, however, that nothing herein
shall prohibit disclosures required by Applicable Requirements or governmental order.
e. The last sentence of Paragraph 6.2(f) is hereby deleted in its entirety and replaced as follows:
“Lessee shall reasonably cooperate
in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the
Premises during normal business hours after reasonable prior written notice in order to carry out Lessor’s investigative and remedial
responsibilities, provided, however, Lessee shall have the right to have a representative of Lessee present upon any entry into the Premises.”
Page 3 of 9
f. Paragraph 6.2(g) is hereby deleted in its entirety and replaced as follows:
“Lessor Termination Option.
If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s
option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition
exceeds 12 times the then monthly Base Rent or $250,000, whichever is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this
Lease as of the date one hundred twenty (120) days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which
the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $250,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurances thereof within thirty (30) days following
such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation
as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds
or assurances thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.”
8. Lessee’s Compliance with Applicable Requirements: Paragraph 6.3 is hereby deleted in its
entirety and replaced as follows:
“Except as otherwise provided
in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants which relate in any manner to the Premises, without regard to whether said Applicable Requirements are now
in effect or become effective after the Start Date. Lessee shall, within ten (10) days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other reasonable documents, and other reasonable information evidencing Lessee’s compliance
with any Applicable’ Requirements specified by Lessor in such request, and shall promptly upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to materially comply with any Applicable Requirements. Likewise, Lessee shall give
written notice to Lessor within ten (10) Business Days of actual knowledge of: (i) any water damage to the Premises or any suspected seepage,
pooling, dampness or other condition reasonably likely to result in the production of mold; or (ii) material mustiness or other odors
reasonably likely to indicate the presence of mold in the Premises. In addition, Lessee shall provide copies of all relevant material
safety data sheets (MSDS) to Lessor within ten (10) days of the receipt of a written request therefor. In addition, Lessee shall provide
Lessor with copies of its business license and certificate of occupancy within ten (10) days of the receipt of a written request therefor.
Notwithstanding anything in this Paragraph 6.3 to the contrary, Lessor may not request compliance documentation more than two (2) times
in any 12-month period; provided, however, this limitation shall not apply in the event Lessor is requesting such compliance documentation
on behalf of Lessor’s lender, insurer or any governmental agency, or in relation to a proposed sale of the Premises.”
Page 4 of 9
9. Inspection Compliance: Paragraph 6.4 is hereby deleted in its entirety and replaced as follows:
“Lessor and Lessor’s “Lender”
(as defined in Paragraph 30) and consultants authorized by Lessor shall have the right to enter the Premises at any time in the case of
an emergency, and otherwise at reasonable times after reasonable written notice, for the purpose of inspecting and/or testing the condition
of the Premises and/or 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 Hazardous Substance Condition (see paragraph 9.1(e)) is found to exist or be imminent, or
the inspection is requested or ordered by a governmental authority, in each case, as a result of a breach of Lessee’s obligations
hereunder. In such case, Lessee shall within ten (10) Business Days of written request therefore, together with reasonable backup documentation,
reimburse Lessor for the reasonable, out-of-pocket cost of such inspection, so long as such inspection is reasonably related to the violation
or contamination resulting from Lessee’s breach. In addition, Lessee shall provide copies of all relevant material safety data sheets
(MSDS) in Lessee’s possession to Lessor within ten (10) days of the receipt of a written request therefor.”
10. Maintenance and Repair Obligations: Paragraphs 7.1 and 7.2 are each hereby deleted in their entirety
and replaced as follows:
“7.1 Lessor’s Obligations:
Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 7.2 (Lessee’s Obligations), 9 (Damage or Destruction)
and 14 (Condemnation), it is intended by the Parties hereto that Lessor shall, except to the extent such maintenance is the responsibility
of Lessee under Paragraph 7.2, at Lessor’s sole expense, keep and maintain in good order and repair (including replacements to the
extent necessary), the following equipment or facilities with respect to the Premises: plumbing, HVAC equipment, boilers, pressure vessels,
fire protection system, walls (interior and exterior), foundations, roofs, roof drainage systems, driveways, parking lots, fences, retaining
walls, sidewalks and parkways located in, on, or adjacent to the Premises, except that Lessee will reimburse Lessor for the reasonable,
out-of-pocket cost of any repair occasioned by the act or negligence of Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.2. Lessee’s Obligations:
a. Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable Requirements), 7.1 (Lessor’s Obligations), 9 (Damage
or Destruction), it is intended by the Parties hereto that Lessee shall, at Lessee’s sole expense, keep and maintain the Premises
in good order and repair in the ordinary course including maintenance and repair of (i) overhead, dock and roll-up doors and door operators;
(ii) entry gates and gate operators; (iii) access control, alarm, monitoring and life-safety systems; (iv) interior electrical systems,
lighting, fixtures and lamping; (v) interior ceilings, walls, floors and finishes; (vi) locks, keying and hardware; (vii) fencing; (viii)
pest control; (ix) landscaping; (x) interior plumbing and exterior landscape irrigation; (xi) HVAC (limited to servicing and preventive
maintenance); and (xii) other routine repairs of the nature customarily performed by a general maintenance contractor or handyman.
b. If Lessee fails to perform Lessee’s
obligations under this Paragraph 7.2, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in
the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put the Premises
in good order, condition and repair, and Lessee shall, within ten (10) Business Days of written demand therefor, pay to Lessor a sum equal
to 110% of the reasonable, out-of-pocket costs thereof.”
11. Alterations: The second sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Lessee may, however, make nonstructural
Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent provided that Lessee delivers
at least ten (10) days prior written 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, will not adversely affect the electrical, plumbing, HVAC, and/or life safety systems, comply
with Applicable Requirements and do not trigger the requirement for additional modifications and/or improvements to the Premises resulting
from Applicable Requirements, such as compliance with Title 24, and the cost of such alteration is not in excess of Fifty Thousand and
00/100 Dollars ($50,000.00).”
Page 5 of 9
12. Removal: The first sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Any Lessee Owned Alteration
or Utility Installation required by Lessor to be removed by the expiration or termination of this Lease shall be identified by Lessor
at the time for which Lessor provides consent to the installation of such Lessee Owned Alteration or Utility Installation.”
13. Payment for Insurance: The last sentence of Paragraph 8.1 is hereby deleted in its entirety and
replaced as follows:
“Notwithstanding anything to
the contrary contained in this Section 8.1, so long as no insurance claims were filed in the immediately preceding calendar year as a
result of Lessee’s actions, Lessee shall not be responsible for any insurance premiums increases attributable to insurance held
by Lessor (“Lessor’s Premiums”) in excess of 2.5% of such costs for the immediately preceding calendar year.
Lessee shall pay to Lessor, on the first day of each calendar month, together with Base Rent, one-twelfth (1/12) of the estimated Lessor’s
Premiums for such calendar year (the “Monthly Premiums”). Within sixty (60) days following the end of each calendar
year during the Lease term, Lessor shall furnish Lessee with a written statement (each, an “Insurance Statement”) setting
forth, in reasonable detail, Lessor’s Premiums incurred by Lessor for the preceding calendar year. If the Insurance Statement indicates
the total actual Lessor’s Premiums exceeded the total Monthly Premium payments made by Lessee during such year, then Lessee shall
pay the deficiency to Lessor within thirty (30) days after Lessee’s receipt of the Insurance Statement. If the Insurance Statement
indicates that the total Monthly Premium payments made by Lessee during the preceding calendar year exceeded the total actual Lessor’s
Premiums for such year, then Lessor shall credit the amount of overpayment against the next Monthly Premium payment(s) due from Lessee;
provided, however, if this Lease has expired or been terminated, then Lessor shall refund any overpayment to Lessee within thirty (30)
days after Lessor’s delivery of the Insurance Statement. Lessee shall have the right, at Lessee’s sole cost and expense, to
examine and audit Lessor’s books and records relating to Lessor’s Premiums for any calendar year.”
14. Real Property Taxes: Paragraph 10 is hereby modified as follows:
a. Paragraph 10.2 is hereby deleted in its entirety and replaced as follows: “All Real Property Taxes
shall be paid by Lessor.”
b. Paragraph 10.3 is hereby deleted in its entirety.
15. Assignment and Subletting: Paragraph 12.1(g) is hereby added immediately following Paragraph 12.1(f):
“12.1(g) Notwithstanding anything
to the contrary in this Lease, including, without limitation, Paragraphs 12.1(a)-(d) hereof, Lessee may, without the prior written consent
of Lessor, (i) assign this Lease or sublet the Premises or any portion thereof to any entity that controls, is controlled by, or is under
common control with, Lessee, (ii) effect, directly or indirectly, (a) any merger, consolidation, recapitalization or other similar transaction
of Lessee, (b) the sale, assignment, conveyance, or other transfer of all or substantially all of Lessee’s assets, (c) a transfer
of all or substantially all of the stock, equity or other interests of Lessee, and/or (d) any other transaction, or series of transactions,
that results in the change of control of Lessee (each of the foregoing transactions described in (a), (b), (c) and (d), a “Corporate
Transaction”), (iii) assign this Lease in connection with a Corporate Transaction. The foregoing assignments, subleases and
Corporate Transactions shall be referred to herein as “Permitted Transfers”. Provided, however, that no such Permitted
Transfer shall release Lessee from any of its obligations under this Lease, and Lessee shall remain fully and primarily liable for the
payment of Rent and the performance of all other obligations to be performed by Lessee hereunder.
Page 6 of 9
16. Defaults: Paragraph 13 is hereby modified as follows:
a. Paragraph 13.1(d) is hereby deleted in its entirety and replaced with the following:
“The failure by Lessee to provide
(i) reasonable written evidence of compliance with Applicable Requirements, (ii) intentionally omitted, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) any document requested
under Paragraph 42, (vii) material safety data sheets (MSDS), or (viii) any other documentation or information which Lessor may reasonably
require of Lessee, each to the extent expressly required to be provided by Lessee under the terms of this Lease, where any such failure
continues without cure for a period of 30 days following written notice to Lessee.”
b. The second sentence of 13.2 is hereby deleted in its entirety and replaced with the following:
“Lessee shall pay to Lessor an
amount equal to 110% of the reasonable, out-of-pocket costs and expenses actually incurred by Lessor in such performance within ten (10)
Business Days of receipt of an invoice therefor.”
c. Paragraph 13.3 is hereby deleted in its entirety.
d. Paragraph 13.6(c) is hereby added immediately following Paragraph 13.6 (b): “13 .6(c) Notwithstanding
anything to the contrary contained herein, including, without limitation, Paragraphs 13.6 (a)-(b) hereof, in the event Lessor fails to
perform or provide any Essential Service (as defined herein) to the Premises for more than ten (10) consecutive Business Days following
notice thereof from Lessee, and such failure materially interferes with Lessee’s ability to conduct its business in or from the
Premises, then the Rent shall thereupon abate commencing on the eleventh (11th) consecutive Business Day, based upon the portion
of the Premises so affected or the impact on Lessee’s conduct of its business in and from the Premises until such failure is remedied.
Lessee shall reasonably cooperate with Lessor to the extent reasonably necessary for Lessor to perform or provide any Essential Service.
In the event Lessee fails to cooperate, Lessor’s time to satisfy its obligations under this section shall be extended in accordance
with the delay caused by Lessee. “Essential Service” means any of the following: heating or air-conditioning, electricity,
water or plumbing systems, parking or anything that prevents Lessee from accessing or using the Premises for normal business purposes
provided, however, that “Essential Service” shall strictly exclude any maintenance, repair, servicing, or other obligations
of Lessee set forth under Section 7.2 of this Lease. For the avoidance of doubt, during any such abatement, Lessee may (but shall not
be obligated to) exercise Lessee’s self-help rights in accordance with Section 13.6(b) to remedy such failure.”
17. Brokers: Paragraphs 1.9, 15.1, 15.2 are each hereby deleted in their entirety. Paragraph 15.3 is
deleted in its entirety and replaced as follows:
“Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker, agent or finder in connection with this Lease, and
that no one is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto.”
Page 7 of 9
18. Estoppel Certificates:
a. The last three sentences of Paragraph 16(b) are hereby deleted in their entirety and replaced as follows:
a. “Accordingly, should the Lessee fail to execute and deliver any Estoppel Certificate required under
this Lease within the time required, Lessee shall pay to Lessor, as additional rent, an administrative charge of Two Hundred Fifty Dollars
($250.00) per day commencing on the fifth (5th) day after written notice from Lessor of such failure and continuing until the Estoppel
Certificate is delivered. Such charge is intended to compensate Lessor for the administrative burden, delay, and costs resulting from
Lessee’s failure to comply and shall not constitute a waiver of Lessee’s Default or Breach and shall be in addition to, and
not in lieu of, any other rights and remedies available to Lessor under this Lease.” The first sentence of Paragraph 16(c) is hereby
deleted in its entirety and replaced as follows:
“If Lessor desires to finance, refinance,
or sell the Premises, or any part thereof, Lessee and all Guarantors shall, within ten (10) Business Days after written notice from Lessor
deliver to any potential lender or purchaser designated by Lessor such publicly available financial statements as may be reasonably required
by such lender or purchaser.”
19. Limitation on Liability: Paragraph 20 is hereby deleted in its entirety and replaced as follows:
“The obligations of Lessor under
this Lease shall not constitute personal obligations of Lessor, or its partners, members, 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 Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets
for such satisfaction. The obligations of Lessee under this Lease shall not constitute personal obligations of Lessee, or its partners,
members, directors, officers or shareholders, and Lessor shall not seek recourse against Lessee’s partners, members, directors,
officers or shareholders, or any of their personal assets for such satisfaction. Notwithstanding anything to the contrary contained herein,
in no event shall any Party hereunder be liable for special, consequential or punitive damages; provided, however, that the foregoing
limitation shall not apply to any special, consequential or punitive damages awarded to a third party in connection with a third-party
claim for which a Party is obligated to indemnify the other Party under this Lease, and in such event such Party’s indemnification
obligation shall extend only to the amounts actually awarded to such third-party in a final, non-appealable judgment issued by a court
of competent jurisdiction.”
20. Non-Disturbance: Paragraph 30.3 is hereby deleted in its entirety and replaced as follows:
“Notwithstanding anything to
the contrary contained herein, including, without limitation, Paragraph 30.1 hereof, with respect to Security Devices entered into by
Lessor prior to or after the execution of this Lease, Lessee’s subordination of this Lease to such Security Device shall be subject
to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which
Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any Extension Term, will
not be disturbed so long as Lessee is not in breach hereof and attorns to the record owner of the Premises. Further, Lessor shall use
its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is
secured by the Premises and deliver same to Lessee within twenty (20) days after execution of this Lease. In the event that Lessor is
unable to provide the Non-Disturbance Agreement within said twenty (20) days, then Lessee may, at Lessee’s option, directly contact
Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.”
Page 8 of 9
21. Access: Paragraph 32 is hereby modified by adding the following language immediately following
the last sentence thereof:
“Lessee shall have the right
to have a representative present during any such access by Lessor or Lessor’s agents and for purposes of showing the Premises to
prospective tenants, such access shall be limited to the last six (6) months of the Term.”
22. Extension Option: Paragraph 39 is hereby deleted in its entirety and replaced as follows:
“Lessee
shall have five (5) options to extend the Term of the Lease (each, an “Extension Option”) for a period of two (2) years
each (each, an “Extension Term”), commencing on the date immediately following the Expiration Date of the then existing
Term. Lessee may exercise an Extension Option, upon written notice to Lessor at least one hundred eighty (180) days prior to the expiration
of the then existing Term or Extension Term, as applicable. If Lessee exercises an Extension Option, each Extension Term shall be upon
the same terms, covenants and conditions as those contained in this Lease, other than Base Rent, which shall be adjusted a follows: (x)
Base Rent for the first Extension Term shall equal one hundred three percent (103%) of the Base Rent in effect immediately prior to the
commencement of such Extension Term, and (y) thereafter, Base Rent for each of the remaining four (4) Extension Terms (each a “FMV
Extension Term”), shall be set at fair market value as of the commencement of such FMV Extension Term in accordance with Exhibit
A.”
Page 9 of 9
Exhibit A
Fair Market Value
Fair Market Value Base Rent shall be determined as follows:
(a) During the Extension Term(s) the amount of Rent shall be the amount
forecasted to be the fair market rental value of the Premises during such Extension Term established pursuant to the procedures, terms,
assumptions and conditions set forth herein (“Fair Market Value”); provided, however, regardless of such Fair Market Value,
Base Rent during an Extension Term shall not be greater than one hundred six percent (106%) of the Base Rent scheduled as of when the
prior Term expires, nor less than the Base Rent scheduled as of when the prior Term expires. Starting as of Lessee’s exercise of
the applicable Extension Option (but not earlier than six (6) months before the start of the applicable Extension Term), the Parties
shall, for thirty (30) days (“Negotiation Period”), attempt to agree upon the Fair Market Value. If during the Negotiation
Period the Parties do not agree on the Fair Market Value, then the Fair Market Value shall be established pursuant to the procedures
set forth herein, which shall be binding.
(b) Each Party shall, within fifteen (15) days after the end of the
Negotiation Period, in writing, submit to the other Party such Party’s determination of the Fair Market Value (“Submitted
Value(s)”). If a Party fails to timely provide a Submitted Value, then the other Patty’s Submitted Value shall be the Fair
Market Value. If both Parties timely provide Submitted Values, then each Party shall, within fifteen (15) days after both Parties have
exchanged Submitted Values, in writing notify the other Party of such Party’s selected valuator who shall meet the qualifications
set forth herein (“Advocate Valuator(s)”). Lessor and Lessee may select an Advocate Valuator who is favorable to such Party’s
position and may, prior to or after appointment of an Advocate Valuator, consult with such Party’s Advocate Valuator. If a Party
fails to timely and properly provide notice of such Party’s chosen Advocate Valuator, then the other Party’s Submitted Value
shall be the Fair Market Value.
(c) If both Parties timely and properly designate Advocate Valuators,
then such Advocate Valuators shall, within fifteen (15) days after their selection, choose a third (3rd) neutral valuator who shall meet
the qualifications set forth herein (“Neutral Valuator”). The Neutral Valuator shall be engaged jointly by Lessor and Lessee.
If Advocate Valuators fail to agree upon and timely appoint a Neutral Valuator, then the President of AIR CRE shall appoint such Neutral
Valuator within fifteen (15) days after request by either Party. If the President of AIR CRE does not timely appoint the Neutral Valuator,
then either Party may file an appropriate legal action for a judge with competent jurisdiction over the Parties to appoint the Neutral
Valuator.
(d) The Advocate Valuators and the Neutral Valuator (“Valuator(s)”)
shall be duly licensed real estate brokers or salespersons in good standing in the state in which the Premises is located, shall have
been active over the five (5) year period before their appointment in the leasing of properties similar to the Premises within the general
real estate market of the Premises. The Neutral Valuator shall additionally not be related to or affiliated with either Party or Advocate
Valuator, and shall not have previously represented in a real estate transaction a Party or anyone related to or affiliated with a Party.
All matters to be determined by the Valuators shall be decided by a majority vote of the Valuators, with each Valuator having one (1)
vote. The Valuators may, as the Valuators determine, hold hearings and require briefs, including market data and additional information.
Page 1 of 2
(e) Within thirty (30) days after selection of the Neutral Valuator,
the Valuators shall first determine the Fair Market Value established by taking into account the terms, assumptions and conditions set
forth herein (’‘Valuators’ Market Value”), then decide which Party’s Submitted Value is closer in monetary
amount to the Valuators’ Market Value (’’Selected Market Value”), then provide the Parties a copy of the Valuators’
Market Value and finally notify the Parties of the Selected Market Value. The Selected Market Value shall be the Fair Market Value. The
Valuators shall have no right to decide a Selected Market Value which is a compromise to (or modification of) the Submitted &ed Values.
The decision of the Valuators shall be binding upon the Parties. The Party whose Submitted Value is not the Selected Market Value shall,
within ten (10) days after the Valuators decide the Selected Market Value, pay the fees and costs of all three (3) Valuators.
(f) If the Fair Market Value has not been established before the start
of the applicable Extension Term, then Lessee shall continue to pay to Lessor rent in the amount payable for the month immediately preceding
the start of such Extension Term, and Lessor’s acceptance of such rent shall not waive, adversely affect or prejudice the Parties’
right to complete establishment of the Fair Market Value or Lessor’s right to collect the full amount of the Fair Market Value once
the Fair Market Value is established. Lessee shall, within ten (10) days after establishment of the Fair Market Value, pay to Lessor any
deficiency in rent then due for the Extension Term. Following establishment of Fair Market Value, the Parties shall, within ten (10) days
after request by either Party, sign an amendment to this Lease to confirm the Fair Market Value and the expiration date of this Lease,
but the Parties’ failure to request or to sign such an amendment shall not affect establishment of the Fair Market Value or extension
of the Lease term.
(g) The Valuators, in deciding the Valuators’ Market Value, shall
take into account rent rates, rent abatements, periodic rent increases, real property taxes, insurance premiums and other operating expenses,
tenant improvement and other applicable allowances, building services, length of Lease term and all other relevant factors professional
real estate brokers and/or appraisers customarily consider in determining fair market rent of property in an arm’s length transaction
by ready, willing and able parties for space of comparable location, size, age, condition, quality, parking, visibility, view, signage
and accessibility if the Premises were marketed in a normal and customary manner for a reasonable length of time on the open market to
be leased to a tenant with financial strength and credit worthiness comparable to Lessee and guarantors (if any) of this Lease (as of
Lessee’s exercise of the Extension Option) for a term comparable to the length of the applicable Extension Term and used for the
Agreed Use (or other reasonably comparable uses). The Valuators, in deciding the Valuators’ Market Value, shall not consider as
a comparable transaction any of the following: a sublease, Lease assignment, Lease renewal or extension; Lease with a tenant that has
equity, is related to or affiliated with the landlord; or a Lease of space that was subject to a right of first refusal, right of first
offer, expansion option or other encumbrances. The Valuators, in deciding the Valuators’ Market Value, shall reduce the Fair Market
Value on account of Alterations and improvements made by Lessee to the extent the cost thereof was paid solely by Lessee (in excess of
any applicable improvement allowance, abated rent in lieu of improvement allowance or other consideration provided by Lessor for Lessee’s
improvement of the Premises), shall not reduce the Fair Market Value on account of any real estate brokerage commission savings by Lessor,
and shall not reduce the Fair Market Value on account of deferred maintenance or repair of the Premises for which Lessee was responsible
under the Lease but did not perform.
Page 2 of 2
Schedule 6.2(e)
Scheduled Environmental Conditions
(Houston)
Houston, TX has two RECs identified. First, a former occupant of the
property utilized 3 diesel USTs, each with a capacity of 26,500 gallons. The tanks were removed in 1995 but there are no records as to
any sampling in the excavation to confirm a lack of contamination. As such, a REC is identified. The second REC is like the LaVergne property
in that long term use as a service facility is identified as a REC. Like LaVergne, no actual contamination or releases are identified
but there is significantly more surface staining at this site.
The environmental conditions described above are identified as Scheduled
Environmental Conditions solely for purposes of Paragraph 6.2(e) of the Lease, and remediation, if any, shall be required only to the
extent necessary to comply with Applicable Requirements relating to Hazardous Substances.
Page 1 of 1
EX-10.5 — STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE (480 DICK BUCHANAN STREET), DATED AS OF AUGUST 10, 2026, BY AND BETWEEN 480 DICK BUCHANAN STREET, LLC AND HANSEN & ADKINS AUTO TRANSPORT, LLC
EX-10.5
Filename: ea031002801ex10-5.htm · Sequence: 6
Exhibit 10.5
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT
LEASE – NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic
Provisions (“Basic Provisions”).
1.1 Parties. This Lease(“Lease”),
dated for reference purposes only 8/10/2026, is made by and between 480 DICK BUCHANAN STREET, LLC (“Lessor”)
and HANSEN & ADKINS AUTO TRANSPORT, LLC (”Lessee”), (collectively the “Parties,” or
individually a “Party”).
1.2 Premises:
That certain real property, including all improvements therein or to be provided by Lessor under the terms of this Lease, commonly known
as (street address, city, state, zip): 480 Dick Buchanan Street, La Vergne, TN 37086 (“Premises”). The Premises
are located in the County of Rutherford, TN , and are generally described as (describe briefly the nature of the property and,
if applicable, the “Project,” if the property is located within a Project): An 3.16 acre lot with an approximate
6815 sq/ft building. (See also Paragraph 2)
1.3 Term: 1 years and 4.61
months(“Original Term”) commencing 8/13/26 (“Commencement Date”) and ending
12/31/2027 (“Expiration Date”). (See also Paragraph 3)
1.4 Early
Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing N/A
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)
1.5 Base
Rent: $15,000.00 per month (“Base Rent”), payable on the 1st
day of each month commencing 8/13/2026. (See also Paragraph 4)
☒ If
this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 52 .
1.6 Base
Rent and Other Monies Paid Upon Execution:
(a) Base
Rent: $15,000.00 for the period 8/13/2026 - 12/31/2027 .
(b) Security
Deposit: $0 (“Security Deposit”). (See also Paragraph 5)
(c) Association
Fees: $0 for the period __________.
(d) Other:
$0 for 0 .
(e) Total
Due Upon Execution of this Lease: $9,193.55.
1.7 Agreed Use: office,
vehicle, equipment storage and parking . (See also Paragraph 6)
1.8 Insuring
Party. Lessor is the “Insuring Party” unless otherwise stated herein. (See also Paragraph 8)
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1.9 Real
Estate Brokers. (See also Paragraph 15 and 25) Not Applicable. No Brokers in this transaction.
(a) Representation:
Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Relationship, confirms and consents to the following agency
relationships in this Lease with the following real estate brokers (“Broker(s)”) and/or their agents (“Agent(s)”):
Lessor’s Brokerage Firm _____ License No.
_____ is the broker of (check one): ☐ the Lessor; or ☐ both the Lessee and Lessor (dual agent).
Lessor’s Agent·_____ License No.
_____ is (check one): ☐ the Lessor’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
Lessee’s Brokerage Firm _____ License No.
____ is the broker of (check one): ☐ the Lessee; or ☐ both the Lessee and Lessor (dual agent).
Lessee’s Agent _____ License No. _____ is
(check one): ☐ the Lessee’s Agent (salesperson or broker associate); or ☐ both the Lessee’s Agent and the Lessor’s
Agent (dual agent).
(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 _____ or _____% of the total Base Rent) for the brokerage
services rendered by the Brokers.
1.10 Guarantor.
The obligations of the Lessee under this Lease are to be guaranteed by _____ (“Guarantor”). (See also Paragraph 37)
1.11 Attachments.
Attached hereto are the following, all of which constitute a part of this Lease:
☒ an Addendum consisting of Paragraphs 51 through 53 ;
☐ a plot plan depicting the Premises;
☐ a current set of the Rules and Regulations;
☐ a Work Letter;
☐ other (specify): _____.
Page 2 of 32
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. While the approximate square footage of the Premises may have been used in the marketing
of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment
should the actual size be determined to be different. NOTE: Lessee is advised to verify the actual size prior to executing this Lease.
2.2 Condition.
Lessor shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs (“Start Date”), and, so long as the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if any, and all other
such elements in the Premises, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls and foundation of any buildings on the Premises (the “Building”) shall be free
of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state
or federal law. If a non-compliance with said warranty exists as of the Start Date, or if one of such systems or elements should malfunction
or fail within the appropriate warranty period, Lessor shall, as Lessor’s sole obligation with respect to such matter, except as
otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, 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 Building. 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. Lessor also warrants, that unless otherwise specified in writing,
Lessor is unaware of (i) any recorded Notices of Default affecting the Premise; (ii) any delinquent amounts due under any loan secured
by the Premises; and (iii) any bankruptcy proceeding affecting the Premises,
2.3 Compliance.
Lessor warrants that to the best of its knowledge the improvements on the Premises comply with the building codes, applicable laws, covenants
or restrictions of record, regulations, and ordinances (“Applicable Requirements”) that were in effect at the time
that each improvement, or portion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises,
modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee’s use (see
Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE:
Lessee is responsible for determining whether or not the 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 Lessor’s expense. If Lessee does not give Lessor written notice of a non-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 Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall
allocate the cost of such work as follows:
(a) Subject
to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee
as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such Capital
Expenditure is required during the last 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 to pay the difference between the actual cost thereof and an amount equal to 6 months’ Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written
notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the
last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.
Page 3 of 32
(b) If
such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated
seismic modifications), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during
the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th
of the portion of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation
at any time. If, however, 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 90 days prior
written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessor’s termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this
Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days
written notice to Lessor.
(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use
or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii)
complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.
2.4 Acknowledgements.
Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it has been advised by Lessor
and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities
Act), and their suitability for Lessee’s intended use, (c) 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, (d) it is not relying on
any representation as to the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to
Lessee’s decision to Lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers
have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Lessee’s ability to honor
the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability
and/or suitability of all proposed tenants.
2.5 Lessee
as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start
Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work.
3. Term.
3.1 Term.
The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early
Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the Premises
being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent
shall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligations to
pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be in effect during such period. Any such Early Possession
shall not affect the Expiration Date.
Page 4 of 32
3.3 Delay
In Possession. Lessor agrees to use commercially reasonable efforts to deliver exclusive possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shall not, however, be obligated
to pay Rent or perform its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee
would otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, as the same may be extended under the terms of any Work letter executed by Parties, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day period, Lessee’s
right to cancel shall terminate. If possession of the Premises is not delivered within 120 days after the Commencement Date, this Lease
shall terminate unless other agreements are reached between Lessor and Lessee, in writing.
3.4 Lessee
Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with its obligation
to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1 Rent
Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to
be rent (“Rent”).
4.2 Payment.
Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except
as specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not constitute a waiver and Lessee
shall be obligated to pay the amount set forth in this Lease. 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 Charge and Lessor, at its option, may require all
future Rent be paid by cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or
costs.
4.3 Association
Fees. In addition to the Base Rent, Lessee shall pay to Lessor each month an amount equal to any owner’s association or condominium
fees levied or assessed against the Premises. Said monies shall be paid at the same time and in the same manner as the Base Rent.
Page 5 of 32
5. Security
Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future,
and/ 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 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security
Deposit not used or applied by Lessor. Lessor shall upon written request provide Lessee with an accounting showing how that portion of
the Security Deposit that was not returned was applied. 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. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN
LIEU OF PAYMENT OF THE LAST MONTH’S RENT.
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. Other than guide, signal and seeing eye
dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. 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, byproducts 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,
ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, 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.
Page 6 of 32
(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, comply with all Applicable
Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that
was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during
the term of this Lease, by or for Lessee, or any third party.
(d) Lessee
Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless
from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party
(provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the
cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease.
No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from
its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
(e) Lessor
Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse
and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation,
which result from Hazardous Substances which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the Applicable
Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease.
(f) Investigations
and Remediations. Lessor shall retain the responsibility and pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities
at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor’s investigative and remedial responsibilities.
(g) Lessor
Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee
is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph
13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated
cost to remediate such condition exceeds 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. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the
cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment.
In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation as soon as reasonably
possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof
within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.
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6.3 Lessee’s
Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense,
fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner
to the Premises, without regard to whether said Applicable Requirements are now in effect or become 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 of any documents involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness
or other condition conducive to the production of mold; or (ii) any mustiness or other odors that might indicate the presence of mold
in the Premises. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to Lessor within 10
days of the receipt of a written request therefor. In addition, Lessee shall provide Lessor with copies of its business license, certificate
of occupancy and/or any similar document within 10 days of the receipt of a written request therefor.
6.4 Inspection;
Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants authorized by Lessor
shall have the right to enter into Premises at any time in the case of an emergency, and otherwise at reasonable times after reasonable
notice, for the purpose of inspecting and/or testing the condition of the Premises and/or 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 Hazardous Substance
Condition (see paragraph 9.1(e)) 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. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to
Lessor within 10 days of the receipt of a written request therefor. Lessee acknowledges that any failure on its part to allow such inspections
or testing will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which
will be extremely difficult to ascertain. Accordingly, should the Lessee fail to allow such inspections and/or testing in a timely fashion
the Base Rent shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing
Base Rent or $100, whichever is greater for the remainder to the Lease. The Parties agree that such increase in Base Rent represents fair
and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to allow such inspection
and/or testing. Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such
failure nor prevent the exercise of any of the other rights and remedies granted hereunder.
7. Maintenance;
Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee’s
Obligations.
(a) In
General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable
Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole
expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use,
any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such
as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows, doors, plate glass, skylights, landscaping, driveways,
parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee, in keeping the
Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement
and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee’s obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair.
Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a first-class condition (including, e.g.
graffiti removal) consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity, including,
when necessary, the exterior repainting of the Building.
Page 8 of 32
(b) Service
Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in customary form
and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if
any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including
fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof covering and drains, and (vi) clarifiers. However,
Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse
Lessor, upon demand, for the cost thereof.
(c) Failure
to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after
10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform
such obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly pay to
Lessor a sum equal to 115% of the cost thereof.
(d) Replacement.
Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting
from Lessee’s failure to exercise and perform good maintenance practices, If an item described in Paragraph 7.1(b) cannot be repaired
other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the
cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term
of this Lease or any extension thereof, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost
of such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost per month).
Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any time.
7.2 Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any manner whatsoever, to repair and maintain the Premises, or
the equipment therein, all of which obligations are intended to be that of the Lessee. It is the intention of the Parties that the terms
of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.3 Utility
Installations; Trade Fixtures; Alterations.
(a) Definitions.
The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical
distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in
or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed
without doing material damage to the Premises. The term “Alterations” shall mean any modification of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations”
are defined as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(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 Alterations or 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, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for
additional modifications and/or improvements to the Premises resulting from Applicable Requirements, such as compliance with Title 24,
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, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to commencement of the work, and (iii) compliance with all conditions
of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. For work which costs an amount 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.
Page 9 of 32
(c) Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee
at or for use on the Premises, which claims are or may be secured by any mechanic’s or materialmen’s lien against the Premises
or any interest therein. Lessee shall give Lessor not less than 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 and the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises 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 Premises)
to the level specified in Applicable Requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee.
Any personal property of Lessee not removed on or before the Expiration Date or any earlier termination date shall be deemed to have been
abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below.
8. Insurance;
Indemnity.
8.1 Payment
For Insurance. Lessee shall pay for all insurance required under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior
to or extending beyond the Lease term shall be prorated to correspond to the Lease term. Payment shall be made by Lessee to Lessor within
10 days following receipt of an invoice.
Page 10 of 32
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. Lessee
shall add Lessor as an additional insured by means of an endorsement at least as broad as the Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement. 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. Lessee shall provide an endorsement on its liability policy(ies) which
provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall
be considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain
liability insurance as described in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee.
Lessee shall not be named as an additional insured therein. •
8.3 Property
Insurance- Building, Improvements and Rental Value.
(a) Building
and Improvements. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable
to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to
the full insurable 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 Lessee’s personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any Applicable Requirements requiring
the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department
of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage
has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.
(b) Rental
Value. The Insuring Party shall obtain and keep in force a policy or policies in the name of Lessor with loss payable to Lessor and
any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental
Value insurance”). Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount
of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss.
(c) Adjacent
Premises. If the Premises are part of a larger building, or of a group of buildings owned by Lessor which are adjacent to the Premises,
the Lessee shall pay for any increase in the premiums for the property insurance of such building or buildings if said increase is caused
by Lessee’s acts, omissions, use or occupancy of the Premises.
Page 11 of 32
8.4 Lessee’s
Property; Business Interruption Insurance; Worker’s Compensation Insurance.
(a) Property
Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade Fixtures, and Lessee
Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed
$1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures
and Lessee Owned Alterations and Utility Installations.
(b) Business
Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for
direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.
(c) Worker’s
Compensation Insurance. Lessee shall obtain and maintain Worker’s Compensation Insurance in such amount as may be required by
Applicable Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement. Lessee shall provide Lessor with
a copy of such endorsement along with the certificate of insurance or copy of the policy required by paragraph 8.5.
(d) No
Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance specified herein
are adequate to cover Lessee’s property, business operations or obligations under this Lease.
8.5 Insurance
Policies. Insurance required herein shall be by companies maintaining during the policy term a “General Policyholders Rating”
of at least A-, VII, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may
be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall,
prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required
endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modification
except after 30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may increase his liability insurance
coverage and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be
for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure
and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver
of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required,
or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right
to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated
thereby.
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8.7 Indemnity.
Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises,
Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of,
involving, or in connection with, a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee
and/or by Lessee’s employees, contractors or invitees. If any action or proceeding is brought against Lessor by reason of any of
the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 Exemption
of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor
nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property
of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage
or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from
the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures,
or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of
the building of which the Premises are a part, or from other sources or places, (ii) any damages arising from any act or neglect of any
other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other Lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse
in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to
the provisions of paragraph 8.
8.9 Failure
to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose
Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult
to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain the required insurance and/or does not provide
Lessor with the required binders or certificates evidencing the existence of the required insurance, the Base Rent shall be automatically
increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that
Lessor will incur by reason of Lessee’s failure to maintain the required insurance. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this
Lease.
9. Damage
or Destruction.
9.1 Definitions.
(a) ”Premises
Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
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(b) “Premises
Total Destruction” shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) “Insured
Loss” shall mean damage or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations
and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of
any deductible amounts or coverage limits involved.
(d) “Replacement
Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements,
and without deduction for depreciation.
(e) “Hazardous
Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or a contamination by,
a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2 Partial
Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense,
repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make
the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute
the shortage in proceeds (except as to the deductible which is Lessee’s responsibility) as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate
assurance thereof, within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives 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 in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect
by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) 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.
9.3 Partial
Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon
as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) terminate
this Lease by giving written notice to Lessee within 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.
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9.4 Total
Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60 days
following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage
Near End of Term. If at any time during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month’s
Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such
damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve
this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof)
needed to make the repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of Lessor’s written
notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds,
Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then
this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished.
9.6 Abatement
of Rent; Lessee’s Remedies.
(a) Abatement.
In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee ls not responsible
under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability
for any such damage, destruction, remediation, repair or restoration except as provided herein.
(b) Remedies.
If Lessor is 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 Lessee’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 as of the date specified in said notice. If the repair or restoration is commenced
within such 30 days, this Lease shall continue in full force and effect. “Commence” shall mean either the unconditional authorization
of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination;
Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much
of Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.
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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 Premises or 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 Building address. Real Property Taxes shall also include any tax, fee, levy, assessment or charge,
or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change
in the ownership of the Premises, and (ii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this
Lease.
10.2 Payment
of Taxes. In addition to Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax installment due at least 20
days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration
or termination of this Lease, Lessee’s share of such installment shall be prorated. In the event Lessee incurs a late charge on
any Rent payment, Lessor may estimate the current Real Property Taxes, and require that such taxes be paid in advance to Lessor by Lessee
monthly in advance with the payment of the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment
of taxes divided by the number of months remaining before the month in which said installment becomes delinquent. When the actual amount
of the applicable tax bill is known, the amount of such equal monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is insufficient to pay such Real Property Taxes when due, Lessee
shall pay Lessor, upon demand, such additional sum as is necessary. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance of its obligations under this Lease, then any such advance
payments may be treated by Lessor as an additional Security Deposit.
10.3 Joint
Assessment. If the Premises are not separately assessed, Lessee’s liability shall be an equitable proportion of the Real Property
Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor
from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available.
10.4 Personal
Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause its Lessee
Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and
billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement
setting forth the taxes applicable to Lessee’s property.
11. Utilities
and Services.
11.1 Lessee
shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion,
to be determined by Lessor, of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be liable
in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in cooperation with governmental
request or directions.
11.2 Within
fifteen days of Lessor’s written request, Lessee agrees to deliver to Lessor such information, documents and/or authorization as
Lessor needs in order for Lessor to comply with new or existing Applicable Requirements relating to commercial building energy usage,
ratings, and/or the reporting thereof.
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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) Unless
Lessee is a corporation and its stock is publicly traded on a national stock exchange, 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 buyout 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 of the most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. “Net Worth of Lessee” shall mean the net
worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An
assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(d), or
a non-curable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting
as a non-curable 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 110% of the price previously in effect, and (ii) all
fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 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.
(f) Lessor
may reasonably withhold consent to a proposed assignment or subletting if Lessee is in Default at the time consent is requested.
(g) Notwithstanding
the foregoing, allowing a de minimis portion of the Premises, i.e. 20 square feet or less, to be used by a third party vendor in connection
with the installation of a vending machine or payphone shall not constitute a subletting.
12.2 Terms
and Conditions Applicable to Assignment and Subletting.
(a) Regardless
of Lessor’s 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, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
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(b) Lessor
may accept Rent or performance of Lessee’s obligations from any person other than Lessee pending approval or disapproval
of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute
a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.
(c) Lessor’s
consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d) In
the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for
the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor’s
remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor.
(e) Each
request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’s determination
as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any, together with a fee of $500 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. (See also Paragraph 36)
(f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and agreed to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease, other
than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.
(g) Lessor’s
consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the original Lessee by this
Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2)
12.3 Additional
Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee
hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such
Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance
of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee’s then
outstanding obligations any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform
and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations under this
Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee
to the contrary.
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(b) In
the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake
the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for
any prior Defaults or Breaches of such sublessor.
(c) Any
matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d) No
sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent.
(e) Lessor
shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against
Lessee for any such Defaults cured by the sublessee.
13. Default;
Breach; Remedies.
13.1 Default;
Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A “Breach” is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The
abandonment of the Premises; the vacating of the Premises prior to the expiration or termination of this Lease without providing a commercially
reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,
or without providing reasonable assurances to minimize potential vandalism; or failure to deliver to Lessor exclusive possession of the
entire Premises in accordance herewith prior to the expiration or termination of this Lease.
(b) The
failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to
a third party, when due to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee.
THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The
failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts constituting public
or private nuisance, and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days
following written notice to Lessee. In the event that Lessee commits waste, a nuisance or an illegal activity a second time then, the
Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.
(d) The
failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 42, (viii) material
safety data sheets (MSDS), or (ix) 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.
(e) A
Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1(a), (b),(c) or (d), above, where such Default continues for a period of 30 days after
written notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required
for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.
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(f) The
occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii)
becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition
filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially
all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located
at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in
the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and
not affect the validity of the remaining provisions.
(g) The
discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(h) If
the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s
becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory 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
or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies.
If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor
an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event
of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:
(a) Terminate
Lessee’s right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv) any other amount necessary to compensate Lessor
for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises,
expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion
of any leasing commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus
one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right
to recover any damages to which Lessor is otherwise entitled. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,
or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this
Lease and/or by said statute.
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(b) Continue
the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet or assign, subject
only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.
(c) Pursue
any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee’s occupancy
of the Premises.
13.3 Inducement
Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed
by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s
entering into this Lease, all of which concessions are hereinafter referred to as “Inducement Provisions,” shall be
deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach
by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed
a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance.
13.4 Late
Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by
Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall immediately 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 by reason of such late payment. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount,
nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder,
whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to the contrary,
Base Rent shall, at Lessor’s option, become due and payable quarterly in advance.
13.5 Interest.
Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the
31st day after it was due. The interest (“Interest”) charged shall be computed at the rate of 10% per annum 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.
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13.6 Breach
by Lessor.
(a) Notice
of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt
by Lessor, and any Lender whose name and address shall have been furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that
more than 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.
(b) Performance
by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt of said
notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure, provided however, that such offset shall
not exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving Lessee’s right to seek
reimbursement from Lessor for any such expense in excess of such offset. 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 Building, or more than 25% of that portion of the Premises
not occupied by any building, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 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 paid by the condemnor 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
Commission. In addition to the payments owed pursuant to Paragraph 1.9 above, Lessor agrees that: (a) if Lessee exercises any Option,
(b) if Lessee or anyone affiliated with Lessee acquires any rights to the Premises or other premises owned by Lessor and located within
the same Project, if any, within which the Premises is located, (c) if Lessee remains in possession of the Premises, with the consent
of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers in effect at the time the Lease was executed.
The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary.
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15.2 Assumption
of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation
hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and 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 to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.
15.3 Representations
and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker, agent or finder (other than the Brokers and Agents, if any) in connection with this Lease, and that no one other
than said named Brokers and Agents is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may
be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
16. Estoppel
Certificates.
(a) Each
Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current
“Estoppel Certificate” form published by AIR CRE, plus such additional information, confirmation and/or statements
as may be reasonably requested by the Requesting Party.
(b) If
the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 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 no uncured defaults in the Requesting Party’s performance, and (iii) if Lessor is the Requesting
Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting
Party’s Estoppel Certificate, and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate.
In addition, Lessee acknowledges that any failure on its part to provide such an Estoppel Certificate will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel Certificate in a timely fashion the monthly Base Rent
shall be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent
or $100, whichever is greater for remainder of the Lease. The Parties agree that such increase in Base Rent represents fair and reasonable
compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to provide the Estoppel Certificate.
Such increase in Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach with respect to the failure to provide
the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.
(c) If
Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall within 10 days after
written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3 years. All such
financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
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17. Definition
of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior Lease. In the event of a transfer of Lessor’s
title or interest in the Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the
Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon
the Lessor as hereinabove defined.
18. Severability.
The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19. Days.
Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer
to calendar days.
20. Limitation
on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, or its partners, members,
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 Lessor’s partners, members, directors, officers
or shareholders, or any of their personal assets for such satisfaction.
21. Time
of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the Parties under
this Lease.
22. No
Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants
to the Brokers that It has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the 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.
23. 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 or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid,
or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different address for notice, except that upon Lessee’s taking
possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate in writing.
23.2 Date
of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given
72 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail
or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service
or courier. Notices delivered by hand, or transmitted by facsimile transmission or by email shall be deemed delivered upon actual receipt.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
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23.3 Options.
Notwithstanding the foregoing, in order to exercise any Options (see paragraph 39), the Notice must be sent by Certified Mail (return
receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt
establishing the date the notice was received by the Lessor.
24. Waivers.
(a) No
waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant
or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s
consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent.
(b) The
acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor
on account of monies or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
(c) THE
PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF
ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures
Regarding the Nature of a Real Estate Agency Relationship.
(a) When
entering into a discussion with a real estate agent regarding a 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 in this transaction, as follows:
(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 Lessor: A fiduciary duty of utmost care, integrity,
honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (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.
(ii) Lessee’s
Agent. An agent can agree to act as agent for the Lessee only. In these situations, the agent is not 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. An agent acting
only for a Lessee 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 Lessor: (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.
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(iii) Agent
Representing Both Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licensees, can
legally be the agent of both 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 agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary
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 Lessor and Lessee, the agent may not, without the express
permission of the respective Party, disclose to the other Party confidential information, including, but not limited to, facts relating
to either Lessee’s or Lessor’s financial position, motivations, bargaining position, or other personal information that may
impact rent, including Lessor’s willingness to accept a rent less than the listing rent or Lessee’s willingness to pay rent
greater than the rent offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility
to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding
of the transaction. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult
a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the
federal and state tax consequences of a transaction can be complex and subject to change.
(b) Brokers
have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal
proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one year after
the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit
and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing
limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor
and Lessee agree to identify to Brokers as “Confidential” any communication or information given Brokers that is considered
by such Party to be confidential.
26. No
Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination
of this Lease. At or prior to the expiration or termination of this Lease Lessee shall deliver exclusive possession of the Premises to
Lessor. For purposes of this provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises,
removed all of its personal property therefrom and that the Premises have been returned in the condition specified in this Lease. In the
event that Lessee does not deliver exclusive possession to Lessor as specified above, then Lessor’s damages during any holdover
period shall be computed at the amount of the Rent (as defined in Paragraph 4.1) due during the last full month before the expiration
or termination of this Lease (disregarding any temporary abatement of Rent that may have been in effect), but with Base Rent being 150%
of the Base Rent payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding
over by Lessee.
27. Cumulative
Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered
a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be
construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.
29. Binding
Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall
be initiated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or
similar technology shall be legal and binding.
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30. Subordination;
Attornment; Non-Disturbance.
30.1 Subordination.
This Lease and any Option granted hereby shall be subject and subordinate to any ground Lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any lender may elect to have this Lease and/or any Option granted hereby superior to the lien
of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or recordation thereof.
30.2 Attornment.
In the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination
of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3,
attorn to such new owner, and upon request, enter into a new 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 the new owner, this Lease will automatically become a new Lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor’s obligations, except that such new owner shall not: (a) be liable for any act or omission of any prior
lessor or with respect to events 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 which was not paid or credited to such new owner.
30.3 Non-Disturbance.
With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from
the lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options
to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing.
The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that,
upon written request from Lessor or a lender in connection with a sale, financing or refinancing of the Premises, Lessee and Lessor shall
execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
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31. Attorneys’
Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled
to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action
or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor
shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200
is a reasonable minimum per occurrence for such services and consultation).
32. Lessor’s
Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary
or desirable and the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises and/or other premises
as long as there is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without abatement of
rent or liability to Lessee.
33. Auctions.
Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor
shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs.
Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For Lease” signs during the
last 6 months of the term hereof. Except for ordinary “for sublease” signs, Lessee shall not place any sign upon the Premises
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.
35. Termination;
Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease
or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s
failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest,
shall constitute Lessor’s election to have such event constitute the termination of such interest.
36. Consents.
All requests for consent shall be in writing. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required
to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs
and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred
in the consideration of, or response to, a request by Lessee for any Lessor consent, including but not limited to consents to an assignment,
a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach
by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise
specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s
consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then reasonable
with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 10 business days following such request.
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37. Guarantor.
37.1 Execution.
The Guarantors, if any, shall each execute a guaranty in the form most recently published by AIR CRE, and each such Guarantor shall have
the same obligations as Lessee under this Lease.
37.2 Default.
It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execution
of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a
corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial
statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
38. Quiet
Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s
part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the
term hereof.
39. Options.
If Lessee is granted any Option, as defined below, then the following provisions shall apply.
39.1 Definition.
“Option” shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term
of or renew any Lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to Lease either the Premises
or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase
the Premises or other property of Lessor.
39.2 Options
Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned
or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting.
39.3 Multiple
Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless
the prior Options have been validly exercised.
39.4 Effect
of Default on Options.
(a) Lessee
shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice of Default and continuing until
said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default,
whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.
(b) The
period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee’s inability to exercise
an Option because of the provisions of Paragraph 39.4(a).
(c) An
Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option, if,
after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for
a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if Lessee commits a
Breach of this Lease.
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40. Multiple
Buildings. If the Premises are a part of a group of buildings controlled by Lessor, Lessee agrees that it will abide by and conform
to all reasonable rules and regulations which Lessor may make from time to time for the management, safety, and care of said properties,
including the care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessee also agrees to pay its fair share of common expenses
incurred in connection with such rules and regulations.
41. 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 no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection
of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
42. Reservations.
Lessor reserves to itself the right, from time to time, to grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights, dedication, map or restrictions.
43. Performance
Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment and there shall survive the right on the part of said Party
to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay
such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay.
A Party who does not initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have waived
its right to protest such payment.
44. Authority;
Multiple Parties; Execution.
(a) 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.
(b) If
this Lease is executed by more than one person or entity as “Lessee”, each such person or entity shall be jointly and severally
liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such
document.
(c) This
Lease may be executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
45. Conflict.
Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. Offer.
Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to Lease
to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
47. Amendments.
This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not
materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable non-monetary modifications to this Lease
as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises.
48. 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 LEASE.
49. Arbitration of Disputes. An Addendum
requiring the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease ☐ is ☐ is not
attached to this Lease.
Page 30 of 32
50. Accessibility;
Americans with Disabilities Act.
(a) The
Premises:
☒ have not undergone an
inspection by a Certified Access Specialist (CASp). Note: A Certified Access Specialist (CASp) can inspect the subject premises and determine
whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although
state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee
or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if
requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection,
the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential.
☐ have undergone an inspection
by a Certified Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that It received a copy of the inspection report at
least 48 hours prior to executing this Lease and agrees to keep such report confidential except as necessary to complete repairs and corrections
of violations of construction related accessibility standards.
In the event that the Premises have been issued an inspection report
by a CASp the Lessor shall provide a copy of the disability access inspection certificate to Lessee within 7 days of the execution
of this Lease.
(b) Since
compliance with the Americans with Disabilities Act (ADA) and other state and local accessibility statutes are dependent upon Lessee’s
specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar
legislation. In the event that Lessee’s use of the Premises requires modifications or additions to the Premises in order to be in
compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modifications and/or additions at Lessee’s
expense.
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 AIR CRE
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.
2. RETAIN
APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND
OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
WARNING: IF THE PREMISES 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.
Page 31 of 32
The parties hereto have executed this Lease at the place and on the
dates specified above their respective signatures.
Executed at: Los Alamitos
Executed at:
On:
On:
By LESSOR:
By LESSEE:
480 DICK BUCHANAN STREET, LLC
HANSEN & ADKINS AUTO TRANSPORT, LLC
By:
/s/ Steve Hansen
By:
/s/ Amy Rice
Name Printed:
Steve Hansen
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
By:
/s/ Louie Adkins
By:
Name Printed:
Louie Adkins
Name Printed:
Title:
Managing Member
Title:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Address:
Address:
Federal ID No.:
Federal ID No.:
BROKER
BROKER
Attn:
Attn:
Title:
Title:
Address:
Address:
Phone:
Phone:
Fax:
Fax:
Email:
Email:
Federal ID No.:
Federal ID No.:
Broker DRE License #:
Broker DRE License #:
Agent DRE License #:
Agent DRE License #:
Page 32 of 32
ADDENDUM TO LEASE
Date:
8/10/2026
By and Between
Lessor:
480 DICK BUCHANAN STREET, LLC
Lessee:
HANSEN & ADKINS AUTO TRANSPORT, LLC
Property Address:
480 Dick Buchanan Street, La Vergne, TN 37086
(street address, city, state, zip)
Paragraph: 51, 52, 53
Paragraph 51: Lessor hereby releases and waives, to the fullest extent
permitted by applicable law, any and all landlord’s liens and/or security interests, statutory or otherwise, now or hereafter created,
in, on and against any furniture, business or trade fixtures, equipment, inventory, or other personal property of Lessee from time to
time situated on or used in connection with the Premises. Lessor shall promptly execute any documents, instruments and agreements reasonably
requested by Lessee to evidence such release and waiver. Lessor further agrees that, within ten (10) days of written request from Lessee,
Lessor shall execute and deliver to any lender providing financing to Lessee a commercially reasonable access agreement in such lender’s
customary form, permitting such lender and its agents to access to the Premises for the purposes of exercising its rights and remedies
with respect to Lessee’s furniture, business or trade fixtures, equipment, inventory, or other personal property situated on or
used in connection with the Premises.
Paragraph 52: Base Rent shall be prorated for 19 of 31 days for the
month of August 2026, and shall be set to $9,193.55.
Paragraph 53: The separate Addendum to Lease, Exhibit A, and Schedule
6.2(e) attached hereto are incorporated herein by reference.
In the event of any conflict between the provisions of this Addendum
and the printed provisions of the Lease, this Addendum shall control.
AIR CRE * https://www.aircre.com
* 213-687-8777 * contrats@aircre.com
NOTICE : No part of these works may be reproduced in any form without permission in writing.
Page 1 of 1
Execution Version
ADDENDUM TO LEASE
1. Guarantor: Paragraphs 1.10 and 37 are each hereby deleted in their entirety.
2. Warranty Periods: Paragraph 2.2 is hereby modified as follows:
a. Notwithstanding anything to the contrary contained in Paragraph 2.2, the warranty periods with respect
to (i) the electrical, plumbing, fire sprinkler, lighting, and HVAC systems, shall be one (1) year from the Start Date and (ii) the remaining
systems and other elements of the Building, shall be six (6) months from the Start Date.
b. The first sentence of Section 2.2 is hereby deleted in its entirety and replaced as follows:
Lessor
shall deliver the Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first
occurs (“Start Date”), and,
so long as Lessee is in compliance with Section 7.2, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”),
loading doors, sump pumps, if any, and all other such elements in the Premises,
other than those constructed by Lessee, shall be in good operating condition on said date, that the structural elements of the roof, bearing
walls and foundation of any buildings on the Premises (the “Building”) shall be free of material defects, and that
the Premises do not contain hazardous levels of any mold or fungi defined as toxic under Applicable Requirements.
3. Compliance. Paragraph 2.3 is hereby modified as follows:
a. Paragraph 2.3 is hereby modified to add the following language immediately following the last sentence
thereof:
“Notwithstanding anything to
the contrary contained in this Lease, to the extent any improvements are in non-compliance with Applicable Requirements as of the Start
Date, Lessee shall be under no obligation to take any action or incur any expense so as to make any such improvements in compliance with
the Applicable Requirements and such non-compliance shall not be deemed a breach by Lessee hereunder, it being the intent of the parties
that remedying any such non-compliance shall be a Lessor obligation and expense hereunder.”
b. Paragraph 2.3(b) is hereby deleted in its entirety and replaced as follows:
“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 shall pay for such Capital Expenditure.”
4. Lessee as Prior Owner/Occupant: Paragraph 2.5 is hereby deleted in its entirety.
5. Association Fees: Paragraph 4.3 is hereby amended to add the following language immediately following
the last sentence thereof:
“Lessor covenants, warrants and
represents that, as of the Start Date, there are no such owner’s association or condominium fees affecting the Premises.”
6. Security Deposit: Paragraph 5 is hereby deleted in its entirety.
Page 1 of 9
7. Hazardous Substances: Paragraph 6.2 is hereby modified as follows:
a. Paragraph 6.2(b) is hereby deleted in its entirety and replaced as follows:
“Duty to Inform Lessor.
If Lessee becomes aware 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, within ten (10) Business Days of such awareness, 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
Substances, provided, however, that if the Lessee has a good faith reason to believe that there is an immediate danger of personal injury
or property damage as a result of the presence of the Hazardous Substance, the 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 Substances.”
b. Paragraph 6.2(c) is hereby deleted in its entirety and replaced as follows:
“Lessee Remediation. Lessee
shall not cause or permit any Hazardous Substances to be spilled or released in, on, under or about the Premises (including through the
plumbing or sanitary sewer systems) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements, and take,
as and when required by Applicable Requirements, (i) all investigatory and/or remedial action reasonably required, for the maintenance,
security and/or monitoring of the Premises or neighboring properties, and (ii) all remedial action reasonably required for the cleanup
of any contamination of the Premises or neighboring properties, that was caused by Lessee, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the Term of this Lease, by or for Lessee. Notwithstanding the foregoing, Lessee shall not be
responsible or liable for the cleanup, remediation, or any associated costs (including any contributory costs) for Hazardous Substances
present at or otherwise brought onto the Premises by Lessor, its agents, or employees nor for any Pre-Existing Hazardous Substances or
Scheduled Environmental Conditions (as such terms are defined in Paragraph 6.2(e)). In the event of any dispute regarding the attribution
of environmental contamination or liability for conditions at the Premises that may have resulted from activities occurring both prior
to and during the Term, there shall be a rebuttable presumption that such contamination or liability is attributable to Pre-Existing Hazardous
Substances or other pre-existing conditions, and the burden of proof to establish that such contamination or liability is attributable
to Lessee’s activities during the Term shall rest with Lessor.”
c. Paragraph 6.2(d) is hereby deleted in its entirety and replaced as follows:
“Lessee Indemnification.
Lessee and its successors and assigns shall indemnify, defend, reimburse and hold Lessor, its employees and lenders, harmless from and
against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances brought onto the
Premises by or for Lessee during the Term or which are caused by the gross negligence or willful misconduct of Lessee, its agents or employees.
Lessee’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. Notwithstanding anything
to the contrary contained in this Lease, in no event shall Lessee’s indemnification obligations include consequential, special or
punitive damages, including, without limitation, any claims for diminution in value of the Premises, except that the foregoing limitation
shall not apply to any consequential, special or punitive damages awarded to a third party in connection with a third-party claim for
which Lessee is obligated to indemnify Lessor under this Lease, and in such event Lessee’s indemnification obligation shall extend
only to the amounts actually awarded to such third-party in a final, non-appealable judgment in a court of competent jurisdiction.”
Page 2 of 9
d. Paragraph 6.2(e) is hereby deleted in its entirety and replaced as follows:
“Except
as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its
employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from
Hazardous Substances which existed 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 (collectively, “Pre-Existing Hazardous Substances”). The parties acknowledge that,
prior to the Start Date, one or more Phase I Environmental Site Assessments were obtained with respect to the Premises for the purpose
of establishing a baseline of environmental conditions existing as of the Start Date. Notwithstanding anything herein to the contrary,
the existence, identification or description of any environmental condition, concern, recognized environmental condition (REC), historical
recognized environmental condition (HREC), controlled recognized environmental condition (CREC), area of concern or similar matter in
any such Phase I Environmental Site Assessment shall not, in and of itself, create any obligation on the part of Lessor to investigate,
remove, remediate, restore or abate such matter unless required by Applicable Requirements. Lessor shall have responsibility under this
Paragraph 6.2 to remediate only those pre-existing environmental conditions as required by Applicable Requirements or otherwise expressly
identified on Schedule 6.2(e) attached hereto (the “Scheduled Environmental Conditions”), and Lessor’s obligation
with respect thereto shall be limited to performing the remediation activities described on such Schedule and such other remediation efforts
as are necessary to comply with Applicable Requirements relating to Hazardous Substances, with the selection of remedial methods, technologies
and cleanup standards to be determined by Lessor in its reasonable discretion without unreasonably interference to or disruption of the
use of the Premises of Lessee. Lessee acknowledges that, except with respect to the Scheduled Environmental Conditions, Lessor shall have
no duty under this Lease to investigate, remove, remediate, restore or abate any environmental condition existing on the Premises prior
to the Start Date solely because such condition was identified or referenced in a Phase I Environmental Site Assessment. Lessor’s
obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal,
remediation, restoration and/or abatement with respect to the Pre-Existing Hazardous Materials, and shall survive the expiration or termination
of this Lease. Lessee shall not, except as required by Applicable Requirements or a governmental order or as otherwise agreed, conduct,
commission, authorize, permit, or cause any Phase II Environmental Site Assessment or other intrusive environmental investigation of the
Premises (each, a “Phase II Investigation”) without Lessor’s prior written consent, which may be granted, conditioned,
delayed, or withheld in Lessor’s sole and absolute discretion. Any voluntary Phase II Investigation consented to by Lessor, shall
be performed by qualified consultants reasonably approved by Lessor, pursuant to a scope of work reasonably approved by Lessor, at Lessee’s
sole cost and expense, in compliance with Applicable Requirements, and subject to Lessee’s obligations to restore the Premises and
indemnify Lessor against all losses, claims, liabilities, costs, and expenses arising from such Phase II Investigation, to the extent
the results of such Phase II Investigation are the responsibility of Lessee hereunder. Lessee shall promptly provide Lessor with copies
of all reports, sampling results, and governmental correspondence relating to any Phase II Investigation. Lessee shall not submit any
report, data, findings, or conclusions generated from any environmental investigation to any governmental authority or other third party
without first providing Lessor with a copy thereof and a reasonable opportunity to review the same; provided, however, that nothing herein
shall prohibit disclosures required by Applicable Requirements or governmental order.
e. The last sentence of Paragraph 6.2(f) is hereby deleted in its entirety and replaced as follows:
“Lessee shall reasonably cooperate
in any such activities at the request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the
Premises during normal business hours after reasonable prior written notice in order to carry out Lessor’s investigative and remedial
responsibilities, provided, however, Lessee shall have the right to have a representative of Lessee present upon any entry into the Premises.”
Page 3 of 9
f. Paragraph 6.2(g) is hereby deleted in its entirety and replaced as follows:
“Lessor Termination Option.
If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally 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 to Lessor’s rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s
option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition
exceeds 12 times the then monthly Base Rent or $250,000, whichever is greater, give written notice to Lessee, within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this
Lease as of the date one hundred twenty (120) days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within ten (10) days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which
the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $250,000,
whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurances thereof within thirty (30) days following
such commitment. In such event, this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediation
as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds
or assurances thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s notice of termination.”
8. Lessee’s Compliance with Applicable Requirements: Paragraph 6.3 is hereby deleted in its
entirety and replaced as follows:
“Except as otherwise provided
in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Lessor’s
engineers and/or consultants which relate in any manner to the Premises, without regard to whether said Applicable Requirements are now
in effect or become effective after the Start Date. Lessee shall, within ten (10) days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other reasonable documents, and other reasonable information evidencing Lessee’s compliance
with any Applicable’ Requirements specified by Lessor in such request, and shall promptly upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to
or involving the failure of Lessee or the Premises to materially comply with any Applicable Requirements. Likewise, Lessee shall give
written notice to Lessor within ten (10) Business Days of actual knowledge of: (i) any water damage to the Premises or any suspected seepage,
pooling, dampness or other condition reasonably likely to result in the production of mold; or (ii) material mustiness or other odors
reasonably likely to indicate the presence of mold in the Premises. In addition, Lessee shall provide copies of all relevant material
safety data sheets (MSDS) to Lessor within ten (10) days of the receipt of a written request therefor. In addition, Lessee shall provide
Lessor with copies of its business license and certificate of occupancy within ten (10) days of the receipt of a written request therefor.
Notwithstanding anything in this Paragraph 6.3 to the contrary, Lessor may not request compliance documentation more than two (2) times
in any 12-month period; provided, however, this limitation shall not apply in the event Lessor is requesting such compliance documentation
on behalf of Lessor’s lender, insurer or any governmental agency, or in relation to a proposed sale of the Premises.”
Page 4 of 9
9. Inspection Compliance: Paragraph 6.4 is hereby deleted in its entirety and replaced as follows:
“Lessor and Lessor’s “Lender”
(as defined in Paragraph 30) and consultants authorized by Lessor shall have the right to enter the Premises at any time in the case of
an emergency, and otherwise at reasonable times after reasonable written notice, for the purpose of inspecting and/or testing the condition
of the Premises and/or 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 Hazardous Substance Condition (see paragraph 9.1(e)) is found to exist or be imminent, or
the inspection is requested or ordered by a governmental authority, in each case, as a result of a breach of Lessee’s obligations
hereunder. In such case, Lessee shall within ten (10) Business Days of written request therefore, together with reasonable backup documentation,
reimburse Lessor for the reasonable, out-of-pocket cost of such inspection, so long as such inspection is reasonably related to the violation
or contamination resulting from Lessee’s breach. In addition, Lessee shall provide copies of all relevant material safety data sheets
(MSDS) in Lessee’s possession to Lessor within ten (10) days of the receipt of a written request therefor.”
10. Maintenance and Repair Obligations: Paragraphs 7.1 and 7.2 are each hereby deleted in their entirety
and replaced as follows:
“7.1 Lessor’s Obligations:
Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 7.2 (Lessee’s Obligations), 9 (Damage or Destruction)
and 14 (Condemnation), it is intended by the Parties hereto that Lessor shall, except to the extent such maintenance is the responsibility
of Lessee under Paragraph 7.2, at Lessor’s sole expense, keep and maintain in good order and repair (including replacements to the
extent necessary), the following equipment or facilities with respect to the Premises: plumbing, HVAC equipment, boilers, pressure vessels,
fire protection system, walls (interior and exterior), foundations, roofs, roof drainage systems, driveways, parking lots, fences, retaining
walls, sidewalks and parkways located in, on, or adjacent to the Premises, except that Lessee will reimburse Lessor for the reasonable,
out-of-pocket cost of any repair occasioned by the act or negligence of Lessee. It is the intention of the Parties that the terms of this
Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises.
7.2. Lessee’s Obligations:
a. Subject to the provisions of Paragraph
2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with Applicable Requirements), 7.1 (Lessor’s Obligations), 9 (Damage
or Destruction), it is intended by the Parties hereto that Lessee shall, at Lessee’s sole expense, keep and maintain the Premises
in good order and repair in the ordinary course including maintenance and repair of (i) overhead, dock and roll-up doors and door operators;
(ii) entry gates and gate operators; (iii) access control, alarm, monitoring and life-safety systems; (iv) interior electrical systems,
lighting, fixtures and lamping; (v) interior ceilings, walls, floors and finishes; (vi) locks, keying and hardware; (vii) fencing; (viii)
pest control; (ix) landscaping; (x) interior plumbing and exterior landscape irrigation; (xi) HVAC (limited to servicing and preventive
maintenance); and (xii) other routine repairs of the nature customarily performed by a general maintenance contractor or handyman.
b. If Lessee fails to perform Lessee’s
obligations under this Paragraph 7.2, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in
the case of an emergency, in which case no notice shall be required), perform such obligations on Lessee’s behalf, and put the Premises
in good order, condition and repair, and Lessee shall, within ten (10) Business Days of written demand therefor, pay to Lessor a sum equal
to 110% of the reasonable, out-of-pocket costs thereof.”
11. Alterations: The second sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Lessee may, however, make nonstructural
Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent provided that Lessee delivers
at least ten (10) days prior written 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, will not adversely affect the electrical, plumbing, HVAC, and/or life safety systems, comply
with Applicable Requirements and do not trigger the requirement for additional modifications and/or improvements to the Premises resulting
from Applicable Requirements, such as compliance with Title 24, and the cost of such alteration is not in excess of Fifty Thousand and
00/100 Dollars ($50,000.00).”
Page 5 of 9
12. Removal: The first sentence of Paragraph 7.3(b) is hereby deleted in its entirety and replaced
as follows:
“Any Lessee Owned Alteration
or Utility Installation required by Lessor to be removed by the expiration or termination of this Lease shall be identified by Lessor
at the time for which Lessor provides consent to the installation of such Lessee Owned Alteration or Utility Installation.”
13. Payment for Insurance: The last sentence of Paragraph 8.1 is hereby deleted in its entirety and
replaced as follows:
“Notwithstanding anything to
the contrary contained in this Section 8.1, so long as no insurance claims were filed in the immediately preceding calendar year as a
result of Lessee’s actions, Lessee shall not be responsible for any insurance premiums increases attributable to insurance held
by Lessor (“Lessor’s Premiums”) in excess of 2.5% of such costs for the immediately preceding calendar year.
Lessee shall pay to Lessor, on the first day of each calendar month, together with Base Rent, one-twelfth (1/12) of the estimated Lessor’s
Premiums for such calendar year (the “Monthly Premiums”). Within sixty (60) days following the end of each calendar
year during the Lease term, Lessor shall furnish Lessee with a written statement (each, an “Insurance Statement”) setting
forth, in reasonable detail, Lessor’s Premiums incurred by Lessor for the preceding calendar year. If the Insurance Statement indicates
the total actual Lessor’s Premiums exceeded the total Monthly Premium payments made by Lessee during such year, then Lessee shall
pay the deficiency to Lessor within thirty (30) days after Lessee’s receipt of the Insurance Statement. If the Insurance Statement
indicates that the total Monthly Premium payments made by Lessee during the preceding calendar year exceeded the total actual Lessor’s
Premiums for such year, then Lessor shall credit the amount of overpayment against the next Monthly Premium payment(s) due from Lessee;
provided, however, if this Lease has expired or been terminated, then Lessor shall refund any overpayment to Lessee within thirty (30)
days after Lessor’s delivery of the Insurance Statement. Lessee shall have the right, at Lessee’s sole cost and expense, to
examine and audit Lessor’s books and records relating to Lessor’s Premiums for any calendar year.”
14. Real Property Taxes: Paragraph 10 is hereby modified as follows:
a. Paragraph 10.2 is hereby deleted in its entirety and replaced as follows: “All Real Property Taxes
shall be paid by Lessor.”
b. Paragraph 10.3 is hereby deleted in its entirety.
15. Assignment and Subletting: Paragraph 12.1(g) is hereby added immediately following Paragraph 12.1(f):
“12.1(g) Notwithstanding anything
to the contrary in this Lease, including, without limitation, Paragraphs 12.1(a)-(d) hereof, Lessee may, without the prior written consent
of Lessor, (i) assign this Lease or sublet the Premises or any portion thereof to any entity that controls, is controlled by, or is under
common control with, Lessee, (ii) effect, directly or indirectly, (a) any merger, consolidation, recapitalization or other similar transaction
of Lessee, (b) the sale, assignment, conveyance, or other transfer of all or substantially all of Lessee’s assets, (c) a transfer
of all or substantially all of the stock, equity or other interests of Lessee, and/or (d) any other transaction, or series of transactions,
that results in the change of control of Lessee (each of the foregoing transactions described in (a), (b), (c) and (d), a “Corporate
Transaction”), (iii) assign this Lease in connection with a Corporate Transaction. The foregoing assignments, subleases and
Corporate Transactions shall be referred to herein as “Permitted Transfers”. Provided, however, that no such Permitted
Transfer shall release Lessee from any of its obligations under this Lease, and Lessee shall remain fully and primarily liable for the
payment of Rent and the performance of all other obligations to be performed by Lessee hereunder.
Page 6 of 9
16. Defaults: Paragraph 13 is hereby modified as follows:
a. Paragraph 13.1(d) is hereby deleted in its entirety and replaced with the following:
“The failure by Lessee to provide
(i) reasonable written evidence of compliance with Applicable Requirements, (ii) intentionally omitted, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (vi) any document requested
under Paragraph 42, (vii) material safety data sheets (MSDS), or (viii) any other documentation or information which Lessor may reasonably
require of Lessee, each to the extent expressly required to be provided by Lessee under the terms of this Lease, where any such failure
continues without cure for a period of 30 days following written notice to Lessee.”
b. The second sentence of 13.2 is hereby deleted in its entirety and replaced with the following:
“Lessee shall pay to Lessor an
amount equal to 110% of the reasonable, out-of-pocket costs and expenses actually incurred by Lessor in such performance within ten (10)
Business Days of receipt of an invoice therefor.”
c. Paragraph 13.3 is hereby deleted in its entirety.
d. Paragraph 13.6(c) is hereby added immediately following Paragraph 13.6 (b): “13 .6(c) Notwithstanding
anything to the contrary contained herein, including, without limitation, Paragraphs 13.6 (a)-(b) hereof, in the event Lessor fails to
perform or provide any Essential Service (as defined herein) to the Premises for more than ten (10) consecutive Business Days following
notice thereof from Lessee, and such failure materially interferes with Lessee’s ability to conduct its business in or from the
Premises, then the Rent shall thereupon abate commencing on the eleventh (11th) consecutive Business Day, based upon the portion
of the Premises so affected or the impact on Lessee’s conduct of its business in and from the Premises until such failure is remedied.
Lessee shall reasonably cooperate with Lessor to the extent reasonably necessary for Lessor to perform or provide any Essential Service.
In the event Lessee fails to cooperate, Lessor’s time to satisfy its obligations under this section shall be extended in accordance
with the delay caused by Lessee. “Essential Service” means any of the following: heating or air-conditioning, electricity,
water or plumbing systems, parking or anything that prevents Lessee from accessing or using the Premises for normal business purposes
provided, however, that “Essential Service” shall strictly exclude any maintenance, repair, servicing, or other obligations
of Lessee set forth under Section 7.2 of this Lease. For the avoidance of doubt, during any such abatement, Lessee may (but shall not
be obligated to) exercise Lessee’s self-help rights in accordance with Section 13.6(b) to remedy such failure.”
17. Brokers: Paragraphs 1.9, 15.1, 15.2 are each hereby deleted in their entirety. Paragraph 15.3 is
deleted in its entirety and replaced as follows:
“Lessee and Lessor each represent
and warrant to the other that it has had no dealings with any person, firm, broker, agent or finder in connection with this Lease, and
that no one is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto.”
Page 7 of 9
18. Estoppel Certificates:
a. The last three sentences of Paragraph 16(b) are hereby deleted in their entirety and replaced as follows:
a. “Accordingly, should the Lessee fail to execute and deliver any Estoppel Certificate required under
this Lease within the time required, Lessee shall pay to Lessor, as additional rent, an administrative charge of Two Hundred Fifty Dollars
($250.00) per day commencing on the fifth (5th) day after written notice from Lessor of such failure and continuing until the Estoppel
Certificate is delivered. Such charge is intended to compensate Lessor for the administrative burden, delay, and costs resulting from
Lessee’s failure to comply and shall not constitute a waiver of Lessee’s Default or Breach and shall be in addition to, and
not in lieu of, any other rights and remedies available to Lessor under this Lease.” The first sentence of Paragraph 16(c) is hereby
deleted in its entirety and replaced as follows:
“If Lessor desires to finance, refinance,
or sell the Premises, or any part thereof, Lessee and all Guarantors shall, within ten (10) Business Days after written notice from Lessor
deliver to any potential lender or purchaser designated by Lessor such publicly available financial statements as may be reasonably required
by such lender or purchaser.”
19. Limitation on Liability: Paragraph 20 is hereby deleted in its entirety and replaced as follows:
“The obligations of Lessor under
this Lease shall not constitute personal obligations of Lessor, or its partners, members, 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 Lessor’s partners, members, directors, officers or shareholders, or any of their personal assets
for such satisfaction. The obligations of Lessee under this Lease shall not constitute personal obligations of Lessee, or its partners,
members, directors, officers or shareholders, and Lessor shall not seek recourse against Lessee’s partners, members, directors,
officers or shareholders, or any of their personal assets for such satisfaction. Notwithstanding anything to the contrary contained herein,
in no event shall any Party hereunder be liable for special, consequential or punitive damages; provided, however, that the foregoing
limitation shall not apply to any special, consequential or punitive damages awarded to a third party in connection with a third-party
claim for which a Party is obligated to indemnify the other Party under this Lease, and in such event such Party’s indemnification
obligation shall extend only to the amounts actually awarded to such third-party in a final, non-appealable judgment issued by a court
of competent jurisdiction.”
20. Non-Disturbance: Paragraph 30.3 is hereby deleted in its entirety and replaced as follows:
“Notwithstanding anything to
the contrary contained herein, including, without limitation, Paragraph 30.1 hereof, with respect to Security Devices entered into by
Lessor prior to or after the execution of this Lease, Lessee’s subordination of this Lease to such Security Device shall be subject
to receiving a commercially reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which
Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any Extension Term, will
not be disturbed so long as Lessee is not in breach hereof and attorns to the record owner of the Premises. Further, Lessor shall use
its commercially reasonable efforts to obtain a Non-Disturbance Agreement from the holder of any pre-existing Security Device which is
secured by the Premises and deliver same to Lessee within twenty (20) days after execution of this Lease. In the event that Lessor is
unable to provide the Non-Disturbance Agreement within said twenty (20) days, then Lessee may, at Lessee’s option, directly contact
Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.”
Page 8 of 9
21. Access: Paragraph 32 is hereby modified by adding the following language immediately following
the last sentence thereof:
“Lessee shall have the right
to have a representative present during any such access by Lessor or Lessor’s agents and for purposes of showing the Premises to
prospective tenants, such access shall be limited to the last six (6) months of the Term.”
22. Extension Option: Paragraph 39 is hereby deleted in its entirety and replaced as follows:
“Lessee
shall have five (5) options to extend the Term of the Lease (each, an “Extension Option”) for a period of two (2) years
each (each, an “Extension Term”), commencing on the date immediately following the Expiration Date of the then existing
Term. Lessee may exercise an Extension Option, upon written notice to Lessor at least one hundred eighty (180) days prior to the expiration
of the then existing Term or Extension Term, as applicable. If Lessee exercises an Extension Option, each Extension Term shall be upon
the same terms, covenants and conditions as those contained in this Lease, other than Base Rent, which shall be adjusted a follows: (x)
Base Rent for the first Extension Term shall equal one hundred three percent (103%) of the Base Rent in effect immediately prior to the
commencement of such Extension Term, and (y) thereafter, Base Rent for each of the remaining four (4) Extension Terms (each a “FMV
Extension Term”), shall be set at fair market value as of the commencement of such FMV Extension Term in accordance with Exhibit
A.”
Page 9 of 9
Exhibit A
Fair Market Value
Fair Market Value Base Rent shall be determined as follows:
(a) During the Extension Term(s) the amount of Rent shall be the amount
forecasted to be the fair market rental value of the Premises during such Extension Term established pursuant to the procedures, terms,
assumptions and conditions set forth herein (“Fair Market Value”); provided, however, regardless of such Fair Market Value,
Base Rent during an Extension Term shall not be greater than one hundred six percent (106%) of the Base Rent scheduled as of when the
prior Term expires, nor less than the Base Rent scheduled as of when the prior Term expires. Starting as of Lessee’s exercise of
the applicable Extension Option (but not earlier than six (6) months before the start of the applicable Extension Term), the Parties shall,
for thirty (30) days (“Negotiation Period”), attempt to agree upon the Fair Market Value. If during the Negotiation Period
the Parties do not agree on the Fair Market Value, then the Fair Market Value shall be established pursuant to the procedures set forth
herein, which shall be binding.
(b) Each Party shall, within fifteen (15) days after the end of the
Negotiation Period, in writing, submit to the other Party such Party’s determination of the Fair Market Value (“Submitted
Value(s)”). If a Party fails to timely provide a Submitted Value, then the other Patty’s Submitted Value shall be the Fair
Market Value. If both Parties timely provide Submitted Values, then each Party shall, within fifteen (15) days after both Parties have
exchanged Submitted Values, in writing notify the other Party of such Party’s selected valuator who shall meet the qualifications
set forth herein (“Advocate Valuator(s)”). Lessor and Lessee may select an Advocate Valuator who is favorable to such Party’s
position and may, prior to or after appointment of an Advocate Valuator, consult with such Party’s Advocate Valuator. If a Party
fails to timely and properly provide notice of such Party’s chosen Advocate Valuator, then the other Party’s Submitted Value
shall be the Fair Market Value.
(c) If both Parties timely and properly designate Advocate Valuators,
then such Advocate Valuators shall, within fifteen (15) days after their selection, choose a third (3rd) neutral valuator who shall meet
the qualifications set forth herein (“Neutral Valuator”). The Neutral Valuator shall be engaged jointly by Lessor and Lessee.
If Advocate Valuators fail to agree upon and timely appoint a Neutral Valuator, then the President of AIR CRE shall appoint such Neutral
Valuator within fifteen (15) days after request by either Party. If the President of AIR CRE does not timely appoint the Neutral Valuator,
then either Party may file an appropriate legal action for a judge with competent jurisdiction over the Parties to appoint the Neutral
Valuator.
(d) The Advocate Valuators and the Neutral Valuator (“Valuator(s)”)
shall be duly licensed real estate brokers or salespersons in good standing in the state in which the Premises is located, shall have
been active over the five (5) year period before their appointment in the leasing of properties similar to the Premises within the general
real estate market of the Premises. The Neutral Valuator shall additionally not be related to or affiliated with either Party or Advocate
Valuator, and shall not have previously represented in a real estate transaction a Party or anyone related to or affiliated with a Party.
All matters to be determined by the Valuators shall be decided by a majority vote of the Valuators, with each Valuator having one (1)
vote. The Valuators may, as the Valuators determine, hold hearings and require briefs, including market data and additional information.
Page 1 of 2
(e) Within thirty (30) days after selection of the Neutral Valuator,
the Valuators shall first determine the Fair Market Value established by taking into account the terms, assumptions and conditions set
forth herein (‘‘Valuators’ Market Value”), then decide which Party’s Submitted Value is closer in monetary
amount to the Valuators’ Market Value (‘‘Selected Market Value”), then provide the Parties a copy of the Valuators’
Market Value and finally notify the Parties of the Selected Market Value. The Selected Market Value shall be the Fair Market Value. The
Valuators shall have no right to decide a Selected Market Value which is a compromise to (or modification of) the Submitted &ed Values.
The decision of the Valuators shall be binding upon the Parties. The Party whose Submitted Value is not the Selected Market Value shall,
within ten (10) days after the Valuators decide the Selected Market Value, pay the fees and costs of all three (3) Valuators.
(f) If the Fair Market Value has not been established before the start
of the applicable Extension Term, then Lessee shall continue to pay to Lessor rent in the amount payable for the month immediately preceding
the start of such Extension Term, and Lessor’s acceptance of such rent shall not waive, adversely affect or prejudice the Parties’
right to complete establishment of the Fair Market Value or Lessor’s right to collect the full amount of the Fair Market Value once
the Fair Market Value is established. Lessee shall, within ten (10) days after establishment of the Fair Market Value, pay to Lessor any
deficiency in rent then due for the Extension Term. Following establishment of Fair Market Value, the Parties shall, within ten (10) days
after request by either Party, sign an amendment to this Lease to confirm the Fair Market Value and the expiration date of this Lease,
but the Parties’ failure to request or to sign such an amendment shall not affect establishment of the Fair Market Value or extension
of the Lease term.
(g) The Valuators, in deciding the Valuators’ Market Value, shall
take into account rent rates, rent abatements, periodic rent increases, real property taxes, insurance premiums and other operating expenses,
tenant improvement and other applicable allowances, building services, length of Lease term and all other relevant factors professional
real estate brokers and/or appraisers customarily consider in determining fair market rent of property in an arm’s length transaction
by ready, willing and able parties for space of comparable location, size, age, condition, quality, parking, visibility, view, signage
and accessibility if the Premises were marketed in a normal and customary manner for a reasonable length of time on the open market to
be leased to a tenant with financial strength and credit worthiness comparable to Lessee and guarantors (if any) of this Lease (as of
Lessee’s exercise of the Extension Option) for a term comparable to the length of the applicable Extension Term and used for the
Agreed Use (or other reasonably comparable uses). The Valuators, in deciding the Valuators’ Market Value, shall not consider as
a comparable transaction any of the following: a sublease, Lease assignment, Lease renewal or extension; Lease with a tenant that has
equity, is related to or affiliated with the landlord; or a Lease of space that was subject to a right of first refusal, right of first
offer, expansion option or other encumbrances. The Valuators, in deciding the Valuators’ Market Value, shall reduce the Fair Market
Value on account of Alterations and improvements made by Lessee to the extent the cost thereof was paid solely by Lessee (in excess of
any applicable improvement allowance, abated rent in lieu of improvement allowance or other consideration provided by Lessor for Lessee’s
improvement of the Premises), shall not reduce the Fair Market Value on account of any real estate brokerage commission savings by Lessor,
and shall not reduce the Fair Market Value on account of deferred maintenance or repair of the Premises for which Lessee was responsible
under the Lease but did not perform.
Page 2 of 2
Schedule 6.2(e)
Scheduled Environmental Conditions
(Smyrna)
LaVergne, TN has a REC for the historic use of the property as a vehicle
service facility. The REC notes that occupants of the property, including the Company, have used petroleum and solvents over a long period
of time that could have caused a release. Note that no actual release or contamination is identified.
The environmental conditions described above are identified as Scheduled
Environmental Conditions solely for purposes of Paragraph 6.2(e) of the Lease, and remediation, if any, shall be required only to the
extent necessary to comply with Applicable Requirements relating to Hazardous Substances.
Page 1 of 1
EX-99.1 — PRESS RELEASE, DATED OCTOBER 30, 2026
EX-99.1
Filename: ea031002801ex99-1.htm · Sequence: 7
Exhibit 99.1
PROFICIENT AUTO LOGISTICS APPOINTS STEVEN HANSEN TO BOARD OF DIRECTORS
Automobile And Transportation Veteran To Support
Continued H&A Integration And Additional Opportunities For Growth
JACKSONVILLE, FLORIDA – October 30, 2026 — Proficient
Auto Logistics, Inc. (NASDAQ: PAL) (the “Company” or “Proficient”) today announced the appointment of Steven
Hansen to its Board of Directors (the “Board”), effective immediately.
Mr. Hansen co-founded Hansen & Adkins, Inc. (“H&A”),
a finished-vehicle logistics and automobile transportation company acquired by Proficient in August 2026.
“Steve brings more than 30 years of experience in the automobile
transportation industry, having built Hansen & Adkins into a respected finished-vehicle logistics company,” said Rick O’Dell,
Proficient’s Chief Executive Officer. “He has deep expertise across operations and fleet maintenance, as well as a strong
understanding of what it takes to serve automotive customers reliably at scale. Steve’s experience will be particularly valuable
as we continue successfully integrating H&A, strengthening our operations, and pursuing additional opportunities for growth. We look
forward to his contributions to the Board as we advance Proficient’s long-term strategy.”
Since co-founding H&A in 1994, Mr. Hansen served in a variety of
leadership roles at the company. His more than three decades with H&A included responsibility for automobile transportation operations,
fleet maintenance, risk management, finance, personnel management, insurance, and U.S. Department of Transportation regulatory compliance.
Mr. Hansen is a founding member and former chairman of the Auto Haulers Association of America and currently serves on its board of directors.
Mr. Hansen earned a Bachelor of Science in Public Administration from the University of Southern California.
About Proficient Auto Logistics
Headquartered in Jacksonville, Florida, Proficient Auto Logistics (NASDAQ: PAL) is the leading specialized freight company focused
on providing auto transportation and logistics services. Through the combination of nine industry-leading operating companies, including
four since IPO debut May 2024, PAL operates the largest auto transportation fleet in North America, offering a broad range of services
primarily focused on transporting finished vehicles from automotive production facilities, marine ports of entry, and regional rail yards
to auto dealerships around North America. For more information, visit www.proficientautologistics.com.
Contacts
Investor Relations:
Brad Wright
Chief Financial Officer and Secretary
Phone: 904-506-4317
email: Investor.relations@proautologistics.com
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
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Title of a 12(b) registered security.
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Name of the Exchange on which a security is registered.
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Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Exchange Act
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
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Trading symbol of an instrument as listed on an exchange.
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Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
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