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Home My WebLink AboutAGMT - Pacific West Asset Mgmt Corp (201 8th St, Suite 150) AIR. -^-- AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE - GROSS 1 Basic Provisions( Basic Provisions ) 11 Parties This Lease( Lease ) dated for reference purposes only September 16 2013 is made by and between City of Seal Beach ( Lessor ) and Charles M Richey an individual ( Lessee ) (collect vely the Parties o nd v dually a Party ) 1 2(a) Premises That certain port on of the Project (as derned below) includ ng all mp ovements the e n o to be p ov ded by Lesso under the terms of th s Lease commonly known by the sl eet address of 201 8th Street Suite 150 located in the City of Seal Beach County of Orange State of California with zip code 90790 as outlined on Exhib t A attached hereto( Premises )and generally descnbed as(descnbe bnefly the nature of the Prem ses) that certain office area a part or a larger facility as defined below In addition to Lessees nghts to use and occupy the Premises as here natter specified Lessee shall have non-exclusive nghts to any utility raceways of the building containing the Prem ses ( Building )and to the Common Areas (as defined in Paragraph 27 below) but shall not have any rights to the roof or exterior walls of the Building or to any other bu Id ngs in the Project The Premises the Building the Common A eas the land upon wh ch they are located along with all other bu Idings and improvements thereon are here n collect vely referred to as the Project (See also Pa ag aph 2) 1 2(b) Parking in common unreserved vehicle park ng spaces (See also Paragraph 26) 1 3 Term Three years and zero months ( Original Term ) commencing October 1 2013 ("Commencement Date )and ending September 30 2016 ( Expirat on Date ) (See also Paragraph 3) 1 4 Early Possession If the Premises are ava fable Lessee may have non-exclus ve possession of the Premises commencing upon execution of Lease ( Early Possession Date ) (See also Paragraphs 32 and 33) 15 Base Rent $ 525 00 per month( Base Rent ) payable on the firs t day of each month commencing October 1 2013 (See also Paragraph 4) El If this box is checked there are proves ons in this Lease for the Base Rent to be adjusted See Paragraph_ 16 Lessees Share of Common Area Operating Expenses percent( /)( Lessees Share ) In the event that the size of the Premises and/or the Project are mod fed dur ng the term of th s Lease Lessor shall recalculate Lessees Share to reflect such modification 1 7 Base Rent and Other Monies Paid Upon Execut on (a) Base Rent $ 525 00 forthepenodOctober 1 2013 - October 31 2013 (b) Common Area Operat ng Expenses $ for the pe iod (c) Security Deposit $ 750 00 ( Security Deposit ) (See also Paragraph 5) (d) Other$TBD for tenant signage (e) Total Due Upon Execution of this Lease $ 1 275 00 18 Agreed Use General investment business office and all other legal uses related (See also Paragraph 6) 19 Insur ng Party Lessor s the Insuring Party (See also Paragraph 8) PAGE 1 OF 23 v� INI INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E 1 10 Real Estate Brokers (See also Paragraph 15 and 25) (a)Representation The following real estate brokers(the Brokers )and brokerage relationsh ps ex st in th s 1 ansact on(check applicable boxes) ❑ PacificWest Asset Management Corporation represents Lesso exclusvely( Lessor's B oke ) ❑ represents Lessee exclusively( Lessee s Broker ) o ❑ represents both Lessor and Lessee ( Dual Agency ) (b) Payment to Brokers Upon execution and delivery of this Lease by both Part es Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to n the attached separate written agreement or if no such ag eemnnt s attached the AM of or / of the total Base Rent payable for the Onginal Term the sum of or of the total Base Rent payable dunng any period of time that the Lessee occupies the Premises subsequent to the Onginal Term and/or the sum of or / of the purchase once n the event that the Lessee or anyone affil aced w th Lessee acqu res from Lessor any nghts to the Premises 1 11 Guarantor The obligations of the Lessee under this Lease are to be guaranteed by ( Guarantor ) (See also Pa ag aph 37) 1 12 Attachments Attached hereto are the follow ng all of which const lute a part of th s Lease ❑an Addendum consisting of Paragraphs 50 through 51 8 a site plan depicting the Premises ❑a site plan depicting the Project ❑a current set of the Rules and Regulations for the Project ❑a current set of the Rules and Regulations adopted by the owners association ❑ a Work Letter ❑ other (specify) 2 Premises 2 1 Letting Lessor hereby leases to Lessee and Lessee hereby leases from Lessor the Premises for the term at the ental and upon all of the terms covenants and conditions set forth in this Lease While the approx mate square footage of the Premises may have been used n the marketing of the Premises for purposes of companson the Base Rent stated here n s NOT tied to square footage and s not subject to adjustment should the actual size be determined to be d fferent NOTE Lessee is advised to verify the actual size prior to executing this Lease 2 2 Condition Lessor shall deliver that portion of the Premises contained within the Building( Unit )to Lessee broom clean and free of debns on the Commencement Date or the Early Possession Dale whichever first occurs ( Start Date ) and so long as the required service contracts descnbed in Paragraph 7 1(b)below are obtained by Lessee and in effect within th rty days following the Start Date warrants that the existing electrical plumbing fire sprinkler lighting heating ventilating and a r conditioning systems ( HVAC ) load ng doors sump pumps if any and all other such elements in the Unit other than those constructed by Lessee shall be in good opera)ng cond bon on sa d date that the structural elements of the roof beanng walls and foundation of the Unit shall be free of mater al defects and that the Un t does not conta n hazardous levels of any mold or fung defined as toxic under applicable state or federal law If a non compl ance w th such warranty ex sts as of the Start Date or f one of such systems or elements should malfunction or fail within the appropnate warranty penod Lessor shall as Lessors sole obl gat on with respect to such matter except as otherwise provided in this Lease promptly after receipt of wntten notice from Lessee setting forth with specificity the nature and extent of such non-compl ance malfunction or failure rectify same at Lessors expense The warranty periods shall be as follows () 6 months as to the HVAC systems and (ii)30 days as to the remaining systems and other elements of the Un t If Lessee does not give Lessor the required not ce with n the appropnate warranty penod correction of any such non-compl ance malfunction or failure shall be the obligation of Lessee at Lessees sole cost and expense(except for the repairs to the fire spnnkler systems roof foundations and/or bearing walls see Paragraph 7) 2 3 Compliance Lessor warrants that to the best of its knowledge the improvements on the Premises and the Common Areas comply with the building codes that were in effect at the time that each such improvement or portion thereof was constructed and also with all appl cable laws covenants or restrictions of record regulations and o d nances n effect on the Start Date( Appl cable Requ rements ) Sad warranty does not apply to the use to which Lessee will put the Prem ses mod fications which may be requ red by the Amencans with D sabilit es Act or any s mils laws as a result of Lessees use(see Paragraph 49) or to any Alterations or Ut I ty Installat ons(as defined in Parag aph 7 3(a))made or to be made by Lessee NOTE Lessee is responsible for determining whether o not the Applicable Requirements and espec ally the zon ng a e app opiate for Lessees intended use and acknowledges that past uses of the Premises may no longer be allowed It the Prem ses do not comply with sa warranty Lessor shall except as otherwise prov ded promptly after rece pt of wntten not ce from Lessee sett ng forth w th spec I ty the natu e and extent of such non comp)ance rectify the same at Lessors expense If Lessee does not give Lesso w tten not ce of a non comp)ance w th th s warranty within 6 months following the Start Date correction of that non compliance shall be the obligat on of Lessee at Lessees sole cost and PAGE 2 OF 23 a11Q INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E expense If the Applicable Requirements are hereafter changed so as to requ re dunng the term of th s Lease the const uct on of an addit on to o a alteration of the Unit Prem ses and/or Building the remediation of any Hazardous Substance or the re nforcement or other phys cal modif cation of the Unit Premises and/or Bu Iding( 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 requ red 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 Expend lure s required during the last 2 years of this Lease and the cost the eof exceeds 6 months Base Rent Lessee may nstead le m nate this Lease unless Lessor notifies Lessee in writing with n 10 days after receipt of Lessees termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months Base Rent If Lessee elects term nation Lessee shall mmed ately cease the use of the Premises which equires such Capital Expenditure and deliver to Lessor written notice spec fy ng a terminat on date at least 90 days thereafter Such termination date shall however in no event be earlier than the last day that Lessee could legally ut l ze the Premises w shout commencing such Capital Expenditure (b) If such Capital Expenditure is not the result of the speafc and unique use of the Prem ses by Lessee (such as governmentally mandated seismic modifications) then Lessor shall pay for such Cap tal 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 attnbutable 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 teas ble to pay its share thereof Lessor shall have the option to terminate this Lease upon 90 days pnor wntten notice to Lessee unless Lessee notifies Lessor n writing within 10 days after receipt of Lessors termination notice that Lessee will pay for such Cap tal Expenditure If Lessor does not elect to term nate and fails to tender its share of any such Cap tal Expenditu e Lessee may advance such funds and deduct same w th Inte est from Rent until Lessors share of such costs have been fully paid If Lessee is unable to finance Lessor's sha e o f the balance of the Rent due and payable fo the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis Lessee shall have the r ght to term nate this Lease upon 30 days wntten notice to Lessor (c) Notwithstanding the above the provisions concern ng Capital Expend tures are ntended to apply only to non voluntary unexpected and new Appl cable Requirements If the Capital Expenditures are instead V ggered 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) immed ately cease such changed use or intens ty of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure or ( ) complete such Cap tal Expenditu e at its own expense Lessee shall not have any right to term nate th s Lease 2 4 Acknowledgements Lessee acknowledges that (a)it has been given an opportunity to nspect and measure the Premises (b)it has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and cond t on of the Premises (including but not I m ted to the electncal HVAC and fire spr nkler systems secur ty environmental aspects and compl ante with Appl cable Requ ements and the Ame scans w th Disabilities Act) and their suitability for Lessees intended use (c) Lessee has made such invest gat on as it deems necessary w th refe ence to such matters and assumes all responsib lity therefor as the same relate to is occupancy of the Prem ses (d) t is not relying on any ep esentat on as to the size of the Prem ses made by Brokers or Lessor (e) the square footage of the Premises was not material to Lessees decis on to lease the P em ses and pay the Rent stated here n and (f)neither Lessor Lessors agents no Brokers have made any o al o w [ten ep esentat ons or warrant es w th respect to said matters other than as set forth in this Lease In add ton Lessor acknowledges that (i) Brokers have made no ep esentat ons promises or warranties concerning Lessees ability to honor the Lease or su[ability to occupy the Prem ses and( ) I s Lessors sole espons b I ty 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 pnor to the Start Date Lessee was the owner or occupant of the Prem ses In such event Lessee shall be respons ble for any necessary correct ve work 2 6 Vehicle Park ng Lessee shall be entitled to use the numbe of Parking Spaces spec fed n Pa agraph 1 2(b)on those portions of the Common Areas designated from time to time by Lessor for parking Lessee shall not use more pa king spaces than sa d numbe Sad park ng spaces shall be used for parking by vehicles no larger than full size passenger automobiles or pick up trucks he ern called Perm tted S ze Veh ties Lessor may regulate the loading and unload ng of vehicles by adopt ng Rules and Regulations as p ov ded n Pa ag aph 2 9 No eh des othe than Permitted S ze Veh des may be parked n the Common Area w thoul the p or wntten pe miss on of Lesso In add ton (a) Lessee shall not perm t or allow any vehicles that belong to or are controlled by Lessee o Lessees employees suppl e s sh ppe s customers contractors or Inv tees to be loaded unloaded or parked in areas other than those des gnated by Lesso fo such act v I es (b) Lessee shall not sere ce or store any vehicles n the Common Areas (c) If Lessee permits or allows any of the prohib ted act vibes described in this Paragraph 2 6 then Lessor shall have the r ght w thout notice in addition to such other nghts and remed es that it may have to remove or tow away the vehicle involved and charge the cost to Lessee wh ch cost shall be immediately payable upon demand by Lessor 2 7 Common Areas Definition The term Common Areas is defned as all areas and facilities outside the P em ses and with n the extenor boundary I ne of the Project and intenor ut I ty raceways and installations with n the Un t that are prov ded and des gnated by the Lesso from time to time for the general non-exclusive use of Lessor Lessee and other tenants of the Project and the espect ye employees supple s sh ppe s customers contractors and invitees including parking areas loading and unloading a eas trash areas oadways walkways dr veways and PAGE3OF23 ✓'��_ IN%LS INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E landscaped areas 2 8 Common Areas Lessees Rights Lessor grants to Lessee for the benefit of Lessee and its employees suppl ers shippe s contractors customers and invitees dunng the term of the Lease the non-exclusive r ght to use n common w th others entitled to such use the Common Areas as they exist from time to time subject to any nghts powers and prvleges reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Project Under no c rcumstances shall the nght herein granted to use the Common Areas be deemed to include the nght to store any property temporanly or permanently in the Common Areas Any such storage shall be permitted only by the pnor wntten consent of Lessor or Lessor's des gnated agent which consent may be revoked at any time In the event that any unautho zed storage shall occur then Lessor shall have the r ght w thout notice in addition to such other nghts and remedies that t may have to remove the property and charge the cost to Lessee which cost shall be immediately payable upon demand by Lessor 2 9 Common Areas Rules and Regulat ons Lessor or such other pe son(s)as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the nght from t me to t me to establish modify amend and enforce reasonable rules and regulations( Rules and Regulations )for the management safety care and clean)ness of the grounds the park ng and unload ng of vehicles and the preservation of good order as well as for the convenience of other occupants or tenants of the Building and the Project and the r invitees Lessee agrees to abide by and conform to all such Rules and Regulations and shall use its best efforts to cause ts employees suppl ers sh ppers customers contractors and invitees to so ab de and conform Lessor shall not be respons ble to Lessee for the non comp)ance w th said Rules and Regulat ons by other tenants of the Project 2 10 Common Areas Changes Lessor shall have the nght in Lessor's sole discretion from t me tot me (a) To make changes to the Common Areas including without limitation changes n the local on size shape and numbe of dnveways entrances park ng spaces parking areas loading and unload rig areas ngress egress d rection of 1 affc landscaped a eas walkways and utility raceways (b) To close temporanly any of the Common Areas for maintenance purposes so long as reasonable access to the P emises rema ns ava table (c) To designate other land outside the boundanes of the Project to be a part of the Common Areas (d) To add additional buildings and improvements to the Common Areas (e) To use the Common Areas while engaged n mak ng additional improvements repairs or alterat ons to the Protect or any portion thereof and (f) To do and perform such other acts and make such other changes n to or w th respect to the Common A eas and Project as Lessor may in the exerc se of sound business judgment deem to be appropnate 3 Term 3 1 Tenn The Commencement Date Expiration Date and Onginal Term of th s Lease are as specified in Paragraph 1 3 3 2 Early Possession Any provision herein granting Lessee Early Possess on of the Prem ses s subject to and cond toned upon the Premises being available for such possession prior to the Commencement Date Any grant of Early Possession only conveys a non exclus ve right to occupy the Premises If Lessee totally or partially occupies the Prem ses pnor to the Commencement Date the obl patron to pay Base Rent shall be abated for the penod of such Early Possession All other terms of th s Lease (includ ng but not I m ted to the obl gat ons to pay Lessees Share of Common Area Operating Expenses Real Property Taxes and nsurance premiums and to ma nta n the Prem ses)shall be n effect dunng such pe od Any such Early Possession shall not affect the Expiration Date 3 3 Delay In Possession Lessor agrees to use ts best comme dally reasonable efforts to del ve possess on of the Prem ses to Lessee by the Commencement Date If despite sad efforts Lessor is unable to deliver possess on by such date Lesso shall not be subject to any liability therefor nor shall such failure affect the validity of this Lease or change the Exp rat on Date Lessee shall not howeve be obl gated to pay Re I or perform its other obligations until Lessor delivers possession of the Prem ses and any per od of rent abatement that Lessee would otherw se ha e enjoyed shall run from the date of delivery of possession and continue for a penod equal to what Lessee would otherwise have enjoyed unde the to ms hereof but minus any days of delay caused by the acts or omissions of Lessee If possession is not del vered 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 n w ling w th n 10 days after the end of such 60 day period cancel this Lease in which event the Part es shall be discharged from all obligatrons he eunder If such written notice is not received by Lessor within said 10 day penod Lessees nght to cancel shall term nate If possess on of the Prem ses s not delivered with n 120 days after the Commencement Date this Lease shall terminate unless other agreements are reached between Lessor and Lessee n writing 3 4 Lessee Compliance Lessor shall not be requ red to tender possess on of the P emises to Lessee unt I Lessee compl es with its obligat on to provide evidence of nsurance (Paragraph 8 5) Pend ng delivery of such ev dence Lessee shall be requ ed to perfo m all of ts obligat ons under this Lease from and after the Stan Date includ rig the payment of Rent notwithstand ng Lessor's elect on to withhold possess on pending receipt of such evidence of insurance Further if Lessee is requ red to perform any other cond bons pnor to or concurrent w th the Start Date the Start Date shall occur but Lessor may elect to withhold possession unt I such cond t ons are satisfied 4 Rent 4 1 Rent Defined All monetary obligations of Lessee to Lessor under the to ms of th s Lease (except for the Secunty Depos t) a e deemed to be rent( Rent ) • AIN PAGE 4 OF 23 tir'/'C a!' INW S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02113E 4 2 Common Area Operating Expenses Lessee shall pay to Lessor during the term hereof in addition to the Base Rent Lessee s Share (as specified in Paragraph 1 6)of all Common Area Operating Expenses as hereinafter defined dur ng each calendar year of the term of th s Lease n accordance with the following provisions (a) The following costs relating to the ownership and operation of the P oject are defined as Common Area Operat ng Expenses (I) Costs relating to the operation repair and ma ntenance in neat clean good order and condit on but not the eplacement (see subparagraph(e)) of the following (aa) The Common Areas and Common Area mprovements includ ng park ng areas load ng and unload ng a eas trash areas roadways parkways walkways driveways landscaped areas bumpers i r gation systems Common Area light ng tacit es fences and gates elevators roofs exterior walls of the build ngs building systems and roof drainage systems (bb) Extenor signs and any tenant directones (cc) Any fire spnnkter systems (dd) All other areas and improvements that a e w th n the extenor boundanes of the P oject but outs de of the Premises and/or any other space occup ed by a tenant (ii) The cost of water gas electricity and telephone to service the Common Areas and any ut I t es not sepa ately metered (in) The cost of trash disposal pest control sery ces property management secunty sery ces owners associat on dues and fees the cost to repa nt the extenor of any structures and the cost of any environmental inspect ons (iv) Reserves set aside for maintenance and repa r of Common Areas and Common Area equipment (v) Any ncrease above the Base Real Property Taxes(as defned in Paragraph 10) (vi) Any Insurance Cost Increase (as defined in Paragraph 8) (vii) Any deductible portion of an nsured loss conce n ng the Bu(ding o the Common A eas (vni) Auditors accountants and attorneys fees and costs related to the operation ma ntenance epa and replacement of the Project (ix) The cost of any capital improvement to the Build ng o the Project not covered under the p ov s ons of Paragraph 2 3 provided however that Lessor shall allocate the cost of any such cap tal mprovement ove a 12 yea pe od and Lessee shall not be required to pay more than Lessees Share of 1/144th of the cost of such cap tal mprovement in any g yen month (x) The cost of any other sery ces to be provided by Lessor that are stated elsewhere n this Lease to be a Common Area Operating Expense (b) Any Common Area Operating Expenses and Real Property Taxes that are spec fically attr butable to the Un t the Bu Id ng or to any other building in the Project or to the operation repa r and maintenance thereof shall be allocated entirely to such Un t Bu(ding or other bu Id ng However any Common Area Operating Expenses and Real Property Taxes that are not spec rcally attributable to the Bu lding o to any other bu lding or to the operation repair and maintenance thereof shall be equitably allocated by Lessor to all bu Id ngs n the P oject (c) The nclusion of the improvements fac I hes and services set forth n Subpa agraph 4 2(a) shall not be deemed to moose an obligation upon Lessor to either have said improvements or facilities or to provide those sery ces unless the Protect at eady has the same Lessor already provides the services or Lessor has agreed elsewhe e in th s Lease to p ovide the same or some of them (d) Lessees Share of Common Area Operating Expenses s payable monthly on the same day as the Base Rent is due hereunder The amount of such payments shall be based on Lessor's estimate of the annual Common Area Operating Expenses With n 60 days after wr tten request (but not more than once each year) Lessor shall deliver to Lessee a reasonably detailed statement showing Lessees Share of the actual Common Area Operating Expenses for the preceding year If Lessees payments dunng such year exceed Lessees Share Lessor shall cred t the amount of such over payment against Lessees future payments If Lessees payments during such year were less than Lessees Share Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by Lessor to Lessee of the statement (e) Common Area Operating Expenses shall not include the cost of replacing equ pment or capital components such as the roof foundations extenor walls or Common Area capital mprovements such as the parking lot pav ng elevators fences that have a useful I fe for accounting purposes of 5 years or more (f) Common Area Operating Expenses shall not include any expenses paid by any tenant directly to third parties or as to wh ch Lesso is otherwise reimbursed by any th rd party other tenant or insurance proceeds 4 3 Payment Lessee shall cause payment of Rent to be rece ved by Lessor n lawful money of the United States without offset or deduction(except as spec fically permitted in th s Lease) on or before the day on which it s due All monetary amounts shall be rounded to the nearest whole dollar In the event that any statement o invo ce prepared by Lesso is naccurate such naccuracy shall not constitute a wa ver and Lessee shall be obligated to pay the amount set forth n th s Lease Rent for any period dunng the to m hereof wh ch 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 he em or to such other persons or place as Lessor may from time to time des gnate in wnting Acceptance of a payment wh ch s less than the amount then due sha I not be a waiver of Lessors nghts to the balance of such Rent regardless of Lessor's endorsement of any check so stat ng In the event that any check draft or other instrument of payment given by Lessee to Lessor s dishonored for any reason Lessee agrees to pay to Lessor the sum of$25 n add bon to any Late Charge and Lessor at is option may requ e all future Rent be paid by cashiers check Payments will be applied first to accrued late chaa ges and /s PAGE 5 OF 23 """ •" INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E attorneys fees second to accrued interest then to Base Rent and Common Area Operating Expenses and any rema n ng amount to any olhe outstanding charges or costs 5 Security Deposit Lessee shall deposit with Lessor upon execution he eof the Secunty Depos t as secunty for Lessees fa thful perfo mance of its obligations under this Lease If Lessee fails to pay Rent or otherw se Defaults under this Lease Lessor may use apply o reta n all or any portio of said Secunty Deposit for the payment of any amount already due Lessor for Rents which will be due in the fulu e and/ o to re mbu se o compensate Lessor for any liability expense loss or damage which Lessor may suffer or incur by reason thereof If Lessor uses o appl es all o any portion of the Secunty Deposit Lessee shall with n 10 days after wntten request therefor depos t monies w th Lesso suff ctent to rest()e sad Secur ty Deposit to the full amount required by th s Lease If the Base Rent increases dunng the term of this Lease Lessee shall upon wr tten request from Lessor deposit additional monies with Lessor so that the total amount of the Security Depos t shall at all times bear the same proportion to the increased Base Rent as the initial Secunty Deposit bore to the nitial Base Rent Should the Agreed Use be amended to accommodate a mate ial change n the business of Lessee or to accommodate a sublessee or assignee Lessor shall have the rght to ncrease the Secu ity Depos t to the extent necessary n Lessor's reasonable judgment to account for any ncreased wear and tear that the Premises may suffer as a result the eof If a change in control of Lessee occurs dunng this Lease and following such change the financial cond Lion of Lessee s in Lesso s easonable judgment s gnificantly reduced Lessee shall deposit such additional mon es w th Lessor as shall be suffc ent to cause the Secu ty Depos t to be at a commercially reasonable level based on such change in financial cond tion Lesso shall not be required to keep the Secu ty Depos t sepa ate f om is general accounts Within 90 days after the expiration or terminat on of th s Lease Lesso shall etum that port on of the Secu ty Depos t not used o applied by Lessor No part of the Secunty Depos t shall be considered to be held n trust to bear interest or to be prepayment fo any mon es to be pa d by Lessee under this Lease 6 Use 6 1 Use Lessee shall use and occupy the Premises only for the Agreed Use or any other legal use which is reasonably comparable thereto and for no other purpose Lessee shall not use or permit the use of the Premises in a manner that is unlawful creates damage waste or a nuisance or that disturbs occupants of or causes damage to neighbor ng premises or p opert es Other than gu de 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 vmtten request for a modification of the Agreed Use so long as the same w II not impair the structural ntegr ty of the Bu Id ng or the mechan cal o electncal systems therein and/or is not significantly more burdensome to the Project If Lessor elects to w thhold consent Lessor shall with n 7 days after such request g ve written notification of same wh ch notice shall include an explanation of Lessor's objections to the change in the Ag eed 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 d sposal transportat on or release either by tself or in combinat on with othe matenals expected to be on the Premises is either (i)potentially',vinous to the public health safety or welfare the environment or the Premises ( )regulated or monitored by any governmental authonty or(iii)a basis for potent al I ability of Lessor to any governmental agency or th d party under any applicable statute or common law theory Hazardous Substances shall include but not be limited to hydrocarbons petroleum gasol ne and/or crude oil or any products by products or fractions thereof Lessee shall not engage in any act vity in or on the Prem ses wh ch constitutes a Reportable Use of Hazardous Substances w thout the express prior written consent of Lessor and timely compl ance (at Lessees expense) with all Appl cable Requirements Reportable Use shall mean (i) the installation or use of any above or below ground storage tank ( ) the generation possess on storage use transportation or disposal of a Hazardous Substance that requ res a perm t rom or with espect to wh ch a report not ce registration or business plan is requ red to be filed with any governmental authority and/or(iii)the presence at the Prem ses of a Hazardous Substance with respect to which any Applicable Requ rements requ res that a notice be g yen to persons enter ng or occupying the P em ses o ne ghbo ng properties Notwithstanding the foregoing Lessee may use any ordinary and customary matenals reasonably equi ed to be used n the normal course of the Agreed Use ordinary office supplies (copier toner I quid paper glue etc) and common household cleaning materials so long as such use s n compl ance with all Applicable Requirements is not a Reportable Use and does not expose the Prem ses o neighbonng property to any mean ngful nsk of contamination or damage or expose Lessor to any liab lity therefor In add bon Lessor may condit on is consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself the publ c the Premises and/or the environment aga nst damage contamination injury and/or liability including but not lim ted to the installation (and removal on or before Lease expiration or termination)of protective modifications(such as concrete encasements)and/or increasing the Secur ty Depos t (b) Duty to Inform Lessor If Lessee knows or has reasonable cause to bel eve that a Hazardous Substance has come to be located in on under or about the Prem ses other than as previously consented to by Lessor Lessee shall mmediately give w then notice of such fact to Lessor and provide Lessor with a copy of any report notice cla m or other documental on wh ch t has concern ng the presence of such Hazardous Substance (c) Lessee Remediation Lessee shall not cause or permit any Hazardous Substance to be sp lied o released n o under or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly at Lessees expense comply wth all Appl cable Requirements and take all nvestigatory and/or remedial action easonably recommended whethe or not formally o de ed o equ ed fo the cleanup of any contam nat on of and for the maintenance secur ty and/or monitonng of the Prem ses or ne ghbonng properties that was caused o matenally contributed to by Lessee or pertaining to or involv ng any Hazardous Substance brought onto the P em ses du ng the to m of th s Lease by or for Lessee or any third party /�,�,�,Q a,. PAGE6OF23 rMr. INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E (d) Lessee Indemnification Lessee shall indemnify defend and hold Lessor ts agents employees lenders and g ound lessor if any harmless from and against any and all loss of rents and/or damages liabilities judgments clams expenses penalt es and atto neys and consultants fees ansing out of or involving any Hazardous Substance brought onto the Prem ses by or for Lessee or any th rd party (provided however that Lessee shall have no liabil ty under this Lease with respect to unde g ound m grat on of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee) Lessees obl gallons shall include but not be lim led to the effects of any contamination or injury to person property or the environment created or suffered by Lessee and the cost of nvest gat on emoval remed at on restoration and/or abatement and shall sury ve the expiration o to minat on of this Lease No term nat on cancellat on or release agreement ente ed nto by Lessor and Lessee shall release Lessee from ts obligations unde th s Lease with respect to Haza dous Substances unless specifically so agreed by Lessor in wnt ng at the time of such agreement (e) Lessor Indemnification Except as otherwise provided in paragraph 8 7 Lessor and its successo s and ass gns shall ndemnify defend reimburse and hold Lessee its employees and lenders harmless from and against any and all environmental damages nclud ng the cost of remediabon which suffered as a direct result of Hazardous Substances on the Premises pr or to Lessee tak ng possession or which a e caused by the gross negligence or willful misconduct of Lessor its agents or employees Lessor's obl gallons as and when required by the Appl cable Requirements shall include but not be limited to the cost of investigation removal remedlation restoration and/or abatement and shall survive the expiration or termination of th s Lease (f) Investigations and Remed at ons Lessor shall reta n the responsibility and pay for any invest gat ons or remediabon measures required by governmental entities haw ng junsdiction with respect to the existence of Hazardous Substances on the Premises pnor to Lessee taking possession unless such remediabon measure is required as a result of Lessees use (nclud ng Alterations as defined n 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 act v t es at the request of Lessor including allowing Lessor and Lessor's agents to have reasonable access to the Prem ses at reasonable times in order to carry out Lessors investigative and remedial respons bitibes (g) Lessor Termination Option If a Hazardous Substance Condition(see Paragraph 9 1(e))occurs during the term of th s Lease unless Lessee is legally responsible therefor (in wh ch case Lessee shall make the investigation and remed ation thereof requ red by the Applicable Requirements and th s Lease shall cont nue in full force and effect but subject to Lessors nghts under Paragraph 6 2(d)and Paragraph 13) Lessor may at Lessor's option either(i)investigate and remediate such Hazardous Substance Cond bon if required as soon as reasonably possible at Lessors expense in which event this Lease shall cont nue n full force and effect or(n)if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or$100 000 whichever is greater g ve written notice to Lessee with n 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition of Lessors desire to terminate th s Lease as of the date 60 days follow ng the date of such notice In the event Lessor elects to give a terminal on notice Lessee may within 10 days thereafter give written notice to Lessor of Lessees commitment to pay the amount by wh ch the cost of the remed abon of such Hazardous Substance Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100 000 whichever s greater Lessee shall prov de Lessor with sad funds or sat sfactory assurance thereof with n 30 days following such commitment In such event this Lease shall continue in full fo ce and effect and Lessor shall p oceed to make such remediat on as soon as reasonably possible after the required funds are available If Lessee does not give such notice and provide the requ red funds or assurance thereof within the time provided th s Lease shall term nate as of the date speared in Lessors notice of term nation 6 3 Lessee s Compliance with Applicable Requirements Except as otherw se prow ded in this Lease Lessee shall at Lessees sole expense fully diligently and in a timely manner matenally comply with all Appl cable Requirements the requirements of any appl cable fre insurance underwriter or rat ng bureau and the recommendations of Lessors engineers and/or consultants which relate n any manner to such Requirements without regard to whether said Requirements are now in effect or become effect ve after the Start Date Lessee shall with n 10 days after receipt of Lessor's written request provide Lessor with copies of all permits and other documents and othe nformation ev denang Lessees compliance with any Appl cable Requirements spec fled by Lessor and shall immed ately upon rece pt not fy Lessor in writ ng (with copes of any documents involved)of any threatened or actual claim notice citation warning compla nt or report pertain ng to or nvolving the fa lure of Lessee or the Premises to comply with any Applicable Requirements Likewise Lessee shall immediately g ve written not ce to Lessor of (i)any wate damage to the Prem ses and any suspected seepage pooling dampness or other cond bon conduc ve to the p oduct on of mold o ( )any must ness or other odo s that might nd cate the presence of mold in the Premises 64 Inspection Compliance Lessor and Lessors Lender (as defined in Parag aph 30) and consultants shall have the ght to enter into Premises at any time in the case of an emergency and otherwise at reasonable times afte easonable not ce for the pu pose of nspect ng the condition of the Premises and for venfy ng compliance by Lessee w th this Lease The cost of any such nspect ons shall be paid by Lesso unless a violation of Applicable Requirements or a Hazardous Substance Condition (see Pa agraph 9 1)is found to e ist o be mm nent o the nspect on requested or ordered by a govemmental authority In such case Lessee shall upon equest e mbu se Lesso fo the cost of such nspect on so long as such Inspection is reasonably related to the v olation or contaminat on In addit on Lessee shall prov de copes of all relevant mater al safety data sheets(MSDS)to Lessor with n 10 days of the receipt of wmtlen request the efo 7 Maintenance Repairs Utility Installations Trade Fixtures and Alterat ons 7 1 Lessee s Obligations (a)In General Subject to the provisions of Paragraph 2 2(Condit on) 2 3(Compl ance) 6 3(Lessees Compl ance w th Applicable Requirements) 7 2 (Lessor's Obl gations) 9 (Damage or Destruction) and 14 (Condemnation) Lessee shall at Lessees sole e pense keep the PAGE 7OF23 etrre LW INI C S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02113E Premises Utility Installations (intended for Lessees exclusive use no matter where located) and Alterat ons n good o de cond ton and epa r (whether or not the portion of the Premises requir ng repairs or the means of repairing the same are reasonably or read ly access ble to Lessee and whether or not the need for such repairs occurs as a result of Lessees use any pnor use the elements or the age of such portion of the P em ses) including but not limited to all equipment or facil hes such as plumbing HVAC equ pment electrical I ght ng facilit es boilers p essu e vessels fixtures intenor walls interior surfaces of extenor walls ce lings floors w ndows doors plate glass and skylights but excluding any tems which a e the responsibil ty of Lessor pursuant to Paragraph 7 2 Lessee n keeping the Premises in good order condi(on and repair shall exerc se and perfo m good maintenance practices specifically including the procurement and maintenance of the service contracts required by Paragraph 7 1(b) below Lessees obligations shall nclude restorations replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order cond ton and state of repair (b) Service Contracts Lessee shall at Lessees 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)bo ler and pressure vessels and (tit)clarifiers However Lessor reserves the nght upon notice to Lessee to procure and maintain any or all of such sery ce contracts and Lessee shall re mbu se Lessor upon demand for the cost thereof (c) Failure to Perform If Lessee fails to perform Lessees obl gat ons under th s Parag aph 7 1 Lesso may enter upon the Premises after 10 days prior written notice to Lessee (except in the case of an emergency n wh ch case no notice shall be requ red) perto m such obligations on Lessees behalf and put the Prem ses 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 Lessees indemnification of Lessor as set forth in Paragraph 8 7 below and without rel ev ng Lessee of hab I ty resulting from Lessees failure to exercise and perform good maintenance practices f an tem descnbed in Pa ag aph 7 1(b) cannot be epaired other than at a cost which Is n excess of 50/ of the cost of replac ng 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 te m of this Lease on the date on which Base Rent s due an amount equal to the product of multiply ng the cost of such replacement by a fraction the numerator of which s one and the denominator of which is 144(le 1/144th of the cost per month) Lessee shall pay Interest on the unamort zed balance but may p epay Is obligation at any time 7 2 Lessors Obligations Subject to the provisions of Paragraphs 2 2 (Condit on) 2 3 (Compliance) 4 2 (Common Area Ope at ng Expenses) 6 (Use) 7 1 (Lessees Obligations) 9 (Damage or Dest uct on) and 14 (Condemnal on) Lessor subject to re mbu semen( pursuant to Paragraph 4 2 shall keep in good order condition and repair the foundations extenor walls structu al cond ton of ntenor bea ng walls e te o oof fi e spnnkler system Common Area fire alarm and/or smoke detection systems f e hyd ants parking lots walkways pa kways dr veways landscaping fences s gns and utility systems serving the Common Areas and all parts thereof as well as prov d ng the services fo wh ch there s a Common Area Operating Expense pursuant to Paragraph 4 2 Lessor shall not be obligated to paint the extenor or inter or surfaces of e ter or walls nor shall Lessor be obligated to maintain repair or replace windows doors or plate glass of the Premises Lessee expressly waves the benefit of any statute now or hereafter in effect to the extent it is ncons stent with the terms of this Lease 7 3 Utility Installations Trade Fixtures Alterations (a) Definitions The term Ut I ty Installations refers to all floor and window covenngs air and/or vacuum I nes power panels electncal distribution security and fire protect on systems commun cation cabl ng I ghting fxtures HVAC equ pment plumbing and fenc ng n or on the Premises The term Trade Fixtures shall mean Lessees mach nery and equ pment that can be removed w thout do ng mate Ial damage to the Premises The term Alterations shall mean any modification of the imp ovements other than Ut I ty Installat ons or Trade F to es whether by add bon or deletion Lessee Owned Alterations and/or Ut I ty Installations are defined as Alte at ons and/o Ut I ty Installat ons 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 Ut I ty Installations to the Prem ses without Lessors p o wr tten consent Lessee may however make non structural Alterat ons or Utility Installat ons to the inter or of the Premises(exclud ng the roof)w thout such consent but upon notice to Lessor as long as they are not visible from the outside do not nvolve punctur ng relocating or remov ng the roof o any ex st ng walls will not affect the electrical plumbing HVAC and/or life safety systems and the cumulative cost thereof dunng this Lease as extended does not exceed a sum equal to 3 months Base Rent in the aggregate or a sum equal to one months Base Rent in any one year Notw thstand ng the foregoing Lessee shall not make or permit any roof penetrations and/or nstall anyth ng on the roof without the p or 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 Ut I ty I lstallations that Lessee shall desire to make and which requ e the consent of the Lessor shall be p esented to Lesso n wr tten form with deta led plans Consent shall be deemed conditioned upon Lessees ()acqu r ng all applicable gove nmental perm is ( )fu n shing Lessor w th cop es of both the permits and the plans and specifications prior to commencement of the work and ( ) comp)ance w th all cond t ons of said pe mils and other Applicable Requirements in a prompt and expedit ous manner Any Alterat ons or Utility Installat ons shall be performed n a workman)ke manner w th good and suffcient matenals Lessee shall promptly upon completion fu n sh Lessor w th as bu It plans and specifications For wo k wh ch costs an amount in excess of one months Base Rent Lessor may condition its consent upon Lessee prov d ng a lien and complet on bond n an amount equal to 150/ of the estimated cost of such Alteration or Utility Installation and/or upon Lessees posting an add bona)Secunty Deposit w th Lesso (c)Liens Bonds Lessee shall pay when due all claims for labor or matenals fum shed or alleged to have been furnished to o PAGE8OF23 •<p I ®• S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E for Lessee at or for use on the Premises which claims are or may be secured by any mechanics or materialmen s lien against the Prem ses or any interest there n Lessee shall g ve Lessor not less than 10 days notice pnor to the commencement of any work in on or about the Premises and Lessor shall have the nght 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 aga nst the same and shall pay and satisfy any such adve se judgment that may be rendered thereon before the enforcement thereof If Lessor shall requ re Lessee shall furnish a surety bond in an amount equal to 150/ of the amount of such contested lien claim or demand indemnifying Lessor aga nst I ab lily for the same If Lessor elects to part c pale n any such act on Lessee shall pay Lessors attorneys fees and costs 7 4 Ownership Removal Surrender and Restorat on (a)Ownership Subject to Lessors nght to requ e removal or elect ownership as hereinafter provided all Alterations and UI I ty Installations made by Lessee shall be the p operty of Lessee but conside ed a part of the Prem ses Lesso may at any time elect n w I ng to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations Unless other se nstructed per paragraph 7 4(b)hereof all Lessee Owned Alterations and Utility Installations shall at the expiration or terminal on of this Lease become the p ope ty of Lesso and be surrendered by Lessee with the Premises (b) Removal By delivery to Lessee of wntten notice from Lessor not earlier than 90 and not later than 30 days pnor to the end of the term of this Lease Lessor may require that any or all Lessee Owned Alterations or Utility Installat ons be removed by the exp rat on or termination of this Lease Lessor may require the removal at any time of all or any part of any Lessee Owned Alterat ons o Ut 1 ty Installat ons made without the required consent (c)Surrender Restoration Lessee shall surrender the Premises by the Expiration Date or any earlier le minat on date with all of the mprovements parts and surfaces thereof broom clean and free of debr s and in good operat ng orde cond Ion and state of epa r ordinary wea and tear excepted Ordinary wear and tear shall not include any damage or detenoration that would have been p evented by good ma ntenance erect ce Notwithstanding the forego ng f this Lease is for 12 months or less then Lessee shall surrender the Prem ses n the same cond Lion as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear Lessee shall repair any damage occasioned by the nstallat on maintenance or removal of Trade Fixtures Lessee owned Alterations and/or Ut lity Installations fu n sh ngs and equ pment 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 wh ch were deposited v a unde g ound m g at on f om a eas outs de of the Prem ses)even f such removal would require Lessee to perform or pay for work that exceeds statutory requ rements Trade F xtures shall ema n the property of Lessee and shall be removed by Lessee Any personal property of Lessee not removed on o before the Expirat on Date o any ea I er term nat on date shall be deemed to have been abandoned by Lessee and may be disposed of o f eta ned by Lessor as Lesso may des re The fa lure by Lessee to timely vacate the Premises pu suant to this Paragraph 7 4(c)without the express written consent of Lesso shall const tute a holdover under the prov s ons of Paragraph 26 below 8 Insurance Indemnity 8 1 Payment of Premium Increases (a) As used herein the term Insurance Cost Increase is del ned as any ncrease n the actual cost of the insu ante appl cable to the Building and/or the Project and required to be carned by Lessor pursuant to Paragraphs 8 2(b) 8 3(a)and 8 3(b) over and above the Base Premium as he wafter defined calculated on an annual basis Insurance Cost Increase shall include but not be I mated to requ ements of the holder of a mortgage or deed of trust covenng the Premises Bu Id ng and/or Project increased valuation of the Premises Bu Id ng and/or Project and/or a general premium rate ncrease The term Insurance Cost Increase shall not however nclude any p em um nc eases esult ng from the nature of the occupancy of any other tenant of the Building The Base Premium shall be the annual premium applicable to the 12 month pe od immediately preced ng the Start Date If however the Project was not nsured for the ent rety of such 12 month penod then the Base P em um shall be the lowest annual premium reasonably obtainable for the Requ red Insurance as of the Start Date assum ng the most nom nal use possible of the Building In no event however shall Lessee be responsible for any portion of the premium cost attnbutable to liability insurance coverage n excess of $2 000 000 procured under Paragraph 8 2(b) (b) Lessee shall pay any Insurance Cost Increase to Lessor pursuant to Paragraph 4 2 Premiums for pol cy periods commencing pnor to or extending beyond the term of this Lease shall be prorated to coinc de with the co responding Start Date or Exp ration Date 8 2 Liability Insurance (a)Carried by Lessee Lessee shall obtain and keep in force a Commercial General Liabil ty policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury pe sonal njury and property damage based upon or ansing out of the owne sh p use occupancy or maintenance of the Premises and all areas appurtenant thereto Such insurance shall be on an occur ence basis p ov d ng s ngle lira t coverage n an amount not less than$1 000 000 per occurrence with an annual agg egate 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 Organizations Additional Insured Managers or Lessors of Premises Endorsement The policy shall not contain any ntra insured exclusions as between insured pe sons or organizations but shall include coverage for liability assumed under th s Lease as an insured contract fo the performance of Lessees ndemnity obl gations under th s Lease The limits of sad 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 prov des that is insurance shall be primary to and not contnbutory with any sim lar insurance tamed by Lessor whose insurance shall be cons dered excess insurance only /� �,Q PAGE9OF23 V " INIZ 5 INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E • (b)Carried by Lessor Lessor shall maintain liab lity nsurance as described in Paragraph 8 2(a) in add ton to and not n I eu of the insurance required to be maintained by Lessee Lessee shall not be named as an add tional insured there n 8 3 Property Insurance Building Improvements and Rental Value (a) Building and Improvements Lessor shall obtain and keep in force a policy or polices of nsurance n the name of Lesso with loss payable to Lessor any ground lessor and to any Lender insuring loss or damage to the Premises The amount of such nsurance shall be equal to the full insurable replacement cost of the Prem ses as the same shall ex st from t me to time o the amount equ ed by any Lende but n no event more than the commerc ally reasonable and available insurable value thereof Lessee Owned Allerat ons and Utility Installat ons T ade F lures and Lessees personal property shall be insured by Lessee not by Lessor If the coverage s available and comme tally app op ate such pot cy o polices shall insure against all nsks of direct phys cal loss or damage (except the perils of flood and/o earthquake unless required by a Lender) nclud ng coverage for debris removal and the enforcement of any Applicable Requirements requ nng the upg caing demo!ton econstnjction o replacement of any portion of the Premises as the result of a cove ed loss Said policy or polices shall also contain an agreed valuat on prow son n lieu of any coinsurance clause waiver of subrogation and inflation guard protection causing an increase n the annual property nsurance coverage amount by a factor of not less than the adjusted U S Department of Labor Consume Pr ce Index for All Urban Consumers fo the c ty nearest to whe e the Premises are located If such insurance coverage has a deductible clause the deductible amount shall not e teed$5 000 per occurrence (b)Rental Value Lessor shall also obtain and keep n force a policy or pot c es n the name of Lessor w th toss payable to Lesso and any Lender insunng the loss of the full Rent for one year wth an extended pe od of ndemnity for an additional 180 days ( Rental Value insurance ) Said insurance shall contain an agreed valuation provision in lieu of any co nsurance clause and the amount of coverage shall be adjusted annually to reflect the projected Rent other se payable by Lessee for the next 12 month pe od (c)Adjacent Premises Lessee shall pay for any ncrease in the prem ums for the property insurance of the Bu Id ng and fo the Common Areas or other buildings n the Project if sad ncrease is caused by Lessees acts omissions use o occupancy of the Premises (d)Lessees Improvements Since Lessor s the Insur ng Party Lessor shall not be requ red to insure Lessee Owned Alterations and Uhl ty Installations unless the tem n question has become the property of Lessor under the terms of this Lease 8 4 Lessee s Property Business Interruption Insurance Workers Compensat on Insurance (a)Property Damage Lessee shall obtain and maintain insurance coverage on all of Lessees personal property Trade Fixtures and Lessee Owned Alterations and Uhl ty Installations Such nsurance shall be full eplacement cost coverage with a deduct ble of not to exceed $1 000 per occurrence The proceeds from any such nsurance shall be used by Lessee for the replacement of pe sonal property Trade F xtu es and Lessee Owned Alterations and Utility Installations (b) Business Interruption Lessee shall obta n and manila n loss of income and ext a expense nsurance n amounts as N II reimburse Lessee ford rect or indirect loss of earnings attnbutable to all penis commonly insured aga nst by prudent lessees n the business of Lessee or attnbutable to prevention of access to the Premises as a result of such penis (c)Workers Compensation Insurance Lessee shall obtain and maintain Worker's Compensation Insurance n 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 nsurance specified herein are adequate to cover Lessees property business operations or obligations under th s Lease 8 5 Insurance Policies Insurance required here n shall be by companies maintaining dur ng the policy term a General Policyholders Rating of at least A VII as set forth in the most current issue of Bests Insurance Gu de or such other rat ng as may be requ ed by a Lender Lessee shall not do or pens t to be done anyth ng wh ch inval dates the requ red nsurance policies Lessee shall pnor to the Start Date deliver to Lesso certified copies of policies of such nsurance or certificates with copies of the requ red endorsements ev denting the existence and amounts of the required insurance No such policy shall be cancelable or subject to modification except after 30 days pr or written not ce to Lessor Lessee shall at least 10 days pnor to the expiration of such policies furnish Lessor with evidence of renewals o nsurance b nders ev denting renewal the eof or Lessor may order such insurance and charge the cost thereof to Lessee which amount shall be payable by Lessee to Lessor upon demand Such poliaes shall be for a term of at least one year or the length of the remaining term of th s Lease whichever is less If ether Party shall fail to procure and maintain the insurance required to be camed by it the other Party may but shall not be required to procure and ma nta n 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 fight to recover damages aga nst the other for loss of or damage to ts property ansing out of or incident to the penis required to be insured aga nst herein The effect of such releases and waivers is not limited by the amount of insurance camed or required or by any deductibles appl cable hereto The Parties agree to have their espect ve p operty damage insurance ca ners wa ve any nght to sub ogation that such compan es may have against Lesso or Lessee as the case may be so Irng as the nsurance s not invalidated thereby 8 7 Indemnity Except for Lessor's gross negl gence or w Ilful misconduct Lessee shall indemn fy protect defend and hold ha mless the Premises Lessor and ts agents Lessors maste or ground lessor partners and Lende s f om and aga nst any and all clams loss of rent and/o damages liens judgments penalt es attomeys and consultants fees expenses and/or liabilities ansing out of nvolv ng or n connect on w th the use and/or occupancy of the Premises by Lessee If any action or proceeding s b ought against Lessor by reason of any of the foregoing matte s Lessee shall upon notice defend the same at Lessees expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee n such defense Lessor need not have first paid any such claim in order to be defended or ndemn fed / _ PAGE 10 OF 23 I i, S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E 88 Exemption of Lessor and its Agents from Liabil ty Notwithstanding the negligence or breach of this Lease by Lessor o Is agents neither Lessor nor its agents shall be liable under any circumstances for () njury or damage to the pe son or goods wa es merchandise o other property of Lessee Lessees 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 electncity gas water or rain indoor air quality the presence of mold or from the b eakage leakage obstruction or other defects of pipes fire spnnklers wires appliances plumbing HVAC or light ng fxtures or from any other cause whether the sa d injury or damage results from cond bons ansing upon the Premises or upon other portions of the Bu Id ng or from other sources o places ( ) any damages ansing from any act or neglect of any other tenant of Lesso or f om the fa lu e of Lesso o is agents to enforce the prov sons of any olhe lease in the Project or(Hi)injury to Lessees bus ness or for any loss of ncome or profit therefrom Instead t s ntended that Lessees sole ecou se n the event of such damages or injury be to file a claim on the nsurance policy(ies) that Lessee is equ ed to maintain pursuant to the p ov sons of paragraph 8 8 9 Failure to Provide Insurance Lessee acknowledges that any failure on Is part to obtain or maintain the insu ance requ red here n will expose Lessor to risks and potentially cause Lessor to ncur costs not contemplated by this Lease the extent of wh ch will be extremely difficult to ascertain Accordingly for any month or portion thereof that Lessee does not mainta n the requ red nsurance 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 ncreased without any requirement for notice to Lessee by an amount equal to 10 h of the then existing Base Rent or$100 whichever is greater The parties agree that such increase in Base Rent represents fair and reasonable compensat on for the additional risk/costs that Lessor w II ncur by reason of Lessees fa lure to maintain the required insurance Such increase in Base Rent shall in no event constitute a waiver of Lessees 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 elieve Lessee of its obl gallon to maintain the insurance specified in this Lease 9 Damage or Destruction 91 Definitions (a) Premises Partial Damage shall mean damage or destruction to the mprovements on the Prem ses other than Lessee Owned Alterations and Utility Installations wh ch can reasonably be repaired n 3 months or less from the date of the damage o destruction and the cost thereof does not exceed a sum equal to 6 months Base Rent Lessor shall notify Lessee in writing within 30 days from the date of the damage o destruction as to whether or not the damage is Partial or Total (b) Premises Total Destruction shall mean damage or destruction to the improvements on the Premises other than Lessee Owned Alterations and Util ty Installations and Trade Fixtures which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction and/or the cost thereof exceeds a sum equal to 6 months Base Rent Lessor shall notify Lessee n wnting with n 30 days from the date of the damage or destruction as to whether or not the damage is Part al or Total (c) Insured Loss shall mean damage or dest uct on to improvements on the Prem ses other than Lessee Owned Alterat ons and Utility Installations and Trade Fxtures which was caused by an event required to be covered by the nsurance desc abed n Paragraph 83(a) irrespective of any deductible amounts or coverage limits involved (d) Replacement Cost shall mean the cost to repair or rebuild the mprovements owned by Lessor at the t me of the occurrence to their cond bon existing immed ately pnor thereto nclud ng demolition debns removal and upgrad ng equ red by the operat on of Appl cable Requirements and without deduction for depreciation (e) Hazardous Substance Cond Iron shall mean the occurrence or d scovery of a condition nvolving the presence of or a contamination by a Hazardous Substance n on or under the Premises which requ res restoration 92 Partial Damage Insured Loss If a Premises Partial Damage that is an Insured Loss occurs then Lessor shall at Lessors expense repair such damage (but not Lessees Trade Fixtures or Lessee Owned Alterations and Utility Installations)as soon as reasonably possible and th s Lease shall continue in full force and effect provided however that Lessee shall at Lessors elect on 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 Notwthstandmg the foregoing if the requ red nsurance was not n force or the nsu ance p oceeds are not sufficient to effect such repair the lnsunng Party shall promptly contribute the shortage n proceeds as and when requ ed to con plete sad epa rs In the event however such shortage was due to the fact that by eason of the unique natu e of the mprovements full replacement cost nsu ance coverage was not commercially reasonable and available Lessor shall have no obl gat on to pay for the shortage in insurance p oceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cove same or adequate assurance the eof within 10 days following receipt of written notice of such shortage and request therefor If Lessor receives said funds o adequate assu ance the eof w th n sad 10 day penod the party responsible for making the repairs shall complete them as soon as reasonably poss ble and this Lease shall remain in full fo ce and effect If such funds or assurance are not rece ved Lessor may nevertheless elect by w tten not ce to Lessee w th n 10 days the eafter to (I) make such restoration and repair as is commercially reasonable with Lessor paying any shortage in proceeds in which case this Lease shall ema n n lull force and effect or(t)have this Lease terminate 30 days thereafter Lessee shall not be ent tied to e mbursement of any funds contr buted 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 insu ance coverage but the net proceeds of any such insurance shall be made ava table for the repa s if made by ether Party 93 Partial Damage Uninsured Loss If a Prem ses Part al Damage that s not an Insured Loss occurs unless caused by a PAGE 11 OF 23 aft INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E negligent or willful act of Lessee (in wh ch event Lessee shall make the repairs at Lessees expense) Lesso may e the (i) epa such damage as soon as reasonably possible at Lessor's expense in which event this Lease shall cont nue in full force and effect or( )terminate this Lease by giving wntten notice to Lessee within 30 days atter receipt by Lessor of knowledge of the occurrence of such damage Such term nation shall be effect ve 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 afte ece pt of the termination notice to give written notice to Lessor of Lessees 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 comm Iment In such event this Lease shall continue in full force and effect and Lessor shall proceed to make such repairs as soon as reasonably poss ble after the requ red funds a e ava fable If Lessee does not make the required commitment this Lease shall terminate as of the date specified in the termination notice 9 4 Total Destruction Notwithstanding any other provision hereof if a Prem ses Total Destruct on occurs this Lease shall term nate 60 days following such Destruction If the damage or destruction was caused by the gross negligence or w Ilful misconduct of Lessee Lessor shall have the nght to recover Lessor's damages from Lessee except as p ov ded in Paragraph 8 6 9 5 Damage Near End of Term If at any hme during the last 6 months of this Lease there is damage for wh ch the cost to repair exceeds one month s Base Rent whether or not an Insured Loss Lessor may terminate th s Lease effective 60 days following the date of occurrence of such damage by g v ng a written term nation notice to Lessee with n 30 days after the date of occurrence of such damage Notwithstand ng the foregoing if Lessee at that time has an exercisable option to extend this Lease or to pu chase the Premises then Lessee may preserve th s Lease by (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assu ance thereof) needed to make the repairs on or before the earlier of(i)the date which is 10 days after Lessees receipt of Lessor's wntten notice purporting to terminate th s Lease or( ) the day prior to the date upon which such option expires If Lessee duly exert ses such opt on dunng such period and p ov des Lesso with funds (o adequate assurance thereof) to cover any shortage in insurance proceeds Lessor shall at Lessors comme tally easonable e pense repair such damage as soon as reasonably possible and this Lease shall continue n full force and effect If Lessee fa Is to exercise such option and p ovide such funds or assurance dunng such penod then this Lease shall terminate on the dale spec fled in the term nation notice and Lessees option shall be extinguished 9 6 Abatement of Rent Lessees Remed es (a)Abatement In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition fo which Lessee is not responsible under this Lease the Rent payable by Lessee for the period required fo the repa r emed at on or restoration of such damage shall be abated in proportion to the degree to which Lessees use of the Premises is impaired but not to exceed the p oceeds rece ved from the Rental Value insurance All other obi gat ons of Lessee hereunder shall be performed by Lessee and Lessor shall have no I ab I ty to any such damage destruction remediation repa r or restorat on except as provided herein (b) Remedies If Lessor is obligated to repair or restore the Prem ses and does not commence n a substant al and mean ngfui way such repair or restoration within 90 days after such obligation shall accrue Lessee may at any t me pro to the commencement of such epa o restoration give wntten notice to Lessor and to any Lenders of wh ch Lessee has actual not ce of Lessees election to terminate th s Lease on a date not less than 60 days following the g ving of such notice If Lessee g yes such not ce and such repair or restorat on s not commenced with n 30 days thereafter this Lease shall terminate as of the date specified in said not ce If the repair or restoration is commenced with n such 30 days th s Lease shall continue n full force and effect Commence shall mean either the uncond bona) authonzation of the preparation of the required plans or the beginn ng of the actual work on the Premises whichever first occurs 9 7 Termination Advance Payments Upor terminat on of this Lease pursuant to Parag aph 6 2(g) or Paragraph 9 an equ table adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor Lesso shall n addit on etu n to Lessee so much of Lessees Secunty Deposit as has not been or is not then required to be used by Lessor 10 Real Property Taxes 101 Definitions (a) Real Property Taxes As used here n the term Real Property Taxes shall nclude any form of assessment eal estate general special ordinary or extraordinary or rental levy or tax (other than nher lance pe sonal ncome or estate taxes) mp o ement bond and/o I cense fee imposed upon or levied against any legal or equitable nterest of Lessor n the Project Lesso s ght to oche ncome the of om and/o Lessor's business of leasing by any authonty having the d red or indirect power to tax and where the funds are generated w th reference to the P ojecl address and where the proceeds so generated are to be applied by the c ty county or other local tax ng author ty of a jur sdlct on w th n wh ch the Project is located The term Real P operty Taxes shall also include any tax fee levy assessment o charge or any increase the emn () mposed by reason of events occumng dunng the term of this Lease includ ng but not limited to a change in the ownership of the Project ( ) a change n the Improvements thereon and/or(n)ley ed or assessed on math nery or equ pment prov ded by Lessor to Lessee pu suant to th s Lease (b) Base Real Property Taxes As used herein the to m Base Real Property Taxes shall be the amount of Real Property Taxes which are assessed against the Prem ses Building P ojec( or Common Areas in the calendar yea du ng which the Lease s executed In calculating Real Property Taxes for any calendar year the Real Property Taxes for any eal estate tax yea shall be ncluded n the calculat on of Real Property Taxes for such calendar year based upon the number of days which such calendar year and tax yea have n common 10 2 Payment of Taxes Except as otherwise provided n Pa agraph 10 3 Lesso shall pay the Real P operty Ta as appl cable to t e Project and sad payments shall be included in the calculation of Common Area Operat ng Expenses n accordance with the p ov s ons of Parag aph 42 Ss PAGE 12 OF 23 ra�. I N I Tri S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E 103 Additional Improvements Common Area Operating Expenses shall not include Real Property Taxes spec fled in the to assessors records and work sheets as being caused by additional improvements placed upon the Project by other tenants or by Lessor for the exclusive enjoyment of such other Tenants Notwithstanding Paragraph 10 2 hereof Lessee shall however pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph 4 2 the entirety of any ncrease in Real Property Taxes if assessed solely by reason of Alterations Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessees equest or by reason of any alterations or mprovements to the Premises made by Lessor subsequent to the execut on of this Lease by the Parties 10 4 Joint Assessment If the Build ng is not separately assessed Real Property Taxes allocated to the Build ng shall be an equ table proportion of the Real Property Taxes for all of the land and mprovements included w th n the tax parcel assessed such proportion to be deters ned by Lessor from the respective valuat ons assigned n the -ssessors work sheets or such other nformat on as may be reasonably ava fable Lesso s reasonable determination the eof in good fa th shall be conclusive 10 5 Personal Property Taxes Lessee shall pay prior to del nquency all taxes assessed against and lev ed upon Lessee Owned Alterat ons and Utility Installations Trade Fixtures fum sh ngs equipment and all personal property of Lessee conta ned n the P emises When possible Lessee shall cause its Lessee Owned Alterations and Util ty Installat ons Trade Fixtu es furn sh ngs equ pment and an othe pe sonar property to be assessed and billed separately from the real property of Lessor If any of Lessees sad property shall be assessed w th Lessors eal property Lessee shall pay Lessor the taxes attnbutable to Lessees p operty within 10 days after rece pt of a wr tten statement sett ng forth the taxes applicable to Lessee s property 11 Utilities and Services Lessee shall pay for all Ovate gas heat light power telephone trash d sposal and othe ut lit es and sery ces supplied to the Prem ses together with any taxes thereon Notwithstand ng the provisions of Paragraph 4 2 if at any time in Lessors sole judgment Lessor determ nes that Lessee is using a disproportionate amount of wate electricity or other commonly metered ut I t es o that Lessee s gene at ng such a large volume of trash as to require an increase n the s ze of the trash receptacle and/o an ncrease in the number of I mes pe month that s emptied then Lessor may increase Lessees Base Rent by an amount equal to such increased costs There shall be no abatement of Rent and Lesso shall not be liable in any respect whatsoever for the inadequacy stoppage nterruption or d scont nuance of any utility or sew ce due to of st ke labo dispute breakdown accident repair or other cause beyond Lessor's reasonable control or n cooperat on with governmental request o d ect ons 12 Assignment and Subletting 12 1 Lessors Consent Required (a) Lessee shall not voluntanly or by operat on of law ass gn transfer mortgage or encumber (collectively assign or assignment )or sublet all or any part of Lessees nterest in this Lease or in the Premises without Lessor's prior written consent (b)Unless Lessee s a corporation and is stock is publ cry traded on a national stock exchange a change n the cant of of Lessee shall constitute an ass gnment requinng consent The transfer on a cumulative basis of 25/ o more of the vot ng control of Lessee shall const Lute a change in control for this purpose (c) The involvement of Lessee or Is assets in any transaction or ser es of transact ons (by way of merge sale acqu s t on financing transfer leveraged buy-out or otherwise) whether or not a formal assignment or hypolhecat on of th s Lease o Lessees assets occu s 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 I was rep esented at the time of the execution of th s Lease or at the time of the most recent assignment to which Lessor has consented or as I ex sts mmed ately p o to sa transaction or transactions constituting such reduction whichever was or s greater shall be considered an assignment of th s Lease to which Lesso may withhold its consent "Net Worth of Lessee shall mean the net worth of Lessee(excluding ary guarantors)established under gene ally accepted accounting pnnciples (d)An assignment or subletting without consent shall at Lessor's option be a Default curable after notice per Pa ag aph 13 1(c) o a noncurable Breach without the necessity of any notice and grace penod If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach Lessor may either()terminate th s Lease or( )upon 30 days wntten not ce ncrease the monthly Base Rent to 110/ of the Base Rent then n effect Further in the event of such Breach and rental adjustment ()the purchase price of any option to purchase the Prem ses held by Lessee shall be subject to sim lar adjustment to 110/ of the pnce prey ously n effect and ( ) all fixed and non fixed rental adjustments scheduled dunng the remainder of the Lease term shall be ncreased to 110/ of the scheduled adjusted rent (e)Lessees remedy for any breach of Paragraph 12 1 by Lessor shall be limited to compensatory damages and/or njunct ye el el (f) Lessor may easonably withhold consent to a proposed ass gnment or subletting f Lessee is in Default at the t me consent s requested (g) Notwithstanding the foregoing allowing a de minim s portion of the Premises to 20 square feet or less to be used by a th rd party vendor in connection with the installation of a vending machine or payphone shall not constitute a sublett ng 12 2 Terms and Conditions Appl cable to Ass gnment and Sublett ng (a) Regardless of Lessor's consent no assignment or subletting shall (t)be effective without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease (ti) release Lessee of any obligations hereunder or (ii)alter the pnmary liability of Lessee for the payment of Rent or for the performance of any other obl gations to be performed by Lessee (b) Lessor may accept Rent or performance of Lessees obl gat ons from any person other than Lessee pending approval o disapproval of an assignment Neither a delay in the approval or d sapproval of such assignment no the acceptance of Rent or performance shall constitute a waiver or estoppel of Lessor's nght to exercise its remed es for Lessees Default or Breach /,'�,Q PAGE 13 OF 23 "fr"� "w. INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E (c)Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent ass gnment or sublett ng (d) In the event of any Default or Breach by Lessee Lessor may proceed d redly aga nst Lessee any Guarantors o anyone else espons ble for the performance of Lessees obligations under this Lease includ ng any assignee o sublessee w thout f st e haust ng Lesso s remedies against any other person or entity respons ble the efor to Lessor or any secur ty held by Lessor (e) Each request for consent to an ass gnment or subletting shall be n writing accompanied by information relevant to Lesso s determination as to the financial and operational responsibility and appropriateness of the p oposed assignee o sublessee includ ng but not I m ted to the intended use and/or required mod fication of the Premises f any together with a fee of $500 as cons de at on fo Lesso s cons de ng and processing said request Lessee agrees to provide Lessor with such other or additional nfo matron and/or documental on as may be easonably requested (See also Paragraph 36) (f)Any assignee of or sublessee under this Lease shall by reason of accepting such ass gnment entering into such sublease or entenng into possess on of the Prem ses or any portion thereof be deemed to have assumed and agreed to conform and comply w th each and every term covenant condition and obligation herein to be observed or performed by Lessee dur ng the term of said ass gnment or sublease other than such obligations as are contrary to or nconsistent with provisions of an assignment or sublease to which Lesso has spec fically consented to n wr t ng (g) Lessor's consent to any assignment or sublett ng shall not t ansfer to the ass gnee or sublessee any Opt on granted to Ire onginal Lessee by th s Lease unless such transfer s specifically consented to by Lessor in wnting (See Paragraph 39 2) 12 3 Additional Terms and Conditions Applicable to Sublett ng The follow ng terms and cond tons shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed ncluded in all subleases under th s Lease whether or not expressly nco porated the an (a) Lessee hereby assigns and transfers to Lessor all of Lessees nterest in all Rent payable on any sublease and Lesso may collect such Rent and apply same toward Lessees obligations under th s Lease prov ded however that until a Breach shall occur n the perfo mance of Lessees obl gatons Lessee may collect sad Rent In the event that the amount collected by Lesso e ceeds Lessees then outstand ng obl gat ons any such excess shall be refunded to Lessee Lessor shall not by reason of the foregoing or any ass gnment of such sublease nor by eason of the collection of Rent be deemed I able to the sublessee for any failure of Lessee to perform and comply with any of Lessees obligations to st ch sublessee Lessee hereby irrevocably authonzes and directs any such sublessee upon rece pl of a wr tten not ce from Lesso stat ng that a Breach ex sts in the performance of Lessees obligations under this Lease to pay to Lesso all Rent due and to become due unde the sublease Sublessee shall rely upon any such not ce from Lessor and shall pay all Rents to Lessor without any obl gation o nght to nqu e as to whethe such Breach e is notwithstanding any claim from Lessee to the contrary (b)In the event of a Breach by Lessee Lessor may at its option requ re sublessee to attom to Lessor n wh ch event Lesso shall undertake the obligations of the sublessor under such sublease from the time of the exerc se of said option to the expiration of such sublease prov di-d however Lessor shall not be liable for any prepaid rents or security deposit pad by such sublessee to such sublessor or fo any pr or Defaults o Breaches of such sublessor (c)Any matter requ nng 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 pnor written consent (e)Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee who shall have the nght to cure the Default of Lessee within the grace penod if any specified in such notice The sublessee shall have a r ght of reimbursement and offset from and aga nst Lessee for any such Defaults cured by the sublessee 13 Default Breach Remedies 13 1 Default Breach A Default is defined as a fa lure by the Lessee to comply with or perform any of the terms covenants conditions or Rules and Regulations under th s Lease A Breach is defined as the occurrence of one o more of the follow ng Defaults and the fa lu e of Lessee to cure such Default with n any applicable grace penod (a) The abandonment of the Premises or the vacating of the Premises without providing a commercially reasonable level of security or where the coverage of the property insurance descnbed in Paragraph 8 3 is Jeopardized as a esult thereof or without p ov d ng reasonable assurances to minimize potential vandalism (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereund=r whether to Lessor or to a third party when due to provide reasonable ev dence of nsurance or surety bond or to fulfill any obl gat on under th s Lease which endangers or threatens I fe or property where such fa lure continues for a penod of 3 business days following wr tten 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 LESSORS RIGHT TO RECOVER POSSESSION OF THE PREMISES (c) The failure of Lessee to allow Lessor and/or is agents access to the Prem ses or the commission of waste act or acts constituting publ c or pnvate nuisance and/or an illegal achy ty on the Prem ses by Lessee whe e such actions continue fo a pe od of 3 business days following wntten notice to Lessee (d) The failure by Lessee to provide () reasonable wntten evidence of comp)ance with Applicable Requ ements ( ) the service contracts ( ) the rescission of an unauthorized assignment or sublett ng (iv) an Estoppel Certificate or financial statements (v)a requested subordination (vi)ev dence concerning any guaranty and/or Guarantor (v )any document requested under Parag aph 41 (v ) matenal data satety sheets (MSDS) or (ix)any other documentation or information which Lessor may reasonably require of Lessee under the terms of th s Lease whe e PAGE 14 OF 23 c INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E any such failure continues for a penod of 10 days following wntten not ce to Lessee (e) A Default by Lessee as to the terms covenants conditions or p ovis ons of th s Lease or of the ules adopted under Paragraph 2 9 hereof other than those descnbed 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 Lessees Default is such that more than 30 days are reasonably required fo its cure then t shall not be deemed to be a Breach if Lessee commences such cure with n said 30 day penod and thereafter dil gently prosecutes such cure to completion (f) The occurrence of any of the following events ()the mak ng of any general arrangement or ass gnment for the benefit of creditors (n)becoming a debtor as defined in 11 U S C § 101 or any successor statute the eto(unless n the case of a pet ton f led aga nst Lessee the same s dism ssed w th n 60 days) ( )the appointment of a trustee or rece ver to take possession of substantially all of Lessen s assets located at the Prem ses or of Lessees interest in this Lease where possess on s not restored to Lessee with n 30 days or(iv)the attachment e ecut on or other judicial seizure of substantially all of Lessees assets located at the Prem ses or of Lessees interest in th s Lease where such se zure s not discharged with n 30 days prov ded howeve in the event that any prov son of th s subparagraph is contrary to any appl cable law such prov son shall be of no force or effect and not affect the validity of the remain ng prov sions (g) The discovery that any financial statement of Lessee or of any Guarantor g yen to Lessor was mater ally false (h) If the performance of Lessees obi gallons under th s Lease is guaranteed (i) the death of a Guarantor (i) the termination of a Guarantors liability with respect to this Lease other than n accordance with the terms of such guaranty (ii)a Guarantor's becoming nsolvent or the subject of a bankruptcy fling (iv)a Guarantor's refusal to honor the guaranty or(v)a Guarantors breach of its guaranty obligation on an anticipatory basis and Lessees failure within 60 days following written not ce of any such event to provide wntten Memel ye assurance or secunty which when coupled with the then existing resources of Lessee equals or exceeds the combined financial resources of Lessee and the Guaranto s that existed at the time of execution of this Lease 13 2 Remedies If Lessee fails to perform any of its affirmative duties or obi gal ons within 10 days after written not ce(o n case of an emergency without notice) Lessor may at is opt on perform such duty o obl gation on Lessees behalf nclud ng but not I m ted to the obta n nj of reasonably required bonds insurance pol cies or govemmental I censes permits or app ovals Lessee shall pay to Lesso an amount equal to 115/ of the costs and expenses incurred by Lessor in such performance upon receipt of an nvoice therefor In the event of a B each Lessor may w th o without further notice or demand and without limiting Lessor in the exercise of any nght or remedy which Lessor may have by reason of such Breach (a) Terminate Lessees nght to possession of the Premises by any lawful means in which case th s 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 (n)the worth at the time of award of the amount by which the unpaid rent which would have been earned after term nat on until the time of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avo ded (iii)the worth at the time of award of the amount by which the unpa d 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 Lessees failure to perform its obligations under this Lease or wh ch n the ordinary course of th ngs would be likely to result therefrom including but not limited to the cost of recovenng possession of the Prem ses expenses of releti ng including necessary enovat on and alterat on of the Premises reasonable attorneys fees and that portion of any leas ng comm ssion pa d by Lessor n conned on with th s Lease appl cable to the unexp ed te m of this Lease The worth at the time of award of the amount referred to in prov Sion (iii) of the mmediately preceding sentence shall be computed by discounting such amount at the d scount rate of the Federal Reserve Bank of the District w thin which the P em ses are located at the t me of award plus one percent Efforts by Lessor to mitigate damages caused by Lessees Breach of this Lease shall not wave Lessors r ght to recover any damages to which Lessor is otherwise entitled If termination of this Lease is obtained through the provisional remedy of unlawful deta ne Lessor shall have the nght to recover n such proceeding any unpa d Rent and damages as are recoverable therein or Lessor may reserve the r ght to recover all or any part thereof in a separate su t If a notice and grace period requ red under Paragraph 13 1 was not previously g wen a not ce to pay rent or qu t or to perform or quit given to Lessee under the unlawful deta ner statute shall also const Lute the notice required by Parag aph 13 1 In such case the applicable grace penod required by Paragraph 13 1 and the unlawful deta ner statute shall run concurrently and the failure of Lessee to cue he Default within the greater of the two such grace penods shall const lute both an unlawful detainer and a B each of th s Lease ent fling Lesso to the remedies provided for in this Lease and/or by said statute (b) Continue the Lease and Lessees nght to possession and ecover the Rent as it becomes due n wh ch event Lessee may sublet or assign subject only to reasonable limitations Acts of maintenance efforts to relet and/or the appo nnment of a ece ver to protect the Lessors interests shall not constitute a termination of the Lessee s r ght to possession (c)Pursue any other remedy now or hereafter available under the laws or jud cial dec sions of the state whe e n the P em es a e located The expiration or termination of Ih s Lease and/or the terminal on of Lessees r ghl to possession shall not rel eve Lessee f om I ab I ty uncle any indemnity prov sions of this Lease as to matters occumng or accru ng dunng the te m he eof or by reason of Lessees occupancy of the P em se 13 3 Inducement Recapture Any agreement for free or abated rent or othe charges or for the giv ng or pay ng by Lessor to or fo Lessee of any cash or other bonus nducement or cons deration fo Lessees entenng nto th s Lease all of wh ch concess ons are hereinafte refe ed to as Inducement Provisions shall be deemed conditioned upon Lessees full and faithful performance of all of the terms covenants and condit ons of this Lease Upon Breach of this Lease by Lessee any such Inducement Provis on shall automat tally be deemed deleted f om th s Lease and of no further force or effect and any rent other charge bonus inducement o cons derat on theretofore abated g wen o pad by Lesso under such an PAGE 15 OF 23 ad< war INI S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14 02/13E Inducement Provision shall be mmed ately due and payable by Lessee to Lessor notwithstanding any subsequent cu e of sa d B each by Lessee The acceptance by Lessor of rent or the cure of the Breach wh ch in bated the operat on of th s parag aph shall not be deemed a waver by Lesso of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance 134 Late Charges Lessee hereby acknowledges that late payment by Lessee of Rent wIl cause Lessor to incur costs not contemplated by this Lease the exact amount of which will be extremely difficult to ascerta n Such costs include but are not I m ted to process ng nd accounting charges and late charges wh ch may be imposed upon Lessor by any Lender Accordingly if any Rent shall not be ece ved by Lessor within 5 days after such amount shall be due then without any requ rement for not ce to Lessee Lessee shall mmed ately pay to Lesso a one t me late charge equal to 10/ of each such overdue amount or$100 whichever s 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 Lessees Default or Breach with respect to such ove due 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 consecut ye nstallments of Base Rent then notwithstanding any prows on of this Lease to the contrary Base Rent shall at Lessors 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 nterest( 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 n Paragraph 13 4 13 6 Breach by Lessor (a)Notice of Breach Lessor shall not be deemed n 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 t me shall n no event be less than 30 days after rece pt by Lessor and any Lender whose name and address shall have been furnished to Lessee in writ ng for such purpose of wntten not ce specifying wherein such obligat on of Lessor has not been performed provided however that if the nature of Lessors obligation is such that more than 30 days are reasonably requ red for its performance then Lessor shall not be in breach if performance is commenced within such 30 day penod and thereafter dil gently pursued to completion (b)Performance by Lessee on Behalf of Lessor In the event that neither Lessor nor Lender cures sad breach within 30 days after rece pt of sad notice or f having commenced sad cure they do not dil gently pu sue t to completion then Lessee may elect to cu e sa d breach at Lessees 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 months Base Rent or the Secur ty Depos t reserving Lessees r ght to e mbu Bement f om Lessor for any such expense in excess of such offset Lessee shall document the cost of sad cure and supply sad documental on to Lessor 14 Condemnation If the Premises or any portion thereof are taken under the power of em nent doma n or sold unde the threat of the exe c se of said power (collectively Condemnation ) this Lease shall term nate as to the part taken as of the date the condemning autho ty takes t tie or possession whichever frst occurs If more than 10/ of the floor area of the Unit or more than 25/ of the park ng spaces s taken by Condemnat in Lessee may at Lessees option to be exercised in writing within 10 days after Lessor shall have g yen Lessee wntten not ce of such tak ng (o n ne absence of such notice with n 10 days atter the condemn ng authonty shall have taken possession)term nate this Lease as of the dale the condemn ng authonty takes such possession If Lessee does not term nate th s Lease in accordance with the foregoing th s Lease shall rema n n full force and effect as to the portion of the Premises remain ng except that the Base Rent shall be reduced n proport on to the eduction n ut I ty of the Prem ses caused by such Condemnat on Condemnation awards and/or payments shall be the p operty of Lessor whether such award shall be made as compensation for dim nution n value of the leasehold the value of the part taken o for seve ance damages prov ded howeve that Lessee shall be entitled to any compensation paid by the condemnor for Lessees elocat on expenses loss of business goodw II and/or Trade F xtu es w thout regard to whether or not th s Lease is terminated pu suant to the proves ons of this Paragraph All Alte at ons and Ut I ty Installat ons made to the P em ses by Lessee for purposes of Condemnat on only shall be considered the p operty of the Lessee and Lessee shall be ent tied to any and all compensation which is payable therefor In the event that this Lease s not term nated 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 addit on to the payments owed pursuant to Paragraph 1 10 above and unless Lesso and the B oke s otherwise agree in wnting Lessor agrees that (a) f Lessee exercises any Option (b) f Lessee or anyone affliated with Lessee acqu es from Lesso any nghts to the Premises or other premises owned by Lessor and located with n the Protect (c) f Lessee remains in possession of the Prem ses w th the consent of Lessor after the expiration of th s Lease or(d) f Base Rent is nc eased whether by ag eement or ope ation of an escalat on clause herein then Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokers n effect at the t me the Lease was executed 15 2 Assumption of Obligations Any buyer o transferee of Lessors interest n this Lease shall be deemed to have assumed Lesso s obl gat on hereunder Brokers shall be third party benefit anes of the provisions of Paragraphs 1 10 15 22 and 31 If Lesso fa Is to pay to B oke s any amounts due as and for brokerage fees pertaining to th s Lease when due then such amounts shall acc ue Inte est In add ton f Lesso la Is to pay any amounts to Lessees Broker when due Lessees Broker may send wntten notice to Lessor and Lessee of such la lu e and f Lessor fa Is to pay such amounts within 10 days after said notice Lessee shall pay sad monies to its Broker and offset such amounts aga nst Rent In add ion Lesse=s Broker shall be deemed to be a third party beneficiary of any commission agreement entered nto by and/or between Lesso and Lesso s B oker to 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 othee�,that t PAGE 16 OF 23 V''„` INI S INITIALS ©1998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E • has had no dealings with any person firm broker or finder(other than the Brokers if any)in connection with th s Lease and that no one other than sa d named Brokers 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 wh ch 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 w thin 10 days after written notice from the other Party(the Requesting Party') execute acknowledge and deliver to the Request ng Party a statement in wr big n form similar to the then most cu rent Estoppel Cert ficate form published by the AIR Commercial Real Estate Association plus such add tlonal information confirmation and/or statements as may be reasonably requested by the Requesting Party (b) If the Responding Party shall fail to execute or delver the Estoppel Certificate with n such 10 day per od the Request ng Party may execute an Estoppel Certificate stating that (i) the Lease is in full force and effect w thout mod fcation except as may be ep esented by the Requesting Party (ii)there are no uncured defaults in the Requesting Party s performance and(III)if Lesso s the Request ng Party not more than<ne months rent has been paid in advance Prospective purchasers and encumbrancers may rely upon the Request ng Party s Estoppel Cert(cafe and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate In addit on Lessee acknowledges that any fa lu e on its part to provide such an Estoppel Certificate will expose Lessor to nsks and potent ally cause Lessor to incu costs not contemplated by th s Lease the extent of which will be extremely d ffcult to ascerta n Accord ngly should the Lessee fail to execute and/or delver a requested Estoppel Certificate n a timely fashion the monthly Base Rent shall be automat catty ncreased w thout any requi ement for notice to Lessee by an amount equal to 10/ of the then existing Base Rent or$100 whichever is greater fo remainder of the Lease The Pan es agree that such ncrease n Base Rent represents far and reasonable compensation for the add tional risk/costs that Lesso will ncur by reason of Lessees fa lu e to p ov de he Estoppel Certificate Such increase in Base Rent shall in no event constitute a waiver of Lessees Default o Breach w th espect to the fa lu e to prow de the Estoppel Cerbf cafe nor prevent the exert se of any of the other nghts and emedies granted he eunder (c) If Lessor desires to finance refinance or sell the Prem ses or any pan thereof Lessee and all Gua antors shall w th n 10 days after wntten notice from Lessor deliver to any potential lender or purchaser designated by Lessor such fnanc al statements as may be easonabty required by such lender or purchaser including but not lim ted to Lessees financial statements for the past 3 years All such fnanc al statements shall be rece ved by Lessor and such lender or purchaser in confidence and shall be used only for the purposes here n set forth 17 Definition of Lessor The term Lessor as used herein shall mean the owner or owners at the t me n quest on of the fee t tie to the Premises or if this is a sublease of the Lessees interest in the pnor lease In the event of a transfer of Lessor's title or interest n the Premises o th s Lease Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Secunty Deposit held by Lesso Upon such transfe or assignment and delivery of the Secunty Deposit as aforesaid the pr or Lessor shall be /el eyed of all I ability with respect to the obl gations and/or covenants under th s Lease thereafter to be performed by the Lessor Subject to the fo egoing the obligat ons and/or covenants n th s Lease to be performed by the Lesso shall be bind ng only upon the Lessor as he e nabove defned 18 Severah lity The nvalid ty of any provision of this Lease as determined by a court of competent jur sd ct on shall n no way affect the val dity of any other provision hereof 19 Days Unless otherwise specifically indicated to the contrary the word days as used in th s Lease shall mean and efe to calendar days 20 Limitation on Liability The obligations of Lessor under this Lease shall not const lute personal obligations of Lesso or ts panne s members directors officers or shareholders and Lessee shall look to the P emises and to no other assets of Lessor fo the sat sfaction of any I ab I ty of Lessor with respect to this Lease and shall not seek recourse against Lessor's partners members directors officers o shareholders o any of their personal assets for such sat sfaction 21 Time of Essence Time s of the essence with respect to the performance of all obligat ons to be performed or observed by the Parties under this Lease 22 No Pnor or Other Agreements Broker D sclaimer Th s Lease contains all agreements between the Parties with respect to any matte mentioned herein and no other pnor or contemporaneous ag eement or understand ng shall be effect ye Lessor and Lessee each represents and warrants to the Brokers that it has made and is elying solely upon ts own nvestigat on as to the nature qua(ty cha acte and Fnanc al espons b ty of the other Party to this Lease and as to the use nature qual ty and character of the Prem ses Brokers have no responsibil ty w th espect thereto o with respect to any default or breach hereof by either Party 23 Notices 23 1 Notice Requirements All notices requ red or permitted by Lh s Lease or appl cable law shall be in wnbng and may be delive ed n person (by hand or by couner)or may be sent by regular certified or registered mail or U S Postal Service Express Mail with postage prepa d or by facsimile transm ssion and shall be deemed sufficiently g yen if served in a manner spec fed in this Paragraph 23 The addresses noted adjacent to a Party s s gnature on th s Lease shall be that Party s address for del very or ma I ng of notices Either Party may by wntten notice to the other specify a different address for notice except that upon Lessees taking possess on of the Premises the Prem ses shall constitute Lessees address for notice A copy of all notices to Lessor shall be concurrently t ansm tted to such party or parties at such addresses as Lessor may from t me to time hereafter des gnate In wilting PAGE 17 OF 23 al< isv IN ^ S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E 23 2 Date of Notice Any notice sent by registered or certified mail return receipt requested shall be deemed g ven on the date of delivery shown on the receipt card or f no delivery date is shown the postmark thereon If sent by regular ma I the not ce shall be deemed g yen 72 hours after the same is addressed as requ red herein and ma led w th postage p epa d Notices delve ed by Un ted States Exp ess Ma I o overn Tht courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Sery ce o cou er Not ces transmitted by facsimile transmission or similar means shall be deemed del vered upon telephone confirmat on of eceipt (conf mat on report f om to machine is sufficient) provided a copy is also delivered v a delivery o mail If notice is received on a Saturday Sunday o legal hol day t shall be deemed received on the next business day 24 Waivers (a) No waiver by Lessor of the Default or Breach of any term covenant or condition he eof by Lessee shall be deemed a wa ver of any other term covenant or cond bon hereof or of any subsequent Default or Breach by Lessee of the same or of any other term covenant or cond ton hereof Lessor's consent to or approval of any act shall not be deemed to render unnecessary the obtain ng of Lessors consent to or approval of any subsequent or similar act by Lessee or be construed as the bass of an estoppel to enforce the p ov son or p ov sons of th s Lease requ r ng such consent (b) The acceptance of Rent by Lessor shall not be a waive of any Default o B each by Lessee Any payment by Lessee may be accepted by Lessor on account of mon es or damages due Lesso notwithstanding any qual ly ng statements o cond tons made by Lessee connection therewith which such statements and/or cond Lions shall be of no fo ce or effect whatsoever unless spec fcaily ag eed to n w tog 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 d scussion 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 t has with the agent or agents n the transact on Lessor and Lessee acknowledge being advised by the Brokers in this transaction as follows () Lessor's Agent A Lessor's agent unde a I sting agreement w th the Lessor acts as the agent for the Lessor only A Lessors agent or subagent has the following affrmative obl gations To the Lessor A fiduc ary duty of utmost care integ ty honesty and loyally n deal ngs with the Lessor To the Lessee and the Lessor a Diligent exerc se of reasonable sk Its and care n perfo mance of the agents dui es b A duty of honest and fair deal ng and good faith c A duty to disclose all facts known to the agent mate ally affect ng the value o des ab I ty of the property that are not known to or within the d I gent attent on and observation of the Parties An agent s not obligated to reveal to ether Party any confident al information obtained from the other Party which does not nvolve the affirmative dut es set forth above (ii) Lessees Agent An agent can ag ee to act as agent for the Lessee only In these situatons the agent s not the Lessors agent even f by agreement the agent may receive compensation for sery ces rendered ether in full or in part from the Lessor An agent acting only for a Lessee has the following affirmative obligations To the Lessee A fduc ary duty of utmost care integrity honesty and loyalty n dealings with the Lessee To the Lessee and the Lessor a Diligent exercise of reasonable skills and care in performance of the agents duties b A duty of honest and fair dealing and good faith c A duty to d sclose all facts known to the agent matenally affecting the value or desirability of the property that are not known to or with n the diligent attention and observation of the Parties An agent is not obligated to reveal to either Party any confident al nfonnation obtained from the other Party wh ch does not involve the affirmative duties set forth above ( ) Agent Represenhnq Both Lessor and Lessee A real estate agent either act ng d redly or through one or more associate I tenses 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 follow ng affirmative oblige(ons to both the Lesso and the Lessee a A fduc ary duty of utmost care ntegnty honesty and loyalty in the dealings with ether Lesso or the Lessee b Other duties to the Lessor and the Lessee as stated above in subparagraphs (t)or(a) In representing both Lessor and Lessee the agent may not without the express perm ssion of the respective Party disclose to the other Party that the Lesso will accept rent n an amount less than that indicated in the I st ng or that the Lessee is w(ling to pay a h gher rent than that offered The above duties of the agent n a real estate transaction do not rel eve a Lessor or Lessee from the responsibil ty 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 (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 involy ng any breach of duty error or om ss on relating to th s Lease may be brought aga nst B orter mo e than one year after the Start Date and that the liability(includ ng court costs and attorneys fees) of any Broke w th espect to any such law su t and/o legal p oceed ng shall not exceed the fee received by such Broker pursuant to th s Lease prov ded however that the forego ng lim tation on each B oker s I ab 1 ty shall not be applicable to any gross negligence or willful misconduct of such B oke (c) Lessor and Lessee agree to ident fy to Brokers as Confdential any commun cation or nfo mat on g yen Broke s that s cons de ed by such Party to be confdential 26 No Right To Holdover Lessee has no right to eta n possession of the Prem ses or any part thereof beyond the exp rat on o term nat on of this Lease In the event that Lessee holds over then the Base Rent shall be increased to 150/ of the Base Rent applicable immed ately preced ng the PAGE 18 OF 23 Ile LW !NIT S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E • expiration or term nation Nothing contained herein shall be construed as consent by Lesso to any hold ng ove by Lessee 27 Cumulative Remedies No remedy or election hereunder shall be deemed exclusive but shall wherever poss ble be cumulative w th 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 t ties are for the convenience of the Part es only and shall not be cons dered a part of th s Lease Whenever required by the context the s ngular shall include the plural and v ce versa This Lease shall not be construed as if prepared by one of the Parties but rather according to ts fair meaning as a whole as if both Part es had prepared it 29 Binding Fffect Choice of Law This Lease shall be binding upon the parties their pe sonal epresentat ves successo s and ass gns and be governed by the laws or the State in which the Prem ses are located Any I Ligation between the Part es hereto conce n ng th s Lease shall be Mated n the county in wh ch the Prem ses are located 30 Subordination Attornment Non Disturbance 30 1 Subordination Th s Lease and any Option granted hereby shall be subject and subordinate to any ground lease mortgage dead of trust or other hypothecation or secunty device(collectively Security Device ) now or hereafte placed upon the Prem ses to any and all advances made on the seventy thereof and to all renewals modifications and extens ons thereof Lessee agrees that the holders of any such Secur ty Devices (in this Lease together referred to as Lender )shall have no liability or obl gal on 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 supenor to the lien of its Secur ty Dev ce by g v ng wr tten not ce thereof to Lessee whereupon this Lease and such Options shall be deemed pnor to such Secunty Device notw thstand ng the elat ve dates of the documentat on or recordation thereof 30 2 Attornment In the event that Lessor transfers title to the Prem ses or the Premises a e acqu red by another upon the foreclosure or termination of a Security Devise to which this Lease is subord nated (i) Lessee shall subject to the non disturbance prov sions of Paragraph 30 3 attom to such new owner and upon request enter into a new lease conta n ng all of the terms and prov s ons of th s Lease w th such new owne fo the remainder of the term hereof or at the election of the new owner th s Lease will automat rally become a new lease between Lessee and such new owner and (u) 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 occurr ng p for to acquisitio of ownership (b)be subject to any offsets or defenses wh ch Lessee might have against any pnor lessor (c)be bound by p epayment of more than one months rent or(d)be liable for the return of any secunty deposit pad to any pnor lessor which was not pad or credited to such new owner 30 3 Non Disturbance W th respect to Secunty Devices entered into by Lessor after the execution of this Lease Lessee s subordination of this Lease shall be subject to eceiving a commercially reasonable non d sturbance agreement (a Non Disturbance Agreement ) from the Lender which Non D sturbance Agreement provides that Lessees possess on of the Prem ses and this Lease indud ng any options to extend the term hereof will not be disturbed so long as Lessee s 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 ts commercially reasonable efforts to obta n a Non Disturbance Agreement from the holder of any pre-existing Security Device wh ch is secured by the Premises In the event that Lessor is unable to prov de the Non Disturbance Agreement within said 60 days then Lessee may at Lessees option directly contact Lender and attempt to negot ate for the execution and delivery of a Non Disturbance Agreement 30 4 Self Executing The agreements contained in th s Paragraph 30 shall be effective without the execution of any further documents provided however that upon wntten request from Lessor or a Lender in connection w th a sale financing or refinanc ng of the Prem ses Lessee and Lessor shall execute such further writings as may be reasonably requ red to separately document any subord nat on attornment and/or Non Disturbance Agreement provided for herein 31 Attorneys Fees If any Party or Broker bnngs an action or proceed ng nvolving the Premises whether founded in tort contract or equity or to declare nghts hereunder the Preva I ng Party(as hereafter defined) n any such proceed ng action or appeal thereon shall be entitled to reasonable attorneys fees Such fees may be awarded n the same su t or recovered in a separate suit whether or not such action o proceeding is pursued to deasion or judgment The term Prevailing Party' shall nclude without I m tat on a Party or Broker who substantially obta ns or defeats the reef sought as the case may be whether by comprom se settlement judgment or the abandonment by the othe Party o Broke of its cla m or defense The attorneys fees award shall not be computed in accordance with any court fee schedule but shall be such as to fully e mbu se all attorneys fees reasonably muffed In addition Lessor shall be ent tied to attomeys fees costs and expenses ncur ed n the preparat on and sery ce of not ces of Default and consultations in connection therewith whethe or not a legal action s subsequently commenced n connect on with such Default or esult ng Breach($200 is a reasonable min mum per occurrence for such sery ces and consultat on) 32 Lessors Access Showing Premises Repairs Showing Prem ses Repa rs Lessor and Lesso s agents shall have the r ght to ente the Premises at any time in the case of an emergency and otherwise at reasonable times after reasonable pro notice for the pu pose of show ng he same to prospective purchasers lenders or tenants and making such alterat ons repairs improvements or add 1 ons to the P em ses as Lessor may deem necessary or desirable and the erecting using and ma ntaining of utilities sery ces pipes and condu ts through the Prem ses and/or other premises as long as there s no matenal adverse effect on Lessees use of the Premises All such act v ties shall be without abatement of rent or liabil ty to Lessee 33 Auctions Lessee shall not conduct nor perm t to be conducted any auct on upon the Premises without Lessors pro wntten consent Lessor shall not be obi gated to exerase any standard of easonableness n determ n ng whethe to perm tan auct on /f�,�/� PAGE 19 OF 23 at IN LS INITIALS 019913 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14 02/13E 34 Signs Lessor may place on the Premises ord nary For Sale s gns at any t me and ord nary Fo Lease signs dur ng the last 6 months of the term hereof Except for ordinary For Sublease signs which may be placed only on the Prem ses Lessee shall not place any s gn upon the P oject without Lessors pnor written consent NI signs must comply with all Applicable Requ rements 35 Termination Merger Unless specifically stated otherwise in writing by Lessor the voluntary or other surrender of th s Lease by Lessee the mutual termination or cancellation hereof or a termination hereof by Lessor for Breach by Lessee shall automat tally term nate any sublease or lesser estate n the Premises provided however that Lessor may elect to continue any one or all existing subtenant es Lessors fa lure wthin 10 d'iys following any such event to elect to the contrary by wntten notice to the holder of any such lesser interest shall const lute Lessors election to have such event constitute the termination of such interest 36 Consents Except as otherwise provided here n whe aver in this Lease the consent of a Party is requ red 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 pad by Lessee upon receipt of an invoice and supporting documentation therefor Lessor's consent to any act ass gnment 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 wa ver of any then ex st ng Default o Breach except as may be otherwise specifically stated in wetting by Lessor at the time of such consent The failure to specify he ein any part cula condition to Lessors consent shall not preclude the impos bon by Lessor at the t me of consent of such furthe or oche cond t ons as a e then reasonable with reference to the particular matter for which consent s being g yen In the event that either Party disagrees with any determinat on made by the other hereunder and reasonably requests the reasons for such determination the determining party shall furnish its reasons in wr t ng and in reasonable detail within 10 business days following such request 37 Guarantor 37 1 Execution The Guarantors if any shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association 37 2 Default It shall constitute a Default of the Lessee if any Guarantor fails or refuses upon request to provide (a)ev dence of the execution of the guaranty including the authority of the party signing on Guarantor's behalf to obl gate Guarantor and in the case of a corporate Guarantor a certified copy of a resolution of its board of di ectors authonzing the making of such guaranty (b) current fnanc al statements (c) an Estoppel Certificate or(d)wntten confirmation that the guaranty is still n effect 38 Quiet Possession Subject to payment by Lessee of the Rent and performance of all of the covenants cond t ons and provisions r Lessees part to be observed and performed under this Lease Lessee shall have qu et possession and qu et enjoyment of the Premises du ng the le m hereof 39 Options If Lessee is granted any option as defined below then the following p ovisions shall apply 39 1 Definition Option shall mean (a)the nght 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 nght of first refusal or frst offer to lease either the Prem ses or other property of Lessor (c)the nght to purchase the nght of frst offer to purchase or the nght of fi st refusal to purchase the Prem ses or other property of Lesso 39 2 Options Personal To Original Lessee Any Option granted to Lessee in th s Lease is personal to the ong nal Lessee and cannot be ass gned or exercised by anyone other than said onginal Lessee and only wh le the onginal Lessee s n full possess on of the Premises and f requested by Lessor with Lessee certifying that Lessee has no ntent on of thereafter assign ng or sublett ng 39 3 Mult pie Options In the event that Lessee has any multiple Options to extend or renew this Lease a later Opt on cannot be exerc sed unless the pnor Opt ons have been validly exercised 39 4 Effect of Default on Options (a)Lessee shall have no nght to exerc se an Option ()dunng the per ad comment ng w th the giv ng of any not ce of Default and continu ng until said Default is cured (ii) dunng the penod of t me any Rent is unpa d (w thout regard to whethe not ce the eof s g wen Lessee) ( ) dunng the time Lessee s B each of th s Lease or(v) n the event that Lessee has been given 3 o more notices of separate Default whethe o of the Defaults are cured dunng the 12 month penod immediately preced ng the exercise of the Option (b)The period of time with n wh ch an Option may be exercised shall not be extended or enlarged by reason of Lessees inab lily 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 notw thstanding Lessees due and timely exercise of the Option f after such exercise and pnor to the commencement of the extended term o complet on of the purchase ()Lessee fa Is to pay Rent for a penod of 30 days after such Rent becomes due(without any necess ty of Lessor to g ve not ce thereof) o ( ) f Lessee commits a Breach of th s Lease 40 Secunty Measures Lessee hereby acknowledges that the Rent payable to Lessor he eunde does not nclude the cost of guard sery ce o other secunty measu es and that Lessor shall have no obligat on whatsoeve to prov de same Lessee assumes all respons b I ty to the p otect on of the Premises Lessee its agents and invitees and their property from the acts of th rd parties 41 Reservations Lessor reserves the nght ()to grant without the consent or to nder of Lessee such easements r ghts and ded cat ons that Lessor deems necessary (u)to cause the recordation of parcel maps and reslnct ons and (a)to c eate and/o nstall new ui I ty aceways so long as such easements nghts dedications maps restnctions and utility raceways do not un easonably interfe e w th the use of the P em ses by Lessee Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such r ghts /f,i,/J PAGE 20 OF 23 �'`K INIi S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E 42 Performance Under Protest If at any t me a dispute shall arise as to any amount or sum of money to be pad 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 nght 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 sad 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 Is nght to protest such payment 43 Authority Multiple Parties Execution (a) If ether Party hereto is a corporation trust I mated liabil ty company partnersh p or s m lar ent ty each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly autronzed to execute and delver th s Lease on its behalf Each Party shall within 30 days after request delver to the other Party satisfactory ev dence of such authonty (b) If this Lease is executed by more than one person or ent ty as Lessee each such person or ent ty shall be jo ntly and severally liable hereunder It is agreed that any one of the named Lessees shall be empowered to execute any amendment to th s Lease or othe document ancillary thereto and bind all of the named Lessees and Lessor may rely on the same as f 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 onginal and all of wh ch together shall constitute one and the same nstrument 44 Conflict Any conflict between the pnnted prov sions of this Lease and the typewr tten or handwritten p ovisions shall be cent oiled by the typewntten or handwritten provisions 45 Offer Preparation of this Lease by either party or their agent and subm ss on of same to the other Party shall not be deemed an offe to lease to the other Party This Lease is not intended to be bind ng unt I executed and delive ed by all Part es hereto 46 Amendments Th s Lease may be mod fled only in wr t ng s gned by the Parties n ante est at the t me of the mod fcat on As long as trey do not mater ally change Lessees obi gat ons hereunder Lessee ag ees to make such easonable non monetary mod fcat ons to th s Lease as may be easonably required by a Lender in connection w th the obtaining of normal financ ng or refinanc ng of the P emises 47 Waiver of Jury Trial THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT 48 Arbitration of Disputes M Addendum requinng the Arbitration of all disputes between the Parties and/o Brokers ar sing out of th s Lease ❑ is 0 is not attached to this Lease 49 Accessibility Americans w th D sabilities Act (a) The Prem ses 0 have not undergone an inspection by a Certified Access Specialist (CASp) ❑ have undergone an nspection by a Certified Access Spec alist (CASp) and it was determ ned that the Prem ses met all appl cable construct on elated accessib lily standards pursuant to Cal forma Civ I Code §55 51 et seq ❑ have undergone an nspection by a Certifed Access Special st (CASp) and t was determined that the Premises did not meet all applicable construction related accessib I ty standards pursuant to Cal forn a C vil Code§55 51 et seq (b) S nce compliance with the Amencans with D sab I t es Act (ADA) is dependent upon Lessees spec f c use of the Premises Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legislat on In the event 1 at Lessees use of the Premises requires modificat ons or additions to the Prem ses n order to be n ADA comp)ance Lessee ag ees to make any s ch necessary modifications and/or additions at Lessees 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 THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY LEGAL EFFECT OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES THE PARTIES ARE URGED TO 1 SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE 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 COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEES INTENDED USE WARNING IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED _ PAGE 21 OF 23 INI Jr LS INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E The parties hereto have executed this Lease at the place and on the dates specified above the r respective signatu es Executed at Seal Beach California Executed Seal Beach California On September 2013 On September 2013 By LESSOR By LESSEE City of Seal Beach Charles M Richey an an individual By �►,I % By dies //r �y- Name • Jill In.ram Ai Name Printed Charles M Richey ' Title Ci y Manager Title By By Name Pnnted Name Pnnted Title Ttle Address Address Telephone( ) Telephone( ) Facsimile( ) Facsimile( ) Email Email Email Email Federal ID No Federal ID No 193-98-5086 BROKER BROKER PacificWest Asset Management Corporation Att William A Packard Att Title Vice President Ttle Address P 0 Box 19068 Address Irvine CA 92623 Telephone(949)261-6111 Telephone ( ) __ PAGE 22 OF 23 GUS ArAM IN S INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E Facsimile(714 )433-7330 Facsmle( ) Emalwpackard @pacificwest cc Email Federal ID No Federal ID No Broker/Agent DRE License # 00768538 Broker/Agent DRE License # NOTICE These forms are often modified to meet changing requirements of law and industry needs Always wr te or call to make su e you are utilizing the most current form AIR Commercial Real Estate Association 500 N Brand Blvd Su te 900 Glendale CA 91203 Telephone No (213)687 8777 Fax No (213)687-8616 (c)Copyright 1998 By AIR Commercial Real Estate Assoc at on All rights reserved No part of these works may be reproduced to any form w thout perm ssion to writing PAGE 23 OF 23 INI INITIALS 01998 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTG 14-02/13E AIR Ile..[n+.. uuu+. T. RENT ADJUSTMENT(S) STANDARD LEASE ADDENDUM Dated September 16 2013 By and Between (Lessor) City of Seal Beach (Lessee) Charles M Richey an individual Address of Premises 201 Bth St #150 Seal Beach CA 90740 Paragraph 50 A RENT ADJUSTMENTS The monthly rent for each month of the adjustment penod(s)specified below shall be ncreased using the method(s)ind Gated below (Check Method(s)to be Used and Fill n Appropnately) ❑ I Cost of Living Adjustment(s)(COLA) a On(F II in COLA Dates) the Base Rent shall be adjusted by the change if any from the Base Month specified below in the Consumer Pnce Index of the Bureau of Labor Statistics of the U S Department of Labor for(select one)❑ CPI W (Urban Wage Earners and Clencal Workers)or❑ CPI U (All Urban Consumers) for(F II in Urban Area) All Items (1982 1984=100) herein referred to as CPI b The monthly rent payable in accordance with paragraph A I a of this Addendum shall be calculated as follows the Base Rent set forth in paragraph 1 5 of the attached Lease shall be multiplied by a tract on the numerato of wh ch shall be the CPI of the calendar month 2 months pno to the month(s)specified n paragraph A I a above dunng which the adjustment s to take effect and the denominator of which shall be the CPI of the calendar month which is 2 months pnor to(select one) the❑first month of the term of th s I ease as set forth in paragraph 1 3( Base Month )or ❑ (Fill n Other Base Month ) The sum so calculated shall constitute the new monthly rent hereunder but in no event shall any such new monthly ent be less than the ent payable for the month immed ately preced ng the rent adjustment c In the event the compilation and/or publication of the CPI shall be transferred to any other governmental department or bureau or agency or shall be discontinued then the ndex most nearly the same as the CPI shall be used to make such calculation In the event that the Parties cannot agree on such alternative index then the matter shall be submitted for decis on to the Amencan Arbitration Assoc ation n accordance with the then rules of sad Association and the decision of the arb trators shall be binding upon the parties The cost of said Arb tration shall be paid equally by the Parties AK, PAGE OF v IN S INITIALS 02000 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM RA 3-8/00E ❑ II Market Rental Value Adjustment(s)(MRV) a On(F II n MRV Adjustment Date(s) the Base Rent shall be adjusted to the Market Rental Value of the prope ty as follows 1) Four months pnor to each Market Rental Value Adjustment Date described above the Part es shall attempt to agree upon what the new MRV will be on the adjustment date If agreement cannot be eached within thirty days then (a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establ sh the new MRV with n the next 30 days Any associated costs will be spl t equally between the Parties or (b) Both Lessor and Lessee shall each immed ately make a reasonable dete mination of the MRV and submit such determination in wnting to arbitration in accordance with the following proves ons (i)Within 15 days thereafter Lessor and Lessee shall each select an ❑ appraiser or ❑ broker( Consultant check one)of their choice to act as an arbitrator The two arb trators so appointed shall mmed ately select a th rd mutually acceptable Consultant to act as a th rd arbitrator (ii)The 3 arb trators shall with n 30 days of the appointment of the th d arb trator each a dec son as to what the actual MRV for the Premises is and whether Lessors or Lessees submitted MRV is the closest the eto The decis on of a majo ty of the arb t ators shall be binding on the Parties The submitted MRV wh ch s determ ned to be the closest to the actual MRV shall thereafter be used by the Part es (iii)If either of the Parties fails to appo nt an arbitrator within the specified 15 days the arbitrator timely appo nted by one of them shall reach a dec sion on his or her own and said decision shall be binding on the Parties (iv)The ent re cost of such arbitrat on shall be paid by the party whose submitted MRV is not selected i e the one that is NOT the closest to the actual MRV 2) Notwithstanding the foregoing the new MRV shall not be less than the rent payable for the month immediately preced ng the rent adjustment b Upon the establishment of each New Market Rental Value 1)the new MRV will become the new Base Rent for the purpose of calculat ng any further Adjustments and 2) the first month of each Market Rental Value term shall become the new Base Month for the purpose of calculating any furthe Adjustments El III Fixed Rental Adjustment(s)(FRA) The Base Rent shall be increased to the following amounts on the dates set forth below On(Fill in FRA Adjustment Date(s)) The New Base Rent shall be 10/1/19 through 9/30/15 $590 75 per month 10/1/15 through 9/30/16 $556 97 per month B NOTICE Unless specified otherwise herein not ce of any such adjustments other than F xed Rental Adjustments shall be made as spec fled in paragraph 23 of the Lease C BROKERS FEE The Brokers shall be paid a Brokerage Fee for each adjustment specified above n acco dance with paragraph 15 of the Lease o if appl cable paragraph 9 of the Sublease NOTICE These forms are often mod tied to meet changing requ rements of law and industry needs Always write or call to make su e you are utilizing the most current form AIR Commercial Real Estate Association 500 N Brand Blvd Suite 900 Glendale CA 91203 Telephone No (213)687 8777 Fax No (213)687-8616 �. PAGE 2 OF 2 n INI S INITIALS 02000 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM RA 3-8/00E • .1`lza, AIR AL ..•,TTTTTT OPTION(S) TO EXTEND STANDARD LEASE ADDENDUM Dated September 16 2013 By and Between (Lessor) city of Seal Beach By and Between (Lessee) Charles M Richey an individual Address of Premises 201 stn st Suite 150 Seal Beach CA 90790 Paragraph 51 A OPTION(S)TO EXTEND Lessor hereby grants to Lessee the option to extend the term of this Lease for one additional thirty—six month penod(s)commencing when the pnor term expires upon each and all of the following terms and Condit ons (i) In order to exercise an option to extend Lessee must give wntten notice of such election to Lessor and Lessor must receive the same at least 90day but not more than six months pnor to the date that the option period would commence time being of the essence If proper notification of the exercise of an option is not g yen and/or rece ved such option shall automatically exp re Opt ons (f there are more than one)may only be exercised consecutively (ii) The provisions of paragraph 39 including those relating to Less=e s Default set forth n paragraph 39 4 of ih s Lease are conditions of this Option (iii) Except for the provisions of th s Lease granting an opt on or options to extend the term all of the terms and cond tons of th s Lease except where specifically modified by this option shall apply (iv) This Option s personal to the onginal Lessee and cannot be ass gned or exercised by anyone other than sad o iginal Lessee and only while the orig nal Lessee s in full possession of the Premises and without the ntention of the eafte ass gn ng o sublett ng (v) The monthly rent for each month of the option penod shall be calculated as follows us ng the method(s)ind sated below (Check Method(s)to be Used and Fill in Appropnately) ❑ I Cost of Living Adjustment(s)(COLA) a On(Fill in COLA Dates) the Base Rent shall be adjusted by the change if any from the Base Month spec fled below in the Consumer Price Index of the Bureau of Labo Statistics of the U S Department of Labor for(select one) ❑ CPI W(Urban Wage Earne s and Clencal Workers)or❑ CPI U (All Urban Consume s) for(F II in Urban Area) All Items(1982 1984= 100) herein referred to as CPI b The monthly rent payable in accordance with paragraph A I a of th s Addendum shall be calculated as follows the Base Rent set forth in paragraph 1 5 of the attached Lease shall be multiplied by a fraction the numerator of wh ch shall be the CPI of the calendar month 2 months p o to the month(s)specified in paragraph A I a above dunng which the adjustment is to take effect and the denom nator of wh ch shall be the CPI of the PAGE 1 OF 3 asc INI S INITIALS 02000 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE 3-8/00E calendar month which is 2 months pnor to(select one) ❑ the first month of the term of this Lease as set forth in pa ag aph 1 3 ( Base Month )o ❑ (F II in Other Base Month ) The sum so calculated shall constitute the new monthly rent hereunder but in no event shall any such new monthly rent be less than the rent payable for the month immediately preceding the rent adjustment c In the event the compilation and/or publ cation of the CPI shall be transferred to any other governmental department or bureau or agency or shall be discontinued then the index most nearly the same as the CPI shall be used to make such calculat on In the event that the Parties cannot agree on such alternative index then the matter shall be subm tted for decision to the Amer can Arb I at on Assoc ation n accordance with the then rules of said Association and the dens on of the arbitrators shall be bind rg upon the parties The cost of sad Arb tration shall be pad equally by the Parties ❑ II Market Rental Value Adjustment(s)(MRV) a On (Fill in MRV Adjustment Date(s)) the Base Rent shall be adjusted to the Market Rental Value of the property as follows 1) Four months pnor to each Market Rental Value Adjustment Date described above the Parties shall attempt to agree upon what the new MRV will be on the adjustment date If agreement cannot be reached within th rty days then (a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establ sh the new MRV with n the next 30 days Any associated costs will be split equally between the Parties or (b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and subm t such determination in wnting to arbitration in accordance with the following prov sons (i) Within 15 days thereafter Lessor and Lessee shall each select an ❑ appraiser or❑ broke ( Consultant check one)of the choice to act as an arb trator The two arbitrators so appo nled shall immed ately select a th rd mutually acceptable Consultant to act as a th d arbitrator (i) The 3 arbitrators shall within 30 days of the appointment of the th d arb trator reach a decision as to what the actual MRV fo the Premises is and whether Lessor's or Lessees submitted MRV s the closest the eto The dec son of a major ty of the arb trators shall be bind ng on the Parties The submitted MRV wh ch is determined to be the closest to the actual MRV shall thereafter be used by the Parties ( ) If either of the Parties fa Is to appoint an arb t ator with n the specified 15 days the a b trato timely appo nted by one of them shall reach a decision on his or her own and said decision shall be bind ng on the Parties (iv) The entire cost of such arbitration shall be pad by the party whose subm tied MRV s not selected e the one that s NOT the closest to the actual MRV 2) Notwithstanding the foregoing the new MRV shall not be less than the rent payable for the month immediately p eced ng the ent adjustment b Upon the establishment of each New Market Rental Value 1) the new MRV will become the new Base Rent for the purpose of calculat ng any further Adjustments and 2) the first month of each Market Rental Value term shall become the new Base Month for the purpose of calculat ng any further Adjustments Q III F xed Rental Adjustment(s)(FRA) The Base Rent shall be increased to the follow ng amounts on the dates set forth below On(F II n FRA Adjustment Date(s)) The New Base Rent shall be 10/1/16 through 9/30/17 $573 68 per month 10/1/17 through 9/30/18 $590 89 per month 10/1/18 through 9/30/19 $608 02 per month B NOTICE Unless specified otherw se herein not ce of any ental adjustments other than F xed Rental Adjustments shall be made as spec fled n paragraph 23 of the Lease C BROKERS FEE n- o PAGE2OF3 CO A, IN 7►i S INITIALS 02000 AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE 3-8/00E A The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the Lease or f applicable paragraph 9 of the Sublease NOTICE These forms are often modified to meet changing requirements of law and industry needs Always wr to or call to make sure you are utilizing the most current form AIR Commercial Real 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V I Fa- Cc ncE 4ffP. Stf.IS SF Loss,t �—_ 21 Uu / °Er cz 15x1961 29zssr 9x 14 .sr Peace . 14 b Pea . Exhibit A FIRST ADDENDUM TO LEASE AGREEMENT THIS ADDENDUM TO LEASE AGREEMENT is entered into by and between the City of Seal Beach ( "City"), and Bill L. Knight, an individual d.b.a. B.L.Knight Electric, Inc. ( "Tenant "), this 1 day of November, 2002. WHEREAS, on or about January 1, 1999, City and Tenant entered into a Lease and Operating Agreement ( "Lease ") whereby Tenant agreed to lease from City those certain Premises commonly described as Old City Hall, Suite 150. WHEREAS, City and Tenant desire to modify, alter or amend certain provisions of said Lease as set forth in this Addendum: NOW THEREFORE, City and Tenant agree as follows: 1. Tenant agrees to extend their Lease from January 1, 2003 to December 31, 2003. 2. The Monthly Rent for the Premises shall be Three Hundred Seventy Six Dollars ($376). Except as expressly modified, altered or amended by this Addendum, all other terms, conditions, and covenants of said Lease shall remain in full force and effect. LESSOR TENANT City of Seal Beach Bill L. Knight dba B.L. Knight Electric, Inc. ` J / BY: i tad. B 1 _' / / I C I Mayor rill L. Knig t p� Date: � ge � /6 / 2 0,2, Date: �� S /