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CUP 2015-0004January 13, 2016 Mr. Patrick Cavanaugh Laser Oasis, LLC. 4712 Admiralty Way, Suite 299 Marina Del Rey, CA 90292 SUBJECT: CONDITIONAL USE PERMIT 2015-0004 LASER OASIS PLANNING COMMISSION ACTION Dear Mr. Cavanaugh: The La Quinta Planning Commission at its meeting of January 12, 2016, approved Conditional Use Permit 2015-0004, subject to the attached Conditions of Approval. This action is final unless appealed by you or another person to the City Council within 15 days of the action. Please contact our department should you wish to appeal. If you have any questions, please contact me at (760) 777-7067. Sincerely, J WUU, AICP Principal Planner 4FLA44-416le CC" 78-495 Calle Tampico i La Quinta I California 92253 1 760.777.7000 1 www.La-Quinta.org Plan submittal Job Site Ad owners I Number, street, or Pt CSI, State, Postal Owner's Phone Nu Owners E4ftH Ad Pr*d Managersl Project Manager's Phone Nu Building Permit Number. PmJect Description: T.I. with minor demo' ] Exempt O (Materials may contain hazardous wastes and are not subject to recycling provisions) Construction Debris Management Plan 46805 Dune Palms Rd. Laser Oasis 4712 Admirelity Way Marina Del Rey, CA 90292 760-695-0196 Dettic:k®Iasero88�.Com Patridc Cavanaugh 760-895-0198 Project Manager's E-md Address) oWc*Alasen=Is.com Bonder / cont" Number, Strest or PO City, State, Postal C Laser Oasis 4712 Admirality Way Marina Del Rey, CA 90292 Project Square Footage 1 16,100 'Exempt due to small scope City Approval By Date of City Approval To Be Discarded: Product Trash Asphalt BrlcWBIock Cardboard Commingled Concrete Drywall Donated / Reuse• *Describe Items Tons ble Product Masonry (broken) Plaster Scrap Metal Tile (floor) Tile (roof) Wood Landscape Debris Tons Totals: Recycle Trash Projected Diversion: 53.8 30.6 1 understand it to the property owner's responsibility to submit copies of weight tickets or receipts to the District Environmental Coordinator as these hauls occur. I hereby certify that completion, Implementation and adherence of the Debris Management Plan (DMP) for the above named project shall guarantee that at least 50% of the joba;<e waste is diverted from IandflBing. The remaining material will be recycled or reused. l will divert, for recycling or re -use, remaining materials generated from the that day of the project through the completion of the project in accordance with this plan. This DMP Is issued in the name of the property owner(s) and shall remain their property throughout the construction and/or demolition project. A contractor serving as agent of the owner may obtain a DMP for the owner. However, the DMP Is still Issued in the name of the property owner(s) and the owner retains legal responsibility for ensuring that the provisions of the DMP are adhered to. The property owner(s) and general contractor shall be kept informed of the diversion progress through bl-monthly re . If self -hauling, all refuse material from this project site must be taken to an approved recycler or transfer [�2Q "kzlt TX3 owner / Dfiveloper / MeCILMenjigir / Superintendent Date file Desert Palm Management Group, LLC PO Box 13082 Palm Desert, CA 92255 Phone: 760-250-7818 October 22, 2015 City of La Quinta 78495 Calle Tampio La Quinta, CA 92253 RE: Authorization Letter for 46805 Dune Palms Road Desert Palm Management Group, LLC is the owner of the property located at 46805 Dune Palms Rd, La Quinta CA 92253. The property is currently. leased by Laser Oasis LLC from Desert Palm Management Group, LLC through a lease agreement for a period of 5 years that will expire on November 30, 2020. Desert Palm Management Group, LLC is in full agreement of the proposed redevelopment to the aforementioned leased property as contained in the attached CUP plans, and grant permission to Laser Oasis LLC to undertake proposed improvements as out tenant. The following conditions outline our understanding; 1. All costs and expenses in connection with design reviews, receiving CUP approval, obtaining agency approvals and building permits shall be the responsibility of Laser Oasis LLC. 2. LaserOasis. LLC_nvill�perfo.rm this wQ_rk_in�a�safe-an lawful manner,usin. 2/10/16, 11:41 AM requirements of Municipal or other governmental bodies and jurisdictions or duly constituted bodies. This compliance shall include the filling of plans and other documents as required, and the procuring of any required licenses or permits at your sole cost and expense. 3. Laser Oasis, LLC has our approval to apply for and receive any necessary permits and approvals from the City of Ia Quinta or any other agency having jurisdiction related to this project. 4. We have reviewed the proposed plans of Laser Oasis, LLC and approve of them. 5. We understand that Laser Oasis, LLC has an agreement with the adjacent property regarding a non-exclusive parking agreement and have no issues with this agreement. https://www.dropboxstatic.com/staticljavascript/external/pdf-js-9e9df56/web/viewer-vflgi4ly6.html Page 1 of 4 file z r 6. We understand that Laser Oasis, LLC will be making an application to the Alcohol and Beverage Commission for an on premises liquor license and have no issues with this application. We are excited to have this tenant moving forward with their proposed improvements and feel it will be an excellent addition to the City of La Quinta. Families and young adults have a need for safe venues in the Coachella Valley and Laser Oasis will provide a great environment for all residents. Please feel free to contact us if -you require any additional information. Desert Palms Management Group LLC. 1enn9#e o-berYs, Manager Date: 10. 11-15 2/10/16,11:41 AM https://www.dropboxstatic.com/static/javascript/external/pdf-js-9e9df56/web/viewer-vflgi4ly6.html Page 3 of 4 0 Fidelity National Title Company 1300 Dove Street, Suite 310, Newport Beach, CA 92660 Phone: (949) 622-50000 Fax: Issuing Policies of Fidelity National Title Insurance Company Title Officer: Keith Masner (MA) Order No.: 997-23071162-KM5 Escrow Officer: Major Accounts OAC TO: Laser Oasis 46805 Dune Palms Road La Quinta, CA 92253 ATTN:.Patrick Cavanaugh YOUR REFERENCE: PROPERTY ADDRESS: 46805 Dune Palms Road, La Quinta, CA PRELIMINARY REPORT In response to the application for a policy of title insurance referenced herein, Fidelity National Title Company hereby reports that it is prepared to issue, or cause to be issued, as of the date hereof, a policy or policies of title insurance describing the land and the estate or interest therein hereinafter set forth, insuring against loss which may be sustained by reason of any defect, lien or encumbrance not shown or referred to as an exception herein or not excluded from coverage pursuant to the printed Schedules, Conditions and Stipulations or Conditions of said policy forms. The printed Exceptions and Exclusions from the coverage and Limitations on Covered Risks of saidpolicy or policies are set forth in Attachment One. The policy to be issued may contain an arbitration clause. When the Amount of Insurance is less than that set forth in the arbitration clause, all arbitrable matters shall be arbitrated at the option of either the Company or the Insured as the exclusive remedy of the parties. Limitations on Covered Risks applicable to the CLTA and ALTA Homeowner's Policies of Title Insurance which establish a Deductible Amount and a Maximum Dollar Limit of Liabilityfor certain coverages are also set forth in Attachment One. Copies of the policy forms should be read. They are available from the office which issued this report. This report (and any supplements or amendments hereto) is issued solely for the purpose of facilitating the issuance of a policy of title insurance and no liability is assumed hereby. If it is desired that liability be assumed prior to the issuance of a policy of title insurance, a Binder or Commitment should be requested. The policy(s) of title insurance to be issued hereunder will be policy(s) of Fidelity National Title Insurance Company, a California Corporation. Please read the exceptions shown or referred to herein and the exceptions and exclusions set forth in Attachment One of this report carefully. The exceptions and exclusions are meant to provide you with notice of matters which are not covered under the terms of the title insurance policy and should be carefully considered. It is important to note that this preliminary report is not a written representation as to the condition of title and may not list all liens, defects and encumbrances affecting title to the land. Countersigned by: Authorized Signature 3'r; CLTA Preliminary Report Form — Modified (11/17/06) Page 1 _ Fidelity National Title Company 1300 Dove Street, Suite 310, Newport Beach, CA 92660 Phone: (949) 622-5000• Fax: PRELIMINARY REPORT EFFECTIVE DATE: September 30, 2015 at 7:30 a.m. ORDER NO.: 997-23071162-KM5 The form of policy or policies of title insurance contemplated by this report is: CLTA Standard Coverage Policy (04-08-14) 1. THE ESTATE OR INTEREST IN THE LAND HEREINAFTER DESCRIBED OR REFERRED TO COVERED BY THIS REPORT IS: A FEE 2. TITLE TO SAID ESTATE OR INTEREST AT THE DATE HEREOF IS VESTED IN: DESERT PALM MANAGEMENT GROUP, LLC 3. THE LAND REFERRED TO IN THIS REPORT IS DESCRIBED AS FOLLOWS: See Exhibit A attached hereto and made a part hereof. CLTA Preliminary Report Form — Modified (11/17/06) Page 2 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 997-23071162-KM5 EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL A OF THAT CERTAIN LOT LINE ADJUSTMENT 02-377 APPROVED BY THE CITY OF LA QUINTA, AS EVIDENCED BY DOCUMENT RECORDED JUNE 14, 2002 AS INSTRUMENT NO. 2002-329122 OF OFFICIAL RECORDS DESCRIBED AS FOLLOWS: A PORTION OF PARCEL 2 OF LOT LINE ADJUSTMENT NO. 99-316, IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, RECORDED JANUARY 27, 2000 AS INSTRUMENT NO. 30493 OF OFFICIAL RECORDS OF RIVERSIDE COUNTY, STATE OF CALIFORNIA, IN THE CITY OF LA QUINTA, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 2; THENCE SOUTHWESTERLY ALONG THE SOUTHERLY LINE OF SAID PARCEL 2, SOUTH 89° 14' 49" WEST, A DISTANCE OF 224.52 FEET; THENCE NORTH 000 52'3 1 " EAST, A DISTANCE OF 164.74 FEET; THENCE NORTH 180 12' 52" EAST, A DISTANCE OF 107.00 FEET TO THE NORTH LINE OF SAID PARCEL 2, ALSO BEING THE CENTER LINE OF CORPORATE CENTER WAY TO THE BEGINNING OF A TANGENT CURVE CONCAVE NORTHERLY AND HAVING A RADIUS OF 500.00 FEET; THENCE SOUTHEASTERLY ALONG THE ARC OF SAID CURVE A DISTANCE OF 160.44 FEET THROUGH A CENTRAL ANGLE OF 180 23' 06" A LINE RADIAL TO SAID CURVE AT SAID POINT BEARS SOUTH 000 10' 14" EAST; THENCE NORTH 890 49'46" EAST, A DISTANCE OF 30.05 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 2; THENCE ALONG THE EASTERLY LINE OF SAID PARCEL 2, SOUTH 000 10' 14" EAST, A DISTANCE OF 238.45 FEET TO THE POINT OF BEGINNING. APN: 600-390-023-3 CLTA Preliminary Report Form — Modified (11/17/06) Page 3 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 997-23071162-KM5 EXCEPTIONS AT THE DATE HEREOF, ITEMS TO BE CONSIDERED AND EXCEPTIONS TO COVERAGE IN ADDITION TO THE PRINTED EXCEPTIONS AND EXCLUSIONS IN SAID POLICY FORM WOULD BE AS FOLLOWS: A. Property taxes, including any personal property taxes and any assessments collected with taxes, are as follows: Tax Identification No.: Fiscal Year: .1 st Installment: Penalty: 2nd installment: Penalty and Cost: Homeowners Exemption: Code Area: 600-390-023-3 2015-2016 $7,761.50 Open (Delinquent after December 10) $776.15 $7,761.50 Open (Delinquent after April 10) $814.78 None Shown 020-026 Prior to close of escrow, please contact the Tax Collector's Office to confirm all amounts owing, including current fiscal year taxes, supplemental taxes, escaped assessments and any delinquencies. B. The lien of supplemental or escaped assessments of property taxes, if any, made pursuant to the provisions of Chapter 3.5 (commencing with Section 75) or Part 2, Chapter 3, Articles 3 and 4, respectively, of the Revenue and Taxation Code of the State of California as a result of the transfer of title to the vestee named in Schedule A or as a result of changes in ownership or new construction occurring prior to Date of Policy. Water rights, claims or title to water, whether or not disclosed by the public records. Reservations and/or provisions contained in the patent from the United States of America. Recorded: July 31, 1905 in Book 3, page 228 of Patents 3. Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document: Granted To: The County of Riverside Purpose: highway Recording Date: May 24, 1933 Recording No: Book 122, Page 374, of Official Records Affects: said land 4. Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document: Granted To: The State of California Purpose: highway slope Recording Date: December 11, 1967 Recording No: 108641, of Official Records Affects: said land Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document: Granted To: The City of La Quinta Purpose: public street and Public utility Recording Date: July 11, 2000 Recording No: 267425 of Official Records Affects: said land CLTA Preliminary Report Form — Modified (11/17/06) Page 4 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 997-23071162-KM5 EXCEPTIONS (Continued) 6. Covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law, as set forth in the document Recording Date: November 21, 2000 Recording No: 466111, of Official Records Said covenants, conditions and restrictions provide that a violation thereof shall not defeat the lien of any mortgage or deed of trust made in good faith and for value. Easement(s) for the purpose(s) shown below and rights incidental thereto as granted in a document: Granted To: Verizon California Inc., a Corporation Purpose: Public utilities Recording Date: March 22, 2004 Recording No: 2004-0198484, of Official Records Affects: said land 8. The Land described herein is included within a project area of the Redevelopment Agency shown below, and that proceedings for the redevelopment of said project have been instituted under the Redevelopment Law (such redevelopment to proceed only after the adoption of the Redevelopment Plan) as disclosed by a document. Redevelopment Agency: La Quinta Redevelopment Agency Recording Date: October 4, 2007 Recording No.: 2007-0619749, of Official Records 9. Matters which may be disclosed by an inspection and/or by a correct ALTA/ACSM Land Title Survey of said land that is satisfactory to this Company, and/or by inquiry of the parties in possession thereof. This office must be notified at least 7 business days prior to the scheduled closing in order to arrange for an inspection of the land; upon completion of this inspection you will be notified of the removal of specific coverage exceptions and/or additional exceptions to coverage. 10. Any rights of the parties in possession of a portion of, or all of, said Land, which rights are not disclosed by the Public Records. The Company will require, for review, a full and complete copy of any unrecorded agreement, contract, license and/or lease, together with all supplements, assignments and amendments thereto, before issuing any policy of title insurance without excepting this item from coverage. The Company reserves the right to except additional items and/or make additional requirements after reviewing said documents. PLEASE REFER TO THE "INFORMATIONAL NOTES" AND "REQUIREMENTS" SECTIONS WHICH FOLLOW FOR INFORMATION NECESSARY TO COMPLETE THIS TRANSACTION. END OF EXCEPTIONS CLTA Preliminary Report Form — Modified (11/17/06) Page 5 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 997-23071162-KM5 REQUIREMENTS SECTION I . Furnish for review a full and complete copy of any unrecorded agreement, contract, license and/or lease together with all supplements, assignments and amendments thereto, prior to the close of this transaction. The Company reserves the right to add additional items or make further requirements after review of the requested documentation. The Company will require the following documents for review prior to the issuance of any title insurance predicated upon a conveyance or encumbrance from the entity named below: Limited Liability Company: Desert Palm Management Group, LLC a) A copy of its operating agreement, if any, and any and all amendments, supplements and/or modifications thereto, certified by the appropriate manager or member b) If a domestic Limited Liability Company, a copy of its Articles of Organization and all amendments thereto with the appropriate filing stamps c) If the Limited Liability Company is member -managed, a full and complete current list of members certified by the appropriate manager or member d) If the Limited Liability Company was formed in a foreign jurisdiction, evidence, satisfactory to the Company, that it was validly formed, is in good standing and authorized to do business in the state of origin e) If less than all members, or managers, as appropriate, will be executing the closing documents, furnish evidence of the authority of those signing. The Company reserves the right to add additional items or make further requirements after review of the requested documentation. Unrecorded matters which may be disclosed by an Owner's Affidavit or Declaration. A form of the Owner's Affidavit/Declaration is attached to this Preliminary Report/Commitment. This Affidavit/Declaration is to be completed by the record owner of the land and submitted for review prior to the closing of this transaction. Your prompt attention to this requirement will help avoid delays in the closing of this transaction. Thank you. The Company reserves the right to add additional items or make further requirements after review of the requested Affidavit/Declaration. END OF REQUIREMENTS CLTA Preliminary Report Form — Modified (11/17/06) Page 6 PRELIMINARY REPORT Fidelity National Title Company Your Reference: Order No.: 997-23071162-KM5 INFORMATIONAL NOTES SECTION 1. None of the items shown in this report will cause the Company to decline to attach CLTA Endorsement Form 100 to an Extended Coverage Loan Policy, when issued. 2. The following information will be included in the CLTA Form 116 or ALTA Form 22-06 Endorsement to be issued pursuant to this order: There is located on said Land: Commercial Known as: 46805 Dune Pahns Road La Quinta, California Note: The policy of title insurance will include an arbitration provision. The Company or the insured may demand arbitration. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, any service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Please ask your escrow or title officer for a sample copy of the policy to be issued if you wish to review the arbitration provisions and any other provisions pertaining to your Title Insurance coverage. 4. Note: There are NO conveyances affecting said Land recorded within 24 months of the date of this report. END OF INFORMATIONAL NOTES Keith Masner (MA)/sd CLTA Preliminary Report Form — Modified (11/17/06) Page 7 AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD INDUSTRIAUCOMMERCIAL SINGLE -TENANT LEASE - NET (DO NOT USE THIS FORM FOR MULTI -TENANT BUILDINGS) 1. Basic Provisions ("Basic Provisions')- 1.1 rovisions-)- 1.1 Parties: This Lease ("foam"), dated for reference purposes only August 21, 2015 Is made by and between DESERT PALM VANAGEMENT GROUP, LLC ("Lassor") and LASER OASIS, LLC a California limited liability company (•1.easea-), (collectively the "Parties," or Individually a "Party"). 12 Premises: That certain real property, Including all improvements therein or to be provided by Lessor under the terms of this Lease, and commonly known as46805 Dune Palms Road, La Quinta located in the County of Riverside State of California and generally described as (describe briefly the nature of the property and, if applicable, the "Pro)eW, If the property Is located within a Project) Single stand alone building ("Premlaes ). (See also Paragraph 2) 1.3 Term: Five years and months ("Original Term-) commencing December 1, 2015 (,commancemecd Date') and ending November 30, 2020 ('Expiration Date'). (See also Paragraph 3) to Early Possession: If the Premises am available Lessee may have nonexclusive possession of the Premises commencing on construction commencement ("Early Possession Date"). (See also Paragraphs 32 and 3.3) 1.6 Base Rent: $16 1�. 00 per month ("Base Rent'), payable on the First day of each month commencing December 1, 2015 (See also Paragraph 4) ® If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph annual 1.6 Base Rent and Other Monies Paid Upon Execution: (a) Base Rent $16,100.00 for the period January 1, 2016 thru December 31, 2016 (b) Security Deposit $16,100.00 ("Seeurity Deposit'). (Sea also Paragraph 6) (c) Association Fees: $ for the period . (d) Other. $ for (e) Total Due Upon Execution of this Lease. $32, 200.00 see addendum 1.7 Agmed use: Laser tag course, cafe with liquor, arcade games, rope course, laser maze, rock climbing wall and Qarty rooms for rent (See also Paragraph 6) 1.8 Insuring Party: Lessor is the Insuring Party, unless otherwise stated herein. (See also Paragraph 8) 1.9 Real Estate Brokers: (See also Paragraph 18 and 25) (a) Representation: The following real estate brokers (the "Brokers') and brokerage relatlmrehlps exist in We transaction (check applicable boxes): . ® RW COMMLRCIAL represents Lessorexdusiv* ("Lessors Broker'); OR. G. REORDAN INC. represents Lessee exclusively ("Lessee's Broker); or ❑ represents both Lessor and Lessee ("Dual Agency-). (b) Paymerd to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers for the brokerage services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attacked. the sum of or six (6$) % of the total Base Rent payable for the Original Term, the sum of or of the total Base Rent payable during any period of time that the Lessee occupies Ole Premises subsequent to the Original Term, and/or the sum of or % of the purchase price In the event that the Lessee or anyone affiliated with Lessee aoqufres from Lessor any rights to the Premises. 1.10 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by ("Guarantor). (See also Paragraph 37) 1.11 Attachments. Attached hereto are the following, all of which constitute a pan of this Lease: Q' an Addendum consisting of Paragraphs A through G 0 a plot plan depicting the Premises; H a artmnt set of the Rules and Regulations; ❑ a Work Letter; ❑ other (specify): 2. Premises. 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Remises, for the term, at the ref7a PAGE 1 OF 17 INTTIAI S INITIALS 02001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM BTM -133110E .upon all of the terms, covenants and cortMons set forth In this Lease. While the approximate square footage of the Premises may have been used In the marinating of the Premises for purposes of comparison, the Base Rent stated herein Is NOT lied to square footage and is not sub%ect to adjus"ant should the actual size be determined to be different. Note: Lessee Is advised to verily the actual size prior to executing this Lease. 22 Condition. Lessor shall deliver the Premises to Lessee broom dean and dee of debris on the Commencement Data or the Early Possession Date, whichever first occurs ('Start Date'• and, so long as ft required service contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date. warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning system CWAC"), loading doors, sump lumps, if any, and all other such elements In the Premlaes, other than those constructed by Lessee, shall be in good operating condition on said date, that the structural dements of the roof, bearing wells and foundation of any buildings on the Premises (the "Building'") shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or federal law. If a noncompliance with said warranty exists as of the Start Data, or H one of such systems or elements should maifunrbon or fail within the appropriate warranty period, Lessor shall, as Lessors sole obligation with reaped to such matter; except as otherwise provided In this Lease, promptly after receipt of written notice from Leasee setttrrg forth with specificity the nature and extent of such non-compliance, maHorction or failure, rectify same at Lessors expense. The warranty periods shall be as follows: n 6 months as to the HVAC systems, and (9) 30 days as to the remaining systems and other dements of the Building. H Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such noncompliaroe, malfunction or failure shall be the obligation of Lessee at Lessees sole cost and expense. 2.3 Compliance. Lessor warrants that to the best of Its knowledge the Improvements on the Premises comply with the buildkng codes. applicable laws, covenants or restrictions of record, regulations, and ordinances ("Applicable Requirements") that were In effect at the time that each improvenerd, or potion thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modifiralkim which may be required by the Americana with Disabilities Act or any similar laws as a result of I essee s use (see Paragraph 50), or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee Is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee`s intended use, and adorowledges that past uses of the Premises may no longer be allowed. H the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such noncompliance, rectify the same at Lessors expense. if Lessee does not give Lessor written notice of a noncompliance with this warranty within 6 months following the Start Date. correction of that nonCOmipliance shag be the obligation of Lessee at Lessee's sole cost and expense. If to Applicable Regulrements are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Premises arta/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Unit, Remises and/or Building ("Capital Expenditure, Lessor and Lessee shag allocate the cost of such work as follows: (a) Subject to Paragraph 2.3(c) below, If such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shag be fully responsible for the cost thereat, provided, however that H such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 8 months' Base Rent, Losses may Instead terminate Oft Lease unless Lessor notifies Lessee, in waiting, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the difference between the actual cost thereof and an amount equal to 8 months' Base Rent H Lessee elects teminatton. Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to lessor written notice specifying a termination date at least 90 days thereafter. Such temdnation date shell, however, In no event be earlier than the tact day that Lessee could legally utilize the Premises without commencing such Capitol Expenditure. (b) H such Capital Fxpenditin Is not the result of the specific end unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay for such Capital Expenditure and Leasee shag only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the data that on which the Base Rent Is due, an amourd equal to Ill 44th of the potion of such costs reasonably attributable to the Premises. Lessee shag pay Interest on the balance bid may prepay its obligation at any time. If, however, such Capital Expenditure Is required during the last 2 years of this Lease or H lessor reasonably determines that it Is not economically feasible to pay its share thereof, Lessor shag have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after receipt of Lessors temhination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fags to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent until Lessor's share of such costs have been fully paid. if Lessee Is unable to finance Lessors share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shag have the right to terminate this Lease upon 30 days written notice to Lessor. (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to nonvoluntary, unexpected, and new Applicable Requirements. If the Capitol Expenditures are Instead triggered by Lessee as a result of an actual or proposed charge in use, large in Intensity of use, or modification to the Remiees then. and In that evert; I essee.shall either. m Immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (0) complete such Capital Expenditure at its own expense. Lessee shag not, however, have arty right to terminate this Lease. 24 Acknowledgements. Lessee admowledges that her been a"sed by 6esse; arAfe; RFake;e to salisly belf vft ;aspect to the size - Famises endoing but Rat firAked ta the alostrisal D es Act)rand Coir suitability for Lessee's intended use, (c) Lessee has made such Investigation as H deems n ooeasary with reference to such maters and assumes all responsibility therefor as the sane rebate to its occupancy of the Premlaes, (d) It is not retying on any representation as to the size of the Prennises made by Brokers or Lessor, (e) the square footage of the Premises was not. material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor. Lessors agents. nor Brokers have Trade any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor adcowtedges that 0 Brokers have made no representations, promises or warranties concemfrg Lessee's ability to honer the Lease or suitability to occupy the Premises, and (u) if is Lessors We responsibility to Investigate the financial capability and/or wi ability of all proposed tenants. 2-5 Lessee as Prior OwnerlOccupant The warranties made by Lessor in Paragraph 2 shag be of no force or effect H Immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shag be responsible for any necessary corrective work. PAGE 2 OF 17 IMMALS INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN -133110E 3. Torte. 3.1 Term. The Commencement Date, Expiration Date and Original Tenn of this Lease are as specified in Paragraph 1.3. 32 Early Possession. Arty provision herein granting Lessee Early Possession of the Premises is subject to anal conditioned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exdustva right to occupy the Premises. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated for the.pedod of such Early Possession. M other terms of this Lease (including but not limited to the obligations to pay Real Property Taxes and insurance premiums and to maintain the Premises) shall be In effect during such period. Any such Early Possession shag not affect the Expiration Date. 3.3 Delay In Possesslom Lessor agrees to use its beat commercially reasonable efforts to deliver possession of the Premises to Lessee by tihe Commencement Date If, despite said efforts. Lessor Is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or change the Expiration Date. Lessee shag not, however, be obligated to pay Rent or perform Its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that lessee would otherwise have enjoyed shall run from the date of derNM of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by to ads or omissions of lessee. If possession Is not delivered within 60 days atter the Commencement Data, as the same may be extended under the terms of any work Letter executed be Parties or a delay In receiving the CUP from the City of La QUinta, Lessee may, at Its optimk, by notice In writing within 10 days after the end of such 60 day period, cancel this Lease, in wtdch event the Parties shag be discharged from all obligations hereunder. If such writen notice Is not received by Lessor within said 10 day period, Lessee's rightto canoe) shhailterminate. if possession of the Premises Is not delivered within 120 days atter the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee. in writing. 3A , Lessee Compliance. Lessor shall not be required to deriver possession of the Premises to Lessee until Lessee complies with its obligation to provide evidence of Insurance (Paragraph 8.6). Pending delivery of such evidence, Lessee shall be required to perform all of he obligations under this Lease from and after the Start Date, including the payment of Rent notwithstanding Lessor's election to withhold possession pending receipt of such "dance of insurance. Further, if Lasses is required to perform any other conditions prior to or conarrtent with the Start Date, the Start Date shag occur but Lessor may elect to withhold possession until such conditions are satisfied. 4. Raft 4.1. Rent Defined All monetary obligations of Lessee to Lessor under the terms of tihis Lease (except for the Security Deposit) are deemed to be rent ("Renrl. 42 Payment Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without onset or deduction (axcepl as specifically permitted in this Lease), on or before the day on which it Is due. Ail monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lamar is inaccurate such Inaccuracy shag not constitute a waterer and Lessee shall be obligated to pay the amount set forth In this Lease. Rent for any period during the term hereof which Is for lase than one fug calendar month shall be prorated based upon the actual number of days of said month. Payment of Rem shall be made to Lessor at its address stated herein or to such other persona or place as Lessor may from time to time designate In writing. Acceptance of a paymentwhich Is less than the -amount than due shall not be a waiver of Lessor's rights to the balance of such Rem, regardless of lessors endorsement of any check so stating. In the event that any check, drag or other Instrument or payment given by Lessee to Lessor Is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $28 In addition to any Labe Charge and lessor, at its option, may require all future Rent be paid by cashiers check Payments will be applied first to accrued late charges and attorneys fees, second to accrued Interest then to Base Rem, Insurance and Real Property Taxes, and any remaining amount to any other outstanding charges or costs. 4.3 Association Fees 6. Security Deposit (Also ecce Addendum) Leasee shall deposit with Lessor upon execution hereof the Security Deposit as security for lessee's faithful performance of Its obligations under this Lease. If Lasses fags to pay Recdt or otherwise Defaults under this Lease, Lessor may use, apply or retain all or arty portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which wig be due In the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or Incur by reason thereof. If Lessor uses or applies an or any porton of the Security Deposit, Lessee shag within 10 days after written request therefor deposit manias With Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this lease, leasee shag, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the Increased Base Rent as the initial Security Deposit tore to the Initial Base Rent Should the Agreed Use be amended to accommodate a material charge in the business of Lessee or to accommodate a sublessee or assignee, lessor shag have the right to Increase the Security Deposit to the extent. necessary, in Lessors reasonable judgment to account for any Increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such lenge the financial condition of Lessee Is, In Lessors reasonable judgment, signiflranty reduced, Lessee shag deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level !based on such change in financial condition. Lessor shag not be required to keep the Security Deposit separate from Its general accounts. Within 90 days after the expiration or terrydnation of this Lease, Lessor shag return that portion of the Security Deposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held In trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. 8. Use. 6.1 Use. Lessee shall use and occupy the Premises arty for the Agreed Use, or arry 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 dishubs occupants of or causes damage to neighboring premises or properties. Other than guide, -signal and seeing eye dogs. Lessee shell not keep or snow in the Premises any pets, animals. birds, 5sh, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the mechanical or electrical systems therein. andfor Is not significantly mora burdensome to the Premises. If Lessor at to withhold consent Lessor shall withIn 7 days after such request give writer notification of same, which notice shall include an explanation of Lessors objections to lie, /chang ��PAGE 3 OF 11 iNIT1ALS INITIALS O1 - AIR COMMERCIAL REAMSTATE ASSOCIATION FORM STKA 8.3H 0E the Agreed Use. 62 Hazardous Substances. (a) Reportable Uses Require ConserR The term 'Hazardous Substance" as used In this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by Itself or In combination with other materials expected to be on the Premises. is either n potentially Injurious to the public health, safety or welfare, the environment or the Premises, (0) regulated or monitored by any governmental authority, or m a basis for potential Oats ft of Lessor to any governmental agency or third parry under any applicable statute or common Law theory. Hazardous Substances shag include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shag not engage in any activity in or on the Premises which constf rtes a Reportable Use of Hazardous Substawithout the gess prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use shag mean 01 the Installation or use of any above or below ground storage tank. 0 the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report. notice. registration or business plan is required to be filed with, any governmental authority, and/or nm7 the presence at the Premises of a Hazardous Substance % th respect to wAhidh any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, ordinary office supplies (copier toner. liquid paper, glue, eta) and common household cleaning materials. so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itsetf, the public, the Premises and/or the environment against damage, contartdnaton, injury and/or liability, including. but not limited o, the installation (end removal on or before Lease erpiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shag Immediately give written notice of such fad to Lessor, and provide tassor with a copy of any report, notice, dabs or other documentation which It has concerning the presence of such Hazardous (e) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises nndudirg through the plumbing or sanitary sewer system) and shag promptly, at Lesses's expense, comply with all Applicable Requirements and take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of any cordamination of, and for the marthtenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or Involving any Hazardos Substance brought am the Premises during the term of this Lease, by or for Lessee, or any third party. (d) Lessee Indemnification Lessee shall indemnify, defend and hold Lessor, its agents, employees, larders and ground lessar, If any, hamdess from and against any and all loss of rents and/or damages, gabgities, judgments. debris, expenses, penalties, arm attorneys' and consultants! fees arising out of or Involving any Hazardous Substance brought onto The Premises by or for Lessee,' or arty third party (provided, homver, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shag include, but not be limited to. the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediadon, restoration and/or abatement, and shall surAve the expiration or tertNnation of this Lease. No tarminaton, cancellation or release agreement entered into by Lessor and Lessee shall release lessee from its obligations under this, Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement (e) Lessor lydemnWxatlon Lessor and its successors and assigns shall Indemnify, defend, reimburse and told Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lassoes obligations, as and when required by the Applicable Requirements, shall Include. but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shag survive the expireticn or tertnlnadon of this Leges. (f) Investigations and Remedletions. Lessor shall retain the responsibility and pay for arry Investigations or remediation measures requited by governmental arMes having jurisu9ction with rasped to the existence of Hazardous Substances on the Remises prior to Lessee's occupancy, unless such remediation measure Is required as a result of Lessee's use (Including 'Afteretons', as defined in paragraph 7.3(a) below) of the Premises, In which ever Lessee shag be responsible for such payment. Leasee shall cooperate fully In any such actvltes at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable times in order to terry out Lessor's investigative and remedial responsibilities. (g) Lessor Termination Option If a Hazardous Substance Condition (see Paragraph 6.1(a)) occurs during the term of this Lease, unless Lessee is legally response therefor On which case Lessee shay make the Investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue In fid force and effect, but subject to Lessor's rights under Paragraph 62(d) and Paragraph 13), Lessor may, at Lassoes option, either () investiga)e and remediate such Hazardous Substance Condition, N required, as soon as reasonably possible at Lassoes expense, in which event this Lease shag continue in full force and effect, or n if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rem or $100.000, whichever Is greater, give writtan notice to Lessee, within 30 days after receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of lessors desire to terminate this Lease as of @re date 60 days following the date of such notice. In the event Lessor Pieta to give a termination notice, I asses may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment to pay the amount by which the cost of the temeftdori of such Hazardous Substance Condition exceeds an amount equal to 12 Imes the then monthly Base Rem or $100,000. whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment In such event, this Lease shag continue in full force and effect and Lessor.shall proceed to make such remediation as soon as reasonably possible after 0% required funds are available. If Lessee does not give such notice and provide the required funds or assurance Thereof wthin the time provided, this Lease shag terminate as of the data specified in Lassoes notice of termination. 63 Lessee's Compliance with Applicable Requirements Except as olherwise provided in this Lease. Lessee shall, at Lessee's sole expense, tiny, diligently and In a timely manner, mater" comply with all Applicable Requirements, the regWrernems of arty applicable fire PAGE d OF 17 INITIALS 92001 -AIR COMMERCULL REAL ESTATE ASSOCIATION FORM STN -133110E irisuaance underwriter or rating bureau, and the recommendations of Lessors engineers and/or consultants which relate In any manner to the such Requirements, without regard to whether such Requirements are now in effect or become effective after the Start Date. lessee shaiL wM do 10 days after receipt of Lessor's written request, provide Lessor with copies of all permits and other documents, and other Information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor. and shag immediately upon receipt notify Lessor In writing (with copies of any documents involved) of any threatened or actual claim, notice, cation, warning, complatnt or report pertaining to or involving the fallure of Lessee or the Premises to comply with any Applicable Regtdrertents. Likewise. Lessee stall immediately give %mitten notice to Lessor of W any water damage to the Promises and any suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (Ii) any mustiness or other odors that might Indicate the presence of maid in the Premises. 8.4 Inspection; Compliance. Lessor and LessoPs 'Lender" (as defined in Paragraph, 30) and consultants shag have the right to enter Into Prerrdses at any time, In the ease of an emergency. and otherwise at reasonable times after reasonable notice. for the purpose of Impacting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, ants, or a Hazardous Substance Condition (see paragraph 9.1) Is found to exist or be imminent, or the Inspection is requested or ordered by a govemmentst authority. In such case. Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or eorrtaminelbn. in addition. Lessee shall provide copies of all relevant material safety data steels (MSDS) to Lessor within 1 o days of the receipt of a written request therefor, 7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Akerations. 7.1 Leasews Obligations. (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 8.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation). Lessee shag, at Lessee's sole expense, keep the Premfses. Utility installations (Intended for Lessee's exclusive use, no matter where located), and Alterations In good order, condition and repair (whether or not the portion of the Premises requiring repairs. or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such potion of the Premises), Including, but not limited to, all equipment or facilites, such as plumbing, HVAC equipment, electrical, fighting facilities, Wars, pressure vessels, fire protection system. fxtur es, wells (Interior and extedof). foundations, ceilings, roofs, roof drainage systems. floors, windows, doors. plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in. on, or adjacent to the Premises. Lessee, in keeping the Premises in good order, condition and repair, shag exercise and perform good maintenance practices, specifically Including the procuement and maintenance of the service contrails required by Paragraph 7.1(b) below. Lessee's obligations shag Include restorations, replacements or renewals %then necessary to keep the Premises and all improvements thereon or a part thereof In good order, condition and state of repair. Lessee shall, during the term of this Lease, keep the exterior appearance of the Building in a flistdass condition (Including, e.g. graffiti removal) consistent with the exterfor appearance of other simffar facilities of comparable age and sine in the vicinity. Including, when necessary. the exterior repainting of the Building. (b) Service Contracts. Lessee shag, at Lessee's sole expense, procure and maintain contracts. with copies to Lessor, in customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and Improvements, if any, If and when installed on the Premises: () HVAC equipment, (i) boffer, and pressure vessels, (g) fire extinguishing systems, including fire alarm andfor smoke detection. (M landscaping and Irrigation systems. (v) roof covering and drains, and (v) clarifiers. However. Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof. (c) Failure to Perform. If Lessee falls to perform Lessee's obligations under this Paragraph 7.1, Lessor may enter upon the Premises atter 10 days' prior written notice to Lessee (except In the case of an emergency, in which case no notes shelf be required). perform such obligations on Lessee's behalf, and put the Remises In good order, condition and repair, and Lessee shag promptly pay to lessor a sum equal to 115% of the cost thereof. (d) Replacement Subject to Lessee's Indemnification of Lessor as set forth In Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessees failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired other than at a cost which Is in excess of 50% of the cost of replacing such item, ten such hem shag be replaced by Lessor, and the cost thereof shag be prorated betwo m the Parties and Lessee shag only be obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rend is due. an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which Is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest on the unamortized balance but may prepay Ila obligation at any time. 72 Lessor's Obligations. Subject to the provisions of Paragraphs 22 (Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation, in any manner w hatwever, to repair and maintain the Premises, or the equipment therein, all of which obligations are Intended to be that of the Lessee. It is the intention of the Parties that the terms of this Lease govern the respective obligations of the Partes as to maintenance and repair of the Premises, and they expressly waive, the benefit of any statute now or hereafter in effect to the extent it is Inconsistent with the terms of this base. 7.3 Utility tnstallation s; Trade Fixtures; Alterations. (a) Definitions The term Wily Installations' refers to all floor and window coverings, air and/or vacuum lines, power panels, electrical distribution. security and fire protection systems, communication cabling, fig" fixtures. HVAC equipment plumbing, and fencing In or on the Premises. The term "Trade Fixtines shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term 'Alterations' shag mean any modification of the improvements, other than UUW Installations or Trade Fixtures, whether by addition or deletion. 'Lessee Owned Alterations and/or Utmty Irstaflations' are defined as Alterations and/or Utility Installations made by Lessee that am not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent Lessee may, however. make non-structural Alterations or Utifdy installations to the Interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they am not visible from the outside, do not involve puncturing, relocetirg or removing the roof or any axdstUg wags, will not affect the electrical, plumbing. HVAC, and/or rite safety systems, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 months ease Rent in to aggregate or a stmt equal to one mordh's Base Rend in any one year. NoWhstarding the PAGE 5 OF 17 IWfTiAL S =001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM ST16-1331`19E fcragoirg, Lessee shag not make or permit any roof penetrations and/or Install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granUm such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent shag be deemed condi ioned upon Lessee's: n acquiring all applicable governmental permits, (g furnishing lessor with copes of both the permb and the pans and specifications prior to commencement of the work, and R compliance with all conditions of said pemrits and other Applicable RequirenmMs In a prompt and expeditious manner. Any Alterations or Utility Installations shag be performed in a workmanlike manner with good and sufficient materials. Lessee shag promptly upon completion furnish Lessor with as-bugt plans and specifications. For work which costs an amount In excess of one month% Base Rent, Lessor may condition its consent upon Lessee providing a gen and completion bond in an amount equal to 150% of the estimated cost of such Alteration or UkTdy Installation andlor upon Lessee's posting an additional Secrlty Deposit with Lessor. (c) Liens; Bonds. Lessee shall pay. when due, all daims for labor or materials furnished or alleged to have been fumdshed to or for Lessee at or for use on the Premises, which cairns are or may be secured by any mechanics or matarialmen's Ilen against the Premises or any Interest therein. Lessee shag give Lessor not less than 10 days notice prior to the commencement of any work In, on or about the Premises, and Lessor shall have the right to post notices of non -responsibility. If Lessee shag contest the validity of any such lien, claim or demand, then Lessee shag, at its sole expense defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment flat maybe rendered thereon before the enforcement thereof. If Lessor shag require, Lessee shag furnish a surety bond in an amount equal to 150% of the amount of such contested gen, claim or demand, indeffirWng Lessor against liability for the same. If Lessor elects to participate In any such action, Lessee shag pay Lessor's attorneys' fees and costs. 7.4 Ownership; Removal; Surrender; and Restoration. (a) Ownership. Subject to Lessors right to require removal or elect ownership as hereinafter provided. all Alterations and Utility Installations made by Lessee stall be the properly of Lessee, but considered a part of the Prentlses. Lessor may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise Instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utgily Installations shall, at the expiration or termination of this Lease, become the property of Lessor amt be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of written notice from Lessor riot eaAier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed, by the expiration or temdnatlen of this Lease. Lessor may require the removal at any lire of all or any part of any Lessee Owned Alterations or Utility irstaflations made without to required consent (c) Surrender, Restoration, Lessee shall surrender the Premises by the Expiration Date or any earlier terrMnation date, with all of the improvements, parts and su son l creel broom clean and free of debuts, and in good operating order, condition and state of repair, ordinary wear and tear excepted. 'Ordinary wear and tear' shag not include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing. O this Lease Is for 12 months or lose, Olen Lessee shag surrender the Premises In the same condition as delivered to Lessee on the Start Date with NO agowance for ordinary wear and tear. Leasee shag repair any damage oomstoned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations ardor Utility Installations, furnishings, and equipment as well as the removal of any storage tank Installed by or for Lessee. Lessee shag completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground m gradon from areas outside of the Premises) even if such removal would require Lessee to perform or pay for work tat exceeds statutory requirements. Trade Fixtures shag remain the property of Lessee and shag be. removed by Lessee. Any personal property of Lessee net removed on or before the Expiration Date or any earlier temrination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7A(c) vulthout the express written consent of Lessor shag constitute a holdover under the provisions of Paragraph 28 below. 8. Insurance; Indemnity. 8.1 Payment For Insurance. Lessee shag pay for all Insurance required under Paragraph 8 except to the extent of the coat attributable to liability bnsuaance carried by Lessor under Paragraph I2(b) in excess of $2,000,000 per occurrence. Premiums for policy periods commencing prior to or extending beyond the Lease term shall be prorated to correspond to the Lease tern. Payment shall be made by Lessee to Lessor within 10 days following receipt of an Invoice. 82 Liability Insurance (a) Carried by Lessee. Lessea shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily Injury, personal injury and property damage based upon or arising out of the ownership. use, occupancy or maintenance of Oe Premises and all areas appurtenant thereto. Such Insurance shag be on an occurrence basis providing single limit coverage N an amount not less than $1,000.000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shag add Lessor as an additional Insured by means of an endorsement at least as broad as the Insurance Service Organization's `Additional Insured -Managers or Lessors of Premises' FJdorsememt The policy shag not contain any intra -Insured exclusions as between insured persons or organizations, but shag Include coverage for liability assumed under this Lease as an 'Insured contraer for the performance of Lessee's Indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shag provide an endorsement on its liability pegcy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shag be considered excess insurance only. (b) Carried by Lessor. Lessor shag maintain liability Insurance as described in Paragraph 8.2(a), In addition to, and not in lieu of, the Insurance required to be maintained by Lessee. Lessee shag not be named as an additional Insured therein. I 8.3 Property Insurance - Building, Improvements and Rental Value (a) Building and Improvements. The Insutrg Party shall obtain and keep in force a policy or policies in the name of Lessor, with loss payable to Lessor, any groundaessor, and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full insurable replacement cost of the Premises, as the same shall exist from time In time, or the amount required by any Lender, but in no evert more than the commercially reasonable and available Insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fbdures, and Lessee's personal property shag be Insured by Lessee not by Lessor. If to coverage L1 available and commercially appropriate, such policy or policies shag hhsure against all risks of direct physical loss or damage (except this perils of flood and/or earthquake unless required by a Lender), Including PAGE 8 OF 17 j INfTLAI B INITIALS @001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN-13J110E coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shag also contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation, and imiation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for AD Urban Consumers for the dry nearest to where the Premises ere located_ N such insurance coverage has a deductible clause. the deducible amount shag not exceed 55,000 per occurrence, and Lessee shag be liable for such deductible amount In the event of an Insured Loss. (b) Rental Vacua The Insuring Party shall obtain and keep In force a policy or policies In the name of Lessor with loss payable to Lessor and arty Lender. InsuAng the loss of the h9l Rent for one year with an extended period of indemnity for an additional 180 days (Rental Value insurance"). Said insurance shag contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be gable for any deductible amount in the event of such loss. 8.4 Lessee's Property; Business Interruption Insurance; Workers Compensation Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage an all of Lessee's personal property, Trade Fixtures, and Lessee Owned Alterations and Ub"gty Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed s1,G0 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and lessee Owned Alterations and Utility Installations. Lessee shag provide Lessor With written evidence that such insurance is In force. (b) Business Interruption Lessee shag obtain and maintain loss of Income and extra expense insurance In amours as will reimburse Lessee for direct or incised loss of earnings attributable to all perils commonly Insured against by prudent lessees In the business of Lessee or attributable to prevention of access to the Premises as a result of such peels. (c) Workers Compensation Insurance. Lessee shag obtain and maintain Workers Compensation Insurance In such amount as may be required by Applicable Requirements. (d) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of Insurance specfied herein are adequate to cover Lessee's property, business operations or obligation under this lease, 8.5 Insurance Policies insurance required herein shall be by companies maintaining during the policy tens a "General Policyholders ReW of at least A, VII, as set forth in the most current Issue of 'Bests Insurance Guide", or such other rating as may be required by a Lender. Lessee shall not do or permit to be done anything which Invalidates the required insurance policies. Lessee shall, prior to the Start.Date, deliver to Lessor certified copies of policies of such insurance or certificates with copies of the required endorsements evidencing the existence and amounts of the required Insurance. No such policy shag be cancelable or subject to modification except after 30 days prior written notice to Lessor. tosses shag, at least 10 days prior to the expiration of such policies, furnish lessor with evidence of renewals or 'insurance binders' evidencing renews! thereof, or Lessor may order such insuranee and charge the cost thereof to Lessee, which amount shall be payable by Lessee to lessor upon demand. Such policies shag be for a term of at least one year, or Orae length of the remaining term of this Lease, whichever is less. If either Party shall fag to procure and maintain the insurance required to be carried by It the other Party may, but shag not be required to, procure and maintain the same. 8.8 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each -hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to Its property arising out of or Incident to the perils required to be Insured against herein. The effect of such releases and waivers Is not limited by the amount of Insurance carded or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance canters waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be. so long as the Insurance is not invalidated thereby. 8.7 Indemnity. Except for Lessor's gross negligence or wgIM misconduct, Lessee shag Indemnify, protect, defend and hold harmless the Premises. Lessor and its agents. Lessors master or ground lessor, panders and Lenders, from and against any and all claims. loss of rents and/or damages, hens. judgments, penalties. aitomeys' and consultants' fees, expenses and/or liabilities arising out of, involving, or In connection with, the use and/or occupancy of the Premises by Lessee. if any action or proceeding ts.brought against Lessor by reason of any of the foregoing mattism. Lessee shag upon notice defend the as= at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee to such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or Its agents, neither Lessor nor its agents shag be liable under any ciraunstances for. (p injury or damage to the person or goods, wares, merchandise or other properly of lessee. Lessee's employees, contractors, invitees, customers, or any other person In or about the Premises, whether such damage or Injury Is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes. fire sprinklers, wires, appliances, phmmbig. HVAC or lighting fixtures, or from any other cause, wlhelher the said Injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or from other sources or places, I any damages arfsig from any ad or neglect of any other tenard of Lessor or from the faille of Lessor or its agents to enforce the provisions of and other lease in the Project, or (I>) Injury to Lessee's business or for any loss of income or profit therefrom. Instead, it Is handed that Lessee's sole recourse In the event of such damages or injury be to file a claim on the insurance poticy0es) that Lessee Is required to maintain pursuant to the provisions of paragraph 8. 8.9. Failure to Provide Insurance. Lessee admowledges that any falure on his par to obtain or maintain the Insurer= required herein will expose lessor to Asks and potentially cause Lessor to Incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or porion thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or certificates evidencing the existence of the required insurance. the Base Rend shag be automatically increased, without any requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100. whichever is greater. The partes agree that such increase in Base Rend represents fair and reasonable compensation for the additional risk/costs that Lessor will Incur by reason of Lessee's failure to maintain the required Insurance. Such increase In Base Rem shag in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease. PAGE 7 OF 17 lam/ INRiAL.S INITIALS ®2001 -AIR COMMERCiAL REAL ESTATE ASSOCIATION FORM STN-139HOE 9. Damage or Destruction. 9.1 Detlnttora. (a) "Premises Partial Damage" shall mean damage or destruction to the Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor shag no* lessee in writing within 30 days from the date of Ua damage or destruction as to whether or not the damage is Partial or TOtaL Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar Items which Lessee has the responsibility to repair or replace pursuant to the provislore of Paragraph 7.1. (b) "Premises Total Destruction- stain mean damage or destruWon to the Premises, other than Lessee Owned Alterations and Utility installations and Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the date of the damage or desbuWom lessor shag notify Lessee In writhe within 30 days from the date of the damage or destruction as to whether or not the damage Is Partial or Total. (c) 'insured Loss" shag mean damage or destruction to Improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the Insurance described in Paragraph 8.3(a), irrespeWve of any deductible amounts or coverage limits Imrolved. (d) 'Replacement Cost" shag mean the cost to repair or rebuild the Improvements owned by Lessor at the time of the occurrence to thei condition existing immediately prior thereto. including demolition, debris removal'and upgrading required by the operation of Applicable Requirements, and without deduction for depredation. (e) "Hazardous Substance Condition' shall mean the occurrence or discovery of a condition involving the presence of. or a contamination by. a Hazardous Substance, In, on, or under the Premises which requires remadiaUon. 92 Partial Damage - insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (bid not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shag continue in full force and effect; provided, however, that Lessee shag, at Lessors election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, arid. N such award, Lessor shall make arty applicable Insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, 9 the required Insurance was not In force or the Insurance proceeds are not sufgderd to effect such repair, the Insuring Party shag promptly contribute the shortage in proceeds (except as to the deductible which Is Lessee's responsibility) as and when required to complete said repairs. in the event, however, such shortage was due to the tact that, by reason of the unique nature of the improvements, fug replacement cast Insurance coverage was not commercially reasonable and avallablui, Lessor shag have no obligation to pay for the shortage in Insurance proceeds or to tidy restore the unique aspects of the Premises urdess Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, Within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period. the pay responsible for melting the repairs shall complete them as soon as reasonably possible and this Lease shag remain in incl force and effect If such ttmds of assurance are not received, lessor may nevertheless elm by written notice to lessee within 10 days thereafter to: m make such restoration and repair as Is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shag remain in fug force and effect, or 0Q have this,Lease terrdnate 30 days thereafter. lessee shall not be entitled to r lmbutsenent of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to good or earthquake shall be subject to Paragraph 9.3, nobvghstandhtg that there may be some Insurance coverage, but the net proceeds of any such Insurance shag be made available for the repairs if made by either Pay. 92 Partial Damage - Uninsured toss, If a Premises Partial Damage that Is not an Insured Loss oomns, unless caused by a negligent or uwllfil act of Lessee can which event Lessee shall make the repairs at Lessee's expense), Lessor may either. () repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shag conUtae In fug force and effect, or 00 terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of lanowledge of the occurrence of such damage. Such termination shall be effective 60 days following the date of such notice. In the evert Lessor elects to terminate this Lease, Lessee shag have the right within 10 days after recelpt of the temdnation notice to give written notice to lessor of Lessee's commitment to pay for the repair of such damage without relmbureanent from lessor. Lessee shall provide lessor with said funds or satisfactory assurance thereof within 30 days after matdng such commitment. In such event this lease shag continue in fill force and of ec, and Lessor shall .proosed to make such repairs as soon as reasonably possible atter the required fiuds are available. If Lessee does not make the required commitment, this Lease shag tertNnato as of the data spedfied'In the termination notice. 9.4 Total Destrualom Not ftstanding any other provision hereof, If a Premises Total Destruction occurs, this Lease shag terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or Willful misconduct of Lessee, Lessor shall have the right to recover Lessors damages from Lessee, except as provided In Paragraph 8.8. 9.6 Damage Near End of Term. If at any time during the last 8 months of this Lease there Is damage for which the cost to repair exceeds ane month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 80 days following the data of occurrence of such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, If Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may preserve this lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (I) the date which is 10 days after Lessee's receipt of Lessors vaitten notice ptaportlng to terminate this Lease, or (i) the day prior to the date upon which such option expires. If lessee duty exercises such option during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in Insurance Proceeds. Lessor shag, at Lessors commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in hail force and efted, If Lessee fab to exercise such option and provide such funds or assurance durinng such period, tan this Lease shag terminate on the data specified in the termination notice and Lessee's option shall be extinguished. 9.6 Abatement of Rent; Lessee's Remedies. (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which lessee is not responsible under this Lease, tis Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shag be abated in proportion to the degree to Mich Lessee's use of the Premises Is Impaired. but not to exceed the proceeds received from the Rental Value Insurance. Ali other obligations of Lessee hereunder shag be performed by Lessee, and Lessor shag have no liability for any such damage: destruction, remedblUon, repair or restoration except as provided herelm (b) Remedies. If Lessor Is obligated to repair or restore the Premises and does not commence, in a substar hat and meaningful PAGE 8 OF 17 INITIALS 02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN-I34HOE v'ray, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration, give written notice to Lessor arta to arty Lenders of wtdch Lessee has actual notice, of lassee's election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days thereafter, this lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shag continue M fuA force and etfed 'Commence' shall mean either the unconditional authorisation of the preparation of the required plans, or the beginning of the areal work an the Premises, whichever first occurs. 9.7 Termination; Advance Payments. Upon termination of this Lease pursuent to Paragraph 5.2(g) or Paragraph 9, an equitable adjustment shag be made cencemfrg advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Socially Deposit as has not been, or Is not then required to be. used by Lessor. 10. Real Property Tenses. 10.1 Definition. As used herein. the term "Rent Property Taxes" shag Include any, torn of assessment real estate, general, special. ordinary or extraordinary, or reYVW levy or tax (other then inheritance, personal Income or estate taxes); Improvement bond; and/or license fee Irhpceed upon or levied against any legal or equitable interest of Lessor in the Premises or the Project, Lessors right to otter Income therefrom, and/or Lessors busmess of leasing, by any authority having the direct or indirect power to tax and where the funds are generated with reference to the Building address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurtsdi(*on within which the Premises are located. Real Property Taxes shag also Include any tax fee, levy, assessment or charge, or any increase therein; 0) Imposed by reason of events occurring during the tern of this Lease, including but not limited to, a change In the ownership of the Premises, and (il) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease. 102 Payment of Taxes. In addition to Base Rent, Lessee shag pay to Lessor an amount equal to the Real Properly Tax Installment due at least 20 days prior to the applicable delinquency date. If any such installment shag cover arhy period of tree prior to or after the expiration or ter Ination of this lease. Lessee's share of such Installment shag be prorated. In the evert Lasses hours a late charge on any Rent payment Lessor may estimate the current Real Property Taxes, and require that such taxes be paid In advance to Lessor by Lessee monthly In advance with the payment of the Base Rem. Such monthly payments shag be an amount equal to the amount of the estimated installment of taxes divided by the number of months remaining ing before the month In which said installment becomes delinquent When the actual amount of the applicable lax big is known, the amount of such equal monthly advance payments shag be adjusted as required to protide the funds needed to pay the applicable taxes. If the amount collected by Lessor is insuificfent to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum as Is necessary. Advance payments may be Intermingled with otter moneys of Lessor and shall not bear interest In the event of a Breach by Lessee In the performance of its obligations under Ids Lease, than any such advance payments may be treated by Lessor as an additional Security Deposit 10.3 Joint Assessment. If the Premises are not separately assessed, Lessee's llabilliy shall be an equitable proportion of the Real Property Taxes for all of the lard and Improvements included wlthln the tax parcel assessed, such proportion to be conclusively determined by Lessor from the respective valuations assigned in the assessors work sheets or such other Information as may be reasonably available. 10.4 Pensonal Property Taxes. Lessee shag pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shag cause its Lessee Owned Alterations and Utility Installations, Trade Fbduras, fumishbgs, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. if any of Lessee's said property shag be assessed with Lessors real property, Lasses shall pay Lessor to taxes attributable to Lessee's property YAM 10 days after receipt of a written statement seting forth the taxes applicable to Lessee's property. 11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Promises, together with any taxes thereon. if any such services are not separately metered or billed to Lessee, Lessee shall pay a reasonable proportion, to be determined! by Lessor, of all charges jointly metered or billed. There shag be no abatement of rem and Lessor shall not be gable In any respect whatsoever for the Inadequacy, stoppage. interruption or discontinuance of any utility or service due to dot, stoke. labor dispute, breakdown, acddenL repair or other cause beyond Lessors reasonable control or In cooperation with governmental request or directions. 12 Assignment and Subletting. 121 Lessors Consent Required. (a) Leasee shag not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or awkinmerin or sublet all or any pat of Lessee's Interest In this Lease or In the Premises without Lessors prior written consent. (b) Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change In the comrd of Leasee shag constitute an assignment requiring consent. The transfer. on a cumulative basis, of 25% or more of the voting oontrd of Lessee shall constitute a change in control for this purpose: (c) The imrofvement of Lessee or its assets In arty transaction, or series of traroacton s (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occas, wfdch results or vnll result in a reduction of the Net Worth of Lessee by an amourt greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented, or as it exists Immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater. stall be considered an assignment of this Lease to whfch Lessor may withhold Its consent 'Net Worth of Lessee' stall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles. (d) An assignment or subletting without consent shag, at Lessors option, be a DefaNt amble atter notice per Paragraph 13.1(c), or a noceuratde Breach without hout the necessityof any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a ncnciaable Breach, Lessor may either: m terminste this Lease, or (0) upon 30 days written notice, increase the monthly Base Rem to 110% of the Base Rent then In effect Further, in the every[ of such Breach and rental adjustment, 01 the purchase price of any option to purchase the Premises held by Lessee shag be subject to similar adjustment to 110% of the price previously In effect, and a all fixed and rimfixed rental adjustments scheduled dung the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rem. (e) Lessee's remedy for any breach of Paragraph 121 by Lessor stag be fanned to compensatory damages and/or Injunctive relief. I) Lessor may reasonably withhold consent to a proposed assignment or subletting If Lasses Is in Default at the time consent is requested. (g) Notwithstanding the foregoing, allowing a de minhmis portion of the Premises, Is. 20 square feet or less, to be used by a third PAGE 9 OF 17 le- I INITiA18 (42001-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN-13.3/10E party vendci In connection With the installation of a vending machine or payphone shag not constitute a subletting. 12.2 Terris and Conditions Applicable to Assignment and Subletting. (a) Regardless of Lessor's consent, no assignment or subletting shall: () be effective without the express written assumption by such assignee or sublessee of the obligations of lessee under this Lease. (u) release Lessee of any obligations hereunder. or (w� after the primary liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee. (b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment not the acceptance of Rent or performance shall constitute a waiver or estoppel of Lesson's right to exercise its remedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly, against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligations under this Lease. including any assignee or sublessee, without first exhausting Lessors remedies against any other person or entity responsible therefor to Lessor, or any security held by Lessor. (a) Each request for consent to an assignment or subletting shall be In writing, accompanied by Infomation relevant to Lessors determination as to the finandal and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use andfor required modification of Ote Premises, if any. together with a fee of $500 as consideration for Lessors considering and processing said request. Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably requested. (See also Paragraph 38) (Q Any assignee of, or sublessee under, this Lease shag, by reason of accepting such assignment, entering Into such sublease, or entering Into possession of the Premises or arty portion thereof, be deemed to have assumed and agreed to corfonm and comply with each and every term, covenarn, condition and obligation herein to be observed or•perforned by lessee during the term of said assignment or sublease, other than such obligations as are contrary to or inconststent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. (g) Lessors consent to any assignment or subletting shag not transfer to the assignee or sublessee any Option granted to the original Lessee by this Lease untess such transfer is specifically consented to by Lessor In writing. (See Paragraph 392) 12.3 Additional Terme and Conditions Applicable to Subletting. The following terns and conditions shag appy to any subletUM by Lessee of all or any part of the Premises and shag be deemed Included In all subleases under this Lease whether or not expressly Incorporated therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's Interest in all Rent payable on any sublease, and Lessor may collect such Rend and apply same toward Lessee's obligations under this Lease: Provided, however. that until a Breach shag occur in the performance of Lessee's obligations, Lessee may collect said Rent In to event that tie amount collected by Lessor exceeds Lessee's than outstanding obligations any such excess shag be refunded to Lessee. Lessor shag not by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for arty failure of Lessee to perform and comply with any of Lessee's obligations to such sublessee. Lessee hereby imewcably authorizes and directs any such sublessee, upon receipt of a written notice tom Lessor staling that a Breach exists In the performance of Lessee's obligations under this Lease, to pay to Lessor all Rem due and to become due under the sublease. Sublessee shag rely upon any such notice from Lessor and shag pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists, notwithstanding ary claim from Lessee to the contrary. - (b) In the event of a Breach by Lessee. lessor may, at its option, require subleases, to soon to Lessor, In which evert Lessor shag undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor shag not be Gable for any prepaid rents or seorfiy deposit paid by such sublessee to such -sublessor or for ary prior Defaults or Breaches of such sublessor. (c) Any matter requiring the consent of the sublessor under a sublease stall also require the consent of Lessor. (d) No sublessee shag further assign or sublet all or any part of the Premises Without Lessors prior wfit w Consent (e) Lessor shag deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shag have the right to cure the Default of Lessee within the grace period, if any, specified In such notice. The sublessee shag have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 13. Default Breach; Remedies. 13.1 Datsun Breach, A "DefatW ts defined as a failure by the Lessee to comply With or perform any of the terms, covenants, condgions or Rules and Regulators under this Lease. A "Breach" Is defined as the ooamance of one or more of the following Defaults, and the failure of Lessee to cure such Default Wdhin any applicable grace period: (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 described In Paragraph 8.3 Is Jeopardized as a result thereof, or without providing reasonable assurances to mtnhmize potential vandagan. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Losses hereunder, w hetes to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RiGHTS. INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES. (c) The failure of Lessee to allow Lessor and/or is agents aeons to the Premises or the commission of waste, act or ads constituting public or private nuisance. and/or an illegal activity on the Premises by Lessee, where such actions continue for a period of 3 business days follow hV written notice to lessee. (d) The failure by Lessee to provide (I) reasonable written evidence of compliance with Applicable Requirements, (I) the Samoa contracts, (G) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination, (w) evidence concerning arty guaranty arW/ar Guarantor, (vri) any document requested under Paragraph 42, (WD material safety data sheets (MSDS), or (60 any other documentation or information Which Lessor may reasonably require of Lessee under flue tens of this Lase, where arty such failure oD dlrwes for a period of 10 days following written notice to Lessee. (e) A Default by Lessee as to the term, covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof, other than those described in subparagraphs 13A (a), (b). (c) or (d), above. Where such Default continues for a period of 3D days ager written PAGE 10 OF 17 INITIALS WM -AIR COMMERCIAL REAL ESTATE ASSOCIATION INITIALS FORM STN -133/10E notice; provided, however, that if the nature of Lessee's Default Is such that more than 30 days are reasonably required for is are, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such an to completion. (t) The occurrence of any of the following events: (i) the molding of any general arrangement or assignment for the benefit of creditors; (u) beconting a "debtor' as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the case of a petition tiled against Lessee. the same is dismissed within 60 days); (IL) the appointment of a trustee or receiver to take possession of substardiafly all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where possession Is not restored to Lessee wititn 30 days; or Qv) the attachment, execution or other judtM selzum of substantially a0 of Lessee's assets located at the Premises or of Lessee's Interest In this Lease, where such sei we is not dlschaMed within 30 days: provided, however, In the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not afted the validity of the remaining provislons. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's obligations under this Lease is guaranteed: Q) the death of a Guarantor, (a) the termination of a Guarantors liability with respect to this Lease other than in accordance with the terms of such guaranty, (Iii) a Guarantors becoming insolvent or the subject of a bankruptcy fling, (w) a Guarantor's refusal to honor the guaranty, or (v) a Guarentofs breach of its guaranty obligation on an anticipatory basis, and Lessee's failure, Within 60 days following written notice of any such evert, to provide written attemative assurance or security, which. when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease. 132 Remedies. If Lessee fags to perform any of its aflirma ire dudes or obligations, within 10 days atter written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behalf, Including but not limited to the obtalnhV of reasonably requited bonds, Insurance po0cies, or governmental ficenses. permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the ousts and expenses Insured by Lessor In such performance upon receipt of an Invoice therefor. In the event of a Breach, Lessor may, with or without Latimer notice or demand, and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach: (a) Temanste Lessees right to possession of the Premises try any lawful means, in which case this Lease shag terminate and Lessee shag immediately surrender possession to Lessor. In such event Lessor shag be entitled to recover from Lessee: (I) the unpaid Rent which had been earned at the time of termination: (if) the worth at the time of award of the amount by which the unpaid rent W*.h would have been earned after tertNnation until the time of award exceeds the amount of such rental loss Oat the Lessee proves could have been reasonably avoided: (III) the worth at the time of award of the amour by which the unpaid rent for the balance of the term after the time of award exceeds to amount of such rental loss that to Lessee proves could be ran naby avoided: and Qv) any other amount necessary to comperhsato Lessor for all the detrtmer proximately caused by the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, Including but not limited to the coat of recovering possession of the Premises, expenses of reletting, including necessary renovation and atemdon of the Premises, reasonable atornsK fees, and that portion of any leasing commission paid by Lessor In corvhectlon with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (111) of to Immediately preceding sentence stag be computed by discounting such amour at the discount rata of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shag not waive Lessors tight to recover damages under Paragraph 12 if termination of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shag have the right to recover In such preeeedirg any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof In a separate suit If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detalner sbtuta shag also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawhd detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periods shall constibrte both an untawfid detainer and a Breach of this I am entitling Lessor to the remedies provided for In this Lease and/or by said statute. (b) Continue the Lease and Lessee's right to possession and recover the Rent as it becomes due, In which event Leasee may sublet or assign, subject arty to reasonable (imitations. Ada of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessors Interests. shall not constitute a temdr atlon of to Lessee's right to possession. (c) Pursue any other remedy now or hereafter avallable under the laws or judicial decisions of the state wherein to Promises are located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under any indemnity previsions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises. 13.3 Inducement Recapture. Any agreement far free or abated rent or other larges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, Inducement at consideration for lessee's entering Into this Lease, all of which concessions we hereinafter referred to as 'inducement Provtstons," stag be deemed condtloned upon Lessee's fug and fathhd performance of all of the tenths, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shag automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other targe, bonus, Inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement Provision shag be immediately due and payable by Lessee to Lessor, notwit st=t1l g any subsequer ora of said Breach by Lessee. The acceptance by Lessor of rent or the sae of the Breach which initiated the operation of this paragraph shag not be deemed a waiver by Lessor of.t e provisions of this paragraph unless specifically so slated In writing by Lessor at the time of such acceptance. 13A Late Charges Lessee hereby acknowledges that We payment by Lessee of Rent will. cause Lessor to incur costs not contemplated by this Lease. the exact amount of which will be extremely difficult to ascertain. Such costs Include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Larder. Accordingly, If arty Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requdremen for notice to lessee. Lessee stall immediately pay to Lessor a aa-Ome late large equal to 10% of each such overdue amount or $100, whichever is greater. The Parties hereby agree that such late charge represents o fair and reasonable estimate of the costs Lessor will incur by reason of such tete payment. Acceptance of such tete large by Lemor.shall in no even constitute a waiver of Lessee`s Default or Breach with rasped to such overdue amourd, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the even that a late charge is payable hereunder, whether or not collected, for 3 consecutive InsfalMents of Base Rent, then notwithstanding any provision of this Iease to the can". Base Rent shag, at Lessor's option, become due and payable quarterly in advance. 13S Interest. Arty monetary payment due Lessor hereunder, other than late larges, not received by Lessor, when due as to scheduled payments (such as Base Rena or within 30 days Wowing Ore date on which t was due for nonsdaduied payment, shag bear Interest from /A PAGE 11 OF 17 INITIALS INITIALS ®2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN -13-3/10E the date when due, as to scheduled payments, or the 31st day after it was due as to non4cheduted payments. The interest ClatereWl charged shall be comparted at the rate of 10% per annum but slag not exceed the maximum rate allowed try taw. Interest Is payable in addition to the potential late charge provided for in Paragraph 13.4. 13.6 Breach by Lamar. (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fags within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obfigation of Lessor has not been performed; provided, however, that If the nature of Lassoes obligation is such that more than 30 days are reasonably regWred for its performance, then Lessor shall not be in breach if performance Is commenced within such 30 day period and thereafter diligently pursued to completion. (b) Performance by Lessee on Behalf of Lessor. In the event that neither lessor nor Lender cures said breach within 30 days after receipt of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such ase, provided, however, that such offset shall not exceed an amount equal to the greater of one mordh% Base Rend or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any such expense in a== of such offset Lessee shag document the cost of said sue and supply said documentation to Lessor. 14. Condemnation. if the Premises or any portion thereof are taken under to power of eminent domain or sold under the iNeat of the exercise of said power (collectively "Condemnation"), this Lease shell terminate as to the part taken as of the date the condemning authority takes title or possession, whichever fast occurs. If more than 10% of the Building, or more than 26% of that portion of the Premises not occupied by any building, is taken by Condemnation. Leasee may, at Lessee's option, to be exercised to writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, within 10 days alter the condemning authority shag have taken possession) terminate this lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in fug force and effect as to the porton of the Premises remaining, except that the Base Rent shag be reduced In proportion to the reduction In utility of the Premises caused by such Candemmation. Condemnation awards and/or payments shag be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold. the value of the part taken, or for severance damages; provided, however, that Lessee shag be entitled to arty compensation paid by the condemnor for Lessee's relocation expenses, lass of business goodwill and/or Trade Factures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. Ag Alterations and Utility Installations made to the Prefers by Lessee, for purposes of Condemnation only, shag be considered the property of the lessee and Lessee shag be entitled to any and all compensation which Is payable terrefor. in the event that this Lassa is not terminated by reason of the Condemnation. Lessor shag repair any damage to the Premises caused by such Condemnatfan. 16. Brokerage Fees. 15.1 Additional Commission. If a separate brokerage fee agreement Is attached then in addition to the payments owed pursuant to Paragraph 1.9 above, and unless Lessor and the Brokers otherwise agree In willing, Lessor agrees that (a) if Lessee exercises ary Option, (b) If Lessee or anyone affiliated wth Lessee acquires any rights to the Premises or other premises owned by Lessor and located within the same Projed, It any, within which to Premises Is located, (c) If Lessee remains to possession of the Premises, wIt h the consent of Lessor, after the expiration of tfls Lease, or (d) if Base Rent is Increased, whether by agreement or operation of an escalation clause herein, then, Lessor shag pay Brokers a fee in accordance with the schedule attached to such brokerage fee agreement 162 Assumpdon of ObOgatons. Any buyer or transferee of Lassoes Interest in this Lease shag be deemed to have assumed Lassoes obligation hereunder. Brokers shag be third party beneficiaries of the provisions of Paragraphs 1.9. 16, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shag accrue Interest, In addition, If Lessor fags to pay any amounts to Lessee's Broker when due, Lessee's Broker may gena written notice to Lessor and Lessee of such failure and N Lessor fags to pay such amounts within 10 days after said notice, Lessee shag pay said monies to Its Broker and offset such amounts against Rem. In addition, Lessee's Broker shag be deemed to be a third party beneficiary of arty commission agreement entered into by ancifor between Lessor and Lassoes Broker for the limited purpose of collecting any brokerage fee owed 15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrent to the other that it has had no dealings with any person. ftrm, broker or finder (other than the Brokers, If any) In connection with this Lease, and that no one other than said named Brokers is entitled to any commission or findees fee In connection herewitli leasee and Lessor do each hereby agree to Indemnify, protect defend and hold the other hamdesa from and against liability for compensation or charges which may be claimed by ary such unnamed broker, finder or other sirngar party by reason of any dealings or actions of the IrdemnHying Party, Including arty costs, expenses, attorneys' fees reasonably incurred with respect thereto. 16. Estoppel Certificates. (a) Each Party (as 'Responding Party") shag wWn 10 days after written notice from the other Party (the "Requesting Pard") execute, acknowledge and deliver to the Requesting Party a statement In writing in form similar to the then most current "Estoppel Cwtiflcata" form published by the AIR Commercial Real Estate Association, plus such additional information, congrtmaton and/or statements as may be reasonably requested by the Requesting Party. (b) if to Responding Party shag fag to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that n the Lease is in hN farce and effect without modification except as may be represented by the Requesting Party, Cel there are no uncured defaults in the Requesting Partys performance, and (tin if Lessor is the Requesting Party, not more than one months h's rent has been paid in advance. Prospective purchasers and encumbrances may rely upon the Requesting Partys Estoppel Certificate. and the Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. (c) If Lessor desires to finance, xefirance, or sell the Remises, or any part thereof; Lessee and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, bhduding but not limited to Lessee's Handal statements for the past 3 years. Ag such financial statements shall be received by Lessor and such lender or purchaser in confidence and shag be used only for the purposes herein set font. 17. Definition of Lessor. The term "Lessor' as used herein shag mean the owner or owners at the time in question of the fee tide to the Premises, or, if this is a sublease, of the Lessee's 'Interest in the prior lease. In the event of a transfer of Lassoes title or interest in the Premises or this �y PAGE 12 OF 17 INITIALS INITIALS 02001- AiR COMERC1AL REAL ESTATE ASSOCIATION FORM STN-1331IOE Lease, Lessor shall delver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be releved of all fiabifdy with respect to the obligations and/or covenants cider this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove dermad. 18. Severability. The invalidity of any provision of this lease, as determined by a court of competent jurisdiction, ahal In no way affect the validity of any other provision hereof. 19. Days. Unless otherwise specifically Indicated to the contrary, the word 'days" as used in this Lease shall mean and refer to calendar days. 20. Limitation on Liability. The obligations of Lessor under this Lease strait not constitute personal obligations of Lessor or its partners. members, direct=, officers or shareholders. and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any fiabdity of Lessor with respect to this Lease, and shal not seek recourse against Lessor`s partners, members, directors, officers or shareholders, or any of their personal assets for such satisfaction. 21. Time of Essence. Time is of the essence with respect to the performance of all oblgadons to be performed or observed by the Parties under this Lease. 22 No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to arty matter mentioned herein. and no other prior or oortlemporaneous agreement or understanding shag be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality, character and financial responsib@ty of the other Party to this Lease and as to the use, nature, quality and character of the Premise& Brokers have no responsibility with respect thereto or with respect to airy default or breach hereof by either Party. 23. Notices. 23.1 Notice Requirements. AD notices required or permitted by this Lease or applicable law shall be in witting and may be delivered in person (by hand or by cowlet) or may be sent by regular, certified or registered mal or U.S. Postai Service Express Mas, with postage prepald, or by facsimile transmission, and sires be deemed sufficiently given if served in a manner specified in this Paragraph 23. The addresses noted adjacent to a Partys signature on this base shall be that Partys address for delivery or mating of notices. Either Party may by written notice to the other specify e different address for notice, except that upon Lessee's taking possession of the Premises. the Premises shag constitute lessee's address for notice. A copy of all notices to Lessor shag be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter designate to writing. 232 Data of Notice. Any ncffoe sent by registered or certified mal, return receipt requested, shag be deemed given on the date of delivery shown on the receipt card, or if no delivery date Is shown, the postmark thereon. if sent by regular mail the notice shag be deemed given 72 hours after the same is addressed as required herein and malted with postage prepaid. Notices delivered by United States FVress Mag or overnight courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shag be deemed delivered upon telephone cenfinnadon of receipt (consmhatlon report from fax machine is sufficient), provided a copy is also delivered via delivery or mail If notice is received on a Saturday, Sunday or legal holiday, it shag 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 Hereof by Lessee. shag be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Detaug or Breach by Lessee of the same or of any other tern, covenant or condition hereof Lessors consent to, or approval of, any act shag not be deemed to render unnecessary the obtaining of Lessofs consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent (b) The acceptance of Rent by Lessor shag not be a waiver of any Defauft or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor, notwithstanding any qualift statements or conditions made by Lessee In connection therewith, which such statements and/or conditions shag be of no force or effect whatsoever unless specifically agreed to in writing by Lessor at or before the time of deposit of such payment (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WRIT REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WANE 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 Reldlonshlp. (a) When entering Into a d1scuasion with a real estate agerd regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation O has with the agent or agents in the transaction Lessor and Lessee acknowledge being advised by the Brokers in this transaction. as follows: n Lassots Avert A Lessor's agent under a I1sti g agreement with the Lessor ads as the agent for the Lessor only. A Lessor's agent or subagent has the fol owbhg affirmative obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor. a. Diligent exercise of reasonable skills and care in performanoe of the agent's duties. b. A dirty of honest and fair deaing and good faith. c A duty to disclose all fads known to the agent materially affecting the value or desirability of One property that are not known to, or within the dligennt attention and observation of. the Parries. An agent isnot obligated to reveal to either Party arty con ental information obtained from the other Party which does not involve the affirmative duties set forth above. (1) L�¢eee`g Arctic An agent can agree to ad as agent for the Lessee only. In these situations, the agent Is not the Lessofs agent even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has the following affirmative obligations. To the Lessee, A fiduciary duty of utmost care, integrity, honesty, and loyalty In dealings with the Lessee. To the Lessee and the Lessor. , a. Diligent exercise of reasonable skills and pre in performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c A duty to disclose as fads known to the agent materially affecting the value or deskabfigy of the property that are not known to, or within tie diligent allerdlon and observation of, the Parties. An agent Is not obligated to reveal to either Party any confidential Information obtained from the agar Party which does not Involve the affirmative dudes set forth above. (i7 Agent Representing Both Lessor and Lessee. A real estate agent either acting directly or through one or more associate to/erases, 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 J PAGE 13 OF 17 INITIALS INITIALS fflZM -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM! STi 43J/10E Lessor and the Lessee. In a dual agency situallan, the agent has the following affimtaive obligations to both the Lessor and the lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. b. Other duties to titre Lessor and the Lessee as' stated above in subparagraphs ®r or n. In representing both Lessor and Lessee, the agent may not without the express permission of the respective Party, disclose to the other Parry that the Lessor wig accept rand In an amount less than that indicated In the gstng or that the Lessee Is willing to pay a higher rent than that offered_ The above duties of ft agent In a real estate transaction do not relieve a Lessor or Lessee from the responsibility to prated their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understandln 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 professlonal. (b) Brokers have no responsibildy with respect to any default or breach hereof by either Party. The Parties agree that no lawsuft or other legal proceeding involving any breach of duty, error or omission relating to No. Lease may be brought against Broker more than one year after the Start Date and that the hhabW (including court costs and attorneys' fees), of any Broker with respect to arty such lawsuit and/or legal proceeding shag not exceed the fee received by such Broker pursuard to this Lease; provided, however, that the foregoing Iimitatlan on each Brokers liability shall not be applicable to any gross negligence or willful misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as "Contidentiar any communication or Information given Brokers that is considered by such Party to be amential. , 20. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of Oft Lease_ In the event tut lessee holds over, then the Base Rent shag be increased to 150% of the Base Rent applicable Immediately preceding flat expiration or termination. Nothing contained herein shag be construed as consent by Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or election hereunder shag be deemed exclusive but shag, wherever possible, be cumulative with all other remedlers at law or in equity. 28. Covenants and Conditions; Conan ction of Agreement. All provisions of tfds Lease to be observed or perfomued by Leasee are both covenants and conditions. In construing this Lease, all headings and tiles are for the amvenlence, of the Partes only and shall not be considered a part of this Lease: Whenever required by the context the singular shag Include the plural and vice versa. This Lease shag not be construed as t prepared by one of the Parties, but rather according to its fair meaning as a whole, as If both Partes had prepared iL 29. . Binding Effect Choice of law. This Lease shag be binding upon that Parties, their personal representatives, successors arta assigns end be governed by the laws of the State in which the Premises are located. Any gigaton between the Partes hereto concerning this Lease shag be Irritated In the county in which the Premises are located. 30. Subordbiation; Attommernt Non -DI trbance. 30.1 Subordination This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage. deed of trust, or other hypothecation or security device (collectively, "Security Device"), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, arid extensions thereof. Lessee agrees that the holders of any such Security Devices on this Lease together referred to as "Lander") shag have no pabgity or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have thffi Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shag be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereof. 30.2 Adornment in the event that Lessor transfers title to the Premises, or the Premises are acquired by another upon the foreclosure or termination of a Security Devise to which this Lease Is subordinated m Lessee shag. subject to the nondisturbance provisions of Paragraph 50.3, atom to such new owner, and upon request enter Into a naw lease. containing all of the terms and provisbna of this lease, with such new owner for the reminder of the Lenin hereof, or, at the election of the new owner, this Lease Will automatically become a new lease between Lessee and such new owner, and (g) Lessor shag thereafter be relieved of any hinter obligations hereunder ant such new owner shag assume all of Lessors obligations, except that such new owner shag not (a) be gable for any act or omission of any prior lessor or with respect to overdo ocou ring prior to acquisition of ownership; (b) be subject to arty offsets or defenses which lessee might have against any prior lessor, (c) be bound by propsymerd of more than one month's recti, or (d) be liable for the return of any security deposit paid to arry prior lessor which was not paid or credited to such now owner. 30.3 Non -Disturbance. With respect to Secuhy Devices entered into by Lessor after the execution of this Lease, Lessee's subordination of this lease shaft be subject to ieceiving a comntemiaily reasonable non-0iftniance agreement (a "Non0ieturbanee AgroamenC) from the Lender which Noir-Disturbance Agreement protides that Lessee's possession of the Premises, and this Lease, Including any options to extend the tern hereof, will not be disturbed so long as Lessee is not In Breach hereof ant attirms to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shag, If requested by Lessee, use its commercially reasonable efforts to obtain a Non -Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non -Disturbance Agreement within said 60 days, then Lessee may. at Lessee's option. directly con cl Lender and attempt to negotiate for the execution and delivery of a Non -Disturbance Agreement. 30.4 SeN-Executing. The agreements contained in this ParaMh 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lander in connection with a sale, financing or retnancirg of the Promises. Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attommem and/or Non, -Disturbance Agreemerd provided for herein. 31. Attorneys' Fee& If any Party or Broker brings an action or proceeding involving the Premises whether founded In tort, contract or equity, or to declare righis hereunder, the Prevailing Parry (as hereafter defined) in any such Proceeding, action, or appeal thereon, shag be entified to reasonable attorneys' fees. Such Lees may be awarded N the same suit or recovered in a separate suit whether or not such action or proceeding is pursued to derision or judgment The term, "Prevailing Party' shag include, wfthout grthitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by cornprorNse. settlement, judgment or the abandonment by the other Party or Broker of lu claim or defense. The attorneys' fees award shag not be computed in accordance with any coot The schedule, but shall be such as to fully reimburse all eltomeys' fees reasonably incurred. In addition, Lessor shag be entitled to attomeys' fees, costs and expanses Incurred In the preparation and service of notices of Default and consultations in connectiarh therewith. whether or not a legal action is subsequeMy commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and cenoltaton). 32. Lessors Access; Showing Premises; Repairs. Lessor and Lessors agents shag have the right to enter the Premises at any time, in the case of an emergency, and otherwise at reasonable times atter reasonable prior notice for the purpose of showing the, same to prospective purchasers, Lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and All PAGE 14 OF 17 INITIALS INITIALS 02M -AiR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN4"10E the erecting. using and maintaining of utilities, services, pipes and conduits through the Premises andfor other premises as long as them is no material adverse effect to Lessee's use at to Premises. Ali such activities shag be without abatement of rent or liability to Lessee. 33. Auctions. Lessee shag not conduct nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent. Lessor shag not be obligated to exercise any standard of reasonableness in deterring whether to permit an auction 34. Signs Lessor may place on the Premises ordinary "For Sall' signs at any time and ordinary "For Lease signs during the last 6 months of the term hereof. Except for ordinary'for sublease' signs. Lessee shag not place ary sign upon the Premises without Lessors prior written consent. Ali signs must comply with all Applicable Requirements. 35. Temnination; Merger. Unless, specifically stated otherwise In writing by lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or ceneeltation hereof, or a tennmafton hereof by Lessor for Breach by Lessee, shelf automatically tamtinate any sublease or fewer estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessors failure within 10 days following any such event to elect to the contrary by written notice to the holder of any such lesser interest, shag constitute Lessors election to have such event constitute the termination of such Interest 36. Consents. Except as otherwise provided herein, wherever In this Lease the consent of a Party Is required to an ac by or for the other Party, such consent shelf not be unreasonably withheld or delayed. Lessors actual reasonable costs and expenses (indudirg but riot limited to architects'. stnmeys', englnewW and other conaultaMs' fees) inured In the consideration at, or response to, a request by lessee for any Lessor consent, Ind Ing but not limited to consents to an assignment. a subletting or the presence or use of a Hazardous Substance, shag be paid by Lessee upon receipt of an Invoice and supporting documentation therefor. Lessors consent to any act, assignment or subletting shag not constitute an adoewledgrnerd that no Default or Breach by Lessee of this Lease exists, nor shelf such consent be deemed a waiver of any then existing Default or Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such consent. The fallur s to specify herein any particular condition to Lessors corhsert shall not prelude the Imposition by lessor at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event Ohaf either Party disagrees whth any detemdnation made by the other hereunder and reasonably requests the reasons for such determination, the determining party shall hordsh its reasons In writing and in reasonable detail within 10 business days following such request 37. Guarantor. 37.1 Execution. The Guarantors. O any, shall each execute a guaranty in the form most recently published by the AIR Corn erdat Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 372 Default. O shag oonsflhte a Default of the Lessee If any Guarantor fags or refuses, upon request to provide: (a) evidence of the execution of the guaranty, Incudirg the authority of the party signing on Guarardoes behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors authorizing the mating of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty Is still in effect 36. Quiet Possession Subject to payment by Lessee of the. Rem and performance of all of the covenants, conditions and provisions on Lessee's part to be observed and performed under this Lease, Lessee shag have quiet possession and quiet enjoyment of the Premises during the term hereof. 39. Options. If Lessee is granted an Option, as defined below, then the following provisions shag appy: 39.1 Deftntton. 'Opfttr shag mean: (a) the rigid to extend or reduce the term of or renew this tease or to extend or reduce the temp of or renew any lease that Lessee has on other property of Lessor; (b) the right of Onst refusal or first offer to Ism either the Remises or other property of Lessor, (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 392 Options Personal To Original Lessee, Ary Option granted to Lessee In Ods Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other then said original Lessee and only white the original Lessee is In full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be exercised unless the prior Options have been var dy exercised. 39.4 Effect of Default on Options. (a) Lessee shag have no right to exercise an Option: (q during the period commencing with the giving of any notice of Default and eontnuing until said Default Is coed, W during the period at time any Rent is unpaid (without regard to whether notice tereof Is given Lessee), 09) dxairg the time Lessee is In Breach of this Lease, or (M in the event that Lessee has been given 3 or more notices of separate Default whether or not the Defaults are coed, during the 12 month period immediately preceding the exercise of the Option. (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an Option because of the provisions of Paragraph 39.4(a). (c) An Option shall termlmnate and be of no further force or effect, notwithstanding Lessee's due and thhiely exercise of the Option, If, atter such exercise and prior to the commencement of the extended term or completion of the purchase, i) Lessee rails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof), or n if Lessee corrects a Breach of this Lease. 40. rush FAw and Faipulasions 41. Security Measurem Lessee hereby admawledges that the Rent payable to Lessor hereunder does not include Ohs cost of guard service or other seamy measures. and that Lessor shalt have no obligation whatsoever to provide same_ Lessee assumes a➢ respwhsit0y for the protection of the Premises, Lessee, its agents and Invitees and their property from the acts of third parties. 42. Reservations. Lessor reserves to Itself the right from time to time, to grant. without the consent or joinder of Lessee, such easements, rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, tights, d4cations, maps and restrictions do riot unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to etfechxate any such easement rights, dedication, map or restrictions. 43. Performance Under Protest if at any time a dispute shag arise as to arty amount or sum of money to be paid by one Party to the other -Z /PAGE 15 OF 17 INITIALS1INFR LLS 0=1 - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN -133H OE under the provisions hereof, the Party against whom the obligation to pay the money is asserted shah have the right to make payment'Under protesC and such payment shall not'ba regarded as a voluntary payment and there Shan survive the right on the part of said Party to Instibde suit for recovery of such sum. if It shall be adjudged that there was no heal obligation on the part of sold Party to pay such sum or any part thereof, said Party shall be entitled to recover such am or so much thereof as it was not legally required to pay. A Party who does not Initiate suit for the recovery of sums pail 'Under pmteW with 6 months shall be deemed to have waived its right to protest such payment- 44. ayment44. Authority; MuMple Parties; Execution. (a) H either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity. each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly aut horned to execute and deliver this Lease on Its behalf. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. (b) H this Lease is executed by more than one person or entity as 'Lessee•, each such person or entity shall the Jointly and severally liable hereunder. It is agreed that any one of the named Lessees shag be empowered to execute any amendment to this lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as If all of the named Lessees had executed such doarmervL (C) This Lease may be executed by the Parties in counterparts, each of which shag be deemed an original and all of which together shag constitute one and the same instrument 45. CorhEGet Any conflict between the punted provisions of this Lease and typewritten or handw tttw provisions shell be controlled by the typewritten or handwritten provisions. 46. Offer. Preparation of this Lease by either Party or thea agent and submission of same to tha other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to be boding until executed and delivered by all Parties hereto. 47. Amendments. This. Lease may be moddled only In writing, signed by the Parties in Interest at the time of the modification. As long as they do not materially change Lessee's obligations hereunder. Lessee agrees to make such reasonable non -monetary modifications to this Lease as may be reasonably required by a lender in connection With the obtaining of normal financing or refinancing of the Prendses. 4& Waterer 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 THUS AGREEMENT. 49. Arbitration of Disputes. An Addendum requiring the Arbitration of all disputes between the Pelves and/or Brokers arising out of Oft Lease ❑ is H is not attached to this Lease. 50. Americana with DisaMlldes Act. Since compliance vAt h the Americans with Disablg9es Ac (ADA) Is depandent.upon Lessee's specific use of the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply v.0 ADA or any similar legislation In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance, Lessee agrees to make any such necessary modifications and/or additions at Lessee's expense LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY 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 PREMISE& SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE WARNING: IF THE PREMISES IS 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 IS LOCATED. The parties hereto have executed this Kase at the place and on the dates specifted above their respective signatures. Executed at Executed at On: 0A - i l - On: By LESSOR By LESSEE: DESERT PALM MANAGEMENT GROUP, LLC LASER OASIS, LLC a California limited liability c a By: By: Name Printed: a Roberts Name For& Patrick Cavan Title: Manager Title: Member By: By: Nance Printed: - Name Printed: Title: Tutle: Address: P.O. Box 4ptm 1809 2 Address: 4712 Admiralty Way, Suite 299 Palm Desert, CA 92255 Marina Del Rey, CA 90292 Tetephone:(760) 250.7618 Telephone:gfij895.0196 Facsimffe: Facsimile:(_J Emall:jaroberts20101ive.com Emad:patrick@laseroasis.com Email: Emall: Federal ID No. Federal lD No. H� PAGE 16 OF 17 1 INITIALS MM - AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STN-13-S110E. BROKER: BROKER: KW COMMERCIAL R.G. REORDAN INC. ®2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM SM43-MME Aft Dennis Bowman and Brandy Nelson Attn: Robert Reordan Tide: Directors Tile: President Address: 70005 Mirage Cove Drive Address: 60217 Wishbone Court Rancho Mirage, CA 92270 La Quinta, CA 92253 Telephone:(310) 592.0926 'Telephone:) 777:9933 Facsimile: 760) 770.9510 Farsimle:l_ __) Email:dennis.bowman@kw.com EmaD:breordan@verizon.net Federal ID No. Federal ID No. Braker/Agent DRE License 0 BmkedAgent DRE Ucense 0: 01346787 NOTICE These toms are often modlfled to meet changing requiraments of law and Industry needs. Always write or call to make sure you are utflhJng the most current form: AIR Comnmclal Real Estate Association, 800 W 6th Street, Sults 800, Los Angeles, CA 90017. Telephone No. (213) 687$777. Fax No.: (213) 687.8678. m Copyright 2001 - By AIR Commercial Real Estate Association. All rights reserved. No part of these works may be reproduced In any form without pemdssion in writing. PAGE 17 OF 17 INITIALS INITIALS ®2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM SM43-MME ADDENDUM Date: August 21, 2015 By and Between (Lessor) DESERT PALM MANAGEMENT GROUP, LLC (Lessee)LASER OASIS, LLC a California limited liability company Address of Premises: 46805 Dune Palms Road La Quinta, California Paragraph A -G In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall control. A. Non -Refundable Rent: Tenant will pay landlord a non refundable deposit of $32,200.00 immediately upon lease execution which may become the first month's rent and security deposit upon receipt of the Conditional Use Permit (CUP). The reason. IT. will become non-refundable is If the City Of La Qulnta does not issue the (CUP). Landlord agrees to cooperate with Tenant in appiyfng for a. Conditional Use Permit from the City of La Quinta: Landlord understands that Laser Oa9is will be required to obtain a (CUP) from the City of La Qulnta and may receive approval .by December 1, 2015. If not approved by December 1, 2015, Tenant may continue to pay Landlord an additional non-refundable amount of $536.66 per day ($16,100.00 divided by 30 days 19 $536.66 per day) payable weekly, until the (CUP) Is approved and Issued. If the $536.66 weekly payment Is not paid on time, then this will constitute a default, the lease agreement will expire, and that the $32,200 and any weepy payments made will be forfefted and the lease agreement will automatically be deemed to be cancelled. When the (CUP) is approved and Issued wfth all payments made, Landlord will accept the first month's rent deposit (the prepaid non refundable first month's deposit for recelving a Conditional Use Permit and 5ecurPty Deposit) and In addition Tenant will pay the triple net (NNN) charges of $4,508.00 commencing at that time. The next three (3) months following will be free rent with Tenant paying only the $4,50800 monthly triple net (NNN) charger. The 5ecurfty Deposit will be applied to Tenant's account. B. Base Rent: Base rent shall be paid In accordance with the following schedule and will commence December 1, 2015 unless the CUP fro delayed (see Addendum A. Non -Refundable Rent) Rent shall increase three percent (31.) annually on each anniversary date as follows: Month 1: $16,100.00 ($1.00 per square foot per month) Months 2-4. Abated Months 5-12: $16,100.00 ($1.00 per square foot per month) Months 13-24 $16,583.00 Months 25-36 $17,060.49 Months 37-48 $17,592.90 Months 49-60 $18,120.69 C. NNN Expenses: In addition to Bare Rent, Tenant will pay, on a monthly balls, Its proportionate share of (1) the cost of maintaining the exterior of the building and its surrounding landscaping and parking area, including without limitation assessments Imposed as well as all capital expenditures (capital expenditures to be amortized over the useful fife of such expenditure). (11) the real estate taxes and a9re90ments on the land and building comprising the Premises, and (111) the coot of insurance carried by Landlord with respect to the Premises. If the insurance co5t6 for the 'Tenants Use" of the building is above the normal usage, the increase In premiums will Increase the current monthly base NNN by that amount. The total NNN Expenses in Year 1 of the Lease shall not exceed $.28 per square foot per month. The NNN Expenses shall not Increase more than three percent (31.) annually. Landlord shall provide ail NNN accounting annually for reconciliation of amount paid by Tenant. Landlord shall reimburse Tenant any amounts over paid the prior year and adjust the monthly PAGE 1 OF 2 iNln1ALS INITIALS amouhti due accordingly. D. Tenant Improvements: Landlord shall provide Tenant a Tenant Improvement Allowance of $16,100.00. Landlord to pay such allowance within thirty (30) days of Tenant opening for business to the public and satisfactory evidence of all lien free releases from Tenant's contractors and subcontractors. Landlord shall deliver the Interior of the premises in the building in "as is", "where Is" condition and any major changes must be approved by Landlord, but will not be unreasonable withheld. All of the existing tenant's golf course components and warehouse storage items will be removed by the existing Tenant with a Landlord representative present. The missing warehouse air-conditioning/swamp coolers will not be purchased or installed by Landlord. landlord agrees to certify all that all existing building services Including, but not limited to, fire sprinklers. mechanical units and water heater are functioning correctly prior to Tenant; assuming responsibility for maintenance . Tenant shall be responsible for the cost of all leasehold improvements. Tenant will be responsible for designing, permitting and constructing at its expense, all improvements including the grease interceptor line and the grease interceptor, including the continued maintenance, repair and replacement of the grease Interceptor system in an area approved by landlord. E. Maintenance/Janitorial and Utilities: Tenant shall be responsible to maintain the Interior of the building and to pay for all utilities serving the building. Landlord shall maintain the exterior of the building and its surrounding landscaping and parking area. Tenant shall reimburse Landlord for costs Incurred for Its maintenance as a part of NNN Expenses. F: Option to Extend: Tenant shall have two, five (5) year options to extend the Lease. Rent at the -commencement of the first 5 year option term option term shall be no less than one hundred and three percent (1037x) of the preceding month's Base Rent and subject to three percent (370) annual Increases. The second five year option to extend the Lease shall be at ninety five percent (95%) of.the then current market value for similar buildings and usage In the Immediate marketplace. G. Signage: Tenant shall pay for all costs associated with the fabrication and installation of the building and monument signage and any City fees. Tenant is submitting for approval to the City of La Quinta signs on two locations on the building and one free standing monument sign for approval. PAGE 2 OF 2 INI'ilAL3