Exhibit 10.1

 

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Lessor’s Brokerage Firm License No. Is the broker of (check one): the Lessor; or
both the Lessee and Lessor (dual agent). Lessor’s Agent License No. is (check
one): the Lessor’s Agent (salesperson or broker associate); or both the Lessee’s
Agent and the Lessor’s Agent (dual agent). the Lessee; or both the Lessee’s
Brokerage Firm Hughes Marino, Inc. License No. 01898886 Is the broker of (check
one): Lessee and Lessor (dual agent). the Lessee’s Agent (salesperson or broker
associate); or Lessee’s Agent Shane Poppen License No. 01701190 is (check one):
both the Lessee’s Agent and the Lessor’s Agent (dual agent). (b) Payment to
Brokers. Upon execution and delivery of this Lease by both Parties, Lessor shall
pay to the Brokers the brokerage fee agreed to in a separate written agreement
(or if there is no such agreement, the sum of or 1.5 % of the total Base Rent)
for the brokerage services rendered by the Brokers. 10. Guarantor. The
obligations of the Lessee under this Lease are to be guaranteed by (" Guarantor
"). (See also Paragraph 37) 11. Attachments. Attached hereto are the following,
all of which constitute a part of this Lease: an Addendum consisting of
Paragraphs 53 through 55 ; a plot plan depicting the Premises; a current set of
the Rules and Regulations; a Work Letter; other (specify): Exhibit A . 2.
Premises. 1. Letting . Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. While the approximate
square footage of the Premises may have been used in the marketing of the
Premises for purposes of comparison, the Base Rent stated herein is NOT tied to
square footage and is not subject to adjustment should the actual size be
determined to be diﬀerent. NOTE: Lessee is advised to verify the actual size
prior to executing this Lease. 2. Condition . Lessor shall deliver the Premises
to Lessee broom clean and free of debris on the Commencement Date or the Early
Possession Date, whichever STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE
NET (DO NOT USE THIS FORM FOR MULTI TENANT BUILDINGS) 1. Basic Provisions
("Basic Provisions"). 1. Parties. This Lease (" Lease "), dated for reference
purposes only Fe bruary 7, 2020 , is made by and between P N N Holdings, LP ("
Lessor ") and Envision Solar International, Inc. (" Lessee "), (collectively the
" Parties ," or individually a " Party "). 2. Premises: That certain real
property, including all improvements therein or to be provided by Lessor under
the terms of this Lease, commonly known as (street address, city, state, zip):
5660 Eastgate Drive, San Diego, CA 92121 and includes the "Annex Premises"
located in the northwest corner of the property (" Premises "). The Premises are
located in the County of San Diego , and are generally described as (describe
brieﬂy the nature of the property and , if applicable, the " Project ," if the
property is located within a Project): a two story building consisting of 52,827
square feet. . (See also Paragraph 2) 3. Term: Five years and zero months ("
Original Term ") commencing September 1, 2020 (" Commencement Date ") and ending
August 31, 2025 (" Expiration Date "). (See also Paragraph 3) 4. Early
Possession: If the Premises are available Lessee may have non exclusive
possession of the Premises commencing (" Early Possession Date "). (See also
Paragraphs 3.2 and 3.3) 5. Base Rent: $52,000.00 per month (" Base Rent "),
payable on the first day of each month commencing September 1, 2020 . (See also
Paragraph 4) If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted. See Paragraph . 6. Base Rent and Other Monies Paid
Upon Execution: (a) Base Rent: $52,000.00 for the period September 1, 2020 -
September 30, 2020 . (b) Security Deposit: $52,000.00 (" Security Deposit ").
(See also Paragraph 5) (c) Association Fees : for the period . (d) Other: for .
(e) Total Due Upon Execution of this Lease: $104,000.00 . 7. Agreed Use :
office, research and development, manufacturing, distribution, and any other use
permitted under all applicable laws and zoning . (See also Paragraph 6) 8.
Insuring Party. Lessor is the " Insuring Party " unless otherwise stated herein.
(See also Paragraph 8) 9. Real Estate Brokers. (See also Paragraph 15 and 25)
(a) Representation : Each Party acknowledges receiving a Disclosure Regarding
Real Estate Agency Relationship, conﬁrms and consents to the following agency
relationships in this Lease with the following real estate brokers (" Broker(s)
") and/or their agents ("Agent(s)"): INITIALS © 2019 AIR CRE. All Rights
Reserved. STN 27.22, Revised 06 10 2019 INITIALS Last Edited: 3/19/2020 4:38 PM
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ﬁrst occurs (" Start Date "), and, so long as the required service contracts
described in Paragraph 7.1(b) below are obtained by Lessee and in eﬀect within
thirty days following the Start Date, warrants that the existing electrical,
plumbing, ﬁre sprinkler, lighting, heating, ventilating and air conditioning
systems (" HVAC "), loading doors, sump pumps, if any, and all other such
elements in the Premises, other than those constructed by Lessee, shall be in
good operating condition on said date, that the structural elements of the roof,
bearing walls and foundation of any buildings on the Premises (the " Building ")
shall be free of material defects, and that the Premises do not contain
hazardous levels of any mold or fungi deﬁned as toxic under applicable state or
federal law. If a non compliance with said warranty exists as of the Start Date,
or if one of such systems or elements should malfunction or fail within the
appropriate warranty period, Lessor shall, as Lessor's sole obligation with
respect to such matter, except as otherwise provided in this Lease, promptly
after receipt of written notice from Lessee setting forth with speciﬁcity the
nature and extent of such non compliance, malfunction or failure, rectify same
at Lessor's expense. The warranty periods shall be as follows: (i) 6 months as
to the HVAC systems, and (ii) 30 days as to the remaining systems and other
elements of the Building. If Lessee does not give Lessor the required notice
within the appropriate warranty period, correction of any such non compliance,
malfunction or failure shall be the obligation of Lessee at Lessee's sole cost
and expense. Lessor also warrants, that unless otherwise speciﬁed in writing,
Lessor is unaware of (i) any recorded Notices of Default aﬀecting the Premise;
(ii) any delinquent amounts due under any loan secured by the Premises; and
(iii) any bankruptcy proceeding aﬀecting the Premises. 3. Compliance . Lessor
warrants that to the best of its knowledge the improvements on the Premises
comply with the building codes, applicable laws, covenants or restrictions of
record, regulations, and ordinances (" Applicable Requirements ") that were in
eﬀect at the time that each improvement, or portion thereof, was constructed.
Said warranty does not apply to the use to which Lessee will put the Premises,
modiﬁcations which may be required by the Americans with Disabilities Act or any
similar laws as a result of Lessee's use (see Paragraph 49), or to any
Alterations or Utility Installations (as deﬁned in Paragraph 7.3(a)) made or to
be made by Lessee. NOTE: Lessee is responsible for determining whether or not
the Applicable Requirements, and especially the zoning, are appropriate for
Lessee's intended use, and acknowledges that past uses of the Premises may no
longer be allowed. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided, promptly after receipt of written notice
from Lessee setting forth with speciﬁcity the nature and extent of such non
compliance, rectify the same at Lessor's expense. If Lessee does not give Lessor
written notice of a non compliance with this warranty within 6 months following
the Start Date, correction of that non - compliance shall be the obligation of
Lessee at Lessee's sole cost and expense. If the Applicable Requirements are
hereafter changed so as to require during the term of this Lease the
construction of an addition to or an alteration of the Premises and/or Building,
the remediation of any Hazardous Substance, or the reinforcement or other
physical modiﬁcation of the Unit, Premises and/or Building (" Capital
Expenditure "), Lessor and Lessee shall allocate the cost of such work as
follows: (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are
required as a result of the speciﬁc and unique use of the Premises by Lessee as
compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof, provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease and the cost thereof exceeds 6
months' Base Rent, Lessee may instead terminate this Lease unless Lessor notiﬁes
Lessee, in writing, within 10 days after receipt of Lessee's termination notice
that Lessor has elected to pay the diﬀerence between the actual cost thereof and
an amount equal to 6 months' Base Rent. If Lessee elects termination, Lessee
shall immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure. (b) If such Capital Expenditure is
not the result of the speciﬁc and unique use of the Premises by Lessee (such as,
governmentally mandated seismic modiﬁcations), then Lessor shall pay for such
Capital Expenditure and Lessee shall only be obligated to pay, each month during
the remainder of the term of this Lease or any extension thereof, on the date
that on which the Base Rent is due, an amount equal to 1/144th of the portion of
such costs reasonably attributable to the Premises. Lessee shall pay Interest on
the balance but may prepay its obligation at any time. If, however, such Capital
Expenditure is required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay its share
thereof, Lessor shall have the option to terminate this Lease upon 90 days prior
written notice to Lessee unless Lessee notiﬁes Lessor, in writing, within 10
days after receipt of Lessor's termination notice that Lessee will pay for such
Capital Expenditure. If Lessor does not elect to terminate, and fails to tender
its share of any such Capital Expenditure, Lessee may advance such funds and
deduct same, with Interest, from Rent until Lessor's share of such costs have
been fully paid. If Lessee is unable to ﬁnance Lessor's share, or if the balance
of the Rent due and payable for the remainder of this Lease is not suﬃcient to
fully reimburse Lessee on an oﬀset basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor. (c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to apply
only to non voluntary, unexpected, and new Applicable Requirements. If the
Capital Expenditures are instead triggered by Lessee as a result of an actual or
proposed change in use, change in intensity of use, or modiﬁcation to the
Premises then, and in that event, Lessee shall either: (i) immediately cease
such changed use or intensity of use and/or take such other steps as may be
necessary to eliminate the requirement for such Capital Expenditure, or (ii)
complete such Capital Expenditure at its own expense. Lessee shall not, however,
have any right to terminate this Lease. 4. Acknowledgements . Lessee
acknowledges that: (a) it has been given an opportunity to inspect and measure
the Premises, (b) it has been advised by Lessor and/or Brokers to satisfy itself
with respect to the size and condition of the Premises (including but not
limited to the electrical, HVAC and ﬁre sprinkler systems, security,
environmental aspects, and compliance with Applicable Requirements and the
Americans with Disabilities Act), and their suitability for Lessee's intended
use, (c) Lessee has made such investigation as it deems necessary with reference
to such matters and assumes all responsibility therefor as the same relate to
its occupancy of the Premises, (d) it is not relying on any representation as to
the size of the Premises made by Brokers or Lessor, (e) the square footage of
the Premises was not material to Lessee's decision to lease the Premises and pay
the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers
have made any oral or written representations or warranties with respect to said
matters other than as set forth in this Lease. In addition, Lessor acknowledges
that: (i) Brokers have made no representations, promises or warranties
concerning Lessee's ability to honor the Lease or suitability to occupy the
Premises, and (ii) it is Lessor's sole responsibility to investigate the
ﬁnancial capability and/or suitability of all proposed tenants. 5. Lessee as
Prior Owner/Occupant . The warranties made by Lessor in Paragraph 2 shall be of
no force or eﬀect if immediately prior to the Start Date Lessee was the owner or
occupant of the Premises. In such event, Lessee shall be responsible for any
necessary corrective work. 3. Term. 1. Term . The Commencement Date, Expiration
Date and Original Term of this Lease are as speciﬁed in Paragraph 1.3. 2. Early
Possession . Any provision herein granting Lessee Early Possession of the
Premises is subject to and conditioned upon the Premises being available for
such possession prior to the Commencement Date . Any grant of Early Possession
only conveys a non exclusive right to occupy the Premises . If Lessee totally or
partially occupies the Premises prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such Early Possession . All
other terms of this Lease (including but not limited to the obligations to pay
Real Property Taxes and insurance premiums and to maintain the Premises) shall
be in eﬀect during such period . Any such Early Possession shall not aﬀect the
Expiration Date . 3. Delay In Possession . Lessor agrees to use its best
commercially reasonable eﬀorts to deliver possession of the Premises to Lessee
by the Commencement Date. If, despite said eﬀorts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure aﬀect the validity of this Lease or change the Expiration
Date. Lessee shall not, however, be obligated to pay Rent or perform its other
obligations until Lessor delivers INITIALS © 2019 AIR CRE. All Rights Reserved.
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possession of the Premises and any period of rent abatement that Lessee would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have enjoyed under
the terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If possession is not delivered within 60 days after the Commencement
Date, as the same may be extended under the terms of any Work Letter executed by
Parties, Lessee may, at its option, by notice in writing within 10 days after
the end of such 60 day period, cancel this Lease, in which event the Parties
shall be discharged from all obligations hereunder. If such written notice is
not received by Lessor within said 10 day period, Lessee's right to cancel shall
terminate. If possession of the Premises is not delivered within 120 days after
the Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing. 3.4 Lessee Compliance . Lessor
shall not be required to tender possession of the Premises to Lessee until
Lessee complies with its obligation to provide evidence of insurance (Paragraph
8.5). Pending delivery of such evidence, Lessee shall be required to perform all
of its obligations under this Lease from and after the Start Date, including the
payment of Rent, notwithstanding Lessor's election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to
perform any other conditions prior to or concurrent with the Start Date, the
Start Date shall occur but Lessor may elect to withhold possession until such
conditions are satisﬁed. 4. Rent. 1. Rent Deﬁned . All monetary obligations of
Lessee to Lessor under the terms of this Lease (except for the Security Deposit)
are deemed to be rent (" Rent "). 2. Payment . Lessee shall cause payment of
Rent to be received by Lessor in lawful money of the United States, without
oﬀset or deduction (except as speciﬁcally permitted in this Lease), on or before
the day on which it is due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate
such inaccuracy shall not constitute a waiver and Lessee shall be obligated to
pay the amount set forth in this Lease. Rent for any period during the term
hereof which is for less than one full calendar month shall be prorated based
upon the actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other persons or place as Lessor
may from time to time designate in writing. Acceptance of a payment which is
less than the amount then due shall not be a waiver of Lessor's rights to the
balance of such Rent, regardless of Lessor's endorsement of any check so
stating. In the event that any check, draft, or other instrument of payment
given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to
Lessor the sum of $25 in addition to any Late Charge and Lessor, at its option,
may require all future Rent be paid by cashier's check. Payments will be applied
ﬁrst to accrued late charges and attorney's fees, second to accrued interest,
then to Base Rent, Insurance and Real Property Taxes, and any remaining amount
to any other outstanding charges or costs. 3. Association Fees . In addition to
the Base Rent, Lessee shall pay to Lessor each month an amount equal to any
owner's association or condominium fees levied or assessed against the Premises.
Said monies shall be paid at the same time and in the same manner as the Base
Rent. 4. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount already due Lessor, for Rents
which will be due in the future, and/ or to reimburse or compensate Lessor for
any liability, expense, loss or damage which Lessor may suﬀer or incur by reason
thereof. If Lessor uses or applies all or any portion of the Security Deposit,
Lessee shall within 10 days after written request therefor deposit monies with
Lessor suﬃcient to restore said Security Deposit to the full amount required by
this Lease. If the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional monies with Lessor
so that the total amount of the Security Deposit shall at all times bear the
same proportion to the increased Base Rent as the initial Security Deposit bore
to the initial Base Rent. Should the Agreed Use be amended to accommodate a
material change in the business of Lessee or to accommodatea sublessee or
assignee, Lessor shall have the right to increase the Security Deposit to the
extent necessary, in Lessor's reasonable judgment, to account for any increased
wear and tear that the Premises may suﬀer as a result thereof. If a change in
control of Lessee occurs during this Lease and following such change the
ﬁnancial condition of Lessee is, in Lessor's reasonable judgment, signiﬁcantly
reduced, Lessee shall deposit such additional monies with Lessor as shall be
suﬃcient to cause the Security Deposit to be at a commercially reasonable level
based on such change in ﬁnancial condition. Lessor shall not be required to keep
the Security Deposit separate from its general accounts. Within 90 days after
the expiration or termination of this Lease, Lessor shall return that portion of
the Security Deposit not used or applied by Lessor. Lessor shall upon written
request provide Lessee with an accounting showing how that portion of the
Security Deposit that was not returned was applied. No part of the Security
Deposit shall be considered to be held in trust, to bear interest or to be
prepayment for any monies to be paid by Lessee under this Lease. THE SECURITY
DEPOSIT SHALL NOT BE USED BY LESSEE IN LIEU OF PAYMENT OF THE LAST MONTH'S RENT.
5. Use. 1. Use . Lessee shall use and occupy the Premises only for the Agreed
Use, or any other legal use which is reasonably comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that is unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or properties. Other than
guide, signal and seeing eye dogs, Lessee shall not keep or allow in the
Premises any pets, animals, birds, ﬁsh, or reptiles. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modiﬁcation of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the premises or the mechanical or
electrical systems therein, and/or is not signiﬁcantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after
such request give written notiﬁcation of same, which notice shall include an
explanation of Lessor's objections to the change in the Agreed Use. 2. Hazardous
Substances . (a) Reportable Uses Require Consent . The term " Hazardous
Substance " as used in this Lease shall mean any product, substance, or waste
whose presence, use, manufacture, disposal, transportation, or release, either
by itself or in combination with other materials expected to be on the Premises,
is either: (i) potentially injurious to the public health, safety or welfare,
the environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by products or fractions
thereof. Lessee shall not engage in any activity in or on the Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. " Reportable Use " shall mean (i) the installation or
use of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be ﬁled with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, ordinary oﬃce
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning
materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before
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Lease expiration or termination) of protective modiﬁcations (such as concrete
encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor .
If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance
has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice
of such fact to Lessor, and provide Lessor with a copy of any report, notice,
claim or other documentation which it has concerning the presence of such
Hazardous Substance. (c) Lessee Remediation . Lessee shall not cause or permit
any Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee's expense, comply with all Applicable Requirements and take
all investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of the Premises or neighboring
properties, that was caused or materially contributed to by Lessee, or
pertaining to or involving any Hazardous Substance brought onto the Premises
during the term of this Lease, by or for Lessee, or any third party. (d) Lessee
Indemniﬁcation . Lessee shall indemnify, defend and hold Lessor, its agents,
employees, lenders and ground lessor, if any, harmless from and against any and
all loss of rents and/or damages, liabilities, judgments, claims, expenses,
penalties, and attorneys' and consultants' fees arising out of or involving any
Hazardous Substance brought onto the Premises by or for Lessee, or any third
party (provided, however, that Lessee shall have no liability under this Lease
with respect to underground migration of any Hazardous Substance under the
Premises from adjacent properties not caused or contributed to by Lessee).
Lessee's obligations shall include, but not be limited to, the eﬀects of any
contamination or injury to person, property or the environment created or
suﬀered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances, unless speciﬁcally so agreed by Lessor in
writing at the time of such agreement. (e) Lessor Indemniﬁcation . Except as
otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall
indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which result from Hazardous Substances which existed on the
Premises prior to Lessee's occupancy or which are caused by the gross negligence
or willful misconduct of Lessor, its agents or employees. Lessor's obligations,
as and when required by the Applicable Requirements, shall include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease. (f)
Investigations and Remediations . Lessor shall retain the responsibility and pay
for any investigations or remediation measures required by governmental entities
having jurisdiction with respect to the existence of Hazardous Substances on the
Premises prior to Lessee's occupancy, unless such remediation measure is
required as a result of Lessee's use (including "Alterations", as deﬁned in
paragraph 7.3(a) below) of the Premises, in which event Lessee shall be
responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and Lessor's
agents to have reasonable access to the Premises at reasonable times in order to
carry out Lessor's investigative and remedial responsibilities. (g) Lessor
Termination Option . If a Hazardous Substance Condition (see Paragraph 9.1(e))
occurs during the term of this Lease, unless Lessee is legally responsible
therefor (in which case Lessee shall make the investigation and remediation
thereof required by the Applicable Requirements and this Lease shall continue in
full force and eﬀect, but subject to Lessor's rights under Paragraph 6.2(d) and
Paragraph 13), Lessor may, at Lessor's option, either (i) investigate and
remediate such Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall continue in full
force and eﬀect, or (ii) if the estimated cost to remediate such condition
exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater,
give written notice to Lessee, within 30 days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's
desire to terminate this Lease as of the date 60 days following the date of such
notice. In the event Lessor elects to give a termination notice, Lessee may,
within 10 days thereafter, give written notice to Lessor of Lessee's commitment
to pay the amount by which the cost of the remediation of such Hazardous
Substance Condition exceeds an amount equal to 12 times the then monthly Base
Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within 30 days following such
commitment. In such event, this Lease shall continue in full force and eﬀect,
and Lessor shall proceed to make such remediation as soon as reasonably possible
after the required funds are available. If Lessee does not give such notice and
provide the required funds or assurance thereof within the time provided, this
Lease shall terminate as of the date speciﬁed in Lessor's notice of termination.
3. Lessee's Compliance with Applicable Requirements . Except as otherwise
provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable ﬁre insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said
Applicable Requirements are now in eﬀect or become eﬀective after the Start
Date. Lessee shall, within 10 days after receipt of Lessor's written request,
provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee's compliance with any Applicable Requirements
speciﬁed by Lessor, and shall immediately upon receipt, notify Lessor in writing
(with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving the
failure of Lessee or the Premises to comply with any Applicable Requirements.
Likewise, Lessee shall immediately give written notice to Lessor of: (i) any
water damage to the Premises and any suspected seepage, pooling, dampness or
other condition conducive to the production of mold; or (ii) any mustiness or
other odors that might indicate the presence of mold in the Premises. In
addition, Lessee shall provide copies of all relevant material safety data
sheets ( MSDS ) to Lessor within 10 days of the receipt of a written request
therefor. In addition, Lessee shall provide Lessor with copies of its business
license, certiﬁcate of occupancy and/or any similar document within 10 days of
the receipt of a written request therefor. 4. Inspection; Compliance . Lessor
and Lessor's " Lender " (as deﬁned in Paragraph 30) and consultants authorized
by Lessor shall have the right to enter into Premises at any time, in the case
of an emergency, and otherwise at reasonable times after reasonable notice, for
the purpose of inspecting and/or testing the condition of the Premises and/or
for verifying compliance by Lessee with this Lease. The cost of any such
inspections shall be paid by Lessor, unless a violation of Applicable
Requirements, or a Hazardous Substance Condition (see paragraph 9.1) is found to
exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Lessee shall upon request reimburse Lessor
for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination. In addition, Lessee shall provide
copies of all relevant material safety data sheets ( MSDS ) to Lessor within 10
days of the receipt of a written request therefor. Lessee acknowledges that any
failure on its part to allow such inspections or testing will expose Lessor to
risks and potentially cause Lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely diﬃcult to ascertain. Accordingly,
should the Lessee fail to allow such inspections and/or testing in a timely
fashion the Base Rent shall be automatically increased, without any requirement
for notice to Lessee, by an amount equal to 10% of the then existing Base Rent
or $100, whichever is greater for the remainder to the Lease. The Parties agree
that such increase in Base Rent represents fair and reasonable compensation for
the additional risk/costs that Lessor will incur by reason of Lessee's failure
to allow such inspection and/or testing. Such increase in Base Rent shall in no
event constitute a waiver of Lessee's Default or Breach with respect to such
failure nor prevent the exercise of any of the other rights and remedies granted
hereunder. 7. Maintenance; Repairs; Utility Installations; Trade Fixtures and
Alterations. 1. Lessee's Obligations . (a) In General . Subject to the
provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee's
Compliance with Applicable Requirements), 7.2 (Lessor's Obligations), 9 (Damage
or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense,
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Lessee's exclusive use, no matter where located), and Alterations in good order,
condition and repair (whether or not the portion of the Premises requiring
repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, ﬁre protection system, ﬁxtures, walls (interior and exterior),
foundations, ceilings, roofs, roof drainage systems, ﬂoors, windows, doors,
plate glass, skylights, landscaping, driveways, parking lots, fences, retaining
walls, signs, sidewalks and parkways located in, on, or adjacent to the
Premises. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices, speciﬁcally including the
procurement and maintenance of the service contracts required by Paragraph
7.1(b) below. Lessee's obligations shall include restorations, replacements or
renewals when necessary to keep the Premises and all improvements thereon or a
part thereof in good order, condition and state of repair. Lessee shall, during
the term of this Lease, keep the exterior appearance of the Building in a ﬁrst
class condition (including, e.g. graﬃti removal) consistent with the exterior
appearance of other similar facilities of comparable age and size in the
vicinity, including, when necessary, the exterior repainting of the Building.
(b) Service Contracts . Lessee shall, at Lessee's sole expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for,
and with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Premises : (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) ﬁre
extinguishing systems, including ﬁre alarm and/or smoke detection, (iv)
landscaping and irrigation systems , (v) roof covering and drains, and (vi)
clariﬁers . However, Lessor reserves the right, upon notice to Lessee, to
procure and maintain any or all of such service contracts, and Lessee shall
reimburse Lessor, upon demand, for the cost thereof. (c) Failure to Perform . If
Lessee fails to perform Lessee's obligations under this Paragraph 7.1, Lessor
may enter upon the Premises after 10 days' prior written notice to Lessee
(except in the case of an emergency, in which case no notice shall be required),
perform such obligations on Lessee's behalf, and put the Premises in good order,
condition and repair, and Lessee shall promptly pay to Lessor a sum equal to
115% of the cost thereof. (d) Replacement . Subject to Lessee's indemniﬁcation
of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of
liability resulting from Lessee's failure to exercise and perform good
maintenance practices, if an item described in Paragraph 7.1(b) cannot be
repaired other than at a cost which is in excess of 50% of the cost of replacing
such item, then such item shall be replaced by Lessor, and the cost thereof
shall be prorated between the Parties and Lessee shall only be obligated to pay,
each month during the remainder of the term of this Lease, on the date on which
Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of
which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest on
the unamortized balance but may prepay its obligation at any time. 2. Lessor's
Obligations . Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 9 (Damage or Destruction) and 14 (Condemnation), it is intended by
the Parties hereto that Lessor have no obligation, in any manner whatsoever, to
repair and maintain the Premises, or the equipment therein, all of which
obligations are intended to be that of the Lessee. It is the intention of the
Parties that the terms of this Lease govern the respective obligations of the
Parties as to maintenance and repair of the Premises. 3. Utility Installations;
Trade Fixtures; Alterations . (a) Deﬁnitions . The term " Utility Installations
" refers to all ﬂoor and window coverings, air and/or vacuum lines, power
panels, electrical distribution, security and ﬁre protection systems,
communication cabling, lighting ﬁxtures, HVAC equipment, plumbing, and fencing
in or on the Premises. The term " Trade Fixtures " shall mean Lessee's machinery
and equipment that can be removed without doing material damage to the Premises.
The term "Alterations" shall mean any modiﬁcation of the improvements, other
than Utility Installations or Trade Fixtures, whether by addition or deletion. "
Lessee Owned Alterations and/or Utility Installations " are deﬁned as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a). (b) Consent . Lessee shall not make any
Alterations or Utility Installations to the Premises without Lessor's prior
written consent. Lessee may, however, make non structural Alterations or Utility
Installations to the interior of the Premises (excluding the roof) without such
consent but upon notice to Lessor, as long as they are not visible from the
outside, do not involve puncturing, relocating or removing the roof or any
existing walls, will not aﬀect the electrical, plumbing, HVAC, and/or life
safety systems, do not trigger the requirement for additional modiﬁcations
and/or improvements to the Premises resulting from Applicable Requirements, such
as compliance with Title 24, and the cumulative cost thereof during this Lease
as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate
or a sum equal to one month's Base Rent in any one year. Notwithstanding the
foregoing, Lessee shall not make or permit any roof penetrations and/or install
anything on the roof without the prior written approval of Lessor. Lessor may,
as a precondition to granting such approval, require Lessee to utilize a
contractor chosen and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of
the Lessor shall be presented to Lessor in written form with detailed plans.
Consent shall be deemed conditioned upon Lessee's: (i) acquiring all applicable
governmental permits, (ii) furnishing Lessor with copies of both the permits and
the plans and speciﬁcations prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable Requirements
in a prompt and expeditious manner. Any Alterations or Utility Installations
shall be performed in a workmanlike manner with good and suﬃcient materials.
Lessee shall promptly upon completion furnish Lessor with as built plans and
speciﬁcations. For work which costs an amount in excess of one month's Base
Rent, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to 150% of the estimated cost of such
Alteration or Utility Installation and/or upon Lessee's posting an additional
Security Deposit with Lessor. (c) Liens; Bonds . Lessee shall pay, when due, all
claims for labor or materials furnished or alleged to have been furnished to or
for Lessee at or for use on the Premises, which claims are or may be secured by
any mechanic's or materialmen's lien against the Premises or any interest
therein. Lessee shall give Lessor not less than 10 days notice prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the
right to post notices of non responsibility. If Lessee shall contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend and protect itself, Lessor and the Premises against the same and
shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof. If Lessor shall require, Lessee shall furnish a
surety bond in an amount equal to 150% of the amount of such contested lien,
claim or demand, indemnifying Lessor against liability for the same. If Lessor
elects to participate in any such action, Lessee shall pay Lessor's attorneys'
fees and costs. 4. Ownership; Removal; Surrender; and Restoration . (a)
Ownership . Subject to Lessor's right to require removal or elect ownership as
hereinafter provided, all Alterations and Utility Installations made by Lessee
shall be the property of Lessee, but considered a part of the Premises. Lessor
may, at any time, elect in writing to be the owner of all or any speciﬁed part
of the Lessee Owned Alterations and Utility Installations. Unless otherwise
instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the Premises. (b) Removal .
By delivery to Lessee of written notice from Lessor not earlier than 90 and not
later than 30 days prior to the end of the term of this Lease, Lessor may
require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent. (c) Surrender;
Restoration . Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of the improvements, parts and surfaces
thereof broom clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice. Notwithstanding the foregoing and the provisions of
Paragraph 7.1(a), if the Lessee occupies the Premises for 12 months or less,
then Lessee shall surrender the Premises in the same condition as delivered
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to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee
shall repair any damage occasioned by the installation, maintenance or removal
of Trade Fixtures, Lessee owned Alterations and/or Utility Installations,
furnishings, and equipment as well as the removal of any storage tank installed
by or for Lessee. Lessee shall also remove from the Premises any and all
Hazardous Substances brought onto the Premises by or for Lessee, or any third
party (except Hazardous Substances which were deposited via underground
migration from areas outside of the Premises) to the level speciﬁed in
Applicable Requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. Any personal property of Lessee not removed on or
before the Expiration Date or any earlier termination date shall be deemed to
have been abandoned by Lessee and may be disposed of or retained by Lessor as
Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant
to this Paragraph 7.4(c) without the express written consent of Lessor shall
constitute a holdover under the provisions of Paragraph 26 below. 8. Insurance;
Indemnity. 1. Payment For Insurance . Lessee shall pay for all insurance
required under Paragraph 8 except to the extent of the cost attributable to
liability insurance carried by Lessor under Paragraph 8.2(b) in excess of
$2,000,000 per occurrence. Premiums for policy periods commencing prior to or
extending beyond the Lease term shall be prorated to correspond to the Lease
term. Payment shall be made by Lessee to Lessor within 10 days following receipt
of an invoice. 2. Liability Insurance . (a) Carried by Lessee . Lessee shall
obtain and keep in force a Commercial General Liability policy of insurance
protecting Lessee and Lessor as an additional insured against claims for bodily
injury, personal injury and property damage based upon or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than $1,000,000 per occurrence with
an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an
additional insured by means of an endorsement at least as broad as the Insurance
Service Organization's "Additional Insured Managers or Lessors of Premises"
Endorsement. The policy shall not contain any intra insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an " insured contract " for the
performance of Lessee's indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee nor relieve
Lessee of any obligation hereunder. Lessee shall provide an endorsement on its
liability policy(ies) which provides that its insurance shall be primary to and
not contributory with any similar insurance carried by Lessor, whose insurance
shall be considered excess insurance only. (b) Carried by Lessor . Lessor shall
maintain liability insurance as described in Paragraph 8.2(a), in addition to,
and not in lieu of, the insurance required to be maintained by Lessee. Lessee
shall not be named as an additional insured therein . 3. Property Insurance
Building, Improvements and Rental Value . (a) Building and Improvements . The
Insuring Party shall obtain and keep in force a policy or policies in the name
of Lessor, with loss payable to Lessor, any ground lessor, and to any Lender
insuring loss or damage to the Premises . The amount of such insurance shall be
equal to the full insurable replacement cost of the Premises, as the same shall
exist from time to time, or the amount required by any Lender, but in no event
more than the commercially reasonable and available insurable value thereof.
Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee's
personal property shall be insured by Lessee not by Lessor. If the coverage is
available and commercially appropriate, such policy or policies shall insure
against all risks of direct physical loss or damage (except the perils of ﬂood
and/or earthquake unless required by a Lender), including coverage for debris
removal and the enforcement of any Applicable Requirements requiring the
upgrading, demolition, reconstruction or replacement of any portion of the
Premises as the result of a covered loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inﬂation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $5,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss. (b) Rental Value . The Insuring Party shall obtain and keep in force a
policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one year with an extended period
of indemnity for an additional 180 days ("Rental Value insurance"). Said
insurance shall contain an agreed valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted annually to reﬂect the
projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee
shall be liable for any deductible amount in the event of such loss. (c)
Adjacent Premises . If the Premises are part of a larger building, or of a group
of buildings owned by Lessor which are adjacent to the Premises, the Lessee
shall pay for any increase in the premiums for the property insurance of such
building or buildings if said increase is caused by Lessee's acts, omissions,
use or occupancy of the Premises. 4. Lessee's Property; Business Interruption
Insurance; Worker's Compensation Insurance . (a) Property Damage . Lessee shall
obtain and maintain insurance coverage on all of Lessee's personal property,
Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to
exceed $1,000 per occurrence. The proceeds from any such insurance shall be used
by Lessee for the replacement of personal property, Trade Fixtures and Lessee
Owned Alterations and Utility Installations. (b) Business Interruption . Lessee
shall obtain and maintain loss of income and extra expense insurance in amounts
as will reimburse Lessee for direct or indirect loss of earnings attributable to
all perils commonly insured against by prudent lessees in the business of Lessee
or attributable to prevention of access to the Premises as a result of such
perils. (c) Worker's Compensation Insurance . Lessee shall obtain and maintain
Worker's Compensation Insurance in such amount as may be required by Applicable
Requirements. Such policy shall include a 'Waiver of Subrogation' endorsement.
Lessee shall provide Lessor with a copy of such endorsement along with the
certiﬁcate of insurance or copy of the policy required by paragraph 8.5. (d) No
Representation of Adequate Coverage . Lessor makes no representation that the
limits or forms of coverage of insurance speciﬁed herein are adequate to cover
Lessee's property, business operations or obligations under this Lease. 4.
Insurance Policies . Insurance required herein shall be by companies maintaining
during the policy term a "General Policyholders Rating" of at least A , VII, as
set forth in the most current issue of "Best's Insurance Guide", or such other
rating as may be required by a Lender. Lessee shall not do or permit to be done
anything which invalidates the required insurance policies. Lessee shall, prior
to the Start Date, deliver to Lessor certiﬁed copies of policies of such
insurance or certiﬁcates with copies of the required endorsements evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modiﬁcation except after 30 days prior written notice
to Lessor. Lessee shall, at least 10 days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may increase his liability insurance
coverage and charge the cost thereof to Lessee, which amount shall be payable by
Lessee to Lessor upon demand. Such policies shall be for a term of at least one
year, or the length of the remaining term of this Lease, whichever is less. If
either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same. 6. Waiver of Subrogation . Without aﬀecting any other rights
or remedies, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or
damage to its property arising out of or incident to the perils required to be
insured against herein. The eﬀect of such releases and waivers is not limited by
the amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have INITIALS © 2019 AIR CRE. All Rights Reserved.
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their respective property damage insurance carriers waive any right to
subrogation that such companies may have against Lessor or Lessee, as the case
may be, so long as the insurance is not invalidated thereby. 7. Indemnity .
Except for Lessor's gross negligence or willful misconduct, Lessee shall
indemnify, protect, defend and hold harmless the Premises, Lessor and its
agents, Lessor's master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, liens, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities arising out of,
involving, or in connection with, a Breach of the Lease by Lessee and/or the use
and/or occupancy of the Premises and/or Project by Lessee and/or by Lessee's
employees, contractors or invitees. If any action or proceeding is brought
against Lessor by reason of any of the foregoing matters, Lessee shall upon
notice defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have ﬁrst paid any such claim in order to be defended or indemniﬁed. 8.
Exemption of Lessor and its Agents from Liability . Notwithstanding the
negligence or breach of this Lease by Lessor or its agents, neither Lessor nor
its agents shall be liable under any circumstances for: (i) injury or damage to
the person or goods, wares, merchandise or other property of Lessee, Lessee's
employees, contractors, invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from ﬁre, steam,
electricity, gas, water or rain, indoor air quality, the presence of mold or
from the breakage, leakage, obstruction or other defects of pipes, ﬁre
sprinklers, wires, appliances, plumbing, HVAC or lighting ﬁxtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, (ii) any damages arising from any
act or neglect of any other tenant of Lessor or from the failure of Lessor or
its agents to enforce the provisions of any other lease in the Project, or (iii)
injury to Lessee's business or for any loss of income or proﬁt therefrom.
Instead, it is intended that Lessee's sole recourse in the event of such damages
or injury be to ﬁle a claim on the insurance policy(ies) that Lessee is required
to maintain pursuant to the provisions of paragraph 8. 9. Failure to Provide
Insurance . Lessee acknowledges that any failure on its part to obtain or
maintain the insurance required herein will expose Lessor to risks and
potentially cause Lessor to incur costs not contemplated by this Lease, the
extent of which will be extremely diﬃcult to ascertain. Accordingly, for any
month or portion thereof that Lessee does not maintain the required insurance
and/or does not provide Lessor with the required binders or certiﬁcates
evidencing the existence of the required insurance, the Base Rent shall be
automatically increased, without any requirement for notice to Lessee, by an
amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by
reason of Lessee's failure to maintain the required insurance. Such increase in
Base Rent shall in no event constitute a waiver of Lessee's Default or Breach
with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of
its obligation to maintain the insurance speciﬁed in this Lease. 9. Damage or
Destruction. 1. Deﬁnitions . (a) " Premises Partial Damage " shall mean damage
or destruction to the improvements on the Premises, other than Lessee Owned
Alterations and Utility Installations, which can reasonably be repaired in 6
months or less from the date of the damage or destruction. Lessor shall notify
Lessee in writing within 30 days from the date of the damage or destruction as
to whether or not the damage is Partial or Total. (b) " Premises Total
Destruction " shall mean damage or destruction to the Premises, other than
Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired in 6 months or less from the date of the damage or
destruction. Lessor shall notify Lessee in writing within 30 days from the date
of the damage or destruction as to whether or not the damage is Partial or
Total. (c) " Insured Loss " shall mean damage or destruction to improvements on
the Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved. (d) " Replacement Cost " shall mean the cost to
repair or rebuild the improvements owned by Lessor at the time of the occurrence
to their condition existing immediately prior thereto, including demolition,
debris removal and upgrading required by the operation of Applicable
Requirements, and without deduction for depreciation. (e) " Hazardous Substance
Condition " shall mean the occurrence or discovery of a condition involving the
presence of, or a contamination by, a Hazardous Substance, in, on, or under the
Premises which requires restoration. 1. Partial Damage Insured Loss . If a
Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at
Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee
Owned Alterations and Utility Installations) as soon as reasonably possible and
this Lease shall continue in full force and eﬀect; provided, however, that
Lessee shall, at Lessor's election, make the repair of any damage or destruction
the total cost to repair of which is $10,000 or less, and, in such event, Lessor
shall make any applicable insurance proceeds available to Lessee on a reasonable
basis for that purpose. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds are not suﬃcient to eﬀect such
repair, the Insuring Party shall promptly contribute the shortage in proceeds
(except as to the deductible which is Lessee's responsibility) as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee
provides Lessor with the funds to cover same, or adequate assurance thereof,
within 10 days following receipt of written notice of such shortage and request
therefor. If Lessor receives said funds or adequate assurance thereof within
said 10 day period, the party responsible for making the repairs shall complete
them as soon as reasonably possible and this Lease shall remain in full force
and eﬀect. If such funds or assurance are not received, Lessor may nevertheless
elect by written notice to Lessee within 10 days thereafter to: (i) make such
restoration and repair as is commercially reasonable with Lessor paying any
shortage in proceeds, in which case this Lease shall remain in full force and
eﬀect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be
entitled to reimbursement of any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to ﬂood or earthquake shall
be subject to Paragraph 9.3, notwithstanding that there may be some insurance
coverage, but the net proceeds of any such insurance shall be made available for
the repairs if made by either Party. 3. Partial Damage Uninsured Loss . If a
Premises Partial Damage that is not an Insured Loss occurs, unless caused by a
negligent or willful act of Lessee (in which event Lessee shall make the repairs
at Lessee's expense), Lessor may either: (i) repair such damage as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and eﬀect, or (ii) terminate this Lease by giving written
notice to Lessee within 30 days after receipt by Lessor of knowledge of the
occurrence of such damage. Such termination shall be eﬀective 60 days following
the date of such notice. In the event Lessor elects to terminate this Lease,
Lessee shall have the right within 10 days after receipt of the termination
notice to give written notice to Lessor of Lessee's commitment to pay for the
repair of such damage without reimbursement from Lessor. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within 30 days after
making such commitment. In such event this Lease shall continue in full force
and eﬀect, and Lessor shall proceed to make such repairs as soon as reasonably
possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date speciﬁed in the
termination notice. 4. Total Destruction . Notwithstanding any other provision
hereof, if a Premises Total Destruction occurs, this Lease shall terminate 60
days following such Destruction. If the damage or destruction was caused by the
gross negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
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5. Damage Near End of Term . If at any time during the last 6 months of this
Lease there is damage for which the cost to repair exceeds one month's Base
Rent, whether or not an Insured Loss, Lessor may terminate this Lease eﬀective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage in insurance proceeds (or adequate assurance thereof) needed to
make the repairs on or before the earlier of (i) the date which is 10 days after
Lessee's receipt of Lessor's written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's commercially reasonable expense, repair such damage as soon
as reasonably possible and this Lease shall continue in full force and eﬀect. If
Lessee fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate on the date speciﬁed in the
termination notice and Lessee's option shall be extinguished. 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, the Rent payable by Lessee for
the period required for the repair, remediation or restoration of such damage
shall be abated in proportion to the degree to which Lessee's use of the
Premises is impaired, but not to exceed the proceeds received from the Rental
Value insurance. All other obligations of Lessee hereunder shall be performed by
Lessee, and Lessor shall have no liability for any such damage, destruction,
remediation, repair or restoration except as provided herein. (b) Remedies . If
Lessor is obligated to repair or restore the Premises and does not commence, in
a substantial and meaningful way, such repair or restoration within 90 days
after such obligation shall accrue, Lessee may, at any time prior to the
commencement of such repair or restoration, give written notice to Lessor and to
any Lenders of which Lessee has actual notice, of Lessee's election to terminate
this Lease on a date not less than 60 days following the giving of such notice.
If Lessee gives such notice and such repair or restoration is not commenced
within 30 days thereafter, this Lease shall terminate as of the date speciﬁed in
said notice. If the repair or restoration is commenced within such 30 days, this
Lease shall continue in full force and eﬀect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever ﬁrst occurs. 7.
Termination; Advance Payments . Upon termination of this Lease pursuant to
Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor. 10. Real
Property Taxes. 1. Deﬁnition . As used herein, the term " Real Property Taxes "
shall include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Lessor in the Premises or the
Project, Lessor's right to other income therefrom, and/or Lessor's business of
leasing, by any authority having the direct or indirect power to tax and where
the funds are generated with reference to the Building address. Real Property
Taxes shall also include any tax, fee, levy, assessment or charge, or any
increase therein: (i) imposed by reason of events occurring during the term of
this Lease, including but not limited to, a change in the ownership of the
Premises, and (ii) levied or assessed on machinery or equipment provided by
Lessor to Lessee pursuant to this Lease. 2. Payment of Taxes . In addition to
Base Rent, Lessee shall pay to Lessor an amount equal to the Real Property Tax
installment due at least 20 days prior to the applicable delinquency date . If
any such installment shall cover any period of time prior to or after the
expiration or termination of this Lease, Lessee's share of such installment
shall be prorated . In the event Lessee incurs a late charge on any Rent
payment, Lessor may estimate the current Real Property Taxes, and require that
such taxes be paid in advance to Lessor by Lessee monthly in advance with the
payment of the Base Rent. Such monthly payments shall be an amount equal to the
amount of the estimated installment of taxes divided by the number of months
remaining before the month in which said installment becomes delinquent. When
the actual amount of the applicable tax bill is known, the amount of such equal
monthly advance payments shall be adjusted as required to provide the funds
needed to pay the applicable taxes. If the amount collected by Lessor is
insuﬃcient to pay such Real Property Taxes when due, Lessee shall pay Lessor,
upon demand, such additional sum as is necessary. Advance payments may be
intermingled with other moneys of Lessor and shall not bear interest. In the
event of a Breach by Lessee in the performance of its obligations under this
Lease, then any such advance payments may be treated by Lessor as an additional
Security Deposit. 3. Joint Assessment . If the Premises are not separately
assessed, Lessee's liability shall be an equitable proportion of the Real
Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be conclusively determined by Lessor from
the respective valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. 4. Personal Property Taxes . Lessee
shall pay, prior to delinquency, all taxes assessed against and levied upon
Lessee Owned Alterations, Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee. When possible, Lessee shall cause
its Lessee Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of Lessor. If any of Lessee's said property
shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee's property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee's property. 11. Utilities
and Services. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered or billed to Lessee, Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered or
billed. There shall be no abatement of rent and Lessor shall not be liable in
any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor's reasonable control or
in cooperation with governmental request or directions. Within ﬁfteen days of
Lessor’s written request, Lessee agrees to deliver to Lessor such information,
documents and/or authorization as Lessor needs in order for Lessor to comply
with new or existing Applicable Requirements relating to commercial building
energy usage, ratings, and/or the reporting thereof. 12. Assignment and
Subletting. 1. Lessor's Consent Required . (a) Lessee shall not voluntarily or
by operation of law assign, transfer, mortgage or encumber (collectively, "
assign or assignment ") or sublet all or any part of Lessee's interest in this
Lease or in the Premises without Lessor's prior written consent. (b) Unless
Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lessee shall constitute an assignment
requiring consent . The transfer, on a cumulative basis, of 50 25 % or more of
the voting control of Lessee shall constitute a change in control for this
purpose . (c) The involvement of Lessee or its assets in any transaction, or
series of transactions (by way of merger, sale, acquisition, ﬁnancing, transfer,
leveraged buy out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
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Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was
represented at the time of the execution of this Lease or at the time of the
most recent assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions constituting such
reduction, whichever was or is greater, shall be considered an assignment of
this Lease to which Lessor may withhold its consent. " Net Worth of Lessee "
shall mean the net worth of Lessee (excluding any guarantors) established under
generally accepted accounting principles. (d) An assignment or subletting
without consent shall, at Lessor's option, be a Default curable after notice per
Paragraph 13.1(d), or a noncurable Breach without the necessity of any notice
and grace period. If Lessor elects to treat such unapproved assignment or
subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease,
or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of
the Base Rent then in eﬀect. Further, in the event of such Breach and rental
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to 110% of the price previously
in eﬀect, and (ii) all ﬁxed and non ﬁxed rental adjustments scheduled during the
remainder of the Lease term shall be increased to 110% of the scheduled adjusted
rent. (e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be
limited to compensatory damages and/or injunctive relief. (f) Lessor may
reasonably withhold consent to a proposed assignment or subletting if Lessee is
in Default at the time consent is requested. (g) Notwithstanding the foregoing,
allowing a de minimis portion of the Premises, ie. 20 square feet or less, to be
used by a third party vendor in connection with the installation of a vending
machine or payphone shall not constitute a subletting. 2. Terms and Conditions
Applicable to Assignment and Subletting . (a) Regardless of Lessor's consent, no
assignment or subletting shall : (i) be eﬀective without the express written
assumption by such assignee or sublessee of the obligations of Lessee under this
Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the
primary liability of Lessee for the payment of Rent or for the performance of
any other obligations to be performed by Lessee. (b) Lessor may accept Rent or
performance of Lessee's obligations from any person other than Lessee pending
approval or disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor's right to exercise its remedies for
Lessee's Default or Breach. (c) Lessor's consent to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting. (d)
In the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone else responsible for the performance of
Lessee's obligations under this Lease, including any assignee or sublessee,
without ﬁrst exhausting Lessor's remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor. (e) Each request
for consent to an assignment or subletting shall be in writing, accompanied by
information relevant to Lessor's determination as to the ﬁnancial and
operational responsibility and appropriateness of the proposed assignee or
sublessee, including but not limited to the intended use and/or required
modiﬁcation of the Premises, if any, together with a fee of $500 as
consideration for Lessor's considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested. (See also Paragraph 36) (f) Any
assignee of, or sublessee under, this Lease shall, by reason of accepting such
assignment, entering into such sublease, or entering into possession of the
Premises or any portion thereof, be deemed to have assumed and agreed to conform
and comply with each and every term, covenant, condition and obligation herein
to be observed or performed by Lessee during the term of said assignment or
sublease, other than such obligations as are contrary to or inconsistent with
provisions of an assignment or sublease to which Lessor has speciﬁcally
consented to in writing. (g) Lessor's consent to any assignment or subletting
shall not transfer to the assignee or sublessee any Option granted to the
original Lessee by this Lease unless such transfer is speciﬁcally consented to
by Lessor in writing. (See Paragraph 39.2) 2. Additional Terms and Conditions
Applicable to Subletting . The following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein: (a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all Rent payable on any sublease, and Lessor may collect such Rent
and apply same toward Lessee's obligations under this Lease; provided, however,
that until a Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. In the event that the amount collected by Lessor
exceeds Lessee's then outstanding obligations any such excess shall be refunded
to Lessee. Lessor shall not, by reason of the foregoing or any assignment of
such sublease, nor by reason of the collection of Rent, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee. Lessee hereby irrevocably authorizes and directs
any such sublessee, upon receipt of a written notice from Lessor stating that a
Breach exists in the performance of Lessee's obligations under this Lease, to
pay to Lessor all Rent due and to become due under the sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents to Lessor without
any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary. (b) In the event of a
Breach by Lessee, Lessor may, at its option, require sublessee to attorn to
Lessor, in which event Lessor shall undertake the obligations of the sublessor
under such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not be liable for
any prepaid rents or security deposit paid by such sublessee to such sublessor
or for any prior Defaults or Breaches of such sublessor. (c) Any matter
requiring the consent of the sublessor under a sublease shall also require the
consent of Lessor. (d) No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's prior written consent. (e) Lessor shall
deliver a copy of any notice of Default or Breach by Lessee to the sublessee,
who shall have the right to cure the Default of Lessee within the grace period,
if any, speciﬁed in such notice . The sublessee shall have a right of
reimbursement and oﬀset from and against Lessee for any such Defaults cured by
the sublessee . 13. Default; Breach; Remedies. 1. Default; Breach . A " Default
" is deﬁned as a failure by the Lessee to comply with or perform any of the
terms, covenants, conditions or Rules and Regulations under this Lease. A "
Breach " is deﬁned as the occurrence of one or more of the following Defaults,
and the failure of Lessee to cure such Default within any applicable grace
period: (a) The abandonment of the Premises; 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 minimize
potential vandalism. (b) The failure of Lessee to make any payment of Rent or
any Security Deposit required to be made by Lessee hereunder, whether to Lessor
or to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulﬁll any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of 3
business days following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A
PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY
OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE
PREMISES. (c) The failure of Lessee to allow Lessor and/or its agents access to
the Premises or the commission of waste, act or acts constituting public or
private nuisance, and/or an illegal activity on the Premises by Lessee, where
such actions continue for a period of 10 3 business days following written
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event that Lessee commits waste, a nuisance or an illegal activity a second time
then, the Lessor may elect to treat such conduct as a non curable Breach rather
than a Default. (d) The failure by Lessee to provide (i) reasonable written
evidence of compliance with Applicable Requirements, (ii) the service contracts,
(iii) the rescission of an unauthorized assignment or subletting, (iv) an
Estoppel Certiﬁcate or ﬁnancial statements, (v) a requested subordination, (vi)
evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease, where any such failure continues for a period of 10
days following written notice to Lessee. (e) A Default by Lessee as to the
terms, covenants, conditions or provisions of this Lease, or of the rules
adopted under Paragraph 40 hereof, other than those described in subparagraphs
13.1(a), (b), (c) or (d), above, where such Default continues for a period of 30
days after written notice; provided, however, that if the nature of Lessee's
Default is such that more than 30 days are reasonably required for its cure,
then it shall not be deemed to be a Breach if Lessee commences such cure within
said 30 day period and thereafter diligently prosecutes such cure to completion.
(f) The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the beneﬁt of creditors; (ii) becoming a " debtor
" as deﬁned in 11 U.S.C. Α 101 or any successor statute thereto (unless, in the
case of a petition ﬁled against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within 30
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within 30 days;
provided, however, in the event that any provision of this subparagraph is
contrary to any applicable law, such provision shall be of no force or eﬀect,
and not aﬀect the validity of the remaining provisions. (g) The discovery that
any ﬁnancial statement of Lessee or of any Guarantor given to Lessor was
materially false. (h) If the performance of Lessee's obligations under this
Lease is guaranteed: (i) the death of a Guarantor, (ii) the termination of a
Guarantor's liability with respect to this Lease other than in accordance with
the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the
subject of a bankruptcy ﬁling, (iv) a Guarantor's refusal to honor the guaranty,
or (v) a Guarantor's breach of its guaranty obligation on an anticipatory basis,
and Lessee's failure, within 60 days following written notice of any such event,
to provide written alternative assurance or security, which, when coupled with
the then existing resources of Lessee, equals or exceeds the combined ﬁnancial
resources of Lessee and the Guarantors that existed at the time of execution of
this Lease. 2. Remedies . If Lessee fails to perform any of its aﬃrmative duties
or obligations, within 30 10 days after written notice (or in case of an
emergency, without notice), Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses, permits
or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs
and expenses incurred by Lessor in such performance upon receipt of an invoice
therefor. In the event of a Breach, Lessor may, with or without further notice
or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach: (a) Terminate Lessee's right to
possession of the Premises by any lawful means, in which case this Lease shall
terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which
had been earned at the time of termination; (ii) the worth at the time of award
of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
the Lessee proves could have been reasonably avoided; (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other amount necessary to
compensate Lessor for all the detriment proximately caused by the Lessee's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including but not limited
to the cost of recovering possession of the Premises, expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and that portion of any leasing commission paid by Lessor in
connection with this Lease applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of the District within which the
Premises are located at the time of award plus one percent. Eﬀorts by Lessor to
mitigate damages caused by Lessee's Breach of this Lease shall not waive
Lessor's right to recover any damages to which Lessor is otherwise entitled. If
termination of this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such proceeding any unpaid
Rent and damages as are recoverable therein, or Lessor may reserve the right to
recover all or any part thereof in a separate suit. If a notice and grace period
required under Paragraph 13.1 was not previously given, a notice to pay rent or
quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the
applicable grace period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure the Default
within the greater of the two such grace periods shall constitute both an
unlawful detainer and a Breach of this Lease entitling Lessor to the remedies
provided for in this Lease and/or by said statute. (b) Continue the Lease and
Lessee's right to possession and recover the Rent as it becomes due, in which
event Lessee may sublet or assign, subject only to reasonable limitations. Acts
of maintenance, eﬀorts to relet, and/or the appointment of a receiver to protect
the Lessor's interests, shall not constitute a termination of the Lessee's right
to possession. (c) Pursue any other remedy now or hereafter available under the
laws or judicial decisions of the state wherein the Premises are located. The
expiration or termination of this Lease and/or the termination of Lessee's right
to possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises. 3. Inducement
Recapture. Any agreement for free or abated rent or other charges, the cost of
tenant improvements for Lessee paid for or performed by Lessor, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as " Inducement Provisions ," shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease. Upon Breach of this Lease by
Lessee, any such Inducement Provision shall automatically be deemed deleted from
this Lease and of no further force or eﬀect, and any rent, other charge, bonus,
inducement or consideration theretofore abated, given or paid by Lessor under
such an Inducement Provision shall be immediately due and payable by Lessee to
Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless speciﬁcally so stated in writing by Lessor
at the time of such acceptance. 4. Late Charges . Lessee hereby acknowledges
that late payment by Lessee of Rent will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely diﬃcult
to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any
Lender. Accordingly, if any Rent shall not be received by Lessor within 10 5
days after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall immediately pay to Lessor a one time late charge equal to 2
10 % of each such overdue amount or $100, whichever is greater. The Parties
hereby agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of such late payment. Acceptance of such
late charge by Lessor shall in no event constitute a waiver of Lessee's Default
or Breach with respect to such overdue amount, nor prevent the exercise of any
of the other rights and remedies granted hereunder. In the event that a late
charge is payable hereunder, whether or not collected, for 3 consecutive
installments of Base Rent, then notwithstanding any provision of this Lease to
the contrary, Base Rent shall, at Lessor's option, become due and payable
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advance. 5. Interest . Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due shall bear interest from the 31st
day after it was due. The interest (" Interest ") charged shall be computed at
the rate of 10% per annum but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late charge provided for in
Paragraph 13.4. 6. Breach by Lessor . (a) Notice of Breach . Lessor shall not be
deemed in breach of this Lease unless Lessor fails within a reasonable time to
perform an obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be less than 30 days after
receipt by Lessor, and any Lender whose name and address shall have been
furnished to Lessee in writing for such purpose, of written notice specifying
wherein such obligation of Lessor has not been performed; provided, however,
that if the nature of Lessor's obligation is such that more than 30 days are
reasonably required for its performance, then Lessor shall not be in breach if
performance is commenced within such 30 day period and thereafter diligently
pursued to completion. (b) Performance by Lessee on Behalf of Lessor . In the
event that neither Lessor nor Lender cures said breach within 30 days after
receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said breach at Lessee's
expense and oﬀset from Rent the actual and reasonable cost to perform such cure,
provided, however, that such oﬀset shall not exceed an amount equal to the
greater of one month's Base Rent or the Security Deposit, reserving Lessee's
right to seek reimbursement from Lessor for any such expense in excess of such
oﬀset. Lessee shall document the cost of said cure and supply said documentation
to Lessor. 14. Condemnation. If the Premises or any portion thereof are taken
under the power of eminent domain or sold under the threat of the exercise of
said power (collectively " Condemnation "), this Lease shall terminate as to the
part taken as of the date the condemning authority takes title or possession,
whichever ﬁrst occurs. If more than 10% of the Building, or more than 25% of
that portion of the Premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee's option, to be exercised in writing within
10 days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within 10 days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and eﬀect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in value
of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation paid by the
condemnor for Lessee's relocation expenses, loss of business goodwill and/or
Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only,
shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease
is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation. 15. Brokerage Fees. 1. Additional
Commission . In addition to the payments owed pursuant to Paragraph 1.9 above,
Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee or anyone
aﬃliated with Lessee acquires any rights to the Premises or other premises owned
by Lessor and located within the same Project, if any, within which the Premises
is located, (c) if Lessee remains in possession of the Premises, with the
consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is
increased, whether by agreement or operation of an escalation clause herein,
then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the
Brokers in eﬀect at the time the Lease was executed. 2. Assumption of
Obligations . Any buyer or transferee of Lessor's interest in this Lease shall
be deemed to have assumed Lessor's obligation hereunder. Brokers shall be third
party beneﬁciaries of the provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor
fails to pay to Brokers any amounts due as and for brokerage fees pertaining to
this Lease when due, then such amounts shall accrue Interest. In addition, if
Lessor fails to pay any amounts to Lessee's Broker when due, Lessee's Broker may
send written notice to Lessor and Lessee of such failure and if Lessor fails to
pay such amounts within 10 days after said notice, Lessee shall pay said monies
to its Broker and oﬀset such amounts against Rent. In addition, Lessee's Broker
shall be deemed to be a third party beneﬁciary of any commission agreement
entered into by and/or between Lessor and Lessor's Broker for the limited
purpose of collecting any brokerage fee owed. 3. Representations and Indemnities
of Broker Relationships . Lessee and Lessor each represent and warrant to the
other that it has had no dealings with any person, ﬁrm, broker, agent or ﬁnder
(other than the Brokers and Agents, if any) in connection with this Lease, and
that no one other than said named Brokers and Agents is entitled to any
commission or ﬁnder's fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such
unnamed broker, ﬁnder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, attorneys'
fees reasonably incurred with respect thereto. 16. Estoppel Certiﬁcates. (a)
Each Party (as " Responding Party ") shall within 10 days after written notice
from the other Party (the " Requesting Party ") execute, acknowledge and deliver
to the Requesting Party a statement in writing in form similar to the then most
current " Estoppel Certiﬁcate " form published BY AIR CRE, plus such additional
information, conﬁrmation and/or statements as may be reasonably requested by the
Requesting Party. (b) If the Responding Party shall fail to execute or deliver
the Estoppel Certiﬁcate within such 10 day period, the Requesting Party may
execute an Estoppel Certiﬁcate stating that: (i) the Lease is in full force and
eﬀect without modiﬁcation except as may be represented by the Requesting Party,
(ii) there are no uncured defaults in the Requesting Party's performance, and
(iii) if Lessor is the Requesting Party, not more than one month's rent has been
paid in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certiﬁcate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certiﬁcate. In
addition, Lessee acknowledges that any failure on its part to provide such an
Estoppel Certiﬁcate will expose Lessor to risks and potentially cause Lessor to
incur costs not contemplated by this Lease, the extent of which will be
extremely diﬃcult to ascertain. Accordingly, should the Lessee fail to execute
and/or deliver a requested Estoppel Certiﬁcate in a timely fashion the monthly
Base Rent shall be automatically increased, without any requirement for notice
to Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever is greater for remainder of the Lease. The Parties agree that such
increase in Base Rent represents fair and reasonable compensation for the
additional risk/costs that Lessor will incur by reason of Lessee's failure to
provide the Estoppel Certiﬁcate. Such increase in Base Rent shall in no event
constitute a waiver of Lessee's Default or Breach with respect to the failure to
provide the Estoppel Certiﬁcate nor prevent the exercise of any of the other
rights and remedies granted hereunder. (c) If Lessor desires to ﬁnance,
reﬁnance, or sell the Premises, or any part thereof, Lessee and all Guarantors
shall within 10 days after written notice from Lessor deliver to any potential
lender or purchaser designated by Lessor such ﬁnancial statements as may be
reasonably required by such lender or purchaser, including but not limited to
Lessee's ﬁnancial statements for the past 3 years. All such ﬁnancial statements
shall be received by Lessor and such lender or purchaser in conﬁdence and shall
be used only for the purposes herein set forth. 17. Deﬁnition of Lessor. The
term " Lessor " as used herein shall mean the owner or owners at the time in
question of the fee title to the Premises, or, if this is a INITIALS © 2019 AIR
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sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery
of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall
be binding only upon the Lessor as hereinabove deﬁned. 18. Severability. The
invalidity of any provision of this Lease, as determined by a court of competent
jurisdiction, shall in no way aﬀect the validity of any other provision hereof.
19. Days. Unless otherwise speciﬁcally indicated to the contrary, the word "
days " as used in this Lease shall mean and refer to calendar days. 20.
Limitation on Liability. The obligations of Lessor under this Lease shall not
constitute personal obligations of Lessor, or its partners, members, directors,
oﬃcers or shareholders, and Lessee shall look to the Premises, and to no other
assets of Lessor, for the satisfaction of any liability of Lessor with respect
to this Lease, and shall not seek recourse against Lessor's partners, members,
directors, oﬃcers or shareholders, or any of their personal assets for such
satisfaction. 21. Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease. 22. No Prior or Other Agreements; Broker Disclaimer . This Lease
contains all agreements between the Parties with respect to any matter mentioned
herein, and no other prior or contemporaneous agreement or understanding shall
be eﬀective. Lessor and Lessee each represents and warrants to the Brokers that
it has made, and is relying solely upon, its own investigation as to the nature,
quality, character and ﬁnancial responsibility of the other Party to this Lease
and as to the use, nature, quality and character of the Premises. Brokers have
no responsibility with respect thereto or with respect to any default or breach
hereof by either Party. 23. Notices. 1. Notice Requirements . All notices
required or permitted by this Lease or applicable law shall be in writing and
may be delivered in person (by hand or by courier) or may be sent by regular,
certiﬁed or registered mail or U.S. Postal Service Express Mail, with postage
prepaid, or by facsimile transmission, or by email, and shall be deemed
suﬃciently given if served in a manner speciﬁed in this Paragraph 23. The
addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notices. Either Party may by written
notice to the other specify a diﬀerent address for notice, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing. 2. Date of Notice . Any
notice sent by registered or certiﬁed mail, return receipt requested, shall be
deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail the notice
shall be deemed given 72 hours after the same is addressed as required herein
and mailed with postage prepaid . Notices delivered by United States Express
Mail or overnight courier that guarantees next day delivery shall be deemed
given 24 hours after delivery of the same to the Postal Service or courier .
Notices delivered by hand, or transmitted by facsimile transmission or by email
shall be deemed delivered upon actual receipt . If notice is received on a
Saturday, Sunday or legal holiday, it shall be deemed received on the next
business day . 3. Options. Notwithstanding the foregoing, in order to exercise
any Options (see paragraph 39), the Notice must be sent by Certiﬁed Mail (return
receipt requested), Express Mail (signature required), courier (signature
required) or some other methodology that provides a receipt establishing the
date the notice was received by the Lessor. 18. Waivers. (a) No waiver by Lessor
of the Default or Breach of any term, covenant or condition hereof by Lessee,
shall be deemed a waiver of any other term, covenant or condition hereof, or of
any subsequent Default or Breach by Lessee of the same or of any other term,
covenant or condition hereof. Lessor's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Lessor's consent to, or
approval of, any subsequent or similar act by Lessee, or be construed as the
basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. (b) The acceptance of Rent by Lessor shall not be a
waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted
by Lessor on account of monies or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or eﬀect whatsoever
unless speciﬁcally agreed to in writing by Lessor at or before the time of
deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE
SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS
INCONSISTENT WITH THIS LEASE. 25. Disclosures Regarding The Nature of a Real
Estate Agency Relationship. (a) When entering into a discussion with a real
estate agent regarding a real estate transaction, a Lessor or Lessee should from
the outset understand what type of agency relationship or representation it has
with the agent or agents in the transaction. Lessor and Lessee acknowledge being
advised by the Brokers in this transaction, as follows: (i) Lessor's Agent . A
Lessor's agent under a listing agreement with the Lessor acts as the agent for
the Lessor only. A Lessor's agent or subagent has the following aﬃrmative
obligations: To the Lessor : A ﬁduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Lessor. To the Lessee and the Lessor : (a)
Diligent exercise of reasonable skills and care in performance of the agent's
duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to
disclose all facts known to the agent materially aﬀecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any conﬁdential information obtained from the other Party which
does not involve the aﬃrmative duties set forth above. (ii) Lessee's Agent . An
agent can agree to act as agent for the Lessee only. In these situations, the
agent is not the Lessor's agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part from the Lessor.
An agent acting only for a Lessee has the following aﬃrmative obligations. To
the Lessee : A ﬁduciary duty of utmost care, integrity, honesty, and loyalty in
dealings with the Lessee. To the Lessee and the Lessor : (a) Diligent exercise
of reasonable skills and care in performance of the agent's duties. (b) A duty
of honest and fair dealing and good faith. (c) A duty to disclose all facts
known to the agent materially aﬀecting the value or desirability of the property
that are not known to, or within the diligent attention and observation of, the
Parties. An agent is not obligated to reveal to either Party any conﬁdential
information obtained from the other Party which does not involve the aﬃrmative
duties set forth above. (iii) Agent Representing Both Lessor and Lessee . A real
estate agent, either acting directly or through one or more associate licenses,
can legally be the agent of both the Lessor and the Lessee in a transaction, but
only with the knowledge and consent of both the Lessor and the Lessee. In a dual
agency situation, the agent has the following aﬃrmative obligations to both the
Lessor and the Lessee: (a) A ﬁduciary duty of utmost care, integrity, honesty
and loyalty in the dealings with either Lessor or the Lessee. (b) Other duties
to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In
representing both Lessor and Lessee, the agent may not, without the express
permission of the respective Party, disclose to the other Party conﬁdential
information, including, but not limited to, facts relating INITIALS © 2019 AIR
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to either Lessee’s or Lessor’s ﬁnancial position, motivations, bargaining
position, or other personal information that may impact rent, including Lessor’s
willingness to accept a rent less than the listing rent or Lessee’s willingness
to pay rent greater than the rent oﬀered. The above duties of the agent in a
real estate transaction do not relieve a Lessor or Lessee from the
responsibility to protect their own interests. Lessor and Lessee should
carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualiﬁed to
advise about real estate. If legal or tax advice is desired, consult a competent
professional. Both Lessor and Lessee should strongly consider obtaining tax
advice from a competent professional because the federal and state tax
consequences of a transaction can be complex and subject to change. (b) Brokers
have no responsibility with respect to any default or breach hereof by either
Party. The Parties agree that no lawsuit or other legal proceeding involving any
breach of duty, error or omission relating to this Lease may be brought against
Broker more than one year after the Start Date and that the liability (including
court costs and attorneys' fees), of any Broker with respect to any such lawsuit
and/or legal proceeding shall not exceed the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing limitation on each
Broker's liability shall not be applicable to any gross negligence or willful
misconduct of such Broker. (c) Lessor and Lessee agree to identify to Brokers as
"Conﬁdential" any communication or information given Brokers that is considered
by such Party to be conﬁdential. 26. No Right To Holdover . Lessee has no right
to retain possession of the Premises or any part thereof beyond the expiration
or termination of this Lease. In the event that Lessee holds over, then the Base
Rent shall be increased to 150% of the Base Rent applicable immediately
preceding the expiration or termination. Holdover Base Rent shall be calculated
on monthly basis. Nothing contained herein shall be construed as consent by
Lessor to any holding over by Lessee. 27. Cumulative Remedies. No remedy or
election hereunder shall be deemed exclusive but shall, wherever possible, be
cumulative with all other remedies at law or in equity. 28. Covenants and
Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In construing
this Lease, all headings and titles are for the convenience of the Parties only
and shall not be considered a part of this Lease. Whenever required by the
context, the singular shall include the plural and vice versa. This Lease shall
not be construed as if prepared by one of the Parties, but rather according to
its fair meaning as a whole, as if both Parties had prepared it. 29. Binding
Eﬀect ; Choice of Law . This Lease shall be binding upon the Parties, their
personal representatives, successors and assigns and be governed by the laws of
the State in which the Premises are located . Any litigation between the Parties
hereto concerning this Lease shall be initiated in the county in which the
Premises are located . Signatures to this Lease accomplished by means of
electronic signature or similar technology shall be legal and binding . 30.
Subordination; Attornment; Non Disturbance. 1. Subordination . This Lease and
any Option granted hereby shall be subject and subordinate to any ground lease,
mortgage, deed of trust, or other hypothecation or security device
(collectively, " Security Device "), now or hereafter placed upon the Premises,
to any and all advances made on the security thereof, and to all renewals,
modiﬁcations, and extensions thereof. Lessee agrees that the holders of any such
Security Devices (in this Lease together referred to as " Lender ") shall have
no liability or obligation to perform any of the obligations of Lessor under
this Lease. Any Lender may elect to have this Lease and/or any Option granted
hereby superior to the lien of its Security Device by giving written notice
thereof to Lessee, whereupon this Lease and such Options shall be deemed prior
to such Security Device, notwithstanding the relative dates of the documentation
or recordation thereof. 2. Attornment . In the event that Lessor transfers title
to the Premises, or the Premises are acquired by another upon the foreclosure or
termination of a Security Device to which this Lease is subordinated (i) Lessee
shall, subject to the non disturbance provisions of Paragraph 30.3, attorn to
such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the
term hereof, or, at the election of the new owner, this Lease will automatically
become a new lease between Lessee and such new owner, and (ii) Lessor shall
thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor's obligations, except that such new owner shall not:
(a) be liable for any act or omission of any prior lessor or with respect to
events occurring prior to acquisition of ownership; (b) be subject to any oﬀsets
or defenses which Lessee might have against any prior lessor, (c) be bound by
prepayment of more than one month's rent, or (d) be liable for the return of any
security deposit paid to any prior lessor which was not paid or credited to such
new owner. 3. Non Disturbance . With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non disturbance
agreement (a " Non Disturbance Agreement ") from the Lender which Non
Disturbance Agreement provides that Lessee's possession of the Premises, and
this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises. Further, within 60 days after the execution of this
Lease, Lessor shall, if requested by Lessee, use its commercially reasonable
eﬀorts to obtain a Non Disturbance Agreement from the holder of any pre existing
Security Device which is secured by the Premises. In the event that Lessor is
unable to provide the Non Disturbance Agreement within said 60 days, then Lessee
may, at Lessee's option, directly contact Lender and attempt to negotiate for
the execution and delivery of a Non Disturbance Agreement. 4. Self Executing .
The agreements contained in this Paragraph 30 shall be eﬀective without the
execution of any further documents; provided, however, that, upon written
request from Lessor or a Lender in connection with a sale, ﬁnancing or
reﬁnancing of the Premises, Lessee and Lessor shall execute such further
writings as may be reasonably required to separately document any subordination,
attornment and/or Non Disturbance Agreement provided for herein. 31. Attorneys'
Fees. If any Party or Broker brings an action or proceeding involving the
Premises whether founded in tort, contract or equity, or to declare rights
hereunder, the Prevailing Party (as hereafter deﬁned) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term, "
Prevailing Party " shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys' fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be
entitled to attorneys' fees, costs and expenses incurred in the preparation and
service of notices of Default and consultations in connection therewith, whether
or not a legal action is subsequently commenced in connection with such Default
or resulting Breach ($200 is a reasonable minimum per occurrence for such
services and consultation). 32. Lessor's Access; Showing Premises; Repairs.
Lessor and Lessor's agents shall have the right to enter the Premises at any
time, in the case of an emergency, and otherwise at reasonable times after
reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no
material adverse eﬀect on Lessee's use of the Premises. All such activities
shall be without abatement of rent or liability to Lessee. INITIALS © 2019 AIR
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33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction. 34. Signs. Lessor may place on the Premises ordinary "For
Sale" signs at any time and ordinary "For Lease" signs during the last 6 months
of the term hereof. Except for ordinary "for sublease" signs, Lessee shall not
place any sign upon the Premises without Lessor's prior written consent. All
signs must comply with all Applicable Requirements. 35. Termination; Merger.
Unless speciﬁcally stated otherwise in writing by Lessor, the voluntary or other
surrender of this Lease by Lessee, the mutual termination or cancellation
hereof, or a termination hereof by Lessor for Breach by Lessee, shall
automatically terminate any sublease or lesser estate in the Premises; provided,
however, that Lessor may elect to continue any one or all existing subtenancies.
Lessor's failure within 10 days following any such event to elect to the
contrary by written notice to the holder of any such lesser interest, shall
constitute Lessor's election to have such event constitute the termination of
such interest. 36. Consents. All requests for consent shall be in writing.
Except as otherwise provided herein, wherever in this Lease the consent of a
Party is required to an act by or for the other Party, such consent shall not be
unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers' and other
consultants' fees) incurred in the consideration of, or response to, a request
by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall
be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise speciﬁcally stated in writing by Lessor at
the time of such consent. The failure to specify herein any particular condition
to Lessor's consent shall not preclude the imposition by Lessor at the time of
consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request. 37. Guarantor. 1. Execution .
The Guarantors, if any, shall each execute a guaranty in the form most recently
published BY AIR CRE, and each such Guarantor shall have the same obligations as
Lessee under this Lease. 2. Default . It shall constitute a Default of the
Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence
of the execution of the guaranty, including the authority of the party signing
on Guarantor's behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certiﬁed copy of a resolution of its board of directors authorizing
the making of such guaranty, (b) current ﬁnancial statements, (c) an Estoppel
Certiﬁcate, or (d) written conﬁrmation that the guaranty is still in eﬀect. 38.
Quiet Possession. Subject to payment by Lessee of the Rent and performance of
all of the covenants, conditions and provisions on Lessee's part to be observed
and performed under this Lease, Lessee shall have quiet possession and quiet
enjoyment of the Premises during the term hereof. 39. Options. If Lessee is
granted any Option, as deﬁned below, then the following provisions shall apply.
1. Deﬁnition . " Option " shall mean: (a) the right to extend or reduce the term
of or renew this Lease or to extend or reduce the term of or renew any lease
that Lessee has on other property of Lessor; (b) the right of ﬁrst refusal or
ﬁrst oﬀer to lease either the Premises or other property of Lessor; (c) the
right to purchase, the right of ﬁrst oﬀer to purchase or the right of ﬁrst
refusal to purchase the Premises or other property of Lessor. 2. Options
Personal To Original Lessee . Any Option granted to Lessee in this Lease is
personal to the original Lessee, and cannot be assigned or exercised by anyone
other than said original Lessee and only while the original Lessee is in full
possession of the Premises and, if requested by Lessor, with Lessee certifying
that Lessee has no intention of thereafter assigning or subletting. 3. Multiple
Options . In the event that Lessee has any multiple Options to extend or renew
this Lease, a later Option cannot be exercised unless the prior Options have
been validly exercised. 4. Eﬀect of Default on Options . (a) Lessee shall have
no right to exercise an Option: (i) during the period commencing with the giving
of any notice of Default and continuing until said Default is cured, (ii) during
the period of time any Rent is unpaid (without regard to whether notice thereof
is given Lessee), (iii) during the time Lessee is in Breach of this Lease, or
(iv) in the event that Lessee has been given 3 or more notices of separate
Default, whether or not the Defaults are cured, during the 12 month period
immediately preceding the exercise of the Option. (b) The period of time within
which an Option may be exercised shall not be extended or enlarged by reason of
Lessee's inability to exercise an Option because of the provisions of Paragraph
39.4(a). (c) An Option shall terminate and be of no further force or eﬀect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the
purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease. 40. Multiple Buildings. If the Premises
are a part of a group of buildings controlled by Lessor, Lessee agrees that it
will abide by and conform to all reasonable rules and regulations which Lessor
may make from time to time for the management, safety, and care of said
properties, including the care and cleanliness of the grounds and including the
parking, loading and unloading of vehicles, and to cause its employees,
suppliers, shippers, customers, contractors and invitees to so abide and
conform. Lessee also agrees to pay its fair share of common expenses incurred in
connection with such rules and regulations. 41. Security Measures. Lessee hereby
acknowledges that the Rent payable to Lessor hereunder does not include the cost
of guard service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all responsibility for the
protection of the Premises, Lessee, its agents and invitees and their property
from the acts of third parties. 42. Reservations . Lessor reserves to itself the
right, from time to time, to grant, without the consent or joinder of Lessee,
such easements, rights and dedications that Lessor deems necessary, and to cause
the recordation of parcel maps and restrictions, so long as such easements,
rights, dedications, maps and restrictions do not unreasonably interfere with
the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to eﬀectuate any such easement rights,
dedication, map or restrictions. 43. Performance Under Protest. If at any time a
dispute shall arise as to any amount or sum of money to be paid by one Party to
the other under the provisions hereof, the Party against whom the obligation to
pay the money is asserted shall have the right to make payment "under protest"
and such payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for recovery of
such sum. If it shall be adjudged that there INITIALS © 2019 AIR CRE. All Rights
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was no legal obligation on the part of said Party to pay such sum or any part
thereof, said Party shall be entitled to recover such sum or so much thereof as
it was not legally required to pay. A Party who does not initiate suit for the
recovery of sums paid "under protest" within 6 months shall be deemed to have
waived its right to protest such payment. 44. Authority; Multiple Parties;
Execution. (a) If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each Party shall, within 30
days after request, deliver to the other Party satisfactory evidence of such
authority. (b) If this Lease is executed by more than one person or entity as
"Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall be empowered to
execute any amendment to this Lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the
named Lessees had executed such document. (c) This Lease may be executed by the
Parties in counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument. 44. Conﬂict. Any
conﬂict between the printed provisions of this Lease and the typewritten or
handwritten provisions shall be controlled by the typewritten or handwritten
provisions. 45. Oﬀer . Preparation of this Lease by either Party or their agent
and submission of same to the other Party shall not be deemed an oﬀer to lease
to the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto. 46. Amendments. This Lease may be modiﬁed only
in writing, signed by the Parties in interest at the time of the modiﬁcation. As
long as they do not materially change Lessee's obligations hereunder, Lessee
agrees to make such reasonable non monetary modiﬁcations to this Lease as may be
reasonably required by a Lender in connection with the obtaining of normal
ﬁnancing or reﬁnancing of the Premises. 47. Waiver of Jury Trial. THE PARTIES
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT. 48.
Arbitration of Disputes. An Addendum requiring the Arbitration of all disputes
between the Parties and/or Brokers arising out of this Lease is is not attached
to this Lease. 49. Accessibility; Americans with Disabilities Act. (a) The
Premises: have not undergone an inspection by a Certiﬁed Access Specialist
(CASp). Note: A Certiﬁed Access Specialist (CASp) can inspect the subject
premises and determine whether the subject premises comply with all of the
applicable construction related accessibility standards under state law.
Although state law does not require a CASp inspection of the subject premises,
the commercial property owner or lessor may not prohibit the lessee or tenant
from obtaining a CASp inspection of the subject premises for the occupancy or
potential occupancy of the lessee or tenant, if requested by the lessee or
tenant. The parties shall mutually agree on the arrangements for the time and
manner of the CASp inspection, the payment of the fee for the CASp inspection,
and the cost of making any repairs necessary to correct violations of
construction related accessibility standards within the premises. have undergone
an inspection by a Certiﬁed Access Specialist (CASp) and it was determined that
the Premises met all applicable construction related accessibility standards
pursuant to California Civil Code Α 55.51 et seq. Lessee acknowledges that it
received a copy of the inspection report at least 48 hours prior to executing
this Lease and agrees to keep such report conﬁdential. have undergone an
inspection by a Certiﬁed Access Specialist (CASp) and it was determined that the
Premises did not meet all applicable construction related accessibility
standards pursuant to California Civil Code Α 55.51 et seq. Lessee acknowledges
that it received a copy of the inspection report at least 48 hours prior to
executing this Lease and agrees to keep such report conﬁdential except as
necessary to complete repairs and corrections of violations of construction
related accessibility standards. In the event that the Premises have been issued
an inspection report by a CASp the Lessor shall provide a copy of the disability
access inspection certiﬁcate to Lessee within 7 days of the execution of this
Lease. (b) Since compliance with the Americans with Disabilities Act (ADA) and
other state and local accessibility statutes are dependent upon Lessee's speciﬁc
use of the Premises, Lessor makes no warranty or representation as to whether or
not the Premises comply with ADA or any similar legislation. In the event that
Lessee's use of the Premises requires modiﬁcations or additions to the Premises
in order to be in compliance with ADA or other accessibility statutes, Lessee
agrees to make any such necessary modiﬁcations and/or additions at Lessee's
expense. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT
THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES. ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE
BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES
ARE URGED TO: 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
THIS LEASE. 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE
CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED
TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,
THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE. WARNING: IF THE
PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE
LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE
PREMISES ARE LOCATED. The parties hereto have executed this Lease at the place
and on the dates speciﬁed above their respective signatures. Executed at:
Executed at: INITIALS © 2019 AIR CRE. All Rights Reserved. STN 27.22, Revised 06
10 2019 INITIALS Last Edited: 3/19/2020 4:38 PM Page 15 of 16

 

 

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B y: By: Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: By:
Name Printed: Title: Phone: Fax: Email: Address: Federal ID No.: BRO K E R Attn:
Title: Address: Phone: Fax: Email: Federal ID No.: Broker DRE License #: Agent
DRE License #: BROKER Hughes Marino, Inc. Attn: Shane Poppen Title: Address:
Phone: Fax: Email: Federal ID No.: Broker DRE License #: Agent DRE License #:
AIR CRE * https: //w ww .aircre.com * 213 687 8777 * contracts@aircre.com
NOTICE: No part of these works may be reproduced in any form without permission
in writing. By: /s/ Katherine McDermott Name Printed: Katherine M cDermott
Title: CFO Phone: Fax: Email: /s/ Peter Aardema Name Printed: Peter Aardem a
Title: Phone: Fax: Email: On: 3/23/2020 By LESSEE : Envision Solar
International, Inc. On: 3/31/2020 By LESSOR : P NN Hol dings, LP INITIALS © 2019
AIR CRE. All Rights Reserved. STN 27.22, Revised 06 10 2019 INITIALS Last
Edited: 3/19/2020 4:38 PM Page 16 of 16

 

 

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OPTION(S) TO EXTEND STANDARD LEASE ADDENDUM Dated: February 7, 2020 By and
Between Les s o r : P NN Holdings, LP Lessee: Envision Solar International,
Property Addres I s: nc. 5660 Eastgate Drive, San Diego, CA 92121 and includes
the "Annex Premises" located in the northwest corner of the property (street
address, city, state, zip) Paragraph: 51 A. OPTION(S) TO EXTEND: Lessor hereby
grants to Lessee the option to extend the term of this Lease for two (2)
additional twelve (12) month period(s) commencing when the prior term expires
upon each and all of the following terms and conditions: (i) In order to
exercise an option to extend, Lessee must give written notice of such election
to Lessor and Lessor must receive the same at least six (6) but not more than
nine (9) months prior to the date that the option period would commence, time
being of the essence. If proper notiﬁcation of the exercise of an option is not
given and/or received, such option shall automatically expire. Options (if there
are more than one) may only be exercised consecutively. (ii) The provisions of
paragraph 39, including those relating to Lessee's Default set forth in
paragraph 39.4 of this Lease, are conditions of this Option. (iii) Except for
the provisions of this Lease granting an option or options to extend the term,
all of the terms and conditions of this Lease except where speciﬁcally modiﬁed
by this option shall apply. (iv) This Option is personal to the original Lessee,
and cannot be assigned or exercised by anyone other than said original Lessee
and only while the original Lessee is in full possession of the Premises and
without the intention of thereafter assigning or subletting. (v) The monthly
rent for each month of the option period shall be calculated as follows, using
the method(s) indicated below: (Check Method(s) to be Used and Fill in
Appropriately) I. Cost of Living Adjustment(s) (COLA) a. On (Fill in COLA
Dates): the Base Rent shall be adjusted by the change, if any, from the Base
Month speciﬁed below, in the Consumer Price Index of the Bureau of Labor
Statistics of the U.S. Department of Labor for (select one): CPI W (Urban Wage
Earners and Clerical Workers) or CPI U (All Urban Consumers), for (Fill in Urban
Area): . All Items (1982 1984 = 100), herein referred to as "CPI". b. The
monthly Base Rent payable in accordance with paragraph A.I.a. of this Addendum
shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the
attached Lease, shall be multiplied by a fraction the numerator of which shall
be the CPI of the calendar month 2 months prior to the month(s) speciﬁed in
paragraph A.I.a. above during which the adjustment is to take eﬀect, and the
denominator of which shall be the CPI of the calendar month which is 2 months
prior to (select one): the ﬁrst month of the term of this Lease as set forth in
paragraph 1.3 ("Base Month") or (Fill in Other "Base Month"): . The sum so
calculated shall constitute the new monthly Base Rent hereunder, but in no
event, shall any such new monthly Base Rent be less than the Base Rent payable
for the month immediately preceding the rent adjustment. c. In the event the
compilation and/or publication of the CPI shall be transferred to any other
governmental department or bureau or agency or shall be discontinued, then the
index most nearly the same as the CPI shall be used to make such calculation. In
the event that the Parties cannot agree on such alternative index, then the
matter shall be submitted for decision to the American Arbitration Association
in accordance with the then rules of said Association and the decision of the
arbitrators shall be binding upon the parties. The cost of said Arbitration
shall be paid equally by the Parties. II. Market Rental Value Adjustment(s)
(MRV) a. On (Fill in MRV Adjustment Date(s)) the Base Rent shall be adjusted to
the "Market Rental Value" of the property as follows: 1) Four months prior to
each Market Rental Value Adjustment Date described above, the Parties shall
attempt to agree upon what the new MRV will be on the adjustment date. If
agreement cannot be reached, within thirty days, then: (a) Lessor and Lessee
shall immediately appoint a mutually acceptable appraiser or broker to establish
the new MRV within the next 30 days. Any associated costs will be split equally
between the Parties, or (b) Both Lessor and Lessee shall each immediately make a
reasonable determination of the MRV and submit such determination, in writing,
to INITIALS © 2017 AIR CRE. All Rights Reserved. OE 6.02, Revised 06 10 2019
INITIALS Last Edited: 3/19/2020 4:38 PM Page 1 of 2

 

 

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arbitration in accordance with the following provisions: (i) Within 15 days
thereafter, Lessor and Lessee shall each select an independent third party
appraiser or broker ("Consultant" check one) of their choice to act as an
arbitrator (Note: the parties may not select either of the Brokers that was
involved in negotiating the Lease). The two arbitrators so appointed shall
immediately select a third mutually acceptable Consultant to act as a third
arbitrator. (ii) The 3 arbitrators shall within 30 days of the appointment of
the third arbitrator reach a decision as to what the actual MRV for the Premises
is, and whether Lessor's or Lessee's submitted MRV is the closest thereto. The
decision of a majority of the arbitrators shall be binding on the Parties. The
submitted MRV which is determined to be the closest to the actual MRV shall
thereafter be used by the Parties. (iii) If either of the Parties fails to
appoint an arbitrator within the speciﬁed 15 days, the arbitrator timely
appointed by one of them shall reach a decision on his or her own, and said
decision shall be binding on the Parties. (iv) The entire cost of such
arbitration shall be paid by the party whose submitted MRV is not selected, ie.
the one that is NOT the closest to the actual MRV. 2) When determining MRV, the
Lessor, Lessee and Consultants shall consider the terms of comparable market
transactions which shall include, but not limited to, rent, rental adjustments,
abated rent, lease term and ﬁnancial condition of tenants. 3) Notwithstanding
the foregoing, the new Base Rent shall not be less than the rent payable for the
month immediately preceding the rent adjustment. b. Upon the establishment of
each New Market Rental Value: 1) the new MRV will become the new "Base Rent" for
the purpose of calculating any further Adjustments, and 2) the ﬁrst month of
each Market Rental Value term shall become the new "Base Month" for the purpose
of calculating any further Adjustments. III. Fixed Rental Adjustment(s) (FRA)
The Base Rent shall be increased to the following amounts on the dates set forth
below: On (Fill in FRA Adjustment Date(s)): The New Base Rent shall be: IV.
Initial Term Adjustments The formula used to calculate adjustments to the Base
Rate during the original Term of the Lease shall continue to be used during the
extended term. B. NOTICE: Unless speciﬁed otherwise herein, notice of any rental
adjustments, other than Fixed Rental Adjustments, shall be made as speciﬁed in
paragraph 23 of the Lease. C. BROKER'S FEE : The Brokers shall be paid a
Brokerage Fee for each adjustment speciﬁed above in accordance with paragraph 15
of the Lease or if applicable, paragraph 9 of the Sublease. AIR CRE * https: //w
ww .aircre.com * 213 687 8777 * contracts@aircre.com NOTICE: No part of these
works may be reproduced in any form without permission in writing. INITIALS ©
2017 AIR CRE. All Rights Reserved. OE 6.02, Revised 06 10 2019 INITIALS Last
Edited: 3/19/2020 4:38 PM Page 2 of 2

 

 

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RENT ADJUSTMENT(S) STANDARD LEASE ADDENDUM Dated: February 7, 2020 By and
Between Les s o r : P NN Ho ldings, LP Lessee: Envision Solar International,
Property Addres I s: nc. 5660 Eastgate Drive, San Diego, CA 92121 and includes
the "Annex Premises" located in the northwest corner of the property (street
address, city, state, zip) Paragraph: 52 A. RENT ADJUSTMENTS: The monthly rent
for each month of the adjustment period(s) speciﬁed below shall be increased
using the method(s) indicated below: (Check Method(s) to be Used and Fill in
Appropriately) I. Cost of Living Adjustment(s) (COLA) a. On (Fill in COLA
Dates): the Base Rent shall be adjusted by the change, if any, from the Base
Month speciﬁed below, in the Consumer Price Index of the Bureau of Labor
Statistics of the U.S. Department of Labor for (select one): CPI W (Urban Wage
Earners and Clerical Workers) or CPI U (All Urban Consumers), for (Fill in Urban
Area): , All Items (1982 1984 = 100), herein referred to as "CPI". b. The
monthly Base Rent payable in accordance with paragraph A.I.a. of this Addendum
shall be calculated as follows: the Base Rent set forth in paragraph 1.5 of the
attached Lease, shall be multiplied by a fraction the numerator of which shall
be the CPI of the calendar month 2 months prior to the month(s) speciﬁed in
paragraph A.I.a. above during which the adjustment is to take eﬀect, and the
denominator of which shall be the CPI of the calendar month which is 2 months
prior to (select one): the ﬁrst month of the term of this Lease as set forth in
paragraph 1.3 ("Base Month") or (Fill in Other "Base Month"): . The sum so
calculated shall constitute the new monthly Base Rent hereunder, but in no
event, shall any such new monthly Base Rent be less than the Base Rent payable
for the month immediately preceding the Base Rent adjustment. c. In the event
the compilation and/or publication of the CPI shall be transferred to any other
governmental department or bureau or agency or shall be discontinued, then the
index most nearly the same as the CPI shall be used to make such calculation. In
the event that the Parties cannot agree on such alternative index, then the
matter shall be submitted for decision to the American Arbitration Association
in accordance with the then rules of said Association and the decision of the
arbitrators shall be binding upon the parties. The cost of said Arbitration
shall be paid equally by the Parties. I. Market Rental Value Adjustment(s) (MRV)
a. On (Fill in MRV Adjustment Date(s): the Base Rent shall be adjusted to the
"Market Rental Value" of the property as follows: 1) Four months prior to each
Market Rental Value Adjustment Date described above, the Parties shall attempt
to agree upon what the new MRV will be on the adjustment date. If agreement
cannot be reached within thirty days, then: (a) Lessor and Lessee shall
immediately appoint a mutually acceptable appraiser or broker to establish the
new MRV within the next 30 days. Any associated costs will be split equally
between the Parties, or (b) Both Lessor and Lessee shall each immediately make a
reasonable determination of the MRV and submit such determination, in writing,
to arbitration in accordance with the following provisions: (i) Within 15 days
thereafter, Lessor and Lessee shall each select an independent third party
appraiser or broker ("Consultant" − check one) of their choice to act as an
arbitrator (Note: the parties may not select either of the Brokers that was
involved in negotiating the Lease). The two arbitrators so appointed shall
immediately select a third mutually acceptable Consultant to act as a third
arbitrator. (ii) The 3 arbitrators shall within 30 days of the appointment of
the third arbitrator reach a decision as to what the actual MRV for the Premises
is, and whether Lessor's or Lessee's submitted MRV is the closest thereto. The
decision of a majority of the arbitrators shall be binding on the Parties. The
submitted MRV which is determined to be the closest to the actual MRV shall
thereafter be used by the Parties. (iii) If either of the Parties fails to
appoint an arbitrator within the speciﬁed 15 days, the arbitrator timely
appointed by one of them shall reach a decision on his or her own, and said
decision shall be binding on the Parties. (iv) The entire cost of such
arbitration shall be paid by the party whose submitted MRV is not selected,
i.e., the one that is NOT the closest to the actual MRV. 2) When determining
MRV, the Lessor, Lessee and Consultants shall consider the terms of comparable
market transactions which shall include, but no limited to, rent, rental
adjustments, abated rent, lease term and ﬁnancial condition of tenants. INITIALS
© 2017 AIR CRE. All Rights Reserved. RA 7.03, Revised 06 10 2019 INITIALS Last
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3) Notwithstanding the foregoing, the new Base Rent shall not be less than the
rent payable for the month immediately preceding the rent adjustment. b. Upon
the establishment of each New Market Rental Value: 1) the new MRV will become
the new "Base Rent" for the purpose of calculating any further Adjustments, and
2) the ﬁrst month of each Market Rental Value term shall become the new 'Base
Month' for the purpose of calculating any further Adjustments. III. Fixed Rental
Adjustment(s) (FRA) The Base Rent shall be increased to the following amounts on
the dates set forth below: On (Fill in FRA Adjustment Date(s)): The New Base
Rent shall be: 9/1/20 - 8/31/21 $52,000.00 9/1/21 - 8/31/22 $53,560.00 9/1/22 -
8/31/23 $55,166.80 9/1/23 - 8/31/24 $56,821.80 9/1/24 - 8/31/25 $58,526.46 AIR
CRE * https: //w ww .aircre.com * 213 687 8777 * contracts@aircre.com NOTICE: No
part of these works may be reproduced in any form without permission in writing.
INITIALS © 2017 AIR CRE. All Rights Reserved. RA 7.03, Revised 06 10 2019
INITIALS Last Edited: 3/19/2020 4:38 PM Page 2 of 2

 

 

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ADDENDUM TO LEASE Date: February 7, 2020 By and Between P NN Holdings, LP
Property Addres I s: nc. Lessor: Lessee: Envision Solar International, 5660
Eastgate Drive, San Diego, CA 92121 and includes the "Annex Premises" located in
the northwest corner of the property (street address, city, state, zip)
Paragraph: 53 - 55 53. LANDLORD’S WORK: Landlord, at Landlord’s sole cost and
expense, shall provide turnkey Tenant Improvements per a mutually agreed upon
space plan. The cost of work shall include but not be limited to monies
allocated for preliminary space plans, architectural, electrical and mechanical
working drawings including engineering, permits, plus a general contractor's fee
and a construction management fee (the “Landlord’s Work”). The scope of the
Landlord’s Work shall include: • New Paint and Carpet in office area in front of
the building ("Front Offices"). • Repair Grates in the Production Floor • HVAC
Distribution/Rezoning: Tenant is having major issues with HVAC distribution and
zoning. Landlord to engage mechanical contractor to evaluate existing HVAC
zoningi n the upstairs office area in the front of the Building. Landlord shall
complete necessary repairs recommended by mechanical contractor. • Removal of
Vanguard Equipment: This will include the autoclave and other equipment
surrounding the Building and within the Premises. • Replace all damaged/water -
stained ceiling tiles in the Front Offices and back offices ("Oroweat Offices").
• The heating unit/furnace serving the Oroweat Offices is non - functional and
shall be replaced or repaired . • In the Oroweat Offices and Desmond’s office,
there is some leakage through the roof of rainwater when it rains and needs to
be repaired. It’s likely just the edges, because our understanding is that the
roof membrane was replaced. 54. NNN EXPENSES : Taxes, Landscape, Insurance would
begin at $ 7 , 000 per month to increase annually upon a recap of the actual
expenses . The items circled on the Exhibit “A” shall be the only NNN Expense
line - items passed through to Lessee . Lessee shall have industry standard
audit rights of Landlord’s Operating Expense accounting 55. SOLAR PANELS: Tenant
and Landlord shall use commercially reasonable efforts to discuss a mutually
agreeable structure to add solar panels to the Building. In the event of any
conﬂict between the provisions of this Addendum and the printed provisions of
the Lease, this Addendum shall control. AIR CRE * https: //w ww .aircre.com *
213 687 8777 * contracts@aircre.com NOTICE: No part of these works may be
reproduced in any form without permission in writing. INITIALS © 2017 AIR CRE.
All Rights Reserved. ADD 1.03, Revised 06 10 2019 INITIALS Last Edited:
3/19/2020 4:38 PM Page 1 of 1