EXECUTION COPY
Exhibit 10.18

 
 
 
 
 
 
2420 17th Street
Denver, Colorado
 
 
 
 
OFFICE SPACE LEASE
 
 
 
BETWEEN
2420 17TH STREET LLC,
a Delaware limited liability company
 
 
AND
 
 
NEW AGE BEVERAGES CORPORATION,
a Washington corporation
 
 
 
 
 
 
 
Date: JANUARY 21, 2019
 
 
 

EXECUTION COPY
INDEX TO LEASE
 
ARTICLE I
BASIC LEASE PROVISIONS
1
ARTICLE II
PREMISES
5

Section 2.1
Leased Premises
5

Section 2.2
Acceptances of Premises
5

Section 2.3
Building Name and Address
5

ARTICLE III
TERM
5

Section 3.1
General
5

Section 3.2
Delay in Possession
5

Section 3.3
Tenant’s Option to Extend Term
6

Section 3.4
Fair Market Rental Value
6

Section 3.5
Termination Option
6

ARTICLE IV
RENT AND OPERATING EXPENSES
7

Section 4.1
Base Rent
7

Section 4.2
Operating Expenses
7

Section 4.3
Security Deposit
8

Section 4.4
REIT
9

ARTICLE V
USES
10

Section 5.1
Uses
10

Section 5.2
Signs
10
ARTICLE VI
LANDLORD SERVICES
11
Section 6.1
Utilities and Services
11
Section 6.2
Operation and Maintenance of Common Facilities
11
Section 6.3
Use of Common Facilities
11
Section 6.4
Tenant Parking
11
Section 6.5
Changes and Additions by Landlord
11
ARTICLE VII
MAINTAINING THE PREMISES
12
Section 7.1
Tenant’s Maintenance and Repair
12
Section 7.2
Landlord’s Maintenance and Repair
12
Section 7.3
Alterations
12
Section 7.4
Mechanic’s Liens
13
Section 7.5
Entry and Inspection
13
Section 7.6
Maintenance Related to Hazardous Materials
13
ARTICLE VIII
TAXES AND ASSESSMENTS ON TENANT’S PREMISES
15
ARTICLE IX
ASSIGNMENT AND SUBLETTING
15
Section 9.1
Rights of Parties
15
Section 9.2
Effect of Transfer
16
Section 9.3
Sublease Requirements
17

 
 

 
 
ARTICLE X
INSURANCE AND INDEMNITY
17
ARTICLE XI
DAMAGE OR DESTRUCTION
17
Section 11.1
Restoration
17
Section 11.2
Lease Governs
18

ARTICLE XII
EMINENT DOMAIN
18

Section 12.1
Temporary Taking
18

Section 12.2
Total or Partial Taking
18

ARTICLE XIII
SUBORDINATION; ESTOPPEL CERTIFICATE
19

Section 13.1
Total Condemnation of Premises
19

Section 13.2
Estoppel Certificate
19

ARTICLE XIV
DEFAULTS AND REMEDIES
20

Section 14.1
Tenant’s Defaults
20

Section 14.2
Landlord’s Remedies
20
Section 14.3
Late Payments
21
Section 14.4
Right of Landlord to Perform
22
Section 14.5
Default by Landlord
22
Section 14.6
EXPENSES AND LEGAL FEES
22
Section 14.7
WAIVER OF JURY TRIAL
22
ARTICLE XV
END OF TERM
23
Section 15.1
Holding Over
23
Section 15.2
Merger on Termination
23
Section 15.3
Surrender of Premises; Removal of Property
23
ARTICLE XVI
PAYMENTS AND NOTICES
24
ARTICLE XVII
RULES AND REGULATIONS
24
ARTICLE XVIII
BROKER’S COMMISSION
24
ARTICLE XIX
TRANSFER OF LANDLORD’S INTEREST
24
ARTICLE XX
INTERPRETATION
25
Section 20.1
Gender and Number
25
Section 20.2
Headings
25
Section 20.3
Joint and Several Liability
25
Section 20.4
Successors
25
Section 20.5
Time of Essence
25

 
 

 
 
Section 20.6
Controlling Law
25
Section 20.7
Severability
25
Section 20.8
Waiver and Cumulative Remedies
25
Section 20.9
Inability to Perform
26
Section 20.10
Entire Agreement
26
Section 20.11
Quiet Enjoyment
26
Section 20.12
Survival
26
ARTICLE XXI
EXECUTION AND RECORDING
27
Section 21.1
Counterparts
27
Section 21.2
Corporate and Partnership Authority
27
Section 21.3
Execution of Lease; No Option or Offer
27
Section 21.4
Recording
27
Section 21.5
Amendments
27
ARTICLE XXII
MISCELLANEOUS
28
Section 22.1
Nondisclosure of Lease Terms
28
Section 22.2
Representations by Tenant
28
Section 22.3
Changes Requested by Lender
28
Section 22.4
Mortgagee Protection
28

Section 22.5
Covenants and Conditions
28

Section 22.6
Commercial Photography and Filming
28

Section 22.7
As Is Condition
29

Section 22.8
Non-Discrimination
29

Section 22.9
Non-Affiliation Representation
29

 
 
 
 
 
 
EXHIBIT A-FLOOR PLAN OF PREMISES
 
EXHIBIT B-UTILITIES AND SERVICES
 
 
EXHIBIT C-PARKING RULES AND REGULATIONS
 
EXHIBIT D-EXCULPATION, INDEMNIFICATION
AND INSURANCE
 
EXHIBIT E-RULES AND REGULATIONS
 
 
EXHIBIT F- ESTOPPEL CERTIFICATE
 
 

 
                                                       

EXECUTION COPY

 
OFFICE SPACE LEASE
 
 
 
THIS LEASE is made as of the 21st day of January 2019, by and between 2420 17TH
STREET LLC, a Delaware limited liability company, hereinafter called “Landlord,”
and NEW AGE BEVERAGES CORPORATION, a Washington corporation, hereinafter called
“Tenant.”
 
ARTICLE I
BASIC LEASE PROVISIONS
 
Each reference in this Lease to the “Basic Lease Provisions” shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
 
1. 
Tenant’s Name and Trade Name:
 
NEW AGE BEVERAGES CORPORATION
 
 
 
2. 
Premises:
Suite Nos. 220 and 240 (the Premises are more particularly described in Section
2.1) consisting of approximately 11,159 rentable square feet, located on the
second floor of the Building (described below) consisting of approximately
79,589 rentable square feet, as shown on the Floor Plan attached hereto as
Exhibit A.
 
 
 
3. 
Address of Building:
2420 17th Street, Denver, Colorado 80202
 
 
 
4. 
Use of Premises:
General administrative office use compatible with first class Buildings.
 
 
 
5. 
Estimated Commencement Date:
April 1, 2019
 
6. 
Commencement Date:
 
The date on which Landlord delivers possession of the Premises to Tenant. Before
Commencement Date, Landlord will improve the Premises substantially as shown on
Exhibit A with Building standard materials and fixtures (the “TI Work”).
 
7. 
Expiration Date:
The last day of the 127th full calendar month after the Commencement Date.
 
 
 
8. 
Lease Term:
Approximately 127 full calendar months, commencing on the Commencement Date, and
expiring on the Expiration Date, plus, if the Commencement Date occurs on a date
which is not the first day of a calendar month, such additional days as may be
required to cause this Lease to expire on the final day of the 127th full
calendar month after the Commencement Date (in which event the first month of
the Lease Term shall be deemed to include the partial calendar month in which
the Commencement Date occurs [at a commensurately prorated portion of the
initial monthly Base Rent set forth below], plus the first full calendar month
immediately following such partial month [at the full initial monthly Base Rent
set forth below]).
 

 
 
1

 
 
9. 
Extension Option:
One Extension Period of five years.
 
 
 
10. 
Base Rent:
The Base Rent shall equal the following monthly amounts during the indicated
periods of the Lease Term:
 
 
 
$ Per RSF
Monthly
Annually
 
Months 1 through 12
$31.00
$28,827.42
$345,929.04
 
Months 13 through 24
$31.93
$29,692.24
$356,306.88
 
Months 25 through 36
$32.89
$30,584.96
$367,019.52
 
Months 37 through 48
$33.87
$31,496.28
$377,955.36
 
Months 49 through 60
$34.89
$32,444.79
$389,337.48
 
Months 61 through 72
$35.94
$33,421.21
$401,054.52
 
Months 73 through 84
$37.02
$34,425.52
$413,106.24
 
Months 85 through 96
$38.13
$35,457.72
$425,492.64
 
Months 97 through 108
$39.27
$36,517.83
$438,213.96
 
Months 109 through 120
$40.45
$37,615.13
$451,381.56
 
Months 121 through 127
$41.66
$38,740.33
$464,883.96
 
 
 
 
 
Notwithstanding anything to the contrary, monthly Base Rent for the first seven
full calendar months of the Lease Term shall be fully abated, and monthly Base
Rent for the eighth through 12th month will be abated to $20,298.83. If a
default defined in Section 14.1 occurs at any time during the Lease Term, a
pro-rated portion of the abated Base Rent will be immediately due and payable.
Such pro-rated portion shall be calculated by multiplying the abated Base Rent
by a fraction whose numerator is the number of full months remaining in the
Lease Term at the time of the default and whose denominator is 120.
 
 
 
11. 
The Extension Period:
Fair Market Rental Rate as determined in accordance with Section 3.4 below, if
Tenant exercises its option to extend the Lease Term pursuant to Section 3.3.
 
 
 
12. 
Expense Recovery Period:
Every calendar year during the Lease Term (or portion thereof for the first and
last Lease years) commencing January 1 and ending December 31).
 
 
 
13. 
Floor Area of Premises:
Approximately 11,159 rentable square feet.
 
 
 
14. 
Security Deposit:
$38,740.33, as is further described in Section 4.3 herein. The Security Deposit
shall be delivered to Landlord concurrently with Tenant’s execution of this
Lease.
 
 
 
15. 
Broker(s):
Landlord – Cushman & Wakefield
Tenant – Unique Properties
 
 
 

 
 
2

 
 
16. 
Address for Payments and Notices:
LANDLORD:
2420 17TH STREET LLC
c/o BlackRock
4400 MacArthur Blvd, Suite 700
Newport Beach, CA 92660
 
TENANT:
Prior to Commencement Date:
NEW AGE BEVERAGES CORPORATION
1700 E. 68th Ave.
Denver, CO 80229
Attn: Gregory A. Gould
Telephone: (303) 289-8655
Email: GGould@newagebev.com
 
 
After Commencement Date:
To the Premises
 
 
 
17. 
Tenant Improvements:
Tenant shall take the Premises “as-is,” except that Landlord shall perform the
TI Work.
 
 
 
18. 
Parking:
14 covered parking spaces, subject to the terms and conditions of Section 6.4 of
the Lease, at Landlord’s prevailing rate, as determined in good faith by
Landlord from time to time. On the date of this Lease, the monthly parking rate
for each unreserved space is $215.00. In addition, Tenant’s customers may
utilize designated visitor parking spaces on a first-come, first-served,
non-exclusive basis.
 
 
 
19. 
Tenant’s Construction Representative:
 
 
 
Telephone:
Brian Smith
Morinda
P.O. Box 4000
Orem, UT 84059
(801) 234-3104, Ext. 3014
Bsmith@morinda.com
 
 
 
 
Landlord’s Construction Representative:
Telephone:
CBRE – Angela Slocum
1225 17th Street, Suite 3200
Denver, CO 80202
(303) 583-2065
 
 
 

 
3

 
 
 
20. 
Tenant’s Percentage Share:
Approximately 14.0% calculated by dividing the Floor Area of Premises
(numerator) by the rentable area of the Building (denominator) and expressing
the resulting quotient as a percentage. Tenant’s Percentage shall be increased
during the Lease Term in proportion to any increase in the area of the Premises
in accordance with the formula stated herein. Notwithstanding anything to the
contrary, Tenant’s Percentage Share for the first 12 full months of the Lease
Term will be abated to 9.9%. If a default defined in Section 14.1 occurs at any
time during the Lease Term, a pro-rated portion of the abated Tenant’s
Percentage Share will be immediately due and payable. Such pro-rated portion
shall be calculated by multiplying the abated Tenant’s Percentage Share by a
fraction whose numerator is the number of full months remaining on the Lease
Term at the time of the default and whose denominator is 120.
 
 
 
21. 
Guarantor:
None

 
 
4

 
 
ARTICLE II
PREMISES
 
Section 2.1                                            
Leased Premises
 
Landlord leases to Tenant and Tenant rents from Landlord the premises shown in
Exhibit A (the “Premises”) containing the floor area set forth in Item 8 of the
Basic Lease Provisions and known by the suite numbers identified in Item 2 of
the Basic Lease Provisions. The Premises are located in the Building identified
in Item 2 of the Basic Lease Provisions (which together with the underlying real
property is referred to herein as the “Building”). The rentable square footage
of the Premises set forth in Item 8 of the Basic Lease Provisions is deemed
conclusive as between the parties.
 
Section 2.2                                            
Acceptances of Premises.
 
Tenant acknowledges that neither Landlord nor any representative of Landlord has
made any representation or warranty with respect to the Premises or the Building
or the suitability or fitness of either for any purpose except as set forth in
this Lease. The taking of possession or use of the Premises by Tenant
conclusively establishes that the Premises and the Building were in satisfactory
condition and in conformity with the provisions of this Lease in all respects,
except for those matters which Tenant shall have brought to Landlord’s attention
on a written punch list delivered to Landlord. The list shall be limited to any
items required to be accomplished by Landlord under the Work Letter and shall be
delivered to Landlord within five (5) days after the Lease Term commences as
provided in Article III below. Landlord shall diligently complete all punch list
items of which it is notified as provided above for which it is liable. Nothing
contained in this Section shall affect the commencement of the Lease Term or the
obligation of Tenant to pay Rent. Except as otherwise expressly provided herein,
Tenant accepts the Premises in its “As Is” existing condition and waives any
right or claim against Landlord arising out of the condition of the Premises.
 
 
 
Section 2.3                                 
Building Name and Address
 
Tenant shall not utilize any name selected by Landlord from time to time for the
Building and/or the Premises as any part of Tenant’s corporate or trade name.
Landlord shall have the right to change the name, number or designation of the
Building or Premises without liability to Tenant.
 
ARTICLE III
TERM
 
Section 3.1                                            
General
 
The term of this Lease (“Lease Term”) shall be for the period shown in Item 5 of
the Basic Lease Provisions. The Lease Term shall commence on the Commencement
Date specified in Item 4 of the Basic Lease Provisions. Within ten (10) days
after possession of the Premises is tendered to Tenant, the parties shall
memorialize on a form provided by Landlord the actual Commencement Date and the
expiration date (the “Expiration Date”) of this Lease. Tenant’s failure to
execute that form shall not affect the validity of Landlord’s determination of
those dates.
 
Section 3.2                                            
Delay in Possession
 
If Landlord, for any reason not within its reasonable control, is delayed in
delivering possession of the Premises to Tenant beyond the Estimated
Commencement Date, this Lease shall not be void or voidable nor shall Landlord
be liable to Tenant for any resulting loss or damage; provided, however, that
Tenant shall not be liable for any Monthly Rental (defined below) hereunder, and
the Commencement Date shall not be deemed to have occurred, until Landlord
delivers possession of the Premises with the TI Work substantially completed.
Notwithstanding the foregoing, if Landlord’s failure to so deliver possession of
the Premises to Tenant on or before the Estimated Commencement Date specified in
Item 4 of the Basic Lease Provisions is attributable to any Tenant Delay
(defined below), then the Commencement Date shall not be advanced to the date on
which possession of the Premises is tendered to Tenant, and Landlord shall be
entitled to full performance by Tenant (including the payment of Monthly Rental)
from the date Landlord would have been able to deliver the Premises to Tenant
but for the Tenant Delay(s). As used herein, the term “Tenant Delay” shall mean
one (1) or more actual delays in the performance of the TI Work which are caused
by (a) Tenant’s request for changes in the Plans and Specifications, (b)
Tenant’s request for materials, finishes or installations which are other than
Building standard materials or (c) any other act or omission of Tenant;
provided, however, that no delay shall be deemed a Tenant Delay unless Landlord
notifies Tenant promptly of any such act or failure to act.
 
 
5

 
 
Section 3.3                                            
Tenant’s Option to Extend Term
 
Provided Tenant is not in default under the Lease, either at the time Tenant
makes such election or at the time the Extension Period (as defined below) would
otherwise commence, and Tenant has not received three (3) or more notices of
events of default during the previous five years, Tenant shall have the number
of options to extend the Lease Term set forth in Item 5 of the Basic Lease
Provisions, such option being for an additional period of five (5) years (the
“Extension Period”). Such option shall be exercised, if at all, by Tenant giving
written notice of exercise thereof (the “Option Notice”) to Landlord not fewer
than nine (9) months nor more than twelve (12) months in advance of the
expiration of the then-current Lease Term of this Lease. In the event Tenant
exercises the option to extend this Lease, the Lease shall continue for the
Extension Period on all of the terms and conditions as herein set forth,
provided that Base Rent for the Extension Period shall be as set forth in
Section 3.4; and the Lease Term shall be deemed to include such Extension
Period; and Landlord will not be obligated to improve the Premises or to
contribute to their improvement. If Tenant does not exercise the extension
option as provided herein, then all remaining unexercised term extension rights
hereunder shall become null and void. The extension option shall be personal to
the original Tenant named herein, or a transferee which succeeds to such
original Tenant’s interest herein pursuant to an Exempt Transfer as described in
Section 9.1(c) hereof, but shall become null and void upon any other assignment
or sublease of this Lease by Tenant.
 
Section 3.4                                            
Fair Market Rental Value
 
On commencement of the Extension Period, the Lease shall be adjusted to reflect
a new Base Rent for the Premises equal to 100% of the average base rents per
rentable square foot charged for comparable non-renewal, non-equity tenants of
comparable size, considering the age of the building, quality, floor height,
location in the South Platte River buildings in the Denver market, and other
reasonable factors relevant to a fair market rent determination, for a
comparable term under leases entered into within six months prior to the date
Tenant exercises the applicable option, and further taking into account the
relative creditworthiness of the Tenant and the presence or absence of brokerage
commissions, tenant improvement allowance(s), landlord initial improvement work
at landlord’s expense, base years, construction time, and all other lease
concessions (the “Fair Market Rental Rate”), as reasonably calculated by
Landlord in good faith; provided, however, that in no event shall the Base Rent
for any Extension Period be less than the Base Rent payable immediately prior to
the commencement of the Extension Period. Landlord shall advise Tenant of such
rental adjustment within one month after Landlord’s receipt of Tenant’s Option
Notice. Tenant shall have twenty (20) days following Tenant’s receipt of notice
of the rental adjustment (the “Rent Adjustment Notice”) within which to accept
such terms by executing any appropriate reasonable documentation submitted by
Landlord to Tenant. If Tenant disagrees with Landlord’s calculation of the Fair
Market Rental Rate and if Landlord and Tenant have not reached a written
agreement on Fair Market Rental Rate for the applicable Extension Period within
thirty (30) days after the date Landlord gives Tenant the Rent Adjustment Notice
(the “Adjustment Notice Date”), each party shall appoint a qualified real estate
broker with at least seven years of experience in office leasing in the South
Platte River Denver marketplace (a “Qualified Broker”) for the purpose of
determining Fair Market Rental Rate for the applicable Extension Period and
shall give written notice of such appointment to the other party within forty
(40) days after the Adjustment Notice Date. The written agreement of the
Qualified Brokers appointed as provided above regarding the Fair Market Rental
Rate shall be a conclusive determination of the Fair Market Rental Rate for
purposes of determining the Base Rent payable by Tenant during the applicable
Extension Period. If such Qualified Brokers have not reached a written agreement
on the Fair Market Rental Rate within sixty (60) days after the Adjustment
Notice Date, the two Qualified Brokers shall select a third Qualified Broker and
give written notice of such appointment to Landlord and Tenant within seventy
(70) days after the Adjustment Notice Date. The three Qualified Brokers so
appointed shall fix a date for completion of their determination of the Fair
Market Rental Rate, such date to be not later than ninety (90) days after the
Adjustment Notice Date. On or before such date, the three Qualified Brokers
shall meet and shall submit their determinations in writing to Landlord and
Tenant. The Fair Market Rental Rate used to determine the new Base Rent for the
Extension Period for the Premises, as applicable, shall be an amount equal to
the numerical average of the two figures closest to each other in absolute
value. (For purposes of example only, if the determinations were $4.50/sf,
$5.00/sf and $5.55/sf, the governing Fair Market Rental Rate would be $4.75/sf,
the average of the two lower figures, since the $.50 difference between them is
less than the $.55 difference between the higher two figures.) If for any reason
any of the Qualified Brokers fails timely to submit its determination of the
Fair Market Rental Rate to Landlord and Tenant, then the numerical average of
such determinations as were timely submitted shall be the governing Fair Market
Rental Rate. Landlord and Tenant shall each be responsible for payment of the
fees of the Qualified Broker it selects; the fee for the third Qualified Broker,
if any, shall be divided evenly between Landlord and Tenant, such that each
party shall pay one-half thereof. In no event shall the terms offered by
Landlord under this Section 3.4 bind Landlord to offer such terms to Tenant or
to any other person or entity at any time except as explicitly set forth herein,
nor shall such terms prevent Landlord from leasing the Premises to any person or
entity on different terms if Tenant does not timely accept the terms determined
in accordance with this Section 3.4.
 
Section 3.5                                            
Termination Option
 
So long as no default defined in Section `14.1 has occurred before the Notice
Date defined in this Section and neither a default exists nor circumstances
exists that would be a default after the giving of notice or the passage of
time, or both, on the Termination Date defined in this Section, Tenant will have
the right to terminate this Lease as of the last day of the 90th full calendar
month of the Lease Term (the “Termination Date”) by written notice to Landlord
given at least nine full months before the Termination Date (the “Notice Date”).
Tenant’s notice will be accompanied by its payment of: (a) (i) the unamortized
costs incurred by Landlord to improve the Premises pursuant to the TI Work; (ii)
the unamortized amounts of abated Base Rent; (iii) the unamortized amount paid
by Landlord pursuant to Article XVIII; and (iv) interest on the foregoing
unamortized amounts at the rate of 8% per annum. The amortizations will be over
the Lease Term, plus (b) the Base Rent due for the six months following the
Termination Date. Landlord and Tenant will perform all of their obligations in
this Lease up to and including the Termination Date. On the Termination Date,
the rights and obligations of Landlord and Tenant that have not accrued or do
not survive this Lease by its terms or by law will cease. The termination option
shall be personal to the original Tenant named herein, or a transferee which
succeeds to such original Tenant’s interest herein pursuant to an Exempt
Transfer as described in Section 9.1(c) hereof, and shall become null and void
upon any other assignment or sublease of this Lease by Tenant.
 
 
6

 
 
ARTICLE IV
RENT AND OPERATING EXPENSES
 
Section 4.1                                            
Base Rent
 
Subject to the provisions of Section 4.3 below, from and after the Commencement
Date, Tenant shall pay to Landlord without deduction or offset, except as
expressly stated herein, the Base Rent for the Premises in the total amount
shown in Item 6 of the Basic Lease Provisions, subject to adjustments as
provided in subparagraph (b) below. The rent shall be due and payable in advance
commencing on the Commencement Date (as prorated for any partial month) and
continuing thereafter on the first day of each successive calendar month of the
Lease Term. No demand notice or invoice shall be required. An installment of
rent in the amount of one (1) full month’s Base Rent at the initial rate
specified in Item 6 of the Basic Lease Provisions shall be delivered to Landlord
concurrently with Tenant’s execution of this Lease and shall be applied against
the Base Rent first due and payable hereunder. As used in this Lease, the term
“Monthly Rental” shall mean the amount payable by Tenant in respect of any month
during the term for Base Rent and Tenant’s Percentage Share of Operating
Expenses (defined below); and the term “Additional Rent” shall mean all amounts
of any type whatsoever other than Base Rent to be paid by Tenant pursuant to the
terms of this Lease. Base Rent and Additional Rent are collectively referred to
herein as “rent” or “rental.”
 
Section 4.2                                            
Operating Expenses
 
(a) For each Expense Recovery Period, Tenant shall pay, as Additional Rent,
Tenant’s Percentage Share (as set forth in the Basic Lease Provisions) of
Operating Expenses (defined below). Tenant acknowledges Landlord’s rights to
make changes or additions to the Building from time to time pursuant to Section
6.5 below, in which event the total rentable square footage within the Building
shall be adjusted.
 
(b) Commencing prior to the start of the first full Expense Recovery Period of
the Lease (as set forth in Item 7 of the Basic Lease Provisions), and prior to
the start of each full or partial Expense Recovery Period thereafter, Landlord
shall give Tenant a written estimate of the amount of Tenant’s Percentage Share
of Operating Expenses for the Expense Recovery Period or portion thereof. Tenant
shall pay the estimated amount to Landlord in equal monthly installments in
advance with Base Rent. If Landlord has not furnished its written estimate for
any Expense Recovery Period by the time set forth above, Tenant shall continue
to pay cost reimbursements at the rates established for the prior Expense
Recovery Period, if any; provided that when the new estimate is delivered to
Tenant, Tenant shall, at the next monthly payment date, pay any accrued cost
reimbursements based upon the new estimate.
 
(c) Within one hundred twenty (120) days after the end of each Expense Recovery
Period, Landlord shall endeavor to furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period and the parties shall, within thirty (30) days thereafter,
make any payment or allowance necessary to adjust Tenant’s estimated payments,
if any, to Tenant’s Percentage Share of actual Operating Expenses for such
Expense Recovery Period as shown by the annual statement. Any amount due Tenant
shall be credited against installments next coming due under this Section 4.2,
and any deficiency shall be paid by Tenant together with the next installment.
If Tenant has not made estimated payments during the Expense Recovery Period,
any amount owing by Tenant pursuant to subsection (a) above shall be paid to
Landlord in accordance with Article XVI. Should Tenant fail to object in writing
to Landlord’s determination of actual Operating Expenses within sixty (60) days
following delivery of Landlord’s expense statement, Landlord’s determination of
actual Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties.
 
(d) Even though the Lease has terminated and the Tenant has vacated the Premises
when the final determination is made of Tenant’s share of Operating Expenses for
the Expense Recovery Period in which the Lease terminates, Tenant shall, upon
notice, pay the entire increase due over the estimated expenses paid.
Conversely, any overpayment made in the event expenses decrease shall be rebated
by Landlord to Tenant.
 
(e) If, at any time during any Expense Recovery Period, any one or more of the
Operating Expenses are increased to a rate(s) or amount(s) in excess of the
rate(s) or amount(s) used in calculating the estimated expenses for the year,
then Tenant’s estimated share of Operating Expenses shall be increased for the
month in which the increase becomes effective and for all succeeding months by
an amount equal to Tenant’s proportionate share of the increase. Landlord shall
give Tenant written notice of the amount or estimated amount of the increase,
the month in which the increase will become effective, Tenant’s monthly share
thereof, and the months for which the payments are due. Tenant shall pay the
increase to Landlord as a part of Tenant’s monthly payments of estimated
expenses, as provided in paragraph (b) above, commencing with the month in which
it is effective.
 
 
7

 
 
(f) The term Operating Expenses shall include all expenses of operation and
maintenance of the Building, together with all appurtenant Common Facilities (as
defined in Section 6.2), and shall include the following charges by way of
illustration but not limitation: water and sewer charges; taxes; insurance
premiums or reasonable premium equivalents, should Landlord elect to self-insure
any risk that Landlord is authorized to insure hereunder; license permit and
inspection fees; heat; light; power; janitorial services; air conditioning;
supplies; materials; equipment; tools; programs instituted to comply with
transportation management requirements and Landlord’s parking management
programs, including shuttles to and from off site locations; tenant services;
amortization of capital investments over their useful life in accordance with
generally accepted accounting principles; labor; reasonably allocated wages and
salaries fringe benefits and payroll taxes for administrative and other
personnel directly applicable to the Building, including both Landlord’s
personnel and outside personnel but exclusive of personnel above the level of
building manager; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2
and 10.2 and Exhibits B and C below; and a reasonable overhead/management fee.
It is understood that Operating Expenses shall include competitive charges for
direct services provided by any subsidiary or division of Landlord. The term
“taxes,” as used herein shall include the following: (i) all real estate taxes
or personal property taxes, as such property taxes may be reassessed from time
to time; (ii) other taxes, documentary transfer fees, charges and assessments
which are levied with respect to this Lease or to the Building, and any
improvements, fixtures and equipment and other property of Landlord located in
the Building except that general net income and franchise taxes imposed against
Landlord shall be excluded; (iii) any tax surcharge or assessment which shall be
levied in addition to or in lieu of real estate or personal property taxes other
than taxes covered by Article VIII; and (iv) costs and expenses incurred in
contesting the amount or validity of any tax by appropriate proceedings. In the
event utility expenses are reduced due to deregulation, the Operating Expenses
in Tenant’s Operating Expense Base Year shall be adjusted to reflect the reduced
utility expenses. A copy of Landlord’s unaudited statement of expenses shall be
made available to Tenant upon request. The Operating Expenses may be
extrapolated by Landlord to reflect at least ninety-five percent (95%) occupancy
of the rentable area of the Building during any Expense Recovery Period.
 
(g) Landlord shall have the right, from time to time, to allocate some or all of
the Operating Expenses for the Building among different portions, such as office
or retail portions, of the Building (“Cost Pools”), in accordance with generally
accepted accounting and management practices. The Operating Expenses within each
Cost Pool shall be allocated and charged to tenants within such Cost Pool as an
amount per square foot of rentable area, based upon the total rentable area
within such Cost Pool. The Operating Expenses for the Building (or only those
Operating Expenses allocable to the Cost Pool of the Building which includes the
tenants of such space, if such an allocation is made) shall be allocated and
charged to tenants based on the rentable area of the Building (or based on the
rentable area of such Cost Pool if such an allocation of Operating Expenses is
made).
 
(h) Without limiting the generality of the terms and provisions of subparagraph
(c) above, Tenant shall have the right to review or audit, at Tenant’s sole
cost, any of Landlord’s books and records pertaining to Operating Expenses or
Landlord’s calculations of Tenant’s Percentage Share thereof, on thirty (30)
days’ advance written notice thereof to Landlord, which notice shall be
delivered, if at all, within one (1) year of Landlord’s delivery of the annual
expense reconciliation statement to Tenant. In no event shall Tenant perform
more than one audit during any calendar year. Such review or audit shall take
place where such records are kept (provided such location is in the general
geographic region of the Building), and shall be conducted by a reputable firm
which regularly provides such services or any reputable accounting firm chosen
by Tenant. Tenant shall use all reasonable efforts to minimize interference with
Landlord’s business during any such audit and Tenant shall provide a copy of
such audit to Landlord within thirty (30) days of receipt of same by Tenant. If
such examination shall establish any overcharge by Landlord, the amount of such
overcharge shall be automatically credited against Tenant’s Operating Expenses
contributions next coming due hereunder, or upon the expiration or termination
of this Lease pay to Tenant the unapplied balance of any such credit.
 
Section 4.3                                            
Security Deposit
 
Concurrently with Tenant’s delivery of this Lease, Tenant shall deliver to
Landlord the Security Deposit, as stated in Item 9 of the Basic Lease
Provisions, to be held by Landlord as security for the full and faithful
performance of Tenant’s obligations under this Lease. Upon any default or breach
by Tenant under the Lease, including specifically Tenant’s failure to pay Base
Rent or Additional Rent or to abide by its obligations under Sections 7.1 and
15.3 below, Landlord may, without prejudice to any other remedy it has, draw on
that portion of the Security Deposit (i) as full or partial compensation for
that default, (ii) for any expense, loss, damage or liability that Landlord
suffers because of Tenant’s default or breach, or (iii) pay any arrearage or
otherwise any Base Rent or Additional Rent in default or breach. If any portion
of the Security Deposit is so applied, Tenant shall, within five (5) days after
such application by Landlord, restore the Security Deposit to its original
amount. Landlord shall not be required to keep the proceeds of the Security
Deposit separate from its general funds and Tenant shall not be entitled to
interest on the Security Deposit, if any. In the event of bankruptcy or other
debtor relief proceedings by or against Tenant, the Security Deposit shall be
deemed to be applied first to the payment of rent and other charges due
Landlord, in the order that such rent or charges become due and owing, for all
periods prior to filing of such proceedings. So long as no default by Tenant has
occurred before the end of the 36th full month of the Lease Term and no
circumstance then exists that would be a default by Tenant after giving of
notice or the passage of time, or both, Landlord will return to Tenant before
the end of the 37th full month of the Lease Term the amount by when the Security
Deposit exceeds the Base Rent due for the last full month of the Lease Term. If
Tenant fully performs its obligations under this Lease, the Security Deposit or
any balance thereof shall be returned to Tenant (or at Landlord’s option to the
last assignee of Tenant’s interest in this Lease) after the expiration of the
Lease Term, provided that Landlord may retain the Security Deposit until such
time as all amounts due from Tenant in accordance with this Lease have been
determined and paid in full.
 
 
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Section 4.4                                            
REIT
 
Landlord and Tenant hereby agree that it is their intent that all Rent due under
this Lease shall qualify as “rents from real property” within the meaning of
Sections 512(b)(3) and 856(d) of the Internal Revenue Code of 1986, as amended
(the “Code”) and the U.S. Department of the Treasury Regulations promulgated
thereunder (the “Regulations”). In the event that (i) the Code or the
Regulations, or interpretations thereof by the Internal Revenue Service
contained in revenue rulings or other similar public pronouncements, shall be
changed so that any Rent no longer so qualifies as “rent from real property” for
purposes of either said Section 512(b)(3 or Section 856(d) or (ii) Landlord, in
its sole discretion, determines that there is any risk that all or part of any
Rent shall not qualify as “rents from real property” for the purposes of either
said Sections 512(d)(3) or 856(d), Tenant agrees to cooperate with Landlord and
enter into such amendment or amendments to this Lease as Landlord deems
necessary to qualify all Rents as “rents from real property,” provided, however,
that (A) any amendment required under this Section shall be made so as to
produce, to the extent possible, the equivalent (in economic terms) Rent as
payable before the amendment, and (B) in the event that Landlord determines that
an amendment cannot produce economically equivalent Rent as described in clause
(A), the Rent payable under any such amendment shall not be any less favorable
to Tenant than the Rent payable under this Lease immediately prior to such
amendment. The parties agree to execute such further commercially reasonable
instrument as may reasonably be required by Landlord in order to give effect to
the foregoing provisions of this Section. Additionally, no Rent payable under
this Lease may be attributable to personal property unless (i) such personal
property is leased under, or in connection with, the lease of real property
hereunder, and (ii) the Rent attributable to the personal property for each
taxable year does not exceed 15% of the total Rent for the taxable year
attributable to both the real and personal property leased under or in
connection with this Lease.
 
 
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ARTICLE V
USES
 
Section 5.1                                            
Uses
 
Tenant shall use the Premises only for the purposes stated in Item 3 of the
Basic Lease Provisions. The parties agree that any contrary use shall be deemed
to cause material and irreparable harm to Landlord and shall entitle Landlord to
injunctive relief, in addition to any other available remedy. Tenant shall not
do nor permit anything to be done in or about the Premises which will in any way
interfere with the rights of other occupants of the Building or use, or allow
the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant permit any nuisance or commit any waste in the
Premises. Tenant shall not do or permit to be done anything which will
invalidate or increase the cost of any insurance policy(ies) covering the
Building, and/or their contents, and shall comply with all applicable insurance
underwriters’ rules and the requirements of the Pacific Fire Rating Bureau or
any other organization performing a similar function. Tenant shall comply, at
its expense, with all present and future laws, ordinances, and requirements of
all governmental authorities that pertain to Tenant or its use of the Premises,
including without limitation, all federal and state occupational, health and
safety requirements and all recorded covenants, conditions and restrictions
affecting the Building whether or not Tenant’s compliance will necessitate
expenditures or interfere with its use and enjoyment of the Premises. Subject to
Section 7.6 below, Tenant shall not generate, handle, store or dispose of
“Hazardous Materials”, as that term is defined below, in the Premises or the
Building without the prior written consent of Landlord, which consent may be
refused or conditioned by Landlord in its sole and absolute discretion. Tenant
acknowledges that: (a) the Building does not comply in certain respects with the
requirements of the ‘Americans with Disabilities Act; and (b) certain portions
of the Building may contain asbestos containing material. Landlord has been
advised that any such materials are non-friable and do not represent a health
risk. Tenant is invited to review reports concerning these matters on file at
the office of the Building. Landlord makes no representations, express or
implied, as to the compliance of the Premises or the Building with applicable
construction related accessibility standards.
 
Section 5.2                                            
Signs
 
(a) Tenant shall have the right, at its sole cost and expense, to affix (i) one
(1) Building-standard identification sign on the second floor of the Building
outside the Premises, and (ii) so long as the We Work lease does not limit such
signage, Building signage west (highway) side of the Building in a location
designated by Landlord. The signage shall be in strict conformance with the
Building’s signage program and applicable laws, which may be amended by Landlord
from time to time in its sole and absolute discretion, and shall be provided by
Landlord, at Tenant’s expense. Tenant shall be responsible for maintaining such
signage in good condition and repair during the Lease Term. Tenant shall not
place or allow to be placed any other sign, decoration or advertising matter of
any kind that is visible from the exterior of the Premises. Any such sign or
decoration may be immediately removed by Landlord at Tenant’s expense without
notice to Tenant and such removal shall not constitute a breach of this Lease
nor entitle Tenant to claim damages. Tenant shall be responsible for removal,
and all costs and expenses resulting therefrom, of the sign following the
expiration or earlier termination of the Lease and for repairing any damage to
the Building or the Premises resulting from such removal.
 
(b) Landlord shall provide Tenant with three (3) lines of signage name space in
the Building’s “main lobby directory” (based upon a policy of one line per
4,000, more or less, rentable square feet of space in the Premises). Such
signage shall conform to criteria for signs established by Landlord and shall be
ordered through Landlord, at Tenant’s sole cost and expense.
 
 
10

 
 
ARTICLE VI
LANDLORD SERVICES
 
Section 6.1                                            
Utilities and Services
 
Landlord shall pay for and furnish to the Premises the utilities and services
described in Exhibit B subject to the conditions and payment obligations and
standards set forth in this Lease. Landlord shall not be liable for any failure
to furnish any services or utilities when the failure is the result of any
accident or other cause beyond Landlord’s reasonable control, nor shall Landlord
be liable for damage to Tenant’s equipment resulting from power surges.
Landlord’s failure to furnish any services or utilities shall not entitle Tenant
to any damages, relieve Tenant of the obligation to pay Base Rent or Additional
Rent, or constitute a constructive or other eviction of Tenant, except that
Landlord shall diligently attempt to restore the service or utility promptly.
Tenant shall comply with all rules and regulations, which Landlord may
reasonably establish for the provision of services and utilities and shall
cooperate with all reasonable conservation practices established by Landlord.
Landlord shall, at all reasonable times, have free access to all electrical and
mechanical installations of Landlord.
 
Section 6.2                                            
Operation and Maintenance of Common Facilities
 
During the Lease Term, Landlord shall operate all Common Facilities within the
Building. The term “Common Facilities” shall mean all areas within the exterior
boundaries of the Building which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and improvements
provided by Landlord for the common use of Landlord and tenants and their
respective employees and invitees, including without limitation, parking areas
and structures, driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant, common
entrances and lobbies, elevators and restrooms not located within the premises
of any tenant.
 
Section 6.3                                            
Use of Common Facilities
 
The occupancy by Tenant of the Premises shall include the use of the Common
Facilities in common with Landlord and with all others for whose convenience and
use the Common Facilities may be provided by Landlord, subject, however, to
compliance with all rules and regulations as are prescribed from time to time by
Landlord. Landlord shall operate and maintain the Common Facilities in the
manner Landlord may determine to be appropriate. Landlord shall, at all times
during the Lease Term, have exclusive control of the Common Facilities and may
restrain any use or occupancy, except as authorized by Landlord’s rules and
regulations. Tenant shall keep the Common Facilities clear of any obstruction or
unauthorized use related to Tenant’s operations. Nothing in this Lease shall be
deemed to impose liability upon Landlord for any damage to or loss of the
property of, or for any injury to Tenant, its invitees or employees. Landlord
may temporarily close any portion of the Common Facilities for repairs,
remodeling and/or alterations to prevent a public dedication or the accrual of
prescriptive rights or for any other reason deemed sufficient by Landlord.
 
Section 6.4                                            
Tenant Parking
 
During the Lease Term, Tenant shall be entitled to utilize the number and type
of parking spaces specified in the Summary within the parking areas for the
Property as designated by Landlord from time to time. Landlord shall at all
times have the right to establish and modify the nature and extent of the
parking areas for the Building and Property (including whether such areas shall
be surface, underground and/or other structures). In addition, if Tenant is not
the sole occupant of the Property, Landlord may, in its discretion, designate
any unreserved parking spaces as reserved parking. The terms and conditions for
parking at the Property shall be as specified in the Summary and in the Rules
and Regulations regarding parking as contained in Exhibit C attached hereto, as
the same may be modified by Landlord from time to time. Tenant shall not use
more parking spaces than its allotment and shall not use any parking spaces
specifically assigned by Landlord to other tenants, if any, or for such other
uses such as visitor, handicapped or other special purpose parking. Tenant’s
visitors shall be entitled to access to the parking areas on the Property
designated for visitor use, subject to availability of spaces and the terms of
the Summary.
 
Section 6.5                                            
Changes and Additions by Landlord
 
Landlord reserves the right to make alterations or additions to the Building or
to the attendant fixtures, equipment and Common Facilities. Landlord may, at any
time, relocate or remove any of the various buildings, parking areas and other
Common Facilities, and may add buildings and areas from time to time. No change
shall entitle Tenant to any abatement of Base Rent or Additional Rent or other
claim against Landlord, provided that the change does not deprive Tenant of
reasonable access to or use of the Premises. Landlord also reserves the right to
subdivide the property, and Tenant shall cooperate in signing any maps, permits
and certificates to facilitate same, provided that Tenant shall not thereby be
required to incur additional costs.
 
 
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ARTICLE VII
MAINTAINING THE PREMISES
 
Section 7.1                                            
Tenant’s Maintenance and Repair
 
When and if needed or whenever requested by Landlord, Tenant, at its sole
expense, shall make all repairs and replacements necessary to keep the Premises
in the condition as existed on the Commencement Date (or on any later date that
the improvements may have been installed), excepting ordinary wear and tear. All
repairs and replacements shall be at least equal in quality to the original
work, shall be made only by a licensed bonded contractor approved in writing in
advance by Landlord, and shall be made only at the time or times approved by
Landlord. Any contractor utilized by Tenant shall be subject to Landlord’s
standard requirements for contractors, as modified from time to time. Landlord
may impose reasonable restrictions and requirements with respect to repairs, as
provided in Section 7.3, and the provisions of Section 7.4 shall apply to all
repairs. Alternatively, Landlord may elect to make any such repair on behalf of
Tenant and at Tenant’s expense, and Tenant shall promptly reimburse Landlord for
all costs incurred upon submission of an invoice.
 
Section 7.2                                            
Landlord’s Maintenance and Repair
 
(a) Subject to Section 7.1 and Article XI, Landlord shall provide service,
maintenance and repair with respect to any air conditioning, ventilating or
heating equipment which serves the Premises and shall maintain in good repair
the roof, foundations, footings, the exterior surfaces of the exterior walls of
the Building, and the common structural, electrical and mechanical systems,
except that Tenant, at its expense, shall make all repairs which Landlord deems
reasonably necessary as a result of the act or negligence of Tenant, its agents,
employees, invitees, subtenants or contractors. Landlord shall have the right to
employ or designate any reputable person or firm, including any employee or
agent of Landlord or any of Landlord’s affiliates or divisions, to perform any
service, repair or maintenance function. Landlord need not make any other
improvements or repairs, except as specifically required under this Lease, and
nothing contained in this Section shall limit Landlord’s right to reimbursement
from Tenant for maintenance, repair costs and replacement costs as provided
elsewhere in this Lease. Tenant understands that it shall not make repairs at
Landlord’s expense or by rental offset.
 
 
(b) Except as provided in Sections 11.1 and 12.1 below, there shall be no
abatement of Base Rent or Additional Rent and no liability of Landlord by reason
of any injury to or interference with Tenant’s business arising from the making
of any repairs, alterations or improvements to any portion of the Building,
including repairs to the Premises, nor shall any related activity by Landlord
constitute an actual or constructive eviction; provided, however, that in making
repairs, alterations or improvements, Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant’s business in the Premises.
 
(c) Where maintenance or repair work is necessary within the Premises to cure an
emergency situation, Landlord shall attempt to contact Tenant prior to
performing such work, but, shall perform such work immediately upon Landlord’s
discovery thereof, if the circumstances dictate an immediate response,
regardless of whether Landlord was able to contact Tenant.
 
Section 7.3                                            
Alterations
 
Tenant shall make no alterations, additions or improvements to the Premises
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. If any such improvement requires approval by or notice to
the lessor of a superior lease or the holder of a mortgage, no work shall
proceed until such approval has been received or such notice has been given.
Landlord may impose, as a condition to its consent, any requirements that
Landlord, in its discretion, may deem reasonable or desirable, including but not
limited to a requirement that all work be covered by a lien and completion bond
satisfactory to Landlord and requirements as to the manner, time and contractor
for performance of the work. Landlord may require that Tenant enter into an
agreement with Landlord for the work to be performed by Landlord’s contractor,
in which event Tenant shall pay to Landlord, in advance as Additional Rent, the
cost of construction as estimated by Landlord with a final reconciliation
payment to be made by the appropriate party upon completion of the work. Should
Landlord authorize Tenant to perform the work with a contractor approved by
Landlord, Tenant shall obtain all required permits for the work and shall
perform the work in compliance with all applicable laws, regulations and
ordinances. In any event, Landlord shall be entitled to a supervision fee in the
amount of the lesser of Landlord’s actual costs incurred for supervision and
five percent (5%) of the total cost of the work. Under no circumstances shall
Tenant make any improvement, which incorporates asbestos-containing construction
materials into the Premises. Any request for Landlord’s consent shall be made in
writing and shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Unless Landlord otherwise agrees in
writing, all alterations, additions or improvements affixed to the Premises
(including any office partitions or telephone systems paid for from the Tenant
Improvement Allowance but excluding moveable trade fixtures and furniture) shall
become the property of Landlord and shall be surrendered with the Premises and
shall remain permanently affixed to the Building at the end of the Lease Term,
except that Landlord may, by notice to Tenant given at the time of Landlord’s
consent to the alteration or improvement, require Tenant to remove by the
Expiration Date or sooner termination date of this Lease all or any alterations,
decorations, fixtures, additions, improvements and the like installed either by
Tenant or by Landlord at Tenant’s request, and to repair any damage to the
Premises arising from that removal. Except as provided in this Lease or in any
Exhibit to this Lease, should Landlord make any alteration or improvement to the
Premises for Tenant, Landlord shall be entitled to reimbursement from Tenant for
all costs incurred. Within thirty (30) days after completion of Tenant’s
alterations requiring the submission of plans to Landlord as set forth herein,
Tenant shall furnish to Landlord a complete set of “as-built” plans and
specifications.
 
 
12

 
 
Section 7.4                                            
Mechanic’s Liens
 
Tenant shall keep the Premises free from any liens arising out of any work
performed, materials furnished, or obligations incurred by or for Tenant. Upon
request by Landlord, Tenant shall promptly cause any such lien to be released by
posting a bond in accordance with applicable law. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All expenses so incurred by
Landlord, including Landlord’s attorneys’ fees, shall be reimbursed by Tenant
promptly following Landlord’s demand, together with interest from the date of
payment by Landlord at the maximum rate permitted by law until paid. Tenant
shall give Landlord no less than twenty (20) days prior notice in writing before
commencing construction of any kind on the Premises so that Landlord may post
and maintain notices of non-responsibility on the Premises.
 
Section 7.5                                            
Entry and Inspection
 
Landlord shall at all times have the right to enter the Premises to inspect
them, to supply services in accordance with this Lease, to protect the interests
of Landlord in the Premises, and to submit the Premises to prospective or actual
purchasers or encumbrance holders or to prospective tenants (or during the last
one hundred and eighty [180] days of the Lease Term or when an uncured Tenant
default exists), all without being deemed to have caused an eviction of Tenant
and without abatement of Base Rent, except as provided elsewhere in this Lease.
Landlord shall at all times have and retain a key which unlocks all of the doors
in the Premises, excluding Tenant’s vaults and safes, and Landlord shall have
the right to use any and all means which Landlord may deem proper to open the
doors in an emergency in order to obtain entry to the Premises, and any entry to
the Premises obtained by Landlord shall not, under any circumstances, be deemed
to be a forcible or unlawful entry into or a detainer of the Premises or any
eviction of Tenant from the Premises.
 
Section 7.6                                            
Maintenance Related to Hazardous Materials
 
(a) Subject to the provisions contained in Section 5.1, as used herein, the term
“Hazardous Material” means any hazardous or toxic substance, chemical, material
or waste or component thereof, including radioactive materials and components,
(i) the presence of which requires investigation or remediation under any
federal, state or local statute, regulation, ordinance, order, action or policy;
or (ii) which is or becomes defined as a “hazardous waste” or “hazardous
substance” under any federal, state or local statute, regulation or ordinance or
amendments thereto; or (iii) which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is
or becomes regulated by any governmental authority, agency, department,
commission, board, agency or instrumentality of the United States, the State of
Colorado or any political subdivision thereof; or (iv) the presence of which on
the Premises causes or threatens to cause a nuisance upon the Premises or to
adjacent properties or poses or threatens to pose a hazard to the Premises or
the health or safety of persons on or about the Premises; or (v) without
limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons; or (vi) which contains polychlorinated biphenyls (PCBs), asbestos
or urea formaldehyde foam insulation.
 
(b) Tenant acknowledges that Landlord may incur costs (A) for complying with
laws, codes, regulations or ordinances relating to Hazardous Material, or (B)
otherwise in connection with Hazardous Material, including, without limitation,
the following: (i) Hazardous Material present in soil or ground water; (ii)
Hazardous Material that migrates, flows, percolates, diffuses or in any way
moves onto or under the Building; (iii) Hazardous Material present on or under
the Building as a result of any discharge, dumping or spilling (whether
accidental or otherwise) on the Building by other tenants of the Building or
their agents, employees, contractors or invitees, or by others; and (iv)
material which becomes Hazardous Material due to a change in laws, codes,
regulations or ordinances which relate to hazardous or toxic material,
substances or waste. Tenant agrees that the costs incurred by Landlord with
respect to, or in connection with, complying with laws, codes, regulations or
ordinances relating to Hazardous Material shall be an Operating Expense, unless
the cost of such compliance, as between Landlord and Tenant, is made the
responsibility of Tenant under this Lease. To the extent Tenant contributes to
any such Operating Expense relating to Hazardous Material, and such Operating
Expense is subsequently recovered or reimbursed through insurance, or recovered
from responsible third parties, or other action, Tenant shall be entitled to a
proportionate share of such Operating Expense to which such recovery or
reimbursement relates.
 
(c) Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not transport, use, store, maintain, generate, manufacture, handle,
dispose, release, or discharge any Hazardous Material upon or about the Premises
or the Building, nor permit Tenant’s employee, agents, contractors, and other
occupants of the Premises to engage in such activities upon or about the
Building. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance, and handling within,
the Premises of ordinary cleaning products and office supplies (such as
correction fluid, copy machine toner, etc.) that are not regulated by
governmental authorities and are used in the ordinary course of Tenant’s
permitted business, provided all of the following conditions are met: (i) such
substances are used and maintained only in such quantities as are reasonably
necessary for such permitted use of the Premises, strictly in accordance with
applicable laws and the manufacturers’ instructions therefor; (ii) such
substances are not disposed of, released, or discharged on the Building and are
transported to and from the Premises in compliance with all laws, and as
Landlord shall reasonably require; (iii) if any applicable law or if Landlord’s
trash removal contractor requires that any such substances be disposed of
separately from ordinary trash, Tenant shall make arrangements at Tenant’s sole
cost and expense for such disposal directly with a qualified and licensed
disposal company at a lawful disposal site, and shall ensure that disposal
occurs frequently enough to prevent unnecessary storage of such substances in
the Premises; and (iv) any remaining such substances shall be completely,
properly, and lawfully removed from the Building upon expiration or earlier
termination of this Lease.
 
 
13

 
 
(d) Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or
other regulatory action taken or threatened by any governmental or regulatory
authority with respect to the presence of any Hazardous Material on the Premises
or the migration thereof from or to other property, (ii) any demands or claims
made or threatened by any party against Tenant or the Premises relating to any
loss or injury resulting from any Hazardous Material on or from the Premises,
and (iii) any matters where Tenant is required by law to give a notice to any
governmental or regulatory authority respecting any Hazardous Material on the
Premises. Landlord shall have the right (but not the obligation) to join and
participate, as a party, in any legal proceedings or actions affecting the
Premises initiated in connection with any environmental, health, or safety law.
If any Hazardous Material is released, discharged or disposed of by Tenant or
any other occupant of the Premises, or their employees, agents, or contractors,
on or about the Building in violation of this Lease, in addition to notifying
Landlord, Tenant shall immediately, properly and in compliance with applicable
laws clean up and remove the Hazardous Material from the Building and any other
affected area, at Tenant’s sole cost and expense. Such clean up and removal
shall be subject to Landlord’s prior written approval (except in emergencies),
and shall include any and all testing, investigation, and preparation and the
implementation of any remedial action plan required by any governmental body
having jurisdiction or as reasonably by Landlord. If Tenant shall fail to comply
with the provisions of this Section within five (5) days after written notice by
Landlord, or such shorter time as may be required by law or in order to minimize
any hazard to persons or property, Landlord may, but shall not be obligated to,
arrange for such compliance directly or as Tenant’s agent through contractors or
other parties selected by Landlord, at Tenant’s sole cost and expense (without
limiting Landlord’s other remedies under this Lease or applicable laws.
 
(e) At such times as Landlord may request in its sole and absolute discretion,
Tenant shall provide Landlord with a written list identifying any Hazardous
Material then used, stored, or maintained upon the Premises, the use and
approximate quantity of each such material, a copy of any material safety data
sheet (“MSDS”) issued by the manufacturer thereof, written information
concerning the removal, transportation, and disposal of the same, and such other
information as Landlord may require or may be required by law. Tenant agrees
that it shall promptly complete and deliver to Landlord any disclosure form
regarding Hazardous Materials that may be required by any governmental agency.
Tenant shall promptly, upon demand, reimburse Landlord for any additional
insurance premium charged by reason of Tenant’s failure to comply with the
provisions of this Section 7.6.
 
(f) If any Hazardous Material is released, discharged, or disposed of on or
about the Building and such release, discharge, or disposal is not caused by
Tenant or other occupants of the Premises, or their employees, agents or
contractors, such release, discharge, or disposal shall be deemed casualty
damage under Article 11 to the extent that the Premises or the Common Facilities
serving the Premises are affected thereby; in such case, Landlord and Tenant
shall have the obligations and rights respecting such casualty damage provided
under Article 11 of this Lease.
 
(g) Tenant shall not install any freon-containing systems or equipment
including, but not limited to, refrigerators, freezers, supplemental HVAC
systems or self-contained air conditioners without Landlord’s prior written
approval. If a freon-containing system is so approved by Landlord, Tenant shall
remove said system prior to the Expiration Date of the Lease, at Tenant’s sole
cost and expense. Tenant shall comply with all legal requirements, industry
practices and rules established by Landlord in performing such removal work, and
Tenant shall restore the Premises to the condition, which existed immediately
prior to the installation of the freon system.
 
 
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ARTICLE VIII
TAXES AND ASSESSMENTS ON TENANT’S PREMISES
 
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises. When possible, Tenant shall cause its personal
property to be assessed and billed separately from the real property of which
the Premises form a part. If any taxes on Tenant’s personal property are levied
against Landlord or Landlord’s property, and if Landlord pays the same or if the
assessed value of Landlord’s property is increased by the inclusion of a value
placed upon the personal property of Tenant, and if Landlord pays the taxes
based upon the increased assessment, Tenant shall pay to Landlord the taxes so
levied against Landlord or the proportion of the taxes resulting from the
increase in the assessment. In calculating what portion of any tax bill which is
assessed against Landlord separately or Landlord and Tenant jointly is
attributable to Tenant’s fixtures and personal property, Landlord’s reasonable
determination shall be conclusive.
 
ARTICLE IX
ASSIGNMENT AND SUBLETTING
 
Section 9.1                                            
Rights of Parties
 
(a) Notwithstanding any provision of this Lease to the contrary, Tenant will
neither voluntarily nor by operation of law assign, sublet, encumber or
otherwise transfer all or any part of Tenant’s interest in this Lease or permit
the Premises to be occupied by anyone other than Tenant without Landlord’s prior
written consent, which consent shall not unreasonably be withheld in accordance
with the provisions of subparagraph (d) below. Subject to subparagraph (c)
below, no assignment (whether voluntary, involuntary or by operation of law) and
no subletting shall be valid or effective without Landlord’s prior written
consent and at Landlord’s election shall constitute a material default of this
Lease. Landlord shall not be deemed to have given its consent to any assignment
or subletting by any other course of action, including its acceptance of any
name for listing in the Building directory. To the extent not prohibited by
provisions of the Bankruptcy Code 11 U.S.C. Section 101 et seq. (the Bankruptcy
Code), including Section 365(f)(1), Tenant, on behalf of itself and its
creditors, administrators and assigns, waives the applicability of Section
365(e) of the Bankruptcy Code, unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord’s standard for consent, as set forth
in subparagraph (d) below. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment, shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord,
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment and shall, upon demand, execute and deliver to Landlord
an instrument confirming that assumption.
 
(b) If Tenant or Tenant’s guarantor hereunder, if any, is a corporation or is an
unincorporated association, limited liability company or partnership, the
transfer of any stock or other ownership interest in the corporation,
association, or company or partnership, which results in a change in the voting
control of Tenant or Tenant’s guarantor, if any, shall be deemed an assignment
within the meaning and provisions of this Article. In addition, any change in
the status of the entity, such as but not limited to the withdrawal of a general
partner, shall be deemed an assignment within the meaning of this Article.
 
(c) Notwithstanding anything to the contrary herein, Tenant, without the
approval of Landlord (but with thirty [30] days’ prior written notice indicating
the basis upon which the transaction qualifies as an Exempt Transfer), and
without being subject to any right of Landlord to recapture the Premises, to
receive any portion of the consideration for the transfer, or to declare a
default of this Lease, may assign the Lease, or sublease the whole of the
Premises, to any of the following (each an “Exempt Transfer”): (i) any
corporation, limited liability company or other entity which by virtue of its
direct or indirect ownership of the stock, membership interests or other
ownership interest, as applicable, of Tenant, has the power to direct Tenant’s
management and operations (“Tenant’s Parent”); (ii) any corporation, limited
liability company or other entity the management and operations of which Tenant,
by virtue of Tenant’s direct or indirect ownership of the stock, membership
interests or other applicable ownership interest therein, has the power to
direct; (iii) any corporation, limited liability company or other entity the
management and operations of which Tenant’s Parent, by virtue of Tenant’s
Parent’s direct or indirect ownership of the stock, membership interests or
other applicable ownership interest therein, has the power to direct, (iv) any
corporation or other entity in which or with which Tenant, its successors or
assigns, is merged or consolidated, in accordance with applicable statutory
provisions for merger or consolidation, so long as the liabilities of the entity
participating in such merger or consolidation are assumed by the entity
surviving such merger or created by such consolidation, and written
acknowledgment of such assumption is provided to Landlord promptly upon the
consummation of such merger or consolidation; or (v) any corporation or other
entity acquiring all or substantially all of Tenant’s assets (including by means
of a purchase of all or substantially all of Tenants stock or other applicable
equity interests), so long as the liabilities of Tenant are assumed by the
acquirer of such assets and written confirmation of such assumption is provided
to Landlord concurrently with Tenant’s notice of such acquisition as required
under this paragraph. Notwithstanding the foregoing, the original Tenant (to the
extent it remains in existence) shall remain liable on the Lease after any
transfer described in the preceding sentence, and in no event shall any such
transfer release Tenant (or its transferee) from the use and/or any other
requirements and obligations under this Lease. In no event shall the provisions
of this Section apply to, or be used to permit, a transaction designed primarily
to avoid the requirement of obtaining Landlord’s consent to an assignment or
sublease to a third party (such as, by way of example and not by way of
limitation, assignment of this Lease to a single-asset subsidiary of Tenant and
the subsequent merger or consolidation of such subsidiary with, or the sale of
such subsidiary’s assets to, an entity not otherwise related to Tenant).
 
 
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(d) If Tenant desires to transfer an interest in this Lease to a corporation or
entity not set forth in subparagraph (c) above, it shall first notify Landlord
of its desire and shall submit in writing to Landlord: (i) the name and address
of the proposed transferee; (ii) the nature of any proposed subtenant’s or
assignee’s business to be carried on in the Premises; (iii) the terms and
provisions of any proposed sublease or assignment; and (iv) any other
information requested by Landlord and reasonably related to the transfer. Except
as provided in subparagraph (e) below, Landlord shall not unreasonably withhold
its consent provided: (1) the use of the Premises will be consistent with the
provisions of this Lease and with Landlord’s commitment to other tenants of the
Building; (2) fifty percent (50%) of any profit received by the Tenant from the
assignment or subletting, whether during or after the Lease Term (after the
deduction of Tenant’s reasonable attorneys’ fees, brokerage fees and improvement
allowances or other out of pocket economic concessions incurred pursuant to such
assignment or sublease), shall be paid to Landlord when received; (3) at
Landlord’s election, insurance requirements shall be brought into conformity
with Landlord’s then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including but not limited to a balance sheet of
the proposed subtenant or assignee as of a date within ninety (90) days of the
request for Landlord’s consent and statements of income or profit and loss of
the proposed subtenant or assignee for the two-year period preceding the request
for Landlord’s consent; (5) any proposed subtenant or assignee demonstrates to
Landlord’s reasonable satisfaction a record of successful experience in
business; (6) the proposed assignee or subtenant is not an existing tenant of
the Building; and (7) the proposed transfer will not impose additional burdens
or adverse tax effects on Landlord. If Landlord consents to the proposed
transfer, Tenant may, within ninety (90) days after the date of the consent,
effect the transfer upon the terms described in the information furnished to
Landlord; provided that any material change in the terms shall be subject to
Landlord’s consent as set forth in this Section. Landlord shall approve or
disapprove any requested transfer within thirty (30) days following receipt of
Tenant’s written request and the information set forth above.
 
(e) Notwithstanding the provisions of subparagraphs (a) or (d) above, in lieu of
consenting to a proposed assignment or subletting, Landlord may elect to (i)
sublease the Premises (or the portion proposed to be subleased) or take an
assignment of Tenant’s interest in this Lease upon the same terms as offered or
marketed to the proposed subtenant or assignee (excluding terms relating to the
purchase of personal property the use of Tenant’s name or the continuation of
Tenant’s business); or (ii) terminate this Lease as to the portion of the
Premises proposed to be subleased or assigned with a proportionate abatement in
the rent payable under this Lease, effective on the date that the proposed
sublease or assignment would have become effective. Landlord may, thereafter, at
its option, assign or re-let any space so recaptured to any third party,
including without limitation the proposed transferee of Tenant.
 
(f) If Landlord’s consent to a transfer is required, Tenant shall pay to
Landlord (i) a transfer analysis fee of One Thousand Dollars ($1,000.00) when
Landlord’s consent to such transfer is requested by Tenant, and (ii) Landlord’s
reasonable attorneys’ fees and costs incurred in connection with the transfer.
 
(g) Tenant agrees that it shall not assign, sublease or license, nor advertise
as available for assignment, sublease or license, nor list with any broker for
assignment, sublease or license, all or any portion of the Premises for a
consideration which is less than the fair market rental value, as determined by
Landlord in its reasonable discretion, for comparable space in the Building for
a comparable term commencing concurrently with the assignment, sublease or
license term, with comparable rent credits and tenant improvement allowances, if
any. Within 10 days after Landlord receives any written request from Tenant for
Landlord’s estimate of the fair market rental value for specified space, which
request shall identify the space in question, the proposed term and the proposed
rent credits and improvement allowances, Landlord shall notify Tenant in writing
of the fair market rental value for such space for a comparable term with
comparable rent credits and tenant improvement allowances, if any.
 
Section 9.2                                            
Effect of Transfer
 
No subletting or assignment, even with the consent of Landlord, shall relieve
Tenant of its obligation to pay Base Rent and Additional Rent and to perform all
its other obligations under this Lease. Moreover, Tenant shall indemnify,
defend, protect and hold Landlord harmless, as provided in Section 10.3, for any
act or omission by an assignee or subtenant. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall
be liable, jointly and severally, with Tenant for the payment of all Base Rent
and Additional Rent and for the due performance of all of Tenant’s obligations
under this Lease. No transfer shall be binding on Landlord unless any document
memorializing the transfer is delivered to Landlord and both the
assignee/subtenant and Tenant deliver to Landlord an executed consent to
transfer instrument prepared by Landlord and consistent with the requirements of
this Article. The acceptance by Landlord of any payment due under this Lease
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer. Consent by Landlord
to one or more transfers shall not operate as a waiver or estoppel to the future
enforcement by Landlord of its rights under this Lease.
 
 
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Section 9.3                                            
Sublease Requirements
 
The following terms and conditions shall apply to any subletting by Tenant of
all or any part of the Premises and shall be included in each sublease:
 
(a) Tenant hereby irrevocably assigns to Landlord all of Tenant’s interest in
all rentals and income arising from any sublease of the Premises and Landlord
may collect such rent and income and apply same toward Tenant’s obligations
under this Lease; provided, however, that until a default occurs in the
performance of Tenant’s obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant’s obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an uncured default exists
in the performance of Tenant’s obligations under this Lease, to pay to Landlord
all sums then and thereafter due under the sublease. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.
 
(b) In the event of the termination of this Lease, Landlord may, at its sole
option, take over Tenant’s entire interest in any sublease and, upon notice from
Landlord, the subtenant shall attorn to Landlord. In no event, however, shall
Landlord be liable for any previous act or omission by Tenant under the sublease
or for the return of any advance rental payments or deposits under the sublease
that have not been actually delivered to Landlord, nor shall Landlord be bound
by any sublease modification executed without Landlord’s consent or for any
advance rental payment by the subtenant in excess of one month’s sublease
rental. The general provisions of this Lease, including without limitation those
pertaining to insurance and indemnification, shall be deemed incorporated by
reference into the sublease despite the termination of this Lease.
 
(c) Tenant agrees that Landlord may, at its sole option, authorize a subtenant
of the Premises to cure a default by Tenant under this Lease. Should Landlord
accept such cure, the subtenant shall have a right of reimbursement and offset
from and against Tenant under the applicable sublease.
 
ARTICLE X
INSURANCE AND INDEMNITY
 
SEE EXHIBIT D.
 
ARTICLE XI
DAMAGE OR DESTRUCTION
 
Section 11.1                                            
Restoration
 
(a) If the Building of which the Premises are a part is damaged, Landlord shall
repair that damage as soon as reasonably possible at its expense unless: (i) the
damage is not covered by Landlord’s fire and extended coverage insurance (or by
a normal extended coverage policy, should Landlord fail to carry that
insurance); or (ii) Landlord reasonably determines that the cost of repair would
exceed twenty-five percent (25%) of the full replacement cost of the Building
(Replacement Cost); or (iii) Landlord reasonably determines that the cost of
repair would exceed ten percent (10%) of the Replacement Cost and the damage
occurs during the final twelve (12) months of the Lease Term. Should Landlord
elect not to repair the damage for one of the preceding reasons, Landlord shall
so notify Tenant in writing within sixty- (60) days after the damage occurs, and
this Lease shall be deemed terminated as of: (a) if Tenant has continued its use
and occupancy, and is using and occupying the Premises as of the date of such
notice from Landlord, the thirtieth (30th) day following such notice, or (b) if
Tenant continued to use and occupy the Premises after the casualty but ceased
such use and occupancy prior to the date of such notice by Landlord, the date on
which Tenant ceased its use and occupancy of the Premises, or (c) if Tenant
ceased its occupancy and use of the Premises on or before the date of the
casualty, the date of the casualty.
 
 
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(b) Unless Landlord elects to terminate this Lease in accordance with subsection
(a) above, this Lease shall continue in effect for the remainder of the Lease
Term; provided that if the damage is so extensive as to reasonably prevent
Tenant’s substantial use and enjoyment of the Premises for more than nine (9)
months, then Tenant may elect to terminate this Lease by written notice to
Landlord within the sixty- (60)-day period stated in subsection (a).
 
(c) Commencing on the date of any damage to the Building and ending on the
sooner of the date the damage is repaired or the date this Lease is terminated,
the Monthly Rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to the total floor area of the Premises.
 
(d) Notwithstanding the provisions of subsections (a) (b) and (c) of this
Section, but subject to the provisions of subsection (e) below, the cost of any
repairs shall be borne by Tenant and Tenant shall not be entitled to rental
abatement or termination rights if the damage is due to the fault or neglect of
Tenant or its employees, subtenants, invitees or representatives. In addition,
the provisions of this Section shall not be deemed to require Landlord to repair
any improvements or fixtures that Tenant is obligated to repair or insure
pursuant to any other provision of this Lease.
 
(e) Notwithstanding any provision herein to the contrary, Landlord and Tenant
each hereby waives any and all rights of recovery, claim, action or cause of
action, against the other, its agents, officers, employees, partners, servants
or shareholders for any insured loss or damage that may occur to the Leased
Premises, or any improvements thereto or said Building of which the Leased
Premises are a part, or any improvements thereto, or any personal property of
such party therein, by reason of fire, the elements, or any other cause which is
insured against under the terms of standard commercial casualty risk property
insurance policy maintained by Landlord or Tenant, REGARDLESS OF CAUSE OR
ORIGIN, INCLUDING NEGLIGENCE OF THE OTHER PARTY HERETO, ITS AGENTS, OFFICERS,
EMPLOYEES, PARTNERS, SERVANTS OR SHAREHOLDERS and each party shall cause such
insurance policies to contain provisions or endorsements wherein each insurer
waives its rights of recovery against such parties.
 
Section 11.2                                            
Lease Governs
 
Tenant agrees that the provisions of this Lease, including without limitation
Section 11.1, shall govern any damage or destruction and shall accordingly
supersede any contrary statute or rule of law.
 
ARTICLE XII
EMINENT DOMAIN
 
Section 12.1                                            
Temporary Taking
 
If all or a material portion of the Premises is taken by any lawful authority by
exercise of the right of eminent domain or sold to prevent a taking, either
Tenant or Landlord may terminate this Lease effective as of the date possession
is required to be surrendered to the authority. In the event title to a portion
of the Building, other than the Premises, is taken or sold in lieu of taking,
and if Landlord elects to restore the Building in such a way as to alter the
Premises materially, either party may terminate this Lease by written notice to
the other party effective on the date of vesting of title. In the event neither
party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore
the Premises to substantially their condition prior to the taking and a
proportionate allowance shall be made to Tenant for the Monthly Rental
corresponding to the time during which and to the part of the Premises of which
Tenant is deprived on account of the taking and restoration. In the event of a
taking, Landlord shall be entitled to the entire amount of the condemnation
award without deduction for any estate or interest of Tenant; provided that
nothing in this Section shall be deemed to give Landlord any interest in or
prevent Tenant from seeking any award against the taking authority for the
taking of personal property and fixtures belonging to Tenant or for relocation
or business interruption expenses recoverable from the taking authority.
 
Section 12.2                                            
Total or Partial Taking
 
No temporary taking of the Premises shall terminate this Lease or give Tenant
any right to abatement of rent, and any award specifically attributable to a
temporary taking of the Premises shall belong entirely to Tenant. A temporary
taking shall be deemed to be a taking of the use or occupancy of the Premises
for a period not to exceed ninety (90) days.
 
 
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ARTICLE XIII
SUBORDINATION; ESTOPPEL CERTIFICATE
 
Section 13.1                                            
Total Condemnation of Premises
 
(a) At the option of Landlord this Lease shall be either superior or subordinate
to all ground or underlying leases, mortgages and deeds of trust, if any, which
may hereafter affect the Building, and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided that so long as
Tenant is not in default under this Lease, this Lease shall not be terminated or
Tenant’s quiet enjoyment of the Premises disturbed in the event of termination
of any such ground or underlying lease or the foreclosure of any such mortgage
or deed of trust to which Tenant has subordinated this Lease pursuant to this
Section. In the event of a termination or foreclosure, Tenant shall become a
tenant of and attorn to the successor-in-interest to Landlord upon the same
terms and conditions as are contained in this Lease and shall execute any
instrument reasonably required by Landlord’s successor for that purpose. Tenant
shall also, upon written request of Landlord, execute and deliver all
instruments as may be required from time to time to subordinate the rights of
Tenant under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust or, if requested by Landlord, to subordinate in whole
or in part any ground or underlying lease or the lien of any mortgage or deed of
trust to this Lease.
 
(b) Failure of Tenant to execute any statements or instruments necessary or
desirable to effectuate the provisions of this Article within ten (10) days
after written request by Landlord, in any form that Landlord may reasonably
require, shall constitute a material default under this Lease. In that event,
Landlord, in addition to any other rights or remedies it might have, shall have
the right by written notice to Tenant to terminate this Lease as of a date not
less than twenty (20) days after the date of Landlord’s notice. Landlord’s
election to terminate shall not relieve Tenant of any liability for its default.
 
Section 13.2                                            
Estoppel Certificate
 
(a) Tenant shall, at any time upon not less than ten (10) days prior written
notice from Landlord, execute, acknowledge and deliver to Landlord, in any form
that Landlord may reasonably require (including one substantially in the form of
Exhibit G hereto), a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or if modified stating the nature of
the modification and certifying that this Lease as modified is in full force and
effect), and the dates to which the Base Rent and Additional Rent have been paid
in advance, if any; and (ii) acknowledging that to Tenant’s knowledge there are
no uncured defaults on the part of Landlord or specifying each default, if any,
are claimed; and (iii) setting forth all further information that Landlord may
reasonably require. Tenant’s statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the Building.
 
(b) Tenant’s failure to deliver any estoppel statement within the provided time
shall constitute a default under this Lease and shall be conclusive upon Tenant
that (i) this Lease is in full force and effect without modification, except as
may be represented by Landlord; (ii) there are no uncured defaults in Landlord’s
performance; and (iii) not more than one month’s Monthly Rental has been paid in
advance.
 
 
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ARTICLE XIV
DEFAULTS AND REMEDIES
 
Section 14.1                                            
Tenant’s Defaults
 
In addition to any other event of default set forth in this Lease, the
occurrence of any one or more of the following events shall constitute a default
by Tenant:
 
(a)           The failure by Tenant to make any payment of Base Rent or
Additional Rent required to be made by Tenant, as and when due, where such
failure continues for more than five (5) days after written notice from Landlord
of the delinquency thereof; provided, however, that any such notice shall
constitute and/or be in lieu of, and shall not be in addition to, any notice
required under applicable law.
 
(b)           Assignment, sublease, encumbrance or other transfer of the Lease
by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means without the prior
written consent of Landlord, except as expressly permitted pursuant to Section
9.1(c) hereof.
 
(c)           The discovery by Landlord that any financial statement provided by
Tenant or by any affiliate, successor or guarantor of Tenant was materially
false.
 
(d)           The failure or inability by Tenant to observe or perform any of
the express covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in any other subsection of this Section, where
the failure continues for a period of fifteen (15) days after written notice
from Landlord to Tenant; provided, however, that any such notice shall
constitute and/or be in lieu of and not in addition to any notice required under
applicable law. However, if the nature of the failure is such that more than
fifteen (15) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences the cure within fifteen (15) days
and thereafter diligently pursues the cure to completion.
 
(e)           (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty [60] days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant’s assets
located at the Premises or of Tenant’s interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease where the seizure is not
discharged within thirty (30) days; or (v) Tenant’s convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant’s insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
 
(f)           The Tenant’s failure to take possession of the Premises or to
occupy same within sixty (60) days after the Commencement Date.
 
Section 14.2                                            
Landlord’s Remedies
 
In the event of any default by Tenant or in the event of the abandonment of the
Premises by Tenant, then, in addition to any other remedies available to
Landlord, Landlord may exercise the following remedies:
 
(a) Landlord may terminate Tenant’s right to possession of the Premises by any
lawful means in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. Such termination
shall not affect any accrued obligations of Tenant under this Lease. Upon
termination, Landlord shall have the right to reenter the Premises and remove
all persons and property. Landlord shall also be entitled to recover from
Tenant:
 
(i)           The worth at the time of award of the unpaid Base Rent and
Additional 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
Base Rent and Additional Rent, which would have been earned after termination
until the time of award, exceeds the amount of such loss that Tenant proves
could have been reasonably avoided;
 
 
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(iii)           The worth at the time of award of the amount by which the unpaid
Base Rent and Additional Rent for the balance of the Term after the time of
award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;
 
(iv)           Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which, in the ordinary course of things, would be likely to
result from Tenant’s default, including but not limited to the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, the unamortized portion of any tenant
improvements and brokerage commissions funded by Landlord in connection with
this Lease, reasonable attorneys’ fees and any other reasonable costs; and
 
(v)           Without limiting Landlord’s rights under this Lease, in the event
of Tenant’s default, all of Tenant’s merchandise, furniture, fixtures, equipment
and other personal property shall, at Landlord’s option (i) remain on the
Premises and, continuing during the length of such default, Landlord shall have
the right to take the exclusive possession of same and to use the same free of
rent or charge until all defaults have been cured, (ii) be removed by Landlord
from the Premises and placed in storage at a public warehouse at the expense and
risk of Tenant, or (iii) be removed by Tenant on demand by Landlord.
 
(b) At Landlord’s election all other amounts in addition to or in lieu of the
foregoing as may be permitted by law. Any sum other than Base Rent shall be
computed on the basis of the average monthly amount accruing during the
twenty-four (24) month period immediately prior to default, except that if it
becomes necessary to compute such Additional Rent before the twenty-four (24)
month period has occurred, then the computation shall be on the basis of the
average monthly amount during the shorter period. As used in subparagraphs (1)
and (2) above, the worth at the time of award shall be computed by allowing
interest at the rate of ten percent (10%) per annum. As used in subparagraph (3)
above, the worth at the time of award shall be computed by discounting the
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).
 
 
(c) Landlord may elect not to terminate Tenant’s right to possession of the
Premises in which event Landlord may continue to enforce all of its rights and
remedies under this Lease, including the right to collect all Base Rent and
Additional Rent as it becomes due. Efforts by the Landlord to maintain, preserve
or relet the Premises, or the appointment of a receiver to protect the
Landlord’s interests under this Lease, shall not constitute a termination of the
Tenant’s right to possession of the Premises. In the event that Landlord elects
to avail itself of the remedy provided by this subsection (ii), Landlord shall
not unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord’s consent as are
contained in this Lease.
 
 
(d) Landlord shall be under no obligation to observe or perform any covenant of
this Lease on its part to be observed or performed which accrues after the date
of any default by Tenant unless and until the default is cured by Tenant. The
various rights and remedies reserved to Landlord in this Lease or otherwise
shall be cumulative and, except as otherwise provided by applicable law,
Landlord may pursue any or all of its rights and remedies at the same time.
 
(e) No delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any default by Tenant. The
acceptance by Landlord of any Base Rent or Additional Rent shall not be a (i)
waiver of any preceding breach or default by Tenant of any provision of this
Lease, other than the failure of Tenant to pay the particular Base Rent or
Additional Rent accepted regardless of Landlord’s knowledge of the preceding
breach or default at the time of acceptance of such payment; or (ii) a waiver of
Landlord’s right to exercise any remedy available to Landlord by virtue of the
breach or default. The acceptance of any payment from a debtor-in-possession, a
trustee, a receiver or any other person acting on behalf of Tenant or Tenant’s
estate, shall not waive or cure a default under Section 14.1. No payment by
Tenant or receipt by Landlord of a lesser amount than the Base Rent and
Additional Rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated Base Rent or
Additional Rent, nor shall any endorsement or statement on any check or letter
be deemed an accord and satisfaction, and Landlord shall accept the check or
payment without prejudice to Landlord’s right to recover the balance of the Base
Rent or Additional Rent or pursue any other remedy available to it. No act or
thing done by Landlord or Landlord’s agents during the Lease Term shall be
deemed an acceptance of surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord’s agents shall have any power to accept the keys to
the Premises prior to the termination of this Lease and the delivery of the keys
to any employee shall not operate as a termination of the Lease or a surrender
of the Premises.
 
Section 14.3                                            
Late Payments
 
(a)           Any Base Rent or Additional Rent due under this Lease that is not
paid to Landlord within five (5) days of the date when due shall bear interest
at eighteen percent (18%) per annum from the date due until fully paid. The
payment of interest shall not cure any default by Tenant under this Lease. In
addition, Tenant acknowledges that the late payment by Tenant to Landlord of
Base Rent or Additional Rent will cause Landlord to incur costs not contemplated
by this Lease, the exact amount of which will be extremely difficult and
impracticable to ascertain. Those costs may include, but are not limited to,
administrative, processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any ground lease mortgage or trust deed
covering the Premises. Accordingly, if any Base Rent or Additional Rent due from
Tenant shall not be received by Landlord or Landlord’s designee within five (5)
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest provided above, a late charge in an amount equal to ten percent (10%)
of each delinquent payment. Acceptance of a late charge by Landlord shall not
constitute a waiver of Tenant’s default with respect to the overdue amount nor
shall it prevent Landlord from exercising any of its other rights and remedies.
 
 
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(b)           Following each second consecutive installment of Monthly Rental
that is not paid within five (5) days of the date when due, Landlord shall have
the option (i) to require that beginning with the first payment of Monthly
Rental next due, Monthly Rental shall no longer be paid in monthly installments
but shall be payable quarterly three (3) months in advance; and/or (ii) to
require that Tenant increase the amount, if any, of the Security Deposit by one
hundred percent (100%). Should Tenant deliver to Landlord, at any time during
the Lease Term, two (2) or more insufficient checks, the Landlord may require
that all monies then and thereafter due from Tenant be paid to Landlord by
cashier’s check.
 
Section 14.4                                            
Right of Landlord to Perform
 
All covenants and agreements to be performed by Tenant under this Lease shall be
performed at Tenant’s sole cost and expense and without any abatement of Base
Rent or Additional Rent or right of set-off. If Tenant fails to pay any sum of
money other than Monthly Rental or fails to perform any other act on its part to
be performed under this Lease, and the failure continues beyond any applicable
grace period set forth in Section 14.1, then, in addition to any other available
remedies, Landlord may, at its election, make the payment or perform the other
act on Tenant’s part. Landlord’s election to make the payment or perform the act
on Tenant’s part shall not give rise to any responsibility of Landlord to
continue making the same or similar payments or performing the same or similar
acts. Tenant shall promptly, upon demand by Landlord, reimburse Landlord for all
sums paid by Landlord and all necessary incidental costs together with interest
at the maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a default by Tenant in the
payment of Base Rent or Additional Rent.
 
Section 14.5                                            
Default by Landlord
 
Landlord shall not be deemed to be in default in the performance of any
obligation under this Lease unless and until it has failed to perform the
obligation within thirty (30) days after written notice by Tenant to Landlord
specifying in reasonable detail the nature and extent of the failure; provided,
however, that if the nature of Landlord’s obligation is such that more than
thirty (30) days are required for its performance, then Landlord shall not be
deemed to be in default if it commences performance within the thirty-(30)-day
period and thereafter diligently pursues the cure to completion. The directors,
officers, shareholders and employees of Landlord shall not be personally liable
for any claim or judgment against Landlord under any circumstances. If Landlord
is in default under this Lease, then Tenant's remedies shall be only to seek a
money judgment against Landlord, or an action for specific performance and/or
declaratory relief against Landlord, but in no event shall Tenant have the
remedy of a termination of this Lease. In the event Tenant seeks a money
judgment against Landlord, Tenant shall not attempt to seize or attach any asset
of Landlord except as otherwise provided herein. If Tenant recovers a money
judgment against Landlord, then such judgment shall be satisfied only out of the
proceeds of the sale received on execution of the judgment levied against the
right, title and interest of the Landlord in the Building or out of rent or
other income from the Building received or to be received by the Landlord.
Tenant shall not attempt to satisfy any such judgment from any other asset of
Landlord under any circumstances. Tenant acknowledges that this limitation on
Landlord's liability has been separately bargained for and that Landlord would
not enter into this Lease in the absence of this provision.
 
Section 14.6                                            
EXPENSES AND LEGAL FEES
 
Should either Landlord or Tenant bring any action in connection with this Lease,
the prevailing party shall be entitled to recover, as part of the action, its
reasonable attorneys’ fees and all other costs. The prevailing party, for the
purpose of this paragraph, shall be determined by the trier of the facts.
 
Section 14.7                                            
WAIVER OF JURY TRIAL
 
LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE
OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY AND EACH
PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE, TO THE FULLEST
EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, ALL SUCH RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO
AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES AND/OR ANY
CLAIM OF INJURY OR DAMAGE.
 
LANDLORD                                                                
TENANT
__________                                                                
_________
 
 
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ARTICLE XV
END OF TERM
 
Section 15.1                                            
Holding Over
 
This Lease shall terminate without further notice upon the expiration of the
Lease Term, and any holding over by Tenant after the expiration shall not
constitute a renewal or extension of this Lease or give Tenant any rights under
this Lease, except when in writing signed by both parties. If Tenant holds over
for any period after the expiration (or earlier termination) of the Lease Term,
Landlord may, at its option, treat Tenant as a tenant at sufferance only
commencing on the first (1st) day following the termination of this Lease and
subject to all of the terms of this Lease, except that the Monthly Rental shall
be one hundred and fifty percent (150%) of the total Monthly Rental for the
month immediately preceding the date of termination. If Tenant fails to
surrender the Premises upon the expiration of this Lease, despite demand to do
so by Landlord, Tenant shall indemnify and hold Landlord harmless from all loss
or liability, including without limitation any claims made by any succeeding
tenant relating to such failure to surrender. Acceptance by Landlord of Base
Rent or Additional Rent after the termination shall not constitute a consent to
a holdover or result in a renewal of this Lease. The foregoing provisions of
this Section are in addition to and do not affect Landlord's right of re-entry
or any other rights of Landlord under this Lease or at law.
 
Section 15.2                                            
Merger on Termination
 
The voluntary or other surrender of this Lease by Tenant or a mutual termination
of this Lease shall terminate any or all existing subleases unless Landlord, at
its option, elects in writing to treat the surrender or termination as an
assignment to it of any or all subleases affecting the Premises.
 
Section 15.3                                            
Surrender of Premises; Removal of Property
 
Upon the Expiration Date or upon any earlier termination of this Lease, Tenant
shall quit and surrender possession of the Premises to Landlord in as good
order, condition and repair as when received or as hereafter may be improved by
Landlord or Tenant, reasonable wear and tear and repairs which are Landlord’s
obligation excepted, and shall, without expense to Landlord, remove or cause to
be removed from the Premises all personal property and debris, except for any
items that Landlord may by written authorization allow to remain. Tenant shall
repair all damage to the Premises resulting from the removal, which repair shall
include the patching and filling of holes and repair of structural damage,
provided that Landlord may instead elect to repair any structural damage at
Tenant’s expense. If Tenant shall fail to comply with the provisions of this
Section, Landlord may affect the removal and/or make any repairs, and the cost
to Landlord shall be Additional Rent payable by Tenant upon demand. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.
 
 
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ARTICLE XVI
PAYMENTS AND NOTICES
 
All sums payable by Tenant to Landlord shall be paid without deduction or offset
in lawful money of the United States to Landlord at its address set forth in
Item 12 of the Basic Lease Provisions or at any other place as Landlord may
designate in writing. Unless this Lease expressly provides otherwise, as for
example in the payment of Base Rent pursuant to Section 4.1, all payments shall
be due and payable within thirty (30) days after demand. All payments requiring
proration shall be prorated on the basis of a thirty- (30)-day month and a three
hundred sixty- (360)-day year. Any notice, election, demand, consent, approval,
or other communication to be given or other document to be delivered by either
party to the other may be delivered in person or by courier or overnight
delivery to the other party or may be deposited in the United States mail, duly
registered or certified postage prepaid return receipt requested, and addressed
to the other party at the address set forth in Item 12 of the Basic Lease
Provisions, or if to Tenant at that address or from and after the Commencement
Date at the Premises (whether or not Tenant has departed from abandoned or
vacated the Premises). Either party may, by written notice to the other served
in the manner provided in this Article, designate a different address. Any
notice or other document shall be deemed served when actually delivered to the
applicable address (or when such delivery is refused) using any of the above-
enumerated delivery methods. If more than one person or entity is named as
Tenant under this Lease service of any notice upon any one of them shall be
deemed as service upon all of them.
ARTICLE XVII
RULES AND REGULATIONS
 
Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as Exhibit E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good order
or cleanliness of the Premises, Building, and Common Facilities. Landlord shall
not be liable to Tenant for any violation of the Rules and Regulations or the
breach of any covenant or condition in any lease by any other tenant. One or
more waivers by Landlord of any breach of the Rules and Regulations by Tenant or
by any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other. Tenant’s failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.
 
ARTICLE XVIII
BROKER’S COMMISSION
 
The parties recognize as the broker(s) who negotiated this Lease the firms, if
any, whose names are stated in Item 10 of the Basic Lease Provisions and agree
that Landlord shall be responsible for the payment of brokerage commissions to
those brokers unless otherwise provided in this Lease. Tenant warrants that it
has had no dealings with any other real estate broker or agent in connection
with the negotiation of this Lease and Tenant agrees to indemnify and hold
Landlord harmless from any cost expense or liability (including reasonable
attorneys’ fees) for any compensation, commissions or charges claimed by any
other real estate broker or agent employed or claiming to represent or to have
been employed by Tenant in connection with the negotiation of this Lease. The
foregoing agreement shall survive the termination of this Lease. If Tenant fails
to take possession of the Premises or if this Lease otherwise terminates prior
to the Expiration Date as the result of failure of performance by Tenant,
Landlord shall be entitled to recover from Tenant the unamortized portion of any
brokerage commission funded by Landlord in addition to any other damages to
which Landlord may be entitled.
 
ARTICLE XIX
TRANSFER OF LANDLORD’S INTEREST
 
In the event of any transfer of Landlord’s Interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor, in which Tenant has an interest,
shall be turned over, subject to that interest to the transferee, and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be subordinate, and no landlord under a
so-called sale-leaseback, shall be responsible in connection with the Security
Deposit unless the mortgagee or holder of the deed of trust or the landlord
actually receives the Security Deposit. It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall subject to the
foregoing, be binding on Landlord, its successors and assigns only during and in
respect to their respective successive periods of ownership.
 
 
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ARTICLE XX
INTERPRETATION
 
Section 20.1                                            
Gender and Number
 
Whenever the context of this Lease requires, the words “Landlord” and “Tenant”
shall include the plural as well as the singular, and words used in neuter,
masculine or feminine genders shall include the others.
 
Section 20.2                                            
Headings
 
The captions and headings of the articles and sections of this Lease are for
convenience only, are not a part of this Lease and shall have no effect upon its
construction or interpretation.
 
Section 20.3                                            
Joint and Several Liability
 
If more than one person or entity is named as Tenant, the obligations imposed
upon each shall be joint and several, and the act of or notice from or notice or
refund to or the signature of any one or more of them shall be shall be binding
on all of them with respect to the tenancy of this Lease, including but not
limited to any renewal extension, termination or modification of this Lease.
 
Section 20.4                                            
Successors
 
Subject to Articles IX and XIX, all rights and liabilities given to or imposed
upon Landlord and Tenant shall extend to and bind their respective heirs,
executors, administrators, successors and assigns. Nothing contained in this
Section is intended or shall be construed to grant to any person other than
Landlord and Tenant and their successors and assigns any rights or remedies
under this Lease.
 
Section 20.5                                            
Time of Essence
 
Time is of the essence with respect to the performance of every provision of
this Lease in which the laws of the State of Colorado.
 
Section 20.6                                            
Controlling Law
 
This Lease shall be governed by and interpreted in accordance with the laws of
the State of Colorado.

Section 20.7                                            
Severability
 
If any term or provision of this Lease, the deletion of which would not
adversely affect the receipt of any material benefit by either party or the
deletion of which is consented to by the party adversely affected, shall be held
invalid or unenforceable to any extent, the remainder of this Lease shall not be
affected and each term and provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
 
Section 20.8                                            
Waiver and Cumulative Remedies
 
One or more waivers by Landlord or Tenant of any breach of any term, covenant or
condition contained in this Lease shall not be a waiver of any subsequent breach
of the same or any other term, covenant or condition. Consent to any act by one
of the parties shall not be deemed to render unnecessary the obtaining of that
party’s consent to any subsequent act. No breach by Tenant of this Lease shall
be deemed to have been waived by Landlord unless the waiver is in a writing
signed by Landlord. The rights and remedies of Landlord under this Lease shall
be cumulative and in addition to any and all other rights and remedies which
Landlord may have.
 
 
25

 
 
Section 20.9                                            
Inability to Perform
 
In the event that either party shall be delayed or hindered in or prevented from
the performance of any work or in performing any act required under Lease by
reason of any cause beyond the reasonable control of that party, then the
performance of the work or the doing of the act shall be excused for a period of
the delay and the time for performance shall be extended for a period equivalent
to the period of the delay. The provisions of the Section shall not operate to
excuse Tenant form the prompt payment of Base Rent or Additional Rent or from
the timely performance of any other obligation under this Lease within Tenant’s
reasonable control.
 
Section 20.10                                            
Entire Agreement
 
This Lease, and its exhibits and other attachments, cover in full each and every
agreement of every kind between the parties concerning the Premises, the
Building, and all preliminary negotiations, oral agreements, understandings
and/or practices, except those contained in this Lease, are superseded and of no
further effect. Tenant waives its rights to rely on any representations or
promises made by Landlord or others which are not contained in this Lease. No
verbal agreement or implied covenant shall be held to modify the provisions of
this Lease, any statute, law or custom to the contrary notwithstanding.
 
Section 20.11                                            
Quiet Enjoyment
 
Upon the observance and performance of all the covenants, terms and conditions
on Tenant’s part to be observed and performed and subject to the other
provisions of this Lease, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Lease Term without hindrance or interruption by Landlord or any
other person claiming by or through Landlord.
 
Section 20.12                                            
Survival
 
All covenants of Landlord or Tenant which reasonably would be intended to
survive the expiration or sooner termination of this Lease, including without
limitation any warranty or indemnity hereunder, shall so survive and continue to
be binding upon and inure to the benefit of the respective parties and their
successors and assigns.
 
 
26

 
 
ARTICLE XXI
EXECUTION AND RECORDING
 
Section 21.1                                            
Counterparts
 
This Lease may be executed in one or more counterparts, each of which shall
constitute an original and all of which shall be one and the same agreement.
 
Section 21.2                                            
Corporate and Partnership Authority
 
If Tenant is a corporation or partnership, each individual executing this Lease
on behalf of the corporation or partnership represents and warrants that he or
she is duly authorized to execute and deliver this Lease on behalf of the
corporation or partnership and that this Lease is binding upon the corporation
or partnership in accordance with its terms. Tenant, shall at Landlord’s
request, deliver a certified copy of its board of directors’ resolution or
partnership agreement or certificate authorizing or evidencing the execution of
this Lease.
 
Section 21.3                                            
Execution of Lease; No Option or Offer
 
The submission of this Lease to Tenant shall be for examination purposes only
and shall not constitute an offer or option for Tenant to lease the Premises.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding upon Landlord, notwithstanding any time interval, until Landlord has, in
fact, executed and delivered this Lease to Tenant, it being intended that this
Lease shall only become effective upon execution by Landlord and delivery of a
fully executed counterpart to Tenant.
 
Section 21.4                                            
Recording
 
Tenant shall not cause the recordation of this Lease, a short form memorandum of
this Lease or any reference to this Lease.
 
Section 21.5                                            
Amendments
 
No amendment or termination of this Lease shall be effective unless in writing
signed by authorized signatories of Tenant and Landlord, or by their respective
successors-in-interest. No actions, policies, oral or informal arrangements,
business dealings or other course of conduct by or between the parties shall be
deemed to modify this Lease in any respect.
 
 
27

 
 
ARTICLE XXII
MISCELLANEOUS
 
Section 22.1                                            
Nondisclosure of Lease Terms
 
Tenant acknowledges and agrees that the terms of this Lease are confidential and
constitute proprietary information of Landlord. Disclosure of the terms could
adversely affect the ability of Landlord to negotiate other leases and impair
Landlord’s relationship with other tenants. Accordingly, Tenant agrees that it
and its partners, officers, directors, employees and attorneys shall not
intentionally and voluntarily disclose the terms and conditions of this Lease to
any other tenant or apparent prospective tenant of the Building, either directly
or indirectly, without the prior written consent of Landlord; provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
 
Section 22.2                                            
Representations by Tenant
 
The application, financial statements, and tax returns, if any submitted and
certified to by Tenant as an accurate representation of its financial condition
have been prepared, certified and submitted to Landlord as an inducement and
consideration to Landlord to enter this Lease. The application and statement are
represented and warranted by Tenant to be correct and to accurately and fully
reflect Tenant’s true financial condition as of the date of execution of this
Lease by Tenant. Tenant shall, during the Lease Term, promptly furnish Landlord
with annual financial statements reflecting Tenant’s financial condition upon
written request from Landlord.
 
Section 22.3                                            
Changes Requested by Lender
 
If, in connection with obtaining financing for the Building, the lender shall
request reasonable modifications in this Lease as a condition to the financing,
Tenant will not unreasonable withhold or delay its consent, provided that the
modifications do not materially increase the obligations of Tenant or materially
and adversely affect the leasehold interest created by this Lease.
 
Section 22.4                                            
Mortgagee Protection
 
No act or failure to act on the part of Landlord, which would otherwise entitle
Tenant to be relieved of its obligations hereunder or to terminate this Lease,
shall result in such a release or termination unless (a) Tenant has given notice
by registered or certified mail to any beneficiary of a deed of trust or
mortgage covering the Building whose address has been furnished to Tenant, and
(b) such beneficiary is afforded a reasonable opportunity to cure the default by
Landlord, including, if necessary, to effect the cure time to obtain possession
of the Building by power of sale or judicial foreclosure, provided that such
foreclosure remedy is diligently pursued.
 
Section 22.5                                            
Covenants and Conditions
 
All of the provisions of this Lease shall be construed to be conditions as well
as covenants as though the words specifically expressing or imparting covenants
and conditions were used in each separate provision.
 
Section 22.6                                            
Commercial Photography and Filming
 
Tenant agrees that Landlord may authorize the use of the Building, and Common
Facilities, or any part or parts thereof (exclusive of the Premises interior),
for filming of motion pictures, television tapes or films, commercials, videos,
documentaries, commentaries, and any and all other still, electronic, and other
image capture purposes (“Filming”). Tenant agrees that any such Filming may be
performed during, before, or after the Building’s Operating Hours and on days
the Building is not open to the public for business, as Landlord may determine
provided that Landlord shall use diligent efforts to minimize negative impacts
of such Filming activities on Tenant’s business. Tenant acknowledges that
certain inconveniences may result from such Filming (by way of example only:
noises, lights, heat, temporary blockage, closure, or re-routing of aisles,
corridors, or doors, and temporary re- routing of pedestrian traffic), and
Tenant agrees that Landlord shall not be liable for any losses or damages and
that there shall be no reduction or abatement in any Base Rent or other charges
payable hereunder as a result thereof. Landlord, in its sole discretion, may
elect to permit such Filming without any fee or other form of compensation or
benefits or may elect to charge a fee or other form of compensation or benefits
for such Filming; any such fee, compensation, or benefits may, in Landlord’s
sole discretion, be retained by Landlord for its sole use, be disbursed to one
or more tenants of the Building, or be applied to certain operating or
promotional expenses of the Building. Rental of the Premises for Filming shall
be permitted only with Landlord’s and Tenant’s mutual agreement and consent, and
shall be treated as a sublease and be subject to the terms and provisions hereof
respecting subleasing of the Premises. Tenant acknowledges that the Building and
adjacent properties are heavily used for Filming including exterior façade and
access points, which may restrict vision and sightline of the Building and/or
the Premises. Tenant acknowledges that Landlord has no ability to control
Filming and/or its impact on the Premises by such usage outside the Building.
 
 
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Section 22.7                                 
“As Is” Condition
 
Tenant acknowledges that it is taking the Premises in its “as is” condition
existing as of the execution of this Lease, except as otherwise expressly
provided herein. Landlord agrees to cause the Premises to be thoroughly cleaned
at Landlord’s sole cost and expense prior to and following Tenant’s move-in.
 
Section 22.8                                 
Non-Discrimination
 
Tenant covenants by and for itself, its successors, heirs, executors,
administrators and assigns, and all persons claiming under or through Tenant,
and this Lease is made and accepted upon and subject to the following
conditions: that there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, sex, sexual
preference, age, religion, marital status, ancestry or national origin in the
leasing, subleasing, transferring, use, or enjoyment of the Premises nor shall
Tenant itself, or any person claiming under or through Tenant, establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy, of tenants,
lessees, sublessees, subtenants or vendees in the Premises. Without limiting the
generality of the foregoing, Tenant shall comply with all requirements of
applicable laws, ordinances, regulations of any governmental authority,
including any requirements or restrictions in any document recorded against the
Building prior to the date hereof, pertaining to non-discriminatory practices at
the Premises and the Building.
 
Section 22.9                                 
Non-Affiliation Representation
 
Tenant represents and warrants that Tenant is not a PNC Entity, or a BlackRock
Entity (each as hereinafter defined), nor an Affiliate (as hereinafter defined)
of a PNC Entity, or a BlackRock Entity. Tenant covenants that Tenant will not
become a PNC Entity, or a BlackRock Entity or an Affiliate of a PNC Entity, or a
BlackRock Entity. Tenant further agrees that Tenant will not assign this Lease
or sublease all or any portion of the Premises to a PNC Entity, or a BlackRock
Entity or an Affiliate of a PNC Entity, or a BlackRock Entity without Landlord’s
prior written consent, which consent may be withheld in its sole and absolute
discretion. As used herein, (a) “BlackRock Entity” means BlackRock, Inc. and any
entity controlling, controlled by or under common control with BlackRock, Inc.
(and the parties agree that this definition shall include any institutional fund
managed by a BlackRock Entity), (b) “PNC” means The PNC Financial Services
Group, Inc., a Pennsylvania corporation, and (c) “PNC Entity” means PNC and any
entity controlling, controlled by or under common control with PNC (and the
parties agree this definition shall include any institutional fund managed by a
PNC Entity). Additionally, as used in this Section the term “Affiliate” shall
mean any Person who directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with such Person and the
term “Person” shall mean any individual, general partnership, limited
partnership, corporation, limited liability company, limited liability
partnership, joint venture, trust, business trust, cooperative or association or
other comparable business entity, and the heirs, executors, administrators,
legal representatives, successors and assigns of any of the foregoing where the
context so permits.
 
[Signature page follows.]
 
                                                      

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EXECUTION COPY
IN WITNESS WHEREOF, the parties have executed this Lease as of the date and year
first written above
 
LANDLORD:
TENANT:
 
 
2420 17TH STREET LLC,
a Delaware limited liability company
 
By: BlackRock Property Fund Operating Partnership, L.P.,
a Delaware limited partnership

 its Sole Member 

 
By: BlackRock US Core Property Fund, LLC,
a Delaware limited liability company

its General Partner 

 
By BlackRock US Core Property Fund, Inc.,
a Maryland corporation,

its Sole Member

 
By: BlackRock Realty Advisors, Inc. 
a Delaware corporation,

its investment manager

 
By: /s/ Angela Kralovec

Name: Angela Kralovec

Its: Director

 
NEW AGE BEVERAGES CORPORATION,
a Washington corporation
 
By: /s/ Gregory A. Gold

Its: CFO
 
 
 

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