Exhibit 10.31

 

[ex10-31tlogo.jpg] AIR COMMERCIAL REAL ESTATE ASSOCIATION

STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE — NET

(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

 

1.Basic Provisions (“Basic Provisions”).

 

1.1          Parties: This Lease (“Lease”), dated for reference purposes only
May  1, 2013      , is made by and between COLL OH RE HOLDINGS LLC, a Delaware
limited liability company                                 (“Lessor”) and Y City
Recycling LLC, an Ohio limited liability company                             
(“Lessee”), (collectively the “Parties,” or individually a “Party”).

 

1.2          Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 4005 All American Way,
Zanesville                                         , located in the County of
Muskingum                          , State of
Ohio                              , and generally described as (describe briefly
the nature of the property and, if applicable, the “Project”, if the property is
located within a Project)
n/a                                                                  
(“Premises”). (See also Paragraph 2)

 

1.3          Term: Five (5)                       years and Zero
(0)                       months (“Original Term”) commencing May 1,
2013                       (“Commencement Date”) and ending April 30, 2018, 5:00
p.m                           (“Expiration Date”). (See also Paragraph 3) *See
Addendum

 

1.4          Early Possession: If the Premises are available Lessee may have
non-exclusive possession of the Premises commencing n/a                    
(“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)

 

1.5          Base Rent: $25, 750.00 per month (“Base Rent”), payable on the
first (1st)                              day of each month commencing on the
Commencement Date                             . (See also Paragraph 4)

 

þ If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted. See Paragraph Addendum                          

 

1.6          Base Rent and Other Monies Paid Upon Execution:

 

(a)             Base Rent: $25, 750 .00                     for the period first
full month of the Lease                        

 

(b)             Security Deposit: $77,250.00         (“Security Deposit”). (See
also Paragraph 5)

 

(c)             Association Fees: $0.00              for the period
n/a                      

 

(d)             Other: $8, 500.00                         for all legal fees and
other costs incurred by Landlord in connection with the execution of this new
Lease with Lessee                       

 

(e)             Total Due Upon Execution of this Lease:
$111,500.00                                       

 

1.7          Agreed Use: A commercial manufacturing facility
                                    (See also Paragraph 6)

 

1.8          Insuring Party: Lessor is the “Insuring Party” unless otherwise
slated herein. (See also Paragraph 8)

 

1.9          Real Estate Brokers: (See also Paragraph 15)

 

(a) Representation: The following real estate brokers (the “Brokers”) and
brokerage relationships exist in this transaction (check applicable boxes):

 

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¨ n/a                                   represents Lessor exclusively (“Lessor’s
Broker”);

¨ n/a                                   represents Lessee exclusively (“Lessee’s
Broker”); or

¨ n/a                                   represents both Lessor and Lessee (“Dual
Agency”).

 

(b) Payment to Brokers: Upon execution and delivery of this Lease by both
Parties, Lessor shall pay to the Brokers for the brokerage services rendered by
the Brokers the fee agreed to in the attached separate written agreement or if
no such agreement is attached, the sum of                     or
                   % of the total Base Rent payable for the Original Term, the
sum of                     or                     of the total Base Rent payable
during any period of time that the Lessee occupies the Premises subsequent to
the Original Term, and/or the sum of                     or                    %
of the purchase price in the event that the Lessee or anyone affiliated with
Lessee acquires from Lessor any rights to the Premises.

 

1.10        Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by Brian Coll and Renee Coll
                                          . (“Guarantor”). (See also Paragraph
37)

 

1.11        Attachments. Attached hereto are the following, all of which
constitute a part of this Lease:

 

þ an Addendum consisting of Paragraphs 1.5                  through 57
                 ;

¨ a plot plan depicting the Premises;

¨ a current set of the Rules and Regulations;

¨ a Work Letter;

¨
                                                                                                           other
                                                     (specify):

 

 

 

 

                                                                                                                                                                                                              .

   

2.Premises.

 

2.1          Letting. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. While the approximate
square footage of the Premises may have been used in the marketing of the
Premises for purposes of comparison, the Base Rent stated herein is NOT tied to
square footage and is not subject to adjustment should the actual size be
determined to be different. Note: Lessee is advised to verify the actual size
prior to executing this Lease.

 

2.2          Condition. Lessor shall deliver the Premises to Lessee in AS – IS
condition broom clean and free of debris on the Commencement Date or the Early
Possession Date, whichever first occurs (“Start Date”), and, so long as the
required service contracts described in Paragraph 7.1(b0 below are obtained by
Lessee and in effect within thirty days following the Start Date, warrants that
the existing electrical, plumbing, fire sprinkler, lighting, heating,
ventilating and air conditioning systems (“HVAC”), loading doors, sump pumps, if
any, and all other such elements in the Premises, other than these constructed
by Lessee, shall be in good operating condition on said date, that the
structural elements of the roof, bearing walls and foundation of any buildings
on the Premises (the “Building”) shall be free of material defects, and that the
Premises do not contain hazardous levels of any mold or fungi defined as toxic
under applicable state or federal law. If a non compliance with sad warranty
exists as of the Start Date, or if one of such systems or elements should
malfunction or fail within the appropriate warranty period, Lesser shall, as
Lesser’s sole obligation with respect to such matter, except as otherwise
provided in this Lease, promptly after receipt of written notice from Lessee
setting forth with specificity the nature and extent of such non compliance,
malfunction or failure, rectify same at Lesser’s expense. The warranty periods
shall be as follow: (i) 6 months as to the HVAC systems, and (ii) 30 days as to
the remaining systems and other elements of the Building. If Lessee does not
give Lesser the required notice within the appropriate warranty period,
correction of any such non compliance, malfunction or failure shall be the
obligation of Lessee at Lessee’s sole cost and expense.

 

2.3         Compliance. Lessor makes no representation or warranty with respect
to warrants that to the best of its knowledge the improvements on the Premises
comply with the building codes, applicable laws, covenants or restrictions of
record, regulations, and ordinances (“Applicable Requirements”) that were in
effect at the time that each improvement, or portion thereof, was constructed,
including, without limitation, with respect. Said warranty does not apply to the
use to which Lessee will put the Premises, modifications which may be required
by the Americans with Disabilities Act or any similar laws as a result of
Lessee’s use (see Paragraph 50), or to any Alterations or Utility Installations
(as defined In Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is
responsible for determining whether or not the Applicable Requirements, and
especially the zoning, are appropriate for Lessee’s intended use, and
acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non compliance, rectify the same
at Lessor’s expense. If Lessee does not give Lessor written notice of a non
compliance with this warranty within 6 months following the Start Date,
correction of that non compliance shall be the obligation of Lessee at Lessee’s
sole cost and expense. If the Applicable Requirements are hereafter changed so
as to require during the term of this Lease the construction of an addition to
or an alteration of the Premises and/or Building, the remediation of any
Hazardous Substance, or the reinforcement or other physical modification of the
Unit, Premises and/or Building (Capital Expenditure”), Lessor and Lessee shall
allocate the cost of such work as follows:

 

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(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required
as a result of the specific and unique use of the Premises by Lessee as compared
with uses by tenants in general, Lessee shall be fully responsible for the cost
thereof, provided, however that if such Capital Expenditure is required during
the last 2 years of this Lease and the cost thereof exceeds 6 months’ Base Rent,
Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor
has elected to pay the difference between the actual cost thereof and an amount
equal to 6 months’ Base Rent. If Lessee elects termination, Lessee shall
immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor written notice specifying a termination date
at least 90 days thereafter. Such termination date shall, however, in no event
be earlier than the last day that Lessee could legally utilize the Premises
without commencing such Capital Expenditure.

 

(b) if such Capital Expenditure is not the result of the specific and unique use
of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor shall pay for such Capital Expenditure and Lessee
shall only be obligated to pay, each month during the remainder of the term of
this Lease or any extension thereof, on the date that on which the Base Rent is
due, an amount equal to 1/144th of the portion of such costs reasonably
attributable to the Premises. Lessee shall pay Interest on the balance but may
prepay its obligation at any time. If, however, such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof, Lessor
shall have the option to terminate this Lease upon 90 days prior written notice
to Lessee unless Lessee notifies Lessor, in writing, within 10 days after
receipt of Lessor’s termination notice that Lessee will pay for such Capital
Expenditure. If Lessor does not elect to terminate, and fails to tender its
share of any such Capital Expenditure, Lessee may advance such funds and deduct
same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid, if Lessee ts unable to finance Lessor’s share, or if the balance of
the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Lessee on an offset basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor.

 

(c) Notwithstanding the above, the provisions concerning Capital Expenditures
are intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a
result of an actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Lessee shall either: (i)
immediately cease such changed use or intensity of use and/or take such other
steps as may be necessary to eliminate the requirement for such Capital
Expenditure, or (il) complete such Capital Expenditure at its own expense.
Lessee shall not, however, have any right to terminate this Lease.

 

2.4           Acknowledgements. Lessee acknowledges that: (a) it has been given
an opportunity to inspect and measure the Premises, (b) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the size and condition
of the Premises (including but not limited to the electrical, HVAC and fire
sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements and the Americans with Disabilities Act), and their
suitability for Lessee’s intended use, (c) Lessee has made such investigation as
it deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to its occupancy of the Premises, (d) it is not
relying on any representation as to the size of the Premises made by Brokers or
Lessor, (e) the square footage of the Premises was not material to Lessee’s
decision to lease the Premises and pay the Rent stated herein, and (f) neither
Lessor, Lessor’s agents, nor Brokers have made any oral or written
representations or warranties with respect to said matters other than as set
forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have
made no representations, promises or warranties concerning Lessee’s ability to
honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability
of all proposed tenants.

 

2.5           Lessee as Prior Owner/Occupant. Lessee acknowledges and agrees
that, immediately prior to the Start Date, an affiliate of Lessee was the
occupant of the Premises, and accordingly anyThe-warrantfes made by Lessor in
Paragraph 2 shali be of no force or effect if immediately prior to tho Start
Dato Lessee was-th e-owner or oooupant-of-the Premises. In suoh ovortt, Lessee
shall be responsible for any necessary corrective work.

 

3.Term.

 

3.1           Term. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.

 

3.2           Early Possession.-Any provision horein granting Lossoo Early
Possession of tho Promicos is subject to-and oonditionod upon tho Promises boing
available for suoh pocsossion prior to tho Comrnoncomont Dato.—Any grant of
Early Possession only convoys a non cxoluoivo right to occupy tho Promises. If
Lossoo-tetaily or partially oocupios-tho Promicos prior-to4he Commoncement Dato,
tho obligation to pay Baso Ront ohall be abatod for the period of such
Early-Fessosoion. All other terms of this Loaso (including but-not limited to
the obligations to pay Roal Proporty-Taxes and insuranoo premiums and to
maintain tho Promisos) shall-be in effect during suoh period-. Any suoh Early
Possession shall not affcot tho Expiration

 

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3.3         Delay In Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or change the
Expiration Date. Lessee shall not, however, be obligated to pay Rent or perform
its other obligations until Lessor delivers possession of the Premises and any
period of rent abatement that Lessee would otherwise have enjoyed shall run from
the date of delivery of possession and continue for a period equal to what
Lessee would otherwise have enjoyed under the terms hereof, but minus any days
of delay caused by the acts or omissions of Lessee. If possession is not
delivered within 60 days after the Commencement Date, as the same may be
extended under the terms of any Work Letter executed be Parties, Lessee may, at
its option, by notice in writing within 10 days after the end of such 60 day
period, cancel this Lease, in which event the Parties shall be discharged from
all obligations hereunder. If such written notice is not received by Lessor
within said 10 day period, Lessee’s right to cancel shall terminate. If
possession of the Premises is not delivered within 120 days after the
Commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing.

 

3.4        Lessee Compliance. Lessor shall not be required to deliver possession
of the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor’s
election to withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.

 

4.Rent.

 

4.1.       Rent Defined. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
(“Rent”).

 

4.2        Payment. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
All monetary amounts shall be rounded to the nearest whole dollar. In the event
that any invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligated to pay the amount set forth in
this Lease. Rent for any period during the term hereof which is for less than
one full calendar month shall be prorated based upon the actual number of days
of said month. Payment of Rent shall be made to Lessor at its address stated
herein or to such other persons or place as Lessor may from time to time
designate in writing. Acceptance of a payment which is less than the amount then
due shall not be a waiver of Lessor’s rights to the balance of such Rent,
regardless of Lessor’s endorsement of any check so stating. In the event that
any check, draft, or other instrument of payment given by Lessee to Lessor is
dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future
Rent be paid by cashier’s check. Payments will be applied first to accrued late
charges and attorney’s fees, second to accrued interest, then to Base Rent,
Insurance and Real Property Taxes, and any remaining amount to any other
outstanding charges or costs.

 

4.3        Association Fees. In addition to the Base Rent, Lessee shall pay to
Lessor each month an amount equal to any owner’s association or condominium fees
levied or assessed against the Premises. Said monies shall be paid at the same
time and in the same manner as the Base Rent.

 

5.           Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit as security for Lessee’s faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount already due Lessor, for Rents
which will be due in the future, and/ or to reimburse or compensate Lessor for
any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of the Security
Deposit, Lessee shall within 10 days after written request therefor deposit
monies with Lessor sufficient to restore said Security Deposit to the full
amount required by this Lease. If the Base Rent increases during the term of
this Lease, Lessee shall, upon written request from Lessor, deposit additional
monies with Lessor so that the total amount of the Security Deposit shall at all
times bear the same proportion to the increased Base Rent as the initial
Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended
to accommodate a material change in the business of Lessee or to accommodate a
sublessee or assignee, Lessor shall have the right to increase the Security
Deposit to the extent necessary, in Lessor’s reasonable judgment, to account for
any increased wear and tear that the Premises may suffer as a result thereof. If
a change In control of Lessee occurs during this Lease and following such change
the financial condition of Lessee is, in Lessor’s reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with Lessor
as shall be sufficient to cause the Security Deposit to be at a commercially
reasonable level based on such change in financial condition. Lessor shall not
be required to keep the Security Deposit separate from its general accounts.
Within 90 days after the expiration or termination of this Lease, Lessor shall
return that portion of the Security Deposit not used or applied by Lessor. No
part of the Security Deposit shall be considered to be held in trust, to bear
interest or to be prepayment for any monies to be paid by Lessee under this
Lease.

 

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6.Use.

 

6.1         Use. Lessee shall use and occupy the Premises only for the Agreed
Use, or any other legal use which is reasonably comparable thereto for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of
or causes damage to neighboring premises or properties. Other than guide, signal
and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets,
animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or
delay its consent to any written request for a modification of the Agreed Use,
so long as the same will not impair the structural integrity of the improvements
on the Premises or the mechanical or electrical systems therein, and/or is not
significantly more burdensome to the Premises. If Lessor elects to withhold
consent, Lessor shall within 7 days after such request give written notification
of same, which notice shall include an explanation or Lessor’s objections to the
charge in the Agreed Use.

 

6.2        Hazardous Substances.

 

(a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in
this Lease shall mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee’s expense) with all
Applicable Requirements. “Reportable Use” shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning
materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any Reportable Use upon receiving such additional assurances as Lessor
reasonably deems necessary to protect itself, the public, the Premises and/or
the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete
encasements) and/or increasing the Security Deposit.

 

(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe,
that a Hazardous Substance has come to be located in, on, under or about the
Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor, and provide Lessor with
a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.

 

(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under, or about the Premises (including
through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s
expense, comply with all Applicable Requirements and take all investigatory
and/or remedial action reasonably recommended, whether or not formally ordered
or required, for the cleanup of any contamination of, and for the maintenance,
security and/or monitoring of the Premises or neighboring properties, that was
caused or materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease, by
or for Lessee, or any third party.

 

(d) Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its
agents, employees, lenders and ground lessor, if any, harmless from and against
any and all loss of rents and/or damages, liabilities, judgments, claims,
expenses, penalties, and attorneys’ and consultants’ fees arising out of or
involving any Hazardous Substance brought onto the Premises by or for Lessee, or
any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties not caused or contributed to by
Lessee). Lessee’s obligations shall include, but not be limited to, the effects
of any contamination or injury to person, property or the environment created or
suffered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease. No termination, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances, unless specifically so agreed by Lessor In
writing at the time of such agreement.

 

(e) Lessor Indemnification. Lessor and its successors and assigns shall
indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which result from Hazardous Substances which existed on the
Premises prior to Lessee’s occupancy or which are caused by the gross negligence
or willful misconduct of Lessor, its agents or employess. Lessor’s obligations,
as and when required by the Applicable Requirements, shall include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.

 

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(f) Investigations and Remediations. Lessor shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to Lessee’s occupancy, unless such remediation
measure is required as a result of Lessee’s use (including “Alterations”, as
defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall
be responsible for such payment. Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and Lessor’s
agents to have reasonable access to the Premises at reasonable times in order to
carry out Lessor’s investigative and remedial responsibilities.

 

(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph
9.1(e)) occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Lessor’s rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessor’s desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee’s commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor’s
notice of termination.

 

6.3           Lessee’s Compliance with Applicable Requirements. Except as
otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to the such Requirements, without regard to whether
such Requirements are now in effect or become effective after the Start Date.
Lessee shall, within 10 days after receipt of Lessor’s written request, provide
Lessor with copies of all permits and other documents, and other information
evidencing Lessee’s compliance with any Applicable Requirements specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing (with
copies of any documents involved) of any threatened or actual claim, notice,
citation, warning, complaint or report pertaining to or involving the failure of
Lessee or the Premises to comply with any Applicable Requirements. Likewise,
Lessee shall immediately give written notice to Lessor of: (i) any water damage
to the Premises and any suspected seepage, pooling, dampness or other condition
conducive to the production of mold: or (ii) any mustiness or other odors that
might indicate the presence of mold in the Premises.

 

6.4           Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined
in Paragraph 30), representatives, designees and consultants shall have the
right to enter into Premises at any time, in the case of an emergency, and
otherwise at reasonable times after reasonable notice, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease. The cost of any such Inspections shall be paid by Lessor,
unless a violation of Applicable Requirements, or a Hazardous Substance
Condition (see paragraph 9.1) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case,
Lessee shall upon request reimburse Lessor for the cost of such inspection, so
long as such inspection is reasonably related to the violation or contamination.
In addition, Lessee shall provide copies of all relevant material safety data
sheets (MSDS) to Lessor within 10 days of the receipt of a written request
therefor.

 

7.          Maintenance; Repairs, Utility Installations; Trade Fixtures and
Alterations.

 

7.1           Lessee’s Obligations.

 

(a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3
(Compliance), 6.3 (Lessee’s Compliance with Applicable Requirements), 7.2
(Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee’s sole expense, keep the Premises, Utility Installations
(intended for Lessee’s exclusive use, no matter where located), and Alterations
in good order, condition and repair (whether or not the portion of the Premises
requiring repairs, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee’s use, any prior use, the elements or the age of such portion
of the Premises), including, but not limited to, all equipment or facilities,
such as plumbing, HVAC equipment, electrical, lighting facilities, boilers,
pressure vessels, fire protection system, fixtures, walls (interior and
exterior), foundations, ceilings, roofs, roof drainage systems, floors, windows,
doors, plate glass, skylights, landscaping, driveways, parking lots, fences,
retaining walls, signs, sidewalks and parkways located in, on, or adjacent to
the Premises. Lessee, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices, specifically
including the procurement and maintenance of the service contracts required by
Paragraph 7.1(b) below. Lessee’s obligations shall include restorations,
replacements or renewals when necessary to keep the Premises and all
improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in a first-class condition (including, e.g. graffiti
removal) consistent with the exterior appearance of other similar facilities of
comparable age and size in the vicinity, including, when necessary, the exterior
repainting of the Building.

 

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(b) Service Contracts. Lessee shall, at Lessee’s sole expense, procure and
maintain contracts, with copies to Lessor, in customary form and substance for,
and with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Premises: (i) HVAC equipment, (ii) boiler, and pressure vessels, (iii) fire
extinguishing systems, including fire alarm and/or smoke detection, (iv)
landscaping and irrigation systems, (v) roof covering and drains, and (vi)
clarifiers. However, Lessor reserves the right, upon notice to Lessee, to
procure and maintain any or all of such service contracts, and Lessee shall
reimburse Lessor, upon demand, for the cost thereof.

 

(c) Failure to Perform. If Lessee fails to perform Lessee’s obligations under
this Paragraph 7.1, Lessor may enter upon the Premises after 10 days’ prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Lessee’s behalf, and put
the Premises in good order, condition and repair, and Lessee shall promptly pay
to Lessor a sum equal to 115% of the cost thereof.

 

(d) Replacement. Subject to Lessee’s indemnification of Lessor as set forth in
Paragraph 8.7 below, and without relieving Lessee of liability resulting from
Lessee’s failure to exercise and perform good maintenance practices, if an item
described in Paragraph 7.1(b) cannot be repaired other than at a cost which is
in excess of 50% of the cost of replacing such item, then such item shall be
replaced by Lessor, and the cost thereof shall be prorated between the Parties
and Lessee shall only be obligated to pay, each month during the remainder of
the term of this Lease, on the date on which Base Rent is due, an amount equal
to the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is 144 (ie. 1/144th of
the cost per month). Lessee shall pay Interest on the unamortized balance but
may prepay its obligation at any time.

 

7.2           Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any
manner whatsoever, to repair and maintain the Premises, or the equipment
therein, all of which obligations are intended to be that of the Lessee. It is
the intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.

 

7.3           Utility Installations; Trade Fixtures; Alterations.

 

(a) Definitions. The term “Utility installations” refers to all floor and window
coverings, air and/or vacuum lines, power panels, electrical distribution,
security and fire protection systems, communication cabling, lighting fixtures,
HVAC equipment, plumbing, and fencing in or on the Premises. The term “Trade
Fixtures” shall mean Lessee’s machinery and equipment that can be removed
without doing material damage to the Premises. The term “Alterations” shall mean
any modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or
Utility Installations’1 are defined as Alterations and/or Utility Installations
made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

 

(b) Consent. Lessee shall not make any Alterations or Utility Installations to
the Premises without Lessor’s prior written consent. Lessee may, however, make
non-structural Alterations or Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, will not affect the
electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost
thereof during this Lease as extended does not exceed a sum equal to 3 month’s
Base Rent in the aggregate or a sum equal to one month’s Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof
penetrations and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting such approval,
require Lessee to utilize a contractor chosen and/or approved by Lessor. Any
Alterations or Utility Installations that Lessee shall desire to make and which
require the consent of the Lessor shall be presented to Lessor in written form
with detailed plans. Consent shall be deemed conditioned upon Lessee’s: (i)
acquiring all applicable governmental permits, (ii) furnishing Lessor with
copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month’s Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the
estimated cost of such Alteration or Utility Installation and/or upon Lessee’s
posting an additional Security Deposit with Lessor.

 

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(c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use on
the Premises, which claims are or may be secured by any mechanic’s or
materialmen’s lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof, if
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor’s attorneys’ fees and costs.

 

7.4           Ownership; Removal; Surrender; and Restoration.

 

(a) Ownership. Subject to Lessor’s right to require removal or elect ownership
as hereinafter provided, all Alterations and Utility Installations made by
Lessee shall be the property of Lessee, but considered a part of the Premises.
Lessor may, at any time, elect in writing to be the owner of all or any
specified part of the Lessee Owned Alterations and Utility installations. Unless
otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations
and Utility Installations shall, at the expiration or termination of this Lease,
become the property of Lessor and be surrendered by Lessee with the Premises.

 

(b) Removal. By delivery to Lessee of written notice from Lessor net earlier
than 90 and not later than 30 days prior to the end of the term of this Lease,
Lessor may require that any or all Lessee Owned Alterations or Utility
Installations be removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.

 

(c) Surrender; Restoration. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. “Ordinary
wear and tear” shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Notwithstanding the foregoing, if
this Lease is for 12 months or less, then Lessee shall surrender the Premises in
the same condition as delivered to Lessee on the Start Date with NO allowance
for ordinary wear and tear. Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Lessee. Lessee shall completely remove
from the Premises any and all Hazardous Substances brought onto the Premises by
or for Lessee, or any third party (except Hazardous Substances which were
deposited via underground migration from areas outside of the Premises) even if
such removal would require Lessee to perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. Any personal property of Lessee not removed on or
before the Expiration Date or any earlier termination date shall be deemed to
have been abandoned by Lessee and may be disposed of or retained by Lessor as
Lessor may desire. The failure by Lessee to timely vacate the Premises pursuant
to this Paragraph 7.4(c) without the express written consent of Lessor shall
constitute a holdover under the provisions of Paragraph 26 below.

 

8.          Insurance; Indemnity.

 

8.1           Payment For Insurance. Lessee shall pay for all insurance required
under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term. Payment shall
be made by Lessee to Lessor within 10 days following receipt of an invoice.

 

8.2           Liability Insurance.

 

(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial
General Liability policy of insurance protecting Lessee and Lessor as an
additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an annual aggregate of not less than
$2,000,000. Lessee shall add Lessor as an additional insured by means of an
endorsement at least as broad as the Insurance Service Organization’s
“Additional Insured-Managers or Lessors of Premises’’ Endorsement. The policy
shall not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an “insured contract” for the performance of Lessee’s indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall
provide an endorsement on its liability policy(ies) which provides that its
insurance shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.
Lessee shall maintain Workers Compensation insurance as required by law.

 

(b) Carried by Lessor. Lessor shall maintain liability insurance in such form
and substance deemed necessary by Lessor as described in Paragraph 8.2(a), in
addition to, and not in lieu of, the insurance required to be maintained by
Lessee. Lessee shall not be named as an additional insured therein.

 

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8.3           Property Insurance - Building, Improvements and Rental Value.

 

(a) Building and Improvements. The Insuring Party shall obtain and keep in force
a policy or policies in the name of Lessor, with loss payable to Lessor, any
ground-lessor, and to any Lender insuring loss or damage to the Premises. The
amount of such insurance shall be equal to the full insurable replacement cost
of the Premises, as the same shall exist from time to time, or the amount
required by any Lender, but in no event more than the commercially reasonable
and available insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee’s personal property shall be insured
by Lessee not by Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct
physical loss or damage (except the perils of flood and/or earthquake unless
required by a Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition,
reconstruction or replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver of subrogation, and
inflation guard protection causing an increase in the annual property insurance
coverage amount by a factor of not less than the adjusted U.S. Department of
Labor Consumer Price Index for All Urban Consumers for the city nearest to where
the Premises are located. If such insurance coverage has a deductible clause,
the deductible amount shall not exceed $5,000 per occurrence, and Lessee shall
be liable for such deductible amount in the event of an Insured Loss.

 

(b) Rental Value. The Insuring Party shall may obtain and keep in force a policy
or policies in the name of Lessor with loss payable to Lessor and any Lender,
insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days (“Rental Value insurance”). Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be
liable for any deductible amount in the event of such loss.

 

(c) Adjacent Premises. If the Premises are part of a larger building, or of a
group of buildings owned by Lessor which are adjacent to the Premises, the
Lessee shall pay for any increase in the premiums for the property insurance of
such building or buildings if said increase is caused by Lessee’s acts,
omissions, use or occupancy of the Premises.

 

8.4           Lessee’s Property; Business Interruption Insurance; Worker’s
Compensation Insurance.

 

(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all
of Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and
Utility Installations. Such insurance shall be full replacement cost coverage
with a deductible of not to exceed $1,000 per occurrence. The proceeds from any
such insurance shall be used by Lessee for the replacement of personal property,
Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee
shall provide Lessor with written evidence that such insurance is in force.

 

(b) Business Interruption. Lessee shall obtain and maintain loss of income and
extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to all perils commonly insured against by
prudent lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils.

 

(c) Worker’s Compensation Insurance. Lessee shall obtain and maintain Worker’s
Compensation Insurance in such amount as may be required by Applicable
Requirements.

 

(d) No Representation of Adequate Coverage. Lessor makes no representation that
the limits or forms of coverage of insurance specified herein are adequate to
cover Lessee’s property, business operations or obligations under this Lease.

 

8.5           Insurance Policies. Insurance required herein shall be by
companies maintaining during the policy term a “General Policyholders Rating” of
at least A-, VII, as set forth in the most current issue of “Best’s Insurance
Guide”, or such other rating as may be required by a Lender. Lessee shall not do
or permit to be done anything which invalidates the required insurance policies.
Lessee shall, prior to the Start Date, deliver to Lessor certified copies of
policies of such insurance or certificates with copies of the required
endorsements evidencing the existence and amounts of the required insurance. No
such policy shall be cancelable or subject to modification except after 30 days
prior written notice to Lessor. Lessee shall, at least 10 days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or
“insurance binders” evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease, whichever is less.
If either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same.

 

8.6           Waiver of Subrogation. Without affecting any other rights or
remedies, Lessee and Lessor each hereby release and relieve the other, and waive
their entire right to recover damages against the other, for loss of or damage
to its property arising out of or incident to the perils required to be insured
against herein. The effect of such releases and waivers is not limited by the
amount of insurance carried or required, or by any deductibles applicable
hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.

 

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8.7           Indemnity. Except for Lessor’s gross negligence or willful
misconduct, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or
liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought
against Lessor by reason of any of the foregoing matters, Lessee shall upon
notice defend the same at Lessee’s expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be defended or indemnified. Lessee’s
indemnity obligations under this Paragraph 8.7 shall survive expiration or
earlier termination of this Lease.

 

8.8           Exemption of Lessor and Its Agents from Liability. Notwithstanding
the negligence or breach of this Lease by Lessor or its agents, neither Lessor
nor its agents shall be liable under any circumstances for: (i) injury or damage
to the person or goods, wares, merchandise or other property of Lessee, Lessee’s
employees, contractors, invitees, customers, or any other person in or about the
Premises, whether such damage or injury is caused by or results from fire,
steam, electricity, gas, water or rain, indoor air quality, the presence of mold
or from the breakage, leakage, obstruction or other defects of pipes, fire
sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, (ii) any damages arising from any
act or neglect of any other tenant of Lessor or from the failure of Lessor or
its agents to enforce the provisions of any other lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom.
Instead, it is intended that Lessee’s sole recourse in the event of such damages
or injury be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions of paragraph 8.

 

8.9           Failure to Provide Insurance. Lessee acknowledges that any failure
on its part to obtain or maintain the insurance required herein will be a
Default by Lessee. expose-Lessor to risks and potentially cause Lessor to incur
costs not contemplated-by this Lease,-the-extent of which will be extremely
difficult to –ascertain. Accordingly for any month or portion thereof that
Lessee does-not maintain the required insurance and/or does not provide Lessor
with the required binders or certificates evidencing the existence of the
required insurance, the Base Rent shall be automatically increased, without any
requirement for notice to Lessee, by-an amount equal to 10% of the then existing
Base Rent or $100, whichever is greater. The-parties agree that such increase in
Base Rent represents fair and reasonable compensation for the additional
risk/costs that Lesser will incur by reason of Lessee’s failure to maintain the
required insurance Such increase in Base Rent shall in no event constitute a
waiver of Lessee’s Default or Breach with respect to the failure to maintain
such insurance, prevent the exercise of any of the other rights and-remedies
granted hereunder nor relieve Lessee of its obligation to maintain the insurance
specified in-this Lease.

 

9.          Damage or Destruction.

 

9.1           Definitions.

 

(a) “Premises Partial Damage” shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in 6 months or less from the
date of the damage or destruction and the cost thereof does not exceed a sum
equal to 6 months’ Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total. Notwithstanding the foregoing, Premises Partial Damage
shall not include damage to windows, doors, and/or other similar items which
Lessee has the responsibility to repair or replace pursuant to the provisions of
Paragraph 7.1.

 

(b) “Premises Total Destruction” shall mean damage or destruction to the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which cannot reasonably be repaired in 6 months or less from the
date of the damage or destruction. Lessor shall notify Lessee in writing within
30 days from the date of the damage or destruction as to whether or not the
damage is Partial or Total.

 

(c) “Insured Loss” shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.

 

(d) “Replacement Cost” shall mean the cost to repair or rebuild the improvements
owned by Lessor at the time of the occurrence to their condition existing
immediately prior thereto, including demolition, debris removal and upgrading
required by the operation of Applicable Requirements, and without deduction for
depreciation.

 

(e) “Hazardous Substance Condition” shall mean the occurrence or discovery of a
condition involving the presence of, or a contamination by, a Hazardous
Substance, in, on, or under the Premises which requires remediation.

 

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9.2         Partial Damage - Insured Loss. If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such
damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility
installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make any
applicable insurance proceeds available to Lessee on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds (except as to
the deductible which is Lessee’s responsibility) as and when required to
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.

 

9.3         Partial Damage - Uninsured Loss. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee’s expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Lessee within
30 days after receipt by Lessor of knowledge of the occurrence of such damage.
Such termination shall be effective 60 days following the date of such notice.
In the event Lessor elects to terminate this Lease, Lessee shall have the right
within 10 days after receipt of the termination notice to give written notice to
Lessor of Lessee’s commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible after the required
funds are available. If Lessee does not make the required commitment, this Lease
shall terminate as of the date specified in the termination notice.

 

9.4         Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate 60 days following
such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.

 

9.5         Damage Near End of Term. If at any time during the last 6 months of
this Lease there is damage for which the cost to repair exceeds one month’s Base
Rent, whether or not an insured Loss, Lessor may terminate this Lease effective
60 days following the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of occurrence of such
damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable
option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with
any shortage in insurance proceeds (or adequate assurance thereof) needed to
make the repairs on or before the earlier of (i) the date which is 10 days after
Lessee’s receipt of Lessor’s written notice purporting to terminate this Lease,
or (ii) the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor’s commercially reasonable expense, repair such damage as soon
as reasonably possible and this Lease shall continue in full force and effect.
If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee’s option shall be extinguished.

 

9.6         Abatement of Rent; Lessee’s Remedies.

 

(a)          Abatement. In the event of Premises Partial Damage or Premises
Total Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee’s use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

 

(b)          Remedies. If Lessor is obligated to repair or restore the Premises
and does not commence, in a substantial and meaningful way, such repair or
restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee’s election to terminate this Lease on a date not less than 60 days
following the giving of such notice. If Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. “Commence” shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

  

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9.7           Termination; Advance Payments. Upon termination of this Lease
pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be
made concerning advance Base Rent and any other advance payments made by Lessee
to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s
Security Deposit as has not been, or is not then required to be, used by Lessor.

 

10.        Real Property Taxes.

 

10.1         Definition. As used herein, the term “Real Property Taxes” shall
include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Lessor in the Premises or the
Project, Lessor’s right to other income therefrom, and/or Lessor’s business of
leasing, by any authority having the direct or indirect power to tax and where
the funds are generated with reference to the Building address and where the
proceeds so generated are to be applied by the city, county or other local
taxing authority of a jurisdiction within which the Premises are located. Real
Property Taxes shall also include any tax, fee, levy, assessment or charge, or
any increase therein: (i) imposed by reason of events occurring during the term
of this Lease, including but not limited to, a change in the ownership of the
Premises, and (ii) levied or assessed on machinery or equipment provided by
Lessor to Lessee pursuant to this Lease.

 

10.2         Payment of Taxes. In addition to Base Rent, Lessee shall pay to
Lessor an amount equal to the Real Property Tax installment due at least 20 days
prior to the applicable delinquency date. If any such installment shall cover
any period of time prior to or after the expiration or termination of this
Lease, Lessee’s share of such installment shall be prorated. In the event Lessee
incurs a late charge on any Rent payment, Lessor may estimate the current Real
Property Taxes, and require that such taxes be paid in advance to Lessor by
Lessee monthly in advance with the payment of the Base Rent. Such monthly
payments shall be an amount equal to the amount of the estimated installment of
taxes divided by the number of months remaining before the month in which said
installment becomes delinquent. When the actual amount of the applicable tax
bill is known, the amount of such equal monthly advance payments shall be
adjusted as required to provide the funds needed to pay the applicable taxes. If
the amount collected by Lessor is insufficient to pay such Real Property Taxes
when due, Lessee shall pay Lessor, upon demand, such additional sum as is
necessary. Advance payments may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance
of its obligations under this Lease, then any such advance payments may be
treated by Lessor as an additional Security Deposit.

 

10.3         Joint Assessment. If the Premises are not separately assessed,
Lessee’s liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor’s work sheets or such other information as
may be reasonably available.

 

10.4         Personal Property Taxes. Lessee shall pay, prior to delinquency,
all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause its Lessee Owned Alterations and
Utility Installations, Trade Fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property
within 10 days after receipt of a written statement setting forth the taxes
applicable to Lessee’s property.

 

11.         Utilities and Services. Lessee shall pay for all water, gas, heat,
light, power, telephone, trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon. If any such services
are not separately metered or billed to Lessee, Lessee shall pay a reasonable
proportion, to be determined by Lessor, of all charges jointly metered or
billed. There shall be no abatement of rent and Lessor shall not be liable in
any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor’s reasonable control or
in cooperation with governmental request or directions.

 

12.         Assignment and Subletting.

 

12.1         Lessor’s Consent Required.

 

(a)  Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, “assign or assignment”) or sublet all or any
part of Lessee’s interest in this Lease or in the Premises without Lessor’s
prior written consent.

 

(b)  Unless Lessee is a corporation and its stock is publicly traded on a
national stock exchange, a change in the control of Lessee shall constitute an
assignment requiring consent. The transfer, on a cumulative basis, of 25% or
more of the voting control of Lessee shall constitute a change in control for
this purpose.

 

(c)  The involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee’s assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which Lessor has
consented, or as it exists immediately prior to said transaction or transactions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent. “Net Worth of
Lessee” shall mean the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles.

 

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(d)  An assignment or subletting without consent shall, at Lessor’s option, be a
Default curable after notice per Paragraph 13.1 (c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase
the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any option
to purchase the Premises held by Lessee shall be subject to similar adjustment
to 110% of the price previously in effect, and (ii) all fixed and non-fixed
rental adjustments scheduled during the remainder of the Lease term shall be
increased to 110% of the scheduled adjusted rent.

 

(e) Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited
to compensatory damages and/or injunctive relief.

 

f) Lessor may reasonably withhold consent to a proposed assignment or subletting
if Lessee is in Default at the time consent is requested.

 

(g) Notwithstanding the foregoing, allowing a de minimis portion of the
Premises, ie. 20 square feet or less, to be used by a third party vendor in
connection with the installation of a vending machine or payphone shall not
constitute a subletting.

 

12.2       Terms and Conditions Applicable to Assignment and Subletting.

 

(a) Regardless of Lessor’s consent, no assignment or subletting shall: (i) be
effective without the express written assumption by such assignee or sublessee
of the obligations of Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primary liability of Lessee for the
payment of Rent or for the performance of any other obligations to be performed
by Lessee.

 

(b) Lessor may accept Rent or performance of Lessee’s obligations from any
person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor’s right to exercise its remedies for Lessee’s Default or Breach.

 

(c) Lessor’s consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.

 

(d) In the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone else responsible for the performance of
Lessee’s obligations under this Lease, including any assignee or sublessee,
without first exhausting Lessor’s remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor.

 

(e) Each request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor’s determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $500 as
consideration for Lessor’s considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested. (See also Paragraph 36)

 

(f)  Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment, entering into such sublease, or entering into
possession of the Premises or any portion thereof, be deemed to have assumed and
agreed to conform and comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to or
inconsistent with provisions of an assignment or sublease to which Lessor has
specifically consented to in writing.

 

(g) Lessor’s consent to any assignment or subletting shall not transfer to the
assignee or sublessee any Option granted to the original Lessee by this Lease
unless such transfer is specifically consented to by Lessor in writing. (See
Paragraph 39.2)

 

12.3         Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

 

(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in
all Rent payable on any sublease, and Lessor may collect such Rent and apply
same toward Lessee’s obligations under this Lease; provided, however, that until
a Breach shall occur in the performance of Lessee’s obligations, Lessee may
collect said Rent. In the event that the amount collected by Lessor exceeds
Lessee’s then outstanding obligations any such excess shall be refunded to
Lessee. Lessor shall not, by reason of the foregoing or any assignment of such
sublease, nor by reason of the collection of Rent, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee’s
obligations to such sublessee. Lessee hereby irrevocably authorizes and directs
any such sublessee, upon receipt of a written notice from Lessor stating that a
Breach exists in the performance of Lessee’s obligations under this Lease, to
pay to Lessor all Rent due and to become due under the sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents to Lessor without
any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

 

(b) In the event of a Breach by Lessee, Lessor may, at its option, require
sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.

 

(c) Any matter requiring the consent of the sublessor under a sublease shall
also require the consent of Lessor.

 

(d) No sublessee shall further assign or sublet all or any part of the Premises
without Lessor’s prior written consent.

  

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(e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to
the sublessee, who shall have the right to cure the Default of Lessee within the
grace period, if any, specified in such notice. The sublessee shall have a right
of reimbursement and offset from and against Lessee for any such Defaults cured
by the sublessee.

 

13.         Default; Breach; Remedies.

 

13.1         Default; Breach. A “Default” is defined as a failure by the Lessee
to comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A “Breach” is defined as the occurrence of one or
more of the following Defaults, and the failure of Lessee to cure such Default
within any applicable grace period:

 

(a) The abandonment of the Premises; or the vacating of the Premises without
providing a commercially reasonable level of security, or where the coverage of
the property insurance described in Paragraph 8.3 is jeopardized as a result
thereof, or without providing reasonable assurances to minimize potential
vandalism.

 

(b) The failure of Lessee to make any payment of Rent or any Security Deposit
required to be made by Lessee hereunder, whether to Lessor or to a third party,
when due, to provide reasonable evidence of insurance or surety bond, or to
fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT
OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

 

(c) The failure of Lessee to allow Lessor and/or its agents access to the
Premises or the commission of waste, act or acts constituting public or private
nuisance, and/or an illegal activity on the Premises by Lessee, where such
actions continue for a period of 3 business days following written notice to
Lessee.

 

(d) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate or financial statements, (v) a requested subordination, (vi)
evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 42, (viii) material safety data sheets (MSDS), or (ix) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease, where any such failure continues for a period of 10
days following written notice to Lessee.

 

(e) A Default by Lessee as to the terms, covenants, conditions or provisions of
this Lease, or of the rules adopted under Paragraph 40 thereof, other than those
described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default
continues for a period of 30 10 days after written notice; provided , however ,
that if the nature of Lessee’s Default is such that more than 30 days are
reasonably required for its cure, then it shall not be deemed to be a Breach if
Lessee commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.

 

(f) The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor”
as defined in 11 U.S.C. §101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within 30
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where such seizure is not discharged within 30 days;
provided, however, in the event that any provision of this subparagraph is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.

 

(g) The discovery that any financial statement of Lessee or of any Guarantor
given to Lessor was materially false.

 

(h) If the performance of Lessee’s obligations under this Lease is guaranteed:
(i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory basis, and Lessee’s
failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled with the then
existing resources of Lessee, equals or exceeds the combined financial resources
of Lessee and the Guarantors that existed at the time of execution of this
Lease.

 

13.2         Remedies. If Lessee fails to perform any of its affirmative duties
or obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee’s behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and
expenses incurred by Lessor in such performance upon receipt of an invoice
therefor. In the event of a Breach, Lessor may, with or without further notice
or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:

 

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(a) Terminate Lessee’s right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Lessee shall immediately surrender
possession to Lessor. In such event Lessor shall be entitled to recover from
Lessee: (i) the unpaid Rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys’ fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of award
plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s
Breach of this Lease shall not waive Lessor’s right to recover damages under
Paragraph 12. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may
reserve the right to recover all or any part thereof in a separate suit. If a
notice and grace period required under Paragraph 13.1 was not previously given,
a notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph
13.1. In such case, the applicable grace period required by Paragraph 13.1 and
the unlawful detainer statute shall run concurrently, and the failure of Lessee
to cure the Default within the greater of the two such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
to the remedies provided for in this Lease and/or by said statute.

 

(b) Continue the Lease and Lessee’s right to possession and recover the Rent as
it becomes due, in which event Lessee may sublet or assign, subject only to
reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor’s interests, shall not
constitute a termination of the Lessee’s right to possession.

 

(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or the termination of Lessee’s right to
possession shall not relieve Lessee from liability under any indemnity
provisions of this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee’s occupancy of the Premises.

 

13.3         Inducement Recapture. Any agreement for free or abated rent or
other charges, or for the giving or paying by Lessor to or for Lessee of any
cash or other bonus, inducement or consideration for Lessee’s entering into this
Lease, all of which concessions are hereinafter referred to as “Inducement
Provisions,” shall be deemed conditioned upon Lessee’s full and faithful
performance of all of the terms, covenants and conditions of this Lease. Upon
Breach of this Lease by Lessee, any such Inducement Provision shall
automatically be deemed deleted from this Lease and of no further force or
effect, and any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an inducement Provision
shall be immediately due and payable by Lessee to Lessor, notwithstanding any
subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or
the cure of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless
specifically so stated in writing by Lessor at the time of such acceptance.

 

13.4         Late Charges. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall immediately pay
to Lessor a one-time late charge equal to 10% of each such overdue amount or
$100, whichever is greater. The Parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of such late payment. Acceptance of such late charge by Lessor shall in
no event constitute a waiver of Lessee’s Default or Breach with respect to such
overdue amount, nor prevent the exercise of any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder, whether
or not collected, for 3 consecutive installments of Base Rent, then
notwithstanding any provision of this Lease to the contrary, Base Rent shall, at
Lessor’s option, become due and payable quarterly in advance.

 

13.5         Interest. Any monetary payment due Lessor hereunder, other than
late charges, not received by Lessor, when due as to scheduled payments (such as
Base Rent) or within 30 days following the date on which it was due for
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the 31st day after it was due as to non-scheduled
payments. The interest (“Interest”) charged shall be computed at the rate of 10%
per annum but shall not exceed the maximum rate allowed by law. Interest is
payable in addition to the potential late charge provided for in Paragraph 13.4.

 

13.6       Breach by Lessor.

 

(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless
Lessor falls within a reasonable time to perform an obligation required to be
performed by Lessor. For purposes of this Paragraph, a reasonable time shall in
no event be less than 30 days after receipt by Lessor, and any Lender whose name
and address shall have been furnished Lessee in writing for such purpose, of
written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor’s obligation is such
that more than 30 days are reasonably required for its performance, then Lessor
shall not be in breach if performance is commenced within such 30 day period and
thereafter diligently pursued to completion.

 

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(b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor
nor Lender cures said breach within 30 days after receipt of said notice, or if
having commenced said cure they do not diligently pursue it to completion, then
Lessee may elect to cure said breach at Lessee’s expense and offset from Rent
the actual and reasonable cost to perform such cure, provided, however, that
such offset shall not exceed an amount equal to the greater of one month’s Base
Rent or the Socurily-Doposit, reserving Lessee’s right to seek reimbursement
from Lessor for any such expense in excess of such offset. Lessee shall document
the cost of said cure and supply said documentation to Lessor.

 

14.         Condemnation. If the Premises or any portion thereof are taken under
the power of eminent domain or sold under the threat of the exercise of said
power (collectively “Condemnation”), this Lease shall terminate as to the part
taken as of the date the condemning authority takes title or possession,
whichever first occurs. If more than 10% of the Building, or more than 25% of
that portion of the Premises not occupied by any building, is taken by
Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within
10 days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within 10 days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in value
of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation paid by the
condemnor for Lessee’s relocation expenses, loss of business goodwill and/or
Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only,
shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease
is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation.

 

15.         Brokerage-Fees.

 

             15.1     Additional Commission. If a separate brokerage fee
agreement is attached then in addition to the payments owed pursuant to
Paragraph 1.9 above, and unless Lesser and the Brokers otherwise agree in
writing, Lesser agrees that: (a) if Lessee exercises any Option, (b) if Lessee
or anyone affiliated with Lessee acquires any rights to the Premises or other
premises owned by Lesser and located within the same Project, if any, within
which the Premises is located, (c) if Lessee remains in possession of the
Premises, with the consent of Lesser, after the expiration of this Lease, or (d)
if Base Rent is increased, whether by agreement or operation of an escalation
clause herein, then, Lessor shall pay Brokers a fee in accordance with the
schedule attached to such brokerage fee agreement.

 

            15.2     Assumption of Obligations. Any buyer or transferee of
Lesser’s interest in this Lease shall be deemed to have assumed Lessor’s
obligation hereunder. Brokers shall be third party beneficiaries of the
provisions of Paragraphs 1.9, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and for brokerage fees pertaining to this Lease when due,
then such amounts shall accrue interest. In addition, if Lessor fails to pay any
amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to
Lessor and Lessee of such failure and if Lessor fails to pay such amounts within
10 days after said notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a
third party beneficiary of any commission agreement entered into by and/or
between Lessor and Lesser’s Broker for the limited purpose of collecting any
brokerage fee owed.

 

              15.3         Representations and Indemnities of Broker
Relationships. Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person, firm, broker or finder (other than the
Brokers, If any) in connection with this Lease, and that no one other than said
named Brokers is entitled to any commission or finder’s fee in connection
herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend
and hold the other harmless from and against liability for compensation or
charges which may be claimed by any such unnamed broker, finder or other similar
party by reason of any dealings or actions of the indemnifying Party, including
any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.

 

16.         Estoppel Certificates.

 

(a) Each Party (as “Responding Party”) shall within 10 days after written notice
from the other Party (the “Requesting Party”) execute, acknowledge and deliver
to the Requesting Party a statement in writing in form similar to the then most
current “Estoppel Certificate” form published by the AIR Commercial Real Estate
Association, plus such additional information, confirmation and/or statements as
may be reasonably requested by the Requesting Party.

 

(b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party’s performance, and (iii)
if Lessor is the Requesting Party, not more than one month’s rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party’s Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.

 

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(c) If Lessor desires to finance, refinance, or sell the Premises, or any part
thereof, Lessee and all Guarantors shall within 10 days after written notice
from Lessor deliver to any potential lender or purchaser designated by Lessor
such financial statements as may be reasonably required by such lender or
purchaser, including but not limited to Lessee’s financial statements for the
past 3 years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

 

17.         Definition of Lessor. The term “Lessor” as used herein shall mean
the owner or owners at the time in question of the fee title to the Premises,
or, if this is a sublease, of the Lessee’s interest in the prior lease. In the
event of a transfer of Lessor’s title or interest in the Premises or this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor. Upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.

 

18.         Severability. The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

 

19.         Days. Unless otherwise specifically indicated to the contrary, the
word “days” as used in this Lease shall mean and refer to calendar days.

 

20.         Limitation on Liability. The obligations of Lessor under this Lease
shall not constitute personal obligations of Lessor or its partners, members,
directors, officers or shareholders, and Lessee shall look to the Premises, and
to no other assets of Lessor, for the satisfaction of any liability of Lessor
with respect to this Lease, and shall not seek recourse against Lessor’s
partners, members, directors, officers or shareholders, or any of their personal
assets for such satisfaction.

 

21.         Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the Parties under
this Lease.

 

22.         No Prior or Other Agreements; Broker Disclaimer. This Lease contains
all agreements between the Parties with respect to any matter mentioned herein,
and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers that it
has made, and is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other Party to this Lease
and as to the use, nature, quality and character of the Premises. Brokers have
no responsibility with respect thereto or with respect to any default or breach
hereof by either Party.

 

23.         Notices.

 

23.1         Notice Requirements. All notices required or permitted by this
Lease or applicable law shall be in writing and may be delivered in person (by
hand or by courier) or may be sent by regular, certified or registered mail or
U.S. Postal Service Express Mail, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a Party’s
signature on this Lease shall be that Party’s address for delivery or mailing of
notices. Either Party may by written notice to the other specify a different
address for notice, except that upon Lessee’s taking possession of the Premises,
the Premises shall constitute Lessee’s address for notice. A copy of all notices
to Lessor shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate in writing.

 

23.2         Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given 72 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of receipt
(confirmation report from fax machine is sufficient), provided a copy is also
delivered via delivery or mail. If notice is received on a Saturday, Sunday or
legal holiday, it shall be deemed received on the next business day.

 

24.         Waivers.

 

(a)          No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor’s consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor’s consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent.

 

(b)          The acceptance of Rent by Lessor shall not be a waiver of any
Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on
account of moneys or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of
such payment.

 

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(c)          THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH
REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY
PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH
THIS LEASE.

 

25.         Disclosures Regarding The Nature of a Real Estate Agency
Relationship.

 

                             (a)          When entering into a discussion with a
real estate agent regarding a real estate transaction, a Lessor or Lessee should
from the outset understand what type of agency relationship or representation it
has with the agent or agents in the transaction. Lessor and Lessee acknowledge
being advised by the Brokers in this transaction,-as follows:

 

                                           (i)          Lesser’s Agent. A
Lesser’s agent -under a listing agreement with the Lessor acts as the agent for
the Lessor only. A Lesser’s agent or subagent has the following affirmative
obligations: To the Lessor: A fiduciary duty of utmost care, integrity, honesty
and loyalty in dealings with the Lessor. To the Lessor and the Lessor: a.
Diligent exercise of reasonable skills and care in performance of the agent’s
duties. b. A duty of honest and fair dealing and good faith. c. A duty to
disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party which
does not involve the affirmative duties set forth above.

 

                                          (ii)         Lessee’s Agent. An agent
can agree to act as agent for the Lessee only. In these situations, the agent is
not the Lessor’s agent, even if by agreement the agent may receive compensation
for service rendered, either in full or in part from the Lessor. An agent acting
only for a Lessee has the following affirmative obligations. To the Lessee: A
fiduciary duty of utmost care. Integrity honesty, and loyalty in dealings with
the Lessee. To the Lessee and the Lesser: a. Diligent exercise of reasonable
skills and care in performance of the agent’s duties. b. A duty of honest and
fair dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential information
obtained from the other Party which does not involve the affirmative duties set
forth above.

 

                                        (iii)        Agent Representing Both
Lesser and Lessee. A real estate agent, either acting directly or through one or
more associate licenses, can legally be the agent of both the Lesser and the
Lesser in a transaction, but only with the knowledge and consent of both the
Lesser and the Lessee. In a dual agency situation, the agent has the following
affirmative obligations to both the Lessor and the Lessee: a. A fiduciary duty
of utmost care, integrity, honesty and loyalty in the dealings with either
Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated
above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the
agent may not without the express permission of the respective Party, disclose
to the other Party that the Lessor will accept rent in an amount less than that
indicated in the listing or that the Lessee is willing to pay a higher rent than
that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own
interests. Lessor and Lessee should carefully road all agreements to assure that
they adequately express their understanding of the transaction. A real estate
agent is a person qualified to advise about real estate. If legal or tax advice
is desired, consult a competent professional.

 

                              (b)          Brokers have no responsibility with
respect to any default or breach hereof by either Party. The Parties agree that
no lawsuit or other legal proceeding involving any breach of duty, error or
omission relating to this Lease may be brought against Broker more than one year
after the Start Date and that the liability (including court costs and
attorney’s fees), of any Broker with respect to any such lawsuit and/or legal
proceeding shall not exceed the fee received by such Broker pursuant to this
Lease; provided, however, that the foregoing limitation on each Broker’s
liability shall not be applicable to any gross negligence or willful misconduct
of such Broker.

 

                             (c)            Lessor and Lessee agree to identify
to Brokers as “Confidential” any Communication or information given Brokers that
is considered by such Party to be confidential.

 

26.         No Right To Holdover. Lessee has no right to retain possession of
the Premises or any part thereof beyond the expiration or termination of this
Lease. In the event that Lessee holds over, then the Base Rent shall be
increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as
consent by Lessor to any holding over by Lessee.

 

27.         Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

 

28.         Covenants and Conditions; Construction of Agreement. All provisions
of this Lease to be observed or performed by Lessee are both covenants and
conditions. In construing this Lease, all headings and titles are for the
convenience of the Parties only and shall not be considered a part of this
Lease. Whenever required by the context, the singular shall include the plural
and vice versa. This Lease shall not be construed as if prepared by one of the
Parties, but rather according to its fair meaning as a whole, as if both Parties
had prepared it.

 

29.         Binding Effect; Choice of Law. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.

 

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30.         Subordination; Attornment; Non-Disturbance.

 

30.1         Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, “Security Device”), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as “Lender”) shall have no liability or obligation to perform any of
the obligations of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of its Security
Device by giving written notice thereof to Lessee, whereupon this Lease and such
Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

 

30.2         Attornment. In the event that Lessor transfers title to the
Premises, or the Premises are acquired by another upon the foreclosure or
termination of a Security Devise to which this Lease is subordinated (i) Lessee
shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to
such new owner, and upon request, enter into a new lease, containing all of the
terms and provisions of this Lease, with such new owner for the remainder of the
term hereof, or, at the election of the new owner, this Lease will automatically
become a new lease between Lessee and such new owner, and (ii) Lessor shall
thereafter be relieved of any further obligations hereunder and such new owner
shall assume all of Lessor’s obligations, except that such new owner shall not:
(a) be liable for any act or omission of any prior lessor or with respect to
events occurring prior to acquisition of ownership; (b) be subject to any
offsets or defenses which Lessee might have against any prior lessor, (c) be
bound by prepayment of more than one month’s rent, or (d) be liable for the
return of any security deposit paid to any prior lessor which was not paid or
credited to such new owner.

 

30.3         Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee’s subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance
Agreement provides that Lessee’s possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within 60 days after the execution of this Lease, Lessor
shall, if requested by Lessee, use its commercially reasonable efforts to obtain
a Non-Disturbance Agreement from the holder of any pre-existing Security Device
which is secured by the Premises. In the event that Lesser is unable to provide
the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.

 

30.4         Self-Executing. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

 

31.         Attorneys’ Fees. If any Party or Broker brings an action or
proceeding involving the Premises whether founded in tort, contract or equity,
or to declare rights hereunder, the Prevailing Party (as hereafter defined) in
any such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys’ fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys’ fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys’ fees reasonably incurred. In addition,
Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach ($200 is a reasonable minimum per
occurrence for such services and consultation).

 

32.         Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s
agents, representatives and designees shall have the right to enter the Premises
at any time, in the case of an emergency, and otherwise at reasonable times
after reasonable prior notice for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs,
improvements or additions to the Premises as Lessor may deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no
material adverse effect to Lessee’s use of the Premises. All such activities
shall be without abatement of rent or liability to Lessee.

 

33.         Auctions. Lessee shall not conduct, nor permit to be conducted, any
auction upon the Premises without Lessor’s prior written consent. Lessor shall
not be obligated to exercise any standard of reasonableness in determining
whether to permit an auction.

 

34.         Signs. Lessor may place on the Premises ordinary “For Sale” signs at
any time and ordinary “For Lease” signs during the last 6 months of the term
hereof. Except for ordinary “for sublease” signs, Lessee shall not place any
sign upon the Premises without Lessor’s prior written consent. All signs must
comply with all Applicable Requirements.

 

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35.         Termination; Merger. Unless specifically stated otherwise in writing
by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor’s election to have such event constitute the
termination of such interest.

 

36.         Consents. Except as otherwise provided herein, wherever in this
Lease the consent of a Party is required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Lessor’s actual
reasonable costs and expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) incurred in the
consideration of, or response to, a request by Lessee for any Lessor consent,
including but not limited to consents to an assignment, a subletting or the
presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt
of an invoice and supporting documentation therefor. Lessor’s consent to any
act, assignment or subletting shall not constitute an acknowledgment that no
Default or Breach by Lessee of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Default or Breach, except as may be
otherwise specifically stated in writing by Lessor at the time of such consent.
The failure to specify herein any particular condition to Lessor’s consent shall
not preclude the imposition by Lessor at the time of consent of such further or
other conditions as are then reasonable with reference to the particular matter
for which consent is being given. In the event that either Party disagrees with
any determination made by the other hereunder and reasonably requests the
reasons for such determination, the determining party shall furnish its reasons
in writing and in reasonable detail within 10 business days following such
request.

 

37.         Guarantor.

 

37.1         Execution. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the AIR Commercial Real Estate Association,
and each such Guarantor shall have the same obligations as Lessee under this
Lease.

 

37.2         Default. It shall constitute a Default of the Lessee if any
Guarantor fails or refuses, upon request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on
Guarantor’s behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c)
an Estoppel Certificate, or (d) written confirmation that the guaranty is still
in effect.

 

38.         Quiet Possession. Subject to payment by Lessee of the Rent and
performance of all of the covenants, conditions and provisions on Lessee’s part
to be observed and performed under this Lease, Lessee shall have quiet
possession and quiet enjoyment of the Premises during the term hereof.

 

39.         Options. If Lessee is granted an Option, as defined below, then the
following provisions shall apply:

 

39.1         Definition. “Option” shall mean: (a) the right to extend or reduce
the term of or renew this Lease or to extend or reduce the term of or renew any
lease that Lessee has on other property of Lessor; (b) the right of first
refusal or first offer to lease either the Premises or other property of Lessor;
(c) the right to purchase, the right of first offer to purchase or the right of
first refusal to purchase the Premises or other property of Lessor.

 

39.2         Options Personal To Original Lessee. Any Option granted to Lessee
in this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if requested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.

 

39.3         Multiple Options. In the event that Lessee has any multiple Options
to extend or renew this Lease, a later Option cannot be exercised unless the
prior Options have been validly exercised.

 

39.4         Effect of Default on Options.

 

(a) Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Lessee), (iii) during the time Lessee
is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or
more notices of separate Default under this Lease, whether or not the Defaults
are cured, during the 12 month period immediately preceding the exercise of the
Option.

 

(b) The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee’s inability to exercise an Option
because of the provisions of Paragraph 39.4(a).

 

(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee’s due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the
purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.

 

40.         Multiple Buildings. If the Premises are a part of a group of
buildings controlled by Lessor, Lessee agrees that it will abide by and conform
to all reasonable rules and regulations which Lessor may make from time to time
for the management, safety, and care of said properties, including the care and
cleanliness of the grounds and including the parking, loading and unloading of
vehicles, and to cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessee also agrees to pay its
fair share of common expenses incurred in connection with such rules and
regulations.

 

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41.         Security Measures. Lessee hereby acknowledges that the Rent payable
to Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.

 

42.         Reservations. Lessor reserves lo itself the right, from time to
time, to grant, without the consent or joinder of Lessee, such easements, rights
and dedications that Lessor deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights, dedications,
maps and restrictions do not unreasonably interfere with the use of the Premises
by Lessee (collectively, the "Restrictions"). This Lease shall be subject to all
Restrictions, now or hereafter recorded against the Project. Lessee agrees to
sign any documents reasonably requested by Lessor to effectuate any such
easement rights, dedication, map or restrictions,

 

43.         Performance Under Protest. If at any time a dispute shall arise as
to any amount or sum of money to be paid by one Party to the other under the
provisions hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such sum. If it
shall be adjudged that there was no legal obligation on the part of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover
such sum or so much thereof as it was not legally required to pay. A Party who
does not initiate suit for the recovery of sums paid "under protest" with 6
months shall be deemed to have waived its right to protest such payment.

 

44.         Authority; Multiple Parties; Execution.

 

(a)          If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each Party shall, within 30
days after request, deliver to the other Party satisfactory evidence of such
authority.

 

(b)          If this Lease is executed by more than one person or entity as
"Lessee", each such person or entity shall be jointly and severally liable
hereunder. It is agreed that any one of the named Lessees shall be empowered to
execute any amendment to this Lease, or other document ancillary thereto and
bind all of the named Lessees, and Lessor may rely on the same as if all of the
named Lessees had executed such document.

 

(c)          This Lease may be executed by the Parties in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

 

45.         Conflict. Any conflict between the printed provisions of this Lease
and typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.

 

46.         Offer. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.

 

47.         Amendments. This Lease may be modified only in writing, signed by
the Parties in interest at the time of the modification. As long as they do not
materially change Lessee’s obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.

 

48.         Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR
ARISING OUT OF THIS AGREEMENT.

 

49.         Arbitration of Disputes. An Addendum requiring the Arbitration of
all disputes between the Parties and/or Brokers arising out of this Lease ¨ is þ
is not attached to this Lease.

 

50.         Americans with Disabilities Act. Since compliance with the Americans
with Disabilities Act (ADA) is dependent upon Lessee's specific use of the
Premises, Lessor makes no warranty or representation as to whether or not the
Premises comply with ADA or any similar legislation. In the event that Lessee's
use of the Premises requires modifications or additions to the Premises in order
to be in ADA compliance, Lessee agrees to make any such necessary modifications
and/or additions at Lessee's expense.

 

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

 

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL
REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

 

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

 

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,

 

__________
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INITIALS [ex10-31footerb.jpg]     ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

 

PAGE 21 OF 23

 

 

THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.

 

WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.

 

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

 

Executed at:  Executed at:  

      On:  On:            

 

By LESSOR:   By LESSEE: COLL OH RE HOLDINGS, LLC, a Delaware limited   Y City
Recycling LLC, an Ohio limited liability company   liability company

 

By: /s/ LEONARD TANNENBAUM   By: Brain Coll Name Printed: LEONARD TANNENBAUM  
Name Printed: Brain Coll Title: CHIEF EXECUTIVE OFFICER   Title: President / CEO
By:     By:   Name Printed:     Name Printed:   Title:     Title:   Address: c/o
Fifth Street Finance Corp.   Address: 40Q5 All American Way 10 Bank Street, 12th
Floor Whiteplains, NY     ZANES VILLE OH 43701 10606 Attn:  Executive Vice
President   Telephone: (740)-452-2500 Telephone: (__)   Facsimile: (___)
Facsimile: (914) 328–4214   Email: brain.coll@ycityrecycling.com Email:    
Email:   Email:     Federal ID No.   Federal ID No.        

 

BROKER::   BROKER             Attn:   Attn: Title:   Title: Address:   Address:
Telephone:(      )   Telephone:(       ) Facsimile:(      )    
Facsimile:(      ) Email:   Email: Federal ID No. -   Federal lD-No.
Broker/Agent-DRE License #:   Broker/Agent DRE-License #:            

 

__________
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INITIALS [ex10-31footerb.jpg]     ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

 

PAGE 22 OF 23

 

 

STATE OF New York )       )   County of Westchester )  

 

The foregoing Instrument was acknowledged before me this 17th day of June, 2013,
by Leonard Tannenbaurn, the CEO of Coll OH RE Holdings LLC, a Delaware limited
liability company, on behalf of the company.

  

[ex10-31pg31a.jpg]     Danielle Presta     Notary Public                 January
4, 2014     Commission Expires:

  

STATE OF Ohio )       )   County of Muskingum  )  

 

The foregoing Instrument was acknowledged before me this 15th day of May, 2013,
by Brain Coll, the President/CEO of Y City Recycling LLC, an Ohio limited
liability company, on behalf of the company. 

 [ex10-31pg31b.jpg]                                 RHONDA MCGEE        NOTARY
PUBLIC   /s/ Rhonda Mcgee  STATE OF OHIO   Notary Public    Comm. Expires      
October 31,2016   10/31/14     Commission Expires:                        

NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form; AIR Commercial Real Estate Association, 800 W 6th Street, Suite
800, Los Angeles, CA 90017. Telephone No. (213) 687-8777. Fax No.: (213)
687-8616.

 

© Copyright 2001 - By AIR Commercial Real Estate Association. All rights
reserved.

No part of these works may be reproduced in any form without permission in
writing.

 

__________
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INITIALS [ex10-31footerb.jpg]     ©2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STN-13-3/10E

 

PAGE 23 OF 23

 

  

ADDENDUM TO LEASE

 

THIS ADDENDUM TO LEASE (“Addendum”) is attached to and made a part of that
certain AIR Standard Industrial Commercial Single-Lessee Lease – Net dated for
reference purposes as of May 1, 2013 (“Standard Lease”) by and between COLL OH
RE HOLDINGS LLC, a Delaware limited liability company (“Lessor”), and Y CITY
RECYCLING LLC, an Ohio limited liability company (“Lessee”). Any capitalized
terms contained herein which are not defined shall have the meanings ascribed to
them in the Standard Lease. The term “Lease” as used in the Lease and in this
Addendum shall be deemed to refer to the Standard Lease, as modified and
supplemented by this Addendum, The terms, covenants and conditions set forth
herein are intended to and shall have the same force and effect as if set forth
at length in the body of the Standard Lease. To the extent that the provisions
of this Addendum are inconsistent with any provisions of the Standard Lease, the
provisions of this Addendum shall supersede and control. Where applicable,
paragraph numbering below refers to the provision of the Lease being amended or
supplemented by the applicable provision,

 

1.5          Rent Adjustment. Commencing on the first day of the second (2nd)
Lease Year (as defined below), and on an annual basis thereafter during the Term
(each hereinafter referred to as a “Adjustment Date”), the Base Rent shall be
increased each Lease Year by the Annual Minimum Rent Adjustment (as defined
below).

 

On each Adjustment Date, the Base Rent shall be increased, by the greater of:
(a) the percentage increase, if any, in the Consumer Price Index, All Urban
Consumers (CPI-U) (Cleveland-Akron, Ohio region) “All Items”; Reference Base
Year 1982-1984 = 100, as published by the United States Department of Labor,
Bureau of Labor Statistics or its successor (the “Index”), such percentage
increase, if any, being measured by comparing the Index for the second month
preceding each Adjustment Date with the Index for the second month preceding the
last Adjustment Date, or (b) three percent (3%) (the greater of (a) or (b) being
referenced herein as the “Annual Minimum Rent Adjustment”), If the Index ceases
to be published, is published less frequently or is altered in any material
respect, then Lessor shall adopt, at its sole discretion, a substitute index or
substitute procedure which reasonably reflects and monitors changes in consumer
prices. Lessor shall calculate and give Lessee notice of such increase in the
monthly Base Rent on or near each Adjustment Date, and Lessee shall commence to
pay the increased monthly Base Rent effective on the applicable Adjustment Date.

 

As used in this Paragraph 1.5, the term “Lease Year” shall mean each consecutive
twelve-month period beginning with the Commencement Date, except that if the
Commencement Date is not the first day of a calendar month, then the first Lease
Year shall be the period from the Commencement Date through the final day of the
twelve months after the first day of the following month, and each subsequent
Lease Year shall be the twelve months following the prior Lease Year.

 

 

 

 

2.2          Condition of Premises; Compliance. Notwithstanding anything in the
Standard Lease to the contrary, including without limitation Paragraphs 2.2 or
2.3 of the Standard Lease, Lessee expressly acknowledges that neither Lessor nor
its agents, employees, or representatives have made any representations or
warranties as to the suitability of the Premises for the Lessee’s intended use.
It shall be the sole responsibility of Lessee to (i) verify all governmental
requirements applicable to Lessee’s use of the Premises, including without
limitation zoning, and (ii) capacity of all mechanical systems and improvements
within the Premises to satisfy Lessee’s intended use. Notwithstanding any
provision in the Lease to the contrary, any representation or warranty of Lessor
which is contained in the Lease shall be made to Lessor’s actual knowledge
without any investigation or duty to investigate. Lessee acknowledges that
Lessee has been in continual occupancy of the Premises pursuant to a lease prior
to the Commencement Date and, accordingly, Lessee is thoroughly familiar with
the operations at and condition of the Premises. Not by way of limitation of the
foregoing, upon the Commencement Date, Lessee will have inspected and
investigated the Premises and has accepted the Premises in their existing
condition “AS-IS”, “WITH ALL FAULTS”. Lessee acknowledges that neither Lessor
nor its agents have made any representations or warranties as to the condition
of the Premises, Building or Project.

 

5.           Security Deposit. Upon Lessee’s full and complete performance of
its material obligations under this Lease for the first year of the Original
Term, the Security Deposit shall be reduced to an amount equal to two (2)
months’ Base Rent and any excess amount then held by Lessor shall be returned to
Lessee upon Lessee’s written request.

 

6.2         Hazardous Substances. As used in the Lease, “Hazardous Substances”
shall include, in addition to the items set forth in Paragraph 6.2(a) of the
Standard Lease, any substance that is at any pertinent time defined or listed
in, or otherwise classified, designated, or regulated pursuant to, any
“Environmental Law” (as defined below) as a hazardous substance, hazardous
material, extremely hazardous substance, hazardous waste, hazardous chemical,
infectious waste, toxic substance, toxic pollutant or solid waste, or any other
legislative or regulatory formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity or EP
toxicity, including, without limitation, friable asbestos, mold (including,
without limitation, fungi, fungal spores, fragments, metabolites, mycotoxins and
volatile organic compounds), lead and polychlorinated biphenyls and also
including oil and petroleum, petroleum products, by-products and wastes, and
by-products associated with the extraction, refining, or use of petroleum or
petroleum products, whether or not so defined, listed, classified, designated or
regulated pursuant to Environmental Laws. The term “Environmental Law”) means
any statute, law, act, ordinance, rule, regulation, order, decree, or ruling of
any federal, state and/or local governmental, quasi-govemmental, administrative
or judicial body, agency, board, commission or other authority relating to the
protection of health and/or the environment or otherwise regulating and/or
restricting the use, storage, disposal, treatment, handling, release, and/or
transportation of Hazardous Substances, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Federal Water Pollution Control Act,
the Clean Air Act, the Clean Water Act, the Hazardous Materials Transportation
Act, the Toxic Substances Control Act, and the Emergency Planning and Community
Right To Know Act, each as now existing or hereafter amended, and all
regulations and interpretive guidelines and publications respectively
promulgated thereunder. Without limiting any provision of the Standard Lease,
upon written request from Lessor from time to time, Lessee shall provide Lessor
a list of any Hazardous Substances that will be present at the Premises and
copies of any Material Safety Data Sheets associated therewith; provided that
the foregoing shall not be construed as Lessor’s approval or acquiescence to the
presence of such materials. Lessee shall update said list at Lessor’s written
request if any changes have occurred in the types or amounts of such Hazardous
Substances since Lessor’s most recent prior request.

 

-2-

 

 

7.1(a)    Lessee’s Repair and Maintenance Obligations. All repairs and
maintenance of the Premises by Lessee as required under the Lease shall be
performed in a first class manner by contractors and other personnel reasonably
approved by Lessor and shall be performed in accordance with a repair and
maintenance plan reasonably approved by Lessor.

 

7.2        Lessor’s Obligations. Paragraph 7.2 of the Standard Lease is hereby
clarified to additionally make reference to Lessor’s obligations under Paragraph
7.1(d) of the Standard Lease.

 

9.8         Damage and Destruction. If such destruction or damage is caused by
the negligent or willful misconduct of Lessee, its employees, agents,
contractors or invitees, then for an Insured Loss, Lessee shall pay any
deductible amount applicable thereto, and for a loss that is not an Insured
Loss, Lessee shall make all repairs and replacements required at Lessee’s sole
cost and expense, subject to plans and specifications approved by Lessor.

 

12.4      Assignment and Subletting. Lessee agrees that Lessor may withhold its
consent to any assignment or subletting if the proposed assignee’s or
subtenant’s general financial condition, including, liquidity and net worth, as
disclosed on financial statements prepared in conformity with generally accepted
accounting principles are not in conformance with Lessor’s then current leasing
criteria for the Project or comparable or better to Lessee’s financial condition
as of the date of this Lease. Lessee hereby agrees to pay to Lessor all profits
from the transfer determined by deducting from the total consideration paid
directly or indirectly to or for the benefit of Lessee or its designee for the
transferred interest, the reasonable and actual costs incurred by Lessee in
connection with the assignment or subletting (to the extent such costs are
substantiating with reasonable written evidence thereof and provided to Lessor)
and subtracting the remaining rent obligation of Lessee at such time under this
Lease. For purposes of determining all profits from the transfer, substance
shall control over form such that Lessor may ignore any attempt by Lessee to
inflate the purchase price of any other assets transferred in an attempt to
conceal the profit on the transfer of the Lessee’s interest in this Lease. Sums
payable hereunder shall be paid to Lessor as and when paid by the transferee to
Lessee. Lessee understands, acknowledges and agrees that Lessor’s right to
recapture any consideration paid in connection with an approved assignment or
subletting is a material inducement for Lessor’s agreement to lease the Premises
to Lessee upon the terms and conditions set forth herein.

 

13.1      Texas Property Default. Coll Financial Holdings, LLC, as lessor (the
“Texas Lease Landlord”), and Coll Materials Group, LLC, as lessee (the “Texas
Lease Tenant”), are parties to that certain unwritten lease (the “Texas Lease”)
for that certain property located at 501 Old Hewitt Road, Waco, Texas 76712 (the
“Texas Property”). Lessee acknowledges that the Texas Lease Landlord and the
Texas Lease Tenant are affiliates of Lessee. The Texas Property is subject to
that certain Deed of Trust dated June 8, 2011 and recorded June 13, 2011 as
cc#2011016863 in the Real Property Records of McLennan County, Texas (the “Deed
of Trust”), which Deed of Trust secures that certain promissory note (the “Texas
Property Loan”) payable to Certainteed Corporation, a Delaware corporation
(including its successors and assigns, the “Texas Lender”). Lessee shall
promptly provide to Lessor any written notices received by the Texas Lease
Landlord or the Texas Lease Tenant (or either of their successors or assigns)
and any written notices sent by the Texas Lease Landlord or the Texas Lease
Tenant (or either of their successors or assigns) that relate in any way to the
Texas Property, the Texas Lease, the Texas Property Loan or any loan documents
(including the Deed of Trust) related to the Texas Property Loan (collectively,
the “Texas Loan Documents”). In the event of any breach or default under the
Texas Lease or any of the Texas Loan Documents by the Texas Lease Landlord or
the Texas Lease Tenant (or either of their successors or assigns), such breach
or default shall be deemed a Breach under this Lease.

 

-3-

 

 

13.2       Remedies Upon Breach of Lease. No act or thing done by Lessor or
Lessor’s Parties during the Term shall be deemed an acceptance of a surrender of
the Premises, and no agreement to accept a surrender shall be valid unless in
writing and signed by Lessor. No employee of Lessor or of Lessor’s Parties 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 this Lease or a surrender of the Premises. The acceptance of any
Rent, or any partial payment thereof, by Lessor shall not be deemed a waiver by
Lessor of (i) any breach by Lessee under this Lease other than the failure of
Lessee to pay the particular Rent so accepted, or (ii) any rights which Lessor
may have arising from any breach by Lessee under this Lease including, without
limitation, the right of Lessor to recover the Premises.

 

13.6       Breach bv Lessor. Lessee shall have no right to terminate this Lease
on account of any breach or default by Lessor.

 

14.         Condemnation Not Resulting in Termination.    Notwithstanding
anything in Section 14 of the Lease to the contrary, Lessor’s obligation to
restore the Premises if this Lease is not terminated, shall be limited to the
extent of available condemnation proceeds. Lessor will not be required to repair
or restore any injury or damage to the property of Lessee or any of Lessee’s
improvements to the Premises.

 

26.         Holding Over.    If Lessee fails to surrender the Premises upon the
expiration or earlier termination of the Term without the express written
consent of Lessor, Lessee shall become a Lessee-at-sufferance and in addition to
the provisions of Paragraph 26 of the Standard Lease, Lessee shall remain
responsible for all other monetary obligations due and payable by Lessee under
the Lease. Acceptance by Lessor of rent after such expiration or earlier
termination of the Term shall not result in any renewal of the Term. The
foregoing provisions are in addition to and do not affect Lessor’s right of
re-entry or any other rights or remedies of Lessor hereunder or as otherwise
provided at law or in equity, or both. If Lessee fails to surrender the Premises
upon the expiration or earlier termination of the Term, Lessee shall indemnify
and hold Lessor harmless from and against any and all losses, costs, damages and
liability (including actual attorneys’ fees and costs, and court costs), direct
or indirect, which Lessor may suffer as a result of Lessee’s failure to
surrender the Premises.

 

32.         Lessor’s Right of Access.   Lessor and its authorized agents,
representatives and designees shall have the right of access upon reasonable
notice to Lessee to enter the Premises for the purpose of (i) determining
whether the Premises are in good condition and whether Lessee is complying with
its obligations under the Lease; and (ii) performing or causing to be performed
any obligations under the Lease.

 

-4-

 

 

34.         Signage. If Lessee fails to remove its signs and restore the
Premises as provided in Paragraph 34 of the Standard Lease within ten (10) days
of the expiration or earlier termination of the Lease, then Lessor may perform
such work and all costs and expenses incurred by Lessor in connection therewith
shall constitute additional rent under the Lease and shall be paid by Lessee to
Lessor within ten (10) days of Lessee’s receipt of an invoice therefor.

 

41.         Restrictions. The Lease is subject to, and Lessee shall timely
comply with all terms, conditions, restrictions, and obligations set forth in
any recorded covenants, conditions, or restrictions of record relating to the
Premises (collectively, the “CC&Rs”) to the extent such CC&Rs apply to users or
occupants of the Project. Lessee has reviewed and approved the CC&Rs and agrees
to be bound by all applicable terms and conditions set forth therein. A breach
by Lessee of the CC&Rs shall constitute a breach of the Lease.

 

51.         Nondisparagement. During the term of this Lease and for five (5)
years thereafter, Lessee will refrain from, in any manner, directly or
indirectly, all conduct, oral or otherwise, that disparages or damages or could
disparage or damage the reputation, goodwill, or standing in the community of
Lessor or any of its Affiliates (as defined below). As used herein, “Affiliate”
means a person or entity that directly or indirectly controls, is controlled by,
or is under common control with any such person or entity. The term “control”
(including the terms “controlled by” or “under common control with”) means, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such person or entity, whether
through ownership of voting securities, membership interests, by contract or
otherwise. The term “Affiliate” also includes any employee, officer, director,
member, partner, shareholder, owner, child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive
relationships, of such person or affiliate. Notwithstanding anything in the
Lease to the contrary, in the event Lessee breaches this covenant, Lessor will
have the right to unilaterally terminate this Lease upon three (3) days prior
written notice to Lessee without any further notice and cure period.

 

52.         No Recording of Lease. Notwithstanding anything in the Standard
Lease to the contrary, neither party shall record this Lease or a memorandum
thereof in the Official Records of the Orange County Recorder.

 

53.         Limitation of Lessor Liability. It is expressly understood and
agreed that notwithstanding anything in this Lease to the contrary, Lessee
acknowledges and agrees that all persons dealing with Lessor must look solely to
the interest of the Lessor in the Premises for the enforcement of any claims
against or liability of the Lessor. No present or future employee, trustee,
agent, or member of Lessor shall have any personal liability directly or
indirectly, and recourse shall not be had against any such present or future
employee, trustee, agent, or member of Lessor under or in connection with this
Lease or the Premises. Lessee on its behalf, and on behalf of any and all of its
successors and assigns, hereby waives and releases any and all such personal
liability and recourse.

 

-5-

 

 

54.         Force Majeure. The time for performance by either party of any
obligation under this Lease (other than the payment of Base Rent or any other
rent obligation) shall be extended on a day by day basis to the extent of any
delay resulting from the occurrence of any of the following (collectively) and
“force majeure event”): fire, earthquake, explosion, flood, weather, the
elements, acts of God or the public enemy, strike, other labor trouble,
interference of governmental authorities or agents, or shortages of fuel,
supplies or labor resulting therefrom or any other cause, whether similar or
dissimilar to the above, beyond the reasonable control of the party obligated
for such performance (financial inability excepted). It is specifically
understood and agreed that the failure of Lessee to obtain any permit or
governmental approval for the operation of its business on the Premises shall
not alter, impair or otherwise affect the obligations of Lessee to pay Base Rent
and any other additional rent due under the terms and provisions of this Lease.

 

55.         Execution of Lease: Submission of this Lease for examination or
signature by Lessee does not create a reservation of or option to lease. This
Lease shall become effective and binding only upon full execution of this Lease
by both Lessor and Lessee. When Lessor delivers this Lease to Lessee for
execution, Lessee must execute and return two (2) duplicate originals to Lessor
no later than five (5) days after such delivery to Lessee.

 

56.         Controlling Lease. This Lease embodies the entire agreement and
understandings between the parties and supersedes all prior agreements, if any,
and understandings relating to the subject matter hereof.

 

57.         Counterparts. This Lease may be executed in one or more counterparts
by separate signature, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, binding on all
parties hereto, even though all parties are not signatories to the original or
to the same counterpart. Any counterpart of this Lease that has attached to it
separate signature pages, which together contain the signatures of all parties,
shall for all purposes be deemed a fully-executed instrument, and in making
proof of this Lease, it shall not be necessary to produce or account for more
than one such counterpart.

 

[signatures on following page]

 

-6-

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the
date and year first above written.

 

  LESSOR:       COLL OH RE HOLDINGS, LLC,
a Delaware limited liability company

 

  By: /s/ Leonard Tannen Baum   Print: Leonard Tannen Baum   Title: Chief
Executive Officer

 

  LESSEE:       Y CITY RECYCLING LLC,
an Ohio limited liability company

 

  By: /s/ Brian Coll   Print: Brian Coll   Title: President / CEO

 

-7-

 

 

STATE OF New York      )  

       )  

County of Westchester      )  

 

The foregoing instrument was acknowledged before me this 17th day of June, 2013,
by Leonard Tannenbaum, the CEO of Coll OH RE Holdings LLC, a Delaware limited
liability company, on behalf of the company.

 

[ex10-31pg31a.jpg]   /s/ Danielle Presta     Notary Public           Commission
Expires: January 4, 2014

 

 

STATE OF Ohio      )  

       )  

County of Muskingum      )  

 

The foregoing instrument was acknowledged before me this 15th day of May, 2013,
by Brian Coll , the President/CEO of Y CITY RECYCLING LLC, an Ohio limited
liability company, on behalf of the company.

 

 [ex10-31pg31b.jpg]                                 RHONDA MCGEE        NOTARY
PUBLIC   /s/ Rhonda Mcgee  STATE OF OHIO   Notary Public    Comm. Expires      
October 31,2016   Commission Expires: 10/31/16                                

 

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