Document:

sgmo-ex109_61.htm

EXHIBIT 10.9

SIXTH AMENDMENT TO LEASE

THIS SIXTH AMENDMENT TO LEASE (this “Sixth Amendment”) is entered into as of May 11, 2018 (the “Effective Date”), by and between POINT RICHMOND R&D ASSOCIATES II, LLC, a California limited liability company (“Landlord”), and SANGAMO THERAPEUTICS, INC., a Delaware corporation (formerly known as Sangamo Biosciences, Inc., a Delaware corporation) (“Tenant”), with reference to the following facts:

	
A.
	
Landlord and Tenant entered into that certain Triple Net Laboratory Lease dated as of May 23, 1997, together with an Addendum thereto dated May 28, 1997 (collectively, the “Original Lease”), as amended by those certain letter agreements dated June 15, 1999, April 21, 2000 and November 3, 2000, that certain First Amendment to Lease dated March 12, 2004 (the “First Amendment”), that certain Lease Addendum dated December 12, 2006 (“Lease Addendum II”), that certain Second Amendment to Lease dated March 15, 2007, that certain Lease Addendum III dated April 2, 2012 (“Lease Addendum III”), that certain Third Amendment to Lease dated August 1, 2013 (the “Third Amendment”), that certain Lease Addendum dated December 1, 2013 (“Lease Addendum IV”, and collectively with Lease Addendum II and Lease Addendum III, the “Storage Space Lease Addenda”), that certain Fourth Amendment to Lease dated June 10, 2016, and that certain Fifth Amendment to Lease dated July 10, 2017 (the “Fifth Amendment”), pursuant to which Tenant leases certain premises consisting of approximately 26,629 rentable square feet known as Suites A, B and C-1 (“Suites A, B and C-1”), approximately 5,165 rentable square feet known as Suite C-2 (“Suite C-2”), and approximately 6,153 rentable square feet known as Suite F (“Suite F”, and collectively with Suites A, B and C-1, and Suite C-2, the “Premises”), in the building located at 501 Canal Boulevard, Point Richmond, California (the “Building”).  The Original Lease, as so amended, is collectively referred to herein as the “Existing Lease”; provided, however, the Storage Space Lease Addenda are no longer in effect pursuant to the terms of the Fifth Amendment.

	
B.
	
The Lease as to Suites A, B and C-1 shall expire on August 31, 2019 (the “Suites A, B and C-1 Prior Expiration Date”), as to Suite C-2 shall expire on November 31, 2019 (the “Suite C-2 Prior Expiration Date”), and as to Suite F shall expire on July 31, 2021 (the “Suite F Prior Expiration Date”).  Tenant has requested that the Lease be amended to make the expiration date of the Term one date for all of the Premises, and Landlord is willing to do the same on the following terms and conditions.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1.Incorporation of Recitals and Defined Terms.  The Recitals above are hereby incorporated herein.  As of the Effective Date, unless context clearly indicates otherwise, all references to “the Lease” or “this Lease” in the Existing Lease or in this Sixth Amendment shall be deemed to refer to the Existing Lease, as amended by this Sixth Amendment.  Capitalized terms which are not otherwise defined in this Sixth Amendment shall have the meanings set forth in the Existing Lease.

2.Extension of Term of Lease as to Original Premises.  The Term of the Lease as to the all of the Premises is hereby extended to August 31, 2026 (the “Second Extended Expiration Date”), unless sooner terminated in accordance with the terms of the Lease.  That portion of the Term as to Suites A, B and C-1 only commencing the day immediately following the Prior Suites A, B and C-1 Expiration Date (the “Suites A, B and C-1 Second Extension Date”) and ending on the Second Extended Expiration Date shall be referred to herein as the “Suites A, B and C-1 Second Extended Term”.  That portion of the Term as to Suite C-2 only commencing the day immediately following the Prior Suite C-2 Expiration Date (the “Suite C-2 Second Extension Date”) and ending on the Second Extended Expiration Date shall be referred to herein as the “Suite C-2 Second Extended Term”.  That portion of the Term as to Suite F only commencing the day immediately following the Prior Suite F Expiration Date (the “Suite F Second Extension Date”, and collectively with the Suites A, B and C-1 Second Extension Date and the Suite F Second Extension Date, the “Second Extension Dates”), and ending on the Second Extended Expiration Date shall be referred to herein as the “Suite F Second Extended Term”.

3.Base Monthly Rent.  

(a)Premises Through Day Before Second Extension Dates.  The Base Monthly Rent, Additional Rent and all other charges under the Lease shall be payable as provided therein with respect to the each portion of the Premises through and including the day before each of the respective Second Extension Dates.

(b)Suites A, B and C-1 From Suites A, B and C-1 Second Extension Date Through Second Extended Expiration Date.  As of the Suites A, B and C-1 Second Extension Date, the schedule of Base Monthly Rent payable with respect to Suites A, B and C-1 from the Suites A, B and C-1 Second Extension Date through the Suites A, B and C-1 Second Extended Term is the following:

		
	
Period
	
Base Monthly Rent

	
09/01/19 – 08/31/20
	
$63,910.00

	
09/01/20 – 08/31/21
	
$65,508.00

	
09/01/21 – 08/31/22
	
$67,145.00 

	
09/01/22 – 08/31/23
	
$68,824.00

	
09/01/23 – 08/31/24
	
$70,545.00

	
09/01/24 – 08/31/25
	
$72,308.00

	
09/01/25 – 08/31/26
	
$74,116.00

 

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(c)Suite C-2 From Suite C-2 Second Extension Date Through Second Extended Expiration Date.  As of the Suite C-2 Second Extension Date, the schedule of Base Monthly Rent payable with respect to Suite C-2 from the Suite C-2 Second Extension Date through the Suite C-2 Second Extended Term is the following:

		
	
Period
	
Base Monthly Rent

	
12/01/19 – 11/30/20
	
$10,072.00

	
12/01/20 – 11/30/21
	
$10,324.00

	
12/01/21 – 11/30/22
	
$10,582.00

	
12/01/22 – 11/30/23
	
$10,846.00

	
12/01/23 – 11/30/24
	
$11,117.00

	
12/01/24 – 11/30/25
	
$11,395.00

	
12/01/25 – 08/31/26
	
$11,680.00

 

(d)Suite F From Suite F Second Extension Date Through Second Extended Expiration Date.  As of the Suite F Second Extension Date, the schedule of Base Monthly Rent payable with respect to Suite F from the Suite F Second Extension Date through the Suite F Second Extended Term is the following:

		
	
Period
	
Base Monthly Rent

	
08/01/21 – 07/31/22
	
$13,106.00

	
08/01/22 – 07/31/23
	
$13,434.00

	
08/01/23 – 07/31/24
	
$13,769.00

	
08/01/24 – 07/31/25
	
$14,114.00

	
08/01/25 – 07/31/26
	
$14,466.00

	
08/01/26 – 08/31/26
	
$14,828.00

 

All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease.

4.Operating Expenses.  Any caps on increases in Operating Expenses respecting the Premises shall continue to apply prior to each respective Second Extension Date.  As of (a) the Suites A, B and C-1 Second Extension Date as to Suites A, B and C-1, (b) the Suite C-2 Second 

Extension Date as to Suite C-2 and (c) the Suite F Second Extension Date as to Suite F, and ending as of the Second Extended Expiration Date as to all portions of the Premises, Tenant’s Pro Rata Share of Operating Expenses (exclusive of Taxes) shall not increase by more than 5% per calendar year on a compounding and cumulative basis (e.g. Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) for calendar year 2019 shall not exceed 105% of Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) for calendar year 2018; Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) for calendar year 2020 shall not exceed 105% of the maximum allowable amount of Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) permitted for calendar year 2019, etc.).  By way of illustration, if Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) were to be $1.00 per rentable square foot per month, then Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) for calendar year 2019 would not exceed $1.05 per rentable square foot per month, and Tenant’s Pro Rata Share of Operating Expenses (other than Taxes) for calendar year 2020 would not exceed $1.1025 per rentable square foot per month.  For the avoidance of doubt, nothing contained herein shall limit in any way Tenant’s liability for Taxes.

5.Condition of Premises; Suites A, B and C-1 Alterations.  

(a)Tenant acknowledges that it has been, and continues to be, in possession of the Premises, is familiar with the condition of the Premises and continues to occupy the Premises in its “as is, where is” condition, with all faults, without any representation, warranty or improvement by Landlord of any kind whatsoever, except as may otherwise be expressly provided in this Sixth Amendment or the Existing Lease.

(b)Tenant shall perform Alterations in Suites A, B and C-1 (the “Suites A, B and C-1 Alterations”) at Tenant’s sole cost and expense, and otherwise in conformance with Exhibit A to this Sixth Amendment (the “Work Agreement”).  In the event of any conflict between the Work Agreement and Section 7.3, Alterations, of the Original Lease, the terms of the Work Agreement shall control.  In the event of any conflict between the Work Agreement and the provisions of this Sixth Amendment, the terms of the Work Agreement shall control.

6.Extension Options.  

(a)The first and second sentences of Section 8(a) of the First Amendment (as amended by Section 2 of the Third Amendment and Section 14(a) of the Fifth Amendment) are hereby amended and restated in their entireties as follows:

Landlord hereby grants Tenant the option to extend the Term of the Lease as to all of the Premises (the “Second Extension Option”), for one (1) additional period of five (5) years (the “Second Option Term”), commencing immediately after the Second Extended Expiration Date.  The Second Extension Option shall be upon all the terms and conditions contained in the Lease (as amended hereby), except that (1) the initial Base Monthly Rent for the Premises during the Second Option Term shall be equal to 95% of the “fair market rent” for the Premises as of the commencement of the Second Option Term (i.e., the rate that a willing, comparable, new (i.e., non-renewal), non-equity tenant would pay, and that a willing landlord of comparable research and development laboratory space in Richmond, California would accept at arms’ length), determined in the manner set forth in subparagraph 

(b) below, and (2) Tenant shall not be entitled to the Suites A, B and C-1 Allowances (as defined in the Work Letter to the Sixth Amendment) during the Second Option Term.

(b)All references to “the Extension Options” and “an Extension Option” in Section 8 of the First Amendment are hereby changed to “the Second Extension Option”, and all references to the “applicable Option Term” are hereby changed to the “Second Option Term”.

(c)Except as set forth above, Tenant shall have no further options to extend the Term of the Lease as to any portion of the Premises.

7.Right of First Offer.

(a)Tenant shall have a one-time right of first offer (the “Right of First Offer”) with respect to Suite D in the Building, containing approximately 8,000 rentable square feet (the “Offering Space”).

(b)Landlord and Tenant acknowledge that the Offering Space is currently leased to an existing tenant.  On or after October 31, 2018, and prior to the date Landlord leases the Offering Space to a third-party tenant or other occupant, Landlord shall advise Tenant (the “Advice”) of the material economic terms and conditions under which Landlord is prepared to lease such Offering Space to Tenant, including, without limitation, the proposed term of lease and the proposed rent payable for the Offering Space.  Tenant may lease such Offering Space in its entirety only, under such terms, by delivering written notice of exercise to Landlord (the “Notice of Exercise”) within 15 business days after the date of the Advice, except that Tenant shall have no such Right of First Offer, and Tenant may not exercise its right under this Section 7, if: (i) at the time that Landlord would otherwise deliver the Advice, a default or breach on the part of Tenant beyond applicable notice and cure periods exists under the Lease; (ii) the Premises, or any portion thereof, is sublet at the time Landlord would otherwise deliver the Advice; (iii) Tenant is not occupying the entire Premises at the time Landlord would otherwise deliver the Advice; or (iv) the Offering Space is not intended for the exclusive use of Tenant.  Tenant shall deliver evidence of Tenant’s creditworthiness concurrently with delivery of the Notice of Exercise.

(c)The term with respect to the Offering Space (the “Offering Space Term”) shall commence as of November 1, 2019 (the “Offering Space Commencement Date”), and shall be for the length stated in the Advice.  As of the Offering Space Commencement Date, the Offering Space shall be considered a part of the Premises, provided that all of the terms stated in the Advice shall govern Tenant’s leasing of the Offering Space and only to the extent that they do not conflict with the Advice, the terms and conditions of the Lease shall apply to the Offering Space.  The foregoing notwithstanding, if Landlord is unable to deliver possession of the Offering Space to Tenant on the Offering Space Commencement Date, Landlord shall not be liable for any claims, damages or liabilities by reason thereof, but the Offering Space Term shall commence upon the date possession of the Offering Space is delivered by Landlord to Tenant, provided that Tenant shall not be obligated to pay any Rent for the Offering Space until the possession of the Offering Space is delivered to Tenant.  The Offering Space shall be accepted by Tenant in “AS IS” condition, and Landlord’s only obligation with respect to the condition of the Offering Space as of the Offering Space Commencement Date shall be to deliver such Offering Space in such condition.

(d)Tenant shall pay Base Rent for the Offering Space at the rate or rates set forth in the Advice, which rate or rates shall reflect the Fair Market Rent for the Offering Space as determined by Landlord in Landlord’s reasonable judgment.  For purposes of this Right of First Offer provision, “Fair Market Rent” shall mean the annual rental rate per square foot for space comparable to the Offering Space in the Building and office buildings comparable to the Building in Richmond, California under leases and renewal and expansion amendments being entered into at or about the time that the Fair Market Rent is being determined, giving appropriate consideration to tenant concessions, brokerage commissions, tenant improvement allowances, and the method of allocating operating expenses and taxes.  Notwithstanding the foregoing, space leased under any of the following circumstances shall not be considered to be comparable for purposes hereof: (i) the lease term is for less than the lease term of the Offering Space, (ii) the space is encumbered by the option rights of another tenant, or (iii) the space has a lack of windows and/or an awkward or unusual shape or configuration.  The foregoing is not intended to be an exclusive list of space that will not be considered to be comparable.  The determination of Fair Market Rent shall also take into consideration any reasonably anticipated changes in the Fair Market Rent from the time such Fair Market Rent is being determined and the time such Fair Market Rent will become effective under the Lease.

(e)The Right of First Offer shall terminate upon Tenant’s failure to exercise its Right of First Offer within the 15-business-day period provided in Section 7(b) above as to the Offering Space.

(f)If Tenant exercises its Right of First Offer, Landlord shall prepare an amendment (the “Offering Amendment”) adding the Offering Space to the Premises on the terms set forth in the Advice and reflecting the changes in the Base Rent, rentable square footage of the Premises, Tenant’s Pro Rata Share and other appropriate terms.  A copy of the Offering Amendment shall be sent to Tenant within a reasonable time after Landlord’s receipt of the Notice of Exercise executed by Tenant, and Tenant shall execute and return the Offering Amendment to Landlord within 15 days thereafter, but an otherwise valid exercise of the Right of First Offer shall be fully effective whether or not the Offering Amendment is prepared and/or executed.

(g)Notwithstanding anything to the contrary contained herein, Tenant’s Right of First Offer is subject and subordinate to the expansion rights (whether such rights are designated as a right of first offer, right of first refusal, expansion option or otherwise) of any tenant or other occupant of the Building existing as of the Effective Date of this Amendment.  As of the Effective Date, no tenant or other occupant of the Building has any such rights.

(h)Notwithstanding anything to the contrary contained herein, Tenant’s rights under this Section 7 are personal to the original Tenant executing the Lease (“Named Tenant”) and shall not be assigned or assignable, in whole or in part, to any third-party.  Any assignment or other transfer of such rights by Named Tenant shall be void and of no force or effect.  Without limiting the generality of the foregoing, no sublessee of the Premises shall be permitted to exercise the rights granted to Tenant under this Section 7.

8.Brokers.  Tenant shall be solely responsible for any commission, fees or costs payable to any real estate broker, sales person or finder claiming to have represented Tenant in connection with this Sixth Amendment, any future amendment to the Lease and/or Tenant’s exercise of any extension option or right of first refusal contained in the Lease.  Tenant shall 

indemnify, defend and hold Landlord harmless from and against any and all claims by any real estate broker, salesperson or finder claiming to have represented Tenant for a commission, finder’s fee or other compensation in connection with this Sixth Amendment.  Landlord shall indemnify, defend and hold Tenant harmless from and against any and all claims by any real estate broker, salesperson or finder claiming to have represented Landlord for a commission, finder’s fee or other compensation in connection with this Sixth Amendment.  Landlord and Tenant each acknowledge and agree that neither Landlord nor Tenant are represented by any broker in connection with this Sixth Amendment.

9.Inspection by a CASp in Accordance with Civil Code Section 1938.  To Landlord’s actual knowledge, the property being leased or rented pursuant to the Lease (as amended by this Sixth Amendment) has not undergone inspection by a Certified Access Specialist (CASp).  A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.  The foregoing verification is included in this Sixth Amendment solely for the purpose of complying with California Civil Code Section 1938 and, except as otherwise expressly stated above, shall not in any manner affect Landlord’s and Tenant’s respective responsibilities for compliance with construction-related accessibility standards as provided under the Lease.

10.OFAC.  Tenant represents and warrants to Landlord that Tenant is currently in compliance with and shall at all times during the Term of the Lease remain in compliance with the regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto.

11.Counterparts; PDF.  This Sixth Amendment may be executed in multiple counterparts each of which is deemed an original but together constitute one and the same instrument.  This Sixth Amendment may be executed in so-called “pdf” format and each party has the right to rely upon a pdf counterpart of this Sixth Amendment signed by the other party to the same extent as if such party had received an original counterpart.

12.Authority.  This Sixth Amendment shall be binding upon and inure to the benefit of the parties, their respective heirs, legal representatives, successors and assigns.  Each party hereto and the persons signing below warrant that the person signing below on such party’s behalf is authorized to do so and to bind such party to the terms of this Sixth Amendment.

13.Status of Existing Lease.  Except as amended hereby, the Existing Lease is unchanged, and, as amended hereby, the Existing Lease remains in full force and effect.

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IN WITNESS WHEREOF, Landlord and Tenant have entered into this Sixth Amendment as of the date first set forth above.

				
	
Landlord:
	
POINT RICHMOND R&D ASSOCIATES II, LLC,
a California limited liability company

	
By:
	
Wareham-NZL, LLC, its Manager

	
By: /s/ Richard K. Robbins
Richard K. Robbins
Its Manager
	
	
Tenant:
	
SANGAMO THERAPEUTICS, INC.,
a Delaware corporation

By: /s/ Sandy Macrae________________________________
            Sandy Macrae 

            President and CEO

 

	
 
	
 

 

EXHIBIT A

WORK AGREEMENT

1.Allowance.

1.1Cost of Suites A, B and C-1 Alterations.  Tenant shall perform the Suites A, B and C-1 Alterations at Tenant’s sole cost and expense, subject to the Suites A, B and C-1 Allowances (as hereinafter defined).

1.2Allowance.  Tenant shall be entitled: (i) to an allowance in an amount not to exceed $1,500,00.00 (the “Suites A, B and C-1 New Allowance”), (ii) to use the Extended Term Allowance in the amount of $46,600.75 (the “First Option Term Allowance”) as set forth in Section 8 of the Third Amendment, and (iii) to apply the remaining unapplied and unexpired allowances set forth elsewhere in the Existing Lease (the “Remaining Existing Allowances”, and collectively with the Suites A, B and C-1 New Allowance and the First Option Term Allowance, the “Suites A, B and C-1 Allowances”), for the costs relating to the design and installation of the Suites A, B and C-1 Alterations in the Premises.  In no event will Landlord be obligated to make disbursements pursuant to this Work Agreement in a total amount which exceeds the Suites A, B and C-1 Allowances.  Tenant must complete all of the Suites A, B and C-1 Alterations and have submitted Payment Request Supporting Documentation (defined below) for such work no later than August 31, 2021 in order to be entitled to receive the Suites A, B and C-1 Allowances for such work.  If Tenant does not submit a request for application or disbursement of the entirety of the Suites A, B and C-1 Allowances in accordance with the provisions of this Work Letter such date, any undisbursed portion shall be forfeited and shall accrue for the sole benefit of Landlord.

1.3Disbursement of the Suites A, B and C-1 Allowances.

(a)Suites A, B and C-1 Allowance Items.  Except as otherwise set forth in this Work Agreement, the Suites A, B and C-1 Allowances shall be disbursed by Landlord only for the following items and costs (collectively the “Suites A, B and C-1 Allowance Items”):

(i)Payment of the fees of the Architect and the Building Consultants (as those terms are defined below) and payment of fees and costs reasonably incurred by Landlord for the review of the Construction Drawings (defined below) by Landlord or by Landlord’s third party consultants;

(ii)The payment of plan check, permit and license fees relating to the Suites A, B and C-1 Alterations;

(iii)The cost of construction of the Suites A, B and C-1 Alterations, including, without limitation, costs of labor and materials, costs of any equipment and fixtures that would become Landlord’s property under the terms of the Existing Lease as of the expiration or earlier termination of the Term, costs of any services provided by third parties unaffiliated with Tenant in connection with the design and construction, after hours charges, testing and inspection costs, freight elevator usage, trash removal costs, and contractors’ fees and general conditions;

(iv)The cost of any changes to the Building when such changes are required by the Construction Drawings, such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith; and

(v)The cost of any changes to the Construction Drawings (defined below) or Suites A, B and C-1 Alterations required by applicable building codes (collectively, “Code”).

(b)Disbursement of Suites A, B and C-1 Allowances.  During the design and construction of the Suites A, B and C-1 Alterations, Landlord shall make monthly disbursements of the Suites A, B and C-1 Allowances to reimburse Tenant for Suites A, B and C-1 Allowance Items and shall authorize the release of funds as follows, and otherwise in accordance with Landlord’s standard disbursement process.

(i)On or before the fifth (5th) day of each calendar month (or such other date as Landlord may designate), Tenant shall deliver to Landlord:  (A) a request for payment from Contractor (defined below) approved by Tenant, in a commercially reasonable form to be provided or approved in advance by Landlord, including a schedule of values and showing the percentage of completion, by trade, of the Suites A, B and C-1 Alterations, which details the portion of the work completed and the portion not completed; (B) invoices from all of Tenant’s Agents (defined below) for labor rendered and materials delivered to the Premises; (C) executed conditional mechanic’s lien releases from all of Tenant’s Agents who have lien rights with respect to the subject request for payment (along with unconditional mechanics’ lien releases with respect to payments made pursuant to Tenant’s prior submission hereunder) in compliance with all applicable laws; and (D) all other information reasonably requested by Landlord (collectively, the “Payment Request Supporting Documentation”).

(ii)Within thirty (30) days after Tenant’s delivery to Landlord of all Payment Request Supporting Documentation, Landlord shall deliver to Tenant payment in an amount equal to the lesser of:  (x) the amount so requested by Tenant, as set forth above, less (i) the applicable Over-Allowance Amount (defined in Section 3.2(a) below) and (ii) a ten percent (10%) retention (the aggregate amount of such retentions to be known as the “Final Retention”), and (y) the balance of any remaining available portion of the Suites A, B and C-1 Allowances (not including the Final Retention), provided that if Landlord, in good faith, disputes any item in a request for payment based on non-compliance of any work with the Approved Working Drawings (defined below) or due to any substandard work and delivers a written objection to such item setting forth with reasonable particularity Landlord’s reasons for its dispute (a “Draw Dispute Notice”) within ten (10) business days following Tenant’s submission of its Payment Request Supporting Documentation, Landlord may deduct the amount of such disputed item from the payment. Landlord and Tenant shall, in good faith, endeavor to diligently resolve any such dispute.  Landlord’s payment of such amounts shall not be deemed Landlord’s approval or acceptance of the work furnished or materials supplied as set forth in Tenant’s payment request.

(iii)Subject to the provisions of this Work Agreement, following the final completion of construction of the Suites A, B and C-1 Alterations, Landlord shall deliver to Tenant a check made payable to Tenant, or a check or checks made payable to another party or parties as reasonably requested by Tenant, in the amount of the Final Retention, provided that 

(A) Tenant delivers to Landlord properly executed unconditional mechanics’ lien releases from all of Tenant’s Agents in compliance with all applicable laws; (B) Landlord has determined in good faith that no substandard work exists which adversely affects the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, the structure or exterior appearance of the Building; (C) Architect (hereafter defined) delivers to Landlord a certificate, in a form reasonably acceptable to Landlord, certifying that the construction of the Suites A, B and C-1 Alterations has been finally completed; and (D) Tenant has fulfilled its Completion Obligations (defined below) and has otherwise complied with Landlord’s standard “close-out” requirements regarding city approvals, closeout tasks, closeout documentation regarding the general contractor, financial close-out matters, and Tenant’s vendors.

2.Construction Drawings.

2.1Selection of Architect; Construction Drawings.  

(a)Tenant shall retain an architect approved in writing, in advance by Landlord, such approval not to be unreasonably withheld, conditioned or delayed, and shall be granted or denied within three (3) business days upon request (the “Architect”) to prepare the Construction Drawings. Tenant shall retain engineering consultants approved in writing, in advance by Landlord, such approval not to be unreasonably withheld, conditioned or delayed, and shall be granted or denied within three (3) business days upon request (the “Building Consultants”) to prepare all plans and engineering working drawings and perform all work relating to mechanical, electrical and plumbing (“MEP”), HVAC/Air Balancing, life-safety, structural, sprinkler and riser work. Landlord’s failure to respond within such three (3) business day period shall be deemed approval by Landlord.

(b)The plans and drawings to be prepared by Architect and the Building Consultants hereunder (i.e., both the Space Plan and the Working Drawings, as each term is defined below) shall be known collectively as the “Construction Drawings.”  All Construction Drawings shall comply with the drawing format and specifications reasonably determined or approved by Landlord and shall be subject to Landlord’s prior written approval as specified in Sections 2.2, 2.3 and 2.4 below. All MEP drawings must be fully engineered or prepared on a “design-build-assist” basis with a Landlord-approved MEP basis of design (“BOD”), as prepared by an approved MEP engineer consultant.  The MEP drawings cannot be prepared on a strictly “design-build” basis.  Landlord’s review of the Construction Drawings shall be for its sole purpose and shall not obligate Landlord to review the same, for quality, design, Code compliance or other like matters.  Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings.

2.2Space Plan.  Tenant shall supply Landlord for Landlord’s review and approval with four (4) copies signed by Tenant of its space plan for the Premises (“Space Plan”) before any architectural working drawings or engineering drawings have been commenced.  The Space Plan shall include a layout and designation of all laboratory facilities, offices, rooms and other 

partitioning, their intended use, and equipment to be contained therein.  Landlord may request clarification or more specific drawings for special use items not included in the Space Plan.  Landlord shall advise Tenant within five (5) business days after Landlord’s receipt of the Space Plan (or, if applicable, such additional information requested by Landlord pursuant to the provisions of the immediately preceding sentence) if the same is approved or is unsatisfactory or incomplete in any respect.  Upon any disapproval by Landlord, Tenant shall promptly cause the Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require.  In the event Landlord fails to respond within such five (5) business day period, such Space Plan shall be deemed approved by Landlord.

2.3Working Drawings.  After the Space Plan has been approved by Landlord, Tenant shall supply the Architect and the Building Consultants with a complete listing of standard and non-standard equipment and specifications, including, without limitation, B.T.U. calculations, electrical requirements and special electrical receptacle requirements, to enable the Architect and the Building Consultants to complete the Working Drawings and shall cause the Architect and the Engineers to promptly complete the architectural and engineering drawings, and Architect shall compile a fully coordinated set of drawings, including but not limited to architectural, structural, mechanical, electrical, plumbing, fire sprinkler and life safety in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the “Working Drawings”) and shall submit the same to Landlord for Landlord’s review and approval.  Tenant shall supply Landlord with four (4) copies signed by Tenant of the Working Drawings.  Landlord shall advise Tenant within seven (7) business days after Landlord’s receipt of the Working Drawings if Landlord, in good faith, determines that the same are approved (the “Approved Working Drawings”) or are unsatisfactory or incomplete.  If Tenant is so advised, Tenant shall promptly revise the Working Drawings to correct any deficiencies or other matters Landlord may reasonably require. In the event Landlord fails to respond within such seven (7) business day period, Tenant shall send a reminder notice to Landlord, and if Landlord fails to respond to the reminder notice within three (3) business days after receipt thereof, such Working Drawings shall be deemed approved by Landlord.

2.4Landlord’s Approval.  Tenant acknowledges that it shall be deemed reasonable for Landlord to disapprove the Space Plan and any subsequent Working Drawings if (among other reasons): (a) the Suites A, B and C-1 Alterations as specified and designed do not comply with the requirements of the Project’s sustainability practices (if any) or any applicable “green” building standards, or (b) the sprinkler system design does not comply with the specifications provided by FM Global.  Additionally, Landlord’s approval of any matter under this Work Agreement may be withheld if Landlord reasonably determines that the same would violate any provision of the Lease or this Work Agreement or would adversely affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning, life-safety or other systems of the Building, the curtain wall of the Building, the structure or exterior appearance of the Building. 

2.5Changes to Approved Working Drawings.  Any changes to the Approved Working Drawings approved by Landlord (each, a “Change”) shall be requested and instituted in accordance with the provisions of this Section 2.5 and shall be subject to the written approval of the non-requesting party in accordance with this Work Agreement.

(a)Change Request. Either Landlord or Tenant may request Changes after Landlord approves the Working Drawings by notifying the other party thereof in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any requested Changes and any modification of the Approved Working Drawings, as applicable, necessitated by the Change. If the nature of a Change requires revisions to the Approved Working Drawings, then the requesting party shall be solely responsible for the cost and expense of such revisions and any increases in the cost as a result of such Change. Change Requests shall be signed by the requesting party’s representative as set forth in this Work Agreement. Landlord shall only request a Change if it reasonably believes that such Change is necessary to comply with applicable laws or to prevent a material adverse impact on the Building’s Systems, including any fire/life safety systems.

(b)Approval of Changes. All Change Requests shall be subject to the other party’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. The non-requesting party shall have three (3) business days after receipt of a Change Request to notify the requesting party in writing of the non-requesting party’s decision either to approve or object to the Change Request. If the non-requesting party fails to respond within such three (3) business day period, the requesting party shall send a reminder notice and the non-requesting party’s failure to respond to the reminder notice within two (2) business days after receipt thereof shall be deemed approval by the nonrequesting party.

3.Construction Of The Suites A, B and C-1 Alterations.

3.1Tenant’s Selection of Contractors.

(a)The Contractor.  Tenant shall retain a general contractor approved in writing, in advance by Landlord, such approval not to be unreasonably withheld and be granted or denied within three (3) business days upon request, to construct the Suites A, B and C-1 Alterations (“Contractor”). Landlord’s failure to respond within such three (3) business day period shall be deemed approval by Landlord.

(b)Tenant’s Agents.  All subcontractors, laborers, materialmen, and suppliers used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be known collectively as “Tenant’s Agents”) must be approved in writing by Landlord, in Landlord’s reasonable discretion within three (3) business days upon request, provided that Landlord will require Tenant to retain the Building Consultants.  All of Tenant’s Agents shall be licensed in the State of California and capable of being bonded.  Landlord’s failure to respond within such three (3) business day period shall be deemed approval by Landlord.

3.2Construction of Tenant Improvements by Tenant’s Agents.

(a)Construction Contract.  Prior to Tenant’s execution of the construction contract and general conditions with Contractor (the “Contract”), Tenant shall submit the Contract to Landlord for its approval, which approval shall not be unreasonably withheld or delayed and shall be granted or denied within three (3) business days upon request.  Landlord’s failure to respond within such three (3) business day period shall be deemed approval by Landlord. Prior to the commencement of the construction of the Suites A, B and C-1 Alterations, Tenant shall provide 

Landlord with a schedule of values consisting of a detailed breakdown, by trade, of the final costs to be incurred or which have been incurred, for all Suites A, B and C-1 Allowance Items in connection with the design and construction of the Suites A, B and C-1 Alterations, which costs form the basis for the amount of the Contract (“Final Costs”).  Prior to the commencement of construction of the Suites A, B and C-1 Alterations, Landlord and Tenant shall identify the amount (the “Over-Allowance Amount”) equal to the difference between the amount of the Final Costs and the amount of the Suites A, B and C-1 Allowances (less any portion thereof already disbursed by Landlord, or in the process of being disbursed by Landlord, on or before the commencement of construction of the Suites A, B and C-1 Alterations), and Landlord will reimburse Tenant on a monthly basis, as described in Section 1.2(b)(ii) above, for a percentage of each amount requested by the Contractor or otherwise to be disbursed under this Work Agreement, which percentage shall be equal to the Suites A, B and C-1 Allowances divided by the amount of the Final Costs (after deducting from the Final Costs any amounts expended in connection with the preparation of the Construction Drawings, and the cost of all other Suites A, B and C-1 Allowance Items incurred prior to the commencement of construction of the Suites A, B and C-1 Alterations), and Tenant shall be solely responsible for any Over-Allowance Amount.  If, after the Final Costs have been initially determined, the costs relating to the design and construction of the Suites A, B and C-1 Alterations shall change, any additional costs for such design and construction in excess of the Final Costs shall be added to the Over-Allowance Amount and the Final Costs, and Landlord’s reimbursement percentage, shall be recalculated in accordance with the terms of the immediately preceding sentence.  Notwithstanding anything set forth herein to the contrary, construction of the Suites A, B and C-1 Alterations shall not commence until Tenant has procured and delivered to Landlord a copy of all Permits for the applicable Suites A, B and C-1 Alterations.

(b)Construction Requirements.

(i)Landlord’s General Conditions for Tenant’s Agents and Tenant Improvement Work.  Construction of the Suites A, B and C-1 Alterations shall comply with the following:  (A) the Suites A, B and C-1 Alterations shall be constructed in strict accordance with the Approved Working Drawings; (B) Tenant’s Agents shall submit schedules of all work relating to the Suites A, B and C-1 Alterations to Landlord, and Landlord shall, within five (5) business days of receipt thereof, inform Tenant’s Agents of any changes which are necessary thereto, and Tenant’s Agents shall use commercially reasonable efforts to adhere to such corrected schedule; and (C) Tenant shall abide by all reasonable rules made and provided to Tenant in writing by Landlord’s Building Manager with respect to the use of contractor parking, materials delivery, freight, loading dock and service elevators, any required shutdown of utilities (including life-safety systems), storage of materials, coordination of work with the contractors of Landlord, and any other matter in connection with this Work Agreement, including, without limitation, the construction of the Suites A, B and C-1 Alterations. 

(ii)Indemnity.  Tenant’s indemnity of Landlord as set forth in the Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant’s Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Suites A, B and C-1 Alterations and/or Tenant’s disapproval of all or any portion of any request for payment.  Such indemnity by Tenant, as set forth in the Lease, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to 

Landlord’s performance of any ministerial acts reasonably necessary (A) to permit Tenant to complete the Suites A, B and C-1 Alterations, and (B) to enable Tenant to obtain any related building permit or certificate of occupancy for the Premises; provided, however, nothing contained in this Work Agreement shall be deemed to modify the indemnity provisions of the Existing Lease.

(iii)Requirements of Tenant’s Agents.  Each of Tenant’s Agents shall guarantee to Tenant and for the benefit of Landlord that the portion of the Suites A, B and C-1 Alterations for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of completion thereof.  Each of Tenant’s Agents shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after the completion of the work performed by such contractor or subcontractor.  The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection with the removal or replacement of all or any part of the Suites A, B and C-1 Alterations, and/or the Building and/or common areas that  are damaged or disturbed thereby.  All such warranties or guarantees as to materials or workmanship of or with respect to the Suites A, B and C-1 Alterations shall be contained in the Contract or subcontract and shall be written such that such guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either.  Tenant covenants to give to Landlord any assignment or other assurances as may be necessary to effect such right of direct enforcement.

(c)Insurance Requirements.

(i)General Coverages.  All of Tenant’s Agents shall carry employer’s liability and worker’s compensation insurance covering all of their respective employees, and shall also carry commercial general liability insurance, including personal and bodily injury, property damage and completed operations liability, all with limits, in form and with companies as are required to be carried by Tenant as set forth in the Lease.

(ii)Special Coverages.  Tenant or Contractor shall carry “Builder’s All Risk” insurance in an amount approved by Landlord covering the construction of the Suites A, B and C-1 Alterations, and such other insurance as Landlord may require, it being understood and agreed that the Suites A, B and C-1 Alterations shall be insured by Tenant pursuant to the Lease immediately upon completion thereof.  Such insurance shall be in amounts and shall include such extended coverage endorsements as may be reasonably required by Landlord, and shall be in form and with companies as are required to be carried by Tenant as set forth in the Lease.

(iii)General Terms.  Certificates for all of the foregoing insurance coverage shall be delivered to Landlord before the commencement of construction of the Suites A, B and C-1 Alterations and before the Contractor’s equipment is moved onto the site.  All such policies of insurance must contain a provision that the company writing said policy will endeavor to give Landlord thirty (30) days’ prior written notice of any cancellation of such insurance.  In the event that the Suites A, B and C-1 Alterations are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense.  Tenant’s Agents shall maintain all of the foregoing insurance coverage in force until the Suites A, B and C-1 Alterations are fully completed and accepted by Landlord, except for any 

Products and Completed Operations Coverage insurance required by Landlord, which is to be maintained for one (1) year following completion of the work and acceptance by Landlord and Tenant.  All policies carried hereunder shall insure Landlord, Wareham Property Group as Landlord’s manager, and Tenant, as their interests may appear, as well as Tenant’s Agents.  All insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall preclude subrogation claims by the insurer against anyone insured thereunder.  Such insurance shall provide that it is primary insurance as respects Landlord and Tenant and that any other insurance maintained by Landlord or Tenant is excess and noncontributing with the insurance required hereunder.  The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under the Lease and/or this Work Agreement. 

(d)Governmental Compliance.  The Suites A, B and C-1 Alterations shall comply in all respects with the following:  (i) the Code and other federal, state, city and/or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person or entity; (ii) applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code; (iii) building material manufacturer’s specifications, and (iv) the Project’s Sustainability Practices (if any).

(e)Inspection by Landlord.  Prior to the completion of the Suites A, B and C-1 Alterations, Landlord shall have the right to inspect the same during normal business hours upon reasonable advance notice, provided however, that Landlord’s failure to inspect the Suites A, B and C-1 Alterations shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall Landlord’s inspection of the Suites A, B and C-1 Alterations constitute Landlord’s approval of the same.  Should Landlord disapprove any portion of the Suites A, B and C-1 Alterations, Landlord shall notify Tenant in writing of such disapproval and shall specify the items disapproved.  Any defects or deviations in, and/or disapproval by Landlord of, the Suites A, B and C-1 Alterations shall be rectified by Tenant at no expense to Landlord, provided however, that in the event Landlord determines that a defect or deviation exists or disapproves of any matter in connection with any portion of the Suites A, B and C-1 Alterations and such defect, deviation or matter might adversely affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning or life-safety systems of the Building, the structure or exterior appearance of the Building or any other tenant’s use of such other tenant’s leased premises, and Tenant fails to immediately cease the problematic aspect(s) of the Suites A, B and C-1 Alterations work and promptly commence to remedy the same after Landlord’s written notice thereof or fails to diligently execute to completion, then Landlord may take such action as Landlord deems necessary, at Tenant’s expense and without incurring any liability on Landlord’s part, to correct any such defect, deviation and/or matter, including, without limitation, causing the cessation of performance of the construction of the Suites A, B and C-1 Alterations until such time as the defect, deviation and/or matter is corrected to Landlord’s reasonable satisfaction.

(f)Meetings.  Tenant shall hold periodic meetings at a reasonable time with the Architect and the Contractor regarding the progress of the preparation of the Construction Drawings and the construction of the Suites A, B and C-1 Alterations, which meetings shall be held at the Premises, and Landlord and/or its agents shall receive prior written notice of, and shall have the right to attend, all such meetings.  Upon Landlord’s reasonable request, certain of Tenant’s Agents shall attend such meetings.  In addition, minutes shall be taken at all such 

meetings, and Landlord will be included in the distribution list for such minutes.  One such meeting each month shall include the review of Contractor’s current request for payment.

3.3Notice of Completion; Copy of Record Set of Plans.  Following completion of construction of the Suites A, B and C-1 Alterations, Landlord shall cause a Notice of Completion to be recorded in the office of the Recorder of Contra Costa County and shall furnish a copy thereof to Tenant.  Within thirty (30) days following the completion of construction, (i) Tenant shall cause the Architect and Contractor (A) to update the Approved Working Drawings as necessary to reflect all changes made to the Approved Working Drawings during the course of construction, (B) to certify to the best of their knowledge that the updated drawings are true and correct, which certification shall survive the expiration or termination of the Lease, and (C) to deliver to Landlord such updated drawings in accordance with Landlord’s then-current CAD requirements, and (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Premises.  Tenant’s obligations set forth in this Section are collectively referred to as the “Completion Obligations.”

4.Miscellaneous.

4.1Tenant’s Representative.  Tenant has designated Chris Holman as its sole representative with respect to the matters set forth in this Work Agreement, until further notice to Landlord, who shall have full authority and responsibility to act on behalf of Tenant as required in this Work Agreement.

4.2Landlord’s Representative.  Landlord has designated Chris Barlow as its sole representative with respect to the matters set forth in this Work Agreement, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of Landlord as required in this Work Agreement.

4.3Tenant’s Default.  Notwithstanding any provision to the contrary contained in the Lease, if a default or breach by Tenant beyond applicable notice and cure periods under the Lease (including, without limitation, this Work Agreement) has occurred at any time on or before the Substantial Completion of the Suites A, B and C-1 Alterations, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord shall have the right to withhold payment of all or any portion of the Suites A, B and C-1 Allowances, and (ii) all other obligations of Landlord under the terms of this Work Agreement shall be forgiven until such time as such default is cured pursuant to the terms of the Lease.  For purposes of this Section 4.3, “Substantial Completion” shall mean completion of construction of the Suites A, B and C-1 Alterations in the Premises pursuant to the Approved Working Drawings, with the exception of any punch list items.Execution
Copy

 

LEASE
AGREEMENT

 

by
and between

 

Metrolina
Alpharetta, LLC

a
North Carolina limited liability company

(as
Landlord)

 

and

 

Ballantyne
Strong, Inc.,

a
Delaware corporation, 

(as
Tenant)

 

    	 	 

    	 

    

 

LEASE
AGREEMENT

 

THIS
LEASE AGREEMENT (this “Lease”) made and entered into as of the 29th day of June, 2018 (the “Lease
Date”), by and between:

 

METROLINA
ALPHARETTA, LLC, a North Carolina limited liability company, hereinafter called “Landlord”; and

 

BALLANTYNE
STRONG, INC., a Delaware corporation, hereinafter called “Tenant”:

 

W
I T N E S S E T H:

 

In
consideration of the mutual covenants and agreements contained herein, the parties hereto agree for themselves, their successors
and assigns, as follows:

 

1.
DESCRIPTION OF PREMISES. Landlord hereby
leases to Tenant, and Tenant hereby accepts and rents from Landlord, that certain parcel of real property located in Forsyth County,
Alpharetta, Georgia more particularly described on Exhibit A attached hereto (the “Land”) with
that certain office building (the “Building”) containing approximately 43,524 square feet located on the Land
and having an address of 190 Bluegrass Valley Parkway, Alpharetta, Georgia, together with all parking areas, driveways, sidewalks
and other improvements facilities and personal property as more fully set forth herein located on said Land (said Building, together
with said Land and other improvements and facilities being hereafter referred to as the “Premises”).

 

2.
TERM.

 

(a)
Unless another date is specified for occupancy
on an exhibit attached hereto, the term of this Lease (herein, the “Term”) shall commence on the Lease Date
as set forth hereinabove (the “Commencement Date”) and shall end at midnight on the date (the “Expiration
Date”) which is ten (10) years from the Rent Commencement Date (as defined herein). As used herein, the term “Lease
Year” shall mean each consecutive twelve-month period of the Term, beginning with the Rent Commencement Date (as defined
herein) or any anniversary thereof.

 

3.
RENTAL. During the full Term of this Lease,
Tenant shall pay to Landlord, without notice, demand, reduction, setoff or any defense, a total rental (the “Annual Rental”)
consisting of the sum total of the following:

 

(a)
Minimum Rental. Starting on the Commencement
Date (also being defined as the “Rent Commencement Date”) and continuing through the expiration of the Term
of this Lease or the earlier termination of this Lease, Tenant shall pay the annual minimum rental (the “Minimum Rental”)
which is payable in equal monthly installments, each in advance on or before the first day of each month. If the Rent Commencement
Date is a date other than the first day of a calendar month, the Minimum Rental shall be prorated daily from such date to the
first day of the next calendar month and paid on the Rent Commencement Date. The amount of Minimum Rental to be paid by Tenant
during the Term shall be as follows:

 

	Months	 	 	Minimum Rental	 	 	Monthly Payment	 
	 	1 - 12	 	 	$	600,000.00	 	 	$	50,000.00	 
	 	13 – 24	 	 	$	612,000.00	 	 	$	51,000.00	 
	 	25 – 36	 	 	$	624,240.00	 	 	$	52,020.00	 
	 	37 – 48	 	 	$	636,724.00	 	 	$	53,060.40	 
	 	49 – 60	 	 	$	649,458.50	 	 	$	54,121.54	 
	 	61 – 72	 	 	$	662,447.67	 	 	$	55,204.00	 
	 	73 – 84	 	 	$	675,696.62	 	 	$	56,308.05	 
	 	85 – 96	 	 	$	689,210.55	 	 	$	57,434.21	 
	 	97 – 108	 	 	$	702,994.76	 	 	$	58,582.90	 
	 	109 – 120	 	 	$	717,054.65	 	 	$	59,754.55	 

 

    	 	1	 

    	 

    

 

(b)
Tenant’s Payment of Taxes. Tenant
shall pay directly to the taxing authority, before delinquent, any and all ad valorem taxes (or any tax hereafter imposed in lieu
thereof) (collectively, the “Taxes”) with respect to the Premises for the year 2018 and any period included
in the Term. Any increase in ad valorem taxes on the Premises as a result of alterations, additions or improvements made by, for
or on account of Tenant shall be paid by Tenant directly to the taxing authority, before delinquent.

 

(c)
Tenant’s Payment of Insurance Premiums.
Tenant shall pay directly any and all premiums charged for fire and extended coverage and liability insurance with all endorsements
in the amounts and limits as set forth herein on the Premises.

 

(d)
Proof of Tenant’s Payment of Taxes and
Insurance Premiums. Tenant shall provide Landlord, within thirty (30) days of the date such payment is due, with evidence
of the full payment of all Taxes and insurance premiums as set forth hereinabove. In the event Tenant fails to provide Landlord
with such proof or if Landlord receives a statement showing that any installment of taxes or insurance premiums have not been
paid when due, Landlord may, but shall not be obligated to, pay such installment of taxes and/or insurance premium. Tenant shall
reimburse Landlord for any payments of taxes and/or insurance plus an administrative fee in the amount of seven and one-half percent
(7.5%) of such payment, within ten (10) days of notice thereof. Any such amounts owed by Tenant hereunder shall be considered
Additional Rent (as defined below). 

 

(e)
Tenant’s Share of Mechanical Maintenance
and Inspection Costs. Pursuant to Paragraph 10 herein, Tenant shall be responsible, at its sole cost and expense, for
the maintenance, repair and replacement of, and the provision of routine mechanical maintenance and inspection services to, the
heating, ventilation and air conditioning (“HVAC”) equipment supplying the Premises.

 

(f)
Documentary Tax. If any documentary stamp
tax, sales tax or any other tax or similar charge (exclusive of any income tax payable by Landlord as a result hereof) levied
on the rental, leasing or letting of the Premises, whether local, state or federal, is required to be paid due to the execution
hereof or otherwise with respect to this Lease or the payments due hereunder, then the cost thereof shall be borne by Tenant and
shall be paid promptly and prior to same becoming past due. Tenant shall provide Landlord with copies of all paid receipts respecting
such tax or charge promptly after payment of same.

 

    	 	2	 

    	 

    

 

(g)
Late Payment. If any monthly installment
of Annual Rental, Minimum Rental, Additional Rent (if any) or any other sum due and payable pursuant to this Lease remains due
and unpaid ten (10) days after said amount becomes due, Tenant shall pay as Additional Rent hereunder a late payment charge of
a sum equal to five percent (5%) of the unpaid rent or other payment. All unpaid rent and other sums of whatever nature owed by
Tenant to Landlord under this Lease shall bear interest from the tenth (10th) day after the due date thereof until paid at the
lesser of eight percent (8%) per annum or the maximum interest rate per annum allowed by law. Acceptance by Landlord of any payment
from Tenant hereunder in an amount less than that which is currently due shall in no way affect Landlord’s rights under
this Lease and shall in no way constitute an accord and satisfaction or waiver.

 

(h)
Other Sums. Any and all other sums that
are or may become due and payable by Tenant hereunder (collectively referred to as “Additional Rent”).

 

4.
DELIVERY OF POSSESSION.

 

(a)
Landlord will deliver the Premises to Tenant on or before the Commencement Date, and, upon such delivery, Tenant shall be deemed
to have accepted the Premises, “AS IS, WHERE IS AND WITH ALL FAULTS.”

 

(b)
The parties acknowledge that this Lease is entered into in connection with a sale leaseback transaction whereby Tenant has sold
and conveyed the Premises to Landlord of even date herewith. The parties further acknowledge and agree that Tenant remains the
owner of all trade fixtures, furniture, other furnishings, artwork, and all other personal property contained within the Premises
with the exception of the following items of personal property which shall remain the property of Landlord and shall be surrendered
to Landlord at the expiration or termination of this Lease: the large format space photographs displayed on the walls of the Premises
and the small conference room table that is designed in a “Star Wars” theme (collectively, “Tenant’s
FF&E”). Accordingly, Tenant shall have the ongoing right to use all of Tenant’s FF&E within the Premises.
During the Term, Tenant shall be solely responsible at its cost and expense for the insurance, maintenance, repair and replacement
(if deemed necessary by Tenant) of Tenant’s FF&E.

 

5.
ALTERATIONS AND IMPROVEMENTS BY TENANT.

 

(a)
Tenant shall make no structural changes respecting
the Building without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed.
Any interior or exterior nonstructural changes or other alterations, additions, or improvements to the Premises or the Building
shall be made by or on behalf of Tenant only with the prior written consent of Landlord, which consent Landlord shall not unreasonably
withhold, condition, or delay. Prior to any such consent by Landlord, Tenant shall submit to Landlord reasonably detailed plans
and specifications covering the proposed work. If Landlord notifies Tenant of any objections to the proposed alterations, Tenant
must (i) revise the plans and specifications to the extent reasonably necessary to secure the Landlord’s approval and (ii)
submit such revised plans and specifications for Landlord’s approval. Prior to commencement of any alterations or improvements
on the Premises, Tenant shall provide Landlord with evidence of insurance reasonably satisfactory to landlord. Tenant shall thereafter
have the alterations performed in accordance with the approved plans and specifications.

 

    	 	3	 

    	 

    

 

(b)
Tenant agrees that any damage to the Premises
caused by Tenant’s construction work shall be repaired at Tenant’s sole cost and expense. No later than thirty (30)
days after completion of any construction work by Tenant hereunder, Tenant shall provide to Landlord (i) an affidavit from the
general contractor performing the work that same has been substantially completed in accordance with the approved plans and specifications
and that all mechanics and materialmen engaged by the general contractor in connection therewith have been paid in full; (ii)
a waiver of liens with respect to such construction work executed by the general contractor and any other contractor with whom
Tenant has directly contracted, except as to any contractor for which Tenant has obtained a bond to pay any claims by such persons;
and (iii) a certificate of occupancy for the Premises from the applicable governmental authorities.

 

(c)
Landlord shall notify Tenant at the time Tenant
obtains Landlord’s approval for any alterations, additions or improvements, including without limitation any partitions,
walls, railings, carpeting, floor and wall coverings and other fixtures (excluding, however, Tenant’s trade fixtures as
described in Paragraph 11 herein) to be made by, for, or at the direction of Tenant whether Landlord shall require Tenant
to remove the same at the expiration or earlier termination of this Lease. All alterations, additional or improvements that Landlord
does not require to be removed at the expiration or earlier termination of this Lease shall, when made, become the property of
Landlord and shall remain upon the Premises at the expiration or earlier termination of this Lease.

 

(d)
Tenant shall make the following items of repair/maintenance
to the Premises within six (6) months of the Lease Date: (i) repair or replace the areas of the carpet that are wrinkled, bubbled
up or overlapping; (ii) repair the outside concrete stairs that are worn, cracked or damaged; (iii) repair or replace floor tiles
in the IT room that are lifting, worn, cracked or in need of replacement; and (iv) remove or replace the electrical panel box
in the electrical room that is blown or has black marks on exterior. Tenant shall provide Landlord with evidence that the above
items have been repaired or replaced within the time period set forth above. In the event Tenant fails to provide such evidence,
then Landlord may, but shall not be obligated to, perform such repairs and/or replacements and charge the cost thereof, plus an
administrative fee in the amount of fifteen percent (15%) of the cost thereof, to Tenant as additional Rent, which amount shall
be due and payable to Landlord with the next installment of Rent due hereunder.

 

6.
USE OF PREMISES.

 

(a)
Tenant shall use the Premises only for general
office, warehouse, shipping and all related and ancillary purposes and for no other purposes. Tenant shall comply with all laws,
ordinances, orders, regulations or zoning classifications of any lawful governmental authority, agency or other public or private
regulatory authority having jurisdiction over the Premises. Without limiting the generality of the foregoing, if Premises or the
Building must be modified or any other action relating to the Premises or the Building must be undertaken in the future to comply
with the Americans With Disabilities Act (the “ADA”) or any similar federal, state or local statute, law or
ordinance, then Tenant shall be solely responsible for such modification or action (including the payment of all costs incurred
in connection therewith). Tenant shall not do any act or follow any practice relating to the Premises which shall constitute a
nuisance or detract in any way from the reputation of the Building. Tenant’s duties in this regard shall include allowing
no noxious or offensive odors, fumes, gases, smoke, dust, steam or vapors, or any loud or disturbing noise or vibrations to originate
in or emit from the Premises, provided that any of the foregoing related to the normal and customary operation of the Premises
for the use permitted above shall not be deemed to violate this Paragraph 6(a).

 

    	 	4	 

    	 

    

 

(b)
Without limiting the generality of Paragraph
6(a) above, and excepting only office supplies, commercial supplies and cleaning materials used by Tenant in its ordinary
day to day business operations (but not held for sale, storage or distribution) customarily used in office buildings, and then
only to the extent same are used, stored (but not any bulk storage), transported, and disposed of strictly in accordance with
all applicable laws, regulations and manufacturer’s recommendations, the Premises shall not be used for the treatment, storage,
transportation to or from, use or disposal of toxic or hazardous wastes, petroleum products, materials, or substances, or any
other substance that is prohibited, limited or regulated by any governmental or quasi-governmental authority or that, even if
not so regulated, could or does pose a hazard to health and safety of the occupants of the Building or surrounding property.

 

(c)
Tenant hereby represents and warrants to Landlord
that, to the best of Tenant’s knowledge, as of the date of delivery of the Premises, the Premises shall be in compliance
with all applicable environmental laws, regulations, statutes and other legal requirements.

 

(d)
Tenant has previously been furnished with a copy
of any applicable restrictive covenants relating to the Premises, and Tenant shall abide by these restrictions in connection with
its use of the Premises.

 

(e)
Tenant shall exercise due care in its use and
occupancy of the Premises and shall not commit or allow waste to be committed on any portion of the Premises; and at the expiration
or earlier termination of this Lease, Tenant shall deliver the Premises to Landlord in substantially the same condition in which
the Premises existed on the Commencement Date, ordinary wear and tear, fire or other casualty, and acts of God alone excepted.

 

(f)
The construction, operation, design, appearance,
location, installation, and any other matters related to Tenant’s signage for the Premises shall be subject to Landlord’s
approval, which shall not be unreasonably withheld, conditioned or delayed.

 

(g)
Tenant shall, continuously and uninterruptedly
from and after its initial opening for business, (i) operate and conduct within the Premises the business that Tenant is permitted
to operate and conduct under the provisions of this Lease, except while the Premises are untenantable by reason of fire or other
casualty or for other reasons beyond the reasonable control of Tenant and (ii) keep the Premises in a neat, clean and orderly
condition.

 

    	 	5	 

    	 

    

 

(h)
Tenant shall save Landlord harmless from any
claims, liabilities, penalties, fines, costs, expenses or damages resulting from the failure of Tenant to comply with the provisions
of this Paragraph 6. This indemnification shall survive the termination or expiration of this Lease.

 

7.
TAXES.

 

(a)
Tenant shall pay any taxes, documentary stamps
or assessments of any nature imposed or assessed upon this Lease, Tenant’s occupancy of the Premises or Tenant’s trade
fixtures, equipment, machinery, inventory, merchandise or other personal property located on the Premises and owned by or in the
custody of Tenant, including, without limitation, Tenant’s FF&E, as promptly as all such taxes or assessments may become
due and payable without any delinquency. Tenant shall provide Landlord with copies of all paid receipts respecting such tax or
charge upon request by Landlord.

 

8.
TENANT’S INSURANCE. Tenant shall
at all times during the Term maintain in full force and effect, at Tenant’s sole cost and expense, the following insurance
covering the Premises.

 

(a)
Commercial general liability insurance for any
occurrence resulting in bodily or personal injury to or the death of any person or more than one person, or for damage to property,
and consequential damages arising therefrom, in the amount of at least Three Million and 00/100 Dollars ($3,000,000.00) combined
single limit per occurrence/aggregate (and which specifically provides for an extension of coverage for liquor or “dram
shop” liability, if Tenant sells or serves alcoholic beverages in the Premises). Said insurance shall be written on an “occurrence”
basis and not on a “claims made” basis. Landlord shall have the right, exercisable by giving written notice thereof
to Tenant, to require Tenant to increase such limit if, in Landlord’s reasonable judgment, the amount thereof is insufficient
to protect Landlord from judgments which might result from such claims, demands or actions. Tenant shall use its good faith efforts
to cause its liability insurer to insure Landlord, Landlord’s agents, employees, partners, officers, and directors and any
mortgagee (“Landlord’s Protected Parties”) as “additional insureds.” Tenant shall cause its
liability insurance to include contractual liability coverage fully covering the indemnity provisions set forth herein. Notwithstanding
the above, such liability insurance may be in the amount of One Million and 00/100 Dollars ($1,000,000.00) combined single limit
per occurrence, and Two Million and 00/100 Dollars ($2,000,000.00) annual aggregate, for any policy year that Tenant carries umbrella
insurance coverage of at least $3,000,000, as evidenced to Landlord, provided (i) such umbrella policy contains a “per location
aggregate” endorsement, and (ii) the requirements set forth in this Section are otherwise satisfied.

 

(b)
Workers’ Compensation Insurance with Employers’
Liability limits of $100,000.00 Each Accident, $100,000.00 Disease-Each Employee, and $500,000.00 Disease-Policy Limit, or such
higher limits as may be required by applicable Governmental Regulations.

 

(c)
Insurance covering work done by Tenant, if any,
and any alterations or modifications to the Premises performed by Tenant after the Commencement Date, and all trade fixtures,
signs, plate glass, floor covering, decorative items, furniture, furnishings, machinery, equipment and merchandise in the Premises,
to the extent of one hundred percent (100%) of the replacement cost thereof, under a policy covering “all risks” of
direct physical loss as insured against under Special Form (“all risk” coverage) with endorsement for business interruption
with extended indemnity for twelve (12) months, and coverage for sprinkler leakage liability.

 

    	 	6	 

    	 

    

 

(d)
Insurance covering the Premises, excluding work
done by Tenant, if any, and any alterations or modifications to the Premises performed by Tenant after the Commencement Date,
and further excluding foundations, to the extent of not less than one hundred percent (100%) of the replacement cost of such building
and improvements located thereon, with an agreed amount endorsement, against all casualties provided by the Standard Fire and
Extended Coverage Policy and covering all other risks of direct physical loss as insured against under Special Form (“all
risks” coverage) with endorsement for rental income insurance for twelve (12) months, with an extended period of indemnity
as deemed commercially reasonable by Landlord. Landlord shall be named as the insured and all proceeds of insurance shall be payable
to Landlord.

 

(e)
All of the aforesaid insurance shall be in responsible
companies reasonably acceptable to Landlord. The insurer and the form, substance and amount (where not stated above) shall be
satisfactory from time to time to Landlord and any mortgagee of Landlord, shall specifically show that the required liquor liability
coverage is included, if applicable, and shall unconditionally provide that it is not subject to cancellation or non-renewal,
except after at least thirty (30) days’ prior written notice to Landlord and any mortgagee of Landlord. Originals of Tenant’s
insurance policies (or certificates thereof satisfactory to Landlord, together with satisfactory evidence of payment of the premiums
thereon), shall be deposited with Landlord prior to Tenant’s possession of the Premises and renewals thereof not less than
thirty (30) days prior to the end of the terms of such coverage. All insurance, property damage or other casualty policies shall
be written as primary policies, not contributory with or secondary to coverage that Landlord may carry.

 

(f)
If at any time during the Term of this Lease,
Tenant owns or rents more than one location, the policy shall contain an endorsement to the effect that the aggregate limit in
the policy shall apply separately to each location owned or rented by Tenant.

 

(g)
Notwithstanding anything to the contrary contained
in this Lease, Landlord and Tenant hereby waive any rights each may have against the other on account of any loss or damage occasioned
to Landlord or Tenant, as the case may be, their respective property, the Premises, its contents or to the other portions of the
Premises, arising from any risk covered by “Special Form” fire and extended coverage insurance of the type and amount
required to be carried hereunder. Landlord and Tenant hereby grant to each other on behalf of any insurer providing the insurance
to either of them described herein, a waiver of any right of subrogation which any such insurer may acquire against the other
or against the officers, directors, employees, agents, partners and representatives of the other by virtue of payment of any loss
under such insurance. Any insurance policy carried by Tenant pursuant to the terms hereof shall contain an endorsement waiving
the insurer’s right of subrogation against Landlord. Notwithstanding any provisions in this Lease to the contrary, Landlord
shall never be liable to Tenant or any Tenant party to the extent such liability is covered or would be covered by a policy of
insurance actually maintained, or required by the terms of this Lease to be maintained, by Tenant.

 

    	 	7	 

    	 

    

 

9.
LANDLORD’S COVENANT TO REPAIR AND REPLACE

 

(a)
This is an absolute net lease. Landlord shall
have no duty or obligation for any repairs, maintenance or replacement of any part of the Premises or any of the systems or components
located thereon or therein.

 

(b)
Landlord shall not incur any liability to Tenant
by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, replacements,
alterations or improvements to any portion of the Building or the Premises, or to fixtures, appurtenances and equipment therein.

 

10.
TENANT’S COVENANT TO REPAIR, REPLACE,
AND MAINTAIN.

 

(a)
Tenant shall be responsible for the repair, replacement and maintenance in good order and condition of all parts and components
of the Premises, including, without limitation, the structural components, roof, building systems, exterior parking lot and parking
lot and exterior lighting, access drives and landscaping improvements (including turf areas) on the Premises, the plumbing, wiring,
electrical systems, HVAC system, glass and plate glass, exterior operating and maintenance costs, and the equipment and machinery
constituting fixtures and all other items of the Premises.

 

(b)
Tenant shall contract for the regular removal of trash from the Premises and the cleaning of any grease traps serving the Premises.

 

(c)
Tenant’s duty to maintain the HVAC system shall specifically include the duty to enter into and maintain at Tenant’s
sole expense during the entire Term of this Lease a contract(s) for the routine and periodic maintenance and regular inspection
of such HVAC system, the replacement of filters as recommended and the performance of other recommended periodic servicing in
accordance with applicable manufacturer’s standards and recommendations. Such contract (i) shall be with a reputable contractor
reasonably satisfactory to Landlord; (ii) shall satisfy the requirements for routine and periodic maintenance, if any, necessary
to keep all applicable manufacturer’s warranties in full force and effect; and (iii) shall provide that if this Lease expires
or is earlier terminated for any reason whatsoever, then said contract may be immediately terminable by Landlord or Tenant without
any cost, expense or other liability on the part of Landlord.

 

(d)
If Tenant fails to commence performance of any maintenance or repair work required of Tenant hereunder to any improvements or
other portions of the Premises which are visible from the exterior of the Building within thirty (30) days after written notice
of the need for such maintenance or repair from Landlord, or in any case where Tenant has commenced such work but failed to complete
the same within sixty (60) days thereafter (or such longer period as may be reasonably required), then Landlord may enter upon
the Premises and perform such maintenance and repair work or complete the same, as the case may be, whereupon all expenses reasonably
incurred by Landlord in performing such work, together with a ten percent (10%) overhead and management fee, shall be paid by
Tenant upon written demand therefor by Landlord.

 

    	 	8	 

    	 

    

 

11.
TRADE FIXTURES AND EQUIPMENT. Tenant’s
FF&E shall remain Tenant’s personal property and Tenant shall have the right at any time during the Term of this Lease
to remove any or all of Tenant’s FF&E. Upon removal of Tenant’s FF&E, Tenant shall immediately restore the
Premises to substantially the same condition as they were when received by Tenant, ordinary wear and tear, fire or other casualty,
and acts of God excepted. Any trade fixtures or equipment not removed by Tenant at the expiration or an earlier termination of
the Lease shall become, at Landlord’s sole election, either (i) the property of Landlord, in which event Landlord shall
be entitled to handle and dispose of same in any manner Landlord deems fit without any liability or obligation to Tenant or any
other third party with respect thereto, or (ii) subject to Landlord’s removing such property from the Premises and storing
same, all at Tenant’s expense and without any recourse against Landlord with respect thereto. Without limiting the generality
of the foregoing, the following property shall in no event be deemed to be “trade fixtures” and Tenant shall not remove
any such property from the Premises under any circumstances, regardless of whether installed by Landlord or Tenant: (a) any air
conditioning, air ventilating or heating fixtures or equipment used to service the Building; (b) any dock levelers; (c) any carpeting
or other permanent floor coverings; (d) any paneling or other wall coverings; (e) plumbing fixtures and equipment; or (f) permanent
shelving.

 

12.
UTILITIES. Tenant shall pay for all utilities
or services related to its use of the Premises, including, without limitation, electricity, gas, heat, water, sewer, telephone
and janitorial services. Landlord shall not be responsible for the stoppage or interruption of utilities services other than as
required by its limited covenant to repair and replace set forth above, and Landlord not be liable for any damages caused by or
from the plumbing and sewer systems serving the Premises.

 

13.
DAMAGE OR DESTRUCTION OF PREMISES.

 

(a)
If the Premises are totally destroyed by storm,
fire, lightning, earthquake or other casualty, Landlord shall have the right to terminate this Lease on written notice to Tenant
within thirty (30) days after such destruction and this Lease shall terminate as of the date of such destruction and rental shall
be accounted for as between Landlord and Tenant as of the date of destruction.

 

(b)
If the Premises are damaged but not wholly destroyed
by and such casualties or if the Landlord does not elect to terminate the Lease under Paragraph 13(a) above, Landlord shall
commence or cause to be commenced reconstruction of the Premises within one hundred twenty (120) days after such occurrence and
prosecute the same diligently to completion, not to exceed two hundred seventy (270) days from the date of the occurrence. In
the event Landlord shall fail to substantially complete reconstruction of the Premises within said two hundred seventy (270) day
period, Tenant shall have the right, as its sole remedy, to terminate this Lease.

 

(c)
In the event of any casualty at the Premises
during the last year of the Term, including during the last year of any extension Term, Landlord and Tenant each shall have the
option to terminate this Lease on written notice to the other of exercise thereof within sixty (60) days after such occurrence.

 

(d)
In the event of reconstruction of the Premises,
Tenant shall continue the operation of its business in the Premises during any such period to the extent reasonably practicable
from the standpoint of prudent business management and the obligation of Tenant to pay rent and any other sums due under this
Lease shall remain in full force and effect during the period of reconstruction. The Minimum Rental shall be abated proportionately
with the degree to which Tenant’s use of the Premises is impaired, commencing from the date of destruction and continuing
during the period of such reconstruction. Tenant shall not be entitled to any compensation or damages from landlord for loss of
use of the whole or any part of the Premises, Tenant’s personal property, or any inconvenience or annoyance occasioned by
such damage, reconstruction or replacement.

 

    	 	9	 

    	 

    

 

(e)
In the event of the termination of this Lease
under any provisions of this Paragraph 13, both Landlord and Tenant shall be released from any liability or obligation
under this Lease arising after the date of termination, except for such liability or obligation for which this Lease expressly
provides shall survive the termination thereof.

 

14.
MUTUAL WAIVER OF SUBROGATION. For the
purpose of waiver of subrogation, the parties (for themselves and their insurers) mutually release and waive unto the other all
rights to claim damages, costs or expenses for any injury to property caused by a casualty of any type whatsoever in, on or about
the Premises if the amount of such damage, cost or expense has been paid to such damaged party under the terms of any policy of
insurance, as such is more specifically set forth herein above.

 

15.
INDEMNIFICATION.

 

(a)
Tenant shall indemnify and save Landlord harmless
against any and all claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including
without limitation reasonable attorneys’ fees) arising out of injury to persons (including death) or property occurring
in, on or about the Premises by any cause whatsoever, except if exclusively caused by the grossly negligent act(s) or omission(s)
on the part of Landlord, its agent(s) or employee(s). Tenant shall give Landlord immediate notice of any such happening causing
injury to persons or property.

 

(b)
Landlord shall indemnify and save Tenant harmless
against any and all claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including
without limitation reasonable attorneys’ fees) arising out of injury to persons (including death) or property occurring
in, on or about the Premises if caused or occasioned by any grossly negligent act(s) or omission(s) of Landlord, its agent(s)
or employee(s), except if caused by any act(s) or omission(s) on the part of Tenant, its agent(s), contractor(s), employee(s),
invitee(s), licensee(s), servant(s), subcontractor(s) or subtenant(s).

 

16.
LANDLORD’S RIGHT OF ENTRY. Landlord,
and those persons authorized by it, shall have the right to enter the Premises at all reasonable times and upon reasonable notice
for the purposes of making repairs, making connections, installing utilities, providing services to the Premises, making inspections
or showing the same to prospective purchasers and/or lenders, as well as at any time in the event of emergency involving possible
injury to property or persons in or around the Premises. Further, during the last twelve (12) months of the Term, Landlord and
those persons authorized by it shall have the right at reasonable times and upon reasonable notice to show the Premises to prospective
tenants. Landlord shall use reasonable efforts to minimize interference with Tenant’s business operations on the Premises
during the period of any such entry, including without limitation making it clear in any signage or showings that the property
may be for sale or lease, but not the business of Tenant.

 

    	 	10	 

    	 

    

 

17.
EMINENT DOMAIN. If any substantial portion,
consisting of twenty five percent (25%) or more of the square footage of the Building, of the Premises is taken under the power
of eminent domain (including any conveyance made in lieu thereof) and such taking shall materially impair the normal operation
of Tenant’s business, then either party shall have the right to terminate this Lease by giving written notice of such termination
within thirty (30) days after notice of such taking. If neither party elects to terminate this Lease, Landlord, to the extent
of such award received by Landlord, shall repair and restore the Premises (to the extent possible) to substantially the same condition
as the Premises existed immediately prior to such taking and the Annual Rental and any other sums due hereunder shall be reduced
in proportion to any reduction in the square footage of the Building as a result of such taking. All compensation awarded for
any taking (or the proceeds of a private sale in lieu thereof) shall be the property of Landlord and Tenant hereby assigns all
of its interest in any such award to Landlord; provided, however, Landlord shall not have any interest in any separate award made
to Tenant for loss of business, moving expense or the taking of Tenant’s property, trade fixtures or equipment if a separate
award for such items is made to Tenant and if such separate award does not reduce the award to Landlord.

 

18.
EVENTS OF DEFAULT AND REMEDIES.

 

(a)
In addition to the other provisions of this Lease
and not in limitation thereof, the occurrence of any of the following shall constitute an “Event of Default” hereunder.

 

(i)
Failure of Tenant to pay Annual Rental, Minimum
Rental, Additional Rent, or any other charges due under this Lease and such failure continues for three (3) days after Tenant’s
receipt of written notice of such failure from Landlord (provided, if Tenant fails to pay any such charges when due two times
within any Lease Year, and Landlord has given Tenant such 3-day notice for Tenant’s two failures, it shall be a default
under the Lease for Tenant thereafter in such Lease Year to fail to pay when due, and Landlord shall not be required to give any
notice of such failure).

 

(ii)
Failure of Tenant to observe and perform any
other obligation in this Lease and continued failure for thirty (30) days after Landlord gives written notice of such failure,
or if the nature of such failure is such that it is capable of being cured but cannot be cured within thirty (30) days, within
such additional period of time reasonably required by Tenant to cure the same, provided that Tenant commences the cure of such
default within such thirty (30) day period and diligently pursues such cure to completion.

 

(iii)
Abandonment or vacation of the Premises by Tenant.

 

(iv)
Failure to carry and maintain any policy of insurance
required herein.

 

(v)
Filing of a petition by Tenant for adjudication
as a bankrupt debtor or insolvent, or for its reorganization or for the appointment of a receiver or trustee of Tenant’s
property; an assignment by Tenant for the benefit of creditors; or the taking possession of Tenant’s property by any governmental
office or agency pursuant to statutory authority for the dissolution or liquidation of Tenant. If any involuntary proceeding of
any type referred to in this Section is instituted against Tenant and is not dismissed within sixty (60) days thereafter the same
shall be considered an Event of Default.

 

    	 	11	 

    	 

    

 

(b)
At any time following the occurrence of an Event
of Default as hereinabove set forth, without limiting Landlord in the exercise of any other remedy contained elsewhere in this
Lease, at law, in equity, or otherwise, and without any demand or notice whatsoever:

 

(i)
Landlord may terminate this Lease by giving Tenant
notice of termination, in which event this Lease shall expire and terminate on the date specified in such notice of termination
with the same force and effect as though the date so specified were the date herein originally fixed as the termination date of
the Term, and all rights of Tenant under this Lease and in and to the Premises shall expire and terminate and Tenant shall remain
liable for all obligations under this Lease arising up to the date of such termination (and for those obligations of Tenant which
are to survive any such termination by their express terms), and Tenant shall surrender the Premises, including any and all improvements,
to Landlord on the date specified in such notice, and if Tenant fails to so surrender Landlord shall have the right, without notice,
to enter upon and take possession of the Premises and to expel or remove Tenant and its effects without being liable for prosecution
or any claim for damages therefor.

 

(ii)
Landlord may terminate this Lease and recover
from Tenant all damages Landlord may incur by reason of Tenant’s default, including, without limitation, a sum which, at
the date of such termination represents the then value of the excess, if any, of the whole Annual Rental, Minimum Rental, and
all other sums and charges which would have been payable hereunder as Additional Rent by Tenant for the period commencing with
the day following the date of such termination and ending with the expiration date of the Term, over the aggregate reasonable
rental value of the Premises for the same period, plus the sum of the following: (A) the costs of recovering the Premises and
all other expenses incurred by Landlord due to Tenant’s default, including, without limitation, reasonable attorneys’
fees, (B) the unpaid rent earned as of the date of termination plus interest at the rate of eight percent (8%) or the highest
rate allowed by law, whichever is greater, (C) other sums of money and damages owing on the date of termination by Tenant to Landlord
under this Lease or in connection with the Premises, and (D) that amount of money equal to twenty four (24) monthly installments
of the Annual Rental, Minimum Rental and all other sums, payable on the date of such termination, all of which shall be deemed
immediately due and payable. The payment of the amount calculated in this Section shall not be deemed a penalty but shall merely
constitute payment of liquidated damages, it being understood and acknowledged by Landlord and Tenant that actual damages to Landlord
are extremely difficult, if not impossible, to ascertain. In determining the fair market rental value of the Premises as provided
herein, the parties hereby agree that, at the time Landlord seeks to enforce this remedy, all relevant factors should be considered,
including, but not limited to, (1) the length of time remaining in the Term, (2) the then current market conditions in the general
area in which the Premises is located, (3) the likelihood of reletting the Premises for a period of time equal to the remainder
of the Term, (4) the net effective rental rates then being obtained by landlords for similar type space of similar size in similar
type buildings in the general area in which the Premises is located, (5) the vacancy levels in the general area in which the Premises
is located, (6) current levels of new construction that will be completed during the remaining Term and how this construction
will likely affect vacancy rates and rental rates, and (7) inflation.

 

    	 	12	 

    	 

    

 

(iii)
Without terminating this Lease, Landlord may
declare immediately due and payable the present value (using a discount rate of the lower of eight percent (8%) or the rate of
interest then payable on currently-issued United States Treasury Bills or Notes having a maturity date, at the time of the default,
closest to the scheduled expiration date of the Term) of the whole Rental and all other sums and charges which would have been
payable hereunder as Additional Rent by Tenant for the period commencing with the day following the date of such termination and
ending with the expiration date of the Term, together with the cost of recovering the Premises and all other expenses incurred
by Landlord in connection with Tenant’s default, plus the unpaid rent earned as of the date of termination, plus interest
at the rate of eight percent (8%) or the highest rate allowed by law, whichever is greater, plus all other sums of money and damages
owing by Tenant to Landlord under this Lease or in connection with the Premises; provided, however, that such payments shall not
be deemed a penalty or liquidated damages, but shall merely constitute payment in advance of all Rental and Additional Rent payable
hereunder throughout the Term. Upon making such payment, Tenant shall be entitled to receive from Landlord all rents received
by Landlord from other assignees, tenants, and subtenants on account of said Premises during the stated Term of this Lease provided
that the monies to which Tenant shall so become entitled shall in no event exceed the entire amount actually paid by Tenant to
Landlord pursuant to the preceding sentence less all costs, expenses and reasonable attorneys’ fees of Landlord incurred
in connection with the reletting of the Premises. Such sum shall, at the option of Landlord, be immediately due and payable upon
notice to Tenant as if by the terms of this Lease they were payable in advance; and Landlord may immediately proceed to distrain,
collect, or bring action for the amount due hereunder or such part thereof as being in arrears, or may file a proof of claim in
any bankruptcy or insolvency proceedings whether similar to the foregoing or not, to enforce payment thereof.

 

(iv)
Without terminating this Lease, and with or without
notice to Tenant, Landlord may in its own name or as agent for Tenant enter into and upon and take possession of the Premises
or any part thereof, and, at Landlord’s option, remove persons and property therefrom and such property, if any, may be
removed and stored in a warehouse or elsewhere at the cost of, and for the account of Tenant, all without being deemed guilty
of trespass or becoming liable for any loss or damage which may be occasioned thereby, and Landlord may rent the Premises or any
portion thereof as the agent of Tenant, with or without advertisement, by private negotiations and for any term upon such terms
and conditions as Landlord may deem necessary or desirable, in Landlord’s sole discretion. Landlord shall in no way be responsible
or liable for any failure to rent the Premises or any part thereof, or for any failure to collect any rent due upon such reletting.
Upon each such reletting, all rentals received by Landlord from such reletting shall be applied: first, to the payment of any
indebtedness (other than any rent due hereunder) from Tenant to Landlord; second, to the payment of any costs and expenses of
such reletting, including, without limitation, brokerage fees and reasonable and actual attorneys’ fees and costs of alterations
and repair; third, to the payment of rent and other charges then due and unpaid hereunder; and the residue, if any, shall be held
by Landlord to the extent of and for application in payment of future rent, if any becomes owing, as the same may become due and
payable hereunder. In reletting the Premises as aforesaid, Landlord may grant rent concessions and Tenant shall not be credited
therefor. If such rentals received from such reletting shall at any time or from time to time be less than sufficient to pay to
Landlord the entire sums then due from Tenant hereunder. Tenant shall pay any such deficiency to Landlord. Such deficiency shall,
at Landlord’s option, be calculated and paid monthly. Notwithstanding any such reletting without termination, Landlord may
at any time thereafter elect to terminate this Lease for any such previous default.

 

    	 	13	 

    	 

    

 

(v)
Without terminating this Lease, and with or without
notice to Tenant, Landlord may enter into and upon the Premises and without being liable for prosecution or any claim for damages
therefor, maintain the Premises and repair or replace any damage thereto or do anything for which Tenant is responsible hereunder.
Tenant shall reimburse Landlord immediately upon demand for any expenses which Landlord incurs in thus effecting Tenant’s
compliance under this Lease, and Landlord shall not be liable to Tenant for any damages with respect thereto.

 

(vi)
Without liability to Tenant or any other party
and without constituting a constructive or actual eviction, Landlord may suspend or discontinue furnishing or rendering to Tenant
any property, material, labor, utilities or other service, wherever Landlord is obligated to furnish or render the same, so long
as Tenant is in default under this Lease.

 

(vii)
Landlord may allow the Premises to remain unoccupied
and collect rent from Tenant as it comes due.

 

(viii)
Landlord may foreclose any security interest
in the property of Tenant which Landlord may have under the laws of the State of Georgia or under this Lease, including the immediate
taking of possession of all property on or in the Premises.

 

(c)
Landlord and Tenant further agree as follows:

 

(i)
Tenant agrees to reimburse Landlord for all of
Landlord’s expenses, including but not limited to reasonable attorneys’ fees in enforcing or attempting to enforce
any of Tenant’s obligations in this Lease and if Landlord shall notify Tenant of Tenant’s default under this Lease
more than two (2) times in any Lease Year, Tenant shall be assessed a default fee of One Thousand and 00/100 Dollars ($1,000.00)
to cover the administrative costs associated with giving such notices.

 

(ii)
Tender of rent or other charges due after legal
action has been commenced against Tenant for nonpayment of rent shall not be a defense to such action, and Tenant hereby waives
its rights under O.C.G.A. § 44-7-52 to the contrary.

 

(iii)
TO THE EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD
AND TENANT (AND ANY PARTY CLAIMING BY, THROUGH OR UNDER TENANT) HEREBY MUTUALLY WAIVE ANY AND ALL RIGHTS WHICH EITHER MAY HAVE
TO REQUEST A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF THIS LEASE OR TENANT’S OCCUPANCY OF OR
RIGHT TO OCCUPY THE PREMISES.

 

(iv)
Tenant further agrees that in the event Landlord
commences any summary proceeding for nonpayment of rent or possession of the Premises, Tenant will not interpose and hereby waives
all right to interpose any counterclaim of whatever nature in any such proceeding. Tenant further waives any right to remove said
summary proceeding to any other court or to consolidate said summary proceeding with any other action, whether brought prior or
subsequent to the summary proceeding.

 

    	 	14	 

    	 

    

 

(v)
No reference to any specific right or remedy
in this Lease shall preclude Landlord from exercising any other right or from having any other remedy or from maintaining any
action or proceeding to which it may otherwise be entitled at law or in equity or both. The rights and remedies given to Landlord
in this Lease are distinct, separate and cumulative remedies, and none of them, whether or not exercised by Landlord, shall be
deemed to be in exclusion of any of the others. Tenant recognizes in the event of a breach or threatened breach by Tenant of any
of the agreements, conditions, covenants, or terms hereof, that Landlord may suffer irreparable damages which are not capable
of being definitely ascertained, therefore Landlord shall have the right of injunction to enjoin the same and the right to invoke
any other remedy allowed by law or in equity (or both) whether or not other remedies are herein provided.

 

(d)
Upon the occurrence of a default on the part
of Landlord in any of its duties and/or obligations as set forth under this Lease, and such default continuing for a period of
thirty (30) days after written notice thereof from Tenant to Landlord (or if the nature of such default is such that it is capable
of being cured but cannot be cured in thirty (30) days, within such additional period of time reasonably required by Landlord
to cure the same, provided that Landlord commences the cure of such default within such 30-day period and diligently pursues such
cure to completion), Tenant, as its sole and exclusive remedy, shall have the right to perform the obligations of Landlord and
charge Landlord for the reasonable cost of such obligations.

 

19.
SUBORDINATION. This Lease is subject and
subordinate to any and all mortgages or deeds of trust now or hereafter placed on the property of which the Premises are a part,
and this clause shall be self-operative without any further instrument necessary to effect such subordination; however, if requested
by Landlord, Tenant shall promptly execute and deliver to Landlord any such certificate(s) as Landlord may reasonably request
evidencing subordination of this Lease to or the assignment of this Lease as additional security for such mortgages or deeds of
trust. Notwithstanding anything to the contrary in this Lease, in no event shall Tenant be subordinate or subject to the lien
of any mortgage, nor shall Tenant be obligated to attorn to any holder thereof, unless and until such holder shall have agreed
in writing, and shall be bound thereby, to honor all of Tenant’s rights under this Lease, including Tenant’s rights
of quiet and exclusive use and enjoyment of the Premises, so long as Tenant is not in default hereunder. Landlord will cause to
be furnished to Tenant, on the Lease Date, a subordination, nondisturbance and attornment agreement from any lender holding a
mortgage, deed of trust or deed to secure debt on the Premises as of the Lease Date, in form reasonably acceptable to Tenant,
which shall be filed of record in the local land records of Forsyth County, Georgia. Tenant shall continue its obligations under
this Lease in full force and effect notwithstanding any such default proceedings under a mortgage or deed of trust and shall attorn
to the mortgagee, trustee or beneficiary of such mortgage or deed of trust, and their successors or assigns, and to the transferee
under any foreclosure or default proceedings. Tenant will, upon request by Landlord, execute and deliver to Landlord or to any
other person designated by Landlord, any instrument or instruments required to give effect to the provisions of this paragraph.

 

    	 	15	 

    	 

    

 

20.
ASSIGNMENT AND SUBLETTING.

 

(a)
Tenant shall not assign, mortgage, pledge or
encumber this Lease, the Premises, or any interest in the whole or in any portion thereof, directly or indirectly, without the
prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however,
and notwithstanding anything to the contrary contained herein, Tenant shall be permitted to assign this Lease, without the consent
of Landlord, (i) to a corporation into which Tenant may merge, which Tenant may acquire, or which Tenant may consolidate with,
(ii) to any parent, subsidiary or affiliate of Tenant, or (iii) to a purchaser of substantially all of Tenant’s assets or
a controlling interest in the outstanding voting stock of Tenant. If Tenant makes any such assignment, mortgage, pledge or encumbrance
with Landlord’s written consent or as otherwise allowed herein, Tenant will still remain primarily liable for the performance
of all terms of this Lease, unless otherwise agreed by Landlord and Tenant. Landlord’s consent to one assignment will not
waive the requirement of its consent to any subsequent assignment as required herein.

 

(b)
Tenant shall have the right to sublease any portion
of the Premises without Landlord’s consent provided that: (i) the Tenant shall remain liable for each and every obligation
of Tenant set forth in this Lease; (ii) Tenant shall be responsible for any breaches or actions or inactions of each and every
subtenant; and (iii) the insurance policies required herein shall remain applicable to the entire Premises, including any subleased
portions thereof. Tenant shall furnish to Landlord, from time to time, a copy of any subleases affecting the Premises after the
same are executed and delivered, so that Landlord is apprised of the occupants of the Premises at all times.

 

21.
TRANSFER OF LANDLORD’S INTEREST.
If Landlord shall sell, assign or transfer its interest in the Premises or in this Lease to a successor in interest which expressly
assumes the obligations of Landlord hereunder, then Landlord shall thereupon be released or discharged from all covenants and
obligations hereunder, except those obligations that have accrued prior to such sale, and Tenant shall look solely to such successor
in interest for performance of all of Landlord’s obligations. Tenant’s obligations under this Lease shall in no manner
be affected by Landlord’s sale, assignment, or transfer and Tenant shall thereafter attorn and look solely to such successor
in interest as the Landlord hereunder.

 

22.
COVENANT OF QUIET ENJOYMENT. Landlord
represents that it has full right and authority to lease the Premises and Tenant shall peacefully and quietly hold and enjoy the
Premises for the full Term hereof so long as Tenant does not default in the performance of any of the terms hereof.

 

23.
ESTOPPEL CERTIFICATES. Within ten (10)
days after a written request by Landlord, Tenant shall deliver a written estoppel certificate, in form supplied by or acceptable
to Landlord, certifying any facts that are then true with respect to this Lease, including without limitation that this Lease
is in full force and effect, that no default exists on the part of Landlord or Tenant, that Tenant is in possession, that Tenant
has commenced the payment of rent, and that Tenant claims no defenses or offsets with respect to payment of rentals under this
Lease. Likewise, within ten (10) days after a request by Tenant, Landlord shall deliver to Tenant a similar estoppel certificate
covering such matters as are reasonably required by Tenant.

 

    	 	16	 

    	 

    

 

24.
PROTECTION AGAINST LIENS. Tenant shall
do all things necessary to prevent the filing of any mechanics’, materialmen’s or other types of liens whatsoever,
against all or any part of the Premises by reason of any claims made by, against, through or under Tenant. If any such lien is
filed against the Premises, Tenant shall either cause the same to be discharged of record within thirty (30) days after filing
or, if Tenant in its discretion and in good faith determines that such lien should be contested, it shall furnish such security
as may be necessary to prevent any foreclosure proceedings against the Premises during the pendency of such contest. If Tenant
shall fail to discharge such lien within said time period or fail to furnish such security, then Landlord may at its election,
in addition to any other right or remedy available to it, discharge the lien by paying the amount claimed to be due or by procuring
the discharge by giving security or in such other manner as may be allowed by law. If Landlord acts to discharge or secure the
lien then Tenant shall immediately reimburse Landlord for all sums paid and all costs and expenses (including reasonable attorneys’
fees) incurred by Landlord involving such lien, together with interest on the total expenses and costs at the rate of eight percent
(8%) per annum.

 

25.
MEMORANDUM OF LEASE. If requested by Tenant,
Landlord shall execute a recordable memorandum of this Lease, prepared and recorded at Tenant’s expense, specifying the
exact Term of this Lease and such other terms as the parties shall mutually determine.

 

26.
FORCE MAJEURE. If Landlord or Tenant shall
be delayed, hindered or prevented from the performance of any act required hereunder, by reason of governmental restrictions,
scarcity of labor or materials, strikes, fire, or any other reasons beyond its reasonable control, then the performance of such
act shall be excused for the period of delay, and the period for performance of any such act shall be extended as necessary to
complete performance after the delay period. However, the provisions of this paragraph shall in no way be applicable to Tenant’s
obligations to pay Annual Rental or any other sums, monies, costs, charges or expenses required by this Lease.

 

27.
REMEDIES CUMULATIVE — NONWAIVER.
No reference to any specific right or remedy in this Lease shall preclude Landlord from exercising any other right or from having
any other remedy or from maintaining any action or proceeding to which it may otherwise be entitled at law or in equity or both.
The rights and remedies given to Landlord in this Lease are distinct, separate and cumulative remedies, and none of them, whether
or not exercised by Landlord, shall be deemed to be in exclusion of any of the others. Tenant recognizes in the event of a breach
or threatened breach by Tenant of any of the agreements, conditions, covenants, or terms hereof, that Landlord may suffer irreparable
damages which are not capable of being definitely ascertained, therefore Landlord shall have the right of injunction to enjoin
the same and the right to invoke any other remedy allowed by law or in equity (or both) whether or not other remedies are herein
provided.

 

Landlord’s
failure to insist upon a strict performance of any covenant of this Lease or to exercise any option or right herein contained
shall not be a waiver or relinquishment for the future of such covenant, right or option, or of the continuance of the failure
of Tenant, but the same shall remain in full force and effect. The receipt by Landlord of any rental or other charge due hereunder
with knowledge of the breach of any provision of this Lease shall not be deemed a waiver of such breach. No provision of this
Lease shall be deemed to have been waived unless waived in writing and signed by Landlord. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly payment of Annual Rental, Additional Rent or other charges due under this Lease shall
be deemed to be other than on account of the oldest rental then unpaid, and any endorsement or statement on any check or any letter
accompanying any check of payment of rental shall not be deemed an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord’s right to recover the balance of unpaid amounts or pursue any other remedy in
this Lease.

 

    	 	17	 

    	 

    

 

28.
HOLDING OVER. If Tenant remains in possession
of the Premises or any part thereof after the expiration of the Term of this Lease, whether with or without Landlord’s acquiescence,
Tenant shall be deemed only a tenant at will and there shall be no renewal of this Lease without a written agreement signed by
both parties specifying such renewal. The “monthly” rental payable by Tenant during any such tenancy at will period
shall be one hundred fifty percent (150%) of the monthly installments of Annual Rental payable during the final year immediately
preceding such expiration.

 

29.
NOTICES. Any notice allowed or required
by this Lease shall be deemed to have been sufficiently served if the same shall be in writing and hand delivered or placed in
the United States mail, via certified mail or registered mail, return receipt requested, with proper postage prepaid or by courier
delivery service or overnight delivery and addressed as follows:

 

	 	AS
    TO LANDLORD: 	Metrolina
    Alpharetta, LLC
	 	 	108
    Gateway Boulevard, Suite 104
	 	 	Mooresville,
    North Carolina 28117
	 	 	Attn:
    R. Joseph Jackson
	 	 	 
	 	AS
    TO TENANT: 	Ballantyne
    Strong, Inc.
	 	 	11422
    Miracle Hills Drive, Suite 300
	 	 	Omaha,
    Nebraska 68154
	 	 	Attn:
    Kyle Cerminara
	 	 	 
	 	with
    a copy to: 	Thompson
    Hine LLP
	 	 	3900
    Key Center, 127 Public Square
	 	 	Cleveland,
    Ohio 44114
	 	 	Attn:
    Thomas Coyne, Esq.

 

The
addresses of Landlord and Tenant and the party, if any, to whose attention a notice or copy of same shall be directed may be changed
or added from time to time by either party giving notice to the other in the prescribed manner.

 

30.
LEASING COMMISSION. Landlord and Tenant
represent and warrant each to the other that they have not dealt with any broker(s) or any other person claiming any entitlement
to any commission in connection with this transaction. Landlord and Tenant agree to indemnify and save each other harmless from
and against any and all claims, suits, liabilities, costs, judgments and expenses, including reasonable attorneys’ fees,
for any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of their respective
actions in connection with this Lease.

 

    	 	18	 

    	 

    

 

31.
MISCELLANEOUS.

 

(a)
Rules and Regulations. Landlord shall
have the right from time to time to prescribe commercially reasonable rules and regulations (the “Rules and Regulations”)
for Tenant’s use of the Premises and the Building; provided that (i) such Rules and Regulations shall not unreasonably interfere
with Tenant’s beneficial use and enjoyment of the Premises, and (ii) to the extent any such rules or regulations conflict
with the terms and conditions contained in this Lease, the terms and conditions contained in this Lease shall govern and prevail.
A copy of Landlord’s current Rules and Regulations respecting the Premises and the Building is attached hereto as Exhibit
B. Landlord shall provide reasonable notice of any changes to the Rules and Regulations. Tenant shall abide by and actively
enforce on all its employees, agents, invitees and licensees such regulations including without limitation rules governing parking
of vehicles in designated portions of the Premises.

 

(b)
Evidence of Authority. If requested by
Landlord, Tenant shall furnish appropriate legal documentation evidencing the valid existence and good standing of Tenant and
the authority of any parties signing this Lease to act for Tenant.

 

(c)
Limitation of Landlord’s Liability.
If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord’s part to be performed, and,
as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied solely
out of the proceeds of sale received upon execution of such judgment levied thereon against the right, title and interest of Landlord
in the Premises as the same may then be encumbered; and neither Landlord nor, if Landlord be a partnership, any of the partners
comprising Landlord shall have any personal liability for any deficiency. It is understood and agreed that in no event shall Tenant
or any person claiming by or through Tenant have the right to levy execution against any property of Landlord other than its interest
in the Premises as hereinbefore expressly provided.

 

(d)
Nature and Extent of Agreement. This Lease
and the exhibits, rider and addenda (if any) attached hereto, contain all covenants and agreements between Landlord and Tenant
relating in any manner to the rental, use, and occupancy of the Premises and the other matters set forth in this Lease. No prior
agreement or understanding pertaining to the same shall be valid or of any force or effect; and, the covenants and agreements
of this Lease cannot be altered, changed, modified or added to except in writing signed by Landlord and Tenant. No representation,
inducement, understanding or anything of any nature whatsoever made, stated or represented on Landlord’s behalf, either
orally or in writing (except as specifically contained in this Lease), has induced Tenant to enter into this Lease. The submission
of this document for examination does not constitute an offer to lease and this Lease becomes effective only upon execution and
delivery thereof by Landlord and Tenant. This Lease creates only the relationship of landlord and tenant between the parties,
and nothing herein shall impose upon either party any powers, obligations or restrictions not expressed herein. This Lease shall
be construed and governed by the laws of the state in which the Premises are located.

 

    	 	19	 

    	 

    

 

(e)
Binding Effect. This Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns. This Lease shall
not be binding on either party until executed by an authorized representative of both parties and delivered to the both parties.
No amendment or modification to this Lease shall be binding upon either party unless same is in writing and executed by an authorized
representative of both parties.

 

(f)
Captions and Headings. The captions and
headings in this Lease are for convenience and reference only, and they shall in no way be held to explain, modify, or construe
the meaning of the terms of this Lease.

 

(g)
Lease Review. The submission of this Lease
to Tenant for review does not constitute a reservation of or option for the Premises, and this Lease shall become effective as
a contract only upon execution and delivery by Landlord and Tenant. It is agreed that in the construction and interpretation of
the terms of this Lease the rule of construction that a document is to be construed most strictly against the party who prepared
the same shall not be applied, it being agreed that both parties hereto have participated in the preparation of the final form
of this Lease. This Lease shall be construed in accordance with and governed by the substantive laws of the State of Georgia.
If more than one person or entity shall sign this Lease as “Tenant”, then each such person or entity shall be jointly
and severally liable for the obligations of Tenant hereunder.

 

(h)
Attorneys’ Fees. If either Landlord
or Tenant institutes any action or proceeding against the other relating to the provisions of this Lease or any default hereunder,
the non-prevailing party in such action or proceeding shall reimburse the prevailing party for the reasonable expenses of attorneys’
fees and all costs and disbursements incurred therein by the prevailing party, including, without limitation, any such fees, costs
or disbursements incurred on any appeal from such action or proceeding. The prevailing party shall recover all such fees, costs
or disbursements as costs taxable by the court in the action or proceeding itself without the necessity for a cross-action by
the prevailing party.

 

32.
SEVERABILITY. If any term or provision
of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and
enforced to the fullest extent permitted by law notwithstanding the invalidity of any other term or provision hereof.

 

33.
REVIEW OF DOCUMENTS. If, following the
execution of this Lease, either party hereto requests that the other party execute any document or instrument that is other than
(a) a document or instrument the form of which is attached hereto as an exhibit, or (b) a document that solely sets forth
facts or circumstances that are then existing and reasonably ascertainable by the requested party with respect to this Lease (e.g.,
an estoppel certificate), then the party making such request shall be responsible for paying the reasonable out-of-pocket costs
and expenses, including without limitation, the attorneys’ fees, incurred by the requested party in connection with the
review (and, if applicable, the negotiations) related to such document(s) or instrument(s), regardless of whether such document(s)
or instrument(s) is (are) ever executed by the requested party. If the requesting party is Tenant, then all such costs and expenses
incurred by Landlord in connection with its review and negotiation of any such document(s) or instrument(s) shall be deemed to
be Additional Rent due hereunder and shall be payable by Tenant promptly upon demand.

 

34.
FINANCIAL INFORMATION. Tenant shall at
any time and from time to time at reasonable intervals during the Lease Term, within fifteen (15) days of written request by Landlord,
deliver to Landlord such financial information concerning Tenant and Tenant’s business operations as may be reasonably requested
by Landlord or any Mortgagee or prospective Mortgagee or purchaser of the Premises or any portion thereof. Such statement shall
be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be
audited by an independent certified public accountant.

 

[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

 

    	 	20	 

    	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Lease to be duly executed as of the Lease Date.

 

	 	LANDLORD:
	 	 	 
	 	METROLINA ALPHARETTA, LLC, a North Carolina limited liability company
	 	 	 
	 	By:	/s/ Robert
    J. Jackson
	 	Title:	Manager
	 	Name:	Robert J. Jackson

 

	 	TENANT:
	 	 	 
	 	BALLANTYNE STRONG, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:
     	/s/ D. Kyle
    Cerminara
	 	Title:
    	Chairman
    and CEO
	 	Name:	D. Kyle Cerminara

 

    	 	21	 

    	 

    

 

EXHIBIT
A

 

Legal
Description of the Land

 

All
that tract or parcel of land lying and being in Land Lots 839, 890 & 891, 2nd District, 1st Section, Forsyth County, Georgia,
and being more particularly described as follows:

 

To
find the point of beginning, commence at the southwest corner of Land Lot 890; thence along the westerly line of Land Lot 890,
N 01°09’49” E a distance of 552.21 feet to a point; thence S 65°57’30” W a distance of 160.11
feet to an iron pin found and the POINT OF BEGINNING; thence S 80°42’55” W a distance of 299.38 feet to an iron
pin found on the northeasterly right of way of Bluegrass Valley Parkway (right of way varies); thence along said right of way
along a curve to the left, following the curvature thereof for an arc distance of 114.81 feet, said curve having a radius of 66.00
feet and being subtended by a chord of N 39°13’57” W 100.87 feet to an iron pin found; thence leaving said right
of way N 00°45’13” E a distance of 682.90 feet to an iron pin found; thence S 74°34’10” E a distance
of 387.04 feet to a 1 inch open top pipe found; thence N 53°07’57” E a distance of 230.56 feet to an iron pin
found; thence S 61°56’45M E a distance of 68.84 feet to an iron pin found; thence N 69°36’55” E a distance
of 236.28 feet to an iron pin found; thence S 03°04’24” E a distance of 135.87 feet to an iron pin found; thence
S 14°17’50” W a distance of 292.83 feet to an iron pin found; thence S 03°26’58” W a distance
of 194.77 feet to an iron pin found; thence S 80°30’22” W a distance of 0.14 feet to a point; thence S 65°57’30”
W a distance of 291.71 feet to the POINT OF BEGINNING. Said tract contains 11.933 acres.

 

    	 	A-1	 

    	 

    

 

EXHIBIT
B

 

Rules
and Regulations

 

Tenant
covenants with and for the benefit of:

 

1.
To give to Landlord prompt written notice of any significant accident, fire or damage occurring on or to the Premises.

 

2.
To use reasonable efforts to schedule deliveries of goods at reasonable business hours, and to load and unload goods only in such
areas and through such entrances as may be designated for such purposes by Landlord and to prohibit all trucks and trailers which
have moved upon the Premises on account of Tenant’s conduct of business from remaining overnight in any portion of the Premises.

 

3.
To keep the Premises sufficiently heated to prevent freezing of water in pipes and fixtures.

 

4.
Not to burn, place or permit any rubbish or merchandise in the outside areas adjoining the Premises, except as provided herein.
Tenant shall deposit its trash only in designated trash receptacles and shall participate in and comply with any procedures established
for the collection, sorting, separation and recycling of waste products, garbage, refuse and trash.

 

5.
To keep the Premises clean, sanitary and free from offensive odors and from insects, vermin and other pests.

 

6.
To park Tenant’s vehicles and to require Tenant’s employees, contractors, subcontractors, and concessionaires to park
their vehicles only in those portions of the parking area designated for that purpose.

 

7.
To keep its exterior and interior signs and lights continuously well lighted at a minimum from 11:00 a.m. to 10:00 p.m.

 

8.
To conduct its business in the Premises in a diligent and dignified manner, to refrain from using any sales promotion device or
practice that would tend to mislead or deceive the public or detract from the reputation of the Premises and keep the Premises
in first class condition in accordance with the highest standards of operation of similar businesses.

 

9.
To comply with any and all reasonable rules and regulations of Landlord in connection with the Premises which are in effect at
the time of the execution of the Lease or which may be from time to time, upon reasonable notice, promulgated by Landlord in its
reasonable discretion, provided such rules and regulations are in writing and are not in conflict with the terms and conditions
of the Lease.

 

10.
To install such fire extinguisher and other safety equipment as applicable law may require.

 

11.
Except as may otherwise be provided in the Lease, Tenant shall not place, affix or maintain any signs, advertising placards, names,
insignia, trademarks, descriptive material or any other similar item or items outside or on the Premises, the glass panes and
supports of the Premises windows, or any window, door, roof or exterior boundary of the Premises, except such signs as Landlord
shall approve in writing.

 

12.
Tenant shall not display, paint or place, or cause to be displayed, painted or placed, any handbills, bumper stickers or other
advertising devices on any vehicle parked in the parking area of the Premises.

 

13.
Tenant shall not display or sell merchandise, or place portable signs, devices or any other objects in the common areas of the
Premises and Tenant shall not solicit or distribute materials in any manner in the common areas of the Premises, without Landlord’s
prior written approval, which may be granted or withheld in Landlord’s sole discretion.

 

14.
Tenant shall not erect an aerial or antenna on the roof or exterior walls of the Premises without Landlord’s prior approval.

 

    	 	C-1

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