Document:

Blueprint

Exhibit 10.1

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

 

 

 

 

 

 

 

 

 

*************************************************

FIXED
TERM BUILDING LEASE AGREEMENT

*************************************************

 

 

 

 

 

 

 

 

 

 

 

 

LESSOR
("Lessor"):                                            

HULIC CO.,
LTD.

 

 

LESSEE
("Lessee"):                                            

MORINDA JAPAN
GK

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

LEASE
AGREEMENT

 

<Lease
Summary>

	

Lessor
("Lessor")

	

Hulic
Co., Ltd.

	

Lessee
("Lessee")

	

Morinda
Japan GK

	

Building

	

Name

	

Morinda
Building

	

Location

	

3-2-2
Nishishinjuku, Shinjuku-ku, Tokyo (street address)

	

Structure
/ Floors

	

9 story
steel frame / steel reinforced concrete / reinforced concrete, flat
roof structure with 2 basement floors

	

Purpose
of Use

	

1F and
2F: Showroom (Portion Used for Store); 3F ~ 9F, B1 and B2:
Offices

	

Lease
Term

	

March
22, 2019 through March 21, 2046

	
 

	

Floor

	

Area
(m2)

	

Monthly
Rent (¥)

	

Consumption
Taxes / Local Consumption Taxes (¥) *

	

Monthly
Amount with Consumption Taxes / Local Consumption Taxes (¥)
*

	

Rent

	

9F

	

377.89
m2

	

¥20,000,000

	

¥1,600,000

	

¥21,600,000

	

8F

	

377.89
m2

	

7F

	

377.89
m2

	

6F

	

377.89
m2

	

5F

	

377.89
m2

	

4F

	

377.89
m2

	

3F

	

377.89
m2

	

2F

	

377.89
m2

	

1F

	

358.20
m2

	

B1

	

334.87
m2

	

B2

	

274.49
m2

	

Total

	

3,990.68
m2

	

¥20,000,000

	

¥1,600,000

	

¥21,600,000

	

Common
Service Fees

	

-

	

-

	

-

	

-

	

-

	

Total

	

-

	

-

	

-

	

-

	

Security
Deposit

	

¥200,000,000

(10
Months' Monthly Rent)

	
 

	
 

	

Payment
Date and Method for Rent, etc.

	

Remit
to the Lessor's designated bank account by the 25th day of each
month (or the preceding business day of this day falls on a bank
holiday)

	

Termination
Prohibition Period

	

Seven
(7) years from the execution date of this Agreement

	

Termination
Advance Notice

	

At
least one (1) year prior to the scheduled termination
date

	

Exemption
from Restoration to Original Condition

	

Restoration
to original condition shall be exempt after 20 years from the
execution date of this Agreement.

	

Remarks

	
 The
foregoing area is based on the real estate registry.

 Lease
of entire building includes use of exterior walls (installation of
advertisements, etc.) and parking facilities.

 The
Lessor will not change the name of the Building until the end of
this Agreement.

 Reference
value calculated based on the consumption tax rate as of the time
of the execution of this Agreement.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

 

The
Lessor and the Lessee hereby enter into this Fixed Term Building
Lease Agreement as follows (hereinafter, this "Agreement") with
regard to the Lessor leasing of the building stated above
(hereinafter, the "Building") to the Lessee, and this Agreement
shall take effect on the condition that the Building is transferred
to the Lessor pursuant to the Real Estate Purchase and Sale
Agreement dated March 22, 2019 by and between the Lessor and the
Lessee. IN WITNESS WHEREOF, two originals of this Agreement are
created, and upon placing the names and seals of the Lessor and the
Lessee, each shall retain one original hereof.

 

 

March
22, 2019

 

Lessor 7-3
Nihonbashi Odenmacho, Chuo-ku, Tokyo

Hulic
Co., Ltd.

/s/Manabu
Yoshidome, Representative Director (Seal)

 

 

Lessee 

Morinda Building
3-2-2 Nishishinjuku, Shinjuku-ku, Tokyo

Morinda
Japan GK

/s/Makoto Ooki,
Executive Officer (Seal)

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

 

Article 
1

(Lease Premises and
Lease Area)

The
Building and the lease area shall be as set forth in the above
stated Lease Summary (hereinafter, the "Lease
Summary").

 

Article 
2

(Fixed Term
Building Lease Agreement)

This
Agreement is a fixed term building lease agreement prescribed in
Article 38 of the Act on Land and Building Leases (hereinafter, the
"Act").

 

Article 
3

(Purpose of
Use)

The
Lessee shall use the Building only for the purpose of use set forth
in the Lease Summary.

 

Article 
4

(Lease
Term)

1. 

The lease term
shall be as set forth in the Lease Summary, and shall not be
subject to any renewal of the lease agreement. The Lessor shall
deliver the Building to the Lessee on the start date of the Lease
Term.

2. 

The Lessor and the
Lessee shall not be entitled to terminate this Agreement for a
period of seven (7) years from the execution date of this
Agreement.

3. 

The Lessor shall
provide the Lessee with notice of the ending of the lease by
expiration of the lease term during the period between one (1) year
prior through six (6) months prior to the expiration of the lease
term.

4. 

The Lessor or a
person designated by the Lessor, in the period from the date the
Lessee receives notice of the ending of this Agreement from the
Lessor through the expiration of the lease term, shall be entitled
to make a request to the Lessee for entrance to the Building in
order to show the Building to the next potential lessee, and the
Lessee shall cooperate with this entrance for showing the Building
as long as it does not interfere with its business.

5. 

The Lessor and the
Lessee shall be entitled to agree upon and enter into a new fixed
term building lease agreement (hereinafter, the "Re-Contract") for
the Building starting from the day following the expiration date of
the lease term under this Agreement. If the Lessor desires to enter
into a Re-Contract, the Lessor shall state so in the written notice
under Paragraph 3. If the Lessee desires to enter into a
Re-Contract, the Lessee shall provide the Lessor with written
notice thereof during the period between one (1) year prior through
six (6) months prior to the expiration of the lease term,
regardless of whether this is prior to or after the receipt the
written notice from the Lessor pursuant Paragraph 3.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
4-2 

(Early
Termination)

1. 

Even during the
lease term, the Lessee may terminate this Agreement by providing
one (1) year or more advance written notice to the Lessor
designating the termination date which shall be the date after the
expiry of the termination prohibited period set forth in Article
4.2 of this Agreement, and this Agreement shall terminate upon the
arrival of such termination date.

2. 

The Lessee shall be
entitled to immediately terminate this Agreement by paying the
Lessor an amount equal to twelve (12) months' rent (including
consumption taxes and the like) in lieu of the advance notice in
the preceding paragraph.

3. 

Even in the event a
notice for termination does not satisfy the advance notice term of
Paragraph 1, the Lessee shall be entitled to terminate this
Agreement by paying the Lessor an amount equal to the rent
(including consumption taxes and the like) for the period that
falls short of the advance notice term.

4. 

The Lessee shall
not be entitled to withdraw the advance notice of termination or
change the termination date without the prior written approval of
the Lessor.

5. 

In the event the
Lessor receives notice of the termination of this Agreement from
the Lessee pursuant to any of Paragraphs 1 through 3, the Lessor or
a person designated by the Lessor shall be entitled to make a
request to the Lessee to enter the Building in order to show the
Building to the next potential lessees, and the Lessee shall
cooperate with this right to enter for showing the Building as long
as it does not interfere with its business.

 

Article
5

(Rent)

1. 

The rent shall be
as set forth in the Lease Summary. Furthermore, the rent shall not
be revised for a period of seven (7) years from the execution date
of this Agreement, and Article 32 of the Act shall not apply during
this period.

2. 

After seven (7)
years from the execution date of this Agreement, in the event of
the increase in taxes and public fees, increase in prices, or other
changes in economic circumstances, if the rent becomes unreasonable
in comparison to neighboring properties, the Lessor and the Lessee
shall be entitled to engage in good faith mutual consultations
regarding the revision of rent.

3. 

Rent for periods of
less than one full month shall be prorated based on the number of
days in the corresponding month.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article 
6

(Burden of
Expenses)

1. 

The Lessor shall
bear the following expenses:

(1) 

Fixed asset taxes
and city planning taxes for the Building;

(2) 

Insurance premiums
(fire insurance and liability insurance (facilities and elevators))
for the Building; and,

(3) 

Fixed asset taxes
(depreciable asset taxes) for the depreciable assets related to the
Building installed by the Lessor after the date of this
Agreement.

2. 

The Lessee shall
bear the following expenses:

(1) 

Expenses associated
with the management of the Building (including statutory
inspections);

(2) 

Fixed asset taxes
(depreciable asset taxes) for the depreciable assets related to the
Building reported by the Lessee prior to the date of this Agreement
or installed by the Lessee after the execution date of this
Agreement;

(3) 

Electricity, gas,
water and other utility charges accompanying the use of the
Building;

(4) 

Expenses required
in the maintenance (including the replacement of bulbs) of the
lighting inside the Building;

(5) 

Expenses required
in cleaning the inside of the Building;

(6) 

Expenses for
supplies and garbage disposal expenses;

(7) 

Expenses associated
with the use of special machinery and/or equipment;

(8) 

Expenses associated
with the maintenance and management of the fixtures and facilities
installed by the Lessee;

(9) 

Fees and renewal
fees for the road occupancy permits, outdoor advertising permits
and the like related to the Building; and,

(10) 

Neighborhood
association membership fees related to the Building.

3. 

The Lessor and the
Lessee confirm that the details of the portion of burden of
expenses of Paragraph 1 and Paragraph 2 of this Article related to
maintenance, inspections and daily management shall be as set forth
in the Exhibit 2 "Classification Table for Burden of Repairs and
Renovations, etc. to Building and Facilities".

 

Article
6-2

(Reports Related to
Maintenance, Inspections and Daily Management)

1. 

At the end of June,
the end of September, the end of December and the end of March, the
Lessee shall provide the Lessor with a report regarding the
implementation status of the following statutory inspections and
identified matters (including improvement plans):

(1) 

Specified building
routine investigation report;

(2) 

Building facilities
routine inspection report;

(3) 

Fire prevention
facilities routine inspection report;

(4) 

Elevator, etc.
routine inspection report; and,

(5) 

Firefighting
equipment routine inspection results report.

2. 

When objectively
and reasonably determined to be necessary by the Lessor, the Lessor
shall be entitled to request reports from the Lessee regarding the
implementation status of the maintenance, inspection and daily
management of the Building.

 

Article 
7

(Payment
Method)

1. 

By the 25th day of
each month, the Lessee shall pay the Lessor the following month's
rent together with an amount equal to the consumption taxes and
local consumption taxes calculated and separately notified by the
Lessor in accordance with Article 27, by remitting funds to the
bank account designated by the Lessor. Furthermore, the Lessee
shall bear the remittance fees.

2. 

The Lessee shall
pay the expenses of items (1) through (10) of Article 6.2 directly
to the respective creditors.

 

 

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

 

Article
8 

(Security
Deposit)

1. 

The security
deposit shall be as set forth in the Lease Summary, and the Lessee
shall deposit the security deposit with the Lessor simultaneous to
the execution of this Agreement, to secure the obligations owed by
the Lessee to the Lessor under this Agreement.

2. 

The security
deposit shall not accrue interest.

3. 

In the event the
Lessee is late in the payment of rent or fails to perform other
obligations under this Agreement, the Lessor shall be entitled to
appropriate payment of the Lessee's obligations under this
Agreement from the security deposit, and in such instances the
Lessor shall promptly provide the Lessee with notice
thereof.

4. 

In the event the
Lessor appropriates payment of the Lessor's obligations from the
security deposit under the preceding paragraph, the Lessee shall
replenish the deficient amount of the security deposit within five
(5) days after the receipt of notice from the Lessor.

5. 

Upon the ending of
this Agreement, once the Lessee completes vacation and surrender of
the Building, the Lessor shall promptly refund the Lessee the
balance of the security deposit remaining after appropriation to
the payment of all the obligations owed by the Lessee to the
Lessor.

6. 

The Lessee shall
not be entitled to use the security deposit to assert the setting
off of rent or any other obligations owed to the
Lessor.

7. 

The Lessee shall
not be entitled to assign to any third party or provide as
collateral for debt its rights associated with the security
deposit.

 

Article
9 

(Late Payment
Damages)

If the
Lessee is late in the payment of rent or other obligations, the
Lessor shall be entitled to seek damages from the Lessee assessed
at a rate of seven percent (7%) per annum (prorated based on a
365-day year) on the amount of the late payment; provided, however,
that the Lessee shall not be released from the Lessor's exercise of
its right to terminate this Agreement through the payment of these
damages.

 

Article
10 

(Duty of Care of a
Good Manager)

The
Lessee, at its own liability, must diligently exercise the care of
a good manager in the use and management of the Building in
accordance with laws, regulations and the intent. In addition, the
Lessee must exercise the maximum care in the use and management of
the Building to strive to keep the interior and exterior in good
clean condition, to regularly take proper measures to see that
there is no obstruction to the drains, gutters and other common
facilities, to not carry in dangerous items in to the Building,
make loud noises, emit foul odors, engage in other actions that
harm public morals or cause damages or nuisance to
neighbors.

 

Article
11 

(Intentionally
Deleted)

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
12 

(Antisocial Forces,
etc.)

1. 

The Lessee
represents and warrants to the Lessor that as of the execution date
of this Agreement and the start date of the lease term it does not
having any relations or involvement with organized crime groups or
other antisocial forces. In addition, the Lessee covenants to the
Lessor that it will not have any relations or involvement with
organized crime groups or other antisocial forces after the
execution date of this Agreement. Furthermore, relations or
involvement with organized crime groups or other antisocial forces
shall include the following listed cases:

(1) 

Person/entity
related to the Lessee is determined to be a group that engage in,
or is suspected of aiding and abetting conduct in collective or
habitually acts of violence and the like, or member of such group.
Furthermore, person/entity related to the Lessee shall include the
Lessee, its officers and the like, its affiliated companies and
their officers and the like;

(2) 

Person/entity
related to the Lessee is affiliated with a group which is subject
to punishment under the Act on the Control of Organizations which
have Committed Indiscriminate Mass Murder (Act No. 147 of 1999,
including subsequent amendments), or affiliated with other similar
groups;

(3) 

Person/entity
related to the Lessee is engaging in the sex-related businesses
defined in Paragraph 1 of Article 2 of the Act on Control and
Improvement of Amusement Business, etc. (Act No. 122 of 1948,
including subsequent amendments) or the sex-related special
amusement businesses defined in Paragraph 5 of that same Article,
or person/entity seeking to use the Building and the like on behalf
thereof;

(4) 

Person/entity
related to the Lessee is an organized crime group, designated
organized crime group, designated organized crime syndicate or
organized crime group member defined in Article 2 of the Act on
Prevention of Unjust Acts by Organized Crime Group Members (Act No.
77 of 1991, including subsequent amendments) or an affiliate
thereof;

(5) 

Person/entity
related to the Lessee is person/entity engaging in or suspected of
engaging in the concealment of criminal proceeds or the receipt of
criminal proceeds or other benefits similar thereto prescribed in
the Act on Punishment of Organized Crimes and Control of Crime
Proceeds (Act No. 136 of 1999, including subsequent
amendments);

(6) 

Person/entity
related to the Lessee is parson/entity restricted from making
collections as defined in Paragraph 3 of Article 24 of the Money
Lending Business Act (Act No. 32 of 1983, including subsequent
amendments), or a person/entity similar thereto;

(7) 

Person/entity
related to the Lessee is person/entity who is suspected of causing
trouble by threatening people or engaging in behavior that harms
the peace of personal life or business, or person/entity seeking to
use the Building on behalf thereof;

(8) 

In addition to the
foregoing, person/entity related to the Lessee is person/entity who
is determined to be a group that run contrary to public order and
good morals, party related thereto, or person/entity who is
determined to markedly lack social credit/reputation;

(9) 

Entity related to
the Lessee is a corporation that hold entities related to the
Lessee who corresponds to the preceding respective items
(hereinafter, "organized crime groups or other antisocial forces")
as a parent company or other affiliated company;

(10) 

Involvement of
organized crime groups or other antisocial forces in the management
of entities related to the Lessee;

(11) 

Person/entity
related to the Lessee cooperates or involves in the maintenance or
operation of organized crime groups or other antisocial forces
through the provision of funds to organized crime groups or other
antisocial forces or other behavior;

(12) 

Person/entity
related to the Lessee is person/entity who interacts with organized
crime groups or other antisocial forces;

(13) 

Person/entity
related to the Lessee is person/entity who threatens the order or
safety of civil society, or who preclude sound economic activities
or social development;

(14) 

Person/entity
related to the Lessee is person/entity providing the Building for
use as offices for organized crime groups or other antisocial
forces; and,

(15) 

Allowing organized
crime groups or other antisocial forces to repeatedly and
continuously enter and exit the Building.

2. 

The Lessor shall be
entitled to terminate this Agreement unconditionally and without
any prior notice in the event all or any of the representations and
warranties of the preceding paragraph are discovered to be untrue
or inaccurate after the execution of this Agreement, or in the
event the Lessee is in breach of the covenants of the preceding
paragraph.

 

Article
13 

(Prohibited
Matters)

Unless
otherwise prescribed, the Lessee must not engage in the following
actions and must not have the Lessee or its employees, customers,
visitors or other related persons (hereinafter, "Employees, etc.")
engage in the following actions; provided, however, that the
foregoing provision shall not apply in those instances approved to
in advance by the Lessor in writing:

(1) 

Assign or provide
as collateral all or a portion of the leasehold;

(2) 

Sublease or lease
for use all or a portion of the Building; excluding, however,
subleasing or leasing for use to the Lessee's affiliated companies
with the prior approval of the Lessor;

(3) 

Use all or a
portion of the Building as offices or the like for third parties,
allow a third party to co-occupy the Building, or display occupancy
in the name of a third party; provided, however, that the foregoing
provisions shall not apply in the event of co-occupation by the
Lessee's affiliated companies with the prior approval of the
Lessor;

(4) 

Reside or stay
overnight inside the Building;

(5) 

Install telephone
lines in the name of a third party;

(6) 

Engage in a change
of the Lessee's representative, representative director or
director, an assignment of business, merger or the like which has
the same result as assigning the leasehold or subleasing the
Building;

(7) 

Engage in actions
that damage the Building or otherwise harm the preservation of the
Building;

(8) 

Bring in or use in
the Building items, animals or the like which have a risk of
ignition, explosion, vibration, foul odors or noise,;
and,

(9) 

Engage in
advertisements or other postings in locations other than those
designated by the Lessor.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
14 

(Notification of
Changes to Registration Matters or Status, etc.)

The
Lessee shall provide the Lessor with written notice without delay
when material changes occur to the Lessee's address, trade name,
representative, business purpose, or other commercial register
matters or status matters.

 

Article
15 

(New Installation
of Fixtures and Equipment, etc.)

1. 

The Lessee shall
obtain the Lessor's prior written approval when seeking to engage
in the following activities. In addition, if the Lessor establishes
reasonable conditions for such approval, the Lessee shall comply
with such conditions. The Lessee agrees to place orders for the
design, construction and the like related to the following actions
with the person designated by the Lessor (provided, however, that
the construction implemented by the person designated by the Lessor
shall be generally suitable and reasonable in terms of the quality,
schedule and costs, and the Lessor or the person designated by the
Lessor shall submit an estimate to the Lessor and obtain its
approval thereon prior to the start of the construction) or an
entity approved by the Lessor (provided, however, that the Lessor
shall not unreasonably delay, withhold or refuse such approval),
and to bear all the costs required in the design, construction and
the like. In addition, if the following actions are commenced
without the approval of the Lessor, the Lessor shall be entitled to
ask the Lessee to suspend these actions, and if the Lessee fails to
comply with this request, the Lessor shall be entitled to prohibit
the Lessee from using the subject location, or remove the newly
installed, added or modified fixtures, equipment or the like or
make restoration to original condition at the Lessee's
burden:

(1) 

New installation,
addition and modification of partitioning, interior finish and
other fixtures (excluding, however, the new installation or
movement of normal furniture, personal computers and other office
equipment);

(2) 

New installation,
addition and modification of plumbing or wiring for electricity,
gas, water, telephones or the like;

(3) 

Bringing in,
installation or adding of safes, computers, other heavy items,
bulky items or machinery requiring lots of
electricity;

(4) 

Installation of
signs or advertisements and posting or the like of trade name or
trademarks; and,

(5) 

Change of keys of
the entrance of the Building.

2. 

The Lessee shall
bear the real estate acquisition taxes, fixed asset taxes and other
taxes and public fees assessed on the fixtures, equipment and the
like newly installed or added by the Lessee, regardless of who
addressed to or whose name they are in, and the Lessee shall submit
the necessary documentation in the event separation procedures or
the like are conducted by the Lessor or the owner of the Building.
If the taxes or the like are assessed integrally without separation
in the name of the Lessor, upon mutual consultation, the Lessor and
the Lessee shall proportionately divide and bear the tax amount
under a fair and reasonable method. The Lessor shall issue a
written invoice to the Lessee for this proportionate amount, and
the Lessee shall pay the Lessor the billed amount by the date
designated by the Lessor.

3. 

The Lessee shall
bear the expenses associated with the maintenance and management of
the fixtures, equipment and the like newly installed or added by
the Lessee.

4. 

If the status of
construction for the new installation, addition or the like of
fixtures, equipment or the like under Paragraph 1 is subsequently
found to not be in conformance with the Building Standards Act,
Fire Defense Act or other relevant regulations, the Lessee shall
promptly engage in construction to remedy the nonconformance at its
own liability and burden.

 

Article
16 

(Burden of Repair
Expenses and Renovation Expenses)

1. 

The Lessor shall
bear the repair and renovation expenses related to the maintenance
and preservation of the Building's framework, roof and exterior
walls.

2. 

The Lessee shall
bear the expenses for the maintenance, preservation, repair,
renovation and the like of the Building (including the building
facilities and the like) excluding the framework, roof and exterior
walls set forth in the preceding paragraph.

3. 

The Lessee shall
bear the expenses for repairs and the like (including resurfacing,
repainting and the like) to the walls, ceilings, floors and the
like inside the Building.

4. 

When locations
requiring the repairs of Paragraph 2 and Paragraph 3 of this
Article are discovered, the Lessee shall promptly provide notice to
the Lessor, shall implement even those repairs slated to be
conducted at its own burden after mutually consulting with the
Lessor, and shall place orders for with the person designated by
the Lessor (provided, however, that the construction implemented by
the person designated by the Lessor shall be generally suitable and
reasonable in terms of the quality, schedule and costs, and the
Lessor or the person designated by the Lessor shall submit an
estimate to the Lessor and obtain its approval thereon prior to the
start of the construction) or an entity approved by the Lessor
(provided, however, that the Lessor shall not unreasonably delay,
withhold or refuse such approval).

5. 

The Lessor and the
Lessee confirm that the details of the expenses for the repairs and
renovations of Paragraph 1 and Paragraph 2 of this Agreement shall
be as set forth in Exhibit 2 "Classification Table for Burden of
Repairs and Renovations, etc. to Building and
Facilities".

6. 

In the event the
use of the Building is impacted by construction conducted by the
Lessor for the Building, the Lessor shall implement the
construction after providing the Lessee with a full explanation in
advance. In addition, in the event this construction materially
interferes with the Lessee, the Lessor and the Lessee shall engage
mutual good faith consultations regarding a reduction in rent;
provided, however, that the Lessee shall not separately seek
compensation for business interruption or other damages from the
Lessor.

 

Article
17 

(Compensation of
Damages)

1. 

The Lessee must
immediately provide notice to the Lessor when the Lessor or its
Employees, etc. willfully or negligently damage or defile the
Building, the Building's site or the like, or cause physical or
property damages to other tenants or other third parties, and must
compensate the damages suffered by the Lessor or the corresponding
third party.

2. 

The Lessee shall
not make any claims against the Lessor for the damages it suffers
due to the actions or omission of the other tenants of the Building
or other third parties.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
18 

(Termination of
Agreement)

1. 

The Lessor shall be
entitled to terminate this Agreement without providing any prior
notice or the like when the Lessee corresponds to one of the
following respective items:

(1) 

When two (2) or
more months late in the payment of the rent, the expenses of
Article 6 or other expenses slated to be borne by the Lessee, and
failing to provide payment within a reasonable time period after
receiving notice from the Lessor regarding the late
payment;

(2) 

When engaging in
actions which breach the provisions of Article 3, Article 12 or
Article 13;

(3) 

When subject to a
disposition for the suspension of bank transactions, provisional
attachment, attachment, provisional disposition, compulsory
execution or the like, or when a petition is filed for the
commencement of bankruptcy procedures, the commencement of civil
rehabilitation procedures, the commencement of corporate
reorganization procedures or special liquidation;

(4) 

When the Lessee is
subject to a business cease and desist order or other
administrative disposition based on a violation of the Specified
Commercial Transaction Act or the like;

(5) 

Upon
dissolution;

(6) 

When the Lessee
otherwise suffers a substantial loss of social
credibility/reputation;

(7) 

When not using the
Building for two (2) or more months without the prior written
approval of the Lessor;

(8) 

When significant
changes occur to assets, credit, organization, business purpose or
business otherwise, or there is an assignment of business, merger
or other change in the company's actual status, and the Lessor
objectively and reasonably determines that the continuation of this
Agreement is difficult;

(9) 

When the Lessee's
economic credit status significantly deteriorates in comparison to
its status as of the time of the execution of this Agreement, or
the Lessee's financial statements and other information related to
its finances disclosed by the Lessee to the Lessor do not show the
Lessee's economic credit status as of the time of the execution of
this Agreement, and the Lessor objectively and reasonably
determines that the continuation of this Agreement is
difficult;

(10) 

When the Lessor
objectively and reasonably determines that the continuation of this
Agreement is difficult due to events commensurate to those of the
preceding respective items; or,

(11) 

In addition to the
events prescribed in the preceding respective items, when the
Lessee acts in breach of this Agreement or other agreements
executed incidental to this Agreement, and fails to cure the breach
within a reasonable time period after receiving notice from the
Lessor regarding the breach.

2. 

In the event this
Agreement is terminated pursuant to the preceding paragraph, the
Lessee shall pay the Lessor an amount equal to twelve (12) months'
rent as a penalty; provided, however, that this shall not preclude
the Lessor from separately seeking compensation for damages from
the Lessee.

3. 

The Lessee shall be
entitled to terminate this Agreement without providing any prior
notice or the like when the Lessor corresponds to one of the
following respective items:

(1) 

When subject to a
disposition for the suspension of bank transactions, provisional
attachment, attachment, provisional disposition, compulsory
execution or the like, or when a petition is filed for the
commencement of bankruptcy procedures, the commencement of civil
rehabilitation procedures, the commencement of corporate
reorganization procedures or special liquidation;

(2) 

When the Lessor is
subject to a business cease and desist order or other
administrative disposition based on a violation of the Specified
Commercial Transaction Act or the like;

(3) 

Upon
dissolution;

(4) 

When the Lessor
otherwise suffers a substantial loss of social
credibility/reputation;

(5) 

When significant
changes occur to assets, credit, organization, business purpose or
business otherwise, or there is an assignment of business, merger
or other change in the company's actual status, and the Lessee
objectively and reasonably determines that the continuation of this
Agreement is difficult;

(6) 

When the Lessor's
economic credit status significantly deteriorates in comparison to
its status as of the time of the execution of this Agreement, and
the Lessee objectively and reasonably determines that the
continuation of this Agreement is difficult;

(7) 

When the Lessee
objectively and reasonably determines that the continuation of this
Agreement is difficult due to events commensurate to those of the
preceding respective items; or,

(8) 

In addition to the
events prescribed in the preceding respective items, when the
Lessor acts in breach of this Agreement or other agreements
executed incidental to this Agreement, and fails to cure the breach
within a reasonable time period after receiving notice from the
Lessee regarding the breach.

4. 

In the event this
Agreement is cancelled pursuant to the preceding paragraph, the
Lessor shall compensate the Lessee for the damages suffered by the
Lessee.

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

 

Article
19 

(Vacation,
Surrender and Restoration to Original Condition)

1. 

The Lessor and the
Lessee mutually confirm that the original condition of the Building
as of the start of the lease is presumed to be as set forth in the
specifications of Exhibit 1 "Restoration to Original Condition
Standards"; provided, however, that because the Lessee plans on
remodeling the first and second floors, the Lessor and the Lessee
shall mutually consult and reach an agreement on the restoration to
original condition standards based on the standard store
specifications prior to the implementation of the remodeling.
Furthermore, if an agreement is not reached through mutual
consultation, the it shall be the standard office specifications
set out in Exhibit 1 "Restoration to Original Condition
Standards".

2. 

Upon the ending of
this Agreement, the Lessee, at its own burden, must remove the
equipment, machinery, fixtures, partitions, fittings, items and the
like installed by the Lessee, shall make repairs to the locations
requiring mending, shall repaint and resurface the walls, ceilings
and floor finishes, and restore the entire Building to the original
condition agreed by the Lessor and the Lessee under the preceding
paragraph, and must vacate, surrender and return the Building by
the ending date of this Agreement.

3. 

If property owned
by the Lessor is installed by the Lessor at the wish of the Lessee,
if requested by the Lessor, the Lessee shall vacate and surrender
the Building after removing this property.

4. 

The construction
required in the restoration to original condition of Paragraph 2
and Paragraph 3 shall be conducted by the Lessor or a person
designated by the Lessor, and the costs of the construction shall
be borne by the Lessee; provided, however, that the construction
implemented by the Lessor or the person designated by the Lessor
shall be generally suitable and reasonable in terms of the quality,
schedule and costs, and the Lessor or the person designated by the
Lessor shall submit an estimate to the Lessor and obtain its
approval thereon prior to the start of the
construction.

5. 

The Lessor, upon
mutual consultation with the Lessee, shall be entitled to engage in
a cash settlement in lieu of the restoration to original condition
prescribed in Paragraph 2 and Paragraph 3.

6. 

Notwithstanding the
provisions of Paragraph 2 and Paragraph 3, if the Lessee fails to
restore the Building to its original condition by the ending date
of this Agreement, the Lessor shall be entitled to take all of the
measures prescribed in Paragraph 2 and Paragraph 3 at the burden of
the Lessee.

7. 

The Lessee approves
in advance that if property is left behind in the Building at the
time of the ending of this Agreement, the Lessee shall be deemed to
have abandoned ownership of this property and the Lessor shall be
entitled to arbitrarily remove and dispose of this property. In
such instances, the Lessor shall be entitled to bill the Lessee for
the expenses required in the removal and disposal, and the date on
which the Lessor completes the removal and disposal shall be the
vacation and surrender date.

8. 

Notwithstanding the
provisions of this Agreement, the Lessor shall release the Lessee
from the obligation of restoration to original condition after
twenty (20) years from the execution date of this
Agreement.

9. 

Notwithstanding the
provisions of the preceding paragraph, the mechanical parking
facilities must be restored to original condition (to a state where
it is usable in the number of vehicles required by law) and
returned even after the twenty (20) year period, but the foregoing
provision shall not apply if it is evident that the Lessor will
demolish the Building immediately after the Lessee
leaves.

10. 

Upon completion of
the vacation and surrender of the Building, the Lessor shall
immediately deliver written confirmation thereof to the
Lessee.

 

Article
20 

(Prohibition on
Claims for Moving Fees, Purchase of Fixtures, etc.)

When
vacating and surrendering the Building, the Lessee shall not be
entitled to make claims for the refund of the necessary or
beneficial expenses outlaid by the Lessee, claims for moving fees,
eviction fees, concession money, business guarantees, goodwill or
the like, claims for the purchase of the fixtures and the like
newly installed or added by the Lessee, or any other claims,
regardless of the reason or the pretext.

 

Article
21 

(Delay of Vacation
and Surrender)

If the
Building is not vacated and surrendered simultaneous to the ending
of this Agreement, the Lessee shall pay the Lessor, as damages for
use of the Building, an amount equal to double the rent and an
amount equal to the expenses of Article 6 for the period from the
day following the ending of this Agreement through the vacation and
surrender of the Building; provided, however, that if the Lessor
suffers damages from the delay of vacation and surrender, the
Lessee must compensate these damages separate from the foregoing
damages.

 

Article
22 

(Entry to Lease
Premises)

The
Lessor or a person designated by the Lessor, upon providing advance
notice to the Lessee, shall be entitled to enter the Building as
needed and enact prescribed measures when required for the
preservation, sanitation, crime prevention, fire prevention or the
like for the Building, and the Lessee shall cooperate with the
measures taken by the Lessor; provided, however, that notice shall
be provided promptly after the fact when advance notice cannot be
provided in the case of urgency or emergency. Furthermore, in the
case of this paragraph, the Lessor or the person designated by the
Lessor must strive their utmost not to interfere the business of
the Lessee.

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
23 

(Termination of
Agreement by Force Majeure)

This
Agreement shall automatically terminate in the event all or a
portion of the Building is lost or damaged by a natural disaster or
other event not attributable to the Lessor or the Lessee, and the
Lessor and the Lessee agree that it is impossible to achieve the
purpose of this Agreement. In such instances, the Lessor and the
Lessee shall not make any claims against the other party for the
compensation of damages, indemnification of expenses or the like
related to the loss or damage or the resulting ending of this
Agreement, and the Lessee shall not be obligated to restore the
Building to its original condition. Furthermore, upon the ending of
this Agreement pursuant to this Article, the Lessor shall promptly
return the remaining balance of the security deposit (if existing)
to the Lessee.

 

Article
24 

(Lessor's Exemption
from Liability)

1. 

The Lessor shall
not be liable for the damages suffered by the Lessee due to a
natural disaster, fire, theft, unexpected accident or other event
not attributable to the Lessor.

2. 

The Lessor shall
not be liable for the suspension of use of all or a portion of the
Building due to accidents caused by events not attributable to the
Lessor or by repairs, modifications, and renovations required in
the maintenance and management of the Building; provided, however,
that the Lessor shall be obligated to promptly resolve matters
regarding the assets slated to be the Lessor's assets under Exhibit
2, and the Lessee shall cooperate with the Lessor in the
implementation of this construction.

 

Article
25 

(Lessor's
Agency)

The
Lessor shall be entitled to delegate or subcontract all or a
portion of the services related to this Agreement to a person
reasonably found to be appropriate by the Lessor.

 

Article
26 

(Intentionally
Deleted)

 

Article
27 

(Consumption Taxes
and Location Consumption Taxes)

The
Lessee shall bear the consumption taxes and local consumption taxes
assessed on the rent and other taxable items (hereinafter, "Taxable
Items"), and the Lessee shall add and pay the amount calculated and
billed by the Lessor in accordance with the tax rate applicable to
the respective Taxable Items together with the amounts of these
respective Taxable Items. Furthermore, in the event the tax rate
for consumption taxes or local consumption taxes is modified under
the amendment of laws and regulations or the like, with regard to
the amount equal to the consumption taxes or local consumption
taxes on the Taxable Items after the date on which the laws and
regulations are modified or the like (inclusive of such date),
notwithstanding the notations in the Lease Summary, the Lessee
shall pay the Lessor the amount of the consumption taxes or local
consumption taxes calculated in accordance with the modified tax
rate, in accordance with the billing from the Lessor.

 

Article
28 

(Intentionally
Deleted)

 

Article
29 

(Intentionally
Deleted)

 

 

 

 

ENGLISH
TRANSLATION

FOR
REFERENCE PURPOSE ONLY

 

  

Article
30 

(Duty of
Confidentiality)

1. 

Except in the
following cases, the Lessor and the Lessee must not present this
Agreement to a third party or divulge the content of this Agreement
to a third party without the prior approval of the other
party:

(1) 

When disclosure is
required under applicable laws and regulations, orders or
instructions of administrative agencies, or the rules of
self-regulating organizations;

(2) 

When disclosure is
provided to the respective parties' attorneys, certified public
accountants, tax accountants, real estate appraisers or other
experts who owe a duty of confidentiality by law;

(3) 

When disclosure is
provided to the Lessor's affiliated companies (including investment
corporations);

(4) 

When disclosure is
provided to the Lessor's investors (including direct or indirect
contributors to the Lessor, the Lessor's affiliated companies, and
affiliated company's real estate funds in which the Lessor enjoys
economic benefits);

(5) 

When disclosure is
provided to future potential assignees (including investors and
potential investors in these potential assignees and entities
considering financing these potential assignees) of the Building
(including a trust beneficiary interest in a trust that as the
Building as a trust asset); and,

(6) 

When providing
disclosure to the management company or the like for the management
of the Building.

2. 

In the event the
Lessor or the Lessee breach the preceding paragraph and cause
damages to the other party, it must compensate these
damages.

3. 

The Lessor shall
use the personal information obtained from the Lessee for the
execution and performance of agreements for the purchase and sale,
development, brokering, leasing, lease management and other
services implemented by the Lessor for real estate and the like
(including trust beneficiary interests), and the provision of
information and services, communications and management related to
these services, and other business purposes prescribed by the
Lessor, and the details of this use are disclosed on the Lessor's
homepage.

 

Article
31 

(Governing
Law)

The
original of this Agreement shall be the Japanese language version
hereof, and all matters related to the interpretation and
performance of this Agreement shall be governed by the laws of
Japan.

 

Article
32 

(Court of
Jurisdiction)

The
Tokyo District Court shall be the only court with jurisdiction by
agreement over the disputes related to this Agreement arising
between the Lessor and the Lessee.

 

Article
33 

(Mutual
Consultation Matters)

Matters
not prescribed in this Agreement and questions regarding this
Agreement shall be resolved by the Lessor and the Lessee through
mutual good faith consultation.

 

Article
34 

(Consent for
Subleasing)

Notwithstanding
Article 13, the Lessor shall allow the Lessee to sublease a portion
of the Building to Morinda Worldwide Inc., Japan Branch
(hereinafter, the "Sublessee") on the condition that the Lessee
consents to the following respective items:

(1) 

During the term of
this Agreement, the Lessee shall have the Sublessee comply with the
provisions of this Agreement and the building rules, and shall
resolve all problems arising with regard to the Sublessee at its
own liability and burden;

(2) 

The obligation to
refund the deposit (if existing) under the lease agreement with the
Sublessee shall be borne solely by the Lessee, and not by the
Lessor; and,

(3) 

Upon the
termination of this Agreement, the Lessee, at its own burden and
liability, shall have the Sublessee vacate the
Building.

 

Article
35 

(Special Agreement
Matters)

1. 

The Lessor confirms
that the Lessee plans on remodeling the first and second floors
after the execution date of this Agreement. The Lessee shall
implement the remodeling construction within three (3) months from
the purchase and sale closing date, and shall modify the usage of
the first and second floors to offices (show room) or a store of
less than 100 m2.

2. 

The Lessee shall
promptly provide a report to the Lessor in the event instructions,
business cease and desist orders, on-site inspections, warnings or
other administrative procedures under the Specified Commercial
Transaction Act or the like are received from local government
entities, the Consumer Affairs Agency or other administrative
agencies, since there is a risk that the Lessee's social
credibility/reputation will decline.

3. 

The Lessee shall
not use the Building's mechanical parking facilities unless they
are kept in good operating condition, and shall take measures to
ensure safety by not allowing the doors to be opened by third
parties.

4. 

On the date of this
Agreement, the Lessee shall lend the keys and the like listed in
Exhibit 3 to the Lessee, and the Lessee shall confirm receipt of
these keys and the like.

 

EndBlueprint

 

Exhibit 10.2

 

LEASE OF SPACE

OFFICE/WAREHOUSE

 

SUMMARY OF BASIC LEASE TERMS

 

1. 

Tenant: NEW AGE
BEVERAGES CORPORATION, a Washington corporation

 

2.            

Premises:

 

(a)          

Building:
approximately 155,775 rentable square feet

 

(b) 

Land: approximately
9.3 acres

 

(c) 

Physical Address:
18245 East 40th Avenue, Aurora,
Colorado 80011

 

3.            

Initial Lease
Term:

 

(a) 

Period: 122
months

 

(b) 

Commencement Date:
March 21, 2019

 

4.            

Basic
Rent:

 

	

Months

	

Amount PSF

	

Annually

	

Monthly

	

3/21/2019-2/29/2020

	

$4.50

	

$700,987.50

	

$58,415.63*

	

3/1/2020-2/28/2021

	

$4.64

	

$722,796.00

	

$60,233.00

	

3/1/2021-2/28/2022

	

$4.78

	

$744,604.50

	

$62,050.38*

	

3/1/2022-2/28/2023

	

$4.92

	

$766,413.00

	

$63,867.75

	

3/1/2023-2/29/2024

	

$5.07

	

$789,779.25

	

$65,814.94

	

3/1/2024-2/28/2025

	

$5.22

	

$813,145.50

	

$67,762.13

	

3/1/2025-2/28/2026

	

$5.38

	

$838,069.50

	

$69,839.13

	

3/1/2026-2/28/2027

	

$5.54

	

$862,993.50

	

$71,916.13

	

3/1/2027-2/29/2028

	

$5.71

	

$889,475.25

	

$74,122.94

	

3/1/2028-2/28/2029

	

$5.88

	

$915,957.00

	

$76,329.75

	

3/1/2029-4/30/2029

	

$6.06

	

$943,996.50

	

$78,666.38

*To be
prorated for a partial month

For avoidance of doubt, concurrent with Tenant's execution and
delivery of this Lease, Tenant shall pay Landlord the following
amounts:

 

(a) 

$21,419.06 as
prorated monthly Basic Rent allocable to March
2019;

 

(b) 

$10,281.15
as prorated monthly Additional Rent allocable to March
2019.

 

(c) 

$58,415.63 as the amount of the Security
Deposit.

 

 

1

 

 

5.            

Additional
Rent:

 

(a) 

Initial Monthly
Deposit for Taxes and Landlord's Insurance: $28,039.50

 

(b) 

All cost and
expenses incurred by Tenant to maintain and repair the Premises, to
the extent the Lease requires Tenant to make such
payment.

 

6. 

Initial full
Monthly Payment Due (for April 2019 Basic Rent and Additional
Rent): $86,455.13

 

7. 

Security Deposit
Amount: $58,415.63, payable
upon Tenant's execution and delivery of this Lease to
Landlord

 

8. 

Address for Notices
to Landlord: 45 South Clermont Street, Denver, Colorado
80246

 

9. 

Address for
Payments to Landlord:

 

Account
Name: 40th Street Partners LLC

 

Bank
Name and Account Number: Collegiate Peaks Bank, 105 Centennial
Plaza, Buena Vista, Colorado 81211; ABA Routing No. 102105997;
Account No. 410020482

 

10. 

Address for Notices
to Tenant:

 

New Age
Beverages Corporation, 2420 17th Street, Denver,
Colorado 80202

 

11. 

Address for
Billings to Tenant:

 

New Age
Beverages Corporation, 2420 17th Street, Denver,
Colorado 80202

 

12. 

Permitted Use:
Storage, distribution and sales of food and beverages and other
consumer goods, all subject to and in compliance with applicable
laws, as well as related general office purposes.

 

13.            

Brokers:

 

(a) 

Landlord is
represented by Unique Properties, Inc., which is acting as
Landlord's Broker

 

(b) 

Tenant is
represented by Newmark Knight Frank, which is acting as Tenant's
Broker

 

16. 

Renewal Option:
Tenant will have the option (the
"Renewal Option") to renew and extend the Term of the Lease for one
additional term of five (5) years (the "Renewal Term") to commence
at the conclusion of the Lease Term as provided in the
Addendum.

 

 

2

 

 

LEASE OF SPACE

(Office/Warehouse)

 

This
Lease ("Lease") is made effective the 31st day of January, 2019,
between 40TH STREET PARTNERS,
LLC, a Colorado limited liability company ("Landlord"), and NEW AGE
BEVERAGES CORPORATION, a Washington corporation
("Tenant").

 

I.            

GENERAL.

 

1.1           Consideration.
Landlord enters into this Lease in consideration of the payment by
Tenant of the rents herein reserved and the keeping, observance and
performance by Tenant of the covenants and agreements of Tenant
herein contained.

 

1.2           Exhibits
and Attachments. The
Summary of Basic Lease Terms ("Summary"), Attachments, Exhibits and
Addenda listed below shall be attached to this Lease and be deemed
incorporated in this Lease by this reference. In the event of any
inconsistency between such Summary, Attachments, Exhibits and
Addenda and the terms and provisions of this Lease, the terms and
provisions of the Summary, Attachments, Exhibits and Addenda shall
control. The Summary, Attachments, Exhibits and Addenda to this
Lease are:

 

Summary
of Basic Lease Terms

Addendum

Exhibit
A — Legal Description of Land

Exhibit
B —Premises

Exhibit
C — Work Letter

 

II.            

DEFINITIONS; DEMISE
OF PREMISES.

 

2.1           Demise.
Subject to the provisions, covenants and agreements herein
contained, Landlord hereby leases and demises to Tenant, and Tenant
hereby leases from Landlord, the Premises as hereinafter defined,
for the Lease Term as hereinafter defined, subject to existing
covenants, conditions, restrictions, easements and encumbrances
affecting the same.

 

2.2           Premises.
The "Premises" shall mean the space to be occupied by Tenant as
depicted in Exhibit B
attached hereto. The depiction of the Premises on Exhibit B contains approximately
the number of square feet of rentable floor area ("Floor Area") set
forth in the Summary, which depiction is herein referred to as the
"Space Plan." The Premises include the Building which is located on
the Land, as such terms are hereinafter defined.

 

2.3           Area
and Address. The Building on the Premises contains
approximately the Floor Area set forth in the Summary. The address
of the Premises is the address set forth in the
Summary.

 

2.4           Land.
"Land" shall mean the parcel of real property more particularly
described as the Land in Exhibit A attached
hereto.

 

2.5           Building.
"Building" shall mean the building or buildings, which is
constructed on the Land and contains approximately the Floor Area
set forth on the Summary. If there is more than one building
constructed on the Land, the term "Building" shall mean
collectively all buildings constructed upon the Land.

 

 

3

 

 

2.6           Improvements.
"Improvements" shall mean the Building, the Parking Area as
hereinafter defined, and all other fixtures and improvements on the
Land, including landscaping thereon.

 

2.7           Property.
"Property" shall mean the Land, the Building and the Improvements
and any fixtures and personal property used in operation and
maintenance of the Land, Building and Improvements other than
fixtures and personal property of Tenant and other users of space
in the Building.

 

2.8           Parking
Area. "Parking Area" shall mean that portion of the Property
which is paved and otherwise improved for the parking of motor
vehicles.

 

2.9           Covenant
of Quiet Enjoyment. Landlord covenants and agrees that,
provided a Default by Tenant has not occurred, and provided that
Tenant keeps, observes and performs its covenants and agreements
contained in this Lease, Tenant shall have quiet possession of the
Premises and such possession shall not be disturbed or interfered
with by Landlord. Landlord shall under no circumstances be held
responsible for restriction or disruption of use, enjoyment or
access to the Property from public streets caused by construction
work or other actions taken by governmental authorities or other
tenants (their employees, agents, visitors, contractors or
invitees), or any entry or work by Landlord in the Premises
authorized under this Lease, or any other cause not entirely within
Landlord's reasonable control, and such circumstances shall not
constitute a constructive eviction of Tenant nor give rise to any
right of Tenant against Landlord.

 

2.10           Condition
of Demised Premises. Tenant covenants and agrees that, upon
taking possession of the Premises, Tenant shall be deemed to have
accepted the Premises "as is" and Tenant shall be deemed to have
waived any warranty of condition or habitability, suitability for
occupancy, use or habitation, fitness for a particular purpose or
merchantability, express or implied, relating to the Premises.
Tenant's acceptance of the Premises shall constitute its
acknowledgment that the Premises was in good condition, order and
repair at the time of such acceptance including, without
limitation, all doors, loading dock doors, dock levelers, related
dock systems and areas, and all other mechanical and electrical
systems. Notwithstanding the foregoing, if Tenant shall notify
Landlord of any failures in the operation of the electrical,
plumbing, lighting, overhead doors or HVAC systems within ten (10)
days after the date Landlord tenders possession of the Premises to
Tenant (the "Delivery Date"), and such failures were not due to the
negligence or willful misconduct of Tenant, then Landlord shall
repair (or replace if necessary) such inoperable
systems.

 

III.            

LEASE
TERM.

 

3.1           Lease
Term. "Initial Lease Term" shall mean the period of time
specified in the Summary commencing at noon on the commencement
date specified in the Summary ("Commencement Date") and expiring at
noon on the last day of the calendar month falling on or after the
time period described in the Summary (the Initial Lease Term
together with any extensions thereof is herein referred to as the
"Lease Term"). If for any reason Landlord has been unable to
deliver possession of the Premises to Tenant on or before the
Commencement Date of the Lease Term, then the Lease Term and all
other applicable deadlines shall be delayed in their entirety until
Landlord has delivered possession of the Premises to Tenant, which
shall be the sole and exclusive remedy of Tenant for any such delay
and in lieu of any damages or awards. In no event shall Landlord be
liable to Tenant for any loss or damage and in no event shall this
Lease be void or voidable as a result of any such
delay.

 

 

4

 

 

3.2           Tenant
Entry. Landlord agrees to permit Tenant access to the
Premises prior to the Commencement Date of the Lease Term for the
sole purpose of racking set up, data cabling and equipment set up
("Early Access"). Such Early Access shall be subject to all terms
and conditions of this Lease, except that Tenant shall not be
obligated to pay Basic Rent until the Commencement Date of this
Lease Term but Tenant shall be obligated to pay Taxes, Landlord's
Insurance, all costs of utilities and all such Additional Rent due
and payable hereunder.

 

IV.            

BASIC RENT AND
ADDITIONAL RENT.

 

4.1           Basic
Rent. Tenant covenants and agrees to pay to Landlord,
without offset, reduction, deduction, counterclaim or abatement,
basic rent for the Lease Term in the amount specified as basic rent
in the Summary ("Basic Rent"). The term "Year 1" and subsequent
Years as described in the Summary shall mean: (a) as to Year
1, the period of time beginning on the Commencement Date of the
Lease Term and ending upon the last day of the calendar month
falling on or after the first anniversary of the Lease Term; and
(b) for subsequent Years, the corresponding period of time
commencing upon the expiration of the previous Year and ending one
(1) year thereafter.

 

4.2           Monthly
Payments. Basic Rent shall be payable monthly in advance,
without notice, in equal installments in the amount of monthly rent
specified in the Summary. The first such monthly installment shall
be due and payable upon execution hereof and a like monthly
installment shall be due and payable on or before the first day of
each calendar month succeeding the Commencement Date recited in the
Summary during the Lease Term, except that the rental payment for
any fractional calendar month at the commencement or end of the
Lease Term shall be prorated based on a thirty (30) day
month.

 

4.3           Place
of Payments. Basic Rent and all other sums payable by Tenant
to Landlord under this Lease shall be paid to Landlord at the place
for payments specified in the Summary, or such other place as
Landlord may, from time to time, designate in writing. All payments
made to Landlord by Tenant by check or draft shall be payable to
the name set forth in the Summary, until such time as Landlord may
notify Tenant otherwise. Unless otherwise
directed by Landlord, Tenant shall pay all Basic Rent, Taxes (as
defined in Section 5.1) and Landlord's Insurance (as defined
in Section 4.7) by electronic payment as directed in the
Summary of Basic Lease Provisions, using the automated
clearinghouse payment system ("ACH").

 

4.4           Net
Lease. It is the intent of the parties that the Basic Rent
provided in this Lease shall be a net payment to Landlord; that
this Lease shall continue for the full Lease Term notwithstanding
any occurrence preventing or restricting use and occupancy of the
Premises, including any damage or destruction affecting the
Premises, and any action by governmental authority relating to or
affecting the Premises, except as otherwise specifically provided
in this Lease; that the Basic Rent and Additional Rent shall be
absolutely payable without offset, reduction, deduction,
counterclaim, or abatement for any cause except as otherwise
specifically provided in this Lease or allowed by statute or law;
that Landlord shall not bear any costs or expenses relating to the
Premises or provide any services or do any act in connection with
the Premises except as otherwise specifically provided in this
Lease; and that Tenant shall pay, in addition to Basic Rent,
Additional Rent to cover costs and expenses relating to the
Premises and the Property, all as hereinafter
provided.

 

4.5           Additional
Rent. Tenant covenants and agrees to pay, as additional rent
under this Lease ("Additional Rent"), without offset, reduction,
deduction, counterclaim or abatement, all costs and expenses
relating to the use, operation, maintenance and repair of the
Premises by Tenant, Taxes and Landlord's Insurance; and all other
costs and expenses which Tenant is obligated to pay to Landlord or
any other person or entity as specifically provided in this Lease,
whether or not stated or characterized as Additional
Rent.

 

 

5

 

 

4.6           Monthly
Deposits. Tenant shall pay to Landlord, as a monthly deposit
("Monthly Deposit"), in advance, without notice, on each day that
payment of Basic Rent is due, an amount equal to 1/12th of Landlord's
estimate of Taxes, Property Insurance and Liability Insurance (such
Property Insurance and Liability Insurance are collectively
referred to herein as "Landlord's Insurance"). Landlord shall be
entitled to adjust the amount of the Monthly Deposit from time to
time if Landlord anticipates any increase or decrease in Taxes or
Landlord's Insurance, including the right to make annual adjustment
thereof each calendar year; provided, however, Landlord shall be
entitled to make such adjustments to the amount of the Monthly
Deposit no more than 1 time in any calendar year during the Lease
Term.

 

4.7           Security
Deposit. Upon execution of this Lease by Tenant, Tenant
shall deposit with Landlord the amount specified as a security
deposit in the Summary ("Security Deposit"). The Security Deposit
shall be retained by Landlord and may be applied by Landlord, to
the extent necessary, to pay and cover any loss, cost, damage or
expense, including attorneys' fees sustained by Landlord by reason
of the failure of Tenant to comply with any provision, covenant or
agreement of Tenant contained in this Lease. To the extent not
necessary to cover such loss, cost, damage or expense, the Security
Deposit, without any interest thereon, shall be returned to Tenant
within sixty (60) days after the expiration of the Lease Term or as
may be otherwise provided by law; provided, however, Landlord may
withhold a portion of the Security Deposit as may be reasonably
required, in Landlord's determination, to be paid by Tenant
following completion of the annual adjustment provided in Section
4.09 below. The Security Deposit shall not be considered as an
advance payment of rent or as a measure of the loss, cost, damage
or expense which is or may be sustained by Landlord. If all or any
portion of the Security Deposit is applied by Landlord to pay any
such loss, cost damage or expense, Tenant shall, from time to time,
promptly upon demand, deposit with Landlord such amounts as may be
necessary to replenish the Security Deposit to its original
amount.

 

4.8           General
Provisions as to Monthly Deposits and Security Deposit.
Landlord may commingle the Security Deposit or Monthly Deposits
with Landlord's own funds and use such funds as Landlord
determines. In no event shall Landlord be required to hold such
funds in escrow or trust for Tenant. Landlord shall not be
obligated to pay interest to Tenant on account of the Monthly
Deposits and Security Deposit. In the event of a transfer by
Landlord of Landlord's interest in the Premises, Landlord or the
property manager of Landlord may deliver the remaining balance of
any Monthly Deposits and Security Deposit to the transferee of
Landlord's interest and Landlord and such property manager shall
thereupon be discharged from any further liability to Tenant with
respect to such Monthly Deposits and Security Deposit. In the event
of a Transfer (as defined in Section 8.16) by Tenant of
Tenant's interest in this Lease, Landlord shall be entitled to
return the Monthly Deposits and Security Deposit to Tenant's
successor in interest and Landlord shall thereupon be discharged
from any further liability with respect to the Monthly Deposits and
Security Deposit.

 

4.9           Annual
Adjustment. Following
the end of each calendar year of the Lease Term, Landlord shall
submit to Tenant a statement (with reasonable supporting
documentation delivered if requested by Tenant following receipt of
the statement) setting forth the exact amount of Taxes and
Landlord's Insurance for the previous calendar year ("Statement").
If Landlord determines that the actual amount of Taxes and
Landlord's Insurance for the previous calendar year exceeds the
Monthly Deposits for such previous calendar year, Tenant shall pay
to Landlord, within thirty (30) days after receipt of the
Statement, such deficiency in the amount reflected in the
Statement. If Landlord determines that the Monthly Deposits
exceeded the actual amount of Taxes and Landlord's Insurance for
the previous calendar year, the excess amount shall be paid to
Tenant. The amounts of Taxes and Landlord's Insurance payable by
Tenant for the calendar years in which the Lease Term commences and
expires shall be subject to the provisions hereinafter contained in
this Lease for proration of such amounts in such years. Prior to
the dates on which payment is due for Taxes and Landlord's
Insurance, Landlord shall make payment of Taxes and Landlord's
Insurance. The obligations of the parties under this Section shall
survive the termination or expiration of this Lease.

 

 

6

 

 

V.            

TAXES.

 

5.1           Covenant
to Pay Taxes. Tenant covenants and agrees to pay, as part of
the Monthly Deposits, Taxes, as hereinafter defined, which accrue
during or are attributable to the Lease Term. "Taxes" shall mean
all taxes, assessments or other impositions, general or special,
ordinary or extraordinary, of every kind or nature, which may be
levied, assessed or imposed upon or with respect to the Property,
or any part thereof, or upon any building, improvements or personal
property at any time situated thereon.

 

5.2           Proration
of Taxes. Taxes shall be prorated between Landlord and
Tenant for the year in which the Lease Term commences and for the
year in which the Lease Term expires as of, respectively, the
Commencement Date of the Lease Term and the date of expiration of
the Lease Term, except as hereinafter provided. Additionally, for
the year in which the Lease Term expires, Tenant shall be liable
without proration for the full amount of Taxes relating to any
improvements, fixtures, equipment or personal property which Tenant
is required to remove or in fact removes as of the expiration of
the Lease Term. Proration of Taxes shall be made on the basis of
actual Taxes. Taxes for the years in which the Lease Term commences
and expires shall be paid and deposited with Landlord through
Monthly Deposits as hereinabove provided.

 

5.3           Special
Assessments. If any Taxes are payable in installments over a
period of years, Tenant shall be responsible only for installments
for periods during the Lease Term with proration, as above
provided, of any installment payable prior to the Commencement Date
or after the expiration date of the Lease Term.

 

5.4           New
Taxes. Tenant's obligation to pay Taxes shall include any
Taxes of a nature not presently in effect but which may hereafter
be levied, assessed or imposed upon Landlord or upon the Property,
if such tax shall be based upon or arise out of the ownership, use
or operation of the Property or the rents received therefrom, other
than income taxes or estate taxes of Landlord. For the purposes of
computing Tenant's liability for such new type of tax or
assessment, the Property shall be deemed the only property of
Landlord.

 

5.5           Right
to Contest Taxes. Landlord shall have the sole right to
contest any Taxes. Landlord shall credit Tenant with any abatement,
reduction or recovery of any Taxes attributable to the Lease Term
less all costs and expenses incurred by Landlord, including
attorney's fees, in connection with such abatement, reduction or
recovery.

 

VI.            

INSURANCE.

 

6.1           Property
Insurance. Landlord
covenants and agrees to maintain property insurance ("Property
Insurance") for the Property, including but not limited to, the
shell and core of the Building, in such amounts, from such company,
with such deductible and on such terms and conditions as Landlord
deems commercially reasonable. Further, in its sole and absolute
discretion, Landlord may obtain extended insurance coverage for
Machinery & Equipment Breakdown and Loss of Rents to the
benefit of the Landlord. Extended insurance coverage for Machinery
& Equipment Breakdown is specific to the equipment as it
relates to the operation of the Building and is not intended
coverage for the machinery or equipment of the Tenant. Property
Insurance obtained by Landlord need not name Tenant as an
additional insured or loss payee, but at Landlord's directive may
name any Mortgagee (as herein defined) as an additional insured
and/or loss payee as their interests may appear. Tenant covenants
and agrees to pay the cost of the Property Insurance obtained by
Landlord for the Property and the cost of any deductible under such
Property Insurance to the extent a claim is made by Landlord under
such Property Insurance. Landlord shall use commercially reasonable
efforts to consult with Tenant in connection with the terms and
conditions of the Liability Insurance contemplated
hereby.

 

 

7

 

 

6.2           General
Liability Insurance.
Landlord covenants and agrees to maintain a Commercial General
Liability Policy ("Liability Insurance") covering the Property in
such amounts, from such company, with such deductible and on such
terms and conditions as Landlord deems commercially reasonable.
Liability Insurance obtained by Landlord need not name Tenant as an
additional insured or loss payee, but at Landlord's directive may
name any Mortgagee as an additional insured as their interests may
appear. Tenant covenants and agrees to pay the cost of the
Liability Insurance obtained by the Landlord and the cost of any
deductible under Liability Insurance to the extent a claim is made
by Landlord under such Liability Insurance. Landlord shall use
commercially reasonable efforts to consult with Tenant in
connection with the terms and conditions of the Liability Insurance
contemplated hereby.

 

6.3           Tenant's
Property Insurance.
Tenant covenants and agrees to obtain and maintain throughout the
Lease Term, Property Insurance. Such insurance coverage must be as
broad as ISO Causes of Loss – Special Form Coverage and
Equipment Breakdown Protection Coverage against risks of direct
physical loss or damage (commonly known as "all risk") for the full
replacement cost of Tenant's personal property located at the
Premises, with a deductible amount not to exceed $25,000.00.
Coverage should also be extended to include Business Income and
Extra Expense to the benefit of Tenant. Landlord and its property
manager assume and have no responsibility to determine adequate
Property values for Tenant. Concurrently with the execution and
delivery of this Lease by Tenant, Tenant shall deliver evidence of
said insurance to Landlord via a certificate of
insurance.

 

6.4           Waiver.
Landlord and Tenant waive all rights of recovery against the other
and its respective officers, partners, members, agents,
representatives, and employees for loss or damage to its real and
personal property kept in the Building which is capable of being
insured against under ISO Causes of Loss - Special Form Coverage
and Equipment Breakdown Protection Coverage and to the extent of
damages and coverage under worker's compensation and employers
liability insurance required under this Lease, or for loss of
business revenue or extra expense arising out of or related to the
use and occupancy of the Premises. Each party shall, upon obtaining
the property damage insurance required by this Lease, notify the
insurance carrier that the foregoing waiver is contained in this
Lease and obtain an appropriate waiver of subrogation provision in
the policies. Notwithstanding anything
in this Lease to the contrary, Tenant agrees Landlord is not liable
for any injury or damage, either proximate or remote, occurring
through or caused by fire, water, steam, or any repairs,
alterations, injury, accident, or any other cause to the Leased
Premises, to Tenant's property kept or stored in the Premises,
whether by reason of the negligence or default of Landlord, other
occupants, any other person, or otherwise, and the keeping or
storing of all property of Tenant in the Premises or the Property
is at the sole risk of Tenant.

 

6.5           Tenant's
General Liability Insurance. Tenant covenants and agrees to
maintain throughout the Lease Term, a Commercial General Liability
Insurance policy. Coverage must include protection against bodily
injury, property damage, personal injury, fire legal liability, and
medical payment coverage issued by a licensed insurance company
meeting an AM Best qualification of A/X. Coverage shall be written
on an occurrence basis. The limit of liability shall be no less
than $3,000,000 per occurrence, $3,000,000 in the aggregate.
Concurrently with the execution and delivery of this Lease by
Tenant, Tenant shall deliver evidence of said insurance to Landlord
via a certificate of insurance. Such limit may be derived either by
a Combined Single Limit (CSL) on the General Liability policy, or a
$2,000,000 (Two Million) General Liability CSL supported by a
$1,000,000 (One Million) or greater Umbrella Policy.

 

 

8

 

 

The
above General Liability policy shall:

 

(a)           Name
the Landlord and its property manager as additional insureds as
regards this location.

 

(b)           Be
endorsed to be Primary and Non-Contributory to any other similar
insurance of said additional insureds.

 

(c)           Be
endorsed to include a Waiver of Subrogation in favor of additional
insureds.

 

(d)           Provide
at least thirty (30) days prior written notice be given to
additional insureds of any cancellation, non-renewal or material
change as respects the coverages required by this
Lease.

 

(e)           Not
contain any deductible, retention or self-insured provisions,
unless otherwise approved in writing by the Landlord.

 

(f)           Provide
that the General Liability aggregate limits apply per
location.

 

The
limits of insurance required in this Lease do not limit or restrict
the limit of liability of Tenant hereunder. Prior to the occupancy
of the Premises and prior to the expiration of the then-current
policy, Tenant shall cause to be delivered to the Landlord
certificates of insurance evidencing that the insurance required
under this Lease are so in effect. Tenant covenants and agrees to
obtain other insurance, coverages and endorsements customarily
maintained by similar companies as Tenant as so requested from time
to time by Landlord.

 

6.6           Commercial
Automobile Insurance. Tenant agrees to acquire and maintain
Commercial Automobile Insurance as is required by law. The
Commercial Auto Insurance shall represent that coverage for
Tenant's auto to include "Any Auto" or "All Owned Auto" including
"Hired and Non-Owned Auto." Limits of coverage shall be $2,000,000
(Two Million) for Liability. Such limit may be derived either by a
Combined Single Limit (CSL) on the Auto policy, or a $1,000,000
(One Million) Auto CSL supported by a $1,000,000 (One Million) or
greater Umbrella Policy. Concurrently with the execution and
delivery of this Lease by Tenant, Tenant shall deliver evidence of said insurance to Landlord via
certificate of insurance.

 

6.7           Worker's
Compensation. Tenant
covenants and agrees to maintain Worker's Compensation Insurance
coverage as required by statutory law and Employer's Liability
coverage with limits of no less than $500,000 (Five Hundred
Thousand) per occurrence. Such policy shall afford a waiver of
subrogation on behalf of the Landlord and its property manager.
Concurrently with the execution and delivery of this Lease by
Tenant, Tenant shall deliver evidence
of said insurance to Landlord via certificate of
insurance.

 

6.8           Cooperation.
Landlord and Tenant shall cooperate with each other in the
collection of any insurance proceeds which may be payable in the
event of any loss, including execution and delivery of any proof of
loss or other action required to such recovery.

 

6.9           Plate
Glass. Tenant acknowledges that Landlord is not obligated to
maintain any insurance or extended coverage insurance with respect
to damage to any plate glass or other glass located in the
Premises. Tenant shall be entitled to obtain any such insurance for
plate glass or other glass located in the Premises; provided,
however, that Tenant shall be obligated to replace any damaged or
broken or plate glass or other glass located in the Premises,
whether or not Tenant has obtained such insurance
coverage.

 

 

9

 

 

VII.            

OPERATING,
MAINTENANCE AND REPAIR EXPENSES.

 

7.1           Utility
Charges. From and after the Delivery Date, Tenant covenants
and agrees to pay all charges for gas, electricity, light, heat,
power, telephone, telecommunication, internet, or other data
transmission or utility services used, rendered or supplied to or
for the Premises. From and after the Delivery Date, Tenant will be
responsible for contacting the utility companies and transferring
all utilities for the Premises to its name, and thereafter Tenant
shall contract directly with the utility companies for all utility
services for the Premises.

 

7.2           Tenant's
Maintenance Obligation. Tenant, at its sole cost and
expense, shall maintain, repair, replace and keep the Premises and
all improvements, fixtures and personal property thereon in good,
safe and sanitary condition, order and repair and in accordance
with all applicable laws, ordinances, orders, rules and regulations
of governmental authorities having jurisdiction. Tenant shall
perform or contract for and promptly pay for trash and garbage
disposal, janitorial and cleaning services, security systems and
services, interior window washing services, interior painting,
repair and replacement of all interior and exterior doors
(including, without limitation, all loading dock doors, dock
levelers and related dock systems and areas), repair, maintenance
and replacement of damaged or broken interior and exterior glass,
windows, plate glass and other breakable materials, and replacement
of interior light bulbs, light fixtures and ballasts in or serving
the Premises. Tenant shall not dispose of light bulbs, ballasts or
any fixtures or equipment containing Hazardous Substances (as
herein defined) in any trash dumpster, rather Tenant shall dispose
of all such materials in accordance with Applicable Laws (as herein
defined) and in accordance with the requirements of this Lease.
Tenant shall operate, maintain, repair and replace the pipes, lines
and other equipment and facilities for water, sewage and other
utility services serving the Premises from the point exclusively
serving the Premises, even if outside of the Premises. All costs of
maintenance and repairs by Tenant shall be considered Additional
Rent hereunder. All maintenance and repairs to be performed by
Tenant shall be done promptly, in a good and workmanlike fashion,
and without diminishing the original quality of the Premises or the
Property. Tenant shall contract and keep in force with a licensed
service company approved by Landlord a service contract for the
quarterly maintenance of the heating, ventilating and air
conditioning equipment. Following written request from Landlord, a
copy of the service contract shall be furnished to Landlord no
earlier than ten (10) days after the Commencement Date and a copy
of any subsequent contract(s) shall be furnished from time to time
during the Lease Term. If Tenant fails to provide copies of such
contracts to Landlord or fails to maintain such contracts, then
Landlord may cause such maintenance to be performed at Tenant's
cost plus an administrative fee equal to 10% of the cost
thereof.

 

7.3           Structural
Maintenance Obligation. Tenant, at its sole cost and
expense, shall maintain and repair the roof, exterior walls and
structural elements of the Building and the Improvements, including
any replacements required thereto; provided, however, in the event
the roof requires replacement as reasonably determined by both of
the parties hereto, Landlord shall replace the roof at its sole
cost and expense.

 

7.5           Exterior
Maintenance. Tenant, at its sole cost and expense, shall
maintain and repair all exterior portions of the Premises,
including without limitation, the Parking Area and all sidewalks
and yard areas, and shall keep such areas in a neat and clean
condition and shall keep the Parking Area in good condition and
repair, properly and regularly seal coated, cracks filled, pot
holes repaired and striping as necessary, and shall provide snow
removal as reasonably required. Landlord shall not be liable for
and Tenant hereby releases and covenants not to bring any action
against Landlord for any loss, damage or theft to or from any motor
vehicle or other property of Tenant or Tenant's Agents which occurs
in or about the Parking Area. Tenant, at its sole cost and expense,
and Tenant's subject to receipt of all required Gateway Park and
governmental approvals and permits, shall be permitted to fence a
portion of the loading court and Parking Area.

 

 

10

 

 

VIII.                       

ADDITIONAL
COVENANTS.

 

8.1           Use
by Tenant. Tenant covenants and agrees in good faith to use
the Premises within the commercially reasonable scope of the use or
uses set forth as Permitted Uses by Tenant in the Summary, except
with the prior written consent of Landlord who shall exercise
reasonable good faith discretion in considering Tenant’s
requests for additional commercially reasonable uses. Such consent
shall not be unreasonably withheld. Tenant shall have access to the
Premises twenty-four (24) hours per day, seven (7) days per week,
and shall comply with all of Landlord's security
requirements.

 

8.2           Compliance
with Laws. Tenant covenants and agrees that nothing shall be
done or kept on the Premises in violation of any law, ordinance,
order, rule or regulation of any governmental authority having
jurisdiction and that the Premises shall be used, kept and
maintained in compliance with any such law, ordinance, order, rule
or regulation and with the certificate of occupancy issued for the
Building and the Premises. Tenant shall provide written notice to
Landlord within three (3) days after Tenant receives any notice of
a violation or other requirement to comply with any such law,
ordinance, rule or regulation with respect to the Premises or
Tenant's operation at the Premises, together with a copy of such
notice of such violation or non-compliance.

 

8.3           Compliance
with Insurance Requirements. Tenant covenants and agrees
that nothing shall be done or kept on the Premises which might
impair or increase the cost of insurance maintained with respect to
the Premises or the Property, which might increase the insured
risks or which might result in cancellation of any such
insurance.

 

8.4           No
Impairment of Value. Tenant covenants and agrees that
nothing shall be done or kept on the Premises or the Property which
might impair the value of the Premises or the Property, or which
would constitute waste.

 

8.5           No
Overloading. Tenant covenants and agrees that nothing shall
be done or kept on the Premises or the Building and that no
improvements, changes, alterations, additions, maintenance or
repairs shall be made to the Premises which might impair the
structural soundness of the Building, which might result in an
overload of electrical lines serving the Building or which might
interfere with electric or electronic equipment in the Building or
on any adjacent or nearby property. In the event of violations
hereof, Tenant covenants and agrees to immediately remedy the
violation at Tenant's expense and in compliance with all
requirements of governmental authorities and insurance
underwriters.

 

8.6           No
Nuisance. Tenant covenants and agrees that no noxious or
offensive activity shall be carried on upon the Premises or the
Property nor shall anything be done or kept on the Premises or the
Property which may be or become a public or private nuisance or
which may cause embarrassment, disturbance, or annoyance to others
in the Building or on adjacent or nearby property.

 

 

11

 

 

8.7           No
Annoying Lights, Sounds or Odors. Tenant covenants and
agrees to perform business operations in a commercially reasonable
manner so that lights emitted from the Premises will not be
unreasonably bright or cause unreasonable glare; sound emitted from
the Premises will not be unreasonably loud or annoying (it being
acknowledged and agreed that refrigeration equipment on
Tenant’s trailers located at the Building and the Property is
deemed acceptable); and no odor shall be emitted from the Premises
which is or might be noxious or offensive to others in the Building
or on adjacent or nearby property. Tenant, at its sole cost and expense, shall be
responsible for providing and maintaining a mechanical exhaust
ventilation system required by and in compliance with all
applicable laws, codes, rules, ordinances and regulations necessary
for effectively removing cooking odors, smoke, steam, grease, and
vapors. Such a ventilation system shall be provided at or above
cooking equipment located at the Premises including, but not
limited to, ranges, griddles, ovens, deep fat fryers, barbecues and
rotisseries. All hoods, ducts, fans and other devices provided to
ventilate the cooking areas shall be installed and maintained as
required by and in compliance with all applicable laws, codes,
rules, ordinances and regulations. In addition, Tenant, at its sole
cost and expense, shall be responsible for providing make-up air in
all areas where a mechanical exhaust ventilation system is used by
Tenant. Such make-up air shall be provided in accordance with all
applicable laws, codes, rules, ordinances and regulations. Tenant,
upon taking possession of the Premises for completion of the Finish
Work (as defined in the Work Letter), shall use its reasonable
efforts to seal the Premises so that the fumes do not migrate into
adjoining suites and to provide additional ventilation to vent the
fumes out of the Premises. Such work shall be performed at Tenant's
sole cost and expense. In addition, if Landlord receives any
complaints about fumes or odors from other tenants or occupants of
the Building, Landlord shall provide notice thereof to Tenant and
Tenant, at Tenant's sole cost and expense, shall immediately take
such reasonable corrective actions as are necessary to remedy the
odor and fume problems and resolve such complaints. Such corrective
actions shall include, but not be limited to, adding additional
ventilation and filter systems to prevent such odors and fumes from
migrating into adjoining suites.

 

8.8           No
Unsightliness. Tenant covenants and agrees that no
unsightliness shall be permitted on the Premises or the Property
which is visible from any adjacent or nearby property. Without
limiting the generality of the foregoing, all unsightly conditions,
equipment, objects and conditions shall be kept enclosed within the
Premises; no refuse, scrap, debris, garbage, trash, bulk materials
or waste shall be kept, stored or allowed to accumulate on the
Premises or the Property except as may be enclosed within the
Premises; all pipes, wires, poles, antennas and other facilities
for utilities or the transmission or reception of audio or visual
signals or electricity shall be kept and maintained underground or
enclosed within the Premises or appropriately screened from view;
and no temporary structure shall be placed or permitted on the
Premises or the Property without the prior written consent of
Landlord, in its sole and absolute discretion.

 

8.9           No
Animals. Notwithstanding anything to the contrary in the rules and regulations attached
hereto, Tenant covenants and agrees that no animals shall be
permitted or kept on the Premises or the Property; provided,
however, that nothing herein shall be construed as prohibiting
qualified service animals that may not be legally excluded from the
Premises or Property pursuant to the Americans with Disabilities
Act or any similar law, rule or regulation applicable to the
Property. In addition, other domesticated dogs (but no other live
animals) shall be permitted on the Premises and the Property
provided that such dogs are friendly, do not disturb other tenants
of or visitors to the Building, and are kept on a leash when
outside of the Premises. Tenant shall immediately remove from the
Premises and the Property any dog that is not in compliance with
the foregoing. Tenant agrees to indemnify and hold Landlord
harmless from all claims (including costs and expenses of defending
against such claims) arising or alleged to arise from any act or
omission of Tenant or Tenant’s agents, employees, materialmen
or invitees or arising from any bodily injury or property
damage occurring or alleged to have occurred as a result of
any animals kept on the Premises with the consent of Landlord,
unless caused by the gross negligence or willful misconduct of
Landlord or Landlord’s employees.

 

 

12

 

 

8.10           Restriction
on Signs and Exterior Lighting. Tenant covenants and agrees
that no signs or advertising devices of any nature shall be erected
or maintained by Tenant on the Building or the Property, except for
signs approved by Landlord in writing, in its reasonable
discretion. Tenant may install an exterior sign on the Building
provided such sign is in compliance with all applicable laws,
covenants and other restrictions affecting the Premises, and
Landlord has reasonably approved the size, design and location of
such sign.

 

8.11           Restriction
on Changes and Alterations. Tenant covenants and agrees not
to improve, change, alter, add to, remove or demolish any
improvements on the Premises ("Changes"), without the prior written
consent of Landlord which consent shall not be unreasonably
withheld, and unless Tenant complies with all conditions which may
be imposed by Landlord, in its sole and absolute discretion, in
connection with such consent; and unless Tenant pays to Landlord
the reasonable costs and expenses of Landlord for architectural,
engineering or other consultants which may be reasonably incurred
by Landlord in determining whether to approve any such Changes.
Landlord's consent to any Changes and the conditions imposed in
connection therewith shall be subject to all requirements and
restrictions of any Mortgagee. If such consent is given, no such
Changes shall be permitted unless (a) Tenant shall have
procured and paid for all necessary permits and authorizations from
any governmental authorities having jurisdiction; (b) such
Changes shall not reduce the value of the Property; (c) such
Changes are located wholly within the Premises, shall not adversely
affect the structural integrity of the Building or the operation of
the HVAC, plumbing, electrical, water, or sewer systems servicing
the Building or the Property; (d) such Changes shall not
affect or impair existing insurance on the Property; and
(e) Tenant, at Tenant's sole cost and expense, shall maintain
or cause to be maintained workmen's compensation insurance covering
all persons employed in connection with the work and obtains
liability insurance covering any loss or damage to persons or
property arising in connection with any such Changes and such other
insurance or bonds as Landlord may reasonably require. Tenant
covenants and agrees that any Changes approved by Landlord shall be
completed with due diligence and in a good and workmanlike fashion
and in compliance with all conditions imposed by Landlord and all
applicable permits, authorizations, laws, ordinances, orders, rules
and regulations of governmental authorities having jurisdiction and
all covenants and other restrictions affecting the Premises, and
that the costs and expenses with respect to such Changes shall be
paid promptly when due and that the Changes shall be accomplished
free of mechanics' and materialmen's liens. Tenant covenants and
agrees that all Changes shall become the property of Landlord at
the expiration or earlier termination of the Lease Term or, if
Landlord so requests, Tenant shall, at or prior to expiration of
the Lease Term and at its sole cost and expense, remove such
Changes and restore the Premises to their condition prior to such
Changes. Notwithstanding the foregoing, promptly following receipt
of the consent of Landlord, which consent shall not be unreasonably
withheld, conditioned or delayed, Tenant shall be permitted to
install Wi-Fi throughout the Premises to accommodate its warehouse
management system.

 

8.12           No
Mechanic's Liens. Tenant covenants and agrees not to permit
or suffer, and to cause to be removed and released, any mechanic's,
materialmen's or other lien on account of supplies, machinery,
tools, equipment, labor or material furnished or used in connection
with the construction, alteration, improvement, addition to or
repair of the Premises by, through or under Tenant. At least twenty
(20) days prior to any Changes, Tenant shall provide written notice
to Landlord of the date of commencement of any Changes. Landlord
shall have the right, at any time and from time to time, to post
and maintain on the Premises and Building such notices as Landlord
deems necessary to protect the Premises against such liens. Tenant
shall have the right to contest, in good faith and with reasonable
diligence, the validity of any such lien or claimed lien, provided
that Tenant shall give to Landlord such security as may be
reasonably requested by Landlord to insure the payment of any
amounts claimed, including interest and costs, and to prevent any
sale, foreclosure or forfeiture of any interest in the Property on
account of any such lien, including, without limitation, bonding,
escrow or endorsement of the title insurance policy of Landlord and
any Mortgagee. If Tenant so contests, then on final determination
of the lien or claim for lien, Tenant shall immediately pay any
judgment rendered, with interest and costs, and shall cause the
lien to be released and any judgment satisfied.

 

 

13

 

 

8.13           No
Other Encumbrances. Tenant covenants and agrees not to
obtain any financing secured by Tenant's interest in the Premises
and not to encumber the Premises or Landlord's or Tenant's interest
therein, without the prior written consent of Landlord, in its sole
and absolute discretion, and to keep the Premises free from all
liens and encumbrances except liens and encumbrances existing upon
the Commencement Date of the Lease Term or liens and encumbrances
created by Landlord. Anything herein
to the contrary notwithstanding, financing of Tenant's removable
trade fixtures, equipment and other personal property shall not be
a default under this Section 8.13, and Landlord shall agree to
subordinate any interest it may have in such removable trade
fixtures, equipment and other personal property to the interest of
Tenant’s third party lender pursuant to a subordination
agreement reasonably acceptable to Landlord.

 

8.14           Subordination
to Landlord Mortgages. Tenant covenants and agrees that this
Lease and Tenant's interest in the Premises shall be junior and
subordinate to any mortgage or deed of trust ("Mortgage") now or
hereafter encumbering the Property. If Tenant notifies Landlord in
writing that it desires any mortgagee or holder of a Mortgage now
or hereafter encumbering the Property ("Mortgagee") to covenant not
to disturb Tenant and this Lease, Landlord shall make such request
to any mortgagee or holder and Tenant shall pay all costs charged
by any Mortgagee for such non-disturbance covenant. In the event of
a foreclosure of any Mortgage, Tenant shall attorn to the party
acquiring title to the Property as the result of such foreclosure.
No act or further agreement by Tenant shall be necessary to
establish the subordination of this Lease to any such Mortgage,
which subordination is self-executing, but Tenant covenants and
agrees, upon request of Landlord, to execute such documents as may
be necessary or appropriate to confirm and establish this Lease as
subordinate to any Mortgage in accordance with the foregoing
provisions (including, without limitation, such Mortgagee's form of
subordination, non-disturbance and attornment agreement).
Alternatively, Tenant covenants and agrees that, at the option of
any Mortgagee, Tenant shall execute documents as may be necessary
to establish this Lease and Tenant's interest in the Premises as
superior to any such Mortgage within ten (10) days after Tenant's
receipt thereof. If Tenant fails to execute any documents required
to be executed by Tenant under the provisions hereof, Tenant shall
be deemed to have agreed to and be bound by the covenants, terms
and conditions provided in such documents. If any Mortgagee or
purchaser at foreclosure thereof, succeeds to the interest of
Landlord in the Land or the Building, such person shall not be
(i) liable for any act or omission of Landlord under this
Lease; (ii) liable for the performance of Landlord's covenants
hereunder which arise prior to such person succeeding to the
interest of Landlord hereunder; (iii) bound by the payment of
any rent which Tenant may have paid more than one month in advance;
(iv) liable for any security deposit which was not delivered
to such person; or (v) bound by any modifications to this
Lease to which such Mortgagee has not consented in
writing.

 

8.15           No
Assignment or Subletting.

 

(a)           Tenant
covenants and agrees not to make or permit a Transfer by Tenant, as
hereinafter defined, without Landlord's prior written consent,
which consent shall not be unreasonably withheld. A "Transfer" by
Tenant shall include an assignment of this Lease, a sublease of all
or any part of the Premises or any assignment, sublease, transfer,
mortgage, pledge or encumbrance of all or any part of the Premises
or of Tenant's interest under this Lease or in the Premises, by
operation of law or otherwise, or the use or occupancy of all or
any part of the Premises by anyone other than Tenant. The storage
of food products of Tenant’s customers in accordance with the
Permitted Use shall not be deemed to be a sublease or pledge of the
Premises by Tenant. Any such Transfer by Tenant without Landlord's
written consent shall be void and shall constitute a Default by
Tenant under this Lease. Notwithstanding any Transfer by Tenant,
Tenant shall not be relieved of its obligations under this Lease
and Tenant shall remain liable, jointly and severally, and as a
principal, not as a guarantor or surety, under this Lease, to the
same extent as though no Transfer by Tenant had been made, unless
specifically provided to the contrary in Landlord's prior written
consent. The acceptance of Rent by Landlord from any person other
than Tenant shall not be deemed to be a waiver by Landlord of the
provisions of this Section or of any other provision of this Lease
and any consent by Landlord to a Transfer by Tenant shall not be
deemed a consent to any subsequent Transfer by Tenant.

 

 

14

 

 

(b)           If
Tenant requests Landlord's consent to a Transfer, Tenant shall
submit to Landlord in writing the name of the proposed transferee,
the effective date of the Transfer, the terms of the proposed
Transfer, a copy of the proposed form of sublease or assignment,
and such information as to the business, reputation,
responsibility, and financial capacity of the transferee as
Landlord shall reasonably require to evaluate the request. It shall
be reasonable for Landlord to withhold its consent to any Transfer
where: (i) in the case of a sublease, the subtenant has not
acknowledged that the provisions of this Lease control over any
inconsistent provision in the sublease; or (ii) in Landlord's
opinion, the proposed transferee does not have the ability to
perform its obligations under the assignment or sublease; or
(iii) the intended use by the transferee would damage the
goodwill or reputation of the Building; or (iv) the intended
use is not compatible with other uses of the Building, conflicts
with another tenant's right to exclusive use, or is not permitted
by applicable law or covenant. The foregoing criteria are not
exhaustive, and Landlord may withhold consent to a Transfer on any
other reasonable grounds. Tenant shall reimburse Landlord for all
of Landlord's costs incurred in connection with any request for
consent to a Transfer, including, without limitation, a reasonable
sum for attorneys' fees, not to exceed $2,500.00.

 

(c)           In
the case of a proposed Transfer by Tenant, at the request of
Landlord, Tenant shall pay over to Landlord 50% of all sums (after
deduction of Tenant’s out of pocket costs for tenant
allowances, brokerage commissions, attorneys’ fees and
advertising costs related to the assignment or subletting) received
by Tenant in excess of the Rent payable by Tenant hereunder that is
attributable on an equally allocable square foot basis, to the
subletting or all or any portion of the Premises so
subleased.

 

(d)           Tenant
covenants and agrees to pay to Landlord the amount of $250.00 as an
administrative charge to compensate Landlord for processing such
request and any other reasonable costs and expenses incurred by
Landlord in connection with such request (including, without
limitation, reasonable attorneys' fees), whether or not the consent
of Landlord is given to the Transfer requested by Tenant. Tenant
shall pay such $250.00 administrative charge and an estimated
amount of the other costs and expenses, including attorney's fees,
as determined by Landlord, which shall be due and payable to
Landlord at the time that Tenant submits such request for consent
to the Transfer to Landlord; provided, however, that upon request
from Tenant, Landlord shall provide Tenant with the estimated
amount of such other costs and expenses. When the actual amount of
such costs and expenses are known by Landlord, then if such
estimated amount paid by Tenant is greater than the actual amount
of such costs and expenses, Landlord shall refund any such excess
to Tenant. If such estimated amount paid by Tenant is less than the
actual amount of such costs and expenses, Tenant shall pay to
Landlord, within ten (10) days after demand by Landlord, any such
additional actual costs and expenses. The payment of such
administrative charge and other costs and expenses by Tenant shall
be a condition precedent to the effectiveness of any consent by
Landlord to such Transfer.

 

(e)           Notwithstanding
anything to the contrary, Tenant shall not be entitled to make a
Transfer to an existing tenant of Landlord or its Related Parties
(as herein defined), or any subtenant or assignee thereof, or any
person or entity with whom Landlord or its Related Parties
negotiated or had contact or to whom Landlord has given, or
received therefrom, any written or oral proposal regarding a lease
of space in the Building within the six (6) month period preceding
Tenant's request for such Transfer. Tenant shall not publicly
advertise the rate or other terms upon which Tenant is willing to
Transfer the Premises, and all other public advertisements of a
Transfer shall be subject to the prior written approval of
Landlord, which approval shall not be unreasonably withheld. Public
advertisement shall include, without limitation, the placement or
displays of any signs or lettering on or above the Premises. If at
the time of the proposed Transfer there is any vacant or unoccupied
space in the Building, Tenant shall not be entitled to Transfer or
offer to Transfer the Premises at a rental rate less than the
prevailing fair market rental then offered by Landlord, in its sole
and absolute discretion, for such other space.

 

 

15

 

 

(f)           For
the purposes of this Lease, the term "Transfer" shall also include:
the transfer or change, whether voluntary, involuntary or by
operation of law, of fifty percent (50%) or more of the control or
ownership, whether legal or beneficial, in Tenant within a twelve
(12) month period; the dissolution, merger, consolidation or other
reorganization of Tenant; or the withdrawal, resignation or
termination of the majority of the shareholders of Tenant.
Notwithstanding anything to the contrary in this Section 8.15,
Tenant may, without obtaining Landlord's consent, complete a
Transfer to a Permitted Transferee subject to the following
conditions: (a) the proposed use of the Premises shall be the same
as Tenant's use and Landlord shall not be required, as a result of
applicable laws, to make any renovations to the Property or provide
special services as a result of such Transfer, and (b) not less
than 30 days following the effective date of the Transfer, Tenant
provides Landlord with documentation evidencing the Transfer and
such other evidence as Landlord may reasonably require to establish
that the Transfer complies with the provisions of this Section.
"Permitted Transferee" means: (1) any subsidiary or affiliate in
which Tenant owns at least a 25% interest; (2) any parent of
Tenant; (3) any subsidiary or affiliate in which Tenant's parent
owns at least a 25% interest; or (4) any entity into which Tenant
may be merged or consolidated or which purchases all or
substantially all of the assets or beneficial ownership interests
of Tenant; provided that the Permitted Transferee has a net worth
at least equal to Tenant's net worth (as defined in accordance with
generally accepted accounting principles consistently applied) as
of the date of this Lease.

 

(g)           As
a condition to any Transfer by Tenant, Tenant shall acknowledge in
writing to Landlord that Tenant shall remain obligated and liable
under this Lease, any assignee or other transferee (other than a
subtenant) shall expressly assume all the obligations of Tenant
under this Lease, and any subtenant shall covenant to Landlord to
comply with all obligations of Tenant under this Lease as applied
to the portion of the Premises so sublet and to attorn to Landlord,
at Landlord's written election, in the event of any termination of
this Lease prior to the expiration date of the Lease Term; all of
which shall be in a written instrument satisfactory to Landlord and
furnished to Landlord not later than fifteen (15) days prior to the
effective date of such Transfer.

 

8.16           Annual
Financial Statements. Tenant covenants and agrees to furnish
to Landlord, within one hundred twenty (120) days after the end of
each calendar year upon written request thereof from Landlord,
copies of annual audited financial statements of Tenant. In
addition, no more than 1 time in any calendar year during the Lease
Term, Tenant covenants and agrees to furnish to Landlord, within
forty-five (45) days after written request thereof from Landlord
copies of any unaudited financial statements of Tenant which
financial statements shall include a balance sheet as of the end
of, and a statement of profit and loss for, the preceding fiscal
year of Tenant and, if regularly prepared by Tenant, a statement of
sources and use of funds for the preceding fiscal year. Landlord
may deliver any such financial statements to any existing or
prospective Mortgagee or purchaser of the Property. All information
provided by Tenant under this Section shall be treated by Landlord
as confidential non-publicly available information, and Landlord
shall use reasonable efforts to maintain the confidentiality of
such information, but Landlord shall not be prohibited from
disclosing such information to its attorneys, accountants,
Mortgagees, or proposed lenders on a similarly confidential basis
or otherwise as reasonably required in enforcing this Lease. In the
event of a sale or refinancing of the Building, Landlord shall use
reasonable efforts to maintain the confidentiality of such
information, but Landlord shall not be prohibited from disclosing
Tenant's audited financials directly to the purchaser or proposed
lender on a similarly confidential basis but the accuracy of the
information set forth in the unaudited financials may not be relied
upon by any such purchaser or proposed lender. Tenant shall not be
required to provide financial information pursuant to this Section
8.16 in the event Tenant is a publicly traded company and its
financial statements are available to the public.

 

 

16

 

 

8.17           Payment
of Taxes. Tenant covenants and agrees to pay promptly when
due all personal property taxes on personal property of Tenant on
the Premises and all federal, state and local income taxes, sales
taxes, use taxes, Social Security taxes, unemployment taxes and
taxes withheld from wages or salaries paid to Tenant's employees,
the nonpayment of which might give rise to a lien on the Premises
or Tenant's interest therein, and to furnish, if requested by
Landlord, evidence of such payments.

 

8.18           Estoppel
Certificates. Tenant covenants and agrees to execute,
acknowledge and deliver to Landlord, upon Landlord's written
request, a written statement certifying that this Lease is
unmodified (or, if modified, stating the modifications) and in full
force and effect; stating the dates to which Basic Rent has been
paid; stating the amount of the Security Deposit held by Landlord;
stating the amount of the Monthly Deposits held by Landlord for the
then tax and insurance year; stating that there have been no
defaults by Landlord or Tenant and no event which with the giving
of notice or the passage of time, or both, would constitute such a
default (or, if there have been defaults, setting forth the nature
thereof); and stating such other matters concerning this Lease as
Landlord may reasonably request. Tenant agrees that such statement
may be delivered to and relied upon by any existing or prospective
Mortgagee or purchaser of the Property. Tenant agrees that a
failure to deliver such a statement within ten (10) days after
written request from Landlord shall be conclusive upon Tenant that
this Lease is in full force and effect without modification except
as may be represented by Landlord; that there are no uncured
defaults by Landlord or Tenant under this Lease except as may be
represented by Landlord; and that any representation by Landlord
with respect to Basic Rent, the Security Deposit, the Monthly
Deposits and any other permitted matter are true.

 

8.19           Landlord's
Access to Demised Premises. Tenant covenants and agrees that
Landlord and the authorized representatives of Landlord shall have
the right to enter the Premises at any reasonable time during
ordinary business hours (or at any time in the event of an
emergency) for the purposes of inspecting, repairing or maintaining
the Premises or the Building, performing any alterations or
improvements to the Premises or the Building as Landlord may
determine from time to time, performing any obligations of Tenant
which Tenant has failed to perform hereunder, or for the purposes
of showing the Premises to any existing or prospective Mortgagee,
purchaser or tenant of the Property or the Premises. Tenant
covenants and agrees that Landlord may at any time and from time to
time place on the Property or the Premises one or more signs
advertising the Property or the Premises for sale or for
lease.

 

8.20           Fixtures,
Improvements and Equipment. Tenant covenants and agrees that
all fixtures and improvements on the Premises and all equipment
relating to the use and operation of the Premises (as distinguished
from operations incident to the business of Tenant), including all
plumbing, heating, lighting, electrical and air conditioning
fixtures and equipment, whether or not attached to or affixed to
the Premises, and whether now or hereafter located upon the
Premises, shall be and remain the property of Landlord upon
expiration of the Lease Term. Tenant
shall have the right to use the furniture, furnishings and
equipment (collectively, "FF&E") located in the Premises as of
the Delivery Date at no additional charge for the remainder of the
Term. The parties shall prepare an inventory list of the FF&E
on or before the Delivery Date. The FF&E shall be delivered to
Tenant on the Delivery Date in their current "as is" condition,
normal wear and tear excepted. In addition to the provisions
hereinabove, the following terms and conditions shall govern
Tenant's use of the FF&E under the Lease:

 

 

17

 

 

A.           Tenant
agrees to pay all sales (except sales tax applicable to acquisition
of the FF&E), use, excise, and personal property taxes,
assessments, and all other governmental charges, fines or penalties
whatsoever by whomsoever and whenever payable, on or relating to
the FF&E and such other taxes, fees, assessments, and charges
levied upon Landlord after the Commencement Date, other than
federal or state income assessed upon the FF&E by state or
local laws or taxes, fees, assessments and charges which were
delinquent prior to the Commencement Date or otherwise delinquent
due to the fault of Landlord, and Tenant shall file all returns
required therefor.

 

B.           Title
to each item of FF&E shall remain in Landlord at all times.
Tenant shall keep the FF&E free from any and all liens and
claims, and shall do or permit no act or thing whereby Landlord's
title or rights may be encumbered or impaired.

 

C.           Tenant
agrees that Landlord may assign all right, title, and interest of
Landlord in and to each item of FF&E and all monies due or to
become due to Landlord hereunder.

 

D.           From
and after the Delivery Date through the remaining Lease Term,
Tenant shall maintain, service, and keep in good repair each item
of FF&E at its own expense. Tenant shall comply with all laws
and regulations applicable to said items of FF&E and shall keep
them free and clear of any claims, liens or encumbrances. All risks
of loss or damage to each item of FF&E shall be borne by
Tenant, subject to reimbursement under insurance carried on the
Premises. Tenant shall at its own expense keep each item of
FF&E insured, at the full value thereof, against all risks of
loss or damage and shall likewise insure all FF&E adequately
against property damage and public liability in accordance with the
provisions of the Lease. All attachments, accessories, and repairs,
at any time made to or placed upon the FF&E, or any replacement
thereof, shall become part of the FF&E and shall become the
property of Landlord. If any item of FF&E is damaged beyond
repair, Tenant shall replace such item of FF&E kind for kind,
provided such replacements are of the same value and it being
agreed that such replacement chattels shall be free and clear of
any and all security agreements, security interests, financing
statements, chattel mortgages, conditional bills of sale, liens,
indebtedness, encumbrances, and title retention agreements of every
nature and kind whatsoever.

 

E.           Landlord,
not being the manufacturer of the FF&E nor manufacturer's
agent, MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR
IMPLIED, WITH RESPECT TO, AMONG OTHER THINGS, FITNESS, QUALITY,
DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY, OR
PERFORMANCE OF THE FF&E OR OF THE MATERIAL OR WORKMANSHIP
THEREOF, IT BEING AGREED THAT THE FF&E IS PROVIDED "AS IS" AND
THAT ALL SUCH RISKS, AS BETWEEN LANDLORD AND TENANT, ARE TO BE
BORNE BY TENANT AT ITS SOLE RISK. Landlord shall not be liable to
Tenant for any liability, loss, or damage caused or alleged to be
caused directly or indirectly by the FF&E, by any inadequacy
of, or defect therein, or by any incident in connection therewith.
Tenant, accordingly, agrees not to assert any claim whatsoever
against Landlord based thereon. Tenant further agrees, regardless
of cause, not to assert any claim whatsoever against Landlord for
loss of anticipatory profits or consequential damages. No oral
agreement, guarantee, promise, condition, representation or
warranty shall be binding. Any warranties provided by the
manufacturer or entity supplying the FF&E to Landlord, shall be
assigned by Landlord to Tenant, if assignable in accordance with
their terms. Landlord shall reasonably cooperate with Tenant to
enforce any warranties of any manufacturer or
supplier.

 

 

18

 

 

F.           Tenant
shall keep the FF&E at the Premises and the FF&E shall be
used in the conduct of Tenant's business solely. Tenant shall cause
the FF&E to be operated by competent and qualified employees
only. Tenant shall use the FF&E in a careful and proper manner
and shall insure that the FF&E is not subjected to careless or
needless rough usage. Tenant shall comply with all national, state
and municipal, and other laws, ordinances, and regulations in any
way relating to the possession and use of the
FF&E.

 

8.21           Removal
of Tenant's Equipment. Tenant covenants and agrees to
remove, at or prior to the expiration or earlier termination of the
Lease Term, all of Tenant's Equipment, as hereinafter defined.
"Tenant's Equipment" shall mean all equipment, apparatus,
machinery, signs, furniture, furnishings, wires, cables or other
telecommunications, data or utility equipment or facilities, and
other personal property used in the operation of the business of
Tenant (as distinguished from the use and operation of the
Premises). Tenant's Equipment does not include the FF&E. If
such removal shall injure or damage the Premises Tenant covenants
and agrees, at its sole cost and expense, at or prior to the
expiration of the Lease Term, to repair such injury and damage in
good and workmanlike fashion and to place the Premises in the same
condition as the Premises would have been in if such Tenant's
Equipment had not been installed. If Tenant fails to remove any of
Tenant's Equipment by the expiration of the Lease Term, Landlord
may, at its option, keep and retain any such Tenant's Equipment or
dispose of the same and retain any proceeds therefrom, and Landlord
shall be entitled to recover from Tenant, any costs or expenses of
Landlord in removing the same and in restoring the Premises, in
excess of the actual proceeds, if any, received by Landlord from
disposition thereof. Tenant releases and discharges Landlord from
any and all claims and liabilities of any kind arising out of
Landlord's disposition of Tenant's Equipment.

 

8.22           Tenant
Indemnification of Landlord. Tenant covenants and agrees to
protect, indemnify, defend and save Landlord and Landlord's
managers, employees, agents, beneficiaries, successors, assigns and
other affiliated or related parties ("Related Parties") harmless
from and against all liability, obligations, claims, damages,
penalties, causes of action, costs and expenses, including
attorneys' fees, imposed upon, incurred by or asserted against
Landlord or its Related Parties by reason of (a) any accident,
injury to or death of any person or loss of or damage to any
property occurring on or about the Premises; (b) any act or
omission of Tenant or Tenant's agents, officers or employees or any
other person entering upon the Premises under express or implied
invitation of Tenant (collectively, "Tenant's Agents");
(c) any use which may be made of, or condition existing upon,
the Premises; (d) any improvements, fixtures or equipment upon
the Premises; (e) any failure on the part of Tenant or
Tenant's Agents to perform or comply with any of the provisions,
covenants or agreements of Tenant contained in this Lease;
(f) any violation of any law, ordinance, order, rule or
regulation of governmental authorities having jurisdiction over
Tenant or Tenant's Agents; or (g) any repairs, maintenance or
Changes to the Premises made by, through or under Tenant. Tenant
further covenants and agrees that, in case any action, suit or
proceeding is brought against Landlord or its Related Parties by
reason of any of the foregoing, Tenant shall, at Tenant's sole cost
and expense, defend Landlord and its Related Parties in any such
action, suit or proceeding.

 

8.23           Landlord
Indemnification of Tenant. Landlord covenants and agrees to
protect, indemnify, defend and save Tenant harmless from and
against all liability, obligations, claims, damages, penalties,
causes of action, costs and expenses, including attorneys' fees,
imposed upon, incurred by, or asserted against Tenant by a third
party (excluding Tenant and Tenant's Related Parties) by reason of
(a) Landlord's gross negligence or willful misconduct; or
(b) a default by Landlord under this Lease, after the lapse of
all applicable notice, grace and cure periods. Tenant waives and
releases any claims Tenant may have against Landlord or its Related
Parties for loss, damage or injury to person or property sustained
by Tenant or Tenant's Agents resulting from any cause whatsoever
other than as expressly provided in this Lease. Notwithstanding
anything to the contrary, the indemnification of Tenant by Landlord
provided in this Section 8.24 shall be subject to all waivers,
limitations and restrictions otherwise provided in this Lease.
Notwithstanding anything to the contrary, Landlord and its Related
Parties shall not be personally liable with respect to any of the
terms, covenants and conditions of this Lease, and Tenant shall
look solely to the equity of Landlord in the Property in the event
of any default or liability of Landlord under this Lease, such
exculpation of liability to be absolute and without any exception
whatsoever.

 

 

19

 

 

8.24           Release
upon Transfer by Landlord. In the event of a transfer by
Landlord of the Property or of Landlord's interest as Landlord
under this Lease, Landlord's successor or assign shall take subject
to and be bound by this Lease and in such event, Tenant covenants
and agrees that Landlord and its Related Parties shall be released
from all obligations of Landlord under this Lease, except
obligations which arose and matured prior to such transfer by
Landlord; that Tenant shall thereafter look solely to Landlord's
successor or assign for satisfaction of the obligations of Landlord
under this Lease; and that, upon demand by Landlord or Landlord's
successor or assign, Tenant shall attorn to such successor or
assign.

 

8.25           Hazardous
Substances.

 

(a)           Tenant
shall, at its sole cost and expense, keep and maintain the Premises
in good condition, ordinary wear and tear and damage by fire or
other casualty excepted and promptly respond to and clean up any
release or threatened release of any Hazardous Substance into the
drainage systems, soil, surface water, groundwater, or atmosphere,
in a safe manner, in strict accordance with Applicable Law, and as
authorized or approved by all federal, state, and/or local agencies
having authority to regulate the permitting, handling, and cleanup
of Hazardous Substances; provided, however, Tenant's obligations
under this sentence shall not include any Hazardous Substances
which Tenant proves existed on the Property on the Commencement
Date of the Lease Term unless caused by any act or omission of
Tenant or Tenant's Agents. Tenant and Tenant's Agents shall not
use, store, generate, treat, transport, or dispose of any Hazardous
Substance at the Premises without first obtaining Landlord's
written approval, which consent shall be in Landlord's sole and
absolute discretion. Tenant shall notify Landlord and seek such
approval in writing at least thirty (30) days prior to bringing any
Hazardous Substance onto the Property. Landlord may withdraw
approval of any such Hazardous Substance at any time, for
reasonable cause related to the threat of site contamination, or
damage or injury to persons, property or resources on or near the
Property. Upon withdrawal of such approval, Tenant shall
immediately remove the Hazardous Substance from the site.
Landlord's failure to approve the use of a Hazardous Substance
under this Section shall not limit or affect Tenant's obligations
under this Lease, including Tenant's duty to remedy or remove
releases or threatened releases; to comply with Applicable Law
relating to the use, storage, generation, treatment,
transportation, and/or disposal of any such Hazardous Substances;
or to indemnify Landlord against any harm or damage caused
thereby.

 

(b)           For
any month in which any Hazardous Substances have been used,
generated, treated, stored, transported or otherwise been present
on or in the Premises pursuant to the provisions of this Section,
Tenant shall provide Landlord with a written report listing the
Hazardous Substances which were present on the Property; all
releases of Hazardous Substances that occurred or were discovered
on the Premises; all compliance activities related to such
Hazardous Substances, including all contacts with government
agencies or private parties of any kind concerning Hazardous
Substances; and all manifests, business plans, consent agreements
or other documents relating to Hazardous Substances executed or
requested during that time period. The report shall include copies
of all documents and correspondence related to such activities and
written reports of all oral contacts relating thereto. Tenant shall
permit Landlord and its Related Parties to enter into and upon the
Premises, without notice, at all reasonable times (or at any time
in the event of an emergency) for the purpose of inspecting the
Premises and all activities thereon, including activities involving
Hazardous Substances, or for purposes of maintaining any buildings
on the Premises. Such right of entry and inspection shall not
constitute managerial or operational control by Landlord over any
activities or operations conducted on the Property by
Tenant.

 

 

20

 

 

(c)           Tenant
hereby indemnifies, defends and holds harmless Landlord from and
against any suits, actions, legal or administrative proceedings,
demands, claims, liabilities, fines, penalties, losses, injuries,
damages, expenses or costs, including interest and attorneys' fees,
incurred by, claimed or assessed against Landlord or its Related
Parties (i) under any laws, rules, regulations including,
without limitation, Applicable Laws, (ii) in any way connected
with any injury to any person or damage to any property, or
(iii) any loss to Landlord or its Related Parties occasioned
in any way by Hazardous Substances on the Property and resulting
from the acts of Tenant and Tenant's Agents; provided, however,
Tenant's obligations under this sentence shall not include any
Hazardous Substances which existed on the Property on the
Commencement Date of the Lease Term unless caused by any act or
omission of Tenant or Tenant's Agents. This indemnity specifically
includes the direct obligation of Tenant to perform any remedial or
other activities required, ordered, recommended or requested by any
agency, government official or third party, or otherwise necessary
to avoid or minimize injury or liability to any person, or to
prevent the spread of pollution ("Remedial Work"), however it came
to be located thereon. Tenant shall perform all Remedial Work in
its own name in accordance with Applicable Laws. Without waiving
its rights hereunder, Landlord may, at its option, perform the
Remedial Work and thereafter seek reimbursement for the costs
thereof. Tenant shall permit Landlord access to the Premises to
perform any Remedial Work. Whenever Landlord has incurred costs
described in this Section, Tenant shall, within ten (10) days of
receipt of written notice thereof, reimburse Landlord for all such
expenses together with interest from the date of expenditure at the
rate provided in Section 12.9 hereof.

 

(d)           Without
limiting its obligations under any other Section of this Lease,
Tenant shall be solely and completely responsible for responding to
and complying with any administrative notice, order, request or
demand, or any third party claim or demand relating to potential or
actual contamination on the Property and resulting from the acts of
Tenant and Tenant's Agents. The responsibility conferred under this
Section includes but is not limited to responding to such orders on
behalf of Landlord and defending against any assertion of
Landlord's financial responsibility or individual duty to perform
under such orders. Tenant assumes all liabilities or
responsibilities which are assessed against Landlord in any action
described under this Section. Tenant hereby waives, releases and
discharges forever Landlord from all present and future claims,
demands, suits, legal and administrative proceedings and from all
liability for damages, losses, costs, liabilities, fees and
expenses, present and future, arising out of or in any way
connected with Landlord's use, maintenance, ownership or operation
of the Property, any condition of environmental contamination of
the Property, or the existence of Hazardous Substances in any state
on the Property, however they came to be placed there.

 

(e)           Landlord
consents to Tenant's use of ordinary office, warehouse and
janitorial products in customary quantities within the Premises, in
accordance with Applicable Laws and the terms and conditions of
this Lease.

 

(f)           "Hazardous
Substance(s)" shall mean any hazardous substance, pollutant,
contaminant, waste, by-product or constituent regulated under any
of the Applicable Laws (as hereinafter defined); oil and petroleum
products, natural gas, natural gas liquids, liquefied natural gas,
and synthetic gas usable for fuel; pesticides regulated under any
of the Applicable Laws; asbestos and asbestos containing materials,
PCBs and other substances regulated under any of the Applicable
Laws; raw materials, building components and the product of any
manufacturing or other activities on the Property; source material,
special nuclear material, by-product material and any other
radioactive materials or radioactive wastes, however produced,
regulated under the Atomic Energy Act or the Nuclear Waste Policy
Act; chemicals subject to the OSHA Hazard Communications Standard,
29 C.F.R. § 19.10.1200 et seq.; radon; industrial process
and pollution control wastes, whether or not defined as hazardous
within the meaning of any Applicable Law; and any substance which
at any time shall be listed as "hazardous" or "toxic" or regulated
under any of the Applicable Laws.

 

 

21

 

 

(g)           "Applicable
Law(s)" shall include, but shall not be limited to, all federal,
state, and local statutes, ordinances, regulations and rules
regulating the environmental quality, health, safety, contamination
and cleanup including, without limitation, the Clean Air Act, as
amended, 42 U.S.C. § 7401 et seq., the Federal Water
Pollution Control Act, as amended, 33 U.S.C. § 1251
et seq.; the Water
Quality Act of 1987, as amended; the Federal Insecticide, Fungicide
and Rodenticide Act, as amended, 7 U.S.C. § 136
et seq.; the Marine
Protection, Research and Sanctuaries Act, as amended,
33 U.S.C. § 1401 et seq.; the National
Environmental Policy Act, as amended, 42 U.S.C.
§ 4321 et seq.; the Noise Control Act, as
amended, 42 U.S.C. § 4901 et seq.; the Occupational Safety
and Health Act, as amended, 29 U.S.C. § 651
et seq.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C.
§ 609 et seq.; the Safe Drinking Water
Act, as amended, 42 U.S.C. § 300(f) et seq.; the Comprehensive
Environmental Response, Compensation and Liability Act, as amended,
42 U.S.C. § 9601 et seq.; the Toxic Substances
Control Act, as amended, 15 U.S.C. § 2601
et seq.; the Atomic
Energy Act, as amended, 42 U.S.C. § 2011
et seq.; the Nuclear
Waste Policy Act of 1982, as amended, 42 U.S.C.
§ 10101 et seq.; and state superlien and
environmental cleanup statutes, with implementing regulations and
guidelines. Applicable Laws shall also include all federal, state,
regional, county, municipal, agency, judicial and other local laws,
statutes, ordinances, regulations, rules and rulings, whether
currently in existence or hereinafter enacted or promulgated, that
govern or relate to: (i) the existence, cleanup and/or remedy
of contamination of property; (ii) the protection of the
environment from spilled, deposited or otherwise emplaced
contamination; (iii) the control of Hazardous Substances; or
(iv) the use, generation, discharge, transportation,
treatment, removal or recovery of Hazardous
Substances.

 

IX.            

DAMAGE OR
DESTRUCTION.

 

9.1           Tenant's
Notice of Damage. If any portion of the Premises shall be
damaged or destroyed by fire or other casualty, Tenant shall give
prompt written notice thereof to Landlord ("Tenant's Notice of
Damage") and cause the insurance company to commit to make all
proceeds of the insurance available to Landlord as the primary
insured or loss payee.

 

9.2           Substantial
Damage. Upon receipt of Tenant's Notice of Damage, Landlord
shall promptly proceed to determine the nature and extent of the
damage or destruction and to estimate the time necessary to repair
or restore the Premises. As soon as reasonably possible, Landlord
shall give written notice to Tenant stating Landlord's estimate of
the time necessary to repair or restore the Premises ("Landlord's
Notice of Repair Time"). If Landlord reasonably estimates that
repair or restoration of the Premises cannot be completed within
one hundred eighty (180) days from the time of Tenant's Notice of
Damage, Landlord and Tenant shall each have the option to terminate
this Lease. If, however, the damage or destruction was caused by
the act or omission of Tenant or Tenant's Agents, Landlord shall
have the option to terminate this Lease if Landlord reasonably
estimates that the repair or restoration cannot reasonably be
completed within one hundred eighty (180) days from the time of
Tenant's Notice of Damage, but Tenant shall not have the option to
terminate this Lease. Any option granted hereunder shall be
exercised by written notice to the other party given within ten
(10) days after Landlord's Notice of Repair Time. If either
Landlord or Tenant exercises its option to terminate this Lease,
the Lease Term shall expire ten (10) days after written notice by
either Landlord or Tenant exercising such party's option to
terminate this Lease. Following termination of this Lease under the
provisions hereof, Landlord shall refund to Tenant such amounts of
Basic Rent and Additional Rent theretofore paid by Tenant as may be
applicable to the period subsequent to the time of Tenant's Notice
of Damage less the reasonable value of any use or occupation of the
Premises by Tenant subsequent to the time of Tenant's Notice of
Damage.

 

 

22

 

 

9.3           Building
Damage. If the Building shall be damaged or destroyed by
fire or other casualty to the extent of thirty-three and one-third
percent (331⁄3%) or more of the replacement value of the
Building, Landlord may elect not to reconstruct or rebuild such
Building. Upon written notice to Tenant given within twenty (20)
days after Landlord's Notice of Repair Time, this Lease shall
terminate and Landlord shall refund to Tenant such amounts of Basic
Rent and Additional Rent paid by Tenant for the period after such
damage less the reasonable value of any use or occupation of the
Premises by Tenant during such period.

 

9.4           Damage
During Final Two Years. Notwithstanding anything to the
contrary set forth herein, if the Premises or the Building shall be
damaged during the last two (2) years of the Lease Term to the
extent of twenty percent (20%) or more of the then cost of
replacement, Landlord may elect, within sixty (60) days after the
occurrence of such event, either to repair or rebuild the Premises,
to the extent Landlord is obligated to repair the Premises or the
Building pursuant to this Lease, or to terminate this Lease, which
termination shall be effective upon giving notice of termination to
Tenant in writing within sixty (60) days after the happening of the
event causing the damage. If Landlord fails to timely give such
notice of termination, this Lease shall, except as may be otherwise
herein provided, remain in full force and effect, and Landlord
shall proceed to commence repair or rebuilding in accordance with
this Lease.

 

9.5           Repair
and Abatement. If repair and restoration of the Premises can
be completed within the period specified in Section 9.2, in
Landlord's reasonable estimation, or if neither Landlord nor Tenant
terminate this Lease as provided in Sections 9.2 or 9.3, then
this Lease shall continue in full force and effect and Landlord
shall proceed forthwith to cause the Premises (including any
improvements constructed by Landlord but excluding any alterations,
improvements, Changes, fixtures and personal property constructed
or owned by Tenant) to be repaired and restored with reasonable
diligence and there shall be abatement of Basic Rent and Additional
Rent proportionate to the extent of the space and period of time
that Tenant is unable to use and enjoy the Premises.

 

9.6           Insurance
Proceeds. The proceeds of any Property Insurance maintained
on the Premises, other than property insurance maintained by Tenant
on fixtures and personal property of Tenant, shall be paid to and
become the property of Landlord, subject to any obligation of
Landlord to cause the Premises to be repaired and restored and
further subject to any rights under any Mortgage encumbering the
Property to such proceeds. Landlord's obligation to repair and
restore the Premises provided in this Section 9 is limited to the
repair and restoration that can be accomplished with the proceeds
of any Property Insurance maintained on the Premises. The amount of
any such insurance proceeds is subject to any right of any
Mortgagee to apply such proceeds to its secured debt under its
Mortgage.

 

X.            

CONDEMNATION.

 

10.1           Taking.
A "Taking" shall mean the taking of all or any portion of the
Premises or the Building as a result of the exercise of the power
of eminent domain or condemnation for public or quasi-public use or
the sale of all or part of the Premises or the Building under the
threat of condemnation. A "Substantial Taking" shall mean a Taking
of twenty-five percent (25%) or more of the Premises. An
"Insubstantial Taking" shall mean a Taking which does not
constitute a Substantial Taking.

 

10.2           Substantial
Taking. If there is a Substantial Taking with respect to the
Premises, the Lease Term shall expire on the date of vesting of
title pursuant to such Taking. In the event of termination of this
Lease under the provisions hereof, Landlord shall refund to Tenant
such amounts of Basic Rent and Additional Rent theretofore paid by
Tenant as may be applicable to the period subsequent to the time of
termination of this Lease.

 

 

23

 

 

10.3           Insubstantial
Taking. In the event of an Insubstantial Taking with respect
to the Premises, this Lease shall continue in full force and
effect, Landlord shall proceed forthwith to cause the Premises (but
excluding any alterations, improvements, Changes, fixtures and
personal property constructed or owned by Tenant), less such
Taking, to be restored as near as may be to the original condition
thereof and there shall be abatement of Basic Rent and Additional
Rent proportionate to the extent of the space so
taken.

 

10.4           Award.
The total award, compensation, damages or consideration received or
receivable as a result of a Taking ("Award") shall be paid to and
be the property of Landlord, including, without limitation, any
part of the Award made as compensation for diminution of the value
of this leasehold or the fee of the Premises. Tenant hereby assigns
to Landlord, all of Tenant's right, title and interest in and to
any such Award. Tenant covenants and agrees to execute, immediately
upon demand by Landlord, such documents as may be necessary to
facilitate collection by Landlord of any such Award.
Notwithstanding Landlord's right to the entire Award, Tenant shall
be entitled to a separate award, if any, for the loss of Tenant's
personal property, the loss of Tenant's business and profits, and
Tenant's moving expenses.

 

XI.            

DEFAULTS BY
TENANT.

 

11.1           Defaults.
In the event that any of the following events shall occur, Tenant
shall be deemed to be in default of Tenant's obligations under this
Lease (each of the following shall be referred to as a "Default by
Tenant").

 

11.2           Failure
to Pay. A Default by Tenant shall exist if Tenant fails to
pay Basic Rent, Additional Rent, Monthly Deposits or any other
amounts payable by Tenant when such amount is due under the terms
of this Lease (provided, however, that Tenant shall have a right to
cure such Default by Tenant not later than three (3) days after
receipt of written notice of such non-payment by Landlord but
Tenant is not entitled to such notice and cure period more than one
(1) time during any calendar year nor more than two (2) times
during the Lease Term hereof).

 

11.3           Violation
of Lease Terms. A Default by Tenant shall exist if Tenant
breaches or fails to comply with any non-monetary agreement, term,
covenant or condition in this Lease applicable to Tenant, and
Tenant does not cure such breach or failure within twenty (20) days
after written notice thereof by Landlord to Tenant, or, if such
breach or failure to comply cannot be reasonably cured within such
20-day period, if Tenant shall not in good faith commence to cure
such breach or failure to comply within such 20-day period or shall
not diligently proceed therewith to completion within sixty (60)
days following such notice. Landlord shall not be required to give
written notice of a non-monetary Default by Tenant more than three
(3) times in any twelve month period during the Lease Term, and
thereafter Tenant's failure to perform any non-monetary agreement,
term, covenant, or condition as and when required to be performed
by Tenant under the terms of this Lease shall be a Default by
Tenant without notice or demand.

 

11.4           Transfer
of Interest Without Consent. A Default by Tenant shall exist
if Tenant's interest under this Lease or in the Premises shall be
transferred to or pass to or devolve upon any other party without
Landlord's prior written consent.

 

11.5           Execution
and Attachment. A Default by Tenant shall exist if Tenant's
interest under this Lease or in the Premises shall be taken upon
execution or by other process of law directed against Tenant, or
shall be subject to any attachment at the instance of any creditor
or claimant against Tenant and said attachment shall not be
discharged or disposed of within fifteen (15) days after the levy
thereof.

 

 

24

 

 

11.6           Bankruptcy.
A Default by Tenant shall exist if Tenant shall file a petition in
bankruptcy or insolvency or for reorganization or arrangement under
the bankruptcy laws of the United States or under any similar act
of any state, or shall voluntarily take advantage of any such law
or act by answer or otherwise, or shall be dissolved or shall make
an assignment for the benefit of creditors or if involuntary
proceedings under any such bankruptcy or insolvency law or for the
dissolution of Tenant shall be instituted against Tenant or a
receiver or trustee shall be appointed for the Premises or for all
or substantially all of the property of Tenant, and such
proceedings shall not be dismissed or such receivership or
trusteeship vacated within sixty (60) days after such institution
or appointment.

 

XII.            

LANDLORD'S
REMEDIES.

 

12.1           Remedies.
Upon the occurrence of any Default by Tenant, Landlord shall have
the right, at Landlord's election, then or any time thereafter, to
exercise any one or more of the following remedies.

 

12.2           Cure.
In the event of a Default by Tenant, Landlord may, at Landlord's
option, but without obligation to do so, and without releasing
Tenant from any obligations under this Lease, make any payment or
take any action as Landlord may deem necessary or desirable to cure
any such Default by Tenant in such manner and to such extent as
Landlord may deem necessary or desirable. Landlord may do so
without additional demand on, or written notice to, Tenant and
without giving Tenant an opportunity to cure such Default by Tenant
beyond any applicable notice and cure period otherwise set forth in
this Lease. Tenant covenants and agrees to pay to Landlord, within
ten (10) days after demand, all advances, costs and expenses of
Landlord in connection with the making of any such payment or the
taking of any such action including, without limitation, (a) a
charge in the amount of fifteen percent (15%) of such advances,
costs and expenses payable to Landlord to compensate for the
administrative overhead attributable to such action,
(b) reasonable attorneys' fees, and (c) interest as
hereinafter provided from the date of payment of any such advances,
costs and expenses by Landlord. Action taken by Landlord may
include commencing, appearing in, defending or otherwise
participating in any action or proceeding and paying, purchasing,
contesting or compromising any claim, right, encumbrance, charge or
lien, with respect to the Premises which Landlord, in its sole and
absolute discretion, may deem necessary or desirable to protect its
interest in the Premises and under this Lease. In the event that
the Lease Term has expired or Tenant is no longer occupying the
Premises, Landlord shall be entitled to take such actions as
provided under this Section 12.2 without Landlord being
required to provide the notice to Tenant under
Section 11.3.

 

12.3           Termination
and Damages. In the event of a Default by Tenant, Landlord
may terminate this Lease, effective at such time as may be
specified by written notice to Tenant, and demand (and, if such
demand is refused, recover) possession of the Premises from Tenant.
Tenant shall remain liable to Landlord for damages in an amount
equal to the Basic Rent, Additional Rent and other sums which would
have been owing by Tenant hereunder for the balance of the Lease
Term, had this Lease not been terminated, less the net proceeds, if
any, of any reletting of the Premises by Landlord subsequent to
such termination, after deducting all Landlord's expenses in
connection with such recovery of possession or reletting. Landlord
shall be entitled to collect and receive such damages from Tenant
on the days on which the Basic Rent, Additional Rent and other
amounts would have been payable if this Lease had not been
terminated. Alternatively, at the option of Landlord, Landlord
shall be entitled to recover forthwith from Tenant, as damages for
loss of the bargain and not as a penalty, an aggregate sum which,
at the time of such termination of this Lease, represents the
excess, if any, of (a) the aggregate of the Basic Rent,
Additional Rent and all other sums payable by Tenant hereunder that
would have accrued for the balance of the Lease Term, over
(b) the aggregate rental value of the Premises for the balance
of the Lease Term, both discounted to present worth at the discount
rate of the Federal Reserve Bank of San Francisco at the time of
such award plus one percent (1%) per annum. Landlord agrees to use
commercially reasonable efforts in order to mitigate its damages
following any default by Tenant under this Lease; provided,
however, nothing shall require Landlord to (i) attempt to re-lease
the Premises unless and until Landlord obtains possession of the
Premises, or (ii) lease less than all of the Premises or lease the
Premises in smaller increments than the entire Demised
Premises.

 

 

25

 

 

12.4           Repossession
and Reletting. In the event of a Default by Tenant, Landlord
may reenter and take possession of the Premises or any part
thereof, without demand or notice, and repossess the same and expel
Tenant and any party claiming by, under or through Tenant, and
remove the effects of both using such force for such purposes as
may be necessary, without being liable for prosecution on account
thereof or being deemed guilty of any manner of trespass, and
without prejudice to any remedies for arrears of rent or right to
bring any proceeding for breach of covenants or conditions. No such
reentry or taking possession of the Premises by Landlord shall be
construed as an election by Landlord to terminate this Lease unless
a written notice of such intention is given to Tenant. No notice
from Landlord hereunder or under a forcible entry and detainer
statute or similar law shall constitute an election by Landlord to
terminate this Lease unless such notice specifically so states.
Landlord reserves the right, following any reentry or reletting, to
exercise its right to terminate this Lease by giving Tenant such
written notice, in which event this Lease shall terminate as
specified in said notice. After recovering possession of the
Premises, Landlord may, from time to time, but shall not be
obligated to, relet the Premises, or any part thereof, for the
account of Tenant, for such term or terms and on such conditions
and upon such other terms as Landlord, in its sole and absolute
discretion, may determine. Landlord may make such repairs,
alterations or improvements as Landlord may consider appropriate to
accomplish such reletting, and Tenant shall reimburse Landlord upon
demand for all costs and expenses, including attorneys' fees, which
Landlord may incur in connection with such reletting. Landlord may
collect and receive the rents for such reletting but Landlord shall
in no way be responsible for or liable for any failure to relet the
Premises, or any part thereof, or for any failure to collect any
rent due upon such reletting. Notwithstanding Landlord's recovery
of possession of the Premises, Tenant shall continue to pay on the
dates herein specified, the Basic Rent, Additional Rent and other
amounts which would be payable hereunder if such repossession had
not occurred. Upon the expiration or earlier termination of this
Lease, Landlord shall refund to Tenant any amount, without
interest, by which the amounts paid by Tenant, when added to the
net amount, if any, recovered by Landlord through any reletting of
the Premises, exceeds the amounts payable by Tenant under this
Lease. If, in connection with any reletting, the new lease term
extends beyond the existing Lease Term, or the Premises covered
thereby include other premises not part of the Premises, a fair
apportionment of the rent received from such reletting and the
expenses incurred in connection therewith shall be made in
determining the net amount recovered from such
reletting.

 

12.5           Intentionally
Omitted.

 

12.6           Suits
by Landlord. Actions or suits for the recovery of amounts
and damages payable under this Lease as a result of a default by
Tenant may be brought by Landlord from time to time, at Landlord's
election, and Landlord shall not be required to await the date upon
which the Lease Term would have expired to bring any such action or
suit.

 

12.7           Landlord
Enforcement Costs. All reasonable costs and expenses
incurred by Landlord in connection with collecting any amounts and
damages owing by Tenant pursuant to the provisions of this Lease or
to enforce any provision of this Lease, including reasonable
attorneys' fees whether or not any action is commenced by Landlord,
shall be paid by Tenant to Landlord upon demand.

 

12.8           Administrative
Late Charge. Notwithstanding any other remedies for
nonpayment of rent, if the monthly payment of Basic Rent and
Additional Rent are not received by Landlord on or before the fifth
(5th) day
of the month for which such rental is due, or if any other payment
due Landlord by Tenant is not received by Landlord on or before the
fifth (5th) day of the month
next following the month in which Tenant was invoiced, an
administrative late charge of six percent (6%) of such past due
amount shall become due and payable, in addition to such amounts
owed under this Lease, to help defray the additional cost to
Landlord for processing such late payments. Notwithstanding the
foregoing, the administrative late charge of six percent (6%) of
such past due amount is hereby waived in the first instance where
Landlord gives Tenant written notice of Tenant's failure to pay
such amount due and Tenant cures such failure within five (5) days
after the date of such written notice from Landlord to Tenant;
provided, however, Landlord shall not be obligated to deliver such
notice more than one (1) time in any 12-month period during the
Term and such late charge shall be due and payable with respect to
any future instances of Tenant's failure to make the appropriate
payment.

 

 

26

 

 

12.9           Interest
on Past-Due Payments and Advances. Tenant covenants and
agrees to pay Landlord interest on demand at the rate of fifteen
percent (15%) per annum, compounded on a monthly basis, on the
amount of any Basic Rent, Additional Rent or other charges not paid
when due, from the date due and payable (after allowing for any
applicable grace period), and on the amount of any payment made by
Landlord required to have been made by Tenant under this Lease and
on the amount of any costs and expenses, including reasonable
attorneys' fees, paid by Landlord in connection with the taking of
any action to cure any Default by Tenant, from the date of making
any such payment or the advancement of such costs and expenses by
Landlord. Notwithstanding the foregoing, the interest of fifteen
percent (15%) of such amount of any Basic Rent, Additional Rent or
other charges not paid when due is hereby waived in the first
instance where Landlord gives Tenant written notice of Tenant's
failure to pay such amount due and Tenant cures such failure within
five (5) days after the date of such written notice from Landlord
to Tenant; provided, however, Landlord shall not be obligated to
deliver such notice more than one (1) time in any 12-month period
during the Term and such interest charge shall be due and payable
with respect to any future instances of Tenant's failure to make
the appropriate payment.

 

12.10         
Consequential
Damages. Neither Tenant nor Landlord shall be liable to the
other for any consequential or punitive damages (except that this
provision shall not limit the liability to Landlord for damages
arising from Tenant’s failure to timely surrender the
Premises as required by the provisions of this Lease).

 

12.11         
Bankruptcy
Remedies. Nothing contained in this Lease shall limit or
prejudice the right of Landlord to prove and obtain as liquidated
damages in any bankruptcy, insolvency, receivership, reorganization
or dissolution proceeding, an amount equal to the maximum allowable
by any statute or rule of law governing such proceeding in effect
at the time when such damages are to be proved, whether or not such
amount be greater, equal or less than the amounts recoverable,
either as damages or rent, under this Lease.

 

12.12         
Remedies
Cumulative. Exercise of any of the remedies of Landlord
under this Lease shall not prevent the concurrent or subsequent
exercise of any other remedy provided for in this Lease or
otherwise available to Landlord at law or in equity.

 

XIII.                       

SURRENDER AND
HOLDING OVER.

 

13.1           Surrender.
Upon the expiration or earlier termination of this Lease, or on the
date specified in any demand for possession by Landlord after any
Default by Tenant, Tenant covenants and agrees to surrender
possession of the Premises to Landlord broom clean, ordinary wear
and tear excepted, with all lighting, doors (including, without
limitation, all loading dock doors, dock levelers, and related dock
systems and areas) electrical and mechanical systems in good
working order and condition, all walls in clean condition and holes
or punctures in the walls repaired, and otherwise in the same
condition as when Tenant first occupied the Premises and all
telecommunications, data, utility or other wires, cables or other
equipment or facilities in the Premises or Reserved Area installed
by Tenant or for use by Tenant shall be removed by Tenant. Tenant,
at Landlord's option, shall transfer the telephone services to
Landlord instead of terminating such service account, provided that
Landlord bears any costs of such transfer. If, within the last
ninety (90) days of the Lease Term, Tenant has vacated the
Premises, Landlord shall have the right to decorate, remodel,
repair, or otherwise prepare the Premises for reletting and
re-occupancy.

 

 

27

 

 

13.2           Holding
Over. If Tenant shall hold over after the expiration of the
Lease Term, without the written agreement of Landlord providing
otherwise, Tenant shall be deemed to be a trespasser upon the
Premises, without permission from Landlord. If Landlord consents in
writing to such holdover, then Tenant shall be deemed to be a
tenant from month to month. In either such event, such holdover by
Tenant shall be at a rental, payable in advance, equal to one
hundred fifty percent (150%) of the Basic Rent payable under this
Lease immediately prior to such holdover, and Tenant shall be bound
by all of the other terms, covenants and agreements of this Lease.
Nothing contained herein shall be construed to give Tenant the
right to hold over at any time, and Landlord may exercise any and
all remedies at law or in equity to recover possession of the
Premises, as well as any damages incurred by Landlord, due to
Tenant's failure to vacate the Premises and deliver possession to
Landlord as herein provided.

 

XIV.                       

MISCELLANEOUS.

 

14.1           No
Implied Waiver. No failure by Landlord to insist upon the
strict performance of any term, covenant or agreement contained in
this Lease, no failure by Landlord to exercise any right or remedy
under this Lease, and no acceptance of full or partial payment
during the continuance of any Default by Tenant, shall constitute a
waiver of any such term, covenant or agreement, or a waiver of any
such right or remedy, or a waiver of any such Default by
Tenant.

 

14.2           Survival.
The covenants, agreements and obligations of the parties hereto
shall continue in force and effect and survive any expiration of
the Lease Term or termination of this Lease.

 

14.3           Covenants
Independent. This Lease shall be construed as if the
covenants herein between Landlord and Tenant are independent, and
not dependent, and Tenant shall not be entitled to any offset
against Landlord if Landlord fails to perform its obligations under
this Lease.

 

14.4           Covenants
as Conditions. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a
condition.

 

14.5           Tenant's
Remedies. Tenant may bring a separate action against
Landlord for any claim Tenant may have against Landlord under this
Lease, provided Tenant shall first give written notice thereof to
Landlord and shall afford Landlord a reasonable opportunity to cure
any such default but in no event less than thirty (30) days
following such notice or such longer period reasonably required to
cure such default as long as Landlord diligently proceeds
therewith. In addition, Tenant shall send written notice of such
default by certified or registered mail, postage prepaid, to any
Mortgagee of whose address Tenant has been notified in writing, and
shall afford such Mortgagee a reasonable opportunity to cure any
default on Landlord's behalf but in no event less than thirty (30)
days following such notice or such longer period reasonably
required to cure such default as long as Mortgagee diligently
proceeds therewith. In no event shall Landlord be responsible for
any consequential damages incurred by Tenant including, but not
limited to, loss of profits or interruption of business as a result
of any default by Landlord hereunder. If any suit is brought because of an alleged
breach of this Lease, the prevailing party is also entitled to
recover from the other party all reasonable attorneys' fees and
costs incurred in connection therewith.

 

14.6           Binding
Effect. This Lease shall extend to and be binding upon the
heirs, executors, legal representatives, successors and assigns of
the respective parties hereto. The terms, covenants, agreements and
conditions in this Lease shall be construed as covenants running
with the Land. If there is more than one party constituting Tenant
or liable for the obligations of Tenant under this Lease, such
parties shall be jointly and severally liable for the obligations
of Tenant under this Lease.

 

 

28

 

 

14.7           No
Recording. Neither this Lease nor any memorandum or other
memorialization of this Lease shall be recorded in the records of
any County Clerk and Recorder of the State of Colorado or any other
public records without Landlord's prior consent.

 

14.8           Notices.
All billings under this Lease shall be provided by Landlord to
Tenant at the address for billings set forth in the Summary by
regular mail or personal delivery. All other notices and demands
under this Lease shall be in writing, signed by the party giving
the same and shall be deemed properly given and received when
personally delivered or three (3) business days after mailing
through the United States mail, postage prepaid, certified or
registered, return receipt requested, addressed to the party to
receive the notice at the address set forth for such party in the
Summary or at such other address as either party may notify the
other of in writing.

 

14.9           Time
of the Essence. Time is of the essence under this Lease, and
all provisions herein relating thereto shall be strictly
construed.

 

14.10        
Captions.
The headings and captions hereof are for convenience only and shall
not be considered in interpreting the provisions
hereof.

 

14.11        
Severability.
If any provision of this Lease shall be held invalid or
unenforceable, the remainder of this Lease shall not be affected
thereby, and there shall be deemed substituted for the affected
provision a valid and enforceable provision as similar as possible
to the affected provision.

 

14.12        
Governing
Law. This Lease shall be interpreted and enforced according
to the laws of the State of Colorado.

 

14.13       
Entire
Agreement. This Lease, the Summary, Attachments, Exhibits
and Addenda referred to herein, constitute the final and complete
expression of the parties' agreements with respect to the Premises
and Tenant's occupancy thereof. Each party agrees that it has not
relied upon or regarded as binding any prior agreements,
negotiations, representations, or understandings, whether oral or
written, except as expressly set forth herein.

 

14.14        
No Oral
Modifications. No amendment or modification of this Lease,
and no approvals, consents or waivers by Landlord under this Lease,
shall be valid or binding unless in writing and executed by the
party to be bound.

 

14.15        
Format. This
Lease has been prepared to reflect all additions and deletions
negotiated between Landlord and Tenant from the initial form of
this Lease submitted by Landlord to Tenant. All provisions and
terms that are stricken are deletions and shall not be a part of
this Lease; provided, however, a deletion from this Lease shall not
be construed to create the opposite intent of the deleted
provision. All provisions and terms which are underlined (other
than headings, titles and captions) are additions and shall be part
of this Lease. Tenant acknowledges that it has had the opportunity
to thoroughly review and negotiate this Lease and that the rule of
construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the
interpretation of this Lease.

 

14.16        
Real
Estate Brokers. Tenant covenants to pay, hold harmless and
indemnify Landlord from and against any and all cost, expense or
liability for any compensation, commissions, charges or claims by
any broker or other agent with respect to this Lease or the
negotiation thereof, whether or not meritorious, other than the
brokers listed as the Brokers on the Summary. Tenant acknowledges
Landlord is not liable for any representations by Tenant's Broker
(as set forth in Section 13 of the Summary) or by Landlord's
Broker regarding the Premises, the Building, the Property or this
Lease. Landlord shall pay the commissions owed to Brokers in
connection with this Lease pursuant to a separate agreement between
Landlord and Brokers.

 

 

29

 

 

14.17     
Patriot
Act Compliance.

 

(a)           No
action, proceeding, investigation, charge, claim, report or notice
has been filed, commenced, or threatened against Tenant or any of
its Affiliates (as herein defined) alleging any violation of any
laws relating to terrorism or money laundering including, without
limitation, Executive Order No. 13224 on Terrorist Financing
(effective September 24, 2001) ("Executive Order") and the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (Public
Law 107-56) ("Patriot Act"). To Tenant's knowledge, neither Tenant
nor any of its Affiliates is in violation of taking any action
which could reasonably be expected to result in any action,
proceeding, investigation, charge, claim, report or notice being
filed, commenced, or threatened against Tenant or any of its
Affiliates alleging any violation of, or failure to comply with,
the Executive Order or the Patriot Act. For the purposes of this
Section 14.19, the term "Affiliates" shall mean all affiliated
and related entities of Tenant, as well as all officers, directors,
managers, shareholders, partners, members or other parties having
an interest in Tenant or its affiliated or related entities (except
that if the company is publicly traded on a nationally recognized
stock exchange, then shareholders, partners and lenders with less
than a twenty-five percent (25%) ownership interest shall be
excluded).

 

(b)           Neither
Tenant nor its Affiliates is a "Prohibited Person," which is
defined as follows: (i) a person or entity that is listed in
the Annex to, or is otherwise subject to the provisions of the
Executive Order and relating to blocking property and prohibiting
transactions with persons who commit, threaten to commit, or
support terrorism; (ii) a person or entity owned or controlled
by, or acting for or on behalf of, any person or entity that is
listed in the Annex to, or is otherwise subject to the provisions
of, the Executive Order; (iii) a person or entity with whom
Landlord is prohibited from dealing or otherwise engaging in any
transaction by any terrorism or money laundering law, including the
Executive Order and the Patriot Act; (iv) a person or entity
who commits, threatens, or conspires to commit or supports
"terrorism" as defined in the Executive Order; (v) a person or
entity that is named as a "specially designated national and
blocked person" on the most current list published by the U.S.
Treasury Department Office of Foreign Assets Control at its
official website, http://www.treas.gov/ofac/t11sdn.pdf, or at
any replacement website or other replacement official publication
of such list; and (vi) a person or entity who is affiliated
with a person or entity listed above.

 

(c)           Neither
Tenant nor any of its Affiliates is or will, knowingly
(i) conduct any business or engage in any transaction or
dealing with any Prohibited Person, including the making or
receiving any contribution of funds, goods, or services to or for
the benefit of any Prohibited Person; (ii) deal in, or
otherwise engage in any transaction relating to, any property or
interests in property blocked pursuant to any terrorism or money
laundering law, including the Executive Order and the Patriot Act;
or (iii) engage in or conspire to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any
terrorism or money laundering law, including the Executive Order
and the Patriot Act.

 

(d)           In
connection with any changes of direct or indirect ownership of
Tenant or any of its Affiliates requiring notice to Landlord or
requiring Landlord's consent under Section 8.16, Tenant shall
give written notice to Landlord (i) advising Landlord, in
reasonable detail, as to the proposed ownership change, and
(ii) reaffirming that the representations and warranties set
forth in this Section will remain true and correct. Tenant agrees
to promptly deliver to Landlord (but in any event within ten (10)
days following Landlord's written request) any certification or
other evidence requested from time to time by Landlord in its
reasonable discretion, confirming Tenant's and any of its
Affiliates' compliance with the foregoing terms and
conditions.

 

 

30

 

 

 

14.18        
Relationship.
Nothing contained herein shall be deemed or construed as creating
the relationship of principal and agent or of partnership, or of
joint venture by the parties hereto, it being understood and agreed
that no provision contained in this Lease nor any acts of the
parties hereto shall be deemed to create any relationship other
than the relationship of landlord and tenant.

 

14.19        
Authority of
Tenant. Each individual executing this Lease on behalf of
Tenant represents and warrants that he or she is duly authorized to
deliver this Lease on behalf of Tenant and that this Lease is
binding upon Tenant in accordance with its terms.

 

 

[Remainder of Page Intentionally Left Blank for
Signatures]

 

 

 

31

 

 

IN
WITNESS WHEREOF the parties hereto have caused this Lease to be
executed effective the day and year first above
written.

 

TENANT:

 

NEW AGE
BEVERAGES CORPORATION, a Washington corporation

   

By:
/s/ Gregory A.
Gould

Name:
Gregory A.
Gould

Title:
CFO

 

LANDLORD:

 

40TH STREET PARTNERS,
LLC, a Colorado limited liability company

 

By:
/s/ Will
Gold

Name:
Will
Gold

Title:
Partner

 

 

 

32

 

 

 ADDENDUM

 

THIS
ADDENDUM (“Addendum”) is to that certain lease (the
“Lease”) by and between 40TH STREET PARTNERS,
LLC, a Colorado limited liability company (“Landlord”),
and NEW AGE BEVERAGES CORPORATION, a Washington corporation
(“Tenant”), with respect to the Premises in the
Building. Terms not otherwise defined herein shall have the
respective meaning set forth in the Lease. In the event of any
conflict between the terms and provisions of the Lease and the
terms and provisions of this Addendum, the terms and provisions of
this Addendum shall control.

 

1. 

Renewal Option: Tenant will have the option (the "Renewal Option")
to renew and extend the Term of the Lease for one additional term
of five (5) years (the "Renewal Term") to commence at the
conclusion of the Lease Term as provided in the Addendum. The
Renewal Term will be on the same terms, provisions, and conditions
contained in the Lease, except that as may be otherwise provided
herein, the Premises will be taken in its as-is condition, and the
Basic Rent will be modified for the Renewal Term in accordance with
the terms and conditions set forth herein. Tenant must give
Landlord written notice of its interest in exercising the Renewal
Option for the Renewal Term ("Tenant's Renewal Notice") not less
than nine (9) months and no earlier than twelve (12) months prior
to the expiration of the Lease Term. Failure to notify Landlord
within such time period will void the Renewal Option, and the Lease
shall terminate at the conclusion of the Lease Term. Provided that
Tenant timely delivers to Landlord Tenant's Renewal Notice in
accordance with the foregoing, then on or prior to the date that is
five (5) months prior to the expiration of the Lease Term, Landlord
will notify Tenant of the Basic Rent applicable during the Renewal
Term ("Landlord's Notice"), which shall be established at 95% of
the then Prevailing Market Rental Rate (as hereafter defined), but
in no event less than 3% higher than the then current Basic Rent
rate. If Tenant exercises the Renewal Option described herein,
Tenant will accept the Premises in its "as is" condition without
any remodeling or fix-up work performed or paid for by Landlord. If
Landlord fails to deliver the Landlord's Notice in accordance with
the provisions above, Tenant shall give Landlord a reminder notice
of such failure and Landlord shall have 15 days after receipt of
such reminder notice in which to deliver the Landlord's
Notice.Tenant has 15 days after having been given Landlord's Notice
to exercise the Renewal Option or dispute the rental rate quoted by
Landlord by delivering notice of exercise or dispute to Landlord.
If Tenant exercises the Renewal Option, the Lease Term will be
deemed extended for the Renewal Term on the provisions of the Lease
as amended by the terms of Landlord's Notice and the parties will
execute an amendment evidencing the Renewal Option. If Tenant
disputes Landlord's determination of the Basic Rent rate, Tenant
shall give notice of such dispute ("Dispute Notice") within the
15-day period and the Basic Rent rate shall thereafter be
determined in accordance with Subparagraph F below. If Tenant fails
to timely give Landlord a Dispute Notice, then Tenant shall be
deemed to have exercised and accepted the applicable Renewal Term
upon the terms as set forth in Landlord's Notice. Unless Landlord
timely receives Tenant's Renewal Notice for the Renewal Term in
accordance with paragraph, it will be conclusively deemed that
Tenant has not exercised the Renewal Option and the Lease will
expire in accordance with its terms on the last day of the Lease
Term. Unless expressly waived by Landlord, Tenant's right to
exercise the Renewal Option is conditioned on: (i) no Default by
Tenant existing at the time of exercise or at the time of
commencement of the Renewal Term; (ii) there having been no Default
by Tenant during the Lease Term; (iii) Tenant not having vacated
the Premises or subleased the Premises or assigned its interest
under the Lease as of the commencement of the Renewal Term; and
(iv) Tenant's financial condition not having materially adversely
changed since the Commencement Date. In the event of an assignment
of the Lease or a subletting or vacation of the Premises, or if
there has been a Default by Tenant, as described above, during the
Lease Term, this Renewal Option shall be deemed null and void and
of no further force or effect. The Renewal Option granted hereunder
will be upon the terms of the Lease, except that the Basic Rent
during the Renewal Term will be at the rate as set forth in
Landlord's Notice, unless required to be determined in accordance
with Subparagraph F below.

 

 

33

 

 

Following
giving of Tenant's Dispute Notice, Landlord and Tenant shall
promptly negotiate to determine a mutually acceptable Basic Rent.
If the parties mutually agree upon a new Basic Rent, such agreed
rental rate shall be the Basic Rent applicable during the
particular Renewal Term. If the parties have not agreed within 30
days after the giving of Tenant's Dispute Notice, then within a
20-day period Landlord and Tenant shall each select, at their own
cost, within the foregoing 20-day period, a Qualified Broker and
together such brokers will then select a third Qualified Broker who
shall act as an arbitrator ("Arbitrator"). Such cost of the
Arbitrator shall be split equally between Landlord and Tenant.
Within 10 days after designation of the Arbitrator, Landlord and
Tenant each shall give notice of its determination of the
Prevailing Market Rental Rate (as hereafter defined) supported by
the reasons therefor by delivering copies to each other and the
Arbitrator, under an arrangement for simultaneous exchange of such
determinations. The Arbitrator will review each party's
determination and select the one which most accurately reflects
such Arbitrator's determination of the Prevailing Market Rental
Rate. Such selection shall be final and binding on both parties and
the Basic Rent for the Renewal Term shall be 95% of such
determination. The Arbitrator shall have no right to propose a
middle ground or any modifications of either party's determination.
The Arbitrator's costs incurred in this procedure shall be shared
equally by Landlord and Tenant and shall be fixed when the
Arbitrator is selected. For purposes of this paragraph, "Prevailing
Market Rental Rate" means the annual amount per square foot that a
willing tenant would pay and a willing landlord would accept for
the rental rate following arms-length negotiations with respect to
an Assumed Lease (defined below) under the circumstances then
obtaining. "Assumed Lease" means (i) a renewal lease amendment
having a commencement date within 6 months of Tenant's Notice for
space of approximately the same size, age, condition and utility as
the Premises, for a term equal in length to the Renewal Term; (ii)
a real estate commission is payable with respect to such extension
to the extent a third-party commission with respect to extension is
agreed or obligated to be paid by Landlord; and (iii) taking into
consideration and making adjustments to reflect allowances, if any,
as provided in Landlord's Notice. "Comparable Property" means any
then-existing property in the Aurora, Colorado market area occupied
for industrial purposes with a building that is of a size,
location, quality, age condition, utility and class comparable to,
and with a size and efficiency of floor plate, amenities, and with
tenants of a stature reasonably comparable with the Building,
provided that appropriate adjustments shall be made to adjust for
differences in the size, location, age, efficiency of floorplate,
and quality any Comparable Property and the Property. "Qualified
Broker" means a commercial real estate broker of good reputation
who has at least 10 years in commercial leasing in the Aurora,
Colorado market area. After exercise of the Renewal Option for the
Renewal Term, or Tenant's failure to timely exercise the Renewal
Option for the Renewal Term, Tenant shall have no further rights to
extend the Term.

 

 

34

 

 

IN
WITNESS WHEREOF the parties hereto have caused this Addendum to be
executed effective the day and year first above
written.

 

TENANT:

 

NEW AGE
BEVERAGES CORPORATION, a Washington corporation

  

By:
/s/ Gregory A.
Gould

Name:
Gregory A.
Gould

Title:
CFO

 

LANDLORD:

 

40TH STREET PARTNERS,
LLC, a Colorado limited liability company

 

By:
/s/ Will
Gold

Name:
Will
Gold

Title:
Partner

 

 

 

35

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