Document:

exv10w15

Exhibit 10.15

	STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE — NET AIR COMMERCIAL REAL ESTATE ASSOCIATION
1. Basic Provisions (“Basic Provisions”).
1.1 Parties: This Lease (“Lease”), dated for reference purposes only November 18, 2010 ,
is made by and between SEBCO, Inc., a Washington corporation (“Lessor”)
and Atlantic Diving Supply, Inc., a Virginia corporation
(“Lessee”), (collectively the “Parties”, or individually a “Party”).
1.2(a) Premises: That certain portion of the Project (as defined below), including all
improvements therein or to be provided by Lessor
under the terms of this Lease, commoniy known by the street address of 9220 Activity Road      ,
located in the City of San Diego      , County of San Diego      , State of
California      , with zip code 92126 , as outlined on Exhibit _A attached hereto (“Premises”)
and generally described as (describe briefly the nature of the Premises): An approximately
24,000 square foot
industrial space within a larger 69,125 SF industrial building
In addition to Lessee’s rights to use and occupy the Premises as hereinafter specified, Lessee
shall have non-exclusive rights to any utility raceways of
the building containing the Premises (“Building”) and to the common Areas (as defined in Paragraph
2.7 below), but shall not have any rights to the
roof or exterior walls of the Building or to any other buildings in the Project. The Premises, the
Building, the Common Areas, the land upon which they
are located, along with all other buildings and improvements thereon, are herein collectively
referred to as the “Project.” (See also Paragraph 2)
1.2(b) Parking: Twenty-Five (25) unreserved vehicle parking spaces. (See also Paragraph 2,6)
1.3 Term: Three (3) years and            Zero (0) months (“Original Term”)
commencing            February 1, 2011 (“Commencement Date”) and ending            January 31, 2014
(“Expiration Date”). (See also Paragraph 3)
1.4 Early Possession: If the Premises are available Lessee may have non-exclusive possession of the
Premises commencing
upon full lease execution and completion of Lessor’s improvements
(“Early Possession Date”).
(See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $12,000.00 _ per month (“Base Rent”), payable on the            first
day of each month commencing            February 1, 2011zx . (See also Paragraph 4)
El If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See
Paragraph 51
Lessee’s Share of Common Area Operating Expenses: Thirty-four point seven two            percent
(34 . 7 2%)
(“Lessee’s Share”). In the event that the size of the Premises and/or the Project are modified
during the term of this Lease, Lessor shall recalculate
Lessee’s Share to reflect such modification.
Base Rent and Other Monies Paid Upon Execution:
Base Rent: $12, 000.00 for the period            February 2011 .
Common Area Operating Expenses: $3, 600 . 00 for the period            February 2011zx .
Security Deposit: $12, 731. 00 (“Security Deposit”). (See also Paragraph 5)
Other: $        for

Total Due Upon Execution of this Lease: $28,331. 00 .
1.8 Agreed Use: Adminstrative office, warehouse and distribution of special
operations and tactical gear and any other uses permitted per zoning and consistent with
this type of building in the Miramar area . (See also Paragraph 6)
Insuring Party. Lessor is the “Insuring Party”. (See also Paragraph 8)
Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (the “Brokers”) and brokerage relationships
exist in this transaction
(check applicable boxes):
El CB Richard Ellis represents Lessor exclusively (“Lessor’s Broker”);
[3 Cushman & Wakefield represents Lessee exclusively (“Lessee’s Broker”); or
? represents both Lessor and Lessee (“Dual Agency”).
(b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall
pay to the Brokers the
brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the sum
of per separate agreement or
% of the total Base Rent for the brokerage services rendered by the Brokers).
1.11 Guarantor. The obligations of the Lessee under this Lease are to be guaranteed by            N/A
(“Guarantor”). (See also Paragraph 37)
1.12 Attachments. Attached hereto are the following, all of which constitute a part of this Lease:
0 an Addendum consisting of Paragraphs 50 through 53 ;
0 a oito plan a floor plan depicting the Premises (Exhibit “A”);
a site plan depicting the Project;
a current set of the Rules and Regulations for the Project;
a current set of the Rules and Regulations adopted by the owners’ association;
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	D a Work Letter;
? other (specify);
2. Premises.
Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for
the term, at the rental, and
upon all of the terms, covenants and conditions set forth in this Lease. While the approximate
square footage of the Premises may have been used in
the marketing of the Premises for purposes of comparison, the Base Rent stated herein is NOT tied
to square footage and is not subject to adjustment
should the actual size be determined to be different. NOTE: Lessee is advised to verify the
actual size prior to executing this Lease.
Condition. Lessor shall deliver that portion of the Premises contained within the Building (“Unit”)
to Lessee broom clean and free
of debris on the Commencement Date or the Early Possession Date, whichever first occurs (“Start
Date”), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty
days following the Start Date, warrants that the existing
electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems
(“HVAC”), loading doors, sump pumps, if any, and all other
such elements in the Unit, other than those constructed by Lessee, shall be in good operating
condition on said date, that the structural elements of the
roof, bearing walls and foundation of the Unit shall be free of material defects, and that the Unit
does not contain hazardous levels of any mold or fungi
defined as toxic under applicable state or federal law. If a non-compliance with such warranty
exists as of the Start Date, or if one of such systems or
elements should malfunction or fail within the appropriate warranty period, Lessor shall, as
Lessor’s sole obligation with respect to such matter, except
as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting
forth with specificity the nature and extent of such
non-compliance, malfunction or failure, rectify same at Lessor’s expense. The warranty periods
shall be as follows: (i) 6 months as to the HVAC
systems, and (ii) 30 days as to the remaining systems and other elements of the Unit. If Lessee
does not give Lessor the required notice within the
appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be
the obligation of Lessee at Lessee’s sole cost and
expense (except for the repairs to the fire sprinkler systems, roof, foundations, and/or bearing
walls — see Paragraph 7).
Compliance. Lessor warrants that to the best of its knowledge the improvements on the Premises and
the Common Areas comply
with the building codes that were in effect at the time that each such improvement, or portion
thereof, was constructed, and also with all applicable laws,
covenants or restrictions of record, regulations, and ordinances in effect on the Start Date
(“Applicable Requirements”). Said warranty does not apply
to the use to which Lessee will put the Premises, modifications which may be required by the
Americans with Disabilities Act or any similar laws as a
result of Lessee’s use (see Paragraph 49), or to any Alterations or Utility Installations (as
defined in Paragraph 7.3(a)) made or to be made by Lessee.
NOTE: Lessee is responsible for determining whether or not the Applicable Requirements and
especially the zoning are appropriate for
Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be allowed.
If the Premises do not comply with said
warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from
Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Lessor’s expense. If Lessee does not give
Lessor written notice of a non-compliance with this
warrant
y within 6 months following the Start Date, correction of that non-compliance shall be the
obligation of Lessee at Lessee’s sole cost and
expense. If tho Applicable RoquiromentG are horoafter changed eo as to require- during the- torm
of thic Loaoo tho construction of an addition to Dr an
alteration of the- Unit, Promisee and/or Building, tho romodiation of any Hazardous Subetanco, or
tho roinforcomont or other physical modification of tho
Unit, Promisee and/or Building (“Capital Expenditure”), LesGor and Lqggoq oholl allocato tho coot
of such work og follows:
(a) Subject to Paragraph 2.3(o) below, if ouch Capital Exponditurec are roquired as a roGult of tho
cpcoific and unique ugo of
the Premicos by Lessee ae compared with U6es by tonants in general, Losses shall bo fully
responsible for the cost thoreof, provided, however that if such Capital Expondituro is roquirod
during tho bet 2 yoorc of this Loaoo and the cost thoroof exceeds 6 months’ Basa Ront, Loccoo may
inctoad torminato this Looso unlonc Loocor notifioD Loocoo, in writing, within 10 daye oftor
receipt of Loceoo’s termination notico thot Locsor hac olootod to pay tho difforonce between tho
actual ooGt thereof and tho amount equal to 6 months’ Baso Rent.—If Lossee olootG termination,
Loccoo shall immodiatoly ceaso tho ueo of the Promisoo which roquiroc ouoh Capital Expondituro and
delivor to Lescor writlon notice spocifying a tormination date at loact 00 dayc thereafter.—Suoh
tormination dato chall, howovor, in no evont bo oarlior than tho last day that Lessee- could
logally utilize tho Premicos without Gommoncing ouch Capitol Expondituro-
(b) If such Capital Expenditure is not tho rocult of tho spadfic and uniquo use of the
Promises by Lqccoo (such as,
govornmontally mandatod coiomic modificationc), than LooGor chall pay for cuoh Capital Expondituro
and Lossoo shall only be obligatod to pay, oooh month during tho remainder of tha torm of this
Loaso or any oxtonsion theroof, on tho dato that on whiGh tho Baco Ront is duo, on amount equal to
1*14th of tho portion of cuoh costs reasonably attributablo to tho Promieos. Losoqo chall pay
Intorost on tho balance but may prepay its obligation at any time. If, howover, cuoh Capital
Expenditure is required during tho last 2 ycare of thic LoaGO or if Lossor reasonably dotorminoc
that it is not ooonomically foadblo to pay itc chare thoreof, Loccor chall have tho option to
terminato this LeaGO upon 90 dayc prior writton notico to Loccoo unlocG Looooo notifioc LocGor, in
writing, within 10 daye aftor rocoipt of Loccor’c tormination notico that Logcoo will pay for cuch
Capital Expondituro. If Loceor dogs not elect to
terminate, and fails to tondor its share of any such Capital Expondituro, Lessee may advance such
funds and deduct camo, with Intoroet, from Ront until LoGoor’s share of cuch costs havo boen fully
paid. If Locgoo iG unable to finance Locsor’G chare, or if tho balanco of tho Ront duo and payablo
for tho remainder of thie Loaee ic not Guffioiont to fully roimburso Loceee on an offset baoio,
Locsso chall have the right to torminato thic Loaoo upon 30 dayc writton notice to LeGGor.
(g) Notwithetanding the abovo, tho provisions concerning Capital Expondituros are intandod to
apply only to non voluntary,
unoxpoctod, and now Applicablo Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Lessee shall either: (i) immediately cease
such changed use or intensity of use and/or take such other steps as may be necessary to eliminate
the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own
expense. Lessee shall not have any right to terminate this Lease.
Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect
and
measure the Premises, (b) it
has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition
of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements and the Americans with
Disabilities Act), and their suitability for Lessee’s intended use, (c) Lessee has made such
investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to its occupancy of the
Premises, (d) it is not relying on any representation as to the
size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not
material to Lessee’s decision to lease the Premises
and pay the Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers have made any
oral or written representations or warranties with
respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges
that: (i) Brokers have made no representations,
promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the
Premises, and (ii) it is Lessor’s sole responsibility to
investigate the financial capability and/or suitability of all proposed tenants.
Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of no force
or effect if immediately
prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee
shall be responsible for any necessary corrective
work.
Vehicle Parking. Lessee shall be entitled to the free use during the initial term and any
extended term of the number of parking
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	spaces specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to
time by Lessor for parking. Lessee shall not use more parking spaces than said number. Said parking
spaces shall be used for parking by vehicles no larger than full-size passenger automobiles or
pick-up trucks, herein called “Permitted Size Vehicles.” Lessor may regulate the loading and
unloading of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles
other than Permitted Size Vehicles may be parked in the Common Area without the prior written
permission of Lessor. In addition:
Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or
Lessee’s employees,
suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas
other than those designated by Lessor for such
activities.
Lessee shall not service or store any vehicles in the Common Areas.
If Lessee permits or allows any of the prohibited activities described in this Paragraph 2.6, then
Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may have, to remove or
tow away the vehicle involved and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.
Common Areas — Definition. The term “Common Areas” is defined as all areas and facilities outside
the Premises and within the
exterior boundary line of the Project and interior utility raceways and installations within the
Unit that are provided and designated by the Lessor from
time to time for the general non-exclusive use of Lessor, Lessee and other tenants of the Project
and their respective employees, suppliers, shippers,
customers, contractors and invitees, including parking areas, loading and unloading areas, trash
areas, roadways, walkways, driveways and
landscaped areas.
Common Areas — Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its
employees, suppliers, shippers,
contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use,
in common with others entitled to such use, the
Common Areas as they exist from time to time, subject to any rights, powers, and privileges
reserved by Lessor under the terms hereof or under the
terms of any rules and regulations or restrictions governing the use of the Project. Under no
circumstances shall the right herein granted to use the
Common Areas be deemed to include the right to store any property, temporarily or permanently, in
the Common Areas. Any such storage shall be
permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent
may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to
such other rights and remedies that it may have, to
remove the property and charge the cost to Lessee, which cost shall be immediately payable upon
demand by Lessor.
Common Areas — Rules and Regulations. Lessor or such other person(s) as Lessor may appoint shall
have the exclusive control
and management of the Common Areas and shall have the right, from time to time, to establish,
modify, amend and enforce reasonable rules and
regulations (“Rules and Regulations”) for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and
the preservation of good order, as well as for the convenience of other occupants or tenants of the
Building and the Project and their invitees. Lessee
agrees to abide by and conform to all such Rules and Regulations, and shall use its best efforts to
cause its employees, suppliers, shippers, customers,
contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the
non-compliance with said Rules and Regulations by
other tenants
 of the Project.
Common Areas — Changes. Lessor shall have the right, in Lessor’s sole discretion, from time to
time:
To make changes to the Common Areas, including, without limitation, changes in the location, size,
shape and number of
driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas, walkways and
utility raceways;
To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access
to the Premises
remains available;
To designate other land outside the boundaries of the Project to be a part of the Common Areas;
To add additional buildings and improvements to the Common Areas;
To use the Common Areas while engaged in making additional improvements, repairs or alterations to
the Project, or any
portion thereof; and
To do and perform such other acts and make such other changes in, to or with respect to the Common
Areas and Project
as Lessor may, in the exercise of sound business judgment, deem to be appropriate.
3. Term.
Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in
Paragraph 1.3.
Early Possession. Any provision herein granting Lessee Early Possession of the Premises is
subject to and conditioned upon the
Premises being available for such possession prior to the Commencement Date. Any grant of Early
Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base Rent and
common area operating expenses shall be abated for the period of such Early Possession. All other
terms of this Lease (including but not limited to the
obligationo to pay Loggoo’s Sharo of Common Aron Qporatisg Exponeos, Real Proporty Taxoe and
insurance premiums and to maintain tho Promicoe)
shall be in effect during such period. Any such Early Possession shall not affect the Expiration
Dale. Upon Lessor’s execution of the lease, a fully signed lease shall be emailed to Lessee within
three (3) days. Commencing January 15, 2011, provided Lessee doe& not interfere with Lessor’s
Improvements (Section 50 of the lease) Lessee may move FF&E and product into the Premises.
Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver
possession of the Premises to
Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession
as agreed, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or change the
Expiration Date. Lessee shall not, however, be obligated to pay Rent
or perform its other obligations until Lessor delivers possession of the Premises and any period of
rent abatement that Lessee would otherwise have
enjoyed shall run from the date of the delivery of possession and continue for a period equal to
what Lessee would otherwise have enjoyed, but minus
any days of delay caused by the acts or omissions of Lessee. If possession is not delivered
within 60 days after the Commencement Date, Lessee
may, at its option, by notice in writing within 10 days after the end of such 60 day period, cancel
this Lease, in which event the Parties shall be
discharged from all obligations hereunder. If such written notice is not received by Lessor within
said 10 day period, Lessee’s right to cancel shall
terminate. Except as otherwise provided, if possession is not tendered to Lessee by the
Commencement Date and Lessee does not terminate this
Lease, as aforesaid, any period of rent abatement that Lessee would otherwise have enjoyed shall
run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts or
omissions of Lessee. If possession of the Premises is not delivered within 4 months after the
Commenc
ement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.
Lessee Compliance. Lessor shall not be required to tender possession of the Premises to Lessee
until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence,
Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor’s election to withhold possession
pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other
conditions prior to or concurrent with the Start Date,
the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
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	4. Rent.
4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease
(except for the Security Deposit) are
deemed to be rent (“Rent”).
4.2 Common Area Operating Expenses. Lessee shall pay to Lessor during the term hereof, in addition
to the Base Rent, Lessee’s
Share (as specified in Paragraph 1.6) of all Common Area Operating Expenses, as hereinafter
defined, during each calendar year of the term of this
Lease, in accordance with the following provisions:
(a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as all costs incurred
by Lessor relating
to the ownership and operation of the Project, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good order and condition , and if
necessary the
replacement, of the following:
(aa) The Common Areas and Common Area improvements, including parking areas, loading and
unloading areas, trash areas, roadways, parkways, walkways, driveways, landscaped areas, bumpers,
irrigation systems, Common Area lighting facilities, fences and gates, elevators, roofs, and roof
drainage systems.
(bb) Exterior signs and any tenant directories,
(cc) Any fire sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to service the Common Areas and any
utilities not separately
metered.
(iii) The cost of trash disposal, pest control services, property management, security services,
owners’ association
dues and fees, the cost to repaint the exterior of any structures and the cost of any environmental
inspections.
(iv) Reserves set aside for maintenance, repair and/or replacement of Common Area improvements
and
equipment.
(v) Real Property Taxes (as defined in Paragraph 10).
(vi) The cost of the premiums for the insurance maintained by Lessor pursuant to Paragraph 8.
(vii) Any deductible portion of an insured loss concerning the Building or the Common
Areas.
(viii) Auditors’, accountants’ and attorneys’ fees and costs related to the operation,
maintenance, repair and replacement of the Project.
(ix) The cost of any capital improvement to the Building or the Project not covered under the
provisions of
Paragraph 2.3 provided; however, that Lessor shall allocate the cost of any such capital
improvement over a 12 year period and Lessee shall not be required to pay more than Lessee’s Share
of 1/144th of the cost of such capital improvement in any given month.
(x) The cost of any other services to be provided by Lessor that are stated elsewhere in this Lease
to be a
Common Area Operating Expense.
Any Common Area Operating Expenses and Real Property Taxes that are specifically attributable to
the Unit, the
Building or to any other building in the Project or to the operation, repair and maintenance
thereof, shall be allocated entirely to such Unit, Building, or
other building. However, any Common Area Operating Expenses and Real Property Taxes that are not
specifically attributable to the Building or to any
other building or to the operation, repair and maintenance thereof, shall be equitably allocated by
Lessor to all buildings in the Project.
The inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(a) shall
not be deemed to impose
an obligation upon Lessor to either have said improvements or facilities or to provide those
services unless the Project already has the same, Lessor
already provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or
some of them.
Lessee’s Share of Common Area Operating Expenses is payable monthly on the same day as the Base
Rent is due
hereunder. The amount of such payments shall be based on Lessor’s estimate of the annual Common
Area Operating Expenses. Within 60 days after
written request (but not mo
re than once each year) Lessor shall deliver to Lessee a reasonably
detailed statement showing Lessee’s Share of the
actual Common Area Operating Expenses incurred during the preceding year. If Lessee’s payments
during such year exceed Lessee’s Share, Lessor
shall credit the amount of such over-payment against Lessee’s future payments. If Lessee’s
payments during such year were less than Lessee’s
Share, Lessee shall pay to Lessor the amount of the deficiency within 10 days after delivery by
Lessor to Lessee of the statement.
Common Area Operating Expenses shall not include any expenses paid by any tenant directly to third
parties, or as to
which Lessor is otherwise reimbursed by any third party, other tenant, or insurance proceeds.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the
United States, without offset or
deduction (except as specifically permitted in this Lease), on or before the day on which it is
due. All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall
not constitute a waiver and Lessee shall be obligated
to pay the amount set forth in this Lease. Rent for any period during the term hereof which is for
less than one full calendar month shall be prorated
based upon the actual number of days of said month. Payment of Rent shall be made to Lessor at its
address stated herein or to such other persons or
place as Lessor may from time to time designate in writing. Acceptance of a payment which is less
than the amount then due shall not be a waiver of
Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of any check so
stating. In the event that any check, draft, or other
instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay
to Lessor the sum of $25 in addition to any Late
Charge and Lessor, at its option, may require all future Rent be paid by cashier’s check.
Payments will be applied first to accrued late charges and
attorney’s fees, second to accrued interest, then to Base Rent and Common Area Operating Expenses,
and any remaining amount to any other
outstanding charges or costs.
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as
security for
Lessee’s faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this
Lease, Lessor may use, apply or retain all or any portion
of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be
due in the future, and/ or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any
portion of the Security Deposit, Lessee shall within 10 days after written request therefor deposit
monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. If the Base Rent increases during the term of
this Lease, Lessee shall, upon written request from
Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the
increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the
Agreed Use be amended to accommodate a material
change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the
right to increase the Security Deposit to the
extent necessary, in Lessor’s reasonable judgment, to account for any increased wear and tear that
the Premises may suffer as a result thereof. If a
change in control of Lessee occurs during this Lease and following such change the financial
condition of Lessee is, in Lessor’s reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be
suffici
ent to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition. Lessor shall not be
required to keep the Security Deposit separate from its
general accounts. Within 90 days after the expiration or termination of this Lease, Lessor shall
return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear
interest or to be prepayment for any monies to be paid
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	by Lessee under this Lease.
6. Use.
Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use
which is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a
manner that is unlawful, creates damage, waste or a
nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties.
Other than guide, signal and seeing eye dogs, Lessee
shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall
not unreasonably withhold or delay its consent to any
written request for a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the Building or the mechanical or
electrical systems therein, and/or is not significantly more burdensome to the Project. If Lessor
elects to withhold consent, Lessor shall within 7 days
after such request give written notification of same, which notice shall include an explanation of
Lessor’s objections to the change in the Agreed Use.
Hazardous Substances.
Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall mean
any product,
substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either
by itself or in combination with other materials
expected to be on the Premises, is either: (i) potentially injurious to the public health, safety
or welfare, the environment or the Premises, (ii) regulated
or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to
any governmental agency or third party under any applicable
statute or common iaw theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any
products, by-products or fractions thereof. Lessee shall not engage in any activity in or on the
Premises which constitutes a Reportable Use of
Hazardous Substances without the express prior written consent of Lessor and timely compliance (at
Lessee’s expense) with all Applicable
Requirements. “Reportable Use” shall mean (i) the installation or use of any above or below
ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or
with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or (iii) the presence
at the Premises of a Hazardous Substance with respect
to which any Applicable Requirements requires that a notice be given to persons entering or
occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the
Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household
cleaning materials, so long as such use is in
compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the
Premises or neighboring property to any meaningful
risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor
may condition its consent to any Reportable Use upon
receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the
public, the Premises and/or the environment against
damage, contamination, injury and/or liability, including, but not limited to, the installation
(and removal on or before Lease expiration or termination) of
protective modifications (such as concrete encasements) and/or increasing the Security Deposit.
Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous
Substance has come to
be located in, on, under or about the Premises, other than as previously consented to by Lessor,
Lessee shall immediately g
ive written notice of such
fact to Lessor, and provide Lessor with a copy of any report, notice, claim or other documentation
which it has concerning the presence of such
Hazardous Substance.
Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on,
under, or about the Premises (including through the plumbing or sanitary sewer system) and shall
promptly, at Lessee’s expense, comply with all
Applicable Requirements and take all investigatory and/or remedial action reasonably recommended,
whether or not formally ordered or required, for
the cleanup of any contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or
materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought
onto the Premises during the term of this Lease, by
or for Lessee, or any third party.
Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its agents, employees,
lenders and ground
lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities,
judgments, claims, expenses, penalties, and attorneys’
and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises
by or for Lessee, or any third party invitee of
Leesee (provided, however, that Lessee shall have no liability under this Lease with respect to
underground migration of any Hazardous Substance
under the Premises from areas outside of the Project not caused or contributed to by Lessee).
Lessee’s obligations shall include, but not be limited to,
the effects of any contamination or injury to person, properly or the environment created or
suffered by Lessee, and the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or termination of this
Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this
Lease with respect
to Hazardous Substances, unless
specifically so agreed by Lessor in writing at the time of such agreement.
Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse
and hold Lessee, its
employees and lenders, harmless from and against any and all environmental damages, including the
cost of remediation, which are suffered as a
direct result of Hazardous Substances on the Premises prior to Lessee taking possession or which
are caused by the ffsss negligence or willful
misconduct of Lessor, its agents or employees. Lessor’s obligations, as and when required by the
Applicable Requirements, shall include, but not be
limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease.
Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation
measures required by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the
Lessee taking possession, unless such remediation measure is required as a result of Lessee’s use
(including “Alterations”, as defined in paragraph
7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee
shall cooperate fully in any such activities at the
request of Lessor, including allowing Lessor and Lessor’s agents to have reasonable access to the
Premises at reasonable times in order to carry out
Lessor’s investigative and remedial responsibilities.
(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs
during the term of this Lease,
unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation
and remediation thereof required by the Applicable
Requirements and this Lease shall contin
ue in full force and effect, but subject to Lessor’s rights
under Paragraph 6.2(d) and Paragraph 13), Lessor
may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition,
if required, as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to remediate such condition exceeds 12
times the then monthly Base Rent or £100,000, whichever is greater, give written notice to Lessee,
within 30 days after receipt by Lessor of knowledge
of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease
as of the date 60 days following the date of such
notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days
thereafter, give written notice to Lessor of Lessee’s
commitment to pay the amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the
then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said
funds or satisfactory assurance thereof within 30
days following such commitment. In such event, this Lease shall continue in full force and effect,
and Lessor shall proceed to make such remediation
as soon as reasonably possible after the required funds are available. If Lessee does not give such
notice and provide the required funds or assurance
thereof within the time provided, this Lease shall terminate as of the date specified in Lessor’s
notice of termination.
6.3 Lessee’s Compliance with Applicable Requirements. Except as otherwise provided in this Lease,
Lessee shall, at Lessee’s
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	sole expense, fully, diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or rating bureau, and
the recommendations of Lessor’s engineers and/or consultants which relate in any manner to such
Requirements, without regard to whether said Requirements are now in effect or become effective
after the Start Date. Lessee shall, within 10 days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other documents, and other information evidencing
Lessee’s compliance with any Applicable Requirements specified by Lessor, and shall immediately
upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or
actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure
of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall
immediately give written notice to Lessor of: (i) any water damage to the Premises and any
suspected seepage, pooling, dampness or other condition conducive to the production of mold; or
(ii) any mustiness or other odors that might indicate the presence of mold in the Premises.
6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times after
reasonable notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any
such inspections shall be paid by Lessor, unless a
violation of Applicable Requirements, or a Hazardous Substance Condition (see Paragraph 9.1) is
found to exist or be imminent, or the inspection is
requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse
Lessor for the cost of such inspection, so long
as such inspection is reasonably related to the violation or contamination. In addition, Lessee
shall provide copies of all relevant material safety data
sheets (MSDS) to Lessor within 10 days of the receipt of written request therefor.
7, Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. 7.1 Lessee’s Obligations.
In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with
Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14
(Condemnation), Lessee shall, at Lessee’s sole expense,
keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter where
located), and Alterations in good order, condition and
repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the
same, are reasonably or readily accessible to Lessee,
and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior use, the
elements or the age of such portion of the Premises),
including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment,
electrical, lighting facilities, boilers, pressure vessels,
fixtures, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors,
plate glass, and skylights but excluding any items which are
the responsibility of Lessor pursuant to Paragraph 7.2. Lessee, in keeping the Premises in good
order, condition and repair, shall exercise and perform
good maintenance practices, specifically including the procurement and maintenance of the service
contracts required by Paragraph 7.1(b) below.
Lessee’s obligations shall include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part
thereof in good order, condition and state of repair.
Service Contra
cts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with
copies to Lessor, in customary form and substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and
improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler and
pressure vessels, and (iii) clarifiers. However, Lessor
reserves the right, upon notice to Lessee, to procure and maintain any or all of such service
contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof.
Failure to Perform. If Lessee fails to perform Lessee’s obligations under this Paragraph 7.1,
Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such
obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and
Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.
Replacement. Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving
Lessee of liability resulting from Lessee’s failure to exercise and perform good maintenance
practices, if an item described in Paragraph 7.1(b) cannot
be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the cost
thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month
during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such
replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay
Interest on the unamortized balance but may prepay its obligation at any time.
Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating
Expenses), 6 (Use), 7,1 (Lessee’s Obligations), 9 (Damage or Destruction) and 14 (Condemnation),
Lessor, subject to reimbursement pursuant to
Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, exterior roof,
fire sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants,
parking lots, walkways, parkways, driveways,
landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as
well as providing the services for which there is a
Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the
exterior or interior surfaces of exterior walls nor
shall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of the
Premises. Lessee expressly waives the benefit of any
statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.
Utility Installations; Trade Fixtures; Alterations.
Definitions. The term “Utility Installations” refers to all floor and window coverings, air and/or vacuum lines, power
panels, electrical distribution, security and fire protection systems, communication cabling,
lighting fixtures, HVAC equipment, plumbing, and fencing in
or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can
be removed without doing material damage to
the Premises. The term “Alterations” shall mean any modification of the improvements, other than
Utility Installations or Trade Fixtures, whether by
addition or defetion. “Lessee Owned Alterations and/or Utility Installations” are defined as
Alterations and/or Utility Installations made by Lessee
that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
Consent. Lessee shall not make any Alterations o
r Utility Installations to the Premises without
Lessor’s prior written
consent. Lessee may, however, make non-structural Alterations or Utility Installations to the
interior of the Premises (excluding the roof) without such
consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve
puncturing, relocating or removing the roof or any
existing walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the
cumulative cost thereof during this Lease as extended
does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum equal to one month’s
Base Rent in any one year. Notwithstanding the
foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the
roof without the prior written approval of Lessor. Lessor
may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen
and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed
plans. Consent shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both
the permits and the plans and specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other
Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility
Installations shall be performed in a workmanlike manner with
good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built
plans and specifications. For work which costs an
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	amount in excess of one month’s Base Rent, Lessor may condition its consent upon Lessee providing a
lien and completion bond in an amount equal to 150% of the estimated cost of such Alteration or
Utility Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor.
(c) Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished
to or for Lessee at or for use on the Premises, which claims are or may be secured by any
mechanic’s or materialman’s lien against the Premises or any interest therein. Lessee shall give
Lessor not less than 10 days notice prior to the commencement of any work in, on or about the
Premises, and Lessor shall have the right to post notices of non-responsibility. If Lessee shall
contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense
defend and protect itself, Lessor and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall
require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such
contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor
elects to participate in any such action, Lessee shall pay Lessor’s attorneys’ fees and costs.
7.4 Ownership; Removal; Surrender; and Restoration.
Ownership. Subject to Lessor’s right to require removal or elect ownership as hereinafter
provided, all Alterations and
Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to
be the owner of all or any specified part of the Lessee Owned Alterations and Utility
Installations. Unless otherwise instructed per paragraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility Installations shall, at the expiration or
termination of this Lease, become the property of Lessor and be
surrendered by Lessee with the Premises.
Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later
than 30 days prior to the
end of the term of this Lease, Lessor may require that any or all Lessee Owned Alterations or
Utility Installations be removed by the expiration or
termination of this Lease. Lessor may require the removal at any time of all or any part of any
Lessee Owned Alterations or Utility Installations made
without the required consent.
Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier
termination date,
with alt of the improvements, parts and surfaces thereof broom clean and free of debris, and in
good operating order, condition and state of repair,
ordinary wear and tear excepted. “Ordinary wear and tear” shall not include any damage or
deterioration that would have been prevented by good
maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then
Lessee shall surrender the Premises in the same
condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear.
Lessee shall repair any damage occasioned by the
installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the
removal of any storage tank installed by or for Lessee. Lessee shall also completely remove from
the Premises any and all Hazardous Substances
brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from
areas outside of the Project) even if such removal would require Lessee to perform or pay for work
that exceeds statutory requirements. Trade Fixtures
shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee
not removed on or b
efore the Expiration Date or
any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed

	of or retained by Lessor as Lessor may desire.
The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the
express written consent of Lessor shall constitute a
holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
Payment of Premiums. The cost of the premiums for the insurance policies required to be carried
by Lessor, pursuant to
Paragraphs 8.2(b), 8.3(a) and 8.3(b), shall be a Common Area Operating Expense. Premiums for
policy periods commencing prior to, or extending
beyond, the term of this Lease shall be prorated to coincide with the corresponding Start Date or
Expiration Date.
Liability Insurance.
Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of
insurance protecting
Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual
aggregate of not less than $2,000,000. Lessee
shall add Lessor as an additional insured by means of an endorsement at least as broad as the
Insurance Service Organization’s “Additional
Insured-Managers or Lessors of Premises” Endorsement. The policy shall not contain any
intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease as an “insured
contract” for the performance of Lessee’s indemnity
obligations under this Lease. The limits of said insurance shall not, however, limit the liability
of Lessee nor relieve Lessee of any obligation hereunder.
Lessee shall provide an endorsement on its liability policy(ies) which provides that its insurance
shall be primary to and not contributory with any similar
insurance carried by Lessor, whose insurance shall be considered excess insurance only.
Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in
addition to, and not in
lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an
additional insured therein.
8.3 Property Insurance — Building, Improvements and Rental Value.
Building and Improvements. Lessor shall obtain and keep in force a policy or policies of
insurance in the name of
Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage
to the Premises. The amount of such insurance
shall be equal to the full insurable replacement cost of the Premises, as the same shall exist from
time to time, or the amount required by any Lender,
but in no event more than the commercially reasonable and available insurable value thereof. Lessee
Owned Alterations and Utility Installations, Trade
Fixtures, and Lessee’s personal property shall be insured by Lessee not by Lessor. If the
coverage is available and commercially appropriate, such
policy or policies shall insure against all risks of direct physical loss or damage (except the
perils of flood and/or earthquake unless required by a
Lender), including coverage for debris removal and the enforcement of any Applicable Requirements
requiring the upgrading, demolition, reconstruction
or replacement of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where
the Premises are located. If
such insurance coverage has a deductible clause, the deductible amount
shall not exceed $1,000 per occurrence.
Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name of
Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of
indemnity for an additional 180 days (“Rental Value
insurance”!. Said insurance shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period.
Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the Building and for
the Common Areas or other buildings in the Project if said increase is caused by Lessee’s acts,
omissions, use or occupancy of the Premises.
Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned
Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease.
8.4 Lessee’s Property; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s
personal property, Trade
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	Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full
replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds
from any such insurance shall be used by Lessee for the replacement of personal property. Trade
Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with
written evidence that such insurance is in force.
Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance
in amounts as will
reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly
insured against by prudent lessees in the business of Lessee
or attributable to prevention of access to the Premises as a result of such perils.
No Representation of Adequate Coverage. Lessor makes no representation that the Eimits or forms of coverage of
insurance specified herein are adequate to cover Lessee’s property, business operations or obligations under this Lease.
Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to
transact business in the state
where the Premises are located, and maintaining during the policy term a “General Policyholders
Rating” of at least A-, VI, as set forth in the most
current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything
which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver
to Lessor certified copies of policies of such insurance or
certificates evidencing the existence and amounts of the required insurance. No such policy shall
be cancelable or subject to modification except after
30 days prior written notice to Lessor. Lessee shall, at least 10 days prior to the expiration of
such policies, furnish Lessor with evidence of renewals or
“insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be
payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year,
or the length of the remaining term of this Lease,
whichever is less. If either Party shall fail to procure and maintain the insurance required to
be carried by it, the other Party may, but shall not be
required to, procure and maintain the same.
Waiver of Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each
hereby release and relieve the
other, and waive their entire right to recover damages against the other, for loss of or damage to
its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by
the amount of insurance carried or required, or by any
deductibles applicable hereto. The Parties agree to have their respective property damage insurance
carriers waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.
Indemnity. Except for Lessor’s groGC negligence or willful misconduct, Lessee shall indemnify,
protect, defend and hold harmless
the Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and Lenders, from
and against any and all claims, loss of rents and/or
damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities
arising out of, involving, or in connection with, the use
and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor
by reason of any of the foregoing matters, Lessee
shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor
and Lessor shall cooperate with Lessee in such
defense. Lessor need not have first paid any such claim in order to be
 defended or indemnified.
Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of
this Lease by Lessor or its
agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or
damage to the person or goods, wares, merchandise or
other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person
in or about the Premises, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air
quality, the presence of mold or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or
lighting fixtures, or from any other cause, whether the said
injury or damage results from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places, (ii) any
damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor
or its agents to enforce the provisions of any other
lease in the Project, or (iii) injury to Lessee’s business or for any loss of income or profit
therefrom. Instead, it is intended that Lessee’s sole recourse in
the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions of paragraph 8.
Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or
maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by
this Lease, the extent of which will be extremely
difficult to ascertain. Accordingly, for any month or portion thereof that Lessee does not maintain
the required insurance and/or does not provide Lessor
with the required binders or certificates evidencing the existence of the required insurance, the
Base Rent shall be automatically increased, without any
requirement for notice to Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever is greater. The parties agree that such
increase in Base Rent represents fair and reasonable compensation for the additional risk/costs
that Lessor will incur
by reason of Lessee’s failure to
maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver
of Lessee’s Default or Breach with respect to the
failure to maintain such insurance, prevent the exercise of any of the other rights and remedies
granted hereunder, nor relieve Lessee of its obligation to
maintain the insurance specified in this Lease.
9. Damage or Destruction.
9.1 Definitions.
“Premises Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than
l_essee Owned Alterations and Utility Installations, which can reasonably be repaired in 3 months
or less from the date of the damage or destruction,
and the cost thereof does not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify
Lessee in writing within 30 days from the date of the
damage or destruction as to whether or not the damage is Partial or Total. Notwithstanding the
foregoing, Premises Partial Damage shall not include
damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair
or replace pursuant to the provisions of Paragraph 7.1.
“Premises Total Destruction” shall mean damage or destruction to the improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be
repaired in 3 months or less from the date of the
damage or destruction and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor
shall notify Lessee in writing within 30 days from
the date of the damage or destruction as to whether or not the damage is Partial or Total.
“Insured Loss” shall mean damage or destruction to improveme
nts on the Premises, other than Lessee Owned
Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by she insurance described in Paragraph
8.3(a), irrespective of any deductible amounts or coverage limits involved.
“Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at the
time of the occurrence to their condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of
Applicable Requirements, and without deduction for depreciation.
“Hazardous Substance Condition” shall mean the occurrence or discovery of a condition involving the presence of, or
a contamination by, a Hazardous Substance, in, on, or under the Premises which requires restoration.
9.2 Partial Damage — Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs,
then Lessor shall, at Lessor’s
expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee Owned Alterations and
Utility Installations) as soon as reasonably possible
and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at
Lessor’s election, make the repair of any damage or
destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall
make any applicable insurance proceeds available to
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	Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if the required
insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the
Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete
said repairs. In the event, however, such shortage was due to the fact that, by reason of the
unique nature of the improvements, full replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the shortage in insurance
proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written
notice of such shortage and request therefor. If Lessor receives said funds or adequate assurance
thereof within said 10 day period, the party responsible for making the repairs shall complete them
as soon as reasonably possible and this Lease shall remain in full force and effect. If such funds
or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of
any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage
due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party.
Partial Damage — Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss
occurs, unless caused by a
negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s
expense), Lessor may either: (i) repair such damage as
soon as reasonably possible at Lessor’s expense, in which event this Lease shall continue in full
force and effect, or (ii) terminate this Lease by giving
written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of
such damage. Such termination shall be effective 60
days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee
shall have the right within 10 days after receipt of the
termination notice to give written notice to Lessor of Lessee’s commitment to pay for the repair of
such damage without reimbursement from Lessor.
Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after
making such commitment. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds are
available. If Lessee does not make the required commitment, this Lease shall terminate as of the
date specified in the termination notice.
Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction
occurs, this Lease shall terminate
60 days following such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.
Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage
for which the cost to repair
exceeds one month’s Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease
effective 60 days following the date of occurrence of
such damage by giving a written termination notice to Lessee within 30 days after the date of
occurrence of such damage, No
twithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by,
(a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the
repairs on or before the earlier of (i) the date which is 10 days after Lessee’s receipt of
Lessor’s written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly exercises such option
during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s
commercially reasonable expense, repair such
damage as soon as reasonably possible and this Lease shall continue in full force and effect. If
Lessee fails to exercise such option and provide such
funds or assurance during such period, then this Lease shall terminate on the date specified in the
termination notice and Lessee’s option shall be
extinguished.
Abatement of Rent; Lessee’s Remedies.
Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous
Substance
Condition for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the
period required for the repair, remediation or
restoration of such damage shall be abated in proportion to the degree to which Lessee’s use of the
Premises is impaired, but not lo oxGood tho
procosds received from tho Rontal Value insurance. All other obligations of Lessee hereunder shall
be performed by Lessee, and Lessor shall have no
liability for any such damage, destruction, remediation, repair or restoration except as provided
herein.
Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a
substantial and
meaningful way, such repair or restoration within 90 days after such obligation shall accrue,
Lessee may, at any time prior to the commencement of
such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has
actual notice, of Lessee’s election to terminate this
Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such
notice and such repair or restoration is not commenced
within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If
the repair or restoration is commenced within such 30
days, this Lease shall continue in full force and effect. “Commence” shall mean either the
unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or
Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee
to Lessor. Lessor shall, in addition, return
to Lessee so much of Lessee’s Security Deposit as has not been, or is not then required to be, used
by Lessor.
10. Real Property Taxes.
Definition. As used herein, the term “Real Property Taxes” shall include any form of assessment;
real estate, general, special,
ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate
taxes); improvement bond; and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to
other income therefrom, and/or Lessor’s business of
leasing, by any authority having the direct or indirect power to tax and where the funds are
generated with reference to the Project address and where
the proceeds so generated are to be applied by the city, county or other local taxing authority of
a jurisdiction within which the Project is located. The
term “Real Property Taxes” shall also inclu
de any tax, fee, levy, assessment or charge, or any
increase therein: (i) imposed by reason of events
occurring during the term of this Lease, including but not limited to, a change in the ownership of
the Project, (ii) a change in the improvements thereon,
and/or (iii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to
this Lease. In calculating Real Property Taxes for
any calendar year, the Real Property Taxes for any real estate tax year shall be included in the
calculation of Real Property Taxes for such calendar
year based upon the number of days which such calendar year and tax year have in common.
Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real
Property Taxes applicable to the
Project, and said payments shall be included in the calculation of Common Area Operating Expenses
in accordance with the provisions of Paragraph
4.2.
Additional Improvements. Common Area Operating Expenses shall not include Real Property Taxes
specified in the tax
assessor’s records and work sheets as being caused by additional improvements placed upon the
Project by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2 hereof. Lessee shall,
however, pay to Lessor at the time Common Area
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Properly
Taxes if assessed solely by reason of Alterations,
Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee’s request
or by reason of any alterations or improvements to the
Premises made by Lessor subsequent to the execution of this Lease by the Parties.
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	Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the
Building shall be an equitable
proportion of the Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by
Lessor from the respective valuations assigned in the assessor’s work sheets or such other
information as may be reasonably available. Lessor’s
reasonable determination thereof, in good faith, shall be conclusive.
Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and
levied upon Lessee Owned
Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal
property of Lessee contained in the Premises. When
possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor. If any of
Lessee’s said property shall be assessed with Lessor’s real
property, Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after
receipt of a written statement setting forth the taxes
applicable to Lessee’s property.
11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone,
trash disposal and other utilities and services
supplied to the Premises, together with any taxes thereon. Notwithstanding the provisions of
Paragraph 4.2, if at any time in Lessor’s sote judgment,
Lessor determines that Lessee is using a disproportionate amount of water, electricity or other
commonly metered utilities, or that Lessee is generating
such a large volume of trash as to require an increase in the size of the trash receptacle and/or
an increase in the number of times per month that it is
emptied, then Lessor may increase Lessee’s Base Rent by an amount equal to such increased costs.
There shall be no abatement of Rent and Lessor
shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor
dispute, breakdown, accident, repair or other cause beyond Lessor’s reasonable control or in
cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor’s Consent Required.
Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber
(collectively, “assign or
assignment”) or sublet all or any part of Lessee’s interest in this Lease or in the Premises
without Lessor’s prior written consents which shall not be
unreasonably withheld. Lessor shall grant or deny Leseee’e request to Sublease the Premises within
ten (10) days of the request.
Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange, a
change in the control of
Lessee shall constitute an assignment requiring consent. The transfer, on a cumulative basis, of
2550% or more of the voting control of Lessee shall
constitute a change in control for this purpose.
The involvement of Lessee or its assets in any transaction, or series of transactions (by way of
merger, sale, acquisition,
financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee’s assets occurs,
which results or will result in a reduction of the Net Worth of Lessee by an amount greater than
2550% of such Net Worth as it was represented at the
time of the execution of this Lease or at the time of the most recent assignment to which Lessor
has consented, or as it exists immediately prior to said
transaction or transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lessor
may withhold its consent. “Net Worth of Lessee” shall mean the net
worth of Lessee (excluding any
guarantors) established under generally accepted
accounting principles.
An assignment or subletting without consent shall, at Lessor’s option, be a Default curable after
notice per Paragraph
13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor
elects to treat such unapproved assignment or
subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30
days written notice, increase the monthly Base Rent to
110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment,
(i) the purchase price of any option to purchase the
Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in
effect, and (ii) all fixed and non-fixed rental
adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the
scheduled adjusted rent.
Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages
and/or injunctive
relief.
Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in
Default at the time
consent is requested.
Notwithstanding the foregoing, allowing a de minimis portion of the Premises, ie. 20 square feet or
less, to be used by a
third party vendor in connection with the installation of a vending machine or payphone shall not
constitute a subletting.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
Regardless of Lessor’s consent, no assignment or subletting shall: (i) be effective without the
express written assumption
by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be
performed by Lessee.
Lessor may accept Rent or performance of Lessee’s obligations from any person other than Lessee
pending approval or
disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach.
Lessor’s consent to any assignment or subletting shall not constitute consent to any subsequent assignment or subletting.
In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any
Guarantors or anyone
else responsible for the performance of Lessee’s obligations under this Lease, including any
assignee or sublessee, without first exhausting Lessor’s
remedies against any other person or entity responsible therefore to Lessor, or any security held by Lessor.
Each request for consent to an assignment or subletting shall be in writing, accompanied by
information relevant to
Lessor’s determination as to the financial and operational responsibility and appropriateness of
the proposed assignee or sublessee, including but not
limited to the intended use and/or required modification of the Premises, if any, together with a
fee of $500 as consideration for Lessor’s considering
and processing said request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably
requested. (See also Paragraph 36)
Any assignee of, or sublessee under, this Lease shall, by reason of accepting such assignment,
entering into such
sublease, or entering into possession of the Premises or any portion thereof, be deemed to have
assumed and agreed to conform and comply with
each and every term, covenant, condition and obligation herein to be observed or performed by
Lessee during the term of said assignment or sublease,
other than such obligations as are contrary to or inconsistent with provisions of an assignment or
sublease to which Lessor has specifically consented

to in writing.
(g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to
the original Lessee by this Lease unless such transfer is specifically consented to by Lessor in
writing. (See Paragraph 39.2)
12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions
shall apply to any subletting by
Lessee of all or any part of the Premises and shall be deemed included in all subleases under this
Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on
any sublease, and Lessor
may collect such Rent and apply same toward Lessee’s obligations under this Lease; provided,
however, that until a Breach shall occur in the
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	performance of Lessee’s obligations, Lessee may collect said Rent. In the event that the amount
collected by Lessor exceeds Lessee’s then outstanding obligations any such excess shall be refunded
to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease nor by
reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating
that a Breach exists in the performance of Lessee’s obligations under this Lease, to pay to Lessor
all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from
Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether
such Breach exists, notwithstanding any claim from Lessee to the contrary.
In the event of a Breach by Lessee, Lessor may, at its option, require sublessee to attorn to
Lessor, in which event
Lessor shall undertake the obligations of the sublessor under such sublease from the time of the
exercise of said option to the expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to such sublessor or for any
prior Defau Its or B reaches of su ch s u blessor.
Any matter requiring the consent of the sublessor under a sublease shall also require the consent
of Lessor.
No sublessee shall further assign or sublet alt or any part of the Premises without Lessor’s prior
written consent.
Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who
shall have the right to cure
the Default of Lessee within the grace period, if any, specified in such notice. The sublessee
shall have a right of reimbursement and offset from and
against Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or perform
any of the terms, covenants, conditions or Rules and Regulations under this Lease. A “Breach” is
defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to
cure such Default within any applicable grace period:
The abandonment of the Premises; or the vacating of the Premises without providing a commercially
reasonable level of
security, or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized
as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.
The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by
Lessee hereunder,
whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or
surety bond, or to fulfill any obligation under this Lease
which endangers or threatens life or property, where such failure continues for a period of 3 5
business days following written notice to Lessee. THE
ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER
OF ANY OF
LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of
waste, act or acts
constituting public or private nuisance, and/or an illegal activity on the Premises by Lessee,
where such actions continue for a period of 3 5 business
days following written notice to Lessee.
The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable
Requirements, (ii) the
service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an
Estoppel Certificate or financial statements, (v) a requested
subordination, (vi)&n
bsp;evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 41, (viii) material data safety
sheets (MSDS), or (ix) any other documentation or information which Lessor may reasonably require
of Lessee under the terms of this Lease, where
any such failure continues for a period of 10 days following written notice to Lessee.
A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of the
rules adopted under
Paragraph 2.9 hereof, other than those described in subparagraphs 13.1(a), (b), (c) or (d), above,
where such Default continues for a period of 30 days
after written notice; provided, however, that if the nature of Lessee’s Default is such that more
than 30 days are reasonably required for its cure, then it
shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and
thereafter diligently prosecutes such cure to
completion.
The occurrence of any of the following events: (i) the making of any general arrangement or
assignment for the benefit of
creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto
(unless, in the case of a petition filed against
Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Lessee’s assets
located at the Premises or of Lessee’s interest in this Lease, where possession is not restored to
Lessee within 30 days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises
or of Lessee’s interest in this Lease, where such
seizure is not discharged within 30 days; provided, however, in the event that any provision of
this subparagraph is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the validity of the remaining provisions.
The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was
materially false.
(h) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of
a Guarantor, (ii) the
termination of a Guarantor’s liability with respect to this Lease other than in accordance with the
terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its
guaranty obligation on an anticipatory basis, and Lessee’s failure, within 60 days following
written notice of any such event, to provide written alternative assurance or security, which, when
coupled with the then existing resources of Lessee, equals or exceeds the combined financial
resources of Lessee and the Guarantors that existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10
days after written notice (or in case of an emergency, without notice), Lessor may, at its option,
perform such duty or obligation on Lessee’s behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental
licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and
expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event
of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in
the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this
Lease shall terminate
and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled
to recover from Lessee; (i) the unpaid Rent which had been e
arned at the time of termination; (ii)
the worth at the time of award of the amount by which the unpaid rent which would have been earned
after termination until the time of award exceeds the amount of such rental loss that the Lessee
proves could have been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv) any othor amount
necoooory to componsato Loocor for all the detrimont proximatoly cauead by tho Leccoo’s failure to
porform its obligations undor thie Lease or which in the ordinary courco of things would bo likoly
to rocult thorofrom, including but not limitod to the cost of recovering possession of the
Premises, expenses of reletting, including nocesBary renovation and altoration of tho Promicoe,
reasonable attorneys’ fees, and that portion of any leasing commission paid by Lessor in connection
with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of
the amount referred to in provision (iii) of the immediately preceding sentence shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of the District within
which the Premises are located at the time of award plus one percent. Efforts by Lessor to
mitigate damages caused by Lessee’s Breach of this Lease shall not waive Lessor’s right to recover
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	damages under Paragraph 12. If termination of this Lease is obtained through the provisional remedy
of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and
damages as are recoverable therein, or Lessor may reserve the right to recover all or any part
thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not
previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the
unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such
case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute
shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two
such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in
which event Lessee
may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to
relet, and/or the appointment of a receiver to protect the
Lessor’s interests, shall not constitute a termination of the Lessee’s right to possession.
Pursue any other remedy now or hereafter available under the laws or judicial decisions of the
state wherein the
Premises are located. The expiration or termination of this Lease and/or the termination of
Lessee’s right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring or accruing during
the term hereof or by reason of Lessee’s occupancy of
the Premises.
Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or
paying by Lessor to or for
Lessee of any cash or other bonus, inducement or consideration for Lessee’s entering into this
Lease, all of which concessions are hereinafter referred
to as “Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and faithful
performance of all of the terms, covenants and conditions
of this Lease. Upon termination of the lease for Breach of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by
Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor,
notwithstanding any cubcoquont euro of Gaid
Broach by Locgoo. Tho accoptanco by Locsor of ront or tho euro of the Breach which initiated the
oporotion of this paragraph shall not be deemed a
waiver by Loccor of the provioiono of thiG paragraph unlocc spocifically eo statod in writing by
Lessor at tho time of such acceptance.
Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor
to incur costs not
contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly,
if any Rent shall not be received by Lessor
within 5 days after such amount shall be due, then, without any requirement for notice to Lessee,
Lessee shall immediately pay to Lessor a one-time
late charge equal to 10% of each such overdue amount or S100, whichever is greater. The parties
hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance
of such late charge by Lessor shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent
the exercise of any of the other rights and remedies
gra
nted hereunder. In the event that a late charge is payable hereunder, whether or not
collected, for 3 consecutive installments of Base Rent, then
notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor’s option,
become due and payable quarterly in advance.
Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by
Lessor, when due as to
scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for
non-scheduled payment, shall bear interest from
the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled
payments. The interest (“Interest”) charged shall
be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late
charge provided for in Paragraph 13.4.
Breach by Lessor.
Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a
reasonable time to
perform an obligation required to be performed by Lessor. For purposes of this Paragraph, a
reasonable time shall in no event be less than 3010 days
after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice
specifying wherein such obligation of Lessor has not been performed; provided, however, that if the
nature of Lessor’s obligation is such that more than
30 10 days are reasonably required for its performance, then Lessor shall not be in breach if
performance is commenced within such 3© 10 day period
and thereafter diligently pursued to completion.
Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said
breach within 30
10 days after receipt of said notice, or if having commenced said cure they do not diligently
pursue it to completion, then Lessee may elect to cure said
breach at Lessee’s expense and offset from Rent the actual and reasonable cost to perform such
cure, provided however, that such offset shall not
exceed an amount equal to the greater of one month’s Base Rent or the Security Deposit, reserving
Lessee’s right to reimbursement from Lessor for
any such expense in excess of such offset. Lessee shall document the cost of said cure and supply
said documentation to Lessor.
Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or
sold under the threat of the exercise
of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of
the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the floor area of the Unit, or more than
25% of the parking spaces is taken by Condemnation,
Lessee may, at Lessee’s option, to be exercised in writing within 10 days after Lessor shall have
given Lessee written notice of such taking (or in the
absence of such notice, within 10 days after the condemning authority shall have taken possession)
terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in
proportion to the reduction in utility of the Premises
caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor,
whether such award shall be made as
compensation for diminution in value of the leasehold, the value of the part taken, or for
severance damages; provided, however, that Lessee shall be
entitled to any compensation paid by the condemnor for Lessee’s relocation expenses, loss of
business goodwill and/or Trade Fixtures, without regard
to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All
Alterations and Utility
Installations made to the Premises by
Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and
Lessee shall be entitled to any and all compensation
which is payable therefor. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the
Premises caused by such Condemnation.
Brokerage Fees.
Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above, and
unless Lessor and the Brokers
otherwise agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee
or anyone affiliated with Lessee acquires from Lessor
any rights to the Premises or other premises owned by Lessor and located within the Project, (c) if
Lessee remains in possession of the Premises, with
the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased,
whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in
effect at the time of the execution of this Lease.
Assumption of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be
deemed to have assumed Lessor’s
obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs
1.10, 15, 22 and 31. If Lessor fails to pay to Brokers
any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts
shall accrue Interest. In addition, if Lessor fails to
pay any amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor and
Lessee of such failure and if Lessorfails to pay
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	such amounts within 10 days after said notice, Lessee shall pay said monies to its Broker and
offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor and Lessor’s Broker
for the limited purpose of collecting any brokerage fee owed.
15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and
warrant to the other that it has had no dealings with any person, firm, broker or finder (other
than the Brokers, if any) in connection with this Lease, and that no one other than said named
Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee and Lessor do
each hereby agree to indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed broker, finder or
other similar party by reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys’ fees reasonably incurred with respect thereto.
16. Estoppel Certificates.
Each Party (as “Responding Party”) shall within 10 days after written notice from the other Party
(the “Requesting
Party”) execute, acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current “Estoppel Certificate”
form published by the AIR Commercial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably
requested by the Requesting Party.
If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10
day period, the Requesting
Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the
Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and
(iii) if Lessor is the Requesting Party, not more than one
month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party’s Estoppel Certificate, and the
Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.
If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee and all
Guarantors shall within 10
days after written notice from Lessor deliver to any potential lender or purchaser designated by
Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee’s financial statements
for the past 3 years. All such financial statements shall
be received by Lessor and such lender or purchaser in confidence and shall be used only for the
purposes herein set forth.
17. Definition of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the
time in question of the fee title to the
Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease. In the event of a
transfer of Lessor’s title or interest in the Premises or this
Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved
of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
Severability. The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
Days. Unless otherwi
se specifically indicated to the contrary, the word “days” as used in this
Lease shall mean and refer to calendar days.
Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, or its partners,
members, directors, officers or shareholders, and Lessee shall look to the Premises, and to no
other assets of Lessor, for the satisfaction of any liability
of Lessor with respect to this Lease, and shall not seek recourse against Lessor’s partners,
members, directors, officers or shareholders, or any of their
personal assets for such satisfaction.
Time of Essence. Time is of the essence with respect to the performance of all obligations to be
performed or observed by the Parties under
this Lease.
No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the
Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and
warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to
the nature, quality, character and financial responsibility
of the other Party to this Lease and as to the use, nature, quality and character of the Premises.
Brokers have no responsibility with respect thereto or
with respect to any default or breach hereof by either Party.
Notices.
Notice Requirements. All notices required or permitted by this Lease or applicable law shall be
in writing and may be delivered in
person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by
facsimile transmission, and shall be deemed sufficiently given if served in a manner specified in
this Paragraph 23. The addresses noted adjacent to a
Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notices.
Either Party may by written notice to the other specify a
different address for notice, except that upon Lessee’s taking possession of the Premises, the
Premises shall constitute Lessee’s address for notice. A
copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter
designate in writing.
Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be
deemed given on the date of delivery
shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by
regular mail the notice shall be deemed given 72 hours after
the same is addressed as required herein and mailed with postage prepaid. Notices delivered by
United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the
Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of
receipt (confirmation report from fax machine is
sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a
Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.
24. Waivers.
No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee,
shall be deemed a waiver of any
other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the
same or of any other term, covenant or condition
hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor’s consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the
provision or provisions of this Lease requiring such
consent.
The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be
accepted by Lessor on
account of moneys or damages due Lessor, notwithstanding any qualifying
statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.
THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED
THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH
STATUTE IS
INCONSISTENT WITH THIS LEASE.
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
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	(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a
Lessor or Lessee should from the
outset understand what type of agency relationship or representation it has with the agent or
agents in the transaction. Lessor and Lessee
acknowledge being advised by the Brokers in this transaction, as follows:
(i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the agent
for the Lessor only. A
Lessor’s agent or subagent has the following affirmative obligations: To the Lessor: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and
the Lessor: (a) Diligent exercise of reasonable skills and care in performance of the agent’s
duties, {b) A duty of honest and fair dealing and good faith, (c) A duty to disclose all facts
known to the agent materially affecting the value or desirability of the property that are not
known to, or within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from the other Party
which does not involve the affirmative duties set forth above.
(ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the
Lessor’s agent, even if by agreement the agent may receive compensation for services rendered,
either in full or in part from the Lessor. An agent acting only for a Lessee has the following
affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and
loyalty in dealings with the Lessee. To the Lessee and the Lessor: (a) Diligent exercise of
reasonable skills and care in performance of the agent’s duties, (b) A duty of honest and fair
dealing and good faith, (c) A duty to disclose all facts known to the agent materially affecting
the value or desirability of the property that are not known to, or within the diligent attention
and observation of, the Parties. An agent is not obligated to reveal to either Party any
confidential information obtained from the other Party which does not involve the affirmative
duties set forth above.
(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly or
through one or more associate
licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only
with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the
agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary
duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the
Lessee, (b) Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii).
In representing both Lessor and Lessee, the agent may not without the express permission of the
respective Party, disclose to the other Party that the Lessor will accept rent in an amount less
than that indicated in the listing or that the Lessee is willing to pay a higher rent than that
offered. The above duties of the agent in a real estate transaction do not relieve a Lessor or
Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully
read all agreements to assure that they adequately express their understanding of the transaction.
A real estate agent is a person qualified to advise about real estate. If legal or tax advice is
desired, consult a competent professional.
Brokers have no responsibility with respect to any Default or Breach hereof by either Party. The
Parties agree that no lawsuit or
other legal proceeding involving any breach of duty, error or omission relating to this Lease may
be brought against Broker more than one year after the
Start Date and that the liability (including court costs and attorneys’ f
ees), of any Broker with
respect to any such lawsuit and/or legal proceeding shall
not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be
applicable to any gross negligence or willful misconduct of such Broker.
Lessor and Lessee agree to identify to Brokers as “Confidential” any communication or information
given Brokers that is considered
by such Party to be confidential.
No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof
beyond the expiration or termination of
this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of
the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.
Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all
other remedies at law or in equity.
Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed
or performed by Lessee are both
covenants and conditions. In construing this Lease, all headings and titles are for the
convenience of the Parties only and shall not be considered a
part of this Lease. Whenever required by the context, the singular shall include the plural and
vice versa. This Lease shall not be construed as if
prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both
Parties had prepared it.
Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal
representatives, successors and assigns and
be governed by the laws of the State in which the Premises are located. Any litigation between
the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.
Subordination; Attornment; Non-Disturbance.
Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any
ground lease, mortgage, deed
of trust, or other hypothecation or security device (collectively, “Security Device”), now or
hereafter placed upon the Premises, to any and all advances
made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices
(in this Lease together referred to as “Lender”) shall have no liability or obligation to perform
any of the obligations of Lessor under this Lease. Any
Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its
Security Device by giving written notice thereof to
Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device,
notwithstanding the relative dates of the
documentation or recordation thereof.
Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired
by another upon the foreclosure
or termination of a Security Devise to which this Lease is subordinated (i) Lessee shall, subject
to the non-disturbance provisions of Paragraph 30.3,
attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and
provisions of this Lease, with such new owner for
the remainder of the term hereof, or, at the election of the new owner, this Lease will
automatically become a new lease between Lessee and such new
owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and such
new owner shall assume all of Lessor’s obligations,
except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or
with respect to events occurring prior to acquisition of
ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior
lessor, (c) be bound by prepayment of more than one
month’s rent, or (d) be liable f
or the return of any security deposit paid to any prior lessor
which was not paid or credited to such new owner.
Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of
this Lease, Lessee’s
subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance
agreement (a “Non-Disturbance Agreement”)
from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises,
and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the
record owner of the Premises. Further, within 60
days after the execution of this Lease, Lessor shall, if requested by Lessee, use its commercially
reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured by the Premises.
In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s option, directly
contact Lender and attempt to negotiate for the
execution and delivery of a Non-Disturbance Agreement.
Self-Executing. The agreements contained in this Paragraph 30 shall be effective without the
execution of any further documents;
provided, however, that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and
Lessor shall execute such further writings as may be reasonably required to
separately document any subordination, attornment and/or
Non-Disturbance Agreement provided for herein.
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	31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises
whether founded in tort, contract or equity, or
to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable
attorneys’ fees. Such fees may be awarded in the same suit or recovered in a separate suit,
whether or not such action or proceeding is pursued to
decision or judgment. The term, “Prevailing Party” shall include, without limitation, a Party or
Broker who substantially obtains or defeats the relief
sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the
other Party or Broker of its claim or defense.
The attorneys’ fees award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys’ fees
reasonably incurred. In addition, Lessor shall be entitled to attorneys’ fees, costs and expenses
incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action is subsequently
commenced in connection with such Default or resulting
Breach ($200 is a reasonable minimum per occurrence for such services and consultation).
32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to
enter the Premises at any time, in
the case of an emergency, and otherwise at reasonable times after reasonable prior notice for the
purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to
the Premises as Lessor may deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes and conduits
through the Premises and/or other premises as long as there
is no material adverse effect on Lessee’s use of the Premises. All such activities shall be without
abatement of rent or liability to Lessee.
Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises
without Lessor’s prior written consent.
Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to
permit an auction.
Signs. Lessor may place on the Premises ordinary “For Sale” signs at any time and ordinary “For
Lease” signs during the last 6 months of
the term hereof. Except for ordinary “For Sublease” signs which may be placed only on the Premises,
Lessee shall not place any sign upon the Project
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.
Lessee may place a sign on the building and at the
entry to the Premises consistent with Lessor’s signage standards.
Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or
other surrender of this Lease by Lessee, the
mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee,
shall automatically terminate any sublease or lesser
estate in the Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days
following any such event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Lessor’s election to have
such event constitute the termination of such interest.
Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Lessor’s actual reasonable costs and
expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response
to, a request by Lessee for any Lessor
consent,
including but not limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lessor’s consent to any act,
assignment or subletting shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such
consent. The failure to specify herein any particular
condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being given. In the event
that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and
in reasonable detail within 10 business days following such request.
Guarantor.
Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently
published by the AIR Commercial Real
Estate Association.
Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon
request to provide: (a) evidence of the
execution of the guaranty, including the authority of the party signing on Guarantor’s behalf to
obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors authorizing the making of
such guaranty, (b) current financial statements, (c) an
Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect.
Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the
covenants, conditions and provisions on
Lessee’s part to be observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term
hereof.
Options. If Lessee is granted an option, as defined below, then the following provisions shall
apply.
Definition. “Option” shall mean: (a) the right to extend or reduce the term of or renew this Lease
or to extend or reduce the term
of or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal
or first offer to lease either the Premises or other property
of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first
refusal to purchase the Premises or other property of Lessor.
Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the
original Lessee, and cannot
be assigned or exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if
requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.
Multiple Options. In the event that Lessee has any multiple Options to extend or renew this
Lease, a later Option cannot be
exercised unless the prior Options have been validly exercised.
Effect of Default on Options.
Lessee shall have no right to exercise an Option: (i) during the period commencing with the
giving of any notice of
Default and continuing until said Default is cured, (ii) during the period of time any Rent is
unpaid (without regard to whether notice thereof is given
Lessee), (jjj) during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee
has been given 3 or more notices of separate Default,
whether or not the Defaults are cured, during the 12 month period immediately preceding the
exercise of the Option.
The period of time within which an Option may be exercised shall not be extended or enlarged by
reason of Lessee’s
inability to exercise an Option because of the provisions of
 Paragraph 39.4(a).
An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and
timely exercise of the
Option, if, after such exercise and prior to the commencement of the extended term or completion of
the purchase, (i) Lessee fails to pay Rent for a
period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice
thereof),or (ii) if Lessee commits a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does
not include the cost of guard service or
other security measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of
the Premises, Lessee, its agents and invitees and their property from the acts of third parties.
41 Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee,
such easements, rights and dedications that
Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and (iii) to
create and/or install new utility raceways, so long as such easements, rights, dedications, maps,
restrictions, and utility raceways do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such
rights.
PAGE 15 OF 17
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	42- Performance Under Protest. . If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the
other under the provisions hereof, the Party against whom the obligation to pay the money is
asserted shall hava the right to make payment “under protest” and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of said Party to
institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation
on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to
recover such sum or so much thereof as it was not legally required to pay. A Party who does not
initiate suit for the recovery of sums paid “under protest” within 6 months shall be deemed to have
waived its right to protest such payment.
43. Authority; Multiple Parties; Execution.
(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or
similar entity, each
individual executing this Lease on behalf of such entity represents and warrants that he or she is
duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days
after request, deliver to the other Party satisfactory evidence of such authority.
(b) If this Lease is executed by more than one person or entity as “Lessee”, each such person or
entity shall be
jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be
empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all
of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed
such document.
(c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed an
original and all
of which together shall constitute one and the same instrument.
Conflict. Any conflict between the printed provisions of this Lease and the typewritten or
handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
Offer. Preparation of this Lease by either party or their agent and submission of same to the
other Party shall not be deemed an offer to
lease to the other Party. This Lease is not intended to be binding until executed and delivered by
all Parties hereto.
Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the
time of the modification. As long as they
do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be
reasonably required by a Lender in connection with the obtaining of normal financing or refinancing
of the Premises.
Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR
PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.
Arbitration of Disputes. An Addendum requiring the Arbitration of all disputes between the Parties
and/or Brokers arising out of this Lease
D is 0 is not attached to this Lease.
Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is
dependent upon Lessee’s specific use
of the Premises, Lessor makes no warranty or representation as to whether or not the Premises
comply with ADA or any similar legislation. In the
event that Lessee’s use of the Premises requires modifications or additions to the Premises in
order to be in ADA compliance, Lessee agrees to make
any such necessary modifications and/or additions at Lessee’s expense, if, and only if, Leeee’s uae
of the Premises materially differs from the use of the
Premises by prior Lessees.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE
PAR
TIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO
THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING OF
THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE
WITH THE
AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE
LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED.
The parties hereto have executed this Lease at the place and on the dates specified above their
respective signatures.
Executed at: ^grtJ“f\* V£ VJLJfl. Executed at: >/’/“VA^ec “t? e^c^C^ yAf^
On l-Z./->f\ 1^1 O On: sZT/vS//72
By LESSOR: By LESSEE:
SEBCO, Inc., a Washington corporation Atlantic Diving Supply, Inc., a Virginia
corporation^"""^? f \
By: ^^y/^^^^-^. ~~^ By: j^^&Z^* ~Z^~ *¦**"*’ “*\
Name^rinl^dyOay AyCrs j Nar^jpfin^tejj’ £ra4ee-4HrH“ier -*/&*?’ /^#^/&*f&t _
Title: pWsj&ent ( _^S _ Title;4£b^»g-^re<^±feirve Officer \J/? C^?*^*/^*-£>
By: By:
Name Printed: Name Printed: Dan Clarkson
Title: Title: Chief Operating Officer
Address: 4020 E. Madison Street, Ste. 320 Address:621 Lynnhaven Parkway, Ste. 400
Seattle, WA 98112 Virginia Beach, VA 23452
Telephone: (206) 323-5308 Telephone:(T52) 481-7758
Facsimile:(2 0 6) 323-9502 Facsimile:{7 57) 481-2039
Federal ID No. Federal ID No.
BROKER: BROKER:
CB Richard Ellis, Inc. Cushman & Wakefield
Attn: Bill Dolan Attn: James Duncan
Title: First Vice President            Title: Director
PAGE 16 OF 17
INITIALS INITIALS
©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM MTN-8-8/08E

 

 

	Address: 4365 Executive Drive, Ste. 1600 Address:4435 Eastgate Mall, Ste. 200
San Diego, CA 92121 San Diego, CA 92121
Telephone: (J3J5£! ) 546-4678 Telephone: (858^ ) 452-65QQ
Facsimile:^ 58 ) 546-4667 Facsimile:{8 58 ) 452-3206
Emaihbill. dolan@cbre . com            Em ail: James . duncanGJcushwake . com
Federal ID No. Federal ID No.
NOTICE: These forms are often modified to meet changing requirements of law and industry needs.
Always write or call to make sure you are utilizing the most current form: AIR Commercial Real
Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No, (213)
687-8777. Fax No.: (213) 687-8616.
©Copyright 1999 By AIR Commercial Real Estate Association. All rights reserved. No part of these
works may be reproduced In any form without permission in writing.
PAGE 17 OF 17
INITIALS
©1999 — AIR COMMERCIAL REAL ESTATE ASSOCIATION F0RM MTN-8-8/08E

 

 

	ADDENDUM
Addendum to that certain Standard Industrial/Commercial Multi-Tenant lease — Net between SEBCO,
Inc., a Washington corporation (“Lessor”) and Atlantic Diving Supply, Inc., a Virginia corporation
(“Lessee”) dated November 18,2010 for that space located at 9220 Activity Road, City of San Diego,
County of San diego, State of California.
50. lessor’s improvements:
Lessor, at Lessor’s expense, shall perform the following Improvements to the Premises as depicted on Exhibit “A”:
A. Demolish two (2) offices and provide new paint and carpet in the remaining office areas;
B. Install one (1) dock door (where offices are demolished);
C. Remove the exterior concrete pad;
D. Remove exterior chain link fence; and
E. Remove all PVC Piping running along the top of the warehouse.
51. Base Rent Schedule:
Period Monthly Base Rent
February 1, 2011 -January 31, 2012: $12,000.00
February 1, 2012- January 31, 2013: $12,360.00
February 1, 2013 -January 31, 2014: $12,731.00
52. Rental Abatement
The base rent and operating expenses shall be abated for the months of March and April 2011.
53. Option to Extend
See attached.
LESSOR’S INITIALS LESSEES
N:\Support\Team 1-15\Do!an\LBases\SEBCO_Atlantic Diving9Z20 Activity Rd\SEBCO_Atlanttc
Diving_ADDM111810.doc

 

 

	Exhibit «A” Premises
(C and D) Remove Fence and Raised Concrete Pad
r — — —  ~] i —>
        . It Accessible
I Ramp
¦ , ¦ ,, ^ “ I ,, I ^ /hi ¦
| ^toraqej ^ Entry
£ R?]^0] ‘A and B) Demolish Two (2) offices
¦6 ^ “ i-1! and install (Ij Dock Door
ft
|
u
Warehouse
Grade Leuel 4 DockHqh Loading Positions
^=^ i—j i=, y ‘I
LESSOR’S INITIALS <fcffi~"^ LESSEE’S INfflAtST^^
N:\Support\Team l-15\DDlar\Leases\SEBCO_A8antic Diving9220 Aciivity Rd\SEBCO_Atlantic
Dining_ADDM111810.doc

 

 

	OPTION(S) TO EXTEND
STANDARD LEASE ADDENDUM
Dated November 18, 2010
By and Between (LeSSOr) SEBCO, Inc., a Washington corporation
By and Between (Lessee) Atlantic Diving Supply, Inc., a Virginia
corporation
Address of Premises: 9220 Activity Road
San Diego, CA 92121
Paragraph 53
A. OPTION(S) TO EXTEND:
Lessor hereby grants to Lessee the option to extend the term of this Lease for            one (1)
additional thirty-six (36)
month period(s) commencing when the prior term expires upon each and all of the following terms and
conditions:
(i) In order to exercise an option to extend, Lessee must give written notice of such election to
Lessor and Lessor must receive the same at least 6 but not more than 9 months prior to the date
that the option period would commence, time being of the essence. If proper notification of the
exercise of an option is not given and/or received, such option shall automatically expire. Options
(if there are more than one) may only be exercised consecutively.
(ii) The provisions of paragraph 39, including those relating to Lessee’s Default set forth in
paragraph 39.4 of this Lease, are conditions of this Option.
(iii) Except for the provisions of this Lease granting an option or options to extend the term, all
of the terms and conditions of this Lease except where specifically modified by this option shall
apply.
(iv) This Option is personal to the original Lessee, and cannot be assigned or exercised by anyone
other than said original Lessee and only while the original Lessee is in full possession of the
Premises and without the intention of thereafter assigning or subletting.
(v) The monthly rent for each month of the option period shall be calculated as follows, using
the method(s) indicated below: (Check Method(s) to be Used and Fill in Appropriately)
B—(, Cost of Living Adjuctmont(s) (COLA)
eh On (Fill in COLA DatoG):
tho Base Rent shall bo adjuctod by tho chango, if any, from the Bqdo Month cpocifiod bolow, in tho
Consumer Pripo indox of tho Buroau of Labor Staticticc of tho U.S. Dopartmont of Labor for (soloct
ono): O-CPI W (Urban Wage Earners and Ciorical Workorc) orH-CPI U (All Urban Consumers), for (Fill
in Urban Aroa): -
All Horns (1982-198’! = 100), horoin referred to as “CP4^
paragraph 1.5 of the attachod Loaoo, chall bo multiplied by a fraction tho numorator of which shall
bo tho CPI of tho calondar month 2 months prior to tho month(s) specified-in paragraph A.I.a. above
during whiGh tho adjustment is to take offoot, and tho donominator of which shall bo tho CPI of tho
calondar month which io 2 months prior to (select ono): B tho first month of the term of thic Loaco
ae sot forth in paragraph 1.3 (“Baso Month”) or O (Fill in Other “Baco Month”): -Tho Gum go
calculated choll conctituto tho now monthly rent hereundor, but in no ovont, shall any cuch now
monthly ront be less than tho ront payablo for the month immodtatoly preceding tho ront adjuctmont.
& In tho ovnnt tho compilation and/or publication of the CPI shall bn transferred to any othor
governmental dopartment or buroou or agency or
chall bo diecontinued, thon tho indox most nearly tho oomo as tho CPI shall be ueod to mako cuch
calculation. In tho ovont that the Parties cannot agree on cuoh aliornativo index, then-tho mattor
chall be submittod for docicion to the American Arbitration Association in aooordanco with tha then
ruloc of said Association and tho dooision of tho arbitrators shall be binding upon tho partios.
Tho coct of said Arbitration shall bo paid agually by tho P.irtisE
? II. Market Rental Value Adjustment(s) (MRV) MRV shall, In addition to rent, take Into account
Landlord provided Tenant Improvement Allowance and rental abatement each to the extent they are
market components of a Isaee extension signed for similar aized space. In similar bu
ildings in the
Mlramar area.
a. On (Fill in MRV Adjustment Date(s)) February 1, 2014
the Base Rent shall be adjusted to the “Market Rental Value” of the property as follows:
1) Four months prior to each Market Rental Value Adjustment Date described above, the Parties shall
attempt to agree upon what the new MRV will be on the adjustment date. If agreement cannot be
reached, within thirty days, then:
PAGE 1 OF 2
INITIALS INITIALS
©2000 — AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE-3-B/00E

 

 

	(a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to
establish the new MRV within the next 30 days. Any associated costs will be split equally between
the Parties, or
(b) Both Lessor and Lessee shall each immediately make a reasonable determination of the MRV and
submit such determination, in writing, to arbitration in accordance with the following provisions:
(i) Within 15 days thereafter, Lessor and Lessee shall each select an D appraiser or ? broker
(“Consultant” — check one) of their choice to act as an arbitrator. The two arbitrators so
appointed shall immediately select a third mutually acceptable Consultant to act as a third
arbitrator.
(ii) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a
decision as to what the actual MRV for the Premises is, and whether Lessor’s or Lessee’s submitted
MRV is the closest thereto. The decision of a majority of the arbitrators shalf be binding on the
Parties. The submitted MRV which is determined to be the closest to the actual MRV shall thereafter
be used by the Parties.
(iii) If either of the Parties fails to appoint an arbitrator within the specified 15 days, the
arbitrator timely appointed by one of them shall reach a decision on his or her own, and said
decision shall be binding on the Parties.
(iv) The entire cost of such arbitration shall be paid by the party whose submitted MRV is not
selected, ie. the one that is NOT the closest to the actual MRV.
2)—Notwithstanding the foregoing, tho now MRV chall not bo loco than the rent payable for the
month immodiatoly procoding tho ront adjuctmont.
b. Upon the establishment of each New Market Rental Value:
the new MRV will become the new “Base Rent” for the purpose of calculating any further Adjustments,
and
the first month of each Market Rental Value term shall become the new “Base Month” for the purpose
of calculating any further
Adjustments.
S—III. Fixed Rontol Adjuotment(o) (FRA)
Tho Baoo Ront chall ba inoroacod to tho following amounts on tho dotos-set-forth-below:- -
On (Fill in FRA Adjuctmont Dato(c)): The- Mew Base Rent shall be: -
B. NOTICE:
Unless specified otherwise herein, notice of any rental adjustments, other than Fixed Rental
Adjustments, shall be made as specified in paragraph 23 of the Lease.
C. BROKER’S FEE:
The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with
paragraph 15 of the Lease.
NOTICE: These forms are often modified to meet changing requirements of law and industry needs.
Always write or call to make sure you are utilizing the most current form: AIR Commercial Real
Estate Association, BOO W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No. (213)
687-8777. Fax No.: (213) 687-8616.
PAGE 2 OF 2
INITIALS INITIALS
©2000 — AIR COMMERCIAL REAL ESTATE ASSOCIATION F0RM °E-3-S/00Eexv10w16

Exhibit 10.16

FLEX LEASE

This Lease made as of the 30th day of November, 2005 between 7115 Airport Highway,
LLC, a New Jersey Limited Liability Company, (the “Landlord”) having maintaining an office at 7115
Airport Highway, Pennsauken, NJ, 08109 and Mar-Vel International, Inc., a New Jersey Corporation,
(the “Tenant”) maintaining an office at 7100 Airport Highway, Pennsauken, NJ 08109.

     1. Premises

     Landlord hereby leases to Tenant and Tenant hires from Landlord on the terms, covenants, and
conditions set forth in this Lease, approximately 40,000 square feet of office and warehouse space
at 7115 Airport Highway, Pennsauken NJ. The leased premises are described on Exhibit “A” attached.

     2. Term

     The term of this Lease shall be for ten (10) years (the “lease term”) commencing on
December 1, 2005 and ending on November 30, 2015.

     3. Minimum Rent

     Tenant agrees to pay to Landlord at the Landlord’s address above, or at any such place as
Landlord may designate, without deduction, offset, prior notice or demand, the Minimum Rent for
the premises in the total sum of $2,600,000.00 lawful money of the United States payable in
advance in monthly installments of $21,666.67 payable on the first day of each month during the
Lease term.

     4. Late Charge

     Tenant further agrees that upon default in payment of any monthly installment of rent or other
sum due to Landlord that Tenant shall pay Landlord, as additional rent, a late charge in the amount
of ten percent (10%) of the monthly payment. The late charge shall be an additional remedy of
Landlord and shall not affect any other right or remedy of Landlord, including the right to
terminate the Lease which may arise by reason of Tenant’s default.

     5. Net Lease

     It is the intent of the parties hereto that this is a net lease and that all costs of
ownership, maintenance and use of the Leased premises shall be paid by Tenant in addition to the
payments of Minimum Rent referred to above. Landlord shall not be responsible for the repair or
maintenance of the leased premises, except for the exterior foundation, roof, plumbing outside of
the leased premises and exterior walls. Tenant shall be responsible for the payment, within ten
(10) days after notice, as additional rent, all items listed in Paragraph 8 hereinbelow. Tenant
shall be responsible for the interior maintenance and repair of the Leased premises and shall
further be responsible, at its sole cost and expense, for all repairs and replacements to the
Leased premises caused by or necessitated by any reason of any act or neglect of Tenant, its
agents, employees, contractors or invitees.

     6. Alterations and Improvements

-1-

 

     No alterations or additions may be made on the leased premises without the prior written
consent of Landlord. Any alterations or additions made to the premises including improvements and
alterations made by Tenant with the consent of Landlord shall, at Landlord’s option, become part of
the building and belong to Landlord. Any alterations or additions to the premises consented to by
Landlord and made by Tenant, unless designated by Landlord to become part of the realty and
Landlord’s property, shall be removed by Tenant and the leased premises restored to its previous
condition by the expiration of the Lease term. Landlord agrees to designate that property which
shall become Landlord’s at the time Landlord gives its approval to the alterations or additions or
at any time thereafter but at least thirty (30) days prior to the expiration of the Lease Term.

     7. Utilities

     Tenant shall pay all utility expenses, including but not limited to water, sewer, electric and
gas. Landlord shall not be held liable to Tenant, nor shall this Lease, nor Tenant’s obligations
under this Lease, be impaired or abated in the event of the failure of any utility service to the
leased premises.

     8. Additional Rent.

               (a) Breach. Tenant agrees to pay as rent in addition to the Minimum Rent any and
all sums which may become due by reason of the failure of Tenant to comply with all of the
covenants of this Lease and any and all damages, costs and expenses, including reasonable
attorney’s fees, which the Landlord may suffer or incur by reason of such default, and also any and
all damages to the leased premises caused by any act or neglect of the Tenant.

               (b) Taxes, Assessments, Etc. Tenant will duly and promptly pay as additional rent to
Landlord, as the same shall become due and payable and before they become delinquent, all taxes,
rates, assessments and other governmental charges, and charges of every kind and nature whatsoever,
nonrecurring as well as recurring, special or extraordinary as well as ordinary, foreseen and
unforeseen, and each and every installment thereof, which shall or may during the term of the Lease
be levied, assessed or imposed, or become due and payable or become liens upon, or arise in
connection with the use, occupancy or possession of, or any interest in, the Leased premises, or
upon the rents, issues, income and profits therefrom so as to prevent the same from becoming or
being an enforceable lien or claim against the property or the interest of Landlord (“Expenses”).
Landlord shall apply such payment by Tenant to the payment of such Expenses, but in no event shall
Landlord be required to pay such Expenses early or during discount periods. As provided
hereinabove, such Expenses shall include all real estate taxes, assessments, water and sewer
charges which may become liens upon the Leased premises or any part thereof. If Landlord requests
Tenant to pay such Expenses other than to Landlord, Tenant will furnish or cause to be furnished to
Landlord within fifteen (15) days of written notice, receipts or other evidence satisfactory to
Landlord of the payment of all such Expenses. If Landlord requests in writing, Tenant shall pay to
Landlord, or as Landlord may direct, such Expenses in advance in installments as estimated and
determined by Landlord, and deposited with Landlord, or as directed by Landlord, for payment of all
such Expenses when the same may become due and payable.

          In case of failure of the Tenant to make any of the payments to be made by Tenant for such
Expenses, the Landlord may, but shall not be required to, pay the amount of same, with penalty and
interest thereon, if any. The amount so paid by the Landlord, with interest at the rate of ten
(10%) percent thereon from the date of payment thereof by the Landlord, shall be added to and
become a part of the next installment of rent.

          If at any time during the term of this Lease the methods of taxation prevailing at the
commencement of the term hereof shall be altered so that in lieu of or as a supplement
to or a substitute for the whole or any part of the real estate taxes or assessments now
levied, assessed or imposed (1) a tax, assessment, levy, imposition or charge, wholly or
partially as a capital levy or otherwise, on the rents received therefrom or (2) a tax,
assessment, levy (including but not limited to any municipal, state or federal levy),

-2-

 

imposition or charge measured by or based in whole or in part upon the premises and imposed upon
the Landlord, or (3) a license fee measured by the rent payable under this Lease, then all such
taxes, assessments, levies or impositions and charges, or the part thereof so measured or based
shall be deemed to be included in the general real estate taxes and assessments payable by the
Tenant pursuant hereto to the extent that such taxes, assessments, levies, impositions and charges
would be payable if the premises were the only property of the Landlord subject thereto, and the
Tenant shall pay and discharge the same as herein provided in respect of the payment of general
real estate taxes and assessments.

               (c) Insurance. Landlord shall keep all buildings and improvements now or
hereafter erected upon the leased premises, insured for the benefit of Landlord
against loss by fire and other casualties and hazards usually covered by
extended coverage insurance in an amount not less than the replacement value of
the leased premises (excluding foundations and other parts below the surface of
the lowest floor), as determined not more than once annually by an appraiser or
rating bureau satisfactory to Landlord. Tenant agrees that it will, throughout
the Lease Term, pay and discharge as additional rent, the cost incurred by
Landlord in insuring the Leased premises. It is expressly understood and agreed
that if for any reason attributable to Tenant it shall be impossible to obtain
Fire Insurance on the building and improvements on the Leased premises in an
amount and in the form and with fire insurance companies acceptable to the
Landlord, the Landlord may, if the Landlord elects (a) terminate this Lease and
the term thereof on giving to the Tenant fifteen (15) days’ notice in writing of
Landlord’s intention so to do and upon the giving of such notice this lease and
the terms thereof, shall terminate and come to an end; (b) compute the
additional costs for such insurance over and above the standard cost as if the
condition attributable to Tenant did not exist and Tenant shall be obligated to
pay all such additional cost.

                    (1) Tenant shall also provide at its sole cost and expense, any insurance
on improvements made to or inside the leased premises by Tenant. Such policy shall name as insured
Landlord and Tenant, as their interests may appear and shall name Landlord’s first mortgagee, if
any, as mortgagee. A copy of such policy shall be furnished to Landlord and Landlord’s first
mortgagee.

                    (2) Tenant at its own cost and expense will provide and keep in force
during the Leased Term of this Lease commercial general liability
insurance covering at least the hazards of “premises operations”,
“elevators” (if applicable) and “independent contractors”, in which
Landlord shall be included as a named insured, in such other limits of
liability as may be required by Landlord from time to time, but not less
than Three Million Dollars ($3,000,000.00) combined single limit, with a
deductible not to exceed Five Thousand Dollars ($5,000.00). Such
insurance shall cover not only the Leased premises but shall also include
all elevators, hoists, hallways, entranceways, stairs or any other common
areas (exterior or interior), streets, driveways, alleys, lawns, parking
and loading areas, sidewalks and curbs adjacent thereto.

                    (3) All such policies shall contain provision for notice to the said
Landlord not less than thirty (30) days in advance of any cancellation or
material change of such policy. In case of failure of the Tenant to make
premium payments when due, the Landlord may pay the amount of any such
premiums, which amount with interest thereon from the date of payment by
Landlord shall be added to and become part of the next installment of
rent.

                    (4) Copies of renewal policies or certificates for any insurance required under this Paragraph
shall be deposited by Tenant with Landlord prior to the expiration of existing policies, and upon
failure so to do Landlord may immediately purchase, for the account of Tenant, the necessary
insurance from any reputable insurance company without notice to Tenant, and Tenant shall reimburse
Landlord for cost thereof within ten (10) days after demand.

                    (5) All insurance required hereunder shall be issued by companies
licensed to do
business in New Jersey and acceptable to Landlord. Tenant shall have the
right to carry the insurance with all orders, regulations, rules and
requirements of every kind and nature relating to the Leased premises,
now or

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hereafter in effect of the Federal, State, Municipal or other governmental authorities having power
to enact, adopt, impose or require the same, whether they be usual or unusual, ordinary or
extraordinary, and whether they or any of them relate to structural changes or requirements of
whatever nature or to changes or requirements incident thereto, or as the result of the use or
occupation thereof by Tenant, and the Tenant shall pay all costs and expenses incidental to such
compliance and shall indemnify and save harmless the Landlord from all expense and damages by
reason of any notices, orders, violations or penalties filed against or imposed upon the Leased
premises or against the Landlord as owner thereof, because of the failure of the Tenant to comply
with this covenant. Tenant further agrees to keep the leased premises clean and free from all
ashes, dirt and other refuse matter; replace all glass windows, doors, etc., which are broken; and
keep all waste and drain pipes open.

               In the event of the failure of Tenant to perform the covenants of Paragraph 8 hereof
within thirty (30) days after prior written notice of failure to comply, except in the event
of an emergency for which no prior notice shall be required. Landlord may go upon the leased
premises and perform such covenants, the cost thereof, at the sole option of Landlord, to be
charged to Tenant as additional rent.

               (d) Compliance. Comply with any requirements of any of the constituted public
authorities and with the terms of any State or Federal statute or local ordinance or regulation
applicable to Tenant or its use of the Leased premises and save Landlord harmless from penalties,
fines, costs or damages resulting from failure to do so.

               (e) Fire. Use every reasonable precaution against fire.

               (f) Surrender of Leased Premises. Peacefully deliver up and surrender possession of the
Leased premises to Landlord at or prior to the expiration or earlier termination of this Lease or
any renewal thereof, in the same good order and broom clean condition in which Tenant has herein
agreed to keep the same during the continuance of this Lease, reasonable wear and tear excepted.
Tenant will at or prior to the expiration or earlier termination of this Lease or any renewal
thereof, remove all of his property from the leased premises so that Landlord may again have and
repossess the same no later than the end of business on the day on which this Lease or any renewal
thereof shall terminate, and will immediately thereafter deliver to Landlord, at its office, all
keys for the leased premises.

               (g) Notice of Casualty. Give to Landlord prompt written notice of any accident, fire
or damage occurring to the leased premises.

     9. Damage and Destruction to Premises

     In the event of (a) a partial destruction of the leased premises during the Lease term which
requires repairs to either the leased premises or the center, or (b) the leased premises or the
center being declared unsafe or unfit for occupancy by any authorized public authority for any
reason other than Tenant’s act, use or occupation, which declaration requires repairs to either the
leased premises or the center, Landlord shall make the repairs, provided that the damage is such,
in Landlord’s sole reasonable judgment, that under normal working conditions, repairs could be made
within one hundred eighty (180) days. Partial destruction (including any destruction necessary in
order to make repairs required by any declaration) shall not annul or void this Lease, except that
Tenant shall be entitled to a proportionate reduction of rent while such repairs are being made,
and such work or repair shall be commenced promptly after the nature of the damage and degree of
repair required is determined, any necessary permits from governmental authorities are obtained,
and if appropriate, insurance adjustments completed. The proportionate reduction is to be based
upon the extent to which the making of repairs shall interfere with the business carried on by
Tenant in the leased premises. In making repairs, Landlord shall be obligated to replace only such
glazing as shall have been damaged by fire and other damaged glazing shall be replaced by Tenant.
No penalty shall accrue against Landlord for reasonable delays resulting from adjustment of fire
insurance loss or for delays which result from labor troubles

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or any other cause, event or circumstances beyond Landlord’s control. If the damage be such, in
nature or extent that repairs could not be made within one hundred eighty (180) days as aforesaid,
Landlord may, at its option, elect to proceed nonetheless to make same, this Lease continuing in
full force and effect and the rent proportionately abated, as in this Article provided. Any repairs
undertaken by Landlord in accordance with the foregoing shall be substantially completed as soon as
practicable. In the event that Landlord does not elect to make repairs which could not be made as
aforesaid within one hundred eighty (180) days, or repairs cannot be made under current laws and
regulations, this Lease may be terminated at the option of either party. A total destruction
(including any destruction required by any authorized public authority) of either the leased
premises or the center shall terminate this Lease.

     10. Condemnation

     If any part of the premises shall be taken or condemned for a public or quasi-public use, and
a part remains which is susceptible of occupation, this Lease shall, as to the part so taken,
terminate as of the date title shall vest in the condemnor, and the rent payable hereunder shall be
adjusted so that the Tenant shall be required to pay for the remainder of the Lease term only such
portion of such rent as the number of square feet in the part remaining after the condemnation
bears to the number of square feet in the entire leased premises at the date of condemnation; but
in such event, Landlord shall have the option to terminate this Lease as of the date when title to
the part so condemned vests in the condemnor. If all the leased premises, or such part thereof must
be taken or condemned so that there does not remain a portion susceptible for occupation, this
Lease shall terminate. If a part or all of the premises be taken or condemned, all compensation
awarded upon such condemnation or taking shall go to the Landlord and the Tenant shall have no
claim to such. Tenant hereby expressly waives, relinquishes and releases to Landlord any claim for
damages or other compensation to which Tenant might otherwise be entitled because of any such
taking or limitation of the leasehold estate hereby created and irrevocably assigns and transfers
to the Landlord any right to compensation or damages to which the Tenant may be entitled by reason
of the condemnation of all or a part of the premises or the leasehold estate.

     11. Subordination, Estoppel Certificates

     This Lease is subject and subordinate to all ground or underlying leases and to all
mortgages which may now or hereafter affect the real property of which the leased premises form a
part or Landlord’s leasehold interest therein, and to all renewals, modifications, consolidations,
replacements and extensions. This clause shall be self-operative and no further instrument of
subordination shall be required. In confirmation of such subordination, Tenant shall execute
promptly any certificate that Landlord may request. Tenant hereby constitutes and appoints Landlord
the Tenant’s attorney-in-fact to execute any such certificate or certificates for and on behalf of
Tenant. Tenant shall, at any time and from time to time upon not less than ten (10) days prior
written notice from Landlord, execute, acknowledge and deliver to Landlord a statement in form
reasonably required by Landlord, (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying that this Lease as
so modified is in full force and effect) and the dates to which the rental and other charges are
paid in advance, if any; (ii) acknowledging that there are not, to Tenant’s knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such defaults if any as are claimed; and
(iii) any other certification reasonably required by any mortgagee, including agreements of no
set-off and release of liability as to such mortgagee and its successors. Any such statement may
be relied upon by any prospective purchaser or mortgagee of all or any portion of the real property
of which the leased premises are a part. Tenant’s failure to deliver such statement within such
time shall be conclusive upon Tenant (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no uncured defaults in
Landlord’s performance, and (iii) that not more than one month’s rental has been paid in advance.

     12. Non-Merger of Estates

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     The voluntary or involuntary surrender of this Lease by tenant, or an other termination
of this Lease shall not work a merger of estates and shall, at Landlord’s option, terminate all or
any existing subleases and/or all and any subtenancies or operate as an assignment to Landlord by
Tenant of any or all of such subleases or subtenancies.

     13. Recording of Lease

     Tenant agrees not to place this Lease on record without the consent of Landlord. At the
request of Tenant, Landlord will execute a memorandum for recording purposes setting forth the
leased premises and the Lease term but this memorandum shall contain no other provisions. All costs
shall be the responsibility of the Tenant.

     14. Security Deposit

     The deposit by Tenant of $-0- to Landlord is hereby acknowledged as security for the full
and faithful performance of all the covenants and conditions contained herein. Such sum shall be
returned to Tenant within thirty (30) days after the expiration of the term of this Lease, provided
that Tenant is not in breach of any covenants of this Lease, in default or in arrears in rent. In
the event of a default by Tenant, the Landlord shall not be required to resort to the security
before exercising any other remedy available to it under his Lease or by law. Landlord may assign
or transfer said security for Tenant’s benefit to any subsequent owner or holder of title to the
premises, upon which transfer the assignee shall become liable for repayment of same to Tenant and
the assignor shall be released by Tenant from all liability to return the security deposit. Tenant
further covenants that Tenant will not assign or encumber or attempt to assign or encumber the
security deposit and that neither Landlord nor its successors or assigns shall be bound by any
assignment or encumbrance, attempted assignment or attempted encumbrance. Furthermore, if the
interest of the Landlord, under this lease, shall become subject to the lien of any mortgage or
mortgages, the Tenant agrees that Tenant will not look to the mortgagee or mortgagees for the
return of all or any part of the security deposit regardless of whether such mortgagee or
mortgagees shall come into possession of the leased premises as a result of any default of the
Landlord and/or the Landlord’s overlandlord.

     15. Default by Tenant

     (1) In the event of Tenant’s default, Landlord, besides other rights or remedies that it may
have, upon giving at least ten (10) days notice and the same having not been cured in that period,
except in the case of defaults in the performance of any covenant for the payment of rent or other
sums due hereunder (in which case Landlord shall not be required to provide notice of the alleged
default, shall have the right to (i) accelerate all rent otherwise payable by Tenant over the
remainder of the Lease term, in which case all such rent shall be immediately due and payable, or
(ii) terminate this lease, or (iii) terminate Tenant’s right of continued possession of the leased
premises and, from time to time, without terminating this Lease to relet the leased premises or any
part thereof for the account and in the name of Tenant, for any such term or terms and conditions
as Landlord in its sole reasonable discretion may deem advisable, with the right to make
alterations and repairs to the leased premises deemed by Landlord to be necessary in conjunction
with such reletting.

     (2) Should Landlord terminate Tenant’s right of possession of the leased premises pursuant to
this Article, then Tenant shall pay to Landlord all or any of the following: (a) any unpaid rent
and other charges to be paid by Tenant hereunder up to the date when Landlord shall have so
terminated Tenant’s right of possession, (b) the costs of recovering possession of the leased
premises and any legal fees and expenses directly related to the breach, the recovery of possession
and the collection of unpaid rent and other charges, (c) the costs incurred by Landlord in
repairing and restoring the leased premises to the condition in which same were to have been
surrendered to Landlord at the expiration of the Lease term, (d) the costs of removing any of
Tenant’s property from the leased premises and, if same be stored, the cost of transporting and
storing same (if Landlord shall store such property in the building or the business center then
Landlord shall be entitled to a

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reasonable storage fee hereunder), (e) all brokerage fees advertising costs and commissions
incurred by Lessor in reletting the leased premises.

     (3) Rentals received by Landlord from any reletting pursuant to this Article shall be applied
first to the payment of any of the aforesaid enumerated items, in such order as Landlord shall deem
reasonably appropriate, and second to the payment of rent and other sums due and unpaid by Tenant
hereunder as of the date of Landlord’s receipt of said rentals. The residue, if any, shall be held
by Landlord and applied in payment of future rent or damages in the event of termination as the
same may become due and payable hereunder and the balance, if any, at the end of the Lease term
shall be paid to Tenant.

     (4) No such reletting of the leased premises by Landlord pursuant to this Article shall be
construed as an election on its part to terminate this Lease unless a notice of such intention be
given by Landlord to Tenant or unless such termination is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination, Landlord may at any time
thereafter elect to terminate this Lease for such previous breach, provided it has not been cured.

     (5) In the event that Landlord shall accelerate the rent payable by Tenant pursuant to any
applicable provision of this Lease, and Tenant shall fail to pay same after Landlord’s demand
therefore, then Landlord shall have the right to pursue all other rights and remedies existing at
law.

     (6) Should Landlord at any time terminate this Lease for any breach pursuant to this Article,
then in addition to any other remedy Landlord may have by reason of such breach, Landlord shall
have the right to recover from Tenant all or any of the following: (a) any unpaid rent and other
charges to be paid by Tenant hereunder up to the date of termination, (b) the costs of recovering
possession of the leased premises and any legal costs, fees and expenses directly related to the
breach, the recovery of possession, and the collection of said arrearages in rent and other
charges, (c) costs, as reasonably estimated by Landlord would be incurred in repairing or restoring
the leased premises to the condition in which the same were to have been surrendered to Landlord as
the expiration of the Lease term, (d) the costs of removing any of Tenant’s property from the
leased premises, and if same be stored, the cost of transporting and storing same (if Landlord
shall store such property in the building or the project, then Landlord shall be entitled to a
reasonable storage fee hereunder), all brokerage fees and commissions incurred by Landlord in
reletting the leased premises, and (f) compensation for the loss of profits occasioned by the
breach and resultant termination of this lease, which loss the parties agree shall be determined by
calculating the total amount of rent and other charges to be paid by Tenant, as if this Lease had
not been terminated, from the date of termination to the otherwise expiration date of the Lease
term, and deducting therefrom the net rental value of the leased premises for a like period which
Tenant proves could have been reasonably achieved.

     (7) Landlord shall have the right to recover, in execution of judgment(s) rendered in legal
proceeding or otherwise, either jointly or from time to time severally, the applicable sums
specified in clauses (a) through (e) of Paragraph (2) of this Article, and clauses (a) through (f)
of Paragraph (6) of this Article. Landlord’s recovery of one or more of such sums shall not
constitute a waiver of Landlord’s right to recover from Tenant the remaining sums. The cost of
reletting the leased premises and the estimated cost of renovating or preparing the leased premises
for a new tenant shall be substantiated by the affidavit of Landlord submitted with the demand for
payment under this Article or any legal proceeding for the recovery thereof.

     (8) Landlord shall have all rights and remedies now or hereafter existing at law with respect
to the enforcement of Tenant’s obligations hereunder and the recovery of the leased premises,
including, without limitation, those set forth in N.J.S.A. 2A:18-53, R.S. 2:32-256, L1898, c.228,
as amended, and all amendments, modifications and substitutions thereof hereafter enacted. No right
or remedy herein conferred upon or reserved to Landlord shall be exclusive of any other right or
remedy, but shall be cumulative and in addition to all other rights and remedies given hereunder or
now or hereafter existing at law. Landlord shall be entitled to injunctive relief in case of the
violation, or attempted or threatened violation, of any covenant, agreement,

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condition or provision of this lease, or to a decree compelling performance of any
covenant, agreement, condition or provision of this lease.

     (9) Notwithstanding the foregoing provisions of this Article, if Tenant is in default
hereunder, Landlord after the lapse of any time period and notice as may be applicable thereto
under the provisions of Paragraph (1) of this Article shall have the right, without prejudice to
any other right or remedy provided for hereunder or otherwise available, to cure the default; and
in such case all of Landlord’s cost and expenses in so doing, plus interest at the maximum rate of
interest per annum then permitted by law shall be due and payable to Landlord, upon demand, as
additional rent under the terms of this lease.

     16. Right to Cure Tenant’s Breach

     If Tenant breaches any covenant or condition of this lease, Landlord may, on reasonable notice
to Tenant (except that no notice need be given in case of emergency), cure such breach at the
expense of Tenant and the reasonable amount of all expenses, including attorneys’ fees and court
costs, incurred by Landlord in so doing (whether paid by Landlord or not) shall be deemed additional rent payable on demand.

     17. Repairs by Tenant

     (1) Tenant shall be responsible at its sole cost to keep and maintain the interior of the
leased premises in good and sanitary order, condition and repair. The interior of the leased
premises is defined to include: (a) the interior faces of the exterior walls of the building; (b)
the ceiling; (c) the portion of the wiring, plumbing, pipes, conduits and other utility systems and
fixtures within the interior and which are not a part of the exterior structure of the building as
defined at Article 18; (e) all glass in the leased premises; (f) skylights; (g) windows; and (h)
heating and air conditioning systems.

     (2) Landlord will make repairs to the structural parts of the building, herein defined as the
bearing walls and roof, but Landlord is not responsible for costs of replacement or repairs to
structural parts of the building as defined at Article 18, where the same are necessitated by
conditions caused by Tenant, its agents or invitees.

     (3) Tenant shall be responsible at its sole cost and expense to keep and maintain all
utilities, fixtures and mechanical equipment used by Tenant in good operating order, condition and
repair. Tenant shall properly operate said utilities, fixtures and mechanical equipment in
accordance with applicable manufacturer’s instructions.

     18. Repairs by Landlord

     (1) Landlord shall be responsible for maintaining all structural portions of the leased
premises. The exterior and structural parts of the leased premises are defined to include: (a) the
outside walls; (b) the roof and roof covering; (c) the foundations; (d) floor slab and floor; and
(e) all structural members.

     (2) Landlord shall not be liable for any damage or injury which may be sustained by the
Tenant, or any other person, as a consequence of the failure, breakage, leakage or obstruction of
the water, plumbing, steam, sewer, waste or soil pipes, drains, leaders, valleys, downspouts or the
like or of the electrical, gas, power, conveyor, refrigeration, sprinkler, air conditioning or
heating systems, elevators or hoisting equipment; or by reason of the elements; or resulting from
the carelessness, negligence or improper conduct on the part of any other tenant of Tenant, or of
the Tenant or the Tenant or this or any other Tenant’s agents, employees, guests, licensees,
invitees, subtenants, assignees, or successors; or attributable to any interference with,
interruption of or failure, beyond the control of the Landlord, or any services to be furnished or
supplied by the Landlord.

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     (3) Landlord and Landlord’s agents and representatives, may, at any reasonable time, enter
the leased premises to examine them, to make alterations or repairs thereto or for any other
purposes which Landlord considers necessary or advisable; however, in the case of any emergency,
Landlord and its agents may enter the premises at any time and in any manner. Tenant shall allow
the leased premises to be exhibited by Landlord: (i) at any reasonable time to representatives of
lending institutions or to prospective purchasers of the building or leased premises, and (ii) at
any reasonable time within six months prior to the end of the term to persons who may be interested
in leasing the leased premises. Landlord may place a suitable “For Sale” sign upon the leased
premises six months prior to the expiration of the demised lease term. Landlord and its agents
reserve the right and shall be permitted reasonable access to the leased premises to install
facilities within and through the leased premises and to install and service any systems deemed
advisable to provide services or utilities to any tenant in the building.

     19. Use of Premises

     The leased premises may be used and occupied only for an office, warehouse and distribution
facility and for no other purpose or purposes without Landlord’s consent. Tenant shall first obtain
all governmental permits and licenses as may be required for Tenant’s use and occupancy of the
leased premises; and Tenant at all times shall promptly comply with all laws, ordinances, orders
and regulations affecting the leased premises and their cleanliness, safety, occupation and use.
Tenant shall not do or permit anything to be done in or about the leased premises, or bring or keep
anything in the leased premises that will in any way increase the existing premium rates or cause
suspension or termination of the fire insurance upon the building. Tenant will not perform any act
or carry on any practices that may injure the building or be a nuisance or menace to tenants of
adjoining premises.

     20. Parking

     Tenant shall be entitled to use all parking spaces for the parking of Tenant’s customers,
employees and invitees. Tenant shall be responsible for the maintenance and repair of the parking
area.

     21. Assignment; Subletting

     (1) Tenant shall not assign, mortgage or hypothecate this lease, or any interest in this Lease
without the written consent of Landlord, which consent shall not be unreasonably withheld. Tenant
shall not sublet or otherwise permit the use of the leased premises or any part thereof by any
person or persons other than Tenant, without the written permission of Landlord. Any transfer of
this Lease from Tenant by merger, consolidation or liquidation shall constitute an assignment for
purposes of this lease. Any attempted assignment or subletting without Landlord’s consent shall be
void and shall, at Landlord’s option, terminate this lease. Consent by Landlord to any assignment
or subletting shall not release Tenant from its primary liability under the lease. Landlord’s
consent to one instance of assignment, subletting, occupation or use by other parties shall not be
deemed a consent to other subleases, assignments or occupation or use by other parties.

     (2) As a condition precedent to Tenant’s right to sub-lease the premises or to assign this
Lease, Tenant shall, at Tenant’s own expense, first comply with the Industrial Site Recovery Act,
N.J.S.A. 13:1K-6 et. seq. and fulfill all of Tenant’s environmental obligations under this Lease.
If this condition shall not be satisfied, then Landlord shall have the right to withhold consent to
a sub-lease or assignment;

     (3) In the event of a sale or transfer of a majority ownership interest in Tenant, such sale
or transfer shall be deemed an assignment requiring the consent of Landlord.

     22. Waste and Quiet Enjoyment

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     Tenant shall not commit, or suffer any waste upon the leased premises, or any
nuisance, or any other act or thing which may disturb the quiet enjoyment of any other tenant in
the center.

     23. Compliance with Law

     Tenant shall be responsible for compliance during the term of this Lease and all subsequent
renewals thereof, with all federal, state and local statutes, laws, ordinances, rules, regulations
and any directives of any governmental or municipal agencies or authorities, their departments,
bureaus and sub-divisions, concerning or affecting the premises, their use and occupancy, for the
correction, prevention and abatements of nuisances, violations or other grievances in, upon or
connected with all orders, regulations, requirements and directives of any such departments,
agencies or authorities, all such compliance at the Tenant’s own efforts and expense.

     24. Entry of Landlord

     Tenant shall permit Landlord and Landlord’s agents to enter the leased premises at all
reasonable times for the purpose of inspecting the same or for the purpose of maintaining the
center or for the purpose of making repairs, alterations, or additions to any portion of the
center, including the erection and maintenance of such scaffolding, canopies, fences and props as
may be required, or for the purpose of posting notices of non-responsibility for alterations,
additions, or repairs, or for the purpose of placing upon the center any usual or ordinary “for
sale” signs, without any rebate of rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the leased premises thereby occasioned Tenant shall also permit
Landlord, at any time within ninety (90) days prior to the expiration of this lease, to place upon
the leased premises any usual or ordinary “to let” or “to lease” signs.

     25. Abandonment

     Tenant shall not vacate nor abandon the leased premises at any time during the Lease term, nor
permit the leased premises to remain unoccupied for a period longer than ten (10) consecutive days
during the Lease term. If Tenant shall abandon, vacate or surrender the leased premises, or be
dispossessed by process of law or otherwise, any personal property belonging to Tenant on the
leased premises shall, at the option of the Landlord, be deemed abandoned and may be used, sold
without public notice or auction, destroyed or otherwise disposed of by Landlord.

     26. Attorneys’ Fees

     In the event of any legal action or proceeding between the Landlord and Tenant, reasonable
attorneys’ fees and expenses of the prevailing party in any such action or proceeding shall be
added to the judgment therein, unless prohibited by law. Should Landlord be named as a defendant or
other party in any suit brought against Tenant in connection with or arising out of Tenant’s
occupancy hereunder, Tenant shall pay to Landlord, as additional rent hereunder, its costs and
expenses incurred in such suit, including a reasonable attorney’s fee.

     27. Removal of Liens

     Tenant shall keep the leased premises and the property in which the leased premises are
situated free from any mechanics or construction liens or claims arising out of any work performed
for, material furnished to, or obligation incurred by tenant, and shall indemnify Landlord for all
costs and expenses incurred by Landlord with respect to such liens.

     (a) Before proceeding with any work of alterations, etc., unless Landlord has contracted
therefore, Tenant shall first give Landlord written notice of the contractual arrangement
proposed to be entered into or implemented by Tenant in furtherance thereof, which arrangements
shall include provisions, reasonably

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satisfactory to Landlord, to assure that all work and materials will be fully paid for and
that the leased premises, the center and the property on which it is erected will not be subject
to the filing of any mechanics lien or claim.

     (b) If any mechanics or other lien or order for the payment money or any notice of
intention to file a lien shall be filed against the premises, or the center or improvements of
which said premises form a part, by reason of or arising out of any labor or material furnished or
alleged to have been furnished, or to be furnished to or for the premises or any occupant thereof,
or for or by reason of any change, alteration or addition or the cost or expense thereof, or any
contract relating thereto, or against the interest of Landlord, Tenant shall cause the same to be
cancelled and discharged of record by bond or otherwise as allowed by law at the expense of Tenant
within five (5) days after the filing thereof, and Tenant shall also defend on behalf of Landlord,
at Tenant’s sole cost and expense, any action, suit or proceeding which may be brought thereon or
for the enforcement of such lien, liens, or orders, and Tenant will pay any damages and satisfy and
discharge any judgment entered thereon and save harmless Landlord from any claim or damage
resulting therefrom.

     28. Notices

     All notices required under the terms of this Lease shall be given and shall be complete by
mailing such notices by certified or registered mail, return receipt requested, to the address of
the parties as shown at the head of this Lease, or to such other address as may be designated in
writing, which notice of change of address shall be given in the same manner.

     29. Indemnification by Tenant

     Tenant shall indemnify and defend Landlord and save it harmless from and against all claims,
suits, actions, damages, judgments, liabilities, fines, penalties, and expense for loss of life,
personal injury or damage to property (1) arising from or of any occurrences within leased premises
(without regard to the cause or claimed cause thereof whether such loss of life, personal injury or
damage to property be due or claimed to be due to any negligence including gross negligence or
other act or failure of Landlord, or its officers, agents or employees occurring prior to or
following the execution of this Lease) or (2) by reason of the occupancy or use of the leased
premises by Tenant or (3) occasioned wholly or in part by any act or omission of Tenant or breach
of this Lease by Tenant or by its agents, contractors, customers, employees, servants, lessees or
concessionaires. If Landlord shall be made a party to any litigation commenced by or against Tenant
or by any third party and connected in any way with this Lease or Tenant’s use or occupancy of
leased premises, Tenant shall indemnify and hold Landlord harmless and shall pay all costs,
expenses and reasonable attorney’s fees incurred or paid by Landlord in connection with such
litigation.

     30. Signs

     Tenant shall place no exterior signs on the leased premises or interior signs which
readily may be seen from the exterior without the prior written consent of Landlord. Tenant shall
install all exterior signs at Tenant’s sole expense and remove same upon the expiration or
termination of the Lease.

     31. Waiver of Claims

     Tenant, as a material part of the consideration to be rendered to Landlord, hereby waives all
claims and agrees not to assert, at law or in equity or otherwise, any claim or actions against
Landlord for damages to goods, wares and merchandise in, upon or about the leased premises and for
injury to Tenant, its agents, employees, invitees, or third persons in or about the leased premises
or the property of which the leased premises is a part, from any cause arising at any time.

     32. Insolvency, Receivership, Bankruptcy

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     In the case of (a) the appointment of a receiver to take possession of all or
substantially all of the assets of Tenant; (b) a general assignment by Tenant for the benefit of
creditors, or (c) any act of bankruptcy being committed by Tenant, or (d) Tenant filing a petition
or commencing any proceeding under any bankruptcy or insolvency law or admitting, in such petition
or proceeding filed against it., the material substantive allegations of same, or otherwise
consenting thereto, or (e) Tenant being adjudicated a bankrupt or insolvent, or (f) any action
being suffered by Tenant under any insolvency or bankruptcy act and any such action continuing for
a period of thirty (30) days or (g) any attachment or execution against a substantial part of
Tenant’s assets or Tenant’s interest hereunder being issued and remaining undismissed or unstayed
for more than ten (10) days or a substantial part of Tenant’s assets being taken by legal
proceedings, the same or any of them shall constitute a breach of this Lease by Tenant, and
Landlord may, at its election without notice, terminate this Lease and in that event be entitled to
immediate possession of the leased premises and damages as determined in accordance with any
provisions of this Lease applicable to default.

     In the event Tenant files a petition or a proceeding is commenced against Tenant under any
bankruptcy or insolvency law, Tenant shall be deemed to have consented to relief from the automatic
stay or any similar provision of such bankruptcy or insolvency law, permitting Landlord to proceed
with the enforcement of any and all remedies available as a result of any breach of this Lease by
Tenant.

     33. Waiver

     The waiver by Landlord of any breach of any term, covenant, or condition herein contained by
Tenant, shall not be deemed to be a waiver of such term, covenant or condition or any subsequent
breach of the same or any other term, covenant or condition herein contained. The subsequent
acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any prior or
preceding breach of any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rent so accepted, regardless of Landlord’s knowledge of such prior or
preceding breach at the time of acceptance of such rent.

     34. Effect of Holding Over

     Either party hereto may terminate this Lease at the expiration of the said term, or extended
term, by giving to the other party written notice thereof at least ninety (90) days prior to such
expiration, but in default of such notice, this Lease, as same may be amended from time to time,
with all the conditions and covenants thereof, shall renew for a term of one year, with the
exception that the rent shall be equivalent to the rent paid during the prior twelve (12) month
period plus a monthly increase of 1/12th of the Consumer Price Index of the first month of the last
term of the Lease divided by the Consumer Price Index as of the last month of the last year of the
Lease term; which increase shall continue for the new rental term of one year and so on from year
to year thereafter together with an additional Consumer Price Index increase as described hereinabove, until terminated by either party hereto, giving to the other at least ninety (90) days prior
written notice of intention to terminate said Lease at the expiration of the then current term.
PROVIDED HOWEVER, that if Landlord shall have given such written notice prior to the expiration of
any term hereby created of its intention to change the terms and conditions of this Lease, and
Tenant shall hold over after the expiration of the time mentioned in such notice, Tenant shall be
considered a Tenant under the terms and conditions mentioned in such notice for such further period
as Tenant may remain in possession of the leased premises or until similar subsequent notice be
given by Landlord again changing the said terms and conditions.

     35. Captions

     Any headings preceding the text of the Articles of this Lease are inserted solely for
convenience of reference and shall not constitute a part of this Lease, nor shall they affect its
meaning.

     36. Severability

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     The terms, conditions, covenants, and provisions of this Lease shall be deemed to be
severable. If any clause or provisions of this Lease are adjudged to be invalid or unenforceable by
a court of competent jurisdiction or by operation of any applicable law, it shall not affect the
validity of any other clause or provision of this Lease, and such other clauses or provisions shall
be valid and remain in full force and effect.

     37. Time of the Essence

     Time is of the essence of each term and provision of this Lease.

     38. Environmental Matters

          (a) The term “Environmental Law” shall mean any Matters Federal, State or local, statute, act,
law, ordinance, rule, regulation or order pertaining to the environment whether now or hereafter
enacted or amended, and whether or not listed in this definition such as, but not limited to the
following:

	 	(i)	 	The Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”). 42 U.S.C.. Section 9601 as amended by the Superfund Amendments and
Reauthorization Act of 1986 (Pub. L. 98-489, 100 Stat. 1613,1986) (SARA”);
	 
	 	(ii)	 	The Resource Conservation and Recovery Act, 42 U.S.C.
Section 6801 et seq.(“RCRA”);
	 
	 	(iii)	 	Toxic Substances Control Act, 15 U.S.C. Section 2601 (“TSCA”);
	 
	 	(iv)	 	The Clean Water Act, 33 U.S.C. Section 407 et. seq. (“CWA”);
	 
	 	(v)	 	The Clean Air Act, 42 U.S.C. Section 7901 et. seq.:
	 
	 	(vi)	 	The Industrial Site Recovery Act, N.J.S.A. 13:1K-6 et. seq.;
	 
	 	(vii)	 	Any similar statute, law, ordinance, rule, regulation or
order adopted in the jurisdiction in which the leased premises is located at any
time whether before or after the execution of this Lease.

     (b) “Hazardous Substance” shall mean any hazardous or toxic substance as defined in
any Environmental Law or in any rule, regulation or order issued pursuant to any
Environmental Law.

     (c) “Enforcement Agency” shall mean the Environmental Protection Agency, New Jersey Department
of Environmental Protection (“DEP”) and any other state, county, municipal or other agency having
authority to enforce any Environmental Law.

     (d) AH alterations made in the leased premises by Landlord, Tenant or any other tenant of the
leased premises shall be in accordance with and shall comply with all Environmental Laws and the
requirements of any Enforcement Agencies.

     (e) Tenant shall not intentionally or unintentionally use, store, handle, spill or discharge
any Hazardous Substance at or in the vicinity of the Leased premises. Tenant shall not use the
Leased premises in any manner which will cause the Leased premises to have an NAICS which is
covered by any Environmental Law or which will cause the Leased premises to be deemed an
“Industrial Establishment” as defined under any Environmental Law. Tenant’s failure to abide by the
terms of this paragraph (e) shall be restrainable by injunction.

-13-

 

     (f) Tenant represents that its NAICS number is                       .
At any time during the term of this Lease,
Tenant shall supply to Landlord affidavits of an officer of Tenant setting forth Tenant’s
NAICS number and describing in detail the operations and processes undertaken by Tenant at
the leased premises. Such affidavits shall include a certification that no Hazardous
Substance is generated, used, stored, handled or disposed of at the Leased premises or shall
state the nature of any such substance and the methods used in handling the same in
reasonable detail. Such affidavits shall be delivered to Landlord within ten (10) days after
request therefore.

     (g) Within ten (10) days after request therefore, Tenant shall provide all information
requested from time to time by Landlord, or by an Enforcement Agency for the preparation of
notices, submissions or affidavits (including, without limitation, Non-applicability Affidavit, de
Minimis Quantity Exemption Application, Limited Conveyance Application or Administrative Consent
Order). Within ten (10) days after request therefore, Tenant shall executed and deliver any
document reasonably required in order to comply with any Environmental Law.

     (h) Tenant shall promptly deliver to Landlord copies of all notices made by Tenant to, or
received by Tenant from, any Enforcement Agency or from the United States Occupational Safety and
Health Administration concerning environmental matters or Hazardous Substances at the Leased
premises.

     (i) At any time throughout the term of this Lease and any extension thereof, Landlord may
cause an inspection to be made of the leased premises and its surrounding area for the purpose of
determining whether any Hazardous Substance is present thereon.

     (j) Tenant shall indemnify, defend and hold Landlord harmless of and from any and all claims
arising by reason of any violation by Tenant of the provisions of this Section and this indemnity
shall survive expiration or other termination of this Lease.

     39. Cumulative Remedies

          All rights and remedies provided for herein or otherwise existing at law or in equity,
are cumulative and the exercise of one or more rights or remedies by Landlord shall not preclude or
waive its right to the
exercise of any or all others.

     40. Waiver Of Right To Trial By Jury

          Tenant hereby waives its right or entitlement to a trial by jury in any legal proceeding
involving, directly or indirectly, any matter (whether sounding in tort, contract or otherwise)
in any way arising out of or related to this Lease or the relationship evidenced hereby. This
provision is a material inducement for Landlord to enter into, accept or rely upon this Lease.

     41. Accord and Satisfaction

          No acceptance by Landlord of an amount less than the monthly rent and other payments
stipulated to be due under this Lease shall be deemed to be other than a payment on account of the
earliest such rent or other payments then due or in arrears nor shall any endorsement or statement
on any check or letter accompanying any such payment be deemed an Accord and Satisfaction. Landlord
may accept any check for payment by Tenant without prejudice to Landlord’s right to recover the
remainder of any rent or other payment then in arrears and Landlord may pursue any other remedy
provided in this Lease. No acceptance by Landlord of any payment of rent or other sum by Tenant
shall be deemed a waiver of any of the obligations of Tenant under this Lease.

     42. Recording

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          Tenant shall not Record this Lease without the written consent of Landlord. If requested by
Landlord a memorandum or short-form Lease setting forth only such items as are required to be set
forth under the laws of the State of New Jersey in affect at such time shall be executed by Tenant.

     43. Miscellaneous Provisions

     (1) Whenever the singular number is used in this Lease and when required by the context, the
same shall include the plural, and the masculine gender shall include the feminine and neuter
genders, and the word “person” shall include corporation, firm, or association. If there be more
than one Tenant, the obligations imposed under this Lease upon Tenant shall be joint and several.

     (2) The term “Landlord” as used in this Lease, so far as covenants or obligation on the part
of Landlord are concerned, shall be limited to mean and include only the owner or owners at the
time in question of the fee of the leased premises, and in the event of any transfer, assignment,
or other conveyance or transfers of any such title or leasehold, the
Landlord herein named (and in
the event of any transfer, assignment or other transfers to conveyances, the then grantor) shall be
automatically freed and relieved, from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or obligations on the part
of Landlord contained in this Lease thereafter to be performed; and without further agreement, the
transferee of such title shall be deemed to have assumed and agreed to observe and perform any and
all obligations of the Landlord hereunder, during its ownership of the leased premises.

     (3) The headings or titles to the Articles of this Lease are not a part of this Lease and
shall have no effect upon the construction or interpretation of any part of this Lease.

     (4) This Lease contains all of the agreements and conditions made between the parties to this
Lease and may not be modified orally or in any other manner than by an agreement in writing signed
by Landlord and Tenant.

     (5) Time is of the essence of each term and provision of this Lease.

     (6) This Lease shall be construed, interpreted, and governed by the laws of New Jersey.

     (7) Subject to Paragraph (2) of this Article, the terms and provisions of this Lease shall be
binding upon and inure to the benefit of the respective heirs, executors, administrators,
successors, and assigns of Landlord and Tenant, provided that Landlord’s liability hereunder shall
be limited to Landlord’s title or interest in the building and leased premises.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year
written above.

SIGNATURES ON FOLLOWING PAGE

-15-

 

	 	 	 	 	 	 	 

	 	 	Landlord

7115 AIRPORT HIGHWAY, LLC, a NJ

Limited Liability Company	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ [ILLEGIBLE]	 	 
	 	 	 	 	 
	 	 	[ILLEGIBLE]	 	 
	 
	 	 	 	 	 	 
	 	 	Tenant

MAR-VEL INTERNATIONAL, INC.,

A NJ Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ [ILLEGIBLE]
 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

-16-

 

FIRST AMENDMENT TO FLEX LEASE

	 	 	 

	LANDLORD:

	 	7115 AIRPORT HIGHWAY, LLC, a NJ Limited Liability Company
	TENANT:

	 	MAR-VEL INTERNATIONAL, INC., a NJ Corporation
	PREMISES:

	 	7115 Airport Highway, Pennsauken, New Jersey 08109
	LEASE DATED:

	 	NOVEMBER 30, 2005
	FIRST AMENDMENT
	 	 
	DATED:
	 	 

          This First Amendment to Lease Agreement made this 26th day of
June, 2006,
between 7115 Airport Highway, LLC, a New Jersey Limited Liability Company, having an address of
7115 Airport Highway, Pennsauken, NJ, 08109 (“Landlord”) and Mar-Vel International, Inc. a New
Jersey Corporation, having an address at 7115 Airport Highway, Pennsauken, NJ 08109
(collectively the “Tenant”);

          WITNESS AS FOLLOWS:

          WHEREAS, Tenant and Landlord entered into a Flex Lease dated November 30, 2005 (hereinafter
“Lease”) pertaining to premises known as 7115 Airport Highway, Pennsauken, New Jersey (hereinafter
“Leased Premises” or “Premises”); and

          WHEREAS, Landlord and Tenant wish to modify and amend the Lease pursuant to the terms and
conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing premises and the mutual and several
covenants set forth below, the parties hereto, intending to be legally bound hereby, covenant
and agree as follows:

	1.	 	Paragraph 18 of the Lease shall be modified to require Landlord to maintain the
exterior of the Leased Premises, including but not limited to landscaping, snow removal and
trash removal and the cost of such maintenance shall be paid by Tenant upon Landlord
providing Tenant with an invoice or statement for such expenses. All of the expenses for
exterior maintenance shall be deemed additional rent and shall be due within ten (10) days
of delivery by Landlord to Tenant of an invoice or written statement for such expenses.
	 
	2.	 	In the event there is any conflict between the terms and conditions of the Flex Lease and
this First Amendment to Flex Lease, the parties hereto acknowledge and agree that the
provisions of this First Amendment to Flex Lease shall control. All other terms and
conditions of the Flex Lease not in conflict with the terms and conditions of this First
Amendment to Flex Lease shall remain in full force and effect.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year
indicated above.

 

 

	 	 	 	 	 

	 

	 	LANDLORD:	 	 
	 

	 	7115 AIRPORT HIGHWAY, LLC.	 	 
	 

	 	a New Jersey Limited Liability Company	 	 
	 
	 	 	 	 
	/s/ [ILLEGIBLE]
 

Witness

	 	/s/ [ILLEGIBLE]
 

	 	 
	 
	 	 	 	 
	/s/ [ILLEGIBLE]
 

Witness

	 	/s/ [ILLEGIBLE]
 

	 	 
	 
	 	 	 	 
	/s/ [ILLEGIBLE]
 

Witness

	 	/s/ [ILLEGIBLE]
 

	 	 
	 
	 	 	 	 
	 

	 	TENANT:	 	 
	 

	 	MAR-VEL INTERNATIONAL, INC.,	 	 
	 

	 	A New Jersey Corporation	 	 
	 
	 	 	 	 
	Attest:
	 	 	 	 
	 
	 	 	 	 
	/s/ [ILLEGIBLE]
 

	 	/s/ [ILLEGIBLE]
 

	 	 

 

 

 

    SECOND
    AMENDMENT TO FLEX LEASE

 

    This Second Amendment to Lease Agreement made as of the first
    day of March, 2010, by and among 7115 Airport Highway, LLC, a
    New Jersey limited liability company, having an address at 7115
    Airport Highway, Pennsauken, NJ, 08109 (“Landlord”),
    Mar-Vel International, Inc., a New Jersey corporation, having an
    address at 7115 Airport Highway, Pennsauken, NJ, 08109
    (“Tenant”) and Atlantic Diving Supply, Inc., a
    Virginia corporation, having an address at 477 Viking Drive, VA
    Beach, VA 23452 (“Guarantor”).

 

    WITNESS
    AS FOLLOWS:

 

    WHEREAS, Tenant and Landlord entered into a Flex Lease dated
    November 30, 2005 (hereinafter “Original Lease”),
    pertaining to the premises known as 7115 Airport Highway,
    Pennsauken, NJ (hereinafter “Leased Premises” or
    “Premises”); and

 

    WHEREAS, Tenant and Landlord entered into a First Amendment to
    Flex Lease dated June 26, 2006, (hereinafter “First
    Amendment”); and

 

    WHEREAS, all of the stock of Tenant was acquired by Guarantor;
    and

 

    WHEREAS, Tenant, Landlord and Guarantor wish to modify and amend
    the Original Lease as amended by the First Amendment (hereinafter
    collectively the “Lease”) pursuant to the terms
    conditions set forth herein.

 

    NOW, THEREFORE, in consideration of the foregoing premises and
    the mutual and several covenants set forth below, the parties
    hereto hereby covenant and agree as follows:

 

    1. Paragraph 3 of the Lease shall be modified such that
    beginning March 1, 2010, Tenant agrees to pay to Landlord
    at the Landlord’s address above or at such other place as
    Landlord may designate, without deduction, offset, prior notice
    or demand, Minimum Rent for the Premises in lawful money of the
    United States payable in advance in monthly installments of
    $18,000.00 payable on the first day of the month for the
    remainder the lease term in full payment of the total Minimum
    Rent due under the Lease; provided, that the Minimum Rent for
    the Premises shall increase by three percent (3%) commencing
    with the payment due on December 1, 2010 and shall increase
    an additional three percent (3%) (calculated based on the
    Minimum Rent then in effect) each December 1 thereafter for
    the remainder of the Lease term.

 

    2. Paragraph 7 of the Lease is modified to add a
    requirement that Landlord enter into an agreement with Thomas A.
    Maddox (“Maddox”) permitting Maddox to, subject to
    Maddox obtaining necessary financing on terms satisfactory to
    Maddox in Maddox’s sole discretion, install solar
    electrical producing equipment for the Premises. Upon the
    installation of such solar equipment by Maddox, Tenant, subject
    to legal and regulatory mandates, shall purchase such
    electricity as is generated by the solar system for the
    Premises, if any, from Maddox at a rate not to exceed 75% of the
    market rate that would have been charged by the local utility
    provider for

 

the area in which the Premises are located pursuant to a separate agreement to
be entered into between Tenant and Maddox. Tenant
acknowledges that there is no guaranty as to the amount of
electricity that will be generated by the solar system for
any period or in the aggregate over the remainder of the
Lease term and that Tenant will be required to purchase the remaining
requirements of Tenant’s electricity not generated by the
solar system from the local utility provider for the area in
which the Premises are located. Landlord makes no
representation or warranty that Maddox will be able to
obtain financing for the solar system or, if such financing
is available, that it will be on terms satisfactory to
Maddox. Landlord and Tenant will cooperate in metering the
Premises as may be required by the local utility provider in
order to accomplish the objectives of this paragraph 2;
provided, that nothing herein shall limit or modify Tenant’s
obligation to pay for all utilities, including, without
limitation, electricity provided to the Premises.

3. Pursuant to Paragraph 18 of the Lease, Landlord shall as soon as reasonably practical as
permitted by the weather and contractor availability, at Landlord’s expense, make repairs to the
roof and roof covering in the area located over that portion of the Premises commonly known as the
“IT” room to eliminate roof leaks at the Premises.

4.
Notwithstanding any provisions of Paragraph 21 of the Lease, Tenant shall have the right to
sublet the Premises and/or any portion thereof subject to the written consent of the Landlord which
consent shall not be unreasonably withheld or delayed. Landlord hereby consents to the transfer
of the shares in Tenant to Guarantor in accordance with Paragraph 21(3) of the Lease.

5. The Lease, as amended by this Second Amendment to Flex Lease shall remain in full force and
effect. In the event there is any conflict between the terms and conditions of the Lease and this
Second Amendment to Flex Lease, the parties hereto acknowledge and agree that the provisions of
this Second Amendment to Flex Lease shall control.

6. Guarantor hereby unconditionally and irrevocably guarantees the full and prompt payment and
performance of all rent and other obligations of Tenant under the Lease, as amended hereby, and any
and all expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred
by Landlord in enforcing any rights under this guaranty.

WITNESS the following signatures which shall be deemed to be made under seal:

LANDLORD:

7115 Airport Highway, LLC

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