Document:

Blueprint

EXECUTION COPY

Exhibit 10.18

 

 

 

 

 

 

2420 17th
Street

Denver, Colorado

 

 

 

 

OFFICE SPACE LEASE

 

 

 

BETWEEN

2420 17TH
STREET LLC,

a Delaware limited liability company

 

 

AND

 

 

NEW AGE BEVERAGES CORPORATION,

a Washington corporation

 

 

 

 

 

 

 

Date: JANUARY 21, 2019

 

 

 

EXECUTION COPY

INDEX TO LEASE

 

	

ARTICLE I

	

BASIC LEASE PROVISIONS

	

1

	

ARTICLE II

	

PREMISES

	

5

	

Section 2.1

	

Leased Premises

	

5

	

Section 2.2

	

Acceptances of Premises

	

5

	

Section 2.3

	

Building Name and Address

	

5

	

ARTICLE III

	

TERM

	

5

	

Section 3.1

	

General

	

5

	
Section
3.2

	

Delay in Possession

	

5

	

Section 3.3

	

Tenant’s Option to Extend Term

	

6

	

Section 3.4

	

Fair Market Rental Value

	

6

	

Section 3.5

	

Termination Option

	

6

	

ARTICLE IV

	

RENT AND OPERATING EXPENSES

	

7

	

Section 4.1

	

Base Rent

	

7

	

Section 4.2

	

Operating Expenses

	

7

	

Section 4.3

	

Security Deposit

	8

	

Section 4.4

	

REIT

	

9

	

ARTICLE V

	

USES

	

10

	

Section 5.1

	

Uses

	

10

	

Section 5.2

	

Signs

	

10

	

ARTICLE VI

	

LANDLORD SERVICES

	

11

	

Section 6.1

	

Utilities and Services

	

11

	

Section 6.2

	

Operation and Maintenance of Common Facilities

	

11

	

Section 6.3

	

Use of Common Facilities

	

11

	

Section 6.4

	

Tenant Parking

	

11

	

Section 6.5

	

Changes and Additions by Landlord

	

11

	

ARTICLE VII

	

MAINTAINING THE PREMISES

	

12

	

Section 7.1

	

Tenant’s Maintenance and Repair

	

12

	

Section 7.2

	

Landlord’s Maintenance and Repair

	

12

	

Section 7.3

	

Alterations

	

12

	

Section 7.4

	

Mechanic’s Liens

	

13

	

Section 7.5

	

Entry and Inspection

	

13

	

Section 7.6

	

Maintenance Related to Hazardous Materials

	

13

	

ARTICLE VIII

	

TAXES AND ASSESSMENTS ON TENANT’S PREMISES

	

15

	

ARTICLE IX

	

ASSIGNMENT AND SUBLETTING

	

15

	

Section 9.1

	

Rights of Parties

	

15

	

Section 9.2

	

Effect of Transfer

	

16

	

Section 9.3

	

Sublease Requirements

	

17

 

 

 

 

	

ARTICLE X

	

INSURANCE AND INDEMNITY

	

17

	

ARTICLE XI

	

DAMAGE OR DESTRUCTION

	

17

	

Section 11.1

	

Restoration

	

17

	

Section 11.2

	

Lease Governs

	

18

	

ARTICLE XII

	

EMINENT DOMAIN

	

18

	

Section 12.1

	

Temporary Taking

	

18

	

Section 12.2

	

Total or Partial Taking

	

18

	

ARTICLE XIII

	

SUBORDINATION; ESTOPPEL CERTIFICATE

	

19

	

Section 13.1

	

Total Condemnation of Premises

	

19

	

Section 13.2

	

Estoppel Certificate

	

19

	

ARTICLE XIV

	

DEFAULTS AND REMEDIES

	

20

	

Section 14.1

	

Tenant’s Defaults

	

20

	

Section 14.2

	

Landlord’s Remedies

	

20

	

Section 14.3

	

Late Payments

	

21

	

Section 14.4

	

Right of Landlord to Perform

	

22

	

Section 14.5

	

Default by Landlord

	

22

	

Section 14.6

	

EXPENSES AND LEGAL FEES

	

22

	

Section 14.7

	

WAIVER OF JURY TRIAL

	

22

	

ARTICLE XV

	

END OF TERM

	

23

	

Section 15.1

	

Holding Over

	

23

	

Section 15.2

	

Merger on Termination

	

23

	

Section 15.3

	

Surrender of Premises; Removal of Property

	

23

	

ARTICLE XVI

	

PAYMENTS AND NOTICES

	

24

	

ARTICLE XVII

	

RULES AND REGULATIONS

	

24

	

ARTICLE XVIII

	

BROKER’S COMMISSION

	

24

	

ARTICLE XIX

	

TRANSFER OF LANDLORD’S INTEREST

	

24

	

ARTICLE XX

	

INTERPRETATION

	

25

	

Section 20.1

	

Gender and Number

	

25

	

Section 20.2

	

Headings

	

25

	

Section 20.3

	

Joint and Several Liability

	

25

	

Section 20.4

	

Successors

	

25

	

Section 20.5

	

Time of Essence

	

25

 

 

 

 

	

Section 20.6

	

Controlling Law

	

25

	

Section 20.7

	

Severability

	

25

	

Section 20.8

	

Waiver and Cumulative Remedies

	

25

	

Section 20.9

	

Inability to Perform

	

26

	

Section 20.10

	

Entire Agreement

	

26

	

Section 20.11

	

Quiet Enjoyment

	

26

	

Section 20.12

	

Survival

	

26

	

ARTICLE XXI

	

EXECUTION AND RECORDING

	

27

	

Section 21.1

	

Counterparts

	

27

	

Section 21.2

	

Corporate and Partnership Authority

	

27

	

Section 21.3

	

Execution of Lease; No Option or Offer

	

27

	

Section 21.4

	

Recording

	

27

	

Section 21.5

	

Amendments

	

27

	

ARTICLE XXII

	

MISCELLANEOUS

	

28

	

Section 22.1

	

Nondisclosure of Lease Terms

	

28

	

Section 22.2

	

Representations by Tenant

	

28

	

Section 22.3

	

Changes Requested by Lender

	

28

	

Section 22.4

	

Mortgagee Protection

	

28

	

Section 22.5

	

Covenants and Conditions

	

28

	

Section 22.6

	

Commercial Photography and Filming

	

28

	

Section 22.7

	

As Is Condition

	

29

	

Section 22.8

	

Non-Discrimination

	

29

	

Section 22.9

	

Non-Affiliation Representation

	

29

	
 

	
 

	
 

	
 

	
 

	
 

	

EXHIBIT A-FLOOR PLAN OF PREMISES

	
 

	

EXHIBIT B-UTILITIES AND SERVICES

	
 

	
 

	

EXHIBIT C-PARKING RULES AND REGULATIONS

	
 

	

EXHIBIT D-EXCULPATION, INDEMNIFICATION

AND INSURANCE

	
 

	

EXHIBIT E-RULES AND REGULATIONS

	
 

	
 

	

EXHIBIT F- ESTOPPEL CERTIFICATE

	
 

	
 

 

                                                       

EXECUTION COPY

 

OFFICE SPACE LEASE

 

 

 

THIS
LEASE is made as of the 21st day of January
2019, by and between 2420 17TH STREET LLC, a
Delaware limited liability company, hereinafter called
“Landlord,” and NEW AGE BEVERAGES CORPORATION, a
Washington corporation, hereinafter called
“Tenant.”

 

ARTICLE I

BASIC LEASE PROVISIONS

 

Each
reference in this Lease to the “Basic Lease Provisions”
shall mean and refer to the following collective terms, the
application of which shall be governed by the provisions in the
remaining Articles of this Lease.

 

	
1. 

	

Tenant’s
Name and Trade Name:

 

	

NEW AGE
BEVERAGES CORPORATION

	
 

	
 

	
 

	
2. 

	

Premises:

	

Suite
Nos. 220 and 240 (the Premises are more particularly described in
Section 2.1) consisting of approximately 11,159 rentable square
feet, located on the second floor of the Building (described below)
consisting of approximately 79,589 rentable square feet, as shown
on the Floor Plan attached hereto as Exhibit A.

	
 

	
 

	
 

	
3. 

	

Address
of Building:

	

2420
17th
Street, Denver, Colorado 80202

	
 

	
 

	
 

	
4. 

	

Use of
Premises:

	

General
administrative office use compatible with first class
Buildings.

	
 

	
 

	
 

	
5. 

	

Estimated
Commencement Date:

	

April
1, 2019

 

	
6. 

	

Commencement
Date:

 

	

The
date on which Landlord delivers possession of the Premises to
Tenant. Before Commencement Date, Landlord will improve the
Premises substantially as shown on Exhibit A with Building
standard materials and fixtures (the “TI
Work”).

 

	
7. 

	

Expiration
Date:

	

The
last day of the 127th full calendar month
after the Commencement Date.

	
 

	
 

	
 

	
8. 

	

Lease
Term:

	

Approximately
127 full calendar months, commencing on the Commencement Date, and
expiring on the Expiration Date, plus, if the Commencement Date
occurs on a date which is not the first day of a calendar month,
such additional days as may be required to cause this Lease to
expire on the final day of the 127th full calendar month
after the Commencement Date (in which event the first month of the
Lease Term shall be deemed to include the partial calendar month in
which the Commencement Date occurs [at a commensurately prorated
portion of the initial monthly Base Rent set forth below], plus the
first full calendar month immediately following such partial month
[at the full initial monthly Base Rent set forth
below]).

 

 

 

1

 

 

	
9. 

	

Extension
Option:

	

One
Extension Period of five years.

	
 

	
 

	
 

	
10. 

	

Base
Rent:

	

The
Base Rent shall equal the following monthly amounts during the
indicated periods of the Lease Term:

 

	
 

	
 

	

$ Per
RSF

	

Monthly

	

Annually

	
 

	

Months
1 through 12

	

$31.00

	

$28,827.42

	

$345,929.04

	
 

	

Months
13 through 24

	

$31.93

	

$29,692.24

	

$356,306.88

	
 

	

Months
25 through 36

	

$32.89

	

$30,584.96

	

$367,019.52

	
 

	

Months
37 through 48

	

$33.87

	

$31,496.28

	

$377,955.36

	
 

	

Months
49 through 60

	

$34.89

	

$32,444.79

	

$389,337.48

	
 

	

Months
61 through 72

	

$35.94

	

$33,421.21

	

$401,054.52

	
 

	

Months
73 through 84

	

$37.02

	

$34,425.52

	

$413,106.24

	
 

	

Months
85 through 96

	

$38.13

	

$35,457.72

	

$425,492.64

	
 

	

Months
97 through 108

	

$39.27

	

$36,517.83

	

$438,213.96

	
 

	

Months
109 through 120

	

$40.45

	

$37,615.13

	

$451,381.56

	
 

	

Months
121 through 127

	

$41.66

	

$38,740.33

	

$464,883.96

	
 

	
 

	
 

	
 

	
 

	

Notwithstanding
anything to the contrary, monthly Base Rent for the first seven
full calendar months of the Lease Term shall be fully abated, and
monthly Base Rent for the eighth through 12th month will be
abated to $20,298.83. If a default defined in Section 14.1
occurs at any time during the Lease Term, a pro-rated portion of
the abated Base Rent will be immediately due and payable. Such
pro-rated portion shall be calculated by multiplying the abated
Base Rent by a fraction whose numerator is the number of full
months remaining in the Lease Term at the time of the default and
whose denominator is 120.

	
 

	
 

	
 

	
11. 

	

The
Extension Period:

	

Fair
Market Rental Rate as determined in accordance with Section 3.4
below, if Tenant exercises its option to extend the Lease Term
pursuant to Section 3.3.

	
 

	
 

	
 

	
12. 

	

Expense
Recovery Period:

	

Every
calendar year during the Lease Term (or portion thereof for the
first and last Lease years) commencing January 1 and ending
December 31).

	
 

	
 

	
 

	
13. 

	

Floor
Area of Premises:

	

Approximately
11,159 rentable square feet.

	
 

	
 

	
 

	
14. 

	

Security
Deposit:

	

$38,740.33,
as is further described in Section 4.3 herein. The Security Deposit
shall be delivered to Landlord concurrently with Tenant’s
execution of this Lease.

	
 

	
 

	
 

	
15. 

	

Broker(s):

	

Landlord
– Cushman & Wakefield

Tenant
– Unique Properties

	
 

	
 

	
 

 

 

2

 

 

	
16. 

	

Address
for Payments and Notices:

	

LANDLORD:

2420
17TH
STREET LLC

c/o
BlackRock

4400
MacArthur Blvd, Suite 700

Newport
Beach, CA 92660

 

TENANT:

Prior to Commencement Date:

NEW AGE
BEVERAGES CORPORATION

1700 E.
68th
Ave.

Denver,
CO 80229

Attn:
Gregory A. Gould

Telephone:
(303) 289-8655

Email:
GGould@newagebev.com

 

 

After Commencement Date:

To the
Premises

	
 

	
 

	
 

	
17. 

	

Tenant
Improvements:

	

Tenant
shall take the Premises “as-is,” except that Landlord
shall perform the TI Work.

	
 

	
 

	
 

	
18. 

	

Parking:

	

14
covered parking spaces, subject to the terms and conditions of
Section 6.4 of the Lease, at Landlord’s prevailing rate, as
determined in good faith by Landlord from time to time. On the date
of this Lease, the monthly parking rate for each unreserved space
is $215.00. In addition, Tenant’s customers may utilize
designated visitor parking spaces on a first-come, first-served,
non-exclusive basis.

	
 

	
 

	
 

	
19. 

	

Tenant’s
Construction Representative:

 

 

 

Telephone:

	

Brian
Smith

Morinda

P.O.
Box 4000

Orem,
UT 84059

(801)
234-3104, Ext. 3014

Bsmith@morinda.com

	
 

	
 

	
 

	
 

	

Landlord’s
Construction Representative:

Telephone:

	

CBRE
– Angela Slocum

1225
17th Street, Suite 3200

Denver,
CO 80202

(303)
583-2065

	
 

	
 

	
 

 

3

 

 

 

	
20. 

	

Tenant’s
Percentage Share:

	

Approximately
14.0% calculated by dividing the Floor Area of Premises (numerator)
by the rentable area of the Building (denominator) and expressing
the resulting quotient as a percentage. Tenant’s Percentage
shall be increased during the Lease Term in proportion to any
increase in the area of the Premises in accordance with the formula
stated herein. Notwithstanding anything to the contrary,
Tenant’s Percentage Share for the first 12 full months of the
Lease Term will be abated to 9.9%. If a default defined in
Section 14.1 occurs at any time during the Lease Term, a
pro-rated portion of the abated Tenant’s Percentage Share
will be immediately due and payable. Such pro-rated portion shall
be calculated by multiplying the abated Tenant’s Percentage
Share by a fraction whose numerator is the number of full months
remaining on the Lease Term at the time of the default and whose
denominator is 120.

	
 

	
 

	
 

	
21. 

	

Guarantor:

	

None

 

 

4

 

 

ARTICLE II

PREMISES

 

Section 2.1                                            

Leased Premises

 

Landlord leases to
Tenant and Tenant rents from Landlord the premises shown in
Exhibit A (the
“Premises”) containing the floor area set forth in Item
8 of the Basic Lease Provisions and known by the suite numbers
identified in Item 2 of the Basic Lease Provisions. The Premises
are located in the Building identified in Item 2 of the Basic Lease
Provisions (which together with the underlying real property is
referred to herein as the “Building”). The rentable
square footage of the Premises set forth in Item 8 of the Basic
Lease Provisions is deemed conclusive as between the
parties.

 

Section 2.2                                            

Acceptances of
Premises.

 

Tenant
acknowledges that neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to
the Premises or the Building or the suitability or fitness of
either for any purpose except as set forth in this Lease. The
taking of possession or use of the Premises by Tenant conclusively
establishes that the Premises and the Building were in satisfactory
condition and in conformity with the provisions of this Lease in
all respects, except for those matters which Tenant shall have
brought to Landlord’s attention on a written punch list
delivered to Landlord. The list shall be limited to any items
required to be accomplished by Landlord under the Work Letter and
shall be delivered to Landlord within five (5) days after the Lease
Term commences as provided in Article III below. Landlord shall
diligently complete all punch list items of which it is notified as
provided above for which it is liable. Nothing contained in this
Section shall affect the commencement of the Lease Term or the
obligation of Tenant to pay Rent. Except as otherwise expressly
provided herein, Tenant accepts the Premises in its “As
Is” existing condition and waives any right or claim against
Landlord arising out of the condition of the Premises.

 

 

 

Section 2.3                                 

Building Name and Address

 

Tenant
shall not utilize any name selected by Landlord from time to time
for the Building and/or the Premises as any part of Tenant’s
corporate or trade name. Landlord shall have the right to change
the name, number or designation of the Building or Premises without
liability to Tenant.

 

ARTICLE III

TERM

 

Section 3.1                                            

General

 

The
term of this Lease (“Lease Term”) shall be for the
period shown in Item 5 of the Basic Lease Provisions. The Lease
Term shall commence on the Commencement Date specified in Item 4 of
the Basic Lease Provisions. Within ten (10) days after possession
of the Premises is tendered to Tenant, the parties shall
memorialize on a form provided by Landlord the actual Commencement
Date and the expiration date (the “Expiration Date”) of
this Lease. Tenant’s failure to execute that form shall not
affect the validity of Landlord’s determination of those
dates.

 

Section 3.2                                            

Delay in Possession

 

If
Landlord, for any reason not within its reasonable control, is
delayed in delivering possession of the Premises to Tenant beyond
the Estimated Commencement Date, this Lease shall not be void or
voidable nor shall Landlord be liable to Tenant for any resulting
loss or damage; provided, however, that Tenant shall not be liable
for any Monthly Rental (defined below) hereunder, and the
Commencement Date shall not be deemed to have occurred, until
Landlord delivers possession of the Premises with the TI Work
substantially completed. Notwithstanding the foregoing, if
Landlord’s failure to so deliver possession of the Premises
to Tenant on or before the Estimated Commencement Date specified in
Item 4 of the Basic Lease Provisions is attributable to any Tenant
Delay (defined below), then the Commencement Date shall not be
advanced to the date on which possession of the Premises is
tendered to Tenant, and Landlord shall be entitled to full
performance by Tenant (including the payment of Monthly Rental)
from the date Landlord would have been able to deliver the Premises
to Tenant but for the Tenant Delay(s). As used herein, the term
“Tenant Delay” shall mean one (1) or more actual delays
in the performance of the TI Work which are caused by (a)
Tenant’s request for changes in the Plans and Specifications,
(b) Tenant’s request for materials, finishes or installations
which are other than Building standard materials or (c) any other
act or omission of Tenant; provided, however, that no delay shall
be deemed a Tenant Delay unless Landlord notifies Tenant promptly
of any such act or failure to act.

 

 

5

 

 

Section 3.3                                            

Tenant’s Option to Extend Term

 

Provided Tenant is
not in default under the Lease, either at the time Tenant makes
such election or at the time the Extension Period (as defined
below) would otherwise commence, and Tenant has not received three
(3) or more notices of events of default during the previous five
years, Tenant shall have the number of options to extend the Lease
Term set forth in Item 5 of the Basic Lease Provisions, such option
being for an additional period of five (5) years (the
“Extension Period”). Such option shall be exercised, if
at all, by Tenant giving written notice of exercise thereof (the
“Option Notice”) to Landlord not fewer than nine (9)
months nor more than twelve (12) months in advance of the
expiration of the then-current Lease Term of this Lease. In the
event Tenant exercises the option to extend this Lease, the Lease
shall continue for the Extension Period on all of the terms and
conditions as herein set forth, provided that Base Rent for the
Extension Period shall be as set forth in Section 3.4; and the
Lease Term shall be deemed to include such Extension Period; and
Landlord will not be obligated to improve the Premises or to
contribute to their improvement. If Tenant does not exercise the
extension option as provided herein, then all remaining unexercised
term extension rights hereunder shall become null and void. The
extension option shall be personal to the original Tenant named
herein, or a transferee which succeeds to such original
Tenant’s interest herein pursuant to an Exempt Transfer as
described in Section 9.1(c) hereof, but shall become null and void
upon any other assignment or sublease of this Lease by
Tenant.

 

Section 3.4                                            

Fair Market Rental Value

 

On
commencement of the Extension Period, the Lease shall be adjusted
to reflect a new Base Rent for the Premises equal to 100% of the
average base rents per rentable square foot charged for comparable
non-renewal, non-equity tenants of comparable size, considering the
age of the building, quality, floor height, location in the South
Platte River buildings in the Denver market, and other reasonable
factors relevant to a fair market rent determination, for a
comparable term under leases entered into within six months prior
to the date Tenant exercises the applicable option, and further
taking into account the relative creditworthiness of the Tenant and
the presence or absence of brokerage commissions, tenant
improvement allowance(s), landlord initial improvement work at
landlord’s expense, base years, construction time, and all
other lease concessions (the “Fair Market Rental
Rate”), as reasonably calculated by Landlord in good faith;
provided, however, that in no event shall the Base Rent for any
Extension Period be less than the Base Rent payable immediately
prior to the commencement of the Extension Period. Landlord shall
advise Tenant of such rental adjustment within one month after
Landlord’s receipt of Tenant’s Option Notice. Tenant
shall have twenty (20) days following Tenant’s receipt of
notice of the rental adjustment (the “Rent Adjustment
Notice”) within which to accept such terms by executing any
appropriate reasonable documentation submitted by Landlord to
Tenant. If Tenant disagrees with Landlord’s calculation of
the Fair Market Rental Rate and if Landlord and Tenant have not
reached a written agreement on Fair Market Rental Rate for the
applicable Extension Period within thirty (30) days after the date
Landlord gives Tenant the Rent Adjustment Notice (the
“Adjustment Notice Date”), each party shall appoint a
qualified real estate broker with at least seven years of
experience in office leasing in the South Platte River Denver
marketplace (a “Qualified Broker”) for the purpose of
determining Fair Market Rental Rate for the applicable Extension
Period and shall give written notice of such appointment to the
other party within forty (40) days after the Adjustment Notice
Date. The written agreement of the Qualified Brokers appointed as
provided above regarding the Fair Market Rental Rate shall be a
conclusive determination of the Fair Market Rental Rate for
purposes of determining the Base Rent payable by Tenant during the
applicable Extension Period. If such Qualified Brokers have not
reached a written agreement on the Fair Market Rental Rate within
sixty (60) days after the Adjustment Notice Date, the two Qualified
Brokers shall select a third Qualified Broker and give written
notice of such appointment to Landlord and Tenant within seventy
(70) days after the Adjustment Notice Date. The three Qualified
Brokers so appointed shall fix a date for completion of their
determination of the Fair Market Rental Rate, such date to be not
later than ninety (90) days after the Adjustment Notice Date. On or
before such date, the three Qualified Brokers shall meet and shall
submit their determinations in writing to Landlord and Tenant. The
Fair Market Rental Rate used to determine the new Base Rent for the
Extension Period for the Premises, as applicable, shall be an
amount equal to the numerical average of the two figures closest to
each other in absolute value. (For purposes of example only, if the
determinations were $4.50/sf, $5.00/sf and $5.55/sf, the governing
Fair Market Rental Rate would be $4.75/sf, the average of the two
lower figures, since the $.50 difference between them is less than
the $.55 difference between the higher two figures.) If for any
reason any of the Qualified Brokers fails timely to submit its
determination of the Fair Market Rental Rate to Landlord and
Tenant, then the numerical average of such determinations as were
timely submitted shall be the governing Fair Market Rental Rate.
Landlord and Tenant shall each be responsible for payment of the
fees of the Qualified Broker it selects; the fee for the third
Qualified Broker, if any, shall be divided evenly between Landlord
and Tenant, such that each party shall pay one-half thereof. In no
event shall the terms offered by Landlord under this Section 3.4
bind Landlord to offer such terms to Tenant or to any other person
or entity at any time except as explicitly set forth herein, nor
shall such terms prevent Landlord from leasing the Premises to any
person or entity on different terms if Tenant does not timely
accept the terms determined in accordance with this Section
3.4.

 

Section 3.5                                            

Termination Option

 

So long
as no default defined in Section `14.1 has occurred before the
Notice Date defined in this Section and neither a default exists
nor circumstances exists that would be a default after the giving
of notice or the passage of time, or both, on the Termination Date
defined in this Section, Tenant will have the right to terminate
this Lease as of the last day of the 90th full calendar month
of the Lease Term (the “Termination Date”) by written
notice to Landlord given at least nine full months before the
Termination Date (the “Notice Date”). Tenant’s
notice will be accompanied by its payment of: (a) (i) the
unamortized costs incurred by Landlord to improve the Premises
pursuant to the TI Work; (ii) the unamortized amounts of abated
Base Rent; (iii) the unamortized amount paid by Landlord pursuant
to Article XVIII;
and (iv) interest on the foregoing unamortized amounts at the rate
of 8% per annum. The amortizations will be over the Lease Term,
plus (b) the Base Rent due for the six months following the
Termination Date. Landlord and Tenant will perform all of their
obligations in this Lease up to and including the Termination Date.
On the Termination Date, the rights and obligations of Landlord and
Tenant that have not accrued or do not survive this Lease by its
terms or by law will cease. The termination option shall be
personal to the original Tenant named herein, or a transferee which
succeeds to such original Tenant’s interest herein pursuant
to an Exempt Transfer as described in Section 9.1(c) hereof, and
shall become null and void upon any other assignment or sublease of
this Lease by Tenant.

 

 

6

 

 

ARTICLE IV

RENT AND OPERATING EXPENSES

 

Section 4.1                                            

Base Rent

 

Subject
to the provisions of Section 4.3 below, from and after the
Commencement Date, Tenant shall pay to Landlord without deduction
or offset, except as expressly stated herein, the Base Rent for the
Premises in the total amount shown in Item 6 of the Basic Lease
Provisions, subject to adjustments as provided in subparagraph (b)
below. The rent shall be due and payable in advance commencing on
the Commencement Date (as prorated for any partial month) and
continuing thereafter on the first day of each successive calendar
month of the Lease Term. No demand notice or invoice shall be
required. An installment of rent in the amount of one (1) full
month’s Base Rent at the initial rate specified in Item 6 of
the Basic Lease Provisions shall be delivered to Landlord
concurrently with Tenant’s execution of this Lease and shall
be applied against the Base Rent first due and payable hereunder.
As used in this Lease, the term “Monthly Rental” shall
mean the amount payable by Tenant in respect of any month during
the term for Base Rent and Tenant’s Percentage Share of
Operating Expenses (defined below); and the term “Additional
Rent” shall mean all amounts of any type whatsoever other
than Base Rent to be paid by Tenant pursuant to the terms of this
Lease. Base Rent and Additional Rent are collectively referred to
herein as “rent” or “rental.”

 

Section 4.2                                            

Operating Expenses

 

(a) For each Expense
Recovery Period, Tenant shall pay, as Additional Rent,
Tenant’s Percentage Share (as set forth in the Basic Lease
Provisions) of Operating Expenses (defined below). Tenant
acknowledges Landlord’s rights to make changes or additions
to the Building from time to time pursuant to Section 6.5 below, in
which event the total rentable square footage within the Building
shall be adjusted.

 

(b) Commencing prior to
the start of the first full Expense Recovery Period of the Lease
(as set forth in Item 7 of the Basic Lease Provisions), and prior
to the start of each full or partial Expense Recovery Period
thereafter, Landlord shall give Tenant a written estimate of the
amount of Tenant’s Percentage Share of Operating Expenses for
the Expense Recovery Period or portion thereof. Tenant shall pay
the estimated amount to Landlord in equal monthly installments in
advance with Base Rent. If Landlord has not furnished its written
estimate for any Expense Recovery Period by the time set forth
above, Tenant shall continue to pay cost reimbursements at the
rates established for the prior Expense Recovery Period, if any;
provided that when the new estimate is delivered to Tenant, Tenant
shall, at the next monthly payment date, pay any accrued cost
reimbursements based upon the new estimate.

 

(c) Within one hundred
twenty (120) days after the end of each Expense Recovery Period,
Landlord shall endeavor to furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses
incurred by Landlord during the period and the parties shall,
within thirty (30) days thereafter, make any payment or allowance
necessary to adjust Tenant’s estimated payments, if any, to
Tenant’s Percentage Share of actual Operating Expenses for
such Expense Recovery Period as shown by the annual statement. Any
amount due Tenant shall be credited against installments next
coming due under this Section 4.2, and any deficiency shall be paid
by Tenant together with the next installment. If Tenant has not
made estimated payments during the Expense Recovery Period, any
amount owing by Tenant pursuant to subsection (a) above shall be
paid to Landlord in accordance with Article XVI. Should Tenant fail
to object in writing to Landlord’s determination of actual
Operating Expenses within sixty (60) days following delivery of
Landlord’s expense statement, Landlord’s determination
of actual Operating Expenses for the applicable Expense Recovery
Period shall be conclusive and binding on the parties.

 

(d) Even though the
Lease has terminated and the Tenant has vacated the Premises when
the final determination is made of Tenant’s share of
Operating Expenses for the Expense Recovery Period in which the
Lease terminates, Tenant shall, upon notice, pay the entire
increase due over the estimated expenses paid. Conversely, any
overpayment made in the event expenses decrease shall be rebated by
Landlord to Tenant.

 

(e) If, at any time
during any Expense Recovery Period, any one or more of the
Operating Expenses are increased to a rate(s) or amount(s) in
excess of the rate(s) or amount(s) used in calculating the
estimated expenses for the year, then Tenant’s estimated
share of Operating Expenses shall be increased for the month in
which the increase becomes effective and for all succeeding months
by an amount equal to Tenant’s proportionate share of the
increase. Landlord shall give Tenant written notice of the amount
or estimated amount of the increase, the month in which the
increase will become effective, Tenant’s monthly share
thereof, and the months for which the payments are due. Tenant
shall pay the increase to Landlord as a part of Tenant’s
monthly payments of estimated expenses, as provided in paragraph
(b) above, commencing with the month in which it is
effective.

 

 

7

 

 

(f) The term Operating
Expenses shall include all expenses of operation and maintenance of
the Building, together with all appurtenant Common Facilities (as
defined in Section 6.2), and shall include the following charges by
way of illustration but not limitation: water and sewer charges;
taxes; insurance premiums or reasonable premium equivalents, should
Landlord elect to self-insure any risk that Landlord is authorized
to insure hereunder; license permit and inspection fees; heat;
light; power; janitorial services; air conditioning; supplies;
materials; equipment; tools; programs instituted to comply with
transportation management requirements and Landlord’s parking
management programs, including shuttles to and from off site
locations; tenant services; amortization of capital investments
over their useful life in accordance with generally accepted
accounting principles; labor; reasonably allocated wages and
salaries fringe benefits and payroll taxes for administrative and
other personnel directly applicable to the Building, including both
Landlord’s personnel and outside personnel but exclusive of
personnel above the level of building manager; any expense incurred
pursuant to Sections 6.1, 6.2, 6.4, 7.2 and 10.2 and Exhibits B and C below; and a
reasonable overhead/management fee. It is understood that Operating
Expenses shall include competitive charges for direct services
provided by any subsidiary or division of Landlord. The term
“taxes,” as used herein shall include the following:
(i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; (ii) other
taxes, documentary transfer fees, charges and assessments which are
levied with respect to this Lease or to the Building, and any
improvements, fixtures and equipment and other property of Landlord
located in the Building except that general net income and
franchise taxes imposed against Landlord shall be excluded; (iii)
any tax surcharge or assessment which shall be levied in addition
to or in lieu of real estate or personal property taxes other than
taxes covered by Article VIII; and (iv) costs and expenses incurred
in contesting the amount or validity of any tax by appropriate
proceedings. In the event utility expenses are reduced due to
deregulation, the Operating Expenses in Tenant’s Operating
Expense Base Year shall be adjusted to reflect the reduced utility
expenses. A copy of Landlord’s unaudited statement of
expenses shall be made available to Tenant upon request. The
Operating Expenses may be extrapolated by Landlord to reflect at
least ninety-five percent (95%) occupancy of the rentable area of
the Building during any Expense Recovery Period.

 

(g) Landlord shall have
the right, from time to time, to allocate some or all of the
Operating Expenses for the Building among different portions, such
as office or retail portions, of the Building (“Cost Pools”), in accordance with
generally accepted accounting and management practices. The
Operating Expenses within each Cost Pool shall be allocated and
charged to tenants within such Cost Pool as an amount per square
foot of rentable area, based upon the total rentable area within
such Cost Pool. The Operating Expenses for the Building (or only
those Operating Expenses allocable to the Cost Pool of the Building
which includes the tenants of such space, if such an allocation is
made) shall be allocated and charged to tenants based on the
rentable area of the Building (or based on the rentable area of
such Cost Pool if such an allocation of Operating Expenses is
made).

 

(h) Without limiting
the generality of the terms and provisions of subparagraph (c)
above, Tenant shall have the right to review or audit, at
Tenant’s sole cost, any of Landlord’s books and records
pertaining to Operating Expenses or Landlord’s calculations
of Tenant’s Percentage Share thereof, on thirty (30)
days’ advance written notice thereof to Landlord, which
notice shall be delivered, if at all, within one (1) year of
Landlord’s delivery of the annual expense reconciliation
statement to Tenant. In no event shall Tenant perform more than one
audit during any calendar year. Such review or audit shall take
place where such records are kept (provided such location is in the
general geographic region of the Building), and shall be conducted
by a reputable firm which regularly provides such services or any
reputable accounting firm chosen by Tenant. Tenant shall use all
reasonable efforts to minimize interference with Landlord’s
business during any such audit and Tenant shall provide a copy of
such audit to Landlord within thirty (30) days of receipt of same
by Tenant. If such examination shall establish any overcharge by
Landlord, the amount of such overcharge shall be automatically
credited against Tenant’s Operating Expenses contributions
next coming due hereunder, or upon the expiration or termination of
this Lease pay to Tenant the unapplied balance of any such
credit.

 

Section 4.3                                            

Security Deposit

 

Concurrently with
Tenant’s delivery of this Lease, Tenant shall deliver to
Landlord the Security Deposit, as stated in Item 9 of the Basic
Lease Provisions, to be held by Landlord as security for the full
and faithful performance of Tenant’s obligations under this
Lease. Upon any default or breach by Tenant under the Lease,
including specifically Tenant’s failure to pay Base Rent or
Additional Rent or to abide by its obligations under Sections 7.1
and 15.3 below, Landlord may, without prejudice to any other remedy
it has, draw on that portion of the Security Deposit (i) as full or
partial compensation for that default, (ii) for any expense, loss,
damage or liability that Landlord suffers because of Tenant’s
default or breach, or (iii) pay any arrearage or otherwise any Base
Rent or Additional Rent in default or breach. If any portion of the
Security Deposit is so applied, Tenant shall, within five (5) days
after such application by Landlord, restore the Security Deposit to
its original amount. Landlord shall not be required to keep the
proceeds of the Security Deposit separate from its general funds
and Tenant shall not be entitled to interest on the Security
Deposit, if any. In the event of bankruptcy or other debtor relief
proceedings by or against Tenant, the Security Deposit shall be
deemed to be applied first to the payment of rent and other charges
due Landlord, in the order that such rent or charges become due and
owing, for all periods prior to filing of such proceedings. So long
as no default by Tenant has occurred before the end of the
36th full
month of the Lease Term and no circumstance then exists that would
be a default by Tenant after giving of notice or the passage of
time, or both, Landlord will return to Tenant before the end of the
37th full
month of the Lease Term the amount by when the Security Deposit
exceeds the Base Rent due for the last full month of the Lease
Term. If Tenant fully performs its obligations under this Lease,
the Security Deposit or any balance thereof shall be returned to
Tenant (or at Landlord’s option to the last assignee of
Tenant’s interest in this Lease) after the expiration of the
Lease Term, provided that Landlord may retain the Security Deposit
until such time as all amounts due from Tenant in accordance with
this Lease have been determined and paid in full.

 

 

8

 

 

Section 4.4                                            

REIT

 

Landlord
and Tenant hereby agree that it is their intent that all Rent due
under this Lease shall qualify as “rents from real
property” within the meaning of Sections 512(b)(3) and 856(d)
of the Internal Revenue Code of 1986, as amended (the
“Code”) and the U.S. Department of the Treasury
Regulations promulgated thereunder (the “Regulations”).
In the event that (i) the Code or the Regulations, or
interpretations thereof by the Internal Revenue Service contained
in revenue rulings or other similar public pronouncements, shall be
changed so that any Rent no longer so qualifies as “rent from
real property” for purposes of either said Section 512(b)(3
or Section 856(d) or (ii) Landlord, in its sole discretion,
determines that there is any risk that all or part of any Rent
shall not qualify as “rents from real property” for the
purposes of either said Sections 512(d)(3) or 856(d), Tenant agrees
to cooperate with Landlord and enter into such amendment or
amendments to this Lease as Landlord deems necessary to qualify all
Rents as “rents from real property,” provided, however,
that (A) any amendment required under this Section shall be made so
as to produce, to the extent possible, the equivalent (in economic
terms) Rent as payable before the amendment, and (B) in the event
that Landlord determines that an amendment cannot produce
economically equivalent Rent as described in clause (A), the Rent
payable under any such amendment shall not be any less favorable to
Tenant than the Rent payable under this Lease immediately prior to
such amendment. The parties agree to execute such further
commercially reasonable instrument as may reasonably be required by
Landlord in order to give effect to the foregoing provisions of
this Section. Additionally, no Rent payable under this Lease may be
attributable to personal property unless (i) such personal property
is leased under, or in connection with, the lease of real property
hereunder, and (ii) the Rent attributable to the personal property
for each taxable year does not exceed 15% of the total Rent for the
taxable year attributable to both the real and personal property
leased under or in connection with this Lease.

 

 

9

 

 

ARTICLE V

USES

 

Section 5.1                                            

Uses

 

Tenant
shall use the Premises only for the purposes stated in Item 3 of
the Basic Lease Provisions. The parties agree that any contrary use
shall be deemed to cause material and irreparable harm to Landlord
and shall entitle Landlord to injunctive relief, in addition to any
other available remedy. Tenant shall not do nor permit anything to
be done in or about the Premises which will in any way interfere
with the rights of other occupants of the Building or use, or allow
the Premises to be used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises. Tenant shall not do or permit to
be done anything which will invalidate or increase the cost of any
insurance policy(ies) covering the Building, and/or their contents,
and shall comply with all applicable insurance underwriters’
rules and the requirements of the Pacific Fire Rating Bureau or any
other organization performing a similar function. Tenant shall
comply, at its expense, with all present and future laws,
ordinances, and requirements of all governmental authorities that
pertain to Tenant or its use of the Premises, including without
limitation, all federal and state occupational, health and safety
requirements and all recorded covenants, conditions and
restrictions affecting the Building whether or not Tenant’s
compliance will necessitate expenditures or interfere with its use
and enjoyment of the Premises. Subject to Section 7.6 below, Tenant
shall not generate, handle, store or dispose of “Hazardous
Materials”, as that term is defined below, in the Premises or
the Building without the prior written consent of Landlord, which
consent may be refused or conditioned by Landlord in its sole and
absolute discretion. Tenant acknowledges that: (a) the Building
does not comply in certain respects with the requirements of the
‘Americans with Disabilities Act; and (b) certain portions of
the Building may contain asbestos containing material. Landlord has
been advised that any such materials are non-friable and do not
represent a health risk. Tenant is invited to review reports
concerning these matters on file at the office of the Building.
Landlord makes no representations, express or implied, as to the
compliance of the Premises or the Building with applicable
construction related accessibility standards.

 

Section 5.2                                            

Signs

 

(a) Tenant shall have
the right, at its sole cost and expense, to affix (i) one (1)
Building-standard identification sign on the second floor of the
Building outside the Premises, and (ii) so long as the We Work
lease does not limit such signage, Building signage west (highway)
side of the Building in a location designated by Landlord. The
signage shall be in strict conformance with the Building’s
signage program and applicable laws, which may be amended by
Landlord from time to time in its sole and absolute discretion, and
shall be provided by Landlord, at Tenant’s expense. Tenant
shall be responsible for maintaining such signage in good condition
and repair during the Lease Term. Tenant shall not place or allow
to be placed any other sign, decoration or advertising matter of
any kind that is visible from the exterior of the Premises. Any
such sign or decoration may be immediately removed by Landlord at
Tenant’s expense without notice to Tenant and such removal
shall not constitute a breach of this Lease nor entitle Tenant to
claim damages. Tenant shall be responsible for removal, and all
costs and expenses resulting therefrom, of the sign following the
expiration or earlier termination of the Lease and for repairing
any damage to the Building or the Premises resulting from such
removal.

 

(b) Landlord shall
provide Tenant with three (3) lines of signage name space in the
Building’s “main lobby directory” (based upon a
policy of one line per 4,000, more or less, rentable square feet of
space in the Premises). Such signage shall conform to criteria for
signs established by Landlord and shall be ordered through
Landlord, at Tenant’s sole cost and expense.

 

 

10

 

 

ARTICLE VI

LANDLORD SERVICES

 

Section 6.1                                            

Utilities and Services

 

Landlord shall pay
for and furnish to the Premises the utilities and services
described in Exhibit
B subject to the conditions and payment obligations and
standards set forth in this Lease. Landlord shall not be liable for
any failure to furnish any services or utilities when the failure
is the result of any accident or other cause beyond
Landlord’s reasonable control, nor shall Landlord be liable
for damage to Tenant’s equipment resulting from power surges.
Landlord’s failure to furnish any services or utilities shall
not entitle Tenant to any damages, relieve Tenant of the obligation
to pay Base Rent or Additional Rent, or constitute a constructive
or other eviction of Tenant, except that Landlord shall diligently
attempt to restore the service or utility promptly. Tenant shall
comply with all rules and regulations, which Landlord may
reasonably establish for the provision of services and utilities
and shall cooperate with all reasonable conservation practices
established by Landlord. Landlord shall, at all reasonable times,
have free access to all electrical and mechanical installations of
Landlord.

 

Section 6.2                                            

Operation and Maintenance of Common Facilities

 

During
the Lease Term, Landlord shall operate all Common Facilities within
the Building. The term “Common Facilities” shall mean
all areas within the exterior boundaries of the Building which are
not held for exclusive use by persons entitled to occupy space, and
all other appurtenant areas and improvements provided by Landlord
for the common use of Landlord and tenants and their respective
employees and invitees, including without limitation, parking areas
and structures, driveways, sidewalks, landscaped and planted areas,
hallways and interior stairwells not located within the premises of
any tenant, common entrances and lobbies, elevators and restrooms
not located within the premises of any tenant.

 

Section 6.3                                            

Use of Common Facilities

 

The
occupancy by Tenant of the Premises shall include the use of the
Common Facilities in common with Landlord and with all others for
whose convenience and use the Common Facilities may be provided by
Landlord, subject, however, to compliance with all rules and
regulations as are prescribed from time to time by Landlord.
Landlord shall operate and maintain the Common Facilities in the
manner Landlord may determine to be appropriate. Landlord shall, at
all times during the Lease Term, have exclusive control of the
Common Facilities and may restrain any use or occupancy, except as
authorized by Landlord’s rules and regulations. Tenant shall
keep the Common Facilities clear of any obstruction or unauthorized
use related to Tenant’s operations. Nothing in this Lease
shall be deemed to impose liability upon Landlord for any damage to
or loss of the property of, or for any injury to Tenant, its
invitees or employees. Landlord may temporarily close any portion
of the Common Facilities for repairs, remodeling and/or alterations
to prevent a public dedication or the accrual of prescriptive
rights or for any other reason deemed sufficient by
Landlord.

 

Section 6.4                                            

Tenant Parking

 

During
the Lease Term, Tenant shall be entitled to utilize the number and
type of parking spaces specified in the Summary within the parking
areas for the Property as designated by Landlord from time to time.
Landlord shall at all times have the right to establish and modify
the nature and extent of the parking areas for the Building and
Property (including whether such areas shall be surface,
underground and/or other structures). In addition, if Tenant is not
the sole occupant of the Property, Landlord may, in its discretion,
designate any unreserved parking spaces as reserved parking. The
terms and conditions for parking at the Property shall be as
specified in the Summary and in the Rules and Regulations regarding
parking as contained in Exhibit C attached hereto, as
the same may be modified by Landlord from time to time. Tenant
shall not use more parking spaces than its allotment and shall not
use any parking spaces specifically assigned by Landlord to other
tenants, if any, or for such other uses such as visitor,
handicapped or other special purpose parking. Tenant’s
visitors shall be entitled to access to the parking areas on the
Property designated for visitor use, subject to availability of
spaces and the terms of the Summary.

 

Section 6.5                                            

Changes and Additions by Landlord

 

Landlord reserves
the right to make alterations or additions to the Building or to
the attendant fixtures, equipment and Common Facilities. Landlord
may, at any time, relocate or remove any of the various buildings,
parking areas and other Common Facilities, and may add buildings
and areas from time to time. No change shall entitle Tenant to any
abatement of Base Rent or Additional Rent or other claim against
Landlord, provided that the change does not deprive Tenant of
reasonable access to or use of the Premises. Landlord also reserves
the right to subdivide the property, and Tenant shall cooperate in
signing any maps, permits and certificates to facilitate same,
provided that Tenant shall not thereby be required to incur
additional costs.

 

 

11

 

 

ARTICLE VII

MAINTAINING THE PREMISES

 

Section 7.1                                            

Tenant’s Maintenance and Repair

 

When
and if needed or whenever requested by Landlord, Tenant, at its
sole expense, shall make all repairs and replacements necessary to
keep the Premises in the condition as existed on the Commencement
Date (or on any later date that the improvements may have been
installed), excepting ordinary wear and tear. All repairs and
replacements shall be at least equal in quality to the original
work, shall be made only by a licensed bonded contractor approved
in writing in advance by Landlord, and shall be made only at the
time or times approved by Landlord. Any contractor utilized by
Tenant shall be subject to Landlord’s standard requirements
for contractors, as modified from time to time. Landlord may impose
reasonable restrictions and requirements with respect to repairs,
as provided in Section 7.3, and the provisions of Section 7.4 shall
apply to all repairs. Alternatively, Landlord may elect to make any
such repair on behalf of Tenant and at Tenant’s expense, and
Tenant shall promptly reimburse Landlord for all costs incurred
upon submission of an invoice.

 

Section 7.2                                            

Landlord’s Maintenance and Repair

 

(a) Subject to Section
7.1 and Article XI, Landlord shall provide service, maintenance and
repair with respect to any air conditioning, ventilating or heating
equipment which serves the Premises and shall maintain in good
repair the roof, foundations, footings, the exterior surfaces of
the exterior walls of the Building, and the common structural,
electrical and mechanical systems, except that Tenant, at its
expense, shall make all repairs which Landlord deems reasonably
necessary as a result of the act or negligence of Tenant, its
agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or
firm, including any employee or agent of Landlord or any of
Landlord’s affiliates or divisions, to perform any service,
repair or maintenance function. Landlord need not make any other
improvements or repairs, except as specifically required under this
Lease, and nothing contained in this Section shall limit
Landlord’s right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided
elsewhere in this Lease. Tenant understands that it shall not make
repairs at Landlord’s expense or by rental
offset.

 

 

(b) Except as provided
in Sections 11.1 and 12.1 below, there shall be no abatement of
Base Rent or Additional Rent and no liability of Landlord by reason
of any injury to or interference with Tenant’s business
arising from the making of any repairs, alterations or improvements
to any portion of the Building, including repairs to the Premises,
nor shall any related activity by Landlord constitute an actual or
constructive eviction; provided, however, that in making repairs,
alterations or improvements, Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant’s business
in the Premises.

 

(c) Where maintenance
or repair work is necessary within the Premises to cure an
emergency situation, Landlord shall attempt to contact Tenant prior
to performing such work, but, shall perform such work immediately
upon Landlord’s discovery thereof, if the circumstances
dictate an immediate response, regardless of whether Landlord was
able to contact Tenant.

 

Section 7.3                                            

Alterations

 

Tenant
shall make no alterations, additions or improvements to the
Premises without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. If any such improvement
requires approval by or notice to the lessor of a superior lease or
the holder of a mortgage, no work shall proceed until such approval
has been received or such notice has been given. Landlord may
impose, as a condition to its consent, any requirements that
Landlord, in its discretion, may deem reasonable or desirable,
including but not limited to a requirement that all work be covered
by a lien and completion bond satisfactory to Landlord and
requirements as to the manner, time and contractor for performance
of the work. Landlord may require that Tenant enter into an
agreement with Landlord for the work to be performed by
Landlord’s contractor, in which event Tenant shall pay to
Landlord, in advance as Additional Rent, the cost of construction
as estimated by Landlord with a final reconciliation payment to be
made by the appropriate party upon completion of the work. Should
Landlord authorize Tenant to perform the work with a contractor
approved by Landlord, Tenant shall obtain all required permits for
the work and shall perform the work in compliance with all
applicable laws, regulations and ordinances. In any event, Landlord
shall be entitled to a supervision fee in the amount of the lesser
of Landlord’s actual costs incurred for supervision and five
percent (5%) of the total cost of the work. Under no circumstances
shall Tenant make any improvement, which incorporates
asbestos-containing construction materials into the Premises. Any
request for Landlord’s consent shall be made in writing and
shall contain architectural plans describing the work in detail
reasonably satisfactory to Landlord. Unless Landlord otherwise
agrees in writing, all alterations, additions or improvements
affixed to the Premises (including any office partitions or
telephone systems paid for from the Tenant Improvement Allowance
but excluding moveable trade fixtures and furniture) shall become
the property of Landlord and shall be surrendered with the Premises
and shall remain permanently affixed to the Building at the end of
the Lease Term, except that Landlord may, by notice to Tenant given
at the time of Landlord’s consent to the alteration or
improvement, require Tenant to remove by the Expiration Date or
sooner termination date of this Lease all or any alterations,
decorations, fixtures, additions, improvements and the like
installed either by Tenant or by Landlord at Tenant’s
request, and to repair any damage to the Premises arising from that
removal. Except as provided in this Lease or in any Exhibit to this
Lease, should Landlord make any alteration or improvement to the
Premises for Tenant, Landlord shall be entitled to reimbursement
from Tenant for all costs incurred. Within thirty (30) days after
completion of Tenant’s alterations requiring the submission
of plans to Landlord as set forth herein, Tenant shall furnish to
Landlord a complete set of “as-built” plans and
specifications.

 

 

12

 

 

Section 7.4                                            

Mechanic’s Liens

 

Tenant
shall keep the Premises free from any liens arising out of any work
performed, materials furnished, or obligations incurred by or for
Tenant. Upon request by Landlord, Tenant shall promptly cause any
such lien to be released by posting a bond in accordance with
applicable law. In the event that Tenant shall not, within thirty
(30) days following the imposition of any lien, cause the lien to
be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other available remedies,
the right to cause the lien to be released by any means it deems
proper, including payment of or defense against the claim giving
rise to the lien. All expenses so incurred by Landlord, including
Landlord’s attorneys’ fees, shall be reimbursed by
Tenant promptly following Landlord’s demand, together with
interest from the date of payment by Landlord at the maximum rate
permitted by law until paid. Tenant shall give Landlord no less
than twenty (20) days prior notice in writing before commencing
construction of any kind on the Premises so that Landlord may post
and maintain notices of non-responsibility on the
Premises.

 

Section 7.5                                            

Entry and Inspection

 

Landlord shall at
all times have the right to enter the Premises to inspect them, to
supply services in accordance with this Lease, to protect the
interests of Landlord in the Premises, and to submit the Premises
to prospective or actual purchasers or encumbrance holders or to
prospective tenants (or during the last one hundred and eighty
[180] days of the Lease Term or when an uncured Tenant default
exists), all without being deemed to have caused an eviction of
Tenant and without abatement of Base Rent, except as provided
elsewhere in this Lease. Landlord shall at all times have and
retain a key which unlocks all of the doors in the Premises,
excluding Tenant’s vaults and safes, and Landlord shall have
the right to use any and all means which Landlord may deem proper
to open the doors in an emergency in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord shall
not, under any circumstances, be deemed to be a forcible or
unlawful entry into or a detainer of the Premises or any eviction
of Tenant from the Premises.

 

Section 7.6                                            

Maintenance Related to Hazardous Materials

 

(a) Subject to the
provisions contained in Section 5.1, as used herein, the term
“Hazardous Material” means any hazardous or toxic
substance, chemical, material or waste or component thereof,
including radioactive materials and components, (i) the presence of
which requires investigation or remediation under any federal,
state or local statute, regulation, ordinance, order, action or
policy; or (ii) which is or becomes defined as a “hazardous
waste” or “hazardous substance” under any
federal, state or local statute, regulation or ordinance or
amendments thereto; or (iii) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or
otherwise hazardous and is or becomes regulated by any governmental
authority, agency, department, commission, board, agency or
instrumentality of the United States, the State of Colorado or any
political subdivision thereof; or (iv) the presence of which on the
Premises causes or threatens to cause a nuisance upon the Premises
or to adjacent properties or poses or threatens to pose a hazard to
the Premises or the health or safety of persons on or about the
Premises; or (v) without limitation, which contains gasoline,
diesel fuel or other petroleum hydrocarbons; or (vi) which contains
polychlorinated biphenyls (PCBs), asbestos or urea formaldehyde
foam insulation.

 

(b) Tenant acknowledges
that Landlord may incur costs (A) for complying with laws, codes,
regulations or ordinances relating to Hazardous Material, or (B)
otherwise in connection with Hazardous Material, including, without
limitation, the following: (i) Hazardous Material present in soil
or ground water; (ii) Hazardous Material that migrates, flows,
percolates, diffuses or in any way moves onto or under the
Building; (iii) Hazardous Material present on or under the Building
as a result of any discharge, dumping or spilling (whether
accidental or otherwise) on the Building by other tenants of the
Building or their agents, employees, contractors or invitees, or by
others; and (iv) material which becomes Hazardous Material due to a
change in laws, codes, regulations or ordinances which relate to
hazardous or toxic material, substances or waste. Tenant agrees
that the costs incurred by Landlord with respect to, or in
connection with, complying with laws, codes, regulations or
ordinances relating to Hazardous Material shall be an Operating
Expense, unless the cost of such compliance, as between Landlord
and Tenant, is made the responsibility of Tenant under this Lease.
To the extent Tenant contributes to any such Operating Expense
relating to Hazardous Material, and such Operating Expense is
subsequently recovered or reimbursed through insurance, or
recovered from responsible third parties, or other action, Tenant
shall be entitled to a proportionate share of such Operating
Expense to which such recovery or reimbursement
relates.

 

(c) Notwithstanding
anything to the contrary contained in this Lease, Tenant shall not
transport, use, store, maintain, generate, manufacture, handle,
dispose, release, or discharge any Hazardous Material upon or about
the Premises or the Building, nor permit Tenant’s employee,
agents, contractors, and other occupants of the Premises to engage
in such activities upon or about the Building. However, the
foregoing provisions shall not prohibit the transportation to and
from, and use, storage, maintenance, and handling within, the
Premises of ordinary cleaning products and office supplies (such as
correction fluid, copy machine toner, etc.) that are not regulated
by governmental authorities and are used in the ordinary course of
Tenant’s permitted business, provided all of the following
conditions are met: (i) such substances are used and maintained
only in such quantities as are reasonably necessary for such
permitted use of the Premises, strictly in accordance with
applicable laws and the manufacturers’ instructions therefor;
(ii) such substances are not disposed of, released, or discharged
on the Building and are transported to and from the Premises in
compliance with all laws, and as Landlord shall reasonably require;
(iii) if any applicable law or if Landlord’s trash removal
contractor requires that any such substances be disposed of
separately from ordinary trash, Tenant shall make arrangements at
Tenant’s sole cost and expense for such disposal directly
with a qualified and licensed disposal company at a lawful disposal
site, and shall ensure that disposal occurs frequently enough to
prevent unnecessary storage of such substances in the Premises; and
(iv) any remaining such substances shall be completely, properly,
and lawfully removed from the Building upon expiration or earlier
termination of this Lease.

 

 

13

 

 

(d) Tenant shall
promptly notify Landlord of: (i) any enforcement, cleanup or other
regulatory action taken or threatened by any governmental or
regulatory authority with respect to the presence of any Hazardous
Material on the Premises or the migration thereof from or to other
property, (ii) any demands or claims made or threatened by any
party against Tenant or the Premises relating to any loss or injury
resulting from any Hazardous Material on or from the Premises, and
(iii) any matters where Tenant is required by law to give a notice
to any governmental or regulatory authority respecting any
Hazardous Material on the Premises. Landlord shall have the right
(but not the obligation) to join and participate, as a party, in
any legal proceedings or actions affecting the Premises initiated
in connection with any environmental, health, or safety law. If any
Hazardous Material is released, discharged or disposed of by Tenant
or any other occupant of the Premises, or their employees, agents,
or contractors, on or about the Building in violation of this
Lease, in addition to notifying Landlord, Tenant shall immediately,
properly and in compliance with applicable laws clean up and remove
the Hazardous Material from the Building and any other affected
area, at Tenant’s sole cost and expense. Such clean up and
removal shall be subject to Landlord’s prior written approval
(except in emergencies), and shall include any and all testing,
investigation, and preparation and the implementation of any
remedial action plan required by any governmental body having
jurisdiction or as reasonably by Landlord. If Tenant shall fail to
comply with the provisions of this Section within five (5) days
after written notice by Landlord, or such shorter time as may be
required by law or in order to minimize any hazard to persons or
property, Landlord may, but shall not be obligated to, arrange for
such compliance directly or as Tenant’s agent through
contractors or other parties selected by Landlord, at
Tenant’s sole cost and expense (without limiting
Landlord’s other remedies under this Lease or applicable
laws.

 

(e) At such times as
Landlord may request in its sole and absolute discretion, Tenant
shall provide Landlord with a written list identifying any
Hazardous Material then used, stored, or maintained upon the
Premises, the use and approximate quantity of each such material, a
copy of any material safety data sheet (“MSDS”) issued
by the manufacturer thereof, written information concerning the
removal, transportation, and disposal of the same, and such other
information as Landlord may require or may be required by law.
Tenant agrees that it shall promptly complete and deliver to
Landlord any disclosure form regarding Hazardous Materials that may
be required by any governmental agency. Tenant shall promptly, upon
demand, reimburse Landlord for any additional insurance premium
charged by reason of Tenant’s failure to comply with the
provisions of this Section 7.6.

 

(f) If any Hazardous
Material is released, discharged, or disposed of on or about the
Building and such release, discharge, or disposal is not caused by
Tenant or other occupants of the Premises, or their employees,
agents or contractors, such release, discharge, or disposal shall
be deemed casualty damage under Article 11 to the extent that the
Premises or the Common Facilities serving the Premises are affected
thereby; in such case, Landlord and Tenant shall have the
obligations and rights respecting such casualty damage provided
under Article 11 of this Lease.

 

(g) Tenant shall not
install any freon-containing systems or equipment including, but
not limited to, refrigerators, freezers, supplemental HVAC systems
or self-contained air conditioners without Landlord’s prior
written approval. If a freon-containing system is so approved by
Landlord, Tenant shall remove said system prior to the Expiration
Date of the Lease, at Tenant’s sole cost and expense. Tenant
shall comply with all legal requirements, industry practices and
rules established by Landlord in performing such removal work, and
Tenant shall restore the Premises to the condition, which existed
immediately prior to the installation of the freon
system.

 

 

14

 

 

ARTICLE VIII

TAXES AND ASSESSMENTS ON TENANT’S PREMISES

 

Tenant
shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal
property of Tenant located in the Premises. When possible, Tenant
shall cause its personal property to be assessed and billed
separately from the real property of which the Premises form a
part. If any taxes on Tenant’s personal property are levied
against Landlord or Landlord’s property, and if Landlord pays
the same or if the assessed value of Landlord’s property is
increased by the inclusion of a value placed upon the personal
property of Tenant, and if Landlord pays the taxes based upon the
increased assessment, Tenant shall pay to Landlord the taxes so
levied against Landlord or the proportion of the taxes resulting
from the increase in the assessment. In calculating what portion of
any tax bill which is assessed against Landlord separately or
Landlord and Tenant jointly is attributable to Tenant’s
fixtures and personal property, Landlord’s reasonable
determination shall be conclusive.

 

ARTICLE IX

ASSIGNMENT AND SUBLETTING

 

Section 9.1                                            

Rights of Parties

 

(a) Notwithstanding any
provision of this Lease to the contrary, Tenant will neither
voluntarily nor by operation of law assign, sublet, encumber or
otherwise transfer all or any part of Tenant’s interest in
this Lease or permit the Premises to be occupied by anyone other
than Tenant without Landlord’s prior written consent, which
consent shall not unreasonably be withheld in accordance with the
provisions of subparagraph (d) below. Subject to subparagraph (c)
below, no assignment (whether voluntary, involuntary or by
operation of law) and no subletting shall be valid or effective
without Landlord’s prior written consent and at
Landlord’s election shall constitute a material default of
this Lease. Landlord shall not be deemed to have given its consent
to any assignment or subletting by any other course of action,
including its acceptance of any name for listing in the Building
directory. To the extent not prohibited by provisions of the
Bankruptcy Code 11 U.S.C. Section 101 et seq. (the Bankruptcy
Code), including Section 365(f)(1), Tenant, on behalf of itself and
its creditors, administrators and assigns, waives the applicability
of Section 365(e) of the Bankruptcy Code, unless the proposed
assignee of the Trustee for the estate of the bankrupt meets
Landlord’s standard for consent, as set forth in subparagraph
(d) below. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all
monies or other considerations to be delivered in connection with
the assignment, shall be delivered to Landlord, shall be and remain
the exclusive property of Landlord, and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of
the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed to have assumed all of the obligations arising under this
Lease on and after the date of the assignment and shall, upon
demand, execute and deliver to Landlord an instrument confirming
that assumption.

 

(b) If Tenant or
Tenant’s guarantor hereunder, if any, is a corporation or is
an unincorporated association, limited liability company or
partnership, the transfer of any stock or other ownership interest
in the corporation, association, or company or partnership, which
results in a change in the voting control of Tenant or
Tenant’s guarantor, if any, shall be deemed an assignment
within the meaning and provisions of this Article. In addition, any
change in the status of the entity, such as but not limited to the
withdrawal of a general partner, shall be deemed an assignment
within the meaning of this Article.

 

(c) Notwithstanding
anything to the contrary herein, Tenant, without the approval of
Landlord (but with thirty [30] days’ prior written notice
indicating the basis upon which the transaction qualifies as an
Exempt Transfer), and without being subject to any right of
Landlord to recapture the Premises, to receive any portion of the
consideration for the transfer, or to declare a default of this
Lease, may assign the Lease, or sublease the whole of the Premises,
to any of the following (each an “Exempt Transfer”):
(i) any corporation, limited liability company or other entity
which by virtue of its direct or indirect ownership of the stock,
membership interests or other ownership interest, as applicable, of
Tenant, has the power to direct Tenant’s management and
operations (“Tenant’s Parent”); (ii) any
corporation, limited liability company or other entity the
management and operations of which Tenant, by virtue of
Tenant’s direct or indirect ownership of the stock,
membership interests or other applicable ownership interest
therein, has the power to direct; (iii) any corporation, limited
liability company or other entity the management and operations of
which Tenant’s Parent, by virtue of Tenant’s
Parent’s direct or indirect ownership of the stock,
membership interests or other applicable ownership interest
therein, has the power to direct, (iv) any corporation or other
entity in which or with which Tenant, its successors or assigns, is
merged or consolidated, in accordance with applicable statutory
provisions for merger or consolidation, so long as the liabilities
of the entity participating in such merger or consolidation are
assumed by the entity surviving such merger or created by such
consolidation, and written acknowledgment of such assumption is
provided to Landlord promptly upon the consummation of such merger
or consolidation; or (v) any corporation or other entity acquiring
all or substantially all of Tenant’s assets (including by
means of a purchase of all or substantially all of Tenants stock or
other applicable equity interests), so long as the liabilities of
Tenant are assumed by the acquirer of such assets and written
confirmation of such assumption is provided to Landlord
concurrently with Tenant’s notice of such acquisition as
required under this paragraph. Notwithstanding the foregoing, the
original Tenant (to the extent it remains in existence) shall
remain liable on the Lease after any transfer described in the
preceding sentence, and in no event shall any such transfer release
Tenant (or its transferee) from the use and/or any other
requirements and obligations under this Lease. In no event shall
the provisions of this Section apply to, or be used to permit, a
transaction designed primarily to avoid the requirement of
obtaining Landlord’s consent to an assignment or sublease to
a third party (such as, by way of example and not by way of
limitation, assignment of this Lease to a single-asset subsidiary
of Tenant and the subsequent merger or consolidation of such
subsidiary with, or the sale of such subsidiary’s assets to,
an entity not otherwise related to Tenant).

 

 

15

 

 

(d) If Tenant desires
to transfer an interest in this Lease to a corporation or entity
not set forth in subparagraph (c) above, it shall first notify
Landlord of its desire and shall submit in writing to Landlord: (i)
the name and address of the proposed transferee; (ii) the nature of
any proposed subtenant’s or assignee’s business to be
carried on in the Premises; (iii) the terms and provisions of any
proposed sublease or assignment; and (iv) any other information
requested by Landlord and reasonably related to the transfer.
Except as provided in subparagraph (e) below, Landlord shall not
unreasonably withhold its consent provided: (1) the use of the
Premises will be consistent with the provisions of this Lease and
with Landlord’s commitment to other tenants of the Building;
(2) fifty percent (50%) of any profit received by the Tenant from
the assignment or subletting, whether during or after the Lease
Term (after the deduction of Tenant’s reasonable
attorneys’ fees, brokerage fees and improvement allowances or
other out of pocket economic concessions incurred pursuant to such
assignment or sublease), shall be paid to Landlord when received;
(3) at Landlord’s election, insurance requirements shall be
brought into conformity with Landlord’s then current leasing
practice; (4) any proposed subtenant or assignee demonstrates that
it is financially responsible by submission to Landlord of all
reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including but not limited to a
balance sheet of the proposed subtenant or assignee as of a date
within ninety (90) days of the request for Landlord’s consent
and statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the request
for Landlord’s consent; (5) any proposed subtenant or
assignee demonstrates to Landlord’s reasonable satisfaction a
record of successful experience in business; (6) the proposed
assignee or subtenant is not an existing tenant of the Building;
and (7) the proposed transfer will not impose additional burdens or
adverse tax effects on Landlord. If Landlord consents to the
proposed transfer, Tenant may, within ninety (90) days after the
date of the consent, effect the transfer upon the terms described
in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord’s
consent as set forth in this Section. Landlord shall approve or
disapprove any requested transfer within thirty (30) days following
receipt of Tenant’s written request and the information set
forth above.

 

(e) Notwithstanding the
provisions of subparagraphs (a) or (d) above, in lieu of consenting
to a proposed assignment or subletting, Landlord may elect to (i)
sublease the Premises (or the portion proposed to be subleased) or
take an assignment of Tenant’s interest in this Lease upon
the same terms as offered or marketed to the proposed subtenant or
assignee (excluding terms relating to the purchase of personal
property the use of Tenant’s name or the continuation of
Tenant’s business); or (ii) terminate this Lease as to the
portion of the Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this Lease,
effective on the date that the proposed sublease or assignment
would have become effective. Landlord may, thereafter, at its
option, assign or re-let any space so recaptured to any third
party, including without limitation the proposed transferee of
Tenant.

 

(f) If Landlord’s
consent to a transfer is required, Tenant shall pay to Landlord (i)
a transfer analysis fee of One Thousand Dollars ($1,000.00) when
Landlord’s consent to such transfer is requested by Tenant,
and (ii) Landlord’s reasonable attorneys’ fees and
costs incurred in connection with the transfer.

 

(g) Tenant agrees that
it shall not assign, sublease or license, nor advertise as
available for assignment, sublease or license, nor list with any
broker for assignment, sublease or license, all or any portion of
the Premises for a consideration which is less than the fair market
rental value, as determined by Landlord in its reasonable
discretion, for comparable space in the Building for a comparable
term commencing concurrently with the assignment, sublease or
license term, with comparable rent credits and tenant improvement
allowances, if any. Within 10 days after Landlord receives any
written request from Tenant for Landlord’s estimate of the
fair market rental value for specified space, which request shall
identify the space in question, the proposed term and the proposed
rent credits and improvement allowances, Landlord shall notify
Tenant in writing of the fair market rental value for such space
for a comparable term with comparable rent credits and tenant
improvement allowances, if any.

 

Section 9.2                                            

Effect of Transfer

 

No
subletting or assignment, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay Base Rent and Additional
Rent and to perform all its other obligations under this Lease.
Moreover, Tenant shall indemnify, defend, protect and hold Landlord
harmless, as provided in Section 10.3, for any act or omission by
an assignee or subtenant. Each assignee, other than Landlord, shall
be deemed to assume all obligations of Tenant under this Lease and
shall be liable, jointly and severally, with Tenant for the payment
of all Base Rent and Additional Rent and for the due performance of
all of Tenant’s obligations under this Lease. No transfer
shall be binding on Landlord unless any document memorializing the
transfer is delivered to Landlord and both the assignee/subtenant
and Tenant deliver to Landlord an executed consent to transfer
instrument prepared by Landlord and consistent with the
requirements of this Article. The acceptance by Landlord of any
payment due under this Lease from any other person shall not be
deemed to be a waiver by Landlord of any provision of this Lease or
to be a consent to any transfer. Consent by Landlord to one or more
transfers shall not operate as a waiver or estoppel to the future
enforcement by Landlord of its rights under this
Lease.

 

 

16

 

 

Section 9.3                                            

Sublease Requirements

 

The
following terms and conditions shall apply to any subletting by
Tenant of all or any part of the Premises and shall be included in
each sublease:

 

(a) Tenant hereby
irrevocably assigns to Landlord all of Tenant’s interest in
all rentals and income arising from any sublease of the Premises
and Landlord may collect such rent and income and apply same toward
Tenant’s obligations under this Lease; provided, however,
that until a default occurs in the performance of Tenant’s
obligations under this Lease, Tenant shall have the right to
receive and collect the sublease rentals. Landlord shall not, by
reason of this assignment or the collection of sublease rentals, be
deemed liable to the subtenant for the performance of any of
Tenant’s obligations under the sublease. Tenant hereby
irrevocably authorizes and directs any subtenant, upon receipt of a
written notice from Landlord stating that an uncured default exists
in the performance of Tenant’s obligations under this Lease,
to pay to Landlord all sums then and thereafter due under the
sublease. Tenant agrees that the subtenant may rely on that notice
without any duty of further inquiry and notwithstanding any notice
or claim by Tenant to the contrary. Tenant shall have no right or
claim against the subtenant or Landlord for any rentals so paid to
Landlord.

 

(b) In the event of the
termination of this Lease, Landlord may, at its sole option, take
over Tenant’s entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord. In no
event, however, shall Landlord be liable for any previous act or
omission by Tenant under the sublease or for the return of any
advance rental payments or deposits under the sublease that have
not been actually delivered to Landlord, nor shall Landlord be
bound by any sublease modification executed without
Landlord’s consent or for any advance rental payment by the
subtenant in excess of one month’s sublease rental. The
general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the termination
of this Lease.

 

(c) Tenant agrees that
Landlord may, at its sole option, authorize a subtenant of the
Premises to cure a default by Tenant under this Lease. Should
Landlord accept such cure, the subtenant shall have a right of
reimbursement and offset from and against Tenant under the
applicable sublease.

 

ARTICLE X

INSURANCE AND INDEMNITY

 

SEE
EXHIBIT
D.

 

ARTICLE XI

DAMAGE OR DESTRUCTION

 

Section 11.1                                            

Restoration

 

(a) If the Building of
which the Premises are a part is damaged, Landlord shall repair
that damage as soon as reasonably possible at its expense unless:
(i) the damage is not covered by Landlord’s fire and extended
coverage insurance (or by a normal extended coverage policy, should
Landlord fail to carry that insurance); or (ii) Landlord reasonably
determines that the cost of repair would exceed twenty-five percent
(25%) of the full replacement cost of the Building (Replacement
Cost); or (iii) Landlord reasonably determines that the cost of
repair would exceed ten percent (10%) of the Replacement Cost and
the damage occurs during the final twelve (12) months of the Lease
Term. Should Landlord elect not to repair the damage for one of the
preceding reasons, Landlord shall so notify Tenant in writing
within sixty- (60) days after the damage occurs, and this Lease
shall be deemed terminated as of: (a) if Tenant has continued its
use and occupancy, and is using and occupying the Premises as of
the date of such notice from Landlord, the thirtieth (30th) day
following such notice, or (b) if Tenant continued to use and occupy
the Premises after the casualty but ceased such use and occupancy
prior to the date of such notice by Landlord, the date on which
Tenant ceased its use and occupancy of the Premises, or (c) if
Tenant ceased its occupancy and use of the Premises on or before
the date of the casualty, the date of the casualty.

 

 

17

 

 

(b) Unless Landlord
elects to terminate this Lease in accordance with subsection (a)
above, this Lease shall continue in effect for the remainder of the
Lease Term; provided that if the damage is so extensive as to
reasonably prevent Tenant’s substantial use and enjoyment of
the Premises for more than nine (9) months, then Tenant may elect
to terminate this Lease by written notice to Landlord within the
sixty- (60)-day period stated in subsection (a).

 

(c) Commencing on the
date of any damage to the Building and ending on the sooner of the
date the damage is repaired or the date this Lease is terminated,
the Monthly Rental to be paid under this Lease shall be abated in
the same proportion that the floor area of the Premises that is
rendered unusable by the damage from time to time bears to the
total floor area of the Premises.

 

(d) Notwithstanding the
provisions of subsections (a) (b) and (c) of this Section, but
subject to the provisions of subsection (e) below, the cost of any
repairs shall be borne by Tenant and Tenant shall not be entitled
to rental abatement or termination rights if the damage is due to
the fault or neglect of Tenant or its employees, subtenants,
invitees or representatives. In addition, the provisions of this
Section shall not be deemed to require Landlord to repair any
improvements or fixtures that Tenant is obligated to repair or
insure pursuant to any other provision of this Lease.

 

(e) Notwithstanding any
provision herein to the contrary, Landlord and Tenant each hereby
waives any and all rights of recovery, claim, action or cause of
action, against the other, its agents, officers, employees,
partners, servants or shareholders for any insured loss or damage
that may occur to the Leased Premises, or any improvements thereto
or said Building of which the Leased Premises are a part, or any
improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause which
is insured against under the terms of standard commercial casualty
risk property insurance policy maintained by Landlord or Tenant,
REGARDLESS OF CAUSE OR ORIGIN,
INCLUDING NEGLIGENCE OF THE OTHER PARTY HERETO, ITS AGENTS,
OFFICERS, EMPLOYEES, PARTNERS, SERVANTS OR SHAREHOLDERS and
each party shall cause such insurance policies to contain
provisions or endorsements wherein each insurer waives its rights
of recovery against such parties.

 

Section 11.2                                            

Lease Governs

 

Tenant
agrees that the provisions of this Lease, including without
limitation Section 11.1, shall govern any damage or destruction and
shall accordingly supersede any contrary statute or rule of
law.

 

ARTICLE XII

EMINENT DOMAIN

 

Section 12.1                                            

Temporary Taking

 

If all
or a material portion of the Premises is taken by any lawful
authority by exercise of the right of eminent domain or sold to
prevent a taking, either Tenant or Landlord may terminate this
Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of
the Building, other than the Premises, is taken or sold in lieu of
taking, and if Landlord elects to restore the Building in such a
way as to alter the Premises materially, either party may terminate
this Lease by written notice to the other party effective on the
date of vesting of title. In the event neither party has elected to
terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed
to restore the Premises to substantially their condition prior to
the taking and a proportionate allowance shall be made to Tenant
for the Monthly Rental corresponding to the time during which and
to the part of the Premises of which Tenant is deprived on account
of the taking and restoration. In the event of a taking, Landlord
shall be entitled to the entire amount of the condemnation award
without deduction for any estate or interest of Tenant; provided
that nothing in this Section shall be deemed to give Landlord any
interest in or prevent Tenant from seeking any award against the
taking authority for the taking of personal property and fixtures
belonging to Tenant or for relocation or business interruption
expenses recoverable from the taking authority.

 

Section 12.2                                            

Total or Partial Taking

 

No
temporary taking of the Premises shall terminate this Lease or give
Tenant any right to abatement of rent, and any award specifically
attributable to a temporary taking of the Premises shall belong
entirely to Tenant. A temporary taking shall be deemed to be a
taking of the use or occupancy of the Premises for a period not to
exceed ninety (90) days.

 

 

18

 

 

ARTICLE XIII

SUBORDINATION; ESTOPPEL CERTIFICATE

 

Section 13.1                                            

Total Condemnation of Premises

 

(a) At the option of
Landlord this Lease shall be either superior or subordinate to all
ground or underlying leases, mortgages and deeds of trust, if any,
which may hereafter affect the Building, and to all renewals,
modifications, consolidations, replacements and extensions thereof;
provided that so long as Tenant is not in default under this Lease,
this Lease shall not be terminated or Tenant’s quiet
enjoyment of the Premises disturbed in the event of termination of
any such ground or underlying lease or the foreclosure of any such
mortgage or deed of trust to which Tenant has subordinated this
Lease pursuant to this Section. In the event of a termination or
foreclosure, Tenant shall become a tenant of and attorn to the
successor-in-interest to Landlord upon the same terms and
conditions as are contained in this Lease and shall execute any
instrument reasonably required by Landlord’s successor for
that purpose. Tenant shall also, upon written request of Landlord,
execute and deliver all instruments as may be required from time to
time to subordinate the rights of Tenant under this Lease to any
ground or underlying lease or to the lien of any mortgage or deed
of trust or, if requested by Landlord, to subordinate in whole or
in part any ground or underlying lease or the lien of any mortgage
or deed of trust to this Lease.

 

(b) Failure of Tenant
to execute any statements or instruments necessary or desirable to
effectuate the provisions of this Article within ten (10) days
after written request by Landlord, in any form that Landlord may
reasonably require, shall constitute a material default under this
Lease. In that event, Landlord, in addition to any other rights or
remedies it might have, shall have the right by written notice to
Tenant to terminate this Lease as of a date not less than twenty
(20) days after the date of Landlord’s notice.
Landlord’s election to terminate shall not relieve Tenant of
any liability for its default.

 

Section 13.2                                            

Estoppel Certificate

 

(a) Tenant shall, at
any time upon not less than ten (10) days prior written notice from
Landlord, execute, acknowledge and deliver to Landlord, in any form
that Landlord may reasonably require (including one substantially
in the form of Exhibit
G hereto), a statement in writing (i) certifying that this
Lease is unmodified and in full force and effect (or if modified
stating the nature of the modification and certifying that this
Lease as modified is in full force and effect), and the dates to
which the Base Rent and Additional Rent have been paid in advance,
if any; and (ii) acknowledging that to Tenant’s knowledge
there are no uncured defaults on the part of Landlord or specifying
each default, if any, are claimed; and (iii) setting forth all
further information that Landlord may reasonably require.
Tenant’s statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the
Building.

 

(b) Tenant’s
failure to deliver any estoppel statement within the provided time
shall constitute a default under this Lease and shall be conclusive
upon Tenant that (i) this Lease is in full force and effect without
modification, except as may be represented by Landlord; (ii) there
are no uncured defaults in Landlord’s performance; and (iii)
not more than one month’s Monthly Rental has been paid in
advance.

 

 

19

 

 

ARTICLE XIV

DEFAULTS AND REMEDIES

 

Section 14.1                                            

Tenant’s Defaults

 

In
addition to any other event of default set forth in this Lease, the
occurrence of any one or more of the following events shall
constitute a default by Tenant:

 

(a)           The
failure by Tenant to make any payment of Base Rent or Additional
Rent required to be made by Tenant, as and when due, where such
failure continues for more than five (5) days after written notice
from Landlord of the delinquency thereof; provided, however, that
any such notice shall constitute and/or be in lieu of, and shall
not be in addition to, any notice required under applicable
law.

 

(b)           Assignment,
sublease, encumbrance or other transfer of the Lease by Tenant,
either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means without
the prior written consent of Landlord, except as expressly
permitted pursuant to Section 9.1(c) hereof.

 

(c)           The
discovery by Landlord that any financial statement provided by
Tenant or by any affiliate, successor or guarantor of Tenant was
materially false.

 

(d)           The
failure or inability by Tenant to observe or perform any of the
express covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in any other
subsection of this Section, where the failure continues for a
period of fifteen (15) days after written notice from Landlord to
Tenant; provided, however, that any such notice shall constitute
and/or be in lieu of and not in addition to any notice required
under applicable law. However, if the nature of the failure is such
that more than fifteen (15) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant
commences the cure within fifteen (15) days and thereafter
diligently pursues the cure to completion.

 

(e)           (i)
The making by Tenant of any general assignment for the benefit of
creditors; (ii) the filing by or against Tenant of a petition to
have Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code
or to have debts discharged or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the
case of a petition filed against Tenant, the same is dismissed
within sixty [60] days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant’s
assets located at the Premises or of Tenant’s interest in
this Lease, if possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure
of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease where the
seizure is not discharged within thirty (30) days; or (v)
Tenant’s convening of a meeting of its creditors for the
purpose of effecting a moratorium upon or composition of its debts.
Landlord shall not be deemed to have knowledge of any event
described in this subsection unless notification in writing is
received by Landlord, nor shall there be any presumption
attributable to Landlord of Tenant’s insolvency. In the event
that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.

 

(f)           The
Tenant’s failure to take possession of the Premises or to
occupy same within sixty (60) days after the Commencement
Date.

 

Section 14.2                                            

Landlord’s Remedies

 

In the
event of any default by Tenant or in the event of the abandonment
of the Premises by Tenant, then, in addition to any other remedies
available to Landlord, Landlord may exercise the following
remedies:

 

(a) Landlord may
terminate Tenant’s right to possession of the Premises by any
lawful means in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord.
Such termination shall not affect any accrued obligations of Tenant
under this Lease. Upon termination, Landlord shall have the right
to reenter the Premises and remove all persons and property.
Landlord shall also be entitled to recover from
Tenant:

 

(i)           The
worth at the time of award of the unpaid Base Rent and Additional
Rent which had been earned at the time of termination;

 

(ii)           The
worth at the time of award of the amount by which the unpaid Base
Rent and Additional Rent, which would have been earned after
termination until the time of award, exceeds the amount of such
loss that Tenant proves could have been reasonably
avoided;

 

 

20

 

 

(iii)           The
worth at the time of award of the amount by which the unpaid Base
Rent and Additional Rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could
be reasonably avoided;

 

(iv)           Any
other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its
obligations under this Lease or which, in the ordinary course of
things, would be likely to result from Tenant’s default,
including but not limited to the cost of recovering possession of
the Premises, commissions and other expenses of reletting,
including necessary repair, renovation, improvement and alteration
of the Premises for a new tenant, the unamortized portion of any
tenant improvements and brokerage commissions funded by Landlord in
connection with this Lease, reasonable attorneys’ fees and
any other reasonable costs; and

 

(v)           Without
limiting Landlord’s rights under this Lease, in the event of
Tenant’s default, all of Tenant’s merchandise,
furniture, fixtures, equipment and other personal property shall,
at Landlord’s option (i) remain on the Premises and,
continuing during the length of such default, Landlord shall have
the right to take the exclusive possession of same and to use the
same free of rent or charge until all defaults have been cured,
(ii) be removed by Landlord from the Premises and placed in storage
at a public warehouse at the expense and risk of Tenant, or (iii)
be removed by Tenant on demand by Landlord.

 

(b) At Landlord’s
election all other amounts in addition to or in lieu of the
foregoing as may be permitted by law. Any sum other than Base Rent
shall be computed on the basis of the average monthly amount
accruing during the twenty-four (24) month period immediately prior
to default, except that if it becomes necessary to compute such
Additional Rent before the twenty-four (24) month period has
occurred, then the computation shall be on the basis of the average
monthly amount during the shorter period. As used in subparagraphs
(1) and (2) above, the worth at the time of award shall be computed
by allowing interest at the rate of ten percent (10%) per annum. As
used in subparagraph (3) above, the worth at the time of award
shall be computed by discounting the amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus
one percent (1%).

 

 

(c) Landlord may elect
not to terminate Tenant’s right to possession of the Premises
in which event Landlord may continue to enforce all of its rights
and remedies under this Lease, including the right to collect all
Base Rent and Additional Rent as it becomes due. Efforts by the
Landlord to maintain, preserve or relet the Premises, or the
appointment of a receiver to protect the Landlord’s interests
under this Lease, shall not constitute a termination of the
Tenant’s right to possession of the Premises. In the event
that Landlord elects to avail itself of the remedy provided by this
subsection (ii), Landlord shall not unreasonably withhold its
consent to an assignment or subletting of the Premises subject to
the reasonable standards for Landlord’s consent as are
contained in this Lease.

 

 

(d) Landlord shall be
under no obligation to observe or perform any covenant of this
Lease on its part to be observed or performed which accrues after
the date of any default by Tenant unless and until the default is
cured by Tenant. The various rights and remedies reserved to
Landlord in this Lease or otherwise shall be cumulative and, except
as otherwise provided by applicable law, Landlord may pursue any or
all of its rights and remedies at the same time.

 

(e) No delay or
omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any default by
Tenant. The acceptance by Landlord of any Base Rent or Additional
Rent shall not be a (i) waiver of any preceding breach or default
by Tenant of any provision of this Lease, other than the failure of
Tenant to pay the particular Base Rent or Additional Rent accepted
regardless of Landlord’s knowledge of the preceding breach or
default at the time of acceptance of such payment; or (ii) a waiver
of Landlord’s right to exercise any remedy available to
Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor-in-possession, a trustee, a receiver or any
other person acting on behalf of Tenant or Tenant’s estate,
shall not waive or cure a default under Section 14.1. No payment by
Tenant or receipt by Landlord of a lesser amount than the Base Rent
and Additional Rent required by this Lease shall be deemed to be
other than a partial payment on account of the earliest due
stipulated Base Rent or Additional Rent, nor shall any endorsement
or statement on any check or letter be deemed an accord and
satisfaction, and Landlord shall accept the check or payment
without prejudice to Landlord’s right to recover the balance
of the Base Rent or Additional Rent or pursue any other remedy
available to it. No act or thing done by Landlord or
Landlord’s agents during the Lease Term shall be deemed an
acceptance of surrender of the Premises, and no agreement to accept
a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord’s agents
shall have any power to accept the keys to the Premises prior to
the termination of this Lease and the delivery of the keys to any
employee shall not operate as a termination of the Lease or a
surrender of the Premises.

 

Section 14.3                                            

Late Payments

 

(a)           Any
Base Rent or Additional Rent due under this Lease that is not paid
to Landlord within five (5) days of the date when due shall bear
interest at eighteen percent (18%) per annum from the date due
until fully paid. The payment of interest shall not cure any
default by Tenant under this Lease. In addition, Tenant
acknowledges that the late payment by Tenant to Landlord of Base
Rent or Additional Rent will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Those costs may
include, but are not limited to, administrative, processing and
accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease mortgage or trust deed
covering the Premises. Accordingly, if any Base Rent or Additional
Rent due from Tenant shall not be received by Landlord or
Landlord’s designee within five (5) days after the date due,
then Tenant shall pay to Landlord, in addition to the interest
provided above, a late charge in an amount equal to ten percent
(10%) of each delinquent payment. Acceptance of a late charge by
Landlord shall not constitute a waiver of Tenant’s default
with respect to the overdue amount nor shall it prevent Landlord
from exercising any of its other rights and remedies.

 

 

21

 

 

(b)           Following
each second consecutive installment of Monthly Rental that is not
paid within five (5) days of the date when due, Landlord shall have
the option (i) to require that beginning with the first payment of
Monthly Rental next due, Monthly Rental shall no longer be paid in
monthly installments but shall be payable quarterly three (3)
months in advance; and/or (ii) to require that Tenant increase the
amount, if any, of the Security Deposit by one hundred percent
(100%). Should Tenant deliver to Landlord, at any time during the
Lease Term, two (2) or more insufficient checks, the Landlord may
require that all monies then and thereafter due from Tenant be paid
to Landlord by cashier’s check.

 

Section 14.4                                            

Right of Landlord to Perform

 

All
covenants and agreements to be performed by Tenant under this Lease
shall be performed at Tenant’s sole cost and expense and
without any abatement of Base Rent or Additional Rent or right of
set-off. If Tenant fails to pay any sum of money other than Monthly
Rental or fails to perform any other act on its part to be
performed under this Lease, and the failure continues beyond any
applicable grace period set forth in Section 14.1, then, in
addition to any other available remedies, Landlord may, at its
election, make the payment or perform the other act on
Tenant’s part. Landlord’s election to make the payment
or perform the act on Tenant’s part shall not give rise to
any responsibility of Landlord to continue making the same or
similar payments or performing the same or similar acts. Tenant
shall promptly, upon demand by Landlord, reimburse Landlord for all
sums paid by Landlord and all necessary incidental costs together
with interest at the maximum rate permitted by law from the date of
the payment by Landlord. Landlord shall have the same rights and
remedies if Tenant fails to pay those amounts as Landlord would
have in the event of a default by Tenant in the payment of Base
Rent or Additional Rent.

 

Section 14.5                                            

Default by Landlord

 

Landlord shall not
be deemed to be in default in the performance of any obligation
under this Lease unless and until it has failed to perform the
obligation within thirty (30) days after written notice by Tenant
to Landlord specifying in reasonable detail the nature and extent
of the failure; provided, however, that if the nature of
Landlord’s obligation is such that more than thirty (30) days
are required for its performance, then Landlord shall not be deemed
to be in default if it commences performance within the
thirty-(30)-day period and thereafter diligently pursues the cure
to completion. The directors, officers, shareholders and employees
of Landlord shall not be personally liable for any claim or
judgment against Landlord under any circumstances. If Landlord is
in default under this Lease, then Tenant's remedies shall be only
to seek a money judgment against Landlord, or an action for
specific performance and/or declaratory relief against Landlord,
but in no event shall Tenant have the remedy of a termination of
this Lease. In the event Tenant seeks a money judgment against
Landlord, Tenant shall not attempt to seize or attach any asset of
Landlord except as otherwise provided herein. If Tenant recovers a
money judgment against Landlord, then such judgment shall be
satisfied only out of the proceeds of the sale received on
execution of the judgment levied against the right, title and
interest of the Landlord in the Building or out of rent or other
income from the Building received or to be received by the
Landlord. Tenant shall not attempt to satisfy any such judgment
from any other asset of Landlord under any circumstances. Tenant
acknowledges that this limitation on Landlord's liability has been
separately bargained for and that Landlord would not enter into
this Lease in the absence of this provision.

 

Section 14.6                                            

EXPENSES AND LEGAL FEES

 

Should
either Landlord or Tenant bring any action in connection with this
Lease, the prevailing party shall be entitled to recover, as part
of the action, its reasonable attorneys’ fees and all other
costs. The prevailing party, for the purpose of this paragraph,
shall be determined by the trier of the facts.

 

Section 14.7                                            

WAIVER OF JURY TRIAL

 

LANDLORD AND TENANT
EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF
COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY
AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND
RELEASE, TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY
APPLICABLE LAW, ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE
PREMISES AND/OR ANY CLAIM OF INJURY OR DAMAGE.

 

LANDLORD                                                                

TENANT

__________                                                                

_________

 

 

22

 

 

ARTICLE XV

END OF TERM

 

Section 15.1                                            

Holding Over

 

This
Lease shall terminate without further notice upon the expiration of
the Lease Term, and any holding over by Tenant after the expiration
shall not constitute a renewal or extension of this Lease or give
Tenant any rights under this Lease, except when in writing signed
by both parties. If Tenant holds over for any period after the
expiration (or earlier termination) of the Lease Term, Landlord
may, at its option, treat Tenant as a tenant at sufferance only
commencing on the first (1st) day following the termination of this
Lease and subject to all of the terms of this Lease, except that
the Monthly Rental shall be one hundred and fifty percent (150%) of
the total Monthly Rental for the month immediately preceding the
date of termination. If Tenant fails to surrender the Premises upon
the expiration of this Lease, despite demand to do so by Landlord,
Tenant shall indemnify and hold Landlord harmless from all loss or
liability, including without limitation any claims made by any
succeeding tenant relating to such failure to surrender. Acceptance
by Landlord of Base Rent or Additional Rent after the termination
shall not constitute a consent to a holdover or result in a renewal
of this Lease. The foregoing provisions of this Section are in
addition to and do not affect Landlord's right of re-entry or any
other rights of Landlord under this Lease or at law.

 

Section 15.2                                            

Merger on Termination

 

The
voluntary or other surrender of this Lease by Tenant or a mutual
termination of this Lease shall terminate any or all existing
subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or
all subleases affecting the Premises.

 

Section 15.3                                            

Surrender of Premises; Removal of Property

 

Upon
the Expiration Date or upon any earlier termination of this Lease,
Tenant shall quit and surrender possession of the Premises to
Landlord in as good order, condition and repair as when received or
as hereafter may be improved by Landlord or Tenant, reasonable wear
and tear and repairs which are Landlord’s obligation
excepted, and shall, without expense to Landlord, remove or cause
to be removed from the Premises all personal property and debris,
except for any items that Landlord may by written authorization
allow to remain. Tenant shall repair all damage to the Premises
resulting from the removal, which repair shall include the patching
and filling of holes and repair of structural damage, provided that
Landlord may instead elect to repair any structural damage at
Tenant’s expense. If Tenant shall fail to comply with the
provisions of this Section, Landlord may affect the removal and/or
make any repairs, and the cost to Landlord shall be Additional Rent
payable by Tenant upon demand. If requested by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an instrument in
writing releasing and quitclaiming to Landlord all right, title and
interest of Tenant in the Premises.

 

 

23

 

 

ARTICLE XVI

PAYMENTS AND NOTICES

 

All
sums payable by Tenant to Landlord shall be paid without deduction
or offset in lawful money of the United States to Landlord at its
address set forth in Item 12 of the Basic Lease Provisions or at
any other place as Landlord may designate in writing. Unless this
Lease expressly provides otherwise, as for example in the payment
of Base Rent pursuant to Section 4.1, all payments shall be due and
payable within thirty (30) days after demand. All payments
requiring proration shall be prorated on the basis of a thirty-
(30)-day month and a three hundred sixty- (360)-day year. Any
notice, election, demand, consent, approval, or other communication
to be given or other document to be delivered by either party to
the other may be delivered in person or by courier or overnight
delivery to the other party or may be deposited in the United
States mail, duly registered or certified postage prepaid return
receipt requested, and addressed to the other party at the address
set forth in Item 12 of the Basic Lease Provisions, or if to Tenant
at that address or from and after the Commencement Date at the
Premises (whether or not Tenant has departed from abandoned or
vacated the Premises). Either party may, by written notice to the
other served in the manner provided in this Article, designate a
different address. Any notice or other document shall be deemed
served when actually delivered to the applicable address (or when
such delivery is refused) using any of the above- enumerated
delivery methods. If more than one person or entity is named as
Tenant under this Lease service of any notice upon any one of them
shall be deemed as service upon all of them.

ARTICLE XVII

RULES AND REGULATIONS

 

Tenant
agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as Exhibit E, and any reasonable
and nondiscriminatory amendments, modifications and/or additions as
may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order or cleanliness
of the Premises, Building, and Common Facilities. Landlord shall
not be liable to Tenant for any violation of the Rules and
Regulations or the breach of any covenant or condition in any lease
by any other tenant. One or more waivers by Landlord of any breach
of the Rules and Regulations by Tenant or by any other tenant(s)
shall not be a waiver of any subsequent breach of that rule or any
other. Tenant’s failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the
case of any conflict between the Rules and Regulations and this
Lease, this Lease shall be controlling.

 

ARTICLE XVIII

BROKER’S COMMISSION

 

The
parties recognize as the broker(s) who negotiated this Lease the
firms, if any, whose names are stated in Item 10 of the Basic Lease
Provisions and agree that Landlord shall be responsible for the
payment of brokerage commissions to those brokers unless otherwise
provided in this Lease. Tenant warrants that it has had no dealings
with any other real estate broker or agent in connection with the
negotiation of this Lease and Tenant agrees to indemnify and hold
Landlord harmless from any cost expense or liability (including
reasonable attorneys’ fees) for any compensation, commissions
or charges claimed by any other real estate broker or agent
employed or claiming to represent or to have been employed by
Tenant in connection with the negotiation of this Lease. The
foregoing agreement shall survive the termination of this Lease. If
Tenant fails to take possession of the Premises or if this Lease
otherwise terminates prior to the Expiration Date as the result of
failure of performance by Tenant, Landlord shall be entitled to
recover from Tenant the unamortized portion of any brokerage
commission funded by Landlord in addition to any other damages to
which Landlord may be entitled.

 

ARTICLE XIX

TRANSFER OF LANDLORD’S INTEREST

 

In the
event of any transfer of Landlord’s Interest in the Premises,
the transferor shall be automatically relieved of all obligations
on the part of Landlord accruing under this Lease from and after
the date of the transfer, provided that any funds held by the
transferor, in which Tenant has an interest, shall be turned over,
subject to that interest to the transferee, and Tenant is notified
of the transfer as required by law. No holder of a mortgage and/or
deed of trust to which this Lease is or may be subordinate, and no
landlord under a so-called sale-leaseback, shall be responsible in
connection with the Security Deposit unless the mortgagee or holder
of the deed of trust or the landlord actually receives the Security
Deposit. It is intended that the covenants and obligations
contained in this Lease on the part of Landlord shall subject to
the foregoing, be binding on Landlord, its successors and assigns
only during and in respect to their respective successive periods
of ownership.

 

 

24

 

 

ARTICLE XX

INTERPRETATION

 

Section 20.1                                            

Gender and Number

 

Whenever the
context of this Lease requires, the words “Landlord”
and “Tenant” shall include the plural as well as the
singular, and words used in neuter, masculine or feminine genders
shall include the others.

 

Section 20.2                                            

Headings

 

The
captions and headings of the articles and sections of this Lease
are for convenience only, are not a part of this Lease and shall
have no effect upon its construction or
interpretation.

 

Section 20.3                                            

Joint and Several Liability

 

If more
than one person or entity is named as Tenant, the obligations
imposed upon each shall be joint and several, and the act of or
notice from or notice or refund to or the signature of any one or
more of them shall be shall be binding on all of them with respect
to the tenancy of this Lease, including but not limited to any
renewal extension, termination or modification of this
Lease.

 

Section 20.4                                            

Successors

 

Subject
to Articles IX and XIX, all rights and liabilities given to or
imposed upon Landlord and Tenant shall extend to and bind their
respective heirs, executors, administrators, successors and
assigns. Nothing contained in this Section is intended or shall be
construed to grant to any person other than Landlord and Tenant and
their successors and assigns any rights or remedies under this
Lease.

 

Section 20.5                                            

Time of Essence

 

Time is
of the essence with respect to the performance of every provision
of this Lease in which the laws of the State of
Colorado.

 

Section 20.6                                            

Controlling Law

 

This
Lease shall be governed by and interpreted in accordance with the
laws of the State of Colorado.

Section 20.7                                            

Severability

 

If any
term or provision of this Lease, the deletion of which would not
adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party
adversely affected, shall be held invalid or unenforceable to any
extent, the remainder of this Lease shall not be affected and each
term and provision of this Lease shall be valid and enforceable to
the fullest extent permitted by law.

 

Section 20.8                                            

Waiver and Cumulative Remedies

 

One or
more waivers by Landlord or Tenant of any breach of any term,
covenant or condition contained in this Lease shall not be a waiver
of any subsequent breach of the same or any other term, covenant or
condition. Consent to any act by one of the parties shall not be
deemed to render unnecessary the obtaining of that party’s
consent to any subsequent act. No breach by Tenant of this Lease
shall be deemed to have been waived by Landlord unless the waiver
is in a writing signed by Landlord. The rights and remedies of
Landlord under this Lease shall be cumulative and in addition to
any and all other rights and remedies which Landlord may
have.

 

 

25

 

 

Section 20.9                                            

Inability to Perform

 

In the
event that either party shall be delayed or hindered in or
prevented from the performance of any work or in performing any act
required under Lease by reason of any cause beyond the reasonable
control of that party, then the performance of the work or the
doing of the act shall be excused for a period of the delay and the
time for performance shall be extended for a period equivalent to
the period of the delay. The provisions of the Section shall not
operate to excuse Tenant form the prompt payment of Base Rent or
Additional Rent or from the timely performance of any other
obligation under this Lease within Tenant’s reasonable
control.

 

Section 20.10                                            

Entire Agreement

 

This
Lease, and its exhibits and other attachments, cover in full each
and every agreement of every kind between the parties concerning
the Premises, the Building, and all preliminary negotiations, oral
agreements, understandings and/or practices, except those contained
in this Lease, are superseded and of no further effect. Tenant
waives its rights to rely on any representations or promises made
by Landlord or others which are not contained in this Lease. No
verbal agreement or implied covenant shall be held to modify the
provisions of this Lease, any statute, law or custom to the
contrary notwithstanding.

 

Section 20.11                                            

Quiet Enjoyment

 

Upon
the observance and performance of all the covenants, terms and
conditions on Tenant’s part to be observed and performed and
subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Lease
Term without hindrance or interruption by Landlord or any other
person claiming by or through Landlord.

 

Section 20.12                                            

Survival

 

All
covenants of Landlord or Tenant which reasonably would be intended
to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the
benefit of the respective parties and their successors and
assigns.

 

 

26

 

 

ARTICLE XXI

EXECUTION AND RECORDING

 

Section 21.1                                            

Counterparts

 

This
Lease may be executed in one or more counterparts, each of which
shall constitute an original and all of which shall be one and the
same agreement.

 

Section 21.2                                            

Corporate and Partnership Authority

 

If
Tenant is a corporation or partnership, each individual executing
this Lease on behalf of the corporation or partnership represents
and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of the corporation or partnership and
that this Lease is binding upon the corporation or partnership in
accordance with its terms. Tenant, shall at Landlord’s
request, deliver a certified copy of its board of directors’
resolution or partnership agreement or certificate authorizing or
evidencing the execution of this Lease.

 

Section 21.3                                            

Execution of Lease; No Option or Offer

 

The
submission of this Lease to Tenant shall be for examination
purposes only and shall not constitute an offer or option for
Tenant to lease the Premises. Execution of this Lease by Tenant and
its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has, in fact,
executed and delivered this Lease to Tenant, it being intended that
this Lease shall only become effective upon execution by Landlord
and delivery of a fully executed counterpart to
Tenant.

 

Section 21.4                                            

Recording

 

Tenant
shall not cause the recordation of this Lease, a short form
memorandum of this Lease or any reference to this
Lease.

 

Section 21.5                                            

Amendments

 

No
amendment or termination of this Lease shall be effective unless in
writing signed by authorized signatories of Tenant and Landlord, or
by their respective successors-in-interest. No actions, policies,
oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this
Lease in any respect.

 

 

27

 

 

ARTICLE XXII

MISCELLANEOUS

 

Section 22.1                                            

Nondisclosure of Lease Terms

 

Tenant
acknowledges and agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord.
Disclosure of the terms could adversely affect the ability of
Landlord to negotiate other leases and impair Landlord’s
relationship with other tenants. Accordingly, Tenant agrees that it
and its partners, officers, directors, employees and attorneys
shall not intentionally and voluntarily disclose the terms and
conditions of this Lease to any other tenant or apparent
prospective tenant of the Building, either directly or indirectly,
without the prior written consent of Landlord; provided, however,
that Tenant may disclose the terms to prospective subtenants or
assignees under this Lease.

 

Section 22.2                                            

Representations by Tenant

 

The
application, financial statements, and tax returns, if any
submitted and certified to by Tenant as an accurate representation
of its financial condition have been prepared, certified and
submitted to Landlord as an inducement and consideration to
Landlord to enter this Lease. The application and statement are
represented and warranted by Tenant to be correct and to accurately
and fully reflect Tenant’s true financial condition as of the
date of execution of this Lease by Tenant. Tenant shall, during the
Lease Term, promptly furnish Landlord with annual financial
statements reflecting Tenant’s financial condition upon
written request from Landlord.

 

Section 22.3                                            

Changes Requested by Lender

 

If, in
connection with obtaining financing for the Building, the lender
shall request reasonable modifications in this Lease as a condition
to the financing, Tenant will not unreasonable withhold or delay
its consent, provided that the modifications do not materially
increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.

 

Section 22.4                                            

Mortgagee Protection

 

No act
or failure to act on the part of Landlord, which would otherwise
entitle Tenant to be relieved of its obligations hereunder or to
terminate this Lease, shall result in such a release or termination
unless (a) Tenant has given notice by registered or certified mail
to any beneficiary of a deed of trust or mortgage covering the
Building whose address has been furnished to Tenant, and (b) such
beneficiary is afforded a reasonable opportunity to cure the
default by Landlord, including, if necessary, to effect the cure
time to obtain possession of the Building by power of sale or
judicial foreclosure, provided that such foreclosure remedy is
diligently pursued.

 

Section 22.5                                            

Covenants and Conditions

 

All of
the provisions of this Lease shall be construed to be conditions as
well as covenants as though the words specifically expressing or
imparting covenants and conditions were used in each separate
provision.

 

Section 22.6                                            

Commercial Photography and Filming

 

Tenant
agrees that Landlord may authorize the use of the Building, and
Common Facilities, or any part or parts thereof (exclusive of the
Premises interior), for filming of motion pictures, television
tapes or films, commercials, videos, documentaries, commentaries,
and any and all other still, electronic, and other image capture
purposes (“Filming”). Tenant agrees that any such
Filming may be performed during, before, or after the
Building’s Operating Hours and on days the Building is not
open to the public for business, as Landlord may determine provided
that Landlord shall use diligent efforts to minimize negative
impacts of such Filming activities on Tenant’s business.
Tenant acknowledges that certain inconveniences may result from
such Filming (by way of example only: noises, lights, heat,
temporary blockage, closure, or re-routing of aisles, corridors, or
doors, and temporary re- routing of pedestrian traffic), and Tenant
agrees that Landlord shall not be liable for any losses or damages
and that there shall be no reduction or abatement in any Base Rent
or other charges payable hereunder as a result thereof. Landlord,
in its sole discretion, may elect to permit such Filming without
any fee or other form of compensation or benefits or may elect to
charge a fee or other form of compensation or benefits for such
Filming; any such fee, compensation, or benefits may, in
Landlord’s sole discretion, be retained by Landlord for its
sole use, be disbursed to one or more tenants of the Building, or
be applied to certain operating or promotional expenses of the
Building. Rental of the Premises for Filming shall be permitted
only with Landlord’s and Tenant’s mutual agreement and
consent, and shall be treated as a sublease and be subject to the
terms and provisions hereof respecting subleasing of the Premises.
Tenant acknowledges that the Building and adjacent properties are
heavily used for Filming including exterior façade and access
points, which may restrict vision and sightline of the Building
and/or the Premises. Tenant acknowledges that Landlord has no
ability to control Filming and/or its impact on the Premises by
such usage outside the Building.

 

 

28

 

 

Section 22.7                                 

“As Is” Condition

 

Tenant
acknowledges that it is taking the Premises in its “as
is” condition existing as of the execution of this Lease,
except as otherwise expressly provided herein. Landlord agrees to
cause the Premises to be thoroughly cleaned at Landlord’s
sole cost and expense prior to and following Tenant’s
move-in.

 

Section 22.8                                 

Non-Discrimination

 

Tenant
covenants by and for itself, its successors, heirs, executors,
administrators and assigns, and all persons claiming under or
through Tenant, and this Lease is made and accepted upon and
subject to the following conditions: that there shall be no
discrimination against or segregation of any person or group of
persons, on account of race, color, creed, sex, sexual preference,
age, religion, marital status, ancestry or national origin in the
leasing, subleasing, transferring, use, or enjoyment of the
Premises nor shall Tenant itself, or any person claiming under or
through Tenant, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection,
location, number, use or occupancy, of tenants, lessees,
sublessees, subtenants or vendees in the Premises. Without limiting
the generality of the foregoing, Tenant shall comply with all
requirements of applicable laws, ordinances, regulations of any
governmental authority, including any requirements or restrictions
in any document recorded against the Building prior to the date
hereof, pertaining to non-discriminatory practices at the Premises
and the Building.

 

Section 22.9                                 

Non-Affiliation Representation

 

Tenant
represents and warrants that Tenant is not a PNC Entity, or a
BlackRock Entity (each as hereinafter defined), nor an Affiliate
(as hereinafter defined) of a PNC Entity, or a BlackRock Entity.
Tenant covenants that Tenant will not become a PNC Entity, or a
BlackRock Entity or an Affiliate of a PNC Entity, or a BlackRock
Entity. Tenant further agrees that Tenant will not assign this
Lease or sublease all or any portion of the Premises to a PNC
Entity, or a BlackRock Entity or an Affiliate of a PNC Entity, or a
BlackRock Entity without Landlord’s prior written consent,
which consent may be withheld in its sole and absolute discretion.
As used herein, (a) “BlackRock Entity” means BlackRock,
Inc. and any entity controlling, controlled by or under common
control with BlackRock, Inc. (and the parties agree that this
definition shall include any institutional fund managed by a
BlackRock Entity), (b) “PNC” means The PNC Financial
Services Group, Inc., a Pennsylvania corporation, and
(c) “PNC
Entity” means PNC and any entity controlling,
controlled by or under common control with PNC (and the parties
agree this definition shall include any institutional fund managed
by a PNC Entity). Additionally, as used in this Section the
term “Affiliate”
shall mean any Person who directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common
control with such Person and the term “Person” shall mean any individual,
general partnership, limited partnership, corporation, limited
liability company, limited liability partnership, joint venture,
trust, business trust, cooperative or association or other
comparable business entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of
any of the foregoing where the context so permits.

 

[Signature
page follows.]

 

                                                      

29

EXECUTION COPY

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

 

	

LANDLORD:

	

TENANT:

	
 

	
 

	

2420
17TH
STREET LLC,

a
Delaware limited liability company

 

By:
BlackRock Property Fund Operating Partnership, L.P.,

a
Delaware limited partnership

 its Sole
Member 

 

By:
BlackRock US Core Property Fund, LLC,

a
Delaware limited liability company

its
General Partner 

 

By
BlackRock US Core Property Fund, Inc.,

a
Maryland corporation,

its
Sole Member

 

By:
BlackRock Realty Advisors, Inc. 

a
Delaware corporation,

its
investment manager

 

By: /s/
Angela Kralovec

Name:
Angela Kralovec

Its:
Director

 

	

NEW AGE
BEVERAGES CORPORATION,

a
Washington corporation

 

By: /s/
Gregory A. Gold

Its:
CFO

 

	
 

	
 

  30CNL Strategic Capital, LLC - 8-K

 

Exhibit 4.3

 

SHARE REPURCHASE PROGRAM

CNL STRATEGIC CAPITAL,
LLC, a Delaware limited liability company (the “Company”), has adopted a Share Repurchase Program (the “Share
Repurchase Program”) by which Class A, Class FA, Class T, Class D and Class I shares of the Company’s limited
liability company interests (the “Shares”) may be repurchased by the Company from shareholders subject to the
terms and conditions set forth herein. The Share Repurchase Program shall become effective on March 29, 2019.

1.                  
Repurchase Price. The Share Repurchase Program is designed to provide eligible shareholders with limited, interim
liquidity by enabling them to sell Shares back to the Company prior to (a) the listing of the Shares on a national securities exchange,
(b) the inclusion for quotation in a national securities market, or (c) in the sole determination of the Company’s board
of directors, a secondary trading market for the Shares otherwise develops. Subject to certain restrictions described below, the
Company may repurchase Shares, including fractional Shares, computed to three decimal places, from time to time.

The price for repurchase
of Shares shall be equal to the net asset value per Share as of the last date of the month immediately prior to the Repurchase
Date (as defined below). The Repurchase Date generally will be the last business day of the month of a calendar quarter end (the
“Repurchase Date”).

2.                  
Repurchase of Shares. Any shareholder may present for the Company’s consideration all or any portion of his
or her Shares for repurchase at any time, in accordance with the procedures outlined herein. A shareholder may present fewer than
all of his or her Shares to the Company for repurchase, provided that the minimum number of Shares presented for repurchase shall
be at least 5% of his or her Shares.

The Company may,
at the Company’s sole option, choose to repurchase the Shares presented for repurchase for cash to the extent it has sufficient
funds available. There is no assurance that there will be sufficient funds available for repurchase or that the Company will exercise
its discretion to repurchase such Shares and, accordingly, a shareholder’s Shares may not be repurchased. Factors that the
Company will consider in making its determination to repurchase Shares include:

(i)                
whether such repurchase impairs the Company’s capital or operations;

(ii)              
whether such repurchase is not reasonably practical due to an emergency;

(iii)            
whether such repurchase is demanded by any governmental or regulatory agency with jurisdiction over the Company for the
protection of the Company’s shareholders; and

(iv)             
whether such repurchase would be unlawful.

The Company is not
obligated to repurchase Shares under the Share Repurchase Program. If the Company determines to repurchase Shares, the total amount
of aggregate repurchases of Class A, Class FA, Class T, Class D and Class I shares will be limited to up to 2.5% of the Company’s
aggregate net asset value per calendar quarter based on the aggregate net asset value as of the last date of the month immediately
prior to the Repurchase Date and up to 10% of the Company’s aggregate net asset value per year based on the average aggregate
net asset value as of the end of each of the Company’s trailing four quarters. The aggregate amount of funds under the Share
Repurchase Program will be determined on a quarterly basis in the sole discretion of the board of directors of the Company. During
any calendar quarter, the total amount of aggregate repurchases will be limited to the aggregate proceeds from the Company’s
Distribution Reinvestment Plan (the “Reinvestment Plan”) during the previous quarter unless the Company’s
board of directors determines otherwise. Notwithstanding the foregoing, at the sole discretion of the Company’s board of
directors, the Company may also use cash on hand, cash available from borrowings and cash from the sale of assets as of the end
of the applicable period to repurchase Shares. There is no guarantee that any funds will be set aside under the Reinvestment Plan
or otherwise made available for the Share Repurchase Program during any period during which repurchases may be requested. Further,
no Shares will be repurchased under the Share Repurchase Plan on any date upon which the Company pays any distribution with respect
to the Shares.

    	 		 

    	 

    

The Company will
not repurchase Shares that are subject to liens or other encumbrances until the lienholder or shareholder presents evidence that
the liens or encumbrances have been removed. If any Shares subject to a lien are inadvertently repurchased or the Company is otherwise
required to pay to any other party all or any amount in respect of the value of repurchased Shares, then the recipient of amounts
in respect of repurchase shall repay the Company the amount paid for such repurchase up to the amount it is required to pay to
such other party.

3.                  
Insufficient Funds. In the event there are insufficient funds to repurchase all of the Shares for which repurchase
requests have been submitted, and the Company determines to repurchase Shares, the Company will repurchase pending requests, computed
to three decimal places, at the end of each quarter, on a pro rata basis, from among the requests for repurchases received
by the Company based upon the total number of Shares for which repurchase is requested in the following order of priority:

(i)                
first, pro rata as to all repurchases sought upon a shareholder’s death;

(ii)              
second, pro rata as to all repurchases sought by shareholders with a Qualifying Disability or by shareholders who
have been confined to a long-term care facility;

(iii)            
third, pro rata as to all repurchases sought by shareholders subject to Bankruptcy;

(iv)             
fourth, pro rata as to all repurchases that would result in a shareholder owning less than 100 Shares; or

(v)               
finally, pro rata as to all other repurchase requests.

For a disability
to be considered a “Qualifying Disability” for the purposes of this Share Repurchase Program: (a) the shareholder must
receive a determination of disability based upon a physical or mental impairment arising after the date the shareholder acquired
the Shares to be repurchased that can be expected to result in death or to last for a continuous period of not less than twelve
months; and (b) the determination of disability must have been made by the governmental agency, if any, responsible for reviewing
the disability retirement benefits that the shareholder could be eligible to receive. Such governmental agencies are limited to
the following: (1) if the shareholder is eligible to receive Social Security disability benefits, the Social Security Administration;
(2) if the shareholder is not eligible for Social Security disability benefits but could be eligible to receive disability
benefits under the Civil Service Retirement System (the “CSRS”), the U.S. Office of Personnel Management or
the agency charged with responsibility for administering the CSRS benefits at that time; or (3) if the shareholder is not
eligible for Social Security disability benefits but could be eligible to receive military disability benefits, the Veteran’s
Administration or the agency charged with the responsibility for administering military disability benefits at that time. Repurchase
requests following an award by the applicable government agency of disability death benefits must be accompanied by the shareholder’s
application for disability benefits and a Social Security Administration Notice of Award, a U.S. Office of Personnel Management
determination of disability under the CSRS, a Veteran’s Administration record of disability-related discharge or such other
documentation issued by the applicable governmental agency that the Company deems acceptable and which demonstrates an award of
disability benefits.

With respect to
repurchases sought upon a shareholder’s confinement to a long-term care facility, “long-term care facility” shall
mean an institution that is an approved Medicare provider of skilled nursing care or a skilled nursing home licensed by the state
or territory where it is located and that meets all of the following requirements: (a) its main function is to provide skilled,
immediate or custodial nursing care; (b) it provides continuous room and board to three or more persons; (c) it is supervised
by a registered nurse or licensed practical nurse; (d) it keeps daily medical records of all medication dispensed; and (e) its
primary service is other than to provide housing for residents. A shareholder seeking repurchase of Shares due to confinement to
a long-term care facility must have begun such confinement after the date the shareholder acquired the Shares to be repurchased
and must submit a written statement from a licensed physician certifying the shareholder’s continuous and continuing confinement
to a long-term care facility over the course of the last year or the determination that the shareholder will be indefinitely confined
to a long-term care facility.

    	 	2	 

    	 

    

With respect to
repurchases sought upon a shareholder’s Bankruptcy, “Bankruptcy” shall mean a bankruptcy over which a trustee
was appointed by a bankruptcy court after the date the shareholder acquired the Shares to be repurchased. A shareholder seeking
Shares to be repurchased due to Bankruptcy must submit the court order appointing the trustee or an order of discharge from the
applicable bankruptcy court.

With regard to a
shareholder whose Shares are not repurchased due to insufficient funds in that quarter, the repurchase request will not be retained
by the Company and such shareholder must resubmit his or her repurchase request in a subsequent quarter for his or her Shares to
be repurchased.

4.                  
Procedures for Repurchase. A shareholder requesting to repurchase Shares must mail or deliver a written request on
a form the Company provides, executed by the shareholder, its trustee or authorized agent to the repurchase agent. A shareholder
repurchase request must be received by 4:00 p.m. Eastern Time on the Repurchase Date. The repurchase agent will be registered as
a broker-dealer with the SEC and each state’s securities commission at all times unless exempt from registration. The Company
will pay repurchase proceeds within five business days from the Repurchase Date.

In the event of
repurchases sought upon the death, Qualifying Disability, confinement to a long-term care facility or Bankruptcy of a shareholder,
the written request must be received by the Company within twelve months after the onset or determination of the qualifying event.
If requests in the event of a qualifying event are not received within the twelve-month period described in the preceding sentence,
they will be treated as ordinary repurchase requests and will not be subject to priority.

Shareholders will
not relinquish their Shares to the Company until such time as the Company commits to repurchase such Shares. However, the repurchase
price for repurchase requests not withdrawn by the shareholder and Shares subsequently repurchased by the Company will be at the
current repurchase price under this Share Repurchase Program as of the Repurchase Date. Shareholders will have the right to withdraw
their repurchase requests at any time before 4:00 p.m. Eastern Time on the Repurchase Date. To the extent the repurchase price
for the applicable quarter is not made available by the tenth business day prior to the Repurchase Date, the Company may, in its
sole discretion, extend the Repurchase Date into the immediately subsequent month to ensure such notice period is satisfied. Otherwise,
no repurchase requests will be accepted for such quarter and shareholders who wish to have their Shares repurchased the following
quarter must resubmit their repurchase requests.

5.                  
Amendment, Suspension or Termination of the Share Repurchase Program. The Company’s board of directors, in
its sole discretion, may amend, suspend or terminate the Share Repurchase Program or waive any of its specific conditions to the
extent it is in the Company’s best interests, including to ensure the Company’s ability to qualify as a partnership
for U.S. federal income tax purposes, upon 30 days’ prior notice to the shareholders. The Company may provide notice by including
such information in a Current Report on Form 8-K or in its annual or quarterly reports, all publicly filed with the Securities
and Exchange Commission followed by a separate mailing to the shareholders. The Share Repurchase Program will terminate, and the
Company no longer will accept Shares for repurchase, if and when the Company’s Shares are listed on a national securities
exchange, are included for quotation in a national securities market or, in the sole determination of the board of directors, a
secondary market for Shares otherwise develops. All Shares to be repurchased under the Share Repurchase Program must be (i) fully
transferable and not be subject to any liens or other encumbrances and (ii) free from any restrictions on transfer.

    	 	3	 

    	 

    

 

6.                  
Governing Law. THIS SHARE REPURCHASE PROGRAM AND A SHAREHOLDER’S ELECTION TO PARTICIPATE IN THE SHARE REPURCHASE
PROGRAM SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY IN SAID
STATE; PROVIDED, HOWEVER, THAT CAUSES OF ACTION FOR VIOLATIONS OF FEDERAL OR STATE SECURITIES LAWS SHALL NOT BE GOVERNED BY THIS
SECTION 6.

 

    	 	4

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