Document:

aethlon_8k-ex1002.htm

 

Exhibit 10.2

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

	
Principal Amount: $___________

	
Issue Date: September 23, 2011

	
Purchase Price: $_______________

	  

CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED,AETHLON MEDICAL, INC., a Nevada corporation (hereinafter called “Borrower”), hereby promises to pay to the order of _________________(the “Holder”), without demand, the sum of _________ Dollars ($_________.00) (“Principal Amount”), with interest accruing thereon, on September 23, 2012 (the “Maturity Date”), if not sooner paid.

This Note has been entered into pursuant to the terms of a subscription agreement between the Borrower, the Holder and the other signatories thereto (“Other Holders”) dated at or about the date hereof (the “Subscription Agreement”), who have been issued Notes pursuant to the Subscription Agreement (“Other Notes”) and shall be governed by the terms of such Subscription Agreement.  Unless otherwise separately defined herein, all capitalized terms used in this Note shall have the same
meaning as is set forth in the Subscription Agreement.  The following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Payment Grace Period.  The Borrower shall not have any grace period to pay any monetary amounts due under this Note.  During the pendency of an Event of Default (as described in Article III), a default interest rate of eighteen percent (18%) per annum shall be in effect.

1.2           Conversion Privileges.  The Conversion Rights set forth in Article II shall remain in full force and effect immediately from the date hereof and until the Note is paid in full regardless of the occurrence of an Event of Default.  This Note shall be payable in full on the Maturity Date, unless previously converted into Common Stock in accordance with Article II
hereof.

  

  

  

ARTICLE II

CONVERSION RIGHTS

The Holder shall have the right to convert the principal and any interest due under this Note into Shares of the Borrower's Common Stock, $.001 par value per share (“Common Stock”) as set forth below.

2.1.           Conversion into the Borrower's Common Stock.

(a)           The Holder shall have the right from and after the date of the issuance of this Note and then at any time until this Note is fully paid, to convert any outstanding and unpaid principal portion of this Note, and/or accrued interest, at the election of the Holder (the date of giving of such notice of conversion being a "Conversion Date") into fully paid and non-assessable shares of Common Stock as such stock exists on the date of issuance of this Note, or any shares of capital stock of Borrower into which such Common Stock shall hereafter be changed or reclassified, at the
conversion price as defined in Section 2.1(b) hereof (the "Conversion Price"), determined as provided herein.  Upon delivery to the Borrower of a completed Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall issue and deliver to the Holder within three (3) business days after the Conversion Date (such third day being the “Delivery Date”) that number of shares of Common Stock for the portion of the Note converted in accordance with the foregoing.  At the election of the Holder, the Borrower will deliver accrued but unpaid interest on the Note, if any, through the Conversion Date
directly to the Holder on or before the Delivery Date.  The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal of the Note and interest, if any, to be converted, by the Conversion Price.

(b) Subject to adjustment as provided in Section 2.1(c) hereof, the conversion price per share shall be equal to $0.07.  The foregoing notwithstanding, in the event the Borrower does not enter into a binding government contract on or before October 15, 2011 in connection with its medical device platform with such contract having gross revenues of not less than five million ($5,000,000) dollars, the Conversion Price will be reduced to eighty percent (80%) of the average of the three lowest closing bid prices of the
Common Stock as reported by Bloomberg L.P. for the Principal Market for the ten (10) trading days preceding the Conversion Date.  Subject to adjustment as described herein, the Conversion Price may not be more than $0.07.

(c)            The Conversion Price and number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(a), shall be subject to adjustment from time to time upon the happening of certain events while this conversion right remains outstanding, as follows:

A.           Merger, Sale of Assets, etc.  If (A) the Borrower effects any merger or  consolidation of the Borrower with or into another entity, (B) the Borrower effects any sale of all or substantially all of its assets in one or a series of related transactions,  (C) any tender offer or exchange offer (whether by the Borrower or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the
Borrower consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Borrower, or (F) the Borrower effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental  Transaction"), this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.  The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor or purchaser.  Without limiting the
generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

  

  

  

B.           Reclassification, etc.  If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes that may be issued or outstanding, this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such
reclassification or other change.

C.           Stock Splits, Combinations and Dividends.  If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares
of Common Stock outstanding immediately prior to such event.

               D.           Share Issuance.   So long as this Note is outstanding, if the Borrower shall issue any Common Stock except for the Excepted Issuances (as defined in the Subscription Agreement), prior to the complete conversion or payment of this Note, for a consideration per share that is less than the Conversion Price that would be in effect at the time of such issue, then, and thereafter successively upon each such issuance, the Conversion Price shall be reduced to such other
lower issue price.  For purposes of this adjustment, the issuance of any security or debt instrument of the Borrower carrying the right to convert such security or debt instrument into Common Stock or of any warrant, right or option to purchase Common Stock shall result in an adjustment to the Conversion Price upon the issuance of the above-described security, debt instrument, warrant, right, or option and again upon the issuance of shares of Common Stock upon exercise of such conversion or purchase rights if such issuance is at a price lower than the then applicable Conversion Price. Common Stock issued or issuable by the Borrower for no consideration will be deemed issuable or to have been issued for $0.001 per share of Common Stock.  The reduction of the Conversion Price described in this paragraph is in addition to the other rights of the Holder described in the
Subscription Agreement.

(d)           Whenever the Conversion Price is adjusted pursuant to Section 2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting forth the Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

(e)           During the period the conversion right exists, Borrower will reserve from its authorized and unissued Common Stock not less than an amount of Common Stock equal to 150% of the amount of shares of Common Stock issuable upon the full conversion of this Note.  Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the conversion of this Note.

  

  

  

2.2          Method of Conversion.  This Note may be converted by the Holder in whole or in part as described in Section 2.1(a) hereof and the Subscription Agreement.  Upon partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid.

2.3.         Maximum Conversion.  The Holder shall not be entitled to convert on a Conversion Date that amount of the Note in connection with that number of shares of Common Stock which would be in excess of the sum of (i) the number of shares of Common Stock beneficially owned by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock issuable in connection with the unconverted portion of the Note, and (iii) the number of shares of Common Stock issuable upon the conversion of the Note with respect to which the determination of this provision is being made on a
Conversion Date, which would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock of the Borrower on such Conversion Date.  For the purposes of the provision to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to the foregoing, the Holder shall not be limited to aggregate conversions of 4.99%.  The Holder shall have the authority and obligation to determine whether the restriction contained in this Section 2.3 will limit any conversion hereunder and to the extent that the Holder determines that the limitation contained in this Section applies, the determination of which
portion of the Notes are convertible shall be the responsibility and obligation of the Holder.  The Holder may waive the conversion limitation described in this Section 2.3, in whole or in part, upon and effective after 61 days prior written notice to the Borrower to increase such percentage to up to 9.99%.

ARTICLE III

EVENT OF DEFAULT

The occurrence of any of the following events of default ("Event of Default") shall, at the option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth below:

3.1           Failure to Pay Principal or Interest.  The Borrower fails to pay any installment of principal, interest or other sum due under this Note when due.

3.2           Breach of Covenant.  The Borrower breaches any material covenant or other term or condition of the Subscription Agreement, Transaction Documents or this Note in any material respect and such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.

3.3           Breach of Representations and Warranties.  Any material representation or warranty of the Borrower made herein, in the Subscription Agreement, Transaction Documents, or in any agreement, statement or certificate given in writing pursuant hereto or in connection therewith shall be false or misleading in any material respect as of the date made and the Closing Date.

  

  

  

3.4           Liquidation.   Any dissolution, liquidation or winding up of Borrower or any substantial portion of its business.

 

3.5           Cessation of Operations.   Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due.

 

3.6           Maintenance of Assets.   The failure by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary to conduct its business (whether now or in the future).

3.7           Receiver or Trustee.  The Borrower or any Subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

3.8           Judgments.  Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for more than $100,000, unless stayed vacated or satisfied within forty-five (45) days.

3.9           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary of Borrower.

3.10           Delisting.   Delisting of the Common Stock from any Principal Market; failure to comply with the requirements for continued listing on a Principal Market for a period of ten (10) consecutive trading days.

3.11           Non-Payment.   Other than defaults disclosed on Schedule 5(l) to the Subscription Agreement, a default by the Borrower under any one or more obligations in an aggregate monetary amount in excess of $100,000 for more than twenty (20) days after the due date, unless the Borrower is contesting the validity of such obligation in good faith.

3.12           Stop Trade.  An SEC or judicial stop trade order or Principal Market trading suspension that lasts for five or more consecutive trading days.

3.13           Failure to Deliver Common Stock or Replacement Note.  Borrower's failures to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note and Sections 7 and 11 of the Subscription Agreement, or, if required, a replacement Note.

3.14           Reservation Default.   Failure by the Borrower to have reserved for issuance upon conversion of the Note or upon exercise of the Warrants issued in connection with the Subscription Agreement, the number of shares of Common Stock as required in the Subscription Agreement, this Note and the Warrants.

3.15           Financial Statement Restatement.  The restatement after the date hereof of any financial statements filed by the Borrower with the Securities and Exchange Commission for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to the unrestated financial statements, have constituted a Material Adverse Effect.

  

  

  

3.16           Other Note Default.  The occurrence of any Event of Default under any Other Note.

3.17           Event Described in Subscription Agreement.  The occurrence of an Event of Default as described in the Subscription Agreement that, if susceptible to cure, is not cured during any designated cure period.

3.18           Cross Default.  A default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and Holder are parties, or the occurrence of a material event of default under any such other agreement to which Borrower and Holder are parties which is not cured after any required notice and/or cure period.

ARTICLE IV

MISCELLANEOUS

4.1           Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2           Notices.  All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice.  Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the first business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be: (i) if to the Borrower to: Aethlon Medical, Inc., 8910 University Center Lane, Suite 660,
San Diego, CA 92122, Attn: James A. Joyce, CEO, facsimile: (858) 272-2738, with a copy by telecopier only to: Law Office of Jennifer A. Post, 9320 Wilshire Boulevard, Suite 306, Beverly Hills, California 90212, Attn: Jennifer A. Post, Esq., facsimile: (800) 783–2983, and (ii) if to the Holder, to the name, address and facsimile number set forth on the front page of this Note, with a copy by fax only to Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

4.3           Amendment Provision.  The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

4.4           Assignability.  This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns.  The Borrower may not assign its obligations under this Note.

 

  

  

  

 

4.5           Cost of Collection.  If default is made in the payment of this Note, Borrower shall pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

 

4.6           Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to conflicts of laws principles that would result in the application of the substantive laws of another jurisdiction.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement must be brought only in the civil or state courts of New York or in the federal courts located in the State and county of New York.  Both parties and the individual signing this
Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to enforce a judgment or other decision in favor of the Holder.  This Note shall be deemed an unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought.  For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this Note, whether or not such other document or
agreement was delivered together herewith or was executed apart from this Note.

 

4.7           Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum rate permitted by applicable law, any payments in excess of such maximum rate shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

4.8           Non-Business Days.   Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

 

4.9           Redemption.  This Note may not be prepaid, redeemed or called without the consent of the Holder.

4.10         Shareholder Status.  The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of this Note.  However, the Holder will have the rights of a shareholder of the Borrower with respect to the Shares of Common Stock to be received after delivery by the Holder of a Conversion Notice to the Borrower.

  

  

  

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the ____ day of September, 2011.

 

 

	 	 
AETHLON MEDICAL, INC.

By:________________________________

Name:

Title:

 

WITNESS:

______________________________________

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

The undersigned hereby elects to convert $_________ of the principal and $_________ of the interest due on the Note issued by AETHLON MEDICAL, INC. on September 23, 2011 into Shares of Common Stock of AETHLON MEDICAL, INC.(the “Borrower”) according to the conditions set forth in such Note, as of the date written below.

Date of Conversion:____________________________________________________________________

Conversion Price:______________________________________________________________________

Twenty Trading Day Period referred to in Section 2.1(b) of Note: ________________________________

Three Trading Days/Closing Prices underlying Conversion Price:

__________($_____), __________($_____), __________($_____)

Number of Shares of Common Stock Beneficially Owned on the Conversion Date: Less than 5% of the outstanding Common Stock of AETHLON MEDICAL, INC.

Shares To Be Delivered:_________________________________________________________________

Signature:____________________________________________________________________________

Print Name:__________________________________________________________________________

Address:_____________________________________________________________________________

   ____________________________________________________________________________franklin_10k-ex1002.htm

Exhibit 10.2

 

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT ("Lease" and/or "Agreement") is made effective August 12, 2011, by and between EJMC, Inc., a California corporation ("Lessor"), the owner of 6205 Lusk Boulevard, San Diego, California, and Franklin Wireless Corp., a Nevada corporation ("Lessee").

 

WITNESSETH:

 

In consideration of the mutual covenants of the respective parties, and upon the terms and conditions set forth herein, Lessor agrees to lease to Lessee and Lessee agrees to lease from Lessor the premises located on the first and second floors of 6205 Lusk Boulevard, San Diego, California 92121-2731, consisting of approximately 11,318 square feet ("Premises") with a specific exclusion of the locked storage closet located under the rear interior stairwell which shall be for the exclusive use of Lessor and/or its janitorial or other service vendors. Lessee shall be the sole occupant and tenant of the Premises.

 

1.  Premises and Improvements. Upon completion of certain tenant improvements as set forth below, Lessor shall deliver the Premises in good, clean condition on the Commencement Date.

 

1.1 Tenant Improvements. Lessor shall provide the following tenant improvements at Lessor's sole cost and expense:

 

1.1.1 Tile floor covering in 1st floor conference room and if approved by fire and other building codes, removal of door and construction of enclosing wall of 1St floor conference room (15' x 15');

 

1.1.2. Construction of dividing wall in 1St floor "lobby" area.

 

1.2 Furniture and Furnishings. For the full lease term, Lessor shall provide for Lessee's use and enjoyment all those items of used furniture and furnishings as shown on Exhibit A attached hereto. All such furniture and furnishings shall remain at the Premises and shall be returned to Lessor in like condition upon the conclusion of the lease term, normal wear and tear excepted. Further, Lessee agrees to provide floor mats for each and every desk and cubicle to protect the floor coverings in the Premises.

 

1.3  Keys to Premises. Lessor shall provide to Lessee one complete set of keys to the Premises by placing one key in each lock located within the interior of the Premises (including cubicle and file cabinet keys) and by providing a key ring containing keys to the first and second floor front doors, the first floor back door, the exterior electrical room, the two interior back doors on both the first and second floors, and two mail boxes. Upon conclusion of the lease term, Lessee shall return all keys to Lessor in the same fashion.

 

 

  

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2.  Term and Option to Extend.

 

2.1  Initial Term. The term of this Lease shall be for four (4) years commencing on September 1, 2011 ("Commencement Date"), and ending on August 31, 2015 ("Expiration Date").

 

2.2  Option to Extend. On or before six (6) months prior to the Expiration Date of this Lease, providing Lessee is in possession of the Premises and is not in default of this Lease, Lessee may extend the term of this Lease for an additional two (2) years by notifying Lessor of such intention in writing (the "Extension Period"), time being of the essence. In the event Lessee elects to extend the Lease Term, the rental rate shall be negotiated by Lessor and Lessee based on fair market rent for comparable office space in the area.

 

3.  Base Monthly Rent and Security Deposit.

 

3.1  Base Monthly Rent. During the first year of this Lease, Lessee will pay Lessor base monthly rent in the amount of $1.45 per square foot per month ("Base Monthly Rent") on or before the first day of each month during the term of this Lease. Notwithstanding the foregoing, Base Monthly Rent for the first and second months of the Lease Term shall be abated. During the second, third and fourth years of the Lease, the Base Monthly Rent will increase to $1.50 per square foot per month; $1.55 per square foot per month, and $1.60 per square foot per month, respectively, utilities and Excess Operating Charges (hereinafter defined) excluded.

 

3.2  Security Deposit. Lessee shall deposit with Lessor upon execution hereof the sum of Sixteen Thousand Dollars ($16,000.) as security for Lessee's faithful performance of Lessee's obligations hereunder, which sum shall not be applicable towards Lessee's last month's Base Monthly Rent obligation. However, during the lease term if Lessee fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default or for the payment of any other sum to which Lessor may become obligated by reason of Lessee's default or to compensate Lessor for any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after written demand therefor deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount hereinabove stated and Lessee's failure to do so shall be a material breach of this Lease. Lessor shall not be required to keep said deposit separate from its general accounts. If Lessee performs all of Lessee's obligations hereunder, said deposit, or so much thereof as has not theretofore been applied by Lessor, shall be returned, without payment of interest or other increment for its use, to Lessee within thirty (30) days after expiration of the term hereof, and after Lessee has vacated the Premises. No trust relationship is created herein between Lessor and Lessee with respect to said Security Deposit.

 

 

  

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4.  Additional Rent. Beginning January 1, 2012, Lessee shall pay as additional rent Lessee's proportionate share of the Excess Operating Charges (as hereinafter defined) if any, for each calendar year falling entirely or partly within the Lease term. "Excess Operating Charges" shall mean only those expenses, charges, fees and costs of every kind and nature reasonably incurred by Lessor on behalf of Lessee as a direct result of the negligence or fault of Lessee and/or for the specific and direct benefit of, specifically on account of, or upon the direct request of Lessee in connection with the operation, maintenance, servicing, insuring, repairing, or increased taxation of the Premises. Notwithstanding the foregoing, throughout the term of this Lease, Lessor shall be responsible for Basic Operating Charges defined as all those expenses routinely and regularly incurred by Lessor as a result of its ownership, operation, routine maintenance, and management of the Premises.

 

5.  Late Charges. Lessee hereby acknowledges that late payment by Lessee of Base Monthly Rent or Additional Rent (collectively, "Rent") will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to 10% (ten percent) of each such overdue amount or $1,600, whichever is greater. The parties hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of Base Monthly Rent, then notwithstanding any provision of this Lease to the contrary, Base Monthly Rent shall, at Lessor's option, become due and payable quarterly in advance.

 

6.Delivery of Possession. If Lessor for any reason whatsoever cannot deliver possession of the Premises to Lessee at the commencement date of the term as above specified, this Lease shall not be void or voidable nor shall Lessor be liable to Lessee for any loss or damage resulting therefrom; but in such event, there shall be a proportionate reduction of all rent for the period between the said specified date for commencement of the term and the date when Lessor does in fact deliver possession to Lessee. No such failure to give possession on the date of Commencement of the term shall be construed in any way to extend the term of the Lease. The other provisions of this paragraph to the contrary notwithstanding, if for any reason the possession of the Premises is not delivered to Lessee within thirty (30) days of the Commencement Date, then this Lease may be terminated by Lessee and thereupon neither party hereto shall have any further liability to the other.

 

  

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7.  Default. The occurrence of one or more of the following events (hereinafter called "Events of Default") shall constitute a default by the Lessee:

 

(a)  Failure to pay rent within ten (10) days of the date was due;

 

(b)  Failure to commence to perform any other provision of this Lease within thirty (30) days after the mailing of written notice of such non-monetary default has been given to Lessee;

 

(c)  Lessee's voluntary or involuntary bankruptcy; or

 

(d)  Lessee's dissolution or liquidation.

 

8.  Remedies upon Default by Lessee. Lessor shall have the following remedies if Lessee commits a default. These remedies are not exclusive; they are cumulative in addition to any remedies now or later allowed by law:

 

(a) Lessor shall have the right to continue this Lease in full force and effect, and may enter the Premises after default and the Lessee's failure to cure the default (after following all legally required procedures) and relet them. Lessee shall be liable immediately to Lessor for all reasonable costs Lessor shall incur in reletting the Premises and Lessee shall pay to Lessor the rent due under this Lease on the date that the rent is due, less the rent Lessor received from reletting.

 

(b) Lessor shall have the right to terminate this Lease after default and the Lessee's failure to cure the default as provided above and lessee's rights to possession of the Premises at any time, and may (after following all legally required procedures) re-enter the Premises and Lessor shall have the right to pursue its remedies at law or in equity to recover from Lessee all amounts of rent then due or thereafter accruing under this Lease.

 

(c) No course of dealing between Lessor and Lessee or any delay on the part of Lessor in exercising any rights it may have under this Lease shall operate as a waiver of any rights of Lessor hereunder nor shall any waiver of a prior default operate as a waiver of any subsequent default or defaults and no express waiver affect any condition, covenant, rule or regulation other than the one specified in such waiver and that one only for the time and in the manner specifically stated.

 

9. Use. Lessee shall use and occupy the Premises for general office purposes consistent with Lessee's business and for no other purpose without Lessor's consent, which consent shall not be unreasonably withheld. Lessee shall not use the Premises in a manner that creates waste or a nuisance, or that disturbs owners and/or occupants of, or causes damage to, neighboring properties. At no time shall Lessee, its guests, customers, or other invitees be permitted to smoke inside any area of the building Premises.

 

 

  

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10.  Common Areas; Rules and Regulations. "Common Areas" shall mean all areas within the property of which the Premises are a part, and which are not retained by Lessor for Lessor's exclusive use, nor leased or held for lease by Lessor, including parking areas, driveways, sidewalks, loading areas, access and egress roads, landscaped areas and improvements provided by Lessor for the common use of Lessees. Lessee shall have the non­exclusive right to use the Common Areas for the purposes intended. Further, Lessor and Building Owners' Association, or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to adopt, modify, amend and enforce reasonable rules and regulations ("Rules and Regulations") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and their invitees. Lessee agrees to abide by and conform to all such Rules and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the noncompliance with said Rules and Regulations by other tenants of the project.

 

11.  Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties. In the event, however, that Lessor should elect to provide security services, the cost thereof shall be borne solely by Lessor.

 

12.  Real Property Tax. Lessor shall pay any and all real property tax or assessment against the Property. Lessee shall have no obligation to pay any real property tax or assessment against the Property unless an assessment occurs as a direct result of an authorized or unauthorized tenant improvement made by Lessee after the initial occupancy of the Premises.

 

13.  Personal Property Tax. Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee owned alterations and utility installations, trade fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee owned alterations and utility installations, trade fixtures, furnishings, equipment and personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10 days after receipt of a written statement setting froth the taxes applicable to Lessee's property.

 

 

///

 

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14.  Utilities and Janitorial Service.

 

14.1 Provision of Electrical Utilities; Payment. Lessee shall be responsible for its own gas and electrical utilities for the Premises, (which are separately metered for each floor, and for building signage lighting). Lessee shall not use or permit in the Premises any electrical device which in Lessor's reasonable opinion will overload the building's electrical circuits. Lessee shall not without Lessor's prior written consent (which consent shall not be unreasonably withheld) make any alterations or additions to the building's electrical distribution system.

 

14.2 Provision of Water Utilities; Payment. At no additional cost to Lessee, Lessor shall be responsible for provision of and payment for water to the Premises.

 

14.3 Janitorial Service. At no additional cost to Lessee, Lessor shall provide janitorial services to the Premises for five (5) days per week.

 

14.4 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.

 

15.  Assignment and Subletting. Lessee shall not assign this Lease, nor sublet the Premises, or any part thereof, nor use the same, nor permit the same to be used for any other purpose than as above stipulated, nor make any alterations therein, or additions thereto without the prior written consent of Lessor, which consent shall not be unreasonably withheld.

 

16.  Maintenance and Repair. Lessor shall, at Lessor's sole cost and expense and at all times, keep the Premises and every part thereof in good order, condition and repair, structural and non-structural, including, without limiting the generality of the foregoing, all equipment or facilities serving the Premises, such as plumbing, heating, air conditioning, ventilating (including replacing air filters), electrical, lighting fixtures (including light bulbs), fire extinguishers, fixtures, walls (interior and exterior), foundations, ceilings, roofs, windows, doors, plate glass, skylights, landscaping, driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, about or adjacent to the Premises. Notwithstanding the foregoing, Lessee, at Lessee's expense, shall be responsible for replacing any and all light bulbs that fail or bum out after August 31, 2013, except that Lessor shall physically change all bulbs during the entire lease term. Further, Lessee shall make all repairs necessitated by Lessee's negligent or intentional act or omission.

 

  

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17.  Alterations. All alterations or improvements to the Premises shall be approved in advance by Lessor, which approval shall not be unreasonably withheld. All permanent alterations, additions and improvements that have become a part of the realty and which have been or will be installed by either party upon the Premises during the term of the Lease and which, in any manner, are affixed to the floors, walls or ceilings, shall become the property of the Lessor and at the termination of this Lease shall be surrendered with the Premises as a part thereof. However, at Lessor's option, Lessee shall remove all such alterations, additions, improvements and fixtures and the Premises shall be restored to their original condition at Lessee's expense. Lessee may prior to the expiration of the Lease remove all non-permanent fixtures and equipment which it has placed in the Premises, provided Lessee restores Premises to the original condition.

 

18.  American with Disabilities Act. In the event that as a result of Lessee's use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications of the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the parties agree that such modifications, construction or improvements shall be made at Lessee's expense.

 

19.  Indemnity. Except for liability arising out of Lessor's negligence or willful misconduct, Lessee agrees to indemnify and save harmless Lessor against and from any and all claims arising from Lessee's use of the Premises.

 

20.  Insurance.

 

20.1 Property Insurance. Lessor shall obtain and keep in force during the term of this Lease a policy insuring loss or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises, as the same shall exist from time to time, but in no event more than the commercially reasonable and available insurable value thereof.

 

20.2 Lessee's Property Insurance. Lessee, at its cost, shall maintain insurance coverage on all of Lessee's personal property, furnishings, equipment and trade fixtures, whether leased or owned which is located in, on or about the Premises. Such insurance shall be full replacement cost coverage. The proceeds from any such insurance shall be used by Lessee for the replacement of Lessee's leased or owned personal property, furnishings, equipment and/or trade fixtures.

 

20.3 Lessee's Liability Insurance. Lessee shall obtain and keep in force during the term of this Lease a Commercial General Liability policy of insurance protecting Lessee and Lessor (as an additional insured) against claims for bodily injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence, and an annual aggregate limit of not less than $2,000,000.

 

 

  

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

 

20.5 Certificates of Insurance. Within thirty (30) days of Lessee's occupancy of the Premises, each party shall provide for the other party certificates of insurance evidencing coverage in compliance with the terms and conditions set forth herein.

 

21.  Destruction by Fire or Other Peril. If the Premises shall be partially damaged by fire or other casualty, the damages shall be repaired by and at the expense of Lessor and the rent until such repairs are made shall be apportioned according to the part of the demised Premises which is usable by Lessee. Said repairs shall be made promptly except that no penalty shall accrue for reasonable delay which may arise by reason of adjustment of insurance on the part of Lessor and/or Lessee and for reasonable delay on account of labor problems or any other cause beyond Lessor's control. If the Premises are damaged to the extent that Lessee cannot conduct business on the Premises for over sixty (60) days, Lessee shall have the option to terminate the Lease.

 

22.  Parking. Lessee shall be entitled to forty-three (43) designated "6205" surface parking spaces (collectively, "Parking Facilities"). Two (2) of Lessee's forty-three parking spaces shall be covered in a carport space.

 

23.  Access/Hours of Operation. Lessee shall have access to the Premises and the Parking Facilities seven (7) days per week, twenty-four (24) hours per day.

 

24.  Signage. Lessee shall be entitled to the 2" Floor "eyebrow-level" exterior (below roof-line) building mounted signage, and the exclusive monument signage located at the corner of Barnes Canyon Road and Lusk Boulevard, each in accordance with the Building's approved comprehensive sign plan. Any signage of Lessee must be approved in advance by Lessor and the Building Owners' Association, such approval not to be unreasonably withheld. The cost of the installation, maintenance and removal of the signage shall be borne by Lessee.

 

25.  Eminent Domain. If the whole or any part of the Premises hereby leased shall be taken by any public authority under power of eminent domain, then the term of this Lease shall cease on the part so taken from the day the possession of the part shall be acquired for any public purpose and the rent shall be paid up to that day and if such portion of the demised Premises is so taken as to destroy the usefulness of the Premises for the purposes for which the Premises were leased on the requisite parking required for the business, then from that day the Lessee, in its sole discretion, shall have the right to either terminate this Lease or to continue in possession of the remainder of the same under the terms herein provided, except that the rent shall be reduced in proportion to the amount of the Premises taken. Lessor shall be entitled to all damages payable by any condemning party allocated for loss of real property and improvements; however, Lessee shall be entitled to recover from the public authority, any damages allowable under California's laws of eminent domain and condemnation.

 

  

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26.  Hazardous Substances. The term "Hazardous Substances" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either (i) potentially injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts or fractions thereof.

 

26.1 Hazardous Substances Compliant. To the best of Lessor's knowledge, the Building is free of Hazardous Substances and in compliance with current ADA specifications.

 

26.2 No Use of Hazardous Substances. Lessee shall not engage in any activity in or on the Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all applicable requirements. "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any applicable requirements requires that a notice by given to persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the agreed use such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use is in compliance with all applicable requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefore. In addition, Lessor may condition its consent to any reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability, including without limitation, the installation (and removal before expiration or termination) of protective modifications (such as concrete encasements) and/or increasing or requiring a Security Deposit.

 

  

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26.3 Indemnification. Lessee shall indemnify, defend and hold Lessor, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee). Lessee's obligation shall include, without limitation, the effects of any contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee from this obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement.

 

27.  Subordination, Attornment and Estoppel Certificate.

 

27.1 Subordination. This Lease and the rights of Lessee hereunder are hereby made subject and subordinate to all bona fide mortgages now or hereafter placed upon the Premises by Lessor or any other owner, provided however that such mortgages will not cover the equipment and furniture or furnishings on the Premises owned by Lessee. This Lease is also subject to and subordinate to all matters of record affecting the real property of which these Premises are a part. Lessee hereby further agrees to execute any estoppel certificate or instrument of subordination which might be requested of Lessor.

 

27.2 Attornment. If any mortgagee shall succeed to the interest of Lessor by reason of the exercise of its rights under such mortgage (or the acceptance of voluntary conveyance in lieu thereof) however caused, then such successor may, at its option, succeed to the interest of Lessor under this Lease; and in such event, provided that a non-disturbance agreement is executed favor of Lessee, Lessee shall thereupon attorn to such successor and become bound directly to such successor in interest to Lessor to perform and observe all Lessee's obligations under this Lease without the necessity of the execution of any further instrument.

 

27.3 Estoppel Certificate. Lessee shall at any time upon not less than ten (10) days prior written notice from Lessor execute, acknowledge and deliver to Lessor a statement in writing (i) certifying that this Lease and any modification is in full force and effect; (ii) acknowledging that there are not, to Lessee's knowledge, any uncured defaults on the part of Lessor hereunder, or specifying such defaults if any are claimed; and (iii) acknowledging the subordination and attornment provisions referred to above.

 

28.  Notices. All notices, demands and communications hereunder to Lessee or Lessor shall be served or given by U.S. Mail (certified, return receipt requested), and if intended for Lessor, the same shall be addressed to Lessor at the following address:

 

EJMC, Inc.

c/o Law Offices of Tamara D. DeHaan 

444 West C Street, Suite 350

San Diego, California 92101-3582

 

  

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And if intended for Lessee, the same shall be addressed to Lessee at the following address:

 

Franklin Wireless Corp. 

6205 Lusk Blvd.

San Diego, CA 92121 

ATTN: Richard Walker

 

Or to such other addresses as are hereinafter designated by either party, or their successors in interest, by notice in writing, sent by U.S. Registered Mail to such designated addresses. Any such notice shall be effective as of the date stamped by the Post Office once the envelope is received by addressee.

 

29.  Brokers' Fees. To the extent there are any claims made by any person or entity for brokers and/or finders fees associated with this lease transaction, Lessee and Lessor agree that each shall be responsible for the payment of their own fees.

 

30.  Holding Over. Upon termination of this Lease, Lessee shall surrender the Premises to Lessor "broom-clean" and in good order and condition (reasonable wear and tear excepted). Further, Lessee has no right to retain possession of the Premises or any part thereof beyond the Expiration Date or termination of this Lease. However, if Lessee remains in possession of the Premises after the Expiration Date of this Lease and without the exercise and delivery of a new Lease, the tenancy will be from month-to-month only at a rent per month equal to one-hundred fifty percent (150%) of the rent payable in respect of the month immediately preceding expiration of this Lease, payable in advance on the first day of each month and shall be subject to all terms of this Lease, except that the tenancy will be from month-to-month only.

 

31.  Attorneys Fees. In case suit shall be brought by any party for the breach of any provisions of this Lease, the prevailing party shall recover from the non-prevailing party all costs and reasonable attorneys' fees and costs incurred by the prevailing party.

 

32.  Applicable Law; Venue; Jurisdiction. The laws of the State of California shall govern the validity, performance and enforcement of this Lease. Jurisdiction and venue shall lie with the Superior Court of California, San Diego County Judicial District, Central Division.

 

33.  Waiver of Jury Trial. The parties hereby waive their respective rights to trial by jury in any action or proceeding involving the Premises or arising out of this Lease Agreement.

 

34.  Quiet Enjoyment. Upon due performance of the covenants and agreement to be performed by Lessee and Lessor under this Lease, Lessor covenants that Lessee shall and may at all times peaceably and quietly have, hold and enjoy the Premises during the terms of this Lease.

 

 

  

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35.  Entirety and Severability. This written Lease Agreement is intended to contain the entire agreement of the parties and shall supersede any and all other prior or contemporaneous oral agreements. This Lease Agreement shall not be modified except with a written instrument signed by the parties hereto. The invalidity of any provision of this Lease Agreement, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

 

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

 

37.  Recording. Either Lessee or Lessor shall, upon request of the other, execute, acknowledge and deliver to the other a short form memorandum of this Lease for recording purposes. The Party requesting recordation shall be responsible for payment of any fees or taxes applicable thereto.

 

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

 

39.  Covenants and Conditions. All provisions of this Lease to be observed or performed by either party are both covenants and conditions.

 

40.  Authority. If either Party hereto is a corporation, trust, or general or limited partnership, each individual executing this Lease on behalf of such entity represents and warrants that it is duly authorized to execute and deliver this Lease on its behalf.

 

41.  Conflict and Neutral Construction. Any conflict between the printed provisions of the Lease and any handwritten provisions shall be controlled by the typewritten provisions. Further, each party and their respective legal counsel have reviewed this Lease Agreement, and the customary rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement.

 

 

  

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42.   Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have set their hands on the day and year first above written.

 

 

EJMC, Inc., a California corporation

 

 

By: /s/ E. Jack Phelps, President

 

 

FRANKLIN WIRELESS CORP., a Nevada corporation

 

By" /s/ OC Kim

Title: President

 

 

  

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EXHIBIT "A" TO LEASE AGREEMENT

 

INVENTORY OF LUSK FURNITURE & FURNISHINGS

 

LOBBY - 2nd Floor

Reception Desk, Burled Birch 18'

File Cabinet, Black 2-Drawer

Couch, Rust 81'

Chair, Lg Print

Coffee Table, Oval Glass Topped

End Table, Round Glass Topped 20" Diameter

Large Silk flower Arrangement

 

CONFERENCE ROOM - 2nd Floor

Conference Table, Custom Granite w/Walnut 8'

Executive Chairs, Fabric and Walnut (8)

Serving Cart, Brass & Glass

Plasma TV, Pioneer

Dell Optiplex Heatsink Computer, Wireless Mouse & Keyboard

 

SMALL CONFERENCE ROOM - 2nd Floor

Glass Topped Table, Round 48"

Walnut Bookcase, 50"

Marble & Walnut Pedestal Table

Walnut Presentation Board (wall mounted)

 

OFFICE 201

Glass Topped Table w/Walnut, 40"

 

OFFICE 202

Executive Desk, U-Shaped Walnut

Executive Chair

Credenza, Walnut

Glass Topped Table w/Black Base, 40"

 

OFFICE 203

Executive Desk, U-Shaped Walnut Executive Chair

 

OFFICE 204

Bookshelves, Walnut 48" (2)

Fire-Proof Locking Double Drawer File Cabinet

 

OFFICE 204

Lateral File Cabinet, Gray w/Lock 

Lateral File Cabinet, Gray w/o Lock

 

 

  

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EXHIBIT "A" TO LEASE AGREEMENT 

 

INVENTORY OF LUSK FURNITURE & FURNISHINGS - cont'd.

 

OFFICE 206

Lateral File Cabinet, Double Drawer, Walnut Bookcase, Walnut 39"

 

OFFICE 207

Executive Desk, Birch Right Return

Bookcase, Walnut 39"

Executive Chair, Gray

Lateral File Cabinet, Double Drawer, Putty Steelcase 39"

 

OFFICE 208

Bookcases, Walnut 39" (2)

 

KITCHEN - 2nd Floor

Refrigerator, Kenmore Energy Star w/Ice Maker, Black

Microwave Oven, Sharp

Table, Round Ivory 48"

Chairs, Ivory Leather (4)

Coffee Maker, Cuisinart

Dishwasher, Equation

Cable Box, Direct TV

 

BACK OFFICE AREA - 2nd Floor

Lateral File Cabinet, 5-Drawer Gray w/Lock

Secretarial Chairs, Burgundy (6)

Secretarial Chairs, Gray (3)

Pendaflexer Rolling File Cabinets, Black w/Locks (6)

 

COPY ROOM -2nd Floor 

Table, Round Gray 48"

 

HAYWORTH WORK STATIONS - 2nd Floor

Each includes electrical, lighting, locking overhead compartments, 

and locking file drawers (14)

 

EXECUTIVE STORAGE ROOM - 2nd Floor 

Metal Shelf Units (3)

 

TRASH RECEPTACLES

Stainless Steel w/Lifting Lid in Kitchen (2) 

Large in Kitchenette - 1st Floor (1)

Small in Work Stations (14)

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