Document:

Exhibit 10.2
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LEASE
BY AND BETWEEN
80 WILSHIRE BLVD. L.P., LANDLORD
AND
PHARMAPACKS, LLC, TENANT
FOR THE PREMISES KNOWN AS
80 WILSHIRE BOULEVARD
EDGEWOOD, NEW YORK
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TABLE OF CONTENTS
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	Section 
Number
	Title
	Page 
Number

	1
	Premises
	1

	2
	Term
	1

	3
	Annual Fixed Rental Rate
	3

	4
	Taxes
	9

	5
	Work
	12

	6
	Delivery of Possession
	13

	7
	Tenant's Uses
	15

	8
	Insurance
	17

	9
	Destruction
	22

	10
	Repairs, Maintenance and Alterations
	23

	11
	Covenant against Lien
	25

	12
	Condemnation
	26

	13
	Access to Premises
	26

	14
	Assignment and Subletting
	27

	15
	Tenant's Additional Agreement
	31

	16
	Interest Rate
	33

	17
	Easement for Pipes
	34

	18
	Utilities
	34

	19
	Signs
	35

	20
	Not used
	36

	21
	Non-Liability of Landlord
	36

	22
	Indemnity
	37

	23
	Right to Cure Defaults
	39

	24
	Bankruptcy - Insolvency
	40

	25
	Default
	40

	26
	Subordination
	43

	27
	Surrender of Premises
	44

	28
	Right of Redemption
	44

	29
	Effect of Unavoidable Delays
	44

	30
	Consents
	45

	31
	Security
	46

	32
	Tenant's Certificate
	47

	33
	Waiver of Trial By Jury
	48

	34
	Quiet Enjoyment
	49

	35
	Sole Broker
	49

	36
	Attorney's Fees
	49

	37
	Pollution and Hazardous Waste
	50

	38
	Surface and Subsurface Sampling
	53

	39
	Adjacent Excavation-Shoring
	54

	40
	Definition and Liability of Landlord 
	54

	41
	Relationship of Parties
	55

	42
	Notices
	55

	43
	Waiver
	56

	44
	Miscellaneous Definitions
	57

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	45
	Expiration of Lease
	57

	46
	Understanding
	58

	47
	Jurisdiction
	58

	48
	Exhibits
	58

	49
	Authority
	59

	50
	Entire Agreement
	59

	51
	Town of Islip Industrial Development Agency
	60

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THIS INDENTURE OF LEASE (the “Lease”), dated as of the  13th  day of March, 2020, between 80 Wilshire Blvd. L.P., a New York limited partnership having an office at 1 Executive Drive, Edgewood, New York 11717 (hereafter referred to as “Landlord”) and Pharmapacks, LLC, a New York limited liability company, with an address at 1516 Motor Parkway, Islandia, New York 11749 (hereafter referred to as “Tenant”).
W I T N E S S E T H:
Landlord and Tenant agree with each other as follows:
SECTION 1:  PREMISES:
Landlord hereby leases unto Tenant and Tenant hereby hires from Landlord the premises as more particularly cross-hatched on Exhibit “A”, known as 80 Wilshire Boulevard, Edgewood, New York. Tenant confirms, acknowledges and agrees that the Premises is leased to Tenant subject to an access agreement/easement through and over those areas as highlighted in green on Exhibit “A” attached hereto, to provide ingress and egress to and for the benefit of, and parking for and for the benefit of, the building located west of the premises, to be known as 90 Wilshire Boulevard, Edgewood, New York. Tenant further consents to Landlord’s recording of such access/easement in the Suffolk County clerk’s office against the Premises and 90 Wilshire Boulevard, Edgewood, New York.(Said premises together with the building thereon sometimes referred to as the “Premises” or “Demised Premises”). The parties stipulate and agree that the building on the Premises consists of approximately 231,000 rentable square feet, in the aggregate.
SECTION 2:  TERM:
A.To have and to hold the Premises for a term of ten (10) years, commencing on the “Commencement Date” (as hereinafter defined), and ending on the last day of the month first occurring ten (10) years after the Commencement Date, both dates inclusive, unless such term shall cease or sooner expire as hereinafter provided. The Commencement Date is currently anticipated to occur on or about July 1, 2020, Landlord and Tenant agree to confirm in writing the actual commencement and termination dates of the term of this Lease within five (5) days of a request from Landlord. Tenant’s failure to so confirm the term of this Lease as required shall be deemed an agreement by Tenant that the term of this Lease is as set forth in Landlord’s request.
B.Nothing contained in this Lease shall be construed to prohibit Landlord from placing any mortgage or mortgages against the Premises to which this Lease shall be subject and subordinate to, in accordance with the provisions herein set forth but at all times subject to the SNDA (as hereinafter
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defined) described in Section 26 of this Lease.
C.This Lease is subject to:
(1)the same estates, interests, matters and defects in title, if any, and such covenants, declarations, easements, restrictions, and utility easements as are of record, or which the Landlord may reasonably impose, either prior to, or subsequent to, the commencement date of this Lease, including said covenants and declarations substantially in the form attached hereto as Exhibit “C” dated December 29, 1983, and recorded on February 16, 1984, in Liber 9514, cp 74, and Exhibit “D”, dated June 1, 1984, and recorded on July 13, 1984, in Liber 9599, cp 331, and restated September 1, 1985, and Declaration of Covenants and Restrictions, dated November 20, 2003, and recorded on December 29, 2003 in Liber 12292, cp 397, provided, however with respect to any covenants, declarations, easements, restrictions as may be imposed after execution of this Lease, provided same do not materially interfere with Tenant’s use and occupancy of the Premises.
(2)the right of Landlord to grant easements to utility and other companies for service to the Premises provided same do not materially interfere with Tenant’s use and occupancy of the Premises.
D.This Lease, and/or any memorandum thereof, shall not be recorded by Tenant, or any person(s) or entity(s) claiming under or through Tenant.
E.Notwithstanding anything to the contrary contained in this Lease, Landlord shall provide Tenant and its qualified representatives with access to the Premises (the “Early Access”) prior to the Commencement Date and during the performance of the Landlord’s Work (as hereinafter defined), so that Tenant may set up its business operations within the Premises prior to the Commencement Date, including, without limitation, Tenant’s security systems, racking, layout, improvements, wiring and cabling. Landlord and Tenant shall cooperate with each other and their architects and/or engineers in order to coordinate the performance of Tenant’s improvements with the performance of the Landlord’s Work. In exercising such privilege of early access, Tenant shall provide Landlord with appropriate evidence of all liability insurance coverage required hereunder, and Tenant’s indemnification obligations pursuant to the terms of this Lease shall be in full force and effect, and the terms of Section 11 of the Lease shall be in full force and effect, and Tenant shall use commercially reasonable efforts to ensure that its representatives do not create any material interference with the
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Landlord’s Work performed in the Premises by Landlord. If, at any time during Tenant’s Early Access, Tenant’s work shall damage, delay or interfere with the completion or prosecution of Landlord’s Work, or cause a labor stoppage or any other labor action, or create a dangerous or hazardous condition at the Premises, Tenant shall immediately cease and desist its work and remove all the interference and its workers and/or contractors, etc., and/or items creating a hazardous or dangerous condition, as the case may be, until the problem abates, or its corrected, or until such time as Landlord’s Work at the Premises is complete, as the case may be, in any instance without any liability whatsoever of Landlord to Tenant. Landlord shall not be responsible for any damage, destruction or theft of any of Tenant’s installations and/or property installed in or left in, upon, on, or at the Premises and Tenant hereby releases Landlord from any and all such liability in connection with the same. All such work to be done at Tenant’s sole and exclusive risk. Tenant may not transact business at the Premises during such Early Access. If Tenant transacts business at the Premises the Commencement Date of this Lease shall immediately occur. Tenant shall not be required to pay any Base Rent or additional rent during such Early Access.
F.Notwithstanding anything to the contrary contained in this Lease, in the event the Commencement Date has not occurred by November 1, 2020 (the “Termination Deadline”), which Termination Date shall be extended in accordance with Section 29 of this Lease, and provided that such failure is not attributable to Tenant Delays (as hereinafter defined), and provided Tenant has not transacted business at the Premises, then Tenant shall have the right to terminate this Lease, at any time thereafter until such time as the Commencement Date actually occurs, upon written notice to Landlord. If Tenant delivers a termination notice as provided herein, (1) this Lease shall immediately terminate, Landlord shall return to Tenant any Rent previously deposited by Tenant, and neither party shall have any further obligation or liability to the other hereunder and (2) Tenant shall thereafter have ten (10) days from the date of its delivery of such written notice to remove any and all personal property, fixtures and/or improvements installed in the Premises by Tenant during the Early Access and repair and restore any damage caused by such placement or removal, and upon such removal, restoration and repair, Landlord shall return Tenant’s security deposit to Tenant.
SECTION 3:  ANNUAL FIXED RENTAL RATE:
A.(1)Annual Fixed Rate: Tenant covenants and agrees to pay Landlord, in lawful money of the United States, at the office of Landlord, or at such place as Landlord may
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designate, without previous demand therefor, and without any setoff or deduction whatsoever, annual base rental (“Base Rent”), payable in equal monthly installments, in advance, on the first day of each and every calendar month for each and every year of the term of this Lease, or any extension thereof, as follows:
		(i)
	For the first Lease Year (for the purposes hereof, “Lease Year” shall be defined as twelve (12) consecutive calendar months, the first Lease Year commencing on the Commencement Date), Base Rent shall be two million seven hundred seventy-two thousand and 00/100 ($2,772,000.00) dollars, payable two hundred thirty-one thousand and 00/100 ($231,000.00) dollars monthly.

		(ii)
	For the second Lease Year Base Rent shall be two million eight hundred fifty-five thousand one hundred sixty and 00/100 ($2,855,160.00) dollars, payable two hundred thirty-seven thousand nine hundred thirty and 00/100 ($237,930.00) dollars monthly.

		(iii)
	For the third Lease Year Base Rent shall be two million nine hundred forty thousand eight hundred fourteen and 80/100 ($2,940,814.80) dollars, payable two hundred forty-five thousand sixty-seven and 90/100 ($245,067.90) dollars monthly.

		(iv)
	For the fourth Lease Year Base Rent shall be three million twenty-nine thousand thirty-nine and 24/100 ($3,029,039.24) dollars, payable two hundred fifty-two thousand four hundred nineteen and 94/100 ($252,419.94) dollars monthly.

		(v)
	For the fifth Lease Year Base Rent shall be three million one hundred nineteen thousand nine hundred ten and 42/100 ($3,119,910.42) dollars, payable two hundred fifty-nine thousand nine hundred ninety-two and 54/100 ($259,992.54) dollars monthly.

		(vi)
	For the sixth Lease Year Base Rent shall be three million two hundred thirteen thousand five hundred seven and 73/100 ($3,213,507.73) dollars, payable two hundred sixty-seven thousand seven hundred ninety-two and 31/100 ($267,792.31) dollars monthly.

		(vii)
	For the seventh Lease Year Base Rent shall be three

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million three hundred nine thousand nine hundred twelve and 97/100 ($3,309,912.97) dollars, payable two hundred seventy-five thousand eight hundred twenty-six and 08/100 ($275,826.08) dollars monthly.
		(viii)
	For the eighth Lease Year Base Rent shall be three million four hundred nine thousand two hundred ten and 35/100 ($3,409,210.35) dollars, payable two hundred eighty-four thousand one hundred and 86/100 ($284,100.86) dollars monthly.

		(ix)
	For the ninth Lease Year Base Rent shall be three million five hundred eleven thousand four hundred eighty-six and 67/100 ($3,511,486.67) dollars, payable two hundred ninety-two thousand six hundred twenty-three and 89/100 ($292,623.89) dollars monthly.

		(x)
	For the tenth Lease Year Base Rent shall be three million six hundred sixteen thousand eight hundred thirty-one and 27/100 ($3,616,831.27) dollars, payable three hundred one thousand four hundred two and 61/100 ($301,402.61) dollars monthly.

		(xi)
	For the period from the first day after the last day of tenth Lease Year through the last day of the month first occurring thereafter base rent shall be payable three hundred one thousand four hundred two and 61/100 ($301,402.61) dollars monthly.

For the purposes hereof, the Commencement Date shall be that date which is the date which is the earlier to occur of: (i) the date Tenant occupies the Premises, or any part thereof, for business purposes (as opposed to Early Access); or (ii) the date that Landlord’s Work at the Premises, in accordance with subparagraph A of Section 5 of this Lease, is substantially complete (as hereinafter defined), whether or not Tenant occupies the Premises. For purposes of this Lease, the terms “substantial completion” and “substantially complete” shall mean when (A) Landlord’s Work is completed to the extent that the Premises may be occupied by Tenant for its permitted use, subject only to completion of minor finishing, adjustments or other minor construction aspects and (B) delivery by Landlord to Tenant of full possession of the Premises.
Notwithstanding the foregoing, in the event Landlord is unable to substantially complete the Premises by reason of delays caused solely by Tenant’s acts, or omissions, or those of Tenant’s agents, contractors, servants, officers, employees and the like (“Tenant Delays”) the Premises shall be deemed to be substantially complete on the day they would have been substantially complete
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but for Tenant Delays.
Tenant agrees that Base Rent for the first month of the Lease shall be due and payable to Landlord upon the execution of this agreement. Said annual base rental shall be in addition to all other payments to be made by Tenant as hereinafter provided.
		(2)
	All monthly rental payments shall be paid in advance on the first day of each and every calendar month included within said periods. Any monthly installments of Base Rent not paid within ten (10) days of the due date shall be subject to a one-time late payment and administrative charge of five (5%) percent of the total amount due for each instance that a monthly installment of Base Rent is not timely made. Tenant agrees that the late payment and administrative charge imposed is fair and reasonable, complies with all laws, regulations and statutes, and constitutes an agreement between Landlord and Tenant as to the estimated compensation for costs and administrative expenses incurred by Landlord due to the late payment of rent to Landlord by Tenant. Tenant further agrees that the late payment and administrative charge assessed pursuant to this Lease is not interest, and the late payment and administrative charge assessed does not constitute a lender or borrower/creditor relationship between Landlord and Tenant. All other payments becoming due hereunder and not paid within applicable notice and cure periods provided herein shall bear interest, as defined in Section 16 hereof, from and after the first calendar day when the same shall be due and payable. Such late payment and administrative charge shall be due as additional rent, and shall be in addition to all of Landlord’s other rights and remedies hereunder, in the event of Tenant’s default. Acceptance of such late payment and administrative charge by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder. In the event any check delivered by Tenant to Landlord is returned uncollected, for insufficient funds, or for any like reason, then, in addition to any and all other rights and remedies available to Landlord hereunder, Tenant shall pay to Landlord, as additional rent, a fee of $20.00 per check to compensate Landlord for the additional administrative cost and expense incurred by Landlord by reason of such check.

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		(3)
	All costs and expenses which Tenant assumes or agrees to pay pursuant to this Lease shall at Landlord’s election be treated as additional rent and, in the event of nonpayment, Landlord shall have all the rights and remedies herein provided for in the case of nonpayment of rent or of a breach of condition. If Tenant shall default in making any payment required to be made by Tenant (other than the payment of Base Rent required by Section “3” of this Lease) or shall default in performing any term, covenant or condition of this Lease on the part of Tenant to be performed which shall involve the expenditure of money by Tenant, in either event, beyond applicable notice and cure periods provided herein, Landlord, at Landlord’s option may, but shall not be obligated to, make such payment on behalf of Tenant, or expend such sum as may be reasonably necessary to perform and fulfill such term, covenant or condition and any and all sums so expended by Landlord, with interest thereon as defined in Section 16, from the date of such expenditure, shall be deemed to be additional rent, in addition to the Base Rent, and shall be repaid by Tenant to Landlord, within thirty (30) days’ of written demand therefor, but no such payment or expenditure by Landlord shall be deemed a waiver of Tenant’s default or shall it affect any other remedy of Landlord by reason of such default.

		(4)
	It is fully understood and Landlord and Tenant agree that this is a “net, net, net lease”, and Tenant is to be fully responsible, liable and is to pay for all taxes, fees, expenses, assessments, insurance, repairs, both interior and exterior, nonstructural, ordinary or extraordinary, foreseen and unforeseen and any other charges for the Premises, except to the extent otherwise set forth in this Lease and Landlord shall be indemnified and saved harmless by Tenant from and against all costs and expenses arising from nonpayment of or noncompliance with the same. Landlord is to be responsible for all costs and expenses of all “Structural Repairs” required during the term of this Lease, except “Structural Repairs” necessitated by the negligent, grossly negligent or willful acts of Tenant, its employees, officers, agents, servants, and the like. “Structural Repairs” are defined as repair to exterior walls, foundation, and window frames.

Notwithstanding the foregoing, Landlord acknowledges and agrees that Tenant shall be entitled to the benefit of any and all warranties in place with respect to the Building and/or the
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improvements installed by or on behalf of Landlord in or around the Building (including, without limitation, the roof) and, to the extent assignable, Landlord shall assign such warranties to Tenant. Additionally, Landlord warrants that the structure, mechanical systems and Building systems installed by Landlord serving the Premises shall be free from defects for the greater of one (1) year or the term of the actual third-party warranties in place with respect to same.
During the first year only of the term of this Lease Landlord shall make repairs to the roof not necessitated by the willful, grossly negligent or negligent acts of omission or commission of Tenant, its employees, agents, invitees, licensees, contractors and the like, necessitated by Tenant’s air conditioning and heating installed on the roof of the Premises. Thereafter, during the remainder of the term of this Lease, and for so long as Tenant occupies the Premises, Tenant shall at its sole cost and expense, be responsible for and shall make all roof repairs: (i) necessitated by the willful, grossly negligent and/or negligent acts of omission or commission of Tenant, its employees, officers, agents, invitees, licensees, servants, contractors, and the like; (ii) necessitated by Tenant’s air conditioning and heating installed on the roof of the Premises, or (iii) the cost of which do not exceed $1,000.00 per Lease Year on a cumulative basis.  In the event during the remainder of the term of this Lease a repair which is not necessitated by (i) or (ii) above and the cost of which exceeds $1,000.00 per Lease Year on a cumulative basis, or, if added to previous repairs not necessitated by (i) or (ii) above during such Lease Year will exceed $1,000.00 per Lease Year on a cumulative basis, Tenant shall be responsible for the first $1,000.00 of said repair per Lease Year on a cumulative basis, or the amount of the repair which, when added to the previous repairs during such Lease Year not caused by (i) or (ii) above, up to $1,000.00 per Lease Year on a cumulative basis, and Landlord shall be responsible for the amount of the repair which exceeds $1,000.00 per Lease Year on a cumulative basis, or the repairs during such Lease Year which exceed $1,000.00 per Lease Year on a cumulative basis, provided Tenant forwards to Landlord a check in the amount of $1,000.00 per Lease Year on a cumulative basis, or a check in such amount that when added to the previous repairs during such Lease Year will equal $1,000.00 per Lease Year on a cumulative basis, along with a true, complete and correct estimate for the repair which evidences a roof repair the cost of which exceeds $1,000.00 per Lease Year on a cumulative basis, or the cost of which when added to paid bills forwarded for repairs during such Lease Year exceeds $1,000.00 per Lease Year on a cumulative basis, with a request to make a roof repair. Landlord
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shall then have the option of authorizing the repair to be done by Tenant’s contractor, or otherwise repairing the roof, in either instance at Landlord’s expense. Tenant, at Tenant’s sole cost and expense, shall make all roof repairs as required by (i) and (ii) above.
B.Tenant also covenants and agrees to pay, as additional rent, so long as Landlord has provided at least thirty (30) days prior notice of such date (unless Tenant is receiving bills directly from the provider)prior to the date the same shall be due without penalty, any sewer rent, charge or any other tax, rent, levy or charge which now or hereafter is assessed, imposed, or a lien upon the Premises pursuant to law, order or regulation made or issued in connection with the use, consumption, maintenance or supply of water, water system or sewage connection or system.
Tenant shall be responsible for the charges set forth in this paragraph B assessed during the term of this Lease, or any extension thereof, whether or not the same are billed during the term. Such charges shall be prorated for any partial Lease Years. Tenant’s obligations hereunder shall survive the expiration or sooner termination of this Lease.
Tenant covenants and agrees that the WASTE SHALL BE LIMITED ONLY TO NORMAL LAVATORY WATER AND WASTE BUT SHALL EXPRESSLY EXCLUDE ALL INDUSTRIAL WATER AND WASTE. Tenant’s failure to abide by this covenant shall be a default under this Lease.
SECTION 4:  TAXES:
		(1)
	Tenant covenants and agrees to bear, pay and discharge any and all Real Estate Taxes (as hereafter defined) or PILOT Payments (as applicable) imposed, assessed or levied against the Premises, both land and building, during the term of this Lease, or any extension thereof, whether or not billed prior to the end of the term of this Lease. Tenant’s obligation hereunder shall survive the expiration or sooner termination of this Lease.

All Real Estate Taxes or PILOT Payments (as applicable) shall be due and payable, as additional rent, on a semiannual basis, thirty (30) days prior to the date Landlord is required to make said tax payment(s) to the taxing authority, without penalty, or at Landlord’s election, on a monthly basis, along with each payment of Base Rent, in accordance with the procedure set forth below.
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Landlord shall reasonably estimate the annual Real Estate Taxes and one-twelfth (1/12th) of the amount so estimated shall be due with each payment of Base Rent. Within one hundred twenty days after the end of the fiscal year, Landlord shall furnish Tenant with a statement which provides the actual Real Estate Taxes for the prior fiscal year. Thereupon an adjustment shall be made between Landlord and Tenant, with payment to Landlord, as additional rent, of any amounts due Landlord but not yet paid, or provided Tenant is not in default under the terms of this Lease reimbursement to Tenant for any amounts overpaid by Tenant. Estimated payments for each succeeding year shall be based upon the prior year’s payments. It is agreed that the intent of this paragraph is that Tenant shall have made tax payments to Landlord totalling the full amount due, prior to the date Real Estate Taxes are payable to the taxing authority.
Real Estate Taxes for partial Lease Years shall be pro-rated.
Tenant’s failure to make any Real Estate Tax payment as in this Lease provided within applicable notice and cure periods shall be a default under this Lease. In the event Tenant fails to make the payment(s) as required above, Landlord shall be entitled to interest, at the rate set forth in Section 16 hereof, on all sums due, from the date payment was due, until payment in full to Landlord, in addition to all other remedies available to Landlord for nonpayment of Base Rent. Tenant shall also be responsible for the payment of all interest, fines, late fees and penalties directly caused by reason of said non-payment by Tenant.
		(2)
	“Real Estate Taxes” shall mean, without duplication of any taxes that may be due under Section 3B above the sum of all taxes, real estate and real property taxes, assessments, special assessments, impositions, levies, including, but not limited to, town taxes, village taxes, school taxes, county taxes, Payments In Lieu of Taxes, etc., whether general, special, ordinary or extraordinary, foreseen or unforeseen, imposed, assessed or levied against or upon the Premises, land and building, and any rights or interests appurtenant to either, by Federal, State or local governmental authority, or any other taxing authority having jurisdiction thereover. Real Estate Taxes shall also include any taxes which may be assessed, levied or imposed in lieu of, in substitution for, or in addition or supplementary to such taxes. Real

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Estate Taxes shall also include all reasonable, out-of-pocket fees and expenses associated with the successful institution, prosecution, conduct and maintenance of any negotiations, protests, certioraris, settlements, actions or proceedings with respect to Real Estate Taxes or assessments and any taxes attributable to improvements of whatever kind and to whom belonging, situated or installed in or upon the Premises, whether or not affixed to the realty. If at any time during the term of this Lease the methods of taxation prevailing at the commencement of the term hereof shall be altered so that in lieu of, as an addition to, or as a substitute for the whole or any part of the taxes, assessments, levies, impositions, or charges now levied, assessed or imposed on real estate and the improvements thereon, there shall be levied, assessed, or imposed (i) a tax, assessment, levy, imposition or charge wholly or partially as capital levy or otherwise on the rents received therefrom, or (ii) a tax, assessment, levy, imposition or charge measured by or based in whole or in part upon the Premises and imposed upon Landlord, or (iii) a license fee or charge measured by the rents payable by Tenant to Landlord, then all such taxes, assessments, levies, impositions or charges, or the part thereof so measured or based, shall be deemed to be included within the term “Real Estate Taxes” for the purposes hereof. In no event shall “Real Estate Taxes” include federal, state or local income taxes; franchise, gift, transfer, excise, capital stock, estate or inheritance taxes; penalties and/or interest for late payments, other than caused directly by Tenant’s failure to timely pay the Real Estate Taxes.
		(3)
	Either party to this Lease shall promptly notify the other in writing of any change in the assessed value of the Premises of which the Landlord or Tenant is or becomes aware, in order to permit a timely contest of such change. Tenant shall have the right to initiate and prosecute, at its own cost and expense, including, but not limited to counsel fees, in Landlord’s name, proceedings to reduce assessments for Real Estate Taxes. Prior to initiating any such proceeding, Tenant shall give Landlord notice of its intention to initiate the same not less than (a) thirty (30) days prior to initiation or (b) such number of days (plus ten (10)days) as will permit the timely initiation of such a proceeding, whichever is less. Following such notice and within the notice period set forth in the preceding sentence, Landlord shall notify Tenant in writing, of its election to initiate such proceeding itself, or authorize

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Tenant to prosecute such proceeding in the Landlord’s name. Landlord shall have the right to initiate such proceedings in the event Tenant elects not to initiate the same or fails to timely notify Landlord. In the event either party elects to initiate any proceeding to reduce assessments of Real Estate Taxes and in the further event that either party receives any Real Estate Tax refund or refunds as a result thereof, such refund shall be payable to Landlord. Provided Tenant is not in default under the terms and conditions of this Lease, Landlord shall pay over to Tenant any such Real Estate Tax refunds, less counsel fees and/or other expenses relating to such proceeding, to the extent that such refunds relate to Real Estate Taxes theretofore paid by Tenant to Landlord, pursuant to this Section 4. In any event, Tenant agrees that it will not stipulate or settle any proceeding initiated by it unless the terms of such stipulation or settlement are approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.
SECTION 5:  WORK:
A.As a one-time, non-recurring obligation, Landlord agrees to: (i)  complete the shell of the building; (ii) pave and stripe the parking area, (iii) construct up to twelve thousand square feet of Landlord’s standard office; (iv) install heat in entire building, and (v) install an ESFR fire sprinkler system in the building, including pump therefor (the foregoing, the “Landlord’s Work”).
Tenant agrees to pay the entire cost and expense of the installation of air conditioning in the warehouse area (including electric, plumbing, piping and additional steel required for such installation). Upon installation said air conditioning shall remain with and not be removed from the building.
B.Tenant acknowledges and agrees that, except for the “Landlord’s Work” as set forth in paragraph A of this Section 5, Landlord has not offered to do, and shall not do or have any obligation to do, any work, alterations, improvements, decorations, additions, repairs, changes, etc., at, or to the Premises to make the same ready for Tenant’s occupancy. Subject to Landlord’s Work as set forth in paragraph A of this section 5, Tenant hereby accepts the Premises in “as-is” condition.
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C.If Landlord is unable to give possession of the Premises on the date of commencement of the term hereof, because the Premises has not been substantially completed to make the Premises ready for occupancy or if Landlord has not completed any work required to be performed by Landlord, or for any other reason, Landlord shall not be subject to any liability for failure to give possession on said date (except that Tenant shall have the right to terminate in accordance with Section 2F of this Lease)and the validity of the Lease shall not be impaired under such circumstances but, provided Tenant has not transacted business at the Premises, the Commencement Date shall be postponed and the payable hereunder shall be abated (provided Tenant is not responsible for Landlord’s inability to complete any work required) until after Landlord shall have given Tenant notice that the Premises are substantially completed. The provisions of this Section are intended to constitute “an express provision to the contrary” within the meaning of Section 223-a of the New York Real Property Law.
D.Improvements to be paid by Tenant: If, during the construction of the Premises, Tenant wishes to substitute any materials or alter any work to be done by Landlord, a “change-order” shall be issued by Landlord indicating such change or substitution and the cost that will be incurred by Tenant by reason thereof. Landlord shall be authorized to undertake such change or substitution only if Tenant approves such “change-order” in writing. In such event, the additional cost as set forth on each “change-order” shall be paid for in each case by Tenant one-half (1/2) upon execution of the “change-order” and the balance in accordance with the progress of the work set forth in the “change-order”. In the event Tenant fails to make the payments as in this paragraph provided Landlord shall be entitled to all remedies available in the event of nonpayment of Base Rent, including a late payment and administrative charge and interest as set forth in Section 16.
SECTION 6:  DELIVERY OF POSSESSION:
A.Possession of the Premises shall be deemed delivered to Tenant on the date which is the earlier to occur of: (i) the Commencement Date; and (ii) the date Tenant occupies all or any part of the Premises for the conduct of its business (as opposed to Early Access).
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B.After Tenant occupies the Premises, Tenant shall have no right to cancel this Lease, seek a diminution of rent, sue for damages or assert any contractual, legal or equitable remedy based either on a claim that Landlord failed to deliver possession in accordance with the terms of this Lease or based on a claim that the size, location, layout, dimensions or construction of the building or service area(s) (if any), sidewalks, parking or other areas (if any), or any other facilities to be furnished by Landlord, were not completed or furnished in accordance with the terms of this Lease (except as provided in the following sentence). If, within forty-five (45) days after the Commencement Date, Tenant delivers to Landlord written notice specifying the respects in which the Premises was not in the condition required hereunder upon the Commencement Date by reason of an obligation of Landlord pursuant to this Lease, then Landlord shall commence to remedy such punch-list items, at Landlord’s expense, within thirty (30) days of its receipt of such written notice and diligently prosecute such work to completion. Notwithstanding the foregoing, if after Tenant occupies the Premises and during the term hereof Landlord is in default under any of its Lease obligations, Tenant shall have such rights at law or in equity to which it may be entitled except that Tenant hereby waives any right to cancel or terminate this Lease or to seek a diminution of rent. Tenant’s occupancy of the Premises shall be deemed a certification to Landlord and the holder of any mortgage to which this Lease is, or shall thereafter be, subject and subordinate, that the Premises have been delivered to it in accordance with the terms of this Lease and that possession thereof has been fully and completely accepted by Tenant who is then in possession of the same (subject to any punch-list items as provided herein), and that the term of this Lease and the use of the Premises for business and the date for the payment of rent hereunder have all theretofore commenced and that the building, the parking area, and all other portions of the Premises have been completed in accordance with the requirements and terms of this Lease, and that there is not then any offset of any rental(s) nor any violation of any of the Lease terms on the art of the Landlord. The foregoing provisions shall be self-operative and no further instrument, letter or certificate shall be required by Landlord or any such mortgagee unless either Landlord or mortgagee shall deem same appropriate in which event, in confirmation of the foregoing, Tenant shall, without cost to Landlord, within ten (10) days of written request therefor execute, in writing, any reasonable instrument, letter and/or certificate containing the foregoing and such other like provisions in regard to the condition of the
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Premises, the building, the rental(s), term and date of the use of the Premises for business as shall be reasonably requested by Landlord and/or said mortgagee. In the event Tenant fails to execute and deliver such instrument within such ten days, Landlord shall give Tenant a second notice to execute and deliver such certificate. If Tenant fails to execute and deliver such certificate within five days of such second written request therefor, Tenant hereby constitutes and appoints Landlord the Tenant’s attorney-in-fact to execute any such instrument(s), letter(s), and/or certificate(s) for and on behalf of Tenant.
SECTION 7:  TENANT’S USES:
Tenant covenants that it shall use the Premises subject to and in accordance with all present and future rules, regulations, laws, ordinances, statutes, directions and requirements of all governmental and quasi-governmental authorities and the Fire Insurance Rating Organization and Board of Fire Insurance Underwriters and insurance companies issuing policies for the Premises, and any similar bodies, having jurisdiction thereof, and subject to the restrictions contained in Exhibit “C” and “D” annexed hereto, and provided the same complies with the certificate of occupancy for the Premises (a copy of which shall provided to Tenant upon receipt of the same), solely for warehousing, distribution, and offices in connection with a health, beauty and wellness on line retail business, and for other warehouse, distribution and office uses and for no other purpose. Tenant may not conduct any dangerous, hazardous, noxious or offensive use at the Premises. Notwithstanding anything to the contrary contained in this Lease, Tenant may maintain and use in the Premises certain commercially reasonable amounts of cleaning and/or office fluids and materials and other materials customarily used in connection with the conduct of Tenant’s business (collectively, the “Customary Materials”), provided that such Customary Materials are used and stored in compliance with all applicable laws, including Tenant, at Tenant’s sole cost and expense, obtaining any permits required therefor, and further provided, Tenant shall in all instances be responsible for such Customary Materials in accordance with Section 37 of this Lease. Tenant shall first obtain all governmental permits and licenses as may be required for Tenant’s use and occupancy of the Premises, and Tenant at all times shall promptly comply with all present and future laws, ordinances, requirements, orders, directions, rules and regulations of the federal, state, interstate, county, local and municipal governments and all other governmental authorities, agencies or regulatory bodies having a claim or jurisdiction over or affecting the Premises, or any part thereof, or the activities
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of Tenant, and all of their respective departments, bureaus and officials, and of the Board of Fire Underwriters, and all of the insurance companies writing policies affecting the Premises or any part thereof, whether such laws, ordinances, requirements, orders, directions, rules or regulations relate to structural alterations, changes, additions, improvements, replacements, restorations or repairs, either inside or outside, extraordinary or ordinary, foreseen or unforeseen, or otherwise, to or in and about the Premises, or any part thereof, or connected with the use, occupation and enjoyment thereof, or to alterations, changes, additions, improvements, replacements, restorations or repairs incident to or as a result of any use or occupation thereof, or otherwise, or any obligation arising from any restriction on title to the Premises, and whether the same are in force at the commencement of the term or may in the future be passed, enacted or directed. Tenant shall not do or permit anything to be done in or about the Premises, or bring or keep anything in the Premises that will in any way increase the normal premium rates or cause suspension or termination of the fire or other insurance upon the building. Should Tenant’s occupation of the premises jeopardize the Landlord’s insurance coverage, create additional risks or cause an increase in Landlord’s insurance premiums (as evidenced by reasonable documentation with respect thereto), Tenant shall be solely responsible for all costs associated therewith, including prompt payment, as additional rent the with the next monthly installment of Base Rent due, of all increased premiums, including those of any other occupants affected thereby. Tenant will not perform any act or carry on any practices that may injure the building or be a nuisance or menace to tenants of adjoining premises.  Tenant shall not permit open storage on the Premises detrimental to the appearance of a garden-type industrial development; and shall require loading and unloading and parking of cars for employees, customers and visitors, in connection with Tenant’s business to be done in the designated areas on the premises and not on any street.
In connection with Tenant’s proposed use of the Premises, upon request by Landlord Tenant shall deliver to Landlord:
		(i)
	a letter, on Tenant’s business stationery, for the Town of Islip Building Department, indicating the nature of Tenant’s business and the utilization of the Premises in square foot terms (for example: how many square feet will be used for warehouse, plant and/or office purposes).  This letter shall be addressed to Landlord.

		(ii)
	a letter on Tenant’s business stationery, for the Suffolk County Department of Health Services,

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responsive to the questions set forth on the specimen letter attached hereto as Exhibit “E”.
		(iii)
	a completed application (on the form submitted by Landlord) to the Long Island Power Authority for service to the Premises.

SECTION 8:  INSURANCE:
Throughout the term of this Lease and any extensions and renewals thereof, Tenant, at its own cost and expense, shall:
A.Provided and keep in force a comprehensive policy of liability insurance (including terrorism coverage) in the name of and for the benefit of Tenant, naming Landlord and any designee(s) of Landlord as additional insureds against any liability for injury to person(s) and/or property and death of any person(s) occurring in, at, on, or about the Premises, or any appurtenances thereto. Each such policy is to be written by one or more responsible insurance companies reasonably satisfactory to Landlord, licensed and admitted to do business in the State of New York, with a Best’s rating of A, or greater, and a financial size category of X, or greater, and the limits of liability thereunder shall not be less than $1,000,000 combined single limit bodily injury, death and/or property damage per occurrence, and a $2,000,000 aggregate limit and a $4,000,000 umbrella liability policy, or a combined single limit of $5,000,000 per occurrence for bodily injury, death and/or property damage, and against claims arising from contractual obligations. Policy will be endorsed to include Landlord and its assignees as additional insured.
	B.             (1)
	Keep the building and improvements and all furnishings and equipment on, at, in or appurtenant to the Premises at the commencement of the term, and/or thereafter erected thereon or therein (including all alterations, rebuildings, replacements, changes, additions and improvements)insured in an amount equal to the full replacement cost thereof against loss or damage from all risk perils and insurable risks, including fire, casualty (including rental income coverage) and all available additional extended coverage, including damage by lightning, hail, explosion, windstorm, tornado, cyclone, riot, disorder or civil commotion, smoke damage, terrorism, vandalism, malicious mischief (when obtainable and if not included in such

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extended coverage), and loss of rents. Such policy shall also include building ordinance coverage, including increased cost of construction and demolition cost.
		(2)
	Provide and keep in force business interruption insurance, in amount not less than the annual base rental plus the annual estimated Real Estate Taxes and insurance premiums.

		(3)
	If a sprinkler system shall be located in the Building, provide and keep in force sprinkler leakage insurance. In addition, Tenant shall obtain, at its sole cost and expense, a sprinkler supervisory, maintenance and alarm service contract for the sprinkler system at the Premises.

		(4)
	Provide and keep in force insurance coverage on all plate and other glass in the building.

		(5)
	Provide and keep in force a boiler and machinery policy for all machinery at the Premises including loss of rents coverage as well as electrical arching breakdown and mechanical breakdown .

		(6)
	Provide and keep in force such other insurance covering such risks and in such amounts as may from time to time be reasonably required by Landlord or any mortgagee against any other insurable hazards as Landlord can show at the time are commonly insured against in cases of premises similarly situated in the market area and/or such other insurance and in such amount and form as may from time to time be reasonably required by the holder of any mortgage(s) to which this Lease is subject and/or subordinate.

		(7)
	Tenant shall maintain insurance for the full replacement value of its own contents, inventory and trade fixtures.

C.Each party hereby releases the other party (which term as used in this subdivision includes the employees, agents, officers and directors of the other party) from all liability, whether for negligence or otherwise, in connection with loss covered by any insurance policy which the releasor carries with respect to the Premises or any interest or property therein or thereon (whether or not such insurance is required to be carried under this
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Lease), but only to the extent that such loss is collected under said insurance policies. Such release is also conditioned upon the inclusion in the policy or policies of a provision whereby any such release shall not adversely affect said policies or prejudice any right of the releasor to recover thereunder.  Each party agrees that its insurance policies, aforesaid, will include such a provision, if obtainable. If the inclusion of such provision requires an additional premium, the party for whose benefit the provision is obtained shall, on demand, pay such extra premium to the party carrying the insurance.
D.Unless otherwise requested by Landlord all insurance provided by Tenant under this Section 8, except Tenant’s contents and inventory insurance, shall be carried in favor of Landlord and the holder of any mortgage(s) affecting the Premises of which Tenant has been notified as additional named insured and loss payee, as their respective interests may appear. Such policies shall be in companies licensed and admitted to do business in the State of New York, as Landlord and/or any mortgagee shall approve, with a Best’s Rating of A or greater, and a financial size category of 10, or greater, and such policies shall provide that proceeds shall be payable to Landlord and, at Landlord’s request, any such mortgagee as their respective interests may appear. Tenant shall not carry separate insurance, concurrent in coverage and contributing in the event of loss with any insurance required to be furnished by Tenant under the provisions of this Section 8 if the effect of such insurance would be to reduce the protection or the payment to be made under said insurance required to be furnished by Tenant, unless Landlord and any mortgagee as aforesaid are included as additional insured with loss payable as hereinabove provided. Tenant shall promptly notify Landlord of the issuance of any such separate insurance and shall cause such policies to be delivered to Landlord, as hereinafter provided. Each policy of insurance to be carried by Tenant under this Lease shall be reasonably satisfactory to Landlord. Each policy evidencing the insurance to be carried by Tenant under this Lease shall contain a clause that such policy and the coverage evidenced thereby shall be primary with respect to any policies carried by Landlord, and that any coverage carried by Landlord shall be excess insurance.
E.With respect to any policies of insurance provided by Tenant under any provision of this Section 8, Tenant shall
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deliver to Landlord and/or any designee of Landlord, prior to occupancy of the Premises by Tenant, or at least ten (10) days prior to the time such insurance is first required to be carried by Tenant, and thereafter at least ten (10) days prior to the expiration of any such policy, either a duplicate original of such policy or a certificate of all policies procured by Tenant in compliance with its obligations hereunder together with evidence of payment therefor and including an endorsement which states that such insurance may not be cancelled except upon thirty (30) days written notice to Landlord and/or designee of Landlord (ten (10) days for nonpayment). At least twenty (20) days prior to the expiration of each policy, Tenant shall procure renewal insurance and within such period shall deliver to Landlord and/or any designee of Landlord the original renewal policy.
F.Property Loss or Damage and Indemnity:  Tenant shall forever indemnify and save Landlord harmless from and against (i) any and all liability, loss, damage, cost and expense, including counsel fees, arising from any injury to person or property of third persons occurring during the term of this Lease wholly or in part by reason of any negligence or willful misconduct of Tenant or of its employees, guests, invitees, agents, assigns or undertenants; and (ii) any other matter or thing arising or growing out of the occupation of the Premises by Tenant; and, at Landlord’s election, Tenant shall at its cost and expense defend any suit or proceeding instituted against Landlord by reason of any such injury or alleged injury to person or property or by reason of any other such matter or thing using counsel selected by Tenant. Notwithstanding the foregoing, Tenant shall not be required to indemnify Landlord for the negligent acts, omissions and/or willful misconduct of Landlord or of any agent or employee of Landlord. Landlord shall not be liable for any loss or damage which may be sustained by Tenant or any other person from any act or omission on the part of the Landlord or of any other tenant or agent or employee of any tenant or of Landlord unless caused by the negligence of Landlord.
Landlord shall forever indemnify and save Tenant harmless from and against (i) any and all liability, loss, damage, cost and expense, including reasonable counsel fees, arising from any injury to person or property of third persons occurring during the term of this Lease wholly or in part by reason of any negligence or willful misconduct of Landlord or of its employees or agents; and
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(ii)any work or other thing performed by or on behalf of Landlord at the Premises, the Building and/or the Property; and, at Tenant’s election, Landlord shall at its cost and expense defend any suit or proceeding instituted against Tenant by reason of any such injury or alleged injury to person or property or by reason of any other such matter or thing using counsel selected by Landlord. Notwithstanding the foregoing, Landlord shall not be required to indemnify Tenant for the negligent acts, omissions and/or willful misconduct of Tenant or of any agent or employee of Tenant.
G.Tenant shall pay all premiums and charges for all such policies maintained by Tenant, and if Tenant shall fail to make any such payment when due, or to carry any such policy, Landlord, at its option, may but shall not be obligated to, after written notice to Tenant and two business days notice to cure such failure, make such payment or carry such policy, and the reasonable out-of-pocket amounts paid by Landlord, with interest thereon from the date of payment, shall become due and payable by Tenant as additional rent within thirty (30) days of written notice of such expenditure, together with supporting documentation with respect thereto. Payment by Landlord of any such premiums or the carrying by Landlord of any such policies shall not be deemed to waive or release the default of Tenant with respect thereto, or the right of Landlord to take such action as may be permissible hereunder as in the case of default in the payment of Base Rent.
H.Tenant shall not violate or permit to be violated, any of the conditions or provisions of any such policy maintained by Tenant, and Tenant shall perform and satisfy in all material respects the requirements of the companies writing such policies that at all times companies licensed and admitted by the State of New York reasonably satisfactory to Landlord or any mortgagee shall be willing to write and/or continue such insurance.
I.Tenant and Landlord shall cooperate in connection with the collection of any insurance monies that may be due in the event of a loss and Tenant shall execute and deliver to Landlord such proofs of loss and other instruments which may be required for the purpose of obtaining the recovery of any insurance monies.
J.Tenant agrees that during the term of the Lease, or any extension thereof, the limits of the insurance required
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by this Section may be increased if reasonably necessary to afford Landlord the same protection as provided to Landlord at the commencement of the term of this Lease. In no event shall the limits of insurance be reduced below what they were at the commencement of the term.
SECTION 9:  DESTRUCTION:
A.If during the term of this Lease, or any extension thereof, any portion of the Premises or any building, structure or improvement thereof, thereon or therein, or appurtenant thereto, is damaged or destroyed by fire or other casualty as a result of a peril insured against pursuant to this Lease, Tenant shall forthwith give notice thereof to Landlord and then Landlord shall thereafter commence promptly, after adjustments of insurance, and building weather permitting, at its own cost, to repair, replace and rebuild the Premises, but to the extent only of proceeds received by Landlord from insurance and to the extent only of Landlord’s work prior to occupancy of the Premises by Tenant.  In no event shall Landlord be obligated to expend a greater sum for the restoration of the Premises than the sum Landlord received as insurance proceeds due to said damage or destruction. Notwithstanding anything to the contrary, Landlord will commence making repairs immediately following such damage or destruction provided that Tenant advances the necessary funds to Landlord to cover the cost thereof.  If Tenant, after obtaining Landlord’s permission, makes the necessary repairs, Landlord will make reimbursement to Tenant of the actual cost thereof, not to exceed the insurance proceeds received by Landlord.  Nothing in this paragraph shall require Landlord to restore, replace or repair any inventory, furniture, chattels, signs, contents, fixtures, (including trade fixtures) or personal property of Tenant located, on, in, or about the Premises, or which serve the Premises or rebuild the Premises in the condition and state that existed before any such damage or destruction.
B.Notwithstanding anything to the contrary contained in this Lease, in the event of any destruction of the building to the extent of more than fifty (50%) percent of the cost of total replacement thereof, at a time when less than two (2) years remain in the term hereof, Landlord may elect to terminate this lease on thirty (30) days notice to Tenant, given at any time within sixty (60) days after such damage or destruction, and in such case all proceeds shall be paid and belong to Landlord and upon such termination neither party
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shall be thereafter under any obligation to the other for any liability under this Lease which shall thereafter accrue.
C.Except to the extent Landlord receives rent insurance as hereinabove provided, neither the rent payable by Tenant nor any of Tenant’s other obligations under the other provisions of this Lease shall be affected by any damage to or destruction of the Premises, and Tenant expressly waives such additional rights as it might otherwise have under any law or statute by reason of damage or destruction of the Premises by fire or any other cause.
D.If all or any portion of the Premises shall be damaged or rendered untenantable by fire or other casualty, and Landlord has not terminated this Lease pursuant to Subsection (B) and Landlord has not substantially completed the making of the required repairs and restored and rebuilt the Premises and/or access thereto within six (6) months from the date of receipt of the insurance proceeds of insurance, which date is subject to extension in accordance with Section 29 of this Lease and by reason of Tenant Delay, Tenant may serve notice on Landlord of its intention to terminate this Lease, and, if within thirty (30) days thereafter Landlord shall not have substantially completed the making of the required repairs and restored and rebuilt the Premises, this Lease shall terminate on the expiration of such thirty (30) day period as if such termination date were the Expiration Date, and, provided Tenant is not in default under the terms and conditions of this Lease, any prepaid portion of Base Rent and additional rent for any period after the date of such fire or other casualty shall be refunded by Landlord to Tenant.
SECTION 10:  REPAIRS, MAINTENANCE AND ALTERATIONS:
A.Tenant shall at all times, during the term, or any extension term, and at its own cost and expense put, keep, repair, restore, replace and maintain in thorough repair and good, safe, clean and substantial order and condition, the Premises, all buildings and other portions thereof, all glass therein, all equipment therein, and all appurtenances thereto, both inside and outside, nonstructural (but not structural unless caused by Tenant, its officers, employees, agents, employees, contractor and the like), extraordinary and ordinary, foreseen or unforeseen, at the commencement of the term or thereafter erected thereon or therein and howsoever the necessity or desirability thereof may occur, normal wear, tear and obsolescence excepted.  However, Landlord shall, at all times during the term and at its own cost and expense, replace
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or make all “Structural Repairs” as provided in Section 3A4 of this Lease, except those necessitated by the negligence, gross negligence or willful conduct of Tenant, its officers, employees, agents, servants and the like. Tenant shall use all reasonable precaution to prevent waste, damage or injury to the Premises, or any part thereof. Tenant shall also, at its own cost and expense, put, keep, repair, restore, replace and maintain in thorough repair and good order and safe condition and free from dirt, snow, ice, rubbish and other obstructions or encumbrances, any sidewalks, parking fields and curbs which are part of, in front of, and of or adjacent to the Premises, normal wear, tear and obsolescence excepted.
Tenant shall refrain from committing, or suffering any waste upon the Premises, or any nuisance, or any other act or thing which may disturb the quiet enjoyment of any other tenant in the Heartland Business Center. Tenant shall be responsible for all pest control and shall employ an exterminator to visit the Premises on a commercially reasonable basis. Tenant shall make all ordinary repairs, replacements and restorations, as needed (except as provided in Section 9A), including without limitation by their inclusion, interior and exterior repainting, replacement of glass injured or broken; and of floor and wall covering worn or damaged; keeping roofs and exterior windows and doors water tight, and all plumbing, lighting, heating, air-conditioning, and other utility systems in good operating condition. Tenant shall keep the Premises properly painted and decorated; Tenant shall paint all exterior trim and all exposed metal beams and girders as reasonably required. Tenant shall notify Landlord in writing For Landlord’s written approval should any penetrations or additional loads to the roof be contemplated, which approval may be withheld for any reason notwithstanding anything in this Lease, except that Tenant may install air conditioning units on the roof of the building provided Tenant shall be responsible for all structural support, structural repairs and roof repairs required by reason of such installation.
Tenant shall maintain substantially as presented to Tenant all landscaped and planted areas including but not limited to lawns, trees, and shrubs, on the Premises, and keep in good repair all parking and loading areas in use, clean and free of snow and ice, and the exterior of the Premises neat and clean.
Tenant shall indemnify and save harmless Landlord against and from all costs, expenses, liabilities, losses, damages, suits, fines, penalties, claims and demands, including reasonable counsel fees, because of Tenant’s failure to comply with the
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foregoing and Tenant shall not call upon Landlord for any disbursement or outlay whatsoever in connection therewith and hereby expressly releases and discharges Landlord of and from any liability therefor.
B.Except as otherwise specifically set forth in this Lease, Tenant shall not make any structural alterations, improvements, and/or additions to the Premises or any part thereof without Landlord’s prior written consent.
Tenant may make non-structural changes to the Premises without Landlord’s consent, provided in all instances that: (i) Tenant shall be responsible for all required permits for such work, and (ii) at the expiration or sooner termination of the term of this Lease Tenant shall remove any such changes and restore the Premises to the condition existing prior to such change.
SECTION 11:  COVENANT AGAINST LIEN:
Tenant shall not do any act, or make any contract which shall create or be the foundation for any lien or other encumbrance upon any interest of Landlord in any portion of the Premises.  If, because of any act or omission (or alleged act or omission) of Tenant, any mechanic’s or other lien, charge or order for the payment of money or other encumbrance shall be filed against Landlord and/or any portion of the Premises (whether or not such lien, charge or encumbrance is valid or enforceable as such), Tenant shall, at its own cost and expense, cause same to be discharged of record or bonded within thirty (30) days after notice to Tenant of the filing thereof; and Tenant shall indemnify and save harmless Landlord against and from all costs, liabilities, suits, penalties, claims and demands, including reasonable counsel fees resulting therefrom.  If Tenant fails to comply with the foregoing provisions within the time period provided, Landlord shall have the option of discharging or bonding any such lien, charge, order or encumbrance, and Tenant agrees to reimburse Landlord for all reasonable, out-of-pocket costs, expenses, reasonable attorneys fees, and other sums of money in connection therewith (as additional rental) with interest thereon, at the rate specified in Section 16, promptly upon demand. All materialmen, contractors, artisans, mechanics, laborers and any other persons now or hereafter contracted with Tenant for the furnishing of any labor, services, materials, supplies or equipment with respect to any portion of the Premises at any time from the date hereof until the end of the term of this Lease, or any extension thereof, are hereby charged with notice that they must look exclusively to Tenant to obtain payment for same. Nothing in this Lease contained shall be construed in any way as constituting the consent or request of the Landlord, expressed or
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implied, to any contractor, subcontractor, laborer or materialmen for the performance of any labor or the furnishing of any materials for any improvement, alteration or repair of the Premises, nor as giving any right or authority to contract for the rendering of any services or the furnishing of any materials that would give rise to the filing of any mechanic’s liens against the Premises.
SECTION 12:  CONDEMNATION:
A.If the whole of the Premises shall be taken for any public or quasi-public use under any statute or by right of eminent domain, or by private purchase in lieu thereof, then this Lease shall automatically terminate as of the date that title shall be taken.  If  twenty (20%) percent or more of the building shall be so taken, then Landlord and Tenant shall each have the right to terminate this Lease on thirty (30) days written notice to the other given within sixty (60) days after the date of such taking.
B.If any part of the building shall be so taken and this Lease shall not terminate or be terminated under the provisions of Paragraph “A” hereof, then the Base Rent shall be equitably apportioned according to the building floor space so taken and Landlord shall make all necessary repairs or alterations to the Premises so as to constitute that portion of the building and other improvements on the Premises not taken as a complete architectural unit and/or as nearly similar in character as practicable to what they were before the taking.
C.All compensation awarded or paid upon such a total or partial taking of the Premises shall belong to and be the property of Landlord without any participation by Tenant; provided, however, that nothing contained herein shall be construed to preclude Tenant from prosecuting any claim, directly against the condemning authority in such condemnation proceedings for loss of business, and/or depreciation to, damage to and/or cost of removal of, and/or for the value of stock and/or trade fixtures, furniture and other personal property belonging to Tenant; provided, however, that no such claim shall diminish or otherwise adversely affect Landlord’s award nor any award(s) of the holder(s) of any and all mortgages affecting the Premises. In no event shall Tenant make any claim for the value of the unexpired term of the Lease.
SECTION 13:  ACCESS TO PREMISES:
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A.Landlord and its designees shall have the right, but shall not be obligated to, upon forty-eight hours prior notice (which notice may be by telephone), to enter upon the Premises at all reasonable hours (and in emergencies at all times without notice but with notice provided as soon as practicable thereafter):  (1) to inspect the same, (2) to make repairs, additions or alterations to the Premises or the building or any property owned or controlled by Landlord as required or permitted hereunder, and (3) for any lawful purpose as permitted hereunder.
B.If, at reasonable hours and following prior notice (as provided herein), admission to the Premises for the purpose aforesaid cannot be obtained, or if at any time an entry shall be deemed reasonably necessary for the inspection or protection of the property or for making any repairs, whether for the benefit of Tenant or not, Landlord or Landlord’s agents or representatives may enter the Premises by lawful means, Without rendering Landlord or Landlord’s agent or representative liable to any claim or cause of action for damages by reason thereof, and accomplish such purpose. Landlord agrees to use commercially reasonably efforts to minimize damage to Tenant’s property and business during such entrance. The provisions contained in this Section 13 are not to be construed as an increase of Landlord’s obligations under this Lease; it being expressly agreed that the right and authority hereby reserved does not impose nor does Landlord assume by reason thereof, any responsibility or liability whatsoever for the repair, care or supervision of the Premises, or any building, equipment or appurtenance on the Premises.
C.For a period commencing six (6) months prior to the end of the term, or any extension thereof, Landlord may upon forty-eight hours prior notice (which notice may be by telephone) have reasonable access to the Premises for the purpose of exhibiting the same to prospective tenants and to post any “To Lease” signs upon the Premises.
D.At any time during the Term, Tenant shall have the right to designate area(s) of the Premises as “Secure Areas” for the keeping of proprietary or other confidential information. Landlord may not enter or access any such “Secure Areas” without being accompanied by a representative of Tenant.
SECTION 14:  ASSIGNMENT AND SUBLETTING:
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A.Without the Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, and subject to this Section 14, neither the Tenant nor the Tenant’s legal representatives or successors in interest by operation of law or otherwise (except as set forth in Paragraph “C” of this Section 14) shall directly or indirectly assign, mortgage, pledge, transfer, hypothecate or encumber this Lease. Without the Landlord’s prior written consent, and subject to this Section 14, neither Tenant nor Tenant’s legal representatives shall directly or indirectly sublet the Premises, in whole or in part, or permit the same or any portion thereof to be used or occupied by others (except as set forth in Paragraph “C” of this Section 14). Subject to the terms and conditions of this Lease Tenant may sublet less than the entire Premises, provided, however, at no time shall there be more than two (2) occupants in total (including Tenant) at the Premises at any time. Notwithstanding the foregoing, Tenant has advised Landlord that Greenpharm Ventures LLC., an affiliate of Tenant, may transact its on line retail business at the Premises and provided Greenpharm Ventures LLC has obtained and is maintaining all required governmental approvals for the operation of its business, Landlord consents to such operation by Greenpharm Ventures LLC. at the Premises. 
	B.          (1)
	In the event of a subletting pursuant to this Section 14, and the rental income under such sublease exceeds the rental payable by Tenant under this Lease, such rent differential shall be for the account of the Landlord, and Tenant covenants to pay Landlord such differential in equal monthly installments, together with the rental payable under this Lease. The aforesaid payments shall be collectible as additional rent.

		(2)
	Anything to the contrary notwithstanding, should Tenant desire to assign this Lease or sublet the Premises it shall give written notice of its intention to do so to Landlord forty (40) days or more before the effective date of such proposed subletting or assignment, which notice shall include fully executed copies of all proposed documentation in connection with the proposed assignment or subletting.  Landlord may, at any time within thirty (30) days after the receipt of such notice and documentation from Tenant, cancel this Lease by giving Tenant written notice of its intention to do so,

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in which event such cancellation shall become effective twenty (20) days after its receipt by Tenant, with the same force and effect as if such cancellation date were the date originally set forth as the expiration date of the term of this Lease.  In the event Landlord cancels this Lease Landlord may assign this Lease or sublet the Premises to Tenant’s proposed assignee or sublessee without any liability whatsoever to Tenant.
C.Subparagraphs “A” and “B” of this Section 14 to the contrary notwithstanding, Tenant shall have the right to assign this Lease or sublet the entire Premises without Landlord’s consent, provided that the assignee or sublessee is an entity which is an affiliate, parent or wholly owned subsidiary of Tenant, or to an entity to which it sells or assigns all or substantially all of its assets or equitable ownership interest, or which may, as a result of a reorganization, merger or consolidation succeed to the entire business carried on by Tenant at such time, provided that in all instances the assignee shall have a tangible net worth of at least fifteen million ($15,000,000) dollars as evidenced by certified financial statements delivered to Landlord, and further provided the following conditions are strictly and fully complied with:
		(1)
	The assignment must be, respectively, of all of Tenant’s leasehold interest and of the entire Premises and shall also transfer to the assignee all of the Tenant’s rights in and interest under this Lease including the security deposited hereunder.

		(2)
	At the time of such assignment or subletting this lease must be in full force and effect without any breach or default thereunder on the part of Tenant, continuing beyond the period provided for curing same.

		(3)
	The assignment or subletting must be solely for the same purposes and uses permitted by this Lease.

		(4)
	The assignee (or sublessee, if sublease is for a term less than the then remaining term of this Lease) shall assume, by written instrument, the due performance of all Tenant’s obligations under the Lease including any accrued obligations at the time of the assignment or subletting.

		(5)
	A copy of the assignment or sublease and the original assumption agreement (both in form and content

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satisfactory to Landlord) fully executed and acknowledged by the assignee together (if a corporation) with a copy of a properly executed corporate resolution authorizing such assumption agreement, shall be delivered to Landlord within ten (10) business days from the effective date of such assignment or subletting.
		(6)
	Such assignment and/or subletting shall be upon and subject to all the provisions, terms, covenants and conditions of this Lease and Tenant (and any assignee(s) and sublease(s)) shall continue to be and remain liable thereunder.

		(7)
	Tenant shall reimburse Landlord for Landlord’s reasonable attorney’s fees for examination of and/or preparation of any documents in connection with such assignment, not to exceed $1,500 per request.

		(8)
	Subject to the foregoing, Tenant may not effect a transaction the result of which is that this Lease becomes an asset of a person, firm or corporation having no bona fide and ongoing business relationship to Tenant.

D.The transfer of more than forty nine and 50/100 (49.50%) percent of any class of capital stock or the voting stock, or an increase in the amount of issued and/or outstanding shares of stock of any corporate tenant, whether in connection with a corporate merger or consolidation or by operation of law, or otherwise, whether in a single transaction or a series of transactions, shall be deemed an assignment within the meaning of this Section 14 of the Lease and shall require Landlord’s prior written consent (except in connection with a transaction in accordance with subsection (C) of this Section 14).
E.Any consent by Landlord to any act of assignment or subletting shall be held to apply only to the specific transaction thereby authorized. Such consent shall not be construed as a waiver of the duty of Tenant, or the legal representatives or assigns of Tenant, to obtain from Landlord consent to any other or subsequent assignment or subletting, or as modifying or limiting the rights of Landlord under the foregoing covenant by Tenant not to assign or sublet without such consent (not to be unreasonably withheld, conditioned or delayed) .
F.If Landlord does not deny (with a reasonable basis) Tenant’s request for an assignment or sublet, such consent shall be given subject to and provided Tenant strictly complies with
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items (1) - (8) of subsection “C” of this Section 14.
SECTION 15:  TENANT’S ADDITIONAL AGREEMENT:
A.Affirmative Obligations: Tenant agrees, at its own cost and expense, to:
		(1)
	Keep Premises Clean: keep the Premises (including without limitation, exterior and interior portions of all windows, doors and all other glass) in a neat and clean condition;

		(2)
	Keep Premises Attractive: maintain the exterior of the Premises and any of Tenant’s personal property therein visible from the exterior of the Premises as an attractive area in accordance with the general character of the Premises;

		(3)
	Comply With Laws: promptly comply with all present and future laws, ordinances, rules, directions and regulations of governmental or quasi-governmental authorities (including zoning laws and building codes) and Insurance Underwriters and insurance companies writing policies for the Premises, and any other organization exercising similar functions, affecting the Premises, whether same require changes or alterations to the Premises of a structural or nonstructural, foreseen or unforeseen, exterior or interior, or ordinary or extraordinary, nature or otherwise; provided, however, that Tenant shall not be required to perform any structural changes or alterations unless same are necessitated as a result of (a) the negligence or willful misconduct of Tenant, its officers, employees, agents, servants, invitees, licensees, contractors and the like (b) any alterations, installations or changes performed within the Premises by Tenant, (c) Tenant’s failure to comply with any of its obligations pursuant to the terms of this Lease, (d) Tenant’s business, or (e) Tenant’s particular manner of use of the Premises;

		(4)
	Labor Regulations:  take no action which would violate Landlord’s union contracts, if any, affecting the Premises;

		(5)
	Garbage: handle and dispose of all rubbish, garbage and waste from Tenant’s operations in accordance with all rules and regulations reasonably established by Landlord

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and not permit the accumulation (unless in concealed metal containers), or burning, or any rubbish or garbage in, on or about any part of the Premises.
For the first three (3) months of this Lease only, the Landlord shall contract for the disposal of all non-hazardous and non-toxic rubbish and garbage generated from Tenant’s normal business operation at the Premises, at no cost to Tenant. Thereafter, Tenant shall be fully responsible, at its cost and expense, for removal of all rubbish and garbage at the Premises.
		(6)
	Outside Areas: maintain and keep in a clean and presentable manner all lawns, shrubbery and plant areas including weeding and cutting of lawns at least once a week between April 15 and November 15 in each year of the term.

	B.
	Negative Obligations: Tenant agrees that it shall not at any time without first obtaining Landlord’s consent:

		(1)
	Not Change Exterior Architecture:  change (whether by alteration, replacement, rebuilding or otherwise) the exterior color and/or architectural treatment of the building or any part thereof;

		(2)
	Not Use Sidewalks:  use, or permit to be used, the sidewalk adjacent to, or any other space outside the building for display, sale or any other similar undertaking;

		(3)
	No Loud Speakers:  use or permit to be used, any advertising medium and/or loud speaker, and/or sound amplifier, and/or radio or television broadcast which may be heard outside the building;

		(4)
	Not Misuse Plumbing Facilities: use the plumbing facilities for any purpose other than for which they were constructed, or dispose of any garbage or other foreign substance therein, whether through the utilization of so-called “disposal” or similar units, or otherwise;

		(5)
	No Liens: subject any fixtures, furnishings or equipment in or on the Premises which are affixed to the realty, to any mortgages, liens, conditional sales agreement, security interests or encumbrances;

		(6)
	Not Damage the Premises: perform any act or carry on any practice which may damage, mar or deface the Premises;

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		(7)
	Not Exceed Floor Loads: place a load on any floor of the building exceeding the floor load per square foot which such floor was designed to carry, or install, operate or maintain therein any heavy item or equipment except in such manner as to achieve a proper distribution of weight;

		(8)
	Not Exceed Electrical Load: install, operate or maintain in the Premises any electrical equipment which will overload the electrical system therein, or any part thereof, beyond its reasonable capacity for proper and safe operation as reasonably determined by Landlord in light of the overall system and requirements thereof, or which does not bear underwriters’ approval;

		(9)
	Not Permit Odors, Etc.:  suffer, allow or permit any offensive or obnoxious vibration, noise, odor or other undesirable effect to emanate from the building and/or Premises;

		(10)
	Not Cause Injury, Etc.: use or occupy the building or do or permit anything to be done thereon in any manner which will cause structural injury to the same, or which would constitute a public or private nuisance or which will violate any present or future laws, rules, regulations, ordinances, directions or requirements (ordinary or extraordinary, foreseen or unforeseen) of the federal, state, county, local or municipal governments, or of any department, subdivisions, bureaus or offices thereof, or of any other governmental, public or quasi-public authorities, including insurance companies writing policies for the Premises, now existing or hereafter created, having jurisdiction in the Premises.

SECTION 16:  INTEREST RATE:
Whenever this Lease refers to “interest” or Interest Rate, same shall be computed at a rate equal to fifteen (15%) percent or the highest legal rate. If, however, payment of interest at such rate by Tenant (or by the Tenant then in possession having succeeded to the Tenant’s interest in accordance with the terms of this Lease) should be unlawful, i.e., violative of the usury statutes or otherwise, then “interest” shall, as against such party, be computed at the maximum lawful rate payable by such party, and any payments received which may be in excess of the legal rate shall be applied towards a reduction of the principal amount owing so as to reduce the interest payments to a rate not violative of the usury laws.
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SECTION 17:  EASEMENT FOR PIPES:
Tenant shall permit Landlord or its designees to erect, use, maintain and repair pipes, cables, plumbing, vents and wires, in, to and through the building and/or Premises, as and to the extent that Landlord may now or hereafter deem to be necessary or appropriate for the proper operation and maintenance of the building or any other portion of the Premises, provided such items shall be attached to the walls of the Premises or be placed above fifteen (15’) feet above the floor of the building and further provided that Landlord shall use commercially reasonable efforts to minimize interference with the conduct of Tenant’s business within the Premises and ensure that the rentable square footage of the Premises is not reduced as a result thereof. All such work shall be done, so far as practicable, in such manner as to avoid unreasonable interference with Tenant’s use of the Premises but shall not be considered a constructive eviction.
SECTION 18:  UTILITIES:
Landlord shall make utilities available to the Premises but Landlord shall not be required to furnish any utilities, facilities or services to the Premises, including but not limited to management and janitorial services, heat, water, sewer, power, telephone or other communication service, gas or electric, and shall not be liable for any failure of supply of any such utility service, unless such failure is caused by the negligence or willful misconduct of Landlord or its agents or employees. Tenant shall pay promptly, as and when the same become due and payable, all water rents, rates and charges, all sewer rents and all charges for electricity, gas, heat, steam, hot and/or chilled water and other utilities directly to the utility company and shall indemnify Landlord against any liability or damages on such account.
During the full term of the Lease, Tenant shall have the full responsibility of repairing, replacing, restoring and maintaining the heating and air conditioning systems. Landlord agrees that Tenant shall have the benefit of all warranties delivered for the heating, ventilation and air conditioning system. Tenant shall maintain a full service maintenance contract, in form and content satisfactory to Landlord, for the life of the Lease, covering the replacement of all parts, and the cost of labor and preventative maintenance to be done on at least a quarterly basis for the heating and air conditioning system.
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Tenant shall deliver a copy of said maintenance contract to Landlord within ten (10) business days of occupancy of the premises. In the event Tenant fails to obtain said maintenance contract, Landlord may, but shall not be obligated to and without relieving Tenant of its obligation to do so, obtain said contract on behalf of Tenant.  The total reasonable out-of-pocket cost thereof shall be payable by Tenant within thirty (30) days of written notice, together with reasonable supporting documentation be payable as additional rent.  Landlord shall be entitled to all remedies available in the event of nonpayment of Base Rent in the event Tenant fails to make the payments as in this paragraph provided.
SECTION 19:  SIGNS:
A.Tenant shall not, without Landlord’s prior written consent, place or install any sign on the roof nor on any exterior wall of the building (including, without limitation, both the interior and exterior surfaces of windows and doors) nor on any part of the land except that Tenant may install and maintain, at its own cost and expense, including payments for permits and the sign, a single, flat faced sign on the front of the building subject to the approval of Landlord as to dimensions, content, material, location and design, which consent shall not be unreasonably withheld, conditioned or delayed. The sign shall be substantially similar to the type of sign presently permitted in the Heartland Business Center. Tenant agrees that the sign shall be union made and shall not be installed on the Premises or the building until all approvals and permits are first obtained and copies thereof delivered to Landlord together with evidence of payment for any fees pertaining to Tenant’s sign. Tenant shall procure appropriate Workmens’ Compensation and liability insurance policies covering the installation and maintenance of any sign, and all such policies or certificates of such policies shall be delivered to Landlord prior to the commencement of any work.
In the event Landlord or Landlord’s representative shall deem it necessary to remove such sign in order to make any repairs, alterations or improvements in and upon the Premises, or the building, Landlord shall have the right to do so, provided the same be removed and replaced at Tenant’s expense, whenever the said repairs, alterations or improvements shall be completed. At the expiration or sooner termination of this Lease, Tenant shall, at its sole
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cost and expense, remove its sign from the building and repair, replace and restore the Premises to the condition existing prior to the placement of the sign, reasonable wear and tear excepted.
B.As used in this Section 19, the word “sign” shall be construed to include any placard, light or other advertising symbol or object irrespective of whether same be temporary or permanent. The single identification sign erected on the front of the building shall not project above the bottom of the building parapet wall. Such type signs as “Help Wanted”, “For Sale”, To Let” or any advertising signs are specifically excluded from being displayed on any part of the Premises or its adjacent land on a temporary or permanent basis.
SECTION 20:  not used
SECTION 21:  NON-LIABILITY OF LANDLORD:
Landlord and Landlord’s agents and employees shall not be responsible or liable for, and Tenant waives all claims for, loss or damage that may be occasioned to Tenant’s business or damage to person or property sustained by Tenant resulting from any accident or occurrence (unless caused by or resulting from the negligence or willful misconduct of Landlord, or Landlord’s employees, or agents other than accidents or occurrences against which Tenant is insured) in or upon the Premises or the building, including, but not limited to, claims for damage resulting from: (i) any equipment or appurtenances becoming out of repair (unless it is a Structural Repair that is Landlord’s obligation pursuant to the terms of this Lease); (ii) injury done or occasioned by wind; (iii) any defect in or failure of plumbing, heating or air conditioning equipment, electric wiring or installation thereof, gas, water, fire, and steam pipes, stairs, porches, railing or walks; (iv) broken glass; (v) the backing up of any sewer pipe or downspout; (vi) the bursting, stoppage, leaking or running of any tank, tub, washstand, water closet, waste pipe, drain or other pipe or tank in, upon or about the building or the Premises; (vii) the escape of steam or hot water; (viii) water, snow or ice being upon or coming through the roof, skylight, trapdoor, stairs, doorways, show windows, walks or any other place upon or near the building or the Premises or otherwise; (ix) the falling of any fixture, plaster, tile or stucco; and (x) any act, omission or negligence of other tenants, licensees or of any other persons or occupants of
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the building or of adjoining or contiguous buildings or of owners of adjacent or contiguous property, or any part thereof.
Landlord shall not be responsible or liable to Tenant for any loss or damage that may be occasioned by the acts or omissions of persons occupying any space adjacent to or adjoining the Premises, or any part thereof, or for any loss or damage resulting to Tenant or its property from water, gas steam, fire, or the bursting, stoppage or leaking of sewer pipes, provided such loss or damage is not occasioned by the negligence or willful misconduct of Landlord, or its employees, or agents.
SECTION 22:  INDEMNITY:
Tenant agrees to indemnify, hold harmless and defend Landlord, its officers, directors, shareholders, partners and spouses, and its successors, assigns, agents and employees, from and against, and reimburse such indemnified person for, any and all reasonable costs, expenses, liabilities, causes of action, claims, penalties, fines or demands, of any nature whatsoever (including without limitation all third party public liability and property damage claims) which may be imposed on, incurred by or asserted against Landlord, its officers, directors, shareholders, partners and spouse(s), and its successors, assigns, agents or employees, including any or all liabilities, obligations, damages, costs, remedial costs, disbursements and expenses (including without limitation, administration, and reasonable attorneys’ fees and disbursements, including fees in connection with appeals and enforcement of this indemnity) of Tenant and Landlord in any way relating to or arising, or alleged to arise out of this Lease, the Premises, the possession, use, enjoyment or occupancy of all or any portion of the Premises by Tenant, or related thereto, including the negligence or willful misconduct of Tenant, or any concessionaire, or subtenant or their respective licensees, servants, agents, employees and contractors, including without limitation those in any way relating to or arising or alleged to arise out of, for, or in connection with (a) any claims based on strict liability in tort and any claim, penalty, or charge, or any asserted or threatened claim that Tenant polluted or contaminated the environment in any way or failed to obtain or comply with any and all environmental permits, laws, regulations, ordinances, order, and any other applicable environmental requirement in effect now or in the future in connection with Tenant’s operations or occupancy, (b) any injury whatsoever to or the death of any person or any damage
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whatsoever to or loss of property in, on, about or near the Premises, or any part thereof, including the sidewalks adjoining the same, or in any manner growing out of or in connection with, or alleged to grow out of or in connection with, the use, or business conducted at the Premises, replacement, adaptation or maintenance of the Premises, or of any other land and interests in land used or occupied in connection with the Premises (whether owned or under the control of Landlord or Tenant), or resulting or alleged to result from the condition of any thereof; (c) any violation, or alleged violation, of any provision of this Lease (except by Landlord) or of any agreement, law, rule, regulation, ordinance or restriction, affecting or applicable to the Premises or Tenant’s activities at the Premises, or the leasing, use, replacement, adaptation or maintenance by Tenant thereof, or (d) any default under the Lease by Tenant which would cause a default under any mortgage (except as to the payment of principal or interest thereunder) beyond applicable notice and cure periods. Nothing in this Section 22 shall be construed to make Tenant liable hereunder for matters resulting from the willful misconduct or negligence of the party otherwise to be indemnified hereunder or resulting from acts unrelated to the Lease, possession or use of the Premises. In case any action, suit or proceeding is brought against Landlord, its successors or assigns, agents or employees, in connection with any claim indemnified against hereunder, Landlord or mortgagee may and Tenant will, at Tenant’s reasonable expense, diligently resist and defend such action, suit or proceeding, or cause the same to be resisted or defended by counsel selected by Tenant and reasonably approved by Landlord and, in the event of any failure by Tenant to do so, Tenant shall pay all reasonable, out-of-pocket costs and expenses (including without limitation reasonable attorney’s fees and expenses) incurred by Landlord in connection with such action, suit or proceeding. Tenant and Landlord each agree to promptly notify each other, in writing, of any claim or liability hereby indemnified against, provided the failure of either party to give prompt written notice to the other shall not relieve either party of liability hereunder.
Landlord agrees to indemnify, hold harmless and defend Tenant, its officers, directors, shareholders, partners and spouses, and its successors, assigns, agents and employees, from and against, and reimburse such indemnified person for, any and all reasonable costs, expenses, liabilities, causes of action, claims, penalties, fines or demands, of any nature whatsoever (including without limitation all third party public liability and property damage claims) which may
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be imposed on, incurred by or asserted against Tenant, its officers, directors, shareholders, partners and spouse(s), and its successors, assigns, agents or employees, including any or all liabilities, obligations, damages, costs, remedial costs, disbursements and expenses (including without limitation, administration, and reasonable attorneys’ fees and disbursements, including fees in connection with appeals and enforcement of this indemnity) of Tenant in any way relating to or arising, or alleged to arise out the negligence or willful misconduct of Landlord, or its agents, and employees, including without limitation those in any way relating to or arising or alleged to arise out of, for, or in connection with (a) any injury whatsoever to or the death of any person or any damage whatsoever to or loss of property outside of the Premises, or in any manner growing out of or in connection with, or alleged to grow out of or in connection with, any work or other thing done or performed by Landlord; (b) any violation by Landlord of any provision of this Lease which is Landlord’s obligation under this Lease (except by Tenant) or (c) any default under the Lease by Landlord beyond applicable notice and cure periods. Nothing in this Section 22 shall be construed to make Landlord liable hereunder for matters to the extent resulting from the willful misconduct or negligence of the party otherwise to be indemnified hereunder. In case any action, suit or proceeding is brought against Tenant, its successors or assigns, agents or employees, in connection with any claim indemnified against hereunder, Tenant may and Landlord will, at Landlord’s reasonable expense, diligently resist and defend such action, suit or proceeding, or cause the same to be resisted or defended by counsel selected by Landlord and reasonably approved by Tenant and, in the event of any failure by Landlord to do so, Landlord shall pay all reasonable, out-of-pocket costs and expenses (including without limitation reasonable attorney’s fees and expenses) incurred by Tenant in connection with such action, suit or proceeding.
SECTION 23:  RIGHT TO CURE DEFAULTS:
If Tenant shall fail to comply with any of its obligations under this Lease beyond the applicable notice and cure period (including, without limitation, its obligations to maintain various policies of insurance, comply with all laws, ordinances and regulations and pay all bills for utilities), then Landlord shall have the right, at its option but without obligation to do so, and at Tenant’s reasonable expense, to cure such breach on behalf of Tenant.
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Tenant agrees to reimburse Landlord (as additional rent) for all costs and expenses incurred as a result thereof together with interest thereon within thirty (30 )days of written demand therefor, together with reasonable supporting documentation.
SECTION 24:  BANKRUPTCY-INSOLVENCY:
Tenant agrees that if the estate created hereby shall be taken upon execution, attachment or any other process of law, or if Tenant shall be adjudged a bankrupt or insolvent, or any receiver or trustee shall be appointed for the business or property of Tenant and not be discharged within sixty (60) days, or if Tenant shall make any assignment of its property for the benefit of creditors, or if Tenant shall file a voluntary petition in bankruptcy, or apply for reorganization, composition, extension or other arrangement with its creditors under any federal or state law now or hereafter enacted, and any such process, assignment, action or proceeding be not vacated or set aside within sixty (60) days thereafter, then each of the foregoing shall be deemed an Event of Default for the purposes of the following Section 25 and Tenant shall remain liable as provided in said Section 25. For the purpose of this Section 24, the term “Tenant” shall be deemed to include the guarantor of this Lease, if any. Notwithstanding anything to the contrary contained in this Lease, it is specifically understood that this Lease is not intended to be an asset of the Tenant.
SECTION 25:  DEFAULT:
A.The following shall be defined and deemed as an “Event of Default”:
		(1)
	Any failure of Tenant to pay any Base Rent, Real Estate Taxes, additional rent, or other sum of money due within five (5) days after the same shall be due under this Lease; or

		(2)
	Any failure of Tenant to maintain the insurance as required by this Lease which failure continues for two (2) business days after written notice;

		(3)
	Any failure of Tenant to correct any default with

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respect to Section “7” within twenty (20) days, or within such fewer number of days as may be required by the applicable authority requesting such correction, after notice of such default shall have been served upon Tenant; or
		(4)
	Any failure of Tenant to perform any other of the terms, conditions or covenants of this Lease to be observed or performed by Tenant for more than twenty (20) days after notice of such default shall have been served upon Tenant, or any sooner time otherwise specifically set forth in this Lease, unless the nature of the default is such that it cannot be cured within twenty (20) days, in which event it shall be a default if Tenant has not commenced such cure within twenty (20) days and is not diligently prosecuting the completion of such cure, but such cure period shall not exceed sixty (60) days ; or

		(5)
	If Tenant shall abandon said Premises, provided the same shall not be a default if Tenant is paying the Base Rent and additional rent due under this Lease and is maintaining the insurance on the Premises; or

		(6)
	If by operation of law any interest of Tenant shall pass to another and not revert to Tenant within thirty (30) days; or

		(7)
	If Tenant shall fail after thirty (30) days written notice, to redeposit with Landlord any portion of the security deposited hereunder which Landlord has applied to the payment of any rent or additional rent due and payable hereunder; or

		(8)
	An Event of Default as defined in any other Section of this Lease.

B.In case of any Event of Default as hereinabove provided the Landlord shall have the immediate right of re-entry and may remove all persons and property from the Premises by summary proceedings, or other lawful means. In addition, in any Event of Default (whether or not Landlord shall elect to re-enter or to take possession pursuant to legal proceedings or pursuant to any notice provided for by law) Landlord shall have the right, at its option, to immediately terminate this Lease on five (5) days notice to Tenant and/or it may from time to time, whether or not this Lease be terminated, make such
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alterations and repairs as may be reasonably necessary in order to relet the Premises, and/or relet said Premises or any part thereof for such term or terms (which may extend beyond the term of this Lease) and at such rental(s) and upon such other terms and conditions as Landlord in its sole discretion may deem advisable; upon each such reletting all rental(s) received by Landlord from such reletting shall be applied, first, to the payment of any indebtedness (other than rental due hereunder) of Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including brokerage fees and reasonable attorney’s fees and of costs of such alterations and repairs; third, to the payment of rental(s) due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future rental(s) as the same may become due and payable hereunder, with the right reserved to Landlord to bring such action(s) or proceeding(s) for the recovery of any deficits remaining unpaid without being obliged to await the end of the term for a final determination of Tenant’s account, and the commencement or maintenance of any one or more actions shall not bar Landlord from bringing other or subsequent actions for further accruals pursuant to the provisions of this Section. If such rentals received from such reletting during any month be less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly subject to Landlord’s right of action(s) or proceeding(s) as aforesaid. Notwithstanding anything to the contrary contained herein, Landlord shall use commercially reasonable efforts to relet the Premises and mitigate its damages in connection with any such default by Tenant. No such re-entry or taking possession of said Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach. Should Landlord at any time terminate this Lease for any breach, in addition to any other remedies it may have, it may recover from Tenant all damages it may incur by reason of such breach as damages for loss of the bargain and not as a penalty, including the cost of recovering the Premises, reasonable attorneys’ fees, and including the worth at the time of such termination of the excess, if any, of the amount of all rent, additional rent, and
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charges equivalent to rent reserved in this Lease for the remainder of the stated term over the aggregate rental value of the Premises for the remainder of the term, all of which shall be immediately due and payable from Tenant to Landlord. In the event of a breach or threatened breach by Tenant of any of its obligations under this Lease, Landlord shall also have the right to appropriate injunctive relief. The rights and remedies whether herein or anywhere else in this Lease provided shall be cumulative and the exercise of any one shall not preclude the exercise or act as a waiver of any other right or remedy of Landlord hereunder, or which may be existing at law, or in equity or by statute.
SECTION 26:  SUBORDINATION:
A.Subject to Section ( C) below, this Lease is subject and subordinate to all ground or underlying leases and to all mortgages which may now or hereafter affect such leases or the real property of which the Premises are a part and to all renewals, modifications, consolidations, replacements and extensions of any such underlying leases and mortgages. This clause shall be self-operative and no further instrument of subordination shall be required by any ground or underlying lessee or by any mortgagee, affecting any lease or the real property of which the Premises are a part. In confirmation of such subordination, Tenant shall execute promptly any certificate that Landlord may reasonably request.
B.Notwithstanding the provisions of subparagraph A of this Section 26 , should any mortgagee require that this Lease be prior rather than subordinate to any such mortgage, Tenant shall, promptly upon request therefor by Landlord or such mortgagee, and without charge therefor, execute a document effecting and/or acknowledging such priority, which document shall contain, at the option of such requesting party, an attornment obligation to the mortgagee as landlord in the event of foreclosure or to any party acquiring title through such mortgage in such event.
C.As a condition to Tenant’s subordination hereunder, Landlord shall obtain for the benefit of Tenant from any current and future mortgagee or lessor of the Property a subordination, non-
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disturbance and attornment agreement on such mortgagee’s or lessor’s form, subject to inclusion of such commercially reasonably terms acceptable to mortgagee and Tenant.
SECTION 27:  SURRENDER OF PREMISES:
On the last day or sooner termination of the term, or any extension term, Tenant shall quit and surrender the Premises broom clean, in good condition and repair (reasonable wear and tear excepted; provided that damage to the Premises (such as, but not limited to, walls, floors and ceilings) resulting from the specific business use of the Premises by Tenant shall not be considered ordinary wear and tear), together with all alterations, additions and improvements which may have been made in, on or to the Premises, except movable furniture or unattached movable trade fixtures put in at the sole expense of Tenant; provided, however, that Tenant shall ascertain from Landlord at least thirty (30) days before the end of the term whether Landlord desires to have the Premises or any part thereof restored to the condition in which it was originally delivered to Tenant, and if Landlord shall so desire, then Tenant, at its own cost and expense, shall restore the same before the end of the term. Tenant shall, on or before the end of the term, remove from the Premises all its property together with any alterations, additions and improvements, the removal of which is requested by Landlord, and any or all of such property not so removed shall, at Landlord’s option, become the exclusive property of Landlord or be disposed of by Landlord, at Tenant’s cost and expense, without further notice to or demand upon Tenant. If the Premises be not surrendered as and when aforesaid, Tenant shall indemnify Landlord against loss or liability resulting from the delay by Tenant in so surrendering the Premises including, without limitation, any claims made by any succeeding occupant founded on such delay. Tenant’s obligations under this Section shall survive the expiration or sooner termination of the term.
SECTION 28:  RIGHT OF REDEMPTION:
Tenant waives any and all rights of redemption conferred by statute or otherwise, to the extent legally authorized, upon the expiration or sooner termination of the term or upon the entry of final unappealable judgment for recovery of possession through any action or proceeding.
SECTION 29:  EFFECT OF UNAVOIDABLE DELAYS:
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The provisions of this Section shall be applicable if there shall occur, during or prior to the term, any: (1) strike(s), lockout(s) or labor dispute(s); (2) inability to obtain labor or materials or reasonable substitutes therefor; or (3) Acts of God, governmental restrictions, regulations or controls, enemy or hostile governmental restrictions, regulations or controls, enemy or hostile governmental action, civil commotion, insurrection, revolution, sabotage, or fire or other casualty, or other conditions similar to those enumerated in this item (3) beyond the reasonable control of Landlord or Tenant, or if Landlord or Tenant is delayed or impeded by acts of Tenant, its officers, employees, agents, servants and the like or by weather conditions. If either party shall, as a result of any such event, fail punctually to perform any Lease obligation, including, but not limited to, Landlord’s obligations set forth in Sections 5 and 6 hereof, (and as to Tenant under no circumstances shall there be by reason of any item set forth herein any extension of the time for any obligation of Tenant to pay the Base Rent and additional rent due under this Lease, or maintain the insurance as required by the terms of this Lease), then such obligation(s) shall be punctually performed as soon as practicable after such event shall abate. If either party shall, as a result of any such event, be unable to exercise any right or option within any time limit provided therefor in this Lease such time limit shall be deemed extended for a period equal to the duration of such event. Neither party shall under any circumstances be liable to the other party for any damages which may result from any such delays and neither shall have any right to cancel or terminate this Lease by reason of any such delay caused by an event in this paragraph.
SECTION 30:  CONSENTS:
With respect to any provision of this Lease which provides, in effect, that Landlord shall not unreasonably withhold or unreasonably delay any consent or any approval, Tenant, in no event, shall be entitled to make, nor shall Tenant make, any claim for, and Tenant hereby waives any claim for money damages; nor shall Tenant claim any money damages by way of setoff, counterclaim or defense, based upon any claim or assertion by Tenant that Landlord unreasonably withheld or unreasonably delayed any consent or approval; but Tenant’s sole remedy shall be an action or proceeding to enforce any such provisions, or for specific performance, injunction or declaratory judgment. Notwithstanding anything to the contrary contained in this Lease, except for Tenant’s obligations pursuant to Sections 27 and 45 of this Lease for Tenant shall remain fully liable, neither party shall be liable to the other for any lost profits, incidental, special, exemplary, punitive, indirect or other consequential
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damages.
SECTION 31:  TENANT’S SECURITY:
Tenant hereby deposits with Landlord the sum of four hundred sixty-two thousand and 00/100 Dollars as security for the full and faithful performance and observance by Tenant of each and every term, provision and condition of this Lease. It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease beyond applicable notice and cure periods, including, but not limited to the payment of Base Rent and additional rent, Landlord may use, apply or retain the whole or any part of the security so deposited for the payment of any Base Rent and additional rent in default or any other sum which Landlord may reasonably expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease, including, but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency may accrue before or after summary proceedings or other re-entry by Landlord. In the event that Tenant shall comply with all of the terms, provisions, covenants and conditions of this Lease within applicable notice and cure periods, the security or any balance thereof shall be promptly returned to Tenant after the date fixed as the end of this Lease and after delivery of entire possession of the Premises to Landlord. Landlord shall not be required to maintain the security in an interest-bearing account, however if the security is maintained in an interest-bearing account, such interest, less the legal administration fee, shall be payable to Tenant. In the absence of evidence satisfactory to Landlord of any assignment of the right to receive the security, or the remaining balance thereof, Landlord may return the security to the original Tenant, regardless of one or more assignments of the Lease itself. In the event of a sale, or leasing, subject to this Lease, Landlord shall have the right to transfer the security to the vendee or lessee and, following such transfer, Landlord shall be considered released by Tenant from all liability for the return of such security; and Tenant agrees to look solely to the new landlord for the return of the security and it is agreed that this shall apply to every transfer or assignment made of the security to a new landlord. No holder of a mortgage to which the Lease is subordinate shall be responsible in connection with the security deposited hereunder, by way of payment of rents, or otherwise, unless such mortgagee shall have received the security deposited hereunder. Tenant further covenants that it will not assign, mortgage, encumber or attempt to assign, mortgage, or encumber the monies deposited herein as security and that neither Landlord nor its successors or assigns shall be bound by any such assignment,
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encumbrance, mortgage, attempted assignment or attempted encumbrance.  It is expressly understood and agreed that the issuance of a warrant and the re-entering of the Premises by Landlord for any default on part of Tenant prior to the expiration of the term, or any extension thereof, shall not be deemed such a termination of this Lease as to entitle Tenant to the recovery of security; that any unapplied portion of such deposit shall be retained and remain in possession of Landlord until the end of term.
SECTION 32:  TENANT’S CERTIFICATE:
Each party shall, without charge to the other party, at any time and from time to time (but in no event more than once per year) within ten (10) business days after written request, certify by written instrument, duly executed, acknowledged and delivered, to any mortgagee, assignee of any mortgagee or purchaser, or any proposed mortgagee, proposed assignee of any mortgagee, or proposed purchaser, or any other person, firm, or corporation specified by the requesting party:
	A.
	That this Lease is unmodified and in full force and effect (or, if there has been modifications, that the same is in full force and effect as modified and stating the modifications); and

	B.
	Whether or not there are then existing any setoffs or defenses against the enforcement of any of the agreements, terms, covenants or conditions hereof upon the part of Tenant or Landlord to be performed or complied with (and, if so, specifying the same); and

	C.
	The dates, if any, to which the Rental(s) and other charges hereunder have been paid in advance; and

	D.
	The termination date of the Lease; and

	E.
	The amount of Base Rent currently being paid by Tenant; and

	F.
	The amount of security deposited hereunder; and

	G.
	That there are no options or rights other than as may be set forth in the Lease; and

	H.
	Such other and further items as may reasonably be required by Landlord, any mortgagee or any proposed assignee.

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If either party fails to deliver said estoppel certificate as required, the other party may give the non-providing party an additional five days notice requesting said certificate. If such party fails to deliver the estoppel certificate within five days of such second notice, such failure to deliver such estoppel certificate within the required time, or failure of any such statement to contain the required certifications, shall be conclusive upon the non-delivering party that this Lease is in full force and effect without any modification and that there are no defaults, or such items not certified to are as set forth in this Lease, as the case may be.
Tenant further agrees that upon written request of Landlord, only in connection with a prospective sale or finance or refinance and in no event more than once per year Tenant will furnish to Landlord and to prospective mortgagees of the property such financial statements and information as such prospective mortgagees may reasonably request.
Tenant shall also furnish to Landlord and any mortgagee, within ninety (90) days after the end of each fiscal year of the Tenant, a statement, certified to be true by Tenant, that there have been no material adverse change in its financial condition from the prior year.
If an institution furnishing or intending to furnish a mortgage on the Premises shall require a de minimus change or changes in this Lease as a condition of such financing Tenant shall agree to such de minimus change so long as same does increase Tenant’s obligations or liabilities, or decrease Tenant’s rights hereunder
SECTION 33:  WAIVER OF TRIAL BY JURY:
Landlord and Tenant do hereby waive trial by jury in any action, proceeding or counterclaim brought by either against the other upon 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. It is further mutually agreed that in the event Landlord commences any summary proceedings for non-payment of any Base Rent and additional rent, Tenant will not interpose any counterclaim of whatever nature or description in any such proceeding, except that Tenant shall not be prohibited from interposing any compulsory counterclaim.
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SECTION 34:  QUIET ENJOYMENT:
Landlord covenants that upon Tenant paying the rental(s) and performing and observing all Tenant’s other Lease obligations within applicable notice and cure periods, Tenant may peaceably and quietly have, hold and enjoy the Premises for the term hereof, subject and subordinate as provided in this Lease.
SECTION 35:  SOLE BROKER:
Each party hereby covenants, warrants and represents to the other party that there was no broker other than Premier Commercial Real Estate, LLC (hereinafter referred to as the “Broker”) instrumental in consummating this Lease, and that no conversations or prior negotiations were had with any broker other than Broker concerning the renting of the Premises. Each party agrees to hold the other party harmless against any commissions, claims, costs, expenses, demands, suits, causes of actions or liability whatsoever, including reasonable attorney’s fees, with respect to finder’s or brokerage fees or commissions arising out of transactions contemplated by this Lease asserted against Landlord by any other broker or finder. Landlord shall pay the Broker a commission pursuant to a separate agreement between Landlord and Broker. In any action by another broker for a commission based upon a breach by Tenant of its covenants, warrantys and representations herein, such broker shall look solely to Tenant for payment of any commission that may be due and Landlord shall have no responsibility to such broker for commissions based upon Tenant’s breach of its covenants, warrantys and representations contained herein. The representations contained in this section shall survive the termination of this Lease.
SECTION 36:  ATTORNEY’S FEES:
In the event that Landlord institutes or is made a party to:
(a)summary or other proceedings to recover possession of the Premises (including if Tenant remains in Premises at the expiration or sooner termination of the term of this Lease); or
(b)a lawsuit to recover rent, additional rent or other payments due under the Lease; or
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(c)a lawsuit to enforce or to recover damage for the breach of any of the terms of the Lease; or
(d)a lawsuit to determine the obligations of the Landlord and Tenant under the Lease; or
(e)any appearance by Landlord or its representatives at any of (a) - (d); or
it is specifically agreed that Tenant shall pay Landlord and/or Landlord shall be entitled to recover from Tenant, in addition to all items which Landlord may be entitled to recover in law or in equity, whether or not Landlord does recover any items, reasonable attorney’s fees, and the costs and disbursements of said proceeding or otherwise as set forth in (a) - (f) above. Said payment(s) shall be due as additional rent, and Landlord’s Petition and/or Pleading may make demand for payment of attorney’s fees as an amount currently due and owing to Landlord as of the date of the Petition and/or Pleadings without the necessity of any or further demand therefor or invoice for the same.
In the event Landlord shall recover possession of the Premises in any summary proceeding Tenant shall remain liable to Landlord under the Lease, and in addition to all other remedies available at law in equity or under the Lease, Landlord may seek damages for failure to pay rent under the Lease or failure to abide by the terms and conditions of the Lease.
SECTION 37:  POLLUTION AND HAZARDOUS WASTE:
Landlord represents and warrants to Tenant that the Premises and the Building are currently free from any Hazardous Substances in excess of legal limits. Tenant agrees that no part of the Premises will be used in any way for, and Tenant shall not suffer, permit or allow the use of the Premises or any part thereof, either directly or indirectly, for treatment, preparation, generation, manufacture, use, refining, production, storage, maintenance, handling, transfer, transporting processing, disposal, burial, dispersal, release, or placement of any Hazardous Substance (as hereinafter defined), petroleum products, pollutants or contaminants, other than Customary Materials (but Tenant shall be liable for all Customary Materials as required in this Section 37). Tenant shall not release, suffer or permit the release of any Hazardous Substance, petroleum products, pollutants or contaminants onto the Premises or into the subsurface thereof or onto any property whatsoever, including without limitation, surface water and ground waters unless in compliance with all applicable law(s), permit(s), order(s), or other valid
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governmental approval(s), whether now in effect or hereafter enacted. Tenant shall not install, nor cause the installation of, any underground storage tank(s) at the Premises. Furthermore, Tenant shall not cause or permit to occur any violation of any federal, state or local law, ordinance, regulation or order now or hereafter enacted, related to environmental conditions on, under or about the Premises, or arising from Tenant’s use or occupancy of the Premises, including, but not limited to, soil and ground water conditions. Tenant shall, at Tenant’s own expense, comply with all laws regulating the treatment, preparation, generation, manufacture, use, refining, production, storage, maintenance, handling, transfer, transporting processing, disposal, burial, dispersal, release, or placement of any Hazardous Substance, petroleum products, pollutants or contaminants. Furthermore, Tenant shall, at Tenant’s own expense, make all submissions to, provide all information required by, and comply with all requirements of all governmental authorities under all present and future laws with respect to Tenant’s use and occupancy of the Premises. Tenant shall immediately notify Landlord in writing of any release or discharge of any Hazardous Substance, petroleum products, pollutants or contaminants, whether or not the release or discharge is in quantities that would require under law the reporting of such release or discharge to any governmental or regulatory agency. Tenant shall provide all information regarding the treatment, preparation, generation, manufacture, use, refining, production, storage, maintenance, handling, transfer, transporting, processing, disposal, burial, dispersal, release, or placement of any Hazardous Substance, petroleum products, pollutants or contaminants that is reasonably requested by Landlord. Tenant agrees to immediately provide Landlord with an exact copy of any notice, directive, request, demand or any other communication received by Tenant in connection with or relating to any matter or thing covered by this Section 37.
The term Hazardous Substance means, without limitation, any pollutant, contaminant, toxic or hazardous waste, dangerous substance, potentially dangerous substance, noxious substance, toxic substance, flammable, explosive, combustible, radioactive material, urea formaldehyde foam insulation, asbestos, PCB’s, chemicals known to cause cancer or reproductive toxicity, or any manufacture, preparation, production, generation, use, maintenance, treatment, storage, transfer, handling or ownership of which is restricted, prohibited, regulated, penalized by any and all federal, state, local, county, or municipal statutes, laws, or orders now or at any time hereafter in effect, including but not limited to, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §§ 9601 et seq.), the Hazardous Materials Transportation Act ( 49 U.S. C. §§ 1801
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et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.), the Federal Water Pollution Control Act ( 33 U.S.C. §§ 1251 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. §§ 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C.§§ 651 et seq.), as these laws have been or may be amended or supplemented, and any substances declared to be hazardous or toxic under any law or regulation now or hereafter enacted or promulgated by any governmental authority.
Failure of Tenant to abide by all of the foregoing obligations shall be a default under this Lease which, if not cured within twenty (20) days of Landlord’s notice, or sooner if an emergency, dangerous, or hazardous condition exists in, at, on, upon or about the Premises, shall entitle Landlord to pursue all remedies available in law, at equity and/or under the Lease.
In addition, Tenant shall indemnify and save Landlord and its successors and assigns and their respective officers, directors, shareholders, partners, agents and employees and the Premises and the building of which the Premises are part, harmless against any and all claims, obligations, liabilities, violations, penalties, fines, suits, governmental orders, causes of actions, judgments, damages, costs and expenses, whether civil or criminal or both, of any and all kind or nature which result from or are in any way connected with a breach or default by Tenant of the foregoing agreement and/or which the Landlord may be subject in connection with any Hazardous Substance at the Premises, including ,without limitation, resulting from or in connection with the discharge, despoiler, release or escape of any Hazardous Substance, smoke, vapors, soot, fumes, acids, alkalis, toxic or hazardous chemicals, liquids or gases, volatile organics, waste materials or other irritants, contaminants or pollutants or otherwise at the Premises, or caused by or resulting from the use and operation of the Premises by Tenant, its successors and assigns and/or by reason of Tenant’s invitees, licensees, employees, officers, agents, servants, etc., in any case whether or not Tenant has complied with its obligations pursuant to this agreement. This indemnification and save harmless agreement shall also cover any and all liens for hazardous waste clean up expenses in favor of the United States, New York State, or any political subdivision thereof, including the County of Suffolk, Town of Islip, and any governmental department of any of the foregoing.
All payments due from Tenant hereunder shall be due and payable as additional rent within thirty (30) days of presentation of a statement therefor by Landlord.
This indemnification shall include, but not be limited to,
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reasonable legal fees and other charges to which Landlord may be put, including cleanup costs, in defending against any action or proceeding in connection with the foregoing.
This indemnification and save harmless agreement shall survive the termination of this Lease.
SECTION 38:  SURFACE AND SUBSURFACE SAMPLING BY TENANT:
Tenant shall have the right, within twenty (20) days from the date of this Lease, to conduct and complete surface and subsurface sampling of the soil at the premises, or otherwise conduct a “Phase I” environmental survey of the premises. Any such sampling and/or survey shall be at Tenant’s sole cost and expense. Said sampling and/or survey shall not be commenced by Tenant, or any of its officers, agents, servants, employees or contractors prior to written notice to Landlord, which notice shall set forth the extent of the proposed sampling and/or survey and by whom said sampling and/or survey shall be conducted and which notice shall also provide Landlord with evidence that public liability insurance as required by this Lease is in full force and effect, and that Workman’s Compensation, in statutory limits, is in full force and effect. Tenant agrees that promptly after the completion of said sampling and/or survey, the premises shall be returned to the condition that existed prior to the commencement of said sampling and/or survey, reasonable wear and tear excepted. Tenant shall indemnify and hold Landlord harmless, in accordance with the indemnity provisions of this Lease, by reason of said sampling and/or survey or in connection with any damage or injury (including death) to persons or property which result from said sampling and/or survey.
Tenant hereby agrees to provide Landlord with a true and complete copy of the results of said sampling and/or survey. Tenant agrees not to disclose the results of such sampling and/or survey to any person or entity without Landlord’s prior written consent (except to the extent required by applicable law). In the event such sampling and/or survey by Tenant discloses any toxic or hazardous substances in excess of legal limits, Landlord shall have no obligation or responsibility to Tenant for any damages whatsoever by reason thereof, and provided the same was not caused by Tenant’s use or occupancy of the premises, Tenant shall have the right to notify Landlord of its desire to terminate this Lease by reason of the existence of such hazardous or toxic substances in excess of legal limits by written notice to Landlord received by not later than twenty (20) days from the date of this Lease, which notice shall include a copy of the report of the results of the sampling and/or survey and shall set forth a date not less than
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twenty (20) days from the date of Tenant’s notice by which Tenant desires to terminate this Lease.
Notwithstanding any such notice from Tenant, this Lease shall remain in full force and effect if, prior to the date set forth in Tenant’s termination notice, Landlord notifies Tenant of its desire to remediate the condition at the premises, commences the remediation within such twenty (20) days period and thereafter continues diligently to prosecute the completion of such work.
In the event Landlord desires to allow this Lease to terminate in response to Tenant’s twenty (20) days notice, Landlord shall so notify Tenant and this Lease shall terminate on the date set forth in Tenant’s termination notice as if such date was the date originally set forth for the expiration of the term of this Lease and all obligations which were to survive the expiration or termination of the term of the Lease shall survive the termination of the Lease in accordance with this Section 38, and provided Tenant has removed any items placed in, on or about the premises and returned the premises to Landlord in accordance with the provisions of the Lease, Landlord agrees to return to Tenant the security deposit and first month’s Base Rent paid by Tenant on execution of this Lease.
SECTION 39:  ADJACENT EXCAVATION-SHORING:
If an excavation shall be made upon land adjacent to the Premises, or shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause such excavation license to enter upon the Premises during reasonable times upon reasonable prior notice for the purpose of doing such work as said person shall deem reasonably necessary to preserve the wall, the property, or the building of the Premises from injury or damage and to support the same by proper foundations without any claim for damages or indemnity against Landlord, or diminution or abatement of rent.
SECTION 40:  DEFINITION AND LIABILITY OF LANDLORD:
A.The term “Landlord” as used in this Lease means only the owner in fee or the mortgagee in possession for the time being of the Premises, so that in the event of any transfer of said fee title, Landlord shall be and hereby is entirely freed and relieved of all obligations of Landlord hereunder and it shall be deemed without further agreement between the parties and such grantee(s) that the grantee has assumed and agreed to observe and perform all
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obligations of Landlord hereunder.
B.It is specifically understood and agreed that there shall be no personal liability on Landlord in respect to any of the covenants, conditions or provisions of this Lease. This exculpation of personal liability shall be absolute and without any exception whatsoever. In the event of a breach or default by Landlord of any of its obligations under this Lease, Tenant shall look solely to the equity of Landlord in the Premises (or if Tenant has obtained a judgment against Landlord, the proceeds from any sale, rental, casualty or condemnation award after the date of such judgment) for the satisfaction of Tenant’s remedies. Tenant shall have no rights of lien, levy, execution or other enforcement proceedings against any other property or assets of Landlord. It is specifically understood and agreed that there shall be no personal liability on the members of the Tenant in respect to any of the covenants, conditions or provisions of this Lease (but the Tenant shall remain liable for all the terms, covenants and conditions of this Lease).
SECTION 41:  RELATIONSHIP OF PARTIES:
Nothing contained in this Lease shall be construed to create the relationship of principal and agent, partnership, joint venture or any other relationship between the parties hereto other than the relationship of Landlord and Tenant.
SECTION 42:  NOTICES:
Except as may be provided by the Civil Practice Law & Rules or Real Property Actions and Proceedings Law, every notice, approval, consent or other communication authorized or required by this Lease shall not be effective unless served in writing and sent by United States certified mail, return receipt requested, or nationally recognized overnight courier, directed, if to Tenant to the address set forth on the first page of this Lease, and if to Landlord, at the address set forth on the first page of this Lease, or such other address as either Tenant or Landlord may designate, from time to time, by notice given as provided herein.
Notwithstanding anything contained herein, all pleadings, petitions, notices of petitions, notices, summonses or other documents in connection with any litigation, proceeding or hearing in connection with this Lease shall be valid and effective provided the same is served in compliance with the statutory
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requirements governing such litigation, proceeding or hearing.
Each and all of the rental(s) payable by Tenant to Landlord under any of the provisions of this Lease shall be paid to Landlord at the same place where a notice to Landlord is herein required to be directed. If either party shall properly exercise any option or election herein given to terminate this Lease, the term shall expire and come to an end on the date properly specified in the notice of termination with the same force and effect as if said date had been originally fixed herein as the expiration date of this Lease, except for the continuation of Tenant’s liability as set forth in Section 25 hereof.
SECTION 43:  WAIVER:
One or more waivers of any covenant or condition by Landlord shall not be construed as a waiver of a subsequent breach of the same or any other covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord’s consent or approval shall not be construed to waive or render unnecessary Landlord’s consent or approval to or of any subsequent similar act by Tenant. The receipt by Landlord of rent with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach and no provision of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rent herein stipulated shall be deemed to be other than on the account of the earliest stipulated rent, nor shall any endorsement or statement of any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such rent or pursue any other remedy in this Lease provided. All checks tendered to Landlord as and for the rent of the demised premises shall be deemed payments for the account of Tenant. Acceptance by Landlord of rent from anyone other than Tenant shall not be deemed to operate as an attornment to Landlord by the payor of such rent or as a consent by Landlord to an assignment or subletting by Tenant of the demised premises to such payor, or as a modification of the provisions of this Lease. No act or thing done by Landlord or Landlord’s agents during the term hereby demised shall be deemed an acceptance of a surrender of said premises and no agreement to accept such surrender shall be valid unless in writing signed by Landlord. No employee of Landlord or Landlord’s agent shall have the power to accept the keys of said premises prior to the termination of the Lease and the delivery of keys to any such agent or employee shall not operate as a termination of the Lease
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or a surrender of the premises.
SECTION 44:  MISCELLANEOUS DEFINITIONS:
A.Affiliate” means any person, firm, limited liability company, corporation or other entity, which controls or is controlled by the party in question, or is controlled by the same person(s), or firm(s) or corporation(s), or which is a member with such party in a relationship of joint venture, partnership or other form of business association which in any way affects the subject matter involved. The term “control” means the ownership of stock possessing, and of the right to exercise, at least fifty-one percent (51%) of the total combined voting power of all classes of stock of the controlled corporation issued, outstanding and entitled to vote for the election of directors, whether such ownership be direct or indirect through control of another corporation(s).
B.Wherever herein the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders. The Section headings used herein are for reference and convenience only. Each and every term and provision of this Lease which requires any performance (whether affirmative or negative) by Tenant shall be deemed to be both a covenant and a condition. The words “re-enter” and “re-entry” as used herein are not restricted to their technical legal meaning.
SECTION 45:  EXPIRATION OF LEASE:
Tenant acknowledges that possession of the Premises must be surrendered to Landlord at the expiration or sooner termination of the term of this Lease. Tenant agrees to indemnify and save Landlord harmless against all costs, claims, loss or liability resulting from delay by Tenant in so surrendering the Premises, including, without limitation, any claims made by any succeeding tenant founded on such delay. The parties recognize and agree that the damage to Landlord resulting from any failure by Tenant to timely surrender possession of the Premises as aforesaid will be extremely substantial, will exceed the amount of the monthly rent and additional rent theretofore payable hereunder, and will be impossible to accurately measure. Tenant therefore agrees that if possession of the Premises is not surrendered to Landlord on the date of the expiration or sooner termination of the term of this Lease, then Tenant shall pay to Landlord for each month and for each portion of any month during which Tenant holds over in the Premises after the expiration or sooner
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termination of the term of this Lease, a sum equal to the aggregate of that portion of the Base Rent and additional rent which was payable under this Lease during the last month of the term hereof, same payable in advance on the first day of each month provided, however, if Landlord has executed a lease with a new tenant for the premises, or has issued or received a letter of intent (or similar document) to enter into a lease with a new tenant, (in either event Landlord shall provide copy of the same to Tenant), then Tenant shall pay to Landlord for each month and for each portion of any month during which Tenant holds over in the premises after the expiration or sooner termination of the term of this Lease, a sum equal to two times the aggregate of that portion of the Base Rent and additional rent which was payable under this Lease during the last month of the term hereof, same payable in advance on the first day of each month. Nothing herein contained shall be deemed to permit Tenant to retain possession of the Premises after the expiration or sooner termination of the term of this Lease. The provisions of this paragraph shall survive the expiration or sooner termination of the term of this Lease.
SECTION 46:  UNDERSTANDING:
It is fully understood that Landlord and Tenant agree that this is a “net net net lease” and Tenant is to be fully responsible, liable and is to pay all taxes, fees, assessments, expenses, insurance, repairs both interior and exterior, nonstructural, and any other charges for the Premises, except to the extent expressly otherwise set forth in this Lease.
SECTION 47:  JURISDICTION:
In any controversy concerning or related to this Lease or involving Landlord and Tenant under this Lease agreement, it is hereby agreed that the courts of the State of New York, in and for the County of Suffolk, be deemed the jurisdiction for purposes of any controversy involving the Lease herein and the laws of the State of New York shall be applicable. Tenant hereby further warrants and represents to Landlord that is authorized to do business in the State of New York and hereby submits to the jurisdiction of the courts of the State of New York.
SECTION 48:  EXHIBITS:
Landlord and Tenant agree that all of the terms and conditions, restrictions and covenants contained in the following:
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Exhibit A - Description of Premises
Exhibit B - not used
Exhibit C - Covenants and Restrictions
Exhibit D - Covenants and Restrictions
Exhibit E - Department of Health Letter
Exhibit F - Agency Compliance Agreement
are to be strictly adhered to and these Exhibits are to be attached hereto and made part hereof.
SECTION 49:  AUTHORITY:
Each party warrants and represents to the other party that it is duly formed and in good standing, and has corporate or partnership power and authority, as the case may be, to enter into this Lease and has taken all corporate or partnership action, as the case may be, necessary to carry out the transaction contemplated herein, so that when executed, this Lease constitutes a valid and binding obligation enforceable in accordance with its terms.
SECTION 50:  ENTIRE AGREEMENT:
No oral statement or prior written matter shall have any force or effect all of which shall merge herein and be superseded hereby. No waiver of any provisions of this agreement shall be effective unless in writing, signed by the waiving party. Tenant agrees that it is not relying on any representations or agreements other than those contained in this Lease and expressly agrees to accept the Premises “as is”, subject to the terms and conditions of this Lease. This agreement shall not be modified except by a writing subscribed by all parties, nor may this Lease be cancelled by Tenant except with the written consent of Landlord, unless otherwise specifically provided herein. If any term, covenant or condition of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Lease shall be valid and enforced to the fullest extent permitted by law. The submission by Landlord of the within Lease in draft form shall be deemed submitted solely for Tenant’s consideration and not for acceptance and execution. Such submission shall have no binding force or effect, shall confer no rights nor impose any obligations, including brokerage obligations, upon either party unless and until both Landlord and Tenant shall have executed this Lease and duplicate originals thereof shall have been delivered to the respective parties. All
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captions herein are solely for convenience and shall not be given any legal effect. Landlord and Tenant understand, agree, and acknowledge that: (i) this Lease has been freely negotiated by both parties; and (ii) that, in any controversy, dispute, or contest over the meaning, interpretation, validity, or enforceability of this Lease or any of its terms or conditions, there shall be no inference, presumption, or conclusion drawn whatsoever against either party by virtue of that party having drafted this Lease or any portion thereof.
Except as otherwise provided in this Lease, the covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, executors, administrators, successors and permitted assigns.
SECTION 51:  Town of Islip Industrial Development Agency
Landlord advises Tenant as follows: (i) Landlord has obtained from the Town of Islip Industrial Development Agency (the “IDA”) assistance to construct the land and building known as 80 Wilshire Boulevard, Edgewood, New York (“80 Wilshire Boulevard”), (ii) in connection with such assistance, among other things, Landlord has (a) leased 80 Wilshire Boulevard to the IDA and the IDA has subleased 80 Wilshire Boulevard to Landlord, and as a result thereof this Lease shall be a sublease of Landlord’s lease with the IDA, and (b) entered into a Payment In Lieu of Tax Agreement (“PILOT Agreement”) with the IDA, and other agreements with the IDA; (iii) that Landlord’s lease with the IDA requires that: (x) this Lease between Landlord and Tenant contain a provision requiring Tenant to comply with the provisions of the lease between Landlord and the IDA applicable to Tenant, and (y) that Tenant enter into a Tenant Agency Compliance Agreement with the IDA, a form of which agreement is attached hereto as Exhibit “F”. Tenant understands and acknowledges the foregoing, and that as a result of the assistance Landlord will receive from the IDA Tenant will be receiving a benefit, among other things, in that Tenant’s obligation to pay real estate taxes shall be as set forth in Article 4 of this Lease.
Tenant agrees that it shall comply with the provisions of the lease between Landlord and the IDA applicable to Tenant, and further, upon request from Landlord, Tenant shall execute and deliver the Tenant Agency Compliance Agreement attached hereto as Exhibit “F”, and provide such information with respect to the number of Tenant’s employees employed at the Premises, and such other information as may be required by the IDA, as and when required by the IDA, and otherwise comply with Tenant’s
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obligations under the Tenant Agency Compliance Agreement. Tenant further agrees that, notwithstanding anything that may be contained in any agreement between the Landlord and the IDA: (i) Tenant’s obligations shall be as set forth in this Lease, (ii) Tenant shall pay to Landlord the Base Rent and additional rent as set forth in this Lease, and (iii) Tenant agrees to pay all Real Estate Taxes (or payments in lieu thereof) in accordance with Article 4 of this Lease.
Tenant further agrees that because this Lease shall become a sublease of the lease between Landlord and the IDA, the following shall be applicable:
(1)The term of this Lease shall be as set forth in this Lease, except, notwithstanding anything contained or implied herein, for the sole purpose of maintaining the status of this Lease as a sublease of the lease between Landlord and the IDA for the term of the lease between Landlord and the IDA, and not as an assignment of such lease, the status of this Lease as a sublease shall be deemed to expire or terminate one day prior to the date that the lease between Landlord and the IDA expires or terminates for any reason whatsoever, and, except for termination of this Lease in accordance with its terms, immediately upon such termination of the lease between the Landlord and the IDA, without any further action or agreement being required, this Lease shall revert to the lease relationship existing between Landlord and Tenant prior to the execution of the lease between Landlord and the IDA for the remainder of the term thereof as set forth in this Lease and shall be valid, binding and enforceable as written in accordance with its terms. The parties hereto expressly acknowledge and agree that the immediately preceding sentence has been inserted herein to evidence their intent that this Lease shall be a sublease and not an assignment of this Lease for the term of the lease between Landlord and the IDA.
(2)Tenant hereby expressly acknowledges and agrees that nothing contained or implied in the lease between Landlord and the IDA, the PILOT Agreement, or any other agreement in connection therewith, nor any lease or transfer of 80 Wilshire Boulevard shall be deemed, construed or implied in any respect to: (i) increase any obligations of Landlord with respect to the Premises, the Tenant and/or under this Lease, (ii) affect Tenant’s obligations under the Lease or give Tenant any further, greater or increased rights or remedies, nor permit Tenant to take any action with respect to the Premises or the Lease, other than Tenant has under the Lease, (iii) in the event or events any term or
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condition of the lease between Landlord and the IDA, or the PILOT Agreement, or any other agreement executed in connection therewith, requires any payment, performance, compliance, action, work, indemnity, or otherwise from the Landlord which obligation is that of the Tenant under this Lease, Tenant expressly agrees to promptly make or do such payment, performance, compliance, action, work, indemnity or otherwise, without any setoff, deduction or counterclaim whatsoever. Either concurrent with, or promptly after, any such payment, performance, compliance, action, work, indemnity or otherwise by Tenant, Tenant shall provide Landlord with evidence of any such payment, performance, compliance, action, work, indemnity or otherwise by Tenant. If Tenant fails to make any such payment or do any such performance, compliance, action, work, indemnity or otherwise, Landlord shall have all rights and remedies against Tenant as are or would be available to Landlord against Tenant under the Lease for a breach or default thereunder, and Tenant shall indemnify, defend, hold and save Landlord harmless from and against any costs, liabilities, expenses, losses, damages and the like which Landlord sustains, suffers, expends or incurs, or which Landlord may or might sustain, suffer, expend or otherwise incur, including Landlord’s attorneys’ fees, caused by, or resulting therefrom, including all causes of action, attorney fees and expenses incurred in defending or prosecuting any suits or actions which may arise as a result of any of the foregoing, or to enforce any of Tenant’s obligations in connection with the Tenant Agency Compliance Agreement.
(3)Tenant agrees to pay all Base Rent, additional rent, real estate taxes(or payments in lieu of taxes) and other charges as set forth in this Lease, and comply with and abide by all of the terms and conditions of this Lease, notwithstanding the leasing of the Premises to the IDA, or execution of, or anything contained or implied in the lease between Landlord and the IDA, the PILOT Agreement, and/or any other agreement executed in connection therewith. Tenant further agrees not to do, cause or suffer to be done, any act (whether by omission or omission) which would result in a breach of or default under any term, covenant, provision or condition of the lease between Landlord and the IDA, the PILOT Agreement, and/or any other agreement executed in connection therewith, or the Tenant Agency Compliance Agreement.
(4)Neither Tenant, nor its successors and assigns shall enter into any agreement which shall modify, surrender or merge this Lease. Any agreement made in contravention to the provisions of this paragraph shall be of no force or effect to Landlord. Furthermore, neither Tenant, nor its successors and assigns, shall take, suffer or permit the termination of the lease between Landlord and the Agency and/or this Lease, except as the lease between Landlord and the IDA and/or the Lease may be
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terminated in accordance with its terms.
(5)Tenant shall not assign this Lease nor sublet the Premises in whole or in part; and shall not permit Tenant’s interest in this Lease to be vested in any third party by operation of law, except as may be expressly provided in this Lease.
(6)This Lease is subject and subordinate to the lease between Landlord and the IDA.
(7)In the event at any time the lease between the Landlord and the IDA or the PILOT Agreement is terminated, or expires in accordance with the terms thereof, for any reason whatsoever, notwithstanding anything contained or implied in this Lease, this Lease shall remain and be valid, binding, in full force and effect and enforceable in accordance with its terms, and the relationship and status between Landlord and Tenant shall, without any action, agreement, or notice on the part of Landlord being required, immediately revert to the relationship and status between Landlord and Tenant as it existed on the date immediately prior to the date Landlord subleased the building from the IDA, as if the lease between the Landlord and the IDA, the PILOT Agreement, or any other agreement executed in connection therewith never existed, provided, however, if at such time Tenant is in default under the terms and conditions of this Lease beyond applicable notice and cure periods, Landlord shall have the right to pursue all remedies against Tenant by reason thereof. Notwithstanding the foregoing, in the event, at any time, Landlord, or any assignee or designee or Landlord, or any purchaser or purchasers of the building, or any mortgagee or mortgagees of the building request confirmation of the status of the relationship between Landlord and Tenant, Tenant agrees to promptly comply with such request.
(8)Tenant hereby expressly acknowledges, confirms, understands and agrees that Landlord has the sole and absolute right in its discretion at any time to terminate the lease between Landlord and the IDA, whether or not Landlord is in default under the lease between Landlord and the IDA, and whether or not this Lease is in full force and effect, and Tenant hereby consents to such right, and Landlord shall have no liability to Tenant as a result of the exercise thereof.
(9)Any payments required to be made by Tenant hereunder shall be paid without any setoff, deduction or counterclaim whatsoever, be deemed additional rent under this Lease, and, in the event or events of nonpayment of the same, Landlord shall be entitled to all rights and remedies available under this Lease for nonpayment of rent. Any performance required to be made by Tenant hereunder
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shall be deemed a performance required of Tenant under this Lease, and, in the event or events of nonperformance of the same, Landlord shall be entitled to all rights and remedies available under the Lease for nonperformance of the same. Failure by Tenant to comply with any of the terms and conditions of the Tenant Agency Compliance Agreement shall be deemed a default by Tenant under this Lease and in the event or events of nonperformance of the same, Landlord shall be entitled to all rights and remedies available under this Lease for nonpayment or nonperformance of the same.
(10)Tenant shall be responsible for all costs and expenses with respect to the IDA transaction, and any recapture payments for failure to comply with the terms of the IDA documents, and Tenant shall indemnify and hold Landlord harmless from and against all costs and expenses, including reasonable attorneys fees, that Landlord may incur.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands.
	LANDLORD: 80 WILSHIRE BLVD. L.P.,
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	By: D & A OWNER’S CORP., general partner
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	By: 
	/s/ David Wolkoff
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	David Wolkoff, President
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	TENANT: PHARMAPACKS, LLC
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	By: 
	/s/ Andrew Vagenas
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	Andrew Vagenas, CEO
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64Exhibit 10.3
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HARVILL AVENUE ASSOCIATES, LLC
LANDLORD
PHARMAPACKS, LLC
TENANT

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AMENDED AND RESTATED LEASE

	PREMISES:
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	21500 Harvill Avenue

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	Perris, California 92570

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TABLE OF CONTENTS
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	ARTICLE I. Definitions
	1

	ARTICLE II. Demise and Term
	3

	ARTICLE III. Rent; Net Lease
	4

	ARTICLE IV. Completion and Occupancy
	6

	ARTICLE V. Use of the Demised Premises
	8

	ARTICLE VI. Repairs & Maintenance
	9

	ARTICLE VII. Alterations
	11

	ARTICLE VIII. Access to Demised Premises
	13

	ARTICLE IX. Compliance with Laws
	13

	ARTICLE X. Rules and Regulations
	15

	ARTICLE XI. Right to Perform
	16

	ARTICLE XII. Liability of Landlord
	16

	ARTICLE XIII. Utilities
	18

	ARTICLE XIV. Insurance
	19

	ARTICLE XV. Real Estate Taxes
	20

	ARTICLE XVI. Condemnation
	22

	ARTICLE XVII. Damage by Fire or Other Cause
	24

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	ARTICLE XVIII. Subordination, Attornment, Notice to Lessors and Mortgagees
	25

	ARTICLE XIX. Defaults
	27

	ARTICLE XX. Remedies & Damages
	29

	ARTICLE XXI. No Waivers by Landlord
	31

	ARTICLE XXII. Waivers by Tenant
	31

	ARTICLE XXIII. Covenant of Quiet Enjoyment
	32

	ARTICLE XXIV. Assignment, Mortgaging and Subletting, Etc. 
	32

	ARTICLE XXV. Surrender of Premises
	37

	ARTICLE XXVI. Security
	38

	ARTICLE XXVII. Signs
	38

	ARTICLE XXVIII. Brokerage
	39

	ARTICLE XXIX. Exculpation
	39

	ARTICLE XXX. Effect of Conveyance by Landlord
	39

	ARTICLE XXXI. Estoppel Certificate, Memorandum
	40

	ARTICLE XXXII. Notices
	40

	ARTICLE XXXIII. Arbitration
	42

	ARTICLE XXXIV. No Liability and Indemnification of Landlord
	43

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	ARTICLE XXXV. Discharge of Liens
	45

	ARTICLE XXXVI. Tenant’s Property
	46

	ARTICLE XXXVII. Parties Bound
	46

	ARTICLE XXXVIII. No Other Representations, Construction, Governing Law
	47

	ARTICLE XXXIX. Financial Reports
	48

	ARTICLE XL. Miscellaneous
	48

	ARTICLE XLI. Anti-Terrorism Law
	53

	ARTICLE XLII. [Intentionally Omitted] 
	55

	ARTICLE XLIII. Acquisition of Land and Building
	55

	SCHEDULE A- THE LAND
	58

	EXHIBIT A – LANDLORD'S WORK
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	EXHIBIT A-1 – ANTICIPATED COST
	60

	EXHIBIT B – RULES AND REGULATIONS
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AMENDED AND RESTATED AGREEMENT OF LEASE, made as of this 20th day of September, 2021, between Harvill Avenue Associates, LLC, a Delaware limited liability company (as successor in interest to CH/BDG Harvill, LLC), having an office at 300 Robbins Lane, Syosset, New York 11791 (“Landlord”), and Pharmapacks, LLC, a New York limited liability company having an office at 1985 Marcus Avenue, Suite 203, Lake Success, New York 11042 (hereinafter, “Tenant”).
W I T N E S S E T H :
WHEREAS, CH/BDG Harvill, LLC, a Delaware limited liability company (“CH/BDG Harvill, LLC”), entered into an Agreement to Purchase Real Property and Improvements to be Constructed Thereon and Joint Escrow Instructions dated as of June 11, 2021 (the “Purchase Agreement”) with RG Harvill RIV CO LLC concerning the acquisition of the Land and the Building (each as defined herein);
WHEREAS, CH/BDG Harvill, LLC, as landlord and Tenant entered into a certain Lease dated as of June 30, 2021 (the “Lease”) covering real property located at 21500 Harvill Avenue, Perris, California 92570, as more particularly described in the Lease (the “Land”).
WHEREAS, CH/BDG Harvill, LLC assigned all of its rights, title and interest in the Purchase Agreement to Landlord by Assignment and Assumption of Agreement dated as of September 14, 2021.
WHEREAS, CH/BDG Harvill, LLC assigned all of its rights, title and interest in the Lease to Landlord by Assignment and Assumption of Agreement of Lease dated as of September 14, 2021.
WHEREAS, Landlord and Tenant desire to amend and restate the Lease in its entirety in the manner and to the extent as hereinafter provided.
The parties hereto, for themselves, their successors and assigns, hereby covenant and agree as follows:
ARTICLE I.
Definitions
Section 1.01.The terms defined in this Article shall, for all purposes of this Lease, and all agreements supplemental hereto, have the meanings specified herein, unless the context required otherwise.
Section 1.02.“Term” shall mean that period between the Term Commencement Date and the Expiration Date, or such earlier date(s) on which such term may expire or be cancelled or terminated pursuant to any of the conditions or covenants of this Lease or pursuant to law.
Section 1.03.“Term Commencement Date” shall be the date of Substantial Completion.
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Section 1.04.“Expiration Date” shall mean twelve (12) years and six (6) months from the last day of the month preceding the month in which the Term Commencement Date occurs, if the Term Commencement Date is the first day of the month, or twelve (12) years and six (6) months from the last day of the month in which the Term Commencement Date occurs, if the Term Commencement Date occurs on other than the first day of the month.
Section 1.05.“Rent Commencement Date” shall mean the Term Commencement Date.
Section 1.06.“Base Rent” shall have the meaning set forth in Article III.
Section 1.07.“Additional Rent” shall have the meaning set forth in Article III.
Section 1.08.“Land” shall have the meaning set forth in Article II.
Section 1.09.“Lease Year” shall mean any consecutive twelve (12) month period commencing on the Term Commencement Date, or any anniversary thereof, except that, if the Term Commencement Date is other than the first day of the month, the first Lease Year shall mean the period commencing on the Term Commencement Date and ending twelve (12) months from the last day of the month in which the Term Commencement Date occurs.
Section 1.10.“Lease Month” shall mean any calendar month following the Term Commencement Date.
Section 1.11.“Substantial Completion” shall mean the stage when Landlord’s Work is sufficiently complete to permit Tenant to lawfully occupy or utilize the Demised Premises and all necessary Approvals have been issued by the applicable Governmental Authority with respect thereto, but without regard to facilities, equipment and furnishings to be supplied or installed by Tenant, and even though minor items, such as touch-up plastering or painting, “punch list” items, or other items of construction which do not unreasonably interfere with Tenant’s occupancy of the Demised Premise, are not yet completed.
Section 1.12.“Governmental Authority” shall mean the United States, the State in which the Premises are located, and any political subdivision thereof, and any agency, department, commission, board, bureau or instrumentality of any of them, and any regulatory body such as a Board of Fire Underwriters.
Section 1.13.“Requirement” shall mean any law, ordinance, order, rule or regulation, now existing or hereafter enacted, of a Governmental Authority, which imposes a duty or obligation on Landlord or Tenant or both of them.
Section 1.14.“Approvals” shall mean all licenses, permits, permissions and approvals from a Governmental Authority necessary (i) to commence and to prosecute Landlord’s Work, or Tenant Changes, as the case may be, to completion or (ii) to enable Tenant to lawfully use or occupy the Premises as contemplated by this Lease, including, without limitation, a certificate of occupancy and/or completion certificate issued by the applicable Governmental Authority with respect to the Demised Premises and/or Landlord’s Work (as applicable).
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Section 1.15.“Business Days” shall mean all days other than Saturdays, Sundays and days observed as a holiday by a bank located in Riverside County, California.
Section 1.16.“Tenant” shall mean the party above named as Tenant, and any successor to Tenant; and whenever this Lease and the leasehold estate hereby created shall be assigned or otherwise transferred in the manner specifically permitted herein, then from and after such assignment or transfer, the term “Tenant” shall also include the permitted assignee or transferee named therein, as if such assignee or transferee had been named herein as Tenant.
Section 1.17.“Arbitration” shall have the meaning referred to in Article XXXIII of this Lease.
Section 1.18.“Landlord” shall mean only the owner, for the time being, or the mortgagee in possession, for the time being, of the Demised Premises (or the owner of a lease of the Demised Premises), so that in the event of any conveyances, transfers or assignments of said Demised Premises or of said lease, or in the event of a further lease of the Demised Premises, the said Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of Landlord hereunder accruing from and after such assignment and upon written assumption of this Lease by such transferee, and it shall be deemed and construed without further agreement between the parties or their successors in interest, or between one or both of the parties and the grantee, transferee or assignee, or the said lessee of the Demised Premises, that the grantee, transferee or assignee, or the lessee of the Demised Premises has assumed and agreed to carry out any and all covenants and obligations of Landlord from and after the date of such assignment hereunder;
Section 1.19.“Lease” shall mean this instrument as it hereafter may be amended.
ARTICLE II.
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Demise and Term
Section 2.01.Landlord hereby leases to Tenant and Tenant hereby hires from Landlord the entire one-story industrial building comprising approximately 333,572 square feet known as 21500 Harvill Avenue, Perris, California 92570 (hereinafter, the “Building”), situated upon a plot of land (hereinafter, the “Land”) in the City of Perris, County of Riverside and State of California, as more particularly described on Schedule A attached hereto and made a part hereof, together with all fixtures, equipment, improvements, installations and appurtenances which at the commencement of or during the Term of this Lease are attached thereto (except items not deemed to be included therein and removable by Tenant as provided in Article VI hereof), which Building, Land, fixtures, equipment, improvements, installations and appurtenances are hereinafter sometimes called the “Demised Premises,” or the “Project” for a Term of twelve (12) years and six (6) months to commence on the Term Commencement Date and to end on the Expiration Date, said Term, Term Commencement Date and Expiration Date being subject to the further provisions of this Lease, at the annual rental set forth in Article III hereof. Promptly following the Term Commencement Date, which the parties hereto anticipate shall occur on or about November 15, 2021, the parties hereto shall enter into a supplemental certificate fixing the Term Commencement Date, the Rent Commencement Date, the stated Expiration Date, certifying that any improvements required to be made by Landlord, if any, have been completed
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and confirming or adjusting the Base Rent as provided in Section 4.02 hereof The square footage of the Building stated above is stipulated by the parties as being the actual square footage of the Building and there shall be no adjustment to rent regardless of any finding of a different actual size of the Premises or the Building.
ARTICLE III.
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Rent; Net Lease
Section 3.01.Commencing on the Rent Commencement Date, Tenant shall pay to Landlord annual fixed rent (the “Base Rent”), at Landlord’s offices first listed above or at such other place as Landlord may designate from time to time, in cash, or by check of Tenant drawn on a bank or trust company in the United States, in advance on the first day of each month during the Term, without counterclaim, set-off or deduction whatsoever (except as otherwise specifically set forth to the contrary in this Lease). Base Rent is due each day of the Term of the Lease commencing on the Rent Commencement Date, but Landlord and Tenant agree that for convenience, Base Rent shall be payable in equal monthly installments, in advance, on the first day of each month during the Term. In addition, Tenant shall pay to Landlord during the Term, at the place and in the manner set forth above, “Additional Rent” (as defined herein) as and when billed by Landlord therefor.
Section 3.02.During the Term hereof Base Rent reserved under this Lease shall be and consist of:
	Lease Year
	Annual Base Rent
	Monthly Base Rent

	1
	$3,669,292.00
	$305,774.00

	2
	$3,797,717.00
	$316,476.00

	3
	$3,930,637.00
	$327,553.00

	4
	$4,068,210.00
	$339,017.00

	5
	$4,210,597.00
	$350,883.00

	6
	$4,357,968.00
	$363,164.00

	7
	$4,510,497.00
	$375,875.00

	8
	$4,668,364.00
	$389,030.00

	9
	$4,831,757.00
	$402,646.00

	10
	$5,000,868.00
	$416,739.00

	11
	$5,175,899.00
	$431,325.00

	12
	$5,357,055.00
	$446,421.00

	13 (months 1-6)
	$5,544,552.00
	$462,046.00

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Section 3.03.All other sums of money as shall become due and payable by Tenant under this Lease (hereinafter, “Additional Rent”), including, without limitation, those items specified in Articles VII, XV and XVIII of this Lease, all of which sums shall be payable as hereinafter provided, all to be paid to Landlord, as specified on the first page of this Lease.
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Section 3.04.In the event any installment of Base Rent or Additional Rent required pursuant to the provisions of this Lease to be paid by Tenant is not paid when due, and such payment remains unpaid following ten (10) days notice from Landlord to Tenant, such installment shall bear interest at the rate of ten (10%) percent per annum from the date said installment was due and payable, said interest to be deemed Additional Rent.
Section 3.05.In order to cover the extra expense involved in handling delinquent payments, Tenant, at Landlord’s option, shall pay a “late charge” of two (2%) percent of any payment of Base or Additional Rent paid more than ten (10) days after notice that same has not been timely paid on the due date thereof, provided, however, that Landlord shall not be required to give Tenant any such notice after the first occurrence of a late payment of Base Rent in any given twelve (12) month period. It is understood and agreed that this charge is for additional expenses incurred by Landlord and shall not be considered interest. Said late charge is to be deemed Additional Rent.
Section 3.06.Tenant shall pay upon demand by Landlord any reasonable attorney’s fees incurred by Landlord in connection with the imposition, collection or payment of any Base Rent, Additional Rent and/or said interest not paid within the applicable notice and cure periods, said attorney’s fees to be deemed Additional Rent. In addition, if Tenant’s check for the payment of Base Rent, Additional Rent or any other sum due Landlord hereunder is returned by Tenant’s bank because of insufficient funds or otherwise, Tenant shall, in addition to immediately providing Landlord with a sufficiently funded replacement check, reimburse Landlord an amount equal to the greater of (i) One Hundred Dollars ($100.00) or (ii) the actual, out-of-pocket costs incurred by Landlord as a result of such insufficient funds. Such reimbursement shall be deemed Additional Rent. The Base Rent and Additional Rent are herein collectively referred to as the “Rent” and shall constitute “Rent” within the meaning of California Civil Code Section 1951(a).
Section 3.07.Upon execution of this Lease by Tenant, Tenant shall (a) pay the first monthly installment of Base Rent of Three Hundred Five Thousand Seven Hundred Seventy-Four Dollars $305,774.00 and (b) as per Section 26.01, pay to Landlord the Security set forth therein. If the Rent Commencement Date is other than the first day of a calendar month, the portion of such payment attributable to the portion of such calendar month prior to the Rent Commencement Date shall be credited against the payments of Base Rent and Additional Rent first occurring thereafter.
Section 3.08.Tenant shall have the right to extend the Term for two (2) five (5) year periods (each, an “Extension Period”). Each Extension Period shall commence immediately upon the expiration of the Term or the Term as previously extended by an Extension Period. The foregoing right shall be of no force or effect with respect to the subsequent Extension Period unless Tenant shall have duly exercised its right to extend the Term for all prior Extension Periods. Each extension of the Term shall be on all of the terms, covenants and conditions of this Lease except that the Base Rent during each Extension Period shall be as set forth below (`the “Extension Period Base Rent”). Tenant shall have no further right to extend or renew the Term after the expiration of the second Extension Period. To exercise its right to extend the Term, Tenant must so advise Landlord by notice given at least twelve (12) months prior to the last day of the Term as it theretofore may have been extended.
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Section 3.09.During each Extension Period the Extension Period Base Rent reserved under this Lease shall be as follows
First Extension Period:
	Lease Year
	Annual Base Rent
	Monthly Base Rent

	13 (months 7-12)
	$5,544,552.00
	$462,046.00

	14
	$5,738,611.00
	$478,218.00

	15
	$5,939,463.00
	$494,955.00

	16
	$6,147,344.00
	$512,279.00

	17
	$6,362,501.00
	$530,208.00

	18 (months 1-6)
	$6,585,189.00
	$548,766.00

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Second Extension Period:
	Lease Year
	Annual Base Rent
	Monthly Base Rent

	18 (months 7-12)
	$6,585,189.00
	$548,766.00

	19
	$6,815,670.00
	$567,973.00

	20
	$7,054,219.00
	$587,852.00

	21
	$7,301,117.00
	$608,426.00

	22
	$7,556,656.00
	$629,721.00

	23 (months 1-6)
	$7,821,139.00
	$651,762.00

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Section 3.10.Except as otherwise expressly set forth in this Lease to the contrary, this Lease shall be an absolute net lease, free of all expenses to Landlord in connection with the operation, maintenance, repair, replacement, use or occupancy of the Demised Premises, so that this Lease shall yield all rent payable under this Lease as an absolutely net return to Landlord. Accordingly, Tenant shall pay all taxes, assessments, insurance premiums, utility costs and other expenses of the Demised Premises, regardless of to whomsoever payable.
ARTICLE IV.
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Completion and Occupancy
Section 4.01.Tenant has inspected the Demised Premises and the Building and is thoroughly acquainted with their respective conditions and agrees, subject to the completion of Landlord’s Work, to take same “as is” and acknowledges that the taking of possession of the Demised Premises by Tenant shall be conclusive evidence that the Demised Premises and the Building were in good and satisfactory condition at the time such possession was so taken.
Section 4.02.Landlord shall have no obligation to alter, improve, decorate or otherwise prepare the Demised Premises for Tenant’s occupancy except that Landlord shall perform the items of work set forth in Exhibit A attached hereto (“Landlord’s Work”). Landlord shall proceed with such Landlord’s Work with due dispatch, subject to delays by causes beyond its reasonable
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control. Landlord and Tenant agree that the budget for the performance of Landlord’s Work, including soft costs, property carry costs and interest costs during the performance thereof is $10,014,241.00 as shown on Exhibit A-1 attached hereto (the “Anticipated Cost”). Landlord’s Work shall be performed by Landlord at Landlord’s expense and Landlord agrees to use its commercially reasonable efforts perform Landlord’s Work for an amount equal to or less than the Anticipated Cost. Landlord agrees that Landlord’s Work will be performed on an “open-book” basis and that Tenant will have an opportunity to review and provide input as to Landlord’s accounting of the costs and expenses comprising the actual cost of Landlord’s Work. In addition, if the cost of Landlord’s Work is increased due to any delay resulting from any act or omission of Tenant, its agents or employees, Tenant shall forthwith pay to Landlord as Additional Rent an amount equal to such increase in cost.
In the event that the actual cost of performing Landlord’s Work as reasonable determined by Landlord and Tenant upon completion of Landlord’s Work (the “Actual Cost”) is more than 3% above or below the Anticipated Cost, then Base Rent set forth in Section 3.02 and 3.09 shall be adjusted as provided in this Section 4.02. It is understood and agreed that if the Actual Cost is within 3% of the Anticipated Cost, then there shall be no adjustment to the Base Rent as provided in Section 3.02 and 3.09. If however, the Actual Cost of performing Landlord’s Work is more that 3% above or below the Anticipated Cost, then Base Rent shall be recalculated by multiplying the amount by which the Actual Cost exceeds (or is less than) the Anticipated Cost by a Landlord’s Work amortization factor of 10.73% and adding or subtracting such amount, as the case may be, from the Base Rent for the first Lease Year ($3,669,292.00), the result of which shall be the new Base Rent for the first Lease Year, which will then be escalated at a rate of 3.5% per annum throughout the balance of the Term and each Extension Period.
For example, in the event that the Actual Cost is $11,000,000, then the new Annual Base Rent for the first Lease Year would be $3,775,064 ($11,000,000 – $10,014,241 = $985,759 X .1073 = $105,772 + 3,669,292 = $3,775,064) and the Monthly Base Rent would be $314,588.67.
Notwithstanding the foregoing, in the event that that the Actual Cost exceeds the Anticipated Cost by more than 15%, then the Base Rent shall be adjusted pursuant to this Section as if the Actual Cost exceeded the Anticipated Cost by 15% and Tenant shall forthwith pay to Landlord as Additional Rent an amount equal to the amount by which the Actual Cost exceeds 15% of the Anticipated Cost.
Section 4.03.Landlord shall use reasonable efforts to give to Tenant no less than three (3) weeks prior notice of Substantial Completion. Notwithstanding the foregoing, Landlord shall have no liability to Tenant in the event that the Demised Premises are not substantially completed for occupancy upon the date specified by Landlord or if Substantial Completion does not occur by November 15, 2021.
Section 4.04.Tenant, at Tenant’s sole risk, may, at Landlord’s reasonable discretion, be permitted entry and access in and to the Demised Premises prior to Substantial Completion in order to install fixtures, furniture and equipment and to adapt and decorate the Demised Premises for Tenant’s use with Landlord’s prior written consent and then only on such terms as Landlord may reasonably require. In addition, if the cost of Landlord’s Work is increased due to any delay resulting from Tenant’s decorating the Demised Premises as contemplated by this Section 4.04,
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Tenant shall forthwith pay Landlord an amount equal to such increase in cost. In the event Tenant shall enter the Building or any other part of the Demised Premises, as may be above permitted by Landlord, Tenant agrees to indemnify and save Landlord free and harmless, from and against any and all claims, loss, liability and damage arising from or claimed to arise from any act or neglect of Tenant, its contractors, agents, servants or employees or from any failure to act, or for any other reason whatsoever arising out of said entry or such work, except to the extent caused by the negligence or willful misconduct of Landlord or Landlord’s employees, agents or contractors.
Section 4.05.Any sums payable by Tenant prior to the Term Commencement Date pursuant to the provisions of this Lease may be collected by Landlord as Additional Rent, from time to time, upon demand, whether or not the same shall have accrued prior to the Term Commencement Date and in default of payment thereof, Landlord shall (in addition to all other remedies) have the same rights as in the event of Tenant’s default of payment of Additional Rent.
Section 4.06.Tenant shall periodically inspect Landlord’s Work, as hereinafter provided, and make any objections thereto without delay so as to mitigate changes, delays and costs.
ARTICLE V.
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Use of the Demised Premises
Section 5.01.Tenant shall use and occupy the Demised Premises as an industrial warehouse and distribution center, including, without limitation, storing, picking, packing and shipping operations with ancillary general and executive office space (hereinafter the “Permitted Use”), and for no other purpose. Tenant acknowledges that Landlord has not made any representations as to whether the Demised Premises may be used for the specific use stated above pursuant to applicable building and zoning ordinances, rules and regulations.
Section 5.02.Tenant shall not at any time use or occupy, or suffer or permit anyone to use or occupy, the Demised Premises, or do or permit anything to be done in the Demised Premises, (i) in violation of the Certificate of Occupancy for the Demised Premises or for the Building (to the extent such Certificate of Occupancy was provided to Tenant), (ii) in violation of the restriction on the use of the northern Project driveway contained in the Mitigated Negative Declaration approved by the County of Riverside on March 4, 2020 for Plot Plan No. 190005, a copy of which Tenant acknowledges it has received from Landlord, or (iii) in violation of any Requirements or requirements of the California State Board of Fire Services (or any similar body), or any other law, rule or regulation.
Section 5.03.Tenant shall give prompt notice to Landlord of any written notice it receives of the violation of any law or Requirements of any public authority with respect to the Demised Premises or the use or occupation thereof. Prior to the Term Commencement Date, if Tenant is then in possession of the Demised Premises, and at all times thereafter, Tenant shall promptly comply with all present and future laws, orders and regulations of all state, federal, town, municipal and local governments, departments, commissions and boards or any direction of any public officer pursuant to law, and all orders, rules and regulations of the California State Board of Fire Services (or any similar body) or any similar body which shall impose any violation,
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order or duty upon Landlord or Tenant with respect to the Demised Premises (in which event Tenant shall effect such compliance at its sole cost and expense). Tenant shall pay all costs, expenses, fines, penalties or damages, which may be imposed upon Landlord by reason of Tenant’s failure to comply with the provisions of this Article, and if by reason of such failure the fire insurance rate shall, at the beginning of this Lease or at any time thereafter, be higher than it otherwise would be, then Tenant shall reimburse Landlord, as Additional Rent hereunder, for that portion of all fire insurance premiums thereafter paid by Landlord which shall have been charged solely because of such failure by Tenant, and shall make such reimbursement within thirty (30) days following notice by Landlord of such outlay by Landlord.
ARTICLE VI.
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Repairs & Maintenance
Section 6.01.Tenant shall, at its sole cost and expense, take good care of and maintain the Demised Premises, including, without limitation, the parking area, the roof and Building Systems (i.e. plumbing, HVAC, electrical, life safety and emergency power) and shall make all repairs thereto other than the load-bearing repairs to the Building’s foundation and structure as provided in Section 6.02. Notwithstanding the foregoing, Tenant shall make all repairs to the Demised Premises, load-bearing, including those with respect to the Building’s foundation and structure, and not load-bearing, attributable to (a) the moving, installation, removal, use or operation of Tenant Changes, or Tenant’s Property or property of Tenant (not constituting Tenant’s Property) or of parties acting for or at the instance of Tenant or those deriving their interest in the Demised Premises through or under Tenant or (b) Tenant’s use or manner of use of the Demised Premises, including, without limitation, Tenant’s installation of racking in the Demised Premises and/or the placing of a load upon the floor of the Building exceeding the floor load per square foot area which such floor was designed to carry and which is allowed by law or (c) the acts, omissions, negligence or improper conduct of Tenant or any other parties referenced in clause (a) preceding or (d) to the extent not within the purview of (a) preceding, with respect to Tenant Changes or Tenant’s Property. All such repairs shall be in quality and class equal to the original work or installations. As used in this Section 6.01, and in Section 6.02 following, the term “repairs” or derivatives thereof shall include “replacements” where applicable. Tenant shall promptly notify Landlord of the need for any such repairs.
Section 6.02.During the Term, including any Extension Period(s), Landlord, at its sole expense, shall make all load-bearing repairs to the foundation and structure of the Building, excluding the Building’s roof and except for those repairs for which Tenant is responsible pursuant to Section 6.01 hereof or any other provisions of this Lease. Landlord covenants and agrees that on or prior to the Term Commencement Date, it shall assign to Tenant all warranties that are assigned to Landlord by Seller pursuant to the Purchase Agreement, including, the warranty covering the roof of the Building, but excluding specifically, any warranties covering the foundation and structure of the Building. In addition, Landlord warranties Landlord’s Work for a period one (1) year following the Term Commencement Date (the “Warranty Period”) and agrees that Landlord shall correct any latent defect with respect to any element of Landlord’s Work at its sole cost and expense, provided that Tenant delivers notice of such latent defect during the Warranty Period and provided further that such latent defect was not caused by the acts, omissions, negligence or improper conduct of Tenant. Upon expiration of the Warranty
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Period, Landlord shall assign to Tenant any warranties that is has obtained in connection with the performance of Landlord’s Work.
The provisions of Sections 6.01 and 6.02 hereof shall not apply to repairs required by reason of a Taking or fire or other casualty.
Section 6.03.Except for matters to the extent attributable to Landlord’s negligence or willful misconduct with respect to which Landlord shall be responsible at Landlord’s sole cost and expense, Landlord shall have no liability to Tenant by reason of any inconvenience, annoyance, interruption or injury to business arising from Landlord’s making any repairs or changes which Landlord is required or permitted by this Lease, or Requirements, to make in or to any portion of the Demised Premises; provided, however, that Landlord shall use commercially reasonable efforts to minimize interference or disruption of Tenant’s business as a result of such repairs or charges.
Section 6.04.Tenant shall not place a load upon the floor of the Building exceeding the floor load per square foot areas which such floor was designed to carry and which is allowed by law.
Section 6.05.Machines and mechanical equipment used by Tenant which cause vibration, noise, cold or heat that may be transmitted to the Building structure to such a degree as to be reasonably objectionable to Landlord shall be placed and maintained by Tenant at its expense so as to absorb such vibration, noise, cold or heat, and to prevent its transmission.
Section 6.06.Except as otherwise specifically provided in this Lease, there shall be no allowance to Tenant for a diminution of rental value and no liability on the part of the Landlord by reason of inconvenience, annoyance or injury to business arising from the making by Landlord of any repairs, alterations, additions or improvements in or to any portion of the Building or in or to fixtures, appurtenances, systems or equipment thereof. Landlord shall exercise reasonable diligence so as to minimize any interference with Tenant’s business operations, but shall not be required to perform the same on an overtime or premium pay basis.
Section 6.07.In addition to the foregoing, and not in limitation thereof, Tenant shall also, at Tenant’s own expense, undertake all replacement of all plate glass and light bulbs, flourescent tubes and ballasts, and decorating, redecorating and cleaning of the Demised Premises, and shall keep and maintain the Demised Premises in a clean condition, free from debris, trash and refuse.
Section 6.08.Tenant shall not injure, deface, permit waste nor otherwise harm any part of the Demised Premises, permit any nuisance at the Demised Premises, or install, operate or maintain any electrical equipment in the Demised Premises that shall not bear an underwriters approval.
Section 6.09.Tenant shall, at Tenant’s own expense, enter into a maintenance/service contract with a maintenance contractor, which shall provide for regularly scheduled servicing of all hot water, heating, ventilation and air conditioning systems and equipment in the Building. The maintenance contractor and the maintenance/service contract shall be subject to the approval of Landlord, which approval shall not be unreasonably withheld. The maintenance/service contract shall include, without limitation, all servicing suggested by the manufacturer, within the operations/maintenance manual pertaining to such system and/or equipment, and shall be
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effective (and a copy thereof delivered to Landlord) no later than thirty (30) days after the commencement date of this Lease.
ARTICLE VII.
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Alterations
Section 7.01.Subject to Section 7.02, Tenant will make no alterations, installations, repairs, additions, improvements or replacements (hereinafter singularly and collectively called “Tenant Changes”) in, to or about the Demised Premises without Landlord’s prior consent, which consent shall not be unreasonably withheld, conditioned or delayed, provided that Tenant otherwise complies with the terms of this Article VII.
Section 7.02.Landlord’s consent shall not be required for decorative or non-structural Tenant Changes within the Building.
Section 7.03.Tenant Changes, including but not limited to, those consented to or approved by Landlord or within the purview of Section 7.02 hereof, shall be performed in accordance with the following provisions:
(a)No part of the Building or the Demised Premises shall be materially and adversely affected;
(b)The proper functioning of any of the mechanical, HVAC, electrical, plumbing, sanitary, or other systems of the Building shall not be materially and adversely affected;
(c)At least ten (10) Business Days prior to commencement of any Tenant Changes, Tenant will furnish Landlord with a statement in reasonable detail of the nature and scope of the proposed Tenant Changes, an estimate of the cost thereof, and coordinated plans and specifications therefor in Auto Cad format, and if the cost of the proposed Tenant Changes can reasonably be estimated by Landlord to exceed $100,000, the foregoing plans and specifications as well as the estimate shall be prepared and signed by an architect licensed by the State of California to whom Landlord has no reasonable objection; and if the nature of the proposed Tenant Changes, regardless of cost, in the sole discretion of Landlord requires it, the foregoing plans and specifications must also be approved by a professional, unaffiliated engineer, licensed by the State of California and selected by Landlord and approved by Tenant, whose reasonable charge shall be paid by Tenant, as Additional Rent within thirty (30) days after being billed therefor;
(d)Except with respect to Tenant’s Changes performed pursuant to Section 7.02 above, Tenant agrees to pay to Landlord, as Additional Rent within thirty (30) days after being billed therefor, a sum equal to Landlord’s actual and reasonable costs and expenses for reviewing the plans and specifications for such proposed Tenant Changes;
(e)Tenant Changes shall be done only by contractors and subcontractors satisfactory to and first approved by Landlord. Such approval will not be unreasonably withheld, conditioned or delayed. However, elements of such Tenant Changes, regardless of cost, of a
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nature described in subdivisions (a) and (b) hereof shall be performed by contractors or subcontractors, as the case may be, satisfactory to and first approved by Landlord;
(f)Tenant Changes shall be commenced promptly and prosecuted to completion by Tenant diligently and in a good and workmanlike manner;
(g)Tenant Changes shall be effected in compliance with the foregoing plans and specifications, Requirements and this Lease (including applicable provisions of this Lease);
(h)Tenant, at Tenant’s sole cost and expense, shall file all required plans and specifications necessary to obtain, and shall obtain, all Approvals pertaining to Tenant Changes;
(i)Tenant Changes are to be effected in a manner which will not cause or create a dangerous or hazardous condition;
(j)All costs and expenses of or incidental to Tenant Changes, including those reflected in clause (d) of this Section 7.03, shall be borne solely by Tenant who shall establish to the reasonable satisfaction of Landlord prior to the commencement thereof and during its progress that these costs can and will be paid when due and that completion of the Tenant Changes will be effected as herein and in the other provisions of this Lease provided;
(k)Throughout the performance of Tenant Changes, Tenant, in addition to and not in limitation of the provisions of Article XIV hereof, shall maintain or cause to be maintained (i) Worker’s Compensation insurance, in statutory limits, for all eligible workmen engaged in performing Tenant Changes and (ii) Builder’s All-Risk insurance in an amount equal to the value of Tenant Changes on the completion thereof naming Landlord and Tenant as insureds, as their interests may appear, and shall furnish Landlord with certificates evidencing the existence of such insurance prior to the commencement of any Tenant Changes, each of which by its terms shall state that such insurance is not to be terminated without giving Landlord not less than thirty (30) days prior notice of such termination; and
(l)Upon completion of any Tenant Changes, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of Riverside in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and Landlord shall cooperate with Tenant, at no cost or expense to Landlord, in the preparation and filing of same to the extent same is required to be filed by an ‘owner’.
Section 7.04.Landlord’s approval of Tenant Changes or of plans, specifications or working drawings therefor or of the architect or professional engineer shall create no responsibility or liability on the part of Landlord, as to the contents of such plans, specifications and drawings, for their completeness, design sufficiency, or for the performance of the architect or professional engineer or for compliance with Requirements, or otherwise in respect of or attributable to any of the foregoing.
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ARTICLE VIII.
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Access to Demised Premises
Section 8.01.Landlord or Landlord’s agents shall have the right to enter the Demised Premises, including the Building, in any emergency at any time, and, at other reasonable times upon reasonable prior notice to Tenant, to examine the same and to make such repairs, replacements and improvements as Landlord may deem reasonably necessary and desirable to the Building or to any other portion of the Demised Premises or which Landlord may elect to perform following Tenant’s failure to make repairs or perform any work which Tenant is obligated to perform under this Lease, or for the purpose of complying with laws, regulations and other directions of Governmental Authorities. Except as otherwise expressly provided herein, Tenant shall not be entitled to any abatement of rent while such work is in progress or to any damages by reason of loss or interruption of business or otherwise. Throughout the term hereof Landlord shall have the right to enter the Demised Premises, including the Building, at reasonable hours upon reasonable prior notice for the purpose of showing the same to prospective purchasers or mortgagees of the Building or others and during the last nine (9) months of the term for the purpose of showing the same to prospective tenants. If Tenant is not present to open and permit an entry into the Demised Premises, including the Building, Landlord or Landlord’s agents may enter the same whenever such entry may be necessary or permissible by master key or other lawful means and, provided reasonable care is exercised to safeguard Tenant’s Property, such entry shall not render Landlord or its agents liable therefor, nor in any event shall the obligations of Tenant hereunder be affected. In addition, without incurring any liability to Tenant, Landlord may permit access to the Demised Premises, including the Building, and open the same, whether or not Tenant shall be present, upon demand of any receiver, trustee, assignee for the benefit of creditors, sheriff, marshal or court officer entitled to, or reasonably purporting to be entitled to, such access for the purpose of taking possession of, or removing, Tenant’s Property or for any other lawful purpose (but this provision and any action by Landlord hereunder shall not be deemed a recognition by Landlord that the person or official making such demand has any right or interest in or to this Lease, or in or to the Demised Premises), or upon demand of a Governmental Authority. During the last six (6) months of the term, Landlord or Landlord’s agents shall have the right to place commercially reasonable signs in the front of the Demised Premises, or on any part thereof, offering the premises “For Rent” or “For Sale”, and Tenant hereby agrees to permit the same to remain thereon without hindrance or molestation.
ARTICLE IX.
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Compliance with Laws
Section 9.01.Tenant shall comply, at its cost and expense, with all Requirements applicable to the Demised Premises or any part thereof, and the manner of use, occupancy, operation, maintenance, repair or alteration of the Building or Demised Premises, by Tenant and all persons acting for Tenant or deriving their right or interest in respect of the Building or Demised Premises from or under Tenant, including, without limitation, the Americans With Disabilities Act, and any Requirements hereafter imposed pertaining to life safety, fire control and emergency lighting. Tenant shall periodically test all such life safety, fire control and emergency lighting equipment in the Building and maintain same in good repair. Notwithstanding the
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foregoing, Landlord covenants and agrees that on the Term Commencement Date, the Demised Premises shall be in compliance with all Requirements.
Section 9.02.Tenant covenants and agrees:
(a)to comply with all federal, state, and local environmental, and health and safety laws (including relevant statutes, regulations, and administrative agency requirements) (hereinafter referred to as “Environmental Laws”) during the term of this Lease and to obtain permits and other governmental authorizations required by Environmental Laws for Tenant’s business and operations;
(b)to obtain Landlord’s authorization before storing, treating, or disposing of any substance or material which may pose a threat to human health or the environment, including any substance or material covered by any Environmental Law; provided, however, that notwithstanding anything to the contrary contained in this Lease, Tenant shall be permitted to use, maintain and store within the Demised Premises de minimis quantities of Hazardous Substances to the extent customarily used, maintained, sold and/or stored in connection with the Permitted Use so long as any such Hazardous Materials are used, maintained, sold and stored by Tenant in accordance with applicable Environmental Laws;
(c)to notify Landlord immediately of (i) the existence of any release of any substance or material at the Demised Premises which may pose a threat to human health or the environment, including any substance or material covered by any Environmental Law including, but not limited to, petroleum-related materials (hereinafter referred to as “Hazardous Substances”), (ii) violation of an Environmental Law at or affecting the Demised Premises, or (iii) other environmental condition at the Demised Premises that could subject Tenant or Landlord to potential legal liability;
(d)that, immediately upon discovery of a condition described in clause (c) preceding, Tenant shall, at its expense, cure or remediate the condition in a manner required by applicable Environmental Laws. In the event that the Tenant fails to cure or remediate the condition, Landlord shall have the right, after the expiration of applicable notice and cure periods, to cure or remediate the condition in a manner required by applicable Environmental Laws. Any costs and expenses, including reasonable attorneys’ fees, incurred by Landlord to cure or remediate such condition shall constitute Additional Rent due and payable to Landlord within thirty (30) days of written demand therefor;
(e)that, upon reasonable notice to Tenant at any time during the term of the Lease, Landlord and Landlord’s representatives shall have the right, at its sole cost and expense, to inspect the Demised Premises and Tenant’s operations for the purpose of determining the existence of any release of Hazardous Substances and Tenant’s compliance with Environmental Laws. During such inspection, Tenant agrees to reasonably cooperate with Landlord and Landlord’s representatives, by providing access to any area of the Demised Premises and any records pertinent to the inspection provided, however, that in performing such inspection, Landlord and Landlord’s representatives shall not unreasonably interfere with Tenant’s operations;
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(f)[Intentionally Omitted];
(g)that Tenant shall, at Tenant’s sole cost and expense, perform an environmental inspection of the Demised Premises within thirty (30) days prior to the expiration of the Lease and remove any and all Hazardous Substances used, stored, released, treated or disposed of at the Demised Premises, except to the extent such Hazardous Substances existed at the Demised Premises prior to the Term Commencement Date (as set forth in Landlord’s Environmental Report [as hereinafter defined]). The inspection shall be performed by Tenant to Landlord’s satisfaction by an environmental consulting firm approved by Landlord and include a visual examination of the Demised Premises and appropriate sampling of the Demised Premises. Within ten (10) days of Landlord’s receipt thereof, Landlord shall provide Tenant with copies of the environmental reports/inspections performed by or on behalf of Landlord in connection with its acquisition of the Building and the Land (collectively, “Landlord’s Environmental Report”);
(h)to indemnify and defend Landlord and Landlord’s agents, servants, employees, officers, directors, shareholders, partners, members, managers, representatives or designees from and against all liabilities, claims, actions, suits, demands, judgments, damages, expenses, penalties and costs, including but not limited to any injury or damage to any person or property associated, either directly or indirectly, with Tenant’s violation of any Environmental Law, the commencement of any action by a regulatory agency or a third party against Tenant or Landlord with respect to Tenant’s use or occupancy of the Demised Premises, the release of any Hazardous Substance at the Demised Premises that is or was related to Tenant’s use or occupancy of the Demised Premises, and Tenant’s breach of any provision of this Lease. Tenant’s obligation to indemnify Landlord shall extend to and cover any cost, expenses or penalties incurred in performing investigatory and remedial activities at the Demised Premises; and
(i)that the rights and obligations provided under this Section of the Lease shall survive the expiration of the Lease.
Section 9.03.Landlord covenants and agrees to remediate, with diligence and in compliance with Requirements, all Hazardous Materials now within the Demised Premises or hereafter introduced into the Demised Premises by it or by any of its agents or contractors and to indemnify, protect and save Tenant harmless from and against any and all damages, losses, liability, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, attorneys’ and experts’ fees and disbursements) which may at any time be imposed by, incurred by or asserted or awarded against Tenant arising out of the failure of Landlord to do so.
ARTICLE X.
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Rules and Regulations
Section 10.01.Tenant shall observe strictly with the rules and regulations set forth in Exhibit B annexed hereto and such other and further reasonable rules and regulations as Landlord or Landlord’s agents may from time to time adopt upon no less than thirty (30) days prior notice to
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Tenant (such rules and regulations as have been or may hereafter be adopted or amended are hereinafter the “Rules and Regulations”).
ARTICLE XI.
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Right to Perform
Section 11.01.If Tenant shall default in the observance or performance of any obligation of Tenant under this Lease beyond applicable notice and cure periods provided herein for the cure thereof, then, unless otherwise provided elsewhere hereunder, Landlord may upon ten (10) days notice to Tenant, perform such obligation of Tenant without thereby waiving such default. If Landlord, in connection therewith incurs any costs including, but not limited to, reasonable attorneys fees in instituting, prosecuting or defending any action or proceeding, such costs with interest at the rate of seven and one-half (7.5%) percent per annum, shall be deemed to be Additional Rent hereunder and shall be paid by Tenant to Landlord within thirty (30) days of rendition of any bill or statement to Tenant therefor.
Section 11.02.If Landlord shall default in the observance or performance of any obligation of Landlord under this Lease beyond applicable notice and cure periods provided herein for the cure thereof, then, unless otherwise provided elsewhere hereunder, Tenant may upon ten (10) days notice to Landlord, perform such obligation of Landlord without thereby waiving such default. If Tenant, in connection therewith incurs any costs including, but not limited to, reasonable attorneys fees in instituting, prosecuting or defending any action or proceeding, such costs with interest at the rate of seven and one-half (7.5%) percent per annum, shall be paid by Landlord to Tenant within thirty (30) days of rendition of any bill or statement to Landlord therefor. In the event Landlord fails to reimburse Tenant for such costs within the aforementioned thirty (30) day period, then Tenant shall have the right to offset such amounts against the Base Rent otherwise payable hereunder until such time as such costs have been fully recovered by Tenant.
ARTICLE XII.
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Liability of Landlord
Section 12.01.Landlord or its employees, agents or managing agents shall not be liable for any damages or injury to property of Tenant or of any other person, including property entrusted to employees of Landlord, nor loss of or damage to any property of Tenant by theft or otherwise, nor for any injury or damage to persons or property resulting from any cause whatsoever arising from the acts or neglect of any Tenant, occupant, invitee or licensee of the Building, nor for any consequential damages or loss of business suffered by Tenant, or from any other cause whatsoever, unless caused by the negligence, willful misconduct, unlawful act or omission of Landlord, nor shall Landlord or its agents, employees, or managing agents be liable for any such damage caused by other persons in, upon or about the Building, or caused by operations in construction of any private, public or quasi-public work. Notwithstanding the foregoing, subject to the waiver of subrogation described in Section 14.03 herein, in no event shall Landlord be liable for any loss or damage for which Tenant has, or is required hereunder to carry, insurance.
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Section 12.02.Notwithstanding anything in this Lease to the contrary (it being intended that in the case of a conflict, the provisions of this Section 12.02 always shall prevail and control), Tenant shall look only to the Landlord’s estate in the Demised Premises (or the proceeds of any sale or casualty or any condemnation award therefrom), at the time recourse is sought, for the satisfaction of Tenant’s remedies against Landlord or the collection of a judgment (or other judicial process) requiring the payment of money by Landlord hereunder and, no other property or assets of Landlord shall be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies under or with respect to this Lease, the relationship of landlord and tenant hereunder or Tenant’s use or occupancy of the Building, or otherwise.
Section 12.03.(a) Without limiting the provisions of Section 12.02 hereof, any agreement, obligation or liability of Landlord arising under this Lease is made, entered into and incurred by Landlord upon the express condition that neither any trustee, shareholder, partner, member, director, officer, employee, principal, parent, agent or advisor of Landlord, assumes nor shall be held to any personal liability hereunder for whatsoever reason including fault on the part, for example, of any one or more of the foregoing, and resort shall not be had to the private property of any such trustee, shareholder, partner, member, director, officer, employee, principal, parent, agent or advisor.
(b)Any agreement, obligation or liability of Tenant arising under this Lease is made, entered into and incurred by Tenant upon the express condition that neither any trustee, shareholder, partner, member, director, officer, employee, principal, parent, agent or advisor of Tenant, assumes nor shall be held to any personal liability hereunder for whatsoever reason including fault on the part, for example, of any one or more of the foregoing, and resort shall not be had to the private property of any such trustee, shareholder, partner, member, director, officer, employee, principal, parent, agent or advisor.
Section 12.04.Landlord shall be deemed in default under the terms of this Lease only if Landlord shall fail to observe, fulfill or perform an obligation specifically imposed on Landlord under the terms of this Lease and such failure is not cured by Landlord within thirty (30) days after Tenant shall have given Landlord written notice of such failure, in reasonable detail, provided, however, that so long as Landlord commences cure within such thirty (30) days period and thereafter prosecutes such cure with reasonable diligence, Landlord will be allowed such additional time to effect such cure as may be reasonably necessary without being deemed in default with respect to such failure. No action taken by Landlord in connection with any such notice given to it by Tenant shall be construed to be an admission that any such default exists.
Section 12.05.Any claim or defense available to Tenant arising out of this Lease or the negotiations preceding it shall be barred unless Tenant gives Landlord notice thereof in reasonable detail within twelve (12) months after the first occurrence of the act, omission, event or condition that gave rise to such claim or defense, provided, however, that the provisions hereof or the period herein specified shall not be applicable, if and to the extent in direct conflict with another provision of this Lease or to the extent that such act, omission, event or condition was not reasonably knowable by Tenant within such twelve (12) month period, in which event such notice must be given by Tenant within twelve (12) months of first having notice thereof.
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Section 12.06.Under no circumstances shall (a) either party be liable to the other party for consequential, special, exemplary or punitive damages or any damages in the nature of any of the foregoing or damages for loss of business or business opportunities, provided, that (i) this sentence will not apply to damages resulting from Tenant’s holdover, but only to the extent described in Section 25, and (ii) Landlord’s loss of rental income shall not constitute consequential damages for the purposes of this Lease; or (b) any breach by Landlord of its obligations hereunder entitle Tenant to terminate this Lease.
Section 12.07.Landlord, notwithstanding any contrary provisions of this Lease, shall not be liable for damages to Tenant or its subtenants or Affiliated Entity affiliates, except for its negligence or willful misconduct, to either person or property. In addition, Landlord shall not be deemed to have evicted Tenant or effected an eviction of Tenant or a termination of this Lease or, be subject to any abatement of Base Rent or Additional Rent and Tenant shall not be relieved from performance of any covenant on its part to be performed hereunder by reason of (i) failure by Landlord to fulfill its obligations hereunder, (ii) breakdown of equipment or machinery, (iii) causes or circumstances attributable to events or conditions outside the Demised Premises boundaries, or (iv) the acts or omissions of others. Landlord shall use reasonable diligence to make such repairs as may be required to machinery or equipment within the Demised Premises to provide restoration of services required hereunder to be provided by Landlord to Tenant and, where the cessation or interruption of such service has occurred due to circumstances or conditions beyond the Demised Premises boundaries, or the acts or omissions of others, to seek restoration of such services by diligent application or request to the provider.
ARTICLE XIII.
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Utilities
Section 13.01.The Demised Premises shall be delivered to Tenant on the Term Commencement Date with all utilities serving the Demised Premises in good working order and condition. As of the Term Commencement Date, Tenant shall contract directly and shall pay for all charges for or costs of electricity (including heating, if the Demised Premises or any part thereof that are serviced by electric heating), gas, water, and fuel oil, if any, for the Demised Premises. Tenant shall execute in its own name all account cards or applications required for the installation of electric or gas service, if any, or the provision of such service or services to the Demised Premises. In addition, Tenant shall pay overhead fire sprinkler charges, if any, or any other charge or cost imposed by any Governmental Authority or subdivision, in connection with the maintenance, occupation, or use of the Demised Premises. Tenant shall further be responsible for the installation and maintenance of its telephone, data and office equipment and lines.
Section 13.02.Tenant’s use of electric current in the Building shall not at any time exceed the capacity of any of the electrical conductors and equipment in or otherwise serving the Building.
Section 13.03.Landlord shall have no liability to Tenant for any loss, damage or expense sustained or incurred by reason of any change, failure, inadequacy, unsuitability or defect in the supply or character of the electric energy furnished to the Building or if the quantity or character of the electric energy is no longer available or suitable for Tenant requirements, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement
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in whole or in part hereunder, unless such interruption or curtailment was directly caused by the negligence or willful misconduct of Landlord or its employees, agents or contractors.
ARTICLE XIV.
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Insurance
Section 14.01.During the term of this Lease, Tenant shall pay to Landlord annually, as Additional Rent, the premiums for the following types of insurance, if any, maintained by Landlord: ((i) Insurance against loss or damage to the Building by fire (and against such other risks as would be covered by “Special Perils” insurance, including flood and earth movement); (ii) Boiler insurance on any steam boiler, pressure vessel and pressure piping; (iii) Rental insurance insuring Landlord against any termination or cessation of any rentals or additional rentals by reason of perils covered by any insurance contracts referred to in this Lease for twelve (12) months; (iv) Flood insurance, if and as required by any fee mortgagee; and (v) Commercial General Liability Insurance and Excess Liability (Umbrella) Insurance against all claims, demands or actions for personal injury to or death of any one person in amounts arising from, related to, or in any way connected with the conduct and operation of the Building, the Land or the Demised Premises in commercially reasonable amounts reasonably determined by Landlord. All losses shall be adjusted with the insurance companies by Landlord and shall be paid to Landlord or as directed by Landlord. Tenant shall pay the premiums for such insurance within thirty (30) days after bills therefor are mailed to Tenant.
Section 14.02.Tenant shall maintain with responsible companies which are A rated or better in Best’s Insurance Guide: (i) Commercial General Liability Insurance, against all claims, demands or actions for personal injury to or death of any one person in an amount of not less than $5,000,000 and for injury to or death of more than one person in any one accident or occurrence to the limit of not less than $5,000,000 and for damage to property in an amount of not less than $5,000,000 made by or on behalf of any person, arising from, related to, or in any way connected with the conduct and operation of Tenant’s use of or occupancy of the Demised Premises, or caused by actions or omissions to act, where there is a duty to act, of Tenant, its agents, servants and contractors, which insurance shall name Landlord, its managing and leasing agents, mortgagee, if any, and any other designees as additional insureds; (ii) property insurance against hazards covered by an all risk coverage insurance policy (including fire, extended coverage, vandalism, malicious mischief and sprinkler leakage) as Landlord may reasonably, from time to time, require, covering all fixtures and equipment, stock in trade, furniture, furnishings, improvements or betterments installed or made by Tenant in, on or about the Demised Premises to the extent of at least 100% of their replacement value, without deduction for depreciation, but in any event in an amount sufficient to prevent Tenant from becoming a co-insurer under provisions of applicable policies; (iii) plate glass insurance covering the Demised Premises; and (iv) worker’s compensation insurance, in statutory limits, covering all persons employed by Tenant or in connection with any work performed by Tenant. Said Commercial General Liability Insurance shall also contain provisions for contractual liability insurance under the commercial general liability section of the insurance certificate in an amount not less than $5,000,000, and business interruption insurance covering Tenant’s business. All of Tenant’s insurance shall be in form reasonably satisfactory to Landlord and shall provide that it shall not be subject to cancellation, termination or change except after at least thirty (30) days prior written notice to
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Landlord. All policies required pursuant to this Section 14.02 or duly executed certificates for the same shall be deposited with Landlord prior to the day Tenant is expected to take occupancy and upon renewals of said policies prior to the expiration of the term of such coverage. All such policies or certificates shall be delivered with satisfactory evidence of the payment of the premium therefor.
Section 14.03.Notwithstanding anything to the contrary contained in this Lease, Landlord and Tenant shall each look first to any insurance in its favor before making any claim against the other party for recovery for loss or damage resulting from fire or other casualty, and to the extent that such insurance is in force and collectible and to the extent permitted by law, Landlord and Tenant each hereby releases and waives all right of recovery against the other or anyone claiming through or under each of them by way of subrogation or otherwise. The foregoing release and waiver shall be in force only if both releasors’ insurance policies contain a clause providing that such a release or waiver shall not invalidate the insurance. If, and to the extent that, such waiver can be obtained only by the payment of additional premiums, then the party benefiting from the waiver shall pay such additional premium within ten (10) days after written demand or shall be deemed to have agreed that the party obtaining insurance coverage shall be free of any further obligation under the provisions hereof with respect to waiver of claims. If the waiver cannot be obtained from either Landlord’s carrier or Tenant’s carrier, then neither party shall be constrained to choose a different carrier to obtain insurance (or, in the alternative, if a different carrier is required, then the party requiring the waiver shall pay the difference in premium from the initial carrier selected to the carrier required to be designated). However, in no event shall any party be required to select an excess or non-licensed carrier in the State of California or one that has a rating less than A- Best rating. The provisions of this Article shall be considered an express agreement governing any cause of damage or destruction of the Demised Premises by fire or other casualty, and Sections 1932(2) and 1933(4) of the California Civil Code, providing for such a contingency in the absence of an express agreement, and any other law of the like import, now or hereafter in force, shall have no application in such case.
Section 14.04.If, due to Tenant’s use or occupancy, or abandonment, of the Demised Premises, or Tenant’s failure to occupy the Demised Premises as herein provided, any insurance carrier shall threaten the cancellation of any insurance, Tenant shall promptly remedy such condition. In the event Tenant shall fail to do so, Landlord may enter the Demised Premises and correct any such condition at Tenant’s cost and expense, and any such cost and expense shall be Additional Rent payable by Tenant. If, due to Tenant’s use or occupancy, or abandonment, of the Demised Premises, or Tenant’s failure to occupy the Demised Premises as herein provided, any insurance shall be cancelled by the insurance carrier, then, in any of such events Tenant shall indemnify and hold Landlord harmless against any loss which would have been covered by such insurance.
ARTICLE XV.
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Real Estate Taxes
Section 15.01.Commencing on and as of the Term Commencement Date, Tenant shall pay all Taxes (as hereinafter defined) on the Demised Premises on or prior to the last day on which Taxes can be paid without interest or penalty.
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Section 15.02.For the purposes of this Article, the term “Taxes” shall include the sum of any and all taxes, real estate taxes and assessments, special assessments, water and sewer rents and charges, levies, general or special, ordinary or extraordinary, unforeseen or foreseen, of any kind or nature whatsoever, and each and every installment thereof which shall or may during the Term of this Lease be levied, assessed, imposed, become due and payable, or liens upon or arising in connection with the use, occupancy or possession of or grow out of, or for the Building and/or the Land, or any part thereof as if the Building and Land were the sole asset of Landlord. The parties acknowledge and agree that as used herein, “Taxes” includes any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax, it being acknowledged by Tenant and Landlord that Proposition 13 was adopted by the voters of the State of California in the June 1978 election and that assessments, taxes, fees, levies and charges may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal and for other governmental services formerly provided without charge to property owners or occupants (it is the intention of Tenant and Landlord that all such new and increased assessments, taxes, fees, levies, and charges and all similar assessments, taxes, fees, levies and charges be included within the definition of Taxes for purposes of this Lease). If at any time during the Term of this Lease the methods of taxation prevailing at the execution of this Lease shall be altered so that in lieu of or as a substitute for the whole or any part of the taxes, assessments, levies, impositions or charges now levied, assessed or imposed on real estate or the improvements thereon there shall be levied, assessed or imposed (i) a tax, assessment, levy, imposition or charge wholly or partially payable as a capital levy or otherwise on the rents received therefrom, or (ii) a tax, assessment, levy, imposition or charge measured by or based in whole or in part upon the Demised Premises and imposed upon Landlord, or (iii) a tax, imposition, license fee or charge measured by or otherwise in any way based upon the rents payable by Tenant to Landlord, or (iv) a tax, imposition, license fee or charge measured by or otherwise in any way based upon the rent receivable by Landlord for the Building or any portion thereof and/or the Land or any other building or other improvements constructed on the Land, or (v) a tax, license fee or charge imposed on Landlord which is otherwise measured by or based in whole or in part, upon the Building or any portion thereof and/or the Land or any other building or other improvements constructed on the Land (whether based upon the area or value thereof or other measure), or (vi) any other tax or levy imposed in lieu of or as a substitute for Taxes which are levied, assessed or imposed as of the date of this Lease, then in any such event, the same shall be included in the computation of Taxes hereunder. Except as otherwise set forth in the preceding sentence, the term “Taxes” shall not include federal, state or local income taxes; franchise, gift, transfer, excise, capital stock, estate or inheritance taxes; penalties and/or interest for late payments. A tax bill or copy thereof shall be conclusive evidence of the amount of Taxes or installments thereof.
Section 15.03.If at any time during the Term the holder of any superior mortgage requires the establishment of an escrow account for the payment of Taxes, Tenant shall, at the election of Landlord, pay to Landlord, within thirty (30) days after receipt of notice of Landlord’s election provided herein, the amount of Landlord’s initial deposit into such escrow account and thereafter, commencing on the first day of the month after receipt said notice, the amount required by the superior mortgagee to be deposited monthly into such account. Such monthly escrow payments shall be subject to adjustments as required by the superior mortgagee.
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Section 15.04.Only Tenant shall be eligible to institute proceedings to reduce the assessed valuation of the Land or the Building. In the event Tenant shall obtain a tax refund as a result of any such reduction proceedings for any period after the Term Commencement Date, then Tenant shall be entitled to the entire refund obtained; it being understood and agreed that Landlord shall be entitled to the entire refund obtained that is attributable to any period prior to the Term Commencement Date. Notwithstanding anything contained to the contrary herein, Tenant shall not be entitled to any refund in excess of Taxes paid by Tenant hereunder.
Section 15.05.If the Term of this Lease shall terminate on any date other than the last day of a tax fiscal year, the amount payable by Tenant during the tax fiscal year in which such termination occurs shall be prorated on the basis that the number of days from the commencement of said tax fiscal year to and including said termination date bears to three hundred sixty-five (365). A similar proration shall be made for the tax fiscal year in which Tenant’s obligation to pay Taxes first arises.
Section 15.06.In no event shall any adjustment of the Taxes payable hereunder result in a decrease in Base Rent or Additional Rent payable pursuant to any other provision of this Lease, it being agreed that the payment of Additional Rent under this Article is an obligation supplemental and in addition to Tenant’s obligation to pay Base Rent.
ARTICLE XVI.
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Condemnation
Section 16.01.If the whole of the Building shall be taken for any public or quasi-public use by any lawful power or authority by exercise of the right of condemnation or of eminent domain, or by agreement between Landlord and those having the authority to exercise such right (hereinafter called “Taking”), the term of this Lease and all rights of Tenant hereunder, except as hereinafter provided, shall cease and expire as of the date of vesting of title as a result of the Taking, and the Base Rent and Additional Rent payable under this Lease shall abate from and following the date on which the Taking occurs.
Section 16.02.In the event of a Taking of less than the whole, but more than 20%, of the area of the Building, or a portion of the parking area in excess of 25% thereof, the term of this Lease and all rights of Tenant hereunder, except as hereinafter provided, shall cease and expire as of the date of vesting of title as a result of the Taking, and the Base Rent and Additional Rent payable under this Lease shall abate from and following the date on which the Taking occurs. Notwithstanding the provisions of this Section 16.02, in the event Landlord elects to replace that portion of the parking area taken in excess of 25% thereof on that portion of the Land not taken, or on adjoining property, and such replacement can be effected so as not to interfere materially with Tenant’s occupancy of the Demised Premises, this Lease shall continue in full force and effect. In the event that Landlord elects, and is able, to replace that portion of the Building taken in excess of 20% thereof, by extending that portion of the Building remaining after the Taking, this Lease will remain in full force and effect, and the abatement provision set forth in Section 16.03, below, shall apply.
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Section 16.03.In the event of a Taking of less than 20% of the area of the Building, or a portion of the parking area equal to or less than 25% thereof, this Lease shall cease and expire in respect only of the portion of the Building and/or parking area taken upon vesting of title as a result of the Taking and, (i) the new Base Rent payable under this Lease shall be the product of the total Base Rent payable under this Lease multiplied by a fraction, the numerator of which is the square foot area of the Building remaining after the taking, and the denominator of which is the square foot area of the Building immediately preceding the Taking, and (ii) the net award for the Taking shall be paid to and first used by Landlord (subject to the rights of any mortgagee and/or fee owner) to restore the portion of the Demised Premises and the Building remaining after the Taking to substantially the same condition and tenantability (hereinafter called “pre-taking condition”) as existed immediately preceding the date of the Taking. Notwithstanding the foregoing, if the Taking results in the portion of the Demised Premises remaining after the Taking being inadequate, in the reasonable judgment of either party for the efficient, economical operation of Tenant’s business conducted at such time in the Demised Premises, either party may elect to terminate this Lease by giving notice to the other of such election not more than thirty (30) days after the actual Taking by the condemning authority stating the date of termination, which date shall be not more than thirty (30) days after the date of such notice to such party, and upon said date, this Lease and the term hereof shall cease and expire.
Section 16.04.In the event of a Taking of less than the whole of the Demised Premises which occurs during the period of one year next preceding the termination date of this Lease, Landlord may elect to terminate this Lease by giving notice to Tenant of such election, not more than thirty (30) days after the actual Taking by the condemning authority, stating the date of termination, which date of termination shall be no more than thirty (30) days after the date on which such notice of termination is given and upon the date specified in such notice, this Lease and the term hereof shall cease. On or before such termination date, Tenant shall vacate the Demised Premises, and any of Tenant’s Property remaining in the Demised Premises subsequent to such termination date shall be deemed abandoned by Tenant and shall become the property of Landlord.
Section 16.05.In the event of a Taking of the Demised Premises or any part thereof, and whether or not this Lease is terminated, Tenant shall have no claim against Landlord or the condemning authority for the value of the unexpired term of this Lease. Tenant agrees that in any condemnation proceeding, (a) Tenant may make a separate claim only for the value of Tenant’s fixtures, equipment and moving expenses and (b) Tenant shall promptly cooperate with Landlord, at no cost to Tenant, in executing such documents, releases, waivers and/or consents required by the condemning authority confirming Landlord’s rights to any award (or any advance payment respecting same) pursuant to this Section 16.05. Subject to item (a) in the immediately proceeding sentence, all compensation from a Taking, whether for the whole or part of the Demised Premises, the Building or the Land or otherwise, shall be the property of Landlord, whether such damages shall be awarded as compensation for diminution in the value of the leasehold or to the fee of the Demised Premises, and Tenant hereby assigns to Landlord all of Tenant’s right, title and interest in and to any and all such compensation.
Section 16.06.To the extent permitted by applicable law, Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil Procedure.
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ARTICLE XVII.
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Damage by Fire or Other Cause
Section 17.01.Tenant shall give prompt notice to Landlord in case of fire or other damage to the Demised Premises or the Building.
Section 17.02.If the Demised Premises or the Building shall be damaged by fire or other casualty, Landlord, at Landlord’s expense, shall repair such damage. However, Landlord shall have no obligation to repair any damage to, or to replace, Tenant’s personal property or any other property or effects of Tenant. If the Demised Premises shall be rendered untenantable by reason of any such damage, the Base Rent and Additional Rent shall abate for the period from the date of such damage to the date when such damage shall have been substantially repaired, and if only a part of the Demised Premises shall be so rendered untenantable, the Base Rent and Additional Rent shall abate for such period in the proportion which the rentable area of the Demised Premises so rendered untenantable bears to the total rentable area of the Demised Premises. However, if, prior to the date when all of such damage shall have been repaired, any part of the Demised Premises so damaged shall be rendered tenantable and shall be used or occupied by Tenant or other persons claiming through or under Tenant, then the amount by which the Base Rent and Additional Rent shall abate shall be equitably apportioned for the period from the date of any such use or occupancy to the date when all such damage shall have been repaired. Tenant hereby waives and releases its right to make repairs at Landlord’s expense under Sections 1932(2), 1933(4), 1941 and 1942 of the California Civil Code or under any similar laws, statutes, or ordinances now or hereafter in effect. The provisions of this Lease, including Article 14 above and this Article 17, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or any other portion of the Project, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion of the Project.
Section 17.03.Notwithstanding the foregoing provisions of this Article, if prior to or during the term of this Lease, the Building shall be so damaged by fire or other casualty that, in Landlord’s opinion, substantial alteration, demolition, or reconstruction of the Building shall be required, then, in such event, Landlord at Landlord’s option, may give to Tenant, within sixty (60) days after such fire or other casualty, a thirty (30) days’ written notice of termination of this Lease and, in the event such notice is given, this Lease and the Term shall come to an end and expire (whether or not said Term shall have commenced) upon the expiration of said thirty (30) days with the same effect as if the date of expiration of said thirty (30) days were the Expiration Date, and the Base Rent and Additional Rent shall be apportioned as of such date and any prepaid portion for any period after such date shall be refunded by Landlord to Tenant.
Section 17.04.If this Lease shall not be terminated as provided in Section 17.03 hereof, Landlord shall, at its expense, repair or restore the Demised Premises with reasonable diligence and dispatch, substantially to the condition immediately prior to the casualty, except that Landlord
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shall not be required to repair or restore any of Tenant’s leasehold improvements or betterments (except to the extent installed as part of Landlord’s Work hereunder), furniture, furnishings, decorations or any other installations made at Tenant’s expense. All insurance proceeds payable to Tenant for such items shall be held in trust by Tenant and upon the completion by Landlord of repair or restoration, Tenant shall prepare the Demised Premises for occupancy by Tenant in the manner obtaining immediately prior to the damage or destruction in accordance with plans and specifications approved by Landlord.
Section 17.05.If the Demised Premises, or any portion thereof, shall be damaged or rendered untenantable by fire or other casualty, and Landlord has not exercised its option to terminate this Lease (as set forth in 17.03 above), then Landlord shall, as soon as reasonably practicable following the occurrence of the subject fire or other casualty, deliver to Tenant written notice of Landlord’s estimated time for restoration of the Demised Premises. If (1) more than ten (10%) of the Demised Premises was damaged or rendered untenantable by fire or other casualty, and (2) the estimated date of completion of such restoration work (a) falls within the last twelve (12) months of the Term, or (b) is more than six (6) months following the date of occurrence of the subject fire or other casualty, then in any such instance Tenant shall have the right to terminate this Lease by written notice delivered to Landlord within ten (10) days following receipt of such written notice by Landlord. In the case of proper exercise of any termination right afforded to Tenant under this Section 17.05, this Lease shall terminate as of the date of delivery of such written notice by Tenant, and neither party shall have any further obligation or liability to the other hereunder (except for obligations or liabilities previously accrued which remain unsatisfied).
Section 17.06.In no event shall Landlord be liable to Tenant for any consequential damages to or loss of business suffered by Tenant by reason of any damages or casualty, regardless of fault, and apart from the apportionment of rent required under Section 17.02 in the event a portion of the Demised Premises is rendered untenantable, Tenant’s sole recourse for any damages shall be against Tenant’s insurance company, regardless of fault, and Tenant waives on its own behalf and on behalf of any insurer, any claim therefor against Landlord.
ARTICLE XVIII.
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Subordination, Attornment, Notice to Lessors and Mortgagees
Section 18.01.Subject to the further terms and conditions of Section 18.08 hereof, this Lease, and all rights of Tenant hereunder, are and shall be subject and subordinate in all respects to all mortgages and building loan agreements, which may now or hereafter affect the Demised Premises, whether or not such mortgages shall also cover other lands and/or buildings, to each and every advance made or hereafter to be made under such mortgages, and to all renewals, modifications, replacements and extensions of such mortgages and spreaders, consolidations and correlations of such mortgages.
Section 18.02.In confirmation of such subordination, Tenant shall promptly execute and deliver, at its own cost and expense, any instrument, in recordable form if requested by Landlord, that Landlord, the holder of any such mortgage or any of their respective successors in interest may
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request to evidence such subordination. The mortgages to which this Lease is, at the time referred to, subject and subordinate are sometimes hereinafter called “superior mortgages”.
Section 18.03.[Intentionally Omitted]
Section 18.04.Tenant shall not look to the holder of a superior mortgage or successor in title to the Demised Premises, in connection with the return of or accountability with respect to any security deposit required by Landlord, unless said sums have actually been received by such holder of a superior mortgage or successor in interest. Any reference to the holder of a superior mortgage hereinabove shall also include any of their respective successors in interest.
Section 18.05.If, in connection with the procurement, continuation or renewal of any financing for which the Land and/or the Building represents collateral in whole or in part, an institutional lender shall request reasonable, de minimis modifications of this Lease as a condition of such financing, Tenant will not withhold its consent thereto, provided that such de minimis modifications do not materially increase the obligations of Tenant under this Lease or materially and adversely affect any rights of Tenant under this Lease.
Section 18.06.If, in connection with the procurement, continuation or renewal of any financing for which the Land and/or the Building represents collateral in whole or in part, or in connection with the sale of the Demised Premises, an institutional lender or a prospective purchaser requests Tenant’s financial statements, Tenant shall furnish the same, either to Landlord or directly to the requesting party provided that (a) such request is limited to once per calendar year, and (b) any recipients of Tenant’s financial statements execute and deliver to Tenant a confidentiality/non-disclosure agreement in form and substance reasonably satisfactory to Tenant prior to the release by Tenant of such financial statements. Notwithstanding the foregoing, in the event the capital stock of Tenant is then traded on a National Exchange (as defined under Federal securities law) and Tenant’s most recent 10-K (and, if more recent 10-Q) is readily available to the public for review (i.e., via the internet), Landlord shall obtain same from such sources.
Section 18.07.This Lease, and all rights of Tenant hereunder, are and shall be subject and subordinate in all respects to all utility and drainage easements, which may now or hereafter affect the Demised Premises, and to all renewals, modifications, replacements and extensions of easements, provided such easements do not unreasonably interfere with Tenant’s use or enjoyment of the Demised Premises. The provisions of this Article shall be self-operative and no further instrument of subordination shall be required.
Section 18.08.Notwithstanding anything to the contrary contained in this Section 18 and as an express condition to the subordination described in this Section 18, Landlord shall obtain for the benefit of Tenant from any current and/or future mortgagee(s) of the Building and/or the real property upon which the Building is located a subordination, non-disturbance and attornment agreement (an “SNDA”) on such mortgagees standard form of SNDA subject to commercially reasonable negotiation by Tenant.
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ARTICLE XIX.
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Defaults
Section 19.01.(a) In the event a petition is filed by or against Tenant under the United States Bankruptcy Code, 11 U.S.C. Sections 101 et al., as amended, or any successor thereto (the “Bankruptcy Code”), Tenant, as debtor and debtor-in-possession, and any trustee who may be appointed, agree to adequately protect Landlord as follows: (i) to perform each and every obligation of Tenant under this Lease, including the obligation to satisfy all Base Rent and Additional Rent when due, until such time as this Lease is either rejected or assumed by order of a court of competent jurisdiction; (ii) to determine no later than ninety (90) days after the filing of such petition whether to assume or to reject this Lease; (iii) to provide Landlord with at least thirty (30) days’ prior written notice of the date for any proceeding relating to the assumption and/or assignment of this Lease; and (iv) to provide Landlord with at least thirty (30) days’ prior written notice of any vacation or abandonment of the Demised Premises, any such vacation or abandonment to be deemed a rejection of this Lease. Tenant shall be deemed to have rejected this Lease in the event of the failure to comply with any of the above.
(b)If Tenant or a trustee elects to reject this Lease subsequent to the filing of a petition under the Bankruptcy Code, or if this Lease is otherwise rejected, Tenant shall promptly vacate and surrender possession of the Demised Premises in accordance with Section 25.01 hereof.
(c)If Tenant or a trustee elects to assume this Lease subsequent to the filing of a petition under the Bankruptcy Code, Tenant, as debtor and as debtor-in-possession, and any trustee who may be appointed, agree as follows: (i) to cure each and every existing breach by Tenant no later than thirty (30) days after the effective date of the assumption of this Lease; (ii) to compensate Landlord for any actual pecuniary loss resulting from the bankruptcy filing irrespective of whether Tenant has breached any provision of this Lease, including, without limitation, Landlord’s reasonable costs, expenses and attorneys’ fees incurred in monitoring the bankruptcy case for Landlord, enforcing Landlord’s rights under the terms of this Lease, or enforcing Landlord’s rights under the Bankruptcy Code, as determined by a court of competent jurisdiction, no later than thirty (30) days after the effective date of the assumption of this Lease; (iii) in the event of an existing breach, to provide adequate assurance of Tenant’s future performance, including, without limitation, (A) the deposit of a sum equal to one (1) month installment of Base Rent to be held to secure Tenant’s obligations under the Lease, (B) the production to Landlord of written documentation establishing that Tenant has sufficient present and anticipated financial ability to perform each and every obligation of Tenant under this Lease, (C) a reaffirmation of any guaranty of Tenant’s obligations given in connection with this Lease, and (D) such additional assurances, in form reasonably acceptable to Landlord, as may be required under any applicable provision of the Bankruptcy Code; (iv) the assumption will not breach any provision of this Lease, unless otherwise agreed upon by Landlord and Tenant; (v) the assumption will be subject to all of the provisions of this Lease; and (vi) the prior written consent, unless waived, in writing, by Landlord, of any mortgagee to which this Lease has been assigned as collateral security to the assumption is obtained.
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(d)If Tenant elects to assume and assign this Lease pursuant to the provisions of the Bankruptcy Code, then notices of such proposed assignment, setting forth (i) the name and address of the proposed assignee, (ii) all the terms and conditions of such offer, and (iii) the adequate assurances to be provided Landlord to assure such proposed assignee’s future performance under the Lease, shall be given to Landlord in accordance with the terms of Section 26.01(a)(iii) of this Lease, and Landlord shall thereupon have the prior right and option, to be exercised by notice to Tenant given at any time prior to the effective date of such proposed assignment, to accept an assignment of this Lease upon the same terms and conditions for the same consideration, if any, as the bona fide offer made by such proposed assignment, less any brokerage commissions which may be payable out of the consideration to be paid by such proposed assignee. The adequate assurance to be provided Landlord to assure the proposed assignee’s future performance under the Lease shall include without limitation: (A) the deposit of a sum equal to one (1) month installment of Base Rent to be held to secure Tenant’s obligations under this Lease, (B) a written demonstration that the proposed assignee meets all reasonable financial and other criteria of Landlord as did Tenant and its business at the time of execution of this Lease, and the proposed assignee shall produce to Landlord, at least thirty (30) days prior to the date for any proceeding relating to the assignment of this Lease, the most recent audited financial statements prepared by an independent certified public accountant, (C) an acknowledgment that the proposed assignee’s use of the Demised Premises will be in compliance with the terms of this Lease, and (D) such additional assurances, in form reasonably acceptable to Landlord, as to all matters identified in any application provision of the Bankruptcy Code.
(e)Neither Tenant nor any trustee who may be appointed in the event of the filing of a petition under the Bankruptcy Code shall conduct or permit the conduct of any “fire”, “bankruptcy”, “going out of business” or auction sale in, from or about the Demised Premises.
Section 19.02.This Lease and the Term and estate hereby granted are subject to further limitation as follows:
(a)whenever Tenant shall default in the payment of any installment of Base Rent, or in the payment of any Additional Rent or any other rental on any day upon which the same ought to be paid, and such default shall continue for ten (10) days after Landlord shall have given Tenant a notice specifying such default, or
(b)whenever Tenant shall do or permit anything to be done, whether by action or inaction, contrary to any of Tenant’s obligations hereunder, other than a matter specified in any of the other Subsections of this Section 19.02, and if such situation shall continue and shall not be remedied by Tenant within thirty (30) days after Landlord shall have given to Tenant a notice specifying the same, or in the case of a situation heretofore referenced in this subsection (b) which cannot with due diligence be cured within a period of thirty (30) days and the continuance of which for the period required for cure will not subject Landlord to the risk of criminal liability or termination or foreclosure of any mortgage, if Tenant shall not, (i) within said thirty (30) day period advise Landlord of Tenant’s intention to duly institute all steps necessary to remedy such situation, (ii) duly institute within said thirty (30) day period, and thereafter diligently and continuously prosecute the completion of all steps necessary to remedy
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the same and (iii) complete such remedy within such time after the date of the giving of said notice by Landlord as shall reasonably be necessary, or
(c)whenever any event shall occur or any contingency shall arise whereby this Lease or the estate hereby granted or the unexpired balance of the Term would, by operation of law or otherwise, devolve upon or pass to any person, firm or corporation other than Tenant, except as expressly permitted in Article XXIV, or (d) whenever Tenant shall default in the due keeping, observing or performance of any covenant, agreement, provision or condition in Article V hereof on the part of Tenant to be kept, observed or performed and if such default shall continue and shall not be remedied by Tenant within thirty (30) days after Landlord shall have given Tenant a notice specifying the same;
then in any of said cases set forth in the foregoing Subsections (a), (b), and (c), each such event or condition being herein referred to as an “Event of Default”, Landlord may give to Tenant a notice of intention to end the Term at the expiration of three (3) Business Days from the date of the service of such notice of intention, and upon the expiration of said three (3) Business Days this Lease and the Term and estate hereby granted, whether or not the Term shall theretofore have commenced, shall terminate, but Tenant shall remain liable for damages as provided in Article XX.
Any notice provided for in this Section 19.02 shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 or any similar or successor law.
Section 19.03.If Tenant shall default under this Lease beyond applicable notice and cure periods prior to the Commencement Date, Landlord shall have all of the rights and remedies in this Lease provided, should such default have occurred subsequent to the Term Commencement date, and it will be conclusively assumed for such purposes that the Term commenced on and as of the date of such default.
ARTICLE XX.
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Remedies & Damages
Section 20.01.If an Event of Default shall occur, or if any execution or attachment shall be issued against Tenant or any of Tenant’s Property whereupon the Demised Premises shall be taken or occupied or attempted to be taken or occupied by someone other than Tenant, or if this Lease and the Term shall expire and come to an end as provided in Article XIX, then in addition to any other rights and remedies available under applicable law each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever:
(a)Terminate this Lease, in which event Tenant shall immediately surrender the Demised Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Demised Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof by any lawful means, without being liable for prosecution or any claim for damages therefor; and Landlord may recover from Tenant the following:
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(b)The worth at the time of award of any unpaid rent which has been earned at the time of such termination; plus
(c)The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus
(d)The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus
(e)Any other amount necessary to compensate Landlord for all the actual 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 therefrom, specifically including but not limited to, brokerage commissions, advertising expenses, court costs and reasonable attorneys’ fees incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and
(f)At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.
(g)The term “rent” as used in this Section 20.01 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant to Landlord pursuant to the terms of this Lease. As used in Sections 20.01(b) and (c), above, the “worth at the time of award” shall be computed by allowing interest at the rate set forth in Section 3.04, but in no case greater than the maximum amount of such interest permitted by law. As used in Section 20.01(d) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
(h)Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any Event of Default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.
(i)Landlord may, but shall not be obligated to, make any such payment or perform or otherwise cure any such obligation, provision, covenant or condition on Tenant’s part to be observed or performed (and may enter the Premises for such purposes). Any such actions undertaken by Landlord pursuant to the foregoing provisions of this Section 20 shall not be deemed a waiver of Landlord’s rights and remedies as a result of Tenant’s failure to perform and shall not release Tenant from any of its obligations under this Lease.
Section 20.02.Tenant’s obligations under Section 20.01 shall survive the expiration of the Term hereof or any earlier termination of this Lease. This provision is intended to supplement (and not to limit) other provisions of this Lease pertaining to indemnities and/or attorneys’ fees.
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ARTICLE XXI.
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No Waivers by Landlord
Section 21.01.Except as otherwise provided in this Lease, no act or thing done by Landlord or its agents during the Term shall constitute an eviction by Landlord, nor shall same be deemed an acceptance of a surrender of the Demised Premises, and no agreement to accept such surrender shall be valid unless in writing signed by Landlord. The delivery of keys to an employee of Landlord or of its agents shall not operate as a termination of this Lease or a surrender of the Demised Premises.
Section 21.02.The failure of either party to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease, or to insist upon the strict performance by the other party, of the Rules and Regulations annexed hereto or hereafter adopted by Landlord shall not prevent a subsequent act or omission which would have originally constituted a violation, from having all the force and effect of an original violation.
Section 21.03.The receipt by Landlord of any Base Rent or Additional Rent with knowledge of breach of any covenant of this Lease shall not be deemed a waiver of such breach.
Section 21.04.No payment by Tenant or receipt by Landlord of a lesser amount than the Base Rent and Additional Rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without any prejudice to Landlord’s right to recover the balance or pursue any other remedy provided in this Lease.
Section 21.05.In the event that Tenant is in arrears in payment of Base Rent or Additional Rent, Tenant waives Tenant’s right, if any, to designate the items against which any payments made by Tenant are to be credited, and Tenant agrees that Landlord may apply any payments made by Tenant to any items it sees fit, irrespective of and notwithstanding any designation or request by Tenant as to the items against which any such payments shall be credited.
ARTICLE XXII.
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Waivers by Tenant
Section 22.01.Tenant, for itself, and on behalf of any and all persons claiming through or under it, including creditors of all kinds, does hereby waive and surrender all rights and privileges which they or any of them might have under or by reason of any present or future law, to redeem the Demised Premises or to have a continuance of this Lease for the Term after having-been dispossessed or ejected therefrom by process of law or after the termination of this Lease as provided herein.
Section 22.02.In the event Landlord commences any summary proceeding (whether for non-payment of rent, or for Tenant’s holding-over, or otherwise), or an ejectment action to recover possession of the Demised Premises, or other action for non-payment of rent, or for a breach of any of the covenants and conditions hereunder, Tenant covenants and agrees that it will not interpose any counterclaim or set-off in any such action or proceeding, or seek by consolidation
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or otherwise to interpose any counterclaim or set-off unless the failure to assert same would constitute a waiver of such counterclaim or set-off by Tenant and Landlord fails to waive the right to assert such waiver in writing. To the extent permitted by applicable law, Tenant hereby waives trial by jury and agrees that Tenant will not interpose any counterclaim or set-off of whatsoever nature or description in any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, or Tenant’s use or occupancy of the Demised Premises, any claim of injury or damage, any claim of failure to provide services, or any emergency or other statutory remedy with respect thereto. Any claim that Tenant may have against Landlord shall be separately prosecuted and Tenant waives a trial by jury relative thereto. The provisions of this Article shall survive the breach or termination of this Lease.
Section 22.03.In the event Tenant claims or asserts that Landlord has violated or failed to perform a covenant of Landlord not to unreasonably withhold or delay Landlord’s consent or approval, or in any case where Landlord’s reasonableness in exercising its judgment is in issue, Tenant’s sole remedy shall be an action for specific performance, declaratory judgment or injunction and in no event shall Tenant be entitled to any money damages for a breach of such covenant and in no event shall Tenant claim or assert any claims in any money damages in any action or by way of set off, defense or counterclaim and Tenant hereby specifically waives the right to any money damages or other remedies.
Section 22.04.The pertinent provisions of this Lease shall be considered express agreements governing the services to be furnished by Landlord, and Tenant agrees that any Requirement, now or hereafter in force, shall have no application in connection with any enlargement of Landlord’s obligations with respect to such services.
ARTICLE XXIII.
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Covenant of Quiet Enjoyment
Section 23.01.Landlord covenants that upon Tenant’s paying the Base Rent and Additional Rent and other sums due under this Lease and observing and performing all of the terms, conditions, rules and covenants herein on its part to be observed and performed within applicable notice and cure periods provided herein, Tenant may peaceably and quietly enjoy the Demised Premises, subject, nevertheless, to the terms and conditions of this Lease and any ground leases, or other leases, mortgages and instruments to which this Lease is subordinate pursuant to the provisions hereof, including any and all extensions and modifications of all of the foregoing.
ARTICLE XXIV.
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Assignment, Mortgaging and Subletting, Etc.
Section 24.01.Tenant shall not voluntarily or involuntarily (a) assign or otherwise transfer this Lease or the estate hereby granted, (b) sublet the Demised Premises or any part thereof (c) allow the Demised Premises to be used or occupied by others (an “Occupancy Right”), or (d) mortgage, pledge or encumber this Lease or the Demised Premises or any part thereof, without, in each instance, obtaining the prior consent of Landlord, except as otherwise expressly
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provided in this Article XXIV. For purposes of this Article XXIV, (i) the transfer of a majority of the economic interests of the Tenant or a subtenant, however accomplished, whether in a single transaction or in a series of related or unrelated transactions, shall be deemed an assignment of this Lease, or of such sublease, as the case may be, (ii) any person or legal representative of Tenant, to whom Tenant’s interest under this Lease passes by operation of law, or otherwise, shall be bound by the provisions of this Article XXIV, and (iii) a material modification or amendment of a sublease shall be deemed a sublease. Notwithstanding anything to the contrary contained in this Article XXIV, an initial public offering of Tenant, or the transfer of the outstanding capital stock of Tenant, or the stock of any entity controlling Tenant, through the “over-the-counter market” or through any U.S. or foreign recognized stock exchange, shall not be deemed an assignment or sublet under this Lease and Landlord’s consent shall not be required with respect thereto.
Section 24.02.The provisions of Section 24.01(a) hereof shall not apply, and Landlord’s consent shall not be required, with respect to assignments (a) to an entity into or with which Tenant is merged or consolidated or to an entity into which substantially all of Tenant’s assets are transferred, or (b) referred to in clause (i) of the second sentence of Section 24.01 (provided such assignment is for a legitimate business purpose and not principally for the purpose of transferring this Lease or the leasehold estate created hereby, and provided further, that in the case of clause (a) preceding, the resultant corporation (or other entity) or the assignee, as the case may be, has a tangible net worth at least equal to or in excess of the net worth of Tenant immediately prior to such merger, or consolidation or transfer). The provisions of subdivisions (b) and (c) of Section 24.01 shall not apply, and Landlord’s consent shall not be required, with respect to subletting or Occupancy Rights granted to an Affiliated Entity, provided the same is for a good business purpose and not principally for the purpose of avoiding the application of Section 24.01 of this Lease. As used in this Lease, an “Affiliated Entity” means an entity controlled by, controlling or under common control with the Tenant. A corporation, for this purpose, shall not be deemed controlled by another unless more than fifty (50%) percent of its voting stock is owned both beneficially and of record by such other.
Section 24.03.Any assignment, subletting or Occupancy Right, whether or not Landlord’s consent is required hereunder, shall be made only if, and shall not be effective unless all of the following shall have been furnished to Landlord at least ten (10) Business Days prior to the effective date of the contemplated assignment, subletting or grant of Occupancy Right:
(a)The name and business address of the proposed subtenant, assignee, or grantee of any Occupancy Right (“Occupancy Grantee”), information with respect to the nature and character of the proposed subtenant’s, assignee’s or Occupancy Grantee’s business and business activities generally and within the Demised Premises, and current financial information with respect to net worth, credit and financial responsibility of the proposed subtenant, assignee or Occupancy Grantee;
(b)In the case of an assignment, an executed counterpart thereof, and all ancillary agreements with the proposed assignee (including all documents from which the considerations to be received by Tenant referred to in Section 24.07 hereof can be ascertained);
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(c)In the case of a subletting, an executed counterpart of the sublease and all ancillary agreements with the sublessee (including all documents from which the considerations to be received by Tenant referred to in Section 24.07 hereof can be ascertained);
(d)In the case of an Occupancy Right, a fully executed copy of the agreement creating the same and all ancillary agreements pertaining thereto; and
(e)In the case of an assignment, an agreement executed by the assignee, in form and substance reasonably satisfactory to Landlord, whereby the assignee shall assume and agree to fulfill the obligations and performance of this Lease from and after the date of such assignment and the assignment and agree to be personally bound by and upon the covenants, agreements, terms, provisions and conditions hereof on the part of Tenant to be performed or observed from and after the date of such assignment, and whereby the assignee shall agree that the provisions of Section 24.01 hereof shall, notwithstanding such an assignment or transfer, continue to be binding upon it in the future.
By requesting Landlord’s consent to an assignment, subletting or Occupancy Right, Tenant shall be deemed to have agreed to pay Landlord as Additional Rent the reasonable cost imposed by Landlord to review the request and to prepare the requested consent or approval, including any reasonable attorneys’ fees incurred by Landlord as well as any other costs incurred by Landlord in connection with Tenant’s request, regardless of whether such consent is granted, including any reasonable attorney’s fees incurred by Landlord arising out of any dispute pertaining to such consent, which cost shall not exceed $3,000.00 in the aggregate;
Each sublease and assignment referred to in clauses (b) and (c) of this Section 24.03 shall specifically state that (i) it is subject to all of the terms, covenants, agreements, provisions, and conditions of this Lease, as the same may be amended, (ii) the subtenant, assignee or Occupancy Grantee, as the case may be, will not have the right to a further assignment thereof or sublease thereunder, or to allow the Demised Premises to be used by others, without the consent of Landlord in each instance, (iii) a consent by Landlord thereto shall not be deemed or construed to modify, amend or affect the terms and provisions of this Lease, or Tenant’s obligations hereunder, which shall continue to apply to the Demised Premises, and the occupants thereof, as if the sublease, assignment or Occupancy Right had not been made, (iv) if Tenant defaults in the payment of any Base Rent or Additional Rent beyond applicable notice and cure periods, Landlord is authorized to collect any Base Rent or Additional Rent due or accruing from any assignee, subtenant or other occupant of the Demised Premises and to apply the net amounts collected to the Base Rent or Additional Rent, (v) the receipt by Landlord of any amounts from an assignee or subtenant, or other occupant of any part of the Demised Premises shall not be deemed or construed as releasing Tenant from Tenant’s obligations hereunder or the acceptance of that party as a direct tenant, and (vi) at the option of Landlord, in the case of a sublease, if this Lease shall terminate or expire, the sublease shall nonetheless continue in full force and effect and the subtenant thereunder shall attorn to the Landlord as a direct lease between Landlord and such sublessee, provided, however, that in case such option is exercised by Landlord and notwithstanding such attornment, the Landlord shall not be (A) liable for any previous act or omission of Tenant, (B) subject to any counterclaim, defense or offset to which such subtenant may be entitled against Tenant, (C) bound by any modification or amendment of such sublease made without Landlord’s consent, or by any previous payment of more than one
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month’s Base Rent or Additional Rent, (D) obligated to observe, fulfill or perform any obligations pursuant to the sublease beyond Landlord’s obligation under this Lease; and (E) liable to the subtenant beyond Landlord’s interest in and to the subleased space.
Section 24.04.Tenant covenants that, notwithstanding any assignment of this Lease or of the leasehold estate created thereby by the Tenant or any subletting, in whole or in part, of any portion of the Demised Premises, whether or not in violation of the provisions of this Lease, and notwithstanding the acceptance of Base Rent or Additional Rent by Landlord from an assignee or transferee or any other party, Tenant shall remain fully and primarily liable throughout the Term (inclusive of any renewals or extensions thereof) for the payment of the Base Rent or Additional Rent due and to become due under this Lease and for the performance of all of the covenants, agreements, terms, provisions and conditions of this Lease on the part of Tenant to be performed or observed.
Section 24.05.The liability of Tenant, and the due performance by Tenant of the obligations on its part to be performed under this Lease, shall not be discharged, released or impaired in any respect by an agreement or stipulation made with an assignee of Tenant (howsoever far removed) by Landlord or any grantee or assignee of Landlord, by way of mortgage or otherwise, extending the time of or modifying any of the obligations contained in this Lease, or by any waiver or failure of Landlord to enforce any of the obligations on Tenant’s part to be performed under this Lease. If any such agreement or modification operates to increase the obligations of the assigning Tenant, the liability under this Section 24.05 of the assigning Tenant or any of its successors in interest, (unless such party shall have expressly consented in writing to such agreement or modification) shall continue to be no greater than if such agreement or modification had not been made. To charge the assigning Tenant and its successors in interest, no demand or notice of any default from Landlord shall be required, Tenant and each of its successors in interest hereby expressly waiving any such demand or notice.
Section 24.06.Landlord shall not unreasonably withhold, condition or delay its consent where such consent is required (i) to an assignment of this Lease and the leasehold estate hereby created, (ii) a subletting of the whole or any part of the Demised Premises, or (iii) an Occupancy Right, provided:
(a)The proposed subtenant, assignee or Occupancy Grantee is a party whose reputation, financial net worth, credit and financial responsibility is, considering the responsibilities involved, reasonably satisfactory to Landlord;
(b)The nature and character of the proposed subtenant, assignee or Occupancy Grantee, its business or activities and intended use of the Demised Premises is, in Landlord’s reasonable judgment, in keeping with the standards of the Building and the area in which the Demised Premises is located and does not conflict with the provisions of Article V of this Lease;
(c)No such assignment, subletting or Occupancy Grant shall constitute or cause (with or without notice or lapse of time or otherwise) a default under any mortgage affecting the Building;
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(d)Tenant shall have complied with all of the provisions of Section 24.03;
(e)In the case of a subletting of a portion of the Building, the portion so sublet shall be regular in shape and suitable for normal renting purposes;
(f)[Intentionally Omitted];
(g)Tenant, in the case of a subletting, shall provide reasonably appropriate means of ingress and egress to and from the sublet space, separate the sublet space from the remainder of the Building, and pay, when due, all of the costs of doing so;
Section 24.07.In the event of an assignment or subletting for which Landlord’s consent is required hereunder, Tenant shall pay to Landlord, as Additional Rent, one-half of,
(a)in the case of an assignment, an amount equal to all sums and other considerations paid to Tenant by the assignee for or by reason of such assignment (excluding sums paid for the sale or rental of Tenant’s fixtures, leasehold improvements, equipment, furniture, furnishings or other personal property, and the actual expenses incurred by Tenant in connection with such assignment including, without limitation, reasonable legal fees, brokerage commissions, free rent or tenant improvement allowances);
(b)in the case of a sublease, any rents, additional charge or other consideration payable under the sublease to Tenant by the subtenant (excluding sums paid for the sale or rental of Tenant’s fixtures, leasehold improvements, equipment, furniture or other personal property, and the actual expenses incurred by Tenant in connection with such assignment including, without limitation, reasonable legal fees, brokerage commissions, free rent or tenant improvement allowances) which is in excess of the sum of the rents accruing during the term of the sublease in respect of the subleased space (at the rate per square foot payable by Tenant hereunder); and
(c)The sums payable under subdivisions (a) and (b) preceding shall be paid to Landlord as and when paid by the assignee or subtenant to Tenant; and
(d)Tenant shall furnish Landlord with a written statement, semi-annually, certified by Tenant or a responsible employee of Tenant, from which the Additional Rent to which Landlord may be entitled by reason of the application of clauses (a) and (b) hereunder can be determined. Tenant shall keep books of account in accordance with generally accepted accounting principles consistently applied and supporting material relating to the matters reflected in clauses (a) and (b) hereof, and shall make the same available to Landlord at all reasonable times for inspection at the Demised Premises or at Tenant’s main office, as determined by Landlord, for the purpose of verifying any statement furnished or to be furnished by Tenant. Landlord shall have the right to delegate this inspection to a duly authorized representative and, in addition, may make such copies thereof as it reasonably requires, but only for the purposes enumerated in this clause.
Section 24.08.The consent or waiver of consent by Landlord in any instance to an assignment or subletting shall not in any way be construed or deemed to relieve Tenant, (which term as used in this Section 24.08 shall have the meaning reflected in Section 1.16 hereof without regard to the
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word “permitted” last contained therein), from obtaining the prior consent of Landlord to an assignment or subletting in each and every subsequent instance. The parties agree that Tenant’s sole remedy for any finding that Landlord has unreasonably withheld consent to any request for consent to assignment or subletting under this Article shall be monetary damages and shall in no event permit the termination of this Lease.
ARTICLE XXV.
​
Surrender of Premises
Section 25.01.On the expiration or sooner termination of this Lease, or upon any re-entry by Landlord upon the Demised Premises as provided in Article XIX hereof, Tenant shall quit and surrender the Demised Premises to Landlord in the condition in which it is required to be kept and maintained by Tenant pursuant to the terms of this Lease, and Tenant shall remove all of Tenant’s Property therefrom except as otherwise expressly provided in this Lease. The provisions hereof shall survive the expiration or other termination of the Term.
Section 25.02.In the event of any holding over by Tenant after the expiration or termination of this Lease without the consent of Landlord, Tenant shall:
(a)pay as holdover rent for each month of the holdover tenancy an amount equal to the greater of (i) the fair market rental value of the Demised Premises for such month (as reasonably determined by Landlord) or (ii) one-twelfth (1/12) of one hundred and fifty (150%) percent of the Base Rent which Tenant was obligated to pay for the month immediately preceding the end of the Term, and otherwise observe, fulfill and perform all of its obligations under this Lease, including but not limited to, those pertaining to Additional Rent, in accordance with its terms;
(b)if such holding over exceeds ninety (90) days after the expiration or sooner termination of this Lease, be liable to Landlord for any payment or rent concession which Landlord may be required to make to any tenant in order to induce such tenant not to terminate an executed lease covering all or any portion of the Demised Premises by reason of the holding over by Tenant; and
(c)if such holding over exceeds ninety (90) days after the expiration or sooner termination of this Lease, be liable to Landlord for any out-of-pocket expenses incurred by Landlord as the result of Tenant’s failure to surrender the Demised Premises.
No holding over by Tenant after the Term shall operate to extend the Term.
The holdover, with respect to all or any part of the Demised Premises, of a person deriving an interest in the Demised Premises from or through Tenant, including, but not limited to an assignee or subtenant, shall be deemed a holdover by Tenant.
Tenant expressly waives, for itself and for any person claiming through or under Tenant, any rights which Tenant or such person may have to a stay of any holdover or eviction action or proceeding, or other action or proceeding which Landlord may institute to enforce the provisions of this Article.
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Notwithstanding anything in this Article contained to the contrary, the acceptance of any Base Rent or Additional Rent paid by Tenant pursuant to this Section 25.02, shall not preclude Landlord from commencing and prosecuting a holdover or eviction action or proceeding or any action or proceeding in the nature thereof.
ARTICLE XXVI.
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Security
Section 26.01.Tenant has deposited with Landlord the sum of Three Hundred Five Thousand Seven Hundred Seventy Four ($305,774.00) Dollars representing one (1) month Base Rent as security for the faithful performance and observance by Tenant of the terms, provisions and conditions of this Lease (the “Security”). It is agreed that in the event Tenant defaults in respect of any of the terms, provisions and conditions of this Lease, including, but not limited to, the payment of Base Rent and Additional Rent, beyond applicable notice and cure periods, Landlord may use, apply or retain the whole or any part of the Security to the extent required for the payment of any Base Rent and Additional Rent or any other sum as to which Tenant is in default or for any sum which Landlord may expend or may be required to expend by reason of Tenant’s default in respect of any of the terms, covenants and conditions of this Lease beyond applicable notice and cure periods. In the event Landlord applies or retains any portion or all of the Security, Tenant shall forthwith restore the amount so applied or retained. Tenant acknowledges that Landlord has no obligation to place the Tenant’s Security in an interest bearing account and, by reason thereof, Tenant is not entitled to any interest thereon. Tenant expressly waives the provisions of Section 1950.7 of the California Civil Code, as amended or recodified from time to time, relating to limitations on Landlord’s use of, and obligations in connection with, security deposits.
Section 26.02.In the event that Tenant shall fully and faithfully comply with all of the terms, provisions, covenants and conditions of this Lease, the Security shall be returned to Tenant within thirty (30) days after the date fixed as the end of the Lease and after delivery of the entire possession of the Demised Premises to Landlord. In the event of a sale of the Building or a master leasing of the Building, Landlord shall have the right to transfer the Security to the vendee, or master lessee. Landlord shall thereupon be released by Tenant from all liability for the return of the Security, and Tenant agrees to look to the new landlord solely for the return of the Security. It is agreed that the provisions hereof shall apply to every transfer or assignment made of the Security to a new landlord. Tenant further covenants that it will not assign or encumber or attempt to assign or encumber the Security and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance.
ARTICLE XXVII.
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Signs
Section 27.01.Landlord hereby grants Tenant permission to place and maintain such sign and/or signs as Tenant, in its reasonable discretion, shall determine, provided that Tenant shall apply for and obtain, at its own cost and expense, all required permits, licenses and/or variances in
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connection therewith. In no event shall Tenant place or affix any sign to the roof of the Building. If Landlord elects to remove any sign placed by Tenant in violation of the terms of this Article, Tenant shall, upon thirty (30) days’ written notice from Landlord, pay Landlord all costs and expenses, for the removal and restoration of same. In the event that in performing any maintenance or repairs required of Landlord pursuant to the terms hereof, Landlord deems it necessary to remove any of Tenant’s signs, Landlord shall have the right so to remove such sign or signs, and the reasonable out-of-pocket cost of which shall be included in the cost of such repair and shall be billed to Tenant pursuant to Section 6.02.
ARTICLE XXVIII.
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Brokerage
Section 28.01.Landlord and Tenant each covenants, represents and warrants to the other party that it has had no dealings or negotiations with any broker, finder or agent with respect to this Lease or the negotiation thereof. Based thereon, Landlord agrees to hold harmless and indemnify Tenant from and against any and all cost, expense (including reasonable attorneys’ fees) or liability for any compensation, commissions or charges claimed by any broker, finder or agent with respect to this Lease or the negotiation thereof except to the extent that the same arises out of Tenant’s acts or omissions. Tenant agrees to hold harmless and indemnify Landlord from and against any and all cost, expense (including reasonable attorneys’ fees) or liability for any compensation, commissions or charges claimed by any broker, finder or agent, with respect to this Lease or the negotiation thereof, except to the extent that the same arises out of Landlord’s acts or omissions.
ARTICLE XXIX.
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Exculpation
Section 29.01.Notwithstanding anything to the contrary contained herein, Tenant shall look solely to the interest of Landlord in the Building (or the proceeds of any sale, casualty or condemnation award therefrom) for the satisfaction of any of Tenant’s remedies with regard to the payment of money or otherwise, and no other property or assets of Landlord shall be subject to levy, execution or other enforcement procedures for the satisfaction of Tenant’s remedies or with respect to this Lease, the relationship of Landlord and Tenant hereunder or Tenant’s use or occupancy of the Demised Premises, such exculpation of personal liability to be absolute.
ARTICLE XXX.
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Effect of Conveyance by Landlord
Section 30.01.Tenant agrees that from and following a transfer by Landlord of its interest in the Demised Premises, by sale, lease or otherwise, Tenant shall thereafter look solely to Landlord’s successor (and such successor’s interest in the Demised Premises) for satisfaction of Landlord’s liabilities accruing after such transfer hereunder.
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ARTICLE XXXI.
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Estoppel Certificate, Memorandum
Section 31.01.Tenant shall, without charge, at any time and from time to time hereafter, within ten (10) days after request by Landlord, certify by a written instrument duly executed and acknowledged to any mortgagee or purchaser of the Demised Premises, or proposed mortgagee or proposed purchaser, or any other person, firm or corporation specified by Landlord, as to the validity and force and effect of this Lease in accordance with its terms as then constituted, the Term Commencement Date and Expiration Date of the Lease, the existence of any default on the part of any party thereunder, the existence of any offsets, counterclaims or defenses thereto on the part of Tenant, and any other matters which may reasonably requested by Landlord or such mortgagee or purchaser.
Section 31.02.Landlord shall, without charge, at any time and from time to time hereafter, within ten (10) days after request by Tenant, certify by a written instrument duly executed and acknowledged to any proposed mortgagee or proposed purchaser, or any other person, firm or corporation specified by Tenant, as to the validity and force and effect of this Lease in accordance with its terms as then constituted, the Term Commencement Date and Expiration Date of the Lease, the existence of any default on the part of any party thereunder, the existence of any offsets, counterclaims or defenses thereto on the part of Landlord, and any other matters which may reasonably requested by Tenant or such mortgagee or purchaser.
Section 31.03.It is agreed by the parties hereto that the certificate referenced in Section 31.01 hereof may be relied upon by anyone with whom the party requesting such certificate may be dealing.
Section 31.04.[Intentionally Omitted].
Section 31.05.At the request of Landlord, Tenant shall promptly execute, acknowledge and deliver a memorandum with respect to this Lease sufficient for recording. Such memorandum shall not in any circumstances be deemed to change or otherwise affect any of the obligations or provisions of this Lease.
ARTICLE XXXII.
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Notices
Section 32.01.Any notice, statement, demand or other communication required or permitted to be given, rendered or made by either party to the other pursuant to the terms of this Lease or pursuant to any applicable law or requirement of any public authority shall be in writing and shall be deemed to have been properly given, rendered or made by (a) delivery by hand, (b) reputable overnight courier (such as UPS Next Day Air and Federal Express), or (c) certified mail, return receipt requested, addressed as appropriate, if to Landlord, as follows:
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	CH/BDG Harvill, LLC

	do Blumenfeld Development Group, Ltd.

	300 Robbins Lane

	Syosset, New York 11791

	Attention: David Blumenfeld and David J. Kaplan, Esq.

	​

	with a copy to:

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	CH Realty Partners LLC

	10950 Bellagio Road

	Los Angeles, CA 90077

	Attention: Philip W. Cyburt

	​

	and to Tenant:

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Pharmapacks, LLC
1985 Marcus Avenue, Suite 203
Lake Success, New York 11042
Attention: Jonathan Webb
with a copy to:
Pharmapacks, LLC
1985 Marcus Avenue, Suite 203
Lake Success, New York 11042
Attention: Ian R. Cohen, Esq.
Pharmapacks, LLC
1985 Marcus Avenue, Suite 203
Lake Success, New York 11042
Attention: James Mastronardi
Pharmapacks, LLC
1985 Marcus Avenue, Suite 203
Lake Success, New York 11042
Attention: Chris Pfeiffer
Any such notice, if (x) delivered by hand, shall be deemed to have been given, rendered or made when actually delivered by hand, (y) sent by overnight courier, shall be deemed given, rendered or made upon actual receipt, or (z) sent by certified mail, return receipt requested, shall be deemed given, rendered or made as of three (3) Business Days from the postmark of such notice. Either party may, by written notice as aforesaid, designate a different address or addresses for notices, statements, demands or other communications intended for it. The attorneys for the respective parties hereto may transmit or receive any notice hereunder on behalf of their respective clients.
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ARTICLE XXXIII.
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Arbitration
Section 33.01.In General. Except (a) to the extent that any Article of this Lease specifically provides that a dispute between the parties be resolved in a manner other than pursuant to this Article 33, (b) for matters related to Landlord’s right to seek summary possession of the Premises pursuant to Code of Civil Procedure 1161 et seq., and/or (c) provisional remedies set forth in Code of Civil Procedure section 1281.8, submittal of matters to arbitration in accordance with the provisions of this Article 33 shall be the sole and exclusive method, means and procedure to resolve any such claims, disputes or disagreements. The parties hereby irrevocably waive any and all rights to the contrary and shall at all times conduct themselves in strict, full, complete and timely accordance with the provisions of this Article 33 and all attempts to circumvent the terms and conditions of this Article 33 shall be absolutely null and void and of no force or effect whatsoever.
Section 33.02.JAMS. Any dispute to be arbitrated pursuant to the provisions of this Article 33 shall be determined by binding arbitration before a retired judge of the Superior Court of the State of California (the “Arbitrator”) under the auspices JAMS using the Expedited Procedures of the JAMS Comprehensive Arbitration Rules & Procedures (the “JAMS Comprehensive Rules”) then in effect, unless the parties agree that the JAMS Streamlined Arbitration Rules and Procedures should be used in lieu of the JAMS Comprehensive Rules. Such arbitration shall be initiated by the Parties, or either of them, within ten (10) Business Days after either party sends Notice (the “Arbitration Notice”) using the JAMS Demand for Arbitration Form then in effect. The parties may agree on a retired judge from the JAMS panel. If they are unable to promptly agree, JAMS will provide a list of three available judges who, to the extent available, have had extensive experience in handling real estate commercial lease transactions as practitioners and each party may strike one. The remaining judge (or if there are two, the one selected by JAMS) will serve as the Arbitrator. In the event that JAMS shall no longer exist or if JAMS fails or refuses to accept submission of such dispute, then the dispute shall be resolved by binding arbitration before the American Arbitration Association (“AAA”) under the AAA’s Commercial Arbitration Rules then in effect, using the Expedited Procedures.
Section 33.03.Arbitration Procedure.
(a)Pre-Decision Actions. The Arbitrator shall schedule a pre-hearing conference to resolve procedural matters, arrange for the exchange of information, obtain stipulations, and narrow the issues. The parties will submit proposed discovery schedules to the Arbitrator at the pre-hearing conference. The scope and duration of discovery will be within the sole discretion of the Arbitrator, except that in no event shall the parties be entitled to propound interrogatories or requests for admissions during the arbitration process. The Arbitrator shall have the discretion to order a pre-hearing exchange of information by the parties, including, without limitation, production of requested documents, exchange of summaries of testimony of proposed witnesses, and examination by deposition of parties and third-party witnesses. This discretion shall be exercised in favor of discovery reasonable under the circumstances.
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(b)The Decision. The arbitration shall be conducted in the County of Nassau, State of New York. Any party may be represented by counsel or other authorized representative. In rendering a decision(s), the Arbitrator shall determine the rights and obligations of the parties according to the substantive and procedural laws of the State of California and the provisions of this Lease. The Arbitrator’s decision shall be based on the evidence introduced at the hearing, including all logical and reasonable inferences therefrom. The Arbitrator may make any determination, and/or grant any remedy or relief (an “Arbitration Award”) that is just and equitable. The decision must be based on, and accompanied by, a written statement of decision explaining the factual and legal basis for the decision as to each of the principal controverted issues. The decision shall be conclusive and binding, and it may thereafter be confirmed as a judgment by the courts in Nassau County, State of New York, subject only to challenge on the grounds set forth in California Code of Civil Procedure Section 1286.2. The validity and enforceability of the Arbitrator’s decision is to be determined exclusively by the New York courts pursuant to the terms and conditions of this Lease. The Arbitrator shall award costs, including, without limitation, reasonable attorneys’ fees, and expert and witness costs, to the prevailing party as defined in California Code of Civil Procedure Section 1032 (“Prevailing Party”), if any, as determined by the Arbitrator in his discretion. Each party shall pay half the costs and expenses of the arbitration, except that the Arbitrator shall have discretion to require the non-prevailing party to pay for all arbitration costs and expenses. A party shall be determined by the Arbitrator to be the prevailing party if its proposal for the resolution of dispute is the closer to that adopted by the Arbitrator.
(c)INFORMED CONSENT. LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.
ARTICLE XXXIV.
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No Liability and Indemnification of Landlord
Section 34.01.Neither Landlord nor any agent, contractor or employee of Landlord shall be liable to Tenant for any injury or damage to Tenant or to any other person or for any damage to, or loss (by theft or otherwise) of, any Tenant property or the property of any other person, irrespective of the cause of such injury, damage or loss, unless caused by or due to the negligence or willful misconduct of Landlord, it being understood that no property, other than such as might normally be brought upon or kept in the Demised Premises as an incident to the reasonable use of the Demised Premises for the purposes herein permitted, will be brought upon or be kept in the Demised Premises.
Section 34.02.Tenant shall indemnify and save harmless Landlord, its agents and designees against and from (a) any and all claims (i) arising from (x) the conduct, operation or management of the Demised Premises or of any business therein, or (y) any work or thing whatsoever done, or any condition created (other than by Landlord), in or about the Demised Premises during the
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Term or during the period of time, if any, prior to the Commencement Date that Tenant may have access to the Demised Premises, or (ii) arising from any negligent or otherwise wrongful act or omission of Tenant or any of its subtenants or its or their employees, agents, contractors or invitees, and (b) all costs, expenses and liabilities incurred in or in connection with each such claim or action or proceeding brought thereon. In case any action or proceeding be brought against Landlord by reason of any such claim, Tenant, upon notice from Landlord, shall resist and defend such action or proceeding. Landlord shall indemnify and save harmless Tenant, its agents and employees from any and all claims, arising from the negligence, wrongful act or omission of Landlord or any of its employees, agents, contractors or invitees and all costs, expenses and liabilities incurred in or in connection with such claim or action or proceeding brought thereon.
Section 34.03.Any employee or agent of Landlord to whom any property shall be entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant’s agent with respect to such property and Landlord shall not be liable for any loss of or damage to any such property by theft or otherwise.
Section 34.04.Landlord and/or Tenant shall be excused for the period of delay in the performance of any of their obligations hereunder (except their respective obligations to pay any sums of money due under the terms of this Lease) and shall not be considered in default when prevented from so performing because of an Excusable Delay. “Excusable Delays” shall mean delays caused by strikes, lockouts, acts of God, environmental conditions, inability to obtain labor or materials despite diligent efforts, government statutes, ordinances, decrees, orders or restrictions, unusually severe weather, litigation that results in an injunction or other order prohibiting or otherwise delaying the continuity of construction or other acts related thereto, civil commotion or war, fire, unavoidable casualty or any other cause, whether similar or dissimilar, beyond the reasonable control of either Landlord or Tenant, but shall not include (i) unavailability of funds or (ii) any monetary obligation that can be satisfied by the payment of a fixed sum. Notwithstanding the foregoing, Excusable Delays shall at no time operate to (1) excuse Tenant from any obligations for payment of Rent or any other payments required by the terms of this Lease, each when the same are due, or (2) excuse Landlord from the obligation to make any payments required by the terms of this Lease, if any, each when the same are due.
Section 34.05.[Intentionally Omitted].
Section 34.06.Except to the extent arising out of the willful misconduct or negligence of Landlord or the failure of Landlord to perform any of its obligations under this Lease beyond any applicable notice and cure periods, no (i) act or omission of Landlord or its agents or employees or any other party, including Tenant, (ii) failure of any Demised Premises or Building systems, or machinery or equipment serving the Demised Premises (including the Building), (iii) diminution or shutting off of light, air or view by any structure which may be erected by Landlord or others in the vicinity of the Building, (iv) personal injury or property damage caused by third parties who are not the agents or employees of Landlord, or (v) inconvenience or annoyance to Tenant or injury to or interruption of Tenant’s business by reason of anything referred to in the foregoing shall impose any liability on Landlord. No representation, guaranty or warranty is made that the communications or security systems, devices or procedures of the Building or Demised Premises will be effective to prevent injury to Tenant or any other person
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or damage to, or loss (by theft or otherwise) of, any of the property of Tenant or the property of any other person, and Landlord reserves the right to discontinue or modify at any time such communications or security systems or procedures without liability to Tenant.
Section 34.07.Landlord shall not be liable, to the extent of Tenant’s insurance coverage, for any loss or damage to any person or property even if due to the negligence of Landlord or any such employees or agents.
ARTICLE XXXV.
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Discharge of Liens
Section 35.01.Tenant shall not create or cause to be created any lien, encumbrance or charge upon the Demised Premises or any part thereof or the income therefrom, including but not limited to a mechanic’s lien, for work claimed to have been performed for or on behalf of Tenant or materials claimed to have been furnished to or for Tenant, and Tenant shall not cause, create or suffer any other matter or thing whereby the estate, rights and interest of Landlord in the Demised Premises or any part thereof might be impaired.
Section 35.02.If any lien, encumbrance or charge within the purview of Section 35.01 shall at any time be filed against the Demised Premises or any part thereof as a result of the actions or inaction of Tenant or Tenant’s employees, agents or contractors, Tenant, within thirty (30) days after receiving notice of such filing, shall cause such lien to be discharged and the Landlord released from liability thereunder or with respect thereto, and if it is not, then in addition to any other right or remedy, Landlord, on not less than ten (10) days prior notice to Tenant, may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings, and in any such event Landlord shall be entitled, if Landlord so elects, to compel the prosecution of an action for the foreclosure of such lien by the lienor and to pay the amount of the judgment in favor of the lienor with interest, costs and allowances. Any amount so paid by Landlord and all reasonable costs and expenses incurred by Landlord in connection therewith, shall constitute Additional Rent due and payable to Landlord within thirty (30) days of demand.
Section 35.03.Nothing in this Lease contained shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of labor or materials for any specific improvement, alteration to or repair of the Demised Premises or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any lien against the Demised Premises or any part thereof. Notice is hereby given that Landlord shall not be liable for any work performed or to be performed at the Demised Premises for Tenant or any subtenant, or any materials furnished or to be furnished at the Demised Premises for Tenant or any subtenant, upon credit, and that no mechanic’s or other lien for such work or materials shall attach to or affect the estate or interest of Landlord in and to the Demised Premises. Landlord shall have the right to post and keep posted on the Building any notices which Landlord may be required to post for the protection of Landlord and the Demised Premises from any lien.
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ARTICLE XXXVI.
​
Tenant’s Property
Section 36.01.All fixtures, equipment, improvements, installations and appurtenances attached to, built into or a part of the Building at or prior to the commencement or during the Term, including but not limited to Tenant Changes, whether by Landlord at its own expense or at the expense of Tenant, shall be and remain Tenant’s Property and may be removed by Tenant at any time during the Term hereof, as provided in Section 36.02 herein.
Section 36.02.All furniture, trade fixtures, improvements, equipment, furnishings and other articles of moveable personal property owned by Tenant and located within the Building (collectively, “Tenant’s Property”) may be removed from the Building by Tenant at any time during the Term. Tenant, before so removing Tenant’s Property shall establish to Landlord’s reasonable satisfaction that Tenant can and promptly will repair and restore any damage caused by such removal without cost or charge to Landlord, reasonable wear and tear and damage by casualty excepted. Any such repair and removal shall itself be deemed a Tenant Change within the purview of this Lease. Any Tenant’s Property for which Landlord shall have granted any allowance, contribution or credit to Tenant, at Landlord’s option, shall not be so removed except as hereinafter in this Article XXXVI expressly provided.
Section 36.03.Tenant’s Property and other property of the Tenant and Tenant Changes not commonly found in space used as provided in the first sentence of Section 5.01 hereof (except money, securities and other like valuables) which shall remain in the Building after the termination or expiration of this Lease, may, at the option of the Landlord, be deemed to have been abandoned, and may be disposed of by Landlord in accordance with Sections 1980 through 1991 of the California Civil Code and Section 1174 of the California Code of Civil Procedure, or in accordance with any Laws or judicial decisions which may supplement or supplant those provisions from time to time (and accordingly, in such case either may be retained by Landlord as its property or may be disposed of, without accountability, in such manner as Landlord may see fit, at Tenant’s expense, inclusive of the reasonable cost of repairing any damage caused by such removal to the extent not attributable to Landlord’s negligence or willful misconduct should Landlord have effected such removal).
ARTICLE XXXVII.
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Parties Bound
Section 37.01.The obligations of this Lease shall bind and benefit the successors and assigns of the Landlord and Tenant with the same effect as if mentioned in each instance where a party is named or referred to, except that (a) the provisions of Section 1.18 shall be applicable and prevail, (b) no violation of the provisions of Article XXIV shall operate to vest any rights in any successor or assignee of Tenant and (c) the provisions of this Article XXXVII shall not be construed as modifying the conditions of limitation contained in Article XX.
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ARTICLE XXXVIII.
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No Other Representations, Construction, Governing Law
Section 38.01.Tenant expressly acknowledges and agrees that Landlord has not made and is not making, and Tenant, in executing and delivering this Lease, is not relying upon, any warranties, representations, promises or statements, except to the extent that the same are expressly set forth in this Lease or in any other written agreement which may be made between the parties concurrently with the execution and delivery of this Lease and shall expressly refer to this Lease. This Lease and said other written agreement(s) made concurrently herewith, if any, are hereinafter referred to as the “Lease Documents”. It is understood and agreed that all understandings and agreements heretofore had between the parties are merged in the Lease Documents, which alone fully and completely express their agreement and that the same are entered into after full investigation, neither party relying upon any statement or representation not embodied in the Lease Documents, made by the other.
Section 38.02.If any of the provisions of this Lease, or the application thereof to any person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of said provision or provisions to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.
Section 38.03.This Lease shall be governed in all respects by the laws of the State of California.
Section 38.04.No change, waiver or estoppel to this Lease or any of the terms hereof shall be valid unless in writing and signed by the party against whom enforcement of the change, waiver or estoppel is sought. Except as otherwise in this Lease provided, no termination of this Lease shall be valid unless in writing and signed by the party against whom enforcement of the termination is sought.
Section 38.05.Except as otherwise provided herein, the terms hereof shall be binding upon and shall inure to the benefit of the heirs, executors, administrators, successors and assigns, respectively of Landlord and Tenant.
Section 38.06.This instrument may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and all of which shall be one and the same document. . For purposes of executing or amending this Lease, any signed document transmitted by facsimile machine or PDF shall be treated in all manner and respects as an original document. The signature of any party thereon shall be considered for those purposes as an original signature, and the document transmitted shall be considered to have the same binding legal effect as an original signature on an original document. No party may raise the use of a facsimile machine or PDF, or the fact that any signature was transmitted through the use of a facsimile or PDF as a defense to the enforcement of this Lease.
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ARTICLE XXXIX.
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Financial Reports
Section 39.01.Tenant hereby advises Landlord that its fiscal year for accounting purposes with respect to the operation of the Demised Premises is the twelve months ending December 31.
Section 39.02.Tenant, upon written request by Landlord (but in no event more frequently than once per calendar year), shall furnish to Landlord full and complete financial statements of Tenant for such annual fiscal period, provided that any recipient(s) of Tenant’s financial statements execute and deliver to Tenant a confidentiality/non-disclosure agreement in form and substance reasonably satisfactory to Tenant prior to the release by Tenant of such financial statements. Each such statement shall be certified by Tenant if Tenant is an individual, by an officer of Tenant if Tenant is a corporation, by a principal beneficiary if Tenant is a Trust, or by a partner of Tenant if Tenant is a partnership, as the case may be, provided, however, that if such financial statements are unconditionally certified by an accountant, Tenant, need not furnish any other certification called for in this Section.
ARTICLE XL.
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Miscellaneous
Section 40.01.Wherever in this Lease, provision is made for the examination, review or audit (collectively, “audit”) of Landlord’s books and records by Tenant or others acting on behalf of Tenant, the following shall apply:
(a)All of the information obtained through the Tenant’s audit (including, without limitation, financial matters such as but not limited to costs, expenses, income) and any other matters pertaining to the Landlord and/or the Demised Premises or any part thereof, as well as any compromise, settlement, or adjustment reached between Landlord and Tenant relative to the results of the audit shall be held in strict confidence by the Tenant and its officers, agents, employees, attorneys, accountants, consultants and like persons or entities; and Tenant shall cause its auditor and any of its officers, agents, employees, attorneys, accountants, consultants and like persons or entities to be similarly bound pursuant to subdivision (b) following.
(b)As a condition precedent to Tenant’s exercise of its rights to audit, Tenant must deliver to Landlord a signed covenant from the auditor in form and substance acceptable to Tenant acknowledging that all of the results of such audit as well as any compromise, settlement, or adjustment reached between Landlord and Tenant shall be held in strict confidence and shall not be revealed in any manner to any person (except as permitted in subsection (a) above) except upon the prior written consent of the Landlord, which consent may be withheld in Landlord’s sole discretion, or if required pursuant to any litigation between Landlord and Tenant materially related to the facts disclosed by such audit, or if required by law.
(c)Tenant understands and agrees that this provision is of material importance to the Landlord and that any violation of the terms of this provision shall result in immediate and irreparable harm to the Landlord.
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(d)If Tenant, its officers, agents, employees, attorneys, accountants, consultants and like persons or entities and/or the auditor violate the terms of this Section 37.01, such violation shall constitute a default under this Lease.
(e)Tenant shall indemnify, defend upon request, and hold Landlord harmless from and against all actual costs, damages, claims, liabilities, expenses, losses, court costs, and reasonable attorney’s fees suffered by or claimed against Landlord, based in whole or in part upon the breach of this Section 37.01 by Tenant and/or its auditor.
(f)The obligations within this Paragraph survive the expiration or earlier termination of the Lease.
Section 40.02.The terms and conditions of that certain letter agreement dated September 14, 2021 between Landlord and Tenant pertaining to the Limited License for Temporary Storage dated September 14, 2021, are hereby merged, incorporated into superseded by the terms and conditions of this Lease.
Section 40.03.If Landlord shall consent to the omission or removal of any part of, or the insertion of, any door or other opening in, any exterior wall, then (i) Tenant shall be responsible for all risk or damage to, or loss or theft of, property arising as an incident to such insertion, omission or removal or the use of such door or other opening, or because of the existence thereof, and indemnifies and saves Landlord harmless from and against any claim, loss, liability or damage for, on or account thereof, and (ii) in the event of termination or expiration of this Lease, Landlord may enter the Building and, at Tenant’s expense, may close up such door or other opening, and Tenant shall not be entitled to any diminution or abatement of Base Rent or Additional Rent or other compensation by reason thereof.
Section 40.04.[Intentionally Omitted].
Section 40.05.Tenant shall not be entitled to exercise any right or option granted to it by the Lease (if any) at any time when Tenant is in default beyond applicable notice and cure periods in the performance or observance of any of the covenants, terms, provisions or conditions on its part to be performed or observed under this Lease.
Section 40.06.This Lease shall be construed and enforced in accordance with the laws of the State of California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR
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ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY OR COMPULSORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW, EXCEPT THAT TENANT SHALL NOT BE PROHIBITED FROM INSTITUTING A COMPULSORY COUNTERCLAIM FOR A LANDLORD DEFAULT UNDER THIS LEASE WHERE SUCH DEFAULT CONSTITUTES THE BASIS FOR TENANT’S GOOD FAITH DEFENSE TO LANDLORD’S NON-PAYMENT CLAIM.
Section 40.07.[Intentionally Omitted].
Section 40.08.The Article headings of this Lease are for convenience only and are not to be given any effect whatsoever in construing this Lease.
Section 40.09.The table of contents preceding this Lease but under the same cover is for the purpose of convenience of references only and is not to be deemed or construed in any way as part of this Lease, nor as supplemental thereto or amendatory thereof.
Section 40.10.This Lease shall not be binding upon Landlord unless and until it is signed by Landlord and a signed copy thereof is delivered by Landlord to Tenant.
Section 40.11.Notwithstanding anything contained herein to the contrary, this Lease shall be null and void and neither party hereto shall have any rights or remedies against the other if the Commencement Date shall not occur prior to the second anniversary of the date of this Lease; it being understood that the purpose of this Section 40.11 is to prevent the application of the rule against perpetuities against the leasehold estate granted by this Lease.
Section 40.12.The various items which are defined in other Articles of this Lease or are defined in Exhibits annexed hereto, shall have the meanings specified in such other Articles and Exhibits for all purposes of this Lease and all agreements supplemental thereto, unless the context shall otherwise require.
Section 40.13.If Landlord or Tenant consists of more than one party, the obligations, representations, warranties and covenants of Landlord or Tenant, as the case may be, hereunder are joint and several as to each such party.
Section 40.14.Except as otherwise expressly provided in this Lease, each covenant, agreement, obligation or other provision of this Lease on Tenant’s part to be performed shall be deemed and construed as a separate and independent covenant of Tenant, not dependent on the observance, fulfillment or performance of any other provision of this Lease.
Section 40.15.Time shall be of the essence with respect to the exercise of any option granted Tenant under this Lease.
Section 40.16.The Exhibits annexed to this Lease shall be deemed part of this Lease with the same force and effect as if such Exhibits were numbered Articles of this Lease.
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Section 40.17.All references in this Lease to numbered Articles, numbered Sections and lettered Exhibits are references to Articles and Sections of this Lease, and Exhibits annexed to (and thereby made part of) this Lease, as the case may be, unless expressly otherwise designated in the context in which used.
Section 40.18.All words and terms used in this Lease, regardless of the number and gender in which used, shall be deemed to include any other number and any other gender as the context in which used may require; and the use herein of the words “successors and assigns” or “successors or assigns” of Landlord or Tenant shall be deemed to include the heirs, legal representatives and assigns of any individual Landlord or Tenant.
Section 40.19.If more than one person is named as or becomes Tenant hereunder, the Landlord may require the signatures of all such persons in connection with any notice to be given or action to be taken by Tenant hereunder. Each person named as Tenant shall be fully and primarily liable for all of the Tenant’s obligations hereunder. Any notice by the Landlord to any person named as Tenant shall be sufficient and shall have the same force and effect as though given to all persons named as Tenant.
Section 40.20.The terms “mortgage” and “deed of trust” are used interchangeably in this Lease, are hereby given identical meanings, and where applicable shall also refer to the notes and/or bonds or other evidence of indebtedness and any chattel mortgages, conditional bills of sale, assignments of rents, security agreements and financing statements executed and delivered in connection with or as part of any such mortgage; as are the term “holder of the mortgage”, “mortgagee”, “trustee” and “beneficiary”; and all of the foregoing are applicable to any of the defined terms used in this Lease relating to a mortgage or a holder thereof.
Section 40.21.Unless the context in which used requires a different construction, the words “herein”, “hereof” and “hereunder” and words of similar import refer to this Lease as a whole and not to any particular Section or subdivision thereof.
Section 40.22.The cover sheet hereto which immediately precedes the Index is a part of this Lease, but in the event of a conflict between any of the provisions of such cover sheet and those otherwise contained in the portion of the Lease beginning on Page 1 hereof, the latter shall prevail and be controlling.
Section 40.23.Tenant shall give notice to Landlord, promptly after Tenant actually learns thereof, of (i) any accident in or about the Demised Premises for which Landlord might be liable, (ii) all fires and other casualties within the Demised Premises, (iii) all damages to or defects in the Demised Premises, including the fixtures, equipment and appurtenances thereof for the repair of which Landlord might be responsible, and (iv) all damage to or defects in any parts of appurtenances of the Building’s sanitary, electrical, heating, ventilating, air-conditioning, elevator and other systems located in or passing through the Buildings or any part thereof.
Section 40.24.The rule of the ejusdem generis shall not be applicable to limit a general statement following or referable to an enumeration of specific matters to matters similar to the matters specifically mentioned.
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Section 40.25.Tenant, in full compliance with the Requirements of all applicable Governmental Authorities, may operate a cafeteria service facility within the Building; provided that the following conditions are satisfied at all time during the operation thereof, (a) only Tenant and its employees may utilize same, (b) Tenant conspicuously displays all required signage of the Riverside County Department of Health Services restricting the use thereof to Tenant and its employees, and (c) the existence of the cafeteria service facility is not advertised on the exterior of the Building and no other forms of outside advertisement is utilized to promote same.
Section 40.26.With respect to any dispute between Landlord and Tenant involving this Lease which is resolved through legal or arbitration proceedings, the non-prevailing party, if evident, shall bear all reasonable fees, costs and expenses of the subject legal or arbitration proceeding, including, without limitation, the reasonable attorney’s fees and costs of the prevailing party.
Section 40.27.Tenant shall have the exclusive right, at no additional cost or expense to Tenant, to use the entire parking area(s) serving the Building.
Section 40.28.California Civil Code Section 1938. For purposes of Section 1938(a) of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Premises have not undergone inspection by a person certified as a Certified Access Specialist (CASp). In addition, the following notice is hereby provided pursuant to Section 1938(e) of the California Civil Code: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” In furtherance of and in connection with such notice: (i) Tenant, having read such notice and understanding Tenant’s right to request and obtain a CASp inspection and with advice of counsel, hereby elects not to obtain such CASp inspection and forever waives its rights to obtain a CASp inspection with respect to the Premises, the Building and/or the Project to the extent permitted by applicable law now or hereafter in effect; and (ii) if the waiver set forth in clause (i) hereinabove is not enforceable pursuant to applicable law now or hereafter in effect, then Landlord and Tenant hereby agree as follows (which constitute the mutual agreement of the parties as to the matters described in the last sentence of the foregoing notice): (A) Tenant shall have the one-time right to request for and obtain a CASp inspection of the Premises only, which request must be made, if at all, in a written notice delivered by Tenant to Landlord within thirty (30) days after the Rent Commencement Date; (B) any CASp inspection timely requested by Tenant shall be conducted (1) between the hours of 9:00 a.m. and 5:00 p.m. on any business day, (2)only after ten (10) days’ prior written notice to Landlord of the date of such CASp inspection, (3)in a professional manner by a CASp designated by Landlord and without any testing that would damage the Premises, the Building or the Project in any way, (4) in accordance with all of the provisions of this Lease applicable to Tenant contracts for construction, and (5) at Tenant’s sole cost and expense, including, without limitation, Tenant’s payment of the fee for such CASp inspection, the fee for any reports and/or certificates prepared
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by the CASp in connection with such CASp inspection (collectively, the “CASp Reports”) and all other costs and expenses in connection therewith; (C) Landlord shall be an express third party beneficiary of Tenant’s contract with the CASp, and any CASp Reports shall be addressed to both Landlord and Tenant; (D) Tenant shall deliver a copy of any CASp Reports to Landlord within two (2) business days after Tenant’s receipt thereof; and (E) any information generated by the CASp inspection and/or contained in the CASp Reports shall not be disclosed by Tenant to anyone other than (I) contractors, subcontractors and/or consultants of Tenant, in each instance who have a need to know such information and who agree in writing not to further disclose such information, or (II)any governmental entity, agency or other person, in each instance to whom disclosure is required by applicable law or by regulatory or judicial process.
ARTICLE XLI.
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Anti-Terrorism Law
Section 41.01.Tenant represents and warrants that:
(a)Neither Tenant nor any of its Affiliated Entities nor any of their respective agents acting or benefiting in any capacity in connection with this Lease (individually a “Tenant Party” and collectively, the “Tenant Parties”) is in violation of any laws relating to terrorism or money laundering, including but not limited to, Executive Order No. 13224 on Terrorist Financing, effective September 23, 2001 (the “Executive Order”), as amended from time to time, and the U.S. Bank Secrecy Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, and as otherwise amended from time to time (collectively, with the Executive Order, “Anti-Terrorism Law”);
(b)No action, proceeding, investigation, charge, claim, report, or notice has been filed, commenced, or threatened against any Tenant Party alleging any violation of any Anti-Terrorism Law;
(c)No Tenant Party has, after due investigation and inquiry, knowledge or notice of any fact, event, circumstance, situation, or condition which could reasonably be expected to result in:
(i)any action, proceeding, investigation, charge, claim, report, or notice being filed, commenced, or threatened against any of them alleging any violation of, or failure to comply with, any Anti-Terrorism Law; or
(ii)the imposition of any civil or criminal penalty against any of them for any failure to so comply.
(d)No Tenant Party is a “Prohibited Person.” A Prohibited Person means any of the following:
(i)a person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order;
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(ii)a person or entity owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order;
(iii)a person or entity with whom Landlord is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;
(iv)a person or entity who or that commits, threatens, or conspires to commit or supports “terrorism” as defined in the Executive Order; or
(v)a person or entity that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Asset Control at its official web site or any replacement website or other replacement official publication of such list;
(e)Tenant has provided Landlord with sufficient information (including names, addresses, and where applicable, jurisdiction of formation or organization) to reasonably permit Landlord to verify the foregoing;
(f)No Tenant Party:
(i)conducts any business or engages in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person;
(ii)deals in, or otherwise engages in any transaction relating to, any property or interests in property blocked under the Executive Order; or
(iii)engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
Section 41.02.Tenant covenants and agrees that during the Term of this Lease: (a) Tenant shall not:
(i)conduct any business or engage in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person;
(ii)deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti-Terrorism Law; or
(iii)engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.
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(b)Before any changes in direct or indirect ownership of any Tenant Party, Tenant shall give a written notice to Landlord:
(i)advising Landlord, in reasonable detail as to the proposed ownership change; and
(ii)reaffirming that the representations and warranties contained in Section 41.01 will remain true and correct.
(c)Tenant agrees promptly to deliver to Landlord (but in any event within ten (10) days of Landlord’s request) any certification or other evidence requested from time to time by Landlord in its reasonable discretion, confirming Tenant’s compliance with the foregoing.
ARTICLE XLII.
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[Intentionally Omitted]
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ARTICLE XLIII.
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Acquisition of Land and Building
Section 43.01.Landlord and Tenant acknowledge and agree that Landlord does not currently own the Land and the Building, but that Landlord has entered into the Purchase Agreement with the Seller which gives Landlord the right to acquire the Land and the Building. The obligations of the parties hereunder are conditioned upon Landlord’s ability to acquire the Land and Building on or before December 31, 2021. If Landlord is unable to obtain the Land and Building by December 31, 2021, either party shall have the right to terminate this Lease by giving at least ten (10) days prior notice to the other party, whereupon this Lease shall be deemed null and void and of no further force or effect, with Tenant and Landlord having no further rights, obligations or liabilities hereunder (except for matters that by the express terms hereof survive termination). Landlord agrees to use reasonable good-faith efforts (not to require institution of litigation or other formal proceedings) to acquire the Land and Building in accordance with the terms of the Purchase Agreement on or before December 31, 2021.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written.
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	LANDLORD:

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	HARVILL AVENUE ASSOCIATES, LLC,

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	a Delaware limited liability company

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	By:
	/s/ David Blumenfeld

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	Name: David Blumenfeld

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	Title: Authorized Signatory

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[SIGNATURES CONTINUED ON NEXT PAGE]
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	TENANT:

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	PHARMAPACKS, LLC,

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	a New York limited liability company

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	By: 
	/s/ Jonathan Webb

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	Name: Jonathan Webb

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	Title: Partner

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