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ORIGINAl'
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Date: October 31, 2006
Subject: Resolution of the Mayor and
Common Council of the City of San
Bernardino authorizing the Mayor to sign a
lease agreement with Russell Properties
Partnership for offsite office space on behalf
of the San Bernardino Police Department.
From: Michael A. Billdt, Chief of Police
Dept: Police Department
Meeting Date: November 20, 2006
Synopsis of Previous Council Action:
None
Recommended Motion:
Adopt resolution.
~~
Michael A. Billdt, Chief of Police
Contact person:
r~rt~;n C;;:tP\T~ TtlpttpnhPTg
Phone:
~~LL"~O~
Supporting data attached:
Ye~
Ward:
All
FUNDING REQUIREMENTS: Amount: $58.270
Source: See Staff Report
Finance:
Council Notes:
;<?GSu
0200 t, - LJ/J 1
Agenda Item No.
If
II /zt) 16~
e CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
Subiect
Resolution of the Mayor and Common Council. of the City of San Bernardino authorizing the
Mayor to sign a lease agreement with Russell Properties Partnership for offsite office space on
behalf of the San Bernardino Police Department.
Back!!round
Up to 2004, the San Bernardino Police Department VicelNarcotics Unit was housed in the offsite
facility located on Hallmark Parkway in an industrial complex. When this building was sold the
Unit was forced to locate a new facility. On March I, 2004, the San Bernardino Police
Department Vice lNarcotics Unit moved into the offsite facility located a
. in the city of San Bernardino. Soon after occupying this building employees began
experiencing an increase in respiratory illnesses. After an inspection and subsequent analysis of
the offsite, it was determined that the facility had environmental concerns, forcing the Unit to
relocate.
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As a courtesy, the San Bernardino County Sheriffs Department offered 1,700 square feet of
interim office space, rent-free at their offsite facility~in San Bernardino.
This site also included warehouse and meeting room~ common areas. The
San Bernardino Police Department VicelNarcotics Unit moved to this facility in November
2005. The resulting cooperative collaboration between the San Bernardino County Sheriffs
Department and the San Bernardino Police Department VicelNarcotics Unit led San Bernardino
County Sheriff Gary Penrod to offer a sub-lease option to the San Bernardino Police Department.
The City of San Bernardino entered into a lease agreement retroactive to April I, 2006 at a
monthly cost of $2,21 0.00 pei month. This included all utilities.
In the second week of October 2006, Captain Steve Klellenberg was notified by the San
Bernardino County Sheriffs Department that they had been awarded a substantial narcotics grant
and would be requiring the office space that the San Bernardino Police Department
VicelNarcotic Unit was currently occupying. Captain Klettenberg was notified that the San
Bernardino Police Department VicelNarcotics Unit would have to vacate the premises in sixty to
ninety days.
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An intensive search immediately began of available commercial property in the city of San
Bernardino. The city of San Bernardino, through the Economic Development Agency, no longer
has any property holdings that are suitable for this operation; thus the services of Lazar and
Lauer Commercial Realty were utilized to facilitate locating an offsite location. A suitable piece
of commercial property has been located at a commercial building"
It has 4,000 square feet of office space and 3,400 square feet of
warehouse space. The current tenant is on a month to month basis and is in the process of
looking for a new location for their business.
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Police department managers have met with the realtors and owners of the building. With some
very minor improvements, the building could be occupied by the San Bernardino Police
Department VicelNarcotic Unit by February 1,2007.
The benefits of relocating to Trac
area are as follows:
o Doubles the square footage, allowing for future expansion. The Police Department may
expand the size of the VicelNarcotics Unit in the future, adding a third street narcotics
enforcement team. A facility having adequate expansion room will save the costs of
relocating the VicelNarcotics Unit should the third team be added.
o Below average cost per square foot: $0.86 cents per square foot, average being from
$1. 00 to $1. 50 per square foot.
o Appropriate anonymity to safeguard investigations and department personnel
o The premises and property will be secured by fencing with internal and external alarm
systems provided at the owners' expense. .~
, Of There will be office space available for potential regional task force involvement that
would benefit the city of San Bernardino. The close proximity of task forces with the San
Bernardino Police Department's VicelNarcotics Unit would increase the sharing of
narcotics enforcement data and increase the number joint narcotics investigations within
the City limits.
o Minimal site improvements required, with a majority do be completed by the owners at
their cost. The Police Department would be responsible for install,i.plll'an automatic gate
and card reader at a projected cost not to exceed $5,000.
o Long term lease (5-years with 5-year option) agreement eliminating repetitive costs of
relocation. The lease payment will be $6,364 per month, with no increase until year three
when a 3.0% increase would occur.
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Financial Impact
One-time moving expenses, operational costs for the remainder of FY 2006/07 and annual
ongoing operational costs associated with this move are illustrated below.
tl " I"t
The Police Department will utilize the following funding sources to cover the one-time moving
e expenses and operating costs for the remainder of FY 2006/07. These costs total $58,270.
Projected Expenses
One-lime
Costs
$ 5,000
$-0-
$-0-
$-0-
$-0-
$-0-
$ 4,200
$ 6000
$ ,200.
Account Number
108-271-5181
001-215-5505
Total
Descri tion
Other 0 eratin Ex cl1ses
Other Professional Services
Ongoing Costs
for FY 2006/07
$-0-
$31,820
$ 7,500
$ 750
$ 1,700
$ 1,300
$-0-
$-0-
$43,070
Ongoing
Annual Costs
$-0-
$76,368
$18,000
$ 1,800
$ 4,080
$ 3,120
$-0-
$-0-
$103,368
Amount
$45,000
$13,270
$58,270
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Recommendation:
Adopt resolution.
Attachments
Exhibit A Russell Properties Partnership Lease Agreement
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE MAYOR TO SIGN A LEASE AGREEMENT
WITH RUSSELL PROPERTIES PARTNERSHIP FOR OFFSITE OFFICE SPACE ON
BEHALF OF THE SAN BERNARDINO POLICE DEPARTMENT.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
SECTION I. The Mayor and Common Council of the City of San Bernardino
authorizes the Mayor to execute a lease agreement between the City of San Bernardino Police
Department and Russell Properties Partnership, authorizing the San Bernardino Police
Department to lease a 7,400 square foot commercial building from Russell Properties
Partnership to house the San Bernardino Police Department Vice and Narcotics Unit.
SECTION 2. The authorization to execute the above referenced lease agreement is
rescinded ifit is not executed within sixty (60) days of the passage of this resolution.
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RESOLUTIO;\' OF THE MAYOR AND COi\ll\fOl'i COUNCIL OF THE CITY OF SAN
BERNARDINO At:THORIZIl'iG THE l\lA YOR TO SIGN A LEASE AGREEMENT
WITH RUSSELL PROPERTIES PARTl'iERSHIP FOR OFFSITE OFFICE SPACE ON
BEHALF OF THE SAN BERNARDINO POLICE DEPARTMENT.
4 I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and
5 Common Council of the City of San Bernardino at a
meeting thereof, held on
6 the
7
day of
, 2006, by the following vote, to wit:
Council Members
Abstain
Absent
Navs
Aves
ESTRADA
BAXTER
VACANT
DERRY
KELLEY
JOHNSON
McCAMMACK
City Clerk
The foregoing resolution is hereby approved this _ day of
,2006.
PATRICK 1. MORRIS, Mayor
City of San Bernardino
Approved as to form:
,
i-l~
ES F. PENMAN, City Attorney
e AIR COMMERCIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAUCOMMERCIAL SINGLE-TENANT LEASE -- GROSS
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. eallle. Provisions ("Basic Provisions")
1 1 Pa"I..: This L.ease (..L......). dated for reference purpose. only Novembe r 2 I 2006
is made by and between Russell Properties Partnership
("Lesllor")
and City of San Bernardino, a Municipal Corporation
.
("L.......).
(collectively Ihe "Partl..,.. or individually a "Party")
1 2 P...mi...: Thai certain real property. including all improvements therein or 10 be pro...ided by Lessor under the terms of Ihis Lease,
.and commonly known .
located in Ihe Counly of San Bernardino . Slale of Cali f orni a
.nd generally described as (describe briefly the nature of the prope~y and, it applicable, Ihe "Project", if Ihe property is located within. Project)
An approximately 7,400 square foot freestandinq sinQle-story office/warehouse buildin~
(size of buildinQ per San Bernardino County Tax Assessor's Records).
("Premls....)
montns ("Original Term") commencing February
13 Term: FIVE vearsandn/a
rt'::omm.ncementOate")andendingJanuarv 31, 2012
(See also Paragraph 3)
1 4 Early Possession: See Addendum "A"
(See also Paragraphs 3 2 and 3 3)
15 Base Rent: 56,364.00
day of each month commencing February 1, 2007
(See also Paragraph 2)
1, 2007
rExplraUon Date1
("EarlV Poss...ion Date")
per month ("B.... Rent"), payable on the FIRST
(See also Paragraph 4)
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12I1f Ihis box is checked, Ihere are provisions in Ihis L.ase for Ihe Base Renllo be adjusted
1 6 Base Rent and Other Monle. Paid Upon Execution:
(a) Sase R.nt: $6,364.00
for the period Fcbru.!D' 1, 2007 - Februarv 28, 2007
CO)
(e)
(d)
Security Depo~lt: SW8 i ved
Association F...: Sn I a
Other: Sn/a
("Security o.posit") (See also Paragraph 5)
for the period n / a
for n/a
17
(e) Total Du. Upon Execution ofti'll. l.a..: $6, 364.00
Agreed Use: A police department operation center
and qeneral
office/warehouse use.
(See also Paragraph 6)
(See also par~firaph 8)
In.urlng Party: Lessor islhe "Inaurlng Party" The annual MSase Prernium" is $n / a
R.al Estate Sroker.: (See also Paragraph 15)
(a) Representation: The following reat esl.le brokers (Itle "Srokers") and brokerage relalionships exisl inlhis Iransaction (check
applicable boxes):
o
o
1tI Lazar
"
, 9
represents Lessor exclusivety"("Le.sor'. Broke"'):
represents Lessee exclusivety (..l....... Broker"): or
Commercial Real Estate represents both Lessor and Less.e ("Dual Ag.ncy")
(b) Payment to Srokers: Upon execulion and delivery of Ihis Le.se by bolh Parties, Lessor shall pay to the Broker Ihe fee agreed 10
in Ih.ir separate written agreement (or if Ihere ;s no such agr.ement, the sum of As Aqreed or % of the total Base Rent) for Ihe
brokerage services r.ndered bV the Brok.rs
1 10 Guarantor The obligations of Ihe Lessee under Ihis Lease are to be guaranteed by n I a
2 Preml....
2 1 L.ttlng, Lellor h.reby leases 10 Lesse.. and Lessee hereby leases from Lessor, lhe Premises, for the lenn. allhe renlal. and
~II of Ihe terms. covenants and condilions set forth in Ihis Lease Unles. olherwise provided herein, any statement of size set forth in Ihis Le..e,
....mav have been used In calculaling R.nt, is an approxlmallon which the Parties agree IS reasonable and any pavmenls based lhereon are 1"101
PAGE 1 OF 13
INlTlAL.S
INITIALS
Cl2001 _ AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG-8-7f01 E
subject to revision whether or nollhe actual size is more or less Nota: L...e. is advi.ed to verify the actual size prior to executing this L....
2 2 Condition. I.,...or shall deliver the Premises 10 Lesse. broom clean end lree 01 debris on the Commencement Date or the Early
Possession Oate, whichever first oecu... ("SWIt Date"), and, '0 long as Ihe required service contracts described in par.graph 7 1(b) below .,.
obtained by Len" and in effect within thirty d..,. foltowing the Start O.le, Wltr.nls that the ellishng electrical, plumbing, fire sprinkler, lighting, helling.
ventilating and air conditioning system. ("HYAC"), lOading doors, lump pumps, if any. and aU other such elements in lhe Premilel, other thin tho..
constructed by Lessee. shalt be in good .,.ting condition on 'aid date and thalltle ,urlae. and slruclural elements of the roof, burin; walls and
endltion of Iny buildings on lhe Premises (Ihe "Building") shall be fre.e of material defects If a non-comp.!iance W.ith said warranty ellis.. ts as of the
rt Date, or il one of such syslems or elemenls should malfundion or fail Wllhin Ihe appropnate warranty penod, Lessor shall, as Lessor's sole
ligation WIth resped 10 such maUer, .)lcept as othel'WlSe provicled in thIS Lease, promptly after receipt ot willlen nohce from Lessee setting forth with
specifiCity the nalure and eldent of such non-compliance, malfunction or failure, redify same at Lessor's expense The w,rranly periods 511all be as
follows: (i) 6 months as 10 the HVAC syslems, and (ii) 30 days as to the remaining systems and oll1er elements oftne Building If Lessee does not give
Lessor the required notice within the appropriate WIIrranty period, correction of ,ny such non-compliance. malfunction or failure shall be lhe Obligation of
lessee al Lessee's sole cosl and eXJHt.ns., allCept for the roof, foundation., and bearing walls which are hal"ldled as provided iA paragraph 7
23 Compliance. Lessor warrants thallhe improvemenls on Ihe Premises comply with lhe building codes, appticlble I,WI, covenanls
or restriClions of record, regul'tions, and ordinances ("Appllcab.. R.qulrem.ntl") that were in effect at Ihe lime Ihal each itnprowmenl, or portion
thereof, was conslrln:ted Said warr.nty does not .pply 10 the use to which Lessee will pullhe P'emises, modilicalions wI'Iich may be reql,llred by the
Americans wilh Disabildies Act or any Similar laws as a result 01 Lessee's use (see Paragraph 50), or 10 any Alterations or UIility Installations (IS
defined in Paragraph 7 3(a)) made or 10 be made by Lessee NOTE: Les... i. responsible lor determining whether or not the Appllcabl.
Requirements, and .specially the zoning, are .ppropriate lor L..s.... Intended use, and acknowledges Ihat p..t 1,1'" 01 the Pre",l... m.y
no long.r be allowed. If the Premises do not comply with said warranty, Lessor sl'lall, except as olherwise provided, promptly after receipl 01 written
notlee from Lessee selling forth with specificity the nature and extenl 01 such non-compliance, rectify llle same allessor's expense If lessee does not
give Lessor wntten notice of a non-compliance with tllis warranly within 6 monlhsfollowing the Start Dale. correction of that non-compliance shall be the
obligation of Leuee allessee's sole cost and eJq)ense If the Applicable Requirements are herealler changed so as to require during the lerm of this
Lease the construction of an addilion 10 or an aneralion of Ihe Premises and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other pllysical modification of the Unit, PremiSes andlor Building ("Capital Expenditure"), lessor and Lessee shall,lIocale lhe cosl
01 such work as follows
(a) Subject to Paragraph 2 3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of lhe
Premises by Lessee as compared with uses by tenants in general, Lenee shall be fully responsible lor the costlhereof, puwided, howtl\ltlr Ihatll such
Capilal Expenditure is required during the last 2 years of Ihis Lease and the cosllhereof exceeds 6 months' Base Renl, Lessee may instead lerminale
this Lease unless Lenor notifies Lessee, in writing. within 10 days after receipt of Lessee's'termination notice that lessor has elected to pay the
difference belween Ihe actual cost Ihereof and an amounl equal to 6 months' Base Renl If Lessee elects termination, Lnsee shall immedialely cease
Ihe use of Ihe Premises which requires such Capilal Expenditure and deliver to lessor written notice specifyil"lg a termination date al leasl 90 days
therealter Such terminalion date shall, howev.r. in no event be earlier Ihan Ihe last day that lessee could legatly ulilize the PremiSes withoul
commencing such Capita! Expenditure
(b) If such Capital Expenditure is not the result of the speCifiC and unique use of tile f;lremises by Lessee (such ai, governl1'len'ally
mandated seismic modifications), lhen Lessor and lessee shall aUocate the obligalion to pay fa, ~LJch costs pursuant to the pro'lisions 01 Paragraph
7 led); provided. however, that if such Capital Ellpendilure is required during the lasl 2 years of this Lease or If Lessor reasonably determines that illS
nol economically feasible to pay ils sha,. thereof, Lessor shall have the option 10 terminale tI1lS Lease upon 90 days prior writlen notice to Lessee
unless Lessee notifies lessor. in writing, within 10 daYI after receipt of lessor's termination notice that Lessee will pay for such Capital ExpendIture If
Lessor does nol elect to terminate, and fails to tender ils share 01 any such Capilal Expenditure, Lessee may advance such funds and deduct same,
with Interest, from Rent until Lessor's share of suCh cosls have been lully paid If lessee is unable to fi"",nce Lessor's share. or if the balance of the
Rent due and payable for Ihe remainder of this Lease is not sufficient to fully reimburse Lessee on an offsel basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor
(cl Notwithstanding Ihe above. the provisions concerning Capital Expendit\lres are intended 10 apply only to ryon-volunfary.
unexpected, and new Applicable RequiremenlS If lhe Capital Ellpenditures are inslead triggered by Lessee as a resun of an aduat or proposed
change in use, change in intensily of use, Of modification to Ihe Premises then. and in lhal event Lessee shall eilher: (i) immedialely cease such
changed use or il"ltenlity Of use andlor take such other sleps as may be necessary 10 elimil"lale the requirement for such Capilal E.penditure, or (ii)
complete such Capital Ellpenditure al its own expense Lessee shall not. howe'l8r, have any right to terminate this Lease
e 2 4 Acknowledgements. Lessee acknowledges that: (al il has been advised by Lessor andlor Brokers 10 satisfy itself with respect 10
e condition of the Premises (inctuding but not limiled to the electrical, HVAC and fire sprinkler systems, securily, environmental aspecls, and
mpliancewith Applicable Requirements and the Americans with Disabilities Acl), and their suilab.ility for Lessee's intended use, (b) Lessee has made
such investIgation as it deems necessary with reference to such matters and assumes all responSibility therefo' as the same relate to ils occupancy of
Ihe Premises, and (c) neither Lessor, lessor's agenls. nor Brokers have made any oral or written representations or warr.nlies with respeclto said
matters other than as set. forth in Ihis Lease In addition. lessor acknowledges that (i) Brokers have made no ,epresentations, promises or warranties
concerning lessee's ability to honor the lease or suitability 10 occupy the Premises. and (ii) il is Lessor's sole ,esponsibility to invesligate Ihe financial
capability andlor suitability 01 all proposed tenants
25 Lessee IS Prior OwnerfOccupant. The warranlies made by Lessor in Paragraph 2 shall be of no force or effecl if immedialely
prior to the Star! Dale lessee was the owner or occupant of Ihe Premises In such event, Lessee shall be responsible for any necessary correctIVe
work
3 Term.
3 1 Term The Commencement Dale, Expiratiol'l Date and Original Term 01 this t.ease are as specified in Paragraph 1 3
3 2 Early Posses. lon, If lessee totally or partially occupies the Premises prior to the Commencement Dale, the obligation to pay
Base Rent shall be abated for the period of such early possession Alt other terms of this Lease (including but not limited to the obligations 10 pay Raal
Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period Any such early possession
shall not allectthe EllpirationDate
33 O.lay In Pos....lon. LelSor agrees 10 use its besl commercially reasonable efforts to deliver possession of the Premises to
lessee by Ihe Commencement Dale If, despite said efforts, l.ssor is ul"labte 10 deliver possessIon by such date, lenor shall nol be subject 10 any
liability therefor, nor shall such failure affecl the validity of this lease lessee shalt not, however. be obligated to pay Rent or perfonn its other
obligations until Lessor delivers possession of the Premises and any period of rent abatemenl that Lessee would otherwise have enjoyed sl'lall run from
the date of deliYery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under Ihe lerms hereof. but minus any
days 01 delay caused by Ihe acts or omissions of Lessee If possession is nol delivered wilhin 60 days alter the Commencement Dale, Lessee may, at
its option, by nolice in writing within 10 days aft.r the end of such 60 day period, cancel Ihis lease. in which event the Parties shall b. discharged from
all obligations hereunder If sucl'l Wfillen nolice is not received by Lessor within said 10 day period, Lessee's. righl to cancel shall tenninate If
possession ollhe Premises is not delivered wilhin 120 days after the Commencement Date, Ihis Lease shall terminate unless other agreements are
reached belween Lessor and Lessee, in wriling
34 Less.. Compllanc.. lessor shall nol be required to deliver possession of the Premises to lessee until Lessee complies with its
obligation to provide evidence of insurance (Paragraph 85) Pending deli....ry of such evidence, Lessee shall be requked to. perform .11 01 its
otlligations under Ihis Lease Irom and .fter the Start Date, induding the payment of Rent, notwithstanding Lessor's election 10 withhold possession
pending receipt of such evidence 01 insurance Further. if lessee is required to perform any other cOnc!;!ions prior to or concurrenl wilh the Start Dale,
the Start Date shall occur but Lessor may elect to withhold possession unlil such conditions are satisfied
4 A.ent
4 1 Rent Defined All monelary obligations of Lessee 10 Lessor under Ihe lerms of lhis Lease (except for the Security DepOSit) are
deeml!(lto be rent ("Rent")
4 2 Payment, Le..ee shan cau.. p.yment of Renllo be received by lessor in lawful money 01 the United Slal.s on or befo~ lhe day
on which it is due, withoul offsel or deduction (ellCept as specifically permitted in Ihis lease) Renllor any period during lhe Ie"", hereol which is for
less than one fult calendar monlh shall be proraled ,based upon the actual number of days 01 said month Payment of Rent shall be made to lessor at
i1s address staled herein or to suct! olher persons or place as Lessor may from lime to time designate in writing Acceplance 01 a payment whict! is
less than the amountlhen due shall nol be. wai\ler of Lessor's rights to the balance of such Rent, regardless 01 lessor's endorsem.nl of any check so
slaling In the event thai any check, draft, or olher instrument of paymenl given by Lessee 10 Lessor is dishonored for any reason, lessee agrees to
_ay 10 lessor the sum of $25 in addition 10 any Lale Charge and Lessor, at itS. option, may reQuire all future payments to be made by Lessee 10 be by
shle(s check Payments Will be applied first 10 accrued late charges and allorney's fees, second to accrued Interest, Ihen to Base Rent and
Operating Expense Increase, and any remaining aMount 10 any other outstandIng charges or costs
PAGE 2 OF 13
INITIALS
INITIALS
lD2001 _ AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG-8.7/01E
4 3 As.sociaUon Fees In addilion to the Sase Rent, Lessee snail p.y 10 Lessor each monlh an .mount eQu.1 10. any owner;s
assOCI.lion or condomInium lees levIed or assessed agalnsllhe Premises Said mones shall be paId. at the same tIme and in lhe ume manner as the
Baae Rent.
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R.I'Pi.nUll~'-i'~'I8'T'ell"&b.u",b.""'I"f'!"i rlll.Arellwlllf-"e 'fI"r,IlIIlDllallll't~1 ~llln nlfllal~
3MflUAI If Ille g"lI.'rit~ Q81111Iill~'IIIII" 1'-.. in ''', III~' IIripi~'i"l II 11>. i"'r....liIlillu ~.-, 81 ;"'.-I"a' S:UVMl' o.,.~~
Ball'A''l1 '''lttrld 1". Ai IIi' 'n i. .m.RtII. Ie unm-tl'r'. . -'If"" '...."'.'R Il:!. i!.i.-<lUI I" UUI I It Ii -;l'wl1 I .vblllnl Ir
'''iIIA" t..nnr .....~"I 1 1""1 '-!I'" 'It .-;r.... I~' [..~(t, gtrif~ 'f t"'" '1.-t nun-" iF1 'IIn', .tl18<laiil ~ t. 1 1 " rn- "f far..".y
i",......i I'Ilr IFlliIl"r IRalt~. ...1.,....... --.1 "'T a. I r..w'l\':l.rn~ I'. ;"1 II' n-' 111 If 'In"~llil' r-I,'....' .... ,I riI',", '".WiR
;tII,Rg' 'tie f Ra"'iilll &Ifill I an III1.UI" i., iA b.nur-. "un-r'l', I rill 1 I, I" ;filAI~, n" iT', lenn ,'"all IIllin'. ," .lIi'l T" In III ,IR
b.llur 11I,",1' ill r'I1iJr,I. sa"I"~' tlilJ~. g''1nl la 'n II I ill~lR"lrli'lt, rsanRalill'S I' 'Iilantl S- S~i'" ;t1a",. iR haAial u"'II'I~
b..lll1r 111I.11 "'il is ,,_willi III I1lelll". tU~"ltj 1;'111&1 I U,. 11111g", ~, ,.rera' '_&8IlVAII_ \.''l''V'' l' ll'll, t 3~9' IRI ''<"!l"I''- V.'er",iAalll<l " U'III
lUll, 11,."111 1""1111111111, lliIl ill~n~ "''III'IIIFlI} III ,II. "la'll. 11'1' 111",-.. ," "l)oO Sla,1 P'11 I"!'" 1m "' "'I" _"'''1 anll.~~
la PI,aJra,1:I ~ 11') Inti, "-nn Ir.n rlh,,- ,.,." f.~' ",.., iU\,I'itj g'II811 FlII \,lull' I 11I1i'elll?, lltn' ...... Ii'~ If It I inlJ I, J;'!lIlIll"'all
lie &8"" ll'lreO: Ie Iia 1-81&1 ""1",1, telisar lFlllrll1 ,"1111. ,".,a',"'I-1 f," a-t V"l II ',~.,a? V~~O&f-U:lo~
6 Use
6 1 USI lessee shall use and occupy the Premises only lor the Agreed Use, or any other legal use whiCh il reaaonably comparable
thereto, and lor no olher purpose Lessee shall nol use or permillhe_ule of the Premises in, a manner lhat IS unlawful. creales dam.g., wasl. or a
nUIsance, Of lhat disturbs occupanls 01 or causes d.m.g. to nel9hborlng premises or properties, Lessor shall nol unreasonably wllhhofd or delay its
consenlt~ any wnllen requesl for a modIfication ollhe Agreed Use, so long, as Ihe same will not Impair the struclu.allnlegrlty ollhe ImprovemenlS on
lhe PremIses or the mechanical or electllc81lySleml ther'ln, and/or il nolllgnlficanl1y more burdensome to lhe P'emlses If Lessor elecll 10 wllhhold
consenl, Lessor Shall within 7 days afler such requeSl give wnllen notilication of same, which nolice shall ,nclude an expl.nallOn of Lessor's objections
10 the change in the Agreed Use
52 Hazardous Substances.
(a) Reportable Uses Require Consent The term "Hazardous Substance" as used '0 lhlS LeISe shall mean any prodUCl.
substance, or waste whose presence. use, rnanufaclure, disposal, Iransportahon, or r.lease, eilher by ,Iself O' in combin.tion with olher m.ler,als
expected to be on Ihe Premises, is eIther (i) potentially inlurious 10 tne public health. safety or welfare, the environmenl or lhe Premises, (iij regulated
or moMored by any governmental authonty, or (iiil a basis for potenlialliability 01 Lessor 10 Iny governmental agency or Ihird party under Iny applicable
statute or common law Iheory Hazardous SubSlances shall include. bul nol be limited 10, hylSrocarbOl"ls. pet.oleum, glloline, and/or crude oil or any
tlroduCls, by-products or frachons thereol Lessee Shall nol engage in any aclivily in or on the Premises wh'ch conSlitu1es . Reportable Use of
HazardOus Substances without the express prior written consent of lessor and limely compliance (al lessee's expense) wilh .11 ....pplicable
Requiremenls "Reportable Use.' shall mean (i) lhe inslallahon or use 01 any above or below ground storage lank, (il) lhe generahon, possession,
slorage, use, transportalion, Of disposal of a Hazardous Substance Ih"lequires . permil from, or wilh respect to whiCh a repotl, nOlice, regislration or
bUSiness plan is required 10 be filed with, any governmental authority, and/or (ili) Ihe presence allhe Prem'ses of a Hazardous Substance wilh respect
10 which any Applicable Requirements requires Ihat a nollce be gIVen to persons entering Of occupy,ng the Premises or neighbOring properhes
Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably reQui,ed to be used in Ihe normal course of the
Agreed Use, ordinary offIce supplies (copier toner, liquid paper, glue, etc) and common household cleamng materials, so long as such use is In
compliance wilh all Applicable Requiremenls, is not' Reportable Use, and does nol .xpose the Premises or ne'ghboring prl)gerty 10 any me'lllnlnglul
risk 01 conlaminalion or damage or expose Lessor 10 any liability lherelor In addillon, Lessor may cond,t,on lIS consent to any Reportable Use upon
receiving such addiltonal assurances as lessor reasonably deems necessary 10 protect itself, Ihe publiC, 'he Pll~mises arllVor the environment against
damage. conlamination, Injury and/or Iiabilily, including, but nollimiled to, the inslallation (and removal on or before Lease expiralion or termination) of
~eclive modifIcations (such as concrete encasements) andJor increaSing lhe Security Deposll
(b) Duty to Inform lessor If Lessee knows, or has reason.blt cause 10 believe. that a Hazardous Substance haS come to be
d in, on, unde_r or aboulthe P.emises, other than as previously consenled to by Lellor. lessee shall"lmmed,ately give wrlllen notice 01 suctllacl
ssor, and prOVIde lessor With a copy 01 any report, nollce, claIm 01 olher documentation which .t has concern,ng the presence 01 suCh Hazardous
SubSlance
(c) Lessle Remediation. Lessee shall nol c.use or permil any Hazardous Subslance 10 be spilled or released in, on, under, or
aboul the Premises (including lhrough Ihe plumbing or sanitary sewer system) and shall promptly. at Lessee's expense, comply with all ....ppllcable
Requirements and take all investigatory and/or remedial action reasonably recommended, whelher or nOllormally ordered or required. fOI Ihe cleanup
of any conlaminatlon of, and for Ihe mainlenance, Slcurity andJor moniloring ollhe Premises or neighboring properlies. Ihat wts caused or materially
contributed 10 by Lessee, or pertaining to or involVing any HazardOUS Substance brought onlo the Premises during Ihe lerm Ollhls Lease, by or for
Lessee, or any Ihird party
(d) Lessee Indemnification lessee Shall indemnify, defend and hold Lessor, its agenls. employee., lenders and ground lessor,
if any, harmless from and againsl any and all 1055 of rents and/or damages, liabilities, judgments, claims. exoenses, penalties, and allomeys' and
consultanls' fee. arising out 01 or involving any Hazardous Subslance brought onlo Ihe Premises by or for less.e, or Iny third pany (provided,
however, that L.ssee shall have no liabilily under Ihis LeISe with respect 10 underground migration Of any Hazardous Substance under Ihe Premises
Irom adiacent properties not caused Of conhibuled to by L.llee) lelSe.'s obl'9.llons shan include, but nol be limit'd to, the effecls of any
conllmination or injury to person, property or the environment created 01 suffered by lessee, and the cosl Of .nvestigatlOn. removal, .emedialion,
restor.'ion andlor abatement, and shall survive the expiration or lermination 01 Ihis Lease No termination, cancellation or release agreement
enterad into by Lessor and Lessee shall re'e..e lessee from its obligations under this Lease with respect to HazardOUS Substances, unless
specifically so agreed by Lessor in writing at the tlm. 01 such agreement
(e) lessor Indemnification, lessor and ilS successors and assigns shall indemnify. defend, reimburse and hold lessee, ils
employees and lenders, harmless from and 8gainst any and all enVIronmental damages, including the COSl ot rem.dialion, which resull Irom
Hazardous Substances which .xisled on Ihe Premises pllor to Lessee's occupancy or which are caused by the gloss negligence 01 willful misconducl
ollessol, its agenlS or employees Lessor's obligations, as and when required by the Applicable ReQuilements, shall include, but not be Ilmlled 10,the
COSI of investigatIon, removaJ, remediation, reSloralion .nd/or abatemenl, and shall survivelhe expi.ahon 0' lerminalion of Ihis Lease
(I) Investigations and Rem.dlatlon. Lenor shalt retain the responsibility and pay for af'!y .nvesligaliOns or remediation
measures required by go~rnmenlal entilies having. Jurisdiction WlII'I respeclto the eXistence of HazardOUS Substances on lhe Premises prror 10
lessee's occupancy, unless such remediation measure is required as a resull of Lessee's use jincludmg -Alteral'ons~, as defined in paragraph 7 3(a)
below) 01 Ihe PremIses, in which event Lessee shall be responsible lor such payment Lessee shall cooperate lully ,n any such aclivities al the reQuesI
01 lessor, including allowing Lessor and Lessor's agenlllo have reasonable access 10 Ihe Premises al reasonable Innes in order 10 cany oullesso'-s
mvesligative and remediat responsibilitieS
(g) llSlor Termination Option. II a HUlldous Substance CondItion (see Paragraph 9 He)) I'lccurs during Ihe lerm ollhis lene,
unless Lessee is leg.lly responsible Iherefor (in whiCh case Lessee shall make Ihe Invesllgation and .emed,allon Ihereof rlquired by Ihe Applicable
Requirements and this Lease shall continue in fulllorce and effect, but subiecllo lessor's rights under Paragraph 62(d) Ind Paragraph 13), lessor
may, al Lessor's option, eilher (I) investigate and remediale such Hazardous Substance Condihon. If reowed. as soon as reasonably pOSSible at
Lessor's expense, in wl:lich e~nllhis Lease shall continue In fulllorce and effect, or (ii). if Ihe est,mated Cosl to remediale SuCh condition e..ceeds 12
limes the then monthly Base Renl or S100,OOO, whichever is 9realll, give Wfillen nolice to Lessee, within 30 days aller rlceipl by Lessor of knowledge
of the occurrence olluch Hazardous Substance Condition, of lessor'. desire to terminate this Lease as of the date 60 days following the dill of luch
notiCe, In Ihe event L.nor Ilect. 10 give . I.""inatlon nOlice, Le.... may, within 10 daYI Ihereafter, give wriU.n nOliC. to LeuO!' oll.essee'l
commitment to pay Ihe amount by whiCh Il'1e COlt ollhe remedlallon of luch H.urdous Subltlnce Condition exceed. an amount equal to 12 llInes the
Ih.n monthly Base Renl or SIOO,OOO, whichever is gr.ater Lessee sh.11 provide Lessor w,Ih said funds or salisfaclot'( assurance thereof wilhin 30
days following such commilment In such event. this lease Ihall continue in rull force and elfecl, IlInd lessor shall proceed 10 make such remediation
as soon as IelSonably possible alter lhe required funds are available If Lessee does not give such nolice and provide Ihe reqUlfed lunds or assurance
_eOf within lhe lime prOVided, this Lease shalllerrninale as of Ihe dale speCIfied In Lessor's notice ollerminalion
63 Lesse.'s Compliance with Applicable Requirements, Except as olherwise provided in Ihis Leese, Lessee Shall, al lessee's
expense, tully. diligenlly and in a timely manner, mateflally compiy wilh all AppliCable ReQuiremenls, Ihe requltements 01 any applicable tile
urance underwriter or riling bureau, and lhe recommendalions of I.essor's engineers and/Of consullanls wh'ch relate in any manner 10 the such
P....GE 3 OF 13
INITIALS
INITIALS
C20a1 ,AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG.8.7/01E
Requirements, w~hOu' regard 10 whelher such Requi,emenlS are now in etteell)l' become effective aner the Stan Dale lessee shall, 'withm 10 diys
ahe, receipt Of lessor's wrlllen request, provide Lessor with copies of .11 permit. and other documents. and other inlOO1l.bon evlClenong Lessee's
compliance with any Applicable ReQuiremenl. specified by lessor, and Shill immediatety upon ril!cetpl. notify Lessor in Wfiling (with eoples of any
documents invOlved) allny threatened or actual claim, nolice, citation, warning. complaint or report pel'l'lning-lo or InvOlvIng lhelailur. of Less.. or the
Premise. 10 comply WIth any Applicable ReqUIrements _
~ 64 In.paction: Compliance Lessor and Leslor's "Lender" (as defined in Paragraph 30) and consultants shall-h.ve the-right 10
to Premises al any lime, in the cale of an emergency, and olnerwise at reasonable lit1les afler reasonabte nolice, for lhe purpoH 01 inspecting
lIion of lhe Premises and for verifying compliance by Lessee with ttlts Lease The COsl of any suCh i~sl1echons shalt be paid by Leu-or, unless
a lalion of Applicable Requirements. or a Haurdous Substance Condition (see paragllph 9 1) IS lound 10 elllSl or be mm.inent. or the Inspection is -
requested or ordered by a governmenlal aulhorily In such case. Lessee shall upon reque.1 reimburse lessor for the coS! of IUCI'I lnspeclion. so long
as such inspection is reasonably relaltl<l to the violation or conlaminahon In addition, lessee shall provide copies of all relevanJ malerial salely dala
sheelS (MSOS) to Lessor wlthm 10 days of Ihe receipt of a wtiUen requeSllherefor -
7 Maintenance; Repairs; Utility Installations; Trade Fixtures and AlteraUons.
7 1 Leasee's Obligations
(a) In General Subjeclto the provisions of Paragraph 2 2 (Conditionl, 2 3 (Comphance), 6 3 (lessee's Compti.nce with Applicable
Requirements). 72 (lessor's Obligahonsl, 9 (Damage or Destruction). and 14 (CondemnatIon). lessee shall, at Less..'. 101e expenle. keep Ihe
Premises. Utihly Instillations (intended for Lessee's ellclusive use. no malter where IOclled). and Alterations in good order, condition and repair
(whether or not 11'1. pottion of Ihe Premia.lrequinng r"pairs. orlhe means 01 repairing Ihe same. are reasonably or readily leee..ible 10 Lessee. .nd
wh.ther or nollh. neld for such repairs occurs IS a result of L'ssee's us.. any prior UII. the elemenls or the age 01 suCh pol'tion of lhe Premises).
including. bul nollimiled 10, alt equipmenl orlacilities. such IS plumbing. HVAC equipmenl. etectncat. lighting rac,hlies, botlers, pressure vessels, lire
prolection system. fixtures. waHs (interior and exlerior). ceilings, floors. windows. doors. plale glass. skylightS. landscepitlg, dri~aYI. parking lots.
f,nees. retaining waUs, signs. side......lks and parkways localed in. on. or adjac.nl to th. Premises Lessee is also responSible for keeping lhe roof and
roof dtainage clean and free of debris Lessor shall keep Ihe surface and Il/Vclural elements of the roof. foundalions. .nd bearing walls in good repair
(see paragraph 7.2) Lessee, in keeping the Premises in good order, condition 'ncl. rep.ir. shall exerCise and perform good maintenance practices.
specillcally includIng the procuremenland malnlenanc. of Ihe servIce conlracts reqUired by Paragraph 7 l(b} belo..... Less.... obligations shall inClude
reslorations, replacemenls or renewals when necessary 10 keep Ihe Premises and all improvements theleon or a part thereof in good order. condition
and slale of repair lessee shalt. during Iheterm of lhiS Lease. keep lhe .xterior appe.rance of the Building in a flrsl.class condition (including. . g
graflili removal) consislent.....'th the exterior appearance of olher similar facilities of comparlble age and size in lhe viClnily. including. when necessary.
the exlerior repaInting of the Buildin9
~p iu ~"R1rlQ" 6...". ,"all. al bonna', ..'a. PII1I1. p.g; 'a r~ S;I1lrutl, It! lap." to bo...ur. ip,
CIl'tlT', 1&"'" i111~ IlllnU"lu 'a, aR" iltl nRlra,;I,;" 1'1';1"1-' 1-1 a "'-,nnll '- '''9 -, tll a sa 0' It! flU; 'r. I~~~AG
IT" 8. IR". if a"l.. .',. 111 .....~ ,Ial'." 0- 11>, p-. .,". n '4''''~ ',IJIlPFlIUI. n R'8 'a'. i~V ;'enu e &",16. C) "a alt"r,j,". 9 s~
Ra'll~iRif'9 01'9'- il-9'~' 5-01 e gel,ChflR.J. ) laR"ulp. 9 er" .r(lalill*' .,etame. ( I ralarllTS. 1) lIn;: ~r", 'aalltllll. iIIsrRulart:"~ilriklMJ,.
1IP''''j ."J a . 811"1 'II' 'li-e",I.' 18U"l.g~. re~llir,~ Do, 1.'"0< "8 .. Ir. bolllaT ran,. II I!:II! ~ 1/';9';' ",".10 lif;; II ,-1 ma~
all) ar all al & tlR Ul'ae ;s",lrailS. aRII if 681"r Slalnll. b811n .Illlt a'""!glj'U' tllU. ~1l~'IlT lloe uti 'Ilarnf
tcl Failure to Perform If Lessee fails 10 perform Lessee's obligalions under this Paragraph 7 1. Lessor may enler upon the
Premises Iller 10 days' prior wrlllen notice 10 Lessee (excepl in the case of an emergency. in which case r'lO nollee shalt be reQuired). perform such
obligations on Lessee.s beha". and pUlltle Premises in good order. condition and repair. and Lessee shall promptly pay to Lessor a sum equal 10 115%
of the cosUhereof .
(d) Replacement SUbJect 10 lessee's indemnification of Lessor as sel forth in Parag~aph 8 7 be!ow. and without relievtn; Lessee
of liabilily resuhing from Lessee's failure 10 exercise and perform good m,lnlenance practices, II an Item descnbed in Paragraph 7 1(b) cannel be
repaired othel than at a cost which is In ellcess of 50% of the cost 01 replacing such ilem. Ihen such ilem Shall be replaced by lessor. and Ihe cost
thereof shall be prorated belween Ihe Parties and lessee shaH only be obtigated to pay. each month during lhe remainder ollhe lerm of this Ldase. on
the dale on which Base Rent IS due. In amounl equ.t to Ihe producl of mulhptylng the COil of such replacement by a fraction. the numerator of wnlch IS
one. and the denominltor of which is 144 (ie 1/14411'1 of lhe cost per monlh) Lessee shall pay IntereSI on the unamortized balance at a rale Ihat is
commerciatly reasonable in the judgmenl of Lesso(s accountants Lessee may, however. prepay its obligation al any lime
_ 72 Lessor's Obligations. Subject to Ihe provisions 01 Paragraphs 2 2 (Condition). 2 3 (Compliance). 9 (Oam.ge or Deslruction) and
ondemnalion}. it is intended by the Parties herelo Ihal Leuor have no obtigatlOn, in any manner whalsoever, 10 repair and mainlaln Ihe Premises.
equipment therein. all of which obligations are intended to be thai of Ihe Lessee. except for Ihe surface and structural elements ollhe roor.
dalions and bearing .....alls. the repair of which shall be Ihe responsibility 01 Lessor upon receipl of .....rillen notice that such a repair is necessary II is
It\e intention of the Plrt.es lhatthe lerms of this lease govern lhe respeclive obtigations of Ihe Parties as to maintenance and I1Ipair ollhe Premises.
and they elCpressly waive the benefit of any stllute now or hereafler in elleclto Ihe exlent il is inconSistent WIth the terms of Ihis Lease
73 Utility Installations; Trade Fix'ures; AIlerations.
(a) Oefinitions The lerm "Utility Installation'" relers '0 an floor and window covenngs, aoT andfor vacuum lines. power panels,
electrica' dislribulion. security and fire prolecbon systems. communication cabling. I1ghllng fllllures, HVA.C eQuLpmenl. plumblr\9, and fenCIng In or on
Ihe Premises The term "Trade Fixtures" shall mean Lessee's machinery and equipment Ihal can be remov,d .....,thout doing malerial damage to the
Premises The term "Alterations" ,hall mean any modilicalion of the improvemenls. olher than Utlllly Installations or Trade Fixture'l. whether by
addllion or deletion "Lessee Owned Alterations and/or Utility Installations'; lire defined as. Alterations andlor Uhlity Installations made by Lessee
tha! are not yet owned by Lessor pursuant to Paragraph 7 4(a)
(b) Conlent lessee shall not make any Alterations or Ulillty Installalions to Ihe PremIses without Lessor's prior wrillen consenl
Lessee may, however. make non.structural Utility Inslallalions to the interior of Ihe Premises (excludinglhe roof) without such COnsent but upon nOlice
10 Lenor. as lOng as they are nol visible Irorn the oulsicle. do nol involve puncturing, relocating or removtng the roof or .ny existing walls. WIll not affecl
lhe: electrical. plumbing. HVAC. and/or lile salety syslems, and Ihe cumulative COlllh.reof during this lease as eJflended does not exceed a sum equal
to 3 monlh's Base Renl in the aggregate or a sum equal 10 one monlh's Base Rent in anyone year NotWIthstanding Iheloregoing. Lessee shall nol
"ake or permit any roof penetrations and/or inslall anylhing on the rool without lhe prior wllllen approval 01 Lessor Lessor mey. as a precondition to
3ranling such approval. reQuire lessee 10 utiliZe a conlractor chosen and/or spproved by Lessor Any Alterarlons or Utilily In,tallalions Ihal Lessee
sl'lall desire to make and which require the consenl of the lessor shall be presenled to Lessor In w"tten form w.lh detaIled plans Consenl shall be
~eemed conditioned upon Lessee's: (i) aequiring all applicable governmental permits. (ii) furniShing Lessor With copies of both Ihe permits and Ihe
:llans and specifications prior 10 commencemenl of the work. and (iii) compliance with all condillons of Silld permils and olher Applicable Requi,ernenls
tI a prompt and ellpedilious manner Any Alterations or Utitity Inslallations shalf be performed tn a workmanlike manMr wilh good and sulllcienl
Tlaterials lessee shall promptly upon completion furniSh lenor With as.bulll plans and speclflcahons For work .....hich coslS an amount in excess of
:lne monlh's Base Renl. Lessor may condition its consent upon Lessee providing a lien and comptetlon bond In In .mounl equlllo 150% of the
!stimaled cost of such Alleration or Utility Inslallation and/or upon Lessee's posting an addllional Security Deposit wifh Lessor
(c) Uens; Bonds, Lessee sh.H pay. when due, all claims for labor or materials lurnished or alteged 10 have been furnished to or
for Lessee lit or for use on Ihe Premises. which claims are or may be secured by any mechanic's or materialmen's lien againsllhe Premises or any
nlerell therein Lessee shall gIve Lessor not 'ess Ihan 10 days nolice prior 10 the commencemenl 01 any work ijl, on or aboullhe Premises, and
_e5l0r shaH have lhe flghllo posl nollces of non.responsibllity tf Lessee shall conlesl the valldlly of any such lien, cla1tT'l Of demlnd. Ihen Lessee
.hall. at ItS sole expense defend and prOlect ilself. Lessor and the Premises against the same and shaH pay and sahsf't any such adverse judgmenl thai
Tlay be rendered !hereon betore Ihe enforcement Ihereot \I Lessor shalt lequire. Lessee shaH IUfflish a surely bond in an amount equat to 150% of the
~mounl of such contested lien. claim or demand. indemnif'ting lessor agalnslliabibly for Ihe same If Lessor eleclS 10 participale in any such action.
_ess", shall pay Lessor's attorneys' lees and costs
74 Ownership; Removal; Surrender; and Restolltion
(a) Ownership, Subjecl to Lesso(s right to require remov.1 or elecl ownership as hi!Heinafler provided, all Allerations and Ulllity
nltlll.tions m.de by LelsH shall be the property Of Lessee, but consider.d a p.tt ollhe Premises Lenor may. al.fly time. eleet in writing to be Il'le
)Wftfr of III or.ny .peclfl.d p." of lh. L..... Owned AheraliOns Ind Ulllity In.ta"aliona. Unless olhel'Nise inslructed per p.ragraph 7 4(b) hereof. .11
.1I18e Owned Allerelians and Utility Inllelllllonl s"alt. at 1M e"plrallon or termination 01 this Lene. become the property of Lessor and be
;.urrendered by Lessee with the Premises
(b) Removal By detivery to Lessee of wrlllen notice from L.ssor nel earlier Iha.n gO and nollller than 30 days prior to lhe end of
he term of this Lease. Lessor may require thlt .ny or all Lessee Owned Alterllions or Utility Installalions be removed by the expilllion or termmation of
_.~:~s:on;::t'or may require Ihe removal al any lime of all or any pa".of Iny Lessee O.....ned Anerallons or Utility Inslallalions made wilhout lhe
(c) Surrender; Res\ofllltlCln. Lessee shill surrender .Ihe Premises by Ihe Ellplrallon Dale or any e"ber termlnallondale. WIth all Of
e Improvements, pans and surfaces thereof broom clean and free of detlfls. and In good operahng order. condItIon and stale of repalt. ordinary wear
PAGE. OF 13
NiTiAi:S
INlTIAL5
~001 ,AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG-8.7/01E
1nd lear exctl)lftd "Ordinary wear and lear- stlall nol include any damage or deterioration thai would hall" been prevented by good -rnainlenance
JraC1ic:e NotwithstandIng lhe foregoing: ., Ih.s LeIse ., for 12 monlt'ls or less. then lessee shall $\.)(fender lhe Premises in the ume cencllllOn as
:Jellvered 10 Lessee on Ihe Slart Dale With NO allowance for ord.,...ry wear and Ielf Lessee shall repiuf any damage oct'Stoned by the inSl.llIlion,
nalnlenlnce or removal of Trade Fixtures, Lessee owned An.raUons ,ndlor UtIlity Instlllalions, furnishings. and equipment .. wen 8S the removal of
I"y slorage tank mstalled by or lor Lessee Lessee shall completely remove from the Premises any and all Hazardous Subslances brought onto the
_ises by or fot lessee. or any third. patty (except Haurdous Substances which were deposiled via underground migration. .from arus.oUIS_.id. of the
es, or if applIcable, Ihe Pro"Cl) even if such removal would require Lessee fo perform or pay for work lhal exceeds slatulory requllemenls
ildures shall remain the property 01 Lessee and sha" be removed by lessee Any personal property of Lessee not removed on or before lhe
Ion Oale or any earlier terminallon d.'e snail be deemed to "ave been abandoned by Lessee and maY'be disposed of or retained by LeS!lor as
_essor may deSIre The failure by Lessee 1,0 Ilmely vacate Ihe PremIses pursuanllo thiS Paragraph 7 4(c) w,lhoullhe elrpreu ""illen consenl of Lessor
shaU conslllule a holdover under Ihe prOVISIonS of Paragraph 26 below
Insurance; Indemnity
8,~ Pa~m'r\.. P"'''''1Il''l lAnea...
tI}Id.....s..I" '1, I. b.....r 11'1, '. r n ;lIt '-11tn ("lfI.'~Tloq.. ~ll'I' 'J'1lr..,II") In g TII~li,", '''1 I.rlr v'l'" I.' nn
'R'~1I1l11 ~nl In;run .11" 11 n aA, . i un if!. It'll alhl.I ....1 .1 It'll ioq.~', it II~ -II~_IIA~I' na ainl!" 1I,1(1I}, t,2(I)a"tt 81!1I1 ("R'~1Iirllil
!AtwrIFlu"l. 8 Ir aRd ah e l!:Ie laan Prami\llM II !:Iarl'n.ft.r de"'" urlllllal.lilvoq .11 a 1.' Iln'I, '-au aA~!-I,.a.. .11." --81 de lI~t 1\$1-"
",'I.i 18 i1'1II1U8I reul'''..g frll"'" 1"'8 1"l.I\I'a If I.I1i"I'S IIC .aRC1.. r ~ lit or 'Mls.i'" If 'III"', l!1I 'I-e..,ll ll' U', ".'11 I' -'~g'ga ..........
Ir\llsl 88 IfRg 11:18 P 8""&86, AllFuud al~llaA af Ute Pr....n... iI i'l r fI 8M 1;1'" 1Ila Rln.u ,....8 lla1n a 811'11 f'J" 18 f~""'-hH
.... -,. .a"_i'11l1'11_' lA.+4Il1I1A.lal. 1l'1A' I:Im "II tlu "'." . Ii '..I . it 'nut CIJ'lltls AlfUEl "Ill e'4h&.P'S"l'l-"I, I' I"s ..~'.. t.iI It 'R,,<I.
iI 1Il,It,r ''''''IlIAI 11'1 Paf.gralll> _',_9, I~er 11:'18 glle Pr.m'ww I".r 'n It.'s ..' '''Ablal liT. '~"" rtlIIAal:', llb'Ia Aa'll'" Iii" 1'"1 os.,. ....i 'A''''I ;. "8f
I", UTrrel1n-eRI 8ftl'1e 9 iRa'Term f8n"'e A,_rni "u 8fl1:11 Pr.",,-,... 11"1 R8 '''AI "'a , Ir, Il'allleuu Ill! 81llal1s'II" fa ,1'1,>'1l8,hR 81tl:11
..,a.... 1'"8 1118- u., ill""~ I.v'lla' 1I'g "'. -I' 'S n ;.rr ei la, 1........ ~ri. .... .,'a," t 2(vl A 811;851 Il' n,OOQ,m 1111 n;l 1 n.
Cia) 1....81 ."'It" Ila) .... &lile" IPI s 81 {"ill '-;r.... ,.1....18 '.... JI:' ~'.s ;.... felielllll,' ."1'''' nil. 8flt'l. pn...- -
slallmeFlI i ;I"'s 'liSllFl.Il'e. 'i, ill ..11:1. a~1 tie, 'f It'll i"'\lItlRU "c";'.. 11.' If ul"erft/,;er liEf Sf 911's fI 111.1. Ia..irlII..t~1 ... .m'u..
'111.11."'" Blnlllsl Ir 11ll..euel a IIalellRlRt 8flt'l. a-I I 81 "'11t'll"ll~r'Rn Ca." i un all'll la'l:'llll ", IfI4"S Pn1lA'n. 11'1\1'" J -.. 'un ;'lI',
i.la,'I"lmaI'Ae' - ....,... I' ,'" a-v' I f1 f1 II I. i_ PreA'illll"l1fit PV'Il, p.r,TII, ;;-~. i :J El~~1I !I1l.~IR1fIl.:l'I"'" .!~
.."'.tlllllI"ale;I;;; 11.;,111;1"8 Is l"l 911....l,,8U..
a 2 liability Insurance.
(al Carried by LeSlee. Leu" shall obtain Ind knp in force a Commercial General liab,lity policy of insurance prolecting Lessee
and Lessor as an addlllonallnsured againsl claim. for bodily InJUry, personallnjuty and propetly damage based upon or ariling oul of Ihe ownership.
use, occupancyor mainlenance of Ihe Premise. and 'II flreas .ppurlenanllherelo Such insurance shall be on an OCCUf/'ence bit.. providing single
limit coverage In an amount not leu lhln S1,000,Ooo per occurrence with an annual aggregale of nol less lhan S2,000.000, -an ~Addllional
tnsured.Managers or Lessors of Premises Endorsement~ and contain Ihe ~Amendment of Ih. Pollution Ellcluslon Endorsem.nlM lor damage caused by
heat, smoke or lumes from a hoslile fire The policy shall nol conlain any inlra.insured eXClusions as belween Insured persons or organlZallons, bul
shan include coverage lor liability assumed under Ihls Leate as an "Insured conlract~ for Ihe performance of Lessee's ind.rnnrty obhgations under Ihis
Lease The Iimils of said insurance shall nOI, however, IImitlhe liabilily of Lessee nor relieve Lessee of any obligation hereunder All insurance carried
by Lessee ,hall be primaty 10 and nol conlribulory wilh any similar Insurance carried by Les.or, whose 'nsurance shall be considered exces.s insurance
only In lieu of , pOlity of .n!1urante, 'the Ci'ty mlly provWle II Certiilc.u of S,If.lrl!1urltr\tc to LU!oOf
(b) Carried by Lelsor. Lessor shall mainlain Iiabilily insurance as deSCribed in Paragraph 8 2(a), in addition 10. and nol in lieu of.
the insurance requiTed to be malnlained by Lessee Lessee shall nol be named as an addlhonal,nsured the rem
8 3 Property Insuranc. . Building, Improvem.nts and Rent.1 V.lu..
(a) Building and Improvements The Insuring P.rty shall oblain and keep in force a policy or policies in In. name of Lessor, with
loSS payable to Lessor. any ground-lessor, and to any Lender insuring loss or damage to the Premises The amounl Of such insurance shall be equal 10
Ihe lull replacement cost of Ihe Premiles, as In. same Ihall exist Irom lIme 10 lime, Ot the amount required by any Lender, bul in no evenl mOle than
Ihe commercially reasonable and available insurable v.lue Ihereof If Lessor is the Insuting Pal1y. however, Less" Owned Alleralions and Ulility
Installalions. Trade Fixtures, and Lessee's petsonal properly shall be insured by Lessee under Paragraph 8 .. ralher Ih.n by Lessor II t/'le coverage is
_Iable.and c ommercl.'.IIY appr.opriale, SUCh. po. Hcy. or policies .Stl.,1 ins",'. 'gainsl all risks of direct physical loss or damage (except Ih, perils of flood
r earthquake unless reqUired by a Lender or Included In Ihe Base Premium), including coverage for debns Temoval .nd Ihe enforcement of any
able Re<:\ulrements requIring Ihe upgradIng, demolition, teconslrucllon or replacemenl of any portion 01 Ihe PremISes II lhe resu" oj a covered
SaId poliCY or pohcles shall also conlaln an agreed valuallon prOViSIon In lieu of any cOinsurance clause. waiver ol.ubtogation. and inll.llOn guard
prolection causing an increase in Ihe annual propeny insurance coverage .mount by a lactor of nollen lhan Ihe adjUllId U S Oep'rlmenl of Labor
Consumer Price Index for All Urban Consumers lor Ihe cily nearesl 10 where the Premises are loealed II such insurance coverage t'l1I a deduchble
clause, Ihe deductible amounl shall nol exceed S 1 ,000 per occurrence, and Lessee shall be liable lor such dedUCtible amount in Ihe event of an Insured
Loss
(b) Rental Valu,. The Insuling Party shall obtain and keep in fOfce a policy or pOlicies in lhe name of Lessor wilh loss payable 10
Lessor and any Lender, insuring Ihe loss ollhe full Rent for one year wilh an 8lllended periOd 01 indemnity for an adddional 1eO days ("'Rental Value
~") Said insurance shall conlain an agreed valuation provision in lieu of any coinsurance clause, and It'le amounl of coverage shall be
adjuSled anrtually 10 reflecllhe projecled Renl olherwise ~yable by Lessee. for Ihe next 12 month petiod Lessee shall be liable lor ,ny deductible
amount in Ihe evenl of such loss
(c) ATlljaroen' PrI""'" "I'" PrlllR-Ut 1ft ,art af; 'a'9'I'liI "i'AI, 8r;f a "; Il-~~Wf lilli, bun ~';"'-aM4Clj&ceAl
III I"'e PreA'-sel, IRI l..e""88 111;'1 ~a'l "; a-'lAlr.... joq I.... IIflwiu"". ~. ll:l. ll'IiIl.A, At u;>-t9 i' S i" b"'IIAg ;. ~liiIlJ.' u gA;rUII ~.
;alol," II') hen.,'1 a;ll. 8l"1I-'RI, I:IU 81 "'8~'1I a. 8f tlil. PrlmtMolo,
a 4 Lesse,'s Pfoperty; Busln... Interruption Insur.nc,.
(a) Property Oamag, Lessee shall obtain and maintain insurance coverage on all 01 Lessee's personal property, Trade Fixtures.
and Lessee Owned Alterations Ind Ulilily Inslallalions Such insurance shall be full replacemenl cosl coverage with a deduclible 01 not 10 exceed
$1,000 per occurrence The proceedl Irom any luch insurance shall be used by t.essee lor lhe replacement of person.1 property, Trade FIxtures and
Lesse' Owned Alterations and Utilily tnslallllions Leslee shan provide Lessor with wrlllen evidence thai such insurance is in force
(b)~Il1tllrl;lp1i."l 'IIUI.t>.tlvll';l"l'Idl"B'. ~il---II<I~~~
rl!il'l"liI 'n b.ess!ll f8r lIi~1111 9 .r nl IlllI ," earA'RI' all' ~ la';'. I; a" ..' '. ;;-A'l'''", -"ll.lrell agJ~s-I--by--lY'~e \ 'IU'" iA I~. .w.IOeto6-of loef;&ee
; :"'iO~lal'eI8''i. "i ;.a;... ",;,,",Pr'''l'I's" an "8',";",ef', .
(c) No Representation of Adequate Coverage lessor m.kes no representalion Ihallhe ItmtlS or forms of coverage of insulance
specified herein are adequale 10 cover Lessee's property. business operalionl or obligations under Ihis Lease
a 5 Insurance POliclel. Insur.nce required herein shall be by companies duly licensed or admil1ed-lo IransaC1 busineSl in the slale
where Ihe Premises are localed, and maintainIng during Ihe policy lerm a MGeneral Policyholders Rating" of 31 leasl 8+, V. as sel lorth in Ihe mosl
currenl issue or M8es!'s Insurance GuideM, or such other r,'ing as may be required by a Lender lessee shall nol do or permit 10 be done anylhing
which invalidates Ihe required.insurance policies Lessee shall, prior 10 the Start Oate, deliver 10 Lessor cel'1illed copies of poWcies of such insurance or
certificales evidencing Ihe exislence and amounls of the required lI\surance No sucn policy shall be cancelable or subject 10 modification excepl afler
30 days prior written notice to Lessor 1.essee sha", at Ieasl 30 days prior 10 Ih, expiralion of such policies, furniSh LetlOf wilh evidence 01 renewals or
Minsurance binders" evidencing renewal Ihereof, or lessor may order such il'lsurance and chatge Ihe cosl thereoJ 10 Lessee, whlCtt amounl shan be
payable by Lessee to Lessor upon demand Such pohcies shall be for a lerm of .lleasl one year. or the lenglh ollhe rem.ining lerm of Ihis Lease,
whichever is less If either Party shall fail to procure and mainlain Ihe insurance required 10 be camed by'!. lhe other Party may, bul shall nOl be
required 10, procure and mainlain the same
a 6 Waiver of SubrogaUon, Wdhout an,cling .ny olher rightl or remedies. Lessee and Lessor each hereby rele... and rebeve Ihe
olh.... and waive Ih.ir entire righl 10 reCOV4lr damages against the other, lor 1011 of or damage 10 lIs propel1y 'flsing oul of or incidenl 10 Ih' peflll
requlr.d 10 be inlured ag.inll herein Tn. .ffecl of .uch rele.... and ...,.ivers " nollirnilecl by Ihe amounl of insur.nce carried or required, or by any
deducllblls .ppllcable l'Ier,'O The ".rtl.s agree 10 h.ve Ih.ir '"!McII''' pro!Ml'ty damaoe insur.nce camers waive any r"'hlto subrogation Ihal SuCh
companies may have againsl Lessor or Le".., althe UI' m.y be. so long as lhe insurance is nOI Invahdaled thereby
a 7 Indemnity Except for Lenor'. .... neglig.nce or willful misconduct, Lessee shall indemnify, protect, defend and hold harmlen
Ihe Premises, lessor and its .genls, Lessor's master or ground lessor, partners and lendels, from and against any and all claims, loss of renls andlor
_ages, liens, judgmenls, pena.llieS' a.llorn,yS' and co",.ullants' fees, expenses an.dlor liab. ,lilies arising out of. involvIng. or in connection wilh,lhe use
lor occupancy ollhe Premises by Lessee If any aclion or proceeding IS brought .g.inst Lessor by reason Of any of the foregoing mailers. Lessee
II upon nohce defend Ihe same at Lessee', exptlnle by counsel reasonably satisfaclol'f 10 U~ssor and Lessor shall cooperale with Lessee In such
fense lessor need nol have flrsl paid any such clam In order to be defended or Indemmfled
PAGE 5 OF 13
INITIALS
INITIALS
Cl2001 "AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG-8.7/0'E
88 Exemption of lessor from liability Lessor shall not be liable 101 injury or damage 10 Ihe person or goodS. wares,"merChandlse
. 01 other property of Lessee, Lessee', employees, conlr.'ctolS. invdees. customers. or any other pellOIl In or about It'le Premises, whether suetl dlm.g.
Of injury II caused by or results from fire, ste.m, electrICity. lJlS, wlter or 'a,n, or from the break,ge. leakage, obstruction or 01"" defecls 01 pipeS. tire
spriOklers. WIres, apphanees, plumbing, HVAC or ligl'lling fixtures, or If om any olner cause. whether the said inlury 01 damage results 'rom conditions
.flsing upon Ihe Premlsss or upon other por1ions ollhe building of which the Premises illfe . part, or Irom other Sources or places Lessor stt.U not be
_or any dam_gel anS.ing fro~ any ae. lor neglect of .ny other lenant of Lessor n~r from Ihe lallure of Lesso,. 10 enforce the prOVllJOA5 01 iny other
Ihe ProJecl Notwlthstandtng Lessor's negligence or bleach of thiS Lease, Lessor shal! under no Circumstances be liable 101 IftJUry 10 Lessee's
s Of for any loss of Income or profillhelefrom .
89 ',IIlIlfl III PN"hr, IA.wFaAll, b..n.. .~Il"lv ~,vln I"-il '''l: 'i" ,t "1 p1l1 III crllla . II ""aiAI,iA ''''' 'Alurt-ll'- ,...U .teI
'lIIRI'A in IIIIInl b.unr III FilII a"';1 ,.IIAli.lt, if IT 1.....8rll iAllllr ''''II At! UFll....,II..l.W~, I~S' use, Ille-en:t.IlII.f 't;~"IiJe~'"
If'" "lInCi.11'1Il ~u.n"RIIy1'lr IR, "'Ii'll'" IIr rurl.llrtt.rnfl....l I............ Alt ma'fl1Ii1-"1I~. I~ 'Ilgl"li ra";e aN" inl All ,~. ;..~
101 _It>. ...~lIrd ~. ;1. I 8 CiI~-~ntn. 'WlrC'rlt". .~ilt.-.. flf ''', III . III w. ur.-n. U" iI.1t oe-' T"r" be-.a I.-r";t't", i.. t-l1" ~"Y
r" "tm~111 fllr '1111";.1;1:..11.., v, ;r- .~8u-la~lItl1, 1011( 01111.1....-' '11' i in. p,-,," '"Oil. .. lI'"e 1 I g n~r t"'t, 1'.. .9r....~
tA'~~I.' I~ 'an ~a;l.rtll a"-'I~": ,. ..n.r~'g': 11 !111111T1I- .... ,.., ,;111'..rl (,I I 1II11S I"e" lUll 11_; 'g, run l'I:.II.II,'I'a" -.4e
""11'I'1"l ','1111:11" "IIUiII""" ; "lllUltFl i1111 '''lI.I'IiII11 1laAI511Rl11ltae a'erfl"euee'sge'a'llr"Ulll- o(!..~...
'lil\JTI'1 "'a FlII'." ;.. I'IIJ'.-n, II! I 11"'11 Ir IT;.I Il' a~1 f1'lh. I1I11r rgAlS ilR;1 r!Te~ n gral"III~! eJl\Qe' ~ B'1I, 1 tll.. 1"1t 0""j,1'7R M
'lRaRtilRl"B , IFlU llilllflslllR l"li lell'e
Camage or Cestruction.
9 1 Cefinltion.. :
(a) "Preml.e. Partial Dlmeoe" shall milan damage Of destluction 10 Ihe improvements. on lhe Premises,-.Olher Ihan less..
Owfled Alleralions and Ulilily Inslallalions, whiCh can reasonably be repaired in 6 months or less from lhe date 01 the damage or deslructron L-essor
shall notify lessee in Wfihng within 30 days from lhe date of Ihe damage or deslruction as to whelher or not the damage is Partial or Total
(b) "Premise. Totel Destruction" shall mun damage or deslruction to the Premises. other than Les... Owned Alleralions and
Utility Inslallations and Trade Fill1ures, which cannot reasonably be repaired in 6 months or less from the dale 01 the damage or destruction Lessor
Shan nohry Lessee In writmg WIthin 30 days from the dale of the damage or deslruction as Ie whelher 01 MIlhe damage is PaRial or TOI.I
(c) "Insured Loss" shall mean damage or destruction to improvements on the Premises. olher lhan LesMe Owned AlI.rahens and
UliIity Inslallalions and Trade Fixtures, which was ceused by an evenl requiled to be covered by Ihe ,nsurance described in Paragraph 83(a"
irrespective of any deductible amounts or coverage limits involved
(d) "Replacement Cost" shall mean lhe cost to repair or rebuild the improvements owned by Lessor ilt lhe lime 01 the occurrence
to their condition eXIsting immediately prior therelo, including demolition. debriS removal and upgradong le(lUlfed by the operation 01 Applicable
Requlremenls. and WIthout deduction lor depreCiation
tel "Hazardous Substance Condition" shall mean the occurrence or discovery of a condit'on involving lhe prespnce 01. or a
contamination by. a Hazardous Substance 81 defined In Pillagraph 62(a), in, on. or under the Premises whIch requires repair. lemedlalion. or
restoration
92 Partial Damage. In.ured Los. If a Premises Partial Damage thai is an Insured Loss occurs. Ihen Lessor shall. at Lessor's
expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Allelations and U\lhty InSlallallOns) as soon as reasonably poSSible
and this lease shall continue in full force and effect; provided, however. that Lessee shall, It Lessor's elechon. make the lepair 01 any damage or
destruction Ihe tOlal cost to repair of whiCh is $10.000 of'len, and. in such evei'll, l.essol shall make any applicable insurance proceeds f1vailab'e to
Lessee on a reasonable basis lor thoU purpose NOIwith,tanding the fOl'egoing, ilthe required insurance was nolln force or lhe insurance proceeds are
not sufficient to effect such repair. Ihe Insuring Party shall promptly contribule the shortage in proceeds (except as. to the deductible which is Lessee's
lesponsibility) as and when required to complete said repairs In the event, however. such shortage was due 10 the lacllhal, by reason of Ihe unique
nature ollhe improvements. lull replacemenl costlnsurance coverage was not commerciatly reasonable and available. Lessor shall have no obligatlen
10 pay for the shortage in insurance proceeds or to fully reslore the unique aspects of the PremIses unless Lessee provides Lessor with Ihe funds 110
cover same, or adequate assurance thereof, within 10 days follOWing leeeipl of wlitten notice of such shortage and U!Quest lhefefor If Lessor receives
said tunds or adequale aSS\Jfanee thereof within said 10 day peliod. the Pillrty responsible lor making the repa,rs shall complete Ihem as soon as
reasonably possible and Ihis Lease shall remain in lutl fOl'ce and elfecl If SUCh funds or assurance are not reee....ed. Lessor may nevertheless elect by
Wfillen nOlice to Lessee within 10 daystherealter to; (i) make such restoration and repair as IS commercially reasonable with Lessol paying any
ege in proceeds. in which case Ihis Lease Shall remain In full IGI'ce and effect, or (ii) have this Lease lerminale 30 days thereafter LessPoe shall
entitled to reimbursement 01 any funds .'on.tribuled by l. ellee to repall any such damage or deslruchon Premises P,l1i.1 Damage due '0 Ilood
rthquake shall be sub~Ct 10 Paragraph 93, nolwithstandlng Ihatlhere may be some insural'lce coverage, bul lhe nel ploceeds of any such
Inlurance shall be made available lor lhe repalts if made by either Party
93 Partial Damage. Uninsured Loss. If a Premises Partial Camage Ihat is flOt <In Insured LosS occurs. unless caused by a
negligent or willful act of Lessee (in which event Less.. ,hall make the repairs at lessee's expens.e}. Lessor may either: (i) repair such damage as
soon as reasonably possible at Lessor's expense. in which .venllhis Lease shall continulI in full force and effect. or (ii) lerminate thIS Leas.e by givll'lg
wrillen nolice 10 Lessee wilhin 30 days after receipt by Lessor of knowledga of the occurrence 01 such damage. Such termination shall be eflec:INe 60
days following th. date 01 such notice In the event Lessor elects 10 lerminate this Lease, Lessee shall have the right withi,.. 10 days alte"eeeipl ollhe
terminalion notice to give written notice It! Lessor of Lessee's commilmentlo pay fOlthe repair 101 such damage withoul relmbursemenlfrom Lessor
Lessee shall provide Lessor with said funds or satisfacfory assurance thereof within 30 days aller making such commitment I,.. such event 'hiS Lease
shalt continue in lUll force and effect. and Lessor shalt proceed 10 make such repairs as soon as reasonably possible after Ihe required funds are
available If Le$See does no] make the requited commitment, this Lease shatllerminale as ollhe dale specified in lhe lermlnation nohce
94 Total Destruction Notwithstanding any o1her prOViSion hereof. if. Premises Total Destruction occurs. thiS Lease shan lermlnate
60 days following such Destruction If the damage or deslructlon was caused by the gross negligence or willful misconduct of Lenee. Lessor shall
have the light to recover Lessor's damages Irom Lessee. excepl as provided In Paragrapn 8 6
95 Damage Nllar End of Term If al any lime during thll tast 6 monlhS 01 this Lease there is damage for WhIch the coslto repaIr
exceeds one month's Base Rent. whelher or not an Insur.d 1.011. Lessor may ferminale lhis Lease effeclIVe 60 days following Ihe date 01 occurrence 01
such damage by giv'ng a wriUen terminalion notice to Lessee within 30 days after the date of occurrence of such d.mage Nolwllhstanding the
loregoing, if Lessee allhal lime has an exercisable opllon 10 extend this Lease or to purchase the Premises. then Lessee m.y preserve Ihis Lease by.
(a) exercising such option and (b) providing Lessor wilh any shorti1Q8 in insurance proceedli (or adeQuate ass.urance thereof) neede': :.... make the
repairs on or before the earlier 01 ('I the date whiclt is 10 days alter Lessee's receipt of Lessor's written notice purporting te lerminlle this. Lease. or (.i)
Ihe day prior to the date upon which such optIon expires If Lessee duly ellercises such option dunng such period and provides Lessor wilh funds (or
adequate assurance thereof) to cover any ,l'Iol'lage in insurance ploceeds. Lessol shall. at Leuor's commercially reasonable expense. repair such
damage as soon as reasonably possible and this Lease shall conllnue in lulllorce and effect ]f Lessee fails. to exertise such opIiO\'\ and provide suth
funds or assurance during such period. then Ihis Lease shalllerminate on the dale specified In lhe term,nal,on notice and Lessee's option shall be
extinguished
96
9
Abatement of Rent; Lessee's Remedies,
(a) Abatement In lhe event of Premises Partial DaMage or Pr.mises Total Destruct,on or a Hazardous Subslance Condition for
which lessee is not responSible under thiS lene, lhe Rei'll payable by Lessee for the period re(lVlfed 'or the repair. lemediation or restoralion of such
damage shall be abated in proP0l'110ft to the degree 10 which Lessee's use of the Premises is impaired, but nollo exceed lhe proceeds received from
the Rentat Value in$urance An ~ther obfiga,.ons of Lessee hereunder shall be performed by Lessee. and Lessor shalt have no liability for any such
damage, destrucllon, remediation, repair or restoralion except as provided ltereift
(b) Remedies. If Lessor shill be obligaled to repair or re$1ole the Premises and does not commence, in a substantiat and
meaningful way, SUCh lepair or resloration wilhin 10 days efter suCh obligalion sltan accrue. Lessee may. at any lime prior 10 Ihe commencement of
such repair or restoration, give wrillen notice 10 Lessor and 10 any Lenders of which L.ssee has aClual notice. of Lessee's eleclion 10 terminale this
Lease on a date not leIS than 60 days following lhe gIVing of such notice If Lessee gives such notice and such repair or resloration is nol commenced
within 30 day. lflare.fter, thil lease ,hili terminlte IS of the ctlle specifted in said notice If Ihe repair or restoration is commented within such 30
day., thl. L.... ,na" continue 11'1 full rorce aM ,tr.el "Commence" shall ",ean eilher Ihe uneonditionltl .uthoriuliol'l 01 Ihe prepar.lion 01 Ihe
required plans. or the beginning of /he aclual work on the Premises. whiChever lilst OCCUIS
9,7 Termination; I'dvance Payments Upon lermination of tlUs L.ase pUlSuanl to Paragraph 6 2(g) or Palagraph 9. an eqUItable
adjustment shall be made concerning advance Base Renl and any o1l'1er advill'lC8 payments made by Lessee 10 Lessor Lessol shall. in addilion. leturn
_essee so much 01 Lessee's Security Deposit as has not been. or is 1'101 then required to be. used by Lessor
98 Waive Statute.. Lellor and Leuee agree Ihat Ihe terms or this Leasesha" govern the eflect 01 any dilmage 10 or d.Slruchon 01
. remises with respecllo lite lermination 01 this L.... and hereby waivt' the pl'Ovisl....~s 01 any present or luture statute 10 the eXlent Inconsistent
eWlth
PAGE 6 OF 13
INITIALS
Cl2001 - AIR COMMERCIAL REAL ESTATE ASSOCIA liON
iNiTiALS
FORM STG.8.7101E
10. Ptut Property Taus.
101 Definition. As used herein, 11'1. term "R.., ProlMl'ty T...." shall include-any lorm of assessment, r.a'e.tate, geft,ral, special,
ordinary or extraordinary, or renla1levy Or t.. (other than inhenlanu. personal income Of Islate t'.es), improvement bond; andlor heeMe fee imposed
upon or levied Iglitlsl any legal or equitable interest of Lessor in Ihe Premises Of lhe Project. Lessor's righlto other incotn.I....'elrOlYl. ,nd/orunor's
<<S5 of leasing, by any AultlO. rily haVIng Ihe d.ireCI or indir'.etpower to 'I. and wh~re lhefunds ategeneraled W.I,th re..'.....nc.10 '.he- Btttldinq address
re the proceeds so generated .re 10 be applied by the city, county or olher loealtllung authority of a JUrisdiction withln'which Ihe PreMIses are
Real Property Taxes shall also include any tu. fee, levy. .".ssment Of ch.~e, Of any Increase.lneTeln (l) Imposed by re.son of events
ning during Ihe term of, thiS Lease, including but not limIted to. a change in the ownership of the Plem,~es. and (Ii) le"'led or asses-sed on
macrllnety Of equipment pro...ide1:l by Lessor 10 Lessee pursuant 10 Ihis lease
102
(a) Paym.nt of Tu.. Lessor shalf pay the Real Property Tax.. applicable 10 Ihe Premises Ilrg '11_. I'll . If. 1111.1 1.11111 I~all
'.. 11 . ..... I~. aq-llJA1, il aAl, 8, "Ailir 1',,' ",,'f1~ "all" ."lU8'1 11 1111 1',...,'..1 'AlifUU .. Ir t~. "...1'.1 ~r 'IIl/rA' ...-s~ II'.
Qa.l""II'II_ ' 1 P.t, g" '("Tan'A,rll"-) Pa~ I I.f 'A') '\itA ,..., . 1 III' 1I'I.n .a m.st, lI, 1..15118 III lUllr <;I"' 1'1 J'tI st.", att,r .....91
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11:1., ttil's l.un I 11'1 1"'111 IA l't. I 'fI_Rll..... . I ra I 1"1 S~'..S 1"1 . , AIFlI ,a, I I, LIII;' -.~ 1&' lie '~t 'iU rl"ll AI.' "r,pI~ ....,..1. ."ICI
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"C'''a.Qa IlWrlR1t -I, h '-'I'--gl.. ... ,.... -I I.G If I...." ,-1' 1~1" ., ""1- '''l'1 lit ,- I.........,.~'. I R IU~ ~-l1l111 '. II-e
lillr". ml"" 111'11 .'I'8th I 'II. l"'ill.a-l1 Il-IR a-I' i~ "aqll"I,"'IAIIRl'~ .1",,11 lI~ lang' as OJ- illl'lIiiaR.lin ~
(b) ~4MWIII-qpra l"UIt\1 .1., ~~I'I."iR' lA'jl~iRJ II I~I .alll,.f'l. ~ ay a~~ 'Q::I,' TIn. .hall '1'1'1 I.e~
. 1I,."."l' tR,rlfll- t". .-'rel) 11'1"', ;rlllt"l1'l1l1 p",'<:I. ..., .. 1I..IUIl 'D<, ,....'" If .1lIr~~>rJnsla'lah'AI ,'tn" wll'" 11'11 p~
D'\ I....., Ir .11..11111'1 ,~ ..,
103 '_1__ .nnl-' I I' It'. "rl-'III I" .".......r.,.1) rUII..'II 1.1I"1'I"fll""~~t, 'IT'" prljJB~'R~_
IA;rn" fgr all ;'t"1,'a",'II a"lll impr; ''''1-'. 'A,lll.e" ~Itlj", 1"1111 ,arlit "",,,.. Iwa~ ,f8llg'1,"I-l"~l,js e', 1f"lfj:Jl'fl..r, l..n8r~-lhe
......;Ir 8 II~at' 1'" J .'11 ,,., IRe IIIIIIIT'I ,rIlIReell; I ~t> .t~l- i",fl~.1iIA II" roopY lit un-av', a_la9l&.
104 Personal Property T..... Lessee shall pay, prior to delinquency. alll'l<es assessed againSl ancl Ie...ied upon Lessee Owned
Alterations. Utilily Installations, Trade Fill1ures, furnishings, eqUipment and .11 person.l property of Lessee When possible, Lessee shall cause its
Lesse~ Owned Allerllions and Utility Inslllllalions, Trade Fixtures, furnishings, equipment and all other personal property to be assnsed and billelj
separately from ttMt rul property of Lessor If any 01 Lessee's said property shall be .ssessed witn Lessor's real property. Llssee shall pay Lessor the
talles aUribulable to Lessee's properly wilhin 10 days Ifter receipl of a wrlllen 5talement selling forth tne ta~es applicable to Lessee's property
11 Utilities and Sarvices. Lessee shalt pay lor all waler, gas, heat, lighl, power, telepnone. Irasn di~posal and olher utilities and services
supplied 10 the Premises. together with any taxes lhereon If any such t.ervices are not separately melered 01 billed to Lessee. Lessee shall pay a
reasonable proportion, 10 be determined by Lessor, of.lI charges jointly metered or billed There shall be no abatement of renl and Lessor shall nol be
liable in any respect whatsoever fOI the inadequacy, stoppage, interruption or dIscontinuance of any ut,lIly Of service due 10 fiol, strike. labor dispute,
breakdown, accident. repair or olher cause beyond Leuor's reasonable control or in cooperation willl governmenlallequest or direchons
12 Assignment and Subletting.
121 Lessor's Consent Required.
tal Lessee Shall not voluntarily or by operation or law assign, !rlnsler, mortgage or encumber (collech...ely, "assign or
asslgnmenf') or sublet alt or .ny part of Lessee's interest in Ihis Lease or in the Premises wrthout Lessor's prior wnllen consent
(b) Unless Lessee is . corporation and i1s slock IS publicly Iraded on a nalional slock elfcnange. a chlnge in the conlrol of Lessee
~II con_ slilute In assignmen. t requiring consenl. The tra. nsfer, on I. cumulative bas. is, 0125% or more of Ihe VOlong. conlrol of Lessee snail COnSlil.".'. ,
ge In conlrol for lhls purpose ...
(c) The Involvement of Lessee or ItS assets In any Iransachon. or series 01 transactions (by w.y of merger, sale. acquisition,
cing, Iransler, le...eraged buy-out or otherwIse). whelher or nol a formal ,ssIQnmenl or hypotnecatlon 01 Ih.s Le..e Of Lesse.'s assets occurs,
which results or will resull in a reduction of lhe Net Worth of Lessee by an amount greater th.n 25% 01 sucn Nel wonh a. II WI' rlpre.ented at the
lime of lhe el<eculion of this Lease or It Ihe lime of the mosl recent asSignment 10 wtlich Lessor has consenled, or II it exi.t. immedialely prior to said
Iransaction or lransactions constiluting SUCh reductiOn, whichever was or IS grealer, shall be conSidered an assignment of IhlS Leise to which Lessor
may withhold its consent ~Net Worth of lessee" shall mean Ihe net worth of Lessee (excluding any guarantors) eSlablished under generally accepted
accounting principles . I
(d) An aSSIgnment or subletting withoul consent sharr, at Lessor's option, be a Default curable aller notice per Paragraph 13 l(c), or
a noncurable Breacn wilhout tne necessity of any notICe and grace period II Lessor elects to treal such unapproved asslljJnmenl or subletting... a
noncurable Breach, Lessor may either: (i)lerminate this Lease, or (ii) upon 30 days writlen notice, increase Ihe monlhly Base Rent to 110"4 of the Base
Rent Ihen in effect Further. in the e....nt 01 such Bre.ch and renlll adjustMenl, (i) the purchase price of any oplion to purchase lhe Premises ~Id by
Lessee shall be subject 10 similar adju.tmenl 10 110% of the price previously in effecl. and (ii) alllil<ed and non-ril<ed renlal adjustmenlt. scheduled
during the remainder of the Lease term .hall be increased 10 110% of the scheduled adjusled rent
(e) Lessee's reme1:ly for any breach of Paragraph 12 1 by Lenor st'lllll be limited 10 compenulory damages and/or injunclive relief
122 Tarms and Conditions Applic.ble to A..ignment .nd Sublanlng
la) Regardless10f Lessor's consent. no assignment or sublelting shall (I) be eflectivewitnoulthe elfpress written assumption by
.uch assignee or sublessee ollhe obligations of lelsee under this Lease, (iil release Lessee of any obllgat,ons hereunder; or (ill) alter lhe prlmalY
Ii.bility of lessee for the payment of Renl or for Ihe performance of Iny otner obligation. 10 be peTformed by Lessee
(b) Lessor may .ccepl Rent or perform.nee of Lessee's obligation. from any person olher lhan lessu pending apOro...al or
disapproval of an assignmenl NeIther I delay in Ihe .pprO....l or disapproval of such assignment nor the acceplance of Rent or performance shall
conslitute a waiver or estoppel 01 Lessor's right 10 elfercise its remedies lor Lessee's Delault or Breacn
(c) Lessor's cOnsent to any assignmenl or subletling shatl not conslitute a consent to any subsequenl assignment or subletting
(d) In lhe evenl of any Default or Bte.ch by lessee, Lest.or may proceed direclly againsl Lessee, any Guarantors or anyone else
responsible for lhe performlnce 01 Lessee's obligations under Ihis Lease, inc:tuding any assignee or sublessee, without first e.-n'usling Lluor's
remedies against any other person or enlily re.ponsible Iherefor 10 Lessor, or any security held by Lessor .
(e) Each reQuesl lor consent 10 an assignmenl or .ubletting sha" be in writing. accompanied by information relevanlto lessor's
determination as to the financial and operalional responsibility .nd approprialeness 01 the proposed assignee or sublessee, includIng but nolliml\ed to
Ihe intended use and/or required modification of lhe Premises, if any, together with a fee of $500 as cons'derahon for Lessor's considering and
processing said request Lessee agrees to provide Lessor with such olher or addilional informallon and/or documenlation IS may be reasonably
requested, (See atso Paragraph 36)
(f) Any assignee of. or sublessee under. this Lease shall, by reason of Iccepting such assignmenl or entering inlo such sublease,
be deemed to have assumed and agreed to conlorm and comply with each and e....ty lerM, covenan!, condllion and obligation herein 10 be observed or
performed by Lessee during lhe lerm of said assignment or .ublease, other than such obligations as are contrary 10 or inconsistent with prO....slOns of
art assignmenl or sublease to W~iCh Lellor has specifically cQtt.ented 10 in writing
(g) Lessor's' consent 10 any assignmenl or .ubtet\lng shall not Iransfer 10 the aSSignee or sublessee any Option granled 10 the
original Lessee by IhiS le..e unless such Ir.nsfer i. SpaCiflCAl1y consenled 10 by Lessor in writing (See Paragraph 392)
123 Additional Tarm. and Condition. Appllcabla to Subletting. Tha following terms and conditions lhaH apply to any .ubllllling by
le.... of .11 or any p.n of thl P.remlse. and Ihall be d.emed includad in all sublets.s undlr Ihil Lease whelher or not exprlSSIy incorporated therein:
(a) Lessee hereby aSSigns and Ir.nsfers to Lessor all of Le.see'. interest .n III Rent payable on any sublease, and Lessor may
collect such Rent and apply same low.rd Lessee's obliglllions under this LelSe~ provided, however, thai until a Breae/'l shall occur in Ihe performance
of Lessee's obligalion., Lessee may collect said Rent In the evenllhatlh. amounl collected by Lessor el<ceeds Lessee's obligations any such elf cess
all be refunded to Lessee Lessor .hall not, by rea.on of the foregoing or any assignmenl of such sublease, nor by rea.on of t~ collection of Renl,
ed liable 10 the sublessee for any failure of Lessee 10 perform and comply with any of Lessee's obligations 10 SUCh .ublessel Lessle hereby
ocably authorizes and directs any such sublessee, upon receipt of a wrillen notice from Lessor stating that a Breach elli"s in Ihe performance of
Slee's obligations under this Lease, 10 pay to Lessor alt Rent due and 10 become due under lhe sublease Sublessee shall rely upon any such notice
PAGE 7 OF 13
INITIAL.S
Cl2001 - AIR COMMERCIAL REAL ESTATE ASSOCIATION
INlTIAL$
FORM STG.8-7/01E
from Lessor and Shalt pay all Rents 10 Lessor without any ObligaliGtl or right 10 i1"lquire IS to whether such Breach eXlsls, notwithstanding "any cl.am Iron'!
Lessee 10 the contrary .
(b) In the event of a Br..ch by Lel..e, Lessor may, .II its option, requite sublessee 10 altorn 10 Lessor, in which event lel'Of shall
undertake Ihe obligations of lhe sublessor under such suble... from the lime of the ellefl;ise of said cphon to lhe eKelt'tlon of such sublets!; provided.
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee 10 such sublessor 01 lor any prior Defaulls or
_ehes 01 such sublessor . .' .
. (c) Any matter requiring the conse.nl of Ihe subleuor under a sublease sn,1I ail:r.o reQ\Jlfe lhe consent o{lessor
. (d) No sublessee shall ful1her ass.g" Of sublet all or any part of the Premise!!. without Les$or'S pnor wri"en con.ent .
(,e\.lessor shall deliver a copy 01 any notICe 01 Default or Breach by Leslee to the sublessee, who shalll:lave the right to cure lhe
Oelaull of Leuee wlth,n the 9ra~ penod. it any. specifiea in such nOllCe Tne .ublessee shall have a nght of reimbursement and offset from and
against Lessee for any such Defaults cured by the sublessee
13. Default; Breach; Remedin
13_1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply wilh or perform any of Ihe terml. covena;'ls,
conditionl or Rules and Regulations under this Leale A "Br.ach" is defined as lhe occurrence .01 one or more 01 the following Delaults; and lhe
ladure of Lessee to cure such Default Wllhln any applicable grace pefiod'
(a) The abandonment of the Premises; or lhe ...acatlng of lhe Premises Wllhout providing a commercially reasonable level of
security. or where Ihe coverage or the property insurance described in Paragraph 8 3 is jeopardized as a result thereof, or will'lOul prOViding reasonable
assurances 10 mrf'llmlZe potenlial vand,l,sm
(b) The lailure of Lessee 10 make any p,ymenl 01 Renl or any Securily Depos,1 reQuired to be made by Lessee hereunder, whelher
to lessor or tt) a Ihird party, when due. 10 provide talsenable evidence of Insurance or lurely bond. or!o fulrill any obligation under Ihis Lease which
endangers or Ihreatenllife or property. where such failure continue. for a period of 3 business days fol10w!ng wrrllen no1ice 10 L..ssee
(c) The failure by Le.lee 10 provide (i) r.alonable wri".n evid.nc. of comphance Wllh Appllcabl. Requitemelltl, Iii) the serviee
contracts, (iii) Ihe rescisSion of an unauthorized assignmenl Of lublethn;. (iv) an Elloppet Cetlificate. (v) OJ requesled .Ubordinalion, (vi) evidence
concerning any guaranly andfor Guarantor, (vii) any document reQuested under Pallgraph 42, (viii) material safety data sheels (MSoS), or fix) any
other documenlation or inlormalion which Lessor may reasonably require of Lessee under the terms or IhlS L1ias\!:. where any such failure continues fOI
a peood of 10 day. 10llowing wrillen notice 10 Lesl..
(d) A Default by Lessee as 10 Ihe lerms, covenanlS, condilions or provisions of this Lease. 0/ of the rules adopled und.r Paragraph
40 hereof, other Ihan Ihose described in subparagraphs 131(a). (b) or (C), above. where such Default continues for a period 0130 days afler written
notIce; prOVIded, hOwever. that" the nalure of Lessee's Defaun IS suCh Ihal more Ihan 30 days ;I!e reasonably required for ils cure, then iI.hall not be
deemed 10 be a Breach if Lessee commences such cure wittl1n said 30 day perIOd and Ihereafter diligently pro"cules such cure 10 compleliOt'l
(e) The occurrence of any ollhe following evenlS: (i) the making 01 any genefal aflangemenl or assignmenllor the benelil of
credilors; (ii) becoming a "debtor" ilS defined in 11 US C ~101 or any successor slalule thereto (unless. In the case 01 a pelition ftled-against LelSee,
the same is dIsmissed wilhin 50 days); (iii)lhe appointment of a Irustee or receiver 10 take posseSsion of subslanllally all of Lesse.'s ilssefs located at
Ihe Premises. or of Lessee's inlerest in Ihis lease, where polsession is no1 reslored 10 Lessee wilhln 30 days: or {iv} Ihe allachmenl. execution or olh.r
judicial seizure of subslanlially all 01 Lessee's assels localed at the Premises or 01 Lessee's inlerest In thiS leas.e, where such .eizure is nol discharged
Nilhin 30 days; provided, however, in Ihe event thaI .ny provision of Ihis subparagraph te) IS conlrary to any applicable law, sUCh proviSIOn shall be of
no lorce or effecl. and not alleclthe valichly of the remaining provisions
(f) The discove'Y th.1 any financiat statemenl 01 lessee or of any GuarantOI given 10 Lessor was materially false
(g) If Ihe performance of Lessee's obligations underlhiS Lease is guaranteed: (i) the dealh of a Guarantor, (ii)lhe termination 01 a
Guarantor's liability wilh respect to this Lease other Ihan in accordance with Ihe terms of such guaranty, (Iii) a Guar.nlor's becoming insolvent or lhe
subject of a bankruptcy filing. (iv) a iGuarantor's re'usal to honor the guaranly. or (v) a GuaranlOr's breaCh of its guaranty obligalion on an .nlicipalo'Y
basis. and Lessee'slailure, wiln.n 50 days lollowing wriUen notice of any such event. 10 provide written allernalive assurance or secullly, whiCh, when
:oupted wilh the then exisling resources of Lessee, equals or exceeels the combined financial resources of Lessee and Ihe Guaranlors Ihal exl.ted al
Ihe lime of execution 01 this Lease
132 Rem.din If Lessee fails to perform any of i\$ affirmative dulies or obligations, within 10 days after written no1iee (or in ease of an
tr'tlergency, wilhout notice), L.essor may. at ils oplion. perform such duly or obllgaliOn on Lessee's behalf, including bul not limited 10 the oDtaining of
'easonably reQuired bonds, insurance policies, or governmenlalliCenses. permils or approvals Lessee shall pay to Lessor an amount eQuat to 115% 01
_COSIS and expenses incurred by lessor in such performance upon receipt of an invoice therefor In lhe event of a Breach. Lessor may. wilh or
out further notice or demand, and wilhout lirniling Lessor in Ihe exerci.e of any right or remedy Which lessor may have by reason of such Breach:
(a) Terminale Lessee's righllo posseslion of Ihe Premises by any lawful means. In which case Ihls Lease shalllerminale and
_essee shall immedialely surrender possession 10 lessor In sueh evenl Lessor shaU be enfilted to recover from Lessee: (i) Ihe unpaid Renl which had
)een earned .tlhe lime of !ermin.lion. (ii) the worth ,llhe lime of award of Ihe amount by which the unpaid rent which would have been earned after
:erminalion until the lime of award exceeds the amount of such rental loss Ihat the Lessee proves could have been feasonably avoided; (iii) the worth at
he Itme of award ollhe amounl by which the unpaid renl for the balance of the term after the time of awald exceeds the amounl of such rental leu thai
he Lessee proves could be reasonably avoicle<l; and (iv) any other amounl nece...'Y to compensate Lessor for alllhe detriment proximalely causea by
he Lessee's lallure to perform its obllgalions under this Lease or which in lhe ordina'Y course 01 things would be likely 10 resutt therefrom. including bul
101 limited 10 Ihe cosl of recovering possession of Ihe Premises, expenses 01 relelling, inctudlng necessary renovation and an.rahon of Ihe Premises
easonable attorneys' fees, and tl;lal portion of any leasing commission paid by l.essor in connection With lhis Lease applicable to lhe unexpired term of
his Lease The worth at the time of award 01 the amount referred 10 in proviSion (iil) of the immediately precedmg sentence shall be computed by
iiscounting such amount at Ihe discounl rate of the Federal R....IV. Bank of lhe Dlslric1 within which the Premises are locafed at Ihe time of award
)Ius one percent Efforts by Lessor 10 mitigate damages cauled by Lessee's BreaCh of thiS lease shall not wawe Leuer', righl to recover damages
Jnder Paragraph 12 If termination of Ihis Lease is obtainecllhrough the provisional remedy of unlawful delainer. Lessor shall have the right to recover
n such proceeding any unpaid Renl and damages as are recoverable therein, or Lellor may reserve the rrghllo recover all or any part Ihete!'!1 in a
ieparate suit II a nohce and glace: period reQuired under Paragraph 13 1 was nol previously given. a noliee to pay renl or quit, or 10 perform or quil
Jiven to Lessee under the unlawful delainer slalule shall also constitule Ihe nolice required by Paragraph 13' In such case. the applicable grace
)eriOd required by Paragraph 131 and Ihe unlawful delainer Italute !!.hal1 run concurrently, and the failure of leuee 10 cure the Default within the
lreater of Ihe two such grace periods shall constitute both an unlawful detainer and a Breach 01 this I..ease entlJlmg Lellor to the remedies provided for
n Ihis lease andlor by said slalute
(b) Continue Ihe Lease and Lessee's right to possession a~ recover the Rent as it becomes due in which evenl Lessee may
lublet or assign, subject only 10 reasonable Iimitatrons Acls of maintenance, ellorts 10 relel. andlor the apPolnlment of a receIver 10 protect the
_essor's interesls, shall nol conslitute a termination of Ihe Lessee'. righl to possession
(c) Pursue any other remedy now or herealler avallabfe und.r Ihe laws or judicial decisions of the stale wherein the Premises are
ocaled The eXpiration or lermination of this Leale andlor Ihe lerminaliOn of Lessee's righl to possession Shalt not'retieve lessee Irom liability under
lny indemnity provisions of this Lease as to matters occurring or accruing (luring Ihe term hereol or by reason 01 Less..'s occupancy 01 the Premises
133 Inducement Recaplur. Any .greemenl for free or "bated renl or other charges. or fOI lhe giving or paying by Lessor to or lor
.essee of any cash or other bonus, indue.ment or con.ideration ror Lessee's entering into this Lease. all of whIch concessions ere hereinafter lef"ned
o as "Inducement Provision.... shall be deemed condilioned upon Lenee's full and lallhful penorma.nce of all of Il'Ie lerml, covenanls and condilions
)f this Lease Upon Breach of this Lease by L.s.... any such Inducemenl Provision snail automahcally be deemed delelecl from IhlS Lease and Of no
urth.r force or eflect. and any rent other cha"ile. bonu.. indu~m.nt or consideralion therelofore abated. given or paid by Lessor under .uch an
nducement Provision shall be immediately due and payable by lessee to lessor, nolwilhslanding ilny subseQuenl cure of Slid Breach by Lessee The
lcceplance by Lessor of rent or the cure ollh. Breach whiCh initialed the operalion of this paragraph shall nol be deemed a waiver by Lessor of Ihe
lrovlSions of Ihis paragraph unless specifically so slaleel in writing by Lessor allhe lime of such acceptance
. 134 late Charges lessee hereby acknOWledges thai t,le payment by lessee of Rent will cause Lessor to incur costs not
:onlem~ted by lhiS L.al., lhe .xed amounl of vwhieh will be eltlremely difflCun to ..cenain Such costs include, bulare not limited to. proce..ing and
lccounting Ch.rves, and lal. cha"iles which may be imposed upon Lessor by any Lender Accordingly, il any Renl shall no1 be received by Leslor
vifhitl ! days aflar luch amounl shall be du., fhen. without any requir.menl for nollce to Lessee. lessee shall immedialely pay 10 Lessor a one.tlme
ate charge aquallo 10% of each such overdue amount or 1100. whichever is greater The Parties hereby agree thai Such lale charge represenls a lair
Ind reasonable estimate of the costs Lessor will incur by realon of such 'ale p.ymenl Acceptance- of such late cha"ile by Lessor sh,lI in no evenl
:onlfilute a waiver of Lessee's oelaull or Breach with respecl to sueh overdue amounl. nor prevent the exerCise of any ollhe olher righls and remedies
_Iranted .here,uncter. In Ihe_ evenlthal a late charge i. payable ner.eunder, whell'ler o.r not collected, for 3 cons.ecutl.... installm.nlS 01 Base. Renl. Ihen
lwilhltandlng any provisron of this lease 10 the contrary, Base Renl shatl, at Lellor's option. become due and payable Quarterly in advance
135 Int.rest. Any monelary payment due Lessor hereunder, olher Ihan lale charges, n01 received by Lessor, when due as 10
heduled ~aymenls (such as Base Rent) or within 30 days follOWing the date on which it was due for non-scheduled payment. Ihall bear Inleresllrom
PAGE 8 OF 13'
NITIALS
D2001 _ AIR COMMERCIAL REAL ESTATE ASSOCIATION
INITIALS
FORM STG-8-7/01E
lhe dale when Clue, as 10 scheduled payments, or Ihe 31s1 day after iI was due 15 to non.scheduled paymenls The interest ("Interesn 'charged shall
be computed Illhe 'ale of 10% per annum but shall nol exceed lhe maximum rale ."owed by law lllleresl is payable in addition 10 Ihe pOlenli,llale
cl'Mlrge provided for in P.r~'.ph 13"
13.6 Breach by L.ssor.
(a) Notice of Breach. Lessor sl'lall nOI be deemed in breach ollhis Lease unless Lenar fails WIthin. re,sol\lble lime lo_perform
..Iion required 10 be performed by Lessor For purposes of this Paragraph.,' r,,,O"<!b1e lime shan .n no event be less lhen" 30 d..,s after
by lessor, Ind any Lender whOse name and addffls shall have been furnished Lessee in wrlling lor such purpose,.of written nolice sPeCifying
such obligatIOn of Lessor has not been performed, provided, however, Ihal ,f 1he nature of Lessor's Qbhgahon Is. auch that more than 30 days
are reasonably required for its performance, then Lenor shall not be In breach if performanee is commenced withIn such 30 day periOd and Ihireafter
diligently pursued 10 completion I
(b) P.rformance by L..... on Behalf of Lessor In the evem that neither Lessor nor Lender curesuid breach wilnin 30 days
after receipl of said nOliee, or if having eommenc:ed said cure they do nol diligently pursue ilIa complehon, Ihen Lessee may elletto cure uid breach
.t Le...... expenle and offnt flam Rent the actual and rea.onable cost to perform such cure, prOvided however, thai such offsel shaU not exeeed an
amount equal 10 lhe orealer of one month's Base Rent or the Security Deposit. reserving Lessee's right to :!leek reimbursement from Lessor Lessee
shall dOcuMent lhe cast of said cure and supply s.aid documentaliOn to Lessor
14 Condemnation. If Ihe Pfemise, or any portion Iheleof are taken under lhe power 01 eminenT domain or sold under Ihelhleal ollhe exercise
of said power (COIIeClively "CondemnatlonN), Ihls Lease .han terminale as to Ihe part liken as of the date Ihe cendemning authority lakes title or
possession, whichever first occurs :11 more Ihan 10% ollhe Building, or more than 25% ollhal portiOn of Ihe Premises nol occupied by any building. IS
laken by Condemnation, Lessee may, II Less..'s oplion, 10 be exerci.ed in wtlling within 10 day. aher leuor shall have given Le..ee Milten nolice ql
auch laking (or in Ihe absence of such notiee, within 10 days aftef Ihe condemning aulhority .han have laken pouession) lermiNlI..-thil Lease as of the
date Ihe condemning aulhorily lakes such pos.ession If Lessee does nOllerminate Ihis Lease in accordance wllh Il'Ie foregoing, IhiS lease shall
remain in full force and eflecl as to Ihe portion of the Premises remaining. excepllhat the Base Renl shall be reduced in proportion to lhe reduclion In
Ulility of the Premisel caused by such Condemnalion Condemnalion award. andlor payments Ihall be Ihe property of Les.sor, whether .uch award
shan be made as compensalion for diminution in value of Ihe leasehold, Ihe value of lhe part taken, or lor severance damages, provided, however, Ihat
leslee Ihall be entitled to any compensation for Lessee's relocalion expenses, loss of bUSiness goodWIll and/or Trade FlICl.ures, Wllhoul regard 10
whether or nol this Lease is terminated pursuant 10 the provis.ions of this Paragraph All Allerations and Ulillty Inslallalions made 10 the Premises by
Lessee, lor purposes of Condemnation only, shall be considered the property of Ihe Lessee and Lessee Shall beenlllled 10 any and all compensalion
whiCh il payable therefor In Ihe evenl Ihal Ihis Lease is nOI lerminated by reason of Ihe CondemnatIon, Lessor shall repair any _damage 10 Il'Ie
Premises caused by such Condemnation
15. Brokerage Fees.
151 Additional Commission In addition 10 Ihe payments O\Ifed pursuanl to Paragraph 1 g above. and unle.. Lessor and lhe Brokerl
otherwise agfee in writing, Leslor agrees thai <a) if Les.ee exercises any Option, (b) if Lessee acquires any tights 10 the PremiSe. or other premises
owned by Lessor and localed within Ihe same Project. if any, within which Ihe Premises i. located, (c) if Lessee remalna in possession of lhe Premises.
will'ltl'le conSent of Lessor. after Ihe .xpiratiOn of thiS Lease, 01 (dl if all. Renl is increased, whether by agreement or .ralion of an escalallon
clau.. herein, then, Lessor shall pay BrOker. a fee in accordance wilh Ihe schedule of Ihe BrOkers in elfect allhe lime of lhe eXKullon of Ihis lease
15_2 A.aumption of ObllgationSl Any buyer or Iransferee of Lesso(s inlerest in IhiS Lease sMll be deemed 10 have assumed Lesso(s
obligalion hereu/'leler Brokers shall be third party beneficiaries oflhe provisions 01 Paragraphs 1 9, 15, 22 and 31 If Lessor fails 10 pay 10 Brokers any
amountl due as and for brokerage fees pertaining to this Lease when due, then such amounls shall accrue lntelesl In addition, if Lessor failllo pay
any amounls 10 lessee's Broker when due. Lessee'. BrOker may lend written notice to Lessor and Lessee of such failure and if Les.or faits to pay
such amounts within 10 days afler said nolice, Less.. shall pay said monies to ils Broker and ollsel SuCh amounlS ;.gainsl Renl In additiOn, Lessee's
Broker .l'Iall be deemed 10 be a third party benefiCiary of any commission agreement entered inlo by and/or between Lessor and Lessot's Broker for Ihe
limited purpose of collecltng any brokerage fee owed .
153 Repre.entatlon. and Indemnltle. of Broker Relation.hips Lessee and Lessor each represenl and warranllo the other Ihal il
has had no dealings wilh any person, lirm. broker or finder (olher Ihan the Brokers, if any) in connechon with this Lease, and that no one other Ihan said
named Bfokers is entitled 10 any commission or linder's fee in conneclion herewith Lessee and Lessor do each hereby -VI_ 10 indemndy. protect.
_d and hold lhe olher harmless from and against liability lor compensation or charges which may be claimed by any such unnamed broker, finder
r similar party by reason of any dealings or actions of the indemnilying Party, inclUdIng any costs. expenses, attorney.' lees reasonat>1y incurred
eSp8cllhefelo
16 Estoppet Certificat..
(a) Each Party (al "Re.ponding Party") shat! within 10 days after writlen nolice from the olher Party (Ihe "Requesting Party")
execute. acknowledge and deliver to the Requesting Party a Ilalemenl in writin_g in lorm siT'nilar 10 Ihe then most current "Estoppel C.rtiflcate" form
published by the AIR Commercial Real Eslllle ASloeialion, plu. such additional informatiOn, confirmalion and/or slalemenl. as may be reasonably
requested by Ihe Requesting Party ,
(b) If Ihe Responding Party sha" laillo execule or deliver Ihe Esloppal Certificale within such 10 day periOd, the Requesting Party
may execute an Estoppel Certificate stating that (i) Ihe.Lea.e is in full foree and elfecl withoul modificatIon except as may be represenle<! by Ihe
Requesting Party, (ii) lhere are no uncured defaulls. in the Requesting Party's. performance, and (iliJ if Lessor is Ihe ReQUItSling Party, not more than one
month's rent has been paid in advance Prospective purChasers and encumbrancers may rely upon Ihe Requeshng Party's Eltoppel Certirlcate. and Ihe
AelPonding Party shall be eSlopped from denying the Iruth of Ihe facls conlained in said Cenllicale
(c) If lessor desires to finance. reflnanee, or sell the Premises. or any partlhereof, Lessee and all Guarantors shall deliver 10 any
pOlentlallender or purchaser designaled by lessor SuCh financial slatements as may be reasonably required by such lender or purchaaer, including bul
nollimiled to Lessee's financial statemenls lor lhe past 3 years All such linanClal statements shall be received by Lessor ancls.uch lender 01 purchaser
in confidence and shall be used only for Ihe purposes herein leI forth
17 Oeflnition of Le..or. The term "Le..or" al u$ed herein shall mean Ine owner or owners ill lhe time in Clutlllion 01 the lee lille to the
PreMises. or, if this i. a .ublease, of the Less.... inlerell in Ihe pnor lease In Ihe event of a Iransler 01 Les.sofs htle or interest in Ihe Premins or this
Leise, Lessor shall deliver 10 the transferee or a..ignee (in calh or by credit) any unu.ed Security Ceposit held by Lessor Except as provided in
Paragraph 15, upon such Iransler 01 assignment and delivery of the Security Oe!)Osit, as aforesalc. lhe prior Lessor shall be retieved of allliabihly Wllh
respecllo the obligations and/or covenants under Ihis Lease thereafter 10 be performed by Ihe Lessor Sublect to the foregoing, the obligations a/'lcllor
covenal'ltl in Ihi$ Lease 10 be performed by the Lessor shan be binding only upon the Lessor as herelflabove defined
18 Seyerabllity, The invalidily of any provision of IhlS lease, as determined by a court of compelent jurisdiction, shall in no way affect the
validity of any olher provision hereof
19. Days, Unless otherwise specifically indicated to Ihe conlrary, the word ~days~ as used in thIS Lease shall mean and refer 10 calendar d.ys
20 Limitation on Liability The obligalions of Lessor under thil lelse shall nol constitute personal obligltiOns of Le.lor or ill. partners.
members, directors, oflieers or shareholders. and Lessee shall look 10 the Premises, and to no other assels of Lessor, for tha ..lilfacllon of any lilbillty
of Lessor wilh respecl to this Lease, and shall not...k recourse against Lesso(s partners, members, dlreclors, officers or ,hateholders, or any of Iheir
perlor'lal asset' for such sallslaction
21, Time of Essence, Time is of the essence wilh respeello the performance of all obligations 10 be perlormed or observed by lhe Parties under
this Lease,
22 No Prior or Other Agreemenhl; Broker Dlscla''''er. ThiS l.ase contains all agrtlltmenlS belween Ihe Partie. with respect 10 any mailer
mentioned herein, and no other prior or contem!)Oraneous agreement or undef.tanding .han be elfective Lessor and Le.... e,ch repre.ents and
W8rrant. to Ihe BrOkers that it has made, and is relying solely upon, its own il"lYfJlligation as to Ihe nllufe, quality, character and financi,l responsibility
of the other P.rty to Ihil Lease and as to th. use, nMure. Quality a/'lel characler of lhe Premi$es Brokers have no fesponsibility Wllh respecltherelo or
_1'1 respect to any default or breach hereof by ellher Party The liability (includitlg court coslS and anorneys' fees). of any Bloker with respect 10
otiatiOn, euculion, delivery Ot performance by either lessor or Les..e under fhis. lease Of any amendmenl or mQdirlCation hereto shall be limiled 10
mount up 10 Ihe fee received by .uch Broker pursuant to this L.ase; provided. however, thallhe foregomg IImitalion on each aroke(. liability shaH
ot be applicable 10 any gross negligence or wilUul misconduct of .uch BrOker
PAGE 9 OF 13
INITIALS
INITIALS
Cl2001 _ AIR COMMEFtCIAL REAL ESTATE ASSOCIATION
FORM STG.8~7/01E
23 Notice..
23 , No,ice Requirements All notice. required or permitl.ed by IhlS Luse or .pplieable law shall be in writing .nd may be delivered in
perlon (by hand or by courier) or may be lent by regular. celt.lfltd or reglSlered mad Of U 5 Poslal SeMce ~~press Mail, with poSI.ge prep.id, 01 by
facsmile transmISsion, and shall be deemed suffiCiently given If sel'Ved In a manner specified In this Paragraph 23 rhe address.. noted adileenllO a
es signature on this Lease shall be that Party.s addrns for delivery or milling of nolices Either Party may by writlen notice 10 lhe-olher ~cify II
nt address for notice. except thai upon Lessee's taking possession of lhe PrerfUSes, Ihe,Premises shall constltule Lesse.'s address fornoti<<' A
_ of .11 notices 10 Lessor shall be concurrently Iransmltted 10 such par1y or panes at such addfesses as Lessor mlly from lime 10 lime hereafter
des.;nale in writing . .
232 Date of Notice. Any notice sent by regiStered or cer1ified mail. return receipt reQuesled, shali be deemed given on lhe dale ot
delivery .hown on the receipt calif. or if no delivery date is shown. the postm.rk thereon If senl by legular ml,lthe notICe st\a".be deemed. gIVen 48
hours ,fter the same is addressed as required h.rein .nd mailed wilh postage prepaid Notices del,vered by UOIIed Slale. Expres. Mail or overni9ht
courier thai gu.r.ntee next day delivery shall be deemed given 24 hour. .fter d.livery 01 the ume 10 the Postal Sef'Vice or couritr Nolic8llransmllled
by lacsimile transmission or Similar means .hall be deemed delivered upon I.lephone conlirmation of receipt (conllrm.tion reportlrom lax machine is
suffiCient), provided a copy IS al.o delivered via delivery or m.il If notiCe is received on a Salurday. SuMay or leg.1 hOlid.y, il shall be-deemed
received on lhe next business day
24 Walv.rs, No waiver by Lessor of the Delaun or Bre.ch of any lerm, covenant or condition hereof by Lenee. shall be deemed a waiver of
any other term, cov.n.nl or condition hereof, or of any .ubsequent eefauR or Breach by L....e of the same or 01 any olher lerm, covenant or condllion
nereol Lessor'. consenl to. or approval of. any acl sh.1l nOI be deem.d 10 render unn.c....ry ttle oblaining of lessor's consenlto, or approval of. any
sUb'eQuent or similar ac1 by Lessee, or be con.trued n lhe ba.ts of an esloppelto .nforce Ihe proviSion or prOVISIons 01 this lease requiring such
:onsenl The acceplance of Rent by Lessor shall not be a waiver of any Defaull or Bre,ch by Lenee Any payment by Lessee may be accepted by
:"essOt' on .ccount of money. or dam.ges due lessor, notwithslanding .ny qualifying Itatemenls or condlhons made by Lessee in connecliOn
:herewilh. which SUCh stalements andlor conditions shall be of no force or effed whatsoever unle!S specifically agreed 10 in writing by lessor at or
;)efor. Ihe lime of deposit 01 such payment
25 Disclosures Regarding The N.tur. of . Re.t Estat. Agency Reletionship
(al When enlenng inlo a discussion with a reat e.lat. agent regarding a real eslale Iransaction, a lessor or Le..... should
'rom the outset undersland whal Iype 01 agency relation.hip or repr.sent.lion it has with lhe agent or agenls '" Ihe Iransaction Lessor and Lessee
Jcknowledge being adviSed by Ihe Bfotters in Ihll transaclion, as fol1ows
(i) lessor's Aeent A L.ssor's agent under. Ii.ling agreemenl wilh Ihe lessol acls II the .gent tor Ihe Lessor
:mly A Lessor's agenl or subagent h.s the fOllOwing affirm.tive obligation.'. To the le.sor: A fiduciary duly of utmo.t Cll.. int.grity, honesly. and
oy."y in dealings wilh the Lessor. To Ihe Le.... and the lessor: a Diligent .xercise of reasenable skills aM care in perfolTf\ance 01 the agent's
:iuties b A duty of honest and lair dealing and good f.ith c A duly 10 disclose all facls known to the agent matenally affec1ing Ihe value er desirability
,flhe property Ihat are not known 10. or wilhin lhe diligent allention and ob.ervatlon of, Ihe Parties An agent is not obligated 10 reveal to either Par1y
iny confidential informalion oblained from the Olher Party which does nol involve th. affirmalive dulres sel fonh a'oove
(ii) lessee's ADltnl An agent can agree to acI a. agenl for lhe Lessee only In these silualions, Ihe .gent is nol
h. Lesso,'s agenl, even if 'oy agreem.nt the agenl may receive compenutlon lor services rendeled. eilher in full or in part from the L....Of An agent
acling only fOl a lessee has the following aflirmalive obligalion. To the le.se.: A fiduciary duly 01 ulmost care, integrity. honesty. .nd loyally In
:Jeallngs with Ihe lessee To the Lessee and the Lessor: a Diligent exercise of reason.ble skills and care In pe"tlormance 01 the .gent's duties b A
:Juty of honest and fair dealing and good f.ith c A duty to dlsclo.. all facts known 10 the agenl matenally aftecling lhe valu. or de.irabllity of Ihe
,ropeny thai are nol known to, or within the diligenl attention and observation 01, lhe Parties An agent is not o'oligated 10 reveat to either Par1y any
:ontidenti.1 information obtained from the other Party whiCh doe. nOI involve the affirm alive dulies sellorth above
(iii) Aoent Rel)resentinc Belh ll8sser and lHs_ A real estlle lIgent, either acllng direclly or through one or more
luociale licenses. Clln legally be the agent of both lhe leuor and Ihe lessee in a Irans.clion, but only wilh the knOWledge and consenl of bolh ttle
.essor and the Lesse. In a dual agency .ituation. the agenl has lhe following affirm alive obligations 10 bolh lhe Lessor and th. L.essee: . A fiduciary
:luty of utmosl care. inlegrily. honesty and loy.lly in lhe dealings wilh ellher Leuor or Ihe Lessee b Other duties 10 the Lellor and Ihe Lessee as
tied above in subparagraph. (I) or (ii) In r.presenting both Lessor and Le..... the .gent may nol without the express permi.siOn oflhe respective
,diSclose 10 Ihe olher Party thallhe Les.or will.ccept re,nl in an amounlless Ihan thai indicllled in Ihe listing or thai the Les. see is willing lo,pay a
r renl than that offered The above dul... of the ~ent In a real eslale transaction do nol reheve a lessor or Lessee from the responSlbdlly to
ect their own Inleresls Lessor and lessee .hould carefully read .11 agreements to assure thaI 'hey adequately express their underSlanding cflhe
'ansaction. A re.1 eslale agent is a person qua lifted to advise .bout r.at eslat. If Ieg.1 or tax advice IS deSired. consuR a compelent prolessional
{bl Brokers h've no responsibility wilh respect to any def.ult Of breach hereof by eilher Party The liability (including court
:osls and attorneys' fees), of any Brokerwilh respec1 to any breach of duty, error or omission relaling 10 lh,s Lease shall not'ltceeel the lee received by
luch Broker pursuant to this Lease; provided, however, Ihat the foregoing limitation on e.ch Broker's liability shall not be .pplicable to any gross
legligence or willful miseonducl of such Broker.
(cl Lessor and Lessee agree 10 identify 10 Brokers as "Confidenlial" any communication or inform.hon given Brokers Ihat is
:onsidered by such Pany 10 be confidential .
!6 No Right To Holdov.r. Le.se. has no right 10 retain possession of the Premises or any part lhereof beyond the expiration or termination of
his Le"e In the event thalle55.. holds ovtIr, then Ihe Base Rent shall be increased to 150% of the Bue Renl applicable immediately precedtng Ihe
!xpira!ion or termination Nothing contained herein shall be construed as consent by Lessor 10 any hold,ng over by lessee
!7 Cumulatlv. Remedies, No remedy or election hereunder sh~tI be de.med .xclusiye bul shall, wherever ponible. be cumulative with all
llller remedies at law or in equily
!8 Cov.nants .nd Conditions; Construction of AliI....m.nt All provision. 01 this Lease 10 be observed or performed by lessee are both
:ovenanls and conditions In construing this L..ase. all headings and lilies ara for the convenience of Ihe Pan,es only and .hall not be considereet a
lart of Il'Iis Lease. Whenever required by the conlell'l, the singular shall include the, plural and v.ce versa Th,s Lease shall not be construed as if
lrepared by one of the Parties, 'oul rather according to ilS fair meaning as a whole. a5 if both Parties had prepared it
!9 Binding Eff.ct; Cholc. of Law This Lea.e shall be binding upon Ihe Parties, their per!;onal represenlalives, BUcceSSOfS and .ssigns and
I. governed by the laws of the Slale in which the Premises are localed Any litigalion between lhe Pan,es herelo concerning this Lea.. shall be
niliated in the counly in which the Premises are localed"
10 Subordination; Attornm.nt; Non-Disturbanc.
30 , Subordination, This Le.se and any Option granted h.reby shall be subrecl and subordinate to any ground leaH. mor1gage, deed
)f trusl. or olher hypottlecabon or security device (COI"ctively, "S.curity Devlc."), now or h.realter placed upon lhe PremiHs, to any andalt advances
nlde on the security Ihereol. and 10 .11 renew.l., modific.tion.. .nd eld.n.lOn.thereof L.essee agrees lhallhe hold." of any such Security DevICeS
il'l this Lease togeth.r ref.rred 10 as "L.nder") shall have no li.bility or obligalion to perform any of Ihe obligations of L.essor under this Lease Any
_ender may elect 10 h.ve Ihis lea.e and/or any Option granted hereby superior to Ihe hen of ils Secunly Dev,ce by giving written, nollce Ihereollo
.esse., whereupon this Lease atKl such Options Shall be deemed prior to such Secuflly DeVice, nolwllhstandinv Ihe relatl\fe dates 01 lhe
locument.lion or recordation thereof
30 2 Attornm.nt. In the evenllhat L.ssor lran.lers liUe 10 the Premise" or Ihe Premises are acquired by another uPon Ih. foree"'.ur.
Ir I.rminalion of . Security Oevk:e 10 whic!'llh" Lus. " Bubordlnated (i) Le.... shan, subjec1to the non-disturbance PfOVi.1ons of Paragraph 30 3.
IlIorn to It,lch new owner, and upon reQuell, .nter InIO. new It.... conttlttltlg .11 Of lhe t.rm. end provision. of Ihls L...., wlth.Ud! new owner for
l'Ie rtmalnd.r of Ihel.rm hereof. or, al the .leCllOn of .uch new owner, tnl. L.... .helleulomaUc.lly become a n_ L.... betwa.n Less.e and such
lew owner, upon all of the lerms and conditions hereof. lor the r.mainder of the term hereof, and (ii) Lessor shaUthereafter be relieved of .ny fur1her
'bligations hereunder and such new owner shall assume all of L.ssor'. obligalions hereunder, excepllhal SuCh n_ own.r shall not (a) be liable lor
Iny aCI or omission of .ny prior lessor Of with re.pectlo evenl. occl,lrri"'il prior to acqui.ition of ownership; (b) be subj.ct to any offsets or defenses
_Ch L.sse. might have ag.inst arv prior lessor, (c) be bound by ptapaym.nt of more than one monlh's ren!, or (d) be liable 10f the return of any
urity d.posit paid 10 any prior ].ssor
30 3 Non-Disturbance Wilh respect 10 Security Devic:e' entered into by Lenor after the execution of l!'Iis Lease, lessee's
ubOrdinltion ollhis Lease $hall be subjeclto recelving a commercially reasonable non-dislurbance agreemenl (8 "Non.Disturbance Agre.ment")
PAGE to OF 13
INITIALS
NiTiALS
~2001 . AIR. COMMERC]AL REAL ESTATE ASSOCIATION
FORM STG.8.7f01E
rom the Lender which Non.Disturbance A.greement provides Ihat Lessee's possession of Ihe PremIses, and thIs Lease. Including any options 10 extend
. he terM hereof, willnol be di&turbed so lOng as Lessee is not in Breach hereof and allornllO It'le record ownel 01 the PI,tni"I Further, withIn 60
1ays after the execution of this Lease, Lessor shan use ils commercillIy ,..sonable ,"ons 10 Obtain il Non.Dis,luloance "greemenl Irom the holder of
Iny pr.-exi'ling Security Device whIch is secured by the Premises In the event thai Leslol is unable to provide the Non-Dislurb.nce Agreement within
laid 60 days, InCH' Lessee may. at Lessee's opbon. directly ccntad Lender and allempllo negotlille lor the execulion i!nd delivery of. Non-DiSIf.!.rtIance
-~ . - -
30. Self.Executlng The. '. gleements containecl in Ihis paragrlP. h 30 shall be effechve w,thout the execution j)f any further documents,
,however,lhat, upon wrllten requesl from Lessor or a Lender.n connection with a ute, I'nancll"lg or refinanCIng of the Prem.ses, Lessee and
_ sh,lI execute such funher Wfll.ngs .s may be re..onably requlfle<l 10 separalely document ~ny subordinat~n, attornment andlor
"on.OlSturbance Agreement provide<l for herein
31 Attorn.y.' F.... If any Party or Broker bring. an action Of prot.eding Itlvolving lhe Premises whether founded in lolt, cOntract or equily, or
o d.clare rig hiS hereunder, the Prevading Palty la. hereafter defined) in any such proc;eedit'lg, .ction, or appeillthereon: shan be entilled 10 reasonable
IlIorneys' fees Such fees may be awarded in the same sui! or recovered in a s.parate sui!, whether or not such action or proc.-cting is pursued 10
:tecision or judgment The term, "Pr.vailing P.rtyM sh.1I include, without limit.lion, a P.rty or BrOker WhO substantially obtains or defeals lhe rehef
,ought, al the case may be, whetl'ler by compromise, seUlemenl, judgmenl, Of the .b.ncIonment by the other ~arty or Broker of its claim or defense
The 'lIorneys' rees award shall nol be computed in accordance Wllh any coun fee schedule, bul shall be such as 10 lully reimburse a.1I attorneys' lees
easonably incurred In addItion, Lessor shall be enlitled to allomeys' lees, cosls .nd expenses incurred in the preparahon and .eNice 01 notlees of
Jefault and consultations in conneclio'ltherewilh, whether or nola leg.t .clion is subsequenlly commenced in connection with sUl;h Default or resulting
3reach ($200 is a reasonable min.mum per OCl;urrence lor such "NH:eS and consull.tion) TII<: G(l~t'l. ~"I",y Md ~><pe"N' of the City AttoT"ty ",d
nemPe".of hi6 ofh:e i" e"fo'Gi"Iil till!> GO"tr.-ct 011 ",h..' of the C,ty ,hllll III ~...ide'lId H "..ttorl\llY!o flll~'. fo< t"_ r:Il"r~&' ,,< t.h..., P.....4'~
32 Lessor's Access; Showing PNmi&e..; Repairs, Lessor and Lessor's agents shall have Ihe I;ghl 10 enler lhe Premi.... at any time, in the
:ase of an emergency. and othetwise al reasonable times after r.asonable prior notice for the purpose 01 showing the ume to prospect.ve purchasers,
.nders, or tenanls. and making such alleralions, reo-its, improvements or additions to Ihe Premises as Lessor may deem necessary or desirable and
:he erecting, using and mainlaining 01 ulilltieS. seNices, pipes and condUlls through the Premins andlo. other premIses as long as there is no material
Jdverse effecllo Lessee's use of the Premises All such actIVities shalt be without abatement of rei'll or ilab,loty 10 Lessee
33 AUl;tions. Lessee shall 1'101 l;onduct, nor permit to be conducted, any auction upon the ~'emises Wltho,,1 lessor's prior wllllen consent
_essor shall ,not be obligated to exercise any standard of reasonableness in determining whether to pefm,1 an aucl'on
34 Signs. Lessor may place on the Premises ordinary "For Sale" signs al any time and ordinary "Follease" signs during Ihe last 6 monlhs of
:he term hereof Except for ordinary "for sublease" Signs, Lessee shall nol pia" any sign upon the Pr"mise~ Without lessor's prior written consent All
signs must comply with all Applicable Requirements
35 Termin.tion: Merger. Unless speCilic.11y slaled otherwise in writing by Lessor, the volonlary I)' other surren<ler of this Lease by Lessee, the
muluallerminalion or canl;ellalion hereof, or a termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sub....e or lesser
. estale in Ihe Premises: provided, however, that Lessor may elecl 10 conhnue anyone or all eXlslinq subtenanc'es Lessor's failure wilhin 10 days
following any SuCh evenllo elect 10 the conlrary by written nOlice to the holder 01 any such lesser ,"I,,'e~t ~l1ill' constitule Lessor's election 10 have
such event conslilute the termination 01 such inlerest
36 Consents. Except as olherwise provided herein, whetever in this Lease the conse...t 01 a Party 1$ required to an act by or lor the other ~at1y,
such consent shall nol be unreasonably WIthheld or delayed lessor's actulI reasonable costs and eJpenses (includIng tll.Il not limited to .rchitKts',
attorneys', engineers' and other consullants' lees) incurred in the consideration of, or response 10, a rel:1uest by Lessee for .ny Lessor consent,
including but not limited 10 l;onsenls to an assignment, a sublelting or Ihe presence or use of a Hazardous Substance, shalt be paid by Lessee upon
receipl of an invoice and supporting documentation lherefor Lessor's consent 10 any ac!. assIgnment or subletting shall not conslltule an
acknowledgmenl that no Default or Breach by Lessee 01 this Lease exisls, nor sh.n SuCh consent be deemed a witlVer of any thIn Ixisting Default or
Breach, except as may be olhetwise specifiUlly st'led in writing by Lessor at Ihe time of such COMent The failure 10 specify nerein any particular
e. n 10 Lessor's consenl shall not prectude the imposition by Lessor al the time of consent of such further or other concIilions as are Ihen
able with reference 10 the particular matter for which l;onsenl is being given In Ihe event thai eilher Party disagrees with any determinalion
y Ihe other hereunder and reasonably requesls the reasons lor SUCh delermination, Ihe delermlning party Shalllurn'Sh its reasons in writing a!'ld
in reasonable detail WithIn '0 business days lollowlftg such request
37 ~ull"rp"v
11_' iKeGllthJA 1:"1:1, ';::UlIr.."ton, if IA). I"'all aa;1:l8l1laula II a'l-t~ --I", (;- .,.~nt '9lJtl-I', ~ ~'s".lI 1,11:1. AIR t'-"I'a",',1 Peal
'Estate "'";siafe.,,, a-II east' IblSt- <::uarlrtllrlil:1ll' 1>11 I'''' la-' ai"I.h-111 ~an.. ulIIlltt1l-is l..e~
IllIG fl- ~:~8 gU~:f~:'__~; ~;:~~~I~~~~ei;~:~T:~~ ~:,: ::~ ifl:~~~;:_~: ::~:I~rt~e~~~~&~l~=~&,t ~~:'-~ 't~. i~~T' ~:~ ::,:~::
(warIRII', a ntt'" nil, II I ren' faP' I' .t, .,,<4 If ". IRtln , ....f ,. :I 11<l1 m.I;"RJ II" ;.. ~ ''l<.3rnV, \9}--<. 'Ii'll fiAaAlllllllala-!IRII, IG)...aA
itI81lIls'<:."-r"sall,a"{'IIJ "lIeR;; f~alllflt"'att"'liwafaRt,'llliIIR.f!S;t
38 Quiet Possession Subjecl to payment by Lessee of the Rent and perform.nce 01 all of the covenilnlS, conditions and provisions on
Lessee's part to be observed and pertormed under this Lease, lessee shat! have quiet possession and QUle' Mloyment of the Premises during the term
hereof
39 Option.. If Lessee is granted an Option, as delined betow,lhen Ihe following provisions shOll! apply
391 Definition, "dption" shall mean (al the righllO extend the term of or renew 1t'lIs lease o. to extend or renew any lease Ihal
Lessee has on Olher property of lessor: (b) the righl of firsl refunl or (lI"sl offer 10 lease either Ihe ~remlses nr othp.r property 01 Lessor; (cl Ihe righlto
purChase or Ihe righl 01 first refusal 10 purChase the Premises or other propeny of Lessor
392 Options Personal To Original Less... Any Option granted to Lessee in this lease is persOnll1lO the original Lessee, and cannot
be assigned or ellercised by anyone olher Ihan said original \.essee and only while Ihe original Lessee is In lull possession of Ihe Premises and. il
requesled by Lessor, witn lessee certifying that Lessee has no intenlion of Ihereafter asSigning or sub1etllng
39 3 Multipl. Option.. In the event thai Lessee has any multiple Options to extend or .enew thiS l,ease. a lale~ Option unnol be
exercised unless Ihe prior Op1ions have been validly .xercised
39 4 Etlect of Default on Option.,
la) Lessee shall have no righlto exercise an Option. (i) <luring the period commencing wilh lhe giving of any noliCe of Default and
continuing until said Delaull is ~ured, (ii) during Ihe period of time any Rent is unpaid (withoul regard 10 whelher notice thereof is given Lessee), (Iii)
during the time Lessee is in Breach of thiS Lease, or (Iv) in lhe event Ihat Lessee has been given 3 I)r more nol.teS 01 separate Default, whelher or not
the Defauns are cured, during the 12 mol'llh period immediately preceding the exercise of tn. Option
(b) The period of time within whiCh .n Option may be exercised ShaH l'lot be elllended or enl~'ged by reason of Lessee's inabitity to
exercise an Option because of Ihe provisions of Paragraph 39 4(.)
(c) An Option shalllerminale and be of no further force or effect, notwithstanding Lessee's r:Iue and limely exercise of lhe Oplion, if,
after such exercise and prior 10 lne commencement of the extended lerm or completion of the purchase, (I) lessee lalls to pay Renl for a period of 30
days after such Rent becomes due (without .ny necessity of L.ssor 10 give notice lhereof). Of (ri) if Lessee commits a 8reach of tl'lis Lease
. ',~,
40, - Mtif11111. I..IIll1lAII ,I' In. Prim.... .r........... Ir'liIll ,'11 "11- II "1lI1~ t.fl&OI-,4,......~~.. it 'fl' .~-t.... ."IIII11nt.ml to
III rUlal'l'."" III '"Ill '. l,rlrl "'"Ir I....n Tl Malta fraA!' lim. ta ti-. fer ttla m'llIale'"'1W~~~" a-g;a "f uillllfflll'fn, .-tiilvgi"lg Ih.
ur. aRII tii!unl"R'U If I~e iii a III. 11' I' 11.-1 ttl. 'lrlliRI, 'n,-",! I II -'..t. i If s"i;lu, I'" 19 U~M-';" 1m_III"', I Illl'-"~&;
;WISII'"'1W", ;a-I~ltiilv.. ..,11 ill ile.. II II al.-III. 1"11 CIIR."...., 1....... I'I? II ,n Ii' _ay itl fa" IW.e-~~on e_PlP'''' ip;U"I..iA~iQA wiUl
'''t"'' "lal'llrlgJla'ars
_Security Mlasures, t;essee hereby acknowledges fhallhe Rent payable to Lessor heleunder does not Include the cost of guard seNice or
security menures, and lhat Lessor shall ha~ no obligation whalsoever to provide saMe Lessee assumes .11\ lesponslbility lor Ihe protection 01
remises, Lessee, i1s agenls and Invitees .nd their propelty from Ihe acts olthlld partl"
PAGE 11 OF 13
INITIALS
INITIALS
C2001 . AIR COMMERCIAL REAL ESTATE ASSOCIATION
FORM STG.e-7f01E
. 42 Reservations Leuor reserves 10 ilself lhe rigl'll. from lime 10 lime, 10 grant, withoul the consen' or 10lnder 01 Le..ee, such easemenls,
rigl'llS and dedications that Lessor deems necessaty, and to cause 11'18 reeordatiOn 01 parce' maps and reS'flchons, SO long as such easements, rights,
:ledicalions, maps and reslrictions do nol unreasonably interfere With the use of the Premises by Le~see lessee agrees 10 sign any documenlS
reasonably requesled by Lessor to effectuale any such easement flgl'lts. dedication. map or /8strictio"s
a .._-
Performance Under Protest. If at any time a dispute shall arise as to any amounl_or sum 01 money 10 be paid.by one Party 10 ttie other
. .prOVisio"s hereol, lhe Party againsl whom the obligation to pay the money is asserted snail lIave III!! rrgllllO make payment "under protest~
ch payment Shall not be regarded as a voluntary payment and there Shall SUrvIVe the right on the pan 01 !.atd Party to InstItute suI! for recovery of
such sum. II it shall be adjudged that lhere was no legal obligalion on the part 01 ulCl Pliny to pay such sum ." any part Ihereof, said Party shall be
entitled 10 recover such sum or so much 1he,eof as it was not legally required to pay
44 Authority; Multiple Pani.s; Execution.
(a) If either Party hereto is a corpor.hon. trust, limited liability company, partnership. or s,m,lal entity, each individualeKecuting
this Lease on behaK of such entity represents and wlnanb that he or she is dldy authoriz.ed 10 er:ecule and del'ver IhlS LeISe on its bahal! Eac.h party
shall, within 30 dayl after request, deliver to lhe olher party salisfKlory evidence of such authority
(b) If this Lease is eKeeuted by more thin one person or entity al 'Lessee", each SUCh person or entity Ihan be joinlly and
severally liable hereunder It is agreed that anyone of lhe named Lessees shall be empowered 10 execute any amendment 10 thiS Lease, or olher
:locumenl ancillary IherelO and bind .11 of Ihe named Lessees, and LeSlor may tely on the same as tf all Of Ihe named Lesseel had eKeculed SUCh
:locumen!.
(c) This Lease may be executed by Ihe Parties in counterparts, each 01 wh,rh Sn;lll bP. dp.l!med an origin,1lt and alt of wtIich
togelher shall constilule one and Ihe same lttllrumenl
45 Conflict. Any conflict between the printed provisions of this Lease and typewritten or handwnll'!n orovIsions shall be controlled by the
Iypewrillen or handwritten provisions
46 Offer Preparation of IhiS Lease by either Party or their agent and submission of same 10 Ihe olner P;lr1y shall net be deemed an offer 10
lease to th~ other Party This Lease IS not inlended to be binding until eKecuted and delivered by aU Par1,es herelo
47 Amendments ThiS Lease may be modified only in wrlling, signed by Ihe P.lties in In"le.t a1the hmt' of Ihe modification As long as they
do not materiallV change Lessee's obligations hereunder, Lessee agrees 10 make luch r..,enable non.monetary mo/Mcatlons 10 Ihis Lease as Olay be
reasonably required by a Lender in connection with the obtaining 01 normal financing or relinancing of the Prernl~es
48 Wai"., ~. .,,- Tr'a! I TIn:: P"'qTllii r.liAIiIlV \Ii...."'1i :u4&1R RliiPIi~Tluli PICWT~ TO TRIAl. 8" "'oqy It 1 ...tl~JON-OR
PROCIiIii~INt 1~I"Ob.HI~i~ TMIi P'RQPIiPrY QR "RliI~lt OUT Qr T\fli "Ooqiit1i~'T
49 Mediation and Arbitration of Dispute. An Addendum requiring the Medialion and/or lh.. Art"I'~I,I)" I)! all diSputes between lhe Parties
and/or Brokers arising oul of this Lease 0 is 0 Is not attached 10 this Lease
50 Americans with Disabilities Act Since compliance with the Americans wilh Disabililie$ Acl (ADA) '5 dependent upon Lessee's specific use
of the Premises, Lessor makes no wartanly or represenlation as 10 whether or not Ihe Premises comply WIlh ADA or i1ny similar legislation In the
event that Lessee's use ollhe Pre",ises requires modifications or additions to the Premises in order to be In ADA compliance. Lessee agrees 10 make
any such necessary modifIcations and/or additionl al Lessee's expense '
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN. AND
_E EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO THE PARTIES HEREBY AGREE
AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE
T AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE ASSOCIATION OR BY ANY
BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS lEASE OR THE TRANSACTION TO WHICH
IT RELATES. THE PARTIES ARE URGED TO;
1, SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THiS LEASE.
2. RETAIN APPROPRIATE CC!lNSULTANTS TO REViEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID iNVESTIGATION
SHOUL.D INCLUDE BUT NOT BE LIMtTED TO: THE POSSIBL.E PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES,
THE STRUCTURA1.INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABI1.ITY OF THE PREMISES FOR
LESSEE'S INTENDED USE
WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO
BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES IS LOCATED.
The pllrtieS hereto have eKecuted 1tlls Lease at the place and on the dates specified above their respp.cl;ve s'9"~lw~s
Executed al San Bernardino, CA
0,
Execuled at. San Be!-n~_!~':!.l,.12Q, CA
0'
By LESSOR:
Russell Properties Partnership
By LESSEE;
City of San ~~n~~_o~
a Municipal Corro~?ti9n
By
Name Printed:
Title:
Jack B. Russell
Partner
By.
Annette Russell Name Printed:
Partner Tille:
Mayor Pdt r!..~..T.
Morris
By:
N.me Printed: Mark Russell
Tille: Partner
..e.. 370 W. "H" Street
_ton, CA 92324
Nicole Felix
part.ner
&y.Attest:
Name Printed: Rachel Clark
Tille: City Clerk
Address' ~_:.'J?': S.treet
San Bernardino,..~~ .~3j.lO
PAGE 12 OF 13
INITIALS
INITIALS
Cl2001 . AIR COMMERCIAL REAL ESTATE ASSOCIATiON
FORM STG-8-7101E
TelephOtle: (909) 825-5240
Facsimile: (909) 825-5243
FederallD No. .
Telephone (_l
Facslmlle:(_'
FederallD No
A.KER'
~ar Commerc1a1 Real Estate
SROKER:
AU: lUck Lazar
Tille: Broker
AcIcIr.ss: 1901 Oranqe Tree Lane Ste. 250
Redlands. CA 92314
Telephone:(909)? 4 8- 704 0
Facslmile:(9O"9)14 8- 1 0 41
FederallD No
AU:
Tille:
Address:
Telephone:(_l
Facsimile:( )
FederallO;;;ro-
,
,
NOTE: These forml are often modified to meet the changing requirements of law and industry needs. Atways write or call to
mllke sure you are utilizing the most current form: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 So. FlowerStre.t,
Suite 600, Los Angeles, California 90017. (213) 687-8777. Fax No. (213) 687-8616
Cl Copyright 2001 . By AIR Commercial Raal Estate Association All rights reserved.
No part of these woril.s may be ,.porduced in any fonn without permission in writing.
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PAGE 13 OF 13
iiTiArS
12001 . AIR COMMERCIAL REAL ESTATE ASSOCIATION
INITIALS
FORM STG.a-7/01E
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ADDENDUM "A"
TO STANDARD INDUSTRIAUCOMMERCIAl SINGlE,TENANT LEASE. GROSS
DATED November 2. 2006
This Addendu~ 10 the Single-Tenant Lease-Gross rAddendum") is made and enlered into-as of the
second day of November 2006. by and between Russell Properties Partnership ('"Lessor"), & Cily of San
Bernardino. a Municipal Corporation ("Lessee"), with reference to Ihat cerlain Single-Tenant Lease
Gross dated November 2, 2006. by and between Lessor and Lessee ("Lease")
The promises, covenanls, agreements and declarations made and set forth herein are intended to and
shall have the same force and effect as if sel forth at length in the bOdy of the lease To the e){lent that
the provisions of this Addendum are inconsistent with the terms and conditions of lhe l,ease. the..terms.of
thIS Addendum shall prevail and control for all purposes Unless otherwise defmed herein. all terms used
in this Addendum and defined in the Lease shall have the same meaning as is ascribed to such terms in
the Lease
Base Rent:
February 1.2007 through January 31,2006
$6.36400 per month
February 1, 2008 through January 31, 2009
$6,364 00 per month
February 1. 2009 through January 31. 2010
$6,55492 per nlMlh
February 1, 2010 through January 31, 2011
$6,751 57 per "''lnth
February 1, 2011 through January 31, 2012
$6,951 12 per month
Option to Extend:
Lessee is hereby granted the following single option to extend the inihal tease Term rOption to Extend")
for a single period of five (5) years:
(a) There is one Option to Extend, effective only during the initial Term of this Lease, and it is for a
single five (5) year period (the "Extended Term~) commencing immediately after the Expiration Date for
the initial Lease Term This Oplion to Extend may not be exercised while Lessee is in default (beyond
any applicable cure period) or after this lease has expired or been terminated. If Lessee is in default and
cures such default, Lessee ",ay exercise this Option to Extend after such cure, if the time period for
exercising 1his Option to Extend has not yet expired
(b) lessee must exercise this Option to Extend, if at all, by givir'9 written Notice of exercise (the
"Option Exercise Notice~) not more than twelve (12) months and nolless than nine (9) months prior to the
Expiration Oate for the initial lease Term If Lessee expands or reduces its Premises, the Option to
Extend shall cover the entIrety of the Premises as of the Expiration Date immediately prior to the
Extended Term. but not space previously ,surrendered If the Lease Term is hereafter extended by
agreement of the panies and not by exercise of this Option to Extend. this OPhon to Extend shall
nevenheless be of no funher force or effect
(c) Beginning with the first year of the Extended Term, Rent shall increase annually by three percent
(3%) per year over the rent paid in the 5'" year of the initial Lease Term
(d) This Option to Extend is granted by Lessor to the Lessee originally named in this lease and to no
other. and is personal as to such entity and shall nol be exercised or aSSigned. voluntarily or involuntarily,
by or to anyone or any other entity. Any other assignment of this Option to Extend without Lessor's prior
written consent shall be null and void and, at lessor's election, shall constitutp. <'l default under the Lease
Tenant Improvements to Be Completed by lessor at lessor's expense:
(See Exhibit "A" Floorplan of Premises showing demising walls 10 be ren10verl hy Lessor)
1) Remove interior demising office walls (see Exhibit "A.)
2) Install six foot high wrought iron security gate and fencing arollnd !h"l oerimeler of the parking lot.
includin~ ~ remote automatic gate opener
3) Install security bars on ell exterior windows
4) Install standard commercial grade carpet and rubber base in office areas (color to be determined
by Lessee)
5) Touch.up paint throughout the interior walls of the Premises
,
6) Replace ceiling tiles as needed
Les~ee Inilial
l.cs!'~r lnitia\
Date
Date
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ADDENDUM "A"
TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE.TENANT LEASE - GROSS
DATED November 2, 2006
Page 2 of 2
HVAC System
Beginning with the commencement of the Lease, Lessor shall provide lessee with a six (6) month
warranty on the repair andlor replacement of the HVAC system
ADA Compliance'
A Lessor shall comply, at Lessor's expense, with the Americans With Oisab'lilies Act (41 use
12101 et seq) as well as the regulations and accessibility guidehnes promulgated thereunder, as each of
the foregoing is supplemented or amended (collectively, "ACA"), wilh respect 10 the Premises as a result
of any activilies by lessee from and aher the commencement of the Term Including, but not limited to.
Lessee's particular use of the Premises. the performance of any aller...tiono:: improvements, additions or
Utility Installations in or about the Premises by lessee
8. In the event the Premises are not in compliance with ADA. including any compliance required
with respecl10 the existing, or Lessor completed, Tenant lrhprovement~. Leo:;sor shall be responsible for
effectuating said compliance in accordance with the rules, regulations ;;m'i "l,:mr.1ards of the applicable
governmental agencies with juriSdiction over the Premises for such m;:ltl~r~
IN WITNESS WHEREOF, the parties hereto have executed this Adrj~ndlJm RS of the date first written
above
"LESSOR"
BY:
JACK B. RUSSELL, PARTNER
RUSSELL PROPERTIES PARTNERSHIP
Date
BY:
ANNETTE RUSSELL, PARTNER
RUSSELL PROPERTIES PARTNERSHIP
Date
BY: I
MARK RUSSELL. PARTNER
RUSSELL PROPERTIES PARTNERSHIP
Date
BY:
NICOLE FELIX, PARTNER
RUSSELL PROPERTIES PARTNERSHIP
Dale
.'LESSEE'.
BY: Ot'tle
MAyOR PATRICK J. MORRIS
City OF SAN BERNARDINO. A MUNICIPAL CORPORATION
I
ATTEST:
RACHEL CLARK, CITY CLERK
Date
I
APPROVED AS TO FORM
AND LEGAL CONTENT.
:James F. Penman,
:;F~'h
Cate
Date
Lessee Initial
Le~~or Initial
tit
tit
tit
ADDENDUM "B"
TO THE STANDARD INDUSTRlAUCOMMERCIAl
SINGLE-TENANT LEASE - GROSS
DATED NOVEMBER 2, 2006
CALIFORNIA SALEILEASE AMERICANS WITH l:lISABILlTIES ACT.
HAZARDOUS MATERIALS AND TAX DISCLOSURE
The Americans with Disabilities Act is intended to make many business establishments equally accessible
to persons with a variety of disabilities, mOdifications to real propeny may be reqUIred Stale --and local
taws also may mandale changes The real eslate brokers in this transaction are not qualified to advise
you as to what, if any, changes may be required now, or in the future Owners and tenants should
consult their altorneys and qualified design professionals of their chOIce for inrormation regarding these
mallers. Real estate brokers cannot determine which anomeys or design !)fofessionals have the
appropriate expertise in this area.
Various construction materials may contain items that have been, or in the fulureo may be, determined to
be hazardous (toxic) or undesirable and may need to be specifically treated/handled or removed For
example, some transformers and other electrical components contain PCBs, and asbestos has been
used in components such as fire-proofing, heating and cooling syslems. .<lir rl\Jct insulation, spray-on and
tile acoustical materials, linoleum, floor tiles, roofing, dry wall and plaster Due to prior or current uses of
the Property or in the area, the Property may have hazardous or undesirahle metals (including lead.
based paint), mirrerals, chemicals, hydrocarbons, or biological or radioactive items (inCluding electrical
and magnetic fieldS) in soils, water, building components, above or below-ground containers or elsewhere
areas that mayor may not be accessible or noticeable Such items mBY leak or other'Wise be released
Real estate agents have no expertise in the detection or correction of hazardous or undesirable items
Expert inspections are necessary Current or future laws may require cleaT1 up by past. present and/or
future owners and/or operators It is the responsibility of the Seller/Lessor and BuyerfTenant to retain
qualified experts to detect and correct such matters and consult with legal counsel of their choice to
determine what prfvisions, if any, they may include in transaclion docume"t regarding the Property
Sellers/Lessors are required under California Health and Safety Code Section 25915 et seq to disclose
reports and surveys regarding asbestos to certain persons, including their employees, contractors, co.
owners, purChasers and tenants BuyerslTenants have similar disclosure obhgahons Sellers/Lessors
and BuyersfTenants have additional hazardous materials disclosure responsibilities 10 each other under
California Health and Safety Code Section 25359 and other California laws Consult your attorney
regarding this matter, and make proper disclosures lazar Commercia! Real Estate is not qualified 10
assist you in this matter or provide you with other legal or lax advice
Sales, leases and olher transactions can have local, state and federal tax consequences for the
Seller/Lessor and BuyerfTenant In the event of a sale, Internal Revenue Code Section 1445 requires
that all Buyers 'If an interest in a real property located.in the UnileCl States must withhold and pay over 10
the Internal Revenue Service (IRS) an amount equal to ten percent (10%) of the gross sales price Within
ten (10) days of the date of the sale unless the Buyer can adequately establish that the Seller was not a
foreigner, generally by having the Seller sign a Non.Foreign Seller Cer1ificat~ Note that depending upon
the structure of the transaction, the tax withholding liability could exceed the cash proceeds to be paid to
the Seller at closing California poses an additional withholding requirement equal to three and one.ttlird
percent (3 1/3%) of the gross sales price, nol only on foreign sellers but also out-of-state Sellers and
~ I vin e s at if the sale price exceeds $100,000 Generally, withholding is required if the
sales proceeds re disbursed outside of California, if the last known address of lhe Seller Is outside of
California or if a financial intermediary is used Consult your lax and legal <'Idvisor Real estate brokers
are not Clualilied to give legal or tax advice, or to determine whether <'!ny other pl':!rson is propet1y Clualified
to provide legal or tax advice
Less.ee 1nilial
Lesst"r Initial
Date
Date
---_._------~~~----.,- '.,~-
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EXHIBIT "A"
I
Building Floor Plan
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*Floor plan not to scale
Kev
XXJI.(]l: Remove
Existing
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Lessee lnitial_ __Date_
Lessor 'nll'i'll__ _.__Date_