HomeMy WebLinkAbout9/3/2014 - STAFF REPORTS S CLth ern C s
Our Mission
Southern C' s Inc . is a nonprofit Collective
Dedicated to providing lab tested, affordable high quality cannabis.
We aim to educate our patients about their cannabis treatments as an
alternative approach to supplement their medicine.
AW OFFICES OF
MICHAEL E. CINDRICH, APC
• 750 B STREET PHONE: (619) 262-2500
SUITE 3300 FAX: (61 9) 81 9-7342
SAN DIEGO, CALIFORNIA 92101 MIKE@MICHAELCINDRICH.COM
June 12, 2014
To Whom It May Concern:
Enclosed you will find Southern C's application for a Palm Springs Medical Cannabis Permit.
There are a few aspects of this application that 1 would like to bring to your attention.
In the event that Southern C's is granted a Medical Cannabis Permit from the City of Palm
Springs, the collective plans to produce the highest-quality, lab-tested medicine in the State of
California. Although a Medical Cannabis Permit would allow Southern C's to operate a retail
dispensary at their location, Southern C's would prefer not to operate as a brick-and-mortar storefront
dispensary to patients. Southern C's is willing to operate as a storefront or delivery service if the city
prefers, however Southern C's main goal is to focus on the labor and capital intensive aspects
involved in cultivation, and have the medicine distributed to patients at other Palm Springs
dispensaries.
Unlike other proposed Medical Cannabis operations within Palm Springs, Southern C's will
cultivate 100% of their medicine on-site. There will be no off-site or out-of-county cultivation that
would decrease governmental control of such processes. This centralized method of operation would
• permit the City of Palm Springs the highest degree of control and oversight over the medical
cannabis produced and distributed at dispensaries within the city.
William Cooper, founding member of Southern C's, has lived in Palm Springs since 2010.
Unlike others within the industry, Mr. Cooper has abstained from operating in violation of the
municipal code until the establishment of the present Medical Cannabis Permit application process.
It is Mr. Cooper's belief that a high level of cooperation between government bodies and those
operating in the industry will lead to the proper regulation of Cannabis as the tide turns across the
nation and the industry gains increasing legitimacy in the eyes of the law.
Finally, in regards to the subject property of this application, 63-738 Orr Way, Palm Springs,
CA 92262, the executed lease, a copy of which is enclosed, contains a provision for an option to
purchase the property. Mr. Cooper is currently in negotiations to exercise this option and purchase
the building. As ownership and authorization are an understandable concern for the City of Palm
Springs in its regulation of Medical Cannabis permit issuance, this is a fact we felt was necessary to
bring to your attention.
Should you have any questions regarding any of the above information or the application
itself, please do not hesitate to contact my office at 619-262-2500.
Sincerely,
Michael E. Cindrich
- - CITY OF PALM SPRINGS
o�'-v�►�t sA Office of the City Manager
• 1 iZ 3200 East Tahquitz Canyon Way, Palm Springs, CA 92262
Telephone: 760-322-8350 —Fax: 760-323-8207
_,. . '• - - Planning Services - 760-323-8245
. .y,�n, • Public Works& Engineering — 760-323-8253
c�tOWL. r Fire Department — 760-323-8187
Building & Safety — 760-323-8242
Building Inspections —760-323-824
Code Enforcement — 760-778-8434
APPLICATION FOR MEDICAL CANNABIS
COOPERATIVE OR COLLECTIVE.
Please read carefully to ensure application is accurate and complete.
Inaccurate or incomplete applications may be rejected.
The completed application and supplemental information shall be submitted to the Office of the
City Clerk, during regular business hours as posted. The submittal will be taken in at the
Office of the City Clerk, but it will not be considered as "complete" until it is
determined that all filing requirements have been met in accordance with the provisions of
the Medical Cannabis Cooperatives and Collectives ("MCCC") Ordinance (Palm Springs
• Municipal Code Chapter 5.35; Ord. No. 1 845, as amended; and Palm Springs Municipal Code
Chapter 3.35 and Section 93.23.15 (collectively the "Ordinance").
To be considered complete, the application must include any attachments and/or supplemental
information required under the Ordinance or as otherwise required in this Application or as
requested by the City Manager (please refer to checklist contained at the end of this application).
Applications must include a deposit of $ 7,500 towards the cost of the City's review of the
Application. In the event this amount is insufficient to cover the City's costs, the applicant will be
required to post additional funds to cover City's costs.
Review of the application will be conducted by various departments of the City of Palm
Springs, including Planning Services, Finance, Building and Safety, the Palm Springs Police
Department, the Palm Springs Fire Department, the City Attorney's office, and others, as
appropriate. Incomplete applications, including applications with missing or inadequate
information, will be returned to the applicant for completion, held until additional information is
submitted; however, the applicant will have a limited period of time to provide the requisite
information. Failure to provide the information in a timely manner will result in disqualification
and the Application will not be considered.
Applicants are responsible for the accuracy and completeness of all information submitted in
the application. All information submitted with an application is public; however, such
information will not be available for inspection by any person, organization, or agency until the
application review process has been completed and the City Manager's recommendations have
been provided to the City Council.
•
987"I A
• MEDICAL CANNABIS COLLECTIVE OR COOPERATIVE
APPLICATION DEADLINE:
JUNE 167 2014
2:00 PM
Notice is hereby given the City of Palm Springs is accepting
applications to permit one medical cannabis collective or
cooperative in the City.
All applications for the medical cannabis collective or cooperative
must be received AT THE OFFICE OF THE CITY CLERK in City Hall,
3200 E. Tahquitz Canyon Way, Palm Springs, CA, 92262 by 2:00
P.M., LOCAL TIME, June 16, 2014. The receiving time AT THE
OFFICE OF THE CITY CLERK in City Hall will be the governing time
for acceptance of Applications. It is the responsibility of the
• Applicant to see that any proposal sent through the mail, or by any
other delivery method, shall have sufficient time to be received by
this specified date and time.
Telegraphic, telephonic, and electronic mail Applications will not
be accepted. Postmarks will not be accepted in lieu of actual
delivery. Late proposals will not be accepted and shall be returned
unopened.
The Applicant shall submit ONE (1) Original and TEN (10) copies of
the Application and all related materials and attachments.
987441_1
SUBMITTAL REQUIREMENTS:
The following information shall be submitted:
1. A site plan and floor plan of the premises denoting all the use of areas on the
premises, including storage, cultivation areas, exterior lighting, restrooms, and signage.
2. Suitable evidence of proof of lawful presence.
3. All requested information concerning financial and management associations and
interests of other Persons in the business; including the names, mailing addresses, and
Operator's background forms of all of its principal officers, directors, and Operators; a
copy of its articles of incorporation or articles of organization; and evidence of
authorization to do business as a non-profit within the State.
4. An estimate of the size of the group of primary caregivers and/or qualified patients who
will be served by the non-profit MCCC; this description should include whether delivery
service will be provided and the extent of such service.
5. The address of the location at which the MCCC will be operated.
6. Accurate site plan and floor plans for the premises to be permitted denoting all the use of
areas on the premises, including storage, cultivation areas, exterior lighting, restrooms,
signage, and parking; other tenant spaces if the MCCC is proposed for a multi-tenant
• building site.
7. The deed, lease, contract, or other document governing the terms and conditions of
occupancy of the premises permitted or proposed to be permitted.
8. A detailed security plan which includes, at a minimum, the following:
a. Security cameras covering, at a minimum, the storage areas, cultivation areas, all
doors and windows, and any other areas as determined by the City Manager.
(Additional measures may be required.)
b. A reliable commercial alarm system that is operated and monitored by a lawfully
operating security company or alarm business.
9. The name and address of any person who is managing or responsible for the MCCC
activities, and the names and addresses of any employees, if any, and a statement as to
whether such person(s) has or have been convicted of a crime(s), the nature of such
offense(s), and the sentence(s) received for such conviction($).
10. The name and address of the owner and lessor of the real property upon which the
business is to be conducted. In the event the applicant is not the legal owner of the
property, the application must be accompanied with a notarized acknowledgement from
the owner of the property that a collective will be operated on his/her property.
•
987441.1
11. Authorization for the City Manager to seek verification of the information contained within
• the application.
12. A statement in writing by the applicant that he or she certifies under penalty of perjury that
all the information contained in the application is true and correct.
13. Payment of the required deposit for processing the application is required at the time of
submission.
APPLICATION PROCESS
The City Manager shall conduct a background check of any applicant for a regulatory
permit, including any person who is managing or is otherwise responsible for the
activities of the MCCC, and any employee, and shall prepare a report on the acceptability
of the applicant's background and the suitability of the proposed location. Upon
completing the review process, the permit shall be deemed a qualified application subject
to the final certification and approval by the City Council pursuant to the allotment
process, unless the City Manager finds that the applicant:
1. Has made one or more false or misleading statements, or omissions on the application or
during the application process; or
2. The proposed MCCC is not allowed by state or local law, statute, ordinance, or regulation,
including the Municipal Code, at a particular location.
• 3. Is not a Primary Caregiver or Qualified Patient or the legal representative of the MCCC;
4. Or any employee, if any, has been convicted of a felony, or convicted of a misdemeanor
involving moral turpitude, or the illegal use, possession, transportation, distribution or
similar activities related to controlled substances, with the exception of marijuana related
offenses for which the conviction occurred prior to passage of the Compassionate Use
Act. A conviction within the meaning of the Ordinance means a plea or verdict of guilty or
a conviction following a plea of nolo contendere.
5. Or any person who is managing or is otherwise responsible for the activities of the MCCC
has engaged in unlawful, fraudulent, unfair, or deceptive business acts or practices.
6. Or any person who is managing or is otherwise responsible for the activities of the MCCC
has operated a marijuana dispensary, cooperative, or collective in the City without a
permit for a MCCC issued or approved by the City and has refused or failed to comply
with any order or instruction of the City to cease such operation.
7. Has not satisfied each and every requirement of the Ordinance.
Based on the information set forth in the application and the City Manager's report, the
City Manager, or the City Council, may impose reasonable terms and conditions on the
proposed operations in addition to those specified in the Ordinance. A regulatory permit
• issued under the Ordinance is not transferable.
987441.1
ISSUANCE OF REGULATORY PERMIT
The City Manager will accept applications for MCCC during the Application Period.
• Such 60 day time period plus an additional 30 days to complete the reviews and the
preparation of the reports called for in the MCCC shall be considered the "Application
Period."
1. In the event there is more than one application submitted for the unallocated regulatory
permit for a MCCC during the Application Period, the City Manager shall submit the
qualified applications and the City Manager's report on each application to the City
Council for review and consideration. The qualified applications shall be considered
concurrently by the City Council at a public hearing.
2. The City Council shall consider the qualified applications after evaluating the applications
on their respective merits and the City Council may conditionally approve each qualified
application or deny one or more of such applications if the Council determines that the
applicant has failed to pass a background check or has not complied with all of the
requirements of the application process.
3. The City Council will rank all qualified applications in order of those that best satisfy the
requirements of the Ordinance and provide the highest level of service and opportunities
for residents of Palm Springs. The highest ranked qualified application will be granted the
regulatory permit.
REGULATORY REQUIREMENTS
Issuance of a permit shall be subject to the following regulations:
1. The obligations of the MCCC, including all on-going and continuing obligations currently
required or as may be provided in any conditional approval of the City Manager or the City
Council, shall be set forth in a covenant running with the land or the leasehold interest,
approved as to form by the City Attorney, and enforceable by the City.
2. To the fullest extent permitted by law, the City shall not assume any liability whatsoever,
and expressly does not waive sovereign immunity, with respect to medical cannabis, or
for the activities of any MCCC.
3. The Covenant shall also contain the Continuing Obligations and Responsibilities as set
forth in the Standard Conditions section provided below and the following terms:
a. Agree to indemnify the City;
b. Carry insurance in the amounts and of the types that are acceptable to the City
Manager;
C. Name the City as an additional insured.
d. Agree to defend at its sole expense, any action against the City, its agents,
officers, and employees because of the issues of such approval.
•
987441.1
e. Agree to reimburse the City for any court costs and attorney fees that the City
may be required to pay as a result of such action.
• 4. The City may, at its sole discretion, participate at its own expense in the defense of
any such action, but such participation shall not relieve the operator of its obligation
under the MCCC or the Covenant.
STANDARD CONDITIONS
The following conditions shall apply to each and every MCCC permitted by the City.
Failure to comply may result in immediate suspension or revocation of the permit,
subject entirely to the discretion of the City of Palm Springs:
1. No persons shall engage in, conduct, or be permitted to engage in or conduct a
MCCC unless each of the following requirements is continually met:
a. The MCCC shall comply fully with all of the applicable restrictions and mandates
set forth in state law, including without limitation the State Guidelines.
b. The MCCC shall only be open between the hours of 9:00 a.m. and 7:00 p.m.
C. Physician's referrals shall be verified by the MCCC prior to inclusion into the
cooperative and at least every six (6) months thereafter.
d. Each member of the MCCC shall be a patient or a qualified primary caregiver. The
MCCC shall maintain patient records in a secure location within the City of Palm
Springs, available to the City Manager to review upon demand. Such records shall
include without limitation a copy of the physician's referral and, if using a primary
caregiver, a notarized written authorization from the patient to be represented by
such primary caregiver.
e. Cannabis shall be kept in a secured manner during business and non-business
hours.
f. Each MCCC that prepares, dispenses, or in any manner distributes edible
Cannabis-Infused Product must comply with the provisions of all relevant State and
local laws regarding the preparation, distribution, and sale of product.
2. Alcoholic beverages shall not be sold, stored, distributed, or consumed on the premises.
A MCCC shall not hold or maintain a license from the State Department of Alcohol
Beverage Control to sell alcoholic beverages, or operate a business that sells alcoholic
beverages. In addition, alcohol shall not be provided, stored, kept, located, sold,
dispensed, or used on the premises of the collective.
3. A MCCC must pay any applicable sales tax pursuant to federal, state, and local law.
4. On-site smoking, ingestion, or consumption of cannabis or alcohol shall be prohibited on
the premises of the MCCC. The term "premises" includes the actual building, as well as
any accessory structures and parking areas. The building entrance to a collective shall be
clearly and legibly posted with a notice indicating that smoking, ingesting, or consuming
• marijuana on the premises or in the vicinity of the cooperative or collective is prohibited.
987441.1
5. Signage for the MCCC shall be limited to the name of business and its status as a
permitted MCCC only, and no advertising of the goods and/or services shall be permitted.
• 6. Except as provided in an approved Security Plan, windows and/or entrances shall not
be obstructed and must maintain a clear view into the premises during business hours.
7. Security cameras must be in use 24 hours per day, 7 days per week.
8. No one under eighteen (18) years of age shall be a member of a MCCC without written
authorization of a parent or legal guardian.
9. Physician services shall not be provided on the premises. "Physician services" does
not include social services, including counseling, help with housing and meals, hospice
and other care referrals which may be provided on site.
10. The building in which the MCCC is located as well as the operations as conducted
therein shall fully comply with all applicable rules, regulations, and laws including, but
not limited to, zoning and building codes, the City's business license ordinances, the
Revenue and Taxation Code, the Americans with Disabilities Act, and the
Compassionate Use Act.
11. The MCCC shall not distribute, sell, dispense, or administer cannabis to anyone other
than qualified patient members of the cooperative or collective and their primary
caregivers.
12. A MCCC shall distribute only cannabis cultivated on the premises or by a member of the
• MCCC or the member's primary caregiver. The MCCC shall do an inventory on the
first business day of each month and shall record the total quantity of each form of
cannabis on the premises. These records shall be maintained for two (2) years from
the date created.
13. A MCCC shall provide the City Manager with the name, phone number, facsimile
number, and email address of an on-site community relations or staff person or other
representative to whom one can provide notice if there are operating problems
associated with the MCCC. The MCCC shall make every good faith effort to encourage
residents to call this person to try to solve operating problems, if any, before any calls or
complaints are made to the police or planning departments.
14. A MCCC shall not display Medical Cannabis and Cannabis-Infused Product in a manner
in which Medical Cannabis or Cannabis-Infused Product can be seen from outside the
Location. Storage of Medical Cannabis and Cannabis-Infused Product shall otherwise be
maintained in restricted access areas.
15. An MCCC shall not sell any expired Cannabis-Infused Product.
16. Each Permittee shall consent and allow the City Manager to cause medical cannabis and
cannabis-infused product at the Location to be tested and examined.
17. A MCCC shall fully comply with and meet all operating criteria required pursuant to the
Compassionate Use Act, state law, the State General Guidelines, the provisions of the
• Palm Springs Municipal Code, as well as any specific, additional operating procedures
98744L1
• and measures as may be imposed as conditions of approval of the regulatory permit, and
all requirements set forth in the covenant. This is required to ensure that the operation of
the MCCC is consistent with the protection of the health, safety, and welfare of the
community, qualified patients, and primary caregivers, and will not adversely affect
surrounding uses.
ENFORCEMENT
1. Recordings made by the security cameras shall be made available to the City Manager
upon verbal request; no search warrant or subpoena shall be needed to view the recorded
materials.
2. The City Manager shall have the right to enter the MCCC from time to time unannounced
for the purpose of making reasonable inspections to observe and enforce compliance with
the Ordinance and all laws of the City and State of California.
3. Operation of the MCCC in non-compliance with any conditions of approval or standards of
the Ordinance shall constitute a violation of the Municipal Code and shall be enforced.
4. The City Manager may revoke a medical cannabis regulatory permit if any of the
following, singularly or in combination, occur:
a. The City Manager determines that the MCCC has failed to comply with any
provision of the Municipal Code, any condition or approval, or any agreement or
covenant as required pursuant to the Ordinance; or
b. Operations cease for more than 90 calendar days, including during change of
ownership proceedings; or
C. Operatorship is changed without securing a regulatory permit; or
d. The MCCC fails to maintain 240 continuous hours of security recordings; or
e. The MCCC fails to allow inspection of the security recordings, the activity logs, or
of the premise by authorized City officials.
5. Any decision regarding the approval, conditional approval, denial, or revocation of a
regulatory permit may be appealed to the City Council. Said appeal shall be made by a
notice of appeal from the person appealing within thirty (30) days from the date of the
decision. The appeal shall be accompanied by a fee, which shall be established by
resolution of the City Council amended from time to time, and a written, verified
declaration setting forth the basis for the claim that the permit was improperly approved,
denied, conditioned or revoked. Filing of an appeal shall suspend the issuance of all
regulatory permits until action is taken on the appeal.
•
987441.1
Q pALA( SP
CITY OF PALM SPRINGS Office use Only
. " H Office of the City Manager Case No:
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APPLICATION FOR MEDICAL CANNABIS
COOPERATIVE OR COLLECTIVE MCCC
Please read carefully to ensure application is accurate and complete.
Inaccurate or incomplete applications may be rejected.
TO THE APPLICANT:
Your cooperation in completing this application and supplying the information requested will expedite City review
of your application pursuant to local procedures. Applications submitted will not be considered complete until all
submittal requirements are met.
Please submit this completed application and ten (10)copies, including all attachments and related
material to the Office of the City Clerk at 3200 East Tahquitz Canyon Way. Palm Sprinqs,CA 92262
Please complete the following in blue or black ink. If additional space is needed, you may
attach white single-sided 8%x 11 paper using either MS Word or text-readable PDF
format:
1) Address of the MCCC: 63738 Orr Way, Palm Springs, CA 92262
"Please note that site location is prohibited within 500 feet of a school, public playground, park,
residentially zoned property, child or day care facility, youth center or religious institution. It is
also prohibited within 1,000 feet of any other collective. The MCCC location is prohibited on
properties in which the primary use of the property is commercial/retail.
2) MCCC site information:
Gross Square Footage of proposed business space: 4,896
Assessor's Parcel # 666-422-007Zone: M2 Section/Township/Range 15 / 3 14
General Plan built July 25 2000 Hours of Operation gam to 5pm
If the MCCC is in a Multi-Tenant Building, please list other Businesses:
Business Name Business Type
1.
2.
• 3.
9R74a1.1
4.
5.
• 6.
7.
3) The name and contact information of the applicant:
*P/ease note that in the event the applicant is not the legal owner of the property, the application
must be accompanied with a notarized acknowledgement from the owner of the property that a
MCCC will be operated on his/her property.
Name Address Email
Southern C's Inc. 63-738 Orr Way, Palm Springs, CA 92262 williamcooper39@msn.com
Residential # Business # Cell # Facsimile #
(760) 333-7400
If the Applicant is leasing the MCCC, please list the Property Owner's contact information:
• `Please note that in the event the applicant is not the legal owner of the property, the application
must be accompanied with a notarized acknowledgement from the owner of the property that
a MCCC will be operated on his/her property.
4) The name and contact information of the Property Owner:
Property Owner's Name Property Owner's Address Property Owner's Email
RJR Investment Group No.2 383 S. Palm Canyon, Palm Springs, 92262
Residential # Business # Cell # Facsimile #
(760) 329-6913
5) The names and contact information of every person(s) who has a financial interest in
the MCCC:
Name Telephone # Address Email
1. William Cooper (954)612-0860 2417 Tuscany Heights Dr, 92262 william000per39@msn.com
2.
• 3.
4.
987441.1
5.
6.
• 7.
6) The names and contact information of every principal officer, director, and/or operator:
Name Telephone # Address Email
1 William Cooper (954)612-0860 2417 Tuscany Heights Dr, 92262 williamcooper39@msn.com
2.
3.
4.
5.
6.
7.
• 7) The name and contact information of any person who is managing or responsible for
the MCCC activities:
Name Telephone # Address Email
1 William Cooper (954)612-0860 2417 Tuscany Heights Dr, 92262 williamcooper39@msn.com
2.
3.
4.
5.
6.
7.
987441.1
8) The name and contact information of the on-site community relations or staff person or
• other representative to whom one can provide notice if there are operating problems
associated with the MCCC:
Name Telephone# Address Email
1 William Cooper (954) 612-0860 2417 Tuscany Heights Dr, 92262 williamcooper39@msn.con
2.
3.
9) An estimate of the size of the group of primary caregivers and/or qualified patients who
will be served by the MCCC:
# of Primary Caregivers
# of Qualified Patients too-3oo
Will delivery service be provided? OY N
If yes, please describe the extent of the delivery service:
Business is willing to provide delivery if patients require.
•
10) Will cannabis be cultivated on site? Q N
If no, or if less than 100% of the cannabis will be grown on site, please provide the name and
contact information of the person(s) who will be cultivating the cannabis:
Name Telephone# Address Email Member
Y / N
1.
2.
3.
4.
5.
6.
• 7.
987441.1
11) The names and addresses of any employees, if any, and a statement as to whether
• such person(s) has or have been convicted of a crime(s), the nature of such offense(s),
and the sentence(s) received for such conviction(s).
Name Address Offense Type (if any) Sentence
1.
2.
3.
4.
5.
6.
7.
The following information shall be submitted on one sheet of white paper no less than
11x17 inches and no larger than 24x36 inches. The information must be legible and
reproducible. In addition to the paper document, an electronic file in PDF format may be
submitted on compact disc (CD).
• 1) An accurate site plan and floor plan of the premises that clearly labels all the use of areas
on the premises, including (1) doors (2) entrances (3) windows (4) use of each area,
including (5) storage (6) cultivation areas (7) exterior lighting fixtures (8) security cameras
(9) restrooms (10) signage and (11) parking (including other tenant spaces if the MCCC is
proposed for a multi-tenant building site).
2) Photographs of the existing site that show the front, back and sides of the building,
lighting, parking, etc.
3) A security plan that includes the following:
a. Security cameras that have been installed and maintained in good working
condition, and used in an on-going manner with at least 240 continuous hours of
digitally recorded documentation in a format approved by the City Manager. Please
provide the number of security cameras and list the areas covered by each. The
areas to be covered by the security cameras include, but are not limited to (1) the
storage areas (2) cultivation areas (3) all doors (4) all windows, and (5) any other
areas as determined by the City Manager.
b. A reliable and commercial alarm system that is operated and monitored by a
lawfully operating security company or alarm business. Please provide the name
and contact information of the security camera monitoring company.
• C. Properly illuminated windows and doors that are in compliance with the City's
lighting standards regarding fixture type, wattage, illumination levels, shielding, etc.
(Applicants may be required to secure the necessary approvals and permits.)
987441.1
4) A copy of the deed, lease, contract, or other document governing the terms and conditions
of occupancy of the MCCC.
is5) Suitable evidence of proof of lawful presence or residence in the city of Palm Springs
(examples of this may include a copy of the applicant's current drivers license or a current
copy of a utility bill).
6) A notarized acknowledgement from the owner of the property, if the applicant is not the
owner, that a MCCC will be operated on his/her property.
7) A copy of the MCCC's articles of incorporation or articles of organization.
8) Evidence of authorization to do business as a non-profit within the State.
CERTIFICATIONS AND DECLARATIONS
1) 1 declare under penalty of perjury, under the laws of the State of California, that all statements
contained in this application and any accompanying documents is true and correct, with full
knowledge that all statements made in this application are subject to investigation and that any
false or dishonest answer to any question may be grounds for denial of the application or
subsequent revocation of the permit.
Signature: /i�/1�+ — �(��" �-- Date:
Signature: Date:
• 2) 1 expressly authorize the City Manager of the City of Palm Springs to seek verification of the
information contained within this application, including but not limited to, a comprehensive review
of my background. I understand that this review may include verification of my personal social
security number, credit reports, current and previous residences, employment history, education
background, civil and criminal history records from any criminal justice agency in any or all
federal, state, county jurisdictions, dri itiig ecords, birth records, and any other public records.
Signature: Date:
Signature: Date:
3) 1 have received, read, reviewed, and understand all of the requirements of the City of Palm
Springs regarding the operation and management of medical cannabis cooperatives and
collectives in the City, including without limitation the provisions of Chapters 3.35 and 5.35 and
Section 93.23.15 of the Palm Springs Municipal Code, and I acknowledge that I am required to
fully comply with these provisions. I also acknowledge that failure to comply with any of these
requirements may subject me to administrative fines, criminal sanctions, and other penalties as
provided in the Palm Springs Municipal Code, including suspension or termination of my permit
to operate a medical nnabis coo�ative or collective in the City.
Signature: Date:
• Signature: Date:
987441.1
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•
• 0Personalized Security Services
Proposal
06/05/2014 1348
PersonalizedX
Security
Services
Max Groso
63738 Orr
Palm Springs,CA 92262
of SeFvi`
06/05/2014 Control Panel Upgrade System with 2GIG Panel 1
06/05/2014 Keypad Touchscreen Keyad 1
0 6/0 512 0 1 4 Expander Zone Expander 2
06/05/2014 Sensor Test and Use Existing Sensors 1
06/05/2014 Cell Unit Wireless Communicator 1
06/05/2014 Labor Test and Install system 1
• Installation
06/05/2014 Motion Sensor Add Motion Sensors to Warehouse 2
06/05/2014 Total Total 1 995.00 995.00
06/05/2014 $40 Per Month Monitoring
Includes:
24HR Alarm Monitoring
email notifications
30 user Codes
ann/disarm system via PC or Smart Phone
1 Year Contract
I
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ACO6980
CA LIC 958582
• Accepted By Accepted Date
68950 Adeline Rd.,Cathednd City,CA 92234-Ph.(760)325-3359,Fac(760)325.9300 FmeiL Info@Petsomh7xdeecumysetvices.co n
• References Personalized
Security
Services
Betty Ford Center Kool Fog Inc.
Neil Lingle Director of Security Bryan Roe
39000 Bob Hope Drive 73814 Dinah Shore Dr
Rancho Mirage,CA 92270 Palm Desert, CA 92211
Cali me for Phone Info (760)321-9203
JPL Bible Church Whitehawk HOA
Steven Shuey Charlie Cleary
• 39001 Monterey Ave Palm Desert,CA 92211
Rancho Mirage, CA 92270 (760) 360-2269
(760)250-1821
Vista Montana HOA
Rebecca Day
15300 Palm Drive
Desert Not Springs, CA 92240
(760)329-2921
•
68-950 Adelina Rd. * Cathedral City * California * 92234
Phone: 760-325-3359 Fax760-325-9300
VITEK VTD-AR2812N: Alpha Series Vandal Resistant High Resolution Infrared WDR... Page 2 of 2
. Weather Resistance IP68
Input VoltKe 12VDC f 24VAC(Dual Voltage)
Power Conaumptlon'(12VDC) 120ma/800m(IR OFF/ON)
Power Consumption-(24VAC) 70ma/500ma(IR OFF/ON)
DiMenSIMS(Diameter x Height) 5.85"x 4.75'
28492 Constellation Road Valencia,CA 91355 1 Phone:888-VfrEK-70 W1-294-8043 1 Fax:661-2 94-80 4 4 1 Sales@vitekcctv.com
•
•
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Day/Night
speco technologies Weather Resistant Color
atilllyl �.^:,u� Bullet Cameras/63 IR LEDs
VL7038I RVF 2.8-12mm auto iris vartfocal lens
VL7039I RVF a-50mm auto Iris varifocal lens
Features
•113"Sorry'Super-Had II'CCD
•High Performance W-V DSP chip
•600 TV lines resolution 5.4'W
•Multi-mount is a unique mount allowing Installers to
manipulate the camera to almost every angle with simplicity =
•Zero noise and no ghosting effect with digital noise reduction(DNR) N
•True day&night(ICR IR cut filter removable) M
16
•External control rings for easy focus&distance adjustment 5.5"L 6"L
•Highest resolution:vivid,sharp picture In complete darkness
•Front glass heater:with thermic rays&built-in temperature w
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sensor for Immediate removal of condensation Nro Y
• Specifications
Image Sensor......................1/3`Sony Super-HAD 11'CCD Sense-Up.............................Off/Auto(selectable limit x2-x256)
Resolution............................600 TV lines Mirror...................................Off/Mirror V-Rev/Rotate
Minimum Illumination...........CDs off 0.15 lux,CDs on 0.00003 lux Digital Zoom........................On(1x-16x)1 Off
Total Pixels..........................at I (H)x 508(V) Power Consumption............12VDC,220mA(CDs oft)
Effective Pixels....................768(H)x 494(V) 700mA(CDs on)
Number Of IR Leds..............63 Heater on adj:220-700mA
IR Range.............................Up To 131' 24VAC 150mA(CDs oft)
White Balance.....................ATW/Outdoor/Indoor I Manual 450mA(CDs off)
AWC(1,700°K-11,000•K) Heater on adj:170-450mA
Gain Control........................High/Low/Off, Power Supply......................12VDC/24VAC(dual voltage)
SIN Ratio.............................More than 52dB(AGC off,Weight on) (power supply not supplied)
Backlight Compensation......HLC/BLC I Off Operating Temperature/
Electronic Shutter Speed.....1150,1/60 sec.-1/100,000 sec. Humidity...............................14'F-122'F I RH 95%max.
OSD.....................................Built-in Storage Temperature/
DNR.....................................Off/On(level adjustable) Humidity................................4'F-140'F I RH 95%max.
D-WDR................................Indoor/Outdoor I Off Dimensions..........................5.4`(W)x 325"(H)x 11.5"(L)
Sharpness...........................0.31'(1evel adjustable) Weight.................................4 lbs.
Privacy................................On I Off(12 zones)
Scanning System.................2:1 Interiace Optional Accessories
Synchronization...................Internal f
Day&Night.........................Color l BW/Auto IEXT
Motion Detection..................On IOff(6 zones) If!L• TT
INTJes INTCM Pswd PSNS
Sgiere Jur WEox CameePde AOeptar Powersq" Pmer Supply
Spew I'ochnologies is constantly developing and improving products.
• We reserve the right to modify product design and specifications without notice and without Incurring any obligation. y Rev. 1124/12
For
more information contact Speco Technologies
200 New Highway, Amityville, NY 11701 • Toll Free: 1-800-645-5516 Fax: 631-957-9142 or 631-957-3880
www.specotech.com
5
• � r
AIR COMMERCIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE -- GROSS
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)
1. Basic Provisions("Basic Provisions").
1.1 Parties: This Lease("Lease"),dated for reference purposes only September 20, 2013 ,
is made by and between RJR Investment Group Na. 2 a California General Partnership
("Lessor')
and William E. Cooper, an individual
("Lessee"),
(collectively the"Parties,"or individually a"Party").
1.2 Premises: That certain real property, including all Improvements therein or to be provided by Lessor under the terms of this Lease,
and commonly known as 63-738 Orr Way
located in the County of Palm Springs .State of California
and generally described as(describe briefly the nature of the properly and,0 applicable,the"Project",if the property Is located within a Project)
An approximately 4,896 Sq. ft. industrial building on approximately 0.38 acres in the
North Palm Springs Business Center (APN: 666-422-007)
('Premisss'�. (See also Paragraph 2)
1.3 Term: 1 years and 0 months("Original Term")commencing October 15, 2013
• ("Commencement Date")and ending October 14, 2014 ("Explraflon Datel.
(See also Paragraph 3)
1.4 Early Possession: if the Premises are available Lessee may have non-exclusive possession of the Premises commencing
("Early Possession Date'J. (See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $2, 692.80 per month("Base Rent"), payable on the Fifteenth (15th)
day of each month commencing October 15, 2013
. (See also Paragraph 4)
❑If this box is checked,there are provisions in this Lease for the Base Rent to be adjusted.See Paragraph
1.6 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent:$2, 692.80 for the period October 15 - November 14, 2013
(b) Security Deposit:$2, 692.80 ("Security Deposifl. (See also Paragraph 5)
(a) Association Fees:$ for the period
(d) Other. $ for
(a) Total Due Upon Execution of this Lease:$5,38 5.6 0
1.7 Agreed Use: Office and storage of furniture and other household items.
(See also Paragraph 6)
1.8 Insuring Party: Lessor is the"Insuring Party". The annual"Base Premirarr"is$ (See also Paragraph 8)
1.9 Real Estate Brokers:(See also Paragraph 15 and 25)
(a) Representation: The following real estate brokers (the "Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):
❑ represents Lessor exclusively("Lessors Broken;
❑ represents Lessee exclusively ("Lessee's Broker'); or
•
' — ___ PAGE OF 17
`T�""INITIALS INITIALS
62gg1-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG.17-2113E
IZBaxley Properties, Inc. represents both Lessor and Lessee("Dual Agency").
(b)Payment to Brokers:Upon execution and delivery of this Lease by both Parties,Lessor shall pay to the Brokers for the brokerage
services rendered by the Brokers the fee agreed to in the attached separate written agreement or if no such agreement is attached, the sum of
• or %of the total Base Rent payable for the Original Tenn,the sum of or of the total Base
Rent payable during any period of time that the Lessee occupies the Premises subsequent to the Original Term,and/or the sum of
or %of the purchase price in the event that the Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises.
See paragraph 52.
1.10 Guarantor.The obligations of the Lessee under this Lease are to be guaranteed by William E. Cooper
_ ("Guarantoej. (See also Paragraph 37)
1.11 Attachments. Attached hereto are the following,all of which constitute a part of this Lease:
® an Addendum consisting of Paragraphs 51 through 5 6
❑ a plot plan depicting the Premises;
❑ a current set of the Rules and Regulations;
❑ a Work Letter,
❑ other (specify):
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby teases from Lessor,the Premises,for the term, at the rental,and
upon all of the terms,covenants and conditions set forth in this Lease. While the approximate square footage of the Premises may have been used in
the marketing of the Premises for purposes of comparison,the Base Rent stated herein is NOT tied to square footage and is not subject to adjustment
should the actual sae be determined to be different. Note: Lessee is advised to verify the actual size prior to executing this Lease.
2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and free of debits on the Commencement Date or the Early
Possession Date, whichever first occurs ("Start Date"), and, 50 long as the required service contracts described in Paragraph 7.1(b) below are
obtained by Lessee and in effect within thirty days following the Start Date,warrants that the existing electrical, plumbing,fire sprinkler,lighting,heating,
ventilating and air conditioning systems("HVACI, loading doors, sump pumps, If any, and all other such elements In the Premises, other than those
constructed by lessee,shall be In good operating condition on said date and that the surface and structural elements of the roof, bearing walls and
foundation of any buildings on the Premises(the"Building")shall be free of material defects, and that the Unit does not contain hazardous levels of
any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with said warranty exists as of the Start Date,or If one of
• such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall, as Lassoes sole obligation with respect to
such matter,except as otherwise provided in this Lease,promptly after receipt of written notice from Lessee setting form with specificity the nature and
extent of such non-compliance,malfunction or failure, rectify same at Lessor's expense. The warranty periods shall be as folows:(1)6 months as to the
HVAC systems,and 01)30 days as to the remaining systems and other elements of the Building. if Lessee does not give Lessor the required notice
within the appropriate warranty period,correction of any such non-compliance,malfunction or failure shall be the obligation of Lessee at Lessee's sole
cost and expense,except for the roof,foundations,and bearing walls which are handled as provided in paragraph 7.
2.3 Compliance. Lessor warrants that to the best of Its knowledge the improvements on the Premises comply with the building codes,
applicable laws,covenants or restrictions of record, regulations,and ordinances("Applicable Requirements")that were In effect at the time that each
improvement,or portion thereof,was constructed. Said warranty does not apply to the use to which Lessee will put the Premises,modifications which
may be required by the Americans with Disabilities Act or any similar laws as a result of Lessee's use(see Paragraph 50),or to any Alterations or Utility
Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee Is responsible for determining whether or not the
Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the
Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as omensise provided, promptly after
receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor's expense. If
Lessee does not give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that
noncompliance shall be the obligation of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereafter changed so as to
require during the term of this Lease the construction of an addition to or an alteration of the Premises and/or Building, the remediation of any
Hazardous Substance,or the reinforcement or other physical modification of the Unit, Premises and/or Building ('Capital Expenditure"), Lessor and
Lessee shall allocate the cost of 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 the
Premises by Lessee as compared with uses by tenants in general,Lessee shall be fully responsible for the cost thereof,provided,however that k such
Capital Expenditure is required during the last 2 years of this Lease and the coat thereof exceeds 6 months'Base Rent,Lessee may instead terminate
this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee's termination notice that Lessor has elected to pay the
difference between the actual cost thereof and an amount equal to 6 months'Base Rent. If Lessee elects termination,Lessee shall immediately cease
the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days
thereafter. Such termination date shall, however, In no event be eariler than the last day that Lessee could legally utilize the Premises without
commencing such Capital Expenditure.
(b)If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee(such as,governmentally
mandated seismic modifications),then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay,each month during the
remainder of the tens of this Lease or any extension thereof,on the date that on which the Base Rent is due,an amount equal to 1/144m of the portion
of such costs reasonably attributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligation at any time.If, however,
such Capital Expenditure Is required during the last 2 years of this Lease or g Lessor reasonably determines that it is not economically feasible to pay
its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in
• PAGE 2 OF 17
INITIALS INITIALS
02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-17-2113E
writipg, within 10 days after receipt of Lessor's termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to
terminate,and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same,with Interest,from Rent
until Lessors share of such costs have been fully paid. If Lessee is unable to finance Lessors share,or if the balance of the Rent due and payable for
the remainder of this Lease Is not sufficient to fully reimburse Lessee on an offset basis. Lessee shall have the right to terminate this Lease upon 30
• days written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary,
unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed
change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall either: (I) immediately cease such
changed use or Intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure,or(7
complete such Capital F_xpendkure at its own expense.Lessee shall not,however,have any right to terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a)it has been given an opportunity to Inspect and measure the Premises,(b)it
has been advised by Lessor and/or Brokers to satisfy itself with respect to the size and condition of the Premises (including but not limited to the
electrical, HVAC and fire sprinkler systems, security,environmental aspects, and compliance with Applicable Requirements and the Americans with
Disabilities Ad), and their suitability for Lessee's intended use, (c)Lessee has made such Investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the some relate to Its occupancy of the Premises,(d)it Is not relying on any representation as to the
size of the Premises made by Brokers or Lessor,(a)the square footage of the Premises was not material to Lessee's decision to lease the Premises
and pay the Rent staled herein, and(f) neither Lessor, Lessors agents, nor Brokers have made any oral or written representations or warranties with
respect to said matters other than as set forth In this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations,
promises or warranter concaming Lessee's ability to honor the Lease or suitability to occupy the Premises, and(fi)it is Lessors sole responsibility to
investigate the financial capability andlor suitability of all proposed tenants.
2.5 Lessee as Prior OwneNOccupanL The warranties made by Lessor in Paragraph 2 shall be of no force or affect if immediately
prior to the Start Data Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary cerective
work.
3. Tenth.
3.1 Term. The Commencement Date,Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. Any provision herein granting Lessee Early Possession of the Premises is subject to and conditioned upon the
Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to
occupy the Premises. If Lessee totally cr partially occupies the Premises prior to the Commencement Data, the Obligation to pay Hass Rest shall be
abated for the period of sush rienly Possession AN othBF 1AFFAS ef this Lease (AnGluding but Fiat WAIlled is the obligations to my-Real--�ie
and hisuFanue,premiums and to maintain the Premises)shall be in effect during such period. Any such Early Possession shall not affect the Expiration
Date.
3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to
Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date. Lessor shall not be subject to any
IlabBity,therefor,nor shall such failure affect the validity of this Lease or change the Expiration Date.Lessee shall not,however,be obligated to pay Rent
or perform Its other obligations until Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have
enjoyed shall nm from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms
hereof,but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days after the Commencement
• Date,as the same maybe extended under"terms of any Work Letter executed by Parties,Lessee may, at Re option, by notice in writing within 10
days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such
written notice Is not received by Lessor within sold 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not
delivered within 120 days after the Commencement Date,this Lease shall terminate unless other agreements are reached between Lessor and Lessee,
in writing.
3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee until Lessee compfies with its
obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its
obligations under this Lease from and after the Start Date, including the payment of Rent, notwithstanding Lessors election to withhold possession
pending receipt of such evidence of Insurance. Further,if Lessee Is required to perform any other conditions prior to or concurrent with the Sind Date,
the Start Date shall occur but Lessor may elect to withhold possession until such conditions are satisfied.
4. Rent
4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit)are
deemed to be rent("Rent").
4.2 Paymnt L . Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States,without offset or
deduction(except as specifically permitted In this Lease),on or before the day on which R is due.All monetary amounts shall be rounded to the nearest
whole dollar. In the event that any invoice prepared by lessor is inaccurate such Inaccuracy shall not constitute a waiver and Lessee shall be obligated
to pay the amount set forth In this Lease. Rent for any period during the term thereof which is for Was than one full calendar month shall be prorated
based upon the actual number of days of said month. Payment of Rem shall be made to Lessor at its address stated herein or to such other persons or
place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of
Lessors rights to the balance of such Rent, regardless of Lassoes endorsement of any check so stating. In the event that any check,draft, or other
instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of$25 in addition to any Late
Charge and Lessor, at Its option, may require all future payments to be made by Lessee to be by cashiers check. Payments will be applied first to
accrued late charges and attorney's fees, second to accrued Interest, then to Base Rent, AsuranGs and Real PFemFty TMes, and any remaining
amount to any other outstanding charges or costs.
4.3
assoG!atmennFcnAdOM'n*"Mf�lM4BdGF26SB8B8dBg8mRgttl]RPMMiROn Said monies shall be paid at the same time and n the RamemefiflWaSthm
8asa Rent
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance
of its obligations under this Lease. If Lessee fails to pay Rent,or otherwise Defaults under this Lease,Lessor may use,apply or retain all or arty portion
of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/ or to reimburse or
compensate Lessor for any liability,expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor time or applies all or any
portion of the Security Deposit,Lessee shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shag, upon written request from
Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same proportion to the
• PAGE 3 OF 17
INITIALS INITIALS
020011-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-17-2113E
incmased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material
charge In the business of Lessee or to accommodate a subleases or assignee, Lessor shall have the right to Increase the Security Deposit to the
extent necessary,in Lessors reasonable judgment,to account for any increased wear and tear that the Premises may suffer as a result thereof. If a
change in control of Lessee occurs during this Lease and following such change the financial condition of Lessee is, in Lessor's reasonable Judgment
• significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its
general accounts.Within 90 days after the expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall be considered to be held in trust,to bear interest or to be prepayment for any monies to be paid
by Lessee under this Lease.
6. use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use,or any other legal use which Is reasonably comparable
thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful,creates damage,waste or a
nuisance,or that disturbs occupants of or causes damage to neighboring premises or properties.Other than guide,signal and seeing eye dogs,Lessee
shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay Its consent to any
written request for a modification of the Agreed Use,so long as the same will not impair the structural integrity of the improvements on the Premises of
the mechanical or electrical systems therein,andfor is not significantly more burdensome to the Premises. If Lessor elects to withhold consent,Lessor
shall within 7 days after such request give written notification of same,which notice shall include an explanation of Lassoes objections to the change in
the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The tern "Hazardous Substance" as used in this Lease shag mean any product,
substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials
expected to be on the Premises,is either.(I)potentially Injurious to the public health,safety or welfare,the environment or the Premises,(0)regulated
or monitored by any governmental authority,or(Ili)a basis for potential liability of Lessor to any governmental agency or third parry under any applicable
statute or common law theory. Hazardous Substances shag include,but not be limited to, hydrocarbons, petroleum,gasoline,andfor crude ON or any
products, by-products or fractions thereof. Lessee shall not engage In any activity in or en the Premises which constitutes a Reportable Use of
Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee's expense) with all Applicable
Requirements. "Reportable Use"shall mean(1) the installation or use of any above or below ground storage tank, (5)the generation, possession,
storage,use,transportation,or disposal of a Hazardous Substance that requires a permit from,or with respect to which a report,notice,registration or
business plan is required to be filed with, any governmental authority,and/or(ii)the presence at the Premises of a Hazardous Substance with respect
to which any Applicable Requirements requires that a notice be given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the
Agreed Use, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long as such use Is in
compliance with all Applicable Requirements, Is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful
risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may condition its consent to any Reportable Use upon
receiving such additional assurances as Lessor reasonably deems necessary to protect Itself, the public,the Premises and/or the environment against
damage,contamination, Injury and/or liability,including,but not limited to,the installation(and removal on or before Lease expiration or termination)of
protective modifications(such as concrete encasements)and/or increasing the Security Deposit.
• (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe,that a Hazardous Substance has come to be
located in,on,under or about the Premises, other than as previously consented to by Lessor,Lessee shall immediately give written notice of such fact
to Lessor,and provide Lessor with a copy of any report,notice,claim or other documentation which it has concerning the presence of such Hazardous
Substance.
(c) Lessee Remedlation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under,or
about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable
Requirements and take all investigatory andfor remedial action reasonably recommended,whether or not formally ordered or required,for the cleanup
of any contamination of, and for the maintenance,security and/or monitoring of the Premises or neighboring propertles,that was caused or materially
contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for
Losses,or any third party.
(d)Lessee Indemnification. Lessee shag indemnify, defend and hold Lessor,its agents,employees,lenders and ground lessor,
if any, harmless from and against any and all lose of rents and/or damages, liabilities,judgments, claims, expenses, penalties, and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third parry (provided,
however,that Lessee shall have no liability under this Lease with respect to underground migration of any Hazardous Substance under the Premises
from adjacent properties not caused or contributed to by Lessee). Lessee's obligations shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or suffered by Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement
entered Into by Lessor and Lessee shall release Lessee from its obligations under this Lease with respect to Hazardous Substances,unless
specifically so agreed by Lessor In writing at the time of such agreement
(a) Lessor Indemnification. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall
Indemnify,defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including
the cost of remedlation, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by
the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligations, as and when required by the Applicable
Requirements,shall include, but not be limited to,the cost of Investigation, removal, remediation, restoration and/or abatement, and shag survive the
expiration or termination of this Lease.
(f) Irwestigations and Remedlations. Lessor shall retain the responsibility and pay for any investigations or remediation
measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to
Lessee's occupancy, unless such remediation measure Is required as a result of Lessee's use(Including"Aaerations",as defined in paragraph 7.3(a)
below)of the Premises,in which event Lessee shall be responsible for such payment lessee shall cooperate fully in any such activities at the request
of Lessor, including allowing Lessor and Lassoes agents to have reasonable access to the Premises at reasonable times In order to carry out Lassoes
investigative and remedial responsibilities.
(g)Lessor Termination Option. If a Hazardous Substance Condition(see Paragraph 9.1(e))occurs during the term of this Lease,
unless Lessee is legally responsible therefor(in which case Lessee shall make the investigation and femediation thereof required by the Applicable
Requirements and this Lease shag continue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor_
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may, at Lessors option, either n investigate and remadiate such Hazardous Substance Condition, if required, as soon as reasonably possible at
Lessors expense,in which event this Lease shall continue in full force and effect,or III) If the estimated cost to remedlate such condition exceeds 12
times the then monthly Base Rent or$100,000,whichever is greater,give written notice to Lessee,within 30 days after receipt by Lessor of knowledge
of the occurrence of such Hazardous Substance Condition,of Lessors desire to terminate this Lease as of the date SD days following the date of such
• notice. In the event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's
commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the
Men monthly Base Rent or$100,000,whichever Is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30
days fallowing such commitment. In such event,this Lease shall continue in full force and effect, and Lessor shall proceed to make such remediatlon
as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance
thereof within the time provided,this Lease shag terminate as of the date specified in Lessors notice of termination.
6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided In this Lease, Lessee shall, at Lessee's
sole expense, fully, diligently and In a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire
insurance underwriter or rating bureau, and the recommendations of Lessors engineers and/or consultants which relate in any manner to the such
Requirements,without regard to whether such Requirements are now in effed or become effective after the Start Date. Lessee shall,within 10 days
after receipt of Lessors written request, provide Lessor with copies of all permits and other documents, and other Information evidencing Lessee's
compliance with any Applicable Requirements specified by Lessor, and shag immediately upon receipt, notify Lessor in writing (with copies of any
documents Involved)of any threatened or actual claim,notice,citation,warning,complaint or report pertaining to or involving the failure of Lessee orthe
Premises to comply with any Applicable Requirements.Likewise,Lessee shall immediately give written notice to Lessor of'.(1)any water damage to the
Premises and any suspected seepage,pooling, dampness or other condition conducive to the production of mold; or(l)any mustiness or other odors
that might indicate the presence of moil in the Premises.
6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants shall have the right to
enter into Premises at any Urne, in the case of an emergency,and otherwise at reasonable times after reasonable notice,for the purpose of inspecting
the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paw by Lessor,unless
a violation of Applicable Requirements, or a Hazardous Substance Condition (see paragraph 9.1)is found to exist or be imminent,or the inspection is
requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse lessor for the cost of such inspection,so long
as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies of all relevant material safety data
sheets(MSDS)to Lessor within 10 days of the receipt of a written request therefor.
7. Maintenance;Repairs;Utility Installations;Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a)In General. Subject to the provisions of Paragraph 2.2(Condition),2.3(Compliance),6.3(Lessee's Compliance with Applicable
Requirements), 7.2 (Lessors Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee's sole expense, keep the
Premises, Utility Installations (Intended for Lessee's exclusive use, no matter where located), and Alterations in good order, condition and repair
(whether or not the portion of the Premises requiring repairs,or the means of repairing the same,are reasonably or readily arxresslble to lessee,and
whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such portion of the Premises),
including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels,fire
protection system, fixtures, walls (interior and exterfor), ceilings, floors, windows,doors, plate glass, skylights, 'endowing, driveways, parking low,
signs,sidewalks-and-pa;kw located in,on,or adjacent to the Premises. Lessee is also responsible for keeping the roof and
• roof drainage dean and free of debris. Lessor shall keep the surface and structural elements of the roof,foundations,and beading walls in good repair
(see paragraph 7.2). Lessee, In keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices,
specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b)below. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and all Improvements thereon or a part thereof in good order,condition
and state of repair. Lessee shall,during the term of this Lease, keep the exterior appearance of the Building in a first-Gass condition(including,e.g.
graffiti removal)consistent with the exterior appearance of other similar facilities of comparable age and size in the vicinity,including,when necessary,
the exterior repainting of the Building.
(b) Service Contracts. Lessee shall, at Lessee's sole expense, procure and maintain contracts, with copies to Lessor, in
customary form and substance for, and with contractors specializing and experienced In the maintenance of the following equipment and
improvements, IF any, If and when installed on the Premises:. (i) HVAC equipment, (t0 boiler, and pressure vessels, (III) fire extinguishing systems,
Inkling fire alarm and/or smoke detection,(iv)landscaping and irrigation systems,and (v)clarifiers. However,Lessor reserves the right,upon notice
to Lessee,to procure and maintain any or all of such service contracts,and Lessee shall reimburse Lessor,upon demand,for the cost thereof.
(c) Failure to Perform. If Lessee fails to perform Lessee's obligations undo this Paragraph 7.1, Lessor may enter upon the
Premises after 10 days'prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required),perform such
obligations on Lessee's behalf,and put the Premises in good order,condition and repair, and Lessee shall promptly pay to Lessor a sum equal to 116%
of the cost thereof.
(d)Replacement Subject to Lessee's Indemnification of Lessor as set forth in Paragraph 8.7 below,and without relieving Lessee
of liability resulting from Lessee's failure to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b)cannot be
repaired other than at a cost which is in excess of 50"A of the cost of replacing such item,then such item shall be replaced by Lessor, and the cost
thereof shall be prorated between the Parties and Lessee shall only be obligated to pay,each month during the remainder of the term of this Lease,on
the date on which Base Rent Is due,an amount equal to the product of multiplying the coat of such replacement by a fraction,the numerator of which is
one,and the denominator of which is 144 Cie. 1/144th of the cost par month). Lessee shall pay Interest on the unamortized balance but may prepay its
obligation at any time.
7.2 Lessors Obligations. Subject to the provisions of Paragraphs 2.2(Condition),2.3(Compliance), 9(Damage or Destruction)and
14(Condemnation),it is Intended by the Parties hereto that Lessor have no obligation,in any manner whatsoever,to repair and maintain the Premises,
or the equipment therein, all of which obligations are intended to be that of the Lessee, except for the surface and structural elements of the roof,
foundations and bearing walls,the repair of which shall be the responsibility of Lessor upon receipt of written notice that such a repair is necessary. It is
the intention of the Parties that the terms of this Lease govern the respective obligations of the Parties as to maintenance and repair of the Premises,
and they expressly waive the benefit of any statute now or hereafter in effect to the extent It is Inconsistent with the terns of this Lease.
7.3 Utility Installations;Trade Fixtures;Alterations.
(a) Definitions. The term"Utility Irstallators"refers to all floor and window coverings, air and/or vacuum lines,power panels,
electrical distribution, security and fire protection systems,communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on
the Premises. The term"Trade Fixtures"shall mean Lessee's machinery and equipment that can be removed without doing material damage to the
Premises. The tens "Alterations" shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether tpy
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addition or deletion. "Lessee Owned Alterations and/or Utility Installations"are defined as Alterations and/or Utility Installations made by Lessee
that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(b)Consent Lessee shall not make any Alterations or U01lty Installations to the Premises without Lassoes prior written consent.
Lessee may, however,make non-structural Alterations or Utility Installations to the interior of the Promises(excluding the roof)without such consent but
• upon notice to Lessor,as long as they are not visible from the outside,do not involve puncturing,relocating or removing the roof of any existing walls,
will not affect the electrical, plumbing, HVAC, and/or life safety systems, and the cumulative cost thereof dudng this Lease as extended does not
exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base Rent in any one year. Notwithstanding the
foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor
may, as a precondition to granting such approval, require Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written forth with detailed
plans. Consent shall be deemed conditioned upon Lessee's: ()acquiring all applicable governmental permits, (II)furnishing Lessor with copies of both
the permits and the plans and specifications prior to commencement of the work, and (Ili) compliance with all conditions of said permits and other
Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with
good and sufficient materials. Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month's Base Rent,Lessor may condition Its consent upon Lessee providing a lien and completion bond in an amount equal
to 150%of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with Lessor.
(c)Liens;Bonds. Lessee shall pay,when due,all claims for labor or materials furnished or alleged to have been furnishedto or
for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any
Interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of arty work In, on or about the Premises, and
Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such Tien, claim or demand, (hen Lessee
shall,at Its sole expense defend and protect Itself,Lessor and the Premises against the same and shall pay and satisfy any such adverse judgment that
may be rendered thereon before the enforcement thereof. If Lessor shall require,Lessee shall furnish a surety bond in an amount equal to 150%of the
amount of such contested lien, claim or demand,Indemnifying Lessor against IfabllIty for the same. If Lessor elects to participate in any such action,
Lessee shall pay Lessor's attomeys'fees and costs.
7.4 Ownership;Removal;Surrender;and Restoration.
(a)Ownership. Subject to Lassoes right to require removal or elect ownership as hereinafter provided,all Alterations and Utility
Installations made by Lessee shall be the property of Lessee,but considered a part of the Premises. Lessor may,at any time,elect in writing to be the
owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b)hereof,all
Lessee Owned Alterations and Utility Installations shall, at the expiration or lamination of this Lease, become the property of Lessor and be
surrendered by Lessee with the Premises.
(b)Removal. By delivery to Lessee of written notice from Lessor not earfier than 90 and not later than 30 days prior to the end of
the term of this Lease,Lessor may require that any or all Lessee Owned Alterations or Utility Installations be removed by the expiration or termination of
this lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the
required consent_
(c)Surrender;Restoration Lessee shall surrender the Premises by the Expiration Date or any earlier termination date,with all of
the improvements, parts and surfaces thereof broom clean and free of debris,and In good operating order,condition and slate of repair,ordinary wear
and tear excepted. "Onllnary wear and tear" shall not include any damage or deterioration that would have been prevented by good maintenance
• practice. Notwithstanding the foregoing, If this Lease Is for 12 months or less, then Lessee shall surrender the Premises in the same condition as
delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasloned by the installation,
maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations,furnishings, and equipment as well as the removal of
any storage tank Installed by or for Lessee. Lessee shall completely remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Lessee,or any third party(except Hazardous Substances which were deposited via underground migration from areas outside of the
Premises)even If such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. Any personal properly of Lessee not removed on or before the Expiration Date or any'eadier
termination date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure
by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c)without the express written consent of Lessor shall constitute a holdover
. under the provisions of Paragraph 26 below. -
8. Insurance;Indemnity.
84 Payment a!Pmmlum-�
(a)Lessee shall pay ta Lessor aRy 111811FOR st A Cost insmam")assuFFing during the term of this Wase.
fiRS-Onnee Cost lnomaAA 'A defined as any nGFoas6 in the act al cost of the ln&uFanse-pagakad-indef-PaFegraph 8.2(b), 8.3(a) and4i-.
2bove the Rasp Premium as hereinafter defined nn-sulafAd on 2A ann-a] hnnog na-ranna COM IMMARG RhAll lRd Id -but Of be limited to inemases
-
ricreased valuation of the Premises BRIMOF a PFBMiUM rate inGmase The parties aFe enGouFalled to fill R4he-Ba6e Premium in paFsgFaph4-.9
��
dollar-amount--Ia
Paragraph 1 A,then the Bass PFaFai im shall hR the lowest aRnual p;emium reasonably ebtainable foF the Required I UFanoe as of the sommenesmom
of the CiFiginal Term for the AgFeed Use of the Promises. In no event, FOSPOSSib'S faF any glbinaf886e-in-the
premium Gast attributable to liability IRSHMAGE1 GRR318d-by-�Inder Paragraph 8.2(b)in exosas 1$2,000,000 POF 00OUFFSAGe.
(b)Losses shall pay any sueh Insurance Cast lRoF8868 to Lessor MAMA 30 days afteF FaGelpWsy I=essos of a GOPY of the p'smiUm
8teternen49
1-eg.AF shall sine delloei,to I assaA a AlatomRAt of the AmG unt Of Rush 1AAWaRre Cost IRGmase attributable only is the Premises showing tR Masonabi
detail the M8nnBF R WhiGh such amount was oemputed.Premiums for polio berm of this Lease,
shall be PFQFStSd to GGITSEPOAd to the I FM Of-th&LOaee:
8.2 Liability Insurance.
(a)Carried by Lessee.Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee
and Lessor as an additional Insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single
Ilmh coverage in an amount not less than$1,000,000 per occurrence with an annual aggregate of not less than$2,000,000.Lessee shall add Lessor as
an additional insured by means of an endorsement at least as broad as the Insurance Service Organization's"Additional Insured-Managers or Lessors
of Premises" Endorsement. The policy shall not contain any infra-insured exclusions as between insured persons or organizations, but shall Include
coverage for liability assumed under this lease as an"Insured contracr for the performance of Lessee's Indemnity obligations under this Lease. T'f
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limits of said Insurance shall not, however, limit the liability of Lessee nor relleve Lessee of any obligation hereunder. Lessee shall provide an
endorsement on its liability poliey(ies)which provides that its insurance shot]be primary to and not contributory with any similar Insurance carried by
Lessor,whose insurance shall be considered excess insurance only.
(b)Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 82(a),In addition to,and not in lieu of,
• the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein.
8.3 Property Insurance-Building,Improvements and Rental Value.
(a)Building and Improvements. The Insuring Party shall obtain and keep In force a policy or policies in the name of Lessor,with
loss payable to Lessor,any ground-lessor,and to any Lender insuring loss or damage to the Premises. The amount of such insurance shall be equal to
the full insurable replacement cast of the Premises, as the same shall exist from time to time,or the amount required by any Lender, but In no event
more than the commercially reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations,Trade Factures,and
Lessee's personal property shall be Insured by Lessee not by Lessor. If the coverage is available and commercially appropriate,such policy or policies
shall insure against all risks of direct physical loss or damage(except the perils of flood andlor earthquake unless required by a Lender or included in
the Base Premium), including coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading,demolition,
reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause,waiver of subrogation, and inflation guard protection causing an Increase in the annual property
insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. ifsuch Insurance coverage has a deductible clause,the deductible amount shall not exceed$5,000 per
occurrence,and Lessee shall be liable for such deductible amount In the event of an Insured Loss.
(b)Rental Value. The Insuring Party shall obtain and keep in farce a policy or policies In the name of Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional-180 days("Rental Value
nAurance"). Said Insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount of coverage shall be
adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. Lessee shall be liable for any deductible
amount in the event of such loss.
(c)Adjacent Premises. If the Premises are part of a larger building,or of a group of buildings owned by Lessor which are adjacent
to the Premises, the Lessee shag pay for any Increase in the premiums for the property insurance of such bulling or buildings if said increase is
caused by Lessee's acts,omissions,use or occupancy of the Premises.
8.4 Lessee's Property;Business Interruption Insurance;Workers Compensation Insurance.
(a)Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property,Trade Fixtures,
and Lessee Owned Alterations and Utility Installations. Such Insurance shall be full replacement cost coverage with a deductible of not to exceed
$1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the repacement of personal properly,Trade Fixtures and
Lessee Owned Alterations and Unity,installations.
(b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will
reimburse Lessee for direct or indirect doss of earnings attributable to all perils commonly Insured against by prudent lessees in the business of Lessee
or attributable to prevention of access to the Premises as a result of such perils.
(c)Workers Compensation Insurance. Lessee shall obtain and maintain Workers Compensation Insurance in such amount as
may be required by Applicable Requirements. Such policy shall Include a'Waiver of Subrogation' endorsement. Lessee shall provide Lessor with a
copy of such endorsement along with the certificate of Insurance or copy of the policy required by paragraph 8.5.
• (d)No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms of coverage of insurance
specified herein are adequate to cover Lessee's property,business operations or obligations under this Lease.
8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a"General Policyholders
Rating"of at least A-. VII, as set forth in the most current issue of"Bests Insurance Guide",or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which Invalidates the required Insurance policies. Lessee shall, prior to the Start Dale, deliver to
Lessor certified copies of policies of such Insurance or certificates with copies of the required endorsements evidencing the existence and amounts of
the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall,
at least 10 days prior to the expiration of such policies,furnish Lessor with evidence of renewals or"insurance binders"evidencing renewal thereof,or
Lessor may order such Insurance and charge the cost thereof to Lessee,which amount shall be payable by Lessee to Lessor upon demand. Such
policies shall be fora term of at least one year,or the length of the remaining term of this Lease,whichever is less. If either Party shall fail to procure
and maintain the insurance required to be carried by it,the other Party may,but shall not be required to,procure and maintain the same.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,Lessee and Lessor each hereby release and relieve the
other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils
required to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required,or by any
deductibles applicable hereto. The Parties agree to have their respective property damage insurance tamers waive any right to subrogation that such
companies may have against Lessor or Lessee,as the case may be,so long as the insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessors gross negligence or wilful misconduct,Lessee shall Indemnify,protect,defend and hold harmless
the Premises,Lessor and its agents,Lessors master or ground lessor, partners and Lenders,from and against any and all claims, loss of rents and/or
damages,liens,judgments,penalties,attomeys'and consuftants'fees,expenses andror liabilities arising out of,involving,or in connection with,the use
and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters,Lessee
shall upon notice defend the same at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Loewe in such
defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 Exemption of Lessor and fte Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its
agents,nether Lessor nor its agents shall be liable under any circumstances for. (1)Injury or damage to the person or goods,wares, merchandise or
other property of Lessee, Lessee's employees,contractors,invtees,customers,or any other person in or about the Premises,whether such damage or
injury is caused by or results from fire, steam,electricity, gas,water or min, indoor air quality, the presence of mold or from the breakage, leakage,
obstruction or other defects of pipes,fire sprinklers,wires,appliances, plumbing, WAC or lighting fixtures,or from any other cause,whether the said
injury or damage results from conditions arising upon the Premises or upon other portions;of the building of which the Premises are a part,or from other
sources or places, (i)any damages arising from any ad or neglect of any other tenant of Lessor or from the failure of Lessor or Its agents to enforce
the provisions of any other lease in the Project,or(fii)injury to Lessee's business or for any loss of income or profit therefrom. Instead,it is intended
that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies)that Lessee Is required to maintain
pursuant to the provisions of paragraph 8.
8.9 Failure to provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance require
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herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by this Lease, the extend of which will be extremely
difficult to ascertain. Accordingly,for any month or portion thereof that Lessee does not maintain the required Insurance and/or does not provide Lessor
with the required binders or certificates evidencing the existence of the required insurance,the Base Rent shall be automatically Increased,without any
requirement for notice to Lessee,by an amount equal to 10%of the then existing Base Rent or$100,whichever is greater. The parties agree that such
• increase in Base Rent represents fair and reasonable compensation for the additional risk/costs that Lessor wig Incur by reason of Lessee's failure to
maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the
failure to maintain such Insurance,prevent the exercise of any of the other rights and remedies granted hereunder,nor relieve Lessee of its obligation to
maintain the insurance specified in this Lease.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial DanvaW shall mean damage or destruction to the improvements on the Premises, other than Lessee
Owned Alterations and Utility Installations, which can reasonably be repaired In 6 months or less from the date of the damage or destruction. Lessor
shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(b)"Premises Total Destruction"shall mean damage or destruction to the Premises,other than Lessee Owned Alterations and
Utility Installations and Trade Fbttures,which cannot reasonably be repaired in 6 months or less from the date of the damage or destruc0on. Lessor
shall notify lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c)"Insured Lose"shall mean damage or destruction to Improvements on the Premises,other than Lessee Owned Alterations and
Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described In Paragraph 8.3(a),
Irrespective of any deductible amounts or coverage limb involved.
(d)"Replacement Cost"shall mean the cost to repair or rebuild the Improvements owned by Lessor at the time of the occurrence
to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable
Requirements,and without deduction for depreciation.
(a) "Hazardous Substance Condition" shall mean the occurrence a discovery of a condition Involving the presence of, or a
contamination by,a Hazardous Substance,in,on,or under the Premises which requires restoration.
9.2 Partial Damage -insured Loss. If a Premises Partial Damage that Is an Insured Loss occurs, then Lessor shall, at Lessor's
expanse,repair such damage(but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations)as soon as reasonably possible
and this Lease shalt continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or
destruction the total oast to repair of which is 310,000 or less, and, In such event,Lessor shall make any applicable Insurance proceeds available to
Lessee on a reasonable basis for that purpose. NotwMhstanding the foregoing,if the required insurance was not in force or the insurance proceeds are
not sufficient to effect such repair,the Insuring Party shall promptly contribute the shortage In proceeds(except as to the deductible which is Lessee's
responsibility)as and when required to complete said repass. In the event however,such shortage was due to the fact that,by reason of the unique
nature of the improvements,full replacement cost Insurance coverage was not commercially reasonable and available,Lessor shall have no obligation
to pay for the shortage In Insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same,or adequate assurance thereof within 10 days following receipt of written notice of such shortage and request therefor. If Lessor receives
said funds or adequate assurance thereof within said 10 day period, the party responsible for risking the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received,Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to: (I) make such restoration and repair as Is commercially reasonable with Lessor paying any
• shortage in proceeds, in which case this Lease shalt remain in full force and effect or(n have this Lease terminate 30 days thereafter. Lessee shall
not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage due to good
or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such
insurance shall be made available for the repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by a
negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either. (1)repair such damage as
soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in full force and effect,or(i)terminate this Lease by giving
written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination shall be effective 60
days following the date of such notice. In the event Lessor elects to terminate this Lease.Lessee shall have the right within 10 days after receipt of the
termination notice to give written notice to Lessor of Lessee's commitment to pay for-the repair of such damage without reimbursement from Lessor.
Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to make such repairs se soon as reasonably possible after the required funds are
available. If Lessee does not make the required commitment,this tease shall terminate as of the date specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision hereof,If a Premises Total Destruction occurs,this Lease shall terminate
60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall
have the right to recover Lassoes damages from Lessee,except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any tsne during the last 6 months of this Lease there is damage for which the cost to repair
exceeds one month's Base Rem,whether or not an Insured Loss,Lessor may terminate this Lease effective 60 days following the dale of occurrence of
such damage by givhhg a written termination notice to Lessee within 30 days After the date of occurrence of such damage. Notwithstanding the
foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises,then Lessee may preserve this Lease by,
(a) exercising such option and (b) providing Lessor with any shortage In insurance proceeds (or adequate assurance thereof) needed to make the
repairs on or before the earlier of(i)the date which is 10 days after Lessee's receipt of Lessor's written notice purporting to terminate this Lease,or(ti)
the day prior to the dale upon which such option expires. If Lessee duty exercises such option during such period and provides Lessor with funds(or
adequate assurance thereof)to cover any shortage In insurance proceeds, Lessor shall, at Lessors commercially reasonable expense, repair such
damage as soon as reasonably possible and this Lease shag continue In fug force and effect. If Lessee fails to exercise such option and provide such
funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shag be
extinguished.
9.6 Abatement of Rent;Lessee's Remedies_
(a)Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for
which Lessee is not responsible under this Lease,the Rent payable by Lessee for the period required for the repair,remediation or restoration of such
damage shall be abated in proportion to the degree to which Leasse's use of the Premises is impaired, but not to exceed the proceeds received from
the Rental Value insurance. All other obligations of Less"hereunder shall be perfonred by Lessee,and Lessor shall have no liability for any such
damage,destruction,remediallm,repair or restoration except as provided herein.
(b)Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substantial and rtreanjngftdr
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way;such repair or restoration within 90 days after such obligation shall accrue, Lessee may,at any time prior to the commencement of such repair or
restoration,give written notice to Lessor and to any Lenders of which Lessee has actual notice,of Lessee's election to terminate this Lease on a date
not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days
thereafter,this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days,this Lease
• shall continue in full torte and effect. "Commence"shall mean either the unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises,whichever first occurs.
9.7 Termination;Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,in addition,return
to Lessee so much of Lessee's Security Deposit as has not been,or is not then required to be,used by Lessor.
10. Real Property Taxes.
10.1 Definition. As used herein,the term"Real Property Taxes"shall Include any form of assessment; real estate,general,special,
ordinary or extraordinary,or rental levy or tax(other than inheritance, personal Income or estate taxes);improvement bond;and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the Premises or the Project,Lessor's right to other income therefrom,and/or Lasso's
business of leasing,by any authority having the direct or Indirect power to tax and where the funds are generated with reference to the Building address
and where the proceeds so generated are to be applied by the city,county or other local taxing authority of a jurisdiction within which the Premises are
located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any Increase therein: (1) imposed by reason of events
occurring during the term of this Lease, including but not limited to, a change in the ownership of the Premises, and (i) levied or assessed on
machinery or equipment provided by Lessor to Lessee pursuant to this Lease.
10.2
(a)Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Promises I,
. h-Rsal-Rreperty-T plicable to the Prom sea W namang ever the Assal I '..
Commencement make Gcours�Tax Increase')- payment of any auGh��alx lRamanA Rho"be Friade by 6assee to Le �Gelpt 0
I-Agger!R vnittan glaternent setting faith the amount due and Gamputallan themirf. if any such taxes shall sayer any period of time PFIOF to OF 8418F 1r;
expiration or termination of this Lease, Lessee's sham of s-Gh taxes shall be prorated to cover only that poitian of the tax bill appliesible to the peried
that th'A I-Aaaa is In affect In the event 1-Gases Incurs a late oharge an any Rent payrnei;A, Lessor may eattimate the Gunerit Real Property Texas,and
require that the Tex Inamase be paid art advanee to Lessor by Losses monthly in advance with the pa"ent at the Bass Rerit,--SuGh-rnonthly�
shall be an amount equal to the amev of the estimated Installment of the Tax Insmass dividad by the numbOF Of FAQAihS remaining before the FRARth
in whlolh sold Instafirries!becomes delinquent. 1ANan the acti-al amount e-app
advanes pa3iments shall be ad'uated as required to provide the funds needed to pay the app!mble Tax Inamese Ifthe amount sollested by Lessor is
Insuffelent to pay the T-minsmass"an due,Lessee shall pay Lessor-,upon demand.Gueh addhinnal sunis as am FIAGMeaFy to pay SUGh 01111198110A11-
Advanoe payments may be intermingled with other Frieneye Of Lasser and shall Pat bow Interest In the event Of a Breach by Lessee in the
perfounarme ef its obligations wndffthig WR60,than 2AY SuGh advance payments may be treated by LesBeF as OR aWI1IQR8I 90GWFItY DepOsit.
(b)Additional Improvements. Notwithstanding anything to the contrary in this Paragraph 10.2. Lessee shall pay to Lessor upon
demand therefor the entirety of any increase in Real Property Taxes assessed by reason of Alterations or Utility Installations placed upon the Premises
by Lessee or at Lessee's request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution of this
Lease by the Parties.
10.3 Joint Assessment If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of the Tax
• Increase for at of the land and improvements included within the tax parcel assessed,such proportion to be conclusivety determined by Lessor from the
respective valuations assigned in the assessor's work sheets or such other information as may be reasonably available.
10.4 Personal Properly Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned
Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee. When possible, Lessee shall cause Its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed
separate*from the real property of Lessor. If any of Lessee's said property shall be assessed with Lessors real property,Lessee shall pay Lessor the
taxes attributable to Lessee's property within 10 days after receipt of a written statement setting forth the takes applicable to Lessee's property.
11. Utilities and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services
supplied to the Premises,together with any taxes thereon. If any such services are not separately metered or bided to Lessee, Lessee shall pay a
reasonable proportion,to be determined by Lessor,of all charges jointly metered or billed. There shall be no abatement of rent and Lessor shall not be
liable in any respect whatsoever for the inadequacy,stoppage, Interruption or discontinuance of any utility or service due to riot,strike, labor dispute,
breakdown,accident,repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, "assign or
assignment")or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lessors prior written consent.
(b)Unless Lessee is a corporation and its stock is publicly traded on a national stock exchange,a change in the control of Lessee
shall constitute an assignment requiring consent.The transfer,on a cumulative basis,of 25%or more of the voting control of Lessee shall constitute a
change in control for this purpose.
(c) The involvement of Lessee or its assets in any transaction, or sales of transactions (by way of merger, sale, acquisition,
financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of this Lease or Lessee's assets occurs,
which results or will result in a reduction of the Not Worth of Lessee by an amount greater than 25%of such Net Worth as it was represented at the
time of the execution of this Lease or at the time of the most recent assignment to which Lessor has consented,or as it exists immediately prior to said
transaction or transactions constituting such reduction,whichever was or is greater,shall be considered an assignment of this Lease to which Lessor
may withhold its consent. "Net Worth of Lessee"shad mean the net worth of Lessee(excluding any guarantors)established under generally accepted
accounting principles.
(d)An assignment or subletting without consent shall,at Lassoes option,be a Default curable after notice per Paragraph 13.1(c),or
a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
nondurable Breach,Lessor may either. f)terminate this Lease,or(ii)upon 30 days written notice,increase the monthly Base Rent to 110%of the Base
Rent then In effect. Further,In the event of such Breach and rental adjustment,(i)the purchase price of any option to purchase the Premises held by
Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled
during the remainder of the Lease term shall be increased to 110%of the scheduled adjusted rent.
(a)Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injunctive relief.
(Q Lessor may reasonably withhold consent to a proposed assignment or subletting it Lessee is in Default at the time cone is
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requested.
(g) Notwithstanding the foregoing,allowing a de minimis portion of the Premises, Is.20 square feet or less,to be used by a third
party vendor in connection with the installation of a vending machine or payphone shall not constitute a subletting.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
• (a) Regardless of Lessors consent, no assignment or subletting shall: (I)be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (i) release Lessee of any obligations hereunder, or(III) alter the primary
liability of Lessee for the payment of Rent or for the performance of any other obligations to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's obligations from any person other than Losses pending approval or
disapproval of an assignment Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall
constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c)Lessor's consent to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting.
(d)In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee,any Guarantors or anyone else
responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessors
remedies against any other person or entity responsible therefor to Lessor,or any security held by Lessor.
(a) Each request for consent to an assignment or subletting shall be in writing, accompanied by Information relevant to Lessor's
determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to
the Intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and
processing said request Lessee agrees to provide Lessor with such other or additional information and/or documentation as may be reasonably
requested.(See also Paragraph 36)
(f)Any assignee of,or sublessee under,this Lease shall,by reason of accepting such assignment,entering into such sublease,or
entering into possession of the Premises or any portion thereof,be deemed to have assumed and agreed to conform and comply with each and every
term,covenant, condition and obligation herein to be observed or performed by Lessee during the term of said assignment or sublease,other than such
obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing.
(g) Lassoes consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the
original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing.(See Paragraph 39.2)
12.3 Additional Terms and Conditions Applicable to Subletting. The following terns and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly Incorporated therein:
(a) Lessee hereby assigns and transfers to lessor all of Lessee's Interest in all Rem payable on any sublease, and Lessor may
collect such Rent and apply same toward Lessee's obligations under this Lease; provided,however,that until a Breach shall occur in the performance
of Lessee's obligations,Lessee may collect said Rent In the event that the amount collected by Lessor exceeds Lessee's than outstanding obligations
any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the
collection of Rent, be deemed liable to the sublessee for arty failure of Lessee to perform and comply with any of Lessee's obligations to such
sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee's obligations under this Lease,to pay to Lessor all Rent due and to become due under the sublease. Sublessee
shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,
not Nti standing any claim from Lessee to the contrary.
(b)In the event of a Breach by Lessee,Lessor may,at its option,require sublessee to attom to Lessor,in which event Lessor shall
• undertake the obligations of the sublessor under such sublease from the time at the exercise of said option to the expiration of such sublease;provided,
however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or
Breaches of such sublessor.
(c)Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.
(d)No sublessee shall further assign or sublet all or any part of the Premises without Lessors prior written consent.
(a)Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee,who shall have the right to cure the
Default of Losses within the grace period, it any, specified In such notice. The sublessee shall have a right of relmbursement and offset from and
against Lessee for any such Defaults cured by the sublessee.
13. Default;Breach;Remedies.
13.1 Default; Branch. A "Default' is defined as a failure by the Lessee.to comply with or perform any of the terms, covenants,
conditions or Rules and Regulations under this Lease. A"Breach" is defined as the occurrence of one or more of the following Defaults, and the
failure of Lessee to cure such Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of
security,or where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof,or without providing reasonable
assurances to minimize potential vandalism.
(b)The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder,whether
to Lessor or to a third party,when due,to provide reasonable evidence of Insurance or surety bond, or to fud81 any obligation under this Lease which
endangers or threatens life or property, where such failure continues for a period of 3 business days following written notice to Lessee. THE
ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF
LESSOR'S RIGHTS,INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, ad or acts
constituting public or private nuisance,and/or an Illegal activity on the Premises by Lessee,where such actions continue for a period of 3 business days
following written notice to Lessee.
(d)The failure by Lessee to provide (Q reasonable written evidence of compliance with Applicable Requirements, (li)the service
contracts, (liQ the rescission of an unauthorized assignment or subletting, (tv) an Estoppel Certificate or financial statements, (v) a requested
subordination, (vi)evidence concerning any guaranty and/or Guarantor, (viQ any document requested under Paragraph 42, (viil) material safety data
sheets(MSDS),or(br)any other documentation or information which Lessor may reasonably require of LeBow under the terns of this Lease,where
any such failure continues for a period of 10 days following written notice to Lessee.
(a)A Default by Lessee as to the terms,covenants,conditions or provisions of this Lease,or of the rules adopted under Paragraph
40 hereof, other than those described in subparagraphs 13.list,(b),(c)or(d),above,where such Default continues for a period of 30 days after written
notice; provided,however,that If the nature of Lessee's Default is such that more than 30 days are reasonably required for Its cure,then It shall not be
deemed to be a Breach If Lessee commences such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.
(f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of
�creditors;
'(if)becoming a"doblor'as defined in 11 U.S.C.§101 or any successor statute thereto(unless,in the case of a petition fled against LeBow,
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the,same is dismissed within 60 days); (111)the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at
the Premises or of Lessee's interest in this Lease,where possession Is not restored to Lessee within 30 days;or(Iv)the attachment,execution or other
judicial seizure of substantially all of Lessee's assets located at the Premises or of Lessee's interest in this Lease,where such seizure is not discharged
within 30 days;provided, however, in the event that any provision of this subparagraph(a)is contrary to any applicable law,such provision shall be of
• no force or effect,and not affect the validity of the remaining provisions.
(g)The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false.
(h)If the performance of Lessee's obligations under this Lease Is guaranteed: 0)the death of a Guarantor, (if)the termination of a
Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty,(ill)a Guarantors becoming insolvent or the
subject of a bankruptcy filing, (Iv)a Guarantors refusal to honor the guaranty,or(v)a Guarantors breach of Its guaranty obligation on an anticipatory
bass, and Lessee's failure,within 60 days following written notice of any such event,to provide written alternative assurance or security,which,when
coupled with the then existing resources of Lessee,equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at
the time of execution of this Lease.
13.2 Remedies. If Lessee fags to perform any of its affirnotive duties or obligations,within 10 days after written notice(or in rase of an
emergency,without notice). Lessor may, at its option, perform such duty or obligation on Lessee's behalf, including but trot limited to the obtaining of
reasonably required bonds,insurance policies,or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115%of
the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or
without further notice or demand,and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a)Terminate Lessee's right to possession of the Premises by any lawful means, in which case this Lease shag terminate and
Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (I)the unpaid Rent which had
been earned at the time of termination;(ii)the worth at the time of award of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental ices that the Lessee proves could have been reasonably avoided;(ii)the worth at
the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that
the Lessee proves could be reasonably avoided;and(iv)any other amount necessary to compensate Lessor for all the detriment proximately caused by
the Lessee's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, InGudtrg but
not limited to the cost of recovering possession of the Premises,expenses of relethng, including necessary renovation and alteration of the Premises,
reasonable altomeys'fees,and that portion of any leasing commission paid by Lessor.in connection with this Lease applicable to the unexpired term of
this Lease. The worth at the time of award of the amount referred to in provision (110 of the Immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located M the time of award
plus one percent. Efforts by Lessor to mitigate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any
- damages to which Lessor Is otherwise entitled. If termination of this Lease Is obtained through the provisional remedy of unlawful detainer,Lessor shall
have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein,or Lessor may reserve the Fight to recover all or
any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given,a notice to pay rent or quit,or
to perform or quit given to Lessee under the unlawful detainer statute shall also constitute the notice required by Paragraph 13.1. In such case,the
applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the
Default within the greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the
remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's night to possession and recover the Rent as it becomes due, In which event Lessee may
• sublet or assign, subject only to reasonable limitations. Acts of molatenence, efforts to rest, and/or the appointment of a receiver to protect the
Lessors interests,shall not constitute a termination of the Lessee's right to possession.
(c)Pursue any other remedy now or hereafter available under the lows or judicial decisions of the state wherein the Premises are
located. The expiration or termination of this Lease and/or the termination of Lessee's right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Promises.
13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for
Lessee of any cash or other bonus,inducement or consideration for Lessee's entering into this Leese,all of which concessions are hereinafter referred
to as"Inducement Provisions,"shall be deemed conditioned upon Lessee's full and faithful performance of all of the terms,covenants and conditions
Of this Lease. Upon Breach of this Lease by Lessee,any such Inducement Provision shall automatically be deemed deleted from this Lease and of no
further force or effedt, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an
inducement Provision shall be immediatelydue and payable by Lessee to Lessor.notwithstanding any subsequent cure of said Breach by Lessee. The
acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated In writing by Lessor at the time of such acceptance.
13A Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs no
contemplated by this Lease,the exact amount of which will be extremely difficult to ascertain.Such costs include,but are not limited to,processing and
accounting charges, and We charges which may be imposed upon Lessor by any Lender.Accordingly, if any Rent shall not be received by Lessor
within 5 days after such amount shall be due,then,without any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time
late charge equal to 10%of each such overdue amount or$100,whichever is greater. The Parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason of such late payment Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such overdue amount,nor prevent the exercise of any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder,whether or not collected,for 3 consecutive Installments of Base Rent,then
notwithstanding any provision of this Lease to the contrary,Base Rent shall,at Lessors option,become due and payable quarterly in advance.
13.5 Intarest Any monetary payment due Lessor hereunder, other than late charges, not recelved by Lessor, when due shall bear
interest from the 31 st day after It was due.The Interest("Interest")charged shall be computed at the rate of 10%per annum but shall not exceed the
maximum rate allowed by law. Interest Is payable in addition to the potential late charge provided for In Paragraph 13.4.
13.6 Breach by Lessor.
(a)Notice of Breach. Lessor shall not be deemed In breach of this Lease unless Lessor fails within a reasonable time to perform
an obligation required to be performed by Lessor. For purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after
receipt by Lessor,and any Lender whose name and address shall have been furnished Lessee in writing for such purpose,of written notice specifying
wherein such obligation of Lessor has not been performed;provided, however,that if the nature of Lessors obligation Is such that more than 30 days
are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereafter
diligently pursued to completion.
(b)Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days
after receipt of said notice,or If having commenced said cure they do not diligently pursue it to completion,then Lessee may elect to cure said breach
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at Lnessee's expense and offset from Rent the actual and reasonable cost to perform such cure,provided however,that such offset shall not exceed an
amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee's right to seek reimbursement from Lessor for any
such expense In excess of such offset.Lessee shall document the cost of said cure and supply said documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise
• of said power (collectively"Condemnation"), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or
possession,whichever first occurs. If more than 10%of the Building,or more than 25%of that portion of the Premises not occupied by any building,is
taken by Condemnation,Lessee may,at Lessee's option,to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of
such taking(or in the absence of such notice,within 10 days after the condemning authority shall have taken possession)terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,except that the Base Rent shall be reduced in proportion to the reduction In
utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the property of Lessor,whether such award
shall be made as compensation for diminution in value of the leasehold,the value of the part taken,or for severance damages;provided,however,that
Lessee shall be entitled to any compensation paid by the condemnor for Lessee's relocation expenses,loss of business goodwill and/or Trade Fixtures,
Without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations made to
the Premises by Lessee,for purposes of Condemnation only,shag be considered the property of the Lessee and Losses shall be entitled to any and all
compensation which is payable therefor. In the event that this Lease is not terminated by reason of the Condemnation,Lessor shall repair any damage
to the Premises caused by such Condemnation.
15. Brokerage Fees.
15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.0 above,and unless Lessor and the Brokers
otherwise agree in writing,Lessor agrees that: (a)if Lessee exercises any Option,(b)N Lessee or anyone affiliated with Lessee acquires any rights to
the Premises or other premises owned by Lessor and located within the same Project, if any, within which the Premises is located, (c) If Lessee
remains in possession of the Premises,with the consent of Lessor, after the expiration of this Lease, or id) If Base Rent is Increased, whether by
agreement or operation of an escalation clause herein,then, Lessor shag pay Brokers a fee in accordance with the fee schedule of the Brokers b
effect at the time the Lease was executed.
15.2 Assrsnptlon of Obligations. Any buyer or transferee of Lessors interest in this Lease shall be deemed to have assumed Lessor's
obligation hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.9,15,22 and 31. If Lessor fails to pay to Brokers any
amounts due as and for brokerage fees pertaining to this Lease when due,then such amounts shall accrue Interest. In addition, If Lessor Tails to pay
any amounts to Lessee's Broker when due, L omas's Broker may send written notice to Lessor and Lessee of such failure and If Lessor fails to pay
such amounts within 10 days after said notice,Lessee shall pay said monies to Its Broker and offset such amounts against Rent. In addition, Lessee's
Broker shag be deemed to be a third party beneficiary of any commission agreement entered Into by andfor between Lessor and Lessors Broker for the
limited purpose of collecting any brokerage fee owed.
15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person,firm,broker or finder(other than the Brokers,K any)in connection with this Lease,and that no one other than said
named Brokers Is entitled to any commission or finder's fee In connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect,
defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed broker,finder
or other similar party by reason of any dealings or actions of the indemnifying Party,including any costs,expenses,atomeys'fees reasonably incurred
with respect thereto.
• 16. Estoppel c(a) Each
(a) F�ch Party(as"Responding Party")shall within 10 days after written notice from the ocher Party(the"Requesting Parly�
execute,acknowledge and deliver to the Requesting Party a statement in writing in form similar to the then most current"Estoppel Certificate"form
published by the AIR Commercial Real Estate Association, plus such additional information, oomdmnstbn and/or statements as may be reasonably
requested by the Requesting Party.
(b)if the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period,the Requesting Party
may execute an Estoppel Certificate stating that: (I) the Lease is In full force and effect without modification except as may be represented by the
Requesting Party,(0)there are no uncured defaults in the Requesting Party's performance,and 011)If Lessor is the Requesting Party,not more than one
month's rent has been paid in advance. Prospective purchasers and ancumbranoers may rely upon the Requesting Partys Estoppel Certificate,and the
Responding Party shall be estopped from denying the truth of the facts contained in said Certificate. In addition, Lessee acknowledges that any failure
on its part to provide such an Estoppel Certificate will expose Lessor to risks and potentially muse lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel
Certificate In a timely fashion the monthly Base Rent shall be automatically Increased,without any requirement for notice to Lessee, by an amount
equal to 10%of the then existing Base Rent or$100,whichever is greater for remainder of the Lease. The Parties agree that such Increase in Base
Rent represents fair and reasonable compensation for the additional risk/costs that Lessor will Incur by reason of Lessee's failure to provide the
Estoppel Certificate. Such increase in Base Rent shall in no event constitute a waiver of Lessee's Default or Breach with respect to the failure to
provide the Estoppel Certificate nor prevent the exercise of any of the other rights and remedies granted hereunder.
(c)If Lessor desires to finance,refinance,or sell the Premises,or any part thereof, Lessee and all Guarantors shall within 10 days
after written notice from Lessor deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, Including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall
be received by Lessor and such lender or purchaser In confidence and shall be used only for the purposes herein set forth.
17. Definition of Lessor. The tern "Lessor' as used herein shall mean the owner or owners at the time in question of the fee title to the
Premises,or,If this is a subbase,of the Lessee's Interest in the prior lease. In the event of a transfer of Lessors title or interest In the Premises or this
Lease, Lassor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or
assignment and defivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
18. Severebillty. The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shag in no way affect the
validity of any other provision hereof.
19. Days. Unless otherwise specifically indicated to the contrary,the word"days"as used In this Lease shall mean and refer to calendar days.
20. Limitation on Liability. The obligations of Lessor under this Laws shall not constitute personal obligations of Lessor or its partners,
members,directors,officers or shareholders,and Lessee shall look to the Promises,and to no other assets of Lessor,for the satisfaction of any liability
of Lessor with respect to this Lease,and shall not seek recourse against Lessors partners,members,directors,officers or shareholders,or any of their
personal assets for such satisfaction-
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21.• Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed cr observed by the Parties under
this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any matter
mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and
• warrants to the Brokers that It has made,and is retying solely upon,its own Investigation as to the nature,quality,character and financial responsibility
of the other Party to this Lease and as to the use,nature,quality and character of the Premises. Brokers have no responsibility with respect thereto or
with respect to any default or breach hereof by either Party.
23. Notices.
23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be delivered In
person(by hand or by courier)or may be sent by regular,certified or registered mail or U.S.Postal Service Express Mail,with postage prepaid,or by
facsimile transmission,and shall be deemed sufficiently given if served in a manner speed in this Paragraph 23. The addresses rooted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or mailing of notices. Either Party may by written notice to the other specify a
different address for notice,except that upon Lessee's taking possession of the Premises,the Premises shall constitute Lessee's address for notice. A
copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as Lessor may from time to time hereafter
designate in writing.
23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card,or 4 no delivery date Is shown,the postmark thereon. If sent by regular mail the notice shall be deemed given 72
hours after the same Is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight
courier that guarantees next day delivery shall be deemed given 24 hours after delivery of the same to the Postal Service or courier. Notices
transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt(confirmation report from fax
machine is sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a Saturday, Sunday or legal holiday, It shall be
deemed received on the next business day. _
24. Waivers.
(a) No waiver by Lessor of the Default or Breach of any term,covenant or condition hereof by Lessee,shag be deemed a
waiver of any other tern,covenant or condition hereof,or of any subsequent Default or Breach by Lessee of the some or of any other terry covenant or
condition hereof. Lassoes consent to, or approval of, any act shag not be deemed to render unnecessary the obtaining of Lessor's consent to, or
approval of, any subsequent or similar act by Lessee,or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent.
(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee
may be accepted by Lessor on account of moneys or damages due Lessor,notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment
(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS
RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH
STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.
• (a) When entering Into a discussion with a real estate agent regarding a real estate transaction,a Lessor or Lessee should
from the outset understand what type of agency relationship or representation It has with the agent or agents In the transaction. Lessor and Lessee
acknowledge being advised by the Brokers in this transaction,as follows:
Q) Lassoes Agent. A Lessor's agent under a listing agreement with the Lessor ads as the agent for the Lessor
only. A Lassoes agent or subagent has the following affirmative obligations: To the Lessor. A fiduciary duty of utmost care, Integrity, honesty,and
loyalty in dealings with the Lessor. To the Lessee and the Lessor. a. Diligent exercise of reasonable skills and care In performance of the agent's
duties. b.A duty of honest and tair dealing and good faith. c.A duty to disclose all fads known to the agent materially affecting the value or desirability
of the property that are not known to, or within the diligent attention and observation of,the Parties. An agent is not obligated to reveal to either Party
any confidential information obtained from the other Party which does not involve the affirmative duties set forth above.
(ii) Lessee's Agent. An agent can agree to ad as agent for the Losses only. In these situations,the agent is not
the Lassoes agent,even If by agreement the agent may receive compensation for services rendered,either in fug or in part from the Lessor. An agent
acting only for a Lessee has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, Integrity, honesty, and loyalty in
dealings with the Lessee. To the Lessee and the Lessor; a. Diligent exercise of reasonable skills and rare in performance of the agent's duties. b.A
duty of honest and fair dealing and good faith. c.A duty to disclose all facts known to the agent materially affecting the value or desirability of the
property that are not known to, or within the diligent attention and observation of,the Parties. An agent is not obligated to reveal to either Party any
confidential Information obtained from the other Party which does not involve the affirmative duties set forth above.
(mil) Aaent Rabresentinn Both Lessor and Lessee. A real estate agent,either acting directly or through one or more
associate licenses,can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the knowledge and consent of both the
Lessor and the lessee.In a dual agency situation,the agent has the following affirmative obligations to both the Lessor and the Lessee:a.A fiduciary
duty of utmost care. Integrity, honesty and loyalty In the dealings with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as
stated above In subparagmphs(I)or(i). In representing both Lessor and Lessee,the agent may not without the express permission of the respective
Party,disclose to the other Party that the Lessor will accept rent In an amount less than that Indicated in the listing or that the Lessee Is willing to pay a
higher rent than that btfered. The above duties of the agent in a real estate transaction do not relieve a Lessor or Lessee from the responsibility to
protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the
transaction. A real estate agent is a person qualified to advise about real estate. If legal or lax advice is desired,consult a competent professional.
(b) Brokers have no responsibility with respect to any default or breach hereof by either Party.The Parties agree that no
lawsuit or other legal proceeding involving any breach of duty, error or omission relating to this Lease may be brought against Broker more than one
year after the Start Date and that the liability(including court costs and attorneys'fees), of any Broker with respect to any such lawsuit and/or legal
proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided,however,that the foregoing limitation on each Broker's
liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor and Lessee agree to Identify to Brokers as"Confidential"any communication or information given Brokers that is
considered by such Party to be confidential.
26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or termination of
this Lease. In the event that Lessee holds over,then the Base Rent shall be Increased to 150%of the Base Rent applicable immediately precede
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expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shag be deemed exclusive but shall, wherever possible, be cumulative with all
other remedies at law or in equity.
28. Covenants and Conditions; Construction of AgreemenL All provisions of this Lease to be observed or performed by Lessee are both
• covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a
part of this Lease. Whenever required by the context, the singular shall Include the plural and vice versa. This Lease shall not be construed as if
prepared by one of the Parties,but rather according to its fair meaning as a whole,as If both Parties had prepared it.
29. BindingE •Choice of Law. This Lease shall be binding upon the Parties their personal representatives,successors and assigns and
Effect; 9 Po Pe rep �
be governed by the laws of the State In which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are boated.
30. Subordination;Attomment;Non-Disturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease,mortgage,deed
of trust,or other hypothecation or security device(collectively,"Security Device"),now or hereafter placed upon the Premises,to any and all advances
made on the security thereof,and to all renewals,modifications, and Wenslons thereof. Lessee agrees that the holders of any such Security Devices
(in this Lease together referred to as"Lender")shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any
Lender may elect to have this Lease and/or any Option granted hereby superior to the lien of its Security Device by giving written notice thereof to
Lessee, whereupon this tease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 Attomment. In the event that Lessor transfers title to the Premises,or the Premises are acquired by another upon the foreclosure
or termination of a Security Devise to which this Lease is subordinated(1)Lessee shall, subject to the nondisturbanm provisions of Paragraph 30.3,
attom to such new owner, and upon request, enter Into a now base, containing all of the terms and provisions of this Lease,with such new owner for
the remainder of the term hereof,or,at the election of the new owner,this Lease will automatically become a new lease between Lessee and such new
owner, and (to Lessor shall thereafter be relieved of any further obligations hereunder and such new owner shall assume all of Lessors obligations,
except that such new owner shall not (a)be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisition of
ownership;(b)be subject to any offsets or defenses which Lessee might have against any prior lessor, (c)be bound by prepayment of more than one
month's rent,or(d)be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lane, Lessee's
subordination of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement(a"Non-Disturbance Agreement")
from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises,and this Lease,including any options to extend
the term hereof,will not be disturbed so long as Losses is not in Breach hereof and acorns to the record owner of the Premises. Further,within 60
days after the execution of this Lease, Lessor shall, if requested by Lessee, use Its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's option, directly contact Lender and attempt to negotiate for the
execution and delivery of a Non-Disturbance Agreement.
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents;
provided, however,that, upon written request from Lessor or a Lender In connection with a sale,financing or refinancing of the Premises,Lessee and
• Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attomment andfor
Non-Disturbance Agreement provided for herein.
31. Attorneys'Feea. If any Party or Broker brings an action or proceeding Involving the Premises whether founded in tort,contract or equity,or
to declare rights hereunder,the Prevailing Party(as hereafter defined)in any such proceeding,action,or appeal thereon,shall be entitled to reasonable
attorneys'fees. Such fees may be awarded in the same suit or recovered in a separate suit whether or not such action or proceeding is pursued to
decision or judgment The term, "Prevailing Party"shall include,without frmitatlon, a Party or Broker who sutmtantially obtains or defeats the relief
sought,as the case may be,whether by compromise,settlement,judgment,or the abandonment by the other Party or Broker of its claim or defense.
The attomeys'fees award shall not be computed in accordance with any court fee schedule,but shall be such as to fully reimburse all atomeys'fees
reasonably Incurred. In addition, Lessor shall be entitled to attorneys'Tees, costs and expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith,whether or not a legal action is subsequently commenced in connection with such Default or resulting
Breach($200 Is a reasonable minimum per occurrence for such services and consultation).
32. Lessors Access;Showing Premises; Repairs. Lessor and Lessors agents shag have the right to enter the Premises at any time, in the
case of an emergency,and otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers,
lenders,or tenants,and making such alterations,repairs,Improvements or additions to the Premises as Lessor may deem necessary or desirable and
the erecting,using and maintaining of utilities,services,pipes and conduits through the Premises and/or other premises as long as there L9 no material
adverse effect to Lessee's use of the Premises. All such activities shall be without abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct nor permit to be conducted, any auction upon the Premises without Lessor's prior written consent.
Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs. Lessor may pbw on the Premises ordinary"For Sale"signs at any time and ordinary"For Lease"signs during the last 6 months of
tha tens hereof. Except for ordinary'Ycr sublease"signs,Lessee shall not place any sign upon the Premises without Lessors prior written consent.All
signs must comply with all Applicable Requirements.
35. Termination;Merger. Unless specifically stated otherwise in writing by Lessor,the voluntary or other surrender of this Lease by Lessee,the
mutual termination or cancellation hereof,or a termination hereof by Lessor for Breach by Lessee,shall automatically terminate any sublease or lesser
estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessors failure within 10 days
following any such event to elect to the contrary by written notice to the holder of any such lesser Interest, shall constitute Lessors election to have
such event constitute the termination of such interest.
36. Consents. Except as otherwise provided herein,wherever in this Lease the consent of a Party Is required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Lassoes actual reasonable costs and expenses(including but not limited to architects',
attorneys', engineene and other consultants' fees) Incurred In the consideration of, or response to, a request by Lessee for any Lessor consent,
including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon
receipt of an invoice and supporting documentation therefor. Lassoes consent to any act, assignment or subletting shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by lessor at the time of such consent The failure to specify herein any particular-
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condition to Lessors consent shall not preclude the imposition by Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination,the determining party shall furnish its reasons in writing and
In reasonable detail within 10 business days following such request.
• 37. Guarantor.
37.1 Execution. The Guarantors,If any,shall each execute a guaranty in the form most recently published by the AIR Commercial Reel
Estate Association.
37.2 Defaut. It shall constitute a Default of the Lessee if any Guarantor fails or refuses,upon request to provide: (a)evidence of the
execution of the guaranty, including the authority of the party signing on Guarantors behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such guaranty, (b) current financial statements, (0) an
Estoppel Certificate,or(d)written confirmation that the guaranty is still in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on
Lessee's part to be observed and performed under this Lease,Lessee shall have quiet possession and quiet enjoyment of the Premises during the tern
hereof.
39. Options. If Lessee Is granted any Option,as dented below,then the following provisions shall apply:
39.1 Definition. "Option"shall mean: (a)the right to extend or reduce the term of or renew this Lease orto extend or reduce the term
of or renew any lease that Lessee has on other property of Lessor,(b)the right of first refusal or first offer to Was either the Premises or other property
of lessor,(c)the right to purchase,the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor.
392 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee,and cannot
be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is In full possession of the Premises and, if
requested by Lessor,with Lessee certifying that Lessee has no Intention of thereafter assigning or subletting.
39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot be
exercised unless the prior Options have been validly exercised.
39.4 Effect of Default on Options.
(a)Lessee shall have no right to exercise an Option: (1)during the period commencing with the giving of any notice of Default and
continuing until said Default is cured, (II)during the period of time any Rent Is unpaid (without regard to whether notice thereof Is given Lessee), (Iit)
during the time Leases is in Breach of this Lease,or CN)in the event that Lessee has been given 3 or more notices of separate Default,whether or not
the Defaults are cured,during the 12 month period Immediately preceding the exercise of the Option.
(b)The period of time within which an Option may be exercised shall not be extended or enlarged by reason of Lessee's Inability to
exercise an Option because of the provisions of Paragraph 39.4(a).
(c)An Option shall terminate and be of no further force or effect,notwithstanding Lessee's due and timely exercise of the Option,If,
after such exercise and prior to the commencement of the extended term or completion of the purchase,(I)Lessee fails to pay Rent for a period of 30
days after such Rent becomes due(without any necessity of Lessor to give notice thereof),or(h)if Lessee commits a Breach of this Lease.
40. Multiple Buildings. If the Premises are a part of a group of buildings controlled by Lessor. Lessee agrees that t will abide by and conform to
all reasonable rules and regulations which Lessor may make from time to time for the management,safety, and rare of said properties, Including the
care and cleanliness of the grounds and including the parking, loading and unloading of vehicles, and to cause its employees, suppliers, shippers,
customers,contractors and invitees to so abbe and conform. Lessee also agrees to pay its fair share of common expenses incurred in connection with
• such rules and regulations.
41. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or
other security measures,and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes au responsibility for the protection of
the Premises.Lessee,its agents and invitees and their property from the ads of third parties.
42. Reservations. Lessor reserves to itself the right, from time to time, to grant,without the consent or joinder of Lessee, such easements,
rights and dedications that Lessor deems necessary, and to cause the recordation of parcel maps and restrictions,so long as such easements,rights,
dedications, maps and restrictions do not unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate any such easement rights,dedication,map or restrictions.
43. Performance Under Protest. If at any time a dispute shag arise as to any amount or sum of money to be paid by one Party to the other
under the provisions hereof;the Party against-whom the obligation to pay the money is asserted shall have the right to make payment"under protest"
and such payment shall nit be regarded as a voluntary payment and there shall survive the right on the part of said Party to institute sut for recovery of
such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thered,saki Party shag be
entitled to recover such sum or so much thereof as it was not legally required to pay.A Party who does not initiate suit for the recovery of sums paid
"under protest"within 6 months shall be deemed to have waived Its right to protest such payment.
4C Authority; Multiple Parties;Execution.
(a) If ether Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual
executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on its behalf.
Each Party shall,within 30 days after request,deliver to the other Party satisfactory evidence of such authority.
(b) If this Lease is executed by more than one person or entity as"Lessee",each such person or entity shall be jointly and
severally liable hereunder. it is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other
document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of the named Lessees had executed such
document.
(c) This Lease may be executed by the Parties in counterparts,each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
45. Conflict Any conflict between the printed provisions of this Lease and typewritten or handwritten provislons shall be controlled by the
typewritten or handwritten provisions.
46. Offer. Preparation of this Lease by either Party or their agent and submission of same to the other Party shall not be deemed an offer to
lease to the other Party. This Lease is not Intended to be binding until executed and delivered by all Parties hereto.
47. Amendments. This Lease may be modified only in writing,signed by the Parties In interest at the firm of the modification. As long as they
do not materially charge Lessee's obligations hereunder,Lessee agrees to make such reasonable non-monetary modifications to this Lease as may be
reasonably required by a Lender In connection with the obtaining of normal financing or refinancing of the Premises.
48. Walver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.
PAGE 18 OF 17 P �
INITIALS INITIALS
02001-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-17-2113E
4S.' Arbitration of Disputes. An Addendum requiring the Arbitration of disputes between the Parties and/or Brokers arising out of this Lease❑
is m is not attached to this Lease.
50, Accessibility;Americans with Disabilities Act.
• (a) The Premises: M have not undergone an Inspection by a Certified Access Specialist(CASp). 0 have undergone an
inspection by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction-related accessibility
standards pursuant to California Civil Code §55.51 at seq. ❑ have undergone an inspection by a Certified Access Specialist (CASp) and it was
determined that the Premises did not meet all applicable construction-related accessibility standards pursuant to California Civil Code§55.51 at seq.
(b) Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's specific use of the
Premises,Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any similar legisle6on. In the event that
Lessee's use of the Premises requires modifications or additions to the Premises in order to be in ADA compliance,Lessee agrees to make any such
necessary modifications and/or additions at Lessee's expense.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN,AND
BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT,AT THE TIME THIS LEASE IS EXECUTED,THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE
INTENT AND PURPOSE OF 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 CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION
SHOULD INCLUDE BUT NOT BE LIMITED TO:THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PREMISES,
THE STRUCTURAL INTEGRITY,THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,AND THE SUITABILITY 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 parties hereto executed this Lease at the p ce and on the dates above pecmrelsignatures
x Execute�d//a�t:� � ��, �, h ��ed at: !/GS✓ (i
XOn: 6 i /�2D�3 XOn:/6
By LESSOR: �— By LESSEE:
• RJR Investment Group No. 2, a California William E. Cooper
General Partnership
XNa Rosen Name Printed: Willi E. o er
an aging e ezal Partner 'XTltle. d� n aL2 I
BY SY
Name Printed: Name Printed:
Title: Title:
Address: 73-134 Ajo Lane, Palm Desert, CA 92260 Address: 2417 Tuscany Heights Drive,
Palm Springs, CA 92262
Telephone: (7760) 250-8705 Telephone: (954)612-0860
Facsimile:(760) 773-9803 Facsimile:I—)
Email: jorosen@parkinsonsresource.org Email:williamcooper39@msn.com
Email: Email:
Federal ID No. 95-3 4 312 5 8 Federal ID No.
BROKER: BROKER:
Baxley Properties, Inc.jW PAGE 18 OF/7 0%/4!G
INITIALS INITIALS
02001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG•117-2113E
Att: O.B. "Barney" Upton III Alt:
• Title: Broker Associate Title:
Address: 73-712 Alessandro, Suite B-4 Address:
Palm Desert, CA 92260
Telephone:(?60)7 7 3-3 31 D Telephone:(_)
Facsimile:(7 60)7 7 3-3013 Facsimile:(_)
Email:barney@baxleyproperties.com _ Email:
Federal ID No. 2 0-0 62 9005 Federal ID No.
Broker/Agent DRE License#: 00404021 BrokedAgent DRE License#:
NOTICE: These forms are often modified to meet changing requirements of law and Industry needs. Always write or call to make sure you
are utllWng the most current form: AIR Commercial Real Estate Association, 600 N Brand Blvd,Suits 900,Glendale,CA 91203.
Telephone No.(213)687-8777. Fax No.:(213)687.8616.
®Copyright 2001 -By AIR Commercial Real Estate Association. All rights reserved.
No part of these works may be reproduced In any form without permission in writing.
•
• PAGE 17 OF 17
INITIALS INITIALS
02001-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM STG-17.2113E
ADDENDUM
Date: September 20, 2013
By and Between (Lessor) RJR investment Group No. 2
(Lessee)William E. Cooper
Address of Premises: 63-738 Orr Way, Palm Springs, CA
Paragraph 51 - 56
In the event of any conflict between the provisions of this Addendum and the printed provisions of the Lease, this Addendum shall
control.
51. MOLD DISCLOSURE
Lessee acknowledges receipt of the documents listed below advising of the existence of mold In the
ofRce/reetroom/kitchen area of the Premises and subsequent remedlation actions and testing results:
• 1) Interpretive Report Mold Testing dated June 10, 2009 prepared by Environmental Safeguard
Professionals, Inc. Dba CEHI, Palm Springs, CA.
2) Chain of Custody: Microscopic Examination of Fungal Spores, Fungal Structures, Hyphae, and Other
Particulates from Swab Samples; and Cyclex Analysis of fungal Spores & Particulates by Optical Microscopy
Reports dated June 11, 2009 prepared by LA Testing, South Pasadena, CA.
3) (Post Remediation) Interpretive Report Mold Testing dated April 19, 2011 prepared by Environmental
Safeguard Professionals, Inc. Dba CEHI, Palm Springs, CA.
4) Expanded Fungal Report dated April 20,2011 prepared by LA Testing, Garden Grove, CA.
52. PAYMENTT"ROKERS
Upon execution of this Lease, Lessor shall pay a brokerage leasing commission to 0axley Properties, Inc. equal
to six percent (67.) of the f3ase Rent, which amount shall be paid fifty percent (50%) upon execution of the
Lease and fifty percent(50%) upon Commencement of the Lease Term.
In the event Lessee exercises the Option to Extend provided in paragraph 54, Lessor shall pay a brokerage
leasing commission to 5axley Properties, Inc. equal to six percent (670) of the Base bent for the twelve (12)
/month extension term,which amount shall be pald upon Commencement of the option term.
• \ PAGE t OF 2
INITIALS INITIALS
Wthe event Le55ee, exercises the Right of First Refusal to Purchase provided in paragraph 55, Lessor Shall
pay a brokerage sales commission to Baxley Fropertles, Inc. equal to six percent (6°b) of the gross sales price
• less a credit to Lessor in the amount of the unamortized balance, if any, of the leasing commission previously
paid. Said commission shall be paid at and through escrow at closing.
53. LE550WS WORK
Lessor, at Lessor's sole cost and expense, shall perform the following repairs prior to, or as soon as possible
following,the Commencement Date of the Original Term of this Lease:
a) Calk the entire kitchen counter top to the wall with a latex based calk.
b) Repair, patch and paint the sash area of the window In the West office.
c) Install 3 new filters to Air Conditioning returns
d) Build a solid "pony"wall to the interior of the structure and strapp the water heater to the"pony'wall.
e)Tighten down the toilets in the office and warehouse bathrooms.
f) Ground the ground buss bar to the panel box in the service panel.
g)Tighten the GFCI plug in the bathroom.
h) Replace the broken receptacle plate outside the office in the warehouse
i) Using expandable insulation foam, fill in the gaps between the roll up door tracks and the wall in the
warehouse.
J) AdJuot the self-closing mechanlsm on the "man" door between the office and warehouse to conform to fire
code.
k) Repair or replace,where needed, insulation in the warehouse ceiling with radiant barrier paper.
1)Tack down the carpet near the sink area in the kitchen.
• m) Repair or replace,where needed, exterior lights.
n) Calk expanolon joints In the warehouse.
o) Update fire extingul5hertag5 and service ao required.
p) Repair air conditioning and heating units to include: two coolers to be re packed and cleaned with new belts
and pumps and the cooler pans cleaned and Sealed.
• ` PAGE 2 OF 2
IINNMAALLSS INITIALS
OPTION(S) TO EXTEND
STANDARD LEASE ADDENDUM
Dated September 20, 2013
By and Between (Lessor) RJR Investment croup No. 2
By and Between (Lessee) William E. Cooper
Address of Premises: 63-736 Orr Way, Palm Springs, CA
Paragraph 54
A. OPTION(S)TO EXTEND:
• Lassor hereby grants to Lessee tha option to extend the term of this Lease for 1 additional 12
month period(s)commencing when the prior term expires upon each and all of the following terms and conditions:
n In order to exercise an option to extend,Lessee must give written notice of such election to Lessor and Lessor must receive the same at
least 4 but not more than 6 months prior to the date that the option period would commence,time being of the essence. if proper
notlFlcetion of the exercise of an option is not given and/or received,such option shall automatically expire. Options(If there are more than one)may
only be exercised consecutively.
(Id) The provisions of paragraph 39,including those relating to Lessee's Default set forth In paragraph 39.4 of this Lease, are conditions of
this Option.
(li) Except for the provisions of this Lease granting an option or options to extend the term, all of the terms and condtions of this Lease
except where specifically modified by this option shall apply.
Cw) This Option is personal to the original Lessee,and cannot be assigned or exercised by anyone other than said original Lessee and only
while the original Lessee is in full possession of the Premises and without the intention of thereafter assigning or subletting.
(v) The monthly rent for each month of the option period shall be calculated as follows,using the method(s)indicated below:
(Check Mathod(s)to be Used and Fill In Appropriately)
❑ 1. Cost of Living Adjusboengs)(COLA)
a. On(Fill in COLA Dates):
the Base Rent shall be adjusted by the change, if any, from the Base Month specified below, in the Consumer Price Index of the Bureau of Labor
Statistics of the U.S.Deparbnent of Labor for(select one): ❑CPI W(Urban Wage Earners and Clerical Workers)or❑CPI U(All Urban Consumers),
for(Fill in Urban Area):
All Items(1962-1984=100),herein referred to as'CPI"—
b. The monthly rent payable in accordance with paragraph Ala. of this Addendum shall be calculated as follows:the Base Rent set forth in
paragraph 1.5 of the attached Lease, shall be multiplied by a fraction the numerator of which shall be the CPI of the calendar month 2 months prior to
the month(s)specified In paragraph A-La. above during which the adjustment is to take effect, and the denominator of which shall be the CPI of the
calendar month which Is 2 months prior to(select one): 0 the first month of the tens of this Lease as set forth in paragraph 1.3 rBase
• IL PAGE 1 OF 3
INITIALS INITIALS
02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE3-0/00E
(Fill in Other"Base Month'):
The sum so calculated shag constitute the new monthly rent hereunder,but in no event,shall any such new monthly rent be less than the rent payable
for the month immediately preceding the rent adjustment.
• r~ In the event the compilation andfor publication of the CPI shall be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the Index most nearly the same as the CPI shag be used to make such calculation. In the event that the Parties cannot
agree on such alternative index,then the matter shall be submitted for decision to the American Arbitration Association In accordance with the then
rules of said Association and the decision of the arbitrators shall be binding upon the parties. The cost of said Arbitration shall be paid equally by the
Parties.
❑ If. Market Rental Value Adjustment(s)(MRV)
a. On(Fill in MRV Adjustment Date(s))
the Base Rent shall be adjusted to the"Market Rental Value"of the property as follows:
1) Four months prior to each Market Rental Value Adjustment Date described above,the Parties shall attempt to agree upon what the new
MRV will be on the adjustment date. If agreement cannot be reached,within thirty days,then:
(a) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to establish the new MRV within the next 30
days. Any associated costs will be split equally between the Parties,or
(b) Both Lessor and Lessee shall each immediately make a reasonable detemnination of the MRV and submit such determination,in
writing,to arbitration in accordance with the following provisions:
() Wdhin 15 days thereafter,Lessor and Lessee shall each select an O appraiser or❑broker C Consultent"-check one)of their
choice to ad as an arbitrator. The two arbitrators so appointed shall immediately select a third mutually acceptable Consultant to ad as a third
arbitrator.
(g) The 3 arbitrators shall within 30 days of the appointment of the third arbitrator reach a decision as to what the actual MRV for
the Premises is,and whether Lessor's or Lessee's submitted MRV is the closest thereto. The derision of a majority of the arbitrators shall be binding
on the Parties. The submitted MRV which Is determined to be the closest to the actual MRV shall thereafter be used by the Parties.
(g) If either of the Parties fails to appoint an arbitrator within the specified 15 days,the arbitrator timely appointed by one of them
shall reeds a decision on his or her own,and said decision shall be binding on the Parties.
(iv) The entire coat of such arbitration shall be paid by the party whose submitted MRV is not selected,is.the one that Is NOT the
closest to the actual MRV.
• 2) Notwithstanding the foregoing, the new MRV shall not be Ins than the rent payable for the month Immediately preceding the rent
adjustment.
b. Upon the establishment of each New Market Rental Value:
1) the new MRV will become the new"Base Renr for the purpose of calculating any further Ahustments,and
2) the first month of each Market Rental Value term shall become the new "Base Month" for the purpose of calculating any further
Adjustments.
E3 Ill. Fixed Rental Adjustment(s)(FRA)
The Base Rent shall be increased to the following amounts on the dates set forth below:-
On(Fill in FRA Adjustment Date(s)): The New Base Rent shall be:
October 15, 2014 $2,773.58
B. NOTICE:
Unless specified otherwise herein, notice of any rental adjustments, other than Fixed Rental Adjustments, shall be made as Specified in
paragraph 23 of the Lease.
C. BROKER'S FEE:
The Brokers shall be paid a Brokerage Fee for each adjustment specified above in accordance with paragraph 15 of the tease o
• PAGE 2OF3
INITIALS INITIALS
®2W0-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE-3-g(00E
applicable,paragraph 9 of the Sublease.
NOTICE: These forms are often modified to meet changing requirements of law and Industry needs. Always write or call to make sure you
are uUlWng the most current form: AIR Commercial Real Estate Association, 500 N Brand Blvd,Sulte 900,Glendale,CA 91203.
• Telephone No.(213)687-8777. Fax No.:(213)687-8616.
•
• PAGE 3 OF 3
INITIALS
INITIALS
02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM OE-3-/00E
• • s
RIGHT OF FIRST REFUSAL TO PURCHASE
STANDARD LEASE ADDENDUM
Dated September 20, 2013
By and Between (Lessor) RJR Investment Group No. 2
(Lessee) William E. Cooper
Address of Premises: 63-73B Orr Way, Palm Springs, CA
Paragraph 55
(a) Lessor shall not, at any time prior to the expiration of the term of this Lease, or any extension thereof, sell the Premises, or any
• Interest therein,without first giving written notice thereof to Lessee,which notice is hereinafter referred to as"Notice of Sale".
(b) The Notice of Sale shall include the exact and complete terms of the proposed sale and shag have attached thereto a copy of the
bona fade offer and counteroffer,If any,duty executed by loth Lessor and the prospective purchaser.
(c) For a period of 12 calendar days after recelpt by Lessee of the Notice of Sale, Lessee shall have the right to give written notice to
Lessor of Lessee's exercise of Lessee's right to purchase the Premises,the interest therein proposed to be sold, or the property of which the Premises
are a part, on the same terms, price and conditions as set forth In the Notice of Sale. In the event that Lessor does not receive written notice of
Lessee's exercise of the right herein granted within said 12 day period, there shall be a conclusive presumption that Lessee has elected NOT to
exercise Lessee's right hereunder,and Lessor may complete the sale to the prospective purchaser,on the same terms set forth In the Notice of Sale.
(d) In the event that Lessee declines to exercise its right of first refusal after receipt of the Notice of Sale,and,thereafter, Lessor and
the prospective purchaser modify by more than 5%,(i)the sales price,or(t)the amount of down payment,or if there is a material change in any seller
financing offered,or in the event that the sale is not consummated within 180 days of the date of the Notice of Sale,then Lessee's right of first refusal
shag reapply to said transaction.
(a) In the event that Lessee declines to exercise Its right of first refusal after receipt of the Notice of Sale,and,thereafter,the proposed
transfer or sale is not consummated,the Lessee's right of first refusal shag apply to any subsequent transaction. If,however,said transfer or sale is,in
fact,completed,then said right shall be extinguished and shall not apply to any subsequent transactions.
(f) Notwithstanding the above,this right of first refusal Is intended to apply only to voluntary transfers involving third party transferees.
This right of first refusal shall not, therefrom, apply: where the Premises are taken by eminent domain or sold under threat of condemnation, to
intre-family or intro-ownership transfers,to transfers by Lessor to a trust created by Lessor,or,If Lessor is a trust,to transfers to a trust beneficiary.
(g) NOTE: This right of first refusal cannot be exercised: ()during the period commencing with the giving of any notice of Default and
continuing until said Default is cured, (II)during the period of time any Rem is unpaid(without regard to whether notice thereof is given Lessee), pl)
during the time Lessee is In Breach of this Lease, or(iv) in the event that Lessee has been given 3 or more notices of Default, whether or not the
Defaults are cured,during the 12 month period immediately preceding the exercise of the right of first refusal.
• PAGE 1 OF 2
INITIALS INITIALS
020M-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM FR-4-8/08E
NOTICE: These forms are often modified to meet changing requirements of law and industry needs. Always write or call to make sure you
are ut11127ng the most current form: AIR Commercial Real Estate Association, 600 N Brand Blvd,Suite 900,Glendale,CA 91203.
Telephone No.(213)687.8777. Fax No.:(213)$87.8616.
•
• PAGE 2 OF 2 Y
INITIALS INITIALS
02000-AIR COMMERCIAL REAL ESTATE ASSOCIATION FORM F114-8106E
• SUPPLEMENT TO ADDENDUM TO AIR COMMERCIAL REAL ESTATE ASSOCIATION STANDARD
INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-GROSS DATED SEPTEMBER 20,2013 BY AND
BETWEEN RJR INVESTMENT GROUP NO.2("LESSOR")AND WILLIAM E.COOPER('LESSEE-)FOR THE
PROPERTY KNOWN AS 63-738 ORR WAY,PALM SPRINGS,CA
56. In addition to the documents referenced in paragraph 51 of the ADDENDUM, Lessee acknowledges
receipt of the documents listed below disclosing the results of environmental testing and remedial
action performed at the subject Premises in June,2012:
1. Expanded Fungal Report dated June 14,2012 prepared by LA Testing,•Garden Grove, CA.
2. Expanded Fungal Report dated June 19,2012 prepared by LA Testing,Garden Grove,CA.
3. Scope Evaluation and Sampling Results dated June 21, 2012 prepared by G.E.E.S.P., Inc.,Palm
Springs,CA.
4. Scope Evaluation and Sampling Results dated June 26,2012 prepared by G.E.E.S.P., Inc,Palm
Springs,CA.
S. Expanded Fungal Report dated June 26,2012 prepared by LA Testing,Garden Grove,CA(order
• 331209149).
6. Expanded Fungal Report dated June 26,2012, prepared by LA Testing,Garden Grove,CA(order
331209150).
Lessee is advised to have its own experts review the reports,explain to Lessee the significance of the
test results and confirm to the Lessee that the Premises are in acceptable condition for Lessee's
occupancy on October 1,2013. Lessor will provide access to Lessee's experts should Lessee desire to
perform its own environmental tests.
Lessee is to advise Lessor if Lessee suspects any mold or other environmental health issue relating to the
subject Premises at any time during its occupancy of the Premises.
INI I — INITIALS
•
.•-..�ALIFQI NIA IDEPffIFICA f _
W F2344QQQtl"
• K 20'I6
L 'i
N COOPER
rN WILLIAM E
2417 TUSCANY HEIGHTS
PALM SPRINGS,CA 9225
GGe 0511811962
x
0518T962
f - / SEX M H EYES SRN
HGT 5-10" WG7 }7516 .. ISS
ob nro5/1aIDBl91v9BFgis -.1110 9 2 010
•
•
IU RIVERSIDE COUNTY SECURED PROPERTY TAX BILL vury&EN1, IKnADVKeK 03572,
4080 Lernon St(Isl Flour)Riverside,California
For Fiscal Year July 1,2013 through,June 30,2014 (P.O.Box 12005.Riverside,CA 92502-2205)
Offices in Riverside,Palm Springs and Temecula Telephone: (951)955-3900
Visit our website: www.riversidetaxinfo.com or,from area codes 951 and 760 only
IMPORTANT INFORMATION ON REVERSE SIDE toll free: 1 (877) RIVCOTX(748-2689)
-_-�, - --
r tY 504161017-7 .39 ACRES IN LOT 3 MB 385/097 TR 28495 ASSESSMENT NUMBER
.504161017-7
Address 2417 TUSCANY HEIGHTS DR PALM SPRINGS 92262 Tax Rate Area Bill Number
Owner, JANUARY 1, 2013 PASCARELLA, EDWARD L & COOPER, WILLI 011-003 000338270
PASCARELLA, EDWARD L & COOPER, WILLIAM E ��
163 ROYAL PALM DR All question.a bout o 9 ers p20 u or
FORT LAUDERDALE, FL 3 3 3 01-1410 exemptions must be directed to the
Riverside County Assessor at(951)955-6200.
Illltll�lltt�l�ll���tllrltllttl�'ll"��"�'��I���'ll'lll'1��'�Itl
UNPAID PR10R-YEAR TAXES
(See hem it6 on reverse) q
Tax _...._._ ___.._ _- 9 Tux bdl requuued by l-oan kRrolilicaann Multiple Bilk NONE
..CHAR,;ES LEVIED 13Y PAXIN('AGENCIES-(See[ep3. 4 ne reeerse)_I,. AMQUNI' _ LAND 273, 291
1% TAX LIMIT PER PROP 13 8281 .56 STRUCTURES 554, 865
PALM SPRINGS UNIF B & I 1992-A (760) 416-6130 1073.37 TRADE FIXTURES
DESERT COMMUNITY COLLEGE (760) 674-3776 165.21 TREES&VINES
DESERT WATER AGENCY (760) 323-4971 ! 828.15
PLO CNTL STORMWATER/CLEANWATER (800) 439-6553@ 3.70 BUSINESS PERSONAL.
CSA 152-PLM SPRINGS STORMWATER (888) 683-5234@ 9.50 PROPERTY
CITY OF PALM SPRINGS SEWER CHG (760) 323-81669 168.00
COACHELLA VALLEY MOSQUITO & RIFA (866) 807-6864Cw 6.06
FVLLVALUE 828, 156
EXEMPTIONS
NErvALUE - 828, 156
TAX RATE PER$100 VALUE 1.24956
TAXES $10, 348 .30
• SPc&- ,.ed Ch nL,ge $187.26
k tixM Chn,gcs
TOTAL AMOUNT _ $10, 535.56
If over$50,000,see
Item HI on reverse
$5, 267 .78 $5, 267 .78
Add 10 Add Ids,
penally aller penally plus cost
12/10/2013 a0cr04/I0/2014
PLEASE KEEP TOP PORTION FOR FOUR RECORDS $5, 267. 78 $5 , 267 . 78
(NO RECEIPTS GVI_i.BE iSSQED -YOf,R C'Ai; EL' ED C-FT=C< IS YOUR Rc.CT IPD
•
3626201 Gb
FLED
Articles of Incorporation
of DEC 17 2M
Southern C's, Inc. tC�
The undersigned, being over the age of eighteen years,in order to form a[81'i3'dt`atiattPeitr+t�llMtbia.
provisions of the California Corporation Code, herby certifies as follows:
I
The name of the corporation, hereinafter referred to as the "Corporation," is Southern C's, Inc.
11
This corporation is a nonprofit Mutual Benefit Corporation organized under the Nonprofit Mutual
Benefit Corporation Law.The purpose of this corporation is to engage in any lawful act or activity, other
than credit union business, for which a corporation may be organized under such law. The specific
purpose of this corporation is limited to providing a means for facilitating and coordinating transactions
between members. The corporation cannot purchase from or sell to non-members.
III
The name and address of the initial agent for service of process:
• William Cooper
63-738 Orr Way
Palm Springs,CA 92262
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The initial street address and mailing address of the corporation is 63-738 Orr Way, Palm Springs, CA
92262.
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Notwithstanding any of the above statements of purposes and powers, this corporation shall not,
except to an insubstantial degree, engage in any activities of exercise any powers that are not in
furtherance of the specific purposes of this corporation.
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MICHAEL CINDRICH, INCORPORATOR
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DISPLAY CONSPICUOUSLY AT PLACE OF BUSINESS FOR WHICH ISSUED
CALIFORNIA STATE BOARD OF EQUALIZATION
SELLER'S PERMIT
Of
ACCOUNT NUMBER
04/15/2014 SR EHC 102-555376
NOACE TO PERMJTTEE
You arc required to obey all
SOUTHERN C'S, INC. Federal and State laws that
regulate or control your
63-738 ORR WAY business. This perhit does
PALM SPRINGS, CA 92262 not allow you to do
otherwise.
L J
IS HEREBY AUTHORIZED PURSUAN I TO SALES MD USE TAX LAW TO ENGAGE IN THE
BUSINESS Of SOILING TANGIBLE PERSONAL PROPERTY AT TI IE ABOVE LOCATION.
THIS PERMIT IS VALID ONLY AT THE ABOVE ADDRESS.
THIS PERMIT IS VALID UNTIL REVOKED OR CANCELED AND IS NOT TRANSTERABLE.IF YOU SELL YOUR BUSINESS
OR DROP OUT OF A PARTNERSHIP,NOTIFY US OR YOU COULD BE RESPONSIBLE FOR SALES AND USE TAxE$ Not valid at any other address
OWED BY THE NEW OPERATOR OF THE BUSINESS.
For general tax questions,please call our Information Center at 800-400-7115.
For information on your rights,contact the Taxpayers'Rights Advocate Office at 888-324-2798 or 916-324-2798.
ROE-442-R REV.15(2-06)
A MESSAGE TO OUR NEW PERMIT HOLDER
• As a seller, you have rights and responsibilities under the Sales and Use Tax Law. In order to assist you in your
endeavor and to better understand the law,we offer the following sources of help:
• Visiting our website at www.boe.ca.gov
• Visiting a district office
• Attending a Basic Sales and Use Tax Law class offered at one of our district offices
• Sending your questions in writing to any one of our offices
• Calling our toll-free Information Center at 800-400-7115
As a seller, you have the right to issue resale certificates for merchandise that you intend to resell.Conversely,you
have the responsibility of not misusing resale certificates.While the sales tax is imposed upon the retailer,
• You have the right to seek reimbursement of the tax from your customer
• You are responsible for filing and paying your sales and use tax returns timely
• You have the right to be treated in a fair and equitable manner by the employees of the Board
• You are responsible for following the regulations set forth by the Board
As a seller, you are expected to maintain the normal books and records of a prudent businessperson. You are required to
maintain these books and records for no less than four years,and make them available for inspection by a Board representative
when requested.You are also expected to notify us if you are buying, selling,adding a location,or discontinuing your business,
adding or dropping a partner, officer, or member, or when you are moving any or all of your business locations. If it becomes
necessary to surrender this permit,you should only do so by mailing it to a Board office,or giving it to a Board representative.
If you would like to know more about your rights as a taxpayer, or if you are unable to resolve an issue with the Board,please
contact the Taxpayers' Rights Advocate Office for help by calling toll-free, 888-324-2798 or 916-324-2798.Their fax number is
916-323-3319.
Please post this permit at the address for which it was issued and at a location visible to your customers.
• STATE BOARD OF EQUALIZATION
Sales and Use Tax Department
The following items must be completed and accompany the Medical Cannabis Cooperative 1
Collective Application (MCCC). Please check off each item to ensure completeness.
1) Original completed application and $ 7,500 deposit fee. ❑
2) An accurate site plan and floor plan of the premises that clearly labels all the use of areas on ❑
the premises, including (1) doors (2) entrances (3) windows (4) use of each area, including
(5)storage (6) cultivation areas (7) exterior lighting fixtures (8) security cameras (9) restrooms
(10) signage and (11) parking (including other tenant spaces if the MCCC is proposed for a
multi-tenant building site).
3) Photographs of the existing site that show the front, back and sides of the building, lighting, ❑
parking, etc.
4) A security plan that includes the following: ❑
a. Security cameras that have been installed and maintained in good working
condition, and used in an ongoing manner with at least 240 continuous hours
of digitally recorded documentation in a format approved by the City Manager.
Please provide the number of security cameras and list the areas covered by
each. The areas to be covered by the security cameras include, but are not
limited to (1) the storage areas (2) cultivation areas (3) all doors (4) all
windows, and (5)any other areas as determined by the City Manager.
b. A reliable and commercial alarm system that is operated and monitored by a
• lawfully operating security company or alarm business. Please provide the
name and contact information of the security camera monitoring company.
C. Properly illuminated windows and doors that are in compliance with the City's
lighting standards regarding fixture type, wattage, illumination levels,
shielding, etc. (Applicants may be required to secure the necessary approvals
and permits.)
5) A copy of the deed, lease, contract, or other document governing the terms and conditions of ❑
occupancy of the MCCC.
6) Suitable evidence of proof of lawful presence or residence in the city of Palm Springs ❑
(examples of this may include a copy of the applicant's current driver's license or a current
copy of a utility bill).
7) A notarized acknowledgement from the owner of the property, if the applicant is not the ❑
owner, that a MCCC will be operated on his/her property.
8) A copy of the MCCC's articles of incorporation or articles of organization. ❑
9) Evidence of authorization to do business as a non-profit within the State. ❑
987441.1