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HomeMy WebLinkAbout22- Standard Form Commercial Lease - The Ridge Center, LLC - 7 East Beall STANDARD FORM COMMERCIAL LEASE ARTICLE ONE: BASIC TERMS This Article One contains the basic terms (the"Basic Terms")of this Standard Form Commercial Lease("Lease")between the Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the Lease referred to in this Article One explain and define the Basic Terms and are to be read in conjunction with the Basic Terms. Section 1.01. Lease Commencement Date: The date upon which this Lease has been fully executed by Landlord and Tenant. Section 1.02.Landlord: The Ridge Center,LLC Address of Landlord:PO Box 1795, Bozeman, MT 59715 Section 1.03.Tenant: City of Bozeman Address of Tenant: 121 N Rouse Ave,Bozeman,MT 59715 Contact: Jeff Mihelich Section 1.04. Project: The Project comprises the building located at 7 E. Beall in the City of Bozeman, Gallatin County, Montana 59715 together with all other structures, fixtures and other improvements (including the Leased Premises) which are now located or which may hereafter be located on the tract of land which is described on Exhibit"A"attached hereto and incorporated herein by reference. Section 1.05. Leased Premises: The Leased Premises is that portion of the 1"floor of the Project containing approximately 4,036 square feet of net rentable area,more or less, in the Project located at 7 E. Beall in the City of Bozeman, Gallatin County, Montana 59715 (the "Building"). Along with the Leased Premises,Tenant will have the non-exclusive right to use all of the areas designated as"Common Areas" in and around the Building by Landlord,including,but not limited to,lobbies,sidewalks,parking areas and private driveways,if any,as more particularly described in this Lease. Section 1.06. Lease Term: The Lease Term shall commence on the Rent Commencement Date and shall expire on the date which is Five (5) years after the Rent Commencement Date, subject to any earlier termination as expressly provided herein. Section 1.07. Rent Commencement Date: The"Rent Commencement Date" shall be the earlier of the Occupancy Date(See Article 3.01)or April 1,2022. Section 1.08. Permitted Uses: General office use. Landlord recognizes Tenant is a governmental entity which requires public access to the Leased Premises. Section 1.9.Prepayment of Rent: Tenant shall pay to the Landlord in full upon execution of this q Lease an amount equal to the first month's rent for the first year of the Lease Term($7,399.33),the receipt of which is hereby acknowledged. h r - 1 - Section 1.10.Security Deposit:Tenant shall pay to the landlord in full upon execution of this Lease an amount equal to one months rent of year 5 of the lease as a security deposit in the amount of$8,657.22, the receipt of which is hereby acknowledged. Section 1.I t. Rent: The term "Rent" as used hereunder shall mean and include the Base Rent, Tenant's Proportionate Share of Operating Costs,and all other charges payable by Tenant under this Lease, including the following: (a) BASE RENT: Beginning on the Rent Commencement Date, Base Rent for the Lease Term will be payable in monthly installments and shall be equal to the following: Base Rate/SF Annually Monthly Year 1 $22.00 $88,792.00 $7,399.33 Year 2 $22.88 $92,343.68 $7,695.31 Year 3 $23.80 $96,056.80 $8,004.73 Year 4 $24.75 $99,891.00 $8,324.25 Year 5 $25.74 $103,886.64 $8,657.22 (b) OPERATING COSTS: As used in this Lease, the term "Operating Costs" shall mean all expenses of Landlord with respect to the maintenance, servicing, repairing, and/or operation of the Project as more particularly described in Section 3.02 below. (c) TENANTS PROPORTIONATE SHARE: The term "Tenant's Proportionate Share" means the proportion, expressed as a percentage, that the net rentable area in the Leased Premises, as reasonably determined by Landlord,bears to the total net rentable area in the Project, as determined by Landlord,as of the date that the computation is made.If additional square footage is added to the Project, the computation shall be adjusted by Landlord upon the completion of the construction of such additional square footage. Landlord and Tenant agree that Tenant's Proportionate Share,as of the date of the execution of this Lease is 41.32%,which was determined by dividing the net rentable area in the Leased Premises(4,036 square feet)by the net rentable area in the Project(9,768 square feet). (d) ESTIMATED INITIAL OPERATING COST PAYMENT: (See Section 3.02). Initial Operating Costs for the entire Project are estimated to be $1513.66 per month and includes taxes, insurance, utilities and maintenance and repair. The Tenant is responsible for its own janitorial costs. (e) AGREED UPON TENANT IMPROVEMENTS. Landlord agrees and hereby authorizes Tenant at Tenant's expense to install window treatments to prevent computer screen glare and regulate temperature of the Leased Premises. Any such improvements may remain after the Lease Term. (e) NET RENTABLE AREA: For purposes of determining the Base Rent under this Lease and for all other purposes under this Lease, the net rentable area of the Leased Premises is deemed to be 4,036 square feet. - 2 - ARTICLE TWO: LEASE TERM Section 2.01. Lease For Lease Term. (a) Landlord leases the Leased Premises to Tenant and Tenant leases the Leased Premises from Landlord for the Lease Term. The Initial Lease Term is for the period stated in the Basic Terms and shall begin and end on the dates specified in the Basic Terms,unless the beginning or end of the Initial Lease Term is changed under any provision of this Lease. (b) Tenant shall vacate the Leased Premises upon the expiration of the Lease Term or earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against all damages which Landlord incurs from Tenant's delay in vacating the Leased Premises. If Tenant does not vacate the Leased Premises upon the expiration of the Initial Lease Term or earlier termination of the Lease and Landlord thereafter accepts rent from Tenant, Tenant's occupancy of the Leased Premises shall be a"month-to-month"tenancy,subject to all of the terms of this Lease applicable to a month-to-month tenancy,except that the Base Rent then in effect shall be increased by fifty percent(50%)of the then Base Rent. ARTICLE THREE: RENT Section 3.01.Time and Manner of Payment.Tenant's obligation to pay Base Rent will commence on the Rent Commencement Date. Tenant's obligation to pay Tenant's Proportionate Share of Operating Costs will commence upon the earlier to occur of the Rent Commencement Date or actual occupancy of all or a portion of the Leased Premises by Tenant(the"Occupancy Date"). Commencing with the Occupancy Date, Tenant will pay Tenant's Proportionate Share of Operating Costs on the first day of each calendar month; provided, that, if the Occupancy Date is other than the first day of a calendar month, Tenant's Proportionate Share of Operating Costs for such month will be prorated to the end of the applicable calendar month. Commencing with the Rent Commencement Date, Tenant shall pay the Base Rent and Tenant's Proportionate Share of Operating Costs on the first day of each calendar month.If the Rent Commencement Date should be a date other than the first day of a calendar month,the monthly Base Rent set forth above and Tenant's Proportionate Share of Operating Costs, as applicable, shall be prorated to the end of the applicable calendar month and all succeeding installments hereunder shall be payable on or before the first day of each succeeding calendar month during the Initial Lease Term. All payments hereunder shall be made in advance,without offset,deduction or prior demand.The Base Rent,Tenant's Proportionate Share of the Operating Costs and all other sums due hereunder shall be payable at Landlord's address or at such other place as Landlord may designate in writing. Section 3.02. Operating Costs. (a) As used in this Lease, the term "Operating Costs" shall mean all reasonable expenses of Landlord with respect to the maintenance,servicing,repairing and/or operation of the Project,including,but not limited to the following: (1)maintenance,repair and replacement costs of all common areas not directly under the control of Tenants of the Project; (2) electricity, fuel, water, sewer, gas and other utility charges; (3) security, window washing and janitorial services, including trash removal; (4)Landlord's insurance costs as contemplated in Section 4.02 below as well as any other insurance costs incurred by Landlord in operating the Project; (5) landscaping and pest control;(6)maintenance of signs(other than tenants' signs);(7)rental or lease payments paid by Landlord for rented or leased personal property used in the maintenance or repair of the Common Areas;(8)management fees; (9)wages and benefits payable to employees whose duties are directly connected with the operation and/or maintenance of the Project which amounts will be -3 - or projects; 10 pro rated if such employees are responsible for other propertiesp � ( ) � INTENTIONALLY LEFT BLANK;(11)the cost,including interest,amortized over its useful life, of installation of any device or other equipment which improves the operating efficiency of any system within the Project and thereby reduces operating expenses;provided,however,that(unless such device or equipment is approved in advance by Tenant) the amount of such annual cost included in Operating Costs will not exceed the annual amount of the actual reduction in Operating Expenses resulting from the device or equipment;(12)all other reasonable expenses which would customarily be regarded as non-capital operating and maintenance expenses to be incurred by a landlord and passed through to a tenant in projects similar to the Project in Bozeman, Montana; (13) all real property taxes and assessments, including dues and assessments by means of deed restrictions and/or owner's associations which accrue against the Project;(14)governmental levies or charges of any kind or nature assessed or imposed on the Project,whether by state,county, city or any political subdivision thereof; and(15) all insurance premiums Landlord is required to pay or deems necessary to pay, including public liability insurance and workers compensation insurance. Landlord and Tenant understand and agree that the term "reasonable" with regard to Operating Expenses will take into account market conditions and operation,repair and maintenance services customarily provided for other similar first class projects in the Bozeman, Montana area (and passed through to the tenants thereof)and the costs for such services. (b) The term Operating Costs does not include the following(not the responsibility of Tenant unless otherwise stipulated in this Agreement):(1)expenses for repairs,restoration or other work occasioned by fire,wind,the elements or other casualty that are covered by(and collectible under) insurance or which are covered by(and collectible under)contractor or materials warranty or guaranty; (2) income and franchise taxes of Landlord; (3) expenses incurred in leasing to or procuring of tenants, including leasing commissions, advertising expenses and expenses for the renovating of space for new tenants; (4) interest or principal payments on any mortgage or other indebtedness of Landlord;(5)compensation paid to any employee of Landlord above the grade of property manager; (6) any depreciation allowance or expense (except as specifically referenced above); (7)any utilities or other expenses which are separately metered or calculated and charged to Tenant or any other tenant in the Project; (8) costs incurred by Landlord for alterations which are considered capital improvements and replacements under generally accepted accounting principles consistently applied (except as specifically referenced above); (9) costs incurred and reimbursed to Landlord due to violation by any tenant of the terms and conditions of any lease or other rental arrangement covering space in the Project or any portion thereof; and(10) any costs, fines and penalties incurred due to violations by Landlord of any currently existing(as of the date hereof)governmental rule or authority;and(11)rental income insurance. (c) Prior to the Lease Commencement Date, and from time to time thereafter, Landlord shall deliver to Tenant its estimate of the Operating Costs to be incurred during the then- current calendar year.Landlord may adjust the estimate from time to time during the year to which it relates.On the first day of each month during the Initial Lease Term Tenant shall pay to Landlord in advance, as additional rent,without offset or deduction, an amount equal to one-twelfth(1/12) of Tenant's Proportionate Share of the estimated Operating Costs as calculated by Landlord (prorated for any partial month).The Estimated Initial Operating Costs monthly payment due from Tenant shall be the sum set forth in the Basic Terms(Section 1.12(b)).Within one hundred twenty (120) days following the end of each calendar year, Landlord shall furnish to Tenant a statement showing the total actual Operating Costs for the calendar year just expired,the amount of Tenant's Proportionate Share of the Operating Costs, and payments made by Tenant during such calendar year.Upon reasonable prior written notice from Tenant to Landlord,Tenant may review the books -4- and records of Landlord regarding the Operating Costs and the calculation of Tenant's Proportionate Share. If Tenant's Proportionate Share of the actual Operating Costs for such calendar year exceeds the aggregate of Tenant's monthly payments made during the calendar year just expired,Tenant shall pay to Landlord the deficiency within thirty(30)days after receipt of said statement.If Tenant's payments exceed Tenant's Proportionate Share of the actual Operating Costs as shown on such statement,Tenant shall be entitled to offset the excess against payments thereafter becoming due as Tenant's Proportionate Share of Operating Costs; provided, however, that any such excess exceeding Tenant's projected Proportionate Share of Operating Costs for the subsequent calendar year will be paid by Landlord to Tenant. No portion of the Operating Costs paid by Tenant shall be credited against the Base Rent or any other rental obligations hereunder. Section 3.03. Security Deposit. The Landlord acknowledges receipt of a security deposit of $8,657.22. This deposit will be held on behalf of the Tenant by the Landlord for the Lease Term. During the Lease Term, should Tenant default or otherwise fall delinquent in its payment obligations to the Landlord,the Landlord shall have the right to apply the Security Deposit against such amounts owed until said amounts are satisfied. Within ten(10)days of notifying Tenant of the depletion of the Security Deposit, Tenant shall replenish the Security Deposit to its original value of$8,657.22 by remitting payment to Landlord. Failure to replenish the Security Deposit by Tenant shall constitute default of this Lease by the Tenant. At the end of the Lease Term,following a full review of the Leased Premises,the Landlord shall remit the Security Deposit to the Tenant less any amounts deducted from the Security Deposit for damage that exists within the Leased Premises or within the Common Areas which are agreed to be the direct result of actions of the Tenant. Section 3.04.Interest on Past Due Obligations.Any sums required to be paid hereunder and not paid when due, including attorneys' fees, shall bear interest,until paid, at the lesser of the following rates: (i) 15%per annum;or(ii)the highest rate allowed under applicable law(such lesser rate being referred to herein as the "Past Due Rate"). All agreements between Landlord and Tenant, whether now existing or hereafter arising,whether herein contained or in any other instrument or agreement,whether written or oral, are hereby expressly limited so that in no contingency or event whatsoever shall any acceleration of rents due,late charges,returned check charges, interest charges, or any other charges whatsoever,be deemed as interest charged, contracted for or received in excess of the amount permitted under applicable law, it particularly being the intention of the parties hereto to conform strictly to the laws of the State of Montana. Any portion of such charges which are deemed as interest in excess of the amount permitted under applicable law,as of the date such charge is due,shall be applied to a reduction of the rental payment next coming due hereunder,or,if such portion of charges exceeds the rental payment next coming due hereunder, such amount shall be refunded to Tenant. To the extent permitted by law, determination of the legal maximum amount of interest shall at all times be made by amortizing,prorating,allocating, and spreading in equal parts during the period of the full term of this Lease, all amounts deemed as interest at any time contracted for,charged or received from Tenant in connection with this Lease. ARTICLE FOUR:UTILITIES AND SERVICES,INSURANCE AND COMMON AREAS Section 4.01. Utilities and Services. Landlord will provide normal utility service connections to the Building constituting the Leased Premises. As the utility services are jointly metered in the Project, Landlord will make a reasonable determination of Tenant's proportionate share of the cost of such services and Tenant will pay such share monthly as a part of its monthly proportionate a share of operating costs (See Section 1.12(B)). In a multi-occupancy Building,Landlord may provide water to the Leased Premises - 5 - in which case Tenant agrees to pay to Landlord its pro rata share of the cost of such water within ten(10) days of invoice.Tenant will pay all costs caused by Tenant introducing excessive pollutants or solids other than ordinary human waste into the sanitary sewer system, including permits, fees and charges levied by any governmental entity for any such pollutants and solids.Except as specifically set forth herein,Landlord will not be required to pay for any utility services, supplies or upkeep in connection with the Leased Premises.Utility services for the Common Areas will be part of the Operating Costs. Tenant agrees that Landlord is not liable to Tenant in any respect for damages to either person, property or business on account of any interruption or failure of utilities or services furnished by Landlord. Except as otherwise specifically set forth below, no such interruption or failure may be construed as an eviction of Tenant or entitle Tenant to(i)any abatement of rent,(ii)terminate the Lease,or(iii)be relieved from fulfilling any covenant or agreement contained herein. Should any malfunction of the utility improvements or facilities to the Leased Premises or the Building(which are located outside the shell of the Building but after the meter or otherwise not the responsibility of the utility provider) occur for any reason,Landlord will use reasonable diligence to repair same promptly, but Tenant will not be entitled to any claim for rebate or abatement of rent or damages on account of such malfunction or of any interruption in service occasioned thereby or resulting therefrom unless cause in whole by Landlord's negligence. Rent will abate during any interruption or failure of utility service to the Leased Premises to the extent that it is caused by the negligent act or omission of Landlord and renders greater than thirty percent (30%)of the Leased Premises untenantable,commencing with the fifteenth(15th)consecutive day of such interruption and continuing until such service is restored. If there is an interruption or failure of utility service caused by the negligent act or omission of Landlord which renders the Leased Premises untenantable for thirty(30)consecutive days,then Tenant may,at Tenant's option,terminate the Lease. Section 4.02. Insurance Policies. (a) Liability Insurance. During the Lease Term, Tenant shall maintain a policy of commercial general liability insurance (sometimes known as broad form comprehensive general liability insurance) insuring Tenant against liability for bodily injury,property damage(including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Leased Premises. The insurance policy must: name Landlord as an additional insured under such policy for liability brought to Landlord through the city's actions, activities or operations. The limits of the policy will be the statutory tort cap limits for public entities in the State of Montana. Landlord will also obtain comprehensive public liability insurance in an amount and with coverage determined by Landlord insuring Landlord against liability arising out of ownership,operation,use or occupancy of the Leased Premises. (b) Leased Premises and Rental Income Insurance. During the Lease Term: (i) Landlord shall maintain policies of insurance covering loss of or damage to the Building and the Landlord Improvements in the full amount of their replacement value; and (ii) Tenant shall maintain policies of insurance which name Landlord as an additional named insured and cover loss or damage to the Tenant Improvements in the full amount of their replacement value.Such policies shall contain an Inflation Guard Endorsement and shall provide protection against all perils included within the classification of fire,extended coverage,vandalism,malicious mischief,special extended perils(all risk),sprinkler leakage and any other perils which Landlord deems reasonably necessary.Landlord shall have the right to obtain flood insurance if required by any lender holding a security interest in the Leased Premises.Landlord shall not obtain insurance for Tenant's fixtures or equipment or the Tenant Improvements or any other building improvements installed by Tenant - 6- on the Leased Premises. During the Lease Term, Landlord shall also maintain a rental income insurance policy,with loss payable to Landlord, in an amount equal to one year's Base Rent, plus estimated real property taxes and insurance premiums.Tenant shall not do or permit anything to be done which invalidates or increases the costs of any such insurance policies. (c) Payment of Premiums. Tenant shall pay all premiums for the insurance policies described in Section 4.02(a) within ten(10) days after Tenant's receipt of a copy of the premium statement or other evidence of the amount due.The premiums for insurance policies maintained by Landlord will be included in the Operating Costs, and Tenant shall pay Tenant's Proportionate Share of such premiums. If the Lease Term expires before the expiration of an insurance policy maintained by Landlord, Tenant shall be liable for Tenant's prorated share of the insurance premiums.Before the Lease Commencement Date,Tenant shall deliver to Landlord a copy of any policy of insurance which Tenant is required to maintain under this Section 4.02. At least thirty (30)days prior to the expiration of any such policy,Tenant shall deliver to Landlord a renewal of such policy. As an alternative to providing a policy of insurance, Tenant shall have the right to provide Landlord a certificate of insurance, executed by an authorized officer of the insurance company,showing that the insurance which Tenant is required to maintain under this Section 4.02 is in full force and effect and containing such other information which Landlord reasonably requires. (d) General Insurance Provisions. (i) Any insurance which Tenant is required to maintain under this Lease shall include a provision which requires the insurance carrier to give Landlord not less than thirty (30)days' written notice prior to any cancellation or modification of such coverage. (ii) If Tenant fails to deliver any policy, certificate or renewal to Landlord required under this Lease within the prescribed time period or if any such policy is canceled or modified during the Lease Term without Landlord's consent, Landlord may, after written notice to Tenant and a 10 day opportunity to cure such default, obtain such insurance, in which case Tenant shall reimburse Landlord for the cost of such insurance within fifteen(15)days after receipt of a statement that indicates the cost of such insurance. The foregoing notwithstanding, no notice to Tenant will be required if Tenant's required insurance hereunder has expired, lapsed or otherwise terminated prior to Landlord obtaining such insurance at Tenant's expense. (iii) Section 4.03. Common Areas. (a) Common Areas. As used in this Lease, "Common Areas" shall mean all areas within the Project which are generally available for the common use of tenants of the Project and which are not leased or held for the exclusive use of Tenant or other tenants, including, but not limited to, driveways, sidewalks, loading areas, access roads, corridors, landscaping and planted areas. Landlord, from time to time, may change the size, location, nature and use of any of the Common Areas,convert Common Areas into leasable areas,construct additional parking facilities (including parking structures)in the Common Areas,and increase or decrease Common Area land and/or facilities. Tenant acknowledges that such activities may result in inconvenience to Tenant. Such activities and changes are permitted if they do not materially affect Tenant's use of the Leased Premises. - 7- (b) Use of Common Areas.Tenant shall have the nonexclusive right(in common with other tenants and all others to whom Landlord has granted or may grant such rights) to use the Common Areas for the purposes intended, subject to such reasonable rules and regulations as Landlord may establish from time to time. Tenant shall abide by such rules and regulations and shall use reasonable efforts to cause others who use the Common Areas with Tenant's express or implied permission to abide by Landlord's rules and regulations.At any time,Landlord may close any Common Areas to perform any acts in the Common Areas as, in Landlord's judgment, are desirable to improve the Project.Tenant shall not interfere with the rights of Landlord,other tenants or any other person entitled to use the Common Areas. (c) Vehicle Parking. Tenant shall have the exclusive right to use seven (7) parking spaces of the thirty (30)parking spaces available at the Project. Tenant's parking shall be subject to the rules and regulations established by Landlord. Handicapped spaces shall only be used by those legally permitted to use them. (d) Maintenance of Common Areas.Landlord shall maintain the Common Areas in good order, condition and repair. Tenant shall pay Tenant's Proportionate Share of all costs incurred by Landlord for the operation and maintenance of the Common Areas,provided such costs fall within the definition of Operating Costs(See Section 3.02). ARTICLE FIVE:USE OF LEASED PREMISES Section 5.01.Permitted Uses.Tenant may use the Leased Premises only for the Permitted Use set forth in the Basic Terms. Section 5.02. Manner of Use. Tenant shall not cause or permit the Leased Premises to be used in any way which constitutes a violation of any applicable law,ordinance,or governmental regulation or order, which annoys or interferes with the rights of tenants of the Project,or which constitutes a nuisance or waste. Tenant, at Tenant's sole cost and expense, will comply with all laws, ordinances, orders, rules and regulations now in effect or enacted subsequent to the date hereof of state, federal, municipal or other governmental entities or agencies having jurisdiction over Tenant or the use, condition and occupancy of the Leased Premises.Tenant will comply with the rules and regulations of the Project adopted by Landlord which are set forth on Exhibit`B"attached hereto. Landlord is entitled,at all times,to change and amend the rules and regulations in any reasonable manner as Landlord deems advisable for the safety, care, cleanliness, preservation of good order and operation or use of the Project. All such changes and amendments to the rules and regulations of the Project must be in writing and sent to Tenant at the Leased Premises and thereafter must be carried out and observed by Tenant. Section 5.03. Hazardous Materials. Throughout the Lease Term, Tenant shall prevent the presence,use,generation,release,discharge,storage,disposal,or transportation of any Hazardous Materials (as hereinafter defined) on, under, in, above, to, or from the Leased Premises other than in de minimis amounts and in strict compliance with all applicable federal, state, and local laws, rules, regulations, and orders.For purposes of this provision,the term"Hazardous Materials"shall mean and refer to any wastes, materials, or other substances of any kind or character that are or become regulated as hazardous or toxic waste or substances, or which require special handling or treatment, under any applicable local, state, or federal law,rule,regulation,or order.Tenant shall indemnify,defend and hold Landlord harmless from and against the following, to the extent any of the following are covered by or related to Tenant's use or occupancy of the Leased Premises and regardless of any strict liability of Landlord: (a) any loss, cost, expense, claim, or liability arising out of any investigation, monitoring, clean-up, containment, removal, storage,or restoration work(herein referred to as"Remedial Work")required by,or incurred by Landlord - 8 - or any other person or party in a reasonable belief that such Remedial Work is required by any applicable federal, state or local law,rule,regulation or order, or by any governmental agency, authority, or political subdivision having jurisdiction over the Leased Premises arising out of Tenant's use of the Leased Premises;and(b)any claims of third parties for loss,injury,expense,or damage arising out of the presence, release, or discharge of any Hazardous Materials on, under, in, above, to, or from the Leased Premises arising out of Tenant's use of the Leased Premises. In the event any Remedial Work is so required under any applicable federal,state,or local law,rule,regulation or order,Tenant shall promptly perform or cause to be performed such Remedial Work in compliance with such law,rule,regulation, or order. In the event Tenant shall fail to commence the Remedial Work in a timely fashion, or shall fail to prosecute diligently the Remedial Work to completion, such failure shall constitute an event of default on the part of Tenant under the terms of this Lease, and Landlord, in addition to any other rights or remedies afforded it hereunder,may,but shall not be obligated to,cause the Remedial Work to be performed,and Tenant shall promptly reimburse Landlord for the cost and expense thereof upon demand. Notwithstanding any provision herein to the contrary, Tenant will have no liability or responsibility with respect to any Hazardous Materials which were placed upon or within the Project or the Leased Premises prior to the Commencement Date of this Lease or which migrate on to the Project from other areas except to the extent that Tenant's negligently exacerbates any liability arising out of Hazardous Materials. Section 5.04. Signs. Tenant may not place any signs on the Leased Premises or elsewhere within the Project without Landlord's prior written consent,which will not be unreasonably withheld.All expenses incurred in connection with any signage for Tenant's benefit will be borne solely by Tenant. Section 5.05.Indemnities. TENANT SHALL PROTECT,DEFEND, INDEMNIFY AND HOLD THE LANDLORD, WHILE ACTING WITHIN THEIR DUTIES AS SUCH, HARMLESS FROM AND AGAINST ALL CLAIMS,LIABILITIES,DEMANDS, CAUSES OF ACTION,AND JUDGEMENTS (INCLUDING THE COST OF DEFENSE AND REASONABLE ATTORNEY FEES)ARISING IN FAVOR OR ASSERTED BY TENANT'S EMPLOYEES OR THIRD PARTIES ON ACCOUNT OF DAMAGE TO PROPERTY, BODILY OR PERSONAL INJURY, OR DEATH ARISING OUT OF ANY SERVICES PERFORMED,ACT OR OMISSION THAT IN ANY WAY RESULTS FROM THE ACTS OR OMISSIONS OF TENANT,EXCEPT THE NEGLIGENCE OF THE LANDLORD UNDER THIS AGREEMENT. LANDLORD WILL INDEMNIFY TENANT AGAINST AND HOLD TENANT HARMLESS FROM ANY AND ALL DAMAGES, CLAIMS OR LIABILITIES (AND COSTS AND EXPENSES RELATED THERETO) (NOT OTHERWISE COVERED BY AND COLLECTIBLE UNDER APPLICABLE INSURANCE) TO THE EXTENT ARISING OUT OF OR RESULTING FROM ANY NEGLIGENT ACT OR OMISSION OF LANDLORD RELATED TO (1)LANDLORD'S INSPECTION OF THE PROJECT OR THE LEASED PREMISES(II)LANDLORD'S OPERATION MAINTENANCE OR REPAIR OF THE COMMON AREAS OR OTHER AREAS OF THE PROJECT TO BE MAINTAINED BY LANDLORD, INCLUDING FOUNDATION, EXTERIOR WALLS AND ROOF, AND(I11)LANDLORD PROVIDING ANY SERVICES THE COST OF WHICH IS PASSED THROUGH TO TENANT AS OPERATING COSTS. THIS INDEMNIFICATION WILL NOT COVER ANY CONSEQUENTIAL OR SPECIAL DAMAGES OF TENANT OR ANY OCCURRENCE OF LANDLORD EXERCISING SELF-HELP REMEDIES UPON A DEFAULT BY TENANT HEREUNDER. i - 9- Section 5.06.Landlord's Access. Subject to Tenant's reasonable security policies,Landlord or its agents may enter the Leased Premises at all reasonable times to show the Leased Premises to potential buyers, investors or tenants or other parties;to do any other act or to inspect and conduct tests in order to monitor Tenant's compliance with all applicable environmental laws and all laws governing the presence and use of Hazardous Material; or to do any other acts necessary or desirable for the use and operation of the Project; provided, however, that Landlord shall use reasonable efforts not to unreasonably disturb Tenant's use of the Leased Premises.Landlord shall give Tenant at least 24 hours prior notice of such entry, except in the case of an emergency.Landlord may place customary"For Sale"or"For Lease"signs on the Leased Premises. Section 5.07. Quiet Possession. If Tenant pays the rent and complies with all other terms of this Lease,Tenant may occupy and enjoy the Leased Premises for the full Lease Term,subject to the provisions of this Lease.Landlord represents and warrants that it now has good and indefeasible fee simple title to the Project subject to certain laws, ordinances, regulations and rules affecting the Project and to the liens, easements and other encumbrances.Landlord represents and warrants that it has full authority to enter into this Lease with Tenant. Section 5.08. Security. Tenant is responsible, at Tenant's sole cost and expense, to maintain security at the Leased Premises and any other security Tenant determines is reasonably necessary or desirable in the Building of which the Leased Premises are a part or in the Common Areas serving the Leased Premises(including the parking areas).Tenant may install locks including locks which provide for electronic access to all entrances into the Leased Premises; provided, however, that in no case shall any locking mechanism restrict Landlord access to Leased Premises in accordance with the terms of this Lease. ARTICLE SIX: CONDITION OF LEASED PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS Section 6.01.Existing Conditions.Except for material latent,design or construction defects in the Landlord Improvements and those defects identified in the initial walkthrough(See Section 6.05),Tenant accepts the Leased Premises in its condition as of the execution of the Lease,subject to the completion of the Landlord Improvements (and any punch list items noted by Landlord and Tenant at the time of tender of the Leased Premises),and subject to all recorded matters,laws,ordinances,and governmental regulations and orders. Except as provided herein, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation as to the condition of the Leased Premises or the suitability of the Leased Premises for Tenant's intended use. Tenant represents and warrants that Tenant has made its own inspection of and inquiry regarding the condition of the Leased Premises and is not relying on any representations of Landlord or any broker or any other party acting for or on behalf of Landlord with respect thereto. The foregoing notwithstanding, Landlord will diligently and in reasonably good faith pursue any contractor or materials warranties or guarantees with regard to any defect,latent or otherwise,in the Leased Premises. Section 6.02. Landlord's Obligations. (a) Except as provided in Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall (at its own cost and expense) keep the following in good order, condition and repair: the foundations, exterior walls and roof of the Leased Premises. Except as provided in Article Seven(Damage or Destruction) and Article Eight(Condemnation), Landlord shall keep the Common Areas in good order, condition and repair,it being understood and agreed that Operating Costs arising therefrom will be subject to Tenant's Proportionate Share of Operating - 10 - Expenses payment obligations. Landlord shall not be obligated to maintain or repair windows, interior doors, plate glass ,the interior surfaces of exterior walls or damage to the roof caused by Tenant or Tenant's agents, employees, representatives or contractors (including but not limited damaged caused by any of the Tenant Improvements). Landlord shall make repairs under this Section 6.02 within a reasonable time after receipt of written notice from Tenant of the need for such repairs and will diligently prosecute such repairs to completion. In the event Landlord fails to commence repairs under this Section 6.02 within thirty (30) days after receipt of written notice from Tenant of the need for such repairs or, thereafter fails to diligently prosecute such repair to completion, Tenant may (after ten(10) days written notice to Landlord) cause such repairs to be made in a diligent and good and workmanlike manner. In such event, Landlord will reimburse Tenant all of Tenant's documented out-of-pocket reasonable costs and expenses related to such repairs within ten (10) days after receipt of an invoice, together with such documented costs and expenses.In no event will Tenant be entitled to offset Rent for any of the costs or expenses related to such repairs. (b) Tenant shall not be responsible for the performance or cost of any repair and maintenance: (i) to the extent necessitated by the negligent acts or omissions of Landlord or its agents,employees or contractors;(ii)to the extent necessitated by any insurable casualty for which Landlord receives insurance proceeds therefor or by exercise of the power of eminent domain;(iii) because of construction defects,whether latent or not, in the Leased Premises,the Building or the Project occurring within one(1)year after the Commencement Date; (iv)arising from a failure to construct the Leased Premises,the Building or the Project in accordance with all laws in effect as of the date hereof; (v) for which Landlord has a right of reimbursement from others and actually collects such reimbursement; or (vi) which would constitute a capital expense, improvement or replacement under Generally Accepted Accounting Principles(except as otherwise provided in this Lease);and all of the preceding shall be performed by Landlord,at its sole cost and expense,except as otherwise permitted or provided in the Lease. Section 6.03.Tenant's Obligations. (a) Except as provided in Section 6.02, Article Seven (Damage or Destruction) and Article Eight (Condemnation), Tenant shall keep all portions of the Leased Premises (including nonstructural, interior, systems and equipment but excluding those portions for which Landlord is expressly responsible hereunder)in good order,condition and repair(including interior repainting and refinishing, as needed). Tenant shall be responsible for the preservation, maintenance and repair of the heating,ventilation and air-conditioning systems,plumbing, electrical and/or repairs, up to$500.00 per repair. Section 6.04.Alterations,Additions,and Improvements. (a) Except as provided herein, Tenant shall not make any alterations, additions, or improvements to the Leased Premises without Landlord's prior written consent. Landlord may require Tenant to provide demolition and/or lien and completion bonds in form and amount reasonably satisfactory to Landlord. Tenant shall promptly remove any alterations, additions, or improvements constructed in violation of this Section 6.04(a)upon Landlord's written request.All alterations, additions, and improvements shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations, and pursuant to plans and specifications and by a contractor both of which have been approved by Landlord.Upon completion of any such work, - 11 - Tenant shall provide Landlord with"as built"plans,copies of all construction contracts,and proof of payment for all labor and materials. (b) Tenant shall pay when due all claims for labor and material furnished to the Leased Premises. Tenant shall give Landlord at least ten (10) days' prior written notice of the commencement of any work on the Leased Premises,regardless of whether Landlord's consent to such work is required. Landlord may elect to record and.post notices of non-responsibility on the Leased Premises. Section 6.05. Condition upon Termination. Upon the termination of the Lease, Tenant shall surrender the Leased Premises to Landlord, broom clean and in the same condition as received (including the Tenant Improvements) except for fire, casualty, and ordinary wear and tear which Tenant was not otherwise obligated to remedy under any provision of this Lease. In addition, Landlord may require Tenant to remove any alterations,additions or improvements,other than the Tenant Improvements,(whether or not made with Landlord's consent)prior to the expiration of the Lease and to restore the Leased Premises to its prior condition, all at Tenant's expense. All alterations, additions and improvements which Landlord has not required Tenant to remove shall become Landlord's property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease,except that Tenant may remove any of Tenant's machinery or equipment which can be removed without material damage to the Leased Premises. Tenant shall repair, at Tenant's expense, any damage to the Leased Premises caused by the removal of any such machinery or equipment.In no event,however,shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord's property) without Landlord's prior written consent: any power wiring or power panels; lighting or lighting fixtures; wall coverings; drapes, blinds or other window coverings;carpets or other floor coverings;heaters,air conditioners or any other heating or air conditioning equipment; fencing or security gates; or other similar building operating equipment and decorations. The foregoing notwithstanding, Tenant and Landlord will mutually perform a walk through of the Leased Premises prior to the Tenants occupancy. During this walkthrough, the existing condition of the Leased Premises will be viewed and agreed to by Tenant and Landlord. Upon termination of the this Lease, Tenant will be required to return the Leased Premises to the Landlord in the same condition as was viewed by Tenant and Landlord during the walkthrough except for fire,casualty and ordinary wear and tear. ARTICLE SEVEN:DAMAGE OR DESTRUCTION Section 7.01.Partial Damage to Leased Premises. (a) Tenant shall notify Landlord in writing immediately upon the occurrence of any damage to the Leased Premises. If the Leased Premises is only partially damaged (i.e., less than seventy percent(70%) of the Leased Premises is untenantable as a result of such damage or less than seventy percent (70%) of Tenant's operations are materially impaired) and if the proceeds received by Landlord from the insurance policies described in Section 4.02(b)are sufficient to pay for the necessary repairs,this Lease shall remain in effect and Landlord shall repair the damage as soon as reasonably possible and Landlord will notify Tenant within thirty(30)days of the casualty of the estimated time necessary to rebuild the Leased Premises. If such period exceeds sixty(60) days, Tenant may terminate this Lease within fifteen(15) days of receipt of such notice in which event, all unaccrued Rent will abate. If Landlord does not achieve substantial completion of such repairs within sixty(60)days of such casualty,Tenant may within ten(10)days of such failure and prior to substantial completion of the repairs by Landlord terminate this Lease, in which event all - 12 - unaccrued Rent hereunder will abate.Landlord may elect(but is not required)to repair any damage to Tenant's fixtures,equipment,or improvements. (b) If the insurance proceeds received by Landlord are not sufficient to pay the entire cost of repair,or if the cause of the damage is not covered by the insurance policies which Landlord and Tenant maintain under Section 4.02(b),Landlord may elect either to (i)repair the damage as soon as reasonably possible, in which case this Lease shall remain in full force and effect, or(ii) terminate this Lease as of the date the damage occurred.Landlord shall notify Tenant within thirty (30)days after receipt of notice of the occurrence of the damage whether Landlord elects to repair the damage or terminate the Lease.If the damage was due to a negligent act or omission of Tenant, or Tenant's employees,agents,contractors or invitees,or a default or breach by Tenant hereunder, Tenant shall pay the difference between the actual cost of repair and any insurance proceeds received by Landlord. If Landlord elects to terminate the Lease,Tenant may elect to continue this Lease in full force and effect,in which case Tenant shall repair any damage to the Leased Premises. Tenant shall pay the cost of such repairs, except that upon satisfactory completion of such repairs, Landlord shall deliver to Tenant any insurance proceeds received by Landlord for the damage repaired by Tenant.Tenant shall give Landlord written notice of such election within ten(10)days after receiving Landlord's termination notice. (c) , If the damage to the Leased Premises occurs during the last six(6)months of the Lease Term and such damage will require more than thirty(30) days to repair, either Landlord or Tenant may elect to terminate this Lease as of the date the damage occurred, regardless of the sufficiency of any insurance proceeds. The party electing to terminate this Lease shall give written notification to the other party of such election within thirty (30) days after Tenant's notice to Landlord of the occurrence of the damage. Section 7.02. Substantial or Total Destruction. If the Leased Premises is substantially or totally destroyed by any cause whatsoever(i.e.,the damage to the Leased Premises is greater than partial damage as described in Section 7.01),this Lease shall terminate as of the date the destruction occurred. Section 7.03.Temporary Reduction of Rent.If the Leased Premises is destroyed or damaged and Landlord or Tenant repairs or restores the Leased Premises pursuant to the provisions of this Article Seven, any Rent payable during the period of such damage,repair and/or restoration shall be reduced according to the degree,if any,to which the Leased Premises are unavailable for use by Tenant.Except for such possible reduction in Rent, Tenant shall not be entitled to any compensation, reduction, or reimbursement from Landlord as a result of any damage,destruction,repair,or restoration of or to the Leased Premises. Landlord and Tenant shall each have the right to terminate the Lease if(i)any damage to the Leased Premises occurs during the last year of the term of the Lease which renders 30% or more of the Leased Premises untenantable and(ii)it is estimated that necessary repairs will not be completed within sixty(60) days from the date of such damage,unless Tenant has an option to extend the term of the Lease and Tenant exercises such option within thirty(30)days of the date of such damage. ARTICLE EIGHT: CONDEMNATION If all or any portion of the Leased Premises is taken under the power of eminent domain or sold under the threat of that power(all of which are called"Condemnation"),this Lease shall terminate as to the part taken or sold on the date the condemning authority takes title or possession,whichever occurs first.If more than twenty percent(20%)of the floor area of the Leased Premises is taken,either Landlord or Tenant may terminate this Lease as of the date the condemning authority takes title or possession, by delivering - 13 - written notice to the other within ten (10) days after receipt of written notice of such taking (or in the absence of such notice, within ten (10) days after the condemning authority takes title or possession). If neither Landlord nor Tenant terminates this Lease,this Lease shall remain in effect as to the portion of the Leased Premises not taken, except that the Base Rent and Tenant's Proportionate Share of the Operating Costs shall be reduced in proportion to the reduction in the floor area of the Leased Premises. If more than twenty percent(20%)of the parking area of the Leased Premises is taken,Tenant may,at Tenant's option, terminate this Lease as to a proportionate amount of space of the Leased Premises as of the date the condemning authority takes title or possession of such parking area,by delivering written notice to Landlord within ten(10)days after receipt of written notice of such taking(or in the absence of such notice, within ten(10)days after the condemning authority takes title or possession of such parking area). The Lease, as to the remaining portion of the Leased Premises, shall remain in effect except that the Base Rent and Tenant's proportionate share of the Operating Costs will be reduced in proportion to the reduction in the floor area of the Leased Premises.Any Condemnation award or payment with regard to the Leased Premises shall be distributed in the following order: (a)first,to any ground lessor,mortgagee or beneficiary under a deed of trust encumbering the Leased Premises, the amount of its interest in the Leased Premises; (b) second,to Tenant,only the amount of any award specifically designated for loss of or damage to Tenant's trade fixtures or removable personal property, moving expenses and the unamortized value of the Tenant Improvements paid for by Tenant and not reimbursed by Landlord with the Allowance; and (c) third, to Landlord,the remainder of such award,whether as compensation for reduction in the value of the leasehold, the taking of the fee, or otherwise. If this Lease is not terminated,Landlord shall repair any damage to the Leased Premises caused by the Condemnation, except that Landlord shall not be obligated to repair any damage for which Tenant has been reimbursed by the condemning authority. If the severance damages received by Landlord are not sufficient to pay for such repair, Landlord shall have the right to either terminate this Lease or make such repair and include the expense thereof in the Operating Costs. ARTICLE NINE:ASSIGNMENT AND SUBLETTING Section 9.01.Landlord Consent Required.Tenant shall not assign,in whole or in part,this Lease, or allow it to be assigned, in whole or in part, by operation of law or otherwise or mortgage or pledge the same,or sublet the Leased Premises,in whole or in part,without the prior written consent of Landlord,and in no event shall any such assignment or sublease ever release Tenant or any guarantor from any obligation or liability hereunder. Landlord's consent to a proposed assignment or sublease hereunder by Tenant will not be unreasonably withheld, conditioned or delayed and such consent will be reasonably determined by Landlord based solely on the financial condition, reputation, and operations (i.e., the permitted use hereunder,the density of personnel,and relative to other operations of tenants in the Project)of the proposed sublessee or assignee. Section 9.02. Conditions of Assignment or Sublease. If Tenant desires to assign or sublet all or any part of the Leased Premises, it shall so notify Landlord in writing in advance of the date on which Tenant desires to make such assignment or sublease. Tenant shall provide Landlord with a copy of the proposed assignment or sublease and such information as Landlord might reasonably request concerning the proposed sublessee or assignee to allow Landlord to make informed judgments as to the financial condition, reputation, operations and general desirability of the proposed sublessee or assignee. Within fifteen (15)_ days after Landlord's receipt of Tenant's proposed assignment or sublease and all required information concerning the proposed sublessee or assignee,Landlord shall have the following options: (1) consent to the proposed assignment or sublease or(2)refuse(based on,among other things,the criteria set forth above) to consent to the proposed assignment or sublease. Landlord's failure to respond in writing within such fifteen (15) day period will be deemed as an approval of such assignment or sublease. Upon - 14 - the occurrence of an event of default by Tenant under this Lease, if all or any part of the Leased Premises are then assigned or sublet,Landlord, in addition to any other remedies provided by this Lease or provided by law,may,at its option,collect directly from the assignee or sublessee all rents becoming due to Tenant by reason of the assignment or sublease.No collection directly by Landlord from the assignee or sublessee shall be construed to constitute a novation or a release of Tenant or any guarantor from the further performance of its obligations under this Lease. ARTICLE TEN:DEFAULTS AND REMEDIES Section 10.01.Default by Tenant.The following shall be deemed to be events of default by Tenant under this Lease: (a) Tenant shall fail to pay when due any installment of Rent or any other payment required pursuant to this Lease and such failure continues for a period of five (5) business days from Tenant's receipt of written notice of such non-payment;(b)Tenant or any guarantor of Tenant's obligations hereunder shall file a petition or be adjudged bankrupt or insolvent under any applicable federal or state bankruptcy or insolvency law or admit that it cannot meet its financial obligations as they become due, or a receiver or trustee shall be appointed for all or substantially all of the assets of Tenant or any guarantor of Tenant's obligations hereunder and the same is not dismissed within sixty (60)days; (c)Tenant or any guarantor of Tenant's obligations hereunder shall make a transfer in fraud of creditors or shall make an assignment for the benefit of creditors; (d)Tenant shall do or permit to be done any act which results in a lien being filed against the Leased Premises or the Project,and the same is not released or bonded around in manner satisfactory to Landlord within thirty (30) days; (e) the liquidation, termination, dissolution or (if the Tenant is a natural person)the death of Tenant or any guarantor of Tenant's obligations hereunder; or (f) Tenant shall be in default of any other term, provision or covenant of this Lease, other than those specified in subparts (a) through (e), above, and Tenant does not commence to cure such default within fifteen (15) days after written notice thereof to Tenant and thereafter diligently prosecute such cure to completion. Section 10.02. Remedies for Tenant's Default. Upon the occurrence of any event of default set forth in this Lease, Landlord shall have the option to pursue any one or more of the remedies set forth in this Section without any additional notice or demand: (a) Landlord may terminate this Lease and forthwith repossess the Leased Premises and be entitled to recover forthwith as damages a sum of money equal to the total of.(i)the cost of recovering the Leased Premises (including attorneys' fees and costs of suit); (ii)the unpaid Rent earned at the time of termination, plus interest thereon at the highest rate allowed by applicable law; (iii)the present value(discounted at the rate of ten percent(10%)per annum)of the balance of the Base Rent, Tenant's Proportionate Share of Operating Costs, and all other sums due hereunder for the remainder of the Lease Term less the present value(discounted at the same rate) of the fair market rental value of the Leased Premises for said period; and (iv) any other sum of money and damages owed by Tenant to Landlord. (b) Landlord may terminate Tenant's right of possession(but not this Lease)and may repossess the Leased Premises by forcible detainer suit or otherwise,without demand or notice of any kind to Tenant and without terminating this Lease, in which event Landlord will use commercially reasonable efforts in accordance with Section 10.04 below to relet the Leased Premises for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord, in Landlord's sole and absolute discretion. For the purpose of such reletting,Landlord is authorized to make any repairs,changes,alterations,or additions in or to Leased Premises which Landlord may consider to be necessary, in Landlord's reasonable judgment. If Landlord does not relet the Leased Premises,then Tenant shall pay to Landlord as damages a sum equal to the amount - 15 - of the Rent and all other sums due hereunder,plus the cost of recovering possession of the Leased Premises,plus interest on all of the foregoing at the Past Due Rate.If the Leased Premises are relet and a sufficient sum is not realized from such reletting (after paying the cost of recovering possession of the Leased Premises, plus all of the costs and expenses of repairs, changes, alterations,and additions to the Leased Premises necessary to cause such condition to comply with the provisions of Section 6.05 hereof, plus all expenses of reletting the Leased Premises, plus interest on all of the foregoing at the Past Due Rate)to satisfy the Rent provided for in this Lease to be paid,plus all other sums owed by Tenant to Landlord,plus interest on all of the foregoing at the Past Due Rate,then Tenant shall satisfy and pay any such deficiency to Landlord upon demand therefor from time to time,and Tenant agrees that Landlord may file suit to recover any sums falling due under the terms of this paragraph from time to time, and that no delivery or recovery of any portion due Landlord hereunder shall be any defense to any subsequent action brought for any amount not theretofore reduced to judgment in favor of Landlord, nor shall such reletting be construed as an election on the part of Landlord to terminate this Lease unless a written notice of such intention be given to Tenant by Landlord.The foregoing notwithstanding,it is understood and agreed that Landlord may(whether or not the Leased Premises are relet)recover from Tenant that portion of the Allowance allocable to Tenant Improvements not used by subsequent Tenant to the extent such Allowance has not been repaid by Tenant to Landlord amortized over the Term of the Lease.Notwithstanding any such reletting without termination,Landlord may at any time thereafter elect to terminate this Lease for such previous breach. (c) Landlord may make such payments and/or take such actions (including, without limitation, entering upon or within the Leased Premises, by force if necessary) and do whatever Tenant is obligated to do under the terms of this Lease, and Tenant covenants and agrees to reimburse Landlord on demand for any expenses which Landlord may incur in effecting compliance with Tenant's obligations under this Lease, together with interest thereon at the Past Due Rate from the date paid by Landlord. (d) Landlord shall have the right to cause a receiver to be appointed in any action against Tenant to take possession of the Leased Premises and/or to collect the rents or profits derived therefrom. The appointment of such receiver shall not constitute an election on the part of Landlord to terminate this Lease unless notice of such intention is given to Tenant. (e) After terminating this Lease or Tenant's right to possession of the Leased Premises,Landlord may,without notice to Tenant or any other party,remove any and all personal property located in the Leased Premises and either dispose of or store such personal property at Tenant's expense. (f) In addition to the other remedies provided in this Lease,Landlord shall be entitled, to the extent permitted by applicable law,to injunctive relief in case of the violation or attempted or threatened violation, of any of the provisions of this Lease, or to a decree compelling performance of any other provisions of this lease, or to any other remedy allowed at law or in equity. (g) In addition to the other remedies provided in this Lease,if any payment of Rent is not received by Landlord on or before the 5th day after its due date, or if any other payment hereunder due Landlord by Tenant is not received by Landlord on or before the 5th day after the date of delivery by Landlord to Tenant of an invoice or statement for such payment,a late payment charge of three percent(3%)of such past due amount shall become due and payable in addition to all other amounts owed under this Lease. - 16 - Notwithstanding any other remedy or provision set forth in this Lease: (i) if Landlord has made rent concessions of any type or character, or waived any rent, and Tenant defaults at any time during the term of this Lease,the rent concessions,including any waived rent,shall be canceled and the amount of the rent concessions shall be due and payable immediately as if no rent concessions or waiver of any rent had ever been granted; (ii)this Lease may be terminated by Landlord only by written notice of such termination to Tenant given in accordance with the notice provisions of this Lease, and no other act or omission of Landlord shall be construed as a termination of this Lease; (iii) all rights and remedies of Landlord herein or existing at law or in equity are cumulative and the exercise of one or more rights or remedies shall not be taken to exclude or waive the right to the exercise of any other;(iv)Tenant agrees that acceptance of full or partial payments by Landlord after notice of termination or forfeiture will not constitute a waiver of the default, termination, or forfeiture unless Landlord agrees to a waiver in writing, nor affect any legal proceedings taken or to be taken by Landlord except to reduce Tenant's obligation to Landlord by the amount of such payment; and (v) waiver by Landlord of any defaults or breaches by Tenant of any provisions of this Lease shall not bar Landlord thereafter from requiring prompt performance by Tenant of the obligations of this Lease, nor shall Landlord be barred thereafter from immediate exercise of any of Landlord's rights or remedies in case of continuing or subsequent default or violation by Tenant. Section 10.03. LANDLORD'S LIEN. [INTENTIONALLY OMITTED) Section 10.04. Mitigation of Damages (a) Both Landlord and Tenant shall each use commercially reasonably efforts to mitigate any damages resulting from a default of the other party under this Lease. (b) Landlord and Tenant agree to the following criteria in connection with Landlord's obligation to mitigate damages after a default by Tenant under this Lease: (1) Landlord will have no obligation to solicit or entertain negotiations with any other prospective tenants of the Leased Premises until and unless Landlord obtains full and complete possession of the Leased Premises, including without limitation,the final and unappealable legal right to relet the Leased Premises free of any claim of Tenant. (2) Landlord will not be obligated to offer the Leased Premises to a prospective tenant when other premises suitable for that prospective tenant's use are(or soon will be)available in the Project or in any other building which is located in the vicinity of the Project and which is owned by Landlord or by any affiliate of Landlord.For all purposes under this Lease,affiliates of Landlord shall mean and include: (i) any person or entity owning or holding (directly or indirectly) any interest in Landlord;and(ii)any entity in which Landlord or any person or entity owning or holding any interest(directly or indirectly)in Landlord,owns or holds any interest(directly or indirectly). (3) Landlord will not have any obligation to lease the Leased Premises for any rental less than the current rate then prevailing for similar space in the Project(or if no similar space is available in the Project, the current fair market rental then prevailing for similar space in comparable Building in the same market area as the Project) nor shall Landlord be obligated to j enter into a new lease under any terms or conditions that are unacceptable to Landlord under Landlord's then current leasing policies for comparable space in the Project; provided, Landlord will be obligated to lease the Leased Premises to a prospective tenant willing to unconditionally assume Tenant's obligations hereunder for the unexpired portion of the Term provided that such prospective tenant satisfies the criteria set forth in Article 9 above. - 17- (4) Landlord will not be obligated to enter into any lease with any prospective tenant whose reputation is not acceptable to Landlord,in Landlord's sole judgment and opinion,or whose presence or operations in the Building would,in Landlord's sole judgment and opinion: (i)disrupt the tenant mix or balance of the Building; (ii) violate any restriction, covenant or requirement contained in the lease of another tenant in the Building; (iii) adversely affect the reputation of the Building;or(iv)be incompatible with the operation of the Building. (5) Landlord will not be obligated to enter into a lease with any prospective tenant:(i) which does not have, in Landlord's sole judgment and opinion, sufficient financial resources and operating experience to operate the Leased Premises in a first class manner and meet its financial obligations;(ii)whose proposed use of the Leased Premises is not a permitted use under the terms of this Lease. (6) Landlord will not be required to expend any amount of money to alter,remodel or otherwise make the Leased Premises suitable for use by any prospective tenant. (7) Landlord will have no obligation to advertise or expend any sums of money to market the Leased Premises. Landlord and Tenant agree that if Landlord makes the Leased Premises available for reletting under the criteria set forth hereinabove, Landlord will be deemed to have fully satisfied Landlord's obligation to mitigate damages under this Lease and under any law or judicial ruling in effect on the date of this Lease or at the time of Tenant's default. (c) Tenant's right to seek damages as a result of a default by Landlord under this Lease shall be conditioned on Tenant taking all actions reasonably required,under the circumstances,to minimize any loss or damage to Tenant's property or business,or to any of Tenant's officers,employees,agents,invitees, or other third parties that may be caused by any such default of Landlord. ARTICLE ELEVEN:PROVISIONS RELATING TO FINANCING OR SALE OF THE PROJECT Section 11.01. Subordination. Landlord shall have the right to subordinate this Lease to any ground lease,deed of trust or mortgage encumbering the Leased Premises, any advances made on the security thereof and any renewals, modifications, consolidations, replacements or extensions thereof whenever made or recorded. Tenant shall cooperate with Landlord and any lender which is acquiring a security interest in the Leased Premises or the Lease. Tenant shall execute such further documents and assurances as such lender may reasonably require,provided that Tenant's obligations under this Lease shall not be increased in any material way (the performance of ministerial acts shall not be deemed material), and Tenant shall not be deprived of its rights under this Lease. Tenant's right to quiet possession of the Leased Premises during the Lease Term shall not be disturbed if Tenant pays the Rent and performs all of Tenant's obligations under this Lease and is not otherwise in default. If any ground lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of its ground lease,deed of trust or mortgage and gives written notice thereof to Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or mortgage whether this Lease is dated prior or subsequent to the date of said ground lease, deed of trust or mortgage or the date of recording thereof. Section 11.02.Attornment.If Landlord's interest in the Leased Premises is acquired by any ground lessor,beneficiary under a deed of trust,mortgagee, or purchaser at a foreclosure sale,Tenant shall attorn to the transferee of or successor to Landlord's interest in the Leased Premises and recognize such transferee or successor as Landlord under this Lease; provided such lessor, beneficiary or purchaser assumes - 18 - Landlord's obligations hereunder which accrue after such acquisition and agrees not to disturb Tenant's use and possession of the Leased Premises in accordance with the terms and provisions of this Lease. Tenant waives the protection of any statute or rule of law which gives or purports to give Tenant any right to terminate this Lease or surrender possession of the Leased Premises upon the transfer of Landlord's interest. Section 11.03. Signing of Documents.Tenant shall sign and deliver any instrument or documents necessary or appropriate to evidence any such attornment or subordination and non-disturbance or agreement to do so in form reasonably acceptable to Tenant.If Tenant fails to do so within fifteen(15)days after written request from Landlord to execute such documentation or instrument in a form reasonably acceptable to Tenant and such failure continues for two (2)days after an additional notice thereof is hand delivered by Landlord to the Leased Premises and to Tenant, Tenant will pay additional rent hereunder in the amount of$500 per day until such agreement is executed and delivered by Tenant to Landlord. The failure by Tenant to respond in writing within such initial 15 day period to Landlord specifically setting forth any objections to such documentation or instrument will be a deemed approval of the form of such documentation or instrument.After Landlord has addressed any such written objections or comments to the form of such documentation or instrument,Landlord may re-submit same to Tenant in accordance with this Section 11.03 provided that such 15 day period will be reduced to a 5 day period. Such additional rent is in addition to all of Landlord's other legal rights and remedies arising out of such failure by Tenant. Section 11.04. Estoppel Certificates. Tenant shall, from time to time, upon Landlord's written request, execute, acknowledge and deliver to Landlord written estoppel certificates in the form of Exhibit "C"attached hereto and incorporated herein by reference(with such changes and additions as are necessary to complete the form and such qualifications and revisions as may be necessary to make all statements therein factually accurate), or in any other form reasonably requested by Landlord. Tenant shall deliver each requested certificate to Landlord within fifteen(15)days after Landlord's written request for same.If Tenant fails to do so within fifteen (15) days after such written request to execute such certificate in the form attached hereto as Exhibit"C"or in such other from reasonably acceptable to Tenant and such failure continues for two (2) days after an additional notice thereof is hand delivered by Landlord to the Leased Premises and to Tenant,Tenant will pay additional rent hereunder in the amount of$500 per day until such certificate is executed and delivered by Tenant to Landlord. The failure by Tenant to respond in writing within such initial 15 day period to Landlord specifically setting forth any objections to such documentation or instrument will be a deemed approval of the form of such documentation or instrument(provided that Exhibit"C" is deemed approved).After Landlord has addressed any such written objections or comments to the form of such documentation or instrument, Landlord may re-submit same to Tenant in accordance with this Section 11.03 provided that such 15 day period will be reduced to a 5 day period. Such additional rent is in addition to all of Landlord's other legal rights and remedies arising out of such failure by Tenant. Section 11.05.Tenant's Financial Condition.Landlord may request financial statements to verify the net worth of Tenant or any assignee or guarantor of Tenant when Landlord has a reasonable need for such financial information.The parties agree that Landlord shall have a reasonable need for such financial information in the event of default in the payment of rent or other amounts due and owing under the Lease or in the event of the sale of the Project or any interest therein or in the event of the refinancing or mortgaging of the Project. Landlord shall provide Tenant with a written request for such financial statements as Landlord shall reasonably require and Tenant and any assignee, subtenant or guarantor of Tenant,as applicable,shall deliver such financial statements to Landlord within thirty(30)days after receipt of written request from Landlord. Tenant represents and warrants to Landlord that Tenant's financial statement is a true and accurate statement as of the date of such statement. Landlord will use reasonable efforts to treat such information as confidential and not disclose such information without first obtaining a confidentiality agreement that is acceptable to the Tenant. - 19- ARTICLE TWELVE: LEGAL COSTS Section 12.01. Legal Proceedings. If Tenant or Landlord shall be in breach or default under this Lease, such party (the "Defaulting Party") shall reimburse the other party (the "Non-defaulting Party") upon demand for any reasonable legal fees and related costs that the Non-defaulting Party incurs in connection with any breach or default of the Defaulting Party under this Lease, whether or not suit is commenced or judgment entered. The Defaulting Party shall reimburse the Non-defaulting Party for any such reasonable costs or expenses upon ten(10)days written notice from the Non-defaulting Party. In the event that the parties cannot agree on which party is the Defaulting Party,the parties agree to submit that dispute to mediation. Furthermore, if any action for breach of or to enforce the provisions of this Lease is commenced, the court in such action, upon final adjudication, shall award to the party in whose favor a judgment is entered,a reasonable sum as attorneys'fees and costs.The losing party in such action shall pay such reasonable attorneys' fees and costs.Tenant shall also indemnify Landlord against and hold Landlord harmless from all costs, expenses, demands and liability Landlord may incur if Landlord becomes or is made a party to any claim or action(a) instituted by Tenant against any third party, or by any third party against Tenant, or by or against any person holding any interest under or using the Leased Premises by license of or agreement with Tenant;(b)for foreclosure of any lien for labor or material furnished to or for Tenant or such other person;(c)otherwise arising out of or resulting from any act or transaction of Tenant or such other person; or (d) necessary to protect Landlord's interest under this Lease in a bankruptcy proceeding,or other proceeding under Title 11 of the United States Code,as amended.Tenant shall defend Landlord against any such claim or action at Tenant's expense with counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any legal fees or costs Landlord incurs in any such claim or action. ARTICLE THIRTEEN: BANKRUPTCY OR INSOLVENCY Section 13.01. Liquidation.In the event that Tenant shall become a debtor under Chapter 7 of the U.S.Bankruptcy Reform Act of 1978,as amended(the"Bankruptcy Code"),and Tenant's trustee or Tenant shall elect to assume this Lease for the purpose of assigning the same or otherwise, such election and assignment may be made only if the provisions of this Section are satisfied. If Tenant or Tenant's trustee shall fail to assume this Lease within 60 days after the entry of an order for relief,this Lease shall be deemed to have been rejected. Immediately thereupon, Landlord shall be entitled to possession of the Leased Premises without further obligation to Tenant or Tenant's trustee and this Lease, upon the election of Landlord, shall terminate, but Landlord's right to be compensated for damages shall survive, whether or not this Lease shall be terminated. Section 13.02.Reorganization.In the event that a voluntary petition for reorganization is filed by Tenant, or an involuntary petition is filed against Tenant under Chapter 11 of the Bankruptcy Code, or in the event of the entry of an order for relief under Chapter 7 in a case which is then transferred to Chapter 11,Tenant's trustee or Tenant,as debtor-in-possession,must elect to assume this Lease within 60 days from the date of the filing of the petition under Chapter 11 or the transfer thereto, or Tenant's trustee or the debtor-in-possession shall be deemed to have rejected this Lease. Immediately thereupon, Landlord shall be entitled to possession of the Leased Premises without further obligation to Tenant or Tenant's trustee, and this Lease, upon the election of Landlord, shall terminate. Landlord's right to be compensated for damages,shall survive,whether or not this Lease shall be terminated. Section 13.03 Conditions to Assumption.No election by Tenant's trustee or the debtor-in-possess ion to assume this Lease, whether under Chapter 7 or Chapter 11, shall be effective unless each of the following conditions has been satisfied: - 20 - (a) Tenant's trustee or the debtor-in-possession has cured all defaults under this Lease, or has provided Landlord with evidence satisfactory to Landlord that it will cure all defaults capable of being cured by the payment of money within 10 days from the date of such assumption and that it will cure all other defaults under this Lease which are capable of being cured by the performance of any act within 30 days after the date of such assumption. (b) Tenant's trustee or the debtor-in-possession has compensated, or has provided Landlord with evidence satisfactory to Landlord that, within 10 days from the date of such assumption, that it will compensate Landlord for any actual pecuniary loss incurred by Landlord arising from the default of Tenant,Tenant's trustee,or the debtor-in-possession as indicated in any statement of actual pecuniary loss sent by Landlord to Tenant's trustee or the debtor-in-possession. (c) Such assumption will not breach or cause a default under any provision of any other lease, mortgage, financing agreement or other agreement by which Landlord is bound, relating to the Leased Premises. (d) Tenant's trustee or the debtor-in-possession shall (i) provide Landlord with "Assurance", as defined below, of the future performance of each of the obligations under this Lease of Tenant, Tenant's trustee or the debtor-in-possession, and (ii) in addition to any other security deposits held by Landlord, deposit with Landlord, as security for the timely payment of Minimum Monthly Rent and for the performance of all other obligations of Tenant under this Lease, an amount equal to 3 monthly installments of Minimum Monthly Rent(in the amount then payable), and(iii)pay in advance to Landlord on the date each installment of Minimum Monthly Rent is due and payable,one-twelfth of Tenant's annual obligations for Impositions to be made by Tenant pursuant to this Lease. The obligations imposed upon Tenant's trustee or the debtor-in- possession by this subsection shall continue with respect to Tenant or any assignee of this Lease, after the conclusion of proceedings under the Bankruptcy Code. For purposes of the foregoing subsection,the term"Assurance"shall mean no less than: (1) Tenant's trustee or the debtor-in-possession has and will continue to have sufficient unencumbered assets after the payment of all secured obligations and administrative expenses to assure Landlord that sufficient funds will be available to fulfill the obligations of Tenant under this Lease;and (2) To secure to Landlord the obligations of Tenant, Tenant's trustee or the debtor-in-possession and to assure the ability of Tenant,Tenant's trustee or the debtor-in- possession to cure the defaults under this Lease,monetary and/or nonmonetary,there shall have been(A) sufficient cash deposited with Landlord, or(B) the bankruptcy court shall have entered an order segregating sufficient cash payable to Landlord,and/or(C)Tenant's trustee or the debtor-in-possession shall have granted to Landlord a valid and perfected first lien and security interest and/or mortgage in property of Tenant, Tenant's trustee or the debtor-in-possession,acceptable as to value and kind to Landlord. Section 13.04. Conditions to Assignment. If Tenant's trustee or the debtor-in-possession has assumed this Lease pursuant to the terms and provisions of this Section for the purpose of assigning (or elects to assign) this Lease, this Lease may be so assigned only if the proposed assignee has provided adequate assurance of future performance of all of the terms, covenants and conditions of this Lease to be performed by Tenant.As used in this subsection"adequate assurance of future performance"shall mean at least that clauses (2)(B) and (2)(C) of the above definition of"Assurance", and each of the following conditions,has been satisfied: -21 - (a) the proposed assignee has furnished Landlord with a current financial statement audited by a certified public accountant determined in accordance with generally accepted accounting principles consistently applied indicating a credit rating,net worth and working capital in amounts which Landlord reasonably determines to be sufficient to assure the future performance of such assignee of Tenant's obligations under this Lease, but in no event indicating a net worth less than the net worth of Tenant and any guarantors of this Lease,on the date of execution hereof; (b) such assignment will not breach or cause a default under any provision of any other lease,mortgage,financing agreement or other agreement by which Landlord is bound, relating to the Leased Premises;and (c) the proposed assignment will not release or impair any guaranty ofal I or any portion of this Lease. Section 13.05.Reasonable Charges.When,pursuant to the Bankruptcy Code,Tenant's trustee or the debtor-in-possession shall be obligated to pay reasonable use and occupancy charges for the use of the Leased Premises,such charges shall not be less than the Minimum Monthly Rent and all additional amounts payable by Tenant under this Lease and shall be paid at the times and when due as though such charges were Minimum Monthly Rent and such additional payments. ARTICLE FOURTEEN: MISCELLANEOUS PROVISIONS Section 14.01.Landlord's Liability; Certain Duties. (a) As used in this Lease,the term"Landlord"means only the current owner or owners of the fee title to the Leased Premises or Project or the leasehold estate under a ground lease of the Leased Premises or Project at the time in question. Each Landlord is obligated to perform the obligations of Landlord under this Lease only during the time such Landlord owns such interest or title. Any Landlord who transfers its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date of transfer.However, each Landlord shall deliver to its transferee all funds that Tenant previously paid if such funds have not yet been applied under the terms of this Lease. (b) Tenant shall give written notice of any failure by Landlord to perform any of its obligations under this Lease to Landlord and to any ground lessor,mortgagee or beneficiary under any deed of trust encumbering the Leased Premises whose name and address have been furnished to Tenant in writing. Landlord shall not be in default under this Lease unless Landlord (or such ground lessor,mortgagee or beneficiary)fails to cure such non-performance within thirty(30)days after receipt of Tenant's notice.However, if such non-performance reasonably requires more than thirty (30) days to cure, Landlord shall not be in default if such cure is commenced within such thirty(30)-day period and thereafter diligently pursued to completion. (c) If Landlord fails to commence to perform any of its obligations hereunder within thirty(30)days after written notice from Tenant specifying such failure and thereafter to diligently prosecute such cure to completion,Tenant may,as its exclusive remedies,(i)sue for actual damages (but not special or consequential damages which are specifically waived by Tenant) or (ii) cure such failure and Landlord shall reimburse Tenant within thirty (30) days after demand for the reasonable out-of-pocket costs thereof(failing which Tenant may pursue a suit against Landlord for reimbursement of such reasonable costs); provided, however, Tenant shall only be allowed to -22 - cure such failure if(i)such failure is related to the performance of maintenance or repairs within a building which is 100% occupied by Tenant; (b) such failure materially interferes with Tenant's use of the Leased Premises;and(c)Tenant has given Landlord a second(2nd)notice of such failure and Landlord has failed, within ten(10) days following receipt of such notice to cure such failure or give Tenant notice that Landlord disputes such failure and within ten(10)days thereafter submits such dispute to arbitration.Unless and until Landlord fails to so cure any default within such thirty (30)day period(or such longer period of time as may be reasonably required provided that Landlord is diligently prosecuting such cure),Tenant shall not have any remedy or cause of action by reason thereof.All obligations of Landlord hereunder will be construed as covenants,not conditions; and all such obligations will be binding upon Landlord only during the period of its possession of the Leased Premises and not thereafter. The term"Landlord"shall mean only the owner, for the time being, of the Leased Premises and, in the event of the transfer by such owner of its interest in the Leased Premises, such owner shall thereupon be released and discharged from all covenants and obligations of the Landlord thereafter accruing,provided that such covenants and obligations shall be binding during the Lease term upon each new owner for the duration of such owner's ownership. Notwithstanding any other provision of this Lease, Landlord shall not have any personal liability hereunder.In the event of any breach or default by Landlord in any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then owned by Landlord in the Leased Premises or the Project; however, in no event shall any deficiency judgment be sought or obtained against any Landlord in the event the equity in the Project is not sufficient to satisfy a claim or judgment. Section 14.02. Severability. A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this Lease,which shall remain in full force and effect. Section 14.03. Interpretation. The captions of the Articles or Sections of this Lease are to assist the parties in reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the plural shall include the singular.The masculine,feminine and neuter genders shall each include the other.In any provision relating to the conduct, acts or omissions of Tenant, the term "Tenant" shall include Tenant's agents, employees, contractors, invitees, successors or others using the Leased Premises with Tenant's expressed or implied permission. Section 14.04. Incorporation of Prior Agreements; Modifications. This Lease is the only agreement between the parties pertaining to the lease of the Leased Premises and no other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties.Any other attempted amendment shall be void. Section 14.05. Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified mail,return receipt requested,postage prepaid.Notices to Tenant shall be delivered to the address specified in the Basic Terms.Notices to Landlord shall be delivered to the address specified in the Basic Terms.All notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other parry. Section 14.06.Waivers.All waivers must be in writing and signed by the waiving party.Landlord's failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment check from Tenant or in a letter accompanying a payment check shall be binding -23 - on Landlord.Landlord may,with or without notice to Tenant,negotiate such check without being bound to the conditions of such statement. Section 14.07. No Recordation. Tenant shall not record this Lease or any memorandum of this Lease without prior written consent from Landlord. Section 14.08. Binding Effect. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or Tenant. However, Landlord shall have no obligation to Tenant's successor unless the rights or interests of Tenant's successor are acquired in accordance with the terms of this Lease. Section 14.09. Corporate Authority; Partnership Authority. If Tenant is a corporation, each person signing this Lease on behalf of Tenant represents and warrants that he has full authority to do so and that this Lease binds the corporation.If Tenant is a partnership,each person or entity signing this Lease for Tenant represents and warrants that he or it is a general partner of the partnership, that he or it has full authority to sign for the partnership and that this Lease binds the partnership and all general partners of the partnership.Tenant shall give written notice to Landlord of any general partner's withdrawal or addition. Section 14.10.Joint and Several Liability.All parties signing this Lease as Tenant shall be jointly and severally liable for all obligations of Tenant. Section 14.11. Force Majeure. Except as set forth below with respect to Tenant's obligation to pay Rent, if either party cannot perform any of its obligations due to events beyond such parry's control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party's control include, but are not limited to, acts of God, war, civil commotion,labor disputes,strikes,fire,flood or other casualty,shortages of labor or material,government regulation or restriction and abnormal, adverse weather conditions.Notwithstanding any provision herein to the contrary, events beyond Tenant's control shall not excuse Tenant from the requirement to pay all Rent hereunder on a timely basis. Section 14.12. Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are executed, the counterparts shall constitute a single-binding instrument. Landlord's delivery of this Lease to Tenant shall not be deemed to be an offer to lease and.shall not be binding upon either party until executed and delivered by both parties. Section 14.13. Representations and Warranties. To induce Landlord to enter into this Lease, Tenant represents and warrants to Landlord as follows: (a) This Lease is an enforceable obligation of Tenant. (b) Tenant is not a foreign corporation, foreign partnership, foreign trust or foreign estate(as such terms are defined in the Internal Revenue Code of 1986, as amended) and the regulations promulgated thereunder). (c) The financial statements of Tenant and any guarantor of Tenant's obligations which have been provided to Landlord are true and correct in all material respects, have been prepared in accordance with generally accepted accounting principles, and fairly present the respective financial conditions of the subjects thereof as of the respective dates thereof.No materially adverse change has occurred in the financial conditions reflected therein since the respective dates thereof. (d) There are no actions, suits or proceedings pending, or to the best of Tenant's knowledge, threatened,against or affecting it or the Leased Premises or any guarantor of Tenant's obligations -24 - which, if adversely determined, would materially impair the ability of Tenant or any guarantor to satisfy their obligations under or relating to this Lease. (e) Tenant is not in default under any obligation for the payment of borrowed money, for the deferred purchase price of property or for the payment of any rent under any lease agreement, which, either individually or in the aggregate, would adversely affect the financial condition of Tenant, or the ability of Tenant to perform its obligations hereunder, or comply with the terms of this Lease. Section 14.14. Rent Tax. If applicable in the jurisdiction where the Leased Premises are situated, Tenant shall pay and be liable for all rental, sales and use taxes or other similar taxes, if any, levied or imposed by any city, state, county or other governmental body having authority, such payments to be in addition to all other payments required to be paid to landlord by Tenant under the terms of this Lease.Any such payment must be paid concurrently with the payment of the Base Rent, additional rent, operating expenses or other charge upon which the tax is based as set forth above. Section 14.15. Governing Law/Venue. THIS LEASE MUST BECONSTRUED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF MONTANA AND THE LAWS OF THE UNITED STATES OF AMERICA AS APPLICABLE TO TRANSACTIONS WITHIN THE STATE OF MONTANA. TENANT HEREBY SUBMITS TO THE JURISDICTION OF ANY COURT OF COMPETENT JURISDICTION SITTING IN GALLATIN COUNTY,MONTANA. Section 14.16. INTENTIONALLY LEFT BLANK Section 14.17. Construction of Lease. Tenant declares that Tenant has read and understands all parts of this Lease,including all printed parts hereof.It is agreed that,in the construction and interpretations of the terms of this Lease,the rule of construction that a document is to be construed most strictly against the party who prepared the same will not be applied, it being agreed that both parties hereto have participated in the preparation of the final form of this Lease.Wherever in this Lease provision is made for liquidated damages,it is because the parties hereto acknowledge and agree that the determination of actual damages(of which such liquidated damages are in lieu)is speculative and difficult to determine;the parties agree that liquidated damages herein are not a penalty. Section 14.18. Limitation of Warranties. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE. Section 14.19. Waiver and Releases. TENANT SHALL NOT HAVE THE RIGHT TO WITHHOLD OR TO OFFSET RENT OR TO TERMINATE THIS LEASE EXCEPT AS EXPRESSLY PROVIDED HEREIN. TENANT WAIVES AND RELEASES ANY AND ALL STATUTORY LIENS AND OFFSET RIGHTS. ARTICLE FIFTEEN: SPECIAL PROVISIONS Section 15.01.Broker's Fee.Landlord and Tenant represent and warrant to each other that,except for a commission being paid by Landlord pursuant to separate agreement,neither party has contacted a real estate broker or agent entitled to a commission or fee in connection with this Lease and each agrees to indemnify and hold the other harmless from any losses, costs or damages arising out of a breach of such representation or warranty. - 25 - LANDLORD: The Ridge Center,LLC By: Its: Managing Member Dated: Apr 6,2022 TENANT: City Of B eman • By: Its: C i d' Dated: � (.�l �" 2 - ........... �jn' CO.•I�� -26- EXHIBIT"A"-F`Floor Suite (Leased Premises Highlighted in Blue) PROPERTY DESCRIPTION Lots 7, 8, 9, 10 and 11 in Block D of Beall's Second Addition to Bozeman,Gallatin County,Montana, according to the official plat thereof on file and of record in the office of the County Clerk and recorder of Gallatin County,Montana. 1 UP o 7T UP 0 0 ❑ 1> - 1 - EXHIBIT"B" RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THE LEASE The following Rules and Regulations shall be in effect at the Project.Landlord reserves the right to adopt reasonable modifications and additions hereto.In the case of any conflict between these regulations and the Lease,the Lease shall be controlling. 1. Except with the prior written consent of Landlord,no tenant shall conduct any retail sales in or from the Leased Premises(other than internet or telephone sales),or any business other than that specifically provided for in the Lease. 2. Common areas of the Project shall not be obstructed by any tenant or used by it for any purpose other than for ingress to and egress from their respective Leased Premises.Except to facilitate the construction of the Tenant Improvements or to perform maintenance or repairs contemplated in the Lease and performed in accordance with the terms and provisions of the Lease,no tenant and no employees of any tenant shall go upon the roof of any Building in the Project without the written consent of Landlord, which shall not be unreasonably withheld,delayed,or conditioned. 3. Landlord shall in all cases reserve the right to control and prevent access thereto of all persons whose presence in the reasonable judgment of Landlord shall be prejudicial to the safety, character, reputation and interests of the Project and its tenants,provided that nothing herein contained shall be construed to prevent such access to persons with whom Tenant normally deals only for the purpose of conducting its business on the Leased Premises(such as clients,customers,office suppliers and equipment vendors,and the like)unless such persons are engaged in illegal activities. 4. The sashes,sash doors,windows,glass lights,and any lights or skylights that reflect or admit light into the halls or other places in the Building of the Project shall not be covered or obstructed without Landlord's written consent.The toilet rooms,water and wash closets and other water apparatus shall not be used for any purpose other than that for which they were constructed,and no foreign substance of any kind whatsoever shall be thrown therein,and the expense of any breakage,stoppage or damage resulting from the violation of this rule shall be borne by the tenant who,or whose clerks,agents,employees,or visitors,shall have caused it. 5. Except for signage approved by Landlord and installed in accordance with the Lease,no sign, advertisement or notice visible from the exterior of the Leased Premises or any building in the Project shall be inscribed,painted or affixed by Tenant on any part of any such building in the Project or the Leased Premises without the prior written consent of Landlord.If Landlord shall have given such consent at any time,whether before or after the execution of this Lease,such consent shall in no way operate as a waiver or release of any of the provisions hereof or of this Lease,and shall be deemed to relate only to the particular sign,advertisement or notice so consented to by Landlord and shall not be construed as dispensing with the necessity of obtaining the specific written consent of Landlord with respect to each and every such sign,advertisement or notice other than the particular sign,advertisement or notice,as the case may be,so consented to by Landlord. -2- 6. In order to maintain the outward professional appearance of the Building and the Project,all window coverings to be installed at the Leased Premises shall be subject to Landlord's prior approval,not to be unreasonably withheld,delayed,or conditioned. If Landlord,by a notice in writing to Tenant,shall object to any curtain,blind,shade or screen attached to,or hung in,or used in connection with,any window or door of the Leased Premises,such use of such curtain,blind,shade or screen shall be forthwith discontinued by Tenant.No awnings shall be permitted on any part of the Leased Premises. 7. Unless Tenant agrees to pay for such insurance increases,Tenant shall not do or permit anything to be done in the Leased Premises,or bring or keep anything therein,which shall in any way increase the rate of fire insurance on the Building or the Project,or on the property kept therein, or obstruct or interfere with the rights of other tenants, or in any way injure or annoy them;or conflict with the regulations of the Fire Department or the fire laws,or with any insurance policy upon the Building or the Project,or any part thereof,or with any rules and ordinances established by the Board of Health or other governmental authority. 8. No tenant shall sweep or throw or permit to be swept or thrown any dirt or other substance out of the doors or windows of the Building, and Tenant shall not use,keep or permit to be used or kept any foul or noxious gas or substance in the Leased Premises,or permit or suffer the Leased Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building or the Project by reason of noise,odors and/or vibrations,or interfere in any way with other tenants or those having business therein,nor shall any animals or birds be kept in or about the Building or the Project. 9. Except for the use of refrigerators,ice makers,soft drink dispensing machines,microwave ovens and coffee makers for Tenant's personal use,no cooking shall be done or permitted by Tenant on the Leased Premises,nor shall the Project be used for lodging. 10. Tenant shall not use or keep in the Project any kerosene,gasoline,or inflammable fluid or any other illuminating material,or use any method of heating other than that supplied by Landlord. 11. [Intentionally omitted] 12. Each tenant,upon the termination of its tenancy,shall deliver to Landlord all the keys of offices, rooms and toilet rooms which shall have been furnished such tenant or which such tenant shall have had made,and in the event of loss of any keys so furnished,shall pay Landlord therefor. 13. [Intentionally omitted] 14. Tenant shall see that the windows and doors of the Leased Premises are closed and securely locked before leaving the Building and Tenant shall exercise reasonable care and caution that all water faucets or water apparatus are entirely shut off before Tenant or Tenant's employees leave the Building so as to prevent waste or damage. 15. Subject to Tenant's normal security measures,Tenant shall not alter any lock or install a new or additional lock or any bolt on any door of the Leased Premises without prior written consent of Landlord, which shall not be unreasonably withheld,delayed,or conditioned. If Landlord shall give its consent, Tenant shall in each case furnish Landlord with a key for any such lock. - 3 - 16. No shopping cart,or other vehicle or any animal shall be brought into the Leased Premises or the halls,corridors,elevators or any part of any building in the Project by Tenant. 17. Landlord shall have the right to prohibit the use of the name of the Building or the Project or any other publicity by Tenant which in Landlord's reasonable opinion tends to impair the reputation of the Building or the Project or their desirability for other tenants,and upon written notice from Landlord, Tenant will refrain from or discontinue such publicity. 18. Tenant shall not erect any aerial or antenna on the roof or exterior walls of the Leased Premises, the Building,or the Project without the prior written consent of Landlord,which shall not be unreasonably withheld,delayed,or conditioned. -4- EXHIBIT"C" TENANT ESTOPPEL AGREEMENT THE STATE OF MONTANA § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF GALLATIN § THAT WHEREAS, The Ridge Center,LLC("Landlord")is the current owner of the real property described on Exhibit"A"attached hereto and incorporated herein by reference("Property");and WHEREAS,the tenant listed below("Tenant")occupies certain space in the improvements constructed upon the Property(the"Leased Premises")under the terms and provisions of that certain lease agreement,a copy of which is attached hereto as Exhibit`B"and is incorporated herein by reference (the"Lease"); and WHEREAS,Landlord has requested that Tenant deliver this Tenant Estoppel Agreement under the terms and provisions of the Lease;and NOW,THEREFORE,Tenant hereby certifies and agrees as follows: 1. Except as specifically described herein,the Lease is in full force and effect and has not been assigned, supplemented,modified,or amended,and there do not exist any other agreements concerning the Leased Premises,whether oral or written,between Tenant and Landlord.The copy of the Lease which is attached hereto as Exhibit`B"is full,complete and accurate in all respects. Without limitation on the foregoing,Tenant warrants and represents that:(i)copies of the original lease agreement and all amendments thereto,if any,are included within Exhibit`B"attached hereto and are referred to herein collectively as the"Lease";(ii)there are no agreements between Landlord and Tenant concerning the Property or the Leased Premises other than those set forth in the Lease;(iii)Tenant has no rights or options to renew or extend the term of the Lease except as expressly provided in the Lease;(iv)Tenant has no options to purchase all or any portion of the Property except as expressly provided in the Lease; and(v)Tenant does not have any right,title or interest with respect to the Leased Premises other than as a lessee under the Lease. 2. Except as specifically described herein,each of the obligations of Landlord and Tenant to be performed to date under the Lease has been performed.There are no defaults under the Lease by either the Landlord or by the Tenant,and no acts on the Landlord's or Tenant's part have occurred which,with notice or lapse of time,or both,may become a default under the Lease. 3. The term of the Lease has commenced and any applicable rent is presently accruing under the Lease.No"discounts","free rent",or"discounted rent"has been agreed to or are in effect except as provided in the Lease. 4. Tenant is in(and has accepted)possession of the Leased Premises,and any improvements required by the terms to be constructed by the Landlord under the Lease have been completed to the satisfaction of the Tenant.There are no understandings,contracts,agreements, - 5 - subleases,assignments,or commitments of any kind whatsoever with respect to the Lease or the Leased Premises except as expressly provided in the Lease. 5. There are no offsetting claims,defenses,or counterclaims against rents,and no prepaid rents paid except as may be reflected in the Lease.No rent has been paid by Tenant in advance under the Lease,except for the current month. 6. A security deposit of$8,657.22 has been paid by Tenant and is currently being held by the Landlord. 7. Tenant agrees that upon the acquisition of the Property by any purchaser of the Property("Purchaser")or by any lender foreclosing any lien against the Property("Lender"),Tenant will attorn and does attorn and agrees to recognize and does recognize such Purchaser or Lender as landlord on the condition that such Purchaser or Lender agrees by written instrument delivered to Tenant(i)to assume all obligations of Landlord under the Lease accruing after the date of transfer and (ii)to not disturb Tenant's possession of the Demised Premises and(iii)to recognize the Lease;subject however to the rights and remedies thereunder of Landlord in the event of a default by Tenant.The foregoing is subject to the qualification that such Purchaser or Lender shall have no liability or responsibility to Tenant,whether arising out of the Lease,by operation of law,or otherwise,for any cause of action or matter not disclosed herein or that accrues after such Purchaser or Lender ceases to own a fee interest in the Property. 8. Tenant agrees to execute such documents as any Purchaser or Lender reasonably requests for the purpose of subordinating the Lease to any mortgage or deed of trust to be placed upon the Property from time to time,provided that such subordination is subject to Tenant's continued quiet enjoyment of the Leased Premises for so long as Tenant is not in default under the Lease.Tenant further agrees to execute and deliver any estoppel certificates reasonably requested by any Purchaser or Lender from time to time in connection with the sale or encumbrance of the Leased Premises or the Property. 9. Tenant certifies that there are no unpaid bills relating to any materials furnished or labor performed in connection with the construction of any improvements to the Leased Premises by,through or under Tenant,and no liens have been filed against the Leased Premises or the Property in connection with the construction of any improvements to the Leased Premises or the Property by,through or under Tenant. 10. This Tenant Estoppel Agreement is made and given with the understanding that any Purchaser or Lender may rely on it in purchasing the Property or in making a loan which is secured by a lien against the Property,and that the certifications and representations made herein shall survive such acquisition or loan. X l Executed this day of 20Q �i TENANT: City of Bozeman By: _.Q31.Wd-- Printed k-) Title: - 6- 7 E Beall Lease Final Final Audit Report 2022-04-06 Created: 2022-04-06 By: Ryan Springer(Ryan.Springer@SterlingCREadvisors.com) Status: Signed Transaction ID: CBJCHBCAABAA7oPozOjGutNArLriaNZPKpdWFLEMEhma 7 E Beall Lease Final" History Document created by Ryan Springer(Ryan.Springer@SterlingCREadvisors.com) 2022-04-06-4:41:55 AM GMT-IP address: 174.45.97.125 Document emailed to Cory Lawrence (coryl@offthebeatenpath.com)for signature 2022-04-06-4:45:02 AM GMT Email viewed by Cory Lawrence (coryl@offthebeatenpath.com) 2022-04-06-5:04:14 AM GMT-IP address: 104.28.116.192 Co Document e-signed by Cory Lawrence (coryl@offthebeatenpath.com) Signature Date:2022-04-06-12:42:21 PM GMT-Time Source:server-IP address:72.175.254.122 Agreement completed. 2022-04-06-12:42:21 PM GMT Q Adobe Acrobat Sign BOZ E MANMT Utilities City of Bozeman Utilities 20 E Olive St Bozeman, MT 59715 April 5, 2022 Re: Loss Acknowledgement Statement: The City of Bozeman acknowledges that any losses paid on behalf of the additional insured/additional covered party will be credited to the City of Bozeman for deductible and rating purposes as it relates to the executed lease agreement. Director of Utilities City of Bozeman John Alston 20 East Olive Street P.: ., Box 1230 o . , . © , . B . MT 59771-1230 Tao, 406-582.2301 THE MOST LIVABLE PLACE .