Resolution No. 8512r
r
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
RESOLUTION NO. 8512
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
VERNON APPROVING AND AUTHORIZING THE EXECUTION OF A
LEASE BY AND BETWEEN THE CITY OF VERNON AND
UNIMAGINABLE, LLC FOR THE VERNON BUSINESS AND
TECHNOLOGY DEVELOPMENT CENTER
WHEREAS, the City of Vernon (the "City") is a municipal
corporation and a chartered city of the State of California organized
and existing under its Charter and the Constitution of the State of
California; and
WHEREAS, the City is the owner of certain real property
located at 3375 Slauson Avenue in the City of Vernon (the "Property"),
which is surplus to the City's present needs; and
WHEREAS, the City has constructed a Vernon Business and
Technology Development Center (the "Business Center") on the Property
to assist businesses to locate in the City and to provide fiber optic
service to existing businesses in the City; and
WHEREAS, Section 37380(a) of the Government Code of the State
of California provides that a city may lease property owned or held or
controlled by it, or any of its departments, for a term not to exceed
55 years; and
WHEREAS, Section 37395 of the Government Code of the State ofi
California provides that a city may lease property for commercial
development for business purposes, when the governing body determines
that the property is not required for other city purposes; and
WHEREAS, on July 27, 2004, the Finance Committee considered
the recommendation of Bruce V. Malkenhorst, the Director of Finance,
dated July 22, 2004, that a lease with Unimaginable, LLC, dba Meli-Melo
t
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Jeans, be approved and executed for a monthly rental rate of $2,210.00.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF VERNON AS FOLLOWS:
SECTION 1: The City Council of the City of Vernon hereby
Ifinds and determines that the recitals contained hereinabove are true
land correct.
SECTION 2: The City Council of the City of Vernon hereby
approves the Vernon Business and Technology Development Center Lease
with Unimaginable, LLC, dba Meli-Melo Jeans, a copy of which is
attached hereto as Exhibit A and incorporated by reference.
SECTION 3: The City Council of the City of Vernon hereby
authorizes the Mayor and the City Clerk to execute said Lease for, and
on behalf of, the City of Vernon.
SECTION 4: The City Council of the City of Vernon hereby
directs the City Clerk, or his designee, to send one fully executed
(Lease to:
Unimaginable, LLC
Attn. Michael J. Muellerleile, President
4100 Newport Place, Suite 830
Newport Beach, CA 92660
SECTION 5: The City Clerk of the City of Vernon shall
certify to the passage of this resolution, and thereupon and
thereafter the same shall be in full force and effect.
APPROVED AND ADOPTED this 4th day of August, 2004.
ATTEST: EONIS C. MAL URG, Mayor
BRUCE V. MALKENHORST, City Clerk
- 2 -
t
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do
hereby certify that the foregoing Resolution, being Resolution No.
8512, was duly adopted by the City Council of the City of Vernon at a
regular meeting of the City Council duly held on Wednesday, August 4,
2004, and thereafter was duly signed by the Mayor of the City of
Vernon.
I (SEAL)
BRUCE V. MALKENHORST, City Clerk
- 3 -
EXHIBIT
VA&
LEASE
VERNON BUSINESS AND TECHNOLOGY DEVELOPMENT CENTER
This Vernon Business and Technology Development Center Lease ("Lease") is
entered into this 261h day of July, 2004, by and between the City of Vernon ("LESSOR'),
located at 3375 Slauson Ave., Vernon, California 90058, and Unimaginable, LLC, a California
Limited Liability Company ("LESSEE").
In consideration of the mutual promises, covenants and rents described below,
LESSOR does hereby lease and let to LESSEE, and LESSEE does hereby lease from LESSOR,
the Premises described below on the terms and conditions set forth below.
Premises and Use of VBTDC.
1.1 Premises. LESSEE hereby leases from LESSOR that certain floor
space of approximately 2210 rentable square feet located on the I" floor of the facility known as
the Vernon Business and Technology and Development Center (the "VBTDC"), as identified
and marked on the floor plan of the Premises attached hereto as Exhibit A and made a part hereof
(the "Premises").
1.2 Common Areas. LESSEE shall, during the term of this Lease, be
entitled to use the Common Areas on a non-exclusive basis at no charge. The Common Areas
are defined as all areas and facilities outside the Premises and within the exterior boundary line
of the LESSOR's property that are provided and designated by the LESSOR from time to time
for the general non-exclusive use of the tenants of the VBTDC. The Common Areas may be
used by LESSEE and its employees, suppliers, customers, contractors, and invitees. The
Common Areas include the hallways, public restrooms, break areas, reception area, parkin
areas, loading areas, trash areas, and roadways. Usage of the Common Areas is subject to such
reasonable rules and regulations as LESSOR may implement from time to time and deliver to
LESSEE in writing, and is subject to any rights, powers, and privileges reserved by LESSOR
under the terms hereof or under such terms as may be subsequently adopted by LESSOR and
provided to LESSEE in writing.
1.3 Conference Room. LESSEE may have reasonable use of the
VBTDC conference room at no charge, which usage is to be pre -scheduled with the Building
Receptionist. Usage will be available on a first come, first served basis; provided, however, that
if LESSOR, in its sole and absolute discretion, determines that a tenant of the VBTDS is using
the conference room on an excessive basis that adversely affects the rights of other tenants in the
VBTDC to use the conference room, LESSOR may give other tenants the usage of the
conference room, regardless of the first come, first served policy. LESSOR does not guarantee
availability of the conference room at any time. Lack of availability of the conference room
shall not constitute a breach of this Lease by the LESSOR or constitute a constructive eviction,
or allow LESSEE to make any deductions of its rent or entitle LESSEE to any other right or
remedy. LESSEE acknowledges that the availability of the conference room is merely an
accommodation of the LESSOR, and LESSOR is not obligated to make it available at any time
for any purpose.
Lease - Unimaginable, LLC
1.4 Parking. LESSEE is entitled to one unreserved parking space in
the VTBDC parking lot for every 350 rentable square feet of space in the Premises, such that
LESSEE shall have 6 unreserved parking spaces hereunder. Use of the parking lot is at no
charge, and is subject to such reasonable rules and regulations as LESSOR may post or deliver to
LESSEE in writing from time to time.
1.5 Keys. LESSEE has been provided with 2 keys to the Premises and
2 access cards to the building, all of which are to be returned to LESSOR upon the Expiration
Date or earlier termination of this Lease.
2. Term.
2.1 Term of Lease. The term of this Lease (the "Term") shall be
twelve (12) months (the "Term"), commencing on the Commencement Date, as defined below,
and expiring on the last date of the 12th month after the Commencement Date (the "Expiration
Date"), subject to earlier termination as set forth herein, and further subject to possible extension
on the terms set forth in Paragraph 5.2.
2.2 Commencement Date and LESSOR's Improvements
2.2.1 Construction of Shell. LESSOR shall deliver the
Premises to LESSEE with the Shell constructed. The Shell shall mean that walls and existing
doors are in place and services that are described in Paragraph 7 that are to be provided by
LESSOR are in place. The "Anticipated Delivery Date" shall be August 1st, 2004. The date on
which the LESSOR delivers the Premises to LESSEE with the Shell constructed shall be the
"Commencement Date". All obligations under the Lease, including the obligation to pay rent
and to provide insurance as described herein, shall commence on the Commencement Date. In
no event shall LESSEE commence use of the Premises for business purposes until the City of
Vernon has issued a certificate of occupancy or other permit that allows legal occupancy of the
Premises.
2.2.2 Improvements by LESSOR. LESSOR has agreed that it
will, at its sole cost, remove one existing three foot door and replace it with two two and a half
foot doors, so as to provide LESSEE with a double door that is approximately five feet wide.
LESSEE acknowledges and agrees that the replacement doors will not be installed prior to the
Commencement Date. LESSEE shall use commercially reasonable efforts to have the
replacement doors installed on a reasonably prompt basis following the Commencement Date.
In no event will any delay in the installation of the replacement doors constitute a constructive
eviction or constitute a default by LESSOR hereunder, and LESSEE shall have no rights, claims,
or remedies arising out of any delay in the installation of the replacement doors, and shall not
withhold any portion of its rent during the time period prior to the installation of the replacement
doors.
2.3 Delay in Delivery. If for any reason LESSOR is unable to deliver
the Premises to LESSEE on the Anticipated Delivery Date, this Lease shall not be void or
voidable, nor shall LESSOR be liable to LESSEE for any damage resulting from LESSOR's
inability to deliver such possession. However, LESSEE shall not be obligated to pay the rent
2
Lease - Unimaginable, LLC
until such possession of the Premises has been delivered to LESSEE by LESSOR. Except for
such delay in the commencement of rent, LESSOR's failure to give possession on the
Anticipated Delivery Date shall in no way affect LESSEE's obligations hereunder. If possession
of the Premises is not tendered by LESSOR within ninety (90) days after the Anticipated
Delivery Date, then LESSEE shall have the right to terminate this Lease by giving written notice
to LESSOR within ten (10) days after such failure. If such notice of termination is not so given
by LESSEE within said ten (10) day time period, then this Lease shall continue in full force and
effect.
2.4 Memorandum of Commencement Date. Upon LESSOR's request,
the parties shall execute a memorandum setting forth the Commencement Date. If LESSEE does
not sign the memorandum within 10 business days of LESSOR's request, the Commencement
Date shall be deemed to be the date set forth on the memorandum prepared by LESSOR.
2.5 Holding Over. If LESSEE fails to deliver possession of the
Premises on the Expiration Date, or earlier termination of this Lease, but holds over after the
expiration or earlier termination of this Lease without the express prior written consent of
LESSOR, such tenancy shall be construed as a monthly tenancy on the same terms and
conditions as are contained herein, except that the rent payable by LESSEE during such period of
holding over shall automatically increase as of the Expiration Date to an amount equal to one
hundred fifty percent (150%) of the rent payable by LESSEE for the calendar month
immediately prior to the date when LESSEE commenced such holding over (the "Holdover
Rent"). Such Holdover Rent shall be paid during such period as -LESSEE retains possession of
the Premises. However, LESSEE's payment of such Holdover Rent, and LESSOR's acceptance
thereof, shall not constitute a waiver by LESSOR of any of LESSOR's rights or remedies with
respect to such holding over, nor shall it be deemed to be a consent by LESSOR to LESSEE's
continued occupancy or possession of the Premises. Furthermore, if LESSEE fails to deliver
possession of the Premises to LESSOR upon the expiration or earlier termination of this Lease,
then, in addition to any other liabilities to LESSOR accruing therefrom, LESSEE shall protect,
defend, indemnify and hold LESSOR harmless from all loss, costs (including reasonable
attorneys' fees and expenses) and liability resulting from such failure, including without limiting
the foregoing, any claims made by any succeeding tenant arising out of LESSEE's failure to so
surrender, and any lost profits to LESSOR resulting therefrom.
3. Rent and Charges; Security Deposit.
3.1 Gross Rent. Upon execution of this Lease, LESSEE shall pay to
the LESSOR the sum of $4,420.00, which is payment of the first and last month's rent. LESSEE
shall continue to pay rent in the amount of $2,210.00 per month ($1.00 per rentable square foot
per month), on the first day of each succeeding month thereafter during the Term of this Lease
(except for the -last month's rent, which has been prepaid). LESSOR and LESSEE intend and
agree that this Lease shall be a full service gross lease and that all taxes, operating expenses and
other costs, expenses and obligations of every kind and nature whatsoever with respect to the
Premises and the use thereof arising during the Term shall be paid by LESSOR except as
otherwise expressly set forth in this Lease.
Cease o Unimaginable, LLC
3.2 Payment Procedures. The rent and any additional charges payable
hereunder shall be paid by the LESSEE to City of Vernon - BTDC, 3375 Slauson Ave., Vernon,
California 90058, or such other name and address as LESSOR may provide to LESSEE in
writing, without prior demand therefor, and without any deduction or set-off whatsoever. Rent is
due and payable on the first day of each month and additional charges are.due and payable
within 30 days of date of invoice.
3.3 Late Charge and Interest. LESSEE acknowledges that late
payment or rent or additional charges by LESSEE to LESSOR will cause LESSOR to incur costs
not contemplated by this Lease, the exact amount of which are extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and accounting charges,
administrative overhead, and late charges that may be imposed on LESSOR for late payment.
Therefore, if any installment of rent or other payment due from LESSEE hereunder is not
received by LESSOR within five (5) days after the date it becomes due, LESSEE shall pay to
LESSOR on demand an additional sum equal to ten percent (10%) of the overdue amount as a
late charge. The parties agree that the late charge represents a fair and reasonable settlement
against the costs that LESSOR will incur by reason of LESSEE's late payment. Every
installment of rent and any other payment due hereunder from LESSEE to LESSOR which is not
paid five (5) days after the same becomes due and payable shall, in addition to any late charge
payable by LESSEE, bear interest at the rate of ten percent (10%) per annum from the date that
the same originally became due and payable until the date it is paid, which interest payment shall
be due and payable immediately upon demand by LESSOR. Acceptance of any late charge or
interest shall not constitute a waiver of LESSEE's default with respect to the overdue amount, or
prevent LESSOR from exercising any of the other rights and remedies available to LESSOR.
3.4 Charges for Additional Services. In addition to the above
described rent, LESSEE shall pay to LESSOR any sums set forth in Paragraph 7 for telephone
answering service and similar services, if any, used by LESSEE in the operation of its business at
the Premises.
3.5 Security Deposit. LESSEE shall deposit with -LESSOR, upon
LESSEE's execution of this Lease, the amount of $1,000.00 (the "Security Deposit") as security
for LESSEE'S faithful performance of its obligations under this Lease. LESSOR and LESSEE
agree that the Security Deposit may be commingled with funds of LESSOR and LESSOR shall
have no obligation or liability for payment of interest on the Security Deposit. If LESSEE fails
to pay any rent or other amount when due and payable under this Lease, or fails to perform any
of the other terms hereof as and when required, LESSOR may appropriate and apply or use all or
any portion of the Security Deposit for rent payments or any other amount then due and unpaid,
for payment of any amount for which LESSOR has become obligated as a result of LESSEE's
default or breach, and for any loss or damage sustained by LESSOR as a result of LESSEE's
default or breach. LESSOR may so apply or use the Security Deposit without prejudice to any
other remedy that LESSOR may have by reason of LESSEE's default or breach. If LESSOR so
uses any of the Security Deposit, LESSEE shall, within ten (10) days after written demand
therefor, restore the Security Deposit to its full amount. LESSEE's failure to do so shall
constitute an act of default hereunder and LESSOR shall have the right to exercise any remedy
available to it in law or in equity. Within thirty (30) days after the Term has expired or LESSEE
has vacated the Premises, whichever shall last occur, LESSOR shall return such portion of the
4
Lease -,Unimaginable, LLC
Security Deposit to LESSEE that has not been used or retained by LESSOR in accordance with
the terms of this Paragraph.
4. Permitted Use of Premises; Obligations re Occupancy.
4.1 Permitted Use and Covenant of Continuing Operations. LESSEE
shall use and occupy the Premises strictly in accordance with the terms of this Lease and in
accordance all governmental rules and regulations pertaining to the business of LESSEE and all
governmental rules and regulations related to the use and occupancy of the VBTDC. LESSEE
may use the Premises only for the following purpose: Manufacture of high end denim
clothing. LESSEE acknowledges and agrees that its continuing use of the Premises for the
purpose described in this Paragraph is a material inducement to LESSOR's entering into this
Lease, and LESSEE covenants and agrees that it shall operate its business during all normal
business hours, and shall have such materials, supplies, equipment, and personnel on site as are
reasonably required to operate the business.
4.2 Condition of Premises. LESSEE acknowledges that it has made its
own inspection of the Premises, and accepts the Premises in their "as -is" condition. LESSEE
further acknowledges that LESSOR has made no representation or warranty, express or implied,
except as are contained in this Lease and its Exhibits, regarding the condition, suitability or
usability of the Premises or the VBTDC for the purposes intended by LESSEE. LESSEE's
taking possession of the Premises for the purpose of conducting LESSEE's normal business
operations in the Premises shall be deemed conclusive evidence that, as of the Commencement
Date, the Premises are in good and satisfactory order and repair, and suitable for its business
purposes, as described above.
4.3 LESSEE's Compliance with Laws. LESSEE will remain in full
compliance with the terms and conditions of all permits and licenses issued to it by any
governmental authority on account of any or all of its activities on the Premises. Lessee shall not
use, permit to be used, or permit anything to be done in or about the Premises which will in any
way violate any laws, statutes, ordinances, rules, orders or regulations duly issued by any
governmental authority having jurisdiction over the Premises, or by the Board of Fire
Underwriters (or any successor thereto) (collectively, the "Codes"). LESSEE shall, at its sole
expense, promptly remedy any violation of such Codes relating to the condition of the Premises;
provided, however, that nothing contained in this paragraph shall require LESSEE to make any
structural changes, or other alterations, additions or improvements of a'capital nature to the
Premises, unless such changes are required due to LESSEE's improvements, the nature of
LESSEE's business and operations, or the acts or conduct of LESSEE or LESSEE's employees,
agents, clients, contractors, directors, invitees, licensees, officers, directors, partners or
shareholders (collectively, "LESSEE's Parties").
4.4 LESSEE's Obligation to Maintain. LESSEE shall, at LESSEE's
sole expense, maintain the non-structural portions of the Premises in good order and repair, and
shall also keep the Premises in neat, clean, attractive, and safe condition. Further, LESSEE shall
pay the cost of any injury, damage or breakage in, upon or to the Premises created by LESSEE's
negligence or willful misconduct or the negligence or willful misconduct of LESSEE's Parties.
5
Lease - Unimaginable, LLC
4.5 Hazardous Material and Hazardous Waste. LESSEE specifically
agrees that, except for limited quantities of office materials customarily used in normal business
operations of tenants in office buildings, LESSEE shall not engage or permit at any time, any
operations or activities upon, or any use or occupancy of the Premises or Common Areas or
other areas of the VBTDC, for the purpose of or in any way involving the handling,
manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or
disposal (whether legal or illegal, accidental or intentional) of any hazardous substances,
materials or wastes, or any wastes regulated under any local, state or federal law (collectively,
"Hazardous Material"). If LESSEE's normal business operations require the use or creation or
disposal of any Hazardous Material, LESSEE shall fully describe such use to LESSOR in writing
and obtain LESSOR's prior written consent to such usage prior to using, creating, or disposing of
any Hazardous Material, which consent may be given or denied in LESSOR's sole judgment. If
LESSEE is permitted to use, create, or dispose of any Hazardous Material, LESSEE shall be
fully responsible for complying with all of LESSOR's rules related to such, and to all applicable
Codes, and shall ensure that the Premises and the VBTDC are free of any contamination
resulting from such Hazardous Materials at the expiration or earlier termination of this Lease.
LESSEE shall, during the Term, remain in full compliance with all applicable Codes governing
the handling, manufacturing, treatment, storage, disposal, discharge, use, and transportation of
Hazardous Material.
4.6 Damaged or Defective Systems. LESSEE shall give prompt notice
to LESSOR if LESSEE becomes aware of any damage to or defective condition in any part of
the water, sewer, electrical, HVAC or other system serving, located in, or passing through, the
Premises or servicing the VBTDC. Provided that the repair or remedy of said damage or
defective condition is within the reasonable control of LESSOR, LESSOR shall use reasonable
efforts to remedy such damage or defect with reasonable diligence; provided, however, that
except in the case of LESSOR's gross negligence or willful misconduct, LESSOR shall not be
liable to LESSEE for delay in repair or failure to repair. LESSEE shall not be entitled to claim
any damages arising from any such damage or defective condition nor shall LESSEE be entitled
to claim any eviction by reason of any such damage or defective condition. Furthermore, if such
damage or defective condition was caused by, or is attributed to, any act, omission, negligence,
or misconduct by LESSEE or LESSEE's Parties, the cost of the remedy thereof shall be paid by
LESSEE.
4.7 LESSOR's Reservation of Rights. LESSOR specifically reserves
to itself use, control and repair of the structural portions of all perimeter walls of the Premises,
any balconies, terraces or roofs adjacent to the Premises, and any space in and/or adjacent to the
Premises used for shafts, stairways, pipes, conduits, cable trays, ducts, mail chutes, conveyors,
pneumatic tubes, electric or other utilities, sinks, telephone/communication rooms, fan rooms or
other VBTDC facilities, and the use thereof, as well as access thereto through the Premises.
LESSOR also specifically reserves to itself the following rights, so long as LESSEE's access to
and use of the Premises and parking is not materially impaired thereby: To have pass keys to the
Premises; to grant to anyone the exclusive right to conduct any particular business in the
VBTDC, so long as it does not prohibit LESSEE's use of the Premises for LESSEE's specified
use; to enter the Premises at any reasonable time with reasonable notice (except for emergencies,
in which case no notice shall be required) to inspect, repair, alter, improve, update or make
additions to the Premises or the VBTDC; to exhibit the Premises to prospective future tenants
Lease - Unimaginable, LLC 6
upon not less than 24 hours prior notice; to, repair, alter, make additions to, improve, or decorate
all or any portion of the VBTDC or Premises at any reasonable time with reasonable notice
(except for emergencies, in which case no notice shall be required); and to take such other
actions as may reasonably be necessary when the same are required to preserve, protect or
improve the Premises or the VBTDC at any reasonable time with reasonable notice (except for
emergencies, in which case notice shall not be required).
4.8 Relocation. If LESSOR determines that it is necessary or
appropriate, in order to best meet the needs of the VBTDC or other tenants, to relocate LESSEE,
then LESSOR shall have the right at any time, and from time to time, after giving LESSEE a
minimum of ninety (90) days prior written notice, to relocate LESSEE to space elsewhere in the
VBTDC in a space of approximately the same size, configuration and quality of tenant
improvements as the Premises (the "Substitute Premises"). LESSOR shall pay all costs and
expenses incurred as a result of such relocation. If LESSOR relocates LESSEE to the Substitute
Premises, each and every term, covenant and condition of this Lease shall remain in full force
and effect and be deemed applicable to the Substitute Premises, as though LESSEE. and
LESSOR had entered into an express written amendment of this Lease with respect thereto,
except that if the approximate rentable square footage of the Substitute Premises is less than that
of the Premises, the rent shall 'be appropriately reduced, and if the approximate rentable square
footage of the Substitute Premises is more than that of the Premises, the rent shall be based on
the square footage of the Premises prior to the relocation, and shall not increase.
4.9 Rules and Regulations. LESSEE shall observe and comply with
the rules and regulations set forth in Exhibit B, and such other reasonable and non-discriminatory
rules and regulations as LESSOR may adopt and communicate to LESSEE in writing at any
time. However, if any conflict arises between the provisions of this Lease and any such rule or
regulation, the provisions of this Lease shall control. LESSOR shall not be responsible to
LESSEE for the failure of any other tenants or occupants of the VBTDC to comply with said
rules and regulations.
4.10 Alterations. LESSEE may not make any alterations, additions,
modifications, or improvements (collectively, "Alterations") to the Premises without obtaining
LESSOR's prior written consent, which consent may be granted or denied in the sole discretion
of LESSOR. If LESSOR does approve any such Alterations, LESSOR may impose any
conditions on its approval that LESSOR, in its sole discretion, believes are necessary or
appropriate, including, without limitation, the right to select or approve the contractor, the right
to require additional security or a bond to ensure LESSEE's payment for the Alterations, the
right to require that LESSEE obtain all necessary permits, and other such requirements as
LESSOR may elect to impose. All such Alterations shall be made at LESSEE's cost- and
LESSEE shall not cause or permit any lien against the VBTDC, and if any lien is placed against
the VBTDC, LESSEE shall, within ten days, cause such lien to be removed. All Alterations
made by LESSEE shall be made in accordance with all applicable Codes and with good
materials and workmanship.
Lease - Unimaginable, LLC %
5. LESSEE's Space Needs.
5.1 Additional Space Needs. If at any time during the Term, LESSEE
provides notice to LESSOR that LESSEE requires additional space, LESSOR shall use its
commercially reasonable efforts to provide to LESSEE such additional space that LESSEE
requires either within the VBTDC, if LESSEE continues to require the services provided by the
VBTDC or elsewhere in the City of Vernon if (a) LESSEE no longer requires the services
provided by the VBTDC or (b) the appropriate amount of space is not available in the VBTDC.
If LESSEE signs a lease for space either within the VBTDC or elsewhere in the City of Vernon,
LESSOR shall terminate this Lease, effective as of the commencement date of the new lease for
premises within the VBTDC or elsewhere in the City of Vernon without penalty or payment of a
termination fee. LESSEE shall pay all relocation expenses and shall leave the Premises in the
condition otherwise required under this Lease.
5.2 Extended Term. So long as LESSEE has not been in default under
-this Lease during the Term, if LESSEE provides written notice to LESSOR at least six (6)
months prior to the Expiration Date that LESSEE desires to extend the Term, and LESSOR has
not leased the Premises to another party, and LESSEE is not in default under this Lease as of the
last day of the original Term, LESSOR shall lease the Premises to LESSEE for an extended term,
not to exceed an additional 12 months, on the terms and conditions of this Lease, including the
rent set forth herein.
6. Assignment and Sublease.
6.1 Permission Required to Assign or Sublease. LESSEE shall not
assign this Lease, sublease the Premises or permit the Premises to be used by any person or
entity other than LESSEE, or encumber LESSEE's interest in the Lease or the Premises without
first obtaining LESSOR's written consent, which consent shall not be unreasonably withheld.
Any assignment, mortgage, pledge, encumbrance, transfer or sublease (collectively, any
"Transfer") without LESSOR's prior written consent shall be voidable, and shall constitute a
default under this Lease.
6.2 Voluntary Assignment due to Changes in Structure of LESSEE.
Any change of stock ownership or control of LESSEE shall constitute an assignment requiring
the consent of LESSOR as described in this Lease.
6.3 Request to Assign or Sublease. If LESSEE desires to Transfer the
Lease or the Premises, LESSEE shall deliver to LESSOR notice, at least thirty (30) days prior to
the date when LESSEE desires the Transfer to be effective, setting forth the name, address, and
business of the proposed assignee or sublessee, business and personal credit applications and
information (including references and such financial documentation as LESSOR shall reasonably
prescribe) concerning the character and financial condition of the proposed assignee or
sublessee, the effective date of the assignment or sublease, and all the material terms and
conditions of the proposed assignment.
6.4 LESSOR's Consent. LESSOR shall use its commercially
reasonable efforts to respond to LESSEE within thirty (30) days after receipt of LESSEE's notice
Lease - Unimaginable, LL.0 8
and all relevant information required by LESSOR by advising LESSEE of LESSOR's consent or
denial of the proposed Transfer. LESSOR, however, shall have no obligation to respond within
such 30 day period, and shall not be in default hereunder, and LESSEE shall have no additional
rights or remedies in the event that LESSOR does not respond within thirty (30) days.
LESSOR's failure to respond within thirty days shall not be deemed consent to the Transfer.
6.5 Reasonable Grounds for Denial of Transfer. LESSEE
acknowledges that, in addition to such other reasonable grounds as LESSOR may assert for
withholding its consent, it shall be reasonable under this Lease and any applicable law for
LESSOR to withhold its consent to any proposed Transfer, where any one or more of the
following conditions exists:
6.5.1 The proposed sublessee or assignee (a "Transferee") is,
in LESSOR's reasonable judgment, of a character or reputation which is not consistent with
those businesses customarily found in the VBTDC, or the Transferee does not have the business
needs for which the VBTDC has been designed (ie, the Transferee is not appropriately defined as
an incubator company), or the Transferee does not operate a business that is of the nature
consistent with those generally found in the VBTDC or intended to be serviced by the VBTDC.
6.5.2 The Transferee is not a party of reasonable financial
worth and/or financial stability on the date consent is requested, or has demonstrated a prior
history of credit instability or unworthiness;
6.5.3 The Transfer will cause LESSOR to be in violation of
another lease or agreement to which LESSOR is a party, or would give another occupant of the
VBTDC a right to cancel its lease.
6.6 LESSEE's Continued Obligation. Any consent by LESSOR to a
Transfer shall not release LESSEE from any of LESSEE's obligations hereunder or be deemed to
be a consent by LESSOR to any subsequent Transfer, and LESSEE shall remain liable for
payment of the rent and performance of all other obligations to be performed by LESSEE
hereunder. LESSOR's acceptance of rent from any other person shall not be deemed to be a
waiver by LESSOR of any provision of this Lease. If any Transferee of LESSEE defaults in the
performance of any of the provisions of this Lease, LESSOR may proceed directly against
LESSEE without the necessity of exhausting remedies against such Transferee.
7. Services Provided by Lessor.
7.1 Electrical Services. The LESSOR shall provide "Basic Electric
Service" to the Premises on a 24 hour per day, 7 day per week basis. "Basic Electric- Service"
shall mean and include 15 amp electrical outlets, per code, and florescent general lighting, not to
exceed a consumed electrical load of 5 watts per rentable square foot of the Premises during
normal business hours, calculated on a monthly basis. If LESSEE requires or uses electrical
services in excess of the Basic Electric Service, LESSOR shall, at LESSOR's option, have the
right to install a separate meter to keep track of LESSEE's electrical usage, and LESSEE shall
reimburse LESSOR for the costs of the installation of the meter, and for costs of electrical usage
in excess of the Basic Electric Service.
9
Lease - Unimaginable, LLC
7.2 Water. The LESSOR shall provide tepid water in the common
area rest rooms, conference room, break room, and janitorial rooms on a 24-hour per day, 7 day
per week basis. If LESSEE requires water service for its operations, and LESSOR, in its sole
discretion, elects to provide such services, LESSOR shall install suitable separately metered
water and sewer service at LESSEE's sole cost and expense. Potable water lines shall include
backflow preventers where required by the Vernon Health Department. LESSEE is responsible
for obtaining the required annual backflow preventer testing on all such units within its water
system.
7.3 HVAC. LESSOR shall provide general heating, ventilation and air
conditioning to all areas of the VBTDC facility. LESSEE acknowledges that the heating zones
do not always match the tenant spaces, so the LESSOR controls all thermostats in the VBTDC.
If LESSEE requires special ventilation for its operations, LESSEE, at its cost, shall install
suitable exhaust systems, including a fresh air replenishment system to prevent depletion of
conditioned air in the building. LESSOR will provide HVAC to the Premises as needed.
7.4 Natural Gas. LESSOR does not provide natural gas service
although provisions have been made to get gas service from the street to the building, and
LESSEE may arrange for separately metered service to its Premises, at LESSEE's cost,
following written approval by LESSOR.
7.5 Janitorial Service. LESSOR shall provide routine janitorial service
to the Common Areas (hallways, conference room, rest rooms, break areas, reception area, and
warehouse) on a reasonable basis as determined by LESSOR. LESSEE is responsible, at its cost,
for janitorial services, cleaning and waste removal within its Premises. LESSEE shall maintain
the Premises in a clean and habitable manner, and in a manner that does not create a nuisance or
otherwise adversely affect or annoy other tenants in the VBTDC.
7.6 Trash Service. LESSOR shall provide general waste disposal
(dumpsters within trash collection area at north end of facility). If LESSEE's operations
generate significant waste volume (in excess of 6 cubic feet per week), LESSEE must, at its cost,
establish appropriate separate trash collection and disposal services.
7.7 Cop jnng Services. LESSOR offers incidental copying to all
tenants at a copy center located in the VBTDC reception area. If LESSEE has significant
reproduction requirements (to be determined by LESSOR, in its reasonable discretion), Silva
Printing, the in-house printer, offers attractive discounts to tenant companies of the VBTDC.
7.8 Receptionist Services. LESSOR provides a receptionist, who will
be located in the reception area of the VBTDC. The receptionist will generally be available
during normal business hours to direct visitors and receive packages. The receptionist will not
provide any additional services to any tenants of the VBTDC, except that, in consideration of the
telephone charge described below, the receptionist may answer LESSEE's telephone and send
and receive a limited number of faxes for LESSEE.
7.9 Telephone Services. As an accommodation, and pursuant to a
separate agreement outside of this Lease, the LESSOR offers an optional telephone answering
10
Lease - Unimaginable, LLC
service for an additional charge of $20 per month. This service, which routes LESSEE's
telephone line(s) through the VBTDC reception desk, allows the receptionist to answer
LESSEE's phone if LESSEE's employees are not available. The service also includes voice
mail, call forwarding, and extension addressing. As part of this service, the LESSOR provides
one single line handset. If LESSEE requires additional handsets, or multi -line handsets, they are
available for an additional monthly charge. In addition, this service includes a general FAX
number for sending and receiving a limited number of faxes to the reception area, eliminating the
need for LESSEE to have a separate fax line for incidental faxing. LESSEE will be required to
pick up faxes at the reception area, as there is no delivery service provided by LESSOR. If
LESSEE's use of the telephone answering services or fax services becomes excessive, in
LESSOR's sole judgment, LESSOR may, at its option, cease providing such services to LESSEE
or charge LESSEE for such services.
7.10 Storage. Pursuant to a separate agreement outside of this Lease,
LESSOR offers optional warehouse space at $0.35 per square foot. Warehouse space is limited,
so individual tenants are limited to a prorated share of the available space, based on the
percentage of square footage of the VBTDC facility leased by LESSEE. For example, if
LESSEE is leasing 2,600 square feet of the available 26,000 square feet tenant space in the
VBTDC, the LESSEE may lease up to 150 square feet of the 1,500 square feet of warehouse
space.
7.11 Limitation on LESSOR's Liability for Failure to Provide Utilities
and/or Services. LESSOR shall not be liable to LESSEE in damages or otherwise for LESSOR's
failure to perform any of the services or provide any of the utilities described in this Lease to be
performed or provided by LESSOR. Any stoppages, failures or interruption of any of the
services to be supplied by LESSOR to LESSEE shall not violate any covenant or agreement
herein, but LESSOR agrees to use commercially reasonable efforts to restore any services
obliged to be provided by LESSOR when failures, stoppages, or interruptions occur. LESSEE
hereby releases LESSOR from any liability for damages, by abatement of rent or otherwise, for
any failure or delay in furnishing any of the services or utilities specified in this Lease
(including, but not limited to telephone and telecommunication services), or for any diminution
in the quality or quantity thereof. LESSEE's release of LESSOR's liability shall be applicable
regardless of the cause or reason for the failure, delay or diminution is occasioned, unless caused
by LESSOR's gross negligence or willful misconduct. Such failures, delays or diminution shall
never be deemed to constitute a constructive eviction or disturbance of LESSEE's use and
possession of the Premises, or serve to relieve LESSEE from paying rent or performing any of its
obligations under the Lease. Furthermore, LESSOR shall not be liable under any circumstances
in damages or otherwise for a loss of, injury to, or interference with, LESSEE's business,
including, without limitation, any loss of profits occurring or arising through or in connection
with or incidental to LESSOR's failure to furnish any of the services or utilities required by this
Lease.
8. Business Consulting Services.
8.1 Consulting Services. LESSOR may, from time to time, make
available to the tenants of the VBTDC, at no charge, the consulting services (the "Consulting
Services") of a business consultant (the "Business Consultant") located at the VBTDC. The
11
Lease —Unimaginable, LLC
Business Consultant does not have specific knowledge of any tenant's particular business, but
will have general background knowledge, training, or experience in start-up businesses and
general management techniques. The Business Consultant will be available at the VBTDC at
hours to be determined by the Business Consultant in his sole discretion, and the Business
Consultant shall not be obligated to be at the VBTDC at any particular time or for any particular
number of hours a week. The Business Consultant shall, however, make commercially
reasonable efforts to post the hours at which he intends to be available during a particular week,
and shall be available for mutually agreed to appointments. The Business Consultant will, on a
reasonable basis, provide information to LESSEE and other tenants of the VBTDC in areas in
which he has expertise, and will otherwise attempt to provide referrals to the tenants.
8.2 No LESSOR Liability. LESSEE acknowledges that in providing
any business advice or consulting services pursuant to this Lease, LESSOR and the Business
Consultant are acting solely as independent contractors and not as the agent, partner, or joint
venturer of LESSEE. Neither LESSOR nor the Business Consultant undertakes by this Lease or
otherwise to perform or discharge any liability or obligation of the LESSEE or to assume any
responsibility whatsoever for the conduct of the business or operations of the LESSEE.
LESSOR, LESSEE, and the Business Consultant are not, in any way, or for any purpose, joint
venturers, partners, or members of a joint enterprise. There is no financial, business, or other
arrangement between LESSOR (and Business Consultant) and LESSEE or sharing of profits or
other relationship other than that of landlord and tenant. LESSEE acknowledges that the
Consulting Services are provided by LESSOR solely as an accommodation to and for the
convenience of LESSEE, and LESSOR does not make any representation, warranty or guarantee,
express or implied, as to the quality, value, accuracy, or completeness of the Consulting
Services, or whether or not LESSEE shall be satisfied with the Consulting Services. LESSOR
hereby disclaims any control over the quality, accuracy, completeness, or sufficiency of the
Consulting Services. LESSEE acknowledges that LESSEE is not required to use the Consulting
Services; that LESSEE's use of the Consulting Services is strictly voluntary, and at the sole
discretion and control of LESSEE.
8.3 Release. Notwithstanding anything to the contrary contained in
this Lease or any applicable law to the contrary, LESSEE's execution of this Lease evidences
LESSEE's agreement that, solely as it relates to the use of Consulting Services by LESSEE or
LESSEE's Parties, LESSEE, on behalf of itself and LESSEE's Parties, does hereby and shall
forever hold LESSOR and LESSOR's affiliates, agents, assigns, contractors, directors,
employees, officers, parent organization, partners, representatives, shareholders, and
subsidiaries, including, without limitation, Business Consultant and Woodbury University
(collectively, the "Indemnitees") harmless from and forever release, remise, discharge, acquit
and relieve the Indemnitees from and against any and all claims, demands, causes of action,
obligations, liabilities, agreements, damages, cost (including, without limitation, reasonable
attorneys' fees), loss, or liability of any kind or nature, whether asserted, known or unknown,
suspected or unsuspected, in any way connected with, which any one or more of the Indemnitees
may sustain or incur by reason of, related to, associated with, or arising out of the provision, use
or the rendering of any such Consulting Services or the delivery of such Consulting Services to
LESSEE or LESSEE's Parties.
12
Lease - Unimaginable, LLC
Solely as it relates to the use of Consulting Services by LESSEE or
LESSEE's Parties, LESSEE hereby expressly waives all rights and
benefits conferred by the provisions of Section 1542 of the Civil Code of
the State of California, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND WHICH, IF KNOWN BY HIM, MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
9. Waiver and Indemnification.
9.1 Waiver. LESSEE, as a material part of the consideration to
LESSOR, hereby assumes all risk of damage to personal property of LESSEE, or injury to
persons in or about the Premises. Notwithstanding any contrary provision herein, and except to
the extent arising from the gross negligence, recklessness or willful misconduct of the LESSOR
or LESSOR's employees or agents, LESSOR shall not be liable and LESSEE hereby waives all
claims against LESSOR for ahy injury or damage to any person or property or any other loss
(including, but not limited to loss of income), which may be sustained by the person, goods,
wares, merchandise or property of LESSEE, or LESSEE's Parties, or any other person in or
about the Premises or the VBTDC by or from any cause whatsoever. Without limiting the
generality of the foregoing, LESSOR shall not be liable for any damage caused by or resulting
from or by: (a) water leakage of any character from the roof, walls, windows, basement, or any
other portion of the Premises or the VBTDC; (b) fire, steam, electricity, gas or oil, or bursting,
leaking, or overflowing of water, sewer or steam pipes; (c) any interruption of utilities or
services; (d) any act by any tenant, occupant, or other person, including theft; (e) casualty, fire,
acts of God, public enemy, riot, strike, picketing, mob action, bombing, explosion war, acts of
terrorists; (f) the construction, repair, maintenance, or alteration of any part of the Premises or
the VBTDC; (g) breakage, leakage, or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC, or lighting fixtures; or (h) any other cause whatsoever, in, on or about the
Premises or the VBTDC. Notwithstanding any contrary provision in this Lease, LESSOR shall
not in any event be liable for injury to LESSEE's business or for any loss of income or profit
therefrom, or for any other consequential damages.
9.2 Indemnity. Except to the extent that claims arise from the gross
negligence, recklessness or willful misconduct of LESSOR or the Indemnities, LESSEE shall
indemnify and hold the Indemnities harmless from and against any and all claims, demands,
losses, damages, obligations, liabilities, costs and expenses (including, but not limited to,
reasonable attorney's fees) for injury to, or death of, any person or damage to property arising
from or in connection with LESSEE's use or occupancy of the Premises, or occasioned in whole
or in part from any act or omission of LESSEE or LESSEE's Parties, or from any act or
omission, work or thing done, permitted or suffered by LESSEE or any of LESSEE's Parties in
or about the VBTDC, or from any breach or default of this Lease by LESSEE. The provisions of
this Paragraph shall survive the expiration or termination of this Lease.
10. Insurance.
Lease - Unimaginable, LLC 13
following insurance: 10.1 Throughout the Term, LESSEE shall carry, at its cost, the
10.1.1 Workers' Compensation Insurance. Statutory Workers'
Compensation insurance including employer's liability for all employees as required by
applicable state and federal regulations; and
10.1.2 Commercial General Liability Insurance. A policy of
commercial general liability insurance with a combined limit of $500,000 each occurrence and
aggregate coverage, in the name of LESSEE (naming, as additional insureds, LESSOR,
LESSOR's managing agent, the Business Consultant, and VBTDC), including bodily injury,
personal injury and broad form property damage (including loss of use thereof), and contractual
liability (covering the performance by LESSEE of its indemnity agreements under this Lease)
Such insurance shall be written as primary coverage and non-contributing with respect to any
insurance maintained by the LESSOR.
10.1.3 Property Insurance. LESSEE shall procure and maintain
property insurance coverage for: (a) all office furniture, trade fixtures, office equipment,
merchandise and all other items of LESSEE's property in, on or about the Premises and the
VBTDC, including property installed by, for or at the expense of LESSEE and (b) Tenant
Improvements. LESSEE's property insurance shall be written on the broadest available "all
risk" (special causes of loss) policy form and shall include an agreed amount endorsement for no
less than one hundred percent (100%) of the full replacement cost (new, without deduction for
depreciation) of the covered items and property. The property insurance coverage shall include
vandalism and malicious mischief coverage, and sprinkler leakage coverage.
10.2 Delivery of Certificate Policy and Endorsements. Prior to
LESSEE's occupancy of the Premises, LESSEE shall provide LESSOR with evidence of
compliance with LESSEE's insurance requirements under the Lease. Each insurance policy
shall provide that it may not be modified or canceled without thirty (30) days prior written notice
to LESSOR and to any other additional insureds. At least ten (10) days prior to the expiration of
any of such policies, LESSEE shall furnish LESSOR with a renewal or binder therefor.
10.3 Waiver of Subrogation. LESSOR and LESSEE hereby release and
relieve the other, and waive all causes of action and rights of recovery against each other for any
loss occurring to their property resulting from any of the perils insured against under any and all
insurance policies in effect at the time of any such loss or which, under this Lease, were required
to be insured against, regardless of cause or origin of such loss. LESSOR and LESSEE shall
each cause their respective insurers to issue an endorsement denying such insurer any rights of
subrogation against the other party.
11. Default and Remedies.
11.1 The occurrence of any one or more of the following events shall
constitute a default hereunder:
11.1.1 LESSEE'S failure to pay any one or more of said
installments of rent or other charges hereunder as and when the same become due, where such
Lease - Unimaginable, LL.0 14
failure continues for a period of five days following delivery of written notice of nonpayment to
LESSEE;
Bankruptcy Code;
creditors;
11.1.2
11.1.3
11.1.4
LESSEE'S becoming a "debtor" as defined in the U.S.
LESSEE'S making an assignment for the benefit of
Appointment of a receiver of LESSEE'S property;
11.1.5 LESSEE'S vacating of the Premises or abandonment of
the possession thereof, even if LESSEE continues to pay rent. LESSEE- cknowledges that its
use of the Premises and the development of its business is critical to the purposes of LESSOR in
establishing the VBTDC, and that LESSEE's continuing use of the Premises for business
purposes constitutes a material inducement to LESSOR in entering into this Lease. LESSEE
therefore waives the provisions of the California Civil Code related to abandonment.
11.1.6 LESSEE's use of the Premises for purposes other than
that specified in Paragraph 4.1 above.
.'11.1.7 LESSEE'S breach or violation of any of the other terms,
conditions or covenants of the Lease (including the exhibits attached hereto) not described in
Paragraphs 11.1.1 through 11.1.6 above, where such failure continues for a period of thirty (30)
days after written notice to LESSEE; provided, however, that if the nature of the violation is such
that more than thirty (30) days is reasonably required for it cure, then LESSEE shall not be in
default hereunder if LESSEE commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
11.2 If LESSOR terminates this Lease as a result of a default by
LESSEE described above (a "Default Termination"), then LESSOR may recover from LESSEE
the total of:
11.2.1 the worth at the time of award of the unpaid rent earned
to the date of such Default Termination; and
11.2.2 the worth at the time of award of the amount by which
the unpaid rent which would have been earned after the date of such Default Termination until
the time of award exceeds the amount of such rental loss that LESSEE proves could have been
reasonably avoided; and
11.2.3 the worth at the time of award of the amount by which
the unpaid rent which would have been earned for the balance of the Term after the time of
award exceeds the amount of such rental loss that LESSEE proves could have been reasonably
avoided; and
11.2.4 any other amount reasonably necessary to compensate
LESSOR for all of the detriment proximately caused by LESSEE's failure to observe or perform
Lease - Unimaginable, L.L.0 15
any of its covenants and agreements under this Lease or which in the ordinary course of events
would be likely to result therefrom; and such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under applicable California laws.
11.3 If a Default Termination occurs, LESSOR or LESSOR's
authorized representatives may re-enter the Premises and remove all persons and all property
therefrom, either by summary dispossession proceedings or by any suitable action or proceeding
at law, without being liable to indictment, prosecution or damages therefor, and may repossess -
and enjoy the Premises. No re-entry or repossession of the Premises by LESSOR or its
representatives under this paragraph shall be construed as an election to terminate this Lease
unless a notice of such election is given to LESSEE or unless the termination thereof is decreed
by a court of competent jurisdiction. If LESSOR does not elect to terminate this Lease despite
the occurrence of an event of default, LESSOR may, from time to time and without terminating
this Lease, enforce all its rights and remedies under this Lease, including the right to recover the
rent as the same becomes payable by LESSEE hereunder.
11.4 If LESSEE abandons the Premises in breach of this Lease,
LESSOR shall have the right to relet the Premises or any part thereof on such terms and
conditions and at such rentals as LESSOR in its sole discretion may deem advisable, with the
right to make alterations and repairs in and to the Premises necessary to reletting. If LESSOR
elects to relet, then gross rentals received by LESSOR from the reletting shall be; applied:
re-entering;
first, to the payment of the reasonable expenses incurred or paid by LESSOR in
second, to the payment of the rent payable by LESSEE hereunder; and
third, the remainder, if any, to be retained by LESSOR and applied to the
payment of future rent as the same becomes due.
Should the gross rentals received by LESSOR from the reletting be insufficient to
pay in full the sums stated above, LESSEE shall, upon demand, pay the deficiency to LESSOR.
12. General Provisions
12.1 Facility Activities. LESSEE agrees to participate, within
reasonable limits, in facility activities sponsored by LESSOR. Such activities may include tours
of the facility, convocations, educational seminars and other programs and events. LESSOR
agrees to coordinate with LESSEE regarding participation in such activities and to recognize the
reasonable limitations of LESSEE. It is expressly agreed that LESSOR recognizes the legitimate
proprietary rights of LESSEE with regard to certain records, processes and projects.
12.2 Lease Termination Obligations. At the expiration or earlier
termination of the Lease, LESSEE shall:
12.2.1 surrender the Premises in the same condition as the
Premises were in upon delivery of possession thereto under this Lease, reasonable wear and tear
16
Lease - Unimaginable, LLC
and damage by unavoidable casualty excepted, and the costs or charges necessary to repair any
damaged part of said Premises shall be paid by LESSEE to LESSOR;
12.2.2 surrender all keys for the Premises and all access cards to
the building to LESSOR, and shall inform LESSOR of all combinations on locks, safes and
vaults, if any, in the Premises; and
12.2.3 remove at its own expense all its trade fixtures and any
alterations or Improvements LESSOR requests to be removed before surrendering the Premises
as aforesaid and shall pay to LESSOR any amount necessary to repair any damage to the
Premises caused thereby.
12.2.4 LESSEE'S obligation to observe or perform this
covenant shall survive the expiration or other termination of the term of this Lease.
12.2.5 No Smoking facility. Smoking is strictly prohibited
within the VBTDC BUILDING, and within 20 feet of the building. LESSEE agrees to adhere to
such prohibition, and to cause LESSEE's Parties to adhere to such prohibition.
12.2.6 Exhibits A and B are attached hereto and incorporated
herein by this reference. LESSEE has read and fully understands the attached exhibits and
agrees to abide by all the conditions, rules, regulations and procedures contained therein.
12.3 Damage or Destruction. If the Premises or the VBTDC are
damaged or destroyed by earthquake, fire, flood, or other casualty or catastrophe, including by
act of war, civil disobedience, or act of terrorist, LESSOR shall, in its reasonable judgment,
either terminate this Lease by delivering written notice to LESSEE, specifying the effective date
of such termination, or maintain the Lease in full force and effect by delivering written notice to
LESSEE of the anticipated date by which LESSEE will be able to re -occupy the Premises.
Notwithstanding anything to the contrary in this Lease, if the Premises are not ready for
occupancy on the date set forth in LESSOR's notice, this Lease shall not be void or.voidable, nor
shall LESSOR be liable to LESSEE for any damage resulting from LESSOR's inability to
deliver such possession. However, LESSEE shall not be obligated to pay rent until possession of
the Premises has been delivered to LESSEE by LESSOR. Except for such delay in the payment
of rent following the damage or destruction, LESSOR's failure to give possession on the
anticipated date shall in no way affect LESSEE's obligations hereunder; provided, however, that
if possession of the Premises is not tendered by LESSOR within ninety (90) days after the
anticipated date set forth in LESSOR's notice, LESSEE shall have the right to terminate this
Lease by giving written notice to LESSOR within ten (10) days after such failure. If such notice
of termination is not given by LESSEE within said ten (10) day time period, then this Lease shall
continue in full force and effect for the balance of the original Term, plus the number of days
during which LESSEE was not able to use the Premises. If LESSEE uses a portion of the
Premises during the reconstruction period, LESSEE shall pay a prorated portion of the rent
otherwise due hereunder, and if LESSEE is not able to use the Premises for its intended usage,
the rent shall be fully abated during such period.
17
Lease - Unimaginable, LLC
12.4 Condemnation. If the Premises or the VBTDC is condemned or
taken by an agency authorized to condemn the property, or if the Premises or the VBTDC is
voluntarily deeded to such an agency under threat of condemnation, this Lease shall terminate as
of the effective date of the condemnation or voluntary deeding, and neither party shall have any
further obligation or liability to the other, except that LESSEE shall make any payments then
owing to LESSOR and LESSOR shall return to LESSEE any portion of the Security Deposit
payable to LESSEE. All condemnation proceeds shall be the sole property of LESSOR.
12.5 Broker. LESSOR and LESSEE represent to one another that each
has dealt with no broker in connection with this Lease other than Bob Toering , representing
LESSOR, and M• Muellerleile, representing LESSEE. LESSOR shall pay the fees of the
broker engaged by LESSOR and LESSEE shall pay the fees of the broker engaged by LESSEE.
LESSOR and LESSEE shall hold one another harmless from and against any and all liability,
loss, damage, expense, claim, action, demand, suit or obligation arising out of or relating to a
breach by the indemnifying party of such representation.
12.6 Attorneys' Fees. If any action, proceeding, or litigation is
instituted between LESSOR and LESSEE arising out of or related to this Lease or any other
relationship or actions or conduct between them, the prevailing party in such action, proceeding,
or litigation shall be entitled to receive its costs (not limited to court costs), expenses and
reasonable attorneys' fees from the non -prevailing party.
12.7 Waiver of Trial by Jury. In the interest of saving time and
expense, LESSOR and LESSEE hereby consent to trial without a jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other or their successor -in -
interest in respect to any matters arising out of or relating to this Lease.
12.8 Notices. Except as may be otherwise provided in this Lease, all
notices required or permitted by this Lease shall be in writing, sent to LESSOR at the address set
forth in the first paragraph of this Lease and to LESSEE at the Premises, and may be delivered in
person (by hand or by messenger) or by overnight courier service or by certified or registered
mail, return receipt requested. Notices shall be deemed delivered or given when delivered (as
shown by the receipt) or when delivery is refused.
12.9 Severability. The invalidity or unenforceability of any provision of
this Lease shall not affect the validity of any other provision of this Lease, and the unenforceable
provision shall be limited to the extent necessary to make it valid and enforceable, or, if
necessary, severed from this Lease.
12.10 Waivers. No waiver by either party of any breach or default by the
other party shall be deemed a waiver of any other term, covenant or condition hereof, and no
waiver shall be effective unless in writing.
12.11 Interpretation and Modification; Entire Agreement. This Lease is
not binding until executed and delivered by both parties. This Lease may be modified only in
writing, signed by both parties. The headings and titles in this Lease are solely for convenience
and shall not affect the interpretation or meaning of the provisions. This Lease, together with its
18
Lease - Unimaginable, LL.0
exhibits, contains all of the agreements of the parties to this Lease and supersedes and replaces
any prior or contemporaneous oral or written memorandum, term sheets, drafts, or other writings
or discussions.
City of Vernon:
By:
Typed Name: Leonis C. Malburg
Title: Ma or
ATTEST:
Typed Name: Bruce V. Malkenhorst
Title: Cit Clerk
APPROVED
AS TO FORM:
Typed Name: Eric T. Fresch
Title: City Attorney
Lease - Unimaginable, LLC 19
Un
B �I///'rvVvw v - v\
Y•-
Typed Ne: Michael J. Muellerleile
Title: Owner
Typed Name: Renee McCrascken
Title: Owner
EXHIBIT
0
EXHIBITA
2
O
z
a
naHBrrn-udffo&aWe, LLC
w
w
w
U
z
w
2
O ci
J (l
Cl
� } c
O E
LL O>
z
c Q
LL W
c
13
ZC
(n ti
w c
z
U)
Z)
m
z
O
z
EXHIBIT
EXHIBIT B
Vernon Business and Technology and Development Center (the "VBTDC")
RULES AND REGULATIONS
Notwithstanding anything contained in these Rules and Regulations to the contrary,
Lessor agrees that it will not unreasonably modify these Rules and Regulations. Lessee shall
faithfully observe and comply with the following Rules and Regulations. Lessor shall not be
responsible to Lessee for the nonperformance of any of the Rules and Regulations by any other
tenants of the VBTDC. In the event of any conflict between the Rules and Regulations and the
other provisions of this Lease, the Lease shall control.
I . Lessee shall not alter any lock or install any new or additional locks or bolts on
any doors or windows of the Premises without obtaining Lessor's prior written
consent. Lessee shall bear the cost of any lock changes or repairs required by
Lessee. 2 keys and 2 access cards will be furnished by Lessor, and any additional
or replacement'keys or access cards required by Lessee will be paid for by Lessee
at Lessor's actual cost.
2. Except with respect to any entire floor of the Building leased by Lessee, all doors
opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises.
3. Lessor reserves the right to close and keep locked all entrance and exit doors of
the Building during such hours as are reasonable. Lessee, its employees and
agents must be sure that the doors to the Building are securely closed and locked
when leaving the Premises if it is after the normal hours of business for the
Building. Any Lessee, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required to
sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged pass
for access to the Building. Lessor will furnish passes to persons for whom
Lessee requests same in writing. Lessee shall be responsible for all persons for
whom Lessee requests passes and shall be liable to Lessor for all acts of such
persons. The. Lessor and his agents shall not be liable for damages for any error
with regard to the admission to or exclusion from the Building of any person. In
case of invasion, mob, riot, public excitement, or other commotion, Lessor
reserves the right to prevent access to the Building or the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No bulky or large furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Lessor. All moving activity into or out of the
Building shall be scheduled with Lessor and done only at such time and in such
EXHIBrr B - Unimaginable, LLC
13. Lessee shall not use, keep or permit to be used or kept, any foul or noxious gas or
substance in or on the Premises, or permit or allow the Premises to be occupied
or used in a manner offensive or objectionable to Lessor or other occupants of the
Center by reason of noise, odors, or vibrations, or interfere with other Lessees or
those having business therein, whether by the use of any musical instrument,
radio, phonograph, or in any other way. Lessee shall not throw anything out of
doors, windows or skylights or down passageways.
14. Lessee shall not bring into or keep within the Center, the Building or the Premises
any animals, birds, aquariums, or other pets. Lessee shall keep bicycles or other
vehicles only in areas designated by Lessor.
15. Unless the business activity of the Lessee is food processing or preparation, no
cooking shall be done or permitted on the Premises, nor shall the Premises be
used for lodging or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters' laboratory -approved equipment
and microwave ovens may be used in the Premises for heating food and brewing
coffee, tea, hot chocolate and similar beverages for employees and visitors,
provided that such use is in accordance with all applicable laws.
16. Lessee shall not occupy or permit any portion of the Premises to be occupied as
an office for the manufacture or sale of liquor, narcotics, or tobacco in any form,
or as a medical office, or as a barber or manicure shop, or as a governmentally
operated employment bureau without the express prior written consent of Lessor.
Lessee shall not engage or pay any employees on the Premises except those
actually working for such Lessee on the Premises nor advertise for laborers
giving an address at the Premises.
17. Lessor reserves the right to exclude or expel from the Center any person who, in
the judgment of Lessor, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violatiomof any of these Rules and
Regulations.
18. Lessee, its employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, courts, halls, stairways, elevators, vestibules or any Common Areas of
the Center, nor in any way obstruct such areas, and shall use them only as a
means of ingress and egress for the Premises. Notwithstanding the foregoing,
Lessee, its employees and agents may utilize the upstairs lobby area and the
break room for informal meetings, and may utilize the first floor conference
room, when scheduled in advance through the receptionist. Lessor reserves the
right to limit a Lessee's use of common areas for informal meetings, if such
usage becomes excessive. Lessee, its employees and agents shall only smoke
tobacco products in the designated areas outside the building.
19. Lessee shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Lessor to ensure the most effective operation of the
Building's heating and air conditioning system, and shall refrain from attempting
EXHIBrr B - Unimaginable, L.LC
SUPPORTING
DOCUMENTS
LEASE
VERNON BUSINESS AND TECHNOLOGY DEVELOPMENT CENTER
This Vernon Business and Technology Development Center Lease ("Lease") is
entered into this 261h day of July, 2004, by and between the City of Vernon ("LESSOR"),
located at 3375 Slauson Ave., Vernon, California 90058, and Unimaginable, LLC, a California
Limited Liability Company ("LESSEE").
In consideration of the mutual promises, covenants and rents described below,
LESSOR does hereby lease and let to LESSEE, and LESSEE does hereby lease from LESSOR,
the Premises described below on the terms and conditions set forth below.
Premises and Use of VBTDC.
1.1 Premises. LESSEE hereby leases from LESSOR that certain floor
space of approximately 2210 rentable square feet located on the 1st floor of the facility known as
the Vernon Business and Technology and Development Center (the "VBTDC"), as identified
and marked on the floor plan of the Premises attached hereto as Exhibit A and made a part hereof
(the "Premises").
1.2 Common Areas. LESSEE shall, during the term of this Lease, be
entitled to use the Common Areas on a non-exclusive basis at no charge. The Common Areas
are defined as all areas and facilities outside the Premises and within the exterior boundary line
of the LESSOR's property that are provided and designated by the LESSOR from time to time
for the general non-exclusive use of the tenants of the VBTDC. The Common Areas may be
used by LESSEE and its employees, suppliers, customers, contractors, and invitees. The
Common Areas include the hallways, public restrooms, break areas, reception area, parking
areas, loading areas, trash areas, and roadways. Usage of the Common Areas is subject to such
reasonable rules and regulations as LESSOR may implement from time to time and deliver to
LESSEE in writing, and is subject to any rights, powers, and privileges reserved by LESSOR
under the terms hereof or under such terms as may be subsequently adopted by LESSOR and
provided to LESSEE in writing.
1.3 Conference Room. LESSEE may have reasonable use of the
VBTDC conference room at no charge, which usage is to be pre -scheduled with the Building
Receptionist. Usage will be available on a first come, first served basis; provided, however, that
if LESSOR, in its sole and absolute discretion, determines that a tenant of the VBTDS is using
the conference room on an excessive basis that adversely affects the rights of other tenants in the
VBTDC to use the conference room, LESSOR may give other tenants the usage of the
conference room, regardless of the first come, first served policy. LESSOR does not guarantee
availability of the conference room at any time. Lack of availability of the conference room
shall not constitute a breach of this Lease by the LESSOR or constitute a constructive eviction,
or allow LESSEE to make any deductions of its rent or entitle LESSEE to any other right or
remedy. LESSEE acknowledges that the availability of the conference room is merely an
accommodation of the LESSOR, and LESSOR is not obligated to make it available at any time
for any purpose.
Lease - Unimaginable, LLC
1.4 Parking. LESSEE is entitled to one unreserved parking space in
the VTBDC parking lot for every 350 rentable square feet of space in the Premises, such that
LESSEE shall have 6 unreserved parking spaces hereunder. Use of the parking lot is at no
charge, and is subject to such reasonable rules and regulations as LESSOR may post or deliver to
LESSEE in writing from time to time.
1.5 Keys. LESSEE has been provided with 2 keys to the Premises and
2 access cards to the building, all of which are to be returned to LESSOR upon the Expiration
Date or earlier termination of this Lease.
2. Term.
2.1 Term of Lease. The term of this Lease (the "Term") shall be
twelve (12) months (the "Term"), commencing on the Commencement Date, as defined below,
and expiring on the last date of the 12th month after the Commencement Date (the "Expiration
Date"), subject to earlier termination as set forth herein, and further subject to possible extension
on the terms set forth in Paragraph 5.2.
2.2 Commencement Date and LESSOR's Improvements.
2.2.1 Construction of Shell. LESSOR shall deliver the
Premises to LESSEE with the Shell constructed. The Shell shall mean that walls and existing
doors are in place and services that are described in Paragraph 7 that are to be provided by
LESSOR are in place. The "Anticipated Delivery Date" shall be August 1", 2004. The date on
which the LESSOR delivers the Premises to LESSEE with the Shell constructed shall be the
"Commencement Date". All obligations under the Lease, including the obligation to pay rent
and to provide insurance as described herein, shall commence on the Commencement Date. In
no event shall LESSEE commence use of the Premises for business purposes until the City of
Vernon has issued a certificate of occupancy or other permit that allows legal occupancy of the
Premises.
2.2.2 Improvements by LESSOR. LESSOR has agreed that it
will, at its sole cost, remove one existing three foot door and replace it with two two and a half
foot doors, so as to provide LESSEE with a double door that is approximately five feet wide.
LESSEE acknowledges and agrees that the replacement doors will not be installed prior to the
Commencement Date. LESSEE shall use commercially reasonable efforts to have the
replacement doors installed on a reasonably prompt basis following the Commencement Date.
In no event will any delay in the installation of the replacement doors constitute a constructive
eviction or constitute a default by LESSOR hereunder, and LESSEE shall have no rights, claims,
or remedies arising out of any delay in the installation of the replacement doors, and shall not
withhold any portion of its rent during the time period prior to the installation of the replacement
doors.
2.3 Delay in Delivery. If for any reason LESSOR is unable to deliver
the Premises to LESSEE on the Anticipated Delivery Date, this Lease shall not be void or
voidable, nor shall LESSOR be liable to LESSEE for any damage resulting from LESSOR's
inability to deliver such possession. However, LESSEE shall not be obligated to pay the rent
2
Lease - Unimaginable, LLC
until such possession of the Premises has been delivered to LESSEE by LESSOR. Except for
such delay in the commencement of rent, LESSOR's failure to give possession on the
Anticipated Delivery Date shall in no way affect LESSEE's obligations hereunder. If possession
of the Premises is not tendered by LESSOR within ninety (90) days after the Anticipated
Delivery Date, then LESSEE shall have the right to terminate this Lease by giving written notice
to LESSOR within ten (10) days after such failure. If such notice of termination is not so given
by LESSEE within said ten (10) day time period, then this Lease shall continue in full force and
effect.
2.4 Memorandum of Commencement Date. Upon LESSOR's request,
the parties shall execute a memorandum setting forth the Commencement Date. If LESSEE does
not sign the memorandum within 10 business days of LESSOR's request, the Commencement
Date shall be deemed to be the date set forth on the memorandum prepared by LESSOR.
2.5 Holding Over. If LESSEE fails to deliver possession of the
Premises on the Expiration Date, or earlier termination of this Lease, but holds over after the
expiration or earlier termination of this Lease without the express prior written consent of
LESSOR, such tenancy shall be construed as a monthly tenancy on the same terms and
conditions as are contained herein, except that the rent payable by LESSEE during such period of
holding over shall automatically increase as of the Expiration Date to an amount equal to one
hundred fifty percent (150%) of the rent payable by LESSEE for the calendar month
immediately prior to the date when LESSEE commenced such holding over (the "Holdover
Rent"). Such Holdover Rent shall be paid during such period as LESSEE retains possession of
the Premises. However, LESSEE's payment of such Holdover Rent, and LESSOR's acceptance
thereof, shall not constitute a waiver by LESSOR of any of LESSOR's rights or remedies with
respect to such holding over, nor shall it be deemed to be a consent by LESSOR to LESSEE's
continued occupancy or possession of the Premises. Furthermore, if LESSEE fails to deliver
possession of the Premises to LESSOR upon the expiration or earlier termination of this Lease,
then, in addition to any other liabilities to LESSOR accruing therefrom, LESSEE shall protect,
defend, indemnify and hold LESSOR harmless from all loss, costs (including reasonable
attorneys' fees and expenses) and liability resulting from such failure, including without limiting
the foregoing, any claims made by any succeeding tenant arising out of LESSEE's failure to so
surrender, and any lost profits to LESSOR resulting therefrom.
3. Rent and Charges; Security Deposit.
1 3.1 Gross Rent. Upon execution of this Lease, LESSEE shall pay to
the LESSOR the sum of $4,420.00, which is payment of the first and last month's rent. LESSEE
shall continue to pay rent in the amount of $2,210.00 per month ($1.00 per rentable square foot
per month), on the first day of each succeeding month thereafter during the Term of this Lease
(except for the last month's rent, which has been prepaid). LESSOR and LESSEE intend and
agree that this Lease shall be a full service gross lease and that all taxes, operating expenses and
other costs, expenses and obligations of every kind and nature whatsoever with respect to the
Premises and the use thereof arising during the Term shall be paid by LESSOR except as
otherwise expressly set forth in this Lease.
Lease - Unimaginable, LLC
3.2 Payment Procedures. The rent and any additional charges payable
hereunder shall be paid by the LESSEE to City of Vernon - BTDC, 3375 Slauson Ave., Vernon,
California 90058, or such other name and address as LESSOR may provide to LESSEE in
writing, without prior demand therefor, and without any deduction or set-off whatsoever. Rent is
due and payable on the first day of each month and additional charges are due and payable
within 30 days of date of invoice.
3.3 Late Charge and Interest. LESSEE acknowledges that late
payment or rent or additional charges by LESSEE to LESSOR will cause LESSOR to incur costs
not contemplated by this Lease, the exact amount of which are extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and accounting charges,
administrative overhead, and late charges that may be imposed on LESSOR for late payment.
Therefore, if any installment of rent or other payment due from LESSEE hereunder is not
received by LESSOR within five (5) days after the date it becomes due, LESSEE shall pay to
LESSOR on demand an additional sum equal to ten percent (10%) of the overdue amount as a
late charge. The parties agree that the late charge represents a fair and reasonable settlement
against the costs that LESSOR will incur by reason of LESSEE's late payment. Every
installment of rent and any other payment due hereunder from LESSEE to LESSOR which is not
paid five (5) days after the same becomes due and payable shall, in addition to any late charge
payable by LESSEE, bear interest at the rate of ten percent (10%) per annum from the date that
the same originally became due and payable until the date it is paid, which interest payment shall
be due and payable immediately upon demand by LESSOR. Acceptance of any late charge or
interest shall not constitute a waiver of LESSEE's default with respect to the overdue amount, or
prevent LESSOR from exercising any of the other rights and remedies available to LESSOR.
3.4 Charges for Additional Services. In addition to the above
described rent, LESSEE shall pay to LESSOR any sums set forth in Paragraph 7 for telephone
answering service and similar services, if any, used by LESSEE in the operation of its business at
the Premises.
3.5 Security Deposit. LESSEE shall deposit with LESSOR, upon
LESSEE's execution of this Lease, the amount of $1,000.00 (the "Security Deposit") as security
for LESSEE's faithful performance of its obligations under this Lease. LESSOR and LESSEE
agree that the Security Deposit may be commingled with funds of LESSOR and LESSOR shall
have no obligation or liability for payment of interest on the Security Deposit. If LESSEE fails
to pay any rent or other amount when due and payable under this Lease, or fails to perform any
} df the other terms hereof as and when required, LESSOR may appropriate and apply or use all or
any portion of the Security Deposit for rent payments or any other amount then due and unpaid,
for payment of any amount for which LESSOR has become obligated as a result of LESSEE's
default or breach, and for any loss or damage sustained by LESSOR as a result of LESSEE's
default or breach. LESSOR may so apply or use the Security Deposit without prejudice to any
other remedy that LESSOR may have by reason of LESSEE's default or breach. If LESSOR so
uses any of the Security Deposit, LESSEE shall, within ten (10) days after written demand
therefor, restore the Security Deposit to its full amount. LESSEE's failure to do so shall
constitute an act of default hereunder and LESSOR shall have the right to exercise any remedy
available to it in law or in equity. Within thirty (30) days after the Term has expired or LESSEE
has vacated the Premises, whichever shall last occur, LESSOR shall return such portion of the
4
Lease - Unimaginable, LLC
Security Deposit to LESSEE that has not been used or retained by LESSOR in accordance with
the terms of this Paragraph.
4. Permitted Use of Premises; Obligations re Occupancy.
4.1 Permitted Use and Covenant of Continuing Operations. LESSEE
shall use and occupy the Premises strictly in accordance with the terms of this Lease and in
accordance all governmental rules and regulations pertaining to the business of LESSEE and all
governmental rules and regulations related to the use and occupancy of the VBTDC. LESSEE
may use the Premises only for the following purpose: Manufacture of high end denim
clothing. LESSEE acknowledges and agrees that its continuing use of the Premises for the
purpose described in this Paragraph is a material inducement to LESSOR's entering into this
Lease, and LESSEE covenants and agrees that it shall operate its business during all normal
business hours, and shall have such materials, supplies, equipment, and personnel on site as are
reasonably required to operate the business.
4.2 Condition of Premises. LESSEE acknowledges that it has made its
own inspection of the Premises, and accepts the Premises in their "as -is" condition. LESSEE
further acknowledges that LESSOR has made no representation or warranty, express or implied,
except as are contained in this Lease and its Exhibits, regarding the condition, suitability or
usability of the Premises or the VBTDC for the purposes intended by LESSEE. LESSEE's
taking possession of the Premises for the purpose of conducting LESSEE's normal business
operations in the Premises shall be deemed conclusive evidence that, as of the Commencement
Date, the Premises are in good and satisfactory order and repair, and suitable for its business
purposes, as described above.
4.3 LESSEE's Compliance with Laws. LESSEE will remain in full
compliance with the terms and conditions of all permits and licenses issued to it by any
governmental authority on account of any or all of its activities on the Premises. Lessee shall not
use, permit to be used, or permit anything to be done in or about the Premises which will in any
way violate any laws, statutes, ordinances, rules, orders or regulations duly issued by any
governmental authority having jurisdiction over the Premises, or by the Board of Fire
Underwriters (or any successor thereto) (collectively, the "Codes"). LESSEE shall, at its sole
expense, promptly remedy any violation of such Codes relating to the condition of the Premises;
provided, however, that nothing contained in this paragraph shall require LESSEE to make any
structural changes, or other alterations, additions or improvements of a capital nature to the
.,,Premises, unless such changes are required due to LESSEE's improvements, the nature of
LESSEE's business and operations, or the acts or conduct of LESSEE or LESSEE's employees,
agents, clients, contractors, directors, invitees, licensees, officers, directors, partners or
shareholders (collectively, "LESSEE's Parties").
4.4 LESSEE's Obligation to Maintain. LESSEE shall, at LESSEE's
sole expense, maintain the non-structural portions of the Premises in good order and repair, and
shall also keep the Premises in neat, clean, attractive, and safe condition. Further, LESSEE shall
pay the cost of any injury, damage or breakage in, upon or to the Premises created by LESSEE's
negligence or willful misconduct or the negligence or willful misconduct of LESSEE's Parties.
Lease - Unimaginable, LLC
4.5 Hazardous Material and Hazardous Waste. LESSEE specifically
agrees that, except for limited quantities of office materials customarily used in normal business
operations of tenants in office buildings, LESSEE shall not engage or permit at any time, any
operations or activities upon, or any use or occupancy of the Premises or Common Areas or
other areas of the VBTDC, for the purpose of or in any way involving the handling,
manufacturing, treatment, storage, use, transportation, spillage, leakage, dumping, discharge or
disposal (whether legal or illegal, accidental or intentional) of any hazardous substances,
materials or wastes, or any wastes regulated under any local, state or federal law (collectively,
"Hazardous Material"). If LESSEE's normal business operations require the use or creation or
disposal of any Hazardous Material, LESSEE shall fully describe such use to LESSOR in writing
and obtain LESSOR's prior written consent to such usage prior to using, creating, or disposing of
any Hazardous Material, which consent may be given or denied in LESSOR's sole judgment. If
LESSEE is permitted to use, create, or dispose of any Hazardous Material, LESSEE shall be
fully responsible for complying with all of LESSOR's rules related to such, and to all applicable
Codes, and shall ensure that the Premises and the VBTDC are free of any contamination
resulting from such Hazardous Materials at the expiration or earlier termination of this Lease.
LESSEE shall, during the Term, remain in full compliance with all applicable Codes governing
the handling, manufacturing, treatment, storage, disposal, discharge, use, and transportation of
Hazardous Material.
4.6 Damaged or Defective Systems. LESSEE shall give prompt notice
to LESSOR if LESSEE becomes aware of any damage to or defective condition in any part of
the water, sewer, electrical, HVAC or other system serving, located in, or passing through, the
Premises or servicing the VBTDC. Provided that the repair or remedy of said damage or
defective condition is within the reasonable control of LESSOR, LESSOR shall use reasonable
efforts to remedy such damage or defect with reasonable diligence; provided, however, that
except in the case of LESSOR's gross negligence or willful misconduct, LESSOR shall not be
liable to LESSEE for delay in repair or failure to repair. LESSEE shall not be entitled to claim
any damages arising from any such damage or defective condition nor shall LESSEE be entitled
to claim any eviction by reason of any such damage or defective condition. Furthermore, if such
damage or defective condition was caused by, or is attributed to, any act, omission, negligence,
or misconduct by LESSEE or LESSEE's Parties, the cost of the remedy thereof shall be paid by
LESSEE.
4.7 LESSOR's Reservation of Rights. LESSOR specifically reserves
to itself use, control and repair of the structural portions of all perimeter walls of the Premises,
-any balconies, terraces or roofs adjacent to the Premises, and any space in and/or adjacent to the
Premises used for shafts, stairways, pipes, conduits, cable trays, ducts, mail chutes, conveyors,
pneumatic tubes, electric or other utilities, sinks, telephone/communication rooms, fan rooms or
other VBTDC facilities, and the use thereof, as well as access thereto through the Premises.
LESSOR also specifically reserves to itself the following rights, so long as LESSEE's access to
and use of the Premises and parking is not materially impaired thereby: To have pass keys to the
Premises; to grant to anyone the exclusive right to conduct any particular business in the
VBTDC, so long as it does not prohibit LESSEE's use of the Premises for LESSEE's specified
use; to enter the Premises at any reasonable time with reasonable notice (except for emergencies,
in which case no notice shall be required) to inspect, repair, alter, improve, update or make
additions to the Premises or the VBTDC; to exhibit the Premises to prospective future tenants
Lease - Unimaginable, LLC
upon not less than 24 hours prior notice; to, repair, alter, make additions to, improve, or decorate
all or any portion of the VBTDC or Premises at any reasonable time with reasonable notice
(except for emergencies, in which case no notice shall be required); and to take such other
actions as may reasonably be necessary when the same are required to preserve, protect or
improve the Premises or the VBTDC at any reasonable time with reasonable notice (except for
emergencies, in which case notice shall not be required).
4.8 Relocation. If LESSOR determines that it is necessary or
appropriate, in order to best meet the needs of the VBTDC or other tenants, to relocate LESSEE,
then LESSOR shall have the right at any time, and from time to time, after giving LESSEE a
minimum of ninety (90) days prior written notice, to relocate LESSEE to space elsewhere in the
VBTDC in a space of approximately the same size, configuration and quality of tenant
improvements as the Premises (the "Substitute Premises"). LESSOR shall pay all costs and
expenses incurred as a result of such relocation. If LESSOR relocates LESSEE to the Substitute
Premises, each and every term, covenant and condition of this Lease shall remain in full force
and effect and be deemed applicable to the Substitute Premises, as though LESSEE and
LESSOR had entered into an express written amendment of this Lease with respect thereto,
except that if the approximate rentable square footage of the Substitute Premises is less than that
of the Premises, the rent shall be appropriately reduced, and if the approximate rentable square
footage of the Substitute Premises is more than that of the Premises, the rent shall be based on
the square footage of the Premises prior to the relocation, and shall not increase.
4.9 Rules and Regulations. LESSEE shall observe and comply with
the rules and regulations set forth in Exhibit B, and such other reasonable and non-discriminatory
rules and regulations as LESSOR may adopt and communicate to LESSEE in writing at any
time. However, if any conflict arises between the provisions of this Lease and any such rule or
regulation, the provisions of this Lease shall control. LESSOR shall not be responsible to
LESSEE for the failure of any other tenants or occupants of the VBTDC to comply with said
rules and regulations.
4.10 Alterations. LESSEE may not make any alterations, additions,
modifications, or improvements (collectively, "Alterations") to the Premises without obtaining
LESSOR's prior written consent, which consent may be granted or denied in the sole discretion
of LESSOR. If LESSOR does approve any such Alterations, LESSOR may impose any
conditions on its approval that LESSOR, in its sole discretion, believes are necessary or
appropriate, including, without limitation, the right to select or approve the contractor, the right
.4q require additional security or a bond to ensure LESSEE's payment for the Alterations, the
right to require that LESSEE obtain all necessary permits, and other such requirements as
LESSOR may elect to impose. All such Alterations shall be made at LESSEE's cost, and
LESSEE shall not cause or permit any lien against the VBTDC, and if any lien is placed against
the VBTDC, LESSEE shall, within ten days, cause such lien to be removed. All Alterations
made by LESSEE shall be made in accordance with all applicable Codes and with good
materials and workmanship.
7
Lease - Unimaginable, LLC
5. LESSEE's Space Needs.
5.1 Additional Space Needs. If at any time during the Term, LESSEE
provides notice to LESSOR that LESSEE requires additional space, LESSOR shall use its
commercially reasonable efforts to provide to LESSEE such additional space that LESSEE
requires either within the VBTDC, if LESSEE continues to require the services provided by the
VBTDC or elsewhere in the City of Vernon if (a) LESSEE no longer requires the services
provided by the VBTDC or (b) the appropriate amount of space is not available in the VBTDC.
If LESSEE signs a lease for space either within the VBTDC or elsewhere in the City of Vernon,
LESSOR shall terminate this Lease, effective as of the commencement date of the new lease for
premises within the VBTDC or elsewhere in the City of Vernon without penalty or payment of a
termination fee. LESSEE shall pay all relocation expenses and shall leave the Premises in the
condition otherwise required under this Lease.
5.2 Extended Term. So long as LESSEE has not been in default under
this Lease during the Term, if LESSEE provides written notice to LESSOR at least six (6)
months prior to the Expiration Date that LESSEE desires to extend the Term, and LESSOR has
not leased the Premises to another party, and LESSEE is not in default under this Lease as of the
last day of the original Term, LESSOR shall lease the Premises to LESSEE for an extended term,
not to exceed an additional 12 months, on the terms and conditions of this Lease, including the
rent set forth herein.
6. Assignment and Sublease.
6.1 Permission Required to Assign or Sublease. LESSEE shall not
assign this Lease, sublease the Premises or permit the Premises to be used by any person or
entity other than LESSEE, or encumber LESSEE's interest in the Lease or the Premises without
first obtaining LESSOR's written consent, which consent shall not be unreasonably withheld.
Any assignment, mortgage, pledge, encumbrance, transfer or sublease (collectively, any
"Transfer") without LESSOR's prior written consent shall be voidable, and shall constitute a
default under this Lease.
6.2 Voluntary Assignment due to Changes in Structure of LESSEE.
Any change of stock ownership or control of LESSEE shall constitute an assignment requiring
the consent of LESSOR as described in this Lease.
6.3 Request to Assign or Sublease. If LESSEE desires to Transfer the
Lease or the Premises, LESSEE shall deliver to LESSOR notice, at least thirty (30) days prior to
the date when LESSEE desires the Transfer to be effective, setting forth the name, address, and
business of the proposed assignee or sublessee, business and personal credit applications and
information (including references and such financial documentation as LESSOR shall reasonably
prescribe) concerning the character and financial condition of the proposed assignee or
sublessee, the effective date of the assignment or sublease, and all the material terms and
conditions of the proposed assignment.
6.4 LESSOR's Consent. LESSOR shall use its commercially
reasonable efforts to respond to LESSEE within thirty (30) days after receipt of LESSEE's notice
8
Lease - Unimaginable, LLC
and all relevant information required by LESSOR by advising LESSEE of LESSOR's consent or
denial of the proposed Transfer. LESSOR, however, shall have no obligation to respond within
such 30 day period, and shall not be in default hereunder, and LESSEE shall have no additional
rights or remedies in the event that LESSOR does not respond within thirty (30) days.
LESSOR's failure to respond within thirty days shall not be deemed consent to the Transfer.
6.5 Reasonable Grounds for Denial of Transfer. LESSEE
acknowledges that, in addition to such other reasonable grounds as LESSOR may assert for
withholding its consent, it shall be reasonable under this Lease and any applicable law for
LESSOR to withhold its consent to any proposed Transfer, where any one or more of the
following conditions exists:
6.5.1 The proposed sublessee or assignee (a "Transferee") is,
in LESSOR's reasonable judgment, of a character or reputation which is not consistent with
those businesses customarily found in the VBTDC, or the Transferee does not have the business
needs for which the VBTDC has been designed (ie, the Transferee is not appropriately defined as
an incubator company), or the Transferee does not operate a business that is of the nature
consistent with those generally found in the VBTDC or intended to be serviced by the VBTDC.
6.5.2 The Transferee is not a party of reasonable financial
worth and/or financial stability on the date consent is requested, or has demonstrated a prior
history of credit instability or unworthiness;
6.5.3 The Transfer will cause LESSOR to be in violation of
another lease or agreement to which LESSOR is a party, or would give another occupant of the
VBTDC a right to cancel its lease.
6.6 LESSEE's Continued Obli ag tion. Any consent by LESSOR to a
Transfer shall not release LESSEE from any of LESSEE's obligations hereunder or be deemed to
be a consent by LESSOR to any subsequent Transfer, and LESSEE shall remain liable for
payment of the rent and performance of all other obligations to be performed by LESSEE
hereunder. LESSOR's acceptance of rent from any other person shall not be deemed to be a
waiver by LESSOR of any provision of this Lease. If any Transferee of LESSEE defaults in the
performance of any of the provisions of this Lease, LESSOR may proceed directly against
LESSEE without the necessity of exhausting remedies against such Transferee.
7. Services Provided by Lessor.
7.1 Electrical Services. The LESSOR shall provide "Basic Electric
Service" to the Premises on a 24 hour per day, 7 day per week basis. "Basic Electric Service"
shall mean and include 15 amp electrical outlets, per code, and florescent general lighting, not to
exceed a consumed electrical load of 5 watts per rentable square foot of the Premises during
normal business hours, calculated on a monthly basis. If LESSEE requires or uses electrical
services in excess of the Basic Electric Service, LESSOR shall, at LESSOR's option, have the
right to install a separate meter to keep track of LESSEE's electrical usage, and LESSEE shall
reimburse LESSOR for the costs of the installation of the meter, and for costs of electrical usage
in excess of the Basic Electric Service.
9
Lease - Unimaginable, LLC
7.2 Water. The LESSOR shall provide tepid water in the common
area rest rooms, conference room, break room, and janitorial rooms on a 24 hour per day, 7 day
per week basis. If LESSEE requires water service for its operations, and LESSOR, in its sole
discretion, elects to provide such services, LESSOR shall install suitable separately metered
water and sewer service at LESSEE's sole cost and expense. Potable water lines shall include
backflow preventers where required by the Vernon Health Department. LESSEE is responsible
for obtaining the required annual backflow preventer testing on all such units within its water
system.
7.3 HVAC. LESSOR shall provide general heating, ventilation and air
conditioning to all areas of the VBTDC facility. LESSEE acknowledges that the heating zones
do not always match the tenant spaces, so the LESSOR controls all thermostats in the VBTDC.
If LESSEE requires special ventilation for its operations, LESSEE, at its cost, shall install
suitable exhaust systems, including a fresh air replenishment system to prevent depletion of
conditioned air in the building. LESSOR will provide HVAC to the Premises as needed.
7.4 Natural Gas. LESSOR does not provide natural gas service
although provisions have been made to get gas service from the street to the building, and
LESSEE may arrange for separately metered service to its Premises, at LESSEE's cost,
following written approval by LESSOR.
7.5 Janitorial Service. LESSOR shall provide routine janitorial service
to the Common Areas (hallways, conference room, rest rooms, break areas, reception .area, and
warehouse) on a reasonable basis as determined by LESSOR. LESSEE is responsible, at its cost,
for janitorial services, cleaning and waste removal within its Premises. LESSEE shall maintain
the Premises in a clean and habitable manner, and in a manner that does not create a nuisance or
otherwise adversely affect or annoy other tenants in the VBTDC.
7.6 Trash Service. LESSOR shall provide general waste disposal
(dumpsters within trash collection area at north end of facility). If LESSEE's operations
generate significant waste volume (in excess of 6 cubic feet per week), LESSEE must, at its cost,
establish appropriate separate trash collection and disposal services.
7.7 Cop jnng Services. LESSOR offers incidental copying to all
tenants at a copy center located in the VBTDC reception area. If LESSEE has significant
reproduction requirements (to be determined by LESSOR, in its reasonable discretion), Silva
..,,Printing, the in-house printer, offers attractive discounts to tenant companies of the VBTDC.
7.8 Receptionist Services. LESSOR provides a receptionist, who will
be located in the reception area of the VBTDC. The receptionist will generally be available
during normal business hours to direct visitors and receive packages. The receptionist will not
provide any additional services to any tenants of the VBTDC, except that, in consideration of the
telephone charge described below, the receptionist may answer LESSEE's telephone and send
and receive a limited number of faxes for LESSEE.
7.9 Telephone Services. As an accommodation, and pursuant to a
separate agreement outside of this Lease, the LESSOR offers an optional telephone answering
10
Lease - Unimaginable, LLC
service for an additional charge of $20 per month. This service, which routes LESSEE's
telephone line(s) through the VBTDC reception desk, allows the receptionist to answer
LESSEE's phone if LESSEE's employees are not available. The service also includes voice
mail, call forwarding, and extension addressing. As part of this service, the LESSOR provides
one single line handset. If LESSEE requires additional handsets, or multi -line handsets, they are
available for an additional monthly charge. In addition, this service includes a general FAX
number for sending and receiving a limited number of faxes to the reception area, eliminating the
need for LESSEE to have a separate fax line for incidental faxing. LESSEE will be required to
pick up faxes at the reception area, as there is no delivery service provided by LESSOR. If
LESSEE's use of the telephone answering services or fax services becomes excessive, in
LESSOR's sole judgment, LESSOR may, at its option, cease providing such services to LESSEE
or charge LESSEE for such services.
7.10 Storage. Pursuant to a separate agreement outside of this Lease,
LESSOR offers optional warehouse space at $0.35 per square foot. Warehouse space is limited,
so individual tenants are limited to a prorated share of the available space, based on the
percentage of square footage of the VBTDC facility leased by LESSEE. For example, if
LESSEE is leasing 2,600 square feet of the available 26,000 square feet tenant space in the
VBTDC, the LESSEE may lease up to 150 square feet of the 1,500 square feet of warehouse
space.
7.11 Limitation on LESSOR's Liability for Failure to Provide Utilities
and/or Services. LESSOR shall not be liable to LESSEE in damages or otherwise for LESSOR's
failure to perform any of the services or provide any of the utilities described in this Lease to be
performed or provided by LESSOR. Any stoppages, failures or interruption of any of the
services to be supplied by LESSOR to LESSEE shall not violate any covenant or agreement
herein, but LESSOR agrees to use commercially reasonable efforts to restore any services
obliged to be provided by LESSOR when failures, stoppages, or interruptions occur. LESSEE
hereby releases LESSOR from any liability for damages, by abatement of rent or otherwise, for
any failure or delay in furnishing any of the services or utilities specified in this Lease
(including, but not limited to telephone and telecommunication services), or for any diminution
in the quality or quantity thereof. LESSEE's release of LESSOR's liability shall be applicable
regardless of the cause or reason for the failure, delay or diminution is occasioned, unless caused
by LESSOR's gross negligence or willful misconduct. Such failures, delays or diminution shall
never be deemed to constitute a constructive eviction or disturbance of LESSEE's use and
possession of the Premises, or serve to relieve LESSEE from paying rent or performing any of its
obligations under the Lease. Furthermore, LESSOR shall not be liable under any circumstances
in damages or otherwise for a loss of, injury to, or interference with, LESSEE's business,
including, without limitation, any loss of profits occurring or arising through or in connection
with or incidental to LESSOR's failure to furnish any of the services or utilities required by this
Lease.
8. Business Consulting Services.
8.1 Consulting Services. LESSOR may, from time to time, make
available to the tenants of the VBTDC, at no charge, the consulting services (the "Consulting
Services") of a business consultant (the "Business Consultant") located at the VBTDC. The
11
Lease - Unimaginable, LLC
Business Consultant does not have specific knowledge of any tenant's particular business, but
will have general background knowledge, training, or experience in start-up businesses and
general management techniques. The Business Consultant will be available at the VBTDC at
hours to be determined by the Business Consultant in his sole discretion, and the Business
Consultant shall not be obligated to be at the VBTDC at any particular time or for any particular
number of hours a week. The Business Consultant shall, however, make commercially
reasonable efforts to post the hours at which he intends to be available during a particular week,
and shall be available for mutually agreed to appointments. The Business Consultant will, on a
reasonable basis, provide information to LESSEE and other tenants of the VBTDC in areas in
which he has expertise, and will otherwise attempt to provide referrals to the tenants.
8.2 No LESSOR Liability. LESSEE acknowledges that in providing
any business advice or consulting services pursuant to this Lease, LESSOR and the Business
Consultant are acting solely as independent contractors and not as the agent, partner, or joint
venturer of LESSEE. Neither LESSOR nor the Business Consultant undertakes by this Lease or
otherwise to perform or discharge any liability or obligation of the LESSEE or to assume any
responsibility whatsoever for the conduct of the business or operations of the LESSEE.
LESSOR, LESSEE, and the Business Consultant are not, in any way, or for any purpose, joint
venturers, partners, or members of a joint enterprise. There is no financial, business, or other
arrangement between LESSOR (and Business Consultant) and LESSEE or sharing of profits or
other relationship other than that of landlord and tenant. LESSEE acknowledges that the
Consulting Services are provided by LESSOR solely as an accommodation to and for the
convenience of LESSEE, and LESSOR does not make any representation, warranty or guarantee,
express or implied, as to the quality, value, accuracy, or completeness of the Consulting
Services, or whether or not LESSEE shall be satisfied with the Consulting Services. LESSOR
hereby disclaims any control over the quality, accuracy, completeness, or sufficiency of the
Consulting Services. LESSEE acknowledges that LESSEE is not required to use the Consulting
Services; that LESSEE's use of the Consulting Services is strictly voluntary, and at the sole
discretion and control of LESSEE.
8.3 Release. Notwithstanding anything to the contrary contained in
this Lease or any applicable law to the contrary, LESSEE's execution of this Lease evidences
LESSEE's agreement that, solely as it relates to the use of Consulting Services by LESSEE or
LESSEE's Parties, LESSEE, on behalf of itself and LESSEE's Parties, does hereby and shall
forever hold LESSOR and LESSOR's affiliates, agents, assigns, contractors, directors,
employees, officers, parent organization, partners, representatives, shareholders, and
"subsidiaries, including, without limitation, Business Consultant and Woodbury University
(collectively, the "Indemnitees") harmless from and forever release, remise, discharge, acquit
and relieve the Indemnitees from and against any and all claims, demands, causes of action,
obligations, liabilities, agreements, damages, cost (including, without limitation, reasonable
attorneys' fees), loss, or liability of any kind or nature, whether asserted, known or unknown,
suspected or unsuspected, in any way connected with, which any one or more of the Indemnitees
may sustain or incur by reason of, related to, associated with, or arising out of the provision, use
or the rendering of any such Consulting Services or the delivery of such Consulting Services to
LESSEE or LESSEE's Parties.
12
Lease - Unimaginable, LLC
Solely as it relates to the use of Consulting Services by LESSEE or
LESSEE's Parties, LESSEE hereby expressly waives all rights and
benefits conferred by the provisions of Section 1542 of the Civil Code of
the State of California, which reads as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND WHICH, IF KNOWN BY HIM, MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR"
9. Waiver and Indemnification.
9.1 Waiver. LESSEE, as a material part of the consideration to
LESSOR, hereby assumes all risk of damage to personal property of LESSEE, or injury to
persons in or about the Premises. Notwithstanding any contrary provision herein, and except to
the extent arising from the gross negligence, recklessness or willful misconduct of the LESSOR
or LESSOR's employees or agents, LESSOR shall not be liable and LESSEE hereby waives all
claims against LESSOR for any injury or damage to any person or property or any other loss
(including, but not limited to loss of income), which may be sustained by the person, goods,
wares, merchandise or property of LESSEE, or LESSEE's Parties, or any other person in or
about the Premises or the VBTDC by or from any cause whatsoever. Without limiting the
generality of the foregoing, LESSOR shall not be liable for any damage caused by or resulting
from or by: (a) water leakage of any character from the roof, walls, windows, basement, or any
other portion of the Premises or the VBTDC; (b) fire, steam, electricity, gas or oil, or bursting,
leaking, or overflowing of water, sewer or steam pipes; (c) any interruption of utilities or
services; (d) any act by any tenant, occupant, or other person, including theft; (e) casualty, fire,
acts of God, public enemy, riot, strike, picketing, mob action, bombing, explosion war, acts of
terrorists; (f) the construction, repair, maintenance, or alteration of any part of the Premises or
the VBTDC; (g) breakage, leakage, or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC, or lighting fixtures; or (h) any other cause whatsoever, in, on or about the
Premises or the VBTDC. Notwithstanding any contrary provision in this Lease, LESSOR shall
not in any event be liable for injury to LESSEE's business or for any loss of income or profit
therefrom, or for any other consequential damages.
9.2 Indemnity. Except to the extent that claims arise from the gross
.-negligence, recklessness or willful misconduct of LESSOR or the Indemnities, LESSEE shall
indemnify and hold the Indemnities harmless from and against any and all claims, demands,
losses, damages, obligations, liabilities, costs and expenses (including, but not limited to,
reasonable attorney's fees) for injury to, or death of, any person or damage to property arising
from or in connection with LESSEE's use or occupancy of the Premises, or occasioned in whole
or in part from any act or omission of LESSEE or LESSEE's Parties, or from any act or
omission, work or thing done, permitted or suffered by LESSEE or any of LESSEE's Parties in
or about the VBTDC, or from any breach or default of this Lease by LESSEE. The provisions of
this Paragraph shall survive the expiration or termination of this Lease.
10. Insurance.
13
Lease - Unimaginable, LLC
10.1 Throughout the Term, LESSEE shall carry, at its cost, the
following insurance:
10.1.1 Workers' Compensation Insurance. Statutory Workers'
Compensation insurance including employer's liability for all employees as required by
applicable state and federal regulations; and
10.1.2 Commercial General Liability Insurance. A policy of
commercial general liability insurance with a combined limit of $500,000 each occurrence and
aggregate coverage, in the name of LESSEE (naming, as additional insureds, LESSOR,
LESSOR's managing agent, the Business Consultant, and VBTDC), including bodily injury,
personal injury and broad form property damage (including loss of use thereof), and contractual
liability (covering the performance by LESSEE of its indemnity agreements under this Lease)
Such insurance shall be written as primary coverage and non-contributing with respect to any
insurance maintained by the LESSOR.
10.1.3 Property Insurance. LESSEE shall procure and maintain
property insurance coverage for: (a) all office furniture, trade fixtures, office equipment,
merchandise and all other items of LESSEE's property in, on or about the Premises and the
VBTDC, including property installed by, for or at the expense of LESSEE and (b) Tenant
Improvements. LESSEE's property insurance shall be written on the broadest available "all
risk" (special causes of loss) policy form and shall include an agreed amount endorsement for no
less than one hundred percent (100%) of the full replacement cost (new, without deduction for
depreciation) of the covered items and property. The property insurance coverage shall include
vandalism and malicious mischief coverage, and sprinkler leakage coverage.
10.2 Delivery of Certificate, Policy and Endorsements. Prior to
LESSEE's occupancy of the Premises, LESSEE shall provide LESSOR with evidence of
compliance with LESSEE's insurance requirements under the Lease. Each insurance policy
shall provide that it may not be modified or canceled without thirty (30) days prior written notice
to LESSOR and to any other additional insureds. At least ten (10) days prior to the expiration of
any of such policies, LESSEE shall furnish LESSOR with a renewal or binder therefor.
10.3 Waiver of Subrogation. LESSOR and LESSEE hereby release and
relieve the other, and waive all causes of action and rights of recovery against each other for any
loss occurring to their property resulting from any of the perils insured against under any and all
.insurance policies in effect at the time of any such loss or which, under this Lease, were required
to be insured against, regardless of cause or origin of such loss. LESSOR and LESSEE shall
each cause their respective insurers to issue an endorsement denying such insurer any rights of
subrogation against the other party.
11. Default and Remedies.
11.1 The occurrence of any one or more of the following events shall
constitute a default hereunder:
11.1.1 LESSEE'S failure to pay any one or more of said
installments of rent or other charges hereunder as and when the same become due, where such
14
Lease - Unimaginable, LLC
failure continues for a period of five days following delivery of written notice of nonpayment to
LESSEE;
Bankruptcy Code;
creditors;
11.1.2 LESSEE'S becoming a "debtor" as defined in the U.S.
11.1.3 LESSEE'S making an assignment for the benefit of
11.1.4 Appointment of a receiver of LESSEE'S property;
11.1.5 LESSEE'S vacating of the Premises or abandonment of
the possession thereof, even if LESSEE continues to pay rent. LESSEE acknowledges that its
use of the Premises and the development of its business is critical to the purposes of LESSOR in
establishing the VBTDC, and that LESSEE's continuing use of the Premises for business
purposes constitutes a material inducement to LESSOR in entering into this Lease. LESSEE
therefore waives the provisions of the California Civil Code related to abandonment.
11.1.6 LESSEE's use of the Premises for purposes other than
that specified in Paragraph 4.1 above.
11.1.7 LESSEE'S breach or violation of any of the other terms,
conditions or covenants of the Lease (including the exhibits attached hereto) not described in
Paragraphs 11.1.1 through 11.1.6 above, where such failure continues for a period of thirty (30)
days after written notice to LESSEE; provided, however, that if the nature of the violation is such
that more than thirty (30) days is reasonably required for it cure, then LESSEE shall not be in
default hereunder if LESSEE commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion.
11.2 If LESSOR terminates this Lease as a result of a default by
LESSEE described above (a "Default Termination"), then LESSOR may recover from LESSEE
the total of:
11.2.1 the worth at the time of award of the unpaid rent earned
to the date of such Default Termination; and
11.2.2 the worth at the time of award of the amount by which
{ the unpaid rent which would have been earned after the date of such Default Termination until
the time of award exceeds the amount of such rental loss that LESSEE proves could have been
reasonably avoided; and
11.2.3 the worth at the time of award of the amount by which
the unpaid rent which would have been earned for the balance of the Term after the time of
award exceeds the amount of such rental loss that LESSEE proves could have been reasonably
avoided; and
11.2.4 any other amount reasonably necessary to compensate
LESSOR for all of the detriment proximately caused by LESSEE's failure to observe or perform
15
Lease - Unimaginable, LLC
any of its covenants and agreements under this Lease or which in the ordinary course of events
would be likely to result therefrom; and such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under applicable California laws.
11.3 If a Default Termination occurs, LESSOR or LESSOR's
authorized representatives may re-enter the Premises and remove all persons and all property
therefrom, either by summary dispossession proceedings or by any suitable action or proceeding
at law, without being liable to indictment, prosecution or damages therefor, and may repossess
and enjoy the Premises. No re-entry or repossession of the Premises by LESSOR or its
representatives under this paragraph shall be construed as an election to terminate this Lease
unless a notice of such election is given to LESSEE or unless the termination thereof is decreed
by a court of competent jurisdiction. If LESSOR does not elect to terminate this Lease despite
the occurrence of an event of default, LESSOR may, from time to time and without terminating
this Lease, enforce all its rights and remedies under this Lease, including the right to recover the
rent as the same becomes payable by LESSEE hereunder.
11.4 If LESSEE abandons the Premises in breach of this Lease,
LESSOR shall have the right to relet the Premises or any part thereof on such terms and
conditions and at such rentals as LESSOR in its sole discretion may deem advisable, with the
right to make alterations and repairs in and to the Premises necessary to reletting. If LESSOR
elects to relet, then gross rentals received by LESSOR from the reletting shall be applied:
first, to the payment of the reasonable expenses incurred or paid by LESSOR in
re-entering;
second, to the payment of the rent payable by LESSEE hereunder; and
third, the remainder, if any, to be retained by LESSOR and applied to the
payment of future rent as the same becomes due.
Should the gross rentals received by LESSOR from the reletting be insufficient to
pay in full the sums stated above, LESSEE shall, upon demand, pay the deficiency to LESSOR.
12. General Provisions
12.1 Facility Activities. LESSEE agrees to participate, within
reasonable limits, in facility activities sponsored by LESSOR. Such activities may include tours
F of the facility, convocations, educational seminars and other programs and events. LESSOR
agrees to coordinate with LESSEE regarding participation in such activities and to recognize the
reasonable limitations of LESSEE. It is expressly agreed that LESSOR recognizes the legitimate
proprietary rights of LESSEE with regard to certain records, processes and projects.
12.2 Lease Termination Obli atg ions. At the expiration or earlier
termination of the Lease, LESSEE shall:
12.2.1 surrender the Premises in the same condition as the
Premises were in upon delivery of possession thereto under this Lease, reasonable wear and tear
16
Lease - Unimaginable, LLC
and damage by unavoidable casualty excepted, and the costs or charges necessary to repair any
damaged part of said Premises shall be paid by LESSEE to LESSOR;
12.2.2 surrender all keys for the Premises and all access cards to
the building to LESSOR, and shall inform LESSOR of all combinations on locks, safes and
vaults, if any, in the Premises; and
12.2.3 remove at its own expense all its trade fixtures and any
alterations or Improvements LESSOR requests to be removed before surrendering the Premises
as aforesaid and shall pay to LESSOR any amount necessary to repair any damage to the
Premises caused thereby.
12.2.4 LESSEE'S obligation to observe or perform this
covenant shall survive the expiration or other termination of the term of this Lease.
12.2.5 No Smoking facility. Smoking is strictly prohibited
within the VBTDC BUILDING, and within 20 feet of the building. LESSEE agrees to adhere to
such prohibition, and to cause LESSEE's Parties to adhere to such prohibition.
12.2.6 Exhibits A and B are attached hereto and incorporated
herein by this reference. LESSEE has read and fully understands the attached exhibits and
agrees to abide by all the conditions, rules, regulations and procedures contained therein.
12.3 Damage or Destruction. If the Premises or the VBTDC are
damaged or destroyed by earthquake, fire, flood, or other casualty or catastrophe, including by
act of war, civil disobedience, or act of terrorist, LESSOR shall, in its reasonable judgment,
either terminate this Lease by delivering written notice to LESSEE, specifying the effective date
of such termination, or maintain the Lease in full force and effect by delivering written notice to
LESSEE of the anticipated date by which LESSEE will be able to re -occupy the Premises.
Notwithstanding anything to the contrary in this Lease, if the Premises are not ready for
occupancy on the date set forth in LESSOR's notice, this Lease shall not be void or voidable, nor
shall LESSOR be liable to LESSEE for any damage resulting from LESSOR's inability to
deliver such possession. However, LESSEE shall not be obligated to pay rent until possession of
the Premises has been delivered to LESSEE by LESSOR. Except for such delay in the payment
of rent following the damage or destruction, LESSOR's failure to give possession on the
anticipated date shall in no way affect LESSEE's obligations hereunder; provided, however, that
i possession of the Premises is not tendered by LESSOR within ninety (90) days after the
anticipated date set forth in LESSOR's notice, LESSEE shall have the right to terminate this
Lease by giving written notice to LESSOR within ten (10) days after such failure. If such notice
of termination is not given by LESSEE within said ten (10) day time period, then this Lease shall
continue in full force and effect for the balance of the original Term, plus the number of days
during which LESSEE was not able to use the Premises. If LESSEE uses a portion of the
Premises during the reconstruction period, LESSEE shall pay a prorated portion of the rent
otherwise due hereunder, and if LESSEE is not able to use the Premises for its intended usage,
the rent shall be fully abated during such period.
17
Lease - Unimaginable, LLC
12.4 Condemnation. If the Premises or the VBTDC is condemned or
taken by an agency authorized to condemn the property, or if the Premises or the VBTDC is
voluntarily deeded to such an agency under threat of condemnation, this Lease shall terminate as
of the effective date of the condemnation or voluntary deeding, and neither party shall have any
further obligation or liability to the other, except that LESSEE shall make any payments then
owing to LESSOR and LESSOR shall return to LESSEE any portion of the Security Deposit
payable to LESSEE. All condemnation proceeds shall be the sole property of LESSOR.
12.5 Broker. LESSOR and LESSEE represent to one another that each
has dealt with no broker in connection with this Lease other than Bob Toering , representing
LESSOR, and M. Muellerleile representing LESSEE. LESSOR shall pay the fees of the
broker engaged by LESSOR and LESSEE shall pay the fees of the broker engaged by LESSEE.
LESSOR and LESSEE shall hold one another harmless from and against any and all liability,
loss, damage, expense, claim, action, demand, suit or obligation arising out of or relating to a
breach by the indemnifying party of such representation.
12.6 Attorneys' Fees. If any action, proceeding, or litigation is
instituted between LESSOR and LESSEE arising out of or related to this Lease or any other
relationship or actions or conduct between them, the prevailing party in such action, proceeding,
or litigation shall be entitled to receive its costs (not limited to court costs), expenses and
reasonable attorneys' fees from the non -prevailing party.
12.7 Waiver of Trial by Jury. In the interest of saving time and
expense, LESSOR and LESSEE hereby consent to trial without a jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other or their successor -in -
interest in respect to any matters arising out of or relating to this Lease.
12.8 Notices. Except as may be otherwise provided in this Lease, all
notices required or permitted by this Lease shall be in writing, sent to LESSOR at the address set
forth in the first paragraph of this Lease and to LESSEE at the Premises, and may be delivered in
person (by hand or by messenger) or by overnight courier service or by certified or registered
mail, return receipt requested. Notices shall be deemed delivered or given when delivered (as
shown by the receipt) or when delivery is refused.
12.9 Severability. The invalidity or unenforceability of any provision of
this Lease shall not affect the validity of any other provision of this Lease, and the unenforceable
provision shall be limited to the extent necessary to make it valid and enforceable, or, if
necessary, severed from this Lease.
12.10 Waivers. No waiver by either party of any breach or default by the
other party shall be deemed a waiver of any other term, covenant or condition hereof, and no
waiver shall be effective unless in writing.
12.11 Interpretation and Modification; Entire Agreement. This Lease is
not binding until executed and delivered by both parties. This Lease may be modified only in
writing, signed by both parties. The headings and titles in this Lease are solely for convenience
and shall not affect the interpretation or meaning of the provisions. This Lease, together with its
18
Lease - Unimaginable, LLC
exhibits, contains all of the agreements of the parties to this Lease and supersedes and replaces
any prior or contemporaneous oral or written memorandum, term sheets, drafts, or other writings
or discussions.
City of Vernon:
Unimaginable, Ile:
By: c r By:
Typed e: Le —�sQ.M urg Typed N e: Michael J. Muellerleile
Title: Mayor Title: Owner
ATTEST:
Typed Name: Bruce V. Malkenhorzt Typed Name: Renee McCrascken
Title: City Clerk Title: Owner
APPROVED
AS TO FORM: �4c-�
Typed Name: Eric T. Fresch
Title: City Attorney
19
Lease - Unimaginable, LLC
I1:
0
Z
EXFIIBrrA-Uninm inable,LLC
w
w
z
w
U
F
z
w
O M
�C>
o
rn
� U
o
OJ O>
LL z
ai
W`
o �
z m
Qcl)
��
w M
z <'>
05
D
00
z
O
z
w
w
EXHIBIT B
Vernon Business and Technology and Development Center (the "VBTDC")
RULES AND REGULATIONS
Notwithstanding anything contained in these Rules and Regulations to the contrary,
Lessor agrees that it will not unreasonably modify these Rules and Regulations. Lessee shall
faithfully observe and comply with the following Rules and Regulations. Lessor shall not be
responsible to Lessee for the nonperformance of any of the Rules and Regulations by any other
tenants of the VBTDC. In the event of any conflict between the Rules and Regulations and the
other provisions of this Lease, the Lease shall control.
Lessee shall not alter any lock or install any new or additional locks or bolts on
any doors or windows of the Premises without obtaining Lessor's prior written
consent. Lessee shall bear the cost of any lock changes or repairs required by
Lessee. 2 keys and 2 access cards will be furnished by Lessor, and any additional
or replacement keys or access cards required by Lessee will be paid for by Lessee
at Lessor's actual cost.
2. Except with respect to any entire floor of the Building leased by Lessee, all doors
opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises.
3. Lessor reserves the right to close and keep locked all entrance and exit doors of
the Building during such hours as are reasonable. Lessee, its employees and
agents must be sure that the doors to the Building are securely closed and locked
when leaving the Premises if it is after the normal hours of business for the
Building. Any Lessee, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required to
sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged pass
for access to the Building. Lessor will furnish passes to persons for whom
Lessee requests same in writing. Lessee shall be responsible for all persons for
whom Lessee requests passes and shall be liable to Lessor for all acts of such
persons. The Lessor and his agents shall not be liable for damages for any error
with regard to the admission to or exclusion from the Building of any person. In
case of invasion, mob, riot, public excitement, or other commotion, Lessor
reserves the right to prevent access to the Building or the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No bulky or large furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Lessor. All moving activity into or out of the
Building shall be scheduled with Lessor and done only at such time and in such
EXMBrr B - Unimaginable, LLC
manner as Lessor designates. Lessor shall have the right to prescribe the weight,
size and position of all heavy property brought into the Building and also the
times and manner of moving the same in and out of the Building. Heavy objects
shall, if considered necessary by Lessor, stand on supports of such thickness as is
necessary to properly distribute the weight. Lessor will not be responsible for
loss of or damage to any such property in any case.
5. Furniture, packages, supplies, equipment or merchandise shall only be carried up
or down in the freight elevator. The passenger elevator, in the front lobby, shall
not be used to move large, bulky items.
6. The requirements of Lessee will be attended to only upon application at the
management office for the Center or at such office location designated by Lessor.
Employees of Lessor shall not perform any work or do anything outside their
regular duties unless under special instructions from Lessor.
7. No sign, advertisement, notice or handbill shall be exhibited, distributed, painted
or affixed by Lessee on any part of the exterior of the Premises or any part of the
Building without the prior written consent of the Lessor. Lessee shall not disturb,
solicit, peddle, or canvass any occupant of the Center and shall cooperate with
Lessor and its agents of Lessor to prevent same.
8. The toilet rooms, urinals, wash bowls and other 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.
9. Lessee shall not overload the floor of the Premises, nor mark, drive nails or
screws, or drill into the partitions, woodwork or drywall or in any way deface the
Premises or any part thereof without Lessor's prior written consent. Lessee shall
not purchase spring water, ice, towel, linen, maintenance or other like services
from any person or persons not approved by Lessor.
10. Except for vending machines intended for the sole use of Lessee's employees and
invitees, no vending machine or machines other than fractional horsepower office
machines shall be installed, maintained or operated upon the Premises without
the written consent of Lessor.
11. Lessee shall not use or keep in or on the Premises or the VBTDC any kerosene,
gasoline, explosive material, corrosive material, material capable of emitting
toxic fumes, or other inflammable or combustible fluid chemical, substitute or
material (except for small amounts of normal office supplies, all of which shall
be used and disposed of in compliance with all applicable laws) without the prior
written consent of Lessor. Lessee shall provide material safety data sheets for
any Hazardous Material used or kept on the Premises.
12. Lessee shall not, without the prior written consent of Lessor, use any method of
heating or air conditioning other than that supplied by Lessor.
EXffiBTT B - Unimaginable, LLC
13. Lessee shall not use, keep or permit to be used or kept, any foul or noxious gas or
substance in or on the Premises, or permit or allow the Premises to be occupied
or used in a manner offensive or objectionable to Lessor or other occupants of the
Center by reason of noise, odors, or vibrations, or interfere with other Lessees or
those having business therein, whether by the use of any musical instrument,
radio, phonograph, or in any other way. Lessee shall not throw anything out of
doors, windows or skylights or down passageways.
14. Lessee shall not bring into or keep within the Center, the Building or the Premises
any animals, birds, aquariums, or other pets. Lessee shall keep bicycles or other
vehicles only in areas designated by Lessor.
15. Unless the business activity of the Lessee is food processing or preparation, no
cooking shall be done or permitted on the Premises, nor shall the Premises be
used for lodging or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters' laboratory -approved equipment
and microwave ovens may be used in the Premises for heating food and brewing
coffee, tea, hot chocolate and similar beverages for employees and visitors,
provided that such use is in accordance with all applicable laws.
16. Lessee shall not occupy or permit any portion of the Premises to be occupied as
an office for the manufacture or sale of liquor, narcotics, or tobacco in any form,
or as a medical office, or as a barber or manicure shop, or as a governmentally
operated employment bureau without the express prior written consent of Lessor.
Lessee shall not engage or pay any employees on the Premises except those
actually working for such Lessee on the Premises nor advertise for laborers
giving an address at the Premises.
17. Lessor reserves the right to exclude or expel from the Center any person who, in
the judgment of Lessor, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violation of any of these Rules and
Regulations.
18. Lessee, its employees and agents shall not loiter in or on the entrances, corridors,
sidewalks, courts, halls, stairways, elevators, vestibules or any Common Areas of
the Center, nor in any way obstruct such areas, and shall use them only as a
means of ingress and egress for the Premises. Notwithstanding the foregoing,
Lessee, its employees and agents may utilize the upstairs lobby area and the
break room for informal meetings, and may utilize the first floor conference
room, when scheduled in advance through the receptionist. Lessor reserves the
right to limit a Lessee's use of common areas for informal meetings, if such
usage becomes excessive. Lessee, its employees and agents shall only smoke
tobacco products in the designated areas outside the building.
19. Lessee shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Lessor to ensure the most effective operation of the
Building's heating and air conditioning system, and shall refrain from attempting
EXHn3l T B - Unimaginable, LLC
to adjust any controls. Lessee shall participate in recycling programs undertaken
by Lessor.
20. Lessee shall store all its trash and garbage within the interior of the Premises. No
material shall be placed in the trash boxes or receptacles if such material is of
such nature that it may not be disposed of in the ordinary and customary manner
of removing and disposing of trash and garbage in Vernon, California without
violation of any law or ordinance governing such disposal. All trash, garbage
and refuse disposal shall be made only through the warehouse entry -ways and the
freight elevator at such times as Lessor shall designate. If the Premises is or
becomes infested with vermin as a result of the use or any misuse or neglect of
the Premises by Lessee, its agents, servants, employees, contractors, visitors or
licensees, Lessee shall forthwith, at Lessee's expense, cause the Premises to be
exterminated from time to time to the satisfaction of Lessor and shall employ
such licensed exterminators as shall be approved in writing in advance by Lessor.
21. Lessee shall comply with all health, safety, fire protection and evacuation
procedures and regulations established by Lessor or any governmental agency
22. Any persons employed by Lessee to do janitorial work shall be subject to the prior
written approval of Lessor, and while in the Building and outside of the Premises,
shall be subject to and under the control and direction of the Building manager
(but not as an agent or servant of such manager or of Lessor), and Lessee shall be
responsible for all acts of such persons.
23. No awnings or other projection shall be attached to the outside walls of the
Building, and no curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of the Premises without the
prior written consent of Lessor. Neither the interior nor exterior of any windows
shall be coated or otherwise sunscreened without the prior written consent of
Lessor. Lessee shall be responsible for any damage to the window film on the
exterior windows of the Premises and shall promptly repair any such damage at
Lessee's sole cost and expense.
24. The sashes, sash doors, skylights, windows, and doors that reflect or admit light
and air into the halls, passageways or other public places in the Building shall not
be covered or obstructed by Lessee, nor shall any bottles, parcels or other articles
be placed on the windowsills anywhere in the building.
25. Lessee must comply with requests by the Lessor concerning the informing of their
employees of items of importance to the Lessor.
26. Lessee must comply with all applicable "NO -SMOKING" or similar ordinances.
If Lessee is required under the ordinance to adopt a written smoking policy, a
copy of said policy shall be on file in the office of the Building.
EXHIBrr B - Unimaginable, LLC
27. Except as specifically set forth in the Lease to the contrary, Lessee hereby
acknowledges that Lessor shall have no obligation to provide guard service or
other security measures for the benefit of the Premises, the Building or the
Project. Except as specifically set forth in the Lease to the contrary, Lessee
hereby assumes all responsibility for the protection of Lessee and its agents,
employees, contractors, invitees and guests, and the property thereof, from acts of
third parties, including keeping doors locked and other means of entry to the
Premises closed, whether or not Lessor, at its option, elects to provide security
protection for the Project or any portion thereof. Lessee further assumes the risk
that any safety and security devices, services and programs which Lessor elects,
in its sole discretion, to provide may not be effective, or may malfunction or be
circumvented by an unauthorized third party, and Lessee shall, in addition to its
other insurance obligations under this Lease, obtain its own insurance coverage
to the extent Lessee desires protection against losses related to such occurrences.
Lessee shall cooperate in any reasonable safety or security program developed by
Lessor or required by law.
28. All office equipment of any electrical or mechanical nature shall be placed by
Lessee in the Premises in settings approved by Lessor, to absorb or prevent the
transmission of any vibration, noise and annoyance.
29. Lessee shall not use, in any space or in the public halls of the Building, any hand
trucks except those equipped with rubber tires and rubber side guards.
30. No auction, liquidation, fire sale, going -out -of -business or bankruptcy sale shall
be conducted in the Premises without the prior written consent of Lessor.
31. No Lessee shall use or permit the use of any portion of the Premises for living
quarters, sleeping apartments or lodging rooms.
32. Lessee shall not purchase janitorial or maintenance services from any company or
persons not approved by Lessor. Lessor shall approve a sufficient number of
sources of such services to provide Lessee with a reasonable selection, but only
in such instances and to such extent as Lessor in its judgment shall consider
consistent with the security and proper operation of the Building.
33. Lessee shall install and maintain, at Lessee's sole cost and expense, an adequate,
visibly marked and properly operational fire extinguisher next to any heat
producing equipment, which may or may not contain combustible material, in the
Premises.
34. Lessee shall obtain and maintain a Vernon business license for their business
activity and an occupancy permit for the space occupied in the Center.
Subject to the terms of the initial paragraph of these Rules and Regulations, Lessor
reserves the right at any time to change or rescind any one or more of these Rules and
Regulations, or to make such other and further reasonable Rules and Regulations as in Lessor's
EXRMrF B - Unimaginable, LLC
judgment may from time to time be necessary for the management, safety, care and cleanliness
of the VBTDC and for the preservation of good order therein, as well as for the convenience of
other occupants and Lessees therein. Lessor may waive any one or more of these Rules and
Regulations for the benefit of any particular Lessees, but no such waiver by Lessor shall be
construed as a waiver of such Rules and Regulations in favor of any other Lessee, nor prevent
Lessor from thereafter enforcing any such Rules or Regulations against any or all Lessees of the
Project. Lessee shall be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition of its occupancy of the Premises.
EXMBrr B - Unimaginable, LLC 6