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RESOLUTION NO. 2005-313
2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND
3 TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD
PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD
4 AVENUE, SUITE 300, SAN BERNARDINO.
5 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AS FOLLOWS:
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SECTION 1. The Mayor and Common Council of the City of San Bernardino do hereby
authorize the San Bernardino Employment and Training Agency ("SBETA") to enter into a lease
with Arrowhead Professional Center, L.P. with an initial rent of$23,877 per month, to be adjusted
annually as provided in Exhibit B of said lease, for a term of seven years and any extensions thereof,
for premises located at 600 N. Arrowhead Avenue, Suite 300, San Bernardino, California and
approval of Subordination Agreement of Excel National Banle
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2005-313
1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF
2 SAN BERNARDINO AUTHORIZING THE SAN BERNARDINO EMPLOYMENT AND
TRAINING AGENCY ("SBETA") TO ENTER INTO A LEASE WITH ARROWHEAD
3 PROFESSIONAL CENTER, L.P., FOR PREMISES LOCATED AT 600 N. ARROWHEAD
AVENUE, SUITE 300, SAN BERNARDINO.
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
meeting thereof, held
Common Council of the City of San Bernardino at a ioint regular
,2005, by the following vote, to wit:
NAYS
ABSTAIN ABSENT
The foregoing Resolution is hereby approved this
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22 Approved as to form and
legal content:
23
JAMESF. PENMAN,
24 City Attorney
25 By: (){)tf/'j~1 afIWJ
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DHC/js [ResolutionsISBETA.Res]
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CLERK
,2005.
VALLES, Mayor
f San Bernardino
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ORIGINAL
SUBORDINATION, NONDlSTURBANCE, AND ATTORNMENT
AGREEMENT
This sr~~on, Noneli_e, and Attornment Agreement ("Agreement") is entered
into as of q , by Excel National Bank ("Lender"), Arrowhead Professional Center, LP
("Landlord") and ity of San Bernardino ("Tenant").
RECITALS
A. Landlord and Tenant have entered into an office lease dated as of September 6, 2005]
("Lease"), covering certain premises ("Demised Premises"), located 600 N.;Arrowhead Avenue
Suite 300, San Bernardino, California, being part of a business office comple~:commonly known
as Arrowhead Professional Center. ("Property").
IIIL .1 B. _ Lender is the benerlaryhof a deed of trust ("Deed of Trust") dated as of
~, and recorded on '/. g 1J.5 , in the official records of County of San
Bernardino as [describe recording information] encumbering the Property,
which secures a note payable to Lender in the original principal amount of$1,191,000.00.
C. On the terms and conditions in this Agreement, the parties desire to subordinate
Tenant's leasehold interest in the Demised Premises to the lien of the Deed of Trust and to assure
Tenant possession of the Demised Premises for the entire term of the Lease, even though Lender may
foreclose the lien ofthe Deed of Trust before expiration of the Lease.
Therefore, in consideration of the mutual covenants and agreements contained in this
Agreement, the parties agree as follows:
Section 1. Subordination
The Lease shall be subject and subordinate to the lien of the Deed of Trust and to any
renewals, modifications, consolidations, replacements and extensions of the Deed of Trust to the full
extent of the principal sum secured by the Deed of Trust including any interest.
Section 2. Nondisturbance
So long as Tenant is not in default, beyond any period given to Tenant to cure a default, in
the payment of rent or in the performance of any of the terms, covenants, or conditions of the Lease,
Tenant's possession of the Demised Premises and Tenant's rights and privileges under the Lease,
including any extensions or renewals, shall not be diminished or interfered with by Lender during
the term of the Lease or any extensions or renewals. So long as Tenant is not in default, beyond any
period given Tenant to cure such default, in the payment of rent or in the performance of any of the
terms, covenants, or conditions of the Lease, Lender will not join Tenant as a party for the purpose
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ofterminating or otherwise affecting Tenant's interest under the Lease, in any action offoreclosure
or other proceeding brought by Lender to enforce any rights arising because of any default under the
Deed of Trust. Lender may, however, join Tenant as a party if joinder is necessary under any statute
or law to secure the remedies available to Lender under the Deed of Trust, but joinder shall be for
that purpose only and not for the purpose of terminating the Lease or affecting Tenant's right to
possession of the Demised Premises.
Section 3. Attornment.
If the Landlord's interest is transferred to and owned by Lender or any successor of Lender
("Acquiring Party") because of foreclosure, sale under a private power from a deed of trust, other
proceedings brought by Lender, or by any other manner and Lender succeeds to Landlord's interest
under the Lease, Tenant shall be bound to the Acquiring Party, and Acquiring Party shall be bound
to Tenant under all of the terms, covenants, and conditions of the Lease for the balance of the
remaining term, including any extensions or renewals, with the same effect as if Acquiring Party
were Landlord under the Lease. Tenant agrees to attorn to Acquiring Party as the Landlord, with the
attornment being effective and self-operable immediately upon Acquiring Party succeeding to the
interest of Landlord under the Lease, all without the execution by the parties of any further
instruments. However, Tenant shall not be obligated to pay rent to the Acquiring Party until Tenant
receives written notice from Acquiring Party, together with evidence satisfactory to Tenant,
demonstrating that Acquiring Party has succeeded to Landlord's interest under the Lease and
directing where rent should be mailed. The respective rights and obligations of Tenant and
Acquiring Party upon attornment, to the extent of the then remaining balance of the term of the
Lease, shaD be the same as in the Lease, which is incorporated by reference in this Agreement. If
Acquiring Party succeeds to Landlord's interest in the Lease, Acquiring Party shall be bound to
Tenant under all the terms, covenants, and conditions of the Lease, and Tenant shall, after Acquiring
Party's succession to Landlord's interest, have the same remedies against Acquiring Party for the
breach of any agreement in the Lease that Tenant might have had against Landlord.
Section 4. New Lease and Further Instruments.
hnmediatelyupon request by the Acquiring Party, Tenant and Acquiring Party shall enter into
a new written lease for the remainder of the original term of the Lease on the same terms and
conditions as the Lease, except for any changes made necessary because of the substitution of the
Acquiring Party in place of Landlord.
Section S. Definitions.
The term "Lender" or any similar term shall include Lender, the trustee under any deed of
trust affecting the Demised Premises, and any agents, heirs, successors, or assigns, including any
party that succeeds to Landlord's interest by foreclosure of the Deed of Trust, of the deed in lieu of
foreclosure, or of a sale under a private power contained in the Deed of Trust or by any other
proceeding. The term "Deed of Trust" or any similar term shall include the Deed of Trust and any
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amendments or addenda. The term "Landlord" shall inolude Landlord and the successors, assigns,
and sub lessees of Landlord. The term "Tenant" shall include Tenant and the successors, assigns, and
sublessess of Tenant. This Agreement shall inure to the benefit of and be binding upon all
successors, assigns, and sub lessees. The term "Lease" shall include the Lease and all amendments,
addenda, extensions, and renewals.
Section 6. No Change in Lease.
Landlord and Tenant agree not to change, alter, amend, or otherwise modify the Lease
without the prior written consent of Lender. Any change, alteration, amendment, or other
modification to the Lease without the prior written consent of Lender shall be void as to Lender.
Section 7. Modification.
This Agreement may not be modified other than by an agreement in writing signed by the
parties or by their respective successors in interest.
Section 8. Attorney Fees.
If any party commences any action against any other party based on this Agreement, the
prevailing party shall be entitled to recover reasonable attorney fees, expenses, and costs of suit.
Section 9. Notices.
In this Agreement, wherever it is required or permitted that notice and demand be given by
any party to another party, that notice or demand shall be given in writing and forwarded by certified
mail, addressed as follows:
For Landlord:
Arrowhead Professional Center, L.P.,
600 N. Arrowhead Avenue
San Bernardino, CA 92402
For Tenant:
City of San Bernardino c/o
San Bernardino Employment and Training Agency (SBET A)
600 N. Arrowhead Avenue, Suite 300
San Bernardino, CA 92402
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For Lender:
Excel National Bank
16255 Ventura Boulevard, Suite 300
Encino, CA 91436
Any party may change an address given for notice by giving written notice of that change by
certified mail to all other parties.
Section 10 Successors.
This Agreement shall be binding on and inure to the benefit of the parties and their respective
heirs, successors, and assigns.
Section 11. Authority.
If any party is a corporation or a partnership, all individuals executing this Agreement on
behalf of a corporation or partnership represent and warrant that they are authorized to execute and
deliver this Agreement on behalf of the corporation or partnership and that this Agreement is binding
upon the corporation or partnership.
Section 12. Headings.
The headings this Agreement are for reference only and shall not limit or define any meaning
of this Agreement.
Section 13. Counterparts.
This Agreement may be executed in one or more counterparts, each of which is an original,
but all of which shall constitute one and the same instrument.
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Section 14. Governing Law.
This Agreement shall be construed in accordance with and governed by California law.
The parties have duly executed this Agreement as of the date first above written.
City of San Bernardino, Tenant
Excel National Bank, Lender
By
J ith Valles, Mayor
ity of San Bernardino
B~.-b~~
ahWamer
Arrowhead Professional Center, L.P., Landlord
APPROVED AS TO FORM
AND LEGAL CONTENT:
By
James F. Penman, City Attorney
By f)~6/~
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OFFICE LEASE
PREAMBLE
This lease is dated for reference August 3, 2005, by and between Arrowhead Professional
Center, L.P., referred to in this lease as "Landlord," and City of San Bernardino Employment and
Training Agency ("SBETA"), referred to in this lease as "Tenant."
RECITALS
Whereas, the City of San Bernardino Employment Agency (SBET A"), is an agency
authorized by, and operating pursuant to the Workforce Investment Act of 1998 ("Act"), Public
Law 105-220; and
Whereas, the purpose of the Act is to consolidate, coordinate, and improve employment,
training. literary, and vocational training in the United States, and for other purposes; and
Whereas, SBET A receives funds to carry out its duties from various sources, including
the Federal Government, the State of California, and the City of San Bernardino; and
Whereas, funding of SBET A is discretionary and may be affected at any time by actions
with the various funding agencies; and
Whereas, SBET A, is desirous of acquiring a suitable location to carry out its duties and
obligations composed by the Act, and has determined that the property located at 600 N.
Arrowhead Avenue, San Bernardino, California is suitable for its operations.
PREAMBLE
Subject to the terms and conditions set forth in this lease, Landlord hereby leases to
Tenant that certain space outlined in red on the plat map attached and marked Exhibit "A" on the
3rd floor of the building located at 600 North Arrowhead Avenue, San Bernardino, California
The leased space outlined in red on the attached marked Exhibit "A" referred to in this lease as
the "Leased Space" or the ..Premises," is presently designated Suite 300, but Landlord reserves
the right to renumber and redesignate at any time during this lease the number of any space in the
Building, including the Leases Space.
TERM
1. The term of this lease shall be a period of7 years commencing at 12:01 a.m. on
the earlier of (a) the 60th calendar day after the date the lease is approved by the San Bernardino
City Council or (b) the date Tenant takes possession, which date shall be at the sole discretion of
the Landlord(the "Commencement Date") and ending at 11 :59 p.m. on the date seven years
following the Commencement Date, unless terminated earlier as provided in this lease. If Tenant
holds over and continues in possession of the Premises after termination of the term of this lease,
Tenant's continued occupancy of the Premises shall be deemed merely a tenancy from month-to-
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month at a minimum rental of 23,877 per month subject to all the tenns and conditions, including
the provisions for the rent increase provided in Paragraph 2, contained in this lease.
2.. (a) Landlord hereby grants to Tenant two options to extend the Lease Tenn
("Extension Option'') for a period of five years (each an "Option Tenn"), subject to the
conditions described in this Section 2. Tenant shall have no other right to extend the tenn of this
Lease. The Extension Option is subject to the following conditions:
(1) The Extension Option may be exercised only by written notice delivered by
Tenant to Landlord not less than 120 days prior to the expiration of the lease tenn or the first
Option tenn, as applicable, and only if, as of the date of delivery of the notice, Tenant is not in
default under this Lease.
(2) The rights contained in this Section 2. shall be personal to the originally
named Tenant and may be exercised only by the originally named Tenant (and not any assignee,
sublessee, or other transferee of Tenant's interest in this Lease) and only if the originally named
Tenant occupies the entire Leased Space as of the date it exercises the Extension Option in
accordance with the tenns of this Section 2.
(3) If Tenant properly exercises the Extension Option and is not in default under
this Lease at the end of the initial Lease Tenn or the first Option Tenn, as applicable, the Lease
Tenn, as it applies to the entire Leased Space then leased by Tenant, shall be extended for the
Option Tenn.
(b) The rent and other lease tenns applicable during the Option Tenn will be determined
by negotiation between Landlord and Tenant, and for that purpose Landlord and Tenant or their
authorized representatives will meet and attempt in good faith to negotiate the lease terms that
will govern the tenancy during the applicable Option Tenn. If Landlord and Tenant cannot agree
to a rent amount within 30 days after Tenant's notice to extend the tenn has been given, the
Extension Option and any rights under this Section 2 shall tenninate.
Notwithstanding, Tenant shall be entitled to terminate this lease at any time during the term of
this Lease, if Tenant's funding sources are tenninated.
RENT
3. Tenant agrees to pay to Landlord as basic rent, to be adjusted as provided
in Exhibit "B," for the use and occupancy of the Leased Space, the sums of$23,877.oo per
month payable on the 1st day of each and every month The rent from the Commencement Date
to the beginning of the next month of the lease shall be due on the Commencement Date. All
rent shall be paid by Tenant to Landlord at the address set forth on the signature page, or any
other place or places that Landlord may from time to time designate by written notice given to
Tenant.
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USE OF PREMISES
4. The Leased Space shall be used for general office purposes by Tenant and
for no other use or uses without the prior express written consent of Landlord. Tenant shall
have access to the Leased Space 24 hours each day.
PROHIBITED USES
5. Tenant shall not commit or permit the commission of any acts on the
Leased Space nor use or permit the use of the Leased Space in any way that violates or conflicts
with any law, statute, ordinance, whether now in force or hereinafter enacted governing the
Leases Space or the Building.
ALTERATIONS BY TENANT
6. (a) Tenant may not make any improvements, alterations, additions, or changes
to the Leased Space ("Alterations") without first obtaining Landlord's prior written consent.
Tenant shall request consent by written notice to Landlord, which must be accompanied by the
plans and specifications for the proposed work and a good faith estimated cost of the Alteration
(a ''Cost Estimate"). Within 30 days after receipt by Landlord of Tenant's request for consent,
Landlord shall either give consent to Tenant to complete the Alteration (a "Tenant Alteration"),
withhold its consent, or give notice that the Landlord has chosen to complete the Alteration itself
(a "Landlord Alteration"). If Landlord fails to give or withhold its consent in writing within the
30-day period, Landlord shall be deemed to have given its consent to the proposed Alteration by
the Tenant. If Landlord gives written consent or decides to complete the Altemtion itself,
Landlord and Tenant shall agree in writing to the date when that undertaking will be completed.
(b) Any Altemtion made and any fixtures installed as a part of the construction, shall,
at the option of the Landlord, become the property of the Landlord on the expiration or earlier
termination of the Lease. However, the Tenant may remove any fixtures installed at its cost in a
Tenant Alteration on termination of the Lease. Tenant shall repair and restore any damages to
the Leased Space or the property caused by such removal.
(c) Tenant shall cause each contractor and subcontractor to maintain all workers'
compensation insumnce required by law and liability insumnce (including property damage) in
amounts reasonably required by Landlord. Tenant shall provide evidence of that insumnce to
Landlord before construction begins.
(d) On completion of any Tenant Altemtion, Tenant shall:
(1) Cause a timely notice of completion to be recorded in the office of the
recorder of the county in which the Building is located, in accordance with Civil Code section
3093 or any other applicable statute;
(2) Deliver to Landlord evidence of full payment and unconditional final
waivers of all liens for labor, services, or materials; and
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(3) Reimburse Landlord for any actual expenses paid to third parties or for
additional expenses reasonably incurred by Landlord in connection with the construction of any
Alteration.
(e) If the Alteration is conducted as a Landlord Alteration, the Tenant shall reimburse
the Landlord for completing the Alteration up to the total Cost Estimate, but not more than the
actual cost incurred by Landlord. The reimbursement due under this Section 6( e) will be due in
full within 30 days of delivery by Landlord to Tenant of a statement of the amount due.
ALTERATIONS BY LANDLORD
7. (a) Before the Commencement Date, Landlord shall, at Landlord's sole cost
and expense, make the improvements to the Leased Space as stated in the detailed drawings and
specifications (the "Specifications") and generally described in Exhibit C. If Exhibit C and the
Specifications conflict, Exhibit C shall control. If Landlord fails to complete the improvements
under this Section 7 on or before the Commencement Date, Tenant's obligation to pay rent shall
not commence until the construction is substantially completed, but Tenant sballhave no right to
cancel or otherwise terminate this Lease as the result of a delay. Notwithstanding the preceding
sentence, if Landlord fails to complete construction and deliver possession of the Leased Space
on or before the expiration of the 120111 day following the approval of the Lease by the San
Bernardino City Council, Tenant shall have the right to terminate the lease in the following
manner: (1) the Tenant and Landlord agree to meet within 10 days after the expiration of the
120-day period to discuss the status of construction and agree to determine in good faith the
causes for the delay (2) by giving written notice of its election to terminate to Landlord after the
meeting in Section 7(a)(l) takes place. Tenant shall not be liable forconstruction costs incurred
by Landlord if it terminates the Lease according to this Section 7(a). If the construction will take
. longer than 60 days to complete, the Landlord shall give written notice to the Tenant within five
days after the expiration of the 60-day period described in Section I(a).
(b) Notwithstanding Section 7(a) above, if there are delay(s) in the completion of the
improvements as a direct, indirect, partial, or total result of:
(I) Tenant's failure to timely approve any matter requiring Tenant's
approval within a reasonable amount of time;
(2) A material breach by Tenant of the terms of the Lease;
(3) Changes in any of the Specifications after disapproval because
they do not comply with Code or other applicable laws;
(4) Tenant's request for changes in the Specifications that, when taken
alone or together with all Tenant's requests, would substantially extend the time period;
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(5) Tenant's requirement for materials, components, finishes or
improvements that are not immediately available;
(6) Changes required by the Specifications to the base building of the
Leased Space, which shall consist of the ceiling, building support, drywall,and/or the floors of
the Building on which the Leased Space is located (the "Base Building''), and/or the Premises
Systems, as defined in Section 9, below; or
(7) Any other acts or omissions of Tenant, or its agents, or employees,
when taken alone or together with other acts of omissions of Tenant, that would substantially
extend the time period;
then, notwithstanding anything to the contrary set forth in the Lease and regardless of
the actual date of the completion of the Leased Space, the Commencement Date shall remain the
date set forth in Section 1 as if no delay had occurred.
WORKSTATIONS
8. As of the Commencement Date, Landlord hereby transfers to Tenant any metal
workstations that are on the Leased Space at that time, in as-is condition with all faults. Tenant
acknowledges that Landlord has made no representation or warranty as to the condition or
number of workstations.
MAINTENANCE AND REPAIRS
9. (a) Tenant shall, at Tenant's sole expense and in accordance with the terms of
this.Lease, repair and maintain in good order and condition (reasonable wear and tear excepted):
(I) The nonstructural portions of the Leased Space (including all Alterations);
(2) The portion of any Base Building Systems in the Leased Space, as defined
below; and
(3) All Premises Systems, as defined below.
"Premises Systems" means all systems and equipment that serve only the Leased Space,
regardless of whether such systems or equipment are located within or outside the Leased Space.
"Base Building Systems" means all systems and equipment (including plumbing, HV AC,
electrical, fireIlife-safety, elevator, and security systems) that serve the entire Building or
portions of the Building other than simply the Premises, excluding all Premises Systems.
(b) Notwithstanding Section 9(a), Tenant shall not be responsible for the repair of any
latent defects in the improvements to be made by Landlord pursuant to Section 7, above, that
existed as of the Lease Commencement Date and were of such a nature that Tenant could not
normally discover them in the exercise of reasonable diligence in Tenant's inspection of the
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Leased Space on or before the Lease Commencement Date. Any repair and maintenance work
affecting the Building Systems shall be performed only by the contractor used by Landlord in the
Building for such work, unless that contractor is unwilling or unable to perform the work, in
which event Tenant may use the services of another qualified contractor reasonably approved by
Landlord and that normally and regularly performs siInilar work in comparable buildings.
Landlord may, but need not, make such repairs and maintenance if:
(1) Tenant fails to perform any repair and maintenance obligation within 30
days after written notice by Landlord to Tenant of the need for such repairs and maintenance; or
(2) Tenant fails to commence any repair and maintenance obligation for
which the reasonable completion period exceeds 30 days, and to diligently prosecute this
obligation to completion.
(c) Within 30 days after a written demand from Landlord (including a reasonably
particularized statement), Tenant shall pay Landlord Landlord's reasonable out-of-pocket costs
incurred in connection with the repairs and maintenance plus interest at the rate of 10% per year
from the date these costs are incurred until the date of Tenant's repayment. Despite any other
provision of this Section 9, in the event of an emergency, Landlord may perform any Tenant
repair and maintenance obligation that Tenant fails to perform promptly. Within 30 days after
written demand (including a reasonablyparticuIarized statement), Tenant shall pay Landlord
Landlord's reasonable costs incurred in connection with the repair and maintenance obligation.
(e) Subject to Sections 16 and 17, Landlord shall repair and maintain in good order
and condition (reasonable wear and tear excepted):
(I) The structural portions of the Leased Space;
(2) The Base Building;
(3) The Base Building Systems located outside the Leased Space;
(4) The exterior portions of the Building and real property; and
(5) All other common areas located in the ~uilding, or in or on the real
property, including the parking facilities serving the Building.
Repairs shall be made promptly when appropriate to keep the applicable portion of the
premises, building, real property, and other items in the condition described in this clause.
Landlord shall not be in default of its repair and maintenance obligations under this Section 9 if
Landlord performs the repairs and maintenance within a reasonable amount of time not more
than 30 days after written notice by Tenant to Landlord of the need for such repairs and
maintenance (the "Repair Notice Period"). If, due to the nature of the particular repair or
maintenance obligation, more than 30 days are reasonably required to complete it, Landlord shall
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not be in default under this Section 9(b) if Landlord begins work within the Repair Notice Period
and diligently prosecutes this work to completion. Except as set forth in Section 9(f), no
abatement of rent and no liability of Landlord shall result for any injury to or interference with
Tenant's business arising from the making of or failure to make any repairs, replacements,
alterations, or improvements in or to any portion of the premises, building, real property,
fixtures, appurtenances, or equipment.
(f) If Tenant provides notice to Landlord of an event or circumstance that requires
the action of Landlord with respect to the repairs or maintenance as set forth in Section 9(e)
above, and Landlord fails to provide such action as required by the terms of this Lease within the
period specified in Section 9(e), Tenant may take the required action if:
(I ) Tenant delivers to Landlord an additional written notice advising Landlord
that Tenant intends to take the required action if Landlord does not begin the required repair or
maintenance within ten (10) days after the written notice; and
(2) Landlordfails to begin the required work within this ten-day (lO-day) period.
Landlord grants to Tenant a license, effective during the Lease Term, to enter upon those
portions of the Building access to which is reasonably necessary for Tenant to take such action.
If such action was required under the terms of this Leaseto be taken by Landlord,. Tenant shall
be entitled to prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in
taking such-action from the.date these costs are incurred until the date of Landlord's repayment.
Landlord's obligation to reimburse Tenant shall survive expiration or earlier termination of this
Lease. If any action taken by Tenant will affect any portion of the Base Building Systems,
structural integrity of the Building, or exterior appearance of the Building, Tenant shall use only
the.contractor used by Landlord in the Building for such work, unless that contractoris unwilling
or unable to perform the work, in which event Tenant may use the services of another qualified
contractor reasonably approved by Landlord. Tenant shall take no action pertaining to or
affecting any portion of the Base Building Systems that will adversely affect the enjoyment,
possession, or other rights of any other tenant in the Building.
If, within thirty (30) days after receipt of Tenant's written demand for payment of Tenant's costs
incurred in taking such action on Landlord's behalf (including a reasonably particularized
statement), Landlord has not paid the invoice or delivered to Tenant a detailed written objection
to it, Tenant may deduct from rent payable by Tenant under this Lease the amount set forth in the
invoice. Tenant shall not be entitled to this deduction from Re!1t, however, if, within thirty (30)
days after receipt of Tenant's invoice, Landlord in good faith delivers to Tenant a written
objection to its payment, setting forth with reasonable particularity Landlord's reasons for its
claim that Landlord did not have to take this action under the terms of this Lease or that the
charges are excessive (in which case Landlord shall pay the amount it contends would not have
been excessive).
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(g) Except in the case of an emergency, Landlord shall not enter the Leased Space for
the purpose of effecting the repairs, alterations, or improvements other than during normal
business hours, and shall give Tenant 24.hours notice of the intention to enter for those purposes.
(h) Cleaning maintenance for the Leased Space shall be regularly performed by
Landlord five days of the week, excepting holidays.
SECURITY
10. Tenant shall hire at its own cost and expense, security guard(s) to provide security
for the Premises and the Building. Tenant shall have full control and responsibility over the
security guards subject to the Landlord's participati()n in their direction, and Tenant will be liable
for all damage to the Building or harm w others caused by the security guards, except to the
extent that any such damage or harm is caused by the security guard(s) when acting solely under
the Landlord's direction. Tenant agrees to indemnify Landlord for any and all claims, losses,
costs, damage, expenses, liabilities, liens, actions, causes of action (whether in tort or contract,
law or equity, or otherwise), charges, assessments, fines, and penalties of any kind (including
consultant and expert expenses, court costs, and attorney fees actually incurred) (each an
"Indemnifiable Loss") arising out of the Tenant's use of security guards, except to the extent that
any such Indemnifiable Loss is caused by the security guard(s) when acting solely under the
Landlord's direction.
INSPECTION BY LANDLORD
11. Tenant shall permit Landl()rd or Landlord's agents, representatives, or employees
to enter the Leased Space at all reasonable times for the purpose of inspecting the Leased Space
W determine whether Tenant is complying with the terms of this lease and for the purpose of
doing other lawful acts that may be necessary to protect Landlord's interest in the Leased Space
under this lease.
COMMONMmMOFB~DING
12. (a) Landlord shall make available at all times during the term of this lease in
any portion of the Building that Landlord from time to time designates or relocates, automobile
parking and common areas (jointly referred to as "common areas, as that term is defined below)
as Landlord shall from time to time deem appropriate, Tenant ,shall have the nonexclusive right
during the term of this lease to use the common areas for itself, its employees, agents, customers,
clients, invitees, and licensees.
(b) The term "common areas" means the portions of the Building that, at the time in
question, have been designated and improved for common use by or for the benefit of more than
one tenant of the Building, including the parking areas; access and perimeter roads; landscaped
areas: exterior walks, roofs, stairways, elevators, escalators and/or ramps; interior corridors,
elevators, stairs, and balconies, directory equipment, the main entry lobby; restrooms; and
drinking fountains. Landlord reserves the right to redesignate a common area for a noncommon
8
use or to designate as a common area a portion of the Building not previously designated a
common area, so long as such designation does not interfere with Tenant's rights granted in this
lease.
( c) All common areas shall be subject to the exclusive control and management of
Landlord or any other persons or nominees that Landlord may have delegated or assigned to
exercise management or control, in whole or in part, in Landlord's place and stead. Landlord
shall have the right to close, if necessary, and subject to Tenant's rights granted herein, all or any
portion or construction, or to maintain the safety of tenants or the general public. Landlord will
maintain the common areas in a clean, orderly, and sanitary manner. Landlord is responsible for
all repairs of the common areas, except those required by the negligence of Tenant.
(d) Rules and Regulations. Landlord and Landlord's nominees and assignees shall
have the right to establish, modify, amend, and enforce reasonable rules and regulations with
respect to the common areas and the Building. Tenant shall fully and faithfully comply with the
observe the rules and regulations for the common areas and the Building ("the Building Rules
and Regulations"), of which the Leased Space is a part, including any additions or amendments
to the Building Rules and Regulations that may be hereafter enacted by Landlord in Landlord's
sole discretion. Tenant acknowledges receipt of a copy of the Building Rules and Regulations,
which are attached to and made a part of this lease as Exhibit "D." Landlord shall not be liable
in any way for failure of any other occupant of the Building of which the Leased Space is a part
to comply with and observe these rules and regulations.
PARKING RIGHTS AND OBLIGATIONS
13. (a) Landlord agrees to maintain in good order, condition, and repair the
co..wred and uncovered parking spaces for the Building. Landlord's obligations for maintenance
shall include thefollowing:
(1) Maintenance of the ground surfaces in a level, smooth, and evenly covered
condition with the type of surfacing material originally installed or any substitute that in all
respects is equal in quality, use, and durability.
(2) Removal of all papers, debris, filth, and refuse, and washing or sweeping
the areas to the extent reasonably necessary to keep the parking garage in a neat, clean, and
orderly condition.
(3) Placement, repair and replacement of any necessary and appropriate
directional sign, markers, and lines and any artificial lighting facilities that are reasonably
required.
(4) Maintenance of general public liability and property damage insurance
covering the common areas against claims for personal injuries, death, or property damage, in
the amounts determined by Landlord in its sole discretion.
9
(5) Provision of adequate lighting.
(b) Included in the rent payable by Tenant under this lease for the
Leased Space, Tenant shall have the exclusive right to eight (8) covered parking spaces in the
parking garage, for use by it and its employees, and forty-six (46) additional parking spaces, in
addition to any other empty spaces in parking area.
(c) Tenant shall have access to the covered and uncovered parking
areas 24 hours each day.
UTILITIES FURNISHED BY LANDLORD
14. Landlord shall, at Landlord's own cost and expense, provide the following
utilities to the Leased Space and the Building:
(a) Water and electricity for the Leased Space and the Building, available as
follows: 24 hours each day
(b) Heating and air conditioning for the Leased Space and Building available
as follows: 9 hours per day,S days a week excepting holidays. For any overage use on the
Leased Space, Tenant shall pay Landlord $35 per hour.
INSURANCE FOR TENANT'S PERSONAL PROPERTY
15. Tenant agrees at all times during the term of this lease to keep, at Tenant's
sole expense, all of Tenant's personal property, including trade fixtures and equipment of Tenant
that may be on or in the Leased Space form time to time, insured against loss or damage by fire
and by any peril included within fire and extended coverage insurance for an amount that will
insure the ability of Tenant to fully replace the personal property, trade fixtures, and equipment.
Tenant represents and warrants that it is covered under the City of San Bernardino self-insurance
program. If for any reason Tenant is no longer covered by the self-insurance program, Tenant
shall obtain commercial general liability insurance written on an "occurrence" policy form,
covering bodily injury, property damage, personal injury, and advertising injury arising out of or
relating (directly or indirectly) to Tenant's business operations, conduct, assumed liabilities, or
use or occupancy of the Leased Space or the Building.
DESTRUCTION OF LEASED SPACE OR BUILDING
16. (a) Definitions.
(1) "Premises Damage" shall mean if the Premises are damaged
or destroyed to any extent.
(2) "Premises Building Partial Damage" shall mean if the Building
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of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is
less than fifty percent (50%) of the then replacement cost of the building.
(3) "Premises Building Total Destruction" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that the cost to repair is
fifty percent (50%) or more than the then replacement cost of the building.
;(4) "Office Building Project Buildings" shall mean all of the buildings
on the Office Building Project Site.
(5) "Office Building Project Buildings Total Destruction" shall mean
if the Building of which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent (50010) or more than the then replacement cost of the Office Building
Project buildings.
(6) "Insured Loss" shall mean damage or destruction caused by
an event required to be covered by the Landlord's insurance on the property. The fact that an
Insured loss has a deductible amount shall not make the loss an uninsured loss.
(7) "Replacement Cost" shall mean the amount of money necesSary
to be spent in order to repair or rebuild the damaged area to the condition that existed
immediately prior to the damage occurring, excluding all ,improvements made by lessees other
than those installed by Landlord at Tenant's expense.
(b) Subject to the provisions of Sections 16( e), (t), and (j), if at any time during the
term of this Lease there is damage which is an Insured Loss. and which falls into the
classification of either Premises Damage or Premises Building Partial Damage, then Landlord
shall as soon as reasonably possible and to the extent the required materials and labor are readily
available through usual commercial channels, at Landlord's expense, repair such damage (but
not Tenant's fixtures, equipment or tenant improvements originally paid for by Tenant) to the
condition existing at the time of the damage, and the Lease shall continue in full force and effect.
(c) Subject to the provisions of Sections 16(e), (t), (g), (h), and (i), ifat any time
during the term of this Lease there is damage which is not an Insured Loss and which falls within
the classification of Premises Damage or Premises Building Partial Damage, unless caused by a
negligent or willful act of Ten ant (in which event Tenant shall make the repairs at Tenant's
expense), which damage prevents Tenant form making any su1:Jstantial use of the Premises,
Landlord may at Tenant's option either (i) repair such damage as soon as reasonably possibly at
Landlord's expense, in which event this Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date of the occurrence of such damage
of Landlord's intention to cancel and terminate this Lease as of the date of the occurrence of
such damage, in which event this Lease shall terminate as of the date of the occurrence of such
damage.
(d) Subject to the provisions of 16( e), (t), (g), (h), and (i), if at any time during the
term of this Lease there is damage, whether or not it is an Insured Loss, which falls into the
11
classifications of either (i) Premises Building Total Destruction, or (ii) Office Building Project
Total Destruction, then Landlord may at Landlord's option either (i) repair such damage or
destruction as soon as reasonably possible at Landlord's expense (to the extent the required
materials are readily available through usual commercial channel) to its condition existing at the
time of the damage, but not Tenant's fixtures, equipment or tenant improvements, and this Lease
shall continue in full force and effect, or (ii) give written notice to Tenant within thirty (30) days
after the date of occurrence of such damage of Landlord's intention to cancel and terminate this
Lease, in which case the Lease shall terminate as of the date of the occurrence of such damage.
(e) Subject to section 16(t) below, if at any time during the last twelve (12) months of
the term of this Lease there is substantial damage to the Premises, Landlord may at Landlord's
option cancel and terminate this Lease as of the date of occurrence of such damage by giving
written notice to Tenant of Landlord's election to do so within 30 days after the date of
occurrence of such damage.
(f) Notwithstanding section 16(e), in the event that Tenant has an option to extend or
renew this Lease, and the time within which said option may be exercised has not yet expired,
Tenant shall exercise such option, if it is to be exercised at all, no later than twenty (20) days
after the occurrence of an Insured Loss falling within the classification of Premises Damage
during the last twelve (12) months of the term of this Lease. If Tenant duly exercises such
option during said twenty (20) day period, Landlord shall, at Landlord's expense, repair such
damage, but not Tenant's fixtures, equipment or tenant improvements, as soon as reasonably
possible and this Lease shall continue in full force and effect. If Tenant fails to exercise such
option during said twenty (20) day period, then Landlord may at Landlord's option terminate and
cancel this Lease as of the expiration of said twenty (20) day period by giving written notice to
Tenant of Landlord's election to do so within ten (10) days after the expiration of said twenty
(2OJ day period, notwithstanding any term or provision in the grant of option to the contrary.
(g) In the event Landlord repairs or restores Building or Premises pursuant to the
provisions of this Section 16, and any part of the Premises are not usable (including loss of use
due to loss of access or essential services), the rent payable hereunder for the period during
which such damage, repair or restoration continues shall be abated, provided (1) the damage was
not the result of the negligence of Tenant, and (2) such abatement shall only be to the extent that
the operation and profitability of Tenant's business as operated from the Premises is adversely
affected. Except for said abatement of rent, if any , Tenant shall have no claim against Landlord
for any damage suffered by reason of any such damage, construction, repair or restoration.
12
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,,,"
(h) If Landlord shall be obligated to repair or restore the Premises or
the Building under the provisions of this Section 16 and shall not commence such repair
or restoration within ninety days after such occurrence, or if Landlord shall not complete
the restoration and repair within six (6) months after such occurrence, Tenant may at
Tenant's options cancel and tenninate this Lease by giving Landlord written notice of
Tenant's election to do so at any time prior to the commencement or completion,
respectively, of such repair or restoration. In such event, this Lease shall terminate as of
the date of such notice.
(i) Tenant agrees to cooperate with Landlord in connection with any such
restoration and repair, including but not limited to the approval and/or execution of plans
and specifications required.
(j) Upon termination of this Lease pursuant to this Section 16, an equitable
adjustment shall be made concerning advance rent and any advance payments made by
Tenant to Landlord. Landlord shall, in addition, return to Tenant as much of Tenant's
security deposit as has not theretofore been applied by Landlord.
(k) Landlord and Tenant agree that termination of the Lease when Leased
property is destroyed shall be governed by the terms of this Lease.
CONDEMNATION
17. (a) If all or any part of the Leased Space and/or common areas is taken
by any public or quasi-public agency or entity under the power of eminent domain during
the term of this lease.
(1) Either Landlord or Tenant may terminate this lease by
giving the other 30 days' written notice of termination.
(2) If only a portion of the Leased Space is taken by eminent
domain and neither Landlord nor Tenant terminates this lease, the rent thereafter payable
under this lease shall be reduced by the same percentage that the floor area of the portion
taken by eminent domain bears to the floor area of the entire Leased Space.
(b) If any portion of the Building other than the Leased Space is taken
by eminent domain, Landlord may, at its option, terminate, this lease by written notice to
Tenant.
(c) Any and all damages and compensation awarded or paid because
of a taking of the Leased Space or the Building shall belong to Landlord, and Tenant
shall have no claim against Landlord or the entity exercising eminent domain power for
the value of the unexpired term of this lease. Tenant does not waive its right to potential
claims such as loss of goodwill and relocation benefits.
ASSIGNMENT AND SUBLETTING
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18. Tenant shall not encumber, assign, sublet or otherwise transfer this lease,
any right or interest in this lease, or any right or interest in the Leased Space without first
obtaining the express written consent of Landlord. Furthermore, Tenant shall not sublet
the Leased Space or any part of it or allow any other persons, other than Tenant's
employees and agents, to occupy or use the Leased Space or any part of it without the
prior written consent of Landlord. A consent by Landlord to one assignment, subletting,
or occupation and use by another person shall not be deemed to be a consent to any
subsequent assignment, subletting, or occupation and use by another person. The consent
of Landlord to any assignment of Tenant's interest in this lease or the subletting by
Tenant of the Leased Space not be unreasonably withheld.
As a reasonable condition to Landlord's consent to any transfer pursuant to this
Section (a "Transfer"), Tenant shall pay to Landlord a Transfer Premium, as defined
below. "Transfer Premium" means all rent and other consideration actually received by
Tenant from the transferee (including key money and bonus money and any payment in
excess offair market value for services rendered by Tenant to the transferee or assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to the transferee in
connection with the Transfer ("Transferee Rent")), after deducting:
(a) The Rent payable by Tenant under this Lease (excluding the Transfer
Premium)for the Leased Space ("Tenant Rent");
(b) Reasonable leasing commissions paid by Tenant;
(c) Other reasonable out-of-pocket costs paid by Tenant (including
-attorney fees, advertising costs, and expenses of readying the Leased Space for
occupancy by Transferee);
(d) Any consideration paid to the transferee or any third party to induce
the Transferee to consummate the Transfer.
The costs referred to in subparagraphs (a)-(d) are referred to as the "Transfer
(b) A failure to perform any provision, covenant, or condition
of this lease other than one for the payment of rent, when that failure is not cured within
30 days after written notice of the specific failure is given by Landlord to Tenant;
(c) The breach of this leased and abandonment of the Leased
Space before expiration of the term of this lease;
The notices provided for in subsections (a) and (b) of this
Paragraph 16 are not intended to replace, but rather are in addition to, any required
statutory notices for unlawful detainer proceedings under Code of Civil Procedure
Section 1161 et seq.
LATE PAYMENT OF RENT
20. If Tenant believes in any month that its payment of rent will be late,
Tenant forthwith shall notify Landlord in writing, but in no event later than the fifth day
of the month for which the rent is due; this notice shall state the estimated date of
payment. If Tenant does not give notice pursuant to this Section 20, Tenant shall pay to
Landlord a late fee of 6% of any rent payment or portion thereof that is not received by
Landlord or Landlord's designee within 10 days after that rent is due. If Tenant gives
notice pursuant to this Section 20, Tenant shall pay to Landlord a late fee of 6% of any
rent payment or portion thereof that is not received by Landlord or Landlord's designee
within 15 days after that rent is due. The parties agree that the late charges specified in
this paragraph represent a reasonable estimate of the expenses Landlord will incur
because of any late payment of rent (other than attorneys fees and costs). Landlord's
.acceptance of any liquidated damages shall not constitute a waiver of Tenant's default
with respect to the overdue amount or prevent Landlord from exercising. any of the rights
or remedies available to Landlord under this Lease. Tenant shall pay the late charge as
additional rent with the next installment of rent.
LANDLORD'S REMEDIES
21. If Tenant breaches or is in default under this lease, Landlord, in addition to
any other remedies given Landlord by law or equity, may:
(a) Continue this lease in effect by not terminating Tenant's right to
possession of the Leased Space and thereby be entitled to enforce all Landlord's rights
and remedies under this lease including the right to recover the rent specified in this lease
as it becomes due under this lease; or
(b) Terminate this lease and all rights of Tenant under the lease and
recover from Tenant:
(1) The worth at the time of award of the unpaid rent that had
been earned at the time of termination of the lease;
15
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(2) The worth at the time of award of the amount by which the
unpaid rent that would have been earned after termination of the lease until the time of
award exceeds the amount of rental loss that Tenant proves could have been reasonably
avoided;
(3) The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the amount of
rental loss that Tenant proves could be reasonably avoided; and
(4) 75% of the portion of Landlord's costs for the
iIrtprovementsdescribed in Section 7, above,that have not been amortized on the date of
termination. For purposes of this Section 21(b)(4), the Landlord's costs for the
improvements means all costs directly incurred in the completion of the Leasehold
Improvements, including all payments to contractors; or
(c) In lieu of, or in addition to, bringing an action for any or all of the
recoveries described in subparagraph (b) of this paragraph, bring an action to recover and
regain possession of the Leased Space in the manner provided by the California law of
unlawful detainer then in effect.
TERMINATION NOTICE
22. No act of Landlord, including but not limited to Landlord's entry on the
Leased Space or efforts to relet the Leased Space, or the giving by Landlord to Tenant of
a notice of default, shall be construed as an election to terminate this lease unless a
,written notice of the Landlord's election to terminate this lease is given to Tenant.
WAIVER OF BREACH
23. The waiver by Landlord of any breach by Tenantof any of the provisions
of this lease shall not constitute a continuing waiver or a waiver of any subsequent
default or breach by Tenant either of the same or a different provision of this lease.
NOTICES
24. All notices (including requests, demands, approvals, or other
communications) under this Lease shall be in writing. Notice shall be sufficiently given
for all purposes as follows:
(1) When personally delivered to the recipient, notice is effective on
delivery.
(2) When mailed by certified mail with return receipt requested, notice
is effective on receipt if delivery is confirmed bya return receipt.
16
o~
(3) When delivered by Federal Express, United Parcel Service or
similar service with charges prepaid or charged to the sender's account, notice is effective
on delivery if delivery is confirmed by the delivery service.
ATTORNEYS' FEES
25. If any litigation is commenced between the parties to this lease concerning
the Leased Space, this lease, or the rights and duties of either in relation to the Leased
Space or the lease, the party prevailing in that litigation shall be entitled, in addition, to
any other relief granted, to a reasonable sum as and for its attorneys' fees in the litigation,
which shall be determined by the court in that litigation or in a separate action brought for
that purpose. The cost, salary, and expenses of the city attorney and the members of his
office shall be considered "attorneys' fees" for the purpose of this section.
<.
BINDING ON HEIRS AND SUCCESSORS
26. This lease shall be binding on and shall inure to the benefit of the heirs,
executors, administrators, successors, and assigns of the parties, but nothing in this
paragraph shall be construed as consent by Landlord to any assignment of this lease or
any interest therein by Tenant except as provided in Paragraph 15 of this lease.
TIME OF ESSENCE
27. Time is expressly declared to be of the essence in this lease.
SOLE AND ONLY AGREEMENT
28... This instrument constitutes the sole and only full, final, and complete
agreement between Landlord and Tenant respecting the Leased Space or the leasing of
the leased Space to Tenant, and correctly sets forth the obligations of Landlord and
Tenant to each other as of its date. Any agreements or representations respecting the
Leased Space or their leasing by Landlord to Tenant not expressly set forth in this
instrument are null and void. All prior negotiations between the parties are subsumed
into this lease to the extent they have been agreed to, and if not agreed to by the parties
such negotiations are not set forth in the terms and conditions of this lease. This lease
may not be extended, amended, modified, altered, or changed, except in a writing signed
by Landlord and Tenant.
[Signatures on Following Page]
17
Approved as to form
.and legal content
JAMES F. PENMAN,
City Attorney
~, "" ," """'~~,~--
LANDLORD
ARROWHEAD PROFESSIONAL CENTER, L.P.
k~
By: Steve M att, resident of its General
Partner, Sierra West Properties, Inc.,
a California Corporation
E:::'~ ~~7,~~;:-I
(ADDRESS OF LANDLORD)
TENANT
yor
ity of San Bernardino
Date of City Council Approval: August _,2005
Date Tenant took possession: , 2005
18
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EXlllBIT "A"
See attached plat map.
19
EXHIBIT "B"
Months
Base Rent
Total MonthlY Rent
First Lease Year* $1.28 PSF $23,877.00"
Second Lease Year $1.32 PSF $24,593.00
Third Lease Year $1.36PSF $25,331.00
Fourth Lease Year $1.40 PSF $26,091.00
Fifth Lease Year $1.44 PSF $26,874.00
Sixth Lease Year $1.48 PSF $27,680.00
Seventh Lease Year $1.52 PSF $28,510.00
*The first Lease Year shall commence on the Lease Commencement Date and ends on
the last day of the 11th calendar month thereafter. The Second and each succeeding Lease
Year commences on the first day of the next calendar month.
**Payable upon Lease Commencement Date by Tenant
20
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EXHIBIT "e"
Improvements by Landlord
Complete remodel of the 3rd floor to meet SBETA's specifications to include:
Configuring 3 large class rooms (36 capacity each)
Configuring 1 medium conference room (24 capacity)
Configuration of a computer resource room with separate electrical breaker
Establishment of 2 copy room with shelves
Establishment of a third employee break room with sink
Additional electrical outlets in public break room to accommodate vending
Modification of the receptionist counter to meet ADA standards
Modification of the restrooms to meet ADA standards
Complete rewiring per SBETA's specifications for voice and CAT 5 data, not to
exceed $50,000. All quotes must be approved by Landlord in his reasonable
discretion.
Re-painting of wallpapering as necessary per SBETA's wishes
New Carpeting in designated areas
New linoleum in all break rooms and copy room to SBETA's wishes
Non-static flooring in.theMIS server room
Self-contained wall mounted Air Conditioner for the MIS server room
Additional elevator access keys as necessary for access to the third floor
Additional interior signage as necessary
Where a task is to be completed pursuant to SBETA's wishes, Landlord will
provide Tenant with selections and Tenant will be allowed to choose only from those
selections.
21
See Attached.
EXlDBIT "0"
BUILDING RULES AND REGULATIONS
.
22
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