HomeMy WebLinkAbout23-Police Department
,OTY OF SAN BERNARDINO - REQUEST FOR COUNOL A~gJ G J N A l
From: Garrett w. Zimmon
Subject: Resolution of the Mayor and
Common Council of the Gty of San
Bernardino authorizing the San Bernardino
Police Department to enter into a lease
agreement with "World Plaza L.L.c." to pay
$1,571.50 per month to pay for the San
Bernardino Police Department's Eastern
District Command office space at 1535 E.
HigWand Ave., Suite C, San Bernardino.
Dept:: Police Department
Date: September 21,2005
Synopsis of Previous Council Action
9-6-05
9-21-05
Council referred the matter to the Ways and Means Committee
Ways and Means Committee recommended approval
Recommended Motion:
Adopt resolution.
~~~--
MIGIAEL BILLDT, ASSISTANT a-llEF OF POLICE
Contact person:
Lt. Walt Goggin
Phone: 384-5784
Supporting data attached: Yes
Ward: Seventh
Source:
$1,571.50 per month
001-213-5171
General Fund
FUNDING REQUIREMENTS: Amount:
Council Notes:
Finance
Agenda Item No. ;l3
IO/3/D~
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
SUBJECT
Resolution of the City of San Bernardino authorizing the San Bernardino Police Department to enter into a
lease agreement with "World Plaza L.L.c." to pay $1,571.50 per month for the San Bernardino Police
Department Eastern District Command office space at 1535 E. Highland Ave., suite C, San Bernardino.
BACKGROUND
Effective September 1, 1999 the City of San Bernardino, specifically the San Bernardino Police Department
Eastern District Command, leased 2245 square feet at 1535 E. Highland Ave., suite C, San Bernardino for a
Community Police Facility. The landlord, Jian Torkan from "World Plaza L.L.c." leased the office space for
$1.00 per year for five years, paid in advance.
On April 27, 2005 Mr. Jian Torkan notified the San Bernardino Police Department, Eastern District, that the
lease had expired. Due to new refinancing arrangements, the existing lease terms could not be extended
without approval of the mortgage lender. Mr. Torkan was unable to secure approval for the lease rates of
$1.00 per year for 5 years.
A review of market lease rates revealed current lease rates to be approximately $1.18 to $1.38 a square foot
"triple net". Upon request of the Police Department, Mr. Torkan secured mortgage lender approval for a
discount lease rate of $.70 per square foot "triple net". The current Eastern District office space lease would
amount to $1,571.50 per month or $18, 858.00 beginning in 2005. Mr. Torkan proposed a 3% annual increase
resulting in the following monthly and yearly rates:
Year Monthly rate Annual total
2006 $1,618.65 $19,423.80
2007 $1,667.20 $20, 006.40
2008 $1,717.20 $20, 606.40
2009 $1, 768.70 $21,224.40
The Police Department surveyed available commercial properties to determine if those owners would
entertain the former lease rate of $1.00 per year. Properties along Highland Ave., Baseline, Pacific, Del Rosa,
Golden, Arden, Sterling were reviewed because of their central location within the Eastern District.
Commercial property occupancy rates were found to be high with few and suitable properties. When suitable
properties were located none of the owners would offer the $1.00 per year rate. Only two offered a discount
rate and one of those was Mr. Torkan.
The costs to move a District Command office are high. Moving computer, phone and data connection lines,
office equipment, etc. costs several thousand dollars. According to Mr. Sharer tenant improvements to move
into another property, depending on need is between $50-100 per square foot. Using our current floor space
of 2245 sq. ft for comparison reveals any move would be cost prohibitive. All Police Department District
offices exist with leases of $1.00 per year. Many are reaching renewal dates and the possibility exists that they
too will be required to move or begin paying market rates.
The San Bernardino Police Department operates under a philosophy of community oriented policing and
problems solving. Because of this operational philosophy, it is imperative that the San Bernardino Police
Department maintain an office in each District Command served. Failure to maintain the Eastern District
Command office will result in a decrease in service to the public and inequity for a large population of San
Bernar~o residents. The Police Department's Strategic Plan states that each District Command to have a
"Long-term commitment to the area commands will require adequate, permanent community facilities."
There are no apparent grants or extraordinary funding sources to pay for this cost. As a result general fund
money would have to be budgeted for this expenditure. Finance has identified account #001-213-5172
"rentals" as the appropriate account for the budget. The Police Department 05/06 budget has been amended
by $18, 900 to reflect this change.
PROPERTY COMPARISON
Comparisons of various properties were made to determine the best lease opportunity. The results of those
comparisons are listed below.
FIRST COMPARISON
Agent Lease Rate
J. Torkan $.70 sq. ft.
R. Treen $1.25
$1.04 (w/triple net)
Mr. Garcia $.50 sq. ft.
S. Kardashian No proposal
Date
5-18-2005
5-10-2005
5-11-2005
5-19-2005(1 )
5-20-2005
Address
1535 E. Highland Ave St C
2360 E. Highland Ave. (Target Center)
1464 E. Highland Ave.
Highland & Del Rosa (1605 E. Highland)
1721 E. Highland Ave.
(1) Mr. Garcia representing Sandstone Management offered a proposed $.50 per sq. ft. rate for a corner
space. He failed to return follow up phone calls.
Address
2360 E. Highland Ave. (Target Center)
1464 E. Highland Ave.
1721 E. Highland Ave.
Highland & Del Rosa (1605 E Highland)
2210 E. Highland Ave Ste. 116 & 117
SECOND COMPARISON
Agent Lease Rate
P. Becronis $1.10 ($1.50 triple net)
$.80-1.00 (w/triple net)
No Response
$1.00 ($1.38 w/triple net)
$.70 sq. ft.
S. Kardashian
D. Catlin
S. Hyndman
Date
9-8-2005
9-8-2005
9-7-2005
9-9-2005(2)
9-9-2005(3)
(2) Mr. Catlin is the CBRE Real Estate agent for the property. He said the owner could not entertain a
discount rate as offered by Mr. Garcia or at the rate of $.70 a sq. ft.
(3) This address was 100% occupied at the first comparison. The first space offered, #110 was an
unsuitable corner space needing vast tenant improvements with little parking for $1.00 per year. Space
116 & 117 were suggested, as they required little tenant improvement. The rate of $.70 per sq. ft. with
the first months rent for free was offered.
FINANCIAL IMPACT
The lease agreement will result in a monthly, recurring general fund budget expense beginning at $1,571.50
per month or approximately $18, 900.00 per year. At maturity in 2009 the lease will cost $1, 768.70 per month
or $21, 224.40 per year.
RECOMMENDATION
Adopt resolution.
PROGRAM CHANGE REQUEST
DEPARTMENT: Police Patrol Division
DIVISION: 213
DESCRIPTION:
Eastern District C.O.P. lease (1535 E. Highland Ave).
ACCOUNT
NUMBER
EXPENDITURE JUSTIFICATION
AMOUNT + (-)
001-213-5803
+ 18,858
TOTAL NET CHANGE +18,858
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RESOLUTION NO.-t <<J) lPY
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE SAN BERNARDINO POLICE DEPARTMENT
TO ENTER INTO A LEASE AGREEMENT WITH "WORLD PLAZA L.L.c." TO PAY
$1,571.50 PER MONTH FOR THE SAN BERNARDINO POLICE DEPARTMENT
EASTER.~ DISTRICT COMMAND OFFICE SPACE AT 1535 E. HIGHLAND AVE.,
SUITE C, SAN BERNARDINO.
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1.
The Mayor of the City of San Bernardino or her designee is hereby
authorized and directed to execute on behalf of said city an agreement with "World Plaza
L.L.c." to lease space for the Eastern District command office, a copy of which is attached
hereto and marked Exhibit 'A' and incorporated herein by reference as though set forth in full.
SECTION 2.
This resolution is rescinded if the parties to the agreement fail to execute
it within sixty (60) days of the passage of this resolution.
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RESOLUTION Ol< THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
BERNARDINO AUTHORIZING THE SAN BERNARDINO POLICE DEPARTMENT
TO ENTER INTO A LEASE AGREEMENT WITH "WORLD PLAZA L.L.c." TO PAY
$1,571.50 PER MONTH FOR THE SAN BERNARDINO POLICE DEPARTMENT
EASTERJ.~ DISTRICT COMMAND OFFICE SPACE AT 1535 E. HIGHLAND AVE.,
SUITE C, SAN BERNARDINO.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof, held on the
8 _dayof
, 2005, by the following vote, to wit:
9 Council Members:
AYES
NAYS
ABSTAIN ABSENT
ESTRADA
LONGVILLE
MCGINNIS
DERRY
KELLEY
JOHNSON
MCCAMMACK
Rachel G. Clark, City Clerk
The foregoing resolution is hereby approved this
day of
,2005.
Judith Valles, Mayor
City of San Bernardino
Approved as to
Forn1 and legal content:
JAMES F. PENMAN,
City Attorney
AIR COMMERCIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL
MULTI-TENANT LEASE - GROSS
1. Basic Provisions ("Basic Provisions").
,., Paril..: Thil Lease ("L...."), dated lor reference purposes only
is made by and between lJnr'li Pl ~7::1 T T r
Tl1np ?1
?nn~
("Lessor")
=
and ri ty f"lf ~::.n RjO,.-rH;~r"iT""
("Lessee"), (collectively the "Pertles", or individually a
"Party").
1.2(a) Premises: That certain portion 01 Ihe Projecl (as delined below), including all improvements Iherein or 10 be provided
by Lessor under the terms 01 this Lease, commonly known by the street address 01 15:1 5 Hi eh 1 Rnn AvpnllP ,
localed in the City 01 C:~n 1\p,..,.,~r('Hn" ,County 01 Satl "'1l7"ro;ljR~ ,Slale
01 r~ 1 i f"mi ~ ,wilh zip code ,as outlined on Exhibil_allachad hereto ("Premises") and
generally descnbed as (describe brielly the nalure 01 the Premises): "vproxim"tP1 y ? ?45 ~q,,~rp fppt ,."mpri <i nr
~C Rt 15,5 Hi~lRnn AvpnllP
In addition to Lessee's rights to use and occupy Ihe Premises as hereinafter specilied, Lessee shall have non-exclusive rights to any
ulillty raceways ollhe building containing lhe Premises ("Butldlng") and to the Common Areas (as delined in Paragraph 2.7 below),
bul shall nol have any rights to the rool, or exlerior walls 01 the Building or to any other buildings In the Project. The Premises. the
Building. the Common Areas. the land upon which lhey are located, along wilh all olher buildings and improvemenls thereon, are herem
colleclively referred to as lhe "Project" (See also Paragraph 2)
1.2(b) Perking: Ii! I A ~: unreserved vehicle paoong spaces. (See elso Paragraph 2.6)
1.3 Term: ;H!! (~'~ _~) years and -D-- months ("Orl~lnel Term") commencing.....-('
A"gJ"t 1 ?nOs. Wt-n-tT~(~: C"':::>E- '(eAi'l- ~~S ~L\.o.$. ".))
("Commencement Dete") and ending 17:,-y ~1 ,,,," E:f.,,,,,.er ,.. ,~l..""ll..l'i!"U -r.-.:::e(~) ~ l (''Expiration
Dale"). (See also Paragraph 3) "2.OtI?
1.4 Early Possession: 1 p<<"" nm" in r"<<,,~~i,,n ("Early possession
Dale").
(See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $ 1 ql ~n
day of each month commencing Al1g'11c::t
4)
12111 this box is checked, there are provisions in this Lease lor the Base Renl to be adjusted.
1.6 Le.see'. Share 01 Common Area Operating Expanses: Ii! I A percent (_0/.) ("Lessee's Share"). Lessee's
Share has been calculaled by dividing the approximate square lootage 01 lhe Premieas by the approximate square loolage of the
Project. In the event Ihal lhat size 01 the Premises and/or lhe Projeclare modilied during lhe term 01 this Lease, Lessor shall recalculaie
Lessee's Share to reflect such modification.
1.7 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent: $ for the period
(b) Common Area Operating Expenses: $
(c) Security Deposit: $
(d) Other: S lor
(e) Total Due Upon Execution 01 this Lease: $
Agreed Use: ~::In T-\prn~r('H-nt"'\ Pnli("'fQo Th:or~rtmp"n~ "ffil""o R-n,:! ~:u~m;r'd<:!"r~~iHn 11C:'"
per month ("Base Rent"), payable on Ihe
first" (1~r)
. (See also Paragraph
?om
for lhe pariod
("Security Deposit"). (See also Paragraph 5)
1.6
(See also Paragraph
6)
1.9 Insuring Party. Lessor is the "Insuring Party." (See also Paragraph 8)
t.l O. ..-Raal-e_trll rok.rr.-(S......I.a"paragraprr1.~)
(a) Representation: The lollowing real estate brokers
Iransaction (check applicable boxes):
(]
Broker"):
IJ
_ ----.--r1
(the "Broker.") and brokerage rela~QClShIP~' this
_represen~cIUSIVeIY ("Lessor's
-----
___----- represents Lessee exclusively ("LeSSee's Broker"):
or
------ ..
o _- represents both Lessor and Lessee ("Dual Agency-).
(b) ~y.mentt6Brokers: Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Brokers the
broke.r.aQa-lee"agreed 10 in a separale writtan agreement (or il there is no such agreement, the sum of or - % 01
thiAOtaraa~nHor-lhe-l>rokersg......rvices-rendered-by-the-erokersr.
1.11 Guarantor. The obligations of the Lessee under this Lease arB to be g'uaranteed by N I A
("Guarantor"). (See also Paragraph
37)
\. '2 Attachments. Attached hereto are the fOIlOwin?9 all of which constitute a part of this Lease:
~ an Addendum consisting of Paragraphs 21l- through ;
o a site plan depicting the Premises;
IXl a sile plan depicting the Project;
o a currenl set of the Rules and Regulalions lor Ihe Projecl;
o a currenl sel ollhe Rules and Regulations adopted by the owners' association;
o a Work Letter,
IJ other
(specify):
2. Premises.
2.1 Lelling. Lessor hereby leases 10 Lessee. and Lessee hereby leases Irom Lessor, Ihe Premises, lor the term. allhe
*
PAGE 1
Initials
FORM MTG-4-5/04
lmllals
Q1998-AIR Commercial Real Estale AssociRtion
rental, and upon all 01 the terms, covenants and conditions set torth in this cease. Unloss otherwise provIded hereIn, any statement 01
SIZO setlorth In this Lease, or that may have been used in calculating Rent, is an approximetlon whIch the PartIes agree IS reasonable
and any payments based thereon are not subject to revision whether or not the actual size is more or less. NOTE: Lessee Is advised
to verity the actual size prior to executing this Lease.
2.2-- _Condltlon~l:eSSOiShall'deliveMhat'portion'ot1he,premises-contained-within1.hs'Building'rU nlt"'1:o1:essee-broom~98T'\
and free 01 debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), an~0n9 as the
required seMce contracts described in Paragraph 7,' (b) below are obtained by Lessee and in effect within thif!j.days1Oilowlng the Start
Date. warranlS that the existing electrical, plumbing. lire sprinkler, lighting, heating, ventilating and ~ntfi'{'loning systems ("HYAC"),
loading doors, sump pumps, il any, and all other such elements in the Unit, other than tho 8-eor\structed by Lessee, shall be In good ~
operating condition on said date, that the structural elements 01 the rool, beanng w loundation of the Unit shall be Iree 01 matenal ) 1
delecls, and that the Unit does not contain hazardous levels of any moJ>1.o gi delined as toxic under applicable state or lederallaw.
If a non-compliance with such warranty exists as of the Start D~r1rone of such systems or elements should malfunction or fail within
the appropriate warranty period, Lessor shall. 8S L~Hr1Oie obligation wilh respect to such matter, excopt as otherwise prOVided In
this Lease, promptly after receipt 01 written "ee11Om Lessee sening forth with specificity the nature and extent of such non-compliance,
mall unctIon or failure, rectify sam sor's expense. The warranty periods shall be as follows: (i) 6 montps as 10 the HVAC systems,
and (ii) 30 days as 10 t~ ning systems and other elements of the Unit. If Lessee doe. nol give Lessor the reqUlfed notice wI'hln
the appropriat arr:lnty period, correclion of any such non-compliance, malfunction or lailure shaH be the obligatIon 01 Lessee at
Less' e cost and expense (except for the repairs to the fire sprinkler systems, root, foundations, and/or bearing walls. see
ra9raph-7):
~mPlleAee.-4..-<l.96f-WB"BAl9-IhBHc)-\he-lle.t-OI-i~AOwledge-th~mprovemeA~rMhe-PremiS9".",nd-th..-eomm9n
Areas comply with the building codes that were in effect at the time that each such improvement, or portion thereol, was constrye(ed,
and also With. all applicable laws, covenants or restrictions of record. regulations, and ordinances in effect on the Start Date (." APPnc~b.le ,,<'\\
Requirements"). Said warranty does nol apply to the use to which Lessee will put the Premises, modifications which ma:vt>e reqUIred' )'
by the Amencans with Disabilities Act or any similar laws as a resull 01 Lessee's use (see Paragraph 49), or to any Alto/allons or Utihty
Installations (as defined in Paragraph 7,3(a)) made or to be made by Lessee, NOTE: lessee Is responsible for d~rmlnlng whether
or not the Applicable Requtrements, and especially the zoning are appropriate for Lessee'a Intended US" and ecknowledges
that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warr r\ty, Lessor shall, except
as otherwise provided. promptly after receipt 01 written notice from Lessee setting forth with specificity t nature and extent 01 such
non-compliance, rectily the same et Lessor's expense, If Lessee does not give Lessor written noti of a non-compliance with this
warranty wllhin 6 months following the Start Date, correction 01 that non-compliance shall be the 0 I gation of Lessee at Lessee's sole
cost and expense. If Ihe Applicable Requirements are hereafter chsnged so as to require durin e tenn of this Lease the construction
of an additlon to or an alteration of the Unit, Premises and/or Building, the remediation of any 1:;1 ardous Substance, or the reinforcement
or other physical modilication 01 the Unit, Premises and/or Building ("Capital Expen2ltu e"), Lessor and Lessee shall allocate Ihe cost
01 such work as follows:
(a) SUbject to Paragraph 2,3(c) below, if such Capital Expenditur~ are required as a result of the specific and unique
use 01 the Premises by Lessee as compared with usea by tenants in genereJ('Cessee shall be fully responsible lor the cost thereof,
provided, however that If such Capital Expenditure is required during the 4St 2 years of this Lease and the cost thereol exceeds 6
monlhs' Base Rent, Lessee may instead terminate Ihis Lease unless L sor notifies Lessee, in writing, within' 0 days alter receipt 01
Lessee's termination notice that Lessor has elected to pay the diffe nce between the actual cost thereof and the amount equal to 6
months' Base Rent. If Lessee elects termination, Lessee shall ilJ)l ediately cease the use of the Premises which requires such Capital
Expenditure and deliver to Lessor wrirten notice specifying aJ.etmination date at least 90 days thereafter, Such tennlnation date shall,
however, in no event be earlier than the last day t:2at e$See could legally utilize the Premises wilhout commencing such Capital
ExpendIture.
(b) If such Capital Expenditure is 'Y the result of the specific and unique use of the Premises by Lessee (such as,
governmentally mandated .eismic modification;y'then Lessor end Lessee shall allocate the obligation to pay lor the portion 01 such
costs reasonably artributable to the Premise~pursuant to the formula sel oul in Paragraph 7,' (d); provided, however, that if such Capital
ExpendIture is required dUflng the last 2 years 01 this Lease or if Lessor reasonably determines that il is not economically leasible to
pay its share thereof, Lessor shall h the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 1 ays after receipt of Lessor's termination notice that Lessee wlll pay tor such Capital Expenditure. If
Lessor does not elect to tennil)2 e, and fails to tender its share of any such Capital Expenditure, Lessee may advance such lunds and
deducl same, wilh InterestJr6m Rent until Lessor's share of such costs have been fully paid, If Lessee is unable to finance Lessor's
share, or if the balance",,(the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an
oHset basis, Lessee Ifall have the right to tenninate this Lease upon 30 days wrirten notice to Lessor,
(c otwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-
voluntal)', unJ:" ected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a resull 01 an
actual or ~oposed change in use, change in intensity. of use, or modification to the Premises then, and in that event, Lessee shall eilher:
(I) Im')leSiately cease such changed use or intenSIty of use and/or take such other steps as may be necessary to elimInate the
r.;lUffementlor such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall nol have any right
t6-t~Ri<>-beeae,
2.4 Acknowledgements. Lessee acknowledges thaI: (a) it has been advised by Lessor and/or Brokers 10 satisfy ilsell with
respact to the condition of the Premises (including bul not limited to the electrical, HVAC and fire sprinkler systems, security,
environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for
Lessee's intended use, (b) Lessee has made such investigation as it deems necessary with relerence to such marters and assumes all
responsibility therefor as lhe same relate to its occupancy 01 the Premises, and (c) neither Lessor, Lessor's agents, nor Brokers have
made any oral or wrinen representations or warranties with respect to said matters other than as set forth In this Lease. In addition,
Lessor acknowledges that (i) Brokers have made no representations. promises or warranties concerning Lessee's ability to honor the
Lease or suitability to occupy the Premises, and (ii) il is Lessor's sole responsibility to invesligate the lInancial capability and/or suitability
01 all proposed tenanls,
2,5 Lessee as Prtor Owner/Occupant The warranties made by Lessor in Paragraph 2 shall be of no force or effect il
immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responSible for
any necessary corrective work.
2.6 Vehicle Parking, Lessee shall be enlilied to use the number of parking spaces specified in Paragraph 1,2(b) on those
portions 01 the Common Areas designated from time to time by Lessor for parking. Les.ee shall not use more parking spaces than said
number, Said parking spaces shall be used lor parking by vehicles no larger than full-size passenger automobiles or pick-Up trucks,
herein called "Permitted Stze Vehlclea." Lessor may regulate the loading and unloading of vehicles by adopting Rules and Regulations
as provided in Paragraph 2.9, No vehicles other than Permirted Size Vehicles may be parked In the Common Area without the prior
written permission of Lessor. In addition:
(a) Lessee shall not pennil or allow any vehicles thai belong to or are controlled by Lessee or Lessee's employees, suppliers,
shippers, cuslomers, conlractors or Invitees to be loaded, unloaded, or parked in areas other than those designaled by Lessor lor such
actiVIties.
{b) Lessee shall not service or store any vehicles in the Common Areas.
. (c) If Lessee penn its or allows any of the prohibited activities described in this Paragraph 2,6, then Lessor shall have the
right, wilhoul notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Lessee, which cosl shall be Immediately payable upon demand by Lessor,
2.7 Common Areas _ Definition. The tenn "Common Areas" is defined as all areas and facilities outside the Premises and
within the exterior boundary line 01 the Project and interior utility raceways and installations within the Unit that are provided and
designated by the Lessor Irom time to lime lor the general non-exclusive use 01 Lessor, Lessee and other tenanls 01 the Project and
their respective employees, suppliers, shippers, customers, contractors and invitees, including parking areas. loading and unloading
Initials
C199a-AIR Commercllt Rut Estate Anaclltlon
PAGE 2
~
FORM MTG-4-SJ04
-""
..1"....~."
areas, trash areas, roadways. walkways, driveways and landscaped areas.
2.8 common Area. _ ~e..ee'. Right.. ~essor grants to ~esse.. for the b.n.1il 01 ~.ss.. and its employ..s, suppii.rs,
shlpp.rs, contractors. cuslom.rs and invit..s. during Iha I.rm 01 Ihis ~.ase, Ih. non-.xclusive righl to use, in common with others
enl,Ued 10 such us.. the Common Areas as they .xiSI from time 10 time, subj.ct to any rights. powers, and privileges res.rved by ~.ssor
und.r the terms h.r.of or und.r the t.rms of any rul.s and regulation, or restrictions goveming the use of the proj.ct. Und.r no
Clrcumslances shall the right h.r.in granted to use Ih. Common Area' be deemed to includ. the right to star. any property. I.mporarily
or permanenlly, in Ihe Common Ar.as. Any such slorage shall b. permined oniy by the prior wrin.n cons.nl of L.ssor or L.ssor's
d.signated ag.nt. which consenl may b. revoked at any tima. In the event thai any unauthorized slorage shall occur then L.ssor shall
have 1M right, withoul notice, in addition 10 such oth.r rig his and remodloa that It may heve. 10 remove the prop.rty and charge the cost
to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.9 Common Areo. . Rule. ond Regulations. ~.ssor or such olh.r p.rson(s) as L.ssor may appoinl shall have th.
exclUSive conlrol and manag.ment of the Common Areas and shall have the righi, Irom time 10 lime, 10 establish, modily. am.nd and
enlorce reasonable rul.s and regulations ("Rul.. and Regulallon,") for Ih. managem.nt, salety, car., and cl.anlin.ss ollh. groundS,
the parking and unloading 01 vehicl.S and the pr.s.rvalion 01 good ord.r, as well as for Iho conv.nience 01 oth.r occupants or I.n.nts
of th. Building and the Proj.cl and their invil.es. Lass.e agre.s to abide by and conform to all such Rules and R.gulations. and shall
use its besl .Horts to cause its employ..s. suppli.rs, shlpp.rs, customers, contractors and invitees 10 so abide and conform. Lessor
shall nol b. r.sponsibie to Less.e lor the non-complianc. with said Rules and R.gulations by other tenants ollh. Project.
2.10 Common Areaa . Changaa. L.ssor shall have th. right, in L.sso(s sol. discr.tion, from time 10 tim.:
(a) To make chang.s 10 Ih. Common Ar.as, including, withoullimitation, chang.s in the location, size, sh.pe and number
01 driveways. .nlrances. parking spac.s. parking ar.as, loading and unloading ar.as. ingress. .gr.ss, direcl,on oltraHic. landscaped
areas, walkways and utility raceways;
(bl To clos. t.mporarily any of th. Common Areas for maint.nance purpos.s so long as r.asonable access to Ihe Premises
remains available;
(e) To d.signate olh.r land outside Ih. boundaries of Ih. Proj.cllO b. a part of Ih. Common Areas;
(d) To add additional buildings and improv.ments to th. Common Ar.as;
(el To us. the Common Ar.as while .ngag.d in making additional improv.m.nts. r.pairs or all. rations 10 Ihe Project. or any
portion thereof; and
(I) To do and penorm such olh.r acls and make such oth.r chang.s in, to or with r.spect to Ihe Common Areas and Project
as Lessor may, in the exercise of sound business judgment. deem to be appropriate.
3. Term.
3.1 Term. Th. Comm.nc.m.nt Dal., Expiration Dal. and Original T.rm of Ihis Leas. are as specilied in Paragraph 1.3.
3.2 Early po..e..lon. \I ~o...o totelly or partially occupiea the Premi... prior to th. Commencem.nt Date. the obligabon
to pay Bas. R.nt .hall b. abal.d for the p.nod 01 such eariy pos....ion. All oth.r t.rm. ollhls L.a.e (including but not Iimil.d to the
obligations 10 pay L.ss..'s Share of Common Area Op.rating Exp.nses, R.a1 Prop.rty Tax.s and insuranc. pr.miums and to maintain
the Pr.mis.s) shall b. in .H.ct during such p.riod. Any such .any poss.ssion shall not aff.ctth. Expiration Oat..
~ gel8) IA PDB88s~e~86&f--6t1F&e&-tftoooti&e--tt&-beet-oemmefMIly-f68ee"ab}e-e"ert&-lo-de~es9ie e
Premises to L.ss.. by the Comm.ncem.nt Dal.. \I, d.spit. said .fforts, Lessor is unabi.lo d.liv.r poss.ssion as agr ssor shall
not be subj.ct to any liability th.relor. nor shall such lallur. aHect the validity of this L.as. or chang. the E~ti ate. Less.. shall
not, however. b. obligat.d to pay R.nl or p.norm Its oth.r obligations until L.ssor d.livers poss.~r!fie Pr.mis.s and any p.riod
01 rent abatement that L.ss.e would otherwise have .njoy.d shall run from the date o!Jll....,llTiV.ry 01 possession and continue lor a f
penod .qualto what L.ss.e would olh.rwis. have .njoy.d, but minus any da~1!1iY caused by Ih. acts or omiSSions 01 L.ss... \I
possession Is not d.liv.r.d within 60 days aft.r the Commenc.m.nUlat8:-l:8ssee may, at it. option, by nolic. in writing within 10 days
aller the end of such 60 day p.riod. canc.1 this Lease, in ytllic".,,~t the partl.. shall be discharg.d from all obligations her.und.r. \I \.
luch wnn.n notic. is not r.ceived by ~.ssor wj!bio-satalO day p.riod, L.ss.e's right to cancel shall t.mninate. Exc.pt as oth.rwise '
provided. iI possession Is not tender.QJo-L~. by th. St.rt Dato and ~.a.e. doe. not I.rminat. this L.as., as aloresaid, any period
01 rent abat.m.nt that Les~otl1i'l'Olherwis. have enjoyed shall run from tho dal. of d.liv.ry of possession and continuo lor a p.riod
equal to what L~8""II'Ould olh.rwis. have enJoyed under the t.rms her.of, bul minus any days 01 d.lay caused by the acts or
omlssi'lDS-"H::'8ss... \I poss.ssion 01 the Pr.mis.s is nol d.livered wilhin 4 months aller the Comm.nc.ment Date. this L.as. shall
1Q~._ou:~~",gmgr.:ll&: lI~clwd ~,:,t'''IiiQJ;j 1 \insr :a"''CI !...Qtrgg, iR '''riti'"'j.
3.4 L.ss.e Compliance. Lessor shall not b. required to t.nder possession 01 the Pr.mis.s to L.sse. unlil Less.. complies
wilh its obligation 10 provide .vidence 01 insuranc. (Paragraph 8.5). P.nding d.liv.ry of such .vid.nc.. L.ss.. shall b. r.qUlr.d to
p.rto~m all 01 its obligations und.r this L.as. from and all.r the Start Oat.. including the paym.nt of Rent, notwithstanding Lessor's
election to wilhhold poss.ssion p.nding rec.ipt 01 such evidence 01 insuranc.. Furth.r, if L.ss.. is required to p.norm any olher
cond,tions prior to or concurr.nt with th. Start Dale, th. Start Oat. shall occur bul L.ssor may el.cl \0 withhold possession unlil such
conditions are satisfied.
4. Rent.
4.1. Rent Defined. AIi mon.tary obligations 01 L.sse. to Lessor under the t.rms of this L.as. (exc.pt for the Securily
Deposil) are d..m.d 10 b. r.nt ("Rent").
1.a ~emm.R . .e. Op.'.tlRg......p.R.... 1...~lI-paI'-lo-l.e.""r-d"rjRlI-lt"M6rffi4lerool,-i.....dditjeA-l<>-If\e-B.ee-R~l.j
Less.e's Share (as specifi.d in Paragraph 1.6) of all Common Ar.a Operating Expens.s. as her.lnaller delined, during .ach endar
year 01 the term oflhis Leas., in accordanc. wilh the following provisions:
(a) "Common Area Dperallng Expens.s" are d.firled, for purposes of this Lease. as all costs incurred essor relaling
\0 Ihe ownership and operation of the Project, including, but not Iimit.d to, the following;
(i) Th. op.ralion. r.pair and maint.nance, in n.at, cl.an, good order and condition. but
subparagraph (.)). 01 the lollowing:
(aa) The Common Areas and Common Area improvements, including parkin as, loading and unloading areas.
trash ar.as. roadways, parkways, walkways. driveways,landscaped ar.as, bump.rs, irrigation ems. Common Ar.a lighting lacililles,
fences and gates. elevators. roofs, and roof drainage systems.
(bb) Ext.rior signs and any tenant direclories.
(cc) Any lir. sprinkl.r systems.
(ii) The cost 01 waler. gas, .Iectriclty and 1.I.phone to s
metered.
(iii) Trash disposal, pest conlrol s.rvic.s, prop.rt nagemenl, security servic.s, owner's association dues and f.es.
the cost to repain: the exterior of any structures and the cost ny environmental inspeclions.
{i....} Reserves set aside for maintenance repair of Common Areas and Common Area equipment.
(v) Any incr.ase above the Base Prop.rty Tax.s (as defined in Paragraph 10).
(vi) Any 'Insuranc. Cost Incr. (as d.fined in Paragraph 8).
(vii) Any d.duclibl. portio an insur.d loss concerning the Building or the Common Ar.as.
(viii) Auditors', accoun s' and attorneys' lees and COSlS related to the operation, mairltenance, repair and replac.m.nl
of the ProJ.ct.
(ix) Th. co any Capital Expendilur. to the Buliding or the Project not cov.r.d und.r the provisions 0' Paragraph
2.3 provided; however, Lessor shall allocate the cost 01 any such Capital Exp.nditur. over a 12 year period and L.sse. shall nol
be required to pay . than L.sse.'s Share 0' 1J144th 01 the cost of such Capital Expenditure in any given month.
Any oth.r s.rvic.s 10 b. provided by L.ssor that are staled .Isewh.r. in this Lease to b. a Common Ar.a
p.ns..
^ Ai' CO,;!",'A ^ rea g~er3Ii~&R6e&-and-t'leal-PfG~.fly-:relt094li.t-er6'<lpeeifieelly-eM,;b~tabl".l~h<ri:Jnit;-lh...euilding
Imtials
10199S-AIR Commercial Real Estate Anoclatlon
PAGE 3
.-f\
..... Initials
FORM MTG-4-S/04
......-....--....-...--- .-...--
eH<Hi"l'"""lAeH>tiiI61"!j-ifHloe-P<<>jeel-eH<HRe-<lPefatieA;-f6paiHlnd-fflainteAanee-lhereof;-5hall-be-<tIIOOaled-enl"ely-l<>-5Uc~J;!AII,
Buildmg, or other building. Howeyer, any Common Area Operating Expenses and Real Property Taxes that are nOj...S"eCilically
anrlbutable to Ihe Building or to any other building or to tne operation, repair and malntenano. thereor, ahZU be. ltabry allocated by
Lessor 10 all buildings in the Pro!ect.
(e). The inclusion oflhe improvements, facilities and services set forth in Subparagraph~)-s all not be deemed to impose l'
an obl,gatlon upon Lessor to either have saId improvements or facilities or to provide those ~ces unless the Project already h8. 5 the
same, Lessor already provides the services. or Lessor has agreed elsewhere in this L ae'To provide the same or soma of them.
(d) Lessee's Share of Common Area Operating Expenses is pay. onthly on the same day as the Base Rent IS due
hereunder. The amount ot such payments shall be based on Lessor's as . e of the annual Common Area Operating Expenses. Wahln
60 days atter written request (but not more than once each year r shall deliver to Lessee a reasonably detailed statement shOWIng
Lessee's Share ot the actual Common Area Operating E es incurred during the preceding year. It Lessee's payments during such
year exceed Lessee's Share, Lessor shall credi amount of such over.payment against Lessee's future payments. II Lessee's
payments during such year were less tha ee's Share, Lessee shall pay to Lessor the amounl of the deficiency within 10 days aher
delivery by Lessor 10 Lessee of th ement.
(e) Except as . ed in paragraph 4.2(a)(vili), Common Area Operating Expenses shall not include the cost of replacing
equipment or capit ponents such as the root, foundations, exterior walls or Common Area capital improvements, such as the
parking iol " &Ievators, {tlnctts that hav& a usefullile for accounting purposes of 5 years or more.
Common Area Operating Expenses shall not include any expenses paid by any tenant directly 10 third parties, or as to
lah Lesser is stRep jaB rBifflBt:ueea Ell aA) lAi~aAy;-eH=teHe~Fl\;-eHA&tHaAee-pfeGeeds.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money ot the Unlled States, wllhout
oUset or deduction (except as specilically permitted in this Lease), on or belore the day on which it is due. All monetary amounts shall
be rounded to the nearest whole doliar. In the event that any invoice prepared by Lessor Is inaccurate such inaccuracy shall not
constilute a waiver and Lessee shall be obligated to pay lhe amount set forth In this Lease, Rent lor any period during the term hereol
which is for less than one full calendar month shall be prorated based upon the actual number 01 days of said month, Payment of Rent
shall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from time to time designate in
wrlling. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor's rights to the balance of such
Renl, regardless 01 Lessor's endorsement of any check so stating. In the event that any check, dran, or other instrument of paymenl
given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in addition to any Late Charg9
and Lessor, at its option, may require all future Rent be paid by cashier's check. Payments will be applied first to accrued late charges
and attorney's feBs, second to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount
10 any other outstanding charges or costs,
S. 6_<", ;t, B_~~.iL L<,,_~ sMail ele~.eit it~ bess.r w~." ...0' '\;op ~.,~~f oko .,o~, '"~, nOpMa .. .oN";ll~"''bl,es x\')
perlormance of its obligations under this Lease, If Lessee fails to pay Rent, or otherwise Defaults under this Lease, L r may use, J!
apply or retain all or any portion of said Security Deposit for the payment of any amount due Lessor or to rei e or compensale
Lessor for any liability, expense, loss or damage which Lessor may suHer or incur by reason thereof, If Le ses or applies all or any
portion of the Security Deposit, Lessee shall within 10 days aner wrinen request therefor deposit m ' with Lessor su~icient to reslore
said Security Deposit to the full amount required by this Lease. If the Sase Rent increases . g the term of this Lease, Lessee shall,
upon wrinen request from Lessor, deposit additional monies with Lessor so that the t mount of the Security Deposit shall at all times
bear the same proportion to the Increased Sase Rent as the initial Securit sit bore to the Initial Sase Rent. Should the Agreed
Use be amended to accommodate a material change in the busine essee or to accommodate a sublessee or assignee, Lessor
shall have the right to increase the Security Depesit to the nt necessary, in Lessor's reasonable judgment, to account for any
increased wear and tear that the Premises may suffa result thereof. If a change in control of Lessee occurs during this Lease and ".,
following such change the financial condition see is, in Lessors reasonable judgment, significanUy reduced, Lessee shall deposit
such addilional monies wilh Lessor a e sufficient to cause the Security Deposit to be at a commercially reasonable level based
on such change in financial C n. Lessor shall not be required to keep the Security Deposit separate from its general accounts.
Wilhin 1~ days atter th lration or termination of this Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and
otherwise withi ays after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of
the Sec' eposit not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest
f~ffiOfll-I"..any-monie&-l~~by-\.aS&e~\his..Laa$e.
6. Use,
6.1 Use, Lessee shall use and occupy the Premises only for Ihe Agreed Use, or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unla'Nful,
creales damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properties. Other than
goide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or reptiles. Lessor shall
not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use. so long as the same will not
impair the structural integrity of the Building or the mechanical or electrical systems therein, andlor is not significantly more burdensome
to the Project. If Lessor eiects to withhold consent, Lessor shall within 7 days aner such requesl give wrinen notificalion of same, which
notice shall include an explanation of Lessor's objections to the change in the Agreed Use,
6.2 Hazardous Substances,
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any
product, substance, or waite whose presence, use, manufacture, disposal, transportation. or release, either by itself or in combination
wilh olher materials expected to be on the Premises, is either. (i) petentially Injurious 10 the public health, safely or wellere, the
environmenl or the Premises, (II) regulated or monitored by any governmental authority, or (iil) a basis for potentialliabilily of Lessor to
any go~ernmental agency or third pany under any applicable statute or common law theory. Hazardous Substances shall include, but
not be limited to, hydrocarbons, petroleum, gasoline, and/or crude 011 or any product., by.producUl or fractlonl thereof. L....e lihall net
engage in any activity in or on the Premises which consUMes a Reportable Use of Hazardous Substances withoul the express prior
wrillen consent of Lessor and timely compliance (at Lessee's expense) with all Applicable Requirements, "Reportable U.e" shall mean
(i) the installation or U58 of any above or below ground storage tank, (il) the generation, possession, storage, use, transportation, or
~Isposal of a Hazardous Substance that reQuires a permit from, or with respect to which a report, notics, registration or business plan
IS required to be filed with, any govemmenlal authority, andlor (iii) the presence at the Premises of a Hazardous Substance wilh respect
to which any Applicable Requiremenls requires that a notice be given 10 persons enlering or occupying the Premises or neighbOring
properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the
normal course of the Agreed Use, ordinary oHice supplies (copier toner, liquid paper, glue, etc,) and common household cleaning
matenals, so long as such use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose lhe
Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably
deems necessary to protecl itself, the public, the Premises andlor the environment against damage, contamination, injury andlor liability,
including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such
as concrete encasements) andlor increasing the Security Deposit.
(b) Duty 10 Inform Lessor, If Lessee knows, or has reasonable cause to believe, that a Hazardous Subslance has come
to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give written
notice 01 such fact to Lessor, and provide Lessor wilh a copy of any report, nolice, claim or olher documentation which II has concerning
Ine presence of such Hazardous Substance,
(c) Lessee Remediation, Lessee shall not cause or permit any HazardOUS Substanoe 10 be spilled or released in, on,
under, or about the Premises (inCluding through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply
wilh all Applicable Requirements and take ali investigatory and/or remedial action reasonably recommended, whether or not formally
oreered or required, for the cleanup of any contamination of, and for the maintertance, security andlor monitoring 01 the Premises or
~
PAGE 4
Inillals
FORM MTG-4-S/04
1000ials
0I99S.AIR Commercial Real Estate Association
~~~~~~:~~~ "repefIlC!~ 1:1 ~:: ee..eo or ",elilttlllly-e6ftlflll~le6-i. ~'ee-;-<l.-pmtei"i"g-I""""";"VOlvi"g-tlrry-HelerOO"...s"e.le"Ce
8 IRB PrSiRle d g lRB term sf 11:1.1& ~aa6s, B~ 6f far Lessee, at aAY U=IIFe-p.any.
(d) Lessee Ind.mnlflc.Uon. L.ss.. shall ind.mnily. d.f.nd .nd hold L.ssor, ilS ag.nts. employ.es, I.nders and ground
lessor, it any. harmless from and against any and all less of renLs and/or damages, liabilities, Judgmenta, claims, expenses, penalties,
and allomeys' and consultants' fees arising oul of or involving any Hazardous Substance broughl onto the Premises by or lor Lessee,
or any Ihtrd party (provided, however, that Lesse. shall have no lIabilily under this Lease with respect to underground migratIon 01 any
Hazardous Substance under the Premises from areas outside of lhe Project not caused or contributed to by Lessee). Lessee's
obllga\lons shall include, but not be limIted to, the effects of any contamination or injury to person, property or the environment created
or suHered by Lessee. and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration
or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall release Lessee
from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time 01 such agreement.
(e) Lea.or Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee,
III employ.e. and lender., harmle.. from and against any and all environmental damage., Including the coat of remediatlon, which ar.
suHered as a direct result 01 Hazardous Substances on the Premises prior to Lelloe taking pOllelSIOn or which are caused by the gross
n.glig.nce or willlul misconduct of Lessor, ilS agents or .mployees. Lessor'. obligation's, as and when required by the Applicabi.
Requir.menl', sh.1I include, but not b. limited to. the cost of invesligation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination 01 this Lease.
(I) Investigation. and R.m.dlatlons. Lessor shall r.lain the r.sponsibility and pay for any investigalions or remediation
measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the PremIses
prior to Lessee taking possession, unless such remediation measure Is reQuired as a result 01 Lessee's use (including "Alterations", as
delined In paragraph 7.3(a) below) of the Premises, In which .v.nt L..... shall b. respon.ible for such paym.nt. L.ssee shall
cooperate lully in any such activities at the request of Lessor, including allowing Lessor and Lessor's agenls to have reasonable access
to the PremIses at reasonable times in order to carry out Lessor's investigative and remedial responsibilities.
(g) L.ssor T.rmlnatlon Option. If a Hazardous Substance Condition (s.. Paragraph g. 1(e)) occurs during Ihe term of
this Lease, un lass Lessee is legally responsibla therefor (in which case Lessee shall make the investigation and remediation thereat
required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor's rights under
Paragraph 6,2(d) and Paragraph 13), Lessor may, at L.ssor's oplion, either (i) investigate and remediate such Hazardous Substanc.
CondItion, if reQuired, as soon as reasonably possible at Lessor's expense, in which event this Lease shall continue in lull force and
eHact, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100.000. whichever is
greater, give written notice to Lessee, within 30 days atter receipt by Lessor of knowledge of the occurrdnce of such Hazardous
Substance Condition, of Lessor's desire to terminate this Lease as of the date 60 days following the date of such notice. In the event
Lessor elecls to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's commitment
to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times
the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance
thereol within 30 days following such commitment In such event, this Lease shall continue in lull lorce and eHect. and Lessor shall
procl3ed to make such remediation as soon as reasonably possible atter the reQuired lunds are available. II Lessee does not give such
notice and provide the required funds or assurance the real within the time provided, this Lease shall terminate as 01 the date specified
in Lessor's notice 01 termination.
6.3 Lessee's Compliance with Applicable ReqUirements. Except as otherwise provided in ttlis Lease, Lessee shall, at
Lessee's sole expensB, tully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements 01
any applicabl. lor. in.urance underwrit.r or rating bureau, and the r.comm.ndations of Lessor's engineers andlor consultants which ......
relate in any manner to such Requirements. without regard to whether said Requirements are now in effect or become effective atter
the Start Date. Lessee shall, within 10 days atter receipt of Lessor's wrinen request, provide Lessor with copies 01 all permits and other
documents, and other information evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall
immediately upon receipt, notify Lessor in writing (with copies of any documents inVOlved) of any threatened or actual claim, notice,
ci:ation. warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable
ReqUIrements. Likewise, Lessee shall immediately give written notice to Lessor 01: (i) any water damage to the Premises and an}
suspected seepage, pooling, dampness or other condition conducive to the production of mold; or (ii) any mustiness or other odors that
might indicate the pr.sence 01 mold in the Premises,
6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultanls shall have the
right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times aftar reasonable notice. lor the
purpose of inspecting the condition 01 the Premises and lor verifying compliance by Lessee with this Lease. The cost 01 any such
inspections snail be paid by Lessor, unless a violation of Applicable Requirements, or a Hazardous Substance condition (see Paragraph
9.1) is found to ~xist or be imminent. or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall
upon request reImburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or
contaminallon. In addition, Lessee shall provide copies of all relevant material safety data sheets (MSDS) to lessor within 10 days 01
the receipt of written request therefor.
7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.
7,1 Lessee's Obllgetlons.
(a) In General. Subj.ct to the provisions of Paragraph 2.2 (Condition). 2.3 (Compliance), 6.3 (Lesse.'s Compliance wilh
Applicable Requirements). 7.2 (Lessor's Obligations), g (Damag. or Destruction), and 14 (Cond.mnalion), Less.e shall, .1 L.ss..'s
sole expense, keep the Premises, Utility Installations (intended lor Lessee's exclusive use, no matter where located), and Alterations in
good order. condition and repair (whether or not the portion at the Premises requiring repairs, or the means of repairing the same, are
reasonably or readily accessible to Lessee. and whether or not the need for such repairs occurs as a result of Lessee's use, any prior
use, Ihe elements or the age of such portion of the Premis.s), including, but not limited to, ell .quipm.nt or faciiities, such as plumbing,
HVAC .quipment, eleclrical, lighting tacilities, boilers, pressure vessels, fixtures, interior walls, interior surtaces of exlerior walls, ceilings,
f1ocrs, windows, doors, plate glass, and skylights but excluding any ilems which are the responsibilily of Lessor pursuant to Paragraph
7.2. Lessee, in keeping the Premises in good order, condition and repair, shall exerclse and perform good maintenance practices,
specifIcally including the procurement and maintenance of the service contracts required by Paragraph 7.1 (b) below. Lessee's
obl'lgations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or
a part thereol in good order, condition and state of repair,
(b) ServIce Contracts. Lessee shall. at Lessee's sole expense, procure and maintain contracts, wilh copies to Lessor,
in cuslomary lorm and substanc& for, and with contractors specializing and experienced in the mainlenance of the following equipm.nt
and Improvements, U any, if and when Installed on the Premises: (i) HVAC eQuipment, (ii) boiler and pressure vessels, (iii) clarifiers, and
(iv) any other equipment, if reasonably required by Lessor. However, Lessor reserves the right, upon nollce to Lessee, to procure and
mainla,n any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, for the cost thereof.
(c) Fallur. to Perform, If L.ss.e fails to pertorm Less.e's obligations under this Paragraph 7.1, Lessor may enter upon
Hle Premises atter 10 days' prior written notice to Lessee (except In the case of an emergency, in which case no no lice shall be required),
pertorm such obligations on Lessee's behalf, and pul the Premises in good order, condition and repair. and L.ssee shall promplfy pay
to Lessor a sum equal to "5% of the cost thereof.
(d) Replacem.nt. Subject to Less.e's indemnification of Lessor as set forth In Paragraph 8.7 below, and wilhout
. relieving Lessee of liability resulling from Lessee's failure to exeroise and pertorm good maintenance prectlceS, il an item described in
Paragraph 7,1 (b) cannot be repaired other than at a oost which is In excess of 50% 01 the cost of replacing such item, then such Item
shall be replaced by L.ssor, and the cost thereof shall be proraled between the Parties and Lessee shall only be obligated to pay, eaoh
monlh during the remainder 01 the term of this Lease. on the date on which Base Rent is due, an emounl equal to the product of
mull'plying Ihe cost 01 such replacement by a fraction, the numeralor of which is one, and the denominator of which is 144 (ie. 1/144th
"'"'
?
PAGE 5
Initials
FORM MTG-4.S/04
Imtlals
Q199S.AIA Commercial Real Estate Association
o/the cosl per month). Lessee shall pay Interest on the unamortized balance but may prepay its obligation at any lime.
7.2 Le..or'. Obligations, Subject 10 the provisions of Paragraphs 2.2 (Condition), 2.3 (Complla. ,e). 4.2 (Common Area
Operaling Expenses), 6 (Use), 7.1 (LeSSee's Obligations), 9 (Damage or Deslruction) and 14 (Condemna',on). Lessor, subject to
reimbursement pursuant to Paragraph 4.2. shall keep in good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, lire sprinkler system. Common Area fire alarm and/or smoke detection systems, fire
hydrants, parking lots, walkways, parkways, driveways, landscaping, lences, signs and utility systems serving the Common Areas and
all parts thereof, as well as providing the services lor which there is a Common Area Operating Expense pursuant to Paragraph 4.2.
Lessor shall not be obligated to paint the exterior or interior surfaces 01 exterior walls nor shall Lessor be obligated to maintain. repair
or replace windows. doors or plaia glass 01 the Premises. Lessee expressly waives the benelit of any statute now or hereafter in elloct
to the extent It is inconsistent with the terms of this Lease.
7.3 Ullllty Installetlons; Trade Flxlures; Allerellons.
(a) Oellnlllonl. The term "Utility Inllallatlono" refers to all floor and window coverings, air andlor vacuum iines, power
panels. electrical distribution, security and fire protection systems, communication cabling, lighting fixtures, HVAC eQuipment, plumbing,
and 'tneing in or on the Preml.... The term "Trade Fixture." shall mean Lesl.e'. machinery and equipment that can be remo....ed
without doing material damage to the Premises. The term "Alleratlonl" shall mean any modification of the Improvements, other than
Ulility Installations or Trade Fixtures, whether by addition or deletion. "Lea.ee Owned Alteratlono endlor Ullllty Inolellallono" are
delined as Ailerations and/or Utilily Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).
(b) Consent. Lessee shall nol make any Ailerations or Utilily Installations to the Premises without Lessor's prior wrirten
consent. Lenes may, however. make non.structural Utility Installations to the interior of the Premises (excluding the roof) without such
consent but upon notice to Lessor, as long as they are not ....Islble from the outside, do not involve puncturing, relocating or removing the
rool or any existing walls, will not aflect the electrical, plumbing, HVAC, andlor life safety systems, and the cumulative cosl thereol during
this Lease as extended does not exceed a sum equal to 3 month's Base Rent in the aggregate or a sum equal to one month's Base
Rent in anyone year. Notwithstanding the foregoing. Lessee shall not make or permit any roof penetrations andlor install anything on
the roof without the prior wrinen approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize
a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require
(he consent of the Lessor shall be presented to Lessor in wrinen form with detailed plans. Consent shall be deemed conditioned upon
Lessee's: (i) acquiring all applicable governmental permits. (ii) furnishing Lessor with copies of both the permits and the plans and
specilications pnor to commencement of the work. and (iii) compliance with all conditions of said permits and other Applicable
Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be perlormed in a workmanlike manner
with good and suflicienl malerials. Lessee shall promptly upon completion furnish Lessor with as.built plans and specilicalions. For wor\<
which costs an amount in excess of one month's Base Rent, Lessor may condition its consent upon Lessee providing a Hen and
complelion bond in an amounl equal 10 150% of the estimated cost of such Alleration or Utility Inslallation andlor upon Lessee's posting
an additional Security Deposit with Lessor.
(c) Liens; Bondo, Lessee shall pay, when due, all claims for labor or male rials furnished or alleged to have been
lurnished to or lor Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien
against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement 01 any
work In, on or about the Premises, and Lessor shall have the right to post notices of non. responsibility. If Lessee shall contest the validity
01 any such lien, claim or demand, then Lessee shall, at ,Is sole expense defend and protect Itself, Lessor and lhe Premises against the
same and shall pay and satisty any such adverse judgment that may be rendered thereon before the enforcement thereot. If Lessor
shall require. Lessee shalllurnish a surety bond in an amount equal to 150% of the amount of such contested lien. claim ordemand.
indemnifying Lessor against liability lor the same. It Lessor elects to participate in any such action, 'Lessee shall pay Lessor's attorneys'
lees and costs.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations
and Utility Installations made by Lessee shall be the property 01 Lessee, but considered a part of the Premises. Lessor may, at any time,
elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise
instructed per paragraph 7.4{b) hereol. all Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of thiS
Lease. become the property of Lessor and be surrendered by Lessee with the Premises.
(b) Removel. By delivery to Lessee of wrirten notice from Lessor not earlier than gO and nollater than 30 days prior to
the end 01 the term of this Lease, Lessor may require that any or all Lessee Owned Allerations or Utility Installations be removed by the
expiration or lermination of this Lease. Lessor may require the removal at any time 01 all or any part of any Lessee Owned Alterations
or Utility Installalions made withoullhe required consent.
(c) Surrender; Resloratlon, Lessee shall surrender Ihe Premises by the Expiration Date or any earlier termination date,
with all 01 the improvements. parts and surlaces thereof broom clean and free of debris, and in good operating order, condition and state
of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterIoration that would have been
prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less. then Lessee shall
surrender the Premises in the same condition as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear.
Lessee shall rapair any damage occasioned by the instaliation, maintenance or removal of Trade Fixlures, Lessee owned Alterations
and/or Utility Installations, furnishings, and equipment as well as the removal of any storage tank installed by or for Lessee. Lessee
s~all also completely remove Irom the Premises any and all Hazardous Substances brought onto the Premises by or lor Lessee, or any
thIrd party (except Hazardous Substances which were deposited vIa underground migration from areas outside 01 the Premises) even
it such removal would require Lessee to pertorm or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the
property of Lessee and shali be removed by Leesee, Any personal property of Lessee not removed on or before the Expiration Date or
any earlier termination date shall be deemed to have been ebandoned by Lessee and may be disposed of or retained by Lessor as
Lessor may deSire. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7 A(c) without the express written
consent 01 Lessor shall constitute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
B.1 Payment of Premium Increases.
(a) As used herein, lhe term "Insurance Cost Increase" is delined as any increase in the actual cost 01 the insurance
applicable to the Building andlor lhe Projecl and required 10 be carried by Lessor, pursuant to Paragraphs B.2(b), B.3(a) and B.3(b),
("Rcquired Insurance"), over and above the Base Premium, as hereinafter defined, calculated on an annual basis. Insurance Cost
Incroase shali include, bul not be Iimiled to, requiremenls 01 the holder 01 a mortgage or deed 01 trust covering the Premises, Building
andlor Project, increased valualion 01 the Premises, Building andlor Projecl, andlor a general premium rate increese. The term
Insurance Cost Increase shaU not, howev~r, include any premium increases resulting from the nature of the occupancy 01 any other
tenant 01 the Building. If the parties insert a dollar amount in Paragraph 1.9, such amount shall be considered the "Base Premium."
The Base Premium shall be the annual premium appllcabie to the 12 month period immediately preceding the Start Dale. If, however,
Ihe Project was nol insured for the entirety of such 12 monlh period, then the Base Premium shali be the lowest annual premium
reasonably obtainable tor the Required Insurance a8 ot the Start Date, assuming the most nominal use possible of the Building. In no
event, however, shall Lessee be responsible for any portion 01 the premium coSl ahrtbutable to liability insurence coverage In excess of
$2,000,000 procured under Paragraph 8.2(b).
(b) Lessee shaJl pay any Insurance Cost Increase 10 Lessor pursuanllO Paragraph 4.2. Premiums lor policy periods
commencing prior to, or extending beyond. the term of this Lease shall be prorated to coincide with the corresponding Start Date or
Expiration Date.
B.2 Uab1l1ty Insurance,
(a) Carried by Lessee. Lessee shall obtain and keep in lorce a Commercial General Liability policy 01 insurance ./
protecling Lessee and Lessor as an additional insured against claims lor bodily injury, personal injury and property damage based upoor) \
Cbl I ~ L-\.. ~ Or A Po \..~c.~ o~ Iw,:>I.l~e.. ~'- c.\. -C'i ~'t PtCD J ~ e:, ~
c.~f-\C.A-l~ of Sf.~ ~ 1~!.0~~G -ro L..SSs.o~.
PAGE 6
Inll'l<lls
01998.AIR Commercial Real E5tiJtC Association
.......--...... ",...",..._-_"'~'---"'"
?~
lmllals
FORM MTG-4.S'O~
r
...~I,'~IW'~~.
or arising oul 01 the ownership, usa, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall
be on an occurrence basi. provIding lingle limit coverage in an amount not I.N than $1,000,000 plr occurrente with an annual
aggregol9 01 not less Ihan $2,000,000. Lessee shall add Lessor as an additional insured by means 01 an endorsement alleasl as broad
as the Insurance Service Organization's -Additionallnsured.Managers or Lessors of Premises. Endorsement and coverage shall also
be extended to include damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured
exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an
"Insured contract" lor the perlormance of Lessee's indemnity obligations under this Lease, The limits 01 said insurance shall nol,
however, limit the liability of Lessee nor relieve Lessee at any obligation hereunder. Lessee shall provide an endorsement on its liability
policy(ies) which provides that its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
c.,"') MCarrled by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8,2(a). in addition to, and not
in lieu of, thl Insurance required to be maintained by LessGe. Lessee shall not be named 8S an additional insured therein.
8.3 Property Insurance. Building, Improvements and Rental Value. .
<a) Building and Improvements, Lessor shall obtain and keep in force a policy or policies of insurance in the name of
lessor, wllh loss payable to Lessor. any ground*lenor, and to any Lender insuring loss or damage to the Premises. The amount at such
insurance shall be eQual to the full insurable replacement cost of the Premises, as the sami shall exist from time to time, or the amount
reqUired by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned
Allerations and Uliiity Installalions, Trade Fixtures, and Lessee's personal property shall be insured by Lessee under Paragraph 8.4. II
the cOllerage is available and commercially appropriate, sUCh policy or policies shall insure against all risks of direct physical loss or
damage (except the perils of flood and/or earthquake unless required by 8 Lender), including coverage for debris removal and the
enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the
Premises as the result at a covered loss. Said policy or policies shall also contain an agreed vaJuation provision in lieu of any
coinsurance clause. waiver of subrogation, and inllation guard protection causing an Increase in the annual property insurance covera~e
amount by a lactor 01 not less than the adjusted U.S. Department ot Labor Consumer Price Index tor All Urban Cons.umers lor the city
noaresllo where the Premises are located. II such insurance coverage has a deductible clause, the deductible amount shall not exceed
$1,000 per occurrence.
(b) Rental Value. Lessor shall also obtain and keep in lorce a poiicy or poiicies in the name of Lessor with loss payable
Ie Lessor and any Lender, insuring the loss 01 the full Rent for one yesr with an extended period of indemnity for an additional 180 days
("Renlal Value insurance-). Said insurance ,hall contain an agreed valuation provision in lieu of any coinsurance clause, and the amount
01 cOllerage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period.
(c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance 01 the Building
and lor the Common Areas or other buildings in the Project if said increase Is caused by Lessee's acts, omissions, use or occupancy 01
the Premises.
(d) Lessee's Improvements, Since Lessor is the fnsuring Party, Lessor shall not be required to insure Lessee Owned
Allerations and Utility Instailalions uniess the item in question has become tha property of Lessor under the terms of this Lease.
BA Lessee's Property; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's persona] property, Trade
Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost "coverage with a
deductible 01 not to exceed $1 ,000 per occurrence. The proceeds trom any such insurance shall be used by Lessee for the replacement
01 personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with wrinen
ellidence that such Insurance is in lorce. ~
(~lae..ss.l.a1.eWJP1l.oA.-l.essee..sball.ob1ain aad..m.aLn1aia.Joss..DL.lncome-aw:1...axtr.a..axPQRrlJ il'G ~aAae;F\ afRO RII
...-....-._""",,ooee _0' or i.sir..II....1 ~~~~~ .~.::::'=::~" ~:;o= ;~::~ og"""' k). P",~o"' lomc. ;~
lJr h '~''''<;i''''' ,..,1 I nr..o.~ ()~ 7t'i~'1:'..,.,1-.1... t"'P'Q"~".t'<Y' ,:,' .........our.&Q4ho PJ9A:tiGtHi ai 1\ f"9t:iult 8'f. .
(c) No Representation of Adequate Coverage. Lessor makes no representation that the limits or forms 01 coverage of
insurance specified herein are adequate to cover Lessee's property, business operations or obligations under this Lease.
8.5 Insurance Policies. Insurance reQuired herein shall be by companies duly licensed or admitted to transact business in
the state where the Premises are located, and maintaining during the policy term a "General Policyholders Rating" 01 at least A" VI, as
set forth in the most current issue of "Best's Insurance Guide-, or such other rating as may be required by a Lender. Lessee shall not
do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of 6uch insurance or certificates evidencing the existence and amounts of the required insurance. No such
policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lelsee shall, at lealt 10 days
prior to the expiration or such policies, furnish Lessor with evidence of renewals or "insurance binders. evidencing renewal thereol, or
Lessor may order such insurance and charge the cost thereol to Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. II
either Party shalllailto procure and maintain the insurar,ce required to be carried by it, the other Party may, but shall not be required
to, procure and maintain the sams.
8,6 Waiver 01 Subrogation. Without affecting any other rights or remedies, Lessee and Lessor each hereby release and
relieve the other, and waive their entl~e right to recover damages against the other, for loss alar damage to its property arising out 01 or
~ncident to the penis required to be Insured against herein. The effect of such releases and waivers is not limited by the amount of
Insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage
insurance carriers waive any right to subrogation that such companies may have against Lessor or Lessee, as the case may be, so long
as the insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessor's .,.....negligence or willful misconduct, Lessee shall indemnity, protect, delend and hold
harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all
claims, loss of rents and/or damages, liens, judgments, penalties, attorneys' and consultants' fees, expenses and/or liabilities arising out
01, invoiving, or in connection with, the use andlor occupancy 01 the Premises by Lessee, II any action or proceeding is brought against
Lessor by reason of any of lhe loregoing matters, Lessee shall upon notice defend the same at Lessee's expense by counsel reasonabiy
satislactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order
to be delended or indemnitied,
8,8 Exemption of Lessor from Liability. Lessor shall not be liable lor injury or damage lo the person or goods, wares,
merchandise or olher property 01 Lessee, Lessee's employees, contractors, invilees, cuslomers, or any other person In or aboutlhe
Premises, whelher such damage or injury is caused by or results from lire. steam, electricity, gas, water or rain, indoor air quality, the
pro,cc,:e 01 mold or from the breakage, leakage, obstruction or other de:ects of pipes, tire sprinklers, wires, appiiances, piumbing, H'JAC
or lighllng lixlures, or Irom any other cause, whether the said injury or damage resulls from conditions arising upon the Premises or upon
other portions ollhe Building, or Irom other sources or places. Lessor shall not be liable for any damages arising Irom any act or negiect
of any other tenant of Lessor nor from-the failure of Leasor to enforce the provlsionl of any other lease In the Project. Notwithstanding
Lessor's negligence or breach 01 this Lease, Lessor shall under no circumstances be liable lor injury to Lessee's business or for any
loss 01 income or profitlherefrom,
8.9 Failure to Provide Insurence, Lessee acknowledges that any failure on its part to obtain or maintain the insurance
required herein Will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by Ihis Lease, the extent of
which wili be extremely difficult to ascertain, Accordingly, for any month or portJon thereof that Lessee does not maintain the required
.insurance and/or does not provide Lessor with the required binders or certificates evidencing the qxislence of the required insurance,
the Base Rent shali be automaticaliy increased, without any requirement lor notice to Lessee, by an amount equal to 10% of the than
existing Base Rent or $100, whichever is greater. The parties agree that such increase in Base Rent represents fair and reasonable
compensation for the additional risk/costs Ihat Lessor wili incur by reason of Lessee's lailure to maintain the required insurance, Such
increase in Base Rent shall in no event constitule a waiver 01 Lessee's Delault or Breach with respectlo the failure to maintain such
PAGE 7
~I
ImtJas
FORM MTG-4-S/04
lni~ials
C11998-AIR Commercial Real Eltate Association
. .
Insurance, prevent the exercise 01 any ot Ihe olher rights and remedies granled hereunder, nor relieve Lessee of its obligation 10 mamla,n
the insurance specified in this Lease.
9. Damage or Destruction.
9,1 Delinltlons.
(a) "Preml... Partial Damage" shall mean damage or destruction to the improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations. which can reasonably be repaired in 3 months or les8 from the date at the damag~
or destruction, and the costthereol does not exceed a sum equal to 6 month's Base Rent. Lessor shall notify Lessee In writing withm
30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. Notwithstanding the foregoing,
Premises Partial Damage shall not include damage to windows. doors. and/or other similar items which Lessee has the responsibility to
repair or replace pursuant to the provisions of Paragraph 7.1.
(b) "Premises Total Destruction" shall mean damage or destruction to the improvements on the Premises. other than
Lessee Owned Alteralions and Utility Installations and Trade Fixtures. which cannot reasonably be repaired in 3 monlhs or less Irom the
date 01 the damage or destruction and/or the cost thereof exceeds a sum equal to 6 month's Base Rent Lessor shall notify Lessee in
wriling within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total.
(c) "Insured L.a.." shall mean damage or destrucUon to improvements: on the Premises.. other than Lesse. Owned
Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described
in paragropl1 8.3\a), irrespective of any deductible amounts or coverage limits involved.
(d) "Replacement Cost" shail mean the cost to repair or rebuild the Improvements owned by Lessor at the time 01 the
occurrence to their condition exlsting immediately prior thereto, includIng demolition, debris removal and uP9rading required by (he
operalion 01 Applicable Requirements, and without deduction tor depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or discovery of a condition Involving the presence of,
or a contamination by, a Hazardous Substance as defined In Paragraph 6.2(a), in, on, or under the Premises which requires repair,
remediation, or restoration.
9.2 Partial Damage _ Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs. then Lessor shall, at
Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon
as reasonably possible and this Lease shall continue in tulllorce and effect; provided, however, that Lessee shall, at Lessor's election,
make the repair 01 any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event. Lessor shall make
any applicable insurance proceeds available 10 Lessee on a reesonable basis lor that purpose. Notwithstanding the loregoing, if the
required tnsurance was not in lorce or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly
contnbute the shortage in proceeds as and when required to complete said repeirs. In the event, however, such shortage was due to
Ihe fact that, by reason of the unique nature of the improvements, full replacement cost insurance covsrage was not commercially
reasonable and available, Lessor shall have no obligation to pay for the shortage In Insurance proceeds or to fully restore the unique
aspects 01 the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereat, within 10 days
lOll owing receipl 01 written nolice of such shortage end request therelor. If Lessor receives said lunds or adequate assurance thereol
Within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and thiS
Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by wrinen notice
10 Lessee within 10 days thereaHer to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any
shortage In proceeds, in which case this Lease shall remain in lull torce and effect. or (ii) have this Lease terminate 30 days thereaHer.
Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruction. Premises
Partial Damage due to flood or earthquak.e shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance
coverage. but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.
9.3 Partial Damage. Uninsured Losa. If a Premises Partial Damage that is not an Insured Loss occurs, unless caused by
a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair
such damage as soon as reasonably possible at Lessor's expanse, in which event this Lease shall cOAlinue in full force and effact, or
(ii) terminate this Lease by giving wrinen notice to Lessee within 30 days after receipt by L.essor of knowledge of the occurrence 01 such
damage. Such termination shall be effective 60 days following the date 01 such notice. In the event Lessor elects to tenninate this
Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee's
commitment to pay for the repair 01 such damage without reimbursement from Lessor. Lessee shall provide Lessor with said lunds or
satlslactory assurance thereol within 30 days after making such commitment. In such event this Lease shall continue in full torce and
eHecl. and Lessor shall proceed to make such repairs as soon as reasonably possible aHer the required lunds are evailable. If Lessee
dees not make the required commitment, this Lease shall terminate as of the date specified in the termination notice.
'9.4 Total Destruction. Notwithstanding any other provision hereof, it a Premises Total Destruction occurs, this Lease shall
termlnale 60 days following such Destruction. II the damage or destruction was caused by the gross negligence or willful misconduct
01 Lessee, Lessor shall have the right to recover Lessor's damages from Lessee, except as provided in Paragraph 8.6.
9.5 Damage Neer End 01 Term. If at any time during the last 6 months of this Lease there is damage lor which the costlo
repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following
the date 01 occurrence 01 such damage by giving a written termination notice to Lessee within 30 days after the date of occurrence of
such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance
proceeds (or adequate assurance thereof) needed to make the repairs on or belore the earlier of (i) the date which is 10 days aHer
Lessee's receipt of Lessor's written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option
expIres. II Lessee duly exercises such option during such period and provides Lessor with funds (or adequate assurance thereol) to
cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon as
reasonably possible and this Lease shall continue in lull force and effect. If Lessee lails to exercise such option and provide such lunds
or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee's option shall
be extmguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event 01 Premises Partial Damage or Premises Total Destruction or a Hazardous Substance
Cond:lion for which Lessee is not responsible under this Lease, the Rent payable by Lessee lor the period required lor the repair,
remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired,
but not to exceed the proceeds received Irom the Rental Value insurance. All other obligations of Lessee hereunder shall be pertormed
by Lessee, and Lessor shalf have no liability lor any such damage, deslruction, remediation, repair or restoration except as provided
herein.
(b) Remedies. \I Lessor shall be obligated to repair or reslore the Premises and does not commence, in a substanlial
and meaninglul way, such repair or restoration within gO days aHer such obligalion shall accrue. Lessee may, at any time prior to the
commencoment 01 such repair or restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, 01
Lessee's election to terminate this Lease on a data nolless than 60 days following the giving of such notice. If Lessee gives such nolico
and such repair or restoration is nol commenced wilhin 30 days thereaHer, lhis Lease shall terminate as of the date specilied in said
nollce. If lhe repair or restoration is commenced within such 30 days, this Lease shall continue in full force and eftect .Commence-
shall mean either the unconditional authorization of the preparation 01 the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
,9.7 Termlnetlon; Advance Payments. Upon termination 01 this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an
equitable adjustment shall be made concerning advance Sase Rent and any other advance payments made by Lessee to Lessor.
Lessor shall, in addition, return lo Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by
Lessor.
9.6 Waive Statutes. Lessor and Lessee agree that the termS of this Lease shall govern the eHect of any damage 10 or
InItialS
~998.AIR Commercial Aeal Estate Alloclatlon
PAGE 8
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FORM MTG-4-5/04
destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any present or lulure statute
to the extent inconsistent herewith.
, O. Real Property Texeo.
10.1 Definitions.
(a> "Real Property Taxes." As used herein, the term "Real Property Taxes" shall include any torm 01 assessment: real
estate, general, special, ordinary or extraordinary, or rental levy or tax (other than Inheritance, peraonaJ Income or estate taxes);
improvement bond; andlor license fee imposed upon or levied against any legal or equitable Interest of Lessor in the Project, Lessor's
right to other income therefrom. andlor Lessor's business of leasing, by any authority having the direct or Indirect power to tax and where
Ihe funds are generated with relerence to the Project address and where the proceeds so generated are to be applied by the city, county
or other local taxing authority of a jurisdiction within which the Project is located. The term .Real Property Taxes. shall also include any
lax, foe. levy, assessmenl or charge, or any increase therein: (i) imposed by reason of events occurring during lhe term of Ihls Lease,
including bul not limited to, a change in the ownership of the Project. (ii) a change in the improvemenls thereon, andlor (iii) levied or
assessed on maChinery or equipment provided by Lessor to Lessee pursuant to this Lease.
(b) "Base Raal Property Taxes," As used herein. the term "Baso Real Property Taxea" shall be the amount 01 Real
Property Taxes, which are assessed against the Premises, Building. Project or Common Areas in the calendar year durtng which tha
Leaso is executed, In calculating Real Proparty Taxes for any calendar year. the Real Property Taxes for any real estale tax year shall
be included in the calculation of Real Property Taxes for such calendar year based upon the number of days which such calendar year
and tax year have in common.
10.2 Payment 01 Taxes. Except as otherwisa provided in Paragraph 10.3, Lessor shall pay the Real Property Taxes
applicable to the Project, and said paymants shall ba included in the calculation of Common Area Oparating Expenses in accordance
with the provisions of Paragraph 4.2.
10.3 Additional Improvements. Common Area Operating Expenses shall not include Real Property Taxes specified in the
tax assessor's records and work sheets al being caused by additionallmprovemenls placed upon the Project by other lessees or by
lessor lor the exclusive enjoyment 01 such other less88s. Notwithstanding Paragraph 10.2 hereol, Lessee shall, however, pay to lessor
at lhe time Common Area Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if
assessed solely by reason 01 Alterations, Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee's
request or by reason of any alterations or improvements to the Premises made by Lessor subsequent to the execution 01 this Lease by
the Parties.
10.4 Joint Assessment If the Building is not separataly assessed, Raal Property Taxes allocated to the Building shall be an
equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations assigned in the assessor's work sheets or such other information
as may be reasonably available. Lessor's reasonable determination thereof, in good faith, shall be conclusive.
10.5 Personal Property Taxes. Lessea shall pay prior to delinquency all taxas assessad against and levied upon Lessee
Owned Alterations and Utility Installations, Trade Fixtures. fumishings, equipment and all personal property of Lessee contained in the
Premises. When possible, Lessee shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings.
equipmenl and all other personal property to be assessed and billed separately Irom the real property of Lessor. II any 01 Lessee's said
property shall be assessed with Lessor's real property, Lessee shall pay Lessor the taxes attributable to Lessee's property within 10
days alter receipt of a written statement setting fonh the taxes applicable to Lessee's property.
11. Utllltles and Services. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and
services supplied to the Premises, together with any taxes thereon. Notwithstanding the provisions of Paragraph 4.2. it at any time in
Lessor's sole judgment, Lessor determines that Lessee is using a disproportionate amount of water, electricity or other commonly
metered utilities. or that Lessee is generating such a large volume of trash as to require an increase in the size of the trash receptacle
andlor an increase in the number of times per month that It is emptied, then Lessor may increase LasHe's Base Rent by an amount
equallo such Increased costs. There shall be no abatement of Rent and Lessor shall not be liable in any respect whatsoever for the
inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute, breakdown, accident, repair
or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of law assign, transler, mortgage or encumber (collectively, "assign or
assignment") or sublet all or any part of Lessee's interest in this Lease or in the Premises without Lt~ssor's prior written consent.
(b) Un~ess Lessee is a corporation and its stock is publicly traded on a national stock exchange, a change in the conlrol
of Lessee shall constitute an assignment requinng consent. The transler. on a cumulative basis, of 25% or more of the voting control
01 Lessee shall constitute a change in control for this purpose.
(c) The involvement 01 Lessee or its assets in any transaction, or series of transactions (by way of merger, sale,
acquisitIon, financing, transfer, leveraged buy.out or otherwise), whether or not a formal assignment or hypothecation ollhis Lease or
Lessee's assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such
Net Worth as it was represented at the time of the execution of this Lease or at the time of the most recent assignment to which Lessor
has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is
greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean
the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles.
(d) An assignment or subiening without consant shall. at Lessor's option, be a Default curable aHer notice per Paragraph
, 3.1 (c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved
assignment or subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase
the monthly Base Rent to 1100;.. of the Base Rent then In sHeet. Further, in the event of such Breach and rental adjustment, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be subject to similar adjustment to 110"1. of the price
previously in eNect. and (ii) all fixed and non-II xed rental adjustments scheduled during the remainder 01 the Lease term shall be
increased to 11 0% 01 the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages andlor
Injunctive relief.
(I) Lessor may reasonably withhoid consent to a proposed assignment or subletting II Lessee is in Delault at the lime
consenl is requested.
(g) Notwithstanding the foregoing, allowing a diminimus portion of the Premisas, ie. 20 square feet or less, to be used by
a third party vendor in conneclion wilh the installation 01 a vending machine or payphone shall not conslilute a sublening.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless ot Lessor's consenl, no assignment or subletting shall: (i) be e<<ective without the express wrinen
assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations
hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the pertormance 01 any other obligations to be
pertormed by Lessee.
(b) Lessor may accept Rent or pertormance of Lessee's obligations from any person other than Lessee pending approval
or disapproval 01 an assignment. Neither a delay in the approval or disapproval 01 such assignment nor the acceplance 01 Rent or
pertormance shall constitute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach,
(e) Lessor's consont to any assignment or subletting shall not constitute consent to any subsequent assignment or
suble~lng,
(d) In the event 01 any Delault or Breach by Lessee, Lessor may proceed direcUy against Lessee, any Guarantors or
anyone eise responsible for the pertormance of Lessee's obligations under this Lease. including any assignee or sublessee, without first
exhausling Lessor's remedies against any other person or antity responsible therefore to Lessor, or any security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by inlormation relevant to
lnil;a:s
PAGE 9
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FORM MTG-4.,/04
lP1996-AIA Commercial Real Estate Association
Lessor's determlnalion as to the linancial and operational r.sponsibililY and approprialen.ss ollhe proposed ass'gnee or sublessee,
including bul nol limlt.d 10 the In,.nded ua. and/or r.quired modilication 01 th. pr.mle.s, il any, log.thar w,th a lee 01 $500 as
consid.ral,on lor L.ssor's consid.ring and proc.ssing said r.queal. L..... agr... 10 provid. L.ssor wilh such olh.r or add",oncl
lnlormalion and/or documentation as may be Isa&onably requested. (See also Paragraph 36)
(I) Any a.sign.. 01, or sublas..e und.r, this L.as. shall. by reason 01 accepting such assignm.nt, .nt.ring inlo such
sublease, or .nte,,"g inlo possession 01 the Premises or any portion th.r.o" b. d..m.d to hov. a.sum.d and agr..d 10 conlorm and
comply wilh each and every I.rm, cov.nant, condilion and obligation her.,n to b. obs.rved or perform.d by L.sse. dunng th. term 01
said aSSlgnm.nl or subl.a.., oth.r than such obligations as are contrary to or ,"cons is lent with provisions 01 an asslgnm.nt or subi.ase
to which Lessor has specifiCaily consenl.d to in writing.
(g) L.ssor's consent to any assignm.nl or sublening shall not transl.r 10 th. assignee or subl.ssee any Option granled
to the original Lessee by this L.as. unl.ss such transler is sp.cilically cons.nt.d to by L.ssor in writing. (See Paragraph 39,2)
'2.3 Additional Terma and Conditions Applicable to Subletting. The !ollowlng terms and conditions shall apply 10 any
sublenihg by Lessee 01 all or any part 01 the Pr.mises and ahall b. de.m.d includ.d in all subl.ases under this Lease whether or not
expressly incorporated therein:
(a) Less.. hereby .ssigns and transfers to Lessor all 01 Lessee's interest in all Rent payable on any sublease, and Lessor
may coll.ct such R.nt and apply sam. toward L.ss.e's obligations under this L.as.; provided. however, that unlil a Breach shall occur
in lhe performance of Le...... obligation., Le...e may collect said R.nt. In the avent that the ...mount cO:I,;ctad ..ry Lessor ,;..::a&ds
Lesse.'s then outstanding obligations any such .xc.ss shall be r.lunded to Leasee. L.s.or .hall not, by r.ason olth. loregolng or any
assignment 01 such subl.as., nor by r.ason olth. coll.Clion of Rent, be de.m.d liable to the sublessee lor any leilure 01 Lessee to
perform and comply with any 01 Lesse.'s obligations to such sub Ie.'... L..see hereby irrevocably authorizes and dir.cts any such
subiessee. upon receipt 01 a written notic. Irom Lessor stating that a Breach .xlsl. in the performance 01 L.ss..'s obiigalionS under
Ih,. Lease, to pay to L..sor all R.nl due and to become due und.r the .ubl..se. Suble.... shall rely upon any such notice Irom Lessor
and shall pay all Rents to L.ssor without any obligation or right to inquire as to wh.th.r .uch Br.ach .xisl., notwithstanding any claim
lrom Lessee to the contrary.
(b) In the .vent 01 a Bre.ch by Lessee, Lessor may. at its option, require sublessee to attorn to Lessor. in whIch evenl
Lessor shall undertake th. obligation. 01 the sublessor und.r .uch subl.as. Irom the time of the ex.rcise 01 said option to ths expiralion
01 such .ublease; provid.d, how.v.r, Lessor .hall not b. liable lor any prepaid r.nts or s.curity d.posit paid by such sublesse. to such
sublessor or lor any prior Defaults or Breaches of such sublessor.
(c) Any matter requiring th. consent 01 the subl.s.or under a sublease shall also require the consent 01 Lessor.
(d) No sublessee shall further assign or sublet all or any part 01 the Premi.e. without Lessor's prior written cons.nt.
(e) Lessor shall deliv.r a copy 01 any notice of Delault or Breach by Lesse.to the sub less.., who shall have the right to
cure the Delault 01 Lessee within the grace period. if any. sp.cified in such notic.. The sublessee shall have a right 01 reimbursement
and ollsetlrom and against Lessee lor any such Delaulls cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "D.fault" is defined as a lailure by the Lessee to comply with or perform any of the terms, covenants,
conditions or Rules and Reguiations und.r this L.ase. A "Br.ach" i. defined as the occurrence of one or more 01 the loilowlng Delaulls,
and the laiiure 01 L.ssee to cure such Delault within any applicable grace period:
(a) The abandonment 01 the Premises; or the vacating 01 the Pr.mises without providing a commercially reasonable level
01 security, or wh.r. the cov.rage 01 the property in.urance d.scrib.d in Paragraph 8.3 is jeopardized as a r..ult th.reol, or without
pro.....iding reasonable assurances to minimize potential vandalism.
(b) Th. failure 01 L.s...to make any payment of Rent or any Security Deposil required to be made by Lesse. hereunder,
whether to Lessor or to a third party, when du.. to provide r.a.onable evld.ncs olln.uranc. or .ur.ty bond, or to fulfill any obligation
under Ihis Lea.. which endange.. or threalens life or property, where such laliure continue. for a period 01 3 business days lollowing
wntten notice to Lessee.
(c) The commission 01 waste, act or acts constituting public or private nuisance, and/or an illegal aclivity on the Premises
by Le~see, where such actions continue lor a period 01 3 busin.ss days foilowing written notice to Le.see.
(d) The failur. by L.s,.. to provide (i) reasonable written evidence 01 complianc. with Applicable Requirements, (ii) Ihe
seNice contracts. (i1i) the rescission 01 an unauthorized assignment or subl.tting. (iv) a,\ Estoppel Certificate, (v) a requested
subordinalion, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requ~sted under Paragraph 41, (viii) material
dala safely she.t. (MSDS). or (ix) any other documentalion or inlormation which Lessor may reasonably require of Lessee under Ihe
terms 01 this Lease. where any such lailure continue. for a period 0110 days following written notice to Lessee.
, (e) A D.lault by Less.e as to the terms, covenants, conditions or provi.ions 01 this Lease. or of the rules adopted under
Paragraph 2.9 hereol. other than those described in subparagraph. 13.1(a). (b), (c) or (d), above, where such Delault contInues lor a
period 01 30 days aher written notlc.: provided, howev.r, Ihal if the nature 01 Lessee's Delault is such that more than 30 days are
reasonably required for its cure, th.n it shall not be d.emed to be a Breach if Lessee comm.nces such cure within said 30 day period
and lhereaher diligently prosecut.s such cure to compietion,
(I) Th. occurrence 01 any 01 thelollowing events: (i) the making 01 any general arrang.ment or a.signrnentlor the benelit
01 creditors; (ii) becoming a "debtor" as deltned in 11 U.S.C. ~ 101 or any succe.sor slatul. ther.to (unl.ss, in the case of a petition
!iled against L.sse., the same is dismissed within 60 day.); (iii) th. appointment 01 a trustee or receiver to take possession 01
subslanlially all 01 Less.e's assets located at the Pr.mises or of L.sse.'s inlerest in this Lease, where possession is nol r.stored 10
Less.. within 30 days; or (iv) the attachm.nt, ex.cution or oth.r judicial s.izure 01 .ub.tantially all 01 L.ssea's assets located at the
PremIses or of Lessee's interest in this Lease, where such seizure is not di.charged within 30 day.; provided, howev.r, in the .vent !C.al
any provision olthi. subparagraph is contrary to any applicable law, such prOVIsion shall be 01 no lorce or ellect, and not aMect the
validity of the remaining provisions.
(g) The discovery that any linancial stalement of Lessee or of any Guarantor giv.n to Lessor was materiaily laise,
(h) If the p.rformance 01 Lessee'. obligations under this Lea.e is guaranteed: (i) the death of a Guarantor. (ii) Ihe
termination 01 a Guaranlor's liability With respect to this L.ase other than in accordanc. with the terms of such guaranty, (iii) a
Guarantor's becoming insolvent or the subject of a bankruptcy liIing. (iv) a Guaranto(s r.lusalto honor the guaranty, or (v) a Guaranlor's
br.achol its guaranty obiigation on an anticipatory basi.. and Lesse.'s lailure, within 60 day.loilowlng written nolice of any such event,
to prOVide wnMn aiternative assurance or security, which, when coupled wilh th. lh.n .xisllng r..ources 01 Lessee, equals or .xce.ds
the combined financial resources 01 Lessee and the Guarantors that existod at the time of execution of Ihis Lease.
13.2 Remedle.. II Les..e lait. to perform any 01 its aMirmetive duties or obligations, within 10 days aher wrinen nollc. (or in
case 01 an emergency. without notice), Lessor may, at its option, perform such duty or obligation on Lessee's behall, including but nol
limIted 10 the obtaining 01 reasonably requited bonds, insurance policie., or gov.rnm.ntallic.n.e., permits or approvals. Lesse. shall
pay to Lessor an amount equal to 115% of the costs and .xp.n... incurred by L.ssor in such performance upon receipt 01 an invoice
therefor, In the .vent 01 a Br.ach, L.ssor may. with or without further notice or demand, and without limiting Lessor in the exercise 01
any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Les...'. right to pos.e.sion of the Pr.mi..s by any lawful means, in which case this Lease shall terminale
and Lessee shail immediately surrender possession to Les.or. In .uch event Lessor .hall b. .ntili.d to recover from L.ss.a: (i) Ih.
unpaid Rent which had b.en earned at the time 01 termination; (ii) the worth at the time 01 award of the amount by which the unpaid rent
which would have been eam.d aher termination until the time 01 award .xc..ds the amount of such renlalloss that the Lessee proves
could have been r.asonably avoided; (iii) the worth atth. time 01 award 01 the amount by which the unpaid rent lor the balenc. 01 'h.
lerm aher Ihe tim. 01 award .xceeds the amount of .uch r.ntallos.that the L.s... prove. could b. reasonably avoided; and (iv) any
olner amount necessary to compensate Lessor lor all the detrim.nt proximalely caused by the Less.e's failure 10 perform liS obligalions
undor this Lease or which in the ordInary course 01 things would b. likely to result th.refrom, Including but nollimit.d to the cost 01
recov.ring poss.ssion of the Premises, expenses of reletting. including necessary renovation and alteration 01 the Premises, reasonable
attorneys' lees, and that portion 01 any lea.ing commission paid by Le.sor in connection with this Lease applicable to the un.xpired term
~i"i;a~
1t199S.AIR Commercial Real E5tale Assoclatlon
PAGE 10
1L--
lmllals
FORM MTG-4.5/04
ollhis Lease. The wonh at lhe time of award of the amount rei erred to in provision (iii) 01 the immediately preceding senlence shall be
computed by discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are
localed 011110 lima of award plus one percont. Elforts by Lossor to mlUgale damages cau..d by Le...... Breach olll1ls Lease shall
not waive Lessor's right to recover damages under Paragraph 12. II terminaUon of this Lease Is obtained through the provisional remedy
or unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein.
or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph
13.1 was nol previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawlul detainer statute shall'
also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the
unlaVw'ful delainer statute shall run concurrenUy, and the failure of Lessee to cure the Default within the greater of the two such grace
periods shall constitute both an unlawful detainer and a Breach 01 this Lease entitling Lessor to the remedies provided for in this Lease
and/or by said slalule.
(b) Continue the Lease and Lessee's right 10 possession and recover the Rent as it becomes due, in which evenl Lessee
may sublet or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, andlor the appointment of a receiver
to protect the Lessor's interests, shall not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions o( the state wherein the
Premises are located. The expiration or termination of Ihis Lease ancllor lhe termination of tessee's right to possession shall nol relieve
Lessee Irom liability under any indemnity provisions of this Lease as to matters occurring or accNing during the tarm hereof or by reason
01 Lessee's occupancy 01 the Premises.
13.3 Inducement Recapture. Any agreement tor free or abated rent or other charges, or tor the giving or paying by Lessor
10 or lor Lessee of any cash or other bonus, inducement or consideration tor Leasee's entering into this Lease, all of which concessions
are hereinafter referred to aa "Inducement Provisions", shall be deemed conditioned \.Ipon Lessee's full and faithful perlormance of
a~1 ollhe terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall
aUlomatically be deemed deleted Irom this Lease and of no further force or eNect, and any rent, other charge, bonus, inducement or
consideration Iheratolore abated, given or paid by Lessor \.Inder such an Inducement Provision shall be immediately due and payable
by Lessee to Lessor, notwithstanding any subsequent cure 01 said Breach by Lessee. The acceptance by Lessor of rent or the cure of
the Breach which initiated the operation ot this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph
unless specifically so slated in writing by Lessor atlhe time of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee 01 Renl will cause Lessor to incur costs nol
contemplated by this Lease, the exact amount of which will be extremely difficull to ascertain. Such costs include. but are nOlllmited
to, processing and accounling charges. and lale charges which may be imposed upon Lessor by any Lender. Accordingly, if any Renl
shall not be received by Lessor within 5 days after such amount shall be due. then, wilhout any requiremenl for notice to Lessee. Lessee
shalllmmedialely pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $1 00, whichever is grealer. The
partios hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessor will incur by reason of such
lato paymenl. Accoptance 01 such late charge by Lessor shall in no event constitute a waiver of Lessee's Default or Breach with respect
to such overdue amount, nor prevent the exercise 01 any of the other rights and remedies granted hereunder. In the event that a late
charge is payable hereunder, whether or not collected, lor 3 consecutive installments of Base Rent, then notwithstanding any provision
01 this Lease to the contrary, Base Rent shall, at Lessor's option, become due and payable Quarterly in advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than lale charges, not received by Lessor, when due as
\0 scheduied paymenls (such as Base Renl) or wilhin 30 days foUowing lhe date on which it was due for non-scheduled payment, shail
bear inlerest from the datu when due, as to scheduled payments, or the 31st day after it was d\.le as to non-scheduled payments. The
interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate aUowed by law.
Interest is payable in addition to the potential late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. Lessor shall nol be deemed In breach 01 this Lease unless Lessor fails within a reasonable lime
10 perform an obligallon required 10 be performed by Lessor. For purposes of this Paragraph. a reasonable time shaU in no evenl be
less than 30 days alter receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such
purpose, of written notice specifying wherein such obligation of Lessor has not been perlormed; proviqed, however, lhat if the nature of
Lessor's obligation is such lhat more than 30 days are reasonably required for its performance. then Lessor shall not be in breach it
performance is commenced within such 30 day periOd and thereafter diligently pursued 10 completion.
(b) Perlormance by Lessee on Behalf 01 Lessor. In the event that neither Lessor nor Lender cures said breach wilhin
30 days alter receipl of said notice, or il having commenced said cure lhey do not diligently pursue it to completion. then Lessee may
elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to per10rm such cure, provided
however, that such offset shall not exceed an amount equal to the greater of one month's 8ase Rent or the Security Deposil, reserving
Lessee's nght to reimbursement from Lessor for any such expense in excess of such oNset. Lessee shall document the cost of said
cure and supply said documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof are taken under the.power of eminent domain or sold under the threat of
the exercise 01 s.aid power (collectively "Condemnatlon"), this Lease shall terminate as to the part taken as of the date the condemning
authonty takes title or possession, whichever first occurs. It more than 100/. of the floor area of the Unit. or more than 25% of Lessee's
Reserved Parking Spaces, is taken by Condemnation, Lessee may, at Lessee's option, to be exercised In writing within 10 days after
Lessor shall have given Lessee written notice of such taking (or in the absence at such notics, within 10 days after the condemning
aulhonty shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee
does not terminate lhis Lease in accordance with the lore going. lhis Lease shall remain in lull force and effect as .to the ponion of the
PremIses remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the PremIses caused by such
Condemna~jon. C?nde~nation awards andlor payments shall be the property of Lessor, whether such award shall be made as
compensatIon for dlminutlon in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that
Lessee shall be entitled to any compensation for Lessee's relocation expenses, loss of business goodwill andlorTrade Fixtures. without
regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility Installations
made to the Premises by Lessee. for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall
be entiUed to any and all compensation which is payable therefor. In the event that this Lease is not terminated by reason 01 the
Condemnation, Lessor shail repair any damage to Ihe Premises caused by such Condemnation.
~~ol'oos
15.1 Additional Commission. in addition to the payments owed pursuant to Paragraph 1.10 above, and unlesv.essor and
the Brokers otherwise agree in writing, Lessor agrees that (a) if Lessee exercises any Option, (b) if Lessee acq~e-irom Lessor any ~
fights to the Premises or other premises owned by Lessor and located within the Projact, (c) if Lessee r AiM in possession of the ,::>.1
Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is . sed, whether by agreement or
operation 01 an escalation clause herein, then, Lessor shall pay Brokers a fee in accorda I the schedule of the Brokers in effect
allhe time of the execution of this Lease.
15.2 Assumption of Obligations. Any buyer or transferee ssor's inlerest in lhis Lease shall be deemed to have
assumed Lessor's obiigation hereunder. Brokers shall be third eneliciaries of lhe provisions 01 Paragraphs 1.10, 15. 22 and 31.
II Lessor lails to pay to Brokers any amounts due as angjo okerage tees pertaining to this Lease when due, then such amounts shall
accrue Interest. In addition, if Lessor fails ~o p!YAnf'imounts to Lessee's Broker when due, Lessee's Broker may send written notj~e
to Lessor and Lessee 01 such faiiure a r-t8ssor fails to pay such amounts will1in 10 days alter said notice, Lessee shall pay said
monies 10 its Broker and offset mounts against Rent. In addition. Lessee's Broker shaU be deemed 10 be a Ihird pany beneficiary
01 any commission a~m nt entered into by andlor between Lessor and Lessor's Broker for the limited purpose of collecting any
brokerage lee eo':""
Representations and Indemnities 01 Broker Relationships. Lessee and Lessor each represenl and warrant to the
el r loa I i1l'laG-ila9-R<HIealiAgs--wito aA) perG&A;-l~<lf-GHiflllElf1ellleHftetHl'le-Brek-';HlnyJ-ilKonneetl()n-wit~ni~...e,
PAGE 11
3i=
IMlals
FORM MTG-4-S/04
InitIals
Q1998-AIR Commercial Rul Estate Association
a~~A&HhaA--6aiQ..flamed-B'ek&f6o-i~AttU~y-eOFftffli68ieR-ep..fjAde~I~A~OO"eeljel"t-hefeWit~ ~r
do each hOt_by agree to Indemnity. protect, defend and hold the orh II y or compensatJon or char~es
which may be claimed b an . 0 af s milar party by reason 01 any dealings or actions of the indemnifying
".....,..... _efl~atl<>Pfleys'-le........a.....abty-;fle.rre<t-with-T"peeHhereto.
, 6. Estoppel Certificates.
(a) Each Pany <as "Responding Party") shall within 10 days atter written nolice from the other Party (the "Requesting
Party") execute, acknowledge and dallllsr to the Requesting Party a slatement in writing in form similar to the then most current
"Estoppel Certlllcate" larm published by the AIR Commercial Real Estate Association. plus such additional inlormation, conlirmation
and/or stalemonts as may be reasonably requested by the Requosting Party.
(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the
Requesting Party may execute an Estoppel Certificate stating that: (i) the Lease is in full force and eHect without modilication except as
may be represented by the Requesting Party, (Ii) there are no uncured defaults in the Requesting Party's performance, and (iii) if Lessor
IS the Requesting Party, not more than one month's rent has been paid in advance. Prospective purchasers and encumbrancers may
rely upon the Requesting Party's Estoppel Certilicate, and the Responding Party shall be estopped from denYing the truth of the lacts
contained in said Certificate.
(c) 11 Lessor desires 10 finance, refinance. or sell the Premises, or any p~rt thereof, Lessee and all Guarantors shall
deliver lo any potential lender or purchaser designated by Lessor such financ:al slatdmsnts as may be raa:io~nal:ll~ rl3quired by ;;uch
lender or purchaser, including but not limited to Lessee's financial statements for the past 3 years. All such financial statements shall
be received by Lessor and such lender or purchaser in conlidence and shall be used only tor the purposes herein set forth.
17. Definition of Lea.or. The term "Lessor" as used herein shall mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's title or interest
in lhe Premises or this Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held
by Lessor. Except as provided in Paragraph 15, upon such transler or assignment and delivery of the Security Deposit. as aloresa.d.
the prior Lessor shall be relieved 01 all liability with respect to the obiigations andlor covenants under this Lease thereafter to be
perlorrned by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall
be bindIng only upon the Lessor as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as delermined by a court of competent jurisdiction, shall in no way
affect the validity of any other provision hereof.
19. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to
calendar days.
20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute personal obligations of Lessor, or its
partners, members, directors. officers or shareholders, and Lessee shall look to the Premises, and to no other assels of Lessor, for the
satisfaction of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members,
directors, otticers or shareholders, or any of their personal assets for such satisfaction.
21. Time or Essence. lime is of the essence With respect to the performance of all obligations to be performed or observed by the
Parties under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the Parties with respect to any
matter menlioned herein, and no omer prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee
each represents and warrants to the Brokers that it has made, and is relying solely upon, its own investigation as to the nature, quality,
character and linancial responsibility 01 the olher Party to this Lease and as to the use, nature, quality and character of the Premises.
Brokers have no responsibility wilh res peel thereto or with respect to any default or breach hereof by either Party. The liability (Including
court costs and anorneys' feas), of any Broker with respect to negotiation. execution, delivery or performance by either Lessor or Lessee
under this Lease or any amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant
to this Lease; provided, however, that the 10regOlng limitalion on each Broker's liability shall not be applicable to any gross negligence
or w.lllul misconduct of such Broker.
23. Notices.
23.1 Notice Requirements, All notices required or permined by this Lease or applicable law shall be in wriling and may be
delivered in person (by hand or by courier) or may be sent by regular. certified or registered mail or U.S. Postal Service Express Mall,
wilh postage prepaid, or by facsimile transmission, and shall be deemed suNicientiy given il served in a manner specilied in this
Paragraph 23. The addresses noted adjacenl to a Party's signature on this Lease s~all be that Party's address for delivery or mailing
01 nolices. Either Party may by wrinen nolice to the other specify a different add less for notice, except that upon Lessee's taking
possosslon 01 the Premises, the Premises shall constitute Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmined to such party or parties at such addresses as Lessor may from time to time hereaher designate in writing.
23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt requested, shall be deemed given on the dale
01 delivery shown on the receipt card, or il no delivery date is shown. the postmark thereon. If sent by regular mail the notice shall be
deemed given L.3 hours after the same is addressed as required herein and mailed with postage prepaid. Notices delivered by United
States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours aher delivery of the same to
the Postal Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone
con!lrrnation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery or mail. If notice
is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a
waiver 01 any olher term, covenant or condition hereof, or of any subsequent Delault or Breach by Lessee of the same or of any other
term, covenant or condition hereof. Lessor's consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining
of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce
the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default
or Breach by Lessee. Any paymenl by Lessee may be eccepted by Lessor on account of monies or damages due Lessor.
nolwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or
cond'lions shall be of no force or effect whatsoever unless specifically agreed to in writing by Lessor al or before the time of deposit of
such payment.
~.eles.re. negardi"lt'fhe-l'llttttre-el-e-fleal [.t,te Age~elaliofloh;~. ;",s;;;;;' ~
(a) When entering into a discussion with a real estate agent regarding a real estate transaction, a Lessor or L should -:::....> )
lrom the outset understand what type ot agency relationship or representation it has with the agent or agents in th saction. Lessor
and :"essee acknowledge being advised by the Brokers in this transaction, as follows:
(i) Lessor'$ Agent. A Lessor's agent under a listing agreement witlt the Lessor s the agent for the Lessor only.
A Lessor's agent or subagent has the following affirmative obligations: To the Lessor: A f;~ dUty 01 utmost care, integrity, honesty,
and loyalty in dealings with the Lessor. To the Lessee and the Lessor. a. Diligent e . rctfi 01 reasonable skills and care in penormance
01 ine agent's duties. b. A duty of honest and fair dealing and good faith. wty to disclose alllacts known to the agent matenally
affecting the value or desirability at the property that are not known within the diligent attention and observation of I the Parties. An
agent is not obligated to reveal to either Party any confid I nlormation obtained from the other Party which does not involve the
at1irmativa duties set forth above.
(Ii) Lessee's Agent. An a an agree to act as agent for the Lessee only. In these situations, the agent is not fhe
Lessor's agent, even if by agreeme agent may receive compensation for services rendered, either in full or in part from the Lessor.
An agenl acting only for a e has the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity.
honesty, and loyal. alings with the Lessee. To the Lessee and the Lessor. a. Diligenl exercise of reasonable skills and care in
penormance e agen!"s duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facls known to the agenl
m~ affecting .the valu~. or desirability of the. property that are not known to, or within the diligent anention and observation of. the
__.p~,..... f". d_""t ,. ,,~l obttgzrl.J t~ ....~Il~ <I11ler-Party-ll~nfideflfial-ifllormatlon-obtalfl8cHrom-lhe-<:>ther-Party-whletMloes-nOI
1f
PAGE 12
~
FORM MTG-4-5104
Inlllals
C199a-AIR Commercial Roal E.tate A'loclatlon
i"lJol.~ tne all;,M'lali.G d'"'ti~OlI JOt-fortl"r1lbo\-....
(iii) Agent Representing Both Lessor end Less... A real estate agent, either acting direcUy or through 0
associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the kno d and consent 1'l
01 both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligati both the Lessor and
the Lessee: a. A fiduciary duly of utmost care, integrity. honesty and loyalty in the dealings with eith ssor or the Lessee. b. Other
duties to the Lessor and the Lessee as stated above in subparagraphs (I) or (ii). In representi Lessor and Lessee. the agent may
not without the express permission of the respective Party, disclose to the other Pa~ e Lessor will accept rent in an amount Is&s
than that indicated in the listing or that the Lessee is willing to pay a higher At1Ilan that oHered. The above duties of the agen,t in a
real estate transaction do not relieve a Lessor or Lessee from the res I ity to protect their own interests. Lessor and Lessee should
carelully read all agreemenls to assurQ that they adequate I )t ess their understanding of the transaction. A real estate agent is a
person qualified to advise about real estate. It legal advise is desired, consull a competent professional.
(b) Brokers have no responsibili . respect to any defeult or breach hereof by either Party. The Parties agree that no
lawsuit or other legal proceeding invo' any breach of duty, error or omission relating 10 this Lease may be brought against Broker
more than one year after the ate and that the liability (including court costs and attomeys' fees), ot any Broker with 'espectto any
such lawsuit andlor I roceeding shall not exceed the fee received by such Broker pursuant to this Lease: provided, however, that
Ihe loregoin Ion on each Broker's liability shall not be applicable to any gross neglig'ence or willlul misconduct of such Broker.
Buye' and Seller agree to Identity to Brokers as "Confidential" any communication or information given Brokers that is
i.ere. B, s.ell-Pell) 10 llo .enhdential.
26, No Right To Hotdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiration or
terminauon ot this Lease. In the event that Lessee holds over, then the Base Aent shall be Incr....d to 150.;' of lhe B... Rent
applIcable immediately preceding the expiration or termination. Nothing contained herein shall be construed as consent by Lesso, to
any holdIng over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity.
28. Covenants and Conditions; Construction of Agreement. All provisions of this Lease to be observed or performed by Lessee
are both covenants and conditions. In construing this Lease, all headings and titles are lor the convenience of the Parties only and shall
not be considered a part 01 this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This
Lease shall not be construed as if prepared by one of the Parties, but rather according to its tair meaning as a whole, as if both Parties
had prepared it.
29. Binding ENect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and
assigns and be governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto
concerning this Lease shall be initiated in the county in which the Premises are located.
30. Subordination; Attornment; Non-Dlsturbance.
30.1 Subordination, This Lease and any Option granted hereby shall be SUbject and subordinate to any ground le.se,
mortgage, deed of trust, or other hypothecation or secunty device (collectively, "Security Device"), now or hereafter placed upon the
Premises, to any and all advances made on the security thereof, and to all renewals. modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together relerred to as "Lender") shell have no liability or obligation
to periorm any 01 the obligations of Lessor under this Lease. Any Lender may elect to have this Lease andlor any Oplion granted hereby
superior to the lien of its Security Device by giving written notice thereot to lessee, whereupon this Lease and such Options shall be
deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation thereot.
30.2 Attornment. In the event that Lessor translers title to the Premises, or the Premises are acquired by another upon the
foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non.disturbance
provls~ons of Paragraph 30.3. attorn to such new owner, and upon request, enter into a new lease, containing all of the terms and
proviSions of thiS Lease, with such new owner lor the remainder of the term hereof, or, at the election of the new owner, this Lease will
automatically become a new lease between Lessee and such new owner, and (ii) Lessor shaH thereafter be relieved 01 any lurther
obligations hereunder and such new owner shall assume all 01 Lessor's obligations, except that such new owner shall nol: (a) be liable
lor any act or omission of any prior lessor or with respect to events occurring prior to acquisition 01 ownership; (b) be subject to any
offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or
(d) be :.abie lor the return of any security deposit paid to any prior lessor.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee's
subordinatIon 01 this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (e "Non-Disturbance
Agreement") Irom the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises. Further, within 60 days after the execution 01 this Lease, Lessor shall use its commercially reasonable efforts
to obtain a Non-Disturbance Agreement from the holder of any pre.existing Security Device which is secured by the Premises. In the
event that Lessor is unabie to provide the Non-Disturbance Agreement wi,lllin said 60 days, then Lessee may, at Lessee's option, directly
contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement.
30.4 Sell-Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any lurther
documen~s; provided, however, that, upon written request from Lessor or a Lender In connection wilh a sale, financing or refinancing at
Ihe Premises, lessee and lessor shall execute such further writings as may be reasonably required to separately document any
suborolnation, attommenl and/or Non-Disturbance Agreement provided for herein.
31. Attorneys' Fees. II any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract
or eqL.::!Y, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorneys' feeS. Such feas may be awattied in the same suit or recovered in a separate suit, whether or
nol such action or proceeding Is purlued to decisIon or Judgment. The term. "pr.valllng Party" shall include, without limitation, a Party
or BrOKer who substantially obtains or defeats the relief sought, as the case may be, whether by compromise. settlement. Judgment, or
the abandonment by the other Party or Broker 01 its claim or defense. The attomeys' fees award shall not be computed in accordance
wi1J1 any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be
enlilled to attorneys' fees. costs and expenses incurred in the preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commencad In connection with such Default or resulting Breach .-4
($200 IS a reasonable minimum per occurrence for such services and consultation). !J&.E> APOENO\)J\ ~~ '..-/'
32. Lessor's Access; Showing PremIses; Repe-Irs. Lessor and Lessor's agents shall have the right to enter the Premises at any
lime, In the case 01 an emergency, and otherwise at reasonable times atter reasonable prior notice for the purpose of showing the same
lo pro~peclive purchasers, lenders, or ten~nts, and making such allaratlons, repairs, improvements or additions to the Premises as
Lesser may deem necessary or desirable and the erecting, using and maintaining of utilities, services. pipes and conduits through the
PremIses and/or other premises as long as there Is no material adverse effect on Lessee's use 01 the Premises. All such activities shall
be wiUlout abatement of rent or liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auc~on upon the Premises without Lesso,'s prior written
conse~t. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any ~me and ordinary "For Lease" signs during the last 6
months 01 the term hereol. Except for ordinary "For Sublease" signs which may be placed only on the Premises, Lessee shall not place
any Sign upon the Project without lessor's prior written consent. All signs must comply with all Applicable Requirements.
35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntal)' or other surrender of this Lease by
Lessee, the mutual termination or cancellation hereot, or a termination hereot by Lessor lor Breach by Lessee, shall automatically
lerminate any sublease or iesser estate in the Premises; provided, however, that Lessor may elect to continue anyone or all existing
sublenancies. Lessor's failure within 10 days loll owing any such event to elect to the conlrary by written notice to the holder of any such
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C1998.AIR Commorclal Re.IE,'l.lo A~.~rron 1:,.......
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lesser interest. shall constitute Lessor's election to have such event constitute the termination of such interest.
36. Con.ont.. Except ao otherwise provided herein. wherever in this Leese the consent 01 e Parly is required to an act by or lor the
olher Party, such consent shall not be unreasonably withheld or.deiayed. Lessor's actual reasonable costs and expenses (including but
not limIted to architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request
by Lessee for any Lessor consenl, inCluding but not limited to consents to an assignment, a subletting or the presence or use 01 a
Hazardous Substance, shall be paid by Lessee upon receipt of an Invoice and supporting documentation therefor, Lessor's consent to
any act. assignment or subletting shall not const,tute an acknowledgment that no Delaull or Breach by Lessee ollhis Lease exists, nor
shall such consent be deemed a waiver or any then existing Default or Breach, except as may be otherwise specifically stated in wnting
by Lessor at the time 01 ouch consent. The failure to opecify herein any particular condition to Lessor's consent shall not preclude the
Imposlllon by Lessor at tho time 01 consent 01 such furthor or other conditions.. are then re..onable with relerence to the particular
malter lor which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder
and reasonably requesls the reasons 'or such determination, the determining party shall furnish its reasons in writing and in reasonable
delail w,thin 10 businass days lollowing such request.
37. Guarantor.
37.1 Execution. The Guarantors, If any, shall each execute a guaranty In the form most recently published by the AIR
Commercial Real Estate Association. .
27.2 DefaulL It shall constitute 8 Default of the Lessee il any Guarantor fails ~r refuses, upon requeslltJ provide: (a) eo"idanc&
ollho execution of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case
01 a corporale Guaranlor, a cartilied copy of a resolul,on of its board of directors authorizing the making 01 such guaranty. (b) currenl
linancial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effecL
38. Culet possession. Subject to payment by Lessee 01 the Rent and performance 01 all 01 the covenants. conditions and provisions
on Lessee's part to be observed and perlormed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the
PremISes during the term hereof.
39. Options. If Lessee is granted an option, es delined below, then the following provisions shall apply.
39.1 Oellnltlon. "Option" shall mean: (a) the right to extend the term 01 or renew this Leasa or to extend or renew any lease
lhat Lessee has on other property of Lessor, (b) the right of first refusal or first offer to lease either the Premises or other property of
Lessor. (c) the right to purchase or the right of first relusalto purchase the Promises or other property 01 Lessor.
39.2 Options Personal To Orfglnal Lessee. Any Option granted to Lessee in this Leasa is personal to the original Lessee,
and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in tull possession
of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assignIng or subletting.
39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Oplion cannot
be exercised unless the prior Options have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option: (i) during the period commencing with the giving of any notice 01
Delault and continuing until said Default is cured, (ii) during the period of time any Rent is unpaId (without regard to whether notice
thereot is given Lessee), (iii) during the time Lessee is In Breach of this Lease. or (Iv) in the event that Lessee has been given 3 or more
notices 01 separate Default, whether or not the Dalaulls are cured, dunng the 12 month period immediately preceding the exercise 01
lhe Opllon.
(b) The period 01 time within which an Option may be axercised shall not be extended or enlarged by reaSOn 01 Lessee's
Inabilily to exercise an Option because 01 the provisions of Paragraph 3g.4(a).
(c) An Option shall terminate and be 01 no further lorce or effect, notwithstanding Lessee's due and timely exercise of the
Option, if, etter such exercise and prior to the commencement 01 the extended tarm or complellon of the purchase, (i) Lessee fails to
pay Rent lor a period 0130 days atter such Rent becomes due (without any necessity of Lessor to give notice thereol), or (ii) If Lessee
comm'ts a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does nol include the cost of guard
service or other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all
responsibility for the protection of the Premises, Lessee, its agents and invilees and their property trom the acls of third parties.
41. Reservations, Lessor reserves the right: (i) to grant, without the consant or joinder of Lessee, such easements, rights and
dedicalions thaI Lessor deems necessary, (ii) 10 cause the recordation 01 parcel maps and restrictions, and (iii) to creale and/or install
new ulllity raceways, so long as such easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably
interie.e with the use 01 the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to ettectuale
suc~ nghls.
42. Performance Under Protest. II at any time a dispute shall arise as to any amount or sum 01 money to be paid by one Party 10
the other under the provisions hereol, the Party against whom the obligation to pay the money is asserled shall have the right to make
payment .under protest" and such payment shall not be regarded as a voluntary payment and there shall survive the righl on the part
01 sa,d Party to institute suit for recovery of such sum. II II shall be adjudg~that there was no legal obligation on the pari of said Party
to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as it was not legally reQuired
to pay. A Party who does not initiate suit for the recovery of sums paid "under protest. within 6 months shall be deemed to have waived
its right to protest such payment.
43. Authority; Multiple Parties; Execution.
(a) II either Party hereto is a corporation, trust, limited liability company, partnership, or similar entity. each individual
execuling Ihis Lease on behall of such entity represents and warrants that he or she ispuly authonzed to execute and deliver Ihis Lease
on Its behall. Each Party shall, within 30 days after request, deliver to the other Party satisfactory evidence 01 such authority.
(b) If this Lease is executed by more than one person or entity as "Lessee", each such person or entity shall be joinlly
and severally liable hereunder. It is agreed that anyone of the named Lessees shall be empowered to exocute any amendment to this
Lease, or other document ancillary thereto and bind all 01 the named Lessees, and Lessor may rely on the same as il all 01 the named
Lessees had executed such document.
(c) This Lease may be executed by the Parties in counterparts, each ot which shall be deemed an original and all 01 which
logether shall constitute one and the same Inslrument.
44, Conflict. Any contlict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled
by the typewritten or handwritten provisions.
45. Offer. Preparation 01 this Lease by either party or their agent and submission 01 same to the other Parly shall not be deemed an
otier to leue to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto.
46. Amendmenta. This Lease may be_modified only In writing, signed by the Partie. in interest at the time ot the modification. As
long as they do not materially change Lessee's obligations hereunder, LeiS.. agree. to make such realionable non-monelary
InitialS
Cl998-A1R Commercial Real E5tate Association
PAGE 14
4=
FORM MT" .
_...._..........~_.._...- .
modilications to this Lease as may be reasonably required by a Lender in connection with the obtaining 01 normallinanclng or refinancing
of the Premises.
1; ....1 er af JWY, Trl.h-.::r"HE-PARiiEG-HERES:V V.'Al':C TIICIA fU:&P'C~TIVE: RICWTt TS TRUlrI::-6~~ UJ r,tJ".;\CTI~
PPlee~E:eINC UI\lS~1fItJS TilE: "RePEnT'" 9Fl.t.RIEIUS 9b1T ar llll~ A Q:Rttr1itlT
48. Medletlon and Arbitration of DIsputes. An Addendum raquiring the Mediation and/or the Arbitration 01 disputes between Ihe
Parties and/or Brokers arising out 01 this Lease 0 is [J:l is not attached to this Lease.
49. Americans with Disabilities Act. Since compliance with the Americans with Disabilities Act (ADA) is dependent upon Lessee's
specific use 01 the Premises, Lessor makes no warranty or representation as to whether or not the Premises comply with ADA or any
similar legislation. In the event that Lessee's use of the Premises requires modifications or additions to the Premises in order to be in
ADA compliance, Lessee agrees lo make any such necessary modifications and/or additions at Lessee's expense.
LESSOR AND LESSEE HAVE CAREFULLY REAO AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED
HEREiN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE
PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID
INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S
INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE
MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.
The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.
Execuled AI:
Loe. p,-"",')",)..~
0,\'1-10)
Execuled at:
on:
on:
By LESSOR:
\"orld P~_~a..-H,e. "
li~~~tY rnmr~ny
-----
By LESSEE:
Cdl~~ limited
"
~
r.i ty "f ~::m
~rn;::!rriinf"l
Tille; ~1ana
By:
By:
Name Prinled:
Name Punled;
nus:
By:
By:
Name Pnnted:
Name Prinled:
Tille; ,
Tllle:
Address.:
Address:
Tale phone; (
Telephone: (
Facsimile: (
FacsImile: (
Fodor.i ID No.
Federal"Q,t'lo.
BROKER:
BROKER:
AUn: Atln:
Title: Title:
Address', Mdress:
TelephOne: ( ) Telephone: ( )
FaCSimile: I Facsimile: ( )
Emad: Email:
Federal 10 No. FederallD No.
These torms are otten modified to meet changing requirements of law and needs of the Industry. Always write or call to make sure you are
uUlLzlng the mest current term: AIR COMMERCIAL REAL ESTATE ASSOCIATION, 700 South Flower Street, Suite 600, Los Angeles, CA 90017.
(213) o8H1m.
';J...':Y- ..~
f'.#~ tI~',,"'J.J'''''
~. ';1"':r~;o. ':.':/Ttg"l'e-..a. ~ E.J:"z.t: J..Jr\.'l;-oWft.
.~
RENT ADJUSTMENT(S)
STANDARD LEASE ADDENDUM
Dated
TI lnP 21 7.005
By and BetwedR (Le5,s~r~ {'Torld Plaza I LLC
(Lessee) City of San Bernardino
Address of Premises: 1535 HiRhland Avenue, Suite C
San Bernardino. California
ragraph 50
RENT ADJUSTMENTS:
The monthly rent for each month of the adjustment period(s) specified below shan be increased using the method(s) In<flCated below:
'leClc Method(s) to be Used and Fill in Appropriately)
L e..~t of U.;I,g Adjlutmcnl(J) (OSLAI
a, On (Fill in COLA Dales):
qent shan be adjusted by the change, If any, from the Base Month specified below, In the Consumer Price Index of the BlJ'eau of
S, tJepartment of Labor for (select one):O CPI W (Urban Wage Earners and Clerical Wol1cers) or 0 CPI U (All Urban Consumers
182.1984 = 1(0), herein referred to as .cpr,
b, The monthly rent payable In accordancelWill!;ar~ch "-',a, ol\l/is Addendun1 sh!1D be ed as foUews: the Base Rent set forth In paragraph
i of the attached Lease, shall be mullipfled by a fraction the numerator Of wIllen snaD be the CPI of calendar month 2 months prior to the month(s) specified in
ragraph A.La, abcve during which the adjustment Is 10 take effect. and the denominator of shall be the CPI of the calendar month which is 2 months prior to
~ect one): 0 the first month of the term of this Lease as set forth In paragraph 1.3 se Month1 or 0 (Fnl in Other .Base Month1:
. The sum so shaD conslitule the new monthly rent hereunder, but In no event, shaU any such
'II monthly rent be less than the rent payable ror the month Immediate l!eeding the rent adjustmenL
c. the CPI shan be transferred to any oCher goverrvnenlal department or bureau or agency or shaU be
;coolinued. then the Index most nearly the same as t PI shaI be used 10 make such calculation. In the event that the Parties cannot agree on such anemative
lex. then the matter shall be submitted for deci lo.lbe P.~n Arb~~lion ,6-~ioR iR. ]t~ordance with the then rutes of said Association and the decision
the arbitrators shall be blnding upon the P'! . s. The ~ ol-saIClA~itratiq;,shall be paid eq~ny by the Parties.
ent shall be adjusted to Ihe .Market Rental Value. of the property as follows:
t) r ~~, .. ,~, ,U ~ .,,:v, t~ ~~ct. Mo, ~d R,ntbl V.lvo Adju"'" "".1 O.te do~. it:.od ab>ve;-the-f'arties-shall-attempHQ"1lgree-upon-whaHhe nur-M~II
II.
Initials:
:YJ'
ti;"'"
RENT ADJUSTMENT(S)
Page 1 of 2
~ooo . American Industrial Real Estate Association
FORM RA.J~/OOe
,.. ~ .G a1~ent-dale:-l ( tl!'l' ~G n .e.,l-e8nnot-be"1'eaehed-withirrthirty-days;-the. ..
. (a), Lessor and Lessee shalllmtTMld'oately appolrC a mlAual/y acceptable app<ai~r or broker 10 lI$labfish the new MRV within I
"a.ssociated.costs will be split equaRy between \he Parties, or
(b) Bolh Lessor and Lessee shall each Immediately make a reasonable delennlnation o( the MRV and s
t;?' In accordance with the following provisions:
(i) Wrthln 15 days thereal'ler. Lessor and Lessee shall each selea an 0 appraiser or er ("Consul1ant" - check one) or their choice
e! .s In arbitrator. The two arbitralo~ so appointed shall immediately select a third mutually acceptable sultantto act as a third arbitrator.
(ii) The 3 arbitrators s.hall wit"in 30 lV." OIlhe JlRooif'ltmenl or I I(d arbitrator reach a decision as to whal the actual MRV for \he
mises is. and whether Lessor's or Lessee's submitleb MR\t"j~the ~osep ~relo. eclspn of a majority of \he arbitrators shall be binding on the Parties. The
mitled MRV which Is determined to be the closeslto lIle 3ClI/al-MfI" slJ3R useq oy the Parties.
(iii)If either or the Parties ral~ l04p' n 1rbCtratQ\ f.i\hin \he SIliCified 15 days, the arbitrator timely appointed by one o( \hem shall
log on the Parties.
such arbitration s.hall be paid by the party whose submitted MRV is not selected, ie. !he one that is NOT the closest
le actual MRV.
nding the foregoing, the new MRV s.hall not be less than the rent payable for the month Immediately preceding the renl adjustment.
pen the establishment or each New Market Rental Value:
1) the new MRV will be<:ome lhe new .Base Ren!" for the purpose of caleulating any further Adjustments, and
2)11'1. fir;)t m.:lnlk of eaeh Market Rental Valllllt'ml wll become the Moo 'Bex Month4cf-the ~Ul'Jlese ar ealotlialing BAY fuftAef.Adj\i&lmeAls.
lit. Fixed Rental Adjustment(s) (FRA)
. Base Rent shaD be Increased to the following amowlts on t"4 ~ seI. f~ ~
On (FIG In FRA Adjustment Date(s)): The NeY.I Ba~.....sIlaUpe:
Al1V1St " ?()()n $ 1,618.65
Al1VTSt " ?()()7 $ 1, 667.20
Al1E'J1St', ?()()R $ 1,717.20
Al1~1~<;I' 1, ?OOg $ 1,768.70
NOTICE:
U~less specified otherwise herein, notice or any such adJustmenls, ~r than Fixed Rental Adjustments, shall be made as specified In paragraph 23 of the
s
DROI(CR'3 fEC:
n,,, B,""c,~ ~1,411 ~ pa;d 6 8,~~.49' r" fe. ,ae:K adj~l.ojc..t apeciA~q abet' In l0ee4dai.... .AIII Jl8~a~~.
rE: These forms are onen modified to meet changing requirements 01 law and needs of the Industry. Always write or call to mak~ sure you are
lzlng the most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 S. Flower Street, Suite 600, Los Angeles, Calif. 90017
RENT ADJUSTMENT(S)
Page 20f2
Inilials:~
100 _ American Industrial Real Estate Association
FORM RA-3-i/OOE
t~1@
OPTION(S) TO EXTEND
ADDENDUM TO
STANDARD LEASE
Dated
,111nl' 21 20m
By and Between (Lessor) linrl cl Pl "7", TT r:
(Lessee) City nf ~"n Rl'rrllrninn
Property Address; 15'15 HighlRnd AVI'n111' ~l1itl' C
San Bernardino, California
Paragraph -5.l-
A,
OPTION(S) TO EXTEND:
"... c,,\l~~\
Lessor hereby grants to Lessee 1M option to extend the term of this Lease for ..L additional ..no. month period(s)
comm~ncinq when the prior term expires upon each and all of the following terms and conditions: <:.uC..\v.. 0('\-0_ ':.\..... \\
"'''- ~ "- ,?"--,,,,,q o( ""'l"',1 I, z.olO "" ~vl,\ ~I, 't..o\S'
(i) Lessee gives to Lessor. and Lessor actually receives on a date which is prior to the date that the option period would
commence (if exercised) by atleast--6-- and not more than...-1..2...- months, a written notice of the exercise of the option(s) to
extend this Lease for said additional term(s). time being of essence, If said notification of the exercise of said option(s) is (are) not
so given and received, the option(s) shall automatically expire: said .option(s) may (if more than one) only be exercised con-
secutively: ......
(ii) The provisions of paragraph 39, including the provision relating to default of Lessee set forth in paragraph 39.4 of th,s
Lease are conditions of this Option;
(iii) All of the terms and conditions of this Lease except where specifically modified by this option shall apply:
(iv) The monthly rent for each month of the option period shall be calculated as follows. using the method(s) indicated
below:
(Check MethOd(s) to be Used and Fill in Appropriately)
g
Cest eI-blviAg-AdjYStmem~QI.)
/~
/~ Ihe
monthly rent payable under paragraph 1.5 ("Base Rent") of the attached Lease shall be adjusted by t Flange. if any. from
the Base Month specified below, In the Consumer Price Index of the Bureau of Labor Statistic he U.S. Department of
Labor for (select one): 0 CPI W (Urban Wage Earners and Clerical Workers) or 0 CPI Urban Consumers). for (Fill in
Urban Area): ' All Items
(1982-1984 = 100). herein referred to as "C.P.I."
(a)
On (Fill in COL Adjustment Date(s):
(b) The monlhly rent payable in accordance with para AI(a) of this Addendum shall be calculated as follows:
Ihe Base Renl set forth in paragraph 1.5 of the attached Lease. s e multiplied by a fraction the numerator of which shall be the
C,P.1. of the calendar month 2 (two) months prior to the m s) specified in paregraph AI(a) above during which the adjustment
is to take effect. and the denominator of which sha he C.P.1. of the calendar month which is two (2) months prior to (select
one): 0 the first month of the term of this Lea s set forth In paragraph 1.3 ("Base Month") or 0 (Fill in Other "Base Month"):
, The su calculated shall constitute the new monthly rent hereunder, but in no event, shall any
such new monthly rent be less t e rent payable for the month immediately preceding the date for rent adjustment.
:;r
(c) vent the compilation and/or publication of the C.P.1. shali be transferred to any other governmental
department orb u or agency orshall be discontinued, then the Index most nearly the same as the C,RI. shall be used to make
such calc n. In the event that Lessor and Lesses oannot agree en such alternative Index, then the matter shall be submitted
for d Ion to the American Arbitration Association In accordance with the then rules of said association and the decision of the
la"S sRal1 Be BiAEliR~ ~flaR tAS flarli~El-Afl>ilfeleffi-SReIHlEl-flaid-eqttlllly-by-l~sOf-ef1d-l:eS5ee.
[]
II.
Markel Rentel Value AdJustment(s) (MRV)
(a) On (Fill in MRV Adjustm~nt Date(s): ()n rhl' fi T""t n~y nf th<> Alor mnnrh nf th<> T<>rm
Ihe monthly rent payable under paragraph 1.5 ("Base Rent") of Ihe attached Lease shall be adjusted to the "Market Rental Value"
01 the property as follows:
1) Four months prior to the Market Rental Value (MRV) Adjustment Dale(s) described above, Lessor and
Lessee shall meet to establish an agreed upon new MRV for the specified term. if agreement cannot be reached, then:
OPTION(S) TO EXTEND
Pogo 1 of 2
Initials:~
Initials:
NOTICE: These lorms 118 ollon modified 10 maet changing requIrements olllw and Industry needs. Always write Of callIe make sur. you are ulillzing (he mosl tvrrenllorm
American Indu$ltial Rill e,'alt Associallon, 345 Soulh FIgueroa Slreet, Suitt M.1, LOI Ang.I... CA 90071. (213) 587-8771. Felt No. (213) 687.8616.
('1991 Amarlc." IndulIrll1 RII' Eltlt. Alloclltlon.
i) Lessor and Lessee shall immediately appoint a mutually acceptable appraiser or broker to eslablish
e new MRV within the next 30 days. Any associated costs will be splil equally batween the parties, or
ii) Both Lessor and Lessee shall each immediately select and pay the appraiser or broker of their choice to
;tablish a MRV within the next30 days. It, for any reason, either one of the appraisals is not completed within the next30 days, as
ipulaled, then the appraisal that is completed at that time shall automatically become the new MRV. If both appraisals are
lmpleted and the two appraiserslbrokers cannot agree on a reasonable average MRV then they shalllmmedialely selecl a third
ulually acceptable appralsarlbroker \0 establish a third MRV within the next 30 days. The average of the 11'10 appraisals closest
value shall then become the new MRV, The cosls 01 the third appraisal will be split equally between the parties,
2) In any event, the new MRV shall not be less than the rent payable for the monlh immediately preceding
e dale for rent adjustment.
(b) Upon the establishment of each New Market Rental Value as described In paragraph All:
1) the monthly rental sum so calculated for each term as specified in paragraph AIi(a) will become the new
3ase Renl" for the purpose of calculating any further Cost of Living Adjustments as specified in paragraph AI(a) above and
2) the first month of each Market Rental Value term as specified in paragraph AII(a) shall become the new
3ase Month" for the purpose of calculaling any further Cost of living Adjustments as specified In paragraph AI(b),
3---+11.
rixed-flenlal-Adjtlstment{s}-{ FRA)
~
'he monthly rent payable under paragraph 1.5 ("Base Rent") of the attached Lease shall be increased
n the dales set forth below:
On (Fill in FRA Adjustment Date(s)):
j
3, NOTICE: Unless specified otherwise herein, notice of any escalations olher than Fixed Rental Adjustments shall be
nade as specified in paragraph 23 of the attached Lease,
.. DAOI(CR':J rCE:
The neal Celate Drallers 9~eeilied in paragral'h 1.10 of the altac!'led Leaso shali-M-l'"id " Drokerag~ ree lor-eech
adjtt5lmel'\l-9peelfied "oo.&-In aeeerdal1Ca Ni\h1Hlregre!'M15 el-lAe-ellaeRee lease.
D. FIXED RENTAL ADJUSTllENTS DURIN:; OPTION PERIODS:
Option 111:
Months
61=72
73-84
85-96
97-108
109-120
Neli' Base Rent Shall Be
l1arket Value Rent
Market Value Rent x 1.03 (Year 2)
Year 2 x 1.03
Year 3 x 1.03
Year 4 x 1.03
Initials:
Initials: -p-
OPTION(S) TO EXTEND
PaO.2 of 2
HOT ICE: Th.... lorms. "' olten modlll.d \0 meet changing requirement. olllW and Indu.lry nuda. Alway. WIlle or call 10 mike lur. you .r. ulllJ.zlng Ihe mosl currenllOlm;
"mOflCI" lnt;lul11ial Au' EIlale Association, 345 South Figueroa SI,.,I, Sullt M.l, Los Anoelel. CA 90071. (213) 687.8777. Fu No. (213) 687.6618,
e'1001 Amorlean Industrial Rul Eatate Auoclatlon.
-'
..._--~-
ADDENDUM TO STANDARD INDUSTRIAL/CO~~ERCIAL
MULTI-TENANT LEASE -- GROSS
THIS ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT
LEASE __ GROSS ("Addendum") is entered into by and between WORLD
PLAZA, LLC, a california limited liability company ("Lessor"), and
the CITY OF SAN BERNARDINO ("Lessee"), effective this 21 day of
June 2005.
R E C I TAL 8
A. Lessor and Lessee are concurrently entering into a
Standard Industrial/commercial Multi-Lessee Lease -- Gross dated
June 21, 2005 ("Lease"), for the premises located at 1535 Highland
Avenue, suite C, San Bernardino, california ("premises").
B.
intended
forth in
Addendum
Addendum
The terms, covenants, and conditions set forth herein are
to and shall have the same force and effect as if set
the Lease. To the extent that the provisions of this
are inconsistent with any provisions of the Lease, this
shall supersede and control.
NOW, THEREFORE, Lessor and Lessee hereby agree as follows:
52. All Base Rent, cornman area operating expenses, late
charges, interest and other payments required to be made by Lessee
under the Lease shall constitute rent ("Rent") under this Lease for
purposes of section 1951 of the California civil Code and all other
applicable law.
53. LESSOR IS LEASING THE PREMISES TO LESSEE IN AN "AS-IS"
CONDITION. LESSEE HAS OCCUPIED THE PREMISES PRIOR TO COMMENCEMENT
OF THIS LEASE AND IS TOTALLY AWARE OF THE CONDITION OF THE
PREMISES. LESSOR MAKES NO REPRESENTATIONS TO LESSEE REGARDING
LESSEE'S INTENDED USE OF THE PREMISES. LESSEE SHALL BE SOLELY
RESPONSIBLE TO OBTAIN ALL PERMITS NECESSARY FOR HIS INTENDED USE OF
THE PREMISES. ANY DELAYS IN LESSEE'S OPENING' SHALL NOT AFFECT THE
COMMENCEMENT DATE FOR PAYMENT OF RENT. LESSEE, AT ITS SOLE COST,
SUBJECT TO_REQUIRED APPROVAL BY LESSOR, SHALL BE RESPONSIBLE TO
SATISFY ALL CITY, ,COUNTY, STATE AND FEDERAL REGULATIONS AND
REQUIREMENTS RELATING TO LESSEE'S USE OF THE PREMISES. ANY
CONFLICT BETWEEN THIS PROVISION AND THE PROVISIONS OF THE PRINTED
LEASE SHALL BE RESOLVED IN FAVOR OF THIS PROVISION.
54. Lessee shall immediately give written notice to Lessor of
(i) any water damage to the Premises and any suspected seepage,
pooling, dampness or other condition conducive to the production of
mold; or (ii) any mustiness or other odors that might indicate the
presence of mold in the Premises.
(VORLO,ACOl
1
. .
55. Notwithstanding the provision in Section 9.1, Premises
Partial Da~age shall not include damage to windows, doors, and/or
other similar items which Lessee has the responsibility to repair
or replace pursuant to the provisions of Paragraph 7.1.
56. There shall be no abatement of Rent and Lessor shall not
be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to
riot, strike, labor dispute, breakdown, accident, repair or other
cause beyond Lessor's reasonable control or in cooperation with
governmental request or directions.
57. In addition to the provisions of section 13.1, the
commission of waste, act or acts constituting public or private
nuisance, and/or an illegal activity on the Premises by Lessee,
where such actions continue for a period of 3 business days
following written notice to Lessee shall constitute a Breach.
58. This Lease may be executed by the Parties in
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
59. Americans with Disabilities Act. Since compliance with
the Americans with Disabilities Act (ADA) is dependent upon
Lessee's specific use of the Premises, Lessor makes no warranty or
representation as to whether or not the Premises comply with ADA or
any similar legislation. In the event that Lessee's use of the
Premises requires modifications or additions to the Premises in
order to be in ADA compliance, Lessee agrees to make any such
necessary modifications and/or additions at Lessee's expense.
IN WITNESS WHEREOF, Lessor and Lessee have executed this
Addendum as of the date first set forth above.
AGREED AND ACCEPTED
LESSOR:
LESSEE:
CITY OF SAN BERNARDINO
By:
(\lOR LO . ADO 1
2
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** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
M,"ing 0", (0", Adotd), rD ' l; , ~ Item # 1- ~ R"olution #
Vote: Ayes Nays if?-. Abstain
Change to motion to amend original documents 0 Companion Resolutions
'~ -- 2'7 7-
c/ui[)S~ /7 '7
Absent
NullNoid After:
days /
Note on Resolution of attachment stored separately: 0
Resolution # On Attachments: 0
PUBLISH 0 POST 0 RECORD W/COUNTY 0
0", S",tto M,yoc I P' 'i, 0 r- /"
'0 ,-- 0/
Date of Mayor's Signature: !. - .. :;; ~ " ,)
.(- ,"'-
Date of ClerklCDC Signature: I~>':::- - f{)' (
Date Memo/Letter Sent for Signature:
1st Reminder Letter Sent:
Date Returned:
2nd Reminder Letter Sent:
By:
r:;:r//"
Reso. Log Updated: ..,)LJ
Seal Impressed: fi,
Reso. # on Staff Report [;/
Not Returned: 0
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433, 10584, 10585, 12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234,655,92-389):
Copies Distributed to:
Animal Control 0 EDA 0
City Administrator ~ Facilities ~
City Attorney Finance
Code Compliance 0 Fire Department 0
Development Services 0 Human Resources 0
Others:
Yes
~
No By_
......----
No_ By_
NO~_
Yes
Yes
Yes
No_ By_
NoL'BY_
Yes
Information Services
o
~'
o
o
Parks & Recreation
Police Department
Public Services
Water Department
Notes:
I
, /
\/
/'
/
111 (V"'" 'C "
Date: \v' v -
Ready to File: _
Revised 12/18/03