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HomeMy WebLinkAbout15-Police Department . '. city OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Lee Dean. Chief of Po1ice Subject: Authorize Lease for PoHce Ccmmnity Service Office at 941 Kendall Drive Suite A&H. San Bernanli.no. CA 92407 Dept: Po1ice ORIGINAL Date: April 1. 1998 Synopsis of Previous Council action: May 15. 1989 -- Reso1.ution No. 89-155 authorizing the execution of an C1!:I.L"",nent with Stater Bros. Market. Inc. to 1ease certain real property f= the pl.acement of a 1eased trailer to be used as a PoHce Ccmmnity Service Office f= Area "D". Recommended motion: lIdopt Reso1.ution Contact person: Chief Lee Dean Phone: 384-5607 Supporting data attached: Yes Ward: 'it-h W"Trl $1.00 per yr x 5 yrs Amount: $5.00 FUNDING REQUIREMENTS: Source: (Acct. No.) 001-213-5181 (Acct. DescriPtion)other Qperat~2 ~. Finance: ~ . //"'--- Council Notes: 1jtJ.D/9!- 75-0262 Agenda Item No. IS , . . CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT: Approval of Resolution for the Relocation of Area "B" Community Service Office. BACKGROUND: We currently have an opportunity to relocate the Area "B" Police Community Service Center, which will enhance the area command and provide an attractive, functional environment for department personnel and community members. The relocation of the facility will provide a permanent structure and bring Area "B" into alignment with the other area commands. Since 1984, the Police Department has adopted Community Oriented Policing and established area commands throughout the city. Currently there are five area commands, each having at least one Community Service Office. In December 1987, a study entitled "An Analysis of Community Oriented Policing in the City of San Bernardino" was conducted to determine the appropriate location for the community offices based on established criteria. The specific criteria included optimal visibility, adequate parking, central location within the area command, and convenience to the public. Currently, the Area "B" Community Service Office is located at 911 Kendall Drive in a leased trailer at the cost of$1 per year. The leased trailer occupies land leased from Stater Bros. Market, Inc. at the cost of $ I per year. The trailer lease has expired and the company the lease agreement was with no longer exists. Attempts to identify and locate an owner having a claim to the trailer have not been successful. The trailer is designed as a temporary office facility. The trailer has deteriorated creating a burden of repairs. Currently, the roofleaks, flooring is weak in specific areas, ceiling tiles are discolored, walls are in need of painting, and the access ramp for the physically challenged does not meet the American Disability Act specifications. The proposed relocation will move the Area "B" office from 911 Kendall Drive to 941 Kendall Drive Suite A&B. The new location complies with the site selection criteria as established in the December 1987 study. A lease agreement between the City and Stater Bros. Market, Inc. will provide the new location at a cost of $1 per year, for a term of five years with an additional five-year option. Taking advantage of this opportunity is more cost effective than making the necessary repairs to the current location. In order to bring the current facility within compliance of state and municipal codes, it will cost approximately $ 14,000. Making these repairs is only a temporary solution to a continual problem of deterioration and will not improve the exterior appearance or utility of the facility. In contrast, the new location provides the necessary space for expansion and provides for the professional image associated with the Police Department. The new location is of similar type and appearance as the other area command offices, which will establish consistency throughout the department. The selected location also provides a permanent location for a term of five to ten years. 75-0264 '. , . FINANCIAL IMPACT: Anticipated expense associated with the relocation is a one-time cost of $ 21,500 for tenant improvements. These funds are available through a modification of the city's 1997/98 Citizens Option for Public Safety (COPS) plan, approved by Mayor Valles on March 19, 1998. There is no significant change in the annual operating expense. RECOMMENDATION: Adopt the Resolution authorizing the execution ofa lease agreement with Stater Bros. Market, Inc. for the building space located at 941 Kendall Drive Suite A&B. Said agreement will cost $1 per year for the five-year term with a five-year option. The building space will become the Area "B" Police Community Service Office. A copy of the lease agreement including Exhibits "D" and "E", and the original site plans, Exhibit A, B, C, and Cl, will be maintained and filed at the Police Department, authorized per Senior Assistant City Attorney Robert Simmons. The original lease agreement including Exhibits "D" and "E" will be forwarded to the City Attorney for approval as to form and content and necessary action taken to have the lease authorized and signed. e1 2 9 10 11 12 e13 14 15 16 17 18 19 20 21 22 23 24 e 25 ~@~v RESOLUTION NO. 3 RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH STATER BROS. MARKETS, INC., FOR THE LEASE OF GROUND SPACE FOR THE AREA "B" COMMUNITY SERVICE OFFICE AND REPEALING RESOLUTION NO. 89-155, SECTION 2. 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 is 4 5 6 hereby authorized and directed to execute on behalf of said City and agreement with STATER BROS. MARKETS, INC., to lease ground 7 8 space for the Area liB" Police Community Service Office, a copy of which is attached hereto marked Exhibit "A" and incorporated herein by reference as though fully set forth at length. SECTION 2. Resolution No. 89-155, Section 2, is hereby repealed. SECTION 3. This resolution is rescinded if the parties to the agreement fail to execute it within sixty (60) days of the passage of this resolution. III III III III III III III III III III III III RP:bl 03/31/98 1--- e e e 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 day of , 1998, by the following vote, to wit: Council Members: AYES ESTRADA LIEN ARIAS SCHNETZ DEVLIN ANDERSON MILLER NAYS ABSTAIN ABSENT City Clerk The foregoing Resolution is hereby approved this day of , 1998. Approved as to form and legal content: JAMES F. PENMAN, City Attorney By: 7.~ Judith Valles, Mayor City of San Bernardino -2- e LEASE AGREEMENT BY AND BETWEEN STATER BROS. MARKETS, A CALIFORNIA CORPORATION ("LANDLORD") AND e CITY OF SAN BERNARDINO ("TENANT"') e DATED: M~12. 1998 e e e TABLE OF CONTENTS BASIC LEASE PROVISIONS 1 Effective Date Tenant Tenant's Trade Name Premises Address Premises Size Term Fixturing Period Commencement Fixed Minimum Rent Rental Adjustment Date Percentage Rate (for Percentage Rental) Initial Estimated Common Area Expenses Use of Premises Security Deposit Broker Addresses for Notices 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 OPERATIVE PROVISIONS 2 ARTICLE 1 Premises 1.1 Leased Premises 1.2 Construction of Improvements 1.3 Fixturing Period 1.4 Tenanfs Acceptance of Premises 1.5 Rental Commencement Date 1.6 Changes 1.7 Relocation 2 2 3 3 3 3 3 3a ARTICLE 2 Business Rights and Restrictions 2.1 Use 2.2 Environmental Restrictions 2.3 Use Restrictions 3 3 1 4 ARTICLE 3 Term 5 ARTICLE 4 Rent 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 5 5 5 5 5 6 6 6 7 Fixed Minimum Rent Percentage Rent Rental Adjustment Late Payments First Partial Month Gross Sales Records Audit e ARTICLE 5 Common Area 7 5.1 Definition 7 5.2 Use 7 5.3 Maintenance 7 5.4 Records 7 5.5 Tenant's Contribution 7 5.6 Operation and Control 8 5.7 Employee Parking 8 5.8 Obstruction 8 ARTICLE 6 Merchants Association 8 ARTICLE 7 Taxes 8 7.1 Personal Property Taxes 8 7.2 Real Property Taxes 9 ARTICLE 8 Utilities 9 e ARTICLE 9 Repairs and Alterations 9 9.1 Leasehold Improvements 9 9.2 Landlord's Repairs 10 9.3 Tenant's Repairs 10 9.4 Service Contracts 10 9.5 Alterations 10 ARTICLE 10 Insurance 11 10.1 Use, Rate 11 10.2 Liability Insurance 11 10.3 Worker's Compensation Insurance 11 10.4 Fire Insurance 11 10.5 Business Interruption Insurance 12 10.6 Waiver of Subrogation 12 10.7 General Requirements 12 10.8 Blanket Insurance 12 ARTICLE 11 Damage and Restoration 12 11.1 Duty to Restore 12 e 11.2 Election to Terminate 13 11.3 Rent Adjustment 13 ii e ARTICLE 12 Eminent Domain 13 12.1 Definition 13 12.2 Total Taking 13 12.3 Partial Taking 13 12.4 Termination Date 13 12.5 Repair and Restoration 14 12.6 Rent Adjustment 14 12.7 Award 14 ARTICLE 13 Indemnity, Waiver 14 13.1 Indemnity 14 13.2 Waiver 14 ARTICLE 14 Operation of Business 14 ARTICLE 15 Signs, Fixtures, Restrictions Regarding Exterior 15 15.1 Fixtures 15 e 15.2 Signs 15 ARTICLE 16 Liens 15 ARTICLE 17 Right Of Access 16 ARTICLE 18 limitation on Liability 16 ARTICLE 19 Assignment and Subletting 16 19.1 Consent Required 16 19.2 General Conditions 16 ARTICLE 20 Notices 17 ARTICLE 21 e Surrender of Possession 17 21.1 Surrender 17 21.2 Holding Over 17 iii e ARTICLE 22 Quiet Enjoyment 17 ARTICLE 23 Subordination 17 ARTICLE 24 Offset Statement 18 ARTICLE 25 Default 18 25.1 Notice and Remedies 18 25.2 Tenant's Property 18 25.3 Notice of Termination 18 25.4 Waiver of Notice - Performance by Landlord 19 25.5 Interest 19 25.6 Other Remedies 19 ARTICLE 26 Insolvency 19 e 26.1 Breach of Lease 19 26.2 Operation of Law 19 26.3 Non-Waiver 19 ARTICLE 27 Remedies Cumulative 20 ARTICLE 28 Management of Shopping Center - Coliection Charge 20 ARTICLE 29 Attorneys' Fees 20 ARTICLE 30 Waiver of Default 20 ARTICLE 31 No Partnership 20 ARTICLE 32 e Subtenancies 20 iv e ARTICLE 33 Successors 21 ARTICLE 34 Removal of Tenant's Property 21 ARTICLE 35 Effect of Conveyance 21 ARTICLE 36 Interpretation/Amendment 21 ARTICLE 37 Time of Essence 22 ARTICLE 38 Brokers 22 ARTICLE 39 e Corporate Resolutions 22 ARTICLE 40 Security Deposit 22 40.1 Deposits 22 40.2 Performance 22 ARTICLE 41 Option To Renew 23 Addendum To Lease Agreement 23a TABLE OF EXHIBITS Shopping Center Site Plan Landlord Improvement Specifications Sign Criteria Delivery Estoppel "An "B" "C" 'D" 'E" e tableallw v e e e SHOPPING CENTER SPACE LEASE THIS LEASE (Lease") is entered into as of the date set forth below by and between STATER BROS. MARKETS, a California corporation ('Landlord") and Tenant RECITALS This Lease is made and entered into with respect to the following facts: A. Landlord is the owner of the Premises (as hereinafter defined), or is the Tenant of the Premises pursuant to the terms of a Lease under which Landlord is entitled to Sublease the Premises to Tenant. B. Tenant desires to lease the Premises from Landlord. C. Landlord is willing to make certain improvements to the Premises as per Exhibit "CO & Exhibit "C-1" attached, and to lease the premises to Tenant upon the terms and conditions hereinafter set forth. NOW, THEREFORE, the Parties hereby agree as follows: BASIC LEASE PROVISIONS Effective Date: .................................................... March 12, 1998 Tenant: ............................................................... City of San Bemardino Tenanfs Trade Name: ....................................... San Bemardino Police Department Community Police Facility Premises Address: ............................................. 941 Kendall Drive, Suites "A" & "B", San Bemardino, CA 92407 County: ............................................................... San Bemardino Premises Size: ................................................... Approximately 2,177 net rentable square feet, consisting of approximately thirty-three feet eight inches (33' 8") of frontage and approximately sixty-four teet eight inches (64' 8") of depth. Term: .................................................................. Sixty (60) months, computed from the first day of the first calendar month on or after the Rental Commencement Date. The Rental Commencement Date shall be fixed in a Delivery Estoppel to be executed by Landlord and Tenant in the form attached hereto as Exhibit "E". (Calimesa, California) _ixed Minimum Rent: ........................................... ~ ~S /II I Dollars per year, payable in equal monthly installments of Zero (S /II I Dollars during the Term, subject to adjustment pursuant to Section 4.3. Rental Adjustment Date: ...................................... Not Applicable. Percentage Rate (for Percentage Rental): .............. $ Zero Percent ( //l %). Initial Estimated Common Area Expenses:.......... ~(S //l I per square foot of Premises Size per month, subject to adjustment pursuant to Section 5.5. Use Of Premises: ................................................. Community Police Facility. The Premises shall be used solely for the use stated above and for no other use or purpose. Security Deposit: .................................................. Zero IS //l I Broker:.................................................................. Not Applicable. Addresses For Notices: LANDLORD TENANT e STATER BROS. MARKETS Attn: Vice President Real Estate 21700 Barton Road (P.O. Box 150) Colton, CA 92324-0150 CITY OF SAN BERNARDINO Attention: Chief of Police 710 North "0" Street San Bemardino, CA 92401 These Basic Lease Provisions are intended to supplement and/or summarize the provisions set forth in the Operative Provisions of this Lease. If there is any conflict between any provisions contained in these Basic Lease Provisions and the Operative Provisions of this Lease, the Operative Provisions of this Lease shall control. OPERATIVE PROVISIONS ARTICLE 1 PREMISES 1.1 Leased Premises. Landlord hereby leases unto Tenant, and Tenant hereby leases from Landlord, those certain Premises (consisting of land and buildings and improvements) located as set forth in the Basic Lease Provisions (hereinafter referred to as the "Premises"). The Premises are outlined in red on Exhibit "B" attached hereto and made a part hereof. The Premises are part of the shopping center (hereinafter referred to as the "Shopping Center") described in EXHIBIT "A" attached hereto and made a part hereof. The Premises will consist of approximately the number of square feet set forth in the Basic Lease Provisions. e Page 2 of23 a 1.2 Construction of ImDrovements. Landlord shall improve the Premises io accordance wilh the plans and . specifications described io EXHIBIT "C'L which is attached hereto and iocorporated hereio by this reference. "5 Exhibit "C-l" 1.3 Fixturin2 Period. improvement obligations (hereioafter referred to as the "Completion Date") at least the e orth io the Basic Lease Provisions prior to the Completion Date (the "Fi' . encement"). After Landlord notifies Tenant of tbe Completion Dale, and requirements of Section 9.5 of this Lease, Tenant shall have tbe right to ente . purposes of equippiog and fixturiog the Premises, so long as sucb entry does not interfere . In tbe eventtbat Tenant enters the Premises prior to tbe Rental Commencement Date, as permitted by this paragrapb, all of the provisions of this Lease sball be io full force and effect except tbe rent provisions. 1.4 Tenant's AcceDtance of Premises. Withio five (5) days after Landlord bas notified Tenant that the improvements to the Premises have been substantially completed (whether or not Tenant is then in possession of the Premises as permitted io paragraph 1.3), Tenant shall deliver to Landlord a list of items that Tenant deems necessary for Landlord to complele or correct io order for the Premises to be acceptable. Landlord shall complete or correct each item contaioed io the list delivered by Tenant to Landlord otber than those which Landlord may contest. If Tenant fails to deliver the list to Landlord withio tbe five (5) day period described io this paragraph, Tenant shall be deemed to have accepted tbe Premises as beiog io a good and tenantable condition and sball be deemed to have approved the construction as baving been completed io a good and workmanlike fashion. In the event Tenant does deliver such list to Landlord within the five (5) day period described in this paragraph, Tenant shall be deemed to have approved tbe construction as baving been completed io a good and workmanlike fashion and shall be deemed to bave accepted the Premises as being in a good and tenantable condition with respect to all matters except those described io the list. e 1.5 Rental Commencement Date. The Rental Commencement Date sball be fixed io a Delivery Estoppel to be executed by Landlord and Tenant withio five (5) days after Landlord bas notified Tenant tbat the improvements to the Premises bave been substantially completed (whether or not Tenant is tben io possession of the Premises as permitted io paragrapb 1.3), and which shall be io tbe form attached bereto as Exhibit "E". In the event that Tenant fails to execute the Delivery Estoppel, the Rental Commencement Date shall be deemed to be tbe date upon which Landlord notifies Tenant that the improvements to the Premises have been substantially completed. 1.6 Chan2es. Landlord sball have tbe right, at any time, to change any or all of the following items so long as tbe change does not substantially interfere witb the iogress to and egress from tbe Premises or the flow of vehicular traffic in the Sbopping Center: (a) The location, io tbe Sboppiog Center, of tbe Building in whicb the Premises are located (but sucb change sball not be made following the completion of the Premises). (b) The location, in the Sbopping Center, of the Premises (but such change shall not be made following the completion of the Premises). ARTICLE 2 BUSINESS RIGlITS AND RESTRICTIONS r=;L c~, \ . I \ l ,~ (c) The plot plan of the Shoppiog Center. e 2.1 Use. Tenant shall bave the right to use tbe Premises for tbe use set forth in the Basic Lease Provisions. No otber use of tbe Premises shall be permitted. Nothing contained herein sball be deemed to give Tenant any exclusive rigbt to such use in the Sbopping Center. Tenant sball not use or occupy the Premises in violation of law or of the certificate of occupancy issued for the Building, and shall, upon written notice from Landlord, discontinue any use of the Premises which is declared by any governmental autbority baving jurisdiction to be a violation of law or of said certificate of occupancy. Tenant sball comply with any direction of any governmental autbority having jurisdiction whicb shall, by reason of the nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or Landlord witb respect ... ~ r ...., Ie 1.7 Relocation of Tenant. Landlord shall have the right at any time and from time to time, upon ninety (90) days prior written notice to Tenant, to relocate Tenant to other Premises (the "Relocation Premises") within the shop buildings, subject; however, to the following terms and conditions: A. The Relocation Premises shall have approximately the same rentable square footage as is contained in the Premises; B. The Relocation Premises shall be leased to Tenant on the same terms and conditions as provided in the Lease, except that if the rentable square footage in the Relocation Premises is more or less than that contained in the Premises, there shall be a proportionate adjustment of Base Rent, and Tenanfs share of the 'costs and expenses of operating and maintaining the Center Common Facilities," based upon the rentable square footage in the Relocation Premises; C. Landlord shall pay to Tenant expenses reasonably incurred by Tenant in the physical relocation of Tenanfs personal property, within thirty (30) days following receipt from Tenant of an itemized list of said expenses and copies of all invoices with proof of payment; and D. Landlord and Tenant, during said ninety (90) days period, shall mutually agree in writing upon; e (I) (ii) (iii) the scope and cost of all leasehold improvements to be constructed at the Relocation Premises, which shall be substantially similar to those of the original leased Premises, adjusted proportionately for size; the extent of Landlord's contribution to the cost thereof, if any, and; a timetable for their completion. Landlord and Tenant shall use best efforts and act in good faith to agree on the terms. If Landlord and Tenant cannot so agree, then in Landlord's reasonable discretion, Landlord may elect to either; (a) submit the dispute to binding arbitration for resolution, or (b) upon written notice to Tenant within thirty (30) days after the expiration of said ninety (90) day period, to terminate this Lease by thirty (30) days written notice. E. If Landlord elects to exercise its right of relocation, Tenant will be given the choice of spaces within the shopping center (See Exhibits "A" & "B" attached) that are available for tenancy and of comparable size. Tenant's choices would not include spaces occupied by other tenants or spaces on which a commitment had been made to another party. Also, Tenant's choices would be limited to only already completed buildings. relocalw e Page 3-a eto the Premises or with respect to the use or occupation thereof. Tenant sball not do or permit to be done anything which will invalidate or increase tbe cost of any fire, extended coverage or any otber insurance policy covering tbe Building Complex andlor property located therein and shall comply with all rules, orders, regulations, recommendations and requirements of tbe Pacific Fire Rating Bureau or any otber organization performing similar function. Tenant shall promptly, upon demand, reimburse Landlord for any additional premium cbarged for sucb policy by reason of Tenant's failure to comply with the provisions of this Article, but such reimbursement sball not be construed as curing Tenant's default for failing to comply with tbe provisions of this Article. Tenant sball not do or permit anything to be done in or about tbe Premises which will in any way obstruct or interfere with the rigbts of otber tenants or occupants of tbe Shopping Center, or injure or annoy tbem, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or abouttbe Premises. Tenant sball not commit or suffer to be committed any waste in or upon tbe Premises. e 2.2 Environmental Restrictions. Tenant shall not engage in any activity on or about the Premises tbat violates any Environmental Law, and shall promptly at Tenant's sole cost and expense, take all investigatory andlor remedial action reasonably required by Landlord or ordered or required by any governmental agency or Environmental Law for clean-up and removal of any contamination involving any Hazardous Material created, caused directly or indirectly or materially contributed to by Tenant. The term "Environmental Law" shall mean any federal, state or local law, statute, ordinance or regulation pertaining to health, industrial bygiene or the environmental conditions on, under or about the Premises, including witbout limitation, (i) tbe Comprebensive Environmental Response, Compensation and Liability Act of 1980. ("CERCLA "), 42 U.S.C. Sections 9601 et seq.; (ii) the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 et seq.; (iii) California Healtb and Safety Code Section 25100 et seq.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq.; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1151 et seq.; (vi) tbe Porter-Cologne Water Quality Control Act, California Water Code Section 13000 et seq.; and (vii) California Civil Code Section 3479 et seq., as such laws are amended and the regulations and administrative codes applicable thereto. The term "Hazardous Material" includes, without limitation, any material or substance whicb is (a) defined or listed as a "bazardous waste", "extremely bazardous waste", "restrictive hazardous waste" or "bazardous substance" or considered a waste, condition of pollution or nuisance under the Environmental Laws; (b) petroleum or a petroleum product or fraction thereof; (c) asbestos; andlor (d) substances known by the State of California to cause cancer andlor reproductive toxicity. It is the intent of the parties hereto to construe the term "Hazardous Materials" and Environmental Laws" in its broadest sense. Tenant shall provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tenant sball provide prompt written notice to Landlord of the existence of Hazardous Substances on tbe Premises and all notices of violation of tbe Environmental Laws received by Tenant. Tenant shall not bring onto, create or dispose of, in or about the Premises or the Project, including but not limited to its sewage or storm drain systems, any Hazardous Substances. Notwithstanding the foregoing, Tenant may utilize the Premises for the storage of Hazardous Substances which are reasonably and actually required in the normal operation of Tenant's business, so long as Landlord has not given Tenant written notice prohibiting the storage or use of the specific Hazardous Substance in question, provided that Tenant shall not store excess quantities of any Hazardous Substances in the Premises, and shall in no event store or warehouse quantities of Hazardous Substances in the Premises in excess of that amount which would be consumed or sold by Tenant's normal operations within sixty (60) days. All Hazardous Substances stored within the Premises sball be clearly labelled and adequately safeguarded so as to avoid any spill or release of such Hazardous Substances. 2.3 Use Restrictions. Tenant sball not be permitted to: (i) conduct any auction or bankruptcy sale; (ii) conduct any fire sale; (iii) conduct any closeout sale except at the expiration of tbe lease term; or, (iv) sell any so-alled "surplus", "Army and Navy" or "secondband" goods as those terms are generally used at this time and from time to time bereinafter, in, on or from tbe Premises. e ..."".. .1 ,..f'" e e e ARTICLE 3 TERM & Exhibit "C-l" I The Term sball commence wben Landlord bas subslllntially completed construction of the Premises and the Sbopping Center in whicb tbe Premises are located pursuant to the provisions of EXHIBIT "C" ,lor on tbe date upon which Tenant bas first opened for business from the Premises, whicbever event occurs first. The parties sball immediately execute a document in tbe form of Exhibit "E" to this Lease stating tbe date of commencement of the Term wben it bas been ascertained. The Term sball be as set forth in the Basic Lease Provisions. In the event tbat Landlord is unable to deliver possession of the Premises to Tenant within eigbteen (18) montbs following the execution of tbis Lease, this Lease shall automatically terminate and be of no furtber force or effect. ~~ / . { \ f \ \ i;,ij:,;,L itd\:' I \ ./ ,"--.......~ 4.1 Fixed Minimum Rent. Tenant sball pay a fixed minimum rent to Landlord at the address set forth for notices to Landlord, or at sucb other address as may be specified by Landlord, without prior demand, deduction or setoff during tbe term of this Lease. The fixed minimum rent sball be payable on or before the first day of eacb calendar montb during tbe term in tbe amount set fortb in the Basic Lease Provisions. ARTICLE 4 RENT 4.2 Percenta2e Rent. at the time and in tbe manner berein specified as percentage rental bereunder a sum equivalent to the a any, by which the percentage set fortb in tbe Basic Lease Provisions as tbe "Percentage Rent" of tbe r as defmed below) in any montb exceeds the fixed minimum rent payable during the same month. Within ten (10) days after the end of eacb calendar the term bereof, commencing witb the tenth (IOtb) day of tbe month following the commencement 0 as bereinabove provided), and ending with the tenth (IOtb) day of tbe montb next succeeding the last the lease term, Tenant sball furnisb to Landlord, at the place wbere rent is tben required to be paid e terms bereof, a statement in writing, certified by a duly authorized officer or representative 0 to be correct, sbowing tbe total gro.ss sales made in, upon or from the Premises during tbe prec' endar month, and sball accompany each such statement witb a payment to Landlord equal to the percentage . . . 4.3 Rental Adiu<tment. date set forth in tbe Basic !..ease Provisions as tbe rental adjustment date, as follows: The base for determining tbe adjustment sball be the Consumer Price rban Consumers, for the Los Angeles-Anaheim-Riverside Area (1982-84 = 100) publisbed by the' tes Department of Labor, Bureau of Labor Statistics (Index) whicb is publisbed for tbe calendar mo 3) months prior to the first full month of the lease term (Beginning Index). If tbe Index publisbed ~ ontb whicb is three (3) montbs prior to the adjustment date (Extension Index) bas increased over tbe . g Index, the fixed minimum rent for the following year (until the next rent adjustment) sball multiplying the fixed minimum rent for tbe initial full month of the term by a fraction, the nume w 'cb is tbe Extension Index and tbe denominator of whicb is the Beginning Index; provided, however, that Index sball be converted in accordance with tbe conversion factor publisb s epartment of Labor, Bureau of Labor Statistics. If tbe Index i urmg the term of this Lease, sucb otber government index or It IS replaced sball be used in order to obtain subslllntially the same result as would have' 4.4 Late Payments. Tenant bereby acknowledges that late payment by Tenant to Landlord of rent and other sums due bereunder will cause Landlord to incur costs not contemplated by this Lease, tbe exact amount of which will be _ ,. ~ _ t: ~ t' ...., _ extremely difficult to asceltain. Such costs include, but are not limited to, processing charges, accounting charges and late . charges Ihat may be imposed on or incurred by Landlord. Accordingly, if any Installment of rent or any other sum due from Tenant shall nol be received by Landlord or Landlord's designee within five (5) days after such amount shall be due, Ihen wilhout any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to ten percent (109<) of the amount which would otherwise be due. Addilionally, Tenanl sball pay to Landlord a charge of fifteen dollars ($15.00) for each check which is dishonored or returned by Tenant's bank for any reason. The parties hereby agree thai such cbarges for late payments and for dishonored cbecks represent a fair and reasonable eslimate of the cost Landlord will incur by reason of such occurrences. Acceptance of such cbarges shall in no event constitute a waiver of Tenanl's default witb respecllo such overdue or dishonored amounts, nor prevenl Landlord from exercising any of its rigbts and remedies granted hereunder. 4.5 First Partial Month. If the commencemenl date occurs on a day other Iban the firsl day of a calendar month: (a) Fixed minimum rent for the partial month sball be prorated, based upon a Ihirty (30) day month, and as so prorated shall be paid on the commencemenl date, in addition 10 the rental due for Ihe firsl full montb of the lerm. Lease, and the daily minimum rent provided in this minimum rent paid for t s a uct in addilion 10 in computing Ihe percentage rent payable for thai . 4.6 Gross Sales. (ii) The gross amount received or cbarged by Tenant for merchan pursuant to orders received by telepbone, mail, house-to- allributable 10 the Premises wbetber or nol filled elsewbe ,and, sold or services rendered or by other canvasing, and e (i) The entire amount cbarged for the full price al tbe time of tbe initial transact' mercbandise sold or delivered or services rendered by Tenanl whetber or not s actually received al the lime of sale; (iii) All gross income of Tenant from any operatio " ai, from or through the use of Ihe Premis\\S,. including, but nol limited to, sales made means of mechanical or olber vending machines localed in, at or on Ibe Premises. (b) There sball be excluded from gross ; or deducted Iberefrom if previously included: \ (i) tt allowed on merchandise returned by customers. (ii) (c) Tenant' as used in this paragraph includes tbe named Tenant and any agent, employee, or concessionaire of the named Tenant, or any otber person or firm conducting business in, ai, e 4.7 Records. concessionaires to keep and preserve, for a period of not less th!D three (3) years folio n 0 the original lerm of this Lease or any extension Ihereof, complete, acourat r s of all amounts received during eacb lease year in the Premises, inc1udin , cash register detail tapes. However, in Ihe case of a controversy between t centage rent payable hereunder, Tenant sball keep and preserve said records until tbe no;.ftf' f.. ,...,f!~ a. . . ., , ' bearing directly on Tenant's gross sales hereunder. In addi!" ord a copy of Tenant's California State Sal ys 0 owing the date on which such return is filed with the Franchise e e 4.8 Audit. transacted in the Premises, whether or not included in "gross sales'. If the audit dis ements for the period audited are inaccurate, adjustment shall be made imm . callon by Landlord. If the audit further discloses that Tenant has understated n y two percent (2 %) or more, Tenant shall immediately pay the cost of the a ogether with any amounts due Landlord as a result of such und~rstatement, whic.h amounts ARTICLE 5 COMMON AREA '\ i i / .f 5.1 Definition. The common area is that area within the Shopping Center which is neither occupied by buildings (excluding roof overhangs and canopies, columns supporting roof overhangs and canopies, and subsurface foundations) nor devoted permanently to the exclusive use of a particular Tenant, except that areas containing pylon signs and buildings or structures which are used with respect to the operation of the common area shall be deemed to be part of the common area. 5.2 Use. During the lease term, Tenant, its concessionaires, licensees, invitees, agents, customers and employees sball have the nonexclusive right to use the common area in common with Landlord, other owners of portions of the Sbopping Center, other lessees, and tbeir respective concessionaires, licensees, invitees, agents, customers and employees, subject to tbe provisions of this Lease. .' 5.3 Maintenance. Landlord shall be responsible for managing and maintaining all improvements on the common area in good and sanitary order, condition and repair, including making replacement where necessary, and in compliance with all governmental requirements, including, without limitation, (i) managing; (ii) cleaning and removing rubbish and dirt; (iii) providing labor, payroll !.aXes, materials and supplies; (iv) providing all utility services utilized in connection therewitb; (v) maintaining, repairing, replacing and providing reserves for replacement and remarking paved and unpaved surfaces, curbs, directional and other signs, landscaping, lighting facilities, drainage and otber similar items; (vi) providing casualty, public liability, property damage and otber insurance on tbe common area, (vii) providing tools, macbinery and equipment used in connection with the above, (viii) paying all real property and personal property !.aXes and assessmeots levied or imposed against the common area; and, (ix) paying any regulatory fee or surcharge or similar imposition imposed by governmental requirements based upon or measured by (a) tbe number of parking spaces, (b) the areas devoted to parking in the common area or (c) rents received by Landlord (excluding, however, any income tax payable by Landlord OD its income generally). :D-.Jl_.J ~I.Al l_ __l:.1,.,d ._ _ _____ _0- - . c--- L r . I I (;[1 , I1€IfRl flL J . f ,I 'j,J';L 'I I, II 11>.:, D'I. 5.4 Records. These records sball, u n rease ours at tbe offices of Landlord for 5.5 Tenant's Contribution. fixed minimum rent to Landlord, Tenant's pro rata share of the amount of all expenses doseri graph 5.3. Tenant's pro ratA share sball be equal to the ratio whicb Tenant's floor area bears to t r area in the Shopping Center, whetber or not then occupied. Tenant's monthly payment 0 . s all be based upon equal monthly installments which have been estimated in advance by Landlo articular calendar year. Landlord may, within sixty (60) days after the end of such year, or as soon r as may be practical, prepare an accounting of the actual common area expenses incurred during su , upon completion of any such accounting shall invoice Tenant, or allow as a credit against the c rea installments next due, as the case may be, the difference between Tenant's share of the actual ar:" expenses incurred during such year, and the amount actually paid by Tenant with respect to common ....,n... '7 ,..,f.,1 e possible, to an amount equal 'to ~ne-twelfth (1/12) of the actual c 'pat y Landlord to be encountered during the cu s are of common area expenses shall be the amount set forth in the 5.6 Oneration and Control. Landlord shall have general possession and control of the entire common area and may, from time to time, adopt rules and regulations pertaining to the use thereof. Landlord shall, except as otheJWise provided herein, operate and maintain the common area during the lease term. The manner in which the common area shall be operated and maintained and the expenditures therefor shall be in Landlord's sole discretion. Landlord reserves the right to appoint a substitute operator, including but not limited to, any Tenant in the Shopping Center, to carT)' out any and all of Landlord's rights and duties with respect to the common area as provided in this Lease; and Landlord'DliY enter into a contract either by a separate document or in a lease agreement with such operator on such terms and conditions and for such period as Landlord shall deem appropriate; and, if Landlord does so, the substitute operator, rather tban Landlord, shall be entitled to receive the management fee provided in paragraph 5.3. Except in the event that Tenant may, in the future, be appointed common area operator for the Shopping Center, Tenant shall have neither voice nor control in the operation and maintenance of either the common area or the Shopping Center as a whole, and shall, specifically, have no control with respect to the identity or type of business operated by future tenants to be located within the Shopping Center. Landlord specifically makes no representation with respect to the existence or continued operation of any business or any other tenant within the Shopping Center. e 5.7 Emnlovee Parkin!!. Landlord may designate what part of the common area, if any, shall be used for automobile parking by employees, lessees, occupants and licensees. No employee of any such lessee, occupant or licensee shall use any part of the common area for parking except such area or areas as may be so designated. Landlord shall be entitled to enforce this provision by requiring the payment by Tenant of such amount per automobile as may be determined to be appropriate by Landlord from time to time for each day per automobile for each day automobile driven by an employee of Tenant, Tenant's agent, occupant, concessionaire or licensee is found parked within the common area, but outside of the specified area. 5.8 Obstruction. No fence, wall, structure, division, rail or obstruction shall be placed, kept, permitted or maintained upon the common area or any part thereof by Tenant, nor shall the sale, display, advertising, promotion or storage of merchandise or any business activities of any kind whatsoever be conducted therein without Landlord's prior written consent; nor shall any penon use the common area for solicitations, demonstrations, or any other activities that would interfere with the conduct of business in the Shopping Center or which might tend to crearte c' . disorder or commotion. '.... , \ ~_l li';lil,-iL h~;.,~ ) " ARTICLE 6 l\1ERCHANTS ASSOCIATION Center, Tenant shall join and maintain membership in good standing in such n at Landlord or any of the otber tenants of the Shoppin Cen rm such a Merchants Association in the future, Tenant shall su s a do all things reasonably necessary in order to aid the formation of such Merchants ARTICLE 7 TAXES e 7.1 Personal Proneftv Taxes. Tenant shall pay, before delinquency, all license fees, public charges, property taxes and assessments on the furniture, fixtures, equipment, inventory and other property owned or being used by Tenant at any time situated on or installed in the Premises, together with all license fees, permit fees, assessments and other costs levied, assessed or imposed by law or ordinance upon Tenant or upon the business operated by Tenant, and shall, upon request, deliver proof of such payment to Landlord. _~~., (> _r.,., e e e 7.2 Real Prooertv Taxes. /.-.-. '." '. I \ \:""~ . any and all real property taxes and general or speci'al assessments and installments the 109 any tax on rent which is substituted in whole or in part for real propert essments and any license fee imposed by a local governmental body on the c . rent, and excluding federal and state income taxes) whicb sball, during the levied or assessed against an or any portion of the Premises or imposed on . Said real property taxes and assessments for tbe first and last lease years be a , if necessary, be prorated and apportioned between Landlord and Tenant to upon individual assessment valuations (or prorations) supplied by tbe County r other regulatory agency. Said prorations sball be conclusive upon botb a s the parties otherwise mutually agree in writing. In the absence of a prora . I by the County Assessor or other regulatory agency or a written agree e parties, Tenant's sbare shall be detemUned by multiplying the amount orth in tbe tax bill whicb includes the Premises by a fraction in whicb the r IS tbe floor area of Tenant's Premises and tbe denominator is the floor area of all cOlDlDencement of the term are cbanged so that a tax, assessment or excise on rents or uc tax, cbarge, or assessment, bowever described, is levied or assessed against a direct substitution in wbole or in part for any real property taxes, Tenant sball e oelinquency the substitute tax or excise on rents, but only to the extent that it can lOed tbatthere bas been a substitution and, as a result, Tenant bas been relieved fro yment of real property taxes tbat would otberwise have been obligated to pay. T are of any tax or excise on rent pursuant to this paragrapb shall be substanti me as, and as a substitute for, the payment of such real property taxes as provided in . and expense to contest the amount or legality of any said real property taxes ents on or attributable to tbe Premises, including the rigbt to apply for tbe r ereof, provided, however, Tenaet sball prosecute any sucb contest witb du ce and sball, fortbwith upon the final determination tbereof, pay tbe amoun . real property taxes and assessments on or attributable to tbe Premises as so det ogetber witb any interest, penalties, costs and charges which may be payable' Ion therewitb. Prior to any sucb contest, Tenant sball post sucb security or take other ARTICLE 8 UTILITIES Tenant sball arrange for all connection and bookup of, and sball pay, before delinquency, all cbarges for water, gas, heating, ventilation, air conditioning, electricity, power, telephone, I fl. ",,'in and other utility services used on or serving the Premises during the lease term. Nothing contained in this Wse shall limit Landlord in any way from granting or using easements on, across, over and under the Shopping Center for the purpose of providing utility services. ARTICLE 9 REPAIRS AND ALTERATIONS 9.1 Leasehold Imnrovemenls. Tenant, at its sole cost and expense, shall be responsible for decorating and providing any leasehold improvements which may be required by Tenant at the commencement of the term. Sucb r"\ i .. ,"c I \ HhTl;\L. ,jlr._ " _Ieasebold improvements sball be subject to the reasonable approval of Landlord, whicb approval sball be obtained in writing prior to the commencement of any construction. In no event sball Tenant make any cbange to the exterior appearance of the Premises, or any cbange to or openings in the structural portions of the Premises, including, but nllt limited to, bearing walls, roof and foundation, nor any penetration of tbe roof, unless Tenant sball bave first delivered to Landlord a complete engineering analysis of tbe effects of sucb cbanges to the Premises and sball bave received Landlord's express written consent to sucb cbanges. Within fifteen (IS) days following tbe completion of any improvements, Tenant sball deliver to Landlord a complete set of "as built" blueprints. Tenant's failure to obtain Landlord's written consent prior to the commencement of any improvements sball be deemed to be a material breacb of this Lease. 9.2 Landlord's Renni~. Landlord sball, at its own expense, keep in good condition and repair tbe roof (excluding ceilings), downspouts and rain gutters, foundations and structural portions of exterior bearing walls, but excluding any glass, windows, doors, skyligbts or other openings contained tberein. . 9.3 Tenant's Renai~. Except as expressly provided in paragrapb 9.2, Landlord sball not be obligated to make repairs, replacements or additions of any kind wbatsoever upon the exterior or interior of tbe Premises. The Premises, togetber witb any equipment, facilities or fixtures sball, at Tenant's sole expense, be kept, repaired, maintained, replaced or added to at all times by Tenant in good order and in sanitary and safe condition and repair and in accordance witb all governmental requirements and insurance requirements, specifically, including, but not limited to, all glass of the Premises (including but not limited to exterior plate glass) and the beating, ventilating arid air conditioning system. Tenant sball be expressly responsible for any maintenance or repairs required with respect to the utility lines, conduits or pipes serving the Premises, wbetber or not located in or on the Premises. Notwithstanding anytbing to tbe contrary contained berein, Landlord sball bave no obligation to repair any damage to tbe Premises caused by any negligent or intentional act 01' omission of Tenant, and Tenant sball be solely responsible for any sucb required maintenance or repair, including but not limited to leakage caused by tbe installation or maintenance of Tenant's equipment on tbe roof of tbe Premises. Tenant bereby waives any rigbt to make repairs to the Premises at Landlord's expense, wbetber pursuant to Sections 1941 and 1942 of the California Civil Code or otberwise. _ 9.4 Sen-ice Contracts. Landlord may, at Tenant's sole expense and at all times, keep in effect (i) a contract witb an independent air conditioning contractor for the maintenance of the air conditioning, beating and ventilation systems serving tbe Premises," ." . . located on tbe Premises, togetber with any related equipment and ,er system located on tbe Premises, and (iii a co or or e maintenance of any Landlord installed security system, ana' . Sbould Landlord elect to contract for any or all of tbese services Tenant sball promptly reimburse Landlord for tbe cost of sucb contracts, I.c 11 ',1. j" I" f ,I .~ !;ft__ r-' I tlf t'l) r II. . " on receipt of Landlord's invoice for tbe same, wbicb invoice shall be rendered by Landlord to Tenant not more often than monthly. Landlord sball bave tbe rigbt but not be obligated to commence any of these above service contracts upon 30 days notice to Tenant and may at any time amend cbange or cancel said contracts. 9.5 Alterations. Tenant sball not make any alterations to the Premises wbatsoever witbout Landlord's prior written consent, whicb sball be granted or denied in accordance with the provisions of paragrapb 9.1. Any alterations made by Tenant sball remain on and be surrendered with the Premises upon expiration or termination of this Lease, except that Landlord may elect, within ninety (90) days before expiration of tbe term, or within ten (10) days after expiration or tennination of tbe term, to require Tenant to remove alterations that Tenant bas made to tbe Premises. If Landlord so elects, Tenant, at its sole cost, sball restore the Premises to a tenantable condition, reasonable wear and tear excepted, before tbe last day of the term, or within thirty (30) days after notice of election is given, wbicbever is later. If Tenant makes any alterations to the Premises as provided in this paragrapb, the alterations sball not be commenced until fifteen (IS) days after Landlord bas received notice from Tenant stating the date the installation of tbe alterations is to commence so tbat Landlord can post and record an appropriate notice of nonresponsibility. _ e e e ARTICLE 10 INSURANCE /-~- :' ~;~\ I .. .... 1 \ .,. . e" . ".".. .'." ! '~/ 10.1 Use. Rate. TeDant shall Dot carry any stock or goods or do anything in, OD or about the Premises which will in any way increase insurance rates on the huilding in whicb the Premises are located. In DO event shall Tenant carry OD any activities which would invalidate any insurance coverage thereoD. TeDant shall pay on demand by Landlord any increase in insurance premiums that may be charged because of Tenant's vacating or otherwise failing to occupy tbe Premises, but this provisioD shall DOt be deemed to limit iD any respect Tenant's obligations under Article 14. 10.2 Liabilitv Insurance. (a) Tenant shall, at its sole cost and expense and at all times during the term of this Lease, or any extension thereof, maintain and carry for the joint benefit of Tenant and Landlord, bodily injury and property damage liability insurance by tbe terms of whicb Tenant and Landlord sball be indenmified against liability for any damage or injury to property or persoD (including death) occurring in, on or about the Premises, or any part thereof, or arising from the use or occupancy thereof, or arising directly or indirectly from any act or omissioD of Tenant, its employees, agents, concessioDaires, representatives, assigns, guests or liceDsees. Said liability insurance sball be in an amount of DOt less than One Million Dollars ($1,000,000.00) combined single limit, and Tenant shall maiDtaiD with Landlord at all times during tbe term of this Lease a curreDtly effective certificate of insurance satisfactory to Landlord from eacb insurance carrier providing such insurance coverage. (b) Landlord sball maintain a policy or policies of compreheDsive liability insurance issued by one or more insurance carriers, insuring against liability for injury to or deatb of persoDs and loss of or damage to property occurring in or OD the commOD area, except any portioD thereof subject to Tenant's exclusive -~. . . togetber witb Tenant's 0 e pa' m connection witb any cl~i.!" 10.3 Worker's ComDensation Insurance. in compliance witb a r s ,a I lty msurance with minimum coverage of Five 10.4 Fire Insurance. (a) Landlord sball pay for and sball maintain in full force and effect during the term of this Lease a policy or policies of insurance covering the buildiDgs located OD the Premises for the perils Dormally insured UDder the California Standard Fire Insurance Policy with extended coverage, vandalism and malicious mischief, and sprinkler leakage (if applicable) eDdorsements attacbed. The Landlord may maiDtain in lieu of the extended coverage and vandalism and malicious mischief endorsemeDts, otber broad form or all-risk endorsemeDts whicb may broadeD the perils insured against. In additioD, the Landlord may maintaiD flood and earthquake insurance coverage in its sole discretioD. The property coverage shall be in an amount equal to tbe full replacement cost (witbout deduction for depreciation) of tbe buildings insured. The policy may contain tbe standard form lender's loss payable endorsement issued to the bolder or bolders of a mortgage or deed of trust secured by the Premises. . premiums incurred by Landlord for sucb insurance within ten (10) da s 0 enant of Landlord's statement therefor. If sucb insurance cov m addition to Tenant's Premises, Tenant's sbare of the premiums s D e premium allocation made by the insurance carrier and, if the e sucb allocatioD, theD OD the basis whicb TeDant's floor area bears to the _ _ _, , 1 _l""'I" e e e '. / ! \ ""T'" "",l ; ~I policies of insurance covering Tenant's stock in trade, trade fixtu other personal property located in, on or about the Pre . e enant in connection with its business. Such covera e . n s normally insured under the California Standard Fire Insurance Policy 10.5 Business InterruDtion Insurance. full force and effect during the term of this Lease a policy of insurance in rent will be paid to Landlord for a period of not less than nine mlses are destroyed or rendered inaccessible by a risk insured a a' rd fire and extended coverage insurance, with vandalism and malicious mischief 10.6 Waiver of Subrol!ation. Each party ("insured") hereby waives its entire right of recovery against the other party, the other party's officers, directors, agents, representatives, employees, successors and assigns with respect to any loss or damage, including consequential loss or damage to the insured's property caused by or occasioned by any peril or perils (including negligent acts and willful misconduct) covered by any policy or policies carried by the insured. 10.7 General Reauirements. .(a) All policies of insurance required to be carried hereunder by Tenant shall be written by companies satisfactory to Landlord and licensed to do business in the State of California. (b) Each policy of public liability insurance required to be carried by Tenant shall be primary and noncontributing with any insurance carried by the Landlord. (c) Each policy required to be carried by Tenant shall expressly include, severally and not collectively, as additional named insured thereunder, Landlord and any person or firm designated by Landlord, as their respective interests may appear. (d) Each policy required to be carried by Tenant shall not be subject to cancellation or reduction in coverage, including cancellation for nonpayment of premiums, except upon at least thirty (30) days prior written notice to Landlord and each additional named insured. The policies of insurance required to be carried by Tenant, or duly executed certificates evidencing them, together with satisfactory evidence of the' payment of premiums thereon, shall be deposited with Landlord prior to the commencement of the term or prior to Tenant's initial entry to the Premises for fixturing or other activity to be carried on prior to the commencement of the term, whichever occurs first, and not less than thirty (30) days prior to the expiration of the term of such coverage. If Tenant fails to comply with this requirement, Landlord may obtain such insurance and keep it in effect, and Tenant shall pay to Landlord the premium cost thereof upon demand with interest at the highest lawful rate from the date of payment by Landlord to the date of repayment by Tenant. 10.8 Blanket Insurance. Landlord and, upon Landlord's written consent, Tenant, shall be entitled to fulfill its insurance obligations hereunder by maintaining a so-alled "blanket" policy or policies of insurance in such form as to provide by specific endorsement coverage not less than that which is required hereunder for the particular property or interest referred to herein. ARTICLE 11 DAMAGE AND RESTORATION 11.1 Dutv to Restore. If the improvements on the Premises or the Shopping Center are partially or totally damaged by fire or other casualty so as to become partially or totally untenantable, which damage is insured against under any policy of fire and extended coverage insurance then. covering the damaged improvements, this Lease shall not ....'1n.. 1" "(.,, A.erminale and said improvements shall be rebuill by Landlord with due diligence al Landlord's expense unless Landlord ~Iects 10 lerminale this Lease as provided in paragraph 11.2. 11.2 Election to Tenninate. If either the improvements on the Premises or the Shopping Cenler as a whole, are damaged by an insured casualty to the exlent of al leasl twenty. five percent (25 %) of their respective replacemenl cost (COSIIO repair or replace al the time of loss wilhout deduction for physical depreciation) during Ihe term of lhis Lease other Ihan during Ihe lasllhree (3) lease years of said lerm, or to Ihe exlenl of alleasl ten percent (10%) Ihereof during Ihe last Ihree (3) years of said lerm, or 10 any exlenl by an uninsured cause al any lime during Ihe lease lerm, or by an insured or uninsured cause during any exlension or renewal of Ihe lease lerm, Landlord shall, within nol more than ninely (90) days after such damage, nOlify Tenanl of Landlord's eleclion 10 terminale this Lease or 10 reslore Ihe improvements on the . Premises anll such portion of Ihe improvements in the balance of the Sbopping Cenler as in Landlord's sole discretion is necessary 10 create an economically feasible commercial unit. If Landlord elects 10 repair or reslore lhe damaged improvements, then with respecl to the Premises, Landlord and Tenant each shall restore them in the same manner and to Ihe same exlent as work was done by each of them in the original conslruclion and fixlUrizing of the Premises, and lhe damaged improvements in lbe balance of Ihe Sbopping Cenler shall likewise be reslored 10 Ihe extenl required in lhe preceding senlence. If Landlord elects not 10 reslore, as aforesaid, this Lease shalllerminate effeclive as of Ibe date of such damage upon Ihe giving of nolice of eleclion by Landlord as aforesaid. If Landlord elects 10 reslore or fails 10 give notice of its election as aforesaid, then this Lease shall remain in full force and effecl. .11.3 Rent Adiustment. If this Lease is nOllerminated as provided in this Article 11, Ihen during Ihe period of repair and resloralion, if and only to the exlenl thaI Tenanl's paymenl obligalions under lhis Lease would nOI be covered by rental interruplion or olher insurance required to be carried by Tenanl pursuanl to Ihe lerms of this Lease, Ihe fixed minimum renl shan be abaled by thaI proportion which the floor area rendered unusable as a resull of such damage bears 10 Tenanl's total floor area before such damage. In no evenl, however, shall Tenanl's share of common area expenses be abated unless Ihe common area expenses paid by each of the olher lenants located within the Sbopping Center are abaled by Landlord. e ARTICLE 12 EMINENT DOl\1AIN 12.1 Delinition. If there is any taking of or damage 10 all or any part of the Shopping Cenler or any inleresl Iherein because of lhe exercise of the power of eminent domain or inverse condemnalion, whether by condemnation proceedings or otherwise, or any transfer of any part thereof or any interesl therein made in avoidance or Ihreallhereof (an of Ihe foregoing being hereinafter referred 10 as "taking") before or during the lerm hereof, the rights and obligations of the parties with respect 10 such taking shall be as provided in lhis Article 12. 12.2 Total Takin2. If there is a taking of all of the Premises, this Lease shall lerminale as of Ihe date of such taking. 12.3 Partial Takin2. If twenty-five percent (25 %) or more of the floor area of Tenant's Premises shall be taken, either party shall be enlitled to terminate this Lease; or if twenty-five percent (25%) or more of the floor area of all buildings in the Shopping Cenler shall be taken, whether Tenanl's Premises are taken or nol, Landlord (but nOI Tenant) shall be enlilled to elect to lerminale this Lease; and the terminating party shall give the other party wrillen notice of such eleclion nol laler than lhirty (30) days after Ihe date Landlord delivers nolice to Tenant lhal possession of title to Ihe portion of the Premises taken has vested in Ihe condemnor. If neither party gives such notice or less Ihan twenty-five percenl (25 %) of Ihe floor area of either Tenant's Premises or buildings in the Shopping Center shall be taken, lhis Lease shall remain in full force and effecl and rent shall be adjusled as provided in paragraph 12.6. e 12.4 Tennination Date. If this Lease is terminated in accordance wilh Ihe provisions of this Article 12, such lermination shall become effeclive as of the date physical possession of the condemned portion is taken by the condemning aUlhority. ....<:1....,. l' "f"~ a 12.5 Renair and Restoration. If this Lease is nottermiDated as provided in this Article 12, Landlord may, at its ,., sole expeose, restore with due diligence the remainder of the improvements occupied by Tenant so far as practicable to a complete unit of like quality, character and condition as that which existed immediately prior to the taking, provided that the scope of the work shall not exceed the scope of the work to be done by Landlord originally in constructing the Premises, and further provided that Landlord shall not be obligated to expend an amount greater than tbat whicb was awarded to Landlord for such taking. 12.6 Rent Adiustment. If this Lease is not termiDated as provided in this Article 12, and until such time as Landlord may restore the Premises pursuant to this Article 12, the fixed minimum rent shall be adjusted by that proportion which the floor area taken from the Premises bears to Tenant's total floor area immediately before tbe taking. In no event, bowever, sball Tenant's sbare of common area expenses be abated unless the common area expenses paid by eacb of tbe other tenants located within the Shopping Center are abated hy Landlord. 12.7 A ward. Tbe entire award or compensation in sucb proceeding, wbetber for a total or partial taking or for diminution in the value nf the leasehold or for the fee shall belong to and be the property of Landlord, provided that Tenant sball be entitled to recover from the condemnor such compensation as may be separately awarded by the condemnor to Tenant or recoverable from the condemnor by Tenant in its own rigbt for tbe taking of trade fixtures and equipment owned by Tenant (meaning personal property, wbether or not attached to real property, whicb may be removed without injury to the Premises) and for the expense of removing and relocating sucb personal property. ARTICLE 13 INDEMNITY, W AlVER e 13.1 Indemnitv. Tenant shall defend, indemnify and shall save and hold Landlord harmless from and against any and all liens, claims, demands, actions, causes of action, obligations, penalties, charges, liability, damages, loss, cost or expeose, including reasonable attorneys' fees for the defense thereof, arising from or connected with (a) the conduct or management of the business conducted by Tenant on the Premises or any portion of the common area whicb is under the exclusive control of Tenant (tbe Premises and such portion of tbe common area which is under tbe exclusive control of Tenant being referred to as "Lessee's Premises" for purposes of this Article 13,) or (b) the use or occupancy of Tenant's Premises, or from any breach or default on the part of Tenant in the performance of any covenant or agreement on tbe part of Tenant to be performed pursuant to the terms of this Lease, or (c) from violations of or noncompliance with any governmental requirements or insurance requirements, or (d) from any acts or omissions (including, but not limited to, negligence or willful misconduct) of Tenant or any invitee, guest, agent, patron, license, vender, concessionaire or employee. 13.2 Waiver. All property kept, stored or maintained on Tenant's Premises shall be SO kept, stored or maintained at the sole risk of Tenant. Landlord shall not be liable and Tenant waives all claims against Landlord for damages to persons or property sustained by Tenant or by any other person or firm resulting from the building in wbicb the Premises are located or by reason of Tenant's Premises or any equipment located thereon becoming out of repair, or through the acts or omissions of any persons present in the Sbopping Ce~ter or renting or occupying any part of the Sbopping Center, or for loss or damage resulting to Tenant or its property from burst, stopped or leaking sewers, pipes, conduits or plumbing fixtures, or for interruption of any utility services, or from any failure of or defect in any electric line, circuit or facility or any other type of improvement or service on or furnisbed to Tenant's Premi~ it ~Iting from any accident in, on or about Tenant's Premises or the building in which the Premises are located. ( '\ ARTICLE 14 OPERATION OF BUSINESS Ij'nTiM !-i~;,::': e normal operating bours of similar businesses, but at 1 ad uatel mp oyees to handle the elg t ) hours a day; (ii) maximum business and carry sufficient stock of .....n.. 1.:1 ,.,f''''' (iv) keep the Premises and exterior and interior portions of windows, doors and all other glass or plate glass fixtures in a neat, clean, sanitary and safe condition; too) ..,..~.t..^''''.. rf""~i If ~.-iflt 1r8l1r (Ln. .iFii"lI..1in !Wi ';tlliRt ..tn.lis 18 aire, fir sail It filf.1ilJ (vi) use for office or other non-selling purposes only such space as is reasonably required for Tenant's business; (vii) refrain from burning any papers or refuse of any kind, or otherwise creating any noxious or offensive odors or fumes, in the Sbopping Center; (viii) store in the area designated by Landlord all trash and garbage in neat and clean containers so as not to be visible to members of tbe public shopping in the Shopping CeDtetl"~ 1H"11Il1' flf sIl. IJUlar ,illrur Adj . uti-A I If JtllA t ..k 1 11 l 0- 1 T .'- __p......... ..... __-FA_I. :- .1.._ "'_1"_)"___' -f ... I_A\.. r--.......I -j'.-.......... ..I-~:F..,_..1 ""r ,__..11.......1 :& , __..11__.:1 d.... it ~.....:_l..1.. .,.. 1....ua ..11 ........... _..._....:..,.. ____.._..a L.r --... "''''-'-''''':'TII (ix) observe and pr~mptly comply witb all governmental requirements and insurance requirements affecting the Premises or any part of the common area which is under Tenant's exclusive control and promulgated during the term of this Lease; (x) not use the Premises or suffer or permit the Premises or any part thereof to be used in any manner that will constitute a nuisance or unreasonable annoyance to tbe public, to other occupants of the Shopping Center or to the Landlord, or that will injure the reputation of the Shopping Center, or for any extra bazardous purpose, or in any manner that will impair the structural strengtb of tbe building of which the Premises are a part; and, (xi) keep sidewalks adjacent to the Premises clean and free from visible trash, papers, oil, gum and other debris. Tenant covenants and agrees not to install, use or to allow to be installed or used, upon the described Premises, any gaming machines or devices without the prior written consent of Landlord, including, but not limited to, video game machines. . SIGNS, F1XTURES, ~~C;;~;:ONS RE EXTERIOR ~ 15.1 Fixtures. All fixtures installed by Tenant sball be new or completely reconditioned. Tenant sball not make e or cause to be made any alterations, additions or improvements to the building, or install or erect or cause to be installed or erected any signs (including, but not limited to, exterior signs, window signs and signs painted on doors or windows), floor covering, exterior ligbting, plumbing, fixtures, sbades or awnings, radio or television antenna, satellite dish or similar devices, or make any cbanges to the store front or exterior of the building, nor shall tenant install any loud speakers, sound amplifiers or similar devices which would be beard in adjoining suites or outside Tenant's Premises without first obtaining Landlord's written approval and consent. Tenant sball present to Landlord plans and specifications for such work attbe time approval is sougbt. 15.2 Si2JlS Tenant will not place or suffer to be placed or maintained on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind and will not place or maintain any decoration, lettering or advertising matter on the glass of any window or door of the Premises, or install any sign or advertising material within 18 inches of a window (or in any location if installed in such a manner as to be primarily visible form the exterior of the Premises) without first obtaining Landlord's wrillen approval and consent. Tenant further agrees to maintain such sign, awning, canopy, decoration, lellering, advertising mailer or otber thing as may be approved in good condition and repair at all times. Tenant sball not place or suffer to be placed any merchandise, equipment or other items outside the building on the Premises. * ARTICLE 16 LIENS Tenant shall keep tbe Premises and the Shopping Center free of any liens or claims of lien arising from any work performed, material furnished or obligations incurred by Tenant in connection with tbe Premises. If Tenant disputes the correctness or validity of any claim of lien, Tenant shall, within ten (10) clays after written request by Landlord, record sucb bond as will release said property from the lien claimed. Tenant sball defend, indemnify and hold Landlord harmless from and against any all cost or expense, including but not limited to attorneys' fees. arising out of any lien or claim of lien on the Premises. e *Se.t: Ab~t:N~U~) PA-lif: ),3 a. ) PA-lUr~f,)," 6': ..(" _ r...... e ARTICLE 17 RIGHf OF ACCESS Landlord aDd its authorized agents aDd representatives shall be entitled to enter the Premises at all reasonable times for the purposes of: (i) inspecting them; (H) making repairs which Landlord is ohligated to make under this Lease; (Hi) curing a default of TenaDt; (iv) posting aDY notice permitted by law that would relieve Landlord from responsibility for the acts or omissions of TenaDt; (v) exhibiting the Premises to prospective buyers, lessees or lenders; aDd, (vi) posting ordinary signs advertising the Premises for sale or for lease during the last one hundred eighty (180) days of the term or any extended term hereof. ARTICLE 18 LIMITATION ON LIABILITY In consideration of the benefits accruing hereunder, TenaDt aDd all successors aDd assigns covenant aDd agree that, in the event of aDY actual or alleged failure, breach or default hereunder by Landlord: (a) TenaDt's sole aDd exclusive remedy shall be against Landlord's interest in the Shopping Center. (b) No partner, master lessor, officer, agent or employee of Landlord shall be sued or named as a party in aDY suit or action, or served with process, or required to answer or otherwise plead to any service of process, nor will any judgment be taken against any partner, master lessor, officer, agent or employee of Landlord. Any judgment taken against any partner, master lessor, officer, agent or employee of Landlord may be vacated and set aside at any time nunc pro tunc, and no writ of execution will ever be levied against the assets of any partner, master lessor, officer, agent or employee of Landlord. e (c) The covenants aDd agreements contained within this Article 18 shall inure to the benefit of and shall be enforceable by both Landlord and any partner, master lessor, officer, agent or employee of Landlord. ARTICLE 19 ASSIGNMENT AND SUBLETIING 19.1 Consent Reouired. Notwithstanding anything to the contrary contained herein, TenaDt shall not assign this Lease or any interest herein, or sublet, license, grant any concession or otherwise give permission to anyone olher than TenaDt to use or occupy all or any part of the Premises without the prior written consent of Landlord. The sale, assignment, transfer or disposition, whether for value, by operation of law, gift, will or intestacy of (i) twenty-five percent (25 %) or more of the issued and outstanding stock of Tenant if Tenant is a corporation; or, (ii) the interest of any general partner, joint veniure, association or co-tenancy shall be deemed an assignment of this Lease under this paragraph. Landlord and/or Landlord's agent shall be entitled to an application fee of Five Hundred Dollars (5500.00) be paid at the time of application for approval of any assignment or subletting as a condition precedent to the processing of any such request for Landlord's consent. Such fee is a processing fee only, however, and shall in no way obligate Landlord to consent to the requested assignment or sublease. e 19.2 General Conditions. In the event of any assignment of this Lease, Tenant shall remain primarily liable under this Lease. Such liability shall continue tbroughoutthe remaining term of this Lease, including any renewal terms, notwithstanding any subsequent or further assignment of this Lease, whether or not Tenant has consented to or approved such assignment. Nor shall such liability be extinguished or reduced by any later amendment or modification of this Lease, whether or not Tenant approves or consents to such amendment or modification. In the event of any assignment or sublease, the assignee or sublessee shall agree in writing to perform and to be bound by all of the covenants of this Lease required to be performed by Tenant. Landlord's approval of one assignment or subletting by Tenant of its inlerest in this Lease shall not be deemed to be an approval of any further assignment or subletting. .,. r...... e e e ARTICLE 20 NOTICES Whenever under this Lease provision is made for notice or demand, it shall he in writing and signed by or on behalf of the party giving the notice or making the demand and served by personal delivery, registered or certified mail or by telegraph. If served by registered or certified mail, it shall he deposited in the United States mail, postage prepaid, with return receipt requested, addressed to the party to whom such notice of demand is to he given at the address stated in the Basic Lease Provisions, as the case may he, and shall he conclusively deemed served on the date indicated on the return receipt and if the receipt is not returned, then fortyeight (48) hours after mailing. If served by telegraph, service to tbe addressee shall he conclusively deemed made as confirmed by the telegraphic agency making delivery. If served by personal delivery, service shall he deemed made as of actual delivery. The address of either party may be changed for the purpose ofthis paragraph by written notice to the other party. ARTICLE 21 SURRENDER OF POSSESSION 21.1 Surrender. At the expiration or other termination of this Lease, whether by lapse of time or otherwise, Tenant shall surrender the Premises as of such date broom clean and in good condition and repair, reasonable wear and tear excepted. 21.2 Holding Over. (a) If Tenant holds over after the expiration of the term hereof with the express consent of wdlord, such holding over shall, in the absence of a written agreement he deemed to have created a tenancy from month-to-month, terminable on thirty (30) days written notice by either party to the other, at a fixed minimum rental equal to two hundred percent (200%) of the fixed minimum rental in effect immediately prior to the expiration of the term, and at a percentage rental equal to two hundred percent (200%) of the percentage rental in effect immediately prior to the expiration of the term, and otherwise subject to all terms of this Lease. Nothing contained in this paragraph shall he construed as consent to such holding over by wdlord, (b) If Tenant fails to surrender the demised premises upon the termination of this Lease, Tenant shall defend, indemnify and shall hold Landlord free and harmless from loss or liability resulting from such failure, including, without limitation, the generality of the foregoing, any claims made by any succeeding tenant arising out of such failure to surrender the Premises. ARTICLE 22 QUIET ENJOYMENT Subject to the provisions of this Lease and conditioned upon performance of all of the provisions to he performed by Tenant hereunder, Landlord shall secure to Teoant during the lease term the quiet and peaceful possession of the Premises and all rights and privileges appertaining thereto. ARTICLE 23 SUBORDINATION Tenant agrees that this Lease, at Landlord's option, shall he subordinate to: (a) any first and junior mortgages or first and junior trust deeds that may hereafter he placed upon the Premises and to any advances to he made thereunder, any interest thereon and all renewals, replacements and extensions thereof, provided that such mortgagees or beneficiaries first request such subordination and thereafter agree in writing to recognize this Lease in the event of foreclosure if Tenant is .... r.... eot in default, (b) OJJ.Y so-alled sale and leaseback of the Shopping Center by Landlord, and (c) any: (i) parking lot agreement, (ii) common area maintenance agreement, (iii) declaration of covenants, conditions and restrictions, or (iv) similar agreement affecting the overall operation of the Shopping Center or its parking or common area (the general category of documents described in this sub-section (c) being referred to as "CC&R's"), together with any fuNre amendment or modification to any CC&R's. Tenant shaJl, within five (5) days following written request from Landlord, execute and deliver, without cost to Landlord, whatever instruments may be required to effect such subordination. ARTICLE 24 OFFSET STATEMENT TenOJJ.t sball, at any time and from time to time within five (5) days after wrillen request therefor by Landlord, deliver witbout cost to Landlord a certificate to Landlord or to any proposed mortgagee, trust deed beneficiary; purcbaser or successor in interest, certifying the commencement and expiration date of tbe lease term and tbatthis Lease is then in fuJl force and effect and selling forth the amount and naNre of the modifications, defenses or offsets, if any, claimed by Tenant, together with sucb other information as may be reasonably requested by Landlord. If Tenant fails to deliver such certificate within said five (5) day period, Tenant herehy appoints Landlord as Tenant's allorney-in-fact for the purpose of completing, executing and delivering the certificate to the person or firm requesting it. ARTICLE 25 DEFAULT e 25.1 Notice and Remedies. 10 the event of Tenant's failure to pay rent or to perform any of Tenant's other obligations under this Lease, or any part hereof, when due or caJled for hereunder, Tenant sbaJl bave a period of five (S) days after service of wrillen notice by Landlord specifying the nature of Tenant's default within whicb to cure such defaults, provided that if the naNre of a non-monetary default is sucb that it cannot be fully cured within said five (5) day period, Tenant sball bave such additional time as may be reasonably necessary to cure such default so long as Tenant proceeds promptly after service of Landlord's notice and proceeds diligently at aJltimes to complete said cure; provided, however, that any such notice shaJl be in lieu of, and not an addition to, any notice required under the provision in Section 1161 of the California Code of Civil Procedure regarding unlawful detainer action. If Tenant fails to comply witb the foregoing provisions, Tenant shall be deemed to be in breacb of this Lease and Landlord, with or witbout further notice or demand of any kind, may, at its option: (a) Terminate Tenant's rigbtto possession of the Premises because of sucb breach and recover from Tenant all damages aJlowed under Section 1951.2 of the California Civil Code, including, witboutlimitation, the wortb at the time of the award of the amount by whicb tbe unpaid rent for the balance of tbe term after the time of award exceeds the amount of sucb rental loss for the same period that Tenant proves could be reasonably avoided; or, (b) Not terminate Tenant's rigbtto possession because of sucb breach, but continue this Lease in full force and effect and, in sucb event, Landlord may enforce aJl rigbts and remedies under this Lease including the right to recover the rent and aJl other charges due bereunder as such rent and other charges become due hereunder or to relet the Premises. 25.2 Tenant's Pronertv. 10 the event of default, aJl of Tenant's property shaJl remain on the Premises and in that event, and continuing during the length of said default, Landlord shall have the right to appoint a receiver to take the exclusive possession of Tenant's property and to use it rent or charge free until aJl defaults are cured, or, at Landlord's option, to remove any such property and place such property in storage in a public warehouse at the cost and risk of Tenant. e 25.3 Notice of Tennination. No re-entry or reletting of the Premises sbaJl be construed as an election by Landlord to terminate Tenant's right to possession and this Lease unless a written notice of such intention is given by Landlord to Tenant and, notwithstanding any such relelling without such termination, Landlord may, at any time e tbereafter, elect to terminate Tenant's rigbt to possession and this Lease in the eventtbat at sucb time Tenant remains in default bereunder. e e 25.4 Waiver of Notice _ Perfonnance bv Landlord. Notwithstanding any provision of this Article 25, if, (i) Tenant fails to comply with any governmental requirement, Tenant sban not be entitled to notice of default from Landlord or any rigbt to cure beyond the period within which such compliance may be required by such governmental requirement; (ii) if this Lease expressly provides that this Lease may be terminated effective on service of notice, Tenant shan be entitled to cure its default only if the right to cure is required by law; or, (iii) if, in Landlord's judgment, the . continuance of any default by Tenant for the full period of notice provided for herein win jeopardize the Premises or tbe rights of Landlord, Landlord may, with or without notice, elect to perform those acts in respect to which Tenant is in default for the account and at the expense of Tenant. If by reason of such default by Tenant, Landlord is cnmpened to pay or elects to pay any sum of money, including, but not limited to, reasonable attorneys' fees, such sum or sums so paid by Landlord, with interest thereon from the date of such payment at the rate provided in paragrapb 25.5, sban be due from Tenant to Landlord on demand. 25.5 Interest. Any amount due to Landlord not paid when due shan bear interest at the maximum rate allowed by law from the date due. Payment of such interest shan not excuse or cure any default by Tenant under this Lease. 25.6 Other Remedies. Nothing contained herein shan limit Landlord to the remedies set forth in this Article 25 and, particularly, those whicb are set forth in paragraph 25.1, and upon Tenant's default, Landlord shan be entitled to exercise any right or remedy then provided by law, including, without limitation, the right to obtain injunctive relief and tbe right to recover all damages caused by Tenant's default in the performance of any of its obligations under this Lease. Tenant, along with an other remedies afforded herein, shan share the right to any and an other remedies at law or in equity. All remedies shan be distinct, separate and cumulative, none being to tbe exclusion of the otber. ARTICLE 26 INSOLVENCY 26.1 Breach of Lease. The filing of any petition by or against Tenant under any cbapter of the Bankroptcy Act, or any successor statute thereto, or the adjudication of Tenant as a bankn1pt or insolvent, or the appointment of a receiver or trustee to take possession of an or substantially an of the assets of Tenant, or a general assignment by Tenant for the benefit of its creditors, or any other action taken or suffered by Tenant under any state or federal insolvency or bankroptcy act, shall constitute a default under and breach of this Lease by Tenant, regardless of Tenant's compliance with tbe other provisions of this Lease, and Landlord, at its option and by written notice to Tenant, may exercise all of the rights and remedies provided for in Article 25, including the termination of this Lease, effective on the service of such notice, witbout the necessity of furtber notice under Article 25. 26.2 Oneration of Law. Neither this Lease nor any interest berein, nor any estate created hereby, shan pass by operation of law under any state or federal insolvency or bankn1ptcy act to any trustee, receiver, assignee for the benefit of creditors or any other person whatsoever witbout the prior written consent of Landlord. Any purported transfer in violation of the provisions of this paragraph sball constitute a default under and breach of this Lease, regardless of Tenant's compliance with the other provisions of this Lease, and Landlord, at its option and by written notice to Tenant, may exercise all of the rights and remedies provided for in Article 25, including the termination of this Lease, effective on the service of such notice without the necessity of further notice as provided under Article 25. 26.3 Non-Waiver. The acceptance of rent at any time and from time to time by Landlord from Tenant as debtor in possession or from a transferee of the type mentioned in paragraph 26.2, shan not preclude Landlord from exercising its rights under this Article 26 at any time thereafter. e e e ARTICLE 27 REMEDIES CUMULATIVE The various rights, elections and remedies of Landlord and Tenant contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any of the others, or of any right, priority or remedy allowed or provided for by law. ARTICLE 28 MANAGEMENT OF SHOPPING CENTER - COLLECTION CHARGE Landlord may, at any time, engage a manager to operate the Shopping Center on Landlord's event, Tenant shall pay to Landlord, within ten (10) days after d . , ut not more often than monthly, Tenant's ro e ee c arged by such manager (which administrative fee shall not in In addition, Tenant shall pay to Landlord a collection charge of Seventy Five Dollars ($75.00) for preparation of each demand for delinquent re~other sums which may be due under this Lease. \ . A~~~~,2~ES ,,,:;,AL Hle') ____~...i> If either party to this Lease brings any action or files any proceeding against the other party arising out of this Lease or for the declaration or interpretation of any rights hereunder, the prevailing party therein shall be entitled to recover from the other party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party as determined by the court. If either party ("secondary party") without its fault is made a party to litigation instituted by or against the other party ("primary party"), the primary party shall pay to the secondary party all costs and expenses, including reasonable attorneys' fees and any judgment rendered, incurred by the secondary party in connection therewith. ARTICLE 30 WAIVER OF DEFAULT The waiver by either party of any default in the performance by the other of any covenant contained herein shall not be construed to be a waiver of any preceding or subsequent default of tbe same or any other covenant contained herein. The subsequent acceptance of rent or other sums hereunder by Landlord shall not be deemed a waiver of any preceding default other than the failure of Tenant to pay the particular rental or other sum or portion thereof so accepted, regardless of Landlord's kn()wledge of such preceding default at the time of acceptance of such rent or other sum. ARTICLE 31 NO PARTNERSHIP Landlord is not and shall not be deemed to be in any way or for any purpose an agent, employer, principal, partner, joint venturer or member of any joint enterprise with Tenant. ARTICLE 32 SUBTENANCIES The voluntary or other surrender of this Lease by Tenant or a mutual cancellation of this Lease shall not effect a merger and shall, at Landlord's option, terminate all existing subtenancies or operate as an assignment to Landlord of any or ail of such subtenancies. e e e ARTICLE 33 SUCCESSORS Subject to the restrictions on assignment or subletting contained berein, this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their successors. The term "successors" is used herein in its broadest possible meaning and includes, but is not limited to, every person succeeding to any interest in this Lease or to the Premises of Landlord or Tenant herein, whether such succession results from the act or omission of such party. Each covenant and condition of this Lease sball be binding upon all assignees, agents, subtenants, licensees and concessionaires of Tenant. ARTICLE 34 REMOVAL OF TENANf'S PROPERTY Upon tbe expiration of tbe term of this Lease or upon any earlier termination bereof, Tenant sball immediately remove, at its own expense, all trade fixtures, equipment, mercbandise and personal property (collectively called "Lessee's property") whicb were installed by Tenant or any sublessee, concessionaire or licensee in or upon the Premises; but, if Tenant is in default, Tenant sball not remove Tenant's property unless notified by Landlord to do so. In case of any injury or damage to the building or any portion of tbe Premises resulting from the removal of Tenant's property, Tenant sball promptly pay to Landlord tbe cost of repairing sucb injury or damage. In tbe event Tenant sbould fail 10 complete sucb removal promptly, Landlord may remove any or all items of Tenant's property from tbe Premises and dispose of Ibem in any manner consistenl witb law and Tenant sball pay upon demand to Landlord the actual expense of sucb removal and disposition together witb interest at tbe rate prescribed in paragrapb 25.5 from the date of payment by Landlord until repayment by Tenant. ARTICLE 35 EFFECT OF CONVEYANCE If, during tbe term of this Lease, Landlord conveys its interest in the Premises, or lhis Lease, tben from and after tbe effective date of sucb conveyance, Landlord sball be released and discbarged from any and all furtber obligations and responsibilities under this Lease, including, but not limited to, tbose relating to any security deposit beld by Landlord, except those already accrued of whicb Landlord bas notice at the time of conveyance. ARTICLE 36 INTERPRET ATION/ AMENDMENT The captions by whicb tbe Articles and paragraphs of this Lease are identified are for convenience only and sball not affect the inlerpretation of this Lease. Wherever tbe context so requires, tbe singular number sball include tbe plural, tbe plural shall include the singular, the neuter gender sball include tbe masculine and the feminine genders. If tbere is more tban one signatory bereto as Tenant, the liability of sucb signatories shall be joint and several. If any provision of this Lease sball be beld to be invalid by a court, tbe remaining provisions sball remain in full force and effect and sball in no way be impaired thereby. It is understood lbat tbere are no oral agreements between the parties bereto affecting tbis Lease or any Addenda attacbed bereto, and this Lease (togetber witb any Addenda attacbed bereto) supersedes and cancels any and all previous negotiations, agreements, brocbures, agreements and understandings, if any, between Ibe parties bereto or displayed by Landlord to Tenant witb respect to the Premises described berein, and no sucb extraneous or ancillary material sball be used to interpret or construe tbe terms of this Lease. There sball be no modification or amendment of this Lease except as may be executed in writing by eacb of tbe parties bereto. - - - ..... - ('..,... e ARTICLE 37 TIME OF ESSENCE Time is of the essence of each provision of this Lease. All provisions relating to time shall he strictly construed. ARTICLE 38 BROKERS Landlord represents that it has utilized no hroker with respect to the arrangement, negotiation or execution of this Lease, except as may be set forth in the Basic Lease Provisions. Tenant agrees to defend, indemnify and hold Landlord hannless from and against any cost, claim or damage incurred hy Landlord as a result of any claim by any broker or other person seeking a commission, finder's fee or similar payment with respect to the arrangement, negotiation or execution of this Lease, other than as may be payable to the broker (if any) set forth in the Basic Lease Provisions. ARTICLE 39 CORPORATE RESOLUTIONS If a corporation executes this Lease as a tenant, Tenant shall promptly furnish Landlord certified corporate resolutions attesting to the authority of the officers executing this Lease on behalf of such corporation. e ARTICLE 40 SECURITY DEPOSIT 40.1 DeDosits. Tenant has deposited with Landlord the sum set forth in the Basic Lease Provisions as the Security Deposit to be retained with Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease by Tenant to be kept and performed, which deposit shall be increased from time to time as the Minimum Annual rental increases, so as to maintain at all times during the term the same ratio between the Security Deposit and the Minimum Annual Rental as exists at the commencement of the term. In the event that Tenant is not then in default, any unused portion of the security deposit shall be returned to Tenant within fourteen (14) days following the expiration of this Lease. In no event shall Landlord be obligated to pay interest on such security deposit. Landlord may commingle such funds with other funds of Landlord. The taking of such security by Landlord shall in no way be a bar or defense to any action in unlawful detainer or for the recovery of the Premises or for any other action which Landlord may, at any time, institute for the breach of any term, covenant or condition contained herein. 40.2 Performance. In the event of failure of Tenant to keep and perform any of the terms, covenants and conditions of this Lease to be kept and performed by Tenant during the term of this Lease, or any renewals or extensions thereof, then Landlord, at its option, may appropriate and apply said entire deposit, or so much thereof as may be necessary to compensate Landlord for loss or damage sustained or suffered by Landlord due to such breach on the part of Tenant. Should the entire deposit, or any portion thereof, be appropriated and applied by Landlord for the payment of overdue rent or other sums due and payable by Tenant to Landlord hereunder, then Tenant shall, upon the written demand of Landlord, forthwith remit to Landlord sufficient current funds to restore said security to the original sum deposited, and Tenant's failure to do so within five (5) days after receipt of such demand shall constitute a material breach of this Lease. e e e ARTICLE 41 OPTION TO RENEW Tenant is hereby granted the option to extend the term of this Lease for ONE I 1 I FIVE I 5 I year period(s), hereinafter referred to as the 'Extended Term(s)", by giving notice of exercise of the option ('Option Notice") to Landlord at least three (3) months, but not more than one (1) year, before the expiration of the Basic Term, or the then current Extended Term, as the case may be; provided, however, that if Tenant is in default on the date of giving any such Option Notice, the Option Notice shall be totally ineffective, and provided further, that if Tenant is in default on the date that the Extended Term would otherwise commence, such Extended Term shall not commence and this Lease shall expire at the end of the then current term. Tenant shall have no other right to extend the term beyond the last extended Term described herein. During the Extended Term(s) all of the terms and provisions contained herein shall apply except that commencing at the beginning of each Extended Term, the Annual Basic Rent shall be increased to an amount set forth in the Renewal Addendum attached hereto, or if no such addendum is attached, the Minimum Annual Rental shall continue to increase in accordance with the provisions of Section 4.3 of this Lease. IN WITNESS WHEREOF, the parties have executed this Lease to be effective as of the date set forth in the Basic Lease Provisions. LANDLORD: STATER BROS. MARKETS, a California corporation By: WALTER F. FORD Vice President Real Estate TENANT: CITY OF SAN BERNARDINO APPROVED AS TO FORM AND LEGAL CONTENT JAMES F. PENMAN ?~ By: JUDITH VALLES Mayor e 41~ Page 23 of 23 e ADDENDUM TO LEASE AGREEMENT BETWEEN STATER BROS. MARKETS (LANDLORD) AND CITY OF SAN BERNARDINO (TENANT) DATED: MARCH 12, 1998 LANDLORD AND TENANT ACKNOWLEDGE THAT: A. Tenant shall continue to occupy the beginning approximately two thousand one hundred seventy-seven (2,177) square feet until such time as Stater Bros. at its sole discretion, upon ninety (90) days written notice, shall require Tenantto reUnquish the approximately eight feet two inches by fifty-seven feet nine inches (8' 2" x 57' 9") portion of Tenant's premises indicated on Exhibit "C". Said Exhibit "C" is a part of this Lease. Tenants beginning approximately two thousand one hundred seventy-seven (2,177) square feet is defined as Tenant's temporary premises. Should Stater Bros. require Tenant to relinquish that approximately eight feet two inches by fifty-seven feet nine inches (8'2" x 57' 9") portion of Tenant's temporary premises indicated on Exhibit "c" then, in that event, the remaining approximately one thousand seven hundred and five (/,705) square feet is defmed as Tenant's future premises. Stater Bros. shall arrange for and pay all cost of the future demising wall, including the insulation of wallboard, tape, sanded, and ready for finish on Tenant's side of wall; and the relocation of any lighting fIXtures, together with modification of circuits to Tenant's panel. Stater Bros. shall modify the building systems (water, gas, and electricity) so that Tenant's future premises retains the same individually metered utilities that serviced it prior to the division. Tenant shall allow Stater Bros. reasonable access to the Premises for the purpose of said construction. Tenant shall be responsible for interior modifications within its remaining future premises. eB. Landlord approves and consents to Tenant placing on Tenant's entry glass door and/or glass store front a replica of the San Bernardino City Seal and a replica of the City of San Bernardino Police Department badge, provided that, each replica is less than four feet (4 J high nor more than two feet (2 J wide. C. Tenant is currently occupying a trailer. The location of said trailer is indicated on Exhibits "A" and "B" as "Police Station". Exhibits "A" and "B" are a part of this Lease Agreement. Within thirty (30) days of Landlord notifying Tenant that the improvements to the premises (located at 941 Kendall Drive, Suites "A" and "B", San Bernardino, California) have been substantially completed, Tenant will remove said trailer from the Shandin Hills Shopping Center depicted on Exhibits "A" and "B". Further, Tenant will "cap" the utilities servicing said trailer below the ground grade level and clear the site at Tenant's expense. LANDLORD: TENANT: STATER BROS. MARKETS, a California Corporation CITY OF SAN BERNARDINO Approved As To Form and Legal Content James F. Penman WALTER F. FORD Vice President Real Estate By: ~~ 7. (~ (J CITY ATTORNEY By: By: JUDITH VALLES Mayor e adenpolllw 23a e SHANDIN HILLS SIGN CRITERIA e EXHIBIT "D" e e e e Introduction This manual has been prepared as a guide for design and installation of Tenant signing within the Shandin Hills project. The Specifications Indicated within this manual are intended to help each Tenant achieve visual identification. Tenant agrees to design, construct and install Tenant's signage at Tenant's sole cost and expense in accordance with these Sign Criteria, as set forth below, prior to Tenant opening for business in the Center. Conformance to detailed sign drawings and specifications which have obtained the prior approval of the Landlord and the City of San Bernardino will be strictly enforced and any nonconforming sign must be brought into conformance at the sole expense of the Tenant erecting the same. The Landlord shall administer and Interpret these Sign Criteria. These Criteria shall apply equally to all Tenants of in line shop buildings. General Requirements - All Tenants 1. Each Tenant shall submit to the Landlord for approval before fabrication, not less than four (4) copies of detailed drawings indicating"the location, size, layout, design, materials and color graphics. Such drawings shall be . submitted concurrently with sufficient "architectural drawings to show the exact relationship with the store design, and their store location onsite and the dimensions of the lease frontage. . 2. Prior to fabrication, detailed drawings of all signs shall be submitted to the City of San Bernardino Planning Division for review and approval. These drawings must be signed, stamped and approved by the Landlord prior to submittal to the City. 3." Each Tenant shall obtain and pay the entire cost of all permits, approvals, construction, installation and maintenance of its respective sign. 4. Each Tenant shall be responsible for the fulfillment of all of these Sign Criteria. 5. No Tenant shall affix or maintain upon "any glass or other material on the storefront any signs or advertisement unless they shall first have received the prior written approval of the Landlord, other than the signs shown on the following pages of this manual. General Specification - Primary SiRns 1. All primary Tenant signs are to be individual channel lette.s and all letters shall be constructed of 22 gauge Paint~lok sheet metal with automotive enamel finish. Rohm and Hass Plexiglass shall be used for internally illuminated letter faces. 2. All sign bolts, fastenings and clips shall be hot-dipped galvanized iron, stainless steel, aluminum, brass or bronze, and no black iron materials of any type will be permitted. Angle clips attached to the letter sides will not be permitted. 3. Painted lettering will not be permitted" except as noted. 4. No animated, flashing or audible signs will be permitted. 1 ( e 5. 6. 7. 8. 9. 10. 11. . e No sign cabinets or sign boxes will be permitted. No exposed illuminated tubing or lamps will be permitted. No exposed raceways, crossovers, conduit, conductors or transformers will be permitted. No manufacturer's or approval agencies' labels exposed to public view will be permitted. No. pylon or free-standing signs will be permitted except for center identification sign as shown on Exhibit "A". All signs shall bear the UL label, and their installation shall comply with all local building and electrical codes. Electrical service to all signs shall be on the respective Tenant's electrical system. 12. Location of all openings in Tenant's storefront for conduit and sleeves shall be shown on the drawings submitted to the Landlord for approval and the installation shall conform with the approved dra~ings. 13. 14. Each Tenant or its Sign Contractor shall be responsible for the repair of any damage to the building caused by the installation of.said Tenant's sign. Each Tenant shall be responsible for the performance of its Sign Contractor. 15. Individual shop address numerals will be installed by the Landlord. 16.. No temporary signs of any nature will be accepted without prior written approval by.Land10rd. 17. Logo cabinets used in conjunction with individual letters will be considered on an individual basis and will be considered a part of the sign. 18. Tenants shall display their established trade names only. The trade ~ame may be used only one time per. permitted sign location. No additional advertising will be permitted, 1. e. "Discount Sales", "Quality Shoes", "Mens Wear", etc.. or miscellaneous brand names included in their operation. 19. Tenant shall be responsible for removal of his sign upon exiration of the term for any extension thereof. Removal of the sign shall include the repair of the wall surface back to it's original condition. 20. No signs will be permitted on any awnings whatsoever. DesiRn Specification - Primary SiRns 1. Each Tenant will be permitted on (1) primary sign" with the exception that a Tenant fronting on street and parking lots will be permitted one (1) sign on each front. 2. Signs located outside or partially outsiae Tenant's demised premises will not be permitted whatsoever. 3. Signs shall be of the following size: e e e A. The square footage per Tenant sign will be limited to 15 sq. ft. per 20 linear foot of storefront to a maxiumum of 150 square feet of total sign area on Building A, B, C, and D. No sign may be located closer than 2'-0" to a corner or lease line. B. Signs are to be installed per the location shown on the attached :elevation Exhibit "D". C. Maximum letter height allowed is 18". D. Signs shall be individual letters, not to exceed a depth of 5". 4. Sign colors are optional, subject to approval. 5. Logo cabinets used in conjunction with individual letters will be considered on a individual basis and will be considered a part of the sign. 6. Tenants shall display their established trade names only. No additional advertising will be permitted, 1. e., "Discount Sales", "Quality Shoes", Mens Wear", etc. or miscellaneous brand names included in their operation. Secondary Tenant SiKns Secondary signs will be at Tenant's option. If the Tenant chooses to utilize a secondary sign he may choose from three (3) basic wood shapes which shall be hung from a wall bracket, on the storefront, near the main entry to the Tenants lease space. The sign shall be of sandblasted wood (no interior illumination) and limited to one (1) per Tenant. Minimum 8 '-0" clearance to underside of sign. These signs will be subject to. Landlord's approval in writing abrication and Tenant will be responsible for the sign's permit, construction, and hanging. Business Hour Graphics If Tenant chooses to display business hours, these hours must appear as gold mylar on glass on the window surface with a maximum height of 1". ; In most cases, the panel of glass adjacent to the right-hand side of the door opening, will be utilized. All copy shall be flush left, 1" from side of window mullion and bottom of window mullion. Miscellaneous SiKn Criteria 1. No advertising placards, banners, pennants, insignias or trademarks, or other descriptive material shall be affixed or maintained upon the storefront or in show window space less than 24" from the face of the glass with the exception of: A. Banners which publicize special events (such as "Grand Opening" or "Inventory Sale") will be allowed, subject to prior written approval by the Landlord and subject to the time limits and permit requirements of the City of San Bernardino and the Landlord. B. Promotional sales signs painted on 100 lb. card stock which can cover a 3 " e e e maximum of fifteen percent (15Z) of glass area excluding the entry doors, subject to prior written approval by the Landlord. 2. If Tenant has a noncustomed door for receiving merchandise, it should Tenant I s address in 2" vinyl die-cut letter, Helvetica Medium Style. letters to be selected by Project Architect. Where more than one (1) uses the same door, each address shall be applied. have Color of Tenant 3. Retail store numbering will comply with requirements of this criteria per "Exhibit "G". 4. Building address signs shall be per the City of San Bernardino. 5. The standard signing for the supermarket on Parcell, the drug store on Parcel 2, and the tenant of building "Major 3" are hereby approved. National or regionally recognized tenants occupying buildings E, F, G or H, shall be allowed to install their standard signage program, subject only to the approval of Stater and the City of San Bernardino. 4 e e e exhibite EXHIBIT "E" DELIVERY ESTOPPEL COMMENCEMENT AND TERMINATION DATE OF LEASE AND LESSEE'S OBLIGATION Pursuant to the terms and conditions contained in this Lease: I. The Commencement Date of the term of the Lease is, or shall be deemed to be 2. The date upon which rent shall commence is 3. The date upon which the term of this Lease shall expire is 4. The date upon which Tenant received the keys to the Premises is DATED this _ day of .199_. LANDLORD: STATER BROS. MARKETS, a California corporation By: WALTERF.FORD Vice President. Real Estate TENANT: CITY OF SAN BERJIARDIlfO APPROVED AS TO FORM ill LEGAL COlVTElfT JAMES F. PENMAB .~ City Attorney By: JUDITH VALLES Mayor Exhibit ftE" - Page 1 of I .. C I T Y 0 F SAN B ERN A R DIN 0 INTEROFFICE MEMORANDUM CITY CLERK'S OFFICE DATE: April 24, 1998 TO: Chief Lee Dean, Police Department FROM: Rachel Clark, City Clerk SUBJECT: Transmittal for signatures and return to City Clerk for filing with Resolution 98-99 authorizing the execution of an agreement with Stater Bros. Markets, Inc., for the lease of ground space for Area "B" Attached are the following: One (1) original agreement and three (3) duplicate original agreements to be filed with Res. No. 98-99 authorizing the execution of an agreement with Stater Bros. Markets, Inc., for the lease of ground space for the Area "B" Community Service Office and repealing Resolution No. 89-155, Section 2. Please obtain agreement to resolution. necessary signatures and return the original the City Clerk's office for filing with said Please be advised that said resolution was adopted on April 20, 1998, and will be rescinded if parties fail to execute said documents within sixty (60) of the passage of this resolution. The documents must be executed and returned no later than Friday, June 19, 1998. If you have any questions, please do not hesitate to call Eileen Gomez at 5102. Thank you. Rachel Clark City Clerk I hereby V:dge re~t Signed:--~<: ____=__ ~ Dated: - . . I<? By: of the above mentioned documents. 11c5- eg