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HomeMy WebLinkAbout25- Police Department CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Lee Dean,Chief of Police Subject: Resolution of the Mayor and Common Council of the City of San Dept: Police Department Bernardino authorizing the execution of an agreement with Steward Development to lease Date: January-20,2000 certain real property for the Area D' ORIF Community Service Office and repealing UINAL Resolution No. 91-268. Synopsis of Previous Council Action May 8, 1991-Resolution No. 91-268 authorizing the execution of an agreement with the Smart and Final Shopping Center to lease certain real property to be used as a Police Community Service Office for Area D'. Recommended Motion: 1. Adopt Resolution. 2. Authorize the Director of Finance to amend the FY 19P8/ 9 CO Option Grant budget as outlined in the staff report. WAYNE ,ASgSTANT CHIEF OF POLICE Contact person: Lt.Jenifer Aragon Phone: 384-5692 Supporting data attached: Yes Ward: Second FUNDING REQUIREMENTS: Amount: $1 per year x 5 years = $5 in lease payments Acct. 001-213-5181 $25,000 Tenant improvements Acct. 123-529-5505 Acct.Description: 1998/99 COPS Option Grant/Renovation of 'D'COP Council Notes: Finan Agenda Item No. a5 6AA7/�00 i CITY OF SAN BERNARDINO— REQUEST FOR COUNCIL ACTION Staff Report SUBJECT: Approval of Resolution for the Relocation of Area"D" Community Service Office. BACKGROUND: We currently have an opportunity to relocate the Area "D" 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 "D" 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, and a location within the area command that is convenient to the public. Currently, the Area "D" Community Service Office is located at 334 W. Baseline Street in a leased office at the cost of$1 per year. The lease has expired. The building has deteriorated and the walls are in need of painting. The roof leaks when it rains with the water running down the east wall of the office, and creeping across the carpet. The acoustic ceiling tiles are discolored and rats can be heard scurrying about. The exterminator has done what he can to arrest this problem; however, the ceiling tiles are again ruined soon after their replacement. The "D" Area Community Service Office staff has grown to include two Area Detectives, a Crime Prevention Specialist, and the Distressed Neighborhood Grant Team, which increased the number of j personnel by twelve. The size of the current office is inadequate to provide efficient working space for this number of employees. Mr. James Sharer(Facilities Management) and EDA, made inquiries about a suitable location for relocation along the Baseline Corridor. None were available. An inquiry was made about expanding the current location however the property manager did not respond. Members of the Baseline Area Business Association (BABA) were contacted for suggestions. The only suggestion given was the abandoned Obershaw Toyota property on `E' Street south of Baseline. When contacted, Mr. Obershaw said that because of the costs he incurs for that property he could not afford to provide it for police use. I The proposed relocation will move the Area "D" office from 334 W. Baseline Street to 711 W. 2"d St #A. The new location complies with the site selection criteria as established in the December 1987 study. A lease agreement between the City and Steward Development will provide the new location at a cost of$1 per year, for a term of five years with an additional five-year option. The new location provides the necessary space for expansion and provides for the professional image associated with the Police Department. The new location is of similar type and appearance as the other area command offices, which will establish consistency throughout the department. The selected location also provides a permanent location for a term of five to ten years. FINANCIAL IMPACT: A one-time cost of$ 25,000 is required for tenant improvements. The improvements will include removing walls and doors between existing interview rooms to create offices and a break room, paint, wallpaper, telephone and computer lines, and an exterior sign. The funding source is the fiscal year 1998-1999 COPS Option Grant. All originally approved items have been ordered or purchased and savings are available in various line items within the grant for this cost. A budget amendment is required to transfer the following amounts to 123- 529-5505 (Professional/Contractual): $15,000 123-529-5112 (Small Tools and Equipment) 7,400 123-529-5702 (Computer Equipment) 2.600 123-529-5701 (Motor Vehicles) $25,000 There is no significant change in the annual operating expense. RECOMMENDATION: 1. Adopt the resolution. 2. Authorize the Director of Finance to amend the FY 1998/99 COPS Option Grant budget as outlined in the staff report. i� i , I 1 RESOLUTION NO. 2000- 2 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF 3 SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH STEWARD DEVELOPMENT TO LEASE CERTAIN REAL PROPERTY FOR 4 THE AREA 'D' COMMUNITY SERVICE OFFICE AND REPEALING RESOLUTION NO. 91-268. 5 6 BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: 7 8 SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and directed 9 to execute on behalf of said city an agreement with Steward Development to lease space for 10 the Area 'D' Police Community Service Office, a copy of which is attached hereto and 11 marked Exhibit 'A' and incorporated herein by reference as thoughtfully set forth at length. 12 13 SECTION 2. Resolution No. 91-268 is hereby repealed. 14 15 SECTION 3. This resolution is rescinded if the parties to the agreement fail to execute it 16 within sixty(60)days of the passage of this resolution. 17 18 19 20 21 22 23 24 25 26 27 28 1 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT 2 WITH STEWARD DEVELOPMENT TO LEASE CERTAIN REAL PROPERTY FOR 3 THE AREA 'D' COMMUNITY SERVICE OFFICE AND REPEALING RESOLUTION NO. 91-268. 4 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 6 Common Council of the City of San Bernardino at a joint regular meeting thereof,held on the 7 day of 2000 by the following vote, to wit: 8 Council Members Aves Nays Abstain Absent 9 ESTRADA 10 LIEN 11 McGINNIS 12 SCHNETZ 13 14 SUAREZ 15 ANDERSON 16 MILLER 17 18 City Clerk 19 The foregoing ordinance is hereby approved this day of 2000. 20 21 Judith Valles, Mayor 22 City of San Bernardino Approved as to form 23 and legal content: 24 JAMES F. E City A 25 26 By. i 27 28 LEASE AGREEMENT BY AND BETWEEN ALLAN STEWARD, INC. 104 EAST STATE STREET REDLANDS, CA 92373 1909 ) 335-0333 ( "LANDLORD" ) AND CITY OF SAN BERNARDINO SAN BERNARDINO POLICE DEPARTMENT CHEIF OF POLICE 710 NORTH "D" STREET SAN BERNARPINO,CA 92401 ( "TENANT" ) i TABLE OF CONTENTS BASIC LEASE PROVISION 1 Effective Date 1 Tenant 1 Tenant's Trade Name 1 Premises Address 1 Premises Size 1 Term 1 Fixturing Period Commencement 1 Fixed Minimum Rent 2 Rental Adjustment Date 2 Percentage Rate porPercentage RwW 2 Initial Estimated Common Area Expenses 2 Use of Premises 2 Security Deposit 2 Broker 2 Addresses for Notices 2 OPERATNE PROVISIONS 2 ARTICLE 1 Premises 2 11 Leased Premises 2 1.2 Construction of Improvements 3 1.3 Foduring Period 3 1.4 Tenant's Acceptance of Premises 3 1.5 Rental Commencement Date 3 1.6 Changes 3 1.7 Relocation 3a ARTICLE 2 Business Rlghts and Restrictions 3 2.1 Use 3 2.2 Environmental Restrictions 2.3 Use Restrictions ARTICLE 3 Tenn 5 ARTICLE 4 Rent 5 4.1 Fixed Minimum Rent 5 4.2 Percentage Rent 5 4.3 Rental Adlusbr*nt 5 4.4 Late Payments 5 4.5 First Partial Month ° 4.6 Gross Sales 4.7 Records — ° 4.8 Audit 7 I Common Area 7 5.1 Oeflnition 7 5.2 Use 7 5.3 Maintenance 7 5.4 Records 7 5.5 Tenant's Contribution 7 5,6 Operation and Control ° 5.7 Employee Par$dng ° 5.8 Obstruction ARTICLE 6 Merchants Assoclation ° ARTICLE 7 Taxes 71 Personal Property Taxes 7.2 Real Property Taxes 9 ARTICLE 8 Utlikles 9 ARTICLE 9 Repairs and AMeratlons 9 9.1 Leasehold Improvements 9 92 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 Insu 11 10.3 Workers Compensation Insurance 11 10.4 Fire Insurance 11 10.5 Business Interruption Insuran 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 ResEDro 12 11.2 Election to Terminate 13 11.3 RentAdjustmertt 13 0 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 TenanPs Property 18 25.3 Notice of Temrination 18 25.4 Waiver of Notice-Performance by Landlord 19 25.5 Interest 19 25.6 Other Remedies 19 ARTICLE 26 Insolvency 19 26.1 Breach of Lease 19 26.2 Operation of Law t9 26.3 Non-Waiver 19 ARTICLE 27 Remedies Cumulative 20 ARTICLE 28 Management of Shopping Center-Collection Charge 20 ARTICLE 29 Attomeys' Fees 20 ARTICLE 30 Waiver of Default 20 ARTICLE 31 No Partnership 20 ARTICLE 32 Subtenancies 20 ARTICLE 33 Successor 21 ARTICLE 34 Removal of Tenant's Property 21 ARTICLE M Effect of Conveyance 21 ARTICLE 36 Interpr9tatlon/Amendmerd 21 ARTICLE 37 Time of 22 ARTICLE 38 Broken 22 ARTICLE 39 Corporate Resolutions 22 ARTICLE 40 Security Deposit 22 40.1 Deposits 22 40.2 Performance 22 ARTICLE 41 Option To Remy 23 Addendum To Lease Agreement 23a TABLE OF EXHIBITS Shopping Center .A. Site Plan Landlord Improvement SpecMks" Sign Criteria V Delivery Estoppel 992 Y SHOPPING CENTER SPACE LEASE THIS LEASE ('Leese) is entered Into ea of the date set forth below by and between ALLAN STEWARD, INC,a Califomla corporation ('Landlord') and Tenant. REMALS Thla Lease is made and entered into with rupeettadhe following facts: A. Landlord is the owner of the Premises (ea hereinafter defined), or is the Tenant of the Premises pursuant to the terms of a Leali under which Landlord is entitled to Sublease the Premises to Tenant. B. Tenant desires to lease the Promises:fr4m•Landlord. I NOW, THEREFORE, the Parties hereby agree as follows: BASIC LEASE Effective Date: ...........r.a. . Jay • 2000 Tenant , •,•••• ............. .j W-r - fiq.'.on Bernardino. ..'R':f. TenanYa Trade Name: ....................................... :SYn'.Bymordino Police Department Community Police Facility Premises Address: .71.}rA 2ND STREET ......•..............•.............•......... SAN SERNARDINO, CA 92405 County. --......................................................... Son Amardino Premises Sure: Aporoximstsly2. 501 net rentable square feet . Term: ................................ _................... Sixty (60) months. computed from the first day of the first calandarmonth on or after the Rental Commencement Date, The Rental Commencement Date shall be fixed in a Delivery 'Estoppektc be executed by Landlord and Tenant in the form zttwhedi hereto as Exhibit"E`. Page I of 23 n Dollars per ear, Payable in equal monthly Fixed Minimum Rwk........................................... ......................................... ... iiamorLl _Ol Y ' Y,I`talltifeilb of]wro tf 1=Tiq DDllere during the Term, subject b j,4'${mPnt pursuant to Section 4.3. Rental Adjustment Date:.. ................................... '�dOtPf�pl^leable. Percentage Rate(forPomentape Rentat):.............. "e:7eti,,,,` parCent ( 0 Initial Estimated Common Area Expenses:.....,..,, j4:it.,* U per square foot of Premises Size per month, sub*leadjustment pursuant to Section 5.5. Use Of Premises:................................................. Community Police Facility. The Promises shall be used solely for the use stated above and for no other use or purpose. Security Deposit:...........»....................I................ 2eia to`0 t Broker:.......................................................... Not Applicable. Adtlreeaea For Notices: t eNOLORD IENAN ALLAN STEWARD, INC. "" CITY OF SAN BERNARDINO 104 EAST STATE STREET Attention: Chief of Police SUITE 0 710 North `0' Street REDLANDS, CA 92373 San Bsmardino, CA 92401 ( 909) 335-0333 These Basic Lease Provisions are intendeo*p.4pplement andlor summarize the provisions set forth In the Lease Provisi Previsions of this perative Pm s onssof this Lease. the Operative provisions Provis Provisions this Lease shall control. OPE eyTlt#gPROV1310N5 IIRTlC4E 1 Pte. 1.1 Leased Premises. Landlord hereby leases u lo'.Tenant, and Tenant hereby leases from Landlord, Nose certain Promises (consisting of lend and buil(linps end improvements) located as set forth In the Basic Lease Provisions (hereMekar ro/arred to as the 'Promtaes6j. The Premises are outlined in red en 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 FXHI BIT'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. �PC39l7� 1 7 Fivturinn Period. onh in the improvement obligations (hereinafter referred to u the 'Completion Date') at leasteocement'). After landlord notifies Basic Lease Provisions prior to the Completion Date (lbe 'Fi Tenant of the Completion Dale, and requirements of Section 9.5 of this Lease. Tenant shall have the right to ente purposes of equippipg.atid.fixturing the Premises, so long as such entry does not interfere Ma In the event lbat'Tenant enters the Premises prior to the Rental Commencement Date as permitted by this paragraph, all of the provisions of this Lease shall be in full force and effect except the rent provisions. improvements to the Premises have been substantially,completed (whether or not Tenant is tben ' ion of the Premises u permitted in paragraph 1.3), Tenant shall deliver to Landlord a list of items cant deems oecessary for y�udlord to cemplao or corrsct in order for the Prerrel o to be .ceeptabi.. • .11 complete or correct each item contained in the list delivered by Tenant to landlord other t] ch Landlord may contest• If Tenant tails to deliver the list to landlord within the five (5) day 'bed in this paragraph. Tenant shall be deemed to have accepted the Premises m being in ► good table condition and shall be deemed to have approved the construction u having been completed in and workmatike, fashion, In the event Tenant does deliver such list to Landlord within the five ( nod described iu this paragraph,.Tenant shall be deemed to have approved the construction as Navin mpleted in a good and workmanlike fashion and shall be deemed to have accepted the Premises as being to a IS Rental C mmencement Dale. The Rental Commencement Date shall be fixed in a Delivery Estoppel to be xetuted by Landlord and Tenant within five (5) days aker7eoant is lhemtn possession of the Premiseq aa asawssai+w 1.6 Changes. Landlord shill have the right,at any time, to change any or all of the following items so long as the change does not substantially interfere with the ingress to end'egmss from the Premises or the flow of vehicular traffic in the Shopping Center. _ (a) The location, in the Shopping Center, of the Building in which the Premises arc located (but such change .hall not be need.following the completion of the Premises). (b) The location, in the Shopping Center, of the Premises (but such change shall not be made following the completion of the Premises). (c) The plot plan of the Shopping Center.. ARTICLE 2 BUSINESS RIGHTS AND RESTRICTIONS 2.1 Use. Tenant shall bave the right to use the Premises for the use set forth in the Basic Lease Provisions. No other use of the Premises shall be permitted. Nothing contained herein shall be deemed to give Tenant any exclusive right to such use in the Shopping Center. Tenant shall 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 governmeelal authority having jurisdiction to be a violation of law or of said certificate of occupancy. Tenant shall comply with any direction of any governmental authority having jurisdiction which shall, by reason Of the nature of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or Landlord witb respect (2.1 emtanued on page 4) Para 2 of 7i 1.7 Relocation of Tana ea 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 Promises") within the shop buildings, subject; however, to the following terms and conditions: A. The Relocation Promises shall have approximately the same rentable square footage as is contained In the Premises, B. The Relocation Premises shell 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 Tenants share of the "costs and expenses of operating and maintaining the Center Common Faclllties," 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 Tenant's 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 (901 days period, shall mutually agree in writing upon; (!) the scope and cost of all leasehold Improvements to be constructed at the Relocation Promises, which shall be substantially similar to those of the original leased Promises, adjusted'proportionatey for size; (ii) the extent of Landlord's contribution to;fhe cost thereof, If any,and; (iii) a timetable for their completion. Landlord and Tenant shall use best efforts and act In good faith to agree on the terns. 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 ralocaton, 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 limtted to only already completed buildings. rawraRu Page 8-a to the Premises or with respect to the use or occupation thereof, Tenant 6211 not do or permit to be done anything which will invalidate or inereaae the cost of any fire, extended coverage or any other insurance policy covering the Building Complex and/or property touted therein and shall..comply witb all rules, orders, regulations, recommendations and requirements of the Pacific Fire Rating Bureau or ,any, other organization performing similar function. Tenant shall promptly, Upon demand, reimburse Landlord for any additiopal premium charged for such policy by reason of Tenant's failure to comply with the provisions of this Article, but such reimbursement shall not be construed as curing Tenant's default for failing to comply with the provisions of this Article. Twmt shall not do or permit anything to be done in or about the Premises which will m any way obstruct or interfere with the rights of other tenants or occupants of the Shopping Center, or injure or many them, or use or allow the Premises to be used for way improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upop;1hePremises. 2.2 s noirnnmenlal Restrictions. Tenant shall not engage in any activity on or about the Premises that violates any Environmental Iaw, and shall promptly at I Want Is sole cost and expense, take all investigatory andlor remedial action reasonably required by Landlord or ordered or required by way governmental agency or Environmental Law for mater op and removal of boy contamination involving way Hu rdoua Material created, caused directly or indirectly or materially contributed to by Tenant, The term 'EoviroomeolaL Law' shall mean may frdenl, suit or local law, aurute, ordinance or regulation pertaining to health, industrial hygiene or the eoviroammW conditions on, under or about the Premises, including without limitation, (i) the Comprebensivo Environmental Response, Compensation and Liability Act of 198(1 ('CERCLA'), 42 U.S.C. Sections 9601 ct seq.;-(ii)�tbe Resource Conservation and Recovery Act of 1976 (-RCRA'). 42 U.S.C. Sections 6901 at seq.; (iii) California Health 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) the Porter-Cologne Water Quality Control Act, California Water Code Section. 13000 et seq.; and,(YO California Civil Code Scctioa 3479 at seq., es such laws are amended and the regulations and administrative codes applicable thereto. The term 'Hazardous Material' includes, without limitation, any material or substance which is (a) defined or listed as a 'hazardous waste', 'extremely hazardous waste', 'restrictive hazardous waste' or 'hazardous substance' or considered a waste, condition of pollution or nuisance under the Environmental Lens (b)petroleum or a petroleum product or fraction thereof; (c) asbestos; andlor (d) substances known by the State of California i to cause cancer and/or reproductive toxicity. It is the intent of the names 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 Watcr and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tmant shall provide prompt written notice to Landlord of the existence of Hazardous Substances on the Premises and all notices of violation of the Environmeoul Law's received by Tenant. Tenant shall not bring onto, create or dispose of, in or about the Premises of the Project, including but not limited to its sewage or storm drain systems, any Hazardous Substances. Notwithstanding the foregoing, Tenant may utilizk 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 Tcoant 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 Premiserin excesSbf that amount which would be consumed or sold by Tenant's normal operations within sixty (60) days. All Hazardous Substances stored within the Premises shall be clearly labelled and adequately safeguarded so u to avoid my spili or release of such Hazardous Substances. 2.3 Use Restrictions. Tenant shall not be permitted to: (i) conduct any auction or bankruptcy sale; (ii) conduct my fee sale; (iii) conduct my closeout sale except at the expiration of the lease term; or, (iv) sell my soulled 'surplus', 'Army and Navy' or 'secondhand' goods as those terms are generally used at this time and from time to time hereinafter, in, on or from the Premises. Page 4 of �23 ARTICLE 3 _ He to TERM The Term shall commeacc when Landlord has substantially completed coostruction of the Premises and the Shopping Center in which the Premises are located pursuant to the provisions of EXHIBIT 'C', or on the date upon w Tenant has first opened for business from the Premises, whichever event occurs first. The parties shall immediately execute a document in the Form of Exhibit 'E' to this Lease stating the date of commencement of the Term when it has been ascertained. The Term shall be is set forth in the Basic Lase Provisions. In the event that Landlord is unable to deliver possession of the Premises to Tenant within eighteen (19) months following the execution of this Lease, this Lase shall automatically terminate and be of no further force or effect. ` ARTICLE 4 RENT b 4.1 Fxed hfinimum Rent. Tenant shall pay a fixed minimum rent to Landlord at address set forth for notices to Landlord, or at such other address as may be specified by Landlord, without prior de�d, deduction or setoff during the term of this Lease. The fixed minimum rent shall be payable on or before the first day of each calendar month during the term in the amount set forth in the Basic Lase Provisions. 4.2 Percentage Rent. at the time and in the manner herein specified as percentage rental hereunder a sum equivalent to the a any, by which the percentage set forth in the Basic Lease Provisions as the 'Percentage Rent' of the as defined below) in any month exceeds the fuel minimum rent payable during the same tooth. Within tea (10) days after the end of each cale¢du the term hereof, commencing with the tenth (10th) day of the month following the commencemen t o u hereinabave provided), and ending with the troth (10th) day Of the mouth next succeeding the last the lease term, Tenant shall furnish to Landlord, at the place where rent is then required to be paid a terms hereof, a statement in writing, certified by a duly authorized officer or represeotative o to be car=t, showing the total gross sales made in, upon or from the Premises during the pr each, mooch, and shall accompany ach such statement with a payment to Landlord equal to the percentage 4.3 Rental .Adiasonent. date set forth m the Basic Lease Provisions u the rectal adjustment date, u follows: The base for determining the adjustment shall be the Consumer Price rban Consumers, for the Los Angeles-Anaheim-Riverside Ara (1992-94 >• 100) published by the t Department of Labor, Burau of Labor Statistics (Index) which is published for the calendar mo 3) months prior to the first full month of the lease term (Beginning Index). If the Index published oath which is three (3) months prior to the adjustment date (Extension Index) has increased over th g Index, the fixed minimum rent for the following year (until the next teat adjustment) shall multiplying the fixed minimum rent for the initial full month of the term by a fractioa, the nume ch is the Extension Index and the denominator of which is the Beginning Index; provided, however, that OF the Index shall be converted in accordance with the coaversion factor ub ' epartmeot of Lahor, Burau of Labor Statistics. If the Index ' urmg the term of this knee, such other guvernmeet. index o it is replaced shall be used in order to obtain substantially the same result as would have 4.4 Late Pavmm LSn Teoaat hereby acknowledges that late payment by Tenant to Landlord of rent and other snag due hereunder will =use Landlord to incur costs not contemplated by this Lase, the exact amount of which will be AA Page 5 of 23 extremely difficult to ascertain. Such costs include, but are not limited to, processing charges, accounting charges and late charges that may be imposed on or incurred by Landlord. Accordingly, if any Installment of rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee within five (5) days after such amount shall be due, then without any requirement for notice to Tenant, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of the amount which would otherwise be due. Additionally, Tenant shall pay to Landlord a charge of fifteen dollars ($15.00) for each check which is dishonored or returned by Tenant's batik for any reason. The parties hereby agree that such Charges for late payments and for dishonored checks represent a fair and reasonable estimate of the Cost Landlord will incur by reason of such occurrences. Acceptance of such charges shall in no event Constitute a waiver of Temot's default with respect to such overdue or dishonored amounts, nor prevent Landlord from exercising any of its rights and remedies granted hereunder. 4.5 First Partial Nfonth. if the eemmeeeemeat data aeaniq an - day sibel oboe the F1191 do, OF (a) Fixed minimum teat for the partial month shall be prorated, b rty (30) day mooch, and as so prorated shall be paid on the commeaeem , ' a ition to the rental due for the first full month - of the term. - Lease, and the daily minimum rent provided in this i !*in addition to - minimum rent paid for s in computing the percentage rent payable for that 4.6 Gross Sales. ' (� The entire amount charged for the full price at the time of the initial transact- for all merchandise sold or delivered or services rendered by Tenant whether or not amounts are actually received at the time of sale; (ii) The gross amount received or charged by Tenant for merchan ' sold or services rendered pursuant to orders received by telephone, mail, house-to- or by other canvuing, and attributable to the Premises whether or not filled elsewhe , and, (iii) All gross income of Tenant from any operatio , at, from or through the use of the Premiss,. including, but not limited to, sales made means of mechanical or other vending machines located in, at or on the Premises. (b) There shall be excluded from gross or deducted therefrom if previously included: O Cash refunded or it allowed on merchandise returned by customers. (ii) Sales , excise taxes, or other similar taxes. (c) The Tenant' is used in this paragraph includes the named Tenant and any agent employee, li or concessionaire of the named Tenant, or any other person or firm conducting b ' ess in, at, 4.7 Record. concessicaaim to keep and preserve, for a period of not less than three (3) years fbU o e original term of this Lease or any extension thereof, complete, accurst of all amounts received during each lease year in the Premiss, includ' register detail tapes. However, in the use of a controversy ss� tage rent payable hereunder, Tenant shall keep and preserve said records until the bearing directly on Tenant's gross sales hereunder. In audit' or a copy of Tenant's California State Sal ys o awing the date oa which Nth reNra is filed with the Franchise 4.8 Audit. _ meats far the transacted in the Premises, whether or not included in 'grow sales'. If the audit di period audited are inaccurate, adjunmect shall be trade item eauoa by Landlord. If the audit further discloses that Tenant has understated t y two percent (2R) or more, Tenant shall immediately pay the cost of the a ogether with any amauata due Landlord u a result of such undo tatement, which amounts ARTICLE 5 CONMON AREA 5.1 Definition. The common arm is that area withia the Shopping Center which is➢Either occupied by buildings (excluding roof overhangs and caopies, columns supporting roof overhangs and canopies, and subsurface foundations)nor devoted permanently to the exclusive use of a particular Tenant, except that arras containing pylon signs and buildings or structures which are used with respect to the Operation of the common arm shall be deemed to be part of the common arm. 5.2 Use. During the lease term. Tenant, its concessionaires, licensees, invitees, agents, customers and employees shall have the nonexclusive right to use the common arm in common with landlord, other owners of portions of the Shopping Center, other lessees, and their respective norr s ionaues, licensees, invitees, agents, customers and employees, subject to the provisions of this Lease. 5-3 Maintenance. Landlord shall be responsible for managing and maintaining all improvements on the common arm in good and sanitary order, condition and repair, including making replacement where necessary, and in compliance with all governmental requirements, including, without limitation, (1� managing; (it)cleaning and removing rubbish and dirt; (iii) providing labor, payroll tuts, materials and supplies; (iv) providing all utility services utilized in connection therewith; (v) maintaining, repairing, replacing and providing reserves for replacement and remarking paved sad unpaved surfaces, curbs, directional and other signs, landsaping, lighting facilities, drainage and other similar items; (vi) providing casualty, public liability, property damage and other insurance on the common area, (vii) providing tools, machinery and equipment used in connection with the above, (viii) paying all real property and personal property taxes and assessments levied or imposed against the common aru; and, (ix) paying any regulatory fee or surcharge or similar imposition imposed by governmental requirements based upon or measured by (a) the 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 on its income generally). - - 64 F 5.4 Records. These records shall u a r tress rs ou at the offices of Landlord for 5 Tenant's Contribution. fixed minimum mat to Landlord, Tenant's pro rata shun of the amount of all expenses descri� ph 5.7. Tenant's pro rati share shall be equal to the ratio which Tenant's floor arm bears to er arm in the Shopping Center, whether or not then occupied. Tenant's monthly payment � all be based upon equal monthly Installments which have been estimated is advance by Landlo icular calendar year. Landlord may. within six? (60) days after the end of such year, or as son as may be practical, prepare an accounting of the actual eommne um expenses incurred during , upon completion of any such accounting shall invoiceQaant, or allow n a credit against the installments next due, u the ease may be, the difference between Tenant's sham of the taw area expenses incurred during such year. and the amount actually paid by Tenant with respect mammon — r — Page 7 of 23 possible, to an amount equal to one-twelfth (1112) of the actual rpa y Landlord to be encountered during the cu s are of common arm expenses shall be the amount set forth in the 5,6 Operation and Contral. Landlord shall have general possession and control of the entire common area and may, from time to time, adopt rules Lod regulations pertaining to the use thereof. Landlord shall, except as otherwise provided herein, operate and maintain the common area during the lease terra 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 substirute operator, including but not limited to, any Tenzer in the Shopping Center, to carry out any and all of Landlord's rights and duties with respect to the common area as provided in this base; and Landlordtmy enter into a contract either by a separate document or in a lease agreement with such operator on such terms and conditions Lad for such period as Landlord shall deem appropriate; and, if Landlord does so, the substitute operator, rather than 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 am operator for the Shopping Center, Tenant shall have neither voice nor control in the operation and maintenance of either the common arra 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 Lay other recant within the Shopping Center. 5.7 Employee Parkins. Landlord may designate what part of the common arm, 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 he entitled to enforce this provision by requiring the payment by Tenant ofauch 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 Ohstnrction. 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 stonge of merchandise or any business activities of any kind whatsoever be conducted therein without Landlord's prior written consent; nor shall any person 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 create eisiLsf\rs�prder or commotima. ARTICLE 6 MERCHANTS ASSOCIATION r Center, Tenant shall join and maintain membership in good standing m such t lord of any of the other peones of the Shoppin C ran such a Merchants Association in the future,Tenser shall sv s all do all things reasonably necessary in order to aid the formation of such Merchants ARTICLE 7 TARES 7.1 Personal Property Tuts. Tenant shall pay, before delinquency, all license fees, public charges, property taxes and assessments on the furniture, futures, equipment, inventory and other property owned or biing used by Tenser at any time situated on or installed in the Premises, together with all license fees, permit fees, assessments and other rays levied, assessed or imposed by law or ordinance upon Tenant or upon the business operated by Tenant, and shall, open . request, deliver proof of such payment to Landlord. Page 8 of 23 i 7.2 Real Property Taxes. ! any and all real property toes and general or special assessments and installments the mg any to on rent which is substiruted in whole or in part for real property meats and nay IieeLSe fee imposed by a local governmental body on the rent, and excluding federal and state income tun) which shall, during the levied or assessed against all or any portion of the Premises or imposed o aid real property taxes and assessments for the first and last lease )cart h if necessary, be prorated and apportioned between Landlord and Tenant to upon individual assessment valuations (or proration) supplied by the County r otha reguluory agency. Said proration shall be coaclusive upon both the parties otherwise mutually agree in writing. In the absence of a pro ' t by the County Assessor or other regulatory agency or a written agree a parties, Tenant's share shall be determined by multiplying the Amount orth,in the tax bill which includes the Premises by a fraction in which the is the floor area of Tenant's Premises and the denominator is the floor area of all seatiwiei-'- - - commencement of the term are changed so that a tax, assessment or excise on rents or tax, charge, or see••""^•^t, however described, is levied or assessed against a direct substimtioo in whole or in part for any real property cues, Tenant shall a elinqueocy the substitute to or excise on rents, but only to the eztept that it can amed that there hu been a substitution and, u a result, Tenant has been relieved fr ymcot of real property rues that would otherwise have been obligated to pay. T are of any to or excise on real pursuant to this paragraph shall be substanti me u, and u a substirute for, the payment of such real property taxes u provided in and expense to contest the amount or legality of any said real property razes nuts on or attributable to the Premises, including the right to apply for Lb ereof, provided, however, Tenant shall prosecute any such contest with du ce and shall, forthwith upon the final determination thereof, pay the amouo yes property taxes and assessments on or attributable to the Premises u so des ogether with any interest, penalties, costs and charges which may be payable ' toa therewith. Prior to any such contest, Tenant sball post such security or take other ARTICLE S UTILITIES Tenant shall arrange for all connection and hookup of, and shall pay, before delinquency, all charges for water, gas, heating, ventilation, air conditioning, electricity, power, telephone,Ame6aeWrir and other utility services used an or serving the Premises during the lease term. Nothing contained in this Lease shall limit Landlord in any wny, 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 Lrrtorovesnen s. Tenant, u its sole cost and expense, shall be responsible for decorating sod providing any leasehold improvements which may be required by T—at at the commencement of the term. SovA k, Pane 9 of 23 leasehold improvements shall be subject to the reasonable:stppioval of landlord, which approval shall be obtained in writing prior to the commeocemeot of any construction. In no event shall Tenant make any change to the exterior appearance of the Premises, or any change to or openings in the. structural portions of the Premises, including, but not limited to, bearing walls, roof and foundation, nor any penetration of the roof, unless Tenant shall have first delivered to I,xndlord a complete engineering analysis of the tffmts of such changes to the Premises and shall have received Landlord's express written consent to such changes. Within fifteen (15) days following the completion of any improvements, Tenant shall deliver to Landlord a complete set of 'as built' blueprints, Tenant's failum to obtain Landlord's written consent prior to the commencement of any improvements shall be deemed to be a material breach of this Lease. 9.2 Landlord's Repairs. Landlord shall, at its own expense, keep in good condition and repair the roof (excluding ceilings), downspouts and rain gutters, foundations and structural portions of exterior bearing walls, but, excluding any glass, windows, doors, skylights or other openings contained tberein. 9 3 Tenant's Repairs_. Except as expressly provided in paragraph 9.2, Landlord shill not be obligated to make repairs, replacements or additions of any kind whatsoever upon the exterior or interior of the Premises. The Premises, ,Nether with say equipment, faeililiea or futures shall, at Teeara's sole expense, I>e kept, repaired, maintained, replaced or added to at all times by Tenant in good order and in and safe condition and repair and in accordance with all governmental requirements and insurance requirements, specifically, including, but not limited lo, all glass of the Premises (including but not limited to exterior plate glass) and the beating,veotilating and air conditioning system. Tenant shall be expressly responsible for my maintenance or repairs required wllh respect to the utility lines, conduits or pipes serving the Premises, whether or not located in or on the Premises. Notwithstanding anything to the contrary contained herein, Landlord shall have no obligation to repair any damage An the Premises caused by my negligent or intentional act of omission of Tenant, and Tenant shall be solely responsible foi any such required maintenance or repair, including but not limited to leakage caused by the installation or maintenance of Tenant's equipment on the roof of the Premises. Tenant hereby waives my right to make repairs to the Premise at Laedlord's expense, whether pursuant to Sections 1941 and 1942 of the California Civil Code or otherwise. an independent intoning contractor for the maintenance of the air conditioning, heating and ve systems serving the Premises, Ps M located on the Premises, together wit led equip mmtm r system located on the Premise, and (iii a e Tint any Landlord installed security system, and dlord elect to contract for any or all of these services Tenant shall promptly reimburse Lao r the cost of such contra , it Ton pt of landlord's nvoice for a e,�w�invoice shall be rendered by Laodlor ant not more often than monthly. Landlord shall have the right but i ated to commene t.e a i0 da d' u T t d at anv amt or I 9.5 Alterations. Tennant shall not make agy'alterations to the Premises wbatsoever without Landlord's prior written consent, which shall be granted or denied in'ioeordwee with the provisions of paragraph 9.1. Any alterations made by Tenant shall remain on and be surrendered wiib'the Premise upon expiration or termination of this Luse, except that Imdlord may elect, within ninety (90) days Were expiration of the term, or within ten (10) days after expiration or termination of the term, to require Tenant to remove alterations that Tmant has made to the premises. If Landlord so elects, Tenant, at its wit cost, shall retore the Premises to a tenantable condition, reasonable wear and tear excepted, before the last day of the term, or within thirty (30) days after notice of election is given, whichever is later. If Tenant makes my alterations to the Premises as provided in this paragraph, the alterations shall not be commenced until fifteen (I5) days after Iandlord has received botice from Tenant slating the date the installation of the alterations is to commence so tbat Landlord can post and record an appropriate notice of nonresponsibility. Page 10'6f 23 ARTICLE 10 INSURANCE 10 1 Use, Rate. Tenant shall not carry any stook,or goods or do anything in, on or about the Premises wbi cb will in any way iocrrue insurance tales on the building in which the Premises are looted. In no event shall Tenant carry on any activities which would invalidate any insurance coverage thereon. Tenant 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 the Premises, but this provision shall not be deemed to limit in any respect Tenant's obligations under Article 14. 10.2 Liability Insurance, (a) Tenant shall, at its sole cost and expense and at all times during the term of this Lease, or any extension tb..+of, m.iaau .nd carry for the joint benefit of Tenant and Landlord, bodily injury and property damage liability ins trans by the terms of which Tenant end Landlord shall be indemnified against liability for any damage or injury to property or person (including death) occurring in, on or about the Premises, or any part thereof, of arising from the use or occupancy thereof, or arising directly or indirectly from soy act or omission of Tenant, its employees, agents, concessionaires, representatives, assigns, guests or licensees. Said liability insurance shall be in an amount of not less than One Million Dollars ($1,000,000.00) combined single limit, and Tenant shall maintain with Landlord at all times during the term of this Lase a curreotly effective certificate of insurance satisfactory to Landlord from each insurance Cartier providing such insurance coverage. Tenant is self-insured for this amount. . . (b) Landlord shall maintain a policy or.policies of comprehensive liability insurance issued by cot or more insurance carriers, insuring against liability for injury to or death of persons and loss of or damage to property occurring in or on the common arm, except any portion thereof subject to Tenant's exclusive control. together with Tenant' pat m connection with any claim 1" lle re 30,3 Worker's Comoensetion Irtsurnnce. in compliance with a s ta t tty insurance with minimum coverage of Five 10 4 Fire hsurance. - - (a) landlord shall pay for and shall maintain m.full force and effect during the term of this Lease a policy or policies of insurance coveting the buildings located on the Premises for the perils normally insured under the California Standard Fire Insurance Policy with extended coverage, vandalism and malicious mischief, and sprinkler leakage (if applicable) endorsements attached. The Landlord may maintain in lieu of the extended coverage and vandalism and malicious mischief endorsements, other broad form or all-risk eodorsementa whicb may broadeo the perils insured against. In addition, the Landlord.may maintain flood and earthquake insuranca coverage in its sole discretion. The property coverage shall be in an amount equal to the full replacement cost (without deduction for depreciation) of the buildings insured. The policy may contain the standard form lender's loss payable endorsement issued to the bolder or holden of a mortgage or decd of tool•-sxorcd by the Premises. �ena�abalFwi��wa-iii premiums incurred by Landlord for,.suoh�'iusurnnce within ten (!0) da s o eoanl of Lan statement therefor. If such-insurance cov m addition to Tenant's Premises, Tenant's share of the prcttilunv s o t e premium allocation made by the insurance carrier and, if the ce such stkration, then on the basis which Tenant's floor arm burs to the r�na wwsa+ir sm _-- - A A R Page 11 Of 23 -e&)— ;980 shall Fag FOP smi wiow6 ip hil famo mj As" 4-619 We I policies of insurance covering Tenant's stock,in trade, trade firm of er perSOn]I property located in, 0a or about the Pr a mans in connection with its business. Such covers n s normally insured under the California Standard Fire Insurance Policy 7ra a 5 Biness Interrootion Insurance. full forcct during the term of this Lease a policy of insurance rent will be paid to Landlord iod of not less than ti n sea are destroyed or rendered inaccessible by a risk insured fire and extended coverage insurance, with vandalism and malicious miutuef 10,6 Waiver of Suhroeation. Each party (,ip}ured')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 danWga 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 carved by the insured. 10-7 General Reouirements. .(a) All policies of insurance required to be;carried hereunder by Tenant shall be written by companies satisfactory to Landlord and liceosed to do business in the Slate of California: Y': s (b) Each policy of public liability insurairow required to be carried by Tenant shall be primary and noncontributing with soy insurance carried by the Landlord. (c) Each policy required to be carried by.TonaeGShall.expressly include, severally and not collectively, as additional named insured thereunder,.Lasdlard and any person or firm designated by Landlord, u 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 mimed.insured. The policies of insurance required to be carried by Tenant, or duly executed certificates evidencing them, together with satisfactory evidence of the r 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 fixmring or other activity to be carried no 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 is effect, and Tenant shall pay to Landlord the premium cost thereof upon demand with interact at the highcat'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-called '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 Duty to Restore. If the improvements nn the Premises or the Shopping Center are partially or bully damaged by fire or other casualty w as to become partially or totally untenanlablc, which damage is insured against under any policy of fire and extended coverage insurance den.covering the damaged improvements, this Lease shall not Page 12 of 23 tettainate and said improvements shall be rebuilt by Landlord with due diligence at Landlord's expense unless Iandlord elects to terminate this Lease as provided in paragraph 11.2. 11.2 Election to Terminate. If either the improvements on the Premises or the Shopping Center as a whole, are damaged by an insured cas,ialty to the extent of At least twenry-five percent (25%) of their respective replacement cost (cost to repair or replace at the time of loss without deduction for physical depreciation) during the term of this Lease other tbm during the last three (3) lease Years of said term, or to the extent of at bast ten percent (10%) thereof during the tut three (3) years of aid term, or to any extent by an uninsured cause at any time during the lease term, or by an insured or uninsured cause during any extension or renewal of 00 lease term, Landlord shall, within not more than ninety (90) days after such damage, notify Tenant of Landlord's election to terminate this L or to restore the improvements on the use Premises =a such portion of the improvements in the balance of the Sbopping Center as in Landlord's sole discretion is necessary to create an economically feasible commercial unit. If Landlord elects to repair or restore the damaged improvements, then with respect to the Premises, Landlord and Tenant each shall restore them in the acme manner and to the same extent as work was done by each of them in the original construction and fixturiring of the Premises, and the damaged improvements in the balance of the Shopping Center shall likewise be tutored l0 the extent required in the pr eding mntence. If Landlord elects not to restore, as aforesaid, this base shall terminate effective as of the date of such damage upon the giving of notice of election by Landlord as aforesaid. If Landlord elects to restore or fails to give notice of its election as aforesaid, then this Lease shall remain in full force and effect. .113 Rent Adiultment. If this Ltase is not terminated as provided in this Article 11, then during the period of repair and restoration, if and only to the extent that Iem=t's payment obligations under this Rase would not be covered by rental interruption or other insurance required to be carried by Tenant pursuant to the terms of this Lease, the fixed minimum rent shall be abated by that proportion which the floor area rendered unusable m a result of such damage bears to Tenant's total floor ecru before such damage. In no event, however, shall Tenant's share of common area expenses be abated unless the common vca expenses paid by each of the other tenants located within the Shopping Center are abated by Landlord. ARTICLE 12 EMINENT DOMAIN 12.1 Definition. If there is any taking of cc-damage. to all or any part of the Shopping Center or any interest therein because of the exercise of the power of eminent.domain or inverse condemnation, whether by condemnation proceedings or otherwise, or any transfer of any part thereof or my interest therein made in avoidance or threat thereof(all of the foregoing being hereinafter referred to as 'taking') before or during the term hereof, the rights and obligations of the parties with respect to such taking shall be as provided in this Article 12. 12.2 Total Takine. If there is a taking of all of the Premises, this Luse shall terminate as of the date of such taking. 12.3 Partial Taking. If twenty-five percent (25%) or more of the floor area of Tenant's Premises shall be taken, either party shall be entitled to terminate this Luse', or if eweety-five perccot (25%) or more of the floor area of all buildings in the Shopping Center shall be taken, whether Tenant's Premises arc taken or not, Lt dlord (but not Tenant) shall be entitled to elect to terminate this L-nse; and the terminating party shall give the other party written notice of such election not later than thirty (30) days after the date Landlord delivers notice to Tenant that possession of title to the portion of the Premises taken has vested in the coademacr. If neither party gives such notice or less than twenty-five percent (25%) of the floor area of either Tenant's:Premises or buildings in the Shopping Center shall be taken, this Rase shall remain in full force and effect and rent shall be adjusted as provided in paragraph 12.6. 12.4 Termination Date. If this Lease is terminated in accordance with the provisions of this Article 11, such termination shall become effective as of the date physical possession of the condemned portion is taken by the condemning authority. Page 13 of 23 12.5 Repair and Restoration. If this Luse is cot terminated as provided in this Article 12, Landlord may, at its sole expense, restore with due diligence the remainder of the improvements occupied by Tenant to 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 &cope of lbe'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 that which was awarded to Landlord for such taking. 12.6 Rent Adiushont. If this Lease is not terminated as provided in this Article 12, and until such time as Landlord Duty 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 the taking. In no event, however, shall Tenant's share of common arm expenses be abated unless the common area expenses paid by each of the other tenants located within the Shopping Center arc abated by Landlord. 12.7 Award. The entire award or compensation in such proceeding, whether for a total or partial taking or for diminution in the value of the leasehold or for the fro shall belong to and be the property of landlord, provided that Tenant shall be entitled to recover from the condemnor auch compensation as may be separately awarded by the condemnor to Tenant or recoverable from the condemnor by Tenant in its own right for the taking of trade fixtures and equipment owned by Tenant (meaning personal property, whether or not attached to real property, which coax b&=moved without injury to the Premises) and for the expense of removing.and relocating such personal property. ARTICLE 13 INDEMNITY WAIVER 13.1 Indemnity. Tenant shall defend, indemnify.and shall save and bold Landlord harmless from and against any and all liens, claims, demands, actions, muses of4ction, obligations, penalties, charges, liability, damages, loss, cost or expense, 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 soy portion of the common area which is under the exclusive control of Tenant (the Premises and such portion of the common arm which is under the 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 the 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 nay acts or omissions (including, but not limited lo, negligence or willful miscooduct) of Tenant or any inviter,.;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 m erty persons or prop sustained by Tenant or by any other person or firm resulting from the building in which the Premiers are located or by reason of Tenant's Premises or {ray equipment located thereon becoming out of repair, ar through the acts or omissions of any persons present in the Shopping Center or renting or occupying any pan of the Shopping Center, or for loss or damage resulting to Tenant 'or property from bunt, stopped or leaking sewers, pipes, conduits or plumbing fixtures, or for interruption of my 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 furnished to Tenant's Premises or resulting from any accident in, on or about Tenant's Premises or the building in which the Premises are located. ARTICLE 14 OPERATION OF BUSINESS normal operating hours of similar businesses, but at 1 g t ours a day; (ii) adequattly p oyem to bonnie. the maximum business and carry sufficient stock of Page 14 of 23 ► t ti .a a . ' n opslar.l b,.,.R =--- 61-40-1 (iv) keep the Premises and exterior and interior portions of windows, doon and all other glass or plate glass fixtures in a put, clean, sanitary and Safe condition;{ a -'---c-' --. -�-� a-"SW.. 4, gu,L - . - .- T..... :_,_"e. .""rr far MA- macart (vi) use for office or other non-selling purposes only each apace as is reasonably required for Tenant's liusieesr, (vii) refrain from burning any papers or refuse of any kind, or otherwise creating say noxious or offensive odors cc fumes, in the Shopping 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 the public shopping in the Shopping Center ix) observe and promptly comply with all governmental requirements and insurance requirements affecting the Premises or say part of the common area which is under Tenant's exclusive control and promulgated during the term of this Leine; (x) tot use the Premises or suffer or permit the Premises or any part thereof to be used in my master that vvjll;ccoatitute a.nuisance or unreasonable annoyance to the public, to other occupants of the Shopping Center or to the Landlord, or that will injure the reputation of the Shopping Center, or for say extra hazardous purpose, or in say manner that will impair the structural strength of the 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 ogres not to install, eau or to allow to be installed or used, upon the described Premises, say gaming machines or devices without the prior written consent of Landlord, including. but&Llimlled to. video game machines. ARTICLE 15 SIGNS, FIXTURES, RESTRICTIONS RE EXTERIOR 15.1 Fixtures. All fixtures installed by Tenant shall be new or completely reconditioned. Tenant shall not make or cauaa to be made soy attentions, additions or improvements to�thc building, or install or erect or"use to be installed or erected sty signs (including, but not limited to, exterior sigmS,,window signs and signs painted on doors or windows), floor covering, exterior lighting, plumbing, fixtures, Shades of awnings, radio or television antenna, Satellite dish or similar devices, or make say changes to the store front or exterior of the building, not shall tenant install any loud speakers, sound amplifiers or similar devices which,wotnld,be.bard in adjoining suites or outside Tenant's Premises without first obtaining Landlord's written approval met conseoi. Tenant shall present to landlord plans and specifications for such work at the time approval is sought. 15.2 Siasss Tenant will not place or suffer to be placed or maintained on sty 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 sty sign or advertising material within lg imcbes 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 written approval and consent. Tenant further agrees to maintain such sign, awning, canopy, decoration, lettering, advertising matter or other thing as may be approved in good condition and repair at all times. Tenant shall not place or suffer to be placed any merchandiu, equipment or other items outside the building on the Premises. ARTICLE 16 LIENS, Tenant shall keep the Premises and the Shopping Celitt:t tree of any liens or claims of lien arising from any work performed, material furnished or obligations incurred by Tedadt in connection with the Premises. If Tenant disputes the correctness or validity of any claim of lift. Tenant shall, "'thin ton (10) days after written request by landlord, record such bond as will release said property from the lien claimeC'TOnant shall defend, indemnify and hold landlord harmless from and against any all cost or expense, including but not limited to attorneys' fees, arising out of soy lien or claim of lien on the Premises. K' Page 15 of 23 ARTICLE 17 RIGHT OF ACCESS Landlord and its authorized agents and representatives shall be entitled to enter the Premises at all reasonable times for the purposes of. (i) inspecting them; (ii) making repairs which Landlord is obligated to make under this Lease; (iii) curing a default of Tenant; (iv) posting any notice permitted by law that would relieve Landlord from respoasibility for the acts or omissions of Tenant; (v) exhibiting the Premises to prospective buyers, lessees or leaders; and, (vi) posting ordinary signs advertising the Premises for ale 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 the event of any actual or alleged failure, breach or default hereunder by Landlord. (a) Tenant's sole and exclusive comedy shall be against landlord's interest in Ppiog Center. (b) No partner, master lessor, officer, agent or employee a old shall be surd or named as a party in any suit or action, or served with process, or to answer or otherwise plead to any service of process, nor will any judgment be tak t my partner, master lessor, officer, agent or employee of Landlord. Any judgment amst any partner, master lessor, officer, agent at employee of Landlord may be v set aside at my time nurse pro tune. and no writ of execution w01 ever be Imed ag . of soy partner, muter lessor, officer, agent or employee of Landlord. (c) enanes and agreements contained within this Article 18 shall inure to the benefit of and shall be ARTICLE 19 ASSIGNAiENT AND SUBLETTING 19,1 Constnt Reouired. Notwithstanding anythiog to the contrary contained herein, Tenant shall not assign this Luse or any interest herein, or sublet, license, grant any concession or otherwise give permission to anyone other than Ttaant to use or occupy all or any part of the Premise without the prior written consent of Landlord. The ale, assignment, transfer or disposition, whether for value,by operation of law, gift, will or intestacy of(i) twenty-five percent (259.) or more of the issued and outstanding stock of Tenant if Tenant is a corporation; or, Cti) the interest of any general partner, joint venture, association or co-leancy shall be deemed an assignment of this LAW under this puagnph. Landlord and/or Landlord's agent shall be entitled to in application fee of Five Hundred Dollars (S500.00) be paid at the time of application for approval of my 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 cot t to the requested assignment or sublease. 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 throughout the remaining term of this Lease, including any renewal terms, notwithstanding any subsequent or further assignment of this lose, whether or not Tenant his consented to or approved such assignment Nor shall such liability be extinguished or reduced by my later amendment or modifieatim of this Lase, whether or not Tenant approves or=a u to such amendment or modifiotioo. In the event of my assignment or sublease, the assigae or sublessee shall agree in writing to perform and to be bound by all of the covenants of this Law required to be performed by Tenant. Landlord's approval of one assignment or subletting by Tenant of its intern is this Lease shall no be deemed to be an approval army further auigammt or subletting. Q pR Page 16 of 23 ARTICLE 20 NOTICES Wbenever under this Lease provision is made for notice or demand, it shall be in writing and signed by or an behalf of the parry giving the notice or making the demand and served by personal delivery, registered or certified prepaid. n nail or by telegraph. If served by registered or certified mail, it shall be deposited in the United Stites mail, stn e with return receipt requested, addressed to the parry to whom such notice of demand is to be given at the address stated in the Basic Lease Provisions, n the rase may be, and shall be conclusively deemed served on the date indicated on the return receipt and if the receipt is not returned, then fortyeight (68) hours after mailing. If served by telegraph. service to be addressee shall be conclusively deemed made as confirmed by the telegraphic agency making ry y personal delivery, service shall be deemed made as of actual delivery. The address of either patty may be changed for the tu purpose of this paragraph by written notice to the other party. ARTICLE 21 SURRENDER OF POSSESSION 21.1 Surrender. At the expiration or other termination of this Lem. 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 Aoldina Ozer. (a) If Tenant holds over after the expiration of the term hereof with the express consent of Landlord, such holding over shall, in the absence of a written agreement be deemed to have created a tenancy from month-tc-mcntb, terminable on thirty (30) days written notice by either party to the other, at a filed minimum rental equal to two hundred percent (200%) of the Curd minimum renal 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 be construed as consent to such holding over by Landlord. (b) If Tenant fails to surrender the demised premises upon the termination of this Lease, Tenaat 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 Base and conditioned upon performance of all of the provisions to be performed by Tenant hereunder, Landlord &ball secure to Tenant luring 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 Lem, at Landlord's option, shall be subordinate to: (a) any fast and junior mortgages or first and junior trust deeds that may hereafter be placed upon the Premiss and to any advanes to be made tberetmder, Roy iotasst tbereoa and all rsmawals, replamments and extensions thereof, provided that such mortpgsea or benefieiais fast request such subordination and thereafter agree in writing to recognize this Lem in tba event of forsdoaure if TmaA is Page 17 of 23 te_r" ,. not in default, (b) any so-called sale and leaseback of the Shopping Center by Landlord, and (c) any: (i) parking lot agreement, (ii) common area mainttmamee agramcet, (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 my future amendment or modification to any CC&R's. Tenant shall, 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 STATEMEN""I' Tenant shall, at any time and from time to time within five (5) days after written request therefor by Landlord, deliver without con to Landlord a certificate to Landlord or to any proposed mortgagee, tout deed beneficiary• purchaser or successor in interest, certifying the commencement and expiration date of the lease term and that this Lease is that in full force and effect and setting forth the amount and namro of the modifications, defenses or offsets, if any, claimed by Tenant, together with such other information as may be reasonably requested by Landlord. If Tenant fails to deliver such certificate within said five (5) day period, Tenant hereby appoints Landlord as Tenant's attorney-in-fief for the purpose of- completing, executing and delivering the certificate to the person or firm requesting it ARTICLE 25 DEFAULT 2S.1 Notice and Remedies. In 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 called for hereunder, Tenant shall have a period of five (5) days after service of written notice by Landlord specifying the nature of Tenant's default within which to mm such defaults, provided that if the nature of a oon-monetary default is such that it cannot be fully cured within said five(5) day period. Tenant shall have such additional time as may be reasonably necessary to core such default so long as Tenant proceeds promptly after service of Landlord's notice and proceeds diligently at all times to complete said cure; provided, however, that any such notice shall 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 deuiner action. If Tenant fails to comply with the foregoing provisions, Tenant shall be deemed to be in breach of this Lease and Landlord, with or without further notice or demand of any kind, may at its option: (a) Terminate Tenant's right to possession of the Premises because of such breach and recover from Tenant all damages allowed under Section 1951.2 of the California Civil Code, including, without limitation, the worth at the time of the award of the amount by which the unpaid tent for the balance of the term after the time of award exceeds the amount of such renal loss for the same period that Tenant proves could be reasonably avoided; or, (b) Not terminate Tenant's right to possession because of such breach• but continue this Lease in full force and effect and, in such "eat, Landlord may mforce all rights and remedies under this Lease including the right to recover the rent and all other charges due hereunder as such rent and other charges become due hereunder or to inlet the Premises. 251 Tertant's Pro2t=. In the event of default, all of Tenant's property shaU remain on the Premise 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 propary and to use it real or charge free until all 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 253 Notice of Termination. No re-entry or relctting of the Prtmisa shall be construed as an dectioa by Landlord to terminate Tenant's right to possession and this Lease unless a written notice of such intention is gives by Landlord to Tenant and, notwithstanding any such reletting without such termination, Landlord may, at any dims Page 18 of 23 thereafter, elect to terminate Tenant's right to possession and this Lease in the event that at such time Tenant remains in default hereunder. 25.4 Waiver of Noti • - Performance by Landlord. Notwithstanding any provision of this Article 25, if, (i) Tenant fails to comply with any governmental requirement, Tenant shall cat be entitled m notice of default from m Landlord or any right to cure beyond the period within which such compliance may be required by such governmental requirement; (it) if this Lease expressly provides that this Lease may be terminated effective on service of notice, Tenant shall be entitled to cure its default only if the right to cum 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 will jeopardize the Premises or the rights of Landlord, landlord may, with or without notice, elect to perform those acts if 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 compelled to pay or elects to pay any sum of[Honey, including, but not limited to, reasonable attorneys fees, such sum or sums in Paid by Landlord, with interest thereon from the due of such payment at the rate provided in paragraph 25.5, shall be due from Tenant to Landlord on demoted. 25.5 Interest. Any amount due to Landlord not paid wben due:ball bear interest at the maximum rate allowed bylaw from the date due. Payment of such interest shall not exmue or cure any default by Tenant under this Lau. 25 6 Other Remedies. Nothing contained herein shall limit landlord to the remedies set forth in this Article 25 and, particularly, those which are set forth in paragraph 25.1, and upon Tenant's default, Landlord shall be entitled to exercise any right or remedy then provided by law, including, without limiadoe, the right to obtain injunctive relief and the right to recover all damages caused by Teeaet's default in the performance of my of its obligations under this lease. Tenant, along with all other remedies afforded herein, shall share the right to my and all other remedies at law or in equity. All remedies shall be distinct, separate and Cumulative. none being to the exclusion of the other. ARTICLE 26 INSOLVENCY 26.1 Breach of Lease. The filing of any petition by or against Tenant under any chapter of the Bankruptcy Act, or any successor statute thereto, or the adjudication of Tenant as a bankrupt or insolvent, or the appointment of a receiver or trustee to take possession of all or substantially all 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 my sate or federal insolvency or bankruptcy act, shall constitute a default under and breach of this Lease by Tenant, regardless of Tenant's compliance with the other provisions of this base, 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 under Article 25. 26.2 0oeratien of Law, Neither this Lase nor any interest herein, nor my estate created hereby, shall pass by operation of law under any sate or federal insolvency or bankruptcy act to any trustee, receiver, assignee for the benefit of creditors or any other person whatsoever without the prior written consent of Landlord. Any purported transfer o in violation of the provisions of this paragraph shall constitute a default under and breach of this Lease, regardless 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 en the service of sucb notice without the necessity of further notice as provided under Article 25. 26.3 Non-Waiver. The acceptance of met 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, shall not preclude Landlord from exerusteg its ( rights under this Article 26 at any time thereafter. Page 19 of 23 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 troy, at any time, engage a manager to operate the Shopping Center on Landlord's event, Teasel shall pay to Landlord, within tea (10) days after ut not more often than monthly, Tenant's ro a qed by such manager (which administrative fee shall not in In addition, Tenant sball pay to Landlord a collection charge of"ry Five Dollars ($75.00) for preparation of each demand for delinauent r=X4wdlor other sums which may be due under this Lease. ARTICLE 29 ATTORNEYS' FEES If either party to this Ltase brings soy action or files any proceeding against the other pa* arising out of this Lr or for the declaration or interpretation of any rights hemmder, the prevailing party therein shall be eatidel 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 parry') without its faols is made a party to litigation instituted by or against the other party ('primary pay'), the primary party shall pay to the secondary party all costs and expenses, including reasonable anorneys' fees and any judgment rendered, incurred by the secondary parry in connection therewith. ARTICLE 30 WAIVER OF DEFAULT The waiver by either party of nay default io 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 the saute or any other wveeant 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 otter sum or portion thereof so aexpted, regardless of Landlord's knowledge of such preceding default at the time of acceptance of such rent or other sum. ARTICLE 31 NO PARTNERSHIP Landlord is not and shill not be deemed to be in any way or for any purpose an agent, employer, principal. partner,joint venom or member of any joint enterprise with Tempt. ARTICLE 32 SUBTENANCIES The value" or other surrender of this Lear by Tenant or a mutual cancellation of this LAsm shall not a feet a merges and sball, st Landlord's coca, terminate all existing subteoauia or operate as an assignment to Landlord of any or all of such mbteoands. w.�Q Page 20 of 23 ARTICLE 33 SUCCESSORS Subject to the restrictions oa assignment or subletting contained herein, this !.ease shall be binding upon and shall inure to the benefit of the parties hereto and their suecesson. The term 'successors' is used berein 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 art or omission of such party. Each covenant and condition of this Leese shall be binding upon all assignem, agents, subtenants, licensees and Concessionaires of Tenant ARTICLE 34 REMOVAL OF TENANT'S PROPERTY Upon the expiration of the term of this Lease or upon any earlier termination hereof, Tenant shall immediately remove, at its own expense, all trade futures, equipment, merchandise and personal property(collectively called 'Lessee's property') which were installed by Tenant or any sublessee, concessionaire or licensee in or upon the Promises; but, if Tenant is in default, Tenant shall Cot remove Temm's property unless notified by Landlord to do so.-In ease of nay injury or damage to the building or my portion of the Premises resulting from the removal of Tent's property, Teams shell promptly pay to Landlord the cost of repairing such injury or damage. In the event Tenant sbould fail to complete sateh removal promptly, Landlord my remove any or all items of Tenant's property from the Premises and dispose of them in any manner consistent with law and Tenant shall pay upon demand to Landlord the actual expense of such remo.-1 and disposition together with interest at the rate prescribed in paragraph 25.5 from the date of payment by Landlord unto repayment by Tenant. ARTICLE 35 EFFECT OF CONVEYANCE If, during the term of this Lease, Landlord conveys its interest in the Premises, or this Lease, they from and afros the effective date of such conveyance, Landlord shall be released and discharged from any and ill further obligation and responsibilities under this Lease, including, but not limited to, those relating to any security deposit held by Landlord, except those already accrued of which Landlord has notice at the time of conveyance. ARTICLE 36 INTERPRETATION/AMENDMENT The captions by which the Articles and paragraphs of this Lease are identified are for coovenienee only and sbill not affect the iaterpretatioa of this Lase. Wherevtr the contest so requires, the singular number shall include the plural, the plural shall include the singular, the neuter gender shall include the muculine and the feminine ganders. If there is more than one signatory hereto ss Tensest, the liability of such sigmtories shall be joint and several. If any provision of this Lease shall be held to be invalid by a court, the remaining provisions shall remain in full force and effect and shall in no way be impaired thereby. It is understood that there art no oral agreements between the parties hereto affecting this Lease or any Addenda attached hereto, and this Lease(together with my Addenda attached hereto) supersedes and cancels any and all previous negotiations, agreements, brochures, agreements Lod understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the Premises desnrtbed herein, and no such extraneous or ancillary material shall be used to interpret or construe the terms of this Lease. Tbem shill be no modification or amendment of this Lease except as may be executed in writing by each of the parties hereto. Page 21 of 23 ` ARTICLE 37 TM EE OF ESSENCE Time is of the essence of each provision of this Lease. All provisions relating to time shall be strictly construed. ARTICLE 38 BROKERS Landlord represents that it has utilized no broker 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 harmless from and against any cost, claim or damage incurred by Landlord as a result of any claim by any broker m other person seeking a commission, finder's fee or similu 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. ARTICLE 40 SECURITY DEPOSIT 40.1 Deposits. Tenant bas 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. Page 22 of 23 ARTICLE 41 OPTION TO RENEW Tenant is hereby granted the option to extend the term of this Lease for ONE(I) FIVE(5) year period, hereinafter referred to as the "Extended Term", 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, 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 Tenn all of the terns 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 ALLAN STEWARD, INC. By '. 4'-� � L�" Title.v-p *"u �, '.Mc APPROVED AS TO FORM AND LEGAL CONTENT JAMES F. IVENMAN TENANT CITY OF SAN BERNARDINO C ATTORNEY By: JUDITH VALLES, MAYOR Page 23 of 23 ADDENDUM TO LEASE AGREEMENT BETWEEN ALLAN STEWARD, INC. (LANDLORD) AND CITY OF SAN BERNARDINO (TENANT) DATED: JANUARY 24, 2000 LANDLORD AND TENANT ACKNOWLEDGE THAT: A. 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') high nor more than two feet (2') wide. LANDLORD TENANT ALLAN STEWARD, INC. CITY OF SAN BERNARDINO By By: JUDITH VALLES, MAYOR Title:� (./W ��L APPROVED AS TO FORM & LEGAL CONTENT JAMES F. NMAN By: 16 ATT ORNE NE Page 23a of 23 :66 "EXHIBIT ' I INTERSTq -r•E 27 5 �Y"I EYIO wn nl yr► Z 2 O C1 n m r` � � dl � a 4`t•� r O Im O Z _ m ` Z y , �ijt 1 N' STREET 7. O 1 1 1 1 w m kl � I1I III � I "i � � O A T m � a o IWI .II II � � r ro I� UIEEr r = n e a 1.1W or y �A D A ].E]E E1 \ O � 1 a 1 ZrvJ_ m M U T ••' ' I u1"If OEA6MO01 f E00 EF T 1°"1 ^ R PAYLESS a ` SHOES -k ' 'O] STREET ®_ EXHIBIT "C" TENANT IMPROVEMENTS Tenant improvements, per the attached floorplan, will be completed by and at the expense of the tenant. • +he-itelf s Endorsement below constitutes Landlord agreement to all improvements noted per attached floorplan. LANDLORD: TENANT: ALLAN STEWARD, INC. CITY OF SAN BERNARDINO By By: Title �FiIJ(. JUDITH VALLES MAYOR APPROVED AS TO FORM & LEGAL C NTENT JAMES N By: MY ATTORNEY , . . . a <� � - - T � \ \ SL' \ Lu C3 \ � � 6 L � (�§' TOO§CC 0 m} o ] w w0 m � \ . , ) 2 § N % a. U. ` /3) � F § $ � -1m o . . � (n < k CIO ` ILI uj kk) § § ) fi U g §of g w ~�-- 2 � m Ir \§ C LU ' - W � � ` (§§ CC i - §_ 0 a i, § o § )§/ § /§ § ) B{� , Z : — All � EXHIBIT "E" DELIVERY ESTOPPEL COMMENCEMENT AND TERMINATION DATE OF LEASE AND LESSEE'S OBLIGATION Pursuant of the terms and conditions contained in this Lease: 1. The Commencement Date of the term of the Lease is, or shall be deemed to be January 24, 2000. 2. The date upon which rent shall commence is January 24, 2000. 3. The date upon which the term of this Lease shall expire is February 1, 2005. 4. The date upon which Tenant received the keys to the Premises is February 1, 2000. DATED this day of January, 2000. LANDLORD ALLAN STEWARD, INC. B Title:► AiA*v, *eA;6,r . APPROVED AS TO FORM TENANT & LEGAL CONTENT CITY OF SAN BERNARDINO JAMES FpPENMAN By: By: CITY ATTORNE JUDITH VALLES, MAYOR Best Marshalls Plaza San Bernardino California Sign Criteria EXHIBIT " D" SIGN CONSULTANT & DESIGN APPROVAL Quiel Bros. 272 South I Street (909) 885-4476 San Bernardino, CA 92410 Fax (909) 888-2239 I. GENERAL Signs are not only effective as store identification but are a source of interest, excitement and good advertising when designed with taste and in harmony with the design standards of the shopping center. The sign regulations herein have been set up for the purpose of achieving the best possible effect for store identification and overall design, while allowing each tenant creativity within the limits of their leasehold. Experience has proven that all stores in the Center benefit by the establishment of sign controls such as herein set forth. II. APPROVALS A. The design and construction of tenants exterior sign must receive written approval by landlord's design consultant prior to fabrication and installation. Landlord's approval shall be based on: 1) Conformity to the sign criteria established for the center, including fabrication and method of installation. 2) Harmony of the proposed sign with the design standards of the Best Marshall Plaza and co-tenants. Landlord has the specific right to refuse approval of any sign which does not conform to the specific criteria set forth herein. B. To secure Landlord's approval, tenant agrees to conform to the following procedure: 1) One copy of the detailed sign design drawing of the sign submitted to Landlord at Allan Steward Inc. 104 E. State ST. #Q Redlands, CA. 92373 AND: 2) Four copies of the detailed sign design drawing of the sign submitted to Landlord's sign consultant at: Quiel Bros. 272 South I Street San Bernardino, CA. 92410 C. Unless Landlord and design consultant have both received the above described plans in the quantities set forth above. Landlord will not approve tenant's exterior sign. The sign drawings are to be prepared b a reputable state licensed sign contractor. The sign drawings must indicate the following information: 1) A scaled storefront drawing reflecting the proposed sign design and all dimensions as it relates to the storefront elevation of tenant's premises. EXHIBIT "D" Formerlv C-1 2) A plot plan indicating location of tenant sign. 3) Sizes of sign letters must be accurately dimensioned and spaced and drawn at a minimum of 112'=1'-(Y" scale. 4) Section through sign and facia to show its construction methods. 5) Plexiglass colors, paint finishes and types of materials. 6) Neon tubing sizes, colors, wattages and intensity. All drawings marked "Disapproved" or"Approved as Noted" must be re-submitted as here and above set forth in paragraph "B" with required corrections. Tenant or its sign contractor will not be permitted to continence installation of the exterior sign, unless the following conditions have occurred: 1) A stamped set of the final sign drawings reflecting Landlord or Landlord's design consultant's approval are retained at tenant's premises at all times during the installation of design and for a period of thirty (30) days thereafter. 2) NOTE! No sign shall be constructed until approved building permits from the City of San Bernardino Building and Safety Department are received. 3) Tenant or it's sign contractor must obtain Landlord's approval of the date the sign installation is to occur, which approval must be obtained no later than 24 hours prior to installation date. III. GENERAL SIGN CRITERIA & RESTRICTIONS A. Each tenant shall be permitted one illuminated Pan Channel Letter sign to be located only on the space and on the surface specially provided for same on the building exterior in accordance with the drawings attached hereto. No other signage is permitted on the exterior of the premises. Tenants with a corner unit will be permitted two signs providing the sign area does not exceed the maximum allowed by city codes or as designated in this sign criteria. B. Sign length shall not exceed 70% of leasehold width or in the event of a sign band end wrap return which is less than leaseline, shall be computed at not to exceed 70% of sign band width. Signable area shall be centered on facia vertically and horizontally. Maximum and minimum letter heights are reflected on page C-6 hereto. Optional logo plaques and special one piece Pan Channel Letters are subject to approval by landlord or his designated agent. C. The advertising or information content on the sign shall be limited to letters designating the store name or established trade logo as set forth in signed lease documents between tenant and landlord. Tenant shall display their established trade names only. The trade name may be used only one time per permitted sign location. No additional advertising will be permitted, ie: "Discount Sales", "Quality Shoes", "Ladies Wear", prices, etc. or miscellaneous brand names included in their operation. EXHIBIT "D" Formerly C-2 D. The face colors and type styles of all signs shall be subject to Landlord's approval. In the event the tenant does not have an established exterior sign identity, the Landlord recommends that the lettering style be designed by the sign contractor to reflect a visually exciting look. Established trade logos and signgage shall be permitted providing they conform to the criteria described herein. E. Logo cabinets used in conjunction with individual letters will be considered a part of the sign, subject to Landlord approval. F. The Tenant shall pay for all signs, their installation ( including final connection, transformers and all other labor and materials) and maintenance. Tenant sign contractor must file, pay for and obtain any licenses, permits and variances as required for sign installation. G. Note, page C-5, C-6, C-7 and C-8 are an integral part of the exhibit. Please refer to these pages for additional information, location and fabrications. H. No box-type signs will be permitted. I. Individual shop address numerals will be installed by the Landlord J. No signs will be permitted on any awning. K. No temporary signs of any nature will be accepted without prior written approval by Landlord. L. No tenant shall affix or maintain upon any glass or other material on the storefront signs unless they shall first have received the written approval of the Landlord, other than the signs shown on the following pages of the criteria. IV. FABRICATIONAND INSTALLATION A. The fabrication and installation of all signs shall be subject to the following restrictions: 1) All Channel Letters are to be fabricated 22 GA. Sheet metal with welded seams filled and buffed prior to painting. Fabricated full welded aluminum letters with aluminum backs will be permitted. Channelume, Channel Classic and Channel Let-R-edge type letters will not be permitted due to rapid deterioration factor (no exceptions). 2) Letter faces shall be 1/8" thick, flat surface colored Plexiglass as manufactured by Rohm & Haas or approved equal. Painted plexiglass will not be permitted. 3) a. Retainer trim cap shall be 3/a" bronze" Plasco" brand trim cap edge. Retaining screws shall be #7 x 3/8 Phillips-type sheet metal screws. All trim cap retaining screws must be painted to match bronze trim cap color. b. 5" deep letter returns shall be painted minimum of 2 coats of #8540A Dark Bronze Dupont Centari acrylic enamel as manufactured by Dupont(enamel finish, to be semi-gloss). EXHIBIT "D" Formerly C-3 4) Neon tubing will be 13 millimeter, 3" on center or less. 5) 60 MA. High power factor transformers shall be used for all neon tube system. 6) PK Housings or Hage connectors shall be used for all neon tube system. 7) All sign letters shall be secured by concealed fasteners, stainless steel or nickel or cadmium plated and pegged out from wall Y4" to allow water runoff. 8) No exposed lamps will be permitted. 9) All penetrations of the building structure required for sign installation shall be sealed in a watertight condition and be patched to match adjacent finish. 10) No sign company labels will be permitted on the exposed surfaces of the signs except those required by Underwriter Laboratories which shall be placed in an inconspicuous location on first letter only. 11) All Channel Letters must have a 3/16" dia. Drain holes at bottom of every letter. All signs shall be fabricated and installed with U.L. approved in compliance with all applicable building and electrical codes. Sign manufacturer will supply a U.L. lable if required by local authorities in an inconspicuous location. 12) The Landlord shall provide primary electrical service terminations to the signage area on the rear side of the parapet wall. 13) All signs shall conceal all necessary wiring, transformers, ballasts, starters and other necessary equipment within their individual letters or behind storefront construction. 14) It is the responsibility of the tenant's sign contractor to verify all conduit and transformer locations and service prior to fabrication. 15) Each tenant, or it's sign contractor, shall be responsible for the repair of any damage to the building caused by the installation of said tenant's sign. 16) Each tenant shall be responsible for the performance of it's sign contractor. 17) Tenant shall be responsible for removal of his sign within (30) days after vacating the site. Removal of the sign shall include the repair of the wall surface back to the original condition. 18) Installing sign company must provide one color photograph (Polaroid or equal) of installed sign to be sent to sign consultant for approval along with a photocopy of a final approval by city inspector prior to payment of balance by tenant. EXHIBIT "D" Formeriv C-4 V. NON-CONFORMANCE A. No field installation changes are permitted without first notifying design consultant in writing. If in the event any sign is changed as to placement and location which differs from plan, sign company will be responsible to repair and relocate sign proper placement at sign company's expense. B. Any sign that is installed by tenant which is not in conformance to the approved drawings shall be corrected by tenant within fifteen (15) days after written notice by Landlord or Landlord's sign consultant. In the event tenant's sign is not brought into conformance within said fifteen day period, then Landlord shall have the option to correct said sign at tenants expense. EXHIBIT "D" Formerly C-5 M r z = 2 / IA nc \ Z } ? gE5 \ \ z � M ) / / «k « LA 2 . ` r � N G - _ _ -0 , . 2 \ 0 --4 \ o > rO z z55 = § M >0 ( 7 > 0 Z E m � ouc = m ! fen = d) t E \ * MC> { R / -0 0 k ƒ % \ \ ] f / 4 ° \ f � § _ ) \ (D C 2 2 . � � C/) � � � nZ � 2 m ; a m =O � r O 73 o ■ M E1 . n q e m 7 fo > n \ 3,\ 3 q % % « ; 1 2 | i $| : 0 r g n / @ % �_ CJ � | f ! | z : ° q § ! 3 2 / f \ & k \ % N5 a = O \ : \ % \ wel : aim | o ■ | r q k § § n ! || \ > / .c a > 2 m / G 2 $ B | |$ C $ E�X|[ 2 . s urn emrG aw SUp£ri O[ es �qaH�� PLAZA -- D rj Cn nc N r C � 1 - C m ! S I N co ra U p �y )I W. 9 en 7 Superior Su=ar.Cs m El_CtriCal _ G2C y AG�'erhSltig $y5._—TS — _ =•^• �- D �- - rn• •.� eau -u3.0•f ' CJ 2 Co. 77 7--g SLC�.a� M��6 A o ccz m - 0�7E� SCCCc�L _� G2dWlNG� NUMr Vl e Il "•. 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