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HomeMy WebLinkAbout22 PoliceCITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Lee Dean, Chief of Police Dept: Police Date: August 3, 1999 Subject: ORlu"INAL Synopsis of Previous Council Action: Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the execution of an agreement with World Plaza L.L.C. to lease certain real property for the Area "C" Community Service Office and repealing resolution No. 89- 451. November 20, 1989 — Resolution No. 89 -451 authorizing the execution of an agreement with Sterling Plaza Partners to lease certain real property to be used as a Police Community Service Office for Area "C ". Recommended Motion: Adopt Resolution Contact person: Lt__ Mike Gile Phone_ 384-57 ?1 Supporting data attached: Yes Ward: Seven FUNDING REQUIREMENTS: Amount: $1 per year x 5 years =$5 in lease payments Acct. No. 001 - 213 -5181 Council Notes: $27,500 Tenant Improvements Acct. No. 123 - 555 -5505 (Acct_ Description) 1()()7-1%)81 1 FRCS (Local Law Enforcement Block Grant) Finance:(�� Agenda Item No. ql?lqq CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report SUBJECT: Approval of Resolution for the Relocation of Area "C" Community Service Office. BACKGROUND: We currently have an opportunity to relocate the Area "C" Police Community Service Center, which will enhance the area command and provide an attractive, functional environment for department personnel and community members. Since 1984, the Police Department has adopted Community Oriented Policing and established area commands throughout the city. Currently there are five area commands, each having at least one community service office. In December 1987, a study entitled "An Analysis of Community Oriented Policing in the City of San Bernardino" was conducted to determine the appropriate location for the community offices based on established criteria. The specific criteria included optimal visibility, adequate parking, central location within the area command, and convenience to the public. Currently, the Area "C" Community Service Office is located at 2025 N. Sterling Ave, Ste. "G ". The rent for the Sterling office is $1 per year. The new location, 1535 E. Highland Ave, Ste "C ", is about 6/10 of a mile west of the current location and the rent will remain the same. The Highland Avenue location has easy access from two major thoroughfares; Del Rosa and Highland Avenues. This new location continues to allow the personnel to provide the Area "C" residents and businesses excellent, professional service. Our current office is located in the Pacific Bell telephone service area. Since the Police Department is in the GTE telephone service area all of our phone are issued by GTE. Having these numbers routed though Pacific Bell has created non - repairable problems. Due to the incompatibility of the two telephone systems, a problem will always exist in our equipment functioning adequately, even to the point of being non - operational for days at a time. Our computer system is networked, via phone lines, to the department system as well as state provided services. There is no way to cure the problem that exists with using two phone companies. We must return to GTE service at the area command office to obtain a quality network with our computer and phone systems. The police department has decentralized some of its services to each area command office including; Detectives, Crime Prevention personnel, and POP officers. In adding the personnel, we have discovered the square footage of our current office is inadequate to provide a functional working environment. The new location will increase office space by about 1000 square feet and it complies with the site selection criteria as established in the December 1987 study. A lease agreement between the City and World Plaza L.L.C. will provide the new location at a cost of $1 per year, for a term of five years with an additional five -year option. Taking advantage of this opportunity will increase the office space to a size suitable for the personnel a resources stationed there. The proposed location will be more centrally located in its service area and will rectify the telephone problem by allowing us to return to direct GTE telephone service. The new Highland office provides for the professional image associated with the Police Department. It also provides the necessary space for expansion and will remain consistent with the appearance of the other command offices. FINANCIAL IMPACT: A one -time cost of $27,500 is estimated for this relocation. Included in this estimate are $25,000 for tenant improvement /remodeling costs and $2,500 for improvements to the air conditioning system. Funding for this cost has been identified in the FY 1997 -98 LLEBG (Local Law Enforcement Block Grant). Future annual recurring building maintenance costs are anticipated to be approximately $1,400. This recurring cost will be included in the FY 2000 -2001 Police Department budget. RECOMMENDATION: Adopt the Resolution authorizing the execution of a lease agreement with World Plaza L.L.C. for the building space located at 1535 E. Highland Ave. Suite C. Said agreement will cost $1 per year for the five -year term with a five -year option. The building space will become the Area "C" Police Community Service Office. A copy of the lease agreement including Exhibits "D" and "E" and the original site plans, Exhibit A,B,C, and Cl, will be maintained and filed at the Police Department, authorized per Deputy City Attorney William Simmons. The original lease agreement including Exhibits "D" and `B" will be forwarded to the City Attorney for approval as to form and content and necessary action taken to have the lease authorized and signed. D 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GOpV RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH WORLD PLAZA L.L.C. TO LEASE CERTAIN REAL PROPERTY FOR THE AREA "C" COMMUNITY SERVICE OFFICE AND REPEALING RESOLUTION NO. 89 -451. BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and directed to execute on behalf of said city and agreement with World Plaza L.L.C., a California corporation, to lease space for the Area "C" Police Community Service Office, a copy of which is attached hereto and marked Exhibit "A" and incorporated herein by reference as though fully set forth at length. SECTION 2. Resoultion No. 89 -451 is hereby repealed. SECTION 3. This resolution is rescinded if the parties to the agreement fail to execute it within sixty (60) days of the passage of this resolution. /// lII r.- 1 2 3 4 5 6 7 8I 9 10 11 12 13 14 15 16 17 18 19 2C 21 Z 2q 24 T 2E 2j 2E RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH WORLD PLAZA L.L.C. TO LEASE CERTAIN REAL PROPERTY FOR THE AREA "C" COMMUNITY SERVICE OFFICE AND REPEALING RESOLUTION NO. �89 -451. I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and Common Council of the City of San Bernardino at a joint regular meeting thereof, held on the 16th day of August, 1999, by the following vote, to wit: Council Members: AYES NAYS ABSTAIN ABSENT ESTRADA LIEN MCGINNIS SCHNETZ VACANT ANDERSON MILLER City Clerk The foregoing ordinance is hereby approved this day of , 1999. Approved as to Form and legal content: JAMES F. PENMAN, C W. Judith Valles, Mayor City of San Bernardino 1999 -222 mclellpzly LEASE AGREEMENT BY AND BETWEEN WORLD PLAZA L.L.C. (a California corporation) ("LANDLORD ") CITY OF SAN BERNARDINO ( "TENANT ") DATED: AUGUST 4,199 9 1999 -222 0, TABLE OF CONTENTS 1 Eti`ective Date Tenant 5 1 Tenants Trade Name Rent 1 Premises Address 1 Premises Size 1 Term 5 1 Fixturing Period Commencement 4.5 First Partial Month 1 Fixed Minimum Rent 1 Rental Adjustment Date 2 Percentage Rate qbrpercentage Rentao lnitial Estimated Common Area Expenses 2 Use of Premises 2 Security Deposit 2 Broker 2 Addresses for Notices 2 OPERATME 2 PROVISIONS 2 ARTICLE I Premises 1.1 Leased Premises 2 1.2 Construction of Improvements 2 1.3 Fixturing Period 3 1.4 Tenants Acceptance of Premises 3 1.5 Rental Commencement Date 3 1.6 Changes 3 1.7 Relocation 3 3a ARTICt.0 Business Rights and Restrictions 2.1 Use 3 2.2 Environmental Restrictions 3 2.3 Use Restrictions Aamf -i Term 5 ARTICLE�4 Rent 4.1 Fixed Minimum Rent 5 4.2 Percentage Rent 5 4.3 Rental Adjustment 5 4.4 Late Pay - 4.5 First Partial Month 5 4.6 Gross Sales 4.7 Records 4.8 Audit 7 1999 -222 Common Area 5.1 Definition 7 5.2 Use 7 5.3 Maintenance 7 5.4 Records 7 5.5 Tenants Contribution 7 5.6 Operation and Control 7 5.7 Employee Parking 5.8 Obstruction FIRINE61111w. Merchants Association r: 1 Tares 7.1 Personal Property Tax 7.2 Real Property Taxes 9 :1 Utilities 9 ARTICt.E. 9 Repairs and Alterations Use, Rate 9.1 Leasehold Improvements 9 9.2 Landlord's Repairs 9 9.3 Tenants Repairs 10 9.4 Service Contracts 10 9.5 Alterations 10 10.5 10 , ;4910144wl Insurance 10.1 Use, Rate 11 10.2 Liability Insurance 1 10.3 Worker's Compensation pensation Insurance 1 10.4 Fire Insurance 11 10.5 Business Interruption Insura 11 10.6 Waiver of Subrogation 12 10.7 General Requirements 12 10.8 Blanket Insuranr� 12 12 :: 1 Damage and Restoration 12 11.1 Duty to Restore 12 11.2 Election to Terminate 13 11.3 Rent Adjustment 13 a 1999 -222 ARTICLE 12 Eminent Domain 13 12.1 Definition 16 13 12.2 Total Taking ART1Cl.E�20 13 12.3 Partial Taking 17 13 12.4 Termination Date 13 12.5 Repair and Restoration 21.1 Surrender 14 12.6 Rent Adjustment 17 14 12.7 Award 14 ARTICI;.E 13 Indemnity, Waiver 14 13.1 Indemnity 14 13.2: Waiver 14 E13091PI�L] Operation of Business 14 P-MOMM Signs, Fixtures, Restrictions Regarding Exterior 15 15.1 FD tares 15 15.2 Signs 15 ARTIC -E 16 Liens 15 ARTLC!_E 17 Right Of Access 16 ARTICLE 18 Limiitadon on Liability 16 ARTICLE 19 Assignment and Subletting 16 19.1 Consent Required 16 19.2 General Conditions 16 ART1Cl.E�20 Notices 17 ARTIC -E21 Surrender of Possession 17 21.1 Surrender 17 21.2 Holding Over 17 iii .. 1999 -222 ARTICI_E 22 Quiet E ?njoyment Gr :igloiR=W*l 17 Subordination 17 Offset Statement 18 UM I M Default 25.1 Notice and Remedies 18 18 25.2 Tenants Property 18 25.3 Notice of Termination 18 25.4 Waiver of Notice - Performance by landlord 19 25.5 Interest 19 25.6 Other Remedies 19 s:I M g • Insolvency 19 26.1 Breach-of Lease 19 26.2 Operation of Law 19 26.3 Non - Waiver 19 ARTICLE27 Remedies Cumulative ARTICLE 28 NA Management of Shopping Center - Collection Charge 20 P-1 i I Attorneys' Fees 20 Waiver of Default 20 , 31L0MwTil W No Partnership 20 Subtenancies 20 IV 1.999 -222 cc Successors 21 ARTICLE_34 Removal of Tenant's Property 21 ARTICLE Effect of Conveyance 21 ARTICLE interpretation/Amsndment 21 ARTICt,E 37 Tim,! of 22 ®-' Brokers 22 Corporate Resolutions 22 ARTICLE 40 Security Deposit 22 40.1 Deposits 22 40.2 Performance 22 ARTICLE 41 Option To Renew 23 Addendum To Lease Agreement 23a TABLE OF EXHIBITS Shopping Center "A" Site Plan — "B" Landlord Improvement Specifkatlons "C" Sign Criterta air Delivery Estoppel 'E' r tabl�artw 1 ...mow ..• - -.._ .w...� —__ Kbw _ 1999 -222 SHOPPING CENTER SPACE LEASE THIS LEASE ( "Lease') is entered into as of the date set forth below by and between WORLD PLAZA L.L.C., a California corporation ( "Landlord ") and CITY OF SAN BERNARDINO, ( "Tenant "). RECITALS This Lease is made and entered into with respect to the following facts: A. Landlord is the owner of the Premises (as hereinafter defined), or is the Tenant of the Premises pursuant to the terms of a Lease under which Landlord is entitled to Sublease the Premises to Tenant. B. Tenant desires to lease the Premises from Landlord. C. Landlord is willing to make certain improvements to the Premises as per Exhibit "C" & Exhibit "C -1" attached, and to lease the premises to Tenant upon the terms and conditions hereinafterset forth. NOW, THEREFORE, the Parties hereby agree as follows: BASIC LEASE PROVISIONS Effective Date .............................. Tenant: ........ ............................... Tenant's Trade Name: .................... . Premises Address: .......................... September 1, 1999 City of San Bernardino San Bernardino Police Department Community Police Facility 1535 E. Highland Ave, Ste "C" San Bernardino, CA 92404 Premises Size: ............................... Approximately 2,245 net rentable square feet, consisting of approximately thirty -six feet six inches (36'8 ") of frontage and approximately sixty -one feet eight inches (61'8 ") of depth. Term: ....................................... Sixty (60) months, computed from the first day of the first calendar month on or after the Rental Commencement Date. The Rental Commencement Date shall be fixed in a Delivery Estoppel to be executed by Landlord and Tenant in the form attached hereto as Exhibit "E ". 1999 -222 Fixed Minimum Rent: ...................... Rental Adjustment Date: .................. Percentage Rate (forPementage Rental):...... Initial Estimated common Area Expenses: Use Of Premises: ............................ Security Deposit: ............................ Broker......... ............................... Addresses For Notices: LANDLORD WORLD PLAZA L.L.C. Attention: Mr. J. Torkan Esq. 1909 E. Gage Ave. Los Angles, CA 90001 (323) 589 -9555 One ($1.00) Dollar per year, payable upon occupancy in full for the 5 year Term of the Lease. (i.e. $5.00) Not Applicable. $ Zero Percent ( 0 %). Zero ($ 0) per square foot of Premises Size per month. Community Police Facility. (The Premises shall be used solely for the use stated and for no other purpose) Zero ($ 0). Not Applicable. TENANT CITY OF SAN BERNARDINO Attention: Chief of Police 710 North "D" Street San Bernardino, CA 92401 These Basic Lease Provisions are intended to supplement and /or summarize the provisions set forth in the Operative Provisions of this Lease. If there is any conflict between any provisions contained in these Basic Lease Provisions and the Operative Provisions of this Lease, the Operative Provisions of this Lease shall control. OPERATIVE PROVISIONS ARTICLE 1 PREMISES 1.1 Leased Premises. Landlord hereby leases unto Tenant, and Tenant hereby leases from Landlord, those certain Premises (consisting of land and buildings and improvements) located as set forth in the Basic Lease Provisions (hereinafter referred to as the `Premises'). The Premises are outlined in red on Exhibit `B" attached hereto and made a part hereof. The Premises are part of the shopping center (hereinafter referred to as the "Shopping Center ") described in Exhibit "A" attached hereto and made a part hereof. The Premises with consist of approximately the number of square feet set forth in the Basic Lease Provisions 1999 -222 Construction of Improvements. Landlord shall improve the Premises in accordance with the plans and spacificatioas described in EXHIBIT 'C' which is attached hereto and incorporated herein by this reference. i Exhibit "C -1" 1.3 Fixturine Period. improvement obligations (hereinafter referred to as the 'Completion Date') at least the orth in the Basic Lease ;Provisions prior to the Completion Date (the 'Fi ement'). After Landlord notifies Tenant of the: Completion Date, and a requirements of Section 9.5 of this Lease, Tenant shall have the ng °ht to enter 1h& purposes of equipping and fizturing the Premises, so long as such entry does not interfere In the event that 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. 1.4 Tenant's Acceptance of Premises. Within five (5) days after Landlord has notified Tenant that the improvements to the Premises have been substantially completed (whether or not Tenant is then in possession of the Premises as Permitted in paragraph 1.3), Tenant shall deliver to Landlord a list of items that Tenant deems necessary for Landlord to:complete or correct-in order for the Premises to be acceptable. Landlord shall complete or correct each item contained in the list delivered by Tenant to Landlord other than those which Landlord may contest. If Tenant fails to deliver the list to Landlord within the five (5) day Period described in this paragraph. Tenant shall be deemed to have accepted the :Premises as being in a good and tenantable condition and shall be deemed to have approved the construction as having been completed in a good and workmanlike fashion. In the event Tenant does deliver such list to Landlord within the five (5) day period described in this paragraph, Tenant shall be deemed to have approved the construction as having been completed in a good and workmanlike fashion and shall be deemed to have accepted the Premises as being in a good and tenantable condition with respect to all matters except those described in the list. I.5 Rental Commencement Date. The Rental Commencement Date shall be fixed in a Delivery Estoppel to be executed by :Landlord and Tenant within five (5) days after Landlord has notified Tenant that the improvements to the Premises have been substantially completed (whether or not Tenant is then in possession of the Premises as permitted in paragraph 13), and which shall be in the form attached hereto as Exhibit 'E'. In the event that Tenant fails to execute the Delivery Estoppel, the Rental Commencement Date shall be deemed to be the date upon which Landlord notifies Tenant that the improvements to the Premises have been substantially completed. 1.6 Chances. Landlord shall 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 and egress 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 are located (but such change shall not be made 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 RESTRICTIONL3 2— H. Tenant shall have the right to use the Premises for the use set forth in the Basic Lease provisions. No other use of die 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 governmental 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 with respect nave 3 of 23 1999 -222 1.7 Bdaudon of Tenant. Landlord shall have the right at any time and from time to time, upon ninety (90) days prior written notice to Tenant, to relocate Tenant to other Premises (the `Relocation Premises-) within the shop buildings, subject; however, to the following terms and conditions: A. The Relocation Premises shall have approximately the same rentable square footage as is contained in the Premises; B. The Relocation Premises shall be leased to Tenant on the same terms and conditions as provided in the Lease, except that if the rentable square footage in the Relocation Premises is more or less than that contained in the Premises, there shall be a proportionate adjustment of Base Rent, and Tenant's share of the 'costs and expenses of operating and maintaining the Center Common Facilities,' based upon the rentable square footage in the Relocation Premises; C. Landlord shall pay to Tenant expenses reasonably incurred by Tenant in the physical relocation of 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 (90) days period, shall mutually agree in writing upon; 0 the scope and cost of all leasehold improvements to be constructed at the Relocation Premises, which shall be substantially similar to those of the original leased Premises, adjusted proportionately for size; 01) the extent of Landlord's contribution to the 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 terms. If Landlord and Tenant cannot so agree, then in Landlord's reasonable discretion, Landlord may elect to either; (a) submit the dispute to binding arbitration for resolution, or (b) upon written notice to Tenant within thirty (30) days after the expiration of said ninety (90) day period, to terminate this Lease by thirty (30) days written notice. E. If Landlord elects to exercise its right of relocation, Tenant will be given the choice of spaces within the shopping center (See Exhibits `A' & `8' aXached) that are available for tenancy and of comparable size. Tenant's choices would not include spaces occupied by other tenants or spaces on which a commitment had been made to another party. Also, Tenant's choices would be limited to only already completed buidings. PqP 3-0 1999 -222 to the Premises or with respect to the use or occupation thereof. Tenant shall not do or permit to be done anything which will invalidate or increase the cost of any fire, extended coverage or any other insurance policy covering the Building Complex and /or property located therein and shall comply with 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 additional 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. Tenant shall not do or permit anything to be done in or about the Premises which will is any way obstruct or interfere with the rights of other tenants or occupants of the Shopping Center, or injure or annoy them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upon the Premises. 2.2 Environmental Restrictions. Tenant shall not engage in any activity on or about the Premises that violates any Environmental Law, and shall promptly at Tenant's sole cost and expense, take all investigatory andior remedial action reasonably required by Landlord or ordered or required by any governmental agency or Environmental Law for clean -up and removal of any contamination involving any Hazardous Material created, caused directly or indirectly or materially contributed to by Tenant. The term 'Eaviroameatal Law' shall mean any federal, state or local law, statute, ordinance or regulation pertaining to health, industrial hygiene or the environmental conditions on, under or about the Premises, including without limitation, (i) the Comprehensive Environmental Response, Compensation and Liability Act of 198Q ('C:ERCLA'), 42 U.S.C. Sections 9601 et seq.; (ii) the Resource Conservation and Recovery Act of 1976 (- RCRA'), 42 U.S.C. Sections 6901 et seq.; (iii) California 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 (vii) California Civil Code Section 3479 et seq., as such laws are amended and the regulations and administrative codes applicable thereto. The term 'Hazardous Material' includes, without limitation, any material or substance which is (a) defined or listed as a 'hazardous waste% 'extremely hazardous waste', 'rextrictive hazardous waste' or 'hazardous substance' or considered a waste, condition of pollution or nuisance under the Environmental Laws; (b) petroleum or a petroleum product or fraction thereof, (c) asbestos; and/or (d) substances known by the State of California to cause cancer and/or reproductive toxicity. It is the intent of the parties hereto to construe the term 'Hazardous Materials' and Environmental Laws' in its broadest sense. Tenant shall provide all notices required pursuant to the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tenant shall provide prompt written notice to Landlord of the existence of Hazardous Substances on the Premises and all notices of violation of the Environmental Laws received by Tenant. Tenant shall not bring onto, create or dispose of, in or about the Premises or the Project, including but not limited to its sewage or storm drain systems, any Hazardous Substances. Notwithstanding the foregoing, Tenant may utilize the Premises for the storage of Hazardous Substances which are reasonably and actually required in the normal operation of Tenant's business, so long as Landlord has not given Tenant written notice prohibiting the storage or use of the specific Hazardous Substance in question, provided that Tenant shall not store excess quantities of any Hazardous Substances in the Premises, and shall in no event store or warehouse quantities of Hazardous Substances in the Premises in excess of that amount which would be consumed or sold by Tenant's normal operations within sixty (60) days. All Hazardous Substances stored within the Premises shall be clearly labelled and adequately safeguarded so as to avoid any spill 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 any fire sale:; (iii) conduct any closeout sale except at the expiration of the lease term; or, (iv) sell any so- called '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. nc oaee 4 of 23 1999 -222 ARTICLE 3 & Exhibit "C -1" TER�NM The Term shall commence when Landlord has substantially completed construction of the Premises and the Shopping Center is which he Premises are totaled pursuant to the provisions of EXHIBIT 'C', or on the date upon winch 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 as set forth in the Basic Lease Provisions. In the event that Landlord is unable to deliver possession of the Premises to Tenant within eighteen (18) months following the execution of this Lease, this Lease shall automatically terminate and be of no further force or effect. ARTICLE 4 RENT 4.1 Fixed Minimum 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 Lease Provisions. 4.2 Percentase 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 r as defined below) in any month exceeds the fixed minimum rent payable during the same month. Within ten (10) days after the end of each calendar the term hereof, commencing with the tenth (10th) day of the month following the commencement of as hereinabove provided), and ending with the tenth (10th) day of the month 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 representative o to be correct, showing the total gross sales made in, upon or from the Premises during the prec ,endar month, and shall accompany each such statement with a payment to Landlord equal to the percentage 4.3 Rental Adiustment. he egjwimeei date set forth in the Basic Lease Provisions as the rental adjustment date, as follows: The base for determining the adjustment shall be the Consumer Price rban Consumers, for the Los Angeles- Anaheim - Riverside Area (1982 -84 100) published by the ter Department of Labor, Bureau 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 f oath which is three (3) months prior to the adjustment date ( Extension Index) has increased over the g Index, the fined minimum rent for the following year (until the nett teat adjustment) shall multiplying the fixed minimum rent for the initial full month of the term by a fraction, the nume :ch is the Extension Index and the denominator of which is the Beginning Index; provided, however, that Index shall be converted in accordance with the conversion factor ub ' treat of Labor, Bureau of Libor Statistics. If the Index ' urtng the term of this Lease, such other government rode . _ it is replaced shall be used in order to obtain substantially the same result as would have 4.4 Late Payments. Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be 1999 -222 extremely difficult to ascertain. Such costs include, but are not limited to, processing charges, accounting charges and We 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 bank 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 Tenant'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 1-irst Partial Month. If the commencement date occurs on a day other than the first day of a calendar month: (a) Fixed minimum rent for the partial month shall be prorated, based upon a thirty (30) day month, and as so prorated shall be paid on the commencement date, is addition to the rental due for the first full month of the term. - Lease, and the daily minimum rent provided in this uc in addition to minimum rent paid fort s in computing the percentage rent payable for that 4.6 Sales (i) 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 canvasing, and attributable to the Premises whether or not filled elsewhe . and. (iii) All gross income of Tenant from any opera ' , at, from or thsough the use of the Premises,. 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: (i) Cash refunded or it allowed on merchandise returned by customers. (ii) Sales , excise taxes, or other similar taxes. (c) The Tenant' as used in this paragraph includes the named Tenant and any agenntemployee, li or concessionaire of the named Tenant, or any other person or firm conducting b ess in, at, 4.7 Records• concessionaires to keep and preserve, fora period of not less than three (3) years foll o e original term of this Lease or any extension thereof, complete, accurst r of all amounts received during each lease year is the Premises, includ' register detail tapes. However, in the case of a controversy Cage rent payable hereunder, Tenant shall keep and preserve said records until the nc oace 6 of 23 1999 -222 bearing directly on Tenant's gross sales hereunder. In additi ord a copy of Tenant's California State Sales T I 17wing the date on which such return is filed with the Franchise 4.3 :audit. transacted in the Premises, whether or not included in 'gross sales'. If the audit di tements for the period audited are inaccurate, adjustment shall be made item t cation by Landlord. If the audit further discloses that Tenant has understated v ut y two percent (2%) or more, Tenant shall immediately pay the cost of they i together with any amounts due Landlord as a result of such und�tatement, which amounts ARTICLE CONLMON AREA 5.1 Definition. The common area is that area within the Shopping Center which is'.9tither occupied by buildings (excluding roof overhangs and canopies, columns supporting roof overhangs and canopies, and subsurface foundations) nor devoted perutanently to the exclusive use of a particular Tenant, except that areas containing pylon signs and buildings or structures wbich are used with respect to the operation of the common area shall be deemed to be part of the common area. 5.2 fie. During the lease term, Tenant, its concessionaires, licensees, invitees, agents, customers and employees shall have the nonexclusive right to use the common area in common with Landlord, other owners of portions of the Shopping Center, other lessees, and their respective concessionaires, 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 area in good and sanitary order, condition and repair, including making replacement where necessary, and in compliance with all governmental requirements, including, without limitation, (i) managing; (ii) cleaning and removing rubbish and dirt; (iii) providing labor, payroll taxes, materials and supplies; (iv) providing all utility services utilized in connection therewith; (v) maintaining, repairing, replacing and providing reserves for replacement and remarking paved and unpaved surfaces, curbs, directional and other signs, landscaping, lighting facilities, drainage and 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 area; 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). diald *014 be Offfided 5_4 Records. These records shall, upon reason ustness ours at the offices of Landlord for Tenant's Contribution. , fixed minimum rent to Landlord, Tenant's pro rata share of the amount of all expenses descri ph 5.3. Tenant's pro rat! share shall be equal to the ratio which Tenant's floor area bears to r area in the Shopping Center, whether or not then occupied. Tenant's monthly payment o i i all be based upon equal monthly installments which have been estimated in advance by Landlo icular calendar year. Landlord may, within sixty (60) days after the end of such year, or as soon r as may be practical, prepare an accounting of the actual common area expenses incurred during S , upon completion of any such accounting shall invoice-Tenant, or allow as a credit against the installments next due, as the case may be, the difference between Tenant's share of the actuaXm area expenses incurred during such year, and the amount actually paid by Teewwt with respect to co-'on nc oaee 7 of 23 1999 -222 possible, to as amount equal to one- twelfth (1/12) of the actual tpated by Landlord to be encountered during the cu s are of coma area expenses shall be the amount set forth in the 5.6 Operation and Control. Landlord shall have general possession and control of the entire common area and may, from time to time, adopt rules and regulations pertaining to the use thereof. Landlord shall, except as otherwise provided herein, operate and maintain the common area during the Iease term. The manner in which the common area shall be operated and maintained and the expenditures therefor shall be in Landlord's sole discretion. Landlord reserves the right to appoint a substitute operator, including but not limited to, any Tenant in the Shopping Center, to carry out any and all of Landlord's rights and duties with respect to the common area as provided in this Lease; and Landlord may enter into a contract either by a separate document or in a lease agreement with such operator on such terms and conditions and for such period as Landlord shall deem appropriate; and, if Landlord does so, the substitute operator, rather 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 area operator for the Shopping Center, Tenant shall have neither voice nor control in the operation and maintenance of either the common area or the Shopping Center as a whole, and shall, specifically, have no control with respect to the identity or type of business operated by future tenants to be located within the Shopping Center. Landlord specifically makes no representation with respect to the existence or continued operation of any business or any other tenant within the Shopping Center. 5.7 Employee Parkin. Landlord may designate what part of the common area, if any, shall be used for automobile parking by employees, lessees, occupants and Iicensees. No employee of any such lessee, occupant or licensee shall use any part of the common area for parking except such area or areas as may be so designated. Landlord shall be entitled to enforce this provision by requiring the payment by Tenant of-such amount per automobile as may be determined to be appropriate by Landlord from time to time for each day per automobile for each day automobile driven by an employee of Tenant, Tenant's agent, occupant, concessionaire or licensee is found parked within the common area, but outside of the specified area. 5_8 Obstruction. No fence, wall, structure, division, rail or obstruction shall be placed, kept, permitted or maintained upon the common area or any part thereof by Tenant, nor shall the sale, display, advertising, promotion or storage of merchandise or any business activities of any kind whatsoever be conducted therein without Landlord's prior written consent; nor shall any 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 ciy�l_d�order or commotion. ARTICLE 6 - - MERCHANTS ASSOCIATION Center, Tenant shall join and maintain membership in good standing in such a at Landlord or any of the other tenants of the Shoppin C rm such :Merchants Association in the future, Tenant shall super s do all things reasonably necessary in order to aid the formation of such Merchants ARTICLE 7 TAXES Personal Property Taxes. Tenant shall pay, before delinquency, all license fees, public charges, property taxes and assessments on the furniture, fixtures, equipment, inventory and other property owned or being used by Tenant at any time situated on or installed in the Premises, together with all license fees, permit fees, assessments and other costs levied, assessed or imposed by law or ordinance upon Tenant or upon the business operated by Tenant, and shall, upon request, deliver proof of such payment to Landlord. naoe R of '7Z 1999 -222 - •t. 7.2 Real Prooerty Taxes. any and all real property taxes and general or special assessments and installments the mg any tax on rent which is substituted in whole or in part for real property essments and any license fee imposed by a local governmental body on the rent, and excluding federal and state income taxes) which shall, during the It , levied or assessed against all or any portion of the Premises or imposed on . Said real property taxes and assessments for the first and last lease years he if necessary, be prorated and apportioned between Landlord and Tenant to upon individual assessment valuations (or prorations) supplied by the County or other regulatory agency. Said proration shall be conclusive upon both a the parties otherwise mutually agree in writing. In the absence of a prora led 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 r is the floor area of Tenant's Premises and the denominator is the floor area of all commencement of the term are changed so that a tax, assessment or excise on rents or an c >u, charge, or assessment, however described, is levied or assessed against a direct substitution in whole or in part for any real property taxes, Tenant shall a delinquency the substitute tax or excise on rents, but only to the extent that it can ined that there has been a substitution and, as a result, Tenant has been relieved fro yment of real property taxes that would otherwise have been obligated to pay. T re of any tax or excise on rent pursuant to this paragraph shall be substanti same as, and as a substitute for, the payment of such real property taxes as provided in and expense to contest the amount or legality of any said real property taxes r eats on or attributable to the Premises, including the right to apply for the ereof, provided, however, Tenant shall prosecute any such contest with du ce and shall, forthwith upon the final determination thereof, pay the amoun real property taxes and assessments on or attributable to the Premises as so det ogether with any interest, penalties, costs and charges which may be payable ' ion therewith. Prior to any such contest, Tenant shall post such security or take other L__�_ _ _ ARTICLE 8 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, and other utility services used on or serving the Promises during the lease term. Nothing contained in this Lease shall limit Landlord in any way from granting or using easements on, across, over and under the Shopping Center for the purpose of providing utility services. ARTICLE 9 REPAIRS AND ALTERATIONS 2&JLasehold Imerovemen e. Tenant, at its sole cost and expense, shall be responsible for decorating and providing any leasebold improvements which may be required by Tetiaat at the commencement of the term. Such . r.. 1999 -222 leasehold improvements shill be subject to the reasonable approval of Landlord, which approvaFsfiall be obtained in writing prior to the commencement 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, -oof and foundation, nor any penetration of the roof, unless Tenant shall have first delivered to Landlord a complete engineering analysis of the effects 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 failure to obtain Landlord's writtea 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), dow=pouts and rain gutters, foundations and structural portions of exterior bearing walls, but excluding any glass, windows, doors, skylights or other openings contained therein. 9.3 Tenant's Repairs. Except as expressly provided in paragraph 9.2, Landlord shall not be obligated to make repairs, replacetmeaLs or additions of any kind whatsoever upon the exterior or interior of the Premises. The Premises, together with any equipment, facilities or fixtures shall, at Tenant's sole expense, be kept, repaired, maintained, replaced or added to at all times by Tenant in good order and in sanitary and safe condition and repair and in accordance with all governmental requirements and insurance requirements, specifically, including, but not limited to, all glass of the Premises (including but not limited to exterior plate glass) and the beating, ventilating acid air conditioning system. Tenant shall be expressly responsible for any maintenance or repairs required with respect to the utility lines, conduits or pipes serving the Premises, whether or not located in or oa the Premises. Notwithstanding anything to the contrary contained herein, Landlord shall have no obligation to repair any damage to the Premises caused by any negligent or intentional act of omission of Tenant, and Tenant shall be solely responsible for 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 any right to make repairs to the Premises at Landlord's expense, whether pursuant to Sections 1941 and 1942 of the California Civil Code or otherwise. an independent air conditioning contractor for the maintenance of the air conditioning, heating and v systems serving the Premises, Ohl 111*1111 1W. located on the Premises, together with any related equipment and alFilffEer system located on the Premises, and (iii) a co or or a mains any Landlord installed security system, and w ould Landlord elect to contract for any or all of these services Tenant shall promptly reimburse r it e cost of such contracts, !a wsw4 oa receipt of Landlord's invoice for the same, which invoice shall be rendered by Landl2.rJJpoVMMt not more often than monthly. Landlord shall have the right but not be obligated to comae ese above service contracts upon 30 days notice to Tenant and may at any time amend change or cancel 9.5 Alterations. Tenant shall not make any alterations to the Premises whatsoever without Landlord's prior written consent, which shall be granted or denied in accordance with the provisions of paragraph 9.1. Any alterations made by Tenant shall retain on and be surrendered with the Premises upon expiration or termination of this Lease, except that Landlord may elect, within ninety (90) days before expiration of the term, or within tea (10) days after expiration or termination of the term, to require Tenant to remove alterations that Tenant has made to the Premises. If Landlord so elects, Tenant, at its sole cost, shall restore 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 Teaaat makes any alterations to the Premises as provided in this paragraph, the alterations shall not be commenced until fifteen (15) days after Landlord has received notice from Tenant stating the date the installation of the alterations is to commence so that Landlord can post and record an appropriate notice of noaresponsibility. - . - - - e- )111'� 1999 -222 /. ARTICLE 10 INSU - NCE Use, Rate. Tenant shall not carry any stock or goods or do anything in, on or about the Premises which will in any way uacrease insurance rates on the building in which the Premises are located. 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 Liabilitv Insurance. (a) Tenant shall, at its sole cost and expense and at all times during the term of this Lease, or any extension thereof, maintain and carry for the joint benefit of Tenant and Landlord, bodily injury and property damage liability insurance by the terms of which Tenant and 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, or arising from the use or occupancy thereof, or arising directly or indirectly from any act or omission of Tenant, its employees, agents, concessionaires, representatives, assigns, guests or licensees. Said liability insurance shall be in as amount of not less than One Million Dollars (51,000,000.00) combined single limit, and Tenant shall maintain with Landlord at all times during the term of this Lease a currently effective certificate of insurance satisfactory to Landlord from each insurance carrier providing such insurance coverage. Tim ^-- I s -se- (b) Landlord shall maintain a policy or policies of comprehensive Iiability insurance issued by one 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 area, except any portion thereof subject to Tenant's exclusive, control. together with Tenant's pr O be paid to connection with any claim 103 Worker's Compensation Insurance. in compliance with applicable ct2t. t�� _ ..4 - i -ii —m nr' 10.4 Fire Insurance. ty insurance with minimum coverage of Five (a) Landlord shall pay for and shall maintain in full force and effect during the term of this Lease a policy or policies of insurance covering 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 endorsements which may broaden the perils insured against. In addition, the Landlord may maintain flood and earthquake insurance 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 holder or holders of a mortgage or deed of trust secured by the Premises. �aeaa! -e premiums incurred by Landlord for such insurance within ten (10) da s enant of Landlord's statement therefor. If such insurance cov m addition to Tenant's Premises, Tenant's share of the premiums a e premium allocation made by the insurance carrier and, if the a such allocation, then on the basis which Tenant's floor area bears to the naee 11 of 23 Ir 1999 -222 policies of insurance covering Tenant's stock in trade, trade fixtures other personal :property Iocated in, on or about the Pre a eaant in connection with its business. uch coven e n s normally insured under the California Standard Fire Insurance Policy 10.5 Business Interruption Insurance. full force and effect during the term of this Lease a policy of insurance in rent will be paid to Landlord for a period of not less than aime RM Flrjses are destroyed or rendered inaccessible by a risk insured agains d fire and extended coverage insurance, with vandalism and malicious mischief 100.6 Waiver of Subrogyation. Each party ('insured') hereby waives its entire right of recovery against the other party, the other party's officers, directors, agents, representatives, employees, successors and assigns with respect to any loss or damage, including consequential loss or damage to the insured's property caused by or occasioned by any peril or perils (iacludi�ag negligent acts and willful misconduct) covered by any policy or policies carried by the insured. 10.7 General Requirements. .(a) All policies of insurance required to be carried hereunder by Tenant shall be written by companies satisfactory to Landlord and licensed to do business in the State of California. (b) Each policy of public liability insurance required to be carried by Tenant shall be primary and noncontributing with any insurance carried by the Landlord. (c) Each policy required to be carried by Tenant shall expressly include, severally and not collectively, as additional named insured thereunder, Landlord and any person or firm designated by Landlord, as their respective interests may appear. (d) Each policy required to be carried by Tenant shall not be subject to cancellation or reduction in coverage, including cancellation for nonpayment of premiums, except upon at least thirty (30) days prior written notice to Landlord and each additional named insured. The policies of insurance required to be carried by Tenant, or duly executed certificates evidencing them, together with satisfactory evidence of the • payment of premiums thereon, shall be deposited with Landlord prior to the commencement of the term or prior to Tenant's initial entry to the Premises for fixturing or other activity to be carried on prior to the commencement of the term, whichever occurs first, and not less than thirty (30) days prior to the expiration of the term of such coverage. If Tenant fails to comply with this requirement, Landlord may obtain such insurance and keep it in effect, and Tenant shall pay to Landlord the premium cost thereof upon demand with interest at the highest lawful rate from the date of payment by Landlord to the date of repayment by Tenant. 10.8 Blanket Insurance Landlord and, upon Landlord's written consent, Tenant, shall be entitled to fulfill its insurance obligations hereunder by maintaining a so- 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 on the Premises or the Shopping Center are- partially or totally damaged by lire or other casualty so as to become partially or totally untenantabie, which damage is insured against under any policy of fire and extended coverage insurance then covering the damaged improvements, this Lease shall not nc page 12 of 23 1999 -222 terminate and said improvements shall be rebuilt by Landlord with due diligence at Landlord's expense unless Landlord 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 casualty to the extent of at least twenty -five percent (25 R) 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 than during the last three (3) lease years of said term, or to the extent of at least ten percent (10%) thereof during the last three (3) years of said 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 the lease term, Landlord shall, within not more than ninety (90) days after such damage, notify Tenant of Landlord's election to terminate this Lease or to restore the improvements on the Premises anZ[ such portion of the improvements in the balance of the Shopping 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 same manner and to the same extent as work was done by each of them in the original construction and fixrurizing of the Premises, and the damaged improvements is the balance of the Shopping Center shall likewise be restored to the extent required in the preceding sentence. If Landlord elects not to restore, as aforesaid, this Lease 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. -Ul 5 Rent Adiustment. If this Lease is not terminated as provided in this Article 11, then during the period of repair and restoration, if and only to the extent that Tenant's payment obligations under this Lease 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 as a result of such damage bears to Tenant's total floor area before such damage. In no event, however, shall Tenant's share of common area expenses be abated unless the common area 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 or 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 any 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 Taking. If there is a taking of all of the Premises, this Lease shall terminate as of the date of such taking. 12J Partial Taking. If twenty -five percent (25 %) or more of the floor am of Tenant's Premises shall be taken, either party shall be entitled to terminate this Lease, or if twenty-five percent (25%) or more of the floor area of all buildings is the Shopping Center shall be taken, whether Tenant's Premises are taken or not, Landlord (but not Tenant) shall be entitled to elect to terminate this Lease; 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 die Premises taken has vested in the condemnor. If neither party gives such notice or less than twenty -five percent (25 91) of the floor area of either Tenant's Premises or buildings in the Shopping Center shall be taken, this Lease 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 12, such termination shall become effective as of the date physical possession of the condemned portion is taken; by the condemning authority. nc oaec 13 of 23 1999 -222 J2 j Reoair and Restoration. If this Lease is not 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 so far as practicable to a complete unit of like quality, character and condition as that which existed immediately prior to the taking, provided that the scope of the work shall not exceed the scope of the work to be done by Landlord originally in constructing the Premises, and further provided that Landlord shall not be obligated to expend an amount greater than that which w-as awarded :o Landlord for such taking. 12.6 Rent Adiustment. If this Lease is not terminated as provided in this Article 12, and until such time as Landlord may restore the Premises pursuant to this Article 12, the fixed minimum rent shall be adjusted by that proportion which the floor area taken from the Premises bears to Tenant's total floor area immediately before the taking. In no event, however, shall Tenant's share of common area expenses be abated unless the common area expenses paid by each of the other tenants located within the Shopping Center are abated by Landlord. 13.7 Award. The entire award or compensation in such proceeding, whether for a total or partial taking or for diminution ui the value of the leasehold or for the fee shall belong to and be the property of Landlord, provided that Tenant shall be entitled to recover from the condemnor such compensation as may be separately awarded by the condemnor to Tenant or recoverable from the condemnor by Tenant in its own right for the taking of trade fixtures and equipment owned by Tenant (meaning personal property, whether or not attached to real property, which any be removed 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 hold Landlord harmless from and against any and all liens, claims, demands, actions, causes of action, 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 any portion of the common area which is under the exclusive control of Tenant (the Premises and such portion of the common area 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 any acts or omissions (including, but not limited to, negligence or willful misconduct) of Tenant or any invitee, guest, agent, patron, license, vender, concessionaire or employee. 13.2 Waiver. All property kept, stored or maintained on Tenant's Premises shall be so kept, stored or maintained at the sole risk of Tenant. Landlord shall not be liable and Tenant waives all claims against Landlord for damages to persons or property sustained by Tenant or by any other person or firm resulting from the building in which the Premises are located or by reason of Tenant's Premises or any equipment located thereon becoming out of repair, or through the acts or omissions of any persons present in the Shopping Center or renting or occupying any part of the Shopping Ginter, or for loss or damage resulting to Tenant or its property from burst, stopped or leaking sewers, pipes, conduits or plumbing fixtures, or for interruption of any utility services, or from any failure of or defect in any electric line, circuit or facility or any other type of improvement or service on or furnished to Tenant's Premises.w- moulting 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 Oct shr IM A- g t ours a day; (i7 to handle the maximum bossiness and carry sufficient stock of nc pave 14 of 23 J'� 1999 -222 J i°''�'- 1'"� (iv) keep the Premises and exterior and interior portions of windows, doors and all other glass or plate glass fixtures in a neat, clean, sanitary and safe condition; "— rr;,,,,,�- .� °Qk'°°��` (vi) use for office or other non - selling purposes only such space as is reasonably required for Tenant's business; (vii) refrain from burning any papers or refuse of any kind, or otherwise creating any noxious or offensive odors or fumes, in the 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 6 -d - - --- imp the ayi� � �eiarraa��.�i T `tJC (ix) observe and promptly comply with all governmental requirements and insurance requirements affecting the Premises or any part of the common area which is under Tenant's exclusive control and promulgated during the term of this Lease; (x) not use the Premises or suffer or permit the Premises or any part thereof to be used in any manner that will constitute a nuisance or unreasonable annoyance to 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 any extra hazardous purpose, or in any 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 agrees not to install, use or to allow to be installed or used, upon toe described Premises, any gaming machines or devices without the prior written consent of Landlord, including, but J24Ah fited 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 cause to be made any alterations, additions or improvements to the building, or install or erect or cause to be installed or erected any signs (including, but not limited to, exterior signs, window signs and signs painted on doors or windows), floor covering, exterior lighting, plumbing, fixtures, shades or awnings, radio or television antenna, satellite dish or similar devices, or make any changes to the store front or exterior of the building, nor shall tenant install any loud speakers, sound amplifiers or similar devices which would be hard in adjoining suites or outside Tenant's Premises without first obtaining Landlord's written approval and consent. Tenant shall present to Landlord plans and specifications for such work at the time approval is sought. 15.2 i= Tenant will not place or suffer to be placed or maintained on any exterior door, wall or window of the Premises any sign, awning or canopy, or advertising matter or other thing of any kind and will not place or maintain any decoration, lettering or advertising matter on the glass of any window or door of the Premises, or install any sign or advertising material within 18 inches of a window (or in any location if installed in such a manner as to be primarily visible form the exterior of the Premises) without first obtaining Landlord's 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 merchandise, equipment or other items outside the building on the Premises. W ARTICLE 16 LIENS Tenant shall keep the Premises and the Shopping Center free of any liens or claims of lien arising from any work performed, material furnished or obligations incurred by Tenant in connection with the Premises. If Tenant disputes the corTOCtness or validity of nay claim of lien, Tenant shall, within ten (10) days after written request by Landlord, record such bond as will release said property from the lien claimed. Tenant 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 any lien or claim of Lien on the Premises, 5�.>v Augt4 tam) Parse a3,_ PhRPO&W 14 W "A%1.1 1 c ^;)-I 1999 -222 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 responsibility for the acts or omissions of Tenant; (v) exhibiting the Premises to prospective buyers, lessees or lenders; and, (vi) posting ordinary signs advertising the Premises for sale or for lease during the last one hundred eighty (180) days of the term or any extended term hereof. ARTICLE 18 MIITATION ON LIABILITY in the event of any actual or alleged failure, breach or default hereunder by Landlord: (a) Tenant's sole and exclusive remedy shall be against Landlord's interest ing Center. (b) No partner, master lessor, officer, agent or employee of ord shall be sued 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 take t any partner, master lessor, officer, agent or employee of Landlord. Any judgment attst any partner, master lessor, officer, agent or employee of Landlord may be v set aside at any time nunc pro tuac, and no writ of execution will ever be levied again of any partner, master lessor, officer, agent or employee of Landlord. (c� -en ants and agreements contained within this Article 18 shall inure to the benefit of and shall be ARTICLE 19 ASSIGNATENT AND SUBLETTING 19.1 _Consent Reouired. Notwithstanding anything to the contrary contained herein, Tenant shall not assign this Lease or any interest herein, or sublet, license, grant any concession or otherwise give permission to anyone other than Tenant to use or occupy all or any part of the Premises without the prior written consent of Landlord. The sale, assignment, transfer or disposition, whether for value, by operation of Iaw, gift, will or intestacy of (i) twenty-five percent (25 R) or more of the issued and outstanding stock of Tenant if Tenant is a corporation; or, (ii) the interest of any general partner, joint venture, association or co- tenancy shall be deemed an assignment of this Lease under this paragraph. Landlord and/or Landlord's agent shall be entitled to an application fee of Five Hundred Dollars (5500.00) be paid at the time of application for approval of any assignment or subletting as a condition precedent to the processing of any such request for Landlord's consent. Such fee is a processing fee only, however, and shall in no way obligate Landlord to consent to the requested assignment or sublease 12AL5weral Conditions. In the event of any assignment of this Lease, Tenant shall remain primarily liable under this Lase. Such liability shall continue throughout the remiiaing term of this Lease, including any renewal terms, notwithstanding any subsequent or further assignment of this Lease, whether or not Tenant has consented to or approved such assignment. Nor shall such liability be extinguished or reduced by any later amendment or modification of this Lease, whether or not Tenant approves or consents to such amendment or modification. In the event of any assignment or sublease, the assignee or sublessee shall agree in writing to perform and to be bound by all of the covenants of this Lease required to be performed by Tenant. Landlord's approval of one assignment or subletting by Tenant of its interest in this Lease shall milt. be deemed to be an approval of any further assignment or subletting. - - -. 19 -C q7 1999 -222 - ARTICLE 20 NOTICES Whenever under this Lease provision is made for notice or demand, it shall be in writing and signed by or on behalf of the party giving the notice or making the demand and served by personal delivery, registered or certified mail or by telegraph. If served by registered or certified mail, it shall be deposited in the United States mail, postage prepaid, with return receipt requested, addressed to the party to whom such notice of demand is to be given at the address stated in the Basic Lease Provisions, as the case 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 (48) hours after mailing. If served by telegraph, service to the addressee shall be conclusively deemed made as confirmed by the telegraphic agency making delivery. If served by personal delivery, service shall be deemed made as of actual delivery. The address of either party may be changed for the 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 Lease, whether by lapse of time or otherwise, Tenant shall surrender the Premises as of such date broom clean and in good condition and repair, reasonable wear and tear excepted. 21.2 Holding Over. (a) If Tenant holds over after the expiration of the term hereof with the express consent of Landlord, such holding over shall, in the absence of a written agreement be deemed to have created a tenancy from month- to-month, terminable on thirty (30) days written notice by either party to the other, at a fixed minimum rental equal to two hundred percent (200%) of the fixed minimum rental in effect immediately prior to the expiration of the term, and at a percentage rental equal to two hundred percent (200%) of the percentage rental in effect immediately prior to the expiration of the term, and otherwise subject to all terms of this Lease. Nothing contained in this paragraph shall 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, Tenant shall defend, indemnify and shall hold Landlord free and harmless from loss or liability resulting from such failure, including, without limitation, the generality of the foregoing, any claims made by any succeeding tenant arising out of such failure to surrender the Premises. ARTICLE 22 QUIET ENJOYMENT Subject to the provisions of this Lease and conditioned upon performance of all of the provisions to be performed by Tenant hereunder, Landlord shall secure to Tenant during the lease term the quiet and peaceful possession of the Premises and all rights and privileges appertaining thereto. ARTICLE 23 SUBORDINATION Tenant agrees that this Lease, at Landlord's option, shall be subordinate to: (a) any fast and junior mortgages or first and junior trust deeds that may hereafter be placed upon the Premises and to any advances to be made thereunder, any interest thereon and all renewals, replacements and extensions thereof, provided that such mortgagees or beneficiaries first request such subordination and thereafter agree in writing to recognize this Lase in the event of foreclosure if Tenant is not- 17 of '71 1999 -222 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 maintenance agreement, (iii) declaration of covenants, conditions and restrictions, or (iv) similar agreement affecting the overall operation of the Shopping Center or its parking or common area (the general category of documents described in this sub- section (c) being referred to as 'CC&R's'), together with any 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 STATEMENT Tenant shall, at any time and from time to time within five (5) days after written request therefor by Landlord, deliver without cost to Landlord a certificate to Landlord or to any proposed mortgagee, trust deed beneficiary, purchaser or successor in interest, certifying the commencement and expiration date of the lease term and that this Lease is then in full force and effect and setting forth the amount and nature 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 -fact for the purpose of completing, executing and delivering the certificate to the person or firm requesting it. ARTICLE 25 DEFAULT 25.1 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 cure such defaults, provided that if the nature of a non - 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 cure 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 detainer 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 rent for the balance of the term after the time of award exceeds the amount of such rental 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 event, Landlord may enforce 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 relet the Premises. ZQ Taant's Property. In the event of default, all of Tenant's property shall remain on the Premises and in that event, and continuing during the length of said default, Landlord shall have the right to appoint a receiver to take the exclusive pousession of Tenant's property and to use it rent 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. 255 Notice of Termination. No re -entry or reletting of the Premises shall be construed as an election by Landlord to terminate Tenant's right to possession and this Leine unless a written notice of such intention is given by Landlord to Tenant and, notwithstanding any such reletting without such termination, Landlord may, at any time __ r4of11 �Tl *JW--40X thereafter, el',ect 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 Notice - Performance by Landlord. Notwithstanding any provision of this Article 25, if, (1) Tenant faiils to comply with any governmental requirement, Tenant shall not be entitled to notice of default from Landlord or any right to cure beyond the period within which such compliance may be required by such governmental requirement;; (ii) if this Lease expressly provides that this Lease may be terminated effective on service of notice, Tenant shall be entitled to cure its default only if the right to cure is required by law; or, (iii) if, in Landlord's judgment, the continuance of any default by Tenant for the full period of notice provided for herein will jeopardize the Premises or the rights of Landlord, Landlord may, with or without notice, elect to perform those acts in respect to which Tenant is in default for the account and at the expense of Tenant. If by reason of such default by Tenant, Landlord is compelled to pay or elects to ,pay any sum of money, including, but not limited to, reasonable attorneys' fees, such sum or sums so paid by Landlord, with interest thereon from the date of such payment at the rate provided in paragraph 25.5, shall be due from Tenant to Landlord on demand. Z5.5 Interest. Any amount due to Landlord not paid when due shall bear interest at the maximum rate allowed by law from the date due. Payment of such interest shall not excuse or cure any default by Tenant under this Lease. 25.6 Other Remedies. Nothing contained herein shaII 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 an), right or remedy then provided by law, including, without limitation, the right to obtain injunctive relief and the right to recover all damages caused by Tenant's default in the performance of any of its obligations under this Lease. Tenant, along with all other remedies afforded herein, shall share the right to any 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 any state 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 Lease, and Landlord, at its option and by written notice to Tenant, may exercise all of the rights and remedies provided for in Article 25, including the termination of this Lease, effective on the service of such notice, without the necessity of further notice under Article 25. 26.2 Operation of Law. Neither this Lease nor any interest herein, nor any estate created hereby, shall pass by operation of law under any state 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 in violation of the provisions of this paragraph shall constitute a default under and breach of this Lease, regardless of Tenant's compliance with the other provisions of this Lease, and Landlord, at its option and by written notice to Tenant, may exercise all of the rights and remedies provided for in Article 25, including the termination of this Lease, effective on the service of such notice without the necessity of further notice as provided under Article 25. 26.3 Non - Waiver. The acceptance of rent at any time and from time to time by Landlord from Tenant as debtor in possession or from a transferee of the type mentioned in pangraph 26.2, shall not preclude Landlord from exercising its rights under this Article 26 at any time thereafter. 1999 -222 ARTICLE 27 REMEDIES CUMULATIVE The various rights, elections and remedies of Landlord and Tenant contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any of the others, or of any right, priority or remedy allowed or provided for by law. ARTICLE 28 MANAGEMENT OF SHOPPING CENTER - COLLECTION CHARGE Landlord may, at any time, engage a manager to operate the Shopping Center on Landlord's event, Tenant shall pay to Landlord, within tea (10) days after ut not more often than monthly, Tenant's ro a ex charged by such manager (which administrative fee shall not in In addition, Tenant shall pay to Landlord a collection charge of Seventy Five Dollars ($75.00) for preparation of each demand for delinquent re wmeALor other sums which may be due under this Lease. 1 ARTICLE 29 ATTORNEYS' FEES If either party to this Lease brings any action or files any proceeding against the other party arising out of this Lease or for the declaration or interpretation of any rights hereunder, the prevailing party therein shall be entitled to recover from the other party all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing party as determined by the court. If either party ('secondary party') without its fault is made a party to litigation instituted by or against the other party ( "primary party'), the primary party shall pay to the secondary party all costs and expenses, including reasonable attorneys' fees and any judgment rendered, incurred by the secondary party in connection therewith. ARTICLE 30 WAIVER OF DEFAULT The waiver by either party of any default in the performance by the other of any covenant contained herein shall not be construed to be a waiver of any preceding or subsequent default of the same or any other covenant contained herein. The subsequent acceptance of rent or other sums hereunder by Landlord shall not be deemed a waiver of any preceding default other than the failure of Tenant to pay the particular rental or other sum or portion thereof so accepted, regardless of Landlord's knowledge of such preceding default at the time of acceptance of such rent or other sum. ARTICLE 31 NO PARTNERSHIP Landlord is not and shall not be deemed to be in any way or for any purpose an agent, employer, principal; putner, joint venturer or member of any joint enterprise with Tenant. ARTICLE 32 SUBTENANCIES The voluntary or other surrender of this Lease by Tenant or a mutual cancellation of this Lase shall not effect a merger and shall, at Landlord's option, terminate all existing subteaaacies or operate as an assignment to Landlord of any or aU of such subtenancies, 1 1999 -222 ARTICLE 33 SUCCESSORS Subject to the restrictions on assignment or subletting contained herein, this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their successors. The term 'successors' is used herein in its broadest possible meaning and includes, but is not limited to, every person succeeding to any interest in this Lease or to the Premises of Landlord or Tenant herein, whether such succession results from the act or omission of such party. Each covenant and condition of this Lease shall be binding upon all assignees, 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 fixtures, 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 Premises-, but, if Tenant is in default, Tenant shall not remove Tenant's property unless notified by Landlord to do so. In case of any injury or damage to the building or any portion of the Premises resulting from the removal of Tenant's property, Tenant shall promptly pay to Landlord the cost of repairing such injury or damage. In the event Tenant should fail to complete such removal promptly, Landlord may 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 removal and disposition together with interest at the rate prescribed in paragraph 25.5 from the date of payment by Landlord until 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, then from and after the effective date of such conveyance, Landlord shall be released and discharged from any and all further obligations 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 convenience only and shall not affect the interpretation of this Lease. Wherever the context so requires, the singular number shall include the plural, the plural shall include the singular, the neuter gender shall include the masculine and the feminine genders. If there is more than one signatory hereto as Tenant, the liability of such signatories 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 are no oral agreements between the parties hereto affecting this Lease or any Addenda attached hereto, and this Lease (together with any Addenda attached beret supersedes and cancels any and all previous negotiations, agreements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the Premises desert 'bed herein, and no such extraneous or ancillary material shall be used to interpret or construe the terms of this Luse. There shall be no modification or amendment of this Lease except as may be executed in writing by each of the parties hereto. r t 1999 -222 ARTICLE 37 TIME 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 or other person seeking a commission, finder's fee or similar payment with respect to the arrangement, negotiation or execution of this Lease, other than as may be payable to the broker (if any) set forth in the Basic Lease Provisions. ARTICLE 39 CORPORATE RESOLUTIONS If a corporation executes this Lease as a tenant, Tenant shall promptly furnish Landlord certified corporate resolutions attesting to the authority of the officers executing this Lease on behalf of such corporation. ARTICLE 40 SECURITY DEPOSIT 40.1 Devosits. Tenant has deposited with Landlord the sum set forth in the Basic Lease Provisions as the Security Deposit to be retained with Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease by Tenant to be kept and performed, which deposit shall be increased from time to time as the Minimum Annual rental increases, so as to maintain at all times during the term the same ratio between the Security Deposit and the Minimum Annual Rental as exists at the commencement of the term. In the event that Tenant is not then in default, any unused portion of the security deposit shall be returned to Tenant within fourteen (14) days following the expiration of this Lease. In no event shall Landlord be obligated to pay interest on such security deposit. Landlord may commingle such funds with other funds of Landlord. The taking of such security by Landlord shall in no way be a bar or defense to any action in unlawful detainer or for the recovery of the Premises or for any other action which Landlord may„ at any time, institute for the breach of any term, covenant or condition contained herein. 440.2 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 (S) days after receipt of such demand shall constitute a material breach of this Lease. 1999 -222 ARTICLE 41 OPTION TO RENEW Tenant is hereby granted the option to extend the term of this Lease for ONE (1) 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, the Option Notice shall be totally ineffective, and provided further, that if Tenant is in default on the date that the Extended Term would otherwise commence, such Extended Term shall not commence and this Lease shall expire at the end of the then current term. Tenant shall have no other right to extend the term beyond the last extended Term described herein. During the Extended Term all of the terms and provisions contained herein shall apply except that commencing at the beginning of each Extended Term, the Annual Basic Rent shall be increased to an amount set forth in the Renewal Addendum attached hereto , or if no such addendum is attached, the Minimum Annual Rental shall continue to increase in accordance with the provisions of Section 4.3 of this Lease. IN WITNESS WHEREOF, the parties have executed this Lease to be effective as of the date set forth in the Basic :Lease Provisions. APPROVED AS TO FORM AND LE13AL CONTENT CITY ATTO LANDLORD WORLD PLAZA L.L.C. (a California corporation) By: Title: TENANT: CITY Of 4N BERNARDINO Qmers za ALLES, MAYOR 1999 -222 ADDENDUM TO LEASE AGREEMENT BETWEEN WORLD PLAZA L.L.C. (LANDLORD) AND CITY OF SAN BERNARDINO (TENANT) DATED: August 4, 1999 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 WORLD PLAZA L.L.C. a California Corporation By: Title: APPROVED AS TO FORM & :LEGAL CONTENT JA1V By: Page 23a TENANT CITY O SAN BERNARDINO i By: VALLES MAYOR 1999 -222 EXHIBIT "C" TENANT IMPROVEMENTS Tenant improvements, per the attached floorplan, will be completed by and at the expense of the tenant with the exception of those noted in exhibit C -1. The items listed in exhibit C -1 will be completed at the expense of the Landlord. Endorsement below constitutes Landlord agreement to all improvements noted per attached floorplan. LANDLORD: TENANT: WORLD PLAZA L.L.C. CITY OF SAN BERNARDINO A California Corporation By: Title By: APPROVED AS TO FORM & LEGAL kONTENT JAMES By: ITY ATTO p-� ty VALLES 1999-222 r'- LUC LL U. 0 IQ U3 LL I� s J'. 6SS8 t79 606 91:TT 666T-TZ- r -i �t 6 LJW C3 Im 0 rw A,... Ul I LL op Ul 1999 -222. EXHIBIT 66C -1" TENANT IMPROVEMENTS AT LANDLORD EXPENSE Landlord agrees to provide the following improvements at his expense and to have them completed prior to commencement of this lease. 1. Replace all frontage window glass to Ste C. 2. Replace toilet and make any required changes to bathroom to make it comply with building code. Replace ceiling in bathroom. 3. Service roof A/C unit and route necessary ducting to conform to office usage. If A/C unit is defective, repair or replace as needed. 4. Replace ceiling lighting with current code required energy saving units. 5. Replace ceiling tiles throughout Ste. "C" with standard acoustic type tiles. LANDLORD TENANT WORLD PLAZA L.L.C. CITY OF S BE A California corporation / / J By:: By: Title: APPROVED AS TO FORM & LEGAL . NTENT JAMES By: CITY ATTORNEf 9"� -2 5- Ynn VALLES .YOR 1999 -222 SIGN CRITERIA © HIBff OV p-:% z%p a 1999 -222 EXHIBIT "E" DELIVERY ESTOPPEL COMNIENCEN ENT AND TERNIINATION DATE OF LEASE AND LESSEE'S OBLIGATION Pursuant to 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 September 1, 1999. 2. The date upon which rent shall commence is September 1, 1999. 3. The date upon which the term of this Lease shall expire is August 31, 2004. 4. The date upon which Tenant received the keys to the Premises is August 160i, 1999. DATED this day of August, 1999. APPROVED AS TO FORM & LEGAL CONTENT JAMES F. kNMAN City Attorney LANDLORD: WORLD PLAZA LL.C. a California corporation By: _ Title: TENANT: CITY OF By: VALLES ;4zYi%—R- CITY OF SAN BERNARDINO Interoffice Memorandum CITY CLERK'S OFFICE Records and Information Management (RIM) Program DATE: September 8, 1999 TO: Detective Gordon Jones FROM: Melanie Miller, Senior Secretary RE: Transmitting Documents for Signature - Res 1999 -222 Attached are the following original documents adopted at the September 7, 1999 Mayor and Common Council Office: Agreement with World Plaza L.L.C. to lease real property for the Area "C" Community Service Office at 1535 E. Highland Avenue, Suite C. Attached is one (1) original lease. Please obtain signatures as appropriate and return the original agreement to the City Clerk's Office to my attention as soon as possible. Have the outside party retain a copy of the signed lease for their own files. Please be aware that the documents are null and void if not executed within sixty (60) days = November 6, 1999. I will forward you a copy for your files when fully executed. If you have any questions, please do not hesitate to contact me at ext. 3212. Thank you. Rachel Clark City Clerk s� By: Melanie Miller a Senior Secretary I hereby acknowledge receipt of the above mentioned documents. Signed (- . Date: G - &, -C- Q �a o �z �d o n trf d CD � m n CD o - W - 5`