AGR-7030 - ROBERT WILSON - OFFICE LEASE ROYER BUILDING SUITE 205OFFICE LEASE
by and between
CITY OF ORANGE,
a municipal corporation,
and
Robert Wilson
TABLE OF CONTENTS
Subject matter Page
Article 1 R AL PROR RTY, BUILDING,AND RREMISE 4
Article 2 SUBSTITUTION OF OTHER PREMISES 5
Article 3 LEASE TERM 5
Article 4 BASE RENT 8
Article 5 ADDITIONAL RENT 9
Article 6 SECURITY DEPOSIT 10
Article 7 U E 11
Article 8 COMPLIANCE WITH LAWS 11
Article 9 HAZARDOUS MATERIAL 13
Article 10 UTILITIES AND SERVICES 15
Article 11 TENANT'S REPAIR AND MAINTENANCE OBLIGATIONS 19
Article 12 ALTERATIONS AND ADDITIONS 20
Article 13 COVENANT/GP INST LIENS 22
Article 14 EXCULPATION, INDEMNIFICATION, AND INSURANCE 22
Article 15 DAMAGE AND DESTRUCTION 29
Article 16 CONDEMNATION 31
Article 17 ASSIGNMENT AND SUBLEASING 34
Article 18 SURRENDER OF PREMISES 38
Article 19 MOLDING OV R 39
Article 20 ESTOPPEL CERTIFICATES 40
Article 21 SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT 40
Article 22 DE-FAULT AND REM€DIE 41
Article 23 LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS 44
Article 24 LATE PAYMENTS 44
Article 25 NON-WAIVER 44
Article 26 WAIVER OF RIGHT TO JURY TRIAL; DISPUTE RESOLUTION 45
Article 27 ATTORNEY FEES AND COSTS 45
Article 28 LANDLORD'S ACCESS TO RREMISES 45
Article 29 SIGNS 46
Article 30 TENANT PARKING 47
Article 31 MISCELLANEOUS 48
Exhibit A DIAGRAM OF PREMISES 54
Exhibit B SITE RLAN OF REAL RRORERTY 55
Exhibit C RULES AND REGULATIONS 56
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OFFICE LEASE
This Lease (herein referred to as the "Lease") is made and entered into by and befin een the
Landlord and Tenant named below, who agree as follows:
Part I
SUMMARY OF BASIC LEASE INFORMATION
The basic terms of this Lease are:
1. DATE OF LEASE: September 1, 2020.
2. LANDLORD: City of Orange, a municipal corporation.
3. TENANT: Robert Wilson
4. PREMISES AND BUILDING:
a) Buildina (Section 1.1): 307 E. Chapman Avenue in the City of Orange, County of Orange,
State of Califomia, which includes the finro-story office building known as the Royer Building and
the adjacent single-story CaRiage House. The Royer Building and the Carriage House may
sometimes be referred to herein collectively as the °Building".
b) Base Svstems(Section 8.2): Only the following items in the portion of the Building in which
the Premises are located: flooring; ceilings; drywall around surfaces of core walls, around
surfaces of columns, and underneath window sills; primary heating, ventilating and air-
conditioning service, including the main distribution loop; primary electrical system that will service
the floor of the Building on vuhich the Premises are located; life-safety systems as required by
applicable building code on an unoccupied basis; main telephone terminal panel located in the
telephone/electrical room designated by Landlord and available for secondary branching by
Tenant of lines to the Premises (all subpanels and related equipment must be located in the
Premises).
c) Number of Rentable Sauare Feet in the Carriaqe House and the Royer Building (Section
1.1 : 3,912.
d) Premises (Section 1.1): Approximately 195 Rentable Square Feet of space as set forth in
Exhibit A and depicted a$ Suite No. 205.
5. LEASE TERM:
a) Duration (Section 3.1): Month-to-Month
b) Lease Commencement Date (Section 3.1): September 1, 2020.
6. BASE RENT (Section 4.1): Five Hundred and No/100 Dollars ($500.00) per month.
7. SECURITY DEPOSIT(Section 6.1): Five Hundred and No/100 Dollars ($500.00).
8. PERMITTED USE (Section 7.1): General office use.
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9. NUMBER OF PERSONS QCCUPYING THE PREMISES (Section 7.3): Not more than eight
8)
10. LIABILITY INSURANCE (MINIMUM) (Subsection 14.5.10):
a) General aqqreqate limit(other than products-completed operations): $1,000,000.
b) Products-completed operations aqqreqate limit: $2,000,000.
c) Each occurrence limit: $1,000,000.
10. LATE CHARGE AND INTEREST (Article 24):
a) Late charqe (Section 24.11: $100.00
b) Interest on Delin4uent Rent Section 24.2): Ten percent(10%) per year.
11. ADDRESSES FOR NOTICES AND PAYMENTS:
a) Landlord's address for notices (Subsection 31.11.3): 300 E. Chapman Avenue, Qrange,
California 92866 (Attention: Executive Director).
b) Landlord's address for pavments (Subsection 4.1): 300 E. Chapman Avenue, range,
California 92866 (Attention: Agency Finance Officer)
c)TenanYs address (Subsection 31.11.3):
5040 East Shoshone, Orange, CA 92867 (Attention: Robert Wilson)
12. BROKERS (Section 31.22): None.
LANDLORD"TEN T"
CITY OF ORANGE, a municipal
eo poration
Robert Wilson
By:
Otto, City Manager
APPROVED AS TO FORM:
Gary heatz, 'ty Attor e
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Part U
LEASE PROVISIONS
rticle 1
REAL PROPERTY, BUILDING,AND PREMISES
1.1. Lease of Premises. Landlord leases to Tenant and Tenant leases from Landlord the
premises described in the Summary of Basic Lease Information (herein referred to as the
Summary") (herein referred to as the "Premises"), which are located in the Royer building
described in the Summary (herein referred to as the "Building") and, together with the Carriage
House, comprise the "Building", reserving to Landlord the rights described in Section 1.3 of this
Lease. The outline of the Premises is set forth in Exhibit A. The Rentable Area of the Premises
and the Rentable Area of the Building are set forth in the Summary. The Building, the areas
servicing the Building (including the adjacent parking area), and the land on which the Building
and those areas are located (as shown on the site plan attached to this Lease as Exhibit B) are
sometimes collectively referred to as the Real Property(herein referred to as the"Real Property").
Tenant acknowledges that Landlord has made no representation or warranty regarding the
condition of the Real Property, except as specifically stated in this Lease. Landlord shall have no
obligation to construct any improvements in, or to contribute any funds for improvement of, the
Premises. Tenant's construction of any improvements in the Premises shall comply with Article
12 concerning "Alterations".
1.2. Appurtenant Riqhts. Tenant is granted the right at all times during the Lease Term to the
non-exclusive use of the main lobby of the Building,the conference room,common corridors and
hallways, stairwells, restrooms, kitchens, shower facilities, the parking area located on the Real
Property, and other public or common areas located on the Real Property. Landlord, however,
has the sole discretion to determine the manner in which those public and common areas are
maintained and operated, and the use of those areas shall be subject to the Rules and
Regulations, as defined in Section 7.2.
1.3. Landlord's Reservation of Rights.The following rights are reserved to Landlord:
a)The right to all of the Building, except for the space within the Premises;
b)The right to change all elements of the Real Property;
c)The rights reserved to Landlord by provisions of this Lease or by operation of law;
d The exclusive right to consent to the use or occupancy of the Premises by any person other
than Tenant; and
e)All rights in the economic value of the leasehold estate in the Rremises, as stated in Articles
16-17.
1.4. Rentable Area.
1.4.1. Verification of Rentable Area of Premises and Buildinq. For purposes of this Lease,
Rentable Area" and "Rentable Square FeeY' shall have the same meaning. The Rentable Area
of the Premises and the Building is subject to verification from time to time by Landlord. Tenant's
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architect may consuit with Landlord regarding that verification. The determination of Landlord,
however, shall be conclusive and binding on the parties.
1.4.2. Adiustment of Rent. If Landlord determines that the Rentable Area of the Premises or
the Building is different from that stated in this Lease, all Rent that is based on that incorrect
amount shall be modified in accordance with that determination. If that determination is made, it
shall be confirmed in writing by Landlord to Tenant.
Article 2
SUBSTITUTION OF OTHER PREMISES
Landlord shall have the right to relocate Tenant to other space in the Carriage House or the
Royer Building of comparable size to the Premises, and all of the terms and provisions of this
Lease shall apply tQ the new space with equal force and effect. Tenant agrees to relocate to such
new space within fifteen(15) days following notice from Landlord that the new space is available
for Tenant's occupancy. If Landlord decides to relocate Tenant, Landlord shall:
a) Give Tenant prior written notice of such relocation;
b) Pravide Tenant at Landlord's expense with tenant improvements substantially equal in
quality to those in the Premises; and
c) Reimburse Tenant for the reasonable costs to move Tenant's personal property and
equipment to the new space, provided that in no event shall Landlord's obligation for such costs
to move Tenant's personal property and equipment exceed an amount equal to finro (2) months'
Base Rent, and any amounts in excess of these costs shall be the responsibility of Tenant.
The parties shall execute an amendment to this Lease stating the relocation of the Premises;
provided, however, that in no event shall the failure or refusal of either Landlord or Tenant to
execute such confirmation affect the rights and obligations of Landlord and Tenant with respeet
to such relocation as set forth in this Article.
Article 3
LEASE TERM
3.1. Lease Term. The provisions of this Lease shall be effective as of the date of this Lease.
The term of this Lease (herein referred to as the "Lease Term") shall be the period stated in the
Summary. The Lease Term shall commence on the date (herein referred to as the "Lease
Commencement Date")stated in the Summary and shall expire on the date (herein referred to as
the "Lease Expiration Date") stated in the Summary, unless this Lease is sooner terminated as
provided in this Lease.
3.2. Confirmation of Lease-Information. At any time during the Lease Term, Landlord may
deliver to Tenant a notice, vuhich Tenant shall execute and return to Landlord within five (5) days
after receipt.
3.3. flntentionallv Omitted.
3.4. Delav in Delivery of Premises. If Landlord fails to deliver possession of the Premises to
Tenant on or before the Lease Commencement Date, Landlord shall not be subject to any liability
for its failure to do so. This failure shall not affect the validity of this Lease or the obligations of
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Tenant under it, but the Lease Term shall commence on the date on which Landlord delivers
possession of the Premises to Tenant.
3.5. flntentionallv Omitted.]
3.6.Special Termination RiQhts;Waiver and Release. Tenant acknowledges that the Premises
may be needed for redevelopment purposes by Landlord prior to the expiration of the Lease Term.
Under such circumstances and notwithstanding anything in this Lease.to the contrary, the
Landlord, in its sole and absolute discretion, may terminate this Lease upon the giving of not less
than thirty (30) days' advance written notice to Tenant, in which event Tenant agrees to vacate
the Premises on or before the expiration of said thirty(30)day period.
Upon expiration of this Lease, earlier termination of the Lease Term under the special
termination rights set forth in the preceding paragraph, or earlier termination due ta a default of
Tenant, Tenant, on her behalf and on behalf of her representatives, successors and assigns,
agrees to waive and release any claims, demands, causes of action,whether known or unknown,
fixed or contingent, against Landlord,the City of Orange, a municipal corporation (herein referred
to as the "City", which shall be deemed to be a third party beneficiary of this Lease), and their
respective officers, employees, representatives, successors and assigns. This waiver and
release shall include, without limitation, any and all claims in relation to the Premises or Tenant
for relocation assistance or benefits arising from the California Relocation Act(commencing with
Section 7260 of the California Government Code), the Community Redevelopment Law
commencing with Section 33000 of the Califomia Health 8 Safety Code),the Uniform Relocation
Assistance and Real Premises Acquisition Public Act of 1970 (42 U.S.C. Section 4601 ef seq.),
and any similar or analogous enactment or rule or regulation promulgated pursuant thereto, and
for the value of Tenant's leasehold interest and related compensation arising out of or related to
the expiration or earlier termination by Landlord of this Lease in the event of default by Tenant.
This paragraph shall be interpreted to give effect to the intent of the parties that Tenant,who has
had the opportunity to consult with legal counsel of his/her/their choosing, and has engaged in
active negotiations as to all of the terms and provisions of this Lease, shall receive no relocation
compensation, benefits, remuneration, advice, or assistance.
By waiving and forever releasing claims both known and unknown, Tenant expressly waives
the benefits of California Civil Code Section 1542, which provides:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
refease, which if known by him or her must have materially affeeted s or
her settlement with the debto "
LANDLORD'S INITIAL : TENANT'S INITIALS
Article 4
BASE RENT
4.1. Definition of Base Rent-No Set-off. Tenant shall pay to Landlord base rent(herein referred
to as the"Base Rent") in equal monthly installments as set forth in the Summary in advance, on
or before the first day of every calendar month during the Lease Term, without any prior demand,
abatement, set-off, or deduction. Payment shall be made at such place as Landlord may from
time to time designate in writing. Payment must be in United States dollars, either in the form of
a check(drawn on a bank located in the State of California)or via electronically transmitted funds.
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4.2. Initial Pavment; Proration. The Base Rent for the first full calendar month of the Lease
Term shall be paid when Tenant executes this Lease. If any payment date (including the Lease
Commencement Date)for"Rent," as defined in section 5.1,falls on a day other than the first day
of that calendar month, or if any Rent payment is for a period shorter than one calendar month,
the Rent for that fractional calendar month shall accrue on a daily basis for each day of that
fractional month at a daily rate equal to 1/30 of the total monthly Rent. All other payments or
adjustments that are required to be made under the terms of this Lease and that require proration
on a time basis shall be prorated on the same basis.
4.3.Application of Payments. All payments received by Landlord from Tenant shall be applied
to the oldest payment obligation owed by Tenant to Landlord. No designation by Tenant, either
in a separate writing or on a check or money order, shall modify this clause or have any force or
effect.
4.4. Certified Funds. If any noncash payment made by Tenant is not paid by the bank or other
institution on which it is drawn, Landlord shall have the right, exercised by notice to Tenant, to
require that Tenant make all future payments by certified funds or cashier's check.
Artiele 5
ADDITIONAL RENT
5.1. Additional Rent: Rent. In addition to paying the Base Rent specified in Article 4, Tenant
shall reimburse Landlord, on demand, as /dditional Rent, for any taxes required to be paid by
Landlord, when those taxes are:
a) Measured by or reasonably attributable to:
1) The cost or value of Tenant's equipment, furniture, fixtures, and other personal
property located in the Premises; or
2)The cost or value of any leasehold improvements made in or to the Premises by or for
Tenant(to the extent that the cost or value of those leasehold improvements exceeds the cost or
value of a building-standard build-out, as determined by Landlord, regardless of whether title to
those improvements is vested in Tenant or Landlord);
b)Assessed on or related to the possession, leasing, use, or occupancy by Tenant of:
1)The Premises;
2)Any portion of the Real Property; or
3)The parking area used by Tenant in connection with this Lease; or
c) Assessed either on this transaction or on any document to which Tenant is a party tha
creates or transfers an interest or an estate in the Premises.
That additional rent, together with other amounts of any kind (other than Base Rent) payable
by Tenant to Landlord under the terms of this Lease, shall.be collectively referred to in this Lease
as Additional Rent (herein referred to as "Additional Rent"). Base Rent and Additional Rent are
collectively referred to in this Lease as Rent (herein referred to as "Rent"). Without limitation on
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other obligations of Tenant that survive the expiration of the Lease Term, TenanYs obligations to
pay the Additional Rent provided for in this Article 5 survive the expiration of the Lease Term.
5.2. Possessory Interest Taxes. A possessory interest subject to property taxation may be
created by this Lease. It is understood and agreed that 'rf such a possessory interest is created,
Tenant shall be responsible for the payment of all property taxes levied on such interest, and that
Landlord shall have no responsibility therefor. Tenant shall pay and hold Landlord harmless from
all possessory interest taxes levied against Tenant by the Assessor's Office of the County of
Orange, California.
Article 6
SECURITY DEPOSIT
6.1. Amount of Securitv Deposit; Application. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord a cash sum in the amount stated in the Summary
herein referred to as the°Security DeposiY'). Landlord shall hold the Security Deposit as security
for the performance of Tenant's obligations under this Lease. If Tenant defaults on any provision
of this Lease, Landlord may(but shall not be required to), without prejudice to any other remedy
it has, apply all or part of the Security Deposit to:
a)Any Rent or other sum in default;
b)Any amount that Landlord may spend or become obligated to spend in exercising Landlord's
rights under Article 23; or
c)Any expense, loss, or damage that Landlord may suffer because of Tenant's default.
Tenant waives the provisions of Califomia Civil Code section 1950.7 and all other provisions of
lauu naw in force or that become in force after the date of execution of this Lease that provide that
Landlord may claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of accrued Rent, to repair damage caused by Tenant, or to clean the
Premises. Landlord and Tenant agree that Landlord may, in addition, claim those sums
reasonably necessary to compensate Landlord for any other foreseeable or unforeseeable loss
ar damage caused by the act or omission of Tenant or TenanYs officers, agents, emptoyees,
independent contractors, or invitees, including future rent payments.
6.2. Landlord's Transfer of Securitv Deposit on Transfer of Interest in Premises. If Landlord
disposes of its interest in the Premises, Landlord may deliver or credit the Security Deposit to
Landlord's successor in interest in the Premises and thereupon be relieved of further responsibility
with respect to the Security Deposit.
6.3.Assiqnment or Encumbrance of Securitv Deposit. Tenant may not assign or encumber the
Security Deposit without the prior,written consent of Landlord. Any attempt to do so shall he void
and shall not be binding on Landlord.
6.4. Restoration of Securitv Deposit. If Landlord applies any portion of the Security Deposit,
Tenant shall, within thirty (30) days after demand by Landlord, deposit with Landlord an amount
sufficient to restore the Security Deposit to its original amount.
6.5. Interest on Securitv Deposit. Tenant is not entitled to any interest on the Security Deposit.
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6.6. Return of Security Deposit. If Tenant performs every provision of this Lease to be
perFormed by Tenant, the unused portion of the Security Deposit shall be retumed to Tenant or
the last assignee of Tenant's interest under this Lease within thirty (30) days following the
expiration or termination of the Lease Term.
Article 7
USE
7.1. Permitted Use. Tenant shall use the Premises solely for the"Permitted Use," as defined
in the Summary. Tenant shall not use or permit the Premises to be used for any other purpose
without Landlord's prior written consent, which may be granted or withheld in Landlord's sole
discretion.
7.2. Rules and Requlations. Tenant shall comply with the rules attached to this Lease as
Exhibit C and any amendments or additions promulgated by Landlord from time to time for the
safety, care, and cleanliness of the Premises, Building, and Real Property or for the preservation
of good order (herein referred to as the "Rules and Regulations"). Landlord shall not be
responsible to Tenant for the failure of any other tenants or occupants of the Building to comply
with the Rules and Regulations.
7.3.Additional Restrictions on Use. In addition to complying with other provisions of this Lease
concerning the use of the Premises:
a)Tenant shall not permit the occupancy of the Premises at any time during the Lease Term
to exceed nine (9) persons;
b)Tenant shall not use or allow any person to use the Premises for any purpose that is contrary
to the Rules and Regulations, that violates any Laws and Orders, that constitutes waste or
nuisance, or that would unreasonably annoy other occupants of the Building or the owners or
occupants of buildings adjacent to the Building; and
c) Tenant shall comply with all recorded covenants, conditions, and restrictions that now or
later affect the Real Property.
Article 8
COMPLIANCE WITH LAWS
8.1. Definition of Laws and Orders. For purposes of this Article 8,the term "Laws and Orders"
herein referred to as "Laws and Orders") includes all federal, state, county, city, or govemment
agency laws, statutes, ordinances, standards, rules, requirements, or orders now in force or
hereafter enacted, promulgated, or issued. The term also includes government measures
regulating or enforcing public access, occupational, health, or safety standards for employers,
employees, landlords, or tenants.
8.2. Repairs, Replacements, Alterations, and Improvements. Tenant shall continuously and
without exception repair and maintain the Premises, including tenant improvements, "Alterations"
as defined in Article 12), fixtures, and furnishings, in an order and condition in compliance with
all Laws and Orders. Tenant, at Tenant's sole expense, shall promptly make all repairs,
replacements, alterations, or improvements needed to comply with all Laws and Orders to the
extent that the Laws and Orders relate to or are triggered by (a) Tenant's particular use of the
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Rremises, (b)the tenant improvements located in the Premises, or(c) any Alterations located in
the Premises.
Landlord, at Landlord's sole expense, shall promptly make all repairs, replacements,
alterations, or improvements needed to comply with all Laws and Orders to the extent that the
Laws and Orders relate to the "Base Systems" described in the Summary (herein referred to as
the "Base Systems"). If, however, such compliance work on the Base Systems is triggered by
the tenant improvements or Alterations requested by Tenant under Article 12, Tenant shall bear
all expense of such work on the Base Systems.
8.3. Collateral Estoppel. The judgment of any court of competent jurisdiction or the admission
of Tenant in any judicial or administrative action or proceeding that Tenant has violated any Laws
and Orders shall be conclusive, between Landlord and Tenant, of that fact, whether or not
Landlord is a party to that action or proceeding.
8.4. Mold. Tenant agrees to maintain the Premises in a manner that prevents the occurrence
of an infestation of mold, mildew, microbial growths, and any associated mycotoxin (herein
referred to as "Mold") in the Premises. Tenant agrees to:
a) Immediately fix/abate any water intrusions, such as plumbing leaks, drips, or sweating
pipes;
b) Use all reasonable care to close all windows and other openings in the Premises to prevent
outdoor water from penetrating the interior unit;
c) Clean and dry any visible moisture on the windows, walls, and other su faces, including
personal property, as soon as reasonably possible;
d) Keep the Premises free of dirt and debris that can harbor Mold;
e) Regularly clean and sanitize windows, bathrooms, kitchens, and other surfaces where
water, moisture condensation, and Mold can collect;
Use exhaust fans whenever dishwashing or cleaning;
g) Maintain regular airflow and circulation throughout the Premises;
h) Limit the indoor watering of plants;
i} Prevent the overFlow or release of water from the bathrooms or kitchens, including but not
limited to toilets, sinks, kitchen appliances, and other receptacles of water;
j) Maintain and not obstruct fresh air supply to fumace, air conditioner, or heating ducts.
k) Maintain and not obstruct ventilation in all locations in the Premises;
I) Prevent the clogging of all plumbing;
m) Not engage in any conduct that promotes or creates Mold growth; and
n) Report within forty-eight (48)hours the following to the Landlord:
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1)Any nonworking fan, heater, air conditioner, or ventilation system;
2) Plumbing leaks, drips, sweating pipes,wet spots;
3) Overflows from bathroom, kitchen, or other facilities, including but not limited to tubs,
showers, shower enclosures, toilets, sinks, kitchen appliances, or other receptacles of water,
especially in cases when the overflow may have permeated walls,floors, ceilings, or fixtures;
4)Water intrusion of any kind;
5)Any Mold or black or brown spots, or moisture on surfaces inside the Premises;
6) Broken plumbing systems or standing water near structures;
7)Any discovery of adverse health conditions or symptoms related to Mold growth at the
Premises;
8) Any discovery of allergies, predisposition to or heightened risk of adverse health
reactions, or hypersensitivity to Mold growth on the Premises; and
9)Any odors consistent with Mold growth.
Further,Tenant agrees not to use any methods of Mold investigation, testing, remediation and
repair that are speculative and not generally accepted within the scientific community. As of the
date of this lease, such speculative and generally unaccepted methods of investigation, testing
remediation,and repair include(1)any use of settled dust vacuum sampling;(2)any use of interior
wall cavity air sampling; (3)TenanYs use of do-it-yourself Mold investigation kits; and (4) use of
any methods that have not been peer reviewed and generally accepted within the scientific
community.
To the maximum extent permitted by law, Tenant agrees to indemnify, defend, and hold
harmless Landlord Parties from and against any and all claims, demands, liabilities, judgments,
actions, damages, causes of action or otherwise, in any manner related to the presence in the
Premises or the Carriage House or the Royer Building of Mold that was caused or contributed to
by Tenant in any manner whatsoever, and regardless of whether Landlord's active or passive
negligence contributed to such presence.
Article 9
HAZARDOUS MATERIAL
9.1. Use of Hazardous Material. Tenant shall not cause or permit any Hazardous Material",
as defined in Section 9.6, to be generated, brought onto, used, stored, or disposed of in or about
the Premises or the Building by Tenant or its agents, employees, contractors, subtenants, or
invitees, except for limited quantities of standard office and janitorial supplies containing
chemicals categorized as Hazardous Material. Tenant shall:
a) Use, store, and dispose of all such Hazardous Material in strict compliance with all
applicable statutes, ordinances, and regulations in effect during the Lease Term that relate to
public health and safety and protection of the environment (herein referred to as the
Environmental Laws"), including those Environmental Laws identified in Section 9.6; and
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b) Comply at all times during the Lease Term with all Environmental Laws.
9.2. Notice of Release or Investiqation. If, during the Lease Term (including any extensions),
Tenant becomes aware of (a) any actual or threatened release of any Hazardous Material on,
under, or about the Premises, the Camage House or the Royer Building or (b) any inquir,
investigation, proceeding, or claim by any government agency or other person regarding the
presence of Hazardous Material on, under, or about the Premises, the Carriage House or the
Royer Building,Tenant shall give Landlord written notice of the release or investigation within five
5) days after learning of it and shall simultaneously furnish to Landlord copies of any claims,
notices of violation, reports, or other vuritings received by Tenant that concem the release or
investigation.
9.3. Asbestos Notification for Commercial Propertv Constructed Before 1979. Tenant
acknowledges that Landlord has advised Tenant that the Building contains or, because of its age,
is likely to contain asbestos-containing materials(°ACMs"). If Tenant undertakes any alterations,
additions, or improvements to the Premises, as permitted by Article 12, Tenant shall, in addition
to complying with the requirements of Article 12, undertake the alterations, additions, or
improvements in a manner that avoids disturbing any ACMs present in the Carriage House or
elsewhere on the Real Property. If ACMs are likely to be disturbed in the course of such work,
Tenant shall encapsulate or remove the ACMs in accordance with an approved asbestos-removal
plan and otherwise in accordance with all applicable Environmental Laws, including giving all
notices required by Health and Safety Code sections 25915-25919.7.
9.4. Indemnification. Tenant shall, at Tenant's sole expense and with counsel reasonably
acceptable to Landlord, indemnify, defend, and hold harmless Landlord and Landlord's
shareholders,directors, officers, employees, partners, affiliates, agents, successors, and assigns
with respect to all losses arising out of or resulting from the release of any Hazardous Material in
or about the Premises, the Carriage House or the Royer Building, or the violation of any
Environmental Law, by Tenant or Tenant's agents, assignees, sublessees, contractors, or
invitees. This indemnification applies whether or not the concentrations of any such Hazardous
Material is material, the concentrations exceed state or federal maximum contaminant or action
levels, or any govemmental agency has issued a cleanup order. This indemnification includes:
a) Losses attributable to diminution in the value of the Premises, the Carriage House or the
Royer Building;
b) Loss or restriction of use of rentable space in the Carriage House or the Royer Building;
c)Adverse effect on the marketing of any space in the Carriage House or the Royer Building;
and
d) All other liabilities, obligations, penalties, fines, claims, actions (including remedial or
enforcement actions of any kind and administrative or judicial proceedings,orders,or judgments),
damages (including consequential and punitive damages), and costs (including attorney,
consultant, and expert fees and expenses) resulting from the release or violation.
This indemnification shall survive the expiration or termination of this Lease.
9.5. Remediation Obliqations. If the presence of any Hazardous Material brought onto the
Premises, the Carriage House or the Royer Building by Tenant or Tenant's employees, agents,
11
contractors, or invitees results in contamination of the Carriage House or the Royer Building,
Tenant shall promptly take all necessary actions to remove or remediate such Hazardous
Materials,whether or not they are present at concentrations exceeding state or federal maximum
concentration or action levels, or any governmental agency has issued a cleanup order, at
Tenant's sole expense, to return the Rremises, the Carriage Mouse or the Royer Building to the
condition that existed before the introduction of such Hazardous Material. Tenant shall first obtain
Landlord's approval of the proposed removal or remedial action. This provision does not limit the
indemnification obligation set forth in Section 9.4.
9.6. Definition of Hazardous Material. As used in this Article 9, the term "Hazardous Material"
herein referred to as "Hazardous Material") shall mean any hazardous or toxic substance,
material, or waste at any concentration that is or becomes regulated by the United States, the
State of Califomia, or any local government authority having jurisdiction over the Building.
Hazardous Material includes:
a) Any "hazardous substance," as that term is defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (CERCLA) (42 United States Code sections
9601-9675);
b)"Hazardous waste,"as that term is defined in the Resource Conservation and Recovery Act
of 1976 (RCRA) (42 United States Code sections 6901-6992k);
c) Any pollutant, contaminant, or hazardous, dangerous, or toxic chemical, material, or
substance, within the meaning of any other applicable federal, state, or local law, regulation,
ordinance, or requirement(including consent decrees and administrative orders imposing liability
or standards of conduct concerning any hazardous, dangerous, or toxic waste, substance, or
material, now or hereafter in effect);
d) Petroleum products;
e) Radioactive material, including any source, special nuclear, or byproduct material as
defined in 42 United States Code sections 2011-2297g-4;
f)Asbestos in any form or condition; and
g) Polychlorinated biphenyls (PCBs) and substances or compounds containing PCBs.
Article 10
UTILITIES AND SERVICES
10.1. Standard Tenant Utilities and Services. Subject to applicable govemment rules,
regulations, and guidelines and the rules or actions of the public utility furnishing the service,
Landlord shall provide the following utilities and services on all days during the Lease Ter,
unless otherwise stated in the Lease:
10.1.1. Heating and Air Conditioninq. Landlord shall provide heating and air conditioning when
necessary for normal comfort for normal office use in the Premises,as reasonably determined by
Landlord, on Mondays through Saturdays from 7:00 a.m.through 6:00 p.m. (herein referred to as
the"Building Hours") or such shorter periods as may be prescribed by any applicable policies or
regulations adopted by any utility or governmental agency, except for the dates of observation of
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Neuv Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas
Day, and other locally or nationally recognized holidays ("Holidays").
10.1.2. Electricitv. Landlord shall provide electricity for lighting and power in the Premises if:
a) The connected electrical load for lighting does not exceed an average of one (1) watt per
Rentable Square Foot of the Premises during the Building Hours on a monthly basis; and
b)The connected electrical load for all other power purposes does not exceed an average of
two (2)watts per Rentable quare Foot of the Premises during the Building Mours on a monthly
basis.
Electricity for TenanYs lighting and other power purposes shall be at a nominal one hundred
twenty (12U) volts. No electrical circuit for the supply of power shall require a current capacity
exceeding twenty(20) amperes. Landlord shall replace lamps, starters, and ballasts for Building
standard lighting fixtures within the Premises on Tenant's request and at Tenant's expense.
Tenant shall replace lamps, starters,and ballasts for non-Building standard lighting fixtures within
the Premises at Tenant's expense.
10.1.3. Water. Landlord shall provide water from the regular Building outlets for drinking,
lavatory, and toilet purposes.
10.1.4. Janitorial Services. Landlord shall provide janitorial services in and about the reception
area of the Carriage House located adjacent to the Premises, as well as in the main lobby of the
Royer Building, the conference room, common corridors and hallways, stairwells, restrooms,
kitchens, shower facilities, and other public or common areas located on the Real Property on
Mondays through Fridays, except on Holida rs. Landlord shall not be required to provide janitorial
services to the Premises. Tenant shall provide janitorial services at Tenant's sole cost and
expense in and about the Premises.
10.1.5. Trash Removal. Tenant will cause all trash and garbage in and about the Premises to
be emptied into receptacles outside the Premises that are designated by Landlord. Landlord shall
pay for the cost to have the trash and garbage that is emptied into receptacles removed from the
Real Property. Tenant shall not place or have placed in the receptacles any material that may
not or cannot be disposed of in the ordinary and customary manner of removing and disposing of
trash in the vicinity of the Building. In disposing of trash and garbage, Tenant shall comply fully
with any law or ordinance governing that disposal.
10.1.6. Pest Control Reauirements. If any event of pest or vermin infestation is found in the
Premises or anywhere else in the Car iage House or the Royer Building that may be directly or
indirectly related to Tenant's or Tenant's employees or invitee's use of the Premises or the
operation of Tenant's business, then Tenant, at TenanYs expense, will have a bonded,
professional pest-and-sanitation control operator immediately remedy such event of infestation.
Landlord may also require that any such work be performed, at Tenant's cost, by a contractor
designated or approved by Landlord.
10.2. Over-standard Tenant Use. Tenant shall not, without Landlord's prior written consent,
use heat-generating machines, machines other than normal fractional horsepower office
machines, or equipment or lighting other than building standard lights in the Premises that may
affect the temperature otherwise maintained by the air-conditioning system or increase the water
normally fumished to the Premises by Landlord under Section 10.1.
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If such consent is given, Landlord shall have the right to install supplementary air-conditioning
units or other facilities in the Premises, including supplementary or additional metering devices.
On billing by Landlord, Tenant shall pay the cost for such supplementary facilities, including the
cost of (a) installation, operation, and maintenance; (b) increased wear and tear on existing
equipment; and (c) other similar charges.
If Tenant uses water, electricity, heat, or air conditioning in excess of that required to be
supplied by Landlord under section 10.1 (as a result,for example, of extended hours of operation,
heavier use of duplicating, computer, telecommunications, or other equipment in excess of the
normal use for general office uses in the Carriage House, or a density of workers in excess of the
normal density for general office uses in the Camage House), Tenant shall pay to Landlord, on
billing, the cost of (a) the excess service; (b) installation, operation, and maintenance of
equipment installed to supply the excess service; and (c) increased wear and tear on existing
equipment caused by Tenant's excess consumption. Landlord may install devices to separately
meter any increased use or reasonably and equitably estimate the cost of such increased use.
On demand, Tenant shall pay the increased cost directly to Landlord, including the cost of the
additional metering devices.
Tenant's use of electricity shall never exceed the capacity of the feeders serving the Base
Systems and the Premises or the risers or wiring installation. If Tenant wishes to use heat,
ventilation, or air conditioning during hours other than those for which Landlord is obligated to
supply such utilities under Section 10.1,Tenant shall give Landlord such prior notice as Landlord
shall from time to time establish as appropriate, and Landlord shall supply such utilities to Tenant
at an hourly cost to Tenant as Landlord shall from time to time establish. Amounts payable by
Tenant to Landlord under this section 10.2 for use of additional utilities shall be considered
Additional Rent under this Lease and shall be billed on a monthly basis.
10.3. Interruption of Utilities. Tenant agrees that Landlord shall not be liable for damages, by
abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including
telephone and telecommunication services) or for diminution in the quality or quantity of any
service when the failure, delay, or diminution is entirely or partially caused by:
a) Breakage, repairs, replacements, or improvements;
b) Strike, lockout, or other labor trouble;
c)Inability to secure el ctricity,gas,water,or other fuel at the Carriage House after reasonable
effort to do so;
d)Accident or casualty;
e)Act or default of Tenant or other parties; or
fl Any other cause beyond Landlord's reasonable control. Such failure, delay, or diminution
shall not be considered to constitute an eviction or a disturbance of Tenant's use and possession
of tk e Rremises or relieve Tenant from paying Rent or performing any of its obligations under this
Lease.
Landlord shall not be liable under any circumstances for a loss of or injury to property or for
injury to or interference with Tenant's business, including loss of profits through, in connection
14
with, or incidental to a failure to fumish any of the utilities or services under this Article 10.
Landlord may comply with mandatory or voluntary controls or guidelines promulgated by any
govemment entity relating to the use or conservation of energy, water, gas, light, or electricity or
the reduction of automobile or other emissions without creating any liability of Landlord to Tenant
under this Lease as long as compliance with voluntary controls or guidelines does not materially
and unreasonably interfere with Tenant's use of the Premises.
10.4.Telecommunications Installations. Neither Tenant nor its contractors, representatives, or
service providers shall, without Landlord's prior written consent, install, maintain, operate, alter,
repair, or replace any wire, line, cable, conduit, antenna, satellite dish, or other facilities or
equipment for use in connection with any telephone, television, tetecommunications, computer,
Internet, or other communications or electronic systems, services, or equipment(which systems,
services, and equipment are referred to collectively as "Telecommunications Equipment") in, on,
or about the Carriage House or the Royer Building or the roof or exterior walls of the Carriage
Mouse or the Royer Building, except for installations or alterations wholly within the Rremises in
accordance with Sections 12.1-12.6.
10.4.1. Conditions. Without limiting the generality of the foregoing, Landlord may limit the
number of carriers, vendors, or other operators installing, maintaining, or operating
Telecommunications Equipment in or on the Carriage House or the Royer Building and may
approve any telecommunication services provider in the Carriage House or the Royer Building,
as deemed necessary or appropriate by Landlord for the orderty and efficient management and
operation of the Carriage House or the Royer Building. Any determination made by Landlord
under this section shall be made in accordance with Landlord's sole discretion, rovided,
however, that with regard to any request by Tenant to install Telecommunications Equipment on
the roof of the Carriage House or the Royer Building, Tenant agrees that Landlord may, without
limitation, condition its consent on (1)Tenant's payment of rent or fees for TenanYs use of such
roof space, in an amount determined by Landlord in its sole discretion; (2) Landlord's approval or
designation of the pathway for any line, cable, wire, or conduit; and (3)the installation by Tenant,
at its sole cost and expense, of a structural platform and/or access walkway to protect the roof
from damage from the placement of and access to the Telecommunications Equipment installed
on the roof. Any installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment by or for Tenant shall be subject to all of the requirements and
provisions of this Lease, including, vuithout limitation, Sections 12.1-12.6, 8.1-8.3, and 14.3.
Landlord may also require that any such work, including work on or involving the roof (and
including, without limitation, any roof penetrations approved by Landlord), be performed, at
Tenant's cost, by a contractor designated or approved by Landlord. In addition, if Landlord
determines that the riser or telecommunications closet space in the Carriage House or the Royer
Building is inadequate to accommodate any Telecommunications Equipment proposed by Tenant
along with the existing and/or future needs of other occupants and users of the Carriage House
or the Royer Building, Landlord may condition Landlord's approval of Tenant's
Telecommunications Equipment on the construction of additional riser or telecommunications
closet space as designated by Landlord at Tenant's expense. Landlord may require that Tenant,
or the carrier or operator, as applicable, enter into a telecommunications access agreement on a
form approved by Landlord prior to any installation of Telecommunication Equipment.
10.4.2. Government Approvals. If Tenant installs any Telecommunications Equipment,Tenant
shall do so at its sole cost and expense, and Tenant shall obtain, at its sole cost and expense,
any and all permits,authorizations,and certificates, including,without limitation,zoning variances
or changes, as may be required with respect to such Telecommunications Equipment from all
govemmental agencies. Landlord agrees to reasonably cooperate with Tenant to obtain same if
15
required by applicable govemmental agencies; provided, however, that Landlord shall not be
obligated to incur any costs or accept the imposition of any zoning change or use restrictions
affecting the Carriage House or the Royer Building.
10.4.3. Noninterference. Telecommunications Equipment installed or operated by or for Tenant
shall not interfere with the operation (including, without limitation, transmissions or reception) of
any other Telecommunications Equipment located in the Carriage House or the Royer Building.
10.4.4. Cooperation W ith Landlord and Other Tenants. Tenant acknowledges that the Carriage
House and the Royer Building contains limited space and facilities to accommodate
Telecommunications Equipment, and agrees to reasonably cooperate with Landlord and with
other providers and users of Telecommunications Equipment to share the available space and
facilities and to coordinate the efficient collocation of Telecommunications Equipment in the
Carriage House and the Royer Building. Access to and use of space within conduit, utility closets,
risers,raceways,switching rooms,the roof,and other facilities in the Carriage House or the Royer
Building for the installation, maintenance, operation, alteration, repair, or replacement of
Telecommunications Equipment shall be subject to Landlord's approval and to such rules and
regulations as may be promulgated by Landlord from time to time.
10.4.5. Indemni . Tenant shall repair any damage caused by TenanYs installation,
maintenance, operation, alteration, repair, or replacement of Telecommunications Equipment,
and shall indemnify, protect, defend, and hold Landlord harmless from all "Claims" (as that term
is defined in Section 14.3.2, including, without limitation: (1) any Claims by other tenants of the
Carriage House or the Royer Building or other third parties that Tenant's installation,
maintenance, operation,alteration,repair,or replacement of Telecommunications Equipment has
caused interFerence or interruption with the operation of other Telecommunications Equipment;
and (2)any voiding of or other effect that TenanYs installation, maintenance, operation,alteration,
repair, or replacement of Telecommunications Equipment may have on any warranty with respect
to the roof or other portions of the Carriage House or the Royer Building. Landlord shall not be
liable for any damage to or interference with TenanYs business or any loss of income from
TenanYs business, or for loss of or damage to TenanYs Telecommunications Equipment caused
by or resulting from any damage to or interference with, or operation of TenanYs
Telecommunications Equipment, including, without limitation, damage or interference caused by
or resulting from the installation, maintenance, aperation, alteration, repair, or replacement of
other Telecommunications Equipment in the Carriage House or the Royer Building, whether by
or for Landlord, other tenants of the Carriage House or the Royer Building, or other third parties,
and Tenant waives all Claims against Landlord for the same,except that Landlord shall indemnify,
protect, defend, and hold Tenant harmless from all Claims (but in no event lost profits or other
consequential damages)to the extent arising out of or in connection with the gross negligence or
willful acts of Landlord or its agents, employees, or representatives. Landlord's approval of
Tenant's installation of any Telecommunications Equipment shall not constitute a representation
that any such Telecommunications Equipment will function effectively in or on the Carriage House
or the Royer Building.
Artiole 11
TENANT'S REPAIR AND MAINTENANCE OBLIGATIONS
Tenant shall, at Tenant's sole expense and in accordance with the terms of this Lease
including Article 12), keep the Premises (including all tenant improvements,Alterations,fixtures,
and furnishings) in good order, repair, and condition at all times during the Lease Term. Under
Landlord's supervision, subject to Landlord's prior approval, and within any reasonable period
16
spec'rfied by Landlord, Tenant shall, at Tenant's sole expense and in accordance with the terms
of this Lease (including Article 12) promptly and adequately repair all damage to the Premises
and replace or repair all damaged or broken fixtures and other leasehold improvements. At
Landlord's option or if Tenant fails to make such repairs, Landlord may, but need not, make the
repairs and replacements. On receipt of an invoice from Landlord, Tenant shall pay Landlord
Landlord's out-of-pocket costs incurred in connection with such repairs and replacements plus a
percentage of such costs, to be uniformly established for the Building, sufficient to reimburse
Landlord for all overhead, general conditions, fees, and other costs and expenses arising from
Landlord's involvement with such repairs and replacements. Tenant waives and releases its
rights, including its right to make repairs at Landlord's expense, under California Civil Code
sections 1941-1942 or any similar law, statute, or ordinance now or hereafter in effect.
Article 12
ALTERATIONS AND ADDITIONS
12.1. Landlord's Consent to Alterations. Tenant may not make any improvements, alterations,
additions, or changes to the Premises (herein referred #o as the "Alterations") without first
obtaining Landlord's prior written consent.
12.1.1. Consent Procedure: Conditions. Tenant shall request such consent by written notice
to Landlord, which must be accompanied by detailed and complete plans and specifications for
the proposed work. As a condition of its consent to Alterations, Landlord may impose any
requirements that Landlord considers desirable or necessary, including a requirement that Tenant
provide Landlord with a surety bond, a letter of credit, or other financial assurance that the cost
of the Alterations will be paid when due.
12.1.2. Reasonable Consent. Landlord shall not unreasonably withhold or delay its consent to
proposed Alterations. The Alterations for which Landlord may reasonably withhold consent
include those that would or could:
a) Affect the structure of the Carriage House or the Royer Building or any portion of the
Carriage House or the Royer Building other than the interior of the Premises;
b)Affect the Base Systems of the Premises or the Carriage House;
c)Result in Landlord being required under Laws and Orders to perform any work that Landlord
could otherwise avoid or defer(herein referred to as the"Additional Required Work");
d) Result in an increase in the demand for utilities or services that Landlord is required to
provide;
e) Cause an increase in the premiums for hazard or liability insurance carried by Landlord; or
f) Otherwise overload the floor load capacity or unduly burden the Base Systems.
Base Systems (herein referred to as the "Base Systems") means all systems and equipment
including plumbing; heating, ventilation, and air-conditioning; electrical; fire/life-safety; and
security systems)that serve all or part of the Carriage House.
17
12.1.3. Costs of Review. Tenant shall reimburse Landlord for the reasonable fees and costs
of any architects, engineers, or other consultants retained by Landlord to review the proposed
Alterations.
12.2. Comqliance of Alterations with Laws and Insurance ReQuirements. Tenant shall cause
all Alterations to comply with the following:
a)Applicable Laws and Orders;
b)Applicable requirements of a fire-rating bureau; or
c)Applicable requirements of Landlord's hazard insurance carrier to the extent that Tenant is
informed of them.
Tenant shall also comply with those requirements in the course of constructing the Alterations.
Before beginning construction of any Alteration, Tenant shall, at Tenant's sole expense, obtain a
valid building permit and any other permits required by any govemment entity having jurisdiction
over the Premises. Tenant shall provide coPies of those permits to Landlord before the work
begins.
Tenant shall, at TenanYs sole expense, design, permit, and perform any Additional Required
Work in the Premises, which shall be subject to the same requirements as any Alteration. If any
Additional Required Work must be perFormed outside the Premises, Landlord may elect to
perform that work at Tenant's expense. No consent by Landlord to any proposed work shall
constitute a waiver of Tenant's obligations under this Section 12.2.
12.3. Manner of Construction. Tenant shall build Alterations entirely within the Premises and
in accordance with the Landlord-approved plans, using only contractors and subcontractors
approved in writing by Landlord. All work relating to any Alterations shall be done in a good and
workmanlike manner, using new materials. All work shall be diligently prosecuted to completion.
Tenant shall ensure that all work is performed in a manner that does not obstruct access to or
through the Carriage House orthe Royer Building or its common areas and that does not interfere
either with nther tenants' use of their premises or with any other work being undertaken in the
Carriage House or the Royer Building. Tenant shall take all measures necessary to ensure that
labor peace is maintained at all times.
Within twenty (20) days after completion of any Alterations, Tenant shall deliver to Landlord a
reproducible copy of the drawings of Alterations as built.
12.4. Pavment for Alterations. Tenant shall promptly pay all charges and costs incurred in
connection with any Alteration, as and when required by the terms of any agreements with
contractors, designers, or suppliers. At least fifteen (15) days before beginning construction of
any Alteration, Tenant shall give Landlord written notice of the expected commencement date of
that construction to permit Landlord to post and record a notice of non-responsibility.
On completion of any Alteration,Tenant shall:
a)Cause a timely notice of completion to be recorded in the office of the Clerk-Recorder of the
County of Orange in accordance with Civil Code section 3093 or any successor statute;
18
h) Deliver to Landlord evidence of full payment and executed uncondi#ional final waivers of all
liens for labor, services, or materials, all in recordable form; and
c) Pay to Landlord five percent (5%) of the cost of constructing the Alteration to compensate
Landlord for all overhead,costs,and expenses arising from Landlord's involvement with that work.
12.5. Construction Insurance. Before construction begins, Tenant shall deliver to Landlord
reasonable evidence that damage to, or destruction of, the Alterations during construction will be
covered either by the policies that Tenant is required to carry under Article 14 or by a policy of
builder's all-risk insurance in an amount approved by Landlord.
If Landlord requires Tenant to provide builder's all-risk insurance for the proposed Alterations,
Tenant shall provide a copy of the policy, any endorsements, and an original certificate of
insurance that complies with subsection 14.9.2.
Tenant shall cause each contractor and subcontractor to maintain all workers' compensation
insurance required by law and liability insurance (including property damage) in amounts
reasonably required by Landlord. Tenant shall provide evidence of that insurance to Landlord
before construction begins.
12.6. Ownership of Alterations. All Alterations, signs, fixtures, or equipment that may be
installed or placed in or about the Rremises from time to time shall be and become the property
of Landlord on installation.
Except as otherwise set forth in this Lease, by written notice to Tenant either before expiration
nf the Lease Term or within a reasonable time afterany earlier termination of this Lease, Landlord
may require Tenant, at Tenant's sole expense, to remove any Alterations and restore the
Premises to their configuration and condition before the Alterations were made. If Tenant fails to
complete that restoration before expiration of the Lease Term or, in the case of earlier termination,
within fifteen (15)days after written notice from Landlord requesting the restoration, Landlord may
do so and charge the cost of the restoration to Tenant.
Article 13
COVENANT AGAINST LIENS
Tenant shall not be the cause or object of any liens or allow such liens to exist, attach to, be
placed on, or encumber Landlord's or Tenant's interest in the Premises, the Carriage House, the
Rayer Huilding or the Real.Property by operation of law or otherwise. Tenant shall not suffer or
permit any lien of inechanics, material suppliers, or others to be placed against the Premises, the
Carriage House, the Royer Building, or the Real Property with respect to work or services
perFormed or claimed to have been perFormed for Tenant or materials furnished or claimed to
have been furnished to Tenant or the Premises. Landlord has the right at all times to post and
keep posted on the Premises any notice that it considers necessary for protection from such liens.
At least seven(7)days before beginning construction of any Alteration,Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit Landlord to post
and record a notice of non-responsibility.
If any such lien attaches or Tenant receives notice of any such lien,Tenant shall cause the lien
to be immediately released and removed of record. Despite any other provision of this Lease, if
the lien is not released and removed v rithin five (5) days after Landlord delivers notice of the lien
to Tenant, Landlord may immediately take all action necessary to release and remove the lien,
19
without any duty to investigate the validity of it. All expenses(including reasonable attomey fees)
incurred by Landlord in connection with the lien shall be considered Additional Rent under this
Lease and be immediately due and payable by Tenant.
rticle 1 A
EXCULPATION, INDEMNIFICATION, AND INSURANCE
14.1. Definition of"Tenant Parties"and "Landlord Parties". For purposes of this Article 14, the
term"Tenant Parties" (herein referred to as the"Tenant Parties")refers singularly and collectively
to Tenant and TenanYs officers, members, partners, agents, employees, and independent
contractors as well as to all persons and entities claiming through any of these persons or entities.
The term "Landlord Parties" (herein referred to as the "Landlord Parties") refers singularly and
collectively to Landlord and the officers, directors, members, and any other affiliated entities
including the City), persnnal representatives, assigns, licensees, invitees, beneficiaries, agents,
servants, employees, and independent contractors of these persons or entities.
14.2. Exculpation.
14.2.1. Exculpation. To the fullest extent permitted by law, Tenant, on its behalf and on behalf
of all Tenant Parties, waives all claims (in law, equity, or otherwise) against Landlord Parties
arising out Qf, knovfringly and voluntarily assumes the risk of, and agrees that Landlord Parties
shall not be liable to Tenant Parties for any of the following:
a) Injury to or death of any person; or
b) Loss of, injury or damage to, or destruction of any tangible or intangible property, including
the resulting loss of use, economic losses, and consequential or resulting damage of any kind
from any cause.
Landlord Parties shall not be liable under this clause regardless of whether the liability results
from any active or passive act, error, omission, or negligence of any of the Landlord Parties; or is
based on claims in which liability without fault or strict liability is imposed or sought to be imposed
on any of the Landlord Parties.
This exculpation clause shall not apply to claims against Landlord Parties to the extent that a
final judgment of a court of competent jurisdiction establishes that the injury, loss, damage, or
destruation was proximately caused by Landlord Rarties'fraud,willful injury to person or property,
or violation of law.
14.2.2. Survival of F cculaation. The clauses of this Section 14.2 shall survive the expiration or
earlier termination of this Lease until all claims within the scope of this Section 14.2 are fully,
finally, and absolutely barred by the applicable statutes of limitations.
14.2.3. Tenant's AcknowledQment of Fairness. Tenant acknowledges that this Section 14.2
was negotiated with Landlord, #hat the consideration for it is fair and adequate, and that Tenant
had a fair opportunity to negotiate, accept, reject, modify, or alter it.
14.2.4. No Exculpation for Non-deleqable Duties. This exculpation clause may not be
interpreted or construed as an attempt by Landlord to be relieved of liability arising out of a non-
delegable duty on the part of Landlord.
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14.2.. Waiver of Civil Code Section 1542. With respect to the exculpation provided in this
Article 14, Tenant waives the benefits of Civil Code Section 1542, which provides:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which '
by him or her must have materiall affected his or her settlement with or."
LANDLORD'S INITIA : TENANT'S INITIALS:
14.3. Indemnification.
14.3.1. Tenant's Indemnification of Landlord Parties. To the fullest extent permitted by law,
Tenant shall, at Tenant's sole expense and with counsel reasonably acceptable to Landlord,
indemnify, defend, and hold harmless Landlord Parties from and against all Claims, as defined in
subsectian 14.3.2, from any cause, arising out of or relating (directly or indirectly) to this Lease,
the tenancy created under this Lease, or the Premises, including:
a)The use or occupancy,or manner of wse or occupancy,of the Premises,the Carriage House
or the Royer Building by Tenant Parties;
b)Any act, error,omission, or negligence of Tenant Parties or of any invitee,guest, or licensee
of Tenant in, on, or about the Real Property;
c)TenanYs conducting of its business;
d)Any Alterations, activities, work, or things done, omitted, permitted, allowed, or suffered by
Tenant Parties in,at,or about the Premises or the Carriage House or the Royer Building, including
the uiolation of or failure to comply with any applicable laws, statutes, ordinances, standards,
rules, regulations,orders,decrees,or judgments in existence on the Lease Commencement Date
or enacted, promulgated, or issued after the date of this Lease; and
e) Any breach or default in performance of any obligation on Tenant's part to be performed
under this Lease, including obligations which survive expiration or earlier termination of this Lease
under the terms of this Lease.
14.3.2. Definition of Claims. For purposes of this Lease, Claims (herein referred to as the
Claims") means any and all claims, losses, costs, damage, expenses, liabilities, liens, actions,
causes of action (whether in tort or contract, law or equity, or otherwise), charges, assessments,
fines, and penalties of any kind (including consultant and expert expenses, court costs, and
attorney fees actually incurred).
14.3.3. Tvpe of Iniury or Loss. This indemnification extends to and includes Claims for:
a) Injury to any persons(including death at any time resulting from that injury);
b) Loss Qf, injury or damage to, or destruction of property (including all loss of use resulting
from that loss, injury, damage, or destruction); and
c)All economic losses and consequential or resulting damage of any kind.
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14.3.4. Active or Passive Neqligence; Strict Liabilitv. Except as provided in this subsection
14.3.4, the indemnification in subsection 14.3.1 shall apply regardless of the active or passive
negligence of Landlord Parties and regardless of whether liability without fault or strict liability is
imposed or sought to be imposed on Landlord Parties. The indemnification in subsection 14.3.1
shall not apply to the extent that a final judgment of a court of competent jurisdiction establishes
that a Claim against one Landlord Party was proximately caused by the willful misconduct of that
Landlord Rarly. In that event, however, this indemnification shall remain valid for all other
Landlord Parties.
14.3.5. Indemnification Independent of Insurance Obliqations. The indemnification provided in
this Article 14 may not be construed or interpreted as in any way restricting, limiting, or modifying
Tenant's insurance or other obligations under this Lease and is independent of Tenant's
insurance and other obligations. Tenant's compliance with the insurance requirements and other
abligations under this Lease shall not in any way restrict, limit, r mQdify Tenant's indemnification
obligations under this Lease.
14.3.6. Attornev Fees. The prevailing party shall be entitled to recover its actual attorney fees
and court costs incurred in enforcing the indemnification clauses set forth in this Section 14.3.
14.3.7.Survival of Indemnification. The clauses of this Section 14.3 shall survive the expiration
or earlier terminatian of this Lease until all claims against Landlord Parties involving any of the
indemnified matters are fully, finally, and absolutely barred by the applicable statutes of
limitations.
14.3.8. Dutv to Defend. Tenant's duty to defend Landlord Parties is separate and independent
of Tenant's duty to indemnify Landlord Parties. The duty to defend includes claims for which
Landlord Partiesmay be liable withoutfault or strictly liable. The dutyto defend applies regardless
of whether the issues of negligence, liability,fault,default,or other obligation on the part of Tenant
Parties have been determined. The duty to defend applies immediately, regardless of whether
Landlord Parties have paid any sums or incurred any detriment arising out of or relating (directly
or indirectly) to any Claims. It is the express intention of the parties that Landlord Parties be
entitled to ohtain summary adjudication or summary judgment regarding Tenant's duty to defend
Landlord Parties at any stage of any claim or suit within the scope of this Section 14.3.
14.4. Compliance with Insurer Reauirements. Tenant shall, at Tenant's sole expense, comply
v rith all requirements, guidelines, rules, orders, and similar mandates and directives pertaining tn
the use of the Premises and the Carriage House or the Royer Building, whether imposed by
Tenant's insurers, landlord's insUrers, or both. If Tenant's business operations, conduct, or use
Qf the Premises or the Carriage House or the Royer 6uilding cause any increase in the premium
for any insurance policies carried by Landlord, Tenant shall, within ten (10) business days after
receipt of written notice from Landlord, reimburse Landlord for the increase. Tenant shall, at
Tenant's sole expense,comply vuith all rules,orders, regulations, or requirements of the American
Insurance Association (formerly the National Board of Fire Underwriters)and of any similar body.
14.5. TenanYs Liability Coveraae. Tenant shall, at Tenant's sole expense, maintain the
coverages set forth in this section 14.5.
14.5.1. Commercial General Liabilitv Insurance. Tenant shall obtain commercial general
liability insurance written on an"occurrence"policy form,covering bodily injury, property damage,
and personal and advertising injury arising out of or relating (directly or indirectly) to Tenant's
22
business operations, conduct, assumed liabilities, or use or occupancy of the Premises or the
Carriage House or the Royer Building.
14.5.2. Broad Fortn Coveraqe. TenanYs liability coverage shall include all the coverages
typically provided by the Broad Form Comprehensive General Liability Endorsement, including
broad form property damage coverage (which shall include coverage for completed operations).
TenanYs liability coverage shall further include premises-operations coverage, products-
completed operations coverage, owners and contractors protective coverage (when reasonably
required by Landlord), and the broadest available form of contractual liability coverage. It is the
parties'intent that Tenant's contractual liability coverage provide coverage to the maximum extent
possible of Tenant's indemnification obligations under this Lease.
14.5.3. Primary Insured. Tenant shall be the first or primary named insured.
14.5.4. Additional Insureds. Landlord Parties shall be named by endorsement as additional
named insureds under Tenant's general liability coverage. The additional insured endorsement
must be on a form reasonably acceptable to Landlord, with such modifications as Landlord may
require.
14.5.5. Cross-Liabilitv; Severabilitv of Interests. Tenant's general liability policies shall be
endorsed as needed to provide cross-liability coverage for Tenant and Landlord, and to provide
severability of interests.
14.5.6. Prima_ry Insurance Endorsements for Additional Insureds. Tenant's general liability
policies shall be endorsed as needed to provide that the insurance afforded by those policies to
the additional insureds is primary and that all insurance carried by Landlord Parties is strictly
excess and secondary and shall not contribute with TenanYs liability insurance.
14.5.7. Scope of Coveraqe for Additional lnsureds. The coverage afforded to Landlord and
any lender of Landlord must be at least as broad as that afforded to Tenant and may not contain
any terms, conditions, exclusions, or limitations applicable to Landlord or any lender of Landlord
that do not apply to Tenant.
14.5.8. Delivery of Certificate, Policv, and Endorsements. Before the Lease Commencement
Date, Tenant shall deliver to Landlord the endorsements referred to in this Section 14.5 as well
as a certified copy of Tenant's liability policy or policies and an original certificate of insurance,
executed by an authorized agent of the insurer or insurers,evidencing compliance with the liability
insurance requirements. The certificate shall provide for no less than thirty (30) days' advance
written notice to Landlord from the insurer or insurers of any cancellation, nonrenewal, or material
change in coverage or available limits of liability and shall confirm compliance with the liability
insurance requirements in this Lease, except in the event of non-payment of premium, in which
case ten (10) days prior written notice will be acceptable.
The"endeavor to" and "failure to mail such notice shall impose no obligation or liability of any
kind upon the Company"language and any similar language shall be stricken from the certificate.
14.5.9. Concurrency of Primarv, Excess, and Umbrella Policies. Tenant's liability insurance
caverage may be provided by a combination of primary, excess, and umbrella policies, but those
policies must be absolutely concurrent in all respects regarding the coverage afforded by the
policies. The coverage of any excess or umbrella policy must be at least as broad as the coverage
of the primary policy.
23
L4.5.1Q. Liabilitv Limits. The minimum acceptable limits of liability for Tenant's liability
insurance are set forth in the Summary.
14.5.11. flntentionallv omitted.l
14.5.12. Survival of Insurance Requirements. Tenant shall,at Tenant's sole expense, maintain
in full force and effect the liability insurance coverages required under this Lease and shall
maintain Landlord Parties as additional insureds, as required by subsection 14.5.4 of this Lease,
for a period of no less than one(1)year after expiration or earlier termination of this Lease.
14.6.Tenant's Workers'Compensation and Emplover Liabilitv Coveraqe. Tenant shall procure
and maintain workers' compensation insurance as required by law and employer's liability
insurance with limits of no less than $1,000,000.
14.7. Tenant's First Parfii Insurance. Tenant shall, at Tenant's sole expense, procure and
maintain the first party insurance coverages described in this Section 14.7.
14.7.1. Tenant's Proaertv Insurance. Tenant shall procure and maintain property insurance
coverage for:
a) All office furniture, trade fixtures, office equipment, merchandise, and all other items of
TenanYs property in, on, at, or about the Premises and the Carriage House, including property
installed by, for, or at the expense of Tenant; and
b)All other improvements, betterments, Alterations, and additions to the Premises.
Tenant's property insurance must fulfill the following requirements:
a) lt must be vuritten on the broaclest available"all-risk" (special-causes-of-loss)policy form or
an equivalent form acceptable to Landlord;
b) It must include earthquake as a covered cause of loss;
c) It must include an agreed-amount endorsement for no less than one hundred percent
10.Q%)of the full replacement cost(new without deduction for depreciation)of the covered items
and property; and
d)The amounts of coverage must meet any coinsurance requirements of the policy or policies.
It is the parties' intent that Tenant shall structure its property insurance program so that no co-
insurance penalty shall be imposed and there shall be no valuation shortfalls or disputes with any
insurer or with Landlord. The property insurance coverage shall include vandalism and malicious
mischief coverage, sprinkler leakage coverage, and earthquake sprinkler leakage coverage.
14.7. Other Tenant Insurance CoveraQe. Tenant shall, at TenanYs sole expense, procure and
maintain any other and #urther insurance coverages that Landlord or Landlord's lender may
require.
14.8. Form of Policies and Additional Requirements.
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14.8.1. Insurance Independent of Exculpation and Indemnification. The insurance
requirements set forth in Sections 14.4-14.9 are independent of Tenant's exculpation,
indemnification, and other obligations under this Lease and shall not be construed or interpreted
in any way to restrict, limit, or modify TenanYs exculpation, indemnification, and other obligations
or to limit Tenant's liability under this Lease.
14.8.2. Form of Policies. In addition tn the requirements set forth in subsection 14.5.8, the
insurance required of Tenant under this Article 14 must:
a) Narr e Landlord and any other party Landlord specifies by endorsement as an additional
insured;
b)Be issued by an insurance company with a rating of no less than A-VIII in the current Best's
Insurance Guide, or that is otherwise acceptable to Landlord, and admitted to engage in the
business of insurance in the State of California;
c) Be primary insurance for all claims under it and provide that any insurance carried by
Landlord Parties and Landlord lenders is strictly excess,secondary, and noncontributing with any
insurance carried by Tenant; and
d)Provide that insurance may not be canceled,non-renewed,or the subject of material change
in coverage or available limits of coverage, except on thirty (30) days' prior written notice to
Landlord and Landlord's lenders.
14.8.3. Tenant's Delivery of Policv, Endorsements, and Certificates. Tenant shall deliver the
policy or policies, along with any endorsements to them and certificates required by this P rticle
14, to Landlord:
a) On or before the Lease Commencement Date;
b)At least thirty(30)days before the expiration date of any policy; and
c) On renewal of any policy.
14.8.4. Deductibles and Self-Insured Retentions. All deductibles and self-insured retentions
under Tenant's policies are subject to Landlord's prior written approval.
14.9. Mutual Waiver of Subroqation. Notwithstanding anything to the contrary in this Lease,
Tenant waives and releases any and all right of recovery, whether arising in contract or tort,
against Landlord, and Landlord waives and releases any and all right of reoovery,whether arising
in contract or tort, against Tenant,for any and all (i)loss or damage to any property located within
or constituting a part of the Carriage House or the Royer Building, which loss or damage arises
from the perils that could be insured against under the ISQ Causes of Loss-Special Form
Coverage, including any deductible(whether or not the party suffering the loss or damage actually
carries such insurance,recovers under such insurance,or self-insures the loss or damage)and/or
ii) loss of eamings or rents resulting from any such perils. This waiver shall be in addition to any
other waiver or release contained in this Lease, and Landlord and Tenant shall have their
applicable insurance policies issued in such form as to waive any right of subrogation that might
otherwise exist.
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A tiele 15
DAMAGE AND DESTRUCTION
15.1. Repair of Damaqe bv Landlord. Tenant agrees to notify Landlord in writing promptly of
any damage#o the Premises resulting from fire, earthquake, or any other identifiable event of a
sudden, unexpected, or unusual nature (herein referred to as a "Casualty"). If the Premises are
damaged by a Casualty or any common areas of the Carriage House providing access to the
Premises are damaged to the extent that Tenant does not have reasonable access to the
Premises and if neither Landlord nor Tenant has elected to terminate this Lease under section
15.3 or 15.4, Landlord shall promptly and diligently restore such common areas, the Carriage
House, and the tenant improvements originally constructed by Landlord to substantially the same
condition as existed before the Casualty, except for modifications required by building codes and
other laws and except for any other modifications to the common areas considered desirable by
Landlard. In making these modifications, Landlord shall not materially impair Tenant's access to
the Premises. Landlord's obligation to restore is subject to reasonable delays for insurance
adjustment and other matters beyond Landlord's reasonable control and subject to the other
clauses of this Article 15. If Tenant requests that Landlord modify the tenant improvements in
connection with the rebuilding, Landlord may condition its consent to those modifications on:
a) Tenant's payment to Landlord before construction is begun of any sums in excess of the
amount of insurance proceeds received by Landlord that are needed to complete the tenant
improvements; and
b) Confirmation by Landlord's architect or contractor that the modifications will not increase
the scope of work or the time necessary to complete the tenant improvements.
15.2. Repair Period Notice. Landlord shall, within the later of(a) sixty(60)days after the date
on which Landlord determines the full extent of the damage caused by the Casualty or(b) thirty
30) days after Landlord has determined the extent of the insurance proceeds available to
effectuate repairs, provide written notice to Tenant indicating the anticipated period for repairing
the Casualty (herein referred to as the "Repair Period Notice"). The Repair Period Notice shall
also state,if applicable, Landlord's election either to repair or to terminate the Lease under Section
15.3.
15.3. Landlord's Oation to Terminate or Repair. Landlord may elect either to terminate this
Lease or to effectuate repairs if:
a)The Repair Period Notice estimates that the period for repairing the Casualty exceeds two
hundred seventy(270)days from the date of the commencement of the repair;
b)The estimated repair cost exceeds the insurance proceeds, if any, available for such repair
not including the deductible, if any, on Landlord's property insurance), plus any amount that
Tenant is obligated or elects to pay for such repair;
c)The estimated repair cost of the Premises or the Carriage House, even though covered by
insurance, exceeds fifty percent(50%) of the full replacement cost; or
d) The Carriage House cannot be restored except in a substantially different structural or
architectural form than existed before the Casualty.
Landlord's election shall be stated in the Repair Period Notice.
26
15.4.Tenant's Option to Terminate. If the Repair Period Notice provided by Landlord indicates
that the anticipated period for repairing the Casualty exceeds two hundred seventy (270) days
from the date of commencement of the repairs, Tenant may elect to terminate this Lease by
providing written notice(herein referred to as the"Tenant's Termination Notice")to Landlord within
ten (10) days after receiving the Repair Period Notice, provided that Tenant is not then in default
under this Lease. If Tenant does not elect to terminate within this ten-day(10-day)period,Tenant
shall be considered to have waived the option to terminate.
15.5. Rent Abatement Due to Casualtv. Landlord and Tenant agree that, if the Casualty was
not the result of the negligence or willful misconduct of Tenant or TenanYs employees,
contractors, licensees, or invitees, and provided that Tenant is not then in default under this
Lease, Tenant shall be provided with a proportionate abatement of Rent based on the Rentable
Square Footage of the Premises rendered unusable (due to physical damage to the Premises or
Base Systems or the unavailability of access to the Premises) and not used by Tenant. That
proportional abatement, if any, shall be provided during the period beginning on the later of(a)
the date of the Casualty or (b) the date on which Tenant ceases to occupy the Premises and
ending on the date of Substantial Completion of Landlord's restoration obligations as provided in
this Article 15. Subject to Section 15.4, the Rent abatement provided in this Section 15.5 is
Tenant's sole remedy due to the occurrence of the Casualty. Landlord shall not be liable to Tenant
or any other person or entity for any direct, indirect, or consequential damage (including but not
limited to lost profits of Tenant or loss of or interFerence with TenanYs business), whether or not
caused by the negligence of Landlord or Landlord's employees, contractors, licensees, or
invitees, due to, arising out of, or as a result of the Casualty (including but not limited to the
termination of the Lease in connection with the Casualty).
15.6. Damaqe Near End of Term. Nofinrithstanding any other provision of this Article 15, if the
Premises or the Carriage House is destroyed or damaged by a Casualty during the last finrelve
12) months of the Lease Term, Landlord shall have the option to terminate this Lease by giving
written notice to Tenant of the exercise of that option within thirty (30) days after the damage or
destruction.
15.7. EfFective Date of Termination; Rent Apportionment. If Landlord or Tenant elects to
terminate this Lease under this Article 15 in connection with a Casualty, the termination shall be
effective thirty(30)days after delivery of notice of such election. Tenant shall pay Rent, properly
apportioned up to the date of the Casualty. After the effective date of the termination, Landlord
and Tenant shall be discharged of all future obligations under this Lease, except for those
provisions that, by their terms, survive the expiration or earlier termination of this Lease.
15.8.Waiver of Statutory Provisions. The provisions of this Lease, including those in this Article
15, constitute an express agreement befinreen Landlord and Tenant that applies in the event of
any Casualty to the Premises,the Building, or the Real Property. Tenant, therefore, fully waives
the provisions of any statute or regulation, including California Civil Code sections 1932(2) and
1933(4), or any successor statute, relating to any rights or obligations concerning a Casualty.
Article 16
CONDEMNATION
16.1. Definition of"Condemnation". As used in this Lease, the term "Condemnation" (herein
referred to as Condemnation") means a permanent taking through (a) the exercise of any
government power (by legal proceedings or otherwise) by any public or quasi-public authority
27
excluding Landlord) having the right of eminent domain (herein referred to as the"Condemnor")
or(b)a voluntary sale or transfer by Landlord to any Condemnor, either under threat of exercise
of eminent domain by a Condemnor or while legal proceedings for eminent domain are pending.
16.2. Effect on Riqhts and Obliqations. If, during the Lease Term or the period between the
date of execution of this Lease and the date on which the Lease Term begins, there is any
Condemnation of all or part of the Premises, the Building, or the.Real Property on which the
Premises and Building are constructed, the rights and obligations of the parties shall be
determined under this Article 16, and Rent shall not be affected or abated except as expressly
provided in this Article. Landlord shall notify Tenant in writing of any Condemnation within thirty
30) days after the later of(a)the filing of a complaint by Condemnor or(b)the final agreement
and determination by Landlord and Gondemnor of the extent of the taking (herein referred to as
the"Condemnation Notics").
16.3. Termination of Lease.
16.3.1. Definition of "Termination Date". The Termination Date (herein referred to as the
Termination Date")shall be the ea liest of:
a) The date on which Condemnor takes possession of the property that is subject to the
Condemnation;
b)The date on which title to the property subject to the Condemnation is vested in Condemnor;
c) If Landlord has elected to terminate, the date on which Landlord requires possession of the
property in connection with the Gondemnation, as specified in vuritten notice delivered to Tenant
no less than thirty(30)days before that date; or
d) If Tenant has elected to terminate, thirty(30) days after Landlord's receipt of written notice
of termination from Tenant.
If both Landlord and Tenant have elected to terminate under this Article 16, the Termination
Date shall be the earliest of the dates described in subparagraphs (a)-(d).
16.3.2. Automatic Termination. If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the Termination Date, and the Condemnation Award shall be allocated
between Landlord and Tenant in accordance with Section 16.5.
16.3.. Landlord's Riqht to Terminate. Landlord shall have the option to terminate this Lease
if:
a)Ten percent(1%)or more of the Rentable Square Feet of the Building or the Premises is
taken through Condemnation;
b)Any portion of the Building or Real Property necessary for Landlord to operate the Building
efficiently is taken through Condemnation; or
c)Any other areas providing access to the Rremises or the Carriage Mouse are taken through
Condemnation.
28
To elect to terminate the Lease under this subsection 16.3.3, Landlord must provide written
natice of its election (herein.referred to as the"Landlord's Taking Termination Notice")to Tenant
within thirty (30) days after the later of(a) the filing of a complaint by Condemnor or (b) service
upon Landlord of a complaint by Condemn or (c) the final agreement and determination by
Landlord and Condemnor of the extent of the taking. In that event,this Lease shall be terminated
on the Termination Date, and all Rent shall be prorated to that date. If Landlord does not elect to
terminate under this subsection 16.3.3, Landlord shall, subject to subsection 16.3.4, be obligated
to the extent of severance damages received by Landlord to reasonably restore (to the extent
feasible) the Premises or access to the Premises, subject to Landlord's obtaining all necessary
approvals, permits, and authorizations relating to such work.
16.3.4. TenanYs Ripht to Terminate.
16.3.4.1. Grounds; Termination Notice. Tenant shall have the option to terminate this Lease
by praviding thirty (30) days' written notice to Landlord if one or both of the following are taken
through Condemnation:
a)Twenty-five percent (25%)or more of the Usable Square Feet of the Premises; or
b)Any portion of the Carriage House that provides Tenant with its access to the Premises and
that, if taken,would eliminate Tenant's access to the Premises.
Tenant's notice must be given within thirty(30)days after Tenant's receipt of the Condemnation
Notice required by Section 16.2.
16.3.4.2. Landlord's Restoration Notice. Despite Tenant's termination right, this Lease shall
continue in full force and effect if Landlord gives Tenant written notice (herein referred to as the
Restoratinn Notice")within thirty(30) days after the date on which the nature and extent of the
Condemnation are finally determined, stating that:
a) Landlord shall, at Landlord's sole expense, reconfigure the remaining Premises or provide
alternative, reasonable access to Tenant so that the area of the Premises shall be substantially
the same after the Condemnation and Tenant shall have reasonable access to the Premises after
the Condemnation;
b) Landlord shall begin the restoration as soon as reasonably practicable; and
c) Landlord has reasonably determined that such restoration can be completed within ninety
90)days after the date of the notice.
16.3.5. Tenant's Waiver. Tenant agrees that its rights to terminate this Lease due to partial
Condemnation are govemed by this P rticle 16. Tenant waives all rights it may have under
California Code of Civil Procedure section 1265.130, or otherwise, to terminate this Lease based
on a partial Condemnation.
16.3.6. Proration of Rent. If this Lease is terminated under this Article 16,the termination shall
be effective on the Termination Date, and Landlord shall prorate Rent to that date. Tenant shall
be abligated to pay Rent for the period up to, but not including,the Termination Date as prorated
by Landlord. Landlord shall return to Tenant prepaid Rent allocable to any period on or after the
Termination Date.
29
16.4. Effect of Condemnation if Lease Is Not Terminated. If any part of the Premises is taken
b.y Candemnation and this Lease is not terminated, Rent shall be propQrtio ately reduced based
on the Rentable Square Footage of the Premises taken. Landlord and Tenant agree to enter into
an amendment to this Lease within thirty(30)days after the partial taking,confirming the reduction
in Rentable Square Footage of the Premises and the reduction in Rent. If Landlord gives Tenant
a timely Restoration Notice under subsection 16.3.4.2, this Lease shall continue in full force and
effect without any reduction of Rent (unless the Premises, as restored, are smaller than the
existing Premises, in which case Rent shall be proportionately reduced based on the reduced
Rentable Square Footage), except that Rent shall be abated for the portion of the Premises not
usable by Tenant until Landlord completes the restoration as provided in the Restoration Notice.
16.5. Allocation of Award.
16.5.1. La dlord's iqht to Award. €xcept as provided in subsection 16.5. in connection with
a Condemnation:
a) Landlord shall be entitled to receive all compensation and anything of value awarded, paid,
or received in settlement or otherwise (herein referred to as the "Award"); and
b)Tenant irrevocably assigns and transfers to Landlord all rights to and interests in the Award
and fully waives, releases, and relinquishes any claim to, right ta make a claim on, or interest in
the Award, including any amount attributable to any excess of the market value of the Premises
for the remainder of the Lease Term over the present value as of the Termination Date of the
Rent payable for the remainder Qf the Term (cQmmonly referred to as the "bonus value" of the
Lease).
16.5.2. Tenant's Riqht to Compensation. Despite subsection 16.5.1, Tenant shall have the
right to make a separate claim in the Condemnation proceeding, as long as the Award payable to
Landlord is not reduced thereby,for:
a) The taking of the unamortized or un-depreciated value of any leasehold improvements
owned by Tenant that T nant has th right to r mov at th€ nd of the L a Term and that
Tenant elects not to remove;
b) Reasonable removal and relocation costs for any leasehold improvements that Tenant has
the right to remove and elects to remove (if Condemnor approves of the removal); and
c) Relocation costs under Govemment Code section 7262, the claim for which Tenant may
pursue by separate action independent of this Lease.
16.6. Temporary Takina. If a temporary taking of part of the Premises occurs through (a)the
exercise of any govemment power(by legal proceedings or otherwise) by Condemnor or (b) a
voluntary lease, license,or transfer by Landlord to any Condemnor,either under threat of exercise
of eminent domain by a Condemnor or while legal proceedings for condemnation are pending,
Rent shall abate during the time of such#aking in proportion to the poction of the Premises taken
or not reasonably usable as a result. The entire Award relating to the temporary taking shall be
and remain the property of Landlord. Tenant irrevocably assigns and transfers to Landlord all
rights to and interest in the Award and fully releases and relinquishes any claim to, right to make
a claim on, and any other interest in the Award.
30
A iele 17
ASSIGNMENT AND SUBLEASING
17.1. Restricted Transfers.
17.1.1. Consent Reauired; Definition of Transfer. Tenant shall obtain Landlord's written
consent, before entering into or permitting any Transfer. A "Transfer" (herein referred to as a
Transfe")cansists of any of the following,whether voluntary or involuntary and whether effected
by death, operation of law, or otherwise:
a) Any assignment, mortgage, pledg, encumbranc, or other transfer of any intgrest in this
Lease;
b)Any sublease or occupancy of any portion of the Premises by any persons other than Tenant
and its employees; and
e)Any of the changes(e.g., a change of ownership or reorganization)included in the definition
of Transfer in section 17.7.
Any person to whom any Transfer is made or sought to be made is a Transferee."
17.1.2. Landlord's Remedies. If a Transfer fails to comply with this Article 17, Landlord may,
at its sole option, do any or all of the following: (a) void the Transfer and continue the Lease in
effect; (b) declare Tenant in material and incurable default under Section 22.1, notwithstanding
any cure period specified in Section 22.1; or(c) ratify the Transfer.
17.2. Transfer Procedure.
17.2.1.Transfer iVotice. Before entering into or permitting any transfer,Tenant shall provide to
Landlord a written Transfer Notice (herein referred to as a "Transfer Notice") at least fortyfive
45) days before the proposed effective date of the Transfer. The Transfer Notice shall include
all of the following:
a) Information regarding the proposed Transferee, including the name, address, and
ovirnership of Transferee; the nature of Transferee's business; and Transferee's current financial
statements (certified by an officer, a partner, or an owner of Transferee), bank account
statements, and tax retums;
b)All the terms of the proposed Transfer, including the consideration payable by Transferee;
the portion of the Premises that is subject to the Transfer (herein referred to as the "Subject
Space"); a general description nf any ptanned alterations or improvements to the Subject Space;
the proposed use of the Subject Space; the effective date of the Transfer; a calculation of the
Transfer Premium" (as defined in subsection 17.4.2) payable in connection with the Transfer;
and a copy of all documentation concerning the proposed Transfer;
c)Any other information or documentation reasonably requested by Landlord; and
d)An executed estoppel certificate from Tenant under Section 20.1.
17.2.2. Limits of Consent. If Landlord consents to any Transfer and does not exercise its rights.
under Section 17.5, the following limits apply:
31
a) Landlord does not agree to waive or modify the terms and conditions of this Lease.
b) Landlord does not consent to any further Transfer by either Tenant or Transferee.
c)Tenant remains liable under this Lease.
d)Tenant may enter into that Transfer in accordance with this Article 17 if:
1)The Transfer occurs within six(6) months after Landlord's consent;
2) The Transfer is on substantially the same terms as specified in the Transfer Notice;
and
3)Tenant delivers to Landlord, promptly after execution, an original, executed copy of all
documentation pertaining to the Transfer in a form reasonably acceptable to Landlord (including
Transferee's agreement to be subject and subordinate to the Lease and to assume Tenant's
obligations under the Lease to the extent applicable to the Subject Space).
e) If the Transfer occurs after six (6) months or the terms of the Transfer have materially
changed from those in the Transfer Notice, Tenant shall submit a new Transfer Notice under
subsection 17.2.1, requesting Landlord's consent, and the Subject Space shall again be subject
to Landlord's rights, if any, under Section 17.5. A material change is one of the terms of which
would have entitled Landlord to refuse to consent to the Transfer initially or would cause the
proposed Transfer to be more favorable to Transferee than the terms in the original Transfer
Notice.
17.3. Landlord's Consent.
17.3.1. Reasonable Consent. Landlord may not unreasonably withhold its consent to any
proposed Transfer that complies with this Article 17. Reasonable grounds for denying consent
include any of the following:
a) Transferee's character, reputation, credit history, business, or proposed use is not
consistent with the character or quality of the Building;
b) Transferee's intended use of the Premises is inconsistent with the Permitted Use or will
materially and adversely affect Landlord's interest;
c)Transferee's financial condition is or may be inadequate to support the Lease obligations of
Transferee under the Transfer documents;
d)The Transfer would cause Landlord to violate another lease or agreement to which Landlord
is a party or would give a Building tenant the right to cancel its lease;
e) Transferee occupies space in the Building and such space is not contiguous to the
Premises, is negotiating with' Landlord to lease space in the Building, or has negotiated with
Landlord during the six(6)months immediately preceding the Transfer Notice;
17.3.2. Landlord's Written Response. Within a reasonable time after receipt of a Transfer
Notice that cQmplies with subsection 17.2.1, Landlord shall approve or disapprnve the proposed
Transfer in writing.
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17.3.3. Tenant's Remedies. If Landlord wrongfully denies or conditions its consent, Tenant
may seek only dealaratory and injunctive relief. Tenant specifically waives any damage claims
against Landlord in connection with the withholding of consent.
17.3.4. Tenant's Indemnitv. Tenant shall indemnify, defend, and hold harmless Landlord from
and against all Claims by any third party (including the proposed ransferee) arising out of or
relating (directly or indirectly)to a proposed Transfer.
17.4.Transfer Premium.
17.4.1. Transfer Premium Pavment. As a reasonable condition to Landlord's consent to any
Transfer,Tenant shall pay to Landlord fifty percent(50%)of any Transfer Premium, as defined ir
subsection 17.4.2.
17.4.2. Definition of Transfer Premium. "Transfer Premium"(herein referred to as the"Transfer
Premium")means all base rent, additional rent, and other consideration payable by Transferee to
Tenant(herein referred to as the"Transferee RenY'), after deducting the Rent payable by Tenant
under this Lease (excluding the Transfer Premium)#or the Subject Space (herein referred to as
the "Tenant Rent").
17.4.. Monthly Payment of Transfer Premium; Calculation. Tenant shall pay the Transfer
Premium on a monthly basis, together with its payment of Additional Rent under Article 5.
17.4.4. Audit of Transfer Premium. On Landlord's request, Tenant shall furnish a complete
statement, certified by an independent certified public accountant or Tenant's chief financial
officer, describing in detail the computation of any Transfer Premium that Tenant has derived or
will derive from the Transfer. If Landlord's independent certified public accountant finds that the
Transfer Premium for any Transfer has been understated, Tenant shall, within thirty (30) days
after demand, pay the deficiency and Landlord's costs of that audit. If Tenant has understated
the Transfer Premium by more than ten percent(10%), Landlord may,at its option,declare Tenant
in material and incurable default under Section 22.1, notv,ithstanding any cure period specified in
Section 22.1.
17.5. Landlord's Option to Recapture Space.
17.5.1. Landlord's Recapture RiQht. Despite any other provision of this Article 17, Landlord
has the option, by written notice to Tenant (herein referred to as the "Recapture Notice") within
thirty(30)days after receiving any Transfer-Notice,#o reeap#ure the Subject Space by terminating
this Lease for the Subject Space or taking an assignment or a sublease of the Subject Space
from Tenant. A timely Recapture Notice terminates this Lease or creates an assignment or a
sublease for the Subject Space for the same term as the proposed Transfer, effective as of the
date specified in the Transfer Notice. If Landlord declines or fails timely to deliver a Recapture
Notice, Landlord shall have no further right under this Section 17.5 to the Subject Space unless it
becomes available again after Transfer by Tenant.
17.5.2. Consequences of Recapture. To determine the new Base Rent under this Lease if
Landlord recaptures the Subject Space,the original Base Rent under the Lease shall be multiplied
by a fraction, the numerator of which is the Rentable Square Feet of the Premises retained by
Tenant after Landlord's recapture and the denominator of which is the total Rentable Square Feet
of the Premises before Landlord's recapture. The Additional Rent,to the extent that it is calculated
33
on the basis of the Rentable Square Feet within the Premises,shall be reduced to reflect TenanYs
proportionate share based on the Rentable Square Feet of the Premises retained by Tenant after
Landlord's recapture. This Lease as so amended shall continue thereafter in full force and effect.
Either party may require written confirmation of the amendments to this Lease necessitated by
Landlord's recapture of the Subject Space. If Landlord recaptures the Subject Space, Landlord
shall, at Landlord's sole expense, construct any partitions required to segregate the Subject
Space from the remaining Premises retained by Tenant. Tenant shall, however, pay for painting,
covering, or otherwise decorating the surfaces of the partitions facing the remaining Premises
retained by Tenant.
17.6. Riqht to Collect Rent. If this Lease is assigned, Landlord may collect Rent directly from
Transferee. If all or part of the Premises is subleased and Tenant defaults, Landlord may collect
Rent directly from Transferee. Landlord may then apply the amount collected from Transferee to
Tenant's monetary obligations under this Lease. Collecting Rent from a Transferee or applying
that Rent to Tenant's monetary obligations does not waive any provisions of this Article 17.
Collection of Rent pursuant to this Article 17 shall not be deemed a recognition by Landlord of the
Transfer or Transferee's tenancy.
17.7.Transfers of Ownership Interests and Other Oraanizational Chanaes.
17.7.1. flntentionallv omitted.]
17.7.2. Transfer to Affiliate. Despite any other provision of this Lease, Landlord's consent is
not required for any Transfer to an "A#filiate" (as defined in subsection 17.7:3) as long as the
following conditions are met:
a)At least ten (10) business days before.the Transfer, Landlord receives written notice of the
Transfer (as well as any documents or information reasonably requested by Landlord.regarding
the Transfer or Transferee);
b)The Transfer is not a subterfuge by Tenant to avoid its obligations under the Lease;
c) If the Transfer is an assignment, Transferee assumes in writing all of Tenant's obligations
under this Lease relating to the Subject Space; and
d) Transferee has a tangible net worth, as evidenced by financial statements delivered to
Landlord and certified by an independent certified public accountant in accordance with generally
accepted accounting principles that are consistently applied (herein refeRed to as "Net Worth"},
at least equal to Tenant's Net Worth either immediately before the Transfer or as of the date of
this Lease, whichever is greater.
17.7.3. Definition of "Affiliate". An °Affiliate" (herein referred to as an "Affiliate") means any
entity that controls, is controlled by, or is under common control with Tenant. "Control" (herein
referred to as °Gontrol") means the direct or indirect ownership of rr ore than fifty pereent (50%).
of the voting securities of an entity or possession of the right to vote more than fifty percent(50%)
of the voting interest in the ordinary direction of the entity's affairs.
17.8. Restrictions on Marketinq the Space. Tenant may not enter into any listing agreement
for marketing the Subject Space other than through the exclusive leasing agent designated by
Landlord for the Building. Tenant may not promote or advertise the availability of the Subject
34
Space unless Landlord has approved Tenant's advertising or promotional materials in writing.
Tenant may not market the Subject Space at a rate less than the Quoted Rent.
Article 18
SURRENDER OF PREMISES
18.1. Surrender of Premises. No act of Landlord or its authorized representatives shall
constitute Landlord's acceptance of a surrender or abandonment of the Premises by Tenant
unless that intent is specifically acknowledged in a writing signed by both parties. At the option
of Landlord, a surrender and termination of this Lease shall operate as an assignment to Landlord
of all subleases or sub-tenancies. Landlord shall exercise this option by giving notice of that
assignment to all subtenants within ten (10) days after the effective date of the surrender and
termination.
18.2. Removal of Tenant Propertv bv Tenant. On the expiration or earlier termination of the
Lease Term,Tenant shall quit the Premises and surrender possession to Landlord in accordance
with this Section 18.2. Tenant shall leave the Premises in good order and condition, exeept for
reasonable wear and tear, acts of God, casualties,condemnation, and repairs that are specifically
made the respon ibility of Landlord. On expiration or termination, Tenant shall, without expense
to Landlord, remove or cause to be removed from the Premises:
a)All debris and rubbish;
b)Any items of furniture, equipment,free-standing cabinet work,and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the Premises;
c)Any similar articles of any ather persons claiming under Tenant that Landlord, in Landlord's
sole discretion, requires to be removed; and
d)Any alterations and improvements that Tenant is required to remove under Article 12.
Tenant shall, at TenanYs sole expense, repair all damage or injury that may occur to the
P ernises or the Carriage Hause caused by Tenant's removal.of those items and shall restore the
Premises and the Carriage House to their original condition.
Article 19
HOLDING OVER
19.1. Holdover Rent. If Tenant remains in possession of the Premises after expiration or earlier
termination of this Lease with Landlord's express written consent,Tenant's occupancy shall be a
month-to-month tenancy at a rent agreed on by Landlord and Tenant but in no event less than
the Base Rent and Additional Rent payable under this Lease during the last full month before the
date of expiration or earlier termination of this Lease. The month-to-month tenancy shall be on
the terms and conditions of this Lease except as provided in the preceding sentence. Landlord's
acceptance of rent after such holding over with Landlord's written consent shall not result in any
other tenancy or in a renewal of the original term of this Lease: If Tenant remains in possession
of the Premises after expiration or earlier termination of this Lease without Landlord's consent,
Tenant's continued possession shall be on the basis of a tenancy at sufferance and Tenant shall
pay as rent during the holdover period an amount equal to the greater of:
35
1) One hundred fifty percent(150%) of the Fair Market Rental Fair Market Rental Value
of the Premises (as reasonably determined by Landlord); or
2) Two hundred percent (200%0) o#the Base Rent payable under this Lease for the last
full month before the date of expiration or termination.
19.2. No Consent or Waiver Implied. Nothing in this Article 19 shall be construed as implied
consent by Landlord to any holding over by Tenant. Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided in this Lease on
expiration or other termination of this Lease. The provisions of this Article 19 shall not be
considered to limit or constitute a waiver of any other rights or remedies of Landlord provided in
this Lease or at law.
Article 20
ESTOPPEL CERTIFICATES
20.1. Tenant's Obliqation to Provide Estoppel Certificates. Within ten (10)days after a written
request by Landlord, Tenar t shall execute and deliver to Landlord an estoppel certificatestatjng
such information as may be customary or may be reasonably required by Landlord or any existing
or prospective lender, mortgagee, or purchaser of all or part of the Building. To the extent Tenant.
fails to provide the estoppeF certificate within ten (10) days, the content thereof shall be deemed
approved, and Tenant shall be bound by the terms.
20.2. Additional Requested Documents or Instruments. Within ten (10) days after a written
request by Landlord, Tenant shall execute and deliver whatever other documents or instruments
may be reasonably required for sale or financing purposes, including (if requested by Landlord) a
current financial statement and financial statements for the finro (2) years preceding the current
financial statement year. Those statements shall be prepared in accordance with generally-
accepted accounting principles and shall be audited by an independent certified public
accountant.
20.3. Failure to Deliver. Tenant's failure to execute or deliver an estoppel certificate in the
required time period shall constitute an acknowledgment by Tenant that the statements included
in the estoppel certificate are tcue and correct, without exception. Tenant's failure to execute or
deliver an estoppel certificate or other document or instrument required under this Article 20 in a
timely manner shall be a material breach of this Lease.
Article 21
SUBORDINATION, NONDISTURBANCE, AND ATTORNMENT
21.1.Automatic Subordination. This Lease is subject and subordinate to:
a) The lien of any mortgages, desds of trust, or other encumbrances {herein referred to as
Encumbrances")of the Building and Real Property;
b) All present and future ground or underlying leases (herein referred to as Underlying
Leases")of the Building and Real Property novu or hereafter in focce against the Building and Real
Property;
c) All renewals, extensions, modifications, consolidations, and replacements of the items
described in subparagraphs (a)-(b); and
36
d)All advances made or hereafter to be made on the security of the Encumbrances.
Despite any other provision of this Article 21, any Encumbrance holder or lessor may elect that
tl is Lease shall be senior #o ar d have priority over that En umbrance or Underlying Lease
whether this Lease is dated before or after the date of the Encumbrance or Underlying Lease.
21.2. Subordination Agreement; Aqencv. This subordination is self-operative, and no further
instrument of subordination shall be required to make it effective. To confirm this subordination,
however, Tenant shall, within five (5) days after Landlord's request, execute any further
instruments or assurances in recordable form that Landlord reasonably considers necessary to
evidence or confirm the.subordir ation or-superiority of this Lease to any such Encumbrances or
Underlying Leases. Tenant irrevocably appoints the Assistant Executive Director or Executive
Director of Landlord, as Tenant's agent to execute and deliver in the name of Tenant any such
instrument(s) if Tenant fails to do so. This authorization shall in no way relieve Tenant of the
obligation to execute such instrument(s) of subordination or superiority. Tenant's failure to
execute and deliver such instrument(s) shall constitute a default under this Lease.
21.3. Attornment. Tenant covenants and agrees to attorn to the transferee of Landlord's
interest in the Real Property by foreclosure, deed in lieu of foreclosure, exercise of any remedy
provided in any Encumbrance or Underlying Lease, or operation of law (without any deductions
or setoffs), if requested to do so by the transferee,and to recognize the transferee as the Landlord
under this Lease. The transferee shall not be liable for:
a)Any acts, omissions, or defaults of Landlord that occurred before the sale or conveyance;
or
b)The return of any security deposit except for deposits actually paid to the transferee.
21.4. Notice of Default; Riqht to Cure. Tenant agrees to give written notice of any default by
Landlord ta the holder of any prior E cumbrance ar lJnderlying Lease. Tenant agrees that, before
it exercises any rights or remedies under the Lease, the lienholder or lessor shall have the right,
but not the obligation, to cure the default within the same time, if any, given to Landlord to cure
the default, plus an additional thirty (30) days. Tenant agrees that this cure period shall be
extended by the time necessary for the lienholder to begin foreclosure proceedings and to obtain
possession of the Building or Real Property, as applicable.
Article 22
DEFAULTS AND REMEDIES
22.1. Tenant's Default. The occurrence of any of the following shall constitute a default by
Tenant under this Lease:
a)TenanYs failure to pay when due any Rent required to be paid under this Lease if the failure
continues for three (3)days after written notice of the failure from Landlord to Tenant;
b) Tenant's failure to provide any instrument or assurance as required by Section 21.2 or
estoppel certificate as required by Section 20.1 if the failure continues for five(5)days after written
notice of the failure from Landlord to Tenant;
37
c)Tenant's failure to perform any other obligation under this Lease if the failure continues for
fifteen (15) days after written notice of the failure from Landlord to Tenant;
d)Tenant's abandonment of the Premises, including Tenant's absence from the Premises for
three(3)consecutive days{e ccluding Saturdays, Sundays, and Galifomia legal holidays)while in
default of any provision of this Lease;
e)To the extent permitted by law:
1)A general assignment by Tenant of the Lease for the benefit of creditors;
2)The filing by or against Tenant of any proceeding under an insolvency or bankruptcy
law, unless (in the case of an involuntary proceeding) the procgeding is dismissed within sixty
60)days;
3) The appointment of a trustee or receiver to take possession of all or substantially all
the assets of Tenant, unless possession is unconditionally restored to Tenant within thirty (30)
days and the trusteeship or receivership is dissolved;
4)Any execution or other judicially authorized seizure of all or substantially all the assets
of Tenant located on the Premises, or of Tenant's interest in this Lease, unless that seizure is
discharged within thirty(30)days;
f)The committing of waste on the Premises; or
g) Tenant's failure to occupy the Premises within ten (10) business days after the Premises
are ready for occupancy.
22.2. Replacement of Statutory Notice Requirements. When this Lease requires service of a
notice, that notice shall replace rather than supplement any equivalent or similar statutory notice,
including any notices required by Code of Civil Procedure section 1161 or any similar or successor
statute. When a statute requires service of a notice in a particular manner, service of that notice
or a similar notice required by this Lease) in the manner required by Section 31.11 shall replace
and satisfy the statutory service-of-r otice procedures, including those required by Code of Civil
Procedure section 1162 or any similar or successor statute.
22.3. Landlord's Remedies on Tenant's Default. On the occurrence of a default by Tenant,
Landlord shall have the right to pursue any one or more of the following remedies in addition to
any other remedies now or later available to Landlord at law or in equity. These remedies are not
exclusive but are instead cumulative.
22.3.1. Termination of Lease. Landlord may terminate this Lease and recover possession of
the Premises. Once Landlord has terminated this Lease, Tenant shall immediately surrender the
Premises to Landlord. On termination of this Lease, Landlord may recover from Tenant all of the
following:
a)The worth at the time of the award of any unpaid Rent that had been eamed at the time of
the termination, to be computed by allowing interest at the rate set forth in Article 24 but in no
case greater than the maximum amount of interest permitted by law;
38
b)The worth at the time of the award of the amount by which the unpaid Rent that would have
heen eamed between the time of the termination and the time of the award exceeds the amount
of unpaid Rent that Tenant proves could reasonably have been avoided, to be computed by
allowing interest at the rate set forth in Article 24 but in no case greater than the maximum amount
of interest permitted by law;
c)The worth at the time of the award of the amount by which the unpaid Rent for the balance
of the Lease Term after the time of the award exceeds the amount of unpaid Rent that Tenant
proves could reasonably have been avaided, to be computed by discounting that amount at the
discour t r#e of the Federa REse re Bank of Sar -ar cisco a##Me t e of##e wa-r pl s or e
percent(1%);
d) Any other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perForm obligations under this Lease, includicng, without limitation,
brokerage commissions and advertising expenses, expenses of remodeling the Premises for a
new tenant(whether for the same or a different use),and any special concessions made to obtain
a new tenant; and
e)Any other amounts, in addition to or in lieu of those listed above, that may be perrnitted by
applicable law.
22.3.2. Continuation of Lease in Effect. Landlord shall have the remedy described in Civil Code
section 1951.4,which provides that,when a tenant_has the right to sublet or assign (subject only
to reasonable limitations), the landlord may continue the lease in effect after the tenant's breach
and abandonment and recover Rent as it becomes due. Accordingly, if Landlord does not elect
to terminate this Lease on account of any default by Tenant, Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the right to recover all Rent as it
becomes due.
22.3.3.Tenant's Subleases. Whether or not Landlord elects to terminate this Lease on account
of any default by Tenant, Landlord may:
a) Terminate any sublease, license, concession, or other consensual `'arrangement for
possession entered into by Tenant and affecting the Premises.
b) Choose to succeed to Tenant's interest in such an arrangement. If Landlord elects to
succeed to Tenant's interest in such an arrangement, Tenant shall, as of the date of notice by
Landlord of that eleation, have no further right to, or interest in, the Rent or other consideration
receivable under that arrangement.
22.4. Form of Pavment after Default. If Tenant has previously attempted to pay the Landlord
with a check drawn on an account with insufficient funds or the Tenant has instructed the drawee
to stop payment on a check, draft, or order for payment of money or otherwise fails to pay any
amount due under this Lease within three (3) days after the due date, Landlord shall have the
right to require, for a period nat to exceed three (3) months, that subsequent amounts paid by
Tenant to Landlord under this Lease (to cure a default or otherwise) be paid in the form of cash,
money order, cashier's or certified check drawn on an institution acceptable to Landlord, or other
form approved by Landlord despite any prior practice of accepting payments in a different form.
22.5. Efforts to Re-let. For purposes of this Article 22, Tenant's right to possession shall not
be considered to have been terminated by Landlord's efforts to re-let the Premises, by Landlord's
39
acts of maintenance or preservation with respect to the Premises, by appointment of a receiver
to protect Landlord's interests under this Lease, or such other acts as are consistent with the
protection of Landlord's interests that do not actually prevent Tenant's actual occupation of the
Premises. This list is merely illustrative of acts that may be performed by Landlord without
terminating Tenant's right to possession.
22.6. Acceptance of Rent without Waivinq RiQhts. Under Article 25, Landlord may accept
Tenant's payments without waiving any rights under this Lease, including rights under a
previously served notice of default. If Landlord accepts payments after serving a notice of default,
Landlord may nevertheless commence and pursue an action to enforce rights and remedies under
the previously served notice of default.
22.7. Tenant's Remedies on Landlord's Default. Tenant waives any right to terminate this
Lease and to vacate the Premises on Landlord's default under this Lease. Tenant's sole remedy
on Landlord's default is an action for damages or injunctive or declaratory relief.
Article 23
LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
23.1. Landlord's RiQht to Perform Tenant's Obliqations. A I obligations to be performed by
Tenant under this Lease shall be performed by Tenant at TenanYs expense and without any
reduction of Rent. If TenanYs failure to pertorm an obligation continues for five (5) days after
notice to Tenant, Landlord may perform the obligation on TenanYs behalf, without waiving
Landlord's rights for TenanYs failure to perform any obligations under this Lease and without
releasing Tenant from such obligations.
23.2. Reimbursement bv Tenant. Within fifteen (15) days after receiving a statement from
Landlord, Tenant shall pay to Landlord the amount of expense reasonably incurred by Landlord,
under Section 23.1, in performing Tenant's obligation.
Article 24
LATE PAYMENTS
24.1. Late Charqes. If any Rent payment is not received by Landlord or Landlord's designee
within five (5) days after that Rent is due, Tenant shall pay to Landlord a late charge (herein
referred to as "Late Charge(s)") of One Hundred and No/100 Dollars ($100) as liquidated
damages, in lieu of actual damages(other than interest under Section 24.2 and attomey fees and
costs under Article 27). Tenant shall pay this amount for each calendar month in which all or any
part of any Rent payment remains delinquent for more than ve(5)days after the due date. The
parties agree that this late charge represents a reasonable estimate of the expenses that Landlord
will incur because of any late payment of Rent(other than interest and attomey fees and costs).
Landlord's acceptance of any liquidated damages shall not constitute a waiver of TenanYs default
with respect to the overdue amount or prevent Landlord from exercising any of the rights and
remedies available to Landlord under this Lease. Tenant shall pay the late charge as Additional
Rent with the next installment of Rent.
24.2. Interest. If any Rent payment is not received by Landlord or Landlord's designee within
five (5)days after that Rent is due,Tenant shall pay to Landlord interest on the past-due amount,
from the date due until paid, at the rate of ten percent(10%) per year.
40
Article 25
NON-WAIVER
25.1. Non-waiver. No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy for the violation of that provision, even if that violation continues
or is repeated. Any waiver by Landlord of any provision of this Lease must be in writing. Such
written waiver shall affect only the provision specified and only for the time and in the manner
stated in the writing.
25.2. Acceptance and Aqplication of Pavment; Not Accord and Satisfaction. No receipt by
Landlord of a lesser payment than the Rent required under this Lease shall be considered to be
other than on account of the earliest amount due,and no endorsement or statement on any check
or letter accompanying a payment or check shall be considered an accord and satisfaction.
Landlord may accept checks or payments without prejudice to Landlord's right to recover all
amounts due and pursue all other remedies provided for in this Lease.
Landlord's receipt of monies from Tenant after giving notice to Tenant terminating this Lease
shall in no way reinstate, continue, or extend the Lease Term or affect the Termination Notice
given by Landlord before the receipt of those monies. After serving notice terminating this Lease,
filing an action, or obtaining final judgment for possession of the Premises, Landlord may receive
and collect any Rent due, and the payment of that Rent shall not wraive or affect such prior notice,
action, or judgment.
Article 26
WAIVER OF RIGHT TO JURY TRIAL
To the extent now or hereafter permitted by law, Landlord and Tenant waive their respective
rights to trial by jury of any contract or tort claim, counter-claim, cross-complaint, or cause of
action in any action, proceeding,or hearing brought by either party against the other on any matter
arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant,
or TenanYs use or occupancy of the Premises, including any claim of injury or amage r the
enforcement of any remedy under any current or future law, statute, re ' n, cod , or
ordinance.
LANDLORD'S INITIAL . TENANT'S INITIALS:
Article 27
ATTORNEY FEES AND COSTS
If either party undertakes litigation against the other party arising out of or in connection with.
this Lease, the prevailing party shall be entitled to recover from the other party reasonable
attorney fees and court costs incurred. The prevailing party shall be determined under Civil Code
section 1717(b)(1)or any successor statute.
Article 28
LANDLORD'S ACCESS TO PREMISES
28.1. Landlord's Access ta Premises. Landlord and its agents shall have the right at all
reasonable times to enter the Premises to:
a) Inspect the Premises;
41
b)Show the Premises to prospective purchasers,mortgagees,or tenants or to ground lessors
or underlying lessors;
c)Serve, post, and keep posted notices required by law or that Landlord considers necessary
for the protection of Landlord or the Building; or
d) Make repairs, replacements, alterations, or improvements to the Premises or Building that
Landlord considers necessary or desirable.
Despite any other provision of this Article 28, Landlord may enter the Premises at any time to:
a) Perform services required of Landlord;
b)Take possession due to any breach of this Lease; or
c) Perform any covenants of Tenant that Tenant fails to perform.
28.2. TenanYs Waiver. Landlord may enter the Premises under this Article 28 without the
abatement of Rent,and Landlord may take any steps necessary to accomplish the stated purpose
of Landlord's right of entry. Tenant waives any claims for damages caused by Landlord's entry,
including damage claims for:
a) Injuries;
b) Inconvenience to or interference with Tenant's business;
c) Lost profits; and
d) Loss of occupancy or quiet enjoyment of the Premises.
28.3. Method of Entrv. For entry as permitted by this Article 28, Landlord shall at all times have
a key or, if applicable, a card key with which to unlock all the doors in the Premises, excluding
Tenant's vaults,safes,and special security areas. In an emergency situation, Landlord shall have
the right to use any means that Landlord considers proper to open the doors in and to the
Premises. Any such entry into the Premises by Landlord shall not be considered a forcible or
unlawFul entry into, or a detainer of, the Premises or an actual or constructive eviction of Tenant
from any portion of the Premises.
Article 29
SIGNS
29.1. Buildinq Name; Landlord's Siqnage Rights. Subject to TenanYs signage rights under this
Article 29, Landlord may at any time change the name of the Building and install, affix, and
maintain all signs on the exterior and interior of the Building as Landlord may, in Landlord's sole
discretion, desire. Tenant shall not have or acquire any property right or interest in the name of
the Building. Tenant may use the name of the Building or pictures or illustrations of the Building
in advertising or other publicity during the Lease Term.
42
29.2.Tenant's Siqnaqe Rights within BuildinQ.
Tenant's identifying signs shall be provided by Landlord at Tenant's expense. The signs shall
be comparable to those used by Landlord for other tenants and shall comply with Landlord's
Building standard signage program.
29.3. Prohibited Siqns and Other Items. Tenant may not display any signs on the exterior or
roof of the Building or in the common areas of the Building or the Real Property. Tenant may not
install or display any signs, window coverings, blinds, or other items (including those located
behind the Landlord-approved window coverings for the Building)visible from the exterior of the
Premises without Landlord's prior written approval, which Landlord may, in Landlord's sole
discretion, grant or withhold. Any signs, notices, logos, pictures, names, or advertisements that
are installed by or for Tenant without Landlord's approval may be removed without notice by
Landlord at Tenant's expense.
Article 30
TENANT PARKING
30.1. Location of Parkin4. Tenant will have the non-exclusive right to park in spaces in the
parking spaces located on the Real Property.
30.2. Changes in Location, Lavout, and Service. Landlord specifically reserves the right to
change the location, size, configuration, design, layout, and all other aspe ts of the parking area.
Landlord may close off or restrict access to the parking area from time to time to facilitate
construction, alteration, or improvements,without incurring any liability to Tenant and without any
abatement of Rent under this Lease.
30.3. Parkinq Rules and Requlations. Tenant's right to use the parking spaces is conditioned
on Tenant's abiding by all rules and regulations prescribed from time to time for the orderly
operation and use of the parking area. Tenant shall use all reasonable efforts to ensure that
TenanYs employees and visitors also comply with such rules and regulations.
Article 31
MISCELLANEOUS
31.1. Captions. The captions of articles and sections and the table of contents of this Lease
are for convenience only and have no effect on the interpretation of the provisions of this Lease.
31.2.Word Usaqe. Unless the context clearly requires otherwise:
a)The plural and singular numbers shall each be considered to include the other;
b) The masculine, feminine, and neuter genders shall each be considered to include the
others;
c)"Shall,""will", "musY', "agrees", and "covenants° are each mandatory;
d)"Ma' is permissive;
e)"O' is not exclusive; and
43
fl"Includes"and"including" are not limiting.
31.3. CountinQ Days. Days shall be counted by excluding the first day and including the last
day. If the last day is a Saturday, Sunday, or legal holiday as described in Government Code
Sections 6700-6701, it shall be excluded. Any act required by this Lease to be performed by a
certain day shall be timely perFormed if completed before 5 p.m. local time on that date. If the day
for performance of any obligation under this Lease is a Saturday, Sunday, or legal holiday, the
time for performance of that obligation shall be extended to 5 p.m. local time on the first following
date that is not a Saturday, Sunday, or legal holiday.
31.4. Entire Agreement: Amendments. This Lease and all exhibits referred to in this Lease
constitute the final, complete, and exclusive statement of the terms of the agreement between
Landlord and Tenant pertaining to Tenant's lease of space in the Carriage House and supersedes
all prior and contemporaneous understandings or agreements of the parties. Neither party has
been induced to enter into this Lease by, and neither party is relying on, any representation or
warranty outside those expressly set forth in this Lease. This Lease may be amended only by an
agreement in writing signed by Landlord and Tenant.
31.5. Exhibits. The Exhibits attached to this Lease are a part of this Lease and incorporated
into this Lease by reference.
31.6. Reasonableness and Good Faith. Except as limited elsewhere in this Lease, whenever
this Lease requires Landlord or Tenant to give its consent or approval to any action on the part of
the other, such consent or approval shall not be unreasonably withheld or delayed.
31.7. Partial Invaliditv. If a court or arbitrator of competent jurisdiction holds any Lease clause
to be invafid or unenforceable in whole or in part for any reason, the validity and enforceability of
the remaining clauses, or portions of them, shall not be affected, unless an essential purpose of
this Lease would be defeated by loss of the invalid or unenforceable provision.
31.8. Bindinp Effect. Subject to Article 17 and Sections 31.16-31.17,this Lease shall bind and
benefit the parties to this Lease and their legal representatives and successors in interest.
31.9. Independent Covenants. This Lease shall be construed as though the covenants
between Landlord and Tenant are independent and not dependent. Tenant expressly waives the
benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations
under this Lease,Tenant shall not be entitled:
a)To make any repairs or perform any acts at Landlord's expense; or
b)To any set-off of the Rent or other amounts owing under this Lease against Landlord.
The foregoing, however, shall in no way impair Tenant's right to bring a separate action against
Landlord for any violation by Landlord of the provisions of this Lease if notice is first given to
Landlord and any lender of whose address Tenant has been notified, and an opportunity is
granted to Landlord and that lender to correct those violations as provided in Section 21.4 and
subsection 22.7.1.
31.10. Governinq Law. This Lease shall be construed and enforced in accordance with the
laws of the State of Califomia.
44
31.11. Notices. All notices(including requests,demands, approvals, or other communications)
under this Lease shall be in writing.
31.11.1. Method of Deliverv. Notice shall be sufficiently given for all purposes as follows:
a)When personally delivered to the recipient, notice is effective on delivery.
b)When mailed first class to the last address of the recipient known to the party giving notice,
notice is effective on delivery.
c)When mailed by certified mail with return receipt requested, notice is effective on receipt if
delivery is confirmed by a return receipt.
d)When delivered by overnight delivery Federal Express/Airbome/United Parcel Service/DHL
WorldWide Express with charges prepaid or charged to the sender's account, notice is effective
on delivery if delivery is confirmed by the delivery service.
e)When sent by telex or fax to the last telex or fax number of the recipient known to the party
giving notice, notice is effective on receipt as long as(1)a duplicate copy of the notice is promptly
given by first-class or certified mail or by overnight delivery or (2) the receiving party delivers a
written confirmation of receipt. Any notice given by telex or fax shall be considered to have been
received on the next business day if it is received after 5 p.m. (recipient's time) or on a non-
business day.
31.11.2. Refused, Unclaimed,or Undeliverable Notices. Any correctly addressed notice that is
refused, unclaimed,or undeliverable because of an act or omission of the party to be notified shall
be considered to be effective as of the first date that the notice was refused, unclaimed, or
considered undeliverable by the postal authorities, messenger, or ovemight delivery service.
31.11.3.Addresses. Addresses for purposes of giving notice are set forth in Section 13 of the
Summary. Either party may change its address or telex or fax number by giving the other party
notice of the change in any manner permitted by this Section 31.11, provided, however, that
Tenant must provide a street address suitable for personal service when changing its address.
31.11.4. Lenders and Ground Lessor. If Tenant is notified of the identity and address of
Landlord's lender or ground or underlying lessor, Tenant shall give to that lender or ground or
underlying lessor written notice of any default by Landlord under the terms of this Lease.
31.12.Force Maieure. If performance by a party of any portion of this Lease is made impossible
by any prevention, delay, or stoppage caused by strikes; lockouts; labor disputes; acts of God;
inability to obtain services, labor, or materials or reasonable substitutes for those items;
govemment actions; civil commotions; fire or other casualty; or other causes beyond the
reasonable control of the party obligated to perform, performance by that party for a period equal
to the period of that prevention, delay, or stoppage is excused. Tenant's obligation to pay Rent,
however, is not excused by this Section 31.12.
31.13. Time of the Essence. Time is of the essence of this Lease and each of its provisions.
31.14. [Intentionallv omitted.]
45
31.15. Recordinq; Memorandum of Lease. Except as provided in this Section 31.15, neither
this Lease nor any memorandum,affidavit,or other writing relating to this Lease may be recorded
by Tenant or anyone acting through, under, or on behalf of Tenant. Recordation in violation of
this provision constitutes an act of default by Tenant. Landlord and Tenant shall execute a short
form of Lease for recordation, containing (among other customary provisions) the names of the
parties and a description of the Premises and the Lease Term. Tenant shall execute,
acknowledge before a notary public, and deliver that form to Landlord within ten (10) days after
request by Landlord.
31.16. Liabilitv of Landlord. Except as otherwise provided in this Lease or applicable law, for
any breach of this Lease the liability of Landlord (including all persons and entities that comprise
Landlord, and any successor landlord) and any recourse by Tenant against Landlord shall be
limited to the interest of Landlord and Landlord's successors in interest in and to the Building and
Real Property. On behalf of itself and all persons claiming by, through, or under Tenant, Tenant
expressly waives and releases Landlord and its officers, directors, employees and agents from
any personal liability for breach of this Lease.
31.17.Transfer of Landlord's Interest. Landlord has the right to transfer all or part of its interest
in the Building and Real Property and in this Lease. On such a transfer, Landlord shall
automatically be released from all liability accruing under this Lease, and Tenant shall look solely
to that transferee for the perFormance of Landlord's obligations under this Lease after the date of
transfer, subject to Section 6.2. Landlord may assign its interest in this Lease to a mortgage
lender as additional security. This assignment shall not release Landlord from its obligations
under this Lease, and Tenant shall continue to look to Landlord for the performance of its
obligations under this Lease.
31.18. Joint and Several ObliQations of Tenant. If more than one individual or entity comprises
Tenant, the obligations imposed on each individual or entity that comprises Tenant under this
Lease shall be joint and several.
31.19. Submission of Lease. Submission of this document for examination or signature by the
parties does not constitute an option or offer to lease the Premises on the terms in this document
or a reservation of the Premises in favor of Tenant. This document is not effective as a lease or
otherwise until executed and delivered by both Landlord and Tenant.
31.20. [Intentionallv omitted.]
31.21. No Air Riqhts. No rights to any view from the Premises or to exterior light or air to the
Premises are created under this Lease.
31.22. Brokers. Landlord and Tenant each represents to the other that it has had no dealings
with any real estate broker or agent in connection with the negotiation of this Lease and that they
know of no real estate broker or agent who is entitled to a commission or finder's fee in connection
with this Lease. Each party shall indemnify, protect, defend, and hold harmless the other party
against all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses
including reasonable attorney fees) for any leasing commission, finder's fee, or equivalent
compensation alleged to be owing on account of the indemnifying party's dealings with any real
estate broker or agent. The terms of this Section 31.22 shall survive the expiration or earlier
termination of the Lease Term.
46
31.23. Transportation Manaqement. Tenant shall fully comply with all current or future
compulsory programs imposed by any pubfic authority, intended to manage parking,
transportation, or traffic in and around the Building. In connection with this compliance, Tenant
shall take responsible action for the transportation planning and management of all employees
located at the Premises by working directly with Landlord, any govemment transportation
management organization, or other transportation-related committees or entities. This provision
includes programs such as the following:
a) Restrictions on the number of peak-hour vehicle trips generated by Tenant;
b) Encouragement of increased vehicle occupancy through employer-sponsored financial or
in-kind incentives;
c) Implementation of an in-house or area-wide ridesharing program and appointment of an
employee transportation coordinator, and
d) Flexible work shifts for employees.
31.24.Anti-Terrorism Rearesentation. To Tenant's actual knowledge:
a) Tenant, its partners, members, officers, directors, investors, shareholders, or affiliates are
not and will not during the Term become a person or entity with whom Landlord is restricted from
doing business under the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act)Pub L 107-56, 115
Stat 272, Executive Order No. 13224 (Sept. 24, 2001), and regulations promulgated thereunder
collectively,Anti-Terrorism Laws).
b) Tenant, its partners, members, officers, directors, investors, shareholders, or affiliates are
not and will not during the Term be included as persons or entities named on the Department of
the Treasury's Office of Foreign Assets Control (OFAC) Specially Designated Nationals and
Blocked Persons List(SDN List)(collectively, Prohibited Persons).
c)To the best of Tenant's knowledge,Tenant is not currently, nor during the Term will become,
engaged in (1)any transactions or dealings,or otherwise associated with any Prohibited Persons
in connection with the use or occupancy of the Premises; (2)making or receiving any contribution
of funds, goods, or services to or for the benefit of any Prohibited Person; or(3) any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of
the prohibitions set forth in any anti-money laundering or Anti-Terrorism Laws.
d) Breach of these representations constitutes a material breach of this Lease and will entitle
Landlord to any and all remedies available under this Lease, or at law or in equity.
e)The preceding representations will not apply to Tenant's shareholders if Tenant is a publicly
traded company.
Remainder of page intentionally left blank; signatures on next page]
47
LANDLORD" TE NT"
CITY OF ORANGE, a municipal
corporation
c
Robert Wilson
By:
ic City Manager
APPR AS TO FORM:
Gary She , City Atto
48
EXHIBIT A
FLOOR PLAN OF PREMISES
To be inserted.]
49
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106 307 108
1305q.Ft.
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gO sq.
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FL 208
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EXHIBIT B
SITE PLAN
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EXHIBIT C
RULES AND REGULATIONS
To be inserted.]
51
EXHIBIT"C"
LANDLORD'S RULES AND REGULATIONS
Tenant will comply with the following rules and regulations:
1. Safes, furniture, freight, fixtures or bulky articles shall be moved into or out of the
Building only in the manner and at such times as Landlord may direct, so as to minimize
inconvenience to other tenants. Landlord shall in all cases have the right to specify the proper
position of any safe or other heavy articles. In no event shall any weight placed upon the floor of
the Premises exceed fifty (50) pounds per square foot of floor space. Any damage done to the
Building by taking in or removing any safe o other objects or from overloading any floor in any
way shall be paid by Tenant, as rent additional to all other rent reserved under this Lease. Costs
arising from defacing or injuring in any way any part of the Building by Tenant or by Tenant's
invitees, employees, agents, guests or servants shall be paid for by Tenant, as rent additional to
all other rent reserved under this Lease.
2. Tenant is granted the right at all times during the Lease Term to the non-exclusive
use of the conference room in the Building. Tenant and all other tenants of the Building shall
cooperate with each other to schedule the use of the conference room such that no tenant shall
be excluded from participation in the use of the conference room. Landlord, however, has the
sole discretion to determine the manner in which the conference room is operated and used.
Landlord may, if it deems advisable in its sole discretion, establish for the conference room, a
system for the use of the conference room for Tenant and all other tenants of the Building.
3. The entries, passages and corridors outside of the Premises shall not be
obstructed by Tenant or used by Tenant for any other purpose than ingress to and egress from
the Premises.
4. Any person employed by Tenant with Landlord's consent to do janitorial work shall,
while in the Building and outside of the Premises,be subject to and under the control and direction
of Tenant (not the agent or servant of Landlord). Landlord shall in no way be responsible to
Tenant far any loss of property on the Premises, however occurring, or for any damage done to
any of the effects of Tenant.
5. Doors and windows that reflect or admit light or air into the halls or other places in
the Building shall not be covered or obstructed by Tenant. Tenant shall not mark, drive nails,
screw or drill into, paint, or in any way deface the walls, ceilings, partitions,floors, wood, stone or
iron work within the Premises or the Building except with the prior written consent of Landlord.
6. Tenant shall not allow anything to be placed on or affixed to the inside window
frames of the Premises without the prior written approval of Landlord.
7. No music shall be played or any other noise permitted in the Premises which shall
be objectionable to Landlord or other tenants of the Building, nor shall Tenant use, keep or permit
ta be used or kept any foul or noxious gas or substance in the Premises, nor shall any substance
which might add an undue burden on the cleaning or maintenance requirements with respect to
the Premises or the Building be introduced into the Building or the Premises.
1
8. Access may be had by Tenant to the halls,corridors, and stairways in the Building,
and to the Premises, on Mondays through Saturdays befinreen the hours of 7:00 A.M. and 6:00
P.M. (herein referred to as the "Building Hours"), except on °Holidays" (as defined in Section
10.1.1 Heating and Air Conditioninq of the Lease). If Tenant uses the Building after Building
Hours or on Sundays or Holidays, Tenant shall keep any entrance doors to the Building used by
Tenant locked immediately after entering or leaving the Building. Landlord shall be under no
obligation to provide heating or air conditioning services to the Building on Sundays or Holidays
or at any time other than during Building Hours. Tenant may, by providing adequate advance
notice to Landlord, request Landlord to provide heating or air-conditioning services to the Building
on Sundays or Holidays or at any time other than during Building Hours, and should Landlord
provide heating or air-conditioning during such hours, Tenant shall pay to Landlord, a charge to
be established by Landlord, in Landlord's sole discretion,for providing such services during such
hours.
9. No additional locks shall be placed upon the doors of the Premises and Tenant
shall not permit any duplicate keys to be made. No locks shall be changed. ALL necessary keys
will be furnished by Landlord to be paid for by Tenant at Landlord's cost. Upon termination of the
Lease, Tenant shall surrender and deliver to Landlord all keys to the Premises which are in
Tenant's possession or in the possession of TenanYs agents, employees or others permitted to
occupy the Premises by Tenant.
10. The washrooms, restrooms, shower facilities and appurtenances thereto shall not
be used for any other purpose than those for which they were constructed, and no sweepings,
rubbish, rags or other improper substances shall be thrown or placed therein. No person shall
waste water by interfering or tampering with the faucets, or otherwise. Any damage resulting to
the washrooms, restrooms, shower facilities or appurtenances shall be paid for by the Tenant
who, or whose agents, invitees, servants, guests or employees, shall cause such damage and
Landlord shall not in any case be responsible therefor.
11. The Premises or Building shall not be used for lodging, sleeping, or cooking or for
any immoral or illegal purpose or for any purpose that will damage the Premises or Building or
the reputation thereof, or for any purpose other than that specified in the Lease.
12. Tenant and Tenant's servants, agents, invitees, guests and employees shall not
interfere in any way with other tenants or those having business with them. Tenant shall not store
goods, wares or merchandise in the Building or Premises except such goods, wares or
merchandise as may be consistent with the"Permitted Use"of the Premises.
13. Landlord reserves the right to exclude or expel from the Building any person who,
in the absolute judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or
who shall in any manner do any act in violation of any of the Rules and Regulations of the Building.
14. No vending machine or similar machines of any description shall be installed,
maintained or operated upon the Premises or Building without the prior written consent of the
Landlord, which the Landlord may grant or withhold in its sole discretion.
15. Landlord may, if it deems advisable in its sole discretion, establish for the Parking
Area, a system or systems of permit parking for Tenant, and its employees and its visitors, which
may include but is not limited to charged validation or other operation including, but not limited to,
a system of charges against non-validated parking, checks of users and a set of regulations
governing different parking locations based upon the charges paid and the identity of users.
2
Tenant shall comply with such system and ali rules and regulations established by Landlord in
conjunction with such system in its use and in the use of its visitors, patrons and employees with
respect to said automobile parking area; provided, however,that such system and such rules and
regulations shall apply to all persons entitled to the use of the Parking Area, and all charges to
Tenant for use of the Parking Area shall be no greater than those imposed on a majority of users.
16. Tenant will not use, suffer, or permit the Building,the Premises or any part thereof
to be used in any manner that will constitute a nuisance or unreasonable annoyance to the public
or to Landlord, or for any hazardous purpose or in any manner that will impair the structural
strength of the Building.
17. During emergency conditions, and after normal business hours, Landlord reserves
the right to close and keep locked any and all entrances and exit doors of the Building.
18. Landlord reserves the right at any time to change or rescind any one or more of
these rules or regulations or to make such other and further reasonable rules and regulations as
in Landlord's judgment may from time to time be necessary for the management, safety, care,
and cleanliness of the Premises and Building, and for the preservation of good order therein, as
well as for the convenience of occupants,tenants,and patrons of the Building. Tenant must abide
by any such additional rules or regulations. No waiver of any rule or regulation by Landlord is
effective unless expressed in writing and signed by Landlord.
19. Smoking is prohibited throughout the Building. Tenant shall not engage in or
permit its agents, employees, contractors, subtenants, guests, visitors or invitees to engage in
the smoking of tobacco products in the Building. Persons desiring to smoke shall do so outside
ofi the Building.
The undersigned hereby acknowledges that it has read the foregoing Rules and
Regulations and agrees to abide by them.
Robe
Dated: 02 002 r—'- '
Printed Name: 2 d
Title:
3