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HomeMy WebLinkAboutCIVIC CENTER MEDICAL ARTS 2-2004 A-2004-090 , ',,¡n,\f,:Cl Nnr ~I V"',UI ~ "¡ORK 1"1 'J » ~ î\ ',,¡'., ¡"" .,,1 'I CLERK Of CûU"CIL ilATE, 1-/~v<l CENTER LEASE (I, (V~ \... -~ lY ¡Y\ofV) This summary of the basic lease provisions ("Basic Lease Provisions") of the Center Lease ("Lease") entered into this 7th day of Mav 2004 by and between Civic Center Medical Arts Associates. a California Limited Partnership dba CIVIC CENTER PROFESSIONAL PLAZA ("Landlord") and CitY of Santa Ana Municipal Cornoration of the State of California (2004 Empowerment Zone Youth Work Force Development PrOgram) ("Tenant") is hereby made a part of the Lease for the purpose of setting forth information referred to in the Lease, In the event of any conflict, inconsistency, or ambiguity created by or between the Basic Lease Provisions and the Lease to which it is attached, which Tenant acknowledges it has read in full, the terms and conditions ofthe Lease shall govern. BASIC LEASE PROVISIONS L Tenant's Trade Name: 2004 Empowerment Zone Youth Work Force Development Pro!!l"am 2. Use of Premises: Office Space 3, Lease Term: 4 Months and 20 davs 4. Initial Monthly Minimum Rent: $ 4.563.00 5, Minimum Comprehensive General Liability Insurance: $1.000.000,00 6, Estimated Initial Common Area Facilities and Taxes and Insurance Charges: N/A 7. Estimated Initial Premises Real Property Taxes: N/A 8. Initial Merchants' Association Charges: N/A 9, Floor Area of Premises: 3.407 square feet Address of Premises: 500 W. Santa Ana Blvd, Suite 160 & 180, Santa Ana, CA 92704 10. Security Deposit: $ 4.563,00 I L Broker(s): N/A 12, Landlord's Work: Tenant to take possession of the Premises in an "as is" condition with no alterations. 13. Addresses for Payments and Notices: LANDLORD: TENANT: Civic Center Professional Plaza P. O. Box 507 Santa Ana, CA 92702 City of Santa Ana Municipal Corporation of the State of California 14. Commencement Date: Mav 10. 2004 Termination Date: September 30. 2004 , INDEX TO LEASE ARTICLE I. Sechon 1.1 Seclioll I 2 S!.:ction I ) Sl.:clioll 1.1 S~ctioll I 5 Section 1.6 Section 1.7 TERM Leased Premises Tenn of Lease R]ght to Possession of Premises J)ak of r ,case iUld I.cgal Eni..'t.:l COlllll1CIICcmclIl of Lc~ Tenn Rent Commencement Dt1te Commencement Date for All Obligations ARTICLE II. Section 2.1 Section 2,2 Section 2.3 Section 2.4 RENT Mirumum Rent Cost of Living Increase AdditionaJ Payments Place of Payment; Late Payments ARTICLE IlL Section 3. I FINANCIAL STATEMENTS Furnishing of Financial Statements ARTICLE IV. Seclion 4. J RELOCA nON OF PREMISES Landlord's Option to Relocate Tenant ARTICLE V. Section 5, I TAXES AND ASSESSMENTS T cnant's Obligation for Taxes and Assessments ARTICLE VI. Section () I Section 6.2 Seclion 6, 3 CONDUCT OF BUSINESS BY TENANT Use of Premises OperaLion of Business Care of Premises ARTICLE VII. S~ct¡on 7 ¡ Section 7 2 SecllOn 73 Section 7.4 COMMON FACILITIES Operation and Mamtenance of Common Facihties Use of Common Facilities Tenant's Share of Expenses Billing and Pa)1I1cnt of Expense Percentage ARTICLE Vill Section 8 I Scclion 82 Scctiol1 H 3 ALTERATIONS, CHANGES AND ADDITIONS Installation by Tenant Removal by Tenant Changes and Additions by Landlord ARTICLE IX ScctlOll 9, I Scclion 92 MAINTENANCE OF LEASED PREMISES Landlord's Obligations for Maintenance Tenant's Obligations for Maintenance ARTICLE X SectJon 10 I Sectlon 10,2 Section 103 Section 10 4 Section 10.5 INSURANCE AND INDEMNITY T cnan!' s Insurance Landlord's Insurance Covenant to Indemnify and Hold Harmless Exemption of Landlord W ai ver of Subrogation' ARTICLE XI. Section 11,1 UTILITY CHARGES Utility Charges ARTICLE XII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION OIT-Set Statement Attonunent Subordination Appointment of LandJord as Attorney-In-Fact Remedies Section 12,1 Section 122 Section 123 Section 12.4 Section 12.5 ARTICLE XIIL Section 13. I ASSIGNMENT AND SUBLETTING No Assigrunent and SublettinR ARTICLE XIV. Section 14, 1 WASTE Waste or Nuisance ARTICLE XV. Section 151 Section \ 52 Section 15 3 I I 2 2 2 2 2 3 4 4 4 4 5 5 6 6 6 6 6 7 7 7 8 8 8 8 8 8 9 9 9 10 SIGNS; ADVERTISING; PROMOTIONAL CHARGES Signs; Adverusin2 10 Adl'ertJscd Name and Addre5s 10 PromotIOnal Charges 11 ,r ARTICLES XVL SectIon 16 1 DAMAGE TO LEASED PREMISES Rcconstruction of Dwnaged Premises or ' '~nnìnalion orL~sc ARTICLE XVIl S-;ctlon 17 1 S..:ction 172 SCUIOII 173 EMINENT DOMAIN Tolal ConùemnaLion of Leased Prerruscs P¡U1IU! Condcmnulion Lanùlon1's and TcnD.l1t's Damage:) ARTICLE XVIll. Sœtion 18. I Section 18.2 ScctJOJl I H.3 Section J 8.4 DEFAULTS; REMEDIES Defaults Remedies Dcfuull by Wl1dlord Legal Expenses and Collection Costs ARTICLE XIX SectIon 19.1 ACCESS BY LANDLORD Right of Entry ARTICLE XX, Section 20 I HOLDING OVER Holding Over ARTICLE XXI. Section 21.1 RULES AND REGULATIONS Rules and ReguJations ARTICLE XXlL ScctJOn 22 I QUIET ENJOYMENT Landlord's Covenant ARTICLE XXUl S~c!ion 23 ¡ SECURITY PROVISION Security Deposit ARTICLE XXIV, Sectlun 24 I Sl:ction 24 2 Section 243 SCCI¡¡JII 24 t. SC<.:l\On 24 5 Secllon 24 6 SccUon 24 7 ScclJon 24 ~ Sed!on 24.9 MISCELLANEOUS Waiver Entire Agreemant Relationsrup ofPa11ies; Use of PronoW\S Delays Notices Caplions and Section Numbers Broker's Corrunission Recording Service Charge for Failure by Tenant to Submjt Required Information rransfer of Landlord's Interest floor ^,,'" u¡lcrcsl on Past Due Obligations Accord and Snlisf<Jction ExecutIon of Lease; No Option Controlling Laws SuCtessors Speçific Performance of Landlord's Rights ~\terpretation of Words and Phrases Corporate and Partnersrup Authority SUITender or Cancellation Changes Requested by Lender SUI'lival of Indemn.ities and WIUTanties Section 24. 10 Section 24 II SL:cLJO!\ 24 12 Section 2.t ¡ J SectIOn 24 ! 4 Section 2-1 15 Section 2416 SecGon 24.17 Seclion 2-1,18 SectIon 24,19 SectIon 2420 Section 24 21 SecUon 2422 ARTICLE XXV. 12 12 13 13 13 14 15 15 16 16 16 16 16 17 17 17 17 17 17 17 18 18 18 18 18 18 Ig 18 18 Ig 19 19 19 19 19 Section 25,1 ADOPTION AND IMPLEMENTATION OF AN ENERGY CONSERVATION PROGRAM Adoption and Implementation of an Energy COn5eIVation Program ARTICLE XXVI. Section 26. I NO IMPLICATION OF EXCLUSIVE USE No Implication of Exclusive Use ARTICLE xxvn. Section 27,¡ REPRESENTATIONS BY TENANT Representations by Tenant Exhibit "A" Exhibit uß" Exhibit '~C" Site Plan ofCenter/Premises Tenant's Insurance Rules and Regulations 19 19 20 } LEASE ARTICLE I. TERM SECTION I.I LEASED PREMISES. Landlord, In consideration of the rent to be paid and the covenants to be performed by Tenant, does hereby lease to Tenant and Tenant hereby rents ITom Landlord those certain premises ("Premises") containing approximately the floor area set forth In Item 9 of the Basic Lease Provisions, located in CIVIC CENTER PROFESSIONAL PLAZA in the City of Santa Ana, County of Orange, State of California, which - Center and Premises are more particularly described on Exhibi18 "A" r attached hereto, for the term, at the rental, and in consideration of all of the terms and conditions set forth below. This is lease of real property in a center within the meaning of Subsection 365(bX3) of the Bankruptcy Code, II U$.C The exterior walls and the roof of the Premises and the area above and beneath said Premises are not leased hereunder and the use thereof together with the right to locate, both vertically and horizontally, install, maintain, use, repair and replace pipes, utility lines, ducts, conduits, flues, re!Tigerant lines, drains, sprinkler mains and valves, access panels, wires and structural clements leading through the Premises in locations which will not materially interfere with Tenant's use thereof and serving other parts of the Center, are hereby reserved unto Landlord. SECTION 1.2 TERM OF LEASK The term ("Term") of this Lease shall be the number of full calendar months specified In Item 3 of the Basic Lease Provisions, plus any partial month following the commencement date ("Term Commencement Date" defined below) if such date is other than the first day of a month. For purposes of this Lease, the term "Lease Year" and "Calendar Year" shall have the same meaning, except in the event when the Term commences on a date other than January I, the first lease year shall be the period !Torn such commencement date to the next succeeding December 31 and, further, if this Lease terminates on a date other than December 3 J, the last lease year shall be the period beginning on the January I following the last full lease year and ending on such termination date. SECTION 1.3 RIGHT TO POSSESSION OF PREMISES, Tenant shall be entitled to possess and occupy the Premises pursuant to provisions of this Lease provided Tenant has complied with the following requirements: (a) Payment of the security deposit in the amount set forth in Item 10 of the Basic Lease Provisions. (b) Submittal of all insurance policies and/or certificates of insurance as required by the provisions contained in Article X of this Lease. (c) Submittal of any plans and specifications, permits and governmental authorizations that may be required pursuant to the terms and provisions of this Lease, (d) Payment of any initial monthly rent charges, . . .. . provisions of this Lease. fi 'It I 0 ' , '. " I which may be required pursuant to the terms and SECTION 1.4 DATE OF LEASE AND LEGAL EFFECT. The terms, covenants and conditions of this Lease shall become legally binding on the date it is executed by Landlord (after having been executed by the Tenant) notwithstanding the fact that the Term Commencement Date and Rent Commencement Date as hereafter set forth might be different. SECTION 1.5 COMMENCEMENT OF LEASE TERM, The Term shall commence ("Term Commencement Date") on the date specified in Item 14 of the Basic Lease Provisions, and terminate on the date set forth in said Item 14, unless Landlord and Tenant execute a written supplemental agreement to the Lease setting forth a different Term Commencement Date and Termination Date. SECTION 1.6 RENT COMMENCEMENT DATK Tenant's obligation to pay rent shall commence on the Term Commencement Date as set forth in Section 15 above and continue throughout the Term of the Lease, unless Landlord and Tenant execute a written supplemental agreement to the Lease setting forth a different Rental Commencement Date, SECTION 1.7 COMMENCEMENT DATE FOR ALL OBLIGATIONS. All other terms, conditions, covenants and provisions of this Lease, including Tenant's obligation to pay common facility charges, taxes and assessments and any other sum of money or charges (other than rent which is specified in Section 1,6 above) shall be legally binding upon the parties hereto as of the Term Commencement Date as specified in Section 1.5 above. ARTICLE II. RENT SECTION 2.1 MINIMUM RENT. Tenant shall pay to landlord for each full calendar month during the Term the Minimum Rent specified in Item 4 of the Basic Lease Provisions, Minimum Rent shall be payable in advance upon the first day of each calendar month whether or not Landlord makes any demand therefor, and .wi~hout any deductions or offset whatsoever. The Minimum Rent for any !Tactional part of a calendar month at the begmntng or end of the Term shall be prorated upon a daily basis based upon a thirty(30) day calendar month. SECTION 2.2 COST OF LIVING INCREASK The amount of Minimum Rent shall be adjusted as of the expiration of the twelfth (12~) full calendar month of the Term and each twelve (12) ,:"onth period thereafter to reflect any increase in the cost of living, The adjustment, if any, shall be calculated upon the basIS of the Untted States Department of Labor, Bureau of Labor Statistics Consumer Price Index of Urban Wage Earners and Clencal Workers, Los Angeles-Long Beach-Anaheim Average, all items (1967 - 100) (the "Index"), The Index published and in effect nmety (90) days pnor to the Term Commencement Date shall be considered the Base Year Index (the "Base"). At each annual adjustment date, the Minimum Rent shall be adjusted by the percentage increase. if any, between the Index published and in effect ninety (90) days preceding the adjustment date and the Base period; provided, however, that in no event shall the annual Minimum Rent be less than the annual Minimum Rent in effect during the lease year immediately preceding the annual adjustment date notwithstanding the fact that the Index may, as of some adjustment date, be less than the Base. When the adjusted Minimum Rent is determined, Landlord shall give Tenant written notice of same indicating how the new monthly Minimum Rent figure was computed, If at any rental adjustment date the Index shall not exist in the same format as recited in this Section 2.2, Landlord shall substitute any official index published by the Bureau of Labor Statistics, or successor or similar governmental agency, as may then be in existence and which is, in Landlord's reasonable discretion, most nearly equivalent to the Index, SECTION 2.3 ADDITIONAL P A YM ENTS. Except as otherwise provided in this Lease, all sums of money or charges whatsoever required to be paid by Tenant under this Lease shall be due and payable five (5) days after demand, without any deductions or offset whatsoever. Landlord shall have no obligation to bill Tenant for monthly rent, percentage rent, common facilities charges or promotional charges, Tenant's failure to pay any such amounts or charges when due shall carry with it the same consequences as Tenant's failure to pay rent and shall be deemed to be additional rent. SECTION 2.4 PLACE OF PAYMENT; LATE PAYMENTS, Tenant agrees to pay the rental and other charges herein reserved to Landlord at the address specified in the Basic Lease Provisions or to such other person and/or at such other place as Landlord may from time to time designate in writing, For each payment of rent or additional charges not paid when due, Tenant shall pay to Landlord a service charge in the amount of Fifty Dollars ($50.00) for each week or portion thereof that the delinquency or refusal to pay persists, Following each second consecutive late payment of rent and/or additional charges, Landlord shall have the option to (a) require that beginning with the first payment of rent due following the date such late payment was due, Minimum Rent shall no longer be paid in monthly installments but shall be payable in installments of three (3) months Minimum Rent three (3) months in advance; or (b) require that Tenant increase the amount of the security deposit required under Section 23.1 by one hundred percent (100%), which additional security deposit shall be retained and applied by landlord, in the manner provided in said Section 23.1. All payments shall be made in lawful money of the United States. All payments requiring proration shall be prorated on the basis of a thirty (30) day month. In addition to the foregoing, Landlord may elect to require all further payments under this Lease to be made by Tenant in the form of cashier's checks, ARTICLE III. FINANCIAL STATEMENTS SECTION 3.1 FURNISHING OF FINANCIAL STATEMENTS, Upon Landlord's written request, Tenant shall promptly furnish Landlord, ITom time to time, with (a) fin.,\cial statements including, but not limited to, balance sheets, profit and loss statements and changes in financial condi~ion, reflecting Tenant's current financial condition, and (b) written evidence of ownership of controlling stock intercstifi'enant is a corporation. ARTICLE IV. RELOCATION OF PREMISES h/~ ~ndY Barba. program manager, at "~/ SECTION 4.1 LANDLORD'S OPTION TO RELOCAT TENANT. Landlord shall have the ¡I right, upon providing fourteen (14) days written notice hand delivered t e Tenant premises, to move Tenant to other space in the building at Landlord's cost and expense. Landlord shall pay reasonable moving expenses, I including movers, telephone installation and stationery replacement. Such new space shall be approximately -f'7/t? the same size as the Premises and Tenant shall take possession of the premises in ãil1iX'UISI!:"fuñdition. In the-- a clean and event Tenant moves to such new space, then this Lease shall remain in full force and effect and be deemed usable applicable to the new space, except that Exhibit "A" and the Basic Lease Provisions shall be amended to include and state all correct data as to the new space. However, if the new space does not meet with Tenant's approval, Tenant agrees that the Lease shall terminate on the last day of Landlord's original fourteen (14) day notice and the Lease will become null and void. Landlord's Marketing of Premises: Landlord shall be entitled to market the premises to other perspective Tenants, The Leasing Agent for Landlord with give Tenant twenty four hour written or verbal notice to show the premises. Tenant shall then make the premises available for Landlord showing. ARTICLE V. TAXES AND ASSESSMENTS . SECTION 5.1 TENANT'S OBLIGATION FOR TAXES AND ASSESSMENT (a) Governmental charges. Tenant shall be responsible for, and agrees to pay to Landlord as additional rent, prior to delinquency, any and all taxes, assessments, levies, fees and other governmental charges of every kind or nature (hereinafter collectively called "taxes") levied or assessed by municipal, county, state, federal or other taxing or assessing authority upon, against or with respect to (i) the Premises or any leasehold interest therein, (ii) all fixtures, equipment and any other property of any kind owned by Tenant or placed, installed or located within, upon or about the Premises for which the Landlord might be assessed or which might become a lien on the Premises if not paid by the Tenant, (iii) all alterations, additions or improvements of whatsoever kind or nature, if any, made to the Premises, and (iv) rentals or other charges payable by Tenant to Landlord, irrespective of whether any of the items described in clauses (i) through (iv) above are assessed as rea) or personal property, and irrespective of whether any of such items are assessed to or against Landlord or Tenant. Jr, at any time during the Term, any of such taxes are not levied or assessed separately and directly to Tenant (e,g" if the same are levied or assessed to Landlord, or upon or against the building containing the Premises and/or the land underlying the building), Tenant shall pay to Landlord Tenant's proportionate share as determined by Landlord. 2 .¡, buildings fi'om time to time constituting the Center, and/or the land thereunder, shall be that portion t eof which the number of square feet of Floor Area in the Premises bears to the total number of square feet of Floor of all buildings fi'om time to time constituting the - Center or any other fair and equitable manner as det ined by Landlord, To the extent that taxes are the obligation of Ten ant pursuant to Article VII, the same shall not ncludable in Tenant's proportionate share pursuant to this Section 5,1. The taxes payable by Tenant pursuant to t . subsection (b) which are levied or assessed for the fiscal tax year in which the Term commences and for the fiscal year in which the term of this Lease ends shall be prorated. Landlord may elect to exclude specific buildings, sepa ely assessed, form the above calculations. (c) Substitute Taxes. Should the United States of America, State of California or y political subdivision thereof or any governmental authority having jurisdiction (by way of substitution for all 0 any part of the "taxes" otherwise required to be paid in whole or in part by Tenant pursuant to this Section 5.1 or Icle VII, or in addition thereto) either (i) impose a capital levy or a tax, assessment and/or surcharge of any kind or e upon, against, in connection with or with respect to the rentals or other charges payable to Landlord by Tenant or her tenants in or occupants of the"" Center or on the income of Landlord derived fi'om the Center 0 on -. . Center revenues or on Landlord's ownership of the'- Center or any portion thereof or interest rein, or otherwise, other than on the value of real and personal property comprising the - Center, and/or (ii)' pose a tax or surcharge of any kind or nature upon, against or with respect to the parking areas or the number of par . g spaces in the. Center, then, in any such case, such tax, assessment and/or surcharge shall be deemed t constitute a tax and/or assessment against the buildings constituting the _Center, and Tenant shall pay to dlord its proportionate share thereof pursuant to this Section, as billed by Lancn¡;¡:¡¡:-- (d) Contesting Taxes. In the event Lan rd contests any taxes levied or assessed during the term hereof upon, against or with respect to the Shopping Center r any portion thereof or interest therein, Tenant agrees to pay to Landlord that proportion of all costs incurred by Lan rd in connection therewith which the number of square feet of Floor Area in the Premises bears to the total number square feet of Floor Area in the buildings fi'om time to time constituting the -- Center or any other fair and uitable manner as determined by Landlord. (e) Payment. Landlor all have the right to bill Tenant for any amount payable by Tenant to Landlord under this Section 5, I in periodic insta ents, in advance, fi'om time to time, but not more often than monthly, Landlord may so bill Tenant prior to Landlor' receipt of assessment notices and/or tax statements or bills covering any or all of the taxes payable by Tenant her nder In the event the amount of the taxes described in this Section for any fiscal tax year has not been made known and lord by the tax collector at the time of billing, Landlord shall have the right to estimate the amount thereof and to b e its billing to Tenant upon said estimated amount, and in such event Landlord agrees to adjust such billing when the act amount of such taxes is made known to Landlord by the tax collector. The failure of Ten ant to pay any tax or other ount payable directly to the taxing authority or to Landlord under this Section either prior to delinquency (in the case 0 xes payable by Tenant directly to the taxing authority) or within ten (10) days after receipt by Tenant form Lord of a statement therefor (in all other cases) shall carry with it the same consequences as Tenant's failure to pay rent all b~ d~~~'t'>f tQ 99 adåitiBR81 FEIld. ARTICLE VI. CONDUCT OF BUSINESS BY TENANT SECTION 6.1 USE OF PREMISES (a) Permitted Uses of Premises. Tenant shall continuously use and occupy the Premises during the Term, which use and occupancy shall be solely for the purposes and under the trade name specified in Items I and 2 of the Basic Lease Provisions, and for no other purposes and under no other name whatsoever without the prior written consent of Landlord, Tenant, at Tenant's expense, shall promptly comply with all present and future laws, ordinances, orders, rules, regulations and requirements of all governmental authorities having jurisdiction, affecting or applicable to the Premises or the cleanliness, safety, occupancy and use of the same, whether or not any such law, ordinance, order, rule, regulation or requirement is substantial, or foreseen or unforeseen, or ordinary or extraordinary. or shall necessitate structural changes of improvements or interfere with the use and enjoyment of the Premises. If any governmental license or permit shall be required for the proper and lawful conduct of Tenant's business or other activity carried on in the Premises, then Tenant, at its sole expense, shall duly procure and thereafter maintain such license or permit and submit the same for inspection by Landlord, (b) Restrictions on Use, Tenant shall not do or permit anything to be done in or about the Premises, nor bring anything therein, which will in any way conflict with any such law, ordinance, order, rule, regulation or requirement affecting the occupancy or use of the Premises or the Center which is or may hereafter be enacted or promulgated by governmental authorities, or in any way obstruct or interfere with the rights of others, nor shall Tenant use or allow the Premises to be used for any improper, immoral or objectionable purposes. No auction, liquidation, going out of business, fire or bankruptcy sales may be conducted in the Premises without Landlord's prior written consent. Tenant shall not permit noise or odors in the Premises which are objected to by Landlord or by any tena~t or occupa~t of the - . Center and, upon written notice from Landlord, Tenant shall immediately cease and desist from causing such noise o;-¿'dor, and failing of which Landlord may deem the same as a material breach of th~s Lease, Tena~t shall not permit the operation of any coin operated or vending machines or pay telephones on the Premises, other ~han In the ~reas reserved solely for the use of Tenant's employees. Tenant shall not use the areas adj~cent to the Prem.lses for busmess purposes. Tenant shall not use or permit the use of any portion ofthe.P~emises as sleepl~g quart~rs, lodgmg roo~s, or for any unlawful purposes. Tenant shall not install any radio or televISIon o,r ~ther ~H~lllar device to the exterior of the Premises and shall not erect any aerial on the roof or exterior walls of any bUlldmg wlthm the Center, 3 SECTION 6.2 OPERATION OF BUSINESS. Tenant agrees to conduct its business at all times in a first class and reputable manner. Tenant agrees that it will conduct it's business in good faith so as not to tend, in Landlord's opinion, to injure the reputation of the ". - Center. In the event Landlord has approved Tenant's remaining open for business after normal Center ,lour!, then such approval shall be conditioned upon Tenant's paying for all additional costs incurred by Landlord as a result thereof, Tenant shall not store anything in service or exit corridors. Tenant agrees that all receiving and delivery of goods, and all removal of supplies, equipment, trash and garbage, and all storage of trash and garbage, shall be made only by way of or in the areas provided therefor by Landlord. SECTION 6.3 CARE OF PREMISES, Tenant, at Tenant's expense, shall at all times keep the Premises (including the store front, the service areas adjacent to the Premises, show windows and signs) orderly, neat, safe, clean and ITee ITom rubbish and dirt, and shall store all tra~ge and other debris within the Premises. Tenant shall not burn any trash or garbage at any time in or about the ~ Center. Landlord may require the use of rubbish disposal contractors and of pest extermination contractors, at such Intervals as Landlord deems appropriate. If Landlord shall provide any services or facilities for rubbish pickup, then Tenant shall be obligated to use them and shall pay a proportionate share of the cost within ten (10) days after being billed. If Landlord does not provide rubbish services, Tenant shall arrange for the regular pickup of all rubbish, ARTICLE VII. COMMON FACILITIES SECTION 7.1 OPERATION AND MAINTENANCE OF COMMON FACILITIES. Landlord agrees to operate and maintain during the Term all common facilities within tb- Center and to obtain general liability insurance for personal injury, bodily injury and property damage as respects Landlord's operations in the amount as Landlord, in the exercise of its sole judgment and discretion, shall deem appropriate. The manner in which such areas and facilities shall be operated and maintained, and the expenditures therefor, shall be at the sole discretion of Landlord. All areas within the exterior boundaries of the Center which are not now or hereafter held for exclusive use by persons entitled to occupy floor space in the - renter, including, without limiting the generality of the foregoing, parking areas, driveways, truckways, delivery passages, loading docks, sidewalks, ramps, open and enclosed courts and malls, landscaped and planted areas, exterior stairways, elevators, bus stops, retaining walls, restrooms not located within the premises of any tenant, and other areas and improvements provided by Landlord for the common use of Landlord and tenants and their respective employees and invitees, shall be deemed "common facilities." However, common facilities will not include (a) the immediate entryway to Tenant's Premises, (b) the area within the building overhang directly outside of Tenant's Premises, (c) any improvements put in by Tenant outside of Tenant's Premises, whether with or without Landlord's knowledge or consent, and (d) any areas or facilities that could be considered as common areas except that said areas or facilities are included in the description of Premises leased to one or more specific tenants or shown on attached exhibits, Landlord may make changes at any time and ITom time to time in the size, shape, location, number and extent of the common facilities or any of them, and no such change shall entitle Tenant to any abatement of rent SECTION 7.2 USE OF COMMON FACILITIES, (a) Nonexclusivity. The use and occupancy by Tenant of the Premises shall include the use of the common facilities in common with Landlord and with all others for whose convenience and use the common facilities have been or may hereafter be provided by Landlord, subject, however, to rules and regulations for the use thereof as prescribed ITom time to time by Landlord, including the right of Landlord to impose parking charges. Landlord shall operate, manage, equip, light, repair, clean and maintain the common facilities in such manner as Landlord may, in its sole discretion, detel1l1ine to be appropriate, Nothing contained herein shall be deemed to create liability upon Landlord for any damage to or theft of motor vehicles of customers or employees or from loss of property from within such motor vehicles. Landlord reserves the right to utilize ftom time to time portions of the common areas for carnival type shows, rides, entertainment, outdoor shows, displays, automobile and other product shows, the leasing of kiosks, or such other uses which, in Landlord's judgment, tend to attract the public or which Landlord is required to allow by law, Further, Landlord reserves the right to utilize the lighting standards and other areas in the parking lot for advertising purposes, In no event, however, shall Tenant, its agents, or its employees use the common areas for the display or sale of merchandise. Landlord may temporarily close any common facility for repairs or alterations, to prevent a dedication thereof or the accrual of prescriptive rights therein, to discourage non-customer parking, or for any other reason deemed sufficient by Landlord, (b) Landlord's Control. Landlord shall, at all times during the Term, have the sole and exclusive control of the automobile parking areas, driveways, entrances and exits and the sidewalks and pedestrian passageways and other common facilities, and may at any time and ITom time to time during the Term restrain any use or occupancy thereof except as authorized by the rules and regulations for the use of such areas established by Landlord ITom time to time, The rights of Tenant in and to the common facilities shall at all times be subject to the rights of Landlord and the other tenants of Landlord to use the same in common with Tenant, and Tenant shall keep the facilities ITee and clear of any obstructions created or permitted by Tenant or resulting ITom Tenant's operation, If, in the opinion of Landlord, unauthorized persons are using any of the common facilities by reason of the presence of Ten ant in the~Center, Tenant, upon demand of Landlord, shall restrain such unauthorized use by appropriate proceedings, Nothing herein shall affect the right of Landlord at any time to remove any such unauthorized person ITom the common facilities or to prohibit the use of any of the common facilities by unauthorized persons, (c) Tenant and Employee Parking. * Tenant and its employees shall park their vehicles only in those portions of the parking areas from time to time designated for that purpose by Landlord. Tenant shall furnish landlord with a 1ist of its employees and their vehicle license numbers within tifteen (15) days after taking possession of the Premises, and Tenant shall thereafter notifY Landlord of any change in such list within five (5) days after such change occurs. Tenant agrees to assume responsibility for compliance by its employees with the parking provisions contained herein. If Tenant or its 'Eleven (II) monthly parking spaces shall he at no charge. All other monthly parking and validation stamps shall be at the parking rates applicahle from time to time by Landlord and/or its licensee. 4 " . employees park in other than designated parking areas, then Landlord may charge Tenant, as additional rent, Ten Dollars ($10,00) per day for each day or partial day any vehicle is parked in any part of the common facilities other than that designated. Tenant hereby authorizes Lendlord to tow away !Torn the . Center any vehicle belonging to Tenant or Tenant's employees parked in violation of these provisions, and/or to attach violation stickers or notices to the vehicle, In the event Landlord elects or is required to limit or control parking by customers or invitees of the _Center, whether by validation of parking tickets, parking meters or any other method of assessment, or any program for !Tee or reduced cost transportation, Tenant agrees to participate in such validation, assessment or transportation program under reasonable rules and regulations !Torn time to time established by Landlord. SECTION 7.3 TENANT'S SHARE OF EXPENSES ( Percentage") of all cost and expenses (the "Operati;,g Expeh'ses") incurred by Landlord in the operation, manageme , repair and maintenance of the Center (including the common facilities) during the Term, regardless ofwhe er said expenses or charges were incurred by Landlord directly in the performance of the work itself or paid by Land rd to outside contractors. Such expenses shall include, without limitation, the following: (i) expenses incurred by ndlord pursuant to Articles V (Taxes and Assessments) but applicable to common facilities, VII (Common Faci ties), IX (Maintenance), X (Insurance) and XI (Utilities) of this Lease; (ii) expenses incurred by Landlord in connect' n with the "'Center for general maintenance, gardening, landscaping, repaving, resurfacing, repairs, replacem ts, painting, lighting, cleaning, trash removal, security, fire protection and similar items; (iii) contributions toward one more reserves for repairs and replacements of those portions of the Center which Landlord is required to mtain and repair under this Lease and the actual cost of any repair or replacement in excess pfthe amount of any such serve therefor; and (iv) all charges, surcharges and other levies imposed by, and all costs (wh¿iher or not capital in natur of compliance with the requirements of any federal, state or local governmental agency regulating the Cente , and (v) fifteen percent (15%) of all Operating Expenses as reimbursement for Landlord's administrative and overhead c sts. . (b) Tenant's Expense Percentage. Te~ant's E~pense Percentage of the Operating E enses shall be the product of the sum of such expenses multiplied by a !Taction the tlumerator of which shall be the Flo r Area of the Premises and the denominator of which shall be equal to the total floor area of all buildings !Torn time time comprising the leased and occupied area in the _Center or any other fair and equitable manner as dete Ined by Landlord, For purposes of this Section, at Landlord's sole discretion, areas leased by Landlord to tenants 0 upying !Teestanding facilities in the Center and areas outside of facilities leased by Landlord under "Space" eases, but utilized by tenants under and in accordance with those leases (other than parking) shall be excluded !Torn e Floor Area of the Center. Landlord shall have the right to bill Tenant for Tenant's Expense Percentage i accordance with provisions of Article VII. SECTION 7.4 BILLING AND PAYMENT OF EXPENSE P RCENTAGE (a) Time of Payment. Tenant shall pay to Landlord (without emand), on or before the first (I") day of each calendar month of the Term, Tenant's Expense Percentage of Ope rat' g Expenses as estimated or at Landlord's option as actually incurred and billed by Landlord, either in advance or i arrears, !Torn time to time, but not more often than monthly. These items shall be deemed to be additional rent, an the failure of Tenant to pay any such installment on or before such due date, and without any deduction or offset, shal arry with it the same consequences as Tenant's failure to pay rent (b) Estimated Operating Expenses. Until paragraph (a). Tenant shall pay its monthly installm Basic Lease Provisions, nant has received its notification !Torn Landlord pursuant to ts of the estimated Operating Expenses set forth in Item 6 of the (c) Annual Adjustment. Subsequent 0 the end of each Calendar Year or fiscal year (at Landlord's option), Landlord shall lumish Tenant with a stat ent of the actual amount of Tenant's Expense Percentage of Operating Expenses for the preceding period. If th total amount paid by Tenant is less than the actual amount due !Torn Tenant, Tenant shall pay to Landlord the differe ce within ten (10) days after the date of the statement Any excess of the amount paid by Tenant over the actual amo t due from Tenant shall be credited against installments of Operating Expenses thereafter due from Tenant (d) Revised Estimates. N 1Ìng contained in this Section shall be construed to limit the right of Landlor~ !Torn time to time during any Calendar ear or fiscal year to revise its estimates of the Operating Expenses .and to (I) subml.t a revised bill to Tenant contai ng increased monthly installments to be payable by Tenant for the remamder of such period pursuant to this Section; d/or (ii) to bill Tenant for the difference between the aggregate amount. of the monthly installments for the prece ing months of the period which would have been payable by Tenant hereunder tfbased upon the revised estimates and t aggregate amount of the monthly installments for the preceding months payable by Tenant on the due date for each su installment If Landlord elects to proceed pursuant to clause (ii) of the preceding sentence, Tenant shall pay to Landlo tl the amount shown on any such bill within ten (10) days of Tenant's receipt thereof. (e) Taxe The taxes payable by Tenant to Landlord under this Section and Section 5, I which are levied or as.'essed on the fiscal x year in which the Term commenced, or which are levied or assessed for the fiscal tax year m which the Term expi s, shall be prorated. Landlord shall have the right to notify Tenant of any amount paya~le by Tenant ~o Landlor or taxes payable to Landlord in accordance with this Section. Landlord may notify Tenant pnor to Landlord s receipt f assessment notices and/or tax statements or bills covering any and all taxes.. In th~ event ,that the amount of any tax fi r any fiscal tax year is not known to Landlord at the time of any of Landlord s notices to renant, Landlord may est' late the amount and base the notice upon the estimated amount Landlord and renant shall adjust the estImated 5 ." ARTICLE VIII. ALTERATIONS, CHANGES AND ADDITIONS SECTION 8.1 INSTALLATION BY TENANT. Tenant shall not make or cause to be made any alterations, additions or improvements to the Premises (for example, but without limiting the generality of the foregoing, Tenant shall not install or cause to be installed any signs, floor covering, interior or exterior lighting, plumbing fixtures, shades, canopies or awnings, electronic detection devices, antennas, mechanical, electrical or sprinkler systems, or make any changes to the storetTont) without the prior written approval of Landlord. Tenant shall present to Landlord plans and specifications for the work at the time approval is sought. Tenant shall pay to Landlord a fee for coordination and administrative services for the alterations, additions, changes or improvements. The fee shall be based upon Landlord's then effective schedule for such fees chargeable to new tenants and shall be payable by Tenant concurrently with its submission of Working Drawings and Specifications for Landlord's approval. SECTION 8.2 REMOVAL BY TENANT. All alterations, decorations, additions and improvements made by Tenant shall be deemed to have attached to the realty and to have become the property of Landlord upon the expiration of the Term or upon the expiration of any renewal of the Term or upon sooner termination of this Lease, Tenant shall not remove any of such alterations, decorations, additions and improvements, except that trade fixtures installed by Tenant may be removed if all rents and other charges due herein are paid in full, and Tenant is not otherwise in default hereunder, and Tenant shall promptly repair any damage caused by such removal. Landlord may designate by written notice to Tenant alterations, decorations, additions and improvements which shall be removed by Tenant at Tenant's expense at the expiration or termination of the Lease, and Tenant shall promptly remove the same and repair any damage to the Premises caused by such removal. SECTION 8.3 CHANGES AND ADDITIONS BY LANDLORD. Landlord, at its sole option and discretion, hereby reserves the right at any time, and tTom time to time, to make alterations or additions to the Premises or the - Center, including, without limitation, the right to construct other buildings (including tTee-standing buildings) and improvements in the_Center, to enlarge or reduce the_Center and to make alterations ~ additions thereto, or to en~ as well as to build additional stories on any building or buildings within the- Center, to construct decks or elevated parking facilities, and to lease any part of the land comprising the _Center for the construction thereon of buildings which mayor may not be part of the Center. Landlord reserves the right at any time to relocate the various buildings, parking areas, common facilities and other areas shown on Exhibit "A", ARTICLE IX. MAINTENANCE OF LEASED PREMISES SECTION 9.1 LANDLORD'S OBLIGATIONS FOR MAINTENANCE. Landlord shall keep and maintain the roof (including the structural integrity thereof), the exterior surfaces of the exterior walls of all buildings (exclusive of doors, door frames, door checks, other entrances, windows and window tTames which are not part of common facilities. and storelronts) and the structural, electrical and mechanical systems located outside of any premises in good repair. Tenant :d.t\lIpft) L6I1àltm4 far its ~6Ftiaft 8f the east thereef 85 B flRFt sf the el-large fer GemmeR f:u:ilitie€ m:J.jRt'lP~RÇ'{" ~ Tenant shall, within five (5) days of receipt of an invoice for its proportionate share of the cost of the maintenance and/or repair, pay to Landlord the amount set forth in the invoice, In the event the amount as set forth in the invoice is not paid by Tenant within the five (5) day period, it shall be deemed additional rent, and the Landlord shall be entitled to recover said amount in accordance with all available remedies herein available to it for nonpayment of rent. Notwithstanding the above, Tenant shall be solely responsible for the costs and expenses of all repairs occasioned or necessitated by the act or negligence of Tenant, its agents, employees, invitees, licensees or contractors. Landlord may, but shall not be required to make said repairs or renovations and/or any other improvements or repairs of any kind upon the Premises and appurtenances, subject to its obligations as set forth in Articles XVll and XVIll hereof, and nothing contained in this Section 9.1 shall limit Landlord's right to reimbursement tTom Tenant for maintenance, repair costs and replacement costs conferred elsewhere in this Lease, Landlord shall have no obligation to repair until a reasonable time after the receipt of Landlord of written notice of the need for repairs, TeRaRt ....a;veo tfle ~r",'isiBRs sf SeetioR 1911 aRd 1912 sf tfle Ch il Corle sf tfle State sf Califumia aREI sf aR) sther la.. ~ef!fl;lIiRg TeRant ts mal« re~air3 It! Lanrllerd's ~. Tenant shall not make any repairs at Landlord's expense. Landlord shall provide to the premises janitorial service, Monday through Friday and replacement of light bulbs and/or fluorescent tubes and ballasts for standard overhead fixtures and Pest Control Service as reasonably required. SECTION 9.2 TENANT'S OBLIGATION FOR MAINTENANCE (a) Tenant's Items. Except as provided in Section 9, I of this Lease, Tenant, at Tenant's expense, shall keep and maintain in first class appearance, in a condition equal to or better than that which existed when Tenant initially opened the Premises for business, and in good order, condition and repair as determined by Landlord (including replacement of parts and equipment, if necessary) the Premises and every part thereof and any and all appurtenan.ces ~hereto wherever located, including, but without limitation, the interior surface of the exterior walls, the exterior and mt~rlor portIon of all doors, door frames. door checks, other entrances, windows, window frames, plate glass. storefronts, ~lg~S, all pl~mbmg and sewage facilities within the Premises, including tTee flow up to the main sewer line, fixtures, ventilatIOn, heatmg and air conditioning and electrical systems (whether or not located in the Premises), sprinkler systems, walls, floors ~nd ceilings. and all other work perforlned by or on behalf of Tenant pursuant to Se~tion 8, I hereof, and all other repaIrs, replacements, renewals and restorations, interior and exterior, ordinary and extraordinary, foreseen and unforeseen. (b) Standard of Maintenance. Tenant shall keep and maintain the Pr~mises i,n a ~Iean, sanitary and saf~ condition in accordance with the laws of the State of California and in accordance with all directIOns. rules ,and re?ul~tlO~s ,of. the health officer. fire Marshall. building inspector, or other proper officials of the governmental agenc~es havmgJurlsd,ctlon, and Tenant shall comply with all requirements of laws, ordinances and otherwise affecting the PremISes, all at the sole co~t and expense of Tenant At the time of the expiration of the tenancy created herem, Tenant shall surrender the PremISes m good order. condition and repair. 6 J¡ (c) Liens. Tenant shall keep the Premises and all other parts of the _Center free from any and all liens arising out of any work performed, materials furnished or obligations incurred by or for Tenant, and agrees to bond against or discharge any mechanic's or materialman's lien within twenty (20) days after the lien has been filed or within ten (10) days after receipt of written request fTom Landlord, whichever shall be the sooner. Tenant shall give Landlord at least fifteen (15) days written notice prior to commencing or causing to be commenced any work on the Premises (whether prior or subsequent to the commencement of lease term), so that Landlord shall have reasonable opportunity to file and post notices of nonresponsibility for Tenant's work. Tenant shall reimburse Landlord for any and all costs and expenses which may be incurred by Landlord by reason of the filing of any such liens and/or removal of same, such reimbursement to be made within ten (10) days after receipt by Tenant fTom Landlord ofa statement setting forth the amount of the costs and expenses. (d) Fire Protection Devices. Tenant, at its own expense, shall install and maintain fire extinguishers and other fire protection devices as may be required fTom time to time by any agency having jurisdiction and/or by the insurance underwriters insuring the building in which the Premises are located, (e) Air Conditioning Maintenance. Term, with such company or companies as Landlord shall approve, a contract for the monthly maintenance air of the air conditioning equipment serving the Premises, Notwithstanding the foregoing, Landlord ma y time or fTom time to time, upon written notice to Tenant, elect to provide service, maintenance and 'with respect to any air conditioning, ventilating or heating facilities and equipment which serves the Pre' . Similarly, Landlord may, at any time, elect to cease providing such service, maintenance and repair by s" Itten notice to Tenant. During any period during which Landlord elects to provide the service, mainte and repair, Tenant shall reimburse Landlord, as additional rent, for Tenant's share of Landlord's cost o[ Tenant's share of Landlord's cost thereof shall be that proportion of the total cost which the Floor 0 the Premises bears to the Floor Area of all premises served by such facilities and equipment or any oth . and equitable manner as determined by Landlord and shall be paid within ten (10) days after receipt of ord's invoices therefor. The election provided to Landlord shall include the right to employ or desi ny reputable person or firm to perform the service, repair and maintenance functions described herein, e fees and charges of any person or firm so employed or designated shall be reimbursed to Landlord in the (I) Landlord's Substitute Performance. In the event Tenant fails, refuses or neglects to commence and complete repairs promptly and adequately, to remove any lien, to pay any cost or expense, to reimburse Landlord, or otherwise to perform any act or fulfill any obligation required of Tenant pursuant to this Section 92, Landlord may, but shall not be required to do so, make or complete any such repairs, remove such lien, pay such cost or perform such act or the like without prior notice to, but at the sole cost and expense of, Tenant; Tenant shall reimburse Landlord for all costs and expenses of Landlord thereby incurred within ten (10) days after receipt by Tenant fTom Landlord of a statement setting forth the amount of such costs and expenses which shall be deemed to be additional rent and subject to the same consequences as herein provided for failure to pay rent. Landlord's rights and remedies pursuant to this subsection (I) shall be in addition to any and all other rights and remedies provided under this Lease or at law, ARTICLE X. INSURANCE AND INDEMNITY SECTION 10.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense, shall, commencing on the date Tenant is given access to the Premises for any purpose, and during the Term, procure, pay for and keep, in full force and effect the insurance described in Exhibit "B" attached hereto, SECTION 10.2 LANDLORD'S INSURANCE. (a) Types. Landlord shall provide standard "all risk" building insurance coverage, for an amount not less than 80% of the replacement cost of the building, and may, in its sole and absolute discretion, without any obligation to do so, provide "difference in conditions" forms of property insurance, business intelTUption and/or loss-of-income insurance, on the 1 Center. Notwithstanding the foregoing, Tenant shall obtain, pay for and carry such insurance as required in Section 10, I above. (b) Tenant's Allocation. . maintained by Landlord pursuant to paragraph (a) of this section, Those costs shall be a Itlonal rent, and failure to pay shall carry with it the same consequences as fail n. Notw.ithstanding any c.ontributions by Tenant to the cost of insurance premiums' to the Building or any alteratIons of the PremIses, as may be provided herein, Te ges that it has no right to receive any proceeds !Torn any such insurance policies carried b SECTION 10.3 COVENANT TO INDEMNIFY AND HOLD HARMLESS. Tenant covenants to defend and indemnify Landlord, its officers, directors, stockholders, beneficiaries, partners, representatives, agents and employees and save it harmless from and against any and all claims, actions, damages, liability and expenses, including attorne~s' fees in connection with loss of life, bodily injury and/or damage to property arising fTom or out of any occurrence 10, upo~ or at the Premises. or the occupancy or use by Tenant of the Premises or any part thereof, or ~rising !Torn or out of Tenant's failure to comply with any provisions of this Lease or otherwISe occasIoned wholly or 10 part by any act or omission of Tenant, its agents, representatives, contractors, employees, servants, customers or licensees" For the purpose of this Section 10.3. the Premises shall include the common facilities adjoining the same and the loadmg platfo.~ area allocated to the use of Tenant. In case Landlord shall, without fault on its part, be made a party to any lItIgatIOn commenced by or against Tenant. then Tenant shall protect and hold Landlord harmless and shall pay all costs, .expenses and reasonable attorneys' fees incurred or paid by Landlord in connection with such litigation. Landlord may, at Its 7 " option, require Tenant to assume Landlord's defense in any action covered by this Section through counsel satisfactory to Landlord, Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises /Torn any cause whatsoever and Tenant hereby waives all its claims in respect thereof against Landlord except that which is caused by failure of Landlord to observe any of the terms and conditions of this Lease and such failure has persisted for an unreasonable period of time after written notice of such failure. SECTION 10.4 EXEMPTION OF LANDLORD. Landlord shall use its best efforts to conduct its activities with respect to the Premises in a prudent and businesslike manner. However, Landlord shall not be liable for any damage to property entrusted to employees of Landlord, its partners or agents. nor for loss of or damage to any property by theft or otherwise. Landlord shall not be liable for injury, damage or loss of business which may be sustained by the person, goods, wares, merchandise or property of Tenant, its employees, invitees or customers or any other person in or about the Premises caused by or resulting /Torn, but not limited to, fire, stearn, electricity, gas, water or rain, which may leak or flow /Torn or into any part of the Premises, or /Torn the breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures of the same, whether the injury, damage or loss of business results /Torn conditions arising upon the Premises or upon other portions of the building of which the Premises are a part, or /Torn other sources. Landlord shall not be liable for interference with the light or other incorporeal hereditaments, Tenant shall give prompt notice to Landlord in case of fire or accidents in the Premises or in the- Center or of defects therein or in the fixtures or equipment. Landlord shall not be liable for any damages arising /Torn any act or neglect of any other tenant of the"Center. SECTION 10.5 WAIVER OF SUBROGATION. Each party hereto does hereby waive, remise, release and discharge the other party hereto and any officer, director, shareholder, beneficiary, partner, agent, employee or representative of such other party, of and /Torn any liability whatsoever hereafter arising from loss, damage or injury for which property insurance (fire and allied perils) containing a waiver of subrogation is carried by the injured party at the time of such loss, damage or injury, to the extent of any recovery by the injured party under such insurance. Tenant shall, upon obtaining the policies of insurance required hereunder, give notice to the insurance carrier or catTiers that the foregoing mutual waiver of subrogation is contained in this Lease. ARTICLE XI. UTILITY CHARGES SECTION 11.1 UTILITY CHARGES. Tenant shall pay all initial deposits and fees, and all monthly service charges for water, electricity, sewage, gas, telephone and any other utility services furnished to the Premises and the improvements thereon during the entire term of this Lease. In the event any such services are not separately metered or billed to Tenant but rather are billed to and paid by Landlord, Tenant shall pay to Landlord its pro rata share of the cost of such services, as determined by Landlord, together with its pro rata share of the cost of making such determination, Landlord shall not be liable for any reason for any loss or damage resulting from an interruption of any of the above services. ARTICLE XII. OFF-SET STATEMENT, ATTORNMENT AND SUBORDINATION SECTION 12.1 OFF-SET STATEMENT. Tenant shall, at any time and from time to time upon not less than ten (10) days' prior written notice /Torn Landlord, execute, acknowledge and deliver to Landlord a statement in writing (a) certifying that this Lease is unmodified and in full force and efTect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the dates to which the Minimum Rent and other charges are paid in advance, if any, without any offset or defense thereto and (b) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specitying the defaults if any are claimed, Any statement may be relied upon by any prospective purchaser or encumbrancer of the Premises or of all or any portion of the real property of which the Premises are a part, Tenant's failure to deliver such statement within such time shall be conclusive upon Tenant (i) that this Lease is in full force and effect, wIthout modIfication except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, and (iii) that not more than one month's Minimum Rent has been paid in advance. SECTION 12.2 ATTORNMENT. In the event any proceedings are brought for the foreclosure of, or in the event of tile conveyance by deed in lieu of foreclosure, or in the event of exercise of the power of sale under, any mortg~ge and/or deed of trust made by Landlord, covering the Premises, or in the event Landlord sells, conveys or otherwISe transfers its interest in the_Center or any portion thereof containing the Premises, Tenant hereby attorns to, and covenants and agrees to execute an mstrument in writing reasonably satisfactory to the new owner whereby Tenant attorns to, the successor in interest and recognizes the successor as the Landlord under this Lease, SECTION 12.3 SUBORDINATION. Tenant agrees that this Lease shall, at the request of the Landlord, be subordinate to any mortgages or deeds of trust that may hereafter be placed upon the Premises a~d to any and all advances to be made thereunder and to the interest thereon, and all renewals, replacements and extensIons thereof, provIded the mortgagees or benefici~ries named in said mortgages or trust deeds shall agree to recognize the interest of Tenant under this Lease in the event of foreclosure, if Tenant is not then in default. Tenant also agrees that any mortgagee or beneficiary may elect to have this Lease constitute a prior lien to its mortgage or deed of ~rust, and, In the event of su.ch election and upon notification by such mortgagee or beneficiary to Tenant to that effect, thIs Lease shall be deemed prtor in lien to such mortgage or deed of trust, whether this Lease is dated prior to or subsequent to th~ date of said mortgage ~r deed of trust. Tenant agrees that upon the request of Landlord, or any mortgagee or beneficiary, Tenant shall execu e whatever instruments may be required to carry out the intent of this Section. 8 SECTION 12.4 APPOINTMENT OF LANDLORD AS ATTORNEY-iN-FACT. Tenant hereby irrevocably appoints the Landlord as its attorney-in-fact for Tenant with full power and authority to execute and deliver in the name of Ten ant any of the statements set forth in Sections 12.1 through and including 123 SECTION 12.5 REMEDIES. Failure of Tenant to execute any statements or instruments necessary or desirable to effectuate the foregoing provisions of this Article, within ten (l0) days after written request to do so by Landlord, shall constitute a breach of this Lease. In the event of such a failure, Landlord, in addition to any other rights or remedies it might have (including its right to act as attorney-in-fact for the Tenant), shall have the right, by not less than ten (10) days written notice to Tenant to declare this Lease terminated and the Term ended, in which event this Lease shall cease and terminate on the date specified in the notice; upon the termination Tenant shall vacate and surrender the Premises, but shall remain liable as provided in this Lease. ARTICLE XIII. ASSIGNMENT AND SUBLETTING SECTION 13.1 NO ASSIGNMENT AND SUBLETTING. (a) Landlord's Consent Required. Notwithstanding any provision herein to the contrary or reference herein to Concessionaires or subtenants or otherwise, Tenant agrees and covenants (which covenants shall run for the term of this Lease and be binding upon the heirs, executors, and administrators of Tenant) that Tenant will not, either voluntarily or by operation of law, assign, sell, encumber, pledge or otherwise transfer all or any part of Tenant's leasehold estate hereunder, or permit the Premises to be occupied by anyone other than Tenant or Tenant's employees, or sublet the Premises or any portion thereof, without Landlord's prior written consent in each instance, No assignment, whether voluntary or involuntary, by operation of law, under legal process or proceedings, by receivership, in bankruptcy, or otherwise, (except as herein made pursuant to Section 182 (i) and no subletting shall be valid or effective without such prior written consent and at Landlord's election, shall constitute a default To the extent not prohibited by provisions of the Bankruptcy Code, II U.S,C Section 101 et seq, including Section 365 (I) (i) thereof, Tenant on behalf of itself, creditors. administrators and assigns waives the applicability of Sections 541 (c) and 365 (e) of the Bankruptcy Code of 1978 unless the proposed assignee of the Trustee for the estate of the bankrupt meets Landlord's standard for consent as set forth in Section 13.1 (c) of this Lease, Landlord has entered into this Lease with Tenant in order to obtain for the benefit of the - Center the unique attraction of Tenant's trade name and the unique merchandising mix and product line associated with Tenant's business: the foregoing prohibition on assignment or subletting is expressly agreed to by Tenant in consideration of such fact If this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code, II U.s,C. Section 101 et seq. (the "Bankruptcy Code"), any and all monies or other considerations payable or otherwise to be delivered in connection with such assignment shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord and shall not constitute property of Ten ant or of the estate of Ten ant within the meaning of the Bankruptcy Code, Any and all monies or other considerations constituting Landlord's property under the preceding sentence not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and be promptly paid or delivered to Landlord, Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code, II U,S.C Section 101 et seq., shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment Any such assignee shall, upon demand, execute and deliver to Landlord an instrument confirming such assumption. (b) Change in Status of Tenant. If Tenant or Tenant's Guarantor, if any, is a corporation which, under the then current guidelines published by the Commissioner of Corporations of the State of California, is not deemed a public corporation, or is an unincorporated association or partnership, the sale, transfer, assignment, issuance or hypothecation of any stock or interest in such corporation, association or partnership which results in a change in the voting control of Tenant or Tenant's Guarantor, ifany, shall be deemed an assignment within the meaning and provisions of this Article. In addition, any change in the status of the entity, such as but not limited to withdrawal of a general partner, shall be deemed a prohibited assignment within the meaning of this Article, Any such prohibited act by Tenant or Tenant's Guarantor (or any attempt at same), either voluntarily or involuntarily or by operation of law or otherwise, shall, at Landlord's option, terminate this Lease, and any purported act shall be null and void, The voluntary or other surrender of this Lease by Tenant, or mutual cancellation thereof, shall not work a merger and shall, at the option of Landlord, terminate all or any existing franchises, concessions, licenses, permits, subleases, subtenancies, departmental operating arrangements or the like, or may, at the option of Landlord, operate as an assignment to Landlord of the same, Nothing contained elsewhere in this Lease shall authorize Tenant to enter into any fTanchise, concession, license, permit, subtenancy, departmental operating arrangement or the like except pursuant to the provisions of this Article. (c) Standard for Consent. If Tenant desires at any time to assign this Lease or to sublet the Premises or any portion thereof, it shall first notifY Landlord of its desire to do so and shall submit in writing to L~ndlord: (i) the. name ?f the proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's business to be camed on In the Premises; (iii) the terms and provisions of the proposed sale, transfer or sublease of Tenant's business and leasehold interest, including the price, rent and terms of payment; (iv) any other information required by Landlord;. and (v) .an application fee of $200,00. Landlord shall not unreasonably withhold its consent provided: (I) use of P.remlSes remains the same as stated in Item 2 of the Basic Lease Provisions (unless Landlord, for reasonable cause, decides that the use and/or the location of the use is incompatible with Landlord's present or future plans for operation of the Center): (2) Minimum Rent is adjusted to the greater of market rent or present Minimum Rent as increased by the "Consumer Price Index" as defined and applied in Section 2.2; (3) percentage rent is adjusted to the current rate presently being negotiated by major developers such as Landlord for the same or similar type of business in the area and all other economic aspects such as, but not limited to, insurance requirements, taxes and common facIlities char~e~ are bro~ght into confornlity with Landlord's current lease; (4) proposed subtenant or assignee demonstrates that. It IS financially responsible by submission to Landlord of such reasonable information as Landlord may request conce~mg the proposed subtenant or assignee, including, but not limited to, a balance sheet of the proposed subtenant or assignee as of a date within ninety (90) days of the request for Landlord's consent and statements of income or profit and loss of the proposed 9 jl- subtenant or assignee for the two-year period preceding the request for Landlord's consent; (5) proposed subtenant or assignee demonstrates a record of successful experience in operating the same type of business by submission to Landlord of such reasonable information as Landlord may request concerning the proposed subtenant or assignee, including, but not limited to, a written statement in reasonable detail as to the business and retail merchandising experience of the proposed subtenant or assignee during the five (5) years preceding the request for Landlord's consent; and (6) proposed subtenant or assignee has a reputation for honesty and is of good moral character. (d) Landlord's Fee. Tenant agrees to reimburse Landlord for Landlord's reasonable costs and attorney's fees incurred in connection with the processing and documentation of any such requested assignment, subletting, transfer, change of ownership or hypothecation of this Lease or Tenant's interest in and to the Premises less an application fee of $200.00, (e) Tenant Remains Obligated. No subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its obligation to pay the rent and to perform all of the other obligations to be performed by Tenant hereunder. The acceptance by Landlord of any payment due hereunder ITom any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any assignment or subletting, Consent by Landlord to one or more assignments of this Lease or to one or more subletting of the Premises shall not operate as a waiver or estoppel to the future enforcement by Landlord of its rights pursuant to the provisions of this Lease. (I) No Right of Tenant to Re-Enter Premises. In the event of an assignment, the Tenant, absent written authorization ITom the Landlord, shall not have any right to re-enter the Premises upon the default of an assignee in any of the conditions or obligations of the Lease and/or sale of the business to the assignee. ARTICLE XIV. WASTE SECTION 14.1 WASTE OR NUISANCE. Tenant shall not commit or sutTer to be committed any waste upon the Premises, and shall not place a load upon any floor of the Premises which exceeds the floor load per square foot which such floor w~\designed to carry, Tenant shall not commit or sutTer to be committed any nuisance or other act or thing which may dlSt'urb the 'quiet ellJoyment of any other occupant of the- Center. Tenant shall not use or permit to be used any medium that might constitute a nuisance, such as loud speakers, sound amplifiers, phonographs, radios, televisions, or any other sound producing or other device which will carry sound or odors outside the Premises. Tenant agrees that business machines and mechanical equipment used by Tenant which cause vibration or noise that may be transmitted to the building or buildings comprising the Center, to such a degree as to be reasonably objectionable to Landlord or to any occupant shall be placed and maintained by Tenant at its expense in setting of cork, rubber or spring-type vibration isolators sufficient to eliminate such vibrations or noise, ARTICLE XV. SIGNS; ADVERTISING; PROMOTIONAL CHARGES SECTION 15.1 SIGNS; ADVERTISING. Tenant shall affix a sign (restricted solely to Tenant's trade name as set forth in Item I of the Basic Lease Provisions or such other name as may be consented to in advance, in writing, by Landlord) to the exterior surface of the storefront of the Premises or such other location as specified by Landlord and shall maintain the sign in good condition and repair during the entire Term, Said sign shall conform to the criteria for signs established by Landlord and the governmental body or agency having jurisdiction and authority to regulate or control these matters. The size, content, design and location thereof shall be subject to the prior written approval of Landlord, Except as hereinabove mentioned, Tenant shall not place or cause to be placed, erected or maintained on any exterior door, wall, window or the roof of the Premises, or on the glass of any window or door of the Premises, or on any sidewalk or other location outside the Premises, or within any display window space in the Premises, or within five (5) feet of the front of the storefront leaseline, whether or not there is display window space in the Premises, or within any entrance to the Premises, any sign, decal, placard. decoration, flashing, moving or hanging lights, lettering, or any other advertising matter of any kind or description; if Tenant places or causes to be placed or maintained any of the foregoing, the same may be removed by Landlord or Landlord's representative without notice and without such removal constituting the breach of this Lease or entitling Tenant to claim damages on account thereof. No symbol, design, name, mark. or i~signia ~dopted by Landlord for the Shopping Center shall be used without the prior written consent ofLa~dlord, No Illumm~ted SIgn located in the interior of the Premises which is visible ITom the outside shall be permitted wIthout the pnor wrItten approval of Landlord, All signs located in the interior of the Premises shall be in good taste so as not to detract ITom the general appearance of the Premises and Center. Tenant shall not, without the prior wri~en aFPro~al of Lan~lord, display or sell merchandise in or otherwise obstruct, any area oUl;'i.de of the P.remlSes, n?r sohclt b~Slness m the parkmg or other common areas, nor distribute any hand bills or other advertlSmg matter m the parkmg area or In other common areas. SECTION 15.2 ADVERTISED NAME AND ADDRESS. Tenant shall use the name of the I Center as its advertised business address, Tenant shall not use the name of th<;Í Center for any purpose othe~ tha~ as the address of the business to be conducted by Tenant in the Premises, and Tenant shall not acqUIre any property nght In or tl' any name which contains said word combination as a part thereof. Any permitted use by Tenant of the name of the -- Center during the term of this Lease shall not permit Tenant to use, and Tenant shall not use, such words eIther ~tennination of this Lease or at any other location. In addition, Tenant agrees (8) to operate Its bus mess I~ t~e Premises under the name stated in Item I of the Basic Lease Provisions so long as such name shal~ not be held to, e In violation of any applicable law and (b) not to change the advertised name or character of the business operated In the Premises without the prior written approval of Landlord. 10 SECTION 15.3 PROMOTIONAL CHARGES (6) PI ömötiönal ftlud. In tl., ",.<:1.1 1':11,[, ~1..:..",hu..t,],' '\~-,v...iM:v.. ".......t;v....,d :.. (b) b...lvn """"u.:>",.3 Lv ",^;;)l VI rUlld;v . Landlord may provide or cause to provide a program of advertising or promotional events which, in Landlord's s Ie judgment, will serve to promote the Shopping Center, Landlord shall be compensated, out of promotional ch ges collected by Landlord ITom tenants during each year for promotional services provided, in an amount equal to twe -five percent (25%) of the promotional charges collected, on a non-cumulative basis. In no event shall Landlord be obI' ated to expend more than is actually collected from tenants. Any promotional services and personnel so provided shal under the exclusive control and supervision of Landlord, who shall have the sole authority to employ and discharg personnel. Tenant agrees to pay to Landlord as Tenant's share of the cost of said advertising and promotional progr an amount billed by Landlord monthly to Tenant based upon the same method of calculation of Tenant's share of co mon facilities expenses as set forth in Section 73 above. Said promotional charges shall be deemed additional rent, d the failure of Tenant to pay same within five (5) days after being billed therefor, and without deduction or offset, sh carry with it the same consequences as Tenant's failure to pay rent Landlord may elect to terminate such program at time. A (b) .' h .. - . (Merchants' Association) is the stablished Merchants' SSoctatlon at t e Shoppmg Center. Tenant shall forthwith become a member thereof and wil aintain membership in good standing and will abide by the Bylaws and regulations and cooperate in the activities of s h Association throughout the term of this Lease and any extensions or renewals hereof. The Bylaws of the Merchants' ssociation may be amended ITom time to time in accordance with the procedure set forth therein, in which even said amendments shall take precedence over existing Bylaws of the Merchants' Association. (i) The purposes of the Merchants' Association is to encourage its memb to deal fairly and courteously with their customers, to follow ethical business practices, and to assist the business 0 its members by sales promotions and centerwide advertising, and to obtain a comprehensive general liability policy co ring bodily injury and properry damage liability on behalf of the Association and its members naming the Landlord as n additional insured. Said policy shall be of the same type, form and issued by a company in accordance with the iterion set forth in Article X. The policy evidencing insurance required to be carried by the Merchants' Association hall contain a provision that the insurer will not cancel, or materially change the coverage provided by such policy wit out first giving Landlord thirty (30) days' prior written notice. In the event that the Merchants' Association fails to rocure, maintain and/or pay for any insurance required, Landlord may (but without obligation to do so) at any time or ITom time to time, and without notice, procure such insurance and pay the premiums therefor, in which event andlord shall charge members of the Merchants' Association individually for their pro-rata share of said ¡nsuran e premiums and any costs or expenses inculTed by Landlord in connection therewith, and Tenant shall repay to La lord within five (5) days following Landlord's written demand to Tenant for such payment (ii) Nothing in the Bylaws or regulations of the id Association shall be in conflict with the provisions of this Lease or in any way shall affect the rights of Landlord, he provisions of this Section 15,3(b) shall be deemed to be covenants for the benefit of Landlord and said Associa on and shall be enforceable by each of them. Notwithstanding anything to the contrary in the Bylaws or Articles of I corporation of the Association, Tenant agrees that Landlord may, subject to any rights of other members of the Ass ciation, terminate the Association, and the provisions of Sections 15.3(a) shall then apply, at the election of Landlord (iii) Any payments, charges, dues Of assessments imposed upon the Tenant by the Merchants' Association in accordance with the provisions and Bylaws 0 aid association, together with any adjustments thereto remaining unpaid at the end of any installment period may be a igned to the Landlord by said association. The Landlord may, but shall be under no obligation to do so, accept said signment and provide written notice to Tenant of said election, In such event, the accrued dues, payments, charges or er items as adjusted, together with any promotional charges shall be deemed to constitute additional rent which, in the vent of nonpayment thereof, shall be subject to the same remedies as are available to Landlord for the collection of the asic minimum rent as set forth in Article XVlll. The election as provided above shall not be exclusive, and all ot r remedies available to the Landlord and/or association for the collection of the association dues and/or promotio I charges shall still be available and enforceable, Other Provisions. (i) lhe amount 0 the annual promotional charge/Merchants' Association dues payable by Tenant pursuant to Section 15.3 (a) or (b) wil e set annually, an is subject to interim adjustment Such promotional charges specified in (a) and (b) above may be in eased, and other promotional charges may be assessed by Landlord as is reasonably necessary, ITom time to time, (c) (ii) In 0 er to implement the various promotional programs, Tenant agrees and covenants to comply with instructions from andlord as to the hours of operation during which said Premises shall be open for business. Tenant's compliance wit said hours of operation as set forth either by letter or rules promulgated by Landlord shall be d~emed a material covel t and provision of this Lease agreement and subject to enforcement in the event of noncomphance as provided in rticle XVIII. (iii) All payments, charges, dues and assessments payable under this Section 15.3 shall be due and payable in month I installments on the first day of each month or as otherwise specified to tenant during the Tenn an,d. l.n all cases shall e paid without deduction or olTset Failure by Tenant to pay any such sums when due shall carry wIth It the same . t II ARTICLE XVI. DAMAGE TO LEASED PREMISES SECTION 16.1 RECONSTRUCTION OF DAMAGED PREMISES OR TERMINATION OF LEASE. (a) Reconstruction of Premises. In the event the Premises shall be partially or totally destroyed by fire or other casualty insured under the insurance carried by Landlord pursuant to Section 102 of this Lease as to become partially or totally untenable, then the damage to the Premises shall be promptly repaired unless Landlord shall elect not to rebuild as hereinafter provided. In the event the Premises become partially or totally untenable, the Minimum Annual Rent and other charges payable by Tenant to Landlord for the period during which such damage, repair or restoration continues shall be abated in proportion to the ratio of the Floor Area of the Premises rendered untenable to the total Floor Area of the Premises, Payment offull rental and all other charges so abated shall commence and Tenant shall be obligated to reopen for business on the thirtieth (30th) day following the date that Landlord advises Tenant that the Premises are tenantable, unless Tenant opens at an earlier time or remains open following destruction or damage. Landlord shall be obligated to cause such repairs to be made '. " . event Tenant shall promptly complete the s';'e and Landlord ~iIl make available to Tenant for the sole ~u e of reconstruction of Tenant's improvements such portion of any insurance proceeds received by Landlord ffo . insurance carrier, under a policy carried pursuant to Section 102 of this Lease, allocated to the Premises by L rd. In the event of any such reconstruction by Tenant, an architect duly registered in the State of California shall elected and appointed by Tenant to prepare any necessary drawings and specifications and to supervise the work direct the payment of such insurance proceeds, Such insurance proceeds shall be payable to Tenant only upo ificates of said architect stating that the payments specified therein are properly payable for the purpose of rei rsing Tenant for expenditures actually made by Tenant in connection with such work. At the election of Landlor andlord's mortgagee, direct payments may be made to material suppliers and laborers upon written certificati y said architect that such payments are due and payable. Any such insurance proceeds in excess of Tenant's ual expenditures in restoring the damage or destruction shall belong to Landlord, In making repairs, restoratio reconstruction. Tenant, at its expense, shall comply with all laws, ordinances, and governmental rules and regu 'ons and shall perform all work or cause such work to be performed with due diligence and in a first-class man. All permits required in connection with said repairs, restoration and reconstruction shall be obtained by Te at Tenant's sole cost and expense. Any amount expended by Tenant in excess of insurance proceeds received b and lord and made available to Tenant shall be the sole obligation of Tenant In the event of reconstruction or r r by Landlord, any amount expended by Landlord in repairing the Premises in excess of the proceeds of insuranc ceived by Landlord pursuant to Section 102 of this Lease allocated to the Premises shall be repayable by T t to Landlord within ten (10) days after receipt by Tenant ffom Landlord of a statement setting forth the amou such excess, The party required hereunder to repair the damage to the Premises shall reconstruct such Pre' s in accordance with the Working Drawings and Specifications originally approved by Landlord or (at Landlord's - . In no event shall Landlord be required to repair or replace Tenant's merchandise, trade fixtures, furnishings or equipment If either party repairs or restores the Premises pursuant to the provisions of this Article, Tenant shall continue the operation of its business in the Premises to the extent reasonably practicable ffom the standpoint of prudent business management, and the Minimum Rent payable hereunder for the period during which such damage, repair or restoration continues shall be abated in proportion to the degree to which the Premises are rendered untenable, There shall be no abatement of the Percentage Rent payable hereunder, and Tenant shall have no claim against Landlord for any damage suffered by Tenant by reason of any such damage, destruction, repair or restoration. In no event shall Landlord be required to repair or replace any of Tenant's property, including, but not limited to, Tenant's leasehold improvements, merchandise, trade fixtures, furnishings or equipment. Upon completion of such repair or restoration, Tenant shall promptly refixture and restock the Premises substantially to the condition prior to the casualty and shall reopen for business if closed by the casualty. Notwithstanding the above, Landlord shall repair as soon as practical all damages to tbe premises wbich result from causes attributable to Landlord. (b) Landlord's Option to Terminate Lease. If (i) more than thirty-five percent (35%) of the Floor Area of the building in which the Premises are located shall be damaged or destroyed by fire or other casualty, or (ii) during the last three (3) years of the term hereof, more than ten percent (10%) of the Floor Area of the Premises or of the building in which the Premises are located shall be damaged or destroyed by fire or other casualty, or (iii) all or any part of the _Center or the building or the Premises are damaged or destroyed at any time by the occurrence of any risk not ~red under the standard form of fire and extended coverage policy then in use in Orange County, Californi~, then Landlord may elect either to repair or rebuild the building and/or Premises, ,as the case m~y be, or, at ItS. sole OptIO~, to tenninate this Lease by giving written notice to Tenant of Landlord's electIOn to so tennmate, such notice to be g~ven within ninety (90) days after the occurrence of such damage or destruction, If Landl~rd is required or elects to. repair or rebuild, Tenant, at Tenant's sole cost, shall repair or replace Tenant's leasehold Improvements, merchandIse, tr~de fixtures, furnishings and equipment in a manner and to at least a condition equal to that prior to the damage or destructIon thereof ARTICLE XVII. EMINENT DOMAIN SECTION 17.t TOTAL CONDEMNATION OF LEASED PREMISES. If the whole of the Premises shall be taken by any public authority under the power of eminent domain or sold to public authority under threat or i~ lieu of such a taking, except for a taking for a temporary use, then the term of this Lease shall cease as of the day possessIon shall be taken by such public authority, and the rent and other charges shall be paid up to that day with a proportionate refund by Landlord of such rent and other charges as may have been paid in advance for a period subsequent to the date of the taking, 12 " SECTION 17.2 PARTIAL CONDEMNATION. (a) More Than 20% of Premises or More Than 50% of Common Facilities. Ifmore than twenty percent (20%) of the Premises or more than fifty percent (50%) of the common facilities shall be taken under eminent domain, or sold to p~blic authori~ unde~ threat or in lieu of such a taking, except for a taking for a temporary use, Tenant shall have the right elth~r to terminate thIS Lease and declare the same null and void as of the day possession is taken by public authority, or, subject to Landlord's right of termination as set forth in Section 172 (c) of this Article, to continue in the possession of the remainder of the Premises, upon notifÿing Landlord in writing within ten (10) days after the taking of Tenant's intention. In the event Tenant elects to remain in possession, all of the terms herein provided shall continue in effect, except that as of the day possession is taken by public authority, the Minimum Rent shall be reduced in proportion to the amount of the Premises taken. Thereafter, Landlord shall, at its own cost and expense, make all the necessary repairs or alterations to the building, so as to constitute the remaining Premises a complete architectural unit, and Tenant, at Tenant's sole cost, shall similarly act with respect to Tenant's improvements, trade fixtures, furnishings and equipment (b) 20% or Less of Premises. Except for a taking for a temporary use, if twenty percent (20%) or less of the Premises shall be taken, the Term shall cease, only on the part so taken, as of the day possession shall be taken by such public authority, and Tenant shall pay rent up to that day, with appropriate refund by Landlord of such rent as may have been paid in advance for a period subsequent to the date of the taking; and thereafter the Minimum Rent shall be reduced in proportion to the amount of the subject leased Premises taken, Landlord shall, at its expense, make all necessary repairs or alterations to the building, so as to constitute the remaining Premises a complete architectural unit, and Tenant, at Tenant's sole cost, shall similarly act with respect to improvements, trade fixtures, furnishings and equipment (c) More Than 50% of Premises or 30% of Building, or Common Facilities. If more than fifty percent (50%) of the Premises or thirty percent (30%) of the building in which the Premises are located, or more than thirty percent (30%) of the entire - Center, or more than thirty percent (30%) of the common facilities, shall be taken under power of eminent domain, or sold to public authority under threat or in lieu of such a taking, except for taking for a temporary use, Landlord may, by written notice to Tenant delivered on or before the tenth (lOth) day following the date of surrendering possession to the public authority, terminate this Lease as of the day possession is taken by public authority, The rent shall be paid up to the day possession is taken by public authority, with an appropriate refund by Landlord of such rent as may have been paid in advance for a period subsequent to that date. (d) Sale by Landlord. A sale by Landlord to any authority having the power of eminent domain, either under threat of condemnation or while condemnation proceedings are pending, shall be deemed a taking under the power of eminent domain for all purposes under this Article. (e) Temporary Taking. If there is a taking of the Premises for temporary use for a period not to exceed thirty (30) days, this Lease shall continue in full force and effect, and Tenant shall continue to comply with Tenant's obligations under this Lease, except to the extent compliance shall be rendered impossible or impracticable by reason of the temporary taking. SECTION 17.3 LANDLORD'S AND TENANT'S DAMAGES. All damages awarded for such taking under the power of eminent domain or proceeds from any sale under threat or in lieu of such a taking, whether for the whole or a part of the Premises, shall belong to and be the property of Landlord, irrespective of whether such damages shall be awarded or proceeds obtained as compensation for diminution in value to the leasehold or the leasehold improvements thereto, or to the fee of the Premises, and Tenant shall have no claim against either Landlord or the condemning authority with respect thereto; provided, however, that Landlord shall not be entitled to any award specifically designated as compensation for depreciation to, and cost of removal of, Tenant's stock and fixtures. ARTICLE XVIII. DEFAULTS; REMEDIES SECTION 18.'1 DEFAULTS. The occurrence of any one or more of the following events shall constitute a default and breach of the Lease and the covenants and obligations of Tenant herein undertaken: (a) Abandonment. The abandonment of the Premises by Tenant Abandonment is herein defined to include, but is not limited to, any absence by Tenant from the Premises for five (5) days or longer while in default of any provision ofthis Lease. (b) Failure to Pay. The failure by Tenant to make any payment of rent, additional rent or other payment required to be made by Tenant hereunder, as and when due, or the failure of Tenant to observe the minimum hours of operation established by Landlord, where such failure shall continue for a period of three (3) days after written notice thereof from Landlord to Tenant as required under California Code of Civil Procedure Sections 1161 and 1161(a), as amended. For purposes of this subsection (b) Tenant shall not be deemed to have cured a default resulting from Tenant's failure to observe the minimum hours of operation established by Landlord if Tenant shall, at anytime within sixty (60) days of any purported cure, again fail to observe such minimum hours of operation. (c) Nonmonetary Defaults. The failure by Tenant to observe or perform any of the express or implied covenants or provisions of this Lease to be observed or performed by Tenant, other than as specified in (a) or (b) abo,:e, where such failure shall continue for a period of five (5) days after written notice thereof from Landlord to Tenant; provIded, however, that any such notice shall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Sections 1161 and 1161 (a), as amended; provided further, that if the nature of Tenant's default IS such that more than five (5) days are reasonably required for its cure, then Tenant shall not be deemed to be in default if Tenant 13 " shall commence such cure within said five (5) day period and thereafter diligently prosecute such cure to completion, Except as provided above, if Tenant shall fail to move into the Premises and to open for business on the Term Commencement Date, or fail continuously to operate in the manner and during the hours established by Landlord pursuant to Section 6.2 hereof or for the purpose specified in Section 6.1 hereof, or if Tenant shall abandon the Premises, or permit this Lease to be taken under any writ of execution or similar writ or order, then Landlord, besides other rights or remedies it may have under this Lease or by law, shall have the right to immediately terminate this Lease and Tenant's right to possession of the premises by giving Tenant written notice that this Lease is terminated. (d) Bankruptcy. Tenant's (i) application for, consent to, or suffering of, the appointment of a receiver, trustee or liquidator for all or for a substantial portion of its assets; (ii) making a general assignment for the benefit of creditors; (iii) admitting in writing its inability to pay its debts or its willingness to be adjudged a bankrupt; (Iv) becoming unable to or failing to pay its debts as they mature; (v) being adjudged a bankrupt; (vi) filing a voluntary petition or suffering an involuntary petition under any bankruptcy, arrangement, reorganization or insolvency law (unless in the case of an involuntary petition, the same is dismissed within thirty (30) days of such filing); (vii) convening a meeting of its creditors or any class thereof for purposes of effecting a moratorium, extension or composition of its debts; or (viii) suffering or permitting to continue unstayed and in effect for ten (10) consecutive days any attachment, levy, execution orseizure of all or a substantial portion of Tenant's assets or of Tenant's interest in this Lease. (a) SECTION 18.2 REMEDIES General. In the event of any default by Tenant, Landlord may: (i) Terminate Tenant's right to possession of the Premises by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the premises to Landlord. In such event, Landlord shall be entitled to recover t{om Tenant: '. (I) The worth at the 'time of award of the unpaid rent and additional rent which had been earned at the time of tennination; (2) The worth at the time of award of the amount by which the unpaid rent and additional rent which would have been earned after termination until the time of award exceeds the amount of such loss that Tenant proves could have been reasonably avoided; (3) The worth at the time of award of the amount by which the unpaid rent and additional rent for the balance of the Tenn after the time of award exceeds the amount of such loss that Tenant proves could be reasonably avoided; and (4) Any other amount deemed necessary and/or allowable by applicable statute or decision to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which, in the ordinary course of events, would be likely to result theretTom, including, but not limited to, the cost of recovering possession of the Premises, expenses of reletting, including necessary repair, renovation and alteration of the Premises, reasonable attorneys' fees, and any other reasonable costs. The "worth at the time of award" of the amounts referred to in subparagraphs (I) and (2) above shall be computed by allowing interest at the maximum legal rate permitted by law from the dates such amounts accrued to Landlord. The worth at the time of award of the amount referred to in subparagraph (3) above shall be computed by discounting such amount at one (I) percentage point above the discount rate of the Federal Reserve Bank of San Francisco at the time of award. (ii) Without terminating or affecting a forfeiture of this Lease or otherwise relieving Tenant of any obligation hereunder. in the absence of express written notice of Landlord's election to do so, Landlord may, but need not, relet the Premises or any portion thereof at any time or from time to time and for such tenns and upon such conditions and rental as Landlord in its sole discretion may deem propeL Whether or not the Premises are relet, Tenant shall pay to Landlord all amounts required by Tenant hereunder up to the date that Landlord terminates Tenant's right to possession of the Premises, Such payments by Tenant shall be due at the times provided in this Lease, and Landlord need not wait until the termination of this Lease to recover them by legal action or in any other manneL If Landlord relets the Premises or any portion thereof, such reletting shall not relieve Tenant of any obligation hereunder, except that Landlord shall apply the rent or other proceeds actually collected by it for such reletting against amounts due tTom Tenant hereunder to the extent such proceeds compensate Landlord for non-performance of any obligation of Tenant hereunder. La~dl~rd may execute any lease made pursuant hereto in its own name, and the new tenant thereunder shall be under no oblIgatIon to see to the application by Landlord of any proceeds to Tenant named in this Lease when the particular remedy has been asserted, nor shall Tenant have any right to collect any such proceeds. Landlord shall not by any re-entry or other act be ~eemed t? have accepted any surrender by Tenant of the Premises or Tenant's interest therein, or be dee~ed to have termmatedthls Lease, or to have relieved Tenant of any obligation hereunder, unless Landlord shall have gIven Tenant express written notice of Landlord's election to do so as set forth herein, (iii) Landlord may terminate this Lease by express written notice to Tenant of its election to do so'. S~ch tennination shall not relieve Tenant of any obligation hereunder which has accrued prior to the date of such tennmatlOn. In the event of such termination, Landlord shall be entitled to recover tTom Tenant the amount determined pursuant to paragraph (i) above, 14 , (b) Landlord's Obligations. Landlord shall be under no obligation to observe or perform any covenant of this Lease on its part to be observed or performed which accrues afterthe date of any default by Tenant hereunder. (c) Reasonable Rental Value. In any action for unlawful detainer commenced by Landlord against Tenant by reason of any default hereunder, the reasonable rental value of the Premises for the period of the unlawful detainer shall be deemed to be the amount of rent, additional rent and other charges reserved in this Lease for such period, unless Landlord or Tenant shall prove to the contrary by competent evidence, (d) Cumulative Remedies. The rights and remedies reserved to Landlord herein, including those not specifically described, shall be cumulative, and, except as provided by California statutory law in effect at the time, Landlord may pursue any or all of such rights and remedies at the same time or otherwise. (e) Landlord's Non-Waiver. No delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of any right or remedy or of any default by Tenant hereunder, The acceptance by Landlord of rent or any additional ~ent hereunder shall not be a waiver of any preceding breach or default by Tenant of any provision hereof, other than the failure of Tenant to pay the particular rent or any additional rent accepted, regardless of Landlord's knowledge of such preceding breach or default at the time of acceptance of such rent or any additional rent, or a waiver of Landlord's right to exercise any remedy available to Landlord by virtue of such breach or default. The acceptance of any payment ITom a debtor in possession, a trustee, a receiver or any other person acting on behalf of Tenant or Tenant's estate shall not waive or cure a default under Section 18.1 (d), (I) Landlord's Reentry. Tenant hereby irrevocably consents to Landlord's peaceable reentry, if Landlord so elects, to the Premises upon the occurrence of any of the events specified in Section 18.1 above, and Landlord gives not less than three (3) days' prior written notice to Tenant. (g) Tenant's Breach. Even though Tenant has breached this Lease and abandoned the Premises, this Lease continues in effect for so long as Landlord does not terminate Tenant's right to possession, and Landlord may enforce all ofits rights and remedies under this Lease, including the right to recover the rent as it becomes due, For purposes of Article XVIII, the following do not constitute a termination of Tenant's right to possession: (i) Acts of maintenance or preservation or efforts to relet the property: (ii) The appointtnent of a receiver on the initiative of Landlord to protect its interests under this Lease, (h) In the event of any default by Tenant in the payment of money, other than rent, or the performance of obligations required of Tenant under this Lease, then in addition to the other remedies herein granted to Landlord, Landlord may, but shall not be obligated to do so, and without waiving or releasing Tenant from any obligations of this Lease, make any payment and perform any other act on Tenant's part to be made or performed as in this Lease provided. All sums paid by Landlord and all necessary incidental cost, together with interest thereon at the rate often percent (10%) per annum or at the maximum rate permitted by law, whichever is greater, ITom the date of the payment by Landlord shall be payable by Tenant to Landlord on demand, The sums shall be deemed to be additional rent and subject to the same consequences as herein provided for failure to pay rent. (i) Grant of Option to Landlord. As additional consideration to Landlord for entering into this Lease, Tenant hereby grants to Landlord, as additional security for Tenant's covenant and agreement to pay the rental and other financial obligations set forth herein, an option to acquire and take over all of Ten ant's right, title and interest to all of the unexpired term of the leasehold interest except for the two (2) months immediately following the exercise by Landlord of its option, Landlord may exercise its option in the event Tenant remains in default of Tenant's obligation to pay rent, common area maintenance charges, taxes or other financial obligations after notice has been given to Tenant pursuant to Section 18, I (b) of this Lease, The option shall be exercised by Landlord by sending to Tenant at the notice address specified in this Lease a notification letter by registered or certified mail (return receipt not required) of its exercise of the option and by recording with the County Recorder of the county in which the property is located a notice of exercise of the option. Upon exercise of the option. Tenant shall be obligated to abide by its lease obligations for the next two succeeding months after which the lease shall be deemed terminated and the Premises vacated unless Landlord consents to Tenant holding over, which consent must be in writing. In such event, Tenant shall be on a month-to month basis, The right of Landlord to exercise its option shall be in addition to any and all other rights and remedies granted to Landlord pursuant to the provisions of this Lease and applicable law to enforce the lease provisions, obtain possession of the Premises and collect any judgments for rent or other sums owed by Tenant. SECTION 18.3 DEF AUL T BY LANDLORD. Landlord shall not be deemed to be in default in the performance of any obligation required to be performed by it hereunde~ u~les~ and until it has failed to perform such obligation within 30 days after written notice by Tenant to Landlord speclrylng In reasonable detail the nature and extent of any such failure; provided, however, that if the nature of Landlord's obligation is such that more than 30 days are required for its performance, then Landlord shall not be deemed to be in default if it shall commence such performance within such 30 day period and thereafter diligently prosecutes the same to completIOn. SECTION 18.4 LEGAL EXPENSES AND COLLECTION COSTS. If either party incurs any expense, including actual costs of collection, reasonable attorneys' fees, expenses ?f discovery, ~rep~rat~on for liti~ation, expert witness fees and litigation expenses and costs, in connection with any action or proceedmg instituted by either ~arty by reason of any det'lUlt or alleged default of the other party hereunder, the party prevailing in s~ch act~o~ or proceeding shall be entitled to recover its reasonable expenses from the other party. For purposes of this provIsion, In any u~l.awful detainer or other action or proceeding instituted by Landlord based upon any delimit or alleged default by I enant hereunder, Landlord shall be deemed the prevailing party if (a) judgment is entered in favor of Landlord or (b) pnor to 15 trial or judgment Tenant shall pay all or any portion of the rent and charges claimed by Landlord, eliminate the condition(s), cease the act(s) or otherwise cure the omission(s) claimed by Landlord to constitute a default by Tenant hereunder. ARTICLE XIX. ACCESS BY LANDLORD SECTION 19.1 RIGHT OF ENTRY. Landlord and Landlord's agents, contractors, servants and employees shall have the right to enter the Premises at all reasonable times (a) to examine the Premises or for the purpose of performing any obligation of Landlord or exercising any right or remedy reserved to Landlord in this Lease; (b) to exhibit the Premises to prospective purchasers, mortgagees or lessees; (c) to make such repairs, alterations, improvements or additions in the Premises and in the Center as Landlord may deem necessary or desirable; and (d) to take all materials into and upon the Premises that may be required in connection with such repairs, alterations, improvements or additions without the same constituting a constructive or actual eviction of Tenant, in whole or in part, and the Minimum Rent and Percentage Rent shall not abate while such repairs, alterations, improvements or additions are being made. Tenant shall permit Landlord to install, use and maintain pipes, ducts and conduits within or through the Premises, or through the walls, columns and ceilings therein, provided that the installation work is performed at such times and by such methods as will not unreasonably interfere with Tenant's use and occupancy of the Premises, or substantially damage the appearance thereof, or materially adversely affect the layout ofthe Premises. If, during the last month of the Term, Tenant shall have removed all or substantially all of Tenant's property therefi'om, Landlord may immediately enter and alter, renovate and redecorate the Premises without elimination or abatement of Minimum Rent and Percentage Rent and without other compensation, and such action shall have no effect upon this Lease. Nothing herein contained, however, shall be deemed or construed to impose upon Landlord any obligation, responsibility or liability whatsoever for the care, supervision or repair of their J Center or of the Premises, other than as in this Lease otherwise provided, ARTICLE XX. HOLDING OVER SECTION 20.1 HOLDING OVER. This Lease shall terminate and become null and void without further notice upon the expiration of the term herein specified, and any holding over by Tenant after such expiration shall not constitute a renewal or extension hereof or give Tenant any rights under this Lease, except when in writing signed by both parties hereto or as otherwise herein provided. If Tenant shall hold over for any period after the expiration of the term, Landlord may, at its option, treat Tenant as a tenant at will commencing on the first (I st) day following the expiration of this Lease and subject to all of the terms and conditions herein contained, except that the monthly rental shall be one hundred fifty percent (150%) of the monthly minimum rental applicable at the date of expiration, or at the then currently scheduled rent for comparable space in the "Center, whichever is greater, plus one-twelfth of the average annual percentage rent payable hereunder for the preceding twelve (12) months, If Tenant fails to surrender the Premises upon the expiration of this lease, Tenant shall indemnifY and hold Landlord harmless fi'om all loss or liability, including, without limitation, any claims made by any succeeding tenant founded on or resulting fi'om such failure to surrender. Acceptance by Landlord of rent after such expiration or earlier termination shall not constitute a consent to a holdover hereunder or result in a renewal of this Lease. The foregoing provisions of this Section are in addition to and do not affect Landlord's right of reentry or any other rights of Landlord hereunder or as otherwise provided by law, ARTICLE XXI. RULES AND REGULATIONS SECTION 21.1 RULES AND REGULATIONS. Tenant covenants and agrees to comply with and observe all rules and regulations established by Landlord from time to time, including, but not limited to, those rules and regulations attached hereto as Exhibit "c" and made a part hereof Tenant's failure to observe the rules and regulations shall be considered a default under Section 18, I (c) of this Lease. In the case of any conflict between the rules and regulations and this Lease, this Lease shall be controlling, ARTICLE XXII. QUIET ENJOYMENT SECTION 22.1. LANDLORD'S COVENANT. Upon payment by Tenant of the rents herein provided, and upon the observance and performance of all the covenants, terms and conditions on Te~ant's p.art to be o~served ~nd performed. Tenant shall peaceably and quietly hold and enjoy the Premises for the Term without hindrance or Interruptoon by Landlord or any other person or persons lawfully or equitably claiming by, through or under L~ndlord, subject, nevertheless, to the terms and conditions of this Lease, and any mortgage and/or deed of trust to which thIs Lease IS subordinate. ARTICLE XXIII. SECURITY PROVISION SECTION 23.1 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum specified in Item 10 of the Basic Lease Provisions as security for the full and faithful performance of every pro~ision of this. L~ase to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, but ~ot limited to, the provisions relating to the payment of rent. Landlord may use, apply or retain all or any part of this secuflty depoSit for the payment of any rent or other sum in default, or for the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default. or to compensate Landlord for any other loss .or damage which Landlord may suffer by reason of Tenant's default. In the event any bankruptcy, insolvency, reorgamzatlon or other creditor-debtor proceedings shall be instituted by or against Tenant, or its successors or assigns, or any Guarantor of Tenant hereun.d~, such security shall be deemed to be applied first to the payment of any rents and/or charges d~e Landlord for al~ peflo'a~ prior to the institution of such proceedings, and the balance, if any, of such secuflty ~ay be retained by ~an.dlord In padrtl liquidation of Landlord's damages, If any portion of the deposit is so used or applied, Tenant shall, within five (5) ays after written demand therefor, deposit cash with Landlord in an amount su~cient to restore the secunty deposit. to Its original amount. and Tenant's failure to do so shall be a material breach of thIS Lease, Landlord shall not be required to 16 keep this security deposit separate trom its general funds, and Tenant shall not be entitled to interest on the deposit If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the security deposit or any balance thereof shall be returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's interest hereunder) at the expiration of the Term. ARTICLE XXIV. MISCELLANEOUS SECTION 24.1 WAIVER. One or more waivers of any covenant or condition by Landlord shall not be construed as a waiver of a subsequent breach of the same covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord's consent or approval shall not be deemed to render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant No breach by Tenant ofa covenant or condition of this Lease shall be deemed to have been waived by Landlord unless such waiver is in writing signed by Landlord. The rights and remedies of Landlord under this Lease shall be cumulative and in addition to any and all other rights and remedies which Landlord has or may have, SECTION 24.2 ENTIRE AGREEMENT. This Lease and the exhibits hereto cover in full each and every agreement of every kind or nature whatsoever between the parties hereto concerning the Premises and the-- Center, and all previous representations, preliminary negotiations and agreements of whatsoever kind with respect to the Premises or the r Center, except those contained herein, are superseded and of no further force or effect; no person, firm or corporation has at any time any authority ITom Landlord to make any representations or promises on behalf of Landlord, and Tenant expressly agrees that if any such representations or promises have been made, Tenant hereby waives all right to rely thereon unless they are specifically included in this lease agreement in writing. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statute, law, or custom to the contrary notwithstanding. Specifically, the Tenant agrees and hereby represents as follows: (a) there have been no agreements, representations by Landlord, its agents, representatives or employees, as to obligations incurred or undertaken by Landlord to obtain or maintain a particular tenant, group of tenants or tenant mix in theJ ICenter, and (b) that Landlord has made no representations or warranties as an inducement upon which Tenant has relied in determining whether to enter into this Lease. as to traffic now, traffic patterns or the economic viability of the Premises or of the potential profit which Tenant may receive as a result of entering into this Lease. No provision of this Lease may be amended or added to except by an agreement in writing signed by Landlord and Tenant or their respective successors, SECTION 24.3 RELATIONSHIP OF PARTIES; USE OF PRONOUN. Nothing contained herein shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of rent, nor any other provision contained herein, nor any acts of the parties herein, shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant Whenever the singular number is used, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders. SECTION 24.4 DELAYS. In the event that either party hereto shall be delayed or hindered in or prevented trom the performance of any work or in performing any act required hereunder by reason of: strikes; lockouts; labor troubles; inability to procure materials, labor or energy; failure of power; disruption, reduction, interruption, curtailment or failure of utility, solid waste disposal or other services; restrictive governmental laws or regulations; voluntary or involuntary participation, at the request of a governmental agency or otherwise, in any plan or program involving allocations. priorities, limitations or restraints regarding water, fuel or other energy, or otherwise; riots; insurrection; war; fires; noods: earthquakes: storms: droughts; other acts of God; or any other reason of a similar or dissimilar nature not the fault of the party delayed in performing excused for the period of the delay, and the period for the performance of any work or the doing of such act shall be extended for a period equivalent to the period of the delay. Further, neither (a) Landlord's reduction of heat, light, power, air conditioning, or any other services whatsoever to the Center because of any similar or dissimilar event constituting a cause for excusable delay hereunder nor (b) the occurrence of any event constituting a cause for excusable delay, shall relieve Tenant trom its obligations under Article VI of this Lease. The provisions of this Section shall not operate to excuse Tenant from prompt payment of Minimum Rent, Percentage Rent or any other payments required by the terms of this Lease, SECTION 24.5 NOTICES. Any notice required or permitted to be given hereunder shall be in writing and may be served personally or by mail; if served by mail it shall be addressed as specified in the .Bas~c Lease Provisions. Any notice so given by mail shall be deemed received forty-eight (48) hours after being depoSIted In the Umt:d States mail registered or certified, postage prepaid and addressed as specified above. Either party may by wrttten notice to the other specifY a different address for notice purposes, SECTION 24.6 CAPTIONS AND SECTION NUMBERS. The captions, section numbers, article numbers, and index appearing in this Lease are inserted only as a matter of convenience and in no ~ay define, limit, construe, or describe the scope or intent of such sections or articles of this Lease nor in any way affect thIS Lease. SECTION 24.7 BROKER'S COMMISSION. Tenant warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease except as specifically stated to the .c~~trary i~ Item II of the Basic Lease Provisions, Tenant agrees to indemnifY Landlord and hold it harmless trom all habllltles arising trom any claim by any other broker or finder allegedly representing Ten~nt, !ncludin~, without limitation, the cost ofattomeys' fees in connection therewith. Such agreement shall survive the termmatlOn ofthls Lease. 17 SECTION 24.8 RECORDING. Tenant shall not record this Lease without the prior written consent of Landlord, Tenant, upon the request of Landlord, shall execute and acknowledge a short form memorandum of this Lease for recording purposes. Upon the termination of this Lease for any reason, including, but not limited to, surrender or cancellation under Section 24.21 below, Tenant shall, within three (3) days of the date of request by Landlord, convey to Landlord, by quit claim deed any and all interest Tenant may have under this Lease. SECTION 24.9 SERVICE CHARGE FOR FAILURE BY TENANT TO SUBMIT REQUIRED INFORMATION. In the event Tenant fails or refuses to furnish any document, report or required statement or insurance document as hereinbefore agreed to, the Tenant shall be liable to the Landlord for a service charge in the amount of fifty dollars ($50,00) for each week or portion thereof that said delinquency or refusal persists. In the event the charge is not paid within three (3) days after written demand therefor is served upon the Tenant, said amount shall be deemed to be additional rent and subject to the same consequences as herein provided for failure to pay rent. SECTION 24.10 TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer or transfers of Landlord's interest in the Premises, including a so-called sale-leaseback, the transferor shall be automatically relieved of any and all obligations on the part of Landlord accruing under this Lease ITom and after the date of the transfer, provided that the interest of the transferor, as Landlord, in any funds then in the hands of Landlord in which Tenant has ah interest shall be turned over, subject to such interest, to the then transferee and the transferee assumes all obligations on the part of Landlord accruing under ihis Lease ITom and after the date of the transfer. Upon the termination of any such lease in a sale-leaseback transaction prior to termination of this Lease, the former tenant thereunder shall become and remain liable as Landlord hereunder until a further transfer. No holder of a mortgage and/or deed of ttust to which this Lease is or may be subordinate, and no Landlord under a so-called sale-leaseback, shall be responsible in connection with the security deposited hereunder, unless such mortgagee or holder of such deed of ttust or landlord shall have actually received the security deposited hereunder. SECTION 24.11 FLOOR AREA. "Floor Area" as used in this leåSe means the aggregate number of lease able square feet of Ooor space of all Ooor levels in the -- Center, including any mezzanine space, measured ITom (a) the outside faces of all perimeter walls thereof other than any party wall separating such premises ITom other leaseable premises, (b) the centerline of any such party wall, (c) the outside face of any interior wall, and (d) the building and/or lease line adjacent to any entrance to such premises, No deduction or exclusion ITom Floor Area shall be made by reason of columns, ducts, stairs, elevators, escalators, shafts, or other interior construction or equipment. SECTION 24.12 INTEREST ON PAST DUE OBLIGATIONS. Any amount due ITom Tenant to Landlord hereunder which is not paid when due (including, without limitation, amounts due as reimbursement to Landlord for costs incurred by Landlord in performing obligations of Tenant hereunder upon Tenant's failure to so perform) shall bear interest at he highest rate then allowed under the usury laws of the State of California, ITom the date due until paid, unless otherwise specifically provided herein, but the payment of the interest shall not excuse or cure any default by Tenant under this Lease. SECTION 24.13 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a lesser amount than the rent or other charges herein stipulated shall be deemed to be other than on account of the earliest due stipulated rent or other charges, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent or other charges be deemed an accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or other charges or pursue any other remedy in this Lease provided. SECTION 24.14 EXECUTION OF LEASE; NO OPTION. The submission of this Lease to Tenant shall be for examination purposes only, and does not and shall not constitute a reservation of or option lor Tenant to -lease, or otherwise create any interest by Tenant in, the Premises or any other premises situated in the - Center. Execution of this Lease by Tenant and return to Landlord shall not be binding upon Landlord notwithstanding any time interval, until Landlord has in fact executed and delivered this Lease to Tenant. SECTION 24.15 CONTROLLING LAW. This Lease shall be governed by and construed in accordance with the laws of the State of California. If any provision of this Lease or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, such provision shall be adjusted ratherthan void~d, if possible, in order to achieve the intent of the parties to the extent possible, In any event, all other provISIons of thIS Lease shall be deemed valid and enforceable to the full extent. SECTION 24.16 SUCCESSORS. All rights and liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind the several respective heirs, executors, administrators, successors, and assigns of the parties; and if there shall be more than one Tenant, they shall all be bound Jomt.ly and severally by the terms',covenants and agreements herein, No rights, however, shall mure to the benefit of any assIgnee of Tenant unless the aSSIgnment to such assignee has been approved by Landlord in writing as provided in Section 13,1 hereof SECTION 24.17 SPECIFIC PERFORMANCE OF LANDLORD'S RIGHTS. Nothing contained in this Lease shall be construed as or shall have the effect of abridging the right of Landlord to obtain specific performance of any and all of the covenants or obligations of Tenant under this Lease. 18 SECTION 24.18 INTERPRETATION OF WORDS AND PHRASES. Time is of the essence of this Lease, Notwithstanding the fact that certain references elsewhere in this Lease to acts required to be performed by Tenant hereunder or to breaches or defaults of this Lease by Tenant, omit to state that such acts shall be performed at Tenant's sole cost and expense, or omit to state that such breaches or defaults by Tenant are material, unless the context implies to the contrary, each and every act to be performed or obligation to be fulfilled by Tenant pursuant to this Lease shall be performed or fulfilled at Tenant's sole cost and expense, and all breaches or defaults by Tenant hereunder shall be deemed material. Tenant shall be fully responsible and liable for the observance and compliance by Concessionaires of and with all the terms and conditions of this Lease, which terms and conditions shall be applicable to Concessionaires as fully as if they were the Tenant hereunder; any failure by a Concessionaire to fully observe and comply with the terms and conditions of this Lease shall constitute a default hereunder by Tenant. Nothing contained in the preceding sentence shall constitute a consent by Landlord to any concession, subletting or other arrangement proscribed by Section 13.1. SECTION 24.19 CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a corporation or partnership, each individual executing this Lease on behalf of the corporation or partnership represents and warrants that he is duly authorized to execute and deliver this Lease on behalf of the corporation or partnership, and that this Lease is binding upon the corporation or partnership in accordance with its terms. Tenant shall, at Landlord's request, deliver a certified copy of its board of directors' resolution or partnership agreement or certificate authorizing or evidencing such execution, In addition, as a condition for the execution of this Lease by Landlord, the obligations, covenants and performance of the Tenant as herein provided shall be guaranteed in writing by acceptable Guarantors on a form of guarantee provided by Landlord. SECTION 24.20 SURRENDER OR CANCELLATION. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger, and shall terminate all or any existing subleases, unless Landlord elects to treat such surrender or cancellation as an assignment to Landlord of any or all of such subleases, SECTION 24.21 CHANGES REQUESTED BY LENDER. Neither Landlord nor Tenant shall unreasonably withhold its consent to changes or amendments (0 this tease requested by the Lender on Landlord's fee interest or on Tenant's leasehold interest, as the case may be, so long as such changes do not materially alter the basic business terms of this Lease or otherwise materially diminish the rights or materially increase the obligations of the party from whom consent to such change or amendment is requested. SECTION 24.22 SURVIVAL OF INDEMNITIES AND WARRANTIES. The obligations of the indemnifying party under each and every indemnification and hold harmless provision contained in this Lease shall survive the expiration or earlier termination of this Lease to and until the last to occur of (a) the last date permiued by law for the bringing of any claim or action with respect to which indemnification may be claimed by the indemnified party against the indemnifying party under such provision or (b) the date on which any claim or action for which indemnification may be claimed under such provision is fully and finally resolved, and, if applicable, any compromise thereof or judgment or award thereon is paid in full by the indemnifying party and the indemnified party is reimbursed by the indemnifYing party for any amounts paid by the indemnified party in compromise thereof or upon judgment or award thereon and in defense of such action or claim, including reasonable attorney's fees incurred, The representations, warranties, and covenants of the parties contained herein shall survive the termination of this Lease without regard to any investigation made by the parties. ARTICLE XXV. ADOPTION AND IMPLEMENTATION OF AN ENERGY CONSERVATION PROGRAM SECTION 25.1 ADOPTION AND IMPLEMENTATION OF AN ENERGY CONSERVATION PROGRAM. In the event the Landlord undertakes a discretionary energy conservation program which includes the purchase, construction and installation of energy generating or energy savings devices such as, but not limited to, solar energy or wind power equipment, Tenant shall be obligated to contribute its pro rata share of the cost of purchase, construction expense of installation and maintenance thereof. Tenant shall have no obligation for the cost, construction or maintenance thereof until its lease has been in effect two (2) years, Tenant's obligation shall he based upon its pro rata share as detennined for common facilities purposes as set forth in Section 7.3. However, Tenant's liability for its share of the actual acquisition, construction and installation cost shall not exceed an amount equal to the total of its last th~ee months rent and shall be amortized as additional rent over the next twenty-four (24) months of the lease term commencing with the month alter written notice given to Tenant by Landlord that the improvements have been completed. If less than twenty-four (24) months remain in the Lease Term, Tenant will not have any obligation under t~is section, :enant shallbe entitled to its pro rata share of energy credits, tax credits, depreciation and other benefits attnbutable to .'ts contnbutlOn toward the capital cost, installation and construction of said energy saving or generating systems or devIces to revert to and be the property of the Landlord upon the termination or expiration of this Lease, ARTICLE XXVI. NO IMPLICATION OF EXCLUSIVE USE SECTION 26.1 NO IMPLICATION OF EXCLUSIVE USE. Nothing herein contained shall be deemed to give the Tenant an express or implied exclusive use in the"" Center nor are there ":"y representations made to Tenant as to restrictions upon other types of uses or tenants whIch Landlord can lease space to In the - Center. 19 ARTICLE XXVII. REPRESENTATIONS BY TENANT SECTION 27.1 REPRESENTATIONS BY TENANT. The application, financial statements and tax returns submitted and certified to by Tenant as a true, accurate and up to date representation of its financial condition, including, without limitation, all of its assets, liabilities, income and sources of income, have been prepared, certified and submitted to Landlord as an inducement and consideration to Landlord to enter into this Lease agreement with Tenant. Said application and statements are represented and warranted by Tenant to be true, accurate and correct and to accurately and fully reflect Tenant's true financial condition as of the date of execution of this Lease by Tenant. IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, consisting of the foregoing Basic Lease Provisions, Articles I through XXVII, and all Exhibits attached hereto as of the day and year first above written. LANDLORD: Civic Center Medical Arts Associates a California Limited Pa nership dba CIVIC CENTER PRO' SIONAL PLAZA James A. er, Managing Member TENANT: CITY OF SANTA ANA, a municipal corporation of the S7Zi?J2 By: . David N. Ream, City Manager By: Federal Tax J.D. #33-0141182 ATTEST: R,ç;.d....,;.,-- d e,( Patricia E. Healy, Clerk of the Council APPROVED AS TO FORM: By: Laura Sheedy, Assistan Attorney RECOMMENDED FOR APPRO V AL By: ohn P. Reekstin, Executive irector Community Development Agency Civic Center Professional Plaza SUITE 100 SUITe: 130 - CJ 0 0 .~ I SUITE 140 'rtj; ~ First Floor Not to Scale Exhibit A 500 West Santa Ana Blvd. Santa Ana, CA 92701 . RUITE II- I PREMISES 3,304 SQ. FT. ~_.' I I SITE 160 l- L I rï EXHIBIT B TENANT'S INSURANCE The following standards for Tenant's insurance shall be in effect at the - Center. Landlord reserves the right to adopt reasonable modifications and additions hereto, and Tenant agrees to obtain and present evidence to Landlord when requested that it has fully complied with the insurance clause by obtaining the policies herein described. (a) Types. Tenant, at its sole cost and expense, shall, commencing on the date Tenant is given access to the Premises for any purpose, and during the Term, procure, pay for and keep in full force and effect: (i) comprehensive liability insurance with respect to the Premises and the operations of or on behalf of Tenant or its Concessionaires in, on or about the Premises in an amount not less than One Million Dollars ($1,000,000) combined single limit bodily injury, personal injury, death and property damage liability per occurrence, subject to such increases in amount as Landlord may reasonably require 1T0m time to time, Coverage shall include but not be limited to personal injury, blanket contractual, cross liability, severability of interest, broad form property damage, products/completed operations, owned and non-owned automobile, and, if this Lease covers premises in which alcoholic beverages are served, sold and/or consumed or obtained, liquor liability coverage. Policy or policies to include a provision that (I) coverage shall be primary as respects any loss or claim arising directly or indirectly out of the operations of Tenant, any policies carried by Landlord shall be excess and non-contributing with such policy or policies, and (2) that Landlord and any other parties in interest shall be an additional insured under such policy or policies; (ii) worker's compensation coverage as required by law, together with employers liability coverage; (iii) business interruption or loss of income insurance in amounts satisfactory to Landlord; (iv) with respect to improvements, alterations and the like required or permitted to be made by Tenant hereunder, contingent liability and builder's risk insurance; (v) with respect to Tenant's leasehold improvements, merchandise, stock, trade fixtures, furnishings, equipment and other items of personal property of Ten ant or Tenant's customers located on or in the Premises, insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils as now are or may be included in standard "all risk" forms in general use in Orange County, California, for an amount equal to not less than ninety percent (90%) of the actual replacement cost thereof and when Landlord or any other party may have some interest in said personal property, then Landlord and any other parties in interest shall be an additional insured under such policy or policies, and such insurance shall contain a replacement cost endorsement; (vi) plate glass insurance at full replacement value (Tenant may elect to self insure); (vii) boiler and machinery insurance as applicable (Tenant may elect to self insure); (viii) when Tenant operates a food market, Landlord's building must be insured by Tenant if said building is considered a separate fire division by a fire insurance rating authority, in addition to Tenant's leasehold improvements. merchandise, stock, trade fixtures, furnishings, equipment or other items of personal property, and Landlord shall be an additional insured under such policy or policies with the same "all risk" fonn and ninety percent (90%) replacement cost coverage as required in paragraph (v) above with deductibles acceptable to Landlord and replacement cost endorsement. (b) Standard. All policies of insurance required to be carried by Tenant under this Lease shall be written by responsible and solvent insurance companies authorized to do business in the State of California and havmg a policyholder's rating of "A" (Excellent) or better, and a financial rating of "X" or better, in "Best's Insurance Reports- Fire and Casualty," Any such insurance required of Tenant hereunder may be furnished by Tenant und~r any blanket policy carried by it or under a separate policy therefoL A copy of each paid ~p ~olicy evidencing such Insura~ce (appropriately authcnticated by the insurer) or a certificate of the insurer, certltylng that such policy has. been Issued, providing the coverage required by this Section and containing provisions specified herein, shall be delivered to Landlord prior to the date Tenant is given the right of possession of the Premises, and upon ren~wals, n.ot le~s than thirty (30) days prior to the expiration of such coverage, Landlord may, at any time, and from tIme to time, Ins~e~t and/or copy any and all insurance policies required to be procured by Tenant hereundeL In no event shall the limIts of any policy be considered as limiting the liability of Tenant under this Lease, (c) Specific Provisions in Policy. Each policy evidencing insurance required to be carried by Tenant pursuant to this Article shall contain the following provisions or clauses: (i) a provision that the insurer will not cancel, or materially change the coverage provided by such policy without tirst giving Landlord thirty (30) days' prior written notice; I of 2 pages EXHIBIT B (continued) (ii) to the extent obtainable, a provision to the effect that any amounts payable by virtue of business interruption, loss of earnings or loss of rents shall be computed and stated separ¡ltely in any settlement entered into by the insurer under the policy; , (iii) a waiver by the Tenant's insurer of any right to subrogation against Landlord, its agents, employees or representatives which arises or might arise by reason of any payment under such policy or policies or by reason of any act or omission of Landlord, its agents, employees or representatives. (d) Landlord's Substitute Performance. In the event that Tenant fails to procure, maintain and/or pay for at the times and for the duration specified in this Exhibit., any insurance required by this Exhibit& or fails to carry insurance required by any governmental requirements, Landlord may (but without obligation to do so) at any time or fTom time to time, and without notice, procure such insurance and pay the premiums therefor, in which event Tenant shall repay Landlord all sums so paid by Landlord together with interest thereon as provided elsewhere herein and any costs or expenses incurred by Landlord in connection therewith, within ten (10) days following Landlord's written demand to Tenant for such payment (e) Increased Rates. Tenant shall not do anything in or about the Premises which will in any way tend to increase the insurance rates on the Office Building, the Premises and/or on the contents thereof. (I) Increase General Liability Limits. Landlord will, fTom time to time (not more often than once every three years), review the comprehensive general liability insurance limits (set forth above) to determine the adequacy of coverage and, if necessary, to adjust the insurance limits, In the event that Landlord shall require any increases in the amounts of coverage then provided by Tenant under clause (i) of the paragraph (a) of this Section, Tenant shall promptly increase such coverage to the recommended amounts. 2 of 2 pages EXHIBIT C RULES AND REGULATIONS OF CENTER WHICH CONSTITUTE A PART OF THE LEASE (a) The stairways, balconies, and roof are not for the use of the general public, and the Landlord shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of the Landlord shall be prejudicial to the safety, character, reputation, and interests of the buildings and its Tenants, provided that nothing herein contained shall be construed to prevent such access to persons with whom the Tenant normally deals in the ordinary course of business unless such persons are engaged in illegal activities. No tenant employee, agent, or contractor of Tenant shall go upon the roof of the building without prior consent of the Landlord and proper identification. No Tenant shall sweep or throw or permit to be swept or thrown from the premise any dirt or other substance into or on any sidewalks or common areas of the Center. (b) Any sash doors, sashes, windows, glass doors, lights and skylights that reflect or admit light into the common areas of the Center shall not be covered or obstructed by Tenant. Water closets, urinals and wash basins shall not be used for any purpose other than those for which they were constructed, and no rubbish, newspapers, food or other substance of any kind shall be thrown into them. Tenant shall not mark, drive nails, screw or drill into, paint or in any way deface the exterior walls, roof foundations, bearing walls or pillars without prior written consent of Landlord. The expense of repairing any breakage, stoppage or damage resulting fTom a violation of this rule shall be borne by Tenant (c) No awning or shade shall be affixed or installed over or in the show windows or the exterior of the Premises. If Tenant desires window drop curtains in the show windows of the Premises, the same must be of such uniform shape, color, material, and make as may be prescribed by Landlord and must be put up as directed by Landlord, and paid for by Tenant If the Landlord, by a notice in writing to the Tenant, shall object to any sign, curtain, blind, shade, or screen attached to, or hung in, or used in connection with, any window or door of the Premises, such use of such sign, curtain, blind, shade, or screen shall be immediately discontinued by the Tenant (d) No boring or cutting for wires shall be allowed, except with the consent of Landlord. (e) Tenant shall not do anything in the Premises, or bring or keep anything therein, which will in any way increase or tend to increase the risk of fire or the rate offire insurance or which shall conflict with the regulations of the Fire Department or the law or with any insurance policy on the Premises or any part thereof, or with any rules or regulations established by any administrative body or official having jurisdiction, and it shall not use any machinery therein, even though its installation may have been permitted, which may cause any unreasonable noise or jar, or tremor to the floors or walls, or which by its weight might injure the floors of the Premises. (I) Landlord may limit weight, size and position of all safes, fixtures and other equipment used in the Premises. In the event Tenant shall require extra heavy equipment, Tenant shall notify Landlord of such fact and shall pay the cost of structural bracing to accommodate same. All damage done to the Premises or the Center by putting in, or taking out, or maintaining extra heavy equipment shall be repaired at the expense of Tenant. (g) Tenant and Tenant's officers, agents and employees shall not make nor permit any loud, unusual or improper noises nOT interfere in any way with other tenants or those having business with them, nOT bring into nor keep within the Center any animal or bird (with the exception of the authorized pet store), or any bicycle, automobile or other vehicle. except such vehicles as they are permitted to park in the Center parking lot, and shall park in the areas designated from time to time for employee parking generally. Tenant and Tenant's officers, agents, and employees shall not throw cigar or cigarette butts or other substances or litter of any kind in or about the Center, except m receptacles placed therein for such purposes by Landlord or governmental authorities. (h) No machinery of any kind will be allowed in the Premises without the written consent of Landlord, apply, however, to customary office equipment or trade fixtures or package handling equipment (i) All freight must be moved into, within and out of the Premises only during such hours and according to such regulations as may be posted from time to time by the Landlord. This shall not (j) No radio or television or other similar device shall be installed without first obtaini.ng in each instance Landl.ord's consent in writing, No aerial shall be erected on the roof or extenor walls of the Premises, or on the grounds, w,th?ut in each instance, the written consent of Landlord, Any aerial so installed without such wntten consent shall be subject to removal without notice at any time. (k) All garbage, including wet garbage, refuse, or trash shall be sealed in plastic bags, Cardboard boxes to be flattened. All rubbish to remain within Tenant's premises until placed by Tenant In the receptacles provld,ed by Landlord for that purpose and only during those times prescribed by Lan~lord. Any Te.n~nt's garbage, refuse: or trash that is removed by Landlord from outside Tenant's premises will be invOIced as an addItIOnal charge for services rendered. I of 2 pages . ^ EXHIBIT C (continued) (I) Tenant shall not bum any trash or garbage at any time in or about the leased premises or any area of the Center, (m) Tenant shall use at Tenant's cost such pest extermination contractor as Landlord may direct and at such intervals as Landlord may require. (n) Tenants are required to observe all security regulations issued by the Landlord and to comply with instructions and/or directions of the duly authorized security personnel for the protection of the Center and all tenants therein. (0) Any requirements of Tenant will be attended to only upon written application to Landlord. (p) No waiver of any rule or regulation by Landlord shall be effective unless expressed in writing and signed by Landlord or their authorized agent (q) Landlord reserves the right to exclude or expel fTom the Center any person who, in the 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 the law or the rules and regulations of the Center. (r) Landlord reserves the right to close and keep locked any and all entrances and exit doors of the Center and gates or doors closing the parking areas thereof during such hours as Landlord may deem to be advisable for the adequate protection of the Center and all tenants therein. Tenant shall not alter any lock or install a new or additional lock or bolt on any door of the common facilities. (s) Landlord reserves the right at any time to change or rescind anyone or more of these rules or regulations or to make such other and further reasonable rules and regulations as in Landlord's judgment may fTom time to time be necessary for the management, safety, care and cleanliness of the Premises, and for the preservation of good order therein, as well as for the convenience of the occupants and tenants of the Center. Landlord shall not be responsible to Tenant or to any other person for the non-observance or violation of the rules and regulations by any other tenant or other person, Tenant shall be deemed to have read these rules and to have agreed to abide by them as a condition to its occupancy of the space herein leased. (t) Tenant shall abide by any additional rules or regulations which are ordered or requested by any governmental authority, (u) In the event of any conIlict between these rules and regulations or any further or modified rules and regulations from time to time issued by Landlord and the lease provisions, the lease provisions shall govern and control. 2 of 2 pages COpy RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: REN R HAYHURST, ESQ, BRYAN CAVE LLP 2020 MAIN STREET, SUITE 600 IRVINE, CALIFORNIA 92614 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT THIS AGREEMENT, made and entered into as of June 'ð!2, 2004, by and between CITY OF SANTA ANA, a municipal corporation of the State of California ("Tenanf') and CALIFORNIA BANK & TRUST, a California banking corporation ("Lender') A. Lender has agreed to make a mortgage loan ("Loan") to [BORROWER NAME] ("Borrower") in the amount of Three Million Nine Hundred Two Thousand Five Hundred Dollars ($3,902,500,00) to be secured by a deed of trust ("Deed of Trust-) on the real property legally described in Exhibit A attached hereto and the improvements thereon the "Project"); B. Tenant is the present lessee under a lease dated May 7,2004 made by CIVIC CENTER MEDICAL ARTS ASSOCIATES, a California limited partnership, dba Civic Center Professional Plaza, the predecessor in interest to Borrower as Landlord, demising a portion of the Project and other property (said lease and all amendments thereto being referred to as the "Lease"); C. The Loan terms require that Tenant subordinate the Lease and its interest in the Project in all respects to the lien of the Deed of Trust and that Tenant attorn to !.ender; and D. In return, Lender is agreeable to not disturbing Tenant's possession of the portion of the Premises covered by the Lease ("Demised Premises"), so long as Tenant is not in default under the Lease, NOW, THEREFORE, the parties hereby agree as follows: 1. Subordination, The Lease, and the rights of Tenant in, to and under the Lease and the Demised Premises, are hereby subjected and subordinated to the lien of the Deed of Trust, it being understood and agreed that the foregoing subordination shall apply to any and all increases, renewals, modifications, extensions, substitutions, replacements and/or consolidations of the Deed of Trust, provided that any and all such increases, renewals, modifications, extensions, substitutions, replacements and/or consolidations shall nevertheless be subject to the terms of this Agreement 2. Tenant Not to Be Disturbed, So long as Tenant is not in default in the payment of rent or of any of the terms, covenants or conditions of the Lease on Tenant's part to be performed (beyond any period given Tenant in the Lease to cure such default) and Tenant attorns to Lender as provided herein, (a) Tenant's possession of the Demised Premises shall not be diminished or interfered with by Lender, and (b) Lender will not join Tenant as a party defendant in any action or proceeding foreclosing the Deed of Trust unless such joinder is necessary to foreclose the Deed of Trust and then only for such purpose and not for the purpose of terminating the Lease, Subordination, Non-Disturbance & Attornment Agreement IR0112781S4 6/28/2004 Rev: 5/14/02 3. Tenant to Attorn To Lender, If Lender shall become the owner of the Premises or the Premises shall be sold by reason of foreclosure or other proceedings brought to enforce the Deed of Trust or the Premises shall be transferred by deed in lieu of foreclosure, the Lease shall continue in full force and effect as a direct Lease between the then owner of the Premises, who shall succeed to the rights and duties of the Landlord and Tenant Tenant shall attorn to Lender or any other such owner as its Landlord, said attornment to be effective and self-operative without the execution of any further instruments, Tenant hereby waives the provisions of any statute or rule of law, now or hereafter in effect, which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect the Lease and the obligations of Tenant thereunder as a result of any such foreclosure or deed-in- lieu of foreclosure. 4. Notice of Discharae. Borrower shall give notice to Tenant of the reconveyance or other release of the Deed of Trust within 30 days of the date the reconveyance or other release is recorded, 5. Limitations. Lender (and any successor or assign of Lender) shall not be (i) liable for any act or omission of Lessor or any predecessor-in-interest for which Lender has not received notice and opportunity to cure pursuant to Section 6 below, (ii) subject to any offsets, counterclaims or defenses which Tenant may have against Lessor or any predecessor-in-interest, except for any offsets or defenses that may continue (provided Lender has received notice and opportunity to cure pursuant to Section 6 below) or that may arise during Lender's ownership of the Demised Premises, (iii) liable for any security deposit or payment of rent (for more than one (1) month in advance of the date due under the Lease) made by Tenant to Lessor or predecessor-in-interest, except to the extent actually received by Lender or (iv) obligated to expand the Project, construct additional improvements or otherwise expend funds which are capital in nature except for items or ordinary maintenance and repair Notwithstanding any term of the Lease, upon foreclosure of the Deed of Trust, or acceptance of a deed in lieu thereof or other similar transfer, any environmental/hazardous materials indemnity and/or reimbursement provisions under the Lease shall not be applicable to, or enforceable against, Lender, any successor in interest to or assigns of Lender and/or any purchaser at foreclosure and any transferee thereof. If Lender shall become the owner of the Project or the Project shall be sold by reason of foreclosure or other proceedings brought to enforce the Deed of Trust or the Project shall be conveyed by deed-in-lieu of foreclosure, Tenant agrees that, notwithstanding anything to the contrary contained in the Lease, after such foreclosure sale or conveyance by deed-in-lieu of foreclosure, Lender shall have no personal liability to tenant under the Lease and Tenant shall look solely to the estate and property of Landlord in the Project, to the net proceeds of sale thereof or the rentals received therefrom, for the satisfaction of Tenant's remedies for the collection of a judgment or other judicial process requiring the payment of money by Landlord in the event of any default or breach by Landlord with respect to any of the terms, covenants, and conditions of the Lease to be observed or performed by Landlord and any other obligation of Landlord created by or under this Lease, and no other property or assets of Landlord or of its partners, officers, beneficiaries, co- tenants, shareholders, or principals (as the case may be) shall be subject to levy, execution or other enforcement procedures for the satisfaction of Tenant's remedies. The term "Landlord" as used herein shall be limited to mean and include only the owner or owners at the time in question of Landlord's interest in the Lease, which term shall include Lender in the event Lender acquires title to the Project Further, in the event of any transfer by Landlord of Landlord's interest in this Lease, Landlord (and in the case of any subsequent transfers or conveyances, the then assignor), including each of its partners, officers, beneficiaries, co-tenants, shareholders or principals (as the case may be) shall be automatically freed and released, from and after the date of such transfer or conveyance, of all liability for the performance of any covenants and agreements which accrue subsequent to the date of such transfer of Landlord's interest 6. Notice And Cure Riahts. Tenant agrees with Lender that from and after the date hereof, Tenant will not terminate or seek to terminate the Lease by reason of any act or omission of the lessor thereunder or for any other reason until Tenant shall have given written notice, by registered or certified mail, return receipt requested, of said act or omission to Lender, which' notice shall be addressed to CALIFORNIA BANK & TRUST, a California banking corporation, 1900 Main Street, Suite 200, Irvine, Caiifornia 92614; and until a period of time equal to the greater of: (a) the time allowed Subordination, Non-Disturbance & Attornment Agreement IR01/278154 2 6/2812004 Rev: 5/14/02 Tenant under the Lease, or (b) thirty (30) days, shall have elapsed following the giving of such notice, during which period Lender shall have the right, but not be obligated, to remedy such act, omission or other matter. 7. Miscellaneous. This Agreement and each and every covenant, agreement and other provision hereof shall be binding upon and shall inure to the benefit of the parties hereto and their representatives, successors and assigns, This Agreement may not be modified orally or in any manner other than by an agreement in writing signed by the parties hereto or their respective successors in interest The term "Lender" as used throughout this Agreement includes any successor or assign of Lender and any holder(s) of any interest in the indebtedness secured by the Deed of Trust This Agreement and the rights and duties of the parties hereunder shall be governed for all purposes by the law of the State of California and the law of the United States applicable to transactions within such state, This Agreement may be executed in multiple counterparts, and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be one and the same instrument with the same signature as if all parties to this Agreement had signed the same signature page, 8. Tenant Certifications, Tenant certifies to Lender, to Tenant's best knowledge, that: 8.1 (a) The Lease is presently in full force and effect with no defaults thereunder bv Borrower or by Tenant and unmodified except as indicated hereinabove, (b) no rent under the Lease has been paid more than thirty (30) days in advance of its due date, and no security or deposits as security have been made thereunder, except as follows: $4,563,00, (c) the address for notices to be sent to Tenant is as set forth in the Lease, or at the Demised Premises, (d) Tenant has no charge, lien, claim or offset under the Lease or otherwise, against rents or other charges due or to become due thereunder, (e) Tenant has accepted possession of the Demised Premises under the Lease, and all items of an executory nature have been completed under the terms of the Lease, including but not limited to, any and all punchlist items and completion of construction of any improvements required under the Lease, and (f) no rentals are accrued and unpaid under the Lease, 8.2 (a) The term of the Lease commenced on May 10, 2004, and the term of the Lease terminates on September 30, 2004, (b) the Lease contains the following option(s) to extend the Lease term: NONE, (c) the Lease contains the following option(s) to purchase all or any portion of the Demised Premises: NONE, and (d) the square footage of the Demised Premises is approximately 3,407 square feet 8.3 (a) Base fixed rent is currently $4,563,00 per month, (b) the monthly additional rent charges currently are NONE (Tenant pays for electricity directly to Southern California Edison) [Le" Taxes, Maintenance, Utilities and Insurance], (c) the next increase in the fixed rent payment is set to occur on NONE, and (d) eleven (11) monthly parking spaces shall be at no charge. All other monthly parking and validation stamps shall be at the parking rates applicable from time to time by Landlord and/or its licensee, 8.4 (a) Tenant agrees not to subordinate the Lease to any second mortgage or deed of trust without Lender's consent, and (b) Tenant has not received notice of any assignment, hypothecation, mortgage, or pledge of Borrower's interest in the Lease or the rents or other amounts payable thereunder. [Signatures continued on the following page, J Subordination, Non.Disturbance & Attornment Agreement IR01l278154 3 6/28/2004 Rev: 5/14/02 IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed as of the date first above written, LENDER: CALIFORNIA BANK & TRUST, a California banking corporation By: Name: Title: TENANT: CITY OF SANTA ANA, a municipal corporation of the State of California OJ~, David N, Ream City Manager By: ATTEST: By: Patricia E. Healy City Clerk APPROVED AS TO FORM: Ç¥1 By: '} .J./tC....3!~ Joseph W, Fletcher 7 City Attorney Subordination, Non-Disturbance & Attornment Agreement IR01/278154 4 6/28/2004 Rev: 5/14/02 EXHIBIT A THE LAND REFERRED TO IS IN ORANGE COUNTY, CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: ALL OF LOTS 1 AND 4, THE EAST 50,00 FEET OF LOT 2, AND THE EAST 50,00 FEET OF LOT 3, ALL IN BLOCK 1 OF THE JACOB ROSS TRACT, IN THE ROSS ADDITION OF THE TOWN OF SANTA ANA, IN THE CITY OF SANTA ANA, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON THAT CERTAIN MAP RECORDED IN BOOK 5, PAGE 582, OF THE MISCELLANEOUS RECORDS OF LOS ANGELES COUNTY, CALIFORNIA. EXCEPT THEREFROM THE EASTERLY 15,00 FEET OF SAID LOTS 1 AND 4. ALSO EXCEPT THEREFROM, A SPANDREL SHAPED AREA BOUNDED EASTERLY BY A LINE PARALLEL WITH AND DISTANT WESTERLY 15.00 FEET, MEASURED AT RIGHT ANGLES, FROM THE EAST LINE OF SAID LOT 4; BOUNDED NORTHWESTERLY BY THE ARC OF A CURVE CONCAVE NORTHWESTERLY HAVING A RADIUS OF 25,00 FEET, BEING TANGENT TO SAID SOUTHERLY AND EASTERLY BOUNDARIES, ALSO EXCEPT THEREFROM ANY AND ALL INTEREST IN THE ABUTTING PORTION OF FOURTH STREET. ALSO EXCEPT ALL OIL, GAS, HYDROCARBON SUBSTANCES AND MINERALS OF EVERY KIND AND CHARACTER, TOGETHER WITH THE RIGHT TO DRILL INTO, THROUGH AND TO USE AND OCCUPY ALL PARTS OF SAID PROPERTY LYING MORE THAN 500 FEET BELOW THE SURFACE THEREOF FOR ANY PURPOSES INCIDENTAL TO THE EXPLORATION FOR AND FROM SAID PROPERTY OR OTHER LANDS, BUT WITHOUT, HOWEVER, ANY RIGHT TO USE EITHER THE SURFACE OF SAID PROPERTY OR ANY PORTION OF SAID PROPERTY WITHIN 500 FEET OF THE SURFACE FOR ANY PURPOSE OR PURPOSES WHATSOEVER, AS RESERVED BY THE PARTIES NAMED IN DEEDS, LEASES AND OTHER DOCUMENTS OF RECORD. Subordination, Non-Disturbance & Attornment Agreement IR01/278154 Exhibit A - Page 1 6/2812004 Rev: 5/14/02 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of Orange On June 30 , 2004, before me, personally appeared David N. Ream 8CLAlJOIA M. FERNANDEZ-SHAW Commission 11133667~ , .' ' Notary Public - California ~ Orange County t.t;Comm. ÐcplresJan 25, 200e Place Notary Seal Above }SS, Claudia M. Fernandez-Shaw, Notary Public, Name and Title of Officer (e.g., "Jane Doe, Notary Public") Namc(S)OfSigne, Gr personally known to me D proved to me on the basis of satisfactory evidence to be the person~) whose nam~ subscribed to the within instrument and acknowledged to me that~~hcithey executed the same in ß/f¡er/th~;l authorized capacity(it:s'), and that by .Qheritheir signature(šTon the instrument the personýif, or the entity upon behalf of which the perso¥ acted, executed the instrument. OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document And could prevent fraudulent removal and reattachment of this form to another document Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name: D Individual D Corporate Officer - Title(s): D Partner -- D Limited D General D Attorney in Fact D Trustee D Guardian or Conservator D Other: '. \\çda-ch\uscrsICShaw\DesktopIGcneral NotaryForm.doc " ,. . " " .. " . " ,", t. . Number of Pages: RIGHT THUMBPRINT I OF SIGNER ~ Top of thumb here ,.' . .. .. . . ..' '.. ..' ,'.. ,. ..' .