HomeMy WebLinkAboutRDA SUBLEASE CITY H 09-07-93AGENDA'S-3
RDA NO. 6
9-7-93
lnter-Com
DATE: SEPTEMBER 7, 1993
TO: WILLIAM A. HUSTON, EXECUTIVE DIRECTOR
FROM: COMMUNITY DEVELOPMENT.DEPARTMENT
SUBJEC~ SUBLEASE OF SECOND FLOOR OF CITY OFFICES AT 15222 DEL AMO
AVENUE
RECOMMENDATION
It is recommended the Redevelopment Agency approve a sublease of
10,243 square feet of the office space at 15222 Del Amo Avenue, on
a month to month basis, to Micro Electronics, Inc. (Micro Center)
and authorize the Agency Executive Director to execute the
Agreement.
FISCAL IMPACT
Micro Electronics, Inc. will pay the Agency $3,500 per month for
the rental of a portion of the office space at 15222 Del Amo
Avenue. The Agency will also receive a security deposit in the
amount of $3,500.
BACKGROUND
On November 6, 1990, the Redevelopment Agency entered into a lease
agreement with Catellus Development Corporation for 24,300 square
feet of office space at 15222 Del A mo Avenue. This office space has
been used as the temporary City Hall during the reconstruction of
the City Hall at 300 Centennial Way. On August 30, the City
reoccupied the City Hall at 300 Centennial Way. The Agency's lease
of the space on Del Amo Avenue expires on April 30, 1994, and the
Agency and the property owner have not found a new tenant for the
building.
Micro Electronics, Inc. is the corporate owner of Micro Center
Computer Stores. Micro Center is proposing to rehabilitate the
former Builder's Emporium facility at 1100 Edinger Avenue. The
design review and the proposed financial 'assistance program for
Micro Center will be considered by the City Council and the
Redevelopment Agency on September 7th.
Micro Center has indicated to the Agency that it needs office space
before and immediately after the opening of its new store. This
space is needed for general office purposes, employee recruitment
and employee training. Because of its proximity to the new store
and the City's vacation of the office space, Micro Center has
requested a sublease of a portion of the space the City is
vacating.
PROPOSED SUBLEASE TERMS
Micro Center has requested the sublease of approximately 7,216
square feet of office space on the second floor of 15222 Del Amo.
However, it is not possible, nor financially feasible, for the
Agency to partition the space to provide only what they have
requested. Therefore, the sublease agreement provides for Micro
Center to lease the entire second floor, or 10,234 square feet.
The Agency is currently paying $.75 per square foot for its space.
However, the current market rate for similar space is approximately
$.60 - $.65 per square foot. The proposed agreement is based on the
market rate of $.65 per square foot. In addition', since the Agency
is subleasing this space on an "as is" basis, and not providing the
type of tenant improvements which would normally be provided, such
as repainting the area, cleaning the carpets, and other similar
amenities, the proposed lease reduces this $.65 per square foot by
25% to $.49 per square foot.
Since it is the Agency which is requiring Micro Center to sublease
the entire second floor space, when they only requested and need
7,216 square feet, the monthly lease payment is based on only the
7,216 square feet. At a $.49 per square foot lease rate, this is a
monthly rate of $3,536. For simplicity's sake, the Staff has
rounded this to $3500 per month. (The month of September is a
partial month and requires a payment of $2,683.00, based on a daily
rate of $116.67, which is $3,500 divided by 30 days). The term of
the sublease is month-to-month.
The sublease binds Micro Center to all of the provisions of the
lease agreement the Agency has with Catellus Development
Corporation, except where such provisions logically do not or
should not apply. Other than the provisions dealing with the amount
of space being leased, the term of the lease and the monthly
payment, the provisions of the Primary Lease to which Micro Center
is not being held or which have been modified are as follows:
i ·
·
Micro Center is not bound by the Agency's
requirement for a security deposit. A separate
security deposit equal to one month's rent ($3500)
is being charged by the Agency to Micro Center.
--
Micro Center will be charged for utilities, taxes
and assessments, as well as common area costs, for
only that portion of the building (10,243 square
feet) it is subleasing. The Sublease identifies
this as 42.15% of what ~he Agency is billed.
3. Micro Center is being leased the office space on an
"as-is" basis. The provisions of the Primary Lease
concerning the condition of the space are not
applicable.
·
While the Agency has the right under the Primary
Lease to make alterations and modifications to the
lease space, subject to the landlord's approval,
Micro Center is denied this right.
·
The Agency has the right, with the Landlord's
approval, to sublease the space (as is being
proposed). Micro Center will not be allowed to
sublease the space.
·
Micro Center is required to allow reasonable access to
the office space for the purposes of marketing the space.
to a potential long term tenant.
·
Micro Center is required to provide the same level of
insurance as the Agency is required to provide. Further,
this insurance must make the Agency an additional
insured.
The execution of the sublease does not relieve the Agency of any of
its obligations under the terms of the lease.
Pursuant to the prOvisions of the Primary Lease, the Agency has
received written approval of Catellus Development Corporation for
the sublease of this space.
RECOMMENDATION
The staff believes that the sublease of 10,243 square feet of
Agency leased office space is beneficial to the Agency, since it
will offset some of the on-going lease costs the Agency will incur
until the expiration of the Primary Lease· The staff also believes
that Micro Center wiil benefit from the sublease because it
provides them-necessary office space within close proximity to
their new retail outlet. For these reasons, the staff recommends
the Agency approve the attached Sublease ~%greement and authorize
the Agency Executive Director to execu~he agreement.
-C~hristine A. s~i~g~-toH ~~ ~~
Assistant City Manager op ogram Manager
rzimmer\ccmicrls, rpt
SUBLEASE
BETWEEN THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY
MICRO ELECTRONICS, INC.
THIS AGREEMENT is entered this seventh (7th) day of
September, 1993, by and between the TUSTIN COMMUNITY'REDEVELOPMENT
AGENCY (the "Tenant") and MICRO ELECTRONICS, INC. (the
"Subtenant").
RECITALS
A. The Agency is the Tenant for public purposes of certain
real property pursuant to the "Triple Net Lease between Catellus
Development Corporation, as Delaware Corporation, as landlord, and
the Tustin 'Community Redevelopment Agency, as Tenant", (the
"Primary Lease"), attached~'hereto as Exhibit A and incorporated
herein by reference.
B. The Subtenant desires to sublease a portion of the real
property (the "Premises") from the Tenant -on a month to month
basis, and the Tenant desires to sublease the Premises to the
Subtenant subject to the terms and conditions of this Agreement.
follows:
NOW, THEREFORE, the Tenant and the Subtenant agree as
1. Premises. Subject to the terms and conditions of
this Agreement, the Subtenant subleases the Premises from the
Tenant. The Premises total seven thousand' two hundred sixteen
(7,216) square feet (are shown in Exhibit B, attached hereto). The
Subtenant shall have exclusive possession of the premises for the
duration of this Agreement.
2. Term. The term of the tenancy created by this
Agreement is month-to-month. The term of this Agreement shall
commence on September 8, 1993.
This Section 2 shall relieve the Subtenant of the
provisions of Section 3, including Subsections 3.1, 3.2 and 3.3 of
the Primary Lease.
- 3. Rent. Subtenant shall pay to Tenant as rent in the
amount of forty-six cents ($.46) per square foot or Four Thousand
Six Hundred Ninety dollars ($4,649.00) each month. The rental
amount shall be paid, in advance, on or before the first day of
each month. The initial payment shall be paid by the Subtenant
prior to approval of this Agreement by Tenant and shall'be prorated
based on a thirty (30) day month, from the approval of this
Agreement on September 7, 1993. The daily rental rate during this
first month is calculated at One Hundred Fifty-six and Thirty-three
one hundredths dollars' ($156.33). The amount of the first payment,
for 23 days, shall be Three Thousand Five Hundred Ninety-six
dollars ($3,596.00).
4. Late Charqe. In the event Subtenant does not pay
the entire rental amount on or before the first day of each month,
there shall become due and owing a late charge in the amount of
.833% (10% per annum) on the amount of rent outstanding. Said late
charge shall be collectible as rent and may serve as a basis for a
notice to pay rent or quit.
5. Advance Rental; Security Deposit. Concurrently with
Subtenant's execution of this Sublease, Subtenant shall deposit
with the Tenant the sum of Three Thousand Five Hundred Ninety-six
dollars ($3,596.00) for the first partial month of the term hereof,
and the sum of Four Thousand Six Hundred Ninety dollars
($4,649.00), which sum shall be held by the Tenant without
liability for interest, as security for the faithful observance and
performance by Sublessee of all terms, covenants and conditions of
the Sublease to be observed and performed by-Subtenant during the
Term of this Agreement.
If at any time during the term of this Sublease,
Subtenant should fail to observe and perform any of the required
terms, covenants and conditions of this Sublease, the Tenant, at
its option, may utilize said deposit, or any part thereof, for any
damages or rents which may accrue or which may be payable to it by
Subtenant. If the Tenant elects to utilize all or part of the
security deposit, Subtenant shall, upon written notice from the
Tenant, forthwith deposit the amount necessary to restore the
security deposit to its original amount, plus all increases
thereto. It is the express intent of Subtenant and the Tenant that
the Tenant shall hold a security deposit in the aforesaid amount at
all times during the Term of this Sublease and any extension or
renewal thereof. Subtenant's failure to restore the full amount of
security deposit with five (5) days after written notice from the
Tenant shall constitute a material breach of this Sublease.
This Section 9 of the.Sublease shall relieve Subtenant of
the provisions of Section 5 of the Primary Lease.
6. Utilities; Taxes and Assessments. The Subtenant
shall be responsible to pay its proportionate share of any and all
costs-for utilities, including, without limitation, electricity,
gas, water, and refuse collection, except for those utilities and
services provided by Landlord under the Primary Lease as common
services to all subtenants of the Landlord's property, and for all
taxes and assessments, incurred during the term of. this Sublease.
This proportionate share is hereby defined as forty-two and fifteen
one-hundredths percent (42.15%). Tenant shall provide a written
request for payment to Subtenant within thirty (30) days after
receiving a request for payment for utilities, taxes and/or
assessment. This request, shall detail the total amount for which
Tenant is obligated and the amount to be paid by Subtenant.
Subtenant shall make payment to the Tenant within thirty (30) days
of receipt of the request for payment.
7. Additional Payments. Ail charges, other than rent,
required to be paid by Subtenant under this Sublease shall be due
and payable within thirty (30) days after demand as additional
rent. Subtenant's failure to pay any such amounts or charges when
due shall carry with it the same consequences as Subtenant's
failure to pay rent.
This Section 7 of the Sublease shall relieve Sublessee of
the provisions of Section 4, including Subsections 4.1, 4.2, 4.3,
and 4.4 of the Primary Lease.
8. Use of Premises. The Premises shall be used only
for the purpose of general offices of the Subtenant and as an
employment and training center for the prospective employees of the
Subtenant for their retail outlet being opened in the City of
Tustin. The use of the premises for any other purpose shall
constitute a material breach of the Agreement unless Subtenant has
obtained the prior written consent of the Tenant to such other use.
Subtenant shall use the Premises only in compliance with all
applicable federal, state and local statutes, ordinances, rules and
regulations. The use of the Premises in any manner which violates
any applicable federal, state or local statute, ordinance, rule or
regulation constitutes a material breach of the Agreement.
9. Landlord Approval. Pursuant to Section 12.1 of the
Primary Lease, the approval of Catellus Development Corporation
(the "Landlord"), in writing, is required to allow the Tenant to
sublease to the Subtenant. This approval, in writing, has been
given and is attached hereto as Exhibit C.
10. Sublessee Acceptance of Rights and Obliqations of
Tenant. Subtenant hereby receives all rights of the Tenant
pursuant to the Primary Lease and is responsible for all
obligations of Tenant pursuant to the Primary Lease, except as
modified herein. Tenant is not responsible for the obligations of
the Landlord under the Primary Lease, but shall, to a reasonable
extent, exercise any rights it has Subtenant under the Primary
Lease in favor of the Subtenant of this Sublease.
11. Condition of Premises. The Tenant shall deliver the
Premises to Subtenant in an ,'as-is" condition. The Tenant shall
have no other obligation concerning the condition of the Premises
than outlined in this Section 10. The Tenant does not make any
other warrant concerning the condition of the Premises.
The Tenant shall not be bound by the obligations of the
Landlord outlined in Section 6.3 of the Primary Lease. The Tenant
shall notify Landlord of any deficiencies and shall reasonably
exercise its rights as Subtenant pursuant to the Primary Lease to
effect such repairs as may be required of the Landlord pursuant to
the Primary Lease. Failure of Landlord to make such repairs shall
not make the Tenant liable, in any way, for such repairs.
12. Maintenance of Premises. Subtenant has the sole
obligation to maintain and repair the Premises in a clean and safe
condition. The failUre of the Subtenant to maintain the Premises
in a clean and safe condition constitutes a material breach of this
Agreement.
13. Alteration of Premises. subtenant shall make no
alterations or modifications to the Premises.
14. Assiqnment and Sublettinq. The Subtenant shall not
assign this Agreement or sublet the premises to any other person or
entity.
15. Payment of Common Area Costs. Subtenant shall be
responsible for its proportionate share of the Tenant's obligations
under Section 48.3 of the Primary Lease for the term of this
Agreement. Such proportionate share shall be the percentage of the
Premises which are the subject of 'this Sublease to the total
Premises· which are the subject of the Primary Lease. This
proportionate share is hereby defined as forty-two and fifteen one-
hundredths percent (42.15%).
16. Indemnification. The Subtenant shall indemnify,
defend and hold harmless the Tenant, its members, officers,
directors, employees, agents, attorneys, representatives,
successors, and assigns from and against all damage, loss, cost of
liability, including result of the Subtenant's occupation of the
premises. The Tenant may choose attorneys of its own choice in any
legal action.
17. Insurance. Subtenant shall provide comprehensive
general liability insurance, comprehensive automobile liability
insurance, workers' compensation insurance, employer's liability
insurance and all risk property insurance pursuant %o and in the
amounts proscribed in Section 8 of t_he Primary Lease. Subtenant is
bound by all provisions of Section 8 of the Primary Lease to the
same extent the Tenant is bound, with the exception that Subtenant
shall be bound to provisions of Subsection 8.2 of the primary Lease
only to its proportionate share of the total floor area of the
Premises as defined in the primary Lease. This proportionate share
is hereby defines as'forty-two and fifteen one hundredths percent
(42.15%). In all insurance policies and riders, the Tenant shall
be named as an additional insured. To the extent that Section 8
of the Primary Lease requires submittal of insurance policies,
riders and/or other documents or notices, such insurance policies,,
policy riders and/or other documents and notices shall be provided
by Subtenant to the Tenant.
18. Access to Premises. Subtenant recognizes that the
Tenant is actively seeking a long term subtenant for the premises
and shall not withhold permission to the Tenant or its
representatives for access to the premises for the purpose of
marketing the Premises to prospective subtenants.
19. Termination of Tenancy. -Either party may terminate
this Agreement and the tenancy created herein by serving the other
party with a written notice of termination. The termination shall
not be effective until thirty (30) days'after service of notice of
termination by the serving party.
20. Notices. Any notice required by this Agreement may
be served personally or by certified mail, return receipt
requested, addressed:
If to the Tenant:
Tustin Community Redevelopment Agency
300 Centennial Way
Tustin, CA 92680
ATTN: Executive Director
If to the Subtenant:
Micro-Electronics, inc.
1555 West Lane Avenue
Columbus, OH 43214
Attn: Mr. Richard Mershad
The Tenant and the Subtenant each declare that each has carefully
read and reviewed this Sublease and each term and provision
contained herein and, by execution of this Sublease, show their
informed and voluntary consent thereto. The parties hereby agree
that, at the time this Sublease is executed, the terms of this
Sublease are commercially reasonable and effectuate the intent and
purpose of subtenant and sublessee with respect to the premises.
IN WITNESS WHEREOF, the Tenant and the Subtenant have signed this
sublease as of the date first above written.
TUSTIN REDEVELOPMENT AGENCY
MICRO ELECTRONICS, INC
By
Jim Potts, Chairman
ATTEST:
Name:
Title:
City Clerk
APPROVED AS TO FORM:
City Attorney
EXHIBIT A
PRIMARY LEASE
DUPLICNi'E ORi~II~
L-5040
1502L
TRIPLE NET LEASE
Between
CATELLUS DEVELOPMENT CORPORATION,
a De]aware corporation, as Landlord.
and
TUSTIN COMMUNITY REDEVELOPMENT AGENCY,
as Tenant
TABLE OF CONTENTS
Paqe
·
e
me
Se
e
e
Be
e
Parties ........... : ·
Premises .............
Term
3.1
3.2
3.3
Initial Term ......
Completion of ~remises ....
Early Occupancy ......
Rent
4.1
4.2
4.3
4.4
Commencement of Monthly Rent . . .
Initial Base Rent ......
Rental Adjustments .....
Additional Payments; No Offset. . .
Advance Rental; Security Deposit. . .
Use
6.1 · Use ..........
6.2 Compliance with Law .......
6.3 Condition of Premises .....
Maintenance, Repairs and Alterations '
7.1
7.2
7.3
7.4
7.5
Tenant' s Obligations .....
Surrender ........
Landlord's Rights ......
Landlord's Obligations ....
Alterations and Additions ....
Insurance; indemnity
8.1
8.2
B.3
8.4
8.5
Insurance to be provided by Tenant. .
Property Insurance on the Building. .
Hatver of Subrogation .....
Indemnity ........
Exemption of Landlord from Liability .
Damage or Destruction
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
Definitions .......
Partial Damage-- Insured Loss· . .
Partial Damage -- Uninsured Loss . .
Total Destruction ......
Damage Near End of Term ....
Abatement of Rent; Tenant's Remedies .
Termination -- Advance Payments . .
Haiver .......
8
9
9
9
lO
lO
lO
ll
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
2?.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
Real Property Taxes
lO.1 Payment of Taxes .....
10.2 Definition of "Real Property Tax .
10.3 3oint Assessment .....
10.4 Personal Property Taxes . · ·
Utilities ........
Assignment and Subletting
12.1 Consent 'of Landlord . . ·
12.2 No Release of Tenant . .
12.3 Tenant to Keep Sublease PrJfits
Defaults; Remedies
11
11
11
12
12
...... 12
...... 12
...... 12
13.1 Defaults ........
13.2 Remedies .......
13.3 Default by LanJlorJ .....
13.4 Late Charges .......
13.5 Impounds.. .......
Condemnation .........
BroKer' s Fee .........
Estoppel Certt fi cate .......
Landlord's Liability. ,.. · ....
Severabi 1 tty .......,:
Interest on Past-due Obligations . . .
Time of Essence ........
·
Additional Rent ......-
A~endments
Incorporation of Prior Agreements;
Nottces ..........
Waivers ..........
Recording ......
HOlding Over- Lease Term- ~artial ~xtension
Cumulative Remedies .......
Covenants and Conditions. . ·
Binding Effect; Choice of Law .
Subordination .....
·
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e
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e
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e
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e
o
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e
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e
o
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·
e
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o
o
o
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·
e
o
·
o
Attorney's Fees .....
Landlord's Access ....
Auctions .......
Signs .......
Merger, . ......
Consents .......
Quiet Possession .....
Security Measures ....
Easements .....
Performance ~nder Protest . .
Authority · ' .....
Financial Statements . . .
12
14
14
14
15
15
15
16
16
16
16
16
17
17
17
17
17
18
18
lB
lB
18
18
19
19
19
19
19
19
2O
2O
2O
2O
43.
44.
45.
46.
47.
48.
Landlord' s Work ........
Pa rkt ng ......
Force HaJeure - ~navJida~le 6e ay . . .
CC&R' s ......
Hazardous Ha~eri~ls; Environmental Compliance
Common Areas .........
48.1 Landlord's Maintenance of Coe~non Areas.
48.2 Control of Common Areas . . .
48.3 Payment of Common Area Cos~ . . .
20
21
22
22
22
23
23
23
24
L-5040
CA0591512
1502L
TRIPLE NET LEASE
BETWEEN CATELLUS DEVELOPMENT CORPORATION, AS LANDLORD
AND
TUSTIN COMMUNITY REDEVELOPMENT AGENCY, AS TENANT
1. Parti es.
This Lease is effective as of the 6th day of November, 1990, and is
made by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation
("Landlord"), and the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, ("Tenant").
2. Premises.
Landlord hereby leases to Tenant, and Tenant leases from Landlord,
for the term, at the rental, and on all of the terms and conditions set forth
herein, certain real property in the County of Orange, State of California,
consisting of approximately 24,300 square feet (the "Premises") of a larger
building containing approximately 59,B2B square feet commonly Known as 15222
Del Arno Avenue, Unit B, Tustin (the "Building'), together with the appurtenant
right to use, in common with others, the lobbies, entrances, stairs, elevators
and other public portions of the Building and the property designated by
Landlord for common Use by the tenants, sub~)ect to the terms and conditions
set forth in this Lease. The Premises, Building and common areas are shown on
the site and floor plans attached hereto as Exhibits "A-l", "A-2", and "A-3"
and made a part hereof.
3. Term.
3.1 Initial Term.
Ca) The "Initial Term" of this Lease shall be thirty-six C36)
months, commencing on the first (lst) day of the first full month following
the earliest of (i) the day on which Landlord files or causes to be filed with
the City of Tustin (if required) and delivered to Tenant an architect's notice
of substantial completion, or similar written notice that Landlord's Work (as
defined in paragraph 43) is substantially complete, (ii) the day on which
Tenant commences substantially normal business operations in the Premises, or
(iii) the day on which a certificate of occupancy is issued for the Premises.
(the "Commencement Date"). Notwithstanding the foregoing, if such event
occurs on the first day of a month, that date shall be the Commencement Date.
Landlord and Tenant shall execute an amendment to this Lease stating the
Commencement Date, promptly upon determination of such date. Tenant's failure
to execute and deliver such amendment upon Landlord's request shall constitute
a material default under this Lease. The parties goal is that the
Commencement Date will be on or before April l, 1991.
(b) In the event of any delay in Tenant's occupancy caused in
whole or in part by Tenant, its agents, or contractors, or by force majeure,
there shall be no change in the Commencement Date unless there has also been a
delay on the part of Landlord in delivering possession of the Premises, in
which event the period of delay attributable to Tenant or to force ma~)eure
shall be credited against any time delays chargeable to Landlord in
determining the rent commencement date.
3.2 ~omoletton of the Premises. Landlord shall undertake the
construction of Landlord's Work and shall diligently prosecute such
construction to completion.
3.3 Early Occupancy. The period of time, if any, from the date
possession of the Premises is delivered to Tenant to the Commencement Date
shall be the 'Early Occupancy Period". Tenant's occupancy of the Premises
during the Early Occupancy Period shall be sub~)ect to all terms and conditions
of this Lease, including without limitation the rental provisions, but such
period of possession and occupancy shall not extend the Lease Term or change
the Commencement Date. Rent for such period shall be at the rate set forth in
paragraph 4.2, pro-rated on the basis of a 30-day month and shall be due and
payable on or before the Commencement Date.
4. Rent
4.1 Commencement of Monthly Rent. Tenant shall pay to Landlord as rent
for the Premises, monthly payments as set forth beloW, in advance, on the
first day of each month of the term hereof. Rent for any period during the
term hereof which is for less than one month shall be a pro rata portion of
the monthly installment based on a 30-day month. Rent shall be payable in
lawful money of the United States to Landlord at Department 4580, Pasadena,
California g1050-4580 or to Such other persons or at such other places as
Landlord may designate in writing.
4.2 Initial Base Rent. The initial ba~e rent shall be FIFTEEN THOUSAND
SEVEN HUNDRED NINETY FIVE DOLLARS ($15,795.00) per month Commencing on the
Commencement Date. Notwithstanding the foregoing, provided Tenant is not then
in default under any terms of the Lease, Landlord hereby waives the base rent
payable for the second (2nd), third (3rd) and fourth (4th) months of the
Initial Term. Such waiver applies to base rent only and shall not apply to
any other sums payable under the Lease.
4.3 Rental Adjustments. Commencing on the first day of the thirteenth
(13th) and twenty-fifth (25th) months of the Initial Term, the initial base
rent set forth in paragraph 4.2 shall automatically and without prior notice
increase as follows:
Months 13 - 24
Months 25- 36
$17,010.00 per month
$18,225.00 per month
4.4 Additional Payments: NO Offset. All sums of money or charges
(other than rent which shall be payable in the manner elsewhere provided in
this Lease) required to be paid by Tenant under this Lease shall, except where
provided to the contrary in this Lease, be due and payable within thirty (30)
days after demand as additional rent. 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. All payments under this Lease shall be made in
1/23/91
full and vtthout offset or deduction of any ktnd. All payments of rent,
additional rent and other sums hereunder shall be deemed to be payments on
account. Neither the acceptance by Landlord of any rent, additional rent or
other sums in an amount which is less than the amount due and payable pursuant
to thts Lease nor the fatlure of Landlord to tssue a statement or invoice
therefor, nor the issuance of a monthly statement showing as due and payable
an amount less than is properly due and payable pursuant to the terms of this
Lease, nor any delay in Or failure to implement any rent ad:Justment provided
for herein, shall constitute an agreement by landlord modifying this Lease or
a waiver of Landlord's right to receive all sums provided for herein.
5. Advance Rental' Securttv Deposit.
(a) Concurrently with Tenant's execution of this Lease, Tenant
shall deposit with Landlord the sum of FIFTEEN THOUSAND SEVEN HUNDRED NINETY
FIVE DOLLARS ($15,795.00), which is the rent due for the first month of the
term. hereof, and the sum of EIGHTEEN THOUSAND THO HUNDRED THENTY FIVE DOLLARS
($18,'225.00), which sum shall be held by Landlord without liability for
interest, as security for the faithful observance and performance by Tenant of
all terms, covenants and conditions of this Lease to be observed and performed
by Tenant during the Term hereof or any extension thereof. Tenant shall not
use the security deposit to pay the last, or any other, month's base or other
rent hereunder. Landlord may require Tenant to tncrease its security deposit
from time to time to an amount equal to the then current monthly installment
of base rent. If at any ttme during the Term of this Lease, Tenant should
fall to observe and perform any of the terms, covenants and conditions of thls
Lease to be kept and performed by Tenant, Landlord, at its option, may uttltze
Said deposit, or any part thereof, for any damages or rents which may accrue
or which may be payable to it by the Tenant. If Landlord elects tO uttltze
a11 or part of the security deposit, as aforesaid, Tenant shall, upon wrtt~en
nottce from Landlord, forthwith deposit the amount necessary to restore the
security deposit to its original amount, plus. all increases thereto, it being
the express intent of Tenant and Landlord that Landlord shall hold a security
deposit In the aforesaid amount at all times during the entire Term of this
Lease and any extension or renewal thereof. Tenant's fatlure to so restore
the full amount of said security deposit within five (5) days after written
notice from Landlord shall constitute a material breach of this Lease.
Notwithstanding the foregoing, provided Tenant is the Tusttn Community
Redevelopment Agency and is not in default under any of the provisions of this
Lease, no security deposit shall be required.
6. Use.
6.1 Use. The Premises shall be used and occupied only for general
administrative offtce~ and storage and for any other use which is reasonably
comparable, and for no other purpose.
6.2 Compliance with Law.
(a) Landlord warrants to Tenant that the Premises, as of the
Commencement Date, but without regard to the use for which Tenant will use the
Premises, will not violate any covenant or restriction of record, or any
applicable building code, regulation or ordinance in effect on the
1/23/91
Commencement Date. In the event it is determined that this warranty has been
violated, then it shall be the obligation of the Landlord, after written
notice.from Tenant, to promptly, at Landlord's sole cost and expense, rectify
any such violation. In the event Tenant does not give Landlord written notice
of the violation of this warranty within thirty (30) days after Tenant becomes
or, in the exercise of reasonable care, should have become aware of any such
violation, the correction of same shall be the obligation of the Tenant at
Tenant's sole cost.
(b) Except as provided in paragraph 6.2(a), Tenant shall, at
'Tenant's expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record, and
requirements in effect during the term or any part of the term hereof,
regulating the use by Tenant of the Premises, including without 'limitation,
laws pertaining to the storage, use, disposal and reporting of hazardous
substances on the Premises. Tenant shall not use or permit the. u.se of the
Premises in any manner that will tend to create waste or a nuisance or, if
there' shall be more than one tenant in the Building, shall tend to disturb
such other tenants.
6.3 Condition of Premises.
(al Landlord shall deliver the Premises to Tenant clean and free
of debris and shall provide Tenant access to the Premises prior to the
Commencement Date for the purpose of installing fixtures, equipment and tenant
improvements. Landlord warrants to Tenant that the plumbing, lighting,
heating, and loading doors in the Premises shall be in good operating
condition on the Commencement Date. In the event that any of such items are
not in good operating condition on the Commencement Date, Tenant shall give
Landlord written notice of such condition within thirty (30) days following
the Commencement Date and Landlord shall promptly and at its sole cost effect
necessary repairs. .Tenant's failure to give such written notice to Landlord
within thirty (30) days after the Commencement Date shall terminate Landlord's
obltgations hereunder.
(b) Landlord further warrants the parking lot surface, Building
foundations, roof, and walls for a period of one (1) year following the
Commencement Date, except for normal wear and tear or abuse. In the event of
a failure or defect in any of such components, Tenant shall give Landlord
written notice of such condition within thirty (30) days following discovery
and Landlord shall promptly and at its sole cost effect necessary repairs.
Tenant's failure to give such written notice to Landlord within thirty (30)
days following'discovery of such a condition shall terminate Landlord's
obligations hereunder.
(c) Except as otherwise provided in this Lease, Tenant hereby
accepts the Premises in their condition as of the Commencement Date or the
date that Tenant takes possession of the Premises, whichever is earlier,
subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Premises, and any
covenants or restrictions of record, and accepts this Lease subject thereto
and to all matters disclosed thereby and by any exhibits attached hereto.
Tenant acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the present or future suitability of the
Premises for the conduct of Tenant's business.
7. Maintenance. Repairs and Alterations.
7.1 ~Tenant' $ Ob!tqattons. .
(a) Except as provided in paragraphs 6.3 (a), (b), (c) and
paragraph 7.4, Tenant shall keep in good order, condition and repair the
Premises and every part thereof, (whether or not such portion of the Premises
requiring repair, or the means of repairing the same are r.easonably or readily
accessible to Tenant, and whether or not the need for such repatr:s occurs as a
result of Tenant's use, any prior use, the elements or the age of such portion
of the Premises) including, without limiting .the generality of the foregoing,
all plumbing, heating, ventilating, electrical, lighting facilities and
equipment within the Premises, fixtures, interior walls, ceilings, floors,
windows, doors, plate glass and skylights. NOtwithstanding the foregoing,
Tenant shall be entitled to the benefit of any warranties provided by
contractors or suppliers in Connection with the construction of the Buildings
and tenant improvements.
(b) Tenant shall maintain the Premises in a neat, attractive and
orderly condition at all times.
7.2 ~L~_~Ltz. On the last day of the term hereof, or on any sooner
termination, Tenant shall surrender the Premises to Landlord in the same
condition as when received, ordinary wear and tear (which includes the effect
of natural elements) excepted, clean and free of debris. Tenant shall repair
any damage to the Premises occasioned by the installation or removal of
Tenant's trade fixtures, furnishings and equipment. Notwithstanding anything
to the contrary othervise stated in this Lease, Tenant shall leave the air
lines, power panels, electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fenctmg on the Premises in good
operating condition.
7.3 Landlord's Rtahts. If Tenant fails to perform Tenant's obligations.
under this paragraph 7, or under any other paragraph of this Lease., Landlord
may at its option (but shall not be required to) enter upon the Premises after
thirty (30) days' prior written notice to Tenant (except in the case of an
emergency, in which case no notice shall be required), perform such
obligations on Tenant's behalf and put the same in good order, condition and
repair, and the cost thereof together with interest thereon at the maximum
rate then allowable by law shall become due and payable as additional rental
to Landlord together with Tenant's next rental installment.
7.4 L)ndlord's Obliqations.
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(a) Landlord shall be responsible for the maintenance and repair,
at Landlord's sole cost and expense, of the foundations, exterior roof and
exterior walls of the Building, (excluding painting of the exterior walls),
except for repairs required as a result of roof penetrations or building
modifications made o~ damage caused by Tenant, its employees, agents, or
contractors, which s~.all be the responsibility of Tenant.
1/23/91
-5-
(b) Landlord shall have the right to procure and maintain, at
Tenant's expense, contracts for the maintenance and repair of the heating,
ventilating and air-conditioning system for the Premises. Tenant sh~ll
reimburse Landlord, upon demand, for the cost thereof.
7.5 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written consent
make any alterations, improvements, additions, or Utility Installations in, on
or about the Premises, except for non-structural alterations not exceeding
$10,000 in costs per proj)ect. In any event, whether or not in excess of
$10,000 in cost, Tenant shall make no change or alteration to the exterior of
the Premises nor the exterior of the building on the Premises without
Landlord's prior written consent. As used in this paragraph 7.5 the term
"Utility Installation" shall mean air lines, power panels, electrical
distribution systems, exterior lighting fixtures, space heaters, air
conditioning, plumbing, and fencing. Landlord may require that Tenant remove
any or all of said alterations, improvements, addttiohs or Utility
Installations at the' expiration of the term, and restore the Premises to their
prior condition. Should Tenant make any alterations, improvements, additions
or Utility Installations without the prior approvai of Landlord, Landlord may
require that Tenant remove any or all of the same. Any alterations and
additions installed or performed by Tenant shall comply vtth all applicable
building codes, ordinances and similar requirements.
(b) Any alterations, improvements, additions or Utility
Installations in, or about the Premises that Tenant shall desire' to make and
which require the consent of the Landlord shall be presented to Landlord in
written form, vith proposed detailed plans. If Landlord shall give its
consent, the consent shall be deemed conditioned upon Tenant acquiring a
permit to do so from appropriate governmental agencies, the furnishing of a
copy thereof to Landlord prior to the commencement of the work and the
compliance by Tenant of all 'condittons of said permit in a prompt and
expeditious manner.
(c) Tenant shal.1 pay, when due, all claims for labor or ~terials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Tenant shall
give Landlord not less than ten (10) days' notice prior to the commencement of
any work in the Premises, and Landlord shall have the right' to post notices of
non-responsibility in or on the Premises as provided by law. If Tenant shall,
in good faith, contest the validity of any such lien, claim or demand, then
Tenant shall, at its sole expense defend itself and Landlord against same and
shall pay and satisfy such adverse ~)udgment that may be rendered thereon
before the enforcement thereof against the Landlord or the Premises, upon the
condition that if Landlord shall require, Tenant shall furnish to Landlord a
surety, bond satisfactory to Landlord in an amount equal to such contested lien
claim or demand indemnifying Landlord against liability for the same and
holding the Premises free from the effect of such llen or claim. In addition,
Landlord may require Tenant to pay Landlord's reasonable attorneys fees and
costs in participating in such action if Landlord shall decide it is to its
best interest to do so.
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(d) Unless Landlord requires their removal, as set forth in
paragraph 7.5(a), all alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Tenant), which may be made on the Premises, shall become the
property of Landlord and remain upon and be surrendered with the Premises at
the expiration of the term. Notwithstanding the provisions of this
paragraph 7.5 (d), Tenant's machinery and equipment, other than that which is
affixed to the Premises so that it cannot be removed without material damage
to the Premises (unless Tenant elects to effect such repairs at its expense),
shall remain the property of Tenant and may be removed by Tenant subject to
the provisions of paragraph 7.2.
8. I~surance: Indemnt tY~
B.1 Insurance to be orovided bY Tenant. Tenant shall obtain and
maintain throughout the term of this Lease the types Of insurance with
coverage in the amounts required on the Insurance Rider attached hereto as
Exhibit "B" and made a part hereof. Tenant shall deliver to Landlord prior to
taking possession of the Premises, and from time to time during the term upon
Landlord's written request, a properly completed certificate of insurance
executed by an authorized representative of the insurer or insurers, or a
certified copy of the policy or policies as evidence of such insurance. In
the alternative, Tenant's agent may furnish a completed standard form of
endorsement, (a copy of which has been attached hereto as Exhibit "C"). If
Tenant fails to comply with this requirement, Landlord may, but shall not be
obligated to, obtain, such insurance and Keep the same in effect and upon
demand, Tenant shall pay to Landlord, as additional rent, the premium cost
thereof. Notwithstanding the foregoing, if Tenant is the Tustin Community
Redevelopment Agency Landlord accepts Tenant's insurance under the Orange
County Titles Risk Management Authority and ?enant's representation that it is
self insured under California Worker's Compensation Employer's Certificate
number 4-0213-01 as complying with the insurance requirements under this
paragraph 8.1.
B.2 Property Insurance on the Buildtnq. Tenant recognizes and
acknowledges that Landlord insures the existing building improvements included
in the Premises under its current blanket fire insurance policy covering loss
or damage over $10,000 due to fire, extended perils, earthquake and flood.
Tenant'agrees to be responsible for its pro rata share (currently 411C of the
59,828 square foot Building) of the first $10,000 of any loss and to pay
Landlord Tenant's pro rata share of the cost of said blanket insurance policy,
in twelve monthly installments with payment of base rent, or at Landlord's
option, in one annual or two semi-annual payments within l0 days after receipt
of a billing therefor. - -
8.3 I~)iver of Subroqation. Tenant and Landlord each hereby release and
relieve the-other, and waive their entire right of recovery against the other
for loss or damage arising out of or incident to the perils insured against
under paragraph 8.2, which perils occur in, on or about the Premises, whether
due to the negligence of Landlord or Tenant or their agents, employees,
contractors and/or invitees. Tenant and Landlord shall, upon obtaining the
policies of insurance required hereunder, give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is contained in
this Lease.
8.4 IndemnitY. Tenant shall promptly indemnify and hold harmless
Landlord from and against any and all claims arising from Tenant's negligent
use or operation of the Premises. or from the negligent conduct of Tenant's
business or from any activity, work or things done, permitted or suffered by
Tenant in or about the Premises or elsewhere and shall further indemnify and
hold harmless Landlord from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any negligence of the
Tenant, or any of Tenant's agents, contractors, or employees, and from and
against all costs, reasonable attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon, and in case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant upon notice from Landlord shall defend the
same at Tenant's expense by counsel satisfactory to Landlord. As between
Landlord and Tenant, 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 proximately caused by Tenant, its employees,
invttees or customers and Tenant hereby waives all claims in respect thereof
against Landlord. Notwithstanding anything in the foregoing to the contrary,
Tenant shall have no obligation to indemnify Landlord for claims resulting
exclusively from the sole negligence of Landlord, its employees, agents and
'contractors.
8.5 [xemotion of Landlord from LiabilitY. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or oth'er
property of Tenant, Tenant's employees, invttees, customers, or any other
person in or about the Premises proximately caused by Tenant, its employees.
invitees or customers, nor shall Landlord be liable for injury to the person
of Tenant, Tenant's employees, agents or contractors, whether such damage or
injury is caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, if said damage or injury results from
conditions arising upon the Premises (unless directly related to a maintenance
obligation of Landlord on the Premstes) or upon portions of the building of
which the Premises are a part, or from other sources or places and regardless
of whether the cause of such damage or injury or the means of repairing the
same is inaccessible to Tenant if caused or contributed to by.Tenant, its
employees, lnvitees or customers. Notwithstanding anything in the foregoing
to the contrary, Landlord shall not be exempt from liability for claims
resulting exclusively from the sole negligence of Landlord, its employees,
agents and contractors.
9. Damaqe or Destruction.
g.1 D~finitions.
Ca) "Premises Partial Damage" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair is less than
50~ of the then replacement cost of the Premises. "Premises Building Partial
Damage" shall herein mean damage or destruction to the Building to the extent
that the cost of repair is less than 50~ of the then replacement cost of the
Building as a whole.
1/23/91
(b) "Premises Total Destruction" shall herein mean damage or
destruction to the Premises to the extent that the cost of repair ts 5Cfi. or
mor, e of the then replacement cost of the Premises. "Premises Building
Destruction" shall herein mean damage or destruction to the Building to the
extent that the cost of repatr is 504 or more of the then replacement cost of
the Buildings ~s a whole.
(c) "l~nsured Loss" shall herein mean d~mage or destruction whtch
was caused by an event required to be covered by the Insurance descrY, bed
paragraph 8. g
g.2 Parttal Damaqe--Insured Loss. Sub~lect to the provtsJons of
paragraphs g.4, 9.5 and 9.6, If at an)' ttme durJng the term of this Lease
there ts damage which ts an Insured Loss and which falls into the
classification of Premtses~-Parttal DaJ~age or Premises Building Parttal Damage,
then Landlord shall, at Landlord's expense, repair such d~mage, but not
Tenant's fixtures, equipment or tenant improvements unless the s~me have
become a part of the Premises pursuant to paragraph 7.5 hereof, as soon as
reasonably possible and thts Lease shall continue tn full force and effect.
9.3 Partial Damaqe--Uninsvred Loss. Sub,leer to the provisions of
paragraphs 9.4, 9.5 and 9.6, If at any time during the term of this Lease
there ts damage which ts not an Insured Loss and which falls within the
classification of Premises Partial D~mage or Premises Butldlng Parttal D~mage,
unless such damage ts negligently or intentionally caused by Tenant (tn which
event Tenant shall make the repairs ~t Tenant's expense), Landlord may
Landlord's optton either (t) repair such damage as soon as reasonably possible
at Landlord's expense, in vhtch event thts Lease shall conttnue tn full force
and effect, or (tl) give written nottce to Tenant wtthtn thtrty (30) da~vs
after the date of the occurrence of suc'h damage of Landlord's tntentlon to
cancel and terminate tht s Lease, as of the date of the occurrence of such
damage. In the event Landlord elects to give such notice of Landlord's
intention to cancel and terminate tht s Lease, Tenant shall have the right
within ten (10) days after the receipt of such notice to give vrttten notice
to Landlord of Tenant's intention to repair such damage at Tenant's expense,
without reimbursement from Landlord, In ~htch event thts Lease shall continue
in full force and effect, and Tenant shall proceed to make such repairs as
soon as reasonabl~v possible. If Tenant does not give such ~ottce withtn such
lO-day per~od this Lease shall be cancelled and terminated as of the date of
the occurrence of such damage.
9.4 TOtal Destruction. If during the term of this Lease there is
damage, whether or not an [nsured Loss, (Including destruction requtred by any
authorized publlc authority), which falls into_the classification of Premises
Total Destruction or Premtses Building Total Destruction, this Lease shall
automatically terminate as of the date of such total destruction unless Tenant
continues to pay rent as it comes due and without reduction and, within sixty
(60) days of such date. gives Landlord written notice of its intent to
continue the Lease and fully repair and restore the Premises and thereafter
promptly commences and pursues such repair and restoration to completion.
1/23/9l
-- 9 --
9.5 D~m~)ae Near End of Term.
(a) If at any time during the last one hundred eighty (1BO) days
of the term of this Lease there is damage, whether or not an Insured Loss,
which falls within the classification of Premises Partial Damage, Landlord may
at Landlord's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Tenant of Landlord's
election to do so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.5(a), in the event that Tenant has
an option to extend or renew this Lease, and the time within which said option
may be exercised has not yet expired, Tenant shall exercise such option, if it
is to be exercised at all, no later than thirty (30) days after the occurrence
of an Insured Loss falling within the classification of Premises Partial
Damage during the l~st six months of the term of this Lease. If Tenant duly
exerc.tses such option during said thirty (30) day period, Landlord shall, at
Landlord's expense, repair such damage as soon as reasonably possible and this
Lease shall continue in full force and effect. If Tenant .fails to exercise
such option during said thirty (30) day period, then Landlord may at
Landlord's option terminate and cancel this Lease as of the expiration of said
thirty (30) day period by giving written notice to Tenant of Landlord's
election to do so within l0 days after the expiration of said thirty (30) day
period, notwithstanding any term or provision in the grant of option to the
contrary.
..
·
9.6 Ab~)tement of Rent: Tenant's Remedies.
(a) In the event of damage described in paragraphs 9,2 or 9.3, and
Landlord or Tenant repairs or restores the Premises pursuant to the provisions
of this paragraph 9, the rent payable hereunder for the period during which
such damage, repair or restoration continues shall be abated in proportion to
the degree to which Tenant's use of the Premises is impaired. Except for
abatement of rent, if any, Tenant shall have no claim against Landlord for any
damage suffered by reason of any such damage, destruction, repair or
restoration. Notwithstanding anything in the foregoing to the contrary,
Landlord shall not be exempt from liability for claims resulting exclusively
from the sole negligence of Landlord, its employees, agents and contractors.
(b) In the event that Landlord is obligated to repair or restore
the Premises under the provisions of this paragraph 9, Landlord shall deliver
to Tenant, within 45 days after the occurrence of the damage, an estimated
cost and completion schedule of such repairs. Htthtn'15 days following
receipt of said schedule, Tenant shall deliver to Landlord (i) its written
notice to proceed with the repairs or (ii) a written notice of Tenant's intent
to effect such repairs by engaging a contractor acceptable to Landlord, at
Landlord's sole cost not to exceed the estimated cost set forth in Landlord's
statement.
9,7 Termination--Advance Payments. Upon termination of this Lease
pursuant to-this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord and in
accordance with Section 1950.7 of the Civil Code.
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1/23/91
9.8 Waiver. Landlord and Tenant waive the provisions of any statutes
which relate to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
_
10.1 Payment of Taxes. Landlord shall forward to Tenant, upon request
therefor, copies of all real property tax bills and assessments levied against
the Premises. Tenant shall pay the real property tax, as defined in
paragraph 10.2, applicable to the Premises during the term of this Lease. All
such payments shall be made to Landlord, in monthly installments with Tenant's
payment of Base Rent, or at Landlord's option, within ten (10) days after
receipt of a billing therefor. If any such taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the term hereof,
Tenant's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year during which this Lease shall be in
effect and only the Premises and the proportion of common area provided in
paragraph 4B.3.
10~2 Definition of "Re~)l Property Tax,. As used herein, the term "real
property tax" shall not include any assessment, tax, fee or charge imposed on
the Premises, or on the real property of which the Premises are a part, by the
City of Tustin or the City of Tustin's Community Redevelopment Agency after
the date of this Lease, which assessment, tax, fee or charge relates to the
development, improvement or mitigation thereof of the Pacific Center East
Pro~)ect. As used herein, the term "real property tax" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax (other than inheritance, personal income or estate taxes) imposed on the
Premises by any authority having the direct or indirect power to tax,
including any city, state, county or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Landlord in the
Premises or in the real property of which the Premises are a part, as against
Landlord's right to rent or other income therefrom, and as against Landlord's
business of leasing the Premises. The term "real property tax" shall also
include any tax, fee, levy, assessment or charge (t) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of "real property tax," or (ii) the nature of
which was hereinbefore included within the definition of "real property tax,"
or (iii) which is imposed as a result of a transfer, either partial or total,
of Landlord's interest in the Premises or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such transfer, or (iv) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
10.3 ,lotnt Assessment. If the Premises are not separately assessed,
Tenant's liability shall be an equitable proportion of the real property taxes
for all of the land and improvements included within the tax parcel, assessed,
such proportion to be determined by Landlord from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonably available. Landlord's reasonable determination thereof, in good
faith, shall be conclusive.
1/23/91
_ ll -
10.4 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Tenant contained in the Premises or elsewhere. Hhen
possible, Tenant shall cause said trade fixtures, furnishings, equipment and
all other personal property to be assessed and billed separately from the real
property of Landlord.
(b) If any of Tenant's said personal property shall be assessed
with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within l0 days after receipt of a written statement
setting forth the taxes applicable to Tenant's property.
ll. Utilities. Tenant shall pay for all water, gas, heat, light, power, ,-
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to
Tenant, Tenant shall pay a proportion of all charges ~otntly.metered with
other prem)ses to be determined in Landlords reasonable'discretion based upon
estimated usage.
12. Assianment and'Subletttnq.
12.1 Consent of Landlord. Tenant shall not assign, transfer, mortgage,
sublet, or otherwise transfer or encumber all or any part of Tenant's interest
in this Lease or in the Premises without Landlord's prior written consent,
which shall not be unreasonably withheld.
12.2 NQ RQlease of Tenant. Regardless of Landlord's consent, no
subletting or assignment shall release Tenant'of its obligation or alter the
primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The~acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof. In the event of default by any assignee of Tenant or
any successor of Tenant, in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against said assignee.
12.3 Tenant to Keeo Sublease Profits. If Tenant subleases the Premises
pursuant to the provisions of this paragraph 12, provided Tenant is not' in
default under this Lease, it shall be entitled to all profits from said
sublease.
13. Defaults; Remedies.
13.1 Defaults. The occurrence of any one or more of the following
events shall constitute.a material default and breach of this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due, where such
raj)ute shall continue for a period of seven (?) business days after written
1/23/91
o
notice thereof from Landlord to Tenant. In the event that Landlord serves
Tenant wtth a Nottce to Pay Rent or Quit pursuant to applicable Unlawful
Detalner statutes such Nottce to Pay Rent or Outt shall also constitute the
not~ce requtred by thls subparagraph.
(c) The failure by Tenant to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Tenant, other than described tn paragraph (b) above, where such fatlure
shall conttnue for z pertod of 30 days after wrttten nottce thereof from
Landlord to Tenant; provlded, however, that tf the nature of Tenant's default
ts such that more th~n 30 days are reasonably requtred for 1ts cure, then
Tenant sh~11 not be deemed to be tn default tf Tenant commences such cure
wtthtn satd 30-day period and thereafter diligently prosecutes such cure to
completion.
(d) (l) The making by Tenant of any general arrangement or
assignment for the beneftt of creditors; (tt) Tenant becomes a "debtor" as
deftned tn 11U.S.C. Section 101 or any successor statute thereto (unless, tn
the case of a petttton ftled agatnst Tenant, the szme ts dismissed w~thtn
60 days), (ttt) the appointment of a trustee or recetver to take possession Of
substantially all of Tenant's assets located at the Premtses or of Tenant's
interest tn this Lease, where possession ts not restored to Tenant w~thtn
30 days; or (tv) the attachment, execution or other 3ud~ctal setzure of
substantially all of Tenant's assets located at the Premtses or of Tenant's
tnterest tn thts Lease, where such setzure ts not d~scharged wtthtn 30 days.
Provided, however,~tn the event that any provision of thts paragraph 13.1(d)
ts contrary to any applicable law, such provision shall be of no force or
effect.
(e) The discovery by Landlord that any financial statement, given
to L~ndlord by Tenant, any asstgnee of Tenant~ any successor-tn-~nterest of
Tenant or any guarantor of Tenant's obligation hereunder, and any of them, was
materially false.
13.2 Remedies. In the event of any such ~ter~al default or breach by
Tenant, L~ndlord may at ~ny ttme thereafter, ~tth or wtthout further nottce or
demand and w~thout 11mtttng Landlord tn the exerctse of any rtght or remedy
whtch Landlord may have by reason of such default or breach'
(a) Terminate Tenant's rtght to possession of the Premises by any
]avfu] means, tn whtch case thts Lease sha]l terminate and Tenant shall
immediately surrender possession of the Premises to Land]ord. In such event
Landlord sha]] be entttled to recover from Tenant ~11 damages tncurred by
tand]ord by reason of Tenant's default tnc]udtng, but not ltmtted to, the cost
of recovering possession of the Premises; expenses of reletttng, Including
necessary renovation ~nd alteration of the Premises, reasonable attorney's
fees, and any rea] estate commission actual]y patd; the worth at the time of
award by the court having ~urtsdtctton thereof of the amount by whtch the
unpatd rent for the balance of the term after the t~me of such award exceeds
the amount of such renta] los~ for the s~me period that Tenant proves could be
reasonab]y avoided; and that portion of the leasing commission pa~d by
Landlord pursuant to paragraph 15 app]tcable to the unexpired term of th~s
Lease.
1/23/91 - 13 -
(b) Matntatn Tenant's right to possession in which case this Lease
shall continue tn effect whether or not Tenant shall have abandoned the
Premises. In such event Landlord shall be entttled to enforce all of
Landlord's rights and remedies under this Lease, Including the right to
recover the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Landlord
under the laws or :)udicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations of
Tenant under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 Default by Landlord. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by
Tenant to Landlord spec.trying the nature of the failure to perform an
obligation: provided, however, that if the nature of Landlord's obligation is
such that more than thirty C30) days are required for performance then
Landlord shall not be in default if Landlord commences performance within
such 30-day. period and thereafter diligently prosecutes the same to completion.
13.4 Late Charaes. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent and other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within fifteen (15) days
after such amount shall be due, then, without'any requirement for notice to
Tenant, Tenant shall pay to Landlord a late charge equal to lC)lC of such
overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of
late payment by Tenant. Acceptance of such late charge by Landlord shall in
no event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the Other rights and
remedies granted hereunder..In the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments of
rent, then rent' shall automatically become due and payable quarterly in
advance rather than monthly, notwithstanding paragraph 4 or any other
provision of this Lease to the contrary.
13.5 Impounds. In the event that a late charge is payable hereunder,
whether or not collected, for three (3) consecutive installments of rent or
any other monetary obligation of Tenant under the terms of this Lease, Tenant
shall pay to Landlord, if Landlord shall so request, in addition to any other
payments required under' this Lease, a monthly advance installment, payable at
the same time as the monthly rent, as estimated by Landlord, for real property
tax and insurance expenses on the Premises which are payable by Tenant under
the terms of this Lease. Such fund shall be ~established to insure payment
when due,'before delinquency, of any or all such real property taxes and
insurance premiums. If the amounts paid to Landlord by Tenant under the
1/23/91
provisions of this paragraph are insufficient to discharge the obligations of
Tenant to pay such real property taxes and insurance premiums as the same
become due, Tenant shall pay to Landlord, upon Landlord's demand, such
additional sums necessary to pay such obligations. ^11 moneys paid to
Landlord under this paragraph may be intermingled with other monies of
Landlord and shall not bear interest. In the event of a default in the
obltgatlons of Tenant to perform under this Lease, then any balance remaining
from funds paid to Landlord under the provisions of this paragraph may, at the
option of Landlord, be applied to the payment of any monetary default of
Tenant in lieu of being applied to the payment of real property tax and
insurance premiums.
14. Condemnation. If any part of the Premises shall be taken or condemned
for a public or quasi-public use, and a part thereof remains which is capable
of occupancy, this Lease shall, as to the part so taken, terminate as of the
date title shall vest in the condemnor, and'the rent payable hereunder shall
be adjusted so that the Tenant shall'be required to pay for the remainder of
the Term only such portion of such rent as the number of square feet in the
part remaining after the condemnation bears to the number of square feet in
the entire Premises at the date of condemnation; but in such event Landlord
shall have the option to terminate this Lease as of the date when title to the
part so condemned vests in the condemnor. If all the Premises or such part
thereof be taken or condemned so that there does not remain a portion capable
of occupancy hereunder, this Lease shall thereupon terminate. If a part or
all of the Premises be taken or condemned, all compensation awarded upon such
condemnation or taking shall go to the Landlord and the Tenant shall have no
claim thereto, and Tenant hereby irrevocably assigns and transfers to Landlord
any right to compensation or damages to which Tenant may be entitled during
the Term of this Lease by reason of the condemnation of all or part of the
Premises.
15. Broker's Fee. Tenant and Landlord represent that they have not engaged
nor are they aware of any person entitled to any brokerage commission or
finder's fee in connection with this Lease transaction excepting only Coldwell
Banker by Landlord and Daum by Tenant. Tenant agrees to indemnify and hold
Landlord harmless from any claims or liability, including reasonable
attorneys' fees, in connection with a claim by any person for a real estate
broker's commission, finder's fee or other compensation based upon any
statement, representation or agreement of Tenant, and Landlord agrees to
indemnify and hold Tenant harmless from any such claims or liability,
including reasonable attorneys' fees, based upon any statement, representation
or agreement of Landlord.
16. Estoppel Certificate.
(a) Tenant shall at any time upon not less than ten (10) days -
prior vritten notice from Landlord execute, acknowledge and deliver to
Landlord and to any prospective purchaser or encumbrancer of the Premises
designated by Landlord a statement in writing (t) stating the commencement
date of the term of this Lease, (ii) certifying that this Lease is unmodified
and in 'full force and effect (o?, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect), (iii) stating the date to which the rent and other charges are
1/23/91
-15-
paid i'n advance, if any, (iv) acknowledging that there are not, to Tenant's
Knowledge, any uncured defaults on the part of Landlord hereunder, or
specifying such defaults if any are claimed, and (v) setting forth such other
matters as may reasonably be requested. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.
(b) At Landlord's option, Tenant's failure to deliver such
statement within such time shall be a material breach of this Lease or shall
be conclusive upon Tenant (t) 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 rent has been paid tn advance.
(c) If Landlord desires to finance, refinance, or sell the
Premises, or any part thereof, Tenant hereby agrees to deliver to any lender
or purchaser designated by Landlord financial statements of Tenant which may
be required by the lender or purchaser. Such statements shall include the
past three years' financial statements of Tenant. All such financial
statements shall be received by Landlord and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17. Landlord's LiabilitY. The term "Landlord" as used herein shall mean only
the owner or owners at the time in question of the fee title or a lessee's
interest in a ground lease of the Premises, and in the event of any transfer
of such title or interest, LandlOrd herein named (and in case of any
subsequent transfers then the grantor) shall be relieved from and after the
date of such transfer of all liability as respects Landlord's obligations
thereafter to be performed, provided that any funds in the hands of Landlord
or the then grantor at the time of such transfer, in which Tenant has an
interest, shall be delivered to the grantee. -The obligations contained in
this Lease to be performed by Landlord shall, subject as aforesaid, be binding
on Landlord's successors and assigns, only during their respective periods of
ownership.
18. Severabtltt¥. The invalidity of any provision of this Lease as
determined by a court of competent ~urisdiction, shall in no way affect the
validity'of any other provision hereof.
19. Interest on Pa~t-due Obliq~t~ons. Except as expressly herein provided,
any amount due-to Land:ord not paid when due shall bear interest at the
maximum rate then al~o~able by law from the date due. P~yment of such
interest shall not excuse or cure any default by Tenant under this Lease,
provided, however, that interest shall not be payable on late charges incurred
by Tenant nor on any ~ounts upon ~htch late charges are paid by Tenant.
20. T~me of E~sence. Time is of the essence.
21. Additional Rent. Any monetary obligations of Tenant to Landlord under
the terms of this Lease shall be deemed to be rent.
1/23/91 _ ~R _
22. Irlcorooratlon of Prior Aareements: Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein.
prior agreement or understanding pertaining to any such matter shall be
effective. This Lease may be modified in writing only, signed by the parties
in interest at the time of the modification. Except as otherwise stated in
thls Lease, Tenant hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the Landlord or any employees or agents of any of said persons has made
any oral or written warranties or representations to Tenant relative to the
cor~ditton or use by Tenant of said Premises and Tenant ack, nowledges that
Tenant assumes all responsibtl!ty regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease except as otherwise specifically stated in this Lease.
23. Notices. An~ nottce required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified mail, and if
given personally or by mail, shall be deemed sufficiently given if addressed
to Tenant or to Landlord at the address noted below the signature of the
respective parttes,-as the case may be. Either party may by notice to the
other specify a different address for notice purposes except that upon
Tenant's taking possession of the Premises, the Premises shal! constitute
Tenant's address for notice purposes. A copy of all notices required or
permitted to be given to Landlord hereunder shall be concurrently transmitted
to such party or parties at such addresses as Landlord may from time to time
hereafter designate by notice to Tenant. Any .notice sent by mail shall be
deemed received two (2) business days after it is sent.
24. H)ivers. No waiver by either party of any provision hereof shall be
deemed a waiver of any other provision hereof-or of any subsequent breach of
the same or any other provision. Landlord's consent to, or approval of, any
act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The acceptance of
rent hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
25. Recordinq. Landlord or Tenant shall upon request execute and may cause
to be recorded a memorandum of this Lease.
26. Holdinq Over - Lease Term Partial Extension. If Tenant remains in
possession of 'the Premises or any part thereof after the expiration of the '
term hereof, such occupancy shall be a tenancy from month to month upon all
the provisions of this Lease pertaining to the obligations of Tenant, but all
options and rights of first refusal, if any, granted under the terms of this
Lease shall be deemed terminated and be of no further effect during said month
to month tenancy. Rent for any such month to month tenancy shall be at the
rate of .80~ per square foot NNN for the first four (4) months and thereafter
150: of the previous months monthly rent.
1/23/91
- 17-
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. Covenants ~nd Conditions. Each provision of this Lease performable by
Tenant shall be deemed both a covenant and a condition.
29. Btndinq Effect: Choice of Law. Sub:)ect to any provisions hereof
restricting assignment or subletting by Tenant and sub;Ject to the provisions
of paragraph 17, this Lease shall bind the parties, their personal representa-
tives, successors and assigns. This Lease shall be governed by the laws of
the State of California.
30. Subordination.
(a) This Lease, at Landlord's option, shall be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the real property of which the Premises are a
part and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall'not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms.
If any mortgagee, trustee or ground lessor shall elect to have this Lease made
prior to the lien of its mortgage, deed of trust or ground lease; and shall
give written notice thereof to Tenant, this Lease shall be deemed to be prior
to such mortgage, deed of trust, or ground lease, whether this Lease is dated
prior or subsequent to the date of said mortgag.e, deed of. trust or ground
lease or the date of recording thereof. ·
(b) Tenant agrees to execute any documents required to effectuate
an attornment, a subordination or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be. Tenant's failure
to execute such documents within l0 days after written demand shall constitute
a material breach and shall be conclusive upon Tenant that this Lease is
subordinated to the lien of any such mortgage, deed of trust or ground lease.
31, AttorneY's Fees. If either party brings an action to enforce the terms
hereof or declare rights hereunder, the prevailing p~rty in any such action,
on trial or appeal, shall be entitled to its reasonable attorney's fees to be
paid by the losing party as fixed by the court.
32. Landlord's Access. Landlord and Landlord's agents shall have the right
to enter the Premises at reasonable times for the purpose of inspecting the
same, showing the same to prospective purchasers, lenders, or lessees, and
making such alterations, repairs, improvements or additions to the Premises or
to the building of which they are a part as Landlord may deem necessary or
desirable. Landlord may at any time place on or about the Premises any
ordinary and usual "For Sale" signs and Landlord may at any time during the
last 120 days of the term hereof place on or about the Premises any ordinary
"For Lease" signs, all without rebate of rent or liability to Tenant.
1/23/91
-18-
33. Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntartl)` or lnvoluntartl)`, an)` auction upon the Premises without first
having obtained Landlord's prior written consent.
34. ~tqns. Tenant shall not place an), stgn upon the Premises or the Building
or the roof of the Butlding without Landlord's prior, written consent.
(al Upon prior written app'roval of Landlord and in accordance with
any applicable ordinance or regulation of the City of Tusttn, Tenant shall be
permitted to install exterior building signage located between the first and
second floor. Drawings, specifications and location of this signage must be
approved by the City and Landlord prior to installation. The cost of such
sign, including permits, fees, construction and installation costs, shall be
the sole expense of Tenant.
(b) Tenant shall be responsible for the installation and
maintenance of its sign. Should Tenant fail to perform any required
maintenance or repair, within thirty (30) days following receipt of written
notice from Landlord to effect said maintenance or repair, Landlord shall have
the right (but shall not be obligated to)undertake repairs and Tenant shall
reimburse Landlord for the cost thereof within ten (10) days from receipt of
invoice.
Cc) Upon the expiration of this Lease, or any sooner termination
thereof, Tenant shall be required to remove its signage and patch the canopy
and facta and paint the patched area to match the surrounding.Building area.
35. Meraer. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not work a
merger; and shall, at the option of Landlord,'terminate all or any existing
subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
36. Consents. Hherever in this Lease the consent of one party is required to
an act of the other party, such consent sha)l not be unreasonably withheld.
37. Ouiet Possession. Upon Tenant paying the rent, for the Premises and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof sub~)ect to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Landlord represent and warrant to Tenant that they are fully authorized and
legally capable of executing this Lease on behalf of Landlord and that such
execution is_binding upon all parties holding an ownership interest in the
Preniises.
38. Security He~$ures. Tenant hereby acknowledges that the rental payable to
Landlord hereunder does not include the cost of guard service or other
security measures; and that Landlord shall have no obligation whatsoever to
provide same. Tenant assumes all responsibility for the protection of Tenant,
its agents and invitees from acts of third parties.
1/23/91
-19-
39. ~_~j_P=~_~_t~t, Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications as Landlord deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall
sign any of the aforementioned documents upon request of'Landlord and failure
to do so shall constitute a material breach of this Lease.
40. Perform)nce Under Protest. If at any time a dispute shall arise as to
any amount or sum of money to be paid by one party to the other under the
provisions hereof, the party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such payment
shall not be regarded as a voluntary payment, and there shall survive the
right on the part of said party to institute suit for recovery of such sum.
If it shall be adjudged that there was no legal obligation on the part of said
party, to pay such sum or any part thereof, said party shall be entitled to
recover such sum or so much thereof as it was not legally required to pay
under the provisions of this Lease.
41. AuthoritY. Each individual executing this Lease on behalf of Tenant
represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of said entity. Tenant shall, within thirty (30)
days after execution of this Lease, deliver to Landlord evidence of such
authority satisfactory to Landlord.
42. Ftn~)nctal Statements, If Landlord desires to 'finance, refinance or sell
the Premises, or any part thereof, Tenant hereby agrees to deliver to any
lender or purchaser designated by Landlord such existing financial statements
of Tenant as may be reasonably requested in writing by such lender or
purchaser. Such statements shall include the. past three years' financial
statements. All such financial statements shall be used only for the purposes
herein set forth. All financial statements required under this Lease shall be
delivered to Landlord or any lender, as applicable, within thirty (30) days of
Landlord's written request therefore. At Landlord's option, Tenant's failure
to deliver those statements within that time shall be a breach of this Lease.
43. Landlord's Work.
(al Landlord shall constrt)ct or cause to be constructed in and to
the Premises, at Landlord's cost not to exceed $150,000 '(the "T.I.
Allowance"), certain tenant improvements, including space planning, permits
and related costs (the "Landlord's Work"), in accordance with Landlord's
building standard, and substantially in accordance with the space plan Cthe
"Space Plan") attached hereto, marked Exhibit "D" and made a part hereof. I_f
said Exhibit is not attached, the Space Plan shall be prepared by Landlord and
submitted to Tenant for approval, which approval shall be given within ten
(10) business days following receipt thereof, and evidenced by Tenant's
signature thereon. Any failure by Tenant to respond within said ten (10)
business day period shall not delay what would otherwise have been the
Commencement Date. Upon approval by both parties, the Space Plan shall be
deemed incorporated herein by reference, although not attached hereto.
1/23/91
(b) The T.I. Allowance shall be used to pay for costs approved by
Landlord and associated with the design, permit process and construction of
Landlord's Work, including but not limited to, architect's fees, plan check
and permit fees, fees for utility and telephone service hook-ups. Any tenant
improvements which Landlord, in its sole discretion, considers specialized,
shall not be covered by the T.I. Allowance and shall be paid in cash by Tenant
directly to Landlord's tenant improvement contractor. In no event shall the
T.I. Allowance be expended for Tenant's equipment, trade ft-xtures, or alarm
system except that Tenant may use any unused T.I. Allowance to cover the cost
of a Hewlett Packard cable site for cabling the Premises ("HP cable"), which
improvement may, at Landlord's sole discretion, remain as a part of the
Premises upon termination of this Lease. Notwithstanding anything in this
Lease to the contrary, Landlord shall have no responsibility regarding the
adequacy, proper installation, maintenance or warranties of the HP cable.
Landlord will assign any assignable ~arranttes concerning the HP cableJt>'Fcv~u~+. ?'
(c) If the actual cost of Landlord's Work exceeds the T.I.
Allowance, for any reason, including without limt.tation, (t) changes required '-~
by the City, or other local, state or federal governmental agency having
jurisdiction, (ii) events or conditions beyond Landlord's control, or (iii)
changes requested by Tenant to the Space Plan, working drawings or otherwise,
Tenant shall promptly upon notice from Landlord either pay the entire amount
of such excess cost or approve modifications to the Space Plan or working
drawings to reduce the cost thereof by an amount equal to all or a part of
such excess and pay any excess remaining after such 'reduction. Any unused
portion of the T.I. Allowance shall belong solely to Landlord and Tenant shall
have no right or claim thereto. Landlord shall endeavor to notify Tenant as
soon as reasonably possible if and when it learns that the actual cost of
construction exceeds the T.I. allowance.
(d) In the event that Tenant requests any change in the Space
Plan, or working drawings, or otherwise, which in Landlord's opinion is
reasonable and practicable, then Landlord shall cause such changes to be
effected upon the following conditions: Tenant shall pay in cash and in
advance the sum of (t) the increase in the architect's and/or space planner's
fees caused by such changes and (ii) the actual increase in construction cost
caused by such change, and Tenant consents to any delay in completion of the
Landlord's Work caused by such change.
44. Parki nq.
(a) Tenant shall have the right to use in common with other
tenants and occupants of the Building, and subject to such rules and
regulations, as may~be established or altered by Landlord or its agent from
time to time, parking facilities which Landlord shall furnish as part of the
common areas. Tenant shall have the right to use, free of charge, a maximum
of 82 undesignated parking spaces. Tenant shall also be entitled to use an
additional 15 parking spaces which shall be reserved for Tenant's car pool
parking only. Landlord shall, at Tenant's expense, mark and identify, such
spaces for car pool use.
(b) Landlord shall permit Tenant, at Tenant's expense, to install
bicycle rack at a mutually agreed upon location.
i/23/91
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.t
45. Force Majeure - Unavoidable DelaYs. In the event that the performance of
any act required by this Lease to be performed by either Landlord or Tenant be
prevented or delayed by reason of an act of God, strike, lockout, labor
troubles, inability to secure materials, restrictive governmental laws or
regulations, inclement weather, or any other cause (except financial
inability) beyond, the reasonable control of such party, the time for
performance of the act will be extended for a period equivalent to the period
of delay and performance of the act during the period of delay will be
excused; provided, however, that nothing contained in this section shall
excuse the prompt payment of rent by Tenant as required by this Lease or the
performance of any act rendered difficult solely because of the financial
condition of the party, Landlord or Tenant, required to perform the act.
46. CC&R's. At.any time during the term of this Lease, Landlord may cause to
be recorded reasonable Conditions, Covenants and Restrictions ("CC&R's")
perta.intng to the use and occupancy of the Premises. Tenant shall be sub:)ect
to and shall comply with such reasonable CCAR's and shall execute any further
instrument reasonably required to subordinate the Lease thereto.
47. Hazardous Materials'.EnvirQnmental Compliance.
(a) Tenant shall not cause or permit any Hazardous Material
(hereinafter defined) to be brought upon, generated, stored, used, handled or
disposed of in, on, under or about the Premises except such Hazardous Material
as is necessary for Tenant's business and will be used, handled, stored and
disposed of in a manner that complies with all laws regulating such Hazardous
Material and disclosed in accordance with the provisions hereof.
(b) At the commencement of the term of this Lease, and .on or
before January 15 of each year thereafter ("Disclosure Dates"), including the
year after the termination of this Lease, Tenant shall disclose to Landlord in
writing the names and amounts of all Hazardous Materials, which were
generated, stored, used or disposed of in, on, or about the Premises prior to
the Disclosure Date, or which Tenant intends to generate, store, use or
disl~ose of in, on or about the Premises, for the year prior to and after each
Disclosure Date. Tenant shall immediately notify Landlord in writing of, and
provide Landlord a copy of, any notices of violation or investigation received
by Tenant from any governmental agency pertaining to Hazardous Materials.
(c) As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste, which if discharged, leaked
or emitted into the atmosphere, the ground,'or any body of water, does or may
pollute or contaminate the same, or adversely affect (i) the health or safety
of persons, whether on the ~remises~r elsewhere, (ii) the condition, use or
enjoyment of the Premises or any other real or personal property, whether on
the Premises or elsewhere, or (iii) the Premises or any of the improvements
thereto or thereon, including, but not limited to, substances, materials, and
wastes now or hereafter regulated by any local governmental authority, the
State of California or any federal agency. Tenant understands that the
following are included among the substances that may be subject to these
provisions' paint and solvents, petroleum-based fuels and products, lead,
cyanide, DDT, printing inks, acids, pesticides, ammonium compounds, PCBs and
asbestos.
1/23/9l
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(d) If the presence of any Hazardous 14atertal tn, on or about the
Premises caused or permitted by Tenant results in any contaJatnatton of the
Premises, Tenant shall promptly, with Landlord's prior approval, take all
actions at its sole expense as are necessary to return the Premises to the
condition extsttng prior to the Introduction of any such tlazardous Material to
the Premises. Landlord's approval of such actions shall not be unreasonably
wtthheld so long as such actions would not potentially have any matertal
adverse long-term or short-term effect on the Premises.
(e) From time to time, upon Landlord's request. Tenant shall
deliver to Landlord, in writing and In a form satisfactory to Landlord,
evidence of its compliance with the provisions of this paragraph 47. In any
event, Tenant shall allow Landlord to enter upon the Premises at reasonable
times for the purpose of inspection and/or testing.
(f) If Tenant b{eaches the obligations stated in the preceding
parag'raphs, or if the presence of Hazardous Hatertal on the Premises caused or
permitted by Tenant results in contamination of the Premises, or If
contamination of the Premises by Hazardous Hatertal otherwise occurs for which
Tenant is legally llable to Landlord for damage resulting therefrom, then
Tenant shall indemnify, defend and hold Landlord harmless from any and-all
claims, liabilities, ~udgments, damages, penalties, fines, costs, and losses
(Including, without limitation, diminution tn value of the Premises, damages
for the loss of or restriction on use of rentable or usable space or of any
amenity of the Premises, damages 'arising from any adverse impact on marketing
of space, and sums paid in settlement of claims, attorneys' fees, consultant
fees and expert fees).which arise during or after the lease term as a result
of such contamination. This indemnification of Landlord by Tenant Includes,
without limitation, costs incurred In connection with any investigation of
site conditions or any clean-up, remedial, removal or restoration work deemed
necessary by Landlord or required by any federal, state or local governmental
agency or political subdivision because of Hazardous Haterial present in the
soil or ground water on or under the Premises.
48. Common Areas. The common areas of the property, consisting of the
parking areas, walkways, driveways, landscaped areas, lobbies, stairwells,
elevators, corridors, restrooms and all other areas except the Premises and
other leased area of the Building, as shown on Exhibits "A-l", "A-2" and A-3"
hereto, shall be for the joint use of all tenants, their licensees, customers,
invitees,"suppliers, and employees. Landlord hereby grants to Tenant, and its'
licensees, customers, invites, suppliers and employers, the non-exclusive
right of use of all of the common areas as they may from time to time exist.
48.1 Londlord_'~ Haintenan~e of Common Areas. Landlord shall keep and
maintain the common'areas in good order, condition and repair at Landlord's
expense subject to reimbursement by Tenant of its pro .rata share thereof as
provided in paragraph 48.3.
48.2 Control of Common Area~. Landlord shall have sole and exclusive
control of Sche common areas and shall have the right to:
1/23/91
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(al Establish and enforce reasonable rules and regulations
applicable to all tenants concerning the maintenance, management, use and
operation of the common areas;
(b) Close any of the common areas temporarily for maintenance
purposes, and as required in the opinion of Landlord's counsel to prevent
dedication of any of the common areas or the accrual of any rights of any
person or of the public to the common areas;
(c) Determine the nature and extent of the common areas and mak, e
such changes thereto as Landlord deems desirable including, without
limitation, changes in the location of driveways, entrances, exits, vehicular
parking spaces, parking area, or the direction of the flow of traffic;
(d) Select an independent operator to maintain and operate any of
the common areas if at any time Landlord determines that the best interests of
the tenants will be served by doing so. Landlord shall have the right to
negotiate and enter into a contract with such operator on such terms and
conditions and for such period of time as Landlord deems reasonable and proper
both as to service and as to cost.
48.3 Payment Qf CQmm~n Area Costs. Tenant shall pay to Landlord as
additional rent Tenant's pro rata share of the expenses incurred by Landlord for
maintenance and operation of the common areas, including vithout limitation,
costs of cleaning, sweeping, utilities, security systems, planting, landscaping,
purchase, construction and maintenance of refuse receptacles, lighting,
installation of directional signs and markers, car stops, parking lot restriping,
sealing and repaying, insurance premiums, fire detectors and sprinkler systems,
real property taxes'and assessments and an administrative fee equal to ten
percent ClO:) of the total of such costs. Tenant's pro rata share shall be that
fractional part of the total'of such costs which the square footage of the
Premises'bears to the total square footage of gross leaseable space in the
Building as determined by Landlord. Landlord and Tenant agree that Tenant's pro
rata share upon commencement of the LeaSe is 41: of the 59,828 square foot
Building and shall be adjusted from time to time based on changes in the Tenant's
square footage of leased Premises, and changes in the rentable square footage in
the Building and shall be payable in the following manner:
(il From and after the Commencement Date of the term of this Lease,
but subject to adjustment as provided below in subparagraph (ii), Tenant shall
pay to Landlord on or before the first (lst) day of each calendar month during
the term of this Lease, the amount billed to Tenant which amount shall be a
reasonable estimate of such expenses.
(ii) Nithin a reasonable time following the end of Jach calendar year
during the term of this Lease, Landlord shall furnish Tenant a statement covering
such calendar year just expired shoving the actual expenses incurred in
connection with the common areas, the actual amount of Tenant's pro rata share
thereof, and the payments made by Tenant. Tenant shall promptly pay its pro rata
share of such expenses vhich exc.eed Tenant's payments theretofore made, and
Landlord shall apply the excess, if any, of Tenant's payment(s) to offset the
next folloving paymentCs) for such expenses due to Landlord or, at Tenant's
request, shall refund the excess.
1/23/91
- 24 -
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHON THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT NITH RESPECT TO THE
PREMISES.
IN HITNESS HHEREOF, the Tenant and the Landlord have signed this Lease as of
the date first above written.
CATELLUS DEVELOPMENT CORPORATION,
a Delaware corporation
1065 PactftCenter Drive, Suite 200
- LANDLORD-
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
- TENANT-
APPROVED
l/23/9l
- 25 -
LIST OF EXHIBITS
Exhibit "A-l"
Exhi bt t "A-2"
Exhtbtt "A-3"
Exh~ b~ t "B"
Exht bt t "C"
Exht bt t "D"
Site Plan
Floor Plan- 1st Floor
Floor Plan- 2nd Floor
Insurance Ri der
S. tandard Form of Endorsement
Space Plan
15272 DEL AMO AVE.
Common A~'ea
Pz-emises
i
h
Common Az'ea
Premises
F.)O~IBIT
INSURANCE RIDER
Attached and made a part of Lease dated November 6, 1990 between CATELLUS
DEVELOPMENT CORPORATION ("Landlord") and CITY OF TUSTIN ("Tenant").
Tenant sba]], at 1ts so]e expense, maintain in effect durtng the term
hereof the insurance coverage stated below, underwritten by insurance carriers
licensed to do bustness in California, and having a Best's rattng of not less
than B+13. The 1traits of the insurance required hereunder shall not 1trait the
1 i abt 1t ty of Tenant hereunder.
1. COMPREHENSIVE (OR COMMERCIAL) GENERAL LIABILITY INSURANCE on an
occurrence basis, insuring against liability arising out of the ownership,
use, occupancy and maintenance of the Premtses and all areas appurtenant
thereto, with a combined stngle ltmtt of not less than $2,000,000 per
occurrence. Such insurance shall:
(a) be written as primary insurance, without right of contribution
from other insurance which may be in effect:
(b) name. Landlord as an additional insured:
(c) contain a severabiltty of interest clau'se: and shall not be
sub~)ect to invalidation by acts or omissions of other insureds;
(d) include blanket contractual liability coverage; and
(e) contain broad form premises, products/completed operations, and
personal ~ injjury coverage. ·
Such insurance shall not be materially modifiable or cancellable
without thirty (30) days prior written notice to Landlord, except in case of
cancellation for nonpayment of premium, in which case cancellation s'hall not
take effect until at least ten (10) days' notice has been given to Landlord.
This provision is hereinafter referred to as a "Notice of Modification or
Cancellation' provision.
A commercial general liability insurance policy, if any, shall
include an endorsement providing for aggregate limits of coverage for each
location and for reinstatement of the aggregate amount in the event the limits.
of the policy are exhausted.
2. COHJ~REHENSIVE AUTOMOBILE LIABILITY INSURANCE with a combined single
limit of not less than $2,000,000 per occurrence, which insurance shall:
(a) be written as primary insurance, without right of contribution
from other insurance which may be in effect;
(b) name Landlord as an additional insured;
(c) contain a. Notice of Modification or Cancellation provision; and
(d) contain a severabll, tty of interest clause, and shall not be
sub~)ect to invalidation by the acts or omissions of other
insureds.
3. HORKER'S COMPENSATION INSURANCE covering all persons employed by
Tenant in the conduct of its operations on the Premises with limits not less
than those required by law. Such insurance shall be endorsed to provide for
waiver of subrogation against Landlord and to.provide for Notice of
Modification or Cancellation, and shall include an all states endorsement.
4. EMPLOYER'S LIABILITY INSURANCE with a limit of not !ess than
$1,000,000 endorsed to provide for a waiver of subrogation against Landlord
and to provide for Notice of Modtflc~tion or Cancellation. '
5. ALL RISK PROPERTY INSURANCE covering Tenant's equipment, trade
fixtures and other personal property in the Premises (including Tenant
improvements and betterments to the extent paid for by Tenant) in an amount
equal'to lOC)lC of the full replacement cost thereof, without deduction for
depreciation, and eliminating the effect of co-insurance. Such insurance
shall be primary, without right of contribution from other insurance which may
be in effect, and shall be endorsed to provide for a waiver of subrogation
against Landlord.
6. ANY UMBRELLA OR EXCESS LIABILITY INSURANCE shall provide that if-the
underlying aggregate is exhausted, the excess coverage will drop down as
primary insurance.
LANDLORD'S INITIALS ,~~
TENANT'S INITIALS
EXHIBIT 'C'
ODMPREHE~SIVE OR COMMERCIAL GF_~ERAL (OCCURREHCE) A~D
AUTOMOBILE LIABILII'Y ENDORSEMENT
Attached to certificate of insurance for and hereby certified to be a part
of the following policy or policies having the following expiration dates:
Policy No. Company Providing Policy Expiration Date
The scope of the insurance afforded by the policy(les) designated in the
attached certificate is not less than that which is afforded by the standard
form(s) promulgated by the Insurance Service Organization.
fol lowinq~
_
1. The name insured is '
2. CAT'ELLUS DEVELOPMENT CORPORATION (Landlord) is. hereby included as
additional insured with respect to liability arising out of or in connection
with the following agreement(s):
That certain Lease Agreement dated _, 19.____,
between CATELLUS DEVELOPMENT CORPORATION and
covering use of Premises located at
·
The insurance provided hereunder applies as though separate policies are in
effect for both the named insured and Landlord, but does not increase the
limits of liability set forth in said policies.
3. The limits of liability under the policy(les) are not less than those
shown on the certificate to which this endorsement i s attached.
4. The commercial general liability.policy, if any, shall provide for
aggregate coverage at the location of the premises or work to be performed and
for reinstatement of the aggregate in the event the limits of the policy are
exhausted.
5. Cancellation or material reduction of this coverage will not be
effective until thirty (30) days (ten (10) days in the case of cancellation
for nonpayment of premium) fol lowtng written nott ce-to'
CATELLUS DEVELOPMENT CORPORATION
3230 E. Imperial Highway, Suite lO0
Brea, CA 92621
Attention' Asset Management
6. Contractual liability coverage for liability assumed by this insured
under said agreement or agreements with Landlord.
7. This insurance is primary and insurer is not entitled to any
contribution from insurance in effect for Landlord.
8. This insurance shall not be invalidated by the acts or omissions of
other insureds.
9. Broad Form Property Damage endorsement.
10. Products/Completed Operations endorsement.
ll. Personal In~)ury endorsement.
12. All policy or endorsement limitations relating specifically to
operations on or near railroad property or track are eliminated.
13. All exclusions of explosion, collapse, or underground hazard are
deleted.
14. In the event of reduction or exhaustion of the applicable aggregate
limit or limits of liability under the primary policy or policies referred to
in the attached certificate of insurance solely by reason of losses paid
thereunder on account of occurrences during the policy period, the excess
policy, if any, referred to herein, shall (1) in the event of reduction, apply
as excess of the reduced limit of liability thereunder; and (ii) in the event
of exhaustion, continue in force as though it were primary insurance.
The term "Landlord" includes successors and assigns of Landlord and the
officers, employees, and agents thereof. .
Insurance Company(i es)
Date: , lg By:
Signature of Authorized Representative
RESERVED FOR EXHIBIT "D"
(SPACE PLAN)
EXHIBIT B
DIAGRAM OF PREMISES
I
EXHIBIT C
WRITTEN APPROVAL OF CATELLUS DEVELOPMENT CORPORATION
JL--~9--93 13.49 FROM. CATELLU$ REV CORP ID* PAGE
C A T E L L U S
July 29, 1993
L-5040
Ms. Christine A. Shinglcton
Assistant City Manager
CITY OF TUSTIN
15222 I~! Arno ,-
· Tustin, CA 92680
Rc:
Sublcasc to Micro Electronics, Inc., dba: Micro Center
15222 Del Arno, Tustin, Ca
Dear Christinc:
As you are aware, Micro Center has a very active Interest in thc former Builders Emporium site
on thc comer of Del Arno and F. clinger Avenue. Micro Centcr is looking for a t~mporary facility
to conduct training and other business related to thc start up of their new facility in Tustin.
Wc currcntly do not have adequate facilities in thc area large enough to accommodate Micro
Center's immediate t~mporary space requirements, Wc do understand that Micro Center has
approached you for a possible sublease within your leased premises. Catellus D~v¢lopment
Corporation would consent to this sublease, especially when both Micro Center and Thc. City of
Tustin can benefit from this transaction.
Should you have any questions or comments regarding this matter, please do not hesitate to call
our office.
cc: J.T. Fucci
A.J. Low
(".n'l'~, I,I. LIS ~)EVELOPMINT COI~i~O~,^TIOIq
Io65 ~OItTel PacI~ICEW?ea Datve, SUITE aoo. AN.~.ttEl~t, (2ALll~OItNIA 92806 · TEL '/I4 63t~.8too I~&X '/14 :~?-7416