requirements herein stated. All certificates and endorsements are to be received and approved by the City before work commences. The endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. The endorsements are to be on the standard industry forms, as listed below. The City reserves the right to require Sub-recipient's insurers to provide complete, certified copies of all required insurances policies at any time.
Required Coverage Forms
The Commercial General Liability coverage shall be written on occurrence basis utilizing Insurance Services Office (ISO) form CG 00 01, or a substitute form providing liability coverage at least as broad.
The Business Auto Liability coverage shall be written on ISO form CA 00 01, CA 00 05, CA 0012, CA 00 20, or a substitute form providing coverage at least as broad.
Required Endorsements
The Commercial General Liability policy shall contain the following endorsements, which shall accompany the Certificate of Insurance:
1) An Additional Insured endorsement using ISO form CG 20 26 04 13, or a form at least as broad naming the County of Orange its elected and appointed officials, officers, employees, and agents as Additional Insureds, and naming the City of Laguna Hills its elected and appointed officials, officers, employees, and agents as Additional Insureds , or provide blanket coverage, which will state As Required by Written Contract.
2) A primary non-contributory endorsement using ISO form CG 20 01 04 13, or a form at least as broad evidencing that the Sub-recipient’s insurance is primary, and any insurance or self-insurance maintained by the County shall be excess and noncontributing.
The Workers’ Compensation policy shall contain a waiver of subrogation endorsement waiving all rights of subrogation against the County of Orange its elected and appointed officials, officers, employees, and agents as Additional Insureds, and naming the City of Laguna Hills its elected and appointed officials, officers, employees, and agents as Additional Insureds , or provide blanket coverage, which will state As Required by Written Contract.
The Network Security and Privacy Liability policy shall contain the following endorsements which shall accompany the Certificate of Insurance:
1) An Additional Insured endorsement naming the County of Orange its elected and appointed officials, officers, employees, and agents as Additional Insureds, and naming the City of Laguna Hills its elected and appointed officials, officers, employees, and
agents as Additional Insureds , or provide blanket coverage, which will state As Required by Written Contract for its vicarious liability. 2) A primary and non-contributory endorsement evidencing that the Sub-recipient’s insurance is primary, and any insurance or self-insurance maintained by the County shall be excess and non-contributing.
All insurance policies required by this Contract shall waive all rights of subrogation against the County of Orange its elected and appointed officials, officers, employees, and agents as Additional Insureds, and the City of Laguna Hills its elected and appointed officials, officers, employees, and agents as Additional Insureds when acting within the scope of their appointment or employment.
The County of Orange shall be the loss payee on the Employee Dishonesty coverage. A Loss Payee endorsement evidencing that the County of Orange is a Loss Payee shall accompany the Certificate of Insurance.
Sub-recipient shall provide thirty (30) days prior written notice to the City and the County of any policy cancellation or non-renewal and ten (10) days prior written notice where cancellation is due to non-payment of premium and provide a copy of the cancellation notice to the City and the County. Failure to provide written notice of cancellation may constitute a material breach of the Contract, upon which the City and the County may suspend or terminate this Contract.
If Sub-recipient’s Professional Liability, and/or Network Security & Privacy Liability are “Claims-Made” policy(ies), Subrecipient shall agree to the following:
1) The retroactive date must be shown and must be before the date of the Contract or the beginning of the Contract services.
2) Insurance must be maintained, and evidence of insurance must be provided for at least three (3) years after expiration or earlier termination of Contract services.
If coverage is canceled or non-renewed, and not replaced with another claimsmade policy form with a retroactive date prior to the effective date of the contract services, Subrecipient must purchase an extended reporting period for a minimum of three (3) years after expiration of earlier termination of the Contract.
The Commercial General Liability policy shall contain a severability of interests clause also known as a “separation of insureds” clause (standard in the ISO CG 0001 policy).
Insurance certificates should be forwarded to the agency/department address listed on the solicitation.
If the Subrecipient fails to provide the insurance certificates and endorsements within seven (7) days of notification by CEO/Purchasing or the agency/department purchasing division, award may be made to the next qualified vendor.
The City or the County expressly retains the right to require Sub-recipient to increase or decrease insurance of any of the above insurance types throughout the term of this Contract. Any increase or decrease in insurance will be as deemed by the City or the County of Orange Risk Manager as appropriate to adequately protect the City or the County.
The City shall notify Sub-recipient in writing of changes in the insurance requirements. If Subrecipient does not provide acceptable Certificates of Insurance and endorsements to City incorporating such changes within thirty (30) days of receipt of such notice, this Contract may be in breach without further notice to Sub-recipient, and City shall be entitled to all legal remedies.
The procuring of such required policy or policies of insurance shall not be construed to limit Sub-recipient's liability hereunder nor to fulfill the indemnification provisions and requirements of this Contract, nor act in any way to reduce the policy coverage and limits available from the insurer.
Insurance information shall be submitted to:
City of Laguna Hills
Attn: Eric Hendrickson, Finance Director
24035 El Toro Rd
Laguna Hills, CA 92653
For submittal also to:
County of Orange
OC Community Reources
Attn: Contract Administrator
601 N. Ross Street, 6th Floor
Santa Ana, CA 92701
G. Sub-Recipient Liability
The procuring of such required policy or policies of insurance shall not be construed to limit Sub-recipient's liability hereunder or to fulfill the indemnification provisions and requirements of this Agreement.
Item No. 4.6
City of Laguna Hills
City Council / Planning Agency
Staff Report
Date: July 9, 2024
To: Mayor and Council Members
From: Joe Ames, Public Works Director/City Engineer
Issue: Proposed Civic Center Office Lease with Layla Fijany DDS MS Corp., a California corporation, for 24031 El Toro Road, Suite 205, Laguna Hills, California
Recommendation: That the City Council: 1) Approve the lease agreement with Layla Fijany DDS MS Corp., a California corporation, for 24031 El Toro Road, Suite 205, Laguna Hills, California; 2) Authorize the City Manager to make minor modifications to and negotiate the final terms of the lease agreement, as necessary; and 3) Authorize the City Manager to execute the lease agreement.
Background:
City staff and the Civic Center property management company have negotiated a tenyear lease with Layla Fijany DDS MS Corp, a California corporation, for 24031 El Toro Road, Suite 205. Dr. Layla Fijany plans to open a new orthodontic practice in Suite 205.
During the May and June 2023 Special Study Session Budget Workshops, City staff presented an overview of the Civic Center Enterprise Fund’s historical profits and losses, reviewed needed capital improvements, and requested funding for capital improvement projects. During that discussion, City staff indicated Suite 205 had never been built out and made ready for leasing, and consequently, this has been lost revenue. City Council authorized the transfer of $850,000 in general fund reserves to CIP 505, Civic Center Improvements, for the build out of tenant improvements for Suite 205 and other improvements at the Civic Center. Since then, City staff simultaneously worked to develop plans and specifications for tenant improvements to Suite 205 to make it ready for leasing for use as a “traditional office” suite, while also authorizing Essex Realty Management, Inc., the City’s property management company for the
Item No. 4.6
Laguna Hills Civic Center, to market the space for lease.
The market rate for medical office use (an orthodontic practice is considered a medical use) in shell form is currently $3.50 per square foot, with the lessor contributing approximately $100/square foot for tenant improvements to the lessee. This would equate to a tenant improvement allowance of approximately $234,000. Because the Civic Center is owned by the City of Laguna Hills (“lessor”), if the City provides any tenant improvement funding to a tenant (“lessee”), any subsequent construction improvement project may be considered a “public works project” subject to California Labor Code Section 1720. This may require that anyone working on a tenant improvement project be paid prevailing wages as determined by the Department of Industrial Relations regardless if the contractor was hired by the lessee or the lessor.
Therefore, in part due to Labor Code Section 1720, City staff recommended the build out of Suite 205 to make it ready to lease to relieve any potential lessee from the expense of paying prevailing wages to construction workers.
On May 14, 2024, City Council approved the plans and specifications and authorized the advertisement for bids for the Laguna Hills Civic Center Suite 205 Tenant Improvements Project, CIP No. 505-B. Construction bids were opened on June 20, 2024. The lowest responsive, responsible bidder provided a bid of $289,000.
During the bidding process in June, Essex Realty Management, Inc., received an offer from a new orthodontic practice, Layla Fijany DDS MS Corp, for the lease of Suite 205.
In lieu of providing a tenant improvement allowance to the lessee, City staff and Essex negotiated a proposed lease that reduces the 10-year lease rate congruent with the lessee’s expected cost of building out the suite for use as a dental office. This arrangement saves City staff time that would otherwise be spent on managing a very specialized tenant improvement project, preserves funding in CIP No. 505 (Civic Center Improvements) for other capital improvements, and allows the lessee complete control over the design and tenant improvements. The lease does require that the City provide rough electrical, plumbing, and HVAC in the unit at its own expense, which is typical.
Consequently, City staff recommends that the City Council: 1) Approve the lease agreement with Layla Fijany DDS MS Corp, a California corporation, for 24031 El Toro Road, Suite 205, Laguna Hills, California; 2) Authorize the City Manager to make minor modifications to and negotiate the final terms of the lease agreement, as necessary; and 3) Authorize the City Manager to execute the lease agreement.
Item No. 4.6
CEQA Findings:
Environmental review is not required under the California Environmental Quality Act (CEQA) pursuant to the California Code of Regulations, Title 14, Chapter 3, Section 15301 as a Class 1 Categorical Exemption – “Existing Facilities.” Fiscal Impact:
The following is a summary of the key lease terms and financial analysis:
Commencement Date: July 1, 2024 (subject to change)
Term: One hundred twenty-five (125) months
Rentable Square Feet: 2,343
Upfront Capital: $42,546 (Estimated)
Base Rent: Months 1-5: $0
Months 6-17: $5,623.20/month
(~$2.40/SF/mo)
Months 18-29: $5,791.90/month
(~$2.47/SF/mo)
Months 30-41: $5,965.65/month
(~$2.55/SF/mo)
Months 42-53: $6,144.62/month
(~$2.62/SF/mo)
Months 54-65: $6,328.96/month
(~$2.70/SF/mo)
Months 66-77: $6,518.83/month
(~$2.78/SF/mo)
Months 78-89: $6,714.39/month
(~$2.87/SF/mo)
Months 90-101: $6,915.83/month
(~$2.95/SF/mo)
Months 102-113: $7,123.30/month
(~$3.04/SF/mo)
Months 114-125: $7,337.00/month
(~$3.13/SF/mo)
Total Rent Payments: $773,564
The Base Rent includes the lessee’s share of eligible operating expenses (also known as common area maintenance charges) for the first year. In the second and subsequent
Item No. 4.6
years, any increases in eligible operating expenses will be borne, proportionally, by the lessee up to 4% annually.
The Base Rent schedule reflects a 3% annual increase.
Upfront Capital includes leasing commissions and tenant improvements (or allowances for tenant improvements). The negotiated first amendment to the lease does not include any tenant improvement allowances. Essex Realty, per the terms of the existing property management agreement, will receive approximately $19,339 for its lease commission (2.5% of total rent consideration) as the listing broker, and the broker representing Dr. Layla Fijany will receive approximately $23,207 for its lease commission (3% of total rent consideration) as the procuring broker.
Attachments:
1. Proposed Lease for Suite 205
1. Basic Provisions ("Basic Provisions").
1.1 ParƟes. This Lease ("Lease"), dated for reference purposes only July 1, 2024 , is made by and between The City of Laguna Hills, a municipal corporaƟon organized and exisƟng under the laws of the State of California ("Lessor") and Layla Fijany, DDS MS Corp ("Lessee"), (collecƟvely the "ParƟes", or individually a "Party").
1.2(a) Premises: That certain PorƟon of the Project (as defined below), commonly known as (street address, suite, city, state): 24031 El Toro Road, Suite 205 Laguna Hills, CA 92654 ("Premises"). The Premises are located in the County of Orange , and consist of approximately 2,343 rentable square feet and approximately 1,958 useable square feet. In addiƟon to Lessee'srights to use and occupy the Premises as hereinaŌer specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinaŌer specified, but shall not have any rights to the roof, the exterior walls, the area above the dropped ceilings, or the uƟlity raceways of the building containing the Premises("Building") orto any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collecƟvely referred to asthe "Project." The Project consists of approximately 51,946 rentable square feet. (See also Paragraph 2)
1.2(b) Parking: 4/1000sf unreserved and N/A reserved vehicle parking spaces at a monthly cost of N/A per unreserved space and N/A per reserved space. (See Paragraph 2.6)
1.3 Term: 10 years and 5 months("Original Term") commencing see Addendum paragraph 50 ("Commencement Date") and ending ("ExpiraƟon Date"). (See also Paragraph 3)
1.4 Early Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing Lessee shall be granted early possession upon the receipt of a fully executed lease agreement, monies outlined in secƟon 1.7e, and a cerƟficate of liability insurance naming Landlord and it’s agent as addiƟonally insured. ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $5,623.20 per month ("Base Rent"), payable on the First day of each month commencing August 1, 2023 . (See also Paragraph 4) If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. See Paragraph 4.4 . (See Addendum Paragraph 1)
1.6 Lessee's Share of OperaƟng Expense Increase: four point five one percent ( 4.51 %) ("Lessee's Share"). In the event that that size of the Premises and/or the Project are modified during the term of this Lease, Lessor shall recalculate Lessee's Share to reflect such modificaƟon.
1.7 Base Rent and Other Monies Paid Upon ExecuƟon:
1.8 Agreed Use: general denƟstry and related specialiƟes . (See also Paragraph 6)
1.9 Base Year; Insuring Party. The Base Year is 2024 . Lessor is the "Insuring Party". (See also Paragraphs 4.2 and 8)
1.10 Real Estate Brokers. (See also Paragraph 15 and 25) agency relaƟonships in this Lease with the following real estate brokers (“Broker(s)”) and/or their agents(“Agent(s)”):
Lessor’s Brokerage Firm Essex Realty Management, Inc. License No. 02081393 Isthe broker of (check one): the Lessor; or both the Lessee and Lessor (dual agent).
Lessor’s Agent Heather Stark License No. 02153034 Is(check one): the Lessor’s Agent (salesperson or broker associate); or both the Lessee’s Agent and the Lessor’s Agent (dual agent).
Lessee’s Brokerage Firm Roam Commercial Realty License No. Isthe broker of (check one): the Lessee; or both the Lessee and Lessor (dual agent).
Lessee’s Agent Neil O'Connor License No. 02153201 Is (check one): the Lessee’s Agent (salesperson or broker associate); or both the Lessee’s Agent and the Lessor’s Agent (dual agent).
separate wriƩen agreement (or if there is no such agreement, the sum of or % of the total Base Rent) for the brokerage servicesrendered by the Brokers.
1.11 Guarantor. The obligaƟons of the Lessee under this Lease are to be guaranteed by Layla Fijany, an individual ("Guarantor"). (See also Paragraph
STANDARD MULTI-TENANT OFFICE LEASE - GROSS
(a) Base Rent: $5,623.20 for the period first month's rent . (b) Security Deposit: $7,337.00 ("Security Deposit"). (See also Paragraph 5) (c) Parking: N/A for the period N/A .
(d) Other: N/A for N/A .
(e) Total Due Upon ExecuƟon of this Lease: $12,960.20 . (a) RepresentaƟon: Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency RelaƟonship, confirms and consents to the following (b) Payment to Brokers: Upon execuƟon and delivery of this Lease by both ParƟes, Lessor shall pay to the Brokersthe brokerage fee agreed to in a 37)
1.12 Business Hours for the Building: 7:00 a.m. to 6:00 p.m., Mondays through Fridays (except Building Holidays) and 8:00 a.m. to 2:00 p.m. on Saturdays (except Building Holidays). "Building Holidays" shall mean the dates of observaƟon of New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and N/A .
1.13 Lessor Supplied Services. Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to provide the following within the Premises:
Janitorial services
Electricity
Other (specify):
1.14 AƩachments. AƩached hereto are the following, all of which consƟtute a part of this Lease:
an Addendum consisƟng of Paragraphs 1 through 9 ;
a plot plan depicƟng the Premises; Exhibit "A"
a current set of the Rules and RegulaƟons; Exhibit "B"
a Work LeƩer/Requirements for Improvements or Alterations by Lessee; Exhibit "D" a janitorial schedule;
other (specify): Exhibit "C" Waiver and Release. .
2. Premises.
2.1 Leƫng. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and condiƟons set forth in this Lease. While the approximate square footage of the Premises may have been used in the markeƟng of the Premisesfor purposes of comparison, the Base Rentstated herein is NOT Ɵed to square footage and is notsubject to adjustment should the actual size be determined to be different. NOTE: Lessee is advised to verify the actual size prior to execuƟng this Lease.
2.2 CondiƟon. Lessor shall deliver the Premises to Lessee in a clean condiƟon on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the exisƟng electrical, plumbing, fire sprinkler, lighƟng, heaƟng, venƟlaƟng and air condiƟoning systems("HVAC"), and all other items which the Lessor is obligated to construct pursuant to the Work LeƩer aƩached hereto, if any, other than those constructed by Lessee,shall be in good operaƟng condiƟon on said date, that the structural elements of the roof, bearing walls and foundaƟon of the Unit shall be free of material defects, and that the Premises do not contain hazardous levels of any mold or fungi defined astoxic under applicable state or federal law. Lessor also warrants, that unless otherwise specified in wriƟng, Lessor is unaware of (i) any recorded NoƟces of Default affecƟng the Premise; (ii) any delinquent amounts due under any loan secured by the Premises; and (iii) any bankruptcy proceeding affecƟng the Premises.
2.3 Compliance. Lessor warrantsthat to the best of its knowledge the improvements on the Premises and the Common Areas comply with the building codes, applicable laws, covenants or restricƟons of record, regulaƟons, and ordinances ("Applicable Requirements") that were in effect at the Ɵme that each improvement, or porƟon thereof, was constructed. Said warranty does not apply to the use to which Lessee will put the Premises, modificaƟons which may be required by the Americans with DisabiliƟes Act or any similar laws as a result of Lessee's use (see Paragraph 49), or to any AlteraƟons or UƟlity InstallaƟons (as defined in Paragraph
7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for determining whether or not the zoning and other Applicable Requirements are appropriate for Lessee's intended use, and acknowledgesthat past uses ofthe Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessor shall, except as otherwise provided, promptly aŌer receipt of wriƩen noƟce from Lessee seƫng forth with specificity the nature and extent ofsuch non-compliance, recƟfy the same. If the Applicable Requirements are hereaŌer changed so asto require during the term of this Lease the construcƟon of an addiƟon to or an alteraƟon of the Premises, the remediaƟon of any Hazardous Substance, or the reinforcement or other physical modificaƟon of the Premises("Capital Expenditure"), Lessor and Lessee shall allocate the cost ofsuch work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in general, Lessee shall be fully responsible for the cost thereof, provided, however, that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months' Base Rent, Lessee may instead terminate this Lease unless Lessor noƟfies Lessee, in wriƟng, within 10 days aŌer receipt of Lessee's terminaƟon noƟce that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months' Base Rent. If Lessee elects terminaƟon, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor wriƩen noƟce specifying a terminaƟon date at least 90 days thereaŌer. Such terminaƟon date shall, however, in no event be earlierthan the last day that Lessee could legally uƟlize the Premises without commencing such Capital Expenditure. (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modificaƟons), then Lessor shall pay for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease or any extension thereof, on the date that on which the Base Rent is due, an amount equal to 1/144th of the porƟon of such costs reasonably aƩributable to the Premises. Lessee shall pay Interest on the balance but may prepay its obligaƟon at any Ɵme. If, however, such Capital Expenditure is required during the last 2 years of this Lease or if Lessorreasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the opƟon to terminate this Lease upon 90 days prior wriƩen noƟce to Lessee unless Lessee noƟfies Lessor, in wriƟng, within 10 days aŌer receipt of Lessor'sterminaƟon noƟce that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and failsto tender itsshare of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest, from Rent unƟl Lessor's share of such costs have been fully paid. If Lessee is unable to finance Lessor'sshare, orif the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days wriƩen noƟce to Lessor.
(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use, change in intensity of use, or modificaƟon to the Premises then, and in that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not have any right to terminate this Lease.
2.4 Acknowledgements. Lessee acknowledgesthat: (a) it has been given an opportunity to inspect and measure the Premises, (b) Lessee has been advised by Lessor and/or Brokersto saƟsfy itself with respect to the size and condiƟon of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements), and their suitability for Lessee's intended use, (c) Lessee has made such invesƟgaƟon as it deems necessary with reference to such maƩers and assumes all responsibility therefor as the same relate to its occupancy of the Premises, (d) it is not relying on any representaƟon asto the size of the Premises made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (f) neither Lessor, Lessor's agents, nor Brokers have made any oral or wriƩen representaƟons or warranƟes with respect to said maƩers other than as set forth in this Lease. In addiƟon, Lessor acknowledges that: (i) Brokers have made no representaƟons, promises or warranƟes concerning Lessee's ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to invesƟgate the
financial capability and/or suitability of all proposed tenants.
2.5 Lessee as Prior Owner/Occupant. The warranƟes made by Lessor in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date, Lessee wasthe owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary correcƟve work.
2.6 Vehicle Parking. So long as Lessee is not in default, and subject to the Rules and RegulaƟons aƩached hereto, and as established by Lessor from Ɵme to Ɵme, Lessee shall be enƟtled to rent and use the number of parking spaces specified in Paragraph 1.2(b) at the rental rate applicable from Ɵme to Ɵme for monthly parking as set by Lessor and/or its licensee.
(a) If Lessee commits, permits or allows any of the prohibited acƟviƟes described in the Lease or the rules then in effect, then Lessor shall have the right, without noƟce, in addiƟon to such other rights and remediesthat it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.
(b) The monthly rent per parking space specified in Paragraph 1.2(b) is subject to change upon 30 days prior wriƩen noƟce to Lessee. The rent for the parking is payable one month in advance prior to the first day of each calendar month.
2.7 Common Areas- DefiniƟon. The term "Common Areas" is defined as all areas and faciliƟes outside the Premises and within the exterior boundary line of the Project and interior uƟlity raceways and installaƟons within the Premisesthat are provided and designated by the Lessor from Ɵme to Ɵme for the general nonexclusive use of Lessor, Lessee and other tenants of the Project and their respecƟve employees, suppliers, shippers, customers, contractors and invitees, including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms, elevators, parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas.
2.8 Common Areas- Lessee's Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers, shippers, contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others enƟtled to such use, the Common Areas as they exist from Ɵme to Ɵme, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or under the terms of any rules and regulaƟons or restricƟons governing the use of the Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permiƩed only by the prior wriƩen consent of Lessor or Lessor's designated agent, which consent may be revoked at any Ɵme. In the event that any unauthorized storage shall occur, then Lessor shall have the right, without noƟce, in addiƟon to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which costshall be immediately payable upon demand by Lessor.
2.9 Common Areas- Rules and RegulaƟons. Lessor or such other person(s) as Lessor may appoint shall have the exclusive control and management of the Common Areas and shall have the right, from Ɵme to Ɵme, to adopt, modify, amend and enforce reasonable rules and regulaƟons ("Rules and RegulaƟons") for the management, safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservaƟon of good order, as well asfor the convenience of other occupants or tenants of the Building and the Project and their invitees. The Lessee agrees to abide by and conform to all such Rules and RegulaƟons, and shall use its best efforts to cause its employees,suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the noncompliance with said Rules and RegulaƟons by other tenants of the Project.
2.10 Common Areas - Changes. Lessor shall have the right, in Lessor'ssole discreƟon, from Ɵme to Ɵme:
(a) To make changes to the Common Areas, including, without limitaƟon, changes in the locaƟon,size, shape and number of the lobbies, windows, stairways, air shaŌs, elevators, escalators,restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direcƟon of traffic, landscaped areas, walkways and uƟlity raceways; (b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available; (c) To designate other land outside the boundaries of the Project to be a part of the Common Areas; (d) To add addiƟonal buildings and improvementsto the Common Areas; (e) To use the Common Areas while engaged in making addiƟonal improvements, repairs or alteraƟons to the Project, or any porƟon thereof; and (f) To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, ExpiraƟon Date and Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. Any provision herein granƟng Lessee Early Possession of the Premises issubject to and condiƟoned upon the Premises being available for such possession prior to the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If Lessee totally or parƟally occupies the Premises prior to the Commencement Date, the obligaƟon to pay Base Rentshall be abated for the period of such Early Possession. All other terms of this Lease (including but not limited to the obligaƟons to pay Lessee's Share of the OperaƟng Expense Increase) shall be in effect during such period. Any such Early Possession shall not affect the ExpiraƟon Date.
3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or change the ExpiraƟon Date. Lessee shall not, however, be obligated to pay Rent or perform its other obligaƟons unƟl Lessor delivers possession of the Premises and any period of rent abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and conƟnue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If possession is not delivered within 60 days aŌer the Commencement Date, asthe same may be extended under the terms of any Work LeƩer executed by ParƟes, Lessee may, at its opƟon, by noƟce in wriƟng within 10 days aŌer the end ofsuch 60 day period, cancel this Lease, in which event the ParƟesshall be discharged from all obligaƟons hereunder. If such wriƩen noƟce is not received by Lessor within said 10 day period, Lessee's right to cancel shall terminate. If possession of the Premises is not delivered within 120 days aŌer the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in wriƟng.
3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to Lessee unƟl Lessee complies with its obligaƟon to provide evidence of insurance (Paragraph 8.5).Paragraph 8 of the Lease (See Addendum Paragraph 4) Pending delivery of such evidence, Lessee shall be required to perform all of its obligaƟons under this Lease from and aŌer the Start Date, including the payment of Rent, notwithstanding Lessor's elecƟon to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other condiƟons prior to or concurrent with the Start Date, the Start Date shall occur but Lessor may elect to withhold possession unƟl such condiƟons are saƟsfied.
4. Rent.
4.1 Rent Defined. All monetary obligaƟons of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are deemed to be rent ("Rent").
4.2 OperaƟng Expense Increase. Lessee shall pay to Lessor during the term hereof, in addiƟon to the Base Rent, Lessee's Share of the amount by which all OperaƟng Expenses for each Comparison Year exceeds the amount of all OperaƟng Expenses for the Base Year,such excess being hereinaŌer referred to as the "OperaƟng Expense Increase", in accordance with the following provisions:
(a) "Base Year" is asspecified in Paragraph 1.9.
(b) "Comparison Year" is defined as each calendar year during the term of this Lease subsequent to the Base Year; provided, however, Lessee shall have no obligaƟon to pay a share of the OperaƟng Expense Increase applicable to the first 12 months of the Lease Term (other than such as are mandated by a governmental authority, as to which government mandated expenses Lessee shall pay Lessee's Share, notwithstanding they occur during the first twelve (12) months).
Lessee's Share of the OperaƟng Expense Increase for the first and last Comparison Years of the Lease Term shall be prorated according to that porƟon of such Comparison Year asto which Lessee is responsible for a share ofsuch increase. (c) The following costsrelaƟng to the ownership and operaƟon of the Project, calculated as if the Project was at least 95% occupied, are defined as "OperaƟng Expenses":
(i) Costs relaƟng to the operaƟon, repair, and maintenance in neat, clean, safe, good order and condiƟon, but not the replacement (see subparagraph (g)), of the following:
(aa) The Common Areas, including their surfaces, coverings, decoraƟve items, carpets, drapes and window coverings, and including parking areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers, irrigaƟon systems, Common Area lighƟng faciliƟes, building exteriors and roofs, fences and gates; (bb) All heaƟng, air condiƟoning, plumbing, electrical systems, life safety equipment, communicaƟon systems and other equipment used in common by, or for the benefit of, tenants or occupants of the Project, including elevators and escalators, tenant directories, fire detecƟon systems including sprinkler system maintenance and repair.
(cc) All other areas and improvements that are within the exterior boundaries of the Project but outside of the Premises and/or any other space occupied by a tenant.
(ii) The cost of trash disposal, janitorial and security services, pest controlservices, and the costs of any environmental inspecƟons; (iii) The cost of any other service to be provided by Lessor that is elsewhere in this Lease stated to be an "OperaƟng Expense"; (iv) The cost of the premiumsfor the insurance policies maintained by Lessor pursuant to paragraph 8 and any deducƟble porƟon of an insured loss concerning the Building or the Common Areas;
(v) The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10; (vi) The cost of water, sewer, gas, electricity, and other publicly mandated services not separately metered; (vii) Labor,salaries, and applicable fringe benefits and costs, materials, supplies and tools, used in maintaining and/or cleaning the Project and accounƟng and management fees aƩributable to the operaƟon of the Project; (viii) The cost of any capital improvement to the Building or the Project not covered under the provisions of Paragraph 2.3 provided; however, that Lessor shall allocate the cost of any such capital improvement over a 12 year period and Lessee shall not be required to pay more than Lessee's Share of 1/144th of the cost of such Capital Expenditure in any given month; (ix) The cost to replace equipment or improvements that have a useful life for accounƟng purposes of 5 years orless. (x) Reservesset aside for maintenance, repair and/or replacement of Common Area improvements and equipment. (d) Any item of OperaƟng Expense that is specifically aƩributable to the Premises, the Building or to any other building in the Project or to the operaƟon, repair and maintenance thereof, shall be allocated enƟrely to such Premises, Building, or other building. However, any such item that is not specifically aƩributable to the Building or to any other building or to the operaƟon, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings in the Project. (e) The inclusion of the improvements, faciliƟes and services set forth in Subparagraph 4.2(c) shall not be deemed to impose an obligaƟon upon Lessor to either have said improvements or faciliƟes or to provide those services unlessthe Project already has the same, Lessor already provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them. (f) Lessee's Share of OperaƟng Expense Increase is payable monthly on the same day as the Base Rent is due hereunder. The amount ofsuch payments shall be based on Lessor's esƟmate of the OperaƟng Expense Expenses. Within 60 days aŌer wriƩen request (but not more than once each year) Lessor shall deliver to Lessee a reasonably detailed statement showing Lessee's Share of the actual Common Area OperaƟng Expenses for the preceding year. If Lessee's payments during such Year exceed Lessee's Share, Lessee shall credit the amount of such over-payment against Lessee'sfuture payments. If Lessee's payments during such Year were lessthan Lessee's Share, Lessee shall pay to Lessor the amount of the deficiency within 10 days aŌer delivery by Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust between them by cash payment any balance determined to exist with respect to that porƟon of the last Comparison Year for which Lessee is responsible as to OperaƟng Expense Increases, notwithstanding that the Lease term may have terminated before the end of such Comparison Year. (g) OperaƟng Expensesshall not include the costs of replacement for equipment or capital componentssuch asthe roof, foundaƟons, exterior walls or a Common Area capital improvement, such asthe parking lot paving, elevators, fences that have a useful life for accounƟng purposes of 5 years or more. (h) OperaƟng Expenses shall not include any expenses paid by any tenant directly to third parƟes, or asto which Lessor is otherwise reimbursed by any third party, other tenant, or by insurance proceeds.
4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States on or before the day on which it is due, without offset or deducƟon (except asspecifically permiƩed in this Lease). All monetary amountsshall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor isinaccurate such inaccuracy shall not consƟtute a waiver and Lessee shall be obligated to pay the amountset forth in this Lease. Rent for any period during the term hereof which is for lessthan one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rentshall be made to Lessor at its address stated herein or to such other persons or place as Lessor may from Ɵme to Ɵme designate in wriƟng. Acceptance of a payment which isless than the amount then due shall not be a waiver of Lessor's rightsto the balance of such Rent, regardless of Lessor's endorsement of any check so staƟng. In the event that any check, draŌ, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $2575 in addiƟon to any Late Charge and Lessor, at its opƟon, may require all future Rent be paid by cashier's check. Payments will be applied first to accrued late charges and aƩorney's fees, second to accrued interest, then to Base Rent and Common Area OperaƟng Expenses, and any remaining amount to any other outstanding charges or costs.
5. Security Deposit. Lessee shall deposit with Lessor upon execuƟon hereof the Security Deposit as security for Lessee's faithful performance of its obligaƟons under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any porƟon ofsaid Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/ or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer orincur by reason thereof. If Lessor uses or applies all or any porƟon of the Security Deposit, Lessee shall within 10 days aŌer wriƩen request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the term of this Lease, Lessee shall, upon wriƩen request from Lessor, deposit addiƟonal monies with Lessor so that the total amount of the Security Deposit shall at all Ɵmes bear the same proporƟon to the increased Base Rent as the iniƟal Security Deposit bore to the iniƟal Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Deposit
to the extent necessary, in Lessor'sreasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs during this Lease and following such change the financial condiƟon of Lessee is, in Lessor's reasonable judgment, significantly reduced, Lessee shall deposit such addiƟonal monies with Lessor asshall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in financial condiƟon. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 90 days aŌer the expiraƟon or terminaƟon of this Lease, Lessor shall return that porƟon of the Security Deposit not used or applied by Lessor. Lessor shall upon wriƩen request provide Lessee with an accounƟng showing how that porƟon of the Security Deposit that was not returned was applied. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN LIEU OF PAYMENT OF THE LAST MONTH'S RENT.
6. Use.( See Addendum Paragraph 3)
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which isreasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises or properƟes. Other than guide, signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals, birds, fish, or repƟles. Lessorshall not unreasonably withhold or delay its consent to any wriƩen request for a modificaƟon of the Agreed Use,so long as the same will not impair the structural integrity of the improvements of the Building, will not adversely affect the mechanical, electrical, HVAC, and other systems of the Building, and/or will not affect the exterior appearance of the Building. If Lessor elects to withhold consent, Lessor shall within 7 days aŌer such request give wriƩen noƟficaƟon of same, which noƟce shall include an explanaƟon of Lessor's objecƟons to the change in the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as used in this Lease shall mean any product, substance, or waste whose presence, use, manufacture, disposal, transportaƟon, or release, either by itself or in combinaƟon with other materials expected to be on the Premises, is either: (i) potenƟally injurious to the public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potenƟal liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, byproducts or fracƟons thereof. Lessee shall not engage in any acƟvity in or on the Premises which consƟtutes a Reportable Use of Hazardous Substances without the express prior wriƩen consent of Lessor and Ɵmely compliance (at Lessee's expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the installaƟon or use of any above or below ground storage tank, (ii) the generaƟon, possession, storage, use, transportaƟon, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, noƟce, registraƟon or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a noƟce be given to persons entering or occupying the Premises or neighboring properƟes. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use such as ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long assuch use is in compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contaminaƟon or damage or expose Lessor to any liability therefor. In addiƟon, Lessor may condiƟon its consent to any Reportable Use upon receiving such addiƟonal assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contaminaƟon, injury and/or liability, including, but not limited to, the installaƟon (and removal on or before Lease expiraƟon or terminaƟon) of protecƟve modificaƟons (such as concrete encasements) and/or increasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or hasreasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give wriƩen noƟce ofsuch fact to Lessor, and provide Lessor with a copy of any report, noƟce, claim or other documentaƟon which it has concerning the presence of such Hazardous Substance. (c) Lessee RemediaƟon. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all invesƟgatory and/or remedial acƟon reasonably recommended, whether or not formally ordered or required, for the cleanup of any contaminaƟon of, and for the maintenance, security and/or monitoring of the Premises or neighboring properƟes, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the Premises during the term of this Lease, by or for Lessee, or any third party. (d) Lessee IndemnificaƟon. Lessee shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabiliƟes, judgments, claims, expenses, penalƟes, and aƩorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migraƟon of any Hazardous Substance under the Premises from areas outside of the Project not caused or contributed to by Lessee). Lessee's obligaƟons shall include, but not be limited to, the effects of any contaminaƟon or injury to person, property or the environment created or suffered by Lessee, and the cost of invesƟgaƟon, removal, remediaƟon, restoraƟon and/or abatement, and shall survive the expiraƟon or terminaƟon of this Lease. No terminaƟon, cancellaƟon or release agreement entered into by Lessor and Lessee shall release Lessee from its obligaƟons under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in wriƟng at the Ɵme ofsuch agreement. (e) Lessor IndemnificaƟon. Except as otherwise provided in paragraph 8.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediaƟon, which result from Hazardous Substances which existed on the Premises prior to Lessee's occupancy or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees. Lessor's obligaƟons, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of invesƟgaƟon, removal, remediaƟon, restoraƟon and/or abatement, and shall survive the expiraƟon or terminaƟon of this Lease. (f) InvesƟgaƟons and RemediaƟons. Lessor shall retain the responsibility and pay for any invesƟgaƟons or remediaƟon measuresrequired by governmental enƟƟes having jurisdicƟon with respect to the existence of Hazardous Substances on the Premises prior to Lessee's occupancy, unlesssuch remediaƟon measure is required as a result of Lessee's use (including "AlteraƟons", as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such acƟviƟes at the request of Lessor, including allowing Lessor and Lessor's agents to have reasonable access to the Premises at reasonable Ɵmesin order to carry out Lessor's invesƟgaƟve and remedial responsibiliƟes. (g) Lessor TerminaƟon OpƟon. If a Hazardous Substance CondiƟon (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee shall make the invesƟgaƟon and remediaƟon thereof required by the Applicable Requirements and this Lease shall conƟnue in full force and effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor's opƟon, either (i) invesƟgate and remediate such Hazardous Substance CondiƟon, if required, assoon asreasonably possible at Lessor's expense, in which event this Lease shall conƟnue in full force and effect, or (ii) if the esƟmated cost to remediate such condiƟon exceeds 12 Ɵmes the then monthly Base Rent or $100,000, whichever is greater, give wriƩen noƟce to Lessee, within 30 days aŌer receipt by Lessor of knowledge of the occurrence of such Hazardous Substance CondiƟon, of Lessor's desire to terminate this Lease as of the date 60 daysfollowing the date of such noƟce. In the event Lessor electsto give a terminaƟon noƟce, Lessee may, within 10 days thereaŌer, give wriƩen noƟce to Lessor of
Lessee's commitment to pay the amount by which the cost of the remediaƟon of such Hazardous Substance CondiƟon exceeds an amount equal to 12 Ɵmesthe then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or saƟsfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall conƟnue in full force and effect, and Lessor shall proceed to make such remediaƟon assoon asreasonably possible aŌer the required funds are available. If Lessee does not give such noƟce and provide the required funds or assurance thereof within the Ɵme provided, this Lease shall terminate as of the date specified in Lessor's noƟce of terminaƟon.
6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee'ssole expense, fully, diligently and in a Ɵmely manner, materially comply with all Applicable Requirements, the requirements of any applicable fire insurance underwriter or raƟng bureau, and the recommendaƟons of Lessor's engineers and/or consultants which relate in any manner to the Premises, without regard to whethersaid Applicable Requirements are now in effect or become effecƟve aŌer the Start Date. Lessee shall, within 10 days aŌer receipt of Lessor's wriƩen request, provide Lessor with copies of all permits and other documents, and other informaƟon evidencing Lessee's compliance with any Applicable Requirements specified by Lessor, and shall immediately upon receipt, noƟfy Lessor in wriƟng (with copies of any documents involved) of any threatened or actual claim, noƟce, citaƟon, warning, complaint or report pertaining to or involving the failure of Lessee or the Premises to comply with any Applicable Requirements. Likewise, Lessee shall immediately give wriƩen noƟce to Lessor of: (i) any water damage to the Premises and any suspected seepage, pooling, dampness or other condiƟon conducive to the producƟon of mold; or(ii) any musƟness or other odors that might indicate the presence of mold in the Premises.
6.4 InspecƟon; Compliance. Lessor and Lessor's "Lender" (as defined in Paragraph 30) and consultants authorized by Lessor shall have the right to enter into Premises at any Ɵme, in the case of an emergency, and otherwise at reasonable Ɵmes, aŌer reasonable noƟce, for the purpose of inspecƟng and/or tesƟng the condiƟon of the Premises and/or for verifying compliance by Lessee with this Lease. The cost of any such inspecƟons shall be paid by Lessor, unless a violaƟon of Applicable Requirements, or a Hazardous Substance CondiƟon (see Paragraph 9.1e) is found to exist or be imminent, or the inspecƟon is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspecƟon, so long as such inspecƟon is reasonably related to the violaƟon or contaminaƟon. In addiƟon, Lessee shall provide copies of all relevant material safety data sheets(MSDS) to Lessor within 10 days of the receipt of wriƩen request therefor. Lessee acknowledges that any failure on its part to allow such inspecƟons or tesƟng will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fail to allow such inspecƟons and/or tesƟng in a Ɵmely fashion the Base Rent shall be automaƟcally increased, without any requirement for noƟce to Lessee, by an amount equal to 10% of the then exisƟng Base Rent or $100, whichever is greater for the remainder to the Lease. The ParƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee'sfailure to allow such inspecƟon and/or tesƟng. Such increase in Base Rent shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to such failure nor prevent the exercise of any of the other rights and remedies granted hereunder.
7. Maintenance; Repairs; UƟlity InstallaƟons; Trade Fixtures and AlteraƟons.
7.1 Lessee's ObligaƟons. Notwithstanding Lessor's obligaƟon to keep the Premises in good condiƟon and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as addiƟonal rent for that porƟon of the cost of any maintenance and repair of the Premises, or any equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is aƩributable to abuse or misuse. In addiƟon, Lessee rather than the Lessor shall be responsible for the cost of painƟng, repairing or replacing wall coverings, and to repair or replace any similar improvements within the Premises. Lessor may, at its opƟon, upon reasonable noƟce, elect to have Lessee perform any parƟcular such maintenance or repairs the cost of which is otherwise Lessee'sresponsibility hereunder."
7.2 Lessor's ObligaƟons. Subject to the provisions of Paragraphs 2.2 (CondiƟon), 2.3 (Compliance), 4.2 (OperaƟng Expenses), 6 (Use), 7.1 (Lessee's ObligaƟons), 9 (Damage or DestrucƟon) and 14 (CondemnaƟon), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condiƟon and repair the foundaƟons, exterior walls, structural condiƟon of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke detecƟon systems, fire hydrants, and the Common Areas.
7.3 UƟlity InstallaƟons; Trade Fixtures; AlteraƟons.
(a) DefiniƟons. The term "UƟlity InstallaƟons" refersto all floor and window coverings, air lines, vacuum lines, power panels, electrical distribuƟon, security and fire protecƟon systems, communicaƟon cabling, lighƟng fixtures, HVAC equipment, and plumbing in or on the Premises. The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be removed without doing material damage to the Premises. The term "AlteraƟons" shall mean any modificaƟon of the improvements, other than UƟlity InstallaƟons or Trade Fixtures, whether by addiƟon or deleƟon. "Lessee Owned AlteraƟons and/or UƟlity InstallaƟons" are defined as AlteraƟons and/or UƟlity InstallaƟons made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). (b) Consent. Lessee shall not make any AlteraƟons or UƟlity InstallaƟonsto the Premises without Lessor's prior wriƩen consent. Lessee may, however, make non-structural AlteraƟons or UƟlity InstallaƟons to the interior of the Premises(excluding the roof) without such consent but upon noƟce to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocaƟng or removing the roof, ceilings, floors or any exisƟng walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do not trigger the requirement for addiƟonal modificaƟons and/or improvements to the Premises resulƟng from Applicable Requirements, such as compliance with Title 24, and the cumulaƟve cost thereof during this Lease as extended does not exceed $2000. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetraƟons and/or install anything on the roof without the prior wriƩen approval of Lessor. Lessor may, as a precondiƟon to granƟng such approval, require Lessee to uƟlize a contractor chosen and/or approved by Lessor. Any AlteraƟons or UƟlity InstallaƟons that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in wriƩen form with detailed plans. Consent shall be deemed condiƟoned upon Lessee's: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specificaƟons prior to commencement of the work, and (iii) compliance with all condiƟons ofsaid permits and other Applicable Requirements in a prompt and expediƟous manner.
Any AlteraƟons or UƟlity InstallaƟons shall be performed in a workmanlike manner with good and sufficient materials. Lessee shall promptly upon compleƟon furnish Lessor with as-built plans and specificaƟons. For work which costs an amount in excess of one month's Base Rent, Lessor may condiƟon its consent upon Lessee providing a lien and compleƟon bond in an amount equal to 150% of the esƟmated cost ofsuch AlteraƟon or UƟlity InstallaƟon and/or upon Lessee's posƟng an addiƟonal Security Deposit with Lessor. In addition to and without limiting the other requirements of this Paragraph
7.3, all utilities, installations, and alterations made by Lessee shall also be subject to the provisions of Exhibit "D" attached to this Lease.
(c) Liens; Bonds. Lessee shall pay, when due, all claimsfor labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises or any interest therein. Lessee shall give Lessor not lessthan 10 days noƟce prior to the commencement of any work in, on or about the Premises, and Lessor shall have the right to post noƟces of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at itssole expense defend and protect itself, Lessor and the Premises against the same and shall pay and saƟsfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessorshall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor against liability for the same. If Lessor elects to parƟcipate in any such acƟon, Lessee shall pay Lessor's aƩorneys' fees and costs.
7.4 Ownership; Removal; Surrender; and RestoraƟon.
(a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinaŌer provided, all AlteraƟons and UƟlity InstallaƟons made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor may, at any Ɵme, elect in wriƟng to be the owner of all or any specified part of the Lessee Owned AlteraƟons and UƟlity InstallaƟons. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned AlteraƟons and UƟlity InstallaƟons shall, at the expiraƟon or terminaƟon of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. (b) Removal. By delivery to Lessee of wriƩen noƟce from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned AlteraƟons or UƟlity InstallaƟons be removed by the expiraƟon or terminaƟon of this Lease. Lessor may require the removal at any Ɵme of all or any part of any Lessee Owned AlteraƟons or UƟlity InstallaƟons made without the required consent. (c) Surrender; RestoraƟon. Lessee shall surrender the Premises by the ExpiraƟon Date or any earlier terminaƟon date, with all of the improvements, parts and surfacesthereof clean and free of debris, and in good operaƟng order, condiƟon and state of repair, ordinary wear and tear excepted. "Ordinary wear and tear" shall not include any damage or deterioraƟon that would have been prevented by good maintenance pracƟce. Notwithstanding the foregoing and the provisions of Paragraph 7.1(a), if the Lessee occupies the Premises for 12 months or less, then Lessee shall surrender the Premisesin the same condiƟon as delivered to Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installaƟon, maintenance or removal of Trade Fixtures, Lessee owned AlteraƟons and/or UƟlity InstallaƟons, furnishings, and equipment as well asthe removal of any storage tank installed by or for Lessee. Lessee shall also remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous Substances which were deposited via underground migraƟon from areas outside of the Premises) to the level specified in Applicable Requirements. Trade Fixturesshall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on or before the ExpiraƟon Date or any earlierterminaƟon date shall be deemed to have been abandoned by Lessee and may be disposed of or retained by Lessor as Lessor may desire. The failure by Lessee to Ɵmely vacate the Premises pursuant to this Paragraph 7.4(c) without the express wriƩen consent of Lessor shall consƟtute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.(See Addendum Paragraph 4)
8.1 Insurance Premiums. The cost of the premiums for the insurance policies maintained by Lessor pursuant to paragraph 8 are included as OperaƟng Expenses (see paragraph 4.2 (c)(iv)). Said costs shall include increases in the premiums resulƟng from addiƟonal coverage related to requirements of the holder of a mortgage or deed of trust covering the Premises, Building and/or Project, increased valuaƟon of the Premises, Building and/or Project, and/or a general premium rate increase. Said costs shall not, however, include any premium increases resulƟng from the nature of the occupancy of any other tenant of the Building. If the Project was not insured for the enƟrety of the Base Year, then the base premium shall be the lowest annual premium reasonably obtainable for the required insurance as of the Start Date, assuming the most nominal use possible of the Building and/or Project. In no event, however, shall Lessee be responsible for any porƟon of the premium cost aƩributable to liability insurance coverage in excess of $2,000,000 procured under Paragraph 8.2(b).
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecƟng Lessee and Lessor as an addiƟonal insured against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Lessee shall add Lessor as an addiƟonal insured by means of an endorsement at least as broad as the Insurance Service OrganizaƟon's "AddiƟonal Insured-Managers or Lessors of Premises" Endorsement and coverage shall also be extended to include damage caused by heat,smoke or fumesfrom a hosƟle fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizaƟons, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee'sindemnity obligaƟons under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligaƟon hereunder. Lessee shall provide an endorsement on itsliability policy(ies) which provides that itsinsurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excessinsurance only.
(b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph 8.2(a), in addiƟon to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an addiƟonal insured therein.
8.3 Property Insurance - Building, Improvements and Rental Value. (a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss or damage to the Building and/or Project. The amount of such insurance shall be equal to the full insurable replacement cost of the Building and/or Project, asthe same shall exist from Ɵme to Ɵme, or the amount required by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. Lessee Owned AlteraƟons and UƟlity InstallaƟons, Trade Fixtures, and Lessee's personal property shall be insured by Lessee not by Lessor. If the coverage is available and commercially appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debrisremoval and the enforcement of any Applicable Requirements requiring the upgrading, demoliƟon, reconstrucƟon or replacement of any porƟon of the Premises asthe result of a covered loss. Said policy or policies shall also contain an agreed valuaƟon provision in lieu of any coinsurance clause, waiver ofsubrogaƟon, and inflaƟon guard protecƟon causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deducƟble clause, the deducƟble amountshall not exceed $5,000 per occurrence. (b) Rental Value. Lessor shall also obtain and keep in force a policy or policiesin the name of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an addiƟonal 180 days("Rental Value insurance"). Said insurance shall contain an agreed valuaƟon provision in lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period.
(c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Project if said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. (d) Lessee'sImprovements. Since Lessor isthe Insuring Party, Lessor shall not be required to insure Lessee Owned AlteraƟons and UƟlity InstallaƟons unless the item in quesƟon has become the property of Lessor under the terms of this Lease.
8.4 Lessee's Property; Business InterrupƟon Insurance; Worker's CompensaƟon Insurance. (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee's personal property, Trade Fixtures, and Lessee Owned AlteraƟons and UƟlity InstallaƟons. Such insurance shall be full replacement cost coverage with a deducƟble of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned AlteraƟons and UƟlity InstallaƟons. (b) Worker's CompensaƟon Insurance. Lessee shall obtain and maintain Worker's CompensaƟon Insurance in such amount as may be required by Applicable Requirements. Such policy shall include a 'Waiver of SubrogaƟon' endorsement. Lessee shall provide Lessor with a copy of such endorsement along with the cerƟficate of insurance or copy of the policy required by paragraph 8.5.
(c) Business InterrupƟon. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings aƩributable to all perils commonly insured against by prudent lessees in the business of Lessee or aƩributable to prevenƟon of accessto the Premises as a result of such perils.
(d) No RepresentaƟon of Adequate Coverage. Lessor makes no representaƟon that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operaƟons or obligaƟons under this Lease.
8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy term a "General Policyholders RaƟng" of at least A-, VII, as set forth in the most current issue of "Best'sInsurance Guide", or such other raƟng as may be required by a Lender. Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor cerƟfied copies of policies of such insurance or cerƟficates with copies of the required endorsements evidencing the existence and amounts of the required insurance. No such policy shall be cancelable or subject to modificaƟon except aŌer 10 days prior wriƩen noƟce to Lessor. Lessee shall, at least 30 days prior to the expiraƟon ofsuch policies, furnish Lessor with evidence of renewals or "insurance binders" evidencing renewal thereof, or Lessor may increase his liability insurance coverage and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to, procure and maintain the same.
8.6 Waiver of SubrogaƟon. Without affecƟng any other rights or remedies, Lessee and Lessor each hereby release and relieve the other, and waive their enƟre right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perilsrequired to be insured against herein. The effect of such releases and waivers is not limited by the amount of insurance carried or required, or by any deducƟbles applicable hereto. The ParƟes agree to have their respecƟve property damage insurance carriers waive any right to subrogaƟon that such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby.
8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor's master or ground lessor, partners and Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalƟes, aƩorneys' and consultants' fees, expenses and/or liabiliƟes arising out of, involving, or in connecƟon with, a Breach of the Lease by Lessee and/or the use and/or occupancy of the Premises and/or Project by Lessee and/or by Lessee's employees, contractors or invitees. If any acƟon or proceeding is brought against Lessor by reason of any of the foregoing maƩers, Lessee shall upon noƟce defend the same at Lessee's expense by counsel reasonably saƟsfactory to Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified.
8.8 ExempƟon of Lessor and its Agentsfrom Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agentsshall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whethersuch damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstrucƟon or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighƟng fixtures, or from any other cause, whether the said injury or damage results from condiƟons arising upon the Premises or upon other porƟons of the Building, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor orits agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it isintended that Lessee'ssole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.
8.9 Failure to Provide Insurance. Lessee acknowledgesthat any failure on its part to obtain or maintain the insurance required herein will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month or porƟon thereof that Lessee does not maintain the required insurance and/or does not provide Lessor with the required binders or cerƟficates evidencing the existence of the required insurance, the Base Rent shall be automaƟcally increased, without any requirement for noƟce to Lessee, by an amount equal to 10% of the then exisƟng Base Rent or $100, whichever is greater. The parƟes agree that such increase in Base Rent representsfair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee'sfailure to maintain the required insurance. Such increase in Base Rentshall in no event consƟtute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, prevent the exercise of any of the other rights and remedies granted hereunder, nor relieve Lessee of its obligaƟon to maintain the insurance specified in this Lease.
9. Damage or DestrucƟon.
9.1 DefiniƟons.
(a) "Premises ParƟal Damage" shall mean damage or destrucƟon to the improvements on the Premises, other than Lessee Owned AlteraƟons and UƟlity InstallaƟons, which can reasonably be repaired in 3 months orless from the date of the damage or destrucƟon, and the cost thereof does not exceed a sum equal to 6 month's Base Rent. Lessor shall noƟfy Lessee in wriƟng within 30 days from the date of the damage or destrucƟon asto whether or not the damage is ParƟal or Total. (b) "Premises Total DestrucƟon" shall mean damage or destrucƟon to the improvements on the Premises, other than Lessee Owned AlteraƟons and UƟlity InstallaƟons and Trade Fixtures, which cannot reasonably be repaired in 3 months or lessfrom the date of the damage or destrucƟon and/or the cost thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall noƟfy Lessee in wriƟng within 30 days from the date of the damage or destrucƟon as to whether or not the damage is ParƟal or Total.
(c) "Insured Loss" shall mean damage or destrucƟon to improvements on the Premises, other than Lessee Owned AlteraƟons and UƟlity InstallaƟons and Trade Fixtures, which was caused by an event required to be covered by the insurance described inParagraph 8 of this Lease (See Addendum Paragraph 4)Paragraph 8.3(a), irrespecƟve of any deducƟble amounts or coverage limits involved. (d) "Replacement Cost" shall mean the cost to repair or rebuild the improvements owned by Lessor at the Ɵme of the occurrence to their condiƟon exisƟng immediately prior thereto, including demoliƟon, debris removal and upgrading required by the operaƟon of Applicable Requirements, and without deducƟon for depreciaƟon.
(e) "Hazardous Substance CondiƟon" shall mean the occurrence or discovery of a condiƟon involving the presence of, or a contaminaƟon by, a Hazardous Substance, in, on, or under the Premises which requires restoraƟon.
9.2 ParƟal Damage - Insured Loss. If a Premises ParƟal Damage that is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned AlteraƟons and UƟlity InstallaƟons) as soon as reasonably possible and this Lease shall conƟnue in full force and effect; provided, however, that Lessee shall, at Lessor's elecƟon, make the repair of any damage or destrucƟon the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basisfor that purpose. Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligaƟon to pay for the shortage in insurance proceeds or
to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of wriƩen noƟce ofsuch shortage and request therefor. If Lessor receivessaid funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them assoon asreasonably possible and this Lease shall remain in full force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by wriƩen noƟce to Lessee within 10 days thereaŌer to: (i) make such restoraƟon and repair as is commercially reasonable with Lessor paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 daysthereaŌer. Lessee shall not be enƟtled to reimbursement of any funds contributed by Lessee to repair any such damage or destrucƟon. Premises ParƟal Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the repairs if made by either Party.
9.3 ParƟal Damage - Uninsured Loss. If a Premises ParƟal Damage that is not an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor's expense (subject to reimbursement pursuant to Paragraph 4.2), in which event this Lease shall conƟnue in full force and effect, or (ii) terminate this Lease by giving wriƩen noƟce to Lessee within 30 days aŌer receipt by Lessor of knowledge of the occurrence of such damage. Such terminaƟon shall be effecƟve 60 days following the date of such noƟce. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days aŌer receipt of the terminaƟon noƟce to give wriƩen noƟce to Lessor of Lessee's commitment to pay for the repair ofsuch damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or saƟsfactory assurance thereof within 30 days aŌer making such commitment. In such event this Lease shall conƟnue in full force and effect, and Lessor shall proceed to make such repairs as soon asreasonably possible aŌer the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the terminaƟon noƟce.
9.4 Total DestrucƟon. Notwithstanding any other provision hereof, if a Premises Total DestrucƟon occurs, this Lease shall terminate 60 days following such DestrucƟon. If the damage or destrucƟon was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor's damages from Lessee,. except as provided in Paragraph 8.6.
9.5 Damage Near End of Term. If at any Ɵme during the last 6 months of this Lease there is damage for which the cost to repair exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effecƟve 60 daysfollowing the date of occurrence of such damage by giving a wriƩen terminaƟon noƟce to Lessee within 30 days aŌer the date of occurrence ofsuch damage. Notwithstanding the foregoing, if Lessee at that Ɵme has an exercisable opƟon to extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a) exercising such opƟon and (b) providing Lessor with any shortage in insurance proceeds(or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days aŌer Lessee's receipt of Lessor's wriƩen noƟce purporƟng to terminate this Lease, or (ii) the day prior to the date upon which such opƟon expires. If Lessee duly exercises such opƟon during such period and provides Lessor with funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such damage as soon asreasonably possible and this Lease shall conƟnue in full force and effect. If Lessee fails to exercise such opƟon and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the terminaƟon noƟce and Lessee's opƟon shall be exƟnguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event of Premises ParƟal Damage or Premises Total DestrucƟon or a Hazardous Substance CondiƟon for which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediaƟon or restoraƟon of such damage shall be abated in proporƟon to the degree to which Lessee's use of the Premises is impaired, but not to exceed the proceeds received from the Rental Value insurance. All other obligaƟons of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destrucƟon, remediaƟon, repair or restoraƟon except as provided herein.
(b) Remedies. If Lessor is obligated to repair or restore the Premises and does not commence, in a substanƟal and meaningful way, such repair or restoraƟon within 90 days aŌersuch obligaƟon shall accrue, Lessee may, at any Ɵme prior to the commencement of such repair or restoraƟon, give wriƩen noƟce to Lessor and to any Lenders of which Lessee has actual noƟce, of Lessee's elecƟon to terminate this Lease on a date not lessthan 60 days following the giving of such noƟce. If Lessee givessuch noƟce and such repair or restoraƟon is not commenced within 30 days thereaŌer, this Lease shall terminate as of the date specified in said noƟce. If the repair or restoraƟon is commenced within such 30 days, this Lease shall conƟnue in full force and effect. "Commence" shall mean either the uncondiƟonal authorizaƟon of the preparaƟon of the required plans, or the beginning of the actual work on the Premises, whichever first occurs.
9.7 TerminaƟon; Advance Payments. Upon terminaƟon of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addiƟon, return to Lessee so much of Lessee's Security Deposit as has not been, or is not then required to be, used by Lessor.
10. Real Property Taxes.
10.1 DefiniƟons. As used herein, the term "Real Property Taxes" shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor'sright to other income therefrom, and/or Lessor's business of leasing, by any authority having the direct or indirect powerto tax and where the funds are generated with reference to the Project address. "Real Property Taxes" shall also include any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership of the Project, (ii) a change in the improvements thereon, and/or (iii) levied or assessed on machinery or equipment provided by Lessor to Lessee pursuant to this Lease.
10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the Real Property Taxes applicable to the Project, and said payments shall be included in the calculaƟon of OperaƟng Expenses in accordance with the provisions of Paragraph 4.2.
10.3 AddiƟonal Improvements. OperaƟng Expenses shall not include Real Property Taxes specified in the tax assessor's records and work sheets as being caused by addiƟonal improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the Ɵme OperaƟng Expenses are payable under Paragraph 4.2, the enƟrety of any increase in Real Property Taxes if assessed solely by reason of AlteraƟons, Trade Fixtures or UƟlity InstallaƟons placed upon the Premises by Lessee or at Lessee'srequest or by reason of any alteraƟons or improvementsto the Premises made by Lessor subsequent to the execuƟon of this Lease by the ParƟes.
10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proporƟon of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such proporƟon to be determined by Lessor from the respecƟve valuaƟons assigned in the assessor's work sheets or such other informaƟon as may be reasonably available. Lessor's reasonable determinaƟon thereof, in good faith, shall be conclusive.
10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and levied upon Lessee Owned AlteraƟons and UƟlity InstallaƟons, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee Owned AlteraƟons and UƟlity InstallaƟons, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real
property of Lessor. If any of Lessee'ssaid property shall be assessed with Lessor'sreal property, Lessee shall pay Lessor the taxes aƩributable to Lessee's property within 10 days aŌer receipt of a wriƩen statement seƫng forth the taxes applicable to Lessee's property.
11. UƟliƟes and Services.
11.1 Services Provided by Lessor. Lessor shall provide heaƟng, venƟlaƟon, air condiƟoning, reasonable amounts of electricity for normal lighƟng and office machines, water for reasonable and normal drinking and lavatory use in connecƟon with an office, and replacement light bulbs and/or fluorescent tubes and ballasts forstandard overhead fixtures. Lessor shall also provide janitorial services to the Premises and Common Areas 5 Ɵmes per week, excluding Building Holidays, or pursuant to the aƩached janitorial schedule, if any. Lessor shall not, however, be required to provide janitorial services to kitchens or storage areas included within the Premises.
11.2 Services Exclusive to Lessee. Notwithstanding the provisions of paragraph 11.1, Lessee shall pay for all water, gas, light, power, telephone and other uƟliƟes and servicesspecially or exclusively supplied and/or metered exclusively to the Premises or to Lessee, together with any taxesthereon. Notwithstanding the provisions of Paragraph 4.2(vi), if a service is deleted by Paragraph 1.13 and such service is notseparately metered to the Premises, Lessee shall pay at Lessor's opƟon, either Lessee's Share or a reasonable proporƟon to be determined by Lessor of all charges for such jointly metered service.
11.3 Hours of Service. Said services and uƟliƟesshall be provided during Ɵmesset forth in Paragraph 1.12. UƟliƟes and servicesrequired at other Ɵmes shall be subject to advance request and reimbursement by Lessee to Lessor of the cost thereof.
11.4 Excess Usage by Lessee. Lessee shall not make connecƟon to the uƟliƟes except by or through exisƟng outlets and shall not install or use machinery or equipment in or about the Premises that uses excess water, lighƟng or power, or suffer or permit any act that causes extra burden upon the uƟliƟes or services, including but not limited to security and trash services, over standard office usage for the Project. Lessor shall require Lessee to reimburse Lessor for any excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may, in itssole discreƟon, install at Lessee's expense supplemental equipment and/or separate metering applicable to Lessee's excess usage or loading.
11.5 InterrupƟons. There shall be no abatement of rent and Lessor shall not be liable in any respect whatsoever for the inadequacy, stoppage, interrupƟon or disconƟnuance of any uƟlity or service due to riot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's reasonable control or in cooperaƟon with governmental request or direcƟons.
11.6 Within fiŌeen days of Lessor’s wriƩen request, Lessee agrees to deliver to Lessor such informaƟon, documents and/or authorizaƟon as Lessor needs in order for Lessorto comply with new or exisƟng Applicable Requirements relaƟng to commercial building energy usage, raƟngs, and/or the reporƟng thereof.
12. Assignment and Subleƫng.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operaƟon of law assign, transfer, mortgage or encumber (collecƟvely, "assign or assignment") orsublet all or any part of Lessee's interest in this Lease or in the Premises without Lessor's prior wriƩen consent. (b) Unless Lessee is a corporaƟon and its stock is publicly traded on a naƟonal stock exchange, a change in the control of Lessee shall consƟtute an assignment requiring consent. The transfer, on a cumulaƟve basis, of 25% or more of the voƟng control of Lessee shall consƟtute a change in control for this purpose. (c) The involvement of Lessee or its assets in any transacƟon, or series of transacƟons (by way of merger, sale, acquisiƟon, financing, transfer, leveraged buyout or otherwise), whether or not a formal assignment or hypothecaƟon of this Lease or Lessee's assets occurs, which results or willresult in a reducƟon of the Net Worth of Lessee by an amount greater than 25% of such Net Worth asit was represented at the Ɵme of the execuƟon of this Lease or at the Ɵme of the most recent assignment to which Lessor has consented, or as it exists immediately prior to said transacƟon or transacƟons consƟtuƟng such reducƟon, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounƟng principles. (d) An assignment or subleƫng without consentshall, at Lessor's opƟon, be a Default curable aŌer noƟce per Paragraph 13.1(d), or a noncurable Breach without the necessity of any noƟce and grace period. If Lessor elects to treatsuch unapproved assignment or subleƫng as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days wriƩen noƟce, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event ofsuch Breach and rental adjustment, (i) the purchase price of any opƟon to purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to 110% of the scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injuncƟve relief. (f) Lessor may reasonably withhold consent to a proposed assignment or subleƫng if Lessee is in Default at the Ɵme consent is requested. (g) Notwithstanding the foregoing, allowing a de minimis porƟon of the Premises, ie. 20 square feet or less, to be used by a third party vendor in connecƟon with the installaƟon of a vending machine or payphone shall not consƟtute a subleƫng.
12.2 Terms and CondiƟons Applicable to Assignment and Subleƫng. (a) Regardless of Lessor's consent, no assignment orsubleƫng shall : (i) be effecƟve without the express wriƩen assumpƟon by such assignee or sublessee of the obligaƟons of Lessee under this Lease, (ii) release Lessee of any obligaƟons hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or for the performance of any other obligaƟons to be performed by Lessee. (b) Lessor may accept Rent or performance of Lessee's obligaƟons from any person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall consƟtute a waiver or estoppel of Lessor's right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment orsubleƫng shall not consƟtute a consent to any subsequent assignment orsubleƫng. (d) In the event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee's obligaƟons under this Lease, including any assignee or sublessee, without first exhausƟng Lessor's remedies against any other person or enƟty responsible therefor to Lessor, or any security held by Lessor. (e) Each request for consent to an assignment or subleƫng shall be in wriƟng, accompanied by informaƟon relevant to Lessor's determinaƟon as to the financial and operaƟonal responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to the intended use and/or required modificaƟon of the Premises, if any, together with a fee of $500 as consideraƟon for Lessor's considering and processing said request. Lessee agrees to provide Lessor with such other or addiƟonal informaƟon and/or documentaƟon as may be reasonably requested. (See also Paragraph 36) (f) Any assignee of, or sublessee under, this Lease shall, by reason of accepƟng such assignment, entering into such sublease, or entering into possession of the Premises or any porƟon thereof, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condiƟon and obligaƟon herein to be observed or performed by Lessee during the term of said assignment orsublease, other than such obligaƟons as are contrary to or inconsistent with provisions of an assignment orsublease to which Lessor hasspecifically consented to in wriƟng. (g) Lessor's consent to any assignment or subleƫng shall not transfer to the assignee or sublessee any OpƟon granted to the original Lessee by this Lease
unless such transfer is specifically consented to by Lessor in wriƟng. (See Paragraph 39.2)
12.3 AddiƟonal Terms and CondiƟons Applicable to Subleƫng. The following terms and condiƟons shall apply to any subleƫng by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfersto Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessor may collectsuch Rent and apply same toward Lessee's obligaƟons under this Lease; provided, however, that unƟl a Breach shall occur in the performance of Lessee's obligaƟons, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligaƟons any such excess shall be refunded to Lessee. Lessor shall not, by reason of the foregoing or any assignment ofsuch sublease, nor by reason of the collecƟon of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligaƟons to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a wriƩen noƟce from Lessor staƟng that a Breach exists in the performance of Lessee's obligaƟons under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such noƟce from Lessor and shall pay all Rents to Lessor without any obligaƟon or right to inquire as to whether such Breach exists, notwithstanding any claim from Lessee to the contrary. (b) In the event of a Breach by Lessee, Lessor may, at its opƟon, require sublessee to aƩorn to Lessor, in which event Lessor shall undertake the obligaƟons of the sublessor undersuch sublease from the Ɵme of the exercise of said opƟon to the expiraƟon of such sublease; provided, however, Lessor shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. (c) Any maƩer requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor's prior wriƩen consent. (e) Lessor shall deliver a copy of any noƟce of Default or Breach by Lessee to the sublessee, who shall have the right to cure the Default of Lessee within the grace period, if any,specified in such noƟce. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, condiƟons or Rules and RegulaƟons under this Lease. A "Breach" is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period:
(a) The abandonment of the Premises; or the vacaƟng of the Premises without providing a commercially reasonable level of security, or where the coverage of the property insurance described in Paragraph 8.3 8 (See Addendum Paragraph 4)isjeopardized as a result thereof, or without providing reasonable assurances to minimize potenƟal vandalism. (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligaƟon under this Lease which endangers or threatens life or property, where such failure conƟnues for a period of 3 business daysfollowing wriƩen noƟce to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF
RENT OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSION OF THE PREMISES.
(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the commission of waste, act or acts consƟtuƟng public or private nuisance, and/or an illegal acƟvity on the Premises by Lessee, where such acƟons conƟnue for a period of 3 business days following wriƩen noƟce to Lessee. In the event that Lessee commits waste, a nuisance or an illegal acƟvity a second Ɵme then, the Lessor may elect to treat such conduct as a non-curable Breach rather than a Default.
(d) The failure by Lessee to provide (i) reasonable wriƩen evidence of compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subleƫng, (iv) an Estoppel CerƟficate or financial statements, (v) a requested subordinaƟon, (vi) evidence concerning any guaranty and/or Guarantor, (vii) any document requested under Paragraph 41, (viii) material safety data sheets (MSDS), or (ix) any other documentaƟon or informaƟon which Lessor may reasonably require of Lessee under the terms of this Lease, where any such failure conƟnues for a period of 10 daysfollowing wriƩen noƟce to Lessee.
(e) A Default by Lessee asto the terms, covenants, condiƟons or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default conƟnues for a period of 30 days aŌer wriƩen noƟce; provided, however, that if the nature of Lessee's Default issuch that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and thereaŌer diligently prosecutes such cure to compleƟon. (f) The occurrence of any of the following events: (i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a "debtor" as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a peƟƟon filed against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substanƟally all of Lessee's assets located at the Premises or of Lessee'sinterest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the aƩachment, execuƟon or other judicial seizure of substanƟally all of Lessee's assets located at the Premises or of Lessee's interest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining provisions. (g) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially false. (h) If the performance of Lessee's obligaƟons under this Lease is guaranteed: (i) the death of a Guarantor, (ii) the terminaƟon of a Guarantor's liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a Guarantor's breach of its guaranty obligaƟon on an anƟcipatory basis, and Lessee's failure, within 60 days following wriƩen noƟce of any such event, to provide wriƩen alternaƟve assurance or security, which, when coupled with the then exisƟng resources of Lessee, equals or exceedsthe combined financial resources of Lessee and the Guarantors that existed at the Ɵme of execuƟon of this Lease.
13.2 Remedies. If Lessee fails to perform any of its affirmaƟve duƟes or obligaƟons, within 10 days aŌer wriƩen noƟce (or in case of an emergency, without noƟce), Lessor may, at its opƟon, perform such duty or obligaƟon on Lessee's behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further noƟce or demand, and without limiƟng Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee'sright to possession of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be enƟtled to recover from Lessee: (i) the unpaid Rent which had been earned at the Ɵme of terminaƟon; (ii) the worth at the Ɵme of award of the amount by which the unpaid rent which would have been earned aŌer terminaƟon unƟl the Ɵme of award exceeds the amount of such rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the Ɵme of award of the amount by which the unpaid rent for the balance of the term aŌer the Ɵme of award exceeds the amount of such rental lossthat the Lessee proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately caused by the Lessee's failure to perform its obligaƟons under this Lease or which in the ordinary course of things would be likely to result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of releƫng, including necessary renovaƟon and alteraƟon of the Premises, reasonable aƩorneys' fees, and that porƟon of any leasing commission paid by Lessor in connecƟon with this Lease applicable to the unexpired term of this Lease. The worth at the Ɵme of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by discounƟng such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the Ɵme of award plus one percent. Efforts by Lessor to miƟgate damages caused by Lessee's Breach of this Lease shall not waive Lessor's right to recover any damagesto which Lessor is otherwise enƟtled. If terminaƟon of this Lease is obtained through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right to recover all or any part thereof in a separate suit. If a noƟce and grace period required under Paragraph 13.1 was not previously given, a noƟce to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute shall also consƟtute the noƟce required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the greater of the two such grace periodsshall consƟtute both an unlawful detainer and a Breach of this Lease enƟtling Lessor to the remedies provided for in this Lease and/or by said statute. (b) ConƟnue the Lease and Lessee's right to possession and recover the Rent asit becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitaƟons. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor'sinterests, shall not consƟtute a terminaƟon of the Lessee's right to possession.
(c) Pursue any other remedy now or hereaŌer available under the laws or judicial decisions of the state wherein the Premises are located. The expiraƟon or terminaƟon of this Lease and/or the terminaƟon of Lessee'sright to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to maƩers occurring or accruing during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, the cost of tenant improvementsfor Lessee paid for or performed by Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideraƟon for Lessee's entering into this Lease, all of which concessions are hereinaŌer referred to as "Inducement Provisions," shall be deemed condiƟoned upon Lessee's full and faithful performance of all of the terms, covenants and condiƟons of this Lease. Upon Breach of this Lease by Lessee, any such Inducement Provision shall automaƟcally be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideraƟon theretofore abated, given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure ofsaid Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which iniƟated the operaƟon of this paragraph shall not be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in wriƟng by Lessor at the Ɵme of such acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costsinclude, but are not limited to, processing and accounƟng charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days aŌer such amountshall be due, then, without any requirement for noƟce to Lessee, Lessee shall immediately pay to Lessor a one-Ɵme late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parƟes hereby agree that such late charge represents a fair and reasonable esƟmate of the costs Lessor will incur by reason ofsuch late payment.
Acceptance of such late charge by Lessor shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecuƟve installments of Base Rent, then notwithstanding any provision of this Lease to the contrary, Base Rent shall, at Lessor's opƟon, become due and payable quarterly in advance.
13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due shall bear interest from the 31st day aŌer it was due. The interest ("Interest") charged shall be computed at the rate of 10% per annum but shall not exceed the maximum rate allowed by law. Interest is payable in addiƟon to the potenƟal late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor. (See Addendum Paragraph 5)
(a) NoƟce of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable Ɵme to perform an obligaƟon required to be performed by Lessor. For purposes of this Paragraph, a reasonable Ɵme shall in no event be less than 30 days aŌer receipt by Lessor, and any Lender whose name and address shall have been furnished to Lessee in wriƟng for such purpose, of wriƩen noƟce specifying wherein such obligaƟon of Lessor has not been performed; provided, however, that if the nature of Lessor's obligaƟon issuch that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such 30 day period and thereaŌer diligently pursued to compleƟon. (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days aŌer receipt of said noƟce, or if having commenced said cure they do not diligently pursue it to compleƟon, then Lessee may elect to cure said breach at Lessee's expense and offset from Rent the actual and reasonable cost to perform such cure, provided, however, thatsuch offset shall not exceed an amount equal to the greater of one month's Base Rent or the Security Deposit, reserving Lessee'sright to seek reimbursement from Lessor for any such expense in excess of such offset. Lessee shall document the cost ofsaid cure and supply said documentaƟon to Lessor.
14. CondemnaƟon. If the Premises or any porƟon thereof are taken under the power of eminent domain or sold under the threat of the exercise of said power (collecƟvely "CondemnaƟon"), this Lease shall terminate as to the part taken as of the date the condemning authority takes Ɵtle or possession, whichever first occurs.
If more than 10% of the rentable floor area of the Premises, or more than 25% of Lessee's Reserved Parking Spaces, if any, are taken by CondemnaƟon, Lessee may, at Lessee's opƟon, to be exercised in wriƟng within 10 days aŌer Lessor shall have given Lessee wriƩen noƟce of such taking (or in the absence of such noƟce, within 10 days aŌer the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takessuch possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect as to the porƟon of the Premises remaining, except that the Base Rent shall be reduced in proporƟon to the reducƟon in uƟlity of the Premises caused by such CondemnaƟon. CondemnaƟon awards and/or payments shall be the property of Lessor, whethersuch award shall be made as compensaƟon for diminuƟon in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be enƟtled to any compensaƟon paid by the condemnor for Lessee'srelocaƟon expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All AlteraƟons and UƟlity InstallaƟons made to the Premises by Lessee, for purposes of CondemnaƟon only, shall be considered the property of the Lessee and Lessee shall be enƟtled to any and all compensaƟon which is payable therefor. In the event that this Lease is not terminated by reason of the CondemnaƟon, Lessor shall repair any damage to the Premises caused by such CondemnaƟon.
15. Brokerage Fees.
15.1 AddiƟonal Commission. In addiƟon to the payments owed pursuant to Paragraph 1.10 above, Lessor agrees that: (a) if Lessee exercises any OpƟon, (b) if Lessee or anyone affiliated with Lessee acquires from Lessor any rights to the Premises or other premises owned by Lessor and located within the Project, (c) if Lessee remainsin possession of the Premises, with the consent of Lessor, aŌer the expiraƟon of this Lease, or (d) if Base Rent isincreased, whether by agreement or
operaƟon of an escalaƟon clause herein, then, Lessor shall pay Brokers a fee in accordance with the fee schedule of the Brokersin effect at the Ɵme the Lease was executed.
15.2 AssumpƟon of ObligaƟons. Any buyer or transferee of Lessor'sinterest in this Lease shall be deemed to have assumed Lessor's obligaƟon hereunder.
Brokersshall be third party beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amountsshall accrue Interest. In addiƟon, if Lessor fails to pay any amountsto Lessee's Broker when due, Lessee's Broker may send wriƩen noƟce to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days aŌer said noƟce, Lessee shall pay said monies to its Broker and offset such amounts against Rent. In addiƟon, Lessee's Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor's Broker for the limited purpose of collecƟng any brokerage fee owed.
15.3 RepresentaƟons and IndemniƟes of Broker RelaƟonships. Lessee and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker, agent or finder (other than the Brokers and Agents, if any) in connecƟon with this Lease, and that no one other than said named Brokers and Agentsis enƟtled to any commission or finder's fee in connecƟon herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensaƟon or charges which may be claimed by any such unnamed broker, finder or other similar party by reason of any dealings or acƟons of the indemnifying Party, including any costs, expenses, aƩorneys' feesreasonably incurred with respect thereto.
16. Estoppel CerƟficates.
(a) Each Party (as "Responding Party") shall within 10 days aŌer wriƩen noƟce from the other Party (the "RequesƟng Party") execute, acknowledge and deliver to the RequesƟng Party a statement in wriƟng in form similar to the then most current "Estoppel CerƟficate" form published BY AIR CRE, plussuch addiƟonal informaƟon, confirmaƟon and/or statements as may be reasonably requested by the RequesƟng Party. (b) If the Responding Party shall failto execute or deliver the Estoppel CerƟficate within such 10 day period, the RequesƟng Party may execute an Estoppel CerƟficate staƟng that: (i) the Lease isin full force and effect without modificaƟon except as may be represented by the RequesƟng Party, (ii) there are no uncured defaults in the RequesƟng Party's performance, and (iii) if Lessor isthe RequesƟng Party, not more than one month's rent has been paid in advance.
ProspecƟve purchasers and encumbrancers may rely upon the RequesƟng Party's Estoppel CerƟficate, and the Responding Party shall be estopped from denying the truth of the facts contained in said CerƟficate. In addiƟon, Lessee acknowledges that any failure on its part to provide such an Estoppel CerƟficate will expose Lessor to risks and potenƟally cause Lessor to incur costs not contemplated by this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the Lessee fail to execute and/or deliver a requested Estoppel CerƟficate in a Ɵmely fashion the monthly Base Rentshall be automaƟcally increased, without any requirement for noƟce to Lessee, by an amount equal to 10% of the then exisƟng Base Rent or $100, whichever is greater for remainder of the Lease. The ParƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee's failure to provide the Estoppel CerƟficate. Such increase in Base Rentshall in no event consƟtute a waiver of Lessee's Default or Breach with respect to the failure to provide the Estoppel CerƟficate nor prevent the exercise of any of the other rights and remedies granted hereunder. (c) If Lessor desiresto finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantorsshall within 10 days aŌer wriƩen noƟce from Lessor deliver to any potenƟal lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser, including but not limited to Lessee's financial statementsfor the past 3 years. Allsuch financial statementsshall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.
17. DefiniƟon of Lessor. The term "Lessor" as used herein shall mean the owner or owners at the Ɵme in quesƟon of the fee Ɵtle to the Premises, or, if thisis a sublease, of the Lessee's interest in the prior lease. In the event of a transfer of Lessor's Ɵtle or interest in the Premises orthis Lease, Lessor shall deliver to the transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all liability with respect to the obligaƟons and/or covenants under this Lease thereaŌer to be performed by the Lessor.
Subject to the foregoing, the obligaƟons and/or covenants in this Lease to be performed by the Lessor shall be binding only upon the Lessor as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as determined by a court of competent jurisdicƟon, shall in no way affect the validity of any other provision hereof.
19. Days. Unless otherwise specifically indicated to the contrary, the word "days" as used in this Lease shall mean and refer to calendar days.
20. LimitaƟon on Liability. The obligaƟons of Lessor under this Lease shall not consƟtute personal obligaƟons of Lessor, or its partners, members, directors, officers or shareholders, and Lessee shall look to the Project, and to no other assets of Lessor, for the saƟsfacƟon of any liability of Lessor with respect to this Lease, and shall not seek recourse against Lessor's partners, members, directors, officers or shareholders, or any of their personal assets for such saƟsfacƟon.
21. Time of Essence. Time is of the essence with respect to the performance of all obligaƟons to be performed or observed by the ParƟes under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between the ParƟes with respect to any maƩer menƟoned herein, and no other prior or contemporaneous agreement or understanding shall be effecƟve. Lessor and Lessee each represents and warrantsto the Brokers that it has made, and isrelying solely upon, its own invesƟgaƟon asto the nature, quality, character and financial responsibility of the other Party to this Lease and asto the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Party.
23. NoƟces.
23.1 NoƟce Requirements. All noƟces required or permiƩed by this Lease or applicable law shall be in wriƟng and may be delivered in person (by hand or by courier) or may be sent by regular, cerƟfied or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, or by email, and shall be deemed sufficiently given ifserved in a manner specified in this Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease shall be that Party's address for delivery or mailing of noƟces. Either Party may by wriƩen noƟce to the otherspecify a different address for noƟce, except that upon Lessee's taking possession of the Premises, the Premises shall consƟtute Lessee's address for noƟce. A copy of all noƟces to Lessor shall be concurrently transmiƩed to such party or parƟes at such addresses as Lessor may from Ɵme to Ɵme hereaŌer designate in wriƟng.
23.2 Date of NoƟce. Any noƟce sent by registered or cerƟfied mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date isshown, the postmark thereon. If sent by regular mail the noƟce shall be deemed given 72 hours aŌer the same is addressed as required herein and mailed with postage prepaid. NoƟces delivered by United States Express Mail or overnight courier that guarantees next day delivery shall be deemed given 24 hours aŌer delivery of the same to the Postal Service or courier. NoƟces delivered by hand, or transmiƩed by facsimile transmission or by email shall be deemed delivered upon actual receipt. If noƟce is received on a Saturday, Sunday or legal holiday, itshall be deemed received on the next business day.
23.3 OpƟons. Notwithstanding the foregoing, in order to exercise any OpƟons (see paragraph 39), the NoƟce must be sent by CerƟfied Mail (return receipt requested), Express Mail (signature required), courier (signature required) or some other methodology that provides a receipt establishing the date the noƟce was
received by the Lessor.
24. Waivers.
(a) No waiver by Lessor of the Default or Breach of any term, covenant or condiƟon hereof by Lessee, shall be deemed a waiver of any other term, covenant or condiƟon hereof, or of any subsequent Default or Breach by Lessee of the same or of any other term, covenant or condiƟon hereof. Lessor's consent to, or approval of, any actshall not be deemed to render unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent or similar act by Lessee, or be construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. (b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of monies or damages due Lessor, notwithstanding any qualifying statements or condiƟons made by Lessee in connecƟon therewith, which such statements and/or condiƟons shall be of no force or effect whatsoever unless specifically agreed to in wriƟng by Lessor at or before the Ɵme of deposit of such payment. (c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.
25. Disclosures Regarding The Nature of a Real Estate Agency RelaƟonship. (a) When entering into a discussion with a real estate agent regarding a real estate transacƟon, a Lessor or Lessee should from the outset understand what type of agency relaƟonship or representaƟon it has with the agent or agents in the transacƟon. Lessor and Lessee acknowledge being advised by the Brokers in thistransacƟon, asfollows:
(i) Lessor's Agent. A Lessor's agent under a lisƟng agreement with the Lessor acts as the agent for the Lessor only. A Lessor's agent or subagent hasthe following affirmaƟve obligaƟons: To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (a) Diligent exercise of reasonable skills and care in performance of the agent's duƟes. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the ParƟes. An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes set forth above.
(ii) Lessee's Agent. An agent can agree to act as agent for the Lessee only. In these situaƟons, the agent is not the Lessor's agent, even if by agreement the agent may receive compensaƟon for servicesrendered, either in full or in part from the Lessor. An agent acƟng only for a Lessee hasthe following affirmaƟve obligaƟons. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: (a) Diligent exercise of reasonable skills and care in performance of the agent's duƟes. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the ParƟes.
An agent is not obligated to reveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟesset forth above.
(iii) Agent RepresenƟng Both Lessor and Lessee. A real estate agent, either acƟng directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transacƟon, but only with the knowledge and consent of both the Lessor and the Lessee. In a dual agency situaƟon, the agent has the following affirmaƟve obligaƟons to both the Lessor and the Lessee: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either Lessor or the Lessee. (b) Other duƟesto the Lessor and the Lessee asstated above in subparagraphs (i) or (ii). In represenƟng both Lessor and Lessee, the agent may not, without the express permission of the respecƟve Party, disclose to the other Party confidenƟal informaƟon, including, but not limited to, facts relaƟng to either Lessee’s or Lessor’s financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact rent, including Lessor’s willingness to accept a rent less than the lisƟng rent or Lessee’s willingness to pay rent greater than the rent offered. The above duƟes of the agent in a real estate transacƟon do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transacƟon. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. Both Lessor and Lessee should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transacƟon can be complex and subject to change. (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The ParƟes agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relaƟng to this Lease may be brought against Broker more than one year aŌer the Start Date and that the liability (including court costs and aƩorneys' fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitaƟon on each Broker's liability shall not be applicable to any gross negligence or willful misconduct of such Broker.
(c) Lessor and Lessee agree to idenƟfy to Brokers as "ConfidenƟal" any communicaƟon or informaƟon given Brokers that is considered by such Party to be confidenƟal.
26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part thereof beyond the expiraƟon or terminaƟon of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the expiraƟon or terminaƟon.
Holdover Base Rentshall be calculated on a monthly basis. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.
27. CumulaƟve Remedies. No remedy or elecƟon hereunder shall be deemed exclusive but shall, wherever possible, be cumulaƟve with all other remedies at law or in equity.
28. Covenants and CondiƟons; ConstrucƟon of Agreement. All provisions of this Lease to be observed or performed by Lessee are both covenants and condiƟons.
In construing this Lease, all headings and Ɵtles are for the convenience of the ParƟes only and shall not be considered a part of this Lease. Whenever required by the context, the singular shall include the plural and vice versa. This Lease shall not be construed asif prepared by one of the ParƟes, but rather according to itsfair meaning as a whole, asif both ParƟes had prepared it.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the parƟes, their personal representaƟves, successors and assigns and be governed by the laws of the State in which the Premises are located. Any liƟgaƟon between the ParƟes hereto concerning this Lease shall be iniƟated in the county in which the Premises are located.
30. SubordinaƟon; AƩornment; Non-Disturbance.
30.1 SubordinaƟon. This Lease and any OpƟon granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecaƟon or security device (collecƟvely, "Security Device"), now or hereaŌer placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modificaƟons, and extensions thereof. Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as "Lender") shall have no liability or obligaƟon to perform any of the obligaƟons of Lessor under this Lease. Any Lender may elect to have this Lease and/or any OpƟon granted
hereby superior to the lien of its Security Device by giving wriƩen noƟce thereof to Lessee, whereupon this Lease and such OpƟons shall be deemed prior to such Security Device, notwithstanding the relaƟve dates of the documentaƟon or recordaƟon thereof.
30.2 AƩornment. In the event that Lessor transfers Ɵtle to the Premises, or the Premises are acquired by another upon the foreclosure or terminaƟon of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, aƩorn to such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the elecƟon of the new owner, this Lease will automaƟcally become a new lease between Lessee and such new owner, and (ii) Lessor shall thereaŌer be relieved of any further obligaƟons hereunder and such new owner shall assume all of Lessor's obligaƟons, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior to acquisiƟon of ownership; (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month'srent, or (d) be liable for the return of any security deposit paid to any prior lessor which was not paid or credited to such new owner.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor aŌer the execuƟon of this Lease, Lessee'ssubordinaƟon of this Lease shall be subject to receiving a commercially reasonable non-disturbance agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance Agreement provides that Lessee's possession of the Premises, and this Lease, including any opƟonsto extend the term hereof, will not be disturbed so long as Lessee is not in Breach hereof and aƩorns to the record owner of the Premises. Further, within 60 days aŌer the execuƟon of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable effortsto obtain a Non-Disturbance Agreement from the holder of any pre-exisƟng Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee's opƟon, directly contact Lender and aƩempt to negoƟate for the execuƟon and delivery of a Non-Disturbance Agreement.
30.4 Self-ExecuƟng. The agreements contained in this Paragraph 30 shall be effecƟve without the execuƟon of any further documents; provided, however, that, upon wriƩen request from Lessor or a Lender in connecƟon with a sale, financing or refinancing of the Premises, Lessee and Lessor shall execute such further wriƟngs as may be reasonably required to separately document any subordinaƟon, aƩornment and/or Non-Disturbance Agreement provided for herein.
31. AƩorneys' Fees. If any Party or Broker brings an acƟon or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereaŌer defined) in any such proceeding, acƟon, or appeal thereon, shall be enƟtled to reasonable aƩorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such acƟon or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitaƟon, a Party or Broker who substanƟally obtains or defeats the relief sought, asthe case may be, whether by compromise, seƩlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The aƩorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all aƩorneys' feesreasonably incurred. In addiƟon, Lessor shall be enƟtled to aƩorneys' fees, costs and expenses incurred in the preparaƟon and service of noƟces of Default and consultaƟons in connecƟon therewith, whether or not a legal acƟon is subsequently commenced in connecƟon with such Default or resulƟng Breach ($200 is a reasonable minimum per occurrence forsuch services and consultaƟon).
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agentsshall have the right to enter the Premises at any Ɵme, in the case of an emergency, and otherwise at reasonable Ɵmes aŌer reasonable prior noƟce for the purpose ofshowing the same to prospecƟve purchasers, lenders, or tenants, and making such alteraƟons, repairs, improvements or addiƟons to the Premises as Lessor may deem necessary or desirable and the erecƟng, using and maintaining of uƟliƟes, services, pipes and conduits through the Premises and/or other premises as long as there is no material adverse effect on Lessee's use of the Premises. Allsuch acƟviƟesshall be without abatement of rent or liability to Lessee.
33. AucƟons. Lessee shall not conduct, nor permit to be conducted, any aucƟon upon the Premises without Lessor's prior wriƩen consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an aucƟon.
34. Signs. Lessor may place on the Premises ordinary "For Sale" signs at any Ɵme and ordinary "For Lease" signs during the last 6 months of the term hereof. Lessor may not place any sign on the exterior of the Building that covers any of the windows of the Premises. Except for ordinary "For Sublease" signs which may be placed only on the Premises, Lessee shall not place any sign upon the Project without Lessor's prior wriƩen consent. Allsigns must comply with all Applicable Requirements.
35. TerminaƟon; Merger. Unlessspecifically stated otherwise in wriƟng by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual terminaƟon or cancellaƟon hereof, or a terminaƟon hereof by Lessor for Breach by Lessee, shall automaƟcally terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to conƟnue any one or all exisƟng subtenancies. Lessor'sfailure within 10 days following any such event to elect to the contrary by wriƩen noƟce to the holder of any such lesser interest, shall consƟtute Lessor's elecƟon to have such event consƟtute the terminaƟon ofsuch interest.
36. Consents. All requestsfor consent shall be in wriƟng. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs and expenses (including but not limited to architects', aƩorneys', engineers' and other consultants' fees) incurred in the consideraƟon of, or response to, a request by Lessee for any Lessor consent, including but not limited to consentsto an assignment, a subleƫng or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporƟng documentaƟon therefor. Lessor's consent to any act, assignment or subleƫng shall not consƟtute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then exisƟng Default or Breach, except as may be otherwise specifically stated in wriƟng by Lessor at the Ɵme of such consent. The failure to specify herein any parƟcular condiƟon to Lessor's consent shall not preclude the imposiƟon by Lessor at the Ɵme of consent of such further or other condiƟons as are then reasonable with reference to the parƟcular maƩer for which consent is being given. In the event that either Party disagrees with any determinaƟon made by the other hereunder and reasonably requests the reasons for such determinaƟon, the determining party shall furnish its reasons in wriƟng and in reasonable detail within 10 business daysfollowing such request.
37. Guarantor.
37.1 ExecuƟon. The Guarantors, if any, shall each execute a guaranty in the form most recently published BY AIR CRE.
37.2 Default. It shall consƟtute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide: (a) evidence of the execuƟon of the guaranty, including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and in the case of a corporate Guarantor, a cerƟfied copy of a resoluƟon of its board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel CerƟficate, or (d) wriƩen confirmaƟon that the guaranty is sƟll in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, condiƟons and provisions on Lessee's part to be observed and performed under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof.
39. OpƟons. If Lessee is granted any opƟon, as defined below, then the following provisions shall apply.
39.1 DefiniƟon. "OpƟon" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend or reduce the term of or renew any lease
that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the Premises or other property of Lessor; (c) the right to purchase, the right of first offer to purchase or the right of first refusal to purchase the Premises or other property of Lessor.
39.2 OpƟons Personal To Original Lessee. Any OpƟon granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee cerƟfying that Lessee has no intenƟon of thereaŌer assigning or subleƫng.
39.3 MulƟple OpƟons. In the event that Lessee has any mulƟple OpƟonsto extend or renew this Lease, a later OpƟon cannot be exercised unless the prior OpƟons have been validly exercised.
39.4 Effect of Default on OpƟons.
(a) Lessee shall have no right to exercise an OpƟon: (i) during the period commencing with the giving of any noƟce of Default and conƟnuing unƟlsaid Default is cured, (ii) during the period of Ɵme any Rent is unpaid (without regard to whether noƟce thereof is given Lessee), (iii) during the Ɵme Lessee is in Breach of this Lease, or(iv) in the event that Lessee has been given 3 or more noƟces of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the OpƟon.
(b) The period of Ɵme within which an OpƟon may be exercised shall not be extended or enlarged by reason of Lessee's inability to exercise an OpƟon because of the provisions of Paragraph 39.4(a).
(c) An OpƟon shall terminate and be of no further force or effect, notwithstanding Lessee's due and Ɵmely exercise of the OpƟon, if, aŌer such exercise and prior to the commencement of the extended term or compleƟon of the purchase, (i) Lessee failsto pay Rent for a period of 30 days aŌersuch Rent becomes due (without any necessity of Lessor to give noƟce thereof), or (ii) if Lessee commits a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other security measures, and that Lessor shall have no obligaƟon whatsoever to provide same. Lessee assumes all responsibility for the protecƟon of the Premises, Lessee, its agents and invitees and their property from the acts of third parƟes. In the event, however, that Lessor should elect to provide security services, then the cost thereof shall be an OperaƟng Expense.
41. ReservaƟons.
(a) Lessor reservesthe right: (i) to grant, without the consent or joinder of Lessee,such easements, rights and dedicaƟons that Lessor deems necessary, (ii) to cause the recordaƟon of parcel maps and restricƟons, (iii) to create and/or install new uƟlity raceways,so long as such easements, rights, dedicaƟons, maps, restricƟons, and uƟlity raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessor may also: change the name, address or Ɵtle of the Building or Project upon at least 90 days prior wriƩen noƟce; provide and install, at Lessee's expense, Building standard graphics on the door of the Premises and such porƟons of the Common Areas as Lessor shall reasonably deem appropriate; grant to any lessee the exclusive right to conduct any business aslong assuch exclusive right does not conflict with any rights expressly given herein; and to place such signs, noƟces or displays as Lessor reasonably deems necessary or advisable upon the roof, exterior of the Building or the Project or on signs in the Common Areas. Lessee agreesto sign any documentsreasonably requested by Lessor to effectuate such rights. The obstrucƟon of Lessee's view, air, or light by any structure erected in the vicinity of the Building, whether by Lessor or third parƟes, shall in no way affect this Lease or impose any liability upon Lessor.
(b) Lessor also reservesthe right to move Lessee to other space of comparable size in the Building or Project. Lessor must provide at least 45 days prior wriƩen noƟce ofsuch move, and the new space must contain improvements of comparable quality to those contained within the Premises. Lessor shall pay the reasonable out of pocket costs that Lessee incurs with regard to such relocaƟon, including the expenses of moving and necessary staƟonary revision costs. In no event, however, shall Lessor be required to pay an amount in excess of two months Base Rent. Lessee may not be relocated more than once during the term of this Lease.
(c) Lessee shall not: (i) use a representaƟon (photographic or otherwise) of the Building or Project or their name(s) in connecƟon with Lessee's business; or (ii) suffer or permit anyone, except in emergency, to go upon the roof of the Building.
42. Performance Under Protest. If at any Ɵme 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 obligaƟon to pay the money is asserted shall have the right to make payment "under protest" and such paymentshall not be regarded as a voluntary payment and there shall survive the right on the part of said Party to insƟtute suit for recovery ofsuch sum. If it shall be adjudged that there was no legal obligaƟon on the part of said Party to pay such sum or any part thereof, said Party shall be enƟtled to recover such sum or so much thereof asit was not legally required to pay. A Party who does not iniƟate suit for the recovery of sums paid "under protest" within 6 months shall be deemed to have waived itsright to protest such payment.
43. Authority; MulƟple ParƟes; ExecuƟon.
(a) If either Party hereto is a corporaƟon, trust, limited liability company, partnership, or similar enƟty, each individual execuƟng this Lease on behalf of such enƟty represents and warrantsthat he or she is duly authorized to execute and deliver this Lease on its behalf. Each Party shall, within 30 days aŌer request, deliver to the other Party saƟsfactory evidence of such authority. (b) If this Lease is executed by more than one person or enƟty as "Lessee", each such person or enƟty shall be jointly and severally liable hereunder. It is agreed that any one of the named Lessees shall be empowered to execute any amendment to this Lease, or other document ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same asif all of the named Lessees had executed such document. (c) This Lease may be executed by the ParƟesin counterparts, each of which shall be deemed an original and all of which togethershall consƟtute one and the same instrument.
44. Conflict. Any conflict between the printed provisions of this Lease and the typewriƩen or handwriƩen provisionsshall be controlled by the typewriƩen or handwriƩen provisions.
45. Offer. PreparaƟon of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offerto lease to the other Party. This Lease is not intended to be binding unƟl executed and delivered by all ParƟes hereto.
46. Amendments. This Lease may be modified only in wriƟng, signed by the ParƟesin interest at the Ɵme of the modificaƟon. Aslong asthey do not materially change Lessee's obligaƟons hereunder, Lessee agreesto make such reasonable non-monetary modificaƟonsto this Lease as may be reasonably required by a Lender in connecƟon with the obtaining of normal financing or refinancing of the Premises.
47. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.
48. ArbitraƟon of Disputes. An Addendum requiring the ArbitraƟon of all disputes between the ParƟes and/or Brokers arising out of this Lease is is not aƩached to this Lease.
49. Accessibility; Americans with DisabiliƟes Act.
(a) The Premises:
have not undergone an inspecƟon by a CerƟfied Access Specialist (CASp). Note: A CerƟfied Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construcƟon-related accessibility standards under state law. Although state law does not require a CASp inspecƟon of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspecƟon of the subject premises for the occupancy or potenƟal occupancy of the lessee or tenant, if requested by the lessee or tenant. The parƟesshall mutually agree on the arrangementsfor the Ɵme and manner of the CASp inspecƟon, the payment of the fee for the CASp inspecƟon, and the cost of making any repairs necessary to correct violaƟons of construcƟon-related accessibility standards within the premises. have undergone an inspecƟon by a CerƟfied Access Specialist (CASp) and it was determined that the Premises met all applicable construcƟon-related accessibility standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledges that it received a copy of the inspecƟon report at least 48 hours prior to execuƟng this Lease and agrees to keep such report confidenƟal.
have undergone an inspecƟon by a CerƟfied Access Specialist (CASp) and it was determined that the Premises did not meet all applicable construcƟon-related accessibility standards pursuant to California Civil Code §55.51 et seq. Lessee acknowledgesthat it received a copy of the inspecƟon report at least 48 hours prior to execuƟng this Lease and agreesto keep such report confidenƟal except as necessary to complete repairs and correcƟons of violaƟons of construcƟon related accessibility standards.
In the event that the Premises have been issued an inspecƟon report by a CASp the Lessor shall provide a copy of the disability accessinspecƟon cerƟficate to Lessee within 7 days of the execuƟon of this Lease.
(b) Since compliance with the Americans with DisabiliƟes Act (ADA) and otherstate and local accessibility statutes are dependent upon Lessee'sspecific use of the Premises, Lessor makes no warranty or representaƟon as to whether or not the Premises comply with ADA or any similar legislaƟon. In the event that Lessee's use of the Premisesrequires modificaƟons or addiƟons to the Premisesin order to be in compliance with ADA or other accessibility statutes, Lessee agrees to make any such necessary modificaƟons and/or addiƟons at Lessee's expense.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW 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 LESSOR AND LESSEE WITH RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF
THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE LOCATED.
The parƟes hereto have executed this Lease at the place and on the dates specified above their respecƟve signatures.
Executed at: 24031 El Toro Road, Suite 100, Laguna Hills, CA 92654
On:
By LESSOR:
The City of Laguna Hills, a municipal corporaƟon organized and exisƟng under the laws of the State of California
By:
Name Printed: Jarad Hildenbrand
Title: City Manager
Phone:
Fax:
Email:
By:
Name Printed:
Title:
Phone:
Executed at:
On:
By LESSEE:
Layla Fijany, DDS MS Corp
By:
Name Printed: Dr. Layla Fijany
Title: Individual
Phone:
Fax:
Email:
By:
Name Printed:
Title:
Phone:
Fax:
Email:
Fax:
Email:
Address:
Federal ID No.:
Address:
Federal ID No.:
BROKER
Essex Realty Management, Inc.
AƩn: Heather Stark
Title: Senior Associate
Address: 17744 Sky Park Circle, Suite 100, Irvine CA 92614 Phone: 949-798-8100
Fax:
Email: [email protected]
Federal ID No.:
Broker/AGENT DRE License #: 02081393
BROKER
Roam Commercial Realty
AƩn: Neil O'Connor
Title:
Address:
Phone:
Fax:
Email:
Federal ID No.:
Broker/AGENT DRE License #:
AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email [email protected] NOTICE: No part ofthese works may be reproduced in any form without permission in wriƟng.
DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP
(As required by the Civil Code)
When you enter into a discussion with a real estate agent regarding a real estate transacƟon, you should from the outset understand what type of agency relaƟonship or representaƟon you wish to have with the agent in the transacƟon.
SELLER'S AGENT
A Seller's agent under a lisƟng agreement with the Seller acts as the agent for the Seller only. A Seller's agent or a subagent of that agent has the following affirmaƟve obligaƟons:
To the Seller: A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Seller.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance of the agent's duƟes. (b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the parƟes.
An agent is not obligated to reveal to either party any confidenƟal informaƟon obtained from the other party that does not involve the affirmaƟve duƟesset forth above.
BUYER'S AGENT
A Buyer's agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situaƟons, the agent is not the Seller's agent, even if by agreement the agent may receive compensaƟon forservices rendered, either in full or in part from the Seller. An agent acƟng only for a Buyer has the following affirmaƟve obligaƟons:
To the Buyer: A fiduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Buyer.
To the Buyer and the Seller:
(a) Diligent exercise of reasonable skill and care in performance of the agent's duƟes. (b) A duty of honest and fair dealing and good faith.
(c) A duty to disclose all facts known to the agent materially affecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟon of, the parƟes.
An agent is not obligated to reveal to either party any confidenƟal informaƟon obtained from the other party that does not involve the affirmaƟve duƟesset forth above.
AGENT REPRESENTING BOTH SELLER AND BUYER
A real estate agent, either acƟng directly or through one or more salesperson and broker associates, can legally be the agent of both the Seller and the Buyer in a transacƟon, but only with the knowledge and consent of both the Seller and the Buyer.
In a dual agency situaƟon, the agent hasthe following affirmaƟve obligaƟonsto both the Seller and the Buyer:
(a) A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings with either the Seller or the Buyer. (b) Other duƟes to the Seller and the Buyer as stated above in their respecƟve secƟons.
In represenƟng both Seller and Buyer, a dual agent may not, without the express permission of the respecƟve party, disclose to the other party confidenƟal informaƟon, including, but not limited to, facts relaƟng to either the Buyer’s or Seller’s financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, including the Seller’s willingness to accept a price less than the lisƟng price or the Buyer’s willingness to pay a price greater than the price offered.
SELLER AND BUYER RESPONSIBILITIES
Either the purchase agreement or a separate document will contain a confirmaƟon of which agent is represenƟng you and whether that agent isrepresenƟng you exclusively in the transacƟon or acƟng as a dual agent. Please pay aƩenƟon to that confirmaƟon to make sure it accurately reflects your understanding of your agent’s role. The above duƟes of the agent in a real estate transacƟon do not relieve a Seller or Buyer from the responsibility to protect his or her own interests. You should carefully read all agreements to assure that they adequately express your understanding of the transacƟon. A real estate agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. If you are a Buyer, you have the duty to exercise reasonable care to protect yourself, including as to those facts about the property which are known to you or within your diligent aƩenƟon and observaƟon. Both Sellers and Buyers should strongly consider obtaining tax advice from a competent professional because the federal and state tax consequences of a transacƟon can be complex and subject to change.
Throughout your real property transacƟon you may receive more than one disclosure form, depending upon the number of agents assisƟng in the transacƟon. The law requires each agent with whom you have more than a casual relaƟonship to present you with this disclosure form. You should read its contents each Ɵme it is presented to you, considering the relaƟonship between you and the real estate agent in your specific transacƟon. This disclosure form includesthe provisions of SecƟons 2079.13 to 2079.24, inclusive, of the Civil Code set forth on page 2. Read it carefully. I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS DISCLOSURE AND THE PORTIONS OF THE CIVIL CODE PRINTED ON THE BACK (OR A SEPARATE PAGE).
Buyer Seller Lessor Lessee Date:
Buyer Seller Lessor Lessee Date:
Agent: Essex Realty Management DRE Lic. #: 00965485
Real Estate Broker (Firm)
By: Heather Stark DRE Lic. #: 02153034 Date:
(Salesperson or Broker-Associate)
THIS FORM HAS BEEN PREPARED BY AIR CRE. NO REPRESENTATION IS MADE AS TO THE LEGAL VALIDITY OR ADEQUACY OF THIS FORM FOR ANY SPECIFIC TRANSACTION. PLEASE SEEK LEGAL COUNSEL AS TO THE APPROPRIATENESS OF THIS FORM.
DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIP
CIVIL CODE SECTIONS 2079.13 THROUGH 2079.24 (2079.16 APPEARS ON THE FRONT) 2079.13. As used in SecƟons 2079.7 and 2079.14 to 2079.24, inclusive, the following terms have the following meanings:
(a) “Agent” means a person acƟng under provisions of Title 9 (commencing with SecƟon 2295) in a real property transacƟon, and includes a person who is licensed as a real estate broker under Chapter 3 (commencing with SecƟon 10130) of Part 1 of Division 4 of the Business and Professions Code, and under whose license a lisƟng is executed or an offer to purchase is obtained. The agent in the real property transacƟon bears responsibility for that agent’s salespersons or broker associates who perform as agents of the agent. When a salesperson or broker associate owes a duty to any principal, or to any buyer or seller who is not a principal, in a real property transacƟon, that duty is equivalent to the duty owed to that party by the broker for whom the salesperson or broker associate funcƟons. (b) “Buyer” means a transferee in a real property transacƟon, and includes a person who executes an offer to purchase real property from a seller through an agent, or who seeks the services of an agent in more than a casual, transitory, or preliminary manner, with the object of entering into a real property transacƟon. “Buyer” includes vendee or lessee of real property. (c) “Commercial real property” means all real property in the state, except (1) single-family residenƟal real property, (2) dwelling units made subject to Chapter 2 (commencing with SecƟon 1940) of Title 5, (3) a mobilehome, as defined in SecƟon 798.3, (4) vacant land, or(5) a recreaƟonal vehicle, as defined in SecƟon 799.29. (d) “Dual agent” means an agent acƟng, either directly or through a salesperson or broker associate, as agent for both the seller and the buyer in a real property transacƟon. (e) “LisƟng agreement” means a wriƩen contract between a seller of real property and an agent, by which the agent has been authorized to sell the real property or to find or obtain a buyer, including rendering other servicesfor which a real estate license isrequired to the seller pursuant to the terms of the agreement. (f) “Seller’s agent” means a person who has obtained a lisƟng of real property to act as an agent for compensaƟon. (g) “LisƟng price” is the amount expressed in dollars specified in the lisƟng for which the seller is willing to sell the real property through the seller’s agent. (h) “Offering price” is the amount expressed in dollars specified in an offer to purchase for which the buyer is willing to buy the real property. (i) “Offer to purchase” means a wriƩen contract executed by a buyer acƟng through a buyer’s agent that becomes the contract for the sale of the real property upon acceptance by the seller. (j) “Real property” means any estate specified by subdivision (1) or (2) of SecƟon 761 in property, and includes (1) single-family residenƟal property, (2) mulƟunit residenƟal property with more than four dwelling units, (3) commercial real property, (4) vacant land, (5) a ground lease coupled with improvements, or (6) a manufactured home as defined in SecƟon 18007 of the Health and Safety Code, or a mobilehome as defined in SecƟon 18008 of the Health and Safety Code, when offered for sale or sold through an agent pursuant to the authority contained in SecƟon 10131.6 of the Business and Professions Code. (k) “Real property transacƟon” means a transacƟon for the sale of real property in which an agent is retained by a buyer, seller, or both a buyer and seller to act in that transacƟon, and includes a lisƟng or an offer to purchase. (l) “Sell,” “sale,” or “sold” refersto a transacƟon for the transfer of real property from the seller to the buyer and includes exchanges of real property between the seller and buyer, transacƟons for the creaƟon of a real property sales contract within the meaning of SecƟon 2985, and transacƟons for the creaƟon of a leasehold exceeding one year’s duraƟon. (m) “Seller” means the transferor in a real property transacƟon and includes an owner who lists real property with an agent, whether or not a transfer results, or who receives an offer to purchase real property of which he or she is the owner from an agent on behalf of another. “Seller” includes both a vendor and a lessor of real property. (n) “Buyer’s agent” means an agent who represents a buyer in a real property transacƟon. 2079.14. A seller’s agent and buyer’s agent shall provide the seller and buyer in a real property transacƟon with a copy of the disclosure form specified in SecƟon 2079.16, and shall obtain a signed acknowledgment of receipt from that seller and buyer, except as provided in SecƟon 2079.15, as follows: (a) The seller’s agent, if any, shall provide the disclosure form to the seller prior to entering into the lisƟng agreement. (b) The buyer’s agent shall provide the disclosure form to the buyer as soon as pracƟcable prior to execuƟon of the buyer’s offer to purchase. If the offer to purchase is not prepared by the buyer’s agent, the buyer’s agent shall present the disclosure form to the buyer not later than the next business day aŌer receiving the offer to purchase from the buyer. 2079.15. In any circumstance in which the seller or buyer refuses to sign an acknowledgment of receipt pursuant to SecƟon 2079.14, the agent shall set forth, sign, and date a wriƩen declaraƟon of the facts of the refusal. 2079.16 Reproduced on Page 1 of this AD form.
2079.17(a) As soon as pracƟcable, the buyer’s agent shall disclose to the buyer and seller whether the agent is acƟng in the real property transacƟon as the buyer’s agent, or as a dual agent represenƟng both the buyer and the seller. This relaƟonship shall be confirmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller, the buyer, and the buyer’s agent prior to or coincident with execuƟon of that contract by the buyer and the seller, respecƟvely. (b) As soon as pracƟcable, the seller’s agent shall disclose to the seller whether the seller’s agent is acƟng in the real property transacƟon as the seller’s agent, or as a dual agent represenƟng both the buyer and seller. This relaƟonship shall be confirmed in the contract to purchase and sell real property or in a separate wriƟng executed or acknowledged by the seller and the seller’s agent prior to or coincident with the execuƟon of that contract by the seller. (C) CONFIRMATION: The following agency relaƟonships are confirmed for thistransacƟon.
Seller’s Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one): the seller; or both the buyer and seller. (dual agent) Seller’s Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one): the Seller’s Agent. (salesperson or broker associate); or both the Buyer’s Agent and the Seller’s Agent. (dual agent) Buyer’s Brokerage Firm DO NOT COMPLETE, SAMPLE ONLY License Number Is the broker of (check one): the buyer; or both the buyer and seller. (dual agent) Buyer’s Agent DO NOT COMPLETE, SAMPLE ONLY License Number Is (check one): the Buyer’s Agent. (salesperson or broker associate); or both the Buyer’s Agent and the Seller’s Agent. (dual agent) (d) The disclosures and confirmaƟon required by thissecƟon shall be in addiƟon to the disclosure required by SecƟon 2079.14. An agent’s duty to provide disclosure and confirmaƟon of representaƟon in thissecƟon may be performed by a real estate salesperson or broker associate affiliated with that broker. 2079.18 (Repealed pursuant to AB-1289, 2017-18 California LegislaƟve session) 2079.19 The payment of compensaƟon or the obligaƟon to pay compensaƟon to an agent by the seller or buyer is not necessarily determinaƟve of a parƟcular agency relaƟonship between an agent and the seller or buyer. A lisƟng agent and a selling agent may agree to share any compensaƟon or commission paid, or any right to any compensaƟon or commission for which an obligaƟon arises as the result of a real estate transacƟon, and the terms of any such agreement shall not necessarily be determinaƟve of a parƟcular relaƟonship.
2079.20 Nothing in this arƟcle prevents an agent from selecƟng, as a condiƟon of the agent’s employment, a specific form of agency relaƟonship not specifically
prohibited by this arƟcle if the requirements of SecƟon 2079.14 and SecƟon 2079.17 are complied with. 2079.21 (a) A dual agent may not, without the express permission of the seller, disclose to the buyer any confidenƟal informaƟon obtained from the seller. (b) A dual agent may not, without the express permission of the buyer, disclose to the seller any confidenƟal informaƟon obtained from the buyer. (c) “ConfidenƟal informaƟon” meansfacts relaƟng to the client’s financial posiƟon, moƟvaƟons, bargaining posiƟon, or other personal informaƟon that may impact price, such as the seller is willing to accept a price lessthan the lisƟng price or the buyer is willing to pay a price greater than the price offered. (d) ThissecƟon does not alter in any way the duty or responsibility of a dual agent to any principal with respect to confidenƟal informaƟon other than price. 2079.22 Nothing in this arƟcle precludes a seller’s agent from also being a buyer’s agent. If a seller or buyer in a transacƟon chooses to not be represented by an agent, that does not, of itself, make that agent a dual agent. 2079.23 (a) A contract between the principal and agent may be modified or altered to change the agency relaƟonship at any Ɵme before the performance of the act which is the object of the agency with the wriƩen consent of the parƟes to the agency relaƟonship. (b) A lender or an aucƟon company retained by a lender to control aspects of a transacƟon of real property subject to this part, including validaƟng the sales price, shall not require, as a condiƟon of receiving the lender’s approval of the transacƟon, the homeowner or lisƟng agent to defend or indemnify the lender or aucƟon company from any liability alleged to result from the acƟons of the lender or aucƟon company. Any clause, provision, covenant, or agreement purporƟng to impose an obligaƟon to defend or indemnify a lender or an aucƟon company in violaƟon of thissubdivision is against public policy, void, and unenforceable. 2079.24 Nothing in this arƟcle shall be construed to either diminish the duty of disclosure owed buyers and sellers by agents and their associate licensees,subagents, and employees or to relieve agents and their associate licensees, subagents, and employeesfrom liability for their conduct in connecƟon with acts governed by this arƟcle or for any breach of a fiduciary duty or a duty of disclosure.
AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777, Email [email protected] NOTICE: No part ofthese works may be reproduced in any form without permission in wriƟng.
GUARANTY OF LEASE
WHEREAS Layla Fijany, DDS MS Corp ("Lessee") desiresto lease from The City of Laguna Hills, a municipal corporaƟon organized and exisƟng under the laws of the State of California ("Lessor") the premises commonly known as(street address, city, state, zip) 24031 El Toro Road, Suite 205 Laguna Hills, CA 92654 ("Premises") pursuant to a lease dated for reference purposes only as of July 1, 2024 ("Lease").
WHEREAS, as a material inducement to and in consideraƟon of Lessor execuƟng the Lease, Lessor requires Layla Fijany, DDS MS Corp ("Guarantor") to execute this Guaranty of Lease ("Guaranty"); Guarantor desires Lessee to consummate the Lease. Accordingly, contemporaneous with execuƟon of the Lease, Guarantor is execuƟng this Guaranty to induce Lessor to execute the Lease with Lessee.
NOW THEREFORE, Guarantor hereby uncondiƟonally and irrevocably guarantees and promises to perform and be liable for any and all obligaƟons and liabiliƟes of Lessee under the Lease, including, but not limited to, payment of all rents and all other sums payable by Lessee under the Lease and performance by Lessee of each and every one of the terms, condiƟons and covenants to be kept and performed by Lessee under the Lease.
Guarantor hereby agreesthat, without the consent of, or noƟce to, Guarantor and without affecƟng or in any way releasing Guarantor's obligaƟons under this Guaranty: (i) Lessor and Lessee may, by agreement or course of conduct, amend, extend, renew or otherwise alter any term, covenant or condiƟon of the Lease, or the Lease may be assigned by Lessor or Lessee (and their successors and assigns) and this Guaranty shall guarantee all obligaƟons of Lessee under the Lease as so amended, extended, renewed, altered or assigned; (ii) Lessor may release, change or add a party to the Lease and/or a guarantor of the Lease; (iii) Lessor may exercise, not exercise, delay exercising, impair, modify, limit, terminate or suspend any of Lessor's rights or remedies under the Lease or this Guaranty; and (iv) Lessor may permit all or any part of the Premises to be subleased, or the Lease to be assigned, assumed, transferred, mortgaged or encumbered.
Guarantor hereby agreesthat no noƟce of nonperformance or default by Lessee or by another guarantor need be given to Guarantor. This Guaranty is a conƟnuing and irrevocable guarantee. Guarantor waives the benefit of any law allowing Guarantor to revoke this Guaranty. No provision of this Guaranty or rights of Lessor hereunder may be waived, nor may any Guarantor be released from any obligaƟon under this Guaranty except by a wriƟng duly executed by Lessor.
Guarantor hereby waives and agrees not to assert or take advantage of any right or defense based on: (i) noƟce of acceptance of this Guaranty; (ii) demands (including demands for payment or performance), presentaƟon and protest; (iii) any statute of limitaƟons; (iv) requiring Lessor to proceed against Lessee, any Guarantor or other guarantor or any other person (as herein defined) liable to Lessor, or to proceed against these persons in any order; (v) requiring Lessor to apply any security deposit or othersecurity; (vi) requiring Lessor to proceed under any other remedy Lessor may have before proceeding against Guarantor; (vii) any right of subrogaƟon that Guarantor may have against Lessee or other guarantors; (viii) any right or defense that may arise by reason of the incapacity, lack of authority, death or disability of Lessee, any guarantor or any other person; (ix) any right or defense arising by reason of the absence, impairment, modificaƟon, limitaƟon, destrucƟon or cessaƟon (in bankruptcy, by an elecƟon of remedies, or otherwise) of the liability of Lessee, of the subrogaƟon rights of Guarantor, or of the rights of Guarantor to proceed against Lessee for reimbursement; (x) limiƟng Guarantor's obligaƟons to not exceed Lessee's obligaƟons; and (xi) noƟces(including noƟces of adverse change in the financial status of Lessee or other facts that increase the risk to Guarantor).
The obligaƟons of Guarantor under this Guaranty shall not be altered, limited or affected by any proceeding, voluntary or involuntary, involving the bankruptcy, insolvency, receivership, reorganizaƟon or liquidaƟon of Lessee, Guarantor, any other guarantor, or by any defense that Lessee, Guarantor or any other guarantor may have by reason of any order, decree, or decision of any court or administraƟve body resulƟng from any such proceeding.
Guarantorsubordinates any and all exisƟng or future indebtedness of Lessee to Guarantor to Lessee's obligaƟons owed to Lessor under the Lease. Any recovery by Lessor from any other guarantor or insurer shall first be credited to the porƟon of Lessee'sindebtedness to Lessor which exceeds the maximum liability of Guarantor under this Guaranty. If a person comprising Guarantor is married, such Guarantor expressly agrees that recourse may be had againstsuch Guarantor's separate or community property.
Guarantorshall, upon ten (10) days' prior wriƩen noƟce from Lessor, provide Lessor with Guarantor's financial statements for the current year and tax returns for the three (3) preceding years and, if such isthe normal pracƟce of Guarantor, such statementsshall be prepared in accordance with generally accepted accounƟng principles and audited by an independent cerƟfied public accountant. Lessor shall maintain Guarantor's financial statements and tax returns in confidence butshall be permiƩed to disclose Guarantor's financial statements and tax returns to prospecƟve lenders, purchasers or othersfor a bona fide business purpose.
Guarantorshall, upon ten (10) days' prior wriƩen noƟce from Lessor, in wriƟng reaffirm that this Guaranty remains and conƟnuesin full force and effect, that no event has occurred that would invalidate the Guaranty or excuse Guarantor's obligaƟons or performance under the Guaranty, and that the Guaranty appliesto the Lease, as amended, extended, renewed, altered or assigned. Guarantor shall, upon ten (10) days' prior wriƩen noƟce from Lessor, execute such other and further documents and do such further acts as may be reasonably necessary or required by Lessor to effectuate the intent of the parƟes and carry out the terms of this Guaranty.
Guarantor agrees that any suit, acƟon or proceeding arising directly or indirectly from the Guaranty or the Lease shall be liƟgated only in courts located within the county and state in which the Premises is located. Guarantor irrevocably consents to the jurisdicƟon of any local,state or federal court located within the county and state in which the Premises is located, and waives and agrees not to assert by way of moƟon, defense or otherwise in any suit, acƟon, or proceeding any claim that Guarantor is not personally subject to the jurisdicƟon of the above-named courts, that such suit, acƟon, or proceeding is brought in an inconvenient forum, or that the venue of such acƟon, suit, or proceeding is improper.
Each person which comprises Guarantor consents to service of process by a naƟonally recognized overnight courier service (such as Federal Express) at either the Premises or at the Guarantor's address for noƟces set forth below, and shall be deemed served and received three (3) business days aŌer deposit with the overnight mail service. Guarantor irrevocably waives and agrees not to plead or claim in any acƟon or proceeding thatsuch service of process was in any way invalid or ineffecƟve. Lessor reserves the right to serve processin any other manner permiƩed by law.
This Guaranty shall be governed by the laws of the state in which the Premises is located and, for purposes of conflicts of law, Guarantor shall be treated asif resident of or domiciled in such state. Guarantor waives the right to a jury trial of any cause of acƟon, claim, counterclaim or cross-complaint in any acƟon, proceeding or other hearing brought against Guarantor. If and to the extent the Lease requires Lessor and Lessee to arbitrate any disputes, then Guarantor also agrees to arbitrate such disputes in the same arbitraƟon to the extent related to the Guaranty and upon the same terms and condiƟons provided in the Lease.
If Lessor brings an acƟon or proceeding against Guarantor to enforce this Guaranty, the Prevailing Party (as hereaŌer defined) in any such proceeding, acƟon, or appeal thereon, shall be enƟtled to reasonable aƩorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such acƟon or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitaƟon, the party who substanƟally obtains or defeats the reliefsought, asthe case may be, whether by compromise, seƩlement, judgment, or the abandonment by the other party of its claim or defense. The aƩorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such asto fully reimburse all aƩorneys' feesreasonably incurred.
This Guaranty consƟtutes the enƟre agreement between Guarantor and Lessor with respect to the subject maƩer of this Guaranty and supersedes all prior agreements, understandings, negoƟaƟons, representaƟons and discussions, whether verbal or wriƩen, of the parƟes, pertaining to such subject maƩer. Guarantor is not relying on any representaƟons, warranƟes or inducements from Lessor that are not expressly stated in this Guaranty.
If any provision of this Guaranty is determined to be illegal or unenforceable, all other provisions hereof shall nevertheless be effecƟve. The waiver or failure to enforce any provision of this Guaranty shall not operate as a waiver of any other breach ofsuch provision or any other provisions of this Guaranty, nor shall any single or parƟal exercise of any right, power or privilege preclude any other or further such exercise or the exercise of any other right, power or privilege. Time is strictly of the essence under this Guaranty and any amendment, modificaƟon or revision of this Guaranty.
Each person execuƟng this Guaranty represents and warrants to Lessor that (i) each individual execuƟng this Guaranty has the legal power, right, and actual authority to bind Guarantor; (ii) Guarantor has the legal right, power and authority to enter into and perform this Guaranty; (iii) all requisite acƟon by or on behalf of a corporaƟon, limited liability company, partnership (general or limited), trust or other legal enƟty ("enƟty") has been taken for this Guaranty to be duly authorized by such enƟty or Guarantor; (vi) no consent of any partner, shareholder, member, creditor, investor, government, judicial or administraƟve body or other party isrequired in connecƟon with Guarantor execuƟng this Guaranty; (v) this Guaranty is a valid and legally binding obligaƟon of Guarantor; (vi) the execuƟon and delivery of this Guaranty does not conflict with or result in the material breach of any terms, condiƟons or provisions of, or consƟtute a default under, any bond, note, or other evidence of indebtedness or any contract, indenture, mortgage, deed of trust, loan, partnership agreement or other agreements or instruments to which Guarantor is a party or by which Guarantor is bound; and (vi) Guarantor will derive a substanƟal and material economic benefit from Lessor's execuƟon of the Lease. If Guarantor is an enƟty, Guarantor shall, concurrently with the execuƟon of this Guaranty (or upon ten (10) days' prior wriƩen noƟce from Lessor), deliver to Lessor a cerƟfied copy of a resoluƟon or other documentaƟon evidencing that such enƟty is authorized or raƟfiesthe enƟty's execuƟon of this Guaranty.
The term "person" as used in this Guaranty shall include an individual and/or an enƟty. If more than one (1) person comprises Guarantor, the obligaƟons ofsuch persons shall be joint and several. The unenforceability of this Guaranty or Lessor's elecƟon not to enforce this Guaranty against one (1) or more persons shall not affect the obligaƟons of the remaining persons which comprise Guarantor or the enforceability of this Guaranty againstsuch remaining persons.
Any noƟce, request, demand, instrucƟon or other communicaƟon to be given to Guarantor under this Guaranty shall be in wriƟng and shall be delivered at either the Premises or the address set forth beneath the Guarantor's signature below, or to such other place as Guarantor may from Ɵme to Ɵme in wriƟng designate by at least fiŌeen (15) days' noƟce to Lessor.
When the context and construcƟon so requires, all words used in the singular in this Guaranty shall be deemed to have been used in the plural. The term "Lessee" as used in this Guaranty shall mean the Lessee named in the Lease, any assignee of Lessee'sinterest under the Lease and their respecƟve successors and assigns. The term "Lessor" as used in this Guaranty shall mean the Lessor named in the Lease, any assignee of Lessor, whether by outright assignment, assignment for security or otherwise. Lessor may without Guarantor's consent assign this Guaranty, voluntarily or by operaƟon of law. This Guaranty appliesto, inures to the benefit of, and binds all persons that comprise Guarantor, their heirs, devisees, legatees, executors, administrators, representaƟves, successors and assigns.
Signatures to this Guaranty accomplished by means of electronic signature or similar technology shall be legal and binding. This Guaranty may be executed in counterparts.
Guarantor is advised to seek advice of legal counsel before signing this Guaranty. Guarantor acknowledges that AIR CRE, the real estate brokers or their agents or employees have not made any representaƟon or statement as to the legal sufficiency or effect or tax consequences of this Guaranty or the Lease.
GUARANTOR
Layla Fijany, DDS MS Corp
Executed At:
On:
By:
Name Printed: Dr. Layla Fijany
Title:
Address:
Email Address:
By:
Name Printed:
Title:
Address:
Email Address:
AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part ofthese works may be reproduced in any form without permission in wriƟng.
EXHIBITS TO LEASE
Exhibit "A":
1 EXHIBIT B
RULES AND REGULATIONS
ATTACHED TO AND MADE A PART OF STANDARD OFFICE LEASE
The following Rules and Regulations shall be in effect at the Office Building Project.
Lessor reserves the right to adopt reasonable modifications and additions hereto. In the case of any conflict between these Rules and Regulations and the Lease, the Lease shall be controlling.
1. Except with the prior written consent of Lessor, no Lessee shall conduct any retail sales or any manufacturing of any kind in or from the Premises, or any business other than that specifically provided for in the Lease.
2. Lessor reserves the right to prohibit personal goods and services vendors from access to the Office Building Project except upon such reasonable terms and conditions, including but not limited to the payment of a reasonable fee and provision for insurance coverage, as are related to the safety, care and cleanliness of the Office Building Project, the preservation of good order thereon, and the relief of any financial or other burden on Lessor occasioned by the presence of such vendors or the sale by them of personal goods or services to the Lessee or its employees. If reasonably necessary for the accomplishment of these purposes, Lessor may exclude a particular vendor entirely or limit the number of vendors who may be present at any one time in the Office Building Project. The term “personal goods or services vendors” means persons who periodically enter the Office Building Project of which the Premises are a part for the purpose of selling goods or services to a Lessee, other than goods or services, which are used by a lessee only for the purpose of conducting its business on the Premises. “Personal goods or services” include, but are not limited to, drinking water and other beverages, food, barbering services, and shoe shining services. This Section 2 shall not apply to Lessee’s vendors and suppliers in connection with Lessee’s operation of its business.
3. The sidewalks, halls, passages, elevators and stairways shall not be obstructed by any Lessee or used by it for any purpose other than for ingress to and egress from their respective Premises. The halls, passages, entrances, elevators, stairways, balconies and roof are not for the use of the general public, and Lessor shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Lessor shall be prejudicial to the safety, character, reputation and interests of the Office Building Project and its lessees, provided that nothing herein contained shall be construed to prevent such access to persons with whom Lessee normally deals only for the purpose of conducting its business on the Premises (such as clients, customers, office suppliers and equipment vendors, and the like) unless such persons are engaged in illegal activities. No Lessee and no employees of any Lessee shall go upon the roof of the Building without the written consent of Lessor. This Section 3 shall not apply to Lessee’s vendor’s suppliers in connection with Lessee’s operation of its business.
2 4. The sashes, sash doors, windows, glass lights, and any lights or skylights that reflect or admit light into the halls or other places of the Building shall not be covered or obstructed. The toilet rooms, water and wash closets and other water apparatus shall not be used for any purpose other than that or which they were constructed, and no foreign substance of any kind whatsoever shall be thrown therein, and the expense of any breakage, stoppage or damage, resulting from the violation of this rule shall be borne by the Lessee who, or whose clerks, agents, employees, or visitors, shall have caused it.
5. No sign, advertisement or notice visible from the exterior of the Premises or Building shall be inscribed, painted or affixed by Lessee on any part of the Office Building Project or the Premises without the prior written consent of Lessor. If Lessor shall have given such consent at any time, whether before or after the execution of this Lease, such consent shall in no way operate as a waiver or release of any of the provisions hereof or of this Lease, and shall be deemed to relate only to the particular sign, advertisement or notice so consented to by Lessor and shall not be construed as dispensing with the necessity or obtaining the specific written consent of Lessor with respect to each and every such sign, advertisement or notice, as the case may be, so consented to by Lessor. Lessor shall have the right to remove any non-approved sign, advertisement or notice, without notice to and at the expense of Lessee, and Lessor shall not be liable in damages for such removal.
6. In order to maintain the outward professional appearance of the Office Building Project all window coverings to be installed at the Premises shall be subject to Lessor’s prior approval. If Lessor, by a notice in writing to Lessee, shall object to any curtain, blind, shade or screen attached to or hung in, or used in connection with, any window door of the Premises, such use of such curtain, blind, shade or screen shall be forthwith discontinued by Lessee. No awnings shall be permitted on any part of the Premises.
7. Lessee shall not lay linoleum, tile, carpet or other similar floor covering so that the same shall be affixed to the floor of the Premises in any manner except as approved by Lessor.
8. Lessee shall not do or permit anything to be done in the Premises, or bring or keep anything therein, which shall in any way increase the rate of fire insurance on the Office Building Project, or on the property kept therein, or obstruct or interfere with the rights of other Lessees, or in any way injure or annoy them, or conflict with the regulations of the Fire Department or the fire laws, or with any insurance policy upon the Office Building Project, or any part thereof, or with any rules and ordinances established by the Board of Health or other governmental authority.
9. No Lessee shall sweep or throw or permit to be swept or thrown from the
3 Premises any dirt or other substance into any of the corridors or halls or elevators, or out of the doors or windows or stairways of the Building. Lessee shall not use, keep or permit to be used any foul or noxious gas or substance in the Premises, or permit or suffer the Premises to be occupied or used in a manner offensive or objectionable to Lessor or other occupants of the Office Building Project by reason of noise, odors, fire hazards and/or vibrations, or interfere in any way with other Lessees or those having business therein, nor shall any animals or birds be kept in or about the Office Building Project.
10. Lessee and its employees, agents and invitees shall not smoke any tobacco products or any other smoking materials whatsoever in the Premises, Building, common areas or any other area of the Project except in such areas, if any, as shall be designated by Lessor for smoking, in Lessor’s sole and absolute discretion.
11. No cooking shall be done or permitted by Lessee on the Premises, except for the use of a microwave oven for food or Underwriter’s Laboratory approved equipment for brewing coffee, tea, and similar beverages shall be permitted, provided that such use is in compliance with law. Offices in the Office Building Project shall not be used for the storage of merchandise or for sleeping or lodging.
12. Lessee, upon the termination of its tenancy, shall deliver to Lessor all the keys of offices, rooms and toilet rooms which shall have been furnished Lessee or which Lessee shall have had made, and in the event of loss of any keys so furnished, shall pay Lessor therefore.
13. On Saturdays after 6:00pm., Sundays and legal holidays, and on other days between the hours of 9:00 p.m. and 7:00 a.m., access to the Office Building Project or to the halls, corridors, elevators or stairways in the Building, or to the Premises may be refused unless the person seeking access is known to the building watchman, if any, in charge and has a pass or is properly identified. Lessor shall in no case be liable for damages for the admission to or exclusion from the Office Building Project of any person whom Lessor has the right to exclude under Rule 3 above. In case of invasion, mob, riot, public excitement, or other commotion, Lessor reserves the right but shall not be obligated to prevent access to the Office Building Project during the continuance of the same by closing the doors or otherwise, for the safety of the tenants and protection of property in the Office Building Project.
14. Lessee shall see that the windows and doors of the Premises are closed and securely locked before leaving the building and Lessee shall exercise extraordinary care and caution that all water faucets or water apparatus are entirely shut off before Lessee or Lessee’s employees leave the Building, and that all electricity, gas or air shall likewise be carefully shut off, so as to prevent waste or damage, and for any default or carelessness Lessee shall make good all injuries sustained by other Lessees or occupants of the Building or Lessor.
15. Lessee shall not alter any lock or install a new or additional lock or any bolt
4 on any door of the Premises without prior written consent of Lessor. If Lessor shall give its consent, Lessee shall in each case furnish Lessor with a key for any such lock.
16. Lessee shall not install equipment such as, but not limited to, electronic tabulating or computer equipment requiring electrical or air conditioning service in excess of those to be provided by Lessor under the Lease and any such equipment shall be placed in the Premises in settings approved by Lessor to adsorb or prevent any vibration, noise or annoyance.
17. No bicycle, or shopping cart, or other vehicle or any animal shall be brought into the Premises or the halls, corridors, elevators or any part of the Building by Lessee.
18. Lessor shall have the right to prohibit the use of the name of the Office Building Project or any other publicity by Lessee which in Landlord’s opinion tends to impair the reputation of the Office Building Project, or their desirability for other Lessees, and upon written notice from Lessor, Lessee will refrain from or discontinue such publicity.
19. Lessee shall not erect any aerial or antenna on the roof or exterior walls of the Premises, the Building, or the Office Building Project.
20. Lessee shall not overload the floor of the Premises. In addition, Lessee shall not mark, drive nails, screw or drill into partitions, ceilings or floor of the Premises or deface the Premises.
21. No furniture, freight or equipment of any kind shall be brought into the Building or the Building’s elevator without the consent of Lessor and all moving of the same into or out of the Building shall be done at such time and in such manner, as Lessor shall designate. Lessor shall have the right to prescribe the weight, size and position of all safes and other heavy equipment brought into the Building and also the times and manner of moving the same in and out of the Office Building Project. Safes or other heavy objects shall, if considered necessary by Lessor, stand on wood strips of such thickness as is necessary to properly distribute the weight. However, Lessor’s consent to placement of Lessee’s safes, heavy equipment or furniture shall not constitute a representation or warranty by Lessor that the safe, heavy equipment or furniture complies, with regard to distribution of weight and/or vibration, with the provisions of the Rule 21 nor relieve Lessee from responsibility for the consequences of noncompliance. Lessor will not be responsible for loss of or damage to any safe or property from any cause and all damage done to the Building by moving or maintaining any such safe or property from any cause and all damage done to the Building by moving or maintaining any such safe or other property shall be repaired at the expense of Lessee.
There shall not be used in any space, or in the public halls of the Building, either by any Lessee or others, any hand trucks except those equipped with rubber tires and side guards.
5 22. Except with the written consent of Lessor, no person or persons other than those approved by Lessor shall be permitted to enter the Building for their purpose of cleaning the same. Lessee shall not cause any unnecessary labor by reason of Lessee’s carelessness or indifference in the preservation of good order and cleanliness. Lessor shall in no way be responsible to any Lessee for any loss of property on the Premises, however occurring, or for any damage done to the effects of any lessee by the janitor or any other employee or any other person. Janitor service shall include ordinary dusting and cleaning by the janitor assigned to such work and shall not include cleaning of carpets or rugs, except normal vacuuming, or moving of furniture and other special services. Janitor service may not be furnished on nights when rooms are occupied after 9:00p.m.
23. Lessor will direct electricians as to where and how telephone and telegraph wires are to be introduced. No boring or cutting for wires will be allowed without the consent of Lessor. The location of telephones, call boxes and other office equipment affixed to the Premises shall be subject to the approval of Lessor.
24. No furniture, packages, supplies, equipment or merchandise will be received in the Building or carried up or down in the elevators, except between such hours and in such elevators as shall be designated by Lessor.
25. Lessor reserves the right to exclude or expel from the Office Building Project any person who in the judgment of Lessor, is intoxicated or under the influence of liquor or illegal, non-prescription drugs, or who shall in any manner do any act in violation of any of the Rules and Regulations of the Office Building Project.
26. The requirements of Lessee will be attended to only upon application to Lessor. Contractors, vendors and employees of Lessor shall not perform any work or do anything outside of their regular duties unless under special instructions from the Lessor or Lessor’s agent.
27. No vending machine shall be installed, maintained or operated upon the Premises without the written consent of the Lessor.
28. Lessor shall have the right, exercisable without notice and without liability to Lessee, to change the name and the street address of the Building and/or Office Building Project of which the Premises are a part.
29. Lessee agrees that it shall comply with all fire and security regulations that may be issued from time-to-time by Lessor and Lessee also shall provide Lessor with the name of a designated responsible employee to represent Lessee in all matters pertaining to such fire or security regulations.
30. Lessor reserves the right by written notice to Lessee, to rescind, alter or
6 waive any rule or regulation at any time prescribed for the Office Building Project when, in Lessor’s judgment, it is necessary, desirable or proper for the best interest of the Office Building Project and its lessees.
31. Lessees shall not disturb, solicit, or canvas any occupant of the Office Building Project and shall cooperate to prevent same.
32. Lessor shall furnish heating and air conditioning during the hours of 7:00 a.m. to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 12:00 p.m. on Saturday except for holidays. In the event Lessee requires heating and air conditioning during off hours, Sundays or Holidays, Lessor shall on notice provide such services at the then prevailing rate for such extra services.
33. Lessee shall cooperate with Lessor in obtaining maximum effectiveness of the cooling system by closing blinds when the sun’s rays fall directly on windows of the premises. Lessee shall not obstruct, alter, or in any way impair the efficient operation of Lessor’s heating, ventilating and air-conditioning system. Lessee shall not tamper with or change the setting of any thermostats or control valves.
34. Parking
(a) The parking lot shall be accessible twenty-four (24) hours per day, subject to parking card or other reasonable Identification or security restriction as may be reasonably established by Lessor from time-to-time. Lessee agrees to cooperate with Lessor in completing regular maintenance of the parking lot.
(b) Automobiles must be parked entirely within the stall lines. (c) All directional signs and arrows must be observed and the speed limit shall be 5 miles per hour.
(d) Parking is prohibited in areas not striped for parking. (e) Lessor may refuse to permit any person who violates the within rules to park in the parking lot, and any violation of the rules shall subject the automobile to removal from the parking lot at the parker’s expense.
(f) Every parker is required to park and lock his or her own automobile. All responsibility for any loss or damage to automobile or any personal property therein is assumed by the parker.
7 (g) The parking lot is for the sole purpose of parking one automobile per space. Washing, waxing, cleaning or servicing of any vehicles by the parker or his agents is prohibited.
(h) Storage of vehicles in the parking facilities is prohibited. Lessee and Lessee’s employees and visitors shall not leave vehicles in the parking lot overnight.
(I ) Lessor reserves the right to restrict customer, Lessee and Lessee’s employees parking to a limited designated area or areas.
35. Lessee agrees to comply and acquaint its employees with such reasonable rules and regulations in the use of such Common areas as Lessor may adopt from time to time for the orderly and proper operation of said Common Areas.
Lessor reserves the right to make such other and further rules and regulations as in its judgment may be for the safety, care and cleanliness of the Office Building Project and for the preservation of good order therein. Lessee agrees to abide by these Rules and Regulations herein above stated and any additional rules and regulations, which are adopted hereafter.
Date: ___________________ Date: __________________
Lessor’s Initials: __________________ Lessee’s Initials: __________________
1 EXHIBIT "D"
WORK LETTER/REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY LESSEE If Lessor shall permit Lessee to construct any interior improvements (subsequent to the initial improvements to be constructed by Lessor, if any) in the Premises or to have any work performed in the Premises at any time prior to or during the Lease term by a contractor retained by Lessee (“Lessee’s Work”), then Lessee shall comply with the requirements set forth herein. If Lessee’s Work has been properly authorized, Lessee will receive written approval and consent for alterations to the Premises. All alterations to the Premises, excepting movable furniture and trade fixtures, shall, at Lessor’s option, become a part of the realty and belong to Lessor.
1. SUBMITTAL OF PLANS. Prior to commencing any work in the Premises, Lessee shall submit to Lessor for approval its proposed plans for the work. Without limiting the foregoing, Lessee shall provide:
(a) A separate scale drawing denoting all proposed construction and/or demolition, if necessary.
(b) A separate drawing for each trade proposing structural, electrical, mechanical, civil or landscaping modifications.
(c) Specify all dimensions and complete references to all work to be performed in the affected areas.
(d) If adding extra electrical or mechanical equipment, provide complete operating and maintenance specifications for each item.
2. CHECKLIST. With respect to each project, Lessor will provide Lessee with a checklist listing the items required to be furnished to Lessor in connection with the proposed work. Lessee shall furnish to Lessor prior to, during, or upon completion of Lessee’s Work, as applicable, each of the items specified in the checklist attached hereto as Attachment 1.
3. CONTRACTORS PROVIDING INTERIOR IMPROVEMENT SERVICES. (a) The contractor employed by Lessee and any subcontractors shall be (i) duly licensed in the state in which the Premises are located, and (ii) subject to Lessor’s prior written approval, which approval shall not be unreasonably withheld. If more than one trade is employed on a single job, state law requires the services of a general contractor in addition to contractors for specialty work being performed. (b) Each contractor shall provide proof of licensing as a general or specialty contractor in accordance with state law. Additionally, each contractor shall furnish proof of licensing in the city or municipality in which the construction related activity is to take place. (c) Lessee shall use Lessor’s subcontractor for mechanical, electrical, plumbing, roofing and roofing consultant if available at competitive rates. (d) Lessee and Lessee’s contractors shall comply with all Applicable Laws pertaining to the performance of Lessee’s Work and the completed improvements and all applicable safety regulations established by Lessor or the general contractor.
(e) Prior to commencement of any work in the Premises, Lessee and Lessee’s contractors (and any subcontractors) shall obtain and provide Lessor with certificates evidencing Workers’ Compensation, public liability and property damage insurance in amounts and forms and with companies
2 satisfactory to Lessor. Each general contractor (and any subcontractor) employed on the Premises shall provide Lessor with a current certificate of insurance in effect for that contractor with a thirty day notice of cancellation or revocation clause. Insurance requirements are as follows:
(i) Comprehensive General Liability with a $1,000,000 Combined Single Limit covering the liability of Lessor and contractor for bodily injury and property damage arising as a result of the construction of the improvements and the services performed thereunder. Lessor and any Management Company shall be named as an additional insured. (ii) Comprehensive Automobile Liability with a $1,000,000 Combined Single Limit covering Lessor and vehicles used by contractor (and any subcontractor) in connection with the construction of the improvements.
(iii) Workers’ Compensation and Employer’s Liability as required by law, for employees of the contractor (and any subcontractors) performing work on the Premises.
(f) The following requirements shall be incorporated as “Special Conditions” into the contract between Lessee and its contractors and a copy of the contract shall be furnished to Lessor prior to the commencement of Lessee’s Work:
(i) Prior to start of Lessee’s Work, Lessee’s contractor shall provide Lessor with a construction schedule in “bar graph” form indicating the completion dates of all phases of Lessee’s Work.
(ii) Lessee’s contractor shall be responsible for the repair, replacement or clean-up of any damage done by it to other contractors’ work which specifically includes accessways to the Premises which may be concurrently used by others.
(iii) Lessee’s contractor shall accept the Premises prior to starting any trenching operations. Any rework of sub-base or compaction required after the contractor’s initial acceptance of the Premises shall be done by Lessee’s contractor, which shall include the removal from the Project of any excess dirt or debris.
(iv) Lessee’s contractor shall contain its storage of materials and its operations within the Premises and such other space as it may be assigned by Lessor or Lessor’s contractor. Should Lessee’s contractor be assigned space outside the Premises, it shall move to such other space as Lessor or Lessor’s contractor shall direct from time to time to avoid interference or delays with other work.
(v) Lessee’s contractor shall clean up the construction area and surrounding exterior areas daily. All trash, demolition materials and surplus construction materials shall be stored within the Premises and promptly removed from the Premises and the Project and disposed of in an approved sanitation site.
(vi) Lessee’s contractor shall provide temporary utilities, portable toilet facilities, and potable drinking water as required for its work within the Premises and shall pay to Lessor’s contractor the cost of any temporary utilities and facilities provided by Lessor’s contractor at Lessee’s
3 contractor’s request.
(vii) Lessee’s contractor shall notify Lessor or Lessor’s project manager of any planned work to be done on weekends or other than normal job hours.
(viii) Lessee’s contractor or subcontractors shall not post signs on any part of the Project or on the Premises.
4. COSTS.
(a) Lessee shall promptly pay any and all costs and expenses in connection with or arising out of the performance of Lessee’s Work (including the costs of permits thereof) and shall furnish to Lessor evidence of such payment upon request.
(b) Except in the case of carpet replacement or repainting, Lessee shall pay Lessor an amount equal to five percent (5%) of the total hard costs of construction and installation of Lessee’s Work as compensation to Lessor for review of plans, use of facilities and other miscellaneous costs of Lessor incurred as a result of such work.
5. CONTRACTOR’S BONDS. At Lessor's sole discretion, Lessor may require Lessee to obtain performance and completion bonds to insure Interior Work
6. MECHANIC’S LIENS.
(a) Lessee shall not suffer or permit to be enforced against the Premises or any part of the Project any mechanic’s, materialman’s, contractor’s or subcontractor’s lien arising out of any work of improvement, however it may arise.
(b) Lessee shall notify Lessor at least ten (10) days prior to the commencement of construction of any Lessee’s Work and Lessor shall have the right to post and record a notice of no responsibility in conformity with applicable law. Within ten (10) days following completion of Lessee’s Work, Lessee shall file a Notice of Completion and deliver to Lessor an unconditional release and waiver of lien executed by each contractor, subcontractor and materialman involved in Lessee’s Work. (c) In the event any lien is filed against the Project or any portion thereof or against Lessee’s leasehold interest therein as a result of Lessee’s work, Lessee shall obtain the release and/or discharge of said lien, within ten (10) days after the filing thereof. In the event Lessee fails to do so, Lessor may obtain the release and/or discharge of said lien and Lessee shall indemnify Lessor for the costs thereof, including reasonable attorney’s fees, together with interest at the Applicable Interest Rate from the date of demand. Nothing herein shall prohibit Lessee from contesting the validity of any such asserted claim, provided Lessee has furnished to Lessor a lien release bond freeing the Premises from the effect of the lien claim.
7. INDEMNITY. Lessee shall indemnify, defend (with counsel satisfactory to Lessor) and hold Lessor harmless from and against any and all suits, claims, actions, loss, cost or expense (including claims for workers’ compensation, attorney’s fees and costs) based on personal injury or property damage, or otherwise (including, without limitation, contract and breach of warranty claims) arising from the performance of Lessee’s Work. Lessee shall repair or replace (or, at Lessor’s election, reimburse Lessor for the cost of repairing or replacing) any portion of the Building or item of Lessor’s equipment or any of Lessor’s real or personal property damaged, lost or destroyed in the performance of Lessee’s Work.
8. BUILDING STANDARDS. All work shall conform to Lessor’s established building standards and specifications. Lessee is required to make these standards part of the construction documents.
4 9. ROOF PENETRATIONS. If improvements penetrate the roof membrane, the penetrations will be sealed per Lessor/IRC roofing specifications and inspected by IRC to maintain roof warranty. The cost of inspection and all corrective work shall be borne by Lessee. Lessee shall use Lessor’s original roofing contractor.
10. BUILDING MODIFICATIONS. Work will only be approved within the confines of a given space. Lessee will not be allowed to modify building exterior or mechanical and electrical service as provided to the building in common with other tenants.
11. ELECTRICAL WORK. All electrical work shall be approved from the unit space electrical panel only. Additional service requirements shall be secured only by direction of Lessor. Lessee shall use Lessor’s original electrical contractor if available at competitive rates.
12. SCHEDULE OF WORK. Lessee shall be required to provide a schedule of all work to be performed, subject to Lessor approval. All costs to produce such schedule shall be borne solely by Lessee.
13. CLEAN UP AND DISPOSAL OF CONSTRUCTION DEBRIS. Building trash containers are provided for office generated trash only and are not to be used for disposal of construction-related materials and debris. Unapproved usage will result in a penalty assessment to the Lessee equal to the cost of an extra pick-up service as provided under the current rate schedule of regular trash removal service.
14. INSPECTION BY LANDLORD. Lessor reserves the following rights: (i) the right of inspection prior to, during and at completion of all construction and/or demolition, (ii) the right to post and record a notice of nonresponsibility in conformity with California law, and (iii) the right to order, if reasonable, a total stop to all improvements underway for non-compliance with any of the requirements hereof.
15. GENERAL PROVISIONS.
(a) If Lessor has agreed to provide an allowance toward the cost of tenant improvements (other than the initial Lessee Improvement Allowance), Lessor shall retain from such funds an amount determined by Lessor until Lessee has fully complied with the requirements hereof. (b) All materials, work, installations and decorations of any nature whatsoever brought on or installed in the Premises before the commencement of the Term or throughout the Term shall be at Lessee’s risk, and neither Lessor nor any party acting on Lessor’s behalf shall be responsible for any damage thereto or loss or destruction thereof due to any reason or cause whatsoever. (c) Nothing contained herein shall make or constitute Lessee as the agent of Lessor.
1 Attachment 1 to “Exhibit D”
ITEMS TO BE FURNISHED TO LESSOR FOR EACH WORK OF IMPROVEMENT
1. Plan of Alterations for Lessor Approval.
2. Contractor(s), Address, Telephone Number, Contact Person.
3. Copy of Contractor’s State and City Business License.
4. Copy of Building Permit.
5. Copy of Final Inspection and Signed Building Permit Cards.
6. Copy of Certificate of Insurance Naming The City of Laguna Hills and Essex Realty Management as Additional Insured. Insurance to include Comprehensive General Liability, Comprehensive Auto, Workers’ Compensation, Employer’s Liability and original Endorsement.
7. Signed Unconditional Lien Waiver in favor of Development Corporation.
8. Schedule of Work.
9. Copy of Completion and Payment Bond.
10. Architect’s License and Expiration.
11. Copy of Permit Plans.
12. Copy of As-Builts.
13. Copy of Recorded Notice of Completion.
14. Certificate of Occupancy.
15. Evidence of Insurance for All-Risk/Builder’s Risk Insurance to the Amount of Improvements.
Item No. 4.7
City of Laguna Hills
City Council / Planning Agency
Staff Report
Date: July 9, 2024
To: Mayor and Council Members
From: Jarad Hildenbrand, City Manager
Issue: Agreement with Procure America for Cost Reduction Consulting Services Recommendation: That the City Council approve entering into a Consultant Services Agreement with Procure America for Cost Reduction Services and authorize the City Manager to execute the Agreement on behalf of the City
Background:
Procure America provides government agencies with business intelligent services to identify cost savings in indirect expense categories such as utilities (gas and electric), print management (copier lease and maintenance), telecommunications (voice, data, mobile), treasury and technology optimization. Procure America achieves savings for agencies by having their teams of subject matter experts review and analyze the billing rates and contracts for services in these expense categories. Through this process, these teams identify opportunities for savings or alternative arrangements for services.
Procure America has provided these services to many public agencies in California including the cities of Fullerton, Santa Ana, Tustin, Irvine, as well as the County of Orange, Orange County Transportation Authority, and Orange County Fire Authority.
Fiscal Impact:
There is no net financial impact associated with executing the agreement.
The City will pay Procure America fees at a percentage rate of 30% of cost savings/ refunds actualized, per audit review for 60 consecutive months. In the instance where no cost savings or refunds are obtained, then Procure America will receive no
Item No. 4.7
compensation for services rendered. This item is being brought to the City Council for approval in the instance the fees for service surpass the City Manager’s signing authority of $50,000.
Attachments:
1. Proposed Consulting Services Agreement with Procure America
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1 CONSULTING SERVICES AGREEMENT
ProcureAmerica, LLC
Cost Reduction Consulting Services
THIS CONSULTING SERVICES AGREEMENT (hereinafter “Agreement”) is made and entered into, to be effective this 9th day of July 2024, by and between the CITY OF LAGUNA HILLS, a municipal corporation organized and existing under the laws of the State of California (hereinafter referred to as “City”), and PROCUREAMERICA, a California Limited Liability Company (hereinafter referred to as “Consultant”). City and Consultant are sometimes hereinafter individually referred to as “Party” and are hereinafter collectively referred to as the “Parties.”
RECITALS
A. City has determined that there is a need to retain the services of a qualified firm that specializes in providing cost recovery and reduction consulting services to public agencies (the “Project”).
B. Consultant has submitted to City a proposal and statement of work to provide cost reduction consulting services for the Project pursuant to the terms of this Agreement.
C. Consultant represents and maintains that it is uniquely qualified by virtue of its experience, training, education, reputation, and expertise to provide the requested cost reduction consulting services to City for the Project and has agreed to provide such services as provided herein. City does not have the personnel, experience, specialized training, qualifications, or technical expertise able to perform the work and services contracted for herein.
D. City desires to retain Consultant to provide such consulting services to City for the Project.
NOW, THEREFORE, in consideration of the promises and mutual obligations, covenants, and conditions contained herein, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. SERVICES OF CONSULTANT
1.1 Scope of Services and Standard of Performance. In compliance with all terms and conditions of this Agreement, Consultant agrees to provide and perform the cost reduction consulting services for the Project as described and as set forth in Consultant’s Proposal/Statement of Work, which is attached hereto as Exhibit “A” and is incorporated herein by reference (hereinafter referred to as the “Scope of Services,” the “Services” or “Work”). As a material inducement to the City entering into this Agreement, Consultant acknowledges and understands that the Services and Work contracted for under this Agreement require specialized skills and abilities and that, consistent with this understanding, Consultant’s Services and Work shall be performed in a skillful and competent manner and shall be held to a standard of quality
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2 and workmanship prevalent in the industry for such Services and Work and with the standards recognized as being employed by consultants in the same discipline in the State of California.
Consultant represents and warrants that it is skilled in the discipline necessary to perform the Services and Work and that it holds the necessary skills and abilities to satisfy the standard of work as set forth in this Agreement. Consultant represents and warrants that it and all of its employees, subconsultants and subcontractors providing any Work or Services under this Agreement shall have sufficient skill and experience to perform the Work or Services assigned to them. All Services and Work shall be completed to the reasonable satisfaction of the City.
1.2 Contract Documents. The Agreement between the Parties shall consist of the following: (1) this Agreement; and, (2) the Consultant’s Proposal / Statement of Work submitted to the City (“Consultant’s Proposal”), which shall both be referred to collectively hereinafter as the “Contract Documents.” The Consultant’s Proposal, attached hereto as Exhibit “A,” is hereby incorporated by reference and is made a part of this Agreement. All provisions of the Contract Documents shall be binding on the Parties. Should any conflict or inconsistency exist in the Contract Documents, the conflict or inconsistency shall be resolved by applying the provisions in the highest priority document, which shall be determined in the following order of priority: (1st) the terms and conditions of this Agreement; and, (2nd) the provisions of the Consultant’s Proposal.
1.3 Compliance with Law. Consultant shall comply at all times during the term of this Agreement with all applicable federal, state, and local laws, statutes, and ordinances and all lawful orders, rules, and regulations promulgated thereunder, including without limitation all applicable fair labor standards and Cal/OSHA requirements. Consultant shall keep itself fully informed of and in compliance with all local, state, and federal laws, rules, and regulations in any manner affecting the performance of the Work and Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with performing the Work and Services. If Consultant performs any Work or Services in violation of such laws, rules, and regulations, Consultant shall be solely responsible for all penalties and costs arising therefrom. Consultant shall defend, indemnify, and hold City, its officials, officers, employees, agents and volunteers, free and harmless from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules, or regulations.
1.4 Licenses, Permits, Fees, and Assessments. Prior to performing any Services or Work hereunder Consultant shall obtain all licenses, permits, qualifications, and approvals of whatever nature that are legally required to practice its profession and perform the Work and Services required by this Agreement. Consultant represents and warrants to City that Consultant shall, at its sole cost and expense, keep in effect at all times during the term of this Agreement and any extension, any license, permit, qualification, or approval that is legally required for Consultant to perform the Work and Services under this Agreement. Consultant shall have the sole obligation to pay for any fees, assessments, and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Consultant's performance of the Work and Services required by this Agreement, and shall defend, indemnify, and hold the City, its officials, officers, employees, agents and volunteers, free and harmless from and against
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3 any claim or liability arising out of any failure or alleged failure to obtain such license, permits, and approvals of whatever nature that are legally required to perform the Work or Services.
1.5 Familiarity with Work. By executing this Agreement, Consultant represents and warrants that it (a) has thoroughly investigated and considered the Scope of Work or Services to be performed, (b) has carefully considered how the Services should be performed and has carefully examined the location or locations at or with respect to where such Services or Work is to be performed, and (c) fully understands the facilities, difficulties, and restrictions attending performance of the Services under this Agreement.
1.6 Care of Work. Consultant shall adopt reasonable methods during the term of the Agreement to furnish continuous protection to the Work and the equipment, materials, papers, documents, plans, studies, and/or other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the Work by the City, except such losses or damages as may be caused by City's own negligence.
1.7 Further Responsibilities of Parties. Both Parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both Parties agree to act in good faith to execute all instruments, prepare all documents, and take all actions as may be reasonably necessary to carry out the purposes of this Agreement.
1.8 Additional Services. City shall have the right at any time during the performance of the Services, without invalidating this Agreement, to order extra work beyond that specified in Consultant's Proposal/Scope of Work (Exhibit “A”) or make changes by altering, adding to, or deducting from such Work. No such extra work may be undertaken unless a written order is first given by the City to the Consultant, incorporating therein any adjustment in (i) the Maximum Contract Amount, as defined below, and/or (ii) the time to perform this Agreement, which adjustments are subject to the written approval of the Consultant. It is expressly understood by Consultant that the provisions of this section shall not apply to the Work and Services specifically set forth in the Scope of Services or reasonably contemplated therein, regardless of whether the time or materials required to complete any Work or Service identified in the Scope of Services exceeds any time or material amounts or estimates provided therein.
1.9 Non-Exclusive Agreement. Consultant acknowledges that City may enter into agreements with other contractors, consultants, or vendors for services similar to the services that are the subject of this Agreement. Consultant further acknowledges that City may have its own employees perform services similar to the services that are the subject of this Agreement.
2. COMPENSATION
2.1 Maximum Contract Amount. For the Services and Work rendered pursuant to this Agreement, Consultant shall be compensated by City for the services performed, including authorized reimbursements, in accordance with the rates and charges set forth in the Schedule of Compensation/Fees, which is attached hereto as Exhibit “A” and is incorporated herein by reference, but not exceeding a percentage rate of 30% of cost savings/refunds actualized, per audit review for 60 consecutive months; and in the instance where no cost savings or refunds are
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4 obtained, then Consultant will receive no compensation for Services and Work rendered (hereinafter referred to as the "Maximum Contract Amount"). The method of compensation shall be as set forth in Exhibit “A”. Compensation for necessary expenditures for reproduction costs, telephone expenses, and transportation expenses must be approved in advance by the Contract Officer designated pursuant to Section 4.2 and will only be approved if such expenses are also specified in the Schedule of Compensation/Fees. The maximum amount of City’s payment obligation under this Agreement is the amount specified in this section.
2.2. Method of Payment. Unless some other method of payment is specified in the Schedule of Compensation/Fees (Exhibit “A”), in any month in which Consultant wishes to receive payment, no later than the tenth (10th) working day of such month, Consultant shall submit to the City, in a form approved by the City’s Finance Director, an invoice for services rendered prior to the date of the invoice. Such requests shall be based upon the amount and value of the services performed by Consultant and accompanied by such reporting data including an itemized breakdown of all costs incurred and tasks performed during the period covered by the invoice, as may be required by the City. City shall use reasonable efforts to make payments to Consultant within forty-five (45) days after receipt of the invoice or a soon thereafter as is reasonably practical.
2.3 Changes in Scope. In the event any change or changes in the Scope of Services is requested by the City, the Parties shall execute a written amendment to this Agreement, setting forth with particularity all terms of such amendment, including, but not limited to, any additional professional fees. An amendment may be entered into: (a) to provide for revisions or modifications to documents or other work product or work when documents or other work product or work is required by the enactment or revision of law subsequent to the preparation of any documents, other work product, or work; and/or (b) to provide for additional services not included in this Agreement or not customarily furnished in accordance with generally accepted practice in Consultant’s profession.
2.4 Appropriations. This Agreement is subject to and contingent upon funds being appropriated therefore by the Laguna Hills City Council for each fiscal year covered by the Agreement. If such appropriations are not made, this Agreement shall automatically terminate without penalty to the City.
3. SCHEDULE OF PERFORMANCE
3.1 Time of Essence. Time is of the essence in the performance of this Agreement.
The time for completion of the services to be performed by Consultant is an essential condition of this Agreement. Consultant shall prosecute regularly and diligently the Work of this Agreement according to the agreed upon Schedule of Performance.
3.2 Schedule of Performance. Consultant shall commence the Services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all Services within the time period(s) established in the Schedule of Performance, which is attached hereto as Exhibit “A” and is incorporated herein by reference. When requested by Consultant, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the Contract Officer; however, the City shall not be obligated to grant such an extension.
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5 3.3 Force Majeure. The time period(s) specified in the Schedule of Performance for performance of the Services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Consultant (financial inability excepted), including, but not limited to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, pandemics, quarantine restrictions, riots, strikes, freight embargoes, wars, and/or acts of any governmental agency, including the City, if Consultant, within ten (10) days of the commencement of such delay, notifies the City Manager in writing of the causes of the delay. The City Manager shall ascertain the facts and the extent of delay, and extend the time for performing the Services for the period of the enforced delay when and if in the judgment of the City Manager such delay is justified. The City Manager's determination shall be final and conclusive upon the Parties to this Agreement. In no event shall Consultant be entitled to recover damages against the City for any delay in the performance of this Agreement, however caused, Consultant's sole remedy being extension of the Agreement pursuant to this section.
3.4 Term. Unless earlier terminated as provided elsewhere in this Agreement, this Agreement shall commence on July 9, 2024 and shall continue in full force and effect for five (5) years, ending July 9, 2029, unless extended by mutual written agreement of the Parties.
4. COORDINATION OF WORK
4.1 Representative of Consultant. The following principal of Consultant is hereby designated as being the principal and representative of Consultant authorized to act in its behalf with respect to the Services to be performed under this Agreement and make all decisions in connection therewith: Todd Main, Executive Vice President. It is expressly understood that the experience, knowledge, education, capability, expertise, and reputation of the foregoing principal is a substantial inducement for City to enter into this Agreement. Therefore, the foregoing principal shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the Work or Services performed hereunder. The foregoing principal may not be changed by Consultant without prior written approval of the Contract Officer.
4.2 Contract Officer. The Contract Officer shall be such person as may be designated by the City Manager of City, and is subject to change by the City Manager. It shall be the Consultant's responsibility to ensure that the Contract Officer is kept fully informed of the progress of the performance of the Services, and the Consultant shall refer any decisions which must be made by City to the Contract Officer. Unless otherwise specified herein, any approval of City required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority to sign all documents on behalf of the City required hereunder to carry out the terms of this Agreement.
4.3 Prohibition Against Subcontracting or Assignments. The experience, knowledge, capability, expertise, and reputation of Consultant, its principals and employees, were a substantial inducement for City to enter into this Agreement. Therefore, Consultant shall not assign the performance of this Agreement, nor any part thereof, nor any monies due hereunder, voluntarily or by operation of law, without the prior written consent of City.
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6 Consultant shall not contract with any other entity to perform the Services required without prior written consent of City. If Consultant is permitted to subcontract any part of this Agreement by City, Consultant shall be responsible to City for the acts and omissions of its subcontractor(s) in the same manner as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationships between any subcontractor and City. All persons engaged in the Work will be considered employees of Consultant. City will deal directly with and will make all payments to Consultant.
4.4 Independent Contractor.
A. The legal relationship between the Parties is that of an independent contractor, and nothing herein shall be deemed to make Consultant a City employee. During the performance of this Agreement, Consultant and its officers, employees, and agents shall act in an independent capacity and shall not act as City officers or employees. Consultant will determine the means, methods and details of performing the Sevices subject to the requirements of this Agreement. The personnel performing the Services under this Agreement on behalf of Consultant shall at all times be under Consultant’s exclusive direction and control. Neither City nor any of its officials, officers, employees, agents or volunteers shall have control over the conduct of Consultant or any of its officers, employees, or agents, except as set forth in this Agreement. Consultant, its officers, employees or agents, shall not maintain a permanent office or fixed business location at City’s offices. City shall have no voice in the selection, discharge, supervision, or control of Consultant’s officers, employees, representatives or agents or in fixing their number, compensation, or hours of service. Consultant shall pay all wages, salaries, and other amounts due its employees in connection with the performance of Services under this Agreement as required by law and shall be responsible for all reports and obligations respecting them, including but not limited to social security income tax withholding, unemployment compensation, workers’ compensation, and other similar matters. City shall not in any way or for any purpose be deemed to be a partner of Consultant in its business or otherwise a joint venturer or a member of any joint enterprise with Consultant.
B. Consultant shall not incur or have the power to incur any debt, obligation, or liability against City, or bind City in any manner.
C. No City benefits shall be available to Consultant, its officers, employees, or agents, in connection with the performance of any Work or Services under this Agreement.
Except for professional fees paid to Consultant as provided for in this Agreement, City shall not pay salaries, wages, or other compensation to Consultant for the performance of any Work or Services under this Agreement. City shall not be liable for compensation or indemnification to Consultant, its officers, employees, or agents, for injury or sickness arising out of performing any Work or Services hereunder. If for any reason any court or governmental agency determines that the City has financial obligations, other than pursuant to Section 2 and Subsection 1.8 herein, of any nature relating to salary, taxes, or benefits of Consultant’s officers, employees, representatives, agents, or subconsultants or subcontractors, Consultant shall defend, indemnify, and hold harmless City from and against all such financial obligations.
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7 4.5 PERS Eligibility Indemnification.
A. In the event that Consultant or any employee, agent, or subcontractor of Consultant providing any Work or Services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employee Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Consultant or its employees, agents or subcontractors, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of the City.
B. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, Consultant and any of its employees, agents, and subcontractors providing any Work or Services under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by City, including but not limited to eligibility to enroll in PERS as an employee of City and entitlement to any contribution to be paid by City for employer contribution and/or employee contributions for PERS benefits.
5. INSURANCE
5.1 Compliance with Insurance Requirements. Consultant shall obtain, maintain, and keep in full force and effect during the term of this Agreement, at its sole cost and expense, and in a form and content satisfactory to City, all insurance required under this section.
Consultant shall not commence any Work or Services under this Agreement unless and until it has provided evidence satisfactory to City that it has secured all insurance required under this section. If Consultant’s existing insurance policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so.
5.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement, and without limiting the indemnity provisions set forth in this Agreement, Consultant shall obtain and maintain in full force and effect during the term of this Agreement, including any extension thereof, the following policies of insurance:
A. Commercial General Liability Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of Commercial General Liability Insurance written on an occurrence basis with limits of at least one million dollars ($1,000,000.00) per occurrence, two million dollars ($2,000,000.00) in the general aggregate, and one million dollars ($1,000,000.00) for products and completed operations.
Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; or (3) contain any other exclusion contrary to the Agreement.
B. Automobile Liability Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of Automobile Liability
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8 Insurance written on a per occurrence basis with limits of at least one million dollars ($1,000,000.00) combined limit for each occurrence covering bodily injury and property damage. The policy shall specifically include coverage for owned, non-owned, leased, and hired automobiles.
C. Workers’ Compensation Insurance. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of Workers’ Compensation Insurance in at least the minimum statutory amounts, and in compliance with all other statutory requirements, as required by the State of California. Consultant agrees to waive and obtain endorsements from its workers’ compensation insurer waiving all subrogation rights under its workers’ compensation insurance policy against the City, its officials, officers, employees, agents and volunteers, and to require each of its subconsultants and subcontractors, if any, to do likewise under their workers’ compensation insurance policies. Consultant shall obtain and maintain, in full force and effect throughout the term of this Agreement, a policy of Employer’s Liability Insurance written on a per occurrence basis with limits of at least one million dollars ($1,000,000.00) per accident for bodily injury or disease.
5.3 Acceptability of Insurers. Insurance required by this section shall be issued by a licensed company authorized to transact business in the state by the Department of Insurance for the State of California with a current rating of A-:VII or better (if an admitted carrier), or a current rating of A:X or better (if offered by a non-admitted insurer listed on the State of California List of Approved Surplus Lines Insurers (LASLI), by the latest edition of A.M. Best’s Key Rating Guide, except that the City will accept workers’ compensation insurance from the State Compensation Fund. In the event the City determines that the Work or Services to be performed under this Agreement creates an increased or decreased risk of loss to the City, the Consultant agrees that the minimum limits of the insurance policies may be changed accordingly upon receipt of written notice from the City. Consultant shall immediately substitute any insurer whose A.M. Best rating drops below the levels specified herein.
5.4 Insurance Endorsements. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for written approval. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
A. The policy or policies of insurance required by this section for Commercial General Liability and Automobile Liability Insurance shall be endorsed to provide the following:
1. Additional Insured: The City, its officials, officers, employees, agents and volunteers, shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement; and
2. Additional Insured Endorsements: Additional insured endorsements shall not (1) be restricted to “ongoing operations”, (2) exclude “contractual liability”, (3) restrict coverage to “sole” liability of Consultant, or (4) contain any other exclusions contrary to the
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9 Agreement; and, the coverage shall contain no special limitations on the scope of protection afforded to additional insureds.
3. Notice: The policy or policies of insurance required by this section for Commercial General Liability and Automobile Liability Insurance shall be endorsed to state that coverage shall not be suspended, voided, cancelled, or modified, or reduced in coverage or in limits, except after thirty (30) days prior written notice by First Class U.S. Mail, postage-prepaid, has been provided to the City. Notwithstanding the foregoing, if coverage is to be suspended, voided, or cancelled because of Consultant’s failure to pay the insurance premium, the notice provided to City shall be by ten (10) days prior written notice.
B. For all policies of Commercial General Liability Insurance, Consultant shall provide endorsements for ongoing operations and completed operations to effectuate this requirement.
5.5 Deductibles and Self-Insured Retentions. Any deductible or self-insured retention must be approved in writing by the City in advance and shall protect the City, its officials, officers, employees, agents and volunteers, in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or selfinsured retention.
5.6 Primary and Non-Contributing Insurance. All policies of Commercial General Liability Insurance and Automobile Liability Insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the City, its officials, officers, employees, agents or volunteers, shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.
5.7 Waiver of Subrogation. All policies of Commercial General Liability and Automobile Liability Insurance shall contain or be endorsed to waive subrogation against the City, its officials, officers, employees, agents and volunteers, or shall specifically allow Consultant or others providing insurance evidence in compliance with the requirements set forth in this section to waive their right to recovery prior to a loss. Consultant hereby agrees to waive its own right of recovery against the City, its officials, officers, employees, agents and volunteers, and Consultant hereby agrees to require similar written express waivers and insurance clauses from each of its subconsultants or subcontractors.
5.8 Evidence of Coverage. Concurrently with the execution of the Agreement, Consultant shall deliver certificates of insurance together with original endorsements affecting each of the insurance policies required by this section. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for written approval. The certificates of insurance and original endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15) days prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written
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10 notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies. Consultant shall promptly furnish, at City’s request, copies of actual policies including all declaration pages, endorsements, exclusions and any other policy documents City requires to verify coverage.
5.9 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this section are not intended as a limitation on coverage, limits, or other requirements, or a waiver of any coverage normally provided by any insurance. Nothing in this section shall be construed as limiting in any way the indemnification provision contained in this Agreement, or the extent to which Consultant may be held responsible for payments of damages to persons or property.
5.10 Enforcement of Agreement (Non-Estoppel). Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of any noncompliance with any of the insurance requirements set forth in this section imposes no additional obligation on the City nor does it waive any rights hereunder.
5.11 Insurance for Subconsultants. Consultant shall either: (1) include all subconsultants or subcontractors engaged in any Work or Services for Consultant relating to this Agreement as additional named insureds under the Consultant’s insurance policies; or (2) Consultant shall be responsible for causing its subconsultants or subcontractors to procure and maintain the appropriate insurance in compliance with the terms of the insurance requirements set forth in this section, including adding the City, its officials, officers, employees, agents and volunteers, as additional insureds to their respective policies. All policies of Commercial General Liability Insurance provided by Consultant’s subconsultants or subcontractors performing any Work or Services related to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers, as additional insureds. Consultant shall not allow any subconsultant or subcontractor to commence any Work or Services relating to this Agreement unless and until it has provided evidence satisfactory to City that the subconsultant or subcontractor has secured all insurance required under this section.
5.12 Other Insurance Requirements. The following terms and conditions shall apply to the insurance policies required of Consultant pursuant to this Agreement:
A. Consultant shall provide immediate written notice to City if (1) any of the insurance policies required herein are terminated, cancelled or suspended, (2) the limits of any of the insurance coverages required herein are reduced, or (3) the deductible or self-insured retention is increased.
B. All insurance coverage and limits provided by Consultant and available or applicable to this Agreement are intended to apply to each insured, including additional insureds, against whom a claim is made or suit is brought to the full extent of the policies. Nothing contained in this Agreement or any other agreement relating to the City or its operations shall limit the application of such insurance coverage.
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11 C. None of the insurance coverages required herein will be in compliance with the requirements of this section if they include any limiting endorsement which substantially impairs the coverages set forth herein (e.g., elimination of contractual liability or reduction of discovery period), unless the endorsement has first been submitted to the City and approved in writing.
D. Certificates of insurance will not be accepted in lieu of required endorsements, and submittal of certificates without required endorsements may delay commencement of the Project. It is Consultant’s obligation to ensure timely compliance with all insurance submittal requirements as provided herein.
E. Consultant agrees to ensure that subconsultants and subcontractors, if any, and any other parties involved with the Project who are brought onto or involved in the Project by Consultant, provide the same minimum insurance coverage required of Consultant.
Consultant agrees to monitor and review all such coverage and assumes all responsibility for ensuring that such coverage is provided in conformity with the requirements of this section.
Consultant agrees that upon request, all agreements with subcontractors and others engaged in the Project will be submitted to the City for review.
F. Consultant agrees to provide immediate written notice to City of any claim, demand or loss against Consultant arising out of the Work or Services performed under this Agreement and for any other claim, demand or loss which may reduce the insurance available to pay claims, demands or losses arising out of this Agreement.
6. INDEMNIFICATION
To the fullest extent permitted by law, Consultant shall defend (at Consultant’s sole cost and expense with legal counsel reasonably acceptable to City), indemnify, protect, and hold harmless City, its officials, officers, employees, agents and volunteers (collectively the “Indemnified Parties”), from and against any and all liabilities, actions, suits, claims, demands, losses, costs, judgments, arbitration awards, settlements, damages, demands, orders, penalties, and expenses including legal costs and attorney fees (collectively “Claims”), including but not limited to Claims arising from injuries to or death of persons (Consultant’s employees included), for damage to property, including property owned by City, or from any violation of any federal, state, or local law or ordinance, which Claims arise out of, pertain to, or are related to Consultant’s performance under this Agreement. Under no circumstances shall the insurance requirements and limits set forth in this Agreement be construed to limit Consultant’s indemnification obligation or other liability hereunder.
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12 7. REPORTS AND RECORDS
7.1 Accounting Records. Consultant shall keep complete, accurate, and detailed accounts of all time, costs, expenses, and expenditures pertaining in any way to this Agreement.
Consultant shall keep such books and records as shall be necessary to properly perform the Services required by this Agreement and to enable the Contract Officer to evaluate the performance of such Services. The Contract Officer shall have full and free access to such books and records at all reasonable times, including the right to inspect, copy, audit, and make records and transcripts from such records.
7.2 Reports. Consultant shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the Services required by this Agreement as the Contract Officer shall require.
7.3 Ownership of Documents. All drawings, specifications, reports, records, documents, memoranda, correspondence, computations, and other materials prepared by Consultant, its employees, subconsultants, subcontractors, and agents in the performance of this Agreement shall be the property of City and shall be promptly delivered to City upon request of the Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim for further employment or additional compensation as a result of the exercise by City of its full rights of ownership of the documents and materials hereunder.
7.4 Release of Documents. All drawings, specifications, reports, records, documents, and other materials prepared by Consultant in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. All information gained by Consultant in the performance of this Agreement shall be considered confidential and shall not be released by Consultant without City’s prior written authorization.
7.5 Audit and Inspection of Records. After receipt of reasonable notice and during the regular business hours of City, Consultant shall provide City, or other agents of City, such access to Consultant’s books, records, payroll documents, and facilities as City deems necessary to examine, copy, audit, and inspect all accounting books, records, work data, documents, and activities directly related to Consultant’s performance under this Agreement. Consultant shall maintain such books, records, data, and documents in accordance with generally accepted accounting principles and shall clearly identify and make such items readily accessible to such parties during the term of this Agreement and for a period of three (3) years from the date of final payment by City hereunder.
8. ENFORCEMENT OF AGREEMENT
8.1 California Law and Venue. This Agreement shall be construed and interpreted both as to validity and as to performance of the Parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim, or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Orange, State of California, or any other appropriate court in such County, and Consultant covenants and agrees
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13 to submit to the personal jurisdiction of such court in the event of such action.
8.2 Interpretation. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties. The terms of this Agreement are contractual and the result of negotiation between the Parties.
Accordingly, any rule of construction of contracts (including, without limitation, California Civil Code Section 1654) that ambiguities are to be construed against the drafting Party, shall not be employed in the interpretation of this Agreement. The caption headings of the various sections and paragraphs of this Agreement are for convenience and identification purposes only and shall not be deemed to limit, expand, or define the contents of the respective sections or paragraphs.
8.3 Termination. City may terminate this Agreement for any reason, with or without cause, upon giving Consultant thirty (30) days written notice. Upon such notice, City shall pay Consultant for Services performed through the date of termination. Upon receipt of such notice, Consultant shall immediately cease all work under this Agreement, unless the notice provides otherwise. Thereafter, Consultant shall have no further claims against the City under this Agreement. Upon termination of the Agreement pursuant to this section, Consultant shall submit to the City an invoice for work and services performed prior to the date of termination. In addition, Consultant reserves the right to terminate this Agreement at any time upon sixty (60) days written notice to the City, except that where termination is due to material default by the City, the period of notice may be such shorter time as the Consultant may determine.
8.4 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought. Any waiver by the Parties of any default or breach of any covenant, condition, or term contained in this Agreement, shall not be construed to be a waiver of any subsequent or other default or breach, nor shall failure by the Parties to require exact, full, and complete compliance with any of the covenants, conditions, or terms contained in this Agreement be construed as changing the terms of this Agreement in any manner or preventing the Parties from enforcing the full provisions hereof.
8.5 Rights and Remedies Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the Parties are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
8.6 Legal Action. In addition to any other rights or remedies, either Party may take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement.
8.7 Attorneys’ Fees. In the event any dispute between the Parties with respect to this Agreement results in litigation or any non-judicial proceeding, the prevailing Party shall be entitled, in addition to such other relief as may be granted, to recover from the non-prevailing Party all reasonable costs and expenses, including but not limited to reasonable attorneys’ fees,
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14 expert witness fees, court costs and all fees, costs, and expenses incurred in any appeal or in collection of any judgment entered in such proceeding. To the extent authorized by law, in the event of a dismissal by the plaintiff or petitioner of the litigation or non-judicial proceeding within thirty (30) days of the date set for trial or hearing, the other Party shall be deemed to be the prevailing Party in such litigation or proceeding.
9. CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
9.1 Non-liability of City Officers and Employees. No officer or employee of the City shall be personally liable to the Consultant, or any successor-in-interest, in the event of any default or breach by the City or for any amount which may become due to the Consultant or to its successor, or for breach of any obligation of the terms of this Agreement.
9.2 Conflict of Interest. No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his or her financial interest or the financial interest of any corporation, partnership, or association in which they are, directly or indirectly, interested in violation of any state statute or regulation. Consultant represents and warrants that it has not paid or given and will not pay or give any third party any money or other consideration in exchange for obtaining this Agreement.
9.3 Covenant Against Discrimination. In connection with its performance under this Agreement, Consultant shall not discriminate against any employee or applicant for employment because of race, disability, medical condition, religion, color, sex, sexual orientation, age, marital status, ancestry, or national origin. Consultant shall ensure that applicants are employed, and that employees are treated during their employment, without regard to their race, disability, medical condition, religion, color, sex, sexual orientation, age, marital status, ancestry, or national origin. Such actions shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.
10. MISCELLANEOUS PROVISIONS
10.1 Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be personally delivered, sent by registered or certified mail, postage prepaid, return receipt requested, or delivered or sent by facsimile with attached evidence of completed transmission, and shall be deemed received upon the earlier of (i) the date of delivery to the address of the person to receive such notice if delivered personally or by messenger or overnight courier; (ii) five (5) business days after the date of posting by the United States Post Office if by mail; or (iii) when sent if given by facsimile. Notices or other communications shall be addressed as follows:
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15 To City: City of Laguna Hills
Attention: Jarad L. Hildenbrand, City Manager
24035 El Toro Road
Laguna Hills, California 92653
Telephone: (949) 707-2600
Facsimile: (949) 707-2633
To Consultant: ProcureAmerica, LLC
Attention: Todd Main, Executive Vice President
31103 Rancho Viejo Road, #D2102
San Juan Capistrano, California 92675
Telephone: (949) 388-2686
10.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties and supersedes all prior negotiations, arrangements, agreements, representations, and understandings, if any, made by or among the Parties with respect to the subject matter hereof. No amendments or other modifications of this Agreement shall be binding unless executed in writing by both Parties hereto, or their respective successors, assigns, or grantees.
10.3 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be determined to be invalid by a final judgment or decree of a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the reminder of that provision, or the remaining provisions of this Agreement unless the invalid provision is so material that its invalidity deprives either Party of the basic benefit of their bargain or renders this Agreement meaningless.
10.4 Successors in Interest. This Agreement shall be binding upon and inure to the benefit of the Parties’ successors and assignees.
10.5 Third Party Beneficiary. Nothing contained in this Agreement is intended to confer, nor shall this Agreement be construed as conferring, any rights, including, without limitation, any rights as a third-party beneficiary or otherwise, upon any entity or person not a party hereto.
10.6 Recitals. The above-referenced Recitals are hereby incorporated into the Agreement as though fully set forth herein and each Party acknowledges and agrees that such Party is bound, for purposes of this Agreement, by the same.
10.7 Corporate Authority. Each of the undersigned represents and warrants that (i) the Party for which he/she is executing this Agreement is duly authorized and existing, (ii) he/she is duly authorized to execute and deliver this Agreement on behalf of the Party for which he/she is signing, (iii) by so executing this Agreement, the Party for which he/she is signing is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not
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16 violate any provision of any other Agreement to which the Party for which he/she is signing is bound.
10.8 Labor Code Requirements.
A. Prevailing Wages. Consultant is aware of the requirements of California labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Work or Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and since the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification, or type of worker needed to execute the Work or Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify, and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.
The foregoing indemnity shall survive termination of this Agreement.
B. DIR Registration. If the Work or Services are being performed as part of an applicable "public works" or "maintenance" project, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations ("DIR"). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Contractor's sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. [SIGNATURES ON NEXT PAGE]
1841070.1
EXHIBIT “A”
CONSULTANT’S PROPOSAL / STATEMENT OF WORK
SCOPE OF SERVICES FOR PROJECT
INCLUDING,
SCHEDULE OF PERFORMANCE
AND
SCHEDULE OF COMPENSATION/ REVENUE SHARING
Statement of Work
1.) STATEMENT OF WORK: Procure America (PA) is pleased to provide the following cost reduction consulting services to Client (as selected by Client) with the resolve and purpose of reducing or recovering costs. ❑ Waste Services ❑ Utilities
❑ Print Management ❑ Treasury Services
❑ Telecommunications ❑ Technology Optimization
PA shall use its best efforts to obtain cost savings for Client’s benefit by analyzing Client’s policies, procedures, supplier contracts, past invoices and other pertinent information as it relates to the above selected expense categories set for review. PA will gather information as to Client’s needs (past, present and future) from Client’s service providers so as to build a solution that not only lowers cost, but also matches Client’s operational and corporate requirements and expectations. After analyzing Client’s current spending patterns, PA shall provide Client with a findings report outlining PA’s observations. PA’s report will include a review of operations, cost reduction recommendations and potential service level enhancements. The report’s recommendations will also include a comparison to the Client’s historical cost or “Established Rates” to clearly outline the cost savings generated by this project. It is understood that despite PA’s recommendations, the Client has the right not to proceed with any of PA’s result findings or proposals.
2.) POST REVIEW PHASE: In the event that the Client wishes to proceed with PA’s recommendations as set forth in PA’s findings report, for the entire balance of the relationship with Client, PA will continue to consult with Client in an effort to continuously look for efficiencies in the chosen areas of focus. Periodically, the PA team will review Client’s invoicing and deliverables to ensure accountability by Client’s service providers with respect to the spirit and intent of the agreement between Client and the third-party service provider. This review will take into account service levels, cost controls and overall client satisfaction. Further, PA will continuously consult with Client to anticipate changes in service needs to ensure that the proper service provider, contract and procedures are in place to address Client’s go forward requirements.
3.) REVENUE SHARE: Client has in place certain existing costs as it pertains to the requested expense categories selected for review (“Established Rates”). PA’s findings report will document the Established Rates and specific recommendations for each service or product chosen for review and outline the methodology used to generate PA’s report. Client and PA will then discuss and agree on the Established Rates for the targeted service or product as outlined in PA’s findings report. If Client elects to proceed with any or all of the recommendations as set forth in PA’s findings report, Client agrees to compensate PA for the savings outlined with the findings report. The Revenue Share to PA is thirty percent of the actual realized savings measured by the difference between the agreed upon Established Rates and Client’s new costs as set forth in PA’s findings report and documented through actual realized savings.
In some cases, the PA staff may discover over billing, credits, rebates or other sources of revenue. This income is to be considered expense reduction for purposes of this Agreement and will be accounted for in the same manner as the expense reduction savings. This revenue shall be shared with PA after the refunds or other credits are realized by Client. In other cases, PA may have the ability to recover rebates or other compensation by contractors or service providers. PA shall disclose this compensation to Client and both parties shall share this revenue as savings at the time the revenue is received.
It may be necessary to institute cost reduction strategies within a specific expense category in stages. If this occurs, then each stage of implementation will be viewed with its own billing cycle.
1 4.) CLIENT PARTICIPATION: Client shall give its full cooperation to PA in providing all required documents, invoices, contracts and staff consultation time to PA’s evaluation team in order to conduct the expense reduction review. During the review process, Client agrees not to renegotiate, amend or extend in place contracts or introduce operational procedures/changes that will effect cost/pricing and or contractual obligations of the Client to the supplier. Any cost reduction made during the assessment process will be credited to PA’s presence and is therefore treated as such and factored into the shared revenue structure. During the course of the relationship between PA and Client, Client and PA understand that despite PA’s recommendations, suggestions, potential suppliers and other proposals, Client has the right not to proceed with said proposals. However, if Client does pursue any or all of the documented review recommendations (with or without PA’s further assistance), PA is entitled to the appropriate revenue share as outlined in Section 3 above. Client agrees to grant PA the right to review any materials (books, records, invoices, contracts or other information) related to the review category selected by Client in Section 1 above. PA is authorized to obtain information relating to the provider accounts directly from the providers personnel and provider websites. Any additional Client request or engagements, written or otherwise, to review supplementary expenses or income streams will also be governed by this Agreement.
This Agreement shall commence with the Client’s first PA invoice per expense category and will be in effect for an initial 60 month term. Each expense reduction category carries its own 60 month term/billing cycle commencing on the first invoice for that particular practice group. If the savings is implemented in stages, each stage will carry its own 60 month term. PA and Client shall have the option to terminate this Agreement after the initial term with a 30 day prior written notice to the other party.
IN WITNESS WHEREOF, Client has executed this Agreement to be effective on the date below.
Client: City of Laguna Hills By: Jarad Hildenbrand
Title: City Manager Signature:
Date:
Procure America 31103 Rancho Viejo Road #D2102 San Juan Capistrano CA 92675 2
Item No. 4.8
City of Laguna Hills
City Council / Planning Agency
Staff Report
Date: July 9, 2024
To: Mayor and Council Members
From: Jarad Hildenbrand, City Manager
Issue: Community Assistance Funding to the Laguna Hills High School Parent Teacher Student Association for Grad Nite and Scholarship Funding Recommendation: That the City Council adopt a Resolution entitled: "A Resolution of the City Council of the City of Laguna Hills, California, authorizing annual Community Assistance Funding to the Laguna Hills High School Parent Teacher Student Association for Grad Nite and Scholarship Funding."
Background:
At the June 25, 2024, City Council meeting, the City Council directed staff to prepare an authorizing Resolution for an annual community assistance funding in the amount of $8,000 to the Laguna Hills High School Parent Teacher Student Association for Grad Nite and Scholarship Funding.
The attached proposed Resolution authorizes community assistance funding in the total amount of $8,000 per year to the Laguna Hills High School PTSA, a 501(c)(3) nonprofit corporation. The annual contribution will be broken down as follows: (a) an amount of $6,000 for the LHPTSA’s Grad Nite program; and, (b) an amount of $2,000 for the LHPTSA’s Scholarship Program.
Fiscal Impact:
The annual community assistance funding in the amount of $8,000 to the Laguna Hills High School Parent Teacher Student Association is funded by the City’s General Fund.
The Fiscal Year 2024/25 Budget includes $50,000 (Account Number 100-155-695000) for Community Assistance / Public Relations. The City Council's decision to increase the
Item No. 4.8
contribution from $4,000 to $8,000 does not alter the current budget.
Attachments:
1. Proposed Resolution for LHPTSA Community Assistance Funding
4864-1264-7629, v. 1
RESOLUTION NO. 2024-07-09-1
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LAGUNA HILLS, CALIFORNIA,
AUTHORIZING ANNUAL COMMUNITY
ASSISTANCE FUNDING TO THE LAGUNA HILLS
HIGH SCHOOL PARENT TEACHER STUDENT
ASSOCIATION FOR GRAD NITE AND
SCHOLARSHIP FUNDING
The City Council of the City of Laguna Hills, California, hereby finds, determines, declares, and resolves as follows:
WHEREAS, at the discretion of the City Council, the City may provide community assistance funding to certain community groups, civic, philanthropic, and nonprofit organizations that provide community assistance, service, support, events and/or programming efforts intended to enhance the quality of life of the City's residents and business community, provided the City Council finds and determines that the expenditure of such community assistance funding fulfills a public purpose and provides a direct public benefit within the City of Laguna Hills; and, WHEREAS, at the June 25, 2024 City Council meeting, and following a public presentation and discussion, the City Council unanimously voted to approve and directed City staff to prepare an authorizing resolution for community assistance funding for the Laguna Hills High School Parent Teacher Student Association (“LHPTSA”), a 501(c)(3) nonprofit corporation; and,
WHEREAS, the LHPTSA is a volunteer organization that works to support Laguna Hills High School students and teachers by facilitating numerous programs, events, and services for the Laguna Hills High School community. Relevant here, the LHPTSA hosts a yearly Grad Nite celebration for Laguna Hills High School students, providing a safe and secure, substance-free place for graduating seniors to celebrate the culmination of their high school experience. The Grad Nite program aims to provide a safe alternative to what can often be a perilous and hazardous night for students, thus fulfilling a critical public safety function designed to protect Laguna Hills High School children. The LHPTSA also offers several scholarship opportunities for the benefit of Laguna Hills High School students, which include the PTSA Service Scholarship, the PTSA Creative Student Scholarship, the PTSA Hawk Inspiration Scholarship, PTSA Occupational Award Scholarship, the PTSA Senior of the Year Scholarship, and the PTSA Working Student Scholarship; and,
WHEREAS, supporting Laguna Hills High School students, teachers, and community is at the core of the PTSA’s public purpose mission; toward this mission and commitment to public service, the LHPTSA regularly provides scholarship opportunities and programs like Grad Nite for the benefit of Laguna High School students and Laguna Hills residents; and,
Resolution No. 2024-07-09-X
Page No. 2
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WHEREAS, in 1992, the City Council approved an annual $2,500 contribution for Grad Nite. In 1998, the City’s annual contribution to Grad Nite increased to $4,000, a level that has been maintained to this day. Given the enduring success and importance of Grad Nite in ensuring the safety and enjoyment of Laguna Hills High School graduating seniors and the LHPTSA’s continued commitment to providing scholarships to Laguna Hills High School students, the City Council hereby affirms its commitment to the safety, education, and well-being of the City’s youth and continued support of this long-standing community tradition; and,
WHEREAS, through the adoption of this Resolution, a majority of the City Council desires to make public purpose findings in order to authorize the continued expenditure of community assistance funding to the Laguna Hills High School PTSA in recognition and in support of the programming, events, work and services the PTSA provides to enhance the quality of life within the City of Laguna Hills.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAGUNA HILLS,
CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:
SECTION 1. The foregoing recitals are true and correct and are incorporated herein by reference.
SECTION 2. The City Council hereby authorizes and directs that the City provide community assistance funding in the total amount of $8,000 per year to the Laguna Hills High School PTSA, a 501(c)(3) nonprofit corporation. The annual contribution will be broken down as follows: (a) an amount of $6,000 for the LHPTSA’s Grad Nite program; and, (b) an amount of $2,000 for the LHPTSA’s Scholarship Program.
SECTION 3. The City Council hereby finds and determines that the annual expenditure of community assistance funding in the operating budget to the Laguna Hills High School PTSA, as authorized herein, fulfills a public safety purpose and provides a direct public benefit to the Laguna Hills High School community and to the residents and children of the City of Laguna Hills.
PASSED, APPROVED, AND ADOPTED this 9th day of July 2024. ____________________________________
DAVE WHEELER, MAYOR
ATTEST:
______________________________________
JENNIFER LEE, CITY CLERK
Resolution No. 2024-07-09-X
Page No. 3
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4864-1264-7629, v. 1
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss
CITY OF LAGUNA HILLS )
I, Jennifer Lee, City Clerk of the City of Laguna Hills, California, DO HEREBY CERTIFY that the foregoing is a true and correct copy of Resolution No. 2024-07-09-X adopted by the City Council of the City of Laguna Hills, California, at a Regular Meeting thereof held on the 9th day of July 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
(SEAL)
_____________________________________
JENNIFER LEE, CITY CLERK
Item No. 5.5.1
City of Laguna Hills
City Council / Planning Agency
Staff Report
Date: July 9, 2024
To: Chair and Agency Members
From: Larry Longenecker, Community Development Director Issue: Conditional Use Permit (CUP) No. USE-0180-2024, a Request by Brian BatistaLopez, Project Architect with MSA Architecture and Design, on Behalf of MSA Architecture and Design, Inc., to Establish Five Self-Service Grooming Stations Within a Proposed Retail Pet Supply Store, Pet Food Express, in an Existing 5,744 Square-Foot Tenant Space Located at 24241 Avenida De La Carlota Recommendation: That the Planning Agency:
1) Conduct a public hearing;
2) Find and determine that the project is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 of Title 14, Chapter 3 of the California Code of Regulations (Class 1, Existing Facilities); and 3) Adopt a Resolution entitled: “A Resolution of the Planning Agency of the City of Laguna Hills, California, Approving Conditional Use Permit (CUP) No. USE-0180-2024, a Request by Brian Batista-Lopez, Project Architect with MSA Architecture and Design, on Behalf of MSA Architecture and Design, Inc., to Establish Five Self Service Grooming Stations Within a Proposed Retail Pet Supply Store, Pet Food Express, in an Existing 5,744 Square-Foot Tenant Space Located at 24241 Avenida De La Carlota, Including an Exemption from the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15301 of Title 14, Chapter 3 of the California Code of Regulations (Class 1, Existing Facilities).”
Background:
Oakbrook Village (“Center”) is a mixed-use commercial center located on the west side of Avenida de la Carlota, north of Los Alisos Boulevard. The Center was originally approved and constructed in the 1970s under the County’s jurisdiction (SP77-9P). In 2012, the City approved a redevelopment plan (SDPM/CUP/PUP-12-11-2137) for the