1. Basic Provisions ("Basic Provisions").
1.1 ParƟes. This Lease ("Lease"), dated for reference purposes only October __, 2023 , is made by and between Golden Spring Capital LLC, a California limited liability company ("Lessor") and City of Murrieta, a municipal corporation ("Lessee") (collecƟvely the "ParƟes", or individually a "Party").
1.2 Premises: That certain porƟon of the Shopping Center (as defined below), including all improvementstherein or to be provided by Lessor under the terms of this Lease, commonly known as(street address, unit/suite, city,state): Unit B & C ("Premises") which are part of 24620 Jefferson Ave, Murrieta, CA 92562 ("Building Parcel") which contains a building with 8,404 square feet ("Building") ) ("Premises"). The Premises are located in the County of Riverside and generally described as (describe briefly the nature of the Premises): approximately 4,868 square feet space . In addiƟon to Lessee's rightsto use and occupy the Premises as hereinaŌer specified, Lessee shall have non-exclusive rightsto 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, or the uƟlity raceways ofthe Bbuilding Parcel containing the Premises ("Building") or toany other buildingsin the Shopping Center. The Premises and the Building are situated within the Shopping Center known as Olivewood . The Premises, the Building, the Common Areas, and all other buildings and improvements within said Shopping Center, together with the land upon which they are located, are herein collecƟvely referred to as the "Shopping Center." (See also Paragraph 2).
Lessor owns only the lot containing the Building Parcel(APN 949-600-015) which is part of the Shopping Center. All references herein to theBuilding shall include all rights speciϐied in that certainDeclaration of Covenants, Conditions, Restrictions and Reciprocal Easements recorded on December 12, 2011 as Instrument No. 2011-0546359 in the Ofϐicial Records ofRiverside County ("CC&Rs"). Lessee shall have the non-exclusive rights appurtenant to the Building Parcel pursuantto the CC&Rs. For purposes ofthis Lease, all references to the "Common Area" shall mean only those Common Areas (as deϐined in CC&Rs) applicable to the Building Parcel and interior utility raceways and installationswithin the Premises for use by occupants of the Building. Lessor does not have direct oversight or control of all the Common Areas in the Shopping Center other than those rights as an "Owner" of theBuilding Parcel to the extent speciϐied in the CC&Rs.
1.3 Term: Six (6) years and months("Original Term") commencing ("CommencementDate") and ending ("ExpiraƟon Date"). (See also Paragraph 3) See Paragraph 53.
1.4 Early Possession: If the Premises are available Lessee may have non-exclusive possession of the Premises commencing ("Early Possession Date"). (See also Paragraphs 3.2 and 3.3)
1.5 Base Rent: $9,249.20 per month ("Base Rent"), payable on the First (1st) day of each month commencing Rent Commencement Date as deϐined in Paragraph 54 . (See also Paragraph 4)
If this box is checked,there are provisions in this Lease forthe Base Rent tobe adjusted. See Paragraph 51 .
1.6 Percentage Rent Rate: percent ( %) of Gross Sales. Percentage Rentshall be due and payable in accordance with the provisions of the Percentage Rent Addendum, if any, aƩached hereto and made a part hereof, and Paragraph 4 hereof.
1.7 Lessee's Share of Common AreaOperaƟng Expenses: Fifty Seven point Nine Two Five percent ( 57.925 %) ("Lessee's Share"). In the event thatthe size of the Premises and/or the Shopping Center are modified during the term of this Lease, Lessorshall recalculate Lessee's Share to reflect suchmodificaƟon. This percentage applies to Building only. See Paragraphs 62 &63.
1.8 Merchants' AssociaƟon Annual Dues: per year ("Merchants' AssociaƟon Dues"). Lessee shall pay Merchants' AssociaƟon Dues and/or become a member of the Merchants' AssociaƟon in accordance with the provisions of the Merchants' AssociaƟon Addendum, if any, aƩached hereto.
1.9 Base Rent and Other Monies Paid Upon ExecuƟon:
1.10 Agreed Use: general and administrative ofϐice and any other legally permitted use . (See also Paragraph 6)
1.11 Agreed Trade Name: City of Murrieta__ . (See also Paragraph 6)
1.12 Insuring Party. Lessor isthe "Insuring Party". (See also Paragraph 8)
1.13 Real Estate Brokers. (See also Paragraph 15 and 25) to the following agency relaƟonships in this Lease with the following real estate brokers ("Broker(s)") and/or their agents ("Agent(s)"):
Lessor's Brokerage Firm Harvest Realty Development Inc. License No. 01964500 Isthe broker of (check one): the Lessor; or both the Lessee and Lessor (dual agent).
Lessor's Agent Ke Xiao / Jessica Zhang License No. 02072888 / 01986201 is (check one): the Lessor's Agent (salesperson or broker associate); or both the Lessee's Agent and the Lessor's Agent (dual agent).
STANDARD MULTI-TENANT SHOPPING CENTER LEASE - NET
(a) Base Rent: $9,249.20 for the period Third (3rd) Month Rent Base Rentfor the 1st and 2nd months is entirely abated. (b) Common Area OperaƟng Expenses: The current esƟmate for the period First Month is $4,624.60 . (c) SecurityDeposit: ("SecurityDeposit"). (See also Paragraph 5) (d) Merchants' AssociaƟon Dues: for the period .
(e) Other: for .
(f) Total DueUpon ExecuƟon ofthis Lease: $13,873.80 .
(a) RepresentaƟon: Each Party acknowledges receiving a Disclosure RegardingReal Estate Agency RelaƟonship, confirms and consents Lessee's Brokerage Firm Cushman & Wakeϐield of California, Inc. License No. 00616335 Is the broker of (check one): the Lessee; or both the Lessee and Lessor (dual agent).
Lessee's Agent John Gallivan License No. 01096309 is (check one): the Lessee's Agent (salesperson or broker associate); or both the Lessee's Agent and the Lessor's Agent (dual agent). (b) Payment to Brokers. Upon execuƟon and delivery of this Lease by both ParƟes, Lessor shall pay tothe Brokers the brokerage fee agreed toin a separate wriƩen agreement (or if there is no such agreement, the sum of or % of the total Base Rent)for the brokerage services rendered by the Brokers.
1.14 Guarantor. The obligaƟons of the Lessee underthis Lease are to be guaranteed by ("Guarantor"). (See also Paragraph 37)
1.15 AƩachments. AƩached hereto are the following, all of which consƟtute a part of this Lease:
an AddendumconsisƟng of Paragraphs 53 through 70 ;
a site plan marked Exhibit A depicƟng the Premises;
a site plan marked Exhibit B depicƟng the Shopping Center; a currentset of the Rules and RegulaƟons forthe Shopping Center per the CC&Rs; a currentset of the Sign Criteria for the Shopping Center per the CC&Rs; a Work LeƩer;
other (specify): (i) CC&Rs; (ii) Rent Adjustments (Paragraph 51) and (iii) Options to Extend (Paragraph 52). .
2. Premises.
2.1 Leƫng. Lessor hereby leasesto Lessee, and Lessee hereby leases fromLessor, the Premises,for the term, atthe rental, and upon all of the terms, covenants and condiƟons setforth in this Lease. While the approximate square footage of the Premises may have been used in the markeƟng of the Premises for purposes of comparison, the Base Rent stated herein is NOT Ɵed to square footage and is not subjectto 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 deliverthe Premises to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and, so long as the required service contracts describedin Paragraph 7.1(b) below are obtained by Lessee and in effect within 30 daysfollowing the Start Date, warrants that the exisƟng electrical, plumbing, fire sprinkler, lighƟng, heaƟng, venƟlaƟng and air condiƟoning systems("HVAC"), loading doors, if any, and all other such elementsin the Premises, otherthan those constructed by Lessee, shall be in good operaƟng condiƟon on said date, thatthe structural elements of the roof, bearing walls and foundaƟon of the Premisesshall be free of material defects, and that the Premises do not contain hazardouslevels of any mold or fungi defined as toxic under applicable state or federal law. If a non-compliance with such warranty exists as of the Start Date, or if one of such systems or elements should malfuncƟon or fail within the appropriate warranty period, Lessorshall, as Lessor's sole obligaƟon with respectto such maƩer, except as otherwise provided in this Lease, promptly aŌerreceipt of wriƩen noƟce from Lessee seƫng forth with specificity the nature and extent of such non-compliance, malfuncƟon or failure, recƟfy same at Lessor's expense. The warranty periodsshall be asfollows: (i) 6 months as to the HVAC systems, and (ii) 30 days asto the remaining systems and other elements of the Premises. If Lessee does not give Lessor the required noƟce within the appropriate warranty period, correcƟon of any such non-compliance,malfuncƟon or failure shall be the obligaƟon of Lessee at Lessee'ssole cost and expense (except for the repairs to the fire sprinkler systems, roof, foundaƟons, and/or bearing walls). 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 warrants thatto the best ofits knowledge the improvements on the Premises and the Common Areas comply with the building codes, applicable laws, covenants or restricƟons ofrecord, regulaƟons, and ordinances("Applicable Requirements") thatwere in effect at theƟme 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 requiredby the Americans with DisabiliƟes Act or any similar laws as a result of Lessee's use (see Paragraph 50), or to any AlteraƟons orUƟlity InstallaƟons (as defined in Paragraph 7.3(a))made or tobe made by Lessee. NOTE: Lessee is responsible for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee's intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said warranty, Lessorshall, except as otherwise provided, promptly aŌer receipt ofwriƩen noƟce fromLessee seƫng forth with specificity the nature and extent of such non-compliance, recƟfy the same at Lessor's expense. If Lessee does not give Lessor wriƩen noƟce of a non-compliance with this warranty within 6 months following the Start Date, correcƟon of that non-compliance shall be the obligaƟon of Lessee at Lessee's sole cost and expense. If the Applicable Requirements are hereaŌer changed so as to require during the term ofthis Lease the construcƟon of an addiƟon to or an alteraƟon of the Premises and/or Building, the remediaƟonof any Hazardous Substance, or the reinforcement or other physical modificaƟon of the Premises and/or Building ("Capital Expenditure"), Lessor and Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(c) below, ifsuch 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 ifsuch Capital Expenditure isrequired 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 deliverto 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, eachmonth 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 thatit is not economically feasible to pay its share thereof, Lessor shall have the opƟon to terminate this Lease upon 90 days prior wriƩen noƟce toLessee unless Lessee noƟfies Lessor, in wriƟng, within 10 days aŌer receipt of Lessor'sterminaƟon noƟce that Lessee will pay forsuch Capital Expenditure.
If Lessor does not elect to terminate, and failsto tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same, with Interest,from Rent unƟl Lessor'sshare of such costs have been fully paid. If Lessee is unable to finance Lessor's share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficientto 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 toapply 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 toeliminate the requirementfor such Capital Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not have any rightto terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises;(b) it 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 the Americans with DisabiliƟes Act) and their suitability for Lessee's intended use; (c) Lessee has made such invesƟgaƟon asit 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 notrelying on any representaƟon as to the size of the Premises made by Brokers or Lessor; (e) the square footage of the Premises was not materialto 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 asset forth in this Lease. In addiƟon, Lessor acknowledges that: (i) Brokers havemade no representaƟons, promises or warranƟes concerning Lessee's ability to honorthe Lease or suitability to occupy the Premises, and (ii) itis 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 priorto the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary correcƟve work.
2.6 Vehicle Parking. Lessee shall have the right to use 18 parking spaces without cost to Lessee. Lessee shall not use and shall not permit its employeesto use any parking spaces in the Shopping Center except for parking by vehiclesthat are no largerthan full-size passenger automobiles or pick-up trucks, herein called "PermiƩed Size Vehicles." Lessee shall permitits employees to only occupy those parking spaces, if any, as depicted as employee parking spaces on the Shopping Center site plan. Lessor may regulate the loading and unloading of vehicles by adopƟng Rules and RegulaƟons as provided in Paragraph 2.9. No vehicles otherthan PermiƩed Size Vehicles may be parked in the Common Area without the prior wriƩen permission of Lessor. In addiƟon:
(a) Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee's employees, suppliers,shippers, contractors orinvitees to be loaded, unloaded, or parked in areas other than those designated by Lessorfor such acƟviƟes. (b) Lessee shall not service or store any vehicles in the Common Areas. (c) If Lessee permits or allows any of the prohibited acƟviƟes described in this Paragraph 2.6, then Lessor shall have the right, without noƟce, in addiƟon to such otherrights and remediesthat it may have, to remove ortow away the vehicle involved and charge the cost to Lessee, which costshall be immediately payable upon demand by Lessor.
2.7 Common Areas- DefiniƟon. The term "Common Areas" is defined in Paragraph 1.2as all areas and faciliƟes outside the Premises and within the exterior boundary line of the Shopping Center and interior uƟlity raceways and installaƟons within the Premises that are provided and designated by the Lessor from Ɵme to Ɵme for the general non-exclusive use of Lessor, Lessee and other tenants of the Shopping Center and their respecƟve employees,suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's Rights. Lessor grantsto Lessee, for the benefit of Lessee and its employees, suppliers,shippers, contractors, customers and invitees, during the termof this Lease, the non-exclusive right touse, in common with others enƟtled to such use, the Common Areas asthey exist from Ɵme to Ɵme, subjectto 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 Shopping Center. 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, northe right to display merchandise or conduct sales in the Common Areas. Any such storage, display or sales shall be permiƩed only by the prior wriƩen consent of Lessor or Lessor's designated agent, as exercised in Lessor'ssole discreƟon, which consent may be revoked at any Ɵme. In the eventthat any unauthorized storage or displays shall occurthen Lessor shall have the right, without noƟce, in addiƟon to such other rights and remedies thatit may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.9 Common Areas- Rules and RegulaƟons. Lessor orsuch other person(s) as Lessor may appoint shall have the exclusive control and management ofthe Common Areas applicable to the Building Parcel and shall have the right,from Ɵme to Ɵme, to establish, 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 Shopping Center and their invitees. Lessee agrees toabide 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 toso abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said Rules and RegulaƟons by other tenants of the Shopping Center. Lessee shall diligently enforce all rights applicable to the Building Parcel under the CC&Rs.
2.10 CommonAreas - Changes. Lessor shall have the right, in Lessor'ssole discreƟon, fromƟme to Ɵme as authorized by the CC&Rs applicable to the Building Parcel:
(a) To make changes or addiƟons tothe Common Areas, including, without limitaƟon, changesin the locaƟon,size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direcƟon of traffic, elevaƟons, landscaped areas, signage, walkways and uƟlity raceways;
(b) To use and close temporarily any of the Common Areas for the purpose of maintaining, repairing and altering the Shopping Center the Building,so long as reasonable access to the Premises remains available, and to close temporarily any of the Common Areas to whatever extent isrequired in the opinion of Lessor's counselto prevent a dedicaƟon of or the accrual of any rights of any persons or of the public to any of the Common Areas;
(c) To designate other land outside the boundaries ofthe Shopping Center to be a part of the Common Areas or to be enƟtled to use the Common Areas on a reciprocal basis;
(d) To add addiƟonal buildings and improvements to the Common Areas; and (e) To do and perform such other acts andmake such other changes in, to or with respect to the Common Areas and Shopping Center as Lessor may, in the exercise ofsound business judgment, deem to be appropriate.
2.11 Common Areas- PromoƟonal Events; Sidewalk Sales. Lessor reserves the right,from Ɵme to Ɵme, in Lessor's sole discreƟon, to uƟlize porƟons of the Common Areas for promoƟonal events, whichmay include but shall not be limited to entertainment. Lessorfurther reserves the right, in Lessor's sole discreƟon, topermit any one or more tenants ofthe Shopping Centerto conduct the display and/or sale of merchandise from the sidewalksimmediately adjacent to such tenants' respecƟve premises.
2.12 CommonAreas - Remodeling. At any Ɵme during the Term, Lessor may remodel or expand, in any manner,the exisƟng Shopping Center, which workmay include, without limitaƟon, the addiƟon ofshops and/or new buildingsto the Shopping Center (collecƟvely, "Remodeled Center").
If Lessor deems it necessary for construcƟon personnel toenter the Premises in order to constructthe Remodeled Center, Lessorshall give Lessee no lessthan 60 days prior noƟce and Lessee shall allow such entry. Lessor shall use reasonable efforts tocomplete any work affecƟng the Premises in an efficient manner so as not to interfereunreasonably with Lessee's business. Lessee shall not be enƟtled to any damages for any inconvenience or any disrupƟon to Lessee's business caused by such work; provided, however,the Base Rent paid by Lessee forthe period of the inconvenience shall be abated in proporƟon to the degree that Lessee's use ofthe Premises isimpaired. Lessor shall have the rightto use porƟons of the Premises to accommodate any structures required for the Remodeled Center, provided that if as a result thereof there is a permanent decrease in the floor area ofthe Premises of 3% or more, there shall be a proporƟonate downward adjustment of Base Rent and Lessee's Share.
3. Term.
3.1 Term. The Commencement Date, ExpiraƟon Date and Original Term of this Lease are asspecified in Paragraph 1.3.
3.2 Early Possession. Any provision herein granƟng Lessee Early Possession of the Premises is subjectto and condiƟoned upon the Premises being available for such possession priorto the Commencement Date. Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If an Early Possession Date has been specified in Paragraph 1.4, the ParƟesintend that Lessee shall have access to the Premises as of the Early Possession Date for purposes of preparing and fixturizing the Premises forthe conduct of Lessee's business. If Lessee totally or parƟally occupies the Premises prior to the Commencement Date for any reason (and for purposes hereof, "occupancy" shall include, without limitaƟon, Lessee's entry onto the Premises for purposes of preparing and fixturizing the Premisesfor business), the obligaƟon to pay Base Rent and Percentage Rentshall be abated for the period ofsuch early possession. All other terms of this Lease (including but not limited to Lessee's obligaƟons tocarry insurance and tomaintain the Premises)shall be in effect during such period, except that Lessee's obligaƟonsto pay Lessee's Share of Common Area OperaƟng Expenses, Real Property Taxes and insurance premiums shall only be in effect prior to the Commencement Date if Lessee has opened for business in the Premises prior to the Commencement Date. Any such Early Possession shall not affect the ExpiraƟon Date.
3.3 Delay In Possession. Lessor agrees to use commercially reasonable efforts todeliver exclusive possession of the Premises to Lessee by the Commencement Date. If, despite said efforts, Lessoris unable to deliver possession by such date, Lessor shall not be subject toany liability therefor, norshall such failure affectthe 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 ofthe Premises and any period of rent abatement that Lessee would otherwise have enjoyed shallrun from the date of delivery of possession and conƟnue for a period equalto 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, as the 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 of such 60 day period, cancelthis 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 cancelshall 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 tender possession of the Premises to Lessee unƟl Lessee complies with its obligaƟon to provide evidence of insurance (Paragraph 8.5). 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 isrequired to perform any other condiƟons priorto or concurrent with the Start Date,the Start Date shall occur but Lessor may electto 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 Common AreaOperaƟng Expenses. Lessee shall pay to Lessor during the term hereof, in addiƟon to the Base Rent and, if applicable, Percentage Rent, Lessee's Share (as specified in Paragraph 1.7) of all Common AreaOperaƟng Expenses, as hereinaŌer defined, during each calendar year of the term of this Lease, in accordance with the following provisions: See Paragraph 61. (a) "Common AreaOperaƟng Expenses" are defined,for purposes of this Lease, as all costs relaƟng to the ownership and operaƟon of the Building Parcel Shopping Center, including, but not limited to, the following:
(i) Costs relaƟng to the operaƟon, repair and maintenance, in neat, clean, good order and condiƟon, and replacement as reasonably necessary, of the following:
(aa) The Common Areas and Common Area improvements, including parking areas, loading and unloading areas, trash areas, roadways, parkways,walkways, driveways, landscaped areas, parking lot striping, bumpers, irrigaƟon systems, Common Area lighƟng faciliƟes, fences and gates, elevators, roofs, exterior walls of the buildings, building systems and roof drainage systems. (bb) Exterior signs and any tenant directories.
(cc) Any fire detecƟon and/orsprinkler systems.
(dd) Common electrical, plumbing and other uƟliƟesservicing any building in the Shopping Center and/or the Common Areas. (ee) All other areas and improvementsthat are within the exterior boundaries of the Project but outside of the Premises and/or any otherspace occupied by a tenant.
(ii) The cost of water, gas, electricity and telephone to service the Common Areas and any uƟliƟes not separately metered. See Paragraph 56.
(iii) The cost of trash disposal (subject to Paragraph 56) , pest controlservices, property management(including, but not be limited to, a property management fee to Lessor equalto 5% of BaseRent and Percentage Rent), security services, and the costs of any environmental inspecƟons.
(iv) Reservesset aside for equipment, maintenance, repair and replacement of Common Areas. (v) Real Property Taxes(as defined in Paragraph 10). Subject to Paragraph 62. (vi) The cost of the premiums for the insurancemaintained by Lessor pursuant to Paragraph 8. (vii) Any deducƟble porƟon of an insured loss concerning the Building or the Common Areas. (viii) Auditors', accountants' and aƩorneys' fees and costs related tothe operaƟon of the BuildingShopping Center. (ix) The cost of any capital improvement to the Building or the Shopping Center not covered under the provisions of Paragraph2.3, provided, however,that Lessor shall allocate the cost of any such capital improvement over the standard life of the item and allocated in accordance with generally accepted accounting principals 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 improvement in any given month. Lessee shall pay Interest on the unamorƟzed balance but may prepay its obligaƟon at any Ɵme.
(x) The cost of any other services tobe provided by Lessor that are stated elsewhere in this Lease to be a Common Area OperaƟng Expense.
(xi) The Proportionate Share (as deϐined in the CC&Rs) applicable to theBuilding Parcel as assessed to Lessor as Owner of the Building Parcel. Lessor shall provide a copy of the each and every Proportionate Share billing received by Lessor from the Maintenance Operator (as deϐined in the CC&Rs). Lessee shall have the rightto review such costs allocated as the Proportionate Share and to challenge same in the name of Lessor under the CC&Rs if Lessor fails to do so Common AreaOperating Expenses shall not include (i) any items such as utilities and real estate taxes which are governed by Paragraphs 56 and 62, respectively; and (ii) any capital repairs or improvements, except to the extent such items reduce operating expenses or are required to complywith ApplicableRegulations.
(b) If Lessor determines that themethod of proraƟon of any item included within Common AreaOperaƟng Expenses is inequitable,the parties shall agree to Lessormay prorate such item on the basis of usage or other equitable consideraƟons. Any Common Area OperaƟng Expenses and Real Property Taxes that are specifically aƩributable to the Premises , the Building or to any other premises or building in the Shopping Center or to the operaƟon,repair and maintenance thereof, shall be allocated enƟrely to such premises or building. However, any Common AreaOperaƟng Expenses and Real Property Taxes that are not specifically aƩributable to any premises or building or to the operaƟon, repair andmaintenance thereof, shall be equitably allocated by Lessor to all buildingsin the Shopping Center. See Paragraph 62 regarding real estate taxes. Lessee shall have the right to audit the Common Area Operating Expenses at any time utilizing a reputable accounting ϐirm.
Upon ϐinal determination of the audit, any adjustment shall be paid by Lessor or Lessee, as applicable. (c) The inclusion of the improvements, faciliƟes and services set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligaƟon upon Lessor to either have said improvements or faciliƟes or to provide those services unlessthe Shopping Center 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. (d) Lessee's Share of Common Area OperaƟng Expensesis payable monthly on the same day as the Base Rentis due hereunder. The amount ofsuch payments shall be based on Lessor's esƟmate of the annual Common Area OperaƟng Expenses. Within 60 days aŌer wriƩen request (but not more than once each year) Lessorshall deliver to Lessee a reasonably detailed statement showing Lessee's Share of the actual Common AreaOperaƟng Expenses for the preceding year. If Lessee's payments during such year exceed Lessee's Share, Lessor shall credit the amount ofsuch over-payment against Lessee'sfuture payments. If Lessee's payments during such year were less than Lessee's Share, Lessee shall pay to Lessor the amount ofthe deficiency within 10 days aŌer delivery by Lessor to Lessee of the statement. (e) If there are one ormore Major Tenants (as hereinaŌer defined) within the Shopping Center, then at Lessor's sole opƟon, the amount to be reimbursed by such Major Tenants to Lessorfor all or a porƟon of the Common Area OperaƟng Expenses may be determined by alternaƟve equitable methods(e.g., a Major Tenant may pay directly for its own security), and the actual amount paid by such Major Tenants shall be credited against the Common Area OperaƟng Expenses allocated to othertenants of the Shopping Center; provided, however,that in such eventthe rentable area of the buildings leased to such Major Tenants shall be excluded from the rentable area of the Shopping Center for purposes of determining Lessee's Share of Common AreaOperaƟng Expenses for those specific items, notwithstanding the percentage setforth in Paragraph
1.7. As used herein, the term "Major Tenant" shall mean a tenantleasing at least 15,000 square feet ofrentable area within the Shopping Center. (f) Common Area OperaƟng Expenses shall not include any expenses paid by any tenant directly to third parƟes, or asto which Lessoris otherwise reimbursed by any third party, other tenant, or insurance proceeds except as provided otherwise in the Lease including Paragraph
13.6. 4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deducƟon (except asspecifically permiƩed in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall not consƟtute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease. Rent for any period during the termhereof which is forless than one full calendar month shall be prorated based upon the actual number of days of saidmonth. Payment of Rent shall be made to Lessor atits address stated herein or to such other persons or place as Lessor may fromƟme to Ɵme designate in wriƟng. Acceptance of a payment which is lessthan the amountthen due shall not be a waiver of Lessor's rights to the balance of such Rent, regardless of Lessor's endorsement of any check so staƟng. In the eventthat any check, draŌ, or otherinstrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sumof $25 in addiƟon to any Late Charge and Lessor, atits opƟon, may require all future Rent be paid by cashier's check. Paymentswill be applied first to accrued late charges and aƩorney's fees, second toaccrued 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 failsto pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply orretain all or any porƟon of said Security Deposit for the payment of any amount already due Lessor,for Rents whichwill be due in the future, and/ or to reimburse or compensate Lessorfor any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any porƟon ofthe Security Deposit, Lessee shall within 10 days aŌer wriƩen requesttherefor deposit monies with Lessor sufficient to restore said Security Depositto the full amountrequired by this Lease. If theBase Rent increases during the term ofthis Lease, Lessee shall, upon wriƩen request fromLessor, deposit addiƟonal monies with Lessor so that the total amount of the SecurityDeposit shall at all Ɵmes bear the same proporƟon to the increased Base Rent as the iniƟal Security Deposit bore tothe iniƟal Base Rent. Should the Agreed Use be amended to accommodate amaterial change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to increase the Security Depositto the extent necessary, in Lessor's reasonable 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 as shall be sufficient to cause the Security Depositto be at a commercially reasonable level based on such change in financial condiƟon. Lessor shall not be required to keep the Security Depositseparate from its general accounts. Within 90 days aŌer the expiraƟon or terminaƟon of this Lease, Lessorshall return that porƟon ofthe Security Deposit not used or applied by Lessor. Lessorshall upon wriƩen request provide Lessee with an accounƟng showing how that porƟonof the Security Depositthat was notreturned was applied. No part of the Security Deposit shall be considered tobe held in trust,to bear interest or to be prepaymentfor any moniesto 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.
6.1 Use.
(a) Agreed Use;Agreed Trade Name. Lessee shall use and occupy the Premises only for the Agreed Use, and for no other purpose, and Lessee shall operate at the Premises only under the Agreed Trade Name and under no othertrade name. Lessee shall not use or permit the use of the Premisesin a manner thatis 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. Lessor shall not unreasonably withhold or delay its consent toany wriƩen requestfor a modificaƟon of the Agreed Use,so long as the same will not impair the structural integrity of the improvement on the Premises or the mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises, and/or is notin conflict with orincompaƟble with the exisƟng or proposed uses(whether or not exclusive) of other occupants of the Shopping Center. Lessor shall not unreasonably withhold or delay its consent to any wriƩen request for a modificaƟon of the Agreed Trade Name,so long asthe same is notin conflict with or incompaƟble with the nature and character of the Shopping Center or other exisƟng or proposed uses of other occupants of the Shopping Center. 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 AgreedUse and/or Agreed Trade Name.
(b) ConƟnuousOperaƟon. Lessee shall conƟnuously (i) operate and conduct theAgreed Use under the Agreed Trade Name within the enƟre Premisesin a reputable manner and in conformity with industry standards of pracƟce prevailing in the field of business among merchants engaged in the same or similar business in the city in which the Premises are located, (ii) staff the Premises with sufficient sales personnel, stock the Premises with adequate merchandise and exercise sound business pracƟcesso as to maximizeGross Sales for the benefit of Lessor. At aminimum, Lessee shall keep the Premises conƟnuously open for business Monday through Friday from9:00 a.m. to 6:00 p.m., Saturday from 9:00 a.m. to 6:00 p.m., and Sunday from 10:00 a.m. to 6:00 p.m. If Lessee failsto comply with the requirements of this Paragraph 6.1(b), then in addiƟon to any and all otherrights and remedies of Lessor, Lessee shall pay to Lessor an amount equal to 1/15th of the Base Rent for each day or porƟon thereofthat Lessee failsto so comply. Such sum shall be in addiƟon to, and not a part of, the Base Rent otherwise due under this Lease. (c) ViolaƟons of Exclusive Use Rights. Lessee acknowledgesthat Lessor may grant, or may have previously granted, exclusive use rights to othertenants of the Shopping Center and agreesthat a material consideraƟon to Lessor in entering into this Lease is Lessee's covenantto limit its use ofthe Premises to the Agreed Use underthe Agreed Trade Name as set forth above. Lessee's violaƟon of exclusive use rights granted to other tenants ofthe Shopping Center willresult in Lessorsuffering irreparable harm and,therefore, in addiƟon to all other rights and remedies available to Lessor, Lessor may seek to enjoin Lessee's breach of such covenant and Lessee shall be liable for any damagesincurred or sustained by Lessor to such othertenants whose exclusive use rights are breached by Lessee. In no event shall Lessor be liable toLessee for any failure of any other tenants ofthe Shopping Center to operate their businesses, or for any loss or damage thatmay be occasioned by or through the acts or omissions of othertenants or third parƟes.
(d) Other Tenancies. Lessor, at its sole discreƟon, reserves the absolute right to establish procedures to control other tenancies in the Building Shopping Center. Regardless ofwhether any specific tenants are shown on any site plan aƩached hereto, Lessee does not rely on that fact, nor does Lessor represent that any specific tenant or number or type of tenants shall or shall not during the Term occupy any porƟon of the Building Shopping Center, nor does Lessee rely on any other tenant operaƟng its businessin the Shopping Center at any parƟcular Ɵme or Ɵmes.
Further, no conduct by any tenant,subtenant or other occupant of, or any customer of, or any supplier to or use of any porƟon of the Shopping Center shall consƟtute an evicƟon, construcƟve or otherwise, of Lessee from the Premises, and Lessee hereby waives any and all claims that it might otherwise have against Lessor by reason thereof.
6.2 Hazardous Substances. See Paragraph 65
(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 orin 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 basisfor potenƟal liability of Lessor to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substancesshall 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 withoutthe 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 requiresthat a noƟce be given to persons entering or occupying the Premises or neighboring properƟes. Notwithstanding the foregoing, Lessee may use any ordinary and customarymaterials reasonably required to be used in the normal course of the AgreedUse, ordinary office supplies (copier toner, liquid paper, glue, etc.) and common household cleaningmaterials, 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 toany liability therefor. In addiƟon, Lessormay condiƟon its consent to any Reportable Use upon receiving such addiƟonal assurances as Lessor reasonably deems necessary to protectitself, 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/orincreasing the Security Deposit. (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe,that a Hazardous Substance has come tobe located in, on, under or about the Premises, other than as previously consented to by Lessor, Lessee shall immediately give wriƩen noƟce of such factto 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 aboutthe Premises (including through the plumbing orsanitary sewer system) and shall promptly, at Lessee's expense, comply with all Applicable Requirements and take all invesƟgatory and/orremedial acƟon reasonably recommended, whether or notformally ordered orrequired, for the cleanup of any contaminaƟon of, and for the maintenance,security and/or monitoring ofthe 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 fromand against any and all loss ofrents and/or damages, liabiliƟes, judgments, claims, expenses, penalƟes, and aƩorneys' and consultants' fees arising out of orinvolving 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 underthe Premises from areas outside of the Shopping Center 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, restoraƟonand/or abatement, and shallsurvive 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 Lessorin wriƟng atthe Ɵme of such agreement. (e) LessorIndemnificaƟon. 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 are suffered as a direct result ofHazardous Substances on the Premises prior to Lessee taking possession 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. Lessorshall retain the responsibility and pay for any invesƟgaƟons or remediaƟonmeasures required by governmental enƟƟes having jurisdicƟon with respect to the existence of Hazardous Substances on the Premises prior to Lessee taking possession, unlesssuch remediaƟon measure isrequired 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 Ɵmes in order to carry out Lessor's invesƟgaƟve and remedial responsibiliƟes.
(g) Lessor TerminaƟonOpƟon. If aHazardous Substance CondiƟon (see Paragraph 9.1(e)) occurs during the term of this Lease, unless Lessee islegally responsible therefor (in which case Lessee shall make the invesƟgaƟon and remediaƟon thereofrequired by the Applicable Requirements and this Lease shall conƟnue in full force and effect, but subjectto 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 as reasonably possible at Lessor's expense, in which event this Lease shall conƟnue in full force and effect, or (ii)if the esƟmated costto remediate such condiƟon exceeds 12 Ɵmes the then monthly Base Rent or $100,000, whicheveris greater, give wriƩen noƟce to Lessee, within 30 days aŌer receipt by Lessor of knowledge ofthe occurrence of such Hazardous Substance CondiƟon, of Lessor's desire to terminate this Lease as of the date 60 days following the date ofsuch noƟce. In the event Lessor elects to give a terminaƟon noƟce, Lessee may, within 10 daysthereaŌer, give wriƩen noƟce to Lessor of Lessee's commitmentto pay the amount by which the cost of the remediaƟonof 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 as soon asreasonably possible aŌerthe 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's sole expense, fully, diligently and in a Ɵmelymanner, materially comply with all Applicable Requirements,the requirements of any applicable fire insurance underwriter orraƟng bureau, and the recommendaƟons of Lessor's engineers and/or consultants which relate in anymanner to the Premises, without regardto whether said 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 orreport 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 mightindicate the presenceof 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 during Lessee's business hours 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 9.1(e))is found to exist or be imminent, or the inspecƟon isrequested or ordered by a governmental authority. In such case, Lessee shall upon requestreimburse Lessor for the cost of such inspecƟon, so long assuch inspecƟon isreasonably related to the violaƟon or contaminaƟon. In addiƟon, Lessee shall provide copies of all relevant materialsafety 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 Rentshall be automaƟcally increased, without any requirementfor noƟce to Lessee, by an amount equal to 10% of the then exisƟng Base Rent or $100, whicheveris greater for the remainder to the Lease. The ParƟes agree that such increase in Base Rentrepresents fair and reasonable compensaƟon for the addiƟonal risk/costs that Lessor will incur by reason of Lessee's failure to allow such inspecƟon and/ortesƟng. Such increase in Base Rentshall in no event consƟtute a waiver of Lessee's Default or Breach with respect to such failure nor preventthe exercise of any of the otherrights and remedies granted hereunder. Prior to Lessor's ϐire maintenance company entering the Premises to conduct any testing or repair on the ϐire control unit, Lessor shall provide Lessee atleast 5 days prior written notice and Lessee shall have the rightto have an employee present during such testing or repairs.
7. Maintenance; Repairs; UƟlity InstallaƟons; Trade Fixtures and AlteraƟons.
7.1 Lessee's ObligaƟons.
(a) In General. Subject to the provisions of Paragraph 2.2 (CondiƟon), 2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2 (Lessor's ObligaƟons), 9 (Damage or DestrucƟon), and 14 (CondemnaƟon) and 55 (Condition of Premises), Lessee shall, at Lessee's sole expense, keep the Premises, UƟlity InstallaƟons (intended for Lessee's exclusive use, no maƩer where located), and AlteraƟons in good order, condiƟon and repair (whether or not the porƟon of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee's use, any prior use, the elements or the age of such porƟon of the Premises), including, but notlimited to, all equipment or faciliƟes, such as plumbing, HVAC equipment, electrical, lighƟng faciliƟes, boilers, pressure vessels, fixtures, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights but excluding any items which are the responsibility of Lessor pursuant toParagraph 7.2. Lessee, in keeping the Premises in good order, condiƟon and repair, shall exercise and perform good maintenance pracƟces, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below. Lessee's obligaƟonsshall include restoraƟons, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereofin good order, condiƟon and state ofrepair. (b) Service Contracts. Lessee shall, at Lessee'ssole expense, procure andmaintain contracts, with copies to Lessor, in customary form and substance for, and with contractorsspecializing and experienced in the maintenance ofthe following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure vessels, and (iii) clarifiers. However, Lessor reserves the right, upon noƟce to Lessee, to procure and maintain any or all of such service contracts, and Lessee shall reimburse Lessor, upon demand, forthe direct cost thereof.
(c) Failure to Perform. If Lessee fails to perform Lessee's obligaƟons under this Paragraph 7.1, Lessor may enter upon the Premises aŌer 10 days' prior wriƩen noƟce toLessee (except in the case of an emergency, in which case no noƟce shall be required), performsuch obligaƟons on Lessee's behalf, and put the Premisesin good order, condiƟon and repair, and Lessee shall promptly pay to Lessor a sum equal to115% 110% of the costthereof.
(d) Replacement. Subject to Lessee's indemnificaƟon of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulƟng from Lessee's failure to exercise and performgood maintenance pracƟces, if an item described in Paragraph 7.1(b) cannot be repaired otherthan at a cost which is in excess of 50% of the cost ofreplacing such item, then such item shall be replaced by Lessor, and the cost thereof shall be prorated between the ParƟes and Lessee shall only be obligated to pay, eachmonth during the remainder of the termof this Lease or any extension thereof, on the date on which Base Rent is due, an amount equalto the product of mulƟplying the cost of such replacement by a fracƟon, the numerator of which is one, and the denominator of which is 144 (i.e. 1/144th of the cost permonth). Lessee shall pay Interest on the unamorƟzed balance but may prepay its obligaƟon at any Ɵme.
7.2 Lessor's ObligaƟons. Subject to the provisions of Paragraphs 2.2 (CondiƟon), 2.3 (Compliance), 4.2 (Common Area OperaƟng Expenses), 6 (Use), 7.1 (Lessee's ObligaƟons), 9 (Damage or DestrucƟon) and 14 (CondemnaƟon), Lessor, subjectto reimbursement pursuantto 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, Common Area fire alarmand/or smoke detecƟon systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and uƟlity systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area OperaƟng Expense pursuant to Paragraph 4.2. Lessor shall not be obligated topaint the exterior or interior surfaces of exterior walls norshall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of the Premises. Lessor shall operate and maintain theBuilding in a ϐirst class manner as economically as possible. Lessor shall promptly enforce any rights applicable to the Building Parcel under the CC&Rs.
7.3 UƟlity InstallaƟons; Trade Fixtures; AlteraƟons.
(a) DefiniƟons. The term "UƟlity InstallaƟons" refers to all floor and window coverings, air and/or vacuumlines, power panels, electrical distribuƟon,security and fire protecƟon systems, communicaƟon cabling, lighƟng fixtures, HVAC equipment, plumbing, and fencing 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. "LesseeOwned AlteraƟons and/orUƟlity InstallaƟons" are defined as AlteraƟons and/orUƟlity InstallaƟons made by Lessee that are not yet owned by Lessor pursuantto Paragraph 7.4(a). (b) Consent. Subject to Paragraph 58, Lessee shall not make any AlteraƟons or UƟlity InstallaƟonsto the Premiseswithout Lessor's prior wriƩen consent. Lessee may, however, make non-structuralAlteraƟons or UƟlity InstallaƟonsto the interior of the Premises (excluding the roof) withoutsuch 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 or any exisƟng walls, will not affect the electrical, plumbing, HVAC, and/or life safety systems, do nottrigger the requirementfor addiƟonal modificaƟons and/or improvements to the Premises resulƟng fromApplicable Requirements, such as compliance with Title 24, and the cumulaƟve costthereof during this Lease as extended does not exceed a sum equal to 3month's Base Rent in the aggregate or a sum equal toone month's Base Rent in any one year. 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 touƟlize 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. Consentshall 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 orUƟlity 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 of such AlteraƟon or UƟlity InstallaƟon and/or upon Lessee's posƟng an addiƟonal SecurityDeposit with Lessor. (c) Liens; Bonds. Lessee shall pay, when due, all claims forlabor or materials furnished or alleged tohave 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'slien 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, atits sole 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 Lessor shallrequire, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claimor demand, indemnifying Lessor against liability forthe 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 rightto 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 tobe 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 andUƟlity 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 ofwriƩen noƟce from Lessor not earlier than 90 and not laterthan 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 orterminaƟon of this Lease. Lessor may require the removal at any Ɵme of all or any part of any LesseeOwned AlteraƟons orUƟlity InstallaƟons made without the requiredconsent.
(c) Surrender; RestoraƟon. Lessee shall surrender the Premises by the ExpiraƟon Date or any earlierterminaƟon date, with all of the improvements, parts and surfaces inAS-IS condition with no obligation to remove any TenantImprovements or repair any portion of the Premises. thereof broom 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 notinclude 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 occupiesthe Premises for 12 months or less, then Lessee shall surrender the Premises in the same condiƟon as delivered to Lessee on the Start Date withNO 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 fromthe 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 undergroundmigraƟon from areas outside of the Premises) to the level specified in Applicable Requirements. Trade Fixtures shallremain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee notremoved on or before the ExpiraƟon Date or any earlier terminaƟon 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 pursuantto this Paragraph 7.4(c)without the express wriƩen consent of Lessorshall consƟtute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Payment of Premiums. The cost of the premiumsfor the insurance policies required to be carried by Lessor, pursuant to Paragraphs
8.2(b), 8.3(a) and 8.3(b), shall be a Common Area OperaƟng Expense. Premiumsfor policy periods commencing prior to, or extending beyond, the term of this Lease shall be prorated to coincide with the corresponding StartDate or ExpiraƟon Date.
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 occurrencebasis providing single limit coverage in an amount notless 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. The policy shall not contain any intra-insured exclusions as between insured persons or organizaƟons, butshall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Lessee's indemnity obligaƟons underthis Lease. The limits of said insurance shall not, however, limit the liability of Lessee norrelieve Lessee of any obligaƟon hereunder. Lessee shall provide an endorsement on its liability policy(ies) which providesthat its insurance shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance 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 requiredto 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 toLessor, any ground-lessor, and to any Lenderinsuring loss or damage to the Premises. The amount ofsuch insurance shall be equal to the full insurable replacement cost of the Premises, asthe same shall existfrom Ɵme to Ɵme, or the amountrequired by any Lender, but in no event more than the commercially reasonable and available insurable value thereof. LesseeOwned AlteraƟons andUƟlity 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 requiredby a Lender), including coverage for debris removal and the enforcement of any Applicable Requirementsrequiring the upgrading, demoliƟon, reconstrucƟon orreplacement of any porƟon of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuaƟon provision in lieu of any coinsurance clause, waiver of subrogaƟon, and inflaƟon guard protecƟon causing an increase in the annual property insurance coverage amount by a factor of notless than the adjustedU.S. Department of Labor Consumer Price Index for All Urban Consumers forthe city nearest to where the Premises are located. Ifsuch insurance coverage has a deducƟble clause, the deducƟble amountshall not exceed $5,000 per occurrence.
(b) Rental Value. Lessorshall also obtain and keep in force a policy or policies in 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 ("RentalValue 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 reflectthe projected Rent otherwise payable by Lessee,for the next 12month 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 Shopping Centerif said increase is caused by Lessee's acts, omissions, use or occupancy of the Premises. (d) Lessee's Improvements. Since Lessor is the Insuring Party, Lessor shall not be requiredto insure Lessee OwnedAlteraƟons 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 notto exceed $1,000 per occurrence. The proceeds fromany such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned AlteraƟons and UƟlity InstallaƟons.
(b) Business InterrupƟon. Lessee shall obtain andmaintain 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 access to the Premises as a result of such perils. (c) Worker's CompensaƟon Insurance. Lessee shall obtain andmaintain 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. (d) No RepresentaƟon of Adequate Coverage. Lessormakes no representaƟon thatthe limits or forms of coverage of insurance specified herein are adequate to cover Lessee's property, business operaƟons or obligaƟons underthis Lease.
8.5 Insurance Policies. Insurance required herein shall be by companies maintaining during the policy terma "General Policyholders RaƟng" of atleast A-, VII, asset forth in the most current issue of "Best's Insurance Guide", or such otherraƟng as may be required by a Lender. Lessee shall not do or permit to be done anythingwhich 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 30 days prior wriƩen noƟce to Lessor. Lessee shall, at least 10 days prior to the expiraƟon of such 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 amountshall 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 failto procure and maintain the insurance requiredto 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 incidentto the perils required 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, asthe case may be,so long asthe insurance is notinvalidated 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 ofthe 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 orinvitees. If any acƟon or proceeding is brought against Lessor by reason of any of the foregoingmaƩers, 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 Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor norits agents shall be liable under any circumstances for: (i) injury or damage tothe 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, whether such damage or injury is caused by or results from fire,steam, electricity, gas, water or rain, indoor air quality, the presence of mold orfrom the breakage, leakage, obstrucƟon or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC orlighƟng fixtures, orfrom any other cause, whether the said injury or damage results fromcondiƟons arising upon the Premises or upon other porƟons ofthe building of which the Premises are a part, or from othersources 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 Shopping Center, or (iii) injury toLessee's business or for any loss ofincome or profit therefrom.
Instead, itis intended 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 tomaintain pursuant to the provisions of paragraph 8.
8.9 Failure to Provide Insurance. Lessee acknowledges that any failure on its part to obtain or maintain the insurance required herein will expose Lessorto risks and potenƟally cause Lessor to incur costs not contemplated by this Lease, the extent of whichwill be extremely difficult to ascertain. Accordingly, for any month or porƟon thereofthat Lessee does notmaintain the required insurance and/or does not provide Lessor with the requiredbinders 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 equalto 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 addiƟonalrisk/costs that Lessor will incur by reason of Lessee's failure tomaintain the required insurance. Such increase in Base Rent shall in no event consƟtute a waiver of Lessee's Default or Breach with respect to the failure to maintain such insurance, preventthe exercise of any of the otherrights 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 ParƟalDamage" shall mean damage or destrucƟon tothe improvements on the Premises, other than Lessee Owned AlteraƟons andUƟlity InstallaƟons, which can reasonably be repairedin 3 months orless from the date of the damage or destrucƟon, and the cost thereof does not exceed a sumequal to 6month's Base Rent. Lessor shall noƟfy Lessee in wriƟng within 30 days fromthe date of the damage or destrucƟon asto whether or notthe 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 andUƟlity InstallaƟons and Trade Fixtures, which cannotreasonably be repaired in 3 months orless from the date of the damage or destrucƟon and/orthe cost thereof exceeds a sum equalto 6 month's Base Rent. Lessorshall 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. (c) "Insured Loss" shall mean damage or destrucƟon to improvements on the Premises, other than LesseeOwned AlteraƟons andUƟlity InstallaƟons and Trade Fixtures, which was caused by an event required to be covered by the insurance described in 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, debrisremoval and upgrading required by the operaƟonof 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 underthe Premises or Common Areas which requiresrestoraƟon.
9.2 ParƟal Damage - Insured Loss. If a Premises ParƟal Damage thatis an Insured Loss occurs, then Lessorshall, at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or LesseeOwned 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 Replacement Cost of which is $10,000 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 tothe fact that, by reason of the unique nature of the improvements, full Replacement Cost insurance coverage was not commercially reasonable and available, Lessorshall have no obligaƟon to pay forthe shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the fundsto cover same, or adequate assurance thereof, within 10 days following receipt ofwriƩen noƟce ofsuch shortage and requesttherefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairsshall complete themas soon as reasonably possible and this Lease shall remain in full force and effect. Ifsuch 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 fullforce and effect, or (ii) have this Lease terminate 30 days thereaŌer. 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 repairsif made by either Party.
9.3 ParƟal Damage - Uninsured Loss. If a Premises ParƟal Damage thatis 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) repairsuch damage assoon as reasonably possible at Lessor's expense (subject to reimbursement pursuant toParagraph 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 rightwithin 10 days aŌer receipt of the terminaƟon noƟce to give wriƩen noƟce to Lessor of Lessee's commitmentto pay forthe repair of such damage withoutreimbursement 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 as reasonably possible aŌer the required funds are available. If Lessee does not make the required commitment, this Lease shallterminate 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 torecover Lessor's damages fromLessee, 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 days following the date of occurrence ofsuch damage by giving a wriƩen terminaƟon noƟce to Lessee within 30 days aŌer the date of occurrence of such 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 tomake the repairs on or before the earlier of (i) the date which is 10 days aŌer Lessee'sreceipt 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 assoon as reasonably possible and this Lease shall conƟnue in full force and effect. If Lessee failsto 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 Damage to Shopping Center. In the event of any damage or destrucƟon to other porƟons of the Building or to any other buildings in the Shopping Center, whether insured or uninsured (and whether or not there is also damage or destrucƟon to the Premises), which cannot reasonably be repaired in 6 months orless from the date of the damage or destrucƟon, Lessor may either (i) repairsuch damage or destrucƟon as soon as reasonably possible without expense to Lessee, in which eventthis 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 or destrucƟon. Such terminaƟon shall be effecƟve 60 days following the date ofsuch noƟce.
9.7 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 Base Rent payable by Lessee for the period required for the repair,remediaƟon or restoraƟonof such damage shall be abated in proporƟon to the degree to which Lessee's use of the Premisesis impaired, but notto 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 Lessorshall be obligated to repair or restore the Premises and does not commence, in a substanƟal andmeaningful way, such repair or restoraƟon within 90 days aŌersuch obligaƟon shall accrue, Lessee may, at any Ɵme prior tothe commencement ofsuch 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 notless than 60 daysfollowing the giving of such noƟce. If Lessee givessuch noƟce and such repair or restoraƟonis not commenced within 30 days thereaŌer, this Lease shall terminate as of the date specified in said noƟce. If the repair or restoraƟonis commenced within such 30 days, this Lease shall conƟnue in full force and effect. "Commence" shall mean eitherthe uncondiƟonal authorizaƟon of the preparaƟon ofthe required plans, orthe beginning of the actual work on the Premises, whichever first occurs.
9.8 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 notthen required tobe, used by Lessor.
10. Real Property Taxes. See Paragraph 62
10.1 DefiniƟon. As used herein,the term "Real Property Taxes" shall include any form of assessment; real estate, general,special, ordinary or extraordinary, orrental 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 Shopping Center, Lessor's rightto other income therefrom, and/or Lessor's business of leasing, by any authority having the direct orindirect power to tax and where the funds are generated with reference to the Shopping Center address. The term "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 termof this Lease, including but not limited to, a change in the ownership of the Shopping Center, (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. In calculaƟng Real Property Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be included in the calculaƟon of Real Property Taxesfor such calendar year based upon the number of days which such calendar year and tax year have in common.
10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessorshall pay the Real Property Taxes applicable to the Building Parcel Shopping Center, and said paymentsshall be included in the calculaƟon of Common Area OperaƟng Expensesin accordance with the provisions of Paragraph 4.2.
10.3 AddiƟonal Improvements. Common AreaOperaƟng 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 Shopping Center by otherlessees or by Lessorfor the exclusive enjoyment ofsuch other lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the Ɵme Common Area OperaƟng Expenses are payable under Paragraph 4.2,the enƟrety of any increase in Real Property Taxes if assessed solely by reasonof AlteraƟons, Trade Fixtures orUƟlity InstallaƟons placed upon the Premises by Lessee or at Lessee'srequest, or by reason of any alteraƟons or improvements to the Premises made by Lessor subsequent tothe execuƟon ofthis Lease by the ParƟes.
10.4 Joint Assessment. If theBuilding is notseparately assessed, Real Property Taxes allocated to the Building shall be an equitable proporƟon of theReal Property Taxes for all of the land and improvements includedwithin the tax parcel assessed, such proporƟon to be determined by Lessor from the respecƟve valuaƟons assigned in the assessor's work sheets or such otherinformaƟon as may be reasonably available. Lessor's reasonable determinaƟon thereof, in good faith,shall be conclusive.
10.5 Personal Property Taxes. Lessee shall pay priorto 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's said property shall be assessed with Lessor's real 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. See Paragraph 56.
11.1 Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other uƟliƟes and services supplied to the Premises, together with any taxes thereon. To the extent any such uƟliƟes and/orservices are notseparately metered, Lessee shall pay Lessee's Share thereof in accordance with Paragraph 4.2. Notwithstanding the provisions of Paragraph 4.2, if at any Ɵme in Lessor's sole judgment, Lessor determines that Lessee is using a disproporƟonate amount of water, electricity or other commonly metered uƟliƟes, or that Lessee is generaƟng such a large volume of trash as to require an increase in the size of the trash receptacle and/or an increase in the number of Ɵmes permonth that it is empƟed, then Lessor may increase Lessee's Base Rent by an amount equal to such increased costs. 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 orservice due to riot,strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor'sreasonable control or in cooperaƟon with governmentalrequest or direcƟons.
11.2 Within fiŌeen days of Lessor's wriƩen request, Lessee agrees to deliver toLessor such informaƟon, documents and/or authorizaƟon as Lessor needsin order for Lessor to comply with new or exisƟng Applicable Requirements relaƟng to commercial building energy usage,raƟngs, and/or the reporƟng thereof.
12. Assignment and Subleƫng. See Paragraph 65
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") or sublet 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 itsstock is publicly traded on a naƟonalstock 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, orseries 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 suchNet Worth asit was represented atthe Ɵme ofthe execuƟon ofthis Lease or atthe Ɵme of the most recent assignmentto which Lessor has consented, or asit exists immediately prior to said transacƟon ortransacƟons consƟtuƟng such reducƟon, whichever was oris greater, shall be considered an assignment of this Lease to which Lessor may withhold its consent. "Net Worth of Lessee" shall mean the networth of Lessee (excluding any guarantors) established under generally accepted accounƟng principles.
(d) An assignment or subleƫng without consent shall, at Lessor's opƟon, be a Default curable aŌer noƟce per Paragraph 13.1(d), or a non-curable Breach without the necessity of any noƟce and grace period. If Lessor elects to treat such unapproved assignment or subleƫng as a non-curable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 days wriƩen noƟce, increase the monthly Base Rent and Percentage Rent Rate to 110% of the Base Rent and Percentage Rent Rate then in effect. Further, in the event of such Breachand rental adjustment, (i) the purchase price of any opƟon to purchase the Premises held by Lessee shall be subject tosimilar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustmentsscheduled during the remainder of the Lease term shall be increasedto 110% ofthe scheduled adjusted rent.
(e) Lessee'sremedy for any breachof Paragraph 12.1 by Lessor shall be limited to compensatory damages and/or injuncƟve relief. (f) Lessor may reasonably withhold consentto 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, i.e. 20 square feet orless, 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 or subleƫng shall : (i) be effecƟve without the express wriƩen assumpƟon by such assignee orsublessee of the obligaƟons of Lessee underthis 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 ofsuch assignment northe acceptance of Rent or performance shall consƟtute a waiver or estoppel of Lessor's rightto exercise itsremedies for Lessee's Default or Breach. (c) Lessor's consent to any assignment or subleƫng shall not consƟtute a consent to any subsequent assignment or subleƫng. (d) In the event of any Default or Breach by Lessee, Lessormay 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 orsubleƫng shall be in wriƟng, accompanied by informaƟon relevant to Lessor's determinaƟon asto the financial and operaƟonal responsibility and appropriateness of the proposed assignee or sublessee, including but not limited tothe intended use and/orrequired 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 tobe observed or performed by Lessee during the term ofsaid assignment or sublease, other than such obligaƟons as are contrary to orinconsistent with provisions of an assignment orsublease to which Lessor has specifically consented to in wriƟng. (g) Lessor's consentto any assignment orsubleƫng shall nottransfer to the assignee or sublessee any OpƟon granted to the original Lessee by this Lease unless such transfer is specifically consented to by Lessorin 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 underthis Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest in all Rent payable on any sublease, and Lessormay collect such 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 of such 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 fromLessor 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 whethersuch Breach exists, notwithstanding any claim from Lessee tothe contrary.
(b) In the event of a Breach by Lessee, Lessor may, atits opƟon, require sublessee to aƩorn to Lessor, in which event Lessor shall undertake the obligaƟons of the sublessor under such sublease from the Ɵme of the exercise ofsaid 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) Lessorshall deliver a copy of any noƟce of Default or Breach by Lessee to the sublessee, who shall have the rightto cure the Default of Lesseewithin the grace period, if any, specified in such noƟce. The sublessee shall have a right ofreimbursement and offsetfrom 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 andRegulaƟons 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 vacaƟng or abandonment of the Premises. Lessee shall be deemed to have vacated the Premises if Lessee ceases to conƟnuously operate its business in the Premises for a period of 5 consecuƟve days. (b) The failure of Lessee to make any payment of Rent or any Security Depositrequired to be made by Lessee hereunder, whether to Lessor or to a third party, when due, toprovide reasonable evidence ofinsurance 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 days following wriƩen noƟce to Lessee. THE
ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENTOR SECURITY DEPOSIT SHALLNOT CONSTITUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUDING LESSOR'S RIGHT TO RECOVER POSSESSIONOF THE PREMISES. (c) The failure of Lessee to allow Lessor and/orits agents accessto the Premises orthe 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 eventthat Lessee commits waste, a nuisance or an illegal acƟvity a second Ɵme then,the Lessor may elect to treatsuch conduct as a non-curable Breach ratherthan 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 orsubleƫng, (iv) an Estoppel CerƟficate or financialstatements, (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 ofthis Lease, where any such failure conƟnues for a period of 10 days following 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, otherthan those described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default conƟnues for a period of 30 days aŌer wriƩen noƟce; provided, however, that if the nature of Lessee's Default is such 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 forthe 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 orreceiver to take possession of substanƟally all of Lessee's assetslocated at the Premises or of Lessee's interestin this Lease, where possession is notrestored to Lessee within 30 days; or(iv) the aƩachment, execuƟon or other judicialseizure of substanƟally all of Lessee's assetslocated at the Premises or of Lessee'sinterest in this Lease, where such seizure is not discharged within 30 days; provided, however, in the eventthat 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) Ifthe 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'sbecoming insolvent or the subject of a bankruptcy filing, (iv) a Guarantor'srefusal 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 exceeds the 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, atits opƟon, performsuch 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 expensesincurred by Lessorin such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor may, with or without further noƟce or demand, and withoutlimiƟng Lessor in the exercise of any right or remedy which Lessor may have by reason of such Breach:
(a) Terminate Lessee'sright to possession ofthe 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 fromLessee: (i) the unpaid Rent which had been earned atthe 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 unƟlthe Ɵme of award exceeds the amount of such rental lossthat the Lessee proves could have been reasonably avoided; (iii)the worth atthe 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 worthat the Ɵme of award of the amount referred to in provision (iii) ofthe immediately preceding sentence shall be computed by discounƟng such amount at the discountrate 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'sright to recover any damages to 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 topay rent or quit, or to performor quit given toLessee 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 theDefault within the greater of the two such grace periodsshall consƟtute both an unlawful detainer and a Breach of this Lease enƟtling Lessor tothe 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 as it becomes due, in which event Lessee may sublet or assign, subject only to reasonable limitaƟons. Acts ofmaintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor's interests, shall not consƟtute a terminaƟon of the Lessee'sright to possession. (c) Pursue any other remedy now or hereaŌer available under the laws or judicial decisions ofthe state wherein the Premises are located. The expiraƟon or terminaƟon of this Lease and/or the terminaƟon of Lessee's right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as tomaƩers occurring or accruing during the termhereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture. Any agreementfor free or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed by Lessor, or for the giving or paying by Lessor to orfor Lessee of any cash or other bonus, inducement or consideraƟon for Lessee's entering into this Lease, all ofwhich 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 ofthis 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 atthe Ɵme ofsuch 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 costs include, 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 amount shall 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 of such 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 preventthe exercise of any of the otherrights 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 ofthis Lease to the contrary, Base Rentshall, 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 atthe rate of 10% per annum butshall not exceed the maximum rate allowed by law. Interestis payable in addiƟon to the potenƟal late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor. See Paragraph 69
(a) NoƟce of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable Ɵme to performan 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 addressshall 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 is such that more than 30 days are reasonably required for its performance, then Lessorshall 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 eventthat neither Lessor nor Lender cures said breach within 30 days aŌer receipt ofsaid noƟce, or if having commenced said cure they do not diligently pursue itto compleƟon, then Lessee may elect tocure said breach at Lessee's expense and offset from Rentthe actual and reasonable cost to perform such cure, provided, however, that such offsetshall not exceed an amount equalto the greater of one month's Base Rent or the SecurityDeposit, reserving Lessee'sright to reimbursement fromLessor 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 orsold under the threat of the exercise of said power (collecƟvely "CondemnaƟon"), this Lease shall terminate as to the parttaken as of the date the condemning authority takes Ɵtle or possession, whichever first occurs. If more than 10% of the floor area of the Premises, or more than 25% of the parking spaces situated within the parking area, is taken by CondemnaƟon, Lessee may, at Lessee's opƟon, to be exercised in wriƟngwithin 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 takes such 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 thatthe Base Rentshall 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, whether such 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's relocaƟon expenses, loss of business goodwill and/or Trade Fixtures, withoutregard to whether or not this Lease is terminated pursuantto the provisions of this Paragraph. All AlteraƟons andUƟlity InstallaƟons made tothe 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 thatthis 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 1.13 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 Shopping Center, (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 Brokers in effect at the Ɵme the Lease was executed. The provisions of this paragraph are intended to supersede the provisions of any earlier agreement to the contrary.
15.2 AssumpƟon of ObligaƟons. Any buyer or transferee of Lessor's interest in this Lease shall be deemed to have assumed Lessor's obligaƟon hereunder. Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.13, 15, 22 and 31. If Lessor fails topay 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 Brokermay send wriƩen noƟce to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days aŌersaid noƟce, Lessee shall pay said moniesto 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 tothe 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 Agents is 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 againstliability 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 respectthereto.
16. Estoppel CerƟficates.
(a) Each Party (as "Responding Party") shall within 10 days aŌer wriƩen noƟce fromthe other Party (the "RequesƟng Party") execute, acknowledge and deliver to the RequesƟng Party a statementin wriƟng in formsimilar to the then most current "Estoppel CerƟficate" form published by AIR CRE, plus such addiƟonal informaƟon, confirmaƟon and/or statements as may be reasonably requested by the RequesƟng Party. (b) If the Responding Party shall fail to execute or deliver the Estoppel CerƟficate within such 10 day period, the RequesƟng Partymay execute an Estoppel CerƟficate staƟng that: (i) the Lease is in full force and effect withoutmodificaƟon 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 is the RequesƟng Party, not more than one month'srent has been paid in advance. ProspecƟve purchasers and encumbrancersmay rely upon the RequesƟng Party's Estoppel CerƟficate, and theResponding Party shall be estopped from denying the truth of the facts contained in said CerƟficate. In addiƟon, Lessee acknowledgesthat 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 toexecute and/or deliver a requested Estoppel CerƟficate in a Ɵmely fashion the monthly Base Rent shall be automaƟcally increased, without any requirement for noƟce toLessee, by an amount equalto 10% of the then exisƟng Base Rent or $100, whicheveris greater for remainder of the Lease. The ParƟes agree that such increase in Base Rent represents fair and reasonable compensaƟon forthe addiƟonal risk/costs that Lessor will incur by reason of Lessee'sfailure to provide the Estoppel CerƟficate. Such increase in Base Rentshall in no event consƟtute a waiver of Lessee's Default or Breach with respectto the failure to provide the Estoppel CerƟficate nor preventthe exercise of any of the otherrights and remedies granted hereunder. (c) If Lessor desires to finance, refinance, or sellthe 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 financialstatements as may be reasonably required by such lender or purchaser, including but notlimited to Lessee's financialstatements for the past 3 years. All such financialstatements shall 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 theƟme in quesƟon of the fee Ɵtle to the Premises, or, if this is a sublease, of the Lessee'sinterest in the priorlease. In the event of a transfer of Lessor's Ɵtle or interest in the Premises orthis Lease, Lessor shall deliver to the transfereeor assignee (in cash or by credit) any unused SecurityDeposit held by Lessor. Upon such transfer or assignment and delivery of the SecurityDeposit, as aforesaid,the prior Lessor shall be relieved of all liability with respectto the obligaƟons and/or covenants under this Lease thereaŌer tobe performed by the Lessor. Subjectto the foregoing, the obligaƟons and/or covenantsin 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 ofthis 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 tothe Project, and to no other assets of Lessor, for the saƟsfacƟon of any liability of Lessor with respectto this Lease, and shall not seek recourse against Lessor's partners,members, directors, officers or shareholders, or any of their personal assetsfor such saƟsfacƟon.
21. Time of Essence. Time is of the essence with respectto the performance of all obligaƟons tobe 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 respectto any maƩer menƟoned herein, and no other prior or contemporaneous agreement or understanding shall be effecƟve. Lessor and Lessee each represents and warrants tothe Brokers that it has made, and is relying solely upon, its own invesƟgaƟon as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect toany default or breach hereof by either Party.
23. NoƟces.
23.1 NoƟce Requirements. All noƟcesrequired or permiƩed by this Lease or applicable law shall be in wriƟng andmay be delivered in person (by hand or by courier) ormay be sent by regular, cerƟfied orregistered mail orU.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, or by email, and shall be deemed sufficiently given if served in a mannerspecified in this Paragraph 23. The addresses noted in Paragraph70 adjacentto a Party'ssignature on this Lease shall be that Party's address for delivery or mailing of noƟces. Either Partymay by wriƩen noƟce to the other specify a different addressfor 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 Lessorshall be concurrently transmiƩed to such party or parƟes atsuch 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 is shown, the postmark thereon. If sent by regular mail the noƟce shall be deemed given 72 hours aŌer the same is addressed asrequired herein andmailed 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), theNoƟce must be sent by CerƟfied Mail (return receiptrequested), Express Mail (signature required), courier (signature required) or some othermethodology that provides a receipt establishing the date the noƟce wasreceived 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 Breachby Lessee of the same or of any other term, covenant or condiƟon hereof. Lessor's consent to, or approval of, any act shall 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 estoppelto 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 condiƟonsshall be of no force or effect whatsoever unless specifically agreed to in wriƟng by Lessor at or before the Ɵme of deposit ofsuch payment.
(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS RELATED THERETOAND 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 agentsin the transacƟon. Lessor and Lessee acknowledge being advised by the Brokersin this transacƟon, as follows:
(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 orsubagent has the 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 toreveal to either Party any confidenƟal informaƟon obtained from the other Party which does not involve the affirmaƟve duƟes setforth 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 agentmay receive compensaƟon for services rendered, eitherin 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 ofreasonable skills and care in performance ofthe 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 notinvolve the affirmaƟve duƟesset forth above. (iii) Agent RepresenƟng Both Lessor and Lessee. A real estate agent, either acƟng directly or through one ormore associate licensees, 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 obligaƟonsto 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 as stated 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 willingnessto accept a rent lessthan the lisƟng rent or Lessee's willingnessto pay rent greaterthan 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 protecttheir 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 toany default or breachhereof by either Party. The ParƟes agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission relaƟng tothis 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/orlegal 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 partthereof beyond the expiraƟon or terminaƟon of this Lease. At or prior to the expiraƟon or terminaƟon of this Lease Lessee shall deliver exclusive possession ofthe Premises toLessor. For purposes ofthis provision and Paragraph 13.1(a), exclusive possession shall mean that Lessee shall have vacated the Premises, removed all of its personal property therefrom and that the Premises have been returned in the condiƟon specified in this Lease. In the event that Lessee does not deliver exclusive possession to Lessor asspecified above, then Lessor's damages during any holdover period shall be computed at the amount of the Rent (as defined in Paragraph 4.1) due during the last full month before the expiraƟon orterminaƟon of this Lease (disregarding any temporary abatement of Rent that may have been in effect), but with Base Rent and Percentage Rent Rate being 150% ofthe Base Rent and Percentage Rent Rate payable during such last full month. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.
27. CumulaƟve Remedies. No remedy or elecƟon hereundershall be deemed exclusive but shall, wherever possible, be cumulaƟve with all other remedies atlaw 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 its fair meaning as a whole, as if 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 heretoconcerning this Lease shall be iniƟated in the county in which the Premises are located. Signatures to this Lease accomplished by means of electronic signature or similar technology shall be legal and binding.
30. SubordinaƟon; AƩornment; Non-Disturbance. See Paragraph 66
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 agreesthat 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 electto have this Lease and/or any OpƟon granted hereby superiorto the lien of its Security Device by giving wriƩen noƟce thereof toLessee, whereupon this Lease and such OpƟonsshall be deemed priorto such SecurityDevice, notwithstanding the relaƟve dates of the documentaƟon orrecordaƟon thereof.
30.2 AƩornment. In the eventthat 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 tothe 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, atthe elecƟon of the new owner, this Lease will automaƟcally become a new lease between Lessee and such new owner, and (ii) Lessorshall thereaŌer be relieved of any further obligaƟons hereunder and such new owner shall assume all of Lessor's obligaƟons, exceptthat such new ownershall not: (a) be liable for any act or omission of any prior lessor or with respectto events occurring priorto acquisiƟon of ownership; (b) be subjectto any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month's rent, or(d) be liable for the return of any security deposit paid to any priorlessor which was not paid or credited to such new owner.
30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor aŌerthe execuƟon ofthis Lease, Lessee's subordinaƟon 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 Breachhereof and aƩornsto the record owner of the Premises. Further, within 60 days aŌer the execuƟon of this Lease, Lessorshall, 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 Lessoris unable to provide the Non-Disturbance Agreementwithin said 60 days, then Lessee may, at Lessee's opƟon, directly contact Lender and aƩempt to negoƟate forthe execuƟon and delivery of a Non-DisturbanceAgreement.
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 requestfrom Lessor or a Lender in connecƟon with a sale, financing or refinancing of the Premises, Lessee and Lessorshall 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 appealthereon, 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, withoutlimitaƟon, a Party or Broker who substanƟally obtains or defeats the relief sought, as the case may be, whether by compromise, seƩlement, judgment, or the abandonment by the other Party or Broker of its claimor 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' fees reasonably incurred. In addiƟon, Lessor shall be enƟtled to aƩorneys' fees, costs and expenses incurred in the preparaƟon and service of noƟces of Default and consultaƟonsin connecƟon therewith, whether or not a legal acƟon is subsequently commenced in connecƟon with such Default or resulƟng Breach ($200 is a reasonable minimumper occurrence forsuch services and consultaƟon).
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall have the right toenter the Premises at any Ɵme, in the case of an emergency, and otherwise at reasonable Ɵmes aŌer reasonable prior noƟce during Lessee's business hours forthe purpose of showing 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 andmaintaining of uƟliƟes, services, pipes and conduitsthrough the Premises and/or other premises aslong as there is no material adverse effect on Lessee's use of the Premises. All such acƟviƟesshall be without abatement of rent or liability toLessee.
33. AucƟons. Lessee shall not conduct, nor permitto be conducted, any aucƟon upon the Premises without Lessor's prior wriƩen consent, which consent shall be granted or denied at Lessor's sole discreƟon.
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. All signs must comply with all Applicable Requirements. Lessee shall not place, construct, or maintain on the glass panes or supports of the show windows of the Premises, the doors, exterior walls or the roof of the Building, or anywhere else within the Shopping Center outside of the Premises, or on any interior porƟons of the Premises that are visible from the exterior of the Premises, any signs, adverƟsements, names, insignia, trademarks, descripƟve material or any other items without Lessor's prior wriƩen consent, which consent shall be granted or denied at Lessor's sole discreƟon. Lessor shall designate the size,shape, color, design, and locaƟon of all exterior sign(s) to be installed by Lessee, and Lessee shall, at Lessee's sole cost and expense, fabricate, construct and install all such sign(s) in full compliance with Lessor's designaƟon and in accordance with the Sign Criteria for the Shopping Center aƩached hereto, if any. Lessee agrees tosubmit plans and specificaƟonsfor Lessee's sign(s) for Lessor's wriƩen approval within 30 days aŌer the full execuƟon hereof and to install such sign(s) prior to opening for business at the Premises.
Lessor, at Lessee's cost, may remove any item placed, constructed or maintained in, upon or aboutthe Premises or Shopping Center which does not comply with this paragraph. In the event there is a pole, pylon or monument sign for the Shopping Center, Lessor shall have the right, but notthe obligaƟon, to install leƩering designaƟng Lessee's business on such sign, at Lessee's expense, with Lessor's approval of locaƟon, size, style and color.
All signsthat are permanently aƩached to the Premises or Building shall become the property of Lessor at the expiraƟon or earlier terminaƟon hereof; provided, however, that Lessee shall promptly remove allsuch signs if Lessorso elects, and Lessee shall promptly repair all damage caused by such removal. Lessee shall not place, construct or maintain in, upon or about the Premises any search lights, flashing lights, loudspeakers, phonographs or other visual or audiomedia. See Paragraph 57
35. TerminaƟon; Merger. Unlessspecifically stated otherwise in wriƟng by Lessor, the voluntary or othersurrender 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 Lessormay elect to conƟnue any one or all exisƟng subtenancies. Lessor's failure within 10 days following any such event toelect to the contrary by wriƩen noƟce to the holder of any such lesserinterest, shall consƟtute Lessor's elecƟon to have such event consƟtute the terminaƟon of such 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 toan act by orfor the other Party, such consent shall not be unreasonably withheld or delayed. In those expressinstances where consent is within the sole discreƟon of a party, the party shall have no obligaƟon to adhere to a standard ofreasonableness. Lessor's actual reasonable costs and expenses (including but notlimited 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 notlimited to consentsto an assignment, a subleƫng or the presence or use of aHazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporƟng documentaƟon therefor. Lessor's consent to any act, assignment orsubleƫng shall not consƟtute an acknowledgment that no Default or Breachby Lessee ofthis Lease exists, norshall 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 consentshall 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 maƩerfor 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 reasonsin 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 mostrecently published by AIR CRE.
37.2 Default. It shall consƟtute a Default of the Lessee if anyGuarantor fails orrefuses, 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 corporateGuarantor, 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 thatthe guaranty issƟll in effect.
38. Quiet Possession. Subjectto payment by Lessee of the Rent and performance of all of the covenants, condiƟons and provisions on Lessee's part tobe 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 provisionsshall apply.
39.1 DefiniƟon. "OpƟon" shall mean: (a) the right to extend orreduce the termof 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 firstrefusal or first offerto lease eitherthe Premises or other property of Lessor; (c) the right to purchase, the right of first offer topurchase or the right of first refusalto purchase the Premises or other property of Lessor.
39.2 OpƟons Personal To Original Lessee. Any OpƟon granted to Lessee in this Lease is personalto the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only while the original Lessee isin full possession of the Premises and, if requested by Lessor, with Lessee cerƟfying that Lessee has no intenƟon of thereaŌer assigning orsubleƫng.
39.3 MulƟpleOpƟons. In the event that Lessee has any mulƟpleOpƟons to extend orrenew 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 theƟme 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 theOpƟon. (b) The period of Ɵmewithin which anOpƟon may be exercised shall not be extended or enlarged by reason of Lessee'sinability to exercise anOpƟon because of the provisions of Paragraph 39.4(a). (c) AnOpƟon 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 tothe commencement of the extended term or compleƟon of the purchase, (i) Lessee failsto pay Rentfor a period of 30 days aŌer such 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 notinclude the cost of guard service or other securitymeasures, and that Lessorshall have no obligaƟon whatsoever to provide same. Lessee assumes all responsibility forthe protecƟon of the Premises, Lessee, its agents and invitees and their property from the acts of third parƟes. While Lessor does not assume any responsibility to provide any security measures or any liability for failure to provide security measures or for any inadequacy thereof, Lessor shall have the authority to insƟtute or conƟnue such securitymeasures as Lessor in its sole discreƟon deems necessary or appropriate from Ɵme to Ɵme, the cost and expenses of which shall be considered Common Area OperaƟng Expenses. To the degree directed by Lessor, Lessee shall coordinate its security measures atthe Premises with the security measures insƟtuted by Lessor, if any.
41. ReservaƟons. Lessor reserves the right: (i) togrant, 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, and (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. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such rights.
42. Building Planning. Lessorshall have the right at any Ɵme or Ɵmes, upon giving Lessee not lessthan 60 days prior wriƩen noƟce, to provide and furnish Lessee with space of comparable visibility located elsewhere within any of the buildings within the Shopping Center and to move Lessee into such new space, provided thatthe usable area of such new space is not lessthan the usable area of the Premises and provided that all of Lessee's reasonable out-of-pocket moving expenses (including but not limited to the cost ofmoving Lessee's personal property, the cost of reprinƟng Lessee'sstaƟonery or other business materials with the new address, and the cost to relocate and reinstall tenant improvements and Lessee's telecommunicaƟons and computer equipment) shall be paid by Lessor, and provided further that Lessor shall construct at Lessor's expense such improvementsto such new space as shall be necessary to place itin a condiƟon that is substanƟally comparable to the Premises. Except as provided in the immediately preceding sentence, Lessor shall have no obligaƟon to improve such space or pay any other expensesincurred by Lessee as a result of such relocaƟon. On such relocaƟon, the terms and condiƟons ofthis Lease shall remain in full force and effect, including but not limited to the Base Rent payable hereunder and Lessee's Share (even if the usable area of such relocated Premisesis in excess of the usable area of the Premises), except thatthe Premises shall be in such new locaƟon. Upon Lessor's request, the ParƟesshall execute an amendment to this Lease in form required by Lessor confirming the relocaƟon of the Premisesto such new locaƟon. If the new space does not meet with Lessee's approval, which approval Lessee shall give or withhold in accordance with Paragraph 36, Lessee shall have the right to cancelthis Lease by giving Lessor wriƩen noƟce thereof within 15 days of receipt of Lessor's noƟficaƟon of its intent to relocate Lessee. Lessee'sfailure to give such noƟce within such 15 day period shall be deemed Lessee's approval of the new space. If Ɵmely noƟce is given by Lessee, then this Lease shall terminate unless Lessor rescinds Lessor's prior noƟce of its intentto relocate Lessee within 10 days aŌer Lessor's receipt of Lessee's noƟce of cancellaƟon.
43. Performance Under Protest. If at any Ɵme a dispute shall arise as to any amount or sumof 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 tomake payment "under protest" and such paymentshall not be regarded as a voluntary payment and there shallsurvive the right on the part ofsaid Party toinsƟtute suit for recovery of such sum. If it shall be adjudged thatthere was no legal obligaƟon on the part of said Party to pay such sum or any partthereof, said Party shall be enƟtled to recover such sum orso much thereof as it was notlegally required topay. A Party who does notiniƟate suit for the recovery of sums paid "under protest" within 6 monthsshall be deemed to have waived itsright to protestsuch payment.
44. Authority; MulƟple ParƟes; ExecuƟon.
(a) If either Party hereto is a corporaƟon, trust, limited liability company, partnership, orsimilar enƟty, each individual execuƟng this Lease on behalf of such enƟty represents and warrantsthat he or she is duly authorized to execute and deliverthis 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 ofthe named Lessees, and Lessor may rely on the same as if 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 together shall consƟtute one and the same instrument.
45. Conflict. Any conflict between the printed provisions of this Lease and the typewriƩen or handwriƩen provisions shall be controlled by the typewriƩen or handwriƩen provisions. See Paragraph 67.
46. Offer. PreparaƟon of this Lease by either party or their agent and submission ofsame to the other Party shall not be deemed an offer to lease to the other Party. This Lease is notintended to be binding unƟl executed and delivered by all ParƟes hereto.
47. Amendments. This Leasemay be modified only in wriƟng, signed by the ParƟes in interest at the Ɵme of the modificaƟon. As long as they do not materially change Lessee's obligaƟons hereunder, Lessee agrees tomake such reasonable non-monetary modificaƟons to this Lease as may be reasonably required by a Lender in connecƟon with the obtaining of normal financing or refinancing of the Premises.
48. Waiver of Jury Trial. THE PARTIES HEREBYWAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTYOR ARISING OUT OF THIS AGREEMENT.
49. ArbitraƟon of Disputes. An Addendum requiring theArbitraƟon of all disputes between the ParƟes and/or Brokers arising out of this Lease is is not aƩached to this Lease.
50. Accessibility; Americans with DisabiliƟesAct.
(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 notrequire a CASp inspecƟon of the subject premises, the commercial property owner or lessor may not prohibitthe lessee ortenant from obtaining a CASp inspecƟon ofthe subject premises for the occupancy or potenƟal occupancy of the lessee or tenant, if requested by the lessee or tenant. The parƟes shall mutually agree on the arrangements for 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 thatit received a copy of the inspecƟon report at least 48 hours prior to execuƟng this Lease and agreesto 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 acknowledges thatit 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 access inspecƟon cerƟficate toLessee 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's specific use of the Premises, Lessor makes no warranty or representaƟon asto whether or not the Premises comply with ADA or any similar legislaƟon. In the event that Lessee's use of the Premises requires modificaƟons or addiƟons to the Premises in orderto be in compliance with ADA or other accessibility statutes, Lessee agreesto 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 CONTAINEDHEREIN, 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 ANDPURPOSE OF LESSOR AND LESSEE WITHRESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATIONIS MADE BYAIR 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. SEEKADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.
2. RETAINAPPROPRIATE CONSULTANTS TO REVIEWAND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATIONSHOULD INCLUDE BUTNOT BE LIMITED TO: THE POSSIBLE PRESENCEOF HAZARDOUS SUBSTANCES, THE ZONING 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. [SIGNATURES ONFOLLOWING PAGE]
The pparƟes hereto have executed this Lease at the place and on the datesspecified above their respecƟve signatures.
Executed at: _____________________________
On: _____________ , 2023
By LESSOR:
Golden Spring Capital LLC, a California limited liability company By:
Name Printed: Zhenyu Xing,
Title: Manager
Phone:
Fax:
Email:
By:
Name Printed:
Title:
Phone:
Fax:
Email:
Address: See Paragraph 71
Federal IDNo.:
Executed at: ________________________
On: ___________ , 2023
By LESSEE:
City of Murrieta, a municipal corporation
By:
Name Printed: Kim Summers
Title: City Manager
Phone:
Fax:
Email:
By:
ATTESTED:
Name Printed: Cristal McDonald
Title: City Clerk
Phone:
Fax:
Email:
Address: See Paragraph 71
Federal IDNo.:
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
By:_________________________________
Tiffany Israel, City Attorney
BROKER
Harvest Realty Development Inc.
AƩn: Ke Xiao / Jessica Zhang
Title:
Address: See Paragraph 70
Phone:
Fax:
Email:
Federal IDNo.:
Broker DRE License #: 01964500
Agent DRE License #: 02072888 / 01986201
BROKER
Cushman & Wakeϐield of California, Inc.
AƩn: John Gallivan
Title:
Address: See Paragraph 70
Phone:
Fax:
Email:
Federal IDNo.:
Broker DRE License #: 00616335
Agent DRE License #: 01096309
AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.
RENT ADJUSTMENT(S)
(ORIGINAL TERM)
STANDARD LEASE ADDENDUM
Dated: October __, 2023
By and Between
Lessor: Golden Spring Capital LLC, a California limited liability company Lessee: City of Murrieta, a municipal corporation
Property Address: Unit B & C ("Premises") which are part of 24620 Jefferson Ave, Murrieta, CA 92562 ("Building Parcel") which contains a building with 8,404 square feet("Building") ) (street address, city, state, zip)
Paragraph: 51
The monthly Base Rent during theOriginal Term ofthe Lease shall be increased by using the method(s) selected below (check method(s) to be used and fill in appropriately):
I. Consumer Price Index.
a. The monthly Base Rent shall be increased on and every months thereaŌer during theOriginal Term ("CPI Increase Date(s)") commensurate with the increase in the CPI (as herein defined) determined as follows: the monthly Base Rent scheduled for the first month of the Original Termshall be mulƟplied by a fracƟon the denominator of which isthe Base CPI(as herein defined), and the numerator of which is the Comparison CPI (as herein defined). The amount so calculated shall consƟtute the new Base Rent unƟl the next CPI Increase Date, butin no event shall any such new Base Rent be less than the Base Rent forthe month immediately preceding the applicable CPI Increase Date. b. The term "CPI" shall mean the Consumer Price Index of the Bureau of Labor StaƟsƟcs of the U.S. Department of Labor for (select one): CPI W (Urban Wage Earners and Clerical Workers) or CPIU (All Urban Consumers), for (fill in Urban Area): or the area in which the Premisesis located, All Items(1982-1984 = 100). The term "Comparison CPI" shall mean the CPI of the calendar month which is 2 full months prior tothe applicable Original TermCPI Increase Date. The term "Base CPI" shall mean the CPI of the calendar month which is 2 full months prior to the Commencement Date of theOriginal Term.
c. If the compilaƟon and/or publicaƟon of the CPI istransferred to another governmental department, bureau or agency or is disconƟnued, then instead the index most nearly the same as the CPI shall be used to calculate the Base Rentincreases hereunder. If the ParƟes cannot agree on such alternaƟve index,then the maƩershall be submiƩed for decision to the American ArbitraƟon AssociaƟon in accordance with the then rules of said associaƟon and the decision of the arbitrators shall be binding upon the parƟes, with the cost of such arbitraƟon being paid equally by the ParƟes.
II. Fixed Percentage. The monthly Base Rentshall be increased on and every 12 monthsthereaŌer during the Original Term ("Percentage Increase Date(s)") by three percent ( 3.0 %) of the monthly Base Rent scheduled to be paid for the month immediately preceding the applicable Percentage Increase Date. The increases shall occur on the anniversary of the Rent Commencement Date.
III. Fixed Rental Adjustment(s) ("FRA").
The monthly Base Rent shall be increased to the following amounts on the dates set forth below:
On (fill in FRA Adjustment Date(s)): The new Base Rent shall be:
BROKER'S FEE: For each adjustmentin Base Rentspecified above, the Brokersshall be paid a Brokerage Fee in accordance with paragraph 15 of the Lease or if applicable, paragraph 9 of the Sublease.
AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng.
OPTION(S) TO EXTEND TERM
STANDARD LEASE ADDENDUM
Dated: October __, 2023
By and Between
Lessor: Golden Spring Capital LLC, a California limited liability company Lessee: City of Murrieta, a municipal corporation
Property Address: Unit B & C ("Premises") which are part of 24620 Jefferson Ave, Murrieta, CA 92562 ("Building Parcel") which contains a building with 8,404 square feet("Building") ) (street address, city, state, zip)
Paragraph: 52 OPTION(S) TO EXTEND TERM. Subject to the terms, condiƟons and provisions of Paragraph 39, Lessor grants Lessee two (2) opƟon(s) toextend the term ofthe Lease ("ExtensionOpƟon(s)"), with each ExtensionOpƟon being for a term of sixty (60) months, commencing when the prior term expires ("OpƟon Term(s)"). In order to exercise an Extension OpƟon, Lessee must give wriƩen noƟce of such elecƟon to Lessor and Lessormust receive such noƟce at least nine (9) months but not more than twelve (12) months prior tothe date thatthe applicable OpƟon Term would commence, Ɵme being of the essence. If Ɵmely and proper noƟficaƟon of the exercise of an ExtensionOpƟon is not given by Lessee and/or receivedby Lessor, such ExtensionOpƟon shall automaƟcally expire. Notice of exercise of an option shall be made consistent with Paragraph 23.3.Except as specifically modified, the terms, condiƟons and provisions of the Lease shall apply duringOpƟon Terms but the amount of Rent during OpƟon Terms shall be established by using the method(s) selected below (check method(s) to be used and fill in appropriately):
I. Consumer Price Index.
(a) During the OpƟon Term(s)which start(s) on , the monthly Base Rentshall be increased on and every months thereaŌer during such OpƟon Term(s) ("OpƟon Term CPI Increase Date(s)") commensurate with the increase in the OpƟon TermCPI (as herein defined) determined as follows: the monthly Base Rent scheduled forthe month immediately preceding the first occurringOpƟon Term CPI Increase Date shall be mulƟplied by a fracƟon the denominator of which isthe OpƟon Term Base CPI (as herein defined), and the numeratorof which isthe OpƟon Term Comparison CPI (as herein defined). The amount so calculated shall consƟtute the new Base Rent unƟl the next OpƟon Term CPI Increase Date during the applicable OpƟon Term, butin no eventshall any such new Base Rent be less than the BaseRent for themonth immediately preceding the applicableOpƟon Term CPI Increase Date.
(b) The term "OpƟon Term CPI" shall mean the Consumer Price Index of the Bureau of Labor StaƟsƟcs of the U.S. Department of Labor for (select one): CPI W (Urban Wage Earners and Clerical Workers) or CPI U(All Urban Consumers),for (fill in UrbanArea): or the area in which the Premises is located, All Items (1982-1984 = 100). The term"OpƟon Term Comparison CPI" shall mean the CPI of the calendar month which is 2 full months priorto the applicableOpƟon Term CPI Increase Date. The term "OpƟon Term Base CPI" shall mean the CPI of the calendar month which is 2 full months prior to (select one): Commencement Date of the Original Term, start of the applicable OpƟon Term, or (fill in month) .
(c) If compilaƟon and/or publicaƟon of the CPI is transferred to another governmental department, bureau or agency or is disconƟnued, then instead the index most nearly the same as the CPI shall be used to calculate theBase Rent increases hereunder. If the ParƟes cannot agree on such alternaƟve index, then the maƩer shall be submiƩed for decision to the American ArbitraƟon AssociaƟon in accordance with the then rules of said associaƟon and the decision of the arbitrators shall be binding upon the parƟes, with the cost of such arbitraƟon being paid equally by the ParƟes.
II. Fixed Percentage. During the OpƟon Term(s) which start(s) on , the monthly Base Rentshall be increased on and every months thereaŌer during such OpƟon Term(s) ("OpƟon Term Percentage Increase Date(s)") by percent ( %) of the monthly Base Rent scheduled tobe paid for themonth immediately preceding the applicable OpƟon TermPercentage Increase Date.
III. Fair Market Value.
(a) During the OpƟon Term(s)which start(s) on end of the then existing Term , the amount of Rent shall be the amount forecasted to be the fair marketrental value of the Premises during suchOpƟon Term established pursuantto the procedures,terms, assumpƟons and condiƟonsset forth herein ("Fair Market Value"); provided, however, regardless of such Fair Market Value, Base Rent during anOpƟon Term shall not be lessthan the Base Rent scheduled as ofwhen the priorterm expires. StarƟng as of Lessee's exercise of the applicable Extension OpƟon (but not earlier than six (6)months before start of the applicable OpƟon Term), the ParƟes shall for thirty (30) days ("NegoƟaƟon Period") aƩemptto agree upon the Fair Market Value. If during the NegoƟaƟon Periodthe ParƟes do not agree on the Fair Market Value, then the Fair Market Value shall be established pursuantto the procedures setforth herein, which shall be binding. (b) Each Party shall, within fiŌeen (15) days aŌer the end of the NegoƟaƟon Period, in wriƟng submit to the other Party such Party's determinaƟon of the Fair Market Value ("SubmiƩed Value(s)"). If a Party failsto Ɵmely provide a SubmiƩed Value, then the other Party's SubmiƩed Value shall be the Fair Market Value. If both ParƟes Ɵmely provide SubmiƩed Values, then each Party shall, within fiŌeen (15) days aŌer both ParƟes have exchanged SubmiƩed Values, in wriƟng noƟfy the other Party of such Party's selected valuator who shall meet the qualificaƟons set forth herein ("Advocate Valuator(s)"). Lessor and Lessee may select an Advocate Valuator who is favorable to such Party's posiƟon and may, prior to or aŌer appointment of an Advocate Valuator, consult with such Party's Advocate Valuator. If a Party fails toƟmely and properly provide noƟce of such Party's chosen Advocate Valuator,then the other Party's SubmiƩed Value shall be the Fair Market Value. (c) If both ParƟes Ɵmely and properly designate Advocate Valuators, then such Advocate Valuators shall, within fiŌeen (15) days aŌer their selecƟon, choose a third (3rd) neutral valuator who shall meet the qualificaƟons setforth herein ("Neutral Valuator"). The Neutral Valuator shall be engaged jointly by Lessor and Lessee. If Advocate Valuators fail to agree upon and Ɵmely appoint a Neutral Valuator,then the President of AIR CRE shall appointsuch Neutral Valuator within fiŌeen (15) days aŌer request by either Party. If the President of AIR CRE does not Ɵmely appoint the Neutral Valuator,then either Party may file an appropriate legal acƟon for a judge with competentjurisdicƟon over the ParƟesto appoint the Neutral Valuator.
(d) The Advocate Valuators and the Neutral Valuator ("Valuator(s)") shall be duly licensed real estate brokers orsalespersons in good standing in the state in which the Premises is located,shall have been acƟve over the five (5) year period before their appointment in the leasing of properƟes similarto the Premises within the general real estate market of the Premises. TheNeutral Valuator shall addiƟonally not be related to or affiliated with either Party or Advocate Valuator, and shall not have previously represented in a real estate transacƟon a Party or anyone related to or affiliated with a Party. All maƩers to be determined by the Valuators shall be decided by a majority vote of the Valuators, with each Valuator having one (1) vote. The Valuators may, asthe Valuators determine, hold hearings and require briefs, including market data and addiƟonal informaƟon.
(e) Within thirty (30) days aŌer selecƟon of the Neutral Valuator, the Valuators shall first determine the Fair Market Value established by taking intoaccount the terms, assumpƟons and condiƟons setforth herein ("Valuators' Market Value"), then decidewhich Party's SubmiƩed Value is closerin monetary amount to the Valuators' MarketValue ("Selected Market Value"), then provide the ParƟes a copy ofthe Valuators' Market Value and finally noƟfy the ParƟes of the Selected Market Value. The Selected Market Value shall be the Fair Market Value. The Valuators shall have no right to decide a Selected Market Value which is a compromise to (or modificaƟon of) the SubmiƩed Values. The decision of the Valuators shall be binding upon the ParƟes. The Party whose SubmiƩed Value is not the Selected Market Value shall, within ten (10) days aŌer the Valuators decide the Selected Market Value, pay the fees and costs of all three (3) Valuators. (f) If the Fair Market Value has not been established before the start of the applicableOpƟon Term, then Lessee shall conƟnue to pay to Lessor rentin the amount payable for the month immediately preceding the start of such OpƟon Term and Lessor's acceptance of such rentshall not waive, adversely affect or prejudice the ParƟes' rightto complete establishment of the Fair Market Value or Lessor's rightto collect the full amount of the Fair Market Value once the Fair Market Value is established. Lessee shall, within ten (10) days aŌer establishment ofthe Fair Market Value, pay to Lessor any deficiency in rent then due for the OpƟon Term. Following establishment of Fair Market Value, the ParƟesshall, within ten (10) days aŌer request by either Party, sign an amendment to this Lease to confirm the Fair Market Value and the expiraƟon date of this Lease, but the ParƟes'failure to request orto sign such an amendment shall not affect establishment of the Fair Market Value or extension of the Lease term. (g) The Valuators, in deciding the Valuators' Market Value,shall take into accountrent rates, rent abatements, periodic rent increases,real property taxes, insurance premiums and other operaƟng expenses, tenantimprovement and other applicable allowances, building services, length of lease term and other factors professional real estate brokers and/or appraisers customarily consider in determining fair market rent of property in an arm's length transacƟon by ready, willing and able parƟes for space of comparable locaƟon,size, age, condiƟon, quality, parking, visibility, view, signage and accessibility if the Premises were marketed in a normal and customary manner for a reasonable length of Ɵme on the open market to be leased to a tenant with financialstrength and credit worthiness comparable to Lessee and guarantors (if any) of this Lease (as of Lessee's exercise of the Extension OpƟon) for a termcomparable to the length of the applicableOpƟon Term and used for the AgreedUse (or other reasonably comparable uses). The Valuators, in deciding the Valuators' Market Value, shall not consider as a comparable transacƟon any of the following: a sublease, lease assignment, lease renewal or extension; lease with a tenant that has equity, is related to or affiliated with the landlord; or a lease of space thatwas subject toa right of firstrefusal, right of first offer, expansion opƟon or other encumbrances. The Valuators, in deciding the Valuators' Market Value, shall reduce the Fair Market Value on account of AlteraƟons and improvements made by Lessee to the extent the cost thereof was paid solely by Lessee (in excess of any applicable improvement allowance, abated rent in lieu of improvement allowance or other consideraƟon provided by Lessor for Lessee'simprovement of the Premises), shall not reduce the Fair MarketValue on account of any real estate brokerage commission savings by Lessor, and shall not reduce the Fair Market Value on account of deferred maintenance or repair of the Premises for which Lessee was responsible underthe Lease but did not perform.
IV. Fixed Rental Adjustment(s) ("FRA").
The monthly Base Rent shall be increased to the following amounts on the dates set forth below:
On (fill in FRA Adjustment Date(s)): The new Base Rent shall be:
V. ConƟnuaƟon of Original Term Adjustments.
The monthly Base Rent during theOpƟon Term(s) which start(s) on shall be increasedin accordance with the same formula provided in the Lease to be used to calculate increases in theBase Rent during theOriginal Term of the Lease.
BROKER'S FEE: For each adjustmentin Base Rentspecified above, the Brokersshall be paid a Brokerage Fee in accordance with paragraph 15 of the Lease or if applicable, paragraph 9 of the Sublease.
AIR CRE * hƩps://www.aircre.com * 213-687-8777 * [email protected] NOTICE: No part of these works may be reproduced in any form without permission in wriƟng. 1 ____
____
Lessee Initials
____
____
Lessor Initials
FIRST ADDENDUM TO LEASE AGREEMENT DATED ______, 2023
Between Golden Spring Capital LLC and City of Murrieta
PARAGRAPHS 53-70
53. LEASE COMMENCEMENT DATE (Paragraph 1.3). The Term of the Lease shall commence on the last to occur of: (i) the delivery of the Non-Disturbance Agreement (as defined in Paragraph 69) to Lessee, and _________, 2023 (“Lease Commencement Date” or “Commencement Date”) and expire six (6) years from the Rent Commencement Date (as defined in Paragraph 54). Upon receipt of Lessor’s Commencement Date Memorandum in the form attached as Exhibit A to this Addendum, Lessee shall return to Lessor an original executed copy within in ten (10) days.
54. RENT COMMENCEMENT DATE. The Rent Commencement Date shall be the earlier of (i) the date Lessee opens for business to the public in the Premises, or (ii) One hundred twenty (120) days after the Lease Commencement Date (“Rent Commencement Date”).
55. CONDITION OF PREMISES.
55.1 REQUIRED IMPROVEMENTS. Prior to delivering the Premises to Lessee, Lessor shall make the following modifications to the Premises at Lessor’s sole cost and expense in accordance with Applicable Regulations:
• The Premises shall be fully demised separately from Unit A. • Water, gas and electricity shall be separately metered to the Premises. • The hot water piping shall be fully insulated.
• The electrical and water pipe systems need to be isolated from each other so as to not be touching.
• The water heater duct is to be modified so as to not go through the Premises or otherwise modified by installation of a rated assembly to protect the Premises from the possibility of CO2 from seeping into the Premises.
• The water heater must be modified to only serve the Premises. If it serves the entire Building, then Lessor must be responsible for maintaining the water heater as well as all costs incurred in running it.
55.2 AS-IS. Lessee acknowledges that the Premises are being leased in an "as-is" condition, and, except as specified in Paragraphs 2.2, 2.3, 55.1, 63 and 64, Lessor makes no representations or warranties regarding the suitability, condition, or compliance of the Premises for Lessee's intended use except that Lessor has no actual knowledge that the Premises are not suitable for Lessee’s use. Lessee acknowledges that it shall be responsible to construct all Tenant Improvements pursuant to Paragraph 58 including any requirements applicable to the Tenant Improvements to comply with Applicable Regulations or Lessee’s specific use. Possession of the Premises shall be delivered to Lessee free of all third parties or persons.
56. UTILITIES: Electricity, gas and water shall be separately metered to the Premises. Lessee shall pay the costs of electricity for the Premises directly to the electric company. HVAC is governed by Paragraph 69. Lessee shall pay to Lessor the amount of gas and water charges based on the meter readings which shall be provided to Lessee with the specific bill for same. Lessee may install its own trash bin in the trash area. Trash services shall be provided directly to Lessee which, as the City, is exempt under the charges under the City’s service contract with the contractor.
57. SIGNAGE: To the extent permitted by the CC&Rs, Lessee shall be entitled to place one panel on the Kalmia Street monument sign at the entrance of the Shopping Center without any compensation to Lessor (“Monument Sign”). Lessee shall be entitled to place one panel on the other monument signs as requested by Lessee. Lessor shall cooperate with obtaining any approvals pursuant to the CC&Rs.
Lessee shall have the right to install signs on the Building (“Building Signs”) but shall bear all costs associated with the designing, manufacturing, installation, maintenance, repair and removal of any signage displayed on 2 ____
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or in relation to the Premises and any necessary permits or governmental approvals required for the Building Signs and in compliance with the CC&Rs. Lessee shall engage a licensed and reputable sign contractor to perform the necessary tasks related to the Building Signs. Lessee shall obtain written approval from Lessor for the proposed Building Sign design and contractor before proceeding with any work which approval shall not be unreasonably withheld, conditioned or delayed. Lessee shall be solely responsible for ensuring that the Building Signs comply with all applicable laws, regulations, and Building codes. Lessee shall obtain any required permits or authorizations from the appropriate governmental authorities and provide copies of such permits to Lessor upon request. Lessee shall, at its sole cost and expense, maintain the Building Signs in good condition throughout the Lease Term including, regular cleaning, repair, and replacement of any damaged or nonfunctional parts. Lessee shall promptly address any maintenance issues that may affect the Building Sign's appearance or functionality. Upon prior written notice, Lessor shall have the right to inspect the Building Signs at any reasonable time during Lessee’s normal business hours to ensure compliance with this Paragraph. If Lessor determines that the Building Signs are not being properly maintained or is in violation of any applicable laws or regulations, Lessee shall, upon receipt of written notice from Lessor, remedy the situation promptly at their own expense. Any alterations, modifications, or additions to a Building Sign shall be subject to the prior written approval of Lessor which shall not be unreasonably withheld, conditioned or delayed. The obligations under this Paragraph shall survive expiration or termination of the Lease.
58. TENANT IMPROVEMENTS. Lessee shall have the right to make improvements or alterations to the Premises as Lessee elects in its sole discretion which include, but not limited to, demolition of pony walls at the entrance, conversion of a restroom to a convenience room, etc. (“Tenant Improvements”) at Lessee’s sole cost and expense subject, however, to the Lessee Improvement Allowance (as defined in Paragraph 59).
Lessor shall have no responsibility or liability for the design, construction, quality or compliance of any Lessee Improvements with Applicable Regulations. Lessee shall obtain all necessary permits, licenses, approvals, and inspections as required by Applicable Regulations. All Lessee Improvements shall be completed by Lessee using contractors properly California licensed, bonded, and insured $1,000,000 workers compensation, $2,000,000 general liability, and $1,000,000 vehicle liability in the State of California.
59. TENANT IMPROVEMENT ALLOWANCE. Lessor shall reimburse to Lessee the sum of Twelve Thousand One Hundred Seventy Dollars ($12,170) for the Lessee Improvements (“Tenant Improvement Allowance”). Lessor shall pay the Lessee Improvement Allowance to Lessee within twenty (20) days from the last to occur of the following: (i) expiration of all applicable lien periods; (ii) Lessor’s receipt of proofs of payment evidencing all costs paid by Lessee; and (iii) a final unconditional lien release from Lessee’s general contractor.
If the Lease terminates prior to the end of the Term as a result of breach by Lessee, then the unamortized portion of such Lessee Improvement Allowance (amortized on a straight-line basis over the initial six (6) year term) shall be repaid by Lessee to Lessor.
60. RIGHT OF FIRST OFFER. Lessee’s space requirements may continue to increase. In order to accommodate such growth, Lessee shall have a right of first offer to expand into the balance of the space in the Building (“Expansion Space”) as and when it becomes available during the Lease Term. As of the Effective Date, Lessor represents and warrants to Lessee that (i) the existing lease for the Expansion Space will terminate on or before ____, 20__ and the existing lessee of the space has no options to extend that lease and (ii) no third party has any rights to the Expansion Space. As of the Effective Date, Lessor covenants that it will not grant to the current lessee nor any third party any rights with respect to the Expansion Space.
When Expansion Space becomes available for lease, Lessor will give Lessee written notice (“ROFO Notice”) of that availability and the terms and conditions on which Lessor is willing to lease the Expansion Space to Lessee, which terms and conditions will be the then-prevailing market terms and conditions for the Expansion Space.
The ROFO Notice must state the actual or estimated availability date of the Expansion Space. Lessee has the right, within thirty (30) days following receipt of the ROFO Notice, to elect, by written notice to Lessor, to lease the Expansion Space on the terms and conditions contained in the ROFO Notice (“Election to Lease Notice”).
If Lessee provides the Election to Lease Notice in the time and manner specified, Lessor and Lessee will enter into an amendment to this Lease within thirty (30) days after delivery of such notice, documenting and 3 ____
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incorporating into this Lease the terms and conditions contained in the ROFO Notice.
If Lessee fails to deliver the Election to Lease Notice in the time and manner specified, then Lessee will be deemed to have elected not to lease the Expansion Space and Lessor has ninety (90) days (“Pass Period”) to lease the Expansion Space to a third party upon the terms specified in the ROFO Notice. If Lessor does not execute a lease upon such terms for the Expansion Space with a third party within the Pass Period, the Expansion Space will be reoffered to Lessee. If Lessor executes a lease for the Expansion Space with a third party during the Pass Period, all rights of Lessee with respect to that Expansion Space under this Paragraph will cease. If the Expansion Space becomes available for lease again at a future date, the provisions of this Paragraph will again be applicable.
61. COMMON AREA OPERATING EXPENSES. Lessee shall pay to Lessor, as Additional Rental, Lessee's Proportionate Share of the Common Area Operating Expenses (hereinafter referred to as "Operating Expenses") on the first day of each calendar month in accordance with an estimate of the annual Operating Expenses prepared by Lessor. Lessor's estimate of such expenses shall be delivered to Lessee within thirty (30) days after the Term Commencement Date and, thereafter, at least ten (10) days prior to the commencement of each calendar year of the Lease Term, provided that Lessor's failure, for any reason, to so deliver such estimates shall not in any way affect Lessor's right to collect Lessee's Proportionate Share of Operating Expenses. Lessee shall pay, monthly in advance, one-twelfth (1/12th) of Lessor's estimate of such amounts as Additional Rental. If, for any reason, Lessor is unable to provide to Lessee the estimate of any of such charges at least ten (10) days prior to the commencement of any calendar year, then Lessee shall continue to pay monthly the same amount of such charges as was applicable for the previous month until thirty (30) days after receipt of such estimate, at which time, Lessee shall commence paying as of the first day of the calendar month after delivery of such new estimate, the new estimated amounts and the difference between the previous charges and the new estimated amounts. An annual adjustment based on actual Operating Expenses shall be made by Lessor within ninety (90) days following the close of each calendar year and either a refund to Lessee or an additional payment by Lessee, as applicable, shall be made within thirty (30) days after such annual adjustment. In the event of any dispute with respect to the amount of Operating Expenses or Lessee's Proportionate Share thereof, certification of such amount by Lessor's accountant shall be conclusive upon Lessee. Lessor may direct Lessee to pay all or any portion of the Operating Expenses directly to a maintenance director, property manager or similar person or entity in accordance with payment procedures deemed appropriate by Lessor. Any installment of Additional Rental payable for any portion of a calendar month or Lease Year shall be a pro rata portion of the installment payment for a full calendar month or Lease Year, based upon a thirty (30) day month. Lessee's Proportionate Share of Operating Expenses shall constituted Additional Rent.
62. REAL ESTATE TAXES. Lessor will cooperate with Lessee and do all acts reasonably necessary and appropriate to secure and maintain the property tax exemption of the Premises pursuant to Article XIII, Section 3 of the California Constitution. Lessor will either pay to Lessee the amount of any reduction or refund of property taxes resulting from such exemption or credit such amount against the Base Rent payable hereunder, as soon as possible after Lessor receives the benefit of the tax exemption. If such exemption is granted for a fiscal year which is, in whole or in part, after the date of expiration or earlier termination of the Lease Term, then, with respect to that portion of such fiscal year which is after the Lease Term, Lessor will pay to Lessee the amount of such reduction or refund of property taxes in cash or immediately available funds. If required by the County to qualify for the tax exemption, the Parties shall execute and acknowledge a memorandum of lease to be recorded in the official records of the County.
63. MOLD DISCLOSURE. With respect to the Toxic Mold Protection Act of 2001 (California Health & Safety Code Paragraphs 26100, et seq., as amended from time to time, "Mold Act"), to the best of Lessor's actual knowledge without inquiry or investigation of any kind, as of the Lease Commencement Date, there is no mold (as defined in the Mold Act; "Mold") in or on the Shopping Center and/or the Premises, visible, invisible and/or hidden that affects the improvements thereon, that exceeds the exposure limits established by the Mold Act or that poses a health threat prohibited by the Mold Act. If, at any time during the Term, Lessee knows, or with the exercise of reasonable diligence could ascertain that Mold is present in or on the Premises; the Building of which the Premises are a part; the heating, ventilation and air conditioning systems that service 4 ____
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the Premises; or in an appurtenant structure; and/or that there is a condition of chronic water intrusion or flood, in each case, within two (2) business days after Lessee knows or with the exercise of reasonable diligence should know of such condition, Lessee shall notify Lessor in writing of such condition and Lessee immediately shall repair such condition. The remediation of any such condition shall be Lessee's responsibility provided that same were caused by the acts or negligence of Lessee. At all times during the Term, Lessee shall make the Premises available to Lessor, its agents and employees for appropriate assessment and/or remedial action upon prior reasonable notice.
64. HAZARDOUS MATERIALS. Notwithstanding anything to the contrary in Paragraph 6.2, to the best of Lessor’s knowledge as of the Lease Commencement Date, Lessor represents and warrants to Lessee that the Premises and Building are not in violation of any federal, state or local law, ordinance or regulation relating to the presence of hazardous materials.
65. ASSIGNMENT AND SUBLETTING. Notwithstanding anything to the contrary in Paragraph 12, Lessee shall have the right to sublease or assign any portion of the Premises to another public entity without any profit sharing or Lessor’s consent. Lessee shall have the right to sublease or assign any portion of the Premises to a third party with Landlord’s written consent which shall not be unreasonably withheld, conditioned or delayed.
If Lessor fails to respond to such a request from Lessee within fifteen (15) days of Lessee’s request, Lessor shall be conclusively deemed to have consented to such sublease or assignment.
66. NON-DISTURBANCE AGREEMENT. Prior to the Lease Commencement Date, Lessor shall obtain and deliver to Lessee a non-disturbance agreement in a form satisfactory to Lessee from all lenders with a deed of trust on the Property (“Non-Disturbance Agreement”).
67. CONFLICT WITH LEASE. In the event that the provisions of this First Addendum conflict with the provisions in the Lease, the provisions in this First Addendum shall prevail.
68. HVAC SYSTEM. The HVAC for the Premises (“Premises HVAC”) only serves the Premises and no other portion of the Building. Lessee shall have control over the Premises HVAC during the Term. As the electricity to the Premises is separately metered, Lessee shall not be subject to any after-hours charges. If such HVAC units or system requires major repairs and/or replacement during the Lease Term, Lessor shall be responsible for any such major repairs and/or replacement, which may be capitalized and amortized over the useful life of the capital item in accordance with GAAP and added to Common Area Operating Expenses pursuant to Paragraph __.
69. LESSOR DEFAULT: Paragraph 13.6(a) is amended to change 30 days to 10 days. Paragraph 13.6(b) is amended to change one (1) month’s rent to three (3) month’s rent and to allow Lessee to recover actual damages.
70. NOTICE. All notices to be provided to Lessor and Lessee as follows:
Lessor: City of Murrieta
1 Town Square
Murrieta, CA 92562
Attn: __________________
With copy to: City of Murrieta
1 Town Square
Murrieta, CA 92562
Attn: __________________
Lessee: Golden Spring Capital LLC
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