1993-0212_BIRTCHER PACIFIC_Industrial Building Lease MBIRTCHER
INDUSTRIAL
BUILDING LEASE
(MULTI-TENANT)
By and Between
BIRTCHER PACIFIC,
a California general partnership
as
Landlord,
and
CITY OF SAN JUAN CAPISTRANO
as
Tenant
TABLE OF CONTENTS
Article Page
Number Number
I. TERMS AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
It. PROPERTY LEASED . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . t
A. Promisee . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
S. Common Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
III. TERM . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . i
S. Acceptance and SutlablYly, . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
IV. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Monthly Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
S. Consumer Price Index increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
V. SECURITY DEPOSIT . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
VI. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . 2
A. Tenant . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . ... . . . . . . . .. . . . . . . . 2
B. Landlord . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . 3
VII. INDEMNITY . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VIII. USE OF PREMISES . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A. Permitted Uses . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 3
B. Compliance with Laws .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Landlord's Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D. Hazardous Material . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . 4
IX. SERVICE AND UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . 4
X. TENANT'S TAXES . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . 4
XI, MAINTENANCE AND REPAIRS . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
A. Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
S. Tenant's Obligations . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C. Landlord's Right to Maks Repairs . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
D. Condition of Premises Upon Surrender . . . . .. .. . . . . . . . . .. . .. . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 5
XII. REIMBURSEMENT OF COMMON EXPENSES . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 5
A. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
B. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
C. Rebate or Additional Ctiaryes . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
D. Control of Common Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 6
XIII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XIV. MECHANIC'S LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XV. ENTRY BY LANDLORD . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XVI. DESTRUCTION . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 7
A. Minor Insured Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B. Major or Uninsured Damage . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
C. Abstemaint of Rent . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XVII. DEFAULT . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A. Tenant's Default . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 7
B. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XVIII. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
A. Total or Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
S. Award . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
C. Abatement in Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
E. Transfer of Landlord's Interest to Condemnor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
XIX. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
XX. ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
XXI. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
XXII. MORTGAGE PROTECTION/SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. Subordination . . . . 10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Attommsnt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. Dust Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D. Subordination to First Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXIII. TRANSFER OF LANDLORD'S INTEREST/ESTOPPEL
CERTIFICATE/FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
W
S. Furnishing of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. Liability of Transfenso . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . . . . I I . . . . . 11
XXIV. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXV. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XXVI. LATE PAYMENTS: INTEREST AND LATE CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A. Inter. . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
S. Late Charges . . . . . . . .. . . . . . . . .. . . . . . . . . - - - . . . . .. . . . . . . . . . . . . . . . . 12
C. Consecutive Lao Payment of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. No Waiver . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 12
XXVII. BROKER . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XXVIII. RELEASE OF PARTNERS OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XXIX. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . — , . 13
XXX. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
XXXI. GENERAL . . . . . . . . . . . . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
A. Paragraph Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
B. Incorporation of Prior Agnoomentat; Amendments . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 13
C. Waiver . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 13
D. Short Form . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 13
E. Time of Essence . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
F Examination of Law . . . . . . . .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
G. Sevorabilfty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
H. SuffwKW of Losas Not Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — . . - 13
L Corporate 11wthortly . . . . . . . . . . . . . . . . I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 13
J. Partnership Authoft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
XXXII. EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit "A" - Site Plan
Exhibit "B" - Floor Plan of the Promises
Exhibit OC" - First Amendment to Lease
Exhibit --D-- - Work Letter - Intentionally omitted
Exhibit "E-- - Rent Schedule - Intentionally omitted
Exhibit OP- - Rules and Regulations
Exhibit 10V - Standard Inchistriat sublease
Addendum I
This Lease contains a total of ?,4 pages.
INDUSTRIAL BUILDING LEASE
(MULTI-TENANT)
THIS LEASE is entered into by an between Landlord and Tenant this 12. day of February, 1993.
I. TERMS AND DEFINITIONS
The following terms as used herein shall have the meanings as set forth below:
A. "Landlord" means Birtcher Pacific. a California general partnership.
B. "Tenant" means City of San Juan Capistrara.
C. --But(ding- means the building in which the Premises are located, which Building has approximately 99,230 rentable
square feet and is located at 31872 Camino Capistrano. San Juan Capistrano. California.
D. "Project" means the Birtcher Plaza located in the City of San Juan Capistrano, California, in which Project the
Building is located as shown on the side plan attached hereto as Exhibit "A" and incorporated herein by this
reference.
E. "Premises" means suite(s) = located in the Sullding and consisting of approximately Nine Thousand Two Hundred
Thirty (9.230) rentable square feet, as more particularly shown on Exhibit M attached hereto and incorporated
herein by this reference.
F. "Term" means One (1) Year.
G. "Monthly Rental" means Five Thousand Five Nurdred Thirty Eight Dollars (25.538) (SO_60 per rentable square foot
per month).
H. 'Security Deposit" means Six Thousand Dollars (56.000) transferred from the Leese dated Jamary 29, 1990.
1. "Permitted Use" means opersti on of a not for profit institution specializing in planetary science. education
and research and for no other purpose.
J. "Broker" means None.
K. "Tenant Improvement Allowance" means Nora.
L. "Landlord's Construction Representative" means N_A.
M. "Tenant's Construction Representative" means NN.A_
N. "Landlord's Address for Notice" means 27611 La Paz. Laguna Niguel, California. 92656, Attn: Birtcher Plaza
Property Manager.
0. "Tenant's Address for Notice" means City of San Juan Capistrano. 32400 Paseo Adetanto- San Juan Capistrano.
California 92675. Attn: Mgry T.a+mh
P. "Lease Commencement Date" means February 12, 1993.
It. PROPERTY LEASED
A. Promises
Upon and subject to the terns, covenants and conditions hereinafter set forth, Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the Premises.
B. Common Areas
Tenant shall have the right, for the benefit of Tenant and its employees, suppliers, shippers, customers and
invitees, to the non-exclusive use of all of the Common Areas as hereinafter defined.
III. TERM
A. Initial Tom Lease Commencement Date e
It
The Term of the lease shall commence on the
:earlier date as Tenant takes possession or commences use of the Prenisea for an ate"). The
arget Commencement Date set forth in item "P" of the to which Landlord has projected for
ccupancy, based upon is res sc les. Tenant agrees that Landlord shall have no liability, nor
hat a or cancel this Lease, if the Tenant does not occupy the Premises by the Target Commencement
n the event permission is given to Tenant to enter or occupy all or a portion of the Premises prior to the Lease
Commencement Date, such occupancy shall be subject to all or a portion of the Premises prior to the Lease Commencement Date, such
occupancy shell be subject to all of the terms and conditions of this Lease. /YmaaaslYw�amm
determined, the parties shall execute an amendment to this Lease in the form of Exhibit "C" attached heret orated
herein by this reference, stating the actual Lease Commencement Date and the date for expiration the "Expiration
Date") and setting forth an acknowledgement by Tenant that landlord has completed all i the Premises in accordance
with this Leese and to the satisfaction of Tenant, subject to the items list ist, if any, delivered to Landlord
pursuant to paragraph "B." below.
B. Acceptance and Suhabflky
Within fifte oltowing the date Tenant takes possession of the Premises, Tenant may provide Landlord
with a punch Li s forth any corrective work to be performed by Landlord with respect to "Landlord's Work" as set forth
in A ached hereto; provided, however, that Tenant's obligation to pay Monthly Rental as provided below shall not be
LANDLORD: . ) \W - TENAN
have inspected the Promises and found the Promises in satisfactory condition. i Landlord.
nor any agent,employee or servant of Landlord respect to the Promises,or the Build ng,
or with res nduct of Tenant's business, nor has Landlord agreed to undertake any
IV. RENT
A. Monthly Rental
Commencing on the dal Landlord substantially completes Landlord's Work as set forth in the Work Letter(the
"Lease Commencement Date') and subject to the "Rem Schedule" attached hereto as Exhibit "E", Tenant shall pay
to Landlord during the Term, the Monthly Rental in the amount set forth in Article "I. TERMS AND DEFINITIONS, G:',
which sum shall be payable by Tenant on or before the first day of each month, in advance, at the address specified
for Landlord in Article"I.TERMS AND DEFINITIONS, N:',or such other place as Landlord stall designsta, without any
prior demand theMor and without any abasement, deduction or setoff whatsoever. Monthly Rental for the first month
or portion of it shall be paid upon the execution hereof. M the Lease Commencement Dab should occur on a day other
than the first day of a calendar month,or the Expiration Date should occur on a dry other than the ISM day of a calendar
month,Men the rental for such tractional month shall be pro rated on a daily basis based upon a thirty(30)day calendar
month.
The Monthly Rental payable by Tenant under this Article "IV. RENT" shall be Increased annually acro to
the increase in the "Consumer Price Index", as hereinafter defined; provided, however, that the total rat crease
shall not be less then five percent(5%)per annum compounded annually from the Lease Common Date. If the
Lease Commencement Date occurs at any time between the first (1st)day and the fifteenth (15 y, inclusive, of a
calendar month,the first such annual increase in the Monthly Rental shall be on the first day Ifth(12h)calendar
month following the Lease Commencement Dato. If the Lease Commencement Date at any time between the
sixteenth (161h) day and the thirty-first (316t)day, inclusive, of a calendar month, t such annual increase in the
Monthly Rental shall be on the first day of the thirteenth(13th)calendar month the Lease Commencement Date.
All subsequent annual increases in Monthly Rental shall be on the same each year as the dant on which the first
annual rental adjustment was made.As used herein,the brm "Cons Index"shall mean the Consumer Price
Index for all Urban Consumers(all items)as published by the U Department of Labor,Bureau of Labor Statistics
for the Los Angeles/Anaheim/Riverside Metropolitan Are 2.1984-100). The amount of such increase in the
Monthly Rental shall be determined by multiplying the ly Rental by a fraction, the denominator of which shall be
the Consumer Price Index figure published for the der month three(3)months prior to the actual Lease Commence-
ment Date,and the numerator of which shall Consumer Price Index figure published for the calendar month three
(3) months prior to the date of such a I nt; provided, however, MM in no event shall the Monthly Rental for any
month be less than the Monthly Re r the immediately preceding month. Should Landlord lack sufficient data to
determine theedjuMed Monthl on the date of arty such adjustment, Tenant shell continue to pay the Monthly
Rental payable immedt r to such adjustment date. As soon as Landlord obtains the necessary data, it shall
determine the Monthl payable from and after such adjustment data and shall notify Tenant of the adjustment
in writing. Shout onthly Rental for the period following such adjustment date exceed the amount previously paid
by Tenant for period,Tenant shall forthwith pay the difference to Landlord.If the Consumer Price Index is discontinued
or revi ring the Term,such other government index or computation with which it is replaced shall be used in order
to substantially the same results as would be obtained if the Consumer Price Index had not been discontinued
V. SECURITY DEPOSIT
Upon execution of this Lease,Tenant shall deposit with Landlord the Security Deposit for the performance by Tenant
of all terms, covenants and conditions of this Lease. It being expressly understood and agreed that such deposit is not
an advance rental deposit or a measure of Landlord's damages in can of Tenant's default.If Tenant defaults with respect
to any provision of this Lease,including,but not limited to,the provisions relating to the payment of rent or the obligation
to repair and maintain the Promises or to perform any other term,covenant or condition contained herein, Landlord may
(but shall not be required to),without prejudice to any other remedy provided heroin or provided by law and without notice
to Tenant, use the Security Deposit, or any portion of it, to cure the default or to compensate Landlord for all damages
sustained by Landlord resulting from Tenant's default.Tenant shall immediately,on demand pay to Landlord a sum equivalent
to the portion of the Security Deposit expended or applied by Landlord as provided in this paragraph so as to maintain
the Security Deposit in the sum initially deposited with Landlord. Although the Security Deposit shall be deemed the
property of Landlord, if Tenant is not in default at the expiration or termination of this Lease, Landlord shall return the
Security Deposit to Tenant. Landlord shall not be required to keep the Security Deposit separate from its general funds
and Tenant shall not be entitled to interest on any such deposit. Upon any sale or transfer of its interest in the Building.
Landlord may transfer the Security Deposit to its successor in interest and thereupon, Landlord shall be released from
any liability or obligation with respect thereto.
VI. INSURANCE
A. Tenant
Tenant shall, during the Term hereof, keep in full force and effect the following insurance:
(1)comprehensive general liability insurance for the benefit of Tenant and Landlord as named insured against
claims for personal injury liability including, without limitation, bodily injury, death or property damage liability and
covering (i) the business(es) operated by Tenant and by any subtenant of Tenant on the Premises. (ii) operations of
independent contractors engaged by Tenant for construction on or about the Premises, and(iii)contractual liability, with
a limit of not less than One Million Dollars ($1,0D0,000.00) combined single limit per occurrence; such insurance may
be furnished under a"primary"policy or an "umbrella" policy, provided that it is primary insurance and not excess over
or contributory with any insurance in force for Landlord;
LANDLORD: TENA
— 2 —
(2)a policy of fire, extended coverage, and vandalism and malicious mischief insurance, insuring the personal
property, furniture, furnishings and fixtures belonging to Tenant located on the Premises for not less than one hundred
percent (100%) of the actual replacement value thereof;
(3) worker's compensation insurance, with coverage as required by the State of California; and
(4) such other insurance as Landlord deems necessary.
Each insurance policy obtained by Tenant pursuant to this Lease shall contain a clause that the insurer will
provide Landlord with at least thirty(30)days prior written notice of any material change, non-renewal or cancellation
of the policy and shall be in a form satisfactory to Landlord and shall be taken out with an insurance company authorized
to do business in the State of California and rated not less than Beat's Financial Class X and Best's Policy Folder Rating
"A". Except or worker's compensation insurance,each insurance certificate shall indicate that the insurer waives its rights
of subrogation against Landlord. In addition,any insurance policy obtained by Tenant shall be written as primary policies,
non-contributing with or in excess of any coverage which Landlord may carry, with loss payable clauses satisfactory to
Landlord and in favor of Landlord and naming Landlord as an additional insured.The liability limits of the above-described
insurance policies shall in no manner limit the liability of Tenant under the terms of Article "VII. INDEMNITY" below.
Not more frequently than every two(2)years, if, in the reasonable opinion Of Landlord,the amount of liability insurance
specified in this Article"VI.INSURANCE"is not adequate,in view of increased judgments and verdicts granted or injury to
persons or damage to property,the above-described limits of coverage shall be adjusted by Landlord, by written notifica-
tion to Tenant, in order to maintain insurance protection at least equal to the protection afforded on the date the Term
commences.If Tenant fails to maintain and secure the insurance coverage required under this Article"VI.INSURANCE",
then Landlord shall have, in addition to all other remedies provided herein and by law, the right, but not the obligation,
to procure and maintain such insurance, the cost of which shell be due and payable to Landlord by Tenant on demand-
If,on account of the failure of Tenant to comply with the provisions of this Article.Landlord is deemed a co-insurer
by its insurance carver,then any loss or damage which Landlord shall sustain by reason thereof shall be bome by Tenant
and shall be immediately paid by Tenant upon receipt of a bill therefor and evidence of such loss.
B. Landlord
Landlord shall, during the Term hereof, keep in full force and effect the following insurance:
(1)a policy of fire,extended coverage and vandalism and malicious mischief insurance insuring the Building of
which the Promises are a part, in an amount at least equal to the full replacement cost thereof; and
(2) such other insurance as Landlord deems necessary in IS sole and absolute discretion.
All insurance policies shall be issued in the names of Landlord and Landlord's lender,as their interests appear.
The insurance policies shall provide that any proceeds shall be made payable to Landlord,or to the holders of mortgages
or deeds of trust encumbering Landlord's interest in the Promises and Building, as their interests shall appear. All
insurance premiums for Landlord's insurance shall be included in Common Operating Costs,as described in Article "XII.
REIMBURSEMENT OF COMMON EXPENSES" below.
VII. INDEMNITY
Tenant shall indemnify,defend and hold Landlord and its officers,directors,partnere and employees entirely harmless
from and against all liabilities, losses,demands, actions,expenses or claims, including attorneys'fees and court costs,
for injury to or death of any person or for damages to any property arising out of or in any manner connected with (i)
the use,occupancy or enjoyment of the Promises by Tenant or Tenant's agents, employees, invitees or contractors(the
"Tenant's Agents")or any work,activity or other things allowed or suffered by Tenant or Tenant's Agents to be done in
or about the Premises, (Y)any breach or default in the performance of any obligation of Tenant under this Lease and
(iii)any act ortailuro toact,wheUmer negligent or otherwise tortious,by Tenant or Tenant's Agents on or about the Premises,
Building or Project.Notwithstanding the foregoing,Thum shall not be liable to the extent that damage or injury is ultimately
determined to be caused by the active negligence or willful misconduct of Landlord.All property of Tenant kept or stored
on the Promises or in the Building ehW be so kept or stored at the risk of Tenant only,and Tenant$hall hold Landlord
harmless from arty clairre at*% out of damage to the same, including subrogation claims by Tenant's insurance
carriers, unless such damage shall be caused by the negligence of Landlord. Noris of the events or conditions set forth
in this paragraph shall be deemed a constructive or actual eviction or entitle Tenant to any abatement or reduction of rent.
VIII. USE OF PREMISES
A. Permitted Uses
Tenant shall use the Premises for the Permitted Use only, and for no other use. Tenant shall not do or permit
anything to be done in or about the Promises which will in any way obstruct or interfere with the rights of other tenants
or occupants of the Building or injure or annoy them or use or allow the Promises to be used for any immoral or unlawful
purpose, nor shall Tenant cause, maintain or permit any nuisance in,on or about the Premises. Tenant shall not comma
or suffer to be committed any waste in or upon the Promises
B. Compliance with Iawe ,
Tenant shall not use the Promises in any way(or permit or suffer anything to be done in or about the Premises)
which will conflict with any law, statute, ordinance or governmental rule or regulation or any covenant, condition or
restriction(whether or not of public record)affecting the Project or Building,now in force or which may hereafter be enacted
or promulgated including, but not limited to,the provisions of any city or county zoning codes regulating the use of the
Premises.Tenant shall,at its wk cost and expense, promptly comply with(a)all lays,statutes,ordinances,and govern-
mental rules and regulations,now in force or which may hereafter be in force,(b)that certain Declaration of Covenants,
Conditions, Restrictions and Reservation of Easements for
as amended from time to time (the
"CC&R's""), (c)all requirements, and other covenants, conditions and restrictions, now in force or which may hereafter
be in force, which affect the Promises and(d) all requirements now in force or which may hereafter be in force, of any
board of fire untlerwrtera or other similar body now or hereafter constituted relating to or affecting the condition, use
or occupancy of the Promises. The judgment of any court of competent jurisdiction or the admission by Tenant in any
action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any law, statute. ordinance.
governmental rule or regulation or any requirement,covenant, condition or restriction shall be conclusive d the tact as
between Landlord and Tenant.Tenant agrees to fully indemnify Landlord against any liability,claims or damages arising
as a result of a breach of the provisions of this Article by Tenant,and against all costs, expenses, fines or Other charges
arising therefrom,including,without limitation,attorneys'fees and related costs incurred by landlord in connection therewith,
which indemnity shall survive the expiration or earlier termination of this Lease.
— "
The Project —3
—(�
LANDLORD: TENANT•
C. Landlord's Rules and Regulations
Tenant shall, and Tenant agrees to cause its agents, servants, employees, invitees, and licensees co observe
and comply fully and faithfully with the rules and regulations(the "Rules")attached hereto as Exhibit "E"or such rules
and regulations which may hereafter be adopted by Landlord for the care, protection, cleanliness, and operation of the
Premises and Building, and any modifications or additions to the Rules adopted by Landlord; provided that, Landlord
shall give written notice thereof to Tenant. Landlord shall not be responsible to Tenant for failure of any other tenant or
occupant of the Building to observe or comply with any of the Rules.
D. Hazardous Material
Without limiting the generality of the obligations of Tenant pursuant to paragraph "B:'above, Tenant, at its sole
cost and expense, shall comply with all present and future applicable local, state and federal environmental laws,
regulations,ordinances and administrative and judicial orders relating b any substance or material on the Premises defined
or designated as hazardous or toxic, or other similar term, by any present or future local,state or federal environmental
statute, regulation or ordinance. Upon the request of Landlord,Tenant agrees to deliver to Landlord, from time to time,
a narrative explaining the nature and scope of Tenant's activities involving such hazardous or toxic material and evidence
satisfactory to Landlord of compliance with all governmental standards. In addition, Tenant shall notify Landlord within
five(5)days of any spills,releases,discharges or disposal of such hazardous or toxic substances that occur with respect
to the Premises and of any regulatory inquiries and normo tine inspections,and all investigations and potential investigations
known to Tenant regarding any aspect of the Premises as it relates to such hazardous or toxic substances.To Landlord's
knowledge(excluding any knowledge imputed to Landlord from any contractors, consultants or any other third parties),
without independent inveebpetion,inquiry or inspection,there aro no such hazardous or toxic substances upon the Premises
as of the date of this Lease. Tenant agrees to indemnity,defend and hold Landlord and its officers, directors, partners
and employees entirety harmless from and against any and all liabilities,losses,demands,actions, expenses or claims,
including attorneys'fees and court costs, incurred directly or indirectly in connection with or arising from any failure of
Tenant to perform its obligations under this paragraph.This indemnification and Tenant's obligations to cause the Premises
to comply with such governmental Standards shall survive the termination of this Lease The obligations on the part of
Tenant act forth in this Article"VIII. USE OF PREMISES,D. Hazardous Material"shall survive the expiration at the Term
of this Lease or the exercise by Landlord of any of Landlord's remedies under this Lease.
The provisions of this Article"VIII.USE OF PREMISES D. Hazardous Material"are required to be in this Lease
under the deed of trust encumbering the Premises and the Building and such provisions cannot be modified or waived
by Landlord in any manner.
IX. SERVICE AND UTILITIES
Tenant agrees to pay for the full cost of all utilities supplied to the Promises,including,but not limited to, gas,water,
sewer,electricity,telephone and other utility services supplied to Tenant for which two to a separate meter andlor submeter
to the Premises, and any taxes thereon. With respect to those utility services for which there is no separate meter or
submeter, Tenant agrees to pay to Landlord its share of all charges for such utility services supplied to the Premises
upon billing by Landlord of its share as reasonably estimated by Landlord. Landlord may elect to furnish any utility
services to the Premises, in when event Tenant shall pay to Landlord as additional rent, in advance, on the first (1st)
day of each month,the amount necessary to reimburse Landlord for the coat of utilities supplied to the Premises. If Landlord
discontinues furnishing any of the utilities for any reason, Tenant shall obtain its own utility service for the Premises.
Landlord shall not be in breach of its obligations under this Article union Landlord fails to make arty repairs or
perform maintenance which it is obligated to perform hereunder and such failure persists for an unreasonable time after
written notice of a reed for such repairs or maintenance is given to Landlord by Tenant. Landlord shall not be liable for
and Tenant shall not be entitled to any abatement or reduction of rent by reason of Landlord's failure to furnish any of
the foregoing when such failure is caused by accidents,breakage, repairs,strikes,brownouts,blackouts,lockouts or other
labor disturbances or labor disputes of any character,or by any other cause,similar or dissimilar,beyond the reasonable
control of Landlord, nor shall such failure under such circumstances be construed as a constructive or actual eviction
of Tenant. Landlord shall not be liable under any circumstances for loss or injury to property or business, however
occurring, through or in connection with or incidental to Landlord's failure to furnish any of said service or utilities.
Tenant shall not, without the written consent of Landlord, use any apparatus or device on the Promises, including,
without limitation, electronic data processing machines, punch card machines or machines using in excess of one
hundred twenty(120)volts,which consumes more electricity than is usually furnished or supplied for the Permitted Use
of the Premises,as determined by Landlord.Tenant shall not consume water or electric current in excess of that usually
furnished or supplied for the use of the Premises(as determined by Landlord),without first procuring the written consent
of Landlord, which Landlord may refuse. The excess coat for such water and electric current shall be established by an
estimate made by a utility company or electrical engineer hired by Landlord at Tenant's expense.
X. TENANT'S TAXES
Tenant shall be liable for any tax(now or hereafter imposed by any governmental entity)applicable to or measured
by or on the rents or any other charges payable by Tenant under this Lease, including (but not limited to) any gross
income tax,gross receipts tax or excise tax with respect to the receipt of such rent or other charges or the possession,
leasing or operation,use or occupancy of the Premises,but not including any net income,franchise,capital stock,estate
or inheritance taxes. If any such tax is required to be paid to the governmental taxing entity directly by Landlord, then
Landlord shall pay the amount due and, upon demand, shall be fully reimbursed by Tenant for Such payment.
Tenant shall also be liable for all taxes levied against the lessehokd held by Tenant or against any personal property,
leasehold improvements, additions, alterations and fixtures placed by or for Tenant in, on or about the Premises or
constructed by Landlord for Tenant in the Premises; and if any such taxes are levied against Landlord or Landlord's
property, or if the assessed value of the property is increased (whether by special assessment or otherwise) by the
inclusion therein of value placed on such Isesehold, personal property, leasehold improvements. additions, alterations
and fixtures,and Landlord pays any such taxes(which Landlord shall have the right to do regardless of the validity thereof).
Tenant, upon demand,shall fully reimburse Landlord for the taxes so paid by Landlord or for the proportion of such taxes
resulting from such increase in any assessment.
—4—
XI. MAINTENANCE AND REPAIRS
A. landlord's Obllgatlons
Landlord shall keep in good condition and repair,at Landlord's initial cost and expense subject to reimbursement
by Tenant of its pro rata share of such cost and expense, pursuant to Article "XII. REIMBURSEMENT OF COMMON
EXPENSES", heating, ventilating and air conditioning systems which service the Premises as well as other premises
within the Building,the foundations,exterior walls,structural condition of interior bearing walls,and roof of the Premises,
as well as the parking lots,walkways,driveways,landscaping,fences,signs and utility installations of the Common Areas.
Landlord shall not be required to make any repairs that are the obligation of any other tenant or occupant within the
Building or repairs for damage caused by any negligent or intentional act or omission of Tenant or any person claiming
through or under Tenant or any of Tenant's employees,suppliers,shippers,customers or invitees, in which event Tenant
shall repair such damage at its sole cost and expense. Landlord shall not be liable for and there shall be no abatement
of rent with respect to,any injury to or interference with Tenant's business arising from any repair,maintenance,alteration
or improvement in and to any portion of the Project, Building or the Promises. Tenant hereby waives and releases its
right to make repairs at Landlord's expense under Sections 1941 and 1942 of the California Civil Code or any similar
law, statute or ordinance now or hereafter in effect.
B. Tenant's Obligations
Tenant shall make all repairs and replacements as and when Landlord deems necessary to preserve in good
working order and candid the Promisee and every part thereof,including,without limitation,plumbing within the Promises,
heating, ventilating and air conditioning systems ("HVAC') and is installed for the exclusive use of the Premises,
electrical and lighting facilities and equipment within the Promisee and all other utility facilities and systems exclusively
serving the Promisee,and all fixtures,interior walls,interior surfaces of exterior wails,ceilings,windows,doors,cabinets,
draperies,window coverings,carpeting and other floor coverings, plate glass and skylights located within the Premises.
Tenant shall, at its sole cost and expense, make all repairs to the Promises, Building and Project which are required,
in the opinion of Landlord. as a result of any misuse or neglect committed or permitted by Tenant or by any subtenant,
agent, employee,or servant of Tenant. In addition, Tenant shall, at its sole cost and expense, repair any damage which
is caused by any invites of Tenant.
C. landlord's Right to Main Repairs
In the event that Tenam fails to maintain the Premises in good and sanitary order, condition and repair as
required by this Losse, than,following written notification to Tenant(except in the ease of an emergency, in which case
no prior notification shall be required), Landlord shall have the right,but not the obligation, to enter the Premises and
to do such acts and expend such funds at the expense of Tenant as aro required to place the Promises in good and
sanitary order, condition and repair. Any amount so expended by Landlord shall be paid by Tenant promptly upon
demand. Landlord shall have no liability to Tenant for any loss or damage that may accrue to Tenant's merchandise,
fixtures, equipment, furniture or other property or for any inconvenience or interference with the use of the Premises
by Tenant resulting from Landlord's performance of such maintenance or repair work.
D. Condition of Promises Upon Surrender
Tenant shall, upon the expiration or earlier termination of the Term, surrender the Premises to Landlord in the
same condition as on the date Tenant took possession,broom clam,reasonable weu and leer excepted.All appurtenances,
fixtures, improvements, additions and other property attached to or installed in the Promises pursuant to Article "Xlli.
ALTERATIONS, ADDITIONS AND TRADE FIXTURES'; whether by Landlord or by or on behalf of Tenant,and whether
at landlord's expense or Tenant's expense, shall be and remain the property of Landlord, at Landlord's option. Any
furnishings and personal property installed on the Promises that are removable without metrial damage to the Building
or the Promises, whether the property of Tenant or leased by Tenant, shall be and remain the property of Tenant and,
at the expiration of the Term,shall be removed by Tenant at Tenant's sole cost and expense.Tenant shall promptly repair
any damage to the Promises or the Building resulting from such removal. Any of Tenant's property not removed from
the Promises prior to the expiration of the Teri shall, at Landlord's option, either become the property of Landlord or
may be removed by Landlord and Tenant shall pay to Landlord the cost of such removal within ten(10)days after delivery
of a bill therefor.Any damage to the Promisee, including any structural damage, resulting from Tenant's use or from the
removal of Tenant's fixtures, furnishings and equipment shall be repaired by Tenant at Tenant's expense.
X11. REIMBURSEMENT OF COMMON EXPENSES
A. Definitions
(1) "Common Areas" means: (i) all areas, space, equipment and special services provided by Landlord in
connection with the Building or the parcel of land on which the Building is located for the common or joint use and benefit
of the tenants, their employees, agoras, servants,suppliers, customers and other invitess, including, by way of illustra-
tion, but not limitation, retaining walls, fences, landscaped areas, parks, curbs, sidewalks, private roads, restrooms,
stairways, elevators,lobbies, hallways, patios. service quarters, parking areas and other areas within the exterior of the
Building or as shown on the site plan attached to this Lease as Exhibit "A", and (ii) all common areas as designated
in the CC&R's recorded with respect to the Project
Ua�etaaripopmo
(2) "Taxes"shall mean any and all real property taxes, personal property taxes, improvement bonds. surcharges.
service charges, fees, and other charges and assessments which aro levied or assessed against the Landlord or the
Building and the land on which the Building is located relating to the Building and the land and any improvements,
fixtures and equipment and all other property of Landlord, real or personal, located in the Building and used in
connection with the operation of the Building and the land on which the Building is located, including any increase in
such taxes, whether resulting from a reassesamers of the value of the land or the Building, or any portion thereof, or
any other reason, imposed by any governmental authority. "Taxes"as defined above shall be interpreted in the broadest
sense possible to include all amounts levied or collected in addition to or in lieu of real property or personal property
taxes including, but not limited to, school fees, transportation corridor fees, city transportation fees, and development
fees other than those required to be paid in the ordinary course of obtaining building permits, license fees,commercial
rental tax, or other tax upon Landlord's business of leasing the Building. To the extent any such Taxes have been
imposed as fees prior to the Lease Commencement Date, Landlord may amortize Such costs and interest thereon over
a reasonable period of time and include such amortization as a "Common Operating Cost"(as defined below). "Taxes'
shall not include any federal or state income tax,or any franchise,capital stock,estate, inheritance,succession, transfer
and excess profit taxes imposed upon Landlord.
LANDLORD: IN
— 5— TENANT
Common Operating Costs 0 estimated to run $2,264 perm „th at the time
of the signing of this Lease.
(3) "Common Operating Costs" shall mean the aggregate of all costs and expenses payable by Landlord in
connection with the operation and maintenance of the Premises,Building,and Common Areas,including,but not limited
to.(a)all asseresmerts levied pursuant to the CCBR's mimM=with respect
to the parcel of real property upon which the Building is Ieeeted;(b)the cost of landscaping,repaving,resurfacing, repairing,
replacing, painting, lighting, cleaning, removing trash and similar items with respect to the Common Areas (excluding
those areas designated in the CCSR's as common areas of the Project); (c) all Taxes; (d) the cost of any insurance
obtained by Landlord in connection with the Building, including, the insurance required to be obtained by Landlord
pursuant to Article "VI. INSURANCE" above; (e)the cost of trash disposal service; (f)the Cost of operating, repairing
and maintaining life sat"systema, including, without limitation, sprinkler systems; (g)the cost of monitoring services,
if provided by Landlord, including,without limitation, any monitoring or control devices used by Landlord in regulating
the parking areas; (h)the cost of water, electricity,gas and any other utilities; (i) legal,accounting and consulting fees
and expenses; Q) compensation (including employment taxes and fringe benefits) of all persons who perform duties
connected with the operation, maintenance and repair of the Building or Common Areas;(k)energy allocation, energy
use surcharges, or environmental charges; (1) municipal inspection fees or charges; (m) any other costs or expenses
incurred by Landlord under this Leas@ which are not otherwise reimbursed directly by tenants; and (n) the amount
charged by any management firm contracted by Landlord to provide any or all of the foregoing services.The computation
of Common Operating Costs shall be made in accordance with generally accepted accounting principles
(4) "Tenant's Proportionate Share" means the quotient obtained by dividing the total number of square feet of
net rentable floor area within the Building as set forth in Article 1. TERMS AND DEFINITIONS,C." into the total number
of square fast of net rentable floor area within the Premises as set forth in Article 1. TERMS AND DEFINITIONS, E:'
B. Reimbursement
Within a reasonable time betas the commencement of each calendar year during the Term,Landlord shall deliver
to Tenant a reasonable estimate of the anticipated Common Operating Costs for the forthcoming calendar year. Tenant
shall pay to Landlord,as additional rental,commencing on the Rental Commencement Date,and continuing on the first
day of each calendar month thereafter, an amount equal to one nwMh (1/12th) of the product obtained by multiplying
the then estimated Common Operating Costs times Tenant's Proportionate Share. The estimated monthly charge for
Tenant's Proportionate Share may be adjusted periodically by Landlord during the calendar year on the basis of Landlord's
reasonably anticipated costs. Any major expenditure by Landlord(e.g. resurfacing of parking areas, painting buildings,
refurbishing landscaping or walkways and similar items)during the year which was net included in determining the estimated
Common Operating Costs, may be billed separately to Tenant according to Tenant's Proportionate Share
C. R@bab or Additional Changes
After the and of each calendar year, Landlord shall furnish to Tenant a statement slowing the total Common
Operating Costs and Tenant's Proportionate Share of the Common Operating Casts for the calendar year just ended.
If the amount of estimated Common Operating Costs paid by Tenant for any year during tris Term exceeds the actual
Common Operating Costs for such year, Landlord may choose either to credit such excess against the next installments
of Tenant's Proportionate Share of Common Operating Costs due from Tenant to Landlord hereunder or to refund such
excess to Tenant. If the estimated Common Operating Costs for such year are"a than the actual Common Operating
Costs for such year,than Tenant shall pay to Landlord,within thirty(30)days of Tenant's receipt of Landlord's statement.
as additional rent, Tenant's Proportionate Share at the amount by which the actual Common Operating Costs exceeds
the estimated Common Operating Coals.In the event the Term of this Lease expires,or this Lea"is otherwise terminated,
Landlord shall compute the credit or deficiency up to the data the Lease expired or was terminated.
D. Control of Common Areas
Landlord shall have the sole and exclusive control of the Common Areas,as well as the right to make changes
to the Common Ames.Landlord's rights shall include,but not be limited to,the right to(a)restrain the use of the Common
Areas by unauthorized persons,(b)utilize from time to time any portion of the Common Areas for promotional and related
matters,(c)temporarily cos@ any portion of the Common Areas or repairs, improvements or alterations,and(d)change
the shape and size of the Common Areas or change the location of improvements within the Common Areas, including,
without limitation,parking areas, roadways and curb cuts. Landlord may determine the nature, size and extent of the
Common Areas as well as make changes to the Common Areas from time to time which,in its opinion,are deemed desirable.
XIII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES
Tenant shall not make any alterations, additions or improvements to the Premises, or any part thereof, whether
structural or nonstructural(hereafter"Alterations"),without Landlord's prior written consent. In order to obtain Landlord's
consent,Tenant shall submit such information as Landlord may require,including,without limitation,(i)plans and specifica-
tions,(ii)permits,licenses and bonds and(Iii)evidence of insurance coverage in such types and amounts and from such
insurers as Landlord deems satisfactory. All Alterations shall be done in a good workmanlike manner by qualified and
licensed contractors or mechanics,as approved by Landlord. In no event shall any aaerations affect the structure of the
Building or its exterior appearance. Tenant shall indemnify, defend against and keep Landlord free and harmless from
all liability, loss, damage, cost, attorneys' fees and any other expense incurred on account of claims by any person
performing work or furnishing materials or supplies for Tenant or any person claiming under Tenant. Landlord may
require Tenant to provide Landlord, at Tenant's sole coat and expense, a lien and completion bond in an amount equal
to one and one-half (11/2) times the estimated cost of such improvements, to insure Landlord against any liability for
mechanic's liens and to insure completion of the work. Landlord shall have the right at all times to post on the Premises
any notices permitted or required by law,or that Landlord shall deem proper,or the protection of Landlord,the Premises,
the Building, and any other party having an interest therein, from mechanics'and matenalmen's lions, and Tenant shall
give to Landlord at least thirty (30) business days notice of commencement of any construction on the Premises.
XIV. MECHANICS LIENS
Tenant shall keep the Premises free from any liens arising out of any work performed, material furnished or
obligation incurred by or for Tenant or any person or amity claiming through or under Tenant. to the event that Tenant
shall not, within ten (10) days following the imposition of any such lien, cause the same to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided herein and by law,
the right, but not the obligation,to cause such lion to be released by such means as Landlord deems proper, including
payment of the claim giving rise to such lien. All such sums paid and all expenses incur by Landlord in connection
therewith shall be due and payable to Landlord by Tenant on demand.
LANDLORD: _ — 6 — TENANT.
XV. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right to enter the Promises at reasonable times to inspect
the same, to supply any service to be provided by Landlord hereunder and to determine whether Tenant is complying
with its obligations hereunder, to supply janitorial service and any other service to be provided by Landlord to Tenant
hereunder,to exhibit the Promises to prospective purchasers,mortgagees or tenants.to post notices of nonresponsibility,
and to alter, improve or repair the Promises and any portion of the Building,without abatement of rent, and may for that
purpose erect scaffolding and other necessary Structures that aro reasonably required by the character of the work to
be performed by Landlord, provided that the business of Tenant shall not be interfered with unreasonably.Tenant hereby
waives any claim for damages for any injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Promises, and any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock all of the doors in, upon and about the
Premises,excluding Tenant's vaults and safes,and Landlord shall have the right to use any and all means which Landlord
may deem proper to open such doors in the event of an emergency. Any entry to the Promises or portions thereof
obtained by Landlord by any of said means, or otherwise, shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Promises, or an eviction, actual or constructive, of Tenant
from the Premises, or any portion thereof.
XVI. DESTRUCTION
A. Misr Insured Damages
In the event the Promises,the Building of which the Promises are a part,or any portion thereof, is damaged
or destroyed by any casualty that is covered by the insurance maintained by Landlord pursuant to Article"VI. INSURANCE"
above, then Landlord shall rebuild and restore the Promises or Building, as the case may be, and repair the damaged
portion thereof, provided that(t)the amount of insurance proceeds available to Landlord equals or exceeds the cost of
such rebuilding,restoration and repair,(III such rebuilding,restoration and repair Can be completed within one hundred
eighty(180)days attar the work commences in the opinion of a registered architect or engineer appointed by Landlord,
(iii) the damage or destruction has occurred more than twelve (12) months before the expiration of the Term, and (iv)
such rebuilding, restoration, or repair is then permitted, under applicable governmental laws, rules and regulations, to
be done in such a manner as to return the Promises, or Budding, as the case may be, to substantially its condition
immediately prior to the damage or destruction, including, without limitation, the same net rentable floor area. To the
extent that insurance proceeds must be paid to a mortgages or beneficlary under, or must be applied to reduce any
indebtedness secured by, a mortgage or deed of trust encumbering the Promises, or the Building,such proceeds, for
the purposes of this Section,shall be deemed not available to Landlord unless such mortgages or beneficiary permits
Landlord to use such proceeds for the rebuilding, restoration,and repair of the Promises,or Building. Notwithstanding
the foregoing, Landlord shall have no obligation to repair any damage to,or to replace any of,Tenant's personal property,
furnishings, fixtures, equipment or other such property or effects of Tenant.
S. Major or Uninsured Damage
In the event the Premises,or the Building in which the Promises are a part,or any portion thereof,is damaged
or destroyed by any casualty to the extent that Landlord is not obligated, under Section 'A. Minor Insured Damages"
next above,to rebuild or restore the Premises or the Building, as the can may be, or to repair the damaged portion
thereof, then Landlord may, at its option, either(t)rebuild or restore the Promises or Building and repair the damaged
portions thereof or(ii)terminals this Lease eNective as of the date the damage or destruction occurred. If Landlord does
not give Tenant written notice within sixty(BD)days after the damage or destruction occurs of its election to rebuild or
restore the Premises or Building, es the can may be, and repair the damaged portions thereol, Landlord shad be
deemed to have elected to terminate this Lease. Notwithstanding the foregoing, if Landlord does not elect to terminate
this Lease, Tenant may terminate this Lease upon thirty(30) days prior written notice if either(t) Landlord determines
that such repair or restoration cannot be completed within one hundred and eighty(180)days or(it)the damage or destruction
occurs within the lest twelve(12)months of the Term,unless Tenant's actions or omissions aro the cause of the damage
for which Tenant shall indemnity Landlord against pursuant to Article "VII. INDEMNITY" above.
C. Abatement of Rent
There shall be an abatement of rent by reason of damage to or destruction of the Promises or the Building,
or any portion thereof,to the extent that etdler(1)Landlord receives insurance proceeds for lose of rental income attributable
to the Promises or(ii)the floor area of the Promises cannot be reasonably used by Tenant for conduct of its business,
in which event the Monthly Rental shall abaft proportionately according to(1)or(it)above commencing thirty(30) days
atter the damage to or destruction of the Promises,or Building has occurred,and except that,if Landlord or Tenant @kora
to terminate this Lease as provided in Section "S. Major or Uninsured Damage" next above, no obligation shall accrue
under this Lease after such termination.Notwithstanding the provisions of this Article"XVI.DESTRUCTION;'if any such
damage is due to the fault or neglect of Tenant,any person claiming through or under Tenant,or any of their employees,
suppliers, shippers,customers or invitees,then there shall be no abatement of rent by reason of such damage, unless
and until Landlord is reimbursed for such abatement pursuant to any, rental insurance policy that Landlord may, in its
sole discretion, elect to carry. Tenant's right to terminate this Lease in the event of any damage or destruction to the
Premises or Building is governed by the terms of this Article "XVI. DESTRUCTION" and therefore Tenant hereby
expressly waives the provisions of Section 1932, Subdivision 2,and Section 1933, Subdivision 4, of the California Civil
Code and any and all laws, whether now or hereafter in force, and whether created by ordinance, statute, judicial
decision, administrative rules or regulations, or otherwise,that would cause this Lease to be terminated, or give Tenant
a right to terminate this Lease, upon any damage to or destruction of the Building that occurs.
XVII. DEFAULT
A. Tenant's Default
The failure by Tenant to perform any one or more of the following obligations shall constitute a default hereunder
by Tenant:
(1) If Tenant abandons or vacates the Promises;
(2) If Tenant fails to pay any rent or other charges required to be paid by Tenant under this Lease and such
failure continues for five(5)days atter such payment is due and payable;provided,however,that the obligation of Tenant
to pay a late charge or interest pursuant to Article "XXVI. LATE PAYMENTS; INTEREST AND LATE CHARGES" shall
commence as of the due date of the rem or such other monetary obligation and not on the expiration of such five (5)
day grace period;
—7—
(3) If Tenant involuntarily transfers Tenant's interest in this Lease or voluntarily transfers (attempted or actual)
its interest in this Loam without Landlord's prior written consent;
(4)If Tenant files a voluntary petition for relief or it a petition against Tenant in a proceeding under the Federal
Bankruptcy Laws or other insolvency laws is filed and not withdrawn or dismissed within forty-five (45)days thereafter,
or if under the provisions of any law providing for reorganization or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any substantial part of the Promises or any of Tenant's
personal property located at the Premises and such junsdiction,custody or control remains in face unrelinquished,unstayed
or unterminated for a period of forty-five (45) days;
(5)It in any proceeding or action in which Tenant is a party,a trustee,a receiver,agent or custodian is appointed
to take charge at the Promises or any of Tenant's personal property located at the Promises(or has the authority to do
so) for the purpose of Wareing a lien against the Promises or Tenant's personal property;
(6) If Tenant fails to promptly and fully perform any other covenant, condition or agreement contained in this
Lease and such failure Continues for thirty(30) days after written notice theroof from Landlord to Tenant; or
M If Tenant is a partnership or consist of more than one(1)person or entity, if any partner of the partnership
or other peon or entity is involved in any of the acts or events described in subparagraphs "(1)" through "(6)" above.
S. Remedies
Upon the occurrence of a default by Tenant that is not cured by Tenant within the grace period specified above,
Landlord shall have the following rigors and remedies in addition to all other rights and nemedes available to Landlord
at law or in equity.
(1) The right and remedies provided by California Civil Code Section 1951.2 to recover from Tenant upon
termination of the Lease:
(a) the worth at the time of award of the unpaid rent which had been "mad at the time of termination;
(b) the worth al the time of award of the amount by which the unpaid rem which would have been earned
atter termination until the time of award exceeds the amount of such rental lop that Tenant proves could have been
reasonably avoided;
(c)subject to Subdivision (c) of California CMI Code Section 1951.2, the worth at the time of award of the
amount by which the unpaid rem for the balance of the Term after the time of award exceeds the amount of rental loss
that Tenant proves Could be reasonably avoided; and
(d)any other amounl necessary to compensate Landlord for all the deMn»m proximately caused by Tenant's
failure to perform it obligations under hats Law or which in the ordktary course of things would be likely to result therefrom,
including, but not limited to, any attorneys' fav, brokers cernhssions or finder's fees (nor only in connection with the
reletting of the Premises,but also that portion of any awing Commission paid by Landlord in Connection with this Lease
which is applicable to that portion of the Lew Term which is unexpired as of the data on which this Lew is terminated),
any coat for repairs,Clerwp, refurbishing,removal(Including the repair of any damage cawed by such removal)and
storage(or disposal)of Tenant's personal property,equipment,fixtures,and anything efes that Tenant is required(under
this Lease)to remove but does not remove,and any costs for alterations,additions and renovations(and any other costs
and expenses) incurred by Landlord in regaining possession of and hollering (or attempting to relit) the Promises.
The 'Worth at the time of award" of the amounts released to in clauses"(a)" and "(b)" of this Article "XVII. DEFAULT,
B. Remedies"shall be computed by allowing Interest at the prime refs.The"worth at the time of award" of the amount
referred to in clause"(c)"of this Article"XVII. DEFAULT,B. Remedies"shell be computed by discounting such amount
at the discount rate of the Federal Reserve Bank of San Francisco at the time at award plus one percent (1%).
(2)The rights and remedies provided by California Civil Code Section 1951.4,which allows Landlord to continue
this Lease in effect and to enforce all of Its rights and remedies under this Lease, including the right to recover rent and
any other additional monetary charges as they become due, for as long as Landlord does not terminate Tenant's right
to possession;provided,however,If Landlord elects to exercise its remedies described in this subsection"(2)"and Landlord
does not terminate this Lease, and if Tenant request Landlord's consent to an assignment of this Leap or a sublease
of the Premises at such time as Tenant is in default, Landlord shall not unreasonably withhold it consent to such assign-
ment or sublease. Act of maintenance or preservation, efforts to relet the Promises or the appointment of a receiver
upon Landlord's initiative to protect its interest under this Lease shall not constitute a termination of Tenant's right to
possession.
(3) The right to terminate this Lease by giving notice to Tenant in accordance with applicable law.
(4)The right and power,as attorney-in-fact for Tenant, to enter the Promises and remove therefrom all persons
and property, to atom such property in a public warehouse or elsewhere at the cost of and for the account of Tenant,
and to sell such property and apply the proceeds therefrom pursuant to applicable California law. Landlord,as attorney-
in-fact for Tenant,may from time to time sublet the Promises or any part thereof for such term or terms(which may extend
beyond the Term) and at such rent and such other terms as Landlord in its sole discretion may deem advisable, with
the right to make alterations in and repairs to the Premises. Upon each such subletting, Tenant shall be immediately
liable for payment to Landlord of the cost of such subletting and such alterations and repairs incurred by Landlord, if
any. Any amount received by Landlord from such subletting shall be applied first toward the cost of any alterations or
repairs made to the Promises in connection with such subletting;second,to payment of Monthly Rental,Tenant's Propor-
tionate Share of Common Operating Cost,and other monetary obligations due and unpaid hereunder,and the residue,
if any, shall be held by Landlord and applied in payment of future Monthly Rental, Tenant's Proportionate Share of
Common Operating Cost,and other monetary obligations as the same become due hereunder. If Tenant has been credited
with any rent to be received by such subletting and such rent shall not be promptly paid to Landlord by the subtenant(s),
or if such rentals received from such subletting during any month aro less than those to be paid during that month by
Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such deficiency shall be calculated and paid
monthly. For all purposes set forth in this Article "XVII. DEFAULT, S. Remedies, (4)", Landlord is hereby irrevocably
appointed attomay-in-fact for Tenant,with power of substitution. No taking possession of the Premises by Landlord, as
attorney-in-fact for Tenant, shall be construed as an election on Landlord's part to terminate this Lease unless written
notice of such intention is given to Tenant. Notwithstanding any such subletting without termination, Landlord may at
any time thereafter elect to terminate this Lease for such previous breach.
(5) The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the
Premises and to apply any rental collected from the Premises and to exercise all other rights and remedies granted to
Landlord as attomey-in-fact for Tenant pursuant to Article "XVII. DEFAULT, B. Remedies, (4)" above.
_ g_
XVIII. CONDEMNATION
A. Total or Partial laking
If all or substantially all of the Promises is Condemned or taken in any manner for public or quasi-public use,
including but not limited to,a conveyance or assignment in lieu of the condemnation or taking,this Lease shall automatically
terminate as of the earlier of the date on which actual physical possession is taken by the condemnor or the date of
dispossession of Tenant as a town of such condemnation or other taking. If less than all or substantially all of the Premises
is so condemned or taken, this Less@ shall automatically terminate only as to the portion of the Promises so taken as
of the earlier of the date on which actual physical possession is taken by the condemnor or the date of dispossession
of Tenant as a result of such condemnation or taking. If such portion of the Building is condemned or otherwise taken
so as to require, in the opinion of Landlord, a substantial alteration or reconstruction of the remaining portions thereof,
this Lease may be terminated by Landlord,as of the date on which actual physical possession is taken by the condemnor
or dispossession of Tenant as a result of such condemnation or taking, by written notice to Tenant within sixty(60)days
following notice to Landlord of the date on which Such physical possession is taken or dispossession will occur.
B. Award
Landlord shall be entitled to the entire award in any condemnation proceeding or other proceeding for taking
for public or quasi-public use,including,without limitation,any award made for the value of the leasehold estate created
by this Lease. No award for any partial or total taking shelf be apportioned, and Tenant hereby assigns to Landlord any
award that maybe made in such condemnation or other taking,together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereol. Although all damages in the event of any condemnation aro to belong to
Landlord whether such damages aro awarded as compensation for diminution in value of the leasehold or to the fee
of the Promises, Tenant shall have the right to claim and recover from the condemnor, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in Tenant's own right on account of damages
to Tenant's business by reason of the condemnation and for or on account of any coo or loss to which Tenant might
be put in removing Tenant's merchandise, furniture and other personal property, fixtures, and equipment or for the
interruption of or damage to Tenant's business.
G Abatement In Rent
In the event of a partial condemnation or other taking that does not result in a termination of this Lease as to
the entire Promises pursuant to this Article "XVIII. CONDEMNATION", the rent and all other Charges shall abate in
proportion to the portion of the Promises taken by such condemnation or other taking. If this Lease is terminated, in
whole or in part,pursuant to any of the provisions of this Article"XVIII.CONDEMNATION",all rentals and other charges
payable by lanant to Landlord hereunder and attributable to the Promises taken shall be paid up to the date upon which
actual physical possession shall be taken by the condemnor. Landlord shall be emitted to retain all of the Security Deposit
until such time as this Lease is terminated as to all of the Premises.
0. Temporary Taking
If all or any portion of the Promises is condemned or otherwise taken or public or quasi-public use for a limited
period of time, this Lease shall remain in full force and affect and Tenant shall continue to perform all terms, conditions
and covenants of this Lease;provided,however,the rent and all other charges payable by Tenant to Landlord hereunder
shall abate during such limited period in proportion to the portion of the Promises that is rendered untenable and unusable
as a result of such condemnation or other taking. Landlord shall be entitled to receive the entire award made in
connection with any such temporary condemnation or other taking.
E. Transfer of Landlord's Interest to Condemnor
Landlord may, without any obligation to Tenant, agree to sell and/or Convey to the condemnor the Premises,
the Building,or any portion thereof,stooges by the condemnor,free from this Lease and the rights of Tenant hereunder,
without first requiring that any action or proceeding be instituted or, if instituted, pursued to a judgment.
XIX. HOLDING OVER
Any holding over after the expiration of the Term,with the Consent of Landlord, shall be Construed to be a tenancy
from month to month at two hundred percent(200%)of the rent herein specified(pro rated on a monthly basis) unless
Landlord shall specify a lesser amount or rent in its sole discretion, IDgether with an amount estimated by Landlord for
the monthly Common Operating Costs payable under this Lease, and shall otherwise be on the terms and conditions
heroin specified as far as applicable. Any holding over without Landlord's consent shall constitute a default by Tenant
and shall entitle Landlord to reenter the Promises as provided in Article "XV. ENTRY BY LANDLORD" hereof.
XX. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs, including, but not limited to, atorneys' fees and amounts paid
to any collection agency, incurred by Landlord in connection with any breach or default by Tenant under this Lease or
incurred in order to enforce or interpret the terms or provisions of this Lease. Such amounts shall be payable upon
demand. In addition, if any action shall be instituted by either Landlord or Tenant for the enforcement or interpretation
of any of its rights or remedies in or under this Lease, the prevailing party shall be entitled to recover from the losing
party all costs incurred by the prevailing party in said action and any appeal therefrom,including reasonable attorneys'
fees and court costs to be fixed by the court therein. In the event Landlord is made a party to any litigation between
Tenant and any third party, then Tenant shall pay all costs and attorneys' fees incurred by or imported upon Landlord
in connection with such litigation; provided, however, if Landiord is ultimately held to be liable, then Landlord shall
reimburse Tenant for the cost of any attorneys' is" paid by Tenant on behalf of Landlord.
XXI. ASSIGNMENT AND SUBLETTING
A. Tenant shall not directly or indirectly, voluntarily or by operation of law, sell, assign, encumber, pledge or
otherwise transfer or hypothecate all or any part of the Premises or Tenant's leasehold estate hereunder (collectively
"Assignment"),or permit the Premises to be occupied by anyone other than Tenant or sublet the Premises("Sublease")
or any portion thereof without Landlord's prior written consent in each instance,which consent shall not be unreasonably
withheld, subject to the terms and conditions contained in this Article "XXI. ASSIGNMENT AND SUBLETTING".
_g —
S. If Tenant desires at any time Anter into an Assignment or a Sublease of thelpernises or any portion thereof,
Tenant shall request in writing,at least sixty(50)days prior to the effective date of the Assignment or Sublease, Landlord's
consent to the Assignment or Sublease, and provide the following: (a) the name of the proposed assignee, subtenant
or occupant,(b)the nature of the proposed assignees,subtenant's or occupant's business to be earned on in the Premises.
(c)the terms and provisions of the proposed Assignment or Sublease, and(d)such financial information concerning the
proposed assignee, subtenant Or occupant which Landlord Shall have requested following its receipt of Tenant's request
for consent.
C. At any time within forty-five (45) days atter Landlord's receipt of the notice specified in paragraph "S.". above,
Landlord may by written notice to Tenant elect either to(a)consent to the proposed Assignment or Sublease, (b) refuse
to consent to the proposed Assignment or Sublease, or(c) terminate this Lease in full with respect to an Assignment
or terminate in part with respect to a Sublease and enter into a levo directly with the proposed assignee or sublessee.
Landlord and Tenant agree(by way of example and without limitation)that it shall be reasonable for Landlord to withhold
its consent if any of the following situations must or may exist: (i)the proposed transferees use of the Premises conflicts
with the Permitted Use under this Lease,(ii)in Landlord's reasonable business judgment, the proposed transferee lacks
sufficient business reputation or experience to Operate a successful business of the type and quality permitted under
this Lease,(ie)Tenant is in default pursuant to this Lease or(iv)the proposed transteree's financial condition is less favorable
than Tenant's financial condition as of the date of this Lease.
D. If Landlord consents to the Sublease or Assignment within said forty-five(45)day period,Tenant may enter into
such Assignment or Sublease of the Premises Or portion thereof, but only upon the arms and conditions set forth in
the notice furnished by Tenant b Landlord pursuant to subparagraph "S.", above;provided, however,that in connection
with such Assignment or Sublease,as a condition to Landlord's consent,Tenant shall,if so requested by Landlord, enter
into an agreement with Landlord to pay to Landlord fifty percent(50%)of the excess(after deducting the market leasing
commissions, reasonable legal fees, new tenant improvement costs,and other actual costs reasonably incurred by Te-
nant in connection with the Assignment or Sublease), if any, of (i) in the case of an Assignment, the rental and other
payment obligations of the proposed assignee under the terms of the proposed Assignment over the rentsit and other
payment obligations of Tenant under the terms of this Lease, or(ii) in the use of a Sublease, the amount proposed to
be paid by the sublessee over the proportionate amount of rental and other payment obligations required to be paid by
Tenant to Landlord under the terms at this Lease applicable to the portion of the Premises so subleased.
E. No consent by Landlord to any Assignment or Sublease by Tenant shall relives Tenant of any obligation to be
performed by Tenant under this Lues,whether arising before or after tie Assignment or Sublease.The consent by Landlord
to any Assignment or Sublease shall not relieve Tenant of the obligation b obtain Landlord's express written consent
to any other Assignment or Sublease.Any Assignment or Sublease that is not in compliance with this Article"XXI.ASSIGN-
MENT AND SUBLETTING" shall be void and, at the option of Landlord, shall constitute a material default by Tenant
under this Lease. The acceptance of rent Or payment of any other monetary obligation by Landlord from a proposed
assignee or sublessee shall not constitute the consent by Landlord to such Assignment or Sublease.
F Any sale or other transfer, including transfer by consolidation, merger or reorganization, of twenty-five percent
(25%)or more of the voting stock of Tenant,if Tenant is a corporation,or any sets or other transfer of twenty-five percent
(25%) or more of the partnership interest in Tenant, if Tenant is a partnership, shall be an Assignment for purposes of
this Article "XXI. ASSIGNMENT AND SUBLETTING". As used in this subparagraph "F.", the term "Tenant" shall also
mean any entity that has guaranteed Tenant's obligation under this Lew,and the prohibition hereof shall be applicable
to any sales or transfers of stock or partnership interests of said guarantor. Notwithstanding the foregoing, Landlord's
prior consent to such a sale or transfer shall not be required so long as(i)the proposed transferee or successor entity's
use of the Promises will remain substantially the same, (ii)the financial condition of the transferee is equal to or better
than Tenant's financial condition as of the date of this Lew,and(iii)Tenant provides to Landlord,within thirty(30)days
of the sale or transfer, the information required pursuant to subparagraph "B." above, as well as financial information
on the transferee sufficient to confirm that the transfer does not require the prior consent of Landlord.
G. Each assignee, or other transferee, other than Landlord, shall assume, as provided in this subparagraph "G".
all obligations of Tenant under this Lew and shall be and remain liable jointly and severally with Tenant for the payment
of Monthly Rental and all other monetary obligations hereunder, and for the performance of all the terms. covenants,
conditions and agreements herein contained on Tenant's part to be performed for the Term; provided, however, that the
assignee,sublessee,or other transferee shall be liable to Landlord for rent only in the amount set forth in the Assignment
or Sublease. No Assignment shall be binding on Landlord unless the assignee or Tenant shall deliver to Landlord a counter-
part Of the Assignment and an instrument in recordable form that contains a covenant of assumption by the assignee
satisfactory in substance and form to Landlord,consistent with the requirements of this subparagraph"G:',but the failure
or refusal of the assignee to execute such instrument of assumption shall not release or discharge the assignee from
its liability as set forth above.
propos processing expenses of Landlord, whether or not Landlord shall grant
X II. MORTGAGE PROTECTIONISUBORDINATION
A. Subordination
The rights of Tenant under this Lew are and shall be, at the option of Landlord, either subordinate or superior
to any mortgage or deed of trust(including a consolidated mortgagee or deed of trust)constituting a hen on the Premises
j or Landlord's interest therein or any part thereof, whether such mortgage or deed of trust has heretofore been. or may
hereafter be,placed upon the Premises by Landlord.and to any ground or master lease if Landlord's title to the Premises
or any part thereof is or shall become a leasehoid interest. To further assure the foregoing subordination or superiority.
Tenant shall,upon Landlord's request,together with the request of any mortgages under a mortgage or beneficiary under
a deed of trust or ground or master lessor, execute any instrument (including, without limitation, an amendment to this
Lease that does not materially and adversely affect Tenant's rights or duties under this Lease), or instruments intended
to subordinate this Leass, Or at the option of Landlord, to make it superior to any mortgage, deed of trust, or ground
or master lease. Notwithstanding any such subordination. Tenant's right to occupy the Premises pursuant to this Lease
shall remain in effect for the full Term as long as Tenant is not in default hereunder.
B. Attornmertt
Notwithstanding the provisions of "A. Subordination" next above. Tenant agrees (i) to attorn to any mortgagee
of a mortgage or beneficiary of a deed of trust encumbering the Premises and to any party acquiring title to the Premises
by judicial foreclosure,trusteas sale,or deed in lieu of foreclosure,and to any ground or master lessor, as the successor
to Landlord hereunder,(ii)to execute any attomment agreement reasonably requested by a mortgages, beneficiary, ground
I. Landlord hereby agrees to consent to a sublease of the Premises to San Juan
Capistrano Research Ins--itue, a not for profit organization, on a form
acceptable to Landlord. See Exhibit "G")
LikLiDLORD: TEUANT:
or master lessor,or parry so acquiring We to the Promisee,and(III)that this Lease,subject to the rights under any outstanding
nondisturbance ogrearrtern,at the option of such mortgagee,beneficiary,or ground or master lessor,or Other party,shall
remain in force notwithstanding any such judicial foreclosure, trustee's sale, deed in lieu of foreclosure, or merger of
titles. Notwithstanding the foregoing, neither a mortgagee of a mortgage Or beneficiary of a deed of trust encumbering
the Premises,any party acquiring title to the Promises by judicial foreclosure,trustee sale, or deed in lieu Of foreclosure,
or any ground lessor or master Isesor, as the successor to Landlord hereunder, shall be liable or responsible for any
breach of a covenant contained in this Lease that occurred before such party acquired its interest in the Promises and
no such party shall be liable or rosponsible for any security deposits held by Landlord hereunder which have not been
transferred or actually received by such party, and such party shall not be bound by any payment of rent or additional
rent for more than two (2) months in advance.
Tenant acknowledges that The Mutual Life Insurance Company of New lbrk("MONY"), It oma a
partner of Landlord and has or will make a first mortgage(the "First Mortgage') to Landl "curtly of the real
property of which the Premises forms a part. Tenant agrees thee nolwithstandin city of MONY,this Lease
is nevertheless subject and subordinate to the First Mortgage as if M position was that of a first mortgagee.
MONY, as first mortgagee, hereby egress not to disturb Ten ion of the Promises so long as Tenant is
not in default under this Lease,and�hsrorn to such flrot mortgages in the event of its acquisition
of title.
D. Subordination t
Notes' amything to the contrary contained in this Lease,the right of Landlord to subordinate this Lease
shall to only a first mortgage and/or first deed of trust so long as MONY is the holder of a first lien on the
XXIII. TRANSFER OF LANDLORD'S INTEREST/ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS
A. Esbppel Cortlficate
Tenant, at any time and from time to time upon not less than ten(10)days prior written notice from Landlord,
agrees to execute and deliver to Landlord a statement(a)certifying that this Lease is unmodified and in full force and
effect,or,if modified,stating the nature of such modification and certifying that this Leges,as so modified, is in full force
and effect and the date to which the rent and other charges aro paid in advance,if any,and(b)acknowledging that there
are not, to Tenant's knoarledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults it
they are claimed evidencing the status of this Loris. Tenant's failure to deliver an estoppel certificate within such time
shall be conclusive upon Tenant that(a)this lease is in full force and sfiec without modification except as may be represented
by Landlord, (b) to Tenant's knowledge there are no uncured defaults in Landlord's performance, and (c) no rent has
been paid in advance except as set forth in this Lease.
B. Furnishing of Finanlcal Statements
Landlord has reviewed financial statements if so requested of the Tenant and has relied upon the truth and
accuracy thereof with Tenant's knowledge and representations of the truth and accuracy of such statements and that
said statements accurately and fairly depict the financial condition of Tenant. Said financial statements are an inducing
factor and consideration for the entering into of this Lease by Landlord with this particular Tenant. Tenant shall, at any
time and from time to time upon not Is" than ten (10) days prior written notice from Landlord, furnish Landlord with
current financial statements reflecting Tenant's then financial condition.
C. Liability of 7Mrteroe
In the event Landlord shall sell or otherwise convey its title to the Promises,after the effective date of such sale
or conveyance Landlord shall have no further liability under this Lease to Tenant except as to matters of liability which
have accrued and aro unsatisfied as of the date of sale or conveyance, and Tenant shall seek performance solely from
Tenant's purchaser or successor in title.
XXIV. PARKING
Landlord agrees to maintain or cause to be maintained an automobile parking area and to maintain and operate,
or cause to be maintained and operated,said automobile parking area during the Term of this Lease for the benefit and
use of the customers, service suppliers, other invitees and employees of Tenant.Whenever the words "automobile" or
"parking area" are used in this Lease, It is intended that the same shall include,whether in a surface parking area or
a parking structure,the automobile parking stalls,driveways,loading docks,truck areas,services drives,entrances and
exits and sidewalks, landscaped areas, pedestrian passageways in conjunction therewith and other areas designed for
parking. Landlord shall keep said automobile parking area in a neat,clean and orderly condition,lighted and landscaped,
and shall repair any damage to the facilities thereof, the cost of which shall be included in Common Operating Costs
as defined in Article"XII.REIMBURSEMENT OF COMMON EXPENSES':above.Nothing contained herein shall be deemed
to impose liability upon Landlord for personal injury or theft, for damage to any motor vehicle, or for loss of property
from within any motor vehicle,which is suffered by Tenant or any of its employees,customers, service suppliers or other
invitees in connection with their use of said automobile parking area. Landlord shall also have the right to establish such
reasonable rules and regulations as may be deemed desirable,at Landlord's We discretion,for the proper and efficient
operation and maintenance of said automobile parking area. Such rules and regulation$may include,without limitation,
(i) restrictiona in the hour: during which the automobile parking area shall be open for use, and (ii) the establishment
of charges for parking therein(on either a reserved or unreserved basis, at Landlord's sole discretion)by tenants of the
Building as well as by their employees, customers and service suppliers.
Landlord shall at all times during the Term hereof have the sole and exclusive control of the automobile parking
area, and may at any time during the Term hereof exclude and restrain any person from use or occupancy thereof;
excepting,however,Tenant and employs",customers,service suppliers and other invitees of Tenant and of other tenants
in the Building who make use of said area in accordance with any rules and regulations established by Landlord from
time to time with respect thereto. The rights of Tenant and its employees, customers, service suppliers and invitees
referred to in this Article shall at all times be subject to (i) the rights of Landlord and other tenants in the Building to
use the same in common with Tenant and its employees, customers, service suppliers and invitees, (ii)the availability
of parking spaces in said automobile parking area,and(ii)Landlord's right to change the location at any assigned reserved
parking spaces in such instances as shall be determined at Landlord's sole discretion.
LANDLORD: _ 11 _ TENANT:
XXV. SIGNS
Tenant shall not have the right to place, construct, or maintain on or about the Premises, the Building of which
the Premises are a part, or the Common Area, or in any interior portions of the Premises that may be visible from the
exterior of the Building,signs, names, insignia, or any other similar item without Landlord's prior written consent, which
consent may be withhold in Landlord's ads discretion. In the went Landlord consents to Tenant placing a sign on or
about the Promises,or the Building,arty such sign shall(i)be subject to Landlord's approval of the color, size,style and
location of such sign,(ii)conform to any current or future sign criteria established by Landlord for the Building or Project
and (iii) comply with all laws, ordinances, orders, codes, rules and regulations of all governmental agencies asserting
)unsdiction over the Building or Project. It Landlord enacts a sign criteria or revises an existing sign criteria,after Tenant
has erected a sign to which Landlord has granted its consent,Tenant agrees,at Landlord's expense,subject to Landlord's
prior approval of the cost thereof,to make the necessary charges to its sign in order to conform the sign to Landlord's
sign criteria,as enacted or revised, provided that such changes shall be limited to the color, size, style and location of
Tenant's sign and that Tenant shall not be required to change the content of its sign. Upon the expiration or earlier
termination of the Term,Tenant agrees to remove,at Tenant's sole cost and expense,all signs,names and insignia from
the Premises and Building, and shall promptly repair arty damage to the Premises or the Building resulting from such
removal.
Except as otherwise consented to by Landlord,Tenant shall not affix upon the Promises,the Building of which the
Premises are a part,anywhere in the Common Areas or in any interior portions of the Building or in any interior portions
of the Promises that may be visible from the exterior of the Building,signs,advertising placard,name,insignia,trademark,
descriptive material or any other similar item without Landlord's prior written consent, which consent may be withheld
in Landlord's sole discretion.
XXVI. LATE PAYMENTS; INTEREST AND LATE CHARGES
A. Interest
Any amount due from Tenant to Landlord which is not paid when due shall bear interest at the maximum rate
permitted by law from the date such payment is due until paid,except that amounts spent by Landlord on behalf of Tenant
shall bear interest at such rate from the date of disbursement by Landlord.
S. Late Charges
Tenant hereby acknowledges that in addition to lost interest, the late payment by Tenant to Landlord of rent
or any other sums due hereunder will cause Landlord to incur other costs not contemplated in this Lem,the exact amount
of which will be extremely difficult and impracticable to ascertain. Such other costs include, but are not limited to,
processing, administrative and accounting scab. Accordingly, if any installment of rem or any additional rem or other
sum due from Tenant shall not be received by Landlord within fire(5)days after such amount shall be due, Tenant shall
pay to Landlord a late charge equal to ten percent(10%)of such overdue amount.The parties hereby agree that(i)such
late charge represents a fair and reasonable estimate of the costs Landlord will incur in processing such delinquent
payment by Tenant,(ii)such late charge shall be paid to Landlord as liquidated damages for each delinquent payment
pursuant to California Civil Cade Section 1871,and(iii)the payment of We charges and the payment of interest are distinct
and separate from one another in that the payment of interest is to compensate Landlord for the use of Landlord's money
by Tenant,while the payment of late charges is to compensate Landlord for the additional administrative expense incur-
red by Landlord in handling and ping delinquent payments.
C. Consecutive Late Payment of Rent
Fosowing Oath second oonsoicuhve late payment of rem, Landlord shall have the option (1) to require that
beginning with the first payment of rent next due,rem shall no longer be paid in monthly installments but shall be payable
quarterly throe(3) months in advance andfor(!I)b require that the Tenant increase the amount, if any, of the Security
Deposit required under Article'V.SECURITY DEPOSIT"above by one hundred percent(100%),which additional Security
Deposit shall be retained by Landlord,and may be applied by Landlord, in the manner provided in Article'V.SECURITY
DEPOSIT".
D. No 1lyalver
Neither assessment nor acceptance of interest or late charges by Landlord shall constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from exercising any of its other rights and remedies
under this Lease. Nothing contained in this Article shall be deemed to condone,authorize, sanction or grant to Tenant
an option for the late payment of rem,additional rem or other sums due hereunder,and Tenant shall be deemed in default
with regard to any such payments should the same not be made by the date on which they are due.
XXVIL BROKER
Tenant warrants and represents that it has not dealt with any real estate broker or agent in connection with this
Lease or its negotiation except the Broker identified in Article 'T TERMS AND DEFINITIONS,J:'. Tenant shall indemnify
and hold Landlord harmless from any cost, expense or liability(including costs of suit and reasonable attorneys' fees)
for any compensation,commission or fees claimed by any other real estate broker or agent in connection with this Lease
or its negotiation by reason of any act of Tenant.
XXVIII. RELEASE OF PARTNERS OF LANDLORD
Tenant agrees that in the event Tenant shall have any claim against Landlord under this Lease arising out of the
subject matter of this Lease. Tenant's sole recourse shall be against the assets of Landlord and Tenant further hereby
waives any and all right to assert any claim against or obtain any damages from,for any reason whatsoever,the directors,
officers and partners of Landlord.This release, notwithstanding Section 1542 of the California Civil Code which provides
that 'A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially affected his settlement with the debtor",
releases Such partners of Landlord from all injuries,damages.or losses to Tenant's property, real and personal,whether
known,unknown,foreseen,unforeseen,patent or latent,which Tenant may have against the partners of Landlord.Tenant
understands and acknowledges the significance and consequence of such specific waiver of Section 1542.
— 12 —
XXIX. NOTICES
Arty notice, demand, approval, consent, bill, statement or other communication required or desired to be given
under this Lease in writing shall be directed to Tenant at Tenant's Address for Notice or to Landlord at Landlord's Address
for Notice, as set forth in Article'T TERMS AND DEFINITIONS" and$hall be personally served or given by mail, and
if mailed, shall be deemed to have been given when two (2) days have elapsed from the date of the deposit into the
United States Mail,certified and postage prepaid. If more than one(1)Tenant is named under this Lease,service of any
notice upon any one (1) of said Tenants shall be doomed as service upon all of such Tenants.
XXX. QUIET ENJOYMENT
Upon payment by Tenant of the rents heroin provided,and upon the observance and performance of all the covenants,
terms and conditions on Tenant's part to be observed and performed,Tenant shall peaceably and quietly hold and enjoy
the Premises for the term hereby demised without hindrance or interruption by Landlord or any other person or persons
lawfully or equitably claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions of this
Lease, and any mortgage and/or deed of trust to which this Lease is subordinate.
XXXI, GENERAL
A. Paregreph Headings
The paragraph headings used in this Lease aro for the purposes of convenience only. They shall not be con-
strued to limit or to extend the meaning of any part of this Lease.
S. Incorporation of Prior Agreements; Amendments
This Lease contains all agreements of Landlord and Tenant with respect to any matter mentioned,or dealt with,
herein. No prior agreement or understanding pertaining to any such matter shall be binding upon Landlord. Any
amendments to or modifications of this Lease shall be in writing, signed by the parties hereto,and neither Landlord nor
Tenant shall be liable for any oral or implied agreements
his a re m nt includ s t:hr: 5� p and
a Waiver ndustl�la� ublease ( xhibit ) .
Waiver by Landlord of any breach of any term, covenant, or condition contained in this Lease shall not be
deemed to be a waiver of such term,covenant, or condition or of any subsequent breach of the same or of any other
term,covenant,or condition contained in this Lease. Landlord's consent to,or approval of,any act shall not be doomed
to render unnecessary the obtaining of Landlord's consent ro,or approval of,any subsequent act by Tenant.The acceptance
of rem or other sums payable hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of any
provision horeof,other than failure of Tenant to pay the particular rent or other sum so accepted,regardless of Landlord's
knowledge of such preceding broach at the time of acceptance of such rent, or sum equivalent to rent.
0. Short Form
Tenant agrees, at the request of Landlord, to execute, deliver, and acknowledge a short form of this Lease
satisfactory to counsel for Landlord,and Landlord may in its sole discretion, record such short form in the county where
the Premises are located.Tenant shall not record this Lea",or a short form of this Lease,without Landlord's prior written
consent, and such recordation shall, at the option of Landlord, constitute a Default of Tenant hereunder.
E. Time of Essence
Time is of the essence in the performance of each provision of this Lease.
F. Examination of Lease
Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or
option for lease,and it is not offeetive as a lease or otherwise until execution by and delivery to both Landlord and Tenant.
G. Severability
If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable,the remainder of this Lease,or the application of such tens or provision to persons
or circumstances other than those as to which it is held invalid or unenforceable,shall not be affected thereby, and each
term and provision of this Lem shall be valid and be enforced to the fullest extent permitted by law.
H. Surrender of Wee Not Merger
Neither the voluntary or other surrender of the Lease by Tenant nor the mutual cancellation thereof shall cause
a merger of the titles of Landlord and Tenant, but such surrender or cancellation shall,at the option of Landlord, either
terminate all or any existing subleases or operate as an assignment to Landlord of any such subleases.
1. Corporate Authority
If Tenant is a corporation, each individual executing this Lease on behalf of Tenant represents and warrants (i)
that he is duly authorized to execute and deliver this Lease on behalf of Tenant in accordance with a duly adopted
resolution of the Board of Directors of Tenant in accordance with the Bylaws of Tenant and(ii)that this Lease is binding
upon and enforceable by Landlord against Tenant in accordance with its terms. If Tenant is a corporation,Tenant shall,
within thirty (30) days after execution of this Lease, deliver to Landlord a certified copy of a resolution of its Board of
Directors authorizing or ratifying the execution of this Lease.
J. Partnership Autho►Ity
If Tenant is a partnership, each individual executing this Lease on behalf of Tenant represents and warrants
(i) that he is duly authorized to execute and deliver this Leges on behalf of Tenant in accordance with the terms of
Tenant's partnership agreement, or his receipt of such authorization pursuant to the terms of such partnership agree-
ment, and (i)that this Lease is binding upon and enforceable by Landlord against Tenant in accordance with its terms.
LANDLORD: TENANT
—13—
K. Parties Duties
Reference is hereby made to that certain agreement between Birtcher Pacific, the City of San Juan
Capistrano and Sen Juan Capistrano Research Institute relating primarily to the responsibilities of each party.
)DO(II. ENECUTION
This Lease is executed in several duplicate counterparts, each of which shall be deemed an original of
this Lease for all purposes.
"LANDLORD" "TENANT"
SIRTCNER PACIFIC, CITY OF SAN JUAN C ISTRANO
a California general partnership
By:
Art B rtcher, ru ee pe c rout'
of a ABB a rust
ted August 28, 1981, as �/ �A
Amended, General Partner Its: (11 rq�IQ C.F^
Date: �L/ ✓ Date: /71J ., 1993
EXEC 2A
• EXHIBIT 'A'
SITE PLAN
Subject
Premises
m
e
II
3 �
1
\ ��e
1
\ 3.
0
11 n
e Founmin
1 � f
1 1
I 1 y
1 1r dt
1
a '
'
3782 '
capon
• EXHIBIT "B" •
FLOOR PLAN OF THE PREMISES
BIRTCHER PLAZA
31872 Camino Capistrano
San Juan Capistrano, CA
Approximately 9,230 S.F.
FIRST FLOOR
15 UP -�
Y j
TN OFFICE vnul7
12'HIGH CEILING 9HIGH CEILING
y D
OPEN AREA ,
�• 7 9
OFFICE
ELECTRICAL - _ �.
UP
63 64'�----{
OFFICE m
2
25'
AL
MECHANICAL
ROOM
OPEN
TWOMEN
VI
n r
MEN
SECOND FLOOR
Not to any Scale
I
EXHIBIT "C"
FIRST AMENDMENT TO LEASE
1. PARTIES
This First Amendment to Lease (the --Fi rat Amendment") is executed this Dfi day of Apr i 1 1993, and
is by and between Sirtcher Pacific, a California general partnership (11Landlor&), and City of San Juan
Capistrano ("Tenant").
2. RECITALS
Landlord and Tenant entered into that certain Industrial Building Lease dated February 1993 (the
"Lease--), for those certain premises described in the Lease as the "Initial Premises--. The Lease provides that
Landlord and Tenant shall enter into this First Amendment at such time as the Lease Commencement Date (as
defined in the Lease) has been determined by the parties.
3. DATES
In accordance with the terms of the Lease, Landlord and Tenant agree that the Term of the Lease has
commenced and shall expire on the following dates:
Lease Commencement Date: February 12, 1993
Expiration Date: February 11, 1994
4. ACCEPTANCE OF PREMISES
Tenant accepts the Premises in the condition existing as of the Lease Commencement Date.
5. MISCELLANEOUS
A. Effect of Amendment
Except to the extent this Lease has been modified by this First Amendment, the remaining terms
and conditions of the Lease shall have the same meaning in this First Amendment as such terms and provisions
have in the Lease. The Parties agree that this Lease shall constitute a release of the obligations specified
in the prior Lease of the premises which lease term was from December 1, 1992 to February 11, 1993.
B. Defined Terns
The defined terms used in this First Amendment, as indicated by the first Letter of a word
being capitalized, shall have the same meaning in this First Amendment as such terns and provisions have in the
Lease.
C. Correspondence
All correspondence with the City of San Juan Capistrano shall be directed to:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, California 92675
Attn: Mary Laub, Management Asst. It
a. EXECUTION
This First Amendnent has been executed and shall be deemed effective as of the date first written above.
"LANDLORD" "TENANT"
BIRTCHER PACIFIC, CITY S JJUA APISTRANO
a California general partnership
By: y:
Ar r B. B tcher Trustee ugh,
the ABS a SRO rust Ci ana
Dated August 2 961, as
Amended, General Partner
Date: 3/3Uq3 3 Date: T R9
EX"ImIT F3
EXHIBIT "D"
WORK LETTER
Intentionally Omitted.
EXFDBR.D2
EXHIBIT "E"
RENT SCHEDULE
Intentionally omitted.
EXHMrr.Ea
EXHIBIT •'F"
Rules and Regulations
Attached to and Made a Part of
Multi Tenant Industrial Building Lease
The following Rules and Regulations shall be in effect at the Building.Landlord reserves the right to adopt reasonable
modifications and additions hereto. In the case of any conflict between these regulations and the Lease,the Lease shall
be controlling.
1. Except with the prior written consent of Landlord, no tenant shall conduct any retail sales or any manufacturing
of any kind in or from the Premises, or any business other than that specifically provided for in the Lease.
2. Landlord reserves the right to prohibit personal goods and services vendors from access to the Building except
upon such reasonable to., and conditions.including but not limited to the payment of a reasonable fee and provision
for insurance coverage,ss are rotated to the safety,care and cleanliness of the Building,it*preservation of good order
thereon,and the relief of any financial or other burden on Landlord occasioned by the presence of such vendors or the
sale by Mem of personal goods or services to a tenant or its employees.It reasonably necessary for the accomplishment
of these purposes, Landlord may awAude a particular vendor entirely or limit the number of vendors who may be present
at any one time in the Building.The term "personal goods or services vendors"means parsons who periodically enter
the Building of which lite Promises are a part for the purpose of selling goods or services to a tenant,other than goods
or services which are used by a tenant only or the purpose of conducting is business on the Promises."Personal goods
or services"include,but are not limited to,drinking water and other beverages,food,barbering services,and shoeshining
services.
3 The sidewafb, halls, passages, elevators and stairways shall not be obstructed by any tenant or used by it for
arty purpose other than for ingress to and*gross from their respective Promises.The halls,passages,entranoes,elevators,
stairways, balconies and roof are not for the use of the general public, and Landlord shall in all cases retain the right
to control and prevent access thereto of all persons whose presence in the judgment of Landlord shall be prejudicial
to the as",character, reputation and interests of the Building and its tenants, prow that nothing herein contained
shall be construed to prevent such access to parsons with whom Tenant normally deals only for the purpose of
conducting Its business an the Premises(such as clients,customers,office suppliers and equipment vendors, and the
like)unless such persons are engaged in Illegal activities. No tenant and no employees of any tenant shall go upon the
roof of the Building without the written consent of Landlord.
4.The ssshes,sash doors,windows,gave lights, and any lights or skylights that reflect or admit light into the halls
or other places of the Building shall not be covered or obstructed. The toilet rooms,water and wash closets and other
water apparatus shall not be used for any purpose other Man that for which they were eortstructed,and no foreign substance
of any kind whatsoever shall be thrown therein, and 1st expense of any breakego, stoppage or damage, resulting from
the violation of this rule shall be borne by the tenant who, or whose cleric, agents, employees, or visitors, shall have
caused it.
5. No sign, advertisement or notice visible from the exterior of the Promises or Building shall be inscribed, painted
or affixed by Tenant on any part of the Building or Promises without the prior written consent of Landlord. If Landlord
shall have given such consent at any time, whether before or after the execution of this Lease, such consent shall in
no way operate as a waiver,or resew of any of the provisions hereof or of this Lease, and shall be doomed to relate
only to the particular sign,adv*nW nt or notice so consented to by Landlord and shall not be construed as dispensing
with the necessity of obtaining the specific written consent of Landlord with respect to each and every such sign,
advertisement or notice other than the particular sign, advertisement or notice, as the case may be, so consented to
by Landlord.
6. In order to maintain the outward professional appearance of the Building, all window coverings to be installed
at the Promises shall be subject to Landlord's prior approval. It Landlord, by a notice in writing to Tenant, shall object
to any curtain, blind, shade or screen attached to, or hung in, or used in connection with, any window or door of the
Promises,such use of such curtain, blind,shade or screen shall be forthwith discontinued by Tenant. No awnings shall
be permitted on any part of the Premises.
7.Tenant shall not do or permit anything to be done in the Promises,or bring or keep anything therein, which shall
in any way increase the rate of fire insurance on the Building, or on the property kept therein, or obstruct or interfere
with the rights or other tenants,or in any way injure or annoy them;or conflict with the regulations of the Fire Department
or the fire laws, or with any insurance policy upon the Building, or any part thereof, or with any rules and ordinances
established by the Board of Health or other governmental authority.
& No safes or other objets larger or heavier than the freight elevators of the Building are limited to carry shall be
brought into or installed in the Premises. Landlord shall have the paver to prescribe the weight and position of such
sates or other objects. The moving of safes shall occur only between such hours as may be designated by, and only
upon previous notice to,the manager of the Building,and the persons employed to move safes in or out of the Building
must be acceptable to Landlord.No freight,furniture or bulky matter of any description shall be received imo the Building
or carried into the elevators except during hours and in a manner approved by Landlord.
9. Landlord shall clean the Premislsesuj as provided in the Lease, and except with the written consent of Landlord, no
person or persons other than those app
rpvod by Landlord will los permitted to tomer the Building for such purpose, but
Tenant shall not cause unnecessary I by reason of Tenant's carelessness and indifference in the preservation of
good order and cleanliness.
10. No tenant shall sweep or throw of permit to be swept or thrown from the Promises arty dirt or other substance
into any of the corridors or halls or elevators, or out of the doors or windows or stairways of the Building, and Tenant
shall not use,keep or permit to be used or kept any foul or noxious gas or substance in the Promises,or permit or suffer
the Promises to be occuped or used in a manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise,odors and/or vibrations,or interfere in any way with other tenants or those having business therein,
nor shall any animals or birds be kept in or about the Building. Smoking or carrying lighted agars or cigarettes in the
elevators of the Building is prohibited.
—1 —
11. Except for warming food by microwave oven, no cooking shall be done or permitted by Tenant on the Premises,
nor shall the Building be used for lodging.
12.Tenant shall not use or keep in the Building any kerosene, gasoline,or inflammable fluid or any other illuminating
material, or use any method of heating other than that supplied by Landlord.
13. If Tenant desires Wephone or telegraph connections, Landlord will direct electricians as to where and how the
wires aro to be introduced. No boring or Cutting for wires or otherwise shag be mads without directions from Landlord.
14. Each tenant,upon the termination of its tenancy,shall deliver to Landlord all the keys of offices, rooms and toilet
rooms which shall have been furnished such tenant or which such tenant shall have had mads.and in the event of loss
of any keys so furnished, shall pay Landlord therefor.
15. No Tenant shall lay linoleum or other similar floor covering so that the same shall be affixed to the floor of the
Premises in any manner except by a paste,or other material which may*oily be removed with water the use of cement
or other similar adhesive material being expressly prohibited.The method of affixing any such linoleum or other similar
floor covering to the Hoot as well as the method of affixing carpels or ngp to the Premises,shall be subject to approval
by Landlord. The expense of repairing any damage resulting from a violation of this rule shall be borne by Tenant by
whom, or by those agents, clerks, employees, or visitors, the damage shall have been caused.
16 In case of invasion, mob, riot, public excitement or other Commotion, Landlord reserves the right, but shall not
be obligated to prevent scones to the Building during the continuance of the earn* by closing the doors or otherwise,
for the safety of the tenants and prolsction of property in the Building.
17. Tenant shall Cee that the windows and doors of the Promises aro closed and securely locked before leaving the
Building and Tenant shall exercise extraordinary care and caution that all water faucets or water apparatus aro entirely
shut off before Tenant or Tenant's employees Naw the Building, and that all electricity, gas or al shall likewise be
carefully shut off, so as to prevent wash or damage, and for any default or eareleemess Tenant shall make good all
injuries sustained by other tenants or occupants of the Building or Landlord.
18.Tenant shall not after any lock or install a new or additional lock or any bolt on any door of the Promises without
prior written consent of Landlord. If Landlord shall give its consent,Tenant shall in each case furnish Landlord with a
key for any such lock.
19. Tenant shall not katall equipment, such as, but not limited to, electronic tabulating or computer equipment,
requiring electrical or air conditioning service in excess of than to be provided by Landlord under the Lease.
20. No bicycle, or shopping cart, or other vehicle or arty animal shall be brought into the Promises or the haus,
corridors, elevators or any part of the Building by Tenant.
21. Landlord shall have the right to prohibit the use of the name of the Building or Office Park or any other publicity
by Tenant which in Landlord's opinion tends to impair the reputation of the Building, or Office Park or their desirability
for other tenants, and upon written notice from Landlord, Tenant will retrain from or discontinue such publicity.
22. Tenant shall not erect any serial or antenna on the roof or exterior walls of the Promises or Building.
23. Tenant shall place chair pads beneath each dsek chair in order to protect the carpet in the Promises.
—2—
EXHIBIT aha • t� !�,
it
STANDARD INDUSTRIAL SUBLEASE
American Industrial Real Estate Association
1, parties. rnis Sublease.dated,for reference purposes only, FebruarV 12 .t9 1 is made oy aro
telween City of San Juan Capistrano
(herein called"Sub4s6or")and San Juan Capistrano Research
?nstitute, a not-for-profit organization therein called Subiessee
2, Premises. Sublessor mereby subleases 10 Subtea6es ani Si ies hereby Sublease%from Sublessor for tna term.at Ina rental ane upon au C'
•^e cone: ons set forth herein.that certain real property situated in In*County of.._orange
State of Cai.forniacommonly known as 31872 Camino Ca: Distrano, San Juan Capistrano
anc aescr nec as approximately 9.230 rentable square feet, consisting of an antira frpa-
standing building located within the Birtcher Plaza Projgrt
Sa C rea':'ooerry iret,i ing the land and all Improvements thereon,Is neretnalier called the-Premises"
3. Term. One 1
3 r Term. Tne term OI tnig$uOteaSe Shelf ba tar ) Year _
comme^c rg on 1J, 1 QQ3 and ending on February 11, 1994
„mess scone'iermmated pursuant to any provision hereof.
3 2 Delay in Commencement. Notwltnstanotng said commencement data. II for any reason Sublessor cannot deliver possession Of ine
P'emises to SutlGSsee on said dale. Sublessor shall not be sti to any Igbitily therefore. nor small such failure affect in,vabddy of Ines lease or
tine Obinya0prs of $uwesse0 mort r or extend the form 110,601, but in Such Case Subleases shall net be obligated to pay rant wr i possession of
^.e Premises Is teri to Sublessee: provided. however, that .1 Sublessor small not have delivered possession of the Premises vi sixty 16'1
Days from sale commencement Cala.Sublessee may.at Subleases a option,by notice to writing to Sublessor wnhtn ten(101 Days thereafter cancel
-s Si. 'n whicn event the parties shall be discharged from all obligations thereunder. If Si N6 Ocouples the Premises prior to sa d
qm-emCem Gn( datesuer, occupancy shall be subject to all provisions hereof. such Occupancy shall not advance the termination Cale arc
Sublessee small pay rent toe such period at the iri monthly rates set forth below.
4 pent. 5.11 snail pay to Sublessor as rent for the Promises equal monthly payments Of 5 4,153.50 in arvamce on tme
1st day ct each martin 01 fine term hereof Sublessee Shall pay Sublessor upon lma execution hereof S 21353.65 as rent for the
17 days during the month of February, 1993
Per, or any Period during Ne term hereof which i3 for less than oma month shall be a prorata portion of trio monthly m3uument. Rent snav be
cara.le.n Iawiu: money Of the united States 10 Sublessor at the address sated nersln or to such other persons or at such other places as Sublessor
may Designate in writing.
5. security Deposit. Subiesses Shari deposit with Sublessor upon execution hsei 61000 as security for Sublessees la.mi
berl0r—.a'ee of Sublessee s Obligations hereunder.If Sublessee fails to pay rent or other charges due nerewri or otherwise astaults with respect
Io any p'C+i 4ch of this Sublease. Sublessor may use apply of retain all or any portion of sato deposit for In*payment Of any rent or arms,emerge in
beau l :"c' '^e payment of any Other sum to which Sublessor may became dbflgated by reason of Sublessees default.or to compensate Sublessor
:' a-, :ts c' Zarri whicn$ubtessor may Si thereby. It Sublessor so uses or applies all or any portion of sato C6posn.Sublessee small wenn
le^ :a.s alter Sur inert Demand therefore deposit Cash wttn Sublessor in an amount sufficient 10 restore said Deposit l0 fine fu's amount
'2'e -ab:.e s'alec and SubtesSees faith to do so shall be a material breach 01 this Supleass.sublessor shall not be required to keep said aeoosit
se",ate ',c, its general accounts. If Subtessee performs sit of Supless"a obligations hereunder, said deposit. Or so much thereof as has nor
'ne,e!c'Ore teen aPDliea by $ublassor. small be returned. without payment of interest or other increment for its use to sublease*for aI Sublessor s
cd Dor I: 'me 'ass assigneeit any. of SubtessM s interest nereuri At the explrellbn Of the term Iii ani after Subtesses has vacated ICs
Premises nb trust reiatiomsmip is created nersln b*tw**n suclsi and Sublease*with resoect t0 sold Security 0*00311.
a. Use. operation of a not for profit institution
6 1 Use. Tree Premises shall paused arta Occupied Only for
specializing in pleetia science, edyicatipn and research and for noomerpurpose
6.2 Compliance with Law.
ial Suo'essor warrants t0 Sublesiq that the Premises. in Is existing state. but without regard 10 the use for whom Sublessee will use tore
P.e,ses Does not violate any apincaple bwlafng CaOe regulation ororeimance at line time that this Subtaas*is executed,?nth*event final 1,s oetei nee
'^a:'^ s wd"a^ty has been ,,oiate0.IOM J Shall be the obligation of the Sublessoe after written notice from Sublease*. 10 promptly, at Suolessor s sb,e
::s' a-:e•:e^se rectify any such ti in Ine event that Su Dlessee coos not give IO Sublessor written notice of the ii of this was rd n;y w�tnip I
.e2- --- -e CCmmencemenl of the term 0t Ims Sublease.it Shall be conclusively deemea trial such violation did not exist and the Coerechon o''ne same
$-a :e '^e ::'yidtor of the Sudlessee.
-sept as provided in paragrapn 6 2(a). Sublessee small. at Sublessees expense, Comply promptly wiln all arpiioacie statutes
-'] -a-Des es reguia'ions. orders restrictions of record, ane requirements in effect during the term or any part OI the term nereof regaP ng :rte
.se i 5_o essee of tine Premises. Sublessee small not use or permit the use 01 this Premises in any manner that wbl terra 10 create waste Or a
-. sa^:e :' "here small be more mam one tenant of the ouflcifng containing the Premises.which shall tend to dislueb Such olmer tenants
c om imom o1 Prem Het. Except as provider in paragrapn 6.2(s)$uotessae h*re0y accepts the Premiss in that,COOOtIOn eugnrnv as of fire
ae e eii nereof sub'ect to all applicable zoning.m,i county and state taws.ordinances.and regulations governing ane 'e;. a:,ng
^e „se o :^e Premises and accepts 'his Sublease 3uoiect Imeret0 arc to all matters disclosed thereby amid by any eNn oils It ec re ib
Sa essee ac,rowieDges Imat ne0ner Su OlessOr no, Su Olessor s agents nave made any representation or warranty as 10 tire su.-a-' sly of f^e
P-e— :es':- :-e concis c'3,1 s 0i mess
7 Master Lease
' 5-: esso, s the 'essee O' tore P,emises oy vi r,tae of a lease hereinafter retorted to as line"Master Lease a copy of Suri s a::a:i nere'b
—a,.e: e.- b bate: February 161,9 93 wherein Sirtcher Pacific, a California general partnership
s 'e ess:' ^e'e nape• refere0 to as the'-Masts,Lessor
2 '^ s Suoiease is and small be it all times subject and subordinate 10 the Master Lease.
'e,ms conditions and respective Obligations of Sublessor and Subl*ss*• Io each plmaf under this Sublease sinal' be !me 'e,,s arc
told-Lens 0' ',rte Master Lease except for those prOvisiOns of 'me Master Lease Suns, are directly contradicted by this Sualesse in vi event ire
'e,^•s of I- s Si ieaSe doc_—ii small control over me Master Lease. Therefore 'o 'n•purposes of this SuOloate.Wmarover In theMaster Lease the
«o'D Lesso, s used t s-s Ce aoeeh00 to mean sme SubiesSor herein amp Sur*,aver in the Matter Lease the word "Less** is u$to I malt be
Deemed to rream the Suit essee retain.
rg Ire term o' this Si and for all p*IiOps S,0sequenl toe co gations whicn have arisen prior to the termination 01 tris Si se
5_:essee aces mereoy expressly assume Ana agree IO perlorm and comply wf 111. for Tne bangle of Suo'easor and MfSter Les Or, Wn arta every
co y^ab on di S..O,essor under Ime Master Lease except toe fine tollov ing paragraphs vi are excluded 'nerelrom ' etri V Pnfa l 'i_
under Article I.G. shall mean Four Thousand One Hundred Fifty-Three and 50/100 Dollars
$4, 153.50) ($0.45 Per rentable square foot per month) .
C A—i ca- ___i.a r.ea Estate Assoc.at.on •c-
x --e coi,gat.or,s mai Suolessee has assumed under paragraph 7 a thereof are hereinafter referred to as the 'Sublessee S Assume-_
^c ga: c-s Tne coi gaiions Inal Suolessee has not assumed under paragraph 7.a hereof are hereinafter referred 1025 the"Sublessor s Remaining
C ga! chs
6 S„o,essee snail mold Sublessor free and harmless of and from an liability. judgments, Costs, damages. claims or demands. including
,eascname attorneys fees. aris.ng out of Sublessee s failure m comply with or Derform Subleases'2 Assumed Obligations.
7 7 5„cessor agrees to maintain the Master Leasa ounng the entire term of this Sublease, subject. however, to any earlier termination of the
b'.aste' 'Lease wiln0ut the fault of Ina Sublessor, and to Comply with or Carol SubleSsor'a Remaining Obligations and 10 hold SubteSsee free no
na,mmss of and from all liability. judgments. Costs. damages. Claims Or demands arising Out Of SubleSSOrs failure 10 comply with or perform
S_J essor s Remafnin0 Obi,oations
7 8 SuDlessor represents t0 Sublessee that the Master Lease ism full force and effect and that no default exists on the Carl Of any party to me Master
Lease
8. Assignment of Sublease and Default.
8 1 $uoiessor hereby assigns and transfers to Master Lessor the Subtessor'a Interest In this Sublease and all rentals and income arts'^g
t^erefrom subject however to terms 01 Paragraph 8.2 hereof.
8 2 Master Lessorby executing this document. agrees that until a default Shalt occur in the performance of Sublessor s Obligations under Imo
'faster Lease. Inst SuDlessor may receive. collect antl snjOy in* rents accruing under this Sublease. However, if Sublessor small default in Ine
.erformance of nS obligations to Master Lessor then Master Lessor may, n its Option,receive and collect,directly from Sublessee.all rent owing and
10 be owed under this Sublease. Master Lessor Shell not. by reason of this assignment Of the Sublease nor by reason Of the collection of the rents
from the Svoiesses. Oe deemed liable t0 Suble Sse*for any failure of the Subles Sear to perform and Comply with SuOlessOr's Remaining Oobgations
8 3 Subtessof hereby irrevocably authorizes and directs Sublease*. upon receipt of any written notice from the Master Lessor stating that a
default exists in lie performance of Sublessor s obligations under the Master Lease. to pay to Master Lessor the rents due and to become due under
Ina Sublease Suofessor agrees that Sublease* small have the right to rally upon any such statement and request from Master Lessor. and Ina:
Sublessee small pay Such rents t0 Master Lessor without any obligation or right to inquire as to whether such default exists and notwithstanding any
notice from or claim from Sublessor to the contrary and Sublessor small have no right or claim against Subleases for any such rents $o paid by
SLDlessee
6 a No changes or modifications shall be made to this Sublease without the consent of Master Lessor.
9. Consent of Mester Lessor. ...�
9 1 In the event final the Master Lease requires that Sublessor obtain the Consent of Master Lessor to any subletting by Sublessor then. this
Sublease snarl not be effective unless. within 10 days of the date hereof, Master Lessor signs this Sublease thereby giving its consent to tmis
Subletting.
9.2 in inti event that the obligations of the Sublessor under the Master Lease have been guaranteed by third parties then this SuDiease no,Ire
Master Lessor s consent. Shan not be effective unless.within 10 days of the date hereof,said guarantors sign this Sublease thereby giving guarantors
consent to this Sublease and the terms thereot.
9.3 In the event that Master Lessor does give such consent then:
lal Such consent will not release Sublessor of its obligations of alter the primary liability Of Sublessor t0 Pay the rent and perform and comply
with all of the obligations of Sublessor to be Performed under the Master Lease.
(D) The acceptance of rent by Master Lessor from Sublessee or any one else liable under the Master Lease shall not be deemed a waiver oy
Master Lessor of any provisions of the Master Lease.
Ice The consent to this Sublease Shall not Constitute a consent to any subsequent subletting or assignment.
(d) in the event of any default of Sublessor under the Master Lease. Master Lessor may proceed directly against Subtesspr, any guarantors
or any one else liable under trio Master Lease or this Sublease without first exhausting Master Lessor's remedies against any other person or entity
mole thereon to Master Lessor.
(a) Master Lessor may Consent 10 subsequent subettlngs and assignments of the Master Lease Or this Sublease or any amendments or
modifications thereto without nottly,ng Sublessor nor any one else liable under the Master Lease and without oblalhing their consent and such action
Shan not relieve such Persons from liability.
Ili in the event trial Sublessor shall default In its obligations under the Master Lease, then Master Lessor, at is,option and without being
Obligated to do so. may require Sublessee to atiorn to Master Lessor in which event Master Lessor shall undertake the Obligations Of Sublessor
under this Sublease from Ina time of the exercise of said Option to termination of this Sublease but Master Lessor shall not be table for any pre0aid
rents ror any security deposit Paid by Sublessee.nor shall Master Lessor be table for any Other defaults of the Sublessor under the Sublease
9 a The signatures of the Master Lessor and any Guarantors of Sublessor at the end of this document small constitute their comsent to the terms
of Ins Surcease
95 Master Lessor acknowledges that,to the best Of Master Lessors knowledge,no default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease ,s ,n full force and effect.
96 in the evenuhat Sublessor defaults under its obligations to be performed under the Master Lease by Sublessor.Master Lessoragrees to deliver
to Sublessee a copy Of any such notice of defaull.Subleases shall have the right to ours any default of Sublessor described In any notice of default within
len days alter service of such notice of default on SuWassee If SUCK default is Cured by Suotsssee then Subleases shall have the right Of reimpursemenl
and offset from and against Sublessor
10. Brokers Ree. N/A
a licenser rea.estate Droker, (herein caned Broker),a fee as set forin in a separate agreement between Sublessor and Broker,0r m the even' is no
se.ara:e agreement between Sublessor and Brokerthe sum of S for brokerage services rendered er to Suofessor m
mss :ransac:ron
1C 2 S.Djessor agrees trial d Sublessee exercises any opton or right of first refusal granted by Sublessorin any option or right substantially
s:mdar Inereto either to extend Ina term Of this Sublease, 10 renew this Sublease. 10 purchase the Prem, o lease or purchase adjacent properly
wmcn Suofessor may Own Or In which Sublessor has an Interest. Or d Broker ,s the procuring Ca my lease, sublease. 0r sale pertaining 10 me
Premises or any adjacent properly which Sublessor may own or in which SuDlessor has an ml on as to any of said transactions SuDlessor snail pay
to Broker a fee.in cash,in accordance with the schedule of Broker In effect at the lim xecution of this Sublease.Notwithstanding the loregoing.
S..Dfe Ssor s oDdgation under lois Paragraph 10.2 is limited to a transaction f ubfessor Is acting as a sublessor, lessor or seller
10 3 Master Lessor agrees.by As consent to this Sublease.final if a shall exercise any option or ugnt of first refusal granted to Suciessee by
Master Lessor in connection with this Sublease.or any option or stantialty similar thereto.either l0 extend the Master Lease.t0 renew the Master
Lease Ic c:rcnase the Premises or any part thereof, or 1 r purchase adjacent property whom Master Lessor may own or in which Master Lessor
has an mreresi or it Broker is line procuring Caus y Other lease Or sale entered into between Sublsasee and Master Lessor pertaining to the
°remises. anv Cart thereofor any adjacent which Master Lessor owns or in which if has an interest.then as to any of said transacuoms Master
Lessor sr.a:• pay to Broker a tee, In aCCVrdanCe with the Schedule of Broker In effect at the lime of Its Consent to this Sublease
I' < Al,, fee due from S or Master Lessor hereunder shall be due and payable upon the exercise of any opt,on to extend or renew. as lea any
ex'.ersOn or renewal,u execriton dl any new lease.as to a new lease transaction Of the exercise of a right of Irtsl refusal l0 lease.or Slime Close of
escrow as 10 1m ..Ise of any option to purchase Or Other safe transaction.
10 c ansferee of Sublessors interest m this Sublease.or of Master Lessors Interest In the Master Lease,by adceDdng an aSslgnment lnere0l,
ar -eemed to nave assumed the respective Obligations Of Sublessor or Master Lessor under this Paragra Dh 10. Broker small Da dserved 10 be a
11. Attorney's fees. If any darty Or the Broker named mere in brings an action t0 enforce the terms hereof Or to declare rights hereunder Ina prevailing
car / n ahr sucr, aci,on On trial and appeal. snail be enlined to his reasonable attorney S lees to tie paid by the losing party as fixed by fine Court Tne
cm-s,pm -- inns paragraph snail inure to 'me benefit Of the Broker named herein who seeks to enforce a right hereunder
12. Additional Provisions. (If them ars no additional provisions,draw•line Gwn this pairs to the best printed word atter the space left here. If Nero am additional
provisions,place the mase here).
12.1 22nsent of Master Lessor. Master Lessor hereby consents to this Sublease and
agree to look to Subleases for the performance and satisfaction of all liabilities,
duties and obligations of the tenant under the Master Lease, and to release the Tenant
under the Master Lease (Sublessor) from all much liabilities, duties and obligations
except for the obligation of the Tenant under the Master Lease (Sublessor) to pay
Monthly Rental in the amount of One Thousand Three Hundred Eighty-Four and 50/100
Dollars ($1,384.50) ($0.15 per rentable square foot per month) .
n thrs Sublease has been filled in it has been prepared for submission to your attorney for his approval. No
representation or recommendation is made by the real estate broker or Its age a or employees as to the legal
sufficiency,legal effect,or tax consequences of this Sublease or the transaction relati thereto.
Executed of San Juan Capistrano, CA CITY O SAN AN CAPISTRANO
p,,, February 1993 y
address 32400 Paseo Adelanto, San Juan y
Capistrano, CA 92675 '•Sublessor"(Corporate Sea0
EFecuted at San Juan Capistrano, CA SAN JUAN CAPISTRANO RESEARCH INSTITUTE,
February 1993 A 07123
on BY
31872 Camino Capistrano, San Juan Dougla Nash
address By
Capistrano, CA 92675
"Sublessee"(Corporate Sea0
E+ecuiec ac Laguna Niguel, CA BIRTCHER PACIFIC, a lifornia general
partnersnip
on February 1993 By
27611 La Paz Road, Laguna Ni Rel, CA Arthur . B tche Trustee of the AS
aderess 8ypt
ame6ded, Partner
'Master Lessor"(Corporate Seaq
Ereculec at
c-
address
"Guarantors"
<or mfrs corm, �.,,t icer tmtncan inawrnti ami E,u,t �nomaion 350 Se F,QV11et Sirta Sunt 275. Ler 11etbt. CUtlornte $007, Form ,c, 178 -
expenditure reductions, revenue increases and decreases and anticipated additional expenditures was a
surplus $1,929.
Mr. Scarborough made an oral presentation. Council Member Hausdorfer commended staff for
managing the City's resources.
Aonroval of Adjustments to the 1992-93 City Ocerating Budget:
It was moved by Council Member Hausdorfer, seconded by Council Member Campbell, and
unanimously carried that the proposed adjustments be approved to the 1992-93 City Operating Budget.
4. APPROVAL OF AGREEMENT WITH BIRTCHER PACIFIC FOR LEASE OF
PROPERTY AN JUAN INSTITUTE)
Council Member Nash left the Council Chamber due to a conflict of interest.
Written Communication:
Report dated April 6, 1993, from the City Manager, recommending that the lease agreement between
the City and Birtcher Enterprises for lease of the old Bank of America building located in Birtcher Plaza
be amended to allow the lease payments that were due from December 1, 1992, to February 11, 1993,
to be deferred and applied to a new one-year lease ending February 11, 1994, as requested by Birtcher
Enterprises. The Report recommended that the City also enter into a sublease with the San Juan
Capistrano Research Institute providing for the Institute to make monthly lease payments directly to
Birtcher Enterprises in the amount of$4,153.50, and to assume all monthly costs associated with the
lease.
Mr. Scarborough made an oral presentation and noted that the City Attorney had reviewed the
documents and found them to be complete.
Approval of Lease and First Amendment to Lease with Birtcher Enterprises and Sublease with San Juan
Capistrano Research Institute:
It was moved by Council Member Hausdorfer, seconded by Council Member Vasquez, that:
(1) The Lease Agreement and First Amendment to the Lease Agreement between Birtcher
Enterprises and the City of San Juan Capistrano be approved for the facility known as the old
Bank of America building, in the amount of $1,384.50 per month, for a one-year period
commencing February 12, 1993, and ending February 11, 1994; and
(2) The Sublease Agreement between the City of San Juan Capistrano and the San Juan Capistrano
Research Institute be approved for the same property, in the amount of$4,153.50 per month,
for a one-year period commencing February 12, 1993, and ending February 11, 1994.
The motion carried with Council Member Nash absent.
Council Member Nash returned to the Chamber and resumed her duties.
5. APPROVAL OF MEMORANDUM OF UNDERSTANDING FOR MANAGEMENT
EMPLOYEES (73030)
Written Communication
Report dated April 6, 1993,from the City Manager,forwarding the Memorandum of Understanding for
the 1992-93 fiscal year for Management Employees. The contract clarifies the use of bereavement leave
and sick leave in time of personal necessity and provides for a reimbursement of up to $300 for
wellness-related expenses in the existing Optional Benefit Program. Salaries and benefits will be
maintained at the levels established in July 1991.
City Council Minutes -11- 4/6/93
AGENDA ITEM April 6, 1993
TO: Honorable Mayor and City Council
FROM: George Scarborough, City Manager
SUBJECT: Lease Agreement with Birtcher Enterprises for Community
Facility (San Juan Capistrano Research Institute)
RECOMMENDATION•
By motion, approve the lease agreement and first amendment to the
lease agreement between Birtcher Enterprises and the City of San
Juan Capistrano for the facility known as the old Bank of America
building for a one year period commencing February 12 , 1993 and
ending February 11, 1994 ; , and
By motion, approve the sublease agreement between the City of San
Juan Capistrano and the San Juan Capistrano Research Institute for
the same property for a one year period commencing February 12,
1993 and ending February 11, 1994 .
BITUATION
In February, 1990 the City entered into a three year lease with
Birtcher Enterprises for property known as the former Bank of
America Building, now a part of Birtcher Plaza. This building is
located on El Camino Real adjacent to the Historic Town Center
Site. The purpose of the lease was to provide a location for
community meetings and public seminars, and to provide assistance
to the San Juan Capistrano Research Institute, a non-profit
scientific research organization dedicated to planetary science
studies and education.
During the three years since the lease began, the San Juan
Capistrano Research Institute has used the Birtcher Enterprises
owned facility as its headquarters and has conducted seminars
involving leading scientists from across the United States. In
addition, the facility has served as an educational center for
local school children, increasing their understanding of the earth
and stimulating interest in the physical sciences.
The City of San Juan Capistrano has been paying a monthly rent to
Birtcher Enterprises since February, 1990 according to the terms
of the agreement. The San Juan Capistrano Research Institute has
been paying rent to the City to assist in offsetting the monthly
costs for the lease payments.
FOR CITY COUNCIL AGEN /�/�
2
In December, 1992 staff was approached by Birtcher Enterprises
requesting an alternate payment arrangement for the remaining two
and a half months of the original agreement. Birtcher Enterprises
asked the City to consider deferring the monthly rent for the
period of December 1 1992 to February 11, 1993 . The deferred rent
would be applied to a new one year lease, scheduled to run from
February 12, 1993 to February 11, 1994 . Birtcher Enterprises's
reason for the request was to assist the San Juan Capistrano
Research Institute in remaining at the old Bank of America site for
another year.
The request was made informally, and a proposed new lease was not
submitted by Birtcher Enterprises for City review until March 9.
This is why this item is presented at this time for consideration,
rather than a date prior to the expiration of the original
agreement.
The proposed new lease changes the rent payment schedule for the
period of December 1, 1992 through February 11, 1993 which total
$16,614. The proposed lease spreads this amount over a new 12
month period. During this 12 month period, the City is being asked
to pay a rent of $1, 384.50 each month, for an annual total of
$16, 614.
If the City enters into a new agreement with Birtcher Enterprises,
one of the terms of the new lease would be a release of the
obligations specified in the prior lease of the premises, which
expired February 11, 1993 . This provision is covered in Exhibit C
of the lease, subtitled the first amendment to the lease. Also,
the City would execute a sublease with the San Juan Capistrano
Research Institute for the property. This sublease would require
the Institute to make monthly rental payments directly to Birtcher
Enterprises in the amount of $4, 153 .50. Additionally, it would make
the Institute responsible for all other monthly costs associated
with the lease of the property such as common area maintenance
costs, taxes and utilities.
A proposed new lease with Birtcher Enterprises is attached for City
Council consideration. The new lease would be in effect from
February 12, 1993 to February 11, 1994. Though February 12, 1993
has already passed, it is proposed that the term of the lease begin
on that date so that there is continuity of the relationship
between the City, Birtcher Enterprises and the San Juan Research
Institute. This term also allows for a smooth transition in the
monthly payment schedule proposed by Birtcher Enterprises.
Exhibit G of the proposed new lease with Birtcher Enterprises is
the sublease with the San Juan Capistrano Research Institute. This
exhibit provides for the payment of rent and all other expenses
associated with the master lease which would normally be the
responsibility of the City as the master lessee. This exhibit
identifies the San Juan Capistrano Research Institute as the
3
responsible party for required common area maintenance costs, taxes
and utilities and services costs. The only responsibility of the
City would remain the payment of a monthly rent of $1, 384 .50.
The City is not obligated to enter into a new lease agreement for
the property. If no action is taken to approve a new lease
agreement with Birtcher Enterprises and a sublease agreement with
the San Juan Capistrano Research Institute, staff will make the
final rental payments due to Birtcher Enterprises under the terms
of the original lease agreement. Any continuance of the
relationship between Birtcher Enterprises and the San Juan
Capistrano Research Institute beyond the terms of the City's
initial lease would be at the mutual effort of these two
organizations.
The San Juan Capistrano Research Institute has been performing a
valuable function for the last three years. Through its efforts
and activities more is known about the earth and about planetary
science. It has been successful in bringing national attention to
San Juan Capistrano through its seminars and activities, and it has
been an important resource for the children of our community.
I believe it is consistent with the City's goal of preserving the
qualify of life for our residents and visitors to facilitate the
presence of the San Juan Capistrano Research Institute in the
community for another year. For this reason, I recommend the City
enter into a lease agreement with Birtcher Enterprises for the
period of one year, commencing February 12, 1993 and running
through February 11, 1994, for the facilities in Birtcher Plaza.
I further recommend the City enter into a sublease with the San
Juan Capistrano Research Institute for their use of these
facilities for the same one year period.
COMMISSION/BOARD REVIEW AND RECOMMENDATIONS:
Not applicable
FINANCIAL CONSIDERATIONS:
The financial obligation of the City for this new lease is
$1, 384. 50 per month, or $16, 614 over the twelve month term of the
agreement. This amount is the same amount the City would have
expended by paying the rent due to Birtcher Enterprises under the
terms of the old agreement from the period of December 1, 1992
through February 11, 1993 .
The approval of the lease and sublease do not constitute a new
expenditure item and will not result in any new costs for the City.
The San Juan Research Institute will pay for all associated
maintenance costs, tax liabilities and utilities and services
4
required under the new agreement.
Funds for the City provided rent to Birtcher Enterprises were
included in the 1992-93 operating budget. If this new lease is
approved, the funds needed to make the monthly payments from July
1, 1993 to February 11, 1994 will be included in the 1993-94
operating budget. This will result in an offsetting savings in the
1992-93 budget based upon the proration that will occur.
The original lease agreement with Birtcher Enterprises required the
City to deposit $6,000 as a security deposit. This deposit will
be rolled over into the new agreement, if approved, and would be
returned to the City at the completion of the one year lease
period.
NOTIFICATION•
Birtcher Enterprises
San Juan Capistrano Research Institute
ALTERNATE ACTIONS:
1. a. By motion, approve the lease agreement and first
amendment to the lease agreement between Birtcher
Enterprises and the City of San Juan Capistrano for the
facility known as the old Bank of America building for
the period of February 12, 1993 through February 11,
1994 ; and
b. By motion, approve the sublease agreement between the
City of San Juan Capistrano and the San Juan Capistrano
Research Institute for the same facility for a one year
period from February 12, 1993 to February 11, 1994.
2. Do not approve the new lease agreement with Birtcher
Enterprises or sublease agreement with the San Juan Capistrano
Research Institute, and direct staff to make the final rental
payments due to Birtcher Enterprises under the terms of the
original lease agreement.
3 . Request more information from staff.
5
RECOMMENDATION
By motion, approve the lease agreement and first amendment to the
lease agreement between Birtcher Enterprises and the City of San
Juan Capistrano for the facility known as the old Bank of America
building for a one year period commencing February 12, 1993 and
running through February 11, 1994; , and
By motion, approve the sublease agreement between the City of San
Juan Capistrano and the San Juan Capistrano Research Institute for
the same facility for a one year period commencing February 12,
1993 and running through February 11, 1994.
-----------------------------------------------------------------
-----------------------------------------------------------------
Respectfully submitted,
o g Scarborough
C' y nager
GS:JMM:jm
Attachments: Letter from Birtcher Enterprises
Lease Agreement ( In City Council Packets Only.
Copy on File with City Clerk's Office for public
inspection)
• E31RTCHER ENTERPRISE
March 24, 1993
Mr. George Scarborough
City Manager
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Re: Lease Dated February 16, 1993 and
Sublease Dated February 16, 1993 for
31882 Camino Capistrano, San Juan Capistrano
Dear Mr. Scarborough:
In order to facilitate our lender's concerns and San Juan
Capistrano Research Institute's financial restraints, I have
previously forwarded to you the above referenced Lease and
Sublease. Essentially, the end result of these documents will be
to transfer the City's remaining lease obligations of $16, 614 under
the Lease dated January 29, 1990, from being due and payable
between December 1, 1992 to February 1, 1993 , to being due and
payable over the 12 month period of February 12 , 1993 to February
1, 1994. By deferring these payments into the future, the new rent
is stabilized at a rate closer to market, thereby making the new
Lease acceptable to the lender.
Please call me should you have any questions.
Sincerely,
Daniel J. O'Hare
Leasing Director
CI'YSIC.3/D0H/bly
cc: Mr. Robert Anderson
Mr. James Petrilli
MAR 2 41993
A MEMBER OF THE SIRTCHER FAMILY OF COMPANIES
2'61' l+P3;911n• PO Bo,"30309•3' -'1 11d1 •Oaidom.a 926010009
s.ucwe•
-4-83' 803' •°acs mde•ba3- 461
Co�J�i . 2�
CITY CLERK'S DEPARTMENT - ACTION REMINDER
- -`7 TO Mary Laub, Management Assistant II 5_ /J 4
J- 7
FROM: Dawn Schanderl, Deputy City Clerk DATE: No-eefR6eff 3-0, 1044
SITUATION:
On April 6, 1993, the City Council of the City of San Juan Capistrano approved a lease
agreement with Birtcher Enterprises and a Sublease Agreement with San Juan Capistrano
Research Insititute.
ACTION REQUESTED:
The lease agreements are due to expire on February 11, 1994. Please let this office know
if the agreements will be closed out at this time.
ACTION TO BE TAKEN:
Ql('lQPi7�1,Piy(�/j •�:i b")t, a''I���1'-{ d� ,lL6t.g�2Q_ l� L'L/�'J�C�.,
DATE WHEN NEXT ACTION (S) SHOULD BE TAKEN:
SIGNATURE OF OFFICIAL TAKING ACTION: �—
DATE SIGNED:
***FOR CITY CLERK'S DEPARTMENT USE ONLY***
Tickler Date: 11/30/93
Deadline Date: 02/11/94
cc: City Attorney
Department Head /
(birtcher/600.20)
�► ate„ •
a
Y MEMBERS OF THE CRY COUNCIL
E CAMPBELL
GARY J.
'j JJ GARY HAUSOORFER
JONESGIL
"�� iA1011rru1[i CAROLYN NASH
® If1I961 JEFF VASOUEZ
1776776
CITU MANAGER
GEORGE SCARBOROUGH
April 9, 1993
Mr. Daniel J. O'Hare
Leasing Director
Birtcher Enterprises
P. O. Box 30009
Laguna Niguel, California 92607-0009
Re: Lease of Facility - San Juan Capistrano Research Institute
Dear Mr. O'Hare:
At their regular meeting held April 6, 1993, the City Council of the City of San
Juan Capistrano approved the lease agreement and first amendment to the lease
agreement with Birtcher Enterprises for the facility currently occupied by the San
Juan Capistrano Research Institute. The lease is for the one-year period ending
February 11, 1994, at $1,384.50 per month. A fully-signed copy of the lease is
enclosed for your files.
If you need any further information, please let us know.
Very truly yours,
Cheryl JO 'ohson
City Clerk
Enclosure
cc: City Manager
Mary Laub (with copy of Lease)
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 499-1171
I �
J1� MEMBERS OF THE CITY COUNCIL
, GARYCOLLENE CAMPBELL
GARY
® JEFF VES
iAIAAAAAuIA CAROLYN NASH
M uuunm 1961 JEFF VASOUEZ
1776
CITU MANAGER
GEORGE SCARBOROUGH
April 9, 1993
Mr. Douglas B. Nash, Director
San Juan Capistrano Research Institute
31878 Camino Capistrano
San Juan Capistrano, California 92675
Re: Lease of Facility - San Juan Capistrano Research Institute
Dear Mr. Nash:
At their regular meeting held April 6, 1993, the City Council of the City of San
Juan Capistrano approved the lease agreement and first amendment to the lease
agreement with Birtcher Enterprises for the facility currently occupied by the San
Juan Capistrano Research Institute. The Council's action included approval of the
sublease of the facility between the San Juan Capistrano Research Institute and
the City, for the one-year period ending February It, 1994, at $4,153.50 per
month, payable directly to Birtcher Enterprises. A fully-signed copy of the
sublease is enclosed for your files.
If you need any further information, please let us know.
Very truly yours,
02--
Cheryl Johnson
City Clerk
Enclosure
cc: City Manager
Mary Laub (with copy of Sublease)
32400 PASEO ADELANTO, SAN JUAN CAPISTRANO, CALIFORNIA 92675 0 (714) 493-1171
E31RTCHER ENIc.RPZISES
6CC 2T
March 24 , 1993
Mr. George Scarborough
City Manager
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Re: Lease Dated February 16, 1993 and
Sublease Dated February 16, 1993 for
31882 Camino Capistrano, San Juan Capistrano
Dear Mr. Scarborough:
In order to facilitate our lender's concerns and San Juan
Capistrano Research Institute's financial restraints, I have
previously forwarded to you the above referenced Lease and
Sublease. Essentially, the end result of these documents will be
to transfer the City's remaining lease obligations of $16, 614 under
the Lease dated January 29, 1990, from being due and payable
between December 1, 1992 to February 1, 1993 , to being due and
payable over the 12 month period of February 12 , 1993 to February
1, 1994 . By deferring these payments into the future, the new rent
is stabilized at a rate closer to market, thereby making the new
Lease acceptable to the lender.
Please call me should you have any questions.
Sincerely,
Daniel J. O'Hare
Leasing Director
CI'YS1C.3/D0H/bkr
cc: Mr. Robert Anderson
Mr. James Petrilli
MAR 2 41993
A MEMBER OF THE BIRTCHER FAMILY OF COMPANIES
27611 La Paz Road•PO Box 30009•Laguna Niguel•California 92607-0009
Telephone•714•831-8031 •Facsmtle•643-7461
INFINITE IMAGING SYSTEMS
2101 1 Moulton Paokway, Suite #E-8
LwImialfills, CaMorma 92653
f 7 11�4) 4 72-217 7 7