1990-0206_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
� t
TABLE OF CONTENTS
Arica Page
Number Title Number
I. TERMS AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
N. PROPERTY LEASED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A. Premises . . . . . . — . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B. Common Areas . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
III, TERM . . . . . . . . . . . . . . . . . . . .
A. Initial Term . . . . . . . . . . . . . . . . . . . . . . . .
S. Acceptance and Suitability . . . . . . . . . . . . . . . . . . . . . . . . . . .
IV. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. Monthly Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
B. Consumer Price Index Increases — . . . . . . . . 2
V. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
V1. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
vil. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
VIII. USE OF PREMISES - - . - . . . . . . . . . . . . . . . . . . . . . . . . . . 3
A. Permitted Uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
B. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — - - - - . . . . . . . . . 3
C. Landlord's Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Ix. SERVICE AND UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
X. TENANT'S TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
X1. MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - . . 4
A. Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - - . . . . . . . . . . . . 4
B. Tenant's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
C. Landlord's Right to Make Repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D. Condition of Premises Upon Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
XII. REIMBURSEMENT OF COMMON EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
A. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
B. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C. Rebate or Additional Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
XIII. ALTERATIONS,ADDITIONS AND TRADE FIXTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
XIV. MECHANIC'S LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
XV. ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XVI. DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Minor Insured Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Major or Uninsured Damage . . . . . . . . . . . . . . . . . . . . . . . . 6
C. No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
XVII. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
A. Tenant's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
B. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
XVIII. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
A. Total or Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
B. Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C. Abatement in Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D. Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . - . . . . . . 8
E. Transfer of Landlord's Interest to Condemnor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
XIX. HOLDING OVER . . . :. . . . . . . — . . . . . . . . . . . . . . . . . . . . . 8
XX. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
XXI. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Xxii. MORTGAGE PROTECTION/SUBORDINATION . . . . . . . . . . . . 9
A. Subordination . . . . 9. . . 9
B. Attomment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
XXIII. TRANSFER OF LANDLORD'S INTEREST/ESTOPPEL
CERTIFICATE,FINANCIAL STATEMENTS . . . . . . . . . 9
A. Estoppel Certificate 9
B. Furnishing of Financial Statements 10
C. Liability of Transferee . . . . . . . . . . . . . . . 10
(1)
Article Page
Number Title Number
XXIV. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . 10
XXV. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
XXVI. LATE PAYMENTS;INTEREST AND LATE CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
A. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
B. Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. Consecutive Late Payment of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
D. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXVII. BROKER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXVIII. RELEASE OF PARTNERS OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXIX. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXX. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
XXXI. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. Paragraph Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
B. Incorporation of Prior Agreements;Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
D. Short Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
E. Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
F. Examination of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
G. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
H. Surrender of Lease Not Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1. Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
XXXII. EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
EXHIBIT"A"-Floor Plan of the Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
EXHIBIT"B"-Diagram of the Industrial Park . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXHIBIT"C'-Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
EXHIBIT..D„- XVsK* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT-E.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT"F.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXHIBIT-G.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AddendumI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
0�)
INDUSTRIAL BUILDING LEASE
(MULTI-TENANT)
THIS LEASE,dated as of the Lease Date,is entered into by and between Landlord and Tenant.
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 Capistrano
C. "Lease Date"means January 29, 1990
D. "Building"means the building in which the premises are located,which Building has approximately 9,230
net rentable square feet and the following address: 31882 Camino Capistrano, San Juan Capistrano
E. "Premises" means that certainspace loon the 1St 5 2nd floor of the Building and con-
sisting of approximately Nine Thousand Twocated Hundred Thirty ( 9.230 )net rentable
square feet,as more particularly shown on Exhibit"A"attached hereto and incorporated herein by this reference.
F. "Industrial Park"means the industrial development of which the Building is apart,as more particularly shown
on Exhibit"B"attached hereto andincorporated herein by this reference.
G. "Term"means Three (3) Years
H. "Commencement Date"means February 12, 1990
I. "Expiration Date"means February 11, 1993
J. "Monthly Rental"means Five Thousand and Seventy Seven
Dollars($ 5,077 ) (s 0.55 per square foot per month),subject to adjustments as set
ch
forth in Article"IV. RENT, C. Rent SO
K. "Security Deposit"means Six Thousand
6,000
DoIL.�(PermittedUse"means ) General Office use, only.
M. "Broker"means None .
N. "Landlord's Address for Notice"means Birtcher Pacific, 27611 La Paz Rd. , Laguna
Niguel , CA 92656-3998, Attn: Property Manager
O. "Tenant's Address for Notice"means City of San Juan Capistrano, 32400 Paseo
Adelanto, San Juan Capistrano, CA 92675, Attn: Steven P. Jullian
11. PROPERTY LEASED
A. PREMISES
Upon and subject to the terms, convenants 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.
Ill. TERM
A. INITIAL TERM
The Term of the Lease shall commence on the Commencement Date,and shall continue,subject to earlier ter-
mination as provided herein,until the Expiration Date.Tenant agrees that Landlord shall have no liability,nor shal I Ten-
ant be entitled to terminate or cancel this Lease,if the Term does not commence by the Commencement Date.In the
event permission is given to Tenant to enter or occupy all or a portion of the Premises prior to the Commencement
Date,such occupancy shall be subject to all of the terms and conditions of this Lease.
B. ACCEPTANCE AND SUITABILITY
Tenant agrees that by taking possession of the Premises it will conclusively be deemed to have inspected the Pre-
mises and found the Premises in satisfactory condition. Tenant acknowledges that neither Landlord, nor any agent,
employee or servant of Landlord, has made any representation with respect to the Premises,or the Building,or with
respect to the suitability of them to the conduct of Tenant's business,nor has Landlord agreed to undertake any modifi-
cations,alterations,or improvements of the Premises,or Building,except as specifically provided in this Lease.
IV. RENT
A. MONTHLY RENTAL
Tenant shall pay to Landlord during the Term,the Monthly Rental in the amount set forth in Article"I.TERMS AND
DEFINITIONS.J.",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 shall
designate, without any prior demand therefor and without any abatement,deduction or setoff whatsoever. Monthly
Rental for the first month or porion of it shall be paid upon the execution hereof. If the Commencement Date should
occur on a day other than the first day of a calendar month,or the Expiration Date should occur on a day other than the
last day of a calendar month,then the rental for such fractional month shall be prorated on a daily basis based upon a
thirty(30)day calendar month.
1
B. CONSUMER PRICE REX INCREASES is
The Monthly Rental payable by Tenant under this Article"IV.RENT'shall be increased upon the expiration of
the twelfth (12th)calendar month of the Tenn and upon the expiration of each twelve It 2) month period thereafter
according to the increase in the"Consumer Price Index",as hereinafter defined.As used herein,the term"Consumer
Price Index"shall mean the Consumer Price Index for all Urban Consumers (all items)as published by the United
States Department of Labor,Bureau of Labor Statistics for the Los Angeles/Long Beach/Anaheim Metropolitan Area
(1967=100).The amount of such increase in the Monthly Rental shall be determined by multiplying the Monthly Rental
by a traction,the denominator of which shall be the most recent Consumer Price Index figure published prior to the ac-
tual Commencement Date, and the numerator of which shall be the most recent Consumer Price Index figure pub-
lished prior to the date of such adjustment;provided,however,that in no event shall the Monthly Rental for any month
be less than the Monthly Rental for the immediately preceding month.Should Landlord lack sufficient data to determine
the adjusted Monthly Rental on the date of any such adjustment,Tenant shall continue to pay the Monthly Rental pay-
able immediately prior to such adjustment date.As soon as Landlord obtains the necessary data,it shall determine the
Monthly Rental payable from and after such adjustment date and shall notity Tenant of the adjustment in writing.
Should the Monthly Rental for the period following such adjustment date exceed the amount previously paid by Tenant
for such period,Tenant shall forthwith pay the difference to Landlord.If the Consumer Price Index is discontinued or re-
vised during the Term,such other government index or computation with which it is replaced shall be used in order to
obtain substantially the same results as would be obtained if the Consumer Price Index had not been discontinued or
revised.
V. SECURITY DEPOSIT
Upon execution of this Lease,Tenant shall deposit with Landlord the Security Deposit for the performance by Ten-
ant of all terms,covenants and conditions of this Lease.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
Premises or to perform any other term,covenant or condition contained herein,Landlord may(but shall not be required
to),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.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 cov-
ering(i)the business(es)operated by Tenant and by any subtenant of Tenant on the Premises,(ii)operations of inde-
pendent contractors engaged in construction,and(iii)contractual liability,with a limit of not less than One Million Dol-
lars($1,000,000.00)combined single limit per occurrence;such insurance may be fumished under a"primary"policy
and an"umbrella"policy,provided that it is primary insurance and not excess over or contributory with any insurance in
force for Landlord;
(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;and
(3)worker's compensation insurance,with coverage as required by the State of Califomia.
Each insurance policy obtained by Tenant pursuant to this Lease shall contain a clause that the insurer will pro-
vide 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 Best's Financial Class X and Best's Policy Holder Rating"A".
Except for 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 poli-
cies,non-contributing with or in excess of any coverage which Landlord may carry,with loss payable clauses satisfac-
tory 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 matter limit the liability of Tenant under the terms of Article"VII.INDEMNITY"
below.Not more frequently than every two(2) ears,it,in the reasonable opinion of Landlord,the amount of liability in-
surance specified in this Article "VI. INSURANCE" is not adequate, in view of increased judgments and verdicts
granted for injury to persons or damage to property,the above-described limits of coverage shall be adjusted by Land-
lord,by written notification to Tenant,in order to maintain insurance protection at least equal to the protection afforded
on the date the Tenn commences.
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 carrier,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 Premises are a part,in an amour:at least equal to the full replacement cost thereof;and
(2)such other insurance as Landlord deems necessary in its 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 Premises and Building,as their interests shall ap-
pear.All insurance premiums for Landlord's insurance shall be included in Common Operating Costs,as described in
Article"XII.REIMBURSEMENT OF COMMON EXPENSES"below.
2
VII. INDEMNITY •
Tenant shall defend and indemnity Landlord and save it harmless from and against any and all liability,damages,
costs,or expenses,including attorney's fees,arising from any act,omission or negligence of Tenantor its officers,con-
tractors, licensees,agents,servants,employees,guests, invitees,or visitors in or about the Building or Premises,or
arising from any breach or default under this Lease by Tenant or arising from any accident, injury or damage, how-
soever and by whomsoever caused,to any person or property occurring in or about the Building or Premises.All prop-
erty of Tenant kept or stored on the Premises or in the Building shall be so kept or stored at the risk of Tenant only,and
Tenant shall hold Landlord harmless from any claims arising 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.None of the events
or conditions set forth in this paragraph shall be deemed a constructive or actual eviction or entitle Tenant to any abate-
ment or reduction of rent.
Vlll. 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 Premises 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 Premises to be used for any improper,immoral,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Pre-
mises.Tenant shall not commit or suffer to be committed any waste in or upon the Premises.
B. COMPLIANCE WITH LAWS
Tenant shall not use the Premises 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 Building or the Industrial Park,now in force or which may here-
after be enacted or promulgated.Tenant shall,at its sole cost and expense,promptly comply with(a)all laws,statutes,
ordinances,and governmental rules and regulations,now in force or which may hereafter be in force, (b)all require-
ments,covenants,conditions and restrictions,now in force or which may hereafter be in force and(c)all requirements
(now in force or which may hereafter be in force)of any board of fire underwriters or other similar body now or hereafter
constituted relating to or affecting the condition,use or occupancy of the Premises.The judgment of any court of com-
petent 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 of the fact 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 Ten-
ant,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 survivethe expiration or ear-
lier termination of this Lease.
C. LANDLORD'S RULES AND REGULATIONS
Tenant shall,and Tenant agrees to cause its agents,servants,employees,invitees,and licensees to observe
and comply fully and faithfully with the rules and regulations(the"Rules")attached hereto as Exhibit"C"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,or the Industrial Park,to observe or comply with any of the Rules.
SEE ADDENDUM I FOR "D. HAZARDOUS MATERIAL"
IX. SERVICE AND UTILITIES
Tenant agrees to pay the full cost of all utilities supplied to the Premises,together with any taxes thereon.If any such
utilities or services are not separately metered to Tenant,Tenant shall pay a reasonable proportion to be determined by
Landlord of at I charges jointly metered with other premises.Landlord shall not be liable for,and Tenant shal I not be enti-
tled to,any abatement or reduction in the Monthly Rental,or other sums becoming due under this Lease by reason of,
Landlord's failure to furnish any of the services or utilities required to be furnished by Landlord under this Lease,when
such failure is caused by accidents,breakage,repairs,brownouts,blackouts,strikes,lockouts,or other labor distur-
bances,or labor disputes of any character,or by any other reason beyond the reasonable control of Landlord.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.
3
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 in-
come 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,es-
tate 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 leasehold 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 con-
structed by Landlord for Tenant in the Premises;and if any such taxes are levied against Landlord or Landlord's prop-
erty,or if the assessed value of the Property is increased(whether by special assessment or otherwise)by the inclu-
sion therein of value placed on such leasehold,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.
XI. MAINTENANCE AND REPAIRS
A. LANDLORD'S OBLIGATIONS
Landlord shall keep in good condition and repair,at Landlord's initial cost and expense subject to reimburse-
ment by Tenant of its pro rata share of such cost and expense,pursuant to Article"XII.REIMBURSEMENT OF COM-
MON EXPENSES",the foundations, exterior walls, structural condition of interior bearing walls, and roof of the Pre-
mises,as well as the parking lots,walkways,driveways,landscaping,fences,signs and utility installations of the Com-
mon 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 Industrial Park, Building or the Premises.Tenant
hereby waives and releases its right to make repairs at Landlord's expense under Sections 1941 and 1942 of the
California Civil Cade 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 condition the Premises and every part thereof, including,without limitation,all plumbing, heating,
ventilating and air conditioning systems,electrical and lighting facilities and equipment within the Premises,fixtures,in-
terior walls,interior surfaces of exterior walls,ceilings,windows,doors,cabinets,draperies,window coverings,carpet-
ing and other floor coverings,plate glass and skylights located within the Premises.Tenant shall,at its sole cost and ex-
pense,make all repairs to the Premises,the Building or the Industrial Park which are required,in the opinion of Land-
lord,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 to the Premises which is
caused by any invitee of Tenant.
C. LANDLORD'S RIGHT TO MAKE REPAIRS
In the event that Tenant fails to maintain the Premises in good and sanitary order, condition and repair as
required by this Lease,then,following written notification to Tenant(except in the case 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 are required to place the Premises in good and sanit-
ary 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 PREMISES UPON SURRENDER
Tenant shall,upon the expiration or earlier termination of the Tenn,surrender the Premises to Landlord in the
same condition as on the date Tenant took possession,broom clean,reasonable wear and tear excepted.All appurte-
nances,fixtures,improvements,additions and other property attached to or installed in the Premises pursuant to Arti-
cle"XIII.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 Premises that are removable without material damage to
the Building or the Premises,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 Premises or the Building resulting from such removal.Any of Tenant's property not
removed from the Premises prior to the expiration of the Term 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 Premises,including any structural damage,resulting from Ten-
ant's use or from the removal of Tenant's fixtures,furnishings and equipment shall be repaired by Tenant at Tenant's
expense.
XII. REIMBURSEMENT OF COMMON EXrENSES
A. DEFINITIONS
(1) "Common Areas"means all areas, space, equipment and special services provided by Landlord for the
common or joint use and benefit of the tenants,their employees,agents,servants,suppliers,customers and other in-
vitees,including,by way of illustration,but not limitation,retaining walls,fences,landscaped areas,curbs,sidewalks,
restrooms,stairways,elevators,lobbies,hallways,patios,service quarters,and parking areas and any other portion of
the Building or Industrial Park as shown on the site plan attached to this Lease as Exhibit"B".
(2)"Taxes"shall mean all real property taxes,personal property taxes,improvement bonds,and other charges
and assessments which are levied or assessed upon or with respect to the Building and the land on which the Building
is located 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,in-
cluding any increase in such taxes,whether resulting from a reassessment of the value of the land or the Building or
any other reason,imposed by any governmental authority,and any tax which shall be levied or assessed in addition to
or in lieu of such real or personal property taxes and any license fees,commercial rental tax,or other tax upon Land-
lord's business of leasing the Building,but 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.
4
(3)"Common Operating Costs" shall mean the aggregate of all costs expenses payable by Landlord in
connection with the operation and maintenance of the Premises,Building,and Common Areas,including,but not lim-
ited to,(a)the proportionate share of expenses allocated to the Building to be paid by Landlord,as owner of the Build-
ing,toward the cost of maintaining and repairing the common areas located in the Industrial Park and used in common
with the occupants of all other buildings located in the Industrial Park:(b) all Taxes; (c)the cost of any insurance ob-
tained by Landlord in connection with the Building, including,the insurance required to be obtained by Landlord pur-
suant to Article"VI.INSURANCE"above;(d)the cost of trash disposal service;(e)the cost of operating,repairing and
maintaining life safety systems, including,without limitation,sprinkler systems;(f)the cost of security services,if pro-
vided by Landlord, including, without limitation, any security device enacted by Landlord in regulating the parking
areas;(g)the cost of water,electricity,gas and other utilities;(h)legal,accounting and consulting fees and expenses;
(i)an allowance to Landlord for reasonable managerial fees,commissions and administrative expenses;Q)compensa-
tion(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 environ-
mental charges; (1) municipal inspection fees or charges;and(m)any other costs or expenses incurred by Landlord
under this Lease which are not otherwise reimbursed directly by tenants of the Building.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 'I.TERMS AND DEFINITIONS,D."into the total number
of square feet of net rentable floor area within the Premises as set forth in Article 'I.TERMS AND DEFINITIONS, E."
B. REIMBURSEMENT
Within a reasonable time before the commencement of each calendar year during the Term, Landlord shall
deliver to Tenant an estimate of the anticipated Common Operating Costs for the forthcoming calendar year.Tenant
shall pay to Landlord,as additional rental,commencing on the date the Term of the Lease commences,and continuing
on the first day of each calendar month thereafter,an amount equal to one-twelfth(1/1 2th)of the product obtained by
multiplying the then estimated Common Operating Costs times Tenant's Proportionate Share.
C. REBATE OR ADDITIONAL CHARGES
Within sixty(60)days after the end of each calendaryear,Landlord shall furnish to Tenant a statement showing
the total Common Operating Costs and Tenant's Proportionate Share of the Common Operating Costs far the calendar
year just ended.If the amount of estimated Common Operating Costs paid by Tenant for any year during the Term ex-
ceeds the actual Common Operating Costs for such year,such excess shall be credited against the next installments
of Tenant's Proportionate Share of Common Operating Costs due from Tenant to Landlord hereunder.If the estimated
Common Operating Costs for such year are less than the actual Common Operating Costs for such year,then Tenant
shall pay to Landlord, within thirty(30)days of Tenant's receipt of Landlord's statement,as additional rent,Tenant's
Proportionate Share of the amount by which the actual Common Operating Costs exceeds the estimated Common
Operating Costs.In the event the Term of this Lease expires,or this Lease is otherwise terminated,Landlord shall com-
pute the credit or deficiency up to the date the Lease expired or was terminated.
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 Land-
lord's consent, Tenant shall submit such information as Landlord may require, including, without limitation, (i) plans
and specifications,(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 alterations affect the
structure of the Building or its exterior appearance.Tenant shall indemnity,defend against and keep Landlord free and
harmless from all liability,loss,damage,cost,attomeys'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.Land-
lord may require Tenant to provide Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,to insure Landlord against any liabil-
ity for mechanic's liens and to insure completion of the work.Landlord shall have the right at all times to post on the Pre-
mises any notices permitted or required by law,or that Landlord shall deem proper,for the protection of Landlord,the
Premises,the Building,and any other party having an interest therein,from mechanics'and materialmen's liens,and
Tenant shall give to Landlord at least thirty(30)business days notice of commencement of any construction on the Pre-
mises.
XIV. MECHANIC'S LIENS
Tenant shall keep the Premises free from any liens arising out of any work performed,material furnished or obliga-
tion incurred by or for Tenant or any person or entity claiming through or under Tenant. In 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 lien 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 incurred by Landlord in connection therewith
shall be payable to it by Tenant with interest at the rate set forth in Article"XXVI.LATE PAYMENTS:INTEREST AND
LATE CHARGES"from the date of payment and shall be due and payable to Landlord by Tenant on demand.
5
XV. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right to enter the Premises at reasonable times to inspect
the same,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 Premises to prospective purchasers,
mortgagees or tenants,to post notices of nonresponsibility,and to alter,improve or repair the Premises and any por-
tion of the Building,without abatement of rent,and may for that purpose erect scaffolding and other necessary struc-
tures that are 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 in-
convenience to or interference with Tenant's business,any loss of occupancy or quiet enjoyment of the Premises,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 Land-
lord 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 Premises 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
Premises,or an eviction,actual or constructive,of Tenant from the Premises,or any portion thereof.
XVI. DESTRUCTION
A. MINOR INSURED DAMAGES
In the event the Premises,the Building of which the Premises 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"V. INSUR-
ANCE"above, then Landlord shall rebuild and restore the Premises or Building, as the case may tie,and repair the
damaged portion thereof,provided that(1)the amount of insurance proceeds available to Landlord equals or exceeds
the cost of such rebuilding, restoration and repair, (2)such rebuilding,restoration and repair can be completed within
sixty(60)days after the work commences in the opinion of a registered architect or engineer appointed by Landlord,(3)
the damage or destruction has occurred more than twenty-four(24)months before the expiration of the Term and(4)
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 Premises,or Building,as the case may be,to substantially its condition im-
mediately prior to the damage or destruction,including,without limitation,the same net rental floor area.To the extent
that insurance proceeds must be paid to a mortgagee or beneficiary under,or must be applied to reduce any indebted-
ness secured by,a mortgage or deed of trust encumbering the Premises,or the Building,such proceeds,for the pur-
poses of this Section,shall be deemed not available to Landlord unless such mortgagee or beneficiary permits Land-
lord to use such proceeds for the rebuilding,restoration,and repair of the Premises,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.
B. MAJOR OR UNINSURED DAMAGE
In the event the Premises,or the Building in which the Premises are a part,or any portion thereof,is damaged or
destroyed by any casualty and Landlord is not obligated,under Section"A.Minor Insured Damages"next above,to re-
build or restore the Premises or the Building,as the case may be,or to repair the damaged portion thereof,then Land-
lord may,at its option,either(1)rebuild or restore the Premises or Building and repair the damaged portions thereof or
(2)terminate this Lease effective as of the date the damage or destruction occurred.If Landlord does not give Tenant
written notice within thirty(30)days after the damage or destruction occurs of its election to rebuild or restore the Pre-
mises or Building, as the case may be, and repair the damaged portions thereof, Landlord shall be deemed to have
elected to terminate this Lease.
C. NO ABATEMENT OF RENT
There shall be no abatement of rent by reason of damage to or destruction of the Premises,the Building,or any
portion thereof,and this Lease shall continue in full force and effect atter such damage or destruction,except that,to
the extent that either(i)Landlord receives insurance proceeds for loss of rental income attributable to the Premises or
(ii)the floor area of the Premises cannot be reasonably used by Tenant for conduct of its business,the Monthly Rental
shall abate proportionately according to(i)or(ii)above commencing thirty(30)days after the damage to or destruction
of the Premises, or Building has occurred,and except that, if Landlord elects to terminate this Lease as provided in
Section"B. Major or Uninsured Damage"next above,no obligation shall accrue under this Lease after such termina-
tion. 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,cus-
tomers or invitees,then there shall be no abatement of rent by reason of such damage,unless Landlord is reimbursed
for such abatement pursuant to any rental insurance policy that Landlord may,in its sole discretion,elect to carry.Ten-
ant 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,sta-
tute,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 ore more of the following obligations shall constitute a default here-
under by Tenant:
(1)If Tenant abandons or vacates the Premises;
(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 after such payment is due and payable;provided,however,that the obligation of Ten-
ant 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 rent or such other monetary obligation and not on the expiration of such five
(5)day grace period;
(3)If Tenant involuntarily transfers Tenant's interest in this Lease or voluntarily transfers(attempted or actual)
its interest in this lease,without Landlord's prior written consent;
(4)If Tenant files a voluntary petition for relief or if 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 Premises or any of Tenant's
personal property located at the Premises and such jurisdiction,custody or control remains in force unrelingwshed,
unstayed or unterminated for a period of forty-five(45)days;
6
XVIII.CONDEMNATION
A. TOTAL OR PARTIAL TAKING
If all or substantially all of the Premises 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 ortaking,this lease shall automati-
cally 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 result of such condemnation or other taking.If less than all or substantially all of the Pre-
mises is so condemned or taken,this Lease shall automatically terminate only as to the portion of the Premises so
taken as of the earlier of the date on which actual physical possession is taken by the condemnor or the date of dispos-
session of Tenant as a result of such condemnation or taking. If such portibn of the Building or Industrial Park is con-
demned 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 posses-
sion 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 shall be apportioned,and Tenant hereby assigns to Land-
lord any award that may be 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 thereof.Although all damages in the event of any condemnation are to
belong to Landlord whether such damages are awarded as compensation for diminution in value of the leasehold or to
the fee of the Premises,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 dam-
ages to Tenant's business by reason of the condemnation and for or on account of any cost 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.
C. 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 Premises pursuant to this Article"XVIII. CONDEMNATION",the rent and all other charges shall abate in
proportion to the portion of the Premises 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 Tenant to Landlord hereunder and attributable to the Premises taken shall be paid up to the date
upon which actual physical possession shall be taken by the condemnor,and(depending on whether this Lease is ter-
minated as to all or only part of the Premises)either all or a prorated portion of Tenant's security deposit shall be re-
turned by Landlord.
D. TEMPORARY TAKING
If all or any portion of the Premises is condemned or otherwise taken for public or quasi-public use for a limited
period of time,this Lease shall remain in full force and effect 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 hereun-
der shall abate during such limited period in proportion to the portion of the Premises that is rendered untenable and un-
usable 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,sought 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(prorated on a monthly basis)unless
Landlord shall specify different rent in its sole discretion, together 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 he-
rein specified as far as applicable.Any holding over without Landlord's consent shall constitute a default by Tenant and
shall entitle Landlord to re-enter the Premises 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,attomeys'fees and amounts paid to
any collection agency,incurred by Landlord in connection with any breach or default by Tenant under this Lease or in-
curred in order to enforce or interpret the terms or provisions of this Lease.Such amounts shall be payable upon de-
mand. In addition,if any action shall be in::;ituted 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 attomeys'fees
and court costs to be fixed by the court therein. In the event Landlord is made a parry to any litigation between Tenant
and any third parry,then Tenant shall pay all costs and attomeys'fees incurred by or imposed upon Landlord in con-
nection with such litigation.
XXI. ASSIGNMENT AND SUBLETTING SEE ADDENDUM I
wise transfer or hypothecate all or any part of the Premises or Tenant's leasehold estate hereund a y,
"Assignment"), or permit the Premises to be occupied by anyone other than Tenant or s emises(collec-
tively,"Sublease")or any portion thereof without Landlord's prior written copse stance.
B. If Tenant desires at anytime to enter into ant of this Lease or a Sublease of the Premises or any
portion thereof,it shall first give written lord of its desire to do so,which notice shall contain(a)the name
of the proposed assignee,su upant,(b)the nature of the proposed assignee's,subtenant's or occupant's
business to be ca a Premises,(c)the terms and provisions of the proposed Assignment or Sublease,and
(d) su information as Landlord may reasonably request concerning the proposed assignee, subtenant or
LANDLORD: TENANT:
by written notice to Tenant elect to(a)sublease itself the portion of the Premises specified in Tenant's notice,or
portion thereof,(b)take an assignment of Tenant's leasehold estate specified in Tenant's notice hereunder,or an r-
tion thereof,(c)terminate this Lease as to the portion(including all)of the Premises that is specified in Tenant' tice,
with a proportionate abatement in the Monthly Rental,(d)consent to the Sublease or Assignment,or(e)disa ove the
Sublease or Assignment. In the event Landlord elects to sublease or take an assignment from Tenant a scribed in
subsections(a)and(b)above,the rent payable by Landlord shall be the lower of that set forth in Tena notice or the
Monthly Rental and other monetary obligations payable by Tenant under this Lease at the time of assignment or
sublease(or a proportionate amount thereof representing the portion of the Premises subject to th signmentor sub.
lease if less than the entire Premises). In the event Landlord elects any of the options set fort subsections(a),(b)
and(c)above,with respect to a portion of the Premises,(i)Tenant shall at all times provide re nable and appropriate
access to such portion of the Premises and use of any common facilities,and(ii)Landlor all have the right to use
such portion of the Premises for any legal purpose in its sole discretion and the right to her assign or sublease the
portion of the Premises subject to Landlord's election without consent of Tenant.If L ord consents to the Sublease
or Assignment within said fifteen(15)day period,Tenant may within thirty(30)do fter Landlord's consent,but not
later than the expiration of said thirty(30) days, enter into such Assignment or blease of the Premises or portion
thereof,but only upon the terms and conditions set forth in the notice furnish Tenant to Landlord pursuant to"B".
D. No consent by Landlord to any Assignment or Sublease by Ten shall relieve Tenant of any obligation to be
performed by Tenant under this Lease,whether arising before or a the Assignment or Sublease.The consent by
Landlord to any Assignment or Sublease shall not relieve Tenant o e obligation to obtain Landlord's express written
consent to any other Assignment or Sublease.Any Assignmen Sublease that is not in complaince with this Article
"XXI.ASSIGNMENT AND SUBLETTING"shall be void and, the option of Landlord,shall constitute a material de-
fault by Tenant under this Lease.The acceptance of rent or ment of any other monetary obligation by Landlord from
a proposed assignee or sublessee shall not constitute t nsent by Landlord to such Assignment or Sublease.
E. Any sale or other transfer, including trans by consolidation, merger or reorganization, of a majority of the
voting stock of Tenant,if Tenant is a corporatio r any sale or other transfer of a majority of the partnership interest in
Tenant,if Tenant is a partnership,shall be an signment for purposes of this Article"XXI.ASSIGNMENT AND SUB-
LETTING".As used in this section"E.",the "Tenant"shall also mean any entity that has guaranteed Tenant's ob-
ligation under this Lease,and the prohib' n hereof shall be applicable to any sales or transfers of stock or partnership
interests of said guarantor.
F. Each assignee, or othe ansferee, other than Landlord, shall assume, as provided in this section 'F. all
obligations of Tenant under t Lease and shall be and remain liable jointly and severally with Tenant for the payment
of Monthly Rental and all r monetary obligations hereunder,and for the performance of all the terms,covenants,
conditions and agreem herein contained on Tenant's part to be performed for the Term;provided, however,that
the assignee, subles , or other transferee shall be liable to Landlord for rent only in the amount set forth in the
Assignment or Sub se. No Assignment shall be binding on Landlord unless the assignee or Tenant shall deliver to
Landlord a count art of the Assignment and an instrument in recordable form that contains a covenant of assumption
by the assign atisfactory in substance and form to Landlord,consistent with the requirements of this section"F.",
but the failu or refusal of the assignee to execute such instrument of assumption shall not release or discharge the
assignee m its liability as set forth above.
Tenant shall pay Landlord's expenses,but in no event less than Five Hundred Dollars($500.00),for each such
pr sed transfer to cover the legal review and processing expenses of Landlord,whether or not Landlord shall grant
XXII. MORTGAGE PROTECTION/SUBORDINATION SEE ADDENDUM I
The rights of Tenant under this Lease are and shall be,at the option of Landlord,either subordinate or for
to any mortgage or deed of trust(including a consolidated mortgagee or deed of trust)constituting a li he Pre-
mises or Landlord's interest therein or any part thereof,whether such mortgage or deed of trust h ofore been,or
may hereafter be,placed upon the Premises by Landlord,and to any ground or master lea andlord's title to the
Premises or any part thereof is or shall become a leasehold interest.To further as- regoing subordination or
superiority,Tenant shall, upon Landlord's request,together with the request of ortgagee under a mortgage or
beneficiary under a deed of trust or ground or master lessor, execute an ment(including without limitation an
amendment to this Lease that does not materially and adversely off ant's rights or duties under this Lease),or
instruments intended to subordinate this Lease,or at the option dlord,to make it superior to any mortgage,deed
of trust,or ground or master lease.
B. ATTORNMENT
Notwithstanding the provision .Subordination"next above,Tenant agrees(1)to attom to any mortgagee
of a mortgage or beneficiary of of trust encumbering the Premises and to any party acquiring title to the Pre-
mises by judicial foreclosu stee's sale,or deed in lieu of foreclosure,and to any ground or master lessor,as the
successor to Landlor sunder, (2)to execute any attomment agreement reasonably requested by a mortgagee,
beneficiary,gr o r master lessor,or party so acquiring title to the Premises,and(3)that this Lease,subject to the
rights un y outstanding non-disturbance agreement, at the option of such mortgagee,beneficiary,or ground or
mas r,or other party,shall.remain in force notwithstanding any such judicial foreclosure,trustee's sale,deed in
XXIII.TRANSFER OF LANDLORD'S INTEREST/ESTOPPEL
CERTIFICATE/FINANCIAL STATEMENTS
A. ESTOPPEL CERTIFICATE
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 Lease,as so modified,is in full force
and effect and the date to which the rent and other charges are paid in advance, if any, and (b)acknowledging that
there are not,to Tenant's knowledge,any uncured defaults on the part of Landlord hereunder,or specifying such de-
faults if they are claimed evidencing the status of this Lease.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 effect 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.
LANDLORD: or 9 TENANT
B. FURNISHING OF FINANCIAL 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 less than ten(10)days prior written notice from Landlord,furnish Landlord with cur-
rent financial statements reflecting Tenant's then financial condition.
C. LIABILITY OF TRANSFEREE
In the event Landlord shall sell or otherwise convey its title to the Premises, 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 are 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 Tenn of this Lease for the benefit and
use of the customers,service suppliers,other invitees and employees of Tenant.Wheneverthe words"automobile"or
"parking area"are used in this Lease,it is intended that the same shall include,whether in a surfacs parking area or a
parking structure, the automobile parking stalls, driveways, entrances and exits and sidewalks, landscaped areas,
pedestrian passageways in conjunction therewith and other areas designed for parking.Landlord shall keep said auto-
mobile parking area in a neat,clean and orderly condition,properly lighted and landscaped,and shall repair any dam-
age 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 toss of property from within any motor
vehicle,which is suffered by Tenant or any of its employees,customers,service suppliers or other invitees in connec-
tion 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 sole discretion,for the proper and efficient operation and
maintenance of said automobile parking area. Such rules and regulations may include,without limitation,(i)restric-
tions in the hours 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.In addition,Landlord may,if in its opinion the same may
be advisable,establish for the automobile parking area,a system or systems of charged validation or other operation
including,but not limited to,a system of charges against non-validated parking checks of users.Tenant shall comply
with any such system(and all rules and regulations established by Landlord in conjunction therewith)in its use of said
automobile parking area and the use of the same by Tenant's customers,employees,service suppliers and other in-
vitees.Landlord shall furnish for employees of Tenant a minimum of one parking space per two hundred and fifty(250)
square feet of the Premises, either on a reserved or unreserved basis. The location of assigned reserved parking
spaces shall be determined by Landlord,in its sole discretion.Employees shall pay to Landlord or its agents for the use
of employee parking spaces such amounts as Landlord shall from time to time determine.
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 employees,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 Land-
lord from time to time with respect thereto.The rights of Tenant and its employees,customers,service suppliers and in-
vitees 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(iii)Landlord's right to change the location of any assigned re-
served parking spaces in such instances as shall be determined at Landlord's sole discretion.
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 ex-
terior of the Building,signs, names,insignia,or any other similar item without Landlord's prior written consent,which
consent may be withheld in Landlord's sole discretion. In the event Landlord consents to Tenant placing a sign on or
about the Premises,or the Building,any such sign shall be subject to Landlord's approval of the color,size,style and
location of such sign.
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 Ten-
ant shall bear interest at such rate from the date of disbursement by Landlord.
B. 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 Lease, 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 costs. Accordingly, if any installment of rent or any additional rent or
other sum due from Tenant shall not be received by Landlord within five(5)days after such amount shall be due.Ten-
ant 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 delin-
quent payment pursuant to California Civil Code Section 1671,and(iii)the payment of late 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 admin-
istrative expense incurred by Landlord in handling and processing delinquent payments.
10
C. CONSECUTIVE LATE PAYMENT OF RENT
Following each second consecutive late payment of rent, Landlord shall have the option (i) to require that
beginning with the first payment of rent next due,rent shall no longer be paid in monthly installments but shall be pay-
able quarterly three(3)months in advance and/or(ii)to require that the Tenant increase the amount,if any,of the Secu-
rity Deposit required under Article"V."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."
D. NO WAIVER
Neither assessment nor acceptance of interest or late charges by Landlord shall constitute awaiver 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 rent,additional rent or other sums due hereunder,and Tenant shall be deemed in de-
fault 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 1.TERMS AND DEFINITIONS,N."Tenant shall indemnity 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 and Tenant
further hereby waives any and all right to assert any claim against or obtain any damages from,for any reason what-
soever,the partners of Landlord.This release, notwithstanding Section 1542 of the California Civil Code which pro-
vides 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 de-
btor',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.
XXIX.NOTICES
Any 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 Ad-
dress for Notice,as set forth in Article"I.TERMS AND DEFINITIONS"and shall 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 Tenant is named under this Lease,service of any
notice upon any one of said Tenants shall be deemed as service upon all of such Tenants.
XXX. QUIET ENJOYMENT
Upon payment by Tenant of the rents herein 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. PARAGRAPH HEADINGS
The paragraph headings used in this Lease are 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.
B. INCORPORATION OF PRIOR AGREEMENTS;AMENDMENTS
This Lease contains all agreements of Landlord and Tenant with respectto any matter mentioned,or dealtwith,
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.
C. WAIVER
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 deemed
to render unnecessary the obtaining of Landlord's consent to,or approval of,any subsequent act by Tenant.The ac-
ceptance of rent or other sums payable hereunder by Landlord shall not be a waiver of any preceding breach by Tenant
of any provision hereof,other than failure of Tenant to pay the particular rent or other sum so accepted,regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such rent,or sum equivalent to rent.
D. SHORT FORM
Tenant agrees, at the request of Landlord, to execute, deliver, and acknowledge a short form of this Lease
satisfactoryto counsel for Landlord,and Landlord may in its sole discretion,record such shortform in the county where
the Premises are located.Tenant shall not record this lease,or a shortform of this Lease,without Landlord's prior writ-
ten consent, and such recordation shall,at the option of Landlord,constitute a Default of Tenant hereunder.
11
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 effective 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 term or provision to persons
or circumstances otherthan those as to which it is held invalid or unenforceable,shall not be affected thereby,and each
term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.
H. SURRENDER OF LEASE 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
(1)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 By-laws of Tenant and(2)that this Lease is bind-
ing upon and enforceable by Landlord against Tenant in accordance with its terms.It 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.
XXXII. EXECUTION
This Lease is executed in several duplicate counterparts,each of which shall be deemed an original of this Lease
for all purposes.
"LANDLORDrr "TENANT"
BIRTCHER PACIFIC, CITY OF SAN JUAN CAPISTRANO
a California general partnership
au",
r B. i r us ee ^— STE�ffE�tJ 6'• .JL/G//dti)
of the ABB and , Tr , City Manager
Genera3 .l pPa`r//'t��'n(/e�r
Date: " "_ Date:
12
EXHIBIT "A"
FLOOR PLAN OF THE PREMISES
Birtcher Plaza
31872 Camino Capistrano
San Juan Capistrano, CA
9,230 S.F.
FIRST FLOOR
N OFFICE VAULT
•
r
u fL,
12'HIGH CEILING 9'HIGH CEILING '\
OPEN AREA
19'
OFFICE
ELECTRICAL ___
UP
63' } 44' -�
DN.
OFFICE °'
25'
MECHANICAL
ROOM
OPEN
WOMEN
DN.
MEN
SECOND FLOOR
Not to any Scale
13
EXHIBIT "B"
DIAGRAM OF THE INDUSTRIAL PARK
13 1. fi'f CIIT R PLA2p
Subject
Premises
i
P I
_ �� •l: =-. _= �..a_ —
r ,o, . :/
r / Sl ►A220 Sud SWlO1MO2
227• a � / tNtfMf IttYN
ems• - -.. . . �� .-�•. t�It N•Y . . . . l��
14
Exhibit Y"
RULES AID EQNaTIa6
ATTACHED To AND MADE A PART OF INDUSTRIAL SPACE 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, Tenant shall not conduct any retail
bales in or from the Premises, or any business other than that specifically provided for in the Lease.
2. The sashes, sash doors, windows, glass lights, and any lights or skylights that reflect
or admit light into the halls or other places of the Building shall not be covered or obstructed. The
toilet rooms, water and wash closets and other water apparatus shall not be used for any purpose other
than that for which they were constructed, and no foreign substance of any kind whatsoever shall be
thrown therein, and the expense of any breakage, stoppage or damage, resulting from the violation of
this rule shall be borne by the Tenant and no employees of Tenant shall go upon the roof of the
Building without the written consent of Landlord.
3. No sign, advertisement or notice visible from the exterior of the Premises or Building
shall be inscribed, painted of affixed by Tenant on any part of the Building or the premises 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
release of any of the provisions hereof or of this Lease, and shall be deemed to relate only to the
particular sign, advertisement or notice so consented to by 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 a, so consented to by Landlord.
4. In order to maintain the outward professional appearance of the Building, all window
coverings to be installed at the Premises shall be subject to Landlord's prior approval. If 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 Premises, such use of such curtain,
Kinds shade or screen shall be forthwith discontinued by Tenant. No awnings shall be permitted on
any part of the Premises.
S. Tenant shall not do or permit anything to be done in the Premises, or bring or keep
anything therein, which shall in any way increase the rate of fire insurance on the Building, or on
the property kept therein 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.
6. Ho safes or other objects 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
power to prescribe the weight, method of installation and position of such safes or other objects.
7. Tenant shall sweep or throw or permit to be swept or thrown from the Premises any dirt or
other substance into any of the corridors or halls or elevators, or out of the doors or windows or
stairways of the Building, and Tenant shall not use, keep or permit to be used any foul or noxious gas
or substance in the premises, or permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors
and/or vibrations, nor shall any animals or birds be kept in or about the Building. Smoking or
carrying lighted cigars or cigarettes in the elevators of the Building is prohibited.
8. No cooking shall be done or permitted by Tenant on the Premises, nor shall the Building
be used for lodging.
9. 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.
is
�r s
10. If Tenant desires telephone or telegraph connections, Landlord will direct electricians
as to where and how the wires are to be introduced. Ho boring or cutting for wires or otherwise shall
be made without directions from Landlord.
11. 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 Tenant or which such Tenant shall have
had made, and in the event of loss of any keys so furnished, shall pay Landlord therefor.
12. Tenant shall not lay linoleum or other similar floor covering so that the same be
affixed to the floor of the Premises in any manner except by a paste, or other material which may
easily be removed with water, the use of cement or other similar adhesive materials being expressly
prohibited. The method of affixing any such linoleum or other similar floor covering to the floor, as
well as the method of affixing carpets or rugs 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 whoa, or by those agents, clerks, employees or visitors, the damage shall have been
caused.
13. Tenant shall see that the windows and doors of the Premises are closed and securely
locked before leaving the Building and Tenant shall exercise extraordinary care and caution that all
water faucets or water apparatus are entirely shut off before Tenant or Tenant's employees leave the
Building, and that all electricity, gas or air shall likewise be carefully shut offp so as to prevent
waste or damage, and for any default or carelessness Tenant shall make good all injuries sustained by
other tenants or occupants of the Building or Landlord.
14. Ho bicycle, or shopping cart, or other vehicle or any animal shall be brought into the
Premises or the halls, corridors, elevators or any part of the Building by Tenant.
15. landlord shall have the right to prohibit the use of the name of the Building or
Industrial Park or any other publicity by Tenant which in landlord's opinion tends to impair the
reputation of the Building, or Industrial Park and upon written notice from Landlord, Tenant will
refrain from or discontinue such publicity.
16. Tenant shall not erect any aerial or antenna on the roof or exterior walls of the
Premises or Building.
17. Tenant shall place chair pads beneath each desk chair in order to protect the carpet in
the Premises.
EXHIBIT.C2/DOH
16
ADDENDUM I
This addendum to Lease hereby amends and forms a part of the Lease dated
January 29, 1990, by and between Birtcher Pacific, a California general
partnership, as Landlord, and City of San Juan Capistrano, as Tenant.
This addendum to Lease is executed concurrently with the Lease and the
provisions below shall be supplemental to the remainder of the Lease
documents . Where there is a conflict between any provision of this addendum
and any of the remainder of the Lease documents, the provisions in this
addendum shall prevail .
ARTICLE II - PROPERTY LEASED
C. CONDITION OF PREMISES
Landlord shall deliver the Premises clean and free of debris,
otherwise Tenant accepts the Premises in an "as-is" condition with no
further improvements to be made by Landlord.
Article IV - RENT
C. RENT SCHEDULE
Tenant shall pay to Landlord the Monthly Rental as set forth in
the following schedule:
Monthly Total
Rental Rate Monthly Annual
Year Period Per Sq. Ft. Rental Rental
---- ------ ----------- ------- ------
I February 12, 1990 to $.55 $5,077 $60,924
February 11, 1991
2 February 12, 1991 to $.60 $5,538 S66, 456
February 11, 1992
3 February 12, 1992 to 5.65 $6,000 $72,000
February 11, 1993
Article YIII - USE OF PREMISES (Continued)
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 Iocal, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to 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
non-routine 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. Tenant agrees to indemnify, defend and hold
Landlord and its officers, directors, partners and employees entirely
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
(i)
ADDENDUM I
(Continued)
indemnification and Tenant's obligations to cause the Premises to comply
with such governmental standards shall survive the termination of this Lease.
Article XXI - ASSIGNMENT AND SUBLETTING (Continued)
A. Tenant shall not directly or indirectly, voluntarily or
by operation of law, sell, assign, encumber, pledge of 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". Notwithstanding the foregoing,
Landlord's prior consent shall not be required for an Assignment or Sublease
to an "Affiliate" so long as the Affiliate will have, after the effective
date of the Assignment or Sublease, a financial condition equal to or
greater than Tenant's as of the date of this Lease. In such case, Tenant
shall provide Landlord with the information specified in paragraph "B",
below. An "Affiliate" shall be deemed to include any entity whose
beneficial ownership is twenty-five percent (25Y.) or more in common with the
beneficial ownership interest of Tenant.
B. If Tenant desires at any time to enter into an Assignment or
a Sublease of the Premises, Tenant shall request in writing, at least sixty
(60) 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 assignee's, subtenant's or occupant's
business to be carried on in the Premises, (c) the terms and provisions of
the proposed Assignment or Sublease, and (d) sufficient financial
information concerning the proposed assignee, subtenant or occupant to allow
Landlord to assess the financial condition of such person or entity.
C. At any time within forty-five (45) days after
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) terminated this Lease in full with respect to
an Assignment or terminate in part with respect to a Sublease, and enter
into a lease 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 exist or may exist: (i) the proposed transferee's 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, (iii) Tenant is
in default pursuant to this Lease, or (iv) the proposed transferee's
financial condition is less favorable than Tenant's financial condition as
of the date of this Lease.
0, 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, but only upon the terms and
conditions set forth in the notice furnished by Tenant to Landlord pursuant
to subparagraph "B."; 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 one hundred percent (1007) of the excess (after deducting the
market leasing commissions, reasonable legal fees, new tenant improvement
costs, and other actual costs reasonably incurred by Tenant 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 rental and
other payment obligations of Tenant under the terms of this Lease, or (ii )
in the case of a Sublease, the amount proposed to be paid by the sublessee
(ii )
ADDENDUM I
(Continued)
over the proportionate amount of rental and other payment obligations
required to be paid by Tenant to Landlord under the terms of this Lease
applicable to portion of the Premises so subleased.
E. No consent by Landlord to any Assignment or Sublease by
Tenant shall relieve Tenant of any obligation to be performed by Tenant
under this Lease, whether arising before or after the Assignment or
Sublease. The consent by Landlord to any Assignment or Sublease shall no
relieve Tenant of the obligation to obtain Landlord's express written
consent to any other Assignment or Sublease. Any Assignment or Sublease
that is not in compliance with the Article "XXI" ASSIGNMENT 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 (257.) or
more of the voting stock of Tenant, if Tenant is a corporation, or any sale
or other transfer of twenty-five percent (25V 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 Lease, 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 financial condition of the transferee is equal to or better than
Tenant's financial condition as of the date of this Lease and (ii) Tenant
provides to Landlord, within thirty (30) days of the sale or transfer, the
information required pursuant to subparagraph "B." 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, sheII assume, as provided in this subparagraph "G.", all
obligations of Tenant under this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of Monfhly 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 counterpart 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 nof, reIease or discharge the assignee from its liability
as set forth above.
N. Tenant shall pay all of Landlord's reasonable and
verifiable expenses for each such proposed transfer to cover the legal
review and processing expenses of Landlord, whether or not Landlord shall
grant its consent to such proposed transfers .
I. Notwithstanding any provision of this Lease to the
contrary, the Tenant shall not request a Sublease or Assignment of less than
one hundred percent (100V of the Premises or of less than the full
remaining term of this Lease be approved by Landlord and Landlord shall not
be required to approve, accept or consent to any such Sublease or Assignment.
(iii)
ADDENDUM I
(Continued)
Article XXII - MORTGAGE PROTECTION/SUBORDINATION (Continued)
A. Subordination
The rights of Tenant under this Lease are and shall be,
at the option of Landlord, either subordinate or superior to any first
mortgage or deed of trust (including a consolidated mortgagee or deed of
trust) constituting a lien on the Premises or Landlord's interest wherein 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 be come a leasehold interest. To further assure the
foregoing subordination or superiority, Tenant shall, upon Landlord's
request, together with the request of any mortgagee 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 Lease, 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 so Iong as Tenant is not in default hereunder.
B. Attornment
Notwithstanding the provisions of Article "XXII, A.
Subordination" next above, Tenant agrees (1) 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, trustee's
sale, or deed in lieu of foreclosure, an to any ground or master lessor, as
the successor to Landlord hereunder, (2) to execute any attornment agreement
reasonably requested by a mortgagee, beneficiary, ground or master lessor,
or party so acquiring title to the Premises, and (3) that this Lease,
subject to the rights under any outstanding non-disturbance agreement, 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 Premises by judicial foreclosure, trustee sale, or deed in lieu
of foreclosure, or any ground lessor or master lessor, 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 Premises and no such party shall be liable or
responsible 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
three (3) months in advance.
"LANDLORD" "TENANTv'
BIRTCHER PACIFIC, CITY OF SAN JUAN CAPISTRANO
a California general artnership
rthur B. Bir , Tr stee n- STE,�if6,V a. Scin.l
of the ABB and SRB Trust, City Manager
General Partner
Date: l ID Date:
ADEM1 .451DOH
(iv)