HomeMy WebLinkAboutDYER 18 LLCI' a,,4"`-QUIRFD
MAR 0 9 2021 ir0CE1:=
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STANDARD INDUSTRIAL/COMMERCIAL SINGLE -TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI -TENANT BUILDINGS)
A-2021-028
i. Basleprovlslans("Bade PMA,lons").
LS Parties. This Lease( -Lease"), dated forreference purposes only March 1, 2021 ,Is made by and between DYER 18, LLC 1•Lessor land THE
CITYOFSANTAANA ('Lassee•),(collectivaly the "Parties," orindividual"'party).
31 Premises: That certain real property, Including all Improvements therein or to be provided by Lessor under the terms of this Lease, commonly known as
(street address, city, state, sip): 1815 EAST CARNEGIE AVENUE, SANTA ANA, CA 92705 j"Premises'1. The Premises are located In the County of
ORANGE , and are generallydesull ed as(desalbe briefly the nature of theproperty and, If applicable, the "Project," If the property Is located within a Pro)ecl):
AN APPROXIMATE 29,503 SQUARE FOOT FREESTANDING INDUSTRIAL BUILDING . (See also Paragraph 2)
1.3 Term: 1S yeanand 0 months("OriBlnal Term'l commencing March .2021 ('Commencement Date") and ending lanuary3l.
2036 ("EMPlratlon Dare'). (See also Paragraph 3)
1.4 Eady Possession: if the premises are avallabie Lessee may hex non-exclusive possession of the premises commencing N/A I"Early possession Data').
(See also Paragraphs 3.2 and 3.3)
LS Bara Rant $61,666.00 per month ("Base Rent"), payable on the 15T day of each month commencing SEEADDENDUM .JSeealm
Paragraphs)
❑Ifthls box is checked, then are prMslons In this Lease for the Base Rant to be adjusted. See Paragraph SEEADDENDUM.
1.6 ease Rent end Other Monies Paid Upon execution:
(a) Bese Rent $61,666.00 for the period 1ST MONTH RENT .
(b) SecurityDeposit $200,000.00 ("Security Deposit').(See also Paragaph 5)
(c) Association Fees: _ for the period
(d) Other: _ for
(a) TOW] Due Upon Executlun of this Lease: $261,666 .
1.7 Agreed Use: EMERGENCY HOMELESS SHELTER AND ANCILLARY USES .(See also Paragraph 61
1.8 insuring Party. Lessor is the-nwdng Party" unless otherwise slated herein. (Sea also Paragraph 8)
L9- Reel Estate Broken. (See also Paragraph 15 and 25)
(a) Representation: Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency Relationship, conflrms and consents to thefollowing
agency relatfomhlps In this Lease with the following real estate brokers ('Broker(')') and/or their agents (•AIq`elnt(s)'):
Lessor's Brokerage Firm N/A Ucenw No. _ Isthe brokerof(check onel: ❑ the Lessor, or u both the Lessee and Lessor (dual agent).
Lessor's Agent N/A Lkense No._lb(checkonel:❑the Lessor's Agent (salesperson car broker associate); or❑ both the Lessee's Agent and the
Lessor's Agent (dual agent).
Lessee's Brokerage Firm N/A License No. —is the broker of Icheck one): ❑ the Lessee; or ❑ both the Lessee and Lessor (dual agent).
Lesme'sngem N/A UicenseNo. _Is lcheckonel:❑the Lessee's Agent (salesperson or broker asso[late); car❑ both the Lessees Agent and the
Lessor's Agent (dual agent).
(b) Payment to Broken. Upon execution and delivery of this Lease by both Parties, Lessor shall pay to the Broken the brokerage fee agreed to Ina
separate written agreement (or If there Is no such agreement, the sum of_ or _ % of the total Base Rent) for the brokerage services rendered by the Brokers.
1.10 Guarantor. N/A ("Guarantor"). (See also Paragraph 37)
1.12 Attachments. Attached hereto are the following, all of which constitute a part Of this Lease:
Q an Addendum consisting of Paragraphs 51 through 70
❑ a plot plan depleting Out Premises;
❑ a current set of the Rules and Regulations;
❑ a Work Letter;
❑ olher(specify):
2. Premises.
21 Letting. Lessor hembyleases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth In this Lease. White the approximate square footage of the Premises may have been used In the marketing of the Premises for
purposes of comparison, the Base Rent stated herein Is NOT tied to square footage end Is not subject to adjustment should the actual size be determined to be
different. NOTE: Lessee is advised M verify the actual size prior to executing this Lease.
2.2
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INITIAlS INITIALS
Q 2019 AIR CRE. All Rights Reserved. Last Edited: 2/25120219:53 AM
STN-27.30, Revised 11-254019 Page 1 of 16
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2.4 Acknowledgaments. Lessee atknowledges that; (a) It has been given an opportunity to Inspect and measurethe Premises,(b) It has been advised by
Lessor and/or Brokers to ossify Itself wRh respect to the sloe and condition of the Promises fineluding but not limited to the electrical, HVAC and fire sprinkler
systems, security, enerimnmenWl 3SPects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Lessee's
Intended use, it) Lessee has made such Investigation as It deems necessarywlth reference to such masers and assumes all responsibility therefor as the same relate
tolls occupancy of the Premises, (dj It Is not relying on any representation as to the she of the Premises made by Broken of Lessor, (of the square footage of the
Premises was not material to Lessee's decision to lease the Premises and pay the Rent stated herein, and (rf neither lessor, lassoes agents, nor Brokers have made
any aml or written representations orwarrantles with respect to sold matters other than as set forth In this Lease. In addition, Lessor acknowledges that f l) Brokers
have made an representations, promifesorwarmAttes concerning Lessee's abllltyto hones the lease or suitability to occupy the Premises, and 01) It Is Lessor's sole
responsibility to Investigate the pnancial capability and/or suitability of all proposed tenants.
2.5 lessee as Prior Owner/Occupant. The warranties made by Lessor In Paragraph 2 shall be of no force or effect If Immediately prior to the kart Dote Lessee
was the owner or occupant of the Premises. in such event, Lessee shall be responsible for any necessary corrective work.
3. Term,
3.1 Term, The Commencement Dale, Expiration Date and Orlginal Term of this lease are as specified In Paragraph 1.3.
3.2 Early Possession. Any provision hefein gronling Lessee Early Possession of the Premises is subject to andcorsdldoned upon the Premises being avalla use
for such possession prior to the Commencement Date, Any grant of Early Possession only conveys a non-exclusive right to occupy the Premises. If lessee totally or
partfailyottupios the Premises prior to the Commencement Date, the obligation to pay Base Rent shall be abated tar the period of such Early Possession. Allother
terms of this tease fincludlne but not limited to the obligations to pay Real Property Ions and Insurance premiums and to malntaIn the Premises) shall be In effect
during such period. Any such Early Possession shall not affect the Expiration Date.
3.3 Dehyln Possession Lessor agrees to use Its best commercially reasonable efforts todellver Possession of the Premisesto tessee by the Commencement
Date. It, despite said efforts, Lessor is unable to deliver possession by such date, Lessor shall not be subject to say liability therefor, nor shad such fin lure offers the
validity of this Lease or change the Expiraion Date, lessee shall net, however, be obligated to pay Rent or perform its other obligations until Lessor delivers
possession of the Premises and any period of rant abatement that Lessee would otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lesseewould otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of
Lesse. If possesslon is not delivered within 60 days after the Commencement Date, ast be extended under the terms of any Work Letter executed by
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Parties, Lessee may, at Its option, by norm In writing within 10 days after the end of such 60 day period, cancel this Lease, In which event the Per des shall be
discharged from all obligation hereunder, R such written notice Is not received by Lester within said 10 day period, lessee's right to cancel shall terminate. it
possesslon of the Premises is not delivered within 120 days after the Commencement Date, this Lea so shall lermnate unless other agreements are reached between
Lessor and Lessee, In wilting.
3A Lessee Compliance. Leaser shall not be required to tender possession of the Premises to Lessee fund Lessee complleswllh Its obligation to provide
evidence of Insuance (Paragraph 8.5). Pending delivery of such evidence, Lessee shalt be mqul red to perform all of Its allegations under this Lease Iron and after the
Start Date, including the payment of Rent, nolwithstandmg Lessor's election to withhold possession pending receipt of such evtdenm of Insure me. Fudher, R Lessee
bye quired to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall ocur but Lessor may elect to withhold possession until such
condillonsare satisfied.
4. Rent.
4.1 Ram Defined. All monetary obliged0% of Lessee to Lessor under the terms of this Lease(exceptfor, the Secudly Deposit) are deemed to be fen t("Rent"),
4.2 Payment, lessee shall muse payment of Read to be received by lessor In lawful moneyofthe United States, without offset ordeduccon(except as
specifically permitted In this Lease), on or before the day on which R Is due. All monetary amounts shall be rounded to the nearest whole dollar. In the event That any
Invoke prepared by Lessor Is Inaccurate such inaccuracy shall not constitute amIverand lessee shah be obligated to pay the amount set forth In this lease, Rentfor
any period during the termhereof which Is for lest man one full calendar month shall be prorated based upon the actual number of days of sold month. Paymentof
Rent shall be made to lessor at Its address staled herein or to such other Persons or place as Lessor may from time to time designate In wrldng. Acceptance of a
payment which Is less than the amount then due shall not be a walvef of lessor's rights to the balance of such Real. regardless of Lessor's endorsement of any check
fostering. In the event that any check, draft or other Instrument of payment Even by Lessee to Lester Is dishonored For any reason, lessee agrees to pay to Lessor
the sum of 81S In addition to any Late Charge and Lessor, at Its option, may require all Future Rent be paid bycashler's check. Payments will be apphed first to accrued
late charges and attorneys fees, second to accrued Interest, then to Base Rent, Insurance and Real Property Taxes, and any remaining amount to any other
outstanding charges or costs.
4.3 Association Fees. Intentionally 0mitted.
S. Saw fly Deposit. Lessee shall depositt with Lester upon execution hereof the Security Deposltas semdtyfor Lessee's faithful performance of Its obligations
under this Lease. IF Letters Fells to pay Rent, or otherwise Defaults under this Lease, lessor may use, apply or retain all or any portion of said Security Deposit for the
payment of any amount already due Lessor, for Rents which will be due In the future, and/or to relmbene, or compensate Lessor for any liability, expense, lots or
damage which Lessor" suffer orlmur by reason thereof If lessor uses Or applies all or any portion of the Security Deposit, Lessee shall within 10 days after
written request therefor deposit modes with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. H the Base Rent Increases
during the tam of this Lease, lessee shall, upon written request from lessor, deposit additional monies wish Lessor so that the total amount of the Security Deposit
shall at all times bear the same proportion to the Increased Base Rent as the Initial Security Deposit bore to the InRlal Base Real, Should the Agreed Use be amen died
to accommodate a material change In the business of Lessee or to accommodate a sublease* or assignee, Lessor shall have the right to Increase the Security Deposit
to the extent namtssry, In Lessors reasonable judgment, to account for any Increased wear and teat that the Premises may suffer as a msuft thereof. It a change In
control of Lessee occurs during this lease and following such change the financial (ancestor, at Lessee Is, In Lessors reasonable judgment, significantly reduced, Lessee
shall deposit such additional monies with lessor as shall be sufficient to cause the Security Deposit to be at a commercially reasonable level based on such change in
martial condition. Lessor shall not be required to keep the Security Deposit separate from has general accounts. Within 90 days after the expladoo or terminadm of
this Lease, Lessor shall return that portion of the Security Deposit not used or applied by lasso. Lester shall upon wdUun request provide lessee with an accounting
showing how that portion of the Security Deposit that was not returned was applied. No part of the Security Deposit shall be coruldered to be held In trust, to bear
Intea d or to be prepayment for any monies to be. paid by lessee under this lease. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE 1N LIEU OF PAYMENT OF
THE LAST MONTH'S RENT.
A. Use.
6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal me which is reasonably comparable thereto, and for no other
purpose. Lessees hall not use or permit the use of the Premises In a manner that11 unlawful, creates damage, waste or a nulsance, or that disturbs occupants of or
ausesdamoge to neighboring prembot or properUes,
NM�ar. Lessor shell not unreasonably withhold or delay Its consent to any written request for a modification of the Agreed Use, so long as the same will
not Impair the sUpctual Integrity of the Improvements on the premises or the mechanical or elecUlal systems therein, and/or Is not significantly more burdensome
to the Premises. If Lessor elects to withhold consent, lessor shall within 7 days after such request give written notification of same, which notice shall include an
explanation of Lesser'sobjedlons to the change In the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent the term"Halardous Substance" as used in this Lease shalt mean airyprodual, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by Itself or In combination with othermatedah expected to be on the Premises, stainer: (h
potentially injurious to the publicheaflh, safety or welfare, the environment orthe Premises, (It) regulated or terminated by anygovemmontal authorlty, or (Ili) a basis
for potential liability of Lessor to any governments agency or third patty under any applicable statute or common law theory. Hazardous Substances shall Include, but
not be limited to, hydrocarbons, petroleum, gasoline, and/or credo all or any products, by-products or factions thereof. Lessee shell not engage In any activity in or
on the Premises which constitutes a Reportable Use of Haeardous substances without the express prior written consent of lessor and timely compliance (at Lessee's
expense) with all Applicable Requirements. "Rep amble Use" shall mean it) the Installation or use of any above or below gross nd storage tank 01) the generation,
possession, storage, use, tansportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or
business plan Is required to be filed with, any governmental authority, and/or Ilip the presence at the Premises of a Hazardous Substance with respect to which any
Applicable Requirements requires that a notice be given to persons entering or Occupying the Premises or neighboring properdes. Notwithstanding the foregoing,
Lessee may use any ordinary and customary materials reasonably required to be used In the normal course or the Agra ad Use, aMinory office supplies (copier toner,
liquid paper, glue, atc.) and common household cleaning materials, so long as such use Lin compliance with all Applicable Requirements, Is not a Reportable Use, and
does not "Pole the Premltesor neighboring property to any meaningful ask of contamination or damage or expose lessor to any liability therefor. In addmon,
la#or may condition Its consent to any "Peruble Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect Itself, the publlq
the Premises and/or the environment against damage, contamination, Injury and/or liability, Including, but not limited to, the Installation (and removal on or before
Lease explm don or termination) of protective modification (such as concrete encesemenu) and/or Increasing the Security Deposit.
qn (b) Duty to Inform Leaser. If Lessee knows, or has reasonable auto to heliews th l a Hasa MomSubstance has come to be looted in, an, under at
IIN,laITsIA/L$
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about the Psemisas, other than as previously consented to by lasso, Lessee thall Immedlately give written notice of such fact to lessor, and provide Lessotwith a
copy of any report, notice, claim or other documentation which It has concerning the Presence of such Harardous Substance.
(c) Lessee RamadaMon, Lessee shall not abuse or somnt any Hazardous Substance to be spilled or released In, on, under, or about the Premises
pncluding through the plumbing or sanitary, sewer system) and shall promptN, at Lessee's expense, comply with all Applicable Requirements and take all Investigatory
antl/or remedial action reasonably recommended, whether or not formally ordered at required, for the cleanup of any comammatton of and for the maintenance,
Security and/or monitoring of the Premises or nelghboting properties, that was to used or materially contributed to by Lessee, or portaloing to or Involving any
HaaRlous Substance brought onto the Premises during the term of this lease, by or lot Lessee, or any third party.
(d) Lessee indamnlRatlon. Lessee shall Indemnify, defend and hold Lessor, Its agents, employe es, lenders and ground lessor, If any, harmless from and
against any and all loss of rents and/or damages, Hablllties, judgments, claims, expenses, penalties, antl attorneys' and consultants' fees arising out of or Involving any
Hamrdout substance brought onto the Premises by or for Lessee, or any third party (provWed, however, that lessee shall have net IWbilityunder this Lease with
respect to underground migration of any Hazardous Substance under the Premises from adjacent prope ales not caused or contributed to by Lessee). lessee's
obligattons shall Include, but not be limited to, the effects of any contamination or Injury to person, property or the environment created or suffered by tessee, and
the cost of Investigation, removal, remedlatlon, restoration and/or abatement, and shall Survive the expiration or termination oflhis Lease. Notarminaran,
cancellation or release agreement entered Into by Lessor and Lessee shall release Lessee from Its obligations under this Lease with respect to Hazardous
Substances, unless MeclHtallyso agreed by Lessor In writing at the time of such agreement.
(a) Lessor tndamnifation. Except as otherwise provided In paragraph 9.7, Lessor and its successors and assigns shall indemnify, defend, reimburse and
hold Lessee, Its employees and lenders, harmless from and against any and all environmental damages, Including the cost of remediation, which result ham
Hazardous Substances which calmd on the Premlses prlor to lessee's occupancy or which are caused by the grass negligence orwlllful misconduct of Lessor, Its
agents or employees. Lessees obligations, as and when required by theAppilcabla Requirements, shall Include, but not be limited to, the cost of Investigation,
removal, remedWtion, restoration and/or abatement, and shall survive the explrafion or termination of this lease.
(0 Invastig3tiosn and Remedlations. Lessor shall retain the responsibility and pay for any Investigations or remedlatlon measures required by
governmental entities having ludsdicdon with respect to the existence of Hazardous Substanceson the Premises Prior to lessee's occupancy, unless such remedlatlon
measure Is requlred as a result of Lessee's use (Including'AltemtioflV, as defined In paragraph 7.3(a) below) of the Promises, In which avant Lessee shall be
responsibleforlushpayment. Lessee shall cooperate fully In any such actiNUesat the request of Lessor, Including *lWng lessor and Lessor's agents to have
mesom ble guess to the Premises at Inestimable tames In order to Carry out lessor's tnvesNgativeand remedial responsltelllHes.
Jill Lessor Terminstlan Option. If a Hazardous Substance[ondldOn lsee Paragraph 9.1(e))Oscars dudng the term of this tease, unless Lessee b legally
responsible therefor (In which use Lessee shall make the Invesdgation and mmedlaUon thereof required by the Applicable Requirements and this Lease shall continue
In full force and effect, but subject to Lessor's rights under Paragraph 6.2(dl and paragraph 13), lessor may, at Lessor's option, either (1) Investigate and remedlize such
HanNousSubstantst Condition, If required, as soon as reasonably possible at Lessor's expense, In which event this lease shall Continue In full force and effect, or (11) If
the estimated cost to Materials, such Condition exceeds 12 limes the then monthly Best Rent or $100,000, whlcheveris greater, glee written notice to Lessee, within
30 days after recall at by Lessor of knowledge of the Occurrence of such Hazardous Substance Condition, of Lesstesdedre to terminate this lease as of the date 60
days fallowing the date otsuch notice. in the event Lessor elects to give a termination notice, Lessee may, within 10days thereafter, give written notice to lessor of
Lessee's Commitment to pay the amount by which the Cost of the remedlatfon of such Hazardous Substance Condition exceeds an amount equal to 12 times the then
monthly Base Rent or$100,000, whichever is greater. Lessee shall provide lessor with said funds at satisfactory assurance thereofwithin 30 days following such
commitment. In such event, this Lease shall Continue In full form and effect, and Lessor shall proceed to make such remediation tie soon as reasonably possible attar
the required funds are available. If lessee does not give such notice and provide the requlred funds or assurance thereof within the time provided, this lease shall
terminate as of the date specl9ed In Lessor's notice of tennlnation.
6.3 Lessee's compliance with Applicable Requirements. ,Lessee shall, at Lessee's sole expense, fully, diligently and
In a Umety manner, material comply with Oil Applicable Requirements, the requirements of any applicable One Insurance underwriter or 00ng bureau, and the
recommendation at Lasso es engineers and/jar Consultants which relate In any manner to the Premises, without regard to whether said Applicable Requirements are
nowln effector becomeeffective after the Start Date Lesseeshall, within 10 days after n for of Lessoes written request, provide Lessor with copies of all permits
and Other documents, and other Information evidencing lessee's compliance with any Applicable Requirements specified bytessor, and shall Immediately upon
lecelpt, notify Lessor In writing (withcopias of any documents Involved) of any threatened or actual claim, natce, drotion, warning, complaint or report pertaining to
or Involving the failure of lessee or the Premises to Comply wish any applicable Requllements Ulttwlse, Lessee shall lmmnlatey give written notice to Lessor of:(1)
any water damage to the Ptembars and any suspected seepage, pooling, damPMs%Or ether condition con ducwe to the production of mold; or fill any mustiness Or
other odors that might Indicate the presence of mold In the Premises. In addition, Lessee shall provide copies of all relevant material safely data sheets (MSDSI to
Lessor within 10days of the receipt of a written request therefor. In addition, Lessee shall provide lessor with coples of Rsbusiness Ilceme, confiscate of occupancy
andkr any similar document within 10days of the receipt of a written request therefor.
6.4 Inspectbm Compliance. Lessor and Letsar'3"lender' (as defined In Paragraph 30) and consultants authorized by Lessor shall have the right to enter into
Premises at any time, In the case of an emergency, and otherwlseat reasonable time safter reasonable notice, for the purpose of Inspecting and/or testing the
condition of the Premises and/or for verifying Compliance by Lessee with this Lease. The cost of any such Inspections shall be paid by Lessor, unless *violation of
Applicable Requirements, Ora HazardousSubstance Condition (see paragraph 9A)ls found to exist Or be Imminent or the Inspection Is requested of ordered by a
governmental authority. in such Case, Lessen shall upon request reimburse Leuor for the cost of such Inspection, so Zang as with Impeacal Is reasonably related to
the violation or contamination. In addition, Lessee shall provide copes of all relevant material safety data sheets (M5115) to Lessor within 30 drys of the receipt of a
wdtienrequerttherefor. Lessee acknowledges that any failure on its part to allow such Inspections attesting will expose lessor to risks and potentially Cause Lessor
to incur Cosh not Contemplated bytes Lease, the extent of which will be extremely difficult to ascertain. Accordingly, should the lessee Improperly or
unreasonably fan to agowtu h nspettionsanaronest rig Ina timelylashlon Lessee shall pay to Lessor a fee in the amount of
$soothe 9%5 0 Real shall stafflaw Wily Of #1901H INIA911A Q.10 Pass OF
H00rwkkhev The Parties agree that such feeIna*aaOzr,4Rao4�reprewntsfair and reasonable compensation for
the additional rlsk/cosh that Lessor will Incur by reason of Lanto'sfailure to allow such Inspection and/or testing. Such feewAmoa4w4basAtae shall In no event
vinstitole a walver of Lessee's Default or Breach with respect to such falluro nor prevent the exerthe of any of the other rights and remedies granted It Crowder.
7. Maintenance; Repaint; Utility Inttalladons;tr*de Natures and Alterations.
7.1 Lessee's obligations.
(a) In General, l apron yyeete-"
-d44 ), Lessee shall, expense, keep the Premises, Utility Installations (intended for
1
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Lessee's exduslve use, no matter where Iocatedl, and Alterations In good order, condition and repair (whether or not the portion of the Premlses requiring repo Its, or
the means of repairing the same, are reasonably or readily Accessible to Lessee, end whether or not the need for Such repairs occurs as a result of Lessee's use, any
prior use, the elements or the age of such portion of the Premises), Including, but not limited to, all equipment or fadllties, Such IS pfumbhV, HVAC equipment,
eledrlcal, lighting facilities, ballets, pressure vesseH, fire protection systom, fixlums, walls (Inlarlorand exterior), loundanonf, ceilings, roofs, roof drainage systems,
floors, windows, doors, plate glass, skylights, landsaping driveways, parking lots, fences, relalnfng walls, signs, sidewalks and parkways located In, on, or adjacent to
the Premises. Lessee, In keeping the Premises In good order, condition and repair, shall exerdse and perform good maintenance practices, spedgallyfncluding the
procurement and maintenance of the service comracU required by Paragraph 7.1(b) below. Lessee's obligations shall Indude restoradons, replace meals or renewals
when necessary to keep the Premises and all Improvements thereon or a part thereof In good order, condlgon and state of repo It. Lessee shall, during the term of this
Laaw, kaap the exterlor appearance of the Building Ina Nat -dam condition (Including, Ag, grefNtiremoval) consistent with the exterlor appearance of other similar
facilltiosof comparable age and site In the vicinity, Including when necessary, the extorter repainting or the Bulli ing.
(bi Servlcetantram. to Ism shall, at Lessee's sole expense, practice and maintain contracts,with wples to Lessor, in customary farm and substance for,
and with Controttors sisecfathing and experienced In the maintenance of the following equipment and Improvements, B any, Band when Instelled on the Premises: Ill
HVACequipment, (11)bolle5 and pressurevessels, (1111 fire exnngulshing Systems, including Are alarm and/or smogs detection, f iv) landsaping and Irslgation systems,
Iv) roof covering and drains, and lvil clarifiers. HOWr, lessor reserves the right, upon twice to Lessee, to procure and maintain any or all of such service contacts,
and lessee shall reimburse Lessor, upon demand, for the cost thereof.
(c) Pollute to Perform. If Lessee falIS to perform Lessee's obligations under this Paragraph 7.1, Lesser may enter upon the Premises after 10ofWs' prior
written nodes to Le me (except In the use of an emergency, In which case no nodes shall be mqulmd), perform such Obligations on lessee's behalf, and put the
Premises In good order, condition and repair, and lessee shall promptly pay to lessor a sum equal to 115%Of the cost thereof.
(d) Re placement, Subject to lessee'clndemnificanon of Lessor as Set fonh In Paragraph 8.7 below, and without relieving lessee of liability resulting from
Lessee's failure to exercise and perform good maintenance practices, if an Item described In Paragraph MID) cannot be repaired other than at a cast which Is In excess
of 50% of the test of replacing Such Item, than such Item shall be replaced by lessor, and the cost thereof shall be prorated between the Parties and Lessee shall only
be obllgaled to paw each month during the remainder of the term calms Lease or anyextemlon thereof, on the time on which Dam Rent H due, an amount equal to
the product Of multiplying the Wit of suds replacement by a fraction, the numerator of which Is one, and the denornmelor of which Is 144ILA 1/144th of the cost per
month). Lessee shall pay Interest cn the unamordud balance but may prepay Its obligation at any dose.
7.2 lessor's Obllgaliem, Sublets in Ica pri,wtlo., of Palo'. ph, 7 v (Co.; --._raj O a ((-,nosh_-,—J 4(symappa_ m ) and 14(fg ' nation) his
Intended by the Parties hereto that Lessor have no oblgation, In any manner whatsoever, to repair and maintain the Premises, or the equipment therein, all of which
ohllgadons are Intended to be that of the Lessee. It Is the Intention ofthe Parties that the terms Of this Least amarn the respective obligations of the Parties as to
maintenance and repair of the Premises.
7.3 Utinty Snsutiedonr Tmde Nxlures;Atteadons,
(a) 0egnitLaro. The term"UHllty matalladond refers Malt floor and window coverings, air and/or vacuum lines, power panels, electrical dim a button,
security and fire protection systems, communication cabling, Rghtlngfixtures, HVAC equipment, plumbing, and fencing In or on the Premises. The term ire de
Fissures" shall mean Lessee's machinery and equipment that on be remover) without doMg material damage to the Premises. The term "Alterations" shall mean any
modification of the Improvements, other than Udllty Installations or Trade Fbnures, whether by addition w deletion. "Laws Owned Alterenonsamd/ot Utility
Installations' am defined as Alterations and/or U91KY Installations made by Lessee that are not yet owned by Lessor Insist ant to Paragraph 7.4(a),
(b) Consent Lessee shall not make any Alterations or Utility Installations to the Premises without Lassoes prior written co"m. Lowe may, however,
make non-sttucNaf Anerattans or Udhty Imtalladons to the Interior of the Premises (excluding the noon without Such consent hot upon notice to Lessor, as long as
they are not visible from the outside, do not Involve puncturing, relocating or removing the all or any existing wells, Will rest affect the eleadal, plumbing HVAC,
and/or life safety system, do not trigger the requirement for addldonal modlNationsand/or Improvements to the Premises resulting from�Appllcable Require menLs,
such as compliance with Title 24, ono She Cum dative oust thereof during this Lease as extended does not exceed asum equal to3 monlh's.Base Rent In the aggregate
or sum equal M one months Base Rent In any One year. Notwithstanding the foregoing Lessee shall not make of permit any roof penmyttiom and/or Install
anything on the roof without the prior wrltan approval of lessor, Lester may, as a preanerdon toganting such approval, require lessee to utiltso a contractor
chosen and/or approved by lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the convertor the Lessor shall be
presented to Lessor In written tam with detailed plans. Consent shell be deemed conditioned upon LessemV (U acquiring all applicable governmental permits, fill
furnishing Lessor with copies of both the permits and the plea and spedflations prior to mmmenmment of the work, and (III) Compliance with all asdldons of said
Permits and other Applicable Requirements Ina prompt and expeditious manner, AMY McMlons or LoRty Insrailenomshall he performed Ina workmanlike manner
with good and Sufficient materials. Lasso shall promptly upon wmptedon furnish Lessor with as -built plans and specifications. For work which wits an amount In
excess of one monhss Base Rent, Lessor maywndition Ilswnsent upon Lessee providing alien and completion bond in an amount equal to 150%of the estimated
woof such Alteration of Utility Installation and/or upon Lessee's posting an additional Security Deposit with lessor.
It) Uema Bonds. Lessee shall pay, when due, all claims ror laborer materials furnished or alleged to hwo, been furnished tow for Lessee at or for use on
the Premises, which claims are or maybe secured by any mechanic's or materialmen's lien against the Premises or any Interest therein. tame shall give Lessor not
less than 10 days nonce pilot to the commencement of any work In, on or about the premises, and Lessor shag have the right to post not cesof non-reaponslbility, If
Lessee shall contest the validity of any such Der, claim or demand, then Lessen shall, at Its Sole expense defend and protect Itself, Lessor and the Promises against the
same and shag pay mid Satisfy any such adverse judgment that my be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish
a surety bond In an gmoumequal to 150% of the amount of Such contested lien, daimon demand, Indemnifying Lesser against tiabllltyfor the tame. If Lestor elects
to partidpate In any such action, Lessee shall pay Leiter's attorneys' fees and costs.
7.4 Ownership; Famovatl surrender, and Restoration.
ja) Ownership. Subject to Lessor's light to require mmmal Or elect ownership as he remoter provlded, all Alterations and Utility installadom made by
Lessee shall be the property atLemea, but considered apart of the Premises. Lessor may, at any time, area lnwdUng to be the owner of all many specified pan of
the Lessee Owned Alterations and Uellly Installations. Unless othermse Instructed per paragraph 7.41Of hemof, all lessee Owned Alterations and Utility Installations
shall. at the expiration or termination of this Lease, bewmo the property of Lessor end he surrendered by Lessee with the Premises.
(b) Removal. By delivery to lessee of written nortce from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this lease,
Lessor may require that any of all Lessee Owned Alterations or Utility Installations he removed by the expiration or lermination of this lease, Lessor may require the
removal at any nme of all or any part of any Lessee Owned Alterations or Utility Installotions made without the requited consent.
(cl Surrender, Destination. Lessee Shall surrender the Premises by the Expiration Date or any earl let erinmation date, wish all of the Improvements,
pans and surfaces thereof broom clean and into of debris, and In good operating order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and Lear" shall notindu la any damage of detefloradwi that would have been pteygmed by good maintenance practice. Notwithstanding the foregoing and the
provision of Paragraph 7.1(a), If the Lessee Occupies the Premises for 12 months or less, then lessee shall surrender the Premises In the Same condition as delivered
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to Lessee on the start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasion ad by the Installation, maintenance or removal of
Trade Fixtures, lessee owned Alterations and/car Utility Installati m,Furnishings, and equipment as well as the resnwel of arry storage tank Installed by or for Lessee,
Less" shall also remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third parry (except Hazardous
SobsUmeet which were deposhed via underground migration from areas outside of the Premises) to the level specified In Applicable Requlrera It Trade Fixtures
shall remain the property of Lessee and shall he removed by Lessee. Any personal property of lessee not removed on or before the Expiratfoo Date or any ea kef
termination dale shall be deemed to have been abandoned by Lessee and may be disposed of of retal nod by Lessor as Lessor may desire. The failure by Lessee to
Bmely vacate the Premises pursuant to this Paragraph 7,4(c) without the express wrlHen consent of Lessor shall constitute a holdover under the Provisions of
Paragraph 26 below.
8. Ins ur vross Indemnity.
8.1 Payment Forlmuronce. Lessen shall pay for all Insurance required under Paragraph 8 except to the extent ofthe cost attributable to liability Insurance
carded by Lessor under Paragraph &2(b) In excessof 52,000,000 per occurrence, Premiums forpollry periods commenctng prior to or extending beyond the Lease
term shall be prorated to correspond to, the Lease term Payment shall be made by Lessee to lessor within 10 days following receipt of an Invoice.
IL2 liability Insurance,
(a) Carded by lessee. Lessee shall obtain and keep In Forces a Commercial General Liability pollcyof Insurance protecting Lessee and Lessor as an
additional Insured agalnstclaims for bodily Injury, personal Injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto Such Insurance shall be on an occurrence basis providing single limit coverage In an amountnat tau than $1,000,000
per occurrence with an annual aggregate of not less than $2,000,000. lessee shag add Lessor as an additional insured by means of an endorsement at lead as broad
as the Insurance Service Organization's "Addidanal Insured-Managen or Leiters of Premises" Endorsement. The policy shall not contain any infradnsured exclusions
as between Insured persons or organkations, but shall Include coverage for liability assumed under this lease as an "Insured contract" for the performance of Lessee's
Indemnity obligations under this tease, The limits of sold Insurance shall not, however, limit the liability of lessee not relieve Lessee of any obligation hereunder.
Lessee shall provide an endorsement on Its IUbilitypollcy(lesj which provides that its Insurance shall be primary to and Trot contributory with any similar Insumme
carded by Lessor, whose Insurance shall be considered excess insurance only.
(b) Grrledby Lessor. Lessor shall maintain Ilablllty Insurance as de scribed In Paragraph 8ajal, In addition to, and not in lieu of, the Insurance required to
be maintained by Lessee. Lessee shall, to the extent available, -nit be named as an additional Insured therein, rile City of Santa Ana,
and its officers, employees, agent and representatives, shall to the extent no cost is incurred with
respect thereto and to the extent reasonably available to Lessor shall be additional insureds with
respect to any general liability or auto liability policy obtained by Lessor, by endorsement, and all
such insurance policies shall be primary and non-contributory. Lessor shall send certificates of such
insurance to Lessee to its Risk Management Division, 4th Floor, 20 Civic Center Plaza, Santa Ana
92701,
8.3 Property Insurance- Building, Improvements and Rental Value.
(a) Building and Improvers eats, The lnsudng Parry shall obtain and keep In lorce a policy or policies in the name of Lessor, wish loss payable to Lessaq
any ground-Naor, and to any lender Insuring loss or damage to the Pmmises. The amoont of such Insurance shall be equal to the full Insurable replacement cost of
the Premises, as the same shall exist from time to time, or the amount required by any Lender, but In no event more than the commercially reasonable and available
insurable value Is Proof. Lessee Owned Alerattons and Utility Installations, Trade Fixtures, and Lessee's personal properly shall be Insured by Lessee not by lessee If
the coverage Is available and commercially appropriate, such policy or polkles shall insure against all risks of direct physical loss or damage (except the perils of good
and/or earthquake unless required by a Lenderb 4uluding coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading,
deny llgon, reconstruction or replacement of any portion of the Premises as the result of a covered lost. Sold policy or policies shall also contain an agreed valuation
provision In lieu of amycolnsurince obusa, waiver of subrogation, and Inflation So end protection cal on Increase In the annual properly Insurance two rage
amount by a factor of not less than the adjusted U.S. Department of labor Consumer Price Index for All Urban Consumers lot the city nearest to where the Premises
are looted. If such Insurance coverage has a deductible clause, the deductible amount shall not exceed $5,000 per occurrence, and lessee Shall be liable for such
deductible amount In the event of an Insured Lass.
(b) Rental Value. The Insuring Patty shall obtain and keep In force a policy of policies In the name of teaser with loss payable to lessor and any Lender,
Insuring the loss of the full Rent for year with an exlondad period of Indemnity for an additiontl IN days ("Rental Value insurance"), said Insurance shall contain
an agreed vatuadon provision In lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable
by Lessee, for the next 12 month period. Lessee shall be liable for anydeductibie amount Id the event of such Sass.
(c) Adjacent Premheo.ii the Pro miles are part of a larger bulldln&orof a group of buildings owned by Lessor which are adjacent to the Promises, the
Lessee shall pay lot any Increase In the premiums forthe property Insurance of such building or buildings If said Increase Is caused by lessee's acts, omisslont, use or
occupancy of the Premises.
94 Lessee'sProperty; Business Interruption Insurance; Worker's Compensation Insurance.
(a) Property Dom Pat.Letters shall obtain and maintain Insurance covenge on all of lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such Insurance Shall be full replacement cast coverage with a deductible of not to exceed $1.000 per occurrence. The proceeds
Isom any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utlllty Installations.
(b) Business late munition. Lessee shall obtain and mainraln loss of Income and extra expense Insurance In a mounts as will reimburse lessee for director
Indirect lam of earnings attributable to all perils commonly Insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the
Premises as aresult of such perils.
It) Worker's Compensation lmurome. Lessee shall obtain and maintain WorkePSCompemadon Insurance In such amount as may be required by
Applicable Requirements. Such policy shall Include a' Waiver of Subrogation' endorsement. Lessee shall provide Lessor with a copy of such endorse mant Lalong with
the cardhate of Insurance or copy of the policy required by paragraph &5.
(it) No Reprosantatian of Adequate Camomile. Lessor makes no representation that the limits or(amis of coverage of insurance specified herein a re
adequate to cover Lessee's property, business operations or obligations under this Least,
eb Insurance Polities. Insurance required hereto shall be by companies malnalning during the policy term a"General Policyholders Rating" of at least A-, VII,
asset forth In the most current Issue of "Rod's Insurance Guide', of such other rating as maybe required by a Lender. lessee shag not door permit to be done
I gwhlen Invalidates the required lnsurancepolicles. Lessee shag, prior to the Start Date, deliver tolessorcertified copies of policies ofsmh insurance or
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certlHotes with Copies of the required endorsements evidencing the extstersco and amounts of the required Insurance. No such policy shall be cancelable or subject
to modlficadon except alter 30days prior written nodce to Lessor. Lessee shall, at least lOdays prior to the expiration of such policies, furnish leaser with evidence of
renewals or'Imurance hinders' evidencing renewal thereof, or Lessor may Increase his liabilityInsunnn coverage and charge the cost themof to Lessee, which
amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for atom of at leas) one year, or IhelenBth of the remaining term of this lease,
whichever Is less. If either Party shall (all to procure and maintain the Insurance required to be carried by It, the other Party may, but shall not be required to, procure
and maintain the same.
8.6 Welver of Substation. Without affecting any other rights or remedies, Le rise and Lessor each hereby release and re8eve the other, and waive their surmise
right to recover damages against the other, for loss of or damage to Its property arising out of or Incident to the perils required to be Insured against heroin. The
effect of such releases and waivers is not limited by the amount of Insurance carried or required, or by any deductibles applicable hereto. The games agree to have
their respective property damage Insurance carriers waive any right to subrogation that such companies may have against lessor or Lessee, as the case may be, so
long as the Insurance H not Invalidated thereby.
8.7 Indemnity. Except for Lessor's grosJ negligence or wlllful misconduct lessee shall indemnity protect, defend and hold harmless the Premises, Lessor and
its agents, Leswh's roaster or ground lessor, partners and Lenders, from and against any and all claims, foss or rents and/or damages, liens, judgments, penalties,
attorneys' and consultants' fees, expenses and/or liabilities wising out of, Involving, or In connection with, a Breach of the Lease by lessee and/or the use and/or
OCCUR ncy of the Premises and/or Project by Lessee and/or by Lessees employees, ton tractors or inyhees. It airy action or proceeding Is brought against lessor by
reason of am of the foregoing malted, Lessee shall upon notice dOle rid the some al Lessee's expense by Counsel feawnabty sallsfactary to Lessor and Lessor shell
Coupe rale with Less" In such defense, lessor need not have tint paid any such cbim In order to be defended of IndemNRed.
B.8 Exemption of Lessor and its Agents from Ushifhy. Notwithstanding the negligence or breach of this Lease by Lessor or Issagents, neither Lessor nor Its
agents shall be liable under any Circumstances for. (0 Injury or damage to the person or goods, wares, merchandise or other property of lessee, Lessee's employees,
contractors, Invitees, customers, or any other person In or about the Premises, whether such damage or Injury Is Caused by of results from Rise, steam, electricity, gas,
water or rain, indoor air qualitg the presence of maid or from the breakage, leakage, obstruction or other defects of pipes, RIO sprinklers, wires, appliances, plumbing,
HVAC or lighting Rxteres, or from any other note, whether the said Injury or damage results from conditions arising upon the Premises or upon other pardons of the
building of which the Premises are a pan, or from other sources or places, pl) any damagesaming from any ad or neglect of any other tenant of Lessor or from the
failure Of Lessor a Its agents to enforce the pwlslons of airy other lease In the Project, or 1111) Injury to Lessee's business or for any lossof income or front therefrom.
Instead, It Is intended that Lessee's sole recourse In the event of such damages or Injury be to file a claim on the Insurance pallcy(ies) that Lessee Is required to
maintain pursuant to the provisions of paragraph 8,
19 Falls re to Provide Insurance. Lessee acknowledgesthat Any fallure on its pan to obtain or maintain the Insurance required herein will expote Lessor to
risks and potentially Cause Lessor to Incur costs not Contemplated by this lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any month
or portion thereof that Lessee does not maintain the required Imurance and/or does not provlde Lessor with the required binders or certificates evidencing the
existence of the required insurance after notice and resaonable opportunity to cure, Lessee shall pay to Lessor a fee
of $500 eaeMH agaaaeaem
�. The parties agree that such fee -Inueasa.'All ata Rewa represents fair and reasonable compensallon for the additional riskfcosts that
Lessor will incur by reason o(Lessee's failure to maintain the required insurance, Such Increase In Base Rent shall In no Went constitute a waiver of Lessee's Default
or breach with respect to the failure ton Intaln such Insurance, prevent the exerdse of any of the other fight&and remedies granted hanunde, nor sellers Lessee of
its obligation to maintain the Insurance specified in this Lease.
9. Damage or Destruction.
9.1 Definldons.
lal "Premass Partial Damage shall mean damage or destruction to the hnpeavememson the Premises, other than Lessee Owned Alteratlonsand VURty
Installations, which can reasonably be repalred in 6 months or less from the date of the damage of destruction. Lessor shall notify lessee In wrmng within 30 days
from the date of the damage or destruction as to whether Or not the damage Is Partial or Total.
(of "PremisesTotal Destruction* shall mean damage or destruction to the Premises, other than Lessee Owned Alteduons and Utility, installations and
Trade Futures, which cannot reasonably be repaired In 6 months or loss from the date or the damage or destruction. Lessor shall nably lessee In writing within 30
days from the dale of the damage oraeslrudlon as to whether or not the damage Is Partial or total.
(t) "Insured Coss" shall mean damage or destruction to Improvements on the Premises, other than lessee Owned Alterations and Utility lnsalladom and
Trade Futures, which was Caused by an event required to be covered by the Insurance tie stilted In Paragraph 8.310), Inespecliveof any deductible amounts of
coverage limits involved.
(d) "RepiacemenlCost" shall mean the costte repair or rebuild the Improvements owned by Lessor at the time of the occurrence to their condition
existing Immediately prior hereto, Including demOlibon, debris mmovaland upgrading required by the operation of AppRable Requirements, and without deduction
fordepreclatiom
(e) "Harerdous Substance Eondtion"shag mean the Occurrence or discovery are Condition involving the presence of, are contamination by,a
Hazardous Substance, In, on, or under the Premises which requires mnotation .
9.2 Partial Damage - insured Loss, If Premises Partial Damage that is an Insured Loss occurs, then Lessor shalt at Lessor's expense, repair such damage thus
not Lessee's trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this lease shall continue In full bane and effect;
provided, however, that Lessee shall, at lessor's election, make the repalr of any damage or destruction the total cost to repair of which Is $10,000or less, and, In such
event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing. If the requlred
Insuance was not In fora or the insurance proceeds are not sufficient to effect such repair, the Insuring Parry shall promptly Contribute the shortage in proceeds
(except as to the dedutdble which is Lotme smiponsh illty) as and when requited to complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unlque msum of the Improvements, full replacement cost Insurance avenge was not commercially reasonable and avalable, esmr shall have
no obligation to pay fa the shortage In Insurance protoeds or to fully restore the unique aspects of she Premises unless Lessee provides Lessor with the funds to cover
same, of adequate assurence thereof, wlthlo 10 days following receipt of written nodce of such shortage and request therefor. If Lessor receives said funds or
adequate assurance thereof within said 10 day period, the party responsible for making the repairs %hall complete them as soon as reasons* possible and this Lease
shot remain In full force and effect. If such funds of assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days theme her
to: (1) make such restoration and repair as Is commercially reasonable with Lessor paying any shortage In proceeds, In which Can this tease shall amain In full force
and effact, or(0) hero this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement ofany funds contributed by Lessen to repair any such
damage or destruction. Prembes Partial Damage due to flood or earthquake shall be subject to Paragraph 93, notwithstanding that there maybe some Insurance
sv. e, but the net proceeds of any such Insurance shall be made available for the repairs Iffmade by either Party.
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9.3 Partial DO Mae*- Unlnaumd Lou, If s Premises Pastlal Damage that Is Wien Insured Loss occurs, unless caused by a neellgeAt ofwxlful act of Lessee lin
which event Lessee shall make the repolts at Lessee's expenseh lessor may either f) repair such storage as soon as reasonably possible at lessor'sexpense, In which
event tNs lease shall continue In full force and effect, or hl) terminate this lease by giving written notice to Lessee wlthln 30 days after receipt by lessor of knowledge
of the occurrence of such damage, Such termination shall be effective B0 days following the date of such notice. In the went Lessor elects to terminate this lease,
Lessee shall have the right within 10 days after mcelpt of the termination notice to give written notice to Lessor of Lassae's commitment to pay for the repair of such
damage without reimbursement from Lester. Lessee shall provide lessor with said funds or eat shmo y assurance thereof wlthln 30 days after making such
commitment. In such event this lease shag continue in full force and effect, and lessor shall proceed to make such repairs as soon as reasonably possible after the
required funds are available. If lessee does not make the required tommllment, this Lease shall terminate as of the date specified In the termination notice.
9.4 Total Oeatructlon. Notwithstanding any other provision hereof, IF Premisas ToUl Destruction occurs, this Lease shall terminate 60daysfolluwing such
Destruction. If the damage or destruction was caused by the gross negligence or willful misfonduct of Lessee, Lessor shall have the tight to recover Lessor's damages
from Lessee, except as provided in Paragraph 8.6,
9.5 Damage Near Mid Of Term. If at any time dudngihe last 6,months of this Lea le there Isdamage for which themst to repair exceeds one month's Base
Rent, whether or not an Insured Loss, lessor may terminate this Lease effective 60 days following the dale of occurrence of such damage by giving a written
lerminadon nonce to Lessee within 30 days after the date of occurrence of such damage, Notwithstanding the foregoing If Lessee at that time has an exertltabie
Option to extend this Lease or to purchase the Premises, then Lessee may preserve this tease by, (a) exercising such option and flat providing Lessorwith any shortage
In Insurance prOceess (or adequate assurance thereof) needed to make the repairs on or before the earlier of (I) the date which h 10 days after Lessee's reeeipt of
lessor's written notice purporting to terminate this lease, or fit) the day prior W the data upon which such option explmh IS Lessee duly exercises achdptien during
such period and provides lessor with funds (oradequot s assurancethereofl to sever any shortageln Insurance pretends, Lessor shall, at lessor'swmmerclelty
reasonable expense, repair such damage as soon as reasonaby possible and this lease shag continue in fug force and effect. If Lessee falls toekerche such option and
provide such funds or assu ante during such period, then this lease shall terminate on the date specified In the termination Peace and Lessee's option shall he
extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(al Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazarded Substance Condition for which lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which lessee's use of the Premises Is Impalred, but not to exceed the proceeds recaived from the Rental value Insurance. All other
obll pitons of tested hereunder shall be performed by Lessee, and Lesser shall have no flabll'ny, for any such damage, destruction, remediation, repair or restoration
except as provided herein.
Ib) FamedIa%. if lessor Is obligated to repair or restore the premises and does not commence, In a substantial and meaningful way, such repair or
restoration within W days after such obligation shag accrue, Lessee my, at any time prior to the commencement of such repair or restoation, give written notice In
Lessor and to any lenders of which Lessee has actual notice, of lessee's election to tesraslnate this lease on a date not less than 60days following the gluing of such
notice. N Lessee gives such Police and such repair or retterabon is not commenced within 30 days thereafter, this lease shall terminate as or the date specified In said
notice. If the mpaIt or restoration Ismmmera;ed within such 30 days, this Loose shall continue In full force and affect, 'Commencer shall mean either the
unconditional authorisation of the preparation of the requlmd plans, or the bsglnning of the actual work on the Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon terminadonaf this tease pursuant to Paragraph 6.218) or Paragraph 9, an equitable od)uamenl shall be made
concerning advance ant Rent and any other advance payments made by lessee to Lessor, Lessor shall, In addition, return to lessee se much of Lessee's Security
Deposit as has not been, or Is not then required to be, used by Lessor.
10. Redproporty taxes.
10.1 OeflnlUam As used herein, the term 'Real Pro party Saxes" shall Include any Form of assessment; foal estate, general, special, ordinary or ext iordinary or
rental levy or lax (other than inheritance, person at Income oreslate taxes); Improvement bond; and/or Iftenser fee Imposed upon or levied against any legal or
equitable Interest of Lessor In the Premises or the Protect, Lessor's right to other Income therefrom, and/or Lessor's business of (easing, by any authority having the
direct or indirect power tow and where the funds are generated with reference to the Building address. Real Property Takes shall she Include any tax, red, levy,
assessment or charge, of any increase therein: (1) Imposed by reason of events occurring during the term of this lease, Including but not IkMted to, 4 change In the
ownership of the Premises, and (A) levied or assessed on machinery or equipment provided by Lessor to lessee pursuant to this Lease.
10.2 Payment of Tues. In addition to Base Rent, Lome shell pay to lessor an amount equal to the Real Property To Installment due at least 20 days prry to
the applicable delinquency date. If any such Installment shall cover any period of time prior to or after the expiration or tern loation of this Lease, Leswe s share of
such Installment shall be prorated. In the event Lessee Incurs a late charge on any Rent payment, Lessor may estimate the current Real Property Takes, and require
that such taxes be paid In advance to Lester by Lessee monthly In advance with the payment of the Base Rent. Such room dy payments shall be an amount equal to
the amount of the estimated Installment of taxes divided by the number of months remaloing Ware the month in which said Installment becomes delinquent. When
the actual amount of the applicable w bill Is known, the amount of such equal monthly advance payments shall be adjusted es rcqubad to provide the funds needed
to pay the apidles ble lakes. it the amount collected by lessons lnsuf rdem to pay such Real Property Takes when due, Lessee shall pay Lessor, upon demand, such
additional sum as Is necessary Advance payments maybe Intermingled with other moneys of Lessor and shall not bear Interest. In the event of aBreath by Lessee In
the performance of Its obligations under this lease, then any such advance payments may be treated by Lessor as an additional Security Deposit
10.3 Joint Assessment. if the Premises am not separately assessed, lessee's liability shall be an equitable ideporaon of the Real Property Takes for all of the
land and Improvements Intludad Wthlnthe (air parcel assessed, such proportion to be conclustrely determined by Lesser from the respective valuations assigned In
the assessor's work sheets or such other information as may be reasonably avaliable.
10.4 Personal Property Too, Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon lessee owned Alterations, Utility Installations,
Trade Fixtures, furnishings, equipment and all personal property of lessee. When possible, Lessee shall cause Its Lessee Owned Alterations and Utility Installations,
Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separa[ey from the real property of lessor. If any of Lessee's soIa
property shall be assessed with Lessor's real property, Lessee shall pay, Lessor tha takes all studies ble to lessee's property within 10 days after receipt of a written
statement setting forth the takes applkable to lessee's property.
11, UNlldetoneservices. lessee shall pay for all water, Bass, heat, light, power, colophon e, trash disposal and other utilities and services supplied to the Premises,
together with any takes lhoreon. If any such services are rest separately metered or billed to Lessee, lessee shall pay a reasonable proportion, to be determined by
lesson, of all charges jointly metered or baled. There shall be rm abatement of rant and Lessor shall not be liable In any respect whatsoever for the Inadequacy,
stoppage, Interruption or diste ntfndinae or any utility, of service due to slot, strike, labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reason able control or In cooperation with govern mental request of directions,
OF fteen days of Lessor's written request, Lessee agrees to deliver to Lessor such information, documents and/of authorbatfon as Lessor needs In order for
l
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Lessor to comply with new or ealsting Appllcable Requirements relating to commercial building energy usage, ratings, and/or the rapordng thereof.
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13, Defaulu Breachsftemedles,
13.1 Default; breach. A 'Dafault"Is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and
Regulations under this Lease. A'breach' Is defined as the occurrence of one or more of the following Defaults, and the fallwe of Lessee to cure such Default within
a appal ble jam ope led.
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(aI The abandonment of the Premises; or thevecadnR of the Premisefwithoutpraalding a commercially reason able level of seturitm01 where the
coverage of the property In sum nee described In Paragraph B31s leopard lied as A result thereof, or without providing reasonable Assurances to minimize potential
vandalism.
(b) The failure of Losses to make any payment of Rent or any Secorlly Deposit required to be made by Lesseelismunder, whether to Lessor or to a third
party, when due, to provide reasonable evidence of Insurance or surety bond, "to fulfill any obllgaton under this Leese which endangers or threatens life or
property, where such failure continues lot a period of 3 business days fallowing written notice to lessee. THE ACCEPTANCE BY LESSOR OF A PAA11AL PAYMENT OF
RENTOR SECURITY DEPOSIT SHALL NOTCONSHTUTE A WAIVER OF ANY OF LESSOR'S RIGHTS, INCLUOING LESSOR'S RIGHTTO RECOVER POSSESSION OF THE
PREMISES,
(el The failure of lessee to allow lessor and/or Its agents access to the Premises or the commission of waste, actor sets constituting public orpdvam
nuisance, and/or an Illegal octwgyon the Premisesby lessee,where, such actions continue lot a period of 3 business days following written notice totessee. In the
event that Lessee commits waste, a nuisance or an Illegal activity a second time then, the Lessor may elect to treat such conduct as a non -curable Breach rather than a
Default.
(all The failure by Lessee to provide 11) reasonable written evidence of compliance with Applicable Requiremousa,(IN the wNto conlncts,(III)the
rescission of an unauthodted assignment or subietdnt, (b) an Estoppel Certificate or Financial statements, (v1 a requested subordination, (vl) evidence concerning any
guaranty and/or Guarantor, (v1) any document requested tender Paragraph 42, (vlli) matertal safete data sheets JMSOS), or(Ix)ant other documentation or
Information which Lesor may reasonably require of Lessee under the terms of this tense, where any such fattest continues for a period of 10 days following written
notice to Lessee.
(of A Default by lessee as w the terms,covenants, condidosn or provisions of this Lease, at of the rules adopted under Paragaph 40 hereof, other than
those described In subparagraphs Lit 1(a1. Jb), it) or Jeff, above, where such Default continues for a period of 30 days after written notice; provided, however, that If
the nature of Lessee's Default Is such that more than 30 days are reasonably So culled for Its cure, then It shall not be deemed to be a breach If lessee commences
such cure within said 30 day period and thereafter dingenllY Prosecutes such cure to completion.
(11 The occurrence ofany of the followingevents; ill the making of any general arrangement as assignment fat the benefit of cfecillon; (if) becoming a
"debtor" as defined In 11 U.S.C. 4 101 or any successor statute thereto (unless, In the case of a petition filed agaimt lessee, the same Is dismissed within 60days); 011
the Appel mment of a trustee or reolver to take possession of substamialh all of Lessee's assets located at the Premises or of lessee's Interest in this tease, where
possession Is not restored to lessee within 30 days; W gv) the attachment, execution or other judicial selture of substantially all of lessee's assets looted at the
Premises or of Lessee's Interest In this Lease, where such soviets Is not discharged within 30 days; provided, however, In the event that any provision of this
subparaBfaph Is contrary to any applicable law, such provision shall be of no force or effect, and not affect the valleity of the tern ing provloons.
(A) The discovery that any Roanclal statement oftessee or of any Guarantee given to lessor was materially false.
(hl If the performance of lessee's obligations under this Lease is guaranteed: (1) the death of a Guarantor, (II) the termination of a Guarantor's liability
with respect to this Lease other than In accordance with the terms of such guaranty, (I a Guam issues becoming Insolvent or the subject of a bankruptcy gong, fall a
Guarantor's refusal to honor the guaranty, or Fir) a Guarantor's breach of Its guaranty obligation on an anticipatory basis, and Lessee's failure, within 60 days following
wfltten notice of any such own 4to provide written ahemative assurance or security, which, when coupled with the then existing re sources of lessen, equals or
exceeds the combined He and at resources of Lessee and the Guarantors that existed at the time of execution of this lease,
132 Remedies. If lessee falls to perform any of its aff rmaLive duties or obligations, within 10 days after written notice lot Incase of anemergency, without
notice), lessor may, at Its under, perform such duty or obligation on lessee's behalf, Including but not limited to the obtaining of reasonably required bonds,
Insurance policies, orgovemmental licenses, pemilts or approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses Incurred by Lessor
In such performan o upon receipt of an Invoka therefor. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting lessor
In the exercise of any right a remedy which Lessor may have by reason of such Breach:
(a) Terminate lessee's fight to possession of the Premises by any lawful means, In which case this Lease shall terminate and lessee shall Immediately
surrender possession to lessor. In such event Lessor shell be enUtled to recover from Lessee: (i) the unpaid Rent which had been earned at the time of termination;
(II) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of aword exceeds the
amount of such rental loss that the Losses proves could have been reasonably avoided; (111) the worth at the time of awaN of the amount by which the unpaid rem Por
the balance of the term after the time of award exceeds the amount of such rental loss that the lessee proves could be reasonably avoided; and (tv) any other amount
necessary to compensate Lessor for all the detriment proximately caused by the lessee's failure to perform Its obllgadons under this Lease or which In the ordinary
course of things would be likely to result therefrom, Including but not limited to the can of recovering possession of the premises, expenses of feleking, including
note ssary renoodon and alteration of the Premises, reasonable attorneys' fees, antl that portion of any leasing commission paid by Lessor In connection with this
Least applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to In provision J110 of the Immediately preceding
ismence shall be computed by discounting such amount at the discount fate of the Federal Reserve Bank of the District within which the promises are looted at the
Imeof Award plus one percent. Efforts by Lessor to mitigate damages caused by Lesson's Breach of this lease shall not walve lessor's right to recover any damages to
which tosser is otherwise entitled. If terminadon of this Lease Is obtained through the provislonaI remedy of unlawful detalner, Lessor shall have the right to recover
In such proceedfnR any unpaid Rent and damages as are recoverable therein, or lessor may reserve the right to recover all or any Pitt thereof In a separate suit, if a
notice and grace period required undo Paragraph 131 was trot previously, given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful
detainer statute shall abo constitute the notice required by Paragraph 13.1. In such Use, the applicable grace perfect required by Paragraph 13.1 and the unlawful
data lost statute shall run conourfenth, aM the fa0ure of Lessee to are the Dahuil Within the greater of the two such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lester to the remedies provided for In this Lease and/of, by said statute.
lb) Continue the Lease and lessee's fight to possession and recover the Rent as It becomes due, In which event to&seemay sublet or assign, subject only
to reasonable limitations. Acts of maintenance, efforts to relet and/or the appointment of a racebrer to protect the Lessot's Interests, shall Trot constitute a
termination of the Lessee's right to possession,
Id Pursue any other remedy now or hereafter available under the laws orjudidal decisions of the state wherein the premises afe located. The expiration
or termination of this Lease and/or the termination of Lowe'sfight to possession shall rot relieve lessee from liability under any Indemnity provisions of this Lease
as to makers oauring or accruing during the term hereof car by reason of Lessee's Occupancy Of the Premises.
13.3 Inducement Recapture. Any agreement for tree or abated rent or other charges, the cost of tenant improvements for Lessee paid for or performed by
Lesser, or for the giving or paying by Lester, to or lot Lessee of any cash ar other bonus, Inducement or consideration for Lessee's entering Into this Lease, all of which
concessions are forestaller referred to as "Inducement Provlslons," shall be deemed conditioned upon lessee's fug and [althful performance of all of the terms,
covenants and condlttom of this Lease. Upon Breach of this Lease by Lessee, any such inducement Provision shall automatically be deemed deleted from thletease
and of no further force or effect and any runs, other charge, bonus, Inducement or consideration theretofore abated, given or paid by lessor under such an
d mom ProytOon shall be Immediately due and payable by lessee to lessor, notwithstanding any subsequent cure of said Breach by Lessee. Theacteptancgby
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Lessor of renter the cure of the areach which Init sled the operation of thh paragraph shall not be deemed a water by tensor of the Provisions of this paragraph
unless specifically so stated In writing by Lessor at the time of such acceptance.
13.4 Lam Charges, lessee hereby acknowledges that late payment by lessee of Rent will cause Lessor to Incur tasks not contemplated by this lease, the exact
amount of which will be extremely difficult to ascertain. Such costs Include, but aranat limited to, processing and accounting charges, and late charges which maybe
Imposed upon Lester by any tender. Accordingly.a any Rent shall net be received by Lessorwithin5 daysafto, suchans untshah be due, then, without any
requirement for nonce to Lessee, Leaeeshall Immediately pay to lessor a One-time late charge equal to 10%of each such merdue mount or S100,whlchever h
great¢(. The Ponies hereby agree that such late charge represents a fair and reasonable estimate of the costs Lessorwill incur by reason of such bra payment.
Acceptance of such ate charge bylessor shallIn no event mnstilute a waiver of Lomas Dafauh m Breach wfth respectto such overdue amount, nor prevent the
exercise of any of the other rights and remedies Emoted hereunder.
adwnw.
13.5 Inteaat. Any monetary payment due Lessor hereunder, other than late charges, not received by Lamr, when due shall bear Interest from the 31stday
after It was due, The Interest (' nterest') charged shall be computed at the rate of 10%per annum but shall not exceed the maximum rate allowed bylaw. Interest is
Payable In addition to the polential late charge provided for In pamlimph 23.4. r
13.6 Basch by Lester.
(a) Noticeoffireah. lessmshall not be deemed In breach ofthh Leaseunlem Lessor falhwlthin a reasonable time to perform an obligation required to
be performed by lessor. For purposes ofthis Paragraph, a reasonable time shall in no event be less than 30 days otter mceapt by lessor, and any Lender whose name
and address shall have been furnished to lessee In writing for such purpose, of written notice speciryingwherein such obligation of Lessor has not been performed;
provided, however, that It thenatureor Lessor's obligation Is such that more than 30 days are reasonably required for As performance, then lessor shell not be In
breach If performance is commenced within such 30 day pored and thereafter dingwglypursued to completion.
(b) Pedamtanm by Lessee on Behalf oflessor. In the event that neither Lessor nor tender cures said breach within 30 days after atelier of sold notice,
or If having commenced said cum they do not diligently pursue It to completion, then Lessee may elect to cure said breach at lessee's expense and offset from Rent
We actual and reasonable cast to perform stub am, provided, however, that such offset shall not exceed an amount equal to the greater of one month's Base Rent at
the Security Deposlt, reserving Lessee's detain seek reimbursement from Lessor for amysuch expense in excssof such offset. Lesseeshall document the cost of said
cure and supply sold documentation to lessor.
14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under thethmot of the exercise of said power
(collectively"Condemnation"), this Lean shalitermhnate as to the part taken as of the date the wo demningeuthoritytakes intent possession, whichever first otcun.
If more than 10% of the Binding, notable than 25%of that pardon of the Pre alsesnot occupied byany building, bookeo byCandemnation, Lessee may, at Lessee's
option, to beexafclnd Inwdtingwlthln 10d3ys after lessor shall have given Lessee written noticeof such eking (at In the absence of such rossre,wlthla 10 days
after the condemningauthorily, shallhave taken possession) terminate this Lean mofthe date the condemning authodtytakes such possession. If lessee does not
terminamthhs Leasein accordance Whitton foregrengrthis Lease shah remain In full forceand ogemas to the portion of the Parallax remainlMoorcept that the nose
Reptilian be reduced in proportion to the reduction In utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be the
property of lessor, whether such award shall be made ascompensadon of diminution In value of the leasehold, the wiueof the pan able, or for severance
damages; provided, however, that Lessee almost endtiedto arc/eampensatfon paid bythe condemnorfor lessee's ablation expenses, tassel busloessgoodwill
and/of Trade Refusal, without regard towhelher or not this lease Is terminated pursuant to the provbionsof this pemgreph. ARAlterationtand Utigty installadare
madeto the Premises by lessee, (or purposes of Condemnation only, shall beconsNered the property of the Lessee and Lessee shall be entitled tc any and all
compensation which [&payable theater. In the went that this Lease knot terminated by assonant she Condemnation, Lessor:hall repair any damage to the
Premises caused by such Condemnation.
�agaloW
It. Estoppel Certificates.
(a) Each Party Jos °RapoMing Party") shall within 10 days after written notice from the other Party (the "Requesting party,) execute, acknowledge and
deliver to the Requesting Party a statement in writing In form similar to the then most cram "Estoppel Cerdncate" form published BY AIR CRE, plus such addIttemal
information, cnfirmation and/or statements as may be reasonably requested by the Requesting Party.
(Ill [(the Responding Party shall fall to execute of deliver the Estoppel Certificate within such 10 day period, the Requesting Party may execute an
Estoppel CarlBcate statingthai: (it the Lease Is In full fora and effect without modification except as may be represented by the Requesting Party. 00 there are no
uncured defaults In the Requesting Party'sperermance, and (IIg if lessor Islhe Requesting Party, not tame than one months rent hasbeen paid In advance.
Prospective purchasers and encu atomacen may rely upon the Requesting Party's Estoppel Certificate, and the Responding Party shall no ¢stopped from denying the
truth of thefacts contained In said Cortificate. In addition, Lessee acknowledges that anytalhum an Its part to provide such an Estoppel Cenmcalewill expose lessor
tqL 60A and potendally muse Lessor to mar costs not contempbted by this Lease, the extent of which will be extremely difficult to ascunaim AccardingH should the
YV
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Lessee fall tone Cute and/or dellver a requested Estoppel certificate In a timely fashion[ Lessee shall pay to Lessor R fee of $50p4hnmoothb,.
The Parties agrue that such Increase In Base Rent represents fair and reasomb a compensation for the additional
rlsk/costs that Lessor will Incur by reason of lesseeb failure to provide the Estoppel Certificate, Such Indease In Base Rentshall In no event onsfltute a waiver of
Lessee's Default or Breach Will respect to the failure to provide the Estoppel caul cate nor prevent theeserclseof any of the other rights and remedies granted
heremilef.
(e) If Lessor desires to finance, refinance, or sell the Promises, or any pail thereof, Lessee and all Guarantors shall wlthinl0 days after written notice
from Lessor deliver to any timendei lender or purchaser designated by Lessor Such gmAclal statements as maybe reasonably required by such lender or purchaser,
Including but not limited to Lossee's financal statementsfor the part 3 years. NI such financial statements shall be received by lessor and such tender or purchaser In
confidence and shall be used only for the purposes herein set forth.
17. Definition of lessor. The term "Lessor" as used Imeln shall mean the owner or owners at the time In question of the log title to the Premises, or, if this is
sublease, of the Lessee's Interest In the prior lease. In the event of a transfer of Lessor's title or Interest In the Premises or this Lease, Lessor shall deliver to the
transferee or assignee (In cash or by credit) any unused Security Deposit held by Lessor. Upon such transfer or assignment and delivery of the Security Deposit, as
aforesald, the prior Lessor shall be relline d of all liability with respect to the obligations andfor covenants under this tease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants In this lease to be performed by the Lessor shall he binding only upon the Lessor as heralnabo er defined.
18, Sentablilty. The invalldhyot any provision of this tease, as determined by a wort of competent jurisdiction, shall in no way affect the validity of any other
provldon hereof.
19. Days. Unless otherwise specifically Indicated to the contrary, the word`days"as used In this Lease shall mean and refer to calendar days.
20, limitation on stability, The oblgations oflessor under this Lease shag not constitute personal obligations of lessors orlts partners, members, directors, officers
or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the sadshction of any liability of Lessor with respect to this Lease, and
shall not well recourse agalnstLessor's partners, members, directors, officers or shareholders, or arty of their personal ossetdor such sattsfecdon.
21, Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by the parties under this Lease.
22. NO Prior or Other Agreements; Broker Ortdalmor. This Lease Contains a 11 agreements between the Parties with rgspett to any matter mentioned herein, and no
other prior or contemporaneous agreement or understanding Shall be effective. Lessor and Lessee tochrepresents and warrants to the Brokers that it has me do, and
Is relying solely upon, Its own Investigation as to the nature, quality, character and financial responsibility of the other Party to this lease and as to the use, nature,
quality and character of the Premises. Brokers have no responsibility with respect thereto or with respect to any default or breach hereof by either Mrty.
33._NotWa.
re
raoWodbylAalostoa.
14. Walsom
(a) No walvorby Lessor of the Default or Breach of any term, covenant orcondlnon hereof by Lessee, shall be deemed a walver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by lessee of the some or of any other term, Covenant or condlgon hereof. Lessor's consent to,
Of approval of any act shall net bedeemes to render unnecessary the obtaining of Lessor's consent 10, or approval of, any subsequent or similar act by Lessee, of be
construed as the basis of an esoppel to enforce the provision orprovlBom of this Lease requiring such consent.
(b) The acceptance of Rent by lessor shall not Be a waver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by lessor on
account of moolm or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee In connection therewith, whlchmch statements
and/or conditions shall be of no force or effect whatsoever unless spodfially agreedto In writing by Lessor at or before the Ha l deposit of such payment
(c) THE PARTIES AGREE 714AT THE TERMS OF THIS LEASE SHALLGOVERN WITH REGARD TO ALL MATTERS RELATED THERETO AND HEREBY WANE THE
PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE 15 INCONSISTENT WITH THIS LEASE.
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26. No Right To Holdover. Lessee has an right to retain possession of the Premises or any part thereof beyond the exphationor termhadon of this Lease. In the
event that Lessee holds over then the Base Rent shall be Increased to 1SOX of the Base Rent applicable Immedlatelyprecedlog the expiration" termination.
Holdover Base Rent shall be calculated on monthly basis. Nothing contalnedheminshall be construed as conseMby Lessor t0 amyholdingover by Lessee.
27. Cumulallva Remadlns. Nommedy or eletttoo hereunder shall be deemed exclusive but shall, wherever poshle, bacumulallve with all ether remedles at low or
in equity.
28. Coven ants and CondlNom; CnnstrucdonOfAgmernmL All provisions or this Lease to be observed or performed by Leum are both covenantsand conditions.
In construing this lease, all headings and titles are for the convenience of the Parties only and shall not he considered a part of this Least. Wherever required by the
context, the singularshall Include the plural and vice vena, This Lease shall not he construed as if prepared by one of the Parties, but rather according to Its fair
meaning as a whole, as if both Parties had prepared it.
29. Binding Effect; Choice of law. this lease shall be binding upon the Parties, their personal representatives, successon and assigns and be governed by the laws
of the State In which the Premises are located. Any 11092flm between the Parties hereto concerning this Lease shall be Initialod In the countyin which the Premises
are located. Signatures to this Lease accomplished by meant of electronic signature a similar technology shall be legal and binding.
G. Subordination; Attommenh Nan•Dlsturbance.
30.1 Subordination. This Lease and any Option granted hereby shall be sub)ect and subordinate to any ground lease, mortgage, deed of trost, or other
hyputhoeanon or security device (tollectiveaa "Security Device"), now Or hereeh6r placed upon the Premises, to any and all advances made on the sOcurlrythereof,
and to all renewals, modifications, and extensions thereof. lessee agrees that the holders of any such Security Devices (It this Lease together referred to as "Lander")
shall have no IIa6Rlty or obligation to perform any of the obtlgallms of Lessor under this lease. Any tendermay elect to have this Lease and/or any Option granted
hereby superior to the lien of its Security Device by glving written notice thereof to lessee, whereupon this lease and such Options shall be deemed prlor to such
Security Device, notwithstanding the relative dates of the documentation orrecordahon thereat
30.2 Adornment. In the event that lessor lranden title to the Premhes, arthe Premises are acquired by another upon the foreclosure or termlonce of a
Security Device to which this Lease Is subordinated (1) lessee shall, subjtcl to the am -disturbance provisions of Paragraph 30.3, attain to such new owner, and upon
request, enter Into a new lease, contaiaing all of the terms and provisions of (his lease, with such new owner for the remainder of theteun hereof, or, at the election
of the new owner this teesewill automatically become anew lease between lessee and such new Owner, and (1l) Lessor shall thereafter be colleted of any further
obligations hereunder and such newcomer shall assume all of lessor's obligations, except that such new owner shall"": (a) he liable forany an or omission of any
prior lessor orWth respect to events occurring prior to acquisition of ownership; Rol be subject to any o@sets or defenses which Lesseemlght haveagalnct any print
lessor, (c) be bound by prepayment of more than one month's rent, or fd) be liable for the return of arrysecurliydeposit paid to any prior estor which was not paid or
credited to such new owner.
303 Non-Dltturbanu, With respect to Security Devices entered Into by Lessor after the execution of this Lease, Lessee's subordination of this Lease shall be
subject to mcelving a commercially reasonable non -disturbance agreement (a "Non-tisturbance Agreement"I from the lender which Non -Disturbance Agreement
provides that Lessee's possession of the Premises, and this Lease, Including any options to extend the term hereof, will not be dlsturbed $o long as Lessee Is not in
Breach hereof and Bharat to the record owner of the Promise a. Further, within EO days after the execution of this Lease, Lessor shelf, It requested by lessee, use Its
commerclally reasonable efforts obtain a Nm-Disturbance Agreement from the holder of any pre-exisdoe Security Device which Is secured by the Premises, in the
event that Lessur Is unable to provide the Non -Disturbance Agreement wltNn said 60 dayl, then Lessee may, at Lessee's option, directly contact Lender end attempt
to negodale for the execution and delivery of a Non-Dlsturbance agreement.
30A Self -Exec this. The agreements contained In this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that,
upon written request front Lessor or a Lander In connection with a sale, ftnandr if or refinancing of the Premhes, Lasses and Lessor shall execute such further wrimits
as may be teasonably required to separately document any subordination, attomment and/or Non -Disturbance Agreement provided for herein.
31. Attorneys' Fees, It any Party or Broker brings an action or proceeding Involving the Premises whether founded In tort, Contract Of equity, or to declare rights
hgreu�Ner, the Pravailing Party (as hereafter defined) In any such proteeding action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may
y
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be awarded In the some suitor recovered Ina separate sull, whether or not such action or proceeding Is pursued to decision or judgment. The term, "Prevailing
Party" shall Include, without lInshatlon, a Party watcher who substantially obtains or defeats the rellef sought, as" case maybe, whether by compromise,
settlement, judgment, of the abandonment by the other Party or Broker of Its claim ar defense. The attorneysfees award shall not be computed in accordance with
any court fee schedule, but shall be such as to fully relreburse all attorneys' fees reasonably Incurred. Inaddleon, Lessor shall be entitled to attorneys' fees, costs and
expenses Incurred In the prepare don and service of notices of Default and consultations in connection therewith, whether or not a legal action Is subsequently
commenced In connecnon with such Des uIt or resulting Breech f$2001s a reasonable minimum per occumence for such services and consultation).
32, Letoes Access; Showing Pro misos;Repairs. Lessor and lessor's agents shall havethe right to enter the Premises at any time, in the Wm of an emergency, and
otherwise at reasonable times after reasonable prior notice for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such
allemtiom, so pain, Improvement or addidons to the Premises as Lessor may deem necessary or desirable and the erecting, using and mebintalning of udlldes,
services, pipes and conduits through the Premises and/or other premises as long as there Is no material adverse effect on Lessee's use of the Premises. All such
activities shall be without abatement of rent or Ilabillty to lessee.
33. Auctions, Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor's prior written cement. Lesmf shall not be
ebllgated to exercise any standard of reasonableness In determining whether to permit an auction.
34. Signs. Lessor may place on the Premises ordinary 'For Sale" signs at any time and ordinary"For Law' signs during the last 6 months of the term hereof. Except
for ordinary "for sublease" signs, Lessee shell not place any sign upon the Premises without lessor's prior written consent. All signs muss comply with all Applicable
Requirements,
35, nomination; Merger. UMass spedfically stated other wise In writing by lessor, the voluntary or other surrender of this Lease by Lessee, the mutual terminators
or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee, shall automaticallyterminate any sublease or lesser estate In the Premises; provided,
however, that Lessor may elect to continue any one or all existing subtenancles. Letter's failure within 10 days following any such event to elect to the contrary by
wdden notice to the holder of any such lesser Interest, shall constitute Lessor's election to have such event constitute the termination of such interest.
36. Consents, All requests for consent shall be in writing. Except as otherwise provided hemtn, wherever to this tease the consent of a Party is required to an act by
or for the other Party, such consent shs11 not be unreasonably withhold or delayed. Lessor's actual reasonable costs and expanses (Including but not limited to
ambience, attorneys', engineers' and other consultente fees) incurred In the consideration of, as response to, a request by lessee fat any lessor consent, Including
but not limited to consents to in assignment, a sobletling or the presence or use of a RasardousSubstance, shall be paid by lessee upon receipt of an Invoice and
supporting documentation therefor, Lessor'scoment to any act, assignment or subletting sisal not constitute an acknowledgment thatno Default or Breach by Lessee
of this Lease exists, nor shall such consent be deemed a walver of any then existing Default or Breach, except as maybe otherwise spedgcally stated inwrmng by
Lessor at the home of such consent. The (allure to specify herein any particular condition totaste r's consent shall not preclude the imposition by Lessor at the done of
consent of such further or other conditions as are then reasonable with reference to the particular mane, for which consent Is being8lvao. In the event that either
Party also gmes with any determination made by the other lut ounder and reasonably requests the reasons for such determination, the determining party small furnish
Its ,Batons In writing and In reasonabe detail within 10 business days following such request.
37. Guarantor.
37.1 Execution. The Guarantors, If any, shall each execute a guaranty In the form most recently published BY AIR CAE, and each such Guarantor shall have the
same obligations as lessee under this Lease.
$7.2 Default It shall constitute a Otto Ott of the Lessee if 0MyGeometer falls or reforms, upon request to provide: (a)s videnae of the exetudon of the guaranty,
Including the authority of the party signing on Guarantor's behalf to obligate Guarantor, and In the use of a corporate Guarantor, a certified copy of a resolution of its
board of directors authorizing the making of such guaranty, (b) current financial statements, (c) an estoppel CeBBcate, or (d) written confirmation that the guaranty is
still In effect.
3a, quiet Postesslon. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee's part to be observed
and performed under this Lease, Lessee shall ITawquiet possession and qulet enjoyment of the Premises during the term hereof,
39. Opttom. It Lessee Is granted any Option, asdelined below, then the following provisions shall apply.
39.1 Definition. "Option" shall mean: (a) the right to extend or reduce the term of or renew this Lease or to extend at reduce the term of or renew any lease
that lessee has on other property of Lessor, (till the right of flat refusal or first offer to IOW either the Peembes or other property of Lessor, fc) the right to purchase,
the right of first offer to purchase or the right of first refusal to purchase the Promises or other property of Lessot.
29.2 Options Personal To Orlglnal Lessee. Any Option granted to lessee In this lease Is personal to the original Lessee, and cement be assigned of exorcised by
anyone other then Bald orlglnet Lessee and Only while the original Lessee is In full possession of the Premises and, If requested by Lessor, with lessen tent ying Ihnt
Lessee has no Intendon of thereanet assigning or subletting.
39.3 Multiple Options. In the event that lessee has any multiple Options to extend or renew this tea", a later Option on not be exercised unless the prior
Options have been validly exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option; 11)clwas the period commencing with the giving of any notice of Default and Conti until said
Default is cured, (III during the period of time any Rent Is unpaid (without legend to whether notice thereof Is given Lessee), (011 during the time Lessee Is In Breach of
this lease, or IN) In the event that Lessee has been given 3 or mare notices of separate Default, whether or not the Defaults are cared, during the 22 month period
Immediately preceding the exercise of the Option.
(b) The period of Into within which an Option maybe exercised shall not be extended or enlarged by reason of Lessee's Inability to emrdse an Option
oeraute of the provisions of Pamgroph 39.4(e).
(c) An Option shah terminate and beef no further force or offers, notwithstanding Lessee's dueand timely exercise of the Option, If, after such exercise
and prior to the commencement of the extended term orcomplodon either purchase, (1) Lessee fallsto pay Rent for a period of 30 days after such Rent becomes due
(without any necessity of Lessor to give notice themol), or (B) if lessee commits a Breach of this lease.
40, Multiple Buildings. Iftlte Promises are apart of a groupof bulldingscontrolled by Lessor, Lessee agrees that It will abide byroad conform to all reasonable rules
and regulations which Lessor maymake from time to Time for the management, solely, and rare ofsald properties, Including the rare and cleanliness of the grounds
and Including the parking, loading and unloading of vehicles, and to cause Its employees, suppliers, shippers, customers, tootfactors and luvilees to m abide and
Wgysfafall, Lessee also agrees to pay Its fair share of common expenses Incurred in connection with such rules and regulations.
IfNITIALS
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STN-27.30, Revised 11-25-2019 Page 14 of 16
41. security MOO$Jra, Lessee hereby acknowledges that the gent payable to lessor hereunder does not Include the cost ofRuard service or other security
measures, and that Lester shall have no obligation whatsoever to provide same, lessee assumes all responslblllty far the protection of the Premises, Lessee, Its
agents and Invitees and lhelr property from the acts of third parties.
42. Reservations. Lessor reserves to Itself the right, from tlme to time, to granLwlthout the consent of joinder Of Lessee, such easements, rights and dedications
that Lessor deems necessary, and to cause the recordation Of parcel maps and restrictlons, to long as such easements, rlghU, dedications, maps and mSUlotiont do
not unreasonably Interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents materiality requested by Lester to elfeduate any such
easement rights, dedication, map orrestrlctiom.
43. Performance Under Protect. If at any Ume a dispute shall arise as to any amount or turn of money to be paid by one Patty to the other under the provisions
hereof, the Parry against whom the obligation to pay the money U asserted shall havethe right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of sold Party to immure suit for recovery Or such sum. If It shah be adjudged that there
was no legal Obligation on the part of said Party to pay such sum or any part thereof, said Party shall be entitled to recover such sum or so much thereof as It was not
legally required to pay A Patty who does not Initiate suit for the recovery of turns paid"under Protest' within 6 months shall be deemed to he" welved its right to
protest such payment.
44. Authority; Multiple Patties; Execution.
(a) If either Patty hereto Is a corporation, trust, limited llahlllty, Company, partnership. or simflar entity, each Individual executing this Lease on behalf of
such entity lefeeSents and warrants that he orshe lsduly authorized to execute and deliver this Leese on its behalf. Each Party shall, within 30days after request
detest to the other Party satisfactory evidence of such authority.
fill If this Lease is executed by more than one person or entity as'Lesue",each such person or entity shall be Jointly and severalty liable hereunder His
agreed that anyone othhe named Lessees shall beempowered to execute any amendment to this Lease,or other document ancillarythereto and bind an of the
named Lessen, and Lessor may mlyon the same as IF all of the named Lessees had executed such document.
(c) This Lease maybe executed by the Parties in counterparts, each of which shall be deemed an original and all of which together shall constitute one
and the some Instrument.
45. Conflict. Any conflict between the printed provisions of this lease and the typewritten or handwridenprovhlons shall becomrolled bylhetypevvil or
handwritten pralsions. I
46. Offer. Preparation of ihU Lease by either Panyor their agent and submisslon of same to the other Party shall not be deemed an offer to lease to the other
Party. This lease Is not Intended to be binding until executed and delivered by all Padles hereto.
47, Amendments. This Lea se may be modified only In wrldng, signed by the Parties In Interest at the Ume of the modification. As long as they do not materially
change Lessee's obligations hereunder. lessee agrees to make such reasonable non -monetary modlllcationsto this Lease as may be reasonably required by a Lender
in connection with the obtaining of normal financing or reflnoncing of the Premises.
48. Waiver efluryTdol. THE PARTIES HEREBY WANE THEIR RESPECTIVE RIGHTSTO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY
OR ARISING OUT OF THIS AGREEMENT.
49. Arbitration of Disputes. An Addendum requiring the Arbitration of all disputes between the Parties and/or Broken arising out of this lease ID is 2 Is not
attached to this Lease.
$0. Atcessibinty; Americans with blsablgthasAct,
(a) The Premises:
12 have not undergone an inspection by a CoMfied Access Specialist ICASP). Note: A Certified Accest SPeciaust (CASp) con Inspect the subject premises and
determine whether the subject premises comply with all of the applicable eonjtruedon-mlated accesslbglty standards under state law. Although state law does not
require a CASp Inspection of the subject premises, the Commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp Inspection of
the subject premises for the Occupancy or potential occupancy of the lessee or tenant, It requested bythe lessee or tenant. The pestles shall mutually agree on the
arrangements for the time and manner of the CASp Inspection, the pawn ent of the fee for the CASp Inspection, and the Cost of making any repairs necessary to
correct violations of construction -related accesslhllity standards within the premises.
❑ have und ergone, an Inspection by a Certified Access Specialist (CASp) and it was determined that the Premises met all applicable construction -related
accessibility standards pursuant to California Cell Code§55.51 at seq. Lessee acknowledges that It received a copy of the inspection report at least 48 boon pilot to
exeetudngthis Lease and agrees to keep such report Confidential,
0 have undergone an Impaction by a Certified Access Specialist (CASIP) and It was detemslntd that the Premises did not meet all applicable construcdamrelated
a ccusib011ysUndards pursuantto Callromla Civil Code §55.Stetset. Lessee acknowledges that It received a copy of the Inspection report at least 48 hours prior to
exetutm$ this lease and agrees to keep such report Confidential except as necessary to complete repairs and Corrections of violations of construction related
accesilbillly, standards.
In the eveatthat the Premises have been Issued an Inspection report by a CASpthe Lessor shall provide a copy of the disability access inspection certificate to lessee
wlthln 7 days of the execution of this lease.
(b) Since compliance with the Americans with Disabilities Act(ADA)and other state and local accessibility statutes are dependent upon Lessee'sspecific
use of Me premises, Lester makes no warrantyor representation as to whether or net the PremisescomptV with ADA or anyslmgarlegislation, mtheeventihal
Lessee's use of the Premises regoiles modifications or additions to the PlemisesIn order to be incompliance with ADA or other accessibllltystatutes, Lessee agrees to
make arq such necessary modifications and/or additions at Lessee's expense.
LESSOR AND LESSEEHAVE CAREFULLY READAND REVIEW EDTHIS LEASEANO EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS
LEASE SHOW THEIR INFORMED AND VOLUNTARYCONSENT THERETO. THE PARTIES HEREBY AGREE THAT ATTHE TIMETHIS LEASE 15 EXECUTED, THE TERMS OF
THIS LEASE ARECOMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEEWITH RESPECTTOTHE PREMISES.
ENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CAE OR BY ANY BROKERAS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT ORTAX
WP
C 2019AIR CRE. All Rights Reserved. Last Edited: 2/25/20219:53AM
STN•27.30, Revised 11-25.2019 Page 15 of 16
CONSEQUENCES OF THIS UASt OR THATRANSACTION TO WHICH MR11ATES, THE PARTIes ARB UROEO Vol
1, SEEKADVICt OPCOUNSeLAS TO "a tWALANOTAK OONSEAUENCESOP TNISLEASE,
2, RMINAPPROPRIATRCONSULTANTSYOAEVIEWANDHIVtUIGATilHECOf4DMONOPTNNPREMISES,SA101NVESTIOATION$11MA401CWDB BUT NOT at
LIMITIOTO: INS POLSIBLB PRENRICtOPRA:ARDOOS SUDSTANCIS,THE ZONING OF THE PASMISES,THt BTRUCTURALINTEORITV, TNT CONDITION OF THE ROOT
AND OPERATING $MIMS, AND THE SUUAOROV OF THE PREMISES FOR LESSIrS INTENDED USE.
WARNINOt IFTHE PREMISESAR! LOCATED INA SMEOTHER THANCAUFORNIA, CIRT•AIN PROVISIONSOF THE LEASDMAY NEROTO BE REUMD70 COMPLY WITH
THitAW$ OFTHE STATE IN WHICH THE PREMISES ARE LOCATED.
The Pantos hereto have eaataled this tease at the pleated on the dates touched aArwe their respoetPnNgmlumS.
eaewled al: EKemted aU
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INITIALS
9)1019AIR CRg, All RighlaReaeryed,
STN•27,30, Revised 11-2E-2019
Lott Edited; 2/2$/20219:53 AM
Page 16 of 16
A-2021-028
Lessee City of Santa Ana Signature Page to:
Addendum to
Standard Industrial/Commercial Single -Tenant Lease — Net
For Certain Premises Commonly Known as
1815 East Carnegie, Santa Ana, California 92705
March 1, 2021
CITY OF SANTA ANA:
Kristine Ridge
City Manager
APPROVED AS TO FORM:
Sonia R. Carvalho
City4ttorney
'I i
Ryan O Hodge
Assistant City Attorney
ATTEST:
u
Daisy Gomez
_/,,/ Clerk of the Council
RECOMMENDED FOR APPROVAL:
Steven Mendoza
Executive Director
Community Development Agency
ADDENDUM TO
STANDARD INDUSTRIALICOMMERCIAL SINGLE -TENANT LEASE -NET
FOR CERTAIN PREMISES COMMONLY KNOWN AS
1815 EAST CARNEGIE, SANTA ANA, CALIFORNIA 92705
MARCH 1, 2021
This Addendum (this "Addendum") is being executed concurrently with and is made a part of that
certain lease titled "Standard Industrial/Commercial Single -Tenant -Net" dated March I, 2021 (the "Form
Lease") by and between Dyer 19, LLC ("Lessor") and The City of Santa Ana ("Lessee" and sometimes
herein the "City") and this Addendum shall control in the event of any inconsistency with the provisions of
such Form Lease. The Section and Paragraph Numbers of this Addendum are now added Sections and
Paragraphs to the Form Lease. As used herein, the "Lease" shall mean the Form Lease as supplemented
and amended by this Addendum. Unless otherwise defined in this Addendum, any defined word contained
in this Addendum has the some meaning as it is defined in the Form Lease.
51. Intentionally Omitted.
52. Rent Comma c0 amen . Notwithstanding anything to the contrary set forth in this Lease, Base Rent
shall commence, and the first monthly payment of Base Rent shall be paid, on the
Commencement Date. If the Commencement Date is not the first day of a calendar month, then
such first monthly payment of Base Rent shall be in an amount equal to the aggregate of a
prorated Base Rent payment (based on a 30 day month) from such day to the end of that calendar
month plus the amount of the full Base Rent payment for the next consecutive calendar month.
53. Rent Adjustments. On July I, 2021 ("First Rent Adjustment Date"), the monthly Base Rent
payable under this Lease shall automatically increase by 3,0% from the monthly Base Rent
amount due and payable during the immediately preceding year. Thereafter, on each anniversary
of the First Rent Adjustment Date (each being a "Subsequent Rent Adjustment Datel during the
Term hereof, the monthly Base Rent payable under this Lease shall further automatically increase
by 3.0% from the monthly Base Rent amount due and payable during the immediately preceding
year from the then last immediately preceding Subsequent Rent Adjustment Date.
54. Lessee's Improvements. Notwithstanding anything to the contrary set forth in this Lease, all
Utility Installations, Trade Fixtures and Alterations, including Lessee Owned Alterations and/or
Utility Installations, shall be free and clear of any and all liens and/or encumbrances in favor of
any third -party and shall be available, without limitation, to secure Lessee's faithful performance
of its obligations as set forth in this Lease. Upon any default or breach of this Lease by Lessee
whereby Lessor elects to terminate the Lease, such Utility Installations, Trade Fixtures and
Alterations, including Lessee Owned Alterations and/or Utility Installations, shall remain upon
and be surrendered by Lessee to Lessor with the Premises, subject to Lessee's right to remove the
same, at Lessee's sole cost and expense, as set forth below, The Premises shall otherwise be
returned to Lessor in the same condition as of the date of this Lease, reasonable weer and test
excepted. After the Commencement Date, and thereafter from time to time at the reasonable
request of Lessor, Lessee hereby agrees to execute certain security instruments, including, but not
limited to, a UCC Form-1 or other filing, in order to create and/or perfect Lessor's security
interest in such Utility Installations, Trade Fixtures and Alterations, as set forth herein, which
security instruments will be prepared by Lessor and submitted to Lessee, and recorded by Lessor,
at Lessor's sole cost and expense, Upon any termination or earlier expiration of this Lease not
resulting from the default or breach of this Lease by Lessee, all Utility Installations, Trade
Fixtures and Alterations, including Lessee Owned Alterations and/or Utility Installations, located
in the Premises shall remain upon and be surrendered by Lessee with the Premises, subject to
12926447.1
Lessee's right to remove the same, at Lessee's sole cost and expenses, asset forth below. The
Premises shall otherwise be returned to Lessor in the same condition as of the date of this Lease,
reasonable wear and tear excepted, Notwithstanding the foregoing, upon any termination or
expiration of this Lease not resulting from the default or breach of this Lease by Lessee, Lessee,
at Lessee's option, shall have the right to remove any such Utility Installations, Trade Fixtures
and Alterations, including Lessee Owned Alterations and/or Utility Installations, at Lessee's sole
cost and expense, provided that (a) all such Utility Installations, Trade Fixtures and Alterations,
including Lessee Owned Alterations and/or Utility Installations shall be removed by Lessee
within 15 days after such termination or expiration of this Lease and (b) Lessee shall, at its sole
cost and expense, repair any damage to the Premises caused by such removal.
55. Lessor's Obligation . Notwithstanding anything to the contrary set forth in the Lease, Lessor
shall not be required to (a) remediate or reotify any future non-compliance with governmental
regulations or (b) provide AAA upgrades to the Premises or the Project resulting from the
specific and unique use of the Premises (including without limitation, the Shelter) by Lessee or
resulting from any Utility Installations, Trade Fixtures and Alterations, including Lessee Owned
Alterations andlor Utility Installations, or other alternations or improvements to the Premises,
made by Lessee or Lessor, unless such remediation or upgrades are required as part of the
"Work" as set forth in. Section 62 herein below prior to occupancy of the Premises and to the
extent required to permit Lessee's occupation and use of the Premises and then, such costs shall
be included as part of the "Cost of the Work" as set forth in said Section 62 below. Except as
otherwise specifically set forth in this Section 55 below, Lessor shall not be required to make or
incur any capital expenditures or commence or complete any remediation of Hazardous
Substances or any non-compliance with governmental regulations now in effect; provided,
however, the foregoing is not intended to and shall not impose upon Lessee or Lessor any
obligation to romediate any Hazardous Substances located on the Premises as of the date hereof
unless such remediation is required with any work, improvements or Alterations made or being
made by or on behalf of Lessee or Lessor to the Premises prior to occupancy of the Premises to
the extent required to permit Lessee's occupation and use of the Premises and then, such costs
shall be included as part of the "Cost of the Work" as set forth in said Section 62 below,
Furthermore, notwithstanding anything to the contrary set forth in the Lease, it is the intent of
Lessor and Lessee that Lessor shall have no responsibility or obligation whatsoever, for the
maintenance, repair or replacement of all or any portion of the Premises, Building, or Project,
including, without limitation, the roof and the HVAC system, such responsibility and obligations
being that of lessee, Lessee shall property use, operate and safeguard the Premises, including, if
applicable, any landscaping, furniture, furnishing and appliances, and all mechanical, electrical,
boilers, refrigeration equipment, gas and plumbing fixtures, HVAC and other building systems,
and smoke detectors and fire alarms, and keep them and the Premises clean, sanitary and well
ventilated and ail drains free from blockages or stoppages. Lessee shall be responsible to pay for
all utilities, sewer charges and any roof repairs caused by Lessee's use or misuse of the roof or
otherwise. Lessee shall properly insure all of the Premises and all of Lessee's and its guests',
patients' and invitees' personal property. Notwithstanding anything to the contrary set forth in
this Lease, Lessee is solely responsible for any and all upgrades to the existing HVAC system
(including, without limitation repair, replacement or additions) and any current repairs or
replacements of the roof to accommodate and permit Lessee's use of the Premises as a Shelter
and its required occupancy and usage of the Premises, all of which shall be completed prior to
Lessee's opening of the Shelter at the Premises, at Lessee's sole cost and expense and then, such
costs shall be included as part of the "Cost of the Work" as set forth in said Section 62 below;
provided, further, Lessee hereby affirms and agrees that (a) the current HVAC system in the
Premises is acceptable to Lessee in its current condition, (b) the roof is acceptable to Lessee in its
current condition, and (a) the current structural portions of the Premises are acceptable to Lessee
12926447.1
in their current condition Nothing in this Section SS shall be deemed or construed as modifying
or amending Lessee's obligations for the regular and timely maintenance and repair of the
Premises, roof and HVAC system.
56. Neighborhood Conditions. Lessee represents and warrants to Lessor that it is aware of
neighborhood or area conditions, including schools, proximity and adequacy of law enforcement,
crime statistics, proximity of registered felons or offenders, fire protection, other governmental
services, availability adequacy and cost of an speed -wired, wireless Internet connections or other
telecommunications or other technology services and installations, proximity to commercial,
industrial or agricultural activities, existing and proposed transportation, construction and
development that may affect noise, view, or (raffic, airport noise, noise or odor from any source,
wild and domestic animals, other nuisances, hazard or circumstance, cemeteries, facilities and
condition of common areas, conditions and influences of significance to certain cultures and/or
religions, and personal needs, requirements and preferences of Lessee.
57. Condition of Premises. Notwithstanding anything to the contrary in the Lease, Lessor shall
deliver the Premises in its current "as is" condition as of the date hereof, and Lessee shall, and
does hereby, accept delivery of the Premises as of the date hereof ("Delivery Date", "Effective
Date" or "Commencement Date"). Lessee shall provide Lessor a copy of Lessee's certificate(s)
of liability insurance concurrently with the execution hereof; provided, however, the failure to do
so shall not extend the Delivery Date, The Premises are hereby leased to Lessee "as is", without
representation or warranty by the Lessor (except as otherwise expressly provided in this Lease),
and Lessee hereby accepts the Premises in the condition thereof existing as of the date hereof
subject to all applicable zoning, municipal, county, state and federal laws, ordinances, rules,
regulations, orders, restrictions of record and requirements now or hereafter in effect during the
Term (collectively, "Applicable Requirements", "Applicable Laws" orjust "Laws'). Therefore,
notwithstanding anything to the contrary set forth in this Lease, Lessee represents and warrants
that Lessee has inspected the Premises, and that Lessee is familiar with the general and specific
condition(s) of the Premises and that Lessor shall have no responsibility or liability (except as
otherwise expressly provided in this Lease) with respect to the general or any specific condition
of the Premises or any system (Including, without limitation, HVAC, electrical, plumbing,
refrigeration and fire sprinkler) and that Lessee represents and warrants that, except as expressly
set forth herein, Lessee is acting, and will act only, upon information known to, or obtained by,
Lessee directly from Lessee's own knowledge and inspection of the Promises (except as
otherwise expressly provided in this Lease), Except as otherwise expressly provided in this
Lease, Lessor hereby makes no claims, representations or warranties as to the suitability or lack
of suitability of the Promises for any proposed or intended use, or availability or lack of
availability of (a) permits or approvals of governmental or regulatory authorities, or (b)
easements, licenses or other rights with respect to any such proposed or intended use of the
Premises or (c) any condition of the Premises, and the availability or lack of availability shall not
affect the rights or obligations of the Lessee hereunder. Therefore: AS A MATERIAL PART
OF THE CONSIDERATION FOR THIS LEASE AND THE AMOUNT OF RENT TO BE
PAYABLE HEREUNDER, LESSEE AGREES THAT, EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH HEREIN, LESSEE LEASES AND ACCEPTS THE PREMISES ON
AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH HEREIN, NO WARRANTY, REPRESENTATION OR
GUARANTEE OF ANY TYPE (EXPRESSED, IMPLIED OR STATUTORY, WRI'CfEN OR
ORAL) HAS OR IS MADE BY LESSOR WITH RESPECT TO THE PREMISES,
INCLUDING, WITHOUT LIMITATION, AS TO ANY OF THE FOLLOWING: (1) FITNESS
FOR ANY PARTICULAR PURPOSE, (11) MERCHANTABILITY, (111) CONDITION OR
WORKMANSHIP, (IV) ABSENCE OF DEFECTS OR FAULTS, (V) PRESENCE OR
129M47.1
ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES, (VI) OPERATION OR
PERFORMANCE OF THE PREMISES OR SYSTEMS THEREIN OR THE HABITABILITY
OF THE PREMISES, (VII) COMPLIANCE WITH LAWS, ORDINANCES, RULES OR
REGULATIONS (FEDERAL, SATE OR LOCAL) and, INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE'ENVIRONMENT, AS
THEY MAY APPLY TO THE CURRENT CONDITION OF THE PREMISES OR LESSEE'S
INTENDED USE OR (VIII) ANY GOVERNMENT LIMITATION OR RESTRICTION, OR
ABSENCE THEREOF, PERTAINING TO THE PREMISES. LESSEE ACKNOWLEDGES
THAT LESSEE HAS ENTERED INTO THIS LEASE RELYING UPON ITS OWN
INVESTIGATION OF THE PHYSICAL, ENVIRONMENTAL AND COMPLIANCE
CONDITION OF THE PREMISES AND THAT LESSEE IS NOT NOW RELYING, AND
WILL NOT LATER RELY, UPON ANY REPRESENTATIONS AND WARRANTIES MADE
BY LESSOR OR ANYONE ACTING OR CLAIMING TO ACT, BY, THROUGH OR UNDER
OR ON LESSOR'S BEHALF CONCERNING THE PREMISES. Lessee is familiar with the
Premises and their suitability for Lessee's Intended use, All documents which have been given to
Lessee by Lessor have been delivered as an accommodation to Lessee and without any
representation or warranty as to the sufficiency, accuracy, completeness, validity, truthfulness,
enforceability, or assignability of any of the documents, all of which Lessee relies on at its own
risk.
58, Release. Lessee shall rely solely upon Lessee's own knowledge of the Premises based on its
investigation of the Premises end its own inspection of the Premises in determining the Premises'
physical condition. Lessee and anyone claiming by, through or under Lessee hereby waives its
right to recover from and fully and irrevocably releases Lessor and its respective members,
employees, officers, directors, partners, shareholders, beneficiaries, trustees, fiduciaries,
representatives, agents, servants, attorneys, affiliates, parent, subsidiaries, successors and assigns,
and all persons, firms, corporations and organizations acting in their behalf ("Released Parties")
from any and all claims that it may now have or hereafter acquire against any of the Released
Parties for any costs, loss, liability, damage, expenses, demand, action or cause of action arising
from or related to any construction defects, errors, omissions or other conditions, latent or
otherwise, including environmental matters, affecting the Premises or any portion thereof. This
release includes claims of which Lessee is presently unaware or which Lessee does not presently
suspect to exist which, if known by Lessee, would materially affect Lessee's release to Lessor, In
this connection and to the fullest extent permitted by law, Lessee hereby agrees, represents and
warrants that Lessee realizes and acknowledges that factual matters now unknown to it may have
given or may hereafter give rise to causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses which are presently unknown, unanticipated and
unsuspected, and Lessee further agrees, represents and warrants that the waivers and releases
herein have been negotiated and agreed upon in light of that realization and that, as a material
portion of the consideration given to Lessor by Lessee in exchange for Lessor's performance
hereunder, Lessee nevertheless hereby intends to release, discharge and acquit Lessor from any
such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and
expenses which might in any way be included. Lessor has given Lessee material concessions
regarding this transaction in exchange for Lessee agreeing to the provisions of this Paragraph.
The releases set forth above are full and complete releases of all the persons and entities
described above of and from any and all liability of any nature whatsoever for all damage, injury,
loss, expense, including any consequential expense, loss or damage, whether the same are now
known or unknown to the parties, expected or unexpected by said parties, and all rights under
Section 1542 of the California Civil Code are hereby waived and relinquished. Section 1542 of
the Civil Code provides as follows:
12926447.1
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER WOULD HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR
OR RELEASED PARTY."
L see's Initials
Notwithstanding anything to the contrary herein, the foregoing release in this Section 58 is not
intended to and does not cover (i) any claims arising from a breach by Lessor of any Lessor's
obligations under this Lease, or (Ili) any gross negligence, willful misconduct or fraud committed
by Lessor.
$9. Reservations. Lessee agrees to consent to Lessor's (i) grant of such easements, rights and
dedications that Lessor deems necessary, (ii) recordation of parcel maps and restrictions, and
(Ili) creation andtor installation of new utility raceways, only if such easements, rights,
dedications, maps, restrictions, and utility raceways shall not, in Lessee's reasonable discretion,
unreasonably interfere with the use of the Premises by Lessee or otherwise materially negatively
impact Lessee's use or occupation of the Premises; and in such event, Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights so long as such documents do
not impose any cost or liability on Lessee which is non-de-Minimis, Lessor further reserves the
right to change the name by which the Building or the Project (if any) is called with Lessee's
prior written consent which shall not be unreasonably withheld.
60. Assignment and Subletting. Lessee shall have no right to, and shall not, assign, sublet or
otherwise transfer all or any portion of the Premises or its rights under and to this Lease without
the prior written consent of Lessor, which such consent may be given or denied in Lessor's sole
and absolute discretion (and which such consent may be conditioned upon Lessee entering into a
lease guaranty ("Lease Guaranty") in favor of Lessor (upon terms and conditions reasonably
acceptable to Lessor), whereby Lessee guaranties the performance by such assignee. Any
assignment, subletting or transfer without such consent shall be a non -curable Default and Breach
hereunder, without any prior notice need being given. Notwithstanding the foregoing, Lessee
shall have the right to enter into one or more agreements (collectively, with any extension,
renewal, amendment or replacement thereof, the "City Agreements") with an established third
party operator of similar situated homeless navigation centers as the Shelter ('"third Party
Operator), provided, however, that Lessee shall have first provided the name of such proposed
Third Party Operator, and the terms of the City Agreements and provided further, that no such
City Agreement shall modify or amend Lessee's obligations under this Lease.
61, Insurance, Notwithstanding anything to the contrary set forth in the Farm Lease, Lessee shall
carry and maintain, at its sole cost and expense, the following insurance: (1) Commercial General
Liability Insurance (occurrence form) including coverage for death, bodily injury, with coverage
for vandalism and malicious mischief, broad form property damage, contractual liability, owner's
protective, host liquor liability and products/compieted operations with coverage limits as
reasonably required by Lessor from time to time, but in no event less than Five Million Dollars
($5,000,000.00), combined each occurrence and in the aggregate insuring against any and all
liability of the Lessee with respect to the Promises and all areas appurtenant thereto or arising out
12926"7.1
of the maintenance, use or occupancy thereof (Lessee may satisfy any portion of this requirement
with umbrella liability coverage); (ii) Insurance covering any and all improvements, including
Lessee's furniture, fixtures and equipment and any Alterations permitted hereunder, and all
personal property, In an amount not less than their full replacement cost providing protection
against any peril included within the classification "Special Form" including fire, vandalism and
malicious mischief, (III) Automobile liability insurance for all motor vehicles operated by or for
Lessee, including owned, hired and non -owned vehicles, with minimum combined single limit
coverage for bodily injury and property damage as reasonably required by Lessor from time to
time, but in no event less than One Million Dollars ($1,000,000.00) for each occurrence, (iv) full
replacement cost plate glass insurance and business interruption insurance in such amount as will
reimburse Lessee for direct or indirect toss of earnings for up to 12 months attributable to all such
perils insured against herein or any other cause, (v) Workers' Compensation, including
employer's liability insurance, in compliance with all laws governing worker's compensation, if
Lessee falls to maintain such insurance, Lessee shall be deemed to have assumed the risk of all
losses which would have been covered by such insurance and Lessor shall have no liability for
any such losses. All of Lessee's policies of Insurance shall be Issued by insurance companies
with general policyholder's rating of not less than A and a financial rating of not less than Class
A VI as rated in the most current available "Best's" Insurance Reports and qualified to do
business in the State of California. All policies shall name Lessor, its related or affiliated entities,
parents, subsidiaries, partnerships, joint ventures, limited liability companies, members, trusts and
assigns of every tier (as identified by Lessor), and each of their respective directors, officers,
partners, agents, employees, volunteers, members, managers, trustees, shareholders and any
successors or assigns of the foregoing, as well as Lessor's management company and if requested
by Lessor, Lessor's first mortgagee or beneficiary as additional insureds (to the extent Lessor
gives written notice to Lessee of the names and addresses of such parties). Certificates for all
policies shall be delivered to Lessor prior to delivery of possession of the Premises to Lessee, and
thereafter within thirty (30) days prior to the expiration of the term of each such policy. Until
Lessee has delivered to Lessor such certificates of insurance, Lessor shall not be obligated to
deliver keys to the Premises to Lessee, and Lessee shall not be entitled to take occupancy of the
Premises notwithstanding the fact the Term of the Lease and Lessee's obligation to pay rent
hereunder may have already commenced. All policies of insumnee must contain a provision that
Lessor will receive thirty (30) days' advanced written notice orany cancellation, lapse or
reduction in the amounts of insurance. All public liability, property damage and other casualty
policies shall be written as primary policies, not contributing with or in excess of coverage which
Lessor may carry. Ali of Lessee's insurance policies shall contain the following provisions:
severability of interest, cross liability, and contingent liability and builder's risk, with respect to
improvements and alterations required or permitted to be made by Lessee under this Lease. The
limits of said insurance shall not, however, limit the liability of Lessee hereunder. If Lessee fails
to maintain or procure such insurance, Lessor shall have the right, but not the obligation, to
procure and maintain the same, at Lessee's sole cost and expense. Lessee and Lessor each hereby
waive any and all rights of recovery against the other, or against the officers, employees, agents
and representatives of the other, for loss of or damage to such waiving party or its property or the
property of others under its control to the extent that such loss or damage is insured against under
any insurance policy required to be carried under this Lease. Each patty shall, upon obtaining the
policies of insurance required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease, and shall obtain any special
endorsements required at the insuring parry's cost, if any. The parties agree in the event of any
damage to Lessee, the Premises, Lessee's property, andlor any loss to Lessee's employees or
invitees each shall resort to insurance coverage prior to asserting any claim or demand against the
other or its assets. Nothing in this Section shall be deemed to constitute a waiver by the
W26447.1
respective insurance carriers of either Lessee or Lessor of any other remedies available to said
carriers
62. Initial Improvements and Work, Lessor, through the "General Contractor" (as defined below),
shall construct, furnish and install within the Premises, including outside yard area, those items of
construction (the "Work") shown on the "Plans" (as defined below). It is the intent and
agreement of the parties that the Work is comprised of all work (including all hard and soft costs
associated with the design and construction of improvements for the Premises, but excluding any
costs for furniture, fixtures, Trade Fixtures and other such similar personal property used in
connection with the operation of the Shelter) to enable Lessee to furnish and install the Shelter
and comprehensive supportive services, which such facility shall contain sleeping areas,
restrooms, showers, laundry rooms, kitchen and storage areas, common areas, and offices, and all
other ancillary improvements in connection therewith to enable Lessee to operate the Shelter.
The architectural, structural, grading, mechanical, electrical, plumbing, sewer and firellife safety
standards that shall be applicable to the construction required to complete the Work, shall be
subject to Lessor's rules and regulations applicable to the performance of the Work (collectively,
the "Work Standards'), Lessor hereby appoints Jeremy Ogulnick as Lessor's representative
("Lessor's Representative') to act for Lessor in all matters in connection with the Work. Lessee
hereby appoints as Lessee's representative(s) ("Lessee's Representative(,)') to act
for Lessee in all matters in connection with the Work and Lessee shall be responsible for all costs
authorized by Lessee's Representative(s). All inquiries, requests, instructions, authorizations and
other communications with respect to the Work shall be made to Lessor's Representative or
Lessee's Representative(s), as the case may be. Authorizations made by Lessee's
Representative(s) shall be binding on Lessee. Authorizations made by Lessor's Representative
shall be binding on Lessor. Either party may change its representatives under this Section 62 at
any time by written notice to the other party, but any such change shall be effective only upon
receipt by the other parry. Notwithstanding the foregoing, in no event shall any direction by
Lessor's Representative or Lessee's Representative(s) constitute a change in the terms or
conditions of the Lease, unless the Lease is expressly modified In a writing executed by both
Lessor and Lessee. All work shall be done pursuant to those architectural, electrical, mechanical,
plumbing, life safety and structural drawings and specifications (including all finishes) for the
Work, which shall be approved by Lessor and Lessee (collectively, the "Plans'), Lessee may not
make any material changes, modifications or alterations in the Plans (collectively, "Lessee
Changes') at any time without Lessor's prior written approval thereof which shall not be
unreasonably withheld, conditioned or delayed and the cost of any such Lessee Changes shall be
added to the Cost of the Work and shall not be included in the "Contingency Amount" (as defined
below) and in the event of any such approved Lessee Changes, the Cost Estimate shall be
increased by the amount of such lessee Changes. Lessor may from time to time during the
prosecution of the Work require reasonable modifications or amendments to the Plans due to
unforeseeable conditions or to the extent changes are required to comply with applicable Laws
("Lessor Changes') and the cost of any such Lessor Changes shall be included in the
"Contingency Amount" (as defined below), unless it is considered a "Change Order" (as defined
below) approved by Lessee, Lessor acknowledges and agrees that Lessor shall be solely
responsible for causing the Work to be constructed and maintained, in accordance with all
applicable Laws, including, without limitation, the provisions of the American with Disabilities
Act, 42 U.S,C, Section 12101 et seq. and any governmental regulations with respect thereto (the
"ADA") and other similar Laws. Additionally, to the extent applicable to the Work, Lessor shall
be responsible for complying with all pertinent prevailing wage laws pursuant to California Labor
Code sections 1720, et seq, Lessee shall pay the entire "Cost of the Work". As used herein, the
term "Cost of the Work" means all costs and expenses in connection with the design, furnishing,
construction and installation of the Work, including without limitation; (a) all architectural,
12926447.1
engineering and consultant fees associated with the preparation of the Plans; (b) governmental
agency plan review, permit, license and other fees (including, without limitation, any charges
required by any governmental entity or authority having jurisdiction over the Premises); (c) sales
and use taxes; (d) insurance costs and expenses; (e) testing and Inspecting costs; (f) costs and
expenses of material and labor, including without limitation, General Contractor's profit and
general overhead; (g) costs and expenses associated with the compliance with applicable Laws;
(h) costs and expenses of alterations of the Premises and all life safety systems necessitated by
any applicable Law; (1) costs and expenses associated with any modification or addition to the
Premises or any street or public right of way; 0) all costs and expenses of construction work
required to complete the Work; (k) costs and expenses of Lessee signage, if any; (1) costs and
expenses associated with the placement of any new, additional or supplemental mechanical,
electrical, plumbing or life safety systems on the Premises, including, without limitation, costs
associated with any repair or replacement of any WVAC units or systems, and running piping and
conduit to such systems (the location for such piping and conduit shalt be selected by Lessor);
(m) costs and expenses associated with any Lessee Changes or Lessor Changes; and (a) any out-
of-pocket costs and expenses incurred by Lessor or Lessor's consultants associated with the
review of the Plans, Lessor proposed that the entire Cost of Work would be $8, 500,000 for the
completion of the Work ("Cost Estimate'). Any changes to the scope of Work that would
increase the "Cost Estimate" must be approved in writing by Lessee prior to commencement of
such extra Work ("Change Order') provided, however, that Lessor and Lessee also agree to a
10% contingency amount equal to $850,000 ("Contingency Amount'), which such Contingency
Amount may be incurred in connection with any Lessor Change, and is to be paid and reimbursed
to Lessor by Lessee, without such prior written approval of Lessee. Concurrently upon the
execution of this Lease, Lessee shall deposit with Lessor, the sum of $850,000, which such
amount shall be a "retainer" against fees and costs incurred by Lessor in connection with Lessor's
completion of the Work. All Work shall be completed by a general contractor chosen by Lessor
but approved by Lessee, which approval shall not be unreasonably withheld, conditioned or
delayed (the "General Contractor"). Lessor shall be required to obtain the required permits for
the Work, with any costs and expenses included within the Cost Estimate. Lessee hereby
approves Benticy Construction as the General Contractor. Lessee must arrange with an insurance
company to provide the coverage required under the Lease, the cost of which is not included in
the Cost Estimate. Prior to the start of Work, Lessor must receive the certificates of insurance
required under the Lease. Such certificate of insurance shall name Lessor as additional insured,
Lessor shall cause the General Contractor to perform all Work in a good and workmanlike
manner and in accordance with good industry practice, applicable Laws and the Lessor's Work
Standards, and in material compliance with the Plans. Lessor shall deliver to Lessee a request for
payment from the General Contractor, approved by Lessor, showing the schedule, by trade, of
percentage of completion of the Work and the cost of labor rendered and materials delivered to
the Premises for which such payment is being requested, which such request for payment may be
wbmitted weekly and on or before the seventh (7th) Business Day after receipt of such request
for payment, Lessee shall deliver a check to Lessor made payable to either Lessor or General
Contractor, the amounts so requested by Lessor. During the construction of the Work, Lessor's
Representative and Lessee's Representative shall meet as often as deemed reasonably necessary
by Lessor and/or Lessee to discuss construction progress. For purposes hereof, "Substantial
Completion" (and any correlative variations thereof) of the Work shall mean completion of
construction of the Work in material compliance with the Plans, with the exception of any Punch
List Items. For the purposes hereof, the term "Punch List Items" shall mean minor details of
construction or decoration or mechanical adjustments that can reasonably be completed after the
date Lessee commences its operations within the Premises without causing substantial
interference with Lessee's operations at the Premises. Lessor shall use its good faith efforts to
129264471
correct (or cause General Contractor to correct) all Punch List Items within thirty (30) days after
Substantial Completion of the Lessee Work.
63. Operations/Use. Notwithstanding anything to the contrary set forth in the Form Lease, Lessee
agrees that at all times, the Premises (and the navigation center ("Shelter")) shall be operated (a)
In complete compliance with the attached Exhibit B, (b) In a first class manner, consistent with
the highest quality standards of care, cleanliness and safety for employees, guests, patients,
invitees and neighbors, and with proper levels of experienced management and staffing, to enable
the provision of appropriate programs and assistance for homeless individuals in the City, and (c)
In full compliance with all applicable local, state and federal laws, rules and regulations.
Furthermore, Lessee covenants and agrees that it (and any Third Party Operator) shall not
discriminate against any person or group of persons on account of race, disability, color, creed,
religion, sex, marital status, sexual orientation, national origin, or ancestry, in the use, occupancy,
tenure, or enjoyment of the Shelter. Lessee (and any Third Party Operator) shall refrain from
restricting the use of the Shelter on the basis of the race, age, disability, color, religion, creed,
gender, sex, marital status, sexual orientation, ancestry, or national origin of any person, nor shall
Lessee, any Third Party Operator or any person claiming under or through Lessee or any Third
Party Operator, establish or permit any such practice or practices of discrimination with reference
to the selection, location, number, use, or occupancy of the Shelter. Lessee and any Third Party
Operator shall comply with the Occupational Safety and Health Act of 1970, 29 U,S.C, section
651 at seq., and the Americans with Disabilities Act of 1990, 42 U.S.C, section 12101 at seq„ and
any analogous legislation in California (collectively, `the Acts"), to the extent that the Acts apply
to the Shelter and any activities thereon. Without limiting the generality of the foregoing, Lessee
covenants to maintain all non-structural portions of the Shelter including working areas, all
machinery, electrical facilities and the like upon the site in a condition that fully complies with
the requirements of the Acts.
64. Indemnity. Lessee shall indemnify, protect, defend (with counsel satisfactory to Lessor) and hold
harmless Lessor and the Released Parties, from and against any and all claims arising out of,
involving, or in connection with, the use and/or occupancy of the Premises by Lessee, any Third
Party Operator or any Lessee's or any Third Party Operator's employees, customers, patients,
guests, invitees, directors, trustees, fiduciaries, representatives, agents, servants, subsidiaries,
successors and assigns, and all persons, firms, corporations and organizations acting in their
behalf of the Lessee and any Third Party Operator (collectively, "Lessee Parties") or any act,
omission or negligence of any Lessee and/or any of the Lessee Parties or any Default and/or
Breach by Lessee of any covenants, terms and/or conditions set forth in this Lease, either prior to,
during, or after the expiration of the Term and including any claims brought or arising out of any
civil tort or criminal activity; provided however, that the foregoing indemnification shall not
apply to the extent arising out of the gross negligence or willful misconduct of Lessor or the
Released Parties. If any action or proceeding is brought against Lessor by reason of any of the
foregoing matters, Lessee shall upon notice defend the same at Lessee's sole cost and expense by
counsel reasonably satisfactory to Lessor and Lessor shall reasonably cooperate with Lessee in
such defense. If Lessor In its sole discretion shall determine that it is in Lessor's interest to have
separate legal counsel, Lessee shall indemnify Lessor for any legal fees and costs incurred by
Lessor for the defense of any such claims. Lessor need not have first paid any such claims in
order to be defended or indemnified hereunder,
Lessor shall indemnify, protect, defend (with counsel satisfactory to Lessee) and hold harmless
Lessee and the Lessee Parties, from and against any and all claims arising out of, involving, of in
connection with, the gross negligence or willful misconduct of Lessor relating to the Premises
either prior to, during, or after the expiration of the Term and Including any claims brought or
12926447.1
arising out of any civil tort or criminal activity; provided however, that the foregoing
indemnification shall not apply to the extent arising out of the gross negligence or willful
misconduct of Lessee or the Lessee Parties. If any action or proceeding is brought against Lessee
by reason of any of the foregoing matters, Lessor shall upon notice defend the same at Lessor's
sole cost and expense by counsel reasonably satisfactory to Lessee and Lessee shall reasonably
cooperate with Lessor in such defense. If Lessee in its sole discretion shall determine that it is in
Lessee's interest to have separate legal counsel, Lessor shall indemnify Lessee for any legal fees
and costs incurred by Lessee for the defense of any such claims, Lessee need not have first paid
any such claims in order to be defended or indemnified hereunder.
65, Notices. Notwithstanding anything to the contrary in the Form Lease, all notices, requests, or
demands herein provided to be given or made, or which may be given or made by either party to
the other, shall be given or made only in writing and shall be deemed to have been duly given: (i)
upon delivery, or if delivery is rejected when delivery was attempted, of U.S. Certified Mail,
properly addressed, postage prepaid with return receipt requested; or (it) upon delivery, or if
delivery is rejected when delivery was attempted, when sent via overnight or express mail
courier, properly addressed and postage prepaid; (fit) when delivered personally at the address
listed below their respective signatures (signature required), or (iv) by e-mail, and if so sent, (a)
the subject line of the e-mail shall state "URGENT: NOTICE TO [LESSEE] [LESSOR]" (or
substantially similar thereto) and (b) followed within one (1) business day by a copy sent by a
method prescribed in (i), (it) or (iv) above; provided however, that nil deliveries or attempted
deliveries shall only be made or attempted to be made on a Business Day. Notwithstanding the
prescribed methods of delivery set forth above, actual receipt of written notice by a parry
designated below shall constitute notice given in accordance with the Agreement on the date
received, unless deemed earlier given pursuant to the foregoing methods of delivery. The proper
address to which notices, requests or demands may be given or made by either party shall be the
address set forth for such party as set forth in the Form Lease, or to such other address or to such
other person as any party shall designate in writing, such address may be changed by written
notice given to the other parry in accordance with this Paragraph.
66. ADA Upg ar des. Except with respect to the Work as set forth in Section 62 above, Lessor shall
not be required to provide ADA upgrades to the Premises.
67, intentionally Omitted.
69. Inspections. Notwithstanding anything to the contrary set forth in the Form Lease, upon
reasonable notice to Lessee, Lessor shall have the right to inspect the Premises, or cause the
Premises to be inspected by a third party chosen by Lessor, to verify that Promises are at all times
being operated in full compliance with the terms of Paragraph 61 of this Addendum and as
otherwise required by this Lease. In the event that any such inspection reveals any such non•
compliance, the same shall be, at the option of Lessor, a Default and or Breach by Lessee under
the Lease. As additional consideration for Lessor's entering into this Lease. Lessee shall
reimburse and pay to Lessor, in addition to Base Rent and other Rent due hereunder, the cost of
any such inspection, up to $500 per inspection but no more than once each calendar month, to
help offset the cost of such inspections, such amounts to be paid by Lessee to Lessor within 5
days after Lessee's receipt from Lessor of a copy of the applicable inspection report and invoice
therefor, and all such amounts being deemed Rent under this Lease.
69. Option to Purchase. Lessor hereby grants to Lessee an option (the "Purchase Option") during the
Purchase Option Period (as defined herein below) to purchase the Premises upon the following
terms;
10
12926447.1
69.1. Purchase Price. The Purchase Price for the Premises shall be equal to the sum of
$9,200,000 (the "Initial Price") plus the Increase Amount (as defined below) (said Initial
Price plus the Increase Amount, if any, being the "Purchase Price"), payable in cash at
Closing (as defined below); provided, however, that the Initial Price is based in part upon
Lessor's original purchase price of the Premises and in the event that Lessor receives any
monies back in respect thereof from its seller as set forth in its original purchase
agreement, the Initial Price shall be reduced by said amount so received. The "Increase
Amount" shall be the amount equal to 50% of the increase in the Consumer Price Index
for all Urban Consumers for the Los Angeles -Anaheim -Riverside area, all items
published by the United States Department of Labor, Bureau of Labor Statistics (1982-
84-100) ("Index") from May 2020 ("Base Index") to the date of the Notice of Exercise
(as defined below); such increase to be calculated by taking the Initial Price and
multiplying it by a fraction, the numerator being the Base Index, and the denominator
being the Index published for the month in which the Notice of Exercise is delivered, if
the Index is changed so the Index differs &am that used as of the date hereof, the Index
shall be converted under the conversion factor published by the United States Department
of Labor, Bureau of Labor Statistics, if the Index Is discontinued or revised during the
Lease Term, such other governmental Index or computation with which it is replaced
shall be used to obtain substantially the same results as would be obtained if the Index
had not been discontinued or revised. Notwithstanding the foregoing, the Increase
Amount shall not increase the Initial Price by an amount equal to mono than 1.501* per
year (non -compounding). Additionally, in the event Lessor receives funds for the
Regulatory Safety Permit, the Purchase Price shall be reduced by $1,000,000 or the
amount of such funds that are received by Lessor, provided, however, that any interest
collected by Lessor in connection with such Regulatory Safety Permit amount shall not
be included in the reduction of such Purchase Price.
69.2. Term or Purchase Option. The term of the Purchase Option shall commence upon the I °
day of the 131h month of the Term of the Lease (the "Purchase Option Commencement
Date") and shall expire on the earlier of (a) the five (5) year anniversary of the
Commencement Date and (b) the expiration or termination of this Lease for any reason
whatsoever (the "Purchase Option Termination Date"), The period between the Purchase
Option Commencement Date and the Purchase Option Termination Date shall be referred
to herein as the "Purchase Option Period" In the event Lessee fails to timely exercise the
Purchase Option within the Purchase Option Period, the Purchase Option, and all rights
of Lessee, shall immediately and automatically cease and terminate, and the Purchase
Option shall in that event be null and void and be of no further force or effect whatsoever.
Lessee may exercise the Purchase Option only in the manner provided in Section 69.4
below.
69.3. InvesU ati�ons. During the Purchase Option Period, Lessee shall be permitted to
investigate the Premises and undertake all actions that it deems necessary ordesirable to
ascertain the condition of the Premises which includes, but is not limited to, the
environmental condition of the Premises, status of title to the Premises, and the condition
of the improvements on the Premises. Accordingly, during the Purchase Option Period,
Lessee shall have, in addition to its rights as the tenant of the Premises hereunder, and Is
hereby granted, the right to make and conduct such non-invasive surveys, studies, tests,
investigations, and inspections (environmental and otherwise) as Lessee deems
reasonably necessary or convenient; provided that Lessee may make such invasive
surveys, studies, tests, investigations or inspections as it deems reasonably necessary or
convenient only upon the prior written consent of Lessor which shall not be unreasonably
026447,1
withheld, All such surveys, studies, tests, investigations and inspections shall be
performed at the sole cost and expense of Lessee and Lessee shall Indemnify, defend and
hold Lessor harmless from and against any and all cost, expense, liability arising from or
in connection with any such surveys, studies, tests, investigation and inspections.
69.4. Exercise of purchase Option. To exercise the Purchase Option, Lessee shall serve written
notice of exercise upon Lessor or Lessor's legal representatives at any time after the
Purchase Option Commencement Date but prior to the Purchase Option Termination
Date ("Notice of Exercise"), which such Notice of Exercise shall be accompanied by a
cash or cash equivalent in the amount of One Hundred Thousand Dollars (S 100,000.00)
("Deposit"). The Deposit shall be invested by Escrow Holder (as defined below) in a
federally Insured interest•bearing account with any interest accruing thereon to be paid or
credited to Lessee. At the Close of Purchase Option Escrow, the Deposit and any
accrued interest thereon shall be applied and credited toward payment of the Purchase
Price. The Notice of Exercise shall provide at least 90-120 days for Lessor to locate an
exchange property prior to the Closing of the Purchase Option Escrow.
69.5. Escrow. If Lessee timely exercises the Purchase Option by the timely delivery of the
Notice of Exercise and the Deposit, Lessor and Lessee shall immediately open an escrow
("Option Escrow") with Chicago Title Company ("Escrow Holder", the specific escrow
officer being chosen by Lessor, or Lessor may choose such other escrow or title company
in its reasonable discretion upon written notice to Lessee, which such escrow or title
company shall be subject to Lessee's approval, which will not be unreasonably withheld,
conditioned or delayed), whereupon the Deposit shall be delivered to Escrow Holder.
This Agreement shall constitute joint escrow Instructions to Escrow Holder with respect
to the purchase and sale of the Premises. The parties shall execute such additional
escrow instructions which are not inconsistent with the provisions of this Agreement and
which may be required by Escrow Holder in order to close such escrow,
69.6. Payment, The Purchase Price shall be paid in cash upon the Close of Purchase Option
Escrow (as defined below).
69,7. Closing. The close of the Purchase Option Escrow for the purchase and sale of the
Premises shall occur on or before the date which is thirty (30) days ("Scheduled Closing
Date") after the date of delivery of the Notice of Exercise by Lessee to Lessor (the "Close
of Purchase Option Escrow" or "Closing"). For purposes hereof, the Close of Purchase
Option Escrow (and Closing) shall be the date on which the Grant Deed conveying the
Premises to Lessee is recorded.
a) If, following Lessee's timely and proper exercise of the Purchase Option, the
Closing fails to occur as a result of Lessor's breach or default and if Lessor
should remain in default in any material respect in the performance of any of
Lessor's obligations under the Lease with respect to the sale of the Premises after
the fifth (5th) Business Day following the delivery by Lessee to Lessor of written
notice of such default, Lessee shall be entitled, as its sole and exclusive remedy
for any such default, to elect any one of the following remedies (so long as title
to the Premises has not been further encumbered involuntarily or by or with the
consent of Lessor, and Lessor elects not to remove such encumbrance on or prior
to Closing): (i) terminate its Purchase Option and receive the return of the
Deposit, and, thereafter, the parties shall have no further rights or obligations
hereunder except that if applicable, the Lease shall continue thereafter in full
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12926447.1
force and effect, or for obligations which expressly survive the termination of the
Purchase Option; or (ii) bring and pursue an action for specific performance of
the Purchase Option; or (III) waive the default and proceed to close the
transaction contemplated herein. As a condition precedent to Lessee exercising
any right it may have to bring an action for specific performance hereunder,
Lessee must commence such an action within thirty (30) days after the
occurrence of Lessor's default. Lessee agrees that its failure to timely commence
such an action for specific performance within such thirty (30) day period shall
be deemed a waiver by it of its right to commence an action for specific
performance as well as a waiver by it of any right it may have to file or record a
notice of lis pendens or notice of pendency of action or similar notice against the
Premises.
b) If, following Lessee's timely and proper exercise of the Purchase Option, the
Closing fails to occur as a result of Lessee's breach or default, and if Lessee
should remain in default in any material respect in the performance of any of
Lessee's obligations with respect to the purchase of die Premises after the fifth
(5th) Business Day following the delivery by Lessor to Lessee of written notice
of such default, THEN AND IN SUCH EVENT, NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY, LESSEE AND LESSOR
AGREE THAT LESSOR WILL INCUR DAMAGES BY REASON OF SUCH
DEFAULT BY LESSEE, WHICH DAMAGES SHALL BE IMPRACTICAL
AND EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE, TO ASCERTAIN.
LESSEE AND LESSOR, IN A REASONABLE EFFORT TO ASCERTAIN
WHAT LESSOR'S DAMAGES WOULD BE IN THE EVENT OF SUCH
DEFAULT BY LESSEE HAVE AGREED BY PLACING THEIR INITIALS
BELOW THAT THE AMOUNT OF THE DEPOSIT SHALL BE DEEMED TO
CONSTITUTE A REASONABLE ESTIMATE OF LESSOR'S DAMAGES
UNDER THE PROVISIONS OF SECTION 1671 OF THE CALIFORNIA
CIVIL CODE AND THE PAYMENT AND RETENTION OF SUCH AMOUNT
AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR
PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE
SECTIONS 3275 OR 3369. IN THE EVENT OF AND FOR SUCH DEFAULT
BY LESSEE; LESSOR SHALL RETAIN THE DEPOSIT AS LIQUIDATED
DAMAGES AS LESSOR'S SOLE REMEDY THEREFOR, UNLESS LESSEE
WRONGFULLY REFUSES TO CAUSE ESCROW HOLDER TO CANCEL
THE ESCROW OR TO RELEASE THE DEPOSIT TO LESSOR, IN WHICH
INSTANCE LESSOR SHALL ALSO BE ENTITLED TO ALL COSTS AND
EXPENSES, INCLUDING ACTUAL ATTORNEYS' FEES INCURRED BY
LESSOR WITH RESPECT TO THOSE CONSEQUENTIAL DAMAGES, IF
ANY, WHICH MAY BE INCURRED BY LESSOR, AFTER THE CLOSING
DATE OR OTHER TERMINATION OF THIS AGREEMENT OR
CANCELATION OF THE TRANSACTIONS HEREIN CONTEMPLATED BY
REASON OF THE CLOUD ON TITLE TO THE PROPERTY WHICH MAY
RESULT FROM LESSEE'S WRONGFUL FAILURE TO CANCEL THE
ESCROW AND THIS AGREEMENT. ESCROW HOLDER IS HEREBY
INSTRUCTED TO IMMEDIATELY RELEASE THE DEPOSIT TO LESSOR
IN THE EVENT OF A BREACH BY LESSEE HEREUNDER, IN ADDITION,
IF LESSEE WRONGFULLY FAILS TO CAUSE SUCH SUM TO BE
DELIVERED TO LESSOR AS HERETOFORE PROVIDED, INTEREST
SHALL ACCRUE THEREON AT THE MAXIMUM RATE ALLOWED BY
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12926447.1
LAW FROM THE DATE OF LESSOR'S WRITTEN NOTICE OF DEFAULT
AND TERMINATION UNTIL PAYMENT THEREOF. IN ADDITION,
LESSEE SHALL PAY ALL TITLE AND ESCROW CANCELLATION
CHARGES. FURTHERMORE AND NOT WITHSTANDING THE
FOREGOING, THIS PARAGRAPH PERTAINS ONLY TO A DEFAULT BY
LESSEE WITH RESPECT TO THE PURCHASE OPTION AND SHALL NOT
RESTRICT, LIMIT, MODIFY, ALTER OR AMEND, IN ANY MANNER
WHATSOEVER, ANY RIGHT OR REMEDY OF LESSOR IN THE EVENT
OF A D T BY LESSEE UNDE T E LEASE,
O;r7
Lo nitials I Lessor's Initial$
(c) Except as otherwise set forth herein, either party shall not be liable for
consequential or speculative damages in connection with such party's breach or
default hereunder.
(d) Additionally, and notwithstanding the foregoing, if following Lessee's
timely and proper exercise of its Purchase Option, the Premises suffer a material
casualty (which, for purposes hereof shall mean damage with a cost to repair in
excess of$100,000 not caused by Lessee or any employee, resident, guest or
invitee of Lessee), then Lessee shall have the right to either (i) proceed with the
Close of Escrow (in which case, if there were such a material casualty Lessee
shall be entitled to receive all available insurance proceeds and receive a
reduction of the Purchase Price in an amount equal to the deductible amount and
any required co-insurance payment with respect to the insurance, and there shall
be no other reduction in the Purchase Price), or (ii) rescind the Notice of
Exercise, in which case the Deposit shall be returned to Lessee, the Lease shall
continue in full farce and effect (Including Lessee's right to later re -exercise the
Purchase Option), and Lessee shall not be liable for any costs incurred by Lessor
with respect to the failed Closing; provided, however that each of Lessee and
Lessor shall pay one-half of the Escrow Holder's costs and fees in connection
with the Option Escrow and its cancellation.
(e) Additionally, and notwithstanding the foregoing, if the Closing is unable
to occur for a reason other than a breach or default by Lessee or Lessor, then
Lessee shall have the right to rescind the Notice of Exercise, in which case the
Deposit shall be returned to Lessee, the Lease shall continue in full force and
effect (including Lessee's right to later re -exercise the Purchase Option), and
Lessee shall not be liable for any costs Incurred by Lessor with respect to the
failed Closing; provided, however that each of Lessee and Lessor shall pay one-
half of the Escrow Holder's costs and fees in connection with the Option Escrow
and its cancellation.
69.8. C ng dition of Property. Lessee represents and warrants that Lessee has, or shall have
inspected and conducted tests and studies of the Premises, and that Lessee is familiar
with the general condition of the Premises. Lessee understands and acknowledges that
the Promises may be subject to earthquake, fire, Floods, erosion, high water table,
dangerous underground soil conditions, hazardous materials and similar occurrences that
may alter its condition or affect its suitability for any proposed use. Except as otherwise
14
12926447.1
expressly provided in the Lease, Lessor shall have no responsibility or liability with
respect to any such occurrence. Lessee represents and warrants that, except for Lessor's
express representations and warranties herein, Lessee is acting, and will act only, upon
information obtained by Lessee directly from Losseo's own inspection of the Premises,
Lessor hereby makes no claims, representations or warranties as to the suitability or lack
of suitability of the Premises for any proposed or intended use, or availability or lack of
availability of (a) permits or approvals of governmental or regulatory authorities, or (b)
easements, licenses or other rights with respect to any such proposed or intended use of
the Promises shall not affect the rights or obligations of the Lessee hereunder.
69.9. "As Is". Lessee expressly agrees that If it completes the purchase of the Premises (i) that
it is purchasing the Premises on an "As Is" basis and based on its own investigation of the
Premises, (ii) that, except as expressly set forth herein, neither Lessor nor Lessor's
employees, agents, brokers, representatives, managers, property managers, asset
managers, officers, principals, beneficiaries, trustees, attorneys or contractors
(collectively, "Lessor's Representatives") have made any warranty, representation or
guarantee, expressed, implied or statutory, written or oral, including, without limitation,
any implied warranty of merchantability or fitness for any use or purpose or of
reasonably workmanship, concerning the Premises or any of the products or
improvements located thereon or therein; (III) that, except as otherwise expressly set forth
herein, neither Lessor nor Lessor's Representatives have made any warranty,
representation, or guarantee, expressed, implied or statutory, written or oral, pertaining to
the Premises' compliance with any laws, ordinances, rules or regulations, federal, state or
local and (iv) except as otherwise expressly set forth herein, that neither Lessor nor
Lessor's Representatives have made any warranty, representation or guarantee,
expressed, implied or statutory, written or oral, as to any government limitation or
restriction, or absence thereof, pertaining to the Premises, or as to the presence or absence
of any latent defect, subsurface soil condition, environmental condition, hazardous
substance, toxic waste or any other matter pertaining to the physical condition (title,
mapping, grading, construction, or otherwise) of the Premises. Lessee is or ns of the
Close of Purchase Option Escrow will be familiar with the Premises and their suitability
for Lessee's Intended use. All documents which have been given to Lessee by Lessor, or
Lessor's Representatives, have been delivered as an accommodation to Lessee and
without any representation or warranty as to the sufficiency, accuracy, completeness,
validity, truthfulness, enforceability, or assignability of any of the documents, all of
which Lessee relies on at its own risk. Lessee acknowledges and agrees that, except as
otherwise expressly set forth herein, Lessee's only recourse for any defect in title shall be
against the title company and not Lessor.
69.10, Release. Lessee shall rely solely upon Lessee's own knowledge of the Premises based on
its investigation of the Premises and its own inspection of the Premises In determining the
Premises' physical condition. Effective upon the Close of Escrow, Lessee and anyone
claiming by, through or under Lessee hereby waives its right to recover from and fully
and irrevocably releases Lessor and Its respective members, employees, officers,
directors, partners, shareholders, beneficiaries, trustees, Fiduciaries, representatives,
agents, servants, attorneys, affiliates, parent, subsidiaries, successors and assigns, and all
persons, firms, corporations and organizations acting in their behalf ("Released Parties")
from any and all claims that it may now have or hereafter acquire against any of the
Released Parties for any costs, loss, liability, damage, expenses, demand, action or cause
of action arising from or related to any construction defects, errors, omissions or other
conditions, latent or otherwise, including environmental matters, affecting the Promises
t5
12926447.1
or any portion thereof This release includes claims of which Lessee is presently unaware
or which Lessee does not presently suspect to exist which, if known by Lessee, would
materially affect Lessee's release to Lessor. In this connection and to the fullest extent
permitted by law, Lessee hereby agrees, represents and warrants that Lessee realizes and
acknowledges that factual matters now unknown to it may have given or may hereafter
give rise to causes of action, claims, demands, debts, controversies, damages, costs,
losses and expenses which are presently unknown, unanticipated and unsuspected, and
Lessee further agrees, represents and warrants that the waivers and releases herein have
been negotiated and agreed upon in light of that realization and that, as a material portion
of the consideration given to Lessor by Lessee in exchange for Lessor's performance
hereunder, Lessee nevertheless hereby intends to release, discharge and acquit Lessor
from any such unknown causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses which might in any way be included. Lessor hug
given Lessee material concessions regarding this transaction in exchange for Lessee
agreeing to the provisions of this Section.
69.11. Additional Release. The releases set forth in Section 69.10 above and this Section 69.11
are full and complete releases of all the persons and entities described above of and from
any and all liability of any nature whatsoever for all damage, injury, loss, expense,
including any consequential expense, loss or damage, whether the same are now known
or unknown to the parties, expected or unexpected by said parties, and all rights under
Section 1542 of the California Civil Code are hereby waived and relinquished. Section
1542 of the Civil Code provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE
AND THAT, IF KNOWN BY HIM OR HER WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBT L ED PARTY."
sse ntals
Notwithstanding anything to the contrary herein, the foregoing releases in Section
69.10 and this Section 69.11 are not intended to and do not cover (i) any claims
arising from a breach by Lessor of any Lessor's obligations under this Lease, or
(iii) any gross negligence, willful misconduct or fraud cornmitted by Lessor.
69.12. Permissible Title Exceptions. Upon the Close of Purchase Option Escrow, Lessor shall
convey the Premises to Lessee by a grant deed (the "Grant Deed"), The Grant Deed shall
be subject only to the following (collectively, the "Permitted Exceptions"):
a) Current Matters of Record. Those matters of record identified on the attached
Exhibit A.
b) Lease, This Leese.
c) Future Non -Monetary Exceptions. All monetary and non -monetary
encumbrances placed against the Premises or which may appear of record after
the date hereof as the result of any action or inaction of Lessee (including any
16
i29s6a4M
monetary encumbrances appearing of record as a result of any action or inaction
by Lessee during the Purchase Option Term).
d) Taxes. Non -delinquent general, special and supplemental real property taxes and
assessments; provided however, all delinquent taxes and assessments relating to
the period following the Commencement Date of the Lease are the responsibility
of Lessee pursuant to this Lease and shall be paid by Lessee at Closing.
e) Printed Exceptions. Matters shown as printed exceptions in the standard form of
Owner's Policy of Title Insurance.
Title Insurance. Lessor shall cause to be delivered to Lessee upon the Close of Purchase
Option Escrow, an ALTA standard coverage owner's policy of title insurance on the
Premises issued by Escrow Holder with policy limits equal to the Purchase Price and
insuring title to the Premises in the condition set forth above and otherwise vested in
Lessee. Lessee shall have the right to request issuance of an ALTA extended coverage
owner's policy of title insurance and any endorsements it may require, but the Closing
shall not be delayed or conditioned on the issuance of same. Lessee shall obtain, at its
sole cost and expense, any survey required to obtain any such extended coverage Title
insurance, and the obtaining or failure to obtain any such survey shall not delay the
Closing.
69.13, Additional Closing Documents As part of the Closing, the parties shall execute and
deliver the following additional documents to the Escrow Holder:
a) Lessor and Lessee shall execute and deliver an Assignment and Assumption of
Lease;
b) Lessor shall execute and deliver a Bill of Sale and General Assignment;
c) Lessor shall execute and deliver a Transferor's Certification of Non -Foreign
Status, together with a California Form 593-C, reflecting that no tax withholding
is required; and
d) Lessor and Lessee shall deliver such additional, customary escrow closing
documents and instruments as Escrow Holder shall reasonably require, including
appropriate evidence of authority and a customary owner's affidavit.
The Grant Deed and those documents specified in Paragraphs 69.9 (a), (b) and (c) shall
be prepared by Lessor and delivered to Lessee for review and approval not later than ten
(10) days prior to the Scheduled Closing Date. The exact form and content of such
documents shall be subject to good faith negotiation by lessor and Lessee and the failure
of Lessor and Lessee to agree upon the form of such documents not later than 2 Business
Days prior to the Scheduled Closing Date shall constitute the failure of a.condition of
closing, and either parry shall then have the right to terminate the Purchase Option and
the sale of the Premises.
69.14. Prorations and Credits. Pursuant to the terms of the Lease, all real property taxes and
assessments and utilities are to be paid by Lessee and as such no prorations for the same
are to be made.
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12926447.1
69.15. Closing Costs. Lessor shall pay for (a) all premiums for the ALTA standard coverage
portion of the Title Policy, (b) one-half (%) of all Escrow fees and costs, (c) all sales and
gross receipts taxes, (d) all documentary transfer and/or stamp taxes, if any, and (e)
Lessor's share of prorations, if any. Lessee shall pay for (i) all premiums for the ALTA
extended coverage portion of the Title Policy and any endorsements requested by Lessee,
(ii) all costs relating to the survey and all reports, studies, inspections, investigations and
all other costs and expenses incurred by Lessee in connection with its review of any
materials, documents, materials, the Premises and other such due diligence conducted by
Lessee, (iii) any document recording fees and charges, (iv) one-half (%:) of all Escrow
fees and costs, and (v) Lessee's share of proration, if any. Lessor and Lessee shall each
pay for all of its respective legal and professional fees and fees of other consultants
incurred by such respective party, and if Lessee shall finance any of the Purchase Price,
Lessee shall pay all costs and expenses incurred or arising in connection with such
financing. All other normal and customary closing costs and expenses shall, except as
otherwise herein set forth, be allocated between Lessor and Lessee in accordance with the
customary practice in the County in which the Project is situated.
69.16. Purchase Option Assignment. The Purchase Option is personal to Lessee and may not be
assigned in whole or in part at any time. Notwithstanding the foregoing, Lessee may
assign the Purchase Option to any other governmental entity approved by the City to
whom this Lease is assigned as set forth in Section 60 herein above.
(remainder of page left intentionally, blank)
18
12926447.1
70, QMgYpads, The Form Lasso and Addendum may each be excouted in multiple counterparts
and by separate parties on separate counterparts and delivered via faosimilo or other means of
electronic image transmission, each of which shall be devoted an original Nr all purposes, but all
of which, together, shall constitute one and the same instrument,
LESSOR: LESSI$E:
DYER 18, LLC
sy:
Title: � hhQr
See attached City of Santa Ana
signature page
19
12926447.1
Lessee City of Santa Ana Signature Page to:
Addendum to
Standard Industrial/Commercial Single -Tenant Lease — Net
For Certain Premises Commonly Known as
1815 East Carnegie, Santa Ana, California 92705
March 1, 2021
CITY OF SANTA ANA:
Kristine Ridge
City Manager
APPROVED AS TO FORM:
Sonia R. Carvalho
Ci"ttomey
Ry O. odge
Assistant City Attorney
FOR APPROVAL:
Steven Mendoza
Executive Director
Community Development Agency
EXHIBIT "A" — LIST OF PERMITTED EXCEPTIONS
See attached
20
12926447.1
EXHIBIT "B" — DESCRIPTION OF LESSEE USES
The property will be used as an emergency homeless shelter and ancillary uses thereto are center,
health clinic, and ancillary office space Services to be provided include case management, housing
navigation, behavioral health and substance use counseling, healthcare coordination, and job
development, Outdoor property perimeter will be covered with screened fences to limit visibility into the
area. Outdoor facilities will include client storage area, pet accommodations, smoking area, outdoor
common area, recreational area, and temporary modular housing. There will be 2417 security guard
presence at the property to promptly resolve any security issues that may arise. In addition, this property
is not a walk-in facility. All client transportation to and from the facilities will be provided. In addition,
there is a Good Neighbor Policy which will be implemented by Lessee (and its Third Party Operator) to
promote positive communication and relationship with neighbors on an ongoing basis.
21
12926447.1