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HomeMy WebLinkAbout1988-04-05; City Council; Resolution 88-1141 4 F I( -e a b- I1 .$ 1 2 3 4 5 RESOLUTION NO. 88-1*14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APROVING AN AGREEMENT BETWEEN THE CITY OF CARLSBA THE CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION AND THE CARLSBAD UNIFIED SCHOOL DISTRICT. WHEREAS, the City has adopted Ordinance No. 9639 on July 20, 1982 6 Code Section 33000 et seq.) for the redevelopment, replanning, and g pursuant to the California Community Redevelopment Law (Health and Saf 8 ment Plan") and establishes the Village Project Area ("Project Area") 7 which ordinance approves the Vi1 1 age Area Redevelopment P1 an ("Redevel 10 WHEREAS, the District, the Commission and the City wish to enter 13 we1 fare of the City of Carl sbad; and 12 require redevelopment in the interest of health, safety, and general 11 redesigning of certain blighted areas within the City of Carlsbad whic 14 15 16 17 18 19 I into an Agreement for Cooperation to provide mutual aid and assistance the redevelopment of certain areas of the City through the acquisition relocation, and construction of public school facilities and other pub facilities; and WHEREAS, the District, the Commission and the City recognize the need to provide adequate public school facilities and other public 20 projects which are of mutual benefit to the Commission and the Distric 27 sion, the District and the City to provide for the implementation of 26 of the Agreement to create a cooperative relationship among the Commis 25 facilities and other public facilities. Accordingly, it is the purpos 24 reasonable means of financing the construction of such public school 23 facilities are a benefit to the Project Area and that there are no 0th 22 District, the Commission and the City have determined that such 21 services and amenities to serve the Project Area and the District. Th 28 L 1 ll 0 0 F 1 Redevelopment Plan and of the District. 3 Commission, the District and the City to carry out the goals of the 2 and the community at large by utilizing the combined resources of the 4 WHEREAS, the City Council of the City of Carlsbad and the Carlsba 5 development of this project. 6 Unified School District have reached formal agreement as to the joint 7 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of 8 1. That the above recitations are true and correct. 9 Carlsbad, California, as follows: 10 2. That the agreement between the City of Carlsbad, the Carlsbad 11 18 vote, to wit: 17 City Council held on the 5th day of April , 1988, by the follo 16 PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad 15 ment on behalf of the City of Carl sbad. 14 and City Clerk are hereby authorized and directed to execute said agre 13 District attached hereto as Exhibit A, is hereby approved and the Mayo 12 Housing and Redevelopment Commission and the Carl sbad Unified School AYES: Council Members Lewis, Kulchin, Pettine, Mamaux and Lars01 19 I NOES: None 2o I ABSENT: None 21 22 ATTEST: 23 24 ,,E~t-~~Au~k~<~~\ 25 26 27 28 I1 4 b e '""YPI T A TO RESOLUTIO i. AGREEMENT FOR COOPERATION BETWEEN THE CARLSBAD UNIFIED SCHOOL DISTRICT, THE CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION, AND THE CITY OF CARLSBAD 1. PARTIES AND DATE 1.1 This Agreement is entered into this day of , 1988 by and among the CARLSBAD UNIFIED SCHOOL DISTRICT, a public agency ("District"), the CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION ("Commission"), and THE CITY OF CARLSBAD ("Cityf'). 2. RECITALS 2.1 The City has adopted Ordinance No. 9639 on July 20, 1982, which ordinance approves the Village Area Redevelopment Plan ("Redevelopment Plan") and establishes the Village Proje Area ("Project Area") pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) for the redevelopment, replanning and redesigning of certain blighted areas within the City of Carlsbad which require redevelopment in the interest of health, safety, and general welfare of the City of Carlsbad. 2.2 The District, the Commission and the City wish to enter into this Agreement for Cooperation to provide mutual a and assistance in the redevelopment of certain areas of the City through the acquisition, exchange, relocation, and construction of public school facilities and other public facilities. More specifically, and subject to the conditions described hereinafter, the Commission and the District wish t cooperate in connection with the following redevelopment activities: (a) Conveyance of a portion of property owned by th District (which property to be conveyed is legally described in Exhibit A attached hereto and incorporated herein by reference) (the "District Site") to the Commission in exchang for the construction of a Senior Citizen Center which will include District administrative offices and the Undivided Interest (as defined in Section 5.4 below) (the "Administrati Offices"). Such District Administrative Offices are to be leased by the Commission to the District for a term of ten (1 years or as hereafter provided and thereafter conveyed to the District pursuant to the terms hereof. The Senior Citizen Center, including the District Administrative Office, is hereinafter described as the "Center", and -the Senior Citizer Center, excluding the District Administrative Offices, is hereinafter described as the "Commission's :Interest". The I I 4 e dB c Commission may convey the District Site and/or Center (exclusive of the Administrative Offices) to the City subject to the terms and conditions of this Agreemerkt, and (b) The temporary relocation of the certain various District uses presently operating on the District Site. 2.3 The District, the Commission and the City recognize the need to provide adequate public school facilities and 0th public services and amenities to serve the Project Area and t District. The District, the Commission and the City have determined that such facilities are a benefi.t to the Project Area and that there are no other reasonable means of financin the construction of such public school facilities and other public facilities. Accordingly, it is the purpose of this Agreement to create a cooperative relationship among the Commission, the District and the City to provide for the implementation of projects which are of mutual benefit to the Commission and the District and the community at large by utilizing the combined resources of the Cornmission, the District and the City to carry out the goals of the Redevelopment Plan and of the District. NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the parties hereto agree as follows: 3. DISTRICT SITE The Commission has completed and the District hereby approves the site plan for the development of the Center ("Center Plan") attached hereto as Exhibit I3 and incorporated herein by reference. District hereby consents to any land us , entitlement applications submitted by the Commission or its designee prior to conveyance of the District Site to the Commission which are substantially consistent with the Center Plan. The District shall convey title to the District Site, free and clear of all liens and encumbrances except those approved by the Commission, as more specifically set forth in Section 4 below; provided, however, in the event District fai to receive State Agency approval or is otherwise legally prohibited from conveying the District Site to Commission, th Agreement shall be terminated and neither party shall have an rights or obligations hereunder. 3.2 Upon conveyance of title to the District Site to the Commission, the Commission, in exchange, shall undertake redevelopment of the District Site in accordance with the Center Plan. 3.3 Any redevelopment activities undertaken by the Commission on the District Site shall meet the following requirements: 3/2 1/88 3738r/2410/01 -2- 4 1 0 fb * (a) A Floor Plan for the Administrative Offices, containing no less than 12,000 square feet, shall be submitte to the District for its approval, which approval shall not be unreasonably withheld. Within twenty (20) business days afte receipt of a Floor Plan for the Administrative Offices, the District shall approve of such Floor Plan or shall provide th Commission with a written statement setting forth the reasonable basis upon which the District withholds its conser provided that upon revision by the Commission of a Floor Plar for the Administrative Offices to address the matters set for in any such written disapproval by the District, such revised Floor Plan shall be deemed approved by the District. (b) The schedule of work shall be developed joint11 by the Commission and the District, and approved, in writing, by the District to assure minimum disruption to Pine School (located adjacent to the District Site) and the administrati\ responsibilities of the District. Any requested approval of such schedule of work shall be delivered by the District to t Commission within 20 business days after receipt thereof. 3.4 District shall vacate the District Site by August 1, 1988, unless otherwise notified by the Commission of a later date established by thirty (30) days' written notice. 4. CONVEYANCE OF THE DISTRICT SITE 4.1 The District hereby agrees to convey the District Sj to the Commission upon the terms and conditions hereinafter E forth, in exchange for the lease and conveyance to the Distrj by the Commission of the Administrative Offices and other consideration as set forth herein. 4.2 The transfer of the District Site to the Commission shall occur after the Commission has approved a Floor Plan fc the Administrative Offices and after the Commission has awarc a contract for construction of the Center. The terms "Close Escrow," "Closing" and/or "Closing Date" are used herein to mean the time the District's grant deed is filed of record ir the Office of the County Recorder of San Diego County. 4.3 On or before 12:OO o'clock noon on the day precedin5 the Closing Date, the District shall deposit with First American Title Insurance Company ("Escrow Agent") any instruments required by Escrow Agent to comply with the term: hereof. 4.4 At least five (5) days prior to the Closing Date, tl: District shall deliver to Escrow Agent a grant deed conveyin( the District Site to the Commission which document shall be duly executed and acknowledged by the District and/or such 3/2 1/88 3738r/2410/01 -3- I I < iD @ L persons as the title insurer may require in order to issue the title policy described herein, together with any title documents required pursuant to Section 4.6 below. On or befo the Closing Date, the District shall deposit with Escrow Agen such other instruments as may be required of the District to permit Escrow Agent to comply with the terms hereof. 4.5 On the Closing Date, Escrow Agent shall record the grant deed described in Section 4.4, above, provided Escrow Agent obtains assurance that First American Title Insurance Company is prepared to issue its CLTA policy of title insuran covering the District Site and showing title vested in the Commission in the amount of One Million Five Hundred Eighty Thousand Dollars ($1,580,000) subject only to the following: (a) Non-delinquent general real property taxes; (b) Approved exceptions shown in the preliminary title report to be approved by the Commission pursuant to Section 4.6 below; and (c) Exceptions consented to (in writing) or createc by the Commission. 4.6 The Commission shall promptly order a preliminary title report for the District Site, together with copies of E documents referenced therein as exceptions. The Commission shall have until April 1, 1988, to approve or disapprove the condition of title of the District Site. In the event that E matters are shown on the preliminary title report which are r acceptable to the Commission, the Commission shall have the right to disapprove same on or before April 1, 1988, by so notifying the District in writing. In the event the Commissi fails to notify the District in writing of a disapproved exception prior to April 1, 1988, the exceptions shown therej shall be deemed approved by the Commission. The District shall, within thirty (30) days thereafter, notify the Commission in writing, whether the District agrees, at its sc expense, to cause the removal of a disapproved exception. Ii District fails to respond, the District shall be deemed to hz refused to remove the disapproved exception. If the District refuses or is deemed to have refused to remove the disapprove exception, the Commission may either waive its prior objectic and proceed with the escrow or cancel this transaction by written notice to the District and Escrow Agent within ten (1 days following the receipt of the District's notice (or ten (10) days following the date the District is deemed to hz refused, if the District fails to provide notice). In the event the Commission elects to terminate this Agreement pursuant to the provisions of this Section, the Commission a] District agree to immediately execute any document required 1 cause Escrow Agent to cancel the escrow, less escrow 3/21/88 3738r/2410/01 -4- * x* * - cancellation charges, if any, after which time neither party shall have any further obligation to the other under this Agreement. 4.7 Real property taxes, if any, assessed against the District Site for the fiscal year in which Close of Escrow occurs shall be prorated as of the Close of Escrow on the bas of a thirty (30) day month. The Commission will pay the Escr Agent's fee, Escrow Agent's drafting charges, recording charg and documentary transfer tax in an amount determined by Escro Agent and the title policy premium on the policy herein described. 4.8 Escrow Agent will cause the County Recorder of San Diego County to mail the grant deed covering the District Sit to the Commission at the address set forth for the Commission herein. Escrow Agent will further deliver to the Commission United States mail, the title policy called for herein. 4.9 The District will deliver fee title in the District Site to the Commission at Close of Escrow. 5. CONVEYANCE OF THE ADMINISTRATIVE OFFICES 5.1 The Commission agrees to demolish the existing buildings located on the District Site except for the relocatable classrooms to be relocated by the District pursuant to Section 6.2, below, and to construct the Center i a timely manner in accordance with the Center Plan. The Commission further agrees to construct the Administrative Offices in accordance with Floor Plan approved by the Distric which Administrative Offices shall occupy not less than 12,000 square feet of office space within the Center. The building in which the Administrative Offices will be situated shall be developed by the Commission as an office condominiur The Commission shall take all necessary steps to prepare and/ file a condominium plan, covenants, conditions and restrictions, and any other documents necessary to develop th condominium project. Commission shall defend, indemnify and hold District harmless with respect to any losses, damages, liabilities, claims, actions, judgments, court costs and lega or other expenses incurred as direct or indirect consequence the construction of the Center by the Commission for the peri commencing upon District vacation of the District Site and terminating upon commencement of the Administration Offices Lease. 5.2 Within thirty (30) days after completion of the Administrative Offices in accordance with the plans and specifications, the Commission shall (i) deposit a Grant Deec conveying a condominium interest in the Administration Office to the District into an escrow with First American Title 3/2 1/88 3738r/2410/01 -5- - 0 0 - Insurance Company and, (ii) the Commission, as lessor, and th District, as lessee, shall execute the Lease for the Administrative Offices in the form of Exhibit C attached here and incorporated herein by this reference (the "Administrativ Offices Lease"). In addition to the foregoing, after completion of the Center and as long as the District holds a real property interest in the Administrative Offices, the Commission will grant the District, without additional charge the right to use an auditorium, which the Commission intends construct in the Center, for the District's board meetings twice each month, and at other times on an as available as-needed basis. The Administrative Offices Lease shall be f a term of ten years, and shall provide for rent equal to the sum of base rent in an amount equal to Twenty-Nine Thousand Eight Hundred Dollars ($29,800.00) per year, payable in arrears, plus in an amount equal to the monthly assessments e would be calculated under paragraph 5.4 below (together the "Rent"). The Administrative Offices Lease shall provide for termination by the District prior to the termination of the t (10) year term upon payment of the total annual rent remainir for the balance of the ten (10) year period. A memorandum of the Administrative Offices Lease, in the form of Exhibit D attached hereto, shall be executed and acknowledged by the Commission and recorded in the Official Records of San Diego County upon the effective date of the Administrative Offices Lease. 5.3 Concurrently with execution of the Administrative Offices Lease and deposit of the Grant Deed, the Commission shall cause the building in which the Administrative Offices will be situated to become an office condominium (the "Conversion" ) . 5.4 Following (a) the end of the ten (10) year term of t Administrative Offices Lease, provided the Administrative Offices Lease has not been terminated prior to the end of suc ten (10) year term and the District is not then in default ir the payment of the Rent or any other sums payable by the District pursuant to the terms thereof, and (b) the completic of the Conversion, the Commission shall convey to the Distric for no additional consideration, a fee interest in the condominium Administrative Offices together with an undividec interest in the Center common area equal to a fraction the numerator of which is the total square footage of the Administrative Offices as shown in the Condominium Documents approved by the Commission and the District and the denominal of which is the total square footage of the Center building i shown in said Condominium Documents ("Undivided Interest"). The Condominium Documents shall require the formation of a committee comprised of a designee of the Commission and a designee of the District and the on-site manager to review tl operation and maintenance of the Center. It is understood a] 3/2 1/88 3738r/2410/01 -6- r - 0 0 .. agreed that upon the conveyance of the Administrative OfficeE to the District, the District will be required to pay month11 assessments to the Commission covering common area and buildi exterior maintenance obligations, the District's percentage share of which shall be determined by utilizing the undivided Interest calculation immediately above. The Administrative Offices and the Undivided Interest are hereinafter referred t collectively as the "Administrative Offices." 5.5 The Commission's obligation to convey the Administrative Offices to the District shall be satisfied by delivering to First American Title Insurance Company instructions to record the Grant Deed held by First American pursuant to Section 5.2 hereof. Title to the Administrative Offices shall be subject only to nondelinquent real property taxes and covenants, conditions, restrictions, easements, rights and rights of way of record approved by the Commissior and the District. The District shall bear all expenses in connection with such conveyance including, without limitatior documentary transfer taxes, escrow charges (if any), recordir charges and title policy premiums. Real property taxes and assessments, if any, shall be prorated as of the date of delivery of such grant deed to the District. 6. TEMPORARY RELOCATION OF DISTRICT USES 6.1 The District Site is currently occupied by four (4) uses, as follows: (a) Administrative offices (b) Relocatable classrooms (c) The storage of District vehicles (d) Warehousing of District supplies including fooc supplies and gardening equipment 6.2 The District shall be responsible for locating replacement offices for the administrative offices reference( above (the "Replacement Offices") during the period of construction of the Center. 6.3 Vehicle storage for the District's approximately si: (60) vehicles and/or the warehousing of the District supplie, referenced above shall, at the District's option, be providec for by the City at the Safety Center owned by the City and located at 2560 Orion Way, Carlsbad, California (the "Safety Center") on a month to month tenancy with the rental rate to agreed upon by the City and the District; provided the District's rental obligation shall be $833.33 per month if District elects to both store its approximately sixty (60) vehicles and/or warehouse the District supplies. 3/21/88 3738r/2410/01 -7- , - a 0 * If the District elects to have such storage provided for by the City, the District and the City shall, concurrent1 with the execution of this Agreement, execute the Lease for t Safety Center space in the form of Exhibit E attached hereto and incorporated herein by this reference (the "Safety Center Lease"). The Safety Center Lease shall provide for the District to store its approximately sixty (60) vehicles and/o warehouse its District supplies and supplies related to the District's ancillary office uses in a 3600 square foot modula facility for a month-to-month basis commencing on , at the agreed upon rent, payable monthly in advance. The District shall be responsible for all taxes, maintenance and insurance in connection with the leased premises, all as more specifically set forth in the Safety Center Lease. In the event the District does not vacate the Safety Center at the end of the Safety Center Lease term, the Safety Center Lease shall be extended on a month-to-month bas at rent equal to the "Fair Market Rental Value", as defined below. Notwithstanding the foregoing, the Safety Center Leaf shall terminate at the end of such ten year term unless the District delivers to the City, within one hundred eighty (18C days prior to the end of the ten (10) year Safety Center Leaf term, written notice that it desires to continue the Safety Center Lease on a month-to-month basis at Fair Market Rental Value together with a one-time only sum payable as consideration for extension of the Safety Center Lease on a month-to-month basis in an amount equal to two percent (2%) c the sum of rent paid by the District to the City under the Safety Center Lease during the ten (10) year term. (a) For purposes of Section 6.3 hereof, "Fair Markc Rental Value" shall be determined, as follows: (i) At least 180 days prior to the date ten (10) years after commencement of the Safety Center Lease ("Ter Anniversary Date"), the District and the City shall atten to reach agreement as to the Fair Market Rental Value. (ii) In the event that the District and the City are unable to agree upon a Fair Market Rental Value withj such period, then no later than the 150th day prior to Tenth Anniversary Date, the District and the City shall jointly attempt to agree on the appointment of a real estate appraiser who is a member of the American Institut of Real Estate Appraisers or any successor thereto (or ir the event the American Institute or Society of Real Estal Appraisers or any successor shall not then be in existenc a disinterested real estate appraiser having appropriate qualifications to appraise commercial real estate as set forth immediately below), with at least ten (10) years professional experience in Southern California in 3/21/88 3738r/2410/01 -8- 2 0 0 - appraising land and improvements similar to the leased premises. All appraisers selected pursuant to the provisions hereof shall be impartial and unrelated, directly or indirectly, so far as employment of services is concerned, to any of the parties hereto, or their successors. The cost of the services performed by such appraiser shall be borne equally by the parties. The single appraiser jointly appointed by the parties shall determine the “Fair Market Rental Value’’ in the manner herein specified and shall render his or her appraisal within one hundred twenty (120) days after said appraiser has been selected. (iii) Failing the joint action within the time specified in (b) above, the District and the City shall each within an additional fifteen (15) days, separately a its own cost designate any appraiser meeting the qualifications stated in paragraph (ii) above. If two appraisers are appointed and they concur on the Fair Mark Rental Value, the Fair Market Rental Value determined by them shall be the Fair Market Rental Value. If the appraisers do not concur, and the difference between the respective higher and lower determinations of Fair Market Rental Value is an amount less than ten percent (10%) of the amount of the higher determination of the Fair Market Rental Value, the mean average of the two determinations shall be the Fair Market Rental Value. The two appraiser shall render their respective appraisals within one hundr twenty (120) days after they have been selected. (iv) If the difference between the two deter- minations exceeds the amount specified above, the two appraisers shall jointly select a third appraiser meetinc the qualifications set forth in paragraph (ii) above, anc if they are unable to agree on a third appraiser either c the parties to the Lease, by giving fifteen (15) days notice to the other party, may apply to the presiding juc of the Superior Court of San Diego County to select a thj appraiser who meets the qualifications set forth in paragraph (ii) above. The third appraiser, however selected, shall be a person who has not acted in any capacity for either party. Within fifteen (15) days fron the date of the selection of the third appraiser, all thl appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, dal and conclusions as to the Fair Market Rental Value. The third appraiser shall review all such findings, data and conclusions, and shall determine which of the two appraisers’ respective determinations is the more reasonable determination. The third appraiser shall not permitted to make any other independent determination of Fair Market Rental Value. The appraiser’s determination 3/2 1/88 3738r/2410/01 -9- 4 0 0 - found by the third appraiser to be the most reasonable determination shall be the Fair Market Rental Value. The third appraiser's conclusion shall be reached within one hundred twenty (120) days from the selection of the thirc appraiser. The expenses related to the selection and services of the third appraiser shall be shared equally k the District and the City. (v) In the event that the final determination of Fair Market Rental Value occurs after the Tenth AnniversE Date, the Fair Market Rental Value, as determined shall nonetheless commence concurrently with the first day of t Lease term following the expiration of the initial ten (1 year term. 6.4 The Commission shall pay the District the sum of Twc Hundred Thousand Dollars ($200,000.00) to cover the District' costs of relocating all facilities set forth in this Section as well as rental for the Replacement Offices during the per: of construction of the District Administrative Offices in the Center (collectively the "Relocation Amount"). The Commissic and the District hereby acknowledge and agree that the Relocation Amount is fair and reasonable compensation for suc costs of relocation and rental and the Commission shall not have any obligation to pay the District an amount in excess ( the Relocation Amount for such costs of relocation and renta: except if and to the extent that a delay in construction of 1 Center exceeds one (1) year from the date the District vacate in which case the Commission shall reimburse the District, ul receipt of evidence of costs incurred, for any rent payable I: the District until the District relocates to the Center. The payment of the Relocation Amount shall be in tht form of a check payable to the District, which check shall bc delivered by the Commissioner to the District on or before 6.5 The Commission hereby acknowledges and agrees that : shall be solely and completely responsible for (a) the removi of that certain fuel tank located on the District Site, including any grading or other work necessary to restore the surface of the District Site following such removal, and (b) ensuring that such removal of said fuel tank and the conditir of the District Site following such removal comply with all applicable federal, state and local laws, regulations, ordinances and rules. The District shall reimburse Commissi( for all costs associated with the disposal or treatment of Hazardous Materials, as hereafter defined. The District hereby further agrees to indemnify and hold the Commission harmless from and against, any losses, damages, liabilities, claims, actions, judgments, court cost 3/2 1/88 3738r/2410/01 -10- -! 0 e - and legal or other expenses (including attorneys' fees) which the Commission may incur as a direct or indirect consequence the use, generation, manufacture, disposal, threatened disposal, transportation or presence of "Hazardous Materials" (as hereinafter defined) in, on, under or about the District Site. For purposes of this Section, "Hazardous Materials" shall mean any oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials including, without limitation, any substances which are "hazardous substances" , "hazardous wastes" , "hazardous materials" or "toxic substances" under the Comprehensive Environmental Response, Compensation and Liability Act of 19E as amended, 42 U.S.C. 89601, et seq., the Hazardous Materials Transportation Act, 49 U.S.C.81801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 86901, et seq. , Sections 25117 and 25316 of the California Health& Safety Code, or any other applicable environmental law, ordinance 01 regulation. 7. RIGHTS OF FIRST REFUSAL TO PURCHASE 7.1 If, at any time following the conveyance of the Administrative Offices by the Commission to the District, the District determines to offer to sell or receives an offer to purchase the Administrative Offices on terms and conditions acceptable to the District, the District shall communicate such fact to the Commission and provide the Commission with 2 written description of the price and terms of such intended offer to sell or received offer to purchase within fifteen (: calendar days of determination or receipt of such an offer (1 "Notice of Offer"). The Commission shall have forty-five (4: calendar days following receipt of the Notice of Offer in wh: to deliver written notice to the District of the Cornmission': exercise of the Right of First Refusal to purchase the Administrative Offices upon the same terms and conditions as contained in such Notice of Offer. If Commission exercises this right, the District shall sell the Administrative Offict to the Commission on the same terms and conditions contained the Notice of Offer. If the Commission fails to exercise th: Right of First Refusal within said period, the District may thereafter sell the Administrative Offices upon the same terms. The provisions of this Section shall be operative eac time the District determines to sell the Administrative Offic to a third party. 7.2 If, at any time following the lease or conveyance o the Administrative Offices by the Commission to the District the Commission determines to offer to sell, or receives an offer to purchase, the Commission's Interest on terms and conditions acceptable to the Commission, the Commission shal communicate such fact to the District and provide the Distri 3/2 1/88 3738r/2410/01 -11- I e 0 with a written description of the price and terms of such intended offer to sell or received offer to purchase within fifteen (15) calendar days of determination or receipt of SUC an offer (the "Notice of Offer"). The District shall have forty-five (45) calendar days following receipt of th.e Notice of Offer in which to deliver written notice to the Commission of the District's exercise of the Right of First Refusal to purchase the Commission's Interest upon the same terms and conditions as contained in such Notice of Offer. If the District exercises this right, the Commission shall sell the Commission's Interest to the District on the same terms and conditions contained in the Notice of Offer. If the District fails to exercise this Right of First Refusal within said period, the Commission may thereafter sell the Commission's Interest upon the same terms. The provisions of this Section shall be operative each time the Commission determines to sel the Commission's Interest to a third party. 8. GENERAL PROVISIONS 8.1 This Agreement, inasmuch as it binds the District to sell, exchange and/or grant real property under certain conditions/events, must be executed in accordance with applicable provisions of the Education Code as must each real property transaction, subject to approval by the appropriate State Agency. 8.2 If any party to this Agreement commences litigation against any other party for the purpose of determining and enforcing its rights hereunder, or for money damages for a breach hereof or for other equitable relief related hereto, t prevailing party shall be entitled to receive from the losinc party, attorney's fees in the amount determined by the Court, together with costs reasonably incurred in prosecuting and defending such action. 8.3 No broker's commission or finder's fee shall be payable as a result of this transaction. The District and tl Commission each agree to and hereby does indemnify and hold 1 other harmless from and against any claim, demand and/or liability asserted or established against said other party b: or in favor of any third party for a brokerage commission or finder' s fee based on their agreement with such party. 8.4 Unless otherwise specifically provided, all notices, demands or other communications given hereunder shal.1 be in writing and shall be deemed to have been delivered upon actu; personal delivery or as of three (3) business days a.fter mailing by registered or certified mail, return rece.ipt requested, postage prepaid, addressed as follows: 3/21/88 3738r/2410/01 -12- x' I) e If to The District: Attn: If to the Commission: Copies To: Attn: City Attorney Attn: If to the City: Attn: or to such address or to such other person as any party shall designate to the other for such purpose in the manner hereinabove set forth. 8.5 This agreement contains the entire agreement betweer the parties relating to the transactions contemplated hereby and all prior agreements, understandings, representations anc statements, oral or written, are merged herein. IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of the day and year first above written. CARLSBAD UNIFIED SCHOOL DISTR: Dated By : President, Board of Trustee: CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION Dated By : CHA I RMAN ATTEST : CITY OF CARLSBAD Dated By : 3/2 1/88 3738r/2410/01 - 13- t 4 0 EXHIB~A TO AGREEMENT LEGAL DESCRIPTION of Proposed Parcel 'A City of Carlsbad Senior Center & Administration Building Parcel A of ROS # Recorder of the County of San Diego on , 1987, I specifically described as follows: filed in the office of the Cot Beginning at the Northerly corner of Lot 17, Block 59 of Map of C; bad Highlands in the Town of Carlsbad, County of San Diego, State of ( fornia, according to Map thereof No. 1661 filed in the office of the reco of said County on March 1 , 791 5; thence proceeding South 34O33' East 2 the Westerly line of said Block 59, a distance of 129.7 feet; thence S 55O27'35'' West a distance of 169.2 feet; thence South 34O33' East 'a distanc 100.9 feet; thence South 55O27'35'' West a distance of 201.8 feet; thence S' 34O33' East a distance of 11 6.8 feet.; thence South 55O27'35'' West a distanc 7.8 feet; thence South 34O33' East a distance .,of 169.2 feet; thence S' 55O27'35'' West a distance of 141.1 feet to the Westerly line of Lot 18 B 45, of said map 1661 ; Thence North 34O33' West along said Westerly Iir distance of 516.6 feet to the Westerly corner of Lot 17, of Block 46 of Map 1661; thence North 55O27'35" East along the southerly Right-of-way of Pine Drive as shown on said Map 7 661 a distance of 519.93 feet to Point of Beginning. A = 3.31 AC PLACE MAP HERE i/ * jy “,i?dqGL i- 3 L ‘j g, \q- \ h> f - .” 5 VI y 10 f- ( @I k(.‘ * c z W z W LLI &! U 0 I- a a a !- - - I X W * 1 i I I 1 I 1 I ~ !. ! , .. .. ".- . ._ . ._ - -. -.. I d - 0 EY‘ IBiT C TO AGREEh 6 STANDARD INDUSTRIAL LEASE - MULTI-TENAN AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 04% 1. Parties. This Lease, dated, for reference purposes only, is made by and between Carlsbad HOUShW and RedevelOraTlent CaIITliSSiOn Carlsbad Unified School District and (herein ca (herein cal 2. Premises, Parking and Common Areas. herein, real property situated in the County of “20 , State of California the-ivp Offipa commonly known as and described as specified but not including any rights to the roof of the Premises or to any Building in the hwhwel herein referred to as the “Premises”, as may be outlined on an Exhibit attached hereto, including rights to the Common Areas herein referred to as the“Building.”The Premises, the Building, thecommon Areas, the la d upon which thesame are located, alone Center. The Premises are a portioi buildings and improvements thereon, are herein collectively referred to as the *+4enter/ the Common Areas designated by Lessor for parking. Lessee shall not use more parking spaces than said number. Said parking SI 2.2 Vehicle Parking. Lessee shall be entitled to vehicle parking spaces, unreserved and unassigned, on thc used only for parking by vehicles no larger than full size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehic other than Permitted Size Vehicles are herein referred to as “Oversized Vehicles.” customers, or invitees to be loaded, unloaded, or parked in areas other than those designated by Lessor for such activities. 2.2.1 Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee’s employees, suppl without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and char 2.2.2 If Lessee permits or allowsanyof the prohibited activitiesdescribed in paragraph 2.2 of this Lease. then Lessor shall Lessee, which cost shall be immediately payable upon demand by Lessor. 2.3 Common Areas -,Definition. The term “Common Areas” is defined as all areas and facilities outside the Premisesand with boundary lineof the+e&&+d Center that are provided and designated by the Lessor from time to time for the general non-exclusive Lessee and of other lessees of theh&&f4el areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways, parkways, driveways and landscaped areas. Center and their respectiveemployees, suppliers, shippers. customers and invitees, incl customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, 2.4 Common Areas - Lessee’s Rights. Lessor hereby grants to Lessee, for the benefit of Lessee and its employees, supplic Areas as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor under the terms hereof or unde any rules and regulations or restrictions governing the use of the4adwAud Common Areas be deemed to include the right to store any property, temporarilyor permanently, in the Common Areas. Any such st( Center. Under no circumstancesshali the right herein gran permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent may be revoked at any time. In the 6 unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that i’ remove the property and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor. 2.5 Common Areas - Rules and Reguiaiions. Lessor or such other person(s) as Lessor may appoint shall have the exclusiv management of the Common Areas and shall have the right, from time to time, to establish, modify, amend and enforce reasona shippers, customers, and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with : regulations with respect thereto. Lessee agrees to abide by and conform to all such rules and regulations, and to cause its employe regulations by other lessees of the 4a&et+d Center. 2.1 Premises. Lessor hereby leases to Lesseeand Lessee leasesfrom Lessor forthe term, at the rental. and upon all of the cond .. 2.6 Common Areas - Changes. Lessor shall have the right, in Lessor’s sole discretion, from time to time: (a) To,makechanges to the Common.Areas, including, without limitation. changes in the location, size, shapeand number entrances, parkmg spaces, parkmg areas, loadtng and unloading areas, ingress, egress, direction of traffic, landscaped areas and wal close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains ava designate other land outside the boundaries of theh&et+i& Center to be a part of the Common Areas; (d) To add additional t improvements to the Common Areas; (e) To use the Common Areas while engaged in making additional improvements, repairs or alte h4tsMeI Center, or any portion thereof; (f) To do and perform such other acts and make such other changes in, to or with respect to Areas and +r&&&wA Center as Lessor may. in the exercise of sound business judgment, deem to be appropriate. that Lessee is entitled to under paragraph 2.2 be reduced. 2.6.1 Lessor shall at all times provide the parking facilities required by applicable law and in noevent shall the number of pi 3. Term. 3.1 Term. The term of this Lease shall be for ten ClO) & VPXS commencing on unless sooner terminated pursuant to any provision hereof. 3.2 Delay in Possession. Notwithstanding said commencement date, if for any reason Lessor cannot deliver possession of thf Lessee on said dale, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the c Lessee hereunder or extend the term hereof, but in such case, Lessee shall not be obligated to pay rent or perform any other obligat under the terrnsof this Lease, except as may be otherwise provided in this Lease, until possession of the Premises is tendered to Less Lessee’s option, by notice in writing to Lessorwithin ten (10) days thereafter, cancel this Lease, in whicheventthe partiesshall bedisc however, that if Lessor shall not have delivered possession of the Premises within sixty (60) days from said commencement date, Le all obligations hereunder; provided further, however, that if such written noticeof Lessee is not received by Lessor within said ten (10 Lessee’s right to cancel this Lease hereunder shall terminate and be of no further force or effect. 3.3 Early Possession. If Lessee occupies the Premises prior to said commencement date, such occupancy shall be subject to all 1 this Lease, such occupancy shall not advance the termination date, and Lessee shall pay rent for such period at the initial monthly ri below. 4. Rent. and ending on 4.1 Base Rent. Lessee shall pay to Lessor, as Base Rent for the Premises, without any offset or deduction, except as may I expressly provided in this Lease. on the -~----8+€&&3+1eRtk of the rm hereof,+”%payments in &wwe of $ %!!I!& m1versq-e commxemt &te mu arrears ~ Rent for any period during the term hereof which is for less than one Rshall be a pro rata portion of the Base Rent. Rent shall t lawful money of the United States to Lessor at the address stated herein30 such other persons or at such other placesas Lessor may writing. mxv 4.2 Operating Expenses. Lessee shall pay to Lessor during the term hereof, in addition to the Base Rent, Lessee’s Share. a: defined, of all Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in accordance with 1 provisions: ” (a) “Lessee’s Share” is defined, for purposes of this Lease, as (b) “Operating Expenses” is defined, for purposes of this Lease, as all costs incurred by Lessor, if any. for: (i) The operation, repair and maintanence. in neat, clean, good order and condition, of the following: parkways. driveways, landscaped areas, striping, bumpers, irrigation systems, Common Area lighting facilities and fences and gate (aa) The Common Areas, including parking areas, loading and unloading areas, trash areas, roadways, sidewalk (bb) Trash disposal services; (cc) Tenant directories; (dd) Fire detection systems including sprinkler system maintenance and repair; percent. Initials: - “‘American Industrial Real Estate Association 1981 MULTl TENANT-MODIFIED NET - < (ee) Security servic (ii) Any deductible portion of an insured loss concerning any of the items or matters described in this paragrap (ff) Any other service o be provided by Lessor that is elsewhere in this Lease stated to be an "Operating E) (iii) The cost of the premiums for the liability and property insurance policies to be maintained by Lessor under pal (iv) The amount of the real property tax to be paid by Lessor under paragraph 10.1 hereof: Ls 0 (v) The cost of water, gas and electricity to service the Common Areas. - ' (c) The inclusion Of the improvements. facilities and services set forth in paragraph 4.2(b)(i) of the definition of Opf shall not be deemed to impose an obligation upon Lessor to either have said improvements or facilities or to provide those se, -&a&&&& Center already has the same, Lessor already provides the services, or Lessor has agreed elsewhere in this Lease to prc some of them. (d) Lessee's Shareof Operating Expensesshall be payable by Lessee within ten (10) days aftera reasonablydetailed sta expenses is presented to Lessee by Lessor. At Lessor's option. however, an amount may beestimated by Lessor from time to time c of annual Operating Expenses and thesameshall be payable monthlyor quarterly, as Lessor shall designate. during each twelve- the Lease term, on the same day as the Base Rent is due hereunder. In the event that Lessee pays Lessor's estimate of Lessee's Sh Expenses as aforesaid, Lessor shall deliver to Lessee within sixty (60) days after the expiration of each calendar year a rea: statement showing Lessee's Share of the actual Operating Expenses incurred during the preceding year. If Lessee's payn paragraph 4.2(d) during said preceding year exceed Lessee's Share as indicated on said statement, Lesseesha\\ been\i\\ed\o ere, SJCh OVerpayment against Lessee's Share of Operating Expenses next falling due. If Lessee's payments under this paragr days after delivery by Lessor to Lessee of said statement. preceding year were less than Lessee's Share as indicated on said statement, Lessee shall pay to Lessor the amount of thedeficienl 5. Security Deposlt. Lessee shall deposit with Lessor upon execution hereof $ of Lessee's obligations hereunder. If Lessee falls to pay rent or other charges due hereunder, or otherwise defaultswith respect to as security for Lessee's faitt this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge in default 01 of any other sum to which Lessor may become obligated by reason of Lessee's default, or to compensate Lessor for any loss o Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) days after therefor deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount then required of Lessee. If the mc from time to time, increase during the term of this Lease, Lessee shall, at the time of such increase, deposit with Lessor additic security deposit so that the total amount of the security deposit held by Lessor shall at all times bear the same proportion to the th Rent as the initial security deposit bears to the initial Base Rent set forth in paragraph 4. Lessor shall not be required to keep said separate from its general accounts. If Lessee performs all of Lessee'sobligations hereunder, said deposit, or so much thereof as ha! been applied by Lessor, shall be returned, without payment of interest or other increment for its use, to Lessee (or, at Lessor's o assignee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee has vacated the Premises. Not is created herein between Lessor and Lessee with respect to said Security Deposit. 6. Use. 6.1 Use. The Premises shall be used and occupied only for .A- Officec .. or any other use which is reasonably comparable and for no other purpose. 6.2 Compliance with Law. (a) Lessor warrants to Lessee that the Premises, in the state existing on the date that the Lease term commences, but w the use for which Lessee will occupy the Premises. does not violate any covenants or restrictions of record, or any applicable shall be the obligation of the Lessor, after written notice from Lessee, to promptly, at Lessor's sole cost and expense, rectify any SL regulation or ordinance in effect on such Lease term commencement date. In the event it is determined that thiswarranty has been the event Lessee does not give to Lessor written notice of the violation of this warranty within six months from the date that commences, the correction of same shall be the obligation of the Lessee at Lessee'ssole cost. The warranty contained in this paragl be of no force or effect if, prior to the date of this Lease. Lesseewas an owner or occupant of the Premises and, in such event, Less any such violation at Lessee's sole cost. (b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's expense, promptlycomply with all applicablestatut or which may hereafter come into effect, whether or not they reflect a change in policy from that now existing, during the term or any rules, regulations, orders, covenants and restrictions of record, and requirements of any fire insurance underwriters or rating bureaL hereof, relating in any manner to the Premises and the occupation and use by Lessee of the Premises and of the Common Areas. L use nor permit the useof the Premises or theCommon Areas in any manner that will tend to create waste or a nuisance or shall tend 1 occupants of the+&&+tatCenter. 6.3 Condition of Premises. (a) Lessor shall deliver the Premises to Lessee clean and free of debris on the Lease commencement date (unless Less operating condition on the Lease commencement date. In the event that it is determined that this warranty has been violated, the possession) and Lessor warrants to Lessee that the plumbing, lighting, airconditioning, heating, and loading doors in the Premises! cost, rectify such violation. Lessee's failure to give such written notice to Lessor within thirty (30) days after the Lease commence obligation of Lessor, after receipt of written notice from Lesseesetting forth with specificity the natureof theviolation, to promptly. cause the conclusive presumption that Lessor has complied with all of Lessor's obligations hereunder. The warranty contained in 6.3(a) shall be of no force or effect if prior to the date of this Lease, Lessee was an owner or occupant of the Premises. commencement date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zoni (b) Except as otherwise provided in this Lease, Lessee hereby accepts the Premises in their condition existing a? county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any covenants or restrict and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledc Lessor nor Lessor's agent has madeany representation or warrantyas to the present or future suitabilityof the Premises for the cond business. 7. Maintenance, Repaln, Alterations and Common Area Servlces. 7.1 Lessor's Obligations. Subject to the provisions of paragraphs 4.2 (Operating Expenses), 6 (Use), 7.2 (Lessee's Obli! shippers, customers, or invitees, in which event Lessee shall repair the damage, Lessor, at Lessor's expense, subject to reimbursemc (Damage or Destruction) and except for damage caused by any negligent or intentional act or omission of Lessee, Lessee's employ paragraph 4.2, shall keep in good condition and repair thefoundations, exterior walls, structural condition of interior bearing walls, Premises, as well as the parking lots, walkways, driveways, landscaping, fences, signs and utility installations of the Common Are; thereof, as well as providing the servlces for which there is an Operating Expense pursuant to paragraph 4.2. Lessor shall not, howeve to paint the exterior or interiorsurface of exterior walls, nor shall Lessor be required to maintain, repair or replace windows, doors 01 the Premises. Lessor shall have no obligatlon to make repairs under this paragraph 7.1 until a reasonable time after receipt of writtc Lessee of the need for such repairs. Lessee expressly waives the benefits of any statute now or hereafter in effect which would ott Lessee the right to make repairs at Lessor's expense or to terminate this Lease because of Lessor's failure to keep the Premises i condition and repair. Lessor shall not be liable fordamages or loss of any kind or nature by reason of Lessor's failure to furnish any ( Services when such failure is caused by accident. breakage, repairs, strikes, lockout, or other labor disturbances or disputes of any cl any other cause beyond the reasonable control of Lessor. 7.2 Lessee's Obligations. (a) Subject to the provisions of paragraphs 6 (Use), 7.1 (Lessor's Obligations), and 9 (Damage or Destruction). Less€ expense, shall keep in good order, condition and repairthe Premises and every part thereof (whether or not the damaged portion of 11 the means of repairing the same are reasonably or readily accessable to Lessee) including, without limiting the generality of the plumbing, heating, ventilating and air conditioning systems (Lessee shall procure and maintain, at Lessee's expense, a venti conditioning system maintenancecontract), electrical and lighting facilities and equipment within the Premises, fixtures, interior wa. surfaces of exterior walls, ceilings, windows, doors. plate glass. and skylights located within the Premises. Lessor reserves the right tl the cost thereof. maintain theventilating and air conditioning system maintenance contract and if Lessor so elects. Lessee shall reimburse Lessor, up0 - (b) If Lessee fails to perform Lessee's obligations under this paragraph 7.2 or under any other paragraph of this Lease, Les upon the Premises after ten (10) days' prior written notice to Lessee (except in the case of emergency, in which no notice shall be requ such obligations on Lessee's behalf and put the Premises in good order, condition and repair, and the cost thereof together with inter the maximum rate then allowable by law shall be due and payable as additional rent to Lessor together with Lessee's next Base Rer (c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the si as received, ordinary wear and tear excepted. clean and free of debrls. Any damage or deterioration of the Premises shall not be dee wear and tear if the same could have been prevented by good maintenance practices. Lessee shall repair any damage to the Premisf by the installation or removal of Lessee's trade fixtures, alterations. furnishings and equipment. Notwithstanding anything to otherwise stated in this Lease, Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, spa1 conditioning, plumbing and fencing on the Premises in good operating condition. 7.3 Alterations and Addltlons. or about the Premises, or the Industrial Center, except for nonstructural alterations to the Premises not exceeding $2.500 in cum (a) Lessee shall not. without Lessor's prior written consent makeanyalterations, improvements, additions, or Utility lnsta durmg the term of this Lease. In any event, whether or not in excess of $2.500 in cumulative cost. Lessee shall make no change or alt Initials: - MULTl TENANT-MODIFIED NET @American Industrial Real Estate Association 1981 -2- 0 e exterior of the Premises nor the exterior of the Building nor the Industrial Center without Lessor's prior written consent. As used in th - 7.3 the term "Utility Installation" shall mean carpeting, window coverings, air lines, power panels. electrical distribution systems, ligh space heaters, air conditioning. plumbing, and fencing. Lessor may require that Lessee remove any or all of said alterations, ir additions or Utility Installations at the expiration of the term, and restore the Premisesand the Industrial Center to their priorconditior estimated cost of such improvements, to insure Lessor against any liability for mechanic's and materialmen's liensand to insure com require Lessee to provide Lessor. at Lessee's sole cost and expense, a lien and completion bond in an amount equal to one and one-l work. Should Lessee make any alterations, improvements, additions or Utility Installations without the prior approval of Lessor, Lesst time during the term of this Lease, require that Lessee remove any or all of the same. (b) Any alterations, improvements, additions or Utility Installations in or about the Premises or the kdustwl desire to make and which requires the consent of the Lessor shall be presented to Lessor in written form, with proposed detailed pl; ' Center thal shall give its consent, the consent shall bedeemed conditioned upon Lesseeacquiring apermittodosofrom appropriategovernmer the furnishing of a copy thereof to Lessor prior to the commencement of the work and the compliance by Lessee of all conditionsof si prompt and expeditious manner. (c) Lessee shall pay, when due, all claims for labor or materials furnished oralleged to have been furnished to or for Lesse, in the Premises, which claims are or may be secured by any mechanic's or materialmen's lien against the Premises, or thehdu&id C interest therein. Lessee shall give Lessor not less than ten (10) days' notice prior to the commencement of any work in the Premise: shall have the right to post notices of non-responsibility in or on the Premises or the Building as provided by law. If Lessee shall, i contestthevalidityofanysuchIien,claimordemand,thenLesseeshall.atitssoleexpensedefenditselfandLessoragainstthesame and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Lessor or the Prc !ndl!strtll Center, upon the condition that if Lessor shall require, Lessee shall furnish to Lessor a surety bond satisfactory to Lessor equal to such contested lien claim or demand indemnifying Lessor against liabilityfor the same and holding the Premises and the IpdL action if Lessor shall decide it is to Lessor's best interest to do so. free from the effect of such lien or claim. In addition, Lessor may require Lessee to pay Lessor's attorneys fees and costs in particip (d) All alterations, improvements, additions and Utility Installations (whether or not such Utility Installations constitute tra Lessee), which may be made on the Premises. shall be the property of Lessor and shall remain upon and be surrendered with the Pr expiration of the Lease term, unless Lessor requires their removal pursuant to paragraph 7.3(a). Notwithstanding the provisions of tb 7.3(d), Lessee's machineryand equipment, other than that which is affixed to the Premisesso that it cannot be removed without mater the Premises, and other than Utility Installations, shall remain the property of Lessee and may be removed by Lessee subject to the paragraph 7.2. 7.4 Utility Addltions. Lessor reserves the right to install new or additional utility facilities throughout the Building and the Comr the benefit of Lessor or Lessee, or any other lessee of the Industrial Center, including, but not by way of limitation, such utilities electrical systems, security systems, communication systems, and fire protection and detection systems, so long as such install, unreasonably interfere with Lessee's use of the Premises. 8. Insurance; Indemnity. Combined Single Limit Bodily Injury and Property Damage insurance insuring Lessee and Lessor against any liability arising 01 8.1 Liability Insurance - Lessee. Lessee shall. at Lessee's expense. obtain and keep in force during the term of this Leas occupancy or maintenance of the Premises and the- occurrence. The policy shall insure performance by Lessee of the indemnity provisions of this paragraph 8. The limits of said insura! Center. Such insurance shall be in an amount not less than $5C however, limit the liability of Lessee hereunder. 8.2 Liability Insurance- Lessor. Lessor shall obtain and keep in force during the term of this Leasea policy of Combined Single Injury and Property Damage Insurance. insuring Lessor, but not Lessee, against any liability arising out of the ownership, use, o maintenance of th- Center in an amount not less than $500,000.00 per occurrence. 8.3 Property Insurance. Lessor shall obtain and keep in force during the term of this Leasea policy or policies of insurance cot damage to the +f&t&& Center improvements, but not Lessee's personal property, fixtures, equipment or tenant improvements, in a1 to exceed the full replacement value thereof. as the same may exist from time to time, providing protection against all perils includ classification of fire, extended coverage, vandalism, malicious mischief, flood (in the event same is required by a lender having Premises) special extended perils ("all risk", as such term is used in the insurance industry), plate glass insurance and such other Lessor deems advisable. In addition, Lessor shall obtain and keep in force, during the term of this Lease, a policy of rental value insura a period of one year, with loss payable to Lessor, which insurance shall also cover all Operating Expenses for said period. In the E the Premises shall be paid by Lessee. Prernisesshall suffer an insured loss as defined in paragraphg.l(g) hereof, thedeductibleamounts under the casualty insurancepolici 8.4 Payment of Premium Increase. property insurance premium forth- (a) After the term of this Lease has commenced, Lessee shall not be responsible for paying Lessee's Share of any inc other lessee of the Industrial Center, or by the nature of such other lessee's occupancy which create an extraordinary or unusual ri enter specified by Lessor's insurance carrier as being caused by the use, acts or omi: immediately prior to the commencement of the term of this Lease if the increase is specified by Lessor's insurance carrier as being ct (b) Lessee. however, shall pay the entirety of any increase in the property insurance premium for the Industrial Center ove nature of Lessee's occupancy or any act or omission of Lessee. 8.5 Insurance Policies. Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at le; such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of "Best's Insur: Lessee shall not do or permit to be done anything which shall invalidate the Insurance policies carried by Lessor. Lessee shall deli\ copies of liability insurance policies required under paragraph 8.1 or certificates evidencing the existence and amounts of such insu seven (7) days after the commencement date of this Lease. No such policy shall be cancellable or subject to reduction of cover modification except after thirty (30) days priorwritten notice to Lessor. Lesseeshall, at least thirty (30) days priortotheexpiration of s furnish Lessor with renewals or "binders" thereof. other for loss or damage arising out of or rncldent to the perils insured against which perils occur in, on or about the Prerntses. wheth 8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recover negligence of Lessor or Lessee or their agents, employees, contractors and/or invitees. Lessee and Lessor shall, upon obtaining th insurance required give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in tl 8.7, Indemnity. Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee l.&u.&d Center, or from the conduct of Lessee's business or from any activity, work or things done. permitted or suffered by Lessee in Premises or elsewhere and shall further indemnify and hold harmless Lessor from and against any and all claims arising from any breac any of Lessee'sagents. contractors, or employees, and from and against all costs, attorney's fees, expensesand liabilities incurred in th in the performance of any obligation on Lessee's part to be performed under the termsof this Lease, or arising from any act or omission ( claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense by counsel reasonably Satisfactory to Lessor and any such claim or any action or proceeding brought thereon; and in case any action or proceeding be brought against Lessor by reasor cooperate with Lessee in such defense. Lessee, as a material part of the consideration to Lessor, hereby assumes all risk of damage tc Lessee or injury to persons, in, upon or about the h&s+fi& Center arising from any cause and Lessee hereby waives all claims in res against Lessor. 8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business o income therefrom or for damage to the goods, wares. merchandise or other property of Lessee, Lessee'semployees. invitees, custo other person in or about the Premises or the lc&w-t&d agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from tt Center. nor shall Lessor be liable for injury to the person of Lessee, Lessee3 leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any whether said damage or injury results from conditions arising upon the Premises or upon other portions of the h&+&m!H sources or plaoes and regardless of whether the cause of such damage or injury or the meansof repairing the same is inaccessible to Le Senter. o of Lessor to enforce the provisions of any other lease of the b&+&w& shall not be liable for any damages arising from any act or neglect of any other lessee, occupant or user of theJ&&&&d Center, nor fro Center. 9. Damage or Destruction. SEE PARAGW'H 47 Bmi an if the Premises are damaged or destroyed to the extent that the cost of repair is IC or more of the then replacement cost (b) "Premises Total if the Premisesaredamaged or destroyed to the extent that thecost of repair is that the cost to repair is less than fifty percent of the then rep1 (c) "Premises Building Partial Damage' h the Premises are a part is damaged or destroyed I (d) "Premises Building Total Destruction" shall mean if the extent that the cost to repalr is fifty percent or more of the then repiac rt is damaged or destr (e) "Industrial Center Buildings" shall mean all of the buildi (f) "Industrial Center Buildings Total Destruction"shal1 mean if the Industrial Center Buildingsaredarnaged o tw the rnctnftr I= 'U. .. . .. MULTI TENANT-MODIFIED NET Initials: - -3- - cc American Industrial Real Estate Association 1981 eriod this Lease shall be cancelled a 9.3 Premises Total Destruction; Premises B rm of this Lease there is damage, 3 9.4 Damage Near End of Term. ancel this Lease i after theexpirati' to Lessee of Lessor's election to do so within in the grant of option to the contrary. 10. Real Property Taxes. 10.1 Payment of Taxes. Lessor shall pay the real pioperty tax, as defined in paragraph 10.3, applicable to theJe&& reimbursement by Lessee of Lessee's Share Of such taxes in accordance with the provisions of paragraph 4.2, except as o paragraph 10.2. tax assessor's records and work sheets as being caused by additional improvements placed upon th&?&&f& 10.2 Additional Improvements. Lesseeshall not be responsible for paying Lessee's Share of any increase in real proper Lessor for the exclusive enjoyment of such other lessees. Lessee shall, however, pay to Lessor at the time that Operating E Center b under paragraph 4.2(c) the entirety of any increase in real property tax if assessed solely by reason of additional improvem, Premises by Lessee or at Lessee's request. general, special, ordinary or extraordinary, and any license fee, commercial rental tax, improvement bond or bonds, le! 10.3 Definition of "Real Property fax." AS used herein, the term "real property tax" shall include any form of real estai Inheritance. personal income or estate taxes) imposed on the+e&&ml Center or any portion thereof by any authority havinc power to tax. including any city, county, state or federal government, or any school. agricultural, sanitary, fire, stre; improvement district thereof, as against any legal or equitable interest of Lessor in the&&&+.& Lessor's right to rent or other income therefrom, and as against Lessor's business of leasing theladusk4 ' Center or in any portio also include any tax, fee, levy, assessment or charge (i) in substitution of, partially or totally, any tax, fee, levy, assessment 01 Center.Theterm"rt or (iii) which is imposed for a service or right not charged prior to June 1.1978, or. if previously charged, has been increased : included within the definition of "real property tax," or (ii) the nature of which was hereinbefore included within the definition I hereinbefore included within the definition of real property tax by reason of such transfer, or (v) which is imposed by reason o (iv) which is imposed as a result of a transfer, either partial or total, of Lessor's interest in the lNilvtrinl Center or which isadc modifications or changes hereto, or any transfers hereof. 10.4 Joint Assessment. If thelaakwa Center is not separately assessed, Lessee's Share of the real property tax liability proportion of the real property taxes for all of the land and improvements included within the tax parcel assessed, such propor by Lessor from the respective valuationsassigned in the assessor's work sheets or such other information as may be reasonat reasonable determination thereof, in good faith, shall be conclusive. 10.5 Personal Property Taxes. personal property of Lessee contained in the Premisesor elsewhere. When possible, Lesseeshall causesaid trade fixture's, ful (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, eq and all other personal property to be assessed and billed separately from the real property of Lessor. (b) If any of Lessee's said personal property shall be assessed with Lessor's real property, Lessee shall pay attributable to Lessee within ten (IO) days after receipt of a written statement setting forth the taxes applicable to Lessee's with any taxes thereon. If any such services are not separately metered to the Premises, Lessee shall pay at Lessor's option,eit 11. Uttlitles. Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services supplied to th a reasonable proportion to be determined by Lessor of all charges jointly metered with other premises in the Building. 12. Assignment and Subletting. MULTI TENANT-MODIFIED NET @American Industrial Real Estate Association 1981 4- In ,@ 0 or other sums due hereunder will cause Lessor to inCUrCO3tS not contemplated by this Lease. the exact amount of which will be extre 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of Base Rent, Lessee’s Share of Operati to ascertain. Such costs include, but are not limited to. processing and accounting charges, and late charges which may be imposed - the terms of any mortgage or trust deed covering the Property. Accordingly. if any installment of Base Rent, Operating Expenses, ora due from Lessee shall not be received by Lessor Of Lessor’s designee within ten (lo) days after such amount shall be due, then requirement for notice to Lessee, Lessee shall pay to LeSSOra late charge equal to 6%ofsuch overdue amount. The parties herebyag late charge represents a fair and reasonable estimate of the Costs Lessor will incur by reason of late payment by Lessee. Acceptanc charge by Lessor shall in no event constitute a waiver of Lessee’s default with respect to such overdueamount. nor prevent Lessorfrc any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collectec consecutive installments of any of the aforesaid monetary obligations of Lessee, then Base Rent shall automatically become due quarterly in advance, rather than monthly, notwithstanding paragraph 4.1 or any other provision of this Lease to the contrary. the term of thi: 16. Estoppel Certificate. (a) Each party (as “responding party”) shall at any time upon not less than ten (10) days’ prior written notice from the other party ( party”) execute, acknowledge and deliver to the requesting party a statement in writing (i) certifying that this Lease is unmodified and date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not. to the responding party’s and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and efl relied upon by any prospective purchaser or encumbrancer of the Premises or of the business of the requesting party. any uncured defaults on the part of the requesting party, or specifying such defaults if any are claimed. Any such statement may be ( (b) At the requesting party’soption. the failure to deliver such statement within such timeshall bea materialdefaultof thisLease who is to respond, without any further notice to such party, or it shall be conclusive upon such party that (i) this Lease is in full fora without modification except as may be represented by the requesting party, (ii) there are no uncured defaults in the reque: performance, and (iii) if Lessor is the requesting party, not more than one month’s rent has been paid in advance. (c) If Lessor desires to finance. refinance, or sell the Property, or any part thereof, Lessee hereby agrees to deliver to any lender I designated by Lessor such financial statements of Lessee as may be reasonably required by such lender or purchaser. Such stat1 include the past three (3) years’ financial statements of Lessee. All such financial statements shall be received by Lessor and su purchaser in confidence and shall be used only for the purposes herein set forth. 17. Lessor’s Liability. The term “Lessof”as used herein shall mean only the owner or owners, at the time in question, of the fee title interest in a ground lease of the+%teekdCenter, and except as expressly provided in paragraph 15. in the event of any transfer of Interest, Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of SUC all liability as respects Lessor’s obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grantc of such transfer, in which Lessee has an interest, shall be delivered to the grantee. The obligations contained in this Lease to be PC Lessor shall, subject as aforesaid, be binding on Lessor’s successors and assigns, only during their respective periods of ownership 18. Severability. The invalidity of any provision of this Lease as determined by a court of competent jurisdiction, shall in no way affec’ of any other provision hereof. 19. interest on Past-due Obligations. Except as expressly herein provided, any amount due to Lessor not paid when dueshall bear in maximum rate then allowable by law from the date due. Payment of such interest shall not excuse or cure any default by Lessee undel provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late charges Lessee. 20. Time of Essence. Time is of the essence with respect to the obligations to be performed under this Lease. 21. Additional Rent. All monetary obligations of Lessee to Lessor under the terms of this Lease, including but not limited to Lesse Operating Expenses and insurance and tax expenses payable shall be deemed to be rent. 22. Incorporation of Prlor Agreements; Amendments. This Lease contains all agreements of the parties with respect to any matte1 herein. No prior or contemporaneous agreement or understanding pertaining to any such matter shall be effective. This lease may be that neither the real estate broker listed in paragraph 15 hereof nor any cooperating broker on this transaction nor the Lessor or any e writing only, signed by the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee herebyack agents of any of said persons has made any oral or written warranties or representations to Lessee relative to the condition or use by LC Premises or the Property and Lessee acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health A except as otherwise specifically stated in this Lease. use and adaptability of the Premises and the compliance thereof with all applicable laws and regulations in effect during the term o 23. Notices. Any notice required or permitted to begiven hereundershall be in writing and may be given by personal deliveryor by ce and if given personally or by mail, shall be deemed sufficiently given if addressed to Lessee or to Lessor at the address noted below the $ the respective parties, as the case may be. Either party may by notice tothe other specify a different address for notice purposesexcel Lessee’s taking possession of the Premises, the Premisesshali constitute Lessee’s address for notice purposes. A copy of all notices permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor may! time hereafter designate by notice to Lessee. 24, Waivers. No waiver by Lessor or any provision hereof shall be deemed a waiver of any other provision hereof or of any subsequer Lessee of the same or any other provisioin. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the f Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver of an: breach by Lessee of any provision hererof. other than the failure of Lessee to pay the particular rent so accepted, regardless of Lessor’s of such preceding breach at the time of acceptance of such rent. 25. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the other a “s memorandum of this Lease for recording purposes. 26. Holding Over. If Lessee, with Lessor’s consent, remains in possession of the Premises or any part thereof after the expiration hereof, such occupancy shall be a tenancy from month to month upon all the provisions of this Lease pertaining to the obligations of Le: .. : fram mnth to mnth. MULTI TENANT-MODIFIED NET Initials: - @American Industrial Real Estate Association 1981 -6- - a a 27. Cumulative Remedles. NO remedy or election hereunder shall be deemed exclusive but shall. wherever possible, becumulativ remedies at law or in equity. 28. Covenants and Condltlons. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a con 29. Binding Effect; Choke of Law. Subject to any provisions hereof restricting assignment or sublettin by Lessee and subject to th4 paragraph 17, this Lease shall bind the parties. their personal representatives, successorsandassigns.8his Lease shall be governec the State where the+dt&+& which thehdu6t.d Center is located. ’ Center is located and any litigation concerning this Lease between the parties hereto shall be initiated il 30. Subordlnatlan. other hypothecation or security now or hereafter placed upon the Industrial Center and to any and all advances madeon the securitj (a) This Lease, and any Option granted hereby, at Lessor’s option, shall be subordinateto any ground lease, mortgage, deed all renewals, modifications, consolidations. replacements and extensions thereof. Notwithstanding such subordination, Lessee’! possession of the Premises shall not be disturbed if Lessee is not in default and so long as Lessee shall pay the rent and observe an( the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee or ground less, to Lessee, this Lease and such Options shall be deemed prior to such mortgage, deed of trust or ground lease, whether this Lease 01 have this Lease and any Options granted hereby prior to the lien of its mortgage, deed of trust or ground lease, and shall give written are dated prior or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof. granted herein prior to the lien of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute SU (b) Lessee agrees to execute any documents required to effectuate an attornment, a subordination or to make this Lease within ten (10) days after written demand shall constitute a material default by Lessee hereunder without further notice to Lessee option, Lessor shall execute such documents on behalf of Lessee as Lessee’s attorney-in-fact. Lessee does hereby make, ( irrevocably appoint Lessor as Lessee’s attorney-in-fact and in Lessee’s name, place and stead, to execute such documents in accorc paragraph 30( b). 31. Attorney’s Fees. If either party or the broker(s) named herein bring an action to enforce the terms hereof or declare rights I prevailing party in any such action, on trial or appeal, shall be entitled to his reasonable attorney’s fees to be paid by the losing party court. The provisions of this paragraph shall inure to the benefit of the broker named herein who seeks to enforce a right hereunL 32. Lessor’s Access. Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times for the purpose of i same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or a( Premises or to the building of which they are part as Lessor may deem necessary or desirable. Lessor may at any time place or Premises or the Building any ordinary “For Sale” signs and Lessor may at any time during the last 120 days of the term hereof place c any liability to Lessee for the same. Premises any ordinary “For Lease” signs. All activities of Lessor pursuant to this paragraph shall be without abatement of rent, norshi 33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the PI Common Areas without first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Least not be obligated to exercise any standard of reasonableness in determining whether to grant such consent. 34. Slgns. Lessee shall not place any sign upon the Premises or the-!&ustW circumstances shall Lessee place a sign on any roof of th&du&.u& ’ Center without Lessor’s prior written consc ’ Center. 35. Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, st merger, and shall. at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as an 2 Lessor of any or all of such subtenancles. 36. Consents. Except for paragraph 33 hereof. wherever in this Lease the consent of one party is required to an act of the other party shall not be unreasonably withheld or delayed. 37. Guarantor. In the event that there is a guarantor of this Lease, said guarantor shall have the same obligations as Lessee undf 38. Oulet Possession. Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, conditions a on Lessee‘s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the entire term her all of the provisions of this Lease. The individuals executing this Lease on behalf of Lessor represent and warrant to Lessee that authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding uponall parties holding interest in the Property. original Lessee while occupying th portion thereof, and may not be exercts however, that an Option may be exe herein granted to Lessee are not assi either by reservation or otherwise. 39.2 Options Personal. ay be exercisec 39.4 Effect of Default on Options. (a) Lessee shall have no right to exer ant of Option to the contrary, 3.l(b) or 13.l(c) and continu on the date after a monetary ( er the provisions of an Option shall terminate and be of no further force , if, after such exercise and during the term of this Lease, (i) Lessee fails to 40. Security Measures. Lessee hereby acknowledges that Lessor shall have no obligation whatsoever to provide guard service or ot measures for the benefit of the Premises or the Industrial Center. Lessee assumes all responsibility for the protection Of Lessee, its Lessor’s sole option, from providing security protection for the industrial Center or any part thereof, in which event the Cost ther invitees and the property of Lessee and of Lessee’s agents and invitees from acts of third parties. Nothing herein contained shall preve included within the definition of Operating Expenses, as set forth in paragraph 4.2(b). 41. Easements. Lessor reserves to itself the right, from time to time, to grant such easements, rights and dedications that Lessor deer or desirable, and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, Maps and re! not unreasonably interfere with the use of the Premises by Lessee. Lessee shall sign any of theaforementioned documents upon requt and failure to do so shall constitute a material default of this Lease by Lessee without the need for further notice to Lessee. 42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one party to the othi provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payment “under F such payment shall not be regarded as avoluntary payment, and there shall survive the right on the part of said party to institute suit for such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part thereof, said p; entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. MULTI TENANT-MODIFIED NET Initials: - @American lndustrlal Real Estate Association 1981 -7- - P 0 a 43. Authority. If Lessee is a corporation, trust, or general or limited partnership, each individual executing this Lease On behalf Of : represents and warrants that he or she is duly authorized to execute and deliver this Lease On behalf Of said entity. If Lessee iSa Corporati partnership, Lessee shall. within thirty (30) days after execution of this Lease, deliver to Lessor evidence Of such authority satisfactor) 44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions. if any, shall be ca the typewritten or handwritten provisions. 45. Offer. Preparation of this Lease by Lessor or Lessor's agent and submission of same to Lessee shall not be deemed an offer to Lease shall become binding upon Lessor and Lessee only when fully executed by Lessor and Lessee. 46. Addendum. Attached hereto is an addendum or addenda containing paragraphs N/A through constitute a part of this Lease. 47. DAMAGE AND EESTRUCTION. For purposes of this paragraph, "Insured Loss" shall mean damage or destructic was covered bJ* an event required to be covered by the insurtince described in parag1 The fact that an Insured Loss has a deductible amount shall not make the loss an ur loss # (1) Insured Loss: If at any time during the term of this Lease there is dam: destnction cf the Premises which is an Insured Loss, then Lessor shall, at Lessor' repair such damage to the Premises, but not Lessee's fixtures, equipment or tenant as soon as reasonably possible and this Lease shall continue in full force and effc (2) Uninsured LOSS: If at any time during the term of this Lease ttere is d: or destruction of the Premises which is not an Insured Loss, Lessee shall make the at Lessee's expense and this Lease shall continue in full force and effect. (3) Waiver: Lessor and Lessee waive the provisions of any statute. which re: termination of leases whec leased property is destroyed and agree thzit such event : governed by the terms cf this Lease. Under no circumstances shall Lessee be entit: abatement of rent as a result of damage or destruction of the Premises. LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION C HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. TH AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY RE THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEOUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO: THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEOUENCES OF THIS LEASE. LESSOR LESSEE Carlsbad Housinp and Redevelopment Commissictn Carlsbad Unified School District BY ' BY BY BY Executed on (Corporate Seal) Executed on ADDRESS FOR NOTICES AND RENT ADDRESS For these forms write the American Industrial Real Estate Association, 350 South Figueroa St.. Suite 275, Los Angeles, CA 90071 Fc 0 '""'BIT D TO AGREEMENT c RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: 1 STRADLING, YOCCA, CARLSON & RAUTH ) 660 Newport Center Drive 1 Suite 1600 ) Newport Beach, California 92660 ) Attn: Joel H. Guth 1 ) ) [Space above line for recorder's use 1 MEMORANDUM OF LEASE This Memorandum of Lease is made as of the day of 19 by and between the CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION ("Lessor") and the CARLSBAD UNIFIED SCHOOL DISTRICT, a public agency ("Lessee") . - By this Memorandum of Lease, for good and adequate consideratiol pursuant to all the terms and conditions set forth in that certain lease agreement by and between Lessor and Lessee and dated as of / 15 (the "Lease Agreement"), all the terms and conditions of which are made 2 part hereof as though fully set forth herein, (1) Lessor does hereby leas Lessee and Lessee does hereby let from Lessor that certain real property, together with the improvements located thereon, situated in the County of Diego, State of California, more particularly described in Exhibit "AI' attached hereto and incorporated herein by this reference (the "Premises" for a term of ten (10) years commencing on , 19- and ending on , 19 , unless sooner terminated in accordance with the Lease - Agreement; and (2) Lessor does hereby agree that following the end of sai ten (10) year term, provided the Lease Agreement has not been terminated prior to the end of such ten (10) year term and Lessee is not then in def in the payment of rent or any other sums payable by Lessee pursuant to th terms of the Lease Agreement, Lessor shall convey to Lessee a fee interes the Premises pursuant to the, terms of .the Lease Agreement and that certai. Agreement for Cooperation Between Carlsbad Unified School District, the Carlsbad Housing and Redevelopment Commission and the City of Carlsbad da , 1988, all of the terms and conditions of which are made a par hereof or though fully set forth herein. L 0 0 ALL WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the date first above written. "Lessor" THE CARLSBAD HOUSING AND REDEVELOPMENT COMMISSION By : Its: "Lessee" THE CARLSBAD UNIFIED SCHOOL DISTRICT By : Its: , 3754r/5705/001 -2- I 0 e =XHIBIT A TO MEMO F LEASE EXHIBIT A DESCRIPTION OF PREMISES I School Administrative Offices AS shown on the attached floor plans. I 1 "" "" -.-. c 1 e I c F 4 E t < L "- I 1 I' i/ - !: .. ~ ':A!. . .. .. . ... . '.. . . .. - . ""_ i- . . . . : . . , , . .. H g 2 t!s3llihS~i b i$*f$$#iddfdd I. 3 "i sd a 0 'dd+dd'dd$f** 2i $p 'i E 13 IIlIIifif ~ I EXHIBIT E TO ACREEMEN1 t STANDeD INDUSTRIAL LEA" GROSS ~" ~ AMERICAN INDUSTRiAL REAL ESTATE ASSOCIATION mTi 1. Parties. This Lease, dated, for reference purposes only, PI9 , I: between 7h.0 pp Wlsbad Vnified school District (herein Ci and (herein ea1 2. Premises. Lessor hereby leases to Lessee and Lessee leases from Lessor for the term, at the rental, and upon all of the condl herein, that certain real property situated in the County of e 0 State of c;I1 i fnrn i a commonly known as the Safety mtt?r and described as a 3600 square foot m0d1h.r fac-tv and parkinq and storaqe I .. as shown on attached plot plan , Said real property including the land and all improvements therein, is herein called "the Premises". 3. Term. 3.1 Term. The term of this Lease shall be for ten (10) YGSXS commencing on and ending on unless sooner terminated pursuant to any provision hereof. Lessee on said date, Lessor shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease or the 3.2 Delay In Possession. Notwithstanding said commencement date, if for any reason Lessor cannot deliver possession of tt Lessee hereunder or extend the term hereof, but in such case, Lessee shall not be obligated to pay rent until possession of the Premi: to Lessee: provided, however, that if Lessor shall not have delivered possession of the Premises within sixty (60) days from said co date, Lessee may, at Lessee's option. by notice in writing to Lessor within ten (10) days thereafter, cancel this Lease, in which event tt be discharged from all obligations hereunder: provided further, however, that if such written notice of Lessee is not received by Les: ten (10) day period, Lessee's right to cancel this Lease hereunder shall terminate and be of no further force or effect. hereof, such occupancy shall not advance the termination date, and L sseeshall pay rent for such period at the initial monthly rates s 3.3 Early Possession. If Lessee occupies the Premises prior to said commencement date, such occupancy shall be subject tc nt Lessee shall a t L s r as rent for the Premises, cneR(R(y payments of $ lo tooo *O0 , in advance, on3 & bo&nt FtT annuai dw e erm ere0 . Lessee shall pay Lessor upon the execution hereof $ rn.9o9.00 as rent for term nf thic Te . Rent for any period during the term hereof which is for less than one month shall be a pro rata portion of the monthly installment. payable in lawful money of the United States to Lessor at the address stated herein or to such other persons or at such other piaces; designate in writing. 5. Securlty Deposit. Lessee shall deposit with Lessor upon execution hereof $ performanceof Lessee's obligations hereunder. If Lessee fails to pay rent or otherchal ges due hereunder, or otherwisedefaults with as security for Le: the payment of any other sum to which Lessor may become obligated by reason of Lessee's default, or to compensate Lessor for any I( provision of this Lease, Lessor may use, apply or retain all or any portion of said deposit for the payment of any rent or other charge ir which Lessor may suffer thereby. If Lessor so uses or applies all or any portion of said deposit, Lessee shall within ten (10) day: demand therefor deposit cash with Lessor in an amount sufficient to restore said deposit to the full amount hereinabovestated and LI to do so shall be a material breach of this Lease. If the monthly rent shall, from time to time, increase during the term of this Leasc proportion to current rent as the original security deposit bears to the original monthly rent set forth in paragraph 4 hereof. Lessc thereupon deposit with Lessor additional security deposit so that the amount of security deposit held by Lessor shall at all times 1 thereof as has not theretofore been applied by Lessor, shall be returned, without payment of interest or other increment for its use. tc required to keep said deposit separate from its general accounts. If Lessee performs all of Lessee's obligations hereunder, said depo! Lessor's option, to the last assig,nee, if any, of Lessee's interest hereunder) at the expiration of the term hereof, and after Lessee hi Premises. No trust relatlonshlp IS created herein between Lessor and Lessee with respect to said Security Deposit. 6. Use. 6.1 Use. The Premises shall be used and occupied only for dnd c* Tees supplies 2nd supplies related to r-essels m - office or any other use which is reasonably comparable and for no other purpose. 6.2 Compliance with Law. use for which Lessee will use the Premises, does not violate any covenants or restrictions of record, or any applicable building code, (a) Lessor warrants to Lessee that the Premises, in its state existing on the date that the Lease term commences, but withou' ordinance in effect on such Lease term commencement date. In the event it is determined that this warranty has been violated, then obligation of the Lessor, after written notice from Lessee, to promptly, at Lessor's sole cost and expense, rectify any such violatior correction of same shall be the obligation of the Lessee at Lessee's sole cost. The warranty contained in this paragraph 6.2 (a) shall be Lessee does not give to Lessor written notice of the violation of this warranty within six months from the date that the Lease term COI effect if, prior to the date of this Lease, Lessee was the owner or occupant of thepremises, and, in such event, Lessee shall correct any I at Lessee's sole cost. (b) Except as provided in paragraph6.?(a), Lessee shall, at Lessee's expense, comply promptly with all applicable statute! rules, regulatlons, orders, covenants and restrictions of record, and requlrements in effect during the term or any part of the term here the use by Lessee of the Premises. Lessee shall not use nor permit the use of the Premises in any manner that will tend to create waste or, if there shall be more than one tenant in the building containing the Premises, shall tend to disturb such other tenants. 6.3 Condltlon of Premises. possession) and Lessor further warrants to Lessee that the plumbing, lighting, air conditioning, heating, and loading doors in the Prer (a) Lessor shall deliver the Premises to Lessee clean and free of debris on Lease commencement date (unless Lessee in good operating condition on the Lease commencement date. In the event that it is determined that this warranty has been violated, tl the obligation of Lessor, after receipt of written notice from Lessee setting forth with specificity the nature of the violation, to prompt1 sole cost, rectify such violation. Lessee's failure to give such written notice to Lessor within thirty (30) days after the Lease commer shall cause the conclusive presumption that Lessor has complied with all of Lessor's obligations hereunder. The warranty con' paragraph 6.3(a) shall be of no force or effect if prior to the date of this Lease, Lessee was the owner or occupant of the Premises. (b) Except as otherwise provided in this Lease, Lessee hereby accepts the Premises in their condition existing as commencement date or the date that Lessee takes possession of the Premises, whichever is earlier, subject to all applicable zonin county and state laws, ordinances and regulations governing and regulating the use of the Premises, and any covenants or restrictic and accepts this Lease subject thereto and to all matters disclosed thereby and by any exhibits attached hereto. Lessee acknowledge Lessor nor Lessor's agent has made any representation or warranty as to the present or future suitability of the Premises for the condu business. 7. Maintenance, Repairs and Alteratlons. 7. I Lessee's Obllgatlons. (a) Subject to the provisions of Paragraphs 6,7.1 and 9. Lessee, at Lessee's expense, shall keep in good order, condition a accessable to Lessee) including; without limiting the generality of the foregoing. all plumbing, heating, air conditioning, (Lessee shal Premises and every part thereof (whether or not the damaged portion of the Premises or the means of repairing thesame are reasona Inltlals: ~ @ American Industrial Real Estate Association 1980 GROSS ..I. . .. _. .. I e e maintain. at Lessee's expense, an air conditioning system maintenance contract) ventilating,electrical and lighting facilitiasand eql - the Premises. fixtures, interior walls and interior surface of exterior walls. ceilings. windows, doors, plate glass, and skylights. loci Premises, and all landscaping, driveways, parking lots, fences and signs located in the Premises and all sidewalks and parkways i Premises. (b) If Lessee fails to perform Lessee's obligations under this Paragraph 7.2 or under any other paragraph of this Lease, Lessor's option enter upon the Premises after lodays' prior written notice to Lessee (except in the case of emergency, in which case be required), perform such obligations on Lessee's behalf and put the Premises in good order. condition and repair, and thecost thi with interest thereon at the maximum rate then allowable by law shall be due and payable as additional rent to Lessor together with rental installment. (c) On the last day of the term hereof, or on any sooner termination, Lessee shall surrender the Premises to Lessor in the si as received, ordinary wear and tear excepted, clean and free of debris. Lessee shall repair any damage to the Premises occa installation or removal of its trade fixtures, furnishings and equipment. Notwithstanding anything to the contrary otherwise stated Lessee shall leave the air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, fencing OR the premises in good operating condition. 7.3 Alterations and Additions. about the Premises. except for nonstructural alterations not exceeding $2,500 in cumulative costs during the term of this Lease (a) Lessee shall not, without Lessor's prior written consent makeany alterations, improvements, additions, or Utility lnstallr whether or not in excess of $2.500 in cumulative cost, Lessee shall make no change or alteration to the exterior of the Premises nor l carpeting, window coverings, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters. air conditionic the building(s) on the Premises without Lessor's prior written consent. As used in this Paragraph 7.3 the term "Utility lnstallatiol andfencing. Lessor may requirethat Lessee remove any or all of saidalterations, improvements, additionsor Utility Installationsat thc the term, and restore the Premises to their prior condition. Lessor may require Lessee to provide Lessor, at Lessee's sole cost and e and completion bond in an amount equal to one and one-half times the estimated cost of such improvements, to insure Lessor again for mechanic's and materialmen's liens and to insure completion of the work. Should Lessee make any alterations. improvements Utility Installations without the prior approval of Lessor, Lessor may require that Lessee remove any or all of the same. requires the consent of the Lessor shall be presented to Lessor in written form, with proposed detailed plans. If Lessor shall give it: (b) Any alterations, improvements, additions or Utility Installations in. or about the Premises that Lessee shall desire to m; consent shall be deemed conditioned upon Lessee acquiring a permit to do so from appropriate governmental agencies, the furnisl thereof to Lessor prior to the commencement of the work and thecompliance by Lessee of all conditions of said permit in a prompt an manner. (c) Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee E the Premises, which claims are or may be secured by any mechanics'or materialmen's lien against the Premises or any interest therein give Lessor not less than ten (10) days' notice prior to the commencement of any work in the Premises, and Lessor shall have the notices of non-responsibility in or on the Premises as provided by law. If Lessee shall, in good faith, contest the validity of any such demand, then Lessee shall, at its sole expense defend itself and Lessor against the same and shall pay and satisfy any such adverse j: may be rendered thereon before the enforcement thereof against the Lessor or the Premises, upon the condition that if Lessor shall re shall furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to such contested lien claim or demand indemnifying L attorneys fees and costs in participating in such action if Lessor shall decide it is to its best interest to do so. liability for the same and holding the Premises free from the effect of such lien or claim. In addition, Lessor may require Lessee to (d) Unless Lessor requires their removal, asset forth in Paragraph7,3(a). all alterations, improvements, additions and Utility (whether or not such Utility Installations constitute trade fixtures of Lessee), which may be made on the Premises, shall become th Lessor and remain upon and be surrendered with the Premises at the expiration of the term. Notwithstanding the provisions of th 7.3(d). Lessee's machinery and equipment. other than that which is affixed to the Premises so that it cannot be removed without materi the Presmises. shall remain the property of Lessee and may be removed by Lessee subject to the provisions of Paragraph 7.2(c). 8. Insurance; Indemnity. 8.1 Liabilliy Insurance - Lessee. Lessee shall, at Lessee's expense, obtain and keep in force during the term of this Leas Combined Single Limit Bodily Injury and Property Damage Insurance insuring Lessee and Lessor against any liability arising 01 occupancy or maintenance of the Premises and all other areas appurtenant thereto. Such insurance shall be in an amount not less tl per occurrence. The policy shall insure performance by Lessee of the indemnity provisions of this Paragraph 8. The limits of said in: not, however, limit the liability of Lessee hereunder. lh .. . .. . . af mge%ov damage to the Premises, but not Lessee's fixtures, equipment or tenant improvements in an amount not to exceed the full replac thereof, as the same may exist from time to time, providing protection against all perils included within the classification of fire, extend! 8.4 Payment of Premium Increase. (a) Lessee shall pay to Lessor, during the term hereof, in addition to the rent, the amount of any-,premiums for tt required under Paragraphs.%&ad 8.3 9 - r-. -=. _r.. -.-. (b) Lessee shall pay any such premium kwusmes to Lessor within 30 days after receipt by Lessee of a copy of the premium : other satisfactory evidence of the amount due. If the insurance policies maintained ereunder cover other improvements in adc Premises, Lessor shall also deliver to Lessee a statement of the amount of suchiRGceas IE. attributable to the Premises and showing in detail, the manner in which such amount was computed. If the term of this Lease shall not expire concurrent1 with the expiration a covered by such insurance, Lessee's liability for premiumhueasis shall be prorated on an annual basis. 'pr-UIn such other rating as may be required by a lender having a lien on the Premises, as set forth in the most current issue of "Best's lnsural 8.5 Insurance Policies. Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at lea: Lessee shall deliver to Lessor copies of policies of liability insurance required under Paragraph 8.1 or certificates evidencing the ex amounts of such insurance. No such policy shall be cancellable or subject to reduction of coverage or other modification except aftf days' prior written notice to Lessor. Lessee shall, at least thirty (30) days prior to the expiration of such policies, furnish Lessor with "binders" thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be Rayable by L demand. Lessee shall not do or permit to be done anything which shall invalidate the insurance policies referred to in Paragraph 8.3 8.6 Walver of Subrogation. Lessee and Lessor each hereby release and relieve the other, and waive their entire right of recovery other for loss or damage arising out of or incident to the perils insured against under paragraph 8.3, which perils occur in, on or about th whether due tothe negligence of Lessor or Lessee ortheir agents, employees, contractors and/or invitees. Lessee and Lessor shall. up01 the polccces of Insurance required hereunder, give notice to, the insurance carrier or carriers that the foregoing mutual waiver of sub contained in this Lease. 8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor from and against any and all claims arising from Lessee's Premises, or from the conduct of Lessee's business or from any activity, work or things done, permitted or suffered by Lessee in 0 in the performance of any obligation on Lessee's part to be performed under the terms of this Lease, or arising from any negligence of thc Premises or elsewhereand shall further indemnify and hold harmless Lessor from and against any and all claimsarising from any breac any of Lessee's agents, contractors. or employees, and from and against all costs, atlorney'sfees, expenses and liabilities incurred in thc any such clam or any action or proceeding brought thereon: and in case any action or proceeding be broughtagainst Lessor by reason claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense by counsel satisfactory to Lessor. Lessee, as a materiz consideration to Lessor, hereby assumes all risk of damage to property or injury to persons, in, upon or about the Premises arising fron and Lessee hereby waives all claims in respect thereof against Lessor. 8.8 Exemption 01 Lessor lrom Liability. Lessee hereby agrees that Lessor shall not be liable for injury to Lessee's business or income therefrom or for damage to the goods. wares, merchandise or other property of Lessee, Lessee3 employees, invitees, custom other person in or about the Premises, nor shall Lessor be liable for injury to the person of Lessee, Lessee's employees, agents or c whether such damage or injury is caused by or results from fire, steam, electricity, gas. water or rain, or from the breakage, leakage, ob5 other defects of pipes, sprinklers, wlres, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause, wheth damage or injury results from conditions arising upon the Premises or upon other portions of the building of which the Premises are a p other sources or places and regardless of whether the cause of such damage or injury or the means of repairing the same is inaccessible Lessor shall not be liable for any damages arising from any act or neglect of any other tenant. if any, of the building in which the Pr located. GROSS Initials: - -2- - # 9. Damage or Destruction. e a 9.1 Definitlons. (a) "Premises Partial Damage" shall herein mean damage or destruction to the Premises to the extent that the cost of re - 50% of the fair market value of the Premises immediately prior to such damage or destruction. "Premises Building Partial Dams value of such building 8s.a whole immediately prior to such damage or destruction. mean damage or destruction to the building of which the Premises are a part to the extent that the cost of repair. Is less than 50% c (b) "Premises Total Destruction".shall herein mean damage or destruction to the Premises to the extent that the cost of more of the fair market value of the Premises immediately prior to such damage ordestruction."Premises Building Total Destruct value of such building as a whole immediately prior to such damage or destruction. mean damage or destruction to the building of which the Premises are a part to the extent that the cost of repair is 50% or more 0 IC) "Insured LOSS" shall herein mean damage or destruction which was caused by an event required to be covered b described in paragraph 8. 9.2 Partial Damage - Insured Loss. Subject to the provisions of paragraphs 9.4,9.5 and 9.6, if at any time during the term of is damage which is an Insured LOSS and which falls into the classification of Premises Partial Damage or Premises Building Parti; Lessor shall, at Lessor's sole cost, repair such damage. but not Lessee's fixtures, equipment or tenant improvements, as so01 possible and this Lease shall continue in full force and effect. 9.3 Partlal Damage - Uninsured Loss. Subject to the provisions of Paragraphs 9.4,9.5 and 9.6, if at any time during the te there is damage which is not an Insured LOSS and which falls within the classification of Premises Partial Oamage or Premises Lessor's option either (i) repair such damage as soon as reasonably possible at Lessor's expense, in which event this Lease shall Damage, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee's expense cancelandterminatethisLease,asofthedateoftheoccurrenceofsuchdamage.IntheeventLessorelectstogivesuchnoticeofLe force and effect, or (ii) give written notice to Lessee within thirty (30) days after the dateof the occurrence of such damage of Less1 to cancel and terminate this Lease, Lessee shall have the right within ten (10) daysafterthe receipt of such noticeto givewritten no Lessee's inteption to repair such damage at Lessee'sexpense, without reimbursement from Lessor, in which eventthis Leaseshall force and effect, and Lessee shall proceed to make such repairs as soon as reasonably possible. If Lessee does not give such no' 10-day period this Lease shall be cancelled and terminated as of the date of the occurrence of such damage. 9.4 Total Destruction. If at any time during the term of this Lease there is damage, whether or not an Insured Loss, (includ required by any authorized public authority), which falls into the classification of Premises Total Destruction or Premises Destruction, this Lease shall automatically terminate as of the date of such total destruction. 9.5 Damage Near End of Term. (a) If at any time during the last six months of the term of this Lease there is damage, whether or not an Insured Loss, whicl classification of Premises Partial Damage, Lessor may at Lessor's option cancel and terminate this Lease as of the date of occu damage by giving written notice to Lessee Of Lessor's election to do so within 30 days after the date of occurrence of such dama option may be exercised has not yet expired, Lessee shall exercise such option, if it is to be exercised at all. no later than 2G (b) Notwithstanding paragraph 9.5(a), in the event that Lessee has an option to extend or renew this Lease, and the timewi occurrence of an Insured Loss falling within the classification of Premises Partial Damage during the last six months of the term and this Lease shall continue in full force and effect. If Lessee fails to exercise such option during said 20 day period, then Lessor ' Lessee duly exercises such option during said 20day period, Lessor shall, at Lessor's expense, repair such damage as soon as reasc option terminate and cancel this Lease as of the expiration of said 20 day period by giving written notice to Lessee of Lessor's el within 10 days after the expiration of said 20 day period, notwithstanding any term or provision in the grant of option to the cont provisions of this Paragraph 9, the rent payable hereunder for the period during which such damage, repairorrestoration continues (a) In the event of damage described in paragraphs 9.2 or 9.3. and Lessor or Lessee repairs or restores the Premises 1 in proportion to the degree to which Lessee's use of the Premises is impaired. Except for abatement of rent, if any, Lessee shall against Lessor lor any damage suffered by reason of any such damage, destruction, repair or restcration. (b) If Lessor shall be obligated to repair or restore the Premises under the provisions of this Paragraph 9 and shall not c( Lessor written notice of Lessee's election to do so at any time prior to the commencement of such repair or restoration. In such e' repair or restoration within 90 days after such obligations shall accrue, Lessee may at Lessee's option cancel and terminate this L shall terminate as of the date of such notice. concerning advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so mi 9.7 Termination -Advance Payments. Upon termination of this Lease pursuant to this Paragraph 9. an equitable adjustmen security deposit as has not theretofore been applied by Lessor. 9.8 Waiver. Lessor and Lessee waive the provisions of any statutes which relate to termination of leases when leased proper and agree that such event shall be governed by the terms of this Lease. 10. Real Property Taxes. 10.1 Payment of Tax Increase.%&%all pay the real property tax, as defined in paragraph 10.3, applicable to the .. Prem statement setting forth the amount of sucWea6e nd the computation thereof. If the term of this Lease shall not expire concur expiration of the tax fiscal year, Lessee's liability for increased taxes for the last partial.lease year shall be prorated on an annual 9.6 Abatement of Rent; Lessee's Remedies. fl la 11 10.3 Definition of "Real Property Tax". As used herein, the term "real property tax" shall include any form of real estate tax t general, special, ordinary or extraordinary, and any license fee. commercial rental tax, improvement bond or bonds. levy or t inheritance, personal income or estate taxes) imposed on the Premises by any authority having the direct or indirect power to tax city, state or federal government, or any school, agricultural, sanitary, fire, street, drainage or other improvement district thereof, legal or equitable interest of Lessor in the Premises or in the real property of which the Premises area part, as against Lessor's right I assessment or charge (i) in substitution of, partially ortotally, any tax, fee, levy, assessment or charge hereinabove included within It income therefrom, and as against Lessor's business of leasing the Premises. The term "real property tax" shall also include an) "real property tax," or (ii) the nature of which was hereinbefore included within the definition of "real property tax," or (iii) which is service or right not charged prior to June 1, 1978, or, if previously charged, has been increased since June 1. 1978. or (iv) which i: result of a transfer, either partial or total, of Lessor's interest in the Premises or which is added to a tax or charge hereinbefore inch definition of real property tax by reason of such transfer, or (v) which is imposed by reason of this transaction, any modifications or ct or any transfers hereof. 10.4 Joint Assessment. If the Premises are not separately assessed, Lessee's liability shall be an equitable proportion of thr taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be determined by Lessor from valuations assigned in the assessor's work sheets or such other information as may be reasonably available. Lessor's reasonable thereof, in good faith, shall be conclusive. 10.5 Personal Property Taxes. personal property of Lessee contained in the Premises or elsewhere. When possible, Lessee shall causesaid tradefixtures. furnishin1 (a) Lessee shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipmen and all other personal property to be assessed and billed separately from the real property of Lessor. (b) If any of Lessee's said personal property shall beassessed with Lessor's real property, Lesseeshall pay Lessorthetaxes Lessee within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee's property. with any taxes thereon. If any such services are not separately metered to Lessee, Lessee shall pay a reasonable proportion to be ( 11. Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone and other utilities and services supplied to the Prerr Lessor of all charges jointly metered with other premises. 12. Assignment and Subletting. .. there^ corporation resulting from the merger or consolidation with Lessee, or to any person or en concern of the business that is being conducted on the Premises, provided that said assigne Lease. Any such assignment shall not, in any way, affect or limit the liabilityof Lessee under t Lessee of Lessee's obligati lnltlals: GROSS -3- < 0 0 13. Defaults; Remedler. Lessee: 13.1 Defaults. The occurrence of any one or more Of the following events shall constitute a material default and breach I (a) The vacating or abandonment of the Premises by Lessee. where such failure shall continue for a period of three days after written notice thereof from Lessor to Lessee. In the event that Less1 (b) The failure by Lesseeto make any payment of rent or any other payment required to be made by Lessee hereunder, a with a Notice to Pay Rent or Ouit pursuant to applicable Unlawful Detainer statutes such Notice to Pay Rent or Quit shall also con$ required by this subparagraph. by Lessee, other than described In paragraph (b) above, where such failure shall continue for a period of 30 days after written not[ (c) The failure by Lessee to observe or perform any of the covenants, conditions or provisions of this Lease to be observe Lessor IO Lessee; provided, however, that if the nature of Lessee‘s default is such that more than 30 days are reasonably required 1 cure to completion. Lessee shall not be deemed to be in default if Lessee commenced such cure within said 30-day period and thereafter diligently r (d) (i) The making by Lessee of any general arrangement or assignment for the benefit of creditors: (ii) Lessee becom defined in 11 U.S.C. $101 or any successor statute thereto (unless, in the case of a petition filed against Lessee. the same is disn days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premisc interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other jul substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure is not discharge1 Provided, however, in the event that any provision of this paragraph 13.1 (d) is contrary to any applicable law, such provision sha or effect. successor in interest of Lessee or any guarantor of Lessee’s obligation hereunder, and any of them, was materially false. (e) The discovery by Lessor that any financial statement given to Lessor by Lessee, any assignee of Lessee. any subtenan demand and without limiting Lessor in the exercise of any right or remedy which Lessor may have by reason of such default or I 13.2 Remedies. In the event of any such material default or breach by Lessee, Lessor may at any time thereafter, with or w (a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case this Leaseshall terminate a Lessor by reason of Lessee‘s default including. but not limited to, the cost of recovering possession of the Premises; expenses of rele immediately surrender possession of the Premises to Lessor. In such event Lessor shall be entitled to recover from Lesseeall dama of award by the court having jurisdiction thereof of the amount by which the unpaid rent for the balance of the term after the timc necessary renovation and alteration of the Premises. reasonable attorney’s fees, and any real estate commission actually paid; the H exceeds the amount of such rental loss for thesame period that Lessee proves could be reasonably avoided; that portion of the leasi paid by Lessor pursuant to Paragraph 15 applicable to the unexpired term of this Lease. (b) Maintain Lessee’s right to possession in which case this Lease shall continue in effect whether or not Lesseeshall have Premises. In such event Lessor shall be entitled to enforce all of Lessor‘s rights and remedies under this Lease, including the right to as it becomes due hereunder. (c) Pursue any other remedy now or hereafter available to Lessor under the laws or judicial decisions of the state wherein tt located. Unpaid installments of rent and other unpaid monetary obligations of Lessee under the terms of this Lease shall bear interel due at the maximum rate then allowable by law. 13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails to perform obligations required of Lessor within a re but in no event later than thirty (30) days after written notice by Lessee lo Lessor and to the holder of any first mortgage or deed of trl obligation; provided, however, that if the nature of Lessor’s obligation is such that more than thirty (30) days are required for pel Premises whose name and address shall have theretofore been furnished to Lessee in writing. specifying wherein Lessor has failed t Lessor shall not be in default if Lessor commences performance within such 30-day period and thereafter diligently prosecut completion. 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee to Lessor of rent and other sums due hereu Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremelydifficult toascertain.Suchcosts i covering the Premises. Accordingly. if any installment of rent or any other sum due from Lessee shall not be received by Lessor or Le5 not limited to, processing and accounting charges, and late charges which may be imposed on Lessor by the terms of any mortgac within ten (10) days after such amount shall be due, then. without any requirement for notice to Lessee, Lessee shall pay to Lessc equal to 6% of such overdue amount. The parties hereby agree that such late charge represents a fair and reasonable estimate of th will incur by reason of late payment by Lessee. Acceptance of such late charge by Lessor shall in no event constitute a waiver of LI with respect to such overdue amount, nor prevent Lessor from exercising any of the other rights and remedies granted hereunder. In 1 and payable quarterly in advance, rather than monthly, notwithstanding paragraph 4 or any other provision of this Lease to the c late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of rent, then rent shall automatical 13.5 Impounds. In the event that a late charge is payable hereunder, whether or not collected, for three (3) installments of re monetary obligation of Lessee under the terms of this Lease, Lessee shall pay to Lessor, if Lessor shall so request, in addition to any c and insurance expenses on the Premises which are payable by Lessee under the terms of this Lease. Such fund shall be establl required under this Lease, a monthly advance installment, payable at the same time as the monthly rent, as estimated by Lessor, for rc payment when due, before delinquency, of any or all such real property taxes and insurance premiums. If the amounts paic Lessee under the provisions of this paragraph are insufficient to discharge the obligations of Lessee to pay such real property tqxes premiums as the same become due, Lessee shalt pay to Lessor, upon Lessor’s demand, such additional sums necessary to pay such c moneys paid to Lessor under this paragraph may be intermingled with other moneys of Lessor and shall not bear interest. In theeven theobligationsof Lessee to perform under this Lease, then any balance remaining from funds paid to Lessor under the provisionsof I may, at the‘option of Lessor, be applied to the payment of any monetary default of Lessee in lieu of being applied to the payment of re and insurance premiums. 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain, or sold under the threat of said power (all of which are herein called “condemnation”), this Lease shall terminate as to the part so taken as of the date thc authority takes titleor possession. whicheverfirst occurs. If more than 1O%of the floorareaof the building on thepremises, or more t writing only within ten (1 0) days after Lessor shall have given Lessee written notice of such taking (or in the absence of such notice, land area of the Premises which is not occupied by any building, is taken by condemnation, Lessee may, at Lessee’s option, to b days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning author possession. If Lessee does not terminate this Lease in accordance with the foregoing, this Lease shall remain in full force and effect a! of the building situated on the Premises. No reduction of rent shall occur if the only area taken is that which does not have a bL of the Premises remaining, except that the rent shall be reduced in the proportion that the floor area of the building taken bears to the thereon. Any award for the taking of all or any part of the Premises under the power of eminent domain or any payment made unde exercise of such power shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of cr for the taking of the fee, or as severancedamages; provided, however, that Lessee shall be entitled to any award for lossof or dama trade fixtures and removable personal property. In the event that this Lease is not terminated by reason of such condemnation, Less extent of severance damages received by Lessor in connection with such condemnation, repair any damage to the Premises ca condemnation except to the extent that Lessee has been reimbursed therefor by the condemning authority. Lessee shall pay any amc of such severance damages required to complete such repair. Lessor and said broker(s), the sum (b) Lessor further agrees t 16. Estoppel Certificate. (a) Lessee shall at any time upon not less than ten (1 0) days’ priorwritten notice from Lessor execute, acknowledge and deli\ statement in writing (i) certifying thatthis Lease is unmodified and in full force and effect (or, if modified, stating the nature of such moc certifying that this Lease, as so modified, is in full force and effect) and thedate to which the rent and other charges are paid in advanc (ii) acknowledging that there are not, to Lessee’s knowledge, any uncured defaults on the part of Lessor hereunder, or specifying su any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Prem conclusive upon Lessee (i) that this Lease is in full forceand effect, without modification except as may be represented by Lessor, (ii) (b) At Lessor’s option, Lessee’s failure to deliver such statement within such time shall be a material breach of this Lea! no uncured defaults in Lessor’s performance, and (iii) that not more than one month’s rent has been paid in advance or such fs considered by Lessor as a default by Lessee under this Lease. GROSS Inltialr: -4- . 0 0 purchaser designated by Lessor such financial statements of Lessee as may be reasonably required by such lender or purchaser (C) If Lessor desires to finance, refinance, or sell the Premises, or any part thereof, Lessee hereby agrees to &live shall include the past three years’ financial statements of Lessee. All such financial statements shall be received by Lessor 8 17. Lessor‘s Llablllty. The term “Lessor” as used herein shall mean only the owner or owners at the time in question ofthe fe Lessor herein named (and in case of any subsequent transfers then the grantor) shall be relieved from and after the date of s interest in a ground lease of the Premises, and except as expressly provided in Paragraph 15. in the event of any transfer of suc liabilifyas re5peCfSLeSSOr’S obligations thereafter to be performed, provided that any funds in the hands of Lessor or the then grz such transfer, in which Lessee has an interest, shall be delivered to the grantee. The obligations contained in thih Lease to be pel shall, subject as aforesaid, be binding on Lessor’s successors and assigns, only during their respective periods of ownership. 18. Seversbillty. The invalidity of any provision of this Lease asdetermined by acourtof competent jurisdiction, shall in nowa) of any other provision hereof. 19. Interest on Past-due Obligations. Except as expressly herein provided, any amount due to Lessor not paid when due shall I maximum rate then allowable by law from the date due. Payment of such interest shall not excuse or cure any default by Lessee provided, however, that interest shall not be payable on late charges incurred by Lessee nor on any amounts upon which late cb Lessee. 20. The of Essence. Time is of the essence. 21. Additional Rent. Any monetary obligations of Lessee to Lessor under the terms of this Lease shall be deemed to be rent. 22. Incorporation of Prlor Agreements; Amendments. This Lease contains all agreements of the parties with respect to any I herein. No prior agreement or understanding pertaining to any such matter shall be effective. This Lease may be modified in writil the parties in interest at the time of the modification. Except as otherwise stated in this Lease, Lessee hereby acknowledges th persons has made any oral or written warranties or representations to Lessee relative to the condition or use by Lessee of said Pre estate broker listed in Paragraph 15 hereof nor any cooperating brokeron thistransaction northe Lessororan.yemployeesorag acknowledges that Lessee assumes all responsibility regarding the Occupational Safety Health Act. the legal use and adaptabili, and the compliance thereof with all applicable laws and regulations in effect during the term of this Lease except as otherwisespc this Lease. 23. Notices. Any notice required or permitted to be given hereundershall be in writing and may be given by personal delivery01 and if given personally or by mail, shall be deemed sufficiently given if addressed to Lessee or to Lessor at the address noted belor the respective parties, as the case may be. Either party may by notice to the other specify a different address for notice purposes Lessee‘s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice purposes. A copy of all nc time hereafter designate by notice to Lessee. permitted to be given to Lessor hereunder shall be concurrently transmitted to such party or parties at such addresses as Lessor 24. Waivers. No waiver by Lessor or any provision hereof shall be deemed a waiver of any other provision hereof or of any subs Lessee of the same or any other provision. Lessor’s consent to, or approval of any act, shall not be deemed to render unnecessarl Lessor’s consent to or approval of any subsequent act by Lessee. The acceptance of rent hereunder by Lessor shall not be a waiver breach by Lessee of any provision hereof, otherthan the failure of Lessee to pay the particular rent so accepted, regardlessof Le: of such preceding breach at the time of acceptance of such rent. 25. Recording. Either Lessor or Lessee shall, upon request of the other, execute, acknowledge and deliver to the othe memorandum of this Lease for recording purposes. ’ purchaser in confidence.and shall be used only for the purposes herein set forth. 27. Cumulative Remedies. No remedy or election hereunder shall bedeemedexclusive but shall, whereverpossible, becumulat remedies at law or in equity. 28. Covenants and Conditions. Each provision of this Lease performable by Lessee shall be deemed both a covenant and a ( 29. Blndlng Effect; Choice of Law. Subject to any provisions hereof restricting assignment or subletting by Lessee and subject 1 of Paragraph 17, this Lease shall bind the parties, their personal representatives, successors and assigns. This Leaseshall be gove of the State wherein the Premises are located. 30. Subordlnatlon. (a) This Lease. at Lessor’s option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other h and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding such subordination, 1 security now or hereafter placed upon the real property of which the Premises are a part and to any and all advances made on the quiet possession of the Premises shall not be disturbed if Lessee is not in default and so long as Lesseeshall pay the rent and obse all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee or gro elect to have this Lease prior to the lien of its mortgage. deed of trust or ground lease, and shall givewritten notice thereof to Lessee be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of said of trust or ground lease or the date of recording thereof. of any mortgage, deed of trust or ground lease, as the case may be. Lessee’s failure to execute such documents within 10days after (b) Lessee agrees to execute any documents required to effectuate an attornment, asubordination orto make this Lease shall constitute a material default by Lessee hereunder, or, at Lessor’s option, Lessor shall execute such documents on behalf of Le attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint Lessor as Lessee’sattorney-in-fact and in Lessee’s stead, to execute such documents in accordance with this paragraph 30(b). 31. Attorney’s Fees. If either party or the broker named herein brings an action to enforce the terms hereof or declare rights prevailing party in any such action, on trial or appeal. shall be entitled to his reasonable attorney’s fees to be paid by the losing part court. The provisions of this paragraph shall inure to the benefit of the broker named herein who seeks to enforce a right hereur 32. Lessor’s Access. Lessor and Lessor’s agents shall have the right to enter the Premises at reasonable times for the purpose o same, showing the same to prospective purchasers, lenders, or lessees, and making such alterations, repairs, improvements or Premises or to the building of which they are a part as Lessor may deem necessary or desirable. Lessor may at any time place Premises any ordinary “For Sa1e”signs and Lessor may at any time during the last 120 days of the term hereof place on or about tt ordinary “For Lease” signs, all without rebate of rent or liability to Lessee. 33. Auctions. Lessee shall not conduct, nor permit to be conducted, either voluntarily or involuntarily, any auction upon the Pr first having obtained Lessor’s prior written consent. Notwithstanding anything to the contrary in this Lease, Lessor shall not I exercise any standard of reasonableness in determining whether to grant such consent. 34. Signs. Lessee shall not place any sign upon the Premises without Lessor’s prior written consent exceptthat Lessee shall without the prior permission of Lessor to place ordinary and usual for rent or sublet signs thereon. 35. Merger. The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, or a termination by Lessor, I merger, and shall, at the option of Lessor, terminate all or any existing subtenancies or may, at the option of Lessor, operate as ar Lessor of any or all of such subtenancies. 36. Consents. Except for paragraph 33 hereof, wherever in this Lease the consent of one party is required to an act of the other part shall not be unreasonably withheld. 37. Guarantor. In the event that there is a guarantor of this Lease, said guarantor shall have the same obligations as Lessee unc 38. QuletPossesslon. Upon Lessee paying the rent for the Premises and observing and performing all of the covenants, c provisions on Lessee‘s part to be observed and performed hereunder, Lessee shall have quiet possession of the Premises for the ent subject to all of the provisions of this Lease. The individualsexecuting this Lease on behalf of Lessor represent and warrant to Less fully authorized and legally capable of executing this Lease on behalf of Lessor and that such execution is binding upon all part ownership interest in the Premises. Lessor, or the right of first refusal to purchase’ Inltlels: GROSS -5- c . 0 0 nt that Lessee has any multiple options to extend or renew this Lease a later optio, new this Lease has been so exercised. 40. Muftipie Tenant Building. In the event that the Premisesare part of alarger building or group of buildings then Lessee cleanliness of the building and grounds. the parking of vebicles and the preservation of good order therein as well as for tht by, keep and observe all reasonable rules and regulations which Lessor may make from time to time for the managen occupants and tenants of the building. The violations of any such rules and regulations shall be deemed a material breach c 41. Security Measures. Lessee hereby acknowledges that the rental payable to Lessor hereunder does not include the c of Lessee, its agents and invitees from acts of third parties. other security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsi' 42. Easements. Lessor reserves to itself the right, from time to time, togrant such easements, rights and dedicationsthat LC or deslrable. and to cause the recordation of Parcel Maps and restrictions, so long as such easements, rights, dedications, M and failure to do so shall constitute a material breach of this Lease. not unreasonably interfere with the use of the Premises by Lessee. Lessee shall sign any of the aforementioned documents I 43. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of money to be paid by one part provisions hereof, the party against whom the obligation to pay the money is asserted shall have the right to make payme such payment shall not be regarded as a voluntary payment. and there shall survive the right on the part of said party to insti' such sum. If it shall be adjudged that there was no legal obligation on the part of said party to pay such sum or any part ther entitled to recover such sum or so much thereof as it was not legally required to pay under the provisions of this Lease. 44. Authority. If Lessee is a corporation, trust, or general or limited partnership. pach individual executing this Lease o partnership, Lessee shall, within thirty (30) days after execution of this Loase. deliver to Lessor evidence of such authority represents and warrants that he or she is duly authorized to execute and deliver this Leaseon behalf of said entity. If Lessee i! 45. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions sh; typewritten or handwritten provisions. 46. Addendum. Attached hereto is an addendum or addenda containing paragraphs part of this Lease. 47 through 48 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION C AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PAR7 THAT, AT THE TIME THIS LEASE IS EXECUTED.THETERMSOF THIS LEASE ARE COMMERCIALLY REASONABLE AN INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE PREMISES. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE ASS IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR H BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EF CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO: THE PARTIES SHALL RELY THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEAS The parties hereto have executed this Lease at the place on the dates speclfied imrnedlately adjacent to thelr respective a Executed at Be City of Carlsbad on BY Address BY "LESSOR" (Corporate sea Executed at Carlsbad Unified School Dist On BY Address BY "LESSEE' (Corporate sea For these forms write Or call the American Industrial Real Estate Association, 345 South Fiaueroa St. "1. Los Anaeles. CA E J D e (SWy Center Lease] L J LEASE ADDENDUM 47. Notwithstanding anything else contained in this Lease the contrary, Lessee shall have the right to terminate Lease at any time by giving thirty (30) days prior wrj notice to Lessor. In the event of such termination, I and all other sums payable by Lessee under the terms o this Lease shall be prorated as of the date of such termination, and any amounts owed by Lessor to Lessee Lessee to Lessor shall be due and payable thirty (30) following the date of such termination. 48. Lessee shall not have the right to hold over after the of the ten (10) year term of this Lease unless Lessee delivers to the City, within one hundred eighty (180) prior to the end of said term, written notice that it desires to continue this Lease on a month-to-month bas Fair Market Rental Value together with a one-time on11 sum payable as consideration for extension of this Lea a month-to-month basis in an amount equal to two percent (2%) of the sum of rent paid by Lessor to Less pursuant to the terms hereof during the ten (10) year For purposes of paragraph 48, "Fair Market Rental Value" shall be determined, as follows: (i> At least 180 days prior to the date ten years after commencement of this Lease ("Tenth Anniver Date"), Lessee and Lessor shall attempt to reach agree as to the Fair Market Rental Value. (ii) In the event that Lessee and Lessor are unable to agree upon a Fair Market Rental Value within period, then no later than the 150th day prior to Tent: Anniversary Date, Lessee and Lessor shall jointly attel to agree on the appointment of a real estate appraiser is a member of the American Institute of Real Estate Appraisers or any successor thereto (or in the event t: American Institute or Society of Real Estate Appraiser, any successor shall not then be in existence, a disinterested real estate appraiser having appropriate qualifications to appraise commercial real estate as sc forth immediately below), with at least ten (10) years professional experience in Southern California in appraising land and improvements similar to the leased premises. All appraisers selected pursuant to the provisions hereof shall.be impartial and unrelated, directly or indirectly, so far as employment of servicc is concerned, to any of the parties hereto, or their , 4 I a ;1 0 e d successors. The cost of the services performed by sucl appraiser shall be borne equally by the parties. The single appraiser jointly appointed by the parties shall determine the "Fair Market Rental Value" in the manner herein specified and shall render his or her appraisal within one hundred twenty (120) days after said apprais has been selected. (iii) Failing the joint action within the time specified in (b) above, Lessee and Lessor shall each wi an additional fifteen (15) days, separately at its own designate any appraiser meeting the qualifications stat in paragraph (ii) above. If two appraisers are appoint and they concur on the Fair Market Rental Value, the Fa Market Rental Value determined by them shall be the Fai Market Rental Value. If the appraisers do not concur, the difference between the respective higher and lower determinations of Fair Market Rental Value is an amount less than ten percent (10%) of the amount of the higher determination of the Fair Market Rental Value, the mean average of the two determinations shall be the Fair Mar Rental Value. The two appraisers shall render their respective appraisals within one hundred twenty (120) d after they have been selected. (iv) If the difference between the two deter- minations exceeds the amount specified above, the two appraisers shall jointly select a third appraiser meeti~ the qualifications set forth in paragraph (ii) above, a1 if they are unable to agree on a third appraiser either the parties to this Lease, by giving fifteen (15) days notice to the other party, may apply to the presiding jl of the Superior Court of San Diego County to select a tl appraiser who meets the qualifications set forth in paragraph (ii) above. The third appraiser, however selected, shall be a person who has not acted in any capacity for either party. Within fifteen (15) days frc the date of the selection of the third appraiser, all tl- appraisers shall meet and the first two appraisers shall present to the third appraiser all of their findings, dz and conclusions as to the Fair Market Rental Value. The third appraiser shall review all such findings, data and conclusions, and shall determine which of the two appraisers' respective determinations is the more reasonable determination. The third appraiser shall not permitted to make any other independent determination of Fair Market Rental Value, The appraiser's determination found by the third appraiser to be the most reasonable determination shall be the Fair Market Rental Value. Th third appraiser's conclusion shall be reached within one 3764r/ I t i - z , e @ W hundred twenty (120) days from the selection of the thi appraiser. The expenses related to the selection and services of the third appraiser shall be shared equally the District and the City. (VI In the event that the final determinatic Fair Market Rental Value occurs after the Tenth Anniver Date, the Fair Market Rental Value, as determined shall nonetheless commence concurrently with the first day of Lease term following the expiration of the initial ten year term. 3764r/ I E 'zgr t L'59C 7- b '99C t