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Home My WebLink AboutPalomar 910 Associates Ltd; 1983-07-13;PACIFIC SOUTHWEST REALTY SERVICES MORTGAGES SALES & EQUITY JOIN-I VENTURES MARKET EVALU~ON 707 1 CONVOY COURT SUITE 300 SAN DIEGO, CA 92111.1023 P.O. Box 85012 SAN DIEGO, CA 92186-5012 858-514-2100 858-514-2105 FAX May 29,2001 Ms. Ruth Fletcher, Purchasing Officer City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 RE: Palomar 9 10 Associates, Ltd. Tenant Estoppel Certificate Dear Ms. Fletcher: Enclosed you will find a copy of the Tenant Estoppel Certificate executed by Mr. Patchett on behalf of the City of Carlsbad in connection with the loan for the above referenced property. Your assistance in this matter was appreciated. Sincerely, Sharon Hering Administrative Assistant for Lindsey S. Nicholl Vice President & Principal SH Enclosure: (1) cc: Mr. Eli Perlman SAN DIEGO, CA Los ANGELES, CA ORANGE COUNTY, CA S4NTA BARRAHA, CA TENANT ESTOPPEL CERTIFICATE OF CITY OF CARLSBAD To: John Hancock Real Estate Finance, Inc. (“JHREF’) Re: Lease Between Palomar 910 Associates, Ltd. and City of Carlsbad for space located at 6351 Yarrow Drive, Suite C, San Diego, California 92009 (“Leased Premises”) JHREF Loan #3212726 Ladies and Gentlemen: For good and valuable consideration and as an inducement to the making of a secured loan by JHREF to Palomar 910 Associates, Ltd. covering property of which the Leased Premises are a part, the undersigned, as Tenant under that certain lease dated May 2, 1989, (“Lease”) made with Palomar 910 Associates, Ltd. as Landlord, hereby: 1. Certifies to JHREF, its successors and assigns that (a) the undersigned has entered into occupancy of the Leased Premises on October 1, 1989, and has accepted the same, which Leased Premises is acknowledged to contain rentable square feet; (b) the Lease is in full force and effect and has not been moditied, supplemented or amended in any way; (c) the Lease represents the entire agreement between the parties as to this leasing; (d) the term of the Lease commenced on October 1, 1989, and expires on September 30, 2003; (e) the Tenant is presently occupying the Leased Premises and is paying rent and additional rent in accordance with the terms of the Lease; (I‘) there are no options to extend the term except as follows: N/A; (g) there are no cancellation options except as follows: terminate with 180 days written notice; (h) there are no options to purchase the Leased Premises or any part thereof or any rights of first refusal except as follows: N/A; (i) all conditions under the Lease to be performed by the Landlord prerequisite to the,full effectiveness of the Lease have been satisfied; (i) all of the construction, repair and improvements contemplated by the Lease to be performed by Landlord have been performed by Landlord and have been completed satisfactorily in accordance with the terms of the Lease, and that no other construction, repair and improvements are contemplated under the Lease, except as follows: N/A; (k) there are no sums or credits due Tenant from Landlord under the Lease; (I) on this date there exists no factual circumstance or condition which, with notice or the lapse of time, or both, would give rise to any obligation on the part of Landlord, would constitute a default on the part of Landlord, would constitute a defense to the enforcement of the Lease by Landlord or an offset against the rents or other charges due the Landlord under the Lease, or would constitute the basis for a claim or cause of action against the Landlord; (m) to the best of Tenant’s knowledge, on this date there exists no factual circumstance or condition which, with notice or the lapse of time, or both, would constitute a default on the part of the Tenant under the Lease, and Tenant has not received notice from the Landlord pertaining to a default or alleged default under the Lease; (n) the base rental obligation under the Lease in effect is %43,548.00 per annum, the current monthly additional rental (CAM, other expense reimbursements) is $0.00; (0) the base and additional rental to has been paid, and no rental has been paid more than one (1) month in advance; (p) under the Lease, the Tenant is obligated to pay percentage rent expressed as % for defined sales in excess of $ (indicate N/A, if not applicable); (q) a security deposit in the amount of %3,050.00 was paid by Tenant to Landlord; (r) to the best of Tenant’s knowledge, the Tenant is not using the Leased Premises in violation of any applicable laws, rules, ordinances or regulations, including, but not limited to, any applicable environmental laws, rules or regulations (collectively “Laws”), there are no regulatory actions or other claims pending or threatened against the Tenant in connection with any such Laws, and Tenant has not received any notice from any third party or governmental authority alleging a violation of any such Laws; (s) there has not been filed by or against the Tenant nor, to the best knowledge and belief of Tenant, is there threatened against or contemplated by Tenant, a petition in bankruptcy, voluntary or otherwise, any assignment for the benefit of creditors, any petition seeking reorganization or arrangement under bankruptcy laws of the United States or of any state thereof, or any other action brought under said bankruptcy laws; and (t) the Tenant has not assigned or sublet the Leased Premises except as follows: N/A 2. Agrees that JHREF and its successors and assigns shall not (a) be bound by any prepayment by Tenant of more than one month’s installment of rent unless such prepayment is expressly required in the Lease or has been specifically approved in writing by JHREF, or (b) be liable or responsible for any security deposit or other sums which Tenant may have paid under the Lease unless such deposit or other sums have been physically delivered to JHREF. The Tenant acknowledges having read this Certificate and understands the certifications and representations made herein, and hereby executes this Certificate, which shall take effect as a sealed instrument, intending reliance hereon by JHREF, its successors and assigns. The undersigned signatory represents and warrants that he or she is duly authorized to execute this Certiticate on behalf of the Tenant. Exhibit 28 l/28/00 Recorded at request-of and when recorded mail to: STEPHENS, JONES, LA FEVER & SMITH 8CQ Wilshire Boulevard. UC, Angeles, California 90017 .. I . . DECLARATION OF &!&AkTS AND RESTRICTIONS' . . WHEREAS, CC&F PA-R-PROPERTIES, INC., a California corporation, ,("CC&F") is the owner of all that certain re8l property located in the City of Carlsbad, County of San Diago,' State of California, more particularly described in Exhibit .A., aztschcd hereto and incorporated herein by reference thcroto (tic ",Property"); and . WHEREAS, it is the desire and intention of CC6P to develop all of the Property-as an industrial center; and WHEREAS, it is the desire and intention of CC&F to ,imposg u_wn the Property mutually beneficial restrictions under-h g.aneral plan of improvement for the benefit of all of said Property, the improvements thereon and the future owners-thereof. . HOW, THEREFORE, CCLF bereby declares'that tha'Property is held and shall be held, conveyed, hypothecated, encumbered, lensed, rented, used, occupied and improved, subject to the following limitations, restrictions and covenants,.all .of which are declared and agreed to be in furtherance of a plan for the subdivision, improvement and sale of the Property and all of which arc established and agreed upon for the purpose of cnhanc- ing and perfecting the value, desirability and attractiveness of the Property and every part thereof. All of the limitations, covenants and restrictions shall run with the Property and shall be binding on all parties having or acquiring any right, title or / irterest in the Property made subject hereto or any part'thcrtof, a-.*: shall inure to the benefit of and bind each owner .thereof and * their respective successors in interest, and are imposed upon said Property, and each and every portion thereof'as a servitude in favor of said Property and each and every portion thereof as . the dominant tenement, or tenements, all as follows, to wftt A. DEFINITIONS. 1. l Approving.Agent. *shall mean,. in the following order of precedence: (a) - CC&F, so long as it.owns any interest in'the Property; or thereafter (b) CC&F, so long as CC&P Palcmar Businks Park; * a partnershi p, holds any interest in the Property; or. thereafter (cl Any corporationi association or tnmt controlled by CC&F or with which CC&F has been nergbd or consolidated or by which CC&F has been acquired, all as certified of record by CC&P (hereinafter called CC&F’s Sdccessor) so long as it owns any . 239 interest in the Property and provided it has been granted of record by CC&F the exclusive right to approve plans and grant variances as hereinafter set forth; or thereafter (d) Any association (whether or not incormrated) organized by a majority of the owners-of re- cord of the Property or parts thereof for the purlxse, among others, of- approving plans and granting variances as hereinafter.provided, in which membership is available to all such own- ers without charge, provided CC&F or CC&F's Successor has granted. to it of record the ex- clusive right to approve plans and grant vari- antes as hereinafter set forth which CC&F agrees will be done'.by it or CC&F's Successor before. CC&F or CC&F's Successor ceases to own any in- terest in the Property if written request there- for is received prior to that time. 2. "S i te " shall mean an area of land in the same ownership either shown as one lot on a recorded plan or, if not. so shown, described as the Site for one or more build- ings by the owner in a recorded instrument, whether or not in either case acquired at one time or previously so shown as more than one lot, or shown or described for the purpose of lease but not of conveyance as more than one lot. If an easement or easements over any portion or portions of a Site estaiblished.by recorded plan or recorded instrument then exist or exists or is or are reserved by CC&F for any pur,Dose whatsoever, the area of such portion or portions shall be included in computing the area of that Site. if subsequent to the establishment of a Site by recorded plan or re- corded instrument, any pqrtion or portions thereof are for railroad, street, highway, utility or public purpose taken by right of eminent domain,,or dee3 in lieu thereof, or dedicated or conveyed pursuant to reservation by CC&F, the area of such portion or por- tions-shall continue to be.included thereafter in computing the area of that Site. 3 .'. "Daclaration" shall mean this Declaration of Covenants and Restrictions, as it may from time to time be amended or supplemented. 4. "Restrictions" shall mean the covenants, conditions and restrictions set forth in the Declaration. a. XST.RICTIOXS- 1. No building shall be constructed upon any.Site:' - (a) within forty (40) feet measured at right angles from the nearest edge of 'Lhe right-of-way of any abutting street in existence at the time of such construction; . ' (b) . With less than the minimum side yards required by law, but even if permitted by law, with sideyards .which have an aggregate total of less than twenty-five (25). feet.. This restric- -2- .- . . , 240 . tion is iniended to permit the minimum sideyards rcyuire.d by law but-no less than an aggregate of twenty-five (25) feet when both sideyards are added together; . . (c) With exterior walls constructed other than of tilt-up concrete, masonry, or equal material; and the'construction of metal, prefabricated or butler-type buildings shall be prohibited; and (d) With a roof having a difference in elevation of more than three (3) feet: unless approved in the manner provided in Section C hereinbelow. 2 l There shall be maintained on each Site only buildings, paved walks, paved parking lots, paved driveways, lawn and landscaping arid natural growth in undisturbed areas, the construction and/or installation of which shall be subject to the approval of the Approving Agent in accor- .dance with the provisions of this Declaration; provided, however, that at-least two-thirds (2/3) of the.surface of the required set-back area from streets shall be maintained'in lawns and provided further that natural growth may remain on those portions of the Site side . . and rear yard areas which have not beendisturbed by the construction of improvements on the Site. No tree located within any Site having a trunk diameter of more than three (3) inches measured three feet dff,the ground shall be removed unless approved in writing by the Approving Agent. 3. There shall be maintained on each Site facilities for loading and unloading sufficient to serve the business conducted thereon without using adjacent street therefor. 4.. Adequate off-street parking shall be provided to accom- modate all parking needs for employee, visitor and corn-. pany vehicles on the Site. The intent of this provi- sion is to eliminate the need for any on-street park- . ing. Parking shall not be permitted between public street pavement and a property line or closer.than ten (10)'feet to a street property line. No use shalL be made of any Site which will attract parking in excess of the parking spaces then available thereon. Not less than three percent (3%) of the parking area of any Site .- shall contain landscaped islands.. 5. Each site shall be used only for manufacturing, pro- cessing, storage, wholesale, office, laboratory, pro- fessional and research and development activ,ities; and there shall not be permitted any junk or salvage yard. or any other use which will be offensive to the neigh- borhood by reason of odor, fumes,.dust, smoke, noise, glare, heat, sound, vibration, electro-mechanical dis- turbances, electro-magnetic disturbances, radiation, air or water pollution or will be hazardous by reason of danger of fire or explosion.. No use'of the Site shall be permitted which will result in the discharge of toxic matters into any sewer system serving the .Site. Retail uses shall be limited to sales of goods- and services reasonably required for the convenience of occupants within the Property such as restaurants, drug stores, barber and beauty shops? shoe repair shops, cleaners, post offices, banks and automobile .' service stations; and no such r,etail uses shall be undertaken unless and until the same shall have been approved in the manner hereinafter provided. -3- I . ‘* ! . / 6. The exterior of all structures and all walks; drive- Klys * lawns and landscaping on each Site shall be main- tained in good order, repair and condition; and all exterior painted surfaces shall be maintainod in first- class condition and shall be repainted at least once in every four (4) years. 7. Unless specifically approved in writing by the Approv- ing Agent, no materials, suppl.i.es or equipment shall be stored in any area on a Site.except inside a closed building or behind a solid visual barrier, constructed of material acceptable to the Approving Agent, which screens such areas so that the stored items are not visible to a person six (6) feet tall standing on any part of the neighboring property or public streets at an elevation no greater than the elevation of the base of the items being viewed. All roof-mounted mechanical equipment, utility installations, duct work, radar equip- ment, radio or television antenna or any other devices which project vertically more than l-1/2 feet above the roof or roof parapet shall be screened by a solid visual barrier which is detailed consistent with the building. 8. No buildings or structures shall be erected, or exterior structural alterations or additions made on any Site except pursuant to plans and specifications approved in the manner hereinafter ,provided as to landscaping and architectural conformity to an industrial center. The requirement of approval set forth in this paragraph is' in addition to, and not in substitution for any and all ,other restrictions herein contained. 9. All on-site utility transmission lines shall be. placed - underground. 10. No exterior signs of any type which normally would be visible from the neighboring properties or%public streets shall be placed or maintained on any Site-or 'building unless the same shall have-been first approved. in writing by the Approving Agent. Said approval shill not be unreasonably withheld provided that plans for the proposed sign or signs and the location of the same on the Site or building are submitted to the Approving Agent and provided that the design, type and location conform to any sign standards as may be then . generally established by the.Approving Agent and in effect with respect to the Property. C. APPROVALS, VARUANCES~AND WAIVERS. 1: So long as there is an Approving Agent it shall have the exclusive righ t to grant approvals required by the Restrictions and to waive or vary the Restrictions in particular respects whenever in its opinion such,waiver or variance will not be detrimental to the intent and purpose of this Declaration. . 2. After there ceases to be an Approving Agent the owners . of record-of the.land in.the Property abutting upon- - - -4- ’ 242 each Site shall have the exclusive right to grant ap- ;>rovals required by the Restrictions and the owners of record of two-thirds (2/3) in area of land in the Property within five hundred (500) feet of each Site (said area to be defined by a line parallel to the boundaries of each Site and located five hundred (500) feet therefrom) shall have the exclusive riyht to waive or vary the Restrictions in particular re- . spects whenever in their opinion such waiver or vari- ance will not be detrimental to the intent and purpose of this Declaration. 3. Any person having an interest in any Site may rely. upon any instrument of record signed by the Approving Agent or after there ceases to be an Approving Agent by the appropriate'owners referred to above purporting to grant an approval or to waive or vary the Restric- tions in particular respects, .- 4. Any construction, other than exterior signs, driveways, parking areas; grading, landscaping, fences and screens, completed for more than three (3) months shall be deemed approved, unless prior to the expiration of such Period a suit for enforcement has been commenced and notice thereof duly recorded. No owner of any Site shall be responsible except for violations occurring while owner. . 1. . D. ENFORCEWNT. 1 i All of the provisions herein contained shall run with the land and shall be enforceable at law and in equity. 2. So long as there is an Approving Agent it shall have - the exclusive right to enforce the provisions hereof, without liability for failure so to do,- except that 1 . each owner of record of land in the Property shall have the right to enforce the provisions hereof then applicable to any Site if the Approving Agent shall ' fail so to do within thirty (30) days after written request from any such owner. 3. After'there ceases to be an Approving Agent, each owner of record of land in the Property shall have the right to enforce the Restrictions then applicable to any Site without liability for failure so to do. 4. (a) In addition to the right to proceed in equity for the enforcement of the Restrictions, in the event that the Restrictions are violated or breached,. the Approving Agent may, without liability for failure so to do, enter upon the Site of said violation or breach and take.whatever action it . -,may deem necessary to abate and remove noncon- forming uses'or to otherwise effect compliance with - the Restrictions, at the expense of t!!e oIriner of said Site, provided that the Approving Agent shall have given to the owner of said Site at least sixty (60) days' written notice of its intention to do so and said owner of said Site shall have failed to correct said violation or breach; and in such case said owner of said Site shall be responsible . to reimburse the Approving Agent forthwith upon demand for all costs and expenses incurred in . -5- . connection therewith (Woncompliance C,Tenses") in accordance with the provisions.of subparagraph D.4.(b) hereinbelow. lb) In order.to provide for the implementation of the provisions of subparagraph D-4.(a) above, each owner of any Site within the Property by acceptance of a deed or other conveyance therefor, whether or not it shall be so expressed in any such deed or . other conveyance, is and shall be deemed to covenant and agree to pay to the Approving Agent an assess- ment for any Noncompliance Expenses incurred by the Approving Agent in connection with such owner's Site. (1) The Approving Agent.shall maintain accurate books and records reflecting any Noncompliance Expenses, and shall provide each owner of an affected Site a statement with respect thereto. Each affected owner shall pay any Noncompliance Expenses applicable to such owner's Site within 10 days following the receipt of such statement. If such statement is deposited in the United States nail in the State'of California, duly certified or registered with postage prepaid and addressed to the owner affected thereby at his Site, the same shall be deemed received by,&uch Owner 72 hours after such deposit. (2) (3) Any Noncompliance Expenses assessments, together with such interest thereon and costs of collection thereof as provided hereinbelow, shall be a, charge. on the land and shall be a continuing lien upon ' the Site against which.such assessments are made. The lien shall become effective upon recordation of a notice of claim of lien as provided herein. Tnis assessment, together with such interest and costs, 'shall also be the personal obligation of . the person or entity who is the owner of such Site at the time when the assessment, or any portion thereof, fell due and shall bind his heirs, devisees, personal representatives, successors and assigns. However, the personal obligation shall not pass to his successors in title unless expressly assumed by them. No owner may waive or otherwise escape personal liability for the assessment provided herein by nonuse or abandon- ment of his Site. If any Noncompliance Expenses assessment or any portion thereof is not paid within 10 days after the due date it shall bear interest from the date. of delinquency at the then legal rate, and, in' addition to all other legal and equitable rights or remedies, the Approving Agent may, at its op- tion, bring an action at law against the owner t;ho is personally obligated to pay the same, or, upon compliance with the notice provisions set forth hereinbelow, to foreclose the lien against the Site,.and there shall be added to the amount of such assessment or any portion thereof, the interest thereon! all costs and expenses, includ- ing reasonable attirney's fees, incurred by the -6- a4 Approving Agent in collecting the delinquent assessment, In lieu of judicially forcclos- ing the lien, the Approving Agent, at its option, may foreclose such lien by proceeding under a power of sale as provided.hereinbelow, such a power of sale being given ti the Approv- ing Agent as to each and every Site for the purpose of collecting qssessments. Each owner vests in the Approving Agen-t, its suc- cessors or assigns, the right and power to bring all actions of law or lien foreclosure against.such owner or other owners for pur- .poses of collecting delinquent assessments. No action shall be brought to foreclose the . lien, or to proceed under the power of sale, less than-thirty (30) days after the date that a notice of &lain of lien, executed by the Asproving Agent, is recorded with the San . Diego County Recorder, said notice stating . the amount claimed (which may include interest and cost of collection, including reasonable attorney's fees), a good and sufficient legal description of the Site being assessed, the name of the record owner or resuted owner thereof, and the name and address of the Apr>roving Agent as claimant. A copy of- said notice of claim shall be deposited in the - United States mail, certified or registered, and postage.prepaid, to the owner of the Site, Any such sale provided for above shall be con- ducted in accordance with Sections 2924, 29,24(b), and 2924(c) of the Civil Code of the State of California,. applicable to the exercise of powers of sale ii< mortgages and deeds of trust, or in any other manner permitted or provided by law. The Approving Agent shall have the power to bid on the Site at the foreclosure sale, and to acquire and hold, mortgage and convey the same. (6). Upon the timely curing of any default for which a notice of claim of lien was recorded by the Approving Agent, the Approving Agent is hereby authoriz'ed to file or record, as the case may be, an appropriate release of such notice, upon payment by the defaulting owner of a fee to be determined by the Approving Agent, but not to exceed Twenty-Five Dollars ($25.00), to cover the costs of preparing and filing.or recording such release together with the payment of such other costs, interest or fees as shall have been incurred. . (7) The assessment lien and the rights to fore- I closure and sale thereunder shall be in addi- tion to and not in substitution for all other rights and remedies which the Approving Agent 'and its successors and assigns may ,have here- under and by law. -7- - .- . . . . . . (cl (d) M (f) (9) (W :5. The and 245 (8) The lien of the Noncompliance Expenses asscss- ments provided for herein shall be subordinate to the lien of any deed of trust or.mortgage now or hereafter placed upon any of the Sites within the Property subj'ect to such assessments; provided, however, that such subordination shall apply only to the assessments which have become due and payable prior to a sale or transfer of . such Site pursuant to .a decree of foreclosure, or any other proceeding in lieu of foreclosure. Such sale or transfer shall not relieve such Site from.liability for any assessments there- after becoming due, nor from the lien of any such subsequent assessment. The Approving Agent.shall.have the right to prose- dute a proceeding at law or in equity against any person or persons who have violated or are attempt- ing to violate any of the Restrictions, to enjoin or prevent them from doing so, to-cause said vio- lation to be remedied and/or to recover damages for said violation. The result of every actiosor omission whereby the Restrictions are violated in whole or in part is hereby declared to be and to constitute a nuisance, and every remedy allowed by law or equity in nuis- ' ance.shall be available to the Approving Agen<: . In legal or equitable proceedings to enforce or .to restrain a violation of the Restrictions or any provisions hereof, the losing party or parties shall pay the attorneys' fees of the prevailing party or parties in such ar3unt as,may be fixed by the court in such proceedings. All remedies provided herein or at law or in equity shall be cumulative and'not exclusive. Failure by the Approving Agent to enforce the Re- strictions or any provision herein contained shall in no event be deemed a waiver of the right to do so thereafter. The Restrictions are enforceable to the extent not prohibited by applicable statute, ordinance, regulation or other law. Invalidation of any one of the Restrictions or any provision herein con- tained by judgment or Court order shall not affect any other Restriction or other provisions,. each of which shall remain in full force and , effecti. Restrictions shall continue to remain in ful1.forc.e effect at all times with respect to all the Prop- erty and each part thereof, now and hereafter made'sub- ject thereto (subject, however to the right to amend and repeal as provided for herein) for a term of thirty (.30) years from the date this Declaration is recorded, However, unless within one (1) year prior to the e-i- ration of said thirty (30) year term there shall be recorded an instrument conforming to the provisions of paragraph 6,hereinbelow directing the termination of -8- . 246 -. the Restrictions, the Restrictions as in effect im- mediately prior to the expiration date of said thirty (30) year term shall be continued automatically with- out any further notice for an additional period of five (5) years and thereafter for successive terms of five (5) years unless within one (1) year prior . to the expiration of any such five (5) year period . the RestrLctions are terminated.as set forth below .. in paragraph 6. 6. This Declaration, the Restrictions or any provision contained herein may be -terminated, extended, modi- fied or amended as to the whole Property or any portion thereof with the written consent of the owners of seventy-five percent (75%) of the Property based on the number of squa?e feet of the Property owned as . compared to the total number of square feet of the Property subject to.the Restrictions, with each owner receiving one vote for each square foot of Property owned; provided, however, that so long as'the Approving . Agent owns at least twenty-five percent (25%) of the Property subject to the RestrictIons or for a period -of fifteen (15) years from the effective date hereof, whichever period is longer, no such termination, ex- tension, modification or amendment shall.be effective without the written consent of the Approving Agent thereto. No such termination, extension, modification or amendment shall be effective until a proper instru- ment in writing has been executed and acknowledged and recorded in the County of San Diego. EXECUTED this ..:F/.. +----- -' . T .---CM; .r..<- r-c- .I - , 1974-. . / CC&F PAL,OlMAR PROPERTIES; INC. -9- - 247. * : . STATE OF CALIFO,XNIA ) : 4 '1' ss. COUNTY OF /:J .-;> ~ih6-‘;; ) : On ,y-& ,. ,i / :'> -7;. / . if before me,.the undersigned, a xotary' Public in,and for said State,. personally appeared s- -, <p,‘/:. :’ -,I . / -rL~J:=.d 44 'knotintometobethe .. . -. 3 .:_.lf I?/ /c .xtr i' 0 /t. CT President, and k ti/3(=A3i c -yT*G e&- I .*I known to me to be .+ _C/~.NS,'~: ~-,/F-Secretary of the corporation that executed the within Instrument, known to me to be the B 'persons who executed the within'instrument on behalf ok the " corporation therein named,. and acknowledged to me that such corporation executed the within instrument pursuant to its ', . by-laws or a resolution of its board of directors. . . . WITNESS my hand and officialLseal. .-\ . ” // *- Si.~?~,ture-.l...~?,;.: I .L _ J. .-i . yyhf-- --$f ;GI.I.;;:. .2--, ____ . . . I. . . . - . . , . a49 LEGAL.DESCRIPTION , That portion of Lot San Diego, "G" of Ranch0 Agua Hadionda!in the County of' State of California, according to Map thereof No. 823, filed in the Office of tie County Recorder of said County, described as follows: Beginning at the closing corner common .to Sections 22 and 23, Town&ip 12 South, Range 4 West, San Bernardino Meridian, according to United States Government Survey, in the South line of said Ranch0 Agua Hedionda; thence along said South line North 89O27'10" .West, 2613.56 feet to an intersection with the centerline of the 100.00 foot Right of Way described in deed to San Diego Gas h Electric Company, recorded April 15, 1954, in Book 5205, Page 420, of Official Records; thence.along the centerline of said Right qf Way North 42"38'40" West (Deed = North 43OO8'53" West), 460.39 . feet and North 39OO1'39" West (Deed = North 39O32'53" West), 2562.03 feet to an intersection with -the centerline of the 100.00 foot easement, County Road Survey 1534 (Palomar Airport Road), filed in the Office of the County Engineer of said County, described in deed to the County of San Diego recorded-February 16, 1960, as Document No. 31696, Series 1, Book 1960, Official Records said intersection being a.point in the arc of a 1200.00 foot radius curve concave Southwesterly to which a radial line bears North 27"27'50" East; thence leaving said 100.00 foot Right of Way along the centerline of said Road Survey 1534 Southeasterly along the arc Of said curve through a central angle of 23O30'05" a distance of 492.21 feet; thence tangent to said curve South 39°02D05N East, 331.54 feet (Road Survey 1534 = South 39"02'30" East, 391.51 feet) to the beginning of a tangent 1200.00 foot radius curve concave Northeasterly; thence Southeasterly along the arc of said curve through a central angle of 49OO1'43" a distance of 1026'.85 feet; thence tangent to said curve South 88OO3'48" East, 1722.22 feet (Road Survey 1534 = South 88OO4'08" East, 1721.98 Feet) to the ' beginning of a tangent 1000.00 fool radius curve concave North-. westerly; thence Northeasterly.along the arc of said curve through. a central angle of 49O55'44" a distance of 871.52 feet; thence' tangent to said curve North 42"00'08" East, 1893.60 feet to an intersection with the most Southerly line of the land designated - "Palomar Airport" on record of Survey Map No. 6493, filed in the Office. of the County Recorder of-said County; thence leaving said centerline along the boundary of said 'Palomar Airport" as shown on said Record of Survey Map No. 6493, North 79"41'24" . East, 128.89 feet to an intersection with the Southeasterly line of San Diego County Road Survey 1534-66, on file in the Office of the County Engineer of said County, said intersection. being a point in the arc of a nontangent 1937.00 foot radius curve concave Southeasterly to which a radial line bears North 40°40830" West; thence leaving said most Southerly line Northeasterly along the Southeasterly line of said Road,Survey 1534-66 and the arc of said-curve through a central angle of 4*34'22" a distance of 154.59 feet; thence tangent to said curve. North 53O53'52' East, 981.88 feet to an intersection with the Southerly boundary of the above mentioned "Palomar Airport"; thence leaving said Southeasterly line of Road Survey 1534-66 along the boundary of said "Palomar Airport", North 79°42'00" East, 1016.14 feet to the Northwest corner of land conveyed to Systems Capitol Corporation by deed recorded November 17, 1972, * as Document No. 309096 of Official Records; thence leaving the ' . , . ,. . . . - 249. boundary of said Palomar Airport.along the boundary of said Systems Capitol land the following courses South 39O38'41" West, 361.33 feet; thence South 24O47'36" West, 307.33 feet; thence South 13°10v59" West, 268.66 feet; thence South 0'35'14" West, 687.81 feat;. thence South 81°51'05'~ East, 358.00 feet to the beginning of a tangent 500.00 foot radius curve concave Northerly; thence Easterly along the arc of said curve through a central angle of 3OO45'38" a distance of 268.44 feet; thence tangent to said curve North 67O23'17" East, 573.06 feet to the beginning of a tangent .500.00 foot radius curve concave Southerly; thence Easterly along the~arc of said curve through a central angle of 30°45'38* a distance of 268.44 feet; thence tangent to said curve South 81O51'05" East; 38.00 feet to the Southwest corner of said Systems Capitol land; thence leaving said Systems Capitol land, South 81O51'05" East, 59.67:feet to an intersection with the East line of the aforementioned Lot "G'; thence along the East line of said Lot "G" South 8"07'51' West, 1443.35 feet to corner No. 2 as shown on the aforementioned Record of Survey-Map No. 6493; thence continuing along said East line South 27O21'08' West, 1319.98 feet to corner No. 1 of said Lot "G'.as shown on said Record of Survey No. 6493; thence along the South line,of said . Lot and said Ranch0 Agua Hedionda, North 89"26'40' West, 3052.63 feet to the POINT OF BEGINNING.. .' EXCEPTING from the above described parcel of land that portion 'thereof conveyed to the County of San Diego by deed recorded : March 12, 1970 at File/Page 44690, Official Records, of-said- County. * .. . . u . . . *, . ‘. ; : I . __. . ..- I . . - . . . . .,. EXHIBIT "A" -Page 2 of 2 . . - 250 . PARCEL "A" That portion of Lot "G" of Ranch0 Agua Hedionda'in the County of San Diego, State of California,according to Map thereof No. 823, filed in the Office of the County Recorder.of said County, des- cribed as follows: .' . Eeginning at the closing corner common to Sections 2i and 23, * Township 12 South, Range 4 West, San Bernardino Meridian, ac- cording to United States Government Survey, in the South line of said Ranch0 Agua Hedionda; thence along said South line North 83O 27' 10" Vest 2613.56 .feet to an intersection with the center- . line of the 100.00 foot Right of Way'.described in deed.to San Dlego Gas & Electric Company, recorded April 15, 1954, in Book 5205, Page 420, of Official Records; thence along the centerline _ of said Right of F?ay North 420 38' 40" West(Deed=North 43O 08' . 53" West), 460.39'feet and North 39" 01' .39".West(Deed=North 39O 32' 53" west) , 2562.03 feet to an intersection with the center- line of the 100-00 foot easement, County Road Survey 1534(Palomsr AZxport Road), filed in the Office of the County Engineer of said County, described in deed to the County of San Diego recorded.. _ February 16, 1960, as Document No. 31696, Series 1. Book 1960,. Official Records;said intersection being a point in the arc of a 1200.00 Zoot radius curve concave Southwesterly to which a radial line bears North 27O 27' 50" East; thence leaving said 100.00 foot: l . Right of Way along the centerline of said Road Survey 1534 South- easterly along the arc of said curve through a central angle of 23O-30' 05" g distance 'of 492.21 feet; thence tangent to said . ". curve.South 39O. 02' 05" East, 391.54 feet(Road Survey 1534=South- 39O 02' 30" East, 391.51 feet)to the beginning of a tangent LZOO-- :' 00 foot radius curve.concave Northeasterly; thence-Southeasterly along the arc of said curve through a central angle of 49O 01' 43"' a distance of 1026-85 feet; thence tangent to said curve - - South 88" 03' .48" East, 1722.-22 feet (Road Survey 1534=South 88" 04' 08" East, 1721.98 feet) to the beginning of a'tangent lOOO-00. footradius curve concave Northwesterly; thence Northeasterly-". along the arc of said curve through a central angle of 499 56‘ 04". a distance of 871-52 feet; thence tangent to said curve North 42O 00' 08" East, 1893.60 feet to an inter section With the most South- erly line of the .land designated ".Palomar Airport" on-Record of - Survey ETap No. 6493, filed in the Office of the County Recorder of said County; thence leaving said centerline along-the bound- - ary of said "Palonar Airport" as shown on said Record of Survey l-lap No. 6493, North 79" 41' 2.4" East, 128,89‘feet to an inter- ssction with the Southeasterly 1Lne of San Diego County Road Survey 1534-66, on file in the Office of the County Engineer of- said County, said intersection being a point in the arc of a nontangent 1937.00 foo t radius curve concave Southeasterly to which - . EXEIIBIT '?A" PAGE 1 of 3 -.. . i I a radial line bears North 40° 40' 30" West; thence leaving said most Southerly line Northeasterly along the Southeasterly line of said Road Survey 1534-66 and the arc of said curve through a central angle of 4O 34' 22" a distance of 154-59 feet; thence tangent to said curve North 53“ 53' 52" East, 737.13 feet; thence leaving said Southeasterly line North'.'55O 01' 13" East 255;14 feet to an intersection with the Southerly boundary of the above * m?ntioned "Palomar Airport"; thence along said Southerly bound- ary North 79O 42' 00" East, 1004.64 feet to the Northwest cor- ner of land conveyed to Systems Capita.1 Corporation by deed re- corded November 17, 1972 as Document No, 309096 of Official Re- . cords; thence leaving said boundary of said "Palomar Airport' . .. along the bounda,ry of said Systems Capital land the following courses;South 39O 38' 41" West, 361-33 .feet, thence South 24O 47' 36" West, 307.33 feet; thence South 13O 10' 59" West, 268-66 feet; thence South O" 35' 14" West 687-81 feet;-‘thence South'81° 51' 05" East 358.00 feet to the beginning of a tangent 500.00 foot radius curve concave Northerly; thence Easterly along the arc of said curve through a central angle of 30" 45' 38" a dis- . tance of 268.44 feet; thence tangentto said curve North. 67O 23' ': 17" East, 573,06 feet to the beginning of a tangent 500.00 foot radius curve concave.Southerly; thence Easterly along the arc of said curve through a central angle of 30" 45' 38" a distance of 268-44 feet; thence tangent to said curge South 81" 51' 05" East, 38.00 feet to the Southwest corner of said Systems Capi- . - ta1 land and the'% bkkterly line of County of San Diego Road.Survdy 1800-l on file in the Office of the County Engineer of said . County; thence leaving said Systems Capital land along said . T;esterly line of'Road Survey 1800-l(E1 Camino Real) South 8" 08' 55" West, 975.69 feet to the beginning of a tangent 1755-00 foot radius curve concave Northwesterly; thence Southwesterly along the arc of said curve through-a central angle of 28O 54' _ 35" a distance of 885-52 feet; thence tangent to said curve South 37* 03' 30" West, 1042.08 feet to an intersection with the above mentioned South line of Ranch0 Agua Hedionda; thence leaving said Road Survey 1800-l along'said South line North 89O -1 26' 40" West, 2701.13 feet to the Point of Beginning. : Said Parcel of land contains 337;739Acres.- . . - _ . . -. . EXIiILEIf "A" PFGE 2 of 3 . . . .- _ _ . . PARCEL "B" . . That portion of Lot "G" of &he Ranch0 Agua Hedionda in the County of San Diego, State of California, according to Map thereof NO- 823 filed in the Office of the Coucty Recorder . -of said County, described as follows: . . Commencing at the closing corner common to Sections 22 arid m~V: . 23, .Township &2,South,Range 4 West, San Bernard+no Meridian, according to Ul'ited States Goverment Survey, in the South line of said Rancho; thence along said South line South 89O 26' 40 " East, 3052.63 feet to Corner No.*& of said Lot "G" and the True Point of Beginning; thence retracing North 89O.26' .40". ?92st, 239.54 feet to an intersection with' the Southeasterly 152 of County of San Diego Road Survey 1800-1, on file in the Office of the County Engineer of said County; thence leaving . said South line along the Southeasterly line of said Road Sur-' vey 1800-l(E1 Cmino Real)North 37O 03' 30" East, 975.48 feet to the beginning of a tangent 1845.00 foot radi'ua cutie concave Northwesterly; thence Northeasterly a.long the arc of said cume through a central angle of 18" 34'- 36" a distance of 598.19 feet to an intersection with the East line of said Lot "G", a radial line to said intersection bears South 71° 31' '06" . _ East; thence leaving said Southeasterly line along said East - line South 8O 07' 51" West, 136.73 feet to Corner No-2 of said Lot "G"; thence continuing along said East line South 27O 21' 08" West, 1319.98 feet to the True point of Beginning, --_ Said-parcel of land contains .2.998 Acres; . . - -1 ._ : .I. .- _ . . . - . . - . . : l E,XHIBIT "A" . - T’AGE 3,of 3 . . . c - -- t I , .* , t : ! I! I ’ -ene v“-.. . Compenv. :fazlBDbn~, Trust -* .-A/ _#......” \ . ;2. . . Mm RECORMD RrrURW ln: city of carlrbd 1200 Ela Awnu. Carlshd, C~llfm(r %OfJB --faRa JUN I llor AH’// xft:w nrtnn-: SlN! I! II ,rl;N” 1 I, t1t: I l 5k r”” rtC4laOfC (Sk. hovd thie lilirfo~order'e Ume) END)IENT !D2 DECIAMTION OF COVENANTS *ND RESTRICPIONS . THIS AMENDMENT im ude and executed &s of the J&&f' day of 12 9 , 1977 by Falomar Airport Buainems Park, a Califom a general partnarahip (-FABF'): WITNESSETHI f *. I' WHEBEAS, a Declaration of Covenants and Remtrictionn. _ , I (the 'Declaration*3 ua# recorded October-l, 1974-•t.File/Fage L ._ . .', No. 71-263097. Book 1974, Official Racorde of Sen Dirgo i County, California covering certain reai property in the . ',County of San Diego. State of California. mre particularly described.therein (the 'Froperty'lr and WDXLEAS, the Declaration mubjecte the Property to mutually beneficial reetrictionm under a general plan of improvement for the benefit of the Property, the improvam6nta thereon and future owners thereof1 and WHEREAS, PABP owns seventy-five percent (75s) of the Property based upon the number of square feet of the Property . owned by FABP ee compared to the total number of square feet within the propertyr and WHEREAS, PABP deeire. to amend the ~claretion in l ccordance with Paragmph 0.6. thereof in order to add the city of Catls z d l 8 an l ntity'vhich will exercise oontrol over varlancem to the restrictions contained within the Derlaration# NW, THEREPORE, PABP hereby amende the Declaretim as follows: . * t . . . . , i . .i . . -.-. - - -. : . .* ++ _. .,I.;+ . t : I I . f I j ’ , I 1 1 1 j I f I I I / I 1. Thm follouin9 ie hereby added to the Declaration l e Subparagraph A.S. thormofr 95. 'The City' l hell mean the City of Cerlabed, County of Our Diopo, State of California.' 2. The followin ie hereby added to the Decleretion as SubparapraphX.5. theroof: ‘S. Ilotwithetending anything to the contrery con- teined in this Paragraph ‘C., no waiver or vari- ance of tha restrictions ahall bo effective until euch time ee the Cftv bee been Dmvided with l copy of l detailed v~rianccreq~eet, delivered by rogimtered mil, return receipt requested, setting forth the intentlone and masons in rea- poet of the proposed variance and until the City has ton (10) deyewithin which to advim thm Approving Agent that it diupproves l uch varixnce, provided thet euch dieapproval l hell be l xerciwd in good faith by the City. The Appmvlnp Agent / shall not prant a variance herounder until either .' I x. the tan 110) doya referrod to abovo bee peeeed * without cmnt fra the City in writlog or uotll I the City has delivered to the ApprvVing Agent a 1 urittmn approval of tbo varia.nchm ‘i 3. With regird tb Subparagraph 0.24 of tbo 1 Declaretion, the fbllowing worde ore hereby anserted at \\ the mnd of thm third line thmrooft *the Citi md/or’r and et the end of said l ubparoproph, the words *or the City. arm her& ad&d tharoto. . 4. With regard to Subparagraph 0.3. of the Dechre- tfon, the followlnp words ore hereby iworted following th0 word ‘Approving Agent. in line 1 thereoil *the City or.. s. With ropard to Subperagreph D.6. of thm Declare- don, the following lanpuego 1s harmby inmerted follouinp t.hO . word Vhoroto* in the fourth llno frm the botta Of *aid l ubparegrephc 'provided, houowr, thet no l uch tominetion, l xteneion, modification or l wndment l hall be 'Y l ctivo withoutrthe written consent of tha C y themto: 0 -2- “. . . I ,$ f 2 ’ Iu 9 ’ f i 7, . i ! . , /j ! , tb ’ . . ,’ c . (.. ‘. . I’ l ._ . .‘. : .I. ‘I *; .i *:,.: ’ s-* . ..& --.-. .-. . . - -- . 662 IN WITNESS WREREO?, this Aawndatnt to Daclaration of Covenente end Restrictlone ie executed l e of the data firat above written. PAUllUR AIRPORT BUSINESS PARX By1 NB-PALONAR, INC., a general partner i !: It 1 : ! ! i i i BY;.-- -- STATE O? CALIPORNU 1 )SS. 1977, befoie me, the undersigned, mant on behalf of the corporation therein named, said cor- // -poration being known to me to ba one of the partners of PALO- MAR AIRPORT BUSINESS PAM, the partnership that executed the , within Instrument-and l cknwledged to ma that such corpora- , tion executed the tiitbin Inst-nt as such partner and that such partnership executed thm aaao. ‘r and’ official seal. ,\ i 62 "~~~$f!p"? -'-&-, nu;t K. rww , .* ..a,... ..,,'l ‘1 . %.a ,,I.: ,. "ll . . 7 101 ..,t,,, cc. .'. 'I hcu.m."mhw,E", 'It, 1 WIYU.IRhWUUCW.-il#N . : : ! ! AGRZED To AND APPROVED TU1.s p7aDAr or w 1g77 Tttt CITY O? CARLSMD By.- . Itm Mayor It . . .“. L. ,. ,.. tMal m i!GX!%- SrAn! OF CA, lFonNu axJhvoP.JwL!?w!J-- -._ 1 663 .-- =. h. 5-17-77 _ kkmr.&+m&d.lNmwhukkY1bd4 I -.-,w Rokrt C, Pram*. I Lmbrablk MYOR -~rLk Dcpty city cii~~~rak~~ --- x.-chRDINS8-.- d * cwpcn,a Ito, .- 11 .*L* ,nr.nrL ~.O"MbIkpra.~*-IkrllLi ,"nnrml sm bihll d ,k rnpcauh Ikrrh "4. d r,mwH~ ID mu ,Lu ul, arpa9lim *Iwad w "HkuNnm~wLhlnr~-d SMEI~.AD.TARWI WShCW4dlhoon 1 I! I . 4 . c- . . . P : . -.- ._ - --. ----c- --‘* 7 -5’ 1.3347 . . - w.marily~4-m ; niDufc1 u 1 mm4mRwaa~lluF * 1 Ike31 SsM74 1, uncul atCOaDs =cLAnk?10* or aummmNT& UN~gW.t&UlL ,.olwRIFnMDlMpIcTlcu8 rrcDabtr : . __. * IS.00 *BI(IIAI,lxrr~?AKuwt PmFsRTlx8. INC., a cdifo=i~ -wr~tion# mmu);' pawioluly romrdod cutain cove-t* N :~.~ictiuamonpmpartydwuribeOioodooumsa trvoordrd- Octoberl, 1¶74. A8 ruo/hq. lo. 74-363B97, . oirioiml koords in ttn offion of t& -r&r of t& county of San DiWor state or califomia; md , -, mhu bu reoorbd A rind 8ubdivioioo nap w A portion of 8aiA propsrtyr aha re~trictiow 0 - .' lotoofuid?imalaap. / NOW,-,Owoudeoluw that the follairq rm8- tr&tiona are plrcdl om tin bmlw. dowribod property for fnrthu~ ._ acoo of a p&m Of NbdiriBiao, ‘impwvwMtMdw&Aaaof . eabancing aa&~fecthq tba value, desirability and l tt.raotiw- wmm of the dewribhd property and every put tbueof. Lot0 1, 2, 3, 4, 11 and 13 of carlabad Trmt No. 73-49, CC L r Palm Airport Buaknw Puk No. 1, irl th city of Carl&ad, cmlnty of aan Diego, It&e of tiliforaia, l ocordhg to Uap thuaoL 9to.qP.r~ filae in tb oifia or the County Nmoordor of hn Dieqo County, WUfornia, ’ un XAvWM~ 31, /fl4,, 1. IIo builC*‘oballkoautructd OtblOU 3,4 oa 11 of 8aid traat unlom Uu 0mnrof th0 l0t up0m rhloh tha buildinq 10 to be cowtrwt86 bw applied with, or aqrud in a nmor utiofaeory ta the’city to mly with the r equirawta for that putidu lot of tb8 City of carlebad for Lnatallatian of l .rwt 1 llqlm Dot oloau tkaa 100 fee, rrd d&ualk~, liqhto ad walk8 ! w k AdjMent to 81 c aAilwnnl. - -I’ . ‘_ ,. - t@ , ’ .I 2’ , - :, ; Y.-I .d -.- -Y&m -m-w “m- II- , ;. ‘. -- 1. ; . . .*- l ’ •CuPt~lo totllo city fo~oaplyi&* tb roqokwnu for tba putimlu lot of tbm City of carl*bad for iauallatia of mtmt 3. lbu rutriotl0a.m arm enfommablo 8t 18~ or in WtY by fh Ouur mo long l it ova8 my inter&t h pn Tract of UtLah tlla m l&s &rB . put. .*.’ : .. ‘, .- ‘i 1. *ho rutrictiono oat forth brain s&l1 3mo bo a.., mfo+ibl~ kiy tba.city of carl8hd if tb8 lot rwtr~cld ia i f .i ,v t b. Tba a&m rutrictionm dial1 run with Wo land an4:. ; . l lmll bb. bln&<oo all part& having or l quiriog any‘ right, >>i’, tith, 0; intorut in ttm ducrikd lands or any part tbumf ,” :, 3; 6. Tin rootrlctio0o &all oantUlw +a romun &) Ml i' -1 fore0 mad dfut with raspoot to tb,lop 8bom 4~0~ibd for a : ruordd. : ‘.; I omzmr, .,. ?mPURxtB* mc.. >,1 ; : ., i ..: ( ssrJ ,;iiy, t - .., ,.. ,; ‘.. >. *. 3 ;i;:. ’ . . . ,; :;‘!= ..c. . . - *, i . c’ : . . . I . -.,. l ..; .i u-r zz!E# am--- , _ .. : _ -I I’.. 1 * 2. . b ,‘I’ 1 - _ ’ . .i; , ‘; ., :,. 7 ~’ 2.; .Vjj ., 2 .:‘. . >. ;i $+> ‘.;f’i; 1; ; Is I --- +--- . :’ .I ,-1~ i.z$i*,‘&;.:’ -. 5%. 7’ . .: f ;-‘r.:: . .i$$jyf:, IL ,‘;. ~ $ ;’ . ; -:sig , . . 1. -.I L, .< *> ‘. ., ft.;* yj; :’ ’ -- \ m . P l . a?- , -. STATE o? cALxropYu ) 1 .a. county of--- ) ontuB\Pthd40f ._ I*rdar , 1974, h+o- -* the un&rmignad, g oot.aZy +iO in Said Stab* pdrgdY appear*& tYtlr1e ,lLncuntowtok the vita Pruiuubt, aad-,~pbbsR , kncuntortokLh~~rirtrrt ~re~~0f tb oorporati= thAt.ruou&tlmrtthinLutrPvntolrk~lf oftboorpor*- thudn nd, and l knodmdgd to mo tb4t l ch cowcraW l ucutou the within ins- t puuuubt to its my-lam or . ruolution of fU board of diroctarm. ‘. : I ‘?. :’ ;- : :,., 4 1 - c-. ;. . . :., \, -; ! ’ .:. _ t:.. * (. ., . -. :-: ‘. _- :. i I ‘.. a ._ . * _ ,- . . -7 r’ . . L I i * /. -.. : I . . . . ..* f -j’. ,, : . , .3 ,*; i : .-+a ‘ ’ I” ) 1, : ” L. . ; ‘- . ‘I. . - ’ (- . . ** I’ l Th? fcrmn:nq fm+wm.nt k . 6p. km Wd cw CQW - . . . of th. o::+inl~u.rJrd on... ..-.. .:.I l s Dau,,,ent NQ_~ A@. ,,*-::,:::::: pag. ___.._...._.._._.__ _._._. of off:ei,l~n*cadr .Tw ttw Offic* of ‘. RECORDING REQUESTED BY - AND WHEN RECDRDED RLTIlRLs TOI O’Melveny l Kyerr nn 611 Wert Sixth Street Lo8 Angeles, Celifornie 90017 JUl*t uom . 0*P*L w Attention1 Lavrence ireblo, Ksq. bi2IZisa . . .- AblKN&EWT O? D-TION’OT : _- COVENANTS AND RESTRICTIONS ARD APPDIWZXENT O? APPRDVIRG AGENT TRIS UIENDHBRT in made and umutod as of the /K day of Imbnury, 1977, by cc&I PALOUR PROPERTIES, INC.. l California corporation I'CCb?, Inc.*), and by CeL? PAX4nhR AIRPORT BUSINESS PARK, A California 9eneral pertnuahip (VC&F P.lomar=)t UREREAS, a Declaration of Coveabata end Rmetrictione (thk 'Declaration") vas rocorded October 1, 1974, Roccrdu’a bile No. 74-263697, O$ficial Rocorda of San Die90 County, tCalfforaia, covetin certein real prcpert x in the Ccuaty of .San Dimgo, State of California, more part cuhrly dualbed +hereia (the 'Property'); iad WKERKAB.' CC&I Palomar ovns l vanty-firn percent (75W of .the Pmputy bud od the numhar of squarm fme+ of ths Property ovnd by CC&P Palomer u compared tD thb loti nuabu of square imet vitbin all of the Prcputyr ead WKERKA.9, CCLF, Inc. is th0 'ApptoVin9 Agent0 undu the Declaration, as aaid tars is dafimd in Pbrbgraph A.(l) of the Declaration; end WiERus, CC&F, Inc. & CCbI Palomar deslro to amend the Declara+ion in l ccordbnce with Parbgrbph 0.6. theroof fn order +o appoint a au Approving Agaatr . NOW THERLFORL, CC&l, Inc. and CCbP Pelomer hereby amoad the Decluaeioa as follow: 1. Paragraphs A.1. (aI, (b) urd (c) arm del&ed in their entirety, and the following hIIgUa9e i8 l bstituted U . l new Paragraph A.l.(eJr ^ '(a) CC&I PAX&MAR AIRPORT BUSIRESS PARR. l California general parenmrship, or irs sucoesaors and aasignr appoinfod u A??Provin9 Agent by a recorded documant.~ 2. A.l.lb). Para$aph A.l.(dl $r=nmbued aI Puasiraph : ' Kxhibit 15 . ( :- ___._ . I . . i 3. AS~CI~ from the tovisions met forth heroin. the terms and provisions of thm Doctuation shall continue to bo in full form and rffect, . . . 1 II WITNESS UREREOT. this AP*ndmant is uacutmd l s of the WY and you firat &ova written. . . . . CCL? PALWAR AIRPORT BUSItGSS ?ARX. . . 8 9umnl putnorship Byl CCb? PALOHM , 8 Putnusblp, 8 Putnu BY ecu 0ALoH.u PROPIRTIZS, IX.,. l .CrlTf0nx.h corporation, l Putnes x - -- -._ --. . . . -. .-. . - r i ‘11 !, il’ l O I c I ’ M ’ ’ a I , w ; I. , cp 3 , 2. * * i --?- :! ~- /4d,WJr WW,.-C.C. r - -- -L- - -- e---u J --. I % -s . : _. --I - .c m :, . I’ . v;r: . . .,_I ..’ I ., ,, *!?’ ; x$$; 5. ,” ‘. .: - -*. l ” ( - a .A ‘a - -.-. / SThTE OF CALIFORNIA 1 .~eumcuted the vithin inkument~'lnd known to ma to be tha paraoni who uacutd thm within instrument on behalf 6f said corporationr said corporation baing known to m to bo onm of tha partners of CC&? PALoK&R, the gmnoral partnership that executed tha vithin instrummt and known to PO to ba ths corporation which l xscutd tha within instrumnt on behalf of said partnarshipt CCL? PALOXAR being known to w to be a gmeral putner of CC&F PALOii AIRPORT BUSINESS PARK, thm gonoral putmrxhip that urcnted the within instrumant. and acknovlod~ed f~.pa that CCL? PALCUAR l xecutcd the aamm ax such partner and that such partnership u~cutad the same. Witaeas my hand and official saa1.m ipTz or CuIFoRblU 1 d - ) 58. CduwTY OF Ias ANGELES )’ undcrxianed. -that l x~cuted th persons vho urwzuted the within Instruzmat on khalf of the corporation therein named, and acknowledged to ~a that 8och corporation uecutod the within inatrwmnt prsuant to iU by-law or a resolution of ita board of girector8. WITNESS my hand and official l oal. A. 1,’ 1 4 I to i . a i I! I 6 ____.--- .- - ‘. ‘. ‘, ;: . . <lJ - c - ,. ,’ . I Exhibit "A" -w--a.rw...m.n --"ea.- - I__- ."-lYP-lS-.C,-9Z---*.X- --w2ca.-.uLTI l__.__._l___ ____ ..__-_.________. --_ .---.. _--_--_- ..--.-I_-_ --l__- _~~-‘~~-~~~~~~~-~~~~-~~~ -- ---- ^___.- _____ . - PALOMAR 910 - BERNARD W. GILMORE Lessor . . . . . . . . . . . . - . . . . . -. ..- . . . . ..C. - ..*.. . . ....l..-C...,... THE CITY OF CARLSBAD Lessee . . . .._._. . . . . .._....... . . . . . . ..:...._.._._.........,,..., . . . . . . . . . . . 0 June 25, 1980 nnh?iimof ,..............,.. _........................................................~.....,..... A. - nr3-1~~~ T~~nsrs. Exr~r&. TABLE OF Ccwr%-rs, ~EMISU, ~ow.fox h3.s. 1. Dcfi~wtl l’enm. . Eac11 referencr in this Ixase to any of the followring titles shall incorporate the data stated for that title: Other terms are as defined in the Lease. Landlord:. PALOMAR 910 - BERNARD W. GILMORE ._.... . . . . . .._.. _......_...... ._................... . . . . . a . . . . . . . . . . . . . . . . . .._....._..._...........__.__..._....._................ Tenant: THE CITY OF CARLSBAD . . . . . . . . .._.._ ._ ._..... .., . . . __...._.:._..._....._..__... .‘. . 3 . . . _._.___‘... ..,.. . .._.... . ...*.. . . . . . . . . . .._._.._.._.._........... Building Location: Street Address: 6351 Yarrow Dr. ,' Suite D . city: Carlsbad, Ca County: San Diego State: California Tenant’s Floor Space:. Approximately 5,760 s.f. . Total Rentable Floor Space: Approximate11 42,480 k.f. Term: 1 . years. with option to renew for I yr/with COL -. Fi:ixed R&-,t: $1,555.20 per month -.,--- Tenant’s Share of Operating Expenses: 13 - 56%. L.... - Tenant’s Share of Impositions: 13. .5 6%. :. Tenant’s Share of Insurance Expenses: 13.5 6 %. d- Scheduled Term Commencement Date: See Addendum - 6. Section Q-13 . , Liability Inskmce Amounts: Bodily Injury per person: 500,000 Bodily Injury per occurrence: 1,000,000 Property Damage: 500,000 BoiIer Ynsurarrce: 500,000 1 Landlord’s Construction Representatives: BERNARD W. GILMORE Tetrant’s Construction Representatives: ROGER GREER I Landlord’s Address: 6361 Yarrow, A -, Carlsbad, Ca. 92008 Street Tenant’s Address: Permitted Uses: . . .* . . . . . . . . . . . . . . 1200 Elm St., Carlsbad, Ca. 92008 , . ._._ Street , Any lawful uses consistant with the Declaration of Covenants and Restrictions. Declaration of Covenants and Restrictions: Copy delivered to Tenant Recorded: Qctobe.?, ,J,, 19.?+,,,+nended February 25, 1977 and May 23, 1977 2. Table of Contents. A. B. c. D. E. F. c. H. 1. J- ii. I ** hl. N. 0. P. (2. R. Defined Terms, Exhibits, Table of Contents, Premises, Common Areas Landlord’s Improvements . . . . . . . . . . . . . . . . . . . . . . . . . Term ‘_ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..~... Rent ._ . ..__......__.r_..._................................ Impositions . . . . .‘_ . . . . . . . . . . . . . . Insurance _. .._..... . .._..___._.._.............._........... Repairs, hfaintenmce, Alterations, Operating Expenses Tenant’s Fixtures and Personal Property . . . . . Utilities snd Boundaries . . . . . . . . . . . . . . Use of Premises . . _ _ . _ . _ _ . _ .‘. . . . I);ini;lge or Destruction . . . . . ,.... Emberit Domain . . _ . . . . . . . . , . . Ihf;llllt . . . . . . . . . Assigrrrrrent ;rnd Suhlrtting . . . _ _ . . . . . . . . _ . . . . Offset Statement. Attornment und Subordination . . Notices _ . . ; . . . . . . . . . . . . . . . . . . .<. . . hlisccllaneous . . . . . . . . . . . Slrccessors Bound . . . . . . . . . . . . . . . . . . . ,.. 2 . . . . . . . . . . . . . . :. -. . Page 1 3 5 5 e 7 8 9 9 10 10 11 12 -14 16 16 17 \t 1 ,T \ 18 . =r? . . . -; . ,_, ,_ . . . . . -.. ., /.._..‘. ..a- \ ._...I. G”’ The following Exhibits are attached to this Lease after the signatures and are incorporated herein by reference thereto. Description : Exhibit A - Tenant’s Floor Plan. . 3. Premises. Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant’s Floor Space (“Demised Premises”) in the Building extending from the top surface of subfloor to the bottom surface of ceilings nhove but excluding the common stairways, stairwells, hallways, -accessways, and pipes, ducts, conduits, wires and appurtenant fixtures serving excIusiveIy or in common other parts.of the Building, and if Tenant’s Floor Space includes less than the entire rentable area of any floor, excluding also the remainder of the Floor Common Area. 4. Common Areas. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reason- able rules from time to time made by Landlord of which Tenant is given notice: (n) Building Common Areas. The common stairways and accessways, loading docks and platforms and any passageways thereto, and the common pipes, ducts, conduits, wires and appurtenant equipment sening the Demised Premises; (b) Floor Common Areu. If the Demised Premises include less than the entire rentable area of any floor, the common lobbies, hallways, toilets and other common facilities; and . (c) Land Common Area. Common walkways, sidewalks, and driveways necessary for access to the Building and parking spaces or area from time to time maintained on the real property u;jon which the Building is located (“Lot”) and to the extent from time to time arranged by Landlord, on adjacent real property. 5. Lunrliord’.s Reserved Rights in Common Areas. Landlord reserves the right from time to time, without unreasonable interference with Tenant’s use: (a) Building Chun~cs. To install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the cei!ing sur- faces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts. conduits, wires and appurtenant meters and equipment included in the Demised Premises which dre so located or located elsewhere outside the Demised Premises; (1,) Bowdaz!/ Chnges. To change the Jines of the Lot; (c) Focilit!/ Chntzges. To alter or relocate any other common facility; provided, however, that sub- stitutions are substantially equivalent or better in quality. > B. LANDUJRD’S JMPROVEMENTS. 1. Plans. a: Preliminar!~ Plans. Landlord and Tenant have approved the preliminary plans and outline specifica- tions (“Preliminary Pbms”) identified in Exhibit B, for the construction of the Demised Premises.. 3 . .1 ,‘-- . b. Final Piuns. Landlord shall have prepared final plans and specifications (“Final Plans”) substa~t- tially in conformity with the Preliminary Pl;uls, which riced wt include working or shop drawings. “Plans” shall hereinafter rnt-~t11 Preliminary Plans aud then, when prepared, Final Plans. Final Plans shall be delivered to Tenant as soon as reasonahly possible from the date hereof, subject, however to any period of delay en- countered by Landlord in such preparation as a result of requests by Tenant for changes in Final Plans sub- sequent to the date hereof. Within ten (10) days after delivery of the Final Plans, Tenant shall set forth in writing with particularity and precision. any corrections or changes necessary to bring the Final Plans into sul)stantiaI collfonnity with the Prelimillary Plm~s, except that Tenant may not object to any logical develop- ment or refinement of the Preliminary Pla~ls. Failure to deliver to Landlord written notice of any such correc- tions or changes within said ten (10) day period shall constitute approval of the Final Plans by Tenant. Following such approval of the Fin::1 Plans, both -parties shall endorse approval for filing purposes thereon, in duplicate, and thereafter changes may he lnade only in accordance with Section B-4. 2. Construction. Landlord. at its sole expense, shall proceed diligently with construction and completion of the Demised Premises substantially in accordance with the Plans. Landlord shall complete the Demised Premises and they shall be ready for occupa~~cy, as defined in Section R-5, by Tenant not later than thd Scheduled Term Com- mencement Date; provided, however, that the Scheduled Term Commencement Date shall be extended for a period of time equal to the period of any delay or delays encountered by Landlord affecting said work of construction becatlse of fire, earthquake, iltclenlent weather, or other acts of Cod, acts of the public enemy, riot, insurrection, governmental re&ttions of the sales of materials or supplies or the transportation thereof, strikes or boycotts, shortages of material or lah,or. Tenant’s early entry under the provisions of Section B-8, changes in the Plans pursuant to Section B-4, or any other cause beyond the control of Landlord. 3. Fuilwe to Complete Construction. If the Demised Premises are not completed on or before the Scheduled Term Commehcement Date as extended pursuarbt to Section B-2, the sole remedy of either party shall be the option to terminate this Lease by the ddlivery to the other party of written notice within ten (10) days, after the day six (6) months following the Scheduled Term Commencement Date, as extended. \SLE ADDENDUM) 4. Changes in Platu. Tenant shall have the right to request ch:ulg!es in Plains, which request shall not be unreasonably denied, provided, however, that: (a) such right shall not he exercised unrensonahly, (1)) no such request shall affect any major structural change in the Demised Premises, (c) Tenant shall pay any additional cost required to implement such change incurred hy Landlord, including, without limitation loss of rents, architecture fees, increase in coustruoti& mst and other charges payable hereunder, caused by delay and Tenant shall pay Landlord either for said costs upon demand or by entering into a11 amendment to this J,ease which provides for a proportionate increase in Fixed Rent, the method of payment to be at the option of Landlord, and (d) such requests shall constitute a11 agreement on the part of Tenant to any delay in completion caused by reviewing,, processing and implementing the change. 5. Cotnpbtion unrl r)cliver!l. l’he Demised Premises shall 1)~ ready for occupa~wy (“Heady for Occnpanc;“) whe11 the work of con- structiolt has 1we11 substantially completed in accordance with the Pla~ls. Landlord shall prepare, certify l)y his signature. and deliver, in duplicate to Tenant a written statement certifying (a) that the Demised Premises have l)ee11 substantially completed in accordance with the Plans, changes or amendments thereof, and any properly authorized and (1~) the date of SU& completion. Landlord shall diligently complete, as soon as reasonably possible, any items of work and adjustment not completed when the Demised Premises are Heady for Occupancy. 4 6. Quality of Construction. All work shall be done in a good and workmanlike manner and in compliance with all applicable laws and lawful ordinances, by-laws, regulations and orders of govzmmental authority and of the insurers of the . Building. 7. Construction Representative. Jn connection with the construction of the Demise! -Premises, each party shall be bound by its Con- struction Representative. A party may designate a substitute Construction Representative by giving written notice to the other party. 8. Early Entry. With the prior written consent of Landlord, Tenant may at any time prior to the commencement of the Term, at its- sole risk, enter upon and install such trade fixtures and equipment in the Demised Premises as it may elect; provided, however, that (i) Tenant’s early entry shall not interfere with Landlord’s work of construction or cause labor difficulties; (ii) Tenant shall execute an indemnity agreement in favor of Land- lord in form and substance satisfactory to Landlord; (iii) Tenant shall pay an3 provide evidence of insurance .satisfactory to Landlord; and (iv) Tenant shall pay utility charges reasonably allocated to Tenant by Land- lord. Tenant shall not use the Demised Premises for storage of inventory or otherwise commence the opera- tion of business without the express prior written consent of Landlord. C. TERM. I 1. Commencement of Te&. The term of this Lease shall commence upon the earliest of the following dates: - . (a) Scheduled Term Commencement Date, as may be extended; (b) The date on which the Demised Premises are Ready for Occupancy, as set forth in Section B-5 above; or (c) The date upon which Tenant actually commences to do business on the Demised.Premises with Landlord’s written consent. D. RENT. 1. Fixed Rent. Tenant shall pay the Fixed Rent to Landlord in advance upon the first day of each calendaf ~6. rTxY--- the Term, at Landlord’s address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any dedu&in++seto,f whatsoever. If the Term shall commence and end on a day other than the first day of a calend&&&&z-ihen Tenant shall pay, upon the commencement date of the Term or first day of the last calendar *,-a prorata portion of the Fixed Rent described in the foregoing paragraph, prorated on a per diem basis, with respect to the portions of the fractional calendar quarter included in the Term. 2. Additional Rent. All charges required to be paid by Tenant hereunder, including without limitation payments for Imposi tions, insurance and repairs, shall be considered additional rent for the purposes of this Lease (“Additio 5 ‘. Rent”), and Tenant shall pay Additional Rent upon written demand by Landlord. “Rent” shall mean Fixed Rent and Additional Rent. 3. Interest. If any installment of Rent is not paid promptly when due, it shall bear interest at the lower rate of either ten percent (lo?&) or the maximum rate permitted by law, from the date on which it is due until the date on which it is paid regardless of whether or not a notice of de’fault or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time atid in the manner herein specified. E. IMPc~ITI~N~. 1. Tenant’s Obligations. Tenant shall pay to 1,andiord as Additional Rent, Tenant’s Share of Impositions multiplied by the sum of the following: all real estate taxes and all other taxes relating to the Demised Premises, all other taxes which may be levied in lieu of real estate taxes, assessments, and other governmental charges, or levies, general and specinl,‘ordinary and extraordinary, unforeseen as well as foreseen, of any kind and nature for public improyements, services or benefits (hereinafter collectively referred to as “Impositions”), which are assessed, levied, confirmed, imposed or become a lien upon the Demised Premises, Building and/or Lot, or become payable during the Term: provided, however, that: (i) Any Impositions shall he prorated between Landlord and Tenant so that Tenant shall pay only that proportion thereof which the part of such period within the Term bears to the entire period; and (ii) Any such sum payable by Tenant, which would not otherwise be due until after the date of the termination of this I,ease, shall he paid by Tenant tc. Landlord upon such termination. 2. installnlent Election. In the case of any Impositions which may be evidenced by improvement or other bonds or which may be paid in annual or other periodic installments, Landlord shall elect to cause such bonds to be issued or cause such assessment to he paid in installments over the maximum period permitted by law. 3. Limitntion. Nothing contained in this I,ease shall require Tenant to pay any franchise, corporate, estate, inheritance, succession, transfer tax of Landlord, or any income, profits or revenue tax or charge, upon the net income of Landlord; provided, however, that if at any time during the Term under the laws of the IJnited States Gov- ernment or the state in which the Demised Premises are located, or any political subdivision thereof, a tax or excise on rent, or any other tax however described, is levied or assessed by any such political body against Landlord on account of rentals payable to Landlord, Tenant shall pay. one hundred percent (1000/o) of any said tax or excise WI rent as Additional Rent. 4. Phonal Property Taxes. .Tennnt shall pay or C~IISP to he paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixttlres. inventories and other personal property placed in and upon the Demised Premises hy Tenant. 1;. INSLJI~AXCX 1. Fiw cmtl I*;xicntld Covcvug~. During the Term 1,andlord shall procure and paintain in full force and effect with respect to the Building, D policy or policies of tire insurance with extended covcrnge endorsement attached, including vandalism and malicious mischief covc’rage. axid any other endorsements required hy the holder of any fee or leasehold mortgage in an :unount equal to one hundred percent ( lW%) of the full insurance replacement value (replace- . n&t cost It?W. in~hitling d&is rrmovnl, and demolition) thereof. Tenant shall promptly pay to Landlord within five (5) days after demand therefor an amount equal to Tenant’s Share of Insurance Expenses multiplied by the premium or premiums on insurance maintained by Landlord pursuant to this Section, with appropriate proration at the beginning and end of the Term. 2. Pddic Liahtlity. Tenant shall, at its own cost and expense, keep and maintain in full force during the Term, a policy or policies of comprehensive public liability insurance, written by an insurance company approved by Landlord in the fOJTn customary to the kjcality. insuring Tenant’s activities with respect to the Demised Premises against loss, damage or liability for personal injury or death of any person or loss or damage to property occurCng in, upw~ or ahout the Demised Premises in amounts of not less than those set forth in Section A-l hereinabove . for injury or death of any one person, for injury or death of all persons in any one occurrence, and for property damage and for damage from boiler. if applicable; provided, however, that if at any time during the Term, Tenant shall have in full force and ‘effect a blanket policy of public liability insurance with the same coverage for the Demised Premises as described above, as well as coverage of other premises and properties of Tenant, or in which Tenant has some interest, such blanket insurance shall satisfy the requirement hereof. 3. Rental Abatement Insurance. Landlord shall keep and maintain in full force and effect during the Term, rental abatement insurance . against abatement or loss of Rent in case of fire or other casualty, in an amount at least equal .O the amcunt of the Relit payable by Tenant during one year next ensuing as reasonably determined by Landlord. Tenant shall pay to Landlord within five (5) days after demand therefor accompanied by evidence of payment, an arnou~xt equal to Tenant’s Share of Insurance Expenses multiplied by the premium or premiums on insurance maintained by Landlord pursuant to this section, with appropriate proration at the beginning and end of the Term. 4. lnsurunce Certificates. Tenant shall furnish to Landlord, upon the date of commencement of this Lease and thereafter within thirty (30) days prior to the expiration of each such policy, a certificate of insurance issued by the insurance carrier of each policy of insurance carried by Tenant pursuant hereto. Said certificates shall expressly provide that such policies shall not be oanceIInbIe or subject to reduction of coverage or otherwise be subject to modification except after thirty (30) day’s prior written notice to the parties named as insureds in this Sec- tion F-4. Landlord, its successors and assigns, and any nominee of Landlord holding any interest in the Demised Premises, including, without limitation, any ground lessor and the holder of any fee or leasehold mortgage, shall be named as insureds under each such policy of insurance maintained by Tenant pursuant to this Lease. 5. Tenant’s Failure. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for any loss or cost resulting from said failure. This section F-5 shall not be deemed to be a waiver of any of Landlords rights and remedies under any other section of this Lease. 7 . 6. Waiver of Suhrogution. Any policy or policies of fire, extended coverage or similar casualty- insurance, which either party obtains in connection with the Demised Premises shall include a clause or endorsement denying the insurer illI)/ rights of subrogation against the other party to tile extent rights have been waived by the insured prior to the occnrrence of ‘injury or loss. Landlord and Tenant waive any rights of recovery against the other for injilry or loss due to hazards covered by insurance containing such a waiver of subrogation clause or endorse- me!lt to the extent of the injury or toss covered thereby. 7. Tenant’s Fixtures. Tenant shall assume tile risk of damage to any fixtures which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises. . .._- (SEE ADDEhrDUMl 8. Indemnification of Landlord. Tenant shall indemnify and hold Landlord alld the Demised Premises harmless from and against (i) any and all liability, penalties, losses, damages, costs and expenses, demands, causes of action, claims or judgments arising from or growing ouC of any injury to iJJ1)’ person or persons or any damage to any property as a result of ;l~ly accident or other occurrence during the term of this Lease occasioned by any act or omis- . sion of the Tenant, its officers, employees, agents, servants, subtenants, concessionnaires, licensees, contractors, invitees or permittees, or arising from or growing out of the use, maintenance, occupation or operation of the Demised Premises during the term of this Lease, and (ii) from and against all legal costs and charges, includiug reasonable attorneys’ fees, incurred in and about any of such matters and the defense of’ any action arising out of the same or in discharging the Demised Premises or any part thereof f:om any and all liens, charges or judgments which may accrue or be placed thereon by reason of any act or omission of the Tenant; provided, however, that Tenant shall not be required to in-Temnify Landlord for any damage or injury of any kind arising as the result of Landlord’s wilfu1 acts or those of its agents oi employees. G. REM~RS, MAINTENANCE, ALTE~UTIONS, OPERATING EXPENSES. 1. Operclting Expense. .Tenant shall pay to Landlord iis Additional Rent, Tenant’s Share of Operating Expenses multiplied by the amount which Landlord expruds for Operating Expense. “Operating Expense” shall include reasonable and necessary expenses WtuaIIy incurred by Landlord for the oper&ion, cleaning, maintenance, repair and management of the Building and Lot, including without limitation, the roof and walls except for structural repair of the same, all walks, driveways, parking and loading areas, lawns and landscaping, 2. Tenmt Rfqkxirs utld Mair~tr:twnra. Tenant shall. at Tellallt’s solr cost a!ld e?cpe~Jse. keep iklld JlJiJhJhliJl the Demised Premises, subfloors and floor coverings in good repair :u:d iu a C~eilJJ and safe condition, casualties covered by insurance coverage excepted to the extent of proc~ds received. Tenant shall, at Tenant’s OWJI expense, immediately replade all glass in the Demised Premises that may be broken during the Term with glass at least. equal to the specifica- tiou and quality of the glass SO replaced. (StE ADDENDUM) 3. J~ndlord Repairs und Muintcnunce. Landlord shall. i\t its esprnse. after written notice from Tellalit, repair in a prompt and diligent manner any damage to structural portions of the roof and hearing wnlh of the Demised Premises; provided, however, that if such damage is caused by au act or omission of Tenant, then such repairs shall be at Tenant’s expense, -- payablc~ to I,a~ldlord as Additional Rent hereunder. There shall be no abatement of Rent during the perfoml- anet! of such .work. 1,andlord shall not he liable to Tenant for injury or damage that may result from any defect in the construction or conditions of the Demised Premises. Tenant \vaives any right to make repairs at the c~xpense of La~lcllord under any law. statute or ordinance now or hereafter in effect. 4. inspection of Lewd ~renukes. Landlord, at reasonable times. may go upon and into the Demised Premises for the purpose of inspecting the same, or for the purpose of inspecting the performance by Tenant of the terms and conditions hereof, and for the purpose of affixing reasonable signs and displays and showing the Demised Premises to prospec- tive purihasers. teiiants and lenders. : 5. Workmanlike @alit!/. A11 repairs, alterations, additions, and restoration by Landlord or Tenant hereinafter required or per- mitted shall be done in a good and workmanlike manner and in compliance with all applicable laws and law- ful ordinances, by-laws, regulations and orders of governmental authority and of the, insurers of the Building. 1, . 6. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at the request of Tenant and shall keep the Demised Premises free and clear of all mechanic’s and materialmen’s liens in connection therewith. Landlord shall have the right to post or keep posted on the Demised Premises, or in the immediate vicinity thereof, any notices of non-responsibility for any construction, &i&ion or repair,of the Demised Premises by Tenant. If any such lien is filed, Landlord may, but shall not he required to, take such action or pay such amount as may he necessary to remove such lien; and Tenant ‘shall pay to Landlord as’ Additional Rent any such amounts expended by Landlord together with interest thereon at the highest legal rate froin the date of expenditure. . H. TENANT’S FIXWHES AND PERSONAL PHOIJERTY. Tenant, at its expense, may install any necessary trade fixtures, equipment and furniture in the Demised Premises. provided that such items are installed and are removabk without damage to the structure of the Building. Landlord reserves the right to approve or disapprove of curtains, draperies, shades, paint, or other interior improvements visible from outside the Demised Premises on wholly aesthetic grounds. Such improve- ments must be submitted for Landlord’s written approval prior to installation. or Landlord may remove or replace such items at Tenant’s sole expense. Said trade fixtures, equipment and furniture shall remain Tenant’s property and shall be removed by Tenant ilpon expiration of the Tern], or earlier termination of this Lease. Upm~ Landlord’s prior written approval, Tern ary~i~~~nrovqments in the interior of the De1 instnlled~E.~dr-r~~vable without damage to the structure of the Building. Such temporary improvements _ --- shall remain the property of Tenant and shall l >e removed by Tenant upon expiration of the Term or earlier tcrminntion of this Lease. Tenant shall repair, at its sole expense, all damage caused by the installation or removal of trade fixtures, equipment, furniture or temporary improvements. If Tenant fails to remove the foregoing items on termination of this Lease, Landlord may keep and use them c?r remove any or all of them ;lnd C’;IIISC them to 1~r stored or sold in accordance with applicablc~ law. 1. UTILITIFS AND B~~NDANIES 1. Vtilitics. ,’ Tenant shall be solely responsible for and promptly pay alI charges for heat, water, gas, electricity and any other utilities used or consumed on the Demised Premises. Landlord shall not be liable to Tenant for inter- 9 - ruption in or curtailment of any utility service, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement in whole or in part hereunder. If any such utilities are not separately metered, Tenant shall pay a prorata share, based on use, as determined by Landlord. 2. Easements. Landlord reserves the right to (i) alter the boundaries of the Lot and (ii) grant easements on the Lot and dedicate for public use portions thereof without Tenant’s consent. subject to the provisions of Section O-2 hereof. and provided that JW such grant or dedication shall interfere with Tenant’s use of the Demised Premises or otherwise cause Tenant to incur cost or expense. From time to time. and upon Landlord’s demand, Tenant shall execute, acknowledge and delilrer to Landloid or in accordance with Landlord’s instructions any and all documents, instruments. maps, or plats necessary to eifectuate Tenant’s covenants hereunder. J. USEOF PREMISES. 1. . General. The Demised Premises shall be used for the Permitted Uses. consistent with the declaration of Covenants and Restrictions and any supplement thereto. Tenant shall, at Tenant’s sole cost and expense, comply with all of the requirements of municipal, county, state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertaining to the Demised Premises, Building and Lot, and secure any necessary permits therefor and shall faithfully observe, in the use of the Demised Premises, Building and Lot, all municipal and county ordinances and state and federal statutes now in force, or which may hereafter be in force. Tenant shall obtain any required certificate of occupancy with respect to its use of the Demised Premises, Building and Lot, within thirty (30) days from the commencement of the Term hereof and shall deliver a copy thereof to Lapdlord within said thirty (30) day period. Tenant in its use and occupancy of the Demised Premises shall not commit waste, nor overload the floors or structure, nor subject the Demised Premises to any use which would tend to damage any portion thereof. 2. Signs. Any sign placed or erected by Tenant on the Demised Premises, Building or Lot, except in the interior of the Demised Premises, shall contain only TenalIt’s name, or the name of any affiliate of Tenant agtually occupying the Demised Premises, and no advertising matter. No such sign shall be erected until Tenant has obtained Landlord’s writtell approval of the location, material, size, design and content thereof and any necessary pennit therefor. Tenant shall remove any SIIL’II sign upon termination of this Lease and shall return the Demised Premises to their condition prior to the placement or erection of said sign. 3: Purking Access. In addition to thch grrlcral obligatiotl of Tellallt to conr$y with laws and without 1imit;ttion thereof, Landlord shall not 1~ lial)le to Tenant nor shall this Lease be affected if ally parking privileges appurtenant to thr I)emised Premises, Building aild l.ot ;lrv impair4 by reasol1 of any tnoratorium, initiative, referelld& statute, rt~gulntion, or otl1c.r govrrnrnental decree or action which could ill any manner prevent or limit the parkitlg rights of Tenaltt llc*reul&r. Any governrnt~ntal charges or surcharges or other monetary &ligi~tions im~)sed relntivc tc, parking rights witlr respect to the Dcrtlised Premises, Building and Lot shall he, considered as Impositions illid shall 1~ payable l)y ‘I’cltallt under the* provisions of Section E hereinabove. IL DAMACEOR DESTRUCTION. 1. Hecorwtnrction. If the l)emised Premises art’ damaged or destroyed during the Term, Landlord shall, except as hereinafter pro+i&d, diligently repair or rebuild them to substantially the condition in which they e&ted immediately 10 . prior to such dau~a~~ or destructioll; provided t!?at any damage wllich is estimated in good fait!) !,y Landlord to he under Five Tlrousand Dollars ($5,000.00) shall !>c repaired by Teuant, and L,nnd!ord shall reimburse Tenaut upon dcrna~td for exprnses incurred in such repair work to the extent of any proceeds received by . Landlord from extruded coverage insurance described in Section F-l. 2. Kent Abatement. Rent due alld payable hereunder shall !)c abated proportionately. but only to the extent of any proceeds received by L,al;dlord from rental n!,ntement insurance described ill Section F-3, during any period in which, by reason of any such damage or destruction. Tenant reasonably detemlines that there is substantial interference with the operation of Tenant’s business in the Demised Premises, having regard to the extent to which Tenant may !)e required to discontinue its business in the Demised Premises. Suc!r abatement shall continue for the pericd commencing with such damage or destruction and ending with a substantial completion by Landlord of the work of repair or reconstruction which Landlord is obligated or undertakes to do: If it be determined that continuation of business is not practical pending reconstruction, Fixed Rent due and pjyable hereunder shall abate to the extent of proceeds from rental abatement insurance until reconstruction is substantially completed or until business is totally or partially resumed, whichever is the earlier. 3. Excessive Damage or Destruction. If the. Building is damaged or destroyed to the extent that Landlord determines that it can@, with reasonable diligence, be fully repaired or restored by Landlord within one hundred eighty (180) days after the date of the damage or destruction. the sole right of both Landlord and Tenant shall be the option to terminate this Lease. Notwithstanding the fact that the Demised Premises have not been damaged or destroyed, Landlord shall determine whether the Building can be fully repaired or restored within the one hundred eighty (180) day period, and Landlord’s determination shall be conclusive on Tenant. Landlord shall notify Tenant of its determination. in writing, within thirty (30) days after the date of the damage or destruction. If Landlord determines that the Building can be fully repaired or restored within. the one hundred eighty (180) day period, or if it is determined that such repair or restoration cannot be made within said period but neither party elects to terminate within thirty (30) dayc from the date of said determination, this Lease shall remain in full force and effect and Landlord shall diligently repair and restore the damage as soon as reason- ably possible. 4. Uninsured Casuult!g. Notwithstanding anything contained herein to the contrary, in the event of damage to or destruction of a!! or any portion of the Building which is not fully covered by the insurance proceeds received by Landlord under the insurance policies required under Section F-l above. Landlord may terminate this Lease by written notice to Tenant, given within thirty (30) days after the date of notice to Landlord that said damage or destruction is not so cavered. If Landlord does not elect to terminate this Lease, the Lease shall remain in full force and effect and the Building shall be repaired and rebuilt in actwrdance with the provisions for repair set forth in Section K-l hereinabove. 5. Waiver. With respect to any destruction which Landlord is obligated to repair or may elect to repair under the terms of this Section K. Tenant hereby waives a!! right to terminate this Lease pursuant to rights otherwise presently or llereafter accorded by law to tenants. except as expressly ‘otherwise provided herein. L. EMINENT DOMAIN. 1. Totul Condemnation of Demised Premises. . If the whole of the Demised Premises is acquired or condemned by eminent domain, inversely con- demned or sold ill lieu of condemnation, for any public or quasi-public use or purpose (“Condemned”), 11 then the ‘I’enu shalt termimtci as of the dntc of title vesting if! such procwdilrg, i\ud Rent shall be adjusted to the date of tmnination. Tellant s!A! immediately notify 1,ancllord of any such occurrence. 2. Partial Condemnution. If any part of the Demised Premises is partially Condemned, and. such partial condemnation renders the ljernised Premises unusable for the business of the Tenant, then the Term of this Lease shal! terminate as of the date of title vesting in such proceeding and Rent shall be adjusted to the c!nte of termination. If such candemnation is not extensive enough to render the Demised Premises unusable for the business of Tenant, then Landlord shall promptly restore the Demised Premises to a condition comparable to its condition immediately prior to such condemnation to the extent of any condemnation proceeds recovered by Landlord, less the portion thereof lost in such qmdemnntion, and this Lease shall continue in full force and effect exc.eept that after the date of such title vesting the Fixed Rent shall be reduced as reasohably determined by Land- ‘lord. If any parking areas are condemned, Lalldlord has the option but not the obligation to supply Tenant with other parking areas. 3. Lmdlor~s Award. If the Demised Premises are wl~olly or partially condemned, then, subject to the provision of Section L-4, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority. 4. Tenunt’s Award. Tenant shall have the right to claim and recover from the con?emning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant’s own right on acwunt of any and all costs or loss (including loss of business) to which Tenant might be put in removing Tenant’s merchandise. furniture. fixtures, leasehold improvements and equipment to a new location. . 5. Temporary Condemnation. . . If the whole or any part of the Demised l’rcbmises shall he condemned for any temporary public or quasi-public use or purpose, this Lease shall remain in effect and Tenant shall be entitled to receive for itself srwh portion or portions of any itward made for such use with respect to the period of the taking wiri~h is within the Term. If :I temporary condemnation remains ill force at the expiration or earlier termination of this Lease, Tenant shall pay to Landlord a sunl equal to the reasonable cost of performing any obligations required of Tenant by this Lease with respect to the surrender of the Demised Premises, including, without limitation repairs and maintenance required, and upon such payment Tenant shall be excused fro& any such ol)ligations. If a temporary condemnation is for an established period which extends beyond the Term, the Lease ~l~all terminate as of the date of occupancy by the condemning authority, and the damages shall 1~ as provided in Sections L-3 aud L-4 and Rent shall be adjusted to the date of occupancy. < 8. !Votic:u (li#I fkWrtion. Landlord shall. imnlediately LI~OII service of process in connection with any condemnation or potential cwndrmllatio!l, give Tmant notice iI1 writing thereof. Tenant shall immediately execute and deliver to the I.andlord all instruments that may be required to effectgate the pr&isions of this paragraph. - ,h’i. hFAULT. 1. Eoents of IIefarrlt~s. The occurrence of ;nry of the following events shall c-nstitute an “Event of Default” on the part of Tenant with or without notice from Landlord: (SEE ADDENDUMI) 12 ’ ., . CALIFORNIA a. Vacation or Abandonments Vacation or abandonment of the Demised Premises; b. ‘Payment. Failure to pay any insta!lment of Rent or other monies due and payable hereunder upon the date when said payment is due, the failure continuing for a period of five (5) days after said payment is due; c. Performance. Default in the performance of any of Tenant’s covenants, agreements or obligations hereunder, except default in the payment of Rent or other monies, the default continuing for thirty (30) days after written notice thereof from Landlord; . d. Assignment. A general assignment by Tenant for the benefit of creditors; e. Bankruptcy. The filing of a voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant’s creditors immediately unless involuntary, in which case when the petition remains undischarged for a period of thirty (30) days; f. Receiver. The appointment of a receiver to take possession of stlbstantially all of Tenant’s assets or of this leasehold, the receivership remaining undissolved for a period of thirty (30) days; or g. Attachment. Attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this leasehold, the attachment, execution or other seizure remaining undismissed or undischarged for a period of thirty (30) days after the levy thereof. 2. LandlorcPs Remedies. a. Abandonment. If Tenant vacates or abandons the Demised Premises, this Lease shall continue in effect. Landlord shall not be deemed to have terminated this Lease other than by written notice of termination from Landlord, and Landlord shall have all of the remedies of a landlord provided by Section 1951.4 of the Civil Code of the State of Caiifomia. At any time subsequent to vacation or abandonment of the Demised Premises by Tenant, Landlord may give notice of termination and shall thereafter have all of the rights hereinafter set forth. b. ; Termination. Following the occurrence of any Event of Default, Landlord shall have the right, so long as the default continues, to terminate this Lease by written notice to Tenant setting forth: (i) the default, (ii) the requirements to cure it, and (iii) a demand for possession, which shall be effective three (3’) days after it is given or upon expiration of the times specified in Section M-l hereinabove, whichever is later. c. Possession. Following termination under paragraph b, without prejudice to any other remedies Landlord may have by reason of Tenant’s default or of such termination, Landlord may then or at any time thereafter, (i) peaceably re-enter the Demised Premises, or any part thereof, upon voluntary surrender by Tenant or expel or remove Tenant therefrom and any other persons occupying them, using such legal proceed- ings as are then available; (ii) again repossess and enjoy the Demised Premises, or relet the Demised Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term) at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion shall determine, with the right to make reasonable alterations and repairs to the Demised Premises; and (iii) remove all personal property therefrom. d. Recooery. Following termination under paragraph b, Landlord shall have,all the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California. The amount of damages which Landlord may recover following termination under paragraph b. shall include the worth at the time of the award of the amount by which the unpaid Rent for the balance of the term ‘after the time of award exceeds the amount of rental loss Tenant proves could be reasonably avoided. e. Additional Remedies. In addition to the foregoing remedies, Landlord shall, so long as this Lease is not terminated, have the right to remedy any default of Tenant, to maintain or improve the Demised ‘13 Premises without terminating this Lease, to incur expenses on behalf of Tenant in seeking a new subtenant, or to cansc: a receiver to be appointed to administer the Demised Premises and new or existing subleases, and to .ldd to the Rent payable hereunder all of Landlord’s reasonable costs in so doing, with interest at the * nraximnm r&z permitted by law from the date of such expenditure until the same is repaid. f. Other. If Tenant causes or threatens to cause a breach of any of the covenants, agreements, terms or conditions contained in this Lease, Landlord shall be entitled to obtain all sums held by Tenant, by any trustee or in any account provided for herein, to enjoin such breach or threatened breach, and to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceed- ings and other remedies were not provided for in this Lease. g. Cumulatiue. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease .or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or ail other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. h. No M’aiuer. No failure by Landlord to insist upon the strict performance of any term hereof or to exercise ani right or remedy consequent upon a breach thereof, and no acceptance of full or partial pay- ment of Rent during the continuance of any such breach, shall constitute a waiver of any such breach, or of any such term. Efforts by Landlord to mitigate the damages caused by Tenant’s breach of this Le3se shall not be construed to be a waiver of Landlord’s right to recover damages under this Section M. Nothing in this Section M affects the right of Landlord to indemnification by Tenant in accordancg with Section F-S hereinabove for IiabChy arising prior to the termination of this Lease for personal injuries or property damage. 1. Prohibition. N. hSICNMJ3NT AND ik~mc. Tenant shall not assign, mortgage, pledge or otherwise transfer, this Lease, in whole or in part, nor sublet or permit occupancy by any party other than Tenant of all or any part of the Demised Premises, without the prior written consent of Landlord in each instance. Any purported assignment or subletting contrary to the provisions hereof without consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. As Additional Rent hereunder, Tenant shall reimburse Landlord for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting. 2. Landlord Option. a. In connection with any proposed assignment or sublease, Tenant shall submit to Landlord in writing (i) the name of the proposed assignee or sublessee, (ii) such information as to its financial responsibility and standing as Landlord may reasonably require, and (iii) all of the. terms and conditions upon which the proposed assignment or subletting is to be made. Landlord shall have an option to cancel and terminate this Lease, if the request is to assign the Lease or to sublet all of the Demised Premises; or, if the request is to sublet a portion of the Demised Premises only, to cancel and terminate this Lease with respect to such. portion. Landlord may exercise said option in writing within thirty (30) days after its receipt from Tenant of such request, and in each case such cancellation or .termination shall occur as of the date set forth in Landlords notice of exercise of such option, which shall be not less than sixty (60) .nor more than one hundred-twenty (120) days following the giving of such notice. 14 b. Cancel&ion. If Landlord shall escrcise its option, Tenant shall surrender possession of the entire Demised Premises, or the portion thereof which is the subject of the qption, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Demised Premises at the espiration of the Term. If this Lease is cancelled as to a portion of the Demised Premises only, the Fixed Rent after the date of cancellatioh shall be abated and shall thereafter be an amount deter- mined by Landlord and the Tenant’s Share of Impositions, Tenant’s Share of Operating Expenses and Tenant’s Share of Insurance Expenses shall be adjusted as reasonably determined by Landlord. c. Nonconcellation. If Landlord does not exercise its option to cancel this Lease pursuant to the fore- going provisions, Landlord may withhold its consent to such assignment or subletting, as long as the withhold- ing is not done unreasonably. . d. Assumption. No assignment shall be binding upon Landlord, any ground lessor or any mortgagee unless Tenant shall deliver to Landlord an assignment in recordable form which contains an assumption by the assignee, but the failure or refusal of the assignee to execllte such instrument or assu&ption shall not release or discharge assignee from Iiability as Tenant hereunder, provided that the terms and provisions of the assignment or subletting shall specifically make applicable to the assignee or sublessee all of the provisions of this Section. . 3. Bonus Rental. te&n If for any assignment or subleabe, Tenant receives rent or other consideration, either initially or over the of the assignment or sublease, in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Demised Premises, in excess of such Rent fairly allocable to such portion, after appropriate adjustments to assure that all other payments called for hereunder are appropriately taken into account, Tenant shall pay to Landlord, as Additional Rent hereunder, one-half (% ) of the excess of each such payment of rept or other consitieration received by Tenant promptly after its receipt. 4. Scope. The prohibition against assigning or subletting contained in this section shall be construed to include a prohibition against any assignment or subletting by operation of law. If this Lease be assigned, or if the under- lying beneficial interest of Tenant be transferred, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of the immediately preceding paragraph, but no such assignment, subletting, occu- pancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. No assignment or subletting shall affect the continuing primary liability of Tenant (which, following assignment, shall be joint and several with the assignee), zmd Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease. 5. Waioet. 5 Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time granted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant wit:lollt having taken action agiiinst or joined such assignee or subleases, except that Tenant, shall have the benefit of any indulgences, waivers and extensions of time granted to any such assignee or sublessee. - 15 . 0. Hekuw. Whenever Landlord conveys its interest in the Lot, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and a!1 further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or grow- ing out of, or connected with this Lease after the effective date of said release. The effective date of said release shall be the date the assignee executes an assumption of such an assignment whereby the assignee expressly agrees to assume all of Landlord’s obligations, duties, responsibilities and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be re- quired to further effect the provisions of this Section. 0. OFFSETSTATEMENT,ATTORNMENT,AND SUBORDINATION. 1. O&et Statement. Within ten (10) days after request therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord of its interest in the Demised Premises, or any part thereof, an offset st?tement shall be required from Tenant, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser, or to Landlord, certifying (if such be the case) that this Lease is in full force and effect; the date of Tenant’s most recent payment of Rent, and that there are no defenses or offsets outstanding, or stating those claimed by Tenant. Tenant’s failure to deliver said statement in time shall be conclusive upon Tenant that: (i) this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord’s performance and Tenant has no right of offset, counterclaim or deduction against rent hereunder, and (iii) no more than one period’s Fixed Rent has been paid in advance. 2. Attornment. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of ;ale under, any mortgage or deed of trust made by the Landlord, its successors or assigns, encumbering the Demised Premises, or any part thereof, or in the event of termination of the Ground Lease, if any, and if so requested, attom to the purchaser upon such foreclosure or sale or upon any grant of a deed in !ieu of foreclosure and recognize such purchaser as the Landlord under this Lease. 3. Subordination. The rights of Tenant hereunder are acid shall be, at the election of any mortgagee, subject and sub- ordinate to the lien of any mortgage or mortgages, or the lien resulting from any other method of financing or refinancing, now or hereafter in force against the Lot and/or Building of which the Demised Premises are a part, and to all advances made or hereafter to be made upon the security thereof, provided, however, that notwithstanding such subordination, so long as the Tenant herein is not in default under any of the terms, covenants and conditions of this Lease, neither this Lease nor any of the rights of Tenant hereunder upon Tenant’s covenanting that Tenant is not in default hereunder, shall be tenninated or subject to termination by any tnlstee’s sale. any action to enforce the security, or by any proceeding or action in foreclosure. If requested, Tenant agrees to execute whatever documentation may be required to further effect the provisions of this section. 3 P. NOTICES. A11 notices required to be-given hereunder shalt be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by personal delivery, to the addresses indicated in Section A-1 or at such other place or places as either Landlord or Tenant may, from time to time, respectively, designate in a written notice given to the other. Notices shall be deemed sufficiently served four (4) days after the date of mailing thereof. 16 . - 1. Waiver. Q- M ISCELLANEOUS. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall bc operative only for the time and to the extent therein stated. Waivers of any covenant, term or ccndition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by either party requiring further consent or approval shall not be deemed to waive or render unnecessary their consent or approval to or of any subsequent similar acts, _ 2. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease. 3. Limitation of Landlords Liability. The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers, or shareholders of Landlord, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets ,of the Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction. . 4. Entire Agreement. This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Demised Premises, Building and Lot, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addi- tion to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. 5. Time. Time is of the essence hereof. @. Short Form Lease. / , Concurrently herewith the parties may, at the option of either party, execute a short form of Lease for recording. This Lease dnd any such short form of Lease shall be construed together as one instrument. Neither Landlord nor Tenant shall record this Lease nor permit the same to be recorded without the written consent -of the other, but shall have the right to record any such short form. 7. Attorneys’ Fees. I In any action or proceeding which the Landlord or the Tenant may be required to prosecute to enforce its respective rights hereunder,. the unsuccessful party therein agrees to pay all costs incurred by the pre- vailing party therein, including reasonable attorneys’ fees, to be fixed by the court, and said costs and attorneys’ fees shall be made a part of the judgment in said action. In any situation in which a dispute is settled other than by action or proceeding, Tenant shall pay all Landlord’s costs and attorneys’ fees relating thereto. 17 - _~_______ -.-_. __- STATE OF &IJFORNIA, County of San Diego before me, personally ON September 29 ,lQ *' the undersigned, a Notary Public in and for said County and s appeayed BERNARD W. GILMORE , known to me, to be the person- whose na~-~F;~.-~t;s’~within Instrument, and acknowledged o me that ACKNOWLEDGMENT - GENERAL - WOLCOTTS FORM 233-REV. 2-57 66335 -. 8. Cuptions und Section Numbers. The captions, section numbers, article numbers and index appearing irl this I,ease are inserted only iks a matter of convenience and in no way define, limit, construe or describe the scope or intent or such sevtiow or articles of this Lease nor in any way affect this Lea&. 9. Severability. \ If any term, covenant, condition or provision of this Lease, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforce- able, the remainder of the terms, covenants, conditions or provisions of this Lease, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. ‘ 10. Applicable law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in ac- cordance with the laws of the state in which the Demised Premises are located. 11. Examhztion of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to Lease, and it is not effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant. (SEE ADDENDUMi R. Successors BOUND. This Lease and each of its covenants and conditions shall be binding upon and shall inure to the bcnefii of the parties hereto and their respective heirs, successors and legal representatives and their respective assigns, subject to the provisions hereof. Whenever in this Lease a refer, nce is made to the Landlord, such reference shall be deemed to refer to the person in whom the interest of the Landlord shall be vested, and Landlord shall have no obligation hereunder as to any claim arising after the transfer of its interest in the Demised Premises. Any successor or assignee of the Tenant who accepts an assignment or the benefit of this Lea’s& and enters into possession or enjoyment hereunder shall thereby assume and agree to perfoml and be bolpnd by the covenants and conditions thereof. Nothing herein contained shall be deemed in any manuer to givk a right of assignment to Tenant without the written consent of Landlord. IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written. . I Attest : . . . ._. .,... ,. . . . .,.,. . . . . . . . TENANT” t City of Carlsbad . ..'.".'...~.........".................... . L . Attest: By 18 STATEOF . COUNTYOF ] ss. (7 . . . . . On , before me, the und&signcd, a Notary Public in and for said State, personally appeared , known to me to bc the 1 and OF , the. corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. 1 . WITNESS my hand and official seal. . . . ..N......................................... Notary Public . . STATEOF Cali fOrda COUNTYOF San Diego On g/16/80 , before me, the undersigned, a Notary Public in and for said State, personaIIy appeared Ruth Fletcher , known to me to be the Purchasing Officer of the City of Carlsbad , the corporation that executed the within instrument, known to me to be tlrr: persons w!lo executed the within instrument on behalf of the corporation therein wu!lcd, and aclmowlcdged to me that such corporation executed the within instrument pursuaut to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. , 19 .? . ” I . . 455’ YARROW DRIVE ._-_--.---_~.~..-_ .__.. 17 11 --r-T’- .L-.J i ~--I ..J i, 4 \ i i - r4 1 - ? ,/-- 1 / ’ i ‘, f% ., ‘1 “\ L -1 ‘7~ .-... -.~..-._. 4 l- i I 1. - K 4 i: I 1; k 4.1 8 i2 -- ;I . - : ; 1 $1 40’ i If- . I, 1 0 i P 1 iIs.’ \ ’ 12 i” I i L c : ii0 \ A 0 \ II y \, ‘\ m ‘i Yb \\!\ ‘i”; : “\ ‘,\, \ ‘I’ at--3 i - Q-.: -.+j I::~ 0 “‘itu[,,i,;(: Ii/ .’ L- I,Z,LSi?“I;cI,~7 I- Z&-.2 / &.&y..-~.y;;; ,$ 8 X’ - 5: I. I , $!g -1 __-_-___-__-_____.__._____.______--_~ .--. _- 622’ -- ---/--- --_ ._. ---- c/---- ‘--’ //’ - \y- To Los Angeles (90 miles) Escondido PaLmar Airport Business Park Pacific Ocean Faloma Airport Bamsiness Park 6231 YARROW DRIVE, SUITE C. CARLSBAD, CALIF. 92008 --. I^. .^.._ ,-. ._ - --^^ Calsbad, Cdifomia 1. , r‘ . . “‘F i- r,, .s & .:i+ v.: t; * I-, re, ,,c,c ..,. 2, *- + FA- % L ,..2 i I . ” =. *TV .L *i f . 3 ;*; .v A ; -I .* A. ‘,*a ” t r-* 5. . . . -x.wi*.,, .--,. 1 *’ .-,f “.$ _ y . ..--’ 7.- . . 'i 07 '.' - : ,- i. _- I 1. .~. : * n,;*.'.-+ . . . . . . <~.' - . . . . . -- t‘. . XI -- i‘", l^.li.h, -.a* .-,. i.l.... ; ‘m,,> __--. I _~_ _-- --*,-I . . ". ,,~., ,i..- ., _,, . . . _ *. i. I,- r-*-s-.-- -. *- : I These multi-occupancy buildings are ideal for light manufacturing, warehouse distribution or research and development. Units are available from 1,600 square feet in building Fr9 and 5,760 square feet in building $10 with office space suited to individual needs. The design provides flexible space finished to the requirements of the tenant. Palomar Airport Business Park is master planned to provide an excellent work enyironment at competitive rates. ,Buildinj; Fcai!!res 8 Tilt-up concrete construction with canopy over private entrance. Kl Space available from 1,600 to 42,480 square feet. BI Custom or standard interior office improve- ments constructed to meet client require- ments. Al Site designed for easy truck access. Building #9 has 10 ft. by 10 ft. grade level overhead, doors. Building # 10 has 20 ft. by 10 ft. over- head truck high doors in each unit. pd Ample on-site automobile parking. P A clear ceiling height of 16 ft. in building #9 and 22 ft. in building # 10. Hl Fully monitored fire sprinkler system. P Continuous strip fluorescent lighting on 20 ft. centers in building z ’ building # 10. 9 and on 24 ft. centers in E3 Landscaped site. ILOC,F!ii!il FCailI Ti’i EQ Central location in North San Dicgo County, one of the fastest growing areas of California. ll~ 35 minutes from downtown San Diego. B 10 minut-es to key North County communities. IH 35 minutes to San Diego international airport and the port of San Diego. q All weather FAA-operated airport next to the park with 4,700 ft. runway, accommodates air- craft up to DC-9. H 1.6 million population in coun~Ly, 800,000 in city of San Diego (the 9th largest city in the United States). q Within 1% hr. drive of the Los Angeles metro- politan area with more than 11 million popu- lation. 1 hr. to Orange County. q Diversified labor force of half a million. H 1% miles from Interstate 5 and 2 miles from the Pacific Ocean. q Located 1 mile from the La Costa resort com- munity. EI Major companies in area include Burroughs Corp., Hughes Aircraft, Beckman In- struments, U.S. Foam, Dyna-Med, Lockheed and Anthony Industries. gl’ Palomar Airport Business Park is a 340 acre master-planned industrial park which opened in 1975. 6 A partnership of Mitsui &Co. (USA), Inc. and Mitsui Fudosan (USA), Inc. Contact: Palomar Airport Business Park or your real estate broker. I 6231 YARROW DR.. SUITE C CARLSBAD, CA. 92006 TELEPHONE (714) 436-2552 I v4DD~9DUJ\‘r TO TljE STk!W.‘:RD FOX?\4 h~tiLT-JF’LE oC.Pr;:yCY l,EP,SE fiy ,4VD J5E’F\‘t’E E? PALOMAR 910, BERNARD W . GILMORE (“LANDLORD” ) THE CITY OF CARLSBAD (“TEJ<\‘h!<T”) _-- .--- --- fisTED ZiS OF June 25, 1980 The promises, Covenants, ag+reements and dec’larations made ’ and set forth herein are intended to and shall have the same force and effect 2s jf set forth at length in the bc)dy of the leas, 0 to which this Addendum is anached (the “Lease”). To the ex’tent that the pi-oxvisions of this Addendum are inconsistent \vith the terms and contiitions of the Jzase, the terms hereof shall control: ‘ 1. smion B-3. The period at the end of Section B-3 is hereby changed to a comma and the following Jang-tiage is hereby added thereto: “unless within -such sixth (6th) month period th- p Demised Frrmises &come “ready for occupancy ” 2s defjned in Section E-5 JxJow. 2. section F -7. . _ . . Section F-7 is hereby retitled IO read: “Tenant’s Frojxrty” 2nd the Jang-uzge of said Section is hereby revised to --ead 2s follov:s: “Tenant ‘shall assume the risk of damage to any fixtures, goods, inventoq, inerchan- ‘dl; se, equipment, furniture and Jeasehoid impox-ements which remain ‘.‘re prolpert-y of Tenant or as to which Tenant retains the right of remoya2 from the Demised Fremises, and Tenant shall maintain reasonabk insurance coverage \vith respct to such irem’s during the Terlk of this Lease. ” r- 3. Sect ion G -2 -- _ - \‘<ith reference to Section G-2, the following Jan,rrl;ege is hereby added thereto: “Tenant expressly understands that there shall be no affirmative responsibility with resFct to either party in connection with I-epairs to the v:aJJs of the Demised Premises relating to maturity or \vearhzring of construction mztrriaals and contrasted IO darnz~ to the str-ucrural integrity ’ of the building v:alJs. Further, Landlord co\‘enants that it shell obtain from the contractor who constructs the Jmpro\,ements upon the Demised Premises a \I.-arranty in th, 5, usual fo3m 2g2insr defective workmanship and materials for a period of one (1) year from the commencement of the Term. Dur-ing said \varranty p-:riod, said \varranq shall b? for the &rJefit of Tenant, to rJ>e extent that it covers any defects in the Jmpro\vements unhich Tenant is required tb repair hereunder. ” -.. 4. Section hC -1. The Semicolon following Subsection h$-1 (II) is herehi changed 10 2 period and the fol!oxing s, w!ence is hereby added at the end of said Sub- section: “Should there be consecutive failure to pap such installments for Tao (2) months in a row then Rent shall hscome due and payable quarterly in advance on the first day of each caJendar quarter during the following one (1) year period of the Term of the Lease, after which year Rent shall again lx payable’monthly and this Section shall again be in effect.” 5. ,Section Q-12. . A new Section Q-12 is added entitled “Financial Statements” and contains the following language: “At any time during the Term of the Lease; Tenant shall, upon thirq (30) days’ prior ii-r-it-ten notice from LandJord in connection \vith any financing of the Demised Fremises, provide Landlord with a current financial statement and financial statements for each -of the two (2) years prior to the current financial statement year. Such statements shall b-; prepared in accordance with generally accepted accounting principles and . shall be audited by independent certified public accountants if such is the normal practice of Tenant. ” . . . . 6. Se&ion Q-13. A new Section Q-13 en ti tled “Rent Commencement Date” is added hereto and contains the folloiving language: “Landlord and Tenant hereby agree that upon determination of t;i, e actual commencement date of the Term, a lerter shall issue from Landlord which will be countersigned by Tenant and which shall ident-ify the actual corr~mencement date of Fixed Rent. *’ --. . . 7. Se&ion Q-14. . A new Section Q-14 entitled “Surrender of Premises; Holding Over” is added hereto and contains the foIlo\ving language: “On expiration of ten (30) days after termination of the Term, Tenant shall surrender to Landlord the Demised Premises and all Tenant’s improvements and alterations in good condition (except for ordinary \vear and tear occurring after the last necessary maintenance made by Tenant and except for destruction of the Demised Premis es covered by Article K) except for alterations that Tenant has the right to remoye or is obligated to remove after the provisions of Article 1-J. Tenant shall remove all its personal pro&rty lvithin the slave stated time period. _ Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant’s personal properv within the time period stated in this Section. Landlord can elect to retain or dispose of in any manner any alterations .or Tenant’s personal property that Tenant does not remove from the.Demised Premises on expiration or termination of the Term as allov;ed or required by ADDENDUM - __ - . . . I r . ihis Lcasfr by giving at least ten (10) days notice to Tenant. Title to any such .- alterations or Tenant’s pzrsor:a’l pleOjjCIef)’ that Landlord elects to retain or dispose of on expiration of th, p ten (IO) day period shall \Iest in Landlord. Tenant v.aaives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or disposition of an)’ such alterations or Tenant’s personal property. Tenant shall be liable to Landlord for Landlord’s costs for storing, removing and disposing of any alterations or Tenant’s prsonal property. If Tenant fails to surrender the Demised Premises to Landlor-d on expiration or ten (10) days after termination of the Term as required by this Section, Tenant shall hoId Landlord hamlless from all damages resulting from Tenant’s failure to surrender the Demised Fremises incIuding without limitation claims m-,ade by a succeeding Tenani resulting from Tenant’s failure to surrender the Demised Premises. ” 8. -..- - --- Section Q‘--15. '_ A new Section Q-15 entitled “option to Extend” is added hereto and contains the following language: “Landlord hereby grants to Tenant an - option to extend th e Term of this Lease for a period of one year exercisable upon prior writien notice from Tenant to Landlord delivered not less than four (4) months prior to the expiration of the Term of this Lease. The option is exercisable only so long as Tenant is in possession of the Premises and has not sublet the Premises or assigned its position in this Lease. The Fixed Rent payable by Tenant during the extended term shall be increased i.n proportion tb any increase in the Consumer Price Index (all items: Los hgeleS/LOng Beach Area) (“Index”) as ptiblished by the United States-Department of Labor for the first month of the extended term in relation to the Index published for the first month of the original Term of the Lease but in ,any event, the Fixed Rent payable during the extended term shall be no less than tk Fixed Rent payable during the original Term of the Lease.” , IN WTnEESS WHEREOF, the parties have executed this Addendum as of the day and year first above written. ADDENDUM Page 3 of 4. * _. . . - a- a-. Date PALOQ?+R 910 BY Bernard W. Gilkore Its . /6, mP -Date “LANDLORD” .i . . * . THE CITY OF CAiUSBAD * k.: P&chasing Officer “TENANT” - I ADDENDUM P,3<Tra A nr A -- . . a 1 2 z 4 E E 7 E s 1C 11 12 12 14 -g 16 17 lt? 19 20 21 22 23 24 25 26 27 28 .-. RESOLUTION NO. 6286 -11-- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAO, CALIFORNIA, APPROVING A LEASE AGREEMENT BETWEEN THE CITY OF CARLSBAD AND PALOMAR 910-BERNARD !d. GILMORE AND AUTHORIZING THE TRANSFER OF FUNDS FOR THE LEASE, BE IT RESOLVED by the City Council of the City of Carlsbad as follows:. 1. That that a certain agreement between the City of Carlsbad and Palomar 910-Bernard IAJ. Gilmore, a copy of which is attached hereto marked Exhibit 'A" and incorporated herein by reference, is hereby approved. 2. That the transfer of three thousand eight hundred fifty-one dollars ($3,851) from account 01-139-2450 to account 01-104-2350 be made for the lease of storage space is hereby authorized and approved. This will leave a balance of $856,581 in the Contingency Fund, 3. That Department of Finance Fund Transfer No. 6 on file in said Department and incorporated by reference herein is approved,' PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad adjourned at a/regular meeting heJd on the 26th day of Juqus t 9 1980, by the following vote, to wit: AYES: Council Members Packard, Casler, Anear, Lewis and Kulchin NOES: None ABSENT: None ATTEST: RONALD C. PACl@RD, Mayor I xIlt!d!&? ALETHA L. RAUTENi(RAN2, City Clerk (SEAL) , - 1200 ELM AVENUE CARLSBAD, CALIFOF+NIA 92008 TELEPHONE: (714)438-5621 October 1, 1980 Bernard W. Gilmore PALOMAR 910 6361 Yarrow Drive Suite "A" Carlsbad, CA 92008 Re: LEASE AGREEMENT WITH THE CITY OF CARLSBAD DATED JUNE 25, 1980 FOR PREMISES OF SUITE "D" In accordance with Section "F" of the above-referenced Agreement, enclosed is an original Certificate of Insurance issue to you as the holder thereof. LEE RAUTENKRANZ, City Clerk LR;adm Enclosure (1) ,_._ _’ I: .: :* : ..; %I .” $4 $9 : ;$ %a :j k& ;?$ I .: >:s ,., :a i $ $i, .*$ i 3 ,;$ g L% ; ; il., ‘5:s .‘$ 1 .” xi ; ; “. . -. .Z” _ : -. i 1. c’ 1: i’ Y _ qAMF ZlrIo ADORiS-: OF AGENCY ‘La Costa Insurance Agency, Inc. 7682 El Camino Real, Suite 101 Carlsbad, CA. 92008 ANiES AFFQRDiNG COVERAGES 1.‘ ,:* ----.-_--- --_-.- --.-.._ -_----A YI\ME AND ADDRESS Of INSURED City of Carlsbad 1200 Elm Avenue Carlsbad, CA. 92008 -. COMPANY I. .; LETTER c ,. ! E;;yRNY D !‘. I .,‘ $’ COMPANY LETTER E d below have been issued to the insured named above and are in force at this time. FMwnhstanding a,$y~quir%i%nt. term or condition xt to which this certificate may te issued or may pertain, the insuranie afforded by rhe poltcios drsc’ibed herein is sub:ecr to all the I This is to certify that policies of insurance lis antract or othe: aocument with rez xc of any 0 terms, e >OMPANY LETTER j$ons and conditions of such p TYf’EOf INSURANCC A --- GENERAL LIABILITY 3 COMPREHENSl’~i FORM 3 PREMISES-OPERATIONS EXPCOS!ON AND COLLAPSE n HALAQD _ UN~ERGf?OIIND HAZARD PRODU3TSr~GMPLETED (!PEUAT13N3 HIZARL) CONTRA:: FUA!. INSURAPKE BROAD FCIW.7 PROPFHIY DAC’AGE __, IF:DLPENIIENT CG,N:RKTORS 3 Fi,lSONAi INJURY -----__-_c-__ AIJTGMOBILE LlABlLtTY N3N Gv:riELi ___- ___----- EXCESS LlABiLiTY Cl UMBREI.LA FORI.! cl OTHERTHAN UMBRELLA FORF.1 ----___ WORKERS’COMPENSATIOF and EMPLOYERS’ LIABILITY - __-.--__-- OTHER J,S”NIPI,ON Cl’ Of’f,ir\TIDNS/lO’Ai I~).S~VCI ._ POLICY NUI,+BER CCLl80-46-02 ---I--_ Limits of LiabililyXMXXXJ ,,,=----j;=z; BODILY INJUPY ’ RODILY INJURY AND PROVERTY C,AMPGE B COMWNCD 2,000,o A:;I;REtiATE PERS(?NFL IN ;U’:Y ROD!tY IXJUW (EFg:ti FiRSOVl RCIDILY INJIJXb % !EACH h2ClD’_hiT) -_--_-__-I_I-__- ._-- ---- .--... -_--.._- .-.-- . ..- Ptwi’k RI Y DAL’kGC BODILY INJLItRY A?i!J PROPEHlY cv>bOncjF $ -_..---- -.--..-. Storage Area : Palomar Airport Business Park, Carlsbad, CA. 6351 Yarrow Dr., Suite C. EIdg.1i.i Bernard W. Cilmore is named as additional insured as respects to the ownership of property. CanselLition: Should dny c/f tliy a!.)nv,e de5c;r!td ;‘.>;ill.itJ5 bc inrrc;llif:d beiore t;q,> c’i;;~~i~,dlttt , t.:.:ic t!-e:.eof. IhIS I’,L.i ,,;I;: :(;x: p<1ny ?.!i/l crXXXXXXxrlsl1 --3o_ d;ry-, wr:!te-e) r13tiCe tc lbv~ hc!o?v ncli:iicj L i:i-ti~~~,.~!i. ilot:irr. XXXXXXXrc; wxkx~~~x~xx~x~x~xxxx~~x~~x~xxx~x~~~~~xx~x~~.x~~~~~~~~~ -.. -.-.. _~ -. .-- k:.‘.!r *FX iiljl)‘?iii OF CF Rlil ii‘l, 1 i / ,5! IIt R Palomar 9!0-Bernard W. Cilmore Palomar Airport Busit~ss Park 6351 Yarrow Dr., Suite C, Bldg. IO Carlsbad, CA. 92008 .._I A:KWESS OF AGENCY * ; .:; COMPANIES AFFORDING COYERACES :’ cl 1 .il ---- z%Y A ‘i .j Protective National Ins. Co. : f . . r -- -- COMPANY LETTER Es- s itI ; _ COMPANY LETTER C 11 j .q COMPANY D I..:; LETTER ““r ..’ . : zl%~ E . ; “P ‘i ,,“: ;,. .( . . La Costa Insurance Agency, Inc. 7682 El Camino Real, Suite IOI Carlsbad, CA. 92008 *AME AND ADDRESS OF INSURED City of Carlsbad 1200 Elm Avenue Carlsbad, CA. 92008 This is to certify th3t pohcies of insurance Listed below have been issued to the insured named above and are in torte at this time. I‘;otwithstanding any requirement, term or condition of any contract or other document with respect to which this certificate may be issued or may pertain, the insurance afforded by the pokies described herein IS subject to a!l the i “’ terms. exclusions and conditions of such ooiicies. . : yixsxxr3Lz -.--- EACH OCCURRFNCE ---._.- - :O?.lPANv LETTER ijcE@x----i i AGGREGATE c- :$ ---..- ‘.. POLICY EXPIRATION DArF Limits of Liabil ____L TYPEOF INSURANCE POLICY NUMBER --t------- __- GENERAL LIABILITY I BODILY INJURY I3 COMPREHENSIVE FORM CGLl80-46-02 7/l/81 I PAOPE RTY IIAMACE /?cl PREMISES-OPERATIONS D EX;;I’;FN AND COLLAPSE L-l UNDERGROUND HAZARD CONlRACTUAL INSURANCE n NROAO FORM PROPERTY ‘: tN:::::ENT CONTRACTOR: PERSONAL IN JURY t- . BODILY INJURY AND PROPERIY DAMAGE COMB!NEII ? -. I- I PERSONAL INJURY I KIDiCY IKJtJHV (FA<:11 PERSON\ I S AUTOMOBILE LIABILITY 2 ~OM”RF~IENS’Vi FORW 0 ‘v’, NE 0 i tiiRLD NrJN r,‘Wi\rED ____--.- EXCESS LIABILITY cl UMBRELLA FOAM cl OTHERTHAN UMBRELLA FORM ---- WORKERS’COMPENSATlOf I flOL)ItY INllJRY *. (EACH ACCIDENT) ROOlt Y INJURY AND PROF’FRTY IIA!,tAGE C.C>MMINEO % --__-- -----------+c i, 7: . . *.LI di‘Ul‘ii ., ..$ ., ? f 1.5 .- and EMPLOYERS’ LIABILITY ------- OTHER -- LV )xwri $gfg&&q* \I OF !~PLIIPllUNSiLOZAIIONS/\iE Storage Area : Palomar Airport Business Park, Carlsbad, CA. Cancef!%tir)n: Should any of t/le above dCISCrii~ed pol~ctes bc C?3fli?t:IIC(i befottt k/l,: r,x:iir C1:zr:f~ &:te liitli-tef. the issliirig corn- parly will endesvor to rn;lil -+&. d3ys written notice to ttic tl2!:3,,2 rI&r:-t,~i CtlrtificJie ttoldcr. but fdiliirc: to mail such notice shall inloo. Sf- I10 oill!p,:5tion or li;ibilil/ of nrly ki, id ui,*r, ttje C'Oii.JJ,!:Iy N/:.W AhLI AI>I,P; ‘;\ OF ‘.t !I r!il’;Al f Ho: of i( Palomar Airport Business Park 6351 Yarrow Dr., Suite C., Bldg. Carlsbad, CA. 92008 I WTf &SUfD -.-~. 9/16/80 -- .._. - ._ -- ..-. . . -.._._ ~.-- ..- .._..._.. .- -- : IO PALOMAR 910 ASSOCIATES, LTD. *b ELI PERUAN REALTY CO. 1660 HOTEL CIRCLE NORTH. SUITE 216 SAN DIEGO. CA 92156 296.5160 February 22, 1981 Dear Tenant, Please be advised that the fiberglass skylites in the buildings located at 6351 & 6361 Yarrow Drive, Carlsbad, are not to be opened. These skylites are designe'd to be automatically released under certain fire conditions. Your opening these skylites will probably result in their not performing properly if a fire should occur in your premises. For your personal safety as well as for the other occupants in your building, please do not open or otherwise tamper with your skylites. Incidentally, we have just incurred a minor maintenance charge to-have all of the skylites checked and appropriate resetting of latches so that the skylites should function properly at this time. Thanks for your cooperation. Sincere1 , 7 &? /&&&+ Eli Perlman, C.C.I.M. Puonrm 910 ASSOCIATES, LTD. $6 ELI PERLMAN REALTY CO. 1660 HOTEL CIRCLE NORTH. SUlTE 216 SAN DIEGO. CA 92108 299.5180 October 1, 1981 City of Carlsbad 1200 Elm Ave. Carlsbad, Ca. 92008 Attn: Ms. Ruth Fletcher (or Marilyn) Purchasing Dept. Dear Ms. Fletcher: Thanks for your recent check in the amount of $2,277.28 which included rent for the month of October in the'amount of $1,555.20. Per discussion with your office last week, I have computed the proper rent for the month of October and the remainder of our lease extension for the period October 1, 1981 to September 30, 1982. The rent for the space you lease at 6351 Yarrow Drive, Suite ‘ID” is $1,732.49 per month, computed as follows: - Consumer price index for Los Angeles-Long Beach, Urban Wage Earners and Clerical Workers (All Items): August 1980 = 250.1 August 1981 =’ 278.6 OriginaT Rental Rate = $1,555.20 Increase is 278.6 + 250.1 = 114 = 11.4% Increase is $1,555.2 x .114 i $ 177.29 Original 1,555.20 New Rental Rate $1,732.49. Per the terms of our lease extension your new rate for the period October 1, 1981 to Sept. 30, 1982 is therefore $1,732.49.per month. Your last month's rent, which is payable in advance is also increased to'this amount. You therefore owe us $177.29 for the corrected October rent plus another $177.29 for the increased last month's rent or a total of $354.58. All other terms of our lease will remain unchanged. Your transmittal of the required check and your signature below will acknowledge your concurrence and recognition of this document as a one year extension of our lease, and my compliance with your option agreement. AGREED yg.:: r yJJJ?& cr/l-\ Eli Perlman, Managing Partner FarCTTV-OFAD - Pahmr 910 Associates, Ltd. c/o Elf PQFt&Wl h~lty &a. 1660 Ii&l Cl?'CtQ brth, &rftQ 216 San D~Q(z~, CA 92108 The City of Carlsbad till mm the lsasa far 6§51 Yarrw Drfva, fufte *Cn, for one year Mglnnlng &Sober 1, 1982, Ruth flQtck Purch~rOng Offlcm RF:lml cc: Crntrrl S~dcQt 81mtor / :$$+;. -! .,. 7 .$<.._ _. ; ,T ,.: /.. . . . . ‘ l ,I’,.-’ .. . >, X’. . . I .!Y’ ” .z.: >.( j . . 1, .I ; . . ‘. ‘.. . . .,I_.. I A.,.1. , 4.‘. _, -.- ” %.. .,:~,f$j$i$ ,+y&; .’ , ,-:, ‘. &.o:e%~, 910 &tSOCLX&t. I;TDw 2; :f’:,- 1,;. ,yy” ‘. ‘I 8’ .~~-..*~,I&* ~, i! ‘:. , ,: . 9 3LI PER’ZlAZr’ RZ2L.T.l CO; ;‘.:I ,/ ,. ..:-~<i’.;*.,,, ,, ‘, .-- .__ ‘4 1660 HOTEL CIXLL NORi*. SUITS 21s ,,._: . SAN rdZG0. CA 92w - , i ,r i -:. 29tb.3100 -. ,-:, ,I .* -“. . ‘. _,2 IAi&,~ : . ‘-.=: _. _ .: _. ;,I,9i~.,Ly. _ .,.. :L- .’ _ ,?. ,‘; I.. ‘I’ *,” .: :\:. . ,. .t.. :, I ,.; .I Au&t -24, 1982 .L ‘.:1..~.:~“.~‘,,~” c . ,, i.. I _ ._’ . . . , ~. . *,p :. . . ,,:;:{,:; ~~;,;,_~:~~‘CL,~~ ,~ . _. . . City of Carlsbad 1200 Elm Ave. : Carlsbdd, Ca. 92008 . . Attn.: Ruth Fletcher . . ., Sil : . -.- .a. .,. y ,;. ._ ; *x.-.,,.. :,. _I ,_ .-:~A:$+ .:, :..~;,-;,,~~‘~~~~; ,‘;;; -. *..;.q :5! +:: 2? ‘:. _:::j~:,~~~~~~~ i’; I ,ii. .,. :;:::.: ; .::;‘.y ; , ,. ~. j ‘L <,jF 1: ;;:;; 1 ., ,..~“j-+* ,-.. f++>?& ij$;.‘. ,: ;f$y:$y$ ‘3~~ ‘_’ .!a ,%I , .. ‘-;T- : s you are, going. to r-&n&w yours-l&se .1*q~‘1-+. for-6351 YarrowDrive-~?Suite-C;%:.Carlsbad, Ca,:: .for 1 year: beginning z..; 1. Oct. 1, 1982:> * _. _ I, ',. .:. Per our discussion today the base rent for thjs new period will be determined by adjusting your current‘rat&‘.of $?.;732-,49 1’ per. month to I reflect. the .i ncrease i$ the-.Con.sumer Price- Index for the one period ending July”31, 1982, i : ‘..Y& ,‘i I; .,., ; _. . . _ . I . Consumer Price Index for L.S. -Long Beach, Urban G/age Earners a!d Clerical Workers {All Items) July 1981 - 276.3 . July 1982 - 293.0 - Jncrease‘is 293.0-s 276.3 = I.-O6 = 6.0%. ,“- ,. ;: ; ,. _* . ., .: -‘, ._,“,,” , *.:.,- Current,f,rent ‘, ‘3 z”L ,’ .. . .,_ ,;.,,: rncrease..:.o~;,h~,,-~: _....,.. . . . ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 3 . -:’ ‘+a i-+.+y.~. v. ,.,*&l&&&+f&, -.;..:+,*.t~>,.& . The.last month’s rent, payable in advance, is also increased to this amount. Your Oct. 1, 1982 check should therefor be: Base rent . $I ,336.44 ‘. Increa.se:-in lastmonth’s rent 103-95 OCTOBER 31, 1982 CHECK $1,940.39- Receipt of your signature below wilj indicate our mutual concurrence that our current lease has been extended until September 30, 1983, and that with the exception of the above rate change, all- other terms of this lease remain unchanged. .; 1 Sincerely, . . & g4L&ii’ . Eli Perlnan, ., Hanaging Partner AGREED / ‘I:‘--.. ,-:;;,.-; .w -i ’ ‘,. RUTH FLETCHER . ._ for Ci ty of Cart sbad ..;.-.,:.,, +:. ,“...T’ -.,.. , .>L ~ .‘“,,,2..‘,’ b .: 3.. -<. -- :. ~; -I Ij - ( rt . n .* P- . . : ii I i i STANDARD FORM MULTIPLE OCCUPANCY LEASE . , Lessor ,PP,L~~A~, ?lO ASSOCIATES, LTD. . . . . . . . . . . . . . . . . Lessee CITY .OF. .CrAflL.S.!A?. . . . . . . Datedasof ....-?U&.Y..!3 9 1983 .. ... . .................. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F ’ . . . .I . 4 A. DEFINED TERMS, EXHIBITS. TABLE OF CONTENTS, PREMISES, COMMON AREAS. 1. Defined ?‘enns. Each reference in this Lease to any of the following titles shall incorporate the data stated for that title: Other tenns are as defined in the Lease. Landlord.PALOMAR 910 ASSOCIATES LTD. . .., ..) .., . ., ., . . . . . . . . . a .......i................. . .._..........,..,.._.,.... . . . . . . . . . . . . . Tenant: CITY OF CARLSBAD ., _....... ., . . . . ._ .._ _............... a Building Location: StreetAddress: 6351 Yarrow Drive; Suite C City: Carlsbad County: San Diego State: California Tenant’sFloorSpace*Approximately 5,760 sq. ft. Total Rentable Floor Space: 4 2 ,4 8 0 s q . f t . . . Term:..3 .years. : ---------- Fixed Rent :F E = = ? $ pe~P~~irt= Oct. 1, 1983 - Sept. 30, 1984 $2,000 per month Oct. 1, 1984 - Sept. 30, 1985 $2,150 per month Oct. 1 1985 - Sept. 30, 1986 Tenant’s Share of Operating Expenses: 0. %. $2,450 per month i Tenant’s Share of Impositions: !? .%. Tenant’s Share of Insurance Expenses: 0. %. Scheduled Term Commencement Date: Oc t . 1, 1983 Liability Insurance Amounts: Bodily Injury per person: $500,000 Bodily Injury per occurrence: $1,000,000 Property Damage: 500,000 Boiler Insurance: 500,000 1 Landlord’s Address: 1660 Hotel Circle North, Suite 216 San Diego, Ca. 92108 . . .., -St& . .._. . ..‘....,,,. ., . . . . .._..._..... Tenant’s Address : 1200 Elm Street, Carlsbad, Ca. 92008 . stmet . , Permitted Uses: Any lawful uses consistant with the Declaration of Covenants and Restrictions Declaration of Covenants and Restrictions: copy delivered to tenant Recorded: .October l.9 1??,4,,P_mended,February 25, 1977 and May 23, 1977 2. Table of Contents. Page A. Defined Terms;‘Exhihits, Table of Contents, Premises, Common Areas 1 B. Landlord’s Improvements . . . . 3 : C. Term .._..__ ._._._._........................r.. D. Rent . .._......._..._........,.................._..... . __....._ ,, E. Impositions . 5 5 6 F. Insurance _..... . . . . . . . . CL Repairs, Maintenance, Alterations, Operating Expenses H. Tenant’s Fixtures and Personal Property . 1. Utilities and Boundaries J. Use of Premises . K. Ihnr;qe nr Destruction I a. Eminent Domain . Xl. Ih~farlll ., ,:............._ N. Assiglwwnt and Subletting 0. Offset Shtement, Attornment and Subordination P. Notices Q. lMiscellaueous R. Swcessors Bound _............, . . . . . . . . . 7 8 9 9 10 10 11 12 14 16 16 17 18 2 4 The following Exhibits are attached to this Lease after the signatures and are incorporated herein by reference thereto. Description : Exhibit A - Tenant’s Floor Plan. 3. Premises. Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant’s Floor Space (“Demised Premises”) in the Building extending from the top surface of subfloor to the bottom surface of ceilings ahove but excluding the common stairways, stairwells, hallways, accessways, and pipes, ducts, conduits, wires and appurtenant fixtures serving exclusively or in common other parts of the Building, and if Tenant’s Floor Space includes less than the entire rentable area of any floor, excluding also the remainder of the Floor Common Area. 4. Common Areas. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reason- able rules from time to time made by Landlord of which Tenant is given notice: (a) BuiZlinC: Common Areas. The common stairways and accessways, loading docks and platforms and any passageways thereto, and the common pipes, ducts, conduits, wires and appurtenant equipment serving the Demised Premises; (b) Floor Common Areu. If the Demised Premises include less than the entire rentable area of any floor, the common lobbies, hallways, toilets and other common facilities; and (c) Land Common Are& Common walkways, sidewalks, and driveways necessary for access to the Building and parking spaces or area from time to time maintained on the real property upon which the Building is located (“Lot”) and to the extent from time to time arranged by Landlord, on adjacent real property. : 5. Lundlords Reserved Rights in Common Areus. Landlord reserves the right from time to time, without unreasonable interference with Tenant’s use: ( a ) Building: Changes. ~TO install, use, maintain, repair and replace, pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the ceiling sur- faces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts. conduits, wires and appurtenant meters and equipment included in the Demised Premises which are so located or located elsewhere outside the Demised Premises; (b) Botrntlaq Chunges. To change the lines of the Lot; (c) FucilittJ Changes. To alter or relocate any other common facility; provided, however, that sub- stitutions are substantially equivalent or better in quality. 3 Preliminary Plans and then, when prepared, Final Plans. Final Plans shall III as reilsonably possible from the date hereof, subject, however to any period ndlord ill such preparation as a result of requests hy Tenant for changes in F hereof. Within ten (10) days after delivery of the Final Plans, Ten lnrity and precision, any corrections or changes necessary to bring suhstantiul confor with the Preliminary Pla~ls, except that Tenant may not object to ment or refinemei e Preliminary Plarw. Failure to deliver to Landlord written n &id ten ( 10) day period shall constitute approval of the Following such npprov f the Final Plans, both parties shall endorse approval fo ing purposes thereon, in duplicate, and there anges may l)e made only in accordance with Set 2. Construction. Landlord, at its sole expens Premises substantially iI\ 1 proceed diligently with constru nd completion of the Demised accordant h the Plans. Lalldlord shall co te the Demised Premises and they shall be ready for occupancy, as defi in Section B-5, hy Tena the Scheduled Term Com- mencement Date; provided, however. Scheduled Term Date shall be extended for a period of time ecpd to the period ( lay or delays enc( construction because of fire, earthquake, il nlent weather, or r acts of Cod, acts of the public enemy, riot, insurrection, governmental regulations ( or supplies or the transportation thereof, strikes or boycotts, shortages of materi; or y entry rmder the provisions of Section B-8, changes in the Plans pursuant to Section B-4, ause beyond the control of Landlord. 3. Fcdwe to Complete Construction. 4. Chqp?c?s in Platu. ‘. ., \ . : * I * instruction. ork shall be done in a good and workmanlike manner and in compliance with all inances, by-laws, regulations and orders of governmental authority and of the In connection with the construct1 struction Representative, A party may desi y;@l&arty shall be bound. by its C,,- struction Representative by giving wntten notice to the other party. 8. Early Entry. dlord, Tenant may at an tall such trade fixtures ) Tenant’s early entry s Tenant shall execute andlord; (iii) Tenant hall pay utility charg ises for storage of i en consent of Landlord. C. TERM. 1. Commencement of Term. The term of this Lease shall commence upon the-earliest-of&&&owing-da~ October 1, 1933 and shall terminate September 30, 1986. fe)-Sfhec&kkd~~*C~- fne&-Dete,-e+8ke~d: ~8~-Tka$a~~~~sb~be~ise$P~~~~are~-~~ffe~,-Af~f~~~~B-5- GllJwe+er i D. RENT. 1. Fixed Rent. Tenant shall pay the Fixed Rent to Landlord in advance upon the first day of each calendar quarter of the Term, at Landlords address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any deduction or setoff whatsoever. If the Term shall commence and end on a day other than the first day of a calendar quarter, then Tenant shall pay, upon the commencement date of the Term or first day of the last calendar quarter, a prornta portion of the Fixed Rent described in the foregoing paragraph, prorated on a per diem basis, with respect to the portions of the fractional calendar quarter included in the Term. 2. Deposit. Upon execution of this lease, the existing $1,836.44 deposit under the preceding 1982-1983 lease shall be increased $163.56 to a total of $2,000. This deposit will not be used as payment for Sept., 1983 rent, but shall be assigned over to this lease for payment against the last month's rent of this lease. On Oct. 1, 1984 and on Oct. 1, 1985, this deposit shall be increased to $2,150 and to $2,450, respectively. 5 3. Interest. If any installment of Rent is not paid promptly when due, it shall bear interest at the lower rate of either ten percent ( 10% ) or the maximum rate permitted by law, from the date on which it is due until the date on which it is paid regardless of whether or not a notice of default or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time and in the manner herein specified. E. IMPOSITIONS. .' . . I , .-- . ' , -iinprovements; . . s . . ftt)-fkt)f-9lIch-stN -nf.twbeu- . . . . . . -l4eqdMewnl...\rbem- . -e 3. Limitntion. Nothing contained in this I.ease shall require Tenant to pay any franchise, corporate, estate, inheritance, succession, transfer tax of Landlord, or any income, profits or revenue tax or charge, upon the net income of Landlord; provided, however, that if at any time during the Term under the laws of the United States Gov- ernment or the state in which the Demised Premises are located, or any political subdivision thereof, a tax or excise on rent, or any other tax however described, is levied or assessed by any such political body against Landlord on account of rentals payable to Landlord, Tenant shall pay one hundred percent (lO@%) of any said tax or excise on rent as Additional Rent. 4. Personal Property Taxes. Tenant shall pay or ca~~sc tn bc paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures. inventories and other personal property placed in and upon the Demised Premises hy Tenant. -. F. INS~I~~ASC~C. 1. Fir rml Ehtunrld Coocwg~~. 11uring tht- Term I,andlord shall procur’ and maintain in full force and effect with respect to the Building, :I policy or policies of fire insurance with extended coverage endorsement attached, including vandalism and malicious mischief coverage. :uld any other endorsements required by the holder of any fee or leasehoid mortgage in an :Imount equal to one hundred percent ( 100%) of the full insurance replacement value (replace- ment cost new. inch~tlin~ debris remnval. and demolition) thereof. i . . 9 I. Pfthlk Liahthy. Tenant shall. at its own cost and expense, keep and maintain in full force during the Term, a policy or policies of comprehensive public liability insurance, written by an insurance company approved by Landlord in the form custonw-y to the locality. insuring Tenant’s activities with respect to the Demised Premises against loss, damage or liability for personal injury or death of any person or loss or damage to property occurring in, upon or about the Demised Premises in amounts of not less than those set forth in Section A-l hereinabove for injury or death of any one person, for injury or death of all persons in any one occurrence, and for property damage and for damage from boiler. if applicable; provided, however, that if at any time during the Term, Tenant shall have in full force and effect a blanket policy of public liability insurance with the same coverage for the Demised Premises as described above. as well as coverage of other premises and properties of Tenant. or in which Tenant has some interest, such blanket insurance shall satisfy the requitement hereof. 3. Rental Abatement Insurance. . . +?3l.l&- mm-l & :. , 4. lnswunce Certificates. i Tenant shall furnish to Landlord, upon the date of commencement of this Lease and thereafter within thirty (30) days prior lo the expiration of each such policy, a certificate of insurance issued by the insurance carrier of each policy of insurance carried by Tenant pursuant hereto. Said certificates shall expressly provide that such policies shall not be cancellable nr subject to reduction of coverage or otherwise be subject to modification except after thirty (30) day’s prior written notice to the parties named as insureds in this Sec- tion F-4. Landlord, its successors and assigns, and any nominee of Landlord holding any interest in the Demised Premises, including, without limitation, any ground lessor and the holder of any fee or leasehold mortgage, shall be named as insureds under each such policy of insurance maintained by Tenant pursuant to this Lease. 5. Tenant’s Failure. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for any loss or cost resulting from said failure. This section F-5 shall not be deemed to be a waiver of any of Landlord’s rights and remedies under any other section of this Lease. 7 6. Waioer of Suhrogulion. Any policy or policies of fire, extended coverage or similar casualty insurance, which either party obtains in connection with the Demised Premises shall include a clause or endorsement denying the insurer auy rights of suhrogntion against the other party to the extent rights have been waived by the insured prior tu the occurrence of injury or loss. Landlord and Tenant waive any rights of recovery against the other for injury or loss due to hazards covered by insurance containing such a waiver of subrogation clause or endorse- ment to the extent of the injury or loss covered thereby. 7. Tenant’s Fixtures. * Tenant shall assume the risk of damage to any fixtures which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises. 8. Indemnificution of Lfmdlortl. Tenant shall indemnify and hold Landlord and the Demised Premises ,harmless from and against (i) any and all liability, penalties, losses, damages, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of any injury to any person or persons or any damage to any property as a result of any accident or other occurrence during the term of this Lease occasioned by any act or omis- sion of the Tenant, its officers, employees, agents, servants. subtenants, concessionnaires, licensees, contractors, invitees or permittees, or arising from or growing out of the use, maintenance, occupation or operation Of the Demised Premises during the term of this Lease, and (ii) from and against all legal costs and charges, including reasonable attorneys’ fees, incurred in and about any of such matters ai~d the defense of any action arising out of the same or in discharging the Demised Premises or any part thereof from any and all liens, charges or judgments which may accrue or be placed thereon by reason of any act or omission of the Tenant; provided, however, that Tenant shall not be required to indemnify Landlord for any damage or injury of any kind arising as the result of Landlord’s wilful acts or those of its agents or employees. . . . G. Rw+s, MAINTENANCE, ALTE~TIONS. OPERATING EXPENSES 1. Operulinc Expelue. air and management of the building and walks, driveways, parking and loading areas, lawns and landscaping. 2. Tenmtrt Repuirs ud Maitrterwnw. Teuaut shall. at Tenant’s sole cost iuld expense. keep alld maintain the Demised Premises, subfloors and floor coverings in good repair and iu a clean and safe condition. casualties covered by insurance coverage excepted to the exteilt of proctwls received. Tellaut shall, at Tenant’s own .expense, immediately replace all glass in the Demised Premises that may he broken during the Term with glass at least equal to the specifica- tion and quality of the &lss so replaced. 3. Landlord Repairs unff Maintenance. Landlord shall, at its expense, after written notice from Tenant, repair in a prompt and diligent manner any damage to structural portions of the roof aud hearing willIs of the Demised Premises; provided, however, that if such damage is caused by an act or omission of Tenant. then such repairs shall be al Tenant’s expense, 8 payable to I,al~dlord as Additional Rent hereunder. There shall be no abatement of Rent during the perfoml- ante of such work. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or conditions of the Demised Premises. Tenant waives any right to make repairs at the expense of L~mtllord under any law. statute or ordinance now or hereafter in effect. 4. inspection of Leused Prenlises. Landlord, at reasonable times, may go upon Lttld into the Emised Premises for the purpose of inspecting the same, or for the purpose of inspecting the performance by Tenant of the terms and conditions hereof, and for the purpose of affixing reasonable signs and displays and showing the Demised Premises to prospec- tive purchasers, tenants and lenders. 5. Workmunlike (luaiity. All repairs, alterations, additions, and restoration by Landlord or Tenant hereinafter required or per- mitted shall be done in a good and workmanlike manner and in compliance with all applicable laws and law- ful ordinances. by-laws, regulations and orders of governmental authority and of the insurers of the Building. - 6. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at the request of Tenant and shall keep the Demised Premises free and clear of all mechanic’s and materialmen’s liens in connection therewith. Landlord shall have the right to post or keep posted on the Demised Premises, or in the immediate vicinity thereof, any notices of non-responsibility for any construction, alteration or repair of thr Demised Premises by Tenant. If any such lien is filed, Landlord may, but shall not be required to, take such action or pay such amount as may be necessary to remove such lien; and Tenant shall pay to Landlord as Additional Rent any such amounts expended by Landlord together with interest thereon at the highest legal rate from the date of expenditure. .., H. TENANT’S FIXTURES AND PERSONAL PHCWERTY. Tenant, at its expense, may install any necessary trade fixtures. equipment and furniture in the Demised Premises, provided that such items are installed and are removable without damage to the structure of the Building. Landlord reserves the right to approve or disapprove of curtains, draperies, shades, paint, or other interior improvements visible from outside the Demised Premises on wholly aesthetic grounds. Such improve- ments must be submitted for Landlord’s written approval prior to installation, or Landlord may remove or replace such items at Tenant’s sole expense. Said trade fixtures, equipment and furniture shall remain Tenant’s property and shall be removed bj- Tenant upon expiration of the Term, or earlier termination of this Lease. Upot~ Landlord’s prior written approval, Tenant may make structural alterations and may also install tempor- ary improvements in the interior of the Demised Premises, provided that such temporary improvements are installed and are removable without damage to the structure of the Building. Such temporary improvements shall remain the property of Tenant and shall be removed hy Tenant upon expiration of the Term or earlier termination of this Lease. Tenant shall repair, at its sole expense, all damage caused by the installation or removal of trade fixtures, equipment, furnihire or temporary improvements. If Tenant fails to remove the foregoing items on tcrminatioll of this Lease, Landlord may keep and use them or remove any or all of them and c’;msc thetn to he stored or sold irl accordance with npplicnhle law. I. UTILITIES AND B~WJDAHIES 1. Utilities. Tenant shall be solely responsible for and protnptly pay all charges for heat, water, gas, electricity illld ;my other utilities used or cqnsumed on the Demised Premises. Landlord shall not be liable to Tenant for inter- 9 ruption in or curtailment of any utility service, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement in whole or in part hereunder. If any such utilities are not separately metered, Tenant shall pay a proratn share, based on use, as determined by I,andlord. 0 -. Easements. Landlord reserves the right to (i) alter the boutldaries of the Lot and (ii) grant easements 011 the Lot and dedicate for public use portions thereof withotrt Tenant’s consent, subject to the provisions of Section O-2 hereof, and provided that no such grant or dedication shall interfere with Tenant’s use of the Demised Premises or otherwise cause Tenant to incur cost or expense. From time to time. and upon Landlord’s demand, Tenant shall execute, acknowledge and deliver to Landiord or in accordance with Landlord’s instructions any and all documents, instruments. maps, or plats necessary to effectuate Tenant’s covenants hereunder. 1. General. J. USE OF PREMISES. The Demised Premises shall be used for the Permitted Uses, consistent with the Declaration of Covenants and Restrictions and any supplement thereto. Tenant shall, at Tenant’s sole cost and expense, comply with all of the requirements of municipal, county, state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertailling to the Demised Premises, Building and Lot, and secure any necessary permits therefor and shall faithfully observe. in the use of the Demised Premises, Building and Lot, all municipal and county ordinances and state and federal statutes now in force, or which may herenfter be in force. Tenant shall obtain any required certificate of occupancy’ with respect to its use of the Demised Premises, Building and Lot, within thirty (30) days from the commencement of the Term hereof and shall deliver a copy thereof to Landlord within said thirty (30) day period. Tenant in its use and occupancy of the Demised Premises shall not commit waste. nor overload the floors or structure, nor subject the Demised Premises to any use whic!l would tend to damage any portion thereof. 2. Signs. . . Any sign placed or erected \y Tenant OII the Demised Pretnises, Building or Lot, except in the interior of the Demised Premises, shall contain only Tenant’s name, or the natne of any affiliate of Tenant actually occ-upying the Demised Premises, and no advertising matter. No such sign shall be erected until Tenant has obtained Landlord’s written approval of the location, material. size, design and content thereof and any necessary permit therefor. Tenant shalt remove any such sign upon termination of this Lease and shall return the Demised Premises to their condition prior to the placement or erection of said sign. i I 3. Purkirq Access. III addition to the- gettc4 obtigatioll of Teltatlt to co111p1y with laws and without limitatiotl thereof, l.undlord shalt not be lial)le to Tetliltlt nor shall this Lease be affected if ally parking privileges appurtenant to thr I>rmisecl Premises. Httiiding and I.ot art- impaired by reason of any moratorium, initiative, referendum, stnttltr, rcg:lll;ttion, or oth~~r govt~rnmental decree or ;lctiotl which could itI any manner prevent or limit the parkillg rights of Tenant llc-reutlder. Atty pnvrtttnt~ttt;tl charges or surcharges or other monetary obligations irnposcd rc>lati\rt. to parking tights with rrspt-c-t to the Delnised Premises. Building and Lot shall be considered as 111~1~~~sitiotls atd shall 1~. l)ayuble t)y ‘I‘ellatlt under the provisions of Section E hereinabove*. K;. DAhlACE OR DESTRUCTION. 1. Hectm.stnrc~tion. of the Denlied Premises are damaged or destroyed during the Term, Landlord shall, except as hereinafter provided, diligently repair o‘r rebuild them to substantially the condition in which they existed immediately 10 -- prior to wch damage or destruction; provided that any damage which is estimated in good faith by Landlord to be under Five Thousand Dollars ($5,OOO.tXl) shall be repaired by Teiiant. and Landlord shall reimburse Tenant upon demand for espenses incurred in such repair work to the extent of any proceeds received by Landlord from extended coverage insurance described in Section F-l. 9 M. Rent Abatement. Rent due and payable hereunder shall be abated proportionately, but only to the extent of any proceeds received by Landlord from rental abatement insurance described iii Section F-3, during any period in which, by reason of any such damage or destruction. Tenant reasonably determines that there is substantial interference with the operation of Tenant’s business in the Demised Premises, having regard to the extent to which Tenant may be required to discontinue its business in the Demised Premises. Such abatement shall continue for the period commencing with such damage or destruction and ending with a substantial completion by Landlord of the work of repair or reconstruction which Landlord is obligated or undertakes to do. If it be determined that continuation of business is not practical pending reconstruction, Fixed Rent due and payable hereunder shall abate to the extent of proceeds from rental abatement insurance until reconstruction is substantially completed or until business is totally or partially resumed, whichever is the earlier. . 3. Excessioe Damage or Destruction. If the Building is damaged or destroyed to the extent that Landlord determines that it cannot, with reasonable diligence, he fully repaired or restored by Landlord within one hundred eighty (180) days after the date of the damage or destruction. the sole right of both Landlord and Tenant shall he the option to terminate this Lease. Notwithstanding the fact that the Demised Premises have not been damaged or destroyed, Landlord shall detennine whether the Building can he fully repaired or restored within the one hundred eighty (180) day period, and Landlords determination shall be conclusive on Tenant. Landlord shall notify Tenant of its determination, in writing, within thirty (30) days after the date of the damage or destruction. If Landlord determines that the Building can be fully repaired or restored within the one hundred eighty (180) day period, or if it is determined that such repair or restoration cannot be made within said period but neither party elects to terminate within thirty (30) days from the date of said determination, this Lease shall remain in full force and effect and Landlord shall diligently repair and restore the damage as soon as reason- ably possible. ‘- 4. Uninsured Casualty. Notwithstanding anything contained herein to the contrary, in the event of damage to or destruction of all or any portion of the Building which is not fully covered hy the insurance proceeds received by Landlord under the insurance policies required under Section F-l above, Landlord may terminate this Lease by written notice to Tenant, given within tl%rty (30) days after the date of notice to Landlord that said damage or destruction is not so covered. If Landlord does not elect to terminate this Lease, the Lease shall remain in full force and effect and the Building shall he repaired and rebuilt in accordance with the provisions for repair set forth in Section K-l hereinabove. 5. Waiver. With respect to any destruction which Landlord is obligated to repair.or may elect to repair under the terms of this Section K. Tenant hereby waives all right to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law to tenants, except as expressly otherwise provided herein. L. EMINENT DOMAIN. 1. Totul Condemnation of Deni~ed Premises. If the whole of the Demised Premises is acquired or condemned by eminent domain, inversely con- demned or sold in lieu of. condemnation, for any public or quasi-public use or purpose (‘Condemned”), 11 h their the ‘t’erm shall terminate as of the date ot title vesting iii such proceeding, and bent shall be adjusted to the date of termination. Tellant shall immediately notify I.;u&nd of any such occurrence. 2. Partial Condemn&ion. If any part of the Demised Premises is partially Condemned, and such partial condemnation renders the Demised Premises unusable for the business of the Tenant, then the Term of this Lease shall terminate as of the date of title vesting in such proceeding and %errt shall be adjusted to the date of termination. If such condemnation is not extensive eiiough to render the Demised Premises unusable for the business of Tenant, then Landlord shall promptly restore the Demised Premises to a condition comparable to its conditioll immediately prior to such condemnation to the extent of any condemnation proceeds recovered by Landlord, less the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting the Fixed Rent shall be reduced as reasonably determined by Land- lord. If any parking areas are condemned, Landlord has the option but not the obligation to supply Tenant with other parking areas, 3. Landlords Award. i If the Demised Premises are wholly or partially condemned, then, subject to the provision of Section L-4, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority. 4. Tenant’s Award. ’ Tenant shall have the right to claim and recy)ver from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant’s own right on account of any and all costs or loss (including loss of business) to which Tenant might be put in removing Tenant’s merchandise, furniture, fixtures, leasehold improvements and equipment to a new location. 5. Temporary Condemnation. If the whole or any part of the Demised Preniiscs shall be condeinned for any temporary public or quasi-public use or purpose, this Ideiise shall remaili in effect and Tenant shall be entitled to receive for itself such portion or portions of any award made for SUCII IIW with respect to the period of the taking which is within the Term. If ;I temporary condemnation remains iii force at the expiration or earlier termination of this Lease, Tenant shall pay to Landlord ? SUIJI equal to the reasonable cost of performing any obligations required of Tellant by this Lease with respect to the surrender of the Demised Premises, including, without limitation repairs and maintenance required, and upor~ sucl~ paymeiit Tenant shall be excused from any such obligations. If a temporary condemnation is for a11 established period which extends beyond the Term, the Lease shall temiinate as of the date of ~cupancy by the condemning authority, and the damages shall be as provided in Sections L-3 and L-4 and Rent shall be adjusted to the date of occupancy. 6. Xotice utirl ~1:‘xfJerrtiotr. Landlord shall. imniediately upott service of process in connection with any condemnation or potential condemnatiort, give Tenant notice iri writing thereof. Tenant shall immediately execute and deliver to the I.aiidlord ali instrumeiits that may be required to effectuate the provisions of this paragraph. M. DEFAULT. 1. Eoellts of Ikfartlk The occurrciice of atry of the following events shall constitute an “Event of Default” on the part of Tenant with or without notice from Landlord: See Addendum 12 . . . a. Vacation or Abandonment. Vacation or abandonment of the Demised Premises; b. Payment. Failure to pay any installment of Rent or other monies due and payable hereunder upon the date when said payment is due, the failure continuing for a period of five (5) days after said payment is due; c. Performance. Default in the performance of any of Tenant’s covenants, agreements or obligations hereunder, except default in the payment of Rent or other monies, the default continuing for thirty (30) days after written notice thereof from Landlord; d. Assignment.” A general assignment by Tenant for the benefit of creditors; e. Bankruptcy. The filing of a voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant’s creditors immediately unless involuntary, in which case when the petition remains undischarged for a period of thirty (30) days; f. Receioer. The appointment of a receiver to take possession of substantially all of Tenant’s assets or of this leasehold, the receivership remaining undissolved for a period of thirty (30) days; or g. Attuchent. Attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this leasehold, the attachment, execution or other seizure remaining undismissed or undischarged for a period,of thirty, (30) days after the levy thereof. 2. Landlords Remedies. a. Abundonment. If Tenant vacates or abandons the Demised Premises, this Lease shall continue in effect. Landlord shall not be deemed to have terminated this Lease other than by written notice of termination from Landlord, and Landlord shall have all of the remedies of a landlord provided by Section 1951.4 of the Civil Code of the State of California. At any time subsequent to vacation or abandonment of the Demised Premises by Tenant, Landlord may give notice of termination and shall thereafter have all of the rights hereinafter set forth. -0 b. Termination. Following the occurrence of any Event of Default, Landlord shall have the right, so long as the default continues, to terminate this Lease by written notice to Tenant setting forth: (i) the default, (ii) the requirements to cure it, and (iii) a demand for possession, which shall be effective three (3) days after it is given or upon expiration of the times specified in Section M-l hereinabove, whichever is later. c. Possession. Following termination under paragraph b, without prejudice to any other remedies Landlord may have by reason of Tenant’s default or of such termination, Landlord may then or at any time thereafter, (i) peaceably re-enter’the Demised Premises, or any part thereof, ‘upon voluntary surrender by Tenant or expel or remove Tenant therefrom and any other persons occupying them, using such legal proceed- ings as are then available; (ii) again repossess and enjoy the Demised Premises, or relet the Demised Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term) at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion shall determine, with the right to make reasonable alterations and repairs to the Demised Premises; and (iii) remove all personal property therefrom. d. Recovery. Following termination under paragraph b, Landlord shall have all the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California. The amount of damages which Landlord may recover following termination under paragraph b. shall include the worth at the time of the award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of rental loss Tenant proves could be reasonably avoided. e. Additional Remedies. In addition to the foregoing remedies, Landlord shall, so long as this Lease is not terminated, have the right to remedy any default of Tenant, to maintain or improve the Demised 13 -. .o i,‘,,. :-.. w : fi,- 4 * . /- r4 . Premises without terminating this Lease, to incur expenses on behalf of Tenant in seeking a new subtenant, or to canse a receiver to be appointed to administer the Demised Premises and new or existing subleases, and to ;Idd to the Rent payable hereunder all of Landlord’s reasonable costs in so doing, with interest at the maximum rrtc permitted by law from the date of such expenditure until the same is repaid. f. Other. If Tenant causes or threatens to cause a breach of any of the covenants, agreements, terms or conditions contained in this Lease, Landlord shall be entitled to obtain all sums held by Tenant, by any trustee or in any account provided for herein, to enjoin such breach or threatened breach, and to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceed- ings and other remedies were not provided for in this Lease. g. Cumulative. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any oue or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter edsting at law or in equity or by statute or otherwise. h. No U’uioer. No failure by Landlord to insist upon the strict performance of any term hereof or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial pay-, ment of Iient during tbe continuance of any such breach, shall constitute a waiver of any such breach or of any such term. Efforts by Landlord to mitigate the damages caused by Tenant’s breach of this Lease shall not be construed to be a waiver of Landlords right to recover damages under this. Section M. Nothing in this Section M affects the right of Landlord to indemnification by Tenant in accordance with Section F-8 hereinabove for liabCity arising prior to the termination of this Lease for personal injuries or property damage. .., N. hSICNMENT AND suBr.m-nNC. 1. Prohibition. Tenant shall not assign, mortgage, pledge or otherwise transfer, this Lease, in whole or in part, nor sublet or permit occupancy by any party other than Tenant of all or any part of the Demised Premises, without the prior written consent of Landlord in each instance. Any purported assignment or subletting contrary to the provisions hereof without consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. As Additional Rent hereunder, Tenant shall reimburse Landlord for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting, 2. LmdlmdOptfon. a. In connection with any proposed assignment or sublease, Tenant shall submit to Landlord in writing (i) the name of the proposed assignee or sublessee, (ii) such informatioti as to its financial responsibility and standing as Landlord may reasonably require, and (iii) all of the terms and conditions upon which the proposed assignment or subletting is to be made. Landlord shall have an option to cancel and terminate this Lease, if the request is to assign the Lease or to sublet all of the Demised Premises; or, if the request is to sublet a portion of the Demised Premises only, to cancel and terminate this Lease with respect to such portion. Landlord may exercise said option in writing within thirty (30) days after its receipt from Tenant of such request, and in each case such cancellation OT termination shall occur as of the date set forth fn Landlords notice of exercise of such option, which shall be not less than sixty (60) nor more than one hundred-twenty (120) days following the giving of such notice. 14 -2 . *. . .. . . . ,- b. Cancellation. If Landlord shall exercise its option, Tenant shall surrender possession of the entire Demised Premises, or the portion thereof which is the subject of the option, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Demised Premises at the expiration of the Term. If this Lease is cancelled as to a portion of the Demised Premises only, the Fixed Rent after the date of cancellation shall be abated and shall thereafter be an amount deter- mined by Landlord and the Tenant’s Share of Impositions, Tenant’s Share of Operating Expenses and Tenant’s Share of Insurance Expenses shall be adjusted as reasonably determined by Landlord. c. Noncancellation. If Landlord does not exercise its option to cancel this Lease pursuant to the fore- going provisions, Landlord may withhold its consent to such assignment or subletting, as long as the withhold- ing is not done unreasonably, d. Assumption. No assignment shall be binding upon Landlord, any ground lessor or any mortgagee unless Tenant shall deliver to Landlord an assignment in recordable form which contains an assumption by the assignee, but the failure or refusal of the assignee to execute such instrument or assumption shall not release or discharge assignee from liability as Tenant hereunder, provided that the terms and provisions of the assignment or subletting shall specifically make applicable to the assignee or sublessee all of the provisions of this Section. 3. Bonus Rentul. If for any assignment or sublease, Tenant receives rent or other consideration, either initially or over the term of the assignment or sublease, in excess of the Rent called for hereunder, or in .case of the sublease of a portion of the Demised Premises, in excess of such Rent fairly allocable to such portion, after appropriate adjustments to assure that all other payments called for hereunder are appropriately taken into account, Tenant shall pay to Landlord, as Additional Rent hereunder, one-half (‘h) of the excess of each such payment of rent or other consideration received by Tenant promptly after its receipt. 4. Scope. The prohibition against assigning or subletting contained in this section shall be construed to include a prohibition against any assignment or subletting by operation o# law. If this Lease be assigned, or if the under- lying beneficial interest of Tenant be transferred, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of thyimmediately preceding paragraph, but no subb assignment, subletting, occu- pancy or collection shall be deemed a waiver of this c*venant, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. No assignment or subletting shall affect the continuing primary liability of Tenant (which, following assignment, shall be joint and several with the assignee), and Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease. 5. Waiver. Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time grdnted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant witi,out having taken action aga’inst or joined such assignee or subleasee, except that Tenant shall have the bent&fit of any indulgences, waivers and extensions of time granted to any such assignee or sublessee. 15 Whenever Landlord conveys its interest in the Lot, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and all further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or grow- ing out of, or connected with this Lease after the effective date of said release. The effective date of said release shall be the date the assignee executes an assumption of such an assignment whereby the assignee expressly agrees to assume all of Landlord’s obligations, duties, responsibilities and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be re- quired to further effect the provisions of this Section. 1. Ofset Statement. 0. OFFSW STATEMENT, A-ITORNMENT, AND SUBORDINATION. Within ten (10) days after request therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord of its interest in the Demised Premises, or any part thereof, an offset statement shall be required from Tenant, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser, or to Landlord, certifying (if such be the case) that this Lease is in full force and effect; the date of Tenant’s most recent payment of Rent, and that there are no defenses or offsets outstanding. or stating those claimed by Tenant. Tenant’s failure to deliver said statement in time shall be conclusive upon Tenant that: (i) this Lense is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlords performance and Tenant has no right of offset. counterclaim or deduction against rent hereunder, and (iii) no more than one periods Fixed Rent has been paid in advance. 2. Attornment. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage or deed of trust made by the Landlord, its successors or assigns. encumbering the Demised Premises, or any part thereof, or in the event of termination of the Ground Lease, if any, and if so requested, attom to the purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of foreclosure and recognize such purchaser as the Landlord under this Lease. 3. Subordination. The rights of Tenant hereunder are arrd shall be, at the election of any mortgagee, subject and sub- ordinate to the lien of any mortgage or mortgages, or the lien resulting from any other method of financing or refinancing, now or hereafter ik force against the Lot and/or Building of whi’ch the Demised Premises are a part, and to all advances made or hereafter to be made upon the security thereof, provided, however, that notwithstanding such subordination, so long as the Tenant herein is not in default under any of the terms, covenants and conditions of this Lease, neither this Lease nor any of the rights of Tenant hereunder upon Tenant’s covenanting that Tenant is not in default hereunder, shall he terminated or subject to termination by any tnrstee’s sale, any action to enforce the security, or by any proceeding or action in foreclosure. If requested, Tenant agrees to esecute whatever documentation may be required to further effect the provisions of this section. P. NOTICES. All notices required to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by personal delivery, to the addresses indicated in Section A-l or at such other place or places as either Landlord or Tenant may, from time to time, respectively, designate in a written notice given to the other. Notices shall be deemed sufficiently served four (4) days after the date of mailing thereof. ‘* ‘.I . 1 -. l 1. Waioer. Q. M WXLLANEOUS. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by either party requiring further consent or approval shall not be deemed to waive or render unnecessary their consent or approval to or of any subsequent similar acts. 2. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease. 3. Limitation of Landlords Liability. The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers, or shareholders of Landlord, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets of the Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction. 4. Entire Agreement. This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Demised Premises, Building and Lot, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addi- tion to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. 5. Time. Time is of the essence here0f.i 6. Short Form Lease. Concurrently herewith the parties may, at the option of either party, execute a short form of Lease for recording, This Lease and any such short form of Lease shall be construed together as one instrument. Neither Landlord nor Tenant shall record this Lease nor permit the same to be recorded without the written consent of the other, but shall have the right to record any such short form. 7. Attorneys’ Fees. In any action or proceeding which the Landlord or the Tenant may be required to prosecute to enforce its respective rights hereunder, the unsuccessful party therein agrees to pay all costs incurred by the pre- vailing party therein, including reasonable attorneys’ fees, to be fixed by the court, and said costs and attorneys’ fees shall be made a part of the judgment in said action. In any situation in which a dispute i.s settled other than by action or proceeding, Tenant shall pay all Landlords costs and attorneys’ fees relating thereto. 17 : . 8. Cuptions und Section Numbers. The captions, section numbers, article numbers and index appearing iI) this l.easr ‘are inserted ouly as a matter of convenience and in no way define, limit, construe or describe the scope or intent or such sections or articles of this Lease nor in any way affect this Lease. 9. Seuerability. If any term, covenant, condition or provision of this Lease, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforce- able, the remainder of the terms, covenants, conditions or provisions of this Lease, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 10. Applicable law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in ac- cordance with the laws of the state in which the Demised Premises are located. 11. Examination of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to Lease, and it is not effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant. R. Suazsso~~ BOUND. This Lease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and legal representatives and their respective assigns, subject to the provisions hereof. Whenever in this Lease a reference is made to the Landlord, such reference shall be deemed to refer to the person in whom the interest of the Landlord shall be vested, and Landlord shall have no obligation hereunder as to any claim arising after the transfer of its interest in the Demised Premises. Any successor or assignee of the Tenant who accepts an assignment or the benefit of this Lease and enters into possession or enjoyment hereunder shall thereby assume and agree to perform and be bound by the covenants and conditions thereof. Nothing herein contained shall be deemed in any manner to give a right of assignment to Tenant without the written consent of Landlord. IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written. i ULANDLORDn ‘ PALOMAR 910 ASSOCIATES, LTD. . Attest: BY ELI i?ERLMAN, &r&n8 ‘l!ar’tner ’ , ,. TENANT" CITY OF CARLSBAD YG 4 fl-..... 18 -. a I i .* , *m . L IL. STATE OF mmF@i= COUNTY OF SAN DIEGO \ I ss. On A-t 4, 198,313 f e ore me, the undersigned, a Notary Public in and for said State, personally appeared MAFZH.C.AS~ , ,known to me to be the Mayor --__----------1-- __---------------- of the City of Car&bad , the corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. KAREN R. !3TEVENS N&Q Public - Cdiinir ...... ...... STATE OF COUNTY OF On , before me, the undersigned, a Notary Public in and for said State, personally appeared 1 ss. i and , known to me to be the 1 of , the corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notary Public 19 . ADDENDUM TO THE STANDARD FORM I\JUL’I-lPLE OCCUPANCY LEASE BJ’ AND BETWEEN PALOMAR 910 ASSOCIATE!+LTD;. THE CITY OF CkLSBAD (LANDLORD) (TENANT) DATED AS OF July 13, 1983 -I _ -. _ The promises, covenants, agreements and declarations made and set forth herein are intended to and shall have the same force and effect as if set forth at length in the body of the lease to which this Addendum is artached (the “Lease”). To the extent that the provisions of this Addendum are inconsistent with the terms and conditions of the Lease, the terms hereof shall control: 1. Section B-3. 2. Section F -7. Section F-7 is hereby retitled to read: “Tenant’s Proprty” and the language of said Section is hereby revised to read as follows: “Tenant shall assume the risk of damage to any fixtures, goods, inventory, merchan- disc, equipment, furniture and leasehold improvements which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises, and Tenant shall maintain reasonable insurance coverage with respect to such items during the Term of this Lease. ” i 3. Section C--2 With reference to Section G -2, the following language is hereby added thereto: ?Penant expressly understands that there shall be no affirmative responsibility with respxt to either party in connection with repairs to the \valls of the Demised Premises relating to maturity or weathering of construction materials and contrasted to damage to the structural integrity of the building walls. Fe ADDENDUM Pare 1 of 4. 4. Section M -1. The Semicolon following Subsection M-l (b) is hereby changed to a period and the following sentence is hereby added at the end of said Sub- section: “Should there be consecutive failure to pay such installments for two (2) months in a row then Rent shall become due and payable quarterly in advance on the first day of each calendar quarter during the following one (1) year period of the Term of the Lease, after which year Rent shall again be payable monthly and this Section shail again be in effect. ” 5: Section Q-12. .A new Section Q-12 is added entitled “Financial Statements” and contains the following language: “At any time during the Term of the Lease; Tenant shall, upon thirty (30) days’ prior written notice from Landlord in connection with any financing of the Demised Premises,. provide Landlord with a current financial statement and financial statements for each .of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and shall be audited by independent certified public accountants if such is the normal practice of Tenant. ” 6. Section Q- 13. A new Section Q-13 entitled “Rent Commence hereby ag mencement date of -_ the Term, a letter 7. Section Q- 14. A new Sec$ion Q-14 entitled “Surrender of Premises; Holding Over” is added hereto and contains the following language: “On expiration of ten (10) days after termination of the Term, Tenant shal1 surrender to Landlord the Demised Premises and all Tenant’s improvements and alterations in good condition (except for ordinary wear and tear occurring after the last necessary maintenance made by Tenant and except for destruction of the Demised Premises covered by Article K) except for alterations that Tenant has the right to remove or is obligated to remove after the provisions of Article H. Tenant shall remove all its personal property within the above stated time period. - Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant’s personal property within the time period stated in this Section. Landlord can elect to retain or dispose of in any manner any alterations or Tenant’s personal property that Tenant does not remove from the Demised Premises on expiration or termination of the Term as allowed or required by ADDENDUM w Page 2 of 4. . this Lease by giving at least ten (IO) days notice to Tenant. Title to any such .- alterations or Tenant’s personal property that Landlord elects to retain or dispose of on expiration of the ten (JO) day period shall vest in Landlord. Tenant waives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or disposition of any such alterations or Tenant’s personal property. Tenant shall be liable to Landlord for Landlord’s costs for storing, removing and disposing of any alterations or Tenant’s personal property. If Tenant fails to surrender the Demised Premises to Landlord on expiration or ten (10) days after termination of the Term as required by this Section, Tenant shall hold Landlord harmless from all damages resulting from Tenant’s failure to surrender the Demised Premises including without limitation claims made by a succeeding Tenant resulting from Tenant’s failure to surrender the Demised Premises. ” 8. section-Q--1.5. . llowing language: exercisable u Lease. The Fixed Rent pay mer Price index (all items: Los An published for the first month of the or IN WITNESS WHEREOF, the parties have executed this Addendum as of the day and year first above written. i 1 ADDENDUM Page 3 of 4. Date r PALOMAR 910 ASSOCIATES, LTD. BY ELI PERLMAN Its Managing Partner "LAXDLORD" CITY OF CARLSBAD Its Mayor "TENtiT" i ‘,. ._ -e--- e-j “.,, * r : ‘-- : ADDENDUM Page 4 of 4 , 1 '<'.,., -/ : 'ii. '., . ; ,.; 1 , I.. . ..'- ",J i '?"d.2 ; G _. r . .' _ ,':,:d .,,"$,:' &f i . Appendix A - __- --a- .--. ~.--__- -.- - --- YARROW DRIVE -.A_-- 455’--- --T- i.i;:A.-.m\ 6351 YARROW DR1 T \ ‘/ ;: 1 ! 0 1, P L I-. !: ‘s I’ 4 s \’ * \L s 1% \, 6 i J $J ;’ LIZ3 (:. ‘. .: -_ -- --_ .-==y ! ’ I ’ 1 : I ;:- t,,p I 1 ! , :.J / L--l ---.-.-___-__.-_-----.-.-_- 622 S;ite C ., ‘i\, Los Angeles (90 miles) \ \ AlrpOrt Road Palomar Airport Business Park 6231 YARROW DRIVE, SUITE C. CARLSBAD, CALF. 92008 TELEPHONE (714) 438-2552 l . STANDARD FORM MULTIPLE OCCUPANCY LEASE . . ~~~~~~ ,P+L9~A~,,910 ASSOCIATES, LTD. . . ,.. . . . . . . . . . . . . ..,..,,......... CITY OF CARLSBAD Lessee ., . . . . . . . . . . . . . . ., .., . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Datedauof ...JUlY..~?.,..1.g8? . . . . . . .,.........................,............................... ‘0 ( ’ . . \. \ . . A. DEFINED TERMS, EXHIRITS. TABLE OF CONTENTS, PREMISES, COMMON AREAS. 1. Defined Terms. Each reference in this Lease to any of the following titles shall incorporate the data stated for that title: Other tenns are as defined in the Lease.- Landlord.PALOMAR 910 ASSOCIATES, LTD. . ; .' .'.' a . i...,,....,...,... .._._.._.... CITY OF CARLSBAD Tenant: .._.__ ..__...,...... _..._ _.__.. a . . . . . .._... . . .......................................... ....................................... Building Location: StreetAddress: 6351 Yarrow Drive; Suite C City: Carlsbad County: San Diego State: California Tenant'sFloorSpaceApproximately 5,760 sq. ft. Total Rentable Floor Space: 4 2 ,4 8 0 s q . f t . - _. Term:. 3 years. L Fixed Rent :q F f E ,y F bvee Oct. 1, 1983 - Sept. 30, 1984 $2,000 per month Oct. 1, 1984 - Sept. 30, 1985 $2,150 per month Tenant’s Share of Operating Expenses: Oct. 1 1985 - Sept. 30, 1986 0. %. $2,450 per month 1’ Tenant’s Share of Impositions: !? .%. Tenant’s Share of Insurance Expenses: 0. %. Scheduled Term Commencement Date: Oct. 1, 1983 Liability Insurance Amounts: Bodily Injury per person: $500,000 Bodily Injury per occurrence: $1,000,000 Property Damage: 500,000 Boiler Insurance: 500,000 1 , Landlord’s Address: . Tenant’s Address: - Permitted Uses: 1660 Hotel Circle North, Suite 216 San Diego, Ca, 92108 .-skeet .,. . . . . ...'.... ,, .._ . . . . . ..t..... 1200 Elm Street, Carlsbad, Ca. 92008 stremt .-. Any lawful uses consistant with the Declaration of Covenants and Restrictions Declaration of Covenants and Restrictions: copy delivered to tenant Recorded: October l.9 1974,.pm$nded,February 25, 1977 and May 23, 1977 2. Table of Contents. A. Defined Terms;-Exhibits, Table of Contents, Premises, Common Areas. B. Landlords Improvements . . . . C. Term ..y...... . . . . . . . . . . . . . . . . . . . . D. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . E. Impositions _.... _..._.. ,.._........_.. F. Insurance .;.......................... . . . . . . c;. Repairs, Maintenance, Alter’ations, Operating Expenses H. Tenant’s Fixtures and Personal Property I. Utilities and Boundaries . J. Use of Premises K. IXinruge or Destruction . . .._......,.. I a. Eminent Domain : . . . :. hl. I~chrll! :. . . . N. Assig:lntrent and Subletting . 0. Offset Statement, Attornment and Subordination I’. Notices . . . . . . .._..._.......... . . . . . . . . ,. Q. Miscellaneous ., . . . . . . . . . R. Siwcessors Bound 2 Page 1 3 5 5 6 7 8 9 9 10 10 11 12 14 16 16 17 18 I. . \’ r , . . . I, \I \ . - The following Exhibits are attached to this Lease after the signatures and are incorporated herein by reference thereto. Description: Exhibit A - Tenant’s Floor Plan. 3. Premises. Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant’s Floor Space (“Demised Premises”) in the Building extending from the top surface of subfloor to the bottom surface of ceilings ahove but exchrding the common stairways, stairwells, hallways, accessways, and pipes, ducts, conduits, wires and appurtenant fixtures serving exclusively or in common other parts of the Building, in\d if Tenant’s Floor Space includes less than the entire rentable area of any floor, excluding also the remainder of the Floor Common Area. 4. Common Areas. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reason- able rules from time to time made by Landlord of which Tenant is given notice: (a) Building Common Areas. The common stairways and accessways, loading docks and platforms and any passageways thereto, and the common pipes, ducts, conduits, wires and appurtenant equipment serving the Demised Premises; (b) Floor Common Areu. If the Demised Premises include less than the entire rentable area of any floor, the common lobbies, hallways, toilets and other common facilities; and (c) Land Common Are& Common walkways, sidewalks, and driveways necessary for access to the Building and parking spaces or area from time to time maintained on the real property upon which the Building is located (“Lot”) and to the extent from time to time arranged by Landlord, on adjacent real property. 5. Lundlords Reserved Rights in Common Areus. Landlord reserves the right from time to time, without unreasonable interference with Tenant’s use: (a) Building Changes. T($ install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the ceiling sur- faces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts. conduits, wires and appurtenant meters and equipment included in the Demised Premises which are so located or located elsewhere outside the Demised Premises; (1~) Borrnrlar!g Changes. To change the lines of the Lot; (c) Facility Changes. To alter or relocate any other common facility; provided, however, that sub- stitutions are substantially equivalent or better in quality. 3 Landlord shall have prepared final plans and specifications (“Final Plans”) s conformity with the Preliminary Plans, which need not include working or shop drawings. nafter mean Preliminary Plans and then, when prepared, Final Plans. Final Plans shall be d on as reasonably possil,le from the date hereof, subject, however to any period ( andlord in such preparation as a result of requests by Tenant for changes in F’ suhstantid c-m ment or refinement liminary P~UIIS. Failure to deliver to Landlord written noti tions or changes w ten ( 10) day period shall constitute approval of t Following such approv the Final Plans, both parties shall endorse approval mg purposes thereon, in duplicate, and thereaft anges may 1~ made only in accordance with Se 2. Construction. Landlord, at its sol,e expens proceed diligently with con and completion of the Demised Premises substantially in accordi h the Plans. Lalldlord shall the Demised Premises and they shall be ready for occupancy, as er than the Scheduled Term Com- mencement Date; provided, however cement Date shall be extended for by Landlord affecting said work of r acts of Cod, acts of the public enemy, 1s or supplies or the transportation thereof, strikes or boycotts, shortages of material or y entry lmder the provisions of Section B-8, changes in the Plans pursuant to Section B- ause beyond the control of Landlord. 3. Fcriltrre to Complete Construction. by the delivery to the iither party of writt 4. Changes in Plaw. any major structural change in Landlord either for said for ;I proportionate inc such requests shall 4 Zity of Construction. 1 be done in a good and workmanlike manner and in compliance with all rices,, by-laws, regulations and orders of governmental authority and of t 7. Construction Repres In connection with the cc struction Representative,. A pa notice to the other party. y shall be bound by its Con- presentative by giving written 8. Early Entry. With the prior wri Term, at its sole risk d, Tenant may at a such trade fixtures enant’s early entry s difficulties; (ii) Tenant shall execute an indemnity agre shall not use the Demised Premises for storage of inventory or otherwise commence t ess without the express prior written consent of Landlord. C. Tw. 1. Commencement of Term. The term of this Lease shall commence upon Gw+ewliest+M&okwing&~ October 1, 1983 and shall terminate September 30, 1986. fafSehedekdh&m fnts&~*e,-ay&0**d: ~b~-Tks$a~eR~sb~keDerrr~~P-re~~;we~~~ile~,-~~~~~Secti3~ lhbwe+es d D. RENT. 1. Fired Rent. Tenant shall pay the Fixed Rent to Landlord in advance upon the first day of each calendar quarter of the Term, at Landlords address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any deduction or setoff whatsoever. If the Term shall commence and end on a day other than the first day of a calendar quarter, then Tenant shall pay, upon the commencement date of the Term or first day of the last calendar quarter, a prorata portion of the Fixed Rent described in the foregoing paragraph, prorated on a per diem basis, with respect to the portions of the fractional calendar quarter included in the Term. 2. Deposit. Upon execution of this lease, the existing $1,836.44 deposit under the preceding 1982-1983 lease shall be increased $163.56 to a total of $2,000. This deposit will not be used as payment for Sept., 1983 rent, but shall be assigned over to this lease for payment against the last month's rent of this lease. On Oct. 1, 1984 and on Oct. 1, 1985, this deposit shall be increased to $2,150 and to $2,450, respectively. 5 1. . . . u n * * 3. Interest. If any instnllment of Rent is not paid promptly when due, it shall bear interest at the lower rate of either ten percent ( lO?%) or the maximum rate permittedby law, from the date on which it is due unti1 the date on which it is paid regardless of whether or not a notice of default or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time and in the manner herein specified. E. hWhTlONS. : . . w-- ‘. . . ,, . writs- I I . . . e . e+-f+v=~. . . . . . -&au- i . . w&i-- , -e 3. Limitation. Nothing contained in this 1,ease shall require Tenant to pay any franchise, corporate, estate, inheritance, succession, transfer tax of Landlord, or any income, profits or revenue tax or charge, upon the net income of Landlord; provided, however, that if at any time during the Term under the laws of the United States Gov- ernment or the state in which the Demised Premises are located, or any political subdivision thereof, a tax or excise on rent, or any other tax however described, is levied or assessed by any such political body against Laudlord on account of rentals payable to Landlord, Tenant shall pay one hundred percent ( lW%) of any said tax or excise on rent as Additional Rent. 4. Personal Property Taxes. Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures. inventories and other personal property placed in and upon the Demised Premises by Tenant. .* .t *I . -. * . \’ % : 1;. INS~~ASC~Z. I. Fiw rmtl ~ktentkvl Goacrugr~. I)uring tht- Term I.andlortl shall procur’ and maintain in full force and effect with respect to the Building, :I policy or policies of fire insurance with extended coverage endorsement attached, including vandalism and malicious mischief coverage, aud any other endorsements required by the holder of any fee or leasehold mortg;~ge in an ;tmount equal to one hundrrd percent ( 100%) of the full insurance replacement value (replace- mt*nt cost 1~2w. irlc*liitlinfi debris rrnioval, and demolition ) thereof. i . . 9 -. Pnhlic Liahtlit!l. Tenant shall, at its own cost and expense, keep and maintain in full force during the Term, a policy or policies of comprehensive public liability insurance, written by an insurllnce company approved by Landlord in the form customary to the locality, insuring Tenant’s activities with respect to the Demised Premises against loss. damage or liability for personal injury or death of any person or loss or damage to property occurring in, upon or about the Demised Premises in amounts of not less than those set forth in Section A-l hereinabove for injury or death of any one perstm, for injury or death of all persons in any one occurrence, and for property damage and for damage from boiler, if applicable; provided, however, that if at any time during the Term, Tenant shall have in full force and effect a blanket policy of public liability insurance with the same coverage for the Demised Premises as described above, as well as coverage of other premises and properties of Tenant. or in which Tenant has some interest. such blanket insurance shall satisfy the requirement hereof. 3. Rental Abatement Insurance. . . 3T!tkt& ~~~ OfA :. , 4. Insurunce Certificates. 2 s Tenant shall futnish to Landlord, upon the date of commencement of this Lease and thereafter within thirty (30) days prior to the expiration of each such policy, a certificate of insurance issued by the insurance carrier of each policy of insurance carried by Tenant pursuant hereto. Said certificates shall expressly provide that such policies shall not be cancellable or subject to reduction of coverage or otherwise be subject to modification except after thirty (30) day’s prior written notice to the parties named as insureds in this Sec- tion F-4. Landlord, its successors and assigns, and any nominee of Landlord holding any interest in the Demised Premises, including, without limitation, any ground lessor and the holder of any fee or leasehold mortgage, shall be named as insureds under each such policy of insurance maintained by Tenant pursuant to this Lease. 5. Tenant’s Failure. If Tenant fails to maintain any insurance required in this Lease, Tenant shall be liable for any loss or cost resulting from said failure. This section F-5 shall not be deemed to be a waiver of any of Landlord’s rights and remedies under any other section of this Lease. 7 6. Waioer of Subrogation. Any policy or policies of fire, extended coverage or similar casualty insurance, which either party obtains in connection with the Demised Premises shall include a clause or endorsement denying the insurer any rights of subrogation against the other party to the extent rights have been waived by the insured prior to the occurrence of injury or loss. Landlord and Tenant waive any rights of recovery against the other for injury or loss due to hazards covered hy insurance containing such a waiver of subrogation clause or endorse- ment to the extent of the injury or loss covered thereby. 7. Tenant’s Fixtures. ’ Tenant shall assume the risk of damage to any fixtures which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises. 8. lndemnificution of Lundlord. Tenant shall indemnify and hold Landlord and the Demised Premises ,harmless from and against (i) any and all liability, penalties, losses, damages, costs and espenses, demands, causes of action, claims or judgments arising from or growing out of any injury to my person or persons or any damage to any property as a result of any accident or other occurrence during the term of this Lease occasioned hy any act or omis- sion of the Tenant, its officers, employees, agents, servants, s&tenants, concessionnaires. licensees, contractors, invitees or permittees, or arising from or growing out of the use, maintenance, occupation or operation of the Demised Premises during the term of this Lease, and (ii) from and against all legal costs and charges, including reasonable attorneys’ fees, incurred in ad about any of such matters aild the defense of any action arising out of the same or in discharging the Demised Premises or any part thereof from any and all liens, charges or judgments which may accrue or be placed thereon by reason of any act or omission of the Tenant; provided, however, that Tenant shall not be required to indemnify Landlord for any damage or injury of any kind arising as the result of Landlord’s wilfu1 acts or those of its agents or employees. . . . C. REPI)IHS, MAINTENANCE, ALTERATIONS. OPERATING EXPENSES 1. Operating Expeme. of the building and lot, walks, driveways, parking and loading areas, lawns and landscaping. 2. Tenet Repuirs and Mrritr~r!wrncv. Teuaut shall. at Trlhaut’s sole cost d expense, keep and maintain the Demised Premises, subfloors and floor coverings in good repair and iu :I &WI alld safe condition. casualties covered by insurance coverage excepted to the esteut of proceeds received. Tellallt shall. at Tenant’s own .expense, immediately replace all glass in the Demised Premises that may he broken during the Term with gIass at least equal to the specifica- ti(bll i\nd qu;\lity of the gl;\~~ SO rrplaced. 3. Landlord Repairs und hfaintenancu. Landlord shall. at its expense, after writtell notice from Teuaut, repair in a prompt and diligent manner any damage to structural portions of the roof iuld bearing walls of the Demised Premises; provided, however, that if such damage is caused by an act or omission of Tenant. then such repairs shall be at Tenant’s expense. R payable to Lalldlord as Additional Rent hereunder. There shall be no abatement of Rent during the perfoml- ante of such work. Landlord shall not he liable to Tenant For injury or damage that may result from any defect in the construction or conditions of the Demised Premises. Tenant waives any right to make repairs at the expense of I,:u\dl~~rd uuder ;my law, statute or ordinance IWW or hereidter in effect. 4. Inspection of Leuseci Premises. Landlord, at reasonable times, may go U~OII atld into the De.mised Premises for the purpose of inspecting the same, or for the purpose of inspecting the performance by Tenant of the terms and conditions hereof, and for the purpose of affixing reasonable signs aud displays and showing the Demised Premises to prospec- tive purchasers. tenants and lenders. 5. Workmuniike Quality. All repairs, alterations, additions, and restoration hy Landlord or Tenant hereinafter required or per- mitted shall he done in a good and workmanlike manner and in compliance with all applicable laws and law- ful ordinances, by-laws, regulations and orders of governmental authority and of the insurers of the Building. - 6. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at the request of Tenant and shall keep the Demised Premises free and clear of all mechanic’s and materialmen’s liens in connection therewith. Landlord shall have the right to post or keep posted on the Demised Premises, or in the immediate vicinity thereof, any notices of non-responsibility for any construction, alteration or repair of the Demised Premises by Tenant. IF any such lien is filed, Landlord may, but shall not be required to, take such action or pay such amount as may be necessary to remove such lien; and Tenant shall pay to Landlord as Additional Rent any such amounts expended by Landlord together with interest thereon at the highest legal rate from the date of expenditure. ,- H. TENANT’S FIXTUWS ANI) PERSONAL PHOIJERTY. Tenant, at its expense, may install any necessary trade fixtures, equipment and furniture in the Demised Premises. provided that such items are installed and are removable without damage to the structure of the Building. Landlord reserves the right to approve or disapprove of curtains, draperies, shades, paint, or other interior improvements visible from outside the Demised Premises on wholly aesthetic grounds. Such improve- ments must be submitted for Landlord’s written approval prior to installation. or Landlord may remove or replace such items at Tenant’s sole expense. Said trade fixtures, ecluipment and furniture shall remain Tenant’s property and shall be removed by T&ant upon expiration of the Term. or earlier termination of this Lease. U~OII Landlord’s prior written approval, Tenant may make structural alterations and may also install tempor- ary improvements in the interior of the Demised Premises, provided that such temporary improvements are installed and are removable without damage to the structure of the Building. Such temporary improvements shall remain the property of Tenant and shall be removed hy Tenant upon expiration of the Term or earlier termination of this Lease. Tenant shall repair, at its sole expense, all damage caused by the installation or removal of trade fixtures, equipment, furnihirr or temporary improvements. If Tenant Fails to remove the foregoing items on termination of this Lease, Landlord may keep and use them or remove any or all of them and c’;u~sc them to be stored or sold in accordance with ilpplicahl(~ hw. 1. U-riLrriEs AND B~LJ~WAH~U 1. IlMies. Tenant shall be solely responsible for and promptly pay all chilrges for heat, water, gas, electricity :uld ;Iuy other utilities used or consumed on the Demised Premises. Landlord shall not be liable to Tenant For inter- 9 ruption in or curtailment of any utility service, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement in whole or in part hereunder. If any such utilities are not separately metered, Tenant shall pay a prorata share, based on use, as determined by Landlord. 9 .d. Easements. Landlord reserves the right to (i) alter the boundaries of the Lot and (ii) grant easements on the Lot and dedicate for public use portions thereof witholn Tenant’s consent. subject to the provisions of Section O-2 hereof. and provided that no such grant or dedication shall interfere with Tenant’s use of the Demised Premises or otherwise cause Tenant to incur cost or expense. From time to time. and upon Landlord’s demand, Tenant shall execute, acknowledge and deliver to Landlord or in accordance with Landlord’s instructions any and all documents, instruments. maps, or plats necessary to effectuate Tenant’s covenants hereunder. 1. General. J. USE OF DEMISES. . . The Demised Premises shall be used for the Permitted Uses. consistent with the Declaration of Clovenants and Restrictions and any suppleme& thereto. Tenant shall, at Tenant’s sole cost and expense, comply with all of the requirements of municipal, county, state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertniuing to the Demised Premises, Building and Lot, and secure any necessary permits therefor and shall faithfully observe, in the use of the Demised Premises, Building and Lot, all municipal and county ordinances and state and federal statutes now in force, or which may hereafter be in force. Tenant shall obtain any required certificate of occupancy with respect to its use of the Demised Premises, Building and Lot, within thirty (30) days from the commencement of the Term hereof and shall deliver a copy thereof to Landlord within said thirty (30) day period. Tenant in its use and occupancy of the Demised Premises shall not commit waste, nor overload the floors or structure, nor subject the Demised Premises to any use whic?l would tend to damage any portion thereof. 2. Signs. ..,- Any sign placed or erected by Tenant WI the Demised Premises, Building or Lot, except in thr interior of the Demised Premises, shall contain only Tenant’s Ilame, or the name of any affiliate of Tenant actually occupying the Demised Premises, and no advertising mutter. No such sign shall be erected until Tenant has obtained Landlord’s written approval of the locdtion. material. size, design and content thereof and any necessary permit therefor. Tenant shall remove any such sign upon termination of this Lease and shall return the Demised Premises to their condititjn prior to the placement or erection of said sign. ; 3. Putking Access. III ;iddition to the g~ll14 obligutioll of TellalIt to co~~tply with laws and without limitation thereof, Lundlord shall not be lia\)le to Tenant nor shall this Lease be affected if a11y parking privileges appurtenant to the I)rmisecl Premises, Huilding and I .ot xre impaired by reasou of any moratorium. initiative. refereudum, statute. regulation, or othtv governmental decree or action which could it1 any manner prevent or limit the parking righhts of Tenant Ibc-rem&r. Any g~)ver~lmt~llt;li charg:rs or surcharges or other monetary obligations impost-tf relntivt- to parking rights wit11 rthsptbc’t to the Delnised Premises, Building and Lot shll he considered as Inll)ositiolls m1c1 shall IW p;~yuble by Tt-llalrt under the provisions of Section E hereinabovr. K. DAMAGE OR DixraucrloN. 1. tk?cOlUtTll~~tifJll. If the Demised Premises iire dalnnged or destroyed during the Term, Landlord shall, except as hereinafter provided, diligently repair cir rebuild them to substantially the condition in which they. existed immediately 10 , ’ ’ .’ * P .I \ . prior to such damagr or destructiou; provided that any dun~age which is estimated in good faith by Landlord to be under Five Thousand Dollars ($S,OOO.oO) shall be repaired by Teuant, and Landlord shall reimburse Tenant upon demaud for espenses incurred in such repair work to the extent of any proceeds received by Landlord from extended coverage insurance described in Section F-l. 9 4. Bent Abatement. Rent due and payable hereunder shall be abated proportionately, but only to the extent of any proceeds received by Landlord from rrntal abatement insurance described in Section F-3, during any period in which, by reason of any such dnmng:e or destntction. Tenant reasonably determines that there is substantial interference with the operation of Tenant’s business in the Demised Premises, having regard to the extent to which Tenant may be required to discontinue its business in the Demised Premises. Such abatement shall continue for the period commencing with such damage or destruction and ending with a substantial completion by Landlord of the work of repair or reconstruction which Landlord is obligated or undertakes to do. If it be determined that continuation of business is not practical pending reconstruction, Fixed Rent due and payable hereunder shall abate to the extent of proceeds from rental abatement insurance until reconstruction is substantially completed or until business is totally or partially resumed, whichever is the earl&. 3. Excessive Damage or Destruct&. If the Building is damaged or destroyed to the extent that Landlord determines that it cannot, with reasonable diligence, be fully repaired or restored by Landlord within one hundred eighty (180) days after the date of the damage or destruction. the sole right of both Landlord and Tenant shall be the option to terminate this Lease. Nohvithstnnding the fact that the Demised Premises have uot been damaged or destroyed, Landlord shall detennine whether the Building can be fully repaired or restored within the one hundred eighty (180) day period, and Landlord’s determination shall be conclusive on Tenant. Landlord shall notify Tenant of its determination, in writing, within thirty (30) days after the date of the damage or destruction. If Landlord determines that the Building can be fully repaired or restored within the one hundred eighty ( 180) day period, or if it is determined that such repair or restoration cannot be made within said period but neither party elects to terminate within thirty (30) days from the date of said determination, this Lease shall remain in full force and effect and Landlord shall diligently repair and restore the damage as soon as reason- ably possible. 4. Uninsured Cn.ntultfj. Notwithstanding anything contained herein to the contrary, in the event of damage to or destruction of all or any portion of the Building which is not fully covered by the insurance proceeds received by Landlord under the insurance policies required.under Section F-l above, Landlord may terminate this Lease by written notice to Tenant, given within thirt? (30) days after the date of notice to Landlord that said damage or destruction is not so covered. If Landlord does not elect to terminate this Lease. the Lease shall remain in full force and effect and the Building shall be repaired and rebuilt in accordance with the provisions for repair set forth in Section K-l hereinabove. 5. Waiver. With respect to any destruction which Landlord is obligated to repair.or may elect to repair under the terms of this Section K. Tenant hereby waives all right to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law to tenants, except as expressly otherwise provided herein. L. EMINFNT DOMAIN. 1. Total Condemn&ion of Demised Premises. If the whole of the Demised Premises is acquired or condemned by eminent domain, inversely con- demned or sold ill lieu of. condemnation, for any public or quasi-public use or purpose (“Condemned”), 11 then thy ‘l’erm shall terminate :IS of the date of title vesting irr such proceeding, and Hent shall he adjust4 to the date of termination. Tenant shall immediately notify Landlord of any such occurrence. 2. Partial Condemnution. If any part of the Demised Premises is parti;iIly Condemned, and snch partial condemnation renders the Demised Premises unusable for the business of the Tenant, then the Term of this Lease shall terminate as of the date of title vesting in such proceeding and Sent shall be adjusted to the date of termination. If such condemnation is not extensive enough to render the Demised Premises unusable for the business of Tenant, then Landlord shall prorilptly restore the Demised Premises to a condition comparable to its condith immediately prior to such condemnation to the extent of any condemnation proceeds recovered by Landlord, less the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the dntc of such title vesting the Fixed Rent shall be reduced as reasonably determined by Land- lord. If any parking areas are condemned, Landlord has the option but not the obligation to supply Tenant with other parking areas. 3. LandZords Awurd. i If the Demised Premises are wholly or partially condemned, then, subject to the provision of Section L-4, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority. 4. Tenunt’s Award. ‘ Tenant shall have the right to claim and recover from the condemning authority, ;,ut not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant’s own right on acwunt of any and all costs or loss (including loss of business) to which Tenant might be put in removing Tenant’s merchandise, furniture. fixtures, leasehold improvements and equipment to a new location. 5. Temporary Condemnation. If the whole or any part of the Demised Prenlises shall Lt. condelnned for any temporary public or quasi-public use or purpose, this I,ense shall remain in effect and Tenant shall be entitled to receive for itself such portion or portions of :my award made for such use with respect to the period of the taking which is within the Term. If ;L temporary condemnation remains ill force nt the expiration or earlier termination of this Lease, Tenant shall pay to Landlord ? sum equal to the reasorlable cost of performing any obliqtions required of Tellant by this Lease with respect to the surrender of the Demised Premises, including, without limitation repairs and maintenance rt&uired, and upon such payment Tenant shall he excused from any such obligations. If ;I temporilry condemnation is for an established period which extends beyond the Term, the Lease shall terminate as of the date of occupancy by the condemning authority, and the damages shall be as provided in Sections L-3 and L-4 and Rent shall be adjusted to the date of occupancy. 6. .Voticu fltlfl khfwrtio~~. Landlord shall. immediately l1po11 service of process in connection with any condemnation or potential condemnatioll, give ‘Tenant notice in writing thereof. Tenant shall immediately execute and deliver to the I.andlord iill instruments that may bcb recjuired to effectuate the provisions of this paragraph. ,%!. hFAULT. 1. Eoenls of 1~efutrlt.s. The. occ’urrc’Ilc’e of ally of the following events shall cu>nstitute an “Event of Default” on the part of Tenant with or without notice from Landlord: See Addendum 12 . . . . ’ . . I’ t. . . a. Vacation or Abandonment. Vacation or abandonment of the Demised Premises; b. Payment. FaiIure to pay any installment of Rent or other monies due and payable hereunder upon the date when said payment is due, the failure continuing for a period of five (5) days after said payment is due; c. Performance. Default in the performance of any of Tenant’s covenants, agreements or obligations hereunder, except default in the payment of Pent or other monies, the default continuing for thirty (39) days after written notice thereof from Landlord; d. Assignment. A general assignment by Tenant for the benefit of creditors; e. Bankruptcy. The filing of a voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant’s creditors immediately unless involuntary, in which case when the petition remains undischarged for a period of thirty (30) days; f. Receiver. The appointment of a receiver to take possession of substantially all of Tenant’s assets or of this leasehold, the receivership remaining undissolved for a period of thirty (30) days; or g. Attachment. Attachment, execution or other judicial seizure of substantially all of Tenant’s assets or this leasehold, the attachment, execution or other seizure remaining undismissed or undischarged for a period.of thirty (30) days after the levy thereof. 2. Landlord’s Remedies. a. Abandonment. If Tenant vacates or abandons the Demised Premises, this Lease shall continue in effect. Landlord shall not be deemed to have terminated this Lease other than by written notice of termination from Landlord, and Landlord shall have all of the remedies of a landlord provided by Section 1951.4 of the Civil Code of the State of California. At any time subsequent to vacation or abandonment of the Demised Premises by Tenant, Landlord may give notice of termination and shall thereafter have all of the rights hereinafter set forth. -0 b. Termination. Following the occurrence of any Event of Default, Landlord shall have the right, so long as the default continues, to terminate this Lease by written notice to Tenant setting forth: (i) the default, (ii) the requirements to cure it, and (iii) a demand for possession, which shall be effective three (3) days after it is given or upon expiration of the times specified in Section M-l hereinabove, whichever is later. c. Possession. Following termination under paragraph b, without prejudice to any other remedies Landlord may have by reason of Tenant’s default or of such termination, Landlord may then or at any time thereafter, (i) peaceably re-enter th< Demised Premises, or any part thereof, upon voluntary surrender by Tenant or expel or remove Tenant therefrom and any other persons occupying them, using such legal proceed- ings as are then available; (ii) again repossess and enjoy the Demised Premises, or relet the Demised Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term) at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion shall determine, with the right to make reasonable alterations and repairs to the Demised Premises; and (iii) remove all personal property therefrom. d. Recovery. Following termination under paragraph b, Landlord shall have all the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California. The amount of damages which Landlord may recover following termination under paragraph b. shall include the worth at the time of the award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of rental loss Tenant proves could be reasonably avoided. e. Additiorurl Remedies. In addition to the foregoing remedies, Landlord shall, so long as this Lease is not terminated, have the right to remedy any default of Tenant, to maintain or improve the Demised 13 .P : ,- ?. ,a .a. . . *- - I _ . Premises without terminating this Lease, to incur expenses on behalf of Tenant in seeking a new subtenant, or to cause a receiver to be appointed to administer the Demised Premises and new or existing subleases, and to add to the Rent payable hereunder all of Landlords reasonable costs in so doing, with interest at the maximum rptc permitted by law from the date of such expenditure until the same is repaid. f. Other. If Tenant causes or threatens to cause a breach of any of the covenants, agreements, terms or conditions contained in this Lease, Landlord shall be entitled to obtain all sums held by Tenant, by any trustee or in any account provided for herein, to enjoin such breach or threatened breach, and to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceed- ings and other remedies were not provided for in this Lease, g. Cumulatioe. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any oue or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. h. No W’uioer. No failure by Landlord to insist upon the strict performance of any term hereof or to exercise ani right or remedy consequent upon a breach thereof, and no acceptance of full or partial pay-, ment of Rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term. Efforts by Landlord to mitigate the damages caused by Tenant’s breach of this Lease shall not be construed to be a waiver of Landlords right to recover damages under this Section M. Nothing in this Section bl affects the right of Landlord to indemnification by Tenant in accordance with Section F-8 hereinabove for IiabGy arising prior to the termination of this Lease for personal injuries or property damage. - I. N. fiSSICNMENT AND h’mm-nNC. 1. Prohibition. i Tenant shall not assign, mortgage, pledge or otherwise transfer, this Lease, in whole or in part, nor sublet or permit occupancy by any party other than’ Tenant of all or any part of the Demised Premises, without the prior written consent of Landlord in each instance. Any purported assignment or subletting contrary to the provisions hereof without consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. As Additional Rent her&under, Tenant shall reimburse Landlord for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting. 2. LmdlmdOptfon. a. In connection with any proposed assignment or sublease, Tenant shall submit to Landlord in writing (i) the name of the proposed assignee or sublessee, (ii) such information as to its financial responsibility and standing as Landlord may reasonably require, and (iii) all of the terms and conditions upon which the proposed assignment or subletting is to be made. Landlord shall have an option to cancel and terminate this Lease, if the request is to assign the Lease or to sublet all of the Demised Premises; or, if the request is to sublet a portion of the Demised Premises only, to cancel and terminate this Lease with respect to such portion. Landlord may exercise said option in writing within thirty (SO) days after its receipt from Tenant of such request, and in each case such cancellation or termination shall occur as of the date set forth in Landlord’s notice of exercise of such option, which shall be not less than sixty (60) nor more than one hundred-twenty (120) days following the giving of such notice. 14 .i . . . . .I -. . - 1’ . . h. Cancellation. If Landlord shall exercise its option, Tenant shall surrender possession of the entire Demised Premises, or the portion thereof which is the subject of the option, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Demised Premises at the expiration of the Term. If this Lease is cancelled as to a portion of the Demised Premises only, the Fixed Rent after the date of cancellation shall be abated and shall thereafter be an amount deter- mined by Landlord and the Tenant’s Share of Impositions, Tenant’s Share of Operating Expenses and Tenant’s Share of Insurance Expenses shall be adjusted as reasonably determined by Landlord. e- c. NoncunceZZution. If Landlord does not exercise its option to cancel this Lease pursuant to the fore- going provisions, Landlord may withhold its consent to such assignment or subletting, as long as the withhold- ing is not done unreasonably. d. Assumption. No assignment shall be binding upon Landlord, any ground lessor or any mortgagee unless Tenant shall deliver to Landlord an assignment in recordable form which contains an assumption by the assignee, but the failure or refusal of the assignee to execute such instrument or assumption shall not release or discharge assignee from liability as Tenant hereunder, provided that the terms and provisions of the assignment or subletting shall specifically make applicable to the assignee or sublessee all of the provisions of this Section. 3. Bonus Rental. If for any assignment or sublease, Tenant receives rent or other consideration, either initially or over the term of the assignment or sublease, in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Demised Premises, in excess of such Rent fairly allocable to such portion, after appropriate adjustments to assure that all other payments called for hereunder are appropriately taken into account, Tenant shall pay to Landlord, as Additional Rent hereunder, one-half (H) of the excess of each such payment of rent or other consideration received by Tenant promptly after its receipt. 4. Scope. The prohibition against assigning or subletting contained in this section shall be construed to include a prohibition against any assignment or subletting by operation o# law. If this Lease be assigned, or if the under- lying beneficial interest of Tenant be transferred, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of theiimmediately preceding paragraph, but no such assignment, subletting, occu- pancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. No assignment or subletting shall affect the continuing primary liability of Tenant (which, following assignment, shall be joint and several with the assignee), and Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease. 5. Waiver. Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time granted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant witi,out having taken action against or joined such assignee or subleasee, except that Tenant shall have the be&it of any induigences, waivers and extensions of time granted to any such assignee or sublessee. 15 Whenever Landlord conveys its interest in the Lot, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and all further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or grow- ing out of, or connected with this Lease after the effective date of said release. The effective date of said release shall be the date the assignee executes an assumption of such an assignment whereby the assignee expressly agrees to assume all of Landlord’s obligations, duties, responsibilities and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be re- quired to further effect the provisions of this Section. 0. OFFSETSTATEMENT,AITORNMENT,ANDSUBORDINATION. I. Offset Statement. Within ten (IO) days after request therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord of its interest in the Demised Premises, or any part thereof, an offset statement shall be required from Tenant, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser, or to Landlord, certifying (if such de the case) that this Lease is in full force and effect; the date of Tenant’s most recent payment of Rent, and that there are no defenses or offsets outstanding, or stating those claimed by Tenant. Tenant’s failure to deliver said statement in time shall be conclusive upon Tenant that: (i) this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord’s performance and Tenant has no right of offset, counterclaim or deduction against rent hereunder, and (iii) no more than one period’s Fixed Rent has been paid-in advance. 2. Attornment. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage or deed of trust made by the Landlord, its successors or assigns, encumbering the Demised Premises, or any part thereof, or io the event of termination of the Ground Lease, if any, and if so requested, attom to the purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of foreclosure and recognize such purchaser as the Landlord under this Lease. 3. Subordination. The rights of Tenant hereunder are arrd shall be, at the election of any mortgagee, subject and sub- ordinate to the lien of any mortgagezor mortgages, or the lien resulting from any other method of financing or refinancing, now or hereafter in fake against the Lot and/or Building of which the Demised Premises are a part, and to all advances made or hereafter to be made upon the security thereof, provided, however, that notwithstanding such subordination, so long as the Tenant herein is not in default under any of the terms, covenants and conditions of this Lease, neither this Lease nor any of the rights of Tenant hereunder upon Tenant’s covenanting that Tenant is not in default hereunder, shall he terminated or subject to termination by any trustee’s sale. any action to enforce the security, or by any proceeding or action in foreclosure. If requested. Tenant agrees to execute whatever documentation may be required to further effect the provisions of this section. P. Norrm. All notices required to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by personal delivery, to the addresses indicated in Section A-l or at such other place or places as either Landlord or Tenant may, from time to time, respectively, designate in a written notice given to the other. Notices shall be deemed sufficiently served four (4) days after the date of mailing thereof. 10 ‘a * ‘.O . . I -. . . 9. M ISCELLANEOUS. 1. Waiver. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant. term or condition. The cxmsent or approval by either party to or of any act by either party requiring further consent or approval shall not be deemed to waive or render unnecessary their consent or approval to or of any subsequent similar acts. 2. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shal1 any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease. 3. Limitation of Lnndlords Liahility. The obligations of Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers, or shareholders of Landlord, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets of the Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction. 4. Entire Agreement. This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Demised Premises, Building and Lot, and there are no covenants, promises, agreements. conditions or understandings, either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addi- tion to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. 5. Time. Time is of the essence hereof. : 6. Short Form Lease. Concurrently herewith the parties may, at the option of either party, execute a short form of Lease for recording. This Lease and any such short form of Lease shall be construed together as one instrument. Neither Landlord nor Tenant shall record this Lease nor permit the same to be recorded without the written consent of the other, but shall have the right to record any such short form. 7. Attorneys’ Fees. In any action or proceeding which the Landlord or the Tenant may be required to prosecute to enforce its respective rights hereunder, the unsuccessful party therein agrees to pay all costs incurred by the pre- vailing party therein, including reasonable attorneys’ fees, to be fixed by the court, and said costs and attorneys’ fees shall be made a part of the judgment in said action. In any situation in which a dispute is settled other than by action or proceeding, Tenant shall pay all Landlord’s costs and attorneys’ fees relating thereto. 17 , c - . . -. 8. Captions und Section Numbers. The captions, section numbers, article numbers and index appearing itr this Ixase we insttrttd tmiy its a matter of convenience and in no way define, limit, construe or describe the scope or intent or such sectious or articles of this Lease nor in any way affect this Lease. 9. Severability. If any term, covenant, condition or provision of this Lease, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent jurisdiction to be invalid, void or unenforce- able, the remainder of the terms, covenants, conditions or provisions of this Lease, or the application thereof to any person or circumstance, shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 10. Applicable law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in ac- cordance with the laws of the state in which the Demised Premises are located. 11. Examination of Lease. ,, Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to Lease, and it is not effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant. R. Sucassorts BOUND. This Lease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and legal representatives and their respective assigns, subject to the provisions hereof. Whenever in this Lease a reference is made to the Landlord, such reference shall be deemed to refer to the person in whom the interest of the Landlord shall be vested, and Landlord shall have no obligatioti hereunder as to any claim arising after the transfer of its interest in the Demised Premises. Any successor or assignee of the Tenant who accepts an assignment or the benefit of this Leiie and enters into possession or enjoyment hereunder shall thereby assume and agree to perform and be bound by the covenants and conditions thereof. Nothing herein contained shall be deemed in any manner to give a right of assignment to Tenant without the written consent of Landlord. IN W-s WHEREOF, the parties have executed this Lease as of the date first above written. i. -LANDLoRD” ; Attest: PALOMAR 910 ASSOCIATES, LTD. ~ .?&&. By ELI'PERLMAN, Mana~iii~~Par'tntir "' , 'TENANT" CITY OF CARLSBAD 1 Partnership Acknowledgment STATE OF CALIFORNIA COUNTYOF SAN DIEGO ss. On August 11 , 1983 before me, the undersigned, a Notary Public in and for said County and State, personally appeared Eli Perlman known to me to be the mangfg&g rtners of the partnership that executed the within instrument, and acknowledged to me that such partnership executed the same. WITNESS my hand and official seal. Notary Public in and for said County and State. Notary Seal -1 OFFICIAL- SEAL MICHELE BUSH NOTARY PU”LIC - CALIFORNIA NOTARY EOND FiLED IN SA”4 D:GO COUNTY My Commission Expires May 25, 1984 . c v I e l ’ , ,a . ? I* STATE OF mmmm COUNTY OF SAN Dl3-03 ) ss. On August 4, 19@xf ore me, the undersigned, a Notary Public in and for said State, personally appeared M?IRYH.CASLER , .known to me to be the Mayor r. ___-----L---I-- and ____ - -__ ----------- of the city of Carl&ad , the corporation that executed the within instrument, known to me to be the persons who executed the within instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. . . . . . . . . . . . . . . STATEOF CALIFORNIA C~JN-ITOF SAN DIEGO 1 ss. On Au9.11, 1 9 83before me, the undersigned, a Notary Public in and for said State, personally . L. appeared Eli Perlman ; , known to me to be the Ltd. General Partnela& of Palomar 910 Assoc.,,the corporation that executed the within instrument, known to me to be the persons who executed the within mstrurnent on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. ..,.._..__,.........,...................,..... Notary Public 19 . . . ADDENDUM TO THE STANDARD FORhI hJUL’J-lPLE OccLJPANGY LEASE BJ’ AND BETWEEN PALOMAR 910 ASSOCIATE:&LTD. THE CITY OF CiiLSBAD (LANDLORD) (TENANT) DATED AS OF July 13, 1983 - -- _ -- _ The promises, covenants, agreements and declarations made and set forth herein are intended to and shall have the same force and effect as if set forth at length in the body of the lease to which this Addendum is attached (the “Lease”). To the extent that the provisions of this Addendum are inconsistent with the terms and conditions of the Lease, the terms hereof shall control: comma a 1. Section B-3. Section B-S below. 2. Section F -7. Section F-7 is hereby retitled to read: “Tenant’s Proprty” and the language of said Section is hereby revised to read as follows: “Tenant shall assume the risk of damage to any fixtures, goods, inventory, merchan- di se, equipment, furniture and leasehold improvements which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises, and Tenant shall maintain reasonable insurance coverage with respect to such items during the Term of this kase. ” i 3. Section C.-Z - \I’ith reference to Section G-2, the following language is hereby added thereto: “T&nant expressly understands that there shall be no affirmative responsibility with respect to either party in connection with repairs to the \valls of the Demised Premises relating to maturity or weathering of construction m,aterials and contrasted to damage to the structural integrity of the building walls. F&r, LL .4DDENDUM m -. -I I l . ’ - , *. . . . . _ ( (4 ( 4. Section M -1. The Semicolon following Subsection M-l (b) is hereby changed to a period and the folIowing sentence is hereby added at the end of said Sub- section: “Should there be consecutive failure to pay such installments for two (2) months in a row then Rent shall become due and payable quarterly in advance on the first day of each calendar quarter during the following one (I) year period of the Term of the Lease, after which year Rent shall again be payable monthly and this Section shall again be in effect. ‘* 5. Section Q-12. .A new Section Q-12 is added entitled “Financial Statements” and contains the following language: “At any time during the Term of the Lease; Tenant shall, upon thirty (30) days’ prior written notice from Landlord in connection with any financing of the Demised Premises,. provide Landlord with a current financial statement and financial statements for each ‘of the two (2) years prior to the current financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and shall be audited by independent certified public accountants if such is the normal practice of Tenant. ” 6. Section Q- 13. cement date of 7. Section Q- 14. A new Sect&r Q-14 entitled “Surrender of Premises; Holding Over” is added hereto and contains the following language: “On expiration of ten (10) days after termination of the Term, Tenant shall surrender to Landlord the Demised Premises and all Tenant’s improvements and alterations in good condition (except for ordinary wear and tear occurring after the last necessary maintenance made by Tenant and except for destruction of the Demised Premises covered by Article K) except for alterations that Tenant has the right to remove or is obligated to remove after the provisions of Article H. Tenant shall remove al’l its personal property within the above stated time period. - Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant’s personal property within the time period stated in this Section. Landlord can elect to retain or dispose of in any manner any alterations or Tenant’s personal property that Tenant does not remove from the Demised Premises on expiration or termination of the Term as allowed or required by . ADDENDUM Pam= 3 nf A . * T l a,_ * e\ / : . I .\ pc . this Lease by giving at least ten (IO) days notice to Tenant. Title to any such .- alterations or Tenant’s personal property that Landlord elects to retain or dispose of on expiration of the ten (IO) day period shall vest in Landlord. Tenant waives all claims against Landlord for any damage to Tenant resulting from Landlord’s retention or disposition of any such alterations or Tenant’s personal property. Tenant shall be liable to Landlord for Landlord’s costs for storing, removing and disposing of any alterations or Tenant’s personal property. If Tenant fails to surrender the Demised Premises to Landlord on expiration or ten (10) days after terkination of the Term as required by this Section, Tenant shall hold Landlord harmless from all damages resulting from Tenant’s failure to surrender the Demised Premises including without limitation claims made by a succeeding Tenant resulting from Tenant’s failure to surrender the Demised Premises. ” 8. Section-Q-15. A new SecJion Q-15 entitled “option to Extend” is added s the following language: “Landlord hereby grant less than four (4) The option is exercis Premises and has not sublet Lease. The Fixed-Rent increased in propor items: Los An rm of this Lease. possession of the igned its position in this ing the extended term shall be ex published for the first month of the origina y event, the Fixed Rent payable during the exte.ncjed ess than the Fixed Rent payable during the original Term of the Lea IN WITNESS WHEREOF, the parties have executed this Addendum as of the day and year first above written. e. i ADDENDUM Page 3 of 4. k-f// /y&g Date I PALOMAR 910 &S$OCIATES, LTD. BY ELI PERLMA?? Its Managing Partner "LALJDLORD" CITY OF CARLSBAD Its Mayor "TENAXT" -- :. ?*..A **s, ADDENDUM Page 4 of 4 i t-;-,.'.. : . :j' ). :. .::. /..,_ .>;;r+..,+ .;- ; t . . rC Appendix A - .-._---a- -- .--.- - ~- -- YARAOW DRIVE - r _A. .-. 6351 YARROW DE$-[455' -7-r --------l / \; \I : !o: p : \ ,r_ * I\ 5 1) L a 5 P \ ‘/ 9 ,% \: G I: \ \I \:.s ‘i\ \” ,, 7 iit ‘,, \ ‘\ ‘, &ite C j i*~il r I: > 1 I .I : .; ,c .v :$ Alrporl INTERSTATE 8 I 12b 12 f 12a / 9 2 Acres 8.1 Clcrn , 4 0 Acre5 \ /, i - _ t & San Diego Palomar Airport Business Park 6231 YARROW DRIVE. SUITE C. CARLSBAD, CALIF. 92008 TELEPHONE (714) 438-2552 q REALTOR 1660 HOTEL CIRCLE NORTH, SUITE 216 SAN DIEGO, CALIFORNIA 92106 PHONE (619) 299-5160 July 25, 1983 City of Carlsbad 1200 Elm Street Carlsbad, Ca. 92008 Attn: Mrs. Ruth Fletcher Purchasing Agent Dear Mrs. Fletcher: Per your request I am enclosing another three copies of our proposed lease agreement for 6351 Yarrow Drive, Suite C. Upon approval, please sign and return two copies to me. I will sign and return a fully executed copy for your files. Sincerely, PALOMAR99l.-0 ASSOCIATES, LTD. &qG.ziL cLAc\ by ELI PERLMAN Managing Partner Investment CounselingIExchangesISalesILeases 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008 Office of the City Clerk TELEPHONE: (714) 438-5535 August 5, 1983 Eli Pearlman Realty Company 1660 Hotel Circle North, Suite 216 San Diego, CA 92108 Attention: Eli Pearlman Re: Lease of Storage Space at 6351 C Yarrow Drive The Carlsbad City Council, at its meeting of August 2, 1983, adopted Resolution No. 7309, approving the above referenced lease of storage space. Per your request, enclosed are two copies of the lease which have been executed on behalf of the City of Carlsbad. Please return a fully executed copy to this office as soon as possible. Thank you for your assistance in this matter; Deputy City Clerk Enc. q REALTOR August 11, 1983 1660 HOTEL CIRCLE NORTH, SUITE 216 SAN DIEGO, CALIFORNIA 92106 PHONE (619) 2995180 City of Carlsbad, CA. 1200 Elm Avenue Carlsbad, Ca. 92008 Re: Lease at 6351 Yarrow Drive, Suite "C", Carlsbad, Ca. Attn: Karen R. Kundtz Deputy City Clerk Dear Ms. Kundtz: Enclosed please find a fully executed copy of the referenced lease. I appreciate the opportunity of being able to continue leasing b' space to the City of Carlsbad. J' J- .-,? 1, * i- \,\ :g- .,:" Per terms of this new lease, Page 5, Para. D.2, Deposit, "Upon ' ';-' ::r" execution of this lease, the existing $1,836.44 deposit under th ! : preceding 1982-1983 lease shall be increased $163.56 to a total of $2,000." Your check for this increased deposit amount wil I/ be appreciated. Your rent beginning October 1, 1983 will be $2,000.00, and will be due on that date. Thank you for your cooperation in arranging for this new lease. I look forward to a continuing mutually beneficial relationship. Sincerely, PALOMAR 910 ASSOCIATES, LTD. ~~7~~Jw4PY Eli Perlman, Managing Partner Investment CounselinglExchangeslSalesILeases - - EXHIBIT A . . PALOMAIZ 010 ASSOCIATES, LTD. c/h ELI PERLMAN RISALTY CO. 1660 HOTEL CIRCLE NORTH. SUITE 216 SAN OIEGO. CA B2106 299.5160 May 15, 1986 City of Carlsbad 1200 Elm Street Carlsbad, CA 92008-1989 Re: Lease at 6351 Yarrow Drive, Suite G, Carlsbad, CA Attn: Mrs. Ruth Fletcher Purchasing Agent Dear Mrs. Fletcher: Your lease at 6351 Yarrow Drive, Suite C, Carlsbad, is scheduled to terminate on September 30, 1986. As you will recall, it is a gross lease and the Landlord is responsible for all common area operating expenses including cleaning, maintenance, and repair. The Landlord is also responsible for real estate taxes and property insurance. Your current rental rate is $2450 per month. The rented space is 5760 sq. ft. You have requested that I give you proposals for both a two year and for a three year extension. I hereby propose that we agree to an extension of this - lease with either of the following alternative changes to the lease: THREE YEAR EXTENSION PERIOD RENTAL RATE (GROSS) SECURITY DEPOSIT 10/l/86 - g/30/87 10/l/87 - g/30/88 10/l/88 - g/30/89 $2625/month $2785/month $2950/month $2625 $2785 $2950 TWO YEAR EXTENSION PERIOD 10/l/86 - g/30/87 10/l/87 - g/30/88 RENTAL RATE (GROSS) SECURITY DEPOSIT $2625/month $2625 $2785/month $2785 All other terms and conditions of your lease would remain unchanged. I am providing you under seperate cover rental survey information which will document that theserates are below current rates for similar space in this area. -4 May 15, 1986 City of Carlsbad Page 2 If either of these alternatives are acceptable to you, please indicate below which you have chosen, have this document appropriately signed and notorized, and return one copy to me. Eli Perlman, Managing Partner EP:pe WE HEREBY AGREE TO THE ABOVE PROPOSED CHANGES FOR A THREE YRAR EXTENSION TO THE REFERENCED LEASE. Date &LI/ ,,7? I~J&, Dated* d 7 t!?p6 CITY OF CARLSBAD PALOMAR910 ASSOCIATES by%,/&& MARY H. C#SLER, Mayor Eli Perlman, its Managing Partner AMENDMENT The third year or any part of the last twelve months lease may be cancelled by the lessee with six months written notice to the lessor. !v C - EXHIBIT A &Yy?, STANDARD FORM MULTIPLE OCCUPANCY LEASE LEASE Lessor: PALOMAR 910 ASSOCIATES, LTD. Lessee: CITY OF CARLSBAD Dated as of: May 2, 1989 A. DEFINED TERMS, EXHIBITS, TABLE OF CONTENTS, PREMISES, COMMON AREAS 1. Defined Terms. Each reference in this Lease to any of the following titles shall incorporate the data stated for that title. Other terms are as defined in the Lease. Landlord: PALOMAR 910 ASSOCIATES, LTD. Tenant: CITY OF CARLSBAD Building Location: Street Address: 6351 Yarrow Drive, Suite C City: Carlsbad County: San Diego State: California Tenant's Floor Space: Approximately 5,760 square feet Total Rentable Floor Space: 42,480 square feet Term: Three years Fixed Rent: Oct. 1, 1989 - Sept. 30, 1990: $2,950.00 per month Oct. 1, 1990 - Sept. 30, 1991: $3,190.00 per month Oct. 1, 1991 - Sept. 30, 1992: $3,415.00 per month Tenant's Share of Operating Expenses: 0% Tenant's Share of Impositions: 0% Scheduled Term Commencement Date: October 1, 1989 Liability Insurance Amounts: Bodily Injury per person: $500,000.00 Bodily Injury per occurrence: $1,000,000.00 LESSOR APPROVAL: LESSEE APPROVAL: 1 I * . Property Damage: $500,000.00 Boiler Insurance: $500,000.00 Landlord's Address: 1660 Hotel Circle North, Suite 216 San Diego, CA 92108 Tenant's Address: 1200 Elm Street Carlsbad, CA 92008 Permitted Uses: Any lawful uses consistent with the Declaration of Covenants and Restrictions Declaration of Covenants and Restrictions: Copy delivered to tenant. Recorded: October 1, 1974. Amended February 25, 1977 and May 23, 1977 2. Table of Contents Page A. Defined Terms, Exhibits, Table of 1 Contents, Premises, Common Areas B. Term............ . . . . . . . . 4 c. Rent.................... 4 D. Impositions . . . . . . . . . . . . . . . . 5 E. Insurance . . . . . . . . . . . . . . . . . 5 F. Repairs, Maintenance, Alterations, . . . . . 6 Operating Expenses G. Tenant's Fixtures and Personal Property . . 7 H. Utilities and Boundaries . . . . . . . . . . 8 I. Use of Premises . . . . . . . . . . . . . . 8 J. Damage or Destruction . . . . . . . . . . . 9 K. Eminent Domain . . . . . . . . . . . . . . . 11 L. Default . . . . . . . . . . . . . . . . . . 12 M. Assignment and Subletting . . . . . . . . . 15 N. Offset Statement, Attornment and 2 Subordination . . . . . . . . . . . . . . . 17 0. Notices . . . . . . . . . . . . . . . . . . 18 P. Miscellaneous . . . . . . . . . . . . . . . 18 Q. Successor Bound . . . . . . . . . . . . . . 20 The following Exhibits are attached to this Lease after the signatures and are incorporated herein by reference thereto. Description: Exhibit A - Tenant's Floor Plan 3. Premises. Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant's Floor Space 'Demised Premises') in the Building extending from the top surface of subfloor to the bottom surface of ceilings above but excluding the common stairways, stairwells, hallways, accessways, and pipes, ducts, conduits, wires, and appurtenant fixtures serving exclusively or in common other parts of the Building, and if Tenant's Floor Space includes less than the entire rentable area of any floor, excluding also the remainder of the Floor Common Area. 4. Common Areas. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reasonable rules from time to time made by Landlord of which Tenant is given notice: (a> Building Common Areas. The common stairways and accessways, loading docks and platforms and any passageways thereto, and the common pipes, ducts, conduits, wires, and appurtenant equipment serving the Demised Premises. 0) Floor Common Area. If the Demised Premises include less than the entire rentable area of any floor, the common lobbies, hallways, toilets and other common facilities; and (cl Land Common Area. Common walkways, sidewalks and driveways necessary for access to the Building and parking spaces or area from time to time maintained on the real property upon which the Building is located ("Lot") and to the extent from time to time arranged by the Landlord, on adjacent real property. 5. Landlord's Reserved Rights in Common Areas. Landlord reserves the right from time to time, without 3 unreasonable interference with Tenant's use: (a) Building Changes: To install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Demised Premises which are so located elsewhere outside the Demised Premises; (b) Boundary Changes: To change the lines of the Lot; cc> Facility Changes: To alter or relocate any other common facility; provided, however, that substitutions are substantially equivalent or better in quality. B. TERM. The term of this Lease is for a period of three (3) years, commencing October 1, 1989 and ending September 30, 1992, provided, however, Lessee shall have the right to terminate said Lease anytime after completion of one (1) year of this Lease by first giving one hundred and eighty (180) days prior written notice to the Lessor on or after September 30, 1990. c. RENT. 1. Fixed Rent. Tenant shall pay the Fixed Rent to Landlord in advance upon the first day of each month of the Term, at Landlord's address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any deduction or setoff whatsoever. If the Term shall commence and end on a day other than the first day of a month, then Tenant shall pay, upon the commencement date of the Term or first day of the last month, a prorata portion of the Fixed Rent described in the foregoing paragraph, prorated on a per diem basis, with respect to the portions of the fractional month included in the Term. 2. Deposit. Upon execution of this lease, the existing $2,950.00 deposit under the preceding 1986 - 1989 lease will not be used as payment for September 1989 rent, but shall be assigned over to this lease for payment against the last month's rent of this lease. On October 1, 1990 and on October 1, 1991, this deposit shall be increased to $3,190.00 and to $3,415.00 respectively. LESSOR: LESSEE: 4 3. Interest. If any installment of Rent is not paid promptly when due, it shall bear interest at the lower rate of either ten percent (10%) or the maximum rate permitted by law, from the date on which it is due until the date on which it is paid, regardless of whether or not a notice of default or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time and in the manner herein specified. D. IMPOSITIONS. 1. Limitation. Nothing contained in this Lease shall require Tenant to pay any franchise, corporate, estate, inheritance, succession, or transfer tax of Landlord, or any income, profits, or revenue tax or charge, upon the net income of Landlord; provided, however, that if at any time during the Term under the laws of the United States Government or the state in which the Demised Premises are located, or any political subdivision thereof, a tax or excise on rent, or any other tax, however described, is levied or assessed by any such political body against Landlord on account of rentals payable to Landlord, Tenant shall pay one hundred percent (100%) of any such tax or excise on rent as Additional Rent. 2. Personal Property Taxes. Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and other personal property placed in and upon the Demised Premises by Tenant. E. INSURANCE. 1. Fire and Extended Coverage. During the Term Landlord shall procure and maintain in full force and effect with respect to the Building a policy or policies of fire insurance with extended coverage endorsement attached, including vandalism and malicious mischief coverage, and any other endorsements required by the holder of any fee or leasehold mortgage in an amount equal to one hundred percent (100%) of the full insurance replacement value (replacement cost new, including debris removal, and demolition) thereof. 2. Tenant's Fixtures. Tenant shall assume the risk of damage to any fixtures which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises. 5 3. Indemnification of Landlord. Tenant shall indemnify and hold Landlord and the Demised Premises harmless from and against (i) any and all liability, penalties, losses, damages, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of any injury to any person or persons or any damage to any property as a result of any accident or other occurrence during the term of this Lease occasioned by any act or omission of the Tenant, its officers, employees, agents, servants, subtenants, concessionaires, licensees, contractors, invitees or permittees, or arising from or growing out of the use, maintenance, occupation, or operation of the Demised Premises during the term of this Lease, and (ii) from and against all legal costs and charges, including reasonable attorney's fees, incurred in and about any of such matters and the defense of any action arising out of the same or in discharging the Demised Premises or any part thereof from any and all action arising out of the same or in discharging the Demised Premises or any part thereof from any and all liens, charges or judgments which may accrue or be placed thereon by reason of any act or omission of the Tenant; provided, howe-nr, that Tenant shall not be required to indemnify Landlord for any damage or injury of any kind arising as the result of Landlord's negligent acts or those of its agents or employees. F. REPAIRS, MAINTENANCE, ALTERATIONS, OPERATING EXPENSES. 1. Operating Expense. Landlord shall be responsible for operation, cleaning, maintenance, repair and management of the building and lot, walks, driveways, parking and loading areas, lawns and landscaping. 2. Tenant Repairs and Maintenance. Tenant shall, at Tenant's sole cost and expense, keep and maintain the Demised Premises, subfloors and floor coverings in good repair and in a clean and safe condition, casualties covered by insurance coverage excepted to the extent of proceeds received. Tenant shall, at Tenant's own expense, immediately replace all glass in the Demised Premises that may be broken during the Term with glass at least equal to the specifications and quality of the glass so replaced. 3. Landlord Repairs and Maintenance. Landlord shall, at its expense, after written notice from Tenant, repair in a prompt and diligent manner any damage to structural portions of the roof and bearing walls of the Demised Premises; provided, however, that if such damage is caused by an act or omission of Tenant, then such repairs shall be at Tenant's expense, payable to Landlord as Additional Rent hereunder. There shall be no abatement of Rent during the performance of such work. 6 Landlord shall not be liable to Tenant for injury or damage during the performance of such work. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or conditions of the Demised Premises. Tenant waives any right to make repairs at the expense of Landlord under any law, statute, or ordinance now or hereafter in effect. 4. Inspection of Leased Premises. Landlord, at reasonable times, upon reasonable notice, may go upon and into the Demised Premises for the purpose of inspecting the same, or for the purpose of inspecting the performance by Tenant of the terms and conditions hereof, and for the purpose of affixing reasonable signs and displays and showing the Demised Premises to prospective purchasers, tenants and lenders. 5. Workmanlike Quality. All repairs, alterations, additions and restoration by Landlord or Tenant hereinafter required or permitted shall be done in a good and workmanlike manner and in compliance with all applicable laws and lawful ordinances, by-laws, regulations and orders of governmental authority and of the insurers of the Building. 6. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at request of Tenant and shall keep the Demised Premises free and clear of all mechanic's and materialmen's liens in connection therewith. Landlord shall have the right to post or keep posted on the Demised Premises, or in the immediate vicinity thereof, any notices of non- responsibilty for construction, alteration or repairs of the Demised Premises by Tenant. If any such lien is filed, Landlord may, but shall not be required to, take such action or pay such amount as may be necessary to remove such lien; and Tenant shall pay to Landlord as Additional Rent at such amounts expended by Landlord together with interest thereon at the highest legal rate from the date of expenditure. G. TENANT'S FIXTURES AND PERSONAL PROPERTY. Tenant, at its expense, may install any necessary trade fixtures, equipment and furniture in the Demised Premises, provided that such items are installed and are removable without damage to the structure of the Building. Landlord reserves the right to approve or disapprove of curtains, draperies, shades, paint, or other interior improvements visible from outside the Demised Premises on wholly aesthetic grounds. Such improvements must be submitted for Landlord's written approval prior to installation, or Landlord may remove or replace such items at Tenant's sole expense. Said trade fixtures, equipment and furniture shall remain Tenant's property and 7 shall be removed by Tenant upon expiration of the Term, or earlier termination of this Lease. Upon Landlord's prior written approval, Tenant may make structural alterations and may also install temporary improvements in the interior of the Demised Premises, provided that such temporary improvements are installed and are removable without damage to the structure of the Building. Such temporary improvements shall remain the property of Tenant and shall be removed by Tenant upon expiration of the Term or earlier termination of this Lease. Tenant shall repair, at its sole expense, all damage caused by the installation or removal of trade fixtures, equipment, furniture, or temporary improvements. If Tenant fails to remove the foregoing items on termination of this Lease, Landlord may keep and use them or remove any or all of them and cause them to be stored and sold in accordance with applicable law. H. UTILITIES AND BOUNDARIES 1. Utilities. Tenant shall be solely responsible for and promptly pay all charges for heat, water, gas s electricity, and any other utilities used or consumed on the Demised Premises. Landlord shall not be liable to Tenant for interruption or curtailment of any utility service, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement in whole or in part hereunder. If any such utilities are not separately metered, Tenant shall pay a prorata share, based on use, as determined by Landlord. 2. Easements. Landlord reserves the right to (i) alter the boundaries of the Lot and (ii) grant easements on the Lot and dedicate for public use portions thereof without Tenant's consent, subject to provisions of Section N-2 hereof, and provided that no such grant or dedication shall interfere with Tenant's use of the Demised Premises or otherwise cause Tenant to incur cost or expense. From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge and deliver to Landlord or in accordance with Landlord's instructions any and all documents, instruments, maps, or plats necessary to effectuate Tenant's covenants hereunder. I. USE OF PREMISES. 1. General. The Demised Premises shall be used for the Permitted Uses, consistent with the Declaration of Covenants and Restrictions and any supplement thereto. Tenant shall, at Tenant's sole cost and expense, comply with all of the requirements of municipal, county, state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertaining to the Demised 8 Premises, Building and Lot, and secure any necessary permits therefor and shall faithfully observe, in the use of the Demised Premises, Building and Lot, all municipal and county ordinances and state and federal statutes now in force, or which may hereafter be in force. Tenant shall obtain any required certificate of occupancy with respect to its use of the Demised Premises, Building and Lot within thirty (30) days from the commencement of the Term hereof and shall deliver a COPY thereof to Landlord within said thirty (30) day period. Tenant in its use and occupancy of the Demised Premises shall not commit waste, nor overload the floors or structure, nor subject the Demised Premises to any use which would tend to damage any portion thereof. 2. Signs. Any sign placed or erected by Tenant on the Demised Premises, Building or Lot, except in the interior of the Demised Premises, shall contain only the Tenant's name, or the name of any affiliate of Tenant actually occupying the Demised Premises, and no advertising matter. No such sign shall be erected until Tenant has obtained Landlord's written approval of the location, material, size, design and content thereof and any necessary permit therefor. Tenant shall remove any such sign upon termination of this Lease, and shall return the Demised Premises to their condition prior to the placement or erection of said sign. 3. Parking Access. In addition to the general obligation of the Tenant to comply with laws and without limitiation thereof, Landlord shall not be liable to Tenant, nor shall this Lease be affected if any parking privileges appurtenant to the Demised Premises, Building or Lot are impaired by reason of any moratorium, initiative, referendum, statute, regulation or other governmental decree or action which could in any manner prevent or limit the parking rights of Tenant hereunder. Any governmental changes or surcharges or other monetary obligations imposed relative to parking rights with respect to the Demised Premises, Building and Lot shall be considered as Impositions and shall be payable by Tenant under the provisions of Section D hereinabove. J. DAMAGE OR DESTRUCTION. 1. Reconstruction. If the Demised Premises are damaged or destroyed during the Term, Landlord shall, except as hereinafter provided, diligently repair or rebuild them to substantially the condition in which they existed immediately prior to such damage or destruction; provided that any damage which is estimated in good faith by Landlord to be under Five Thousand Dollars ($5,000.00) shall be repaired by Tenant, and Landlord shall reimburse Tenant upon demand for expenses incurred 9 in such repair work. 2. Rent Abatement. Rent due and payable hereunder shall be abated proportionately during any period which, by reasons of such damage or destruction, Tenant reasonably determines that there is a substantial interference with the operation of Tenant's business in the Demised Premises, having regard to the extent to which Tenant may be required to discontinue its business in the Demised Premises. Such abatement shall continue for the period commencing with such damage or destruction which Landlord is obligated or undertakes to do. If it be determined that continuation of business is not practical pending reconstruction, Fixed Rent due and payable hereunder shall abate to the extent of proceeds from rental abatement insurance until reconstruction is substantially completed or until business is totally or partially resumed, whichever is the earlier. 3. Excessive Damage or Destruction. If the building is damaged or destroyed to the extent that Landlord determines that it cannot, with reasonable diligence, be fully repaired or restored by Landlord within one hundred and eighty (180) days after the date of the damage or destruction, the sole right of both Landlord and Tenant shall be the option to terminate this Lease. Notwithstanding the fact that the Demised Premises have not been damaged or destroyed, Landlord shall determine whether the building can be fully repaired or restored within the one hundred and eighty (180) day period, and Landlord's determination shall be conclusive on Tenant. Landlord shall notify Tenant of its determination, in writing, within thirty (30) days after the date of the damage or destruction. If Landlord determines that the Building can be fully repaired or restored within the one hundred and eighty (180) day period, or if it is determined that such repair or restoration cannot be made within said period but neither party elects to terminate within thirty (30) days from the date of said termination, this Lease shall remain in full force and effect and Landlord shall diligently repair and restore the damage as soon as reasonably possible. 4. Uninsured Casualty. Notwithstanding anything contained herein to the contrary, in the event of damage to or destruction of all or any portion of the Building which is not fully covered by the insurance proceeds received by Landlord under the insurance policies required under Section E-l above, Landlord may terminate this Lease by written notice to Tenant, giving thirty (30) days after the date of notice to Landlord that said damage or destruction is not so covered. If Landlord does not elect to termiante this Lease, the Lease shall remain in full force and effect and the Building shall be repaired and rebuilt in accordance with the provisions for repair set forth 10 in Section J-l hereinabove. 5. Waiver. With respect to any destruction which Landlord is obligated to repair or may elect to repair under the terms of this Section J, Tenant hereby waives all right to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law to tenants, except as expressly otherwise provided herein. K. EMINENT DOMAIN. 1. Total Condemnation of Demised Premises. If the whole of the Demised Premises is acquired or condemned by eminent domain, inversely condemned or sold in lieu of condemnation, for any public or quasi-public use or purpose ("Condemned"), then the Term shall terminate as of the date of title vesting in such proceeding, and Rent shall be adjusted to the date of termination. Tenant shall immediately notify Landlord of any such occurrence. 2. Partial Condemnation. If any part of the Demised Premises is partially Condemned, and such partial condemnation renders the Demised Premises unusable for the business of the Tenant, then the Term of this Lease shall terminate as of the date of title vesting in such proceeding and Rent shall be adjusted to the date of termination. If such condemnation is not extensive enough to render the Demised Premises unusable for the business of Tenant, then Landlord shall promptly restore the Demised Premises to a condition comparable to its condition immediately prior to such condemnation to the extent of any condemnation proceeds recovered by Landlord, less the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting the Fixed Rent shall be reduced as reasonably determined by Landlord. If any parking areas are condemned, Landlord has the option but not the obligation to supply Tenant with other parking areas. 3. Landlord's Award. If the Demised Premises are wholly or partially condemned, then subject to the provisions of Section K-4, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority. 4. Tenant's Award. Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right 11 on account of any and all costs or loss (including loss of business) to which Tenant might be put in removing Tenant's merchandise, furniture, fixtures, leasehold improvements and equipment to a new location. 5. Temporary Condemnation. If the whole or any part of the Demised Premises shall be condemned for any temporary public or quasi-public use or purpose, this Lease shall remain in effect and Tenant shall be entitled to receive for itself such portion or portions of any award made for such use with respect to the period of the taking which is within the Term. If a temporary condemnation remains in force at the expiration or earlier termination of this Lease, Tenant shall pay to Landlord a sum equal to the reasonable cost of performing any obligations required of Tenant by this Lease with respect to the surrender of the Demised Premises, including without limitation repairs and maintenance required, and upon such payment Tenant shall be excused from any such obligations. If a temporary condemnation is for an established period which extends beyond the Term, the Lease shall terminate as of the date of occupancy by the condemning authority, and the damages shall be as provided in Sections K-3 and K-4 and Rent shall be adjusted to the date of occupancy. 6. Notice and Execution. Landlord shall, immediately upon service of process in connection with any condemnation or potential condemnation, give Tenant notice in writing thereof. Tenant shall immediately execute and deliver to the Landlord all instruments that may be required to effectuate the provisions of this paragraph. L. DEFAULT. 1. Events of Defaults. The occurrence of any of the following events shall constitute an "Event of Default" on the part of Tenant with or without notice from Landlord: see Addendum. a. Vacation or Abandonment. Vacation or abandonment of the Demised Premises; b. Payment. Failure to pay an installment of Rent or other monies due and payable hereunder upon the date when said payment is due, the failure continuing for a period of five (5) days after said payment is due; C. Performance. Default in the performance of any of Tenant's covenants, agreements or obligations hereunder, except default in the payment of Rent or other monies, the default continuing for thirty (30) days after written notice thereof 12 from Landlord; d. Assignment. A general assignment by Tenant for the benefit of creditors: e. Bankruptcy. The filing of a voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's creditors immediately unless involuntary, in which case when the petition remains undischarged for a period of thirty (30) days; f. Receiver. The appointment of a receiver to take possession of substantially all of Tenant's assets or of this leasehold, the receivership0 remaining undissolved for a period of thirty (30) days; or 8. Attachment. Attachment, execution, or other judicial seizure of substantially all of Tenant's assets or this leasehold, the attachment, execution, or other seizure remaining undismissed or undischarged for a period of thirty (30) days after the levy thereof. 2. Landlord's Remedies. a. Abandonment. If Tenant vacates or abandons the Demised Premises, this Lease shall continue in effect. Landlord shall not be deemed to have terminated this Lease other than by written notice of termination from Landlord, and Landlord shall have all of the remedies of a landlord provided by Section 1951.4 of the Civil Code of the State of California. At any time subsequent to vacation or abandonment of the Demised Premises by Tenant, Landlord may give notice of termination and shall thereafter have all of the rights hereinafter set forth. b. Termination. Following the occurrence of any Event of Default, Landlord shall have the right, so long as the default continues, to terminate this Lease by a written notice to Tenant setting forth: (i) the default, (ii) the requirements to cure it, and (iii) a demand for possession, which shall be effective three (3) days after it is given or upon expiration of the times specified in Section L-l hereinabove, whichever is later. c. Possession. Following termination under paragraph b, without prejudice to other remedies Landlord may have by reason of Tenant's default or of such termination, Landlord may then or at any time thereafter, (i) peaceably re-enter the Demised Premises, or any part thereof, upon voluntary surrender by Tenant or expel or remove Tenant therefrom and any other persons occupying them, using such legal proceedings as are then available; (ii) again repossess and enjoy the Demised Premises, or relet the Demised Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term) at 13 such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion shall determine, with the right to make reasonable alterations and repairs to the Demised Premises; and (iii) remove all personal property therefrom. d. Recovery. Following termination under paragraph b, Landlord shall have all the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California. The amount of damages which Landlord may recover following termination under paragraph b shall include the worth at the time of the award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of rental loss Tenant proves could be reasonably avoided. e. Additional remedies. In addition to the foregoing remedies, Landlord shall, so long as this Lease is not terminated, have the right to remedy any default of Tenant, to maintain or improve the Demised Premises without terminating this Lease, to incur expenses on behalf of Tenant in seeking a new subtenant, or to cause a receiver to be appointed to administer the Demised Premises and new or existing subleases, and to add to the Rent payable hereunder all of Landlord's reasonable costs in so doing, with interest at the maximum rate permitted by law from the date of such expenditure until the same is repaid. f. Other. If Tenant causes or threatens to cause a breach of any of the covenants, agreements, terms or conditions contained in this Lease, Landlord shall be entitled to obtain all sums held by Tenant, by any trustee or in any account provided for herein, to enjoin such breach or threatened breach, and to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceedings and other remedies were not provided for in this Lease. g* Cumulative. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. h. No Waiver. No failure by Landlord to insist upon the performance of any term hereof or to exercise any right or 14 remedy consequent upon a breach thereof, and no acceptance of all or partial payment of Rent during the continuance of any such breach, shall consitute a waiver of any such breach or of any such term. Efforts by Landlord to mitigate the damages caused by Tenant's breach of this Lease shall not be construed to be a waiver of Landlord's right to recover damages under this Section L. Nothing in this Section L affects the right of Landlord to indemnification by Tenant in accordance with Section E-3 hereinabove for liability arising prior to the termination of this Lease for personal injuries or property damage. M. ASSIGNMENT AND SUBLETTING. 1. Prohibition. Tenant shall not assign, mortgage, pledge or otherwise transfer this Lease in whole or in part, nor sublet or permit occupancy by any part other than Tenant of all or any part of the Demised Premises, without the prior written consent of the Landlord in each instance. Any purported assignment or subletting contrary to the provisions hereof without consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. As Additional Rent hereunder, Tenant shall reimburse Landlord for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting. 2. Landlord Option. a. In connection with any proposed assignment or sublease, Tenant shall submit to Landlord in writing (i) the name of the proposed assignee or sublessee, (ii) such information as to its financial responsibility and standing as Landlord may reasonably require, and (iii) all of the terms and conditions upon which the proposed assignment or subletting is to be made. Landlord shall have an option to cancel and terminate this Lease, if the request is to assign the Lease or to sublet all of the Demised Premises; or, if the request is to sublet a portion of the Demised Premises only, to cancel and terminate this Lease with respect to such portion. Landlord may exercise said option in writing within thirty (30) days after its receipt from Tenant of such request, and in each case such cancellation or termination shall occur as of the date set forth in Landlord's notice of exercise of such option, which shall be not less than sixty (60) nor more than one hundred and twenty (120) days following the giving of such notice. b. Cancellation. If Landlord shall exercise its option, Tenant shall surrender possession of the entire Demised Premises, or the portion thereof which is subject of the option, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Demised 15 Premises at the expiration of the Term. If this Lease is cancelled as to a portion of the Demised Premises only, the Fixed Rent after the date of cancellation shall be abated and shall thereafter be an amount determined by Landlord and the Tenant's Share of Impositions, Tenant's Share of Operating Expenses and Tenant's Share of Insurance Expenses shall be adjusted as reasonably determined by the Landlord. c. Noncancellation. If Landlord does not exercise its option to cancel this Lease pursuant to the foregoing provisions, Landlord may withhold its consent to such assignment or subletting, as long as the withholding is not done unreasonably. d. Assumption. No assignment shall be binding upon Landlord, any ground lessor or any mortgagee unless Tenant shall deliver to Landlord an assignment in recordable form which contains an assumption by the assignee, but the failure or refusal of the assignee to execute such instrument or assumption shall not release or discharge assignee from liability as Tenant hereunder, provided that the terms and provisions of the assignment or subletting shall specifically make applicable to the assignee or sublessee all of the provisions of this Section. 3. Bonus Rental. If for any assignment or sublease, Tenant receives rent or other consideration, either initially or over the term of the assignment or sublease in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Demised Premises, in excess of such Rent fairly allocable to such portion, after appropriate adjustment to assure that all other payments called for hereunder are appropriately taken into account, Tenant shall pay to Landlord, as Additional Rent hereunder, one-half (l/2) of the excess of each such payment of rent or other consideration received by Tenant promptly after its receipt. 4. Scope. The prohibition against assigning or subletting contained in this section shall be construed to include a prohibition against any assignment or subletting by operation of law. If this Lease be assigned, or if the underlying beneficial interest of Tenant is transferred, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than the Tenant, Landlord may collect rent from assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of the immediately preceding paragraph, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant, or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. No assignment or subletting shall affect the continuing primary liability of Tenant (which, 16 following assignment, shall be joint and several with the assignee), and Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease. 5. Waiver. Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time granted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant without having taken action against or joined such assignee or sublessee, except that Tenant shall have the benefit of any indulgences, waivers, and extensions of time granted to any such assignee or sublessee. 6. Release. Whenever Landlord conveys its interest in the Lot, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and all further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of, or connected with this Lease after the effective date of said release. The effeective date of said release shall be the date the assignee executes an assumption of such an assignment whereby the assignee expressly agrees to assume all of Landlord's obligations, duties, responsibilities, and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be required to further effect the provisions of this Section. N. OFFSET STATEMENT, ATTORNMENT, AND SUBORDINATION. 1. Offset Statement. Within ten (10) days after request therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord of its interest in the Demised Premises, or any part thereof, an offset statement shall be required from Tenant, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser, or to Landlord, certifying (if such be the case) that this Lease is in full force and effect; the date of Tenant's most recent payment of Rent, and that there are no defenses or offsets outstanding, or stating those claimed by Tenant. Tenant's failure to deliver said statement in time shall be conclusive upon Tenant that: (i) this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord's performance and Tenant has no right of offset, counterclaim or deduction against rent hereunder, and (iii) no more than one period's Fixed Rent has been paid in advance. 17 2. Attornment. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage or deed of trust made by the Landlord, its successors or assigns, encumbering the Demised Premises, or any part thereof, or in the event of termination of the Ground Lease, in any, and if so requested, attorn to the purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of foreclosure and recognize such purchaser as the Landlord under this Lease. 3. Subordination. The rights of Tenant hereunder are and shall be, at the election of any mortgagee, subject and suordinate to the lien of any mortgage or mortgages, or the lien resulting from any other method of financing or refinancing, now or hereafter in force against the Lot and/or Building of which the Demised Premises are a part, and to all advances made or hereafter to be made upon the security thereof, provided, however, that notwithstanding such subordination, so long as the Tenant herein is not in default under any of the terms, convenants and conditions of this Lease, neither this Lease nor any of the rights of Tenant hereunder upon Tenant's covenanting that Tenant is not in default hereunder, shall be terminated or subject to termination by any trustee's sale, any action to enforce the security, or by any proceeding or action in foreclosure. If requested, Tenant agrees to execute whatever documentation may be required to further effect the provisions of this section. 0. NOTICES. All notices required to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by personal delivery, to the address indicated in Section A-l or at such other place or places as either Landlord or Tenant may, from time to time, respectively designate in a written notice to the other. Notices shall be deemed sufficiently served four (4) days after the date of mailing thereof. P. MISCELLANEOUS. 1. Waiver. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or iS repeated, and no express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by 18 either party to or of any act by either party requiring further consent or approval shall not be deemed to waive or render unnecessary their consent or approval to or of any subsequent similar acts. 2. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any other remedy provided in this Lease. 3. Limitations of Landlord's Liability. The obligations of the Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers, or shareholders of Landlord, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets of the Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction. 4. Entire Agreement. This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Demised Premises, Building and Lot, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. 5. Time. Time is of the essence hereof. 6. Short Form Lease. Concurrently herewith the parties may, at the option of either party, execute a short form of Lease for recording. This Lease and any such short form of Lease shall be construed together as one instrument. Neither Landlord or Tenant shall record this Lease nor permit the same to be recorded without the written consent of the other, but shall have the right to record any such short form. 19 . 7. Attorney's Fees. In any action or proceeding which the Landlord or the Tenant may be required to prosecute to enforce its respective rights hereunder, the unsuccessful party therein agrees to pay all costs incurred by the prevailing party therein, including reasonable attorney's fees, to be fixed by the court, and said costs and attorney's fees shall be made a part of the judgment in said action. In any situation in which a dispute is settled other than by action or proceeding, Tenant shall pay all Landlord's costs and attorney's fees relating thereto. 8. Captions and Section Numbers. The captions, section numbers, article numbers and index appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such sections or articles of this Lease nor in any way affect this Lease. 9. Severability. If any term, covenant, condition or provision of this Lease or the application thereof to any person or circumstance shall to any extent be held by a court of competent jurisdiction to be invalid, unenforceable, or void, the remainder of the terms, covenants, conditions, or provisions of this Lease, or the application thereof to any person or circumstance shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 10. Applicable Law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in accordance with the laws of the state in which the Demised Premises are located. 11. Examination of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to Lease, and it is not effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant. Q. SUCCESSORS BOUND. This Lease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and legal representatives and their respective assigns, subject to the provisions hereof. Whenever in this Lease a reference is made to the Landlord, such reference shall be deemed to refer to the person in whom the interest of the Landlord shall be vested, and Landlord shall have no obligation hereunder as to any claim arising after the transfer ot its interest 20 in this Demised Premises. Any successor or assignee of the Tenant who accepts an assignment or the benefit of this Lease and enters into possession or enjoyment hereunder shall thereby assume and agree to perform and be bound by the covenants and conditions thereof. Nothing herein contained shall be deemed in any manner to give a right of assignment to Tenant without the written consent of Landlord. IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written. "LANDLORD" PALOMAR 910 ASSOCIATES, LTD. By: ELI PERLMAN, Managing Partner Attest: "TENANT" CITY OF CARLSBAD Attest: By: CLAUDE A. LEWIS, Mayor 21 STATE OF CALIFORNIA 5s. COUNTY OF SAN DIEGO > On before me, the undersigned, a Notary Public in and for said 'County and State, personally appeared add known to me to be the of the corporation that executed the within instrument, known to'me to be the persons who executed the within instrument on behalf of the corporation therein named, and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. NOTARY PUBLIC STATE OF ss. COUNTY OF > On before me, the undersigned, a Notary Public in and for said' County and State, personally appeared ani known to me to be the of known to' the corporation that executed the within instrument, me to be the persons who executed the within instrument on behalf of the corporation therein named and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. NOTARY PUBLIC 22 ADDENDUM TO THE STANDARD FORM MULTIPLE OCCUPANCY LEASE BY AND BETWEEN PALOMAR 910 ASSOCIATES, LTD. (LANDLORD) AND THE CITY OF CARLSBAD (TENANT) DATED AS OF The promises, covenants, agreements and declarations made and set forth herein are intended to and shall have the same force and effect as if set at length in the body of the lease to which this Addendum is attached (the "Lease"). To the extent that the provisions of this Addendum are inconsistent with the terms and conditions of the Lease, the terms hereof shall control: 1. Section E-2. Section E-2 is hereby retitled to read: "Tenant's Property" and the language of said Section is hereby revised to read as follows: "Tenant shall assume the risk of damage to any fixtures, goods, inventory, merchandise, equipment, furniture, and leasehold improvements which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises, and Tenant shall maintain reasonable insurance coverage with respect to such items during the Term of this Lease'. 2. Section F-2. With reference to Section F-2, the following language is hereby added thereto: 'Tenant expressly understands that there shall be no affirmative responsibility with respect to either party in connection with repairs to the walls of the Demised Premises relating to maturity or weathering of construction materials as contrasted to damage to the structural integrity of the building walls. 3. Section L-l. The Semicolon following Subsection L-l(b) is hereby changed to a period and the following sentence is hereby added at the end of said Subsection: 'Should there be a consecutive failure to pay such installments for two (2) months in a row, then Rent shall become due and payable quarterly in advance on the first day of each calendar quarter during the following one (1) year period of the Term of the Lease, after which year Rent shall again be payable monthly and this Section shall again be in effect'. 4. Section P-12. A new Section P-12 is added entitled 'Financial Statements' and contains the following language: 'At any time during the Term of the Lease, Tenant shall, upon thirty (30) days' prior written notice from Landlord in connection with any financing of the Demised Premises, provide Landlord with a current financial statement and financial statements for each of the two (2) years prior to the current 23 financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and shall be audited by independent certified public accountants if such is the normal practice of Tenant'. 5. Section P-14. A new Section P-14 entitled "Surrender of Premises: Holding Over" is added hereto and contains the following language: "On expiration of ten (10) days after termination of the Term, Tenant shall surrender to Landlord the Demised Premises and all Tenant's improvements and alterations in good condition (except for ordinary wear and tear occurring after the last necessary maintenance made by Tenant and except for destruction of the Demised Premises covered by Article J) except for alterations that Tenant has the right to remove or is obligated to remove after the provisions of Article G. Tenant shall remove all its personal property within the above-stated time period. Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant's personal property within the time period stated in this Section. Landlord can elect to retain or dispose of in any manner any alterations or Tenant's personal property that Tenant does not remove from the Demised Premises on expiration or termination of the Term as allowed or required by this Lease by giving at least ten (10) days notice to Tenant. Title to any such alterations or Tenant's personal property that Landlord elects to retain or dispose of on expiration of the ten (10) day period shall vest in Landlord. Tenant waives all claims against Landlord for any damage to Tenant resulting from Landlord's retention or disposition of any such alterations or Tenant's personal property. Tenant shall be liable to Landlord for Landlord's costs for storing, removing, and disposing of any alterations or Tenant's personal property. If Tenant fails to surrender the Demised Premises to Landlord on expiration or ten (10) days after termination of the Term as required by this Section, Tenant shall hold Landlord harmless from all damages resulting from Tenant's failure to surrender the Demised Premises including without limitation claims made by a succeeding 24 Tenant resulting from Tenant's failure to surrender the Demised Premises. IN WITNESS WHEREOF, the parties have executed this Addendum as of the day and year first above written. Date PALOMAR 910 ASSOCIATES, LTD. By: ELI PERLMAN Its: Managing Partner "LANDLORD" CITY OF CARLSBAD Date By: CLAUDE A. LEWIS Its: Mayor "TENANT" 25 Appendix A .-A .--- ..-._ _- -.-.- -..- I\ ; \ ;, .’ rl I P I ,- z : i 0 I’ 4 35 .* \ 19 ,s * r \” \t : * ‘*, $$ \\: \ % 125 . 1O.l Au.8 . 7 ‘rcr.. ; s2’z.s .J+$f ? . . . I I / s:::,, ’ /so .i. ,;,. .: Palomar Airport Business Park 6231 YARROW DRIVE, SUITE C. CARLSEAD. CALIF. 92008 TELEPHONE (714) 438.2552 \ ITE IT - DON’T SAY -! To File From Karen Date 8/9 0 Reply Wanted ONo Reply Necessary 19 89 Re: LEASE OF STORAGE SPACE Two original leases for storage space at Palomar Airport Business Park, approved by the City Council on 8/8/89 were given to Ruth Fletcher this date for transmittal to Palomar 910 Assoc. for signature. They will return them for City to sign. K. AIGNER FORM NO. 55432 PRlNTED IN USA a, ‘. ‘... REALTOR 1660 HOTEL CIRCLE NORTH, SUITE 216 SAN DIEGO, CALIFORNIA 92108 PHONE (619) 299-5180 August 10, 1989 City of Carlsbad 1200 Elm Street Carlsbad, CA 92008 Re: Lease at 6351 Yarrow Drive, Suite C, Carlsbad, CA Attn: Mrs. Ruth Fletcher Purchasing Agent Dear Mrs. Fletcher: Per your instructions I am enclosing herewith two originals of the referenced lease, both properly signed and notorized by myself as Managing Partner of the leasing entity. I have tagged both copies to show where City of Carlsbad approvals are required. Thanks for your cooperation in finalizing this transaction. As usual, it has been a pleasure working with you and your staff. Sincerely, Eli Perlman, CCIM EP:pe Investment CounselinglExchangeslSalesILeases Palomar 910 Associates, Ltd. 7777 FAY AVENUE, SUITE K-137 LA JOLLA, CALIFORNIA 92037 PHONE: (619) 454-8841 FAX: (619) 454-8842 September 26, 1991 City of Carlsbad 1200 Carlsbad Village Drive Carlsbad, CA 92008-1980 Re: Lease @ 6351 Yarrow Dr, Ste C, Carlsbad, dtd May 2, 1989 Attn: Mrs. Ruth Fletcher Purchasing Agent Dear Mrs. Fletcher: I hereby offer you a new proposal for a three year extension to our current lease, which is referenced above. This proposal is more favorable to the City of Carlsbad than either of my recent proposals dated August 27 and September 23, 1991. Our current lease has a termination date of September 30, 1992. It provides for a rental rate of 93,190 per month. It also provides for a $225 increase to a new rental rate of 83,415 per month beginning October 1, 1991 and continuing at that rate until the September 30, 1992 termination date. The lease contains a clause giving the City of Carlsbad (City) the right to terminate the lease by giving Palomar 910 Associates (Palomar) one hundred and eighty (180) days prior written notice (See Page 4, Para. 13, TERM of the lease). Palomar holds a security depcsit of 93,290 which is scheduled to be increased to $3,4lfi on Octaher- ?., 19?1. The Leased area is approximately 5,760 sy. ft. Palc~mar he:-eby pr-opcsez ths IP~C;V per-z c-,’ be a::t*znrfec! thrddti :iz:tir-s to a new termination date of SEpkambsr N, 1995, ::r-!der i..irG +Ol 1 OWi r4CJ tt-?I’-IirS ilt?d CClltil ki 03!3:;: 8. P~~~cxGI~ hai 11 , ?t its ~a2c expi~rrs;e and j rr c3 ;:.tr-ompt 2~6 urderl y manner T have ci-ie $01 ~01~1~ ng i mprovemcnts madzz ci’;l tilti 1 racx?d 1 ocakio17: 1. One res9t room I ta be located against the west tsal. 1. 2. A concrete platform approxim&t:z:y 10’ x 30’ ?;’ 2’ high to be l@zated alOng the k~es~k~‘-n ~a1 1 of your d:Jcfti ng area. It wi 11 i.nclude a ramp so that you tui 11 Se aule to drive a pick-up cr similar- vehicla ta tIie loading dock and have the dock and truck dcc:k buk!~ be at approx i mate1 y the sa;ne 1 eve1 . A. Palomar 910 Associates, Ltd. 7777 FAY AVENUE, SUITE K-137 LA JOLLA, CALIFORNIA 92037 PHONE: (619) 454-8841 FAX: (619) 454-8842 Pg. 2 Lea5e 6351 Yarrow, Ste September 26, 1991 b. The rental rate increase to 83,415 per month now scheduled to begin October 1, 1991 and to remain in effect until September 30, 1992 is to be cancelled. The rental rate .for that period shall be reduced by 8365 to a new rate of only $3,050 per month. Any increases for that period which the City may have paid prior to approval of this proposed change, will be promptly refunded. c. The rental rate for the proposed three year extension shall be $3,050 per month. The net result of this paragraph and the one above is that the base rent beginning October 31, 1991 through the remainder of this lease shall be as follows: act. 1, 1991 through Sept. 30, 1995 - 83,050/month d.. On October 1, 1991 the security deposit shall be reduced to 83,050. e. Paragraph B. TERM, shall be deleted in its entirety and the following substituted in its place: The term of this lease is for a period of six (61 years, commencing October 1, 1989 and ending September 30, 1995, provided however LESSOR &ND LESSEE SHALL EACH have the right to terminate said Lease anytime after completion of the FIRST THIRTY 130) MONTHS of 3_:1ls lease by first giving one hundred and eil;hty i180) clays prior written notice to the other party on or a4 ter Marr.h 50, 1992. f. All other terms and conditions of the Lease are ta remail-f unchanqed. EP i Per 1 mdn Managing Partner “LANDLQRD” EP: pe December 13, 1991 Palomar 910 Associates, Ltd. c/o Eli Perlman Realty 7777 Fay Ave., Suite K-137 La Jolla, CA 92037 Re: Extension of Lease Agreement for Warehouse Space The Carlsbad City Council, at its meeting of December 3, 1991, adopted Resolution No. 91-385, approving the extension of the existing lease agreement with Palomar 910 Associates, Ltd. for Suite C, located at 6351 Yarrow Drive, Carlsbad, CA. Enclosed for your records is a copy of the fully executed Lease as well as a copy of Resolution No. 91-385. &Lb Assistant City Clerk Encs. 1200 Carlsbad Village Drive - Carlsbad, California 92008-I 989 - (619) 434-2808 @ EXHIBIT A STANDARD FORM MULTIPLE OCCUPANCY LEASE LEASE Lessor: PALOMAR 910 ASSOCIATES, LTD. Lessee: CITY OF CARLSBAD Dated as of: May 2, 1989 A. DEFINED TERMS, EXHIBITS, TABLE OF CONTENTS, PREMISES, COMMON AREAS 1. Defined Terms. Each reference in this Lease to any of the following titles shall incorporate the data stated for that title. Other terms are as defined in the Lease. Landlord: PALOMAR 910 ASSOCIATES, LTD. Tenant: CITY OF CARLSBAD Building Location: Street Address: 6351 Yarrow Drive, Suite C City: Carlsbad County: San Diego State: California Tenant's Floor Space: Approximately 5,760 square feet Total Rentable Floor Space: 42,480 square feet Term: Three years Fixed Rent: Oct. 1, 1989 - Sept. 30, 1990: $2,950.00 per month Oct. 1, 1990 - Sept. 30, 1991: $3,190.00 per month Oct. 1, 1991 - Sept. 30, 1992: $3,415.00 per month Tenant's Share of Operating Expenses: 0% Tenant's Share of Impositions: 0% Scheduled Term Commencement Date: October 1, 1989 Liability Insurance Amounts: Bodily Injury per person: $500,000.00 Bodily Injury per occurrence: $1,000,000.00 LESSOR APPROVAL: LESSEE APPROVA 1 Property Damage: $500,000.00 Boiler Insurance: $500,000.00 Landlord's Address: 1660 Hotel Circle North, Suite 216 San Diego, CA 92108 Tenant's Address: 1200 Elm Street Carlsbad, CA 92008 Permitted Uses: Any lawful uses consistent with the Declaration of Covenants and Restrictions Declaration of Covenants and Restrictions: Copy delivered to tenant. Recorded: October 1, 1974. Amended February 25, 1977 and May 23, 1977 2. Table of Contents A. B. c. D. E. F. Defined Terms, Exhibits, Table of Contents, Premises, Common Areas Term................*... Rent...... . . . . . . . . . . . . . . Impositions . . . . . . . . . . . . . . . . Insurance . . . . . . . . . . . . . . . . , Repairs, Maintenance, Alterations, . . . . . Operating Expenses G. Tenant's Fixtures and Personal Property . . H. Utilities and Boundaries . . . . . . . . . . I. Use of Premises . . . . . . . . . . . . . . J. Damage or Destruction . . . , . . . . . . . K. Eminent Domain . . . . . . . . . . . , . . . L. Default . . . . . . . . . . . . . . . . . . M. Assignment and Subletting . . . . . . . . . N. Offset Statement, Attornment and 2 Page 1 7 8 8 9 11 12 15 Subordination . , . . . . . . . . . . . . . 17 0. Notices . . . . . . , . . . . . , . . . . . 18 P. Miscellaneous . . . . . . . . . . . . . . . 18 Q. Successor Bound . . . , . . . . . . . . . . 20 The following Exhibits are attached to this Lease after the signatures and are incorporated herein by reference thereto. Description: Exhibit A - Tenant's Floor Plan 3. Premises. Landlord hereby leases to Tenant, subject to and with the benefit of the provisions of this Lease, Tenant's Floor Space "Demised Premises") in the Building extending from the top surface of subfloor to the bottom surface of ceilings above but excluding the common stairways, stairwells, hallways, accessways, and pipes, ducts, conduits, wires, and appurtenant fixtures serving exclusively or in common other parts of the Building, and if Tenant's Floor Space includes less than the entire rentable area of any floor, excluding also the remainder of the Floor Common Area. 4. Common Areas. Tenant shall have, as appurtenant to the Demised Premises, rights to use in common, subject to reasonable rules from time to time made by Landlord of which Tenant is given notice: (a> Building Common Areas. The common stairways and accessways, loading docks and platforms and any passageways thereto, and the common pipes, ducts, conduits, wires, and appurtenant equipment serving the Demised Premises. 0) Floor Common Area. If the Demised Premises include less than the entire rentable area of any floor, the common lobbies, hallways, toilets and other common facilities; and cc> Land Common Area. Common walkways, sidewalks and driveways necessary for access to the Building and parking spaces or area from time to time maintained on the real property upon which the Building is located ("Lot") and to the extent from time to time arranged by the Landlord, on adjacent real property. 5. Landlord's Reserved Rights in Common Areas. Landlord reserves the right from time to time, without 3 unreasonable interference with Tenant's use: (a) Building Changes: To install, use, maintain, repair and replace pipes, ducts, conduits, wires and appurtenant meters and equipment for service to other parts of the Building above the ceiling surfaces, below the floor surfaces, within the walls and in the central core areas, and to relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment included in the Demised Premises which are so located elsewhere outside the Demised Premises; ib) B oundary Changes: To change the lines of the Lot; w Facility Changes: To alter or relocate any other common facility; provided, however, that substitutions are substantially equivalent or better in quality. B. TERM. The term of this Lease is for a period of three (3) years, commencing October 1, 1989 and ending September 30, 1992, provided, however, Lessee shall have the right to terminate said Lease anytime after completion of one (1) year of this Lease by first giving one hundred and eighty (180) days prior written notice to the Lessor on or after September 30, 1990. c. RENT. 1. Fixed Rent. Tenant shall pay the Fixed Rent to Landlord in advance upon the first day of each month of the Term, at Landlord's address or at such other place designated by Landlord in a notice to Tenant, without any prior demand therefor and without any deduction or setoff whatsoever. If the Term shall commence and end on a day other than the first day of a month, then Tenant shall pay, upon the commencement date of the Term or first day of the last month, a prorata portion of the Fixed Rent described in the foregoing paragraph, prorated on a per diem basis, with respect to the portions of the fractional month included in the Term. 2. Deposit. Upon execution of this lease, the existing $2,950.00 deposit under the preceding 1986 - 1989 lease will not be used as payment for September 1989 rent, but shall be assigned over to this lease for payment against the last month's rent of this lease. On October 1, 1990 and on October 1, 1991, this deposit shall be increased to $3,190.00 and to $3,415.00 respectively. LESSOR: LESSEE: 4 3. Interest. If any installment of Rent is not paid promptly when due, it shall bear interest at the lower rate of either ten percent (10%) or the maximum rate permitted by law, from the date on which it is due until the date on which it is paid, regardless of whether or not a notice of default or notice of termination has been given by Landlord. This provision shall not relieve Tenant from payment of Rent at the time and in the manner herein specified. D. IMPOSITIONS. 1. Limitation. Nothing contained in this Lease shall require Tenant to pay any franchise, corporate, estate, inheritance, succession, or transfer tax of Landlord, or any income, profits, or revenue tax or charge, upon the net income of Landlord; provided, however, that if at any time during the Term under the laws of the United States Government or the state in which the Demised Premises are located, or any political subdivision thereof, a tax or excise on rent, or any other tax, however described, is levied or assessed by any such political body against Landlord on account of rentals payable to Landlord, Tenant shall pay one hundred percent (100%) of any such tax or excise on rent as Additional Rent. 2. Personal Property Taxes. Tenant shall pay or cause to be paid, prior to delinquency, any and all taxes and assessments levied upon all trade fixtures, inventories and other personal property placed in and upon the Demised Premises by Tenant. E. INSURANCE. 1. Fire and Extended Coverage. During the Term Landlord shall procure and maintain in full force and effect with respect to the Building a policy or policies of fire insurance with extended coverage endorsement attached, including vandalism and malicious mischief coverage, and any other endorsements required by the holder of any fee or leasehold mortgage in an amount equal to one hundred percent (100%) of the full insurance replacement value (replacement cost new, including debris removal, and demolition) thereof. 2. Tenant's Fixtures. Tenant shall assume the risk of damage to any fixtures which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises. 5 3. Indemnification of Landlord. Tenant shall indemnify and hold Landlord and the Demised Premises harmless from and against (i) any and all liability, penalties, losses, damages, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of any injury to any person or persons or any damage to any property as a result of any accident or other occurrence during the term of this Lease occasioned by any act or omission of the Tenant, its officers, employees, agents, servants, subtenants, concessionaires, licensees, contractors, invitees or permittees, or arising from or growing out of the use, maintenance, occupation, or operation of the Demised Premises during the term of this Lease, and (ii) from and against all legal costs and charges, including reasonable attorney's fees, incurred in and about any of such matters and the defense of any action arising out of the same or in discharging the Demised Premises or any part thereof from any and all action arising out of the same or in discharging the Demised Premises or any part thereof from any and all liens, charges or judgments which may accrue or be placed thereon by reason of any act or omission of the Tenant; provided, however, that Tenant shall not be required to indemnify Landlord for any damage or injury of any kind arising as the result of Landlord's negligent acts or those of its agents or employees. F. REPAIRS, MAINTENANCE, ALTERATIONS, OPERATING EXPENSES. 1. Operating Expense. Landlord shall be responsible for operation, cleaning, maintenance, repair and management of the building and lot, walks, driveways, parking and loading areas, lawns and landscaping. 2. Tenant Repairs and Maintenance. Tenant shall, at Tenant's sole cost and expense, keep and maintain the Demised Premises, subfloors and floor coverings in good repair and in a clean and safe condition, casualties covered by insurance coverage excepted to the extent of proceeds received. Tenant shall, at Tenant's own expense, immediately replace all glass in the Demised Premises that may be broken during the Term with glass at least equal to the specifications and quality of the glass so replaced. 3. Landlord Repairs and Maintenance. Landlord shall, at its expense, after written notice from Tenant, repair in a prompt and diligent manner any damage to structural portions of the roof and bearing walls of the Demised Premises; provided, however, that if such damage is caused by an act or omission of Tenant, then such repairs shall be at Tenant's expense, payable to Landlord as Additional Rent hereunder. There shall be no abatement of Rent during the performance of such work. 6 Landlord shall not be liable to Tenant for injury or damage during the performance of such work. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or conditions of the Demised Premises. Tenant waives any right to make repairs at the expense of Landlord under any law, statute, or ordinance now or hereafter in effect. 4. Inspection of Leased Premises. Landlord, at reasonable times, upon reasonable notice, may go upon and into the Demised Premises for the purpose of inspecting the same, or for the purpose of inspecting the performance by Tenant of the terms and conditions hereof, and for the purpose of affixing reasonable signs and displays and showing the Demised Premises to prospective purchasers, tenants and lenders. 5. Workmanlike Quality. All repairs, alterations, additions and restoration by Landlord or Tenant hereinafter required or permitted shall be done in a good and workmanlike manner and in compliance with all applicable laws and lawful ordinances, by-laws, regulations and orders of governmental authority and of the insurers of the Building. 6. Liens. Tenant shall promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at request of Tenant and shall keep the Demised Premises free and clear of all mechanic's and materialmen's liens in connection therewith. Landlord shall have the right to post or keep posted on the Demised Premises, or in the immediate vicinity thereof, any notices of non- responsibilty for construction, alteration or repairs of the Demised Premises by Tenant. If any such lien is filed, Landlord may, but shall not be required to, take such action or pay such amount as may be necessary to remove such lien; and Tenant shall pay to Landlord as Additional Rent at such amounts expended by Landlord together with interest thereon at the highest legal rate from the date of expenditure. G. TENANT'S FIXTURES AND PERSONAL PROPERTY. Tenant, at its expense, may install any necessary trade fixtures, equipment and furniture in the Demised Premises, provided that such items are installed and are removable without damage to the structure of the Building. Landlord reserves the right to approve or disapprove of curtains, draperies, shades, paint, or other interior improvements visible from outside the Demised Premises on wholly aesthetic grounds. Such improvements must be submitted for Landlord's written approval prior to installation, or Landlord may remove or replace such items at Tenant's sole expense. Said trade fixtures, equipment and furniture shall remain Tenant's property and 7 shall be removed by Tenant upon expiration of the Term, or earlier termination of this Lease. Upon Landlord's prior written approval, Tenant may make structural alterations and may also install temporary improvements in the interior of the Demised Premises, provided that such temporary improvements are installed and are removable without damage to the structure of the Building. Such temporary improvements shall remain the property of Tenant and shall be removed by Tenant upon expiration of the Term or earlier termination of this Lease. Tenant shall repair, at its sole expense, all damage caused by the installation or removal of trade fixtures, equipment, furniture, or temporary improvements. If Tenant fails to remove the foregoing items on termination of this Lease, Landlord may keep and use them or remove any or all of them and cause them to be stored and sold in accordance with applicable law. H. UTILITIES AND BOUNDARIES 1. Utilities. Tenant shall be solely responsible for and promptly pay all charges for heat, water, gas t electricity, and any other utilities used or consumed on the Demised Premises. Landlord shall not be liable to Tenant for interruption or curtailment of any utility service, nor shall any such interruption or curtailment constitute a constructive eviction or grounds for rental abatement in whole or in part hereunder. If any such utilities are not separately metered, Tenant shall pay a prorata share, based on use, as determined by Landlord. 2. Easements. Landlord reserves the right to (i) alter the boundaries of the Lot and (ii) grant easements on the Lot and dedicate for public use portions thereof without Tenant's consent, subject to provisions of Section N-2 hereof, and provided that no such grant or dedication shall interfere with Tenant's use of the Demised Premises or otherwise cause Tenant to incur cost or expense. From time to time, and upon Landlord's demand, Tenant shall execute, acknowledge and deliver to Landlord or in accordance with Landlord's instructions any and all documents, instruments, maps, or plats necessary to effectuate Tenant's covenants hereunder. I. USE OF PREMISES. 1. General. The Demised Premises shall be used for the Permitted Uses, consistent with the Declaration of Covenants and Restrictions and any supplement thereto. Tenant shall, at Tenant's sole cost and expense, comply with all of the requirements of municipal, countyI state, federal and other applicable governmental authorities, now in force, or which may hereafter be in force, pertaining to the Demised 8 Premises, Building and Lot, and secure any necessary permits therefor and shall faithfully observe, in the use of the Demised Premises, Building and Lot, all municipal and county ordinances and state and federal statutes now in force, or which may hereafter be in force. Tenant shall obtain any required certificate of occupancy with respect to its use of the Demised Premises, Building and Lot within thirty (30) days from the commencement of the Term hereof and shall deliver a copy thereof to Landlord within said thirty (30) day period. Tenant in its use and occupancy of the Demised Premises shall not commit waste, nor overload the floors or structure, nor subject the Demised Premises to any use which would tend to damage any portion thereof. 2. Signs. Any sign placed or erected by Tenant on the Demised Premises, Building or Lot, except in the interior of the Demised Premises, shall contain only the Tenant's name, or the name of any affiliate of Tenant actually occupying the Demised Premises, and no advertising matter. No such sign shall be erected until Tenant has obtained Landlord's written approval of the location, material, size, design and content thereof and any necessary permit therefor. Tenant shall remove any such sign upon termination of this Lease, and shall return the Demised Premises to their condition prior to the placement or erection of said sign. 3. Parking Access. In addition to the general obligation of the Tenant to comply with laws and without limitiation thereof, Landlord shall not be liable to Tenant, nor shall this Lease be affected if any parking privileges appurtenant to the Demised Premises, Building or Lot are impaired by reason of any moratorium, initiative, referendum, statute, regulation or other governmental decree or action which could in any manner prevent or limit the parking rights of Tenant hereunder. Any governmental changes or surcharges or other monetary obligations imposed relative to parking rights with respect to the Demised Premises, Building and Lot shall be considered as Impositions and shall be payable by Tenant under the provisions of Section D hereinabove. J. DAMAGE OR DESTRUCTION. 1. Reconstruction. If the Demised Premises are damaged or destroyed during the Term, Landlord shall, except as hereinafter provided, diligently repair or rebuild them to substantially the condition in which they existed immediately prior to such damage or destruction; provided that any damage which is estimated in good faith by Landlord to be under Five Thousand Dollars ($5,000.00) shall be repaired by Tenant, and Landlord shall reimburse Tenant upon demand for expenses incurred 9 in such repair work. 2. Rent Abatement. Rent due and payable hereunder shall be abated proportionately during any period which, by reasons of such damage or destruction, Tenant reasonably determines that there is a substantial interference with the operation of Tenant's business in the Demised Premises, having regard to the extent to which Tenant may be required to discontinue its business in the Demised Premises. Such abatement shall continue for the period commencing with such damage or destruction which Landlord is obligated or undertakes to do. If it be determined that continuation of business is not practical pending reconstruction, Fixed Rent due and payable hereunder shall abate to the extent of proceeds from rental abatement insurance until reconstruction is substantially completed or until business is totally or partially resumed, whichever is the earlier. 3. Excessive Damage or Destruction. If the building is damaged or destroyed to the extent that Landlord determines that it cannot, with reasonable diligence, be fully repaired or restored by Landlord within one hundred and eighty (180) days after the date of the damage or destruction, the sole right of both Landlord and Tenant shall be the option to terminate this Lease. Notwithstanding the fact that the Demised Premises have not been damaged or destroyed, Landlord shall determine whether the building can be fully repaired or restored within the one hundred and eighty (180) day period, and Landlord's determination shall be conclusive on Tenant. Landlord shall notify Tenant of its determination, in writing, within thirty (30) days after the date of the damage or destruction. If Landlord determines that the Building can be fully repaired or restored within the one hundred and eighty (180) day period, or if it is determined that such repair or restoration cannot be made within said period but neither party elects to terminate within thirty (30) days from the date of said termination, this Lease shall remain in full force and effect and Landlord shall diligently repair and restore the damage as soon as reasonably possible. 4. Uninsured Casualty. Notwithstanding anything contained herein to the contrary, in the event of damage to or destruction of all or any portion of the Building which is not fully covered by the insurance proceeds received by Landlord under the insurance policies required under Section E-l above, Landlord may terminate this Lease by written notice to Tenant, giving thirty (30) days after the date of notice to Landlord that said damage or destruction is not so covered. If Landlord does not elect to termiante this Lease, the Lease shall remain in full force and effect and the Building shall be repaired and rebuilt in accordance with the provisions for repair set forth 10 in Section J-l hereinabove. 5. Waiver. With respect to any destruction which Landlord is obligated to repair or may elect to repair under the terms of this Section J, Tenant hereby waives all right to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law to tenants, except as expressly otherwise provided herein. K. EMINENT DOMAIN. 1. Total Condemnation of Demised Premises. If the whole of the Demised Premises is acquired or condemned by eminent domain, inversely condemned or sold in lieu of condemnation, for any public or quasi-public use or purpose ("Condemned"), then the Term shall terminate as of the date of title vesting in such proceeding, and Rent shall be adjusted to the date of termination. Tenant shall immediately notify Landlord of any such occurrence. 2. Partial Condemnation. If any part of the Demised Premises is partially Condemned, and such partial condemnation renders the Demised Premises unusable for the business of the Tenant, then the Term of this Lease shall terminate as of the date of title vesting in such proceeding and Rent shall be adjusted to the date of termination. If such condemnation is not extensive enough to render the Demised Premises unusable for the business of Tenant, then Landlord shall promptly restore the Demised Premises to a condition comparable to its condition immediately prior to such condemnation to the extent of any condemnation proceeds recovered by Landlord, less the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting the Fixed Rent shall be reduced as reasonably determined by Landlord. If any parking areas are condemned, Landlord has the option but not the obligation to supply Tenant with other parking areas. 3. Landlord's Award. If the Demised Premises are wholly or partially condemned, then subject to the provisions of Section K-4, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any right or claim to any part thereof from Landlord or the condemning authority. 4. Tenant's Award. Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant's own right 11 on account of any and all costs or loss (including loss of business) to which Tenant might be put in removing Tenant's merchandise, furniture, fixtures, leasehold improvements and equipment to a new location. 5. Temporary Condemnation. If the whole or any part of the Demised Premises shall be condemned for any temporary public or quasi-public use or purpose, this Lease shall remain in effect and Tenant shall be entitled to receive for itself such portion or portions of any award made for such use with respect to the period of the taking which is within the Term. If a temporary condemnation remains in force at the expiration or earlier termination of this Lease, Tenant shall pay to Landlord a sum equal to the reasonable cost of performing any obligations required of Tenant by this Lease with respect to the surrender of the Demised Premises, including without limitation repairs and maintenance required, and upon such payment Tenant shall be excused from any such obligations. If a temporary condemnation is for an established period which extends beyond the Term, the Lease shall terminate as of the date of occupancy by the condemning authority, and the damages shall be as provided in Sections K-3 and K-4 and Rent shall be adjusted to the date of occupancy. 6. Notice and Execution. Landlord shall, immediately upon service of process in connection with any condemnation or potential condemnation, give Tenant notice in writing thereof. Tenant shall immediately execute and deliver to the Landlord all instruments that may be required to effectuate the provisions of this paragraph. L. DEFAULT. 1. Events of Defaults. The occurrence of any of the following events shall constitute an "Event of Default" on the part of Tenant with or without notice from Landlord: see Addendum. a. Vacation or Abandonment, Vacation or abandonment of the Demised Premises; b. Payment. Failure to pay an installment of Rent or other monies due and payable hereunder upon the date when said payment is due, the failure continuing for a period of five (5) days after said payment is due; C. Performance. Default in the performance of any of Tenant's covenants, agreements or obligations hereunder, except default in the payment of Rent or other monies, the default continuing for thirty (30) days after written notice thereof 12 from Landlord; d. Assignment. A general assignment by Tenant for the benefit of creditors; e. Bankruptcy. The filing of a voluntary petition in bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's creditors immediately unless involuntary, in which case when the petition remains undischarged for a period of thfrty (30) days; f. Receiver. The appointment of a receiver to take possession of substantially all of Tenant's assets or of this leasehold, the receivership0 remaining undissolved for a period of thirty (30) days; or g. Attachment. Attachment, execution, or other judicial seizure of substantially all of Tenant's assets or this leasehold, the attachment, execution, or other seizure remaining undismissed or undischarged for a period of thirty (30) days after the levy thereof. 2. Landlord's Remedies. a. Abandonment. If Tenant vacates or abandons the Demised Premises, this Lease shall continue in effect. Landlord shall not be deemed to have terminated this Lease other than by written notice of termination from Landlord, and Landlord shall have all of the remedies of a landlord provided by Section 1951.4 of the Civil Code of the State of California. At any time subsequent to vacation or abandonment of the Demised Premises by Tenant, Landlord may give notice of termination and shall thereafter have all of the rights hereinafter set forth. b. Termination. Following the occurrence of any Event of Default, Landlord shall have the right, so long as the default continues, to terminate this Lease by a written notice to Tenant setting forth: (i) the default, (ii) the requirements to cure it, and (iii) a demand for possession, which shall be effective three (3) days after it fs given or upon expiration of the times specified in Section L-l hereinabove, whichever is later. C. Possession. Following termination under paragraph b, without prejudice to other remedies Landlord may have by reason of Tenant's default or of such termination, Landlord may then or at any time thereafter, (i) peaceably re-enter the Demised Premises, or any part thereof, upon voluntary surrender by Tenant or expel or remove Tenant therefrom and any other persons occupying them, using such legal proceedings as are then available; (ii) again repossess and enjoy the Demised Premises, or relet the Demised Premises or any part thereof for such term or terms (which may be for a term extending beyond the Term) at 13 such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion shall determine, with the right to make reasonable alterations and repairs to the Demised Premises; and (iii) remove all personal property therefrom. d. Recovery. Following termination under paragraph b, Landlord shall have all the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State of California. The amount of damages which Landlord may recover following termination under paragraph b shall include the worth at the time of the award of the amount by which the unpaid Rent for the balance of the term after the time of award exceeds the amount of rental loss Tenant proves could be reasonably avoided. e. Additional remedies. In addition to the foregoing remedies, Landlord shall, so long as this Lease is not terminated, have the right to remedy any default of Tenant, to maintain or improve the Demised Premises without terminating this Lease, to incur expenses on behalf of Tenant in seeking a new subtenant, or to cause a receiver to be appointed to administer the Demised Premises and new or existing subleases, and to add to the Rent payable hereunder all of Landlord's reasonable costs in so doing, with interest at the maximum rate permitted by law from the date of such expenditure until the same is repaid. f. Other. If Tenant causes or threatens to cause a breach of any of the covenants, agreements, terms or conditions contained in this Lease, Landlord shall be entitled to obtain all sums held by Tenant, by any trustee or in any account provided for herein, to enjoin such breach or threatened breach, and to invoke any right and remedy allowed at law or in equity or by statute or otherwise as though re-entry, summary proceedings and other remedies were not provided for in this Lease. g* Cumulative. Each right and remedy of Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. The exercise or beginning of the exercise by Landlord of any one or more of the rights or remedies provided for in this Lease, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. h. No Waiver. No failure by Landlord to insist upon the performance of any term hereof or to exercise any right or 14 remedy consequent upon a breach thereof, and no acceptance of all or partial payment of Rent during the continuance of any such breach, shall consitute a waiver of any such breach or of any such term. Efforts by Landlord to mitigate the damages caused by Tenant's breach of this Lease shall not be construed to be a waiver of Landlord's right to recover damages under this Section L. Nothing in this Section L affects the right of Landlord to indemnification by Tenant in accordance with Section E-3 hereinabove for liability arising prior to the termination of this Lease for personal injuries or property damage. M. ASSIGNMENT AND SUBLETTING. 1. Prohibition. Tenant shall not assign1 mortgage, pledge or otherwise transfer this Lease in whole or in part, nor sublet or permit occupancy by any part other than Tenant of all or any part of the Demised Premises, without the prior written consent of the Landlord in each instance. Any purported assignment or subletting contrary to the provisions hereof without consent shall be void. The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. As Additional Rent hereunder, Tenant shall reimburse Landlord for reasonable legal and other expenses incurred by Landlord in connection with any request by Tenant for consent to assignment or subletting. 2. Landlord Option. Tenant* In connection with any proposed assignment or sublease, shall submit to Landlord in writing (i) the name of the proposed assignee or sublessee, (ii) such information as to its financial responsibility and standing as Landlord may reasonably require, and (iii) all of the terms and conditions upon which the proposed assignment or subletting is to be made. Landlord shall have an option to cancel and terminate this Lease, if the request is to assign the Lease or to sublet all of the Demised Premises; or, if the request is to sublet a portion of the Demised Premises only, to cancel and terminate this Lease with respect to such portion. Landlord may exercise said option in writing within thirty (30) days after its receipt from Tenant of such request, and in each case such cancellation or termination shall occur as of the date set forth in Landlord's notice of exercise of such option, which shall be not less than sixty (60) nor more than one hundred and twenty (120) days following the giving of such notice. b. Cancellation. If Landlord shall exercise its option, Tenant shall surrender possession of the entire Demised Premises, or the portion thereof which is subject of the option, as the case may be, on the date set forth in such notice in accordance with the provisions of this Lease relating to surrender of the Demised 15 Premises at the expiration of the Term. If this Lease is cancelled as to a portion of the Demised Premises only, the Fixed Rent after the date of cancellation shall be abated and shall thereafter be an amount determined by Landlord and the Tenant's Share of Impositions, Tenant's Share of Operating Expenses and Tenant's Share of Insurance Expenses shall be adjusted as reasonably determined by the Landlord. C. Noncancellation. If Landlord does not exercise its option to cancel this Lease pursuant to the foregoing provisions, Landlord may withhold its consent to such assignment or subletting, as long as the withholding is not done unreasonably. d. Assumption. No assignment shall be binding upon Landlord, any ground lessor or any mortgagee unless Tenant shall deliver to Landlord an assignment in recordable form which contains an assumption by the assignee, but the failure or refusal of the assignee to execute such instrument or assumption shall not release or discharge assignee from liability as Tenant hereunder, provided that the terms and provisions of the assignment or subletting shall specifically make applicable to the assignee or sublessee all of the provisions of this Section. 3. Bonus Rental. If for any assignment or sublease, Tenant receives rent or other consideration, either initially or over the term of the assignment or sublease in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Demised Premises, in excess of such Rent fairly allocable to such portion, after appropriate adjustment to assure that all other payments called for hereunder are appropriately taken into account, Tenant shall pay to Landlord, as Additional Rent hereunder, one-half (l/2) of the excess of each such payment of rent or other consideration received by Tenant promptly after its receipt. 4. Scope. The prohibition against assigning or subletting contained in this section shall be construed to include a prohibition against any assignment or subletting by operation of law. If this Lease be assigned, or if the underlying beneficial interest of Tenant is transferred, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than the Tenant, Landlord may collect rent from assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of the immediately preceding paragraph, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant, or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. No assignment or subletting shall affect the continuing primary liability of Tenant (which, 16 following assignment, shall be joint and several with the assignee), and Tenant shall not be released from performing any of the terms, covenants and conditions of this Lease. 5. Waiver. Notwithstanding any assignment or sublease, or any indulgences, waivers or extensions of time granted by Landlord to any assignee or sublessee, or failure by Landlord to take action against any assignee or sublessee, Tenant waives notice of any default of any assignee or sublessee and agrees that Landlord may, at its option, proceed against Tenant without having taken action against or joined such assignee or sublessee, except that Tenant shall have the benefit of any indulgences, waivers, and extensions of time granted to any such assignee or sublessee. 6. Release. Whenever Landlord conveys its interest in the Lot, Landlord shall be automatically released from the further performance of covenants on the part of Landlord herein contained, and from any and all further liability, obligations, costs and expenses, demands, causes of action, claims or judgments arising from or growing out of, or connected with this Lease after the effective date of said release. The effeective date of said release shall be the date the assignee executes an assumption of such an assignment whereby the assignee expressly agrees to assume all of Landlord's obligations, duties, responsibilities, and liabilities with respect to this Lease. If requested, Tenant shall execute a form of release and such other documentation as may be required to further effect the provisions of this Section. N. OFFSET STATEMENT, ATTORNMENT, AND SUBORDINATION. 1. Offset Statement. Within ten (10) days after request therefor by Landlord, or if on any sale, assignment or hypothecation by Landlord of its interest in the Demised Premises, or any part thereof, an offset statement shall be required from Tenant, Tenant shall deliver, in recordable form, a certificate to any proposed mortgagee or purchaser, or to Landlord, certifying (if such be the case) that this Lease is in full force and effect; the date of Tenant's most recent payment of Rent, and that there are no defenses or offsets outstanding, or stating those claimed by Tenant. Tenant's failure to deliver said statement in time shall be conclusive upon Tenant that: (i) this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) there are no uncured defaults in Landlord's performance and Tenant has no right of offset, counterclaim or deduction against rent hereunder, and (iii) no more than one period's Fixed Rent has been paid in advance. 17 2. Attornment. Tenant shall, in the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage or deed of trust made by the Landlord, its successors or assigns, encumbering the Demised Premises, or any part thereof, or in the event of termination of the Ground Lease, in any, and if so requested, attorn to the purchaser upon such foreclosure or sale or upon any grant of a deed in lieu of foreclosure and recognize such purchaser as the Landlord under this Lease. 3. Subordination. The rights of Tenant hereunder are and shall be, at the election of any mortgagee, subject and suordinate to the lien of any mortgage or mortgages, or the lien resulting from any other method of financing or refinancing, now or hereafter in force against the Lot and/or Building of which the Demised Premises are a part, and to all advances made or hereafter to be made upon the security thereof, provided, however, that notwithstanding such subordination, so long as the Tenant herein is not in default under any of the terms, convenants and conditions of this Lease, neither this Lease nor any of the rights of Tenant hereunder upon Tenant's covenanting that Tenant is not in default hereunder, shall be terminated or subject to termination by any trustee's sale, any action to enforce the security, or by any proceeding or action in foreclosure. If requested, Tenant agrees to execute whatever documentation may be required to further effect the provisions of this section. 0. NOTICES. All notices required to be given hereunder shall be in writing and mailed postage prepaid by certified or registered mail, return receipt requested, or by personal delivery, to the address indicated in Section A-l or at such other place or places as either Landlord or Tenant may, from time to time, respectively designate in a written notice to the other. Notices shall be deemed sufficiently served four (4) days after the date of mailing thereof. P. MISCELLANEOUS. 1. Waiver. No waiver of any default or breach of any covenant by either party hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or iS repeated, and no express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant, term or condition contained herein by either party shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by 18 either party to or of any act by either party requiring further consent or approval shall not be deemed to waive or render unnecessary their consent or approval to or of any subsequent similar acts. 2. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any other remedy provided in this Lease. 3. Limitations of Landlord's Liability, The obligations of the Landlord under this Lease do not constitute personal obligations of the individual partners, directors, officers, or shareholders of Landlord, and Tenant shall look solely to the real estate that is the subject of this Lease and to no other assets of the Landlord for satisfaction of any liability in respect of this Lease and will not seek recourse against the individual partners, directors, officers or shareholders of Landlord or any of their personal assets for such satisfaction. 4. Entire Agreement. This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Demised Premises, Building and Lot, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between them other than as are herein set forth. Except as herein otherwise provided, no subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by them. 5. Time. Time is of the essence hereof. 6. Short Form Lease. Concurrently herewith the parties may, at the option of either party, execute a short form of Lease for recording. This Lease and any such short form of Lease shall be construed together as one instrument. Neither Landlord or Tenant shall record this Lease nor permit the same to be recorded without the written consent of the other, but shall have the right to record any such short form. 19 7. Attorney's Fees. In any action or proceeding which the Landlord or the Tenant may be required to prosecute to enforce its respective rights hereunder, the unsuccessful party therein agrees to pay all costs incurred by the prevailing party therein, including reasonable attorney's fees, to be fixed by the court, and said costs and attorney's fees shall be made a part of the judgment in said action. In any situation in which a dispute is settled other than by action or proceeding, Tenant shall pay all Landlord's costs and attorney's fees relating thereto. 8. Captions and Section Numbers. The captions, section numbers, article numbers and index appearing in this Lease are inserted only as a matter of convenience and in no way define, limit, construe, or describe the scope or intent of such sections or articles of this Lease nor in any way affect this Lease. 9. Severability. If any term, covenant, condition or provision of this Lease or the application thereof to any person or circumstance shall to any extent be held by a court of competent jurisdiction to be invalid, unenforceable, or void, the remainder of the terms, covenants, conditions, or provisions of this Lease, or the application thereof to any person or circumstance shall remain in full force and effect and shall in no way be affected, impaired or invalidated. 10. Applicable Law. This Lease, and the rights and obligations of the parties hereto, shall be construed and enforced in accordance with the laws of the state in which the Demised Premises are located. 11. Examination of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option to Lease, and it is not effective as a Lease or otherwise until execution and delivery by both Landlord and Tenant. Q. SUCCESSORS BOUND. This Lease and each of its covenants and conditions shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and legal representatives and their respective assigns, subject to the provisions hereof. Whenever in this Lease a reference is made to the Landlord, such reference shall be deemed to refer to the person in whom the interest of the Landlord shall be vested, and Landlord shall have no obligation hereunder as to any claim arising after the transfer ot its interest 20 in this Demised Premises. Any successor or assignee of the Tenant who accepts an assignment or the benefit of this Lease and enters into possession or enjoyment hereunder shall thereby assume and agree to perform and be bound by the covenants and conditions thereof. Nothing herein contained shall be deemed in any manner to give a right of assignment to Tenant without the written consent of Landlord. IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written. "LANDLORD" PALOMAR 910 ASSOCIATES, LTD. By: d? b- ELI PERLMAN, Managing Partner Attest: SEE btT-rhLtlfb "TENANT" By: Attest: 21 STATE OF CALIFORNIA 89. COUNTY OF SAN DIEGO > known to me to be the of within instrument acknowledged to me instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. ?3iizik&L. NOTARY PUBLIC STATE OF SS. COUNTY OF > On before me, the undersigned, a Notary Public in and for said' County and State, personally appeared an; known to me to be the of known to' the corporation that executed the within instrument, me to be the persons who executed the within instrument on behalf of the corporation therein named and acknowledged to me that such corporation executed the within instrument pursuant to its by-laws or a resolution of its board of directors. WITNESS my hand and official seal. NOTARY PUBLIC 22 ADDENDUM TO THE STANDARD FORM MULTIPLE OCCUPANCY LEASE BY AND BETWEEN PALOMAR 910 ASSOCIATES, LTD. (LANDLORD AND THE CITY OF CARLSBA; (SENANT) DATED AS OF A-r 9. '7 P w The promises, covenants, agreements and declarations made and set forth herein are intended to and shall have the same force and effect as if set at length in the body of the lease to which this Addendum is attached (the "Lease"). To the extent that the provisions of this Addendum are inconsistent with the terms and conditions of the Lease, the terms hereof shall control: 1. Section E-2. Section E-2 is hereby retitled to read: "Tenant's Property" and the language of said Section is hereby revised to read as follows: "Tenant shall assume the risk of damage to any fixtures, goods, inventory, merchandise, equipment, furniture, and leasehold improvements which remain the property of Tenant or as to which Tenant retains the right of removal from the Demised Premises, and Tenant shall maintain reasonable insurance coverage with respect to such items during the Term of this Lease". 2. Section F-2. With reference to Section F-2, the following language is hereby added thereto: "Tenant expressly understands that there shall be no affirmative responsibility with respect to either party in connection with repairs to the walls of the Demised Premises relating to maturity or weathering of construction materials as contrasted to damage to the structural integrity of the building walls. 3. Section L-l. The Semicolon following Subsection L-l(b) is hereby changed to a period and the following sentence is hereby added at the end of said Subsection: "Should there be a consecutive failure to pay such installments for two (2) months in a row, then Rent shall become due and payable quarterly in advance on the first day of each calendar quarter during the following one (1) year period of the Term of the Lease, after which year Rent shall again be payable monthly and this Section shall again be in effect". 4. Section P-12. A new Section P-12 is added entitled "Financial Statements" and contains the following language: nAt any time during the Term of the Lease, Tenant shall, upon thirty (30) days' prior written notice from Landlord in connection with any financing of the Demised Premises, provide Landlord with a current financial statement and financial statements for each of the two (2) years prior to the current 23 financial statement year. Such statements shall be prepared in accordance with generally accepted accounting principles and shall be audited by independent certified public accountants if such is the normal practice of Tenant". 5. Section P-14. A new Section P-14 entitled nSurrender of Premises: Holding Over" is added hereto and contains the following language: "On expiration of ten (10) days after termination of the Term, Tenant shall surrender to Landlord the Demised Premises and all Tenant's improvements and alterations in good condition (except for ordinary wear and tear occurring after the last necessary maintenance made by Tenant and except for destruction of the Demised Premises covered by Article J) except for alterations that Tenant has the right to remove or is obligated to remove after the provisions of Article G. Tenant shall remove all its personal property within the above-stated time period. Tenant shall perform all restoration made necessary by the removal of any alterations or Tenant's personal property within the time period stated in this Section. Landlord can elect to retain or dispose of in any manner any alterations or Tenant's personal property that Tenant does not remove from the Demised Premises on expiration or termination of the Term as allowed or required by this Lease by giving at least ten (10) days notice to Tenant. Title to any such alterations or Tenant's personal property that Landlord elects to retain or dispose of on expiration of the ten (10) day period shall vest in Landlord. Tenant waives all claims against Landlord for any damage to Tenant resulting from Landlord's retention or disposition of any such alterations or Tenant's personal property. Tenant shall be liable to Landlord for Landlord's costs for storing, removing, and disposing of any alterations or Tenant's personal property. If Tenant fails to surrender the Demised Premises to Landlord on expiration or ten (10) days after termination of the Term as required by this Section, Tenant shall hold Landlord harmless from all damages resulting from Tenant's failure to surrender the Demised Premises including without limitation claims made by a succeeding 24 Tenant resulting from Tenant's failure to surrender the Demised Premises. IN WITNESS WHEREOF, the parties have executed this Addendum as of the day and year first above written. t?jrIl$q Date By: Its: By: Its: PALOMAR 910 ASSOCIATES, LTD. - f & j&c+&- \ ELI PERLMAN Managing Partner "LANDLORD" "TENANT" 25 -- Appendix A - .---- --- ..-.- _ - L-1 - .-.-.-. ----.v; VARROW DRIVE -. i 45s ---~. _ __ .._..-.---- -.-_-- _. 6351 YARROW DR1 I’--r~ \, : ‘\ 1 \ ‘I I I I lf- R T-f +*.+;‘iq,2_o’1 In ; !y.?. I /T-b ..+- - ,! ,( ,+, ;3;(! I:;’ & ;1’,$; ;J$ 1.; - : 1 ;F:;j;;.??; 8 F \ \$f .-x ‘\.< 1 ../‘I ‘. .L: L-n:., “, + 1:: - ! r k I _ tz . . I ! If--&a+ --- F - - ! 4 --YE ! I i i \ :; *’ c, I P : , I :, Z i I 0 I:4 8 ‘0 iv \ ‘, $ i,,% ‘; !, %, ‘,s is \ <~ Y 1. ‘i ‘, \ ‘: \ ,., \ i \ U&W,,’ : 1.11 LU.41L1 ---.-------.-_---.-.-.-.- 622 r Palomar Airport Business Park 6231 YARRDW DRIVE. SUITE C, CARLSBAD, CALIF. 92008 TELEPHONE (714) 438-2552 Exhibit 2 _ -.-. . . ..-- -*- PALOMAR 910 ASSOCIATES, LTD. 1859 Caminito Brisa P. 0. Box 1064 La Jolla, CA 92038 Phone: 454-8841 Fax: 454-8842 September 281995 City of Carlsbad Community Services 405 Oak Ave. Carlsbad, CA 92008 Re: Proposed lease extension - Suite D, 6351 Yarrow Drive, Carlsbad, CA 92009 Attn: Mr. Chuck Walden Building Maintenance Supervisor Dear Mr. Walden: Per your request, I am hereby submitting for your approval a proposal to extend your existing lease at the above referenced premises for a three year period, said extension to terminate September 30, 1998. Your current lease is scheduled to terminate September 30, 1995. It provides for a monthly industrial gross rental rate of $3,050.00 per month. I hold a security deposit of $3,050.00. The lease also provides that Lessee and Leasor each have the right to terminate the lease by giving one hundred eighty (180) days prior written notice to the other party. Your leased space is approximately 120’ x 48’ (5,760 sq. ft. in area) and has a 22’ clear span ceiling. You have a 10’ x 20’ double truck door with dock high loading; you also have a concrete ramp which simplifies loading from or to small trucks or vans. You have leased this space from me for 15 years. I hope we can continue this relationship for the foreseeable future. I therefore propose the following modification to your lease: a. The termination date shall be extended until September 30, 1998. - b. The rental rate shall continue unchanged at its present rate of $3,050.00 per month until September 30, 1998, when this proposed extension terminates. c. All other terms and conditions of the lease shall remain unchanged. crYcm4.sA?d 3 i pg2 Proposed lease mod, City of Carlsbad March 1,1995 If this proposed extension is acceptable to you, you may implement it by returning to me a copy properly signed by the City of Carlsbad. This offer is good until October 3 1,1995, at which time it may be changed or revoked without fb.rther notice. Sincerely, PALOMAR 910 ASSOCIATES, LTD., Lessor 2fzz ‘FA Eli Perlman General Manager EP:pe AGREED Date January 10, 1996 CITY OF (#USBAD, Lessor/3 CTYCRLO4SAM J V3ITE IT - DON’T SAY Date March 16 19 98 To File 0 Reply Wanted -. From Sherrie Worrell, Deputy City Clerk ONo Reply Necessary - - As of 3/16/98, this agreement is still in effect per Jim Sartorio in Purchasing. ^s \ -’ , ~... - PALOMAR 910 ASSOCIATES, LTD. 1859 Caminito Brim P. 0. Box 1064 La Jolla, CA 92038 Phone: (619) 454-8841 Fax: (619) 454-8842 February 17,1998 EXHIBIT 2 City of Carl&ad Community Services 405 Oak Ave. Carl&ad, CA 92008 Re: Proposed lease extension - Suite C, 6351 Yarrow Drive, Carl&ad, CA 92009 Attn: Mr. Chuck Walden Facilities Superintendent Dear Mr. Walden: Per your request, I am hereby submitting for your approval a proposal to extend your existing lease at the above referenced premises for a three year period, said extension to terminate September 30,200l. Your current lease is dated May 2,1989. (It superceded your original lease dated July 13,1983.) This 1989 lease has been amended by letter agreements dated September 26,199l and September 28,1995. Your current lease agreement is scheduled to terminate September 30,1998. It provides for a monthly industrial gross rental rate of $3,050.00 per month. I hold a security deposit of $3,050.00. The lease also provides that Lessee and Lessor each have the right to terminate the lease by giving one hundred eighty (180) days prior written notice to the other party. Your leased space is approximately 120’ x 48’ (5,760 sq. ft. in area) and has a 22’ clear span ceiling. You have a 10’ x 20’ double truck door with dock high loading; you also have a concrete ramp which simplifies loadii from or to small trucks or vans. You have leased this space f?om me for 18 years. I very much wish to continue our business relationship for the foreseeable future. Accordingly, I am offering you a proposal which I believe is priced well below the current Carlsbad market for similar properties. I hereby propose the following modification to your lease: a. The termination date shall be extended until September 30,200l. b. The monthly rental rate for this extension period shall be as follows: October 1,1998 thru September 30,1999 $3,398.00 October 1,1999 thru September 30,200O $3,5 14.00 October 1,200O thru September 30,200l $3,629.00 cTYcRLo7.sAM -3 + *. * .* ?. I ? f , 1 PI3 2 Proposed lease mod, City of Carl&ad February 17,1998 c. All other terms and conditions of the lease shall remain unchanged. If this proposed extension is acceptable to you, you may implement it by returning to me a copy properly signed by the City of Carl&ad. This offi is good until March 3 1,1998, at which time it may be changed or revoked without further notice. Please advise me if this date does not provide you with sufficient time to make your decision. Sincerely, LTD., Lessor Eli Perlman General Partner EP:pe AGREED Date ‘*4$7& CITY OF CARLSBAD, Lessee cTYcRLo7.sAM October 23,1998 Palomar 910 Associates, Ltd. P.O. Box 1064 La Jolla, CA 92038 ATTENTION: MR. ELI PERLMAN. GENERAL PARTNER Enclosed please find a certified copy of the signed lease extension for Suite C, 6351 Yarrow Drive, Carlsbad, California. Also enclosed for your records is a copy of Carlsbad City Council Resolution No. 98-334 which was adopted by the City Council on October 13, 1998, approving the lease extension with your company. If you have any questions regarding the lease or the extension, please call Chuck Walden, at (760) 434-2992. I understand there was some concern about receiving the signed extension. Please accept my apologies for the delay - the Clerk’s Office was hit hard by the flu. -. ._ -=)w KATHLEEN D. SHOUP Sr. Office Specialist 1200 Carlsbad Village Drive l Carlsbad, California 92008-1989 - (760) 434-2808 @