The URL can be used to link to this page

Home My WebLink About1986-10-28; City Council; 8349-2 Exhibit 1; BATIQUITOS LAGOON EDUCATIONAL PARK Exhibit 01HI3 ‘i47-X.- eJW3r-r I ~~~~~~~ &aMbb& PROPERTIES .rr, November 10, 1986 Mr. Frank Aleshire City Manager CITY OF CARLSBAD 1200 Elm Avenue Carlsbad, CA 92008 RE: BATIQUITOS LAGOON EDUCATIONAL PARK PHASE I Dear Frank: I am transmitting to you seven notebooks which contain copie! the agree,ments between Sammis Properties and the seve educational entities. The agreements have taken form of ei an Operations Agreement or a Lease. The Operations Agreement is necessary in the case of Chaf Col 1 ege, C1 aremont McKenna Col 1 ege, New School of Architect and the Foundation for the 21st Century. These entities reql formal approval by their boards before the lease may be sig However, both Sammis Properties and the individual entil believe that this Operations Agreement is a binding agreer ob1 i gati ng Sammi s Properties provide space and ob1 i gati ng educational entities to occupy that space. The only conditio found in Paragraph 5 of the agreement which requires the apprc of the City to construct the building. Please request an opinion from the City Attorney regarding t agreements. If you find that these agreements meet the inten the City Council action on October 28, 1986 regarding . matter, I request that you place this matter before the Cour at the earl iest opportunity. Thank you for your continuing cooperation. Very truly yours, $:7PTjTf < JDB:krp EDUCATIONAL ENTITIES -, ‘%IT n D. Briggs ice President 2650 Camino Del Rio North #lo0 0 San Diego, CA 92108 0 (619) 298-7112 ti .- - * OPERATIONS AGREEMENT FOR 0 CLAREMONT MCKENNA COLLEGE 8+ gd This agreement is made this $rd day of November, 19 between C1 aremont McKenna Col 1 ege (CMC), a Cal ifornia Non-pro Corporation, and Sammis Properties (Sammis) a Cal iforr Corporation who agree as follows: 1. RECITALS: a. Sammis is developing a project in the City Carlsbad known as the Batiquitos Lagoon Educational Park. One the primary components is the educational compl ex comprised several individual educational enti ties which are separate distinct entities governed by their own governing board trustees and administered by officers named by their board. b. CMC is a distinguished private college offer. quality liberal arts education. CMC plans to establish thi educational acti vi ties at Bati qui tos. These are: (1) educat to serve the 8,000 alumni of the college, (2) a continu. education/conference program targeting the business i population centers of northern San Diego County and southc Orange County, and (3) a conference research program serving seven research centers at C1 aremont McKenna Coll ege. c. Sammis has invited CMC to relocatenits ducatioi activities to the Batiquitos Campus. CMC has discussed tl proposal and has agreed to make this move. 0 d& ...-t NOW, THEREFORE, in consideration of the mutual covenar contained herein and incorporated in the recitals set forth abc the parties agree as follows: 1, Sammis agrees to construct a 70,000 square foot build at the Batiquitos Campus. Sammis will provide 2,000 square f in a separate wing of this buil ding for use by CMC. The quart that CMC will occupy will be constructed by Sammis Properties consul tation with CMC. The terms for the occupancy by CMC this building are described in the agreement which will foll The parties understand that the lease must be reviewed q approved by the Board of Trustees of CMC. a 2. CMC agrees to operate a high quality educational progi which will be independent and totally autonomous from the ott educational enti ties 1 ocated at the Batiqui tos Compl ex. CMC wi be free to exercise all academic powers and responsibili related to its operations. CMC's operations wil 1 uti1 ize t services of a number of faculty and staff who will be resident the Batiquitos site and other faculty and staff who wil 1 be ful time on the Cl aremont campus and who wi 11 come to Batiqui tos engage in various educational activities. 0 3. CMC agrees to participate in the governance of t Batiquitos Campus, a summary of which is attached, participating on the advisory council. CMC further agrees parti ci pate i n i nterdi scipl i nary programs by maki ng i curriculum available to students from other colleges, and wht appropriate, to encourage its students to take advantage classes and programs offered by other educational enti ties. 4. This agreement may not be assigned. 5. The parties understand that this building has not 1 been approved by the City of Carlsbad and that this agreement conditioned upon the construction of the building. In witness whereof, the parties hereto have executed tl agreement on the day and year first above written. SAMMIS PROPERTIES CLAREMONT MCKENNA COLLEGE @ dL&&& - - 4-&e $si dent Donald F. S6mmis President BY: ----__- 1 aremont McKenna Coll e Sammi s Properties \ a t I .I BATIQUITOS CDRPORATICN GOVERNANCE OCTOBER 28, 1986 0 OWNERSHIP OF LAND The land at Batiquitos Will be owned by a corporation kno the Batiquitos Corporation. It will be governed by a chaj and a Board of Trustees. FEDERPL CQNST ITVT I ON The Board will create a Federal constitution under w individual educational enti ties will retain their self-gove authority . The Batiquitos Corporation wi 11 appoint a president to a liaison between the Batiqui tos Corpratian and the self-gove 0 educational enti ties. ADVISORY COUNCIL The President shall convene an Advisory Council composed representative from each of the approved educational entj resident at the Batiquitos site, the President, and an appo of the Mayor of Carlsbad. The Advisory Council will me6 regular intervals and address issues relating to the ove administration of the educational enterprise, relations be enti ties, provision of services, and Wi 11 make recommendatio, the Batiqui tos Corporation Board regarding enti ties operati! comtemplating operat ion. INDIVI WAL EDUCATIONAL ENTITIES Each of the individual educational entities will be separl incorporated, governed by a Board of Trustees of its own, administered by officers named by its own Board. The individual educational entities will exercise all aca and administrative powers and respcnsibilities operations . relating to 0 -, .I '* BAT IQUITOS 03 RPOM ION GOVERNANCE a mge2 TERMINAT ICN OF RELm ICNS WIT H EMJCRT ICNAL ENT IT IES Termination of relations with any of the individual educationa entities operating at Batiquitos will occur as a result of a twcl thirds vote of the Board of the Batiquitos Corporatior cmtingent on prior lease agreements. e 0 (1 2 3 A,,:%\ F c A,' *- + n'. I*$ =' '.-- c ..,/ 9 LEASE BAT IQU ITOS LAGOON E DUCAT I ONAL PARK a In consideration of the rents and covenants hereinafter se forth, Landlord hereby leases to Temnt, and Terant hereby rent from Landlord, the following described premises upon t? following terms and conditions: Article 1 FUNDIIMEHTAL LEASE PROVIS ICN S : A. Date: B. Landlord: Batiquitos Bluff, a California Limited Partnershi C. Temnt: Claremont McKenna College, A California Non-profit Corporation. D. Tenant's (Article 7 an Trade Name: Clarernont McKenna College Exhibit "B" ) E. Premises: (Article 3 ar Exhibit "B" Approximately 2,000 square feet of space in the Building One, Batiqui tos Lagoon Educational Park building located at 4000 Windrose Circle, Carlsbad, Calif. 0 F. Lease Term: Five years (5 years) (Article 4) G. Commencenent of Term: (uticle 4) Premises are leased subject to completion of work by Landlord, with term commencing upon such completion or when Tenant opens for kusiness, which eter occurs earlier. Dollars ($36,000) per annum, pyable in twelve (12) equal monthly installments during each year, subject to rent? adjustment every 1 year of the lease term, with 1987 < the base year. Rent is $1.50 per square foot per mont' triple net. (Article 5A) H. Minimum Annual Rental: THIRTY SIX THOUSAND I. Cost of Living Adjustment: C.P.I. annually 4% max. J. Rental Deposit: -- N.A. (Article 5A) K. Percentage Rental: -- N.A. percent ( %) (Article 5C) L. Address for Notices: e 1 ?a M* To Landlord: Batiquitos Bluffs 2650 Camino del Rio North, Suite 100 San Diego, CA 92108 N. To Tenant: To the premises and Bauer Center 500 East 9th Claremont, CA 91711 (Article : 0 0. Security Deposit: N.A. (Article 3 Dollars ($ N.A. ). References in this Article 1 to other articles are fo convenience and designate some of the other Articles wher references to the particular Fundamental Lease Provisions appeal Each reference in this Lease to any of the Fundamental Leas Provisions contained in this Article 1 shall be constructed t incorprate all of the terms provided under each such Fundament2 Lease Provision. In the event of any conflict between ar Fundanental Lease Provision and the balance of the Lease, tl- latter shall control. Article 2 EXHI B IT S ?"ne following drawings and special provisions are attachc EXHIBIT "A" - General site plan of an integrated buildi ' which Landlord and others intend to construct or cause to constructed on real property located in the City, County a State described in Exhibit "B" and more particularly shown Exhibit "A", hereinafter referred to as the "Building". Sa site plan shews, among other things, the principal improvemer which Will comprise said Building. Tenant acknowledges that t site plan shown on Exhibit "A" is tentative and that Landlord m change the shape, size, location, number and extent of t improvements shown thereon and eliminate or add any improvemer to any portion of the Building, providd th& Landlord shall r change the size or location of the premises without Tenan consent. EXHIBIT "B" - Description of the premises, authorized I hereto as exhibits and made a part of this Lease: and Temnt's trade name. EXHIBIT 'IC" - Description of work to be performed Landlord and by Temnt in or on the premises. EXHIBIT *'D" - Guarantee of Lease. EXHIBIT "E" - Tenant's Estoppel Certi ficate a 2 I f ,' ' EXHIB1T "F" - Addendum or Rider EXHIBIT "G" - Option to Extend Term Article 3 PRENI SE S a Landlord hereby leases and demises unto Tenant and Tena hereby leases and takes from Landlord, for the term, at t rental, and upon the covenants and conditions hereinafter s forth, the commercial space referred to herein as the "premise: and described on Exhibit '*B" attached hereto and made a pa hereof. The premises shall be constructed in accordance with t procedures outlined in Exhibit 'IC" attached hereto and made part hereof. Article 4 TERN A. The term of this Lease shall begin as of the d2 specified in Article 1 hereof, and shall continue thereaft during the Lease Term specified in Article 1 hereof, unle sooner terminated as hereinafter provided in this Lease. B. If the premises are leased subject to completion of wc by Landlord, Landlord agrees to deliver to Tenant, and Tene agrees to accept from Landlord, possession of the premiz forthwith upon substantial completion of the premises described in Exhibit "C" hereof. The term "substanti completion of the premises" is defined as the date Landlc notifies Tenant that the premises are substantially complete the extent of Landlord's Work as speci fied in Exhibit "C", to point wherein Tenant's contractor may commence the construct of Tenant's Work, if any, as specified in Exhibit 'I Certi ficat ion by Landlord's architect ("Project Architect") the substantial completion of the premises in accordance w said Exhibit 'IC" shall be conclusive and binding upon the part hereto. Tenant shall commence the construction of Tenant's Wo if any, as described in Exhibit 'IC" hereof promptly uy substantial completion and shall open the premises for busin upon such completion. In the event the term of this Lease ' not commenced within three (3) years from the date hereof, t' this Lease shall terminate as of said date and each of parties hereto shall be released from any further obligat hereunder. @ C. Within ten (10) days after Tenant opens for busine Tenant will execute and deliver to Landlord a certific substantially in the form attached hereto, marked Exhibit "E" made a part hereof, indicating thereon any exceptions ther which may exist at that time. Failure of Tenant to execute deliver such certificate shall constitute an acceptance of premises and acknowledgment by Tenant that the stateme included in Exhibit "E" are true and correct, without exceptit e 3 b To the extent Tenant has possession or occupancy of any porti of the premises prior to the commencement of the term of tl Lease, for any reason whatsoever (e.g., for Tenant to insta tenant fixtures or improvements), all obligations under tt. Lease (particularly the obligation to maintain liabili insurance) shall commence as of the date of such possession occupancy, excepting only the obligation to pay minimum annt rent shall not commence. @ D. To the extent Tenant has possession or occupancy of portion of the premises prior to the commencement of the term this Lease, for any reason whatsoever (e.g., for Tenant install temnt fixtures or improvements), all obligations unc this Lease (particularly the obligation to maintain liabil: insurance) shall commence as of the date of such possession occupancy, excepting only the obligation to pay minimum annt rent shall not commence. Article 5 REhiAL AND TAXES The Tenant agrees to pay as rental for the use and occupa of the premises, at the times and in the manner hereinaf provided, the following sum of money: A. MINIMUM AiWUAL RENTAL. The minimum rental specified Article 1 here shall be payable in twelve (12) equal mont: installments during each year, in advance, on the first day each calendar month without setoff or deduction with commencement of the term of this Lease. Should the rental per ammence on a day of the month other than the first day of s month, then the rental for the first fractional month shall computed on a daily basis for the period from the date commencement to the end of such calendar month and at an amo equal to one-three hundred sixtieth (1/360) of the said mini annual rental for each such day, and thereafter shall be compi and paid as aforesaid. With the execution of this Lease, Ter is paying to Landlord a rental Deposit, as defined in Article as an advance on the first to become due minimurn annual rent. the end of each 12 month period of this Lease, the minimum ann rental shall be increased by a percentage equal to the perceni increase from the base period of the Consumer Price Index for Urban Consumers, all items, California, published by the Bu of Labor Statistics, U.S. Department of Labor. Said Index the calendar year designated in Article lH, shall be consid the l'base period." In no event shall said minimum annual rei be less than the sum then in effect for the preceding 12 mc period. If any time there shall not exist said Consumer PI Index, the parties shall substitute any official index publi by the Bureau of Labor Statistics, or successor or sirni government agency, as may then be in existence and shall be I nearly equivalent thereto. If the parties shall be unabl agree upon a successor index, the parties shall refer the ch @ 4 a s of a successor index to arbitration in acoordance with the rul of the American Arbitration Association. It is the intent this provision that the foregoing rental adjustment procedur shall occur effective as of the first day of the month of each month period during this Lease term. B. TAXES e (1) Throughout the term of this Lease, Tenant agrees py to Landlord, as additional rent, the amount of taxes 2 assessments levied and assessed for any such year upon t premises and the underlying realty. Such additional rent for i partial year of the term hereof shall be prorated on a ti basis. Payment shall be made by Tenant within thirty (30) de after receipt of a written statement from Landlord setting fo: the amount of such tax. (2) The term"F1oor Area", as used throughout this Le: shall be deened to mean and include all areas for the exclus use and occupancy by tenants or subtenants of Landlord, measu from the exterior surface of exterior walls (and from extensions thereof, in the case of openings) and from the cen of interior demising partitions, including mezzanin warehousing or storage areas, clerical or office areas < employee areas. (3) In the event the premises and underlying realty not separately assessed but are part of a larger parcel assessment purposes (hereinafter referred to as the "lar parcel"), "taxes and assessments levied and assessed upon premises and the mderlying realty" shall mean a fractio prtion of said taxes and assessments on the larger par (excluding taxes and assessments on any common areas therecn) numerator of which shall be the Floor Area of the premises denominator of which shall be the Floor Area of all the ar available for exclusive use and occupancy by tenants of larger parcel, whether or not actually occupied and open for business, provided that na equitable adjustment shall be made buildings which are only partially completed on the date SI taxes and assessments become a lien. With respect to assessments which may be levied apinst or upon the premises the underlying realty, or which under the laws then enforce be evidenced by improvement or other bonds, or may be paic annual installments, only the amount of such annual installme (with appropriate proration for any partial year) and statutc interest shall be included within the computation of the anr taxes and assessments levied against the premises and underlying realty. (4) If at any time during the Lease Term under the law the United States Government, State, County, or City or political subdivision thereof in which the premises are situa a tax or excise on rent or any other tax however describe1 levied or assessed by any such political body, acplinst Land on account of rentals payable to landlord hereunder, such ta 0 a 5 1' elrcise shall be considered "taxes" for the proposes of th Article SB, excluding, however, from such tax or excise a general income taxes, gift taxes, inheritance taxes and esta taxes. The term "taxes" shall also include possessory inter€ taxes levied in lieu of real property taxes. Article 6 TIMING OF OCCUPANCY e The schedule for completion of the facilities is as follows: 1. Execution of lease November 1, 1986. 2. Completion of detailed preliminary plans ar 3. Completion of final plars and specifications - Januar 4. Commencement of anstruction - February 15, 1987. 5. Completion of premises and occupancy - September 1 speci fications - December 15, 1986. 1987. 1987. ARTICLE 7 POS~SSI~ AND USE A. Possession of the premises shall be delivered to Ten: free and clear of all tenants and occupants and the right: either, and also free of liens and encumbrances, except those may be specified in Article 10 hereof. Tenant shall use premises solely for the purposes and under the trade ne specified in Exhibit "B" attached hereto. Tenant shall not or permit the premises to be used for any other purpose purposes or under any other trade name whatsoever without mitten consent of Landlord first had and obtained. Tenant sh not, without the prior consent of Landlord, sell merchandise f vendingmachines or allow any coin operated vending or gam machines on the premises. During said term the premises, a every part thereof, shall be kept by Tenant in a clean who1 esome condi tion, free of any obj ec ti orable noises , odors nuisances, and that all health and police regulations shall all respects and at all times, be fully complied with by Temn B. Tenant shall use its best efforts to completed, or c to be completed, all deliveries, loading, unloading and serv to the premises prior to 1O:OO A.M. of each day. Tenant sh attempt to cause no delivery trucks or other vehicles servic the premises to park or stand in front of, or at the rear of, premises from 1O:OO A.M. to 9:00 P.M. of each day. The Land1 reserves the right to further regulate the activities of Temnt in regard to deliveries and servicing of the premises, Tenant agrees to abide by such further non-discriminat II)) a 6 1' regulations of Landlord. c. Tenant shall not do or permit anything to be done in about the premises nor bring or keep anything therein which not within the permitted use of the premises which wi 11 in a way increase the existing rate of or affect any fire or 0th insurance upon the premises or any of its contents, or cause cancellation of any insurance policy covering the building or a part thereof of any of its contents. Tenant shall not do permit anything to be done in or about the premis es which will any way obstruct or interfere with the rights of other tenants occupants injure or annoy them or use or allow the premises to used for any improper,. immoral, unlawful or objectionah purpose; nor shall Terant cause, maintain or permit any nuisar in, on or about the premises. Tenant shall not commit or all to be committed any waste in or upon the premises. Temnt sha not use the premises, or permits anything to be done in or ab( the premises, which will in any my conflict with any l4 statute, ordinance or governmental rule or regulation now force or which may hereafter be enacted or promulgated. Ten? shall, at its sole cost and expense, promptly comply with a laws, statutes, ordimnces and governmental rules, regulations requirements now in force or which may hereafter be in force i with the requirements of any board of fire underwriters or otl similar bodies now or hereafter consti tuted relating to affecting the conditions, use or occupancy of the premis excluding structural changes not related to or affected Tenant's improvements or acts. The judgment of any court competent jurisdiction or the admission of Tenant in any act against Tenant, whether Landlord be a party thereto or not, t Tenant has violated any law, statue, ordinance or govemmen rule, regulation or requirement, shall be consulted of that f as between the Landlord and Tenant. Article 8 VTILIT IES SERVICES Tenant agrees, as its own expense, to pay for all wat gas, pwer, electric current, telephone, and all other simil utilities used by the Tenant on the premise from and after delivery of possession thereof by Landlord. If any such chai are not paid when due, Landlord may pay the same, and any am( so paid by Landlord shall thereupon become due to Landlord ' Tenant as additional rent. Article 9 INDEMiNITY - INSURANCE - WAIVER OF SUBROGATICN A. Temnt covemnts with Landlord that Landlord shall be liable for any damage or liability of any kind or for injury to or death of person or darnzge to property of Temnt any other person during the term of this Lease, from any cr whatsoever, by reason of the use, occupancy and enjoyment of a 7 -' premises by Tenant or any person therecn or holding under Tenan < and that Tenant will indemnify and save harmless the Land101 from all liability whatsoever, on account of any such real ( claimed damage or injury and from all liens, claims and demanc arising out of the use of the premises and its facilities, or a repairs or alterations which Temnt may make upon said premis but Tenant shall not be liable for damage or injury occasioned I the negliFnce of Landlord and its designated agents, servants ( employees unless covered by insurance Tenant is required provide. This obligation to inlemnify shall include reasonab attorneys' fees and investigation costs and all other reascnab costs, expenses and liabilities from the first notice that a claim or demand is to be made or may be made. B. Landlord and Tenant hereby waive any rights each m have against the other on account of any loss or dama occasioned to Landlord or Tenant, as the case may be, the respective property, the premises, or its contents or to 0th portions of the building arising from any risk covered by fi and extended coveraF insurance; and the parties each, on behs of their respective insurance companies insuring the property either LaEdlord or Tenant acpinst any such loss, waive any ric of subrogation that it may have against the Landlord or Temr as the case may be. The foregoing waivers of subrogation sha be operative only so long as they do not invalidate any SL policy. C. Tenant further covenants and agrees that from and af the substantial completion of the premises, Tenant will carry 2 maintain, at its sole cost and expense, the following types insurance, in the amounts specified any in for form hereinaft( (i) PUBLIC LIABILITY. Bodily injury liabil: insurance with limits of not less than Five Hundred Thous, Dollars ($500,000.00) per person and One Million Doll ($1,000,000.00) per occurrence insuring against any and i liability of the insured with respect to said premises arising out of the mainterance, use or occupancy thereof, property damage liability insurance with a limited of * less than Two Hundred Fifty Thousand Dollars ($250,000. per accident or occurrence. All such bodily injury liabil insurance and property damage liability insurance sh specifically insure the performance by Tenant of indemnity agreement as to liability for injury to or deatl- persons and injury or damage to property in this Articl con t ai n ed . (ii) TEXAN" IMPROVEMENTS. Insurance mvering all the items speci fi ed as "Tenant's Work" in Exhibit ' Tenant's leasehold improvements, alterations, additions improvements permitted under Article 11, trade fixtui merchandise and perscnal property from time to time in, a upon the premises, in an amount not less than eighty perc (80%) of their full replacement cost from time to time dui 0 provided for: a 8 0 the tern of this Lease, providing protection against a peril included within the classi fication "Fire and Extend CoveraF", together with insurance apinst sprinkler damas vandalism and malicious mischief. Any policy proceeds sha be used for the repair or replacement of the property dame or destroyed unless this Lease shall cease and termina under the provisions of Article 18 hereof. (iii) POLICY FORM. All policies of insurance provid for herein shall be issued by insurance companies, wi general policy holders' rating of not less than A and financial rating of Class X as rated in the most curre available "Best's" Insurance Reports, and qualified to business in the State where the building is situated, a shall be issued in the names of Landlord and Tenant, whi policies shall be for the mutual and joint benefit z protection of Landlord and Tenant, and executed copies such policies of insurance or certificates thereof shall delivered to landlord within ten (10) days after delivery possession of the premises to Tenant and thereafter wit1 thirty (30) days prior to the expiration of the termof el such policy. All public liability and property dam( policies shall contain a provision that Landlord, altho named as an insured, shall nevertheless be entitled remvery uder said policies for any loss occasioned to its servants, agents and employees by reason of 1 negligence of Tenant. As often as any such policy sh; expire or termiRate, renewal or additional policies shall procured and maintained by Terant in like manner and to 1 extent. All policies of insurance delivered to Landlord m contain a provision that the company writing said policy w give to Landlord twenty (20) days notice in writing advance of any cancellation or lapse or t'ne effective date any reductio= in the amounts of insurance. All pub liability, property darmge and other casualty policies sh be written as primary policies, not contributing with and in excess of coverage which Landlord may carry. To extent Landlord's lender or ground lessor, if any, requests, said lender and lessor shall also be named additional insureds and shall Se given the notices to same extent as Landlord is entitled. a e I). No twi thst anding anything to the contrary con t ai within this ARticle 9, Tenant's obligations to carry insurance provided for herein may be brought within the cover: of a so-called blanket policy, or policies of insurance car1 and maintained by Tenant, provided, however, that Landlord SI be named as an additional assured thereunder as its interest appear and that the coverage afforded Landlord will no. reduced or diminished by reason of the use of such blanket PO of insurance, and provided further that the requirements forth herein are otherwise satisfied. Tenant agrees to pe. Landlord at all reasonable times to inspect the policie! insurance of Tenant covering risks upon the premises for wl policies or copies thereof are not required to be delivere a 9 ' Landlord. E. Landlord shall at all times during the term her maintain in effect a policy or policies of insurance cover the building of which the premises are a part, in an amount less than eighty percent (80%) of full replacement c (exclusive of the cost of excavations, foundations and footir from time to time during the term of this Lease or the amount such insurance Landlord's mortgage lender requires Landlorc maintain, whichever is the greater, providing protection agai any peril generally included within the classification "Fire Extended Coverage," together with insurance against sprink damag2, vandalism and malicious mischief. Landlord's obligat to carry the insurance provided for herein may be brought wit the coverage of any so-called blanket policy or policies insurance carried and maintained by Landlord, provided that covera9 afforded Will not be reduced or diminished by reasor the use of such blanket policy of insurance. Tenant agrees pay Landlord as additional rent, during ach year or partial 1 of the term of this Lease, the cost to Landlord of the insura required to be maintained by Landlord on the premises un Article 9E for each such year or partial year. Suchadditio rent for any partial year of the term hereof shall be prorate( a time basis. Payment shall be made by Tenant within fift (15) days after receipt of a written statement from Land1 setting forth the cost of such insurance and showing reasonable detail the manner in which it has been computed. the event the cost to the Landlord of the insurance it required to maintain on theprenises under said Article 9E is separately charged to Landlord by its insurance carrier, portion applicable to the premises of the mst of such insur< shall be that propor tion of such cost which the Floor Area of premises bears to the Floor Area of all the areas available exclusive use and occupancy by temnts of the building, whet or not actually occupied and open for business covered by s insurance. a 0 Article 10 TITLE OF LANDLORD Landlord covenants that as of the date hereof there art liens upon its estate other than (a) the effect of covenar conditions, restrictions, easements, ground lease(s), if any, mortgages of record, and other rights of my of record; (b) effect of any zcning laws of the City, County and State where building is situated, ard (c) general and special taxes delinquent. Tenant agrees that as to its leasehold estate and all persons in possession or holding urder it, will con. to and will not violate the terms of any of the aforementic matters of remrd, or any other matters of record. Article 11 e 10 I'TENANT'S RIGhTS TO MAKE ALTEWIONS A. Landlord agrees that Tenant may, at its own expense and after giving Landlord notice in writing of its intention to do from time to time during the term hereof, make alterations, @::kitions and changes in and to the interior of the premises (except those of a structural nature) as it may find necessary or convenient for its purposes, provided that the value of the premises is not thereby diminished, and provided, however, that no alterations, additions or changes costing in excess of Two Thousand Five Hundred Dollars ($2,500.00) may be made without first procuring the approval in writing of Landlord. In zddition, no alterations, additions or changes shall be made to any store front , the exterior walls or roof of the premises, nor shall Tenant erect any mezzanine or increase the size of same, if one be initially constructed, unless and until the written ansent and approval of Landlord shall first have been obtained. In no event shall Tenant make or cause to be made any penetration through the roof of the premises without the prior written approval of Landlord. Temnt shall be directly responsible for any and all damages resulting from any violation of the provisions of this Article. all a1 terations, additions, or changes to be made to the premises which require the approval of Landlord shall be uder the supervision of a competent architect or competent licensed structural engineer and made in acmrdance with Plans and Specifications with respect thereto, approved ir writing by Landlord before the ammencement of work, where suck approval is' required pursuant to the provisions of this Article All work with respect to any alterations, additicns, and changes must be done in a good and mrkmanlike manner and diligent13 prosecuted to completion to the end that the premises shall a 0 all times be a complete unit except during the period of work Upon completion of such wrk, Tenant shall file for reoord in thi office of the County Recorder where the building is located i Notice of Completion as permitted by the law. Upon terminatior of the Terant's leasehold estate such alterations, additions an improvements shall be performed and done strictly in acardanc with the laws and ordimnces relating thereto. In performing th work of any such alterations, additions or changes, Tenant shal have the work performed n such a manner as not to obstruct th access to the premises of any other tenant in the building. B. In the event that Tenant shall make any permittf alterations, additions or improvements to the premises under th terms and provisions of this Article 11, Temnt agrees upon it part to carry such insurance as required by Article 9C (iT mvering any such alteration, addition or improvement, it beir expressly understood and agreed that none of such alteration5 additions or improvements shall be insured by Landlord under suc insurance as it may carry upon the building of which the premise are a part, nor shall Landlord be required urder any pmvisio for reconstruction of the premises to reinstall any su( a1 te ra ti ons , improvement s or addi ti ons. C. At Landlord's option upon termination or expiration I1 a this Lease, Tenant shall remove any or all of the improvemei constructed or installed by Tenant on the premises,, with Ten repairing any damages to the premises caused by such removal. Article 12 @ MECHANICS' LIENS A. Tenant agrees that it wi 11 pay or cause to be paid i costs for work done by it or caused to be done by it on 1 premises, and Tenant Will keep the premises free and clear of i mechanics' liens and other liens on account of work done : Tenant or persons claiming under it. Tenant agrees to and sh: indemnify, defend and save Landlord free and harmless agaii liability, loss, damage, costs, attorneys' fees, and all otl expenses on acmunt of claims of lien of laborers or material] or others for work performed or materials or supplies furnisl for the Terant or persons claiming urder it. If Tenant shall des ire to contest any claim of lien, shall furnish Landlord adequate security of the value ore in i amount of the claim, plus estimated asts and interest, or a bc of a responsible corporate surety in such amount conditioned the dischap of the lien. If a final judgment establishing I validity or existence of a lien for any amount is entered, Ten; s3alf pay and satisfy the same at mce. C. If Temnt shall be in default in paying any charge . which a mechanics' lien claim and suit to foreclose the lien hi been filed, and shall not have given Landlord security to protc the property and Landlord against such claim of lien, Landlc may (but shall not be so required to) pay the said claim and i costs, and the amount so paid, together with reasonab attorneys' fees incurred in connection therewith, shall immediately due and owing from Tenant to Landlord, and Tena shall py the same to Landlord with interest at the maxin lawful rate from the dates of Landlord's payments. Should e claims of lien be filed against the premises or any acti affecting the title to such property be commenced, the par receiving notice of such liens or action shall forthwith give t other party written notice thereof. Landlord or i representatives shall have the right to go upon and inspect t premises at all reasonable times alld shall have the right to PC and keep posted thereon notices of non-responsibility, or su other notices which the Landlord may deem to be proper for t protection of Landlord's interest in the premises. Temnt shal before the commencement of any work which might result in e such lien, give to Landlord written notice of its intention to so in sufficient time to enable the posting of such notices. Article 13 ADVERTISING SIGNS Tenant shall not utilize any sign on or about the premises exce B. 0 e 12 as nas- been approved by Landlord. Tenant shall not affi, 'maintain upon the glass panes and supports of the show winc (and within 24 inches. of any window), doors and the extei walls of the premises, any signs, advertising placards, nap insignias, trademarks, descriptive material or any other E like item or items except such as shall have first received written approval of Landlord as to size, type, color, locat. copy, nature and display qualities. Anything to the contrarl this Lease notwithstanding, Tenant shall not affix any sigr the roof of the premises. In addition, no advertising med shall be utilized by Tenant which can be heard or experien outside Tenant's premis es, including without limiting generality of the foregoing, flashing lights, search ligl loudspeakers, phonographs, radios or television. Tenant sh not display, pint or place or cause to be displayed, pintel placed, any handbills, bumper stickers or other advertis devices on any vehicle parked in the parking area of Building, whether belonging to Tenant, or to Tenant's agent, to any other person; nor shall Tenant distribute, or cause tc distributed, in the Building, any handbills or other advertis devices, and in the event of a violation of this covenant Tenant, Tenant shall py to Landlord the cost and expe necessary to remove any such unauthorized material from Building. Article 14 FIXTURES AND PERSCNAL PROPERTY @ - A. Any trade fixtures, signs and other persmal property Ter-ant not perinanently affixed to the premises shall remain property of Tenant and Landlord agrees that Tenant shall have right, provided Temnt be not in default urder the terms of t' Lease, at any time, and from time to time, to remove any and 2 of its trade fixtures, sign and other personal property which may have stored or installed in the premises, including ht limiting the same to counters, shelving, showcases, mirrors i other movable personal property. Nothing in this Artic contained shall be deemed or construed to permit or allow Ten to remove so much of such personal property, without t immediate replacernent thereof with similar personal property comparable or better quality, as to render the premi: unsuitable for conducting the type of business speci fi sd Exhibit "B" attached hereto. Tenant at its expense shz immediately repair any damage occasioned to the premises reason of the removal of any such trade fixtures, signs, i other personal property, and upon the last day of the Lease Ti or a date of earlier termination of this Lease, shall leave premises in a neat and clean condition, free of debris. A trade fixtures, signs and other personal property installed in attached to the premises by Temnt must be new when so install or at tached. 1) B. All improvements to the premises by Tenant, includi but not limited to light fixtures, floor coverings a a 13 ,partitions, lxlt excluding trme nxcures cairn aAyrw, - _.___ -bwV...' . the property of Landlord upon expiration or earlier termination of this Lease. C. Tenant shall pay before delinquency all taxes, issessments, license fees and public charges levied, assessed or 'imposed upon its business operation, as well zs upon its trade fixtures, lease-hold improvements (including, but not limited to, those Tenant is required to make in accordance with the pro visions of Exhibit "C" hereof) , merchandise and other personal property in, on or upon the premises. In the event any such items of property are assessed with property of Landlord, then, and in such event, such assessment shall be equitably divided between Landlord and Temnt to the end that Temnt shall pay only its equitable proportion of such assessment. Landlord shall determine the basis of prorating any such assessments and such determination shall be binding upon both Landlord and Tenant. No taxes, assessments, fees or charges referred to in this paragraph shall be considered as taxes under the provisions of Article 5 hereof. Article 15 ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN CORPORATE OWNERSHIP A. Tenant shall not transfer, assign, sublet, enter into licers e or concession agreements, change ownership, mortpge or hypothecate this Lease or Tenant's interest in and to the premises without first procuring the written consent of La nd 1 ord. s ub 1 et ti ng , license or concession agreement, change of ownership, mortgage or hypothecation without Landlord's written consent shall be void and confer no rights upon any third person. Without in any way limiting Landlord's rights to refuse to give such consent for an1 other reasm or reasons, Landlord reserves the right to refuse tc give such consent unless Temnt remains fully liable during the unexpired tern of the Lease anc? Landlord further reserves thc right to refuse to give such consent if in Landlord's reasorable business judginent the quality of merchandising operation is or may be in any my adversely affected during the term of tht Lease or the financial worth of the proposed new tenant is 1es: than that of the Tenant executing this Lease or of Tenant an( Tenant's Guarantor as the case may be. Tenant agrees tc reimburse Landlord for for Landlord's reasonable attorney fee: incurred in amjunction with the processing and documentation ol any such requested transfer , assignment, subletting, licensing 01 concession agreement, change of ownership, mortgage o hypothecation of this Lease or Tenant's interest in and to th premises. Any attempt ed t ra ns f e r , as s i gnrnen t , a E. Each transfer, assignment, subletting, license concession agreement, mortpge and hypothecation to which ther has been consent shall be by an instrument in writing in for satisfactory to Landlord and shall be executed by the transferor assignor, sublessor, licensor, concessionaire, hypothecator c e 14 . . mortgagor and the transferee, assignee, sublessee, licens 'concessionaire or mortgagee in each instance, as the case may and each transferee, assignee, sublessee, licenst concessionaire or mortgagee shall agree in writing for 1 benefit of Landlord herein to assume, to be bound by, and perform the terms, covenants and conditions of this Lease to done, kept and performed by Tenant, including the payment of z amounts due or to become due under this Lease directly Landlord. One executed apy of such written instrument shall delivered to Landlord. Failure to first obtain in writj Landlord's consent or failure to comply with the provisions this Article shall operate to prevent any such transfc assignment, subletting, licens e, concession agreement, mortg or hypothecation from beccming effective. C. If a Tenant hereunder is a corporation (except oorpration whose stock is traded on the NYSE or the AMEX), or an unincorporated association or partnership, the transf t assignment or hypothecation of any stock or interest in SL corporation, association or partnership in the aggregate excess of twenty-five percent (25%) shall be deemed an assignme within the meaning and provisions of this Article 15. Article 16 TEWiNT'S CONDUCT OF BUSINESS 0 A. Tenant covenants and agrees that, continuously P uninterruptedly from and after its ini ti a1 opening for busi ne it.wi 11 operate and conduct within the premises the businc which it is permitted to operate and conduct urder the provisic hereof, except while the premises are mtenantable by reason fire or other casualty, and that it will at all times keep a maintain within and upon the premises and adequate stock merchandise and trade fixtures to service and supply the USL and ordifiary demands and requirements of its customers and tk it will keep its preinis es in a neat, clean and orderly conditic Tenant agrees that all trash and rubbish of the said Tenant sha only be deposited within receptacles as provided by Landlord a that there shall be no other trash receptacles permitted remain outside of the premises. Landlord agrees to cause su receptacles to be emptied and trash removed at Tenant's cost E expense as part of the common area expenses. B. Tenant shall faithfully observe and comply with t rules and regulations that Landlord shall from time to ti promulgate and/or modify. The rules and regulations shall binding upon the Tenant upon delivery of a copy of them Tenant. Landlord shall not be responsible to Tenant for t nonperformance of any said rules and regulations by any 0th tenants or occupants. All such rules and regulations shall non-discriminatory and shall be applicable to all users a tenants of the Building. Article 17 0 15 H~AIRS' AND MAINTENANCE A. Tenant agrees at all times, from and after substantial completion of the premises, and at its own cost and expense, to replace and maintain a good and tenantable condition the p x@ir, mises and every part thereof , excluding the roof , exterior walls, structural parts of the premises and structural floor (f 1mr covering, including carpeting, terrazzo or other special flooring installed by or at the request of Tenant, to be maintained by the Temnt), and including without limitation the utility meters, pipes and conduits, all fixtures, air conditioning and all Temnt's signs, locks and closing devices, and all window sash, casement or frames, door and door frames, and all such items of repair, maintenance and improvement or reconstruction as may at any time or from time to time be required by government agency having jurisdiction thereof. Landlord will contract with a service company for mont'nly maintemnce of the heating and air conditioning equipment on the roof and Tenant shall pay Landlord for this service on a monthly basis. B. Subject to the foregoing provisions hereof, the Landlord s'nall keep and maintain in good and tenantable condition and repair, the roof, exterior walls, structural parts of the premises and structural floor, pipes and conduits outside the premises for the furnishing to the premises of various utilities (except to the extent that the same are the obligation of the appropriate public utility company); provided, however, that Landlord shall not be required to make repairs necessitated by of the negligence of Tenant or anyone claiming under @A::, or by reason of the failure of Tenant to perform or o serve any conditions or agreements in this Lease contained, or cause by alterations, additions, or improvements made by Terant or anyone claiming under Tenant. Anything to the contrary notwithstanding contained in this Lease, Landlord shall not in any way be 1 iable to Tenant for failure to make repairs as herein speci fically required of it unless Temnt has previously notified Landlord, in writing, of the need for such repairs and Landlord has failed to commence making repairs within 30 days after receipt of such notice and to complete said repairs within a reasorable period of time following receipt of Temnt's written notification. Any costs Landlord incurs from time to time in connection with the maintenance and repair of the premises as above provided shall be billed by Landlord to Tenant and upon receipt of such billings Tenant shall immediately reimburse Landlord for said costs. C. If Tenant refuses or neglects to make repairs and/or maintain the premises, or any part thereof, in a manner reasonable satisfactory to Landlord, Landlord shall have the right, upon giving Tenant reasonable written notice of its election to do so, to make such repairs or perform such mainterance on behalf of and for the account of Temnt. In such event such wrk shall be paid for the Tenant as additional rent a 16 promptly upon receipt of a bill therefor. D. As used in this Article the expression "exterior walls" shall not be deemed to include store front or store fronts, plate ass, window cases or window frames, doors or door frames, :urity grilles or similar enclosures. It is understood and @reed that Landlord shall be under no obligation to make any repairs, alterations, renewals, replacements or improvements to and upon the premises or the mechanical equipment exclusively serving the premises at any time except as in this Lease expressly providec!. E. Upon any surrender of the premises, Tenant shall rdeliver the premises to Landlord in good order, condition and state or repair, ordinary wear and tear excepted, and excepting such items of repair as may be Landlord's obligation hereunder. Article 18 RECONSTRUCT IOU A. In the event the premises be damaged by fire or other perils covered by Landlord's fire and extended coverage insurance, Landlord shall: (i) Within a period of ninety (90) days thereafter, commence repair, reconstruction and restoration of said premises ar,d prosecute the same diligently to completion, in which event this Lease shall continue in full force and effect: or (ii) In the event of apartial or total destruction e the premises during the last three (3) years of the term hereof, Landlord and Tenant shall each have the option to terminate this Lease upon giving written notice to the other of exercise thereof within thirty (30) days after such destruction. For purposes of this paragra@ (ii), "pxtial destruction" shall be deemed a destruction to an extent of at least thirty-three and one-third percent (33-1/3&) of the then full replacement cost of the premises as of the date of destruction. B. In the event the premises shall be damaged as a result of any flood, earthquake, act of war, nuclear reaction, nuclear radiation or radioactive contamination, or from any other casualty not covered by Landlord's fire and extended coverage insurance, to any extent whatsoever, Landlord may within ninety (90) days following the date of such damage, commence repair, reconstruction or restoration of said premises and prosecute the same diligently to completion, in which event this Lease shall continue in full force and effect, or within said ninety-day period elect not to so repair, reconstruct or restore said premises in which event this Lease shall cease and terminate. In either such event Landlord shall give Tenant written notice of its intention within said ninety-day period. C. In the event of any remnstruction of the premises under a 17 ' this Xrticle 18, said reconstruction shall be in str conformity with the provisions of Exhibit "C" hereof and to extent of the work as therein set forth as "Description Land1 ord's Work'' and "Description of Tenant's Wor Notwithstanding that all reconstruction work shall be perfor @ by Landlord's contractor unless Landlord shall otherwise ag in writing, Landlord's obligation to reconstruct the premi! shall be only to the extent of the work as described "Description of Landlord's Work" in Exhibit "C" hereof; Tena at its sole cost and expense, shall be responsible for the rep and restoration of all items set forth as Tenant's Work in Si Exhibit "C" and the replacement of its stock in trade, tr: fixtures, furniture, furnishings and equipment. Tenant shz commence i n s t a1 1 a ti on 6 f f i xt u r es , e qu i pm en t a nd mer cha nd: hereof promptly upon delivery to it of possession of the premi, and shall diligently prosecute such installation to completion D. Upon any termination of the Lease under any of t provisions of this Article, the parties shall be released then without further obligations to the other party coincident wj the surrender of possession of the premises to the Landlo: except for items which have theretofore accrue2 and be t'r unpaid. In the event of termination for reason of damge by fi or other perils and such damage is covered by Tenant's fire c extended coverage insurance under Article 9C (iv), all sc proceeds covering the items specified as "Tenant's Work'' Exhibit "C", and Temnt's leasehold improvements, but excludj proceeds for trade fixtures, merchandise, signs and ot? personal property, shall be disbursed and paid to the Landlord E. In the event of repair, reconstruction and restorati as herein provid ed, the minimum annual rent a1 provid d to be pz under Article 1 hereof shall be abated proportionately with 1 degree in which the Tenant's use of the premises is impair commencing from the date of destruction and antinuing during t period of such repair, reconstruction or restoration. Tena shall cofitinue the operation of its business on the premis during any such period to the extent reasorably practicable fr the standpoint of prudent bsiness mamgement; and the obligati of Tenant hereunder to py percentage rental and addition rental shall remain in full force and effect. Tenant shall r be entitled to any compensation or damages from Landlord for IC of the use of the whole or any part of the premises, or t building of which the premises are a part, Tenant's person property or any inconvenience or annoyance occasioned by su darrage, repair, reconstruction or restoration. F. With respect to any partial or total destruction whi Landlord is obligated to restore or may restore under any of t provisions of this Lease, Tenant hereby waives any statuto rights of termination which may arise by reason of su destructi on - G. In the event of any damage to the premises, Tenant sha give to Landlord written notice of such damage within 5 da 0 a 18 after its occurrence. Article 19 COMNON AREAS AND AUTOMOBILE PARKING @ A. Landlord shall provide up to a maximum of 7 parki spaces. If during the term of the lease Tenant, on a regul basis, requires additional parking, Landlord shall agree provide additional parking spaces in which Temnt shall pay Fif ($50.00) per space, per month in 1986 Dollars, plus C.P adjustment every year. B. Tenant and its employees and invitees are, except otherwise specifically provided in this Lease, authorize empowered and privileged to use the ammon areas in common wi other persons during the term of this Lease. Landlord agree without cost or expense to Tenant, to construct or cause to constructed, the common areas generally upon the area shown the site plan attached hereto and marked Exhibit "A", and maintain and operate, or cause to be maintained and operat (except as hereinafter provided with reference to cost maintemnce), said common areas at all times following complet: thereof, for the benefit and use of the customers and patrons Tenant, and of other tenants, owners, and.occupants of the 1; constituting the Building of which the premises are a part. C. Landlord shall keep or cause to be kept said comn areas in a neat, clean and orderly condition, properly light and landscaped, and shall repair any damage to the facilitj thereof, but all expenses in connection with said mmmon arc shall be charged and prorated in the manner hereinafter r forth. It is understood and agreed that the phrase "expenses connection with said common areas" as used herein shall construed to include, but not be limited to, all sums expended connection with said common areas for all general maintenance repairs, resurfacing, or painting, restr iping, cleaning, tr removal, sweeping and janitorial services, maintenance repair of sidewalks, curbs, and building signs; sprink systems, plant and landscaping; lighting and other utili ti directional signs and other markers and bumpers; maintenance repair of any fire protection systems, lighting systems, st1 drainage systems and any other utility systems: personnel implement such services including, if Landlord deems necessi the cost of security guards; real and personal property talc possessory interest taxes, and assessments on the improveme and land comprising said common areas: any governmen imposition or surcharge imposed against Landlord or asses against the automobile parking area of any other portion of common area; depreciation on maintenance and operating machir and equipment (if owned) and rental paid for such machinery equipment (if rented), adequate public liability and prope damage insurance on the common areas (under which Tenant shall named as an additional assured), @ 19 0 Inl addition, "expenses in connection wlth said mmmon areas shall include costs for the accounting, bookkeeping and mllection of the expenses in connection with said mmmon areas jtn an amount equal to ten percent (10%) of Tenant's pro rata re of the total of the aforementioned expenses for each Zandar year. Landlord may cause any or all of said services to be provided by an independent contractor or contractors. Anything to the contrary notwithstanding contained hereinabve, all expenses in connection with the original construction and installment of the common areas shall be at the sole cost and expeme of Landlord and shall not in any event be charged to the Temnt. D. Tenant shall pay to Landlord Tenant's pro rata share of (i) From and after the date the term of this lease as proved for in Article 1 hereof has commenced, but subject to adjustment as hereinafter in this subparagraph (i) provided, Temnt shall pay Landlord on the first day of each calendar month of the term of this Lease an amount estimated by Landlord to be Tenant's pro rata share of such common area expenses. Landlord may adjust the estimated monthly charge at the end of any calendar quarter on the basis of Landlord's experience and reasaably anti ci,pt ed cost s. :such commcn area expenses in the following manner: (ii) Within thirty (30) days following the end of each calendar quarter or, at Landlord's option, each calendar year, Landlord shall furnish Tenant a statement covering the calendar quarter or year just expired, certified as correct by a certified ic acauntant or an authorized representative of Landlord, mwing the total operating cost, the amount of Tenant's pro rata share of such common area expenses for such calendar qmrter or year and the payments made by Tenant with respect to such period as set forth in subparagraph (i). If Tenant's pro rata share of such common area expenses exceeds Tenant's gayment so made, Tenant shall pay Landlord the deficiency within ten (10) days after receipt of such statement. If said payments exceed to offset the excess aFirst payments next thereafter to become due Landlord as set forth in said subparagrap (i). (iii) Tenant's pro rata share of the total common area expenses for the previous calendar quarter or year shall be that portion of all of such expenses which is equal to the proportion thereof which the number of square feet of Floor Area in the premises bears to the total number of square feet of Floor Area of buildings in the entire Building which are from time to time occupied and open for business as of the commencement of each calendar quarter. There shall be appropriate adjustment of Tenant's share of the mmmon area expenses as of the commencement and expiration of the term of this Lease. F. Landlord shall at all times have the right and privilege of determining the nature and extent of the common areas, and of making such changes therein and thereto from time to time which a 20 .zn its opinion are deemed to be desirable and for the b interests of all person using said common areas, including 1 location and relocation of driveways, entrances, exi automobile parking spaces, the direction and flow of traff installation of prohibited areas, landscaped areas, and all ot G. Nothing contained herein shall be deemed to create I liability upon Landlord for any damage to motor vehicles customers or employees or for loss of property from within s motor vehicles, unless caused by the negligence of Landlord, agents, servants or employees. H. Landlord shall also have the right to establish, i from time to time change, alter and amend, and to enforce agai Tenant and the other uses of said common areas such reasonal rules and regulations (including the exclusion of employe, ,parking therefrom) as may be deemed necessary or advisable f the proper and efficient operation and maintemnce of said mmn areas. The rules and regulations herein provided may incluc without limitation, the hours during which the common shall open for use. Landlord may, if in its opinion the same advisable, establish a system or systems of validation or otl type operation, including a system of charges against nc validated parking checks of users, and Terant agrees to confc to and abide by all such rules and regulations in its use and t use of it customsrs and patrons with respect to said automobi parking area, provided, however, that all such rules E regulations and such types of operation or validation of parkj checks and other matters affecting the customers and patrons Tenant shall apply equally and without discrimination to a persons entitled to the use of said automobile parki facili ties. 0 facilities thereof. 0 I. Landlord shall at all times during the term of th Lease have the sole and exclusive control of the common area and may at any time and from time to time during the term here exclude and restrain any person from use or occupancy thereo excepting, however, bona fide customers, patrons and servic suppliers of Tenant, and other Tenants of Landlord who make u of said areas in accordance with the rules and regulatio established by Landlord, the other tenants of Landlord and t other owner of the building to use the same in common wi Tenant, and it shall by the duty of Tenant to keep all of sa areas free and clear of any obstructions created or permitted Temnt or resulting from Temnt's operaticn and to permit the u of any said areas only from normal parking and ingress and egre by the said customer, patrons and service-suppliers to and fr the building occupied by the Tenant and other tenants ( Landlord. J. If in the opinion of Landlord unauthorized persons ai using any of said areas by reason of the presence of Tenant : the premises, Terant, upon demand of Landlord, shall enforce SUI rights against all such unauthorized persons by appropriai a 21 I .proceedings. Nothing herein shall affect the rights of Land1 at any time to remove any such unauthorized persons from s areas or to restrain the use of any said areas by unauthori persons. 0 ART1CLE *O BANKRUPTCY - INSOLVENCY Tenantagrees that in the event all or substantially all Tenant's assets be placed in the hands of a receiver or trust and such receivership or trusteeship continues for a period thirty (30) days, or should Tenant make an assignment for 1 benefit of creditors of be finally adjudicated a bankrupt, should Temnt institute any proceedings urder the Bankruptcy A as the same now exists or under any amendment thereof which n hereafter be enacted, or under any other act relating to t subject of bankruptcy wherein Tenant seeks to be adjudicate( bankrupt, or to be discharged of its debts, or to effect a pl of liquidation, composition or reorga nizati on, or should i involuntary proceeding be filed against Tenant under any SL bankruptcy laws and such proceeding not be removed within nine (90) days thereafter, then ternnt shall be in default under tl Lease, and this Lease or any interest in and to the premiz shall not become an asset in any such proceedings and, in 2 such event and in addition to any and all rights or remedies Landlord hereunder or by law provided, it shall be lawful f Landlord to declare the term hereof ended and to re-enter t premises and take possession thereof and remove all persc therefrom and Tenant shall have no further claim thereon hereunder. The provision of this Article 20 shall also apply any Guarantor of this Lease. 0 AmICLX 21 DEFAULTS BY TENANT A. Should Tenant at any time by in default hereunder wi respect to any rental pyments or other charges payable by Tern hereunder, and should such default contince for a period of fi (5) tays after written notice from Landlord to Temnt; or shou the Tenant be in default in the prompt and full performance any other of its promises, covenants or agreements here contained and should such default or breach of performar: continue for more than a reasonable time (in no event to exce thirty (30) days) after written notice thereof from Landlord tenant specifying the particulars of such default of beach performance; or should Tenant vacate or abandon the premise then Landlord may treat the occurrence for anyone or more of t foregoing events as a breach of this Lease, and in addition any or all other rights or remedies of Landlord hereuhder and the law provided, it shall be at the option of Landlord, witho further notice or demand of any kind to Tenant or any 0th perscn: 0 22 (a) The right of Landlord to declare the term hereof and re-enter the premises and take possession thereof and remove perscns therefrom, and Temnt shall have no further claim ther or thereunder; or (b) The right of Landlord without declaring this Lease en to re-enter the premises and occupy the whole or any part then from and on account of Tenant to collect said rent and any ot rent that may thereafter become payable. (c) The right of Landlord, even though it may have : entered the premises, to thereafter elect to terminate this Le and all of the rights of Tenant in or to the premises. e B. Should Landlord have re-entered the premises under premises mder the provisions of subparagraph (b) above, Landl shall not be deemed to have terminated this lease, or liability of Tenant to pay rent thereafter to accrue, or liability for damges under any of the provisions hereof, by q such re-entry or be any action in unlawful detainer, otherwise, to obtain possession of the premises, unless Landl shall have notified Tenant in writing that it has so elected terminate this lease, and Tenant further covenants that service by Landlord of any notice pursuant to the unlaw: detainer statutes of the State where the building is situated i the surrender of possession pursuant to such notice shall (unless Landlord elects to the contrary at the time of or at i time subsequent to the serving of such notices and such elect be evidenced by written notice to Tenant) be deemed termination of this Lease. In the event of any entry or tak. possession of the prenises as aforesaid, Landlord shall have right, but not the obligation, to remove therefrom all or i part of the personal property located therein and may place same in storags at a public warehouse at the expense and risk t5e owner or owners thereof. 0 C. Should Landlord elect to terminate this lease under i provision of subparagraphs (a) or (c) abve, Landlord may rem from Terant as dmages: (i) the worth at the time of aard of any unpaid rent * had been earned at the time of such termination; plus (ii) the worth at the time of the amount by which unpaid rent which would have been earned after termination un the time of award exceeds the amount of such rental loss ten; proves could have been reasonably avoid ed; plus (iii) The worth at the time of aard of the amount by wh the unpaid rent for the balance of the term after the time award exceeds the amount of such rental loss that Tenant pro' could be reasonably a void ed; plus (iv) any other amount necessary to compensate Landlord a 23 , .all the detriment proximately caused Tenant's failure to perf his obligations uder this Lease or which in the ordinary cot: of things wuld be likely to result therefrom, including, ht limited to any costs of expenses incurred by Landlord maintaining or preserving the premises after such defau preparing the premises for reletting to a new tenant, any rep; or alterations to the premises for such reletting, leas comnission, or any other costs necessary or appropriate to re the premises. (v) at Landlord's election such other amounts in addition or in lieu of the aforegoing as may be permitted from time time by the laws of the State where the building is sitmted. I). As used in subparagraphs (i) and (ii) above, the I'WOI at the time of award" is computed by allowing interest at rate of ten percent ( 10%) per annum. As used in subparagri (iii) above the "worth at the time of award" is computed discounting such amount at the discount rate of the Fedei Reserve Bank nearest to the location of the building at the t of award plus one percent (1%). E. For all purposes of this Article 21, the term ''rex shall be deemed to be the minimum annual rental and all otk sums required to be paid by Tenant pursuant to the terms of tE Lease. All such sums, other than the minimum annual rent? shall be computed on the basis of the average monthly amoL thereof accruing during the immedi ately preceeding sixty (( month period, except that if it kemmes necessary to compute SI rental before such a sixty (60) month period has occurred f3en the basis of the avera9 monthly amount thereof accruing dur: F. In the event of default, all of Tenant's fixture furniture, equipment, improvements additions, a1 terations a other perscnal property, shall remain on the premises and in th event, and continuing during the length of said default, Landlo shall have the right to take the exclusive pcssession of same a to use same, rent or charge free until all defaults are cured c at its option, at any time during the term of this Lease, require Temnt to forthwith rem0 ve same. @ 0 such s'laorter period. G. Notwithstanding any other provisions of this Articl Landlord agrees that if the default complained of, other than fr the payment of monies, is of such a nature that the same cannl be rectified or cured within the thirty (30) day period requiri such rectification or curing as specified in the written noti relating thereto, then such default shall be deemed to b rectified or cured if Tenant within such period of thirty (3 days shall have commenced the recti fication and curing there1 and shall continue thereafter with all due diligence to cauq such rectification and curing and does so complete the same wi the use of such diligence as aforesaid. H. The remedies given to Landlord in this Article shall 1 0 24 ,in addition and supplemental to all other rights or remedies .which Landlord may have urder the laws then in force. I. The waiver by Landlord of any breach of any tern, coverant or condition herein contained shall not be deemed to be 0. waiver of such tern, covenant or condition or any subsequent breach of the same or any other term, covenant or condition herein amtained. The subsequent acceptance of rent heremder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rent. No covenant, term, or condition of this Lease shall be deemed to have been waived by Landlord, unless such waiver be in writing by Landlord. J. Landlord shall have a first and prior lien for the rents and charges herein reserved upon the furniture, fixtures, merchandise, and other personal property owned by Tenant (excluding leased equipment) situated upon the premises, and said items of perscnal property shall not be removed from the premises until said rent and charges are fully paid. tenant agrees to execute such security agreements or financing statements as Landlord may require to properly record its lien in the public remrds, and in the event of default by Tenant in the payment of any sum hereurder, Landlord shall have the right to enforce said lien in the manner provided for foreclosure of security interests under the Uniform Commercial Code. Tenant hereby appoints Landlord as Tenant's attorney-in-fact to file such financing ojtatements* Arficcle 22 DEr"AULT BY LAXDLORD In the event Landlord shall neglect or fail to perform or observe any of the coverants, provisions or conditions contained in this Lease on its part to be performed or observed within thirty (30) days after written notice of default (or if more than thirty (30) days shall be required because of the nature of the default, if Landlord shall fail to proceed diligently to cure such default after notice), then in that event Landlord shall he responsible to Temnt for any and all damges sustained by Terant as a result of Landlord's breac3; further, after such notice Tenant shall have the right to cure any such default at Landlord's expense including in such expenditure all costs and attorneys' fees incurred to cure such default or breach of Lease. tenant shall have no right to terminate this Lease except as herein otherwise speci fically provided. Should Tenant give written notice to the Landlord to correct the default of Landlord, Tenant will give similar notice tothe holder of the mortFge or deed of trust of Landlord, or the lessor of a ground lease with Landlord, and prior to any Lease cancellation, said holder of the first mortgage or deed of trust, and for lessor, e 25 *.shall be given a reascnable period of time to mrrect or rer such default. If and when such holder of the first mortgage deed of trust and/or lessor has made performance on behalf Landlord, the default of Landlord shall be deemed cured. Ten shall have no right to terminate this Lease, except as express @ provided herein. Article 23 EMINENT DOMAIN A. In the event the entire premises shall be appropria or taken under the power of eminent domain by any public quasi-public authority, this Lease shall terminate and expire of the date of such taking, and Tenant shall thereupon released from any liability thereafter accruing hereunder. B. In the event more than twenty-five (25%) of the squ footage of Floor Area of the premises is taken under the power eminent domain by any public or quasi-public authority, or if reason of any appropriation or taking, regardless of the amo so taken, the remaider of the premises is not one undivic parcel of property, either Landlord or Tenant shall have i right to terminate this Lease as of the date Tenant is requi to vacate a portion of the premises upon giving notice in writ: of such election within thirty (30) days after receipt by Ten from landlord of written notice that said premises have been appropriated or taken. In the event of such termination, bc Landlord and Tenant shall thereupon be released from i liability thereafter accruing hereunder. Landlord agrt immediately after learning of any appropriation or taking to g: to Temnt notice in writing thereof. C. If this Lease is not so terminated as set forth ab03 Terant shall remain in that prtion of the premises which shz not have been appropriated or taken, and Landlord agrees, Landlord's cost and expense, to as soon as reasonably possi't restore the premises on the land reinaining to a mmplete unit like quality an6 character as existed prior to such appropriat. or taking (except that the premises will be reduced in size affected by the cordemnation); and thereafter the minimum ann1 rental provided for in Article 1 hereof shall be reduced on equitable basis, taking into account the relative value of t portion t&en as compared to the portion remaining. 0 D. Landlord shall be entitled to the entire award compensation in such proceedings, but the rent and other char( for the last month of Tenant's occupancy shall be prorated 2 Landlord agrees to refund to Tenant any rent or other char< paid in advance. Tenant's right to receive compensation i damages for its fixtures and personal property shall not affected in any manner hereby. Tenant shall be entitled pursue any remedy it may have against the condemning authori for a "displaced person" pursuant to California Government Cc Section 7262 or for loss of business goodwill pursuant a 26 *California Cde of Civil Procedure Section 1263.510. E. For the purposes of this Article 25, a voluntary s or conveyance in lieu of condemnation, but under the threat condemnation, shall be deemed an appropriation or taking un the pwer of eminent domain. Article 24 ATTORNEY'S FEES 0 In the event that at any time during the term of this Le either Landlord or Tenant shall institute any action proceeding aginst the other relating to the provisions of t lease, or any default hereunder, then, and in that event, t unsuccessful party in such action or proceeding agrees reimburse the successful party for the reasonable expenses attorney's fees and disbursements incurred therein by successful party. Further, in the event Landlord is made party to any litigation by reason of the use or occupancy of t premises by Tenant or Tenant's employees, agents or guest without fault by Landlord, Tenant shall reimburse Landlord f 211 of Landlord's attorneys fees and costs of litigati incurred therein. Article 25 SXE OF PREMISES BY LANDLORD In the event of any sale or exchange of the premises Landlord and assignment by Landlord of this Lease, Landlord sh be and is hereby entirely freed and relieved of all liabil under any and all of its averants and obligations contained or derived from this lease arising out of any act, occurrence mission relating to the premises or this Lease occurring af the consummation of such sale or exchange and assignment. Article 26 SUB0 RDI HAT ICN , ATTORNMENT @ A. Upon written request of Landlord, or any fi mortgagee or beneficiary of a first deed of trust of Landlc Tenant wi 11 in writing subordinate its rights hereunder to interest of any ground lessor of the land upon which the premi are situated, as well as to the lien of any first mortgage first deed of trust, now or hereafter in force against the 1 and building of which the premises are a part, and to advances made or hereafter to be made upon the security there Notwithst anding the foregoing, in the event any proceedings brought for foreclosure, or in the event of the exercise of power of sale under any mortgage or deed of trust made Landlord covering the premises, Tenant shall at the request any purchaser at any such sale attorn to the purchaser recognize such purchaser as the Landlord uder this Lease. a 27 6' B. Within ten (10) days after written request therefore Landlord, or in the event that upon any sale, assignment hypothecation of the premises or the land theremder by Landlc an offset statement shall be required from Temnt, Temnt agr to deliver in recordable form a certificate addressed to any s proposed mortgagee or purchaser or to the Landlord certify that this Lease is in.ful1 force and effect (if such be case), there are no defenses or offsets thereto or stating th claimed by Tenant, and setting forth such other matters reasonably requested by Landlord or such propos ed mortgagee purchaser, including kat not limited to those items set forth Exhibit "E" hereto. C. Upon Landlord's request, Tenant shall modify this Le in acmrdance with the requirements of a mortsgee or benefici of a first deed of trust of Landlord provided such modificat does not (i) increase the net rent or additional rent, (i alter the term of any renewal term or (iii) materially advers affect Tenant's leasehold estate or (iv) change, alter preclude Terant's continued uses, utilization and operations the premises, the right to such us e being expressly granted Tenant as set forth in this Lease. D. The lessor under any ground lease for the 1 urderlying the prenis es shall be a third party beneficiary this Lease, with a right to enforce preinises shall be a th party beneficiary of this Lease, with a right to enforce t Lease acjainst Tenant. If at any time said lessor shall acqu the rights of Landlord under this Lease, "Tenant shall attorn said lessor or its nominee as Landlord cnder this Lease. 0 Article 27 QUIET POSSE SSICN Landlord agrees that Tenant upon paying the rent performing the coverants and conditions of this Lease may quie have, hold and enjoy the premises during the term hereof or extension thereof. Article 28 LANDLORD'S RIGHT OF ERTRY Tenant agrees to permit Landlord and its authori representatives to enter the premises at all times during us business hours for the purpose of inspecting the same. Ten further covenants and agrees that Landlord may go upon premises and make any necessary repairs to the premises perform any work therein which may be necessary to comply w any laws, ordinances, rules or regulations of any pub authority or of the Insurance Services Office or of any simi body or that Landlord may deem necessary to prevent waste deterioraticn in connection with the premises if the Ternnt d not make or cause such repairs to be made or performed or ca e 20 I' 'such work to be performed promptly after receipt of writ demand from Landlord. Nothing herein contained shall imply duty m the part of Landlord to do any such wrk which under provision of this Lease Tenant may be required to do, nor sh; it constitute for the faithful performance by Tenant of all the terms of this Lease by said Tenant to be observed l performed. The security deposit shall not be mortgagi assigned, transferred or encumbered by Temnt without the writ consent of Landlord and any such act cn the part of Tenant sh be without force and effect and shall not be binding u L a ndl or d . 0 B. If any of the rents herein reserved or any other ptyaSle by Tenant to Landlord shall be overdue and unpaid should Landlord make payments on behalf of the Tenant, or Ten shall fail to perform any of the terms of this Lease, t Landlord may, at its option and without prejudice to any ot remedy which Landlord may have on account thereof, appropri and apply said entire deposit or so much thereof as may necessary to compensate Landlord toward the pyment of rent additional rent or loss or damage sustained by Landlord due such breach on the part of Tenant; and Tenant shall forthw upon demand restore said security to the original sum depcsii Should Tenant coinply with all of s aid terms and promptly pay , of the rentals as they fall due and all other sums payable Tenant to Landlord, said deposit shall be returned in full Tenant at the end of the term. C. In the event of bankruptcy or other debtor-credi proceedings against Temnt, such security deposit shall be dee to be applied first to the payment of rent and other charges Landlord for all periods prior to filing of such proceedings. D. Landlord may deliver the funds depcsited heremder Temnt to the purchaser of Landlord's interest in the premises the event that such interest be sold and thereupon Landlord sh be discharged from any further liability with respect to s deposit, and this provision shall also apply to any subsequ transferees . ARTICLE 29 MISCELLANEOUS o A. It is agreed that nothing obtained in this Lease sh be deemed or construed as creating a partnership or joint vent between Landlord and Tenant or between Landlord and any ot party, or cause Landlord to be responsible in any way for debts or obliqtions of Tenant, or any other prty. It is agreed that if any provision of this Lease sh be determined to be void by any court of mmpetent jurisdict: then such determination shall not affect any other provisior this Lease and all such other provisions shall remain in f force and effect; and it is the intention of the par ties her B. 29 e ,' *that if any provision of this Lease is capable of i constructions, one of which would render the pmvision void ( the other of which wuld render the provisions valid, then provision shall have the meaning which reders it valid. C. In the event Temnt heremder shall be a corporation, parties executing this Lease on behalf of temnt hereby ccnven and warrant that tenant is a duly qualified corporation and z steps have been taken prior to the date hereof to qualify Ten to do business in the State where the building is situated; z franchise and corporate taxes have been paid to date: and ; future forms, reports fees and other documents necessary comply withapplicable laws will be filed when due. D. It is understood that there are no oral agreemei between the parties hereto affecting this Lease , and this Le supersedes and cancels any and all previous negotiatio arrangements, brochures, agreements and understandings, if a between the parties hereto or displayed by Landlord to Ten; with respect to the subject matter thereof, and none therc shall be used to interpret or construe this Lease. E. Landlord reserves the absolute right to effect SI other tenancies in the building as Landlord, in the exercise its sole business judgment, shall determine to best promote interest of the building. Temnt does not rely cn the fact, does Landlord represent, that any specific tenant or number tenants shall during the term of this Lease occupy any space the building. This Lease is and shall be considered to be . only agreement between the parties hereto and thc representative and agents. All negotiations and oral agreeme acceptable to both parties have been merge into and are inclu herein. There are no other representatives or warranties betw the parties and all reliance with respect to representations solely upon the representations and agreements obtained in t document . 0 F. The laws of the State where the building is situat shall govern the validity, performance and enforcements of t Lease. Although the printed provisions of this Lease were & by Landlord, this lease shall not be construed either for against Landlord or Tenant, ht this Lease shall be interpre in acardance with the pneral tenor of the langmge in an effl to reach and equitable result. G. A waiver of any breach or default shall not be a wai of any other breach or default. Landlord's consent to, approval of, any act by Tenant requiring Landlord's consent approval shall not be deemed to waive or render unnecess( Landlord's consent to or approval of any subsequent similar by temnt. H. Any prevention, delay or stoppage due to stri: lockouts, labor disputes, acts of God, inability to obtain la or materials or reasonzble substi tutes therefor, governmeni e 30 a testricticns, governmental xtion, civil ammotion, fire or of casualty, and other causes beyond the reasomble control of party oblipted to perform, shall excuse the performance by$ party for a period equal to any such prevention, delay stoppage, except the obligations imposed with reprd to ren and other charges to be paid by Temnt pursuant to this Lease I. Tenant hereby expressly waives any and all right rdemption granted by or under any present or future laws in event of Tenant being evicted or dispossessed for any cause in the event of Landlord obtaining possession of the premises reason of the violation by Tenant of any of the covenants conditions of this Lease or otherwise. The rights giver Landlord herein are in addition to any rights that may be gi to Landlord by any stature or otherwise. J. The voluntary or other surrender or termination of i Lease by Tenant, or the acquisition by Landlord of Tena rights under this Lease, shall not work a merger with Landlord's express written agreement to such a merger; an( Landlord's option, any such events shall operate as an assign] to Landlord of any and all subleases or subtenancies of Tel for the premises. K. If Tenant remains in possession of the premises or part thereof after the expiration of the term hereof, E occupancy shall be tenancy from month to month at a rental in amount, ' unless otherwise expressly speci fies in wri tins Landlord, equal to 150% of the rent for the last month of term of this Lease, plus all other charges payable hereunder, u-m all terms hereof applicable to a month to month tenancy. L. Tine is of the essence in the performance of obligat @ mder this Lease. Ar ticle 30 "E'ORCE MAJEURE" In the event a delay arising from "force majeure" should af Landlord's obligation to construct the premises, Landlord SI be granted a rascnable extension of time beyond the agreed completion date to remedy the problem and complete construc of the premises. CX3KTINGENCIES The final consummation and commencement of this lea$ contingent upon the following: 1. Landlord's ability to obtain construction finan equal to 758 of the project cost from an institutional lende "market rate" interest rates. Landlord shall noti fy tenan writing within 90 days of the execution of this lease landlords ability or inability to obtain such financing. I a 31 . anticipated that First Interstate Bank will be the constructi lender for this project. Tenant agrees to cooperate fully wi First Interstate Bank providing financial information on tena and other information that might be required by First Intersta Bank for the obtaining for the construction financing. 2. Plans and Specifications - Preliminary plans for ti building and the site plan for the location of the buildii within the Educational park are attached to this lease ai approved by both landlord and tenant. Within 45 days from t execution of this lease landlord shall provide tenant detail plans, schematics and specifications which wil 1 identify ai describe in more detail this building. These prelimina drawings shall be subject to the approval of tenant in writir within 14 days after date of receipt thereof. Subsequent to th approval landlord shall prepare the final plans a specifications for submittal to the Carl sbad Building Departmer These final plans and specifications shall also be approved disapproved by tenant within 14 days of date or receipt therec Landlord shall pay a1 1 costs of preparing plans a specifications. Once final plans are approved by Landlord a Tenant, the Landlord's architect shal 1 calculate actual squa footage to be utilized by Tenant by using BOMA full-buildi approved standards. This square footage shall be used calculating rental described in Article 5 hereof. The exa square footage shall be approved by Tenant. IN WITNESS WHEREOF, the Landlord and Tenant have duly execut this Lease on the day and year first above written. If Tenant shall be a corporation, the authorized officers must sign on behalf of the corporation. The By : Lease must be executed by the LANDLORD president or vice-president and the secretary or assistant secretary, unless the by-laws or a resolution of the board of directors shall the by-laws or a certified copy of the resolution, as the case may be, By : appropriate corporate seal must be affixed. 0 otherwise provide, in which event, By : must be furnished. - Also, the TEmKNf a ,* EXHIBIT B m @ Q;AREMoppT PICKENHA COLLEGE DESCRIPTION - OF PREMISES - That certain space in Batiqui tos Lagoon Educational Park, IC in the City of Carlsbad, County of San Diego, St&e of Calif containing approximately 2,000 square feet of flcor area. USE OF PREMISES -- - Terant may use the premises only for educational operat These operations may include undergraduate and grac institutions; offices for admissions placement, registra faculty and accounting; conference roons, classrc laboratories, libraries, and auditoriums; student ser v including commons , bookst ore, and caf et eri a. o a .' ,* EXHIBIT "C" DESCRIPTION OF LANDLORD'S WORK AND TENANT'S WORK - -- - 0 1. LANDLORD'S WORK Landlord shall construct the leased premises at Landlord sole cost and expense to the extent shown below: a) ancrete slab floor and insulated roof b) front and rear walls as per Landlord's plans * c) doors as pr Landlords's plam * d) sewer and water stubbed to the tenant's leased premises e) electric service and tele&one to the building f) heating and air conditioning mechanical equipment unj placed on roofs g) paving and lighting as per Landlord's plars h) exterior building shell exterior walls i) me basic washroom equipped with toilet, grab bar, si mirror, light, exhaust fan, ceiling, and walls 0 2. TE3APE"S WORK Tenant will be given $20.00 per square foot ten improvement allowance. If entire allowance is not us Tenant may apply the unused portion to offset ren payments. Temnt, at Tenant's sole cost and expense shall responsible for the cost of the following and any work sped fically set forth urder Landlord's wrk: j) all signs k) trade fixtures 1) distribution of heating and air-conditicning m) all electric wiring, outlets, lighting, switches, circuit breakers n) suspended ceiling 0) sprinkler heads and installation p) utility meters and installation a b* q) r) one half the cost of interior demising walls betwe all interior partitiming, locks, har&are, and paint temnts e s) floor coverings and paint All Tenant's work will be performed by Landlord as gener contractor at its' costs plus 15% for overhead and profit. LAEDLORD IS IiqT IALS TE3GINTS INITIALS e a b EXHIBIT "D" e GUARANTEE OF LEASE WHEREAS, a certain Lease of even date herewith has beer will be, executed by and between Batiqui tos Bluff, thereir herein referred to as "Landlord", and Claremont McKenna Col therein referrad to as "Terant", mvering certain premises ir City of Carlsbad, County of San Diego, St&@ of California; z WHEREAS, Landlord under said Lease requires as a conditj its execution of said Lease that the undersigned guarante full performance of the obligations of Tenant under said I a nd WHEREAS, the undersigned is desirous that Landlord e NOW, THEREFORE, in cons iderati on of the execution of into said Lease with Terant, Lease by Landlord, the undersigned hereby uncondi tion guarantees the full performance of each and all of the tc covenants and conditions of said Lease to be kept and perfc by Tenant, including the payment of all rentals and other ch< to accrue'thereurder. The undersigned further agrees as fol: 1. This Guarantee shall cpntinue in favor of Land notwithstanding any extension, modi fication, or a1 teratit said Lease entered into by and between the parties theretc their successors or assigns, or notwithstanding any assignmei said Lease, with or without the ccnsent of said Landlord, ai extension, modi fication, alteration or assignment of said 1 shall in any manner release or discharge the undersigned an( udersigned does hereby consent thereto. 2. This Guarantee will continue unchanged by any knkr reorganization or insolvency of Tenant or any successo assignee thereof or by any disaffirmance or abandonment trustee of Tenant. 3. Landlord may, without notice assign this Guarantt whole or in part and no assignment or transfer of said I shall operate to extinguish or diminish the liability of undersigned hereunder. 4. The liability of the undersigned under this Guar shall be primary: and in any right of action which shall ac to Landlord under said Lease, Landlord may, at its option, p against the undersigned without having commenced any actior having obtained any judgment agil inst Tenant. a L I Exhibit " D" Page 2 5. The undersigned shall pay Landlord's reasona attorneys' fees and all costs and other expens es incurred if mllection or attempted collection or in any n=gotiatims relat to the obligations hereby guaranteed or enforcing this Guarant 6. The undersigned does hereby waive notice of any dem by Landlord, as well as any notice of default in the payment rent or any other amounts contained or reserved in said Lease. The use of the singular herein shall include the plu The obliFtion of two or more parties shall be joint and seve The terms and provisions of this Guarantee shall be binding and inure to the benefit of the respective successors and ass of the parties herein named. IN WITNESS WHEREOF, the undersigned has caused this Guar: to be executed as of the date set forth on gage 1 of this Lea: a 7. If Guarantor shall be a - corpora ti on, the author i zed officers must sign on behalf of the corporation. This Guarantee must be executed by th e president or vi ce-pr e siden t and the secretary or assistant Address: secretary, unless the by- laws or a resolution of the board of directors shall otherwise by-laws or a certified copy of t'ne resolution, as the case may be, must be furnished. Also, -7- the appropriate corporation seal must be affixed. @ provide, in which event, the *r a a EM I B IT I' E I' e TENANT'S ESTOPPEL - CERTIFICATE Date: At t en t i on : Re : The undersigned, as Tenant under that certain Lease (t "Lease") for the ab ve referenced premises (the "Premises") dat Landlord, hereby cer ti fies that: I 19 , made with Batiquitos Bluff a. All work to the Premises has been completed and the and the Premises are accepted as satisfactory; b. Tenant is in full and mmplete possession of the Premj and is fully occupying the same and conducting its busin there from ; c. Rent under the Lease commenced to accrue ? 19 , and has been paid through the datc , 19- t and no rent credits or other offsc have been given by Landlord or taken by Temnt; e d. The current rent due under the Lease is equal Dollars ($ ) per month; e. The Lease is in full force and effect and has not 1 anended, modi fied or suspended other than by amendments d, - - I 19 , and the present term of the Lt f. Tenant has not advanced any amounts to or on behall Landlord under the Lease, for which advance it has not 1 r eimbur s ed ; e xpi res I 19 I g. Tenant holds no claim agiinst Landlord which might be h. Tenant has not sublet the Premises or any portion the off against accruing rentals; nor has Temnt assigned the Lease or any portion thereof; and 0 s -, ’ Exhibit E Page 2 0 j. Tenant understands that will materially rely on the statements made herein. ‘I undersigned acknowledges and agrees that the statements mz herein are true and complete and may be relied upon and its successors and assigns. ( Att ach Not ar y Ac know1 edgnent ) a 0 . * EXHIBIT F 0 OPTION TO EXTEND TERM OPTION TO EXTEND LEASE. A. Temnt is hereby granted successive options to extend term of this Lease, on all of the provisions contained herei for 2 periods of 5 years each (each such period hereinaft referred to as "extended term") following the expiration of t initial term or of the immediately preceding extended term, the case may be. Each such option is to be exercised by givi written notice of exercise of the option exercised ("Opti Notice") to Landlord at least six months, but not more than c year, before the expiration of the initial term or of t immediately preceding extended term, as the case may 1 provided, however, that in any of the following events, t extended term shall not commence and this Lease shall expire the end of the initial term or at the end of the immediate preceding extended term, as the case may be: (i) if Tenant is default on the date of giving the Option Notice, the Opt: Notice shall be totally ineffective; (ii) if Tenant is default on the date the respective exterded term is to ammen (iii) if any assignee or sublessee other than a successor Tenant as defined in Section 18.B. is in possession of premises on the date of giving the Option Notice, the Opt Notice shall be totally ineffective; or (iv) if any assignee sublessee other than a successor of Tenant as defined in Sect 18.B. is in possession of the premise on the date the respect extended term is to commence. Tenant shall have not other rj to extend the term of this Lease. 0 B. The Amount of the Base Monthly Rental for each exter term shall be the greater of (i) the amount of Base Mont Rental for the year immediately preceding the ammencement of respective exterded term, adjusted as of the commencement of ! extended term and adjusted annually during the extended tern reflect change in the cost of living as is set forth in Secl 8, or (ii) the then prevailing rate of Base Mcnthly Rental b( charged by Landlord as of the commencement of the respect extended term for comparable space in the immediate vicinit] which the premises are a part, which Base Monthly rental sk! thereafter be adjusted annually to reflect change in the cos living as is set forth in Section 8. a I OPERATIONS AGREEMENT FOR * CHAPMAN COLLEGE This agreement is made this 5- day of November, 198( between Chapman Col 1 ege (Chapman Cal ifornia Non-profi Corporation, and Sammis Properties (Sammis) a Cal iforni Corporation who agree as fol lows: 1. RECITALS: a. Sammis is developing a project in the City ( Carlsbad known as the Batiquitos Lagoon Educational Park. One ( the primary components is the educational complex comprised ( several individual educational enti ties which are separate ai distinct entities governed by their own governing board ( trustees and administered by officers named by their board. 6. Chapman is a distinguished private college offerir qual ity 1 iberal arts education. Chapman pl ans to establ i several educational activities at Bati qui tos. These acti vi ti shall include: (1) a Pacific Rim Center which would be a degr granting program offering education in training of students the culture, 1 anguage, historic, economic and busine environment of the nations of the Pacific Basin; (2) semina and non-degree granting programs designed to prepare individua 0 in business, government, and education for interaction a communication with the counterparts in the nations of t Pacific; and (3) additional degree granting programs education, business and land use and real estate. c. Sammis has invited Chapman to Pelocatep educational activities to the Batiquitos Campus. Chapman h discussed this proposal and has agreed to make this move. 5;f NOW, THEREFORE, in consideration of the mutual covenar contained herein and incorporated in the recitals set forth abc the parties agree as follows: 1. Sammis agrees to construct a 70,000 square foot build- at the Batiquitos Campus. Sammis will provide 30,000 square f( in a separate wing of this buil ding for use by Chapman. In t initial start up operation, Chapman will occupy 10,000 SqUi feet of space and wil 1 increase to 30,000 square feet as nee( during the term of the lease. The quarters that Chapman wi occupy wil 1 be constructed by Sammis Properties in consul tat with Chapman. The terms for the occupancy by Chapman of tl building are described in that certain lease, a copy of which attached. The parties understand that the lease must be revie' and approved by the Board of Trustees of Chapman. * t 2. Chapman agrees to operate a high quality educationa program which wil 1 be independent and total ly autonomous frc the other educational enti ties 1 ocated at the Batiquitos Compl e Chapman will be free to exercise a1 1 academic powers ai responsibi 1 i ty re1 ated to its operations. Chapman's operatio will utilize the services of a number of faculty and staff wl will be resident at the Batiquitos site and other faculty a, staff who wil 7 be ful 1-time on the Chapman campus and who wil come to Batiquitos to engage in various educational activities. 3. Chapman agrees to participate in the governance of t Batiquitos Campus, a summary of which is attached, participating on the advisory council. Chapman further agrees participate in interdisciplinary programs by making i curriculum available to students from other colleges, and whe appropriate, to encourage its students to take advantage classes and programs offered by other educational enti ties. 4. This agreement may not be assigned. 5. The parties understand that this building has not y been approved by the City of Carlsbad and that this agreement conditioned upon the construction of the bui 1 di ng. agreement on the day and year first above written. In witness whereof, the parties hereto have executed th a SAMM IS PROPERT I ES CHAPMAN COLLEGE --c- 7&P y BY: UGSy\S ----- BY: --- hLLLL 5 B,uck Smith Dona1 d FTSGmi s President Sammis Properties Chapman Coll ege x -f res i den t a .- a BAT IQUIT OS CO RPORAT ION GOVERMNCE OCTOBER 28, 1986 OWNERSHIP OF LAND The land at Batiquitos Will be owned by a corporation knot. the Batiquitos Corporation. It will be governed by a chai and a Board of Trustees. FEDERX CCNST ITUI’I ON The Board will create a Federal constitution under w iridividual educational enti ties will retain their self-govei authority. The Batiquitos Corporation will %point a president to ac liaison between the Batiqui tos Corpratiw. and the self-govei ducational enti ties. ADVISORY COUNCIL The President shall convene an Advisory Council composed representative from each of the approved educational enti resident at the Batiquitos site, the President, ar,d an appoi of the Mayor of Carlsbad. The Advisory Council will mee regular intervals and address issues relating to the ove administration of the educational enterprise, relations bet egti ties, provision of services, and Wi 11 make recoinmendati or the Batiqui tos Corpration Board regarding enti ties operatin cornternplating operat ion. a INDIVIDUAL EDUCATIONAL EhTITIES Each of the individual educational entities Will be separa incorporated, governed by a Board of Trustees of its own, administered by officers named by its own Board. The individual educational entities will exercise all acd and administrative powers and respons ibiliti es relating to t operations . a -. 8P.T IQVITGS a0 WOW ION GOVERKANCE page 2 TERMINAT ICN OF RELlrYT ICN S WIT H EWCAT ICNAL EiW IT IES a Termination of relations with any of the individual educatior entities operating at Batiquitcs Will occur as a result of a th thirds vote of the Board of the Batiquitos Corporatic cmtinge~t on prior lease agreeinents. a e LEASE e@c BAT IQU ITOS LAGOON EDUCAT I ONAL PARK In ansideration of the rents and covenants hereinafter set forth, Landlord hereby leases to Temnt, and Terant hereby rents from Landlord, the following described premises upon the following terms and conditions: a Article 1 FUNDANEiUTAL LEASE PROVISICNS: A. Date: B. Landlord: Batiquitos Bluff, a California Limited Partnership. C. Terant: Chapman College, a California Non-Profit Corpration. D. Tenant's (Article 7 and Trade Na.2 : Chapman College Exhibi t "B" } E. ?remises: (Article 3 anc Exhibit "B" ; ApproximatsLy 30,000 square feet of space in the BuiLding One, Batiquitos Lagocn Educational Park building loczked at 4000 Windrose Circle, Carlsbad, Calif. F. Lease Tern: Ten years (10 yers) (Article 4) G. Co?w.?ncenent of Term: (.u ticle 4) Preaises are leased subject to completion of work by Landlord, with tern commencing upon such completion or when Tenant opes for bsiness, which ever occurs earlier. H. Xinimurn F.r^?ual Rental: FIVE HUNDRED FORTY THOUSAND (Lrticle 5 Doliars ($54Q,GOO) Fer annuli, payable in twelve (12) equal monthly installments during each year, subject t rental djustnent every 1 year of the lease tern, with 19E as the base year. Rent is $1.50 per square foot per mont'l- triple net. I. Cosc of Living Adjustment: C.P.I. annually 4% max. J. Rental De?osit: N.A. (Article SA) K. Percentage Rental: N.A. percent ( %) (Article SC) L. Address for Notices: -- -- 1 e <' x. To Landlord: Batiquitos Bluffs 2650 Camino del Rio North, Suite 100 San Diego, CA 92108 0 N. To Tenant: To the premises and 333 North Glassell St. (Art Orange, CA 92666 0. Security Deposit: N.A. (f~ ticle Dollars ($ N.A. ). References in this Article 1 to other articles are convenience and designate some of the other Articles wht references to the par ti cular Fundamental Lease Provisions appe Each reference in this Lease to any of the Fundamental Le; Provisions contained in this Article 1 shall be constructed inarprate a11 of the term provided urder each such Fundament Lease Provision. In the event of any conflict between i Fundamental Lease Provision and the balance of the Lease, 1 Iat ter shall mntrol. ~ticle 2 EXHIBTI'S The following drawings aEd special provisions are attaci hereto as exhibits and. made a part of this Lease: EXZiBIT "A" - General site plan of an integrzted buildj 0 which Landlord and others intend to construct or cause to constructed on real property located in the City, County i State described in Exhibit "B" and more particularly shown Exhibit "A", hereinafter referred to as the "Building". S; site plan shows, among other things, the principal improvemei which Will amprise said Building. Tenant acknowledges thst 1 site plan shownon Exhibit "A" is tentative and that LanZlord a change the shape, size, location, number ar?d extent of t improvements shotm thereon and eliminate or add any inprovenel to any portion of the Building, provided that Landlord shall I change the size or location of the premises without Tenan con ser.t. EXHIBIT "B" - Description of the premises, authorized t and Temnt's trade name. EXHIBIT "C" - Description of work to be performed Landlord and by Tenant in or on the premises. EXHIBIT "D' - Guarantee of Lease. EXHIBIT "E" - Te rant's Estoppel Cer ti ficate EXHIBIT "F" - Addendum or Rider 2 a \ EXHIBIT "G" - Option to Extend Term ~ticle 3 e pREIYISES LaRdlord hereby leases and demises unto Tenant and Tenant hereby leases and takes from Landlord, for the term, at the rental, and upon the covenants and conditions hereinafter set forth, the commercial space referred to herein as the "premises", and described on Exhibit "B" attached hereto and made a part hereof. The premises shall be constructed in accordance with the procedures outlined in Exhibit 'IC" attached hereto and made i part hereof. Article 4 TERM A. The tern of this Lease shall begin as of the dat specified in Article 1 hereof, and shall continue thereafte during the Lease Tern specified in Article 1 hereof, unles sooner tersi nat ed as hereinafter provided in this Lease. B. If the prernises are leased subject to completion of wor by Landlord, Lacdlord agrees to deliver to Tenant, and Tenan agrees to accept from Landlord, possession of the premise forthwith ugon substantial completion of the premises a descriS=d in Ex3ibit '*C" hereof. The term "substantia comgletior! of the premises" is defined as the date LEndlor noti fie Texnt that the premises are substarkially con?plete t the extent or' Landlord's hbrk as speci fi ed in Exhibit "C", to ti point wherein Tsnant's con tractor may commence the constructic of Tenanc's Work, if any, as specified in Eshibit "C' Certi fication by Landlord's architect ("Project Archi tect") c the substantial completion of the premises in accordance wit said Exhibit 'IC" shall be conclusive ad binding upon the partic hereto. Terant shall comiience the construction of Temnt's Wor' if any, as described in Exbibit 'IC" hereof promptly upc substantid completion and shall open the premisss for businer uoon such cornF1etion. In the event the ten of this Lease h, Rot connenced within three (3) years from the date hereof, th: this Lease shall terninate as of said date ar?d each of t: parties hereto shall be released from any further obligati( hereuqder. 0 C. Within ten (10) days after Tenant opens for busines Tenant will execute and deliver to Landlord a certifica substantially in the forin attached hereto, marked Exhibit "E" a made a part hereof, indicating thereon any exceptions there which may exist at that time. Failure of Tenant to execute a deliver such certificate shall constitute an acceptance of t premises and acknowledgment by Tenant that the statemen included. in Exhibit "E" are true and correct, without exceptio. TO the extent Tenant has possession or occupancy of any porti a 3 \ of the premises prior to the commencement of the term of this Lease, for any reason whatsoever (e.g., for Tenant to install tenant fixtures or improvements), all obligations under this Lease (par titularly the obligation to maintain liability insurance) shall commence as of the date of such possession or o~cupncy, excepting only the obligation to pay minimum annual rent shall not commence. D. TO the extent Tenant has possession or occupancy of any portion of the premises prior to the commencement of the term of this Lease, for any reason whatsoever (e.g., for Tenant to install terant fixtures or improvements), all obligations under this Lease (particularly the obligation to maintain liability insurance) shall commence as of the date of such possession or occupancy, excepting only the obligation to pay minimum annual rent shall not commence. Article 5 REXTAL AND TAXES a The Tenant agrees to pay as rental for the use and occupancq of the prexises, at the times and in the manner hereinafter providd, the following sum of money: A. NINIMUN ANXUAL RENTAL. The minimum rental specified ir Article 1 here shall be payable in twelve (12) equal monthl: installments during each year, in advance, on the first day 0' each calendar month Wi thout setoff or deduction with thc ccn.mencexsnc of the tern of this Lease. Shoulti the rental perioc cominence on a day of the month other than the first day of sucl @ month, then the rental for the first fractional month shall b< computed on a daily basis for the period from the date o comnencenent to the end of such calendar month and at an amoun equal to one-three hundred sixtieth (1/360) of the said minimu arx-iual rental for each such day, and thereafter shall be computet ad &aid as aforesaid. With the execution of this Lease, Tenan k pying to Landlord a rental Deposit, as defined in Article 1 as an advanct on the first to become due minimum annual rent. A the end of ezch 12 month period of this Lease, the minimurn annua rental shall be increased by a percentase equal to the percentag increase fron the base period of the Consumer Price Index for a1 Urban Consumers, all items, California, published by the Bur- of Ubor Statistics, U.S. Department of Labor. Said Index fc the calendar year designated in Article lH, shall be considere the "base period." In no event shall said minimum annual renta be less than the sum then in effect for the preceding 12 monk period. If any time there shall not exist said Consumer Pric Index, the psrties shall substitute any official index publisht by the Bureau of Labor Statistics, or successor or simil; government agency, as may then be in existence and shall be ma nearly equivalent thereto. If the parties shall be unable 1 agree upon a successor index, the parties shall refer the chi( of a successor irdex to arbitration in acmrdance with the rul of the American Arbitration Association. It is the intent ( 4 e this provision that the foregoing rental a3justment procedures shall occur effective as of the first day of themonth of each 12 month period during this Lease term. B. TAXES (1) Throughout the term of this Lease, Tenant agrees tc py to Landlord, as additional rent, the amount of taxes anc assessments levied and assessed for any such year upon tht premises and the urderlying realty. Such additional rent for an!, partial year of the tern hereof shall be prorated on a time basis. Payment shall be made by Tenant within thirty (30) day: after receipt of a written statement from Landlord setting fortl the amount of such tax. (2) The term "Floor Area", as used throughout this Least shall be deemed to mean and include all areas for the exclusiv use and occupancy by tenants or subtenants of Landlord, measure from the exterior surface of exterior walls (and froin th extensions thereof, in the case of openings) and fron the cenke of interior demising partitions, including mezzanines warehousing or storage areas, clerical or office areas an employee areas. e (3) In the event the premises and underlying realty ar Rot separately assessed but are part of a larger parcel fo assessment purposes (hereinafter referred to as the "large parcel"), "taxes and assessments levied and assessed upon ti. presises ar.d the underlying realty" shall mean a fraction2 prtion of said taxes and assessments on the larger parts (excluding taxes apt! assessments a-- any commcn areas thereot) ti. 0 numerator of which shall be the Floor Area of the premises ar denominator of which shall be the Floor Area of all the are; available for exclusive use and occupancy by tenants of tl larger prcel, whether cr Rot ackually occupied acd open for business, provided that Ea equitable adjustnent shall be mde fc buildizgs which are only partially completed on the date sucl taxes and assessments become a lien. With re59ect to a' assessments which nay be levid a9ins.t or upon tke premises a the urdsrlying realty, or which urder the laws then enforce m be evidenced by improvenent or other bonds, or may be paid annual installments, only the amount of such annual installmen (with appropriate proration for any partial year) an2 stettutor interest shall be included within the computation of the annu taxes and assessments levied against the premises and t urderlying realty. (4) If at any time during the Lease Term under the laws the United States Government, State, County, or City or a political subdivision thereof in which the premises are situatf a tax or excise on rent or any other tax however described levied or assessed by any such political body, apinst Landlc on accomt of rentals payable to landlord hereunder, such tax excise shall be considered "taxes" for the proposes of tV Article 5B, excluding, however, from such tax or excise a a 5 general income taxes, gift taxes, inheritance taxes and estate taxes. The term "taxes" shall also include possessory interest taxes levied in lieu of real property taxes. e Artic1e 6 TIMING OF OCCUPANCY The schedule for completion of the facilities is as follows: 1. Execution of lease November 1, 1986. 2. Completion of detailed preliminary plans and speci fications - December 15, 1986. 3. Completion of final plars and specifications - January 1987. 4. Coinmenceinent of mnstruction - February 15, 1987. 5. Completion of prenises and occupancy - September 15, 1987. AX'I'ICLE 7 POSSZSSICN AXD US2 A. Elossession of the premises shall be delivered to Teran frez and clear of all tenants and occupants and the rights eit:?er, 3rd also free of lie.= and encumbrances, except those as Terant shall use t' prenises solely for the purposes and under the trade nam specified in Exhibit "B" attached hereto. Tenant shall not us Or permit the prenises to be used for any other purpose o purposes or under any other trade naine whatsoever without th mitten ccnsent of Landlord first had and obtained. Tenant shal not, without the prior consent of Landlord, sell merchandise fro ver?ding machines or allow any coin operated vending or Fmin machines on the premises. During said term the prexises, and every part LLhereof, shall be kept by Tenant in a clean an wholesome condition, free of any objectiorable noises, odors c nuisances, and that all health and police regulations shall, all respects and at all times, be fully conplied with by Terant. B. Tenant shzll use its best efforts to completed, or caL to be completed, all deliveries, loading, unloading and servic to the premises prior to 1O:OO A.M. of each day. Tenant shal attempt to cause no delivery trucks or other vehicles servicir the premises to prk or stand in front of, or at the rear of, tl premises from 1O:OO A.M. to 9:00 P.M. of each by. The Landloi reserves the right to further regulate the activities of tl Temnt in regard to deliveries and servicing of the premises, ai Tenant agrees to abide by such further non-discriminatox regulations of Landlord . @ my be specified in Article 10 hereof. 6 a C. Tenant shall not do or permit anything to be done in or about the premises nor bring or keep anything therein which is not within the permitted use of the premises which wi 11 in any my increase the existing rate of or affect any fire or other insurance upon the premises or any of its contents, or cause a @ cancellation of any insurance policy covering the building or any part thereof of any of its contents. Tenant shall not do or permit anything to be done in or about the premises which will in any way obstruct or interfere with the rights of other temnts or occupants injure or annoy themor use or allow the premises to be used for any improper, immoral, unlawful or objectionable purpose; nor shall Terant cause, maintain or permit any nuisance in, on or about the premises. Tenant shall not commit or alloh to be corrmitted any waste in or upon the premises. Terant shall not use the premises, or permits anything to be done in or about the premises, which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now ir force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordirances and governmental rules, regulations 01 requiremnts now in force or which may hereafter be in force an( wit3 the requirements of any board of fire underwriters or othei similar bodies now or hereafter constituted relating to 01 affecting the conditions, use or occupancy of the premises excluding structural changes not related to or affected by Tenant's improvements or acts. The judgment of any court o on2etent jurisdiction or the admission of Temnt in any actio against Terant, whether Landlord be a party thereto or not, tha Tsnant hzs violated any law, statue, ordinance or governnenta rule, rsgxlation or requirement, shall be consultsd of that f2c as ktneen the Landlord and Terant. Article 8 UTILE IES SERVICES Tenant agrees, as its own expefise, to pay for all watei gas, pwer, electric current, telephone, and all other similar utilities used by the Tenant on the premise from and itfter ti. delivery of possession thereof by Landlord. If any such chargF arc? not pid when due, Landlord may pay the sane, and any mOUi so paid by Landlord shall thereupon become due to Lzindlord frc Tenant as additional rent. Article 9 IXDEPINITk- - INSLJXANCE - WAIVER OF SUBIIOG.qTICXV A. Tenant averants with Landlord that Landlord shall n be liable for any dainage or liability of any kind or for a injury to or death of person or damge to property of Temnt c any other person during the term of this Lease, from any cau Whatsoever, by reason of the use, occupancy and enjoyment of t premises by Tenant or any perscn therem or holding under Temr and that Tenant will indemnify and save harmless the Landlc 7 a . from all liability whatsoever, on account of any such real or claimed danage or injury and from all liens, claims and ,demnds arising out of the use of the premises and its facilities, or any repairs or alterations which Temnt may make upon said premise, but Tenant shall not be liable for damage or injury occasioned by @ the neglicpnce of Landlord and its designated agents, servants or employees unless covered by insurance Tenant is required to provide. This obligation to irdemni fy shall include reasomble attorneys' fees and investigation costs ad all other reasmable costs, expenses and liabilities from the first notice that any claim or demand is to be made or may be made. B. Landlord and Tenant hereby waive any rights each mal have against the other on account of any loss or damage occasioned to Landlord or Tenant, as the case may be, their respective property, the premises, or its contents or to othei portions of the building arising from any risk covered by fire and extend& coverag= insurance; and the parties each, on behalf of their respective insurance companies insuring the property o either Landlord or Tenant a~i~st any such lcss, waive any right of subrogation that it my have against the Landlord or Tenant as tSe case may be. The foregoing waivers of subrowtion shal: be operative only so long as they do not invalidate any sucl policy. C. Terant further covemnts and agrees that from and afte the Substantial coinpletion of the prenises, Terant will carry an maintain, at its sole cost and expense, the following types o insurance, in the amounts spsci fied any in for form hereinafter pr~vidd for: (i) PUBLIC LIABILITY. Bodily injury liabilit insurance with limits of not less than Five Hundred Thousan Dollars ($5OG,OO0.00) per person and One Million Dollar ($1,000,000.00) per occurrence insuring against any and al liability of the insured with respect to said premises c arising out of the maintsmnce, use or occupncy thereof, at property damage liability insurance with a limited of nc less than Two Hundred Fifty Thousand Dollars ($250,0OO.O( per accident or occurrence. All such bodily injury liabilit insurance and property damage liability insurznce shal specifically insure the performance by Tenant of tl irdennity agreeinent as to liability €or injury to or death ( persons and injury or dainage to property in this Article cont ai n ed . (ii> TNNT IMPROVEILlEhTS. Insurance covering all ' the items specified as "Tenant's Work" in Exhibit "C Tenant's leasehold impro vements, a1 terations, additions improvements permitted under Article 11, trade fixture merchandise and perscnal property from time to time in, on upon the prenises, in an amount not less than eighty perce (80%) of their full replacement cost from time to time duri the term of this Lease, providing protection against a peril include3 within the classification "Fire and Extend a 8 e Coveraq3", together with insurance against sprinkler damap, vandalism and malicious mischief. Any policy proceeds shall be used for the repair or replacement of the property dana9 or destroyed unless this Lease shall cease and terminate under the provisims of Article 18 hereof. (iii) POLICY FORM. All policies of insurance provided for herein shall be issued by insurance companies, with general policy holders' rating of not less than A and a financial rating of Class X as rated in the most current available "Best's" Insurance Reports, and qualified to dc business in the State where the building is situated, and shall be issued in the names of Landlord and Tenant, whicl policies shall be for the mutual and joint benefit anc protection of Landlord and Tenant, and executed copies 01 such policies of insurance or certificates thereof shall bt delivered to landlord within ten (10) days after delivery of possession of the premises to Tenant and thereafter withir thirty (30) days prior to the expiration of the term of eac' such policy. All public liability and property damagc policies shall contain a provision that Landlord, althoug' nand as an insured, shall nevertheless be entitled tc reavery under said policies for any loss occasioned to it its servants, agents and employees by reason of th negligence of Tenant. AS often as any such policy shal expire or terninate, rellewal or additional policies shall b procured and maintained by Temnt in like Fanner and to lik extent. All policies of insurance delivered to Landlord nus contain a provision that the company writing said policy wil give to Landlord twenty (20) days notice in writing i advance of any encellation or lapse or the effective date c any reduction in the amounts of insurance. All publi liability, property tia.mge and other casualty policies shal Se written as prirnary policies, not contributing with and nc in excess of coverage which Landlord my carry. To th ext2r.t Landlord's lender or ground lessor, if any, s requssts, said lender and lessor shall also be named ( additionzi1 insureds and shall be given the notices to ti sme extent as Liindlord is entitled. a a D. Notwithstanding anything to the contrary containc within this Aaticle 9, Tenant's obligations to carry tl insurance providd for herein may be brought within the coverq of a so-called blanket policy, or policies of insurance carri and maintained by Tenant, provided, however, that Landlord sha: be naned as an additional assured thereucder as its interest rn< appear and that the coverage afforded Landlord will not reduced or diminished by reason of the use of such blanket poli of insurance, and provided further that the requirements s forth herein are otherwise satisfied. Tenant agrees to perin Landlord at all reasonable times to inspect the policies insurance of Tenant covering risks upon the premises for whi policies or copies thereof are not required to be delivered Landlord . 9 0 E. Landlord shall at all times during the term here01 maintain in effect a policy or policies of insurance coverin: the building of which the premises are a part, in an amount not less than eighty percent (80%) of full replacement cost (exclusive of the as t of excavations, foundat ions and footings] 0 from time to time during the term of this Lease or the amount of such insurance Landlord's mortgage 1 ender requires Landlord tr maintain, whichever is the greater, providing protection againsl any peril generally includd within the classification "Fire anc Extended Coverage," together with insurance against sprinklei damage, vandalism and malicious mischief. Landlord's obligatio1 to carry the insurance provided for herein may be brought withi! the coverage of any so-called blanket policy or policies o insurance carried and maintained by Landlord, provided that th coveraF afforded will not be reduced or diminished by reason o the use of such blanket policy of insurance. Tenant agrees t pay Landlord as additional rent, during sach year or partial yea of the term of this Lease, the cost to Landlord of the insuranc required to be maintained by Landlord on the premises unde Article 9E for each such year or partial year. Such addi tiona rent for any partial year of the term hereof shall be prorated o a time basis. Payment shall be made by Tenant within fiftee (15) days after receipt of a written statement from Landlor setting forth the cost of such insurance and showing i reasonable detail the manner in which it has been computed. I the evezt the cost to the Landlord of the insurance it i required to maintain on the prenises mder said Article 9E is nc separately charged to Landlord by its insurance carrier, tb portion qplicable to the premises of the cost of such ipsuranc shall be th=t propor tion of such cost which the Floor Area of tl- preT.ises bars to the Floor Area of all the areas available fc exclusive use and occupancy by terants of the building, whethc or not actually occupied and open for business covered bysuc insurance. Article 10 TIT'LE OF LANDLORD Landlord covenants that as of the date hereof there are, liens upon its estate other than (a) the effect of covenant conditicns, restrictions, easements, ground 1 ease(s) , if any, a mortgages of record, and other rights of ksty of record; (b) tl effect: of any zoning laws of the City, County and State where t' building is situated, ad (c) general and special taxes n delinquent. Tenant agrees that as to its leasehold estate i and all persons in possession or holding under it, will confo to and will not violate the terms of any of the aforeinention matters of record, or any other matters of reard. Article 11 TE"hT'S RIG.WS TO MAKE ALTERATICNS 10 a A. Landlord agrees that Tenant may, at Its own expense aIw after giving Landlord notice in writing of its intention to do SO, from tine to time during the term hereof, make alterations, additions and changes in and to the interior of the premises (except those of a structural nature) as it may find necessary or convenient for its purposes, provided that the value of the premises is not thereby diminished, and providd, however, that no alterations, additions or changes costing in excess of Two Thousand Five Hundred Dollars ($2,500.00) may be made without first procuring the approval in writing of Landlord. In addi~on, no alterations, additions or changes shall be made to any store fr0r.t , the exterior walls or roof of the premises, nor shall Tenant erect any mezzanine or increase the size of same, if one be initially constructed, unless and until the written ansent and approval of Landlord shall first have been obtained. In no event shall Tenant make or cause to be made any penetration through the roof of the premises without the prior written approval of Landlord. Temnt shall be directly responsible for any and all damages resulting from any violation of the provisions of this Article. all a1 terations, additions, or changes to be mzde to the premises which require the approval of Undlord shall be uder the supervision of a competent architect or com2etent licensed structural engineer and made in accordance with Plans and Specifications with respect thereto, approved ir wri~ng by Landlord before the ammencement of work, where sucl aproval is required pursuant to the provisions of this Article All work Kith respect to any alterations, additions, and change5 inust be do'ne in a good and mrkmanlike manner and diligentl: prosecuted to completion to the end t'nat the premises shall al a11 ti23 be a complete unit except dcring the period of work a Gpcn conr?le"Loi? of such mrk, Terant shall file for record in th office of the County Recorder where the building is located Notica of Completion as permitted by the law. Upon terininatioi of the Tenznt's leasehold estate such alterations, additions an1 im2rovszents s5all be perfomed anti done strictly in accordam kith the laws and ordirances relating thereto. In perfoming th work of any such alterations, additions or changes, Tenant shal hevs the xor!< performed n such a manner as not to obstruct th accsss to the premises of any other tenant in the building. e B. In the event that Temnt s3all make any permitt€ alterations, additions or hproveinents to the premises under tl- terms and p-mvisions of this Article 11, Terant agrees upon it part to carry such insurance as required by Article 9C (it avsring any such alteration, addition or improvement, it bein expressLy understood and agreed t'nat none of such alteration2 additiotx or improvernents shall be insured by Landlord under suc insurance as it may carryupon the building of which thepremise are a part, nor shall Landlord be required under any provisioi for reconstruction of the premises to reinstall any suc alterations, improvernents or addi tions. C. At Landlord's option upon termination or expiration I this Lease, Tenant shall remove any or all of the improvemenl constructed or installed by Tenant on the premises,, with Tena 11 a repairing any damges to the premises caused by such removal. Article 12 MECHANICS' LIENS A. Tenant agrees that it Will pay or cause to be paid all costs for work done by it or caused to be done by it on the premises, and Tenant will keep the premises free and clear of all mechanics' liens and other liens on account of work done for Tenant or persons claiming under it. Tenant agrees to and shall indemnify, defend and save Landlord free and harmless against liability, loss, damage, costs, attorneys' fees, and all othei expenses M account of claims of lien of labrers or materialmer or others for work performed or materials or supplies furnishec for the Temnt or persons claiming under it. B. If Tenant shall desire to contest any claim of lien, i' shall furnish Landlord adequate security of the value ore in th amount of the claim, plus estimated msts and interest, or a bonl of a responsible mrprate surety in such amount conditioned o the dischxge of the lien. If a final judgment establishing th validity or existence of a lien for any amount is entered, Temn shall pay and satisfy the same at once. C. If Temnt shall be in default in paying any charge fo which a mechilnics' lien claim and suit to foreclose the lien hav been filed, and shall not have given Landlord security to protec the property and Landlord aFinst such claim of lien, Landlor mzy (but shall not be so required to) pay the said claim and ap costs, and the anount so paid, together with reasonabl attorneys' fees incurred in connection therewith, shall L: immediately due and owing from Tenant to Landlord, and Tenar: shall py the same to Landlord with interest at the maxiinu lawful rate from the dates of Landlord's L=ayments. Should ar: claims of lien be filed against the premises or any actic affecting the title to such propsrty be commenced, the part receiving notice of such liens or action shall forthwith give ti other party written notice thereof. Landlord or it representativss shall have the right to go upon an2 inspect tl preaises at all rascnable times and shall have the right to pa and keep posted thereon notices of non-responsibility, or su( other notices which the Landlord may deem to be proper for tl protection of Landlord's interest in the premises. Terant shal before the commencement of any work which might result in a such lien, give to Landlord written notice of its intention to 1 so in sufficient time to enable the pcsting of such notices. Article 13 ADVERT IS I LUG S I GNS Tenant shall not utilize any sign on or about the premises exce as has been approved by Landlord. Tenant shall not affix maintain upon the glass pines and supports of the show windo 0 12 a (and within 24 inches of any window), doors and the exterior walls of the premises, any signs, advertising placards, names, insignias, trademarks, descriptive material or any other such like item or items except such as shall have first received the 0 mitten approval of Landlord as to size, type, color, location, CO?~, nature and display qualities. Anything to the contrary ir this Lease notwithstanding, Tenant shall not affix any sign tc the roof of the premises. In addition, no advertising mediun shall be utilized by Tenant which can be heard or experienced outside Tenant's premis es, including without limiting the generality of the foregoing, flashing lights, search lights, loudspeakers, phonogra_phs, radios or television. Terant shall not display, paint or place or cause to be displayed, painted 01 placed, any handbills, bumper stickers or other adver tisinc devices on any vehicle parked in the parking area of thc Building, whether belonging to Tenant, or to Tenant's agent, 01 to any Other person: nor shall Tenant distribute, or cause to bt distributed, in the Building, any handbills or other advertisin devices, and in the event of a violation of this covenant b Terant, Tenant shall py to Landlord the cost and expens necessary to renave any such unauthorized material from th Building. Article 14 FIXTURES 9XD PEilSXAL PFOPERTY A. Any trade fixtures, signs acd other perscnal property o Tsrant r,ot perinansfitly affixed to the premises shall remain th property of Terank and Landlord agrees that Temnt shall have t? right, provided. Terant be not in default uder the terns of thi Lease, at any time, and from time to time, to resove any and al of its trzde fixtures, sign and other personal property which i may have stored or installed in the premises, including Zut nc limiting the Sam2 to counters, shelving, showcases, mirrors ar other movable personal property. Nothing in this Articl contain& shall Se deemed or construed to permit or allow Temz to renovz so much of such personal property, without t? imediate replacenent thereof with similar personal property < comparable or better quality, as to render the prenisc unsuitable for conducting the type of business specified i Exhibit I'B" attached hereto. Tenant at its expense shal immediately repair any danage occasioned to the prenises 1 reason of the removal of any such trade fixtures, signs, ai other personal property, and upon the last day of the Lease Te or a dzite of earlier ternination of this Lease, shall leave tl premises in a neat and clean condition, free of debris. A! trade fixtures, signs and other personal property installed in attached to the premises by Temnt must be new when so install or at tached. B. All improvements to the premises by Tenant, includi but not limited to light fixtures, floor coverings a partitions, tat exclu6ing trade fixtures and signs, shall becc the property of Landlord upon expiration or earlier terminati 13 a of this Lease. C. Tenant shall pay before delinquency all taxes, assessnents, license fees and public charges levied, assessed or imposed upon its business operation, as well as upon its trade @ fixtures, lease-hold impro venents (including, but not limited to, those Tenant is required to make in accordance with the provisions of Exhibit "C" hereof), merchandise and other personal property in, on or upon the premises. In the event any suc'r items of property are ass ess ed with property of Landlord, then and in such event, such assessment shall be equitably dividec between Landlord and Temnt to the end that Temnt shall pay onl; its equitable proportion of such assessment. Landlord shall determine the basis of prorating any such assessments and sucl deternimticn shall be binding upon both Landlord and Tenant. Nc taxes, assessments, fees or charges referred to in this paragrap shall be considered as taxes under the provisions of Article ' hereof. iuticle 15 ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN CORPORATE OWXERSHIP A. Tensnt shall not transfer, assign, sublet, enter int 1icer.s e or concession agreements, change ownership, nortgap o hypothecate this Lease or Tenant's interest in and to th prenises without first procuring the written consent o Landlord. Any attempted transfer, assignment, subletting license or concession agreement, change of ownership, mortqge c hFothecatlon without Landlord's written consent shall be voi and confer no rights upon any third person. Without in any w2 limitinc; Landlord's rights to refuse to give such consent for an other reasm or reasons, Landlord reserves the right to refuse t give such consent unless Temnt remains fully liable during tl- right to refuse to give such consent if in Landlord's reasombl busifiess judginent the quality of merchandising operation is c may be in any my adversely affected during t5e tern of t? Lease or the financial worth of the proposed new tenafit is les t'nan that of the Tenant executing this Lease or of Tenant clr Tenant's Guarantcr as the case may be. Tenant agrees t reimburse Landlord for for Landlord's reasomble attorney fec incurred in conjmction with the processing and documentation c any such requested transfer, assignment, subletting, licensing ( concession agreement, change of ownership, mortgage ( hypothecation of this Lease or Tenant's interest in and to tl premises. . ~,,,expired .- tern of the Lease and Landlord further reserves th B. Each transfer, assignment, subletting, licensc concession agreement, mor tqge and hypothecation to which the has been consent shall be by an instrument in writing in fo satisfactory to Landlord and shall be executed by the transfer0 assignor, sub1 essor, 1 icensor, concessionaire, hypothecator mortgagor and the transferee, assignee, sublessee, license wncessicnaire or mortgagee in each instance, as the case may t 0 14 and each transferee, assignee, sublessee, licensee, concessionaire or mortgagee shall agree in writing for the benefit Of Landlord herein to assume, to be bound by, and to perform the terms, covenants and condi tions of this Lease to be done, kept and Performed by Tenant, including the payment of all amounts due or to become due under this Lease directly to Landlord. One exscuted mpy of such written instrument shall be delivered to Landlord. Failure to first obtain in writing Landlord's consent or failure to comply with the provisions of this Article shall operate to prevent any such transfer, assignment, subletting, license, concession agreement, mortgage or hypothecation from becaning effective. a C. If a Tenant hereunder is a corporation (except a arpration whose stock is traded on the NYSE or the AMEX), or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in suc? corporation, association or partnership in the aggregate ir excess of twenty-five percent (25%) shall be deemed an assignment within the meaning and provisions of this Article 15. Article 16 TEiWhT 'S 03NDUCT OF BUSINESS A. Tecant covenants and agrees that, continuously an uninterruptedly from and after its ini tial opening for business it will operate and conduct within the preinises the busines which it is pemitted to operate and conduct undsr the provision hereof, except while the premises are uiitenark2bJ.e by reason o fire or other cascalty, and that it will at all times keep an o maintain within and upon the premises and adequate stock c merchandise and trade fixtures to service and supply the usua and ordinary denands and requirexents of its customers and thz it will keep its premises in a neat, clean and orderly condi tior lenar\.t ages that all tras'n and rubbish of the said Tenant shal only be deposited within rece-ptacles z.s provided by Landlord ar that there! s'nall be no other trash receptacles permitted t remain outside of the premises. Landlord agrees to cause SUC receptacles to be enptied and trash renoved at Tenant's cost ar ex2ense as pwt of the coiniion area expenses. m B. Tenant shall faithfully observe and comply with ti rules and regulations that Landlord shall from time to tit promulgate and/or modify. The rules and regulations shall 1 binding upon the Tenant upon delivery of a copy of them Tenant. Landlord shall not be responsible to Tenant for t nonperformance of any said rules ant! regulations by any 0th tenants or occupants. All such rules and regulations shall ' non-discriminatory and shall be applicable to all users a tenants of the Building. Article 17 REPAIRS AND MAINTENANCE 15 a . A. Tenant agrees at all times, from and after substantial completion of the premises, and at its own cost and expense, to repair, replace and maintain a good and tenantable andition the @ premises and every part thereof, excluding the roof, exterior walls, structural parts of the premises and structural floor (flcor covering, including carpeting, terrazzo or other special flooring installed by or at the request of Tenant, to be maintained by the Temnt), and including without limitation the utility meters, pipes and conduits, all fixtures, air conditioning and all Tenant's signs, locks and closing devices, and all window sash, casement or frames, door and door frames, and all such items of repair, maintenance and improvement or reconstruction as may at any time or from time to time be required by government agency having jurisdiction thereof. Landlord will contract with a service company for monthly maintemnce of the heating and air conditioning equipment on the roof and Temnt shall pay Landlord for this service on a month11 basis. B- Subject to the foregoing provisions hereof, the Landlorc shall keep and maintain in good and tenantable condition ani ree_oair, the roof, exterior walls, structural parts of th prenises and structural floor, pipes and conduits outside thi preinises for the furnishing to the premises of various utilitie (except to the extent that the same are the obligation of th sppropriate public utility company); provided, however, tha' Landlord shall cot be required to make repairs necessitated b r==f.son of the negligence of Tenant or anyone claiming Ende Te~ziil~, or by reason of the failure of Tenant to perfors o observe any anditions or agreenmts in this Lease contained, o cause by alterations, additions, or improvements mde by Temn of itnyone claining under Tenant. Anything to the contrar notwithstzinding contained in this Lease, Landlord shall not i any way 52 1iaSle to Tenant for failure to make repairs as herei s9ecifically required of it unless Terant has previously notifie Landlord, in writing, of the need for such re,pirs and Landlor has failed to ccninence ma!cing repairs within 30 days aft€ receipt of such notice and to complete said repairs within reasorable psriod of time following receipt of Tenant's writtc Eotification. Any costs Landlord incurs from time to tine j connection with the maintenance and repair of the premises i above provided shall be billed by Landlord to Tenant and upc receipt of such billings Tenant shall immediately reirnbur2 Lsndlord for said costs, e C. If Tenant refuses or neglects to make repairs and/( maintain the premises, or any part thereof, in a mannc reasonable satisfactory to Landlord, Landlord shall have t right, upon giving Tenant reasonable written notice of i election to do so, to make such repairs or perform SUI maintemnce on behalf of and for the account of Tenant. In su event such mrk shall be paid for the Tenant as additional re promptly upon receipt of a bill therefor. 16 a D. As used in this Article the expression "exterior walls" shall not be deemed to include store front or store fronts, plate glass, window cases or window frames, .doors or door frames, security grilles or similar enclosures. It is understood and @ agreed that Landlord shall be under no obligation to make any repairs, alterations, renewals, replacements or improvements to and upon the premises or the mechanical equipment exclusively serving the premises at any time except as in this Lease expr es sl y pro v ided . E. Upon any surrender of the premises, Tenant shall redeliver the premises to Landlord in good order, condition and state or repair, ordinary wear and tear excepted, and exceptinc; such iteins of repair as may be Landlord's obligation hereunder. Article 18 RZCOLVSTR CCTI ON A. In the event the premises be damaged by fire or othei perils covered by Landlord's fire and extended coveragt ins ur ance , Land1 ord shall : (i) Within a period of ninety (90) days thereafter commence repair, reconstruction and restoration of said premise: ar,d prosecute the same diligently to completion, in which even: this Lease shall continue in full force and effect; or (ii) In the event of a &prtiaaL or total destruction of the presises during the last three (3) years of t'ae ter; 0 hereof, Landlord and Tenant shall each have the option tl terminate this Lease upon giving written notice to the other o exercise thereof within thirty (30) dsys after such destruction For purposes of this paragra& (ii), "pzirtid destruction'' shal be deemed a destruction to an extent of at least thirty-t'nree am one-third percent (33-1/3%) of the then full replacenant cost o the premises as of the date of destruction. B. In the event the premises shall be damaged as a resul of any flood, earthquake, act of war, nuclear reaction, nuclea radiation or radioactive contamination, or fron any othe casualty not covered by Landlord's fire and extended coverag insurance, to any extent whatsoever, Landlord may within ninet (90) days following the date of such damage, commence repair reconstruction or restoration of said premises and prosecute th same diligently to completion, in which event this Lease shal continue in full force and effect, or within said ninety-da period elect not to so repair, reconstruct or restore sai preiises in which event this Lease shall cease and terminate. I either such event Landlord shall give Tenant written notice c its intention within said ninety-day period. C. In the event of any reconstruction of the premises mde this Article 18, said reconstruction shall be in stric conformity with the prcvisions of Exhibit "C" hereof and to tl 17 a . extent of the work as therein set forth as "Description of Landlord's Work" and "Description of Tenant's Work". Notwithstanding that all reconstruction work shall be performed by Landlord's contractor unless Landlord shall otherwise agree (I) in writing, Landlord's obliwtion to reconstruct the premises shall be only to the extent of the work as described in "Description of Landlord's Work" in Exhibit "C" hereof; Tenant, at its sole cost and expense, shall be responsible for the repair and restoration of all items set forth as Tenant's Work in saic Exhibit "C" and the replacement of its stock in trade, trade fixtures, furniture, furnishings and equipment. Tenant shall cornnence installation of fixtures , equipment and merchandise hereof promptly upon delivery to it of possession of the premises and shall diligently prosecute such installation to completion. D. Upon any termination of the Lease under any of thr provisions of this Article, the parties shall be released thereb] without further obligations to the other party coincident wit1 the surrendsr of possession of the prenises to the Landlord except for items which have theretofore accrued and be thet unpaid. In the event of ternination for reason of damge by fire or other perils and such damage is covered by Tenant's fire ani extended coverage insurance under Article 9C (iv), all sucl proceeds covering the iteins specified as "Tenant's Work" i Exhibit "C", and Tersant's leasehold improvements, but excludin( proceeds for trade fixtures, merchandise, signs and othe personal property, shall be disbursed and paid to the Landlord. 2. In the event of repair, reconstructior. and restoratio as hsrein provided, the minimum annual. rental provided to be pail under Article 1 herecf shall be ahted proportionately with th degree in which the Tenant's use of the premises is impaire commencing from the d&e of destruction and mntinuing during th period of such repair, reconstruction or restoration. Tenan shall continue the operation of its Lxrsiness on the premise durir.g any such period to the exter.t reasorably practica3le fro the standpoint cf prudent hsiness mamgernent; ami t'nP obliFtio of Tsnant hereunder to py percentage rental and addi tiona rental shall resain in full force an5 effect. Tenant shall no be entitled to ar.y compensation or damges from Landlord for 10s of the use of the whole or any part of the premises, or th building of which the premises are a part, Tenant's persona property or any inconvenience or annoyance occasioned by SUC dam gs, repair, reconstruction or res to rati on. @ F. With respect to any partial or total destruction whic Landlord is obligated to restore or may restare uRder any of tl- provisions of this Lease, Tenant hereby waives any statutor rights of termination which may arise by reason of SUC destruction. G. In the event of any damage to the premises, Tenant shal give to Landlord written notice of such damage within 5 daj after its occurrence, ia a Article 19 CDMHCN AREAS AND AUTOMOBILE PARKING a A. Landlord shall provide up to a maximum of 110 parking spaces. If during the term of the lease Tenant, on a regular basis, requires additional parking, Landlord shall agree to provide up to an additional 50 parking spaces in which Tenant shall pay Fifty ($50.00) per spacey, per month in 1986 Dollars, plus C.P.I. adjustment every year. B. Tenant and its employees and invitees are, except as otherwise speci fically provided in this Lease, authorized, empowered and privileged to use the common areas in common with other persons during the term of this Lease. Landlord agrees, without cost or expense to Tenant, to construct or cause to be constructed, the common areas generally upon the area shown on the site plan attached hereto and marked Exhibit "A", and to maintain and operate, or cause to be maintained and operated (except as hereinafter provided with reference to cost of rnainterance) , said comiion areas at a1 1 times following completion thereof, for the benefit and use of the customers and patrons of Tenant, and of other tenants, owners, and occupants of the land aristituting the Suilding of which the premises are a part. C. Landlord shall keep or cause to be kept said common areas in a neat, clean and orderly condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof, bcrt all expenses in connection with said cannon areas shall be c'narged and prorated in the manner hereinafter set It is understood and agreed thzt the phrase "expenses ir connection with said common areas" as used herein shall be ccnstrued to include, but not be limited to, all sums expended in connection with said common areas for all general maintenance and repairs, resurfacing, or painting, restriping, cleaning, trasi remaval, swezping and janitorial services, rnainterance am repir of sidewalks, curbs, and building signs; sprinkle] systess, plant and landscaping; lighting and other utilities, d~rectional signs and other markers an6 bumpers; maintenance anc repair of any fire protection systems, lighting systens, stoa Zrainage systens and any other utility systens; persor.nel tc implenent such services including, if Landlord deems necessary the cost of security guards; real and personal property taxes possessory interest taxes, and ass essments on the improvement an6 land comprising said common areas: any governmenta imposition or surcharge imposed against Landlord or assesse against the automobile parking area of any other portion of th common area; depreci ati on on mainte rance and operating machi ner and equipment (if owned) and rental paid for such machinery an equipment (if rented), adequate public liability and propert damage insurance on the common areas (under which Tenant shall k named as an additional assured). In addition, "expenses in connection with said common areas shall include costs for the accounting, bookkeeping ar 0 for";n. 19 e .. . collection Of the expenses in connection with said common areas in an amount equal to ten percent (10%) of Tenant's pro rata share of the total of the aforementioned expenses for each calendar year. Landlord may cause any or all of said services to be provided by an independent contractor or contractors. Anything to the contrary notwithstanding contained hereimbove, all expenses in connection with the original construction and installment of the common areas shall be at the sole cost and experse of Landlord and shall not in any event be charged to the Tenant . D. Tenant shall pay to Landlord Tenant's pro rata share of such cornion area expenses in the following manner: (i> From and after the date the term of this lease a: proved for in Article 1 hereof has commenced, but subject tc adjustment as hereinafter in this subparagraph (i) provided, Tenant shall pay Landlord on the first day of each calendar montl of the tern of this Lease an amoun t estimated by Landlord to bi Tenant's pro rata share of such common area expenses. Landlorc nay adjust the estimated monthly charge at the end of an! calendar quarter on the basis of Landlord's experience an( r ea s on ab1 y ant i ci pa t ed cos t s. (ii) Within thirty (30) days following the end of eac calen2a.r quarter or, at Landlord's option, each calendar year Landlord shall furnish Tenant a stztement covering the calenda quater or year just expired, certified as mrrect by a csrtifie public accnmtant or an autbrized representztive of Landlord sZ?07dng the total operating cost, the amount of Tenant's pr rata share of such ammon area experses for such calendzr quarte or year and the &ppents made by Tenant with respect to SUC period as set forth in subparagraph (i). If Tenant's pro rat share of such common area expenses exceeds Tenant's pyment s made, Tenant shall pay Landlord the deficiency within ten (1C days after receipt of such statement. If said Fyrrents exceed t offset the excess aFinst pyments next thereafter to beams ci~ Landlord as set forth in said scbparagraD (i). 0 (iii) Tenant's pro rata share of the total common are expenses for the previous calendar quaker or year shall b2 th; portion of all of such expenses which is equal to the proportic thereof which the number of square feet of Floor Area in t'r premises bars to the total number of square feet of Floor Arc of buildings in the entire Building which are from time to tin occupied and open for business as of the commencement of eac calendar quarter. There shall be appropriate adjustment ( Tenant's share of the common =ea expenses as of the commenceine and expiration of the term of this Lease. F. Landlord shall at all times have the right and privilei of determining the nature and extent of the common areas, and 1 making such changes therein and thereto from time to time whi in its opinion are deemed to be desirable and for the be interests of all person using said common areas, including t 20 a .. location and relocation of driveways, entrances, exits, automobile parking spaces, the direction and flow of traffic, installation of prohibited areas, landscaped areas, and all other facilities thereof. G. Nothing contained herein shall be deemed to create an) liability upon Landlord for any damage to motor vehicles of customers or employees or for loss of property from within sucl- motor vehicles, unless caused by the negligence of Landlord, it? agents, servants or employees. a H. Landlord shall also have the right to establish, anc from time to time change, alter and amend, and to enforce againsl Tenant and the other uses of said common areas such reasonablc rules and regulations (including the exclusion of employees parking therefrom) as may be deemed necessary or advisable foi the proper and efficient operation and maintemnce of said commoi areas. The rules and regulations herein provided may include without limitation, the hours during which the common shall b open for use. Landlord may, if in its opinion the same b advisable, establish a system or systems of validation or othe type operation, including a system of charges against non validated parking checks of users, and Tenant agrees to confor. to and abide by a1 1 such rules and regulations in its use and th use of it customers and patrons with respect to said automobil parking area, provided, however, that all such rules an1 regulations and such types of operation or validation of parkinl chscks and other matters affecting the customers 2nd patrons o Tertanc shall apply equally and without discrimination to al persons entitled to the use of said automobile parkin fac ili ties . I. Landlord shall at all times during the term of t5i Lease have the sole and exclusive control of the common areas ar?d may at any time and fron tine to time during the term hereo exclude and restrain any person fron use or occupancy thereof excepting, however, bona fide custoiners, patrons an2 service suppliers of TeEant, and other Tenants of Landlord who nake us of said areas in accordance with the rules and regulation established by Landlord, the other tenants of Landlord and t3 other owner of the building to use the same in mininon wit Tenant, and it shall by the duty of Tenant to keep all of sai areas free and cler of any obstructions created or permitted k Tenant or resulting froin Tenant's operation and to peimit =he us of any said areas only fron normal parking and ingress and egres by the said customer, patrons and service-suppliers to and frc the building occupied by the Tenant and other tenants c La ndlord . J. If in the opinion of Landlord unauthorized persons ar using any of said areas by reason of the presence of Tenant i the premises, Tenant, upon demand of Landlord, shall enforce su( rights against a1 1 such unauthori zed persons by appropri at proceedings. Nothing herein shall affect the rights of Landloi at any time to rem0 ve any such unauthorized persons from sal 21 a . areas or to restrain the use of any said areas by unauthorizec persons. ARTICLE 20 BmKRUPTCY - INSOLVENCY Tenant agrees that in the event all or substantially all o Temnt's assets be placed in the hands of a receiver or trustee and such receivership or trusteeship continues for a period o thirty (30) days, or should Tenant make an assignment for thc benefit of creditors of be finally adjudicated a bankrupt, 0: should Temnt institute any proceedings under the Bankruptcy Ac as the same now exists or under any amendment thereof whichma: hereafter be enacted, or under any other act relating to thc subject of bankruptcy wherein Tenant seeks to be adjudicated i bankrupt, or to be discharged of its debts, or to effect a plai of liquidation, composition or reorganization, or should an: involuntary proceeding be filed against Tenant under any sucl 'mn'xruptcy laws and such proceeding not be removed within ninet: (90) days thereafter, then tenant shall be in default under thi Lease, and this Lease or any interest in and to the premise! shall not becoine an asset in any such proceedings and, in an such event and in addition to any and all rights or remedies o Landlord hereunder or by law provided, it shall be lawful fo Landlord to declare the term hereof ended and to re-enter th preinises and take possessiofi thereof and remove all person therefron and Tenant shall have no further claim thereon o hereuder. The provision of this Article 20 shall also apply t any Grrarantor of this Lease. a A.VICLE 21 DEF.AUr,TS BY TEXAhT A. Should Tenant at any time by in default hereunder wit' respect to any rental ppents or other charges _pya51e by Tenan kremder, and s2?ould such default antin= for a period of fivc (5) days after written notice froin Landlord to Tenant; or shoull the Tenant be in def aul t in the prompt and f ull performance o any other of its promises, covenants or agreenents herei contain33 and should such default or breach of performinc continue for more than a reasomble time (in no event to excee thirty (30) days) after written notice thereof from Landlord t tenant specifying the particulars of such default of beach o performance; or should Tenant vacate or abandon the premises then Landlord may treat the occurrence for anyone or more of th foregoing events as a breach of this Lease, and in addition t any or all other rights or remedies of Landlord hereunder and b the law provided, it shall be at the option of Landlord, witlmu further notice or demand of any kind to Tenant or any othe pers on : (a) The right of Landlord to declare the term hereof and t 22 0 .. re-enter the premises and take possession thereof and remove all persons therefrom, and Tenant shall have no further claim thereor or theretinder; or (b) The right of Landlord without declaring this Lease endec to re-enter the premis es and occupy the whole or any part thereol from and on account of Tenant to collect said rent and any othei rent that may thereafter become payable. (c) The right of Landlord, even though it may have re. entered the premises, to thereafter elect to tenninate this Least and all of the rights of Tenant in or to the premises. 0 B. Should Landlord have re-entered the premises under thi premises under the provisions of subparagraph (b) above, Landlor! shall not be eeemed to have terminated this lease, or thc liability of Tenant to pay rent thereafter to accrue, or i liability for damges under any of the provisions hereof, by an’ such re-entry or be any action in unlawful detainer, o otherwise, to obtain possessior! of the premises, unless Landlor shall have notified Tenant in writing that it has so elected t terminate this lease, and Tenant further covenants that th service by Landlord of any notice pursuant to the unlawfu detainer statutes of the Stake where the building is situated an the surrender of possession pursuant to such notice shall no (unless Landlord elects to the contrary at the time of or at an tiae subsequent to the serving of such notices and such electio be evidenced by written notice to Tenant) be deened t termination of this Lease. In the event of any entry or takin possessior, of the prernises as aforesaid, Landlord shall have th right, but not the obliFtion, to remove therefrom all or an part of the personal property located therein and may place th same in stora9 at a public warehouse at the espe,xe and risk o t;?e owner or owners thereof. @ C. Should Landlord elect to terminate this lease ur.Zer th provision of subparagraphs (a) or (c) above, Landlord may recovc from Tenant as dmages: (i) the worth at the time of aard of any unpid rent whic had been earned at the time of such ternination; plus (ii) the worth at the time of the amount by which tl- unpaid rent which would have been earned after termination unti the time of award exceeds the amocnt of such rental loss tenar proves could have been reasorably avoided; plus (iii) The worth at the tine of aard of the anount by whic the unpaid rent for the balance of the term after the time ( asard exceeds the amount of such rental 1css that Tenant prove could be reasorably avoided; plus (iv) any other amount necessary to ampersate Landlord fc all the detriment proximately caused Tenant’s failure to perfoi his obliqtions under this Lease or which in the ordinary cour: 23 0 .- of things would be likely to result therefrom, including, hit not limited to any costs or expenses incurred by Landlord in maintaining or preserving the premises after such default, preparing the premises for reletting to a new temnt, any repairs @ or alterations to the premises for such reletting, leasing conmission, or any other costs necessary or appropriate to relet the premises. (VI at Landlord's election such other amounts in addition to or in lieu of the aforegoing as may be permitted from time to time by the laws of the State where the building is situated. D. As used in subparagraphs (i) and (ii) above, the "worth at the time of aHard" is computed by allowing interest at the rate of ten percent (10%) per annum. As used in subparagraph (iii) above the "worth at the time of award" is computed by dismunting such amount at the discount rate of the Federal Reserve Bank nearest to the location of the building at the time of award plus one percent (1%). E. For all purposes of this Article 21, the term "rent' sliall 3s deemed to be the minimun annual rental and all other sums required to be ,wid by Tenant pursuant to the terns of thi: Leass. All such sums, other than the minimum annual rental, shall 'os camputed on the basis of the average monthly amount thereoE accruing duri-rlg the imsdi ately preceading sixty (60. month p2rio2, sxcegt that if it bemmes necessary to conpute suci ran231 Before such a sixty (60) month period has occurred then 01 the >-sis of the aver29 monthly amourlt thereof accruing duriy such s'mrtsr pzriod. E'. In the sve-rt of default, all of Tenant's fixtures furniture, equipant, improven?ent s addi tions, a1 terations ani other ;%csoci~l Droperty, shall remain on the prenises and in thai event, and continuing during the length of said default, D-ndlorl shall have the right to take the exclusive possession of saiie ani to use sane, rent or charge free until all defaults are cured or at its option, at any time during the tern of this Lease, tc require Terant to forthwith reno ve same. a G. Notwithstanding any other provisions of this Article Landlord agrees that if the default complained of, other than fo the payment of monies, is of such a nature that the same canno be rectified or cured within the thirty (30) day period requirin such rectification or curing as specified in the written notic relating thereto, then such default shall be deemed to be rectified or cured if Tenant within such period of thirty (3C days shall have commenced the recti fication and curing t'nerec an6 shall continue thereafter with all due diligence to caus such rectification and curing and does so complete the Sam2 ;$,t the use of such diligence as aforesaid. ii. The remedies given to Landlord in this Article shall 1 in addition and supplemental to all other rights or remedic which Landlord nay hAve under the laws then in force. 24 e \ 1. The waiver by Landlord of any breach of any term avemnt or condition herein contained shall not be deemed to b a waiver of such term, covenant or condition or any subsequen breach of the same or any other term, covenant or conditio herein antained. The subsequent acceptance of rent hereunder b Landlord shall not be deemed to be a waiver of any precedin breach by Tenant of any term, covenant or condition of thi Lease, other than the failure of Tenant to py the particula rental so accepted, regardless of Landlord's knowledge of sucl preceding breach at the time of acceptance of such rent. N1 covenant, term, or condition of this Lease shall be deemed tc have been waived by Landlord, unless such waiver be in writing b La ndl or 6. 1) J. Landlord shall have a first and prior lien for th rents and charges herein reserved upon the furniture, fixtures merchandise, and other personal property owned by Tenan (excluding leased equipment) situated upon the premises, and sai itens of perscnal property shall not be removed from the premise until said rent and charges are fully paid. tenant agrees t execute such security agreements or financing statements a Landlord nay require to properly record its lien in the publi reards, and in the event of default by Tenant in the payment o any sun hereuder, Landlord shall have the right to enforce sai lien in the mariner provided for foreclosure of security interest uder the Uniforin Commercial Code. Tenant 'nere5y appoint Landlord as Tenant's at torney-in-2act to file such finzncin statemints. (I) AZtic3.e 22 DEFAULT BY LPXDLORD In the event Landlord shall neglect or fail to perform o observe any of the coverants, provisior!s or conditions conkaini in this Le;.se on its part to be performed or observed withi thirty (30) days after written notice of default (or if more tha thirty (30) days shall be required bscause of the nature of th default, if Landlord shall fail to proceed diligently to cur such default after no~ce), then in that event Landlord shall 5 responsible to Temnt for any and all damges sustained by Temr as a result of Landlord's breach; further, after such notic Tenant shall have the right to cure any such default a Landlord's expense inc1udir.g in such expenditure all costs an attorneys' fees incurred to cure such default or breach of Lease tenant shall have no right to terminate this Lease except a herein otherwise speci fically provided. Should Tenant giL written notice to the Landlord to correct the default c Landlord, Tenant will give similar notice to the holder of tl- mortpge or deed of trust of Landlord, or the lessor of a grour lease with Landlord, and prior to any Lease cancellation, sai holder of the first mortgage or deed of trust, and for lessox shall be given a reasomble period of time to correct or reme? such default. If and when such holder of the first mortgage c 25 e *e, . deed of trust and/or lessor has made performance on behalf of kindlord, the default of Landlord shall be deemed cured. Temnt shall have no right to terminate this Lease, except as expressly pro vid ed he rei n . Article 23 a EIYINENT' DOiYAI N A. In the event the entire premises shall be appropriated or taken under the power of eminent domain by any public or quasi-public authority, this Lease shall terminate and expire as of the date of such taking, and Tenant shall thereupon be released from any liability thereafter accruing hereunder. E. In the event more than twenty-five (25%) of the squar( footage of Floor Area of the premises is taken under thepower 01 eminent domain by any public or quasi-public authority, or if b] reason of any appropriation or taking, regardless of the amount so taken, the remainder of the premises is not one undividec parcel of property, either Landlord or Tenant shall have tht right to terminate this Lease as of the date Tenant is requirec to vacate a portion of the premises upon giving notice in writin5 of such election within thirty (30) days after receist Sy Terant froin landlord of written notice that said preinises have been sc appropriated or taken. In the event of such termination, bot1 Lar.dlord 'and Tenant shall thereupon be released from an! liability thereafter accruing hereuder. Landlord agree5 immedizkely after learning of any ap_oropriation or taking to givc to Terznt notice in writing thersof. 0 C. If this Lease is not so terminated as set forth above Terznt shall remain in that portion of the preiiises which shal. not have been appropriated or taken, and Landlord agrees, a' Landlord's cost and expense, to as soon as reasonably possibll restore the premises OR the 1aEd reaaining to a con?leke unit o liks quality ar.d character as existed prior to such appropriatio, or tal<ir,g (except that the premises will be rezuced in size 2 affected by the coxleianation); and thereafter the minimum annua: rental provided for in Article 1 hereof shall be reduced on ai ec_uitable basis, taking into account the relative value of thl portion taken as com,cared to the portion remaining. D. Landlord shall be entitled to the entire award o compensation in such proceedings, bt the rent and other charge: for the last month of Tenant's occupancy shall be prorated ani Landlord agrees to refund to Tenant any rent or other charge: paid in advance. Tenant's right to receive compensation fo damages for its fixtures and personal property shall not b affected in any manner hereby. Tenant shall be entitled t pursue any reinedy it nay have against the condemning authorit for a "displaced person" pursuant to California Government Cod Section 7262 or for loss of business goodwill pursuant t California Ccde of Civil Procedure Section 1263.510. 26 a . E. For the purposes of this Article 25, a voluntary sal or conveyance in lieu of condemnation, but under the threat c condemnation, shall be deemed an appropriation or taking undc the pwer Of eminent domain. Article 24 ATI'ORLVEY'S FEZS In the event that at any time during the term of this Leas either Landlord or Tenant shall institute any action o proceeding aFinst the other relating to the provisions of thi lease, or any default hereunder, then, and in that event, the unsuccessful party in such action or proceeding agrees tc reimburse the successful party for the reasonable expenses o attorney's fees and disbursements incurred therein by th successful party. Further, in the event Landlord is made a party to any litigation by reason of the use or occupancy of the preiaiss by Tenant or Tenant's employees, agents or guests, wit-mut fault by Landlord, Tenant shall reimburse Landlord for all of Landlord's attorneys fees and costs of litigation incurred therein. Article 25 SALE OF PREILIISES BY LANDLORD In the event of any sale or exchange of the premises t Landlord 2nd assignment by Landlord of this Lease, Landlord shal be 2nd is hereSy entirely freed and relieved of all liajilit urder any and all of its averants and obligations contained i or derived from this lease arising out of any act, ocarrence o mission relating to the praises or this Lease occurring afte the consumnztion of such sale or exchange and assignment. Article 26 SUSOEWI >AT ICX , ATTOFNMENT a A. Upon written request of Landlord, or any firs mortgagee or beneficiary of a first deed of trust of LaRdlord Tenant will in writing subordinate its rights hereunder to th interest of any qround lessor of the land upon which the premise are situated, as well as to the lien of any first mortcjage o first deed of trust, now or hereafter in force against the lan and building of which the premises are a part, and to a1 advances made or hereafter to be made upon the security thereof Kotwithstanding the foregoing, in the event any procedings ar brought for foreclosure, or in the event of the exercise of th poc;er of sale urder any mortgage or deed of trust made b Landlord covering the premises, Tenant shall at the request o any purchaser at any such sale attorn to the purchaser an recognize such purchaser as the Landlord under this Lease. B. Within ten (10) days after written request therefore b 27 a -* Landlord, or in the event that upon any sale, assignment o hypothecation of the premises or the land thereunder by Landlord an offset st&ement shall be required from Tenant, Tenant agree to deliver in recordable form a cer ti ficate addressed to any SUC proposed mortgagee or purchaser or to the Landlord certi fyin that this Lease is in full force and effect (if such be th case), there are no defenses or offsets thereto or stating thos claimed by Tenant, and setting forth such other matters a reasonably requested by Landlord or such proposed mortgagee 0% purchaser, including but not limited to those items set forth o Exhibi t "E" h eret 0. C. Upon Landlord's request, Tenant shall modify this Leas in acmrdance with the requirements of a mortFgee or beneficiar of a first deed of trust of Landlord provided such modificatioi does not (i) increase the net rent or additional rent, (ii) alter the term of any renewal term or (iii) materially adversel: affect Tenant's leasehold estate or (iv) change, alter o preclude TeilaRt's continted uses, utilization and operations o the premises, the right to such use being expressly granted ti Tenant as set forth in this Lease. 0 D. The lessor under any ground lease for the lan ucderlying the prernises shall be a third party beneficiary o this Lease, with a right to enfcrce premises shall be a thir party beneficiary of this Lease, with a right to enforce thi Lease aqinst Tenant. If at any time said lessor shall xquir the rights of Mndlord uder this Lease, "Terant shall attorn t said lessor or its noninse as Lancillord under this Lease. Ilrticle 27 GUIET FOSSSSSICfS Landlord agrees that Tenant upon paying the rent an performing the coverants and conditions of this Lease may quiet1 have, hold and enjoy the premises during the tern hereof or an extension thsreof. Article 28 USDLORD'S RIGHT OF ENTRY Tenant agrees to permit Landlord and its authorize representatives to enter the preiises at all times C'uring usua businsss hours for the purpose of inspecting the same. Tenar further covenants and agrees that Landlord may go upon th premises and make any necessary repairs to the premises an perform any work therein which may be necessary to comply wit any laws, ordinances, rules or regulations of any publi authority or of the Insurance Services Office or of any simila body or that Landlord may deem necessary to prevent waste o deterioration in connection with the premises if the Tcmnt dce not make or cause such repairs to be made or performed or caus such work to be performed promptly after receipt of writte 28 0 9. denand from Landlord. Nothing herein contained shall imply ar duty on the part of Landlord to do any such wrk which under an provision of this Lease Tenant may be required to do, nor shal it constitute for the faithful performance by Tenant of all o the terms of this Lease by said Tenant to be observed an performed. The security deposit shall not be mortgaged assigned, trarsferred or encumbered by Tenant without the writte consent of Landlord and any such act on the part of Temnt shal be without force and effect and shall not be binding up0 ~a ndlord. 0 B. If any of the rents herein reserved or any other su pyable by Tenant to Landlord shall be overdue and unpaid o should Landlord make payments on behalf of the Tenant, or Tenan shall fail to perform any of the terms of this Lease, the Landlord nay, at its option and without prejudice to any othe remedy which Landlord may have on account thereof, appropriat and apply said entire deposit or so much thereof as may b necessary to compensate Landlord toward the pyment of rent o additional rent or loss or damage sustained by Landlord due t such breach on the part of Tenant: and Tenant shall forthwit upon denand restore said security to the original sum ilepaitec Should Tenant comply with all of said terms and promptly pay a1 of the rentals as they fall due and all other sums paqable k Tenant to Landlord, said deposit shall be returned in full t TEtnant at the end of the term. C. In the event of bankruptcy or other debtor-creditc procedings against Terant, such security deposit shall be deene to be apslied first to the pyment of rent and other chzges du Landlord for all periods prior to filing of such proceedings. 0 D. Landlord may deliver the fun2s deposited hereunder t Terant to the Furchaser of Landlord's interest in the preqises i t3e event that such interest be sold and thereupon Landlord shal be discharged froin any furthzr liability with respect to SUC deposit, and this provision shall also apply to any subsequen transferees . ARTICLE 29 E!I SCEUANEOUS A. It is agree2 that nothing obtained in this Lease shal be deemed or construed as creating a partnership or joint ventui between Landlord and Tenant or bs-tween Landlord and any othc party, or cause Landlord to be responsible in any my for tk debts or obliqtions of Tenant, or any other prty. B. It is agreed that if any provision of this Lease shal be determixd to be void by any court of competent jurisdictior then such determination shall not affect any other provision c this Lease and all such other provisions shall remain in ful force and effect: and it is the intention of the parties heret that if any provision of this Lease is capable of tw 29 0 cmstructions, one of which wuld render the provision void ar: the other of which muld rerder the provisions valid, then th provision shall have the meaning which renders it valid. C. In the event Temnt hereunder shall be a arpration, th @ ' parties executing this Lease on behalf of tenant hereby convenan and warrant that temnt is a duly qualified corporati.cn and a1 steps have been taken prior to the date hereof to qualify Tenan to do business in the State where the building is situated; a1 franchise and corporate taxes have been paid to date: and a1 future forms, reports fees and other documents necessary t comply with applicable laws Will be filed when due. D. It is understood that there are no oral agreement between the parties hereto affecting this Lease , and this Leas supersedes and cancels any and all previous negotiations arrangements, brochures, agreeinents and understandings, if any between the parties hereto or displayed by Landlord to Tenan with respect to the subject matter thereof, and none thereo shall be used to interpret or construe this Lease. E. Landlord reserves the absolute right to effect SUC other temncies in the building as Landlord, in the exercise o its sole business judgment, shall determine to best promote th interest of the building. Temnt Zoes not rely on the fact, no does Landlord represent, that any specific tenant or number o temnts shall during the term of this Lease occupy any s2ace i the building. This Lease is and shall be considered to be th only agreement between the parties hereto and thei representative am2 agents. All regoti ations ad oral zgreener?t acceptable to both parties have been merge into aEd are include herein. There are no other representatives or warranties betwee the parties and all reliance with respect to representations i solely upon the representations and agreements obtained in thi docuinent. @ F. The laws of the State where the building is sitcatel shall govern the validity, performance and enforcenents of thi Lease. Although the printed provisions of this Lease were draw by Landlord, this lease shall not be construed either for o aFinst Landlord or Tenant, 'mt this Lease shall be interprete in acardance with the general tenor of the language in an effor to reach ard equitable result. G. A waiver of any breach or default shall not k a waive of any other breach or default. Landlord's consent to, o approval of, any act by Tenant requiring Landlord's consent o approval shall not be deemed to waive or render unnecessar Landlord's consent to or approval of any subsequent sinilar ac by terant. H. Any prevention, delay or stoppage due to strike lockouts, labor -disputes, acts of God, imbility to obtain labo or materials or reasonable substi tutes therefor, governmenta restrictions, governmental action, civil commotion, fire or othe 30 e .. casualty, and other causes beyond the reascnable antrol of thc party obligated to perform, shall excuse the performance by sucl prty for a period equal to any such prevention, delay or stoppage, except the obligations imposed with regard to rental @ and other charges to be paid by Tenant prsmnt to this Lease. I. Tenant hereby expressly waives any and all right of redemption granted by or under any present or future laws in the event of Tenant being evicted or disposs ess ed for any cause, or in the event of Landlord obtaining possession of the premises bq reason of the violation by Tenant of any of the covenants and conditions of this Lease or otherwise. The rights given tc Landlord herein are in addition to any rights that may be giver to Landlord by any stature or otherwise. J. The voluntary or other surrerder or termination of thi$ Lease Sy Tenant, or the acquisition by Landlord of Tenant'2 rights under this Lease, shall not work a merger withoui Landlord's express written agreeinent to such a merger: and at Landlord's option, any such events shall operate as an assignmen! to Landlord of any and all subleases or subtenancies of Tenanl for the preinises. K. If Tenant remains in possession of the premises or an] part thereof after the expiration of the term hereof, SUC? occupancy shall be tenancy from month to month at a rental in thc amount, unless otherwise expressly specifies in writing bi Landlord, equal to 150% of ths rent for the last inonth of thc tern of this Lezse, plus all other Glarges payable heremder, anc u,cn all tirins hezeof zpslicable to a math to nonth tenancy. L. Time is of the essence in the performnce of obligation a under this Lease. Article 30 " FO RCE KAJZ L! E 'I In the event a delay arising fron "force majeure" should affec Landlord's obligation to construct the premises, Landlord shal. be granted a reascnable extersion of time beyond the agreed UPOi completicn date to remdy the problem and complete constructioi of the preziscs. Cf3T'I'I NG EXC I E S The final consummation ar.d commencement of this lease contingent upon the following: 1. Landlord's ability to obtain construction financin equal to 75% of the project cost from an institutional lender a "market rate" interest rates. Landlord shall noti fy tenant i writing within 90 days of the execution of this lease of landlords ability or inability to obtain such financing. It i anticipated that First Interstate Eank will be the constructio 31 a anticipated that First Interstate Bank wil 1 be the constructior lender for this project. Tenant agrees to cooperate fully wit) First Interstate Bank providing financial information on tenant @ and other information that might be required by First Interstate Bank for the obtaining for the construction financing. 2. Plans and Specifications - Preliminary plans for thc building and the site plan for the location of the buildin! within the Educational park are attached to this lease an( approved by both landlord and tenant. Within 45 days from thc execution of this 1 ease 1 and1 ord shal 1 provide tenant detai 1 ec plans, schematics and specifications which wil 1 identify an( describe in more detail this bui 1 ding. These prel iminar: drawings shall be subject to the approval of tenant in writin! within 14 days after date of receipt thereof. Subsequent to tha approval landlord shall prepare the final plans an specifications for submittal to the Carl sbad Building Department These final plans and specifications shall also be approved o disapproved by tenant within 14 days of date or receipt thereof Landlord shall pay all costs of preparing plans an specifications. Once final plans are approved by Landlord an Tenant, the Landlord's architect shal 1 calculate actual squar footage to be utilized by Tenant by using BOMA full-buildin approved standards. This square footage shall be used i calculating rental described in Article 5 hereof. The exac square footage shall be approved by Tenant. IN WITNESS MHEREOF, the Landlord and Tenant have duly execute this Lease on the day and year first above written. If Tenant shall be a corporation, the authorized officers must sign on behalf of the corporation. The By : Lease must be executed by the LANDLORD president or vice-president and the secretary or assistant secretary, unless the by-laws or a resolution of the board of directors shall otherwise provide, in which event, By : the by-laws or a certified copy of the resolution, as the case may be, By : must be furnished. Also, the mT appropriate corporate seal must be affixed. 0 -. EXHIBIT B - e CHAPMAN COLLEGE DESCRIPTION - OF PREMISES That certain space in Batiqui tos Lagoon Educational Park, located in the City of Carlsbad, County of San Diego, State of California containing approximately 30,000 square feet of floor area. USE OF PREMISES -- Tenant may use the premises only for educational operations. 0 These operations may include undergraduate and graduate institutions; offices for admissions placement, registration, facul ty and accounting; conference rooms, classrooms, laboratories, 1 ibraries, and auditoriums; student services, including commons, bookstore, and cafeteria. e .. . EXHI BIT "C " DESCRIPTION OF LANDLORD'S WORK AND TENANT'S WORK -- -- 0 1. LANDLORD'S WORK Landlord shall construct the leased premises at Landlord's sole cost and expense to the extent sbwn below: a) ancrete slab floor and insulated roof b) front and rear walls as per Landlord's plans * c) 2oors as pr Landlords's plans * d) sewer and water stub363 to the temnt's leased premises e) electric service and tele-bone to the Nilding f) hezting and air conditioning mechanical equipment unit: placed on roofs g) paving and licjhting as per Landlord's plans h) exterior building shell exterior walls i) aze basic h-asl-xoom equipped with toilet, grab 'oar, sink mirror, light, e<-aust fan, ceiling, and walls 2. TEXX~T 'S FiORii a Tenant will be given $20.00 per square foot tenan improvesent allowance. If entire allowance is not used Tenant may apply the unused portion to offset renta: payments. Terant, at Terarit's sole cost and expense shall b responsiSle for the cost of the following and any work no speci fically set forth uder Landlord's hork: j) all signs k) trade fixtures 1) distribution of heating and air-conditioning rn) all electric wiring, outlets, lighting, switches, ar circuit brezikers n) susperded ceiling 0) sprinkler heads and installation p) utility meters and installation e ..* . q) all interior prtitioning, locks, hax&are, and paint r) one half the cost of interior demising walls bewteen terants 0 s) floor coverings and paint All Tenant’s work will be performed by Landlord as general contractor at its’ costs plus 158 for overhead and profit. LANDLORD’S IhTTLALS TENANTS INITIALS a 0 *% EXH I B IT 'I D " GUAFG\NTEE OF LEASE a WEREAS, a certain Lease of even date herewith has been, or will be, executed by and between Batiquitos Bluff, therein and herein referred to as "Landlord", and Chapman College, therein referred to as "Temnt", covering certain premises in the City of Carlsbad, County of San Diego, State of California; and WER?3S, Landlord urder said Lease requires as a condition tr its execution of said Lease that the undersigned guarantee th full performance of the obligations of Tenant under said Lease E! r.d WHEREAS, the undersigned is desirous that Landlord enter into said Lease with 'i'er-nt, NO'", THEREFORE, in consideration of the execution of said Lease by Landlord, the undersigned hereby unconditionally guarantees the full performance of each and all of the terms, coverants and conditions of said Lease to be kept and performei by Temnt, including the payment of all rentals and other charges to accrue! thareunder. The urdersigned further agrees as follows: 1. This Guarantee shall antinue in favor of tandlorc' Rotwithstanding any extension, modi fication, or alteration o said Lease entered into by and between the parties thereto, oz t3eir successors or assigns, or notw-i thstanding any assignment 0. said Lease, with or without the consent of said Landlord, and nc extension, nodi fication, alteratioii or assignment of said Leas shall in any maimer re1ese or discharge the undersigned and th urdersigned does hereby consent thereto. e 2. This Guarantee will continc2 unchanged by any 'bankruptc reorqinization or insolvency of Te;ant or any successor o assignee thereof or by any disaffirinance or abandonment by trustee of Temnt. 3. Landlord may, without notice assign this Guarantee i whole or in part and no assignment or transfer of said Leas shall operate to extinguish or diminish the liability of the u nd e r s i g n ed h e re und e r . 4. The liability of the undersigned under this Guarant shall be primary; and in any right of action which shall accri to Landlord under said Lease, Landlord. may, at its option, proct against the undersigned without having commenced any action, ( having obtained any judgment a9 irst Tenant. 0 .. Exhibi t "D" Page 2 5. The undersigned shall pay Landlord's reasonabl attorneys' fees and all costs and other expenses incurred if ar collection or attempted mllection or in any Egotiations relatiT to the obligations hereby guaranteed or enforcing this Guarantee 6. The undersigned does hereby waive notice of any demanc by Landlord, as well as any notice of default in the pyment 01 rent or any other amounts ccntained or reserved in said Lease. a 7. The use of the singular herein shall include the plura The oblicption of two or more parties shall be joint and severa The terms and provisions of this Guarantee shall be binding up and inure to the benefit of the respective successors and assig of the puties herein named. IN WITNESS WHEREOF, the undersigned has caused this Guarant to be executed as of the date set forth on pge 1 of this Lease. If Guarantor shall be a - corporation, the authorized officers must sign cn behalf of the corpora ti on. This Guarantee must be executed by the president or vice-president ad the secretxy or assistant Address: secretary, unless the by-laws or a resolution of the board of directors shall otherwise provide, in which event, the by-laws or a cer ti fied copy of the resolution, as the case may be, must be furnished. Also, the appropriate corporati on seal must be affixed. 0 -r- a I, @ - EXHIBIT "E" TENANT'S ESTOPPEL CERTIFICATE e - .. Date: Attention: Re : The w-dersigned, as Tenant under that certain Lease (t "Lease") for the ab ve refersnce2 premises (the "Premises") dat Landlord, hereby cer ti fies that: # 19 , made with Batiquitos Bluff a. All work to the Premises has been completed and the and the Premises are accepted as satisfactory; b. Tenant is in full and conplete pcssession of the Premi and is fully occupying the sane and conducting its busin t'nere from; c. Rent under the Lease coinnenced, to ziccrue ? 19 , andhas been paid throu5;- the date , 19- , and no rent credits or other or'fse have besn given by Landlord or taken by Terant; e d. The current rent due under the Lease is equal Dollars ($ ) per month; e. The Lease is in full force and effect and has not 'c ame;?ded, mcdifiec! or suspended other than by amendments da - - I 19 , and the ?resent tern of the Le e xpi res I 19 , f. Temnt has not advanced any anounts to or on behalf andlord under the Lease, for which advance it has not b reimbursed ; g. Tenant holds no claim ac+inst Landlord which might be off against accruing rentals; h. Terant has not sublet the Premises or any portion ther nor has Terant assigned the Lease or any portion thereof: and a e' Exhibit E Page 2 e j. Tenant understands that will materially rely on the statements made herein. undersigned acknowledges and agrees that the statements n herein are true and complete and may be relied upon and its successors and assigns. (Attach Not ary Ackno wl &vent ) a 8 bl. EXHIBIT F OPTION TO EXTEND TERM 0 OPTION TO EXTEND LEYSE. A. TeEnt is hereby granted successive options to extend th term of this Lease, on all of the provisions contained herein, fc 2 periods of 5 years each (each such period hereinafter referred to as "extended term") following the expiration of the initial term or of the immediately preceding extended term, as the case may be. Each such option is to be exercised by giving writter notice of exercise of the option exer cis ed ("Option Notice") tc LaRdLord at lest six months, tut not more than one year, beforc t'ne expiration of the initial term or of the immediatel; preceding extended tern, as the case ~ay be; provided, however, that in any of the following events, the extended term shall no coamence and this Lease shall expire at the end of the initia. term or at the end of the immediately preceding exterded term, a the cas2 nay be: (i) if Tenant is in default on the date o giving the Option Notice, the Option Notice shall be totall: ineffective; (ii) if Tenant is in default on the date th respective exteded tern is to commence; (iii) if any assignee o scblessee other than a successo: of Temnt as defined in Sectio 18.3. is in _~ossession of the prenises on the Gate of giving th Option Nocce, the Option Xotice shall be totally ineffective; o (iv) if any assignee or sublessee other than a s~ccessor o Tenant as definsd. in Section 18.5. is in possession of th premise on the date the respective exteded term is to co.menct Tenant shall have not other right to extend the term of thi Lease. @ 2. The Anocnt of t'ne Base Monthly Rental for each extenc' term shall be the greater of (i) the amount of Base Monthly Rent for t'ne y2a.r inmediately precedins the commencemsnt of t respective exterded term, adjusted as of the commencement of : extended tern and adjusted annually during the extended term reflect change in the cost of living as is set forth in Section or (ii) the then prevailing rate of Base Monthly Rental be: charged by Landlord as of the commencement of the respecti extended tern for comparable space in the immediate vicinity which the premises are a part, which Base Monthly rental sha thereafter be adjusted annually to reflect change in the cost living as is set forth in Section 8. rl) OPERATIONS AGREEMENT FOR FOUNDATION FOR THE 21ST CENTURY e This agreement is made this 7th day of November, 19 between the Foundation for the 21st Century (FZlC), a Califor Non-profit Corporation, and Sammis Properties (Sammis Cal ifornia Corporation who agree as fol 1 ows: 1. RECITALS: a. Sammis is developing a project in the City Carlsbad known as the Batiquitos Lagoon Educational Park. One the primary components is the educational compl ex comprised several individual educational enti ties which are separate distinct entities governed by their own governing board trustees and administered by officers named by their board. b. F21C is a public policy foundation organized convene conferences, publish newsletters and other publicatio and engage in other information activities, for the purpose advancing American leadership interests in the Pacific. F21C agreed to locate its headquarter offices at the Batiquitos Lag Educational Park and intends to attract scholars and lead engaged in Pacific affairs to Carlsbad. c. Sammis has invited F21C to relocate its educatio, activities to the Batiquitos Campus. F21C has discussed tl proposal and has agreed to make this move. e NOW, THEREFORE, in consideration of the mutual covenar contained herein and incorporated in the recitals set forth ab( the parties agree as fol lows: 1. Sammis agrees to construct a 70,000 square foot build at the Batiquitos Campus. Sammis will provide 5,000 square fl in a separate wing of this building for use by F21C. - quarters that F21C will occupy will be constructed by Samr Properties in consul tation with F21 C. The terms for 1 occupancy by F21C of this building are described in t agreement which wil 1 fol low. The parties understand that 1 lease must be reviewed and approved by the Board of Trustees F21 C. 2. F21C agrees to operate a high qual i ty educational pro: which will be independent and totally autonomous from the otk educational entities located at the Batiquitos Complex. F21C w be free to exercise all academic powers and responsibili related to its operations. 0 .I 3. F21C agrees to participate in the governance of Batiquitos Campus, a summary of which is attached, participating on the advisory council. F21C further agree participate in interdisciplinary programs by making conferences and other educational activities avail able students from other educational enti ties, and where appropri, to encourage its participants to take advantage of classes programs offered by other educational enti ties. 4. This agreement may not be assigned. 5. The parties understand that this building has not been approved by the City of Carlsbad and that this agreemenl conditioned upon the construction of the building. In witness whereof, the parties hereto have executed t agreement on the day and year first above written. SAMM I S PROPERT I ES FOUNDATION FOR THE 21ST Dona1 ammi s Dr.Ro ert Breunig Executive Vice Presider President SAMMIS PROPERTIES FOUNDATION FOR THE 21S1 By:+G/Ly: L-bf&w& CENTURY e 4- a BATIQUITOS Q3RPOA9ATIoN GOVERNANCE OCTOBER 28, 1986 OMSERSI-IIP OF LAND The laad at Batiquitos will be owned by a corporation know the Batiquitos Corporation. It will be governed by a chai arid a Board of Trustees. FEDETIAL CCNST ITUl'I ON The Board will create a Federal constitution under wl individud educational enti ties will retain their self-gover au tho r i t y . The Batiquitos Corporation wi 11 qpoint a president to ac liaison between the Batiqui tos Corpratim and the self-gover educational enti ties. ADVISORY COUNCIL The President shall convene an Advisory Council composed representative from each of the approved educational enti resident at the Batiquitos site, the President, and an appoi of the Mayor of Carlsbad. The Advisory Council will mee regular intervals and address issues relating to the ovei achinistration of the educational enterprise, .:elations bet enti ties, provision of services, and wi 11 make recoinmendaticn the Batiqui tos Corpration Board regardin9 enti ties operatin corntenplating operation. e INDIVI WAL EDUCATIONAL EhT ITIES Each of the individual educational entities Will be separa incorporated, governed by a Board of Trustees of its own, administered by officers named by its own Board. The individual educational enti ties will exercise all acad and administr ati ve powers and respons ibil i ti es re1 at ing to t oper ati ons . a .- e. E3P.T IQUITCS CO RPOFAT ION GOVERLVANCE Page 2 TERPlINAT ICN OF RELW ICN S WIT H EWCAT ICNAL EST IT IES Ternination of relations with any of the individual education entities operating at Batiquitos will occxr as a result of a twc thirds vote of the Board of the Batiquitos Corporatio contingefit on prior lease agreements. a a 0 , $ - 4. ;;. x\;*.d f. ~ I. LEASE BATIQUITOS LAGOON EDUCATIONAL PARK e In consideration of the rents and covenants hereinafter forth, Landlord hereby leases to Tenant, and Tenant hereby ri from Landlord, the following described premises upon fol 1 owing terms and conditions: Article 1 FUNDAidENTAL LEASE PROVISIONS : A. Date: B. Landlord: Batiquitos Bluff, a California Limited Partners C. Tenant: Foundation for the 21st Century, a California non-profit Corporation D. Tenant's (Article 7 Trade Name: Foundation for the 21st Century Exhibit "B E. Premises: (Article 3 Approximately 5,000 square feet of space in the Building One, Batiquitos Lagoon Educational Park building located at 4000 Windrose Circle, Carlsbad, Calif. F. Lease Term: Ten years (10 years) (Article 4 G. Commencement of Tsrm: (Article 4 Exhibit a Premises are leased subject to completion of work by Landlord, with term commencing upon such completion or whe Tenant opens for business, which ever occurs earlier. H. Minimum Annual Rental : NINETY THOUSAND Dol 1 ars ($90,000) annum, payable in twelve (12) equal monthly installm during each year, subject to rental adjustment every 1 of the lease term, with 1987 as the base year. Ren $1.50 per square foot per month, triple net. TA'tYcl e 5A) I. Cost of Living Adjustment: C.P.I. annually 4% max. J. Rental Deposit: N.A. (Article 5A) K. Percentage Rental: N.A. percent ( %) (Article 51 L. Address for Notices: 1 e M. To Landlord: Batiquitos Bluffs 2650 Caniino del Rio North, Suite 100 San Diego, CA 92108 0 N. To Tenant: To the premises & Foundation for the 21st 16332 Meadow Ridge Road Encino, CA 91436 (Article Century 0. Security Deposit: N.A. (Articl Dollars ($ N.A. 1. References in this Article 1 to other articles are convenience and designate some of the other Articles wI references to the particul ar Fundamental Lease Provisions ap? Each reference in this Lease to any of the Fundamental Lc Provisions contained in this Article 1 shal 1 be construcre incorporate all of the terms provided under each such Fundame Lease Provision. In the event of any conflict between Fundamental Lease Provision and the balance of the Lease, 1 atter shal 1 control. Article 2 EXHIBITS The following drawings and special provisions are atta hereto as exhibits and made a part of this Lease: EXHIBIT "A" - General site plan of an integrated buii which Landlord and others intend to construct or cause t constructed on real property located in the City, Cour~ty State described in Exhibit 'IB" and more particularly shoh Exhibit ''A", hereinafter referred to as the "Building". site plan shows, among other things, the principal improver which wil 1 comprise said Building. Tenant acknowledges thai site plan shown on Exhibit "A" is tentative and that Landlor change the shape, size, location, number and extent of improvements shown thereon and eliminate or add any improver to any portion of the Building, provided that Landlord shall change the size or location of the premises without Ten consent. EXHIBIT "B" - Description of the premises, authorizel EXHIBIT 'IC" - Description of work to be performe EXHIBIT 'ID" - Guarantee of Lease. EXHIBIT "E" - Tenant's Estoppel Certificate 0 and Tenant's trade name. Landlord and by Tenant in or on the premises. 2 a \ EXHIBIT "F" - Addendum or Rider EXHIBIT "G" - Option tG Extend Tern @ iuticle 3 PREMISES Landlord hereby leases and demises unto Tenant and Te hereby leases and takes from Landlord, for the term, at rental, and upon the covenants and conditions hereinafter forth, the commercial space referred to herein as the "prerni: ar,d described on Exhibit "B" attached hereto and made a hereof. The premises shall be constructed in acmrdance with procedures outlined in Exhibit "C" attached hereto and ma part hereof. Article 4 TERM specified in Article 1 hereof, and shall continue therea during the Lease Tern specified in Article 1 here~f, un soon2r tem,i nat ed as herei nafter provided in this Lease. A. The term of this Lease shall begifi as of the B. If the premises are leased subject to completior? of by Lzndlord, Landlord agrees to deliver to Tenant, and TE agrees to accept from Landlord, possession of the pren forthwith upon substantial completion of the premise described in Exhibit "C" hereof. The term "substan conpletion of the premises" is defined as the date Lane notifies Tenant that the premises are substantially complet the extent of landlord's Work as speci fied in Ex'nibi t "C", tc point wherein Tenant's contractor may commence the anstrut of Tenant's Work, if any, as specified in Exhibit Certification Sy Landlord's architect ("Project Architect the substantial completion of the premises in accordance said Exhibit "C" shall be conclusive and binding upon the pa hereto. Temnt shall commence the constructioG cf Temnt's if any, as described ir? Exhibit "C" hereof promptly substantial completion and shall open the premises for bus uFon such completion. In the event the tern of this Leas not commenced within three (3) years from the date hereof, this Lease shall terminate as of said date and each 0' parties hereto shall be released from any further oblig hereunder. a C. Within ten (10) days after Tenant opens for busi Tenant will execute and deliver to Landlord a certif substantially in the form attached hereto, marked Exhibit "I made a part hereof, indicating thereon any exceptions th which may exist at that time. Failure of Tenant to execut deliver such certi ficate shall constitute an acceptance 0 premises and acknowledgment by Tenant that the state included in Exhibit "E" are true and correct, without excep 0 3 To the extent Tenant has possession or occupancy of any port! of the premises prior to the commencement of the term of tl Lease, for any reason whatsoever (e.g., for Teriant to inst; tenant fixtures or improvements), all obligations under tl Lease (particularly the obligation to maintain liabil insurance) shall commence as of the date of such possession occupancy, excepting only the obliption to pay minimum ann rent shall not comence. 0 D. To the extent Tenant has possession or occupancy of portion of the prenises prior to the commencement of the terri this Lease, for any reason whatsoever (e.g., for Tenant instal 1 teLmnt fixtures or improvements) , a1 1 obligations ur this Lease (particularly the obligation to maintain liabil insurance) shall commence as of the date of such possessior occupancy, excepting only the obligation to pay minimum ann rent shall not commence. Pzticle 5 A9..ZYTAL AND TAXES The Tenant agrees to pay as rental for the use and occup; of the premises, at the times and in the manner hereina pr9vids3, the following sun of money: A. MINIMUM ANWAL RE-WAL. The minimum rental speci fie Article I here shall be payable in twelve (12) equal mon instalImer,ts during each year, in advar,ce, on the first da eeck: calendar month without setoff or deduction with cgmencsent of the term of this Lease. Should the rental PE mmmence on a day of the month other than the first day of month, t5en the rental for the first fractional month shal mmputed on a daily basis for the period from the dat conmencenent to the end of such calendar month and at an ar equal to one-three hundred sixtieth (1/360) of the saic! mir arslual rental for each such day, and thereafter shall be corn and paid as aforesaid. With the execution of this Lease, T is paying to Landlord a rental Deposit, as defined in Artic as an advance on the first to become due minimum annual rent t5e end of each 12 month period of this Lease, the minimum a: rental shall be increased by a percents- equal to the perce igcrease fron; the base period of the Consumer Price Index fo Urban Consumers, all items, California, published by the E of Labor Statistics, U.S. Department of Labor. Said Inde the calendar year designated in Article lH, shall be consi the "base period." In no event shall said minimum annual r be less than the sum then in effect for the preceding 12 period. If any time there shall not exist said Consumer Index, the parties shall substitute any official index pub1 by the Bureau of Labor Statistics, or successor or si government agency, as may then be in existence and shall be nearly equivalent thereto. If the parties shall be una1 agree upon a successor index, the parties shall refer the 0 4 0 of a successor index to arbitration in acardance with the rL of the American Arbitration Association. It is the intent this provision that the foregoing rental adjustment procedt shall occur effective as of the first day of the month of eac'; month period during this Lease term. B. TAXES a (1) Throughout the term of this Lease, Tenant agree: py to Landlord, as additional rent, the amount of taxes assessments levied and assessed for any such year upon premises and the underlying realty. Such additional rent for partial year of the term hereof shall be prorated on a t basis. Payment shall be made by Tenant within thirty (30) c after receipt of a written statement from Landlord setting fl the aiaount of such tax. (2) The term"F1oor Area", as used throughout this L shall be deemed to mean and include all areas for the exclu use and occupancy by tenants or subkenants of Landlord, meas from the exterior surface of exterior walls (and from extensions thereof, in the case of openings) and from the ce of interior demising partitions, including mezzani! warehousing or storage areas, clerical or office areas employee areas. (3) In the event the premises and underlying realti not separately assessed but are part of a larger parcel assessment purposes (hereinafter referred to as the "la parcel"), "taxes and. assessments levied and assessed upor! prsmises and the underlying realty" shall mean a fractl portion of said taxes and assessments on the larger pa (excluding taxes and assessments on any conmon areas therecn numerator of which shall be the Floor Area of the prernise! denoninator of which shall be the Floor Area of all the s availa5le for exclusive use and occupancy by tenants of larger parcel, whether or not actually occupied and open fo: business, pravidd that na equitable adjustment shall be ma21 buildings which are only partially completed on the date taxes and assessments become a lien. With respect tc assessments which may be levied against or upon the preinise the urderlying realty, or which under the laws the= enforc be evidenced by improvement or other bonds, or may be Fa annual installments, only the amount of such annual install (with appropriate proration for any partial year) and statu interest shall be included within the computation of the a taxes and assessments levied against the premises ani underlying realty. a (4) If at any time during the Lease Term under the 1; the United States Government, State, County, or City o political subdivision thereof in which the premises are sit1 a tax or excise on rent or any other tax however describ levied or assessed by any such political body, against Lar on acmunt of rentals payable to landlord hereunder, such t 5 a excise shall be considered "taxes" for the proposes of Article SB, excluding, however, from such tax or excis general income taxes, gift taxes, inheritance taxes and E 0 taxes. The term "taxes" shall also include possessory in taxes levied in lieu of real property taxes. Article 6 TIKING OF OCCUPANCY The schedule for completion of the facilities is as follows 1. Execution of lease November 1, 1986. 2. Completion of detailed preliminary plans speci fications - December 15, 1986. 3. Conpletion of final ?lam and specifications - Jan 1987. 4. Comzencene2t of canstruction - Febrcary 15, 1987. 5. Completion of premises and occupancy - Septembe 1987. ARTICLE 7 POS~SSICN Ax3 VSZ A. Pcssession of the preinises s3all be delivered to ' free and clear of ai1 tenznts and occupants and the ric either, ax< also free of lie_= and encumbrances, sxcept tho: my 52 speci fie3 in Article 10 hereof. Tenant shall u premises solely for the purposes and mder the trade speci fied in Ex'nibit ttB" attached hereto. Tenant shall nc or perinit the prenises to be useZ for any other purpc purposes or ur?der any other trade name whatsoever withoL written consent of Lardlord first hsd and obtained. Tenant not, without the prior consent of Landlord, sell merchandis vending machines or allow any coin operated vending or 5 machines on the premises. During said term the premises every part thereof, shall 5e kept by Tenant in a clea wholesome condition, free of any objectiomble noises, odc nuisances, and that all health and police regulations shi all respects and at all times, be fully complied with by Te B. Tenant shall use its best efforts to completed, o to be completed, all deliveries, loading, unloading and st to the premises prior to 1O:OO A.M. of each day. Tenant attempt to cause no delivery trucks or other vehicles ser the premises to park or stand in front of, or at the rear o premises from 1O:OO A.M. to 9:00 P.M. of each day. The Lar reserves the right to further regulate the activities ( Terant in regard to deliveries and servicing of the premise Tenant agrees to abide by such further non-discrimir e a 6 regul ations of I.a ndlord . C. Tenant shall not do or perinit anything to be done in about the premises nor bring or keep anything therein which not within the permitted use of the premises which Wi 11 in my increase the existing rate of or affect any fire or ot insurance cpon the premises or any of its contents, or caus cancellation of any insurance policy avering the building or part thereof of any of its contents. Tenant shall not do permit anything to be done in or about the premis es which will any way o'sstruct or interfere with the rights of other tenants occupants injure or annoy them or us e or allow the premises tc used for any improper, immoral, unlawful or objectiona purpose; cor shall Temnt cause, maintain or permit any nuisa in, on or about the premises. Tenant shall not commit or a1 to Se comitted any waste in or upon the premises. Terant sh not use the premises, or permits anything to be done in or ai: the premises, which will in any my conflict with any : statute, ordinance or governmental rule or regulation no\ force or which may hereafter be enacted or promulgated. Tei shall, at its sole cost and expense, promptly coinply with laws, stztutes, ordimnces and governmental rules, regulatior, requireaents now in force or which may hereafter be in force with the requirements of any board of fire underwriters or o sinilar bodies now or hereafter constituted relating tc affecting the conditions, use or occupancy of the premi excluding structural changes not related to or affectec Tenant's improvements or acts. The judgment of any couri c5mpeter.t j,xisdiction or the admission of Tenant in any ac apinst TerAnt, whether Landlord be a party thereto or not, Tezant has violazed any law, statue, ordinance or governne rule, regillation or requirement, shall be consulted of th& as Sezween the Landlord and Tenant. Frticle 8 UT IL IT IE S SE WI CE S a Tenant agrees, as its own expense, to pay for all wi gas, pwer, electric current, telephone, and all other simj utilities used by the Tenant on the premise from and afte delivery of possession thereof by Landlord. If any s.i~ch ch are not p.id when due, Landlord may pay the same, and any a so paid by Landlord shall thereupon become due to Landlord Ten2r.t as additional rent. Article 9 INIIEMLWTY - INSURANCE - WAIVER OF SUBROGATIQV A. Temnt covenants with Landlord that Landlord shal be liable for any damage or liability of any kind or fo injury to or death of person or damage to property of Terar any other person during the term of this Lease, from any whatsoever, by reason of the use, occupancy and enjoyment ( 7 e premises by Tenant or any person therecn or holding under Tena and that Tenant will indemnify and save harmless the Land1 from all liability whatsoever, on account of any such real claimed damge or injury and from all liens, claims and 2eT.a arising out of the use of the premises and its facilities, or repairs or alterations which Tewnt may make upon said premj but Tenant shall not be liable for damap or injury occasioned the negliFnce of Landlord and its designated agents, servant2 employees unless covered by insurance Tenant is required provide. This obligation to idennify shall include reasom attorneys' fees and investiqtion asts aRd all other reasor,a costs, expenses and liabilities from the first notice that claim or deqand is to be made or may be made. a B. Landlord and Tenant hereby waive any rights each have against the other on account of any loss or dam occasioned to Landlord or Tenant, as the case may be, tk respective property, the premises, or its contents or to 0' portions of the building arising from any risk covered by ar.d extended coverage insurance; and the parties each, on bel of their respective insurance con-mnies insuring the propert eityer Landlord or Tenant acpirtst any such lcss, waive any r of scSrogation that it may have against the Landlord or Ten as the case nay be. The foregoing waivers of subrogation SI be operative only so long as they do not invalidate any policy. C. Tenar,t further covenants and agrees thzt from and a the sr!bstantial con2letion of t3e prmises, Teriint will calrr: mzintain, at its sole ccst and expense, the followlxg type insurance, in the emouts speci fied any iri for fors hereimi provider3 for: a (i) PUBLIC LiA3iLITY. BOc?iiy injury liabi insurance with limits of not less t'nar? Five ilcndrd Tho1 Dollars ($SOO,OOO.CO) per person and One Nillion Dol ($1,000,000.00) per occurrence insuring against any anc liability of the insured W;, th respect to said premise arising out of the maintemnce, use or occupancy thereof property dainage liability insurance with a limited o less than Two Hundred Fifty Thousand Dollars ($250,00 per accident or occurrence. All such bodily injury liab insurance and property damage liability insurance 5 specifically insure the performance by Tenant 03 indemnity agreement as to liability for injury to or de? persons and injury or damage to property in this Arti cont ai ned . (ii) TENANT IMPROVEMELWS. Insurance covering a the items specified as "Tenant's Work" in Exhibit Tenant's leasehold improvements, a1 terations, additic improvements permitted under Article 11, trade fixt merchandise and personal property from time to time in, upon the premises, in an amount not less than eighty p (80%) of their full replacement cost from time to time a e the term of this Lease, providing protection apinst ( peril included within the classi fication "Fire and Extenc CoveraF", together with insurance a9 inst sprinkler dana vandalism and malicious mischief. Any policy proceeds shi be used for the repir or replacement of the property diai or destroyed unless this Lease shall cease and termin under the provisior:s of Article 18 hereof. e (iii) POLICY FORN. All policies of insurance pmvi for herein shall be issued by insurance companies, w genzral policy holders' rating of not less than A an( financial rating of Class X as rated in the most curr available "Best's" Insurance Reports, and qualified tc busir-ess in the State where the building is situated, shall be issued in the names of Landlord and Tenant, wk. policies shall be for the mutual and joint benefit protection of Landlord and Tenant, and executed copies s:~ch policies of imurance or certi ficates thereof shall dsliver& to landlord within ten (10) days after deliver: Dcssessisn of the premises to Tenant and thereafter wii Ehirty (30) days prior to the expiration of the term of t such 2olicy. 3-11 public liability and property dar policies shall contain a provision that Landlord, alth nan2d as an insured, shall nevertheless be entitled reavery under said policies for any loss occasioned tc its. servants, agents and employees by reason of cegligence of Tenant. As often as any such policy sk ex?ire or termizzte, renewal or additional policies shal giu?cxred and mainkair.ed by Tsrant in like inanner and to extent. All policies of irsurance delivered to Lan61ord coztain a provision that the company writing said policy 1 give to Landlord twenty (20) days notice in writin advance of any cancellation or lapse or the effective dat a;ly reduction In the ainounts of insurance. All pu liability, property darrage and other casualty policies s be written as prixary policies, not contributing with anc ir! excess of coverage which Landlord may carry. To extent Landlord's lender or ground lessor, if any requests, said lender and lessor shall also be name additional insureds and shall be given the notices tc same extent as Landlord is entitled. 0 D. Notwithstanding anything to the contrary contc Eithin this ARticle 9, Tenant's obligations to carry insurance provide3 for herein may be brought within the cove of a so-called blanket policy, or policies of insurance ca and maintained by Tenant, provided, however, that Landlord be named as an additional assured thereunder as its interes appear and that the coverage afforded Landlord will n reduced or diminished by reason of the use of such blanket p of insurance, and provided further that the requirement forth herein are otherwise satisfied. Tenant agrees to p Landlord at all reasonable times to inspect the polici insurance of Tenant covering risks upon the premises for policies or copies thereof are not required to be delivel a 9 TLa ndlor?. E. Landlord shall at all times during the tern here maintain in effect a policy or policies of insurance coveri the building of which the premises are a part, in an amount r less than eighty percent (80%) of full replacement cc (exciusive of the mst of excavations, foundations and footin from time to time during the term of this Lease or the amount such insurance Landlord's mortgage 1 ender requires Landlord maintain, whichever is the greater, providing protection agai any peril geEerally include? within the classificaticn "Fire Extendes Coverage,'' together with insurance against sprink dama9, vandalism and malicious mischief. Landlord's obliFt to carry the insurance provided for herein nay be brought wit the coverage of any so-called blanket policy or policies insurance carried and maintained by Landlord, provided that coverage afford& hill not be reduced or diminished by reascn the use of such blanket policy of insurance. Tenant agrees py Landlord as additional rent, during ech year or prtial y of the term of this Lease, the cost to Landlord of the inscra required to be maintained 5y Landlord on the premises UQ Article 9E for each such year or par tial year. Such addi tio rent for any partial year of the te-v hereof shall be prorate. a tine basis. Payment shall be made by Tenant within fif: (15) days after receipt of a written statement from Land!. setting forth the cost of such insurance and showi~g reasonable detail the manner in which it has been computed. the event the cost to the Landlord of the i~surance it required to maintain on the ?remises inder said Article 9E is s32aratel.y charged to Landlord by its insurance carrier, por~oOr? applicable to the premises of the cat of such inscr shall be that proportion of such cost which the Floor Ares of premises bears to the Floor Area of all the areas available exclusive use and occupncy by terants of the buildinlg, %'ne or not actually occupied and oper. for basiness covered by r insurance. (I) 0 Ar~cle 10 TIT-LE OF LANDLORD Landlord covenants that as of the <ate hereof there ai liens upon its estate other than (a) the effect of covene conditions, restr icti ons , easements, ground 1 ease(s> , i f any, mortgages of record, and other rights of my of record; (b effect of any zoning laws of the City, County and State wher building is situated, ad (c) general and special taxe: delinquent. Tenant agrees that as to its leasehold estat and all persons in possession or holding under it,- will co to and will not violate the terms of any of the aforementj matters of reard, or any other matters of reard. Article 11 10 a Landlord. E. Landlord shall at all times during the term her maintain in effect a policy or policies of insurance cover the building of which the premises are a part, in an amount less than eighty percent (808) of full replacement c (exclusive of the cost of excavations, foundations and footir from time to time during the term of this Lease or the amount such insurance Landlord's mortgage 1 ender requires Landlord maintain, whichever is the greater, providing protection agai any peril generally included within the classification "Fire Extended Coverage," together with insurance against sprink damag3, vandalism and malicious mischief. Landlord's oblipt to carry the insurance provided for herein may be brought wit the coverage of any so-called blanket policy or policies insurance carried and maintained by Landlord, provided that coverage affordd Will not be reduced or diminish& by reascs the use of such blanket policy of insurance. Tenant agrees pay Landlord as adtiitional rent, during ech year or prtial ; of the term of this Lease, the cost to Landlord of the insur: required to be maintained Sy Landlord on the premises UT Article 9E for each such year or partial year. Such additic rent for any par ti a1 year of the term hereof shall be prorate a time basis. Payment shall be made by Tenant within fif: (15) days after receipt of a written statement from Land] setting forth the cost of such insurance and showing reasonable detail the manner in w3ich it has been cosputed. the event the cost to the Landlord of the insurance it requireci to maintain on the premises ui-ider said Article 9E is separately charged to Landlord by its ir.silrance carrier, portiGn applicable to the premises of the cost of such insur shall be that propor tion of such cost which the Floor Area of premises Sears to the Floor Area of all the areas available exclusive use and occupncy 5y temnts of the building, whe or not actually occupied and open for business covered by2 insurance . II) a Article 10 TITLE OF LANDLORD Landlord covenants that as of t?ie date hereof there ar liens upon its estate other than (a) the effect of covena conditions, restrictions, easements, ground lease(s), if any, mortgages of record, and other rights of way of record: (b) effect of any zoning laws of the City, County and State wherc building is situated, and (c) general and special taxes delinquent. Tenant agrees that as to its leasehold estatl and all persons in possession or holding under it, will COI to and will not violate the terms of any of the aforementi matters of record, or any other matters of reard. Article 1.1 a 10 TEi%hT'S RIGXITS TO &MAKE: ALTES.TIONS A. Landlord agrees that Tenant may, at its own expense after giving Landlord notice in writing of its intention ti so, from time to time during the term hereof, make alterati, additions and changes in and to the interior of the prem (except those of a structural nature) as it may find necessar convenient for its purposes, provided that the value of premises is not thereby diminished, and provided, however, no alterations, additions or changes costing in excess of Thousand Five Hundred Dollars ($2,500.00) may be made wit1 first procuring the approval in writing of Landlord. addition, no alterations, additions or changes shall be mad any store front , the exterior walls or roof of the premises, s'hall Tenant erect any mezzanine or increase the size of sam~ one be initially constructed, unless and until the wri ansent and approval of Landlord shall first have been obtai In no event shall Tenant make or cause to be made any penetra through the roof of the premises without the prior wri approval of Landlord. Temnt shall be directly responsible any and all dainages resulting from any violation of provisions of. this Article. all alterations, addi tioris, changes to be made to the premises which require the approva Landlord shall be under the supervision of a competent archi or compecent licensed structural enqineer and made in acard with Plans ar,d Speci fications with respect thereto, approve writing by Landlord before the commencement of work, where approval is required gursilant to the provisions of this Arti All work with respect to any alterations, additions, and cha mcst be done in a good and mrkmanlike manner and dilige: prosecuted to completion to the end that the premises shal ai1 tim- be a complete unit except during the period of ~i Tjpcn ampletion of such wrk, Tenant shall file for remrd ir office of the County Recorder where the building is locat Nodce of Completion as permitted by the law. Upon termina of the Terant's leasehold estate such alterations, additions improvements shall be perform& and done strictly in acmrd hith the laws an6 ordimnces relating thereto. In performing work of axy such alterations, additions or changes, Tenant s have the work performed n such a manner as not to obstruct access to the premises of any other tenant in the building. 0 o B. In the event that Tenant shall make any perxi alterations, additions or improvements to the premises under terms ar,d provisions of this Article 11, Temnt agrees upon part to carry such insurance as required by Article 9C mvering any such alteration, addition or improvement, it 1 expressly understood and agreed that none of such alterati additions or improvements shall be insured by Landlord under insurance as it may carry upon the building of which the prem are a part, nor shall Landlord be required under any provis for reconstruction of the premises to reinstall any a1 ter ati ons, impro vement s or addi ti ons. C. At Landlord's option upon termination or expiratic 11 a this Lease, Tenant shall remove any or all of the improvem constructed or installed by Terant on the premises,, with Te reLpairing any damages to the premises caused by such removal. Article 12 MECWi CS ' LIENS A. Tenant agrees that it will pay or cause to be paid costs for work done by it or caused to be done by it on premises, and Tenant will keep the premises free and clear of nechanics' liens and other liens on account of work done Tenant or persons claiming under it. Tenant agrees to and s' indemnify, defend and save Landlord free and harmless aga liability, loss, damage, costs, attorneys' fees, and all o expenses on account of claims of lien of labrers or materia Gr others for work performed or materials or supplies furni for the Temnt or persons claiming under it. B. If Tenant shall desire to contest any claim of lier shall furnish Landlord adequate security of the value ore in amount of the claim, plus estimated msts and interest, or a of a responsible corprate surety in such amounc conditione the discharge of the lien. If a final judginent establishing validity or existence of a lien for any amount is entered, Te shall pay and satisfy the same at once. C. If Temnt s'nall Se in default in paying any c5arge which a mechanics' lien clain and suit to foreclose the lis2 been filed, and shall not have given Landlord security to prc the property and Landlord aFinst such claim of lien, Land may (Sut shall not be so required to) pay the said claim and costs, and the amount so paid, together with reasor,? attorneys' fees incurre2 in connection therewith, sh2.l: immediately due and oking from Texant to Landlord, and Te shall py the same to Landlord with interest at the nax lawful rate from the dates of Landlord's payments. Should claims of lien be filed against the premises or any ac affecting the title to such property be commenced, the p receiving notice of such liens or action shall forthwith give other party written notice thereof. Landlord or representatives shall have the right to go upon and inspect premises at all reasm-able times and shall have the right to and keep posted thereon notices of non-responsibility, or other notices which the Landlord may deem to be proper for protection of Landlord's interest in the premises. Temnt sh before the commencement of any work which might result ir such lien, give to Landlord written notice of its intention t so in sufficient time to enable the posting of such notices. Article 13 ADVERTISING SIGNS Tenant shall not utilize any sign on or about the premises e: a 12 0 as 'has been approved by Landlord. Tenant shall not affix maintain xpon the glass panes and supports of the show wind (and within 24 inches of any window), doors and the exter walls of the premises, any signs, advertising placards, naa insignias, trademarks, descriptive material or any other s like item or items except such as shall have first received written approval of Landlord as to size, type, color, locat: copy, nature and display qualities. Anything to the contrari this Lease notwithstanding, Tenant shall not affix any sigr the roof of the premises. In addition, no advertising med shall be utilized by Tenant which can be heard or experier outside Tenant's premis es, including without limiting generality of the foregoing, flashing lights, search lig? loudspeakers, phcnographs , radios or television. Temnt sh not display, pint or place or cause to be displayed, paincec ;?laced, any handbills, bumger stickers or other adver ti: devices on any vehicle parked in the parking area of Bctilding, whether belonging to Tenant, or to Tenant's agent to any other person; nor shall Teriant distribute, or cause tc distributd, in thse Building, any handbills or other adver ti devices, aEd in the event of a violation of this covenan. Tenant, Tenant shall py to Landlord the cost and exp! Building. Article 14 FIXTLRES AND PERSCXAL FFXIF'ERTY -a L,,cessary to remove any such unauthorized material frgm A. Any trde fixtures, signs and other persm.al propert Terant not pernanentiy affixed to the premises shall remain property of Tenact and Landlord agrees that Temnt s'r!all have right, provide3 'Lerant be not in default under the terns of Lease, a? any time, and from time to time, to resove any and of its trade fixtures, sign ant: ot3er personal property w'nic may have stored or installed in the preaises, including ht limi ting the same to CoUnters, shelving, showcases, mirrors other movable personal 2roperty. Nothing in this Art contained shall be c?ezmed or construed to permit or allow TE to reinove so much of such personal property, without immediate replacenent ther3of with similar personal proper t comparable or better quzlity, as to render the prem umuitable for conducting t3e type of business speci fie Exhibit "B" attached hereto. Tenant at its expense s immediately repair any damage occasioned to the premise reason of the removal of any such trade fixtures, signs, other personal property, and upon the last day of the Lease or a date of earlier termination of this Lease, shall leave premises in a neat and clean condition, free of debris. trade fixtures, signs and other personal property installed attached to the premises by Temnt must be new when so inst: or attached. B. All improvements to the premises by Tenant, incl, but not limited to light fixtures, floor coverings 0 13 0 partitions, but excluding trade fixtures and signs, shall be the property of Landlord upon expiration or earlier termina of this Lease. C. Tenant shall pay before delinquency all ta: assessnents, license fees and public charges levied, assessel imposed upon its business operation, as well ES upon its tx fixtures, lease-hold improvements (including, but not limited those Tenant is required to make in accordance with provisicns of Exhibit "C" hereof), merchandise and other pers property in, on or upon the premises. In the event any 5 items of property are assessed with property of Landlord, t' and in such event, such assessment shall be equitably div between LaRdlord and Terant to the end that Temnt shall pay its equitable proportion of such assessment. Landlord SI- deterxine the basis of prorating any such ass essment s and I 6eteinninatiorL shall be binding upon both Landlord and TeEar.t. taxes, assessments, fees or charges referred to in this parag shall be considered as taxes under the provisions of Artic hereof. Article 15 ASSIGKiNG, MORTGAGING, SUBLETTING, CHANGE IN CD?$OWE O\.J?;J%,?S e A. Tenant shall not transfer, assign, sublet, enter licerse or concession agreements, change ownership, mortFg hypotl?.scate this Lease or Tenant's interest ir, an6 to prezises without first procuring the written ~~nsen Landlcrd. Any attempted transfer, assignment, sublect licerse or ccncession agreement, change of ownership, mort9 5 hypthecation without Landlord's written coment s5all be an2 cor?fer no rights upon any third person. Without in an) 1iaitir.g Landlord's rights to refuse to give such consent for other raziscn or reasons, Landlord reserves the right to refzs give such consent unless Temnt remains fully liable during mexpired 'tern of the Lease and Landlord further reserves right to refuse to give such consent if in Landlord's reasor business judgment the quality of merchandising operation i my be in any my adversely affected during the term of Lease or the financial worth of the proposed new tenant is than that of the Tenant executing this Lease or of Tenant Tenant's Guarantor as the case may be. Tenant agree reimburse Landlord for for Landlord's reasonable attorney incurred in conjunction with the processing and documentatic any such requested transfer, assignment, subletting, licensil concession agreement, change of ownership, mor tgagc hypothecation of this Lease or Tenant's interest in and tc premises. B. Each transfer, assignment, subletting, lice concession agreement, mortFge and hypothecation to which ' has been consent shall be by an instrument in writing in satisfactory to Landlord and shall be executed by the transf as signor, s ubl es sor, 1 ice ns or, con ce s si ona ire, hypo thecat c 0 14 a mortgagor and the transferee, assignee, sublessee, licen: concessionaire or mortpgee in each instance, as the case nay and each transferee, assignee, sublessee, licens concessionaire or mortgagee shall agree in writing for benefit of Landlord herein to assume, to be bound by, an( perform the terms, covenants and conditions of this Lease tl done, kept and performed by Tenant, including the payment of amounts due or to become due under this Lease directly Landlord. One executed apy of such written instrument shal delivered to Landlord. Failure to first obtain in wri Landlord's consent or failure to comply with the provision this Article shall operate to prevent any such trans1 assignment, subletting, license, concession agreement, mort or hypthecation from becoming effective. C. If a Tenant hereunder is a corporation (excel carpration wPLose stock is traded on the NYSE or the AMEX), o an mincorporated association or partnership, the trans assignment or hypothecation of any stock or interest in : corporation, association or partnership in the aggreptc excess of zwenty-five percent (25%) shall be Zsened an assign within the meaning and provisions of this Article 15. Rc ticle 16 T'EUQiiT'S C3NDUCT CF BUSINESS A. Tenant covenants and agrees that, coritinuously uninterruptedly fro?, and after its ini tiai opening for busir it will o?erate an2 anduct witfiin the prenises the busi which it is pernittec7. EO operzte an2 conduct uder the provis hereof, exce9,t while the prenises are untenantable by reso fire or other casualty, and that it will at all tins kes? maintain within and upon the prernises and adequate stoc nerchanSise and trade fixtures to service and supply the u and ordiriarry demands and requirements of its customers and it will keep its preinis es in a neat, clean and or2erI-y condi t Tenant agrees that all trash and rubbish of the said Tenant s only be deposited within receptacles as provided by Landlord that there shall be no other trash receptacles permittel remain outside of the premises. Landlord agrees to cause receptacles to be emptied and trash removed at Tenant's cost expense as part of the common area expenses. B. Tenant shall faithfully observe and comply with rules and regulations that Landlord shall from time to promulgate and/or modify. The rules and regulations shal binding upon the Tenant upon delivery of a copy of the Tenant. Landlord shall not be responsible to Tenant for nonperformance of any said rules and regulations 5y any o tenants or occupants. All such rules and regulations shal non-discriminatory and shall be applicable to all users tenants of the Building. Article 17 a 15 a REPAIRS AND MAINTENANCE A. Tenant agrees at all times, from and after substant completion of the premises, and at its own cost and expense repair, replace and maintain a good and tenantable condition premises and every part thereof , excluding the roof, exter walls, structural parts of the premises and structural fl (f 1cor covering, including carpeting, terrazzo or other spec flooring installed by or at the request of Tenant, tc maintained by the Temnt), and including without limit ation utility meters, pipes and conduits, all fixtures, conditioning and all Tenant’s signs, locks and closing devi and all window sash, casement or frames, door and door frai and all such items of repair, maintenance and improvement reconstruction as may at any time or from time to time required by govercme2t agency having jurisdiction thert Landlord will contract with a service company for mont maintemnce of the heating and air conditioning equipment on roof and Tensct shall pay Landlord for this service on a mmt basis. B. Subjecz to the foregoing provisions hereof, the Land: s;iall keep and maintain in good and tenantable condition repair, the roof, exterior walls, structural parts of prernises and skructural floor, pipes and conduits outside prernises for the furzishing to t:?e prenises of various u5li ie:rcep= to the extenc that the sane are the ojligation of -;??rogriate 2ublic utility coxpny); provided, however, I Lancilorc! snall zot be recuireci ta rnayce repalrs necessitzte res,son of the nl-gligencs of Tenant or anyofie c?aininr; ur isAnant, or by reasox of the failure of Tenant to perfora observe ary on3itions or agreeaents in this ease antzined, c&:se by altsrations, additlo~s, or irnprovenents mzde by Te or anyone claiiing under Tenanc. Anything to the contr r.otwLkhstanding contained in this Lease, Landlord shall no any Kay be liajle t3 Tenant for failure ro make repairs as he; specifically required of it rinless Terznt has previ3usly noti Landlord, in writing, of the need for such repairs and Land1 has failed to con~.ilence making repairs within 30 days al receipt of such notlce ane to complete said repairs with: reasozble period of time following receipt of TeMnk‘S wri notification. Any costs Landlord incurs from time to timc connection with the maintenance and repair of the prenise: a5ove provide2 shall be billed by Landlord to Tenant and I receipt of such billings Tenant shall immediately reimbl Landlord for said costs. “l e C. If Tenant refuses or neglects to make repairs anc maintain the premises, or any part thereof, in a mar reasonable satisfactory to Landlord, Landlord shall have right, upon giving Tenant reasonable written notice of election to do so, to make such repairs or perform s maintemnce on behalf of and for the account of Temnt. In event such work shall b? paid for the Tenant as additional 16 a promptly upon receipt of a bill therefor. D. As used in this Article the expression "exterior wall shall not be deemed to include store front or store fronts, pla glass, window cases or window frames, doors or door frame. security grilles or similar enclosures. It is understood a agreed that Landlord shall be under no obligation to make a repairs, alterations, renewals, replacements or improvements and upon the premises or the mechanical equipment exclusive serving the prenises at any time except as in this Lea expressly provided. a E. Upon any surrender of the premises, Tenant sha: rdeliver the premises to Landlord in good order, condition a state or repair, ordinary wear and tear excepted, and excepti suck itens of repair as may be Landlord's obligation hereunder. Article 18 RECGtSSTX LC I CX A. In the event the premises be damaged by fire or ot3 perils covered by Landlord's fire and extended covera i?s urancn, , Landlord siial1: (i) Wit>in a period of ninety (90) days thereaft( c3;rxence repair, reconstruction and restoration or' said prerni. a+-.< ate the sami diligently to ampletion, in wnich 2vc ii.-3 Le-?se shall contince in full force and effect; or -. -_- - (Fi) In the event of a par ha1 or total destructi: of thile prenises during t5e last three (3) years of the t kereof, LailZlor!i and Tenant shall each have the option ce,-;ninake this Lease upon 5iviing written notice to the other exsrcise thereof within thirty (30) days after such dstructi E'er purposes of this paragra,a (ii), "pzr tial destruction" sh< bs dessed a destruction to an extent of at least thirty-tkee one-third percent (33-1/3%) of the then full replacezent cost the premises as of the date of destruction. e B. In the event the premises shall be damaged as a res of any flood, earthquake, act of war, nuclear reaction, nucl radiation or radioactive contamination, or from any ot casualty not covered by Landlord's fire and extended cover insurance, to any extent whatsoever, Landlord may within nir (90) days following the date of such damage, commence repa reconstruction or restoration of said premises and prosecute same diligently to completion, in which event this Lease sh continue in full force and effect, or within saia ninety- period elect not to so repair, reconstruct or restore 5 premises in which event this Lease shall cease and terminate. either such event Landlord shall give Tenant written notici its intention within said ninety-day period. C. In the event of any reanstruction of the premises UI 17 0 this Article 18, said reconstruction shall be in str confomity with the provisions of Exhibit "C" hereof and to extent of the work as therein set forth as "Descriptio: Landlord's Work" and "Description of Tenant's Go: Notwi thst anding that a1 1 remns tructi on work shall be perfo by Landlord's contractor ilnless Landlord shall otherwise a in writing, Landlord's obligation to reconstruct the pren shall be only to the extent of the work as describel "Description of Landlord's Work" in Exhibit "C" hereof; Ten, at its sole cost and expense, shall be responsible for the re and restoration of all items set forth as Tenant's Work in Exhibit "C" and the replacenent of its stock in trade, t fixturzs, furniture, furnishings and equipment. Tenant si c3inmence installation of fixtures, equipment and merchaa hereof pronptly upon delivery to it of possession of the prern ani? sha.2-1 diligently prosecute such installation to completic D. Upon any ternination of the Lease under any of provisions of this AI ticle, the par ties shall be released the without further 951iFtions to the other party coincidect the surrehder of possession of the prenises to the Land1 except for items which have theretofore accrued and be uxpaid. In the event of termination for reason of damge by or otlier perils and such danage is covered by Tenant's fire extended coverage insurazce under Article 9C (iv), all proceeds covering the items specified as "Tenant's Work Exhibit' "C", and Tem.?t's leasehold inprovements, but exclu proceeds for tradz fixtures, merchandise, signs and o ~ersonal property, shall Se disbursed and paid to the Landlsr E. In the event of repair, reco2sEruction znZ restora as herein provide?., the miziinum aimr:al rental proviZEd to be under Ar tic1.e 1 hereof shall be a5s.t ed proporti mately wi t3 2::;rez in which t'r.e Terant's use of the premises is impa conmencing from the date of datruction and cor.ti nulng durir?$ ceriod of such repair, reconstruction or resteratian. Ts shall antinae the operation cf its lxsiness on the pro::. during any such period to the extent reasonably practicable the stadpoint of prudent kusiness ma,-agement; and the obli9 of Tenant hereu,nder to py percentage rental and additi rental shall remain in full force arid effect. Temnt shall be entitled to any compensation or darsges from Landlord for of the use of the whole or any part of the premises, or building of which the prem.ises are a part, Tenant's pers property or any inconvenience or annoyance occasioned by dam ge, repair, reconstruction or restoration. @ 0 F. With respect to any partial or total destruction w landlord is obligated to restore or may restore under any of provisions of this Lease, Tenant hereby waives any statu rights of termination which may arise by reason of destruction. G. In the event of any damage to the premises, Tenant s give to Landlord written notice of such damage within 5 18 a after its occurrence. Article 19 @ COXMON ARELYS AND AUTOMOBILE PARKING A. Landlord shall provide up to a maximum of 18 parkir spaces. If during the term of the lease Tenant, on a reguli basis, requires additional parking, Landlord shall agree provide additional parking spaces in which Tenant shall p Fifty ($50.00) pr space, per month in 1986 Dollars, plus C.P. adjustnent every year. B. Tenant and its employees and invitees are, except otherwise speci fically provided in this Lease, authorize eiii7sxernci and privileged to use the ccmnon areas in minnon wi ot'ner perscns dclring the term of this Lease. Landlord agree without cost or expense to Tenant, to construct or cause to constructed, the comzon areas generally upon the area showr. the site plan attached hereto and iaarked Ex'nLbik "A", and mintrlin ax2 operate, or cause to be naintaineci and operat (exze2t as hereir'after provided with reference to mst m:,interance) , sai2 con^^ areas at a1 1 times following completi L.sre3f, fcr the beEefit and use of the mstomers aKd patrons T=na::t, axd of ccher tsnants, omsrs, ar,d occcpants of the la conski tatin,: t?,e ailildfnq of which the prexises are a part. L' C. Lar,?',ord s:?all ke2=, cr causi! to be ke2:t szid t>mri areas in 2 11222, clezn an2 srzzrlv c=:r..3iticn, gzo~erly Ii:;>i 2.~5 landsc3?eZ, ar-2 ~3.311 rezziz any iiz,maqe to the faci li kJ LLizr2~x, DCL all exse2ses in cocnection with sai2 CO~IIIGP. arc s'n3l.I je char~& an? proratsd in the xiT';fier hereinafker 5 .c Lv- -~ r f'? --. It is c:nZer~1~t3od zi~d agrezc! that the p,rase "expf3.?s?s csn-??cticfi with said common ars1s" as used herein shall CCSstriLeC to ineLude, but nct be 1 imi ted to, a1 1 sums expended cc?-.=sc ti oa x: cri said ccmincn areas for al 1 general nai r,te mace rezzirs, r~surfacing, or paintins, restriping, cleaning, tr re:r.cvaL, sw2eping and janitorial ser vices, maintenance q re2air of sidesgalks, curbs, and building signs; sprink systems, plant and landscaping; lighting and other c.ti li ti directional sic;ns ar.d other markers ar,d bumpers : naintenance rspair of any fire protection systems, lighting systems, st1 Zr2inagz sirstems and any other utility systems; personnel iic2lexent SLIC'L-I services including, if Landlord deems necess? the mst of security guards; real and personal property tax poss essory interest taxes, and assessments on the improvene a3d land comprising said common areas: any governmen imposition or surcharge imposed against Landlord or asses zgz ins t the automobi le parking area of any other portion of mmmon area; depreciation on maintemnce and operating machir and equipment (if owned) and rental paid for such machinery equipment (if rented), adequate public liability and prope damage insurance on the common areas (under which Tenant shall named as an additional assured). -. a &-- . ,. a 19 s:?;sll include costs for the accounting, bookkeeping collection of the expenses in connection with said common ai in an aizount equal to ten percent (10%) of Ter-ant's pro 1: share of the total of the aforementioned expenses for e calendar year. Landlord may cause any or all of said service: be provided by an independent contractor or contractc Anything to the an tr ary notwi thst anding contained hereinabc all expenses in connection with the original construction installment of t:he common areas shall be at the sole cost expense of Tandlord and shall not in any event be charged to Teza nt . o D. Tenant shall pay to Landlord! Tenant's pro rata sharc such corninon area expenses in the following manner: (i) From and after the date the term of this 1ez:s; proved fer in Article 1 hereof has comnenced, but subjec: adjustinent as hereinafter in this scbparagraph (i) pro-iic Ter'azt s-nall. -pay Landlor2 on the first day of each calendar iilc of t3.e tern of this Lease an amount estimated by Lazdlord tl Temnt's prc rata share of such comnorA area experses. Lancil may adjust the estimated msnthly charqe at the end of calendar quarter OII the basis of Landlord's experience re2sa;ably anti cipated COS t S. (ii) Within thirty (30) days following the end of i cs,iendar quzrter or, at- Landlord's option, each calendar ye L,s:!c?iord s:??..iL furnish Temnt a stateF<ent averin-; t3-e c??le: cuxter oz ye2.r just expired, certified as arrect Sy a certi pujlic acw.mt mt or an autl.iorizeEfd representative of Lad1. sko;.;inr; the total opereting cost, the anount e< Terzint's rzka share of such anmon are2 expr?ses for such czlendar q;z: 0:: year an5 the ip-ynents nade by Tenant with respsct t3 .i psri02 as set fort:? in subparaqraph (i). If Ter,ar.t's _sro I stlzre of such conmon area expemes exceeds Ter!Ant's pynen- made, Tenant shall pay Landlord the deficiency within teli Gays after receipt of such statenent. If said -pzip,"nLLs excee offset the excess agiinst payments next thereafter to beam Landlord as set forth in said subparagra@ (i). e (iii) Tenant's pro rata share of the total comnon i expenses for the previous calendar quxter or year shall be portion of all of such expemes which is equal to the propor' thereof which the number of square feet of Floor Area in prenises bears to the total number of square feet of Floor i of buildings in the entire Building which are from time to t occupied and open for business as of the commencement of 6 calendar quarter. There shall be appropriate adjustment Tenant's share of the mmmon area experses as of the mmmencel and expiration of the term of this Lease. at all times have the right and privi: of determining the nature and extent of the common areas, ani making such changes therein and thereto from time to time wl in its opinion are deemed to be desirable and for the 1 F. Landlord shall 20 Q interests of all person iising said cornmon areas, ir,cludinq, location and relocation of drivgways, entrances, ex: automo'alle parking spaces, the direction and flow of traf irstallation of prohibited areas, landscaped areas, and all o' f acil i ti es thereof. G. Xothing contained herein shall be deened to create liability upon Landlord for any damage to motor vehicle2 astoizers or exployees or for loss of property from within motor vehicles, unless caused by the negliqence of Landlord, agents, servants or employees. a H. Landlord shall alsa have the right to establish, from tine to time change, alter and amend, and to enforce a;a Tenant ar.d the other uses of said c3mmon areas such reasynz r,11es and regulations (including the exclusion of enpio:. p<a~F;!-n.j the.:efron) as may be deemed necessary o; advisable the ;?roper and efLicier!t operation aTid mainteTance of s3id c3 are-.s. T:ie r!iles and resuiations herein provided. may ir.cl1 ,LLhol-it li:r:itatioT., the ho~rs durir,g which the .. common sh.l cpen Zcr use. . T 2cc'ridlord - may, if in its oprnrcn t3.e ~2x5 a,r!visai71e, esta5lish a systein or systens of validation 01: 3 type o?nratior,, ir,cluding a systein of charges aqainst I validat..sd'prkinT checks of users, ami Temnt zcjrees to ccn iise of it customers ar;d ~zkrons with r?s?ect to saie a:-ltonc': p=;i.ik<i~cj arsz, prcvided, hewever, that all siich rulzs y.: - ...2 .-T u 1 c t t: LL,...., h 11. c 2y.d s-1~3. t-ypes of oseratiori or v:llicieition of p%r c~~:~;~~;;s arid o$>*p-? _- rw.~ ters affscki ng K0-e cus+:o~srs ., ..n2 Lpatr:>~: * ... c - c Ls azd aSide Sy all s::ch r13:lzs a25 reg:-iLations in its CS~ acd .. m Lc-Lk -, .>> .I ;- .- ~3.all ;i o3l.i ~qcall.~ zn", wFt'r,oct CLSCT~~~~. natior! 2~ L_ A persc:~.s enti cl3d tc: :pie 'JSS ~f saiz s~t:3mcji:e p;ir> f 3.c ili ti es . a i. L,z:i?;.zrf! s';?.all at 21: times duriilg t3e term cf ! i,easei;ave t'ni sole a~.e exclusLve control of t'rs co3micn dr a26 may at ar-y tine and frcx tixe to tine ??uring t3e :eLm ".e: esclude a?.$. reskzal? ar,y prso:: frGa cse or ccccpancy theri excepcinc, hs>;zver, Soria fide customers, patroris and serv' suppliers of Terant, and other TenaRts of Landlord who make of saie arsas in accordance with the rules and regulat5 established by Landlord, the other temnts of Landlord and other cwner of the building to use the same in cominon i TerUnt, and it s5all by the duty of Tenant to keep all of 5 are2s free and clear of any obstructions created or pernittei Terant or resulticrj from Temnt's operation and to perinit the of any said areas only from nornal parking and ingress and eg by the said custoner, patrons and service-suppliers to and the building occupied by the Tenant and other tenant: Landlord. ,. J. If in the opinion of Landlord mauthorized persons using any of said areas by reason of the presence of TeMn the premises, Tenant, upon demand of Landlord, shall enforce rights against all such unauthorized persons by appropr proceedings. Nothing herein shall affect the rights of Land 0 21 at ar.y tixe to rexcve any such unauthorized p2rsons frax areas cr to restrain the use of any said areas by unauthsr persons. ARTICLE 20 BAX'KRLPTCli - INSO',VE:JCY e Tenznt agrees that in the event all or substantially a1 %;.ant's assets be placed in the har,ds of a receiver or truz 2nd stic'n receivership or trusteeship continu2s for a perio thirty (30) d;il/st or shoxld Temnt xake an assignment for benefit 0-T c~ditors of b.3 fically adjudicated a Sankr~2t s?.?o,..ild Terznt jL r:sti ttite any 2roceedings uder the 2inkruptcy 2.7 the ~~3.2 RCW exists or uzder any anen?nent thereof which i.,r:reztfti-:r be enacti:d, or ~nder any other act relatins to sut.?ect c;f bankrl-lpt-cy w3,erein Tenant seeks to be ad judicz': b;?2kru2t, or to be c3isci1arced. of its debts, or to effect -1 I of liqu:..?.c:.atior., cn~sosrtic:-1 or re:>rF.nization, or si;oi-lC! ir. volilnz~ry proce-arng bs filed against Teriant LIEC??~ any n;. -,<r~~~~:z~ , 1 z+; :< a7.Z scch sroe&ir,g not be ~~er~ovec! with.in ::I ck-,~'" ?.:.ereafter, ;rien te2P.t sk;ali be in default under LeFise, :jnd this i,ezse ar zr:;~ interesc rn and to the ?r.=ia ~52.11 n~t Ss,ccne an ass?: in any SGC~ proceedings ~.nri, in sz.-h zvent and i?, adJi1iJr-i tc, any and all rights or remefii? L:.xZLozd here:lr:o?r or by Law provided, it sr!a_.1 bs lawful .. ... .- - _L - -> . - .. .. .- .. - -. -- 7. :-....-.-or6 ! 7 Y; -, , to declare the tern, 'hereof endea and to re-entP" ".:$-;y~f~LI_)i;L - .. A: y:+c.z :-.E s'n,zl 1 h;iv e no fur tiler cl ais Zp.2: I :, . __.._ +JL.,', :-SI~ of this ??zticlc 20 ~Ball also a:;:!: A_ ia~s ar:d tz.?<e ~ossi:scion thzreof ar.,5 reeove all p .. .. -..- .I 7 ;, -\7. _- - ,- . rl,?tGz 0: <:Il, L,E:dsc. 0 .. 'qp.y 1Cl.Z 2 1 zr,.i->-;.LyL's zy T zm :\y A. Should Teriant at any tine by in default hereunder resi,"ect to any rental pyxents or other charGes pap5le by Te (5) dzys after written notice from Landlord to Temnt; or sh the Tenant be in default in the prorpt and full perfOr??anc any other of its promises, covenants or agreenents he coztained and should such default or breach of perform continue for more than a reasonable time (in no event to es thirty (30) days) after written notice thereof from Landlor tenant specifying the particulars of such default of beac performance; or should Tenant vacate or abandon the premi then Lzindlord may treat the occurrence for anyone or more of foregoing events as a breach of this Lease, and in additic any or all other rights or remedies of Landlord hereunder an the law provided, it shall Se at the option of Landlord, wit further notice or demand of any kind to Tenant or any 0 person : ;eL= : e1a 6 e +, 'r and shoulc! such default mntin1.x for a period of 22 0 (a) %e right of Lar,dlord to declare t:ie tery, ;>.ereof ani re-enter the preinises and. take possession thereof and rem ve prsc?r..s t:?erefrorr., and Temnt shall have no further cTaix the: or ti~ereunder; or (13) T're right of Landlord without declaring this Lease e: to re-enter the prenis es and. occcp>'the whole or ar.y park ?her from ani! on acc=,w.t of Tem:?t to collect said rer.t ar,d a,y ot r2nt th5.t ~.ay thereafter becDne payable. a (c) The right of Landlord, eve?. thocsh it rr,ay. nave ei:ter&! the preinises, to t;-,ereafter elect to terninate this LI and all of ths rights of Temnt in or to the pi-emtses. B. SF'ould iardlor? have re-entered the pre.r!ises uder ~.c~T~.sc.; i!::de;: ths 2r~visions of s~:?.p.>.racjr::~& (3) ?.5ove, icl.;d] I. !lot bz d~e:;.ed to .z?.ve ternir.:ak-?c! this lese, cz rlizy ~f Tens:= ts pay rent t?;i?reaEter to accrue, CT ?.l;ky,r 2 for d~z,z.:<s a u~-~dsr any of the p-~visj.o,-..- Y!sreof, by r - .. 22 - 5 - .. '- : :- v "..- ~ 32 zzv zctlor. ir:. ilr.1.-wf~~I detainer: .. C,,,:.e:'A;i.52, kc> ob'; 2.111 pccsrr,sLoi-. of t'n3 ",re?'iis3,5, :;:,less >.nC!' cl_ ='.. CL1 -~ 1 ;;::7;i. .I rocifis;: r-' .:en22t ir! r,.xiti.ng cna~ it :n..as so electp* .- . in:...?? this lezse, a~.d ~2nnap.t f~r>:i.er cover-3r.t~ t:i.at ie.7 51; i,<?E(5I.gZ<i of aA>y noti::" p<:rs:.3nt to the CI>:.Z> i-2.: 5': ;?tutes ~f the St ate w'n~rr: t4=. bci.,L.di;lg is sj.tx<:.?e< s1rr-render cf 3~~;~se~~ioz - D!JrS;I;-?T?.i: to suck 20ZiC'? s:?a1:_ >r2 nl.?-::f-S to tlie c9,nl--rary 2f che :' 1 0: 3;: 8': _. - a tile axvier cz GW?ers thereof. c. s1:.~,21-d L;;r.c',?,or:?. slsct kr, t~~:y.i~~t~ ?'>.is lsise 1:zzc:: La. ::zAgrC ;lay re:. .. I F~C. visi ~fi of ~;iijpazcra$.s {z. ) or t:; j aLq ve, from Terlnt as dmagzs: (i) the worth at t>e time of aytzzd of any uzpiE rent F ha< bet.:, earned ~t the time of scch teminatiox; plus (ii) the worth at the tine of t'he aaount by r.ihj.c:? unpaid rent which would have Seen earned afkar termination I tha time of award exceeds the amount of stich rental loss tE proves could have been reasoraSiy avoid d: 2lus (iii) The worth at the time of aard of t3e amount by \ the unpaid rent for the balance of the term after the tir! award exceeds the amount of such rental loss that Tenant PI could be reasorably avoided; plus (iv) any other amount necessary to compensate Landlor( all the detriment proximately caused Tenant's failure to pe 23 0 his oblimticns nder this Lease or which in the ordinz:y coi of things :.auld be likely to reslult therefrom, inclading, but limited tc any costs or expenses incurred by Lar,c';lcr? maintaining or preser vincj the premlses after such defa~ p.-eAmrinq the prenises for reletting to a r.ew tenant, any rep cr alterations to the pre?\ises for such relettirig, lea5 c:%nission, or any ot3er costs necessary or appmpriate to rt the premises. a (v) at Landlord's election such okher a;r,ounts in aiditior OY in iieiu of the aEorngcFng as ray be permitted fron t,mc tiae by the iws of tl?e StcLe where tile building is sitmted. 0. 4s used in subpar,~cjraphs (I) and (ii) above, the "KC -e oE :eri FercerLt ( 1-22) per an?,u:.:l. AS us ei! in sc'z~ar;..g- F< the t .ne 0 z:.+~.rd" i:; eccpilted by 21 l.oF;i ng intere::c at \l;i) a.>:ve t3.e ":.;.cr,r! 3.5 the tixe of ;Iwar,f:'! is ,co.::,-c:-:e,, ~~nti~c; s::~?I a.i?.~:,:i?t a? ~he di.sm.~?,t rzce 3.5 the ?<<e YX 7s:~ resk t3 t'3e Lncati2:l of t:?e ?x ildins zt the cjf a;.;;l:-" =,:as ~y-2 3erlz;21;t id.%). 'I - - i ,. T Tar 2.1 I DU~D!:S - E:Z gf ::7i.is Ay ;lei? 21, cne tern "r .. _. . 5.:: 21 1 -.;,e ~~~~L 5.2 -. I- L., - 1 ;)e k;?? i'.!.n1.i:iu:,~ar,!lcal rental. arid all c . . __ > > -~ ~ r __ .,,. ,-. .,: ./. .-, cI , L. i <.: .. -8 o I-- 5 ?i -3 5:~ s 1 cj c; f t ii 2 a TI 3 r zCj2 .LL-&i-<' - ,s rer.;ij-r~:~2 c.2 i_,? rl,zi,2 hx; --.'-- i TI..cl T.L_ pirsi;a 7,:: to :he te;T.s zf .. s..;.2-3 :i:!ms, c:.h,?r ::.2&?A x:?$ Xli2LYiL:Kl ar.nu3-1 r -, :, .'. 7:: -. ~ __.. ._ . ~ - i - - L;? _. <?dL::g si ;it ..' 'i t3 CO?F.Ut" r; c i-y.: z r 5. 2.7 4 r2 :: G:y-y'Ai::2 - >,* 12 t3.2 <'""L. <I..>:. 2: ,- ~:c?-:2',.,:;-5, - . 211 3: Te:l?. ., --.3-- T~,:?..-Tpr-';j cr,JDerty, 5 '-1 rL:[:ai;l a,A t:712 T--rn-nI L, .- - -.. - .._ ,i..-: ... ; .*>>i ___... ::iT.:Z c!i:.z.--: t.?: c? Ie2c:tl: 3 f s ai? \i 1.5 r: r. 5 2 r,i .e: .. I- 7' . 1:: . ..~ L i :. Q n3 , 2 =..".-:+2:;---. c*,,:.;.-,>-:- . . ......--.-..-, _"A.l ..., TL,i-, lTL:>zCJ~~ 0 *,-,..>- -, - 4 p,...- L< .- a -- ._ - -. -'. i__..__ b -.__- 4 .-__ ^ _. - ~ -1 > 7 ;-,>,-;a A;:. ,-< t?::? ';;>.e e:.:::. i .Ire 3- >; "5 :< ;: .>, \ _,__ . z 2 dc..:s, <. - -- r:.;r,t 0: c:-.arc;:e fr-?c". 2~~:i.l. ?..LL 5;efazlts .?re c;~:c?.: <::.- - '- iL- L3 option, at a~y tias ii~rj-nq the term of t2is Lease L 2qsi re ye r~ nt to for t'nwi c:q re;no ve sane. ... . ..- - .__. - ____._ .. - -_1 - G. No$.~it'nstar,Cizg a:-iy other provisioiis of this Arc >.Endlord agrees that if the defa~llt complained of, other thdr Y.!e A- :?,zvxent of moxiss, is cf s;'ch a nature thzt the same ca h! rzctified or cur& within the thirty (30) day period req>i su::;? rectifics.ti~n or c;rinc; 5s spcifie6 in the written TL'.C relating thereto, then such default shall be deernsd to rectified or cured if Tecant within such period cf thirty ds.>-s s:i~,11 have commenced the rectification and curing thE azd shall continue thereafter with all due diligence to c such rectification and curing and does so complete the same the use of such diliqence as aforesaid. K. The remedies given to Landlord in this Article shaj in addition and supplemental to all other rights or reme 0 24 M:?.icY! landlord may have under the laws then in force. I. Tne waiver by Landlord of any breach of acy tc averant or conditio;? herein contained shall not be deemed kc a :;diver :>f such tern., covenant or condition or any suSscc_~ breach of the sa~ie or any other term, ccve;?rir?t or cO?,:i: herein mntalned. The subseq~ent accepta:?ce of rent hereE.:e: Lanllorr', s>,311. nst be deemed to be a wziver of any precei breach by Tenant cf any ten, cover~s.:-~t or condition of k e, ot:ier t:n.an the failure of T2aa.r:t to pi;/ the pclrticc re:.::;?.: so ;:CCE!:.,~?~, reg rdless of Landlord's knowledge of 5 prcceiii-.r; bretcl? as the kime of accetiince cf s:ich rer,t. cover,a..r, tern, or cgnditior! of this Lea:;.-. shall be de hz:,-c: b,?.:n wc.iiv@cl; S:J andlord, unl. 25s such b,ziver be i;i ;;ri e _. 7 -.. , ; d 17. -: 1 L -, r - ,2 - C. .T. ~.>~6lor?. ~>.a.I1 'F~ZV~ >. i?-zs': *.:I? prior li?? fer ZZG <,?% 2 ,'>3 F I : : _-._ LdA_ '?3 $-!.:,c:: :<,?<::>::..::-y ?-<:::-<:.,?x.z:>ks . , - . . ._, .. . . - -. .. . _: .. --\ c .J L i. LJ ._ - 17 .I k.3, , 6, e :: z 7. 31 .- +-r.-. w L-- Lk A.-Ly (z~j r;~vs ,?.ffer written nozice of defacl; -, (or 1:: zor~. t::.irty (313) cays sh2.1: be =eq-.ired j;..cz.cs;e - 0; -.. ::?e nai*;*= '-= c.--.:;icit, if ~a:l<lcrfi sha:.l .fail to ~~oc~~;~ c~iig~~tly -. t~ : s;.' x*:.1 &fc:';?lt after noti ce), t+r, in t:nizC ev:?r.= ~E:,:~.T..A u- d c-- -,,.C -' L re.;Fonsible to Terzgt for z.~.-q - ar-5 all ~~K,ZCS SLIS~Z~T~~,~ 52 '1.11 ~-5 ~1 rc:; !~lt cf Lay-<.lcrd's bre.::ch; I,4.. t';!er, a ter s.:-::? r,c:. -...:-i3j1~~d'~ excsF-Se i:-LclcEiEcz in scch expzn6it::re 31.1 CS.;=S -sr;:yzys' fees iric:lrrcd tc cure such eefa~lt oc SreacI3. cf 'LC t;j2ar;t s>.alj, have no riqht to tsrrininste this Leas2 excesi h -rein otherwise speci fically provided. S?Guld T'?m:;k 5 wr<.cten notice to the Landlord to correct the d.efZuli: Undlord, Tenant will give similar Rotice to the holder c? mort99 or deed of trust of Landlord, or the lesser of a qr: lease with Landlord, and prior to any Lease cancellaticn, 5 holder of the first mortgage or deed of trust, and for les shall be given a reasorable period of time to carrect or re A__ c - .AL - .. -7- t.. - .:s -;.-.Ant 3 - .. s.hall have the rigllt to cu;e an;r :c:-l ?!?f22lk 25 e such d3faul t. If and when such holder of the first mort+>; deez of trlist aRS/sr lessor has made performace on 5s::a~ L,~ndI.orcl, the c!efac?t of Landiorc! shall 5e deend cdre2. TF shall 11.3~0 XG riqr,t to terninate this Le2.32, except as ex>?rc: provi2.d 'rerein. P,z tic1.e 23 E;>JI;;z>4y EQy>-\ [X .- a .?I. In the evsnt the ectire preinises shall be ap?,rat.ri or taken ui:ler the power of eminent diomair. by ar,y pcbli i-?ck:.ic au"_hcrity, this ~ec-se sh.i.11 ter;:,imt e 3rd exr,ir 0.: ,'ns d~ke of sile'h takin?, and r;"er?ant s:1?1 1 t'l.;-r?u>o r..:.i.~::~.sL~.c. I~C:::. ai-.;! lia'sil ity &i-!<:reafte.: accr\.ii;..g ?:erz.cT<er. -r ?I re ? _. -1.; Fy:;? e?"???-k 7,C.T" t '2 t,$q,3 Y?, 7. y - z i :; 3 ( ;; 7, 9 ) 0 t L>z T c of :.'l.c:3: -:.::ea -,f tl?(. ::~~??,i:es is tz:<s:-: .. . 5 <';? .i 7. r< L i, - .-'..1 -2--7.1n. e .. , .- .7- .A;--&d& +;.?>1 /. ., -e- L,r.:>;>2, -- - cz:;>::.T i:-.:o zcCcQII:.5 Ci12 -3:atitre v,i1ue o.! - ., ~<,rki 22 cz.:<z:-i 2s c~.~.~zrsZ ta the ;3arkj. on reicalri~ng. L' ?x . ~~~,~~.~~~<-j _. S:-?-~I >e er?;iflec. to t'-.e epAt.lre ai-rz- -. .. c. 5. ; -- 7, ',? s , L ;.-? rc:r.: E::< :.t-ri7.er c: 7.z 5 ~: ' :; c' :: c 232 1; :: v - s;-: :. 1 1 b i! 0 z o r c7. .I. L!<.. .L::.< k,;, ,Te-:ant 5;': - rs;?t c,~ other ck:; t'; z.;c-r,t to receive C30T.pess.3tiOil ,s fi:ctures an? psrssr\.ai prc)p.:,:ty shall !IC a=: _._ t3~rec: ' - ir. 2ny ?.:irize~ hereby. Terznt shal- be entitle P, >.$-. '..(:;~.ie - p::-y r?:?,e=y it xig:,\r - ~~~~;~? 29 Lnst the c:>nde~.~,ing aut>.a s?ztio:-, 7i52 GiT :OY 1GSS C? bESiCeSS goGdWil1 PurSUZn A. .z-,- <, . C!. - 112' (-1 L s y- i - 2 c id I- ~~r-sc~'' psrszari?. to Ca-i fsr!;ia Govemrcenc cc.:ifarrnia cde 9: civil prL)ceCtjre Section 1263.510. a 26 c P. For the pcrposes of t;iis Article 25, a vo1~:ntarv s condca:-~at 1 on, shal i be de 2 an apz1-opri ati 02 or t akin9 '2i the p:lc.;er of exinint domain. Articie 21 .\,Tr;G ?!: 3v ' S - .., . or CC22',.2 y-znze IF. lieu of (3 dennation, but unL2:',er t;?e th:-ea e l.'cL S In t3.s everit thct at any tirre 2.uring the tern of this Lz eit-!iir Land1.orci or Tenznt shnli instl.tute any actior a<;?. inst the ot:?.er re1ati::G to t:r-,,e provisions sf any dcfa,,l t hersuy.der; then, and in t:iat .. %xien':, ' - 2 - .. ,, ?- .- 0 ,,f :; .r ,A 3 '- : - - -, 2 .:,.;. :: " s .I ,5 0 : 1 i : i ' 2 t -- ,_.. I_ JL ?.E 1 c :: : a &I L ,. J c __- -. , -.>_, .-e i , ._ L b.r-__-i.:* 7 - ;-:c. 25 . . --.. .-,,.- ,=, .. _* ,-.. . ;;-T :<m , pArrToR..;:.;Em -. IJ?r,n IJ~L kt.c~;2 ~pqi:.ef- t cf I.,ancl;lordl Or ZIl:,. -7 =' A2 :,. :< I e,qsor cf t;?+ :.ap,.;;i ::,aspL :.;::.c? z.:-,s z:-->.-' <. . A. c.=rts2cee OF ~enefj-c.i~.ry of 2 r.-rs-~ [:e26 c,f trust 3f .~ _.. -. 1anc wi 11 ir, writi;1.3 ~~L:~~r.:~l~.~.t. its ri-;ts 4 1. ::%Fs:F.~~z ?E ec tc) t;-,:> Lie.-; of ,2:1: yrrsc l!.b -7.-,-+--:- &. L i. . . ., ~ 7: :. _... r. f t:-'.:,St/ Rc>.d c-: :<;..Jre;<!..;c<.r in fc,:ce r,gaiz=lst t a r e a p;l .: t, .:: p.,: -c - ...- 2 0 z ;j ;I i i3 :: ti-, ,': G z E ::: i .. L .- .. . cr h:-re?;re: L-L ~e ;:,?,<:: ~.>,3:-~ ;fie z+:.zri 9 k>:e fCreqr2-,-.' - LJ I I LC: - I in t1-L~ ,?ve;li: z~y FL-~C -~~~;.-~ fc: f~reclosure, or in the event sf the exrircise 3, wer of sa1.e ::.rider any mort~qe or dc-r-2 of ::rust :?.&:?. ~...~~:.o~,:? coveri;ig tlie prenis es, ~erant sl-;c.ll at ti-e reci_:e: z.:-.-J pljrchz5er a<: any sue-:? sale attorn to the p;lrchaseC -E. m%nizT: such pur&taser as the Lan5lcrd Under this Lease. c 27 a E. KIthin ten (1.0) cIciys after v;Yittgn rnc;,--.s= t'ierefor! ~--,ncilcrd, or LT. =?>.e event that [:?on any s .:1s, assiqn~,c:-.t 2-tki oz of t;:e premises or the 1 and thereLrlder by ~c~,~.4~~-( a~ ~;;set statene:;t shaiI be recinired from Teranc, ~era:-~~ .?.cy to delivcr i!; reccrdclble form a certificate addressed to zr-: j ..? 5 aL nrcpcs e:: inor tga gee or pcr chcis er or to the La ndlord cer ti f> t-at this Leas-? is in full force and effect (if such be c.se), there are 2s defenses or cffsets tilereto ~r statinq t? F.:: b:f Ter~ant, and settiriq forth scch other m;.,ktcrs ;':>.;; LY req:.:estei: bL La n2lor:d CT sac?^ propos ed ?a!: t-ga I~'.;.~C:?:.~LY, inclc?.i.ng lxt not limitetl to those 5,ns set fzzt: E x-R 1 hi t 1: L -- " here?:;. -- .7 r b. U7r.n Lz=;,?c'.L ?rF.'s TC~J~~S~, ?er.?. r.t E; :id 1 r;.odi. fy thi 5; .. , Lt ir; cc -"> ,..- T i..,..c-.' Aa n wit.:: tY.2 re.1': re:ne[;ts of 3. ir.o=ts:.q,:y 5: b:?:-;~:.:':: . . -I c?: t.:12:,-:. C)f ~.I.tnd!.(-.r,:.:, '>ro'.':.fi%C: si:.:h ?sG:; x:-.. ' (-,:: - ': : r cr: aQCll r_,C'?.a.. re;::, '. .. _. . c: ' '_ , : , (1 F A-7 .~ .I - t.,., Inc.:e?:'i? Lyle ?e:. r ,., 5, < . . ., .. . .. <+... ',.::;-' ;;-.2 k.>:Fl ,;,f e..--y 72 .x 2.i.:. : E'L-:,:,; or ( 1. I 1 ) ::. :.,:I e c i 3.; ly - -:1 x3 ' r: .. .-L~pL -3 ~ : n-i, 3 : : s ;. i. {is -6 ST'::&::" <?< (>.:I,) C:'P.li.?~?, ;.Lt Gs..:.c, st:. L .l-y,._:;;L =p. ?...;.: .3:)<:r .: 1 '- . ., . : ... -.- - r 2 ,; 3 .y f c : >A I: . .;:, -- - . ~x.: i. . . ... .. 7 3 .' , -, ,-.. , s, i* .? 73 5; :: .< -. . - . ., ~ ._ >-,,-, .,- . , .:: ti . . - , : . - ' . .. . 1:: 73 1 ,-. Y. - -. __ .- .. 2 :- __ ,. -. .. :; :: :: 3 3 :- .::n - s c ; 2 ,->e <. - - ,. , _,..-_._ .... , ." ;. .: 5. c: 1. e 2 8 Z-:,,Clr?-D's ;xG;.y 27 =;:zy 77 T e 2 s, r; t a E; r %: 2s t 9 c 52 ::::. 1 t_ I, ,z :: F. i ,::: 6 s. :: < its a::--ho:- .- , 'F'se.; z :. 7: 2s .;,.; ZrJt-r ;:\,(.? r,ry,is.>s 3 ?-I1 : -. _. -- .-. .- _.I._: .. ,,,., s 2 L" : I::.? ~0 TJ 3 ra r- '1 3 2 n.2 3. 5 r .: :-:s t!-( at L ._ .. -. - -- ,-: 1- ;-. 5 -~ 2 ;PAQ : 5 r c2:- y -q .? - ,-- " .- --'-' . ;" , r ~~ ,.. .I t :i. 2 1: ? i 2 I,., c>. ;7.3 1;' i 5 c :I 2 c e s s a a 7- 'i -12 J 2 s 5 .3. 'T I,' rzr,& i 1-s to ;: ;-- y 1 a j: z, , c, r G ,:-.anc~~, , r:~ i. 3s oc re5u:L ati o .- ?. . >lkhcrit/- 0.. of i-.::;? ::"is'*.-- ,L;dn(-c Ser7-7' ..- -es C:ffict. or of ZL>if A s:,: c;y cr th-.': L&~~:..IJ:$, riz.':.f de?^. np~essar~~ kc ~;--ev;.nk i.l2-:.k 6 i L e r i r) .z ;; t i 01 1 L n c =n r, e c t !- c : .., :.if- t:. i c.. ',- cx ._ rr; r ~~-1 -...i~;es i f t'n:.; T.;^:r'ar:k not p,,2ke or CZ:JS~ suc-11 rep.irs to be xa3e or perfcrned or c c e 2E sucii c;cr:i to i;e per?orned pro~,ptly after receipt of ET': c3ev.ar.C fro? L~~i210i-d. Nothing herein contaipeci shall inyly Cuty cn t,ie prk of Landlord to 20 any sac'n mrk .v;'nich m5er provision of this Lease T2nant my bit required to do, nor s'r it coi-.stitute for tlie faithful performance by Tenant of ;?i the tarns of this Lease by said Tcnant to be observed perforned, The seccrity de?Dsit shall not be mortqat assigned, transferred or encumbered by Temr.t without tbLe wri cxnsent of Landlord and any such act cn the part of Tenznt s' be without force and effect and shall nok be binZing La ndi or?. a 3. If an?,' of the renks herzin reserved or zriy oth2r p. :,?&>I e >.J yzn;i:-.t to L=. ni_;,iord shalI be overdze ani cn~lil s::-.ci~l? Lz?.ciLorC ;n&ke pay~,e?C-s on Seil-alf of the Tar2 nc, cr T? s:;::ll fziL kg perform any of tiie t;:rn!s of this jezse, .- &* s 3ptlor. a;:?. witi9:1t prejdic2 to any 0 '-d T.2 :! ?:LT,'e 32 ?!..cc';: c:>t Zh2reof , apprs,3 1 re G;.,.3sit or so muc:? Eherecf 2s Tc.:c> L,3 X%.j.Lo.;?. tow?'re t:-:e -.2 ;/K.?ir-t of 112'- s '2 j i:. a i ;-i 2 !2 :; ;; L, a 2': 1; 1 c r ,:; <-=,'r t '3: f ;-" ", T:? :\ t ; 2 1 e -::A 2. z s ?. 2 1. 1 f 3 r t ?. -7 ._ .. E'. 5-3 (:i .- . ~. ,-I 1 ;? :. 7.7 It'i : 1:. 2 )- L s ai ;?- ::: 2 r 6 5 2 r. i ;-, r (2 r, :> t !- -.I : i -- -, .,.- ;> ... - s 2JF~ .'3 p:; './?. , - - - - __ - - -. .- 1 1. 5 : 5 - --.., *.. !-!? -z:r..-? , p*t ,? :: : -> 3 '2 - .^.. -. - _., .._..- ..- - .. 0 c< --. :; ,.: *..* z. x. r , L '-,> ;- .x: - 2 y L'. 2; - i- - - - ... - b - ;- ;?\T z c ; 3 2 ;: - ~2 ~~~~~:~ t:>,zt ;-thing c'~;-ine(j ;?, I-',-' -:,.>s Leise c zr ,~G~T~.SL-.:D:> .._ <~_A 3: -y~.e2f-j.y.~ ~- F. i .s>~ti-~erc;;;:.;: 0.: '.j<2;.:~ ':E -. . 2 ,. .. _. (1 ,_ or2 c-y-.?, ,T-.n;.l 7;; fT .bc:..t:.; ,-;.zn L>>yi(-tJ. CjTC': a r.2 2 r:;{ I -. 2 ,; 'r 2 t-9 L. j.e _' r-soazsibie ir- al-;y k.iiy fo: of T'er>z.t, r ac;~ other ~2rty. s a~.r-.&i that if ar.y provision of ti..is Lease s - -5 . r\ != I L:> -' E,? wi~? ;;y a~y .:ou.rt cf :~Irn~etent juriscic 1 S'J c :-A 2 .?'I. 5 : tior. or. s'hall nc; affect any other provisi. ;. ~ dEt. er.7, Ir. ;--!is ~ez~z2 22~ a.:L1 such other ~rovisio;ls s'.1~~.:1 reriain in force .z~;d ef:ecc; a~c? it is t?.e i~tention of the parties hc .. c 29 a that if ar.y provision of this Lease is capable of cor,structIe?s, one of which xould rencier the prevision void t'ne other cf i.:'nic'n wuld render the provisicns valid, the:: provision shall b.clve the meaning which renders it vali5. C. In the everit Tesant heremder s1:all be a corporatior., par ties executing this Lease on behalf of temnt hereby CCT:~~ ar,d warra;rt that tenant is a du1.y qualified corporation ar-5 stens have Seen taken prior to t:?e date hereof ts qualify Te to do business in the State where the biiildir,g is situated; f.ranc:;lisc! 2nd corporate taxes have been pair? to date: a::d fzture fsrr,s, reports fees an5 other docu~ents neresszr co~.ply with iip-,niiccbie laws piill be fiied bihen duo. 0' D. It is !_i:iderskooS thz.:.t there are no oral ac:reer. 1 r., <, i ..,.I~SR r t?:e ~~irtlsi. heret3 affectins this Leas2 , ad t ,;o ti c?,t i ". .- s _,_ :.e i ..~-, ,-> 07 (-11s :>x a::ed by T,f) : 1 QT i k2 T: ... 7- eels any ?&:id ci~ i pr~~~:ic?iis res, ,?r;~?e. ?rit s a ri,f. a:-22erst? ccji::q::, I : ,,. _. x(? ri95:: t:: s~f~..=s -, .~ .~ 1 .. ~- .. .. . ., - .-_- 1 '_I . .I . 3 r ;.; 2. L- ---, .-, Lj- 0 * - .~ - -. .. .. - - _- , c< 2.2 7- ; . F'. T:q,~1. 1 ,.; of t::e :zL;?.:? ';'n-.r.: k3.2 -:,;;:.?&i:..7 2 i.,:; , .. -4L -; - T2~3 .s e. A: 'X- LA.dLqh 3- "-:ne pr;.r:t "JZ3 - v 15, z<?:'.s o f t:?Ai .:. 522 1; .3, <*.= -- y'3 ,- shall go ~~'erl: t:?e 7,'ali;jit zz fC1 E,?.;?C=: 2 r:rz cnforce::.er.-. s ;-,\,F ~3% ndiord, t:,is leas2 11 r-;y 5% ccr!strl:e.2 -3i.tl-:3.r f ;:c3LirL3t ~ ~?.:.ndlcrd c)~ TerLa>k, -29;t ::--is T2st4.s.-: sh?.:_ 1 k~? L:?,~L" ir. ~~c--r~~.nce wit:? the g..p-.:zl t.er,ar of c'ne lanr;~~~.~ L2 2: t3 rezc?! an2 eqili.t&le rCsC:.t. .. I. ,. -r -, -. c. A ,,q.=_iv-r of 2~;' 'rr::2~1? i'jy c:~:Lu.L-: s.qL~.:l CQ: 2-2 3- ', _. 0: 2ny :7;i;er !23:23c-i-: c; C.zLFzi:l.!:. ,;,.ixcGiQr?':; c.3xsent '- ~2~~c,T>7a lL of, any zc ;- ST- v- .. 3 .-> .. 'L .:e .TU -- r :: *-. 9 I, i? nd -.. ', (2 r 2. j s c.:.: 2 s ~p~prc)~~.; s;qzl1 not '~e G,?.zz:;e..-!, to ;~.c:..ive or r2r;zpr l~;-.:le-: - 1- ~,;.zn",l-cl:d's cxr.sent to or a,=?ro'..:;l of zny s~-;'3~~~ 4 L2cs r: t s L;n i 1 by tsrar?:. i-I. p.ny prevention, delay or stopp,cl?z d:.re to s' locj:octc, 1zmr cisp';t:es, acts of GO?, imSi1itt. to Q::ILA~:-. or inaterials or reasr;r;able substi tukes thezefor, govex1 c 30 e rectr icticns I qover;.nental acti gn/ civi 1 ammotion, fi re or o czsxalty, ar~d other cause^ beyond the reGsomb1e control of p3rty c.~Liqttnd to perforin, siiall excuse the perforaancs b:; party for 2 p~riod equal to any scch prevention, Zel:~.. sk~ppaqe , except the o'nli,g.?tior?s imposed wi tli re9 r3 to re: azi other charges to be pal2 by T2mr.t piJrsus!1t to this Leas: I. Ten.snt hereby expressly wriives any ar.d all rig'n: rc'..?rnpticn granted by or L:r.der any ;?resent or future lalws In even; of ~t??anr_ being evicked or dis?ossessed. for any ca~se ir. the 2v::nt of Lznd1or;l obtaining possession of the 2rexise TC~~SO~ of t:-.e violation by Tenzint of any of th? covenar.'is cr.3 of t':iis Le2tse or ot'ner~ise. The rigl.its qi /e ~;in-Lor~ :>.?rein clre ip. zdd.ition to any rights 'ihzt r,:ay ;h? 7 a ..? -7 1- Lc: 2 r*\:.L<;:d 3-j z:;? sk at\;re or ot:\.erwise. 2 .. -. r;' - c;. -r.e ~v'::!~~:~.:~.yy - c::. <.?':.he: scrrz~.:ier c;~ ~.e:~~i-.~~.:~:; c.f .. r'. ~cq~~~:- cis;; by ,L,:L2i:j.:jr<: cf ,? i. :; e : s 5 5 .i I r. 3 ti ',., c? r 1: ;X 7, e ;: (I: 2 r w 1. . . to SIL-.:: .i X',-z?'r; ~ ::--, ''a C! c: I 2:: il; : 7 - :.;: ,: s <'a. I: 3. 3 5 1 - -1 .3-.->n-- c-2, I - , L . . - t; - . . _. ._ ... - ._ ~., ;--?e 7 .' .i :, : "'. c: c 3. r, y 7- 32 3. .L .L 3 i.,.3JL 335 ez or ,- -, - ... , L . .-s.-ic3s L . I . , .~ . . ,_ *-. . - 4 . . -_ '- > I , , ... __-_ -.. - .. L, ~ .' f _. -- .- - . .. ... -,_. .. . , _. 1 .. > _L. - .__ - .. - . -, _-. ... ... " .. ., _. .- .. - 2 .. . .. -.'-. ._ .. ._ - c. . i' I \,, . -. --- I I ,,;' -.,.7-: . .. .. - - . _.-.._ . 4 : .. <-.-A ,I - It - .. - .. v-r:: ;: C:,?.~?.V - ?.::si::; fro?. force x,zj?zr? :>n3~ld af - 1_ ... ..>.-->I . -. .f:. c2 ilq:.t_i?n t- ccnstr:;ct t',-e ~r--. ,.<::.:: ~~~~~v< z; - .. .;.+: ~~~,~.~~~ ,2 r~~:a.lr,..ble e:<teys Lon CY c:?.~ j:eyc,r,d the P.:;. .:.r2r:z;a :;sy3 to rzp.c:;y tke pr?>le:: and cs.i;;.plete COCSZT'L~ - - ,? .I. -1 >- - 7 : c':.<.- .. . . - ., ^. e: .., - - -.., . 2172 cc~,y.c~-ce:;:pn t cf t:?is le-.. -. T" p : :- .:,. :L i3-p.s .;-.inat :. i.. ~ 1 k i: 2 3 :-, E i'; 2 f c -!.LC :,; 1 r',.; : .- 7. ~. .- .-% .- _-. 7, - 1. ~3,nclcrz~s c.,bility to obt~i~. ~~~nstrrcction fl I.:. ;c 7s? cf tr.6: prs-ie~t -* ccst frsrr. -3s ir!stituticw.,l le .. ''y,3.r:-<~-; r2.t. 3'' 1~~~2 res t ratPS. La;:..?:bGrd Shal1 ROti f>r ten?i: Fi .7 :L t 1 :.. :. ... ,d-; L :-.. i n c. .)J I' tja./s of the executicn of this lease layLclorcs Fki -,,-ij-t;T - 91: ina!.li1ity to obtain such finsncing. : f 31 0 u? altjcjpat,ed that First Interstate Bank wil 1 be the construct; lettder for this project. Tenant agrees to cooperate fully wi First Inters'Ldte Bank providing financial informatjog on ten3 dcd other informati65 that might be required by First Intersta 2. Plans and Specifications - Pre1in;inary plans for t b!.:ilding and ttie site plan for the locatiori of the buildi wi thj.1 tne Educational park are attachilid to this lease a qj!:roi/ed by S;th 1dr.dlord and tenant. Within 4.5 dsys from C. e~;ccutio~i of this 1 ease 1 and1 ord shiil 1 provide tenant detai: p y JIlS, sct' It.!\,iiti~~ 'I- and specificatiocis which - wi 11 identi ... f:! . a win;: sh:; i be si;r:?;ect ti- the ap,,!rovd! 0-F tr!nant in Nr::' 0 Gsnk for the obtaining for the construction financing. I ;I~S:? p~e j im; fl< +. ,,ijri ., i;$ (:(.;ys ~fter .;ate cf rsc;;ipt ^L r-?.2f. Si;b:;.~~.!tfrit tc 1 .:CI ,-~;,:tj~<,; io-* f !, : .. b,i j 5 Sui 1 di 73. c:.l:cr: .:P i r; n~~e dctai : .. ~ .: .,J r c 4 1,. ! 1 +& ;) ci 7 rj :- >:!, : -j 1 p:'"pa)-e e Fi ::?: pi %:I.: itx>*! Lo (,!>[: Carjs A 2i.:j! ciing Dep~r: . ". f i ;; 2 .; j 6 fi :; 5 :1 ,' .I a: 53 ':9 .- ?~-~3/'C'/fi'' Y ; .. L. .'s c,f d,:t;. 'jr ; of !:r.-:>?y-i 8t-i 1'1 ?fiS c, 9 T .; e f j ;, 2 Ti r! '\ 6 :? t: 4 .I -I 7 ,? I 1 t)r.!!.- a;-:h: :s:: i; shdl 1 fL; .! 1 -b; j .j :i i .. -. 2 2 :: I c r; ;i .j -. 0 ; I .. (' k; "I *:' {j L ;II (j E 5 3 i' ; 1 t: ;2 ii 5 7-L3 G2;; Ar-tic12 5 h?rc'l= - b.* i. i II- 2 a>;.)rov6d >y .renay>:;. 2 .- .. i '! ,) 2 1 ;, >, .I. 'i = !-; ;; , '! ..a. ' * .. ., , , ,, i .: ,i _j \. : i > _.- __I __ ..- ._._---- I --- e b3<:rcf of dirEctors shall _.__.- - (>~.-!?;-.,;j~g prcv-id:., j;; ~>icA event,, 3y : -'..'t kc. .fi,,P,qj 5,j:cd. /l{: 50, the; ! t >; >.' ;; ; i. II.._ J b.y-1 ?id; ~j.r 8 cel-tj fie6 cc;py cf A: L!:? rrwiutian, ss tf,e case ii:ay be, 3;J : -I -?-7---- <= c~rpsrate seal ii;i;t 6 a J7:<;;;axT 3 - a .?OUXCr'?TICX FOR TFX 21ST CE2JTCZ.Y 7Jsc-IL"'piC.:; or" ",Zf"ISSS ___ ___- - __-_- ,. I -; r! 51 tc: 3 r -. -: . .I E ark, 12.; , St :::e c.f C..: 1 IC. ,* ;: .:-x :;:1<::r: ".I-: I- -. - :.t-\,- pf c~~:-..JT;~Y., ,:z's&Lx;r Df <?>, ::j. .. - -. .. -I* , :>---r..-.. ,-.-.. ..!.,- .-- n!-:c, sc:.;,::" :+<27- L"T z-csr z>.r - ..- ;:.i;.. ,-.,,..- .J7 .^_..__ --, >,s- .I t3 ,-: . ' '1 ;.: 5 i r) ?A,:. 1 c 1' -.: I' ;! ; '_ - ... 7 -_ . .- . - - . . ._ .. .. .~ '. : . 3 -: : - . ,-: .~ . - .? - I - _. r . 1 .: A 7 :, 2 --, <: --. .r ., ' - ,^\* - - ~. _.._ ... ~ __ . ..A4 L. . _._. L -2- .... . -.:> . . -- - _.... . - -I -. _. . , .. . .- .. . . ., .. -=,.. -,..-.- - , -- -4 L ., '- - . . -. .. .. "-7.. c.. : '.: si .:. : ; >: ::::2; ,":r c,..:.:::: is.:;:. -:I 0 c 1 :.. ; < _.. -.LC .. c, I. -, I- - .* - ., . -. .-I "7 -.. .- 'r .. I __-- ~ - -.-, - .,-.-. ..- -, .- -* .. , .,.. __ _. .. . .I ,., .. - i . . ., , , . .. , , . - . . . . .. -_ .. L.L .. ,. ._- (I -. . - _. -. - - , c- , __ 2.': 2 L t,:. -c -- 1 5; S'.;.-;""f s"',-:,' .. _._ . :.'2 r 2 Z :' Y i 5 j , -- .- _- -.:Lr'7-e.T:l. __ .. 5. .. - ' - - .- -,: :, , -i -. .i .. 3 .: -2 , 1 : r_ -' . .. I .- .. *- a c Em 13 AT "C " DESCRI ?TIG:J OF LANDLO2D ' S WOW AXD E>jPS'T'S 'v:OP,K - --- - - --- - i . LAhTDLORD'S WOAK a Lanr?lorc! shali construct the leased prernises at La~c sole cost ar,i expense to the extent s'mwn belaw: a) ancrete siab flGor ad. ir-sulated roof ,ii fr0r.t arc? rear walls &s per kndlord's ?lam * c: dc;ors as p:r Land::ords's plars * c:; -\ ~;e;.;er e>cj ;qater stu>>& ko tl?e ter2-rL!:'s 1e~~s..?~ ?LC-: r. j .. .. 2) elzct:ic s3rvice Z~S tele-e4t?ns to the xi!.~Ii:-~!~ :. ,! ~~:~?~:~~.p.Cj 2r:d 2.i:- c:;r:c.l ",GO?.i ."I -3c:ha a 1 c a 1 3 n ~- :;1 ?:,e 2 i .. ... , 7. ., 1 . zce5 C?-& '0 '; t s - 1 . .. _I_ -, ., ; I :-,.- -"A v1 7-2 II fiCI :rc;hE:ao & 2s yr jZL,?c;iC,l<'3 - ,?;,?.rs 1.; i. e:;ic,ric:: 3!:i'_zir:g S~PL- nxt~,ri>r .da:.is - 77 9- c .- '-.?..::.1.: ':;?.53>:9c3. -'I : .;.; L 'r. 2 :9 1 7- 2 f f !.:I .2A A : \ ... L. , c:7 .?? X .I . . r,i?-r; i-, ?$:;:, .zy:::j.'zs <-- ]! 1 .;. 1 :: c: .z : .; x ?..l 2' :,~m t s . 7 a. *L< I e ne: S~?:l<>:? f3Gk :? 2 i :>,z_r ti :>; kc of fset .- r7l __,__ ^5 ... L.1;.: .~ :-:--.-1 ::s \;:-:,; - : -. ~L I-. ., -. '3 7; 3 r;l c :> t 2. 1 1- 2 :.;a r, c 2 . . . . - ..: <: , 'Z ii Y l. -y L l-!! 9 - i r .:, ;i 1 J. .3 .*I z. .? <: 2 i s 7.c : - .. - - - .*-. _L. ~ .. - -- - ; <> :;2 TL y , ?-k '"2 i-'? :. z I 5 3 c, ;- ,? c c; s ; ,, 1,. ,? e 1. -.- 2 .-3c;:1si.:9:2 ..; fsr 532 CCJL sf :-?le fc:;1c:'rC:1.2 ii sneci f;c.-;.lly set fcrth cnE2r Ur.dlord's ;or:<: 3) all slc,?.s ?..; tra6e fixtures .. 1. \ -. -; distr 1.2,;ti~p of :-;-x'.iyec3 2nd aIr-~r.diti37i:lr. .. :c..:~ all. eiec tric :,:Ir:zc;, o\:.?.le!:s, light% c!-re~ i t 'ore iq~rs .. I,.) susprd ei! ceili:i; c) s2riilkLer hsds azci irst d.ietior? p) xtility meters ar.2 instaliakion 0 q) all interior pr5tioning, locks, hardare, 2 r) one half the cost of interior demising wz a t ena nt s s) floor coveririgs and ~~~nt A! '. Tczart's wcrk w'. 1; be perforred by Landlord contr;lcror at its' costs pl1-s l5% for overhead and p Tfl>AX;S ?YInL;3iL, _I ;L'21'1 j -,--I Tar - L. - - -4 LL-) e a EX3 IS 3 " D" e GI:':iRACJTE OF LEAST: WEiEF.XAS, a certain Lease of even <ate herewith ha been, will be, executed by and 'netwe<-.n aatiyui tos Bluff, therein 2 her2in referred to ?s "Landiord", and Foundation for the 21 Century therein referrec? to as "Tenant", covering certi 'ses in t:le Ci "'.i cf Carlskad, Coun 'iy of San Diego, State -., . -::%i~:, T,?:r-Ldlc. :d ~l.r\dnr szid L2ase xe,-:cire: r.. L.A . I: ..__ u.,L ,.?, ..,- ... F 3c...I_i c .- .. L~;~cJ;> t::.aat t:l:c: g::<:::::;l.c:- . .. -. :..i2:- r!s:f,rziay-ce c\f ",?e ojlic3kic;ls sf *T,J-.I~ . -Le.. n'i: xi i! er s2i5 i,. - -. c. .. .-. 7. .. e T.yl.~:~~~:~.Z~.~~ > is <is;rs'Js t>.;:t T.<?.I-i21c:d 2.: i ,?I ;:e !iLt , .. - .- -2 3 : ..-. ..- ....... .._. ...... - .. 3 '.. ... 2 ': . .~ -:-.,,-. __ - ._ :: 9 z .T' z ;, 2 : , ... ... .. .. ..... ... . . .,- ,.~ ,., .- > -. - :. - _. -. .J 3 -7 0 -. - i,. 3 T; ....As ; ~u?rs-n?-ne &< 11 csntiy.:n un~h;?.?cei?~ 31- ar.y 'hnkr?.. ~>3r=':::IiZ:~.c.1~?. d '3, ir;sclTJer!cy of TPTZLfit 3;1 2.ny SccCessc. .. .- ? . .. assi,;;::ee =:-.?r?of or by 2:iy disarr:rmance or iibs.::,3zn:nent tr .d s: 2 3 3 5 TS TL FLt . .. .I <,.,-F?-'r-:='dt n~,1c~ a-:,:~i~~ t::Is G:.]?.:ant: ... L +> L .: ?<C 1 3- 5 ;?. 27; 4. -I i -,- a b- h** in -zrt &?.d .r,; 2.:.,..: c2nt or tl-ar:s r 0 f s 2.1 c. i. 2iinin;s:. t:*.e 1iar)i11 ty 02 - I. ._. . .. v . , .:I __ .IL y.r22. -c: f 5 i.; 1:. 2,j 'PA;; rs y.~'. s r . s De : z+ f <? 2 0 e :< t 1 r: s :> ;- s ;; 4. Th;e lia51 lity 05 t?,e ~~q<ersigns~I mZer this G~ar 2: tc) :~2:2~3!.3~:: i:~.t.e:: ss.id d ease, LEirLdlcrd '-?,cyI at its cpticn, F s;2s.j.1 33 primary.; ar-5 ip. any riqkt of action ~:-.icit shell aqz.jJ-ist t:qe Q*;.e:s:Lq..?& i..Lt" *.\_ -.-I- .... L havinq m;rLzence.i any ac ti C .- ]-iac~i~L.; 0~;;L~.i~~<;i d;!~ j~cg?,:?nt ap ipsk ~e:;~::k. e E;<:-!ibi t " D" PSF;" 2 e 5. The undersigned shal 1 pa:? Landl~rd's reason attorneys' fees an6 all costs and other experse:; incurred i a:~iecticn or atteinptel! collection or ir, ar.y regoci2tior.s re1 to Eke obligations kereby guaranteed or enforcing this Guarar T'ne v.nclcrrigned does hereby wz.ive notice of any ?e SLr Lar2z10rd, 3s xeii as zny :lotice 0: c?e:'ulk iri r_l*:e pyarr. v i e ..& '7 .- or a;ly cch;.-r ~.;.ouzts mntained or reserved .in s2id Leasf: 1 :.! ,z I I.:?. e th e p 1 - .-,c :lr m~2-3 czrkie:< :;hc.li .:j5 joint E?;< SC?.:. II <.: r) 3 :. :('~.i ::: G?. 0: '-k','- :.:-.(?: :;:3v: S~C:-~S ~f t'his c;~:~z~.r:ke~ s7.a~~. 35: b;.nc-.r.=: 6. .* 7. ~-:i ... $3 y s c 0 f th.2 9 i, -g 1.7 1- ar h-. r 2 L :x s:~, ;j, 1- _I_ . ?* - .. . -- .( r-- .. k,; t:.:~ 'r~2:-~efit .~,f tb-2 r-~~;.;:~;~.~~~ -; - c~ : s3z-c; 2nd. 2s ,;j t:-% - pi,,.: c'-?:; :Lci.ci:-t Ti? &<., LC *-. \_ 2 LA*- ., ...r _c: ". . :- .- . .~ v -. i'; t'--. ;=j ::.,:2 set f>Ctr,, C'i "1 $j? i I>: :'~,:~';~S,~ 3: 02- tj-:,: :dnd e-:s 4. c > il "S c.2 -- . ._ , - - -- __ ________. ___ . ._- __.-__._____-.___ __- _--- .--- ~- _____ -_-- __ ___.l___._______l_^-_._-- - a c: .. ._ . - . .. '. :<.7e---.y., ._,.___ -.-VI c?.: (7 - ; .3 c t :> r 1;; s h & ;. 1. 1 ',- , :: d 1 i 1' wp, A ,::;' e .\,' til k, , c :1 3 - _-.__ .-. .-- __.-_. - ,- c. 7. I: .3 i. ',,,! __ :: ;s ,. *. ~ -____. ____-- .- L' - - , 1; - .,- 1 aws ,>r 2 cc.': t: fi ed c5py 0 f k2> IR'Lst :=.e 2urn::;iled. >.':.so, -. .. - - Li _..j. rest ;?;ion, zs the csss r.3~ i p. 3 a pp ZG z; r i at e co r por z+i c.n seal ntist be affixt~. ... -. _-- L- c ,a Emran ''E~~ 'I'ENAXT' S ESTOPPEL CERTIFICATZ e --- - .- - ! j ate : ;.f t e:it:. c,:L : 7c>: - -- ..-___--- - .<. -- .. t :.:x<q.=r t??.?,? cPr=&,.q L.i _____.. ___ 77- 1. -. ,?>. ;1 __ J. '&YC) .: :; E (3 ; ;> 2 2' 'r 2 :; j. z; .-5 -:I 3 ,''> :.; I; .!. 9 :: 2 d 3 e.. , .. ^.I L 4' -. 5 . - 3 .. ':; :: 1 r z 2 ,; s, 7. z 1- . ... x c:' . t 1; 3 ;; --si _j_ 5 3c. .; ,? - -. : c p r. t: _- 1 - .., :3 I L >_ i - L i. .. .. - .- ,.. 1_;-.-.-.- - - ., .,. _.-... ~.:L *s T.7 z::>-.- ;-, - . ., ;r .. - . .. 3 c :: ; TI :- 1 :: 5 ~J .- .I - 3 .rx ... -5 I: x,-,. r 1. .?.I -. .^j. L. --. - ' c. L . __...~----.---^-._I_ I.-.-- 0 - .- -. _._- . -': ; ~ '.,' ._'. ., A _' . ri'.3 - , I '1 ::;;; r T 2 z7- z r e T; :I 2 L. ?. -a I - 7.- -1.1 c. ~ e -r z --i ? 2 2 2. 3 I^ ) ~.. ay -.. .- . -. dL;z,-. '. ., -_ -.L L - ____---- _--.--. . . - _. > .I I. .. -.--..--_I __I.-. --I.- I -- ,:+ --',l E. f c {? ,: t_ .% i:p, r *. .- * rn -- , - ':> e. The L,e?.se is in ZSL ._ _.i_ _.. .. 23.2 n< ;jd, ix odjc fi 36. 9 r :; i;~ ?e ?.:,i e< 2 i pL 2 :: :.>.G 1: '2;f ani. nd:.;;.. .. , ah?? =?-e pr-.s eat terrn of --- , 13 _________-_. ----- , 19 I -. 62 ;ill res f. Tsznsr;:: has xsk :i:?vance:2 an-,- az~o~mts to cr en -I. L?~r,(j..?,ord l.:cc?<::- ti-ls ;,:?.2,.5e, fa: :,<FL:c:. aci,v2..?,cc3 it lC..lS g* T'::ns !:L :2p:! 52 n!:: 2 L 2 <L.,G.:;:., i- L?.ni;lIorc! ;2:-;c2 El *. rk.;~~~;~i~s 32 - .. - .. _^l . -~, i ?* ~:i: 2 qzj. !-:st 2 22: cl :IC; re :IL 2 1 s, h. Ten2r.t 3.~5 not su5let the ?r?nises or a::: pcre 1-&.3r has ~'epc:;~ c-ssi.gnt:d th-2 7,;es.y;e or any ;mr 'C~GX t'lzereoi e c :xhibi t E 1.a ?e 2 I) j. Tenar,t unders t anck that wi1.1 mclterialiy rely oa the statements mac:e h -x.de:.rsFyr,ed acknowledges an2 agrees that the st.?.; a;?< its :;:Lccessors and a: 1. .Le.rfiii: are true an2 CGi3$?-3te ?.nd may be re:.i - .. -- I.. -. , ;. (, .- .-.- - :LC:? >:.at 2-2. .'..,3:.::-:c ?A'.:. e:.,r.xe pet ) 0 .. 0 -.< v. L.U.',IBIT' F 0 OX'IOY T3 EXTE?iD TEEI.'.! O?i'I@t; TC EXTEXD LiCCSE. A. T?rar:t is hzre">:.., gr2:n;ec'- successive 3. options to ext83nc on all cf t3.e pro~i~s~~ils contai~ec', ",ereFr., s ezch (?.x.!k scch 2eriDd here'.nafter r~zfe I' Q :It e ?C! e,.: t T.o::'<? t;?.&:: .:;y:e -.;23: - - .., '9 .*. t s r :Ii :;:n. 7: A : .- 0 B. rr>se >-y.c:;~nt of th(? 2~s~ ,'.!.2ntl?l-i - z..e:l~.a.l fcr ~?~;.zYm. e:;k t..??~ ~:-~al.i be t>.e qrezter c< (i) th~ an9ur.t of "y,ise .'v!o~.':hL-,7 S. -r :<.,:. . .< tile ysz r j.~:~.~<~~~ely prs-e?.i-y tl:e ~3::.::.en-~:r.;>:l? c .;ctive 2xter._;-", tern, &'j:.isteii as of the c05Ti"7.32:~.3': ( e:;.;e"c .& terz ar,cz xjj~stee s;.~:szi.ly duri3.c; :I:s e:;tonC& t :->:f:LeCt c:?ar,ge in the cost oi -::vL?s <>S j.s sst fsrth 5.7. S"C?. -- ?., . , .~ . (il) t:yz tli~:l ;~~~'v~~.:-.!L;~~ ;-\3te of 2253 >!c~.'::l.ly ?,-la;&?- F - r Ls- rl,z 1 c; y {I a<:. 0 f fyi 62 cc,: 2::t 3: the z+:;Q " .i e prenis (3s are 2 ~?-rk, W!-.<C~ E3252 bi~!~t:I.ly rental .. -. . .- t e T::-~ f 0:- 20 ;12& z a 5 ,i 2 5 A c,a c E: i yi k. +. 2 j.~~ :::e::: 1 ;>.: e 7; ; :: :,. : ~ t" i, E - 7 c ~fter be a<;...-'- Ltb;t=c an;l._;a1iy to r'eflezt ck2n.;e iz t'ne C 8. a a- e BATIQUITOS 03FPO~WTION GOVERNANCE OCTOBER 28, 1986 OWXERSHIP OF LAND The land at Batiquitos will be owned by a corporation knoh the Batiquitos Corporation. It will be governed by a chai and a Board of Trustees. FXDERZ CQVST ITLV I ON The Board will create a Federal constitution under w' individual educational enti ties will retain their self-gover authority . The Batiquitos Corporation wi 11 *point a president to ac liaison between the Batiqui tos Corpraticn ar?d the self-gover ducational enti ties. ADVISORY COUNCIL The President shall convene an Advisory Comcil composed representative from each of the approved educational enti resident at the Batiquitos site, the President, and an appoi of the Mayor of Carlsbad. The Advisory Council will mee regular intervals and address issues relating to the ove administration of the educational enterprise, relations bet enti ties, provision of services, and wi 11 make reminnendatior the Batiqui tos Corpration Board regarding enti ties operatin comtemplat ing operat ion. a INDIVI WAIL EDUCATIONAL ELI! ITIES Each of the individual educational entities Will be separa incorporated, governed by a Board of Trustees of its own, administered by officers named by its own Board. The individual educational entities will exercise all acd and administrative powers and responsibilities relating to t oper ati ons . a - .I. 8P.T IQUITCS CO WOW ION GOVEFUSANCE Page 2 TERMINAT ICN OF RELE ICN S WIT H EWCAT IQNAL EN" IT IES Texinination of relations with any of the individual education entities operating at Batiquitas Will occur as a result of a tw thirds vote of the Board of the Batiquitos Corporatio cmtinger.t on prior lease agreements. 0 a a 3t .t' , s2 &2@ LEASE &$y BATIQUITOS LAGOON EDUCATIONAL PARK In consideration of the rents and covenants hereinafter set forth, Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, the following described premises upon the fol 1 owing terms and conditions: Article 1 FUNDAMENTAL LEASE PROVISIONS: A. Date: B. Landlord: Batiquitos Bluff, a California Limited Partnership. C. Tenant: Foundation for the Private Sector, A California D. Tenant's (Article 7 and Trade Name: Foundation for the Private Sector Exhibit "6": Non-profi t Corporation. E. Premises: (Article 3 and Exhibit "6") Approximately 3,000 square feet of space in the Bcil ding One, Batiquitos Lagoon Educational Park building located at 4000 Windrose Circle, Carlsbad, Calif. F. Lease Term: Ten years (10 years) (Article 4) G. Commencement of Term: (Article 4) Premises are leased subject to completion of work by Landlord, with term commencing upon such completion or when Tenant opens for business, which ever occurs earlier. Dollars ($54,000) per annum, payable in twelve (12) equal monthly installments during each year, subject to rental adjustment every 1 year of the lease term, with 1987 as the base year. Rent is $1.50 per square foot per month, triple net. (Article 5A) H. Minimum Annual Rental: FIFTY-FOUR THOUSAND I. Cost of Living Adjustment: C.P.I. annually 4% max. J. Rental Deposit: N.A. (Article 5A) K. Percentage Rental: N.A. percent ( %) (Article 5C) L. Address for Notices: 1 a 91 b f M. To Landlord: Batiqui.t.Os Bluffs 2650 Camino del Rio North, Suite 100 San Diego, CA 92108 .I. To Tenant: To the premises and 310 Constitution Avenue N.E. Washington, D.C. 20002 (Article 30) 0. Security Deposit: N.A. (Article 33) Dollars ($ N.A. 1. References in this Article 1 to other articles are for convenience and designate some of the other Articles where references to the particular Fundamental Lease Provisions appear. Each reference in this Lease to any of the Fundamental Lease Provisions contained in this Article 1 shall be constructed to incorporate all of the terms provided under each such Fundamental Lease Provision. In the event of any conflict between any Fundamental Lease Provision and the balance of the Lease, the 1 atter shal 1 control. Article 2 EXHIBITS The fol lowing drawings and special provisions are attached EXHIBIT "A" - General site plan of an integrated building @which Landlord and others intend to construct or cause to be constructed on real property located in the City, County and State described in Exhibit 'IB" and more particularly shown on Exhibit "A", hereinafter referred to as the "Building". Said site plan shows, among other things, the principal improvements which wil 1 comprise said Building. Tenant acknowledges that the site plan shown on Exhibit "A" is tentative and that Landlord may change the shape, size, location, number and extent of the improvements shown thereon and el iminate or add any improvements to any portion of the Building, provided that Landlord shall not change the size or location of the premises without Tenant's consent. EXHIBIT "B" - Description of the premises, authorized use and Tenant's trade name. EXHIBIT 'IC" - Description of work to be performed by Landlord and by Tenant in or on the premises. EXHIBIT "D" - Guarantee of Lease. EXHIBIT ''E" - Tenant's Estoppel Certificate hereto as exhibits and made a part of this Lease: 2 a 91 \ EXHIBIT 'IF" - Addendum or Rider EXHIBIT "G" - Option to Extend Term < a Articie 3 PREMISES Landlord hereby leases and demises unto Tenant and Tenant hereby leases and takes from Landlord, for the term, at the rental, and upon the covenants and conditions hereinafter set forth, the commercial space referred to herein as the "premises", and described on Exhibit."B" attached hereto and made a part hereof. The premises shal 1 be constructed in accordance with the procedures out1 ined in Exhibit "C" attached hereto and.made a part hereof. Article 4 TERM A. The term of this Lease shal 1 begin as of the date specified in Article 1 hereof, and shall continue thereafter during the Lease Term specified in Article 1 hereof, unless sooner terminated as hereinafter provided in this Lease. B. If the premises are leased subject to completion of work by Landlord, Landlord agrees to deliver to Tenant, and Tenant agrees to accept from Landlord, possession of the premise: forthwith upon substantial completion of the premises a! described in Exhibit "C" hereof. The term "substantial completion of the premises" is defined as the date Landlor( notifies Tenant that the premises are substantially complete tc the extent of Landlord's Work as specified in Exhibit "C", to thc point wherein Tenant's contractor may commence the constructior of Tenant's Work, if any, as specified in Exhibit "C" Certification by Land1 ord's architect ("Project Architect") 01 the substantial completion of the premises in accordance wit' said Exhibit "C" shall be conclusive and binding upon the partie hereto. Tenant shal 1 commence the construction of Tenant's Work if any, as described in Exhibit "C" hereof promptly up0 substantial completion and shal 1 open the premises for busines upon such completion. In the event the term of this Lease ha not commenced within three (3) years from the date hereof, the this Lease shall terminate as of said date and each of th parties hereto shall be released from any further obligatio hereunder. C. Within ten (10) days after Tenant opens for business Tenant will execute and deliver to Landlord a certificat substantial ly in the form attached hereto, marked Exhibit ''E" an made a part hereof, indicating thereon any exceptions theret which may exist at that time. Failure of Tenant to execute an deliver such certificate shall constitute an acceptance of th premises and acknowledgment by Tenant that the statement included in Exhibit "E" are true and correct, without exception. a 3 .I * To the extent Tenant has possession or occupancy of any portion ' of the premises prior to the commencement of the term of this Lease, for any reason whatsoever (e.g., for Tenant to install tenant fixtures or improvements), a1 1 ob1 igations under this Lease (particularly the obligation to maintain liability insurance) shall commence as of the date of such possession or occupancy, excepting only the ob1 igation to pay minimum annual rent shall not commence. D. To the extent Tenant has possession or occupancy of any portion of the premises prior to the commencement of the term of this Lease, for any reason whatsoever (e.g., for Tenant to instal 1 tenant fixtures or improvements), a1 1 ob1 igations under this Lease (particularly the obligation to maintain liability insurance) shall commence as of the date of such possession or occupancy, excepting only the ob1 igation to pay minimum annual rent shall not commence. Article 5 RENTAL AND TAXES a The Tenant agrees to pay as rental for the use and occupancy of the premises, at the times and in the manner hereinafter provided, the following sum of money: A. MINIMUM ANNUAL RENTAL. The minimum rental specified ir Article 1 here shall be payable in twelve (12) equal monthlj installments during each year, in advance, on the first day 01 ezch calendar month without setoff or deduction with the commencement of the term of this Lease. Should the rental perioc commence on a day of the month other than the first day of suc' month, then the rental for the first fractional month shall bl computed on a daily basis for the period from the date o commencement to the end of such calendar month and at an amoun equal to one-three hundred sixtieth (1/360) of the said minimui annual rental for each such day, and thereafter shall be computet and paid as aforesaid. With the execution of this Lease, Tenan is paying to Landlord a rental Deposit, as defined in Article 1 as an advance on the first to become due minimum annual rent. A the end of each 12 month period of this Lease, the minimum annua rental shall be increased by a percentage equal to the percentag increase from the base period of the Consumer Price Index for a1 Urban Consumers, a1 1 i terns, Cal ifornia, pub1 ished by the Burea of Labor Statistics, U.S. Department of Labor. Said Index fo the calendar year designated in Article lH, shall be considere the "base period." In no event shall said minimum annual renta be less than the sum then in effect for the preceding 12 mont period. If any time there shall not exist said Consumer Pric Index, the parties shal 1 substitute any official index publish€ by the Bureau of Labor Statistics, or successor or simila government agency, as may then be in existence and shall be mos nearly equivalent thereto. If the parties shall be unable t agree upon a successor index, the parties shall refer the choic 0 4 .% ' of a successor index to arbitration in accordance with the rules ' of the American Arbitration Association. It is the intent of this provision that the foregoing rental adjustment procedures shall occur effective as of the first day of the month of each 12 month period during this Lease term. B. TAXES a (1) Throughout the term of this Lease, Tenant agrees to pay to Landlord, as additional rent, the amount of taxes and assessments levied and assessed for any such year upon the premises and the underlying realty. Such additional rent for any partial year of the tern hereof shal I be prorated on a time basis. Payment shal 1 be made by Tenant within thirty (30) days after receipt of a written statement from Landlord setting forth the amount of such tax. (2) The term "Floor Area", as used throughout this Lease shall be deemed to mean and include all areas for the exclusive use and occupancy by tenants or subtenants of Landlord, measure6 from the exterior surface of exterior walls (and from the extensions thereof, in the case of openings) and from the center of interior demising partitions, including mezzanines, warehousing or storage areas, clerical or office areas and employee areas. (3). In the event the premises and underlying realty arc not separately assessed but are part of a larger parcel foi assessment purposes (hereinafter referred to as the "1 argei parcel"), "taxes and assessments levied and assessed upon th( 0 premises and the underlying realty" shall mean a fractional portion of said taxes and assessments on the larger parcel (excluding taxes and assessments on any common areas thereon) th numerator of which shal 1 be the Floor Area of the premises an denominator of which shal 1 be the Floor Area of a1 1 the area available for exclusive use and occupancy by tenants of th larger parcel, whether or not actually occupied and open for business, provided that na equitable adjustment shal 1 be made fo buildings which are only partially completed on the date such taxes and assessments become a lien. With respect to an, assessments which may be levied against or upon the premises an the underlying realty, or which under the laws then enforce ma be evidenced by improvement or other bonds, or may be paid i annual installments, only the amount of such annual instal lment (with appropriate proration for any partial year) and statutory interest shall be included within the computation of the annua taxes and assessments levied against the premises and th underlying realty. (4) If at any time during the Lease Term under the laws ( the United States Government, State, County, or City or ai political subdivision thereof in which the premises are. situate( a tax or excise on rent or any other tax however described i levied or assessed by any such political body, against Landloi on account of rentals payable to landlord hereunder, such tax ( @ 5 .I excise shall be considered "taxes" for the proposes of this Article 5B, excluding, however, from such tax or excise all general income taxes, gift taxes, inheritance taxes and estate axes. The term "taxes" shal 1 a1 so include possessory interest a taxes levied in lieu of real property taxes. Article 6 TIMING OF OCCUPANCY The schedule for completion of the facilities is as follows: 1. Execution of lease November 1, 1986. 2. Completion of detailed preliminary plans and 3. Completion of final plans and specifications - January 1, 4. Commencement of construction - February 15, 1987. 5. Completion of premises and occupancy - September 15, specifications - December 15, 1986. 1987. 1987. ARTICLE 7 POSSESSION AND USE A. Possession of the premises shal 1 be delivered to Tenant free and clear of all tenants and occupants and the rights of either, and also free of liens and encumbrances, except those as may be specified in Article 10 hereof. Tenant shall use the premises solely for the purposes and under the trade name specified in Exhibit "B" attached hereto. Tenant shal 1 not use or permit the premises to be used for any other purpose or purposes or under any other trade name whatsoever without the written consent of Landlord first had and obtained. Tenant shall not, without the prior consent of Landlord, sel 1 merchandise from vending macnines or allow any coin operated vending or gaming machines on the premises. During said term the premises, and every part thereof, shall be kept by Tenant in a clean and wholesome condition, free of any objectionable noises, odors or nuisances, and that a1 1 health and pol ice regulations shal 1, i all respects and at all times, be fully complied with by Tenant. B. Tenant shall use its best efforts to completed, or caus to be completed, all deliveries, loading, unloading and service to the premises prior to 1O:OO A.M. of each day. Tenant shall attempt to cause no delivery trucks or other vehicles servicing the premises to park or stand in front of, or at the rear of, the premises from 1O:OO A.M. to 9:00 P.M. of each day. The Landlorc reserves the right to further regulate the activities of the Tenant in regard to deliveries and servicing of the premises, anc Tenant agrees to abide by such further non-discriminatorq 6 a .> regulations of Landlord. C. Tenant shal 1 not do or permit anything to be done in or about the premises nor bring or keep anything therein which is lot within the permitted use of the premises which wil 1 in any way increase the existing rate of or affect any fire or other insurance upon the premises or any of its contents, or cause a cancel lation of any insurance pol icy covering the building or any part thereof of any of its contents. Tenant shall not do or permit anything to be done in or about the premises which will in any way obstruct or interfere with the rights of other tenants or occupants injure or annoy them or use or a1 low the premises to be used for any improper, immoral , unlawful or objectionable purpose; nor shall Tenant cause, maintain or permit any nuisance in, on or about the premises. Tenant shal 1 not commit or a1 low to be committed any waste in or upon the premises. Tenant shall not use the premises, or permits anything to be done in or about the premises, which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all 1 aws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force and with the requirements of any board of fire underwriters or other similar bodies now or hereafter constituted relating to or affecting the conditions, use or occupancy of the premises, excluding structural changes not related to or affected by Tenant's improvements or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord be a party thereto or not, that Tenant has violated any 1 aw, statue, ordinance or governmental rule, regulation or requirement, shal 1 be consulted of that fact as between the Landlord and Tenant. Article 8 UTILITIES SERVICES 0 Tenant agrees, as its own expense, to pay for all water, gas, power, electric current, telephone, and a1 1 other simil ar utilities used by the Tenant on the premise from and after the delivery of possession thereof by Landlord. If any such charges are not paid when due, Landlord may pay the same, and any amount so paid by Landlord shall thereupon become due to Landlord from Tenant as additional rent. Article 9 INDEMNITY - INSURANCE - WAIYER OF SUBROGATION A. Tenant covenants with Landlord that Landlord shall not be liable for any damage or liability of any kind or for any injury to or death of person or damage to property of Tenant or any other person during the term of this Lease, from any cause whatsoever, by reason of the use, occupancy and enjoyment of the 7 0 ' premises by Tenant or any person thereon or holding under Tenant, and that Tenant wil I indemnify and save harmless the Landlorc from all liability whatsoever, on account of any such real or claimed damage or injury and from all liens, claims and demands 0 arising out of the use of the premises and its facilities, or any repairs or alterations which Tenant may make upon said premise, but Tenant shall not be liable for damage or injury occasioned by the negl igence of Land1 ord and its designated agents, servants or employees unless covered by insurance Tenant is required tc provide. This ob1 igation to indemnify shal 1 include reasonable attorneys' fees and investigation costs and a1 1 other reasonable costs, expenses and liabilities from the first notice that any claiix or demand is to be made or may be made. B. Landlord and Tenant hereby waive any rights each may have against the other on account of any loss or damage occasioned to Landlord or Tenant, as the case may be, their respective property, the premises, or its contents or to other portions of the building arising from any risk covered by fire and extended coverage insurance; and the parties each, on behalf of their respective insurance companies insuring the property 0" either Landlord or Tenant against any such loss, waive any righi of subrogation that it may have against the Landlord or Tenant as the case may be. The foregoing waivers of subrogation shal 1 be operative only so long as they do not invalidate any sucl pol i cy. C. Tenant further covenants and agrees that from and aftei the substantial completion of the premises, Tenant wil 1 carry anc maintain, at its sole cost and expense, the following types 0' insurance, in the amounts specified any in for form hereinafter provided for: (i) PUBLIC LIABILITY. Bodily injury liabilitj insurance with limits of not less than Five Hundred Thousanc Dol 1 ars ($500,000.00) per person and One Mi 11 ion Dol 1 ar! ($1,000,000.00) per occurrence insuring against any and a1 1 liability of the insured with respect to said premises 01 arising out of the maintenance, use or occupancy thereof, anc property damage 1 iabi 1 i ty insurance with a 1 imi ted of no' 1 ess than Two Hundred Fifty Thousand Dol 1 ars ($250,000.00 per accident or occurrence. All such bodily injury liabilit! insurance and property damage liabil ity insurance shal specifically insure the performance by Tenant of th indemnity agreement as to liability for injury to or death o persons and injury or damage to property in this Article contained. (ii) TENANT IMPROVEMENTS. Insurance covering a1 1 o the items specified as "Tenant's Work" in Exhibit 'IC" Tenant's 1 easehol d improvements, a1 terations, additions o improvements permitted under Article 11, trade fixtures merchandise and personal property from time to time in, on o upon the premises, in an amount not less than eighty percen (80%) of their full replacement cost from time to time durin 8 a I the term of this Lease, providing protection against an; peril included within the classification "Fire and Extendec Coverage", together with insurance against sprinkler damage vandal ism and malicious mischief. Any pol icy proceeds shal ' be used for the repair or replacement of the property damagc or destroyed unless this Lease shall cease and terminatc under the provisions of Article 18 hereof. (iii) POLICY FORM. All policies of insurance provide1 for herein shal 1 be issued by insurance companies, wit1 general policy holders' rating of not less than A and l financial rating of Class X as rated in the most curren available "Best's" Insurance Reports, and quzl ified to dc business in the State where the building is situated, an( shall be issued in the names of Landlord and Tenant, whicl policies shall be for the mutual and joint benefit ant protection of Landlord and Tenant, and executed copies o such policies of insurance or certificates thereof shal 1 bc deiivered to landlord within ten (10) days after delivery o possession of the premises to Tenant and thereafter withii thirty (30) days prior to the expiration of the term of eacl such policy. All public liability and property damag pol icies shal 1 contain a provision that Landl ord, a1 thoug named as an insured, shall nevertheless be entitled t recovery under said policies for any loss occasioned to it its servants, agents and employees by reason of th negligence of Tenant. As often as any such policy shal expire or terminate, renewal or additional policies shall b procured and maintained by Tenant in like manner and to lik extent. A1 1 pol icies of insurance del i vered to Landl ord mus contain a provision that the company writing said policy wil give to Landlord twenty (20) days notice in writing i advance of any cancellation or lapse or the effective date o any reduction in the amounts of insurance. All publi 1 iabi 1 i ty, property damage and other casual ty pol icies shal be written as primary policies, not contributing with and no in excess of coverage which Landlord may carry. To th extent Landlord's lender or ground lessor, if any, s requests, said lender and lessor shall also be named a additional insureds and shall be given the notices to th same extent as Landlord is entitled. D. Notwithstanding anything to the contrary containe within this Article 9, Tenant's obligations to carry th insurance provided for herein may be brought within the coverage of a so-called blanket policy, or policies of insurance Carrie and maintained by Tenant, provided, however, that Landlord shal be named as an additional assured thereunder as its interest ma appear and that the coverage afforded Landlord wil 1 not b reduced or diminished by reason of the use of such blanket polic of insurance, and provided further that the requirements se forth herein are otherwise satisfied. Tenant agrees 'to permi Landlord at a1 1 reasonable times to inspect the policies o insurance of Tenant covering risks upon the premises for whic policies or copies thereof are not required to be delivered t 9 0 e a .. , Landlord. E. Landlord shal 1 at a1 1 times during the term hereof maintain in effect a policy or policies of insurance covering @ the building of which the premises are a part, in an amount not less than eighty percent (80%) of full replacement cost (exclusive of the cost of excavations, foundations and footings) from time to time during the term of this Lease or the amount of such insurance Landl ordls mortgage 1 ender requi res Landl ord to maintain, whichever is the greater, providing protection against any peril generally included within the classification "Fire anc Extended Coverage," together with insurance against sprinkler damage, vandal ism and malicious mischief. Landlord's ob1 igatior to carry the insurance provided for herein may be brought withir the coverage of any so-called blanket policy or policies of insurance carried and maintained by Landl ord, provided that the coverage afforded will not be reduced or diminished by reason of the use of such blanket pol icy of insurance. Tenant agrees tc pay Landlord as additional rent, during each year or partial year of the term of this Lease, the cost to Landlord of the insurancc required to be maintained by Landlord on the premises under Article 9E for each such year or partial year. Such additiona' rent for any partial year of the term hereof shal 1 be prorated 01 a time basis. Payment shall be made by Tenant within fifteei (15) days after receipt of a written statement from Landlor1 \ setting forth the cost of such insurance and showing ii reasonable detail the manner in which it has been computed. I the event the cost to the Landlord of the insurance it ii requiredtomaintain on the premises under said Article 9E is no separately charged to Landlord by its insurance carrier, thl 0 portion applicable to the premises of the cost of such insuranci shall bethat proportion of such cost which the Floor Area of th premises bears to the Floor Area of a1 1 the areas avail able fo exclusive use and occupancy by tenants of the building, whethe or not actually occupied and open for business covered by SUC insurance. Article 10 TITLE OF LANDLORD Landlord covenants that as of the date hereof there are n liens upon its estate other than (a) the effect of covenants conditions, restrictions, easements, ground 1 ease(s), if any, an mortgages of record, and other rights of way of record; (b) th effect of any zoning laws of the City, County and State where th building is situated, and (c) general and special taxes no delinquent. Tenant agrees that as to its leasehold estate it and all persons in possession or holding under it, will confor to and wil 1 not viol ate the terms of any of the aforementione matters of record, or any other matters of record. Article 11 10 a .. . TENANT'S RIGHTS TO MAKE ALTERATIONS A. Landlord agrees that Tenant may, at its own expense an after giving Landlord notice in writing of its intention to d so, from time to time during the term hereof, make alterations additions and changes in and to the interior of the premise (except those of a structural nature) as it may find necessary o convenient for its purposes, provided that the value of th premises is not thereby diminished, and provided, however, tha no alterations, additions or changes costing in excess of Tw Thousand Five Hundred Dol lars ($2,500.00) may be made withou first procuring the approval in writing of Landlord. I addition, no a1 terations, .additions or changes shall be made t any store front , the exterior walls or roof of the premises, no shall Tenant erect any mezzanine or increase the size of same, i one be initially constructed, unless and until the writte consent and approval of Landlord shall first have been obtained In no event shall Tenant make or cause to bemade any penetratio through the roof of the premises without the prior writte approval of Landlord. Tenant shall be directly responsible fo any and all damages resulting from any violation of th provisions of this Article. all a1 terations, additions, o changes to be made to the premises which require the approval o Landlord shal 1 be under the supervision of a competent architec or competent licensed structural engineer and made in accordanc with P1 ans and Specifications with respect thereto, approved i writing by Landlord before the commencement of work, where SUC approval is required pursuant to the provisions of this Article A71 work with respect to any a1 terations, additions, and change must be done in a good and workmanlike manner and diligent1 prosecuted to completion to the end that the premises shal 1 a all times be a complete unit except during the period of work Upon completion of such work, Tenant shall file for record in th office of the County Recorder where the building is located Notice of Completion as permitted by the law. Upon terminatio of the Tenant's leasehold estate such a1 terations, additions an improvements shal 1 be performed and done strictly in accordanc with the laws and ordinances relating thereto. In performing th work of any such alterations, additions or changes, Tenant shal have the work performed n such a manner as not to obstruct th access to the premises of any other tenant in the building. 8. In the event that Tenant shall make any permitte a1 terations, additions or improvements to the premises under tt terms and provisions of this Article 11, Tenant agrees upon il part to carry such insurance as required by Article 9C (ik covering any such a1 teration, addition or improvement, it beir expressly understood and agreed that none of such a1 teration! additions or improvements shal 1 be insured by Land1 ord under SUC insurance as it may carry upon the building of which the premise are a part, nor shall Landlord be required under any provisior for reconstruction of the premises to reinstall any SUC a1 terations, improvements or additions. C. At Landlord's option upon termination or expiration c @ 0 a 11 this Lease, Tenant shall remove any or all of the improveme constructed or instal led by Tenant on the premises,, with Ten repairing any damages to the premises caused by such removal. Article 12 MECHANICS' LIENS e A. Tenant agrees that it will pay or cause to be paid i costs for work done by it or caused to be done by it on premises, and Tenant wil 1 keep the premises free and clear of z mechanics' liens and other liens on account of work done Tenant or persons claiming under it. Tenant agrees to and sh; indemnify, defend and save Landlord free and harmless agair 1 iabil ity, loss, damage, costs, attorneys' fees, and a1 1 otl expenses on account of claims of lien of laborers or materialr; or others for work performed or materials or supplies furnist for the Tenant or persons claiming under it. if Tenant shal 1 desire to contest any claim of lien, shall furnish Landlord adequate security of the value ore in i amount of the claim, plus estimated costs and interest, or a bc of a responsible corporate surety in such amount conditioned the discharge of the lien. If a final judgment establishing 1 validity or existence of a lien for any amount is entered, Teni shall pay and satisfy the same at once. C. If Tenant shall be in default in paying any charge 1 which a mechanics' lien claim and suit to foreclose the lien ha bzen filed, and shall not have given Landlord security to protc the property and Landlord against such claim of 1 ien, Landlc may (but shall not be so required to) pay the said claim and a costs, and the amount so paid, together with reasonab attorneys' fees incurred in connection therewith, shal 1 immediately due and owing from Tenant to Landlord, and Tena shall pay the same to Landlord with interest at the maxim lawful rate from the dates of Landlord's payments. Should a claims of lien be filed against the premises or any acti affecting the title to such property be commenced, the par receiving notice of such liens or action shall forthwith give t other party written notice thereof. Landlord or i representatives shall have the right to go upon and inspect t premises at all reasonable times and shal 1 have the right to PO and keep posted thereon notices of non-responsibi 1 i ty, or su other notices which the Landlord may deem to be proper for t protection of Landlord's interest in the premises. Tenant shal before the commencement of any work which might result in a such lien, give to Landlord written notice of its intention to so in sufficient time to enable the posting of such notices. Article 13 ADVERTISING SIGNS Tenant shall not utilize any sign on cr about the premises exce B. a 12 a as has been approved by Landlord. Tenant shal 1 not affix maintain upon the glass panes and supports of the show wind (and within 24 inches of any window), doors and the exter wal Is of the premises, any signs, advertising placards, nam insignias, trademarks, descriptive material or any other s like item or items except such as shall have first received written approval of Landlord as to size, type, color, locati copy, nature and display qualities. Anything to the contrary this Lease notwithstanding, Tenant shall not affix any sign the roof of the premises. In addition, no advertising med shall be utilized by Tenant which can be heard or experien outside Tenant's premises, including without 1 imi ting generality of the foregoing, flashing lights, search ligh loudspeakers, phonographs, radios or television. Tenant shz not display, paint or place or cause to be displayed, painted pl aced, any handbi 11 s, bumper stickers or other advertis. devices on any vehicle parked in the parking area of t Building, whether belonging to Tenant, or to Tenant's agent, to any other person; nor shall Tenant distribute, or cause to distributed, in the Building, any handbills or other advertis devices, and in the event of a violation of this covenant Tenant, Tenant shall pay to Landlord the cost and exper necessary to remove any such unauthorized material from 1 Building. Article 14 FIXTURES AND PERSONAL PROPERTY 0 A. Any trade fixtures, signs and other personal property Tenant not permanentiy affixed to the premises shall remain t property of Tenant and Landlord agrees that Tenant shal 1 have I right, provided Tenant be not in default under the terms of tk Lease, at any time, and from time to time, to remove any and a of its trade fixtures, sign and other personal property which may have stored or installed in the premises, including but r limiting the same to counters, shelving, showcases, mirrors a other movable personal property. Nothing in this Artic contained shall be deemed or construed to permit or allow Tena to remove so much of such personal property, without t immediate rep1 acement thereof with simi 1 ar personal property comparable or better quality, as to render the premis unsuitable for conducting the type of business specified Exhibit "B" attached hereto. Tenant at its expense sha immediately repair any damage occasioned to the premises reason of the removal of any such trade fixtures, signs, a other personal property, and upon the last day of the Lease Te or a date of earlier termination of this Lease, shall leave t premises in a neat and clean condition, free of debris. A trade fixtures, signs and other personal property instal led in attached to the premises by Tenant must be new when so install or attached. B. All improvements to the premises by Tenant, includii but not limited to light fixtures, floor coverings ai 0 @ 13 partitions, but excluding trade fixtures and signs, shall be( the property of Landlord upon expiration or earlier terminal of this Lease. C. Tenant shall pay before delinquency all tax assessments, license fees and public charges levied, assessec imposed upon its business operation, as well as upon its tr fixtures, lease-hold improvements (including, but not limited those Tenant is required to make in accordance with provisions of Exhibit "C" hereof), merchandise and other persc property in, on or upon the premises. In the event any s items of property are assess ed with property of Landlord, tk and in such event, such assessment shall be equitably divi between Landlord and Temnt to the end that Terant shall pay c its equitable proportion of such assessment. Landlord sh determine the basis of prorating any such ass essment s and s determir,ation shall be binding upon both Landlord and Tenant. taxes, assessments, fees or charges referred to in this paragi shall be considered as taxes under the provisions of Articl hereof. Article 15 ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN CORPORATE OWNERS1 A. Tenant shall not transfer, assign, sublet, enter i license or concession agreements, change ownership, mort99 hypothecate this Lease or Tenant's interest in and to premises without first procuring the written consent Landlord. Any attempted transfer, assignment, sublettj license or concession agreement, change of ownership, mort9 gc hypthecation without Landlord's written consent shall be 7 and mnfer no rights upon any third person. Without in any liniting Landlord's rights to refuse to give such consent for other reason or reasons, Landlord reserves tZle right to refusl give such consent unless Temnt remains fully liable during unexpired tern of the Lease and Landlord further reserves right to refuse to give such consent if in Landlord's reasom business judgment the quality of merchandising operation i: may be in any kay adversely affected during the term of Lease or the financial worth of the proposed new tenant is 1 than that of the Tenant executing this Lease or of Tenant Tenant's Guarantor as the case may be. Tenant agrees reimburse Landlord for for Landlord's reasonable attorney f incurred in canjunction with the processing and documentatior any such requested transfer, assignment, subletting, licensinc concession agreement, change of ownership, mortgage hypothecation of this Lease or Tenant's interest in and to premises. 0 B. Each transfer, assignment, subletting, licer concession agreement, mortcpge and hypothecation to which tl has been consent shall be by an instrument in writing in 1 satisfactory to Landlord and shall be executed by the transfe as signor, sub1 es sor, 1 i cens or, con ces sima ire, hypothecator e 14 . mortgagor and the transferee, assignee, sublessee, licensl concessionaire or mortgagee in each instance, as the case may and each transferee, assignee, subl essee, 1 icensc concessionaire or mortgagee shall agree in writing for I benefit of Landlord herein to assume, to be bound by, and perform the terms, covenants and conditions of this Lease to done, kept and performed by Tenant, including the payment of a amounts due or to become due under this Lease directly Landlord. One executed copy of such written instrument shall delivered to Landlord. Failure to first obtain in writi tandl ord's consent or fail ure to comply with the provisions this Article shall operate to prevent any such transfc assignment, subl etting, 1 icense, concession agreement, mortg, or hypothecation from becoming effective. C. If a Tenant hereunder is a corporation (except corporation whose stock is traded on the NYSE or the AMEX), or an unincorporated association or partnership, the transfc assignment or hypothecation of any stock or interest in su corporation, association or partnership in the aggregate excess of twenty-five percent (25%) shal 1 be deemed an assignmc within the meaning and provisions of this Article 15. Article 16 TENANT'S CONDUCT OF BUSINESS A. ' Tenant covenants and agrees that, continuously a uninterruptedly from and after its initial opening for businer it wil 1 operate and conduct within the premises the busine which it is permitted to operate and conduct under the provisic hereof, except while the premises are untenantable by reason fire or other casualty, and that it will at all times keep a maintain within and upon the premises and adequate stock merchandise and trade fixtures to service and supply the usu and ordinary demands and requirements of its customers and th it will keep its premises in a neat, clean and orderly conditic Tenant agrees that all trash and rubbish of the said Tenant sha only be deposited within receptacles as provided by Landlord a that there shall be no other trash receptacles permitted remain outside of the premises. Landlord agrees to cause su receptacles to be emptied and trash removed at Tenant's cost a expense as part of the common area expenses. B. Tenant shal 1 faithfully observe and comply with t rules and regulations that Landlord shal 1 from time to ti promulgate and/or modify. The rules and regul ations shal 1 binding upon the Tenant upon delivery of a copy of them Tenant. Landlord shal 1 not be responsible to Tenant for t nonperformance of any said rules and regulations by any othl tenants or occupants. A1 1 such rules and regulations shal 1 I non-discriminatory and shall be applicable to all users a, tenants of the Bui 1 ding. Article 17 0 e 15 I. REPAIRS AND MAINTENANCE A. Tenant agrees at all times, from and after substanti completion of the premises, and at its own cost and expense, repair, replace and maintain a good and tenantable condition t premises and every part thereof, excluding the roof, exteri walls, structural parts of the premises and structural flo (floor covering, including carpeting, terrazzo or other speci flooring installed by or at the request of Tenant, to maintained by the Tenant), and including without limitation t utility meters, pipes and conduits, a1 1 fixtures, a conditioning and all Tenant's signs, locks and closing devicc and all window sash, casement or frames, door and door frame and all such items of repair, maintenance and improvement reconstruction as may at any time or from time to time required by government agency having jurisdiction there( Landlord will contract with a service company for month m3intenance of the heating and air conditioning equipment on f roof and Tenant shall pay Landlord for this service on a month basis. B. Subject to the foregoing provisions hereof, the tandlc shali keep and maintain in good and tenantable condition a repair, the roof, exterior walls, structural parts of t premises and structural floor, pipes and conduits outside t premises for the furnishing to the premises of various utiliti (except to the extent that the same are the obligation of t appropriate pub1 ic uti 1 i ty company); provided, however, th Landl ord shal 1 not be required to make repairs necessitated reason of the negligence of Tenant or anyone claiming und Tenant, or by reason of the failure of Tenant to perform observe any conditions or agreements in this Lease contained, cause by alterations, additions, or improvements made by Tent or anyone claiming under Tenant. Anything to the contra notwithstanding contained in this Lease, Landlord shal 1 not any way be '1 iabl e to Tenant for failure to make repairs as here specifically required of it unless Tenant has previously notifi Landlord, in writing, of the need for such repairs and tandlc has failed to commence making repairs within 30 days aft receipt of such notice and to complete said repairs withir reasonable period of time fol lowing receipt of Tenant's writ1 notification. Any costs Landlord incurs from time to time connection with the maintenance and repair of the premises above provided shal 1 be bil 1 ed by Landl ord to Tenant and UF receipt of such bil lings Tenant shal 1 immediately reimbur Landlord for said costs. C. If Tenant refuses or neglects to make repairs and/ maintain the premises, or any part thereof, in a mann reasonabl e satisfactory to Landl ord, Landl ord shal 1 have t right, upon giving Tenant reasonable written notice of i election to do so, to make such repairs or perform su maintenance on behalf of and for the account of Tenant. In st event such work shall be paid for the Tenant as additional rc ' 16 e . promptly upon receipt of a bill therefor. D. As used in this Article the expression "exterior wall! shall not be deemed to include store front or store fronts, plat glass, window cases or window frames, doors or door frame: security gril 1 es or simi 1 ar encl osures. It is understood an agreed that Landlord shal 1 be under no ob1 igation to make an repairs, a1 terations, renewals, replacements or improvements t and upon the premises or the mechanical equipment excl usivel serving the premises at any time except as in this Leas expressly provided. E. Upon any surrender of the premises, Tenant shal redeliver the premises to Landlord in good order, condition ar state or repair, ordinary wear and tear excepted, and exceptir such items of repair as may be Landlord's obligation hereunder. Article 18 RECONSTRUCTION @ A. In the event the premises be damaged by fire or othc perils covered by Landlord's fire and extended coveras i nsurance, Landl ord shall : (i) Mithin a period of ninety (90) days thereaftel commence repair, reconstruction and restoration of said premise and prosecute the same diligently to completion, in which ever this Lease shall. continue in full force and effect; or (ii 1 In the event of a partial or total destructior of the premises during the last three (3) years of the ter hereof, Landlord and Tenant shall each have the option t terminate this Lease upon giving written notice to the other c exercise thereof within thirty (30) days after such destructio For purposes of this paragraph (ii), "partial destruction" shal be deemed a destruction to an extent of at least thirty-three ar one-third percent (33-1/3%) of the then full replacement cost ( the premises as of the date of destruction. B. In the event the premises shall be damaged as a resul of any flood, earthquake, act of war, nuclear reaction, nuclei radiation or radioactive contamination, or from any othc casualty not covered by Landlord's fire and extended covera5 insurance, to any extent whatsoever, Landlord may within nine1 (90) days following the date of such damage, commence repaii reconstruction or restoration of said premises and prosecute ti same diligently to completion, in which event this Lease shal continue in full force and effect, or within said ninety-d? period elect not to so repair, reconstruct or restore sai premises in which event this Lease shall cease and terminate. : either such event Landl ord shal 1 give Tenant written notice ( i ts i ntention wi thi n sai d ni nety-day period. C. In the event of any reconstruction of the premises undt o 17 a this Article 18, said reconstruction shall be in strl conformity with the provisions of Exhibit "C" hereof and to extent of the work as therein set forth as "Description Landl ord's Work" and "Description of Tenant's lor Notwithstanding that a1 1 reconstruction work shal 1 be perfor @ by Landlord's contractor unless Landlord shal 1 otherwise ag in writing, Landlord's ob1 igation to reconstruct the premi: shall be only to the extent of the work as described "Description of Landl ordls Work" in Exhibit 'IC" hereof; Tena at its sole cost and expense, shal 1 be responsible for the rep and restoration of all items set forth as Tenant's Work in st Exhibit "C" and the replacement of its stock in trade, tri fixtures, furniture, furnishings and equipment. Tenant sha commence installation of fixtures, equipment and merchand hereof promptly upon delivery to it of possession of the premi and shall diligently prosecute such instal lation to completion provisions of this Article, the parties shall be released ther without further ob1 igations to the other party coincident w the surrender of possession of the premises to the Landlol except for items which have theretofore accrued and be tf unpaid. In the event of termination for reason of damage by fi or other perils and such damage is covered by Tenant's fire a extended coverage insurance under Article 9C (iv), all si proceeds covering the i tems specified as "Tenant's Mork" Exhibit 'IC", and Tenant's leasehol d improvements, but excl ud; proceeds for trade fixtures, merchandise, signs and otf personal property, shall be disbursed and paid to the Landlord E. In the event of repair, reconstruction and restorati as herein provided, the minimum annual rental provided to be pi under Article 1 hereof shal 1 be abated proportionately with 1 degree in which the Tenant's use of the premises is impair commencing from the date of destruction and continuing during 1 period of such repair, reconstruction or restoration. Tena shal 1 continue the operation of its business on the premic during any such period to the extent reasonably practicable fr the standpoint of prudent business management; and the ob1 igati of Tenant hereunder to pay percentage rental and addition rental shall remain in full force and effect. Tenant shall r be entitled to any compensation or damages from Landlord for 1( of the use of the whole or any part of the premises, or t building of which the premises are a part, Tenant's person property or any inconvenience or annoyance occasioned by su damage, repair, reconstruction or restoration. F. With respect to any partial or total destruction whi Landlord is obligated to restore or may restore under any of t provisions of this Lease, Tenant hereby waives any statuto rights of termination which may arise by reason of su des truc ti on. G. In the event of any damage to the premises, Tenant sha give to Landlord written notice of such damage within 5 da 18 D. Upon any termination of the Lease under any of a a .. after its occurrence. Article 19 COMMON AREAS AND AUTOMOBILE PARKING 0 A. Landl ord shal 1 provide up to a maximum of 11 parki spaces. If during the term of the lease Tenant, on a regul basis, requires additional parking, Landl ord shal 1 agree provide additional parking spaces in which Tenant shall pay Fif ($50.00) per spaces, per month in 1986 Dollars, plus C.P. adjustment every year. otherwise specifically provided in this Lease, authorize empowered and privileged to use the common areas in common wi other persons during the term of this Lease. Landlord agree without cost or expense to Tenant, to construct or cause to constructed, the common areas generally upon the area shown the site plan attached hereto and marked Exhibit "A", and maintain and operate, or cause to be maintained and operat (except as herei naf ter provi ded wi th reference to cost maintenance), said common areas at a1 1 times fol lowing completi thereof, for the benefit and use of the customers and patrons Tenant, and of other tenants, owners, and occupants of the la constituting the Building of which the premises are a part. C. Landlord shall keep or cause to be kept said comm areas in a neat, clean and orderly condition, properly light and landscaped, and shal 1 repair any damage to the facil iti thereof, but a1 1 expenses in connection with said common are . shall be charged and prorated in the manner hereinafter s forth. It is understood and agreed that the phrase "expenses connection with said common areas" as used herein shall construed to incl ude, but not be 1 imi ted to, a1 1 sums expended connection with said common areas for all general maintenance a repairs, resurfacing, or painting, restriping, cleaning, tra reinoval, sweeping and janitorial services, maintenance a repair of si dewal ks, curbs, and bui 1 ding signs; spri nkl systems, plant and 1 andscaping; 1 ighting and other uti1 i tie directional signs and other markers and bumpers; mai ntenance a repair of any fire protection systems, lighting systems, sto drainage systems and any other uti 1 i ty systems; personnel imp1 ement such services incl uding, if Landl ord deems necessar the cost of security guards; real and personal property taxe possessory interest taxes, and assessments on the improvemen and land comprising said common areas; any government imposition or surcharge imposed against Landlord or assess against the automobil e parking area of any other portion of t common area; depreciation on maintenance and operating machine and equipment (if owned) and rental paid for such machinery a equipment (if rented), adequate public liability and proper damage insurance on the common areas (under which Tenant shall named as an additional assured). B. Tenant and its employees and invitees are, except 0 19 0 .. . In addition, "expenses in connection with said common are shall include costs for the accounting, bookkeeping i collection of the expenses in connection with said common ar in an amount equal to ten percent (10%) of Tenant's pro r4 share of the total of the aforementioned expenses for e, calendar year. Landlord may cause any or a1 1 of said services be provided by an independent contractor or contract0 Anything to the contrary notwithstanding contained hereinabo all expenses in connection with the original construction i installment of the common areas shall be at the sole cost t expense of Landlord and shall not in any event be charged to Tenant. D. Tenant shal 1 pay to Landlord Tenant's pro rata share such common area expenses in the following manner: (i) From and after the date the term of this lease proved for in Article 1 hereof has commenced, but subject adjustment as hereinafter in this subparagraph (i) providl Tenant shall pay Landlord on the first day of each calendar mo of the term of this Lease an amount estimated by Landlord to Tenant's pro rata share of such common area expenses. Landlc may adjust the estimated monthly charge at the end of a calendar quarter on the basis of Landlord's experience a reasonably anticipated costs. (l'i) Within thirty (30) days fol 1 owing the end of ea calendar quarter or, at Landl ord's option, each calendar yei Landlord shall furnish Tenant a statenrent covering the calenc quarter or year just expired, certified as correct by a certifi pub1 ic accountant or an authorized representative of Landl oi showing the total operating cost, the amount of Tenant's F rata share of such common area expenses for such calendar quarl or year and the payments made by Tenant with respect to SL period as set forth in subparagraph (i). If Tenant's pro ra share of such common area expenses exceeds Tenant's payment made, Tenant shall pay Landlord the deficiency within ten (I days after receipt of such statement. If said payments exceed offset the excess against payments next thereafter to become ( Landlord as set forth in said subparagraph (i). (iii) Tenant's pro rata share of the total common ar expenses for the previous calendar quarter or year shall be th portion of a1 1 of such expenses which is equal to the proporti thereof which the number of square feet of Floor Area in t premises bears to the total number of square feet of Floor Ar of buildings in the entire Building which are from time to ti occupied and open for business as of the commencement of ea calendar quarter. There shal 1 be appropriate adjustment Tenant's share of the common area expenses as of the commenceme and expiration of the term of this Lease. F. Landlord shall at all times have the right and privile of determining the nature and extent of the common areas, and making such changes therein and thereto from time to time whi 0 20 a .I in its opinion are deemed to be desirable and for the be interests of all person using said common areas, including t location and re1 ocation of driveways, entrances, exit automobile parking spaces, the direction and flow of traffi instal 1 ation of prohibited areas, 1 andscaped areas, and a1 1 0th facilities thereof. G. Nothing contained herein shal 1 be deemed to create a liability upon Landlord for any damage to motor vehicles customers or employees or for loss of property from within su motor vehicles, unless caused by the negligence of Landlord, i agents, servants or employees. H. Landlord shall also have the right to establish, a from time to time change, alter and amend, and to enforce again Tenant and the other uses of said common areas such reasonab rules and regulations (including the excl usion of employee parking therefrom) as may be deemed necessary or advisable f the proper and efficient operation and maintenance of said comm areas. The rul es and regul ati ons herein provided may incl ud without limitation, the hours during which the common shall open for use. Landlord may, if in its opinion the same advisable, establish a system or systems of validation or oti type operation, incl uding a system of charges against no validated parking checks of users, and Tenant agrees to confc to and abide by a1 1 such rules and regul ations in its use and t use of it customers and patrons with respect to said automobi parking area, provided, however, that all such rules 2 regulations and such types of operation or validation of parki checks and other matters .affecting the customers and patrons Tenant shall apply equally and without discrimination to a persons entitled to the use of said automobile parki facil i ties. I. Land1 ord shal 1 at a1 1 times during the term of tk Lease have the sole and excl usive control of the common arei and may at any time and from time to time during the term h2rE exclude and restrain any person from use or occupancy there( excepting, however, bona fide customers, patrons and servic suppliers of Tenant, and other Tenants of Landlord who make 1 of said areas in accordance with the rules and regulatic established by Landlord, the other tenants of Landlord and ' other owner of the building to use the same in common w' Tenant, and it shall by the duty of Tenant to keep all of s( areas free and clear of any obstructions created or permitted Tenant or resulting from Tenant's operation and to permit the of any said areas only from normal parking and ingress and egr by the said customer, patrons and service-suppliers to and f the building occupied by the Tenant and other tenants Landlord. 0 0 J. If in the opinion of Landlord unauthorized persons q using any of said areas by reason of the presence of Tenant the premises, Tenant, upon demand of Landlord, shall enforce s rights against all such unauthorized persons by appropril 21 a proceedings. Nothing herein shal 1 affect the rights of Landl 01 at any time to remove any such unauthorized persons from sal areas or to restrain the use of any said areas by unauthorizt persons. ARTICLE 20 0 BANKRUPTCY - INSOLVENCY Tenant agrees that in the event a1 1 or substantially a1 1 I Tenant's assets be placed in the hands of a receiver or truste and such receivership or trusteeship continues for a period thirty (30) days, or should Tenant make an assignment for t benefit of creditors of be finally adjudicated a bankrupt, 1 shoul d Tenant institute any proceedings under the Bankruptcy A as the same now exists or under any amendment thereof which m hereafter be enacted, or under any other act relating to t subject of bankruptcy wherein Tenant seeks to be adjudicated bankrupt, or to be discharged of its debts, or to effect a pl of liquidation, composition or reorganization, or should a invol untary proceeding be f i 1 ed agai ns t Tenant under any su bankruptcy laws and such proceeding not be removed within nine (90) days thereafter, then tenant shall be in default under th Lease, and this Lease or any interest in and to the premis shall not become an asset in any such proceedings and, in a slrch event and in addition to any and all rights or remedies Landl ord hereunder or by 1 aw provided, it shal 1 be 1 awful f Landlord to declare the term hereof ended and to re-enter t premises and take possession thereof and remove all perso therefrom and Tenant shal 1 have no further claim thereon heTeunder. The provision of this Article 20 shall also apply any Guarantor of this Lease. 0 ARTICLE 21 DEFAULTS BY TENANT A. Should Tenant at any time by in defaul t hereunder wi respect to any rental payments or other charges payable by Teni hereunder, and should such defaul t continue for a period of fi (5) days after written notice from Landlord to Tenant; or shor the Tenant be in default in the prompt and full performance any other of its promises, covenants or agreements her1 contained and should such default or breach of performai continue for more than a reasonable time (in no event to exci thirty (30) days) after written notice thereof from Landl ord tenant specifying the particulars of such default of beach performance; or should Tenant vacate or abandon the premis then Landlord may treat the occurrence for anyone or more of foregoing events as a breach of thi s Lease, and in addition any or all other rights or remedies of Landlord hereunder and the law provided, it shal 1 be at the option of Landlord, with further notice or demand of any kind to Tenant or any ot person: 22 a (a) The right of Landl ord to decl are the term hereof and re-enter the premises and take possession thereof and remove z persons therefrom, and Tenant shal 1 have no further claim ther or thereunder; or (b) The right of Landlord without declaring this Lease en to re-enter the premises and occupy the who1 e or any part therc from and on account of Tenant to col lect said rent and any ot rent that may thereafter become payable. (c) The right of Landlord, even though it may have I entered the premises, to-thereafter elect to terminate this Le and a1 1 of the rights of Tenant in or to the premises. premises under the provisions of subparagraph (b) above, Landl shall not be deemed to have terminated this lease, or . liability of Tenant to pay rent thereafter to accrue, or liability for damages under any of the provisions hereof, by such re-entry or be any action in unlawful detainer, otherwise, to obtain possession of the premises, unless Landlc shall have notified Tenant in writing that it has so elected terminate this lease, and Tenant further covenants that t service by Landlord of any notice pursuant to the unlawf detainer statutes of the State where the building is situated i the surrender of possession pursuant to such notice shall r (unless Landlord elects to the contrary at the time of or at i time subsequent to the serving of such notices and such elect- be evidenced by written notice to Tenant) be deemed termination of this Lease. In the event of any entry or taki possession of the premises as aforesaid, Landlord shall have 1 right, but not the obligation, to remove therefrom all or a part of the personal property located therein and may place 1 same in storage at a public warehouse at the expense and risk the owner or owners thereof. C. Should Landlord elect to terminate this lease under 1 provision of subparagraphs (a) or (c) above, Landlord may recor from Tenant as damages: (i) the worth at the time of award of any unpaid rent wh; had been earned at the time of such termination; plus (ii) the worth at the time of the amount by which t unpaid rent which would have been earned after termination unt the time of award exceeds the amount of such rental loss tena proves could have been reasonably avoided; plus (iii) The worth at the time of award of the amount by whi the unpaid rent for the balance of the term after the time award exceeds the amount of such rental loss that Tenant prov could be reasonably avoided; plus (iv) any other amount necessary to compensate Landlord f e B. Should Landlord have re-entered the premises under a e 23 a1 1 the detriment proximately caused Tenant's failure to perf his obligations under this Lease or which in the ordinary cou of things would be likely to result therefrom, including, but limited to any costs or expenses incurred by Landlord maintaining or preserving the premises after such defau preparing the premises for reletting to a new tenant, any repa or alterations to the premises for such reletting, leas commission, or any other costs necessary or appropriate to re the premi ses. (VI at Landlord's election such other amounts in addition or in lieu of the aforegoing as may be permitted from time time by the laws of the State where the building is situated. D. As used in subparagraphs (i) and (ii) above, the "wo at the time of award" is computed by allowing interest at rate of ten percent (10%) per annum. As used in subparagr, (iii) above the "worth at the time of award" is computed discounting such amount at the discount rate of the Fedel Reserve Bank nearest to the location of the building at the t of award plus one percent (1%). E. For a1 1 purposes of this Article 21, the term "re shall be deemed to be the minimum annual rental and all ot sums required to be paid by Tenant pursuant to the terms of t Lease. All such sums, other than the minimum annual rent shal 1 be computed on the basis of the average monthly amo thereof accruing during the immediately preceeding sixty ( month period, except that if it becomes necessary to compute s rental before such a sixty (60) month period has occurred then the basis of the average monthly amount thereof accruing dur such shorter period. F. In the event of default, all of Tenant's fixtur furniture, equipment, improvements additions, a1 terations ( other personal property, shal 1 remain on the premises and in t event, and continuing during the length of said default, Land1 shall have the right to take the exclusive possession of same to use same, rent or charge free until a1 1 defaults are cured at its option, at any time during the term of this Lease, require Tenant to forthwith remove same. G. Notwithstanding any other provisions of this Artic Landlord agrees that if the default complained of, other than the payment of monies, is of such a nature that the same can] be rectified or cured within the thirty (30) day period requir such rectification or curing as specified in the written not relating thereto, then such default shall be deemed to I rectified or cured if Tenant within such period of thirty ( days shal 1 have commenced the rectification and curing theri and shall continue thereafter with all due diligence to cai such rectification and curing and does so complete the same w the use of such diligence as aforesaid. H. The remedies given to Landlord in this Article shall 0 24 0 in addition and supplemental to a1 1 other rights or remed which Landlord may have under the laws then in force. I. The waiver by Landlord of any breach of any te covenant or condition herein contained shall not be deemed to a waiver of such term, covenant or condition or any subsequ breach of the same or any other term, covenant or condit herein contained. The subsequent acceptance of rent hereunder Landlord shall not be deemed to be a waiver of any preced breach by Tenant of any term, covenant or condition of t Lease, other than the failure of Tenant to pay the particu rental so accepted, regard1 ess of Landl ord's know1 edge of s preceding breach at the time of acceptance of such rent. covenant, term, or condition of this Lease shall be deemed have been waived by Landlord, unless such waiver be in writing Landl ord. rents and charges herein reserved upon the furniture, fixtur merchandise, and other personal property owned by Ten (excluding leased equipment) situated upon the premises, and s items of personal property shal 1 not be removed from the premi until said rent and charges are fully paid. tenant agrees execute such security agreements or financing statements Landlord may require to properly record its lien in the pub records, and in the event of default by Tenant in the payment any sum.hereunder, Landlord shall have the right to enforce s 1 ien in the manner provided for forecl osure of security intere under the Uniform Commercial Code. Tenant hereby appoi Landlord as Tenant's attorney-in-fact to file such financ Article 22 DEFAULT BY LANDLORD J. Landlord shall have a first and prior lien for 0 statements. In the event Landlord shall neglect or fail to perform observe any of the covenants, provisions or conditions contai in this Lease on its part to be performed or observed wit thirty (30) days after written notice of default (or if more t thirty (30) days shal 1 be required because of the nature of default, if Landlord shall fail to proceed diligently to c such default after notice), then in that event Landlord shall responsible to Tenant for any and all damages sustained by Ten as a result of Landlord's breach; further, after such not Tenant shall have the right to cure any such default Landl ord's expense i ncl uding in such expenditure a1 1 costs attorneys' fees incurred to cure such default or breach of Lea tenant shall have no right to terminate this Lease except herein otherwise specifical ly provided. Should Tenant g' written notice to the Landlord to correct the defaul t Landlord, Tenant will give similar notice to the holder of mortgage or deed of trust of Landlord, or the lessor of a gro lease with Landl ord, and prior to any Lease cancel 1 ation, s holder of the first mortgage or deed of trust, and for less 25 0 shall be given a reasonable period of time to correct or rem( such default. If and when such holder of the first mortgage deed of trust and/or lessor has made performance on behal f Landlord, the default of Landlord shall be deemed cured. Tent shall have no right to terminate this Lease, except as express1 provided herein. Article 23 EMINENT DOMAIN A. In the event the entire premises shall be approprial or taken under the power of eminent domain by any public quasi-pub1 ic authority, this Lease shal 1 terminate and expire of the date of such taking, and Tenant shall thereupon released from any liability thereafter accruing hereunder. B. In the event more than twenty-five (25%) of the squi footage of F1 oor Area of the premises is taken under the power eminent domain by any public or quasi-public authority, or if reason of any appropriation or taking, regardless of the amol so taken, the remainder of the premises is not one undivii parcel of property, either Landlord or Tenant shall have ' right to terminate this Lease as of the date Tenant is requii to vacate a portion of the premises upon giving notice in writ of such election within thirty (30) days after receipt by Ten from landlord of written notice that said premises have been appropriated or taken. In the event of such termination, bi Landlord and Tenant shall thereupon be released from l 1 iabil ity thereafter accruing hereunder. Land1 ord agrl immediately after learning of any appropriation or taking to g to Tenant notice in writing thereof. C. If this Lease is not so terminated as sei forth abo Tenant shall remain in that portion of the premises which shi nct have been appropriated or taken, and Landlord agrees, Landlord's cost and expense, to as soon as reasonably possit restore the premises on the land remaining to a complete unit like quality and character as existed prior to such appropriat or taking (except that the premises wil 1 be reduced in size affected by the condemnation); and thereafter the minimum ann rental provided for in Article 1 hereof shall be reduced on equitable basis, taking into account the relative value of portion taken as compared to the portion remaining. 0. Landlord shal 1 be entitled to the entire award compensation in such proceedings, but the rent and other char for the last month of Tenant's occupancy shall be prorated Landlord agrees to refund to Tenant any rent or other char paid in advance. Tenant's right to receive compensation damages for its fixtures and personal property shall not affected in any manner hereby. Tenant shall be entitled pursue any remedy it may have against the condemning author for a "displaced person" pursuant to Cal ifornia Government C Section 7262 or for loss of business goodwil 1 pursuant 26 a California Code of Civil Procedure Section 1263.510. E. For the purposes of this Articl e 25, a vol untary s or conveyance in lieu of condemnation, but under the threat condemnation, shal 1 be deemed an appropriation or taking un the power of eminent domain. Article 24 ATTORNEY'S FEES 0 In the event that at any time during the term of this Le either Landlord or Tenant shall institute any action proceeding against the other relating to the provisions of 1 lease, or any default hereunder, then, and in that event, t unsuccessful party in such action or proceeding agrees reimburse the successful party for the reasonable expenses attorney's fees and di sbursements incurred- therein by successful party. Further, in the event Landlord is made party to any 1 itigation by reason of the use or occupancy of t premises by Tenant or Tenant's employees, agents or guest without fault by Landlord, Tenant shal 1 reimburse Landlord f all of Landlord's attorneys fees and costs of litigati i ncurred therein. Article 25 SALE OF PREMISES BY LANDLORD In the event of any sale or exchange of the premises Landlord and assignment by Landlord of this Lease, Landlord sh be and is hereby entirely freed and re7 ieved of a1 1 liabil under any and all of its covenants and obligations contained or derived from this lease arising out of any act, occurrence omission relating to the premises or this Lease occurring af the consummation of such sal e or exchange and assignment. Article 26 SUBORDINATION, ATTORNMENT 0 A. Upon written request of Landlord, or any fir mortgagee or beneficiary of a first deed of trust of Landlo Tenant wil 1 in writing subordinate its rights hereunder to 1 interest of any ground lessor of the land upon which the premi are situated, as well as to the lien of any first mortgage first deed of trust, now or hereafter in force against the li and building of which the premises are a part, and to a advances made or hereafter to be made upon the security there Notwithstanding the foregoing, in the event any proceedings i brought for foreclosure, or in the event of the exercise of t power of sale under any mortgage or deed of trust made Landlord covering the premises, Tenant shall at the request any purchaser at any such sale attorn to the purchaser a recognize such purchaser as the Land1 ord under this Lease. 27 e 8. Within ten (1 0) days after written request therefore Landlord, or in the event that upon any sale, assignment hypothecation of the premises or the 1 and thereunder by Landl oi an offset statement shall be required from Tenant, Tenant agrc to deliver in recordable form a certificate addressed to any si proposed mortgagee or purchaser or to the Landlord certifyi that this Lease is in full force and effect (if such be t case), there are no defenses or offsets thereto or st-ating thc claimed by Tenant, and setting forth such other matters reasonably requested by Landl ord or such proposed mortgagee purchaser, including but not limited to those items set forth Exhi bi t ''E" hereto. rl) C. Upon Landlord's request, Tenant shal 1 modify this Le; in accordance with the requirements of a mortgagee or beneficit of a first deed of trust of Landlord provided such modificati does not (i) increase the net rent or additional rent, (ii a1 ter the term of any renewal term or (iii) materially adverse affect Tenant's leasehold estate or (iv) change, alter preclude Tenant's continued uses, uti1 ization and operations the premises, the right to such use being expressly granted Tenant as set forth in this Lease. 0. The lessor under any ground lease for the la underlying the premises shal 1 be a third party beneficiary this Lease, with a right to enforce premises shall be a thi party beneficiary of this Lease, with a right to enforce th Lease against Tenant. If at any time said lessor shal 1 acqui the rights of Landlord under this Lease, "Tenant shall attorn said lessor or its nominee as Landlord under this Lease. Article 27 QUIET POSSESSION a Landlord agrees that Tenant upon paying the rent a performing the covenants and conditions of this Lease may quiet have, hold and enjoy the premises during the term hereof or a extension thereof. Article 28 LANDLORD'S RIGHT OF ENTRY Tenant agrees to permit Landlord and its authoriz representatives to enter the premises at all times during usu business hours for the purpose of inspecting the same. Tena further covenants and agrees that Landlord may go upon t premises and make any necessary repairs to the premises a perform any work therein which may be necessary to comply wi any laws, ordinances, rules or regulations of any pub1 authority or of the Insurance Services Office or of any simil body or that Landlord may deem necessary to prevent waste deterioration in connection with the premises if the Tenant do not make or cause such repairs to be made or performed or cau 28 e such work to be performed promptly after receipt of written demand from Landlord. Nothing herein contained shall imply any duty on the part of Landlord to do any such work which under any provision of this Lease Tenant may be required to do, nor shall -, constitute for the faithful performance by Tenant of all of c ne terms of this Lease by said Tenant to be observed and performed. The security deposit shal 1 not be mortgaged, assigned, transferred or encumbered by Tenant without the written consent of Landlord and any such act on the part of Tenant shall be without force and effect and shall not be binding upon Landl ord. 6. If any of the rents herein reserved or any other sum payable by Tenant to Landlord shall be overdue and unpaid or should Landlord make payments on behalf of the Tenant, or Tenant shall fail to perform any of the terms of this Lease, then Landlord may, at its option and without prejudice to any other remedy which Landl ord may have on account thereof, appropriate and apply said entire deposit or so much thereof as may be necessary to compensate Landlord toward the payment of rent or additional rent or loss or damage sustained by Landlord due to such breach on the part of Tenant; and Tenant shall forthwith upon demand restore said security to the original sum deposited. Shoul d Tenant comply with a1 1 of said terms and promptly pay a1 1 of the rentals as they fall due and all other sums payable by Tenant to Landlord, said deposit shal 1 be returned in ful 1 to Tenant at the end of the term. C. In the event of bankruptcy or other debtor-creditor .roceedings agai nst Tenant, such security deposit shal 1 be deemed ,o be applied first to the payment of rent and other charges due D. Landlord may deliver the funds deposited hereunder by Tenant to the purchaser of Landlord's interest in the premises in the event that such interest be sold and thereupon Landl ord shal 1 be discharged from any further liability with respect to such deposit, and this provision shal 1 a? so apply to any subsequent transferees. ARTICLE 29 MISCELLANEOUS .Landlord for all periods prior to filing of such proceedings. A. It is agreed that nothing obtained in this Lease shall be deemed or construed as creating a partnership or joint venture between Landl ord and Tenant or between Landl ord and any other party, or cause Landlord to be responsible in any way for the debts or obligations of Tenant, or any other party. B. It is agreed that if any provision of this Lease shall be determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision of this Lease and all such other provisions shall remain in full force and effect; and it is the intenticn of the parties hereto 29 e that if any provision of this Lease is capable of constructions, one of which would render the provision void the other of which would render the provisions Val id, then provision shall have the meaning which renders it valid. C. In the event Tenant hereunder shall be a corporation, parties executing this Lease on behalf of tenant hereby conven and warrant that tenant is a duly qualified corporation and l steps have been taken prior to the date hereof to qualify Ten to do business in the State where the building is situated; i franchise and corporate taxes have been paid to date; and i future forms, reports fees and other documents necessary comply with appl icabl e 1 aws wi 11 be filed when due. D. It is understood that there are no oral agreeme between the parties hereto affecting this Lease , and this Le supersedes and cancels any and all previous negotiatia arrangements, brochures, agreements and understandings, if i between the parties hereto or displayed by Landlord to Ten with respect to the subject matter thereof, and none ther shall be used to interpret or construe this Lease. E. Landlord reserves the absolute right to effect s other tenancies in the buil ding as Landl ord, in the exercisc its sole business judgment, shall determine to best promote interest of the building. Tenant does not rely on the fact, does Landlord represent, that any specific tenant or number tenants shal 7 during the term of this Lease occupy any space the building. This Lease is and shall be considered to be only agreement between the parties hereto and th 0 representative and agents. A1 1 negotiations and oral agreeme acceptable to both parties have been merge into and are incli hgrein. There are no other representatives or warranties bet) ths parties and a1 1 re1 iance with respect to representation: solely upon the representations and agreements obtained in ' document. F. The laws of the State where the building is situa shall govern the validity, performance and enforcements of i Lease. A1 though the printed provisions of this Lease were dl by Landlord, this lease shall not be construed either for against Landlord or Tenant, but this Lease shall be interprc in accordance with the general tenor of the language in an efi to reach and equitable resul t. G. A waiver of any breach or default shall not be a wai of any other breach or default. Landlord's consent to, approval of, any act by Tenant requiring Landl ord's consen- approval shall not be deemed to waive or render unneces! Landlord's consent to or approval of any subsequent similar by tenant. H. Any prevention, delay or stoppage due to str- lockouts, labor disputes, acts of God, inability to obtain 1 or material s or reasonabl e substitutes therefor, governmer a 0 30 . restrictions, governmental action, civil commotion, fire or 0th casualty, and other causes beyond the reasonable control of t party obligated to perform, shall excuse the performance by su party for a period equal to any such prevention, delay stoppage, except the ob1 igations imposed with regard to rent and other charges to be paid by Tenant pursuant to this Lease. I. Tenant hereby expressly waives any and all right redemption granted by or under any present or future laws in t event of Tenant being evicted or dispossessed for any cause, in the event of Landlord obtaining possession of the premises reason of the viol ation by Tenant of any of the covenants a conditions of this Lease or otherwise. The rights given Landlord herein are in addition to any rights that may be giv to Landlord by any stature or otherwise. J. The voluntary or other surrender or termination of tl Lease by Tenant, or the acquisition by Landlord of Tenan rights under this Lease, shal 1 not work a merger wi tho Landlord's express written agreement to such a merger; and Landlord's option, any such events shal 1 operate as an assignmc to Landl ord of any and a1 1 subleases or subtenancies of Tena for the premises. K. If Tenant remains in possession of the premises or a part thereof after the expiration of the term hereof, su occupancy shal 1 be tenancy from month to month at a rental in t amount, unless otherwise expressly specifies in writing Landlord, equal to 150% of the rent for the last month of t term of this Lease, pl us a1 1 other charges payable hereunder, 2 upon all terms hereof applicable to a month to month tenancy. L. Time is of the essence in the performance of obligati( under this Lease. Article 30 "FORCE MAJEURE" In the event a delay arising from "force majeure'' should aff( Landl ord's ob1 igation to construct the premises, Landl ord shi be granted a reasonable extension of time beyond the agreed u completion date to remedy the problem and complete construct of the premises. CONTINGENCIES The final consummation and commencement of this lease contingent upon the following: 1. Landl ord's abi 1 i ty to obtai n construction f i nanc equal to 75% of the project cost from an institutional lender "market rate" interest rates. Landl ord shal 1 notify tenant writing within 90 days of the execution of this lease landlords ability or inability to obtain such financing. It 0 a 31 . anticipated that First Interstate Bank wil 1 be the construct lender for this project. Tenant agrees to cooperate fully w First Interstate Bank providing financial information on ten and other information that might be required by First Interst a Bank for the obtaining for the construction financing. 2. Plans and Specifications - Preliminary plans for building and the site plan for the location of the build within the Educational park are attached to this lease approved by both landlord and tenant. Within 45 days from execution of this lease landlord shall provide tenant detai plans, schematics and specifications which wil 1 identify describe in more detail this building. These prelimin drawings shall be subject to the approval of tenant in writ within 14 days after date of receipt thereof. Subsequent to t approval landlord shall prepare the final plans ( specifications for submittal to the Carl sbad Building Departme These final plans and specifications shall also be approved disapproved by tenant within 14 days of date or receipt there Landlord shall pay all costs of preparing plans l specifications. Once final plans are approved by Land1 ord Tenant, the Landlord's architect shal 1 calculate actual squ footage to be utilized by Tenant by using BOMA full-build approved standards. This square footage shall be used calculating rental described in Article 5 hereof. The ex square footage shall be approved by Tenant. IN MITNESS WHEREOF, the Landlord and Tenant have duly execu this Lease on the day and year first above written. If Tenant shall be a corporation, the authorized officers must sign on behalf of the corporation. The Lease must be executed by the LANDLORD president or vice-president and the secretary or assistant secretary, unless the by-laws or a resolution of the board of directors shall otherwise provide, in which event, By : the by-laws or a certified copy of the resolution, as the case may be, By : must be furnished. Also, the appropriate corporate seal must be affixed. 0 B)' e EXHIBIT - B a FOUNDATION FOR THE PRIVATE SECTOR DESCRIPTION - OF PREMISES That certain space in Batiquitos Lagoon Educational Park, locat in the City of Carlsbad, County of San Diego, State of Califorr containing approximately 3,000 square feet of floor area. USE OF PREMISES -- Tenant may use the premises only for educational operatio These operations may i ncl ude undergraduate and gradu; institutions; offices for admissions placement, registrati facul ty and accounting; conference rooms, cl assroor laboratories, libraries, and auditoriums; student servic including commons, bookstore, and cafeteria. a EXH IB IT "C" DESCRIPTION - OF LANDLORD'S -- WORK AND TENANT'S __. WORK 0 1. LANDLORD'S WORK Landl ord shal 1 construct the 1 eased premises at Landl ord sole cost and expense to the extent shown below: a) concrete slab floor and insulated roof b) front and rear walls as per Landlord's plans * c) doors as per Landlords's plans * d) sewer and water stubbed to the tenant's leased premises e) electric service and telephone to the building f) heating and air conditioning mechanical equipment uni g) paving and lighting as per Landlord's plans h) exterior building shell exterior walls i) one basic washroom equipped with toilet, grab bar, sir placed on roofs mirror, light, exhaust fan, ceiling, and walls o 2. TENANT'S WORK Tenant wil 1 be given $20.00 per square foot tena improvement allowance. If entire allowance is not use Tenant may apply the unused portion to offset rent payments. Tenant, at Tenant's sole cost and expense shall responsible for the cost of the fol lowing and any work r specifically set forth under Landlord's work: j) a17 signs k) trade fixtures 1 ) distribution of heati ng and ai r-condi tioni ng m) all electric wiring, outlets, lighting, switches, z n) suspended ceiling o 1 spri nkl er heads and i ns tal 1 ati on p) utility meters and installation ci rcui t breakers a * q) all interior partitioning, locks, hardware, and paint r) one half the cost of interior demising walls betw s) floor coverings and paint a tenants A1 1 Tenant's work wil 1 be performed by Landlord as genei contractor at its' costs plus 15% for overhead and profit. LANDLORD'S INITIALS fl TENANTS INITIALS f+ & a 0 EXHIBIT "0" e GUARANTEE OF LEASE WHEREAS, a certain Lease of even date herewith has been, will be, executed by and between Batiquitos Bluff, therein a herein referred to as "Landlord", and the Foundation for t Private Sector therein referred to as "Tenant", covering certa premises in the City of Carlsbad, County of San Diego, State California; and WHEREAS, Landlord under said Lease requires as a conditio) its execution of said Lease that the undersigned guarantee ful 1 performance of the ob1 igations of Tenant under said Le; and WHEREAS, the undersigned is desirous that Landl ord ent into said Lease with Tenant, NOW, THEREFORE, in consideration of the execution of s; Lease by Landl ord, the undersigned hereby unconditional guarantees the ful 1 performance of each and a1 1 of the terr covenants and conditions of said Lease to be kept and perforn by Tenant, incl uding the payment of a1 1 rental s and other char! to accrue thereunder. The undersigned further agrees as folloi 1. This Guarantee shal 1 continue in favor of Landl c notwithstanding any extension, modification, or a1 teration said Lease entered into by and between the parties thereto, their successors or assigns, or notwithstanding any assignment said Lease, with or without the consent of said Landlord, and extension, modification, a1 teration or assignment of said Le shal 1 in any manner re1 ease or discharge the undersigned and undersigned does hereby consent thereto. 2. This Guarantee wil 1 continue unchanged by any bankrup reorganization or insol vency of Tenant or any successor assignee thereof or by any di saff i rmance or abandonment b: trustee of Tenant. 3. Landl ord may, without notice assign this Guarantee whole or in part and no assignment or transfer of said Le shal 1 operate to extinguish or diminish the 1 iabil i ty of t undersigned hereunder. 4. The 1 iabil i ty of the undersigned under this Guara shall be primary; and in any right of action which shall acc to Landlord under said Lease, Landlord may, at its option, pro against the undersigned without having commenced any action, having obtained any judgment against Tenant. 0 a Ex hi bi t "D" Page 2 e 5. The undersigned shall pay Landlord's reason attorneys' fees and all costs and other expenses incurred i. col lection or attempted col 1 ection or in any negotiations re1 d to the ob1 igations hereby guaranteed or enforcing this Guaran 6. The undersigned does hereby waive notice of any den by Landlord, as well as any notice of defaul t in the paymen rent or any other amounts contained or reserved in said tease 7. The use of the singular herein shall include the pl The obligation of two or more parties shall be joint and sev The terms and provisions of this Guarantee shall be binding and inure to the benefit of the respective successors and as of the parties herein named. IN WITNESS WHEREOF, the undersigned has caused this Guar to be executed as of the date set forth on page 1 of this Le; If Guarantor shall be a --I_ corporation, the authorized officers must sign on behalf of the corporation. This Guarantee must be executed by the president or vice-president and the secretary or assistant Address: secretary, unless the by-l aws or a resol ution of the board of directors shal 7 otherwise provide, in which event, the by-laws or a certified copy of the resolution, as the case may be, must be furnished. Also, the appropriate corporafion seal must be affixed. a a . EXHIBIT ''E" e TENANT'S ESTOPPEL CERTIFICATE Date: Attenti on: Re: The undersigned, as Tenant under that certain Lease (t "Lease") for the above referenced premises (the "Premises") dat Y 19 y made with Batiquitos Bluff Land1 ord, hereby ceFtifies that: a. All work to the Premises has been completed and the and the Premises are accepted as satisfactory; b. Tenant is in ful 1 and complete possession of the Premi and is fully occupying the same and conducting its busin therefrom; c. Rent under the Lease commenced to accrue s 19 , and has been paid through the date Y 19- y and no rent credits or other offsc have been given by Landlord or taken by Tenant; e d. The current rent due under the Lease is equal e. The Lease is in ful 1 force and effect and has not f amended, modified or suspended other than by amendments di - 3 19 -- , and the present term of the LC f. Tenant has not advanced any amounts to or on behall Dollars ($ ) per month; expi res Y 19 3 Landlord under the Lease, for which advance it has not reimbursed; off against accruing rental s; nor has Tenant assigned the Lease or any portion thereof; and g. Tenant holds no claim against Landlord which might be h. Tenant has not sublet the Premises or any portion the 0 4 * b Exhibit E Page 2 e j. Tenant understands that 1 will materially rely on the statements made herein. 1 undersigned acknowl edges and agrees that the statements mi herein are true and complete and may be relied upon and its successors and assigns. (Attach Notary Acknowledgment) e e 1. * EXHIBIT F e OPTION TO EXTEND TERM OPTION TO EXTEND LEASE. A. Tenant is hereby granted successive options to extenc term of this Lease, on a1 1 of the provisions contained here for 2 periods of 5 years each (each such period hereinaf referred to as "extended term") fol 1 owing the expiration of initial term or of the immediately preceding extended term the case may be. Each such option is to be exercised by giv written notice of exercise of the option exercised ("Opt Notice") to Landlord at least six months, but not more than year, before the expiration of the initial term or of immediately preceding extended term, as the case may provided, however, that in any of the following events, extended term shal 1 not commence and this Lease shal 1 expire the end of the initial term or at the end of the immediat prsceding extended term, as the case may be: (i) if Tenant i default on the date of giving the Option Notice, the Op Notice shall be totally ineffective; (ii) if Tenant i: d2faul t on the date the respective extended term is to comme (iii] if any assignee or sublessee other than a successoi Tenant as defined in Section 18.8. is in possession of premises on the date of giving the Option Notice, the Op' Notice shall be totally ineffective; or (iv) if any assigne sublessee other than a successor of Tenant as defined in Sec 18.8. is in possession of the premise on the date the respec extended term is to commence. Tenant shall have not other r to extend the term of this Lease. B. The Amount of the Base Monthly Rental for each exte term shall be the greater of (i) the amount of Base Mon Rental for the year immediately preceding the commencement 0; respective extended term, adjusted as of the commencement of extended term and adjusted annual ly during the extended ter reflect change in the cost of living as is set forth in Sec 8, or (ii) the then prevailing rate of Base Monthly Rental t charged by Landlord as of the commencement of the respec extended term for comparable space in the immediate vicini1 which the premises are a part, which Base Monthly rental s thereafter be adjusted annually to reflect change in the co living as is set forth in Section 8. 0 e OPERATIONS AGREEMENT FOR THE NEW SCHOOL OF ARCHITECTURE 0 This agreement is made this 3rd day of November, 1986, t the New School of Architecture (NSA), a non-profit col 1 ege, Sammi s Properti es (Sammi s) a Cal i forni a Corporati on who agree follows: 1. RECITALS: a. Sammis is developing a project in the City Carlsbad known as the Batiquitos Lagoon Educational Park. Onc the primary components is the educational complex comprise( several individual educational enti ties which are separate distinct entities governed by their own governing board trustees and administered by officers named by their board. b. NSA is a non-profit professional college offer professional education in architecture 1 eading to a bachelor architecture degree upon successful compl etion of the coursc study. operations to the Batiquitos Campus. has discussed this proposal and has agreed to make this move. c. Sammis has requested that NSA relocate The NSA Board of Trust a NOW, THEREFORE, in consideration of the mutual coven; contained herein and incorporated in the recitals set forth at the parties agree as follows: 1. Sammis agrees to construct a 70,000 square foot builc at the Batiquitos Campus. Sammis will provide 17,000 square . in a separate wing of this building for use by NSA. This builc will be designed with the consultation and approval of NSA. terms for the occupancy by NSA of this bui 1 ding are describe( that certain lease agreement, a copy of which is attached. parties understand that the lease must be signed by the Chaii of NSA Board of Trustees, Mr. Gary Hardke, who is presently ( on business and is unable to sign the lease at this time. e 0 2. NSA agrees to operate an architecture school which wi be independent and total ly autonomous from the other educatior entities located at the Batiquitos Complex. NSA will be free exercise a1 1 academic powers and responsi bi 1 i ty re1 ated to operations. NSA's operations wil 1 incl ude approximately faculty members and 120 students with the expectation that enrollment will increase to 200 over the next 5 years. 3. NSA agrees to participate in the governance of Batiquitos Campus, a summary of which is attached, participating on the advisory council. The participation by in the governance includes but is not limited to participation the advisory council. NSA further agrees to participate interdisciplinary programs by making its curriculum available students from other colleges, and where appropriate, to encour its students to take advantage of classes and programs offered other col 1 eges. 4, This agreement may not be assigned. 5. The parties understand that this 17,000 square f building has not yet been approved by the City of Carlsbad that this agreement is conditioned upon the construction of bui 1 di ng. In witness whereof, the parties hereto have executed t agreement on the day and year first above written. SAMMIS PROPERTIES NEW SCHOOL OF ARCHITECTURE BY: W&Y: Do nTdF.S mm i s -- -&A fi?%: r d d442L- P . -'eTs3-- President President Ssmmis Properties New School of Architec a a- a BATIQUITOS Q3RPOREiTICN GOVERiVANCE OCTOBER 28, 1986 OWERSIIIP OF LAND The land at Batiquitos will be owned by a corporation knoi the Batiquitos Corporation. It will be governed by a chai aEd a Board of Trustees. FEEERZL CaST ITmI ON The Board will create a Federal constitution under w individual educational enti ties will retain their self-gove au tho r i t y . The Batiquitos Corporation wi 11 *point a president to ac liaison between the Batiqui tos Corpratim. and the self-gove educational enti ti es. ADV I so RY couw r L a T:?e President shall convene an Advisory Council composed representative from each of the approved educational enti resident at the Batiquitos site, the President, and an appo of the Mayor of Carlsbad. The Advisory Council will me€ regular intervals and address issues relating to the ove administration of the educational enterprise, relations be enti ties, provision of services, and wi 11 make recoinmendatia the Batiqui tos Curgoration Board regardinc; enti ties operatir comtenplating operation. INDIVIWAL EDUCATIONAL ESTITIES Each of the individual educational entities will be separ( incorporated, governed by a Board of Trustees of its own, administered by officers named by its own Board. The individual educational enti ties will exercise all acz and administrative powers and responsibilities relating to operations. 0 8P.T IQUITGS CO WOW ION GOVERXANCE Page 2 TERivIINAT ICN OF RELRT ICN S WIT H EDUCAT ICNAL ENT IT IES Ternination of relations with any of the individual educatior entities operating at Batiquitcis will occur as a result of a ttr thirds vote of the Board of the Batiquitos Corporatic contingent on prior lease agreements. e 0 e G BATIQUITOS LAGOON EDUCATIONAL PARK In consideration of the rents and covenants hereinafte forth, Landlord hereby leases to Tenant, and Tenant hereby from Landlord, the fol lowing described premises up0 fol lowi ng terms and condi ti ons: Article 1 FUGDAMENTAL LEASE PROVISIONS: A. Date: B. Landlord: Batiquitos Bluff, a California Lirrtited Partn C. Tenant: New School of Architecture. D. Tenant's (Article 7 Trade Name: New School of Architecture Exhibit "6" E. PreRises: (Article 3 Exhibit "6 Approximately 17,000 square feet of space in the Buildin Batiquitos Lagoon Education Park building located at k'indrose Circle, Carl sbad, Calif. e F. Lease Tern: Ten years (10 years) (Article 4 G. Commencement of Term: (Article 4) Premises are leased subject to completion of wo Landlord, with term commencing upon such completion o Tenant opens for business, whichever occurs earlier. H. MininumAnnual Rental : $306,000 (Article 5A) Dol lars p annum, payable in twelve '(12) equal monthly instal lnents each year, subject to rental adjustment every 1 year of the term, with 1987 as the base year. Rent is $1.50 per square per month, triple net. I. Cost of Living Adjustment: C.P.I. annually 6% max. J. Rental Deposit: N.A. ( Ar ti cl e K. Percentage Rental: N.A. percent( %) (Article L. Address for Notices: a r 0 _. L. To Landlord: c/o Uatiquitos Bluff 2650 Camino del Rio Horth, Suite i30 San Diego, CA 92108 M. TG Tenant: To the premises and New School of Archite 2252 Main Street Suite 1 Chula Vista, CA 92011 a N. Security Dep0sit:N.A. (Article 33) Oollars ($ N.A.). - References in this Article 1 to other articles ar convenience and designate some of ihe other Articles references to the particular Fundamental Lease Provisions a Each reference in this Lease to any of the Fundamental Provisions contained in tnis Article 1 shal 1 be construc: incorporate all of the terns provided under each such Fundan Lease Provision. In the event of any conflict Sctivee Fundamental Lease Provision and the balance of the Lease 1 atter shall control. Article 2 EXHIBITS The following drawings and special provisions are at1 hereto as exhibits and made a part of this Lease: EXHIBIT "A" - Ger;eral site plan of an integrated bui which Landlord and others intend to construct or cause constructed on real property located in the City, Count State described in Exhibit "B" and more particularly sho Exhibit "A", hereinafter referred to as the "Bui 1 ding". site plan shows, among other things, the principal improvc which wi 11 comprise said Bui 1 ding. Tenant acknowl edges th; site pi an shown on Exhibit ''A" is tentative and that Land1 or change the shape, size, location, number and extent o improvements shown thereon and eliminate or add any improve to any portion of the Building, provided that Landlord shal change the size or location of the premises without Ter consent. EXHIBIT "B" - Description of the premises, authorize EXHIBIT 'IC" - Description of work to be perform EXHIBIT I'D" - Guarantee of Lease. EXHIBIT "E" - Tenant's Estoppel Certificate e and Tenant's trade name. Landlord and by Tenant in or on the premises. e 2 EXXIBIT "G" - Option to Extend Term Uticle 3 PREP1 I SE S Landlord hereby leases and demises unto Tenant and T hereby leases and takes from Landlord, for the term, a rental, and upon the covenants and conditions hereinafte forth, the commercial space referred to herein as the "prem and described on Exhibit "B" attached hereto and made a hereof. The premises shall be constructed in acardance wit procedures outlined in Exhibit "C" attached hereto and m part hereof. Article 4 TERM A. The term of this Lease shall begin as of the specified in Article 1 hereof, and shall continue there during the Lease Term specified in Article 1 hereof, u sooner temi nat ed as herei naf ter provided in this Lease. B. If the premises are leased subject to completion of by Landlord, Landlord agrees to deliver to Tenant, and T agrees to accept from Landlord, possession of the pre forthwith upon substantial completion of the prernis described in Exhibit "C" hereof. The term "substar completion of the premises" is defined as the date Lan notifies Tenant that the premises are substantially conple the extent of Landlord's Work as speci fied in Exhibit "C", t point wherein Tenant's contractor may commance the cmstrr of Tenant's Work, if any, as specified in ExhiSit Certi fication by Landlord's architect ("Project Architecl the substantial completion of the premises in accordance said Exhibit "C" shall be conclusive znd binding upon the p2 hereto. Temnt shall comence the construction of TeEnt's if any, as described in Exhibit "C" hereof promptly substantial completion and shall open the premises for bus upon such completion. In the event the term of this Leas not commenced within three (3) years from the date hereof, this Lease shall terminate as of said date and each o parties hereto shall be released from any further oblig hereunder. e 0 C. Within ten (10) days after Tenant opens for busi Tenant will execute and deliver to Landlord a certif substantially in the form attached hereto, marked Exhibit "I made a part hereof, indicating thereon any exceptions th which may exist at that time. Failure of Tenant to execut deliver such cer ti ficate shall constitute an acceptance o premises and acknowledgment by Tenant that the state included in Exhibit "E" are true and correct, without excep To the extent Tenant has possession or occupancy of any PO 3 0 of the premises prior to the comnencenent of the ten of Lease, for any reason whatsoever (e.g., for Tenant to in: tenant fixtures or improvements), all obligations mder Lease (particularly the obligation to maintain liabi insurance) shall commence as of the date of such possessi occupancy, excepting only the obligation to pay minimum a rent shall not commence. 0 D. To the extent Tenant has possession or occupancy e portion of the premises prior to the commencement of the te this Lease, for any reason whatsoever (e.g., for Tena install temnt fixtures or improvements), all obligations this Lease (particularly the obligation to maintain liab insurance) shall commence as of the date of such possessi occupancy, excepting only the obligation to pay minimum a1 rent shall not commence. Article 5 RENTAL AND TAXES The Tenant agrees to pay as rental for the use and occu of the premises, at the times and in the manner herein providd, the following sum of money: A. MINIMUM AhTNUAL REYTFL. The minimum rental specifi Artic1.e 1 here shall be payable in twelve (12) equal mo installments during each year, in advance, on the first c each calendar month without setoff or deduction wit commencement of the term of this Lease. Should the rental 1 commence on a day of the month other than the first day 01 nonth, t3en the rental for the first fractional month sha computet! on a daily basis for the period from the da cornsencement to the end of such calendar month and at an a equal to one-three hundred sixtieth (1/360) of the said mi anrual rental for each such day, and thereafter shall be c01 and _wid as aforesaid. With the execution of this Lease, is paying to Landlord a rental Deposit, as defined in Arti cls an advance on the first to become due minimum annual rer the end of each 12 month period of this Lease, the minimum i rental shall be increased by a percenta9 equal to the perc increase from the base period of the Consumer Price Index fc Urban Consumers, all items, California, published by the of Labor Statistics, U.S. Department of Labor. Said Indc the calendar year designated in Article lH, shall be ans the "base period." In no event shall said minimum annual be less than the sum then in effect for the preceding 12 period. If any time there shall not exist said Consumer Index, the parties shall substitute any official index pub by the Bureau of Labor Statistics, or successor or s. government agency, as may then be in existence and shall k nearly equivalent thereto. If the parties shall be una' agree upon a successor index, the parties shall refer the of a successor irdex to arbitration in accordance with the of the American Arbitration Association. It is the int e 4 e t;iis provision that the foregoing rental adjustment proce shall occur effective as of the first day of the month of ea month period during this Lease term. B. TAXES (1) Throughout the term of this Lease, Tenant agre pay to Landlord, as additional rent, the amount of taxer assessments levied and assessed for any such year upor premises and the underlying realty. Such additional rent fo partial year of the term hereof shall be prorated on a basis. Payment shall be made by Tenant within thirty (30) after receipt of a written statement from Landlord setting the amount of such tax. 0 (2) The term "Floor Area", as used throughout this : shall be deemed to mean and include all areas for the excl use and occupancy by tenants or subtenants of Landlord, mea frorn the exterior surface of exterior walls (and fron extensions thereof, in the case of openings) and from the c of interior demising partitions, including mezzan: warehousing or storage areas, clerical or office area einployee areas. (3) In the event the premises and underlying realt not separately assessed but are part of a larger parce assessment purposes (hereinafter referred to as the "1 parcel"), "taxes and assessments levied and assessed up0 premises and the underlying realty" shall mean a fract portion of said taxes and assessments on the larger p (excluding taxes and assessnents cn any common areas therecn numerator of which shall be the Floor Area of the premisc denominator of which shall be the Floor Area of all the available for exclusive use and occupancy by tenants o larger parcel, whether or not actually occupied and open fc business, provided that na equitable adjustment shall be ma buildings which are only partially completed on the date taxes and assessments become a lien. With respect ti assessments which may be levied against or upon the prenisc the underlying realty, or which unrler the laws then enfor( be evidenced by improvement or other bonds, or may be pa annual installments, only the amount of such annual instal: (with appropriate proration for any partial year) and sk& interest shall be included within the computation of the z taxes and assessments levied against the premises ar underlying realty. the United States Government, State, County, or City c political subdivision thereof in which the premises are sit a tax or excise on rent or any other tax however descril levied or assessed by any such political body, aqinst La on account of rentals payable to landlord hereunder, such excise shall be considered "taxes" for the proposes o Article SB, excluding, however, from such tax or excis 0 (4) If at any time during the Lease Term under the 1 5 0 general income taxes, gift taxes, inheritance taxes and e taxes. The term "taxes" shall also include possessory int taxes levied in lieu of real property taxes. Article 6 TIMING OF OCCWANCY e The schedule for completion of the facilities is as follows: 1. Execution of lease November 1, 1986. 2. Completion of detailed preliminary plans 1986. speci fications - December 15, 3. 4. Commencement of anstruction - February 15, 1987. 5. Completion of final plans and specifications - Janc 1987. Completion of premises and occupancy - SeptemSer 1987. ARTICLE 7 POSSESSICN AND USE A. Possession of the premises shall be delivered to : free and clear of all tenants and occupants and the rig either, and also free of liens and encumbrances, except tho5 may be specified in Article 10 hereof. Tenant shall u premises solely for the purposes and under the trade speci fied in Exhibit "B" attached hereto. Tenant shall nc or pe-rmit the premises to be uszd for any other pclrpo purposes or under any other trade name whatsoever withou written consent of Landlord first had and obtained. not, without the prior consent of Landlord, sell nerchandisc vending machines or allow any coin operated vending or cj machines on the premises. During said term the premises, every part thereof, shall be kept by Tenant in a clea wholesome condition, free of any objectiomble noises, odc nuisances, and that all health and police regulations shz all respects and at all tines, be fully complied with by Tei B. Tenant shall use its best efforts to ampleted, 01 to be completed, all deliveries, loading, unloading and sc to the premises prior to 1O:OO A.M. of each day. attempt to cause no delivery trucks or other vehicles ser'. the premises to prk or stand in front of, or at the rear oj premises from 1O:OO A.M. to 9:00 P.M. of each &y. The Lan reserves the right to further regulate the activities c Temnt in regard to deliveries and servicing of the premise: Tenant agrees to abide by such further non-discrimin regulations of Landlord. a 6 e Tenant Tenant .. -_. - C. Tenant shall not do or permit anything to be done about the premises nor bring or keep anything therein whic not within the permitted use of the prenises which wi 11 ir my increase the existing rate of or affect any fire or o insurance upon the premises or any of its contents, or caL cancellation of any insurance policy covering the building 01 part thereof of any of its contents. Tenant shall not d permit anything to be done in or about the premises which wil any way obstruct or interfere with the rights of other tenant occupants injure or annoy them or use or allow the premises used for any improper, immoral, unlawful or objection purpose: nor shall Temnt cause, maintain or permit any nuiz in, on or about thepremises. Tenant shall not commit or a to be comitted any waste in or upon the premises. Temnt s not use the premises, or perinits anything to be done in or z the premises, which will in any my conflict with any statute, ordinance or governmental rule or regulation nc force or which may hereafter be enacted or promulgated. Te shall, at its sole cost and expense, promptly comply with laws, stzitutes, ordimnces and governmental rules, regulatioi requirements now in force or which may hereafter be in forcf with the requirements of any board of fire underwriters or ( similar bodies now or hereafter constituted relating t affecting the conditions, use or occupancy of the prem: excluding structural changes not related to or affecte Tenant's improvements or acts. The judgment of any cour competent jurisdiction or the admission of Tenant in any a1 against Temnt, whether Landlord be a pazty thereto or not, Tenant has violated any law, statue, ordinance or govemme rule, regulation or requirement, shall be consulted of that as &tween the Landlord and Tenant. ?x ticle 8 UTILITIES SERVICES a Tenant agrees, as its own expense, to pay for all w; gas, pwer, electric current, telephone, and all other simj utilities used by the Tenant on the premise from and afte delivery of possession thereof by Landlord. If any such ch are not pid when due, Landlord may pay the same, and any a so paid by Landlord shall thereupon become due to LanSlord Tenant as additional rent. Article 9 INDEMNITY - INSUIIANCE - WAIVER OF SUBIIOGATICH A. Temnt avemnts with Landlord that Landlord shal be liable for any damage or liability of any kind or fo: injury to or death of person or damage to property of Teran any other person during the term of this Lease, from any ( whatsoever, by reason of the use, occupancy and enjoyment 0 premises by Tenant or any perscn therecn or holding under Te and that Tenant will indemnify and save harmless the Lane 7 0 from all liability whatsoever, on account of any such re claimed damge or injury and from all liens, claims and de arising out of the use of the premises and its facilities, o repairs or alterations which Ternnt may make upon said pre but Tenant shall not 5e liable for damage or injury occasion the negligence of Landlord and its designated agents, servan employees unless covered by insurance Tenant is requirt provide. This obligation to irdemni fy shall include reaso attorneys' fees and investigation costs and all other reasa costs, expenses and liabilities from the first notice tha claim or demand is to be made or may be made. B. Landlord and Tenant hereby waive any rights eac: have against the other on account of any loss or dz occasioned to Landlord or Tenant, as the case may be, respective property, the premises, or its contents or to I portions of the building arising from any risk covered by and extended covera9 insurance; and the parties each, on b of their respective insurance companies insuring the proper either Landlord or Tenant aFinst any such loss, waive any of subrogation that it my have against the Landlord or Te. as the case may be. The foregoing waivers of subroFtion s be operative only so long as they do not invalidate any policy. C. Tenznt further covenants and agrees that from and the substantial completion of the premises, Temnt will carr maintain, at its sole cost and expense, the following typc insurance, in the amounts speci fied any in for form hereina providd for: (i) PUBLIC LIABILITY. Bodily injury liabi insurance with limits of not less than Five Hundrd Tho Dollars ($500,000.00) per person and One Million Dol ($1,000,000.00) ser occurrence insuring against any anc liability of the insured with respect to said premisc arising out of the mainterance, use or occupancy thereof property damage liability insurance with a limited o less than Two Hundred Fifty Thousand Dollars ($250,00 per accident or occurrence. All such bodily injury liab insurance and property damage liaSility insurance s specifically insure the performance by Tenant of indemnity agreement as to liability for injury to or deal persons and injury or damage to property in this Artic contained. 0 (ii) TENANT IMPROVEMENTS. Insurance covering a1 the items specified as "Tenant's Work" in Exhibit Tenant's leasehold improvements, alterations, additior improvements permitted under Article 11, trade fixtt merchandise and personal property from time to time in, ( upon the premises, in an amount not less than eighty pe: (80%) of their full replacement cost from time to time dl the term of this Lease, providing protection against peril included within the classification "Fire and Extl 8 a Coverage", together with insurance against sprinkler dam vandalism and malicious mischief. Any policy proceeds sh be used for the repair or replacement of the property dai or destroyed unless this Lease shall cease and termir under the provisions of Article 18 hereof. (iii) POLICY FORM. All policies of insurance prov. for herein shall be issued by insurance coinpanies, t general policy holders' rating of not less than A ar financial rating of Class X as rated in the most cur1 available "Best's" Insurance Reports, and quali fied tc business in the State where the building is situated, shall be issued in the names of Landlord and Tenant, wk policies shall be for the mutual and joint benefit protection of Landlord and Tenant, and executed copie: such policies of insurance or certificates thereof shall delivered to landlord within ten (10) days after deliver possession of the premises to Tenant and thereafter wi: thirty (30) days prior to the expiration of the term of c such policy. All public liability and property dai policies shall contain a provision that Landlord, alth named as an insured, shall nevertheless be enkitlec remvery under said policies for any loss occasioned to its servants, agents and employees by reason of negligence of Tenant. As often as any such policy sh expire or terminate, renewal or zdditional policies shal proared and maintained by Temnt in like mnner and to extent. All policies of insurance delivered to Landlord contain a provision that the company writing said policy k give to Landlord twenty (20) days notice in writins advance of any cancellation or lapse or the effective dat any reduction in the amounts of insurance. All pul liajility, property damge and other casualty policies SI be written as primary policies, not cmtributing with and in excess of coverage which Landlord nay carry. To extent Landlord's lender or ground lessor, if any requests, said lender and lessor shall also be nanet additional insureds and shall be given the notices to same extent as Landlord is entitled. a a D. Notwithstanding anything to the contrary conta within this ARticle 9, Tenant's obligations to carry insurance provided for herein may be brought within the cover of a so-called blanket policy, or policies of insurance car and maintained by Tenant, provided, however, that Landlord S' be named as an additional assured thereunder as its interest appear and that the coverage afforded Landlord will no reduced or diminished by reason of the use of such blanket po of insurance, and provided further that the requirements forth herein are otherwise satisfied. Tenant agrees to pe Landlord at all reasonable times to inspect the policie insurance of Tenant covering risks upon the premises for w policies or copies thereof are not required to be deliver€ Landlord. a 9 E. Landlord shall at all times during the term her' maintain in effect a policy or policies of insurance cover the building of which the premises are a part, in an amount less than eighty percent (80%) of full replacement c( (exclusive of the cost of excavations, foundations and footin from time to time during the term of this Lease or the amount such insurance Landlord's mortgage 1 ender requires Landlord maintain, whichever is the greater, providing protection agai any peril generally included within the classification "Fire Extended Coverage," together with insurance against sprink darnacp, vandalism and malicious mischief. Landlord's obligat to carry the insurance provided for herein may be brought wit the coverage of any so-called blanket policy or policies insurance carried and maintained by Landlord, provided that mvera9 afforded will not be reduced or diminished by reasm the use of such blanket policy of insurance. Tenant agrees pay Landlord as additional rent, during =ch year or partial y of the term of this Lease, the cost to Landlord of the insura required to be maintained by Landlord on the premises un Article 9E for each such year or partial year. Such additio rent for any partial year of the term hereof shall be prorate( a time basis. Payment shall be made by Tenant within fift (15) days after receipt of a written statement from Land1 setting forth the cost of such insurance and showing reasonable detail the manner in which it has been computed. the event the cost to the Landlord of the insurance it required to maintain on the premises under said Article 9E is separately charged to Landlord by its insurance carrier, portion applicable to the premises of the ast of such insur shall be that propor tion of such cost which the Floor Area of premises 'mrs to the Floor Area of all the areas available exclusive use and occupancy by terants of the building, whe or not actually occupied and open for business covered by c insurance. 0 0 Article 10 TITLE OF LANDLORD Landlord covenants that as of the date hereof there ar liens upon its estate other than (a) the effect of covena conditions, restrictions, msements, ground lease(s), if any, mortgages of record, and other rights of way of record; (b) effect of any zoning laws of the City, County and State where building is situated, and (c) general and special taxes delinquent. Tenant agrees that as to its leasehold estate and all persons in possession or holding under it, will cor to and will not violate the terms of any of the aforementi matters of recnrd, or any other matters of record. Article 11 TENANT IS RIGHTS TO MAKE ALTERAT IONS 10 a A. Landlord agrees that Tenant may, at its own expense after giving Landlord notice in writing of its intention to so, from time to time during the term hereof, make alteratio additions and changes in and to the interior of the premi (except those of a structural mture) as it may find necessary convenient for its purposes, provided that the value of premises is not thereby diminished, and provided, however, t no alterations, additions or changes costing in excess of Thousand Five Hundred Dollars ($2,500.00) may be made with first procuring the approval in writing of Landlord. addition, no alterations, additions or changes shall be made any store front , the exterior walls or roof of the premises, shall Tenant erect any mezzanine or increase the size of same one be initially constructed, unless and until the writ consent and approval of Landlord shall first have been obtai In no event shall Tenant make or cause to be made any penetrat through the roof of the premises without the prior writ approval of Landlord. Terant shall be directly responsible any and all damages resulting from any violation of provisions of this Article. all a1 terations, additions, changes to be made to the premises which require the approval Landlord shall be under the supervision of a competent archii or competent licensed structural engineer and made in acoord with Plans and Speci fications with respect thereto, approvec writing by Landlord before the commencement of work, where approval is required pursuant to the provisions of this Arti All work with respect to any alterations, additions, and cha must be done in a good and workmanlike manner and diliger prosecuted to completion to the end that the premises shaL all times be a complete unit except during the period of w Upon completion of such mrk, Tenant shall file for record in office of the County Recorder where the building is locat Notice of Completion as permitted by the law. Upon termim of the TeEnt's leasehold estate such alterations, ad& tions improvements shall be performed and done strictly in accord with the laws and ordimnces relating thereto. In performing work of any such alterations, additions or changes, Tenant s have the work performed n such a manner as not to obstruct access to the premises of any other tenant in the building. 0 0 B. In the event that Tenant shall make any permi alterations, additions or improvements to the premises under terms and provisions of this Article 11, Temnt agrees UPGP part to carry such insurance as required by Article 9C covering any such alteration, addition or improvement, it t expressly understood and agreed that none of such a1 terati additions or improvements shall be insured by Landlord under insurance as it may carry upon the building of which the prem are a part, nor shall Landlord be required under any provi; for reconstruction of the premises to reinstall any a1 ter ati ons , improvement s or addi ti ons. C. At Landlord's option upon termination or expiratic this Lease, Tenant shall remove any or all of the improven mnstructed or installed by Temnt on the premises,, with TI 11 a repairing any damages to the premises caused by such removal Article 12 MECHANICS ' LIENS A. Tenant agrees that it will pay or cause to be pai costs for work done by it or caused to be done by it o premises, and Tenant will keep the premises free and clear o mechanics' liens and other liens on account of work don, Tenant or persons claiming under it. Tenant agrees to and indemnify, defend and save Landlord free and harmless ag liability, loss, damage, costs, attorneys' fees, and all expenses on account of claims of lien of labrers or materi or others for work performed or materials or supplies furn for the Temnt or persons claiming under it. If Tenant shall desire to contest any claim of lie shall furnish Landlord adequate security of the value ore i amount of the claim, plus estimated costs and interest, or i! of a responsible mrprate surety in such amount condition the discharge of the lien. If a final judgment establishir validity or existence of a lien for any amount is entered, 7 shall pay and satisfy the same at cnce. e B. C. If Temnt shall be in default in paying any charg which a mechanics' lien claim and suit to foreclose the lier been filed, and shall not have given Landlord security to pr the property and Landlord against such claim of lien, Lan may (but shall not be so required to) pay the said claim ar costs, and the amount so paid, together with reasor attorneys' fees incurred in connection therewith, sha! immediately due and owing from Tenant to Landlord, and T shall py the same to Landlord with interest at the ma lawful rate from the dates of Landlord's payments. Shoul claims of lien be filed against the premises or any a affecting the title to such property be commenced, the receiving notice of such liens or action shall forthwith gi7 other party written notice thereof. Landlord or representatives shall have the right to go upon am3 inspec premises at all reasonable times and shall have the right tc and keep posted thereon notices of non-responsibility, ox other notices which the Landlord may deem to be proper fc protection of Landlord's interest in the premises. Temnt 5 before the commencement of any work which might result i such lien, give to Landlord written notice of its intention so in sufficient time to enable the pcsting of such notices Ar ticle 13 ADVERTISING SIGNS Tenant shall not utilize any sign on or about the premises ( as has been approved by Landlord. Tenant shall not afi maintain upon the glass panes and supports of the show wi a 12 (and within 24 inches of any window), doors and the exte walls of the premises, any signs, advertising placards, nz insignias, trademarks, descriptive material or any other like item or items except such as shall have first received written approval of Landlord as to size, type, color, locat copy, nature and display qualities. Anything to the contrar this Lease notwithstanding, Tenant shall not affix any sic the roof of the premises. In addition, no advertising mc shall be utilized by Tenant which can be heard or experic outside Tenant's premis es, including without limiting generality of the foregoing, flashing lights, search lic loudspeakers, phonographs, radios or television. Temnt s not display, paint or place or cause to be displayed, paintl placed, any handbills, bumper stickers or other advertj devices on any vehicle parked in the parking area of Building, whether belonging to Tenant, or to Tenant's agen to any other person: nor shall Tenant distribute, or cause distributed, in the Building, any handbills or other advert devices, and in the event of a violation of this covena Tenant, Tenant shall py to Landlord the cost and ex] necessary to remove any such unauthorized material fro8 Building. Arti cle 14 FIXTURES AND PERSCNAL PROPERTY A. Any trade fixtures, signs and other persmal proper Temnt not permanently affixed to the prenises shall remai property of Tenant and Landlord agrees that Tenant shall ha\ right, provided Temnt be not in Cefault under the terms of Lease, at any time, and from time to time, to remove any ar: of its trde fixtures, sign and other personal property whj may have stored or installed in the premises, including lx limiting the same to counters, shelving, slmwcases, mirror other movable personal property. Nothing in this Ar contain4 shall be deemed or construed to permit or allow 7 to remove so much of such personal property, withou immediate replacement thereof with similar personal proper comparable or better quality, as to render the pre unsuitable for conducting the type of business specifi Exhibit "B" attached hereto. Tenant at its expense immediately repair any damage occasioned to the premis reason of the removal of any such trade fixtures, signs other personal property, and upon the last day of the Leas1 or a date of earlier termination of this Lease, shall leaT premises in a neat and clean condition, free of debris. trade fixtures, signs and other perscnal property installed attached to the premises by Temnt must be new when so ins or at tached. a B. All improvements to the premises by Tenant, inc. but not limited to light fixtures, floor covering partitions, Mt excluding trade fixtures and signs, shall the property of Landlord upon expiration or earlier termi 13 0 of this Lease. C. Tenant shall pay before delinquency a11 ta assessments, liceme fees and public charges levied, assess6 imposed upon its business operation, as well as upon its t fixtures, lease-hold improvements (including, but not limi tec those Tenant is required to make in accordance with provisions of Exhibit "C" hereof), merchandise and other pers property in, on or upon the premises. In the event any items of property are ass ess ed with property of Landlord, f and in such event, such assessment shall be equitably di\ between Landlord and Temnt to the end that Temnt shall pay its equitable proportion of such assessment. Landlord s determine the basis of prorating any such assessments and determination shall be binding upon both Landlord and Ternnt taxes, assessments, fees or charges referred to in this pami shall be considered as taxes under the provisions of Artic hereof. Article 15 e ASSIGhTNG, MORTGAGING, SUBLETTING, CHANGE IN (DRPORATE OWNER A. Tenant shall not transfer, assign, sublet, enter license or concession agreements, change ownership, mort95 hypothecate this Lease or Tenant's interest in and tc premises without first procuring the written conser: Landlord. Any attempted transfer, assignment, sublet license or concession agreement, change of ownership, mort9 hypothecation without Landlord's written consent shall be and confer no rights upon any third person. Without in an limiting Landlord's rights to refuse to give such consent fo other rasm or r63sons, Landlord reserves the right to refL give such consent unless Temnt remains fully liable durin unexpired tern of the Lease and Landlord further reserve right to refuse to give such consent if in Landlord's reaso business judgment the quality of merchandising operation my be in any way adversely affected during the term o Lease or the financial worth of the proposed new tenant is than that of the Tenant executing this Lease or of Tenan Tenant's Guarantor as the case may be. Tenant agrel reimburse Landlord for for Landlord's reasonable attornel incurred in conjunction with the processing and doamentati any such requested transfer, assignment, subletting, licensi concession agreement, change of ownership, mortgac hypothecation of this Lease or Tenant's interest in and t premises. a B. Each transfer, assignment, subletting, lic concession agreement, mortgige and hypothecation to which has been consent shall be by an instrument in writing ir satisfactory to Landlord and shall be executed by the trans assignor, sublessor, licensor, mncessionaire, hypothecat mortgagor and the transferee, assignee, sublessee, licf mncessionaire or mortgigee in each instance, as the case m 14 e and each transferee, assignee, sublessee, licen concessionaire or mortgagee shall agree in writing foi benefit of Landlord herein to assume, to be bound by, a perform the terms, covenants and conditions of this Lease done, kept and performed by Tenant, including the payment 0' amounts due or to become due under this Lease direct1 Landlord. One executed mpy of such mitten instrument sha: delivered to Landlord. Failure to first obtain in wr: Landlord's consent or failure to comply with the provisic this Article shall operate to prevent any such tran assignment, subletting, license, concession agreement, mor or hypothecation from becoming effective. C. If a Tenant hereunder is a corporation (exct corpration whose stock is traded on the NYSE or the AMEX), an unincorporated association or partnership, the tran assignment or hypothecation of any stock or interest in corporation, association or partnership in the aggrep excess of twenty-five percent (25%) shall be deemed an assic within the meaning and provisions of this Article 15. Article 16 e TENANT'S CDNWCT OF BUSIiVESS A. Tenant covenants and agrees that, continuous1 uninterruptedly from and after its initial opening for bus it will operate and conduct within the premises the bus which it is permitted to operate and conduct under the pmv hereof, except while the premises are untenantable by rea: fire or other casualty, and that it will at all times kec maintain within and upon the premises and adequate stc merchandise and trade fixtures to service and supply the and ordinary demands and requirements of its customers an1 it will keep its premises in a neat, clean and orderly cond Tenant agrees that all trash and rubbish of the said Terant -. only be deposited within receptacles as provided by Landlo that there shall be no other trash receptacles permit1 remain outside of the premises. Landlord agrees to causi receptacles to be emptied and trash renoved at Tenant's 03: expense as part of the common area expenses. B. Tenant shall faithfully observe and comply wi rules and regulations that Landlord shall from time ti promulgate and/or modify. The rules and regulations sh binding upon the Tenant upon delivery of a copy of tl Tenant. Landlord shall not be responsible to Tenant f nonperformance of any said rules and regulations by any tenants or occupants. All such rules and regulations sh non-discriminatory and shall be applicable to all use tenants of the Building. Article 17 a REPAIRS AND MAINTENANCE a 15 A. Tenant agrees at all times, from and after substani completion of the premises, and at its own cost and expense repair, replace and maintain a good and tenantable condition premises and every part thereof, excluding the roof, extei walls, structural parts of the premises and structural f: (flcor covering, including carpeting, terrazzo or other spec flooring installed by or at the request of Tenant, tc maintained by the Temnt), and including without limit ation utility meters, pipes and conduits, all fixtures, conditioning and all Terunt's signs, locks and closing devi and all window sash, casement or frames, door and door fra and all such items of repair, maintenance and improvemen reconstruction as may at any time or from time to timc required by government agency having jurisdiction ther Landlord will contract with a service company for mon maintemnce of the heating and air conditioning equipment or roof and Tenant shall pay Landlord for this service on a mon basis. e E. Subject to the foregoing provisions hereof, the Land shall keep and maintain in good and tenantable condition repair, the roof, exterior walls, structural parts of prernis es and structural floor, pipes and conduits outside premises for the furnishing to the premises of various util. (except to the extent that the same are the obligation ol appropriate public utility company): provided, however, Landlord shall not be required to make repairs necessitatc reason of the negligence of Tenant or anyone claiming c Tenant, or by reason of the failure of Tenant to perfor observe any conditions or agreements in this Lease containel cause by alterations, additions, or improvements made by Tt or anyone claining under Tenant. Anything to the an1 notwithstanding contained in this Lease, Landlord shall nc any way be liable to Tenant for failure to make repairs as ht specifically required of it unless Temnt has previously not Landlord, in writing, of the need for such re-pairs and LanC has failed to commence making repairs within 30 days i receipt of such notice and to complete said repairs wit1 reasomble period of time following receipt of TeMRt'S wr notification. Any costs Landlord incurs from time to ti connection with the maintenance and repair of the 2rernis above provided shall be billed by Landlord to Tenant and receipt of such billings Tenant shall immediately reim Landlord for said costs. a C. If Tenant refuses or neglects to make repairs a maintain the premises, or any part thereof, in a mz reasonable satisfactory to Landlord, Landlord shall hac right, upon giving Tenant reasonable written notice 0 election to do so, to make such repairs or perform maintemnce on behalf of and for the account of Temnt. Ir event such work shall be paid for the Tenant as additicnal promptly upon receipt of a bill therefor. 16 @ D. As used in this Article the expression "exterior ws shall not be deemed to include store front or store fronts, p glass, window cases or window frames, doors or door fra security grilles or similar enclosures. It is understood agreed that Landlord shall be under no obligtion to make repairs, alterations, renewals, replacements or improvement and upon the premises or the mechanical equipment exclusi serving the preinises at any time except as in this LI expressly provided. 0 E. Upon any surrender of the premises, Tenant SI redeliver the premises to Landlord in good order, conditior state or repair, ordinary wear and tear excepted, and exceF such items of repair as may be Landlord's obligation hereundc Article 18 RE CONSTR UCT I ON A. In the event the premises be damaged by fire or ( perils covered by Landlord's fire and extended cove insurance, Landlord shall: (i) Within a period of ninety (90) days thereat commence repair, reconstruction and restoration of said pre and prosecute the same diligently to completion, in which this Lease shall continue in full force and effect: or (ii) In the event of a partial or total destruc of the premises during the last three (3) years of the hereof, Landlord and Tenant shall each have the optic terminate this Lease upon giving written notice to the 0th exercise therecf within thirty (30) days after such destruc For purposes of this paragra@ (ii), "partial destruction" be deemed a destruction to an extent of at least thirty-thrc one-third percent (33-1/38) of the then full replacement cc the premises as of the date of destruction. e B. In the event the premises shall be damaged as a r of any flood, earthquake, act of war, nuclear reaction, nul radiation or radioactive contamination, or from any casualty not covered by Landlord's fire and extended cov insurance, to any extent whatsoever, Landlord may within r (90) days following the date of such damage, commence re reconstruction or restoration of said premises and prosecut same diligently to completion, in which event this Lease continue in full force and effect, or within said ninet period elect not to so repair, reconstruct or restore premises in which event this Lease shall cease and terminat either such event Landlord shall give Tenant written not: its intention within said ninety-day period. C. In the event of any remnstruction of the premises this Article 18, said reconstruction shall be in S conformity with the provisions of Exhibit "C" hereof and 17 a extent of the work as therein set forth as "Descriptio Landlord's Work" and "Description of Tenant's Wo Notwithst snding that all reconstruction work shall be perfc by Landlord's contractor unless Landlord shall otherwise a in writing, Landlord's obligation to reconstruct the prem shall be only to the extent of the work as describe1 "Description of Landlord's Work'' in Exhibit "C" hereof; Ten at its sole cost and expense, shall be responsible for the re and restoration of all items set forth as Tenant's Work in Exhibit "C" and the replacement of its stock in trade, t fixtures, furniture, furnishings and equipment. Tenant s commence installation of fixtures, equipment and merchar hereof promptly upon delivery to it of possession of the prer and shall diligently prosecute such installation to completi D. Upon any termination of the Lease under any of provisions of this Article, the parties shall be released th without further obligations to the other party coincident the surrender of possession of the premises to the Land: except for items which have theretofore accrued and be unpaid. In the event of termination for reason of damge by or other perils and such damage is covered by Tenant's fir extended coverage insurance under Article 9C (iv), all proceeds covering the items s2ecified as "Tenant's Worl Exhibit 'IC", and Tenant's leasehold improvements, but excl proceeds for trade fixtures, merchandise, signs and ( personal property, shall be disbursed and paid to the Landlc E. In the event of repair, reconstruction and restor as herein provided, the minimum annual rental provided to be under Article 1 hereof shall be abated proporticmately wit degree in which the Tenant's use of the premises is imp commencing from the date of destruction and continuing durir period of such repair, reconstruction or restoration. T shall continue the operation of its business on the pre during any such period to the extent reasonably practicable the st andpoinf -of prudent bsiness maragement; and the oblis of Tenant hereunder to py percentage rental and addit rental shall remain in full force and effect. Tenant shal be entitled to any compensation or damges from Landlord for of the use of the whole or any part of the premises, o building of which the premises are a part, Tenant's per property or any inconvenience or annoyance occasioned bl damge, repair, reconstruction or restoration. F. With respect to any partial or total destruction Landlord is obligated to restore or may restore under any ( provisions of this Lease, Tenant hereby waives any stat rights of termination which may arise by reason of destruction. 0 a G. In the event of any damage to the premises, Tenant give to Landlord written notice of such damage within ! after its occurrence. 18 0 I,H 3' Article 19 q. :J (5- ?>'/ 10) COMMON AREAS AND AUTOMOBILE PARKING A. Landlord shall provide one parking space for ev students and or staff member. (students + staff / 2 = parking spaces). Any excess parking required by school wi $50.00 per space in 1986 dollars plus C.P.I. adjustment year. 0 B. Tenant and its employees and invitees are, exce otherwise specifically provided in this Lease, author empowered and privileged to use the common areas in common other persons during the term of this Lease. Landlord ag without cost or expense to Tenant, to construct or cause constructed, the common areasgenrral ly upon the area sho the site plan attached hereto and marked Exhibit "A", maintain and operate, or cause to be maintained and op (except as hereinafter provided with reference to cc maintenance), said common areas at a1 1 times fol lowing comp thereof, for the benefit and use of the customers and patr Tenant, and of other tenants, owners, and occupants of th constituting the Building of which the premises are a part. C. Landlord shall keep or cause to be kept said ( areas.in a neat, clean and orderly condition, properly 7 and landscaped, and shal 1 repair any damage to the faci' thereof, but all expenses in connection with said coinrnon shall be charged and prorated in the manner hereinaftt forth. It is understood and agreed that the phrase "expen connection with said common areas" as used herein sha construed to include, but not be 1 imi ted to, a1 1 sums expen connection with said common areas for all general maintenan repairs, resurfacing, or painting, restriping, cleaning, removal , sweeping and janitorial services, maintenanc - .L repair of sidewalks, curbs, and building signs; spr-1 systems, plant and 1 andscaping; 1 ighting and other uti-1 directional signs and other markers and bumpers; maintenan repair of any fire protection systems, 1 ighting systems, drainage systems and any other uti 1 i ty systems; personr implement such services including, if Landlord deems nece the cost of security guards; real and personal property possessory interest taxes, and assessments on the improvi and land comprising said common areas; any governm imposition or surcharge imposed against Landlord or as: against the automobile parking area of any other portion common area; depreciation on maintenance and operating mac and equipment (if owned) and rental paid for such machine equipment (if rented), adequate public liability and prc damage insurance on the common areas (under which Tenant sh named as an additional assured). In addition, "expenses in connection with said common shall include costs for the accounting, bookkeepin a 19 0 collection of the expenses in connection with saic in an amount equal to ten percent (10%) of Tena share of the total of the aforementioned exper calendar year. Landlord may cause any or a1 1 of sa be provided by an independent contractor or Anything to the contrary notwithstanding containec a71 expenses in connection with the original con installment of the common areas shall be at the expense of Landlord and shall not in any event be I Tenant. e D. Tenant shal 1 pay to Landlord Tenant's pro such common area expenses in the following manner: (i) From and after the date the term of proved for in Article 1 hereof has commenced, bi adjustment as hereinafter in this subparagraph Tenant shall pay Landlord on the first day of each I of the term of this Lease an amount estimated by L Tenant's pro rata share of such common area expens may adjust the estimated monthly charge at thl calendar quarter on the basis of Landlord's ex reasonably anticipated costs. (ii) Within thirty (30) days following th calendar quarter or, at Landlord's option, each cI Landlord sha? 7 furnish Tenant a statement covering quarter or year just expired, certified as correct t pub? ic accountant or an authorized representative showing the total operating cost, the amount of rata share of such common area expenses for such ca' or year and the payments made by Tenant with re: period as set forth in subparagraph (i). If Tena share of such common area expenses exceeds Tenant made, Tenant shall pay Landlord the deficiency wi days after receipt of such statement. If said payme offset the excess against payments next thereafter Landlord as set forth in said subparagraph (i). (iii) Tenant's pro rata share of the tota expenses for the previous calendar quarter or year portion of all of such expenses which is equal to 1 thereof which the number of square feet of Floot premises bears to the total number of square feet of buildings in the entire Building which are fror occupied and open for business as of the commenc calendar quarter. There shall be appropriate a Tenant's share of the common area expenses as of thc and expiration of the term of this Lease. F. Landlord shal 1 at a1 1 times have the right of determining the nature and extent of the common making such changes therein and thereto from time in its opinion are deemed to be desirable and interests of all person using said common areas, e .. . . ._ *-.::.:: 0 20 location and relocation of driveways, entrances, e automobile parking spaces, the direction and flow of tr; installation of prohibited areas, landscaped areas, and a1 1 faci 1 i ties thereof. G. Nothing contained herein shall be deemed to crea liability upon Landlord for any damage to motor vehicl customers or employees or for loss of property from withir motor vehicles, unless caused by the negligence of Landlor( agents, servants or employees. H. Landlord shal 1 also have the right to establisl from time to time change, alter and amend, and to enforce a Tenant and the other uses of said common areas such reasa rules and regulations (including the exclusion of empl parking therefrom) as may be deemed necessary or advisab' the proper and efficient operation and maintenance of said areas. The rules and regulations herein provided may inc without limitation, the hours during which the common sha open for use. Landlord may, if in its opinion the sa advisable, establish a system or systems of validation or type operation, including a system of charges against validated parking checks of users, and Tenant agrees to c to and abide by a1 1 such rules and regulations in its use a use of it customers and patrons with respect to said auton parking area, provided, however, that a1 1 such rule regulations and such types of operation or validation of p checks and other matters affecting the customers and patr Tenant shal 1 apply equal ly and without discrimination t persons entitled to the use of said automobile pa facil i ties. I. Landlord shal 1 at a1 1 times during the term o Lease have the sole and excl usive control of the common and may at any time and from time to time during the term exclude and restrain any person from use or occupancy th excepting, however, bona fide customers, patrons and sei suppliers of Tenant, and other Tenants of Landlord who ma of said areas in accordance with the rules and regul established by Landl ord, the other tenants of Landlord a other owner of the building to use the same in commoi Tenant, and it shall by the duty of Tenant to keep all o areas free and clear of any obstructions created or permit Tenant or resulting from Tenant's operation and to permit t of any said areas only from normal parking and ingress and by the said customer, patrons and service-suppliers to an the building occupied by the Tenant and other tenai Landl ord. J. If in the opinion of Landlord unauthorized persa using any of said areas by reason of the presence of Ten the premises, Tenant, upon demand of Landlord, shal 1 enforc rights against all such unauthorized persons by appro proceedings. Nothing herein shall affect the rights of Li at any time to remove any such unauthorized persons frc e e 21 e areas or to restrain the use of any said areas by unauthc persons. ARTICLE 20 BANKRUPTCY - INSOLVENCY a Tenant agrees that in the event a1 1 or substantial ly Tenant's assets be placed in the hands of a receiver or tr and such receivership or trusteeship continues for a per thirty (30) days, or should Tenant make an assignment f benefit of creditors of be finally adjudicated a bankru should Tenant institute any proceedings under the Bankrupt as the same now exists or under any amendment thereof whi hereafter be enacted, or under any other act relating ' subject of bankruptcy wherein Tenant seeks to be adjudic bankrupt, or to be discharged of its debts, or to effect of liquidation, composition or reorganization, or shou i nvol untary proceeding be fi 1 ed agai ns t Tenant under an bankruptcy laws and such proceeding not be removed within (90) days thereafter, then tenant shall be in default unde Lease, and this Lease or any interest in and to the pr shall not become an asset in any such proceedings and, such event and in addition to any and a1 1 rights or remec Landlord hereunder or by 1 aw provided, it shal 1 be 1 awf Landlord to decl are the term hereof ended and to re-ent premises and take possession thereof and remove all p therefrom and Tenant shal 1 have no further claim ther hereunder. The provision of this Article 20 shall also ap any Guarantor of this Lease. e ARTICLE 21 DEFAULTS BY TENANT A. Should Tenant at any time by in default hereunde respect to any rental payments or other charges payable by hereunder, and should such default continue for a period ( (5) days after written notice from Landlord to Tenant; or the Tenant be in default in the prompt and full perform any other of its promises, covenants or agreements contained and should such default or breach of perf( continue for more than a reasonable time (in no event to thirty (30) days) after written notice thereof from Land tenant specifying the particulars of such default of bt performance; or should Tenant vacate or abandon the prl then Landlord may treat the occurrence for anyone or more foregoing events as a breach of this Lease, and in addi . ... .. :. any or all other rights or remedies of Landlord hereunder the law provided, it shal 1 be at the option of Landlord, further notice or demand of any kind to Tenant or an: person: (a) The right of Landlord to declare the term hereof a 22 re-enter the premises and take possession thereof and rernovt persons therefrom, and Tenant shal 1 have no further claim th or thereunder; or (b) The right of Landlord without declaring this Lease to re-enter the premises and occupy the whole or any partth( from and on account of Tenant to collect said rent and any rent that may thereafter become payable. entered the premises, to thereafter elect to terminate this and all of the rights of Tenant in or to the premises. B. Should Landlord have re-entered the premises undet premises under the provisions of subparagraph (b) above, Lanc shall not be deemed to have terminated this lease, or liability of Tenant to pay rent thereafter to accrue, c liability for damages under any of the provisions hereof, b. such re-entry or be any action in unlawful detainer otherwise, to obtain possession of the premises, unless Lanr shall have notified Tenant in writing that it has so elect terminate this 1 ease, and Tenant further covenants thai service by Landlord of any notice pursuant to the unl; detainer statutes of the State where the building is situate the surrender of possession pursuant to such notice shal (unless Landlord elects to the contrary at the time of or a time subsequent to the serving of such notices and such ele be evidenced by written notice to Tenant) be deeme termination of this Lease. . In the event of any entry or t4 possession of the premises as aforesaid, Land1 ord shal I hav right, but not the obligation, to remove therefrom all o part of the personal property located therein and may plac same in storage at a public warehouse at the expense and ri the owner or owners thereof. C. Should Landlord elect to terminate this lease unde provision of subparagraphs (a) or (c) above, Landlord may re1 from Tenant as damages: (i) the worth at the time of award of any unpaid rent had been earned at the time of such termination; plus (ii) the worth at the time of the amount by whicl unpaid rent which would have been earned after termination the time of award exceeds the amount of such rental loss t proves could have been reasonably avoided; pl us (iii) The worth at the time of award of the amount by the unpaid rent for the balance of the term after the ti award exceeds the amount of such rental loss that Tenant p could be reasonably avoided; pl us (iv) any other amount necessary to compensate Landlor all the detriment proximately caused Tenant's failure to pe his obligations under this Lease or which in the ordinary C a (c) The right of Landlord, even though it may havf e 23 a of things would be likely to resul t therefrom, including, b limited to any costs or expenses incurred by Landlo maintaining or preserving the premises after such def preparing the premises for reletting to a new tenant, any r or alterations to the premises for such reletting, IE commission, or any other costs necessary or appropriate to the premises. (v) at Landlord's election such other amounts in addit or in lieu of the aforegoing as may be permitted from ti time by the laws of the State where the building is situate 0. As used in subparagraphs (i) and (ii) above, the ' at the time of award" is computed by allowing interest i rate of ten percent (10%) per annum. As used in subpara (iii) above the "worth at the time of award'' is comput discounting such amount at the discount rate of the Fe Reserve Bank nearest to the location of the building at thi of award plus one percent (1%). E. For all purposes of this Article 21, the term I shall be deemed to be the minimum annual rental and a1 1 sums required to be paid by Tenant pursuant to the terms 0' Lease. All such sums, other than the minimum annual re shall be computed on the basis of the average monthly a thereof accruing during the immediately preceeding sixt: month period, except that if it becomes necessary to computc rental before such a sixty (60) month period has occurred tl the basis of the average monthly amount thereof accruing ( such shorter period. F. In the event of default, all of Tenant's fix1 furniture, equipment, improvements additions, a1 teratior other personal property, shall remain on the premises and i event, and continuing during the length of said default, Lar shall have the right to take the exclusive possession of sal to use same, rent or charge free until a1 1 defaults are cur at its option, at any time during the term of this Leas require Tenant to forthwith remove same. G. Notwithstanding any other provisions of this Ar. Landlord agrees that if the default complained of, other th, the payment of monies, is of such a nature that the same c be rectified or cured within the thirty (30) day period reqi such rectification or curing as specified in the written 1 relating thereto, then such default shall be deemed t rectified or cured if Tenant within such period of thirt, days shal 1 have commenced the rectification and curing th and shal 1 continue thereafter with a1 1 due diligence to such rectification and curing and does so complete the samf the use of such diligence as aforesaid. H. The remedies given to Landlord in this Article shz in addition and supplemental to a1 1 other rights or ren which Landlord may have under the laws then in force. a a 24 a I. The waiver by Landlord of any breach of any covenant or condition herein contained snal 1 not be deemed a waiver of such term, covenant or condition or any subse breach of the same or any other term, covenant or cond herein contained. The subsequent acceptance of rent hereunc Landlord shal 1 not be deemed to be a waiver of any prec breach by Tenant of any term, covenant or condition of Lease, other than the failure of Tenant to pay the partil rental so accepted, regard1 ess of Landl ord's know1 edge of preceding breach at the time of acceptance of such rent covenant, term, or condition of this Lease shall be deem have been waived by Landlord, unless such waiver be in writi Landlord. 3. Landlord shal 1 have a first and prior lien fo rents and charges herein reserved upon the furniture, fix1 merchandise, and other personal property owned by Tf (excluding leased equipment) situated upon the premises, and items of personal property shal 1 not be removed from the pre until said rent and charges are fully paid. tenant agre execute such security agreements or financing statemen Landl ord may require to properly record its 1 i en in the p records, and in the event of default by Tenant in the paymc any sum hereunder, Landlord shall have the right to enforcc lien in the manner provided for foreclosure of security intc under the Uniform Commercial Code. Tenant hereby app Land1 ord as Tenant's attorney-in-fact to fil e such fina statements. 0 a Article 22 DEFAULT BY LANDLORD In the event Landl ord shal 1 neglect or fail to perfc observe any of the covenants, provisions or conditions cont in this Lease on its part to be performed or observed w thirty (30) days after written notice of default (or if more thirty (30) days shall be required because of the nature c default, if Landl ord shal 1 fail to proceed diligently to such default after notice), then in that event Landlord sha responsible to Tenant for any and all damages sustained by y as a result of Landlord's breach; further, after such n Tenant shall have the right to cure any such defau Landl ord's expense i ncl udi ng in such expenditure a1 'I cos' attorneys' fees incurred to cure such default or breach of tenant'shal 1 have no right to terminate this Lease excf herein otherwise specifical ly provided. Should Tenant written notice to the Landlord to correct the defau Landlord, Tenant will give similar notice to the holder ( mortgage or deed of trust of Landlord, or the lessor of a 1 lease with Landlord, and prior to any Lease cancel lation holder of the first mortgage or deed of trust, and for le shall be given a reasonable period of time to correct or I such default. If and when such holder of the first mortgi 25 a deed of trust and/or lessor has made performance on beha Landlord, the default of Land1 ord shal 1 be deemed cured. 1 shall have no right to terminate this Lease, except as expre provided herein. 0 Article 23 EMINENT DOMAIN A. In the event the entire premises shal 1 be appropi or taken under the power of eminent domain by any pub1 quasi-pub1 ic authority, this Lease shal 1 terminate and exp of the date of such taking, and Tenant shall thereup re1 eased from any 1 i abi 1 i ty thereafter accrui ng hereunder. B. In the event more than twenty-five (25%) of the footage of Floor Area of the premises is taken under the PO eminent domain by any public or quasi-public authority, or reason of any appropriation or taking, regardless of the so taken, the remainder of the premises is not one undi parcel of property, either Landlord or Tenant shall hai right to terminate this Lease as of the date Tenant is ret to vacate a portion of the premises upon giving notice in w of such election within thirty (30) days after receipt by from landlord of written notice that said premises have b appropriated or taken. In the event of such termination Landlord and Tenant shall thereupon be released fro 7 iabil ity thereafter accruing hereunder. Landlord ( immediately after 1 earning of any appropriation or taking t to Tenant notice in writing thereof. C. If this Lease is not so terminated as set forth . Tenant shall remain in that portion of the premises which not have been appropriated or taken, and Landlord agre Landlord's cost and expense, to as soon as reasonably PO restore the premises on the land remaining to a complete L like quality and character as existed prior to such appropr or taking (except that the premises wil 1 be reduced in s affected by the condemnation); and thereafter the minimum rental provided for in Article 1 hereof shal 1 be reduce] equitable basis, taking into account the relative value portion taken as compared to the portion remaining. 0. Landlord shall be entitled to the entire aw compensation in such proceedings, but the rent and other ( for the last month of Tenant's occupancy shall be prorat Landlord agrees to refund to Tenant any rent or other c paid in advance. Tenant's right to receive compensati damages for its fixtures and personal property shall affected in any manner hereby. Tenant shall be entit pursue any remedy it may have against the condemning aut for a "displaced person" pursuant to Cal ifornia Governmer Section 7262 or for loss of business goodwil 1 pursu California Code of Civil Procedure Section 1263.510. e 26 a E. For the purposes of this Article 25, a voluntary or conveyance in lieu of condemnation, but under the thre condemnation, shal 1 be deemed an appropriation or taking the power of eminent domain. e Article 24 ATTORNEY'S FEES In the event that at any time during the term of this either Landl ord or Tenant shal 1 institute any actic proceeding against the other relating to the provisions of lease, or any default hereunder, then, and in that event, unsuccessful party in such action or proceeding agree reimburse the successful party for the reasonable expens attorney's fees and disbursements incurred therein bq successful party. Further, in the event Landlord is ma party to any 1 i ti gat ion by reason of the use or occupancy of premises by Tenant or Tenant's employees, agents or gue without faul t by Landl ord, Tenant shal 1 reimburse Landl ord all of Landlord's attorneys fees and costs of litiga incurred therein. Article 25 SALE OF PREMISES BY LANDLORD In the event of any sale or exchange of the premis Landlord and assignment by Landlord of this Lease, Landlord be and is hereby entirely freed and re7 ieved of all liab under any and all of its covenants and obligations contain or derived from this lease arising out of any act, occurrer omission re1 ating to the premises or this Lease occurring the consummation of such sal e or exchange and assignment. Article 26 SUBORDINATION , ATTORNMENT a A. Upon written request of Landlord, or any mortgagee or beneficiary of a first deed of trust of Land Tenant wil 1 in writing subordinate its rights hereunder t interest of any ground lessor of the land upon which the prc are situated, as we1 1 as to the 1 ien of any first mortgz first deed of trust, now or hereafter in force against the and building of which the premises are a part, and tc advances made or hereafter to be made upon the security th Notwithstanding the foregoing, in the event any proceedin< brought for foreclosure, or in the event of the exercise ( power of sale under any mortgage or deed of trust ma Landlord covering the premises, Tenant shall at the requc any purchaser at any such sale attorn to the purchase recognize such purchaser as the Landlord under this Lease. B. Within ten (1 0) days after written request therefc 27 e Landlord, or in the event that upon any sale, assignme hypothecation of the premises or the land thereunder by Lant an offset statement shal 1 be required from Tenant, Tenant i to deliver in recordable form a certificate addressed to an) proposed mortgagee or purchaser or to the Landlord certi that this Lease is in fl;ll force and effect (if such b case), there are no defenses or offsets thereto or stating claimed by Tenant, and setting forth such other matte reasonably requested by Land1 ord or such proposed mortgag purchaser, including but not limited to those items set for Exhi bi t "E" hereto. e C. Upon Landlord's request, Tenant shal 1 modify this in accordance with the requirements of a mortgagee or benefi of a first deed of trust of Landlord provided such modific does not (i) increase the net rent or additional rent, alter the term of any renewal term or (iii) materially adve affect Tenant's leasehold estate or (iv) change, altc preclude Tenant's continued uses, uti1 ization and operatio the premises, the right to such use being expressly grant Tenant as set forth in this Lease. D. The lessor under any ground lease for the underlying the premises shall be a third party beneficia this Lease, with a right to enforce premises shal 1 be a party beneficiary of this Lease, with a right to enforce Lease against Tenant. If at any time said lessor shall ac the rights of Landlord under this Lease, "Tenant shall attc said lessor or its nominee as Landlord under this Lease. a Article 27 QUIET POSSESSION Landlord agrees that Tenant upon paying the ren performing the covenants and conditions of this Lease may qL have, hol d and enjoy the premises during the term hereof c extension thereof. Article 28 LANDLORD'S RIGHT OF ENTRY Tenant agrees to permit Landlord and its autho representatives to enter the premises at a1 1 times during business hours for the purpose of inspecting the same. 7 further covenants and agrees that Landlord may go up0 premises and make any necessary repairs to the premise perform any work therein which may be necessary to complj any laws, ordinances, rules or regulations of any p authority or of the Insurance Services Office or of any si body or that Landlord may deem necessary to prevent was deterioration in connection with the premises if the Tenani not make or cause such repairs to be made or performed or such work to be performed promptly after receipt of wr 28 a demand from Landlord. Nothing herein contained shal 1 imp1 duty on the part of Landlord to do any such work which unde provision of this Lease Tenant may be required to do, nor s it constitute for the faithful performance by Tenant of a' the terms of this Lease by said Tenant to be observec @ performed. The security deposit shal 1 not be mortg; assigned, transferred or encumbered by Tenant without the wr consent of Landlord and any such act on the part of Tenant I be without force and effect and shall not be binding Landl ord. B. If any of the rents herein reserved or any othe payable by Tenant to Landlord shall be overdue and unpa. should Landlord make payments on behalf of the Tenant, or T shall fail to perform any of the terms of this Lease, Landlord may, at its option and without prejudice to any 1 remedy which Landl ord may have on account thereof, approp and apply said entire deposit or so much thereof as m( necessary to compensate Landlord toward the payment of re additional rent or loss or damage sustained by Landlord d such breach on the part of Tenant; and Tenant shall fort upon demand restore said security to the original sum depo: Should Tenant comply with a1 1 of said terms and promptly pa, of the rentals as they fa1 1 due and a1 1 other sums payab Tenant to Landlord, said deposit shall be returned in fu' Tenant at the end of the term. c. In the event of bankruptcy or other debtor-cre proceedings against Tenant, such security deposit shall be d to be applied first to the payment of rent and other charge Landlord for all periods prior to filing of such proceedings 0. Landlord may deliver the funds deposited hereund Tenant to the purchaser of Landlord's interest in the prernis the event that such interest be sol d and thereupon Landl ord be discharged from any further liability with respect to deposit, and this provision shal 1 a1 so apply to any subse transferees. ARTICLE 29 MISCELLANEOUS e A. It is agreed that nothing obtained in this Lease! be deemed or construed as creating a partnership or joint ve between Landlord and Tenant or between Landlord and any party, or cause Landlord to be responsible in any way fo debts or obligations of Tenant, or any other party. be determined to be void by any court of competent jurisdic then such determination shall not affect any other provisi this Lease and all such other provisions shall remain in force and effect; and it is the intention of the parties h that if any provision of this Lease is capable 01 B. It is agreed that if any provision of this Lease 29 e constructions, one of which would render the provision the other of which would render the provisions valid, provision shall have the meaning which renders it valid. C. In the event Tenant hereunder shall be a corpora parties executing this Lease on behal f of tenant hereby ( and warrant that tenant is a duly qualified corporation steps have been taken prior to the date hereof to quali to do business in the State where the building is situa franchise and corporate taxes have been paid to date; future forms, reports fees and other documents nece comply with applicable laws wil 1 be filed when due. D. It is understood that there are no oral a! between the parties hereto affecting this Lease , and t supersedes and cance'ls any and all previous nego arrangements, brochures, agreements and understandings between the parties hereto or displayed by Land1 ord with respect to the subject matter thereof, and non shall be used to interpret or construe this Lease. E. Landlord reserves the absolute right to ef other tenancies in the building as Landlord, in the ex its sole business judgment, shall determine to best pi interest of the building. Tenant does not rely on the does Landlord prepresent, that any specific tenant or tenants shall during the term of this Lease occupy an. the building. This Lease is and shal 1 be considered only agreement between the parties hereto a representative and agents. AI 1 negotiations and oral acceptable to both parties have been merge into and ar herein. There are no other representatives or warranti the parties and all reliance with respect to represen sol ely upon the representations and agreements obtai n document. F. The laws of the State where the building i shall govern the validity, performance and enforcemen Lease. Ai though the printed provisions of this Lease by Landlord, this lease shall not be construed eit against Landlord or Tenant, but this Lease shall be . in accordance with the general tenor of the language if to reach and equitable result. G. A waiver of any breach or defaul t shal 1 not I of any other breach or default. Landlord's consf approval of, any act by Tenant requiring Landlord's approval shall not be deemed to waive or render L by tenant. lockouts, labor disputes, acts of God, inability to o or material s or reasonabl e substitutes therefor, go restrictions, governmental action, ci vi1 commotion, fi a 0 .. . ... Landlord's consent to or approval of any subsequent H. Any prevention, delay or stoppage due .-- .: .. . 0 30 casualty, and other causes beyond the reasonable control c party obligated to perform, shal 1 excuse the performance bi party for a period equal to any such prevention, del stoppage, except the obligations imposed with regard to r and other charges to be paid by Tenant pursuant to this Lea I. Tenant hereby expressly waives any and all rig redemption granted by or under any present or future laws i event of Tenant being evicted or dispossessed for any caus in the event of Landlord obtaining possession of the premi: reason of the violation by Tenant of any of the covenant conditions of this Lease or otherwise. The rights giv Landlord herein are in addition to any rights that may be to Landlord by any stature or otherwise. J. The voluntary or other surrender or termination of Lease by Tenant, or the acquisition by Landlord of Ten rights under this Lease, shall not work a merger wi: Landlord's express written agreement to such a merger; a Landlord's option, any such events shall operate as an assic to Landlord of any and a1 1 subleases or subtenancies of T for the premises. K. If Tenant remains in possession of the premises o part thereof after the expiration of the term hereof, occupancy shal 1 be tenancy from month to month at a rental i amount, unless otherwise expressly specifies in writii Landlord, equal to 150% of the rent for the last month o term of this Lease, plus a1 1 other charges payable hereunder upon a1 1 terms hereof appl icable to a month to month tenancj L. Time is of the essence in the performance of obliga under this Lease. Article 30 "FORCE MAJEURE 'I In the event a delay arising from "force majeure'' should a Landl ord's ob1 i gation to construct the premises, Landl ord be granted a reasonable extension of time beyond the agreed completion date to remedy the problem and complete constru of the premises. CONTINGENCIES The final consummation and commencement of this le2 contingent upon the following: 1. Landlord's ability to obtain construction fina equal to 75% of the project cost from an institutional lend "market rate" interest rates. Landl ord shal 1 notify tena writing within 90 days of the execution of this leasc 1 and1 ords abi 1 i ty or i nabi 1 i ty to obtain such financing. anticipated that First Interstate Bank wil 1 be the constru e a 31 e anticipated that First Interstate Bank wil 1 be the constructi lender for this project. Tenant agrees to cooperate fully wi First Interstate Bank providing financial information on tena and other information that might be required by First Intersta 2. Plans and Specifications - Preliminary plans for t building and the site plan for the location of the buildi within the Educational park are attached to this lease a approved by both landlord and tenant. Within 45 days from t execution of this lease landlord shall provide tenant detail plans, schematics and specifications which wil 1 identify a describe in more detail this building. These prelimina drawings shall be subject to the approval of tenant in writi within 14 days after date of receipt thereof. Subsequent to th approval landlord shall prepare the final plans a specifications for submittal to the Carl sbad Building Departmer These final plans and specifications shall also be approved disapproved by tenant within 14 days of date or receipt therec Landlord shall pay all costs of preparing plans a specifications. Once final plans are approved by Landlord a Tenant, the Landlord's architect shal 1 calculate actual squa footage to be utilized by Tenant by using BOMA full-buildi approved standards. This square footage shall be used calculating rental described in Article 5 hereof. The exa square footage shall be approved by Tenant. IN WITNESS WHEREOF, the Landlord and Tenant have duly execut this Lease on the day and year first above written. If Tenant shall be a corporation, the authorized officers must sign Lease must be executed by the LANDLORD president or vice-president and the secretary or assistant secretary, unless the by-laws or a resolution of the board of directors shall the by-laws or a certified copy of the resolution, as the case may be, By : appropriate corporate seal must be affixed. Bank for the obtaining for the construction financing. on behalf of the corporation. The By : otherwise provide, in which event, By : must be furnished. Also, the TENANT- e EXHIBIT - B a NEW SCHOOL OF ARCHITECTURE DESCRIPTION - OF PREMISES That certain space in Batiquitos Lagoon Educational Park, loc in the City of Carlsbad, County of San Diego, State of Califc containing approximately 30,000 square feet of floor area. USE OF PREMISES -- Tenant may use the premises only for educational operat These operations may incl ude undergraduate and grad institutions; offices for admissions placement, registrai faculty and accounting; conference rooms, classro 1 aboratories, 1 ibraries, and auditoriums; student servi including commons, bookstore, and cafeteria. e a EXHIBIT "C 'I DESCRIPTION OF LANDLORD'S WORK AND TENANT'S WORK - - -- - -- 1. LANDLORD'S WORK a Landlord shall construct the leased premises at Landlo sole cost and expense to the extent sbwn below: a) ancrete slab floor and insulated roof b) front and rear walls as per Landlord's plans * c) doors as per Landlords's plans * d) sewer and water stubbed to the ternnt's leased premis e) electric service and tele&one to the building f) heatifig and air conditioning mechanical equipment L placed on roofs 5) paving and lishting as pr Landlord's plans h) exterior building shell exterior walls i) me basic hashroom equipped with toilet, grab bar, mirror, light, exhaust fan, ceiling, and walls 2. TEXAhT'S WORK e Tenant will be given $ 6.50 per square foot te improvement allowance. If entire allowance is not t Tenant may apply the unused portion to offset re payments. Temnt, at Temnt's sole cost and expense sha: responsible for the cost of the following and any wor speci fically set forth under Landlord's mrk: j) all signs k) trade fixtures 1) distribution of heating and air-conditioning m) all electric wiring, outlets, lighting, switches circuit breakers n) suspen3d ceiling 0) sprinkler heads and installation p) utility meters and installation 0 q) all interior prtitioning, locks, har&are, and paint r) one half the cost of interior demising walls bewt a tenants s) floor coverings and paint All Tenant's work will be performed by Landlord as genc contractor at its' costs plus 15% for overhead and profit. LANDLORD'S INITIALS TENAM'S INITIALS e \ a EXHIBIT I'D" GUARANTEE OF LEASE e WHEREAS, a certain Lease of even date herewith has beer will be, executed by and between Batiquitos Bluff, thereir herein referred to as "Landlord", and The New Schoo Architecture, therein referred to as "Temnt", mvering cei premises in the City of Carlsbad, County of San Diego, Stai California; and WHEREAS, Landlord under said Lease requires as a mndit: its execution of said Lease that the undersigned guarantc full performance of the obligations of Tenant under said I a nd WHEREAS, the undersigned is desirous that Landlord E into said Lease with Temnt, NOW, THEREFORE, in consideration of the execution of Lease by Landlord, the undersigned hereby unconditior guarantees the full performance of each and all of the tl covenants and conditions of said Lease to be kept and perfc by Tenant, including the payment of all rentals and other ch to accrue thereuder. Tne undersigned further agrees as fol 1. This Guarantee shall continue in favor of Lane notwithstanding any extension, modi fication, or alterati said Lease entered into by and between the parties theret their successors or assigns, or notwithstanding any assignme said Lease, with or without the cmsent of said Landlord, a extension, modi fication, alteratio- or assignment of said shall in any manner release or discharge the undersignsd an undersigned does hereby consent thereto. (I, 2. This Guarantee Will antin= unchanged by any bankr reorganization or insolvency of Tenant or any successc assignee thereof or by any disaffirmance or abandonment trustee of Temnt. 3. Landlord may, without notice assign this Guarant whole or in part and no assignment or transfer of said shall operate to extinguish or diminish the liability of undersign ed he re urd e r . 4. The liability of the undersigned under this Gua shall be primary; and in any right of action which shall a to Landlord under said Lease, Landlord may, at its option, 1 against the urdersigned without having commenced any ac ti0 having obtained any judgment a9 inst Tenant. a Exhibit 'ID" Page 2 e 5. The undersigned shall pay Landlord's reason attorneys' fees and all costs and other expenses incurred i collection or attempted mllection or in any regotiations re1 to the obligations hereby guaranteed or enforcing this Guarai 6. The undersigned does hereby waive notice of any de by Landlord, as well as any notice of default in the pymen rent or any other amounts asntained or reserved in said Lease 7. The use of the singular herein shall include the p:I The obliption of two or mre parties shall be joint and se- The terms and provisions of this Guarantee shall be bindins and inure to the benefit of the respective successors and a! of the parties herein named. IN WITNESS WHEREOF, the undersigned has caused this Guai to be executed as of the date set forth on pge 1 of this Le If Guarantor shall be a - corpora ti on, t h e aut h o r i z ed officers must sign rn behalf of the corporation. This Guarantee must be executed by the president or vice-president and the secretary or assist ant Address: secretary, unless the by-laws or a resolution of the board of directors shall otherwise provide, in which event, the by-laws or a cer ti fi ed copy of the resolution, as the case may be, must be furnished. Also, -- th e a pp r o pr i at e co r por at i o n seal must be affixed. 0 e EXHIBIT "E" TENANT'S ESTOPPEL - CERTIFICATE a Date: At t en ti on : Re : The undersigned, as Tenant under that certain Lease "Lease") for the ab ve referenced premises (the "Premises") ( 1 19 , made with Batiquitos Bluf Landlord, heresy cer ti fiesthat: a. All work to the Premises has been completed and tl- and the Premises are accepted as satisfactory; b. Tenant is in full ad mmplete possession of the Prc and is fully occupying the same and conducting its bus therefrom; c. Rent under the Lease commenced to accrL I 19 , andhas been paid through the dz , 19- , and no rent credits or other of: 0 have been given by Landlord or taken Sy Temnt: d. The current rent due under the Lease is equt ) per month: Dollars ($ e. The Lease is in full force and effect and has not amended, modi fied or suspended other than by amendments # 19 , and the present term of the - expi res I 19 I f. Tenant has not advanced any amounts to or on beha Landlord under the Lease, for which advance it has not r eimburs ed ; g. Tenant holds no claim agiinst Landlord which might 1 off against accruing rentals; h. Tenant has not sublet the Premises or any portion tl nor has Terant assigned the Lease or any portion thereof; anc I. Exhibit E Page 2 0 j. Tenant understands that will materially rely on the statements made herein. undersigned acknowledges and agrees that the statements herein are true and complete and may be relied upol and its successors and assigns. (Attach Not ary Ackno wl edgment ) a a EXHIBIT F OFTION TO EXTEND TERM a OPTION TO EXTEND LEASE. A. Temnt is hereby granted successive options to exter term of this Lease, on all of the provisions contained herein 2 periods of 5 years each (each such period hereinafter refe to as "extended term") following the expiration of the ini term or of the immediately preceding extended term, as the may be. Each such option is to be exercised by giving wri notice of exercise of the option exercised ("Option Notice' Landlord at least six months, lxlt not more than one year, bc the expiration of the initial term or of the imnedia preceding extended term, as the case may be: provided, howe that in any of the following events, the extedd tern shall commence and this Lease shall expire at the end of the ini term or at the end of the immediately preceding exterdd teri the case may be: (i) if Tenant is in default on the dat giving the Option Notice, the Option Notice shall be tot ineffective; (ii) if Tenant is in default on the date respective exterded term is to commence; (iii) if any assign1 sublessee other than a successor of Tenant as defined in Sel 18.B. is in possession of the premises on the date of givinc Option Notice, the Option Notice shall be totally ineffectiv (iv) if any assignee or sublessee other than a successc Tenant as defined in Section 18.B. is in possession of premise on the date the respective exterded term is to corn Tenant shall have not other right to extend the term of Lease. 0 B. The Amount of the Base Monthly Rental for each ex1 term shall be the greater of (i) the amount of Base Monthly E for the year immediately preceding the commencement c respective exteded term, adjusted as of the commencement ' extended term and adjusted annually during the extend& t reflect change in the cost of living as is set forth in Sect or (ii) the then prevailing rate of Base Monthly Rental charged by Landlord as of the Commencement of the resp extended term for comparable space in the immediate vicir; which the premises are a part, which Base Monthly rental thereafter be adjusted annually to reflect change in the c living as is set forth in Section 8. e EXHIBIT "E" TENWT'S ESTOPPEL - CERTIFICATE a Date: Attention: Re : The undersigned, as Tenant under that certain Lease "Lease") for the abve refer2nced premises (the "Premises") c I 19 , made with Batiquitos Bluf Landlord, hereby cer ti fies that: All work to the Premises has been completed and tl and the Premises are accepted as satisfactory; Tenant is in full and complete possession of the Pri and is fully occupying the same and conducting its 5uz there from; c. Rent under the Lease commenced to accr1 , and has been paid through the d , and no rent credits or other of a. b. I 19 I 19- - have been given by Landlord or taken by Temnt; 0 d. The current rent due under the Lease is equ Dollars ($ ) per month; The Lease is in full force and effect and has no amended, modi fied or suspended other than by amendments , and the I present term of the expi res f. Landlord under the Lease, reimbursed; g. e. e I 19 I 19 - & Tenant has not advanced any amounts to or on be5 for which advance it has no Tenant holds no claim aqiinst Landlord which might off against accruing rentals; Temnt has not sublet the Premises or any portion t nor has Temnt assigned the Lease or any portion thereof: a] h. a Exhibit E Page 2 a j. Tenant understands that will materially rely on the statements made herein.- undersigned acknowledges and agrees that the statements herein are true and complete and may be relied up( and its successors and assigns. (Attach Notary Ackno wl edgment ) a a t EXHIBIT F * OPTION TO EXTEND TERM OPTION TO EXTEND LEASE. A. Temnt is hereby granted successive options to exter term of this Lease, on all of the provisions contained hereir 2 periods of 5 years each (each such period hereinafter ref( to as "extended term") following the expiration of the ini term or of the immediately preceding extended term, as the may be. Each such option is to be exercised by giving wrj notice of exercise of the option exercis e3 ("Option Notice Landlord at least six months, lmt not more than one year, b the expiration of the initial term or of the immedia preceding extended tern, as the case may be; provided, howt that in any of the following events, the exterded term shal commence and this Lease shall expire at the end of the inj term or at the end of the immediately preceding exterded ter the case may be: (i) if Tenant is in default on the da, giving the Option Notice, the Option Notice shall be tot ineffective; (ii) if Tenant is in default on the datc respective extedd term is to commence; (iii) if any assign sublessee other than a successor of Tenant as defined in Se 18.B. is in possession of the premises on the date of givir Option Notice, the Option Notice shall be totally ineffectit (iv) if any assignee or sublessee other than a success Tenant as defined in Section 18.B. is in possession o premise on the date the respective exterded term is to corn- Tenant shall have not other right to extend the term ol Lease. 0 B. The Amount of the Base Monthly Rental for each ex term shall be thegreater of (i) the amount of Base Monthly €or the year immediately preceding the commencement respective extended term, adjusted as of the commencement extended term and adjusted annually during the extend& reflect change in the cost of living as is set forth in Sec or (ii) the then prevailing rate of Base Monthly Rental charged by Landlord as of the commencement of the res] extended term for comparable space in the immediate vici which the premises are a part, which Base Monthly renta: thereafter be adjusted annually to reflect change in the living as is set forth in Section 8. m a- a BAT IQU IT OS 03 WO RAT ION GOVERNANCE OCTOBER 28, 1986 OWERSHIP OF LAND The land at Batiquitos Will be owned by a corporation kno the Batiquitos Corporation. It will be governed by a cha and a Board of Trustees. FEDERAL CCNST ITUT I ON The Board will create a Federal constitution under t individual educational enti ties will retain their self-gove authority. The Batiquitos Corporation wi 11 appoint a president to a liaison between the Batiqui tos Corpratim and the self-gove ed uca ti ona 1 enti ti es . ADVISORY COUNCIL The President shall convene an Advisory Council composed representative from each of the approved educational ent resident at the Batiquitos site, the President, and an appc of the Mayor of Carlsbad. The Advisory Council will me regular intervals and address issues relating to the ovc administration of the educational enterprise, relations be enti ties, provision of services, and Wi 11 make recomrnendatic the Batiqui tos Corpration Board regarding enti ties operati cornternplating operat ion. a INDIVI DUAL EDUCATIONAL ENTITIES Each of the individual educational entities Will be separ incorporated, governed by a Board of Trustees of its own administered by officers named by its own Board. The individual educational entities will exercise all acz and administrative powers and respansibilities oper ati om. relating to 0 .- -. BAT IQUITOS CO RPOFLV ION GOVERNANCE Page 2 e TERMINAT IcbJ OF RELIYT ICNS WIT H EDJCRT ICNAL ENT IT IES Termination of relations with any of the individual educatior entities operating at Batiquitcs will occur as a result of a tbi thirds vote of the Board of the Batiquitos Corporatic contingent on prior lease agreements. a a LEASE BATIQUITOS LAGOON EDUCATIONAL PARK a In consideration of the rents and covenants hereinafter forth, Landlord hereby leases to Tenant, and Tenant hereby re from Landlord, the following described premises upon i fol 1 owing terms and conditions: Article 1 FUNDAMENTAL LEASE PROVISIONS: A. Date: B. Land1 ord: Batiquitos B1 uff, a Cal ifornia Limited Partnersh C. Tenant: Music Conservatory of Southern California, D. Tenant's (Article 7 a Trade Name: Music Conservatory of Exhibit 'IB" E. Premises: (Article 3 a Exhibit I'B A non-profit Corporation, in formation. Southern California Approximately 18,000 square feet of space in the Bui 1 ding One, Bati qui tos Lagoon Educational Park building located at 4000 Windrose Circle, Carlsbad, Calif. F. Lease Term: Eight years (8 years) (Article 4) G. Commencement of Term: (Article 4) 0 Premises are leased subject to completion of work by Landlord, with term commencing upon such certification or when Tenant accepts the premises in writing, or September 1, 1988, which ever occurs earlier. H. Minimum Annual Rental:The parties agree that the tenant has no net obligation for rent. The $324,000 annual rental, plus any increases thereto in accordance with Paragraph A of Article 5, or otherwise shall be funded by an annual gift from a souce to be designated by Landlord and approved in writing by Tenant, said approved being a requirement for the effecti veness of this 1 ease. THREE HUNDRED TWENTY-FOUR THOUSAND Dol 1 ars ($324,000) per annum, payable in twelve (12) equal monthly installments during each year. Rent is $1.50 per square foot per month, triple net. (Article 5A) 1 a In the event the source for funding the rental amount to Tenant does not fund such amount at the time rent is due, Tenant shall not owe any rent for the period, the rent having been deemed forgiven. If non-the-less Landlord or any successor or any other person entity attempts to enforce a payment of rent by Tenant, Landlord shall deed and shall be deemed to have transferred the premises to Tenant in fee ti tl e. 0 I. Cost of Living Adjusament: N.A. J. Rental Deposit: N.A. (Article 5A) K. Percentage Rental: N.A. percent ( %) (Article 5C) L. Address for Notices: M. To Landlord: Batiquitos Bluffs 2650 Camino del Rio North, Suite 100 San Diego, CA 92108 N. To Tenant: To the premises & Music Conservatory of Southern California P.O. Box 2567 Del Mar, CA 92014 (Article 30) 8. Security Deposit: N.A. (Article Dollars ($ N.A. 1. References in this Article 1 to other articles are f convenience and designate some of the other Articles whe references to the particular Fundamental Lease Provisions appez Each reference in this Lease to any of the Fundamental Lea Provisions contained in this Article 1 shall be constructed incorporate all of the terms provided under each such Fundament Lease Provision. In the event of any conflict between a Fundamental Lease Provision and the balance of the Lease, t 1 atter shal 1 control. Article 2 EXHIBITS a The fol lowing drawings and special provisions are attach hereto as exhibits and made a part of this Lease: EXHIBIT "A" - General site plan of an integrated buil di which Landlord and others intend to construct or cause to constructed on real property located in the City, County a State described in Exhibit I'B" and more particularly shown Exhibit ''A", hereinafter referred to as the "Bui 1 ding". Sa site plan shows, among other things, the principal improvemen 0 2 which will comprise said Building. Tenant acknowledges that t site pl an shown on Exhibit "A" is tentative and that Land1 ord m, change the shape, size, location, number and extent of tl improvements shown thereon and el iminate or add any improvemen to any portion of the Building, provided that Landlord shall n change the size or location, shape, number and extent of t improvements of the premises without Tenant's prior writtl consent. This lease is contingent upon written approval of t plans by Tenant. EXHIBIT "B" - Description of the premises, authorized u and Tenant's trade name. EXHIBIT 'IC" - Description of work to be performed i Landlord and by Tenant in or on the premises. EXHIBIT I'D" - Guarantee of Lease. EXHIBIT "E" - Tenant's Estoppel Certificate EXHIBIT "F" - Addendum or Rider EXHIBIT I'G" - Option to Extend Term 0 Article 3 PREMISES . Landlord hereby leases and demises unto Tenant and Tena hereby leases and takes from Landlord, for the term, at t rental, and upon the covenants and conditions hereinafter s forth, the commercial space referred to herein as the "premises and described on Exhibit "B" attached hereto and made a pa hereof. The premises shall be constructed in accordance with t procedures outlined in Exhibit 'IC" attached hereto and made part hereof. Article 4 TERM A. The term of this Lease shal 1 begin as of the da specified in Article 1 hereof, and shall continue thereaft during the Lease Term specified in Article 1 hereof, unle sooner terminated as hereinafter provi ded in thi s Lease. B. If the premises are leased subject to completion of wo by Landlord, Landlord agrees to deliver to Tenant, and Tena agrees to accept from Landlord, possession of the premis forthwith upon substantial completion of the premises described in Exhibit "C" hereof. The term "substanti, completion of the premises" is defined as the date Landlo delivers to Tenant, a certificate of completion from the City Carlsbad. Tenant shall open the premises for business upon su completion. In the event the term of this Lease has n commenced within three (3) years from the date hereof, then th 3 e Lease shall terminate as of said date and each of the parti hereto shall be re1 eased from any further ob1 igation hereunder. C. Within ten (10) days after Tenant opens for busines Tenant will execute and deliver to Landlord a certifica substantially in the form attached hereto, marked Exhibit "E" a made a part hereof, indicating thereon any exceptions there which may exist at that time. Failure of Tenant to execute a deliver such certificate shall constitute an acceptance of t premises and acknowledgment by Tenant that the statemen included in Exhibit ''E" are true and correct, without exceptior D. To the extent Tenant has possession or occupancy of a portion of the premises prior to the commencement of the term this Lease, for any reason whatsoever (e.g., for Tenant instal 1 tenant fixtures or improvements), a1 1 ob1 igations und this Lease (particularly the obligation to maintain liabili insurance) shall commence as of the date of such possession occupancy, excepting only the obligation to pay minimum annul rent shall not commence. Article 5 RENTAL AND TAXES (I) The Tenant agrees to pay as rental for the use and occupan of the premises, at the times and in the manner hereinaft provided, the following sum of money: A. MINIMUM ANNUAL RENTAL. The minimum rental specified Article 1 here shall be payable in twelve (12) equal month installments during each year, in advance, on the first day each calendar month without setoff or deduction with t commencement of the term of this Lease. Shoul d the rental peri commence on a day of the month other than the first day of su month, then the rental for the first fractional month shall computed on a daily basis for the period from the date commencement to the end of such calendar month and at an amou equal to one-three hundred sixtieth (1/360) of the said miniri annual rental for each such day, and thereafter shall be compul and paid as aforesaid. At the end of each 12 month period this Lease, the minimum annual rental shall be increased bj percentage equal to the percentage increase from the base per. of the Consumer Price Index for all Urban Consumers, all itei California, published by the Bureau of Labor Statistics, U Department of Labor. Said Index for the calendar year designa' in Article lH, shall be considered the "base period." In event shall said minimum annual rental be less than the sum ti in effect for the preceding 12 month period. If any time the shall not exist said Consumer Price Index, the parties sha substitute any official index published by the Bureau of Lat Statistics, or successor or similar government agency, as n then be in existence and shall be most nearly equivalent there If the parties shal 1 be unabJe to agree upon a successor indt the parties shall refer the choice of a successor index 0 4 a arbitration in accordance with the rules of the American Arbitration Association. It is the intent of this provision that the foregoing rental adjustment procedures shal 1 occur effective as of the first day of the month of each 12 month period during 0 this Lease term. B. TAXES (1) Throughout the term of this Lease, Tenant agrees to pay to Landlord, as additional rent, the amount of taxes and assessments levied and assessed for any such year upon the premises and the underlying realty. Such additional rent for any partial year of the term hereof shall be prorated on a time basis. Payment shall be made by Tenant within thirty (30) days after receipt of a written statement from Landlord setting forth the amount of such tax. (2) The term "Floor Area", as used throughout this Lease shall be deemed to mean and include all areas for the exclusive use and occupancy by tenants or subtenants of Landlord, measured from the exterior surface of exterior walls (and from the extensions thereof, in the case of openings) and from the center of interior demising partitions, including mezzanines, warehousing or storage areas, clerical or office areas and employee areas. (3) In the event the premises and underlying realty are not separately assessed but are part of a larger parcel for assessment purposes (hereinafter referred to as the "1 arger parcel"), "taxes and assessments 1 evied and assessed upon the @ premises and the underlying realty" shall mean a fractional portion of said taxes and assessments on the larger parcel (excluding taxes and assessments on any common areas thereon) the numerator of which shall be the Floor Area of the premises and denominator of which shall be the Floor Area of all the areas available for exclusive use and occupancy by tenants of the larger parcel , whether or not actual ly occupied and open for business, provided that na equitable adjustment shal 1 be made for buildings which are only partially completed on the date such taxes and assessments become a lien. With respect to any assessments which may be levied against or upon the premises an( the underlying realty, or which under the laws then enforce ma) be evidenced by improvement or other bonds, or may be paid ir annual installments, only the amount of such annual installment: (with appropriate proration for any partial year) and statutory interest shall be included within the computation of the annual taxes and assessments levied against the premises and thf underlying real ty . (4) If at any time during the Lease Term under the laws o the United States Government, State, County, or City or an. political subdivision thereof in which the premises are situated a tax or excise on rent or any other tax however described i levied or assessed by any such political body, against Landlor on account of rentals payable to landlord hereunder, such tax o 5 e excise shal 1 be considered "taxes" for the proposes of th Article 58, excluding, however, from such tax or excise a general income taxes, gift taxes, inheritance taxes and esta taxes. The term "taxes" shall a1 so incl ude possessory intere taxes levied in lieu of real property taxes. Article 6 TIMING OF OCCUPANCY The schedule for completion of the facilities is as follows: 0 1. Execution of lease November 5, 1986. At the end of four years, if the Music Conservato budget is not balanced, it would then be the perogati of Sammis Properties to cancel this 1 ease upon 90 da written notice of Tenant. 2. Completion of detailed preliminary plans a specifications - December 15, 1986. The recital hall of the Music Conservatory seati approximately 250 persons could be located in anothl part of the Batiquitos Lagoon Educational Park and us for other purposes. The parties will develop a mutual agreement on the hou of joint usage of the recital hall. 2a. Approval of preliminary plans and specifications I Tenant - December 30, 1986. 3. Completion of final plans and specifications - Janua 1, 1987. 3a. Approval of final plans and specifications by Tenant 3b. Submission by Tenant to Landlord of written committmen r. January 20, 1987. or fi nanci a1 support of Tenant total i ng $100,000 June, 1987. 4. Commencement of construction - February 15, 1987. 5. Completion of premises and occupancy - June 15, 198 ARTICLE 7 POSSESSION AND USE A. Possession of the premises shall be delivered to Tenat free and clear of all tenants and occupants and the rights either, and also free of liens and encumbrances, except those a: may be specified in Article 10 hereof. Tenant shall use 1 6 e premises solely for the purposes and under the trade na specified in Exhibit IIB" attached hereto. Tenant shall not u or permit the premises to be used for any other purpose purposes or under any other trade name whatsoever without t written consent of Landlord first had and obtained. During sa term the premises, and every part thereof, shall be kept Tenant in a clean and wholesome condition, free of a objectionable noises, odors or nuisances, and that all health a police regulations shall, in all respects and at all times, fully complied with by Tenant. B. Tenant shall use its best efforts to complete, or cau to be completed, a1 1 deliveries, loading, unloading and servic to the premises prior to 1O:OO A.M. of each day. Tenant sha' attempt to cause no delivery trucks or other vehicles servici the premises to park or stand in front of, or at the rear of, t premises from 1O:OO A.M. to 9:00 P.M. of each day. The Landlo reserves the right to further regulate the activities of t Tenant in regard to deliveries and servicing of the premises, a Tenant agrees to abide by such further non-discriminato regul ations of Land1 ord. C. Tenant shal 1 not do or permit anything to be done in about the premises nor bring or keep anything therein which not within the permitted use of the premises which wil 1 in a way increase the existing rate of or affect any fire or 0th insurance upon the premises or any of its contents, or cause cancellation of any insurance policy covering the building or a part thereof of any of its contents. Tenant shall not do permit anything to be done in or about the premises which wil 1 any way obstruct or interfere with the rights of other tenants occupants injure or annoy them or use or a1 1 ow the premises to used for any improper, immoral, unlawful or objectionab purpose; nor shall Tenant cause, maintain or permit any nuisan in, on or about the premises, it being understood that Tena shall use the premises for operation for a Music Conservatory a Landlord acknowledges that certain traffic and noise will generated consistent with that use. Tenant shall not commit allow to be committed any waste in or upon the premises. Tena shall not use the premises, or permits anything to be done in about the premises, which will in any way conflict with any la statute, ordinance or governmental rule or regulation now force or which may hereafter be enacted or promulgated. Tena shal 1, at its sole cost and expense, promptly comply with a' 1 aws, statutes, ordinances and governmental rules, regulations requirements now in force or which may hereafter be in force a with the requirements of any board of fire underwriters or 0th simil ar bodies now or hereafter constituted re1 ating to affecting the conditions, use or occupancy of the premise excluding structural changes not related to or affected I Tenant's improvements or acts. The judgment of any court competent jurisdiction or the admission of Tenant in any acti against Tenant, whether Landlord be a party thereto or not, th Tenant has violated any 1 aw, statue, ordinance or governmenti rule, regulation or requirement, shall be consulted of that fa @ (. 7 a as between the Landlord and Tenant. Article 8 (m UTILITIES SERVICES Tenant agrees, as its own expense, to pay for all wate gas, power, electric current, telephone, and all other simila uti1 ities used by the Tenant on the premise from and after t delivery of possession thereof by Landlord. If any such charg are not paid when due, Landlord may pay the same, and any amou so paid by Landlord shall thereupon become due to Landlord fr Tenant as additional rent. Article 9 INDEMNITY - INSURANCE - WAIVER OF SUBROGATION A. Tenant covenants with Landlord that Landlord shall n be liable for any damage or liability of any kind or for a injury to or death of person or damage to property of Tenant o any other person during the term of this Lease, from any cau whatsoever, by reason of the use, occupancy and enjoyment of t premises by Tenant or any person thereon or holding under Tenan and that Tenant wil 1 indemnify and save harm1 ess the Landl o from all liability whatsoever, on account of any such real claimed damage or injury and from all liens, claims and deman arising out of the use of the premises and its facilities, or a repairs or alterations which Tenant may make upon said premis but Tenant shall not be liable for damage or injury occasioned the negligence of Landlord and its designated agents, servants employees unless covered by insurance Tenant is required provide. This obligation to indemnify shall include reasonab attorneys' fees and investigation costs and a1 1 other reasonab costs, expenses and liabilities from the first notice that a cl aim or demand is to be made or may be made. B. Landlord and Tenant hereby waive any rights each m have against the other on account of any loss or dama occasioned to Landlord or Tenant, as the case may be, the respective property, the premises, or its contents or to 0th portions of the building arising from any risk covered by fi and extended coverage insurance; and the parties each, on beha of their respecti ve insurance companies insuring the property either Landlord or Tenant against any such loss, waive any rig of subrogation that it may have against the Landl ord or Tenan as the case may be. The foregoing waivers of subrogation sha be operative only so long as they do not invalidate any su policy. C. Tenant further covenants and agrees that from and aft the substantial completion of the premises, Tenant will carry a maintain, at its sole cost and expense, the following types insurance, in the amounts specified any in for form hereinafte provided for: @ 8 a (i) PUBLIC LIABILITY. Bodily injury liabili insurance with limits of not less than Five Hundred Thousa Dollars ($500,000.00) per person and One Million Dolla ($1,000,000.00) per occurrence insuring against any and a 1 iabil ity of the insured with respect to said premises arising out of the maintenance, use or occupancy thereof, a property damage 1 iabil i ty insurance with a 1 imited of n 1 ess than Two Hundred Fifty Thousand Dol 1 ars ($250,000.0 per accident or occurrence. All such bodily injury liabili insurance and property damage 1 iabil ity insurance sha specifical ly insure the performance by Tenant of t indemnity agreement as to liability for injury to or death persons and injury or damage to property in this Article contained. (ii) TENANT IMPROVEMENTS. Insurance covering a1 1 the items specified as "Tenant's Work" in Exhibit 'IC Tenant's 1 easehol d improvements, a1 terations, additions improvements permitted under Article 11, trade fixture merchandise and personal property from time to time in, on upon the premises, in an amount not less than eighty perce (80%) of their full replacement cost from time to time duri the term of this Lease, providing protection against a peril included within the classification "Fire and Extend Coverage", together with insurance against sprinkl er damas vandal ism and mal icious mischief. Any pol icy proceeds sha be used for the repair or replacement of the property dama or destroyed unless this Lease shall cease and termina under the provisions of Article 18 hereof. (iii) POLICY FORM. All policies of insurance provid for herein shall be issued by insurance companies, wi general policy holders' rating of not less than A and financial rating of Class X as rated in the most curre avail ab1 e "Best's" Insurance Reports, and qual ified to business in the State where the building is situated, a shall be issued in the names of Landlord and Tenant, whi policies shall be for the mutual and joint benefit a protection of Landlord and Tenant, and executed copies such policies of insurance or certificates thereof shall delivered to landlord within ten (10) days after delivery possession of the premises to Tenant and thereafter with thirty (30) days prior to the expiration of the term of ea such policy. All public liability and property dama policies shal 1 contain a provision that Land1 ord, a1 thou named as an insured, shall nevertheless be entitled recovery under said policies for any loss occasioned to i its servants, agents and employees by reason of t negligence of Tenant. As often as any such policy sha' expire or terminate, renewal or additional policies shall procured and maintained by Tenant in 1 ike manner and to 1 i extent. All policies of insurance delivered to Landlord mu contain a provision that the company writing said policy wi give to Landlord twenty (20) days notice in writing 9 a (0 e advance of any cancel 1 ation or 1 apse or the effective date 01 any reduction in the amounts of insurance. All publi 1 iabil ity, property damage and other casualty policies shal be written as primary policies, not contributing with and no in excess of coverage which Landlord may carry. To th extent Landlord's lender or ground lessor, if any, s requests, said lender and lessor shall also be named a additional insureds and shall be given the notices to th same extent as Landlord is entitled. D. Notwithstanding anything to the contrary containe within this Article 9, Tenant's obligations to carry tt- insurance provided for herein may be brought within the coveragz of a so-called blanket policy, or policies of insurance carrit and maintained by Tenant, provided, however, that Landlord shal be named as an additional assured thereunder as its interest mr appear and that the coverage afforded Landlord will not ti reduced or diminished by reason of the use of such blanket polic of insurance, and provided further that the requirements sz forth herein are otherwise satisfied. Tenant agrees to permi Landlord at all reasonable times to inspect the policies I insurance of Tenant covering risks upon the premises for whic pol ici es or copies thereof are not required to be del i vered 1 Landl ord. E. Landlord shall at all times during the term here( maintain in effect a policy or policies of insurance coverii the building of which the premises are a part, in an amount nc less than eighty percent (80%) of full replacement co! (exclusive of the cost of excavations, foundations and footing from time to time during the term of this Lease or the amount I such insurance Landl ord's mortgage 1 ender requires Landl ord maintain, whichever is the greater, providing protection again any peril generally included within the classification "Fire a Extended Coverage," together with insurance against sprinkl damage, vandal ism and malicious mischief. Landlord's ob1 igati to carry the insurance provided for herein may be brought with the coverage of any so-called blanket policy or policies insurance carried and maintained by Landlord, provided that t coverage afforded wil 1 not be reduced or diminished by reason the use of such blanket policy of insurance. Tenant agrees pay Landlord as additional rent, during each year or partial ye of the term of this Lease, the cost to Landlord of the insuran required to be maintained by Landlord on the premises und Article 9E for each such year or partial year. Such addition rent for any partial year of the term hereof shal 1 be prorated a time basis. Payment shall be made by Tenant within fifte (15) days after receipt of a written statement from Landlo setting forth the cost of such insurance and showing reasonabl e detail the manner in which it has been computed. the event the cost to the Landlord of the insurance it required to maintain on the premises under said Articl e 9E is n separately charged to Landlord by its insurance carrier, t portion applicable to the premises of the cost of such insurar shall be that proportion of such cost which the Floor Area of t a 10 10 0 premises bears to the Floor Area of a1 1 the areas avail able for exclusive use and occupancy by tenants of the building, whethei or not actually occupied and open for business covered by sucli i nsurance. Article 10 TITLE OF LANDLORD e Landlord covenants that as of the date hereof there are nc liens upon its estate other than (a) the effect of covenants conditions, restrictions, easements, ground lease(s1, if any, anc mortgages of record, and other rights of way of record; (b) tht effect of any zoning laws of the City, County and State where thc building is situated, and (c) general and special taxes no. del inquent. Tenant agrees that as to its 1 easehol d estate it and all persons in possession or holding under it, will conforr to and will not violate the terms of any of the aforementionel matters of record, or any other matters of record. Article 11 TENANT'S RIGHTS TO MAKE ALTERATIONS A. Landlord agrees that Tenant may, at its own expense an after giving Landlord notice in writing of its intention to d so, from time to time during the term hereof, make alterations additions and changes in and to the interior of the premise (except those of a structural nature) as it may find necessary o convenient for its purposes, provided that the value of th premises is not thereby diminished, and provided, however, tha no alterations, additions or changes costing in excess of Tw Thousand Five Hundred Dol 1 ars ($2,500.00) may be made withou first procuring the approval in writing of Landlord. I addition, no alterations, additions or changes shall be made t any store front , the exterior walls or roof of the premises, no shal 1 Tenant erect any mezzanine or increase the size of same, i one be initially constructed, unless and until the writte consent and approval of Landlord shall first have been obtainec In no event shall Tenant make or cause to be made any penetratio through the roof of the premises without the prior writte approval of Landlord. Tenant shall be directly responsible fc any and all damages resulting from any violation of th provisions of this Article. all alterations, additions, c changes to be made to the premises which require the approval ( Landlord shall be under the supervision of a competent architec or competent 1 icensed structural engineer and made in accordanc with Plans and Specifications with respect thereto, approved i writing by Landlord before the commencement of work, where SUC approval is required pursuant to the provisions of this Articll All work with respect to any alterations, additions, and change must be done in a good and workmanlike manner and diligent1 prosecuted to compl etion to the end that the premises shal 1 l all times be a complete unit except during the period of wor 1() 11 a Upon completion of such work, Tenant shal 1 file for record in t office of the County Recorder where the building is located Notice of Completion as permitted by the law. Upon terminati of the Tenant's 1 easehol d estate such a1 terations, additions a improvements shall be performed and done strictly in accordan with the laws and ordinances relating thereto. In performing t work of any such alterations, additions or changes, Tenant sha have the work performed n such a manner as not to obstruct t access to the premises of any other tenant in the buil ding. B. In the event that Tenant shall make any permitt a1 terations, additions or improvements to the premises under t terms and provisions of this Article 11, Tenant agrees upon i part to carry such insurance as required by Article 9C (i covering any such alteration, addition or improvement, it bei expressly understood and agreed that none of such a1 teration additions or improvements shall be insured by Landl ord under su insurance as it may carry upon the bui 1 ding of which the premi s are a part, nor shall Landlord be required under any provisio for reconstruction of the premises to reinstall any su a1 terations, improvements or additions. this Lease, Tenant shall remove any or a1 1 of the improvemen constructed or instal 1 ed by Tenant on the premises,except initi, tenant improvements as defined herein, with Tenant repairing a damages to the premises caused by such removal. Article 12 @ MECHANICS' LIENS @ C. At Landlord's option upon termination or expiration A. Tenant agrees that it wil 1 pay or cause to be paid a costs for work done by it or caused to be done by it on t premises, and Tenant wil 1 keep the premises free and clear of a' mechanics' liens and other liens on account of work done f Tenant or persons claiming under it. Tenant agrees to and sha' indemnify, defend and save Landlord free and harmless again liability, loss, damage, costs, attorneys' fees, and all 0th expenses on account of claims of lien of laborers or materialm or others for work performed or materials or supplies furnish for the Tenant or persons claiming under it. B. If Tenant shal 1 desire to contest any claim of 7 ien, i shall furnish Landlord adequate security of the value ore in tl amount of the claim, plus estimated costs and interest, or a boi of a responsible corporate surety in such amount conditioned ( the discharge of the lien. If a final judgment establishing ti validity or existence of a lien for any amount is entered, Tenai shall pay and satisfy the same at once. C. If Tenant shall be in default in paying any charge f( which a mechanics' lien claim and suit to foreclose the lien ha\ been filed, and shall not have given Landlord security to protec the property and Landl ord against such cl aim of 1 ien, Landlot 12 0 may (but shall not be so required to) pay the said claim and i costs, and the amount so paid, together with reasonab attorneys' fees incurred in connection therewith, shal 1 immediately due and owing from Tenant to Landlord, and Tena shall pay the same to Landlord with interest at the maxim lawful rate from the dates of Landlord's payments. Should a claims of lien be filed against the premises or any acti affecting the title to such property be commenced, the par receiving notice of such liens or action shall forthwith give t other party written notice thereof. Landlord or i representatives shall have the right to go upon and inspect 1 premises at all reasonable times and shall have the right to pc and keep posted thereon notices of non-responsibility, or su other notices which the Landlord may deem to be proper for t protection of Landlord's interest in the premises. Tenant shal before the commencement of any work which might result in a such lien, give to Landlord written notice of its intention to so in sufficient time to enable the posting of such notices. Article 13 ADVERTISING SIGNS Tenant shal 1 not uti1 ize any sign on or about the premises exce as has been approved by Landlord. Tenant shall not affix yai 8 ta 1 f h r R o 9 4t 9 % c%le%s b P 'ann%' $?r?d 8# fp o 688 r ! f aihde f?@ 'ey i 1 $? wal 1 s of, the premises, any signs, advertising pl acards, name insignias, trademarks, descriptive material or any other su like item or items except such as shall have first received t: written approval of Landlord as to size, type, color, locaticr II) copy, nature and display qualities. Anything to the contrary this Lease notwithstanding, Tenant shall not affix any sign the roof of the premises. In addition, no advertising medi shall be utilized by Tenant which can be heard or experienc outside Tenant's premises, including without limiting t generality of the foregoing, flashing lights, search light 1 oudspeakers, phonographs, radios or television. Tenant sha not display, paint or place or cause to be displayed, painted pl aced, any handbi 11 s, bumper sti ckers or other adverti si devices on any vehicle parked in the parking area of t Building, whether belonging to Tenant, or to Tenant's agent, to any other person; nor shall Tenant distribute, or cause to distributed, in the Bui 1 ding, any handbi 11 s or other adverti si devices, and in the event of a violation of this covenant ' Tenant, Tenant shall pay to Landlord the cost and expen necessary to remove any such unauthorized material from t Bui 1 di ng. Article 14 FIXTURES AND PERSONAL PROPERTY @ A. Any trade fixtures, signs and other personal property Tenant not permanently affixed to the premises shall remain t property of Tenant and Landlord agrees that Tenant shall have t e 13 right, provided Tenant be not in default under the terms of this Lease, at any time, and from time to time, to remove any and all of its trade fixtures, sign and other personal property which it may have stored or installed in the premises, including but not (I) imiting the same to counters, shelving, showcases, mirrors and other movable personal property. Nothing in this Articl e contained shal 1 be deemed or construed to permit or a1 low Tenant to remove so much of such personal property, without the immediate rep1 acement thereof with simil ar personal property of comparable or better quality, as to render the premises unsuitable for conducting the type of business specified in Exhibit I'B" attached hereto. Tenant at its expense shall immediately repair any damage occasioned to the premises by reason of the removal of any such trade fixtures, signs, and other personal property, and upon the last day of the Lease Term or a date of earlier termination of this Lease, shall leave the premises in a neat and clean condition, free of debris. A71 trade fixtures, signs and other personal property installed in or attached to the premises by Tenant must be new when so installed or attached. B. All improvements to the premises by Tenant, including but not limited to light fixtures, floor coverings and partitions, but excluding trade fixtures and signs, shall become the property of Landl ord upon expiration or earl fer termination of this Lease. C. Tenant shall pay before delinquency all taxes, assessments, license fees and public charges levied, assessed or imposed upon its business operation, as we1 1 as upon its trade fixtures, lease-hold improvements (including, but not limited to, those Tenant is required to make in accordance with the provi sions of Exhibit "C" hereof), merchandise and other personal property in, on or upon the premises. In the event any such items of property are assessed with property of Landl ord, then, and in such event, such assessment shall be equitably divided between Landlord and Tenant to the end that Tenant shall pay only its equi tab1 e proportion of such assessment. Landl ord shal 1 determine the basis of prorating any such assessments and such determination shall be binding upon both Landlord and Tenant. No taxes, assessments, fees or charges referred to in this paragraph shall be considered as taxes under the provisions of Article 5 hereof. Article 15 ASSIGNING, MORTGAGING, SUBLETTING, CHANGE IN CORPORATE OWNERSHIP A. Tenant shall not transfer, assign, sublet, enter into 1 icense or concession agreements, change ownership, mortgage or hypothecate this Lease or Tenant's interest in and to the premises without first procuring the written consent of Landl ord. Any attempted transfer, assignment, sub1 etting, license or concession agreement, change of ownership, mortgage or hypothecation without Landl ord's written consent shall be void 14 e 6 and confer no rights upon any third person. Without in any w limiting Landlord's rights to refuse to give such consent for a other reason or reasons, Landlord reserves the right to refuse give such consent unless Tenant remains fully liable during t unexpired term of the Lease and Landlord further reserves t right to refuse to give such consent if in Landlord's reasonab business judgment the quality of merchandising operation is may be in any way adversely affected during the term of t Lease or the financial worth of the proposed new tenant is le than that of the Tenant executing this Lease or of Tenant a Tenant's Guarantor as the case may be. Tenant agrees reimburse Landl ord for for Landl ord's reasonable attorney fe incurred in conjunction with the processing and documentation any such requested transfer, assignment, subl etting, 1 icensing concession agreement, change of ownership, mortgage hypothecation of this Lease or Tenant's interest in and to t premises. B. Each transfer, assignment, subl etti ng, 1 icens concession agreement, mortgage and hypothecation to which the has been consent shall be by an instrument in writing in fo satisfactory to Landlord and shall be executed by the transferc assignor, subl essor, 1 icensor, concessionaire, hypothecator mortgagor and the transferee, assignee, sublessee, license concessionaire or mortgagee in each instance, as the case may t and each transferee, assignee, subl essee, license concessionaire or mortgagee shall agree in writing for t benefit of Landlord herein to assume, to be bound by, and perform the terms, covenants and conditions of this Lease to done, kept and performed by Tenant, including the payment of a amounts due or to become due under this Lease directly Landlord. One executed copy of such written instrument shall delivered to Landlord. Failure to first obtain in writi Landlord's consent or failure to comply with the provisions this Article shall operate to prevent any such transfe assignment, subl etting, 1 icense, concession agreement, mortga or hypothecation from becoming effective. C. If a Tenant hereunder is a corporation (except corporation whose stock is traded on the NYSE or the AMEX), or an unincorporated association or partnership, the transfe assignment or hypothecation of any stock or interest in su corporation, association or partnership in the aggregate excess of twenty-five percent (25%) shall be deemed an assignme within the meaning and provisions of this Article 15. Article 16 TENANTaS CONDUCT OF BUSINESS a) 0 A. Tenant covenants and agrees that, continuously a uninterruptedly from and after its i ni ti a1 opening for busi ne! it will operate and conduct within the premises the busine which it is permitted to operate and conduct under the provisic hereof, except whil e the premises are untenantabl e by reason 15 e fire or other casualty, and that it wil 1 at a1 1 times keep ar maintain within and upon the premises and adequate stock ( merchandise and trade fixtures to service and supply the USUZI and ordinary demands and requirements of its customers and th, it will keep its premises in a neat, clean and orderlyconditio Tenant agrees that all trash and rubbish of the said Tenant shal only be deposited within receptacles as provided by Landlord ar that there shall be no other trash receptacles permitted I remain outside of the premises. Landlord agrees to cause suc receptacles to be emptied and trash removed at Tenant's cost air expense as part of the common area expenses. B. Tenant shall faithfully observe and comply with t rules and regulations that Landlord shall from time to til promul gate and/or modify. The rules and regulations shal 1 I binding upon the Tenant upon delivery of a copy of them Tenant. Landlord shall not be responsible to Tenant for t nonperformance of any said rules and regulations by any othl tenants or occupants. A1 1 such rul es and regulations shall non-discriminatory and shal 1 be appl icabl e to a1 1 users a tenants of the Building. Article 17 REPAIRS AND MAINTENANCE * A. Tenant agrees at all times, from and after substanti completion of the premises, and at its own cost and expense, repair, rep1 ace and maintain a good and tenantabl e condition t premises and every part thereof, excluding the roof, exteri walls, structural parts of the premises and structural flo (floor covering, incl uding carpeting, terrazzo or other speci flooring installed by or at the request of Tenant, to maintained by the Tenant), and including without limitation t utility meters, pipes and conduits, a1 1 fixtures, a conditioning and all Tenant's signs, locks and closing devict and all window sash, casement or frames, door and door frame and all such items of repair, maintenance and improvement reconstruction as may at any time or from time to time required by government agency having jurisdiction there( Landlord wil 1 contract with a service company for month maintenance of the heating and air conditioning equipment on t roof and Tenant shall pay Landlord for this service on a montt basis. B. Subject to the foregoing provisions hereof, the Landlr shall keep and maintain in good and tenantable condition i repair, the roof, exterior walls, structural parts of i premises and structural floor, pipes and conduits outside I premises for the furnishing to the premises of various util it. (except to the extent that the same are the obligation of 1 appropriate pub1 ic util ity company); provided, however, ti Land1 ord shal 1 not be required to make repairs necessitated reason of the negligence of Tenant or anyone claiming un Tenant, or by reason of the failure of Tenant to perform @ 16 0 observe any conditions or agreements in this Lease contained, cause by a1 terations, additions, or improvements made by Tena or anyone claiming under Tenant. Anything to the contra notwithstanding contained in this Lease, Landl ord shall not any way be 1 iabl e to Tenant for fail ure to make repairs as here specifically required of it unless Tenant has previously notifi Landlord, in writing, of the need for such repairs and Landlo has failed to commence making repairs within 30 days aft receipt of such notice and to compl ete said repairs within reasonable period of time following receipt of Tenant's writt notification. Any costs Landlord incurs from time to time connection with the maintenance and repair of the premises above provided shall be billed by Landlord to Tenant and up receipt of such bil 1 ings Tenant shall immediately reimbur Landl ord for said costs. C. If Tenant refuses or neglects to make repairs and/ maintain the premises, or any part thereof, in a mann reasonabl e satisfactory to Landl ord, Landl ord shal 1 have t right, upon giving Tenant reasonable written notice of i election to do so, to make such repairs or perform su maintenance on behalf of and for the account of Tenant. In SLI event such work shall be paid for the Tenant as additional re promptly upon receipt of a bill therefor. D. As used in this Article the expression "exterior wall shall not be deemed to include store front or store fronts, pl;i glass, window cases or window frames, doors or door frame! security grilles or similar enclosures. It is understood a agreed that Landlord shal 1 be under no ob1 igation to make a repairs, a1 terations, renewals, rep1 acements or improvements and upon the premises or the mechanical equipment exclusive serving the premises at any time except as in this Lea expressly provided. E. Upon any surrender of the premises, Tenant sha redeliver the premises to Landlord in good order, condition i state or repair, ordinary wear and tear excepted, and excepti such items of repair as may be Landlord's obligation hereunder Article 18 RECONSTRUCTION 0 0 A. In the event the premises be damaged by fire or ott perils covered by Landl ord's fire and extended covera insurance, Landlord shall: (i) Within a period of ninety (90) days thereaftt commence repair, reconstruction and restoration of said premis and prosecute the same diligently to completion, in which evt this Lease shall continue in full force and effect; or (ii 1 In the event of a partial or total destructic: 17 a of the premises during the last three (3) years of the tei hereof, Landlord and Tenant shall each have the option terminate this Lease upon giving written notice to the other 1 exercise thereof within thirty (30) days after such destructio For purposes of this paragraph (ii), "partial destruction" sha' be deemed a destruction to an extent of at least thirty-three ai one-third percent (33-1/3%) of the then full replacement cost the premises as of the date of destruction. B. In the event the premises shall be damaged as a resu' of any flood, earthquake, act of war, nuclear reaction, nucle radiation or radioactive contamination, or from any oth!! casualty not covered by'Landl ord's fire and extended covera! insurance, to any extent whatsoever, Landlord may within nine (90) days following the date of such damage, commence repai reconstruction or restoration of said premises and prosecute t same diligently to completion, in which event this Lease sha'l continue in full force and effect, or within said ninety-dl period elect not to so repair, reconstruct or restore sa premises in which event this Lease shall cease and terminate. either such event Landl ord shal 1 gi ve Tenant written notice its intention within sai d ni nety-day peri od. C. In the event of any reconstruction of the premises und this Article 18, said reconstruction shal 1 be in stri conformity with the provisions of Exhibit 'IC" hereof and to t extent of the work as therein set forth as "Description Landl ord's Work" and "Description of Tenant's Work Notwithstanding that a1 1 reconstruction work shal 1 be perform by Land1 ord's contractor unl ess Land7 ord shall otherwise agr in writing, Landlord's obligation to reconstruct the premis shall be only to the extent of the work as described "Description of Landl ord's Work" in Exhibit "C" hereof; Tenan at its sole cost and expense, shall be responsible for the repa and restoration of all items set forth as Tenant's Work in sa Exhibit 'IC" and the replacement of its stock in trade, tra fixtures, furniture, furnishings and equipment. Tenant sha commence instal 1 ation of fixtures, equipment and merchandi hereof promptly upon delivery to it of possession of the premis and shall dil igently prosecute such instal 1 ation to completion. D. Upon any termination of the Lease under any of t provisions of this Article, the parties shall be released there without further ob1 igations to the other party coincident wi the surrender of possession of the premises to the Landlor except for items which have theretofore accrued and be th unpaid. In the event of termination for reason of damage by fi or other perils and such damage is covered by Tenant's fire a extended coverage insurance under Article 9C (iv), all su proceeds covering the items specified as "Tenant's Work" Exhibit "C", and Tenant's 1 easehol d improvements, but excl udi proceeds for trade fixtures, merchandise, signs and 0th personal property, shall be disbursed and paid to the Landlord, E. In the event of repair, reconstruction and restorati @ @ 18 e as herein provided, the minimum annual rental provided to be pai under Article 1 hereof shall be abated proportionately with tti degree in which the Tenant's use of the premises is impaire commencing from the date of destruction and continuing during tti period of such repair, reconstruction or restoration. Tenari shall continue the operation of its business on the premise during any such period to the extent reasonably practicable fro the standpoint of prudent business management; and the obligatio of Tenant hereunder to pay percentage rental and additional rental shall remain in full force and effect. F. In the event of any damage to the premises, Tenant shal give to Landlord written notice of such damage within 5 dajf after its occurrence. Article 19 COMMON AREAS AND AUTOMOBILE PARKING A. Landlord shal 1 provide up to a maximum of 77 parkiir spaces. If during the term of the lease Tenant, on a regul( basis, requires additional parking, Land1 ord shal 1 agree provide additional parking spaces in which Tenant shall pay Fif ($50.00) per space, per month in 1986 Dollars, plus C.P. adjustment every year. otherwise specifically provided in this Lease, authorize empowered and pri vi1 eged to use the common areas in common wi other persons during the term of this Lease. Landlord agree without cost or expense to Tenant, to construct or cause to I constructed, the common areas generally upon the area shown the site plan attached hereto and marked Exhibit "A", and maintain and operate, or cause to be maintained and operat (except as hereinafter provided with reference to cost mai ntenance), said common areas at a1 1 times foll owing compl eti thereof, for the benefit and use of the customers and patrons Tenant, and of other tenants, owners, and occupants of the la constituting the Building of which the premises are a part. C. Landlord shall keep or cause to be kept said comm areas in a neat, clean and orderly condition, properly 1 ight and landscaped, and shall repair any damage to the faciliti thereof, but a1 1 expenses in connection with said common are shall be charged and prorated in the manner hereinafter s forth. It is understood and agreed that the phrase "expenses connection with said common areas" as used herein shall construed to incl ude, but not be 1 imi ted to, a1 1 sums expended connection with said common areas for a1 1 general maintenance i repairs, resurfacing, or painting, restriping, cleaning, tra removal, sweeping and janitorial services, maintenance a repair of si dewal ks, curbs, and bui 1 ding signs; spri nkl systems, plant and landscaping; lighting and other utilitil di rectional si gns and other markers and bumpers; maintenance I repair of any fire protection systems, lighting systems, stc B. Tenant and its employees and invitees are, except 19 a drainage systems and any other utility systems; personnel 1 imp1 ement such services incl uding, if Landl ord deems necessar! the cost of security guards; real and personal property taxei possessory interest taxes, and assessments on the improvemenl and land comprising said common areas; any governmenta imposition or surcharge imposed against Landl ord or assessc against the automobile parking area of any other portion of ti. common area; depreciation on maintenance and operating machinet and equipment (if owned) and rental paid for such machinery ar equipment (if rented), adequate publ ic 1 iabil ity and propert damage insurance on the common areas (under which Tenant shall t named as an additional assured). In addition, "expenses in connection with said common area! shall incl ude costs for the accounting, bookkeeping an collection of the expenses in connection with said common arel in an amount equal to ten percent (10%) of Tenant's pro ra share of the total of the aforementioned expenses for ea(/ calendar year. Landlord may cause any or all of said services be provided by an independent contractor or contractor Anything to the contrary notwithstanding contained hereinabov all expenses in connection with the original construction ai installment of the common areas shall be at the sole cost ai expense of Landlord and shall not in any event be charged to t Tenant. D. Tenant shall not be responsible for any common arc expenses; instead Landl ord shal 1 pay Tenant's prorata share 1 such expenses and hold Tenant harmless from any such charge. (i) From and after the date the term of this lease ( proved for in Article 1 hereof has commenced, but subject adjustment as hereinafter in this subparagraph (i) provide Tenant shall pay Landlord on the first day of each calendar mon of the term of this Lease an amount estimated by Landl ord to Tenant's pro rata share of such common area expenses. Landlo may adjust the estimated monthly charge at the end of a calendar quarter on the basis of Landlord's experience a reasonably anticipa,ted costs. (ii) Within thirty (30) days following the end of ea calendar quarter or, at Landl ord's option, each cal endar yea Landlord shall furnish Tenant a statement covering the calend quarter or year just expired, certified as correct by a certifi publ ic accountant or an authorized representative of Landl or showing the total operating cost, the amount of Tenant's p rata share of such common area expenses for such calendar quart or year and the payments made by Tenant with respect to su period as set forth in subparagraph (i). If Tenant's pro ra share of such common area expenses exceeds Tenant's payment made, Tenant shal 1 pay Landlord the deficiency within ten (I days after receipt of such statement. If said payments exceed offset the excess against payments next thereafter to become c Landlord as set forth in said subparagraph (i). 0 0 20 a (iii) Tenant's pro rata share of the total common ar expenses for the previous calendar quarter or year shall be th portion of all of such expenses which is equal to the proporti thereof which the number of square feet of Floor Area in t premises bears to the total number of square feet of Floor Ar of buildings in the entire Building which are from time to ti occupied and open for business as of the commencement of ea calendar quarter. There shal 1 be appropriate adjustment Tenant's share of the common area expenses as of the commenceme and expiration of the term of this Lease. F. Landlord shall at all times have the right and privile of determining the nature and extent of the common areas, and making such changes therein and thereto from time to time whi in its opinion are deemed to be desirable and for the be interests of all person using said common areas, including t 1 ocation and re1 ocation of dri veways, entrances, exit automobile parking spaces, the direction and flow of traffi instal 1 ation of prohibited areas, 1 andscaped areas, and a1 1 0th facilities thereof. G. Nothing contained herein shal 1 be deemed to create a liability upon Landlord for any damage to motor vehicles customers or employees or for loss of property from within su motor vehicles, unless caused by the negligence of Landlord, i agents, servants or employees. H. Landlord shall also have the right to establish, a from time to time change, alter and amend, and to enforce again Tenant and the other uses of said common areas such reasonab' rules and regulations other than additional financial charg (including the exclusion of employees' parking therefrom) as m be deemed necessary or advisable for the proper and efficie operation and maintenance of said common areas. The rul es a regul ations herein provided may incl ude, without 1 imitation, t hours during which the common shall be open for use. Landlo may, if in its opinion the same be advisable, establish a syst or systems of validation or other type operation, including system of charges against non-val idated parking checks of user and Tenant agrees to conform to and abide by a1 1 such rules a regulations in its use and the use of it customers and patro with respect to said automobil e parking area, provided, howeve that all such rules and regulations and such types of operati or validation of parking checks and other matters affecting t customers and patrons of Tenant shall apply equally and witho discrimination to a1 1 persons entitled to the use of sa automobile parking facilities. I. Landlord shall at all times during the term of th Lease have the sole and excl usive control of the common area and may at any time and from time to time during the term herel exclude and restrain any person from use or occupancy thereo excepting, however, bona fide customers, patrons and servicl suppliers of Tenant, and other Tenants of Land1 ord who make u of said areas in accordance with the rules and regulatio 21 a established by Landlord, the other tenants of Landlord and t other owner of the building to use the same in common wi Tenant, and it shal 1 by the duty of Tenant to keep a1 1 of sa areas free and clear of any obstructions created or permitted Tenant or resulting from Tenant's operation and to permit the u of any said areas only from normal parking and ingress and egre by the said customer, patrons and service-suppliers to and fr the building occupied by the Tenant and other tenants Landlord. 3. If in the opinion of Landlord unauthorized persons a using any of said areas by reason of the presence of Tenant the premises, Tenant, upon demand of Landlord, shall enforce su rights against a1 1 such unauthorized persons by appropria proceedings. Nothing herein shall affect the rights of Landlo at any time to remove any such unauthorized persons from sa areas or to restrain the use of any said areas by unauthoriz persons. ARTICLE 20 0 BANKRUPTCY - INSOLVENCY Tenant agrees that in the event a1 1 or substantial ly a1 1 Tenant's assets be placed in the hands of a receiver or trust€ and such receivership or trusteeship continues for a period thirty (30) days, or should Tenant make an assignment for t benefit of creditors of be finally adjudicated a bankrupt, shoul d Tenant institute any proceedings under the Bankruptcy P as the same now exists or under any amendment thereof which m hereafter be enacted, or under any other act relating to t subject of bankruptcy wherein Tenant seeks to be adjudicatec bankrupt, or to be discharged of its debts, or to effect a pl of liquidation, composition or reorganization, or should a involuntary proceeding be filed against Tenant under any su bankruptcy laws and such proceeding not be removed within nine (90) days thereafter, then tenant shall be in default under tt Lease, and this Lease or any interest in and to the premis shall not become an asset in any such proceedings and, in a such event and in addition to any and a1 1 rights or remedies Land1 ord hereunder or by 1 aw provided, it shal 1 be 1 awful f Landlord to declare the term hereof ended and to re-enter t premises and take possession thereof and remove all perso therefrom and Tenant shall have no further claim thereon hereunder. The provision of this Article 20 shall also apply any Guarantor of this Lease. ARTICLE 21 DEFAULTS BY TENANT 0 A. Should Tenant at any time be in default hereundc except for defaults of rent, it being understood that rent "free" and by definition could be in default with respect to i e 22 rental payments or other charges ayable by Tenant hereunder, at should such default continue for a period of five (5) days aftt written notice from Landl ord to Tenant; or shoul d the Tenant tl in default in the prompt and ful 1 performance of any other of ii promises, covenants or agreements herein contained and shoul such default or breach of performance continue for more than reasonable time (in no event to exceed thirty (30) days) afte written notice thereof from Landlord to tenant specifying tt particulars of such default of beach of performance; or shoul Tenant vacate or abandon the premises; then Landlord may trea the occurrence for anyone or more of the foregoing events as breach of this Lease, and in addition to any or all other righl or remedies of Landlord hereunder and by the law provided, -i shall be at the option of Landlord, without further notice c demand of any kind to Tenant or any other person: (a) The right of Landl ord to decl are the term hereof and I re-enter the premises and take possession thereof and remove a1 persons therefrom, and Tenant shall have no further claim there( or thereunder; or (b) The right of Landlord without declaring this Lease end( to re-enter the premises and occupy the who1 e or any part there1 from and on account of Tenant to collect said rent and any othl rent that may thereafter become payable. (c) . The right of Landl ord, even though it may have ri entered the premises, to thereafter elect to terminate this Lea and all of the rights of Tenant in or to the premises. B. Should Landlord have re-entered the premises under t premises under the provisions of subparagraph (b) above, Landlo shall not be deemed to have terminated this lease, or t liability of Tenant to pay rent thereafter to accrue, or liability for damages under any of the provisions hereof, by a such re-entry or be any action in unlawful detainer, otherwise, to obtain possession of the premises, unless Landl o shall have notified Tenant in writing that it has so elected terminate this lease, and Tenant further covenants that t service by Landlord of any notice pursuant to the unlawf detainer statutes of the State where the buil ding is situated a the surrender of possession pursuant to such notice shall n (unless Landlord elects to the contrary at the time of or at a time subsequent to the serving of such notices and such electi be evidenced by written notice to Tenant) be deemed termination of this Lease. In the event of any entry or taki possession of the premises as aforesaid, Landlord shall have t right, but not the obligation, to remove therefrom all or a part of the personal property located therein and may place t same in storage at a public warehouse at the expense and risk the owner or owners thereof. C. Should Landlord elect to terminate this lease under t provision of subparagraphs (a) or (c) above, Landlord may recou from Tenant as damages: e 23 a (i) the worth at the time of award of any unpaid rent whi had been earned at the time of such termination; plus (ii) the worth at the time of the amount by which t unpaid rent which would have been earned after termination unt the time of award exceeds the amount of such rental loss tena proves could have been reasonably avoided; plus (iii) The worth at the time of award of the amount by whi the unpaid rent for the balance of the term after the time award exceeds the amount of such rental loss that Tenant prov could be reasonably avoided; pl us (iv) any other amount necessary to compensate Landlord f' a1 1 the detriment proximately caused Tenant's fail ure to perfo his ob1 igations under this Lease or which in the ordinary cour of things would be likely to result therefrom, including, but rI limited to any costs or expenses incurred by Landlord maintaining or preserving the premises after such defaul preparing the premises for reletting to a new tenant, any repai or alterations to the premises for such reletting, leasi commission, or any other costs necessary or appropriate to re1 the premi ses. (v) at Landlord's election such other amounts in addition or in lieu of the aforegoing as may be permitted from time time by the 1 aws of the State where the buil ding is situated. D. As used in subparagraphs (i) and (ii) above, the "wor at the time of award" is computed by a1 1 owing interest at t rate of ten percent (10%) per annum. As used in subparagral (iii) above the "worth at the time of award" is computed discounting such amount at the discount rate of the Feder Reserve Bank nearest to the location of the building at the ti of award pl us one percent (1%). E. For a1 1 purposes of this Articl e 21, the term "rer shall be deemed to be the minimum annual rental and all ottl sums required to be paid by Tenant pursuant to the terms of ti Lease. All such sums, other than the minimum annual renta shall be computed on the basis of the average monthly amou thereof accruing during the immediately preceeding sixty (1 month period, except that if it becomes necessary to compute s rental before such a sixty (60) month period has occurred then the basis of the average monthly amount thereof accruing dur such shorter period. F. In the event of default, all of Tenant's fixturl furniture, equipment, improvements additions, a1 terations i other personal property, shal 1 remain on the premises and in t event, and continuing during the length of said default, Land11 shall have the right to take the exclusive possession of same to use same, rent or charge free until a1 1 defaul ts are cured 1 at its option, at any time during the term of this Lease, 0 @ 24 0 require Tenant to forthwith remove same. G. Notwithstanding any other provisions of this Articl Landlord agrees that if the default complained of, other than f the payment of monies, is of such a nature that the same cannl be rectified or cured within the thirty (30) day period requiri such rectification or curing as specified in the written noti relating thereto, then such defaul t shall be deemed to b rectified or cured if Tenant within such period of thirty (3 days shall have commenced the rectification and curing there and shal 1 continue thereafter with a1 1 due dil igence to cau such rectification and curing and does so complete the same wi the use of such diligence as aforesaid. in addition and supplemental to a1 1 other rights or remedi which Landlord may have under the laws then in force. I. The waiver by Landlord of any breach of any ter covenant or condition herein contained shall not be deemed to a waiver of such term, covenant or condition or any subsequei breach of the same or any other term, covenant or conditil herein contained. The subsequent acceptance of rent hereunder Landlord shall not be deemed to be a waiver of any precedi, breach by Tenant of any term, covenant or condition of th Lease, other than the failure of Tenant to pay the particul rental so accepted, regardless of Landlord's knowledge of SUI preceding breach at the time of acceptance of such rent. ~ covenant, term, or condition of this Lease shall be deemed have been waived by Landl ord, unl ess such waiver be in writing @ H. The remedies given to Landl ord in this Articl e shall 0 Landlord. J. Landlord shall have a first and prior lien for t rents and charges herein reserved upon the furniture, fixture merchandise, and other personal property owned by Tenai (excl udi ng 1 eased equipment) situated upon the premises, and sa items of personal property shall not be removed from the premis until said rent and charges are fully paid. tenant agrees execute such security agreements or financing statements Landl ord may require to properly record its lien in the pub1 records, and in the event of default by Tenant in the payment any sum hereunder, Landlord shall have the right to enforce sa 1 ien in the manner provided for foreclosure of security interes under the Uniform Commercial Code. Tenant hereby appoin Landl ord as Tenant's attorney-in-fact to fil e such financi statements. Article 22 DEFAULT BY LANDLORD In the event Landlord shall neglect or fail to perform observe any of the covenants, provisions or conditions contain in this Lease on its part to be performed or observed with thirty (30) days after written notice of default (or if more th a 25 thirty (30) days shal 1 be required because of the nature of the default, if Landlord shall fail to proceed diligently to cure such default after notice), then in that event Landlord shall be responsible to Tenant for any and all damages sustained by Tenant as a resul t of Landl ord's breach; further, after such notice Tenant shall have the right to cure any such default at Landl ord's expense incl uding in such expenditure a1 1 costs and attorneys' fees incurred to cure such default or breach of Lease. tenant shall have no right to terminate this Lease except as herein otherwise specifically provided. Shoul d Tenant give written notice to the Landlord to correct the default of Landl ord, Tenant wil 1 give simil ar notice to the hol der of the mortgage or deed of trust of Landlord, or the lessor of a ground 1 ease with Landl ord, and prior to any Lease cancel 1 ation, said holder of the first mortgage or deed of trust, and for lessor, shall be given a reasonable period of time to correct or remedy such default. If and when such holder of the first mortgage or deed of trust and/or 1 essor has made performance on behalf of Landlord, the default of Landl ord shal 1 be deemed cured. Tenant shall have no right to terminate this Lease, except as expressly provi ded herein. Article 23 EMINENT DOMAIN I) A. In the event the entire premises shal 1 be appropriate or taken under the power of eminent domain by any public o quasi-pub1 ic authority, this Lease shal 1 terminate and expire a of the date of such taking, and Tenant shall thereupon b B. In the event more than twenty-five (25%) of the squar footage of Floor Area of the premises is taken under the power o eminent domain by any public or quasi-public authority, or if b reason of any appropriation or taking, regardless of the amoun so taken, the remainder of the premises is not one undivide parcel of property, either Landl ord or Tenant shal 1 have tt right to terminate this Lease as of the date Tenant is requirc to vacate a portion of the premises upon giving notice in writii of such election within thirty (30) days after receipt by Tenai from landlord of written notice that said premises have been : appropriated or taken. In the event of such termination, bo' Landlord and Tenant shall thereupon be released from ai liability thereafter accruing hereunder. Landl ord agre, immediately after learning of any appropriation or taking to gi to Tenant notice in writing thereof. C. If this Lease is not so terminated as set forth abov Tenant shall remain in that portion of the premises which sha not have been appropriated or taken, and Landlord agrees, Landlord's cost and expense, to as soon as reasonably possib restore the premises on the land remaining to a complete unit like quality and character as existed prior to such appropriati or taking (except that the premises wil 1 be reduced in size 0 released from any liability thereafter accruing hereunder. 26 a affected by the condemnation); and thereafter the minimum annua rental provided for in Article 1 hereof shall be reduced on 81 equitable basis, taking into account the relative value of ttl portion taken as compared to the portion remaining. D. Landlord shall be entitled to the entire award CI compensation in such proceedings, but the rent and other chargti for the last month of Tenant's occupancy shall be prorated an Land1 ord agrees to refund to Tenant any rent or other charge paid in advance. Tenant's right to receive compensation fo damages for its fixtures and personal property shall not b affected in any manner hereby. Tenant shall be entitled 1; pursue any remedy it may have against the condemning authoril: for a "displaced person" pursuant to California Government Cot; Section 7262 or for loss of business goodwill pursuant 1: California Code of Civil Procedure Section 1263.510. E. For the purposes of this Article 25, a vol untary sal or conveyance in 1 ieu of condemnation, but under the threat ( condemnation, shall be deemed an appropriation or taking undc the power of eminent domain. Article 24 ATTORNEY'S FEES a In the event that at any time during the term of this Lea2 either Landlord or Tenant shall institute any action (: proceeding against the other relating to the provisions of th. lease, or any default hereunder, then, and in that event, thi 8 unsuccessful party in such action or proceeding agrees ti reimburse the successful party for the reasonable expenses attorney's fees and di sbursements incurred therein by t successful party. Further, in the event Landlord is made party to any 1 itigation by reason of the use or occupancy of th premises by Tenant or Tenant's employees, agents or guests without fault by Landlord, Tenant shall reimburse Landlord fo all of Landlord's attorneys fees and costs of litigatio incurred therein. Article 25 SALE OF PREMISES BY LANDLORD In the event of any sale or exchange of the premises Landlord and assignment by Landlord of this Lease, Landlord sha be and is hereby entirely freed and relieved of all liabili under any and all of its covenants and obligations contained or derived from this Jease arising out of any act, occurrence omission relating to the premises or this Lease occurring aft the consummation of such sale or exchange and assignment, exce the obligation to pay to Tenant the amount of Tenant's rent accordance with Paragraph A of Article 1. Article 26 27 e SUBORDINATION, ATTORNMENT A. Upon written request of Landlord, or any fir mortgagee or beneficiary of a first deed of trust of Landlor Tenant will in writing subordinate its rights hereunder to t interest of any ground lessor of the land upon which the premis are situated, as well as to the lien of any first mortgage first deed of trust, now or hereafter in force against the 1 a and building of which the premises are a part, and to a advances made or hereafter to be made upon the security therec Notwithstanding the foregoing, in the event any proceedings a brought for foreclosure, or in the event of the exercise of t power of sale under any mortgage or deed of trust made Landl ord covering the premises, Tenant shal 1 at the request any purchaser at any such sale attorn to the purchaser a recognize such purchaser as the Landlord under this Lease. B. Within ten (10) days after written request therefore Landlord, or in the event that upon any sale, assignment hypothecation of the premises or the land thereunder by Landlor an offset statement shall be required from Tenant, Tenant agre to deliver in recordable form a certificate addressed to any su proposed mortgagee or purchaser or to the Landlord certifyi that this Lease is in full force and effect (if such be t case), there are no defenses or offsets thereto or stating tho claimed by Tenant, and setting forth such other matters reasonably requested by Landl ord or such proposed mortgagee purchaser, including but not limited to those items set forth Exhibit "E" hereto. 0 C. Upon Landlord's request, Tenant shall modify this Lea in accordance with the requirements of a mortgagee or beneficia of a first deed of trust of Landlord provided such modificati does not (i) increase the net rent or additional rent, (ii a1 ter the term of any renewal term or (iii ) material ly adverse affect Tenant's leasehold estate or (iv) change, alter precl ude Tenant's continued uses, uti1 ization and operations the premises, the right to such use being expressly granted Tenant as set forth in this Lease. D. The lessor under any ground lease for the la underlying the premises shal 1 be a third party beneficiary this Lease, with a right to enforce premises shall be a thi party beneficiary of this Lease, with a right to enforce th Lease against Tenant. If at any time said lessor shall acqui the rights of Landlord under this Lease, "Tenant shall attorn said lessor or its nominee as Landlord under this Lease. Article 27 QUIET POSSESSION 0 Landlord agrees that Tenant upon paying the rent a performing the covenants and conditions of this Lease may quiet have, hold and enjoy the premises during the term hereof or a 28 a extension thereof. Article 28 LaLORDlS RIGHT OF ENTRY Tenant agrees to permit Landlord and its authorized representatives to enter the premises at all times during usual business hours for the purpose of inspecting the same. Tenant further covenants and agrees that Landlord may go upon the premises and make any necessary repairs to the premises and perform any work therein which may be necessary to comply with iiny laws, ordinances, rules or regulations of any public i3uthority or of the Insurance Services Office or of any similar lbody or that Landlord may deem necessary to prevent waste or deterioration in connection with the premises if the Tenant does not make or cause such repairs to be made or performed or cause such work to be performed promptly after receipt of written demand from Landlord. Nothing herein contained shall imply any duty on the part of Landlord to do any such work which under any provision of this Lease Tenant may be required to do, nor shall it constitute for the faithful performance by Tenant of all of the terms of this Lease by said Tenant to be observed and performed. The security deposit shall not be mortgaged, assigned, transferred or encumbered by Tenant without the written consent of Landlord and any such act on the part of Tenant shall be without force and effect and shall not be binding upon Landlord. B. If any of the rents herein reserved or any other sum .,able by Tenant to Landlord shall be overdue and unpaid or should Landlord make payments on behalf of the Tenant, or Tenant shall fail to perform any of the terms of this Lease, then Landlord may, at its option and without prejudice to any other remedy which Land1 ord may have on account thereof, appropriate and apply said entire deposit or so much thereof as may be necessary to compensate Landlord toward the payment of rent or additional rent or loss or damage sustained by Landlord due to such breach on the part of Tenant; and Tenant shall forthwith upon demand restore said security to the original sum deposited. Shoul d Tenant comply with a1 1 of said terms and promptly pay a1 l of the rentals as they fall due and all other sums payable by Tenant to Landlord, said deposit shall be returned in full to Tenant at the end of the term. C. In the event of bankruptcy or other debtor-creditor proceedings against Tenant, such security deposit shal 1 be deemed to be applied first to the payment of rent and other charges due Landlord for all periods prior to filing of such proceedings. D. Landlord may deliver the funds deposited hereunder by Tenant to the purchaser of Landlord's interest in the premises in the event that such interest be sold and thereupon Landlord shall be discharged from any further liability with respect to such r' qosit, and this provision shall also apply to any subsequent 29 a transferees. g:::A::ous A. It is agreed that nothing obtained in this Lease shall be deemed or construed as creating a partnership or joint venture between Landlord and Tenant or between Landlord and any other party, or cause Landlord to be responsible in any way for the debts or obligations of Tenant, or any other party. B. It is agreed that if any provision of this Lease shall be determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision of this Lease and all such other provisions shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Lease is capable of two constructions, one of which would render the provision void and the other of which would render the provisions valid, then the provisa’on shall have the meaning which renders it valid. C. In the event Tenant hereunder shall be a corporation, the parties executing this Lease on behalf of tenant hereby convenant and warrant that tenant will be a duly qualified corporation and all steps have been taken prior to the date hereof to qualify Tenant to do business in the State where the building is situated; all franchise and corporate taxes have been paid to date; and all future forms, reports fees and other documents D. It is understood that there are no oral agreements between the parties hereto affecting this Lease , and this Lease supersedes and cancel s any and a7 1 previous negoti ati ons, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease. E. Landlord reserves the absolute right to effect such other tenancies in the building as Landlord, in the exercise of its sole business judgment, shall determine to best promote the interest of the building. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or number of tenants shall during the term of this Lease occupy any space in the buil ding. A1 1 negotiations and oral agreements acceptabl e to both parties have been merge into and are included herein. There are no other representati ves or warranties between the parties and a1 1 reliance with respect to representations is solely upon the representations and agreements obtained in this document. F. The I aws of the State where the buil ding is situated shal R govern the val idity, performance and enforcements of this Lease. Although the printed provisions of this Lease were drawn this lease shall not be construed either for or 8 essary to comply with applicable laws will be filed when due. 30 ay Land1ordy against Landlord or Tenant, but this Lease shall be interprc in accordance with the general tenor of the language in an eff to reach and equitable result. G. A waiver of any breach or default shall not be a wai o of any other breach or default. Landlord's consent to, approval of, any act by Tenant requiring Landlord's consent approval shall not be deemed to waive or render unnecess Landlord's consent to or approval of any subsequent similar by tenant. H. Any prevention, delay or stoppage due to stri lockouts, labor disputes, acts of God, inability to obtain le or material s or reasonable substitutes therefor, governmen restrictions, governmental action, civil commotion, fire or ot casualty, and other causes beyond the reasonable control of party obligated to perform, shall excuse the performance by s party for a period equal to any such prevention, delay stoppage, except the ob1 i gations imposed with regard to ren and other charges to be paid by Tenant pursuant to this Lease I. Tenant hereby expressly waives any and all right redemption granted by or under any present or future laws in event of Tenant being evicted or dispossessed for any cause in the event of Landlord obtaining possession of the premises reason of the violation by Tenant of any of the covenants conditions of this Lease or otherwise. The rights given Landl ord herein are in addition to any rights that may be gi to Landl ord by any stature or otherwise. 3. The voluntary or other surrender or termination of i Lease by Tenant, or the acquisition by Landlord of Tenar rights under this Lease, shall not work a merger with Landlord's express written agreement to such a merger; anc Landlord's option, any such events shall operate as an assignn to Landlord of any and a1 1 sub1 eases or subtenancies of Ten for the premises. part thereof after the expiration of the term hereof, s occupancy shall be tenancy from month to month. L. Time is of the essence in the performance of obligat. under this Lease. M. The terms of this Lease shall be binding on hei beneficiaries successors and assi gns of a1 1 parties hereto. Article 30 - "FORCE MAJEURE" In the event a delay arising from "force majeure" should aff Landl ord's ob1 igation to construct the premises, Landl ord sh be granted a reasonable extension of time beyond the agreed I completion date to remedy the problem and complete construc @ K. If Tenant remains in possession of the premises or 31 a of the premises. CONTINGENCIES The final consummation and commencement of this lease contingent upon the following: 1. Landlord's ability to obtain construction financir equal to 75% of the project cost from an institutional lender l "market rate" interest rates. Landl ord shal 1 notify tenant . writing within 90 days of the execution of this lease 0' landlords ability or inability to obtain such financing. It anticipated that First Interstate Bank wil 1 be the constructic lender for this project. Tenant agrees to cooperate fully wi First Interstate Bank providing financial information on tenai and other information that might be required by First Intersta. Bank for the obtaining for the construction financing. 2. Plans and Specifications - Preliminary plans for tl building and the site plan for the location of the buildii within the Educational park are attached to this lease ai approved by both landlord and tenant. Within 45 days from tl execution of this lease landlord shall provide tenant detail plans, schematics and specifications which will identify ai describe in more detai 1 this bui 1 ding. These prel imi nai drawings shall be subject to the approval of tenant in writii within 14 days after date of receipt thereof. Subsequent to th( approval landlord shall prepare the final plans ai specifications for submittal to the Carl sbad Buil ding Departmen These final plans and specifications shall also be approved 1 disapproved by tenant within 14 days of date or receipt thereo Landlord shall pay all costs of preparing plans ai specifications. Once final pl ans are approved by Landl ord ai Tenant, the Landl ord's architect shal 1 cal cul ate actual squa footage to be uti1 ized by Tenant by using BOMA full-buildi, approved standards. This square footage shall be used calculating rental described in Article 5 hereof. The exai square footage shall be approved by Tenant. IN WITNESS WHEREOF, the Landlord and Tenant have duly executi this Lease on the day and year first above written. If Tenant shall be a corporation, the authorized officers must sign on behalf of the corporation. The Lease must be executed by the ANDLORD president or vice-president and the secretary or assistant secretary, unless the by-laws or a resolution of the board of directors shall otherwi se provi de, i n whi ch event, By : the by-laws or a certified copy of B)' m:&&i ji&o%3c\ A the resolution, as the case may be, By: i! 'i e 32 must be furnished. Also, the TENANT appropri ate corporate seal must be affixed. e 0 33 e EXHIBIT - B a MUSIC CONSERVATORY OF SOUTHERN CALIFORNIA DESCRIPTION - OF PREMISES That certain space in Batiquitos Lagoon Educational Park, locatc in the City of Carlsbad, County of San Diego, State of Californi contai ni ng approximately 18,000 square feet of fl oor area. -- USE OF PREMISES Tenant may use the premises only for educational operation These operations may i ncl ude undergraduate and gradual institutions; offices for admissions placement, registratio facul ty and accounting; conference rooms, cl assroom laboratories, libraries, and auditoriums; student service incl udi ng commons, bookstore, and cafeteria. e EXHIBIT "C" DESCRIPTION OF LANDLORD'S -1__ WORK AND TENANT'S WORK - 1. LANDLORD'S WORK Landl ord shal 7 construct the 1 eased premises at Landl ord' sole cost and expense to the extent shown below: a) concrete slab floor and insulated roof b) front and rear walls as per Landlord's plans c) doors as per Landlords's plans dl sewer and water fully installed to the restroom an e) electric service and telephone to the building f) heating and air conditioning mechanical equipment uni t g) paving and lighting as per Landlord's plans h) exterior walls of building i) washroom, as required by code for Tenants use equippe with toilet, grab bar, sink, mirror, light, exhaus dri nki ng fountains to the tenant's 1 eased premises placed on roofs e fan, ceiling, and walls 2. TENANT'S WORK Tenant will be given $20.00 per square foot tenan improvement allowance. If entire allowance is not usec Tenant may apply the unused portion to offset renta payments. Tenant, at Tenant's sole cost and expense shall k responsible for the cost of the fol lowing and any work no specifically set forth under Landlord's work: j) all signs k) trade fixtures 1 ) di stri buti on of heati ng and ai r-condi ti oni ng m) all electric wiring, outlets, lighting, switches, an n) suspended ceiling 0) spri nkl er heads and i nstall ati on p) utility meters and installation circuit breakers a q) all interior partitioning, locks, hardware, and paint r) one half the cost of interior demising walls betwee s) floor coverings and paint tenants a All Tenant's work wil 1 be performed by Landlord as genera contractor at its' costs as approved in writing in advance I: Tenant plus 15% for overhead and profit. LANDLORD'S INITIALS TENANTS INITIALS a a EXHIBIT 'ID" e GUARANTEE OF LEASE WHEREAS, a certain Lease of even date herewith has been, will be, executed by and between Batiquitos Bluff, therein a herein referred to as "Landl ord", and the Music Conservatory Southern California, therein referred to as "Tenant", coveri certain premises in the City of Carl sbad, County of San Dieg State of California; and WHEREAS, Landlord under said Lease requires as a condition its execution of said Lease that the undersigned guarantee full performance of the obligations of Tenant under said Lea and WHEREAS, the undersigned is desirous that Landl ord ent into said Lease with Tenant, NOW, THEREFORE, in consideration of the execution of sa Lease by Landl ord, the undersigned hereby unconditional guarantees the ful 1 performance of each and all of the terr covenants and conditions of said Lease to be kept and perform by Tenant, including the payment of a1 1 rentals and other chars to accrue thereunder. The undersigned further agrees as foll oh 1. This Guarantee shall continue in favor of Landlo notwithstanding any extension, modification, or a1 teration said Lease entered into by and between the parties thereto, their successors or assi gns, or notwithstanding any assi gnrnent said Lease, with or without the consent of said Landlord, and extension, modification, a1 teration or assignment of said Lea shall in any manner release or discharge the undersigned and t undersigned does hereby consent thereto. 2. This Guarantee will continue unchanged by any bankrupl reorganization or i nsol vency of Tenant or any successor assignee thereof or by any disaffirmance or abandonment by trustee of Tenant. whole or in part and no assignment or transfer of said Lea shall operate to extinguish or diminish the liability of ti. undersi gned hereunder. 4. The liabili y of the u er i ~$nu$Rf;ht~$&~uci;;; shall be primary; ant in any riglt o? a%? to Landlord under said Lease, Landlord may, at its option, proc against the undersigned without having commenced any action, having obtained any judgment against Tenant. e 3. Landlord may, without notice assign this Guarantee a Exhi bi t ‘ID” Page 2 5. The undersigned shal 1 pay Land1 ord’s reasonal attorneys‘ fees and all costs and other expenses incurred if coll ection or attempted col 1 ection or in any negotiations re1 at to the ob1 i gations hereby guaranteed or enforcing this Guarantc 6. The undersigned does hereby waive notice of any dema by Landlord, as well as any notice of default in the payment rent or any other amounts contained or reserved in said Lease. 7. The use of the singular herein shall include the plui- The obligation of two or more parties shall be joint and sevei The terms and provisions of this Guarantee shall be binding i and inure to the benefit of the respective successors and assi of the parties herein named. IN WITNESS WHEREOF, the undersigned has caused this Guarar to be executed as of the date set forth on page 1 of this Leas1 0 If Guarantor shall be a -- corporation, the authorized officers must sign on behalf of the corporation. This Guarantee must be executed by the president or vice-president and the secretary or assistant Address: secretary, unl ess the by-1 aws or a resolution of the board of directors shal 1 otherwise provide, in which event, the by-laws or a certified copy of the resolution, as the case may be, must be furnished. Also, the appropriate corporaTTE seal must be affixed. @ 0 E X H I B I T I' E 'I dm TENANT'S ESTOPPEL CERTIFICATE Date: Attention: Re: The undersigned, as Tenant under that certain Lease (tk ''Lease'') for the above referenced premises (the "Premises") datl Landl ordT hereby cer:ifiesthat: a. A1 1 work to the Premises has been compl eted and the 'I and the Premises are accepted as satisfactory; b. Tenant is in full and complete possession of the Premi and is fully occupying the same and conducting its busin therefrom; 19 made with Bati qui tos B1 uff c. Rent under the Lease commenced to accrue a 19 , and has been paid through the date 19- and no rent credits or other offse have been given b; Lanci or taken by Tenant; e d. The current rent due under the Lease is equal e. The Lease is in full force and effect and has not b amended, modified or suspended other than by amendments da Y 19 y and the present term of the Le f. Tenant has not advanced any amounts to or on behalf Landlord under the Lease, for which advance it has not t: reimbursed; g. Tenant hol ds no c7 aim against Landl ord which might be off against accruing rental s; h. Tenant has not sub1 et the Premises or any portion the nor has Tenant assigned the Lease or any portion thereof; and Dollars ($ ) per month; - expi res Y 19 Y I) Exhibit E I) Page * j. Tenant understands that will materially rely on the statements made herein. T undersigned acknowl edges and agrees that the statements ma herein are true and complete and may be relied upon and its successors and assigns. (Attach Notary Acknowledgment) a 0 EXHIBIT F OPTION TO EXTEND TERM e OPTION TO EXTEND LEASE. A. Tenant is hereby granted successive options to extend term of this Lease, on a7 1 of the provisions contained here for 2 periods of 5 years each (each such period hereinaf referred to as ''extended term") fol lowing the expiration of initial term or of the immediately preceding extended term, the case may be. Each such option is to be exercised by giv written notice of exercise of the option exercised ("Opt Notice") to Landlord at least six months, but not more than year, before the expiration of the initial term or of immediately preceding extended term, as the case may provided, however, that in any of the following events, extended term shall not commence and this Lease shall expire the end of the initial term or at the end of the immediat preceding extended term, as the case may be: (i) if Tenant is default on the date of giving the Option Notice, the Opt Notice shall be totally ineffective; (ii) if Tenant is default on the date the respective extended term is to commer (iii) if any assignee or sublessee other than a successor Tenant as defined in Section 18.8. is in possession of premises on the date of giving the Option Notice, the Opt Notice shall be totally ineffective; or (iv) if any assignec sublessee other than a successor of Tenant as defined in Secl 18.6. is in possession of the premise on the date the respecl extended term is to commence. Tenant shall have not other ri to extend the term of this Lease. 6. The Amount of the Base Monthly Rental for each exter term shall be the amount of Base Monthly Rental for the y immediately preceding the commencement of the respective exter term, adjusted as of the commencement of said extended term adjusted annually during the extended term to reflect changc the cost of living as is set forth in Section 8. 0 *