HomeMy WebLinkAboutOrdinance 2801 N.C.S. 02/07/2022 DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
ORDINANCE NO. 2801 N.C.S.
EFFECTIVE DATE
OF ORDINANCE
February 7, 2022
Introduced by D'Lynda Fischer Seconded by Kevin McDonnell
ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA APPROVING A
LEASE WITH BASIN STREET PROPERTIES FOR OFFICE SPACE FOR THE PETALUMA
FIRE DEPARTMENT LOCATED AT 151 2nd STREET, PETALUMA, CALIFORNIA
WHEREAS, the City of Petaluma Fire Department needs new office space to safely
accommodate new Fire Department Staff; and
WHEREAS, the City has found suitable office space located within 100 feet of the current
Fire Department Headquarters, located at 151 2nd Street, Petaluma, California (Office Space); and
WHEREAS, the Office Space is a total of 1015 square feet and consists of one enclosed office
space and capacity for 3-4 additional work-stations; and
WHEREAS, the Office Space is managed by Basin Street Properties; and
WHEREAS,the City deems it advantageous to lease the Office Space managed by Basin Street
Properties; and
WHEREAS, the lease, which includes a two-year term through March 31, 2024 and an initial
monthly rent of$1,725.50 (plus an annual escalator and triple net charges), is attached and made part of
this Ordinance as Exhibit A; and
WHEREAS, Section 46 of Article VII of the Petaluma City Charter provides, in pertinent part,
that no City action providing for the sale or lease of real property having a value of$3,000 or more may
be taken except by ordinance or pursuant to a general law of the State; and
WHEREAS,introducing an ordinance to approve a lease which will provide office space for the
Petaluma Fire Department is categorically exempt under the California Environmental Quality Act
("CEQA") in accordance with Sections 15301 (Existing Facilities), 15303 (New Construction or
Conversion of Small Structures), and 15304 (Minor Alterations to Land) as the lease space is located at
an already improved property, near the Fire Department Headquarters.
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NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
PETALUMA AS FOLLOWS:
Section 1.Recital Finding. The City Council hereby finds and determines the foregoing recitals
to be true and correct and hereby incorporates them into this ordinance as findings and determinations
of the City Council.
Section 2. CEQA Finding. Finds that introducing an ordinance to approve a lease which will
provide office space for the Petaluma Fire Department is categorically exempt under the California
Environmental Quality Act ("CEQA") in accordance with Sections 15301 (Existing Facilities), 15303
(New Construction or Conversion of Small Structures), and 15304 (Minor Alterations to Land) as the
lease space is located at an already improved property, near the Fire Department Headquarters
Section 3. Approval of Lease. In accordance with Section 46 of Article VII of the Petaluma
City Charter and other applicable law,the lease agreement between the City of Petaluma and Basin Street
Properties that is attached to and is hereby made a part of this ordinance as Exhibit A is hereby approved,
and the City Manager is hereby authorized and directed to execute on behalf of the City a lease agreement
with Basin Street Properties that is substantially in accordance with that attached as Exhibit A and is
approved as such by the City Attorney.
Section 2. Severability. If any section, subsection, sentence, clause, phrase or word of this
ordinance is for any reason held to be unconstitutional, unlawful or otherwise invalid by a court of
competent jurisdiction or preempted by state legislation, such decision or legislation shall not affect the
validity of the remaining portions of this ordinance. The City Council of the City of Petaluma hereby
declares that it would have passed and adopted this ordinance and each and all provisions thereof
irrespective of the fact that any one or more of said provisions be declared unconstitutional,unlawful or
otherwise invalid.
Section 3. Effective Date. This ordinance shall become effective thirty(30) days after the date
of its adoption by the Petaluma City Council.
Section 4. Posting/Publishing of Notice. The City Clerk is hereby directed to publish or post
this ordinance or a synopsis for the period and in the manner provided by the City Charter and other
applicable law.
INTRODUCED and ordered posted/published the 24th day of January 2022 by the following vote:
Ayes: Mayor Barrett, Barnacle, Fischer, Healy, King, McDonnell, Vice Mayor Pocekay
Noes: None
Abstain: None
Absent: None
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ADOPTED this 7ch day of February 2022 by the following vote:
Ayes: Mayor Barrett, Barnacle, Healy, King, McDonnell, Vice Mayor Pocekay
Noes: None
Abstain: None
Absent: Fischer
5DocuSigned by:
�'tSa
Teresa Barrett, ayor
ATTEST: APPROVED AS TO FORM:
DocuSigned by:
DocuSigned by:
77
Karen Gonzales, Interim City Clerk Eric Dan , 11F%YEAMMey
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EXHIBT A—ORDINANCE NO 2081 N.C.S.
GARAGE RETAIL NNN LEASE
BASIC LEASE INFORMATION
, 2022
DATE: GARAGE RETAIL CA LLC,
LANDLORD: a California limited liability company
c/o Basin Street Properties
316 California Ave, #350
LANDLORD's ADDRESS: Reno,NV 89509
Attn: Scott Stranzl
Phone: (775) 954-2900
CITY OF PETALUMA
TENANT:
TENANT'S ADDRESS:
a. Before Commencement Date:
Phone: (707) 333 - 6213
Attn: Jeff Schach
Email: jschachkcityofpetaluma.org
At the Premises
Attn: Jeff Schach
b. After Commencement Date: Email: jschachkcityofpetaluma.org
Approximately One Thousand Fifteen(1,015)
rentable square feet of space in the Building, as
PREMISES: more particularly shown on Exhibit A-1 attached
hereto.
A portion of the Building consisting of
approximately Twenty Eight Thousand, Seven
RETAIL AREA: Hundred Fifty-One (28,751)rentable square feet
of space, as more particularly shown on Exhibit
A-3 attached hereto.
That certain four(4) story mixed-use building
and parking structure constructed at First and
BUILDING: "D" Streets, Petaluma, California
The Building and the Lot.
PROJECT: See Section 3.1.
TERM: March 1, 2022
a. Commencement Date Twenty-five (25) months following the
b. Estimated Commencement Date Commencement Date
c. Expiration Date
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BASE RENT: The amounts set forth below for the respective periods:
Applicable Period Monthly
Rent
3/l/2022—3/31/2022 $0.00
4/l/2022—2/28/2023 $1,725.50
3/l/2023 —2/29/2024 $1,777.27
3/l/2024—3/31/2024 $1,830.58
TENANT'S RETAIL AREA PERCENTAGE 3.53% (i.e., the rentable
SHARE: square footage of the
Premises/the rentable square
footage of the Building)
TAXES AND OPERATING EXPENSES:
Estimated Initial Monthly
Allocation of Taxes and Operating Five Hundred Forty-Eight
Expenses for the current calendar Dollars and 10/100 ($538.10)
year:
SECURITY DEPOSIT: One Thousand Eight Hundred
Thirty Dollars and
58/100 ($1,830.58), as further
described in Section 17.
PERMITTED USE:
For use as general office and
for no other use or purpose.
PARKING SPACES:
Tenant shall have the right to
unreserved parking in the
parking garage and
REAL ESTATE BROKERS: surrounding downtown areas,
a. Landlord's Broker: as shown on Exhibit A-2.
JLL
b. Tenant's Broker:
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EXHIBT A—ORDINANCE NO 2081 N.C.S.
GUARANTOR: Diagram of Premises 1000 Fourth
Name: Diagram of Project Street, Suite
Address:
Intentionally Deleted 400 San Commencement Date Rafael, CA
EXHIBITS Memorandum 94901
Rules and Regulations N/A
Addendum Construction Standards
Exhibit A-1: Payment Instructions N/A
Exhibit
A-2:
Exhibit B:
Exhibit C:
Exhibit D:
Exhibit E:
Exhibit F:
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4824-5420-3806,v.2
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GARAGE RETAIL NNN LEASE
THIS MIXED-USE RETAIL NNN LEASE (this"Lease")dated as of ,
2022, is entered into by and between GARAGE RETAIL CA LLC, a California limited liability
company("Landlord"), and CITY OF PETALUMA, a ("Tenant").
1. Definitions. The following terms shall have the meanings set forth below:
1.1. Building. The term 'Building" shall have the meaning set forth in the Basic
Lease Information.
1.2. Commencement Date. The term "Commencement Date" shall have the
meaning set forth in Section 3.1.
1.3. Common Areas. The term"Common Areas" shall mean the areas and
facilities within the Building or Project provided and designated by Landlord for the general use,
convenience or benefit of Tenant and other tenants and occupants of the Building or Project, as
applicable (e.g., common stairwells, stairways, hallways, shafts, elevators, restrooms, janitorial
telephone and electrical closets, pipes, ducts, conduits, wires and appurtenant fixtures servicing
the Building, and Project walkways, traffic aisles, accessways, utilities and communications
conduits and facilities). The term "Common Areas" shall exclude all of the outside walls of the
Premises and any space in the Premises used for shafts, stacks, pipes, conduits, ducts, electrical
equipment or other utilities or Building or Project facilities that are reserved solely to Landlord
and Landlord shall have rights of access through the Premises for the purpose of operating,
maintaining and repairing the same.
1.4. CPI Promotional Adjustment Dates. The term "CPI Promotional
Adjustment Dates" shall have the meaning set forth in Section 22.
1.5. Gross Sales. The term "Gross Sales" shall have the meaning set forth in
Section 4.2.1.
1.6. Last CPI Promotional Publication Date. The term "Last CPI Promotional
Publication Date" shall have the meaning set forth in Section 22.
1.7. Minimum Business Hours. The term "Minimum Business Hours" shall
have
the meaning set forth in the Basic Lease Information.
1.8. New CPI Promotional Publication Date. The term "New CPI Promotional
Publication Date" shall have the meaning set forth in Section 22.
1.9. Percentage Rent. The term "Percentage Rent" shall have the meaning set
forth in Section 4.2.
1.10. Premises. The term"Premises" shall have the meaning set forth in the Basic
Lease Information.
1.11. Promotional Charge. The term "Promotional Charge" shall have the
meaning set forth in Section 22.
1.12. Project. The term "Project" shall have the meaning set forth in the Basic
Lease Information.
1.13. Rentable Area. The term "Rentable Area" shall mean the rentable area of
the Premises, Building and Project as reasonably determined by Landlord. The parties agree that
for all purposes under this Lease,the Rentable Area of the Premises, Building and Project shall be
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deemed to be the number of rentable square feet identified in the Basic Lease Information, subject
to remeasurement by Landlord's architect from time to time.
1.14. Tenant's Building Percentage Share. The term"Tenant's Building
Percentage Share" shall mean the percentage specified in the Basic Lease Information. If
Landlord remeasures the Premises or the Building from time to time, then upon notice to Tenant,
Tenant's Building Percentage Share shall be adjusted to a percentage equal to the Rentable Area
of the Premises divided by the Rentable Area of the Building, based on the remeasurement.
1.15. Tenant's Project Percentage . The term"Tenant's Project Percentage
Share" shall mean the percentage specified in the Basic Lease Information. If Landlord
remeasures the Premises or the Project from time to time,then upon notice to Tenant,then Tenant's
Project Percentage Share shall be adjusted to a percentage equal to the Rentable Area of the
Premises divided by the Rentable Area of the Project, based on the remeasurement.
1.16. Term. The term "Term" shall mean that period commencing on the
Commencement Date and ending on Expiration Date, unless sooner terminated or expiring in
accordance with this Lease, and subject to extension upon written agreement by the parties.
1.17. Trade Name. The term "Trade Name" shall have the meaning set forth in
the Basic Lease Information.
2. Premises.
2.1. Demise. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the Term, at the rent and upon the conditions set forth below. Tenant's lease of the
Premises shall include the right to use, in common with others and subject to the other provisions
of this Lease, the Common Areas.
2.2. Condition Upon Delivery. Tenant acknowledges that it has had an
opportunity to thoroughly inspect the Premises and, subject to Landlord's obligations under
Section 9.2, Tenant accepts the Premises in its existing"as is" condition,with all faults and defects
and without any representation or warranty of any kind, express or implied, Landlord shall have
no obligation to make or pay for any improvements or renovations in or to the Premises or to
otherwise prepare the Premises for Tenant's occupancy.
2.3. Reserved Rights. Landlord reserves the right to do the following from time
to
time:
(a) Changes. To install,use,maintain,repair,replace and relocate
pipes,
ducts, shafts, conduits, wires, appurtenant meters and mechanical, electrical and plumbing
equipment and appurtenant facilities for service to other parts of the Building or Project above the
ceiling surfaces, below the floor surfaces and within the walls of the Premises and in the central
core areas of the Building and in the Building Common Areas, and to install,use,maintain,repair,
replace and relocate any pipes, ducts, shafts, conduits, wires, appurtenant meters and mechanical,
electrical and plumbing equipment and appurtenant facilities servicing the Premises, which are
located either in the Premises or elsewhere outside of the Premises;
(b) Boundary Changes. To change the boundary lines of or within
the
Project;
(c) Facility Changes. To alter or relocate the Common Areas or
any facility
within the Project;
(d) Parking. To designate and/or redesignate specific parking
spaces in the Project for the exclusive or non-exclusive use of specific tenants in
the Project;
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4824-5420-3806,v.2
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(e) Services. To install, use, maintain, repair, replace, restore or
relocate
public or private facilities for communications and utilities on or under the Building and/or Project;
and
(f) Other. To perform such other acts and make such other
changes in, to or
with respect to the Common Areas, Building and/or Project as Landlord may reasonably deem
appropriate.
3. Term.
3.1. Commencement Date. The Term shall be for the period of time specified in
the Basic Lease Information unless sooner terminated as hereinafter provided. The Term shall
commence on March 1, 2022, the date Landlord delivers the Premises to Tenant in its existing as-
is condition (the "Commencement Date"), and shall continue thereafter in full force and effect
for the period specified as the Term or until this Lease is terminated as otherwise provided herein.
For purposes of this Lease, the first "Lease Year" shall mean the period commencing on the
Commencement Date and ending twelve(12)months thereafter,except that if the Commencement
Date is other than the first day of a calendar month, the first Lease Year shall mean the period
commencing on the Commencement Date and ending on the last day of the twelfth (121h) full
calendar month after the Commencement Date. Thereafter, the term "Lease Year" shall mean a
period equal to twelve (12) full calendar months.
3.2. Delay in Delivery. If for any reason Landlord has not delivered to Tenant
possession of the Premises by the Estimated Commencement Date,this Lease shall remain in effect
and Landlord shall not be liable to Tenant for any loss or damage resulting therefrom. The
Commencement Date shall,however,be delayed until the date Landlord delivers possession of the
Premises to Tenant in the condition required by this Lease.
3.3. Commencement Date Memorandum. Following the date on which Landlord
delivers possession of the Premises to Tenant and the Commencement Date,Landlord may prepare
and deliver to Tenant a commencement date memorandum (the "Commencement Date
Memorandum") in the form of Exhibit C, attached hereto, subject to such changes in the form as
may be required to insure the accuracy thereof. The Commencement Date Memorandum shall
certify the date on which Landlord delivered possession of the Premises to Tenant and the dates
upon which the Term commences and expires. Tenant's failure to execute and deliver to Landlord
the Commencement Date Memorandum within five (5)business days after Tenant's receipt of the
Commencement Date Memorandum shall be conclusive upon Tenant as to the matters set forth in
the Commencement Date Memorandum.
4. Rent.
4.1. Base Rent. Commencing as of the Commencement Date, and continuing
thereafter on or before the first day of each calendar month during the Term hereof, Tenant shall
pay to Landlord, as monthly rent for the Premises,the monthly Base Rent specified in in the Basic
Lease Information above. If Tenant's obligation to pay Base Rent hereunder commences on a day
other than the first day of a calendar month, or if the term of this Lease terminates on a day other
than the last day of a calendar month, then the Base Rent payable for such partial month shall be
appropriately prorated on the basis of a thirty(30)-day month. Base Rent shall be paid in advance,
on or before the first day of each and every calendar month following the Commencement Date.
For any free or reduced rent period specified in the Basic Lease Information or elsewhere in this
Lease, Landlord shall have the ongoing right to prepay Tenant all or any portion of such free or
reduced rental amounts. Upon request from Landlord, Tenant shall execute an amendment to this
Lease reflecting that any free or reduced rental amounts prepaid by Landlord will be due when
originally scheduled as free or reduced under the Lease.
4.2. Percentage Rent. In addition to the other rents provided herein, Tenant shall
pay to Landlord on or before the first day of each and every successive calendar month following
the Commencement Date, in the same manner as Base Rent is paid, percentage rent (the
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"Percentage Rent") during the Term in an amount equal to the product of(i) the Percentage Rent
Rate and (ii) the positive difference between (a) Tenant's monthly Gross Sales (as hereinafter
defined) and (b) the amount of Base Rent actually paid by Tenant for the month for which the
Percentage Rent is being determined; provided, however, in no event shall Tenant ever receive a
refund of Base Rent or pay less than the amount of Base Rent due hereunder. Nothing contained
in this Lease shall be construed to be or create a partnership or joint venture between Landlord and
Tenant.
4.2.1 Definition of Gross Sales. The term "Gross Sales" means: (i) the gross
selling price of all merchandise or services sold, leased, licensed or delivered
in or from the Premises by Tenant and its subtenants, licensees, agents,
employees or concessionaires whether for cash, credit or other consideration,
and of all orders filled or received or orders taken even if filled other than in
the Premises by telephone or any other means, including, without limitation,
mail, internet or canvassing by any employee, agent or other source in or from
the Premises, including the proceeds of pay phones and stamp, music,
newspaper and magazine dispensers installed by or for the benefit or account
of Tenant or its subtenants, licensees, agents, employees or concessionaires;
and(ii) all gross income of Tenant and its subtenants, licenses, franchisees,
agents, employees or concessionaires from any operation in, at, upon or from
the Premises which is not excluded from Gross Sales by other provisions of
this Lease (but without duplication); and(iii)the gross receipts from all lottery
sales and all mechanical or other vending devices placed in the Premises by
Tenant or under authority from Tenant, other than such devices which are
installed in portions of the Premises not open to the public for the sole
convenience of Tenant's employees. Gross receipts from sales made and
orders taken at the Premises shall be included in Gross Sales even though the
account may be transferred elsewhere for collection and even though the
delivery of merchandise sold may be made elsewhere than at the Premises.
No deduction shall be allowed for uncollected credit accounts and returned
checks. Any transaction on an installment basis, including,without limitation,
any "lay-away" sale or like transaction or otherwise involving the extension of
credit, shall be treated as a sale for the full price at the time of the transaction,
irrespective of the time of payment or when title passes. All Gross Sales shall
be determined in accordance with accounting standards customarily accepted
by the retail industry. The following items are excluded from Gross Sales: (a)
the net amount of any refund made or credit allowed upon any sale in or from
the Premises previously included in Gross Sales, not to exceed the amount
previously included, where the merchandise sold in or from the Premises is
thereafter returned by the purchaser and accepted by Tenant; (b) sales of trade
fixtures and Tenant's equipment after substantial use thereof in the ordinary
conduct of Tenant's business in the Premises; (c) the amount of any sales,use,
luxury or excise tax on merchandise sales which is both added to the selling
price (or absorbed therein) and paid to taxing authorities by Tenant(but not by
any vendor of Tenant); and(d) any amount received by Tenant as rental from
a concessionaire or subtenant whose own sales are included in computing
Gross Sales hereunder; provided, however, nothing contained herein shall
waive the limitations on assignment or subletting set forth in this Lease.
4.2.2 Statement of Gross Sales. On or before the tenth (1 Oth) day of each calendar
month during the Term commencing on the Commencement Date, Tenant
shall furnish to Landlord a statement of Gross Sales and any authorized
deductions therefrom for the previous calendar month, certified as correct by
an officer of Tenant. On or before March 15 of each Lease Year, Tenant shall
furnish to Landlord a statement certified by an officer of Tenant setting forth
Gross Sales and any authorized deductions therefrom,both on a monthly and
cumulative basis for the preceding Lease Year. Tenant shall require and cause
all of its concessionaires, licensees, franchisees and subtenants to furnish
statements at the times and in the form and content specified in this Section
4.2.2 relating to their operations at the Premises. All reports of Gross Sales
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submitted by Tenant to Landlord shall be deemed conclusive and binding
upon Tenant unless Tenant corrects the reports within one (1) year after the
date Tenant submits the reports to Landlord.
4.2.3 Payment of Percentage Rent. Tenant shall pay to Landlord the monthly
payment of Percentage Rent on or before the tenth (loth) day of each calendar
month during the Term commencing on the Commencement Date, together
with Tenant's submittal to Landlord of the statement of Gross Sales for the
prior calendar month. Concurrently with the submission of the annual
statement of Gross Sales, Tenant shall pay to Landlord any amount of
Percentage Rent due with interest thereon at the Interest Rate from the date
due until paid so that Landlord shall have received as Percentage Rent a sum
equal to the Percentage Rent Rate of all Gross Sales during such Lease Year,
less the Base Rent previously paid for such Lease Year. Tenant shall receive
any amount of Percentage Rent overpaid by Tenant for the preceding Lease
Year as a credit against the next installment of Percentage Rent due until
completely refunded; provided, however, Tenant's right to receive a refund of
any overpayment of Percentage Rent in any Lease Year is expressly
conditioned on Tenant delivering to Landlord a written statement certifying
the amount of overpaid Percentage Rent within sixty(60) days after Tenant's
submission of Tenant's annual statement of Gross Sales. Landlord's
acceptance of any amount as Percentage Rent shall not be deemed an
acceptance of the accuracy of any statement of Gross Sales or the sufficiency
of any payment of Percentage Rent.
4.2.4 Books and Records. For the purpose of ascertaining the Gross
Sales and Percentage Rent, Tenant shall keep books and records, in accordance with generally
accepted accounting principles consistently applied, in which shall be recorded any and all Gross
Sales for the Premises. Tenant's books and records shall be located upon the Premises or, if
Tenant's principal office is located in Northern California, at Tenant's principal office and shall
include all federal, state and local tax returns and all relevant original sales records relating to such
sales. Tenant shall prepare, preserve and maintain any and all such records and accounts for a
period of not less than three(3) years following the Lease Year in which the sales were generated.
The records and accounts which Tenant shall so prepare, preserve and maintain shall include: (i)
daily cash register summary tapes, including tapes from temporary registers; (ii) a record of every
sale at the time of the transaction on either a sealed or locked continuous cash register tape which
numbers,records and duplicates each transaction entered into the register or serially pre-numbered
sales slips which shall be retained in numerical sequence; (iii)the originals of all mail and internet
orders taken or filled at, to or from the Premises; (iv) the original records of all telephone orders
at, to or from the Premises; (v) settlement report sheets of transactions with subtenants,
concessionaires, franchisees and licensees; (vi) all bank statements and records detailing
transactions in or through Tenant's bank account into which Gross Sales shall be deposited and
which shall be separately maintained for Gross Sales from the Premises and no other source of
funds shall be deposited in such account; (vii) all bank statements detailing transactions in or
through any other bank account of Tenant; (viii) daily or weekly sales transaction reports; (ix) a
sales journal; (x) a general ledger or summary of all revenue and expenditures from Tenant's
business operations relating to the Premises in any manner whatsoever;and(xi)such other records,
books or accounts as would normally be examined or prepared by an independent accounting firm
pursuant to generally accepted accounting principles consistently applied in order to ascertain,
document or substantiate Gross Sales and Percentage Rent.
4.2.5 Inspection and Audit. Landlord and its agents shall have the right during
reasonable business hours during the Term and for up to three (3) years after
the termination of this Lease to determine or verify Gross Sales by(i)
inspecting, copying and examining all or any part of Tenant's books and
records and/or(ii) conducting an audit of all or any part of Tenant's books and
records by an experienced professional of Landlord's choice. Tenant shall
cooperate fully with Landlord and its agents in making any inspection,
copying or audit, and shall permit Landlord and its agents to inspect, copy or
audit the books and records of sales by Tenant, its parent, subsidiaries or
affiliates or any other business operated by them to the extent reasonably
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necessary to determine or verify Gross Sales. If such audit reveals that there
is a deficiency in the manner in which Tenant maintains its records, Tenant
shall immediately cure such deficiency and shall pay all Landlord's expenses
incurred for such audit immediately upon demand by Landlord. If such audit
reveals that there is a deficiency in the payment of any Percentage Rent, then
such deficiency shall become immediately due and payable together with
interest thereon at the Interest Rate from the date due until paid and Tenant
shall immediately pay for the costs of any audit by Landlord if the audit
reveals that Tenant either understated annual Gross Sales by more than two
percent (2%) of the Gross Sales for any Lease Year or underpaid Percentage
Rent by greater than One Thousand Dollars ($1,000.00). If an inspection or
audit by Landlord discloses that Tenant has over-reported Gross Sales and that
as a result of the over-reporting Tenant has overpaid Percentage Rent, then the
overpaid Percentage Rent, minus all expenses incurred by Landlord in
conducting such inspection or audit, shall be credited against the next
succeeding payment of Percentage Rent due and owing by Tenant. In addition
to all other remedies available to Landlord, if Landlord's inspection or audit
discloses that Tenant's records and other materials provided by Tenant to
Landlord and Landlord's auditor are inadequate, in Landlord's or Landlord's
auditor's reasonable opinion, to disclose accurately Tenant's Gross Sales, then
Landlord shall be entitled to collect as additional rent from Tenant an amount
equal to fifteen percent(15%) of the highest Total Rent(defined as the sum of
the annual Base Rent and Percentage Rent)payable by Tenant to Landlord
under this Lease in any of the three (3)preceding Lease Years.
4.2.6 Maximization of Gross Sales. Tenant shall use its best efforts to
operate the business conducted in the Premises in a manner that will maximize Gross Sales. Tenant
shall operate Tenant's business in the Premises with due diligence and efficiency and shall
maintain a full stock of saleable inventory and merchandise and adequate and competent sales
personnel and operating staff, so as to produce all of the Gross Sales which may be produced by
such manner of operation. If, during any day of any month, Tenant does not conduct its business
as required by the terms of this Lease, then the Gross Sales used for computing Percentage Rent
for that month shall be deemed to be the greater of(i) the Gross Sales generated during the month
in question or(ii) the highest Gross Sales generated during any month during the Term.
4.2.7 Quarterl�Pa rents. Notwithstanding anything to the contrary contained in
this Section 4.2, Landlord, by written notice to Tenant, may collect Percentage
Rent on a quarterly basis (with the quarterly periods to run from February I
through April 30, May I through July 31, August 1 through October 31, and
November I through January 31) as opposed to a monthly basis. If Landlord
elects to collect Percentage Rent on a quarterly basis, then, in addition to
Tenant furnishing Landlord with a monthly statement of Gross Sales, Tenant
shall furnish to Landlord within ten(10) days after the end of each quarter
during the Term a statement of Gross Sales and any authorized deductions
therefrom for the previous quarter, certified as correct by an officer of Tenant.
If Landlord elects to collect Percentage Rent on a quarterly basis, then Tenant
shall pay to Landlord Tenant's payment of Percentage Rent on or before the
tenth(IOth) day of each quarter together with Tenant's submittal to Landlord
of the statement of Gross Sales for the prior quarter.
4.3. First Month's Rent. Notwithstanding the foregoing, Tenant shall pay to
Landlord together with Tenant's execution of this Lease an amount equal to monthly Base Rent
payable for the first full calendar month of the Term (after any free rent or abated rent period).
Such amount shall be credited to the first month's Base Rent.
4.4. Additional Rent. Tenant shall pay, as additional rent, all amounts of money
that Tenant is required to pay to Landlord under this Lease in addition to monthly Base Rent
whether or not the same is designated "additional rent." Tenant shall pay to Landlord all
additional rent upon Landlord's written request or otherwise as provided in this Lease.
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4.5. Late Payment. Tenant acknowledges that late payment of Rent to Landlord
will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which is
extremely difficult to ascertain. Such costs include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Landlord by the terms of any trust
deed covering the Premises. Accordingly, if any installment of Rent or any other sums due from
Tenant shall not be received by Landlord when due, Tenant shall pay to Landlord a late charge in
an amount equal to five percent (5%) of such overdue amount. The parties agree that such late
charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall not constitute a waiver of
Tenant's default with respect to such overdue amount, nor prevent Landlord from exercising any
of the other rights and remedies granted hereunder.
4.6. Interest. In addition to the imposition of a late payment charge pursuant to
Section 4.4 above, any Rent that is not paid when due shall bear interest from the date due until
paid at the rate that is the lesser of twelve percent (12%) per annum (the "Interest Rate") or the
maximum rate permitted by law. Payment of interest shall not excuse or cure any default hereunder
by Tenant.
4.7. Payment. All payments due from Tenant to Landlord hereunder shall be
made to Landlord without deduction or offset, in lawful money of the United States of America.
Unless otherwise directed by Landlord in writing, payments shall be made to Landlord by
electronic funds transfer of immediately available federal funds in accordance with the payment
instructions set forth on Exhibit E attached hereto (which may be changed from time to time by
Landlord by written notice to Tenant) and shall be initiated by Tenant for settlement on or before
the applicable date due in each use; provided, however, that if the due date is not a business day,
then settlement shall be made on the next succeeding business day.
4.8. Rent. For purposes of this Lease, the term"Rent" shall mean the Base Rent,
all additional rent, including with respect to Taxes and Operating Expenses, and all of the other
monetary obligations of Tenant under this Lease. No security or guaranty which may now or
hereafter be furnished to Landlord for the payment of rent due hereunder or for the performance
by Tenant of the other terms of this Lease shall in any way be a bar or defense to any of Landlord's
remedies under this Lease or at law.
5. Taxes.
5.1. Tenant's Obligations. Tenant shall pay to Landlord, as additional rent,
Tenant's Building Percentage Share of Taxes attributable to the Building during each year of the
Term(prorated for any partial calendar year during the Term).
5.2. Definition of Taxes. The term "Taxes" shall include all transit charges,
housing fund assessments, real estate taxes and all other taxes relating to the Premises, Building,
and Project of every kind and nature whatsoever, including any supplemental real estate taxes
attributable to any period during the Term; all taxes which may be levied in lieu of real estate
taxes; and all assessments, assessment bonds, levies, fees, penalties (if a result of Tenant's
delinquency) and other governmental charges (including, but not limited to, charges for parking,
traffic and any storm drainage/flood control facilities, studies and improvements,water and sewer
service studies and improvements, and fire services studies and improvements); and all amounts
necessary to be expended because of governmental orders,whether general or special, ordinary or
extraordinary, unforeseen as well as foreseen, of any kind and nature for public improvements,
services, benefits or any other purpose, which are assessed, based upon the use or occupancy of
the Premises, Building, and/or Project, or levied, confirmed, imposed or become a lien upon the
Premises,Building, and/or Project, or become payable during the Term, and which are attributable
to any period within the Term. The term "Taxes" shall include reasonable attorneys' and
professional fees, costs and disbursements incurred in connection with proceedings to contest,
determine or reduce Taxes. If it shall not be lawful for Tenant to reimburse Landlord for any Taxes
as defined herein,the Monthly Base Rent payable to Landlord prior to the imposition of such Taxes
shall be increased to net Landlord the same net Monthly Base Rent after imposition of such
increases in Taxes as would have been received by Landlord prior to the imposition of such Taxes.
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5.3. Limitation. Nothing contained in this Lease shall require Tenant to pay any
franchise, estate, inheritance, succession or transfer tax of Landlord, or any income, profits or
revenue tax or charge upon the net income of Landlord from all sources.
5.4. Installment Election. In the case of any Taxes which may be evidenced by
improvement or other bonds or which may be paid in annual or other periodic installments,
Landlord shall elect to cause such bonds to be issued or such assessment to be paid in installments
over the maximum period permitted by law.
5.5. Estimate of Tenant's Share of Taxes. Prior to the commencement of each
calendar year during the Term, or as soon thereafter as reasonably practicable, Landlord shall
notify Tenant in writing of Landlord's estimate of the amount of Taxes which will be payable by
Tenant for the ensuing calendar year. On or before the first day of each month during the ensuing
calendar year, Tenant shall pay to Landlord in advance, together with Base Rent, onetwelfth
(1/12th) of the estimated amount; provided, however, if Landlord fails to notify Tenant of the
estimated amount of Tenant's share of Taxes for the ensuing calendar year prior to the end of the
current calendar year, Tenant shall be required to continue to pay to Landlord each month in
advance Tenant's estimated share of Taxes on the basis of the amount due for the immediately
prior month until ten(10) days after Landlord notifies Tenant of the estimated amount of Tenant's
share of Taxes for the ensuing calendar year. If at any time it appears to Landlord that Tenant's
share of Taxes payable for the current calendar year will vary from Landlord's estimate, Landlord
may give notice to Tenant of Landlord's revised estimate for the year, and subsequent payments
by Tenant for the year shall be based on the revised estimate.
5.6. Annual Adjustment. Within one hundred twenty(120)days after the close of
each calendar year during the Term, or as soon after the one hundred twenty (120) day period as
reasonably practicable, Landlord shall deliver to Tenant a statement of the adjustment to the Taxes
for the prior calendar year. If, on the basis of the statement, Tenant owes an amount that is less
than the estimated payments for the prior calendar year previously made by Tenant,Landlord shall
apply the excess to the next payment of Taxes due. If, on the basis of the statement, Tenant owes
an amount that is more than the amount of the estimated payments made by Tenant for the prior
calendar year, Tenant shall pay the deficiency to Landlord within thirty(30) days after delivery of
the statement. The year-end statement must be disputed by Tenant, if at all, by written notice to
Landlord of any objection thereto within thirty (30) days after Tenant's receipt of the year end
statement. In addition, if, after the end of any calendar year or any annual adjustment of Taxes for
a calendar year, any Taxes are assessed or levied against the Premises, Building, or Project that
are attributable to any period within the Term(e.g.,supplemental taxes or escaped taxes),Landlord
shall notify Tenant of its share of such additional Taxes and Tenant shall pay such amount to
Landlord within ten(10) days after Landlord's written request therefor.
5.7. Personal Property Taxes. Tenant shall pay or cause to be paid, not less than
ten (10) days prior to delinquency, any and all taxes, impositions and assessments levied upon
Landlord or Tenant for (a) Tenant's equipment, furniture, fixtures, improvements and other
personal property (including carpeting installed by Tenant) located in the Premises, (b) by virtue
of any Alterations (as defined in Section 10) made by or at the request of Tenant to the Premises,
and (c) upon this transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. When possible, Tenant shall cause Tenant's personal
property to be assessed and billed separately from the real or personal property of Landlord. On
request by Landlord, Tenant shall furnish Landlord with satisfactory evidence of payment of
Tenant's business personal property taxes and deliver copies of such business personal property
tax bills to Landlord.
5.8. Taxes on Tenant Improvements and Additional Assessments.
Notwithstanding any other provision hereof, (a) Tenant shall pay to Landlord the full amount of
any increase in Taxes during the Term resulting from any and all Alterations and Tenant
improvements of any kind whatsoever placed in, on or about or made to the Premises, Building or
Project for the benefit of, at the request of, or by Tenant; and (b) if at any time during the Term
under the laws of the United States Government or the State in which the Project is located, or any
political subdivision thereof, a tax or excise on rent, gross receipts tax, or any other tax however
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described, is levied or assessed by any such political body against Landlord on account of Rent, or
any portion thereof, Tenant shall pay one hundred percent (100%) of any said tax or excise
attributable to this Lease.
6. Operating Expenses.
6.1. Obligation to Pay Operating Expenses. Tenant shall pay to Landlord as
additional rent during the Term (i) Tenant's Building Percentage Share of Operating Expenses
allocated to the ownership,management, operation,repair and/or maintenance of the Building and
(ii) Tenant's Project Percentage Share of Operating Expenses allocated to the ownership,
management, operation, repair and maintenance of the Project, as reasonably determined by
Landlord; provided that Landlord has the right to allocate any Operating Expenses incurred in
connection with the ownership, operation,repair and/or maintenance of the Project to one or more
particular buildings within the Project and at such ratios as Landlord reasonably determines based
upon the nature of the Operating Expense.
6.2. Definition of Operating Expenses. The term "Operating Expenses" shall
include all expenses and costs of every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the ownership, management, operation, repair
and/or maintenance of the Building, Common Areas and/or Project, the surrounding property, and
the supporting facilities, including, without limitation: (A) all maintenance,janitorial and security
costs, (B) costs for all materials, supplies and equipment; (C) all costs of water, heat, gas power,
electricity, refuse collection, parking lot sweeping, landscaping, and other utilities and services
provided or allocated to the Building and the Common Areas; (D) all property management
expenses, including, without limitation, all property management fees and all expense and cost
reimbursements, (E) all costs of alterations or improvements to the Building or Common Areas
made to achieve compliance with federal, state and local law including, without limitation, the
Americans with Disabilities Act (42 U.S.C. Section 12101 et seq.), or to reduce Operating
Expenses or improve the operating efficiency of the Building or the Project, all of which costs will
be amortized over the useful life of such alteration or improvement as reasonably determined by
Landlord, together with interest upon the unamortized balance at the Interest Rate or such other
higher rate as may have been paid by Landlord on funds borrowed for the purpose of making the
alterations or improvements; (F)premiums for insurance maintained by Landlord pursuant to this
Lease or with respect to the Building and the Project;(G)costs for repairs,replacements,uninsured
damage or insurance deductibles and general maintenance of the Building, Common Areas and
Project, but excluding any repairs or replacements paid for out of insurance proceeds or by other
parties; (H) all costs incurred by Landlord for making any capital improvements or structural
repairs to the Building or the Common Areas,which costs will be amortized over the useful life of
such improvement, repair or modification, as reasonably determined by Landlord, together with
interest upon the unamortized balance at the Interest Rate or such other higher rate as may have
been paid by Landlord on funds borrowed for the purpose of constructing the improvements or
making the improvements or repairs; (I) all costs of maintaining machinery, equipment and
directional signage or other markers; and (J) the share allocable to the Building of dues and
assessments payable under any reciprocal easement or common area maintenance agreements or
declarations or by any owners associations affecting the Building or the Project.
6.3. Adjustment for Occupancy Factor. Notwithstanding any other provision
herein to the contrary, in the event the Building or Project, as applicable, is not fully occupied
during any calendar year during the Term, an adjustment shall be made by Landlord in
computing Operating Expenses and Taxes for such year that vary with occupancy so that same
shall be computed for such year as though the Building or Project had been ninety five percent
(95%) occupied during such year.
6.4. Estimates of Operating Expenses. Tenant shall pay to Landlord each month
at
the same time and in the same manner as monthly Base Rent one-twelfth (1/12th) of Landlord's
estimate of the amount of Operating Expenses payable by Tenant for the then-current calendar
year. If at any time it appears to Landlord that Tenant's share of Operating Expenses payable for
the current calendar year will vary from Landlord's estimate, Landlord may give notice to Tenant
of Landlord's revised estimate for the calendar year, and subsequent payments by Tenant for the
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calendar year shall be based on the revised estimate. Within one hundred twenty(120) days after
the close of each calendar year, or as soon after such 120-day period as practicable, Landlord shall
deliver to Tenant a statement in reasonable detail of the actual amount of Operating Expenses
payable by Tenant for such calendar year. Landlord's failure to provide such statement to Tenant
within the 120-day period shall not act as a waiver and shall not excuse Tenant or Landlord from
making the adjustments to reflect actual costs as provided herein. If on the basis of such statement
Tenant owes an amount that is less than the estimated payments for such calendar year previously
made by Tenant,Landlord shall credit such excess against the next payment of Operating Expenses
due. If on the basis of such statement Tenant owes an amount that is more than the estimated
payments for such calendar year previously made by Tenant, Tenant shall pay the deficiency to
Landlord within fifteen (15) days after delivery of the statement. In addition, if, after the end of
any calendar year or any annual adjustment of Operating Expenses for a calendar year, Operating
Expenses are incurred or billed to Landlord that are attributable to any period within the Term
(e.g., sewer district flow fees), Landlord shall notify Tenant of its share of such additional
Operating Expenses and Tenant shall pay such amount to Landlord within ten (10) days after
Landlord's written request therefor. The obligations of Landlord and Tenant under this Section
6.4 with respect to the reconciliation between the estimated and actual amounts of Operating
Expenses payable by Tenant for the last year of the Term shall survive the termination of this
Lease. The year-end statement must be disputed by Tenant, if at all,by written notice to Landlord
of any objection thereto within thirty(30) days after Tenant's receipt of the year end statement.
6.5. Payment at End of Term. Any amount payable by Tenant which would not
otherwise be due until after the termination of this Lease, shall, if the exact amount is uncertain at
the time that this Lease terminates, be paid by Tenant to Landlord upon such termination in an
amount to be estimated by Landlord with an adjustment to be made once the exact amount is
known.
6.6. Cost Pools. Landlord shall have the right to equitably allocate some or all of
Operating Expenses among particular classes or groups of tenants in the Building or the Project to
reflect Landlord's good faith determination that measurably different amounts or types of services,
work or benefits associated with Operating Expenses are being provided to or conferred upon such
classes or groups. The allocations of Operating Expenses by Landlord under this Section 6.6 are
sometimes referred to herein as "Cost Pools." In such event, Tenant shall be responsible to
applicable Operating Expenses for each Cost Pool. Tenant's share as to a particular Operating
Expense shall depend upon the particular Cost Pool therefor.
6.7. Landlord Obligations. The parties agree that statements in this Lease to the
effect
that Landlord is to perform certain of its obligations hereunder at its own or sole cost and expense
shall not be interpreted as excluding any cost from Operating Expenses or Taxes if otherwise
includable pursuant to the terms of this Lease.
7. Use; Compliance with Laws.
7.1. Use. The Premises shall be used and occupied by Tenant solely for the
Permitted Use set forth in the Basic Lease Information. Tenant shall not use or permit the use of
the Premises in any manner that will tend to create waste or a nuisance, or that unreasonably
disturbs other tenants or occupants of the Building or Project, or place or maintain any signs,
antennas, awnings, lighting or plumbing fixtures, loudspeakers, exterior decoration or similar
devises on or visible from the exterior of the Premises, without Landlord's prior written consent,
which consent may be withheld in Landlord's sole discretion. Tenant shall not use any corridors,
sidewalks, stairs, elevators or other areas outside of the Premises for storage or any purpose other
than access to the Premises. Tenant shall not use,keep or permit to be used or kept on the Premises
any foul or noxious gas or substance, nor shall Tenant do or permit to be done anything in and
about the Premises,either in connection with activities hereunder expressly permitted or otherwise,
which would cause an increase in premiums for or a cancellation of any policy of insurance
(including fire insurance) maintained by Landlord in connection with the Premises, Building or
Project or which would violate the terms of any covenants, conditions or restrictions, the design
guidelines,the sign guidelines affecting the Building or the land on which it is located,or the Rules
(as the term is defined under Section 7.5.2 below) (and, at Landlord's option, Tenant shall
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reimburse Landlord for any increase in insurance due to its use or occupancy of the Premises,
Building or Project within ten (10) days of Landlord's demand therefor).
7.2. Compliance with Laws.
7.2.1 Tenant. Tenant shall, at Tenant's sole expense, comply promptly with all
applicable federal, state and local laws, regulations, ordinances, rules, orders, and requirements in
effect during the Term relating to the condition, use or occupancy of the Premises, including,
without limitation, the Americans with Disabilities Act (each a "Law"). If, in order to comply
with any such Law, Tenant must obtain or deliver any permit, certificate or other document
evidencing such compliance, Tenant shall provide a copy of such document to Landlord promptly
after obtaining or delivering it. Notwithstanding the foregoing, however, Tenant shall not be
required to perform any changes to the Premises or any changes to other portions of the Project
due to applicable Laws (including,without limitation,modifications required under federal and/or
state disability access laws) unless such changes are triggered or required (or any requirement is
enforced) as a result of(i) Tenant's Alterations or Tenant-Insured Improvements (as defined in
Section 11), including Tenant's initial alterations, (ii) Tenant's particular use of the Premises, or
(iii) Tenant's particular employees or employment practices. The judgment of any court of
competent jurisdiction or the admission of Tenant in an action against Tenant, whether or not
Landlord is a party thereto, that Tenant has violated any Law shall be conclusive of that fact as
between Landlord and Tenant. Tenant shall immediately furnish Landlord with any notices
received from any insurance company or governmental agency or inspection bureau regarding any
unsafe or unlawful conditions within the Premises or the violation of any Law.
7.2.2 Landlord. Landlord, at its expense (subject to Section 6), shall cause the
structural portions of the Building, the Building systems and the Common Areas to comply with
all Laws to the extent that (a) such compliance is necessary for Tenant to use the Premises for
general office use in a normal and customary manner and for Tenant's employees and visitors to
have reasonably safe access to and from the Premises, or (b) Landlord's failure to cause such
compliance would impose liability upon Tenant under Law;provided,however,that Landlord shall
not be required to cause or pay for such compliance to the extent that (x) Tenant is required to
cause or pay for such compliance under Section 7.2.1 or 10 or any other provision hereof, or (y)
non-compliance arises under any provision of the ADA other than Title III thereof.
Notwithstanding the foregoing,Landlord may contest any alleged violation in good faith,including
by applying for and obtaining a waiver or deferment of compliance, asserting any defense allowed
by Law, and appealing any order or judgment to the extent permitted by Law; provided, however,
that after exhausting any rights to contest or appeal, Landlord shall perform any work necessary to
comply with any final order or judgment.
7.2.3 Certified Access Specialist. As of the date of this Lease, the Premises and
the Common Areas expected to be in Tenant's path of travel during the Lease term, have not
undergone an inspection by a Certified Access Specialist (CASp) regarding compliance with
construction-related accessibility standards. A CASp can inspect the subject premises and
determine whether the subject premises comply with all of the applicable construction-related
accessibility standards under state law. Although state law does not require a CASp inspection of
the subject premises,the commercial property owner or lessor may not prohibit the lessee or tenant
from obtaining a CASp inspection of the subject premises for the occupancy or potential
occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually
agree on the arrangements for the time and manner of the CASp inspection,the payment of the fee
for the CASp inspection, and the cost of making any repairs necessary to correct violations of
construction-related accessibility standards within the premises. This disclosure is made pursuant
to Section 1938 of the California Civil Code.
7.3. Trade Name. Tenant shall identify itself to the public in connection with the
Permitted Use under Tenant's Trade Name specified in the Basic Lease Information and under no
other name without Landlord's prior express written consent, which consent may be given or
withheld in Landlord's reasonable discretion.
7.4. Operating Covenant. Tenant shall continuously use, operate and actually
occupy the entire Premises and keep the entire Premises open for business during the Minimum
Business Hours specified in the Basic Lease Information, except to the extent prevented by acts
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of God, fire, casualty, war, riot or public emergency. Whether or not open for business, Tenant
shall keep its display windows and signs illuminated during such hours as Landlord may
designate in writing. If Tenant breaches its obligations under this Section 7.5, without limitation
of any other right or remedy of Landlord, Landlord at its option may charge Tenant, as additional
rent, an amount equal to one-thirtieth (1/30th) of the monthly Base Rent for each day that Tenant
is in breach of this Section 7.5.
7.5. Solicitation of Business. Tenant and Tenant's employees and agents shall not
solicit business in the parking areas of the Project or other Common Areas, nor shall Tenant
distribute any handbills or other advertising matter in the Project.
7.6. Storage, Office Space, Auction Sales. Tenant shall warehouse, store and/or
stock in the Premises only such inventory as Tenant intends to use in its operation of the
Premises. The foregoing shall not preclude occasional emergency transfers of inventory to the
other stores of Tenant, if any, not located in the Project. Tenant shall use for office, clerical or
other non-retail purposes only such space in the Premises as is from time to time reasonably
required for Tenant's business in the Premises. No auction, liquidation, going-out-of-business,
fire or bankruptcy sales may be conducted on the Premises, and no signs advertising such sales
shall be posted on the Premises.
7.7. Care of Premises. Tenant, at Tenant's expense, shall at all times keep the
Premises orderly, neat, safe, clean and free from rubbish and dirt, and vermin, and shall store all
trash, garbage and other solid waste within the Premises. Landlord may direct the use by Tenant,
at Tenant's expense, of all solid waste disposal contractors at such intervals as Landlord may
require. If Landlord shall provide or contract for any services or facilities for solid waste pickup,
sewer cleaning or vermin control, then Tenant shall be obligated to use the same and shall pay a
proportionate share of the expense thereof within ten (10) days after being billed therefor. If
Landlord does not provide such services, Tenant shall arrange for the regular pickup of all solid
waste at Tenant's expense by a contractor acceptable to Landlord.
7.8. Signs. Tenant shall not attach or install any sign to or on any part of the
outside of the Premises, the Building or the Project, or in the halls, lobbies, windows or elevator
banks of the Building without Landlord's prior written consent,which consent may be withheld
in Landlord's sole discretion. In requesting Landlord's consent, Tenant shall, at Tenant's sole
cost, submit to Landlord complete drawings and specifications describing the proposed signage,
installation details, and the identity of the proposed contractor. Any signage approved by
Landlord shall be subject to prior approval of and conformance with the requirements of the
design review committee of the Project and the design review agency of the applicable city
and/or county, and shall be installed at Tenant's sole cost and expense. Tenant, at its sole cost
and expense, shall (i)maintain all permitted signage in good condition and repair, and(ii)
remove such signage upon expiration or earlier termination of this Lease and restore the Building
and the Project to their condition existing immediately prior to the placement or erection of said
sign or signs in such a condition that no discoloration or other evidence of the prior sign appears
on the Building where the sign previously was affixed. If Tenant fails to do so, Landlord may
maintain, repair and/or remove such signage and restore the Building and or Project to its
original condition without notice to Tenant and at Tenant's expense, the cost of which shall be
payable by Tenant as additional rent. Tenant shall ensure that its signage is in compliance with
all Laws at all times.
7.9. Suitability. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty, express or implied, with respect to the
Premises, Building or with respect to the suitability or fitness of either for the conduct of
Tenant's business or for any other purpose. Tenant shall occupy the Premises in its current
"ASIS" and "WITH ALL FAULTS" condition. It is specifically understood and agreed that,
except as specifically set forth in this Lease, Landlord has no obligation and has made no
promises to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof,
and that no representations respecting the condition of the Premises, Building or Project have
been made by Landlord to Tenant. Without limitation of the foregoing or any other provision of
this Lease, Tenant shall be responsible for confirming that Tenant's operations in the Premises
are fully compliance with applicable zoning and other applicable governmental codes and Tenant
shall adjust Tenant's operations as required in order to comply with the same.
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7.10. Use of Common Areas.
7.10.1 Right to Use Common Areas. Landlord gives Tenant and its authorized
employees, agents, customers, representatives and invitees the nonexclusive right to use the
Common Areas with others who are entitled to use the Common Areas,subject to Landlord's rights
as set forth in this Section 7.4.
7.10.2 Rules. All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right to establish,modify,amend and enforce
reasonable rules and regulations with respect to the Common Areas. Tenant acknowledges receipt
of a copy of the current rules and regulations(the"Rules")attached hereto as Exhibit D, and agrees
that they may, from time to time, be modified or amended by Landlord in a commercially
reasonable manner. Tenant agrees to abide by and conform with the Rules;to cause its employees,
representatives, contractors and agents to abide by the Rules; and to use its best efforts to cause its
customers and invitees to abide by the Rules.
7.10.3 Use. Landlord shall have the right to close temporarily any portion of the
Common Areas for the purpose of discouraging use by parties who are not
tenants or customers of tenants; to use portions of the Common Areas while
engaged in making additional improvements or repairs or alterations to the
Building or the Project; to use or permit the use of the Common Areas by
others to whom Landlord may grant or have granted such rights; and to do and
perform such acts in, to, and with respect to, the Common Areas as in the use
of good business judgment Landlord shall determine to be appropriate for the
Proj ect.
7.10.4 Change in Common Areas. Landlord shall have the right to increase or
reduce the Common Areas,provided the Project meets the parking requirement under Section 7.12
below.
7.10.5 Recycling; Reporting. Tenant shall cooperate with Landlord in recycling
items under any trash recycling program that may be established by Landlord. In the event any
governmental authority having jurisdiction over the Project promulgates or revises any Law or
imposes mandatory or voluntary controls or guidelines on Landlord relating to the use or
conservation of energy or utilities or the reduction of automobile or other emissions (collectively,
"Controls") or in the event Landlord is required or elects to make alterations to the Project or the
Building in order to comply with such mandatory or voluntary Controls, Landlord may, in its sole,
but reasonable, discretion, comply with such Controls or make such alterations thereto. Such
compliance and the making of such alterations shall not constitute an eviction of Tenant,
constructive or otherwise, or impose upon Landlord any liability whatsoever, including, but not
limited to, liability for consequential damages or loss of business by Tenant.
7.11. Environmental Matters.
7.11.1 Hazardous Materials. For purposes of this Lease, "Hazardous Materials"
means any explosive, radioactive materials, hazardous wastes, or hazardous
substances, including without limitation asbestos containing materials, PCB's,
CFC's, or substances defined as "hazardous substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601-9657; the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. Section 1801-1812; the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901-6987; or any other Laws
regulating, relating to, or imposing liability or standards of conduct concerning any such
materials or substances now or at any time hereafter in effect(collectively, "Hazardous
Materials Laws"). Tenant shall not cause or permit the storage,use, generation, release,
handling or disposal (collectively, "Handling") of any Hazardous Materials in, on, or about the
Premises or the Project by Tenant or any agents, employees, contractors, licensees, subtenants,
customers, guests or invitees of Tenant (collectively with Tenant, "Tenant Parties" and,
individually, a"Tenant Party"), except that Tenant shall be permitted to use normal quantities
of office supplies or products customarily used in the conduct of general business office
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activities and cleaning supplies or products customarily used in the conduct of janitorial activities
(collectively, "Permitted Chemicals"), provided that the Handling of such Permitted Chemicals
shall comply at all times with all Laws, including Hazardous Materials Laws. Notwithstanding
anything to the contrary contained herein, however, in no event shall Tenant permit any usage of
Permitted Chemicals in a manner that may cause the Premises or Project to be contaminated by
any Hazardous Materials or in violation of any Hazardous Materials Laws. Tenant shall
immediately advise Landlord in writing of(a) any and all enforcement, cleanup, remedial,
removal, or other governmental or regulatory actions instituted, completed, or threatened
pursuant to any Hazardous Materials Laws relating to any Hazardous Materials affecting the
Premises; and(b) all claims made or threatened by any third party against Tenant, Landlord, the
Premises or Project relating to damage, contribution, cost recovery, compensation, loss, or injury
resulting from any Hazardous Materials on or about the Premises. Without Landlord's prior
written consent, Tenant shall not take any remedial action or enter into any agreements or
settlements in response to the presence of any Hazardous Materials in, on, or about the Premises.
7.11.2 Tenant's Covenants. Tenant shall at its own expense procure, maintain in
effect, and comply with all conditions of any and all permits, licenses, and other governmental and
regulatory approvals required in connection with Tenant's generation, use, storage, disposal and
transportation of Hazardous Materials that are Permitted Chemicals. Tenant acknowledges that
mold spores can grow in almost any moist location,and shall adopt and enforce good housekeeping
practices, ventilation and vigilant moisture control within the Premises so as to keep the Premises
free from mold. Tenant expressly assumes and accepts any and all risks involved in or related to,
and releases Landlord and the Indemnitees(as defined below)from liability for any personal injury
or damages to property caused by or associated with moisture or the growth or occurrence of mold
or mildew within the Premises during the Term, except to the extent such mold or mildew is due
to the gross negligence or willful misconduct of Landlord.
7.11.3 Notice. Tenant shall immediately notify Landlord in writing of: (a) any
enforcement, cleanup,removal or other governmental or regulatory action instituted, completed or
threatened pursuant to any Hazardous Materials Law; (b) any claim made or threatened by any
person or entity against Tenant or the Premises relating to damage, contribution, cost, recovery,
compensation, loss or injury resulting from or claimed to result from any Hazardous Materials;
and(c) any reports, information, inquiries or demands made, ordered, or received by or on behalf
of Tenant which arise out of or in connection with the existence or potential existence of any
Hazardous Materials in, on, under or about the Premises, the Building or the Project, including,
without limitation, any complaints, notices, warnings, asserted violations, or mandatory or
voluntary informational filings with any governmental agency in connection therewith, and
immediately supply Landlord with copies thereof.
7.11.4 Indemnity. Tenant shall be solely responsible for and shall indemnify,
defend (by counsel reasonably acceptable to Landlord), protect and hold harmless Landlord, and
each of Landlord's officers, directors, partners, employees, affiliates, joint venturers, members,
trustees, owners, shareholders, principals, agents, representatives, lenders, successors and assigns
(collectively with Landlord, the "Indemnitees"), from and against any and all claims, liabilities,
damages, fines,penalties,forfeitures,losses, cleanup and remediation costs or expenses(including
attorneys' fees) (collectively, "Claims"), including Claims in connection with the death of or
injury to any person or damage to any property whatsoever, arising from or caused in whole or in
part, directly or indirectly, by (i) the use, analysis, generation, manufacture, storage, release,
disposal, or transportation of Hazardous Materials by Tenant and any Tenant Parties to, in, on,
under, about or from the Premises, the Building or the Project, or (ii) Tenant's failure to comply
with any Hazardous Materials Law, or (iii) or any removal, cleanup, or restoration work and
materials necessary to return the Project or any other property of whatever nature located on the
Project to their condition existing prior to the Handling of Hazardous Materials in, on or about the
Premises by any Tenant Party. Tenant's obligations hereunder shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup,
detoxification or decontamination of the Premises,the Building, or the Project and the preparation
and implementation of any closure, remedial action or other required plans in connection
therewith,and shall survive the expiration or earlier termination of this Lease. Tenant's obligations
under this Section 7.5 shall survive the expiration or other termination of this Lease. If the Building
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is located in Nevada, then the foregoing is subject to Chapter 41 and Chapter 354 of the Nevada
Revised Statutes.
7.11.5 Landlord's Rights. Landlord shall have the right to enter the Premises at
all times upon reasonable prior notice for the purposes of ascertaining compliance by Tenant with
all applicable Hazardous Materials Laws;provided,however,that in the instance of an emergency
no notice shall be required. Landlord shall have the option to declare a default of this Lease for
the release or discharge of Hazardous Materials by Tenant or Tenant's employees, agents,
contractors, or invitees on the Premises,Building or Project in violation of law or in deviation from
prescribed procedures in Tenant's use or storage of Hazardous Materials. If Tenant fails to comply
with any of the provisions under this Section 7.5, Landlord shall have the right (but not the
obligation) to remove or otherwise cleanup any Hazardous Materials from the Premises, the
Building or the Project. In such case, the costs of any Hazardous Materials investigation, removal
or other cleanup(including,without limitation,transportation, storage,disposal and attorneys' fees
and costs) will be additional rent due under this Lease, whether or not a court has ordered the
cleanup, and will become due and payable on demand by Landlord.
7.12. Parking. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees during the Term the right to use in the parking areas designated on Exhibit
A=2 the number of parking spaces stated in the Basic Lease Information on a nonexclusive basis
for the use of passenger vehicles, subject to rights reserved to Landlord as specified in this Section
7.6. Landlord reserves the right to grant similar nonexclusive or exclusive rights to other tenants;
to promulgate rules and regulations relating to the use of the including parking area; to make
changes in the parking layout from time to time; and to do and perform any other acts in and to
these areas and improvements as Landlord determines to be advisable. Tenant agrees not to
overburden the parking facilities and to abide by and conform with the rules and regulations and
to cause its employees and agents to abide by and conform to the rules and regulations. Upon
request, Tenant shall provide Landlord with license plate numbers of all vehicles driven by its
employees and to cause Tenant's employees to park only in spaces specifically designated for
tenant parking. Landlord shall have the unqualified right to rearrange or reduce the number of
parking spaces. Landlord may,in its sole discretion,assign any unreserved and unassigned parking
privileges, and/or make all or a portion of such privileges reserved and/or institute a valet/tandem
parking system serving the Building, and/or charge visitors for parking. Tenant may only park
normally sized passenger automobiles or motorcycles,fully contained inside the marked stalls, and
overnight parking is prohibited without the written consent of Landlord (which may be withheld
in Landlord's sole discretion). Tenant shall not allow any contractor, agent or employee vehicles
be loaded,unloaded, or parked in areas other than those designated by Landlord for such activities.
If Tenant permits or allows any of the prohibited activities described herein, then Landlord shall
have the right, without notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost thereof to Tenant, which cost shall
be immediately payable by Tenant upon demand by Landlord. Landlord shall not be liable for any
loss,injury or damage to persons using any Project parking areas, or automobiles or other property
therein, it being agreed that, to the fullest extent permitted by law, the use of any parking shall be
at the sole risk of Tenant and its employees, contractors, agents and invitees.
8. Utilities and Services. Tenant shall pay for all water, sewer, gas, electricity, heat,
cooling, telephone, internet, refuse collection and other utility-type services furnished to
Tenant or the Premises, together with all related installation or connection charges or
deposits. Landlord shall have the right, at Tenant's sole cost and expense, to install
separate metering for electricity, water or gas to the Premises or to separately charge
Tenant for any quantity of such utilities consumed by Tenant beyond the amounts
customarily consumed by tenants in the Project as reasonably determined by Landlord.
To the extent any of the foregoing services are provided by Landlord, Tenant shall
reimburse Landlord for all costs incurred by Landlord in connection with the provision of
such services based on Landlord's reasonable estimate of the level of Tenant's use or
consumption of such services. Landlord shall bill Tenant on a monthly or other periodic
basis for such services and payment shall be made by Tenant within ten (10) days after
submittal of Landlord's statement. Landlord's obligation to provide utilities and services
for the Premises are subject to Laws (including the rules or actions of the public utility
company furnishing the utility or service), and shutdowns for maintenance and repairs,
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for security purposes, or due to strikes, lockouts, labor disputes, fire or other casualty,
acts of God, or other causes beyond the control of Landlord. In the event of an
interruption in, or failure or inability to provide any service or utility for the Premises for
any reason, such interruption, failure or inability shall not constitute an eviction of
Tenant, constructive or otherwise, or impose upon Landlord any liability whatsoever,
including, but not limited to, liability for consequential damages or loss of business by
Tenant, or entitle Tenant to any abatement or offset of Rent. Tenant hereby waives the
provisions of California Civil Code Section 1932(l) or any other applicable existing or
future Law permitting the termination of this Lease due to such interruption, failure or
inability.
9. Maintenance and Repairs.
9.1 Tenant's Repairs and Maintenance. Tenant shall, at Tenant's expense,
maintain the Premises in good order, condition and repair, including without limitation, (i) all
interior surfaces, ceilings, walls, door frames, window frames, floors, carpets, draperies, window
coverings and fixtures, (ii) all windows, doors, locks and closing devices, entrances, plate glass,
and signs, (iii) all plumbing and sewage pipes, fixtures and fittings, (iv) all phone lines, electrical
wiring, equipment, switches, outlets and light bulbs, (v) all of Tenant's personal property,
improvements and Alterations, (vi) any fire detection, fire sprinkler or extinguisher equipment,
and (vii) all other fixtures and special items installed by or for the benefit of, or at the expense of
Tenant. Tenant shall immediately replace all broken glass in the Premises, including exterior glass
and glass doors, with glass equal to or in excess of the specification and quality of the original
glass. Tenant, at its expense, shall maintain in good operating condition and repair, all heating,
ventilating, and air conditioning equipment installed in or exclusively serving the Premises,
including replacement when reasonably necessary. Tenant shall keep in force a preventive
maintenance contract with a qualified maintenance company acceptable to Landlord covering all
such heating,ventilating and air conditioning equipment,and shall annually provide Landlord with
a copy of this contract. Tenant shall not enter onto the roof area of the Building, except for the
purpose of maintaining the heating, ventilating, and air conditioning equipment to the extent
Tenant is required to do so under the terms of this Lease. Tenant shall repair any damage to the
roof area caused by its entry.
9.2 Landlord's Repairs and Maintenance. Landlord shall keep in good condition
and repair the foundation, roof structure, exterior walls and other structural parts of the Building,
and all other portions of the Building not the obligation of Tenant or any other tenant in the
Building. Tenant expressly waives the benefits of any statute, including Civil Code Sections 1941
and 1942, which would afford Tenant the right to make repairs at Landlord's expense or to
terminate this Lease due to Landlord's failure to keep the Building in good order, condition and
repair. In connection with any such alteration, improvement or repair, Landlord may erect
scaffolding and other structures reasonably required for the work to be performed. In no event
shall such entry or work entitle Tenant to an abatement of rent, constitute an eviction of Tenant,
constructive or otherwise, or impose upon Landlord any liability whatsoever, including but not
limited to liability for consequential damages or loss of business or profits by Tenant. Landlord
shall use good faith efforts to cause all such work to be done in such a manner as to cause as little
interference to Tenant as reasonably possible without incurring additional expense. Landlord shall
at all times retain a key with which to unlock all of the doors in the Premises, except Tenant's
vaults and safes. If an emergency necessitates immediate access to the Premises, Landlord may
use whatever force is necessary to enter the Premises. Any such entry to the Premises shall not
constitute a forcible or unlawful entry into the Premises, a detainer of the Premises, or an eviction
of Tenant from the Premises, or any portion thereof. Landlord shall have no liability to Tenant for
any damage, inconvenience or interference with the use of the Premises by Tenant as the result of
Landlord performing any such maintenance and repair work.
9.3 Failure to Repair or Maintain. In the event Tenant fails to perform Tenant's
obligations under this Section 9, Landlord may, but shall not be required to, give Tenant notice to
do such acts as are reasonably required to so maintain the Premises. If Tenant shall fail to
commence such work and diligently prosecute it to completion, then Landlord shall have the right
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(but not the obligation) to do such acts and expend such funds at the expense of Tenant as are
reasonably required to perform such work. Any amounts so expended by Landlord,plus a fifteen
percent(15%) administrative fee, will be additional rent due under this Lease, due and payable on
demand by Landlord, together with interest at the Interest Rate from the date incurred until paid
by Tenant. Landlord shall have no liability to Tenant for any such damages, inconvenience or
interference with the use of the Premises by Tenant as a result of performing such work.
9.4 Surrender of Premises; Holdover. Upon the expiration or earlier termination
of this Lease, Tenant shall surrender the Premises to Landlord in good condition and repair,
ordinary wear and tear excepted,free from all persons,debris,personal property and trade fixtures.
9.4.1 The term "ordinary wear and tear" as used herein shall mean wear and tear which
manifests itself solely through normal intensity of use and passage of time consistent with the
employment of commercially prudent measures to protect finishes and components from damage
and excessive wear,the application of regular and appropriate preventative maintenance practices
and procedures,routine cleaning and servicing,waxing,polishing,adjusting,repair,refurbishment
and replacement at a standard of appearance and utility and as often as appropriate for Class A
corporate and professional office occupancies, or other commercial occupancies if applicable, in
the vicinity of the Project (the "Market"). The term "ordinary wear and tear" would thus
encompass the natural fading of painted surfaces, fabric and materials over time, and carpet wear
caused by normal foot traffic. To the extent that such wear and tear exceeds the normal Class A
office or commercial occupancy standards of the Market, such would be considered items of
deferred maintenance indicative of a degradation of the improvements. The term "ordinary wear
and tear" shall not include any damage or deterioration that could have been prevented by Tenant's
employment of ordinary prudence, care and diligence in the occupancy and use of the Premises
and the performance of all of its obligations under this Lease. Items not considered reasonable
wear and tear hereunder include the following for which Tenant shall bear the obligation for repair
and restoration (except to the extent caused by the gross negligence or willful misconduct of
Landlord or its employees or agents) (i) excessively soiled, stained, worn or marked surfaces or
finishes; (ii)damage, including holes in building surfaces(e.g., cabinets,doors,walls, ceilings and
floors) caused by the installation or removal of Tenant's trade fixtures, furnishings, decorations,
equipment, alterations, utility installations, security systems, communications systems (including
cabling, wiring and conduits), displays and signs; and (iii) damage to any component, fixture,
hardware, system or component part thereof within the Premises, and any such damage to the
Building or Project, caused by Tenant or its agents, contractors or employees, and not fully
recovered by Landlord from insurance proceeds. Tenant, at its sole cost and expense, agrees to
repair any damages to the Premises caused by or in connection with the removal of any articles of
personal property,business or trade fixtures, signs,machinery, equipment, cabinetwork, furniture,
moveable partitions or permanent improvements or additions,including without limitation thereto,
repairing the floor and patching and painting the walls where required by Landlord to Landlord's
reasonable satisfaction. Tenant shall indemnify Landlord against any loss or liability resulting
from delay by Tenant in so surrendering the Premises, including without limitation, any claims
made by any succeeding tenant resulting from such delay.
9.4.2. Prior to the expiration or termination of this Lease, Tenant shall remove from the Premises
any Alterations as directed by Landlord, shall surrender all keys to the Premises or any other part
of the Building or Project,and shall make known to Landlord the combination of locks on all safes,
cabinets and vaults that may be located in the Premises.
9.4.3 Should Tenant, or any of its successors in interest, hold over in the Premises,
or any part thereof, after the expiration of the Term unless otherwise agreed to in writing, Tenant's
continued possession shall be on the basis of a tenancy at sufferance and Tenant shall pay as
monthly Base Rent during the holdover period an amount equal to (200%) of the Base Rent and
additional Rent payable under this Lease for the last full month prior to the date of such expiration
or termination. In addition, Tenant shall indemnify, protect, defend and hold harmless Landlord
for all losses, expenses and damages, including any consequential damages incurred by Landlord,
as a result of Tenant failing to surrender the Premises to Landlord and vacate the Premises by the
end of the Term. The inclusion of the preceding sentence shall not be construed as Landlord's
permission for Tenant to hold over.
9.4.4 Tenant shall indemnify, defend and hold Landlord harmless from and
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against all Claims incurred by or asserted against Landlord and arising directly or indirectly from
Tenant's failure to timely surrender the Premises, including but not limited to (i) any rent payable
by or any loss, cost, or damages, including lost profits, claimed by any prospective tenant of the
Premises or any portion thereof, and(ii)Landlord's damages as a result of such prospective tenant
rescinding or refusing to enter into the prospective lease of the Premises or any portion thereof by
reason of such failure to timely surrender the Premises.
9.4.5 This Section 9.4 shall survive termination or earlier expiration of the Lease.
9.5 Construction. Tenant acknowledges that from time to time throughout the term of this
Lease, construction work may be performed in and about the Building and the Real Property by
Landlord, contractors of Landlord, or other tenants or their contractors, and that such construction
work may result in noise and disruption to Tenant's business. In addition to and without limiting
the foregoing waiver or any other provision of this Lease, Tenant agrees that Landlord shall not be
liable for, and Tenant expressly waives and releases Landlord and the other Indemnitees from any
Claims, including without limitation, any and all consequential damages or interruption or loss of
business, income or profits, or claims of actual or constructive eviction or for abatement of rental,
arising or alleged to be arising as a result of any such construction activity.
10. Alterations.
10.1 Consent Required. Tenant shall not make any alterations, improvements or
additions (each, an "Alteration") in, on or about the Premises without Landlord's prior written
consent, which consent may be withheld by Landlord in its sole and absolute discretion.
Notwithstanding the foregoing, Tenant may make Alterations without Landlord's prior written
consent but following at least ten (10) days written notice to Landlord where (i) the reasonably
estimated cost of the Alteration and together with the cost of any other Alteration made during the
immediately preceding twelve (12)months does not exceed Ten Thousand Dollars ($10,000), and
(ii)such Alterations do not affect or involve the structural integrity,roof membrane,exterior areas,
building systems or water-tight nature of the Premises, Building or Project, and (iii) such
Alterations are of a cosmetic nature (such as new paint or carpeting) and not visible from outside
the Building. In requesting Landlord's consent, Tenant shall, at Tenant's sole cost, submit to
Landlord complete drawings and specifications describing the Alteration and the identity of the
proposed contractor.
10.2 Conditions.
10.2.1 Notice. Before commencing any work relating to
Alterations, Tenant shall
notify Landlord of the expected date of commencement thereof and of the anticipated cost thereof.
Landlord shall then have the right at any time and from time to time to post and maintain on the
Premises such notices as Landlord reasonably deems necessary to protect the Premises and
Landlord from mechanics' liens or any other liens.
10.2.2 Liens. Tenant shall pay when due all claims for labor or
materials
furnished to Tenant for use in the Premises. Tenant shall not permit any mechanics' liens or any
other liens to be levied against the Premises for any labor or materials furnished to Tenant in
connection with work performed on the Premises by or at the direction of Tenant. Tenant shall
indemnify, hold harmless and defend Landlord (by counsel reasonably satisfactory to Landlord)
from any liens and encumbrances arising out of any work performed or materials furnished by or
at the direction of Tenant. In the event that Tenant shall not, within five (5) days following the
imposition of any such lien, cause such lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other remedies provided herein by law, the
right,but not the obligation,to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith, including attorneys' fees and costs, shall be
payable to Landlord by Tenant on demand with interest at the Interest Rate.
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10.2.3 Compliance with Laws. All Alterations in or about the
Premises
performed by or on behalf of Tenant at Tenant's sole cost and expense (including the expense of
complying with all present and future Laws and any other work required to be performed in other
areas within or outside the Premises by reason of the Alterations), shall be done in a first-class,
workmanlike manner, shall not unreasonably lessen the value of leasehold improvements in the
Premises, and shall be completed in compliance with all applicable Laws as well as the
requirements of insurers of the Premises and the Building.
10.2.4 Landlord Review. The general contractor and subcontractors
performing Alterations in the Premises shall be subject to Landlord's prior written
approval, not to be unreasonably withheld or delayed, and shall be reputable and licensed,
and maintain such insurance as Landlord may reasonably require. Regardless of the
contractors who perform the work pursuant to the above, Tenant shall pay Landlord on
demand prior to or during the course of such construction an amount(the "Alteration
Operations Fee") equal to two percent(2%) of the total cost of the Alteration (and for
purposes of calculating the Alteration Operations Fee, such cost shall include
architectural and engineering fees, but shall not include permit fees) as compensation to
Landlord for Landlord's internal review of Tenant's plans and general oversight of the
construction(which oversight shall be solely for the benefit of Landlord and shall in no
event be a substitute for Tenant's obligation to retain such project management or other
services as shall be necessary to ensure that the work is performed properly and in
accordance with the requirements of this Lease) or four percent(4%) of the total cost of
the Alteration where Tenant asks Landlord to provide management oversight services
therefor and Landlord agrees to do so. Tenant shall also reimburse Landlord for
Landlord's actual and reasonable out-of-pocket expenses, if any, for fees paid to third
party architects, engineers and other consultants for review of the plans and
specifications, and for any other actual and reasonable out-of-pocket costs incurred by
Landlord as result of the work. Upon request, Tenant shall advise Landlord of the total
cost of the Alteration,providing supporting documentation. Landlord, at Landlord's sole
discretion, may refuse to grant Tenant permission for Alterations that require, because of
application of Americans with Disabilities Act or other laws, substantial improvements or
alterations to be made to the Common Areas. Tenant shall provide Landlord with a set of
"as built" drawings upon completion of any Alterations.
10.2.5 End of Term. Landlord,by written notice, may require that
Tenant, at Tenant's expense, remove any Alterations prior to or upon the expiration of
this Lease, and restore the Premises to their condition prior to such Alterations, including
without limitation the removal of all conduits, telephone and data cabling. Unless
Landlord requires their removal, as provided above, all Alterations made to the Premises
shall become the property of Landlord and remain upon and be surrendered with the
Premises upon the expiration of this Lease; provided, however, that Tenant's machinery,
equipment and trade fixtures, other than any which may be affixed to the Premises so that
they cannot be removed without material damage to the Premises, shall remain the
property of Tenant and shall be removed by Tenant subject to the provisions of Section
9.4 above.
10.2.6 Labor Disturbances. Tenant agrees not to employ any
person, entity or
contractor for any work in the Premises(including moving Tenant's equipment and furnishings in,
out or around the Premises) whose presence may give rise to a labor or other disturbance in the
Building and Tenant shall take whatever steps are necessary to end any labor disturbance in or at
the Real Property related to its failure to employ union labor.
11. Insurance and Indemnity.
11.1 Insurance. Tenant shall, at Tenant's expense,maintain during the term of this
Lease (and, if Tenant occupies or conducts activities in or about the Premises prior to or after the
term hereof, then also during such pre-term or post-term period)the following insurance:
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11.1.1 Commercial General Liability_ Insurance. Commercial
general
liability insurance (occurrence form) having a combined single limit of not less than $2,000,000
per occurrence and $2,000,000 aggregate per location, if Tenant has multiple locations,providing
coverage for, among other things, blanket contractual liability, premises, product/completed
operations and personal injury coverage (in a form, with a deductible amount, and with carriers
reasonably acceptable to Landlord). Where commercial general liability insurance contains an
aggregate limit, such limit must apply separately to the Premises, on a per location basis. A
combination of Commercial General Liability and Excess or Umbrella liability may be used to
meet this requirement.
11.1.2 Automobile Liability Insurance. If Tenant operates owned,
leased
or non-owned vehicles on the Project, comprehensive automobile liability insurance having a
combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence, and
insuring Tenant against liability for claims arising out of ownership, maintenance or use of any
owned,hired,borrowed or non-owned automobiles. A combination of Commercial Auto Liability
and Excess or Umbrella liability may be used to meet this requirement.
11.1.3 Workers' Compensation and Employer's Liability Insurance.
Workers' compensation insurance having limits not less than those required by state
statute and federal statute, if applicable, and covering all persons employed by Tenant in
the conduct of its operations on the Premises (including the all states endorsement and, if
applicable, the volunteers endorsement), together with employer's liability insurance
coverage in the amount of at least Two Million Dollars ($2,000,000), including a waiver
of subrogation in favor of Landlord and it's property manager. A combination of
Employers' Liability and Excess or Umbrella liability may be used to meet this
requirement.
11.1.4 Property Insurance. "Special Form"property insurance (or
its
equivalent if "Special Form" property insurance is not available), including vandalism and
malicious mischief,boiler and machinery comprehensive form, if applicable, and endorsement for
water damage, each covering damage to or loss of (i) all office furniture, trade fixtures, office
equipment, free-standing cabinet work, movable partitions, merchandise and all other items of
Tenant's property in the Premises installed by,for,or at the expense of Tenant,including electronic
data processing equipment ("EDP Equipment"), and (ii) any leasehold improvements in the
Premises, whenever and by whomever installed or paid for, whether pursuant to this Lease or
pursuant to any prior lease or other agreement to which Tenant was a party(the "TenantInsured
Improvements"). EDP Equipment, media and extra expense shall be covered for perils insured
against in the so-called "EDP Form". If the property of Tenant's invitees is to be kept in the
Premises,warehouse's legal liability or bailee customers insurance for the full replacement cost of
such property;
11.1.5 Business Income/Extra Expense Insurance. Business income
with
extra expense insurance (form CP 0030 or equivalent) in an amount not less than the annual Base
Rent and additional rent payable by Tenant hereunder for the then current calendar year, with a
minimum fifty percent (50%) coinsurance percentage, the agreed value option and building
ordinance (Form CP 1531 or equivalent). Any boiler and machinery policies or endorsements
obtained shall also include these same provisions and coverages; and
11.1.6 Additional Insurance. Any such other insurance as Landlord
or Landlord's lender may reasonably require.
11.2 General. Each insurance policy required pursuant to this Section shall be
issued by a carrier authorized to do business in the state in which the Project is Located, and have
a policyholders and financial rating of at least A:IX Class status as rated in the most recent edition
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of Best's Key-Rating guide. Tenant's commercial general liability insurance policy shall be
endorsed to provide that (i) it may not be canceled or altered in such a manner as to adversely
affect the coverage afforded thereby without thirty(30) days' prior written notice to Landlord, (ii)
Landlord, its property manager, and any person or entity reasonably designated by Landlord, is
designated as an additional insured, and (iii) such insurance is primary with respect to Landlord,
its property manager, and other designated additional insureds, and that any other insurance
maintained by Landlord is excess and noncontributing with such insurance. The above policies
shall not have deductibles in excess of$10,000 without Landlord's written consent. If, in the
opinion of Landlord's lender or in the commercially reasonable opinion of Landlord's insurance
adviser, the specified amounts of coverage are no longer adequate, such coverage shall, within
thirty(30) days' written notice to Tenant, be appropriately adjusted. Prior to the Commencement
Date (or Tenant's earlier entry onto the Premises), Tenant shall deliver to Landlord a duplicate of
such policy or a certificate thereof to Landlord for retention by it with endorsements. At least five
(5) days prior to the expiration of such policy or any renewal or modification thereof, Tenant shall
deliver to Landlord a replacement or renewal binder, followed by a duplicate policy or certificate
within a reasonable time thereafter. If Tenant fails to obtain such insurance or to furnish Landlord
any such duplicate policy or certificate as herein required, Landlord may, at its election, without
notice to Tenant and without any obligation to do so, procure and maintain such coverage and
Tenant shall reimburse Landlord on demand as additional rent for any premium so paid by
Landlord. In no event shall any insurance maintained by Tenant hereunder or required to be
maintained by Tenant hereunder be deemed to limit or satisfy Tenant's indemnification or other
obligations or liability under this Lease. Nothing in this Section 11 shall be construed as creating
or implying the existence of(i) any ownership by Tenant of any Alterations or improvements in
or to the Premises or (ii) any right on Tenant's part to make any addition, Alteration or
improvement in or to the Premises.
11.3 Waiver of Subrogation. Each party hereto hereby releases the other
respective
party and, in the case of Tenant as the releasing party, the other Indemnitees, and the respective
partners, shareholders, agents, employees, officers, directors and authorized representatives of
such released party, from any claims such releasing party may have for damage to the Project,
Building, the Premises or any of such releasing party's fixtures,personal property, improvements
and alterations in or about the Premises, the Building or the Project that is caused by or results
from risks insured against under any "special form" insurance policies actually carried by such
releasing party or deemed to be carried by such releasing party; provided, however, that such
waiver shall be limited to the extent of the net insurance proceeds payable by the relevant insurance
company with respect to such loss or damage (or in the case of deemed coverage,the net proceeds
that would have been payable). For purposes of this Section 11.3, Tenant shall be deemed to be
carrying any of the insurance policies required pursuant to this Lease but not actually carried by
Tenant, and Landlord shall be deemed to carry standard special form property insurance on the
Building. Each party hereto shall cause each such fire and extended coverage insurance policy
obtained by it to provide that the insurance company waives all rights of recovery by way of
subrogation against the other respective party and the other released parties in connection with any
matter covered by such policy.
11.4 Landlord's Insurance. During the Term, Landlord shall keep the Building
insured against loss or damage by fire,with extended coverage and vandalism,malicious mischief
and special extended perils (special form) endorsements or their equivalents, in amounts not less
than one hundred percent (100%) of the replacement cost of the Building and structures insured.
Landlord may maintain rent insurance, for the benefit of Landlord,equal to at least one year's Base
Rent hereunder. If this Lease is terminated as a result of damage by fire, casualty or earthquake,
all insurance proceeds shall be paid to and retained by Landlord, subject to the rights of any
authorized encumbrancer of Landlord.
11.5 Earthquake and Flood. Tenant acknowledges that Landlord may not carry
earthquake and/or flood insurance during the entirety of the Term of the Lease'but Landlord
reserves the right to procure such coverage and otherwise alter its coverage and limits in its
reasonable discretion.
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11.6 Indemnity. Tenant waives all claims against Landlord for any injury to
Tenant's business or loss of income therefrom, damage to any property or injury to or death of any
person in, on, or about the Premises,the Building, or any other portion of the Project arising at any
time and from any cause whatsoever, including without limitation, water leakage of any character
from the roof, walls, basement, fire sprinklers, appliances, air conditioning, plumbing or other
portion of the Premises or the Project, or gas, fire, explosion, falling plaster, steam, electricity, or
any malfunction within the Premises or the Project, or acts of other tenants of the Project, unless
caused by the gross negligence or willful misconduct of Landlord or its agents, employees or
contractors. Tenant shall indemnify, defend (by counsel reasonably satisfactory to Landlord) and
hold harmless Landlord, and Landlord Indemnitees from and against all Claims, arising by reason
of any death, bodily injury, personal injury, property damage or any other injury or damage in
connection with(i) Tenant's use or occupancy of the Premises; (ii) any condition or occurrence in
or about or resulting from any condition or occurrence in or about the Premises during the Term;
(iii) any construction work undertaken by or on behalf of Tenant in or about the Premises; (iv) any
act or omission of Tenant, or Tenant's agents, representatives, officers, directors, shareholders,
partners, employees, successors and assigns,wherever it occurs; or(iv) any Event of Default. The
foregoing indemnity obligation of Tenant shall include reasonable attorneys' fees, and all other
reasonable costs and expenses incurred by Landlord from the first notice that any claim or demand
is to be made. The provisions of this Section shall survive the termination or expiration of this
Lease with respect to any damage, injury, or death occurring prior to such expiration or
termination.
11.7 Evidence of Insurance. Landlord utilizes myCOI to track and verify tenants'
insurance coverage so that tenants do not have to spend time requesting, collecting or delivering a
Certificate of Insurance ("COI") to Landlord. Upon the mutual execution and delivery of this
Lease, Tenant will receive an email from registrationgmycoitracking com. Tenant must follow
the instructions contained in the email and complete the online registration. Upon completion of
registration, myCOI will request proof of insurance directly from Tenant's insurance agent(s),
which must list Landlord and Basin Street Properties as additional insureds. Tenant shall not be
permitted to take occupancy of, commence work in, or otherwise enter the Premises without a
representative of Landlord until Tenant is registered with myCOI and a compliant COI has been
received, and any such delay in occupancy, construction or entry shall not delay the
Commencement Date of the Lease or Tenant's obligation to pay Rent. Tenant shall give Landlord
not less than thirty (30) days' written notice prior to any cancellation or material change in
coverage.
12. Damame or Destruction.
12.1 Landlord's Obligation to Rebuild. Subject to the provisions of Sections 12.2,
12.3 and 12.4 below, if, during the Term, the Premises are totally or partially destroyed from any
insured casualty,Landlord shall,within ninety(90)days after the destruction, commence to restore
the Premises to substantially the same condition as they were in immediately before the destruction
and prosecute the same diligently to completion. Such destruction shall not terminate this Lease.
Landlord's obligation shall not include repair or replacement of Tenant's Alterations or Tenant's
equipment, furnishings, fixtures and personal property. If the existing Laws do not permit the
Premises to be restored to substantially the same condition as they were in immediately before
destruction, and Landlord is unable to get a variance to such laws to permit the commencement of
restoration of the Premises within the 90-day period,then either party may terminate this Lease by
giving written notice to the other party within thirty(30)days after expiration of the 90-day period.
12.2 Right to Terminate. Landlord shall have the option to terminate this Lease if
the Premises or the Building is destroyed or damaged by fire or other casualty, regardless of
whether the casualty is insured against under this Lease,if Landlord reasonably determines that(i)
there are insufficient insurance proceeds made available to Landlord to pay all of the costs of the
repair or restoration or (ii) the repair or restoration of the Premises or the Building cannot be
completed within one hundred eighty(180) days after the date of the casualty. If Landlord elects
to exercise the right to terminate this Lease as a result of a casualty, Landlord shall exercise the
right by giving Tenant written notice of its election to terminate this Lease within forty-five (45)
days after the date of the casualty, in which event this Lease shall terminate fifteen (15) days after
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the date of the notice. If Landlord does not exercise its right to terminate this Lease, Landlord
shall promptly commence the process of obtaining all of the necessary permits and approvals for
the repair or restoration of the Premises or the Building as soon as practicable and thereafter
prosecute the repair or restoration of the Premises or the Building diligently to completion and this
Lease shall continue in full force and effect.
12.3 Last Year of Term. In addition to Landlord's right to terminate this Lease
under Section 12.2, Landlord shall have the right to terminate this Lease upon thirty (30) days'
prior written notice to Tenant if the Premises or Building is substantially destroyed or damaged
during the last twelve (12) months of the Term. Landlord shall notify Tenant in writing of its
election to terminate this Lease under this Section 12.3, if at all, within forty-five (45) days after
Landlord determines that the Premises or Building has been substantially destroyed. If Landlord
does not elect to terminate this Lease, the repair of the Premises or Building shall be governed by
Sections 12.1, 12.2 and 12.4.
12.4. Uninsured Casualty. If the Premises are damaged from any uninsured
casualty to any extent whatsoever, Landlord may within ninety (90) days following the date of
such damage: (i) commence to restore the Premises to substantially the same condition as they
were in immediately before the destruction and prosecute the same diligently to completion, in
which event this Lease shall continue in full force and effect; or (ii) within the 90-day period
Landlord may elect not to so restore the Premises, in which event this Lease shall cease and
terminate. In either such event, Landlord shall give Tenant written notice of its intention within
the 90-day period.
12.5. Abatement of Rent. If the fire or other casualty damages the Premises
necessary for Tenant's use and occupancy of the Premises, and Tenant ceases to use any portion
of the Premises as a result of such damage, and the damage does not result from the negligence or
willful misconduct of Tenant or any other Tenant Parties, then during the period the Premises or
portion thereof are rendered unusable by such damage, until Landlord substantially completes its
reconstruction obligations, Base Rent shall be proportionately reduced based upon the extent to
which the damage and repair prevents Tenant from conducting, and Tenant does not conduct, its
business at the Premises. All other obligations of Tenant under this Lease shall remain in full force
and effect. In no event shall Tenant be entitled to any compensation or damages from Landlord
for loss of use of the whole or any part of the Premises or for any inconvenience occasioned by
any such destruction, rebuilding or restoration of the Premises, the Building or access thereto,
except for the rent abatement expressly provided above. Tenant hereby waives California Civil
Code Sections 1932(2) and 1933(4), providing for termination of hiring upon destruction of the
thing hired and Sections 1941 and 1942,providing for repairs to and of premises.
13. Eminent Domain.
13.1. Condemnation. If all or any part of the Premises shall be taken as a result of
the exercise of the power of eminent domain or sold in lieu of condemnation("Condemned"),this
Lease shall terminate as to the part so taken as of the date of title vesting in such proceeding. In
the case of a partial condemnation of greater than fifty percent (50%) of the rentable area of the
Premises, either Landlord or Tenant shall have the right to terminate this Lease as to the balance
of the Premises by notice to the other within sixty (60) days after the date of title vesting in such
proceeding;provided,however, that Tenant's right to terminate this Lease is conditioned upon the
remaining portion of the Premises being of such size or configuration that such remaining portion
of the Premises is unusable or uneconomical for Tenant's business. In the event of a partial
condemnation of the Premises which does not result in a termination of this Lease, the monthly
Base Rent thereafter to be paid shall be equitably reduced on a rentable square footage basis. If
all or any material part of the Project other than the Premises is taken,Landlord may terminate this
Lease upon written notice to Tenant given within ninety(90) days after the date of taking.
13.2. Award. Landlord shall be entitled to all compensation,damages,income,rent
awards and interest thereon whatsoever which may be paid or made in connection with any taking
and Tenant shall have no claim against Landlord or any governmental authority for the value of
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any unexpired term of this Lease or of any of the improvements or Alterations in the Premises;
provided, however, that the foregoing shall not prohibit Tenant from prosecuting a separate claim
against the taking authority for an amount separately designated for Tenant's relocation expenses
or the interruption of or damage to Tenant's business or as compensation for Tenant's personal
property,trade fixtures,Alterations or other improvements paid for by Tenant so long as any award
to Tenant will not reduce the award to Landlord.
14. Assignment and Subletting.
14.1. Assignment and Subletting; Prohibition. Tenant shall not assign, mortgage,
pledge or otherwise transfer this Lease, in whole or in part (each hereinafter referred to as an
"assignment"), nor sublet or permit occupancy by any party other than Tenant of all or any part
of the Premises (each hereinafter referred to as a "sublet" or "subletting"), without the prior
written consent of Landlord in each instance, which consent shall not be unreasonably withheld.
No assignment or subletting by Tenant shall relieve Tenant of any obligation under this Lease,
including Tenant's obligation to pay Base Rent and additional rent hereunder. Any purported
assignment or subletting contrary to the provisions of this Lease without Landlord's prior written
consent shall be void and shall constitute an Event of Default entitling Landlord to terminate this
Lease and to exercise all other remedies available to Landlord under this Lease and at law. The
consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity
for obtaining Landlord's consent to any subsequent assignment or subletting. Landlord may
consent to any subsequent assignment or subletting, or any amendment to or modification of this
Lease with the assignees of Tenant, without notifying Tenant or any successor of Tenant, and
without obtaining its or their consent thereto, and such action shall not relieve Tenant or any
successor of Tenant of any liability under this Lease. As additional rent hereunder, Tenant shall
reimburse Landlord for all reasonable legal fees and other expenses incurred by Landlord in
connection with any request by Tenant for consent to an assignment or subletting.
14.2. Information to be Furnished. If Tenant desires at any time to assign its
interest in this Lease or sublet the Premises, Tenant shall first notify Landlord of its desire to do so
and shall submit in writing to Landlord: (i)the name of the proposed assignee or subtenant; (ii)the
nature of the proposed assignee's or subtenant's business to be conducted in the Premises; (iii)the
terms and provisions of the proposed assignment or sublease, including the date upon which the
assignment shall be effective or the commencement date of the sublease (hereinafter referred to as
the "Transfer Effective Date") and a copy of the proposed form of assignment or sublease; and
(iv) such financial information, including financial statements, and other information as Landlord
may reasonably request concerning the proposed assignee or subtenant.
14.3. Landlord's Election. At any time within thirty(30) days after Landlord's
receipt of the information specified in Section 14.3, Landlord may, by written notice to Tenant,
elect to (i) terminate this Lease as to the space in the Premises that Tenant proposes to sublet; (ii)
terminate this Lease as to the entire Premises (available only if Tenant proposes to assign all of its
interest in this Lease or the total amount of rentable square feet of space that Tenant proposes to
sublease, together with the aggregate amount of rentable square feet of space in the Premises
previously subleased by Tenant or recaptured by Landlord pursuant to this Section, exceeds fifty
percent (50%) or more of the original Premises); or (iii) consent to the proposed assignment or
subletting by Tenant.
14.4. Termination. If Landlord elects to terminate this Lease with respect to all or a
portion of the Premises pursuant to Section 14.4(i)or(ii)above,this Lease shall terminate effective
as of the later of(a)the one hundred twentieth(120th)day after Landlord notifies Tenant in writing
of its election to terminate this Lease or(b)the Transfer Effective Date. If
Landlord terminates this Lease with respect to less than all of the Premises, Tenant shall, at
Landlord's sole election, either (i) reimburse Landlord for all costs incurred by Landlord in
partitioning the Premises to provide the occupants of each premises commercially reasonable and
secured access to their respective premises, legal fire exits, access to bathrooms and utility rooms
and loading facilities, and in separately metering all utility services (including heating and air
conditioning zoning) servicing each premises, including all design, permitting and construction
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costs, or (ii) perform, at Tenant's sole cost and expense, all the work described in subsection (i)
relating to the partitioning of the Premises to Landlord's reasonable satisfaction, all in accordance
with plans approved by Landlord. Tenant shall reimburse Landlord upon demand for all costs
incurred by Landlord in reviewing the plans for the partitioning work and all other related work.
14.5. Withholding Consent. Without limiting other situations in which it may be
reasonable for Landlord to withhold its consent to any proposed assignment or sublease, Landlord
and Tenant agree that it shall be reasonable for Landlord to withhold its consent in any one (1) or
more of the following situations: (1) in Landlord's reasonable judgment, the proposed subtenant
or assignee or the proposed use of the Premises would detract from the status of the Building as a
first-class office building, generate vehicle or foot traffic,parking or occupancy density materially
in excess of the amount customary for the Building or the Project or result in a materially greater
use of the elevator,janitorial, security or other Building services (e.g., HVAC, trash disposal and
sanitary sewer flows)than is customary for the Project; (2)in Landlord's reasonable judgment,the
creditworthiness of the proposed subtenant or assignee does not meet the credit standards applied
by Landlord in considering other tenants for the lease of space in the Project on comparable terms,
or Tenant has failed to provide Landlord with reasonable proof of the creditworthiness of the
proposed subtenant or assignee; (3) in Landlord's reasonable judgment, the business history,
experience or reputation in the community of the proposed subtenant or assignee does not meet the
standards applied by Landlord in considering other tenants for occupancy in the Project; (4) the
proposed assignee or subtenant is a governmental entity,agency or department or the United States
Post Office; or (5) the proposed subtenant or assignee is a then existing or prospective tenant of
the Project. If Landlord fails to elect any of the alternatives within the thirty (30) day period
referenced in Section 14.5,it shall be deemed that Landlord has refused its consent to the proposed
assignment or sublease.
14.6. Bonus Rental. If, in connection with any assignment or sublease, Tenant
receives rent or other consideration, either initially or over the term of the assignment or sublease,
in excess of the Rent called for hereunder, or in case of the sublease of a portion of the Premises,
in excess of such Rent fairly allocable to such portion, Tenant shall pay to Landlord, as additional
rent hereunder, fifty percent (50%) of the excess of each such payment of Rent or other
consideration received by Tenant promptly after Tenant's receipt of such Rent or other
consideration. To the extent that a subtenant or assignee purchases goods or services from
sublandlord or an affiliate of sublandlord for an amount in excess of the fair market value for such
goods or services, such costs incurred or amounts expended shall be deemed to be "other
consideration" for purposes of calculating excess Rent due to Landlord hereunder.
14.7. Scope. The prohibition against assigning or subletting contained in this Section 14
shall be construed to include a prohibition against any assignment or subletting by operation of
law. If this Lease is assigned, or if the underlying beneficial interest of Tenant is transferred, or if
the Premises or any part thereof is sublet or occupied by anybody other than Tenant,Landlord may
collect rent from the assignee, subtenant or occupant and apply the net amount collected to the
Rent due herein and apportion any excess rent so collected in accordance with the terms of Section
14.7, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of the
provisions regarding assignment and subletting, or the acceptance of the assignee, subtenant or
occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on
the part of Tenant herein contained. No assignment or subletting shall affect the continuing
primary liability of Tenant (which, following assignment, shall be joint and several with the
assignee), and Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease.
14.8. Executed Counterparts. No sublease or assignment shall be valid, nor shall
any subtenant or assignee take possession of the Premises,until(a) a fully executed counterpart of
the sublease or assignment has been delivered to Landlord and Landlord, and (b) Tenant and the
applicable assignee or subtenant have entered into a consent to assignment or sublease with
Landlord in a form acceptable to Landlord.
14.9. Transfer of a Majority Interest. If Tenant is a non-publicly traded corporation,
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the transfer (as a consequence of a single transaction or any number of separate transactions) of
fifty percent (50%) or more or of a controlling interest or the beneficial ownership interest of the
voting stock of Tenant issued and outstanding as of the Effective Date shall constitute an
assignment hereunder for which Landlord's prior written consent is required. If Tenant is a
partnership, limited liability company, trust or an unincorporated association, the transfer of a
controlling or majority interest therein shall constitute an assignment hereunder for which
Landlord's prior written consent is required.
14.10. Additional Conditions. If this Lease is assigned, whether or not in violation of
the terms of this Lease, Landlord may collect rent from the assignee. If the Premises or any part
thereof is sublet, Landlord may, upon an Event of Default by Tenant hereunder, collect rent from
the subtenant. In either event, Landlord may apply the amount collected from the assignee or
subtenant to Tenant's monetary obligations hereunder. The consent by Landlord to an
assignment or subletting hereunder shall not relieve Tenant or any assignee or subtenant from the
requirement of obtaining Landlord's express prior written consent to any other or further
assignment or subletting. In no event shall any subtenant be permitted to assign its sublease or to
further sublet all or any portion of its subleased premises without Landlord's prior written
consent. Neither an assignment or subletting nor the collection of rent by Landlord from any
person other than Tenant, shall be deemed a waiver of any of the provisions of this Section 14 or
release Tenant from its obligation to comply with the provisions of this Lease and Tenant shall
remain fully and primarily liable for all of Tenant's obligations under this Lease. The voluntary
or other surrender of this Lease by Tenant, the mutual cancellation thereof or the termination of
this Lease by Landlord as a result of Tenant's default shall, at the option of Landlord, terminate
all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies. The voluntary or other surrender of this Lease by
Tenant, the mutual cancellation thereof or the termination of this Lease by Landlord as a result of
Tenant's default shall, at the option of Landlord, terminate all or any existing subtenancies or
may, at the option of Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
15. Default by Tenant.
15.1. Events of Default. The occurrence of any of the following events shall
constitute an "Event of Default" on the part of Tenant under this Lease:
15.1.1. Pam. Tenant fails to pay when due monthly Base Rent,
additional Rent or any other amounts due hereunder, and such failure is not remedied by Tenant
within five (5) days following Landlord's written notice that such amount remains unpaid;
15.1.2. Bankruptcy. The bankruptcy or insolvency of Tenant, any transfer
by Tenant to defraud creditors, any assignment by Tenant for the benefit of creditors, or the
commencement of any proceedings of any kind by or against Tenant under any provision of the
Federal Bankruptcy Act or under any other insolvency,bankruptcy or reorganization act unless, in
the event any such proceedings are involuntary, Tenant is discharged from the same within sixty
(60)days thereafter;the appointment of a receiver for a substantial part of the assets of Tenant;the
levy upon this Lease or any estate of Tenant hereunder by any attachment or execution; Tenant's
discontinued business as a going concern; and Tenant's admission that it is unable to pay its debts
as they mature;
15.1.3. Abandonment or Vacation. The abandonment or vacation of the
Premises for a period in excess of five (5) consecutive business days;
15.1.4. Performance of Lease Terms. Tenant's failure to perform any of
the terms,covenants,agreements or conditions of this Lease to be observed or performed by Tenant
(excluding any Event of Default under Section 15.1.1 above or Sections 15.1.5 through 15.1.8
below), which default has not been cured within thirty (30) days after written notice thereof by
Landlord to Tenant;provided,however,that if the nature of the default is such that the same cannot
reasonably be cured within the 30-day period,Tenant shall not be deemed to be in default if within
such period Tenant shall commence such cure and thereafter diligently prosecute the same to
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completion, and further provided that if the nature of the default is such that a more expeditious
cure is reasonably required, such lesser period as provided in Landlord's notice to Tenant; and
15.1.5. Failure to Comply. Tenant's failure to comply with the provisions
contained in Sections 18 and 19, failure to timely surrender the Premises upon expiration or
termination of the Lease, and failure to maintain insurance pursuant to this Lease and provide
evidence thereof to Landlord.
15.1.6. Misrepresentation. Tenant makes or has made or furnishes or has
furnished any warranty, representation or statement to Landlord in connection with this Lease, or
any other agreement made by Tenant for the benefit of Landlord, which is or was false or
misleading in any material respect when made or furnished; or
15.1.7. Assi ng ment. Tenant assigns this Lease or subleases any portion of
the Premises in violation of this Lease; or
15.1.8. Guarantor. The default by any guarantor of Tenant's obligations
under this Lease of any provision of such guarantor's guaranty, or the attempted repudiation or
revocation of any such guaranty or any provision thereof by such guarantor.
An Event of Default shall constitute a default by Tenant under this Lease. In addition,
any notice required to be given by Landlord under this Lease shall be in lieu of, and not in
addition to, any notice required under Section 1161 of the California Civil Code of Procedure.
Tenant shall pay to Landlord the amount of Two Hundred Fifty Dollars ($250.00) for each notice
of default given to Tenant under this Lease,which amount is the amount the parties reasonably
estimate will compensate Landlord for the cost of giving such notice of default, and reimburse
Landlord for any attorneys' fees and other costs where consultation with an attorney is
undertaken in connection with such Event of Default.
15.2. Remedies. In the event of an Event of Default by Tenant, Landlord may at
any time thereafter, without limiting Landlord in the exercise of any right or remedy at law or in
equity which Landlord may have by reason of such default or breach:
15.2.1. Continue Lease. Pursue the remedy described in California Civil
Code Section 1951.4 whereby Landlord may continue this Lease in full force and effect after
Tenant's breach and recover the Rent and any other monetary charges as they become due,
without terminating Tenant's right to sublet or assign this Lease, subject only to reasonable
limitations as herein provided. During the period Tenant is in default, Landlord shall have the
right to do all acts necessary to preserve and maintain the Premises as Landlord deems
reasonable and necessary, including removal of all persons and property from the Premises, and
Landlord can enter the Premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting
the Premises, including, without limitation,brokers' commissions, expenses of remodeling the
Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer
than the remaining Term.
15.2.2. Perform. Pay or perform such obligation due (but shall not be
obligated to do so), if Tenant fails to pay or perform any obligations when due under this Lease
within the time permitted for their payment or performance. In such case, the costs incurred by
Landlord in connection with the performance of any such obligation will be additional Rent due
under this Lease, together with interest at the Interest Rate from the date paid by Landlord until
reimbursed in full by Tenant, and will become due and payable on demand by Landlord.
15.2.3. Terminate. Terminate Tenant's rights to possession by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. Tenant expressly acknowledges that in the absence of
such written notice from Landlord, no other act of Landlord, including,but not limited to, its re-
entry into the Premises, its efforts to relet the Premises, its reletting of the Premises for Tenant's
account, its storage of Tenant's personal property and trade fixtures, its acceptance of keys to the
Premises from Tenant, its appointment of a receiver, or its exercise of any other rights and
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remedies under this Section 15 or otherwise at law, shall constitute an acceptance of Tenant's
surrender of the Premises or constitute a termination of this Lease or of Tenant's right to
possession of the Premises. Upon such termination in writing of Tenant's right to possession of
the Premises, this Lease shall terminate and Landlord shall be entitled to recover damages from
Tenant as provided in California Civil Code Section 1951.2 or any other applicable existing or
future Law providing for recovery of damages for such breach, including but not limited to the
following: (A)the worth at the time of award of any unpaid Rent which had been earned at the
time of such termination;plus (B) the worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of award exceeds the
amount of such Rent loss that is proved could have been reasonably avoided; plus (C)the worth
at the time of award of the amount by which the unpaid Rent for the balance of the Term after
the time of award exceeds the amount of such Rent loss that is proved could be reasonably
avoided; plus (D) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this Lease or which in
the ordinary course of events would be likely to result therefrom; plus (E) at Landlord's election,
such other amounts in addition to or in lieu of the foregoing as may be permitted from time to
time by applicable Law. In addition, Landlord shall be entitled to recover from Tenant the
unamortized portion of any tenant improvement allowance, free rent or other allowance provided
by Landlord to Tenant and any brokerage commission or Enders' fee paid or incurred by
Landlord in connection with this Lease (amortized with interest at the Interest Rate on a straight
line-basis over the original term of this Lease.) Upon any such termination of Tenant's
possessory interest in and to the Premises, Tenant (and at Landlord's sole election, Tenant's
sublessees) shall no longer have any interest in the Premises, and Landlord shall have the right to
make any reasonable repairs, alterations or modifications to the Premises which Landlord in its
sole discretion deems reasonable and necessary. The "worth at the time of award" of the
amounts referred to in subsections (A) and(B) above is computed by allowing interest at the
maximum rate an individual is permitted by law to charge. The worth at the time of award of the
amount referred to in subsection(C) above is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
Tenant hereby waives all claims for damages that may be caused by Landlord's reentering and
taking possession of the Premises or removing and storing Tenant's personal property pursuant to
this Section 15, and Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all Claims resulting from any such act. No reentry by Landlord shall constitute or be
construed as a forcible entry by Landlord.
15.2.4. Additional Remedies. Pursue any other legal or equitable remedy
available to Landlord. Unpaid installments of Rent and other unpaid monetary obligations of
Tenant under the terms of this Lease shall bear interest from the date due at the rate of ten
percent (10%)per annum.
15.3. Waiver of Right of Redemption. In the event Tenant is evicted or Landlord
takes possession of the Premises by reason of any default by Tenant hereunder, Tenant hereby
waives, for itself and all persons claiming by and under Tenant, all rights and privileges which it
might have under any present or future Law to redeem the Premises or to continue this Lease
after being dispossessed or ejected from the Premises.
15.4. Continuation. Even though Tenant has breached this Lease and abandoned
the Premises, this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all its rights and remedies under this
Lease, including the right to recover Rent as it becomes due under this Lease. Acts of
maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this Lease, shall not constitute a
termination of Tenant's right to possession.
15.5. Tenant's Exercise Rights. In the event Tenant is in default under any
provision of this Lease then, at Landlord's sole election: (i) Tenant shall not have the right to
exercise any available right,option or election under this Lease("Tenant's Exercise Rights"), (ii)
Tenant shall not have the right to consummate any transaction or event triggered by the exercise
of any of Tenant's Exercise Rights, and (iii) Landlord shall not be obligated to give Tenant any
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required notices or information relating to the exercise of any of Tenant's Exercise Rights
hereunder.
16. Default by Landlord. Landlord shall not be in default under this Lease unless Landlord,
or the holder of any mortgage, deed of trust or ground lease covering the Premises, fails to
perform obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord certified mail, postage
prepaid, and to the holder of any first mortgage, deed of trust or ground lease covering the
Premises whose name and address shall have been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligations; provided, however,
that if the nature of Landlord's obligation is such that more than thirty (30) days are
required for performance,then Landlord shall not be in default if Landlord or the holder of
any such mortgage, deed of trust or ground lease commences performance within such 30-
day period and thereafter diligently prosecutes the same to completion. In no event shall
Tenant be entitled to terminate this Lease by reason of Landlord's default, and Tenant's
remedies shall be limited to an action for monetary damages at law.
17. Security Deposit. Upon execution of this Lease, Tenant shall deliver to Landlord cash in
the amount specified as the Security Deposit in the Basic Lease Information as security for
Tenant's performance of all of Tenant's covenants and obligations under this Lease;
provided, however, that the Security Deposit is not an advance rent deposit or an advance
payment of any other kind, nor a measure of Landlord's damages upon Tenant's default.
Landlord shall not be required to segregate the Security Deposit from its other funds and
no interest shall accrue or be payable to Tenant with respect thereto. Landlord may (but
shall not be required to)use the Security Deposit or any portion thereof to cure any Event
of Default or to compensate Landlord for any damage Landlord incurs as a result of
Tenant's failure to perform any of its covenants or obligations hereunder, it being
understood that any use of the Security Deposit shall not constitute a bar or defense to any
of Landlord's remedies under this Lease or at law. In such event and upon written notice
from Landlord to Tenant specifying the amount of the Security Deposit so utilized by
Landlord and the particular purpose for which such amount was applied,
Tenant shall immediately deposit with Landlord an amount sufficient to return the Security Deposit
to its original amount. Tenant's failure to make such payment to Landlord within five (5) days of
Landlord's notice shall constitute an Event of Default. Within thirty (30) days following the
expiration or sooner termination of this Lease,Landlord shall return to Tenant the Security Deposit
or the balance thereof then held by Landlord;provided,however,that(i)Landlord may retain from
the Security Deposit the amount Landlord determines, in good faith, is required to cure any breach
of the Lease by Tenant that exists as of such termination or expiration or the Lease, and(ii) in no
event shall any such return be construed as an admission by Landlord that Tenant has performed
all of its covenants and obligations hereunder. No lender, mortgagee, purchaser at any judicial or
private foreclosure sale or other superior interest holder, shall be responsible to Tenant for the
Security Deposit unless and only to the extent such holder or purchaser shall have actually received
the same. Tenant acknowledges that Landlord may use all or any part of the Security Deposit to
compensate Landlord for damages resulting from termination of this Lease and the tenancy created
hereunder as a result of a Tenant default, and to the extent permitted by applicable law, Tenant
hereby unconditionally and irrevocably waives the benefits and protections of any applicable law
prohibiting or restricting Landlord's use of the Security Deposit for such purposes. No trust
relationship is created herein between Landlord and Tenant with respect to the Security Deposit.
18. Estoppel Certificate; Financial Information.
18.1. Estoppel Certificate. Tenant shall, within seven (7) days after notice
from Landlord, execute, acknowledge and deliver to Landlord a statement certifying(i)
that this Lease is unmodified and in full force and effect(or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is in full force
and effect), (ii) the amount of the Rent and the Security Deposit, (iii) the date to which
the Rent has been paid, (iv) acknowledging that there are not,to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, or specifying such defaults, if any are
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claimed, and(v) such other matters as may reasonably be requested by Landlord. Any
such statement may be conclusively relied upon by Landlord and any prospective
purchaser or encumbrancer of the Building. If Tenant fails to deliver such statement
within the time required hereunder, such failure shall be conclusive upon Tenant that(i)
this Lease is in full force and effect, without modification except as may be represented
by Landlord, (ii) there are no uncured defaults in Landlord's performance of its
obligations hereunder, (iii) not more than one month's installment of Monthly Base Rent
has been paid in advance, and(iv) any other statements of fact included by Landlord in
such statement are correct.
18.2. Financial Statements. If Landlord desires to sell all or any portion of
its
interest in the Building or the Project or to finance or refinance the Building or the Project,
Tenant agrees to deliver to Landlord and any lender or prospective purchaser designated by
Landlord such financial statements of Tenant as may be reasonably required by Landlord or such
lender or prospective purchaser. All such financial statements shall be received by Landlord in
confidence and shall be used for the purposes herein set forth. In addition, within seven(7) days
after Landlord's written request, Tenant shall deliver to Landlord Tenant's most current quarterly
and annual financial statements audited by Tenant's certified public accountant. If audited
financial statements are not available, Tenant shall deliver to Landlord Tenant's financial
statements certified to be true and correct by Tenant's chief financial officer. Tenant's annual
financial statements shall not be dated more than twelve (12)months prior to the date of
Landlord's request.
18.3. Failure to Provide. Tenant acknowledges and agrees that its failure
to execute
such certificate or deliver financial statement may cause Landlord serious financial damage by
causing the failure of a sale or financing transaction and giving Landlord all of its rights and
remedies under Section 15 above, including its right to damages caused by the loss of such sale
or financing.
19. Subordination. This Lease is expressly made subject and subordinate to any mortgage,
deed of trust, ground lease,underlying lease or like encumbrance affecting the Building or
any interest of Landlord therein which is now existing or hereafter executed or recorded,
any present or future modification, amendment or supplement to any of the foregoing, and
to any advances made thereunder (any of the foregoing being a "superior interest")
without the necessity of any further documentation evidencing such subordination.
Notwithstanding the foregoing,Tenant shall,within ten(10)business days after Landlord's
request, execute and deliver to Landlord a document, in customary and reasonable form,
evidencing the subordination of this Lease to a particular superior interest. Tenant hereby
irrevocably appoints Landlord as Tenant's attorney-in-fact to execute and deliver any such
instrument in the name of Tenant if Tenant fails to do so within such time. If the interest of
Landlord in the Project or the Building is transferred to any person("Purchaser")pursuant
to or in lieu of foreclosure or other proceedings for enforcement of any superior interest,
Tenant shall immediately attorn to the Purchaser, and this Lease shall continue in full force
and effect as a direct lease between the Purchaser and Tenant on the terms and conditions
set forth herein, provided that Purchaser acquires and accepts the Project and Building
subject to this Lease. Notwithstanding the subordination of this Lease to superior interest
as set forth above, the holder of any superior interest may at any time (including as part of
foreclosure or other proceedings for enforcement), upon written notice to Tenant, elect to
have this Lease be prior and superior to such superior interest. Further, if any lender that
intends to acquire an interest in, or holds a mortgage or deed of trust encumbering any
portion of the Project, should require either the execution by Tenant of an agreement
requiring Tenant to send such lender written notice of any default by Landlord under this
Lease, giving such lender the right to cure such default until such lender has completed
foreclosure, and/or preventing Tenant from terminating this Lease (to the extent such
termination right would otherwise be available) unless such default remains uncured after
foreclosure has been completed, and/or any modification of the agreements, covenants,
conditions or provisions of this Lease,then Tenant agrees that it shall,within ten(10) days
after Landlord's request, execute and deliver such agreement and modify this Lease as
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required by such lender or ground lessor; provided, however, that no such modification
shall affect the length of the term or increase the Rent payable by Tenant, or materially
diminish Tenant's rights or materially increase its obligations under this Lease.
20. Attorneys' Fees. If Landlord uses the services of an attorney in order to secure Tenant's
compliance with the terms of this Lease, Tenant shall reimburse Landlord upon demand
for any and all reasonable attorneys' fees and expenses incurred by Landlord, whether or
not formal legal proceedings are instituted by Landlord. In any action or proceeding which
Landlord or Tenant brings against the other party in order to enforce its respective rights
hereunder or by reason of the other party failing to comply with all of its obligations
hereunder, whether for declaratory or other relief, the unsuccessful party therein agrees to
pay all costs incurred by the prevailing party therein, including reasonable attorneys' fees,
to be fixed by the court, and said costs and attorneys' fees shall be made a part of the
judgment in said action. A party shall be deemed to have prevailed in any action(without
limiting the definition of prevailing party) if such action is dismissed upon the payment by
the other party of the amounts allegedly due or the performance of obligations which were
allegedly not performed, or if such party obtains substantially the relief sought by such
party in the action, regardless of whether such action is prosecuted to judgment .
21. Notices. All notices, consents, demands, and other communications from one party to the
other given pursuant to the terms of this Lease shall be in writing and shall be personally
delivered, delivered by courier service, delivered by national overnight delivery service
(e.g., Federal Express,Airborne Express and UPS), or deposited in the United States mail,
certified or registered, postage prepaid, and, if an email address is provided in the Basic
Lease Information,with a copy of each notice simultaneously delivered by email,addressed
as follows: to Tenant at the address(es)specified in the Basic Lease Information or to such
other place as Tenant may from time to time designate in a notice to Landlord;to Landlord
at the address(es) specified in the Basic Lease Information, or to such other place and to
such other parties as Landlord may from time to time designate in a notice to Tenant.
Notices delivered personally or sent same-day courier will be effective immediately upon
delivery to the addressee at the designated address; notices sent by overnight courier will
be effective one (1) Business Day after acceptance by the service for delivery; notices sent
by mail will be effective two (2)Business Days after mailing. In the event Tenant requests
multiple notices hereunder, Tenant will be bound by such notice from the earlier of the
effective times of the multiple notices.
22. Promotional Charge. Landlord shall have the right to provide or cause to be provided a
program of advertising or promotional events that, in Landlord's sole judgment, will serve
to promote the Project. Tenant shall pay to Landlord, as Tenant's share of the cost of the
program of advertising or promotional events, an annual promotional charge (the
"Promotional Charge") in the amount stated in the Basic Lease Information. The
Promotional Charge shall be due and payable,in advance and in equal monthly installments
at the time and in the manner required for payment of Base Rent. The Promotional Charge
shall be increased on January 1 of each year during the Term (the "CPI Promotional
Adjustment Dates"), by a percentage equal to the percentage increase in the CPI measured
from the Last CPI Promotional Publication Date to the New CPI Promotional Publication
Date. In no event shall (i) any CPI adjustment be less than zero or (ii) the Promotional
Charge in effect on any CPI Promotional Adjustment Date be less than the Promotional
Charge in effect for the year immediately preceding the CPI Promotional Adjustment Date.
The"CPI"is the Consumer Price Index,All Items, 1982-1984= 100,All Urban Consumers,
for the San Francisco-Oakland Metropolitan Area (1982 - 84 = 100), as published by the
United States Department of Labor, Bureau of Labor Statistics, or its successor index. The
"Last CPI Promotional Publication Date" is the month for which the CPI was published
immediately before the prior date for adjustment to the Promotional Charge(or prior to the
Rent Commencement Date in the case of the first adjustment to the Promotional Charge).
The "New CPI Promotional Publication Date" is the month for which the CPI is published
immediately preceding the CPI Promotional Adjustment Date. If the CPI as of the New
CPI Promotional Publication Date is not available on a CPI Promotional Adjustment Date,
Tenant shall continue to pay the same amount of the Promotional Charge payable prior to
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such CPI Adjustment Promotional Date until the CPI is available. In addition, Landlord
may increase the Promotional Charge from time to time to the extent required as a result of
an increase in the costs of promotional, public relations or advertising services provided
pursuant to this Section. As consideration for providing the advertising and/or promotional
services, Landlord shall be entitled to retain twenty-five percent(25%) of the Promotional
Charges collected by Landlord each year.
23. General Provisions.
23.1. Applicable Law. This Lease shall be governed by and construed in
accordance with the internal laws of the State in which the Project is located,notwithstanding any
choice of law statutes, regulations,provisions or requirements to the contrary.
23.2. Severability. The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.
23.3. Waiver. No provision of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. No delay or omission in the exercise of any
right or remedy of Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver. Landlord's or Tenant's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Landlord's or Tenant's consent to, or approval of,
any subsequent act by the other party.
23.4. Authority. If Tenant is an entity, Tenant and each person executing this Lease
on behalf of Tenant, hereby covenants and warrants that(a) Tenant is duly established or formed
and validly existing under the laws of its state of establishment or formation, (b) Tenant has and
is duly qualified to do business in the state in which the Project is located, (c) Tenant has full
power and authority to enter into this Lease and to perform all Tenant's obligations hereunder,
and(d) each person(and all of the persons if more than one signs) signing this Lease on behalf of
Tenant is duly and validly authorized to do so.
23.5. Ems. Landlord may, at any and all reasonable times, enter the Premises to (a)
inspect the same and to determine whether Tenant is in compliance with its obligations hereunder,
(b) supply any service Landlord is required to provide hereunder, (c) show the Premises to
prospective lenders, purchasers or tenants, (d) post notices of non-responsibility, and (e) alter,
improve or repair the Premises or any other portion of the Building or Property. Landlord shall
provide Tenant with reasonable notice, except in the event or an emergency. In the last nine (9)
months of the Term, Landlord may post"for rent" signs on the Building or Premises.
23.6. Limitation of Liability. The term "Landlord," as used in this Lease, shall mean
only the owner or owners of the Building at the time in question. In the event that Landlord or any
successor owner of the Building or Project sells or conveys the Building or Project, then all
liabilities and obligations of Landlord or the successor owner under this Lease accruing after the
sale or conveyance shall terminate and become binding on the new owner, and Tenant shall release
Landlord from all liability under this Lease (including, without limitation, the Security Deposit),
except for acts or omissions of Landlord occurring prior to such sale or conveyance. Tenant
expressly agrees that(i)the obligations of Landlord shall not constitute personal obligations of the
officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners,
shareholders, or other principals, agents or representatives of Landlord("Member of Landlord"),
and (ii) Tenant shall have recourse only to Landlord's interest in the Building of which the
Premises are a part for the satisfaction of such obligations and not against the other assets of
Landlord. In this regard, Tenant agrees that in the event of any actual or alleged failure,breach or
default by Landlord of its obligations under this Lease, that (i) no Member of Landlord shall be
sued or named as a party in any suit or action(except as may be necessary to secure jurisdiction of
Landlord),(ii)no judgment will be taken against any Member of Landlord,and any judgment taken
against any Member of Landlord may be vacated and set aside at any time without hearing, (iii)no
writ of execution will ever be levied against the assets of any Member of Landlord, and(iv) these
agreements by Tenant are enforceable both by Landlord and by any Member of Landlord.
Wherever in this Lease Tenant (a) releases Landlord from any claim or liability, (b) waives or
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limits any right of Tenant to assert any claim against Landlord or to seek recourse against any
property of Landlord or(c) agrees to indemnify Landlord against any matters,the relevant release,
waiver, limitation or indemnity shall run in favor of and apply to Landlord, the constituent
shareholders, partners, members, or other owners of Landlord, and the directors, officers,
employees and agents of Landlord and each such constituent shareholder,partner,member or other
owner.
23.7. Authority. If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation, company or partnership
in accordance with, where applicable, a duly adopted resolution of the board of directors of the
corporation, the vote of the members of the limited liability company or the vote of the partners
within the partnership, and that this Lease is binding upon the corporation, company or
partnership in accordance with its respective articles of incorporation and bylaws, operating
agreement or partnership agreement.
23.8. Time. Time is expressly declared to be of the essence of this Lease and of
each and every covenant, term, condition, and provision hereof.
23.9. Joint and Several Liability. If there is more than one party comprising Tenant,
the obligations imposed on Tenant shall be joint and several.
23.10. Construction. The language in all parts of this Lease shall be in all cases
construed as a whole according to its fair meaning and not strictly for nor against either Landlord
or Tenant.
23.11. Definitions. As used in this Lease and whenever required by the context
thereof, each number, both singular and plural, shall include all numbers and in each gender shall
include all genders. Landlord and Tenant, as used in this Lease or in any other instrument referred
to in or made a part of this Lease, shall likewise include both the singular and the plural, a
corporation, limited liability company, partnership, individual or person acting in any fiduciary
capacity as executor, administrator, trustee or in any other representative capacity.
23.12. Force Majeure. Any delay in construction, repairs, or rebuilding any building,
improvement or other structure herein shall be excused and the time limit extended to the extent
that the delay is occasioned by reason of acts of God, labor troubles, laws or regulations of general
applicability, acts of Tenant or other occurrences beyond the reasonable control of Landlord.
Accordingly, Landlord's obligation to perform shall be excused for the period of the delay and the
period for performance shall be extended for a period equal to the period of such delay. In no
event shall monetary obligations be excused by Force Majeure.
23.13. Waiver of Jury Trial. IF ANY ACTION OR PROCEEDING BETWEEN
LANDLORD AND TENANT TO ENFORCE THE PROVISIONS OF THIS LEASE
(INCLUDING AN ACTION OR PROCEEDING BETWEEN LANDLORD AND THE
TRUSTEE OR DEBTOR IN POSSESSION WHILE TENANT IS A DEBTOR IN A
PROCEEDING UNDER ANY BANKRUPTCY LAW) PROCEEDS TO TRIAL, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD AND TENANT
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY IN SUCH TRIAL. Landlord
and Tenant agree that this paragraph constitutes a written consent to waiver of trial by jury within
the meaning of California Code of Civil Procedure Section 631(d)(2), and each party does hereby
authorize and empower the other party to file this paragraph and/or this Lease, as required, with
the clerk or judge of any court of competent jurisdiction as a written consent to waiver of jury trial.
23.14. Broker's Fee. Tenant represents and warrants that it has negotiated this Lease
directly with the real estate broker(s) identified in the Basic Lease Information (the "Brokers")
and has not authorized or employed, or acted by implication to authorize or to employ, any other
real estate broker or salesman to act for Tenant in connection with this Lease. Tenant shall
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indemnify, defend and hold Landlord harmless from and against any and all Claims by any real
estate broker or salesman other than the Brokers for a commission, finder's fee or other
compensation as a result of Tenant's entering into this Lease. Landlord shall pay any commissions
or fees that are payable to Brokers with respect to this Lease in accordance with the provisions of
a separate commission contract.
23.15. Relocation. Landlord shall have the continuing right, upon thirty(30) days'
prior written notice to Tenant, to relocate Tenant to reasonably similar space elsewhere in the
Project of approximately the same size as the Premises. In the event that Landlord shall exercise
such right subsequent to Tenant's occupancy of the Premises, Landlord shall pay all reasonable
costs of moving Tenant to such new space. If Landlord moves Tenant to such new space, then this
Lease and each and all of the terms and covenants and conditions hereof shall remain in full force
and effect and thereupon be deemed applicable to such new space, except that the new space shall
be substituted for the current space, a revised floor plan shall become part of this Lease and shall
reflect the location of the new space and Base Rent shall be proportionately adjusted to reflect any
change in the rentable square footage of the new space as compared to the original Premises.
Tenant's failure to timely relocate in accordance with Landlord's notice shall constitute an Event
of Default under this Lease. Nothing contained in this Section 22.16 confer relocation rights upon
Tenant.
23.16. Survival of Tenant Obligations. The obligations of Tenant under this Lease
shall survive the termination or expiration of this Lease with respect to any damage, liability, loss,
or expense arising out of or in connection with this Lease or Tenant's use or occupancy of the
Premises.
23.17. Nondisclosure. Tenant agrees that the terms of this Lease are confidential and
constitute proprietary information of Landlord, and that disclosure of the terms hereof could
adversely affect the ability of Landlord to negotiate with other tenants. Tenant hereby agrees that
Tenant and its partners, officers, directors, employees, agents,real estate brokers and sales persons
and attorneys shall not disclose the terms of this Lease to any other person without Landlord's
prior written consent, except to any accountants of Tenant in connection with the preparation of
Tenant's financial statements or tax returns, to Tenant's consultants, attorneys, insurers, and to an
assignee of this Lease or sublessee of the Premises, or to an entity or person to whom disclosure
is required by applicable law or in connection with any action brought to enforce this Lease.
23.18. Hazardous Substance Disclosure. California law requires landlords to disclose
to tenants the existence of certain hazardous substances. Accordingly, the existence of gasoline
and other automotive fluids, maintenance fluids, copying fluids and other office supplies and
equipment, certain construction and finish materials,tobacco smoke, cosmetics and other personal
items, and asbestos-containing materials ("ACM") must be disclosed. Gasoline and other
automotive fluids are found in the garage area of the Building. Cleaning,lubricating and hydraulic
fluids used in the operation and maintenance of the Building are found in the utility areas of the
Building not generally accessible to Building occupants or the public. Many Building occupants
use copy machines and printers with associated fluids and toners, and pens, markers, inks, and
office equipment that may contain hazardous substances. Certain adhesives, paints and other
construction materials and finishes used in portions of the Building may contain hazardous
substances. Although smoking is prohibited in the public areas of the Building, these areas may,
from time to time, be exposed to tobacco smoke. Building occupants and other persons entering
the Building from time-to-time may use or carry prescription and nonprescription drugs,perfumes,
cosmetics and other toiletries, and foods and beverages, some of which may contain hazardous
substances. Further, certain portions of the Building contain ACM in the form of pipe insulation
located in areas generally inaccessible to Building occupants and visitors, such as machinery and
utility rooms, the inside of sealed walls and above suspended ceilings. Landlord has made no
special investigation of the Premises with respect to any hazardous substances. Tenant agrees not
to expose or disturb any ACM unless Landlord has given Tenant prior written consent thereto and
Tenant complies with all applicable Laws.
34
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23.19. Inte arm. This Lease, including attached Exhibits and Basic Lease
Information, contains all agreements and understandings of the parties and supersedes and cancels
any and all prior or contemporaneous written or oral agreements, instruments,understandings, and
communications of the parties with respect to the subject matter herein. The Basic Lease
Information and Exhibits and attached to this Lease are incorporated herein by this reference.
[SIGNATURES TO APPEAR ON FOLLOWING PAGE]
35
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IN WITNESS WHEREOF,the parties have executed this Lease on the date first mentioned above.
"Landlord" "Tenant"
GARAGE RETAIL CA LLC, CITY OF PETALUMA
a California limited liability company
Name:
By: PARKING GARAGE RETAIL LLC, a By: Its:
California limited liability company, its
Sole Member
By: PETALUMA THEATRE DISTRICT Name:
By: Its:
LLC, a California limited liability
company, Its Sole Member
By: G &W VENTURES, LLC,
a California limited liability
company, its Manager
By:
Matthew T. White, Manager
36
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ADDENDUM
24. Tenant Improvements. Landlord shall, at its sole cost and expense, install carpet
in the Suite that is currently missing carpet(approximately 2'x8'). Landlord shall, to the best of
its ability, match the new carpet with existing carpet. If an exact match is not possible, Landlord
shall install a carpet of similar style and color.
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Exhibit A-1
EXHIBIT A-1
DIAGRAM OF PREMISES
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Exhibit A-1
EXHIBIT A-2
DIAGRAM OF PROJECT
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4824-5420-3806,v.2
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Exhibit A-2
EXHIBIT A-3
DIAGRAM OF RETAIL AREA
1"
155 FIRST 165_EIRST
2,749 SF 8.223 SF ■ ■
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4,985 SF a
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4824-5420-3806,v.2
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Exhibit A-2
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EXHIBIT B
Intentionally Deleted
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EXHIBIT C
Exhibit B-1, Page 1
COMMENCEMENT DATE MEMORANDUM
With respect to that certain lease ("Lease") dated ,between
, a ("Tenant"), and
a ("Landlord"),pursuant to which
Landlord leased to Tenant and Tenant leased from Landlord approximately rentable
square feet of space ("Premises") in the building located at ,
Tenant hereby acknowledges and certifies to Landlord as follows:
(1) The Commencement Date is and the Expiration Date is ;
(2) The Premises contain rentable square feet of space; and
(3) Tenant has accepted and is currently in possession of the Premises and the Premises
are acceptable for Tenant's use.
IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this day
of , 20
"Tenant"
, a
By:
Name:
Its:
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EXHIBIT D
Exhibit C, Page 1
RULES AND REGULATIONS
The following rules and regulations (these "Rules and Regulations") are hereby made a part of
the lease agreement (the "Lease") entered into between Landlord and Tenant, and Tenant agrees
that Tenant's employees and agents, or any others permitted by Tenant to occupy or enter the
Premises, will at all times abide by these Rules and Regulations, unless otherwise specified or
provided for in the Lease. Terms used but not defined herein shall have the meaning set forth in
the Lease.
1. The driveways, entrances and exits to the Project, sidewalks, passages, building entries,
lobbies, corridors, stairways, and elevators of the Building shall not be obstructed by
Tenant, or Tenant's agents or employees, or used for any purpose other than ingress and
egress to and from the Premises. Tenant or Tenant's agents or employees shall not loiter
on the lawn areas or other common areas of the Project.
2. Furniture, freight equipment and supplies will be moved in or out of the Building only
through the rear service entrances or other entrances designated by Landlord and then only
during such hours and in such manner as may be reasonably prescribed by Landlord. Tenant
shall cause its movers to use only the loading facilities and entrances designated by
Landlord, and to use reasonable protective measures (e.g. Masonite covering for common
area floors) to protect floors, wall, doors, etc. In the event Tenant's movers damage any
part of the Building or Project, Tenant shall pay to Landlord the amount required to repair
said damage upon Landlord's written request.
3. No safe or article, the weight of which may in the opinion of Landlord constitute a hazard
to or damage to the Building or the Building's equipment, shall be moved into the Premises
without Landlord's prior written approval, but such consent or approval shall not be
unreasonably withheld, conditioned or delayed. Landlord and Tenant shall mutually agree
to the location of such articles in the Premises. All damage done to the Project, Building
or Premises by putting in,taking out or maintaining extra heavy equipment shall be repaired
at the expense of Tenant.
4. Landlord reserves the right to close and keep locked any and all entrances and exits of the
Building and Project and gates or doors closing the parking areas thereof during such hours
as Landlord may deem advisable for the adequate protection of the Project and all tenants
and occupants therein. Tenant is responsible for coordinating vendor access to mechanical
rooms, telecommunication closets and other restricted areas with the building manager in
advance during regular business hours.
5. Except as otherwise provided for in the Lease,no sign(including A-frame, banner or other
non-permanent signs), advertisement or notice shall be inscribed, painted, affixed, placed
or displayed on any part of the inside or outside of the Building unless of such color, size
and style and in such place upon or in the Building as shall be first approved in writing by
Landlord. No furniture or other items shall be placed in front of the Building or in any
lobby, restroom or corridor without the prior written consent of Landlord. Landlord shall
have the right to remove all non-permitted signs, furniture and other items without notice
to Tenant.
6. Tenant shall not employ any person or persons other than the janitor or cleaning contractor
of Landlord for the purpose of cleaning or taking care of the Premises without the prior
written consent of Landlord,which consent shall not be unreasonably withheld,conditioned
or delayed. Except as otherwise provided in the Lease, Landlord shall in no way be
responsible to Tenant for any loss of property from the Premises, however occurring.
Landlord shall be allowed admittance to the Premises in accordance with the provisions set
forth in the Lease. The janitor of the Building may at all times keep a pass key to the
Premises if Landlord is providing janitorial service for the Premises.
7. Water closets and other water fixtures shall not be used for any purpose other than that for
which the same are intended, and any damage resulting to the same from misuse on the part
of Tenant or Tenant's agents or employees, shall be paid for by Tenant. No person shall
waste water by tying back or wedging the faucets or in any other manner.
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EXHIBIT E
8. No animals except as otherwise required by applicable Laws shall be allowed on the lawns
or sidewalks or in the offices, restrooms, halls, and corridors of the Building. Tenant shall
be responsible for any inappropriate behavior of any animals brought onto the Project by
its employees,invitees and contractors,and in no event shall aggressive animals be allowed.
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9. Tenant shall conduct its business in a quiet and orderly manner so as not to create
unreasonable noise. Should sound mitigation measures be required due to sounds
originating in the Premises,the costs of such measures shall be paid for by Tenant. No loud
speakers televisions, radios, or other devices shall be used in a manner so as to be heard or
seen outside of the Premises without the prior written consent of the Landlord. Tenant's
machines or equipment that cause noise or vibration that maybe transmitted to the structure
of the Building or to any space therein, and that is objectionable to Landlord or to any
tenants in the Building, shall be placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or other devices sufficient to eliminate noise or vibration.
10. Bicycles or other vehicles, other than wheel chairs, shall not be permitted in the offices,
halls, corridors and lobbies in the Building nor shall any obstruction of sidewalks or
entrances of the Building by such be permitted.
11. Tenant shall not allow anything to be placed on the outside of the Building, nor shall
anything be thrown by Tenant or Tenant's agents or employees, out of the windows or
doors, or down the corridors, ventilation ducts or shafts of the Building. Tenant, except in
case of fire or other emergency, shall not open any outside window.
12. Except as approved in writing by Landlord, no drapes, curtains, shades, screens, films or
other coverings of any nature shall be hung at, applied to or used in connection with any
window or exterior door on the Premises. Tenant shall not place anything against or near
the glass partitions, doors or windows in the Premises which may appear unsightly form
outside the Premises. Tenant shall not obstruct the windows,glass doors,lights or skylights
that shine, reflect or admit light into the Building. All blinds or other window coverings
approved by Landlord are to be fully extended at all times so as to provide consistent
appearance and assist with energy conservation.
13. No awnings shall be placed over any window or entrance.
14. All garbage, including wet garbage, refuse or trash shall be placed by Tenant in the
receptacles designated by Landlord for that purpose. Tenant shall not place in any trash or
receptacle any material which cannot be disposed of in the ordinary and customary manager
of trash and garbage disposal within the Building, such as furniture and other large items.
Dumping of garbage or other items or materials within the Project, including designated
refuse collection areas and parking lots, is prohibited. Tenant shall not burn any trash or
garbage at any time in or about the leased Premises or any area of the Project. Tenant and
Tenant's officers, agents, and employees shall not throw cigar or cigarette butts or other
substances or litter of any kind in or about the Project.
15. Tenant shall not install or operate any steam or gas engine or boiler, or other machinery or
carry on any mechanical business, other than such mechanical business which normally is
identified with general use in the Premises. Explosives or other articles of an extra
hazardous nature shall not be brought into the Building complex.
16. Any painting or decorating as may be agreed to be done by and at the expense of Landlord
shall be done during regular weekday working hours. Should Tenant desire such work on
Saturdays, Sundays, holidays or outside of regular working hours, Tenant shall pay for the
extra cost thereof, if any.
17. Tenant and Tenant's agents and employees shall not park in any spaces designated for
visitor parking or otherwise reserved for others, and, if applicable, shall park their vehicles
in areas designated from time-to-time by Landlord for employee parking. Overnight
parking is prohibited except as expressly permitted in Tenant's lease. If permitted,
overnight parking is subject to the prior approval of the building manager and must be in
the area designated by the building manager. Any vehicles parked overnight without
authorization may be towed at Tenant's expense. Parking areas shall be used solely for the
parking of passenger vehicles and shall not be used for the parking or storage of commercial
vehicles,trailers, storage containers or other items. No vehicle shall be parked in more than
one parking space at a time.
18. Tenant shall not mark, drive nails, screw,bore, or drill into,paint or in any way deface the
common area walls, exterior walls, roof, foundations, bearing walls, or pillars without the
prior written consent of Landlord. The expense of repairing any breakage, stoppage or
damage resulting from a violation of this rule shall be borne by Tenant.
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19. No waiver of any rule or regulation by Landlord shall be effective unless expressed in
writing and signed by Landlord or his authorized agent.
20. Tenant shall be responsible for cleaning up any trash blowing around their facility that may
have been left by their customers or employees.
21. Tenant and its guests and invitees must observe all signage regarding smoking and vaping,
and may only smoke or vape in designated smoking areas. Smoking and vaping are
prohibited at the entry to each Building in accordance with applicable law.
22. Tennant shall not cause or permit any obnoxious or foul odors that disturb the public or
other tenants, whether by transmission through the Building HVAC system or otherwise.
Should such odors be evident, Tenant shall be required to take immediate steps to remedy
them upon written notice from Landlord.
23. Tenant shall not use any method of heating or air-conditioning other than that supplied by
Landlord unless Tenant receives the prior written consent of Landlord. Tenant shall
cooperate fully with Landlord to assure the most effective operation of the Building's
heating and airconditioning systems, and to comply with any governmental energy-savings
rules, laws or regulations. Tenant shall not adjust controls for the the Building's heating
and air-conditioning systems other than room thermostats installed for Tenant's use.
24. Canvassing, soliciting and distributing handbills or any other written material and peddling
in the Building or on or about the Project are prohibited, and Tenant shall cooperate with
Landlord to prevent these activities.
25. Tenant shall not store any materials or items outside of the Premises without the prior
written consent of Landlord.
26. Tenant shall not install any telephones, burgler alarms or other equipment that tie into or
otherwise affect the electrical,life safety or other systems of the Buildinng without the prior
written consent of Landlord. All approved installations shall comply with Landlord's
specifications and conditions, and shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any governmental body.
27. In the event of any conflict between these Rules and Regulations or any further or modified
rules and regulations from time to time issued by Landlord, and the Lease provisions, the
Lease provisions shall govern and control.
Landlord reserves the right at any time to change or rescind any one or more of these Rules and
Regulations, or to make such other and further reasonable rules and regulations as in Landlord's
judgment may from time to time be necessary for the management, safety, care and cleanliness of
the Premises, and for the preservation of good order therein, as well as for the convenience of
other tenants and occupants of the Project. Landlord shall not be responsible to Tenant or to any
other person for the non-observance or violation of these Rules and Regulations by any other
tenant or person. Tenant shall be deemed to have read these rules and Regulations and to have
agreed to abide by them as a condition to its occupancy of the space herein leased, and Tenant
shall abide by any additional rules and regulations which are ordered or requested by Landlord or
by any governmental authority.
EXHIBIT E
CONSTRUCTION POLICIES AND PROCEDURES
The following constitutes the construction policies and procedures for all work performed on
properties managed by Basin Street Properties ("BSP"). This establishes a general outline of our
policies for and procedures in the typical processes required for construction and are subject to
change at BSP's discretion. Any questions regarding the following should be immediately directed
to the BSP Construction Manager. The BSP Construction Manager may authorize deviations from
these procedures from time to time, but all such deviations shall only be effective on written
requests submitted in advance and by way of written response.
I. COVID-19 REGULATIONS
All work shall be conducted pursuant to County requirements governing COVID-19. For work
conducted in an occupied Tenant space,the adherence to Tenant requirements for access and work
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performance shall be mandatory. Facial covering is required by all workers at all times while in
common areas of the buildings and within tenant occupied spaces. Refer to attached BSP Cares
Covid-19 Prevention Policy.
II. ADMINISTRATION
Contractors shall notify the responsible Construction/Property Management personnel in writing
at 300 E 2nd St., Reno,NV Suite 1210, 775-200-8597 at least 24 hours in advance of starting any
work — a "daily look-ahead" schedule shall be sent to the Construction Manager and property
management team by 3:00pm the day prior for work the next day. No exceptions. This notification
shall include the identification of contractors onsite, duration of work, a description of the work to
be performed and contact information for contractor's on-site representative in charge during the
timeframe.
Prior to the start of any services or construction work, Contractor shall submit for approval to
Construction/Property Management Certificates of Insurance for Contractor and any
subcontractors, a copy of the project schedule, contact information for Contractor's Superintendent
and all subcontractors, MSDS for any products to be used during construction, and a signed copy
of these Basin Street Properties Construction Policies and Procedures.
Specific Insurance Requirements for the property, including information on additional insured
requirements and certificate holder are provided as Exhibit B in the contract.
Two (2) full sets of construction documents are required to be submitted to the Building
Management Office at least 10 days prior to the start of construction. BSP Construction Manager,
Property Manager and Chief Engineer shall have at least five (5) business days to review the
documents for compliance and any revisions. Approval of the documents may be subject to change
based on new information presented to management.
A preconstruction and kick-off meeting will be required prior to the start of any major construction
project. Construction/Property Management,the building's Chief Engineer and the Contractor will
be required to attend. The General Contractor shall be responsible for scheduling and taking
meeting notes for this preconstruction meeting and any subsequent meetings following,which
may occur weekly or bi-weekly depending on BSP Construction Manager's requirements.
Items to cover for the preconstruction meeting include the timing and logistics of work, building
access, safety controls and measures, review of the building Rules &Regulations, and the existing
condition of building common areas. Photographs of existing conditions may be taken and are
encouraged for submittal to Construction/Property Management to include in the project file.
24-hour advance notification to Construction/Property Management of all subcontractors working
in the premises and the nature of any work being performed will be required. These notifications
must indicate if bypass of smoke detectors, sprinkler shut down, or hot work will be required. It is
preferred that a memo be emailed daily for next day work with this information to the attention of
the BSP Construction Manager Paul Rosenfeld (prosenfeld&basin-street.com) with a copy to the
Property Manager Brenda Lopez (blopez&basin-street.com).
Any issues identified by Contractor during construction which may affect the performance of the
work not originally anticipated, shall be brought to the attention of the BSP Construction Manager
upon discovery. Any changes that require additional work, not described in the bid shall be
affective only once approved in writing by Construction/Property Management. It is presumed that
any contractors engaged to perform work have prior to submitting their proposal surveyed existing
conditions and have taken these into account in context with the anticipated work.
Upon completion of work, and as a condition for release of final payment, Contractor shall provide
Construction/Property Management with two copies of all as-built construction documents to
include at a minimum mechanical, electrical, plumbing, and fire sprinkler drawings (both in paper
form and CAD file for any design/build work),updated electrical panel schedules, complete finish
schedule ("match existing" is unacceptable), air and water balance reports, warranties, and O&M
manuals for any new equipment. An air balance report reflecting actual supply air distribution will
be required whenever the existing HVAC air distribution is modified in any way. A water balance
report reflecting actual water flow values is required for any new perimeter reheat VAV. The
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building's EMS system graphics (including floor plans and mechanical system components) and
programming is required to be updated whenever there are any changes—if applicable.
General Contractors shall be responsible for ensuring that all subcontractors or other service
providers are advised of and will adhere to these Construction Policies and Procedures.
III. INSURANCE, MSDS, LOCK OUT TAG OUT, and HOT WORKAMPAIRMENT
REQUIREMENTS
While performing services at the Property, all contractors and any subcontractors are required to
carry and maintain general insurance coverage in accordance with the Vendor/Contractor Insurance
Requirements of the Construction Contract(Exhibit B). An approved certificate of insurance must
be on file with the Construction/Property Management Office for access to be granted and
construction to begin—no exceptions.
The General Contractor is responsible for ensuring that all subcontractors maintain the appropriate
insurance while performing services at any property managed by Basin Street Properties. The
insurance requirements will be strictly enforced. There will be no exceptions to this coverage.
As required under OSHA's Hazard Communication Standard (29 CFR 1910.1200), all
subcontractors are to provide the Construction Manager with MSDS's (Material Safety Data
Sheets) for any and all hazardous materials they might use or bring on site as part of their routine
tasks. Please note that consumer products (copy machine toner, scouring cleanser, etc.) are not
covered by the Standard.
Prior to performing any work, please forward to the property management office the following: A
list of all hazardous materials used or stored. Including materials with odor such as carpet glue,
paint, adhesives, caulk, etc.
An MSDS for each product. These can be obtained from the manufacturer or supplier of the
product.
Lock out tag out procedures will be strictly enforced. Electrical contractor will be required to
provide documentation of their lock out tag out policy and procedures or arrange for their personnel
to be trained on any Basin Street Properties lock out tag out procedures. This training will be
provided by the building's Chief Engineer, if contractor's policy is less stringent.
A hot work permit must be issued prior to engaging in any work that would create heat, sparks, or
an open flame. Only BSP building engineering personnel can issue a hot work permit. Training on
Hot Work Permit procedures and requirements will be provided as needed by the building's Chief
Engineer.
A red tag permit must be issued prior to any fire sprinkler or fire alarm impairment. Only building
engineering personnel can issue a red tag permit. Training on Red Tag Permit procedures and
requirements will be provided as needed by the building's Chief Engineer.
IV. BUILDING FACILITIES COORDINATION
After the project kick off, access to the Suite under construction will be the responsibility of the
Tenant or General Contractor. A construction Suite key and building access card may be picked
up from the property management. Additional building access keys may be checked out to the
General Contractor to allow for subcontractors to move workers and materials into and out of the
building outside of normal business hours, without propping building entrance doors, which is
strictly prohibited. Building doors are never to be propped open.
Advance notice of 48 hours is required for potential access into another tenant's Suite. This
work must be performed off-hours. Contractors must identify the scope of work and reason
for access, duration of time needed in their space and the Contractor is responsible for
securing the space upon completion of work, as well as any cleaning required as a result of
their work. The space must be left in the same, or better condition than found. Should the
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tenant require a Security guard, or BSP employee to stand-by during this time, this costs to
do so shall be the responsibility of the Contractor.
The General Contractor must provide for the removal of all trash and debris arising during
construction. Upon Construction/Property Management approval, the General Contractor may
place a dumpster in the parking lot for construction debris(location to be approved by Construction
Management, Property Management, or Engineering). Dumpsters are to be set on wood
cribbing to prevent damage to asphalt during placement and removal. At no time are the
building's dumpsters to be used for disposing of construction materials.
All deliveries of material will be made outside of the building's normal business hours of 7:00am
to 6:00pm Monday through Friday. In addition to material deliveries, the following activities will
be required to be performed outside of normal business hours:
1. Anchoring of walls or supports to the concrete deck
2. Core drilling
3. Using powder actuated tools
4. Laying of tack strips
5. Painting/staining (includes spray painting of floor for layout and floor monuments),
snapping chalk lines is preferred
6. Glue down carpet installation
7. Cutting/threading of sprinkler pipe within building
8. Installation of millwork(fabrication of millwork is to be done off-site)
9. Saw cutting of any concrete, stone, or metal
10. Life Safety audible device testing
11. Performance of any construction activity producing other loud noise
12. The application of any odor-producing product, i.e. adhesives, cleaning products, etc.
Note: This is not a complete list of activities that must be performed outside of normal
business hours. In general,Contractor shall not make or permit any unnecessary annoyance
to occupants of the property, and shall minimize the affects of necessary work impacts by
scheduling such activities to avoid disturbance to occupants. This applies especially to any
work that is significantly noisy, odorous or dust generating, smelly, or creating hazardous
conditions, which shall be scheduled outside of normal business hours. Every effort will be
made to accommodate construction activities during normal business hours, however, if
construction activity is disruptive enough to impact the business operation of a neighboring
Suite, the activity will have to be stopped. Deviations from building standards must be
approved by BSP in advance.
V. HOUSEKEEPING& GENERAL REQUIREMENTS
GOOD HOUSEKEEPING RULES AND REGULATIONS WILL BE STRICTLY
ENFORCED. CONTRACTORS OR SUBCONTRACTORS WHO DO NOT OBSERVE
THE CONSTRUCTION POLICIES MAY BE EXCLUDED FROM PERFORMING
WORK WITHIN ANY BSP MANAGED BUILDING.
Suite entrance doors are to remain closed at all times, except when hauling or delivering
construction material. Walk-off or sticky mats shall be placed at all interior sides of suite doors so
that feet may be wiped or construction dust removed from shoes upon entering common area.
Magnetic-held doors and doors off of main corridors must never be obstructed. This is a life
safety/fire code violation.
All construction done on the property that requires the use of lobbies or common area corridors as
the path of travel will have carpet protection for all carpet within the path of travel. This includes
carpet within elevators. Extra heavy duty,non-slip and self adhering Mylar is preferred. Masonite
will be required to protect lobby floors and other hard surfaces that could be damaged by heavy
deliveries. When used, Masonite must be taped to floor and adjoining areas. All corner edges and
joints are to have adequate anchoring to provide safe and "trip-free" transitions. Do not block
operation of any doors.
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Prior to any demolition, pre-filters must be installed in return air openings. If return air openings
are too large to filter, pre filters must be installed in filter bank for the A/C unit serving the
construction area.
Restroom washbasins are not to be used to fill buckets,make pastes,wash brushes, etc. If facilities
are required, arrangements for utility closets can be made with the management office in advance.
Food and related lunch debris are not to be left in the Suite under construction.
Construction/Property Management reserves the right to refuse access to anyone wearing
inappropriate clothing, or who doesn't conduct themselves in a professional manner.
Contractors are responsible for any damage caused to others work, the building, or building
finishes.
Access to the roof may require prior arrangements with BSP Construction/Property management.
During building hours,the building entrances,driveways,reserved parking stalls must remain clear
and not be taken up for deliveries, contractor parking, or materials. Parking areas for contractor
employees and material storage and staging areas shall be established in advance with the BSP
Construction Manager or Property Manager.
No bicycles, or animals of any kind (other than certified service animals) shall be brought into, or
kept about the premises.
No weapons, explosives, combustibles, or other hazardous devices allowed on the premises. No
exceptions.
Smoking is permitted at designated areas only and no alcohol is to be brought onto the premises at
any time.
Any signage to be posted, must be approved by the Construction/Property Manager in advance.
Management reserves the right to remove any signage at any time.
No radios, or loud music.
Contractors are to provide restroom facilities for use by construction personnel. Building restroom
facilities are not to be used by Contractors, or their subcontractors. The location of temporary
facilities is to be approved in advance by Construction/Property Management. All such facilities
to be secured after work hours.
All areas that the General Contractor, or their subcontractors are performing work must always be
kept broom clean. All common areas are always to be kept clean and clear of building materials.
Prep work, cutting or staging of materials, etc. is not allowed in common areas. Any mess made
in common areas due to hauling construction debris or materials or footprints must be cleaned up
immediately. General Contractor will be responsible to provide a vacuum cleaner for this purpose.
Final cleaning of Suite will include,but is not limited to,blowing out smoke detectors with micron
filtered air, dusting of all windowsills, window coverings and light diffusers, cleaning of cabinets
and sinks, and clearing acoustical ceiling area of any excess ceiling tiles or other construction
debris.
As a result of construction,the common areas may need special attention to restore such to building
standards. Contractor shall arrange to walk with Construction/Property Management prior
to beginning work and upon completion. Take note of any preexisting damage to common
areas and determine if repairs or special cleaning are required at completion.
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
Contractor and any subcontractor use of the property for any activity other than conducting the
work required of contractor is strictly prohibited.
Should contractor detect any materials that may be considered as hazardous or dangerous,
contractor to notify BSP Construction Manager before disturbing such material.
Use of freight or passenger elevators shall be scheduled in advance with the BSP Property
Management office. Temporary protection with Masonite panels and elevator pads shall be
installed by Contractor, and Contractor shall be responsible for any damage arising from such use.
VI. CONSTRUCTION REQUIREMENTS
GENERAL CONSTRUCTION
Standard base building power will be provided to the contractor at no cost, provided contractor's
use is limited to the work required of contractor.
All keying of locksets and all connections to the Fire Alarm/Life Safety System shall be performed
by contractors or vendors designated by BSP Property Management. In some cases, roofing and
fire sprinkler work is similarly limited.
FIRE/LIFE SAFETY
All applicable Fire/Life Safety and Building Codes will be strictly enforced (i.e., tempered glass,
fire doors, fire/smoke dampers, exit signs, smoke detectors, strobes, alarms, etc.). A building
engineer must be present to test any new life safety devices. 24 — 48 hours, prior coordination
with the building's Chief Engineer is required. Testing of audible devices must be scheduled
outside of normal business hours. Any penetrations in floors/ceilings or fire rated walls will require
sealing with a UL listed fire stop. An approved temporary seal is required until the work is
completed. Upon completion of construction, a permanent seal is required.
During demolition, any smoke detectors in the area must be bypassed and covered to prevent
contamination. Building engineers will perform bypasses as required, but it is the contractor's
responsibility to ensure that smoke detectors are covered during work and then uncovered at the
end of each shift. Any time smoke detectors are bypassed and covered; the contractor will be
responsible to provide fire watch.
If the building sprinkler system needs to be drained, advance approval by BSP's Chief Engineer is
required. A red tag permit will be required, and hot work will be prohibited in the area during any
impairment of the sprinkler system. If this work is performed after hours,any overtime engineering
fees will be the responsibility of the General Contractor. The General Contractor will also be
responsible to provide fire watch during any impairment.
Any wall penetrations must be patched in a manner as to maintain the rating of the wall.
All panel programming to be performed by BSP's preferred Contractor. Coordination with BSP's
Chief Engineer required in advance.
ELECTRICAL
Lighting circuits will be dedicated to Suite and sentry switches are required throughout space. Any
work on lighting or plug load circuits that could potentially impact neighboring Suites will be
performed outside of normal business hours. Lighting design must clearly indicate night light
fixture locations.
All affected electric panel schedules must be typewritten and brought up to date,identifying
all new circuits added.
All runs are to be in conduit.
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
In most cases, the space above ceiling is return air plenum and therefore the use of PVC and other
flammable material not labeled for use in such area is not to be used.
All "J"boxes are to be labeled with voltage,panel, and circuit numbers.
On remodeling work, any wiring, including communication cable, conduit, etc. that is not going to
be re-used MUST BE demolished out to original point of connection.
All electrical outlets and lighting circuits are to be properly identified. Outlets shall be labeled on
backside of cover plate.
Floor scans may be required prior to coring. Any scans required shall be the Contractor's cost.
All low voltage wiring is to be plenum rated and shall not rest on ceiling tiles, fire sprinkler lines,
ductwork,VAV boxes,or conduit and must be supported properly from the deck above with jhooks
or cable tray as may be required. Under no circumstances should the cabling run through building
dampers and should not penetrate rated walls without a conduit sleeve and fire rated caulking to
maintain rating.
All electrical and phone closets being used must have panels replaced and doors shut at the end of
each day's work. Any electrical closet that is opened with panel exposed must have a work person
present. Electrical room doors must not be propped open without someone present.
All electricians,telephone cable installation personnel etc.,will upon completion of their respective
projects,pickup and discard their trash leaving the telephone and electrical rooms clean. If this is
not complied with, the building janitors will conduct a clean up, and the General Contractor will
be back charged for this service.
PLUMBING
Only commercial grade, ADA compliant fixtures/appliances shall be installed. Residential grade
is not acceptable.
Adjustable trap primers must always be installed, where applicable.
An isolation valve must be installed for any new water supply and the ceiling location tagged to
identify the shut-off valve. The use of flexible tubing, unless of braided stainless steel, is
prohibited.
HVAC
Only building standard grills and diffusers are to be installed. Any room with a door, which is
larger than a 4'x 6' closet,must have a return air grill. Flags must be used to identify any balancing
dampers installed in ductwork. All VAV boxes, controls, ductwork must match building standard.
Any VAV boxes, ductwork, exhaust fans, or supplemental cooling units not being utilized MUST
BE demolished out to original point of connection. Any equipment above ceiling visible through
return air grilles must be painted flat black.
Service access to existing equipment shall not be hampered or obstructed by added equipment or
any installation required of contractor.
A preliminary inspection of the HVAC work in progress will be scheduled through the
Management Office prior to the re-installation of any removed ceiling grid. The General
Contractor must schedule this with the Chief Engineer.
Supplemental A/C units will require sub meter (Emon-Dmon) to determine billable electrical
consumption. Review installation and location for such meters with building's Chief Engineer
prior to any work. Roof curbs and penetrations will be performed by BSP approved roofing
contractor only. Any roof top equipment must be labeled with Suite number and installation date.
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
The Contractor is responsible for maintaining the integrity of the roof and providing a watertight
seal at any penetrations.
All programming of controls will be performed by BSP's preferred Contractor. No exceptions.
Water source reheat VAV's will require water balance valves, air vents, and strainers.
Contractor's signature below indicates acknowledgement and understanding of the BSP
Construction Policies and Procedures.
Contractor's Name:
Contractor's Signature:
Date:
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
a
BASIN STREET
PROPERTIES
Vendor 1 1 Request II
This Form must be completed entu ely. \`•ork may not be permitted if the
form is incomplete. Hot AVork.Life safen-System shut down.and work
requiring the Engineering Staff on site will require 24-hour prior notice.
Contractor requesting disablement o Fire & Life .S'afen .Svstents is responsible for
fire match of the building glaring the entire requested tinte window or until
conftrntation is received that the fire s.rstent operation has been restored to norttlal.
Please check one: ❑BuildingCorrrecror ❑TenawConnacror
Company Name:
Sub-C onn actors:
Work Date: Time to Begin: Time to End:
Type of work to be done:
❑Hot',l'ork(24-hour notice required) ❑Life Safety System(24-hour notice required)
❑Electrical Power Shutdoun ❑Natural Gas Shutdown
24-horn notice required) (24-hoar notice required)
❑Building Water Supply Shutdown(24-hour notice required)
❑Other(please describe):
Location of Work:
hey access Needed: ❑Telco ❑Electrical ❑ Other:
Emergency Contact Information:
Name: Phone:
On-Site Super-tisor Name: Phone
Tenant Approval: Date:
Building Management Approval: Date:
FOR11 TO BF RET1-REED TO EUILDLN"G 1L4-N:4GE11E T OFFICE
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
BASIN STREET
PROPERTIES
BSP CARES
COVID- 19
Prevention Policy for
BSP Contractors &
Vendors
https://www.osha.gov/Publications/OSHA3990.pdf
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**a copy-of this packet till ke Fent to each rf as part of the Building Rules&Refnilafiou. All contractor•,.uMontraetors and
vendor.rnust comply.Should you have any tptcstions.or concerns please reach out to Nour CM/P]t in inl auce of.tarting cork at any
BSP facility
BSP Recommendations for Prevention & Spread of Covid-19
• Wash hands frequently—use soap and water for a minimum of 20 seconds and if soap and water isu t
available,use hand sanitizer(minimum of 60%alcohol)and rub hands together until dry
• Maintain social distancing of at least 6'whenever possible
• Avoid touching your face;Rpeelfically your eyes.nose and mouth
• If you're:feeling ill,stay home and encourage others to do the same
• Confirm facial covering requirements with your CbI/PM before entering BSP buildings and tenant
occupied Suites—facial coverings atr required in common areas and tenant occupied spaces
• Use signage to help encourage subcontractors to wear facial coverings while onsite and in tenant occupied
spaces
• 'Train your employees to recognize the symptoms of Covid-19
• Train your employees on proper use of PPE
• Notifv vour BSP CNINNI immediately if anyone who has visited a BSP propert.,or project exhibits
symptoms,or tests positive for Covid-19
• Stay up-to-date on the latest information distributed by the CDCIOSHA and encourage subcontractors to
do the same
EXHIBIT F
4824-5420-3806,v.2
DocuSign Envelope ID:73316F48-A3B9-4733-AFAD-31432B8DF334
PAYMENT INFORMATION
Bank Name: Wells Fargo Bank
Bank Address: 420 Montgomery St., 6th Floor
San Francisco, CA 94104
Bank Phone #: (415)396-6934
Account Name: Petaluma Theater District, LLC
Garage Retail CA, LLC
Account Address: 316 California Avenue#350
Reno,NV 89509
Phone#: (775) 954-2900
Account#: 4120341086
ABA#: 121000248
4824-5420-3806,v.2