HomeMy WebLinkAboutC-9017-3 - Dove Street, 1201 (Suite 480) Office LeaseSECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE ("Second Amendment") is made and entered into as
of April 2, 2025, by and between THE CITY OF NEWPORT BEACH, a California municipal corporation and
charter city ("Landlord") and LAWSON V. SEALEY CHIROPRACTIC PROFESSIONAL CORPORATION,
a California corporation ("Tenant").
RECITALS
A. Landlord (as successor -in -interest to AG Dove Owner, L.P., a Delaware limited
partnership, as successor -in -interest to BRE/OC Property Holdings L.L.C., a Delaware limited liability
company) and Tenant entered into that certain Office Lease dated as of January 3, 2018 (the "Original
Lease") as amended by that certain First Amendment to Lease dated as of July 1, 2024 ("First
Amendment"), whereby Landlord leases to Tenant and Tenant leases from Landlord certain office space
in that certain building located and addressed at 1201 Dove Street, Newport Beach, California (the
"Building"). The Original Lease, as amended by the First Amendment, may be referred to herein as the
"Lease."
B. By this Second Amendment, Landlord and Tenant desire to extend the Term of the Lease,
which is set to expire June 30, 2025, and to otherwise modify the Lease as provided herein.
C. Unless otherwise defined herein, capitalized terms as used herein shall have the same
meanings as given thereto in the Original Lease.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. The Premises. Landlord and Tenant hereby agree that pursuant to the Lease, Landlord
currently leases to Tenant and Tenant currently leases from Landlord that certain office space in the
Building containing 1,429 rentable square feet located on the fourth (4th) floor of the Building and known as
Suite 480 (the "Premises"), as outlined on Exhibit A to the Original Lease.
2. Extended Lease Term. The Term of the Lease is hereby extended through June 30, 2026
("Revised Expiration Date"). The period from July 1, 2025 through the Revised Expiration Date shall be
referred to herein as the "Second Extended Term." Tenant shall not have any right to extend the Lease
beyond the Second Extended Term.
3. Monthly Base Rent. Notwithstanding anything to the contrary in the Lease, Tenant shall
pay monthly Base Rent for the Premises during the Second Extended Term as follows:
Monthly Monthly Base Rent
Period Base Rent Per Rentable Square Foot
7/1/25 - 6/30/26 $4,572.80 $3.20
4. Base Year. Notwithstanding anything to the contrary in the Lease, during the Second
Extended Term, the Base Year for Taxes and Expenses shall be the calendar year 2025.
4911-0335-8760.1
5. Condition of the Premises. Tenant hereby agrees to accept the Premises in its "as -is"
condition and Tenant hereby acknowledges that Landlord shall not be obligated to provide or pay for any
improvement work or services related to the improvement of the Premises. Tenant also acknowledges that
Landlord has made no representation or warranty regarding the condition of the Premises.
6. California Certified Access Specialist Inspection. Pursuant to California Civil Code§ 1938,
Landlord hereby states that the Premises have undergone inspection by a Certified Access Specialist
(CASp) (defined in California Civil Code§ 55.52). Tenant hereby acknowledges that it has been provided
a copy of the CASp inspection report at least forty-eight (48) hours prior to the execution of this Second
Amendment and Tenant agrees that information in the report shall remain confidential, except as necessary
for Tenant to complete repairs and corrections of violations of construction -related accessibility standards
in the Premises. The cost of making any repairs necessary to correct violations of construction -related
accessibility standards indicated by the CASp report in the Premises will be Tenant's responsibility, which
modifications will be completed as an Alteration, notwithstanding anything to the contrary in the Lease (as
amended).
7. Security Deposit. Tenant has previously deposited with Landlord $14,878.50 as a Security
Deposit under the Lease. Landlord shall continue to hold the Security Deposit in accordance with the terms
and conditions of Section 21 of the Original Lease.
8. Defaults. Tenant hereby represents and warrants to Landlord that, as of the date of this
Second Amendment, Tenant is in full compliance with all terms, covenants and conditions of the Lease and
that there are no breaches or defaults under the Lease by Landlord or Tenant, and that Tenant knows of
no events or circumstances which, given the passage of time, would constitute a default under the Lease
by either Landlord or Tenant.
9. Brokers. Each party represents and warrants to the other that no broker, agent or finder
negotiated or was instrumental in negotiating or consummating this Second Amendment other than CBRE,
Inc. (Matt Didier and Jessie Tichelaar) who represented Landlord in connection with this Second
Amendment and CBRE, Inc. (Cameran F. Lindee) who represented Tenant in connection with this Second
Amendment. Each party further agrees to defend, indemnify and hold harmless the other party from and
against any claim for commission or finder's fee by any other person or entity who claims or alleges that
they were retained or engaged by the first party or at the request of such party in connection with this
Second Amendment.
10. Signing Authority. The individual(s) executing this Second Amendment on behalf of Tenant
hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in
the State of California and that Tenant has full right and authority to execute and deliver this Second
Amendment and the person(s) signing on behalf of Tenant are authorized to do so.
11. Attorneys' Fees. Section 25.6 of the Original Lease is hereby deleted in its entirety and
replaced with the following:
"25.6 Attorneys Fees. If either party institutes a suit against the other for violation of or to enforce
any covenant, term or condition of this Lease, the prevailing party shall NOT be entitled to any
costs, expenses, or attorneys' fees."
12. Counterparts; No Electronic Delivery. This Second Amendment may be executed in one
or more counterparts, each of which shall constitute an original and all of which shall be one and the same
agreement. If a variation or discrepancy among counterparts occurs, the copy of this Second Amendment
in Landlord's possession shall control. Execution of this Second Amendment as well as any and all other
documents and instruments required under the terms of the Lease or to amend its terms shall require
handwritten, "wet" signatures. The parties may not exchange counterpart signatures by facsimile or
electronic transmission and electronic or digital signatures shall not be valid.
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4911-0335-8760.1
13. No Further Modification. Except as set forth in this Second Amendment, all of the terms
and provisions of the Lease shall apply during the Second Extended Term and shall remain unmodified and
in full force and effect. Effective as of the date hereof, all references to the "Lease" shall refer to the Lease
as amended by this Second Amendment.
IN WITNESS WHEREOF, this Second Amendment has been executed as of the day and year first
above written.
"LANDLORD" THE CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
By:
Gr . Leung, City Manage
ATTEST:
By: 1. -
(,or Le an I. Brown, City Clerk
3
APPROVED AS TO FORM:
c� '312�1z5
By: �j-n. i
Aa4 C. Harp, City ttorney /v/1S
"TENANT"
LAWSON V. SEALEY CHIROPRACTIC
PROFESSIONAL CORPORATION,
a California corporation
By: Onft
Name: Signed in
Title:
By: d
Name: S',�nned
in c°u
Title:
This Second Amendment must be signed by two (2) officers of Tenant: one being the chairman of the
board, the president or a vice president, and the other being the secretary, an assistant secretary, the
chief financial officer or an assistant treasurer. If one (1) individual is signing in two (2) of the foregoing
capacities, that individual must sign twice; once as one officer and again as the other officer.
-3-
4911-0335-8760.1
13. No Further Modificat on. Except as set forth in this Second Amendment, all of the terms
and provisions of the Lease shall apply during the Second Extended Term and shall remt- in unmodified and
in full force and effect. Effective as of the date hereof. all references to the "Lease" shal refer to the Lease
as amended by this Second Amendment
IN WITNESS WHEREOF, this Second Amendment has been executed as of the day and year first
above written.
"LANDLORD"
ATTEST -
By - —
Leilani I Brown; City Clerk
APPROVED AS TO FORM
THE CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
Grace K Leung, City Manager
F
By -
Aaron C Harp, City Attorney J.
"TENANT" LAWSON V SEALEY CHIROP ,ACTIC
PROFESSIONAL CORPORATIC:N.
a California corporation
_ B _
Name' CS•:U1.a -��_L l
Title: ��--------- /
By -
am e: L��— ��.�. 1-2'-� L5
Title:
This Second Amendment must be signed by two (2) officers of Tenant- one being thc chairman of the
board, the president or a vice president. and the other being the secretary, an assist.=inl secretary. the
chief financial officer or an assistant treasurer. If one (1 ) individual is signing in t-v,,o (2) of [fie foregoing
capacities. that individual must sign twice; once as one officer and again as the other officer.
-3-
a9� t-O;i35-A76Q �
ACKNOWLEDGMENT OF GUARANTOR
The undersigned, Guarantor under that certain Guaranty of Lease entered into on or about
January 3, 2018 (the "Guaranty") hereby consents to the foregoing Second Amendment and further
acknowledges that the Guaranty remains in full force and effect with regard to the Lease, as amended by
the foregoing Second Amendment.
Dated: April 2, 2025
LAWSON V. SEAL.EY, AN INDIVIDUAL
CONSENT OF SPOUSE OF i WSON W. SEAI_EY
By:`t—�—
N me: Mila Sealey
-4-
4911-0335-8760.1
r
r
o FIRST AMENDMENT TO LEASE
' THIS FIRST AMENDMENT TO LEASE ("First Amendment") is made and entered into as of July
V 1, 2024, by and between THE CITY OF NEWPORT BEACH, a California municipal corporation and charter
city ("Landlord") and LAWSON V. SEALEY CHIROPRACTIC PROFESSIONAL CORPORATION, a
California corporation ("Tenant"). The following exhibit is incorporated herein and made a part hereof: Rider
No. 4 (Waiver of Relocation Benefits). (Rider Nos. 1, 2, and 3 are reserved.)
RECITALS:
A. Landlord (as successor -in -interest to AG Dove Owner, L.P., a Delaware limited
partnership, as successor -in -interest to BRE/OC Property Holdings L.L.C., a Delaware limited liability
company) and Tenant entered into that certain Office Lease dated as of January 3, 2018 (the "Lease"),
whereby Landlord leases to Tenant and Tenant leases from Landlord certain office space in that certain
building located and addressed at 1201 Dove Street, Newport Beach, California (the "Building").
B. By this First Amendment, Landlord and Tenant desire to extend the Term of the Lease,
which is set to expire June 30, 2024, and to otherwise modify the Lease as provided herein.
C. Landlord and Tenant desire to confirm certain facts as a condition to entering into this First
Amendment, including that this extension of the Lease term is made and is to be effective after May 2023,
the date that Landlord acquired the Building. Tenant agrees that its occupancy of the Premises is, will be,
and shall remain as a "post -acquisition" occupant pursuant to applicable federal, state, and local laws and
regulations regarding relocation assistance, benefits, or compensation for moving and for property interests
(including without limitation furnishings, fixtures and equipment, goodwill, and moving expenses) (referred
to herein as "Relocation Law"), as more fully set forth in Rider No. 4.
D. Unless otherwise defined herein, capitalized terms as used herein shall have the same
meanings as given thereto in the Lease.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT:
1. The Premises. Landlord and Tenant hereby agree that pursuant to the Lease, Landlord
currently leases to Tenant and Tenant currently leases from Landlord that certain office space in the
Building located on the fourth (41h) floor of the Building and known as Suite 480 (the "Premises"), as
outlined on Exhibit A to the Lease. Landlord and Tenant further agree that (a) Landlord has re -measured
the Premises, and according to such re -measurement, the rentable square footage of the Premises is 1,429
rentable square feet; and (b) from and after the Extension Commencement Date (as defined in Section 2
below), (i) the rentable area of the Premises shall be deemed to be the square footage set forth in the
preceding clause (a), and (ii) Tenant's Share of the Building shall be 1.72% (1,429 rentable square feet
within the Premises / 82,868 rentable square feet within the Building).
2. Extended Lease Term. The Term of the Lease is hereby extended through June 30, 2025
("Extended Expiration Date"). The period from July 1, 2024 ("Extension Commencement Date")
through the Extended Expiration Date shall be referred to herein as the "Extended Term." Tenant shall
not have any right to extend the Lease beyond the Extended Term.
4863-4073-3603.1
3. Monthly Base Rent. Notwithstanding anything to the contrary in the Lease, Tenant shall
pay monthly Base Rent for the Premises during the Extended Term as follows:
Period Monthly Base Rent Monthly Base Rent Per
Rentable Square Foot
7/1/24 — 6/30/25 $4,572.80 $3.20
4. Base Year. Notwithstanding anything to the contrary in the Lease, during the Extended
Term, the Base Year for Taxes and Expenses shall be the calendar year 2024.
5. Improvements to the Premises. Promptly after full execution and delivery of this First
Amendment, and at a mutually convenient time to be agreed upon by Landlord and Tenant, Landlord shall
one time, at Landlord's sole cost and expense and in Landlord's Building -standard manner, professionally
clean the carpeted areas within the Premises. Landlord will not be responsible for moving any of Tenant's
furniture or equipment in connection with the performance of the above work, and Tenant shall be solely
responsible for such furniture and equipment. Tenant hereby acknowledges that Landlord will be
performing such improvement work during the current Lease Term and/or the Extended Term, and
Landlord's performance of such work shall not be deemed a constructive eviction of Tenant, nor shall
Tenant be entitled to any abatement of Rent in connection therewith. Except as specifically set forth in this
Section 5, Tenant hereby agrees to accept the Premises in its "as -is" condition and Tenant hereby
acknowledges that Landlord shall not be obligated to provide or pay for any improvement work or services
related to the improvement of the Premises. Tenant also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises.
6. Parking. Effective as of the Extension Commencement Date, Section 1.9 of the Lease
shall be restated in its entirety as follows: "The Unreserved Number (defined below) of unreserved parking
spaces shall be at the rate of $25.00 per space per month during the Extended Term. The Reserved
Number (defined below) of reserved spaces shall be at the rate of $100.00 per reserved space per month
during the Extended Term. As used herein, "Unreserved Number" means five (5) and "Reserved
Number" mean zero (0); provided, however, that Tenant, upon thirty (30) days' notice to Landlord from time
to time, may (a) change the Unreserved Number to any whole number from zero (0) to five (5), and/or
(b) change the Reserved Number to any whole number from zero (0) to three (3); provided further, however,
that the sum of the Unreserved Number plus the Reserved Number shall not exceed five (5). Visitor and
guest parking shall be available within designated short-term visitor parking areas of the surface parking lot
adjacent to the Building at Landlord's prevailing validation rates. Notwithstanding the foregoing, Landlord
shall provide Tenant with seventy-five (75) hours per month of free visitor validations on a non -cumulative
basis. The location of any Tenant reserved parking pursuant to this Section 1.9 shall be mutually agreed
upon in good faith by Landlord and Tenant."
7. Possessory Interest. Tenant acknowledges that the Lease may create a possessory
interest subject to property taxation and that Tenant may be subject to the payment of property taxes levied
on such interest. Tenant shall pay, before delinquency all Taxes that are levied or assessed against
Tenant's interest in the Premises or any personal property installed on the Premises.
8. California Certified Access Specialist Inspection. Pursuant to California Civil Code § 1938,
Landlord hereby states that the Premises have undergone inspection by a Certified Access Specialist
(CASp) (defined in California Civil Code § 55.52). Tenant hereby acknowledges that it has been provided
a copy of the CASp inspection report at least forty-eight (48) hours prior to the execution of this First
Amendment and Tenant agrees that information in the report shall remain confidential, except as necessary
for Tenant to complete repairs and corrections of violations of construction -related accessibility standards
in the Premises. The cost of making any repairs necessary to correct violations of construction -related
accessibility standards indicated by the CASp report in the Premises will be Tenant's responsibility, which
modifications will be completed as an Alteration, notwithstanding anything to the contrary in the Lease (as
amended).
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic -2-
4863-4073-3603.1
9. Security Deposit. Tenant has previously deposited with Landlord $14,878.50 as a Security
Deposit under the Lease. Landlord shall continue to hold the Security Deposit in accordance with the terms
and conditions of Section 21 of the Lease
10. Defaults. Tenant hereby represents and warrants to Landlord that, as of the date of this
First Amendment, Tenant is in full compliance with all terms, covenants and conditions of the Lease and
that there are no breaches or defaults under the Lease by Landlord or Tenant, and that Tenant knows of
no events or circumstances which, given the passage of time, would constitute a default under the Lease
by either Landlord or Tenant.
11. Brokers. Each party represents and warrants to the other that no broker, agent or finder
negotiated or was instrumental in negotiating or consummating this First Amendment other than CBRE,
Inc. (Matt Didier and Jessie Tichelaar) who represented Landlord in connection with this First Amendment
and CBRE, Inc. (Cameran F. Lindee) who represented Tenant in connection with this First Amendment.
Each party further agrees to defend, indemnify and hold harmless the other party from and against any
claim for commission or finder's fee by any other person or entity who claims or alleges that they were
retained or engaged by the first party or at the request of such party in connection with this First
Amendment.
12. Landlord's Notice Addresses. From and after the date of this First Amendment, notices to
Landlord under the Lease (as amended) shall be sent to the following addresses:
City of Newport Beach
Attn: City Attorney
100 Civic Center Drive
Newport Beach, CA 92660
City of Newport Beach
Attn: Real Property Administrator
100 Civic Center Drive
Newport Beach, CA 92660
LPC West, Inc.
Attn: Parke Miller
4041 MacArthur Boulevard, Suite 500
Newport Beach, CA 92660
13. Signing Authority. The individual(s) executing this First Amendment on behalf of Tenant
hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in
the State of California and that Tenant has full right and authority to execute and deliver this First
Amendment and the person(s) signing on behalf of Tenant are authorized to do so.
14. Counterparts. This First Amendment may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same agreement. If a variation or
discrepancy among counterparts occurs, the copy of this First Amendment in Landlord's possession shall
control.
15. No Further Modification. Except as set forth in this First Amendment, all of the terms and
provisions of the Lease shall apply during the Extended Term and shall remain unmodified and in full force
and effect. Effective as of the date hereof, all references to the "Lease" shall refer to the Lease as amended
by this First Amendment.
[SIGNATURES ON NEXT PAGE]
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic -3-
4863-4073-3603.1
IN WITNESS WHEREOF, this First Amendment has been executed as of the day and year first
above written.
"LANDLORD"
ATTEST:
By: 464
Leilani I. Brown,
THE CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
By:
Gra K eung, City Manager
Clerk 52j. 1 VU
APPROVED AS TO FORM:
By: ' "
A on . Harp,� Ity Att rney s�/)7s
��2 y
"TENANT"
c
LAWSON V. SEALEY CHIROPRACTIC
PROFESSIONAL CORPORATION,
a California corporation
By:
ounteCp
Print Name: C
1g
Title:
By: UCt
Print Name- mine
d C°
Title:
This First Amendment must be signed by two (2) officers of Tenant: one being the chairman of the board,
the president or a vice president, and the other being the secretary, an assistant secretary, the chief
financial officer or an assistant treasurer. If one (1)individual is signing in two (2) of the foregoing
capacities, that individual must sign twice; once as one officer and again as the other officer.
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic -4-
4863-4073-3603J
IN WITNESS WHEREOF, this First Amendment has been executed as of the day and year first
above written.
"LANDLORD" THE CITY OF NEWPORT BEACH,
a California municipal corporation and charter city
By:
Grace K. Leung, City Manager
ATTEST:
In
Leilani I. Brown, City Clerk
APPROVED AS TO FORM:
J—, -�,,
By:
A on �ff,r Harp, ity Att/ rney �7
v
'TENANT' LAWSON V. SEALEY CHIROPRACTIC
PROFESSIONAL CORPORATION,
a California corporation
By: t- SUr" Sig
Print Name: Lo-W,,s�
Title: (0 WY-y
By: L c v,.St,,
Print Name:
Title: d�t�sLr/
This First Amendment must be signed by two (2) officers of Tenant: one being the chairman of the board,
the president or a vice president, and the other being the secretary, an assistant secretary, the chief
financial officer or an assistant treasurer. If one (1) individual is signing in two (2) of the foregoing
capacities, that individual must sign twice; once as one officer and again as the other officer.
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic - t-
4W-4073-3603.1
ACKNOWLEDGMENT OF GUARANTOR
The undersigned, Guarantor under that certain Guaranty of Lease entered into on or about
January 3, 2018 (the "Guaranty") hereby consents to the foregoing First Amendment and further
acknowledges that the Guaranty remains in full force and effect with regard to the Lease, as amended by
the foregoing First Amendment.
Dated: July 1, 2024
LAWSON V. SEALEY, AN INDIVIDUAL
CONSENT OF SPOUSE OF LAWSON V. SEALEY
am
Print Name:
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic -5-
4863-4073-3603.1
ACKNOWLEDGMENT OF GUARANTOR
The undersigned, Guarantor under that certain Guaranty of Lease entered into on or about
January 3, 2018 (the "Guaranty") hereby consents to the foregoing First Amendment and further
acknowledges that the Guaranty remains in full force and effect with regard to the Lease, as amended by
the foregoing First Amendment. _
Dated: July 1, 2024
WSON V. SEALEY, AN INDIVIDUAL
NSENT OF SPOUSE OF LAWSON V. SEALEY
By:
Print Name:
FIRST AMENDMENT TO LEASE
Lawson V. Sealey Chiropractic -5-
4863AO73-3603.1
RIDER NO. 4 TO OFFICE LEASE
WAIVER OF RELOCATION BENEFITS
This Rider No. 4 is made and entered into by and between and the CITY OF NEWPORT BEACH,
a California municipal corporation and charter city ("Landlord") and LAWSON V. SEALEY
CHIROPRACTIC PROFESSIONAL CORPORATION, a California corporation ("Tenant"), as of the date of
the First Amendment ("Amendment") to Lease between Landlord and Tenant to which this Rider No. 4 is
attached. Landlord and Tenant hereby agree that, notwithstanding anything contained in the Lease to the
contrary, the provisions set forth below shall be deemed to be part of the Lease and shall supersede any
inconsistent provisions therein. All references in the Lease and in this Rider No. 4 to "Lease" shall mean
the Lease (and all exhibits and Riders attached thereto), as amended and supplemented, including by
this Rider No. 4. All capitalized terms not defined in this Rider No. 4 shall have the same meaning as set
forth in the Lease.
Tenant acknowledges it has read and understands the following terms and knowingly and
voluntarily enters into the Amendment without coercion, undue influence or other inducement by Landlord
or any other person or entity.
STATUS OF POST -ACQUISITION TENANT.
(a) Landlord has informed Tenant that it acquired the Premises in May 2023 for public
purposes, specifically the construction and development of a public project for a new police department
facility ("Public Facility"). Landlord does not intend to begin construction until after the natural expiration of
the Lease and has informed Tenant that construction will not result in Tenant being displaced or required
to move from the Premises before that time.
(b) The proposed Public Facility would involve demolition and new construction of the
subject Property and Premises. Since potential federal, state, and local funding would be planned for use
in the Public Facility, the Relocation Law (defined herein) may apply to persons and businesses in lawful
occupancy at the time an application for funding is submitted for federal, state and/or local funding.
(c) Tenant enters into the Amendment in consideration of reduced rent and/or other
concessions for Landlord's extending the Lease term. In entering into the Amendment, Tenant knowingly
and voluntarily waives any eligibility it has or may have for relocation payments or assistance under the
Relocation Law, which may include, without limitation, advisory assistance, payment for certain moving
expenses, business re-establishment expenses, and expenses incurred in searching for a replacement
business. Tenant understands that other businesses or persons in occupancy at the Property may be or
become eligible for such relocation assistance. Tenant agrees its status shall hereby be deemed and shall
remain as a post -acquisition tenant.
(d) After full consideration of the foregoing advisement and information, Tenant agrees
that:
(1) under the Relocation Law, including without limitation California
Government Code Section 7260(c)(2)(D), Tenant is not and will not become a "displaced person", having
waived any and all rights to benefits or assistance under the Relocation Law; therefore, Tenant is not, and
shall not become, entitled to relocation assistance or benefits if Tenant moves from the Premises for
whatever reason at any time;
(2) if for any reason Tenant shall ever be determined to be a
"displaced person", Tenant does hereby expressly, intentionally, and knowingly waive each and any claim
of entitlement to relocation assistance and/or benefits under the Relocation Law in connection with the
Tenant's occupancy of the Premises under the Lease.
RIDER NO. 4 1201 DOVE STREET
-1- Lawson V. Sealey Chiropractic
(e) Tenant represents, warrants, and agrees that it has not entered into any other
lease, assignment or any other agreement allowing any third party to occupy all or any part of the Premises.
Tenant represents, warrants, and agrees that as of the date of this Lease, other than Tenant, no other
person or entity has or will have any legal right to possess or occupy the Premises, excepting Tenant.
2. TENANT'S RELEASE AND WAIVER OF LANDLORD CITY OF NEWPORT BEACH.
Tenant is entering into the Amendment with Landlord and agrees that all rights or obligations that exist or
may arise out of the termination of Tenant's leasehold interest at some date in the future, whether for
public, private or any other purposes, include Tenant's intentional release and waiver of any and all rights
to seek remedies under the Relocation Law, to seek compensation for alleged severance damages, pre -
condemnation damages, alleged loss of business goodwill, or for costs, interest, attorneys' fees, and/or
any claim whatsoever that might arise out of or relate in any respect whatsoever directly or indirectly to
the termination of Tenant's leasehold interest by Landlord.
(a) Accordingly, Tenant acknowledges and agrees that should Landlord terminate
Tenant's leasehold interest such termination and the resulting move of Tenant's business and/or removal
of Tenant's personal property from the Premises are non-compensable under the Relocation Law and other
federal and state laws related to Tenant's move of its business from the Premises.
(b) Tenant fully, intentionally, knowingly and voluntarily waives, releases and
discharges Landlord (City of Newport Beach) and its appointed and elected officials, officers, directors,
employees, contractors, and agents (together "Indemnitees") from all and any manner of rights, demands,
liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether
known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner
to (i) the use of the Premises for a public project or other public purposes, (ii) the relocation of any of
Tenant's business operations or the relocation of any person or persons, business or businesses, or other
occupant or occupants located on the Premises, including the specific waiver and release of all rights under
the Relocation Law and/or payments that otherwise may be required under such state or federal law.
(c) Tenant waives all rights to compensation for any interest in the business
operations at, on, or about the Premises including, but not limited to, land and improvements, fixtures,
furniture, or equipment thereon, goodwill, severance damage, attorneys' fees or any other compensation
of any nature whatsoever.
(d) It is hereby intended that the release contained herein relates to both known and
unknown claims that Tenant and any person or entity claiming by or through Tenant may have, or claim to
have, against any of the Indemnitees with respect to the subject matter contained herein or the events
relating thereto. By releasing and forever discharging claims both known and unknown which are related
to or which arise under or in connection with, the items set out above, Tenant expressly waives any rights
under California Civil Code Section 1542 and any similar law of any state or territory of the United States
are expressly waived. Section 1542 reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Tenant Initials:
(e) In connection with the Amendment, and the above release and waiver, Tenant
acknowledges that it is aware that it and its attorneys may hereafter discover claims or facts or legal theories
in addition to or different from those which it know or believe to exist with respect to the claims released
herein, but that Tenant's intention hereby is to fully, finally and forever release and waive all such claims,
known or unknown, suspected or unsuspected, which do now exist, may exist or have existed in favor of
Tenant. In furtherance of such intention, Tenant's entering into the Amendment shall evidence Tenant's full
and complete release and waiver, notwithstanding the discovery or existence of any such additional claims,
RIDER NO. 4 1201 DOVE STREET
-2- Lawson V. Sealey Chiropractic
(e) Tenant represents, warrants, and agrees that it has not entered into any other
lease, assignment or any other agreement allowing any third party to occupy all or any part of the Premises.
Tenant represents, warrants, and agrees that as of the date of this Lease, other than Tenant, no other
person or entity has or will have any legal right to possess or occupy the Premises, excepting Tenant.
2. TENANT'S RELEASE AND WAIVER OF LANDLORD CITY OF NEWPORT BEACH.
Tenant is entering into the Amendment with Landlord and agrees that all rights or obligations that exist or
may arise out of the termination of Tenant's leasehold interest at some date in the future, whether for
public, private or any other purposes, include Tenant's intentional release and waiver of any and all rights
to seek remedies under the Relocation Law, to seek compensation for alleged severance damages, pre -
condemnation damages, alleged loss of business goodwill, or for costs, interest, attorneys' fees, and/or
any claim whatsoever that might arise out of or relate in any respect whatsoever directly or indirectly to
the termination of Tenant's leasehold interest by Landlord.
(a) Accordingly, Tenant acknowledges and agrees that should Landlord terminate
Tenant's leasehold interest such termination and the resulting move of Tenant's business and/or removal
of Tenant's personal property from the Premises are non-compensable under the Relocation Law and other
federal and state laws related to Tenant's move of its business from the Premises.
(b) Tenant fully, intentionally, knowingly and voluntarily waives, releases and
discharges Landlord (City of Newport Beach) and its appointed and elected officials, officers, directors,
employees, contractors, and agents (together "Indemnitees") from all and any manner of rights, demands,
liabilities, obligations, claims, or cause of actions, in law or equity, of whatever kind or nature, whether
known or unknown, whether now existing or hereinafter arising, which arise from or relate in any manner
to (i) the use of the Premises for a public project or other public purposes, (ii) the relocation of any of
Tenant's business operations or the relocation of any person or persons, business or businesses, or other
occupant or occupants located on the Premises, including the specific waiver and release of all rights under
the Relocation Law and/or payments that otherwise may be required under such state or federal law.
(c) Tenant waives all rights to compensation for any interest in the business
operations at, on, or about the Premises including, but not limited to, land and improvements, fixtures,
furniture, or equipment thereon, goodwill, severance damage, attorneys' fees or any other compensation
of any nature whatsoever.
(d) It is hereby intended that the release contained herein relates to both known and
unknown claims that Tenant and any person or entity claiming by or through Tenant may have, or claim to
have, against any of the Indemnitees with respect to the subject matter contained herein or the events
relating thereto. By releasing and forever discharging claims both known and unknown which are related
to or which arise under or in connection with, the items set out above, Tenant expressly waives any rights
under California Civil Code Section 1542 and any similar law of any state or territory of the United States
are expressly waived. Section 1542 reads as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Tenant Initials:_
(e) In connection with the Amendment, and the above release and waiver, Tenant
acknowledges that it is aware that it and its attorneys may hereafter discover claims or facts or legal theories
in addition to or different from those which it know or believe to exist with respect to the claims released
herein, but that Tenant's intention hereby is to fully, finally and forever release and waive all such claims,
known or unknown, suspected or unsuspected, which do now exist, may exist or have existed in favor of
Tenant. In furtherance of such intention, Tenant's entering into the Amendment shall evidence Tenant's full
and complete release and waiver, notwithstanding the discovery or existence of any such additional claims,
RIDER NO. 4 1201 DOVE STREET
-2- Lawson V. Sealey Chiropractic
facts, or legal theories under applicable laws or regulations or otherwise relating to the Premises or the
termination of Tenant's leasehold interest and later move from the Premises. Tenant acknowledges and
agrees that its waiver and release is an essential and material term to the Lease and that without it, Landlord
would not have consented to the Amendment. Tenant understands and acknowledges the significance and
consequences of these provisions under the Amendment.
(f) Tenant agrees, warrants and represents that it has carefully read the contents of
the Amendment and that, in executing the Amendment, Tenant does so with full knowledge of any right
which it may have, that it has received independent legal advice from its attorneys, or in the alternative,
knowingly has determined not to seek legal advice with respect to the matters set forth herein, and that
Tenant has freely signed this Amendment without relying on any agreement, promise, statement or
representation by or on behalf of any person or entity, including any and all Indemnitees, except as
specifically set forth in the Amendment.
(g) The statements, representations and recitals contained in the Lease are to be
considered contractual in nature and not merely recitations of fact. The Lease, the advisements herein, and
the above release and waiver shall be binding upon Tenant and its heirs, agents, successors, legal
representatives and assigns.
3. RELOCATION LAW DEFINITION. "Relocation Law" as used herein shall mean
applicable federal, state, and local laws and regulations, including without limitation (i) the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of 1970 ("URA"), 42 U.S.C. 4601-4655,
and the implementing regulations at 49 CFR Part 24, (ii) the California Relocation Assistance Act,
Government Code Section 7260, et seq. and the implementing regulations at Title 25, Section 6000, et
seq. of the California Code of Regulations, and (iii) any other applicable federal, state or local enactment,
regulation or practice providing for relocation assistance, benefits, or compensation for moving and for
property interests (including without limitation furnishings, fixtures and equipment, goodwill, and moving
expenses).
4. LANDLORD'S RIGHT TO REASSIGN DISTINGUISHED. This waiver of Relocation Law
assistance and benefits is separate from and unrelated to Section 22 (Relocation) of the Lease, which
pertains to Landlord's right to reassign Tenant to an alternate space within the Building or Project during
the term of the Lease.
RIDER NO. 4 1201 DOVE STREET
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OFFICE LEASE
This Office Lease (this "Lease"), dated as of the date set forth in Section 1.1, is made by and
between BRE/OC PROPERTY HOLDINGS L.L.C., a Delaware limited liability company
("Landlord"), and LAWSON V. SEALEY CHIROPRACTIC PROFESSIONAL CORPORATION,
a California corporation ("Tenant"). The following exhibits are incorporated herein and made a part
hereof. Exhibit A (Outline of Premises); Exhibit B (Work Letter); Exhibit C (Form of Confirmation
Letter); Exhibit D (Rules and Regulations); Exhibit E (Judicial Reference); Exhibit F (Additional
Provisions); Exhibit G (Asbestos Notification); and Exhibit H (Form of Guaranty of Lease).
1 BASIC LEASE INFORMATION.
1.1 Date: 4/l , 201
1.2 Premises.
1.2.1 "Building": 1201 Dove Street, Newport Beach, California 92660,
commonly known as 1201 Dove.
1.2.2 "Premises": Subject to Section 2.1.1, 1,417 rentable square feet of space
located on the fourth floor of the Building and commonly
known as Suite 480, the outline and location of which is set
forth in Exhibit A.
1.2.3 "Property": The Building, the parcel(s) of land upon which it is located,
and, at Landlord's discretion, any parking facilities and
other improvements serving the Building and the parcel(s)
of land upon which such parking facilities and other
improvements are located.
1.2.4 "Project": The Property or, at Landlord's discretion, any project
containing the Property and any other land, buildings or
other improvements.
1.3 Term
1.3.1 Term: The term of this Lease (the "Term") shall begin on the
Commencement Date and expire on the Expiration Date (or
any earlier date on which this Lease is terminated as
provided herein).
1.3.2 "Commencement The earlier of (i) the first date on which Tenant conducts
Date": business in the Premises, or (ii) the date on which the
Tenant Improvement Work (defined in Exhibit B) is
Substantially Complete (defined in Exhibit B , which is
anticipated to be December 15, 2017.
1.3.3 "Expiration The last day of the seventy-sixth (76) full calendar month
Date": beginning on or after the Commencement Date.
1.4 "Base Rent":
Annual Base Rent
Monthly Base Monthly
Period During Per Rentable
Rent Per Rentable Installment
Term Square Foot
Square Foot of Base Rent
(rounded to the
(rounded to the
nearest 100th of a
nearest 100th of a
dollar)
dollar)
Commencement $34.20 $2.85 $4,038.45
Date through last
day of 12' full
calendar month of
Term
13'h through 24'h $35.40 $2.95 $4,180.15
full calendar
months of Term
25'h through 361 $36.64 $3.05 $4,321.85
full calendar
months of Term
37th through 48th $37.92 $3.16 $4,477.72
full calendar
months of Term
49'h through 60'h $39.25 $3.27 $4,633.59
full calendar
months of Term
6 1 " through 72-d $40.62 $3.39 $4,803.63
full calendar
months of Term
73rd full calendar $42.04 $3.50 $4,959.50
month of Term
through Expiration
Date
Notwithstanding the foregoing, Base Rent shall be abated, in the amount of (i) $4,321.85 for the
251 full calendar month of the Term, (ii) $4,477.72 for the 37' full calendar month of the Term,
(iii) $4,633.59 for the 491 full calendar month of the Term, and (iv) $4,803.63 for the 61' full
calendar month of the Term; provided, however, that if a Default (defined in Section 19.1)
exists when any such abatement would otherwise apply, such abatement shall be deferred until
the date, if any, on which such Default is cured.
1.5 "Base Year" for
Expenses: Calendar year 2018.
"Base Year" for Taxes:
Calendar year 2018.
1.6 "Tenant's Share": 1.7241% (based upon a total of 82,190 rentable square feet in
the Building), subject to Section 2.1.1.
Notwithstanding any contrary provision hereof, Tenant shall
not be required to pay Tenant's Share of any Expense Excess
(defined in Section 4_1) or Tax Excess (defined in Section 4.1
with respect to any period occurring before the first
anniversary of the Commencement Date.
1.7 "Permitted Use": General office and chiropractic use consistent with a first-class
office building.
1.8. "Security Deposit": $14,878.50, as more particularly described in Section 21.
Prepaid Base Rent: $4,038.45, as more particularly described in Section 3.
2
1.9 Parking: The Unreserved Number (defined below) of unreserved
parking spaces, at the rate of (i) $0.00 per space per month
during the first thirty-six (36) months of the initial Term,
(ii) $25.00 per space per month during the balance of the
initial Term, provided Landlord implements parking controls
and access gates, and (iii) Landlord's prevailing rate during
any extension or renewal Term.
The Reserved Number (defined below) of reserved parking
spaces, at the rate of (i) $100.00 per space per month during
the initial Term, and (ii) Landlord's prevailing rate during any
extension or renewal Term.
As used herein, "Unreserved Number" means five (5) and
"Reserved Number" means zero (0); provided, however, that
Tenant, upon 30 days' notice to Landlord from time to time,
may (a) change the Unreserved Number to any whole number
from zero (0) to five (5), and/or (b) change the Reserved
Number to any whole number from zero (0) to one (1);
provided further, however, that the sum of the Unreserved
Number plus the Reserved Number shall be equal to five (5).
Visitor and guest parking shall be available within designated
short-term visitor parking areas of the surface parking lot
adjacent to the Building (i) at the rate of $0.00 per space during
the first thirty-six (36) months of the initial Term, and (ii)
thereafter, provided Landlord implements parking controls and
access gates, at Landlord's then prevailing validation rates.
Notwithstanding the foregoing and in the event visitor parking
charges are implemented, Landlord shall provide Tenant with
seventy-five (75) hours per month of free visitor validations on a
non -cumulative basis.
1.10 Address of Tenant: Before the Commencement Date:
1901 Newport Boulevard, Suite 185
Costa Mesa, CA 92626
From and after the Commencement Date: the Premises.
1.11 Address of Landlord: BRE/OC PROPERTY HOLDINGS L.L.C.
c/o Equity Office
970 W. 190th Street, Suite 110
Torrance, CA 90502
Attn: Regional Finance Group - MLA
with copies to:
BRE/OC PROPERTY HOLDINGS L.L.C.
c/o Equity Office
3100 Bristol Street, Suite 200
Costa Mesa, CA 92626
Attn: Managing Counsel
and
BRE/OC PROPERTY HOLDINGS L.L.C.
c/o Equity Office
222 S. Riverside Plaza, Suite 2000
Chicago, IL, 60606-6115
Attn: Lease Administration
1.12 Broker(s): CBRE, Inc., a Delaware corporation ("Tenant's Broker"),
representing Tenant, and ORION Property Partners, Inc., a
California corporation ("Landlord's Broker"), representing
Landlord.
1.13 Building HVAC Hours `Building HVAC Hours" means 8:00 a.m. to 6:00 p.m.,
and Holidays: Monday through Friday and 9:00 a.m. to 1:00 p.m. on
Saturday, excluding the day of observation of New Year's
Day, Presidents Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and, at
Landlord's discretion, any other locally or nationally
recognized holiday that is observed by other Comparable
Buildings (defined in Section 25.10) (collectively,
"Holidays").
1.14 "Transfer Radius": None.
1.15 "Tenant Defined in Exhibit B, if any.
Improvements":
1.16 "Guarantor": Lawson V. Sealey, an individual. Concurrently with Tenant's
execution and delivery hereof, Tenant shall cause Guarantor to
execute and deliver a guaranty in favor of Landlord in the
form of Exhibit H.
2 PREMISES AND COMMON AREAS.
2.1 The Premises.
2.1.1 Subject to the terms hereof, Landlord hereby leases the Premises to Tenant and
Tenant hereby leases the Premises from Landlord. Landlord and Tenant acknowledge that the rentable
square footage of the Premises is as set forth in Section 1.2.2 and the rentable square footage of the
Building is as set forth in Section 1.6; provided, however, that Landlord may from time to time re -
measure the Premises and/or the Building in accordance with any generally accepted measurement
standards selected by Landlord and adjust Tenant's Share based on such re -measurement; provided
further, however, that any such re -measurement shall not affect the amount of Base Rent payable for, or
the amount of any tenant allowance applicable to, the initial Term. At any time Landlord may deliver to
Tenant a notice substantially in the form of Exhibit C, as a confirmation of the information set forth
therein. Tenant shall execute and return (or, by notice to Landlord, reasonably object to) such notice
within five (5) days after receiving it, and if Tenant fails to do so, Tenant shall be deemed to have
executed and returned it without exception.
2.1.2 Except as expressly provided herein, the Premises are accepted by Tenant in their
configuration and condition existing on the date hereof (or in such other configuration and condition as
any existing tenant of the Premises may cause to exist in accordance with its lease), without any
obligation of Landlord to perform or pay for any alterations to the Premises, and without any
representation or warranty regarding the configuration or condition of the Premises, the Building or the
Project or their suitability for Tenant's business.
2.2 Common Areas. Tenant may use, in common with Landlord and other parties and subject to
the Rules and Regulations (defined in Exhibit D), any portions of the Property that are designated from
time to time by Landlord for such use (the "Common Areas").
3 RENT. Tenant shall pay all Base Rent and Additional Rent (defined below) (collectively, "Rent")
to Landlord or Landlord's agent, without prior notice or demand or any setoff or deduction, at the place
Landlord may designate from time to time, in money of the United States of America that, at the time of
payment, is legal tender for the payment of all obligations. As used herein, "Additional Rent" means all
amounts, other than Base Rent, that Tenant is required to pay Landlord hereunder. Monthly payments of
Base Rent and monthly payments of Additional Rent for Expenses (defined in Section 4.22), Taxes
(defined in Section 4.2.3) and parking (collectively, "Monthly Rent") shall be paid in advance on or
before the first day of each calendar month during the Term; provided, however, that the installment of
Base Rent for the first full calendar month for which Base Rent is payable hereunder shall be paid upon
Tenant's execution and delivery hereof. Except as otherwise provided herein, all other items of
Additional Rent shall be paid within 30 days after Landlord's request for payment. Rent for any partial
calendar month shall be prorated based on the actual number of days in such month. Without limiting
Landlord's other rights or remedies, (a) if any installment of Rent is not received by Landlord or its
designee within five (5) business days after its due date, Tenant shall pay Landlord a late charge equal to
5% of the overdue amount; and (b) any Rent that is not paid within 10 days after its due date shall bear
interest, from its due date until paid, at the lesser of 18% per annum or the highest rate permitted by Law
(defined in Section 5). Tenant's covenant to pay Rent is independent of every other covenant herein.
4
4 EXPENSES AND TAXES.
4.1 General Terms. In addition to Base Rent, Tenant shall pay, in accordance with Section 4.4,
for each Expense Year (defined in Section 4.2.1), an amount equal to the sum of (a) Tenant's Share of any
amount (the "Expense Excess") by which Expenses for such Expense Year exceed Expenses for the Base
Year, plus (b) Tenant's Share of any amount (the "Tax Excess") by which Taxes for such Expense Year
exceed Taxes for the Base Year. No decrease in Expenses or Taxes for any Expense Year below the
corresponding amount for the Base Year shall entitle Tenant to any decrease in Base Rent or any credit
against amounts due hereunder. Tenant's Share of the Expense Excess and Tenant's Share of the Tax
Excess for any partial Expense Year shall be prorated based on the number of days in such Expense Year.
4.2 Definitions. As used herein, the following terms have the following meanings:
4.2.1 "Expense Year" means each calendar year (other than the Base Year and any
preceding calendar year) in which any portion of the Term occurs.
4.2.2 "Expenses" means all expenses, costs and amounts that Landlord pays or accrues
during the Base Year or any Expense Year because of or in connection with the ownership, management,
maintenance, security, repair, replacement, restoration or operation of the Property. Landlord shall act in
a reasonable manner in incurring Expenses. Expenses shall include (i) the cost of supplying all utilities,
the cost of operating, repairing, maintaining and renovating the utility, telephone, mechanical, sanitary,
storm -drainage, and elevator systems, and the cost of maintenance and service contracts in connection
therewith; (ii) the cost of licenses, certificates, permits and inspections, the cost of contesting any Laws
that may affect Expenses, and the costs of complying with any governmentally -mandated transportation -
management or similar program; (iii) the cost of all insurance premiums and deductibles; (iv) the cost of
landscaping and relamping; (v) the cost of parking -area operation, repair, restoration, and maintenance;
(vi) a management fee in the amount (which is hereby acknowledged to be reasonable) of 3% of gross
annual receipts from the Building (excluding the management fee), together with other fees and costs,
including consulting fees, legal fees and accounting fees, of all contractors and consultants in connection
with the management, operation, maintenance and repair of the Property; (vii) the fair rental value of any
management office space; (viii) wages, salaries and other compensation, expenses and benefits, including
taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Property,
and costs of training, uniforms, and employee enrichment for such persons; (ix) the costs of operation,
repair, maintenance and replacement of all systems and equipment (and components thereof) of the
Property; (x) the cost of janitorial, alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in Common Areas, maintenance and replacement of curbs and
walkways, repair to roofs and re -roofing; (xi) rental or acquisition costs of supplies, tools, equipment,
materials and personal property used in the maintenance, operation and repair of the Property; (xii) the
cost of capital improvements or any other items that are (A) intended to reduce current or future
Expenses, enhance the safety or security of the Property or its occupants, or enhance the environmental
sustainability of the Property's operations, (B) replacements or modifications of the nonstructural portions
of the Base Building (defined in Section 5 or Common Areas that are required to keep the Base Building
or Common Areas in good condition, or (C) required under any Law; (xiii) the cost of tenant -relation
programs reasonably established by Landlord; and (xiv) payments under any existing or future reciprocal
easement agreement, transportation management agreement, cost -sharing agreement or other covenant,
condition, restriction or similar instrument affecting the Property.
Notwithstanding the foregoing, Expenses shall not include (a) capital expenditures not described
in clauses (xi) or (xii) above (in addition, any capital expenditure shall be included in Expenses only if
paid or accrued after the Base Year and shall be amortized (including actual or imputed interest on the
amortized cost) over such period of time as Landlord shall reasonably determine); (b) depreciation;
(c) principal payments of mortgage or other non -operating debts of Landlord; (d) costs of repairs to the
extent Landlord is reimbursed by insurance or condemnation proceeds; (e) except as provided in
clause (xiii) above, costs of leasing space in the Building, including brokerage commissions, lease
concessions, rental abatements and construction allowances granted to specific tenants; (f) costs of
selling, financing or refinancing the Building; (g) fines, penalties or interest resulting from late payment
of Taxes or Expenses; (h) organizational expenses of creating or operating the entity that constitutes
Landlord; or (i) damages paid to Tenant hereunder or to other tenants of the Building under their
respective leases.
If, during any portion of the Base Year or any Expense Year, the Building is not 95% occupied
(or a service provided by Landlord to Tenant is not provided by Landlord to a tenant that provides such
service itself, or any tenant of the Building is entitled to free rent, rent abatement or the like), Expenses
for such year shall be determined as if the Building had been 95% occupied (and all services provided by
Landlord to Tenant had been provided by Landlord to all tenants, and no tenant of the Building had been
entitled to free rent, rent abatement or the like) during such portion of such year. Notwithstanding any
contrary provision hereof, Expenses for the Base Year shall exclude (a) any market -wide cost increases
resulting from extraordinary circumstances, including Force Majeure (defined in Section 25.2), boycotts,
strikes, conservation surcharges, embargoes or shortages, and (b) at Landlord's option, the cost of any
repair or replacement that Landlord reasonably expects will not recur on an annual or more frequent basis.
4.2.3 "Taxes" means all federal, state, county or local governmental or municipal taxes,
fees, charges, assessments, levies, licenses or other impositions, whether general, special, ordinary or
extraordinary, that are paid or accrued during the Base Year or any Expense Year (without regard to any
different fiscal year used by such governmental or municipal authority) because of or in connection with
the ownership, leasing or operation of the Property. Taxes shall include (a) real estate taxes; (b) general
and special assessments; (c) transit taxes; (d) leasehold taxes; (e) personal property taxes imposed upon
the fixtures, machinery, equipment, apparatus, systems, appurtenances, furniture and other personal
property used in connection with the Property; (f) any tax on the rent, right to rent or other income from
any portion of the Property or as against the business of leasing any portion of the Property; (g) any
assessment, tax, fee, levy or charge imposed by any governmental agency, or by any non -governmental
entity pursuant to any private cost -sharing agreement, in order to fund the provision or enhancement of
any fire -protection, street-, sidewalk- or road -maintenance, refuse -removal or other service that is (or,
before the enactment of Proposition 13, was) normally provided by governmental agencies to property
owners or occupants without charge (other than through real property taxes); and (h) payments in lieu of
taxes under any tax increment financing agreement, abatement agreement, agreement to construct
improvements, or other agreement with any governmental body or agency or taxing authority. Any costs
and expenses (including reasonable attorneys' and consultants' fees) incurred in attempting to protest,
reduce or minimize Taxes shall be included in Taxes for the year in which they are incurred.
Notwithstanding any contrary provision hereof, Taxes shall be determined without regard to any "green
building" credit and shall exclude (i) all excess profits taxes, franchise taxes, gift taxes, capital stock
taxes, inheritance and succession taxes, transfer taxes, estate taxes, federal and state income taxes, and
other taxes to the extent (x) applicable to Landlord's general or net income (as opposed to rents, receipts
or income attributable to operations at the Property), or (y) measured solely by the square footage, rent,
fees, services, tenant allowances or similar amounts, rights or obligations described or provided in or
under any particular lease, license or similar agreement or transaction at the Building; (ii) any Expenses,
and (iii) any items required to be paid or reimbursed by Tenant under Section 4.5.
4.3 Allocation. Landlord, in its reasonable discretion, may equitably allocate Expenses among
office, retail or other portions or occupants of the Property. If Landlord incurs Expenses or Taxes for the
Property together with another property, Landlord, in its reasonable discretion, shall equitably allocate
such shared amounts between the Property and such other property.
4.4 Calculation and Payment of Expense Excess and Tax Excess.
4.4.1 Statement of Actual Expenses and Taxes; Payment by Tenant. Landlord shall
give to Tenant, after the end of each Expense Year, a statement (the "Statement") setting forth the actual
Expenses, Taxes, Expense Excess and Tax Excess for such Expense Year. If the amount paid by Tenant
for such Expense Year pursuant to Section 4.4.2 is less or more than the sum of Tenant's Share of the
actual Expense Excess plus Tenant's Share of the actual Tax Excess (as such amounts are set forth in such
Statement), Tenant shall pay Landlord the amount of such underpayment, or receive a credit in the
amount of such overpayment, with or against the Rent then or next due hereunder; provided, however,
that if this Lease has expired or terminated and Tenant has vacated the Premises, Tenant shall pay
Landlord the amount of such underpayment, or Landlord shall pay Tenant the amount of such
overpayment (less any Rent due), within 30 days after delivery of such Statement. Any failure of
Landlord to timely deliver the Statement for any Expense Year shall not diminish either party's rights
under this Section 4.
4.4.2 Statement of Estimated Expenses and Taxes. Landlord shall give to Tenant, for
each Expense Year, a statement (the "Estimate Statement") setting forth Landlord's reasonable
estimates of the Expenses, Taxes, Expense Excess (the "Estimated Expense Excess") and Tax Excess
(the "Estimated Tax Excess") for such Expense Year. Upon receiving an Estimate Statement, Tenant
shall pay, with its next installment of Base Rent, an amount equal to the excess of (a) the amount obtained
by multiplying (i) the sum of Tenant's Share of the Estimated Expense Excess plus Tenant's Share of the
Estimated Tax Excess (as such amounts are set forth in such Estimate Statement), by (ii) a fraction, the
numerator of which is the number of months that have elapsed in the applicable Expense Year (including
the month of such payment) and the denominator of which is 12, over (b) any amount previously paid by
Tenant for such Expense Year pursuant to this Section 4.4.2. Until Landlord delivers a new Estimate
Statement (which Landlord may do at any time), Tenant shall pay monthly, with the monthly Base Rent
installments, an amount equal to one -twelfth (1/12) of the sum of Tenant's Share of the Estimated
Expense Excess plus Tenant's Share of the Estimated Tax Excess, as such amounts are set forth in the
previous Estimate Statement. Any failure of Landlord to timely deliver any Estimate Statement shall not
diminish Landlord's rights to receive payments and revise any previous Estimate Statement under this
Section 4.
4.4.3 Retroactive Adjustment of Taxes. Notwithstanding any contrary provision hereof,
if, after Landlord's delivery of any Statement, an increase or decrease in Taxes occurs for the applicable
Expense Year or for the Base Year (whether by reason of reassessment, error, or otherwise), Taxes for
such Expense Year or the Base Year, as the case may be, and the Tax Excess for such Expense Year shall
be retroactively adjusted. If, as a result of such adjustment, it is determined that Tenant has under- or
overpaid Tenant's Share of such Tax Excess, Tenant shall pay Landlord the amount of such
underpayment, or receive a credit in the amount of such overpayment, with or against the Rent then or
next due hereunder; provided, however, that if this Lease has expired or terminated and Tenant has
vacated the Premises, Tenant shall pay Landlord the amount of such underpayment, or Landlord shall pay
Tenant the amount of such overpayment (less any Rent due), within 30 days after such adjustment is
made.
4.5 Charges for Which Tenant Is Directly Responsible. Notwithstanding any contrary
provision hereof, Tenant, promptly upon demand, shall pay (or if paid by Landlord, reimburse Landlord
for) each of the following to the extent levied against Landlord or Landlord's property: (a) any tax based
upon or measured by (i) the cost or value of Tenant's trade fixtures, equipment, furniture or other
personal property, or (ii) the cost or value of the Leasehold Improvements (defined in Section 7.1) to the
extent such cost or value exceeds that of a Building -standard build -out, as determined by Landlord;
(b) any rent tax, sales tax, service tax, transfer tax, value added tax, use tax, business tax, gross income
tax, gross receipts tax, or other tax, assessment, fee, levy or charge measured solely by the square footage,
Rent, services, tenant allowances or similar amounts, rights or obligations described or provided in or
under this Lease; (c) any tax assessed upon the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of any portion of the Property; and (d) any tax assessed on
this transaction or on any document to which Tenant is a party that creates an interest or estate in the
Premises.
4.6 Books and Records. Within 60 days after receiving any Statement (the "Review Notice
Period"), Tenant may give Landlord notice ("Review Notice") stating that Tenant elects to review
Landlord's calculation of the Expense Excess and/or Tax Excess for the Expense Year to which such
Statement applies and identifying with reasonable specificity the records of Landlord reasonably relating
to such matters that Tenant desires to review. Within a reasonable time after receiving a timely Review
Notice (and, at Landlord's option, an executed confidentiality agreement as described below), Landlord
shall deliver to Tenant, or make available for inspection at a location reasonably designated by Landlord,
copies of such records. Within 60 days after such records are made available to Tenant (the "Objection
Period"), Tenant may deliver to Landlord notice (an "Objection Notice") stating with reasonable
specificity any objections to the Statement, in which event Landlord and Tenant shall work together in
good faith to resolve Tenant's objections. Tenant may not deliver more than one Review Notice or more
than one Objection Notice with respect to any Statement. If Tenant fails to give Landlord a Review
Notice before the expiration of the Review Notice Period or fails to give Landlord an Objection Notice
before the expiration of the Objection Period, Tenant shall be deemed to have approved the Statement.
Notwithstanding any contrary provision hereof, Landlord shall not be required to deliver or make
available to Tenant records relating to the Base Year, and Tenant may not object to Expenses or Taxes for
the Base Year, other than in connection with the first review for an Expense Year performed by Tenant
pursuant to this Section 4.6. If Tenant retains an agent to review Landlord's records, the agent must be
with a CPA firm licensed to do business in the State of California and its fees shall not be contingent, in
whole or in part, upon the outcome of the review. Tenant shall be responsible for all costs of such review.
The records and any related information obtained from Landlord shall be treated as confidential, and as
applicable only to the Premises, by Tenant, its auditors, consultants, and any other parties reviewing the
same on behalf of Tenant (collectively, "Tenant's Auditors"). Before making any records available for
review, Landlord may require Tenant and Tenant's Auditors to execute a reasonable confidentiality
agreement, in which event Tenant shall cause the same to be executed and delivered to Landlord within
30 days after receiving it from Landlord, and if Tenant fails to do so, the Objection Period shall be
reduced by one day for each day by which such execution and delivery follows the expiration of such 30-
day period. Notwithstanding any contrary provision hereof, Tenant may not examine Landlord's records
or dispute any Statement if any Rent remains unpaid past its due date. If, for any Expense Year, Landlord
and Tenant determine that the sum of Tenant's Share of the actual Expense Excess plus Tenant's Share of
the actual Tax Excess is less or more than the amount reported, Tenant shall receive a credit in the amount
of its overpayment, or pay Landlord the amount of its underpayment, against or with the Rent next due
hereunder; provided, however, that if this Lease has expired or terminated and Tenant has vacated the
Premises, Landlord shall pay Tenant the amount of its overpayment (less any Rent due), or Tenant shall
pay Landlord the amount of its underpayment, within 30 days after such determination.
5 USE; COMPLIANCE WITH LAWS. Tenant shall not (a) use the Premises for any purpose other
than the Permitted Use, or (b) do anything in or about the Premises that violates any of the Rules and
Regulations, damages the reputation of the Project, interferes with, injures or annoys other occupants of
the Project, or constitutes a nuisance. Subject to Exhibit B, Tenant, at its expense, shall comply with all
Laws relating to (i) the operation of its business at the Project, (ii) the use, condition, configuration or
occupancy of the Premises, or (iii) the Building systems located in or exclusively serving the Premises.
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. Subject to Exhibit B, if a change to any Common Area, the
Building structure, or any Building system located outside of and not exclusively serving the Premises
becomes required under Law as a result of any Tenant -Insured Improvement (defined in Section 10.2.2)
or any use of the Premises other than general office use, Tenant, upon demand, shall (x) at Landlord's
option, either make such change at Tenant's cost or pay Landlord the cost of making such change, and (y)
pay Landlord a coordination fee equal to 10% of the cost of such change. As used herein, "Law" means
any existing or future law, ordinance, regulation or requirement of any governmental authority having
jurisdiction over the Project or the parties. As used herein, "Supplemental System" means any Unit
(defined in Section 25.5), supplemental fire -suppression system, kitchen (including any hot water heater,
dishwasher, garbage disposal, insta-hot dispenser, or plumbing), shower or similar facility, or any other
system that would not customarily be considered part of the base building of a first-class multi -tenant
office building. As used herein, "Base Building System" means any mechanical (including HVAC),
electrical, plumbing or fire/life-safety system serving the Building, other than a Supplemental System. As
used herein, "Base Building" means the structural portions of the Building, together with the Base
Building Systems.
SERVICES.
6.1 Standard Services. Landlord shall provide the following services on all days (unless
otherwise stated below): (a) subject to limitations imposed by Law, customary heating, ventilation and
air conditioning ("HVAC") in season during Building HVAC Hours, stubbed to the Premises;
(b) electricity supplied by the applicable public utility, stubbed to the Premises; (c) water supplied by the
applicable public utility (i) for use in lavatories and any drinking facilities located in Common Areas
within the Building, and (ii) stubbed to the Building core for use in any plumbing fixtures located in the
Premises; (d) janitorial services to the Premises, except on weekends and Holidays; and (e) elevator
service (subject to scheduling by Landlord, and payment of Landlord's standard usage fee, for any freight
service).
6.2 Above -Standard Use. Landlord shall provide HVAC service outside Building HVAC
Hours if Tenant gives Landlord such prior notice and pays Landlord such hourly cost per zone as
Landlord may require. Tenant shall not, without Landlord's prior consent, use equipment that may affect
the temperature maintained by the air conditioning system or consume above -Building -standard amounts
of any water furnished for the Premises by Landlord pursuant to Section 6.1. If Tenant's consumption of
electricity or water exceeds the rate Landlord reasonably deems to be standard for the Building, Tenant
shall pay Landlord, upon billing, the cost of such excess consumption, including any costs of installing,
operating and maintaining any equipment that is installed in order to supply or measure such excess
electricity or water. The connected electrical load of Tenant's incidental -use equipment shall not exceed
the Building -standard electrical design load, and Tenant's electrical usage shall not exceed the capacity of
the feeders to the Project or the risers or wiring installation.
6.3 Interruption. Subject to Section 11, any failure to furnish, delay in furnishing, or diminution
in the quality or quantity of any service resulting from any application of Law, failure of equipment,
performance of maintenance, repairs, improvements or alterations, utility interruption, or event of Force
Majeure (each, a "Service Interruption") shall not render Landlord liable to Tenant, constitute a
constructive eviction, or excuse Tenant from any obligation hereunder. Notwithstanding the foregoing, if
all or a material portion of the Premises is made untenantable or inaccessible for more than five (5)
consecutive business days after notice from Tenant to Landlord by a Service Interruption that (a) does not
result from a Casualty (defined in Sect-ion-1 I , a Taking (defined in Section 13) or an Act of Tenant
(defined in Section 10.0, and (b) can be corrected through Landlord's reasonable efforts, then, as
Tenant's sole remedy, Monthly Rent shall abate for the period beginning on the day immediately
following such 5-business-day period and ending on the day such Service Interruption ends, but only in
proportion to the percentage of the rentable square footage of the Premises made untenantable or
inaccessible (and if Landlord cannot reasonably correct such Service Interruption through reasonable
efforts, then only to the extent of such rent loss insurance proceeds that are fairly allocable to such
abatement).
7 REPAIRS AND ALTERATIONS.
7.1 Repairs. Subject to Section 11, Tenant, at its expense, shall perform all maintenance and
repairs (including replacements) to the Premises, and keep the Premises in as good condition and repair as
existed when Tenant took possession and as thereafter improved, except for reasonable wear and tear and
repairs that are Landlord's express responsibility hereunder. Tenant's maintenance and repair obligations
shall include (a) all leasehold improvements in the Premises, including any Tenant Improvements, any
Alterations (defined in Section 7.2), and any leasehold improvements installed pursuant to any prior lease
(the "Leasehold Improvements"), but excluding the Base Building; (b) any Supplemental Systems
serving the Premises, whether located inside or outside of the Premises; and (c) all Lines (defined in
Section 23) and trade fixtures. Notwithstanding the foregoing, if a Default (defined in Section 19.1) or an
emergency exists, Landlord may, at its option, perform such maintenance and repairs on Tenant's behalf,
in which case Tenant shall pay Landlord, upon demand, the cost of such work plus a coordination fee
equal to 10% of such cost. Landlord shall perform all maintenance and repairs to (i) the roof and exterior
walls and windows of the Building, (ii) the Base Building, and (iii) the Common Areas.
7.2 Alterations. Tenant may not make any improvement, alteration, addition or change to the
Premises or to any mechanical, plumbing or HVAC facility or other system serving the Premises (an
"Alteration") without Landlord's prior consent, which consent shall be requested by Tenant not less than
30 days before commencement of work and shall not be unreasonably withheld, conditioned or delayed
by Landlord. Notwithstanding the foregoing, Landlord's prior consent shall not be required for any
Alteration that is decorative only (e.g., carpet installation or painting) and not visible from outside the
Premises, provided that Landlord receives 10 business days' prior notice. For any Alteration, (a) Tenant,
before beginning work, shall deliver to Landlord, and obtain Landlord's approval of, plans and
specifications; (b) Landlord, in its discretion, may require Tenant to obtain security for performance
reasonably satisfactory to Landlord; (c) Tenant shall deliver to Landlord "as built" drawings (in CAD
format, if requested by Landlord), completion affidavits, full and final lien waivers, and all governmental
approvals; and (d) Tenant shall pay Landlord upon demand (i) Landlord's reasonable out-of-pocket
expenses incurred in reviewing the work, and (ii) a coordination fee equal to 10% of the cost of the work;
provided, however, that this clause (d) shall not apply to any Tenant Improvements.
7.3 Tenant Work. Before beginning any repair or Alteration or any work affecting Lines
(collectively, "Tenant Work"), Tenant shall deliver to Landlord, and obtain Landlord's approval of,
(a) names of contractors, subcontractors, mechanics, laborers and materialmen; (b) evidence of
contractors' and subcontractors' insurance; and (c) any required governmental permits. Tenant shall
perform all Tenant Work (i) in a good and workmanlike manner using materials of a quality reasonably
approved by Landlord; (ii) in compliance with any approved plans and specifications, all Laws, the
National Electric Code, and Landlord's construction rules and regulations; and (iii) in a manner that does
not impair the Base Building. If, as a result of any Tenant Work, Landlord becomes required under Law
to perform any inspection, give any notice, or cause such Tenant Work to be performed in any particular
manner, Tenant shall comply with such requirement and promptly provide Landlord with reasonable
documentation of such compliance. Landlord's approval of Tenant's plans and specifications shall not
relieve Tenant from any obligation under this Section 7.3. In performing any Tenant Work, Tenant shall
not use contractors, services, labor, materials or equipment that, in Landlord's reasonable judgment,
would disturb labor harmony with any workforce or trades engaged in performing other work or services
at the Project.
8 LANDLORD'S PROPERTY. All Leasehold Improvements shall become Landlord's property
upon installation and without compensation to Tenant. Notwithstanding the foregoing, if any Tenant -
Insured Improvements (other than any Unit, which shall be governed by Section 25.5) are not, in
Landlord's reasonable judgment, Building -standard, then before the expiration or earlier termination
hereof, Tenant shall, at Landlord's election, either (a) at Tenant's expense, and except as otherwise
notified by Landlord, remove such Tenant -Insured Improvements, repair any resulting damage to the
Premises or Building, and restore the affected portion of the Premises to its configuration and condition
existing before the installation of such Tenant -Insured Improvements (or, at Landlord's election, to a
Building -standard tenant -improved configuration and condition as determined by Landlord), or (b) pay
Landlord an amount equal to the estimated cost of such work, as reasonably determined by Landlord. If
Tenant fails to timely perform any work required under clause (a) of the preceding sentence, Landlord
may perform such work at Tenant's expense.
9 LIENS. Tenant shall keep the Project free from any lien arising out of any work performed, material
furnished or obligation incurred by or on behalf of Tenant. Tenant shall remove any such lien within
10 business days after notice from Landlord, and if Tenant fails to do so, Landlord, without limiting its
remedies, may pay the amount necessary to cause such removal, whether or not such lien is valid. The
amount so paid, together with reasonable attorneys' fees and expenses, shall be reimbursed by Tenant
upon demand.
10 INDEMNIFICATION; INSURANCE.
10.1 Waiver and Indemnification. Tenant waives all claims against Landlord, its Security
Holders (defined in Section 17), Landlord's managing agent(s), their (direct or indirect) owners, and the
beneficiaries, trustees, officers, directors, employees and agents of each of the foregoing (including
Landlord, the "Landlord Parties') for (i) any damage to person or property (or resulting from the loss of
use thereof), except to the extent such damage is caused by any negligence, willful misconduct or breach
of this Lease of or by any Landlord Party, or (ii) any failure to prevent or control any criminal or
otherwise wrongful conduct by any third party or to apprehend any third party who has engaged in such
conduct. Tenant shall indemnify, defend, protect, and hold the Landlord Parties harmless from any
obligation, loss, claim, action, liability, penalty, damage, cost or expense (including reasonable attorneys'
and consultants' fees and expenses) (each, a "Claim") that is imposed or asserted by any third party and
arises from (a) any cause in, on or about the Premises, or (b) any negligence, willful misconduct or breach
of this Lease of or by Tenant, any party claiming by, through or under Tenant, their (direct or indirect)
owners, or any of their respective beneficiaries, trustees, officers, directors, employees, agents,
contractors, licensees or invitees (each, an "Act of Tenant"), except to the extent such Claim arises from
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any negligence, willful misconduct or breach of this Lease of or by any Landlord Party
10.2 Tenant's Insurance. Tenant shall maintain the following coverages in the following
amounts:
10.2.1 Commercial General Liability Insurance covering claims of bodily injury, personal
injury and property damage arising out of Tenant's operations and contractual liabilities, including
coverage formerly known as broad form, on an occurrence basis, with combined primary and
excess/umbrella limits of at least $2,000,000 each occurrence and $4,000,000 annual aggregate.
10.2.2 Property Insurance covering (i) all office furniture, trade fixtures, office equipment,
free-staading 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, and (ii) any Leasehold Improvements installed
by or for the benefit of Tenant, whether pursuant to this Lease or pursuant to any prior lease or other
agreement to which Tenant was a party ("Tenant -Insured Improvements"). Such insurance shall be
written on a special cause of loss or all risk form for physical loss or damage, for the full replacement cost
value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of insurance, and shall include
coverage for damage or other loss caused by fire or other peril, including vandalism and malicious
mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and
explosion, and providing business interruption coverage for a period of one year.
10.2.3 Workers' Compensation with limits required by statute and Employers' Liability
limits of $1,000,000.
10.3 Form of Policies. The minimum limits of insurance required to be carried by Tenant shall
not limit Tenant's liability. Such insurance shall be issued by an insurance company that has an
A.M. Best rating of not less than ANIII. Tenant's Commercial General Liability Insurance shall
(a) name the Landlord Parties and any other party designated by Landlord ("Additional Insured
Parties") as additional insureds; and (b) be primary insurance as to all claims thereunder and provide that
any insurance carried by Landlord is excess and non-contributing with Tenant's insurance. Landlord
shall be designated as a loss payee with respect to Tenant's Property Insurance on any Tenant -Insured
Improvements. Tenant shall deliver to Landlord, on or before the Commencement Date and at least
15 days before the expiration dates thereof, certificates from Tenant's insurance company on the forms
currently designated "ACORD 25" (Certificate of Liability Insurance) and "ACORD 28" (Evidence of
Commercial Property Insurance) or the equivalent. Attached to the ACORD 25 (or equivalent) there shall
be an endorsement (or an excerpt from the policy) naming the Additional Insured Parties as additional
insureds, and attached to the ACORD 28 (or equivalent) there shall be an endorsement (or an excerpt
from the policy) designating Landlord as a loss payee with respect to Tenant's Property Insurance on any
Tenant -Insured Improvements, and each such endorsement (or policy excerpt) shall be binding on
Tenant's insurance company.
10.4 Subrogation. Each party waives, and shall cause its insurance carrier to waive, any right of
recovery against the other party, any of its (direct or indirect) owners, or any of their respective
beneficiaries, trustees, officers, directors, employees or agents for any loss of or damage to property
which loss or damage is (or, if the insurance required hereunder had been carried, would have been)
covered by the waiving party's property insurance. For purposes of this Section 10.4 only, (a) any
deductible with respect to a parry's insurance shall be deemed covered by, and recoverable by such party
under, valid and collectable policies of insurance, and (b) any contractor retained by Landlord to install,
maintain or monitor a fire or security alarm for the Building shall be deemed an agent of Landlord.
10.5 Additional Insurance Obligations. Tenant shall maintain such increased amounts of the
insurance required to be carried by Tenant under this 'Section 10, and such other types and amounts of
insurance covering the Premises and Tenant's operations therein, as may be reasonably requested by
Landlord, but not in excess of the amounts and types of insurance then being required by landlords of
Comparable Buildings.
11 CASUALTY DAMAGE. With reasonable promptness after discovering any damage to the
Premises (other than trade fixtures), or to any Common Area or portion of the Base Building necessary
for access to or tenantability of the Premises, resulting from any fire or other casualty (a "Casualty"),
Landlord shall notify Tenant of Landlord's reasonable estimate of the time required to substantially
complete repair of such damage (the "Landlord Repairs"). If, according to such estimate, the Landlord
Repairs cannot be substantially completed within 270 days after they are commenced, either party may
terminate this Lease upon 60 days' notice to the other party delivered within 10 days after Landlord's
delivery of such estimate. Within 90 days after discovering any damage to the Project resulting from any
Casualty, Landlord may, whether or not the Premises are affected, terminate this Lease by notifying
Tenant if (i) any Security Holder terminates any ground lease or requires that any insurance proceeds be
used to pay any mortgage debt; (ii) any damage to Landlord's property is not fully covered by Landlord's
insurance policies; (iii) Landlord decides to rebuild the Building or Common Areas so that it or they will
10
be substantially different structurally or architecturally; (iv) the damage occurs during the last 12 months
of the Term; or (v) any owner, other than Landlord, of any damaged portion of the Project does not intend
to repair such damage. If this Lease is not terminated pursuant to this Section 11, Landlord shall
promptly and diligently perform the Landlord Repairs, subject to reasonable delays for insurance
adjustment and other events of Force Majeure. The Landlord Repairs shall restore the Premises (other
than trade fixtures) and any Common Area or portion of the Base Building necessary for access to or
tenantability of the Premises to substantially the same condition that existed when the Casualty occurred,
except for (a) any modifications required by Law or any Security Holder, and (b) any modifications to the
Common Areas that are deemed desirable by Landlord, are consistent with the character of the Project,
and do not materially impair access to or tenantability of the Premises. Notwithstanding Section I0.4,
Tenant shall assign to Landlord (or its designee) all insurance proceeds payable to Tenant under Tenant's
insurance required under Section 10.2 with respect to any Tenant -Insured Improvements, and if the
estimated or actual cost of restoring any Tenant -Insured Improvements exceeds the insurance proceeds
received by Landlord from Tenant's insurance carrier, Tenant shall pay such excess to Landlord within
15 days after Landlord's demand; provided, however, that if this Lease is terminated pursuant to the
foregoing provisions of this Section 11, the total amount that Tenant is required to assign or pay to
Landlord under this sentence shall not exceed the cost of restoring the Tenant -Insured Improvements to a
Building -standard configuration and condition, as reasonably determined by Landlord. No Casualty and
no restoration performed as required hereunder shall render Landlord liable to Tenant, constitute a
constructive eviction, or excuse Tenant from any obligation hereunder; provided, however, that if the
Premises (other than trade fixtures) or any Common Area or portion of the Base Building necessary for
access to or tenantability of the Premises is damaged by a Casualty, then, during any time that, as a result
of such damage, any portion of the Premises is inaccessible or untenantable and is not occupied by
Tenant, Monthly Rent shall be abated in proportion to the rentable square footage of such portion of the
Premises.
12 NONWAIVER. No provision hereof shall be deemed waived by either party unless it is waived by
such party expressly and in writing, and no waiver of any breach of any provision hereof shall be deemed
a waiver of any subsequent breach of such provision or any other provision hereof. Landlord's
acceptance of Rent shall not be deemed a waiver of any preceding breach of any provision hereof, other
than Tenant's failure to pay the particular Rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of such acceptance. No acceptance of payment of an amount less than the
Rent due hereunder shall be deemed a waiver of Landlord's right to receive the full amount of Rent due,
whether or not any endorsement or statement accompanying such payment purports to effect an accord
and satisfaction. No receipt of monies by Landlord from Tenant after the giving of any notice, the
commencement of any suit, the issuance of any final judgment, or the termination hereof shall affect such
notice, suit or judgment, or reinstate or extend the Term or Tenant's right of possession hereunder.
13 CONDEMNATION. If any part of the Premises, Building or Project is taken for any public or
quasi -public use by power of eminent domain or by private purchase in lieu thereof (a "Taking") for
more than 180 consecutive days, Landlord may terminate this Lease. If more than 25% of the rentable
square footage of the Premises, or any Common Area or portion of the Base Building necessary for access
to or tenantability of the Premises, is Taken for more than 180 consecutive days, Tenant may terminate
this Lease. Any such termination shall be effective as of the date possession must be surrendered to the
authority, and the terminating party shall provide termination notice to the other party within 45 days after
receiving written notice of such surrender date. Except as provided above in this Section 13, neither party
may terminate this Lease as a result of a Taking. Tenant shall not assert, and hereby assigns to Landlord,
any claim it may have for compensation because of any Taking; provided, however, that Tenant may file
a separate claim for any Taking of Tenant's personal property or any trade fixtures that Tenant is entitled
to remove upon the expiration hereof, and for moving expenses, so long as such claim does not diminish
the award available to Landlord or any Security Holder and is payable separately to Tenant. If this Lease
is terminated pursuant to this Section 13, all Rent shall be apportioned as of the date of such termination.
If a Taking occurs and this Lease is not so terminated, Monthly Rent shall be abated for the period of such
Taking in proportion to the percentage of the rentable square footage of the Premises, if any, that is
subject to, or rendered inaccessible or untenantable by, such Taking and not occupied by Tenant.
14 ASSIGNMENT AND SUBLETTING.
14.1 Transfers. Tenant shall not, without Landlord's prior consent, assign, mortgage, pledge,
hypothecate, encumber, permit any lien to attach to, or otherwise transfer this Lease or any interest
hereunder, permit any assignment or other transfer hereof or any interest hereunder by operation of law,
enter into any sublease or license agreement, otherwise permit the occupancy or use of any part of the
Premises by any persons other than Tenant and its employees and contractors, or permit a Change of
Control (defined in Section 14.6) to occur (each, a "Transfer"). If Tenant desires Landlord's consent to
any Transfer, Tenant shall provide Landlord with (i) notice of the terms of the proposed Transfer,
including its proposed effective date (the "Contemplated Effective Date"), a description of the portion
of the Premises to be transferred (the "Contemplated Transfer Space"), a calculation of the Transfer
Premium (defined in Section 1431, and a copy of all existing executed and/or proposed documentation
pertaining to the proposed Transfer, and (ii) current financial statements of the proposed transferee (or, in
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the case of a Change of Control, of the proposed new controlling party(ies)) certified by an officer or
owner thereof and any other information reasonably required by Landlord in order to evaluate the
proposed Transfer (collectively, the "Transfer Notice"). Within 30 days after receiving the Transfer
Notice, Landlord shall notify Tenant of (a) its consent to the proposed Transfer, (b) its refusal to consent
to the proposed Transfer, or (c) its exercise of its rights under Section 14.4. Any Transfer made without
Landlord's prior consent shall, at Landlord's option, be void and shall, at Landlord's option, constitute a
Default. Tenant shall pay Landlord a fee of $1,500.00 for Landlord's review of any proposed Transfer,
whether or not Landlord consents to it.
14.2 Landlord's Consent. Subject to Section 14.4, Landlord shall not unreasonably withhold its
consent to any proposed Transfer. Without limiting other reasonable grounds for withholding consent, it
shall be deemed reasonable for Landlord to withhold its consent to a proposed Transfer if:
14.2.1 The proposed transferee is not a party of reasonable financial strength in light of the
responsibilities to be undertaken in connection with the Transfer on the date the Transfer Notice is
received; or
14.2.2 The proposed transferee has a character or reputation or is engaged in a business that
is not consistent with the quality of the Building or the Project; or
14.2.3 The proposed transferee is a governmental entity or a nonprofit organization; or
14.2.4 The proposed transferee or any of its Affiliates, on the date the Transfer Notice is
received, leases or occupies (or, at any time during the 6-month period ending on the date the Transfer
Notice is received, has negotiated with Landlord to lease) space in the Project.
Notwithstanding any contrary provision hereof, (a) if Landlord consents to any Transfer pursuant to
this Section 14.2 but Tenant does not enter into such Transfer within six (6) months thereafter, such
consent shall no longer apply and such Transfer shall not be permitted unless Tenant again obtains
Landlord's consent thereto pursuant and subject to the terms of this Section 14; and (b) if Landlord
withholds its consent in breach of this Section 14.2, Tenant's sole remedies shall be contract damages
(subject to Section 20i or specific performance, and Tenant waives all other remedies, including any right
to terminate this Lease.
14.3 Transfer Premium. If Landlord consents to a Transfer (other than a Change of Control),
Tenant shall pay Landlord an amount equal to 50% of any Transfer Premium (defined below). As used
herein, "Transfer Premium" means (a) in the case of an assignment, any consideration (including
payment for Leasehold Improvements) paid by the assignee for such assignment, and (b) in the case of a
sublease, license or other occupancy agreement, for each month of the term of such agreement, the
amount by which all rent and other consideration paid by the transferee to Tenant pursuant to such
agreement exceeds the Monthly Rent payable by Tenant hereunder with respect to the Contemplated
Transfer Space. Payment of Landlord's share of the Transfer Premium shall be made (x) in the case of an
assignment, within 10 days after Tenant receives the consideration described above, and (y) in the case of
a sublease, license or other occupancy agreement, for each month of the term of such agreement, within
five (5) business days after Tenant receives the rent and other consideration described above.
14.4 Landlord's Rieht to Recapture. Notwithstanding any contrary provision hereof, except in
the case of a Permitted Transfer (defined in Section 14.8), Landlord, by notifying Tenant within 30 days
after receiving the Transfer Notice, may terminate this Lease with respect to the Contemplated Transfer
Space as of the Contemplated Effective Date. If the Contemplated Transfer Space is less than the entire
Premises, then Base Rent, Tenant's Share, and the number of parking spaces to which Tenant is entitled
under Section 1.9 shall be deemed adjusted on the basis of the percentage of the rentable square footage
of the portion of the Premises retained by Tenant. Upon request of either party, the parties shall execute a
written agreement prepared by Landlord memorializing such termination.
14.5 Effect of Consent. If Landlord consents to a Transfer, (i) such consent shall not be deemed a
consent to any further Transfer, (ii) Tenant shall deliver to Landlord, promptly after execution, an
executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord,
and (iii) Tenant shall deliver to Landlord, upon Landlord's request, a complete statement, certified by an
independent CPA or Tenant's chief financial officer, setting forth in detail the computation of any
Transfer Premium. In the case of an assignment, the assignee shall assume in writing, for Landlord's
benefit, all of Tenant's obligations hereunder. No Transfer, with or without Landlord's consent, shall
relieve Tenant or any guarantor hereof from any liability hereunder. Notwithstanding any contrary
provision hereof, Tenant, with or without Landlord's consent, shall not enter into, or permit any party
claiming by, through or under Tenant to enter into, any sublease, license or other occupancy agreement
that provides for payment based in whole or in part on the net income or profit of the subtenant, licensee
or other occupant thereunder.
14.6 Chance of Control. As used herein, "Change of Control" means (a) if Tenant is a closely
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held professional service firm, the withdrawal or change (whether voluntary, involuntary or by operation
of law) of more than 25% of its equity owners within a 12-month period; and (b) in all other cases, any
transaction(s) resulting in the acquisition of a Controlling Interest (defined below) in Tenant by one or
more parties that neither owned, nor are Affiliates (defined below) of one or more parties that owned, a
Controlling Interest in Tenant immediately before such transaction(s). As used herein, "Controlling
Interest" means control over an entity, other than control arising from the ownership of voting securities
listed on a recognized securities exchange. As used herein, "control" means the direct or indirect power
to direct the ordinary management and policies of an entity, whether through the ownership of voting
securities, by contract or otherwise. As used herein, "Affiliate" means, with respect to any parry, a
person or entity that controls, is under common control with, or is controlled by such party.
14.7 Effect of Default. If Tenant is in Default, Landlord is irrevocably authorized, as Tenant's
agent and attorney -in -fact, to direct any transferee under any sublease, license or other occupancy
agreement to make all payments under such agreement directly to Landlord (which Landlord shall apply
towards Tenant's obligations hereunder) until such Default is cured. Such transferee shall rely upon any
good -faith representation by Landlord that Tenant is in Default, whether or not confirmed by Tenant.
14.8 Permitted Transfers. Notwithstanding any contrary provision hereof, if Tenant is not in
Default, Tenant may, without Landlord's consent pursuant to Section 14.1, assign this Lease to (a) an
Affiliate of Tenant (other than pursuant to a merger or consolidation), (b) a successor to Tenant by merger
or consolidation, or (c) a successor to Tenant by purchase of all or substantially all of Tenant's assets (a
"Permitted Transfer"), provided that (i) at least 10 business days before the Transfer, Tenant notifies
Landlord of the Transfer and delivers to Landlord any documents or information reasonably requested by
Landlord relating thereto, including reasonable documentation that the Transfer satisfies the requirements
of this Section 14.8; (ii) in the case of an assignment pursuant to clause (a) or (c) above, the assignee
executes and delivers to Landlord, at least 10 business days before the assignment, a commercially
reasonable instrument pursuant to which the assignee assumes, for Landlord's benefit, all of Tenant's
obligations hereunder; (iii) in the case of an assignment pursuant to clause (b) above, (A) the successor
entity has a net worth (as determined in accordance with GAAP, but excluding intellectual property and
any other intangible assets ("Net Worth")) immediately after the Transfer that is not less than Tenant's
Net Worth immediately before the Transfer, and (B) if Tenant is a closely held professional service firm,
at least 75% of its equity owners existing 12 months before the Transfer are also equity owners of the
successor entity; (iv) the transferee is qualified to conduct business in the State of California; and (v) the
Transfer is made for a good faith operating business purpose and not in order to evade the requirements of
this Section 14.
15 SURRENDER. Upon the expiration or earlier termination hereof, and subject to Sections 8 and 11
and this Section 15, Tenant shall surrender possession of the Premises to Landlord in as good condition
and repair as existed when Tenant took possession and as thereafter improved, except for reasonable wear
and tear and repairs that are Landlord's express responsibility hereunder. Before such expiration or
termination, Tenant, without expense to Landlord, shall (a) remove from the Premises all debris and
rubbish and all furniture, equipment, trade fixtures, Lines, free-standing cabinet work, movable partitions
and other articles of personal property that are owned or placed in the Premises by Tenant or any party
claiming by, through or under Tenant (except for any Lines not required to be removed under Section 23),
and (b) repair all damage to the Premises and Building resulting from such removal. If Tenant fails to
timely perform such removal and repair, Landlord may do so at Tenant's expense (including storage
costs). If Tenant fails to remove such property from the Premises, or from storage, within 30 days after
notice from Landlord, any part of such property shall be deemed, at Landlord's option, either
(x) conveyed to Landlord without compensation, or (y) abandoned.
16 HOLDOVER If Tenant fails to surrender the Premises upon the expiration or earlier termination
hereof, Tenant's tenancy shall be subject to the terms and conditions hereof, provided, however, that such
tenancy shall be a tenancy at sufferance only, for the entire Premises, and Tenant shall pay Monthly Rent
(on a per -month basis without reduction for any partial month) at a rate equal to the Applicable
Percentage (defined below) of the Monthly Rent applicable during the last calendar month of the Term.
As used herein, "Applicable Percentage" means, for any holdover, (a) 150% during the first 30 days of
such holdover, and (b) 200% during the balance of such holdover. Nothing in this Section 16 shall limit
Landlord's rights or remedies or be deemed a consent to any holdover. If Landlord is unable to deliver
possession of the Premises to a new tenant or to perform improvements for a new tenant as a result of
Tenant's holdover, Tenant shall be liable for all resulting damages, including lost profits, incurred by
Landlord.
17 SUBORDINATION; ESTOPPEL CERTIFICATES. This Lease shall be subject and subordinate
to all existing and future ground or underlying leases, mortgages, trust deeds and other encumbrances
against the Building or Project, all renewals, extensions, modifications, consolidations and replacements
thereof (each, a "Security Agreement"), and all advances made upon the security of such mortgages or
trust deeds, unless in each case the holder of such Security Agreement (each, a "Security Holder")
requires in writing that this Lease be superior thereto. Upon any termination or foreclosure (or any
delivery of a deed in lieu of foreclosure) of any Security Agreement, Tenant, upon request, shall attorn,
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without deduction or set-off, to the Security Holder or purchaser or any successor thereto and shall
recognize such party as the lessor hereunder and agree to continue this Lease, without material
modification, as a direct lease between Tenant, as tenant, and such party, as landlord, provided that such
party agrees, subject to the terms of a commercially reasonable non -disturbance agreement, to recognize
Tenant's rights as tenant hereunder and continue this lease as a direct lease between such party, as
landlord, and Tenant, as tenant. Within 10 business days after Landlord's request, Tenant shall execute
such further instruments as Landlord may reasonably deem necessary to evidence the subordination or
superiority of this Lease to any Security Agreement as provided above in this Section 17.1. Tenant
waives any right it may have under Law to terminate or otherwise adversely affect this Lease or Tenant's
obligations hereunder upon a foreclosure. Within 10 business days after Landlord's request, Tenant shall
execute and deliver to Landlord a commercially reasonable estoppel certificate in favor of such parties as
Landlord may reasonably designate, including current and prospective Security Holders and prospective
purchasers.
18 ENTRY BY LANDLORD. At all reasonable times and upon reasonable notice to Tenant, or in an
emergency, Landlord may enter the Premises to (i) inspect the Premises; (ii) show the Premises to
prospective purchasers, current or prospective Security Holders or insurers, or, during the last 12 months
of the Term (or while an uncured Default exists), prospective tenants; (iii) post notices of non -
responsibility; or (iv) perform maintenance, repairs or alterations. At any time and without notice to
Tenant, Landlord may enter the Premises to perform required services; provided, however, that except in
an emergency, Landlord shall provide Tenant with reasonable prior notice (which notice, notwithstanding
Section 25.1, may be delivered by e-mail, fax, telephone or orally and in person) of any entry to perform a
service that is not performed on a monthly or more frequent basis. If reasonably necessary, Landlord may
temporarily close any portion of the Premises to perform maintenance, repairs or alterations. Without
limiting the foregoing, except in an emergency, any unreasonably noisy or otherwise disruptive work
performed by Landlord in the Premises pursuant to this Section 18 shall be performed outside of normal
business hours. In an emergency, Landlord may use any means it deems proper to open doors to and in
the Premises. No entry into or closure of any portion of the Premises pursuant to this Section 18 shall
render Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant from any obligation
hereunder.
19 DEFAULTS; REMEDIES.
19.1 Events of Default. The occurrence of any of the following shall constitute a "Default":
19.1.1 Any failure by Tenant to pay any Rent (or deliver any security deposit, letter of
credit, or similar credit enhancement required hereunder) when due unless such failure is cured within
five (5) business days after notice; or
19.1.2 Except where a specific time period is otherwise set forth for Tenant's cure herein (in
which event Tenant's failure to cure within such time period shall be a Default), and except as otherwise
provided in this Section 19.1, any breach by Tenant of any other provision hereof where such breach
continues for 30 days after notice from Landlord; provided that if such breach cannot reasonably be cured
within such 30-day period, Tenant shall not be in Default as a result of such breach if Tenant diligently
commences such cure within such period, thereafter diligently pursues such cure, and completes such cure
within 60 days after Landlord's notice; or
19.1.3 Abandonment or vacation of all or a substantial portion of the Premises by Tenant; or
19.1.4 Any breach by Tenant of Section 17 or 18 where such breach continues for more than
two (2) business days after notice from Landlord; or
19.1.5 Tenant becomes in breach of Section 25.3(c) or (d).
If Tenant breaches a particular provision hereof (other than a provision requiring payment of
Rent) on three (3) separate occasions during any 12-month period, Tenant's subsequent breach of such
provision shall be, at Landlord's option, an incurable Default. The notice periods provided herein are in
lieu of, and not in addition to, any notice periods provided by Law, and Landlord shall not be required to
give any additional notice in order to be entitled to commence an unlawful detainer proceeding.
19.2 Remedies Upon Default. Upon any Default, Landlord shall have, in addition to any other
remedies available to Landlord at law or in equity (which shall be cumulative and nonexclusive), the
option to pursue any one or more of the following remedies (which shall be cumulative and nonexclusive)
without any notice or demand:
19.2.1 Landlord may terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy it may have for possession or arrearages in Rent, enter upon and take possession of the
Premises and expel or remove Tenant and any other person who may be occupying the Premises or any
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part thereof, without being liable for prosecution or any claim of damages therefor; and Landlord may
recover from Tenant the following:
(a) The worth at the time of award of the 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 rental loss
that Tenant proves 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 Tenant proves
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 hereunder or which in the ordinary
course of things would be likely to result therefrom, including brokerage commissions, advertising
expenses, expenses of remodeling any portion of the Premises for a new tenant (whether for the same or a
different use), and any special concessions made to obtain a new tenant; plus
(e) At Landlord's option, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by Law.
As used in Sections 19.2.1(a) and b), the "worth at the time of award" shall be computed by
allowing interest at a rate per annum equal to the lesser of (i) the annual "Bank Prime Loan" rate cited in
the Federal Reserve Statistical Release Publication G.13(415), published on the first Tuesday of each
calendar month (or such other comparable index as Landlord shall reasonably designate if such rate
ceases to be published) plus two (2) percentage points, or (ii) the highest rate permitted by Law. As used
in Section 19.2.1(c), the "worth at the time of award" shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.
19.2.2 Landlord shall have the remedy described in California Civil Code § 1951.4 (lessor
may continue lease in effect after lessee's breach and abandonment and recover Rent as it becomes due, if
lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord
does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to
time, without terminating this Lease, enforce all of its rights and remedies hereunder, including the right
to recover all Rent as it becomes due.
19.2.3 Landlord shall at all times have the rights and remedies (which shall be cumulative
with each other and cumulative and in addition to those rights and remedies available under
Sections 19.2.1 and 19.2.2, or any Law or other provision hereof), without prior demand or notice except
as required by Law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce
this Lease, or restrain or enjoin a violation or breach of any provision hereof.
19.3 Efforts to Relet. Unless Landlord provides Tenant with express notice to the contrary, no
re-entry, repossession, repair, maintenance, change, alteration, addition, reletting, appointment of a
receiver or other action or omission by Landlord shall (a) be construed as an election by Landlord to
terminate this Lease or Tenant's right to possession, or to accept a surrender of the Premises, or
(b) operate to release Tenant from any of its obligations hereunder. Tenant waives, for Tenant and for all
those claiming by, through or under Tenant, California Civil Code § 3275, California Code of Civil
Procedure § § 1174(c) and 1179, and any existing or future rights to redeem or reinstate, by order or
judgment of any court or by any legal process or writ, this Lease or Tenant's right of occupancy of the
Premises after any termination hereof.
19.4 Landlord Default. Landlord shall not be in default hereunder unless it breaches a provision
hereof and such breach continues for 30 days after notice from Tenant; provided that if such breach
cannot reasonably be cured within such 30-day period, Landlord shall not be in default as a result of such
breach if Landlord diligently commences such cure within such period, thereafter diligently pursues such
cure, and completes such cure within 60 days after Tenant's notice. Before exercising any remedies for a
default by Landlord, Tenant shall give notice and a reasonable time to cure to any Security Holder of
which Tenant has been notified.
20 LANDLORD EXCULPATION. Notwithstanding any contrary provision hereof, (a) the liability of
the Landlord Parties to Tenant shall be limited to an amount equal to the lesser of (i) Landlord's interest
in the Building, or (ii) the equity interest Landlord would have in the Building if the Building were
encumbered by third -party debt in an amount equal to 80% of the value of the Building (as such value is
determined by Landlord); (b) Tenant shall look solely to Landlord's interest in the Building for the
recovery of any judgment or award against any Landlord Party; (c) no Landlord Party shall have any
personal liability for any judgment or deficiency, and Tenant waives and releases such personal liability
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on behalf of itself and all parties claiming by, through or under Tenant; and (d) no Landlord Party shall be
liable for any injury or damage to, or interference with, Tenant's business, including loss of profits, loss
of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, or for any form of
special or consequential damage.
21 SECURITY DEPOSIT. Concurrently with its execution and delivery hereof, Tenant shall deposit
with Landlord the Security Deposit, if any, as security for Tenant's performance of its obligations
hereunder. If Tenant breaches any provision hereof, Landlord may, at its option, without limiting its
remedies and without notice to Tenant, apply all or part of the Security Deposit to cure such breach and
compensate Landlord for any loss or damage caused by such breach, including any damage for which
recovery may be made under California Civil Code § 1951.2. If Landlord so applies any portion of the
Security Deposit, Tenant, within three (3) days after demand therefor, shall restore the Security Deposit to
its original amount. The Security Deposit is not an advance payment of Rent or measure of damages.
Any unapplied portion of the Security Deposit shall be returned to Tenant within 60 days after the latest
to occur of (a) the expiration of the Term, (b) Tenant's surrender of the Premises as required hereunder, or
(c) determination of the final Rent due from Tenant. Landlord shall not be required to keep the Security
Deposit separate from its other accounts. Notwithstanding the foregoing, if no Default occurs on or
before the last day of the 47`s full calendar month of the Term, then (a) the amount of the Security Deposit
shall be reduced to $10,400.78, and (b) any unapplied portion of the Security Deposit exceeding such
reduced amount shall be applied to the payment of Base Rent for the 48' full calendar month of the Term.
22 RELOCATION. Landlord, after giving notice, may move Tenant to other space in the Project
comparable in size and utility to the Premises. In such event, all terms hereof shall apply to the new
space, except that Base Rent and (except to the extent of the percentage, if any, by which the rentable
square footage of the building in which the new space is located is less than the rentable square footage of
the Building) Tenant's Share shall not increase as a result of such relocation. Landlord, at its expense,
shall provide Tenant with tenant improvements in the new space at least equal in quality to those in the
Premises. Landlord shall reimburse Tenant for Tenant's reasonable moving, re -cabling and stationery -
replacement costs. The parties shall execute a written agreement prepared by Landlord memorializing the
relocation.
23 COMMUNICATIONS AND COMPUTER LINES. All Lines installed pursuant to this Lease
shall be (a) installed in accordance with Section 7; and (b) clearly marked with adhesive plastic labels (or
plastic tags attached to such Lines with wire) to show Tenant's name, suite number, and the purpose of
such Lines (i) every six (6) feet outside the Premises (including the electrical room risers and any
Common Areas), and (ii) at their termination points. Landlord may designate specific contractors for
work relating to vertical Lines. Sufficient spare cables and space for additional cables shall be maintained
for other occupants, as reasonably determined by Landlord. Unless otherwise notified by Landlord,
Tenant, at its expense and before the expiration or earlier termination hereof, shall remove all Lines and
repair any resulting damage. As used herein, "Lines" means all communications or computer wires and
cables serving the Premises, whenever and by whomever installed or paid for, including any such wires or
cables installed pursuant to any prior lease.
24 PARKING. Tenant may park in the Building's parking facilities (the "Parking Facility"), in
common with other tenants of the Building, upon the following terms and conditions. Tenant shall not
use more than the number of unreserved and/or reserved parking spaces set forth in Section 1.9. Tenant
shall pay Landlord, in accordance with Section 3, any fees for the parking spaces described in Section 1.9.
Tenant shall pay Landlord any fees, taxes or other charges imposed by any governmental or quasi -
governmental agency in connection with the Parking Facility, to the extent such amounts are directly
allocated to Tenant by Landlord based on the number and type of parking spaces Tenant is entitled to use.
Tenant shall comply with all rules and regulations established by Landlord from time to time for the
orderly operation and use of the Parking Facility, including any sticker or other identification system and
the prohibition of vehicle repair and maintenance activities in the Parking Facility. Landlord may, in its
discretion, allocate and assign parking passes among Tenant and the other tenants in the Building.
Tenant's use of the Parking Facility shall be at Tenant's sole risk, and Landlord shall have no liability for
any personal injury or damage to or theft of any vehicles or other property occurring in the Parking
Facility or otherwise in connection with any use of the Parking Facility by Tenant or its employees or
invitees. Landlord may alter the size, configuration, design, layout or any other aspect of the Parking
Facility, and, in connection therewith, temporarily deny or restrict access to the Parking Facility, in each
case without abatement of Rent or liability to Tenant. Landlord may delegate its responsibilities
hereunder to a parking operator, in which case (i) such parking operator shall have all the rights of control
reserved herein by Landlord, (ii) Tenant shall enter into a commercially reasonable parking agreement
with such parking operator, (iii) Tenant shall pay such parking operator, rather than Landlord, any charge
established hereunder for the parking spaces, and (iv) Landlord shall have no liability for claims arising
through acts or omissions of such parking operator except to the extent caused by Landlord's gross
negligence or willful misconduct. Tenant's parking rights under this Section 24 are solely for the benefit
of Tenant's employees and invitees and such rights may not be transferred without Landlord's prior
consent, except pursuant to a Transfer permitted under Section 14.
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25 MISCELLANEOUS.
25.1 Notices. Except as provided in Section 18, no notice, demand, statement, designation,
request, consent, approval, election or other communication given hereunder ("Notice") shall be binding
upon either party unless (a) it is in writing; (b) it is (i) sent by certified or registered mail, postage prepaid,
return receipt requested, (h) delivered by a nationally recognized courier service, or (iii) delivered
personally; and (c) it is sent or delivered to the address set forth in Section 1.10 or 1.11, as applicable, or
to such other place (other than a P.O. box) as the recipient may from time to time designate in a Notice to
the other party. Any Notice shall be deemed received on the earlier of the date of actual delivery or the
date on which delivery is refused, or, if Tenant is the recipient and has vacated its notice address without
providing a new notice address, three (3) days after the date the Notice is deposited in the U.S. mail or
with a courier service as described above. No provision of this Lease requiring a particular Notice to be
in writing shall limit the generality of clause (a) of the first sentence of this Section 25.1.
25.2 Force Maieure. If either party is prevented from performing any obligation hereunder by
any strike, act of God, war, terrorist act, shortage of labor or materials, governmental action, civil
commotion or other cause beyond such party's reasonable control ("Force Majeure"), such obligation
shall be excused during (and any time period for the performance of such obligation shall be extended by)
the period of such prevention; provided, however, that this Section 25.2 shall not (a) permit Tenant to
hold over in the Premises after the expiration or earlier termination hereof, or (b) excuse (or extend any
time period for the performance of) (i) any obligation to remit money or deliver credit enhancement,
(ii) any obligation under Section 10 or 25.31 or (iii) any of Tenant's obligations whose breach would
interfere with another occupant's use, occupancy or enjoyment of its premises or the Project or result in
any liability on the part of any Landlord Party.
25.3 Representations and Covenants. Tenant represents, warrants and covenants that (a) Tenant
is, and at all times during the Term will remain, duly organized, validly existing and in good standing
under the Laws of the state of its formation and qualified to do business in the state of California;
(b) neither Tenant's execution of nor its performance under this Lease will cause Tenant to be in violation
of any agreement or Law; (c) Tenant (and any guarantor hereof) has not, and at no time during the Term
will have, (i) made a general assignment for the benefit of creditors, (ii) filed a voluntary petition in
bankruptcy, (iii) suffered (A) the filing by creditors of an involuntary petition in bankruptcy that is not
dismissed within 30 days, (B) the appointment of a receiver to take possession of all or substantially all of
its assets, or (C) the attachment or other judicial seizure of all or substantially all of its assets,
(iv) admitted in writing its inability to pay its debts as they come due, or (v) made an offer of settlement,
extension or composition to its creditors generally; and (d) no party that (other than through the passive
ownership of interests traded on a recognized securities exchange) constitutes, owns, controls, or is
owned or controlled by Tenant, any guarantor hereof or any subtenant of Tenant is, or at any time during
the Term will be, (i) in violation of any Laws relating to terrorism or money laundering, or (ii) among the
parties identified on any list compiled pursuant to Executive Order 13224 for the purpose of identifying
suspected terrorists or on the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website, http://www.treas.gov/ofac/tllsdn.pdf or any replacement
website or other replacement official publication of such list.
25.4 MM. Landlord shall include Tenant's name in any tenant directory located in the lobby on
the first floor of the Building. If any part of the Premises is located on a multi -tenant floor, Landlord, at
Tenant's cost, shall provide identifying suite signage for Tenant comparable to that provided by Landlord
on similar floors in the Building. Tenant may not install (a) any signs outside the Premises, or (b) without
Landlord's prior consent in its sole and absolute discretion, any signs, window coverings, blinds or
similar items that are visible from outside the Premises.
25.5 Supplemental HVAC. If the Premises are served by any supplemental HVAC unit (a
"Unit"), then (a) Tenant shall pay the costs of all electricity consumed in the Unit's operation, together
with the cost of installing a meter to measure such consumption; (b) Tenant, at its expense, shall
(i) operate and maintain the Unit in compliance with all applicable Laws and such reasonable rules and
procedures as Landlord may impose; (ii) keep the Unit in as good working order and condition as existed
upon installation (or, if later, when Tenant took possession of the Premises), subject to normal wear and
tear and damage resulting from Casualty; (iii) maintain in effect, with a contractor reasonably approved
by Landlord, a contract for the maintenance and repair of the Unit, which contract shall require the
contractor, at least once every three (3) months, to inspect the Unit and provide to Tenant a report of any
defective conditions, together with any recommendations for maintenance, repair or parts -replacement;
(iv) follow all reasonable recommendations of such contractor; and (v) promptly provide to Landlord a
copy of such contract and each report issued thereunder; (c) the Unit shall become Landlord's property
upon installation and without compensation to Tenant; provided, however, that upon Landlord's request
at the expiration or earlier termination hereof, Tenant, at its expense, shall remove the Unit and repair any
resulting damage (and if Tenant fails to timely perform such work, Landlord may do so at Tenant's
expense); (d) the Unit shall be deemed (i) a Leasehold Improvement (except for purposes of Section 8),
and (ii) for purposes of Section 11, part of the Premises; (e) if the Unit exists on the date of mutual
execution and delivery hereof, Tenant accepts the Unit in its "as is" condition, without representation or
17
warranty as to quality, condition, fitness for use or any other matter; (f) if the Unit connects to the
Building's condenser water loop (if any), then Tenant shall pay to Landlord, as Additional Rent,
Landlord's standard one-time fee for such connection and Landlord's standard monthly per -ton usage fee;
and (g) if any portion of the Unit is located on the roof, then (i) Tenant's access to the roof shall be
subject to such reasonable rules and procedures as Landlord may impose; (ii) Tenant shall maintain the
affected portion of the roof in a clean and orderly condition and shall not interfere with use of the roof by
Landlord or any other tenants or licensees; and (iii) Landlord may relocate the Unit and/or temporarily
interrupt its operation, without liability to Tenant, as reasonably necessary to maintain and repair the roof
or otherwise operate the Building.
25.6 Attorneys' Fees. In any action or proceeding between the parties, including any appellate or
alternative dispute resolution proceeding, the prevailing party may recover from the other party all of its
costs and expenses in connection therewith, including reasonable attorneys' fees and costs. Tenant shall
pay all reasonable attorneys' fees and other fees and costs that Landlord incurs in interpreting or
enforcing this Lease or otherwise protecting its rights hereunder (a) where Tenant has failed to pay Rent
when due, or (b) in any bankruptcy case, assignment for the benefit of creditors, or other insolvency,
liquidation or reorganization proceeding involving Tenant or this Lease.
25.7 Brokers. Tenant represents to Landlord that it has dealt only with Tenant's Broker as its
broker in connection with this Lease. Tenant shall indemnify, defend, and hold Landlord harmless from
all claims of any brokers, other than Tenant's Broker, claiming to have represented Tenant in connection
with this Lease. Landlord shall indemnify, defend and hold Tenant harmless from all claims of any
brokers, including Landlord's Broker, claiming to have represented Landlord in connection with this
Lease. Tenant acknowledges that any Affiliate of Landlord that is involved in the negotiation of this
Lease is representing only Landlord, and that any assistance rendered by any agent or employee of such
Affiliate in connection with this Lease or any subsequent amendment or other document related hereto
has been or will be rendered as an accommodation to Tenant solely in furtherance of consummating the
transaction on behalf of Landlord, and not as agent for Tenant.
25.8 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and
enforced in accordance with the Laws of the State of California. THE PARTIES WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR
ANY CLAIM FOR INJURY OR DAMAGE OR ANY EMERGENCY OR STATUTORY REMEDY.
25.9 Waiver of Statutory Provisions. Each party waives California Civil Code §§ 1932(2),
1933(4) and 1945. Tenant waives (a) any rights under (i) California Civil Code §§ 1932(l), 1941, 1942,
1950.7 or any similar Law, or (ii) California Code of Civil Procedure §§ 1263.260 or 1265.130; and
(b) any right to terminate this Lease under California Civil Code § 1995.310.
25.10 Interpretation. As used herein, the capitalized term "Section" refers to a section hereof
unless otherwise specifically provided herein. As used in this Lease, the terms "herein," "hereof,"
"hereto" and "hereunder" refer to this Lease and the term "include" and its derivatives are not limiting.
Any reference herein to "any part" or "any portion" of the Premises, the Property or any other property
shall be construed to refer to all or any part of such property. As used herein in connection with
insurance, the term "deductible" includes self -insured retention. Wherever this Lease prohibits either
party from engaging in any particular conduct, this Lease shall be deemed also to require such party to
cause each of its employees and agents (and, in the case of Tenant, each of its licensees, invitees and
subtenants, and any other party claiming by, through or under Tenant) to refrain from engaging in such
conduct. Wherever this Lease requires Landlord to provide a customary service or to act in a reasonable
manner (whether in incurring an expense, establishing a rule or regulation, providing an approval or
consent, or performing any other act), this Lease shall be deemed also to provide that whether such
service is customary or such conduct is reasonable shall be determined by reference to the practices of
owners of buildings ("Comparable Buildings") that (i) are comparable to the Building in size, age, class,
quality and location, and (ii) at Landlord's option, have been, or are being prepared to be, certified under
the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) rating
system or a similar rating system. Tenant waives the benefit of any rule that a written agreement shall be
construed against the drafting party.
25.11 Enfire Aereement. This Lease sets forth the entire agreement between the parties relating to
the subject matter hereof and supersedes any previous agreements (none of which shall be used to
interpret this Lease). Tenant acknowledges that in entering into this Lease it has not relied upon any
representation, warranty or statement, whether oral or written, not expressly set forth herein. This Lease
can be modified only by a written agreement signed by both parties.
25.12 Other. Landlord, at its option, may cure any Default, without waiving any right or remedy
or releasing Tenant from any obligation, in which event Tenant shall pay Landlord, upon demand, the
cost of such cure. If any provision hereof is void or unenforceable, no other provision shall be affected.
18
Submission of this instrument for examination or signature by Tenant does not constitute an option or
offer to lease, and this instrument is not binding until it has been executed and delivered by both parties.
If Tenant is comprised of two or more parties, their obligations shall be joint and several. Time is of the
essence with respect to the performance of every provision hereof in which time of performance is a
factor. So long as Tenant performs its obligations hereunder, Tenant shall have peaceful and quiet
possession of the Premises against any party claiming by, through or under Landlord, subject to the terms
hereof. Landlord may transfer its interest herein, in which event (a) to the extent the transferee assumes
in writing Landlord's obligations arising hereunder after the date of such transfer (including the return of
any Security Deposit), Landlord shall be released from, and Tenant shall look solely to the transferee for
the performance of, such obligations; and (b) Tenant shall attom to the transferee. If Tenant (or any party
claiming by, through or under Tenant) pays directly to the provider for any energy consumed at the
Property, Tenant, promptly upon request, shall deliver to Landlord (or, at Landlord's option, execute and
deliver to Landlord an instrument enabling Landlord to obtain from such provider) any data about such
consumption that Landlord, in its reasonable judgment, is required to disclose to a prospective buyer,
tenant, Security Holder or governmental agency under applicable Law. Landlord reserves all rights not
expressly granted to Tenant hereunder, including the right to make alterations to the Project. No rights to
any view or to light or air over any property are granted to Tenant hereunder. The expiration or earlier
termination hereof shall not relieve either party of any obligation that accrued before, or continues to
accrue after, such expiration or termination. This Lease may be executed in counterparts.
[SIGNATURES ARE ON THE FOLLOWING PAGE]
19
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day
and date first above written.
LANDLORD:
BRE/OC PROPERTY HOLD
L.L.C.,
a Delaware limits company
r
By:
-4 am Frank Campbell
]tle: Managing Director
TENANT:
LAWSON V. SEALEY CHIROPRACTIC
PROFESSIONAL CORPORATION,
a California corporation--
By:
Title:
[chainn an][president][vice president]
By:
Title: *-
[secretary][assistant secretary][chief
financial officer][assistant treasurer]
20
EXHIBIT A
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
OUTLINE OF PRENUSES
=7r
L
{2003-02330/00770966;6} Exhibit A
1
EXHIBIT B
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
As used in this Exhibit B (this "Work Letter"), the following terms shall have the following
meanings:
(i) [Intentionally Omitted];
(ii) "Tenant Improvements" means all improvements to be constructed in the Premises
pursuant to this Work Letter;
(iii) "Tenant Improvement Work" means the construction of the Tenant Improvements,
together with any related work that is necessary to construct the Tenant Improvements
(including demolition, and including any change to any Common Area, the Building
structure, or any Building system located outside of and not exclusively serving the
Premises that becomes required under Law as a result of the construction of the Tenant
Improvements);
(iv) "law" means Law; and
(v) "Agreement" means the lease of which this Work Letter is a part.
1 ALLOWANCE.
1.1 Allowance. Tenant shall be entitled to a one-time tenant improvement allowance (the
"Allowance") in the amount of $26,923.00 (i.e. $19.00 per rentable square foot of the Premises) to be
applied toward the Allowance Items (defined in Section 1.2 below). Tenant shall be responsible for all
costs associated with the Tenant Improvement Work, including the costs of the Allowance Items, to the
extent such costs exceed the lesser of (a) the Allowance, or (b) the aggregate amount that Landlord is
required to disburse for such purpose pursuant to this Work Letter.
1.2 Disbursement. Except as otherwise provided in this Work Letter, the Allowance shall be
disbursed by Landlord only for the following items (the "Allowance Items"): (a) [Intentionally Omitted];
(b) [Intentionally Omitted]; (c) plan -check, permit and license fees relating to performance of the Tenant
Improvement Work; (d) the cost of performing the Tenant Improvement Work, including after hours
charges, testing and inspection costs, freight elevator usage, hoisting and trash removal costs, and
contractors' fees and general conditions; (e) the cost of any change to the base, shell or core of the
Premises or Building required by the Work List (defined in Section 2.1 below) (including if such change
is due to the fact that such work is prepared on an unoccupied basis), including all direct architectural
and/or engineering fees and expenses incurred in connection therewith; (f) the cost of any change to the
Work List or the Tenant Improvement Work required by law; (g) the Landlord Supervision Fee (defined
in Section 3.4.1 below); (h) sales and use taxes; and (i) all other costs expended by Landlord in
connection with the performance of the Tenant Improvement Work.
1.3 Disbursement for Other Allowance Items. If any portion of the Allowance remains unused
after all Allowance Items have been fully paid, then, upon Tenant's request, and subject to Section 1.4
below, Landlord shall disburse the Allowance, not to exceed $2,834.00 (i.e. $2.00 per rentable square foot
of the Premises), to Tenant to pay (i) the reasonable costs of relocating and installing in the Premises
Tenant's furniture, fixtures, equipment, Lines and other personal property, within thirty (30) days after
receiving paid invoices from Tenant with respect to such costs, (ii) the Tenant Improvements, or
(iii) installments of Base Rent next coming due under this Agreement (the "Other Allowance Items").
Tenant shall be responsible for all costs of the Other Allowance Items to the extent such costs exceed the
aggregate amount that Landlord is required to disburse for such purpose pursuant to this Work Letter.
1.4 Deadline for Use of Allowance. Notwithstanding any contrary provision of this Agreement,
if, for any reason other than a breach by Landlord of its obligations under this Agreement, the entire
Allowance is not used by May 31, 2018, then the unused amount shall revert to Landlord and Tenant shall
have no further rights with respect thereto.
1.5 Landlord Costs. Notwithstanding any contrary provision of this Agreement, Tenant shall
not be responsible for any Landlord Cost (defined below) and no Landlord Cost shall be an Allowance
Item. As used herein, "Landlord Cost" means any portion of the cost of the Tenant Improvement Work
that is reasonably attributable to the following and not to any negligence or willful misconduct of Tenant
or any of its employees, agents, contractors or representatives: (i) any failure of the existing condition or
configuration of the Premises, the Common Areas or the Building to comply with the Americans with
Disabilities Act of 1990, as amended, or Title 24 of the California Code of Regulations (other than any
{2003-02330/00770966;6} Exhibit B
1
such failure resulting from any use of the Premises for other than general office purposes), and (ii) any
architectural costs and fees incurred to prepare any construction drawings; provided, however, that the
foregoing shall in no event include costs of construction drawings necessitated by any change to the Work
List requested by Tenant (which costs shall be Tenant's responsibility as described in Section 2.7 below).
WORK LIST AND PRICING.
2.1 Work List. Landlord shall perform Tenant Improvement Work in accordance with the
following work list (the "Work List") and as shown on Schedule I attached hereto, using Building -
standard methods, materials and finishes.
WORK LIST
A. Create two (2) exam rooms approximately 12' deep and 9' wide with Building
standard drywall and walls approximately 90" above floor height and with 6' wing
wall sections to partially enclose exam rooms (with no doors), in the location
shown on Schedule 1, and add one duplex electrical outlet in exam room located
adjacent to kitchen;
B. Create one 12' deep by 7' wide kitchen with Building standard drywall and with
walls approximately 90" above floor height; 4' wide upper and lower Building
standard plastic laminate cabinets with sink and instant hot (with no door) in the
location shown on Schedule 1, and add two duplex electrical outlets;
C. Create a 14' deep and 92" wide waiting room with Building standard drywall
construction, and walls 90" above floor height (wall to have a 2' wing wall to
partially enclose the waiting area and add one duplex electrical outlet and one
phone/data outlet;
D. Install Building standard LVT in waiting room area and kitchen; and
E. Provide 3' wide band of Building standard vinyl privacy film across the three (3)
existing perimeter offices and add Tenant logo to the largest office.
2.2
[Intentionally Omitted]
2.3
[Intentionally Omitted]
2.4
[Intentionally Omitted]
2.5
[Intentionally Omitted]
2.6
Construction Pricing.
2.6.1 Construction Pricing Proposal. Within 12 business days after the mutual execution
and delivery of this Agreement, Landlord shall provide Tenant with Landlord's reasonable estimate (the
"Construction Pricing Proposal") of the cost of all Allowance Items to be incurred by Tenant in
connection with the performance of the Tenant Improvement Work pursuant to the Work List. Tenant
shall approve or disapprove Construction Pricing Proposal, by notice to Landlord, within five (5) business
days after receiving it. If Tenant disapproves the Construction Pricing Proposal, Tenant's notice of
disapproval shall be accompanied by proposed revisions to the Work List that Tenant requests in order to,
resolve its objections to the Construction Pricing Proposal, and Landlord shall respond as required under
Section 2.7 below. Such procedure shall be repeated as necessary until the Construction Pricing Proposal
is approved by Tenant. Upon Tenant's approval of the Construction Pricing Proposal, Landlord may
purchase the items set forth in the Construction Pricing Proposal and begin construction relating to such
items.
2.6.2 Over -Allowance Amount. If the Construction Pricing Proposal exceeds the
Allowance, then Tenant, concurrently with its delivery to Landlord of its approval of the Construction
Pricing Proposal, shall deliver to Landlord cash in the amount of such excess (the "Over -Allowance
Amount"). Any Over -Allowance Amount shall be disbursed by Landlord before the Allowance and
pursuant to the same procedure as the Allowance. If, after the Construction Pricing Proposal is approved
by Tenant, (a) any Tenant requested revision is made to the Work List or the Tenant Improvement Work
is otherwise changed at the request of Tenant, in each case in a way that increases the Construction
Pricing Proposal, or (b) the Construction Pricing Proposal is otherwise increased to reflect the actual cost
of all Allowance Items to be incurred by Tenant in connection with the performance of the Tenant
Improvement Work pursuant to the terms hereof, then Tenant shall deliver any resulting Over -Allowance
Amount (or any resulting increase in the Over -Allowance Amount) to Landlord within twenty (20) days
upon Landlord's request.
2.7 Revisions to Work List. The Work List shall not be revised without Landlord's agreement,
which agreement may be withheld or conditioned in Landlord's sole and absolute discretion. If Tenant
{2003-02330/00770966;61 Exhibit B
2
requests any revision to the Work List, Landlord shall provide Tenant with notice approving or
disapproving such revision, and, if Landlord approves such revision, Landlord shall have such revision
made and delivered to Tenant, together with notice of any resulting change in the most recent
Construction Pricing Proposal, if any, within 10 business days after the later of Landlord's receipt of such
request or the mutual execution and delivery of this Agreement if such revision is not material, and within
such longer period of time as may be reasonably necessary (but not more than 15 business days after the
later of such receipt or such execution and delivery) if such revision is material, whereupon Tenant,
within one (1) business day, shall notify Landlord whether it desires to proceed with such revision. If
Landlord has begun performing the Tenant Improvement Work, then, in the absence of such
authorization, Landlord shall have the option to continue such performance disregarding such revision.
Without limitation, it shall be deemed reasonable for Landlord to disapprove any such proposed revision
that conflicts with Landlord's requirements for avoiding aesthetic, engineering or other conflicts with the
design and function of the balance of the Building. Landlord shall not revise the Work List without
Tenant's consent, which shall not be unreasonably withheld, conditioned or delayed.
2.8 Tenant's Approval Deadline. Tenant shall approve the Construction Pricing Proposal
pursuant to Section 2.6.1 above on or before Tenant's Approval Deadline (defined below). As used in
this Work Letter, "Tenant's Approval Deadline" means the date occurring 17 business days after the
mutual execution and delivery of this Agreement; provided, however, that Tenant's Approval Deadline
shall be extended by one (1) day for each day, if any, of any breach by Landlord of its obligations under
this Section 2.
3 CONSTRUCTION.
3.1 Contractor. Landlord shall retain a reputable contractor of its choice (the "Contractor") to
perform the Tenant Improvement Work. In addition, Landlord may select and/or approve of any
subcontractors, mechanics and materiahnen used in connection with the performance of the Tenant
Improvement Work.
3.2 [Intentionally Omitted]
3.3 [Intentionally Omitted]
3.4 Construction.
3.4.1 Performance of Tenant Improvement Work. Landlord shall cause the Contractor
to perform the Tenant Improvement Work in accordance with the Work List. Tenant shall pay a
construction supervision and management fee (the "Landlord Supervision Fee") to Landlord in an
amount equal to 5% of the aggregate amount of all Allowance Items other than the Landlord Supervision
Fee.
3.4.2 Contractor's Warranties. Tenant waives all claims against Landlord relating to any
defects in the Tenant Improvements; provided, however, that if, within 30 days after substantial
completion of the Tenant Improvement Work, Tenant provides notice to Landlord of any non -latent
defect in the Tenant Improvements, or if, within 11 months after substantial completion of the Tenant
Improvement Work, Tenant provides notice to Landlord of any latent defect in the Tenant Improvements,
then Landlord shall promptly cause such defect to be corrected.
4 COMPLIANCE WITH LAW; SUITABILITY FOR TENANT'S USE. Landlord shall cause its
consultants to use the Required Level of Care (defined below) to cause the Work List to comply with law;
provided, however, that Landlord shall not be responsible for any violation of law resulting from any
particular use of the Premises (as distinguished from general office use). As used herein, "Required
Level of Care" means the level of care that reputable consultants customarily use to cause plans and
specifications similar to the Work List to comply with law where such plans and specifications are
prepared for spaces in buildings comparable in quality to the Building. Except as provided above in this
Section 4, Tenant shall be responsible for ensuring that the Work List is suitable for Tenant's use of the
Premises and complies with law, and neither the preparation nor the approval of the Work List by
Landlord or its consultants shall relieve Tenant from such responsibility. To the extent that either parry
(the "Responsible Party") is responsible under this Section 4 for causing the Work List to comply with
law, the Responsible Party may contest any alleged violation of law in good faith, including by seeking a
waiver or deferment of compliance, asserting any defense allowed by law, and exercising any right of
appeal (provided that the other party incurs no liability as a result of such contest and that, after
completing such contest, the Responsible Parry makes any modification to the Work List or any alteration
to the Premises that is necessary to comply with any final order or judgment).
12003-02330/00770966;61 Exhibit B
3
5 COMPLETION.
5.1 Substantial Completion. For purposes of Section 1.3.2 of this Agreement, and subject to
Section 5.2 below, the Tenant Improvement Work shall be deemed to be "Substantially Complete" upon
the completion of the Tenant Improvement Work pursuant to the Work List (as reasonably determined by
Landlord), with the exception of any details of construction, mechanical adjustment or any other similar
matter the non -completion of which does not materially interfere with Tenant's use of the Premises.
5.2 Tenant Cooperation; Tenant Delay. Tenant shall use reasonable efforts to cooperate with
Landlord, the Contractor, and Landlord's other consultants to provide any necessary approvals relating to
the Work List, approve the Construction Pricing Proposal, obtain permits (if any are required by a
governmental authority), and complete the Tenant Improvement Work as soon as possible, and Tenant
shall meet with Landlord, in accordance with a schedule determined by Landlord, to discuss the parties'
progress. Without limiting the foregoing, if (i) the Tenant Improvements include the installation of
electrical connections for furniture stations to be installed by Tenant, and (ii) any electrical or other
portions of such furniture stations must be installed in order for Landlord to obtain any governmental
approval required for occupancy of the Premises, then (x) Tenant, upon five (5) business days' notice
from Landlord, shall promptly install such portions of such furniture stations in accordance with
Sections 7.2 and 7_3 of the Lease, and (y) during the period of Tenant's entry into the Premises for the
purpose of performing such installation, all of Tenant's obligations under this Agreement relating to the
Premises shall apply, except for the obligation to pay Monthly Rent. In addition, without limiting the
foregoing, if the Substantial Completion of the Tenant Improvement Work is delayed (a "Tenant Delay")
as a result of (a) any failure of Tenant to approve the Construction Pricing Proposal pursuant to
Section 2.6.1 above on or before Tenant's Approval Deadline; (b) any failure of Tenant to timely approve
any other matter requiring Tenant's approval; (c) any breach by Tenant of this Work Letter or this
Agreement; (d) any request by Tenant for any revision to, or for Landlord's approval of any revision to,
the Work List (except to the extent that such delay results from a breach by Landlord of its obligations
under Section 2.7 above); (e) [Intentionally Omitted]; (f) [Intentionally Omitted]; or (g) any other act or
omission of Tenant or any of its agents, employees or representatives, then, notwithstanding any contrary
provision of this Agreement, and regardless of when the Tenant Improvement Work is actually
Substantially Completed, the Tenant Improvement Work shall be deemed to be Substantially Completed
on the date on which the Tenant Improvement Work would have been Substantially Completed if no such
Tenant Delay had occurred. Notwithstanding the foregoing, Landlord shall not be required to tender
possession of the Premises to Tenant before the Tenant Improvement Work has been Substantially
Completed, as determined without giving effect to the preceding sentence.
6 MISCELLANEOUS. Notwithstanding any contrary provision of this Agreement, if Tenant
defaults under this Agreement before the Tenant Improvement Work is completed, Landlord's obligations
under this Work Letter shall be excused until such default is cured and Tenant shall be responsible for any
resulting delay in the completion of the Tenant Improvement Work. This Work Letter shall not apply to
any space other than the Premises.
{2003-02330/00770966;6} Exhibit B
4
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20
To:
EDIT C
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
CONFIRMATION LETTER
Re: Office Lease (the "Lease')
a
,a
on the floor of the building located at
California.
Lease ID:
Business Unit Number:
Dear
dated
20 between
("Landlord"), and
("Tenant"), concerning Suite
In accordance with the Lease, Tenant accepts possession of the Premises and confirms the
following:
1. The Commencement Date is and the Expiration Date is
2. The exact number of rentable square feet within the Premises is square feet,
subject to Section 2.1.1 of the Lease.
3. Tenant's Share, based upon the exact number of rentable square feet within the Premises,
is %, subject to Section 2.1.1 of the Lease.
Please acknowledge the foregoing by signing all three (3) counterparts of this letter in the space
provided below and returning two (2) fully executed counterparts to my attention. Please note that,
pursuant to Section 2.1.1 of the Lease, if Tenant fails to execute and return (or, by notice to Landlord,
reasonably object to) this letter within five (5) days after receiving it, Tenant shall be deemed to have
executed and returned it without exception.
"Landlord":
a
By:
Name:
Title:
(2003-02330/00770966;6) Exhibit C
1
Agreed and Accepted as of , 20_.
"Tenant":
By:
Name:
Title:
{2003-02330/00770966;6} Exhibit C
EXHIBIT D
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
RULES AND REGULATIONS
Tenant shall comply with the following rules and regulations (as modified or supplemented from
time to time, the "Rules and Regulations"). Landlord shall not be responsible to Tenant for the
nonperformance of any of the Rules and Regulations by any other tenants or occupants of the Project. In
the event of any conflict between the Rules and Regulations and the other provisions of this Lease, the
latter shall control.
1. Tenant shall not alter any lock or install any new or additional locks or bolts on any doors
or windows of the Premises without obtaining Landlord's prior consent. Tenant shall bear the cost of any
lock changes or repairs required by Tenant. Two (2) keys will be furnished by Landlord for the Premises,
and any additional keys required by Tenant must be obtained from Landlord at a reasonable cost to be
established by Landlord. Upon the termination of this Lease, Tenant shall restore to Landlord all keys of
stores, offices and toilet rooms furnished to or otherwise procured by Tenant, and if any such keys are
lost, Tenant shall pay Landlord the cost of replacing them or of changing the applicable locks if Landlord
deems such changes necessary.
2. All doors opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises.
3. Landlord may close and keep locked all entrance and exit doors of the Building during
such hours as are customary for Comparable Buildings. Tenant shall cause its employees, agents,
contractors, invitees and licensees who use Building doors during such hours to securely close and lock
them after such use. Any person entering or leaving the Building during such hours, or when the
Building doors are otherwise locked, may be required to sign the Building register, and access to the
Building may be refused unless such person has proper identification or has a previously arranged access
pass. Landlord will furnish passes to persons for whom Tenant requests them. Tenant shall be
responsible for all persons for whom Tenant requests passes and shall be liable to Landlord for all acts of
such persons. Landlord and its agents shall not be liable for damages for any error with regard to the
admission or exclusion of any person to or from the Building. In case of invasion, mob, riot, public
excitement or other commotion, Landlord may prevent access to the Building or the Project during the
continuance thereof by any means it deems appropriate for the safety and protection of life and property.
4. No furniture, freight or equipment shall be brought into the Building without prior notice
to Landlord. All moving activity into or out of the Building shall be scheduled with Landlord and done
only at such time and in such manner as Landlord designates. Landlord may prescribe the weight, size
and position of all safes and other heavy property brought into the Building and also the times and
manner of moving the same in and out of the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe or property. Any damage
to the Building, its contents, occupants or invitees resulting from Tenant's moving or maintaining any
such safe or other heavy property shall be the sole responsibility and expense of Tenant (notwithstanding
Sections 7 and 10.4 of this Lease).
5. No furniture, packages, supplies, equipment or merchandise will be received in the
Building or carried up or down in the elevators, except between such hours, in such specific elevator and
by such personnel as shall be designated by Landlord.
6. Employees of Landlord shall not perform any work or do anything outside their regular
duties unless under special instructions from Landlord.
7. No sign, advertisement, notice or handbill shall be exhibited, distributed, painted or
affixed by Tenant on any part of the Premises or the Building without Landlord's prior consent. Tenant
shall not disturb, solicit, peddle or canvass any occupant of the Project.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be used for any
purpose other than that for which they were constructed, and no foreign substance shall be thrown therein.
Notwithstanding Sections 7 and 10.4 of this Lease, Tenant shall bear the expense of any breakage,
stoppage or damage resulting from any violation of this rule by Tenant or any of its employees, agents,
contractors, invitees or licensees.
(2003-02330/00770966;6) Exhibit D
1
9. Tenant shall not overload the floor of the Premises, or mark, drive nails or screws or drill
into the partitions, woodwork or drywall of the Premises, or otherwise deface the Premises, without
Landlord's prior consent. Tenant shall not purchase bottled water, ice, towel, linen, maintenance or other
like services from any person not approved by Landlord.
10. Except for vending machines intended for the sole use of Tenant's employees and
invitees, no vending machine or machines other than fractional horsepower office machines shall be
installed, maintained or operated in the Premises without Landlord's prior consent.
11. Tenant shall not, without Landlord's prior consent, use, store, install, disturb, spill,
remove, release or dispose of, within or about the Premises or any other portion of the Project, any
asbestos -containing materials, any solid, liquid or gaseous material now or subsequently considered toxic
or hazardous under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental Law, or any inflammable, explosive or dangerous fluid or substance; provided, however,
that Tenant may use, store and dispose of such substances in such amounts as are typically found in similar
premises used for general office purposes provided that such use, storage and disposal does not damage any
part of the Premises, Building or Project and is performed in a safe manner and in accordance with all Laws.
Tenant shall comply with all Laws pertaining to and governing the use of such materials by Tenant and
shall remain solely liable for the costs of abatement and removal. No burning candle or other open flame
shall be ignited or kept by Tenant in or about the Premises, Building or Project.
12. Tenant shall not, without Landlord's prior consent, use any method of heating or air
conditioning other than that supplied by Landlord.
13. Tenant shall not use or keep any foul or noxious gas or substance in or on the Premises,
or occupy or use the Premises in a manner offensive or objectionable to Landlord or other occupants of
the Project by reason of noise, odors or vibrations, or interfere with other occupants or those having
business therein, whether by the use of any musical instrument, radio, CD player or otherwise. Tenant
shall not throw anything out of doors, windows or skylights or down passageways.
14. Tenant shall not bring into or keep within the Project, the Building or the Premises any
animals (other than service animals), birds, aquariums, or, except in areas designated by Landlord,
bicycles or other vehicles.
15. No cooking shall be done in the Premises, nor shall the Premises be used for lodging, for
living quarters or sleeping apartments, or for any improper, objectionable or immoral purposes.
Notwithstanding the foregoing, Underwriters' laboratory -approved equipment and microwave ovens may
be used in the Premises for heating food and brewing coffee, tea, hot chocolate and similar beverages for
employees and invitees, provided that such use complies with all Laws.
16. The Premises shall not be used for manufacturing or for the storage of merchandise
except to the extent such storage may be incidental to the Permitted Use. Tenant shall not occupy the
Premises as an office for a messenger -type operation or dispatch office, public stenographer or typist, or
for the manufacture or sale of liquor, narcotics or tobacco, or as a medical office, a barber or manicure
shop, or an employment bureau, without Landlord's prior consent. Tenant shall not engage or pay any
employees in the Premises except those actually working for Tenant in the Premises, nor advertise for
laborers giving an address at the Premises.
17. Landlord may exclude from the Project any person who, in Landlord's judgment, is
intoxicated or under the influence of liquor or drugs, or who violates any of these Rules and Regulations.
18. Tenant shall not loiter in or on the entrances, corridors, sidewalks, lobbies, courts, halls,
stairways, elevators, vestibules or any Common Areas for the purpose of smoking tobacco products or for
any other purpose, nor in any way obstruct such areas, and shall use them only as a means of ingress and
egress for the Premises.
19. Tenant shall not waste electricity, water or air conditioning, shall cooperate with
Landlord to ensure the most effective operation of the Building's heating and air conditioning system, and
shall not attempt to adjust any controls. Tenant shall install and use in the Premises only ENERGY
STAR rated equipment, where available. Tenant shall use recycled paper in the Premises to the extent
consistent with its business requirements.
20. Tenant shall store all its trash and garbage inside the Premises. No material shall be
placed in the trash or garbage receptacles if, under Law, it may not be disposed of in the ordinary and
customary manner of disposing of trash and garbage in the vicinity of the Building. All trash, garbage
and refuse disposal shall be made only through entryways and elevators provided for such purposes at
such times as Landlord shall designate. Tenant shall comply with Landlord's recycling program, if any.
{2003-02330/00770966;61 Exhibit D
2
21. Tenant shall comply with all safety, fire protection and evacuation procedures and
regulations established by Landlord or any governmental agency.
22. Any persons employed by Tenant to do janitorial work (a) shall be subject to Landlord's
prior consent; (b) shall not, in Landlord's reasonable judgment, disturb labor harmony with any workforce
or trades engaged in performing other work or services at the Project; and (c) while in the Building and
outside of the Premises, shall be subject to the control and direction of the Building manager (but not as
an agent or employee of such manager or Landlord), and Tenant shall be responsible for all acts of such
persons.
23. No awning or other projection shall be attached to the outside walls of the Building
without Landlord's prior consent. Other than Landlord's Building -standard window coverings, no
curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window
or door of the Premises. All electrical ceiling fixtures hung in the Premises or spaces along the perimeter
of the Building must be fluorescent and/or of a quality, type, design and a warm white bulb color
approved in advance by Landlord. Neither the interior nor exterior of any windows shall be coated or
otherwise sunscreened without Landlord's prior consent. Tenant shall abide by Landlord's regulations
concerning the opening and closing of window coverings.
24. Tenant shall not obstruct any sashes, sash doors, skylights, windows or doors that reflect
or admit light or air into the halls, passageways or other public places in the Building, nor shall Tenant
place any bottles, parcels or other articles on the windowsills.
25. Tenant must comply with requests by Landlord concerning the informing of their
employees of items of importance to the Landlord.
26. Tenant must comply with the State of California "No Smoking" law set forth in
California Labor Code Section 6404.5 and with any local "No Smoking" ordinance that is not superseded
by such law.
27. Tenant shall cooperate in any reasonable safety or security program developed by
Landlord or required by Law.
28. All office equipment of an electrical or mechanical nature shall be placed by Tenant in
the Premises in settings approved by Landlord, to absorb or prevent any vibration, noise or annoyance.
29. Tenant shall not use any hand trucks except those equipped with rubber tires and rubber
side guards.
30. No auction, liquidation, fire sale, going -out -of -business or bankruptcy sale shall be
conducted in the Premises without Landlord's prior consent.
31. Tenant shall not (a) use any name of the Building or Project for any purpose other than to
identify the address of the business to be conducted by Tenant in the Premises, (b) use any image of the
Building or Project in any advertising or other publicity without Landlord's prior consent, or (c) use any
name or image of the Building or Project in any manner that would infringe any trade name, trade mark,
copyright or similar right of Landlord or any third party in or to any name or image of the Building or
Project. Without limiting the foregoing, Tenant shall not, in any signage displayed at the Building or
Project, on its website, or in any other advertising or promotional material, identify, describe, or refer to
itself or its business as "[Tenant's name or trade name] [name of Building or Project]" or "[Tenant's
name or trade name] At [name of Building or Project]."
Landlord may from time to time modify or supplement these Rules and Regulations in a manner
that, in Landlord's reasonable judgment, is appropriate for the management, safety, care and cleanliness
of the Premises, the Building, the Common Areas and the Project, for the preservation of good order
therein, and for the convenience of other occupants and tenants thereof, provided that no such
modification or supplement shall materially reduce Tenant's rights or materially increase Tenant's
obligations hereunder. Landlord may waive any of these Rules and Regulations for the benefit of any
tenant, but no such waiver shall be construed as a waiver of such Rule and Regulation in favor of any
other tenant nor prevent Landlord from thereafter enforcing such Rule and Regulation against any tenant.
Notwithstanding the foregoing, no rule that is added to the initial Rules and Regulations shall be enforced
against Tenant in a manner that unreasonably discriminates in favor of any other similarly situated tenant.
12003-02330/00770966;61 Exhibit D
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EXHIBIT E
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
JUDICIAL REFERENCE
IF THE JURY -WAIVER PROVISIONS OF SECTION 25.8 OF THIS LEASE ARE NOT
ENFORCEABLE UNDER CALIFORNIA LAW, THE PROVISIONS SET FORTH BELOW SHALL
APPLY.
It is the desire and intention of the parties to agree upon a mechanism and procedure under which
controversies and disputes arising out of this Lease or related to the Premises will be resolved in a prompt
and expeditious manner. Accordingly, except with respect to actions for unlawful or forcible detainer or
with respect to the prejudgment remedy of attachment, any action, proceeding or counterclaim brought by
either party hereto against the other (and/or against its officers, directors, employees, agents or
subsidiaries or affiliated entities) on any matters arising out of or in any way connected with this Lease,
Tenant's use or occupancy of the Premises and/or any claim of injury or damage, whether sounding in
contract, tort, or otherwise, shall be heard and resolved by a referee under the provisions of the California
Code of Civil Procedure, Sections 638 — 645.1, inclusive (as same may be amended, or any successor
statute(s) thereto) (the "Referee Sections"). Any fee to initiate the judicial reference proceedings and all
fees charged and costs incurred by the referee shall be paid by the parry initiating such procedure (except
that if a reporter is requested by either parry, then a reporter shall be present at all proceedings where
requested and the fees of such reporter — except for copies ordered by the other parties — shall be borne by
the party requesting the reporter); provided however, that allocation of the costs and fees, including any
initiation fee, of such proceeding shall be ultimately determined in accordance with Section 25.6 of this
Lease. The venue of the proceedings shall be in the county in which the Premises are located. Within
10 days of receipt by any party of a request to resolve any dispute or controversy pursuant to this
Exhibit E, the parties shall agree upon a single referee who shall try all issues, whether of fact or law, and
report a finding and judgment on such issues as required by the Referee Sections. If the parties are unable
to agree upon a referee within such 10-day period, then any party may thereafter file a lawsuit in the
county in which the Premises are located for the purpose of appointment of a referee under the Referee
Sections. If the referee is appointed by the court, the referee shall be a neutral and impartial retired judge
with substantial experience in the relevant matters to be determined, from Jams/Endispute, Inc.,
ADR Services, Inc. or a similar mediation/arbitration entity approved by each party in its sole and
absolute discretion. The proposed referee may be challenged by any party for any of the grounds listed in
the Referee Sections. The referee shall have the power to decide all issues of fact and law and report his
or her decision on such issues, and to issue all recognized remedies available at law or in equity for any
cause of action that is before the referee, including an award of attorneys' fees and costs in accordance
with this Lease. The referee shall not, however, have the power to award punitive damages, nor any other
damages that are not permitted by the express provisions of this Lease, and the parties waive any right to
recover any such damages. The parties may conduct all discovery as provided in the California Code of
Civil Procedure, and the referee shall oversee discovery and may enforce all discovery orders in the same
manner as any trial court judge, with rights to regulate discovery and to issue and enforce subpoenas,
protective orders and other limitations on discovery available under California Law. The reference
proceeding shall be conducted in accordance with California Law (including the rules of evidence), and in
all regards, the referee shall follow California Law applicable at the time of the reference proceeding.
The parties shall promptly and diligently cooperate with one another and the referee, and shall perform
such acts as may be necessary to obtain a prompt and expeditious resolution of the dispute or controversy
in accordance with the terms of this Exhibit E. In this regard, the parties agree that the parties and the
referee shall use best efforts to ensure that (a) discovery be conducted for a period no longer than six (6)
months from the date the referee is appointed, excluding motions regarding discovery, and (b) a trial date
be set within nine (9) months of the date the referee is appointed. In accordance with Section 644 of the
California Code of Civil Procedure, the decision of the referee upon the whole issue must stand as the
decision of the court, and upon the filing of the statement of decision with the clerk of the court, or with
the judge if there is no clerk, judgment may be entered thereon in the same manner as if the action had
been tried by the court. Any decision of the referee and/or judgment or other order entered thereon shall
be appealable to the same extent and in the same manner that such decision, judgment, or order would be
appealable if rendered by a judge of the superior court in which venue is proper hereunder. The referee
shall in his/her statement of decision set forth his/her findings of fact and conclusions of law. The parties
intend this general reference agreement to be specifically enforceable in accordance with the Code of
Civil Procedure. Nothing in this Exhibit E shall prejudice the right of any party to obtain provisional
relief or other equitable remedies from a court of competent jurisdiction as shall otherwise be available
under the Code of Civil Procedure and/or applicable court rules.
{2003-02330/00770966;6) Exhibit E
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EXHIBIT F
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
ADDITIONAL PROVISIONS
California Civil Code Section 1938. Pursuant to California Civil Code § 1938, Landlord hereby
states that the Premises have not undergone inspection by a Certified Access Specialist (CASp)
(defined in California Civil Code § 55.52). Accordingly, pursuant to California Civil Code
§ 1938(e), Landlord hereby further states as follows:
A Certified Access Specialist (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.
In accordance with the foregoing, Landlord and Tenant agree that if Tenant obtains a CASp
inspection of the Premises, then Tenant shall pay (i) the fee for such inspection, and (ii) except as
may be otherwise expressly provided in this Lease, the cost of making any repairs necessary to
correct violations of construction -related accessibility standards within the Premises.
2. Asbestos Notification. Tenant acknowledges that it has received the asbestos notification letter
attached to this Lease as Exhibit G, disclosing the existence of asbestos in the Building. Tenant
agrees to comply with the California "Connelly Act" and other applicable laws, including by
providing copies of Landlord's asbestos notification letter to all of Tenant's "employees" and
"owners", as those terms are defined in the Connelly Act and other applicable laws.
3. Early Entry. Tenant may enter the Premises after installation of interior partition walls and before
the Commencement Date, solely for the purpose of installing telecommunications,data cabling,
office equipment, furnishings and other personal property in the Premises. Other than the obligation
to pay Monthly Rent, all of Tenant's obligations hereunder shall apply during any period of such
early entry. Notwithstanding the foregoing, Landlord may limit, suspend or terminate Tenant's
rights to enter the Premises pursuant to this Section 3 if Landlord reasonably determines that such
entry is endangering individuals working in the Premises or is delaying completion of the Tenant
Improvement Work (defined in Exhibit B).
{2003-02330/00770966;6} Exhibit F
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EDIT G
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
ASBESTOS NOTIFICATION
Asbestos -containing materials ("ACMs") were historically commonly used in the construction of
commercial buildings across the country. ACMs were commonly used because of their beneficial
qualities. ACMs are fire-resistant and provide good noise and temperature insulation.
Some common types of ACMs include surfacing materials (such as spray -on fireproofing, stucco,
plaster and textured paint), flooring materials (such as vinyl floor tile and vinyl floor sheeting) and their
associated mastics, carpet mastic, thermal system insulation (such as pipe or duct wrap, boiler wrap and
cooling tower insulation), roofing materials, drywall, drywall joint tape and drywall joint compound,
acoustic ceiling tiles, transite board, base cove and associated mastic, caulking, window glazing and fire
doors. These materials are not required under law to be removed from any building (except prior to
demolition and certain renovation projects). Moreover, ACMs generally are not thought to present a
threat to human health unless they cause a release of asbestos fibers into the air, which does not typically
occur unless (1) the ACMs are in a deteriorated condition, or (2) the ACMs have been significantly
disturbed (such as through abrasive cleaning, or maintenance or renovation activities).
It is possible that some of the various types of ACMs noted above (or other types) are present at
various locations in the Building. Anyone who finds any such materials in the Building should assume
them to contain asbestos unless those materials are properly tested and found to be otherwise. In addition,
under applicable law, certain of these materials are required to be presumed to contain asbestos in the
Building because the Building was built prior to 1981 (these materials are typically referred to as
"Presumed Asbestos Containing Materials" or "PALM"). PACM consists of thermal system
insulation and surfacing material found in buildings constructed prior to 1981, and asphalt or vinyl
flooring installed prior to 1981. If any thermal system insulation, asphalt or vinyl flooring or surfacing
materials are found to be present in the Building, such materials must be considered PACM unless
properly tested and found otherwise. In addition, Landlord has identified the presence of certain ACMs in
the Building. For information about the specific types and locations of these identified ACMs, please
contact the Building manager. The Building manager maintains records of the Building's asbestos
information including any Building asbestos surveys, sampling and abatement reports. This information
is maintained as part of Landlord's asbestos Operations and Maintenance Plan ("O&M Plan").
The O&M Plan is designed to minimize the potential of any harmful asbestos exposure to any
person in the Building. Because Landlord is not a physician, scientist or industrial hygienist, Landlord has
no special knowledge of the health impact of exposure to asbestos. Therefore, Landlord hired an
independent environmental consulting firm to prepare the Building's O&M Plan. The O&M Plan
includes a schedule of actions to be taken in order to (1) maintain any building ACMs in good condition,
and (2) to prevent any significant disturbance of such ACMs. Appropriate Landlord personnel receive
regular periodic training on how to properly administer the O&M Plan.
The O&M Plan describes the risks associated with asbestos exposure and how to prevent such
exposure. The O&M Plan describes those risks, in general, as follows: asbestos is not a significant health
concern unless asbestos fibers are released and inhaled. If inhaled, asbestos fibers can accumulate in the
lungs and, as exposure increases, the risk of disease (such as asbestosis and cancer) increases. However,
measures taken to minimize exposure and consequently minimize the accumulation of fibers, can reduce
the risk of adverse health effects.
The O&M Plan also describes a number of activities which should be avoided in order to prevent
a release of asbestos fibers. In particular, some of the activities which may present a health risk (because
those activities may cause an airborne release of asbestos fibers) include moving, drilling, boring or
otherwise disturbing ACMs. Consequently, such activities should not be attempted by any person not
qualified to handle ACMs. In other words, the approval of Building management must be obtained prior
to engaging in any such activities. Please contact the Building manager for more information in this
regard. A copy of the written O&M Plan for the Building is located in the Building management office
and, upon your request, will be made available to tenants for you to review and copy during regular
business hours.
Because of the presence of ACM in the Building, we are also providing the following warning,
which is commonly known as a California Proposition 65 warning: WARNING: This building
contains asbestos, a chemical known to the State of California to cause cancer.
Please contact the Building manager with any questions regarding the contents of this Exhibit G.
{2003-02330/00770966;6) Exhibit G
1
EXHIBIT H
1201 DOVE STREET
NEWPORT BEACH, CALIFORNIA
GUARANTY OF LEASE
FOR VALUE RECEIVED and in consideration for and as an inducement to BRE/OC
PROPERTY HOLDINGS L.L.C., a Delaware limited liability company ("Landlord") to lease certain
real property to LAWSON V. SEALEY CHIROPRACTIC PROFESSIONAL CORPORATION, a
California corporation ("Tenant"), pursuant to a lease dated , 2017 (the "Lease")
by and between Landlord and Tenant, from which the undersigned, LAWSON V. SEALEY, an
individual ("Guarantor"), will derive benefit, Guarantor does hereby unconditionally and irrevocably
guarantee to Landlord the punctual payment of all Rent (as such term is defined in the Lease) payable by
Tenant under the Lease throughout the Term (as defined in the Lease) of the Lease and any and all renewals
and extensions thereof in accordance with and subject to the provisions of the Lease, and the full
performance and observance of all other terms, covenants, conditions and agreements therein provided to be
performed and observed by Tenant under the terms of the Lease, for which Guarantor shall be jointly and
severally liable with Tenant. If any default on the part of Tenant shall occur under the Lease, Guarantor
does hereby covenant and agree to pay to Landlord upon demand in each and every instance such sum or
sums of money and to perform each and every covenant, condition and agreement under the Lease as
Tenant is and shall become liable for or obligated to pay or perform under the Lease, together with the costs
reasonably incurred by Landlord in connection therewith, including reasonable attorneys' fees. Such
payments of Rent and other sums shall be made monthly or at such other intervals as the same shall or may
become payable under the Lease, including any accelerations thereof, all without requiring any notice from
Landlord (other than any notice required by the Lease) of such non-payment or non performance, all of
which Guarantor hereby expressly waives.
At any time after the expiration of the forty-eighth (48) full calendar month of the Term, in the
case of Guarantor's death (whether such death occurs prior to or after the forty-eighth (48) full calendar
month of the Term), Guarantor's estate, heirs or legal representativcs (referred to herein as "Guarantor's
Estate") shall have the option to terminate this Guaranty, effective as of the date (the "Guaranty
Termination Date") that is the later of (i) the date of Landlord's receipt of Guarantor's Death Notice
(hereinafter defined), or (ii) the last day of the forty-eighth (48�) full calendar month of the Term, if. (i)
Tenant is not in default of its obligations under the Lease as of the Guaranty Termination Date or at the time
of the Death Notice; and (ii) Guarantor's Estate provides Landlord with notice (the "Death Notice") of its
intent to terminate this Guaranty, and (iii) the Death Notice is accompanied by a death certificate.
The maintenance of any action or proceeding by Landlord to recover any sum or sums that may be
or become due under the Lease and to secure the performance of any of the other terms, covenants and
conditions of the Lease shall not preclude Landlord from thereafter instituting and maintaining subsequent
actions or proceedings for any subsequent default or defaults of Tenant under the Lease. Guarantor does
hereby consent that without affecting the liability of Guarantor under this Guaranty and without notice to
Guarantor, time may be given by Landlord to Tenant for payment of Rent and such other sums and
performance of such other terms, covenants and conditions, or any of them, and such time extended and
indulgence granted, from time to time, or Tenant may be dispossessed or Landlord may avail itself of or
exercise any or all of the rights and remedies against Tenant provided by law or by the Lease, and may
proceed either against Tenant alone or jointly against Tenant and Guarantor or against Guarantor alone
without first prosecuting or exhausting any remedy or claim against Tenant. Guarantor does hereby further
consent to any subsequent change, modification or amendment of the Lease in any of its terms, covenants or
conditions, or in the Rent payable thereunder, or in the premises demised thereby, or in the term thereof, and
to any assignment or assignments of the Lease, and to any subletting or sublettings of the premises demised
by the Lease, and to any renewals or extensions thereof, all of which may be made without notice to or
consent of Guarantor and without in any manner releasing or relieving Guarantor from liability under this
Guaranty. Guarantor's obligations under this Guaranty shall not be released, terminated or diminished by
reason of any defense available to a surety and not available to Tenant, nor by reason of any ultra vires
actions on the part of the persons signing or delivering the Lease on behalf, or on the purported behalf, of
Tenant. Guarantor hereby waives notice of the acceptance of this Guaranty.
Guarantor does hereby agree that the bankruptcy of Tenant shall have no effect on the obligations of
Guarantor hereunder. Guarantor does hereby further agree that unless and until all claims of Landlord under
the Lease have been fully paid and satisfied and any preference period under the United States Bankruptcy
Code (or any successor or similar statute of any jurisdiction) has expired, Guarantor (a) shall not have
(i) any right of subrogation or reimbursement against Tenant by reason of any payment or act of
performance by Guarantor under this Guaranty, or (ii) any rights based on suretyship, subrogation or
otherwise to stand in the place of Landlord so as to compete with Landlord as a creditor of Tenant in
respect of any payments made by Guarantor hereunder; (b) subordinates any liability or indebtedness of
{2003-02330/00770966;6) Exhibit H
1
Tenant now or hereafter held by Guarantor to the obligations of Tenant under, arising out of or relating to
the Lease or Tenant's use of the premises demised by the Lease; and (c) acknowledges that the actions of
Landlord may affect or eliminate any rights of subrogation or reimbursement of Guarantor as against
Tenant without any liability or recourse against Landlord. The liability of Guarantor hereunder and the
rights of Landlord hereunder shall be reinstated and revived with respect to any amount at any time paid
against the Rent or other obligations that thereafter is required to be restored or returned by Landlord as a
result of any insolvency, bankruptcy, reorganization or similar proceeding affecting Tenant, Guarantor, any
other guarantor of Tenant's obligations, any other person, or any assets of any of the foregoing, or as a result
of any other fact or circumstance, all as though such amount had not been paid.
Guarantor hereby waives and agrees not to assert: (a) any right to require Landlord to proceed
against Tenant, or any other guarantor or person or to pursue any other security or remedy before
proceeding against Guarantor; (b) any defense based on the validity or enforceability of the Lease; (c) any
right or defense that may arise by reason of the incapacity, lack of authority, death or disability of Tenant
or any other person; and (d) any right or defense arising by reason of the absence, impairment,
modification, limitation, destruction or cessation (in bankruptcy, by an election of remedies, or otherwise)
of the liability of Tenant of the subrogation rights of Guarantor or of the right of Guarantor to proceed
against Tenant for reimbursement. Guarantor waives any right, statutory, or otherwise, for itself to
require or for Tenant to require Landlord to apply rents received toward the obligations of Guarantor
under this Guaranty, or to otherwise prioritize the receipt of rents as against the obligations of Guarantor
under this Guaranty. Guarantor hereby waives and agrees not to assert (x) any right or defense based on
the absence of any or all presentments, demands (including demands for performance), notices (including
notices of any adverse change in the financial status of Tenant, notices of any other facts which increase
the risk to Guarantor, notices of non-performance and notices of acceptance of this Guaranty) and protests
of each and every kind; (y) the defense of any statute of limitations in any action under or related to this
Guaranty or the Lease; and (z) any right or defense based on a lack of diligence or failure or delay by
Landlord in enforcing its rights under this Guaranty or the Lease. Guarantor hereby waives and agrees
not to assert or take advantage of any right to (i) exoneration if Landlord's actions shall impair any
security or collateral of Guarantor; (ii) any security or collateral held by Landlord; (iii) require Landlord
to proceed against or exhaust any security or collateral before proceeding against Guarantor; and
(iv) require Landlord to pursue any right or remedy for the benefit of Guarantor. Without limiting the
generality of any of the covenants and agreements of Guarantor set forth in this Guaranty, Guarantor
hereby waives any and all benefits of the second sentence of Section 2822(a) and the provisions of
Sections 2809, 2810, 2819, 2822, 2845, 2848, 2849 and 2850 of the California Civil Code and any
successor or similar statutes of any jurisdiction.
Neither this Guaranty nor any of the provisions hereof can be modified, waived or terminated,
except by a written instrument signed by Landlord. The provisions of this Guaranty shall apply to, bind
and inure to the benefit of Guarantor and Landlord and their respective heirs, legal representatives,
successors and assigns. As used herein, the term "Tenant" means the party specifically named as
"Tenant" in the Lease, together with any assignee of or subtenant under the Lease and any successor in
interest to any of the foregoing, whether by assignment, sublease or otherwise, including any trustee in
bankruptcy or bankruptcy estate of any of the foregoing. The undersigned, if there be more than one,
shall be jointly and severally liable hereunder, and for purposes of such several liability the word
"undersigned" wherever used herein shall be construed to refer to each of the undersigned parties
separately, all in the same manner and with the same effect as if each of them had signed separate
instruments, and this Guaranty shall not be revoked or impaired as to any of such parties by the death of
another party or by revocation or release of any obligations hereunder of any other party.
If Landlord should retain counsel and/or institute any suit against Guarantor to enforce this
Guaranty or any covenants or obligations hereunder, then Guarantor shall pay to Landlord, upon demand,
all reasonable attorneys' fees, costs and expenses, including court costs, filing fees, recording costs, and all
other costs and expenses incurred in connection therewith, in addition to all other amounts due hereunder.
This Guaranty shall be governed by and construed in accordance with the internal laws of the state where
the premises demised by the Lease are located. For the purpose solely of litigating any dispute under this
Guaranty, Guarantor submits to the jurisdiction of the courts of such state, and to venue in the county
where the premises demised by the Lease are located. IN ANY ACTION BROUGHT ON, AND WITH
RESPECT TO ANY MATTER (INCLUDING ANY TORT CLAIM) ARISING OUT OF, THIS
GUARANTY, GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY AND
FURTHER WAIVES AND AGREES NOT TO ASSERT OR TAKE ADVANTAGE OF ANY
DEFENSE BASED ON THE CLAIM THAT ANY ARBITRATION DECISION BINDING UPON
LANDLORD OR TENANT IS NOT BINDING ON GUARANTOR.
Any notice or other communication to be given to Landlord or Guarantor hereunder shall be in
writing and sent in accordance with the notice provisions of the Lease. Notices to Landlord shall be
delivered to Landlord's address set forth in the Lease. Notices to Guarantor shall be addressed as follows:
. In the event Guarantor's notice address as set forth above
changes, Guarantor agrees to provide written notice to Landlord of such change in address. If
{2003-02330/00770966;6} Exhibit H
2
Guarantor's notice address is not filled in at the above blank, or if the Guarantor's notice address is a post
office box address, then, for all purposes under this Guaranty, Landlord may send all notices under this
Guaranty to Guarantor, c/o Tenant, at the same notice address Landlord uses for Tenant under the Lease,
and any notice delivered in accordance with the foregoing shall be deemed to have been properly
delivered to Guarantor.
Guarantor acknowledges that in entering into this Guaranty it has not relied upon any
representation, warranty or statement, whether oral or written, not expressly set forth herein. Guarantor
waives the benefit of any rule that a written agreement shall be construed against the drafting party, or
than an instrument of guaranty or suretyship be construed against the obligee.
[SEE SIGNATURE BLOCKS ON NEXT PAGE]
{2003-02330/00770966;61 Exhibit H
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date of the Lease.
GUARANTOR:
LAWSON V. SEALEY, an individual
CONSENT OF SPOUSE:
The undersigned is the spouse of Lawson V. Sealey (who is the
Guarantor under the foregoing Guaranty). The undersigned (the
"Undersigned") hereby certifies, represents and agrees that
(i) the Undersigned has read and understands the foregoing
Guaranty; (ii) the Undersigned consents to the terms of the
Guaranty and the Undersigned's spouse's execution, delivery
and performance thereunder; and (iii) Landlord may have
recourse against the community property interest of the
Undersigned in community assets. Notwithstanding the
foregoing, the Undersigned shall not be individually liable under
the foregoing Guaranty, and Landlord shall not have any right of
recourse against the Undersigned's separate property.
By:
Print Name:
{2003-02330/00770966;6} Exhibit H
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