HomeMy WebLinkAboutC-4046 - Office Building Lease - 503 32nd StreetI' • 0
TENANT:City of Newport Beach
PROPERTY: 503 32nd Street SUITE: 130
OFFICE BUILDING LEASE
TABLE OF CONTENTS
1. LEASE OF PREMISES .............................................................................. ..............................1
2. DEFINITIONS ............................................................................................ ..............................1
3. EXHIBITS AND ADDENDA ..................................................................... ...............................
2
4. DELIVERY OF POSSESSION .................................................................. ...............................
2
5. RENT .......................................................................................................... ...............................
2
& INTERESTAND LATE CHARGES ......................................................... ............................... 3
7. SECURITY DEPOSIT ................................................................................ ............................... 3
8. TENANT'S USE OF THE PREMISES .................................................... ............................... 4
9. SERVICE AND UTILITIES ...................................................................... ...............................
4
10. CONDITION OF THE PREMISES ........................................................ ............................... 5
11. CONSTRUCTION, REPAIRS AND MAINTENANCE ......................... ............................... 5
12. ALTERATIONS AND ADDITIONS ....................................................... ............................... 6
13. LEASEHOLD IMPROVEMENTS, TENANT'S PROPERTY ............... ............................... 6
14. RULES ANDREGVLATIONS ................................................................ ..............................7
15. CERTAIN RIGHTS RESERVED BYLANDLORD ............................... ............................... 7
16. ASSIGNMENT AND SUBLETTING ...................................................... ............................... 7
17. HOLDING OVER ..................................................................................... ............................... 8
18. SURRENDER OF PREMISES ................................................................ ............................... 8
19. DESTRUCTION OR DAMAGE .............................................................. ............................... 9
20. EMINENT DOMAIN 9
............................................................................... ...............................
21. 1 NDEMNIFI CA TION .............................................................................. .............................10
22. TENANT'S INSURANCE ...................................................................... ...............................
10
23. WAIVER
OF SUBROGATION ................................................................ .............................10
24. SUBORDINATIONAND A TTORNMENT ............................................ .............................10
25. TENANT ESTOPPEL CERTIFICATES .............................................. ...............................
11
26. TRANSFER OF LANDLORD'S INTEREST ......................................... .............................11
27. DEFAULT ................................................................................................ .............................11
28. BROKERAGE FEES ................................................................................ .............................13
29. NOTICES
.................................................................................................. .............................13
30. GOVERNMENT ENERGY OR UTILITY CONTROLS ......................... .............................13
31. RELOCATION OF PREMISES .............................................................. .............................13
13
32. QUIETENJOYMENT ............................................................................ ...............................
33. OBSERVANCE OF LAW ......................................................................... .............................14
34. FORCE MAJEURE .................................................................................. .............................14
35. CURING TENANT'S DEFAULTS ......................................................... .............................14
36. SIGN CONTROL ............ » ........................................................................ .............................14
37. MISCELLANEOUS .................................................................................. .............................14
City of Newport Beach • •
503 32nd Street #130
OFFICE BUILDING LEASE
This Lease between 503 32nd Street LLC, a California imited liability company ( "Landlord "),
and The City of Newport Beach, ( "Tenant "), is dated ( 20 WR .
1. LEASE OF PREMISES
In consideration of the Rent (as defined at Section 5.4) and the provisions of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises described in Section 2(I) below.
The Premises are located within the Building and Project described in Section 2m. Tenant shall
have the non - exclusive right (unless otherwise provided herein) in common with Landlord, other
tenants, subtenants and invitees, to use the Common Areas (as defined at Section 2e).
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
(a) Base Rent (initial term): Twenty Seven Thousand and 00/100 Dollars ($27,000.00) per year,
payable in monthly installments of Two Thousand Two Hundred Fifty and 00/100 Dollars ($2,250.00)
per month commencing on June 1, 2008 and continuing through May 31, 2009; then Twenty Seven
Thousand Eight Hundred Sixteen and 00/100 Dollars ($27,816.00) per year, payable in monthly
installments of Two Thousand Three Hundred Eighteen and 00/100 Dollars ($2,318.00) per month
commencing on June 1, 2009 and continuing through the Expiration Date of the initial term.
(b) Base Year: [Not applicable]
(c) Broker(s)
Landlord's: None
Tenant's: None
(d) Commencement Date: June 1, 2008
(e) Common Areas: The Building lobbies, common corridors and hallways, restrooms, parking
areas, stairways, and other generally understood public or common areas. Landlord shall have the
right to regulate or restrict the use of the Common Areas.
(f) Expense Stop: [Not applicable]
(g) Expiration Date: May 31, 2010, unless otherwise sooner terminated in accordance with the
provisions of this Lease.
(h) Index (Section 5.2): [Not Applicable]
(i) Landlord's Mailing Address:
Tenant's Mailing Address:
503 32nd Street LLC
Attn: Jack Jakosky
503 32nd Street Suite #200
Newport Beach, CA 92663
City of Newport Beach
Attn: City Manager
3300 Newport Blvd.
Newport Beach, CA 92663
a) Monthly Installments of Base Rent (initial term): See paragraph 2(a) above
(k) Parking: Tenant shall be permitted to park two (2) cars on a non - exclusive basis in the
area(s) designated by Landlord for parking. Tenant shall abide by any and all parking
regulations and rules established from time to time by Landlord or Landlord's parking operator.
Landlord reserves the right to separately charge Tenant's guests and visitors for parking.
(1) Premises: that portion of the Building containing approximately Seven Hundred Fifty (750)
square feet of Rentable Area, located on the 1 st floor of the Building and known as Suite 130.
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City of Newport Beach •
503 32nd Street #130
•
(m) Project: the building of which the Premises are a part (the "Building ") and any other
buildings or improvements on the real property (the "Property') located at 503 32nd Street,
Newport Beach, California 92663.
(n) Rentable Area: as to both the Premises and the Project, the respective measurements of
floor area as may from time to time be subject to lease by Tenant and all tenants of the Project,
respectively, as determined by Landlord and applied on a consistent basis throughout the
Project.
(o) Security Deposit: None
(p) State: the state of California
(q) Intentionally Deleted
(r) Intentionally Deleted.
(s) Tenant's Use Clause (Article 8): Tenant shall use the Premises for general office purposes
(excluding medical, dental or similar office uses) and for no other purpose without the prior
written consent of Landlord, which Landlord may withhold in its sole discretion.
(t) Term: the period commencing on June 1, 2008 and expiring on May 31, 2010.
3. EXHIBITS AND ADDENDA
The exhibits and addenda listed below are incorporated by reference in this Lease:
a.
Exhibit "A"
- [Intentionally Deleted]
b.
Exhibit "B"
- [Intentionally Deleted]
c.
Exhibit "C"
- Building Standard Work Letter
d.
Exhibit "D"
- Rules and Regulations
e.
Exhibit "E"-
[Intentionally Deleted]
f.
Addendum
to Lease
4. DELIVERY OF POSSESSION
If for any reason Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date, Landlord shall not be subject to any liability for such failure, the Expiration
Date shall not change and the validity of this Lease shall not be impaired, but Rent shall be abated
until delivery of possession. "Delivery of possession" shall be deemed to occur on the date Landlord
completes Landlord's Work as defined in Exhibit "C ". Landlord shall pennit Tenant to enter upon the
Premises beginning May 14, 2008 for the purpose of making tenant improvements prior to the
Commencement Date. Such possession shall be subject to the provisions of this Lease except that
no Rent shall accrue until the Commencement Date.
5. RENT
5.1 Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises. Monthly
Installments of Base Rent shall be payable in advance on the first day of each calendar month of the
Term. If the Term begins (or ends) on other than the first (or last) day of a calendar month, the Base
Rent for the partial month shall be prorated on a per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.
5.2 [Intentionally Deleted]
5.3 [Intentionally Deleted]
5.4 Definition of Rent. All costs and expenses which Tenant assumes or agrees to pay to Landlord
under this Lease shall be deemed additional rent (which, together with the Base Rent is sometimes
referred to as the "Rent "). The Rent shall be paid to the Building manager (or other person) and at
such place, as Landlord may from time to time designate in writing, without any prior demand
therefore and without deduction or offset, in lawful money of the United States of America
5.5 Rent Control. If the amount of Rent or any other payment due under this Lease violates the terms
of any governmental restrictions on such Rent or payment, then the Rent or payment due during the
period of such restrictions shall be the maximum amount allowable under those restrictions. Upon
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City of Newport Beach • •
503 32nd Street #130
termination of the restrictions, Landlord shall, to the extent it is legally permitted, recover from Tenant
the difference between the amounts received during the period of the restrictions and the amounts
Landlord would have received had there been no restrictions.
5.6 Taxes Payable by Tenant. In addition to the Rent and any other charges be paid by Tenant
hereunder, Tenant shall reimburse Landlord upon demand for any and all taxes payable by Landlord
(other than net income taxes) which are not otherwise reimbursable under this Lease, whether or not
now customary or within the contemplation of the parties, where such taxes are based upon,
measured by or reasonably attributable to (a) the cost or value of Tenant's equipment, furniture,
fixtures and other personal property located in the Premises, or the cost of value of any leasehold
improvements made in orto the Premises by orforTenant, otherthan Building Standard Work made
by Landlord, regardless of whether title to such improvements, alterations, or additions is held by
Tenant or Landlord; (b) the gross or net Rent payable under this Lease, including, without limitation,
any rental or gross receipts tax levied by any taxing authority with respect to the receipt of Rent
hereunder; (c) the possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion thereof; or (d) this transaction or any
document to which Tenant is a party creating or transferring an interest or an estate in the Premises.
If it becomes unlawful for Tenant to reimburse Landlord for any costs as required under this Lease,
the Base Rent shall be revised to net Rent after imposition of any tax or other charge upon Landlord
as would have been payable to Landlord but for the reimbursement being unlawful.
6. INTEREST AND LATE CHARGES
If Tenant fails to pay when due any Rent or other amounts or charges which Tenant is obligated to
pay under the terms of this Lease, the unpaid amounts shall bear interest at the maximum rate then
allowed by law. Tenant acknowledges that the late payment of any monthly installment of Base Rent
will cause Landlord to lose the use of that money and incur costs and expenses not contemplated
under this Lease, including, without limitation, administrative and collection costs and processing and
accounting expenses, the exact amount of which is extremely difficult to ascertain. Therefore, in
addition to interest, if any such installment is not received by Landlord within ten (10) days from the
date it is due, Tenant shall pay Landlord a late charge equal to ten percent (10 %) of such installment.
Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the loss suffered from such nonpayment by
Tenant. Acceptance of any interest or late charge shall not constitute a waiver of Tenant's default
with respect to such nonpayment by Tenant nor prevent Landlord from exercising any other rights or
remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord the Security Deposit set forth at Section 2.0 upon execution
of this Lease, as security for Tenant's faithful performance of its obligations under this Lease.
Landlord and Tenant agree that the Security Deposit may be commingled with funds of Landlord and
Landlord shall have no obligation or liability for payment of interest on such deposit. Tenant shall not
mortgage, assign, transfer or encumber the Security Deposit without the prior written consent of
Landlord and any attempt by Tenant to do so shall be void, without force or effect and shall not be
binding upon Landlord.
If Tenant fails to pay any Rent or other amount when due and payable under this Lease, or fails to
perform any of the terms hereof, Landlord may appropriate and apply or use all or any portion of the
Security Deposit for Rent payments or any other amount then due and unpaid, for payment of any
amount for which Landlord has become obligated as a result of Tenant's default or breach, and for
any loss or damage sustained by Landlord as a result of Tenant's default or breach, and Landlord
may so apply or use this deposit without prejudice to any other remedy Landlord may have by reason
of Tenant's default or breach. If Landlord so uses any of the Security Deposit, Tenant shall, within
ten (10) days after written demand therefore, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default hereunder and Landlord shall
have the right to exercise any remedy provided for at Article 27 hereof. Within fifteen (15) days after
the Term (or any extension thereof) has expired or Tenant has vacated the Premises, whichever shall
last occur, and provided Tenant is not then in default on any of its obligations hereunder, Landlord
shall return the Security Deposit to Tenant, or, if Tenant has assigned its interest underthis Lease, to
the last assignee of Tenant. If Landlord sells its interest in the Premises, Landlord may deliver this
deposit to the purchaser of Landlord's interest and thereupon be relieved of any further liability or
obligation with respect to the Security Deposit.
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City of Newport Beach •
503 32nd Street #130
8. TENANT'S USE OF THE PREMISES
Tenant shall use the Premises solely for the purposes set forth in Tenant's Use Clause. Tenant shall
not use or occupy the Premises in violation of law or any covenant, condition or restriction affecting
the Building or Project or the certificate of occupancy issued for the Building or Project, and shall,
upon notice from Landlord, immediately discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of law or the certificate of occupancy.
Tenant, at Tenant's own cost and expense, shall comply with all laws, ordinances, regulations, rules,
and /or any directions, of any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant's use or occupancy of the Premises, establish any duty in Tenant or
Landlord with respect to the Premises or its use or occupation. A judgment of any court of competent
jurisdiction or the admission by Tenant in any action or proceeding against Tenant that Tenant has
violated any such laws, ordinances, regulations, rules and /or any directions in the use of the
Premises shall be deemed to be a conclusive determination of that fact as between Landlord and
Tenant. Tenant shall not do or permit to be done anything which will invalidate or increase the cost of
any fire, extended coverage or other insurance policy covering the Building or Project and /or property
located therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance Services Office or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any additional premium charges
for such policy by reason of Tenant's failure to comply with the provisions of this Article. Tenant shall
not do or permit anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or Project, or injure or annoy
them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or upon the Premises.
9. SERVICE AND UTILITIES
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to the Premises during
generally recognized business days, and during hours determined by Landlord in its sole discretion,
and subject to the Rules and Regulations of the Building or Project, reasonable amounts of electricity
for normal lighting by Building Standard overhead fixtures, and for normal desk top office equipment
and normal copying equipment, and heating, ventilation and air conditioning ( "HVAC ") as required in
Landlord's judgment for the comfortable use and occupancy of the Premises and water for lavatory
and drinking purposes. If Tenant desires HVAC at any other time, Landlord shall use reasonable
efforts to furnish such service upon reasonable notice from Tenant and Tenant shall pay Landlord's
charges therefor on demand. Landlord shall also maintain and keep lighted the common stairs,
common entries and restrooms in the Building. Landlord shall not be in default hereunder or be liable
for any damages directly or indirectly resulting from, nor shall the Rent be abated by reason of (i) the
installation, use or interruption of use of any equipment in connection with the furnishing of any of the
foregoing services, (ii) failure to furnish or delay in furnishing any such services where such failure or
delay is caused by accident or any condition or event beyond the reasonable control of Landlord, or
by the making of necessary repairs or improvements to the Premises, Building or Project, or (iii) the
limitation, curtailment or rationing of, or restrictions on, use of water, electricity, gas or anyotherforrm
of energy serving the Premises, Building or Project. The failure of Landlord to provide such services
in accordance with the foregoing shall not constitute a constructive or other eviction of Tenant.
Landlord shall not be liable under any circumstances for a loss of or injury to property or business,
however occurring, through or in connection with or incidental to failure to furnish any such services.
If Tenant uses heat generating machines or equipment in the Premises which affect the temperature
otherwise maintained by the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of installation, operation
and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord.
Tenant shall not, without the written consent of Landlord, which may be refused, consume water or
electric current in excess of, or use any apparatus or device in the Premises (including, without
limitation, electronic data processing machines, punch card machines or machines using in excess of
120 volts) which consumes electricity in excess of, or which will in any way increase the amount of
cooling or ventilation or water to an amount in excess of, that usually furnished or supplied for the use
of Premises as general office space, as determined by Landlord. In the event of consent, Landlord
may have installed a water, electrical current or other meter in the Premises to measure the amount
of water, electric current, or other resource consumed. The cost of any such meter and of its
installation, maintenance and repair shall be paid for by the Tenant and Tenant agrees to pay
Landlord promptly upon demand for all such water, electric current or other resource consumed as
shown by said meters, at the rates charged for such services by the local public utility plus any
additional expense incurred in keeping account of the water and electric current so consumed. If a
separate meter is not installed, the excess cost for such resource shall be established by an estimate
made by a utility company or electrical engineer hired by Landlord at Tenant's expense.
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City of Newport Beach •
503 32nd Street #130
Nothing contained in this Article shall restrict Landlord's right to require at any time separate metering
of utilities furnished to the Premises. In the event utilities are separately metered, Tenant shall pay
promptly upon demand for all utilities consumed at the Premises at utility rates charged by the local
public utility. Tenant shall be responsible for the maintenance and repair of any such meters at its
sole cost.
Landlord shall furnish lighting replacement for building standard lights, restroom supplies, and
exterior window washing in a manner that such services are customarily furnished to comparable
office buildings in the area.
10. CONDITION OF THE PREMISES
Tenant's taking possession of the Premises shall be deemed conclusive evidence that as of the date
of taking possession the Premises are in good order and satisfactory condition, except for such
matters as to which Tenant gave Landlord notice on or before the Commencement Date. No promise
of Landlord to alter, remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to the Premises, Building,
Project or this Lease (including, without limitation, the condition of the Premises, the Building or the
Project) have been made to Tenant by Landlord, other than as may be contained herein or in a
separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE
a. Landlord's Obligations. Landlord shall perform Landlord's Work to the Premises as described in
Exhibit C. Landlord shall maintain in good order, condition and repair the Building and all other
portions of the Premises not the obligation of Tenant or of any other tenant in the Building.
b. Tenant's Obligations.
(1) Tenant shall perform Tenant's Work to the Premises as described in Exhibit C.
(2) Tenant at Tenant's sole expense shall, except for services furnished by Landlord
pursuant to Article 9 hereof, maintain the Premises in good order, condition and repair,
including the interior surfaces of the ceilings, walls and floors, all doors, all interior windows,
all plumbing, pipes and fixtures, electrical wiring, switches and fixtures, Building Standard
furnishings and special items and equipment installed by or at the expense of Tenant.
(3) Tenant shall be responsible for all repairs and alterations in and to the Premises,
Building and Project and the facilities and systems thereof, the need for which arises out of
(i) Tenant's use or occupancy of the Premises, (ii) the installation, removal, use or operation
of Tenant's Property (as defined in Article 13) in the Premises, (iii) the moving of Tenant's
Property into or out of the Building, or (iv) the act, omission, misuse or negligence of Tenant,
its agents, contractors, employees or invitees.
(4) If Tenant fails to maintain the Premises in good order, condition and repair, Landlord
may give Tenant notice to do such acts as are reasonably required to so maintain the
Premises. If Tenant fails to promptly commence such work and diligently prosecute it to
completion, then Landlord shall have the right to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work. Any amount so
expended by Landlord shall be paid by Tenant promptly after demand with interest at the
prime commercial rate then being charged by Bank of America NT & SA plus two percent
(2 %) per annum, from the date of such work, but not to exceed the maximum rate then
allowed by law. Landlord shall have no liability to Tenant for any damage, inconvenience, or
interference with the use of the Premises by Tenant as a result of performing any such work.
c. Compliance with Law. Landlord and Tenant shall each do all acts required to comply with all
applicable laws, ordinances, and rules of any public authority relating to their respective maintenance
obligations as set forth herein.
d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now or hereafter in effect,
which would otherwise afford the Tenant the right to make repairs at Landlord's expense or to
terminate this Lease because of Landlord's failure to keep the Premises in good order, condition and
repair.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to cant', as determined by Landlord
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City of Newport Beach • •
503 32nd Street #130
or Landlord's structural engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid for by Tenant upon demand. Tenant shall not install business machines or
mechanical equipment which cause noise or vibration to such a degree as to be objectionable to
Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall have no liability to Tenant nor
shall Tenant's obligations under this Lease be reduced or abated in any manner whatsoever by
reason of any inconvenience, annoyance, interruption or injury to business arising from Landlord's
making any repairs or changes which Landlord is required by this Lease or by any other tenant's
lease or required by law to make in or to any portion of the Building or the Premises. Landlord shall
nevertheless use reasonable efforts to minimize any interference with Tenant's business in the
Premises.
g. Tenant shall give Landlord prompt notice of any damage to or defective condition in any part or
appurtenance of the Building's mechanical, electrical, plumbing, HVAC or other systems serving,
located in, or passing through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall return the Premises to
Landlord clean and in the same condition as on the date Tenant took possession, except for normal
wear and tear. Any damage to the Premises, including any structural damage, resulting from
Tenant's use or from the removal of Tenant's fixtures, furnishings and equipment pursuant to
Section 13b shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make any additions, alterations or improvements to the Premises without
obtaining the prior written consent of Landlord. Landlord's consent maybe conditioned on Tenant's
removing any such additions, alterations or improvements upon the expiration of the Term and
restoring the Premises to the same condition as on the date Tenant took possession. All work with
respect to any addition, alteration or improvement shall be done in a good and workmanlike manner
by properly qualified and licensed personnel approved by Landlord, and such work shall be diligently
prosecuted to completion. Landlord may, at Landlord's option, require that any such work be
performed by Landlord's contractor, in which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any such work by
Landlord's contractor, an administrative fee of fifteen percent (15 %) of the cost of the work.
(b) Tenant shall pay the costs of any work done on the Premises pursuant to Section 12(a), and
shall keep the Premises, Building and Project free and clear of liens of any kind. Tenant shall
indemnify, defend against and keep Landlord free and harmless from, all liability, loss, damage,
costs, attomeys' fees and any other expense incurred on account of claims by any person performing
work or furnishing materials or supplies for Tenant or any person claiming under Tenant.
(c) Landlord may require, at Landlord's sole option, that Tenant provide to Landlord, at Tenant's
expense, a lien and completion bond in an amount equal to at least one and one -half (1 -1/2) times
the total estimated cost of any additions, alterations or improvements to be made in or to the
Premises, to protect Landlord against any liability for mechanic's and materialmen's liens and to
insure timely completion of the work. Nothing contained in this Section 12 (c) shall relieve Tenant of
its obligation under Section 12(b) to keep the Premises, Building and Project free of all liens.
(d) Unless their removal is required by Landlord as provided in Section 12(a), all additions,
alterations and improvements made to the Premises shall become the property of Landlord and be
surrendered with the Premises upon the expiration of the Term; provided, however, Tenant's
equipment, machinery and trade fixtures which can be removed without damage to the Premises
shall remain the property of Tenant and may be removed, subject to the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY
(a) All fixtures, equipment, improvements and appurtenances attached to or built into the Premises
at the commencement of or during the Term, whether or not by or at the expense of Tenant
( "Leasehold Improvements "), shall be and remain a part of the Premises, and shall be the properly of
Landlord and shall not be removed by Tenant, except as expressly provided in Section 13(b).
(b) All movable partitions, business and trade fixtures, machinery and equipment, communications
equipment and office equipment located in the Premises and acquired by or for the account of
Tenant, without expense to Landlord, which can be removed without structural damage to the
Building, and all furniture, furnishings and other articles of movable personal properly owned by
Tenant and located in the Premises (collectively "Tenant's Property ") shall be and shall remain the
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City of Newport Beach • •
503 32nd Street #130
property of Tenant and may be removed by Tenant at any time during the Term; provided that if any
of Tenant's Property is removed, whether pursuant to this Article or any other provision of this Lease,
Tenant shall promptly, and prior to expiration or termination of this Lease, repair, at Tenant's
expense, any damage to the Premises or to the Building resulting from such removal.
14. RULES AND REGULATIONS
Tenant agrees to comply with (and cause its agents, contractors, employees and invitees to comply
with) the rules and regulations attached hereto as Exhibit "D" and with such reasonable modifications
thereof and additions thereto as Landlord may from time to time make. Landlord shall not be
responsible for any violation of said rules and regulations by other tenants or occupants of the
Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD
Landlord reserves the following rights, exercisable without liability to Tenant for (a) damage or injury
to properly, person or business, (b) causing an actual or constructive eviction from the Premises, or
(c) disturbing Tenant's use or possession of the Premises:
(a) To name the Building and Project and to change the name or street address of the Building or
Project.;
(b) To install and maintain all signs on the exterior and interior of the Building or Project;
(c) To have pass keys to the Premises and all doors within the Premises, excluding Tenant's vaults
and safes;
(d) At any time during the Term, and on reasonable prior notice to Tenant, to inspect the Premises,
and to show the Premises to any prospective purchaser or mortgagee of the Building or to any
assignee of any mortgage on the Building or to others having an interest in the Project or Landlord,
and during the last six months of the Term, to show the Premises to prospective tenants thereof; and
(e) To enter the Premises for the purpose of making inspections, repairs, alterations, additions or
improvements to the Premises or the Building (including, without limitation, checking, calibrating,
adjusting or balancing controls and other parts of the HVAC system), and to take all steps as
necessary or desirable for the safety, protection, maintenance or preservation of the Premises or the
Building or Landlord's interest therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders or requirements of governmental
or other authority. Landlord agrees to use its best efforts (except in any emergency) to minimize
interference with Tenant's business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING
No assignment of this Lease or sublease of all or any part of the Premises shall be permitted, except
as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign this Lease or any interest
herein or sublet the Premises or any part thereof, or permit the use of the Premises by any party
other than Tenant which consent shall not be unreasonably withheld. Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord, terminate this Lease. This
Lease shall not, nor shall any interest of Tenant herein, be assignable by operation of law without the
written consent of Landlord.
b. If at any time or from time to time during the Tenn Tenant desires to assign this Lease or sublet all
or any part of the Premises, Tenant shall give notice to Landlord setting forth the terms and
provisions of the proposed assignment or sublease, and the identity of the proposed assignee or
subtenant. Tenant shall promptly supply Landlord with such information concerning the business
background and financial condition of such proposed assignee or subtenant as Landlord may
reasonably request. Tenant may assign the Lease or sublet such space to such proposed assignee
or subtenant on the following further conditions:
(1) Landlord shall have the right to approve such proposed assignee or subtenant, which
approval shall not be unreasonably withheld;
(2) The assignment or sublease shall be on the same terms set forth in the notice given to
Landlord;
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(3) No assignment or sublease shall be valid and no assignee or sublessee shall take
possession of the Premises until an executed counterpart of such assignment or sublease has been
delivered to Landlord;
(4) No assignee or sublessee shall have a further right to assign or sublet except on the
terms herein contained; and
(5) Any sums or other economic consideration received by Tenant as a result of such
assignment or subletting, however denominated under the assignment or sublease, which exceed, in
the aggregate, (i) the total sums which tenant is obligated to pay Landlord under this Lease (prorated
to reflect obligations allocable to any portion of the Premises subleased), plus (ii) any real estate
brokerage commissions or fees payable in connection with such assignment or subletting, shall be
paid to Landlord as additional rent under this Lease without affecting or reducing any other
obligations of Tenant hereunder.
c. Notwithstanding the provisions of paragraphs a and b above, Tenant may assign this Lease or
sublet the Premises or any portion thereof, without Landlord's consent and without extending any
recapture or termination option to Landlord, to any corporation which controls, is controlled by or is
under common control with Tenant, or to any corporation resulting from a merger or consolidation
with Tenant, or to any person or entity which acquires all the assets of Tenant's business as a going
concern, provided that (i) the assignee or sublessee assumes, in full, the obligations of Tenant under
this Lease, (ii) Tenant remains fully liable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.
d. No subletting or assignment shall release Tenant of Tenant's obligations under this Lease or alter
the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by
Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed
to be a waiver by Landlord of any provision hereof. Consent to one assignment or subletting shall not
be deemed consent to any subsequent assignment or subletting. In the event of default by an
assignee or subtenant of Tenant or any successor of Tenant in the performance of any of the terms
hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to subsequent assignments
of the Lease or sublettings or amendments or modifications to the Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and any such actions shall not relieve Tenant of liability under this Lease.
e. If Tenant assigns the Lease or sublets the Premises or requests the consent of Landlord to any
assignment or subletting or if Tenant requests the consent of Landlord for any act that Tenant
proposes to do, then Tenant shall, upon demand, pay Landlord an administrative fee of One Hundred
Fifty and No /100ths Dollars ($150.00) plus any attorney's fees reasonably incurred by Landlord in
connection with such act or request.
17. HOLDING OVER
If after expiration of the Term, Tenant remains in possession of the Premises with Landlord's
permission (express or implied), Tenant shall become a tenant from month to month only, upon all
the provisions of this Lease (except as to term and Base Rent), but the "Monthly Installments of Base
Rent" payable by Tenant shall be increased to one hundred fifty percent (150 %) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such monthly rent shall
be payable in advance on or before the first day of each month. If either party desires to terminate
such month to month tenancy, it shall give the other party not less than thirty (30) days advance
written notice of the date of termination.
18. SURRENDER OF PREMISES
a. Tenant shall peaceably surrender the Premises to Landlord on the expiration ortermination of this
Lease, in broom -clean condition and in as good condition as when Tenant took possession, except
for (i) reasonable wear and tear, (ii) loss by fire or other casualty, and (ii) loss by condemnation.
Tenant shall, on Landlord's request remove Tenant's Property on or before the Expiration Date and
promptly repair all damage to the Premises or Building caused by such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by process of law or
otherwise, any of Tenant's Property left on the Premises shall be deemed to be abandoned, and, at
Landlord's option, title shall pass to Landlord under this Lease as by a bill of sale. If Landlord elects
to remove all or any part of such Tenant's Property, the cost of removal, including repairing any
damage to the Premises or Building caused by such removal, shall be paid by Tenant. On the
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City of Newport Beach •
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expiration or termination of this Lease Tenant shall surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE
a. If the Premises or the portion of the Building necessary for Tenant's occupancy is damaged by
fire, earthquake, act of God, the elements orother casualty, Landlord shall, subject to the provisions
of this Article, promptly repair the damage, if such repairs can, in Landlord's opinion, be completed
within ninety (90) days. If Landlord determines that repairs can be completed within ninety days, this
Lease shall remain in full force and effect, except that if such damage is not the result of the
negligence or willful misconduct of Tenant or Tenant's agents, employees, contractors, licensees or
invitees, the Base Rent shall be abated to the extent Tenant's use of the Premises is impaired,
commencing with the date of damage and continuing until completion of the repairs required of
Landlord under Section 19d.
b. If in Landlord's opinion, such repairs to the Premises or portion of the Building necessary for
Tenant's occupancy cannot be completed within ninety (90) days, Landlord may elect, upon notice to
Tenant given within thirty (30) days after the date of such fire or other casualty, to repair such
damage, in which event this Lease shall continue in full force and effect, but the Base Rent shall be
partially abated as provided in Section 19a. If Landlord does not so elect to make such repairs, this
Lease shall terminate as of the date of such fire or other casualty.
c. If any other portion of the Building or Project is totally destroyed or damaged to the extent that in
Landlord's opinion repair thereof cannot be completed within ninety (90) days, Landlord may elect
upon notice to Tenant given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and effect, but the Base
Rent shall be partially abated as provided in Section 19a. If Landlord does not elect to make such
repairs, this Lease shall terminate as of the date of such fire or other casualty.
d. If the Premises are to be repaired under this Article, Landlord shall repair at its cost any injury or
damage to the Building and Building Standard Work in the Premises. Tenant shall be responsible at
its sole cost and expense for the repair, restoration and replacement of any other Leasehold
Improvements and Tenant's Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any portion of the Premises,
Building or Project as a result of any damage from fire or other casualty.
e. This Lease shall be considered an express agreement governing any case of damage to or
destruction of the Premises or Building by fire or other casualty, and any present or future law which
purports to govern the rights of Landlord and Tenant in such circumstances in the absence of
express agreement, shall have no application.
20. EMINENT DOMAIN
a. If the whole of the Building or Premises is lawfully taken by condemnation or in any other manner
for any public or quasi - public purpose, this Lease shall terminate as of the date of such taking, and
Rent shall be prorated to such date. If less than the whole of the Building or Premises is so taken,
this Lease shall be unaffected by such taking, provided that (i0 Tenant shall have the right to
terminate this Lease by notice to Landlord given within ninety (90) days afterthe date of such taking if
twenty percent (20 %) or more of the Premises is taken and the remaining area of the Premises is not
reasonably sufficient for Tenant to continue operation of its business, and (ii) Landlord shall have the
right to terminate this Lease by notice to Tenant given within ninety (90) days after the date of such
taking. If either Landlord or Tenant so elects to terminate this Lease, the Lease shall terminate on
the thirtieth (30th) day after either such notice. The Rent shall be prorated to the date of termination.
If this Lease continues in force upon such partial taking, the Base Rent shall be equitably adjusted
according to the remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, all of the proceeds of any award, judgment or
settlement payable by the condemning authority shall be the exclusive property of Landlord, and
Tenant hereby assigns to Landlord all of its right, title and interest in any award, judgment or
settlement from the condemning authority. Tenant, however, shall have the right, to the extent that
Landlord's award is not reduced or prejudiced, to claim from the condemning authority (but not from
Landlord) such compensation as may be recoverable by Tenant in its own right for relocation
expenses and damage to Tenant's personal property.
C. In the event of a partial taking of the Premises which does not result in a termination of this Lease,
Landlord shall restore the remaining portion of the Premises as nearly as practicable to its condition
prior to the condemnation or taking, but only to the extent of Building Standard Work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and replacement of any other
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City of Newport Beach •
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Leasehold Improvements within the Premises and Tenant's Property.
21. INDEMNIFICATION
a. Tenant shall indemnify and hold Landlord harmless against and from liability and claims of any
kind or loss for damage to property of Tenant or any other person, or for any injury to or death of any
person, arising out of: (1) Tenant's use and occupancy of the Premises, or any work, activity or other
things allowed or suffered by Tenant to be done in, on or about the Premises; (2) any breach or
default by Tenant of any of Tenant's obligations under this Lease; or (3) any negligent or otherwise
tortious act or omission of Tenant, its agents, employees, invitees or contractors. Tenant shall at
Tenant's expense, and by counsel satisfactory to Landlord, defend Landlord in any action or
proceeding arising from any such claim and shall indemnify Landlord against all costs, attorneys'
fees, expert witness fees and any other expenses incurred in such action or proceeding. As a
material part of the consideration for Landlord's execution of this Lease, Tenant hereby assumes all
risk of damage or injury to any person or property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which may be sustained by the person or property
of Tenant, its employees, invitees or customers, or any other person in or about the Premises,
caused by or resulting from fire, steam, electricity, gas, water or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, whether such damage or
injury results from conditions arising upon the Premises or upon other portions of the Building or
Project or from other sources. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of the Building or Project.
22. TENANT'S INSURANCE
Tenant is a public entity and is self- insured with respect to general liability and automobile coverage.
Tenant has a self - insured retention limit of $500,000 with excess coverage of $50,000,000. To the
extent that Tenant's excess coverage is decreased below $1,000,000, Tenant shall be required to
obtain general, automobile or excess coverage insurance of at least $1,000,000.
Tenant shall maintain Workers' Compensation Insurance and Employer's Liability Insurance in
accordance with the laws of the State of California and shall provide proof of insurance upon demand
by Landlord.
23. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waive any and all rights of recovery against the other or against
the officers, partners, employees, agents and representatives of the other, on account of loss or
damage of such waiving party or its property, or the property of others under its control to the extent
that such loss or damage is insured against under any fire and extended coverage insurance policy
which either may have in force at the time of such loss or damage. Tenant shall, upon obtaining the
policies of insurance required under this Lease, give notice to its insurance carriers) that the
foregoing mutual waiver of subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT
Upon written request of Landlord, or any first mortgagee or first deed of trust beneficiary of Landlord,
or ground lessor of Landlord, Tenant shall, in writing, subordinate its rights under this Lease to the
lien of any first mortgage or first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However, before signing any
subordination agreement, Tenant shall have the right to obtain from any lender or lessor or Landlord
requesting such subordination, an agreement in writing providing that, as long as Tenant is not in
default hereunder, this Lease shall remain in effect for the full Term. The holder of any security
interest may, upon written notice to Tenant, elect to have this Lease prior to its security interest
regardless of the time of the granting or recording of such security interest.
(b) In the event of any foreclosure sale, transfer in lieu of foreclosure or termination of the lease in
which Landlord is lessee, Tenant shall attom to the purchaser, transferee or lessor as the case may
be, and recognize that party as Landlord under this Lease, provided such party acquires and accepts
the Premises subject to this Lease.
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City of Newport Beach
503 32nd Street #130
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25. TENANT ESTOPPEL CERTIFICATES
Within ten (10) days afterwritten request from Landlord, Tenant shall execute and deliverto Landlord
or Landlord's designee, a written statement certifying (a) that this Lease is unmodified and in full
force and effect, or is in full force and effect as modified and stating the modifications; (b) the amount
of Base Rent and the date to which Base Rent and additional rent have been paid in advance; (c) the
amount of any security deposited with Landlord; and (d) that Landlord is not in default hereunder or, if
Landlord is claimed to be in default. Any such statement may be conclusively relied upon by any
prospective or actual purchaser, assignee, or lender. Tenant's failure to execute and deliver such
statement within the time required shall, at Landlord's election, be a default under this Lease and
shall also be conclusive upon Tenant that: (1) this Lease in full force and effect and has not been
modified except as represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counterclaim or deduction against Rent; and (3)
not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST
If Landlord sells or transfers its interest in the Premises, Building or Project, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations contained in or derived from
this Lease arising out of any act, occurrence or omission relating to the Premises, Building, Project,
or Lease occurring after the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this Lease. If any security
deposit or prepaid Rent has been paid by Tenant, Landlord may transfer the security deposit or
prepaid Rent to Landlord's successor and upon such transfer, Landlord shall be relieved of any and
all further liability with respect thereto.
27. DEFAULT
27.1 Tenant's Default. The occurrence of any one or more of the following events shall constitute a
default and breach of this Lease by Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be paid by Tenant under this
Lease and such failure continues for five (5) days after such payment is due and payable; or
c. If Tenant fails to promptly and fully perform any other covenant, condition or agreement contained
in this Lease and such failure continues for thirty (300 days after written notice thereof from Landlord
to Tenant; or
d. If a writ or attachment or execution is levied on this Lease or on any of Tenant's Property; or
e. If Tenant makes a general assignment for the benefit of creditors, or provides for an
arrangement, composition, extension or adjustment with its creditors; or
f. If Tenant files a voluntary petition for relief or if a petition against Tenant in a proceeding under
the federal bankruptcy laws or other insolvency laws is filed and not withdrawn or dismissed within
forty-five (45) days thereafter, or if under the provisions of any law providing for reorganization or
winding up of corporations, any court of competent jurisdiction assumes jurisdiction, custody or
control of Tenant or any substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of forty -five (45) days; or
g. If any proceeding or action in which Tenant is a parry, a trustee, receiver, agent or custodian is
appointed to take charge of the Premises or Tenant's Property (or has the authority to do so) forthe
purpose of enforcing a lien against the Premises or Tenant's Property; or
h. If Tenant is a partnership or consists of more than one (1) person or entity, if any partner of the
partnership or other person or entity is involved in any of the acts or events described in
subparagraphs d through g above.
27.2 Remedies. In the event of Tenant's default hereunder, then in addition to any other rights or
remedies Landlord may have under any law, Landlord shall have the right, at Landlord's option, w to
do any of the following:
a. Terminate this Lease and Tenant's right to possession of the Premises and reenter the
Premises and take possession thereof, and Tenant shall have no further claim to the Premises or
under this Lease; or
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City of Newport Beach
503 32nd Street #130
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b. Continue this Lease in effect, reenter and occupy the Premises for the account of Tenant, and
collect any unpaid Rent or other charges which have or thereafter become due and payable; or
C. Reenter the Premises under the provisions of subparagraph b, and thereafter elect to terminate
this Lease and Tenant's right to possession of the Premises.
If Landlord reenters the Premises under the provisions of subparagraphs b or c above, Landlord
shall not be deemed to have terminated this Lease or the obligation of Tenant to pay any Rent or
other charges thereafter accruing, unless Landlord notifies Tenant in writing of Landlord's election to
terminate this Lease. In the event of any reentry or retaking of possession by Landlord, Landlord
shall have the right, but not the obligation, to remove all or any part of Tenant's Property in the
Premises and to place such property in storage at a public warehouse at the expense and risk of
Tenant. If Landlord elects to relet the Premises for the account of Tenant, the rent received by
Landlord from such reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of any costs of
such reletting; third, to the payment of the cost of any alterations or repairs to the Premises; fourth to
the payment of Rent due and unpaid hereunder; and the balance, if any, shall be held by Landlord
and applied in payment of future Rent as it becomes due. If that portion of rent received from the
reletting which is applied against the Rent due hereunder is less than the amount of the Rent due,
Tenant shall pay the deficiency to Landlord promptly upon demand by Landlord. Such deficiency
shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as determined,
any costs and expenses incurred by Landlord in connection with such reletting or in making
alterations an repairs to the Premises, which are not covered by the rent received from the reletting.
Should Landlord elect to terminate this Lease under the provisions of subparagraph a or c above,
Landlord may recover as damages from Tenant the following:
1. Past Rent. The worth at the time of the award of any unpaid Rent which had been
earned at the time of termination; plus
2. Rent Prior to Award. The worth at the time of the 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
3. Rent After Award. The worth at the time of award of the amount by which the unpaid
Rent for the balance of the Tenn after the time of award exceeds the amount of the rental
loss that Tenant proves could be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform its obligations under this
Lease orwhich in the ordinary course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses (including attomeys' fees), incurred by Landlord in
(a) retaking possession of the Premises, (b) maintaining the Premises after Tenant's default,
(c) preparing the Premises for reletting to a new tenant, including any repair or alterations,
and (d) reletting the Premises, including broker's commissions.
The 'worth at the time of award" as used in subparagraphs 1 and 2 above, is to be computed by
allowing interest at the rate often percent (10 %) per annum. 'The worth at the time of the award" as
used in subparagraph 3 above, is to be computed by discounting the amount at the discount rate of
the Federal Reserve Bank situated nearest to the Premises at the time of the award plus one percent
(1 %)•
The waiver by Landlord of any breach of any term, covenant or condition of this Lease shall not be
deemed a waiver of such term, covenant or condition or of any subsequent breach of the same or
any other term, covenant or condition. Acceptance of Rent by Landlord subsequent to any breach
hereof shall not be deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at the time of such
acceptance of Rent. Landlord shall not be deemed to have waived any term, covenant or condition
unless Landlord gives Tenant written notice of such waiver.
27.3 Landlord's Default. If Landlord fails to perform any covenant, condition or agreement contained
in this Lease within thirty (30) days after receipt of written notice from Tenant specifying such default,
or if such default cannot reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant for any damages
sustained by Tenant as a result of Landlord's breach; provided, however, it is expressly understood
and agreed that if Tenant obtains a money judgment against Landlord resulting from any default or
other claim arising under this Lease, that judgment shall be satisfied only out of the rents, issues,
profits, and other income actually received on account of Landlord's right, title and interest in the
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City of Newport Beach
503 32nd street #130
Premises, or Building, or Project and no other real, personal or mixed property of Landlord (or of any
of the partners which comprise Landlord, if any) wherever situated, shall be subject to levy to satisfy
such judgment. If, after notice to Landlord of default, Landlord (or any first mortgagee or first deed of
trust beneficiary of Landlord) fails to cure the default as provided herein, then Tenant shall have the
right to cure that default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent or any other charges
due and payable under this Lease except as otherwise specifically provided herein.
28. BROKERAGE FEES
Tenant warrants and represents that it has not dealt with any real estate broker or agent in
connection with this Lease or its negotiation except those noted in Section 2.c. Tenant shall
indemnify and hold Landlord harmless from any cost, expense or liability (including costs of suit and
reasonable attomeys' fees) for any compensation, commission or fees claimed by any other real
estate bmker or agent in connection with this Lease or its negotiation by reason of any act of Tenant.
29. NOTICES
All notices, approvals and demands permitted or required to be given under this Lease shall be in
writing and deemed duly served or given if personally delivered or sent by certified or registered U.S.
mail, postage prepaid, and addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and
to the Building manager, and (b) if to Tenant, to Tenant's Mailing Address; provided, however,
notices to Tenant shall be deemed duly served or given if delivered or mailed to Tenant at the
Premises. Landlord and Tenant may from time to time by written notice to the other designate
another place for receipt of future notices, except that Landlord may in any event use the Premises
as Tenant's address for notice purposes. Notice shall be effective when mailed ordelivered as above
specified.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS
In the event of imposition of federal, state or local govemment controls, rules, regulations, or
restrictions on the use or consumption of energy or other utilities during the Term, both Landlord and
Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and Tenant
of any such controls, the interpretation of Landlord shall prevail, and Landlord shall have the right to
enforce compliance therewith, including the right of entry into the Premises to effect compliance.
31. RELOCATION OF PREMISES
Landlord shall have the right to relocate the Premises to another part of the Building in accordance
with the following:
(a) The new premises shall be substantially the same in size, dimensions, configuration, d6cor and
nature as the Premises described in this Lease, and, if the relocation occurs after the
Commencement Date, shall be placed in that condition by Landlord at its cost.
(b) Landlord shall give Tenant at least thirty (30) days written notice of Landlord's intention to
relocate the Premises.
(c) As nearly as practicable, the physical relocation of the Premises shall take place on a weekend
and shall be completed before the following Monday. If the physical relocation has not been
completed in that time, Base Rent shall abate in full from the time the physical relocation commences
to the time it is completed. Upon completion of such relocation, the new premises shall become the
"Premises" under this Lease.
(d) All reasonable costs incurred by Tenant as a result of the relocation, shall be paid by Landlord.
(e) If the new premises are smaller than the Premises as it existed before the relocation, Base Rent
shall be reduced proportionately.
(f) The parties hereto shall immediately execute an amendment to this Lease setting forth the
relocation of the Premises and the reduction of Base Rent, if any.
32. QUIET ENJOYMENT
Tenant, upon paying the Rent and performing all of its obligations under this Lease, shall peaceably
and quietly enjoy the Premises, subject to the terms of this Lease and to any mortgage, lease, or
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City of Newport Beach • •
503 32nd Street #130
other agreement to which this Lease may be subordinate.
33. OBSERVANCE OF LAW
Tenant shall not use the Premises or permit anything to be done in or about the Premises which will
in anyway conflict with any law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated. Tenant shall, at its sole costand expense, promptly
complywith all laws, statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the
condition, use or occupancy of the Premises, excluding structural changes not related to or affected
by Tenant's improvements or acts. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord is a party thereto or not, that
Tenant has violated any law, ordinance or governmental rule, regulation or requirement, shall be
conclusive of that fact as between Landlord and Tenant.
34. FORCE MAJEURE
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant which is due to
strikes, labor disputes, inability to obtain labor, materials, equipment or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy or
hostile government actions, civil commotion, fire or other casualty, or other causes beyond the
reasonable control of the party obligated to perform hereunder, shall excuse performance of the work
by that party for a period equal to the duration of that prevention, delay or stoppage. Nothing in this
Article 34 shall excuse or delay Tenant's obligation to pay Rent or other charges under this Lease.
35. CURING TENANT'S DEFAULTS
If Tenant defaults in the performance of any of its obligation under this Lease, Landlord may (but
shall not be obligated to) without waiving such default, perform the same for the account at the
expense of Tenant. Tenant shall pay Landlord all costs of such performance promptly upon receipt
of a bill therefor.
36. SIGN CONTROL
Tenant shall not affix, paint, erect or inscribe any sign, projection, awning, signal or advertisementof
any kind to the exterior of the Premises, Building or Project, including without limitation, the inside or
outside of windows or doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission, without being liable to
Tenant by reason of such removal, and to charge the cost of removal to Tenant as additional rent
hereunder, payable within ten (10) days of written demand by Landlord.
37. MISCELLANEOUS
(a) Accord and Satisfaction; Allocation of Payments. No payment by Tenant or receipt by Landlord of
a lesser amount than the Rent provided for in this Lease shall be deemed to be other than on
account of the earliest due Rent, nor shall any endorsement or statement on any check or letter
accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to recoverthe balance of the
Rent or pursue any other remedy provided for in this Lease. In connection with the foregoing,
Landlord shall have the absolute right in its sole discretion to apply any payment received from
Tenant to any account or other payment of Tenant then not current and due or delinquent.
(b) Addenda. If any provision contained in an addendum to this Lease is inconsistent with any other
provision herein, the provision contained in the addendum shall control, unless otherwise provided in
the addendum.
(c) Attomeys' Fees. If any action or proceeding is brought by either party against the other pertaining
to or arising out of this Lease, the finally prevailing party shall be entitled to recover all costs and
expenses, including reasonable attomeys' fees, incurred on an account of such action or proceeding.
(d) Captions, Articles and Section Numbers. The capfions appearing within the body of this Lease
have been inserted as a matter of convenience and for reference only and in no way define, limit or
enlarge the scope or meaning of this Lease. All refereces to Article and Section numbers refer to
Articles and Sections in this Lease.
(e) Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably withhold its
Page 14
City of Newport Beach • •
503 32nd Street #130
consent to changes or amendments to this Lease requested by the lender on Landlord's interest, so
long as these changes do no alter the basic business terms of this Lease or otherwise materially
diminish any rights or materially increase any obligations of the party from whom consent to such
charge or amendment is requested.
(f) Choice of Law; Construction. This Lease shall be construed and enforced in accordance with the
laws of the State.
(g) Consent. Notwithstanding anything contained in this Lease to the contrary, Tenant shall have no
claim, and hereby waives the right to any claim, against Landlord for money damages by reason of
any refusal, withholding or delaying by Landlord of any consent, approval or statement of satisfaction,
and in such event, Tenant's only remedies therefor shall be an action for specific performance,
injunction or declaratory judgment to enforce any right to such consent, etc.
(h) Corporate Authority. If Tenant is a corporation, each individual signing this Lease on behalf of
Tenant represents and warrants that he is duly authorized to execute and deliverthis Lease on behalf
of the corporation, and that this Lease is binding on Tenant in accordance with its terms. Tenant
shall, at Landlord's request, deliver a certified copy of a resolution of its board of directors authorizing
such execution.
(i) Counterparts. This Lease may be executed in multiple counterparts, all of which shall constitute
one and the same Lease.
Q) Execution of Lease; No Option. The submission of this Lease to Tenant shall be for examination
purposes only, and does not and shall not constitute a reservation of or option for Tenant to lease, or
otherwise create any interest of Tenant in the Premises or any other premises within the Building or
Project. Execution of this Lease by Tenant and its return to Landlord shall not be binding on
Landlord, notwithstanding anytime interval, until Landlord has in fact signed and delivered this Lease
to Tenant.
(k) Furnishing of Financial Statements; Tenant's Representations. In order to induce Landlord to
enter into this Lease Tenant agrees that it shall promptly furnish Landlord, from time to time, upon
Landlord's written request, with financial statements reflecting Tenants current financial condition.
Tenant represents and warrants that all financial statements, records and information furnished by
Tenant to Landlord in connection with this Lease are true, correct and complete in all respects.
(1) Further Assurances. The parties agree to promptly sign all documents reasonably requested to
give effect to the provisions of this Lease.
(m) Mortgagee Protection. Tenant agrees to send by certified or registered mail to any first
mortgagee or first deed of trust beneficiary of Landlord whose address has been furnished to Tenant,
a copy of any notice of default served by Tenant on Landlord. If Landlord fails to cure such default
within the time provided for in this Lease, such mortgagee or beneficiary shall have an additional
thirty (30) days to cure such default; provided that if such default cannot reasonably be cured within
that thirty (30) day period, then such mortgagee or beneficiary shall have such additional time to cure
the default as is reasonably necessary under the circumstances.
(n) Prior Agreements, Amendments. This Lease contains all of the agreements of the parties with
respect to any matter covered or mentioned in this Lease, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provisions of this Lease may be
amended or added to except by an agreement in writing signed by the parties or their respective
successors in interest.
(o) Recording. Tenant shall not record this Lease without the prior written consent of Landlord.
Tenant, upon the request of Landlord, shall execute and acknowledge a "short form" memorandum of
this Lease for recording purposes.
(p) Severabifity. A final determination by a court of competent jurisdiction that any provision of this
Lease is invalid shall not affect the validity of any other provision, and any provision so determined to
be invalid shall, to the extent possible, be construed to accomplish its intended effect.
(q) Successors and Assigns. This Lease shall apply to and bind the heirs, personal representatives,
and permitted successors and assigns of the parties.
(r) Time of the Essence. Time is of the essence of this Lease and each and every provision hereof.
(s) Waiver. No delay or omission in the exercise of any right or remedy of Landlord upon any default
by Tenant shall impair such right or remedy or be construed as a waiver of such default.
Page 15
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City of Newport Beach •
503 32nd Street #130
EXHIBIT "A"
[Intentionally Deleted]
Exhibit A, Page 1
0
City of Newport Beach •
503 32nd Street #130
EXHIBIT 'B"
[Intentionally Deleted]
Exhibit B, Page 1
I-
6-1
City of Newport Beach •
503 32nd Street #130
EXHIBIT "C"
Building Standard Work Letter
1. DESCRIPTION OF LANDLORD'S WORK
None. Tenant shall accept the Premises in its current "as -is" condition.
II. DESCRIPTION OF TENANT'S WORK
Tenant shall, at Tenant's sole cost and expense, perform all work in the Premises and install
such furniture, trade fixtures and equipment as Tenant deems necessary for the operation of
Tenant's business from the Premises (collectively, "Tenant's Work "). To the extent Tenant's
Work constitutes alterations which require the consent of Landlord pursuant to Section 12 of the
Lease, such Tenant's Work shall be performed in accordance with plans and specifications
therefor which shall be subject to Landlord's prior written approval (which approval shall not be
unreasonably withheld or delayed). All Tenant's Work shall be performed in a good and
workmanlike manner and in accordance with all applicable laws.
Exhibit C, Page 1
City of Newport Beach
503 32nd Street #130
EXHIBIT D
Rules and Regulations
0
1. No sign, placard, picture, advertisement, name or notice shall be inscribed, displayed or
printed or affixed on or to any part of the outside or inside of the building without the written
consent of Landlord first had and obtained and Landlord shall have the right to remove and
destroy any such sign, placard, picture, advertisement, name or notice without notice to and at
the expense of Tenant.
All approved signs or lettering on doors shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person approved of by the Landlord
Tenant shall not place anything or allow anything to be placed near the glass of any window,
door, partition or wall which may appear unsightly from outside of the Premises, provided,
however, that the Landlord may furnish and install a Building standard window covering at all
exterior windows. Tenant shall not, without prior written consent of Landlord, cause to be
installed or otherwise install sunscreen on any window.
2. The sidewalks, halls passages, exits, entrances, elevators and stairways, driveways, and
parking areas shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional locks or bolts on any doors
or windows of the Premises, without prior written consent of Landlord and subsequent delivery of
a duplicate key to Landlord.
4. 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 of any kind
whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage
resulting from the violation of this rule shall be bome by the Tenant who, or whose employees or
invitees, shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface the Premises or
any part thereof.
6. Tenant shall not use, keep or permit to be used or kept any foul or noxious gas or
substances in the Premises, or permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to the Landlord or other occupants of the Building by reason
of noise, odors and /or vibrations, or interfere in any way with other tenants or those having
business therein, nor shall any animals or birds be brought in or kept in or about the Premises or
the Building.
7. No cooking, except for a coffee machine and microwave, shall be done or permitted by
any Tenant on the Premises, nor shall the Premises be used for washing clothes for lodging, or
for any improper, objectionable or immoral purposes.
8. Tenant shall not keep in the Premises or the Building any kerosene, gasoline or
inflammable or combustible fluid or material, or use any method of heating or air conditioning
other than that supplied or approved in writing by the Landlord.
9. Landlord will direct electricians as to where and how telephone and telegraph wires are
to be introduced. No boring or cutting for wire will be allowed without the consent of the
Landlord. The locations of the telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord.
10. Landlord reserves the right to exclude or expel from the Building any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any
manner does any act in violation of any of the rules and regulations of the Building.
11. Tenant shall not disturb, solicit, or canvass any occupant of the Building and shall
cooperate to prevent same.
12. Without the written consent of Landlord, Tenant shall not use the name of the Building in
connection with or in promoting or advertising the business of Tenant, except as Tenant's
address.
13. Landlord shall have the right to control and operate the public portions of the Building,
and the public facilities, and heating and conditioning, as well as facilities furnished for the
common use of the tenants in such manner as it deems best for the benefit of the tenants
Exhibit D, Page 1
City of Newport Beach
503 32nd Street #130
generally.
40
14. All garbage and refuse shall be placed by Tenant in the containers at the location
prepared by Landlord for refuse collection, in the manner and at the times and places specified
by Landlord. Tenant shall not bum any trash or garbage of any kind in or about the Premises of
the Building. All cardboard boxes must be "broken down" prior to being placed in the trash
container. All styrofoam chips must be bagged or otherwise contained prior to placement in the
trash container, so as not to constitute a nuisance. Pallets may not be disposed of in the trash
bins or enclosures. It is the Tenant's responsibility to dispose of pallets by alternative means.
Should any garbage or refuse not be deposited in the manner specified by Landlord, Landlord,
may, after three (3) hours verbal notice to Tenant, take whatever action necessary to correct the
infracture at Tenant's expense.
15. No aerial antenna shall be erected on the roof or exterior walls of the Premises, or on the
grounds, without in each instance, obtaining written consent of Landlord. Any aerial or antenna
so installed without such written consent shall be subject to removal by Landlord at any time
without notice.
16. No loud speakers, televisions, phonographs, radios or other devices shall be used in a
manner so as to be heard or seen outside of the Premises or in neighboring space without the
prior written consent of Landlord.
17. The outside areas immediately adjoining the Leased Premises shall be kept clean and
free from dirt and rubbish by the Tenant to the satisfaction of the Landlord, and Tenant shall not
place or permit any obstruction or materials in such areas. No exterior storage shall be allowed.
18. Tenant shall use at Tenant's cost such pest extermination contractor as Landlord may
direct and at such intervals as Landlord may require.
Tenant agrees to comply with all such rules and regulations at all times. Should Tenant not
abide by these Rules and Regulations, landlord may serve a three (3) day notice to correct
deficiencies. If Tenant has not corrected deficiencies by the end of the notice period, Tenant will
be in default of the Lease.
Landlord reserves the right to amend or supplement the foregoing rules and regulations and to
adopt and promulgate additional rules and regulations applicable to the Premises. Notice of such
rules and regulations and amendments and supplements thereto, if any shall be given to the
Tenant.
Exhibit D, Page 2
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City of Newport Beach •
503 32nd Street #130
ADDENDUM TO LEASE
ADDENDUM TO OFFICE BUILDING LEASE DATED 20fBY AND
BETWEEN 503 32ND STREET LLC, A CALIFORNIA LIMITED IABILITY COMPANY, AS
LANDLORD AND THE CITY OF NEWPORT BEACH, AS TENANT ( "ADDENDUM ") FOR THE
OFFICE SPACE LOCATED AT 503 32ND STREET SUITE 130, NEWPORT BEACH, CA
92663,
THIS ADDENDUM IS INTENDED TO MODIFY, AND WHERE APPLICABLE TO SUPERSEDE
AND OTHERWISE TAKE PREDECENCE OVER, THE TERMS AND PROVISIONS OF THE
OFFICE BUILDING LEASE TO WHICH IT IS ATTACHED AND MADE A PART OF FOR ALL
PURPOSES BY THIS REFERENCE.
1. Option to Extend. Tenant shall have the option to extend the Term of this Lease (the
"Renewal Option ") on the same terms and conditions (except as set forth herein) for two (2)
consecutive periods of two (2) years each (the "Option Term(s) "), commencing on June 1, 2010 and
continuing through May 31, 2012 (the "First Option Term "); and commencing on June 1, 2012 and
continuing through May 31, 2014 (the "Second Option Term ") as follows:
a. Tenant shall exercise each Renewal Option by written notice given to
Landlord in accordance with Section 29 not less than one hundred twenty (120) days prior to the
expiration of the then current Term;
b. Tenant shall not have the right to exercise a Renewal Option if it is has at any
time been in Default (as defined in Section 27) of any of the terms and provisions of this Lease;
C. Any exercise of an Option shall be null and void and of no force and effect if
as of the last day of the then current Term prior to the commencement of the applicable Option
Term Tenant is in Default of any of the terms and provisions of the Lease to be performed by
Tenant;
d. The Options granted herein shall be null and void and of no force or effect if
Tenant shall not be the occupant of the Premises on the date that the Renewal Option is exercised,
or on the last day of the then current Tenn prior to the commencement of the Option Term, if the
Renewal Option applicable thereto has been previously exercised;
e. The Options set forth herein are personal to The City of Newport Beach
( "Original Tenant ") and may be exercised only so long as the Original Tenant occupies the Premises
without assigning this Lease or subletting the Premises or any part thereof;
Tenant shall have no further Option(s) to extend the Term of the Lease;
g. If more than one (1) Option is granted, Tenant shall have no right to exercise
any Option unless each preceding Option has been exercised in accordance with the terms and
provisions hereof and has not been made null and void, as it is intended that the Options shall be for
consecutive periods only.
h. The Base Rent in each of the First Option Term, and the Second Option
Term, shall be as follows:
First Option Term: Twenty Eight Thousand Six Hundred Forty Four and 00/100 Dollars
($28,644.00) per annum, payable in installments of Two Thousand Three Hundred Eighty Seven
and 00/100 Dollars ($2,387.00) per month commencing on June 1, 2010 and continuing through
May 31, 2011; then Twenty Nine Thousand Five Hundred Eight and 00 /100 Dollars ($29,508.00)
per annum, payable in installments of Two Thousand Four Hundred Fifty Nine and 00/100
Dollars ($2,459.00) per month, commencing on June 1, 2011 and continuing through the
remainder of the First Option Term.
Second Option Term: Thirty Thousand Three Hundred Ninety Six and 00/100 Dollars
($30,396.00) per annum, payable in monthly installments of Two Thousand Five Hundred Thirty
Three and 00/100 Dollars ($2,533.00) per month commencing on June 1, 2012 and continuing
through May 31, 2013; then Thirty One Thousand Three Hundred Eight and 00 /100 Dollars
($31,308.00) per annum, payable in monthly installments of Two Thousand Six Hundred Nine
and 00/100 Dollars ($2,609.00) per month commencing on June 1, 2013 and continuing through
the remainder of the Second Option Tenn.
2. Utilities/Janitodal Services.
Addendum to Lease, Page 1
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CITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 16
May 13, 2008
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Planning Department
Leigh M. De Santis, Economic Development Administrator, 949 -644 -3207,
Idesantis@ci.newport-beach.ca.us
SUBJECT: Lease with Jakosky Properties for City Office Space at 503 32 "d
Street
ISSUE:
There is not enough space to accommodate additional staff approved by the City
Council for the Building Department and implementation of the group residential
ordinance in City Hall or the on -site trailers. Should the City approve the attached lease
for 750 square feet of office space off site?
RECOMMENDATION:
1. Approve the attached lease with Jakosky Properties for an office suite at 503 32nd
Street and authorize the City Manager and City Clerk to sign the lease.
2. Approve a budget amendment transferring $21,560 for computer equipment and
office furniture from unappropriated general fund reserve to Code and Water Quality
Enforcement and Building Department capital outlay accounts.
3. Appropriate $29,468 from unappropriated fund balance in fiscal year 2008 -09 for
rent and utilities, with $14,734 to the Building Department and $14,734 to Code and
Water Quality Enforcement.
DISCUSSION:
There is not adequate space for additional staff in City Hall or the on -site trailers. There
is an immediate need for space for two building plan check engineers approved by the
City Council on December 11, 2007, as well as part-time staff and consultants approved
to work on implementation of the group residential ordinance.
tease with Jakosky Properties for City A Space at 503 32nd Street
May 13, 2008
Page 2
Staff has found available office space at 503 32nd Street, which is just across Via Oporto
from the Fire Station and is a two minute walk from City Hall. The available office suite
will provide four office spaces. It will be relatively inexpensive and easy to provide
computer and telephone linkage to the City Hall systems at this location.
The proposed lease is for two years with two, two -year options. During the second two -
year option, the lease may be terminated by the City with one hundred twenty (120)
days notice. The starting lease rate is $3.00 per square foot plus utilities and a portion
of the property tax. A survey of other vacant properties in the City Hall area confirms
that $3.00 per square foot is the market rate. The rent escalates 3% annually on its
anniversary during the initial term and both options. The first year of the lease is $2,250
per month for a twelve month total of $27,000. The second year will be $2,318 per
month for a twelve month total of $27,816. The lease includes two parking spaces
among those exclusive to 503 32nd Street in the parking lot between City Hall and the
503 building. It also contains a one -time right of first refusal for another ground floor
office suite in the 503 building should it become available. The City may take
possession of the property on May 15, 2008, and rent will begin on June 1.
In addition to the rent, the City will need to spend money to furnish the offices. Two
existing work stations will accommodate the group residential staff, but they will need
chairs and computer equipment. Desks, chairs and bookcases are needed for the
engineers, but computer equipment for this staff was included in the budget amendment
approved when these positions were authorized in December. Finally, an IT network
connection to City Hall systems is needed. These items are estimated to have a one-
time cost of $21,560, as detailed on the attached estimate sheet.
ENVIRONMENTAL REVIEW:
Entering into a lease is not a project as defined by CEQA.
FUNDING AVAILABILITY:
One month's rent and utilities ($2,250 and approximately $200, respectively) needs to
be paid from the current fiscal year budget. Sufficient funds are available in the Building
Department Maintenance and Repair account, 2920 -8030; the recommended budget
amendment transfers these funds to account 2910 -8070 Rental Property and
Equipment. A budget amendment is also required for furniture and computer
equipment, transferring $21,560 from unappropriated general fund reserve to the
following capital outlay accounts:
CodeNVater Quality Enforcement Office Equipment 0330 -9000 $8,980
Building Computer Equipment 2910 -9010 4,780
Building Office Furniture 2910 -9400 7,800
I
Ose with Jakosky Properties for City 00 Space at 503 32nd Street
May 13, 2008
Page 3
Staff is recommending that funds be appropriated to the 2008 -09 Building Department
and Code and Water Quality Enforcement budgets for rent and utilities during next fiscal
year. Eleven months of rent will be at the rate of $2,250 and one month will be at the
rate of $2,318. The utilities estimate is $200 per month. Total funds needed for 2008-
09 are $29,468.
ALTERNATIVES:
Alternatives to leasing office space off site include adding a trailer to the City Hall
campus, asking group residential staff to work from home or other offices of their own,
and delaying filling plan check engineer positions.
Prepared by:
L4ighak De Santis,
Economic Development Administrator
Attachments: 1. Lease
2. Estimate
3. Budget Amendment
Submitted by:
Sharon Wood,
Assistant City Manager
0 •
32 "d Street Estimate
Item Number Cost
Code Enforcement
Computers, printers, monitors, screens
(2) x $1,700 =
$ 3,400
Chairs, office
(2) x $4,00 =
800
Sub Total:
$ 4,200
Building
Desks
(2)
$ 5,000
Chairs, office
(2) x $400 =
800
Book cases, 4 shelves each
(2) x $400 =
800
Guest chairs
(3) x $200 =
600
Plan baskets (wire)
(6) x $100 =
600
Sub Total:
$ 7,800
IT Network Installation (shared by Building and Code Enforcement) 9,560
Grand Total:
$ 2A.
FaisaR2008132nO St. estimate 42508
City of Newport Bea
503 32nd Street 41
OFFICE BUILDING LEASE
LJ
This Lease between 503 32nd Street LLC, a California limited liability company ("Landlord"),
and The City of Newport Beach, ("Tenanr), is dated 20_
1. LEASE OF PREMISES
In consideration of the Rent (as defined at Section 5.4) and the provisions of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises described in Section 2(1) below.
The Premises are located within the Building and Project described in Section 2m. Tenant shall
have the non - exclusive right (unless otherwise provided herein) in common with Landlord, other
tenants, subtenants and Invitees, to use the Common Areas (as defined at Section 2e).
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
(a) Base Rent (rndial term): Twenty Seven Thousand and 001100 Dollars ($27,000.00) per year,
payable in monthly installments of Two Thousand Two Hundred Fifty and 0Qf100 Dollars ($2,250.00)
per month commencing on June 1, 2008 and continuing through May 31, 2009; then Twenty Seven
Thousand Eight Hundred Sixteen and 001100 Dollars ($27,816.00) per year, payable in monthly
installments of Two Thousand Three Hundred Eighteen and 00/100 Dollars ($2,318.00) per month
commencing on June 1, 2009 and continuing through the Expiration Date of the Initial term.
(b) Base Year [Not applicable]
(c) Broker(s)
Landlord's: None
Tenant's: None
(d) Commencement Date: June 1, 2008
(e) Common Areas: The Building lobbies, common corridors and hallways, restrooms, parking
auras, stairways, and othergeneraly understood public or common areas. Landlord shall have the
right to regulate or restrict the use of the Common Areas.
(f) Expense Stop: [Not applicable]
(g) Expiration Date: May 31, 2010, unless otherwise sooner terminated in accordance with the
provisions of this Lease.
(h) Index (Section 5.2): [Not Applicable]
(i) Landlord's Mailing Address:
Tenant's Mailing Address:
503 32nd Street LLC
Attn: Jack Jakosky
503 32nd Street Suite #200
Newport Beach, CA 92663
City of Newport Beach
Attn: City Manager
3300 Newport Blvd.
Newport Beach, CA 92663
0) Monthly Installments of Base Rent (initial term): See paragraph 2(a) above
(k) Parking: Tenant shall be permitted to park two (2) cars on a non -exclusive basis in the
area(s) designated by Landlord for parking. Tenant shall abide by any and all parking
regulations and rules established from time to time by Landlord or Landlord's parking operator.
Landlord reserves the right to separately charge Tenant's guests and visitors for parking.
(1) Premises: that portion of the Building containing approximately Seven Hundred Fifty (750)
square feet of Rentable Area, located on the 1 st floor of the Building and known as Suite 130.
Page 1
5
City of Newport Bea
503 32nd Street #130
•
(m) Project the building of which the Premises are a part (the 'Building") and any otter
buildings or improvements on the real property (the 'Property') located at 503 32nd Street,
Newport Beach, California 92803.
(n) Rentable Area: as to both the Premises and the Project the respective measurements of
floor area as may from time to time be subject to lease by Tenant and all tenants of the Project,
respectively, as determined by Landlord and applied on a consistent basis throughout the
Project
(o) Security Deposit None
(p) State: the state of California
(q) intentionally Deleted
(r) Intentionally Deleted.
(s) Tenants Use Clause (Article 8} Tenant shall use the Premises for general office purposes
(excluding medical, dental or similar office uses) and for no other purpose without the prior
written consent of Landlord, which Landlord may withhold In ifs sole discretion.
(t) Term: the period commencing on June 1, 2008 and expiring on May 31, 2010.
3. EXHIBITS AND ADDENDA
The exhibits and addenda listed below are incorporated by reference in this Lease:
a. Exhibit "A" - [Intentionally Deleted]
b. Exhibit B" -(Intentionally Deleted]
c. Exhibit *C" - Building Standard Work Letter
d. Exhibit "D" - Rules and Regulations
e. Exhibit "E" - [Intentionally Deleted]
f. Addendum to Lease
4. DELIVERY OF POSSESSION
If for any reason Landlord does not deliver possession of the Premises to Tenant on the
Commencement Date, Landlord shall not be subject to any liability for such failure, the Expiration
Date shall not change and the validity of this Lease shall not be impaired, but Rent shat be abated
until delivery of possession. "Delivery of possession" shallbe deemed to occur on the date Landlord
completes Landlord's Work as defined inExhibit"C'. Landlord shall permit Tenant to enter upon the
Premises beginning May 14, 2008 for the purpose of making tenant improvements prior to the
Commencement Date. Such possession shall be subject to the provisions of this Lease exceptthat
no Rent shall accrue unit the Commencement Date.
S. RENT
5.1 Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises. Monthly
Installments of Base Rent shat be payable in advance on the first day of each calendar month of the
Term. If the Tenn begins (or ends) on other than the first (or last) day of a calendar month, the Base
Rent for the partial month shall be prorated on a per diem basis. Tenant shat pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.
5.2 [Intentionally Deleted]
5.3 [Intentionally Deleted]
5.4 Definition of Rent. All costs and expenses which Tenant assumes or agrees to pay to Landlord
under this Lease shall be deemed additional rent (which, together with the Base Rent is sometimes
referred to as the "Rene). The Rent shall be paid to the Building manager (or other person) and at
such place, as Landlord may from time to time designate in writing, without any prior demand
therefore and without deduction or offset, in lawful money of the United States of America
5.5 Rent Control. If the amount of Rent or any other payment due under this Lease violates the terms
of any governmental restrictions on such Rent or payment, then the Rent or payment due during the
period of such restrictions shat be the maximum amount allowable under those restrictions. Upon
Page 2
City of Newport Beo •
50332nd Street #1
termination of the restrictions, Landlord shall, to the extent it is fegaly permitted, recoverfrom Tenant
the difference between the amounts received during the period of the restrictions and the amounts
Landlord would have received had there been no restrictions.
5.6 Taxes Payable by Tenant. In addition to the Rent and any other charges be paid by Tenant
hereunder, Tenant shall reimburse Landlord upon demand forany and all taxes payable by Landlord
(other than net income taxes) which are nototherwise reimbursable under this Lease, whetherornot
now customary or within the contemplation of the parties, where such taxes are based upon,
measured by or reasonably attributable to (a) the cost or value of Tenant's equipment furniture,
fixtures and other personal property located in the Premises, or the cost of value of any leasehold
improvements made in or to the Premises by orfor Tenant, other than Building Standard Work made
by Landlord, regardless of whether title to such improvements, alterations, or additions is held by
Tenant or Landlord; (b) the gross or net Rent payable under this Lease, including, without limitation,
any rental or gross receipts tax levied by any taxing authority with respect to the receipt of Rent
hereunder, (c) the possession, leasing, operation, management maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion thereof; or (d) this transaction or any
document to which Tenant Is a party creating or transferring an Interest or an estate in the Premises.
If it becomes unlawful for Tenant to reimburse Landlord for any costs as required under this Lease,
the Base Rent shall be revised to net Rent after imposition of any tax or other charge upon Landlord
as would have been payable to Landlord but for the reimbursement being unlawful.
6. INTEREST AND LATE CHARGES
If Tenant fails to pay when due any Rent or other amounts or charges which Tenant is obligated to
pay under the terms of this Lease, the unpaid amounts shall bear interest at the maximum rate then
allowed by law. Tenant acknowledges that the late payment of any monthly installment of Base Rent
will cause Landlord to lose the use of that money and incur costs and expenses not contemplated
under this Lease, including, without limitation, administrative and collection costs and processing and
accounting expenses, the exact amount of which is extremely difficult to ascertain. Therefore, in
addition to interest, if any such installment is not received by Landlord within ten (10) days from the
date it is due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of such installment
Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the loss suffered from such nonpayment by
Tenant Acceptance of any interest or late charge shalt not constitute a waiver of Tenant's default
with respect to such nonpayment by Tenant nor prevent Landlord from exercising any other rights or
remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord the Security Deposit set forth at Section 2.0 upon execution
of this Lease, as security for Tenant's faithful performance of its obligations under this Lease.
Landlord and Tenant agree that the Security Deposit may be commingled with funds of Landlord and
Landlord shall have no obligation or liability for payment of interest on such deposit Tenant shall not
mortgage, assign, transfer or encumber the Security Deposit without the prior written consent of
Landlord and any attempt by Tenant to do so shall be void, without force or effect and shall not be
binding upon Landlord.
If Tenant fails to pay any Rent or other amount when due and payable under this Lease, or fats to
perform any of the terns hereof, Landlord may appropriate and apply or use all or any portion of the
Security Deposit for Rent payments or any other amount then due and unpaid, for payment of any
amount for which Landlord has become obligated as a result of Tenant's default or breach, and for
any loss or damage sustained by Landlord as a result of Tenant's default or breach, and Landlord
may so apply or use this deposit without prejudice to any other remedy Landlord may have by reason
of Tenant's default or breach. If landlord so uses any of the Security Deposit Tenant shall, within
ten (10) days after written demand therefore, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default hereunder and Landlord shall
have the right to exercise any remedy provided for at Article 27 hereof. Within fifteen (15) days after
the Term (or any extension thereof) has expired or Tenant has vacated the Premises, whichever shall
last occur, and provided Tenant is not then in default on any of its obligations hereunder. Landlord
shall return the Security Deposit to Tenant, or, if Tenant has assigned its interest under this Lease, to
the last assignee of Tenant If Landlord sells its interest in the Premises, Landlord may deliver this
deposit to the purchaser of Landlord's interest and thereupon be relieved of any further liability or
obligation with respect to the Security Deposit
Page 3
7
CRY of Newport See
503 32nd Street #130
S. TENANTS USE OF THE PREMISES
•
Tenant shall use the premises solely for the purposes set forth in Tenant's Use Clause. Tenant shall
not use or occupy the Premises In violation of law or any covenant, condition or restriction affecting
the Building or Project or the cerfificate of occupancy issued for the Building or Project, and shat,
upon notice from Landlord, immediately discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of law orthe certificate of occupancy.
Tenant, at Tenants own cost and expanse, shall comply with at laws, ordinances, regulations, rules,
and/or any directions, of any governmental agencies orauthoddes having jurisdiction which shall, by
reason of the nature of Tenard"s use or occupancy of the Premises, establish any duty in Tenant or
Landlord with respect to the Premises or Its use or occupation. A judgment of any court of competent
jurisdiction or the admission by Tenant in any action or proceeding against Tenant that Tenant has
violated any such laws, ordinances, regulations, rules and/or any directions in the use of the
Premises shall be deemed to be a conclusive determination of that fact as between Landlord and
Tenant Tenant shall not do or permit to be done anything which will Invalidate or increase the cost of
any fire, extended coverage or other Insurance policy covering the Bung or Project and/or property
located therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance Services Office or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any additional premium changes
for such policy by reason ofTenanrs failure to comply with the provisions of this Article. Tenant shall
not do or permit anything to be done in or about the Premises which will in anyway obstruct or
interfere with the rights of other tenants or occupants of the Building or Project, or injure or annoy
them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or upon the Premises.
9. SERVICE AND UTILITIES
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to the Premises during
generally recognized business days, and during hours determined by Landlord in its sole discretion,
and subject to the Rules and Regulations of the Building or Project, reasonable amounts of electricity
for normal lighting by Building Standard overhead fixtures, and for normal desk top office equipment
and normal copying equipment, and heating, ventilation and air conditioning ( "HVAC ") as required in
Landlord's judgment for the comfortable use and occupancy of the Premises and water for lavatory
and drinking purposes. If Tenant desires HVAC at any other time, Landlord shall use reasonable
efforts to furnish such service upon reasonable notice from Tenant and Tenant shat pay Landlord's
charges therefor on demand. Landlord shall also maintain and keep lighted the common stairs,
common entries and restrooms in the Building. Landlord shall not be in default hereunderor be liable
for any damages directly or indirectly resulting from, nor shall the Rent be abated by reason of (i) the
installation, use or Interruption of use of any equipment in connection with the furnishing of any of the
foregoing services, (di) failure to furnish or delay in furnishing any such services where such failure or
delay is caused by accident or any condition or event beyond the reasonable control of Landlord, or
by the making of necessary repairs or improvements to the Premises, Building or Project, or (iii) the
limitation, curtailment or rationing of, or restrictions on, use of water, electricity, gas or any other form
of energy serving the Premises, Building or Project. The failure of Landlord to provide such services
in accordance with the foregoing shall not consttute a constructive or other eviction of Tenant
Landlord shall not be Gable under any circumstances for a loss of or injury to property or business,
however occurring, through or in connection with or incidental to failure to furnish any such services,
If Tenant uses heat generating machines or equipment in the Premises which affect the temperature
otherwise maintained by the HVAC system, Landlord reserves the right to Install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of installation, operation
and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord.
Tenant shall not without the written consent of Landlord, which may be refused, consume water or
electric current in excess of, or use any apparatus or device in the Premises (including, without
limitation, electronic data processing machines, punch card machines or machines using In excess of
120 volts) which consumes electricity in excess of, or which will in any way increase the amount of
cooling or ventilation or water to an amount in excess of, that usually furnished or supplied for the use
of Premises as general office space, as determined by Landlord, in the event of consent, Landlord
may have installed a water, electrical current or other meter in the Premises to measure the amount .
of water, electric current, or other resource consumed. The coat of any such meter and of is
installation, maintenance and repair shall be paid for by the Tenant and Tenant agrees to pay
Landlord promptly upon demand for all such water, electric current or other resource consumed as
shown by said meters, at the rates charged for such services by the local public utility plus any
additional expense incurred in keeping account of the water and electric current so consumed. If a
separate meter is not installed, the excess cost for such resource shat be established by an estimate
made by a utility company or electrical engineer hired by Landlord at Tenant's expense.
Page 4
city M Newport Bee* •
50332nd Street #i
Nothing contained in this Article shah restrict Landlord's Oghtto require at anytime separate metering
of utilities furnished to the Premises. In the event utilities are separately metered, Tenant shall pay
promptly upon demand for all utilities consumed at the Premises at utility rates charged by the local
public utility. Tenant shall be responsible for the maintenance and repair of any such meters at its
sole cost
Landlord shall furnish lighting replacement for building standard lights, restroom supplies, and
exterior window washing in a manner that such services are customarily furnished to comparable
office buildings in the area.
19. CONDITION OF THE PREMISES
Tenants taking possession of the Premises shall be deemed conclusive evidence that as of the date
of taking possession the Premises are in good order and satisfactory condition, except for such
matters as to which Tenant gave Landlord notice on or before the Commencement Date. No promise
of Landlord to alter, remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to the Premises, Building,
Project or this Lease (including, without limitation, the condition of the Premises, the Building or the
Project) have been made to Tenant by Landlord, other than as may be contained herein or in a
separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE
a. Landlord's Obligations. Landlord shall perform Landlord's Work to the Premises as described in
Exhibit C. Landlord shall maintain in good order, condition and repair the Building and all other
portions of the Premises not the obligation of Tenant or of any other tenant in the Building.
b. Tenant's Obligations.
(1) Tenant shall perform Tenants Work to the Premises as described in Exhibit C.
(2) Tenant at Tenant's sole expense shall, except for services furnished by Landlord
pursuant to Article 9 hereof, maintain the Premises in good order, condition and repair,
including the interior surfaces of the ceilings, walls and Floors, all doors, all interior windows,
all plumbing, pipes and fixtures, electrical wiring, switches and fixtures, Building Standard
furnishings and special items and equipment installed by or at the expense of Tenant
(3) Tenant shall be responsible for all repairs and alterations in and to the Premises,
Building and Project and the facalities and systems thereof, the need for which arises out of
(i) Tenant's use or occupancy of the Premises, (ii) the installation, removal, use or operation
of Tenant's Property (as defined in Article 13) in the Premises, (iii) the moving of Tenant's
Property into or out of the Building, or (iv) the act, omission, misuse or negligence of Tenant,
its agents, contractors, employees or invitees.
(4) If Tenant fails to maintain the Premises in good order, condition and repair, Landlord
may give Tenant notice to do such acts as are reasonably required to so maintain the
Premises. If Tenant fails to promptly commence such work and diligently prosecute it to
completion, then Landlord shall have the right to do such acts and expend such funds at the
expense of Tenant as are reasonably required to perform such work. Any amount so
expended by Landlord shall be paid by Tenant promptly after demand with interest at the
prime commercial rate then being charged by Bank of America NT & SA plus two percent
(2ek) per annum, from the date of such work, but not to exceed the maximum rate then
allowed by law. Landlord shall have no liability to Tenant for any damage, inconvenience, or
interference with the use of the Premises by Tenant as a result of performing any such work.
c. Compliance with Law. Landlord and Tenant shall each do all acts required to comply with all
applicable laws, ordinances, and rules of any publicauthorl"ating to their respective maintenance
obligations as set forth herein.
d. Waiver by Tenant. Tenant expressly waives the benefits of any statute now or hereafter in effect,
which would otherwise afford the Tenant the right to make repairs at Landlord's expense or to
terminate this Lease because of Landlord's failure to keep the Premises in good order, condition and
repair.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor of the Premises which
exceeds the bad per square foot which such floor was designed to carry, as determined by Landlord
Page 5
City of Newport aeao* •
503 32nd Street #S30
or Landlord's structural engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid for by Tenant upon demand. Tenant shall not install business machines or
mechanical equipment which cause noise or vibration to such a degree as to be objectionable to
Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall have no liabiftyto Tenant nor
shall Tenant's obligations under this Lease be reduced or abated in any manner whatsoever by
reason of any inconvenience, annoyance, Interruption or injury to business arising from Landlord's
making any repairs or changes which Landlord Is required by this Lease or by any other tenant's
lease or required by taw to make in or to any portion of the Building or the Premises. Landlord shall
nevertheless use reasonable efforts to minimize any interference with Tenant's business in the
Premises.
g. Tenant shall give Landlord prompt notice of any damage to or defective condition in any part or
appurtenance of the Building's mechanical, electrical, plumbing, HVAC or other systems serving,
located in, or passing through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall return the Premises to
Landlord clean and in the same condition as on the date Tenant took possession, except for normal
wear and tear. Any damage to the Premises, including any structural damage, resulting from
Tenant's use or from the removal of Tenant's fodures, furnishings and equipment pursuant to
Section 13b shall be gained by Tenant at Tenants expense.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make any additions, alterations or improvements to the Premises without
obtaining the prior written consent of Landlord, Landlord's consent may be conditioned on Tenant's
removing any such additions, alterations or improvements upon the expiration of the Tenn and
restoring the Premises to the same condition as on the date Tenant took possession. Ali work with
respect to any addition, alteration or improvement shall be done in a good and workmanlike manner
by property qualified and licensed personnel approved by Landlord, and such work shall be diligently
prosecuted to completion. Landlord may, at Landlords option, require that any such work be
performed by Landlord's contractor, In which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any such work by
Landlord's contractor, an administrative fee of fifteen percent (15%) of the cost or the work.
(b) Tenant shall pay the costs of any work done on the Premises pursuant to Section 12(a), and
shall keep the Premises, Building and Project free and dear of liens of any kind. Tenant shall
Indemnify. defend against and keep Landlord free and harmless from, all liability, loss, damage,
costs, attorneys' fees and any other expense incurred on account of dalms by any person performing
work or furnishing materials or supplies for Tenant or any person claiming under Tenant
(c) Landlord may require, at Landlord's sole option, that Tenant provide to Landlord, at Tenants
expense, a lien and completion bond in an amount equal to at least one and one -half (1 -1f2) times
the total estimated cost of any additions, alterations or improvements to be made in or to the
Premises, to protect Landlord against any liability for mechanic's and materialmen's liens and to
insure timely completion of the work. Nothing contained in this Section 12 (c) shall relieve Tenant of
its obligation under Section 12(b) to keep the Premises, Building and Project free of all liens.
(d) Unless their removal is required by Landlord as provided in Section 12(a), all additions,
alterations and improvements made to the Premises shall become the property of Landlord and be
surrendered with the Premises upon the expiration of the Term; provided, however, Tenant's
equipment, machinery and trade fixtures which can be removed without damage to the Premises
shall remain the property of Tenant and may be removed, subject to the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY
(a) All fixtures, equipment, improvements and appurtenances attached to or built into the Premises
at the commencement of or during the Term, whether or not by or at the expense of Tenant
( "Leasehold Improvements'), shall be and remain a part of the Premises, and shalt be the property of
Landlord and shall not be removed by Tenant, except as expressly provided in Section 13(b).
(b) All movable partitions, business and trade fixtures, machinery and equipment, communications
equipment and office equipment located in the Premises and acquired by or for the account of
Tenant, without expense to Landlord, which can be removed without structural damage to the
Building, and all furniture, furnishings and other articles of movable personal property owned by
Tenant and located in the Premises (collectively 'Tenants Pmperty") shall be and shall remain the
Page 6 f n
City of Newport Bea
503 32nd Street 410 '
property of Tenant and may be removed by Tenant at anytime during the Term; provided that if any
of Tenants Property is removed, whether pursuant to this Article or any other provision of this Lease,
Tenant shall promptly, and prior to expiration or termination of this Lease, repair, at Tenants
expense, any damage to the Premises or to the Building resulting from such removal.
14. RULES AND REGULATIONS
Tenant agrees to comply with (and cause its agents, contractors, employees and invitees to comply
with) the rules and regulations attached hereto as Ex hibt "D" and with such reasonable modiftcetons
thereof and additions thereto as Landlord may from time to time make. Landlord shall not be
responsible for any violation of said rules and regulations by other tenants or occupants of the
Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD
Landlord reserves the following rights, exercisable without liability to Tenant for (a) damage or injury
to property, person or business, (b) causing an actual or constructive eviction from the Premises, or
(c) disturbing Tenants use or possession of the Premises:
(a) To name the Building and Project and to change the name or street address of the Building or
Project.;
(b) To install and maintain all signs on the exterior and interior of the Building or Project;
(c) To have pass keys to the Premises and all doors within the Premises, excluding Tenants vaults
and safes;
(d) At any time during the Tenn, and on reasonable prior notice to Tenant, to inspect the Premises,
and to show the Premises to any prospective purchaser or mortgagee of the Building or to any
assignee of any mortgage on the Building or to others having an interest in the Project or Landlord,
and during the last six months of the Term, to show the Premises to prospective tenants thereof; and
(e) To enter the Premises for the purpose of making inspections, repairs, alterations, additions or
improvements to the Premises or the Building (including, without limitation, checking, calibrating,
adjusting or balancing controls and other parts of the HVAC system), and to take all steps as
necessary or desirable for the safety, protection, maintenance or preservation of the Premises or the
Building or Landlord's interest therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders or requirements of governmental
or other authority. Landlord agrees to use its best efforts (except in any emergency) to minimize
interference with Tenants business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING
No assignment of this Lease or sublease of all or any part of the Premises shall be permitted, except
as provided in this Article 16.
a. Tenant shall not without the prior written consent of Landlord, assign this Lease or any interest
herein or sublet the Premises or any part thereof, or pert the use of the Premises by any party
other than Tenant which consent shall not be unreasonably withheld. Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord, terminate this Lease. This
Lease shall not, nor shall any interest of Tenant herein, be assignable by operation of lawwit cutthe
written consent of Landlord.
b. If at any time or from time to time during the Ter Tenant desires to assign this Lease or sublet all
or any part of the Premises, Tenant shall give notice to Landlord setting forth the terms and
provisions of the proposed assignment or sublease, and the identity of the proposed assignee or
subtenant- Tenant shall promptly supply Landlord with such information concerning the business
background and financial condition of such proposed assignee or subtenant as Landlord may
reasonably request Tenant may assign the Lease or sublet such space to such proposed assignee
or subtenant on the following further conditions:
(1) Landlord shall have the right to approve such proposed assignee or subtenant, which
approval shall not be unreasonably withheld;
(2) The assignment or sublease shall be on the same terms set forth in the notice given to
Landlord;
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City of Nawpoa
503 32nd 8treeitt30
(3) No assignment or sublease shall be valid and no assignee or sublessee shall take
possession of the Premises until an executed counterpart of such assignment or sublease has been
delivered to landlord;
(4) No assignee or sublessee shall have a further right to assign or sublet except on the
terms herein contained; and
(5) Any sums or other economic consideration received by Tenant as a result of such
assignment or subletting, however denominated under the assignment or sublease, which exceed, in
the aggregate, (I) the total sums which tenant is obligated to pay Landlord under this Lease (prorated
to reflect obligations aflocable to any portion of the Premises subleased), plus ( € €) any real estate
brokerage commissions or fees payable in connection with such assignment or subletting, shall be
paid to Landlord as additional rent under this Lease without affecting or reducing any other
obligations of Tenant hereunder.
c, Notwithstanding the provisions of paragraphs a and b above, Tenant may assign this Lease or
sublet the Premises or any portion thereof, without Landlord's consent and without extending any
recapture or termination option to Landlord, to any corporation which controls, is oonbulled by or is
under common control with Tenant, or to any corporation resulting from a merger or consolidation
with Tenant, or to any person orentity which acquires all the assets of Tenants business as a going
concern, provided that (i) the assignee or sublessee assumes, in full, the obligations of Tenant under
this Lease, (i €) Tenant remains fully Fable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.
d. No subletting orassignment shall release Tenant of Tenant's obligations underthis Lease oralter
the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by
Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed
to be a waiver by Landlord of any provision hereof. Consent to one assignment orsubletting shall not
be deemed consent to any subsequent assignment or subletting. In the event of default by an
assignee or subtenant of Tenant or any successor of Tenant In the performance of any of the terms
hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to subsequent assignments
of the Lease or subletings or amendments or modifications to the Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and any such actions shall not relieve Tenant of liability under this Lease.
e. If Tenant assigns the Lease or sublets the Premises or requests the consent of Landlord to any
assignment or subletting or if Tenant requests the consent of Landlord for any act that Tenant
proposes to do, then Tenant shall, upon demand, pay Landlord an administrative fee of One Hundred
Fifty and Nol100ths Dollars ($150.00) plus any attorneys fees reasonably incurred by Landlord in
connection with such act or request.
17. HOLDING OVER
If after expiration of the Tenn, Tenant remains in possession of the Premises with Landlord's
permission (express or implied), Tenant shall become a tenant from month to month only, upon all
the provisions of this Lease (except as to term and Base Rent), but the'Monthly Installments of Base
Rent- payable by Tenant shall be increased to one hundred fifty percent (150 %) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such monthly rent shall
be payable in advance on or before the first day of each month. If either party desires to terminate
such month to month tenancy, it shall give the other party not less than thirty (30) days advance
written notice of the date of termination.
18. SURRENDER OF PREMISES
a. Tenant shall peaceably surrender the Premises to Landlord on the expiration or termination of this
Lease, in broom-clean condition and in as good condition as when Tenant took possession, except
for (i) reasonable wear and tear, (it) loss by fire or other casualty, and (ii) loss by condemnation.
Tenant shalt, on Landlord's request remove Tennis Property on or before the Expiration Date and
promptly repair all damage to the Premises or Building caused by such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by process of law or
otherwise, any of Tenant's Property left on the Premises shall be deemed to be abandoned, and, at
Landlord's option, title shall pass to Landlord under this Lease as by a bill of sale. If Landlord elects
to remove all or any part of such Tenant's Property, the cost of removal, including repairing any
damage to the Premises or Building caused by such removal, shall be paid by Tenant On the
Page 8
0"
City of Newport Bea*
503 32nd street 411
expiration or termination of this Lease Tenant shall surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE
a. If the Premises or the portion of the Building necessary for Tenant's occupancy is damaged by
fire, earthquake, act of God, the elements orother casualty, Landlord shall, subject to the provisions
of this Article, promptly repair the damage, if such repairs can, in Landlord's opinion, be completed
within ninety (90) days. If Landlord detertitines.that repairs can be completed within ninety days, this
Lease shall remain in full force and effect, except that if such damage is not the result of the
negligence or Wilful misconduct of Tenant orTenanfs agents, employees, contractors, licensees or
invitees, the Base Rent shall be abated to the extent Tenants use of the Premises is impaired,
commencing with the data of damage and continuing until completion of the repairs required of
Landlord under Section 19d.
b. If in Landlord's opinion, such repairs to the Premises or portion of the Building necessary for
Tenant's occupancy cannot be completed within ninety (90) days, Landlord mayelecL upon notice to
Tenant given within thirty (30) days after the date of such fire or other casualty, to repair such
damage, in which event this Lease shall continue in full force and effect, but the Base Rent shall be
partially abated as provided in Section 19a. If Landlord does not so elect to make such repairs, this
Lease shall terminate as of the date of such fire or other casualty.
c. If any other portion of the Building or Project is totally destroyed or damaged to the extent that In
Landlord's opinion repair thereof cannot be completed within ninety (90) days, Landlord may elect
upon notice to Tenant given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and effect, but the Base
Rent shall be partially abated as provided in Section 19a. If Landlord does not elect to make such
repairs, this Lease shall terminate as of the date of such fire or other casualty.
d. If the Promises are to be repaired under this Article, Landlord shall repair at its cost any Injury or
damage to the Building and Building Standard Work in the Premises. Tenant shall be responsible at
its sole cost and expense for the repair, restoration and replacement of any other Leasehold
Improvements and Tenant's Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any portion of the Premises,
Building or Project as a result of any damage from fire or other casualty.
e. This Lease shall be considered an express agreement governing any case of damage to or
destruction of the Premises or Building by fire or other casualty, and any present or future law which
purports to govern the rights of Landlord and Tenant in such circumstances in the absence of
express agreement, shall have no application.
20. EMINENT DOMAIN
a. If the whole of the Building or Premises is lawfully taken by condemnation or in any other manner
for any public or quasi - public purpose, this Lease shall terminate as of the date of such taking, and
Rent shall be prorated to such date. If less than the whole of the Building or Premises is so taken,
this Lease shall be unaffected by such taking, provided that (i0 Tenant shall have the right to
terminate this Lease by notice to Landlord given within ninety (90) days after the date of such taking if
twenty percent (20 %) or more of the Premises is taken and the remaining area of the Premises is not
reasonably sufficient for Tenant to continue operation of its business, and (g) Landlord shag have the
right to terminate this Lease by notice to Tenant given within ninety (90) days after the date of such
taking. If either Landlord or Tenant so elects to terminate this Lease, the tease shall terminate on
the thirtieth (30th) day after either such notice. The Rent shall be prorated to the date of termination.
If this Lease continues in force upon such partial taking, the Base Rent shall be equitably adjusted
according to the remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, all of the proceeds of any award, judgment or
settlement payable by the condemning authority shall be the exclusive property of Landlord, and
Tenant hereby assigns to Landlord all of its righL litle and interest in any award, judgment or
settlement from the condemning authority. Tenant, however, shall have the right, to the extent that
Landlord's award is not reduced or prejudiced, to claim from the condemning authority (but not from
Landlord) such compensation as may be recoverable by Tenant in its own right for relocation
expenses and damage to Tenant's personal property.
c. In the event of a partial taking of the Premises which does not result in a termination of this Lease,
Landlord shall restore the remaining portion of the Premises as nearly as practicable to its condition
prior to the condemnation or taking, but only to the extent of Building Standard Work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and replacement of any other
Page 9 13
City of Neon •
soa azaa surest #ice
Leasehold Improvements within the Premises and Tenant's Property.
21.
a. Tenant shall indemnify and hold Landlord harmless against and from liability and claims of any
kind or loss for damage to property of Tenantor any other person, or for any injury to or death of any
person, arising out of (1) Tenanfs use and occupancy of the Premises, or any work, activity orodw
things allowed or suffered by Tenant to be done in, on or about the Premises; (2) any breach or
default by Tenant of any of Tenants obligations under this Lease; or (3) any negligent or otherwise
tortious ad or omission of Tenant, its agents, employees, invitees or contractors. Tenant shall at
Tenants expense, and by counsel satisfactory to Landlord, defend Landlord in any action or
proceeding arising from any such claim and shall indemnify Landlord against all costs, attorneys'
fees, expert witness fees and any other expenses Incurred in such action or proceeding. As a
material part of the consideration for Landlord's execution of this Lease, Tenant hereby assumes all
risk of damage or injury to any person or property in, on or about the Premises from any cause.
b. Landkxdshallnotbeliableforinjury ordamagewhichmaybesustainedbythepersonorproperty
of Tenant, its employees, invitees or customers, or any other person in or about the Premises,
caused by or resulting from fine, steam, electricity, gas, water or rein which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, winks, appliances, plumbing, air conditioning or lighting fixtures, whether such damage or
injury results from conditions arising upon the Premises or upon other portions of the Building or
Project or from other sources. Landlord shag not be liable for any damages arising from any act Or
omission of any other tenant of the Building or Project
22. TENANTS INSURANCE
Tenant is a public entity and is selfinsured with respect to general liability and automobile coverage.
Tenant has a setf- insured retention limit of $500,000 with excess coverage of $50,000,000. To the
extent that Tenants excess coverage is decreased below $1,000,000, Tenant shall be required to
obtain general, automobile or excess coverage insurance of at least $11,000,000. .
Tenant shall maintain Workers' Compensation Insurance and Employers Liability Insurance in
accordance with the laws of the State of California and shalt provide proof of insurance upon demand
by Landlord.
23. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waive arty and all rights of recovery against the other or against
the officers, partners, employees, agents and representatives of the other, on account of loss or
damage of such walving party or its property, or the property of others under its control to the extent
that such loss or damage is insured against under any fire and extended coverage insurance policy
which either may have in force at the time of such loss or damage. Tenant shall, upon obtaining the
policies of insurance required under this Lease, give notice to its insurance carrier(s) that the
foregoing mutual waiver of subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT
Upon written request of Landlord, or any first mortgagee or first deed of trust beneficiary of Landlord,
or ground lessor of Landlord, Tenant shall, in writing, subordinate its rights under this Lease to the
lien of any first mortgage or first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However, before signing any
subordination agreement, Tenant shall have the right to obtain from any lender or lessor or Landlord
requesting such subordination, an agreement in writing providing that, as long as Tenant is not in
default hereunder, this Lease shall remain in effect for the full Tenn. The holder of any security
interest may, upon written notice to Tenant, elect to have this Lease prior to its security interest
regardless of the time of the granting or recording of such security interest.
(b) In the event of any foreclosure sale, transfer in tieu of foreclosure or termination of the lease in
which Landlord is lessee, Tenant shall aftom to the purchaser, transferee or lessor as the case may
be, and recognize that party as Landlord under this Lease, provided such party acquires and accepts
the Premises subject to this Lease.
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City of Newport aea* .
503 32nd Street #1
25. TENANT ESTOPPEL CERTIFICATES
Within ten (10) days after written request from Landlord, Tenant shall execute and deliverto Landlord
or Landlord's designee, a written statement cerfong (a) that this Lease is unmodified and in full
force and effect, or is in full force and effect as modified and stating the modifications; (b) the amount
of Base Rent and the date to which Base Rent and additional rent have been paid In advance; (c) the
amount of any security deposited with Landlord; and (d)Jhat Landlord is not in default hemunderor, If
Landlord Is claimed to be in default Any such statement may be conclusively relied upon by any
prospective or actual purchaser, assignee, or lender. Tenerife failure to execute and deliver such
statement within the time required shall, at Landlord's election, be a default under this Lease and
shall also be conclusive upon Tenant that (1) this Lease in full force and effect and has not been
modified except as represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counterclaim or deduction against Rent, and (3)
not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORDS INTEREST
If landlord sells or transfers its Interest in the Premises. Building or Project, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations contained in or derived from
this Lease arising out of any act, occurrence or omission relating to the Premises, Building, Project.
or Lease occurring after the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this Lease. If any security
deposit or prepaid Rent has been paid by Tenant, Landlord may transfer the security deposit or
prepaid Rent to Landlord's successor and upon such transfer, Landlord shall be relieved of any and
all further liability with respect thereto.
27. DEFAULT
27.1 Tenant's Default. The occurrence of any one or more of the following events shall constitute a
default and breach of this Lease by Tenant
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be paid by Tenant under this
Lease and such failure continues for five (5) days after such payment is due and payable; or
c. If Tenant falls to promptly and fully perform any other covenant condition oragreement contained
in this Lease and such failure continues for thirty (300 days after written notice thereof from Landlord
to Tenant; or
d. If a writ or attachment or execution is levied on this Lease or on any of Tenant's Properly, or
e. If Tenant makes a general assignment for the benefit of creditors, or provides for an
arrangement composition, extension or adjustment with its creditors; or
f. If Tenant files a voluntary petition for relief or if a petition against Tenant in a proceeding under
the federal bankruptcy laws or other insolvency laws Is filed and not withdrawn or disrOssed within
forty -five (45) days thereafter, or if under the provisions of any law providing for reorganization or
winding up of corporations, arty court of competent Jurisdiction assumes jurisdiction, custody or
control of Tenant or any substantial part of its property and such Jurisdiction, custody or control
remains in force unrelinquished, unstayed or untenninated for a period of forty -five (45) days; or
g. If any proceeding or action in which Tenant is a party, a trustee, receiver, agent or custodian is
appointed to take charge of the Premises or Tenant's Property (or has the authority to do so) for the
purpose of enforcing a lien against the Premises or Tenant's Property; or
h. If Tenant is a partnership or consists of more than one (1) person or entity, if any partner of the
partnership or other person or entity is involved in any of the acts or events described in
subparagraphs d through g above.
27.2 Remedies. In the event of Tenants default hereunder, then in addition to any other rights or
remedies Landlord may have under any law. Landlord shall have the right, at Landlord's option, w to
do any of the following:
a. Terminate this Lease and Tenant's tight to possession of the Premises and reenter the
Premises and take possession thereof, and Tenant shall have no further claim to the Premises or
under this Lease; or
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City of Newport Beaco
603 32nd street #130
•
b. Continue this Lease in effect, reenter and occupy the Premises for the account of Tenant, and
collect any unpaid Rent or other charges which have or thereafter become due and payable; or
c. Reenter the Premises under the provisions of subparagraph b, and thereafter elect to terminate
this Lease and Tenant's right to possession of the Premises.
If Landlord reenters the Premises under the provisions of subparagraphs b or c above, Landlord
shall not be deemed to have terminated this Lease or the obligation of Tenant to pay any Rent or
other charges thereaf eraocruing, unless Landlord notes Tenant in writing of Landlords election to
terminate this Lease. In the event of any reentry or retaking of possession by Landlord, Landlord
shall have the right, but not the obligation, to remove all or any part of Tenant's Property in the
Premises and to place such property in storage at a public warehouse at the expense and risk of
Tenant If Landlord elects to relet the Premises for the account of Tenant, the rend received by
Landlord from such reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rant due hereunder from Tenant to'Landlord; second, to the payment of any costs of
such retailing; third, to the payment of the cost of any alterations or repairs to the Premises; fourth to
the payment of Rent due and unpaid hereunder, and the balance, if any, shall be held by Landlord
and applied in payment of future Rent as it becomes due. If that portion of rent received from the
reletfing which is applied against the Rem due hereunder is less than the amount of the Rentdue,
Tenant shall pay the deficiency to Landlord promptly upon demand by Landlord. Such deficiency
shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as determined,
any costs and expenses incurred by Landlord in connection with such reletting or in making
alterations an repairs to the Premises, which are riot covered bythe rent received from the reletfing.
Should Landlord elect to terminate this Lease under the provisions of subparagraph a or c above,
Landlord may recover as damages from Tenant the following:
1. Past Rent The worth at the time of the award of any unpaid Rent which had been
earned at the time of termination; plus
2. Rent Prior to Award. The worth at the time of the 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
3. Rent After Award. 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 the rental
loss that Tenant proves could be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result therefrom, including,
but not limited to, any costs or expenses (Including attomeys' fees), incurred by Landlord in
(a) retaking possession of the Premises, (b) maintaining the Premises after Tenant's default,
(c) preparing the Premises for reletfing to a new tenant, including any repair or alterations,
and (d) reletting the Premises, including broker's commissions.
The "worth at the time of award' as used in subparagraphs 1 and 2 above, is to be computed by
allowing interest at the rate often percent (10 %) perannum. "The worth at the time of the award' as
used in subparagraph 3 above, is to be computed by discounting the amount at the discount rate of
the Federal Reserve Bank situated nearest to the Premises at the time of the award plus one percent
(1 %).
The waiver by Landlord of any breach of any term, covenant or condition of this Lease shall not be
deemed a waiver of such term, covenant or condition or of any subsequent breach of the same or
any other term, covenant or condition. Acceptance of Rent by Landlord subsequent to any breach
hereof shall not be deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at the time of such
acceptance of Rent. Landlord shall riot be deemed to have waived any term, covenant or condition
unless Landlord gives Tenant written notice of such waiver.
27.3 Landlord's Default. If Landlord fails to perform any covenant, condition oragreement contained
in this Lease within thirty (30) days after receipt of written notice from Tenant specifying such default,
or if such default cannot reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant for any damages
sustained by Tenant as a result of Landlord's breach; provided, however, it is expressly understood
and agreed that if Tenant obtains a money judgment against Landlord resulting from any default or
other claim arising under this Lease, that judgment shall be satisfied only out of the rents, issues,
profits, and other income actually received on account of Landlord's right, title and interest in the
Page 12
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City of Newport %,* •
503 32nd Skeet #i3
Premises, or Building, or Project and no other reab personal or mixed property of Landlord (or of any
of the partners which comprise Landlord, if any) wherever situated, shall be subject to levy to satisfy
suchjudgment. ff. after notice to Landlord of default, Landlord (oranyfirst mortgagee orfirst deed of
trust beneficiary of Landlord) fails to cure the default as paraded herein, then Tenant shall have the
right to cure that default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against arry payments of Rent or any other charges
due and payable under this Lease except as otherwise specifically provided herein.
28. BROKERAGE FEES
Tenant warrants and represents that it has not dealt with any real estate broker or agent in
connection with this Lease or Its negotiation except those noted In Section 2.c. Tenant shall
indemnify and hold Landlord harmless from any cost expense or liability (including costs of suit and
reasonable attorneys' fees) for any compensation, commission or fees claimed by any other real
estate broker or agent in connection with this lease or its negotiation by reason of any act of Tenant
29. NOTICES
All notices, approvals and demands permitted or required to be given under this Lease shall be in
writing and deemed duly served orgiven if personalty delivered or sent by certified or registered U.S.
mail, postage prepaid, and addressed as follows: (a) if to Landlord; to Landlords Maiing Address and
to the Building manager, and (b) If to Tenant, to Tenant's Mailing Address; provided, however,
notices to Tenant shall be deemed duty served or given if delivered or mailed to Tenant at the
Premises. Landlord and Tenant may from time to time by written notice to the other designate
another place or receipt of future notices, except that Landlord may in any event use the Premises
as Tenant's address or notice purposes. Notice shall be effective when mailed ordelivered as above
specified.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS
In the event of imposition of federal, state or local government controls, rules, regulations, or
restrictions on the use or consumption of energyor other utilities during the Term, both Landlord and
Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and Tenant
of any such controls, the interpretation of Landlord shall prevail, and Landlord shall have the right to
enforce compliance therewith, including the right of entry into the Premises to effect compliance.
31. RELOCATION OF PREMISES
Landlord shall have the right to relocate the Premises to another part of the Building in accordance
with the following:
(a) The new premises shall be substantially the same in size, dimensions, configuration, d6corand
nature as the Premises described in this Lease, and, if the relocation occurs after the
Commencement Date, shall be placed in that condition by Landlord at its cost
(b) Landlord shall give Tenant at least thirty (30) days written notice of Landlord's intention to
relocate the Premises.
(c) As nearly as practicable, the physical relocation of the Premises shall take place on a weekend
and shall be completed before the following Monday. ff the physical relocation has not been
completed in that time, Base Rent shall abate in full from the time the physical relocation commences
to the time it is completed. Upon completion of such relocation, the new premises shall become the
"Premises" under this Lease.
(d) All reasonable costs incurred by Tenant as a result of the relocation, shall be paid by Landlord.
(e) ff the new premises are smaller than the Premises as it existed before the relocation, Base Rent
shall be reduced proportionately.
(f) The parties hereto shall immediately execute an amendment to this Lease setting forth the
relocation of the Premises and the reduction of Base Rent, if arry.
32. QUIET ENJOYMENT
Tenant, upon paying the Rent and performing all of its obligations under this lease, shall peaceably
and quietly enjoy the Premises, subject to the terms of this Lease and to any mortgage, lease, or
Page 13
City of 32nd Sb see* •
503 32nd Street #130
other agreement to which this Lease may be subordinate.
33. OBSERVANCE OF LAW
Tenant shall not use the Premises or permit anything to be done in or about the Premises which will
in anyway conflict with any law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated. Tenant shall, at Its sole cost arid expense, promptly
comply with all laws, statutes, ordinances andigovernmental regulations or requirements now in
force or which may hereafter be in forte, and with die requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the
condition, use or occupancy of the Premises, excluding structural charges not related to or affected
by Tenant's improvements or acts. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord is a party thereto or not, that
Tenant has violated any law, ordinance or governmental rule, regulation or requirement shall be
conclusive of that fact as between landlord and Tenant.
34. FORCE MAJEURE
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant which is due to
strikes, labor disputes, inability to obtain labor, materials, equipment or reasonable substitutes
therefor, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy or
hostile government actions, civil commotion, fire or other casualty, or other causes beyond the
reasonable control of the party obligated to perform hereunder, shall excuse performance of the work
by that party for a period equal to the duration of that prevention, delay or stoppage. Nothing in this
Article 34 shall excuse or delay Tenant's obligation to pay Rent or other charges under this Lease.
35. CURING TENANT'S DEFAULTS
If Tenant defaults in the performance of any of its obligation under this Lease, Landlord may (but
shall not be obligated to) without waiving such default, perform the same for the account at the
expense of Tenant. Tenant shall pay Landlord all costs of such performance promptly upon receipt
of a bill therefor.
36. SIGN CONTROL
Tenant shall not affix, paint, erect or inscribe any sign, projection, awning, signal oradverttsement of
any kind to the exterior of the Premises, Building or Project, including without limitation, the inside or
outside of windows or doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission, without being Gable to
Tenant by reason of such removal, and to charge the cost of removal to Tenant as additional rent
hereunder, payable within ten (10) days of written demand by Landlord.
37. MISCELLANEOUS
(a) Accord and Satisfaction; Allocation of Payments. No payment by Tenant or receipt by Landlord of
a lesser amount than the Rent provided for in this Lease shall be deemed to be other than on
account of the earliest due Rent, nor shall any endorsement or statement on any check or letter
accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to recover the balance of the
Rent or pursue any other remedy provided for in this Lease. In connection with the foregoing,
Landlord shall have the absolute right in its sole discretion to apply any payment received from
Tenant to any account or other payment of Tenant then not current and due or delinquent.
(b) Addenda. If any provision contained in an addendum to this lease is inconsistent with any other
provision herein, the provision contained in the addendum shall control, unless otherwise provided in
the addendum.
(c) Attomeys' Fees. If any action or proceeding is brought by either party against the other pertaining
to or arising out of this Lease, the finally prevailing party shall be entitled to recover all costs and
expenses, including reasonable attomeys' fees, incurred on an account of such action or proceeding.
(d) Captions, Articles and Section Numbers. The captions appearing within the body of this Lease
have been inserted as a matter of convenience and for reference only and in no way define, limit or
enlarge the scope or meaning of this Lease. Ali reference to Article and Section numbers refer to
Articles and Sections in this Lease.
(e) Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably withhold its
Page 14 19
City of Newport
603 32nd Street '
consent to changes or amendments to this lease requested by the lender on Landlord's interest, so
tong as these changes do no alter the basic business terms of this Lease or otherwise materially
diminish any rights or materially increase any obligations of the party from whom consent to such
charge or amendment is requested.
(f) Chace of Law; Construction. This Lease shall be construed and enforced in accordance with the
laws of the State.
(g) Consent. Notwithstanding anything contained in this lease to the contrary, Tenant shall have no
claim, and hereby waives the right to any claim, against Landlord for money damages by reason of
any refusal, vftholding or delaying by Landlord of anyconsent approval orstatement of satisfaction,
and in such event, Tenant's only remedies therefor shall be an action for specific performance,
injunction or declaratory judgment to enforce any right to such consent, etc.
(h) Corporate Authority. If Tenant is a corporation, each individual signing this Lease on behalf of
Tenant represents and warrants that he is duly authorized to execute and deliverthis Lease on behalf
of the corporation, and that this Lease is binding on Tenant in accordance with its terms. Tenant
shall, at Landlord's request, deliver a certified copy of a resolution of Its board of directors authorWng
such execution.
(t) Counterparts. This Lease may be executed in multiple counterparts, all of which shag constitute
one and the same Lease.
(j) Fxecufion of Lease; No Option. The submission of this Lease to Tenant shall be for examination
purposes only, and does not and shall not constitute a reservation of or option for Tenant to lease, or
otherwise create any interest of Tenant in the Premises or any other premises within the Building or
ProjecL Execution of this Lease by Tenant and its return to Landlord shall not be binding on
Landlord, notwithstanding any time interval, until Landlord has in fact signed and delivered this Lease
to Tenant
(k) Furnishing of Financial Statements; Tenant's Representations. In order to induce Landlord to
enter into this Lease Tenant agrees that it shall promptly furnish Landlord, from time to time, upon
Landlords written request, with financial statements reflecting Tenant's current financial condition.
Tenant represents and warrants that all financial statements, records and information furnished by
Tenant to Landlord in connection with this Lease are true, correct and complete in all respects.
(1) Further Assurances. The parties agree to promptly sign all documents reasonably requested to
give effect to the provisions of this Lease.
(m) Mortgagee Protection. Tenant agrees to send by certified or registered mail to any first
mortgagee or first deed of trust beneficiary of Landlord whose address has been furnished to Tenant
a copy of any notice of default served by Tenant on Landlord. If Landlord fails to cure such default
within the time provided for in this Lease, such mortgagee or beneficiary shall have an additional
thirty (30) days to cure such default; provided that if such default cannot reasonably be cured within
that thirty (30) day period, then such mortgagee or beneficiary shall have such additional time to cure
the default as is reasonably necessary under the circumstances.
(n) Prior Agreements; Amendments. This Lease contains all of the agreements of the parties with
respect to any matter covered or mentioned in this Lease, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provisions of this Lease may be
amended or added to except by an agreement in writing signed by the parties or their respective
successors in interest.
(o) Recording. Tenant shall not record this Lease without the prior written consent of Landlord.
Tenant upon the request of landlord, shag execute and acknowledge a `short form' memorandum of
this Lease for recording purposes.
(p) Severabifity. A final determination by a court of competent jurisdiction that any provision of this
Lease is invalid shall not affect the validity of any other provision, and any provision so determined to
be invalid shall, to the extent possible, be construed to accomplish its intended effect
(q) Successors and Assigns. This Lease shag apply to and bind the heirs, personal representatives,
and permitted successors and assigns of the parties.
(r) Time of the Essence. Time is of the essence of this Lease and each and every provision hereof.
(s)Waiver. No delay oromission in the exercise of any right or remedy of Landlord upon any default
by Tenant shag impair such right or remedy or be construed as a waiver of such default.
Page 15 19
City of Newport Beach
• •
503 32nd street #130
(t) Compfiance. T the parties hereto agree to complywith all applicable federal, state and local laws,
regulations, codes, ordinances and administrative orders having jurisdiction over the parties, property
or the subject matter of this Lease, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment In Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The Americans with Disabilities Act
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a waiver of any
other default; it shall constitute only a waiver of timely payment for the particular Rent payment
involved.
No act or conduct of Landlord, including, without limitation, the acceptance of keys to the Premises,
shall constitute an acceptance of the surrender of the Premises by Tenant before the expiration of
the Term. Only a written notice from Landlord to Tenant shall constitute acceptance of the surrender
of the Premises and accomplish a termination of the Lease.
Landlord's consent to or approval of any act by Tenant requiring Landlord's consent or approval shall
not be deemed to waive or render unnecessary landlord's consent to or approval of any subsequent
act by Tenant
Any waiver by Landlord of any default must be in writing and shall not be waiver of any other default
concerning the same or any other provision of the Lease.
The parties hereto have executed this Lease as of the dates set forth below.
IN WITNESS WHEREOF, Landlord and Tenant have executed this lease as of the last date
indicated below.
APP OYF.D AS TO PORN:
CITY ATTORNEY
CITY OF NEWPORT REACH
'LANDLORD"
503.32nd Street, LLC, a California limited
liability company
By.
Jack Jakosky, Manager
i7 IM W
The City of Newport Beach
By-
Print Name:
Title:
By.
Print Name:
Title:
Page 16
M
City of Newport Bea
50332nd Sheet #I*
EXHIBIT "A"
[Intentionally Deleted]
Exhibit A, Page 1 ��
City of Newpon
503 32nd Street #130
EXHIBIT "B"
[Intentionally Deleted]
Exhibit B, Page 1
•
r I
City of Newport •
503 32nd Sheet #1
EXHIBIT "C"
Building Standard Work Laker
I. DESCRIPTION OF LANDLORD'S WORK
None. Tenant shall accept the Premises in its current "as -is" condition.
II. DESCRIPTION OF TENANT'S WORK
Tenant shall, at Tenants sole cost and expense, perform all work in the Premises and install
such furniture, trade fixtures and equipment as Tenant deems necessary for the operation of
Tenants business from the Premises (oollectively, `Tenant's Work "). To the extent Tenant's
Work constitutes alterations which require the consent of Landlord pursuant to Section 12 of the
Lease, such Tenant's Work shag be performed in accordance with plans and specifications
therefor which shall be subject to Landlord's prior written approval (which approval shall not be
unreasonably withheld or delayed). All Tenants Work shall be performed in a good and
workmanlike manner and in accordance with all applicable laws.
Exhibit C, Page 1 Z
City of Newport Bead
503 32nd Street #136
EXHIBIT D
Rules and Regulations
1. No sign, placard, picture, advertisement, name or notice shall be inscribed, displayed or
printed or affixed on or to any part of the outside or inside of the building without the written
consent of Landlord first had and obtained and Landlord shag have the right to remove and
destroy any such sign, placard, picture, advertisement, name or notice wit)tout notice to and at
the expense of Tenant.
All approved signs or lettering on doors shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person approved of by the Landlord
Tenant shall not place anything or allow anything to be placed near the glass of any window,
door, partition or wag which may appear unsightly from outside of the Premises, provided,
however, that the Landlord may furnish and install a Building standard window covering at all
exterior windows. Tenant shag not without prior written consent of Landlord, cause to be
installed or otherwise install sunscreen on any window.
2. The sidewalks, halls passages, exits, entrances, elevators and stairways, driveways, and
parking areas shall not be obstructed by any of the tenants or used by them for any purpose
other than for ingress and egress from their respective Premises.
3. Tenant shall not alter arty lock or install any new or additional locks or bolts an any doors
or windows of the Premises, without prior written consent of Landlord and subsequent delivery of
a duplicate key to Landlord.
4. 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 of any kind
whatsoever shag be thrown therein and the expense of any breakage, stoppage or damage
resulting from the violation of this rule shall be bome by the Tenant who, or whose employees or
invitees, shall have caused it
5. Tenant shall not overload the floor of the Premises or in any way deface the Premises or
any part thereof.
6. Tenant shall not use, keep or permit to be used or kept arty foul or noxious gas or
substances in the Premises, or permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to the Landlord or other occupants of the Building by reason
of noise, odors and/or vibrations, or interfere in any way with other tenants or those having
business therein, nor shall arty animals or birds be brought in or kept in or about the Premises or
the Building.
7. No cooking, except for a coffee machine and microwave, shall be done or permitted by
any Tenant on the Premises, nor shall the Premises be used for washing clothes for lodging, or
for any improper, objectionable or immoral purposes.
8. Tenant shall not keep in the Premises or the Building any kerosene, gasoline or
Inflammable or combustible fluid or material, or use any method of heating or air conditioning
other than that supplied or approved In writing by the Landlord.
9. Landlord will direct electricians as to where and how telephone and telegraph wires are
to be introduced. No boring or cutting for wire will be allowed without the consent of the
Landlord. The locations of the telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord.
10. Landlord reserves the right to exclude or expel from the Building any person who, In the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any
manner does any act in violation of any of the rules and regulations of the Building.
11. Tenant shall not disturb, solicit, or canvass any occupant of the Building and shall
cooperate to prevent same.
12. Without the written consent of Landlord, Tenant shag not use the name of the Building in
connection with or in promoting or advertising the business of Tenant, except as Tenant's
address.
13. Landlord shag have the right to control and operate the public portions of the Building,
and the public facilities, and heating and conditioning, as well as facilities furnished for the
common use of the tenants in such manner as it deems best for the benefit of the tenants
Exhibit D, Page 1 A
City of Newport
503 32nd Street Be#1 * •
5a
generally.
14. All garbage and refuse shall be placed by Tenant in the containers at the location
prepared by Landlord for refuse collection, in the manner and at the times and places specified
by Landlord. Tenant shall not bum any trash or garbage of any kind in or about the Premises of
the Building. All cardboard boxes must be 'broken down" prior to being placed in the trash
container. All styrofoam chips must be baggedor otherwise contained prior to placement in the
trash container, so as not to constitute a nuisance. Pallets may not be disposed of in the trash
bins or enclosures. It is the Tenants responsibility to dispose of pallets by alternative means.
Should any garbage or refuse not be deposited in the manner specified by Landlord, landlord,
may, after three (3) hours verbal notice to Tenant, take whatever action necessary to correct the
infracture at Tenants expense.
15. No aerial antenna shall be erected on the roof or exterior walls of the Premises, or on the
grounds, without in each instance, obtaining written consent of Landlord. Any aerial or antenna
so installed without such written consent shall be subject to removal by Landlord at any time
without notice.
18. No loud speakers, televisions, phonographs, radios or other devices shall be used in a
manner so as to be heard or seen outside of the Premises or in neighboring space without the
prior written consent of Landlord.
17. The outside areas immediately adjoining the Leased Premises shall be kept dean and
free from dirt and rubbish by the Tenant to the satisfaction of the Landlord, and Tenant shall not
place or permit any obstruction or materials in such areas. No exterior storage shall be allowed.
18. Tenant shall use at Tenants cost such pest extermination contractor as Landlord may
direct and at such intervals as Landlord may require.
Tenant agrees to comply with all such rules and regulations at all times. Should Tenant not
abide by these Rules and Regulations, landlord may serve a three (3) day notice la correct
deficiencies. If Tenant has not corrected deficiencies by the end of the notice period, Tenant will
be in default of the Lease.
Landlord reserves the right to amend or supplement the foregoing rules and regulations and to
adopt and promulgate additional rules and regulations applicable to the Premises. Notice of such
rules and regulations and amendments and supplements thereto, if any shall be given to the
Tenant.
Exhibit D, Page 2 ^5
City of Newport Bea*
503 32nd Sheet #130
•
EXHIBIT E
[Intentionally Deleted]
Exhibit E, Page 1
City of Newport aea
503 32nd Street #1
ADDENDUM TO LEASE
•
ADDENDUM TO OFFICE BUILDING LEASE DATED 20 BY AND
BETWEEN 503 32ND STREET LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AS
LANDLORD AND THE CITY OF NEWPOITT.BEACH, AS TENANT ( "ADDENDUM ") FOR THE
OFFICE SPACE LOCATED AT 503 32N0 STREET SUITE 130, NEWPORT BEACH, CA
92663.
THIS ADDENDUM IS INTENDED TO MODIFY, AND WHERE APPLICABLE TO SUPERSEDE
AND OTHERWISE TAKE PREflEGE6[Wl ®WEt, TNtIt -RMS AND PROVISIONS OF THE
OFFICE BUILDING LEASE TO WWIdi IT IS ATTACHED AND MADE A PART OF FOR ALL
PURPOSES BY THIS REFERENCE.
1. Option to Extend. Tenant shall have the option to extend the Term of this Lease (the
'Renewal Option") on the same terms and conditions (except as set forth herein) for two (2)
consecutive periods of two (2) years each (the'Option Term(s)'), commencing on June 1, 2010 and
continuing through May 31, 2012 (the "First Option Tenn "); and commencing on June 1, 2012 and
continuing through May 31, 2014 (the 'Second Option Term ") as follows:
a. Tenant shall exercise each Renewal Option by written notice given to
Landlord in accordance with Section 29 not less than one hundred twenty (120) days prior to the
expiration of the then current Term;
b. Tenant shall not have the right to exercise a Renewal Option dtiis has atany
Nine been in Default (as defined in Section 27) of any of the terms and provisions of this Lease;
C. Any exercise of an Option shall be null and void and of no force and effect if
as of the last day of the then current Tenn prior to the commencement of the applicable Option
Term Tenant is in Default of any of the temps and provisions of the Lease to be performed by
Tenant;
d. The Options granted herein shall be null and void and of no force or effect if
Tenant shall not be the occupant of the Premises on the date that the Renewal Option is exercised,
or on the last day of the then current Tenn prior to the commencement of the Option Term, if the
Renewal Option applicable thereto has been previously exercised;
e. The Options set forth herein are personal to The City of Newport Beach
('Original Tenant") and may be exercised only so long as the Original Tenant occupies the Premises
without assigning this Lease or subletting the Premises or any part thereof;
Tenant shall have no further Option(s) to extend the Term of the Lease;
g. If more than one (1) Option is granted, Tenant shall have no right to exercise
any Option unless each preceding Option has been exercised in accordance with the terms and
provisions hereof and has not been made null and void, as it is Intended that the Options shall be for
consecutive periods only.
h. The Base Rent in each of the First Option Term, and the Second Option
Tenn, shall be as follows:
First Option Term: Twenty Eight Thousand Six Hundred Forty Four and 001100 Dollars
($28,644.00) per annum, payable in installments of Two Thousand Three Hundred Eighty Seven
and 00 /100 Dollars ($2,387.00) per month commencing on June 1, 2010 and continuing through
May 31, 2011; then Twenty Nine Thousand Five Hundred Eight and 00!100 Dollars ($29,508.00)
per annum, payable in installments of Two Thousand Four Hundred Fifty Nine and 001100
Dollars ($2,459.00) per month, commencing on June 1, 2011 and continuing through the
remainder of the First Option Term.
Second Option Term: Thirty Thousand Three Hundred Ninety Six and 00 /100 Dollars
($30,396.00) per annum, payable in monthly installments of Two Thousand Five Hundred Thirty
Three and 00/100 Dollars ($2,533.00) per month commencing on June 1, 2012 and continuing
through May 31, 2013; then Thirty One Thousand Three Hundred Eight and 00 /100 Dollars
($31,308.00) per annum, payable in monthly installments of Two Thousand Six Hundred Nine
and 00 /100 Dollars ($2,609.00) per month commencing on June 1, 2013 and continuing through
the remainder of the Second Option Term.
2. Utilities/Janitorial Services.
Addendum to Lease, Page 1
a�
City of Newport Beach • •
503 32nd Street #130
(a) Utility Services: Tenant shall contract and pay utility companies directly for its
utilities, including electricity, telephone, computer Internet, DSL line, and rubbish hauling,
together with any taxes thereon.
services. (b) Janitorial Services: Tenant shall contract and pay directly for its own janitorial
3. Right of First Offer for Additional Premises:
(a) Provided that Tenant has not at any time been in default of any of the terms,
covenants.or conditions of this Lease, is operating its business in the Premises in accordance with
all of the terns of this Lease, and this Lease has not been assigned or any portion of the Premises
sublet, in the event that the office space in the Building currently Identified as 503 32nd Street Suite
120, containing approximately 750 square feet (`Suite 120") becomes available for lease prior to
expiration of the Term, Landlord shall notify Tenant, in writing, that the adjacent premises is available;
and Tenant shall have the right from a period of ten (10) days following receipt of such notice from
Landlord to lease Suite 120 ( Right of First Offer" The lease terms applicable to Suite 120 shall be
the exact terms and conditions, including Base Rent applicable to the Premises on a per- square -foot
basis, and vehicle parking. Landlord will provide Suite 120 in its then current axis condition.
(b) In the event Tenant elects to lease Suite 120, Tenant shall so notify Landlord in
writing within the ten (10) day period described in (a) above. Multiple counterparts of a lease
amendment shall then be delivered to Tenant. Tenant shall execute said amendment, without
modification and in the same forth as delivered to Tenant, within ten (10) days of Tenants receipt
thereof. Failure to notify landlord in writing within the ten (10) day period described in (a) above shall
automatically terminate Tenant's Right of First Offer and Landlord will have no further obligations to
Tenant and shall be free to lease and re -lease Suite 120 to others;
(c). In the event Tenant shall exercise its Right of First Offer but shall thereafterfail
to execute and deliverthe lease amendment in the manner andlerwithin the time limits set forth in (b)
above, then Landlord may lease and release Suite 120 to any other prospective Lenard without first
offering the same to Tenant;
(d). In no event shall Tenant have a Right of First Offer more than once during the
Term; and
(e). Nothing herein shall prohibit Landlord from showing or marketing Suite 120 to
third parties prior to the time Tenant receives Landlord's notice or while Landlord awaits Tenant's
response or the signed lease amendment as described above, and Landlord shall not be deemed in
default under this Article unless and unlit Landlord enters into a fully- executed lease with a third party
for Suite 120 prior to providing Tenant with the required notice and opportunity to exercise the Right of
First Offer.
4. Tenant's Right To Terminate during Second Option Tenn
Notwithstanding anything to the contrary contained elsewhere in this Lease, provided that the
Second Option Tenn has commenced, Tenant has not at any time been in default of any of the
terms, covenants or conditions of this Lease, is operating its business in the Premises in
accordance with all of the terms of this Lease, Tenant, at its sole option and discretion shall have
the right to cancel and terminate this Lease upon One Hundred Twenty (120) days prior written
notice given to Landlord.
AGREED AND ACCEPTED AGREED AND ACCEPTED
LANDLORD TENANT
503 32nd Street LLC, a California The City of Newport Beach
limited liability company
BT.
Jack Jakosky, Manager
Addendum to Lease, Page 2 n
0�
• •
TENANT:City of Newport Beach
PROPERTY: 503 32nd Street SUITE: 130
OFFICE SUILMNO LEASE
TABLE OF CONTENTS
L LEASE OFPREMISES...... .. »....._....._.__ ».. „......... ._... _......._ ». ».. ».... ».. » „..... „» 1
2. DEFINITIONS ....................»...._.»........_.._.._._.._.»....._..» ............_..........._.._... .._.._.._...1
3. EXHIBITS AND ADDENDA. »....._ ».._.. __....._._..»....._.._..»._._. ..._........._...._.._....._.._ 2
4. DELIVERY OF POSSESSION ................ _............. .... . ..._ ».__...._....._..... »....._ 2
S. RENT ....... _ .................... _ ............... ........... »_.».._.__..._._.. _._._........_...._........._._ 2
Q INTERESTAND LATE CHARGES .... ...................... _.. .. ». » »... »........._... »_.... ». 3
7. SECURI7YDEPOS/7 .. _...._. ___.___._.....».._.»...»».»... ........__ »._.. ».... ».........» 3
8. TENANT'S USE OF THE PREMISES _... .................... .............................................. 4
9. SERVICE AND UTILITIES ............ .... »..» ............. ............................ ........... — 4
la CONDITION OF TIE PREMISES...__. ___..._...._.._._.._._ . ............_. »_....._._.....__ S
IL CONSTRUCTION, REPALRSANDALUNTENANCE._ ..................................... _..... S
12. ALTERATIONS AND ADDITIONS _.....» .......................»......- .-- ..- ....._..... »- .........------ 6
13 LEASEHOLD IMPROVEMENTS, TENANT'S PROPERTY .... ................................... 6
14. RULESANDREGULATIONS ................. _ .............. ».. ......... ... ....... »... ............... __ 7
IS. CERTAINRIGHTS RESERVED BYLANDLORD._.._.._._ ............ ............_........_.....».._ 7
16. ASSIGNMENTAND SUBLETTING ......... .» ............ ............................................. 7
I7. HOLDING OVER ............... _ ....................... .... .........._ ............ .......................... ».... 8
M SURRENDER OF PREMISES_._........_.._._.._...._._._........__._....._. ._ ............................_ 8
19 DESTRUCTIONOR DAMAGE. „....» ......_._....... .._._.-.._ ............................ _ ............ _ 9
20L EMINENT DOMAIN
21. INDEMNIFICATION .................... .................. .........._._.......... ...._. »..... »... »... ». »......10
22. TENANT' SEMUZANCE_ ........................ .... ............................. ..... ...................... 10
23. WAIVER OF SUBROGATION..._ ....... _ ........................................»....... .............................10
24. SUBORDINATIONANDATTORNMENT ................................. .. ....._._....................... 10
15. TENANT ESTOPPEL
26. TRANSFER OF LANDLORD'S INTEREST
11
II
27. DEFAULT. .................................................................... »..._....... .........._.................... 11
18. BROKERAGE FEES ............... ... .............................................................................. 13
29. NOTICES ............................... ........... .................. ..... ... ................... .......... __ .... _ ........ 13
X GOVERNMENTENERGYOR UTILI TYCONTROLS ....................... .................. »..........13
31. RELOCATION OF PREMISES ............................................................... » »...............13
31 QUIET ENJOYMENT........._ ...............„......„....»........»..__......._.. .._...._.._....._....._._._.... 13
33.OBSERVANCE OF LAW. ........................... .„.............._......... . »._._._...._..._._..........._ 14
34. FORCE MAJEURE .... ......... ............. _ .... ....» ................................... .... ...................... 14
35. CURING TENANT'S DEFAVLTS ................ ..........................».-.- .............................. 14
36. SIGN CONTROL. _._.... - ._........_....._.._.. _._....._ ........... ...... ».._. ».._.....__.._....14
37. MISCELLANEOUS .................. _ .. „.„ ......_..._........_.... ....._....... .............. 14
m
Ify of Newport Beade NO. BA- 08BA -067
BUDGET AMENDMENT
2007 -08 AMOUNT: $za,olo.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
FX Increase Expenditure Appropriations AND X Decrease in Budgetary Fund Balance
Transfer Budget Appropriations No effect on Budgetary Fund Balance
SOURCE:
X from existing budget appropriations
from additional estimated revenues
X from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase and transfer expenditure appropriations for the lease with Jakosky Properties for City office space
at 503.32nd Street.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
'Fund Account Description
010 3605 General Fund - Fund Balance
REVENUE ESTIMATES (3601)
Fund /Division Account
EXPENDITURE APPROPRIATIONS (3603)
Description
Amount
Debit Credit
$21,560.00 *
Division Number
Account Number
" Automedo System Errtry.
Signed:
Signed:
Date
to
Signed:
City Council Approval: City Clerk Date
Description
Division
Number
0330
City Manager - Code/Water Quality Enforcement
Account
Number
9000
Office Equipment
$8,980.00
Division
Number
2910
Building - Administration
Account
Number
9010
Computer Equipment
$4,780.00
Account
Number
9400
Office Furniture
$7,800.00
Account
Number
8030
Maintenance & Repair of Equipment $2,450.00
Account
Number
8070
Rental Property & Equipment
$21"450.00
Division Number
Account Number
" Automedo System Errtry.
Signed:
Signed:
Date
to
Signed:
City Council Approval: City Clerk Date