WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

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    1 Bernard P. Simons SBN 41094)

    Email: [email protected]

    2 REED SMITH LLP

    1901

    A venue of the Stars

    3 Suite 700

    Los Angeles, CA 90067-6078

    4 Telephone: + 1 310 734 5200

    Facsimile: + 1 310 734 5299

    5

    Pavel Ekmekchyan SBN 223222)

    6 Email: [email protected]

    Sarah Woo SBN 285412)

    7

    Email: [email protected]

    REED SMITH LLP

    8 355 South Grand Avenue, Suite 2900

    Los Angeles, CA 90017

    9 Telephone: 1 213 457 8000

    Facsimile: + 1 213 457 8080

    10

    Attorneys for Plaintiff,

    11 Western State University of Southern California,

    d/b/a Western State University College of Law

    12

    ElECTRO

    CA

    YFilED

    Supe

    ri

    or

    Co

    urt of Ca

    li

    ornia,

    Co

    unty of Orange

    7 2

    14

    at

    03

    :48 :21 PM

    Clerk of the Supe

    ri

    or

    Co

    urt

    By Da

    vo

    n lasquez, Dep uty Clerk

    13

    14

    15

    SUPERIOR COURT OF THE STATE OF CALIFORNIA

    FOR THE COUNTY OF ORANGE

    16

    WESTERN STATE UNIVERSITY OF

    SOUTHERN CALIFORNIA, d/b/a WESTERN

    17

    STATE UNIVERSITY COLLEGE OF LAW,

    18 Plaintiff,

    19

    vs.

    20 CSU FULLERTON AUXILIARY SERVICES

    CORPORATION, a California non-profit public

    21 benefit corporation,

    22

    23

    24

    25

    26

    27

    28

    Defendant.

    30-2014-00755198-C

    U

    C 0-CJ C

    Case No.

    Judge Unda M rl

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    2

    3

    1.

    The Parties

    P1aintiffis Western State University of Southern California, d/b/a Western State

    4 University College

    of

    Law, a duly organized and existing California corporation [hereinafter

    5 WSU ], doing business in the City of Fullerton, County of Orange, State of California.

    6

    7

    2. Defendant is CSU Fullerton Auxiliary Services Corporation, a California non-profit

    8 public benefit corporation [hereinafter CSU ], doing business in the City ofFullerton, County of

    9 Orange, State

    of

    California.

    10

    12

    3

    3.

    Jurisdiction and Venue

    Jurisdiction and venue are proper in the County of Orange, State of California since

    14 this declaratory relief action involves the legal rights and duties

    of

    Plaintiff and Defendant under and

    15

    pursuant to a written real property lease entered into in the County of Orange, State ofCalifornia for

    16 leased educational premises in Fullerton, California. This declaratory relief action is authorized by

    17 CCP section 1060 and is entitled to a speedy trial under CCP section 1062.3.

    18

    19

    20

    21

    4.

    llegations

    On or about September 28, 2012, WSU and CSU entered into the written lease

    22 agreement, a true and correct copy ofwhich is attached hereto as Exhibit 1 [hereinafter The

    23 Lease ]. The implied covenant

    of

    good faith and fair dealing is included in The Lease, as a matter o

    24 law. The Lease, at paragraphs 1.3, 3.0 and 47, sets forth the term of the lease and that the term can

    25 be extended by a written amendment.

    26

    27

    5.

    On or about June 24, 2014, WSU and CSU, through their duly authorized and acting

    28 agents, exchanged emails to amend The Lease by extending the lease term by one year (October

    1

    COMPLAINT FOR DECLARATORY RELIEF

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    1 2015-September 30, 2016) and by increasing the rent for the extended one year ( 117,423.25 per

    2 month to 123,294.41 per month). Attached hereto as Exhibits 2 and 3 are the emails between the

    3 authorized and acting representatives of WSU and CSU. Those emails are governed by the

    4 California Uniform Electronic Transactions Act (Ca. Civ. Code sections 1633.1-1633.17) and Ca.

    5 Civ. Code sections 1635-1644.

    7

    6.

    WSU now contends that Exhibits 2 and 3 plus the implied-by-law covenant of good

    8 faith and fair dealing, establish and confirm the amendment

    of

    The Lease, extending the lease term

    9 for one year and increasing the rent for that additional one year. CSU now claims that The Lease

    10

    was not amended by Exhibits 2 and 3 hereto and that WSU will be in breach

    of

    The Lease if it does

    11 not vacate the leased premises by September 30, 2015. Exhibits 4 and 5 hereto are true and correct

    12 copies

    of

    writings between WSU and CSU setting forth, in part, the current controversy between

    13 WSU and SCU.

    14

    15

    7.

    There is now a real, substantial and actual controversy between WSU and CSU

    16

    relating to their legal rights and duties under The Lease. A judicial declaration ofWSU s and CSU's

    17

    legal rights and duties is proper at this time

    so

    that the Court can make a judicial determination of

    18 when the lease term ends, which will avoid legal actions for either unlawful detainer or anticipatory

    19

    breach, and the disruption

    of

    school - students, faculty and the public.

    20

    21

    8.

    This declaratory relief action will resolve the real, serious and actual controversy

    22

    between WSU and CSU as to the lease termination date and the legal duties and obligations of WSU

    23

    and CSU under the existing lease terms.

    24

    25

    9.

    At all times mentioned herein, WSU has performed all express and implied-by-law

    26 terms

    of

    The Lease. Except as set forth herein, CSU has performed its obligations and duties under

    27 The Lease.

    28

    COMPLAINT FOR DECLARATORY RELIEF

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    10.

    The Lease does provide that the prevailing party

    in

    this action shall recover its

    2 reasonable attorney s fees. WSU has been required to retain counsel to bring and prosecute this

    3 action. WSU is entitled to recover its reasonable legal fees and costs, according to proof. All efforts

    4 by WSU to resolve this controversy have been rejected

    by

    CSU. This declaratory relief action will

    5 protect the interests

    ofWSU s

    students, faculty and the public.

    6

    7 WHEREFORE, Plaintiff prays for Judgment against Defendant as follows:

    8

    9

    10

    1

    11

    2

    12

    13

    3

    14

    15

    4.

    16 in equity.

    For a judicial declaration that the lease term does not end until September 30, 2016;

    For

    an award

    of

    reasonable attorneys fees to Plaintiff, according to proof;

    For an award

    of

    recoverable costs to Plaintiff, according to proof; and

    For such other and further rel ief as the Court deems

    just

    and proper, both in law and

    17

    18

    19

    20

    21

    22

    23

    24

    25

    26

    27

    28

    DATED: November 7, 2014

    COMPLAINT FOR DECLARATORY RELIEF

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    Page 1

    Exhibit 1

    EXHIBIT

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    Page 2

    Exhibit 1

    ~ A I R

    COMMERCIAL REAL ESTATE ASSOCIATION

    STANDARD INDUSTRIAL/COMMERCIAL SINGLE TENANT LEASE NET

    (DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

    1.

    Basic Provisions (Basic Provisions ).

    1.1

    Parties: This Lease ( Lease ) , da ted for reference pu rposes only S . . ; ; ; e . _ p . . . ; ; t e - . . : : c : r ~ 2 - 8 - - , _ ::: 2 ;: ::c ::c2____

    __

    ____ _

    is made by and between CSU FULLERTON AUXILIARY SERVICES CORPORATION, a C a l i f o r n i a no n -p rofit

    o u b l i c

    b e n e f i t

    corpo

    r a t i o n

    (Lessor )

    and WESTERN STATE UNIVERSITY OF SOUTHERN

    CALIFORNIA,

    D/B/A

    WESTERN STATE UNIVERSITY COLLEGE

    OF LAW, a

    C a l i f o r n i a

    cor oor a t i on

    ( Lessee ).

    (collectively the Parties, or Individually a Party ) .

    1.2 Premises: That certain real property, including

    all

    improvements therein or to be provi

    ded

    by

    Less

    or under

    the

    terms of th is Lease,

    andcommo

    nlyknownas

    l l l l

    Nor th

    Sta te

    Col lege Bo u

    l evard,

    F u l l e r t o n

    located

    in

    the County of O r a : :c:;o.::e:.__ _ _____ _ _ _ _

    __

    _ _

    , State of C a l i f o r n i a

    and generally described as (describe briefly

    the

    nature of the property and , if applicable,

    the

    Project , if

    the

    property is located within a Project)

    Two (2) bu i l d ings t o t a l i n g approx i m

    a t e l y

    86,495 useable square

    f ee t ,

    loca ted

    on

    3.628

    acres

    o f

    land more

    p a r t i c u l a r l y

    descr ibed

    on

    Exh ib i t A a t tached here to

    and all

    o th e r

    imorovements

    the reon , and

    oark ing

    areas and appur tenances

    (Premises ) . (See also Paragraph 2)

    1.3

    Term:

    Three ( 3 )

    years

    and Zero (0)

    months ( Orig inal Term ) commencing

    on

    the Clos ing Date (as d e f in e d

    in

    Paragraph

    51 ) ( Commencement Date )

    and

    ending

    on

    the

    da

    y

    b e fo re

    the

    t h i r d

    (3rd)

    ann ive rsa ry o f

    the

    Commencement

    Date

    (' Expiration Date). (See

    also

    Pa

    ragraph 3)

    H

    Earl} PessessleR: If

    IRe

    Preffiise&-

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    Page 3

    Exhibit 1

    0 a plot plan depleting the Premises ;

    0 a current set of the Rules and Regulations;

    0 a Work Letter:

    * Subject

    to

    revision based on any change of

    the Commence

    ment

    Date

    0 other (specify) . Exh ib i t A

    Lega

    l Descr i

    pt ion

    Exh ib i t B

    Schedule of Base

    Rent

    2.

    Premises

    .

    2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental , and

    upon all of the terms. covenants and conditions set forth in this Lease.

    10

    1Rile

    IRe a ~ ~ r e x i f f i a l e S i : j t , ~ a r e feelaQe ef

    IRe

    Preffiises F lay Ra e lleeA t , ~ s e a iA

    IRe F larlteliA sf IRe PreF lises fer ~ " ' r ~ e s e s sf G s F l ~ a r i s e ~ The Base Rent stated herein

    is

    NOT tied

    to

    square footage and is not subject to

    adjustment should the actual size be determined to be different. Note: Lessee is advised to verify the actual size prior to executing

    this

    Lease.

    2.2

    Condition. lesser

    sl=lall a eli er

    ll=le

    Premises Ia

    lessee

    13reem sleaA

    aAS

    ffee sf aellris sA

    tl=le

    GemmeAsemeAI b'ate er

    tl: e

    early

    F I G S 6 E G & i o R - G a ~ v e r lirsl eesurs

    S t a ~ ~ ~ e

    r e a

    se

    P

    s l essee oR aA alfset b

    as

    is. le ssee sl:lall lla a IRa riglll Ia lermiRa le

    tl:li

    s

    be

    u upafl-3l}

    9a)

    s

    ritteR ABliss

    te

    besser.

    (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only

    to

    non-voluntary ,

    unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee

    as

    a result of an actual or proposed

    change in use, change in intensity of use, or modification

    to

    the Premises then , and in that event, Lessee shall either: (i) immediately cease such

    changed use or intensity of use and/or take such other steps as may be necessary to eliminate the requirement for such Capital Expenditure, or

    (ii)

    complete such Capital Expenditure at its own expense. Lessee shall not, however, have any right to terminate this Lease.

    2.4 Acknowledgements. Lessee acknowledges that: (a) it has been given an opportunity to inspect and measure the Premises, (b) it

    PAGE 2

    OF

    23

    2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

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    Page 4

    Exhibit 1

    Flas eeeA

    all

    qse l Bl bess

    a

    aAEHer

    8reii8FG te satiSPj

    itself . ill: res lestte IJ:Ie..si.ce-a00-6eAGilioo

    was the pr io r

    owner

    and occupan t and

    WaS

    there fore fami l ia r

    With

    the COndit ion of the Premises (including but not limited

    to

    the electrical, HVAC and fire sprinkler systems,

    security, environmental aspects, and compliance with Applicable Requirements

    and

    the

    Americans with Disabilities Act), and their suitability for

    Lessee's intended use,

    (c)

    Lessee has made such invest igation

    as it

    deems necessary with reference

    to

    such matters and assumes all responsibility

    therefor as the same relate to its occupancy of the Premises, (d) it is not relying

    on

    any representation as to the size

    or

    condi t ion of the Premises

    made by Brokers or Lessor, (e) the square footage of the Premises was not material to Lessee's decision

    to

    lease the Premises and pay the Rent

    stated herein, and

    (f)

    neither Lessor, Lessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said

    matters other than

    as

    set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers have made no representations, promises or warranties

    concerning Lessee's ability

    to

    honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor's sole responsibility to investigate the financial

    capability and/or suitability of all proposed tenants.

    2.5

    Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph

    2

    shall be of no force or effect if immediately

    prior to the Start Date Lessee was the owner or occupant of the Premises.

    In

    such event, Lessee shall be responsible for any necessary corrective

    work.

    3.

    Term.

    3 1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3

    3.2

    Poeeeeelon.

    As

    the resul t of

    owning

    the Premises immediate ly before the Closing Date. Lessee

    shall

    have

    possess ion

    of the Premises as of the Commencement Date .

    E a i ' l ~ & l & f h - - - - A R ) ' - f l f O isleA l'lereiA

    g r a A i i A ~

    bessee Earl) Pessess

    ieR

    er

    t ~ e

    Prell' lses

    1s

    stJiljeet

    Ia aAel GsAElllleAee l j38R

    the PreFRi&el>-belflg

    . l i G e f l G I H ) H R G ~ f l l : l e F ; - i f

    bessea is

    req Jireel

    Ia flarfsrm aRy s t ~ F * I i t i G R & - f l ~ F f f i R f . . w i I H f l e . . S t a F I - G a t e ,

    IRe Start Qata slla'l

    aCGIJr

    but bessar FAay-elool-tG-will'ltlold-pessessiQA I AIII

    SI GA seAelill.eR

    & are satisfied

    4. Rent.

    4.1.

    Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit) are

    deemed to be rent ("Rent").

    4 2 Payment . Lessee shall cause payment

    of

    Rent

    to

    be received by Lessor in lawful money of the United States, without offset or

    deduction (except

    as

    specifically permitted in this Lease), on or before the day on which it is due. All monetary amounts shall be rounded to the nearest

    whole dollar. In the event that any invoice prepared by Lessor Is Inaccurate such inaccuracy shall not constitute a waiver and Lessee shall

    be

    obligated

    to

    pay the amount set forth in this Lease Rent for any period during the term hereof which

    is

    for less than one full calendar month shall be prorated

    based upon the actual number of days of said month. Payment of Rent shall be made

    to

    Lessor at its address stated herein or

    to

    such other persons or

    place as Lessor may from time

    to

    time designate in writing. Acceptance of a payment which

    is

    less than the amount then due shall not be a waiver of

    Lessor's rights to the balance of such Rent. regardless

    of

    Lessor's endorsement of any check

    so

    stating. In the event that any check , draft,

    or

    other

    instrument of payment given by Lessee

    to

    Lessor is dishonored for any reason, Lessee agrees to pay

    to

    Lessor the sum of 25 in addition to any Late

    Charge and Lessor, at its option, may require all future Rent be paid by cashier's check. Payments will be applied first to accrued late charges and

    attorney's fees, second to accrued interest. then to Base Rent, Insurance and Real Property Taxes, and ny remaining amount to any other outstanding

    charges or costs.

    4.3 batement o Baee Rent. Notwi ths tand ing

    any

    provis ion o f this

    Lease

    to the

    con t ra ry

    Base

    Rent shall be

    aba ted

    for the

    number

    o f days, if

    any,

    between the Commencement

    Date

    and the date upon which

    Escrow Holder under

    the

    Purchase

    Agreement wire t r ans fers the

    proceeds

    due Seller under the

    Purchase

    Agreement .

    except for

    any

    delays caused by Seller or the fai lure to t r ans fer

    de

    minimus

    am oun ts

    of such funds

    (which shal l

    not

    in any

    event

    exceed

    25,000).

    1 :3

    '\ssealatieR Fees lA

    aeiEiitiaR

    Ia IRe 8ase ReAl, bessee

    s11all

    13a1 Ia besser aasA maRIA aR amaijRI e ( ~ o ~ a l Ia aA) a Rer's

    assssiatieR ar ssRelsmiRiiJm fees Ia iee er assesses

    a ;)aiRsl IRe

    F ramises. Saiel maRies shall sa t>aia at IRe same time aRE iA IRa same ffiaRRer

    as

    IRe

    5. Security Depos it. Lessee shall deposit with Lessor upon execution hereof the Security Deposit as security for Lessee's faithful performance

    of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Breaches Qefa8lts ~ A e l e r this Lease, Lessor may use, apply or retain all

    or any portion

    of

    said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/

    or

    to reimburse

    PAGE

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    OF

    23

    INITIALS

    2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

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    Page 5

    Exhibit 1

    or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor properly uses or

    applies all or any portion of the Security Deposit, Lessee shall within 10 business days after written request therefor deposit monies with Lessor

    sufficient

    to

    restore said Security Deposit

    to

    the

    full

    amount required

    by

    th is Lease. If

    111e Base ~ e A t

    iRsreases GioiFiR

    tl1e lerFR

    ef 111is bease, bessee

    st:lall. ioiJl BR ritte RFllQoiB t freFR le ss er, daposiklddilloRal FAeRies itn le sser sa tl>atll'le lelal a

    FRElllA

    '

    ar

    t

    il

    e s ~ r i l Qape &t sllall

    a

    all 'tFRes bea r u e

    saFRe llfapeFtieA le IRe iRsreasell 9ase ~ e A t a s - t l l e - i R ~ ~ I O O - e - t i H A e - A i l i a l Base ReAl. S lewiEI tR e gree I

    I

    tse fle Ia

    as

    GaFR

    FR alilale a FRaterial sl=la

    A jB

    1Ft tile llllsiRes s

    ef

    6 0 0 G f l ~

    & & i g f l e e , . . . b e & s e r

    sRall t:la e lt:la ri JRl Is iRsraasa

    IRa

    S e s < J r i t ~ Q e ~ e s i l te IRe eHieA'

    AesessaF). iA besser's reaseRallle jioia jFReRt , te

    asseioiRl

    fer

    aR)

    iRs eases ear

    aAG-tear IRa

    I IRe PreFRises F A a ~ s"'ffer

    as

    a rewlt IRereef. If a G A a f l g e i F H O O ~ F i A g t ~ l ea

    se

    a R E I k l w ~ E H ~ I - s a R a i t i e A ef bessee-fs.;-4A..besseFs

    raaseAaela

    jllS JFRBAI,

    sigAillsaAtl)

    r e E I ~ < s a E I

    bas

    sea

    sl:lalklapesit

    SloiGR

    aEIEiilieAal FAeRies itA

    basser

    as

    sllall

    ee &loiflisieAI

    te

    Galois

    a

    IRa

    S a s < ~ r i l ) '

    t;)epesil

    1&-b&-at-;H;eFRFRereia ll) rea6eA alll e Ia el lased aA iR saAEiiltaR l esser sllall Rat be re l"'ireEI te keep lAB

    e s t ~ r

    9epesil

    separate ffeFR its J B A e ~ a l assat,mls. Within

    9

    days after the expiration or termination of this Lease, Lessor shall return that portion of the Security

    Deposit not used or applied by Lessor .

    No

    part of the Security Deposit shall be considered to

    be

    held in trust, to bear interest or to be prepayment for

    any monies

    to

    be

    paid

    by Lessee under this Lease;

    provided,

    however, that if

    Lessee

    is not

    in

    Default of any of its

    obligations

    of this Lease, including, without limitation, complying with

    the

    provisions of Section 7.4(c), then

    Lessee shall

    h ve

    the right to apply any

    remaining balance

    of the Security Deposit to the partial

    payment

    of

    the Base Rent

    for

    the last month of the Term of this Lease upon the

    date

    Base Rent

    would

    otherwise be due

    for

    such

    month.

    Use.

    6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or

    any

    other legal use which is reasonably comparable

    thereto,

    and

    for

    no

    other purpose. Lessee shall not use or permit the use of

    the

    Premises in a manner that is unlawful, creates damage, waste or a

    nuisance. . er Rat

    E l i s t ~ F l l s e s s ~ J l a A t s

    ef s a ~ s e s

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    Page 6

    Exhibit 1

    to the contrary, and for the

    avoidance

    of

    doubt.

    Lessee

    shall

    have no

    obligation

    to

    remediate

    any

    Hazardous

    Substances that

    existed within

    the

    Premises

    prior to the Commencement

    Date.

    The

    foregoing exculpation

    shall not

    (i)

    authorize

    Lessee

    to

    continue

    the use of any such

    Hazardous

    Substances, or (ii)

    excuse

    Lessee

    from

    any liability resulting

    from

    making

    any

    such Hazardous

    Substance

    Condition worse.

    (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its

    employees and lenders, harmless from and against any and all environmental damages, including

    the

    cost of remediation, which result from

    Hazardous Substances w l l ~ e a

    on

    the Premises * i G H & - l : e s 5 e e ~ A G ~ r which are caused by l f l e - r o s ~ l i g e A G & - G f - W i i i M - f f i i 6 W f l G I G t

    ~ L e s s o r ,

    its agents,

    COntraCtOrS

    or employees. Lessor's obligations,

    as

    and when required

    by the

    Applicable Requirements, shall include, but

    not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this

    Lease.

    (f)

    Investigations and Remediatlons. besser slolall relaiR llole r e s ~ e R s i a i l i l ;

    aRB

    1 1 a ~ fer aR; iR e s l i ~ a t i e R s er reffieBialieR

    f f i e a s ~ J r e s

    reEJilireB ay eFRffiBRial

    eRiilies

    Ra iR

    jiJ

    FlsdiGtion-wi lol

    resjlesl Ia the

    existeAGe ef l o f a Q a r 1 a ~ o ~ s

    SullslaAGes

    eA

    PreFllises

    bessee's e & S ~ I l a A G ' ) ,

    UAiess

    s u s h ~ ~ r Is r e q ~ , ~ l r e d

    a - i H 9 6 \ I ~ e s s e e ' s

    use {iAshl1iRg AIJeralleAs'' , as a e ~ A e c l ifl llaFa Jf3Jli'1 7.a{a)

    aele ) t IRe

    P r e f f i i s e ; - i F I - W i l i e ~ l

    bessee shall

    l l ~ F i s l b l e - l e r - s t ~ O O - p a y m e A h

    Lessee shall cooperate fully

    in

    any

    woo investigative

    activities at the request of Lessor, including allowing Lessor

    and

    Lessor's agents

    to

    have reasonable access

    to

    the Premises

    at

    reasonable times

    in

    order

    to

    carry out any investigation or remediation.

    bessGr- 6-IAvesllgallve-aRG-reffiedial-re6fJGAGibil#ies-,

    (g) Lessor Termi nat ion Opt ion, If a Hazardous Substance Condition (see Paragraph 9.1 (e)) occurs during the term of this Lease,

    unless Lessee

    is

    legally responsible therefor (in which case Lessee shall make

    the

    investigation

    and

    remediation thereof required

    by the

    Applicable

    Requirements and this Lease shall continue in full force and effect, but subject

    to

    Lessor's rights under Paragraph 6 .2(d) and Paragraph 13), Lessor

    may, at Lessor's option, either

    (i)

    investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at

    Lessor's expense, in which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 4

    times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge

    of the occurrence of such Hazardous Substance Condition, of Lessor's desire

    to

    terminate this Lease

    as

    of the date 60 days following the date of such

    notice. In

    the

    event Lessor elects to give a termination notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee's

    commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 4 4-2-times

    the then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within

    30

    days following such commitment.

    In

    such event, this Lease shall continue in full force and effect,

    and

    Lessor shall proceed

    to

    make such remediation

    as

    soon

    as

    reasonably possible after the required funds are available. If Lessee does not give such notice

    and

    provide the required funds or assurance

    thereof within the time provided, this Lease shall terminate

    as

    o the date specified in Lessor's notice of termination.

    6.3 Lessee's

    Compliance with

    Applicable Requirements. Except

    as

    otherwise provided

    in

    this Lease, Lessee shall, at Lessee's

    sole expense, fully, diligently and

    in

    a timely manner, materially comply with

    all

    Applicable Requirements,

    and the

    requirements of any applicable fire

    insurance underwriter or rating bureau,

    aRB

    IRe

    reGeffiFABREiatieRs ef besser's 9R jiReers aRa'er GeRso.ltaR s Ri R relate iR aRI ffiaRRer te

    IRe

    so.sl:l

    R e E J ~ i r e f f i e R t s ,

    without regard

    to

    whether such Requirements are now

    in

    effect or become effective after the Start Date;

    provided, however,

    that

    Lessee shall

    have no

    obligation to remediate any Hazardous Substances that existed within

    the

    Premises

    prior

    to the

    Commencement Date.

    The foregoing

    exculpation

    shall not (i) authorize Lessee to

    continue

    the use of

    any

    such

    Hazardous Substances, or

    (ii)

    excuse Lessee from

    any liability resulting

    from

    making

    any

    such

    Hazardous Substance Condition worse. If Lessor has a reasonable

    basis

    to believe that Lessee is not

    complying with any Applicable

    Requirements for which

    Lessee

    is

    required

    to comply

    with

    pursuant to this Lease,

    Lessee shall, within 10 business days after receipt of Lessor s written request. provide Lessor with copies of

    all

    permits and other documents, and

    other information evidencing Lessee's compliance with any Applicable Requirements

    tO

    the

    extent

    required

    for COmpliance therewith

    j) Gifi6G-by-l-e6 9f, and shall immediately upon receipt. notify Lessor

    in

    writing (with copies of any documents involved) of any threatened or actual

    claim, notice, citation, warning, complaint or report pertaining lo or involving the failure of Lessee or the Premises

    to

    comply with any Applicable

    Requirements. Likewise,

    to

    the

    extent Lessee becomes aware thereof,

    Lessee shall immediately give written notice to Lessor

    of: (i)

    any

    water damage to the Premises and any suspected seepage, pooling, dampness or other condition conducive

    to

    the production of mold; or (ii) any

    mustiness or other odors that might indicate the presence of mold in

    the

    Premises.

    6.4 Inspection; Compliance. Subject to the provisions of Section 55

    below,

    Lessor and Lessor's Lender'' (as

    defined in Paragraph

    30)

    and consultants shall have the right to enter into Premises at any time, in

    the

    case of an emergency, and otherwise at

    reasonable times after reasonable notice, for the purpose of inspecting the condition of the Premises

    and

    for verifying compliance by Lessee with this

    Lease . The cost of any such inspections shall

    be

    paid

    by

    Lessor. unless a violation of Applicable Requirements, or a Hazardous Substance Condition

    (see paragraph 9.1) is found

    to

    exist or

    be

    imminent, or

    the

    inspection is requested or ordered by a governmental authority, except to

    the

    extent

    that Lessee

    would

    not otherwise

    be

    responsible under this Lease. In such case, Lessee shall upon request reimburse Lessor for

    the cost of such inspection, so long as such inspection is reasonably related to the violation or contamination. In addition, Lessee shall provide copies

    of all relevant material safety data sheets (MSDS) to Lessor within 10 business days of

    the

    receipt of a written request therefor.

    7 Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.

    7 1

    Lessee's Obligations.

    (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2 3 (Compliance), 6.3 (Lessee's Compliance with Applicable

    Requirements), 7 2 (Lessor's Obligations), 9 (Damage

    or

    Destruction), and 14 (Condemnation), and

    except tO the

    extent

    CaUsed by

    Lessor, Lessor's agents, employees and contractors. Lessee shall, at Lessee 's sole expense, keep the Premises, Utility Installations

    (intended for Lessee's exclusive use,

    no

    matter where located), and Alterations

    in

    good order, condition and repair (whether

    or

    not the portion of the

    Premises requiring repairs, or the means of repairing

    the

    same, are reasonably

    or

    readily accessible

    to

    Lessee, and whether or not

    the

    need for such

    repairs occurs as a result of Lessee's use, any prior use.

    the

    elements or

    the

    age or such portion of

    the

    Premises), including, but not limited to , all

    equipment or facilities, such as elevators, plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fire protection system,

    PAGE 5 OF 23

    INITIALS

    2001 AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    11/43

    Page 7

    Exhibit 1

    fixtures, walls (interior and exterior), foundations, ceilings, feef&;-roof drainage systems , floors, windows, doors, plate glass, skylights, landscaping,

    driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways located in, on, or adjacent to the Premises. Lessee. in keeping the

    Premises in good order, condition and repair, shall exercise

    and

    perform good maintenance practices, specifically including the procurement

    and

    maintenance of the service contracts required

    by

    Paragraph 7.1

    (b)

    below. Lessee's obligations shall include restorations, replacements

    or

    renewals

    when necessary

    to

    keep

    the

    Premises

    and

    all improvements thereon or a part thereof in good order, condition

    and

    state of repair. Lessee shall, during

    the

    term of this Lease, keep the exterior appearance of

    the

    Building in a first-class condition (including, e.g. graffiti removal) consistent with the exterior

    appearance of other similar facilities of comparable

    age and size

    in

    the

    vicinity, including, when necessary,

    the

    exterior repainting of

    the

    Building .

    (b) Service Contra cts. Lessee shall, at Lessee's sole expense , procure and maintain contracts, with copies to Lessor, in

    customary form

    and

    substance for,

    and

    with contractors specializing

    and

    experienced

    in

    the

    maintenance of

    the

    following equipment

    and

    improvements, if any,

    if

    and when installed on the Premises: (i) HVAC equipment , (ii) sailer, aRe jlFessllre essels, (iii)

    fire

    exliAfjlliSAiR i

    SlsleFRs,

    i f l s l ~ l a f m . . - a A S

    6FR9 9

    eetestieA, (i) l a o o ~ f A i a t i 9 f i - - & Y & I e F R & ; - - f > . < } f G & k G V e f i ~ r c H R S r i A d ('

    i) GlarifieFS and

    (i i)

    elevators. However, Lessor reserves

    the

    right, upon notice

    to

    Lessee, to procure and maintain

    any or

    all o such service contracts,

    and

    Lessee shall

    reimburse Lessor, upon demand, for the cost thereof.

    (c) Failur e to Perform. If Lessee fails to perform Lessee's obligations under this Paragraph 7.1 Within the

    applicable

    not ice and CUre period, Lessor may enter upon the Premises after 10 days' prior written notice to Lessee (except

    in

    the case of

    an

    emergency,

    in

    which case no notice shall be required), perform such obligations

    on

    Lessee's behalf, and put the Premises in good order, condition and repair, and

    Lessee shall promptly pay to Lessor a sum equal to 115% of the cost thereof.

    (d) Replacement. Subject to Lessee's indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee

    of liability resulting from Lessee's failure to exercise and perform good maintenance practices. if an item described in Paragraph

    7.1

    (b)(i) cannot be

    repaired other than

    at

    a cost which

    is

    in excess of

    50

    of the cost of replacing such item, then

    such

    item shall

    be

    replaced

    by

    Lessor. and

    the

    cost

    thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease,

    on

    the date on which Base Rent is due, an amount equal to the product of multiplying the cost of such replacement by a fraction. the numerator of which is

    one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest

    on

    the unamortized balance but may prepay its

    obligation

    at

    any time. Notwi thstanding the foregoing, Lessee shall

    not

    be

    required

    to replace the

    roof.

    7.2 Lessor's Obligati ons. Subject to the provisions of Paragraphs

    22

    (Condition),

    2 3

    (Compliance),

    9

    (Damage or Destruction)

    and

    14 (Condemnation), it is intended by the Parties hereto that Lessor have no obligation. in any manner whatsoever. to repair and maintain the Premises,

    or the equipment therein, all of which obligations are intended to be that of the Lessee 8XCept

    for the roof and the St ructural

    elementS

    of t he Building i.e.,

    the foundat ion and load

    bearing walls, Building

    facade, and

    columns, except

    to the

    extent

    caused by Lessee or any of i t s agents, employees. cont ractors assignees. subtenants

    or

    invitees. tt is the intention

    of the Parties that the terms of this Lease govern the respective obligations of the Parties as

    to

    maintenance

    and

    repair of

    the

    Premises, and they

    expressly waive the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease.

    7,3 Utility Instal lations; Trade Fixtures; Alterations.

    (a) Definitions. The term "Utility Installati ons" refers to

    all

    floor

    and

    window coverings, air and/or vacuum lines, power panels,

    electrical distribution, security and

    fire

    protection systems, communication cabling, lighting fixtures, HVAC equipment, plumbing, and fencing in or on

    the Premises. The term "Tra de Fixtures shall mean Lessee's machinery and equipment that can be removed without doing material damage to the

    Premises. 'fhe term Alterations shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by

    addition

    or

    deletion. "Lessee Owned Alterations and/or Utility Installatio ns"

    are

    defined as Alterations and/or Utility Installations

    made

    by Lessee

    that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

    (b) Consent . Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor's prior written consent.

    Lessee may, however, make non-structural Alterations or Utility Installations to the interior of the Premises (excluding the roof) without such consent but

    upon notice

    to

    Lessor.

    as

    long

    as

    they

    are

    not visible

    from

    the

    outside,

    do

    not involve puncturing, relocating or removing

    the

    roof or any existing walls,

    will not affect

    the

    electrical, plumbing, HVAC, and/or life safety systems, and

    the

    cumulative cost thereof during this Lease as extended does not

    exceed a sum equal to 3 month's Base Rent

    in

    the aggregate or a sum equal to one month's Base Rent

    in

    any one year

    (excluding

    painting,

    Carpeting and

    Wall

    COVerings) . Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything

    on

    the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to utilize

    a

    contractor

    chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require

    the

    consent of the Lessor

    shall

    be

    presented

    to

    Lessor in written form with detailed plans. Consent shall

    be

    deemed conditioned upon Lessee's:

    (i)

    acquiring all applicable

    governmental permits. (ii) furnishing Lessor with copies of both

    the

    permits and

    the

    plans and specifications prior to commencement of

    the

    work, and

    (Iii) compliance with

    all

    conditions of said permits and other Applicable Requirements

    in

    a prompt

    and

    expeditious manner Any Alterations or Utility

    Installations shall be performed in a workmanlike manneJ with good and sufficient materials. With respect to any physical changes to

    the conf igurat ion

    of the Premises, Lessee shall promptly upon completion furnish

    lessor

    with as-built plans

    and

    specifications. For work

    which costs an amount in excess of one month's Base Rent. Lessor may condition its consent upon Lessee providing a lien

    and

    completion bond in an

    amount equal

    to

    150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee's posting an additional Security Deposit with

    Lessor.

    (c) Liens ; Bonds. Lessee shall pay, when due,

    all

    claims for labor or materials furnished or alleged to have been furnished to or

    for lessee at or for use

    on

    the Premises, which

    Claims

    are or may

    be

    secured

    by

    any mechanic's or materialmen's lien against the Premises or any

    interest therein. Lessee shall give Lessor not less than

    10

    days notice prior

    to

    the commencement of

    any

    work in,

    on

    or about the Premises,

    and

    Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, Claim or demand, then Lessee

    shall, at its sole expense defend and protect itself, Lessor

    and

    the Premises against the same and shall pay and satisfy any such adverse judgment that

    may be rendered thereon before the enforcement thereof. If Lessor shall require for WOrk COSting more t han $500,000, Lessee shall

    furnish a surety bond in

    an

    amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying lessor against liability

    or the

    same.

    If

    Lessor elects

    to

    participate in any such action, Lessee shall

    pay

    Lessor's attorneys' fees

    and

    costs.

    7.4 Ownershi p; Removal; Surrender; and Restoration.

    PAGE 6 OF

    23

    INITIALS

    INITIALS

    2001 -AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4112E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    12/43

    Page 8

    Exhibit 1

    (a) Ownership. Subject to Lessor's right to require removal or elect ownership as hereinafter provided, all Alterations and Utility

    Installations made by Lessee shall

    be

    the property of Lessee, but considered a part of the Premises. Lessor may. at any time, elect in writing

    to be

    the

    owner of

    all

    or any specified part of the Lessee Owned Alterations and Utility I nstallations. Unless otherwise instructed per paragraph 7 4(b) hereof,

    all

    Lessee Owned Alterations and Utility Installations shall. at the expiration or termination

    of

    this Lease. become the property

    of

    Lessor and be

    surrendered by Lessee with

    the

    Premises.

    (b) Removal. By delivery to Lessee

    of

    written notice from Lessor not earlier than 90 and not later than 30 days prior to

    the

    end of

    the term of this Lease, Lessor may require that any or

    all

    Lessee Owned Alterations or Utility Installations

    be

    removed by the expiration

    or

    termination of

    this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without

    the

    required consent

    (to

    the

    extent

    that

    such

    consent

    was

    required).

    (c)

    Surrender; Restoration. Subject to Sections 9 and 14 Lessee shall surrender

    the

    Premises by the Expiration Date

    or any earlier termination date, with

    all

    of the improvements, parts

    and

    surfaces thereof broom clean and free of debris, and

    in

    good operating order,

    condition and state of repair, ordinary wear and tear excepted, except

    to

    the

    extent

    caused

    by

    the gross negligence

    or

    willful

    misconduct of Lessor or its agents . "Ordinary wear and tear" shall not include any damage or deterioration that would have been

    prevented by good maintenance practice. Notwithstanding

    the

    foregoing,

    if

    this Lease

    is

    for

    12

    months or less, then Lessee shall surrender the

    Premises in the same condition as delivered

    to

    Lessee on

    the

    Start Date with

    NO

    allowance for ordinary wear and tear. Lessee shall repair any

    damage occasioned

    by the

    installation,

    ma

    intenance or removal o f Trade Fix1ures, Lessee owned Alterations and/or Utility Installations. furnishings, and

    equipment

    as

    well as the removal of any storage tank installed by or for Lessee. Lessee shall completely remove from the Premises any and all

    Hazardous Substances brought onto

    the

    Premises by or

    for

    Lessee, or any third party (except Hazardous Substances which were deposited

    via

    underground migration from areas outside of the Premises) even if such removal would require Lessee

    to

    perform or pay for work that exceeds

    statutory requirements. Trade Fixtures shall remain the property of Lessee and shall be removed by Lessee. Any personal property of Lessee not

    removed on or before the Expiration Date or any earlier termination date shall be deemed to have been abandoned by Lessee and may be disposed of

    or retained

    by

    Lessor

    as

    Lessor may desire. In addition, effective as of the

    termination

    of

    this Lease , Lessee.

    at

    its

    sole

    expense. shall also terminate, and cause

    the

    Premises to be surrendered free

    of.

    any service Contract (as

    defined in this Lease

    and

    the

    Purchase

    Agreement). sublease. or license

    (including.

    without limitation. the

    Concession

    License (as defined in the Purchase Agreement). except as otherwise expressly indicated in writing

    by

    Lessor. The failure by Lessee to timely vacate

    the

    Premises pursuant to this Paragraph 7.4(c) without the express written consent

    of

    Lessor

    shall constitute a holdover under the provisions o f Paragraph 26 below.

    8.

    Insurance; Indemnity.

    8.1

    P a ~ m o n t

    For lnsuranoo.

    e s s e ~ i f e d

    ~ ; n E i e r

    Para lFafl

    h 8

    e X e 9 1 - l & - t ~ e

    el6ent

    ef tl=ie sest

    allriautal te

    to

    lial lllly

    ln suraAse

    sarfies

    G)

    lesser unaer

    PaFa lFafl

    l'l

    8.: (9) iR

    e11sess

    e'

    i

    ,QQQ ,

    QQQ

    )er esGYFFeRse . P r e m F T t s ler p9 fiG

    J)eriaas

    samFBensiR J prier

    ta

    ar

    exteAiiiAg llEi) aAEl

    the

    bease term sl'lall be p r a r a t ~ F I e s p e r u l

    le the

    lease

    teFm PayFBeAt sha ll lle FBaae Bl

    lessee

    le

    lesser

    itl=liR

    1

    Q Ba)& Ieite iR l

    reseipt ef

    aR

    iA"aise.

    6.2 Liability Insurance.

    (a) Carried by Lessee. Lessee shall obtain and keep

    in

    force a Commercial General Liability policy

    of

    insurance protecting Lessee

    and Lessor

    as an

    additional insured against claims for bodily injury, personal injury

    and

    property damage based upon

    or

    arising out of

    the

    use, occupancy or maintenance of

    the

    Premises and

    all

    areas appurtenant thereto. Such insurance shall be

    on an

    occurrence basis providing single

    limit coverage in an amount not less than + $3.000,000 per occurrence with

    an

    annual aggregate of not less t h a n ~ $5,000,000. Lessee shalt add

    Lessor

    as

    an additional insured by means of an endorsement at least

    as

    broad as

    the

    Insurance Service Organization's "Additional Insured-Managers

    or Lessors of Premises" Endorsement. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall

    include coverage for liability assumed under this Lease

    as

    an "insured contract" for

    the

    performance of Lessee's indemnity obligations under this

    Lease. The limits of said insurance shalt not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall provide

    an

    endorsement on its liability policy(ies) which provides that its insurance shall

    be

    primary to and not contributory with any similar insurance carried by

    Lessor, whose insurance shall be considered excess insurance only.

    (b) Carried

    by

    Lessor. Lessor, at

    itS SOle expense,

    shall maintain liabilily SUCh insurance

    as it deems

    appropriate.

    which

    shall be

    d e G F i l l e d - l ~ F a ~ in

    addition

    to,

    and not

    in

    lieu of,

    the

    insurance required

    to

    be maintained by

    Lessee. Lessee shall not be named as an additional insured therein.

    8.3 Property Insurance- Building, Improvements and Rental Value.

    (a) Building and Impro vemen ts. The Insuring Party shall obtain and keep in force a policy or policies in

    the

    name of Lessor, with

    loss payable

    to

    Lessor, any ground-lessor, and

    to

    any Lender insuring loss

    or

    damage

    to the

    Premises. The amount of such insurance shall

    be

    equal

    to

    the full insurable replacement cost of the Premises, as the same shall exist from time to lime, or the amount required by any Lender, but in no event

    more than the commercia lly reasonable and available insurable value thereof. Lessee Owned Alterations and Uutity Instal lations, Trade Fixtures, and

    Lessee's personal property shall be insured by

    Lessee not

    by

    Lessor. If the coverage

    is

    available

    and

    commercially appropriate, such policy or policies

    shall insure against

    all

    risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including

    coverage for debris removal and the enforcement of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of

    any portion of

    the

    Premises

    as

    the result of

    a

    covered loss. Said policy

    or

    policies shall also contain

    an

    agreed valuation provision in lieu

    of

    any

    coinsurance clause, waiver of subrogation, and inflation guard protection causing

    an

    increase

    in the

    annual property insurance coverage amount by a

    factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban Consumers for the city nearest

    to

    where the

    Premises are located. If such insurance coverage has a deductible clause.

    the

    deductible amount shall not exceed

    25,000 ~

    per

    occurrence, and Lessee shall be liable for such deductible amount in the event of

    an

    Insured Loss

    (bJ Lessee shall require

    each

    of

    its contractors and/or

    vendors

    to

    provide

    and maintain insurance

    coverage for general liability.

    auto liability

    and

    workers compensation with

    appropriate

    limits given the ir scope

    of w o r k . R o o t a i - V - a l u ~ M t n g - F - 8 ~ 1 - o b i ~ f ) - I R - f e F G & - - a - f l & l l & y - e f - i l ( l l i ~ f f i l m ~ O & & - t l a y < l

    l e - I G - : e & 6 G F - - a F i d

    aR)

    beRaer. A S ~ R R J ll le loss ef

    tile

    r ~ l l Renller eRe ear

    11

    1

    aR elite

    AS

    eEl perle ef R d e m ~ E k l i t l o n a l

    18Q

    d a ~

    s R e A t a l I R s ~ ; r a R e e " )

    PAGE 7 OF

    23

    INITIALS

    2001

    AIR

    COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    13/43

    Page 9

    Exhibit 1

    S

    aiEI iR

    s

    sFa

    Ase

    sl=lall

    G

    eAlaJR

    aA

    r ~ ~

    aA) sei

    Assr

    a

    AGe

    l : l & e : ; ~ A d - t l l e - a m e ~ , A l ef se er

    a

    a

    s

    M

    l tie

    3RR"'a ll) Ia

    renest IRe flFajeGieEI-ReAI i

    se

    flB)

    ab

    le

    lly

    b

    e&see

    .

    IOf-tRe

    nell 12

    FAGRl

    R

    l9Fied

    . beseee s

    J all

    be llall le fer any

    ll

    edustillle a

    rAG IJ

    R ln tile

    e"aRI ef

    ~

    ~ a s e R t P r a m l s o ~ P s e s

    are

    jjaFI

    el

    a

    ~ f ~

    R 6 a

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    14/43

    Page 10

    Exhibit 1

    maiAtaiA t t ~

    aqblireEl

    iAsblrma. If Lessee fails to maintain

    any

    such insurance, then Lessor shall

    have

    the right to

    Obtain

    SUCh COVerage and reCOVer

    110

    Of the COSt thereof. Such iAsrease

    iA

    Base ReAl remedy shall

    in no

    event constitute a

    waiver of Lessee's Default or Breach with respect

    to the

    failure

    to

    maintain such insurance, prevent the exercise of any of the other rights and remedies

    granted hereunder, nor relieve Lessee of its obligation to maintain the insurance specified in this Lease.

    9.

    Damage or Destruction.

    9.1 Definitions.

    (a) Premises Partia l Damage shall mean damage or destruction to the improvements on the Premises, other than Lessee

    Owned Alterations and Utility Installations, which can reasonably be repaired in 6 months or less from the date of the damage or destruction. Lessor

    shall notify Lessee in writing within

    30

    days from the date of

    the

    damage or destruction

    as to

    whether or not

    the

    damage is Partial or Total.

    Notwithstanding

    the

    foregoing, Premises Partial Damage shall not include damage

    to

    windows, doors, and/or other similar items which Lessee has the

    responsibility

    to

    repair or replace pursuant

    to

    the provisions of Paragraph

    7.1

    .

    (b) Premises Total Destruction shall mean damage or destruction to the Premises, other than Lessee Owned Alterations and

    Utility Installations and Trade Fixtures, which cannot reasonably

    be

    repaired

    in

    6 months or less from the date of

    the

    damage

    or

    destruction, Lessor

    shall notify Lessee

    in

    writing within

    30

    days from the date of the damage or destruction

    as

    to whether

    or

    not the damage is Partial or Total.

    (c) Insured

    Loss

    shall mean damage or destruction to improvements

    on the

    Premises, other than Lessee Owned Alterations and

    Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a),

    irrespective of any deductible amounts or coverage limits involved.

    (d)

    Replacement Cost

    shall mean

    the

    cost to repair or rebuild the improvements owned by Lessor

    at

    the time of

    the

    occurrence

    to

    their condition existing immediately prior thereto, including demolition, debris removal

    and

    upgrading required by

    the

    operation of Applicable

    Requirements, and without deduction for depreciation.

    (e) Hazardous Substance Condition shall mean the occurrence or discovery of a condition involving

    the

    presence

    of,

    or a

    contamination by, a Hazardous Substance ,

    in, on, or

    under

    the

    Premises which requires remediation.

    9 2

    Partial Damage - Insured Loss. If a Premises Partial Damage that is

    an

    Insured Loss occurs, then Lessor shall, at Lessor's

    expense, repair such damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations

    and

    Utility Installations) as soon as reasonably possible

    and this Lease shall continue in full force and effect; provided, however, that Lessee shall, at Lessor's election, make the repair of any damage or

    destruction

    the

    total cost

    to

    repair of which is $10,000

    or

    less,

    and,

    in such event, Lessor shall make any applicable insurance proceeds available

    to

    Lessee on a reasonable basis for that purpose . Notwithstanding the foregoing, if the required insurance was not

    in

    force or the insurance proceeds

    are

    not sufficient

    to

    effect such repair, the Insuring Party shall promptly contribute the shortage

    in

    proceeds (except

    as to the

    deductible which

    is

    Lessee's

    responsibility) as and when required to complete said repairs. In the event, however, such shortage was due

    to

    the fact that, by reason of the unique

    nature of the i m p r o v e ~ e n t s full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation

    to pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to

    cover same, or adequate assurance thereof, within 10 business days following receipt of writlen notice of such shortage and request therefor. If

    Lessor receives said funds or adequate assurance thereof within said 10 business day period, the party responsible for making

    the

    repairs shall

    complete them

    as

    soon

    as

    reasonably possible and this Lease shall remain

    in

    full force

    and

    effect. If such funds or assurance are not received, Lessor

    may nevertheless elect by written notice

    to

    Lessee within 10 business days thereafter to: (i) make such restoration and repair as is commercially

    reasonable with Lessor paying any shortage In proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate

    as

    of the date of casualty.

    ag e ~ s

    'l:teFeafter So long as Lessor elects to

    and does

    restore

    the Premises, Lessee

    shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such damage or destruct ion. Premises Partial Damage due to

    flood or earthquake shall

    be

    subject

    to

    Paragraph 9.

    3,

    notwithstanding that there may

    be

    some insurance coverage, but the net proceeds of any such

    insurance shall be made available for the repairs if made by either Party

    9.3 Partia l Damage

    Uninsured

    Loss. If a Premises Partial Damage that

    is

    not

    an

    Insured Loss occurs, unless caused

    by

    a

    negligent or willful act of Lessee (in which event Lessee shall make

    the

    repairs

    at

    Lessee's expense), Lessor may either:

    (i)

    repair such damage

    as

    soon

    as

    reasonably possible at Lessor's expense,

    in

    which event this Lease shall continue

    in

    full force and effect, or (ii) terminate this Lease by giving

    written notice to Lessee within

    30

    days after receipt by Lessor of knowledge of \he occurrence of such damage. Such termination shall be effective aS

    Of

    the date Of

    CaSUalty.

    60 gays lalla

    tRij

    :\e Sale e l s ~ J G R

    R91iGe In

    the event Lessor elects

    to

    terminate this Lease, Lessee shall have the

    right within 10 business days after receipt of

    the

    termination notice

    to

    give written notice to Lessor of Lessee's commitment

    to

    pay for

    the

    repair

    of

    such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or reasonably satisfactory assurance thereof within

    30 days after making such commitment.

    In

    such event this Lease shall continue

    in

    full force and effect, and Lessor shall proceed

    to

    make such repairs

    as

    soon

    as

    reasonably possible after the required funds

    are

    available . If Lessee does not make the required commitment , this Lease shall terminate

    as

    of the date of

    the casualty.

    &peGifiea iR

    Re

    t e m ~ i R a t i a A

    A9liGe

    .

    9.4 Total Dest ruct ion. Notwithstanding any other provision hereof, if a Premises Total Destruction occurs, this Lease shall terminate

    60 days following such Destruction. If the damage or destruction was caused by

    the

    gross negligence or willful misconduct of Lessee , Lessor shall

    have the right to recover Lessor's damages from Lessee, except

    as

    provided

    in

    Paragraph

    8 6

    9 5 Damage Near End of Term. If at any time during the last 6 months of this Lease there is damage for which

    the

    cost

    to

    repair

    exceeds one month's Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of

    such damage by giving a written termination notice to Lessee within

    30

    days after the date of occurrence of such damage. Notwithstanding the

    foregoing,

    if

    Lessee at that time has

    an

    exercisable option

    to

    extend this Lease

    or to

    purchase

    the

    Premises, then Lessee may preserve this Lease by,

    (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the

    repairs on or before

    the

    earlier of

    (i)

    the date which is 10 days after Lessee's receipt of Lessor's written notice purporting

    to

    terminate this Lease, or (ii)

    the day prior

    to

    the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with funds (or

    adequate assurance thereof)

    to

    cover

    any

    shortage

    In

    insurance proceeds, Lessor shall, at Lessor's commercially reasonable expense, repair such

    damage

    as

    soon

    as

    reasonably possible and this Lease shall continue

    in

    full force and effect. If Lessee fails

    to

    exercise such option

    and

    provide such

    funds or assurance during such period, then this Lease shall terminate on

    the

    date specified

    in the

    termination notice and Lessee's option shall

    be

    PAGE

    9 OF 23

    INITIALS

    2001

    AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    15/43

    Page 11

    Exhibit 1

    extinguished.

    9.6 Abatement of Rent; Lessee's Remedies.

    (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for

    which Lessee is not responsible under this Lease, the Rent payable by Lessee for the period required for the repair, remediation or restoration of such

    damage shall be abated in proportion to the degree to which Lessee's use of the Premises is impaired. but (for

    any SUCh event

    during the

    first

    three (3) years of the Term) not

    to

    exceed the proceeds received from

    the

    Rental Value insurance. All other obligations

    of

    Lessee

    hereunder shall

    be

    performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation , repair

    or

    restoration except

    as provided herein.

    (b) Remedies. If Lessor is obligated

    to

    repair or restore the Premises and does not commence,

    in

    a substantial and meaningful

    way. such repair or restoration within 90 days after such obligation shall accrue, Lessee may , at any time prior to the commencement of such repair or

    restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee's election to terminate this Lease on a date

    not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30 days

    thereafter, this Lease shall terminate as

    of

    the date specified in said notice.

    If

    the repair or restoration is commenced within such 30 days, this Lease

    shall continue in full force and effect. Commence shall mean

    e i t ~ e r

    t ~ e

    ~ > A S e A S i l i e A a l a ~ J ~ a r i z a l i 9 A 9f tAe

    j3reparatieR

    t IRe S i ~ i r e a JllaAs

    , er the

    beginning of the actual work on the Premises. ,...wl\i6llever first 9GGllfS If the restoration work is not completed within six (6)

    months

    after it

    is

    Commenced,

    as extended for delays caused

    by Lessee,

    then

    either Party not

    then

    in Default

    of

    this

    Lease shall have the

    right to terminate this

    Lease

    by delivery thirty (30)

    days prior

    written

    notice

    to

    the other

    Party, provided that

    such

    notice shall be in effective

    if

    the

    restoration

    work is completed prior

    to

    the

    termination date specified in such

    notice.

    9.7 Termination; Advance Payments. Upon lermination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable

    adjustment shall

    be

    made concerning advance Base Rent and any other advance payments made by Lessee

    to

    Lessor. Lessor shall, in addition, return

    to Lessee so much of Lessee's Security Deposit

    as

    has not been , or

    is

    not then required to

    be

    , used by Lessor

    10. Real Property Taxes.

    10.1 Definition. As used herein, the term Real Property Taxes shall include any form of assessment; real estate, general, special ,

    ordinary or extraordinary, or rental levy or tax (other than inheritance, franchise, personal income or estate taxes); improvement bond; and/or license

    fee imposed upon or levied against any legal r equitable interest

    of

    Lessor in the Premises or the Project, Lessor's right

    to

    other income therefrom,

    and/or Lessor's business

    of

    leasing, y any authority having the direct or indirect power Ia tax and where the funds are generated with reference

    to

    the

    Building address and where the proceeds so generated are to be applied

    by

    the city, county or other local taxing authority of a jurisdiction within which

    the Premises are located. Real Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase therein: {i) imposed by

    reason of events occurring during the term of this Lease , including but not limited to, a change

    in

    the ownership of the Premises, and (ii) levied or

    assessed on machinery or equipment provided by Lessor to Lessee pursuant

    to

    this Lease.

    10.2

    Payment

    of Taxes. In addition

    to

    Base Rent, Lessee shall pay to Lessor

    an

    amount equal to the Real Property Tax installment

    due at least 20 days prior to the applicable delinquency date. If any such installment shall cover any period of time prior to or after the expiration or

    termination of this Lease , Lessee's share of such installment shall be prorated, except that Lessee shall

    be

    responsible for all Real

    Property Taxes for the period prior to the Commencement

    Date

    because the parties agreed not to prorate

    such

    amounts

    pursuant to

    the Purchase Agreement. In the event Lessee incurs a late charge on any Rent payment. Lessor may

    estimate the current Real Property Taxes , and require that such taxes be paid in advance

    to

    Lessor by Lessee monthly in advance with the payment

    of

    the Base Rent. Such monthly payments shall be an amount equal to the amount of the estimated installment of taxes divided by the number of months

    remaining before the month

    in

    which said installment becomes delinquent. When the actual amount of the applicable tax bill is known , the amount of

    such equal monthly advance payments shall be adjusted

    as

    required to provide the funds needed

    to

    pay the applicable taxes. If the amount collected

    by Lessor is insufficient to pay such Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such additional sum

    as

    is necessary.

    Advance payments may be intermingled with other moneys of Lessor and shall not bear interest.

    IR

    tl1e e eRI sf a Breasfl Ill besse&-ffi.-{Re

    ~ H l s b l i g a e R s

    IJREie

    r bease,

    ll=leR

    aR) -GIJGh

    aEI

    aR

    se

    9 4 - b /

    l

    es

    ser as aRatlaili

    eFial s ~ r 98 116 11.

    10.3

    Joint Assessment. If

    the Premises are not separately assessed, Lessee's liability shall

    be

    an equitable proportion of the Real

    Property Taxes for all of the land and improvements included within the tax parcel assessed, such proportion to be conclusively determined by Lessor

    from the respective valuations assigned

    in

    the assessor's work sheets or such other informati

    on as

    may be reasonably available.

    10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all taxes assessed against and levied upon Lessee Owned

    Alterations, Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee . When possible, Lessee shall cause its

    Lessee Owned Alterations and Utility Installations. Trade Fixtures , furnishings , equipment and all other personal property

    to

    be assessed and billed

    separately from the real property

    of

    Lessor. If any of Lessee's said property shall be assessed with Lessor's real property, Lessee shall pay Lessor the

    taxes attributable to Lessee's property within 10 business days after receipt of a written statement setting forth the taxes applicable to Lessee 's

    property .

    11.

    Utilities

    and

    Services

    . Lessee shall pay for all water, gas, heat, light, power. telephone, trash d isposal and other utilities and services

    supplied to the Premises, together with any taxes thereon . If any such services are not separately metered or billed to Lessee, Lessee shall pay a

    reasonable proportion,

    to

    be determined by Lessor, of all charges jointly metered or billed. There shall be

    no

    abatement

    of

    rent and Lessor shall not be

    liable in any respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or service due to riot, strike, labor dispute,

    breakdown , accident, repair or other cause beyond Lessor's reasonable control or in cooperation with governmental request or directions. To

    the

    extent

    caused by Lessor s gross negligence as willful

    misconduct

    Base Rent shall be abated during any period

    in

    which utility

    service is

    interrupted

    and

    that

    prevents Lessee from using the Premises

    .

    12.

    Assignment

    and Subletting.

    12.1

    Lessor's Consent

    Required.

    (a)

    Lessee shall not voluntarily or by operation of law assign. transfer , mortgage

    r

    encumber (collectively,

    assign or

    assignment ) or sublet all or any part of Lessee's interest In this Lease or in the Premises without Lessor's prior written

    consent

    PAGE 10

    OF

    23

    INITIALS

    INITIALS

    2001- AIR COMMERCIAL REAL ESTATE ASSOCIATION

    FORM STN-14-4/12E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    16/43

    Page 12

    Exhibit 1

    Notwithstanding anything set forth

    above,

    Lessee may assign this Lease or sublet the

    Premises

    or any portion

    thereof (herein, a Permitted Tran6fer ) without the prior consent of Lessor to any

    Successor

    (hereinafter

    defined) or Affiliate (hereinafter defined), or to effect a transfer

    of

    ownership, control or assets of Lessee to a

    Successor or

    Affiliate

    (each,

    a Permitted Tran6feree ).

    Succeeeor is defined as any

    corporation

    or

    entity

    resulting

    from

    a

    merger or

    consolidation

    with

    Lessee or any corporation or entity succeeding to substantially

    all

    of

    the business and assets of Lessee. Affiliate is

    defined as

    any corporation or entity that through one or

    more intermediaries, controls or

    is controlled by,

    or

    is

    under

    common

    control

    with

    , Lessee ("control" meaning

    the

    possession

    of the

    power

    to direct

    or

    cause

    the direction of the

    management

    and

    policies of

    an

    entity,

    whether through

    the ownership

    of voting securities,

    by contract or

    otherwise). Further,

    any

    change of

    ownership resulting n a change of majority control from those persons or entities not having control shall not

    be

    deemed an

    assignment or

    transfer

    requiring

    Lessor's

    consent

    . Notwithstanding

    anything

    set forth above,

    any

    public

    offering or

    transfer in which

    all or

    a

    portion

    of

    Lessee's

    stock

    shall be sold or

    traded

    on

    a nationally

    recognized

    stock

    exchange

    or on

    the

    "over-the-counter" market

    or

    the sale

    of Lessee's

    stock on a nationally

    recognized

    stock

    exchange or over

    -the-counter-market

    shall

    not

    be deemed

    an

    assignment

    for

    the purposes

    of

    this

    Lease

    and

    nothing

    in this Article shall be applicable

    to, nor prohibit.

    such transaction.

    fll)

    1

    'Re

    ss

    b

    es

    se e is a sarporatieA aRd Us st aG < Is pllllli&ll trades on a AalteRal stes

    ll

    ellsRaRJe,..a.4laAga iA IRa seAi ral af bessee

    sRall aR ass igAmefll a E t ~ i r seAs eAt Th e traRsfer.

    eA

    a e bas is, ef 2 6 ~ ~

    er

    FA ore ef IRe atiAg seA' re i ef ssee-ol=ialk&A&lilule-a

    5 9 ~

    (s) Ti'le

    iA

    al aFAeAt

    af

    bassee ar its assets iR BRI traRsaG iaA, ar ser ies af traAsastiaRs (ll) a1

    af

    A'1eF JeF, sale , a s E 1 t ~ i s i t i a R ,

    f l A a R s ~ & f e f ; - l e ' l e F a g ~ I - G H ) t h e w i s e h - - w R e t h e r ar Ret a farmal-a&&igAA'1GRI er R ) f 3 G t l = l e G a t i ~ R i s bease ar bessee's a s ~ F ;

    e s t ~ l t s

    er ill l l i A a red l:IGli&fH:IHl1e-Nei-Wa r4 ef b

    es

    &e e , 311 aA'10

    il

    RI Jfeater thaR 2 5 ~ 4 ef

    s t ~ G R

    Net Wa RR as as relr ase11lell at tJ;e

    tiA'1e er tile F I - O f . . l h l H , e a s e - H J 4 . . 1 ~ m e - o k l 1 t H n

    - H G e A

    & & i j j ~ besser has GaAs eR es .

    er

    as it e K - i & I

    raA&a sti

    eA

    er

    traF sa sUeAs &ll&R re EIY G

    lert

    111slle

    ~

    s

    ll

    all be

    e F ~ s i d f l f e d - a ~

    ef til ls

    lease

    Ia

    "'

    iGR

    l ess er

    A'1a)

    ilRRela its seAs a

    AI. "Net

    ..,eFtA

    ef bessee"

    &Rail A'1eaA IRe

    11et eAR sf lessee G I ~ J e i R J

    a A ~ JilaraRiers) estalllisRea I Rder

    e A e r a l l ~

    a s s e ~ t e a

    3GG9Y RliR

    j

    iJ

    FI

    RG ijl l&&,

    (d) An assignment or subletting without Lessor's consent

    that

    requires Lessor's consent shall. at Lessor's option, be

    a Default curable after notice

    per

    Paragraph 13.1 c),

    or

    a noncurable Breach w ithout the necessity of any notice and grace period . If Lessor elects to

    treat such unapproved assignment

    or

    subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease. or (ii) upon 30 days written notice,

    increase the monthly Base Rent to

    110%

    of the Base Rent then in effect Further, in the event of such Breach and rental adjustment. (i) the purchase

    price

    of

    any option to purchase the Prem ises held by Lessee shall be subject

    to

    similar adjustment

    to

    110% of

    the price previously in effect , and (ii) a ll

    fixed and non-fixed ren tal adjustments scheduled during the remainder

    of

    the Lease term shall be increased to 11

    0%

    of the scheduled adjusted rent.

    (e) Lessee's remedy for any breach of Paragraph

    12.1

    by Lessor shall be limited to compensatory damages and/or injunctive relief .

    f) Lessor may reasonably withhold consent to a proposed assignment or sublett ing if Lessee is in Default at the time consent is

    requested.

    (g) Notwithstanding the foregoing, allowing a de minimis portion

    of

    the Premises, ie.

    20

    square feet or less. to be used by a third

    party vendor in connection with the installation

    of

    a vending machine or payphone shall not constitute a subletting.

    12.2 Terms and

    Conditions Applicable to Assignment

    and

    Subletting.

    (a) Regardless of Lessor's consent, no assignment or subletting shall : (i) be effective without the express written assumption by

    such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee o any obligations hereunder, or (iii) alter the primary

    liability

    o

    Lessee for the payment

    of

    Rent or for the performance

    of

    any other obligations to be performed by Lessee.

    (b)

    lessor

    may accept Rent

    or

    perfonnance

    of lessee

    's obligations from any person other than Lessee pending approval

    or

    disapproval of an assignment Neither a delay

    In

    the approval or disapproval of such assignment nor the acceptance of Rent or performance shall

    constitute a

    waiver

    or estoppel

    of

    Lessor's right to exercise its remedies for Lessee's Default or Breach .

    (c) lessor's consent

    to

    any assignment or subletting shall not constitute a consent to any subsequent assignment or sublett ing.

    (d) In the event of any Default or Breach by lessee, Lessor may proceed directly against Lessee,

    an

    y Guarantors or anyone else

    responsible for the performance of Lessee's obligations under this Lease, including any assignee or sublessee, without first exhausting Lessor's

    remedies against any other person or entity responsible therefor

    to

    Lessor . or any security held by Lessor.

    (e) Each request for consent to an assignment or subletting shall be in writing , accompanied by information relevant to lessor' s

    determination as to the financial and operational responsibility and appropriateness of the proposed assignee or sublessee, including but not limited to

    the intended use and/or required modification of the Premises, if any, together with a fee of $500 as consideration for Lessor's considering and

    processin g said request. Lessee agrees to provide Lessor with such other or additional informa tion and/or documentation as may be reasonably

    requested. (See also Paragraph 36)

    (f) Any assignee of, or sublessee under, this Lease shall, by reason

    of

    accepting such assignment, entering into such sublease,

    or

    entering into possession of the Premises or any portion thereof, be deemed

    to

    have assumed and agreed to conform and comply with each and every

    term, covenant, condition and obligation herein to be observed or performed by Lessee

    dur

    ing the term

    of

    said assignment or sublease, other than such

    obligations as are contrary

    to

    or

    inconsistent with provisions o an assignment or sublease to which Lessor has specifically consented

    to

    In writing.

    ( i t - l . e

    ~ F 1

    l - t e - a ~ e ; ( ~ l l ~ R a ~

    aGGJRee OF t ~ l l l e s s e e - a R

    ~ O O

    ~

    erigiRal bessee IRis l ease llF Ie ss &ll GR traAs fer is s

    paEil fi

    e;all) GaAseA te a to

    ~ ~ ~

    bessor

    iR

    riliAg. (See

    F'

    ara

    gF

    a ')

    l:l

    39 2)

    12.3

    Additional

    Terms and

    Conditions

    Applicable

    to Subletting. The following

    te

    rms and conditions shall apply to any subletting by

    Lessee

    of

    all or any part

    of

    the Premises and shall be deemed included in all subleases under this Lease whether or not expressly incorporated therein :

    (a) Lessee hereby assigns and transfers to

    lessor

    all

    of

    Lessee's interest in all Rent payable on any sublease, and Lessor may

    collect such Rent and app ly same toward Lessee's obligations under this Lease ; provided. however, that until a Breach shall occur in the performance

    of Lessee's obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds Lessee's then outstanding obligations

    PAGE 11 OF 23

    INITIALS

    INITIALS

    2001

    -AIR COMMERCIAL REAL

    ESTATE ASSOCIATION

    FORM

    STN-

    144/12E

  • 8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION

    17/43

    Page 13

    Exhibit 1

    any such excess shall

    be

    refunded to Lessee. Lessor shall not, by reason of the foregoing

    or

    any assignment of such sublease, nor by reason of the

    collection of Rent. be deemed liable to the sublessee for any failure of Lessee to perform and comply with any of Lessee's obligations to such

    sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach

    exists in the performance of Lessee's obligations under this Lease,

    to

    pay to Lessor all Rent due and to become due under the sublease. Sublessee

    shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach exists,

    notwithstanding any claim from Lessee to the contrary.

    b) In

    the event of a Breach by Lessee, Lessor may,

    at

    its option. require sublessee to attorn to Lessor,

    in

    which event Lessor shall

    undertake the obligations of the sublessor under such sublease from the

    time

    of

    the

    exercise of said option to

    the

    expiration of such sublease; provided,

    however, Lessor shall not be liable for any prepaid rents

    or

    security deposit paid

    by

    such sublessee to such sublessor or for any prior Defaults or

    Breaches of such sublessor.

    (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor.

    d)

    No

    sublessee shall further assign or sublet all or any part of

    the

    Premises without Lessor's prior written consent.

    e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the

    Default of Lessee within the grace period, if any, specified in such notice The sublessee shall have a right of reimbursement and offset from and

    against Lessee for any such Defaults cured by the sublessee.

    12.4 Permitted Ueere.

    Notwi thstanding the foregoing provision of Sect ion 12 Lessee

    shall

    have the

    r ight to sublet or permi t th i rd par t ies to

    occupy and use

    por t ions of the Premises for (a) weekend use by

    rel igious

    organizat ions, and/or (b) educational purposes (each

    such

    th i rd party a Permitted Ued . Lessee, a t

    any t ime

    and

    from t ime to t ime during the Term

    of

    this

    Lease,

    shall have

    the

    r ight to sublet. l icense or

    otherwise permi t

    Permi t ted Users

    to use and occupy

    all

    or any

    por t ion

    of

    the

    Premises

    without Lessor 's

    consent . Lessee

    shall

    not i fy Lessor of

    any sublet. l icense, or

    other agreement wi th any

    Permi t ted

    User

    prior

    to

    t he date

    on which such Perm i t ted User takes possession o f

    any por t ion

    of

    the

    Premises.

    Any

    agreement

    wi th

    Lessee's Permi t ted Users shall

    be subordinate

    to

    and subject

    to the t e rms

    of

    th is Lease,

    and in

    t he event

    o f

    the terminat ion of this Lease,

    all

    such agreements wi th Permi t ted Users shall automat ical ly terminate.

    13. Default; Breach; Remedies.

    13.1 Default; Breach. A Defau lt is defined as a failure by the Lessee to comply with or perform any of the terms, covenants,

    conditions or Rules and Regulations under this Lease. A Breach is defined as the occurrence of one or more of the following Defaults,

    and

    the

    failure of Lessee to cure such Default within any applicable grace period:

    a)

    The abandonment of

    the

    Premises; or the vacating of

    the

    Premises without providing a commercially reasonable level of

    security, or whe