WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
-
Upload
brotherbruno -
Category
Documents
-
view
222 -
download
0
Transcript of WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
1/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
2/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
3/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
4/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
5/43
Page 1
Exhibit 1
EXHIBIT
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
6/43
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&-
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
7/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
8/43
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
3
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
9/43
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
-
8/10/2019 WESTERN STATE UNIVERSITY OF SOUTHERN CALIFORNIA v. CSU FULLERTON AUXILIARY SERVICES CORPORATION
10/43
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