HomeMy WebLinkAboutAbdelmuti Development Company & Computer Memory Test Labs, Inc. - 2000-06-19w
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Council/Agency Meeting Held=
Deferred/Continued to-
I<A proved ❑ Conditionally Approved ❑ Denied Oaf- City C r Signature
C ncil Meeting Date: June 19, 2000 e` Department ID Number: ED 00-28
CITY OF HUNTINGTON BEACH
REQUEST FOR REDEVELOPMENT AGENCY ACTION a
SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY
MEMBERS co
SUBMITTED BY: RAY SILVER, Executive Director A�
PREPARED BY: DAVID C. BIGGS, Director of Economic DevelopmentW___0_
v
SUBJECT: Approval as to Form: Lease Between Abdelmuti Development Co. &
Computer Memory Test Labs, Inc.
Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue: The Owner Participation Agreement between the Agency and
Abdelmuti Development Company requires the Agency to review and "Approve As To Form"
all leases within the office space of the Oceanview Promenade building.
Funding Source: Redevelopment Tax Increment
Recommended Action: MOT10N TO:
Approve as to form the attached lease between Abdelmuti Development Company and
Computer Memory Test Labs, Inc., regarding Suite 2D in the Oceanview Promenade.
Alternative Action(s): Do not approve the lease as to form
Analysis: On May 28, 1991, the Agency entered an Owner Participation Agreement (OPA)
with the Abdelmuti Development Company for the Oceanview Promenade building which
was amended in November 1991 to establish the "Guaranteed Rental Rate."
The Agency's obligation is based on the rent collected from office space on the second floor
and one-half of the third floor, approximately 20,600 square feet in total. If actual rents are
less than the guaranteed rate, the Agency pays the difference (the "Rent Differential
Payment"). The attached lease represents the leasing of the Second Floor, Suite 2D,
1,670 rentable square feet starting July 1, 2000 for a term of three (3) years ending
June 30, 2003. The Company leasing the space is an existing tenant that needs
additional space. The rates per square foot are for year one $1.75 per square foot, year
two $1.80 per square foot and year three $1.85 per square foot. This lease will reduce
the Agency's payment by an estimated $35,000 per year. The initial lease rate is higher
than the amount ($1.70) established as the fair market value in the appraisal
commissioned by the Agency in 1999.
Environmental Status: NIA
Attachment(s):
RCA Author: Andrusky @1530
0
Lease Between Abdelmuti & Computer Memory Test Labs
ATTACHMENT #1
•
OFFICE SPACE LEASE
between
ABDELMUTI DEVELOPMENT COMPANY,
a California general partnership
ASLANDLORD
and
COMPUTER MEMORY TEST LABS, INC.,
a California corporation
AS TENANT
SUITE 2D
OCEANVIEW PROMENADE
HUNTINGTON BEACH, CALIFORNIA
�:_' (,- 6- 0 0
APPROVED AS TO FORM:
GAIL i?U TON. City Atto=61
By.L Deputy City Att0=116Z
2671014820-0001
67472 0 a0N07=
•
19 UTAN
&TUCKERS
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June 2, 2000
VIA MESSENGER
Mr- Gus Duran
Redevelopment Agency of the City of
Huntington Beach
2000 Main Street
Huntington Beach, California 92648
Re: Computer MemoryTest Labs Lease, Inc. Lease, Suite 2D, Oceanview
Promenade, Huntington Beach, California
Dear Gus -
As we discussed, enclosed please find a fully executed copy of the above -captioned lease
for review and formal approval by the Redevelopment Agency of the City of Huntington Beach
on the June 19'� City Counsel meeting. Please note that because our firm has changed from
WordPerfect to Word, the lease is now on 8%" x 1 1" paper using a different font, but otherwise
the fonn and content of the lease has not changed.
Computer Memory Test Labs is an existing tenant in Oceanview Promenade taking
expansion space for a three (3) year term with year one at S 1.75 per square foot, year two at
S 1.80 per square foot and year three at S 1.85 per square foot. Should you have any questions
regarding the foregoing, please do not hesitate to contact me.
Very truly yours,
RUTAN & TUCKER, LLP
/4—
Adam N..- Volkert
ANV-Ja
enc.
cc: Mr. Mike Abdelmuti (w/o enc.)
Ms- Melinda Powell (via U.S. mail wlenc.)
n
"ttorna�
RECEIVED
JUN 0 2 2000
1,91, Ui 4(X';U2'OU
ECONOMIC- DEVELOPMENT
0 •
TABLE OF CONTENTS
Rule
ARTICLE 1. PREMISES ..................................... I........................... .... 3
...............................
SECTION 1.1 LEASED PREMISES........................................................... .... 3
SECTION 1.2 ACCEPTANCE OF PREMISES...................................................... 3
SECTION 1.3 USE RESERVATIONS.................................................................... 3
SECTION 1.4 BUILDING NAME AND ADDRESS .............................................. 3
r
ARTICLEI1. TERM............................................................................................................ 4
SECTION 2.1 GENERAL....................................................... .................. 4
SECTION 2.2 TENDER OF POSSESSION BY LANDLORD...............................4
SECTION 2.3 Intentionally omitted......................................................................... 4
ARTICLE 111. RENT AND SECURITY DEPOSIT............................................................. 4
SECTION 3.1 BASIC ANNUAL RENT.................................................................. 4
SECTION 3.2 SECURITY DEPOSIT...................................................................... 5
SECTION 3.3 OPERATING EXPENSES............................................................... 5
ARTICLEIV. USES............................................................................................................. 5
SECTION4.1 USE................................................................................................... 5
SECTION 4.2 PROHIBITION AGAINST SOLICITATION AND
OTHER ACTIVITIES WITHOUT THE PERMISSION OF
LANDLORD..................................................................................... 6
SECTION 4.3 EXCLUSIVE CONTROL OVER COMMON AREA ...................... 6
SECTION4.4 SIGNS............................................................................................... 6
ARTICLE V. SERVICES ................................................
SECTION 5.1 UTILITIES AND SERVICES.......................................................... 7
SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON
FACILITIES...................................................................................... 8
SECTION 5.3 USE OF COMMON FACILITIES ................................................... 8
SECTION5.4 PARKING......................................................................................... 8
ARTICLE VI. MAINTENANCE OF THE PREMISES....................................................... 9
SECTION 6.1 TENANT'S MAINTENANCE AND REPAIR ................................. 9
SECTION 6.2 LANDLORD'S MAINTENANCE AND REPAIR ........................... 9
SECTION 6.3 ALTERATIONS BY LANDLORD .................................................. 9
SECTION 6.4 TENANTS ALTERATIONS......................................................... 14
SECTION 6.5 MECHANIC'S LIENS ...........................
SECTION 6.6 ENTRY AND INSPECTION.......................................................... 11
SECTION 6.7 Intentionally omitted....................................................................... 12
ARTICLE VIL TAXES AND ASSESSMENTS ON TENANT'S PROPERTY ................. 12
SECTION 7.1 TAXES ON TENANT'S PROPERTY ............................................ 12
ARTICLE VIII. ASSIGNMENT AND SUBLETTING........................................................ 12
SECTION 8.1 PROHIBITION AND CONSENT .................................................. 12
SECTION 8.2 NO RELEASE OF TENANT......................................................... 13
SECTION 8.3 TRANSFER FEE ........................................... ...... 14
2671014920-0001 (( `
67472 03 46MI/00 ll�
Page
SECTION 8.4 AFFILIATE TRANSFER............................................................... 14
ARTICLE IX. INSURANCE AND INDEMNITY............................................................. 14
SECTION 9.1 TENANT'S INSURANCE.............................................................. 14
SECTION 9.2 TENANT'S INDEMNITY.............................................................. 16
ARTICLE X. DAMAGE OR DESTRUCTION................................................................ 16
SECTION 10.1 RESTORATION............................................................................. 16
SECTION 10.2 LANDLORD'S NON -LIABILITY ................................................. 18
SECTION 10.3 TENANT'S WAIVER..................................................................... 18
ARTICLE XI. EMINENT DOMAIN .................................................. ........... 18
....................
ARTICLE XI I. SUBORDINATION; ESTOPPEL CERTIFICATE .................................... 19
SECTION 12.1 SUBORDINATION............................................................. ... 19
SECTION 12.2 ESTOPPEL CERTIFICATE........................................................... 19
ARTICLE XIII. DEFAULTS AND REMEDIES..................................................................
19
SECTION 13.1
TENANT'S DEFAULTS.................................................................
19
SECTION 13.2
LANDLORD'S REMEDIES...........................................................
20
SECTION 13.3
INTEREST ON TENANT'S OBLIGATIONS; LATE
PAYMENTS...................................................................................
22
SECTION 13.4
RIGHT OF LANDLORD TO PERFORM ......................................
23
SECTION 13.5
DEFAULT BY LANDLORD.........................................................
23
SECTION 13.6
EXPENSES AND LEGAL FEES ...................................................
24
ARTICLE XIV. END OF TERM .......................................
SECTION 14.1
HOLDING OVER...........................................................................
24
SECTION 14.2
SURRENDER OF PREMISES; REMOVAL OF
PROPERTY....................................................................................
24
SECTION 14.3
AFFIXED PROPERTY...................................................................
24
ARTICLE XV. NOTICES.................................................................................................... 25
ARTICLE XVI. RULES AND REGULATIONS.................................................................. 25
ARTICLE XVII. BROKER'S COMMISSION.......................................................................25
ARTICLE XVII1. TRANSFER OF LANDLORD'S INTEREST ............................................. 26
ARTICLE XIX. INTERPRETATION ............................................ ........... 26
............................
SECTION 19.1 GENDER AND NUMBER............................................................. 26
SECTION 19.2 HEADINGS ..........................................
ARTICLE XX. EXECUTION AND RECORDING............................................................ 26
SECTION 20.1 CORPORATE AUTHORITY......................................................... 26
SECTION 20.2 RECORDING.................................................................................. 26
SECTION 20.3 AMENDMENTS............................................................................. 26
ARTICLE XXI. MISCELLANEOUS.................................................................................... 26
SECTION 21.1 NONDISCLOSURE OF LEASE TERMS ...................................... 26
SECTION 21.2 FURNISHING OF FINANCIAL STATEMENTS ......................... 27
SECTION 21.3 CHANGES REQUESTED BY LENDER ...................................... 27
267/014820-0001
67472 03 ■06/01 /00 �11
Page
SECTION 21.4
GOVERNMENTAL REQUIREMENTS ........................................ 27
SECTION 21.5
COVENANTS AND CONDITIONS ..............................................
27
SECTION 21.6
WORK LETTER.............................................................................
27
SECTION 21.7
JOINT AND SEVERAL LIABILITY ............................................ 27
SECTION 21.8
SUCCESSORS................................................................................28
SECTION 21.9
TIME OF ESSENCE.......................................................................
28
SECTION 21.14
CONTROLLING LAW......•...........................................................
28
SECTION 21.11
SEVERABILITY............................................................................
28
SECTION 21.12
RELATIONSHIP OF PARTIES .....................................................
28
SECTION 21.13
INABILITY TO PERFORM...........................................................
28
SECTION 21.14
QUIET ENJOYMENT....................................................................
28
SECTION 21.15
HAZARDOUS WASTE AND MATERIALS................................29
SECTION 21.16
ENTIRE AGREEMENT.................................................................
29
267101A820y0001
67472 03 a06101100 tlllj
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OFFICE SPACE LEASE
BASIC LEASE PROVISIONS
The foregoing Basic Lease Provisions are presented here and represent the agreement of the
parties hereto, subject to further definition and elaboration in the Additional Lease Provisions and
elsewhere in this Lease. In the event of any conflict between any Basic Lease Provision and the
balance of this Lease, the latter shall control.
1. Tenant's Name: COMPUTER MEMORY TEST LABS, rNC., a California corporation
2. Premises, including Floor, Suite No. and Rentable Area:
Second Floor, Suite 2D, 1,670 rentable square feet.
3. Commencement Date: July 1, 2000.
4. Lease Term: Three (3) years ending June 30.2003.
5. Basic Annual Rent:
6.
7.
8.
9.
10.
11.
Lease Term
July 1, 2000 —
June 30, 2001
July 1, 2001 —
June 30, 2002
July I, 2002 —
June 30, 2003
Base Year Operating Expense: NIA
Space Plan Approval Date: N/A
Basic Annual Rent
$35,076.00 payable at $2,923.00 per month
S36,072.00 payable at $3,006.00 per month
$37,090.00 payable at S3,090.00 per month
Security Deposit: $3,090.00; payable on execution of Lease.
Prepaid Rent: $3,090.00; payable on execution of Lease.
Broker(s): None
Address for Payments and Notices:
To Landlord: Abdelmuti Development Company
c/o Jack's Surf & Sport
101 Main Street
Huntington Beach, CA 92648
Attn: Mike Abdelmuti
Tel.: (714) 536-6567
26W01462G4=)
67472-03 06/o1100
0 •
To Tenant: Computer Memory Test Labs, Inc.
101 Main Street, Suite 2G
Huntington Beach, CA 92649
Tel.: (714) 960-1243
12. Minimum Coverage for Comprehensive General Liability Policy: $2,000,000.00 combined
single limit.
13. Addendum: An Addendum consisting of None (if no Addendum is attached, insert the
word none) numbered paragraphs is attached to and forms a part of this Lease.
14. Rentable Area of Building: Approximately 47,000 rentable square feet.
15. Lease Execution: In witness whereof the parties hereto have executed this Lease, consisting
of the foregoing provisions and of the Additional Lease Provisions and Exhibits which
follow, as of June 1, 2000.
THIS LEASE SHALL NOT BECOME EFFEC-
TIVE UNTIL EXECUTED BY LANDLORD
AND DELIVERED TO TENANT AND THE
SUBMISSION OF THIS FORM OF LEASE BY
LANDLORD, OR LANDLORD'S AGENT,
DOES NOT CONSTITUTE AN OFFER TO
LEASE. NO EMPLOYEE OR AGENT OF
LANDLORD OR ANY PERSON WITII WHOM
TENANT MAY HAVE NEGOTIATED THIS
LEASE HAS ANY AUTHORITY TO MODIFY
THE TERMS HEREOF OR TO MAKE ANY
AGREEMENTS, REPRESENTATIONS OR
PROMISES UNLESS THE SAME ARE
CONTAINED HEREIN OR ADDED HERETO
IN WRITING.
ABDELMUTI DEVELOPMENT COMPANY,
a California general partne 1p /9
Z %A
bde7 ifti, *fieral Partner
"Landlord"
COMPUTER MEMORY TEST LABS, INC., a
California corporation
By: 4�1 —
Deters, President
"Tenant"
MEMORANDUM OF ACTUAL COMMENCEMENT AND EXPIRATION DATES
Commencement Date: Expiration Date:
267014820-0001 -2-
67472.03 &W01/00
0 •
ADDITIONAL LEASE PROVISIONS
ARTICLE 1. PREMISES
SECTION 1.1 LEASED PREMISES. Landlord hereby leases to Tenant and Tenant hereby
hires from Landlord, subject to all the terms and conditions hereinafter set forth, those certain
premises identified in item 2 of the Basic Lease Provisions and shown in the drawing attached
hereto as Exhibit "A-V (the "Premises"). The Premises shall also include the non-exclusive right to
use the balcony space contiguous to the office suite. The Premises are located on the designated
floor(s) of that certain office and retail structure constructed on the real property legally described in
Exhibit "A-2" attached hereto. Said office and retail structure is hereinafter called the "Building".
Said real property, the Building, and other related improvements and such additional buildings, and
other related improvements as from time to time may be constructed upon said real property are
hereinafter referred to as the "Project".
SECTION 1.2 ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty with respect to the
Premises, the Building and/or the Project, or the suitability or fitness thereof for the conduct of
Tenant's business or for any other purpose, except as set forth in this Lease. The taking of
possession or use of the Premises by Tenant for any purpose other than construction shall
conclusively establish that the Premises, the Building and the Project were at such time in
satisfactory condition and in conformity with the provisions of this Lease in all respects, except as
to any items as to which Tenant shall give Landlord written notice in reasonable detail, which items
shall be limited to any items required to be accomplished by Landlord pursuant to that certain Work
Letter, if any, being executed and delivered by Landlord and Tenant concurrently with this Lease
and attached hereto as Exhibit "B" (the "Work Letter"). Such written notice shall be given within
thirty (30) days after the term of this Lease commences as provided in Article'II below. Failure to
submit such written notice in the time provided shall constitute a waiver thereof. Landlord shall
promptly take such action as may be reasonably required to remedy any actual defects and/or to
complete any work of which it is notified as provided above.
SECTION 1.3 USE RESERVATIONS. Tenant acknowledges that the exterior demising
walls of the Premises and the area between the finished ceiling of the Premises and the slab of the
Building floor or roof thereabove and between the finished floor of the Premises and the foundation
or finished ceiling of the portion of the Building therebelow have not been leased to Tenant.
Landlord reserves the use thereof, together with the right to locate or relocate (both vertically and
horizontally), install, maintain, use, repair and replace pipes, utility lines, ducts, conduits, flues,
refrigerant lines, drains, sprinkler mains and valves, access panels, wires and appurtenant meters or
equipment, and structural elements leading through, under or above the Premises in locations which
will not materially interfere with Tenant's use of the Premises.
SECTION 1.4 BUILDING NAME AND ADDRESS. Landlord may adopt any name it
may select for the Building and/or the Project, and Landlord reserves the right to change the name
and/or address of the Building and/or the Project at any time. Tenant shall not use the name of the
Building, the Project or such development for any purpose other than as the address of the business
to be conducted by Tenant in the Premises, and Tenant shall not acquire any property right in or to
any name which contains said word combination as a part thereof.
267"01482400D 1
67472.03 006/Q1/00 -3-
ARTICLE 11. TERM
SECTION 2.1 GENERAL. The term of this Lease shall be for the period shown in Item 4
of the Basic Lease Provisions, commencing on the commencement date as shown in Item 3 of the
Basic Lease Provisions (the "Commencement Date"). Within five (5) days following the
Commencement Date, the parties shall execute a supplement in the form attached hereto as Exhibit
"A-3", stating the Commencement Date and the expiration date of the term of this Lease. This
Lease is conditioned upon approval by the Redevelopment Agency of the City of Huntington Beach
(the "Redevelopment Agency"). Notwithstanding that Tenant has taken possession or is in `
occupancy of Premises, should the Redevelopment Agency not approve this Lease, the Lease shall
automatically become null and void.
SECTION 2.2 TENDER OF POSSESSION BY LANDLORD. Landlord may tender the
Premises to Tenant prior to, on or alter the estimated commencement date specified in Item 3 of the
Basic Lease Provisions upon not less than five (5) days' written notice stating that the Premises will
be ready for occupancy on the date specified in such notice. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the estimated
commencement date, this Lease shall not be void or voidable nor shall Landlord be liable to Tenant
for any loss or damage resulting therefrom.
SECTION 2.3 Intentionally omitted.
ARTICLE 111. RENT AND SECURITY DEPOSIT
SECTION 3.1 BASIC ANNUAL RENT.
(a) Tenant shall pay the basic annual rent for the Premises. in the total amount,
but payable in the equal monthly installments, shown in Item 5 of the Basic Lease Provisions, due
and payable on the first day of each month in advance, commencing on the Commencement Date
and continuing throughout the term of this Lease, except that if the Commencement Date occurs on
a day other than the first day of a month, then the rent payable hereunder shall be prorated on a
daily basis and the rent for the partial month following the Commencement Date shall be payable
on the first day of the term of this Lease. No demand, notice or invoice shall be required. Tenant
shall receive a credit against the first installment or installments of minimum rental payable under
this Section 3.1 in an amount equal to the prepaid rent specified in Item 9 of the Basic Lease
Provisions. All rents and other sums payable by Tenant to Landlord under this Lease shall be paid
to Landlord, without offset or deduction, in lawful money of the United States of America at the
address for Landlord shown in Item I 1 of the Basic Lease Provisions, or to such other person or at
such other place as Landlord may from time to time designate in writing.
(b) As used herein "Lease Year" shall be a period of twelve (12) consecutive
months commencing on the first full calendar month during the lease term; provided that the first
Lease Year shall also include any partial calendar month following the Commencement Date.
(c) Intentionally omitted.
(d) Intentionally Omitted.
16710148240001
67472.03 a06101/00 -4-
0 0
(e) In the event that at any time during the term of this Lease, any governmental
law, rule or regulation prohibits or postpones in whole or in part any increase in the rent or in the
payment of other sums payable by Tenant hereunder to be made pursuant to this Lease, then, and in
either of such events, such increase or payment shall be made to the maximum extent permissible
by law at the time provided in this Lease, and/or at any time or times thereafter such increase or
payment, or any portion thereof, may lawfully be made and any such increase in rent, or any portion
thereof, or other sums payable hereunder, or portions thereof, the payment of which has been so
prohibited or postponed, shall thereafter become due and payable to the maximum extent and at the
earliest time or times permitted by law.
SECTION 3.2 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum stated
in Item 8 of the Basic Lease Provisions, to be held by Landlord as security for the full and faithful
performance of every Lease provision to be performed by Tenant. If Tenant defaults with respect to
any provision of this Lease, including, but not limited to, the provisions relating to the payment of
rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this -security
deposit for the payment of any rent or other sum in default, or for the payment of any other amount
which Landlord may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default to the full extent permitted by law. If any portion of said deposit is so used or
applied, Tenant shall, within five (5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the security deposit to its original amount. Landlord shall not be
required to keep this security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall perform every provision of this Lease to be
performed by it, the security deposit or any balance thereof shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest hereunder) within thirty (34) days after
the expiration of the Lease term, provided that Landlord may retain the security deposit until such
time as any amount due from Tenant in accordance with any provision hereof has been determined
and paid in full.
SECTION 3.3 OPERATING EXPENSES. Tenant is not obligated to pay any additional
sums with respect to common area maintenance expense, building maintenance expense or any
other expense except as may be specifically set forth in this Lease.
ARTICLE IV. USES
SECTION 4.1 USE. Tenant shall use and occupy the Premises for general office purposes
only and for no other use or purpose without the prior written consent of Landlord, which consent
Landlord may withhold in its sole and absolute discretion. Tenant shall not use or occupy the
Premises in violation or in conflict with any "Governmental Requirement" (defined below) but
shall, at Tenant's expense, promptly comply with all present and future laws, ordinances, statutes,
including without limitation the Americans with Disabilities Act, orders, rules, restrictions,
regulations and requirements of all govenunental authorities having jurisdiction over the Premises
whether or not the same is substantial, foreseen or unforeseen, ordinary or extraordinary, or whether
the same shall necessitate Tenant making structural changes or improvements to the Premises or
interfere with the use and enjoyment of the Premises (herein collectively, "Governmental
Requirements"). Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of other tenants or occupants of the Project or of
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property adjacent to the Project, or injure or annoy them, or use or'allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance or commit any waste in, on or about the Premises or the Project. Without
limiting the generality of the foregoing, Tenant shall not (i) obstruct or store anything in the
common areas (including service or exit corridors), (ii) place a load upon any floor of the Premises
which exceeds the floor load per square foot which such floor was designed to carry, or (iii) permit
any objectionable sound or odors to carry outside the Premises. In particular, Tenant agrees that
business machines and mechanical equipment used by Tenant which cause vibration or noise that
may be transmitted to any other portion of the Building, to such a degree as to be reasonably
objectionable to Landlord or to any occupant, shall be placed and maintained by Tenant at its
expense in setting of cork, rubber or spring -type vibration isolators sufficient to eliminate such
vibrations or noise. Tenant shall not do or permit to be done anything which will invalidate or
increase the cost of any insurance policy(ies) covering the Building, the Premises, the Project and/or
property located therein and shall comply with all applicable insurance underwriters rules, orders,
regulations and requirements of the Pacific Fire Rating Bureau or other applicable organization
performing a similar function. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charged for such policy(ies) by reason of Tenant's failure to comply with the
provisions of this Section, but such reimbursement shall not be construed as curing Tenant's default
for failing to comply with the provisions of this Section. Tenant shall not, under any circumstances,
allow alcoholic beverages to be served or consumed within any portion of the Premises.
SECTION 4.2 PROHIBITION AGAINST SOLICITATION AND OTHER ACTIVITIES
WITHOUT THE PERMISSION OF LANDLORD. Tenant hereby delegates to Landlord full
power, authority and control to regulate, in accordance with the rules and regulations attached
hereto as Exhibit "C" and/or from time to time adopted pursuant to Article XVI and/or to prohibit
the entrance to the Premises, the Building and/or the Project of all vendors, .suppliers, surveyors,
petitioners and others deemed objectionable by Landlord. In the event said persons are guests or
invitees of Tenant, Tenant shall notify Landlord of this fact. No such person shall be permitted to
enter upon the Project, the Building and/or the Premises unless and until such person shall have
executed Landlord's standard entry permit and Landlord shall have determined, in its sole and
absolute discretion and judgment, that such person's activities will not disturb other tenants, their
customers or invitees or distract from the use of the Building and/or the Premises for their intended
purposes. Tenant agrees that Landlord may prohibit and exclude, in whole or in part, vendors of
sandwiches and other food items from the Building, as Landlord may elect, in Landlord's sole and
absolute discretion.
SECTION 4.3 EXCLUSIVE CONTROL OVER COMMON AREA. It is expressly agreed
and understood that control over all uses of the "Common Facilities" (defined in Section 5.2 below)
shall reside with and be solely exercisable by Landlord in its sole and absolute discretion. Said
areas shall not be available for use by Tenant, except as herein expressly provided, nor by vendors,
surveyors, petitioners and others without the express written consent of Landlord, which Landlord
may withhold in its sole and absolute discretion.
SECTION 4.4 SIGNS. Tenant may not affix a sign to the exterior surface of the suite front
or any other part of the exterior or interior surface of the Building. Except with the prior written
approval of Landlord, which approval may be withheld in Landlord's sole discretion, Tenant shall
not place or allow to be placed, erected or maintained any sign, decal, placard, name, insignia, trade
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name, decoration, flashing, moving or hanging lights, lettering, or any other descriptive words or
advertising matter of any kind or description (herein collectively, "sign" or "signs") on any exterior
door, wall, window, surface or roof of the Premises or of the Building or on the glass of any
window or door of the Building, or in any deck or balcony area included within the Premises or on
any sidewalk or other location outside the Building, or within any entrance to the Premises. If
Tenant places or causes to be placed or maintained any of the foregoing without Landlord's prior
approval, the same may be removed by Landlord at Tenant's expense without notice and without
such removal constituting a breach of this Lease or entitling Tenant to claim damages on account
thereof If Tenant places or causes to be placed or maintained any of the foregoing with LandIord's
prior approval, Tenant shall maintain the same in good condition and repair at Tenant's sole cost and
expense.
ARTICLE V. SERVICES
SECTION 5.1 UTILITIES AND SERVICES. Subject to the provisions set forth below,
Landlord shall furnish to the Premises electricity through a separate meter billed directly to Tenant.
Tenant shall pay for replacement of all fluorescent fixtures and bulbs as required.
Landlord shall furnish water for drinking, cleaning and lavatory purposes only, but if Tenant
requires, uses or consumes water for any purpose in addition to ordinary drinking, cleaning and
lavatory purposes, of which fact Tenant constitutes Landlord to be the sole judge, Landlord may
install a water meter and thereby measure Tenant's water consumption for all purposes. Tenant
shall pay Landlord for the cost of the meter and the cost of the installation thereof, and for
consumption throughout the duration of Tenant's occupancy. Tenant shall keep said meter and
installed equipment in good working order and repair at Tenant's own cost and expense, in default
of which Landlord may cause such meter to be replaced, repaired and collect the cost thereof from
Tenant.
To the extent any utility service to the Premises is separately metered or billed to Tenant,
Tenant shall pay all charges for such utility service to the Premises. If any such charges are not
paid when due, Landlord may pay the same, and any amount so paid by Landlord shall thereupon
become due to Landlord from Tenant as additional rent. If Landlord shall elect to furnish any utility
services to the Premises, Tenant shall purchase its requirements thereof from Landlord so long as
the rates charged therefor by Landlord do not exceed those which Tenant would be required to pay
if such services were furnished it directly by a public utility.
Landlord shall not be liable for any failure to furnish any of the services or utilities
described in this Section 5.1 when such failure is caused by accidents, breakage, repairs, strikes,
lockouts, other labor troubles or disputes, governmental water, energy or other conservation
programs or any other governmental requirements, action or inaction, moratorium or other cause
beyond Landlord's reasonable control. Landlord may take into consideration the availability of
energy resources and prudent energy conservation practices, including participation in any energy
conservation association or other arrangements for voluntary cut -back, load shedding and the like.
No failure to furnish any of such service or utilities shall entitle Tenant to any damages, relieve
Tenant of the obligation to pay the full rent reserved herein or constitute or be construed as a
constructive or other eviction of Tenant. Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the proper functioning and protection of the air conditioning,
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heating, elevator, plumbing and electrical systems. Landlord shall at all reasonable times have free
access to all mechanical installations of Landlord, including, but not limited to, the air conditioning
equipment and vents, fans, ventilating and machine rooms and electrical closets. If there is any
failure, stoppage or interruption in said utilities and/or services, Landlord shall use reasonable
diligence to correct the same, repairs and/or corrections that are the responsibility of a public or
private utility company, excepted.
SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON FACILITIES.
Landlord shall operate and maintain during the term of this Lease all common facilities within the
Building and the Project. The term "Common Facilities" shall mean all areas within the Project
which are not held, or designated by Landlord to be held, for exclusive use by persons entitled to
occupy space in the Project. The Common Facilities shall include, without limiting the generality
of the foregoing, driveways, truckways, delivery passages, loading docks, sidewalks, ramps,
landscaped and planted areas, exterior stairways and balconies, hallways and interior stairwells not
located within the premises of any tenant, common entrances and lobbies, mezzanines, elevators,
bus stops, retaining walls, restrooms not located within the premises of any tenant, lighting fixtures,
Building and/or Project identification signs, irrigation systems and controllers, drains and sewers.
SECTION 5.3 USE OF COMMON FACILITIES. The use and occupancy by Tenant of
the Premises shall include the use of the Common Facilities in common with Landlord and with all
others for whose convenience and use the Common Facilities have been or may hereafter be
provided by Landlord, subject, however, to rules and regulations for the use thereof as prescribed
from time to time by Landlord pursuant to Article XVI below. Landlord shall operate, manage,
equip, light, repair, clean and maintain the Common Facilities in such manner as Landlord may in
its sole discretion determine to be appropriate. Landlord shall at all times during the term of this
Lease have the sole and exclusive control of all Common Facilities, and may at any time and from
time to time during the term hereof restrain any use or occupancy thereof, except as authorized by
such rules and regulations, as may be changed from time to time. Tenant shall keep said Common
Facilities free and clear of any obstructions related to Tenant's operations. If, in the opinion of
Landlord, unauthorized persons are using any of said Common Facilities by reason of the presence
of Tenant in the Building, Tenant, upon demand of Landlord, shall restrain such unauthorized use
by appropriate proceedings. Nothing herein shall affect the right of Landlord at any time to remove
any such unauthorized persons or obstructions. Landlord may temporarily close any Common
Facility for repairs or alterations as provided in Section 6.2 below, to prevent a dedication thereof or
the accrual of prescriptive rights therein, or for any other reason deemed sufficient by Landlord.
SECTION 5.4 PARKING.
(a) Tenant acknowledges that no parking areas are provided at the Project and
that Tenant may use the parking structure provided by the City of Huntington Beach located near
the Project. Tenant acknowledges that the availability of parking and the rates charged for parking
are subject to change and are not within Landlord's control.
(b) In the event that any parking surcharge or regulatory fee, however
designated, should be imposed upon or levied or assessed against the Project, or any portion thereof,
by any governmental agency or authority pursuant to the "Clean Air Act", or any plan implemented
pursuant to such Act or any enactment amendatory or in substitution thereof, or pursuant to any
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other governmental act or decree, Landlord may recover such fees as Operating Expenses. The
foregoing parking provisions are subject to any governmental regulations which limit parking or
otherwise seek to encourage the use of carpools, public transit or other alternative transportation
forms.
ARTICLE VI. MAINTENANCE OF THE PREMISES
SECTION 6.1 TENANT'S MAINTENANCE AND REPAIR.
(a) Tenant at its sole cost and expense shall make all repairs necessary to keep
the Premises in good order and repair and in a safe, clean, sanitary, orderly and attractive condition.
All repairs shall be at least equal in quality to the original work, shall be made only by a licensed,
bonded contractor approved in advance by Landlord and shall be made only at such time or times as
shall be approved by Landlord. Landlord may impose reasonable restrictions and requirements with
respect to such repairs including, without limitation, those applicable to Tenant's alterations as set
forth in Section 6.4.
(b) Tenant, at its sole cost and expense, shall install and maintain fire
extinguishers within the Premises and other fire protective devices as may be required from time to
time by Landlord, by any agency having jurisdiction and/or by the insurance underwriters insuring
the Premises.
SECTION 6.2 LANDLORD'S MAINTENANCE AND REPAIR.
(a) Landlord shall keep and maintain in good repair the roof (including the
structural integrity thereof), foundations, footings, the exterior surfaces of the exterior walls , the
HVAC system for the Premises and any utility facilities, and the electrical and mechanical systems
in the Building, reasonable wear and tear excepted, except to the extent such repair is Tenant's
responsibility under Section 6.1 above or the responsibility of a public or private utility company
and except that Tenant at its expense shall make any such repairs relating to the act or negligence of
Tenant, its agents, employees, invitees, licensees or contractors. Landlord shall not be liable for any
failure to make any repairs or to perform any maintenance unless such failure shall persist for an
unreasonable time after written notice of the need for such repairs or maintenance is given to
Landlord by Tenant.
(b) Except as provided in Section 10.1 and Article XI below, there shall be no
abatement of rent and no Iiability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or improvements in or to any
portion of the Project or the Building, including the Premises, or in or to the fixtures, appurtenances
and equipment therein; provided, however, that in making such repairs, alterations or
improvements, Landlord shall interfere as little as reasonably practicable with the conduct of
Tenant's business in the Premises.
SECTION 6.3 ALTERATIONS BY LANDLORD.
(a) Landlord reserves the right at any time, and from time to time, to make
changes in or to the Building and the fixtures and equipment thereof, to make alterations or
additions to any building within the Project, to construct other buildings (including free standing
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buildings) and improvements within the Project, to enlarge or reduce the Project and to make
alterations therein or additions thereto, or to any part thereof, to build additional stories on any
building or buildings within the Project, to construct decks, subterranean or elevated parking
facilities, and to sell or lease any part of the land comprising the Project for the construction
thereon of buildings, which may or may not be part of the Project. Landlord reserves the right at
any time to change the size, configuration, shape, number and extent of the Common Facilities, or
any of them, all as Landlord may deem necessary or desirable in its sole discretion. No such change
described in this Section 6.3(a) shall entitle Tenant to any abatement of rent or other claim against
Landlord; provided, however, such changes or alterations shall not deprive Tenant of reasonable
access to or use of the Premises.
(b) As a material inducement to Landlord's entering into this Lease, Tenant
expressly waives and releases any rights it may have whether granted by statute or otherwise, to
make repairs at Landlord's expense, including, but not limited to, its rights as contained in Sections
1941, 1941.1 and 1942 of the California Civil Code.
SECTION 6.4 TENANT'S ALTERATIONS. Tenant shall not make alterations, additions
or improvements to the Premises nor any repairs, replacements or restorations to the Premises in
excess of TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00) without the prior written
consent of Landlord. Landlord may impose, as a condition to such consent, such requirements as
Landlord, in its sole discretion, may deem reasonable or desirable, including, but not limited to, a
requirement that all work be covered by a surety bond in favor of Landlord, guaranteeing the
completion of such work free and clear of all subcontractors', mechanics' and materialmen's liens
(which bond shall be satisfactory to Landlord) and requirements as to the manner, time and
contractor or contractors as to or by which such work shall be done. Notwithstanding the foregoing,
no improvements may be made that would diminish the value of the Premises and, in addition, no
improvements may be made to any mechanical or utility system, the exterior walls or the roof of the
Premises, nor may any improvements of a structural nature be made without Landlord's approval,
which approval may be withheld in Landlord's sole and absolute discretion. In no event shall
Tenant make or cause to be made any penetration through the roof or the floor of the Premises
without the prior written approval of Landlord, which approval may be withheld in Landlord's sole
and absolute discretion. Any requirements of the Work Letter applicable to any initial construction
work performed by or under Tenant shall also be applicable to any such alterations, additions and/or
improvements. All alterations made by Tenant shall be in accordance with all Governmental
Requirements and to the extent Tenant's alterations trigger alterations or other modifications within
the Building or Project, such alterations or other modifications shall be performed by Landlord at
the expense of Tenant. Any request for Landlord's consent to such work shall be made in writing
and shall contain three (3) sets of architectural plans and specifications (with square footages)
describing such work in detail reasonably satisfactory to Landlord. No such plans and
specifications or any material change thereto shall be submitted for approval to any federal, state,
county or local government or other governmental agency or association prior to LandIord's review
and approval of same. Failure of Landlord to respond to such request within thirty (30) days shall
be deemed a denial of such request. Plans and specifications and governmental applications shall
become the property of Landlord upon the termination or expiration of this Lease and shall be
turned over to Landlord by Tenant upon Landlord's request therefor. Unless Landlord otherwise
agrees in writing, all such alterations, additions or improvements affixed or built into the Premises
(but excluding moveable trade fixtures and furniture) shall become the property of Landlord as
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provided in Section 14.3 below, and shall be surrendered with the Premises, as a part thereof, at the
end of the Lease term, except that Landlord may, by written notice to Tenant given at least thirty
(30) days prior to the end of the Lease term, require Tenant to remove all or any portion of any
alterations, decorations, additions, improvements and the Iike installed by Tenant, and to repair, or
at Landlord's option, to pay all costs relating to any damage to the Premises arising from such
removal.
SECTION 6.5 MECHANIC'S LIENS. Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred or alleged to have
been incurred by, for or under Tenant. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien (but in any event before an action is filed to foreclose
such lien), cause the same to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by law, the right (but not
the obligation) to cause the same to be released by such means as it shall deem proper, including
payment of or defense against the claim giving rise to such lien. All sums paid by Landlord and all
expenses incurred by it in connection therewith shall create automatically an obligation of Tenant to
pay an equivalent amount, together with interest thereon at the rate provided in Section 13.3 below,
from the date paid by Landlord as additional rent, which additional rent shall be payable by Tenant
on Landlord's demand. Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing the construction of any building, structure or other improvement on the
Premises or of any substantial repairs, alterations, additions, replacements or restorations in and
about the Premises so that Landlord may post and maintain such notices of non -responsibility or
other notices on the Premises as Landlord deems necessary for protection from such liens.
SECTION 6.6 ENTRY AND INSPECTION. Landlord shall at all times have the right to
enter the Premises to inspect the same, to post notices of non -responsibility, to alter, improve or
repair the Premises or any other portion of the Building, as otherwise permitted hereunder, all
without being deemed to have evicted Tenant and without abatement of rent and may for that
purpose erect scaffolding and other necessary structures and store materials, supplies and tools
where reasonably required by the character of the work to be performed, provided that the business
of Tenant shall be interfered with as little as is reasonably practicable. If during the last month of
the term hereof, Tenant shall have removed substantially all of Tenant's property and personnel
from the Premises, Landlord may enter the Premises and repair, alter and redecorate the same,
without abatement of rent and without liability to Tenant, and such acts shall have no effect on this
Lease_ Tenant hereby waives any claim for damages or abatement of rent for any injury,
inconvenience to or interference with Tenant's business, loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby; provided, however, this provision shall not excuse
Landlord for its own gross negligence or willful misconduct. As used in this Lease, the term "gross
negligence" shall mean the failure to perform a manifest duty in reckless disregard of the
consequences as affecting the life or property of another. Landlord shall have the right to use any
and all means which Landlord may deem proper to open said doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by Landlord by any of said
means shall not under any circumstances be construed or deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from the Premises or any portion
thereof. During the last one hundred eighty (180) days of the lease term, or when an uncured
default on the part of Tenant exists hereunder, Landlord may, at all reasonable times, enter the
Premises for the purpose of displaying the Premises to prospective tenants.
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SECTION 6.7 Intentionally omitted.
• ARTICLE V1I. TAXES AND
ASSESSMENTS ON TENANT'S PROPERTY
SECTION 7.1 TAXES ON TENANT'S PROPERTY.
(a) Tenant shall be liable for and shall pay at least forty (40) days before
delinquency, all taxes and assessments levied against all fixtures, furnishings, equipment and other
personal property of Tenant located in or about the Premises, and when possible, Tenant shall cause
said fixtures, furnishings, equipment and other personal property to be assessed and billed
separately from the real property of which the Premises form a part. If any such taxes on Tenant's
personal property or trade fixtures are levied against Landlord or Landlord's property and if
Landlord pays the same (which Landlord shall have the right to do regardless of the validity of such
levy), or if the assessed value of Landlord's property is increased by the inclusion therein of a value
placed upon such personal property or trade fixtures of Tenant and if Landlord pays the taxes based
upon such increased assessment, Tenant shall pay to Landlord the taxes so levied against Landlord
or the proportion of such taxes resulting from such increase in the assessment.
(b) If the tenant improvements in the Premises, whether installed and/or paid for
by Landlord or Tenant and whether or not affixed to the real property so as to become a part
thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which
tenant improvements conforming to Landlord's building standards in other space in the Building are
assessed, then the real property taxes and assessments levied against Landlord or Landlord's
property by reason of such excess assessed valuation may, at Landlord's option, be deemed to be
taxes levied against personal property of Tenant and shall, under such circumstances, be governed
by the Provisions of Section 7.1(a) above.
(c) Upon request, Tenant agrees to provide receipts, cancelled checks or other
documents reasonably requested by Landlord to confirm Tenant's payment of any taxes and/or
assessments payable by Tenant directly to the taxing authority under this Lease.
ARTICLE VIII. ASSIGNMENT AND SUBLETTING
SECTION 8.1 PROHI.BITION AND CONSENT.
(a) Tenant shall not, either voluntarily or involuntarily, by operation of law or
otherwise, assign, sublet, sell, encumber, pledge or otherwise transfer all or any part of the Premises
or Tenant's Ieasehold estate hereunder, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees, without Landlord's prior written consent in each instance. Any
assignment or subletting which is not in compliance with this Article VIII shall be void and, at the
option of Landlord, shall constitute a default by Tenant under this Lease and entitle Landlord to
terminate this Lease. Consent by Landlord to one or more assignments of this Lease or to one or
more sublettings of the Premises shall not operate to waive Landlord's rights under this Article VIII.
The voluntary or involuntary surrender of this Lease by Tenant or a mutual cancellation hereof shall
not work a merger, and shall, at the option of Landlord, terminate all or any existing subleases or
subtenancies or shall operate as an assignment to Landlord of such subleases or subtenancies. If
Tenant is a corporation which, under the then current guidelines published by the Commissioner of
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Corporations of the State of California, is not deemed a public corporation, or is an unincorporated
association or partnership, the transfer, assignment or hypothecatibn of any stock or interest in such
corporation, association or partnership in the aggregate in excess of twenty-five percent (25%) or
such lesser interest as may constitute a controlling interest, shall be deemed an assignment within
the meaning and provisions of this Section.
(b) If Tenant desires at any time to assign this Lease or to sublet the Premises or
any portion thereof, it shall first notify Landlord of its desire to do so and shall submit in writing to
Landlord (i) the name of the proposed subtenant or assignee; (ii) the nature of the proposed —
subtenant's or assignee's business to be carried on in the Premises; (iii) the terms and provisions of
the proposed sublease or assignment; (iv) such financial information as Landlord may request
concerning the proposed subtenant or assignee; and (v) such information as -Landlord may request
regarding the business experience concerning the proposed subtenant or assignee during the
preceding five (5) years.
(c) At any time within thirty (30) days after Landlord's receipt of the information
specified in subparagraph (b) above, Landlord may, by written notice to Tenant, elect to (i) consent
to the subletting or assignment upon the terms and to the subtenant or assignee proposed, subject to
any conditions deemed appropriate by Landlord, as determined in its reasonable discretion,
including, but not limited to, the condition that Tenant pay to Landlord upon receipt any and all
amounts (a) by which the basic rent and additional rent paid by such subtenant exceeds the sum of
the rent and additional rent to be paid by Tenant to Landlord for such space under this Lease, or (b)
of profit received by Tenant from such assignee; (ii) refuse to give its consent, (iii) sublease the
Premises or the portion thereof so proposed to be subleased by Tenant or take an assignment of
Tenant's leasehold estate hereunder or such part thereof as shall be specified in said notice upon the
same terms (excluding terms relating to purchase of personal property, the use of Tenant's name or
the continuation of Tenant's business) as those offered to the proposed subtenant or assignee, as the
case may be; or (iv) terminate this Lease as to the portion (including all) of the Premises so
proposed to be subleased or assigned with a proportionate abatement in the rent payable hereunder,
effective as of the date of the proposed sublease or assignment. If the Lease is partially terminated
as to the portion of the Premises proposed to be assigned or subleased, a proportionate abatement
will be made in the rent payable hereunder effective upon the last to occur of. (a) the date Tenant
installs a partition wall satisfying Landlord's reasonable requirements, separating such portion of the
Premises from the balance of the Premises, which partition wall shall be completed by Tenant at
Tenant's sole cost and expense within sixty (60) days of such election by Landlord, or (b) the
effective date of -the partial termination of this Lease. If Landlord consents to such assignment or
subletting, Tenant may within ninety (90) days after the date of Landlord's consent, enter into a
valid assignment or sublease of the Premises or portion thereof upon the terms and conditions
described in the information required to be furnished by Tenant to Landlord pursuant to Section
8.1(b) above, or upon other terms not more favorable to Tenant; provided, however, that any
material change in such terms shall be subject to Landlord's consent as provided in this Section 8.1.
Failure of Landlord to exercise any option set forth in clauses (i) through (iv) above within the thirty
(30) day period for Landlord's notice shall be deemed refusal of Landlord to consent to the proposed
subletting or assignment.
SECTION 8.2 NO RELEASE OF TENANT. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its obligation to pay the rent and to perform all of the
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other obligations to be performed by Tenant hereunder. Each assignee or transferee, other than
Landlord, shall assume, as provided above, all obligations of Tenant under this Lease and shall be
and remain liable jointly and severally with Tenant for the payment of the rent, and for the due
performance of all the terms, covenants, conditions and agreements herein contained on Tenant's
part to be performed for the term of this Lease. No assignment shall be binding on Landlord unless
such assignee or Tenant shall deliver to Landlord a counterpart of such assignment which contains a
covenant of assumption by the assignee satisfactory in substance and form to Landlord, consistent
with the requirements of this Article VIII, but the failure or refusal of the assignee to execute such
instrument of assumption shall not release or discharge the assignee from its liability as set forth
above. The acceptance of any payment due hereunder by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any
assignment or subletting.
SECTION 8.3 TRANSFER FEE. If Landlord consents to an assignment, sublease or any
other transfer by Tenant of all or a portion of Tenant's interest under this Lease, Tenant shall pay, or
cause to be paid, in each case a transfer fee of SEVEN HUNDRED FIFTY DOLLARS (S750.00) in
connection with the processing, documentation and other administrative costs thereof, along with
Landlord's reasonable attorneys' fees incurred in connection therewith.
SECTION 8.4 AFFILIATE TRANSFER. Notwithstanding anything to the contrary in this
Article VIII or anything to the contrary contained in this Lease, Tenant shall have the right, without
Landlord's consent, to assign this Lease and/or sublet the entire Premises to any person, corporation
or entity (a) which owns one hundred percent (100%) of Tenant's membership interests (Tenant's
parent); (b) any corporation in which Tenant or Tenant's parent owns one hundred percent (100%)
of the membership interests thereof (Tenant's subsidiary or sister corporation); (c) which succeeds
to the assets or business of Tenant or Tenant's parent as a result of merger or consolidation; and/or
(d) which acquires all or substantially all of Tenant's membership interests or' -assets; provided that
in each such instance (1) Tenant shall not be in default under this Lease at the time of said transfer;
(ii) No change in use of the Premises shall result by reason of such transfer; (iii) Tenant shall give
Landlord written notice of said transfer at least thirty (30) days prior to said transfer; (iv) the
assignee shall furnish Landlord at least thirty (30) days prior to the transfer a written instrument
reasonably satisfactory to Landlord by which such assignee agrees to assume and perform all
covenants and conditions of Tenant contained in this Lease; and (v) in the event of an assignment to
a parent or subsidiary and in the event of an assignment to a company acquiring all or substantially
all of the assets or membership interests of Tenant, the assignee has a net worth (in 2000 dollars)
equal to or greater than the net worth of Tenant at the time Tenant entered into this Lease. No such
assignment or other transfer shall release the original Tenant or any assignee thereof from liability
under this Lease.
ARTICLE IX. INSURANCE AND INDEMNITY
SECTION 9.1 TENANT'S INSURANCE.
(a) Tenant hereby agrees to maintain in full force and effect at all times during
the term of this Lease, at its own expense, for the protection of Tenant, Landlord and such other
parties as Landlord may from time to time designate, as their interests may appear, policies of
insurance issued by a carrier rated as A+10, or better, in the latest edition of Best's Insurance Guide
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i
to inspect all safes, freight or other bulky articles to be brought into the Building and to exclude
from the Building and all such bulky articles which violate any of the Rules and Regulations or the
Lease of which these Rules and Regulations are a part. Landlord reserves the right to prescribe the
weight and position of all safes, which must be placed upon supports approved by Landlord to
distribute the weight.
(18) No tenant shall purchase janitorial, maintenance or other services from any company
or persons not approved by Landlord. Any person employed by any tenant to do janitorial work
shall, while in the Building and outside of the Premises, be subject to and under the control and
direction of the office or management of the Building (but not as an agent or servant of Landlord,
and the tenant shall be responsible for all acts of such persons). Except with Landlord's prior
written approval, no tenant shall permit janitorial services to be performed during the hours of 7:00
a.m. to 6:00 p.m, Monday through Friday.
(19) Landlord shall have the right to prohibit any advertising by any tenant which, in
Landlord's opinion, tends to impair the reputation of the Building or its desirability as an
office/retail building and upon written notice from Landlord any tenant shall refrain from and
discontinue such advertising.
(20) On Saturdays from 12:00 p.m. to 8:00 a.m., Sundays, those legal holidays designated
by Landlord, and on other days between the hours of 6.00 p.m. and 7:00 a.m., access to the Building
or to the halls, corridors, elevators or stairways in the Building, or to the Premises may be refused
unless the person seeking access is known to the building watchman, if any, in charge and has a
pass or is properly identified. Landlord shall in no case be liable for damages for the admission to
or exclusion from the Building of any person whom Landlord has the right to exclude. Each tenant
shall be responsible for all persons for whom he requests after hours access and shall be liable to
Landlord for all acts of such persons. In case of invasion, mob, riot, public excitement, or other
commotion, Landlord reserves the right but shall not be obligated to prevent access to the Building
during the continuance of the same by closing the doors or otherwise, for the safety of the tenants
and protection of property in the Building.
(21) All doors opening into public corridors shall be kept closed, except when in use for
ingress and egress. Tenants shall see that the windows, transoms and doors of their premises are
closed and securely locked before leaving the Building.
(22) The requirements of tenants will be attended to only upon application to the manager
of the Building.
(23) Canvassing, soliciting and peddling in the Building are prohibited and each tenant
shall cooperate to prevent the same.
(24) There shall not be used in any space, or in the public halls of the Building, either by
any tenant or others, any hand trucks except those equipped with rubber tires and side guards.
(25) No vending or coin operated machines shall be placed by any tenant within his
premises without the prior written consent of Landlord.
EXHIBIT "C"
TO OFFICE SPACE LEASE
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(or a comparable rating in a comparable guide selected by Landlord, if Best's insurance Guide is no
longer published) which afford the following coverages:
(i) Worker's Compensation (including broad form all states): Statutory
(ii) Comprehensive General Liability Insurance, including Blanket
Contractual Liability, Broad Form Property Damage, Personal Injury, Completed
Operations, Products Liability, Fire, Legal Liability: Not less than amount stated in
Item 12 of Basic Lease Provisions.
(iii) So-called "All -Risk Insurance" including without limitation Fire and
Extended Coverage, Vandalism and Malicious Mischief, and Sprinkler Leakage
Insurance, in an amount sufficient to cover the full cost of replacement of all
improvements and betterments to the Premises made by or on behalf of Tenant
(except to the extent installed by Landlord, at Landlord's expense, pursuant to the
Work Letter) and all of Tenant's fixtures and other personal property.
(b) Tenant shall deliver to Landlord and to such other named insureds designated
by Landlord at least thirty (30) days prior to the time such insurance is first required to be carried by
Tenant, and thereafter at least twenty (20) days prior to expiration of such policy, certificates of
insurance evidencing the above coverage with limits not less than those specified above. Such
certificates, with the exception of Worker's Compensation, shall name Landlord and such other
parties as Landlord may designate as additional insureds and shall expressly provide that the interest
of same therein shall not be affected by any breach by Tenant of any policy provision for which
such certificates evidence coverage. Further, all certificates shall expressly provide that 1) no less
than thirty (30) days prior written notice shall be given Landlord and such other named insureds in
the event of material alteration to or cancellation of the coverages evidenced- by such certificates
and 2) such coverage evidenced by the certificate is primary and that any coverage carried by
Landlord and such other named insureds shall be excess and non-contributory with respect to any
policies carried by Tenant.
(c) Upon demand, Tenant shall provide Landlord, at Tenant's expense, with such
increased amount of existing insurance, and such other insurance in such limits, as Landlord may
require and such other hazard insurance as the nature and condition of the Premises may require in
the sole judgment of Landlord, to afford Landlord and additional insureds designated by Landlord
adequate protection for said risks.
(d) Landlord makes no representation that the limits of liability specified to be
carried by Tenant under this Article 1X, are adequate to protect Tenant against Tenant's undertaking
under this Lease, and in the event Tenant believes that any such insurance coverage called for under
this Lease is insufficient, Tenant shall provide at its own expense, such additional insurance as
Tenant deems adequate.
(e) Landlord and Tenant hereby release the other from any and all liability from
or to the other party of every kind and nature which may result from the perils of fire, lightning or
extended coverage perils which cause damage on or to the Premises, the Building and/or property
within the Building owned by it, such waiver to include situations where the negligence of one of
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the parties hereto or his agent, servant or representative causes or contributes to the occurrence or
the result of damage.
(f) Insurance carried by Tenant against loss or damage by fire or other casualty
shall contain a clause whereby the insurer waives its right of subrogation against Landlord. Tenant
shall also obtain and furnish evidence to Landlord of the waiver by Tenant's worker's compensation
canter of any right of subrogation against Landlord.
(g) The policy of insurance required to be maintained by Tenant pursuant to --
Section 9.1(a)(11) shall include coverage of Tenant's indemnity in favor of Landlord as provided in
Section 9.2 below.
SECTION 9.2 TENANT'S INDEMNITY. Tenant shall defend, indemnify and hold
harmless Landlord, its agents, and any and all affiliates of Landlord, including, without limitation,
any corporation or other entities controlling, controlled by or under common control with Landlord,
from and against any and all claims or liabilities arising from Tenant's use or occupancy of the
Premises, the Building, the Project or the Common Facilities or the conduct of its business or from
any activity, work, or thing done, permitted or suffered by Tenant in or about the Premises, the
Building, the Project and the Common Areas, and shall further defend, indemnify and hold harmless
Landlord, its agents and affiliates against and from any and all claims or liabilities arising from any
breach or default in the performance of any obligation on Tenant's part to be performed hereunder,
or arising from any act or negligence of Tenant, or of its agents, employees, visitors, patrons,
guests, invitces or licensees, including vendors, servicing Tenant at its request, and from and against
all costs, attorneys' fees, expenses and liabilities incurred in or about any such claims or liabilities or
any actions or proceedings brought thereon. Notwithstanding the foregoing, Tenant shall not be
liable for damage or injury occasioned by the gross negligence or willful misconduct of Landlord or
its designated agents, servants or employees, unless covered by insurance Tenant is required to
provide. This obligation to indemnify shall include Tenant's payment of reasonable attorneys' fees
and investigation costs and all other reasonable costs, expenses and liabilities incurred or suffered
by Landlord from Landlord's receipt of the first notice that any claim or demand is to be made or
may be made. Landlord may, at its option, require Tenant to assume Landlord's defense in any
action covered by this Section 9.2 through counsel satisfactory to Landlord. As used in this Lease,
the term "gross negligence" shall mean the failure to perform a manifest duty in reckless disregard
of the consequences as affecting the life or property of another.
ARTICLE X. DAMAGE OR DESTRUCTION
SECTION 10.1 RESTORATION.
(a) In the event the Building is damaged by fire or other perils covered by
extended coverage insurance to an extent not exceeding twenty-five percent (25%) of the full
insurable value thereof and if the damage thereto is such that the Building may be repaired,
reconstructed or restored within a period of ninety (90) days from the date of the happening of such
casualty and Landlord will receive insurance proceeds sufficient to cover the cost of such repairs,
Landlord shall commence and proceed diligently with the work of repair, reconstruction and
restoration and the Lease shall continue in full force and cffect. if such work of repair,
reconstruction and restoration is such as to require a period longer than ninety (90) days or exceeds
2671014920.0001
67472.03 aWG 1100 -1 6-
twenty-five percent (25%) of the full insurable value thereof or if said insurance proceeds will not
be sufficient to cover the cost of such repairs, Landlord may either elect to so repair, reconstruct or
restore and this Lease shall continue in full force and effect, or Landlord may elect not to repair,
reconstruct or restore and the Lease shall in such event terminate. Under any of said conditions,
Landlord shall give written notice to Tenant of its intention within ninety (90) days of the
occurrence of such damage. In the event Landlord elects not to restore the Building, this Lease
shall terminate on the date thirty (30) days following the date Tenant receives Landlord's written
notice indicating Landlord's election to terminate.
(b) In the event the Premises or the Building is damaged or destroyed to the
extent of more than ten percent (10%) of its replacement cost by a casualty not covered by a
standard fire and extended coverage policy of fire insurance, Landlord may elect to ten-ninate this
Lease on the date thirty (30) days following Tenant's receipt of Landlord's written notice of
Landlord's election to terminate this Lease. If such damage or destruction is not to such extent, or if
Landlord does not elect to terminate this Lease following such damage, Landlord shall commence
and proceed diligently with the work of repair, reconstruction and restoration and this Lease shall
continue in full force and effect.
(c) In the event of any casualty damage, the rental provided to be paid under this
Lease shall be abated proportionately in the ratio which the Premises are rendered unusable from
the date of destruction through the period of such repair, reconstruction or restoration unless (i) the
Premises were unusable for a period of three (3) business days or less, or (ii) the damage is due to
the fault or neglect of Tenant, its agents or employees. Tenant shall not be released from any of its
obligations under this Lease except to the extent and upon the conditions expressly stated in this
Section 10.1.
(d) If the then existing laws do not permit the restoration described in this
Section 10.1, Landlord may terminate this Lease by giving written notice to Tenant, in which event
this Lease shall terminate thirty (30) days following Tenant's receipt of such notice.
(e) Notwithstanding anything to the contrary contained in this Article, Landlord
shall not have any obligation whatsoever to repair, reconstruct or restore the Premises or any
portion of the Building when the damage occurs during the last twenty-four (24) months of the term
of this Lease or any extension thereof.
(f). No damages, compensation or claim shall be payable by Landlord by reason
of any injury to or interference with Tenant's business or property arising from any damage or
destruction or the making of any repairs, alterations or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances and equipment therein.
(g) Landlord's obligation to repair, reconstruct or restore Tenant's leasehold
improvements in the Premises shall be limited to those leasehold improvements originally installed
at Landlord's expense; the repair and restoration of any other leasehold improvements shall be
promptly performed by Tenant, at Tenant's sole cost and expense, subject to the requirements of
Section 6.4 applicable to Tenant's alterations to the Premises.
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SECTION 10.2 LANDLORD'S NON -LIABILITY. Landlord shall not be liable to Tenant,
and Tenant hereby waives all claims against Landlord for any injury or damage to any person or
property in or about the Premises, the Building or the Project from any cause whatsoever, except to
the extent caused by the gross negligence or willful misconduct by Landlord, its agents or
employees. Specifically, Landlord or its agents or employees shall not be liable for any damage to
property entrusted to Landlord's employees in the Building, nor for loss of or damage to any
property by theft or otherwise, nor for any injury or damage to persons or property by loss or
interruption of business or loss of income resulting from the following causes, except to the extent
caused by the gross negligence or willful misconduct of Landlord, its agents, servants or employees, -
fire, explosion, falling plaster, steam, gas, electricity, water or rain which may leak or flow from or
into any part of the Premises or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, ap-)fiances or plumbing or air-conditioning or electrical works therein,
whether such damage or injury results from conditions arising in the Premises or in other portions
of the Building, or from ether sources. Neither Landlord nor its agents shall be liable for
interference with the light or other incorporeal hereditaments, nor shall Landlord be liable for
damages from any latent defect in the Premises, the Building or the Project. Tenant shall give
prompt notice to Landlord in case of fire or accidents in the Premises or in the Building and of
defects therein or in the fixtures or equipment.
Tenant understands teat Landlord will not carry insurance of any kind on Tenant's furniture
or furnishings, fixtures or equipment, and that Landlord shall not be obligated to repair any damage
thereto or replace the same.
SECTION 10.3 TENANT'S WAIVER. With respect to any damage which Landlord is
obligated to repair or elects to repair, Tenant, as a material inducement to Landlord entering into
this Lease, irrevocably waives and releases its rights under the provisions of Section 1932(2) and
1933(4) of the California Civil Code and all comparable statutes or rules of law now or hereafter in
effect.
ARTICLE XI. EMINENT DOMAIN
If the whole of the Premises or so much thereof as to render the balance unusable by Tenant
shall be taken under power of eminent domain or if so much of the Building or of the Common
Facilities is/are taken under power of eminent domain as, in Landlord's reasonable judgment,
prevents or substantially impairs the use of the Building for the uses and purposes then being made
or proposed to be made by Landlord of the Building, this Lease shall automatically terminate as of
the date of such condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. No award for any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award which may be made in any taking or condemnation affecting
the Premises or any portion of the Project, together with any and all rights of Tenant now or
hereafter arising in or to the same or any part thereof, provided, however, that nothing contained
herein shall be deemed to give Landlord any interest in or to require Tenant to assign to Landlord
any award made to Tenant for the taking of personal property and trade fixtures belonging to Tenant
and/or for the interruption of or damage to Tenant's business.
26710148204=1
67472 03 a06ro1+00 -1 8-
In the event of a partial taking of any portion of the Premises which does not result in a
termination of this Lease, the basic annual rent shall be reduced in proportion to the part of the
Premises taken, taking into account any restoration and repair by Landlord.
No temporary taking of the Premises and/or of Tenant's rights therein or under this Lease
shall terminate this Lease or give Tenant any right to any abatement of rent hereunder. Any award
made by reason of any such temporary taking shall belong entirely to Landlord and shall be applied
by Landlord against the rent and the other obligations of Tenant hereunder when such rent and other
obligations first accrue.
Except as provided above, any award or damages payable in connection with a taking of the
Building and/or the Project, or any portion thereof, under the power of eminent domain shall belong
entirely to Landlord and Tenant shall have no right or interest therein.
ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE
SECTION 12.1 SUBORDINATION. On request of Landlord, Tenant will in writing
subordinate its rights hereunder to the lien of any first mortgage or first deed of trust now or
hereafter in force against the Premises and to all advances made or hereafter to be made upon the
security thereof, in the form required by the holder of such mortgage or deed of trust. In the event
any proceedings are brought for foreclosure, or in the event of the exercise of any power of sale
under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall attorn to
the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease.
SECTION 12.2 ESTOPPEL CERTIFICATE. Tenant shall, at any time and from time to
time, within ten (10) days' after notice from Landlord, execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the dates to which basic annual rental, additional rent and
other charges have been paid in advance, if any, (ii) acknowledging that, to Tenant's knowledge,
there are no uncured defaults on the part of Landlord hereunder, or specifying such defaults if any
are claimed, (iii) certifying that Tenant has no existing offsets and no right of offset against
Landlord, and (iv) certifying that Tenant has accepted possession of the Premises. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of
the Premises, Building and/or Project.
ARTICLE X1I1. DEFAULTS AND REMEDIES
SECTION 13.1 TENANT'S DEFAULTS. The occurrence of any one or more of the
following events shall constitute a default hereunder by Tenant:
(a) The abandonment or vacation of the Premises by Tenant.
(b) The failure by Tenant to make any payment of basic annual rent or additional
rent required to be made by Tenant hereunder, as and when due, where such failure shall continue
for a period of three (3) days after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any notice required under
767M14820-MI
6747.203
7472 Ul %06MM -19-
California Code of Civil Procedure Section 1161 et seq. For purposes of these default and remedies
provisions, the term "additional rent" shall be deemed to include all amounts of any type whatsoever
other than basic annual rent to be paid by Tenant pursuant to the terms of this Lease.
(c) Use of the Premises for any purpose other than as authorized in this Lease.
(d) Assignment or sublease of this Lease or of any interest therein by "Tenant,
either voluntarily or by operation of law (including transfer by testacy or intestacy), whether by
judgment, execution, or other means, without the prior written consent of Landlord.
(e) The failure or inability by Tenant as may be determined by Landlord to
observe or perform any of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant, other than those specified in (a) through (d) above, where such
failure shall continue for a period of fifteen (15) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 et seq.
(f) (i) The making by Tenant of any general assignment for the benefit of
creditors; (ii) a case is commenced by or against Tenant under Chapters 7, lI or 13 of the
Bankruptcy Code, Title 1 I of the United States Code as now in force or hereafter amended and if so
commenced against Tenant, the same is not dismissed within sixty (60) days; (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; (iv) the attachment, execution or other judicial seizure of substantially all of
Tenant's assets Iocated at the Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of its creditors or any
class thereof for the purpose of effecting a moratorium upon or composition of its debts.
SECTION 13.2 LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, then, in addition to any other remedies
available to Landlord at law or in equity, Landlord may exercise the following remedies:
(1) Landlord may terminate this Lease and all rights of Tenant hereunder
by giving written notice of such termination to Tenant. In the event that Landlord
shall so elect to terminate the Lease, then Landlord may recover from Tenant:
The worth at the time of award of the unpaid rent, charges, and additional
rent which had been earned as of the date of the termination hereof;
The worth at the time of award of the amount by which the unpaid rent and
additional rent which would have been earned after the date of the termination hereof
until the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided;
The worth at the time of award of the amount by which the unpaid rent,
charges, and additional rent for the balance of the term hereof after the time of award
2671014820,Ml
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exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided;
Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this Lease or
which in the ordinary course of things would be likely to result therefrom, including,
but not limited to, the cost of recovering possession of the Premises, expenses of
reletting, including brokerage commissions, necessary repair, renovation and
alteration of the Premises, reasonable attorneys' fees, expert witness costs, and any
other reasonable costs; and
Any other amount which Landlord may by law hereafter be permitted to
recover from Tenant to compensate Landlord for the detriment caused by Tenant's
default. As used in subparagraphs (i) and (ii) above, the "worth at the time of award"
shall be computed by allowing interest at the maximum rate permitted by law.
As used in subparagraph (iii) above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (I%), but not in excess of ten percent (l 0%) per annum.
(ii) Pursue the remedy described in California Civil Code Section 1951.4
and continue this Lease in effect without terminating Tenant's right to possession
even though Tenant has breached this Lease and abandoned the Premises and to
enforce all of Landlord's rights and remedies under this Lease, at law or in equity,
including the right to recover the rent as it becomes due under this Lease; provided,
however, that Landlord may at any time thereafter elect to terminate this Lease for
such previous breach by notifying Tenant in writing that Tenant's right to possession
of the Premises has been terminated.
(iii) Nothing in this Article XIII shall be deemed to affect Tenant's
indemnity of Landlord, for liability or liabilities based upon occurrences prior to the
termination of this Lease for personal injuries or property damage under the
indemnification clause or clauses contained in this Lease. Such covenants of
indemnification shall survive the termination of this Lease.
(iv) In the event of default by reason of any of the events stated in
subparagraph (f) of Section 13.1 above, this Lease or any interest in and to the
Premises shall not become an asset in any of such proceedings and, in any such event
and in addition to any and all rights or remedies of the Landlord hereunder or by law
provided, it shall be lawful for the Landlord to declare the term hereof ended and to
re-enter the Premises and take possession thereof and remove all persons therefrom,
and Tenant and its creditors (other than Landlord) shall have no further claim thereon
or hereunder.
(b) Landlord shall be under no obligation to observe or perform any covenant of
this Lease on its part to be observed or performed which accrues after the date of any default by
Tenant hereunder. In any action for unlawful detainer commenced by Landlord against Tenant by
16WO148216410p1 -� 1 -
67472 03 &OW 1100
0
reason of any default hereunder, the reasonable rental value of the Premises for the period of the
unlawful detainer shall be deemed to be the amount of the basic annual rent and additional rent
reserved in this Lease for such period, unless Landlord or Tenant shall prove to the contrary by
competent evidence. The various rights, powers and remedies reserved to Landlord herein, and
those rights, powers and remedies of Landlord under any other agreement now or hereafter in force
between Landlord and Tenant, including those not specifically described herein, shall be
cumulative, and, except as otherwise provided by California statutory law in effect at the time,
Landlord may pursue any or all of such rights and remedies, at the same time, or otherwise.
(c) No delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of any such right or remedy or of any default by Tenant hereunder. The
acceptance by Landlord of rent or any additional rent hereunder shall not be (i) a waiver of any
preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to
pay the particular rent or any additional rent accepted, regardless of Landlord's knowledge of such
preceding breach or default at the time of acceptance of such rent or additional rent, or (ii) a waiver
of Landlord's right to exercise any remedy available to Landlord by virtue of such breach or default.
No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein stipulated
shall be deemed to be other than on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or payment as rent be
deemed an accord and satisfaction, and Landlord shall accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy in this
Lease provided. Tenant hereby waives any right of redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law,
in the event Tenant is evicted or Landlord takes possession of the Premises by reason of any default
by Tenant hereunder. No act or thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No employee of Landlord or of
Landlord's agents shall have any power to accept the keys to the Premises prior to the termination of
this Lease, and the delivery of the keys to any such employee shall not operate a termination of this
Lease or a surrender of the Premises.
SECTION 13.3 INTEREST ON TENANTS OBLIGATIONS; LATE PAYMENTS.
(a) Any installment of rent due under this Lease or any other sum not paid to
Landlord when due (other than interest) shall bear interest at the maximum rate allowed by law
from the date such payment is due until paid, provided, however, that the payment of such interest
shall not excuse or cure the default.
(b) Tenant hereby acknowledges that the late payment by Tenant to Landlord of
rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such costs may include,
but are not limited to, administrative, processing and accounting charges, and late charges which
may be imposed on Landlord. by the terms of any mortgage or trust deed covering the premises.
Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days after the date due, then Tenant shall pay to
Landlord, in addition to the interest provided above, a late charge in the amount of five percent
(5%) of the delinquent installment of rent. The parties agree that such late charge represents a fair
?67/0148200001
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• 0
and reasonable estimate of the cost Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant's default
with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights
and remedies granted hereunder.
(c) Following each second consecutive Iate payment of rent, Landlord shall have
the option (i) to require that beginning with the first payment of rent next due, rent shall no longer
be paid in monthly installments but shall be payable quarterly three (3) months in advance and/or
(ii) to require that Tenant increase the amount, if any, of the security deposit required under Section
3.2 as listed in Item 9 of the Basic Lease Provisions by one hundred percent (100%), which
additional security deposit shall be retained by Landlord, and may be applied by Landlord, in the
manner provided in Section 3.2.
SECTION 13.4 RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at
Tenant's sole cost and expense and without any abatement of rent. If Tenant shall fail to pay any
sum of money, other than rent, required to be paid by it hereunder or shall fail to perform any other
act on its part to be performed hereunder, or to provide any insurance or evidence of insurance to be
provided by Tenant, and such failure shall continue beyond any applicable grace period set forth in
Section 13.1, then in addition to any other remedies provided herein, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligations of Tenant, make
any such payment or perform any such act on Tenant's part to be made or performed as provided in
this Lease or to provide such insurance. Any payment or performance of any act or the provision of
any such insurance by Landlord on Tenant's behalf shall not give rise to any responsibility of
Landlord to continue making the same or similar payments or performing the same or similar acts.
All costs, expenses and other sums incurred or paid by Landlord in connection therewith, together
with interest at the maximum rate permitted by law from the date incurred or paid by Landlord shall
be deemed to be additional rent hereunder and shall be paid by Tenant with and at the same time as
the next monthly installment of basic annual rent hereunder, and any default therein shall constitute
a breach of the covenants and conditions of this Lease.
SECTION 13.5 DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it under this Lease unless
and until it has failed to perform such obligation within thirty (30) days after written notice by
Tenant to Landlord, and to any mortgagee or beneficiary of a deed of trust with an interest in any
encumbrance affecting Landlord's interest in the Prcmises, specifying in reasonable detail the
nature and extent of any such failure; provided, however, that if the nature of Landlord's obligation
is such that more than thirty (30) days are required for its performance, then Landlord shall not be
deemed to be in default if it commences such performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion. If, after notice to Landlord of default,
Landlord fails to cure such default as provided herein, then Tenant shall have the right to cure such
default at Landlord's expense. Tenant shall not have the right to terminate this Lease or to withhold,
reduce or offset any amount against any payments of basic annual rent or any other charges due and
payable hereunder, and Tenant's remedy shall be limited to damages and/or an injunction. It is
expressly understood and agreed to that any money judgment resulting from any default or other
claim arising under this Lease shall be satisfied only out of the rents, issues, profits or other income
("Income") actually received from the operation of the Building and no other real, personal or
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67472-03 W6101100 -23-
mixed property of Landlord (the term "Landlord" for purposes of this Section only shall mean any
and all partners, both general and/or limited, if any, which comprise Landlord), wherever situated,
shall be subject to levy on any such judgment obtained against Landlord and whether or not such
Income is sufficient for the payment of such judgment, Tenant will not institute any further action,
suit, claim or demand, in law or in equity, against Landlord for or on the account of such deficiency_
Tenant hereby waives, to the extent waivable under law, any right to satisfy said money judgment
against Landlord except from Income received by Landlord for the operation of the Building.
SECTION 13.6 EXPENSES AND LEGAL FEES. If Tenant or Landlord shall bring any
action for any relief against the other, declaratory or otherwise, arising out of or under this Lease,
including any suit by Landlord for the recovery of rent or possession of the Premises, the prevailing
party shall be entitled to recover its attorney's fees and costs, including without limitation, expert
witness fees, photocopying, facsimile, messenger and postage costs, in connection with such suit,
and such attorney's fees and costs shall be deemed to have accrued on the commencement of such
action and shall be paid whether or not such action is prosecuted to judgment.
ARTICLE XIV. END OF TERM
SECTION 14.1 HOLDING OVER. This Lease shall terminate and become null and void
without further notice upon the expiration of the term herein specified, and any holding over by
Tenant after such expiration shall not constitute a renewal or extension hereof or give Tenant any
rights under this Lease, except when in writing signed by both parties hereto or as otherwise herein
provided. If Tenant shall hold over for any period after the expiration of the Lease term, Landlord
may, at its option, treat Tenant as a tenant at sufferance only commencing on the first (1st) day
following the expiration of this Lease and subject to all of the terms and conditions herein
contained, except that the basic annual rent, and monthly installments thereof, shall be one hundred
fifty percent (1501/6) of that payable at the date of expiration.
SECTION I4.2 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
expiration of the term of this Lease, or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition and repair as when
received or as hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to Landlord, remove or
cause to be removed from the Premises all debris and rubbish, all furniture, equipment, and trade
fixtures, free-standing cabinet work and other articles of any other persons claiming under Tenant
unless Landlord exercises its option to have any subleases or subtenancies assigned to it. Tenant
shall repair all damage to the Premises resulting from such removal, which repair shall include the
patching and filling of holes and repair of structural damage. In the event that Tenant shall fail to
comply with the provisions of this Section 14.2, Landlord may make such repairs and the cost
thereof shall be additional rent payable by Tenant upon demand. If requested by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an instrument in writing releasing and
quitclaiming to Landlord all right, title and interest of Tenant in and to the Premises by reason of
this Lease or otherwise.
SECTION 14.3 AFFIXED PROPERTY. All fixtures, equipment, alterations, additions,
improvements and/or appurtenances attached to or built into the Premises prior to or during the term
hereof, whether by Landlord at its expense or at the expense of Tenant or both, shall be and remain
267ro I a820.000I -24-
67472 03 .0610 1100
•
part of the Premises and shall belong to Landlord unless otherwise expressly provided for in this
Lease or unless such removal is required by Landlord pursuant to the provisions of Section 6.4
hereof. Such fixtures, equipment, alterations, additions, improvements and/or appurtenances shall
include, without limitation, floor coverings, drapes, paneling, molding, built-in cabinets, doors,
vaults, (exclusive of vault doors), plumbing, electrical communications and lighting systems,
silencing equipment, all fixtures and outlets for the systems mentioned above and for all telephone,
radio, telegraph and television purposes, and any special flooring or ceiling installations.
ARTICLE XV. NOTICES
Any notice, election, demand, consent, approval or other communication to be given or
other document to be delivered by either party to the other hereunder may be delivered in person to
an officer or duly authorized representative of the other party, or may be deposited in the United
States avail, duly registered or certified, postage prepaid, return receipt requested, and addressed to
the other party at the address set forth in Item I 1 of the Basic Lease Provisions hereof, or if to
Tenant, at such address or, from and after the Commencement Date, at the Premises (whether or not
Tenant has departed from, abandoned or vacated the Premises). Either party may from time to time,
by written notice to the other, served in the manner herein provided, designate a different address.
If any notice or other documents is sent by mail as aforesaid, the same shall be deemed served or
delivered twenty-four (24) hours aRer the mailing thereof. If more than one Tenant is named under
this Lease, service of any notice upon any one of said Tenants shall be deemed as service upon all
of them.
ARTICLE XVI. RULES AND REGULATIONS
The Rules and Regulations attached hereto as Exhibit "C" by this reference are hereby
incorporated herein and made a part hereof. Tenant agrees to observe faithfully -and comply strictly
with such Rules and Regulations, and any reasonable amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants by Landlord for the
safety, care, security (including restrictions on hours and manner of access to the Building) good
order, cleanliness of the Premises, Building and/or the Project, or portions thereof. Landlord shall
not be liable to Tenant for any violation of such Rules and Regulations or the breach of any
covenant or condition in any lease by any other tenant. One or more waivers by Landlord of any
breach of such Rules and Regulations by Tenant or by any other tenant(s) shall not be a waiver of
any subsequent breach of that rule or any other. In the case of any conflict between such Rules and
Regulations and this Lease, this Lease shall control.
ARTICLE XVII. BROKER'S COMMISSION
The parties recognize as the broker(s) who procured this Lease the firm(s), if any, stated in
Item 10 of the Basic Lease Provisions, and agree that Landlord shall be solely responsible for the
payment of a brokerage commission, if any, to said broker, and that Tenant shall have no
responsibility therefor unless otherwise provided in this Lease. Tenant warrants that it has had no
dealings with any other real estate broker or agent in connection with the negotiation of this Lease,
and agrees to indemnify, defend and hold Landlord harmless from any cost, expense or liability
(including reasonable attorneys' fees in connection therewith) for any compensation, commissions
or charges claimed by any other real estate broker or agent employed or claiming to represent or to
2671014820.0001
67472 03 &06101100 -25-
0 •
have been employed by Tenant in connection with the negotiation of this Lease. The foregoing
agreement shall survive the termination of this Lease.
ARTICLE XVIII. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or transfers of Landlord's interest in the Premises, including a so-
called sale -leaseback, the transferor shall be automatically relieved of any and all obligations on the
part of Landlord accruing under this Lease from and after the date of such transfer. It is intended
hereby that the covenants and obligations contained in this Lease on the part of Landlord shall, --
subject to the foregoing, be binding on Landlord, its successors and assigns, only during and in
respect of their respective periods of ownership.
ARTICLE XIX. INTERPRETATION
SECTION 19.1 GENDER AND NUMBER. Whenever the context of this Lease requires,
the words "Landlord" and "Tenant", as used herein, shall include the plural as well as the singular
and words used in neuter, masculine or feminine genders shall include the others.
SECTION 19.2 HEADINGS. The captions, headings, titles, numbering and indexing of
the Articles and Sections of this Lease are for convenience only, are not a part of this Lease and
shall have no effect upon the construction or interpretation of any part hereof.
ARTICLE XX. EXECUTION AND RECORDING
SECTION 20.1 CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that he is duly authorized
to execute and deliver this Lease on behalf of said corporation in accordance with said corporation's
by-laws or a duly adopted resolution of its board of directors, and that this Lease is binding upon
said corporation in accordance with its terms. Tenant shall, at Landlord's request, deliver a certified
copy of its board of directors' resolution authorizing or ratifying such execution.
SECTION 20.2 RECORDING. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and acknowledge a "short
form" memorandum of this Lease for recording purposes.
SECTION 20.3 AMENDMENTS. No amendment, addition, revocation or ratification of
this Lease shall be effective unless in writing signed by the parties hereto. No actions, policies, oral
or informal arrangements, business dealings or other course of conduct by or between the parties
shall be deemed to amend this Lease or revise this Lease in any respect.
ARTICLE XXI. MISCELLANEOUS
SECTION 21.1 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms hereof could adversely affect the ability of Landlord to negotiate
other Ieases with respect to the Project. Tenant agrees that it, and its partners, officers, directors,
employees and attorneys shall not disclose the terms and conditions of this Lease to any other
person without the prior written consent of Landlord, provided, however, that Tenant may disclose
2671014820-0001
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• 0
the terms hereof to the independent accountants who audit its financial statements. It is understood
and agreed that damages would be an inadequate remedy for the breach of this provision by Tenant,
and Landlord shall have the right to specific performance of this provision and to injunctive relief to
prevent its breach or continued breach.
SECTION 21.2 FURNISHING OF FINANCIAL STATEMENTS. Landlord has reviewed
financial statements and tax returns if so requested of the Tenant and has relied upon the truth and
accuracy thereof with Tenant's knowledge and representations of the truth and accuracy of same and
that said statements accurately and fairly depict the financial condition of Tenant. Said statements
are an inducing factor and consideration for the Tenant. Tenant and/or guarantors shall promptly
furnish Landlord, upon request, with annual financial statements reflecting the then current financial
condition of Tenant throughout the term of this Lease.
. SECTION 21.3 CHANGES REQUESTED BY LENDER. If, in connection with obtaining
financing for the Building, any lender shall request reasonable modifications in this Lease as a
condition to such financing, Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such modifications do not materially increase the obligations of Tenant
hereunder or materially and adversely affect the leasehold interest hereby created.
SECTION 21.4 GOVERNMENTAL REQUIREMENTS. Tenant covenants at all times
during the term of this Lease to comply with the requirements of the Occupational Safety and
Health Act of 1970, 29 U.S.C., Section 651 et seq., and any analogous legislation in California
(collectively, the "Act"), to the extent that the Act applies to the Premises and any activities therein,
and to comply with all other Governmental Requirements, including, but not Iimited to, all laws
prohibiting discrimination against any person or group of persons on account of race, color, creed,
sex, national origin or ancestry and all laws described in Section 4.1 above. Without limiting the
generality of the foregoing, Tenant covenants to maintain all working areas, all machinery,
equipment, appliances, structures, electrical facilities and the like upon the Premises in a condition
that full complies with the requirements of the Act, including such requirements as would be
applicable with respect to agents, employees or contractors of Landlord who may from time to time
be present upon the Premises.
SECTION 21.5 COVENANTS AND CONDITIONS. All of the provisions of this Lease
shall be construed to be "conditions" as well as "covenants" as though the words specifically
expressing or imparting covenants and conditions were used in each separate provision.
SECTION 21.6 WORK LETTER. Landlord and Tenant each agree to fully perform their
obligations under the Work Letter, if any. Any default by either party in the performance of its
obligations under the Work Letter shall constitute a default by such party under this Lease.
SECTION 21.7 JOINT AND SEVERAL LIABILITY. If there be more than one Tenant,
the obligations hereunder imposed upon Tenant shall be joint and several and the act of or notice
from, or notice or refund to, or the signature of, any one or more of such persons, with respect to the
tenancy of this Lease, shall be binding upon each and all of the persons executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or so given or received
such notice or refund or so signed.
267,014,20.0001
67472-03 s06101fW -27-
•
SECTION 21.8 SUCCESSORS. Subject to Articles VIII and XVIII above, all rights and
liabilities herein given to, or imposed upon, the respective parties hereto shall extend to and bind the
several respective heirs, executors, administrators, successors, and assigns of the parties. Nothing
contained herein is intended, or shall be construed, to confer upon or grant to any person other than
Landlord and Tenant any rights or remedies under this Lease.
SECTION 21.9 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a factor.
SECTION 21.10 CONTROLLING LAW. This Lease shall be governed by and interpreted
in accordance with the Iaws of the State of California.
SECTION 21.11 SEVERABILITY. If any term or provision of this Lease shall be held
invalid or unenforceable to any extent, the remainder of this Lease shall not be affected thereby and
each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted
by law.
SECTION 21.12 RELATIONSHIP OF PARTIES. Nothing contained herein shall be
deemed or construed by the parties hereto, or by any third party, as creating the relationship of
principal and agent or of partnership or joint venture between the parties hereto, it being understood
and agreed that neither the method of computation of rent, nor any other provision contained herein,
nor any acts of the parties herein, shall be deemed to create any relationship between the parties
hereto other than the relationship of Tenant and Landlord.
SECTION 21.13 INABILITY TO PERFORM. In the event that Landlord shall be delayed
or hindered in or prevented from the performance of any work or in performing any act required
hereunder by reason of: strikes; lockouts; labor troubles; inability to procure materials, labor or
energy; failure of power; disruption, reduction, interruption, curtailment or failure of utility, solid
waste disposal or other services; restrictive Governmental Requirements; voluntary or involuntary
participation, at the request of a governmental agency or otherwise, in any plan or program
involving allocations, priorities, limitations or restraints regarding water, fuel or other energy, or
otherwise; other governmental action or inaction; riots, insurrection; war, fires; floods; earthquakes;
storms; droughts, other Acts of God; or any other reason of a similar or dissimilar nature not the
fault of Landlord in performing work or doing acts required under the terms of this Lease, then the
performance of such work or the doing of such act shall be excused for the period of the delay, and
the period for the performance of any work or the doing of such act shall be extended for a period
equivalent to the period of such delay. The occurrence of any event constituting a cause for
excusable delay shall not relieve Tenant from any obligations, including payment of rent, under this
Lease.
SECTION 21.14 QUIET ENJOYMENT. Upon payment by Tenant of the basic annual
rent, additional rent and all the charges herein provided, and upon the observance and performance
of all the covenants, terms and conditions of this Lease on Tenant's part to be observed and
performed, Tenant shall peaceably and quietly hold and enjoy the Premises for the term hereby
demised without hindrance or interruption by Landlord or any other person or persons lawfully or
equitably claiming by, through or under Landlord.
267r01aszo-0M1 -28-
6747203 &%101+00
SECTION 21.15 HAZARDOUS WASTE AND MATERIALS. Tenant shall not engage in
any activity on or about the Premises or the Project that violates any Environmental Law, and shall
promptly, at Tenant's sole cost and expense, take all investigatory and/or remedial action required or
ordered by any governmental agency or Environmental Law for clean-up and removal of any
contamination involving any Hazardous Material created or caused directly or indirectly by Tenant.
The term "Environmental Law" shall mean any federal, state or local law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the environmental conditions on, under or
about the Premises, including, without limitation, (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Sections 9601 et seq.; (ii) the
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 et seq.; (iii)
California Health and Safety Code Sections 25100 et seq.; (iv) the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq.; (v) the
Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 et seq.; (vi) California Water Code
Section 1300 et seq.; and (vii) California Civil Code Section 3479 et seq., as such laws are amended
and the regulations and administrative codes applicable thereto. The term "Hazardous Material"
includes, without limitation, any material or substance which is (i) defined or listed as a "hazardous
waste", "extremely hazardous waste", "restrictive hazardous waste" or "hazardous substance" or
considered a waste, condition of pollution or nuisance under the Environmental Laws; (ii)
petroleum or a petroleum product or fraction thereof, (iii) asbestos; and/or (iv) substances known by
the State of California to cause cancer and/or reproductive toxicity. It is the intent of the parties
hereto to construe the term "Hazardous Materials" and "Environmental Laws" in its broadest sense.
Tenant shall provide all notices required pursuant to the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249.5 et seq. Tenant shall
provide prompt written notice to Landlord of the existence of Hazardous Substances on the
Premises and all notices of violation of the Environmental Laws received by Tenant. Tenant's
obligations pursuant to this Section 21.15 shall be referred to in this Lease as "Environmental
Compliance".
SECTION 21.16 ENTIRE AGREEMENT. This Lease and the Exhibits and other
attachments hereto cover in full each and every agreement of every kind or nature whatsoever
between the parties hereto concerning the Premises and the Building or Project, and all preliminary
negotiations, oral agreements, understandings and/or practices of whatsoever kind with respect to
the Premises or the Building or Project, except those contained herein or therein, are superseded and
of no further force or effect; no person, firm or corporation has at any time had an authority from
Landlord to make any representations or promises on behalf of Landlord, and Tenant agrees that if
any such representations or promises have been made by Landlord or others, Tenant hereby waives
all right to rely thereon. No verbal agreement or implied covenant shall be held to vary the
provisions hereof, any statute, law, or custom to the contrary notwithstanding.
267/01 <820-0001
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EXHIBIT "A-2"
LEGAL DESCRIPTION OF THE PROJECT
That certain real property located in the City of Huntington Beach, County of Orange, State
of California, more particularly described as follows:
Lots 1-6, 11, 13 and 15 in Block 104 of Huntington Beach in the City of Huntington
Beach, County of Orange, State of California as shown on a map recorded in Book 3,
Page 36 of Miscellaneous Maps, Records of Orange County, California.
EXHIBIT "A-2"
TO OFFICE
2671014220-0001
67472 03 s0W01M SPACE LEASE
•
E
EXHIBIT "A-3"
CONFIRMATION OF TERM
The undersigned as the Landlord and Tenant under that certain Office Space Lease dated
for space within the Huntington Beach,
California, hereby confirm that the term of said Lease has commenced , and
that the expiration date of the term of said Lease is
ABDELMUTI DEVELOPM COMPANY, a California
general partnership
/AW?i
,�v6eral partner
"Landlord"
COMPUTER MEMORY TEST LABS, INC., a California
corporation
By: ter'
Jo Deters, President
"Tenant"
EXHIBIT "A-3"
267,01491.0- 01
67472.03 a06r01100 TO OFFICE SPACE LEASE
•
EXHIBIT "B"
THE WORK LETTER
Landlord shall not be required to perform any work in the Premises and Tenant accepts the
Premises on the Commencement Date in its then existing "AS -IS" condition.
EXHIBIT "B"
67472-osaowni�ioo TO OFFICE SPACE LEASE
• 0
EXHIBIT "C"
RULES AND REGULATIONS ATTACHED TO AND WHICH
CONSTITUTE A PART OF OFFICE SPACE LEASE
The following Rules and Regulations shall be in effect at the Project. Landlord reserves the
right to adopt reasonable modifications and additions hereto.
(1) The sidewalks, entrances, passages, courts, elevators, vestibules, stairways, corridors
or halls of the Building shall not be obstructed by any tenant or used for any purpose other than
ingress and egress from the respective premises. The halls, passages, entrances, elevators,
stairways, balconies and roof are not for the use of the general public, and Landlord shall in all
cases retain the right to control and prevent access thereto of all persons whose presence in the
judgment of Landlord shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be construed to prevent such
access to persons with whom Tenant normally deals only for the purpose of conducting its business
on the Premises (such as clients, customers, office suppliers and equipment vendors, and the like)
unless such persons are engaged in illegal activities. No tenant and no employees of any tenant
shall go upon the roof of the Building without the written consent of Landlord.
(2) No awnings or other projection shall be attached to the outside walls of the Building
or to balconies without the prior written consent of Landlord. No hanging planters, television sets
or other objects shall be attached to or suspended from ceilings without the prior written consent of
Landlord. No curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises without the prior written consent of Landlord.
All electrical ceiling fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by Landlord. No awnings,
furniture, trees or plants or other personal property shall be placed upon any balcony or patio,
without Landlord's prior written approval.
(3) No sign, advertisement or notice shall be exhibited, painted or affixed by any tenant
on any part of, or so as to be seen from the outside of, the Premises or the Building without the prior
written consent of Landlord. In the event of the violation of the foregoing by any tenant, Landlord
may remove such sign, advertisement or notice without any liability and may charge the expense
incurred in such removal to the tenant violating this rule. Interior signs on doors and director tablet
shall be inscribed, painted or affixed for each tenant by Landlord at the expense of such tenant, and
shall be of a size, color and style acceptable to Landlord.
(4) The sashes, sash doors, skylights, windows and doors that reflect or admit light and
air into the halls, passageways or other public places in the Building shall not be covered or
obstructed by any tenant, nor shall any bottles, parcels or other articles be placed on the
windowsills, balcony or patio railings.
(5) The water and wash closets and other plumbing fixtures shall not be used for any
purpose other than those for which they were constructed, and no foreign substance of any kind
EXHIBIT "C"
2671014axo-0oo1
67472-03 &0"1tOO TO OFFICE SPACE LEASE
shall be thrown herein. All damages resulting from any misuse of the fixtures shall be borne by the
tenant who, or whose servants, employees, agents, visitors or licensees shall have caused the same.
(6) No tenant shall mark, paint, drill into, or in any way deface any part of the Premises
or the Building. No boring, stringing of wires or laying of linoleum or other floor coverings shall
be permitted, except with the prior written consent of Landlord, and as Landlord may direct. Any
tenant permitted by Landlord to lay linoleum or other similar floor covering shall not affix the sarne
to the floor of the Premises in any manner except by a paste, or other material which may easily be
removed with water, the use of cement or other similar adhesive materials being expressly `
prohibited. The method of affixing any such linoleum or other similar floor covering to the floor, as
well as the method of affixing carpets or rugs to the Premises, shall be subject to approval by
Landlord. The expense of repairing any damage resulting from a violation of this rule shall be
borne by the tenant by whom, or by those agents, clerks, employees or visitors, the damage shall
have been caused.
(7) If Tenant desires telephone or telegraph connections, Landlord will direct
electricians as to where and how the wires are to be introduced.
(8) No bicycles, vehicles or animals of any kind shall be brought into or kept in or about
the Premises, and no cooking shall be done or permitted by any tenant in the Premises, except that
the preparation of coffee, tea, hot chocolate and similar items for tenants, their employees and
visitors shall be permitted. No tenant shall cause or permit any unusual or objectionable odors to be
produced in or permeate from or throughout the Premises.
(9) No portion of the Building shall be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises for general office
purposes without Landlord's prior written approval. No tenant shall, without the prior written
consent of the Landlord, occupy or permit any portion of his premises to be occupied or used for the
manufacture or sale of liquor, narcotics, or tobacco in any form, as a medical office, chiropractor's
office, as a barber or manicure shop, or as an employment bureau or any business other than that
specifically provided for in the Lease. No tenant shall engage or pay any employees on its premises
except those actually working for such tenant on its premises nor advertise for laborers giving an
address at its premises. The Building shall not be used for lodging or sleeping or for any immoral
or illegal purposes.
(10) Except with the prior written consent of the Landlord, no tenant shall sell, or permit
the sale at retail, of newspapers, magazines, periodicals, or theater tickets, in or from the Building,
nor shall any tenant carry on, or permit or allow any employee or other person to carry on, the
business of stenography, typewriting or any similar business in or from the Building for the service
or accommodation of occupants of any other portion of the Building.
(11) Landlord reserves the right to prohibit personal goods and services vendors (as such
term is defined below) from access to the Building. To the extent that Landlord permits such
vendors access to the Building, such access shall be upon such reasonable terms and conditions,
including but not limited to the payment of a reasonable fee and provision for insurance coverage,
as are related to the safety, care and cleanliness of the Building, the preservation of good order
EXHIBIT "C"
TO OFFICE SPACE LEASE
267101a8204=1
67472.03 3%101/00 Page -2-
thereon, and the relief of any financial or other burden on Landlord occasioned by the presence of
such vendors or the sale by them of personal goods or services (as such term is defined below) to a
tenant or its employees. If reasonably necessary for the accomplishment of the aforementioned
purposes, Landlord may exclude a particular vendor entirely or limit the number of vendors who
may be present at any one time in the Building. The terra "personal goods or services vendors"
means persons who periodically enter the Building for the purpose of selling goods or services to a
tenant, other than goods or services which are used by a tenant only for the purpose of conducting
its business on its premises. "Personal goods or services" include, but are not limited to, drinking
water and other beverages, food, barbering services, and shoe shining services.
(12) No tenant shall make, or permit to be made, any unseemly or disturbing noises or
disturb or interfere with occupants of this or neighboring buildings or premises or those having
business with them by the use of any musical instrument, radio, phonograph or unusual noise, or in
any other way.
(13) No tenant shall throw anything out of doors, windows or skylights or down the
passageways.
(14) No tenant, nor any of a tenant' servants, employees, agents, visitors or licensees,
shall at any time bring, keep or use on the Building any kerosene, gasoline, or inflammable,
combustible, explosive, or corrosive fluid, or any other illuminating material, or use any method of
heating other than that supplied by Landlord.
(15) No tenant shall sweep or throw or permit to be swept or thrown from the Premises
any dirt or other substance into any of the corridors or halls or elevators, or out of the doors,
windows, stairways, patios or balconies of the Building, and Tenant shall not use, keep or permit to
be used or kept any foul or noxious gas or substance in the Premises, or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or interfere in any way with
other tenants or those having business therein, nor shall any animals or birds be kept in or about the
Building. Smoking or carrying lighted cigars, cigarettes, pipes, or other lighted smoking materials,
in, the elevators and all other common and/or public areas of the Building is prohibited.
(16) No additional locks or bolts or any kind shall be placed upon any of the doors or
windows by any tenant, nor shall any changes be made in existing locks or the mechanisms thereof
unless Landlord is first notified thereof and gives written approval. Each tenant must, upon
termination of his tenancy, give to Landlord all keys of stores, offices, or toilets and toilet rooms,
either furnished to, or otherwise procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay Landlord the cost of replacing the same or of changing the lock or
locks opened by such lost key if Landlord shall deem it necessary to make such change.
(17) All removals, or the carrying in or out of any safes, freight, furniture, or bulky matter
of any description must take place during the hours which Landlord may determine from time to
time. The moving of safes or other fixtures or bulky matter of any kind must be made upon
previous notice to the manager of the Building and under his/her supervision, and the persons
employed by any tenant for such work must be acceptable to Landlord. Landlord reserves the right
EXHIBIT "C"
TO OFFICE SPACE LEASE
267/0JAnD 0001
67A72.03 00"IM Page -3-
RCATIOUTING SHEET
INITIATING DEPARTMENT: Economic Development
SUBJECT: Approval As To Form: Lease Between Abdelmuti Dev. Co. &
Computer Memory Test Labs, fnc_
COUNCIL MEETING DATE: June 19, 2000
RCA ATTACHMENTS
STATUS
Ordinance (wlexhibits & legislative draft if applicable)
Not Applicable
Resolution (wlexhibits & legislative draft if applicable)
Not Applicable
Tract Map, Location Map and/or other Exhibits
Not Applicable
Contract/Agreement (wlexhibits if applicable)
(Signed in full by the City Attomey)
Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attomey)
Attached
Certificates of Insurance (Approved by the City Attomey)
Not Applicable
Financial Impact Statement (Unbudget, over $5,000)
Not Applicable
Bonds (If applicable)
Not Applicable
Staff Report (If applicable)
Not Applicable
Commission, Board or Committee Report (If applicable)
Not Applicable
Findings/Conditions for Approval and/or Denial
Not Applicable
EXPLANATION FOR MISSING ATTACHMENTS
REVIEW D
RETURNED
FORWARDE
Administrative Staff
( )
{ )
Assistant City Administrator (Initial)
( )
{ )
City Administrator (Initial)
City Clerk
( )
EXPLANATION FOR RETURN OF ITEM: