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HomeMy WebLinkAboutAbdelmuti Development Company & L. Michael Makasjian - 1999-06-07bs�l6GS- Ebb �o�h/c�- �-d cY• Council/Agency Meeting He Deferred/Continued to: pproved ❑ Conditionally p ved ❑ Denied „_/-� 1 1'7. /I.✓/YAl /f n �ie-sn�:IJ.n h Ou7Uiity Clerk's - I Council Meeting Date: June 7, 19996unt)l Department ID Number. ED 99-30 I CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION x SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGEN(fY MEMBERS N b:q C7 SUBMITTED BY: RAY SILVER, Executive Director'' ice { PREPARED BY: DAVID C. BIGGS, Director of Economic Developmen to c"' SUBJECT: Approval as to Form: Lease Between Abdelmuti Development Cb. & L. Michael Makasjian (Oceanview Promenade) FS of issue, Funding Source, Recommended Action, Altemattve Action(s), Analysts, 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: MOTION TO: Approve as to form the attached lease between Abdelmuti Development Company and L. Michael Makasjian regarding Suite 2D In the Oceanview Promenade. Alternative Actions : Do not approve the lease as to form REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: June 7,1999 DEPARTMENT ID NUMBER: ED 99-30 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 continuation of a lease with an existing tenant: L. Michael Makasjian, for one year (until March 31s= 2000) at $1.60 per square foot (essentially the same rent paid under the expired lease) for 1,670 rentable square feet. Environmental Status: NA Attachment(s): RCA Author: Kohler @ 5457 DocumentS .2- OSM319912:09 PM Lease Between Abdelmuti Development Company And L. Michael Makasjian (Oceanview Promenade) .ATTACHMENT #1.. OFFICE SPACE LEASE between ABDELMUTI DEVELOPMENT COMPANY, a California general partnership AS LANDLORD and L. MICHAEL MAKASJIAN AS TENANT SUITE 2D OCEANVIEW PROMENADE HUNTINGTON BEACH, CALIFORNIA 1�� s-(3.-15 1? P30VM IS TO GAIL HUTT01:, City Attorney By;. Depe.,r City 1�:.o=OZ 2671014E-4OODI/3247s293 ,03M/99 TABLE OF CONTENTS ARTICLE I. PREMISES . . . . . . . . . . . . . . . . . . . . 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 ARTICLE II. TERM . . . . . . . . . . . . . . . . . . . . . . 4 SECTION 2.1 GENERAL . . . . . . . . . . . . . . . . . . 4 SECTION 2.2 TENDER OF POSSESSION BY LANDLORD . . . . . 4 SECTION 2.3 INTENTIONALLY OMITTED . . . . . . . . . . . 4 ARTICLE III. RENT AND SECURITY DEPOSIT . . . . . . . . . . . 4 SECTION 3.1 BASIC ANNUAL RENT . . . . . . . . . . . . . 4 SECTION 3.2 SECURITY DEPOSIT . . . . . . . . . . . . . 5 SECTION 3.3 OPERATING EXPENSES . . . . . . . . . . . . 5 ARTICLE IV. USES . . . . . . . . . . . . . . . . . . . . . . 5 SECTION4.1 USE . . . . . . . . . . . . . . . . . . . 5 SECTION 4.2 PROHIBITION AGAINST SOLICITATION AND OTHER ACTIVITIES WITHOUT THE PERMISSION OF LANDLORD. . . . . . . . . . . 6 OM SECTION 4.3 EXCLUSIVE CONTROL OVER CMON AREA . . . . 6 SECTION4.4 SIGNS . . . . . . . . . . . . . . . . . . . 7 ARTICLE V. SERVICES . . . 7 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 TENANT'S ALTERATIONS . . . . . . . . . . . 10 SECTION 6.5 MECHANIC'S LIENS . . . . . . . . . . . . . 10 SECTION 6.6 ENTRY AND INSPECTION . . . . . . . . . . . 11 SECTION 6.7 Intentionally omitted. . . . . . . . . . . 11 ARTICLE VII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY . . . 11 SECTION 7.1 TAXES ON TENANT'S PROPERTY . . . . . . . . 11 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 . . . . . . . . . . . . . . . 13 ARTICLE IX. INSURANCE AND INDEMNITY . . . . . . . . . . . 14 SECTION 9.1 TENANT'S INSURANCE . . . . . . . . . . 14 SECTION 9.2 TENANT'S INDEMNITY . . . . . . . . . . . . 15 ARTICLE X. DAMAGE OR DESTRUCTION 15 SECTION 10.1 RESTORATION 15 SECTION 10.2 LANDLORD'S NON -LIABILITY 17 SECTION 10.3 TENANT'S WAIVER . . . . 17 ARTICLE XI. EMINENT DOMAIN . . . . . . . . . . . . . . . . . 17 ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE . . . . . . 18 SECTION 12.1 SUBORDINATION . . . . . . . . . . . . . . 18 SECTION 12.2 ESTOPPEL CERTIFICATE . . . . . . . . . . . 18 ARTICLE XIII.DEFAULTS AND REMEDIES . . . . . . . . . . . . . 18 SECTION 13.1 TENANT'S DEFAULTS . . . . . . . . . . . . 16 SECTION 13.2 LANDLORD'S REMEDIES . . . . . . . . . . . 19 SECTION 13.3 INTEREST ON TENANT'S OBLIGATIONS; LATE PAYMENTS. . . . . . . . . . . . . . . . . 21 2671014b".0.000113247329.2 a03123,'99 SECTION 13.4 RIGHT OF LANDLORD TO PERFORM . . . . . . . 21 SECTION 13.5 DEFAULT BY LANDLORD . . . . . . . . . . . 22 SECTION 13.6 EXPENSES AND LEGAL FEES . . . . . . . . . 22 ARTICLE XIV. END OF TERM . . . . . . . . . . . . . . . . . . 22 SECTION 14.1 HOLDING OVER . . . . . . . . . . . . . . . 22 SECTION 14.2 SURRENDER OF PREMISES; REMOVAL OF PROPERTY . . . . . . . . . . . . . . . . . 22 SECTION 14.3 AFFIXED PROPERTY . . . . . . . . . . . . . 23 ARTICLEXV . NOTICES . . . . . . . . . . . . . . . . . . . . 23 ARTICLE XVI. RULES AND REGULATIONS . . . . . . . . . . . . . 23 ARTICLE XVII.BROKER'S COMMISSION . . . . . . . . . . . . . . 24 ARTICLE XVIII.TRANSFER OF LANDLORD'S INTEREST . . . . . . . . 24 ARTICLE XIX. INTERPRETATION . . . 24 SECTION 19.1 GENDER AND NUMBER 24 SECTION 19.2 HEADINGS . . . . . . . . . . . . . . 24 ARTICLE XX. EXECUTION AND RECORDING . . . . . . . . . . . . 24 SECTION 20.1 CORPORATE AUTHORITY . . . . . . . . . . . 24 SECTION 20.2 RECORDING . . . . . . . . . . . . . . . . .24 SECTION 20.3 AMENDMENTS . . . . . . . . . . . . . . . . 24 ARTICLE XXI. MISCELLANEOUS . . . . . . . . . . . . . . . . . 25 SECTION 21.1 NONDISCLOSURE OF LEASE TERMS . . . . . . . 25 SECTION 21.2 FURNISHING OF FINANCIAL STATEMENTS . . . . 25 SECTION 21.3 CHANGES REQUESTED BY LENDER . . . . . . . 25 SECTION 21.4 GOVERNMENTAL REQUIREMENTS . . . . . . 25 SECTION 21.5 COVENANTS AND CONDITIONS . . . . . . . . . 25 SECTION 21.6 WORK LETTER . . . . . . . . . . . . . . . 25 SECTION 21.7 JOINT AND SEVERAL LIABILITY . . . . . . . 26 SECTION 21.8 SUCCESSORS . . . . . . . . . . . . . . . . 26 SECTION 21.9 TIME OF ESSENCE . . . . . . . . . . . . . 26 SECTION 21.10 CONTROLLING LAW . . . . . . . . . . . . . 26 SECTION 21.11 SEVERABILITY . . . . . . . . . . . . 26 SECTION 21.12 RELATIONSHIP OF PARTIES . . . . . . . . . 26 SECTION 21.13 INABILITY TO PERFORM . . . . . . . . . . . 26 SECTION 22.24 QUIET ENJOYMENT . . . . . . . . . . . . . 26 SECTION 21.15 HAZARDOUS WASTE AND MATERIALS . . . . . . 27 SECTION 21.16 ENTIRE AGREEMENT . . . . . . . . . . . . . 27 26110143204)ooin247329.2 .o3M/" OFFICE SPAC'E 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: L. MICHAEL MAKASJIAN 2. Premises, including Floor, Suite No. and Rentable Area: Second Floor, Suite 2D, 1,670 rentable square feet. 3. Commencement Date: April 1, 1999. 4. Lease Term: One (1) year ending March 31, 2000.Vor suc:ri( gki"X"t ttltoktt r� emotW 5. Basic Annual Rent: Lease Term Basic -Annual Rent April 1, 1999 - $32,064.00 payable at $2,672.00 March 31, 2000 vt per month 6. Base Year Operating Expense: h1/A 7. Space Plan Approval Date: N/A S. Security Deposit: $2,672.00; payable on execution of Lease. 9. Prepaid Rent: $2,672.00; payable on April 1, 1999. 10. Broker(s): None 11. Address for Payments and Notices: To Landlord: Abdelmuti Development Company c/o Jack's Sur-f & Sport 101 Main Street Huntington Beach, CA 92648 Attn: Mike Abdelmuti Tel.: (714) 536-6567 To Tenant: L. Michael Makasjian 101 Main Street, Suite 2D Huntington Beach, CA 92648 Tel.: (714) 969-3100 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. Lease Execution: In witness whereof the parties hereto have executed this Lease, consisting of the foregoing provisions 267101492MMI/3247329.2 43W/99 r and of the Additional Lease Provisions and Exhibits which follow, as of March 26, 1999. THIS LEASE SHALL NOT BECOME EFFECTIVE UNTIL EXECUTED BY LANDLORD AND DELIVERED TO TENANT AND THE SUBMISSION OF THIS FORM OF LEASE BY LAND- LORD, OR LANDLORD'S AGENT, DOES NOT CONSTI- TUTE AN OFFER TO LEASE. NO EMPLOYEE OR AGENT OF LANDLORD OR ANY PERSON WITH 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 pneral rtnership By:. Ahmad H. 1 ti/ ge7,/ ner "Landlord" ICHAEL MAKASJIAN "Tenant" MEMORANDUM OF ACTUAL CON.MENCEMENT AND EXPIRATION DATES Commencement Date: Expiration Date: 2671014820-=113247329.2 43M/99 -2- i ADDITIONAL LEASE PROVISIONS ARTICLE I. 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-1" (the "Premises'). Except for purposes of determining the rentable area of the Premises, the Premises shall include approximately one-half (1/2) of the balcony space contiguous to the office suite and Tenant acknowledges that the remaining one-half (1/2) of the balcony shall be used by another tenant. Landlord agrees to place planters or other type of barrier separating the balcony space. 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 con- formity 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. 26710146240001/3247529.2 .o3 51" - 3 - ARTICLE II. 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 after 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 III. RENT XND 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 li of the Basic Lease Provisions, or to such other pe"rson or at such other place as Landlord may from time to time designate in writing. 267ro14620"113247529.2 .0=51" - 4 - (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. (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 B 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 per- form 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 (30) 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 2671014920.=113247529.2 a03M/99 - 5 - I requirements of all governmental 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 ten- ants or occupants of the Project or of 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. 167101481,0ao01n247529.2 43M.'s -6- 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 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 Landlord'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 2671014820-000113247329.2 &W/23199 - 7 - r regulations which Landlord may reasonably establish for the proper functioning and protection of the air conditioning, 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 rate charged for parking is subject to change and is 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 other governmental act or decree, Landlord may recover such fees as Operating Expenses.- The foregoing parking provisions are subject 267/014920-0001/3247529.2 &03=99 . 8 - 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 alter- ations 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 liability 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 tine 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 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, con- figuration, 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 267101431.0"11324'7529.2 a031" 9v - 9 - m, 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', mechanical 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 nay 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 maybe 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 Landlord'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 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 like 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 267/OZ4V-O-=113247529.4 a03tYS" -10 - (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. SECTION 6.7 Intentionally omitted. ARTICLE VII. 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 26710143.'O Dl/32s7s;s.z &03W/99 -11- 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 PROHIBITION 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 leasehold 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 Corporations of the State of California, is not deemed a public corporation, or is an unincorporated association or partnership, the transfer, assignment or hypothecation of any stock or interest in such corporation, association or partnership in the aggregate in excess of twenty-five percent (25%) 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; (ivy such financial information as Landlord may request concerning the proposed subtenant or assignee; and (v) such information as Landlord r.1ay request regarding the business experience concerning the proposed subtenant or assignee during the preceding five (5) years. 2671014920-=113247529.2 .03125199 - 1 2 - (c) At any time within thirty (30) working 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 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 S.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 ($750.00) in connection with the processing, documentation and other administrative costs thereof, along with 26710 8120- 15247529.Z &WrISM -13- Landlord's reasonable attorneys' fees incurred in connection therewith. 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 (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 -- Statutory (including broad form all states) (ii) Comprehensive General Liability Insurance, -- Not less than including Blanket amount stated Contractual Liability, in Item 12 of Broad Form Property Basic Lease Damage, Personal Provisions. Injury, Completed Operations, Products Liability, Fire Legal Liability (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. 26710t482.0-MI13247529.2 4=5/" -14 - (d) Landlord makes no representation that the limits of liability specified to be carried by Tenant under this Article IX, 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 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 carrier of any right of subrogation against Landlord. (g) The policy of insurance required to be maintained by Tenant pursuant to Section 9.1(a) (ii) shall include coverage of Tenant's indemnity in favor of Landlord as provided in Section 9.2 below. SECTION 9.2 TENANT'S INDMWITY. 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, invitees 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 (25t) of the full insurable value 267/014920-000113247529.2 43WI" - 1 5 - 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 corarence and proceed diligently with the work of repair, reconstruction and restoration and the Lease shall continue in full force and effect. If such work of repair, reconstruction and restoration is such as to require a period longer than ninety (90) days or exceeds twenty-five percent (25t) 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 (10t) of its replacement cost by a casualty not covered by a standard fire and extended coverage policy of fire insurance, Landlord may elect to terminate 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. 101014a240001f32 7529.2 03125M -16 - 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, appliances 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 other 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 that 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. 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 2671014820-000113247529.2 a07 5199 -17- 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 XIII. 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 California Code of Civil Procedure Section 11GI 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. 2671014620-000113247329.2 003W/" -18 - (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. (£) (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, 11 or 13 of the Bankruptcy Code, Title 11 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 substan- tially all of Tenant's assets located 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 exerdise the following remedies: (i) 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 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 maximur1 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 26710118204MI132e7329.2 a03125M - 1 9 - award plus one percent (1t) , but not in excess of ten percent (10%) 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 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 M 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. rio 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 267roi48240 WU7529.2 .aori M - 2 0 - 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 TENANT'S 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 (5t) of the delinquent installment of rent. The parties agree that such late charge represents a fair 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 late 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 8 of the Basic Lease Provisions by one -hundred percent (100t), 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' a 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 2671014120-0001132a7529.2 & 51" - 21- 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 Premises, 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 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, phctocopying, 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 (150t) of that payable at the date of expiration. SECTION 14.2 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 2671014320-OW113247329.2 s03►2 M - 2 2 - 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 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 pro- visions 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 mail, duly registered or certified, postage prepaid, return receipt requested, and addressed to the other party at the address set forth in Item 11 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 after 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 2671014920-OW15247329.2 oWnSM -23- 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 Regu- lations 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 brokerage commissions to said broker(s), 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 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. IRTERPRETATION 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 2671014620-MI/3247329.2 .mr25M - 24 - 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 leases 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 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 and/or guarantors 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 2970, 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 limited 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 3671014a:0-000113247529.2 $031251" - 2 5 - 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. 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 laws 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 terra 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 Require- ments; 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 2671014a.04=1 A75" s .mrsM - 2 6 - 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. 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. 2671014l20-MI13247329.2 a03R5199 - 2 7 - O-�1 i i. I t '� 1 'r ►�n IrT SECOND -FLOOR PLAN OCEANVIEW PROMENADE Sate 20 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, 2, 3, 4, 5, 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 SPACE LEASE 267/014120-000113247529.2 &03►23/99 EXHIBIT "A-3" CONFIRMATIO14 OF TERM The undersigned as the an lord and Tenant under that certain Office S ace Lase dated ��� ��k for space within the .�L1K ^ E Huntington Beach, California, hereby confirm that the term of said Lease has commenced i WWI , and that the expiration date of the term of said L ase is b4 ror Sir Sim "k -�,�., iedcc��C� ac,�-e Ve" California �tene�/rtnetgship a By: i"L ai'Kra li •a• iiti/M ialaY l.�i// general part er , "Tenant" EXHIBIT "A-3" TO OFFICE SPACE LEASE 2671014624000117247529.2 &03n5M EXHIBIT "B" THE WORK LETTER Tenant acknowledges and agrees that Landlord shall not be required to perform any work in the Premises and that Tenant accepts the Premises on the Commencement Date in its then existing "AS -IS" condition. E IT "g" TO OFFICE SPACE LEASE 2671014$20-0001131.47529.2 &03n M Page 1 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 preju- dicial 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 busi- ness 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 w-ritten 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 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, EXHIBIT "C" TO OFFICE SPACE LEASE 267101tE O-MInu7529.2 iO3M/" Page 1 t I 6h 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 same 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 manu- facturing 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 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 term "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, EXHIBIT "C"_ TO OFFICE SPACE LEASE 2671014E24000113U7529.2.a 51" Page 2 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 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. EXHIBIT_ =" TO OFFICE SPACE LEASE =6710i4s.04MI13247329.2 &Wras;W Page 3 (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 5:00 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. (231 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 2671014r.04=113247529.2 431"1" Page 4 5 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approval As To Form: Lease Between Abdelmuti Dev. Co. & L. Michael Makas'ian Oceanview Promenade L. COUNCIL MEETING DATE: I June 7, 1999 RCA ATTACHMENTS STATUS Ordinance w/exhibits & legislative draft if applicable) Not Applicable Resolution (w/exhibits & legislative draft if applicable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (w/exhibits if applicable) (Signed in full by the City Attome Not Applicable Subleases, Third Party Agreements, etc. (Approved as to font 4y City Attome Attached Certificates of Insurance (Approved by the City Attomej4 Not Applicable Financial Impact Statement Unbud et, over $5,000 Not Apelicable Bonds If applicable) Not Applicable Staff Re ort If applicable)__ Not Applicable Commission, Board or Committee Re ort if applicable) Not Applicable —Finding s/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator initial City Administrator Initial Ci Clerk EXPLANATION FOR RETURN OF ITEM: RCA Author. Kohler 0 5457