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HomeMy WebLinkAboutAbdelmuti Development Company/Visiontek, Inc. - 1995-07-17L1 Council/Agency Meeting Held:_ Deferred/Continued to: ,d Approved O Conditionally Approved ❑ Denied OiCity Clerk's Signat re Council Meeting Date: December 18, 1995 Department ID Number: ED 95-50 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIRMAN AND REDEVELOPMENT AGENCY MEMBERS SUBMITTED BY: MICHAEL T. UBERUAGA, Executive Dir PREPARED BY: DAVID C. BIGGS, Economic Development Director SUBJECT: APPROVAL OF SECOND LEASE BETWEEN ABDELMUTI DEVELOPMENT COMPANY AND VISIONTEK INC. (MAIN -PIER REDEVELOPMENT PROJECT AREA) Statement of Issue, Funding Source, Recorrenended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s) Statement of Issue: The Agency has previously approved in form a lease between Abdelmuti Development Company and Visiontek for its current suite. The attached lease will secure an additional 1230 square feet. Funding Source: Main -Pier Account #ED-TM-888-7-75-00. Recommended Action: Motion to: Approve the second lease between Abdelmuti Development Company and Visiontek Inc., as summarized in the Basic Lease Provisions (included in lease). This approval is as to the fact of the Lease only. Alternative Action(s): 1. Do not approve Lease between Abdelmuti Development Company and Visiontek Inc. Analysis: The terms of the Agency's Owner Participation Agreement (OPA) with Abdelmuti Development Company requires Agency approval in fact of each office space lease. The Visiontek Inc, existing lease is for 2,283 square feet and approval of the attached lease will increase its square footage by 1230 square feet to a total of 3513 square feet, and reduce the amount of the Agency's subsidy of the office space. Environmental Status: NIA ]E�--' 5 REQUEST�R REDEVELOPMENT AGEWY ACTION MEETING DATE: December 18, 1995 DEPARTMENT ID NUMBER: ED 95-50 Attachment(s): -City Clerk's Number 1. Lease including basic lease provisions and site plan. h1TU:DCB:SVK:dw RAA9550.00C -2- 11/22195 5:01 PM M at OFFICE SPACE LEASE (Suite 2g) between ABDELMUTI DEVELOPMENT COMPANY, a California general partnership AS LANDLORD and VISIONTEK INC an Illinois corporation AS TENANT OCEANVIEW PROMENADE HUNTINGTON BEACH, CALIFORNIA 3 FS \ 67 013810 uW 1 169910 1 a I 1 0 95 M 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 4 ARTICLE III RENT AND SECURITY DEPOSIT 5 SECTION 3 1 BASIC ANNUAL RENT 5 SECTION 3 2 SECURITY DEPOSIT 5 SECTION 3 3 6 ARTICLE IV USES 6 SECTION 4 1 USE 6 SECTION 4 2 PROHIBITION AGAINST SOLICITATION AND OTHER ACTIVITIES WITHOUT THE PERMISSION OF LANDLORD 7 SECTION 4 3 EXCLUSIVE CONTROL OVER COMMON AREA 7 SECTION 4 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 SECTION 5 4 PARKING 9 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 10 SECTION 6 4 TENANT S ALTERATIONS 10 SECTION 6 5 MECHANIC'S LIENS 11 SECTION 6 6 ENTRY AND INSPECTION 11 SECTION 6 7 SPACE PLANNING AND SUBSTITUTION 12 ARTICLE VII TAXES AND ASSESSMENTS ON TENANT'S PROPERTY 12 SECTION 7 1 TAXES ON TENANT'S PROPERTY 12 ARTICLE VIII ASSIGNMENT AND SUBLETTING 13 SECTION 8 1 PROHIBITION AND CONSENT 13 SECTION 8 2 NO RELEASE OF TENANT 14 SECTION 8 3 TRANSFER FEE 14 ARTICLE IX INSURANCE AND 1'VDEMNITY 14 SECTION 9 1 TENANT'S INSURANCE 14 SECTION 9 2 TENANT'S INDEMNITY 16 ARTICLE X DAMAGE OR DESTRUCTION 16 SECTION 10 1 RESTORATION 16 SFCI'ION 10 2 LANDLORD S NON LIABILITY 17 SECTION 10 3 1ENAN.,'S WAlVnk 18 ARTICLE XI EMINENT DOMAIN 18 ARTICLE XII SUBORDINATION, FSTOPPEL CERTIFICATE 19 SECTION 12 1 SUBORDINATION 19 SECTION 12 2 ESTOPPEL CERTIFICATE 19 ARTICLE XIII DEFAULTS AND REMEDIES 19 SECTION 13 1 TENANT'S DEFAULTS 19 SECTION 13 2 LANDLORD'S REMEDIES 20 SECTION 13 3 INTEREST ON TENANT'S OBLIGATIONS, LATE FS 1 67\014920 0001� 1699 0 1 al 0 45 11 M 4p PAYMENTS 22 SECTION 13 4 RIGHT OF LANDLORD TO PERFORM 22 SECTION 13 5 DEFAULT BY LANDLORD 22 SECTION 13 6 EXPENSES AND LEGAL FEES 23 ARTICLE XIV END OF TERM 23 SECTION 14 1 HOLDING OVER 23 SECTION 14 2 SURRENDER OF PREMISES, REMOVAL OF PROPERTY 23 SECTION 14 3 AFFIXED PROPERTY 24 ARTICLE XV NOTICES 24 ARTICLE XVI RULES AND REGULATIONS 24 ARTICLE XVII BROKER'S COMMISSION 24 ARTICLE XVIII TRANSFER OF LANDLORD'S INTEREST 25 ARTICLE XIX INTERPRETATION 25 SECTION 19 1 GENDER AND NUMBER 25 SECTION 19 2 HEADINGS 25 ARTICLE XX EXECUTION AND RECORDING 25 SECTION 20 1 CORPORATE AUTHORITY 25 SECTION 20 2 RECORDING 25 SECTION 20 3 AMENDMENTS 25 ARTICLE XXI MISCELLANEOUS 25 SECTION 21 1 NONDISCLOSURE OF LEASE TERMS 25 SECTION 21 2 FURNISHING OF FINANCIAL STATEMENTS 26 SECTION 21 3 CHANGES REQUESTED BY LENDER 26 SECTION 21 4 GOVERNMENTAL REQUIREMENTS 26 SECTION 21 5 COVENANTS AND CONDITIONS 26 SECTION 21 6 WORK LETTER 26 SECTION 21 7 JOINT AND SEVERAL LIABILITY 26 SECTION 21 8 SUCCESSORS 26 SECTION 21 9 TIME OF ESSENCE 27 SECTION 21 10 CONTROLLING LAW 27 SECTION 21 11 SEVERABILITY 27 SECTION 21 12 RELATIONSHIP OF PARTIES 27 SECTION 21 13 INABILITY TO PERFORM 27 SECTION 21 14 QUIET ENJOYMENT 27 SECTION 21 15 HAZARDOUS WASTE AND MATERIALS 27 SECTION 21 16 ENTIRE AGREEMENT 28 Y FS2\267\014920 0001\2169920 1 at1102195 I - OFFICE SPACE LEASE BASIC LEASE PROVISIONS The foregoing Basic Lease Provisions are presented here and represent the agreement of the parties hereto, subDect 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 VISIONTEK INC , an Illinois corporation 2 Premises, including Floor, Suite No and Rentable Area Second Floor, Suite 2G, approximately 1230 rentable square feet 3 Estimated Commencement Date November 10, 1995 4 Lease Term Two (2) years 5 Basic Annual Rent $19,926 00 payable at $1,660 50 per month 6 Base Year Operating Expense N/A 7 Space Plan Approval Date N/A 8 Security Deposit $1,660 50, payable upon execution of Lease 9 Prepaid Rent $1,660 50, payable on execution of Lease 10 Broker(s) Lee & Associates 11 Address for Payme^ts and Notices To Landlord Abdelmuti Development Company c/o Jack's Surf & Sport 101 Main Street Huntington Beach, CA 92648 Attn Mike Abdelmuti Tel (714) 536-6567 To Tenant Visiontek Inc 1175 Lakeside Drive Gurnee, IL 60031 Attn Facilities Manager Tel (800) 726 9695 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 r FS2\267\014820-0001\21699"0 1/11102/95 7 and of the Additional Lease Provisions and Exhibits which follow, as of kf\1% L , 1995 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 OMPANY, a California gene a J art ship i ) / �/ 11_ By �' / '/fAhihd H e gen ral part er "Landlord" VISIONTEK INC an Illinois corporation By Its r "Tenant" MEMORANDUM OF ACTUAL COMMENCEMENT AND EXPIRATION DATES Commencement Date Expiration Date APPROVED ASICY FORMa CAIL hUTTON, City Attorney Deputj City Attorney y FS2\267\013810 0001\21699'70 1 111/01 95 2 ADDITIONAL LEASE PROVISIONS ARTICLE I PREMISES SECTION 1 1 LEASED PREMISES Landlord hereby leases to Tenant and Tenant hereby hires from Landlord, subDect 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") 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 "Pro]ect" 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 Pro]ect, 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 Pro3ect were at such time in satisfactory condition and in con fortuity 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 its standard build out or under 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 V� 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 througn, 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 Pro]ect, and Landlord reserves the right to change the name and/or address of the Building and/or the Pro3ect at any time Tenant shall not use the ^a^1e of t'-c B11+l;ll.lg, the FjopCct or Suer aeveiopmert 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 FSI\)67\0148 0.0001\1169910 1 d1 0' 95 3 4 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 estimated commencement date as shown in Item 3 of the Basic Lease Provisions, or such later date as the Premises shall be tendered to Tenant ready for occupancy or upon such earlier date as Tenant takes possession or commences use of the Premises for any purpose other than construction (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-311, stating the Commencement Date and the expiration date of the term of this Lease The term "ready for occupancy" shall mean when Landlord (a) has put in operation all Building services essential for the use of the Premises by Tenant, (b) has provided reasonable access to the Premises for Tenant its agents, employees, licensees and invitees so that the same may be used without unnecessary interference, and (c) subject to the provisions of the Work Letter, if any, has "substantially completed" (as defined in the Work Letter) the work required to be done by Landlord within the Premises pursuant to the Work Letter 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 by liable to Tenant for any loss or damage resulting therefrom, provided, however, that if Landlord cannot deliver possession of the Premises to Tenant on or before the date which is four (4) months after the estimated commencement date, subject to events of force majeure as described in Section 21 13 below, Tenant shall have the right to terminate this Lease upon ten (10) days' written notice to Landlord SECTION 2 3 OPTION TO EXTEND TERM Tenant shall have one (1) option to extend the term of this Lease for a period of three (3) years ("Extension Term"), provided that at the time of such election and at the expiration of such existing term Tenant is not then in default under any of the terms or provisions of this Lease y Tenant shall exercise the option by giving written notice of Tenant's intent to exercise the option to Landlord at least one hundred eighty (180) days prior to the expiration of the existing term hereof During the Extension Term, the basic annual rent shall be equal to ninety-five percent (95s) of the then fair market rental value of the Premises If Landlord and Tenant cannot agree upon the fair market rental value of the Premises within sixty (60) days after Landlord's receipt of Tenant's notice exercising the option contained herein Landlord and Tenant shall each appoint a "Qualified Arbitrator" (as defined below) within seven (7) days after the expiration of the aforementioned sixty (60) day period Such arbitrator shall confer and select a third Qualified Arbitrator (the "Neutral Arbitrator"), who alone shall determine the fair market rental value of the Premises Should the two (2) arbitrators fail to select a third Qualified Arbitrator to act as the Neutral Arbitrator within seven (7) days, the Neutral Arbitrator shall be designated pursuant to California Code of Civil Procedure Section 1281 6, as that section may be amended or redesignated from time to time, provided, however, that the Neutral Arbitrator so appcl^ted --sz .'^,c a "Qual.Lfled Aioicrator ' Tne determination of the Neutral Arbitrator shall be binding upon Landlord and Tenant Landlord and Tenant shall bear the cost of the arbitrator appointed by such party and shall equally bear the cost of the Neutral Arbitrator As used herein, the term "Qualified Arbitrator" shall mean a person who is a real estate broker with not less than five (5) years' experience in commercial office leasing in the Huntington Beach area Notwithstanding anything in this section to the contrary, the basic annual rental FS'7\167\0148'70 000101699"0 1 i11r0 /95 4 V for the Extension Term shall not be reduced below the basic annual rental in effect irrxnediately preceding the arbitrator's decision. ARTICLE III. RENT ANC 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 cf 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 11 of the Basic Lease Provisions, or to such other person or at such other place as Landlord may from time to time design4te in writing. (b) As used herein "Lease Year" shall be a period of twelve (12) consecutive months commencing on the first full calendar month during the lease term; provided that the - first Lease Year shall also include any partial calendar month following the Commencement Date. (c) In the event that at any time during the term of this Lease, any governmental law, rule or regulation prohibits or postpones in whole or in part any increase in the rent or in the payment of other sums payable by Tenant hereunder to be made pursuant to this Lease, then, and in either of such events, such increase or payment shall be made to the maximum extent permissible by law at the time provided in this Lease, and/or at any time or times thereafter such increase or payment, or any portion thereof, may lawfully be made and any such increase in rent, or any portion thereof, or other sums payable hereunder, or portions thereof, the payment of which has been so prohibited or postponed, shall thereafter become due and payable to the maximum extent and at the earliest time or times permitted by law. SECTION 3.2 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum stated in Item 8 of the Basic Lease Provisions, to be held by Landlord as security for the full and faithful performance of every Lease provision to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, but not limited to, the provisions relating to the payment of rent, Landlord may (but shall not be required to) use, apply or retain all or any part of this security deposit for the payment of any ren_ or other sum ir. 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 othcr 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 FS2%26n0143z0-0001\216"1.0.1 3111Mr95 .5- 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. Each time the basic annual rent is increased under Sections 3.1(c) and/or 3.1(d) above, Tenant shall deposit additional funds with Landlord sufficient to increase the security deposit to an amount which bears the same relationship tc the adjusted basic annual rent as the initial security deposit bore to the initial basic annual rent. SECTION 3.3 MENTAL TAX. Should the United States of America, the State of California or any political subdivision thereof, or any governmental authority having jurisdiction impose a capital levy or a tax, assessment and/or surcharge of any kind or nature upon, against, in connection with, measured by, or with respect to the rentals or other charges payable to Landlord by Tenant or other tenants in or occupants of the Building and/o} the Project or on the income of Landlord derived from the Building and/or the Project or on Building and/or Project revenues, on Landlord's ownership of the Building and/or the Project, or any portion thereof or interest therein, or otherwise, other than on the value of - real and personal property comprising the Building and/or the Project, but expressly excluding any general net income, franchise, or inheritance tax levied upon or payable by Landlord, then, in such case, 'such tax, assessment and/or surcharge shall be paid to Landlord by Tenant. ARTICLE IV. USES SECTION 4.1 tom. Tenant shall use and occupy the Premises for general office purposes -only and for no other use or purpose without the prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. Tenant shall not use or occupy the Premises in violation or in conflict with any "Governmental Requirement" (defined below) but shall, at Tenant's expense, promptly comply with all present and future laws, ordinances, statutes, including without limitation the Americans with Disabilities Act, orders, rules, restrictions, regulations and requirements of all 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, "Goverrumental 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, cr use or allow the Premises to be used for any improper, im^ioral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance or cormit 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 duiy ca0ier 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 wts 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 ccmply 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 F5:�2671014$200.0001l21699:0.1 a11102:97 - 6 — 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 porticn 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 Landlcrd 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 :EXCLUEIVE ONTROL OVER COMVON 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 with: -.old in its sole and absolute .discretion. SECTION 4.4 SICNS. Tenant may not affix a sign to the exterior surface of the suite frcnt 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 talcony 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 Lase 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 Y- Fs..�eroiossaaooi,ztb�:o.ti ,111011 s • - 7 = 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 cther arrangements for voluntary cut -back, load shedding and the like. No failure to furnish any of such service or utilities shall entitle Tenant to any damages, relieve Tenant of the obligation to pay the full rent reserved herein or constitute or be construed as a constructive or other eviction of Tenant. Tenant shall comply with all rules and regulations which Landlord may reasonably establish for the proper functioning and protection of the air conditioning, 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 CODC40N FACILITIES. Landlord shall operate and maintain during the term of this Lease all cornion facilities within the Euilding 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 Con -ion 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 within t is 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 COMMQN FACILITIES. The use and occupancy by Tenant of the Premises shall include the use of the Common Facilities in cor.inon 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 FS:i:6T,Q1�8:6 JQQ11�1699:Q.1 sI UM'R5 - 8 - 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 Com.^mon Facilities by reason of the presence of Tenant in the Building, Tenant, upon demnd 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 and/or the temporary & parking area provided by the City of Huntington Beach located near the Project. Landlord agrees to use all reasonable efforts to have the City of Huntington Beach provide parking validation for Tenant's employees and invitees at the parking structure, but Tenant acknowledges that the availability of parking and such validation rate is subject to change and 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 :o 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 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_ AMINTENANCE--_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 LA"-QLORD' S MAINTEIJA.VCE_, AQ- 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 FS21]67�0148:0.0001\7.16".0.1 &I F0.m5 - 9 - 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 cond•act of Tenant's business in the Premises. SECTION 6.3 ALTERATIONS BY -LANDLORD. (a) Landlord reserves the righ:� .at any time, and from time to time, to make changes in or to the Building and the fixtures and equipment thereof, to make alterations or additions to any building within the Project, to construct other buildings (including free standing 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 against Landlord; provided, however, such changes or alterations shall not deprive Tenant of reasor.gLble 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_�ALJERA^IONS. 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 thdL all Mork be covered by a surety bond in favor of Landlord, guaranteeing the completion of such work free and clear of all subcontractors', mechanics' and rraterialmen's liens (which bond shall be satisfactory to Landlord) and requirements as to the manner, time and contractor or contractors -- as to or by which such work shall be done. Notwithstanding the foregoing, no improvements may be made that would diminish the value of the Premises and, in addition, no improvements may be trade to any mechanical or utility system, the exterior walls or the roof of the Premises, nor ray any improvements of a structural nature be made without Landlord's approval, which approval may be withheld in Landlord's sole and absolute discretion. In no event shall Tenant Fs2`.267,014810-0001%21694:0.1 &11/0:res - 1 0 - 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 glade 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 (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 com::enc:rg 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 trom such liens. .�_.... SECTION 6.6 - ENTRY AND --INSPECTION:---Landlord shall at all times have the right to enter the Premises (upon at least twenty- four (24] hours' prior notice except in the event of any emergency when notice is not required) 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 ray for that purpose erect scaffolding and other necessary structures and store materials, FS:1:67.0148:0-OWI%:1604:0 1 a11r02AS - 11 - 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, upon at least twenty-four (24) hours' prior notice, enter the Premises for the purpose of displaying the Premises to prospective tenants. SECTION 6.7 SPACE PLANNING AND SUBSTITUTION. Landlord shall have the right, upon providing Tenant thirty (30) days' written notice, to move Tenant to other comparable space in the Building so long as such Space faces, and has a balcony facing Pacific Coast Highway. Such new space shall be approximately the same size as the Premises, and be provided with comparable improvements (upgrading only to the level of Tenant's prior space). Landlord shall pay the expenses reasonably incurred by Tenant in connection with such substitution of Premises, including but not limited to, costs of moving, door lettering, telephone relocation and reasonable quantities of new stationery. In the event of such relocation, this Lease shall remain in full force and effect and be deemed applicable to -the new space except that Exhibit "A-1" and Item 2 of the Basic Lease Provisions shall be amended to include and state all correct data as to the new space. 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 levied against Landlord or Landlord's property and if Landlord pays the same (which Landlord shall have the right to ao regarasess 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 Fs:'=07:0148:0-0001Q1eQa:0.1 3iifo:�4s -12 - 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 PROHIBITI0N,MIDCMENT. (a) Tenant shall not, either voluntarily or involuntarily, by operation of law or otherwise, assign, sublet, sell, encumber, pledge or otherwise transfer all cr 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 sublettirgs of the Premises shall not opei:ate 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 ccrporation, 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; ( iv) such financial inf ormation as Landlord may request concerning the proposed subtenant or assignee; and (v) such information as Landlord may reasonably request regarding the business experience concerning the proposed subtenant or assignee during -the preceding five (5) years. (c) At any time within thirty (30) working days after Landlord's receipt of the information specified in subparagraph (b) above, Landlord fray, by written notice to Tenant, elect to (i) consent to the subletting or assig:.xent upon the terns and to the subtenant or assignee_ proposed, subject to any_conditicrs 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 Fs:x".o7, 143I0.0001+I1699_Q.I a1110I195 - 13 - �10, Tenant's leasehold estate hereunder or such part thereof as shall be specified in said notice upon :he 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 effec:ive 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. Landlord may exercise is rights under clauses (i) through (iv) above in its reasonable discretion. If Landlord consents to such assigrznent 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 8.3 J&A.NSFER 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. ARTICLE IX. INS;.iRANCE AND INDEWITY SECTION _9 1 __ 1ENANT' S I aUJ�x;�. (a) Tenant hereby agrees to maintain in full force and effect at all times during the terra of this Lease, at its own expense, for the protection of Tenant, Landlord and such other parties as Landlord ray 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 FS:',:67;014S:3-0001',:1099:4.1 all.M..95 . 14 - U 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, including Blanket Contractual Liability, Broad Fora. Property Damage, Personal Injury, Completed Operations, Products Liability, Fire Legal Liability (iii) So-called "All -Risk limitation Fire and and Malicious Misch: Insurance, in an amo full cost of replacer betterments to the Pre Tenant (except to the at Landlord's expense, and all of Tenant's property. -- Not less than amount stated in Item 12 of Basic Lease Provisions. nsurance" including without :xtended Coverage, vandalism ef, and Sprinkler Leakage int sufficient to cover the eat of all improvements and ^rises made by or on behalf of axtent installed by Landlord, pursuant to the Work Letter) fixtures and other personal (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 firs required to be carried by Tenant, and thereafter at least twenty (20) days prior to expiration of such policy, certificates of insurance evidencing the above coverage with limits not less than those specified above. Such certificates, with the exception of Worker's Compensation, shall name Landlord and such other parties as Landlord may designate as additional insureds and shall expressly provide that the interest of same therein shall not be affected by any breach by Tenant of any policy provision for which such certificates evidence coverage. Further, all certificates shall expressly provide that 1) no less than thirty (30) days prior written notice shall be given Landlord and such other named insureds in the event of material alteration to or cancellation of the coverages evidenced by such certificates and 2) such coverage evidenced by the certificate is primary and that any coverage carried by Landlord and such other named insureds shall be excess and non-contributory with respect to any policies carried by Tenant. (c) Upon demand, Tenant shall provide Landlord, at Tenant's expense, with such increased amount of existing insurance, and such other insurance in such limits, as Landlord may require and such other hazard insurance as the nature and condition of the Premises may require in the sole judgment of Landlord, to afford Landlord and additional insureds designated by Landlord adequate protection for said risks. (d) Landlord makes no representation that the limits of liability specified to be carried by Tenant under this Article IX, are adequate to protect Tenant against Tenant's undertaking under this Lease, and in the event Tenant believes that any sucn 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 frog, or to the other party of every kind and nature which clay 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 F52*:67'014S20.0001 216"20.1 atUO2.15 - 15 - 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 INDS:�NITY. 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 cerduct 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 grade. y Landlord may, at its option, require Tenant to assume Landlord's defense in any action covered by this Section 9.2 through counsel selected by Tenant and reasonably approved by Landlord. ARTICLE X . DAMAGE OR DESTRUCTION SECTION 10.1 R ESTORA:CICN. (a) In the event the Building is damaged by fire or other perils covered by extended coverage insurance to an extent not exceeding twenty-five percent (25%) of the full insurable value thereof and if the damage thereto is such that the Building may be repaired, reconstructed or restored within a period of ninety (90) days from the date of the happeninc of such casualty and Landlord will receive insurance proceeds sufficient to cover the cost of such repairs, Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration and the Lease shall continue in full force and effect. If such work of repair, reconstruction and restoration is such as to require a period Longer that. ninety (90) days or exceeds twenty-five percent (25%) of the full insurable value thereof or if said insurance proceeds will not be sufficient to cover the cost of such repairs, Landlord may either elect to so repair, reconstruct or restore and this Lease shall continue in full force and effect, or Landlord may elect not to repair, reconstruct or restore and the Lease shall in such event terminate. Under any of said conditions, Landlord shall give written notice to Tenant of its intention within sixty (60) days of the occurrence of such damage. In the event Landlord F52:24T.0141:0-0001N216"20.1 mWO..95 -16 - M elects not to restore the Building, this Lease shall terminate on the date thirty (30) days following the date Tenant receives Landlord's written notice indicating Landlord's election to terminate. (b) In the event the Premises or the Building is damaged or destroyed to the extent of more than ten percent (10*) of its replacement cost by a casualty not covered by a standard fire and extended coverage policy of fire insurance, Landlord may elect to 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 W 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 twelve (12) months of the term of this Lease or any extension thereof. If Landlord shall elect not to repair, reconstruct or restore the Premises, the Lease shall in such event terminate. (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 per=ormed 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. SECTION 10.2 LANDLORD :S,-.NON-LEI-LITY. Landlord shall not be l:.able to Tenant, and Tenant hereby waives all claims against Landlord for any injury or damage to any person or property in or about ttc Premises, the Buildira or the Project from any cause whatsoever, except to the extent caused by the gross negligence or wlfu_ mr iscond-ic t 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 .0. Fs2'-257',014320-0O01,:144410 1 aI1'02 14 - 1 7 - w .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 wilding, or from other :;our:es. Neither Landlord nor its agents shall be liable for interference with the light or other incorporeal hereditaments, nor shalt, Landlord be liable for damages from any latent defect in the 2rem4ses, 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 e uip:ient. 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 TENANWAIV5R. 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 riah:s 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 XZ. 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 anal/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 the -rein or under this Lease shall terminate this Lease or give Tenant any right to any abatement of rent hereunder. Any award made by reason of any such temporary taking shall belong entirely to Landlord and shall be applied by Landlord against the rent and the other obligations of Tenant hereunder when such rent and other bIlgatiuns first accrue. . Except as provided above, any award or damages payable in connection with a taking of the Suildin= 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. Y FS?'267OItS:40001,21o99.'D.I at1.0::Qs - 1 6 - 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 r.ade 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 E$TQEPEL CERTIFICAF. Tenant shall, at any time and from time to time, within ter. (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 XND REMEDIES SECTION 13.1 TENA.?1T' S DE -FAULTS. 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 rade 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 nctice required under California Code of Civil Procedure Section 1161 et sea. For purposes of these default and remedies provisions, the term "additional rent" shall be deemed to include all amcunts of any type whatsoever other than basic annual rent to be paid by Tenant pursuant to the terms of this Lease. (c) Use of the Premises for any purpose other than as authorized in this Lease. (d) Assignment or sublease of this Lease or of any interest therein by Tenant,. either voluntarily or by operation of law (including transfer by testacy or intestacy) , whether by judgment, execution, or other means, without the prior written consent of Landlord. (e) The failure or inability by Tenant as may be determined by Landlord to observe or perfor^: any of the express or implied covenants or provisions of this Lease to be observed or performed by Tenant, otter than those specified in (a) through (d) above, where such failure shall continue for a period of fifteen (15) days after written notice therecf from Landlord to Tenant; provided, however, that any such notice stall be in lieu of, and not in addition to, any notice required under California Code of Civil Procedure Section. 1.161 gt seq. V F3:•:97•0148:0.0001-:I64a:0 I &I1AM,03 1 } - (f) (i) The making by Tenant of any general assignment for the benefit of creditors; (ii) a case is commenced by or against 'Ierant 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 co::L•nenced 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 ME I . (a) In the event of any default by Tenant, then, in addition to any other remedies available to Landlord at law or in equity, Landlord may exercise the following remedies: (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 relettirg, including brokerage co=issions, necessary repair, renovation and alteration of the Premises, reasonable attorneys' fees, expert witness costs, and any other reasonable costs; and Any other amount which Landlord may by law hereafter be permitted to recover from Tenant to compensate Landlord for the detriment caused by Tenant's default. As used in subparagraphs (i) and (ii) above, the "worth at the time of award" shall be computed. by allowing 'interest at the maximum rate permitted by law. As used in subparagraph (iii) above, the "worth at the time of award" shall be co.-+uteu by discount incj such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent UU , but rot in excess of -ten percent (10%) - pe4 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 pcssession even though Tenant has breached this Lease and abardo.^.ed 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 Fs:':5T0149:a•0c01':169Q:0 I at i-0: us - 2 0 - kwl 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 t.hi:r Lease. Such covenants of indemnification shall survive the termination of this Lease. (iv) In the evert 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 in accordance with applicable law, .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 perfor::ed 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 (i) a waiver of any preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to pay the particular rent or any additional rent accepted, regardless of Landlord's knowledge of such preceding breach or default at the tire of acceptance of such rent or additional rent, or (ii) a waiver of Landlord's right to exercise any remedy available to Landlord by virtue of such breach or default. No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein stipulated shall be deemed to be other than Cn 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 f=cm forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or u«uer any otr. present or future law, in the event Tenant is evicted or Landlord takes possession of the Premises by reason of any default by Tenant hereunder. No act or thing done by _Landlord or Landlord' "s -agents during the term of this Lease shall be deemed an acceptance cf a surrender of the Premises, and no agreement to accept a surrender shall be valid unless in writing and signed by Landlord. ND e,- loyee 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. F$?%26`014820-0001%21699.0.1 siI.M°95 . 2 1 - U SECTION 13 .3 INTERES T M.—1 EaLL9BLIGATIOI!S; LATE PAYMENTS. (a) Any installment of rent due under this Lease or any other suit not paid to Landlord when due (other than interest) shall bear interest at the naximum 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 Landlcrd 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 M ) 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 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. SECTION 13.4 RIGHT OF LA-';DL_QRD TO PERFORM. All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any abatement of rent. If Tenant shall fail to pay any sum of money, other than rent, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder, or to provide any insurance or evidence of insurance to be provided by Tenant, and such failure shall continue beyond any applicable grace period set forth in Section 13.1, then in addition to any other remedies provided herein, Landlord may, but shall not be obligated so to do, and without waiving or releasing Tenant from any obligations of Tenant, make any such payment or perform any such act on Tenant's part to be made or performed as provided in this Lease or to provide such insurance. Any payment or performance of any act or the provision of any such insurance by Landlord on Tenant's behalf shall not give rise to any responsibility of Landlord to continue raking the same or similar payments or performing the same or similar acts. All costs, expenses and other sums incurred or paid by Landlord in connection therewith, together with'interest at the maximum rate permitted by law from the date incurred or paid by Landlord shall be deemed to be additional rent hereunder and shall be paid by Tenant with and at the same time as the next Monthly installment of basic annual rent hereunder, and ar.y default therein shall constitute a breach of the covenants and conditions of this Lease. SECTION 13.5 DEFAULT, BY LA'+1.?L,ORD. 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 FS2ti5T014MOOOM1694:0.1 s11:02195 - 2 2 - it commences such performance wit-hin such thirty (30) day period and thereafter diliaently prosecutes the same to completion. If, after notice to Landlord of default, Landlord fails to cure such default as provided herein, they. 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 Nixed prcperty 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 13.5 EXPENSES A-IM LEQALIf Tenant or Landlord shall bring any action for any relief against the other, declaratory or otherwise, arising out of or under this Lease, including any suit by Landlord for the recovery of rent or possession of the Premises, the prevailing party shall be entitled to recover its attorney's fees and costs, including without limitation., expert witness fees, photocopying, facsimile and delivery costs, in 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 j udg:n.ert . ARTICLE XIV. END OF TERM SECTION 14.1 HOLDIM OVER. This Lease shall terminate and beccr.e 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 cc:rxrencing on the first (1st) day following the expiration of this Lease and subject to all of the terns and conditions herein contained, except that the basic annual rent, and monthly installments thereof, shall be one hundred fifty percent (150$) of that payable at the date of expiration. SECTION 14.2 SURRENDER OF FfiEMISES:REMQVALQFF PROPERTY Upon the expiration of the term of this Lease, or upon any earlier termination of this Lease, Tena::t shall quit and surrender possession of the Premises to Lard_'ord 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 andr: t.�;sr_a.:.cl es.ef �ary..other persons If under Tenant unless Landlord exercises its option to have any subleases or subten.ancies 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 cc, —ply with the provisions of this Se--tion 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 FST.2e7`014320-0001121e9920.1 al l:O: 9! - 2 3 - 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 Preises by reason of this Lease o: otherwise. . SECTION 14.3 F P ERTY, All fixtures, equipment, alterations, additions, improvements and/or appurtenances attached to or built into the rremises prior to or during the term, hereof, whether by Landlord at its expense or at the expense of Tenant or both, shall be and retrain 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, improvemlents and/or appurtenances shall include, without limitation, floor coverings, drapes, paneling, holding, built - in cabinets, doors, vaults, (exclusive of vault doors), plu..mbing, electrical co::.-iunications 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, derrand, 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 it of the Basic Lease Provisions hereof, or if to Tenant, at such address or, from and after the Co mencement Date, at the Premises (whether or not Tenant has departed from, abandcred 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 Trail 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 o4 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 incorperated herein and made'a part hereof. Tenant agrees to observe faithfully and comply strictly with such Rules and Regulations, and any reasonable amendments, modi€ications 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 runner 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 Regulaticr.s or the breach of any covenant or condition in any lease by any other tenant. One or more waivers by Landlord of any breach of such Rules and Regulations by Tenant or by any other tenant(s) shall not be a waiver of any subsequent breach of that rule or any otter. In the case of any conflict between such Rules and Regu- lations and this Lease, this Lease shall control. AIR ICLE-KVII,_ _AROKER'_S CO"MVISSION.- The parties recognize as the brcker(s) who procured this Lease the firn(s), if any, stated in Item 10 of the Basic Lease Provisions, and agree Lhat Landlord shall be solely responsible for the payment of a Crckerage co^- issicn of Two Thousand Three Hundred Nicety -One Dollars to said broker, payable upon the Co:^: ;erce-ent Date, a. d that Tenant shall have no responsibility F5::67 01 i l:40001 %13699:0.I 2 i is a: ws 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 liab_lity (including reasonable attorneys' fees in connection therewith) for any cc—Loensation, co=issions 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 agreer-ent shall survive the termination of this Lease. ARTICLE XVIII. TRANSFER OF LANDLORD'S INTEREST In the event of any transfer or transfers of Landlord's interest in the Premises, including a so-called sale -leaseback, the transferor shall be automatically relieved of any and all obligations on the part of Landlord accruing under this Lease from and after the date of such transfer. It is intended hereby that the covenants and obligations contained in this Lease on the part of Landlord shall, subject to the foregoing, be binding on Landlord, its successors and assigns, only during and in respect of their respective periods of ownership. ARTICLE XIX. INTERPRETATION SECTION 19.1 GENDER AND =, —Er,. 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 HEADD IEra 5 . The captions, headings, titles, nuT.bering 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 o,• 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 y 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 terris. 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 rezording purposes. SECTION 20.3 ',1EQMENJS1. No amendment, addition, revocation or ratification of this Lease shall be effective unless in writing signed by the parties hereto. No actions, policies, oral or inforr:•,al arrangements, business dealings or other course of conduct. - by or between the parties shall be deemed Lu ar:lend this Lease or revise this Lease in any respect. ARTICLE XXI. MISCELLANEOUS SECTION 21.1 NQn15QLQaURE OF LEASE TEPUMS. Tenant ackncwiedges and agrees that the ter-mis of this Lease are confidential ar:d _onstitute preprictary information of Landlord. Disclosure of the to r­.s hereof cou=d adversely affect the ability of Landlord to negot+a;.e other leases with respect to the Project. Tenant agrees that it, and its partners, officers, directors, FS:1:67T014e:0.000V2164Q!0.1 &I I:V::')3 - 2 S - 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 state—ents. 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 FURJ!ISHINGOF_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. Upon request from Landlord in the evert of a proposed sale -of the Building, Tenant shall promptly furnish Landlord with an annual financial statement reflecting the then current financial condition of Tenant. SECTION 21.3 CHXNGEE REOUESTE2 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 REDUIRE.14-ENTS. Tenant covenants at all times during the term of this Lease to comply with the requirements of the Occupational Safety and Health Act of 1970, 29 U.S.C., Section 651 et seq., and any analogous legislaticn 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, Y. appliances, structures, electrical facilities and the like upon the Premises in a condition that full complies with the requirements of the Act, including such require. -eats as would be applicable with respect to agents, employees or contractors of Landlord who may from time to time be present upon Mhe Premises. SECTION 21.5 g:OVENANTS ANO CONDITIONS. All of the provisions of this Lease shall be construed to be "conditions" as well as "covenants" as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. SECTION 21.6 WORK LETTER. Landlord and Tenant each agree to fully perform their.obligations under the Work Letter, if any. Any default by either party in the performance of its obligations under the Work Letter shall constitute a default by such party under this Lease. SECTION 21.7 JQINT A_N"O EVFRA:� LIABILITY. If there be more than one Tenant, the obligations_ hereunder imposed upon Tenant shall be joint`and- several —and -the a_ct 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 .-!-.is 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 ES$OU. Subject to Articles VIII and XVIII above, all rights and liabilities herein given to, or imposed upon, FS:'?y7 013E?0-00011:16".10 1 .c l:m:ys - 2 6 - 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 s::all be construed, to confer upon or grant to any person other _han Landlord and Tenant any rights or remedies under this Lease. SECTION 21.9 TIME OF E GEN E. 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 COX ROLLING,LAt^{. This Lease shall be governed by and interpreted in accordance with the laws of the State of California. SECTION 21.11 SEVERASILITY. If any term or provision _of this Lease shall be held invalid or unenforceable to any extent, the remainder of this Lease shall not be affected thereby and each term and provision of this Lease shall be valid and enforceable to.the fullest extent permitted by law. SECTION 21.12 RELATIONSHIPE . 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 covers —mental agency or otherwise, in any plan or program involving allocations, priorities, limitations or restraints regarding water, fuel or otter 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 cr 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 cf any work or the doing of such act shall be extended for a period equivalent tc 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. EVJ'Q] =-%- . Upon pa mnent 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 :his Lease on Tenant's part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the Premises for t^e 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 ZP-RDOUS „WASTE bM— ATERIALS. Tenant shall not engage in any activity on or about the Premises or the Project that violates any Environ--ental Law, and shall promptly, at Tenant's sole cost and expensi, 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 F5:`:9;0»�:©•OCOI•;Ib94?01 +ILOC'.95 -27. pertaining to health, industrial hygiene or the environmental conditions cn, under or about the Premises, including, without limitation, (i) the Comprehensive Environmental Response, Ccmpensation and Liability Act of 1980 ("CERCLA"), 42 U.S.C. Sections 9601,E stq.; (ii) the Rescurce Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 a 2g.; (iii) California Health and Safety Code Sections 25100 = sea.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25219.5 gs ug.; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 g S=.; (vi) California Water Code Section. .& � ,eq.; and (vii) California Civil Code Section 3479 gt fig., 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 = sea. 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 "Envirormental Compliance". SECTION 21.16 ENTIRE AGREE ENJ. This Lease and the Exhibits and other attachments hereto cover %.i 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 anal/or practices of whatsoever kind with respect to the Premises or the Building or Project, except those ccrtained 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 y thereon. No verbal agreement or implied covenant shall be held to vary the provisions hereof, any statute, law, or custom to the contrary notwithstanding. 44, Fs: 20 a��szo 000t.zio4a:o.t vt 1;a,;s - 2 8 - TENANT IMPROVEMINY FOR VIS1ONTEK Suite G2 I I I I I I I I bbdbbbbb� � N SECOhD.PLOOR PLAN OCEANVIEW PROMENADE a ,OE 0 F EXHIBIT "A-2" lggal j2gscript ion. 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" Fs?-267%01482a0001•-316992o.t 311.V.45 ' TO OFFICE SPACE LEASE EXHIBIT "A-3" CONFIRMATION OF TERM The undersigned as the 'landlord and Tenant under that certain Office Space Lease dated for space within the Huntington Beach, California, hereby confirm that the term of said Lease has commenced , and tnat the expiration date of the term of said Lease is ABDELMUTI DEVELOPMENT COMPANY, a California general partnership By Ahmad H Abdelmuti, general partner "Landlord" VISIONTEK INC , an Illinois corporation By. Its "Tenant" .P, EXHIBIT "A-3" FS2:6710118:0W0112109201 ill 01a) TO OFFICE SP4C7- LEASE EXHIBIT "B" THE WORK LETTER In addition to the mutual covenants contained in the Lease to which this Work Letter is attacred, Landlord and Tenant further mutually agree as follows Landlord is delivering the Dremises to Tenant in its "AS -IS" condition and Landlord shall have no turther obligation to contruct any improvements or make any a!teratiols on behalf of the Tenant within the Premises Prior to Tenant contructing any improvements or performing any work in the Premises, Tenant shall submit plans and specifications for Landlord's prior written approval, such approval not to be unreasonably withheld Landlord acknowledges that Tenant will install cable lines from the Premises to Tenant's existing premises in the Building Tenant's cable requirements shall be included within the plans ana specifications for Landlord's review and approval Y' EICHIBIT "B" TO OFFICE SPACE LEASE FS'7\ 671014810 0001 11699 0 1 i1110 95 PaU e 1 EXHIBIT "C" RULES AND REGULATIONS ATTACFED TO AND TrIHICh CONSTI'T'UTE A PART OF OFFICE SPACE LEASE The following Rules and Regulations shall be in effect at the Pro3ect Landlord reserves the might 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 fox the use of the general public, and Landlord shall in all cases retain the right to cortrol and prevent access thereto of all persons whose presence in the 3udg•nenL of Landlord shall be pre3u 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 tre Premises (such as clients, customers, office suppliers and equipment vendors, and the like) unless such persons are engaged in illegal activ.�.ties No tenant and no employees of any tenant shall go upon the roof of the Building without the written consent of Landlord (2) No awnings or other pro3ection 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 ob3ects 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, skylijhts, windows and doors that reflect or admst light and air into tre halls passageways or other public places in Lhe Building shall not be covered or obstructed by any tenant, nor shall any bot—es, parce.s 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 anH rio forelc7n gllbstarce of an-v kind shall be thrown herein Al- damages x�sulting from any misuse of the fixtures s�iall )^e �)orne oy --nr tenant who, oz whose servants, employees, agents ✓.LSitors Or L1Cer,,ge(-s shall have caused the same EXHIBIT "C" TO OFFICE SPACE LEASE FS1067\014820 0001 1I699I0 1 il1/0')/Q5 Page 1 1>1 (6) No tenant shall mark; paint, drill into, or in any way deface any part of the Premises or the Buildinc. No boring, curring or 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 of f ice, chiropractor's of f ice, 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. y- (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 accortnodation 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 terTMs 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 goad order thereon, ana-tne relief of any financial or other burden cn 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 accomplis"ment of t::e aforementioned purposes, Lardlcrd may exclude a particular vendor entirely or limit the rru ber 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 selli:�g goods or services to a tenant, other than goods or services which are used by a terart only for the purpose of conducting its EXHIBIT TO OFFICE SPACE LEASE FST-WPOj43:0-DOOM21649120.I al l;o: os Page 2 business on its premises. "Personal goods or services" include, but are not limited to, drinking water and other beverages, food, barbering services, and shoe shining services. (12) No tenant shall make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of this or neighboring buildings or premises or those having business with their, by the use of any musical instrument, radio, phonograph or unusual noise, or in any otter 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 inflar.-,m.able, coribust.ible, 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 :brow 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. Stoking 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. (!6) 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 roods, 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 Y 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 Pratte; 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 natter 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 E?�, lding 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 Lo distzibute z.'re weight. (18 ) No tenant shall purchase janitorial, maintenance or other services frost 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 stall be resporsible for all acts of such persons). Ex4ept with Landlords prior written approval, no tenant shall permit EXF:IBIT ' C" TO OFFICE SPACE LEASE FS:1:67:014S20-DOC1,21694;0.1 a11'0:-95 Page 3 janitorial services to be performed during the hours of 7:00 a.m. to 6:00 p.m, Monday through Friday. (19) Landlord shallhavethe right to prohibit any advertising by any tenant which, in Landlord's opinion, tends to impair the reputation of the Building or -its desirability as an office/retail building and upon written notice from Landlord any tenant shall refrain from and discontinue such advertising. (20) On Saturdays from 12:00 p.m. to 8:00 a.m., Sundays, those legal holidays designated by Landlord, and on other days between the hours of 6:00 p.m. and 7:00 a.m., access to the Building or to the halls, corridors, elevators or stairways in the Building; or to the Premises may be refused unless the person seeking access is known to the building watchman, if any, in charge and has a pass or is properly identified. Landlord shall in no case be liable for damages for the admission to or exclusion from the Building of any person whom Landlord has the right to exclude. Each tenant shall be responsible for all persons for who:: he requests after hours access and shall be liable to Ladlord 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 aonlication to the manager of the Building. (23) Canvassing, soliciting and peddling in the Building are prohibited and each tenant shall cooperate to prevent the same. (24) There shall not be used in any space, or in the public halls of the Building, either by any tenant or others, any hand trucks except those equipped with rubber tires and side guards. (25) No vending or coin operated machines shall be placed by any tenant within his premises without the prior written consent of y Landlord. EXHIBIT "C" TO OFFICE SPACE LEASE FS! :67 01-tVa-00C 160A!o.1 it C'-QS Page 4 RCA (ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of Second Lease between Abdelmuti Development Co. and Visiontek Inc. COUNCIL MEETING DATE: December 18, 1995 RCA ATTACHMENTS STATUS Ordinance wlexhibits & legislative draft if applicable) Not Applicable Resolution wlexhibits & legislative draft if a licable) Not Applicable Tract Map, Location Map and/or other Exhibits Not Applicable Contract/Agreement (wlexhibits if applicable) Si ned in full by the gLty Attomp Not Applicable Subleases, Third Party Agreements, etc. (6g roved as to form by gLtZ Affome Attached Certificates of Insurance (Approved by the City Attome Not Applicable Financial Impact Statement Unbud et, over $5.000 Not Applicable Bonds (If a licable) Not Applicable Staff Report If applicable) Not Applicable Commission, Board or Committee Report If applicable) Not Applicable Findings/Conditions for Approval and/or Denial Not Applicable EXPLANATION FOR MISSING ATTACHMENTS REVIEWED RETURNED FORWARDED Administrative Staff Assistant City Administrator Initial City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: Council/Agency Meeting Held:-2-1-2! Deferred/Continued to: Approved D Conditionally Approved D Denied ity Clerk's Signat re Council Meeting Date: July 5, 1995 � Department ID ED 95-22 Number: REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: Honorable Chairman and Redevelopment Agency Members SUBMITTED BY: Michael T. Uberuaga, Executive Direct PREPARED BY: Ray Silver, Assistant City Administrator/Acting Director of Economic Development OW SUBJECT: Approval of Lease Between Abdelmuti Development Co. and Visiontek Inc. (Main -Pier Redevelopment Project Area) IStatement of Issue, Funding Source, Recommended Action, Alternative Action, Anetyais, Environmental Ststus, Attachment(s) Statement of Issue: The Owner Participation Agreement with the Abdelmuti Development Company requires the Agency to subsidize the difference, if any, between the Guaranteed Rental Rate and what is achieved for the office space of the second floor and one half of the third floor of the Oceanview Promenade located at Main Street and Pacific Coast Highway. Agency written approval is required for all leases. Funding Source: Main -Pier Account # ED-TM-888-7-75-00. \ Repornmendedi Motion To: Approve the lease between Abdelmuti Development Company and Visiontek Inc,, as summarized in the Basic Lease Provisions (Attachment No. 1). This approval is as to the fact of the Lease only. Altgmative Ac_tion(s): 1) Do not approve Lease between Abdelmuti Development Company and Visiontek Inc. 2) Direct Abdelmuti Development Company to seek another tenant. REQUEST FOR'REDEVELOPMENT AGENCYXCTION MEETING DATE: July 5, 1995 DEPARTMENT ID NUMBER: ED 95-22 n I i : On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company (Participant) for the development of a three story 42,000 square foot mixed use development. On November 4, 1991, the Agency approved the First Amendment (Attachment No. 3) to the original OPA calling for the addition of a 6,000 square foot fourth story as well as providing for a Guaranteed Rental Rate for a portion of the office space. On November 21, 1994, the Agency approved the Third Amendment to the OPA agreeing to payment of triple net costs of 25 cents per square foot. RMKGROUND: Guaranteed Rental Rate - In exchange for developing office instead of residential the following financial assistance was negotiated: Section 201(8) of the OPA reads as follows: Differential Rent Payment - In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents 01.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CPI". The triple net charges are the prorated costs for property taxes, insurance and maintenance. The Agency is therefore obligated to guarantee a minimum lease rate of $1.55 for all of the square footage on the second floor and one half of the third floor: 2nd floor 14,518 SF 112 of 3rd floor _6,087.SF, Total 20,600 SF Agency payment of the office subsidy began in January, 1995. In addition, the Agency will pay triple net costs of 25 cents per square foot until the year 2018. RAA9510.DOC -2- 06/21/95 6:26 PM REQUEST FOK'iIEDEVELOPMENT AGENCY Az:TION MEETING DATE: July 5,1995 DEPARTMENT ID NUMBER: ED 95-22 The Visiontek Inc., lease is for 2,283 square feet (2557 sf listed in the Basic Lease Provisions includes a load factory located on the second floor at $1.65 per square foot, for a total of $3,800. monthly. The Agency will subsidize the difference between the guaranteed rent of $1.55 a foot monthly, plus triple net charges in the amount of 25 cents per square foot for a total of $343. monthly, or $4,110 annually. The Agency is lowering their current subsidy for this space in Oceanview Promenade from $49,312 to $4,116 annually. This lease is for one three year term. Attachment(s): 1. Basic Lease Provisions 2. Site Plan 3. First Amendment to OPA MTU/BAKIKBBIdw (gSUSACA95101 RAA9510.DOC -3- 06122195 7:36 AM ATTACHMENT 1 OFFICE SPACE LEASE BASIC LEASE PROVISIONS The foregoing Basic Lease Provisions are presented here and represent the agreement of the parties hereto, sub]ect 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 VISIONTEK INC , an Illinois corporation 2 Premises, including Floor, Suite No and Rentable Area Second Floor, Suite C2, approximately 2557 rentable square feet 3 Estimated Commencement Date July 10, �1995 4 Lease Term Three (3) years 5 Basic Annual Rent $45,600 00 payable at $3,800 00 per month 6 Base Year Operating Expense N/A 7 Space Plan Approval Date June 1, 1995 8 Security Deposit $3,800 00, payable upon execution of Lease 9 Prepaid Rent $3,800 00, payable on execution of Lease 10 Broker(s) Lee & Associates 11 Address for Payments and Notices To Landlord Abdelmuti Development Company c/o Jack's Surf & Sport 101 Main Street Huntington Beach, CA 92648 Attn Mike Abdelmuti Tel (714) 536-6567 To Tenant Visiontek Inc 1175 Lakeside Drive !�, Gurnee, IL 60031 �1 Attn Facilities Manager Tel (800) 726-9695 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 A t TENANT IMPROVEMENT fOR VISiONTEK Suite Cz .w .SECOND FLOOR PLAN OCEANVIEW PROMENADE ATTACEi EW 3 REQUEL,,t FOR CITY COUNG.4 / . REDEVELOPMENT AGENCY ACTION RH 91-75 November 4, 1991 Date Submitted to: Honorable Mayor/Chairman do City Council/Redevelopment Agency Members Submitted by: Michael T. Uberuaga, City Administrator/Chief Executive Officer-Z7.1r----1C:- Pmpared by: Barbara A. Kaiser, Deputy City Admiaistrator/Economic Development� � � First Amendment to the Owner Participation Agreement between Abdelmuti Subject: Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area ] v#-13Z Consistent with Council Policy? DQ Yes [ ] New Policy or Exception 02..1 Statement of issue, Recommendation, Analysis, Funding Source, Alternative Actions, Attachment::.. -+ Transmitted for City Council/Redevelopment Agency consideration is the First Amendment to the Owner Participation Agreement with Abdelmuti Development Company previously approved on May 28, 1991. The original Agreement provides for the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commerclaVretail on the ground floor, and a total of approximately 24.000 square feet of office use on the second and third floors. The proposed Amendment calls for the development of a four-story building consisting of 17,140 square feet of new commercial/retall on the ground floor, and a total of 30,920 square feet of office use on the second, third, and fQuah floors - for a total of 48,060 square feet. Staff recommends the following actions betaken: 1) Conduct a joint public hearing on the First Amendment to the Owner Participation Agreement; and - 2) Adopt City Council Resolution No.�, Q and Agency Resolution No. ot/ Y , authorizing the execution and implementation of the First Amendment to the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development Company. On May 28, 1991, the Redevelopment Agency entered into an Owner Participation Agreement (OPA) with Abdelmuti Development Company ("Participant") for the development of a new three-story building, consisting of approximately 18,000 sf of new corn mercial/retail on the ground floor, and a total of approximately 24,000 sf of office use on the second and third floors. On July 12, 1991, the Participant submitted plans illustrating a proposed four_story building. totaling 48,433 sf. Staff and Agency members expressed concerns about the following items: • The addition of a fourth floor and the resulting height; • The size and location of the plaza at the corner of Main Street and Pacific Coast Highway-, • The use of the 10' dedications at either side of the building; • Responsibility for providing required parking in excess of 42,000 sf; and • The layout of access corridors for the upper stories. During a Redevelopment study session on September 30, 1991, the Agency gave staff informal direction as to the issues outlined above. Staff and the Agency Special Counsel have drafted the attached First Amendment to the OPA, incorporating language that accurately reflects the agreed upon design changes. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The salient points of the Agreement are outlined in the attached 33433 Report prepared by the Agency's economic consultant, Keyser Marston Associates, Inc. A summary of the changes incorporated into the First Amendment to the OPA are listed below: a) The Participant agrees to construct ground floor retail space of approximately 17,140 sf, and second, third & fourth floor office space totaling approximately 30,920 sf, for a total building area of approximately 48,060 square feet. b) The Participant will remove all (S) proposed parking spaces onsite and provide upgraded site improvements from the back of the building to the property line. c) Participant shall pay 50% of the offsite parking in -lieu fee of Twelve Thousand ($12.000) per space for all square footage in excess of 42,000 sf per code. As proposed, the Participant will be required to pay in -lieu fees for the additional 6,000 sf of office being constructed at a rate of four spaces per 1,000 sf, equaling 24 spaces at $6,000 per space, totaling $144,000. d) Participant shall not provide any parking onsite for the project. e) Participant shall construct a plaza at the corner of Main Street and Pacific Coast Highway of no less than 1,000 sf in size. f) Participant shall not encroach into 10' dedication on Pacific Coast Highway for the purpose of constructing pedestrian or upper story access, but rather to be preserved for future development, therefore, any stairways in this vicinity will need to be internalized. On October 24, 1991, the Design Review Board (DRB) reviewed Abdelmuti's site plans, elevations, colors, materials, and a scaled -down model of the proposed project. The DRB stated that the roof line, as illustrated in the submitted plans, encroached into the 10' dedication and would need to be either eliminated or redesigned so there would be no encroachment into the 10' dedication. g) Participant shall provide internal corridor circulation for upper story office uses. On October 10, 1991, the Redevelopment Committee reviewed and supported these changes to the First Amendment to the OPA as outlined above. EMINQJSQURCE: There is no significant fiscal impact as a result of the recommended action. 1) Continue action on the OPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. 1) Health & Safety Code Report 33433 2) First Amendment to OFA 3) Redevelopment Agency Resolutions 4) Staff Report dated May 29,1991 S) City Council Resolutions 6) Site Map MTUlBAKlKBB:Is 9771r .3 SUMMARY REPORT PURSUANT TO SECTION 33433 of the CALIFORNIA COMMUNITY REDEVELOPMENT LAW on a OWNER PARTICIPATION AGREEMENT by and between the REDEPELOPKMiT AGENCY OF THE CITY OF RUNTINGTON BEACH and ABDELHUTI DEVELOPMENT COMPANY This summary report has been prepared for the Huntington Beach Redevelopment Agency ("Agency") pursuant to Section 33433 of the California Health and Safety Code. This report sets forth certain details of the proposed Owner Participation Agreement ("Agreement") between the Agency and Abdelmuti Development Company ("Participant") for the development of approximately 18,000 square feet of commercial space and approximately 30,000 square feet of office space. The proposed commercial development is located at the corner of Main Street and Pacific Coast Highway in the Main Pier Redevelopment Project Area in the City of Huntington Beach. This report describes and specifies: 1. The cost of the proposed agreement to the Agency, including site acquisition costs, infrastructure costs, public parking costs, business interruption costs, subsidized rent costs, , plus the expected interest on loans or bonds to finance the Agreement; 2.. The estimated value of the interests conveyed, determined at the highest uses permitted under the Redevelopment Plan; 1 3. The purchase price to be paid by the Participant for the in- terests being conveyed. This report and the proposed Agreement are to be made available for public inspection prior to the approval of the Agreement. A. SALIENT POINTS OF THE AGREEMENT .. , .., M." Under the proposed Agreement, the Participant agrees to con- struct ground floor retail space of approximately 18,000 square feet, and second,'.third and fourth floor office space totaling approximately 30,000 square feet. The Participant will not be"'required to provide any parking on site. The four-story development will comply with the Agency's design standards, and the Agency -may at their discretion determine to change the use of the second, third and fourth stories to either a residential use at some point in the future. The Agency also retains the right to convert to restaurant should the Participant sell the property, except if sold within the immediate farily. The Participant must contribute $1 million to the construction of the improvements. The Participant will borrow the remain- ing funds required (up to a maximum of $3.5 million) to com- plete construction from the Agency on the basis of a 15-year promissory note. The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property for the con- struction of a "Public Plaza" and for the widening of Main Street. The Participant will also provide all required set- backs. 2 2. Acxency Responsibilities The Agency is responsible for and shall commit the following to the project: a, convey approximately 75% of the Agency -owned parcel ("Agency Parcel"), or the portion necessary to accom- modate 18,000 square feet of building area on the ground floor of the Project. b.- Finance cff-site improvement costs estimated at $250,000. c. Provide 121 parking spaces to serve the Project. d. Provide the developer with a loan at a maximum amount equal to $3.5 million. The Agency loan will be payable in monthly installments, fully amortized over fifteen years, at an interest rate of 7.0%. e. Compensate the Participant far the difference between the defined fair market rent for office space of $1.55 per square foot and the actual rental achieved by the office component of the project,.with the exception of 50% of the third floor and loot of the fourth floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to insure that a reasonable rental gate is being assessed. f. compensate the Participant for legitimate relocation and business interruption costs, including temporary trailers, during the close -down period. Said compensa- tion will not exceed 24 months. 3 0 B . COST OF AGREEMENT TO AGENCY The estimated costs of the agreement to the Agency are as fol- lows: Agency Acquisition of Gosney Parcel Off -site Costs Parking Structure - 121 spaces @ $13,750 PV of interest gap for Agency loan Differential rent payment for office Business Interruption and Temporary Trailers Total Costs to Agency (Less) Property Tax Increment Revenues (Less) Capitalized Value of Parking Revenues Net Costs to Agency $ 776,000 (1) 250,000 1,664,000 363,000 (2) 1/264/000 (3) 1,646,400 (4) $ 5,963#400 (1980000) (430,000) $ 5,335,400 (1) 75% of Gosney parcel, which was acquired for $1,035,000. (2) opportunity cost of issuing a 7.0% loan versus earning 8.3% interest on invested funds.. (3) For the 15,000 square feet of office on the second and third f loors. Based on achievable rent of $1.00 per square foot from ESA 'market analysis, and defined fair market rent of $1.55 per square foot. (4) Business losses estimated at $65,000 per rsonth for a maximum of 24 months. Three temporary trailers provided at $1,200 per month for a maximum, of 24 months. C. ESTIMATED VALUE -OF THE INTERESTS TO BE CONVEYED TO THE PAR- TICIPANT DETERMINED AT THE HIGHEST USE PERMITTED UNDER THE REDEVELOPMENT PLAN The Agency will convey the necessary portion of the Agency Parcel to accommodate 18,000 square feet of building area an the ground floor of the project. In return, the Participant will grant to the project a portion of the Remainder Parcel required for future dedication and the widening of Walnut Avenue. The transfer of the Agency Parcel to the Participant, and the transfer of the Remainder Parcel to the Agency for purposes of this agreement, are considered an equal exchange. 4 .1 M D. PURCHASE PRICE PAID BY PARTICI$ANT AND REASONS FOR DIFFERENCE IN FAIR MARKET VALUE FOR THE HIGHEST USE UNDER THE REDEVELOP- KENT PLAN The Participant is granting an equal amount of land to the project as is being received from the Agency. It has been deemed that the Agency and Participant parcels embody similar attributes, and have. essentially equivalent market values. The Participantts purchase price for the Agency Parcel shall be the sum of One Dollar ($1.00), payable in cash at the close of escrow. The Agency purchase price for the Remainder Parcel shall be the sum of one Dollar ($1.00), payable in cash at the close of escrow. Thus, the transaction represents an even ex- change. FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY THIS FIRST AMENDMENT ("First Amendment") is entered into this _ say of , -19911 by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ADDELMUTI DEVELOPMENT COMPANY (the "Participant"), EICIIaLa WHEREAS, tho Agency and Ehe Participant entered into an Owner Participation Agreement, dated May 28, 1991 (the "OPA"), a copy of which is on file as a public record with the City Clerk of the City of'Huntington Beach -and which is incorporated herein by reference; and .. WHEREAS, the Agency and.the Participant agree that it is in their mutual best interest that the proposed project be expanded; NOW, THEREFORE, the Agency. and the Participant do hereby agree to amend the OPA as follows: Amend Section 201(3), Project Design; Design and Construction Costs, to read to -follows: 3. prnip. esfgn:__DesiQn Pnd Cona ENction CQdtR. Participant shall at hit cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a four-story building totaling a maximum of 48,437 square feet with an approximately 18,000 square foot commercial/reteil ground floor area and with high quality office/commercial on the second, third and fourth stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second, third and fourth stories from office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that is -no closer in familial relationship than that of the third degree as that term would be defined under the California Probate CoCe, to a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require a change from office/commercial use, the .a Agency will pay those additional construction costs needed to convert the second, third or fourth floors to a residential or restaurant use Section 2 Amend Section 201(6), Excess Parking Costs and Provision of Parking Spaces, to read as follows 6 Excess PaLhing Costs and Provision of Parking SRaces There shall be no on -site parking for the Project Participant shall pay fifty percent (50%) of the offsite parking in -lieu fee of Twelve Thousand Dollars ($12,000) or Six Thousand Dollars ($6,000) per space necessary due to the increase in size of the proposed Project from 42,000 square feet to 48,000 square feet The additional 6,000 square feet of office space requires four (4) parking spaces per 1,000 square feet, pursuant to the Huntington Beach Municipal Code, for a total of twenty-four (24) spaces at Six Thousand Dollars ($6,000) per -space which equals One Hundred Forty -Four Thousand Dollars ($144,000) to be paid on or before issuance of a certificate of occupancy In exchange for this, the Participant will provide upgraded site improvements from back of the building to the property line at the same quality as the plaza area located at the corner of Main Street and Pacific Coast Highway (i e , pavers rather than asphalt) Agency shall pay any additional costs necessary to provide offsite parking for the Project ("Excess Parking Costs") The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City In the event, however, that Agency authorizes upper -story residential uses on the Site, Agency shall be responsible for providing full code -required parking for all residential units on the Site, with the parking spaces to be located off of the Site and within the block bounded by Main Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens the parcel(s) on which the parking is to be located Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to 10/17/91 7788u/2460/009 -2- �r Participant shall not exceed the reasonable cost of maintaining and repairirg'at-grade surface parking spaces. Section 3. Amend Section 201(8), Differential Rent Payment, to read as follows: 8. Differential,Rent Payment. In the event City or Agency requires upper -floor co.,%mercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements and/or vacant units for the second floor and one-half of the third floor commercial units and the "Gueranteed Rental Rate", defined on a triple not basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CPI" as defined herein (the "Differential Rent Payment"). In determining the third floor Differential Rent Payment pursuant to the approved rental agreements and/or vacant units for the third floor, all rents, including nonapproved rental agreement rents which exceed One Dollar end Fifty -Five Cents ($1.55) per -square foot, shall be averaged and the Agency shall pay the Differential Rent Payment based on the amount necessary to insure that one -calf of the total average per square foot amount is brought up to the Guaranteed Rental Rate. CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and clerical Workers, Los Angeles-Aneheim- Riverside Average, Sub -Group, "All Items" (1982/84-100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8. The Differential Rent Payment term stall commence with the issuance of the Certificate of Occupancy for the second and third floor space and terminate or. 0 kk 10/17/91 7788u/2460/009 -�- January 1, 2017. The City/Agency shall have the option of leasing any vacant second or third floor office space at the Guaranteed Rental Rate. Any business affiliated with the Participant (including, but not limited to, Abdelmuti Development Company and/or Jack's Surf & Sport) trust pay a minimum of One. Dollar and Fifty -Five Cents ($1.55) per square foot. Agency shall have the right to approve all leases of second and third story space. Failure to obtain Agency written approval a! a lease for the second or third floor shall result in a loss of the right to obtain the Differential Rent Payment as described in this Paragraph 8 of Section 201 for the space subject to the ronapproved lease. Sung. Amend Section II of Attachment No. 4 (Scope of Development), participant's Responsibilities, to read as follows: The Participant shell develop the Site -with a four-story building totaling approximately 48,437 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 30,000 total square feet of office on the second, third and fourth floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the same may be amended from time to time. EaCtiCn 5. This First Amendment and the provisions of the OPA which remain in effect collectively constitute the "Amended OPA;" The Amended OPA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into end execute this First Amendment, that all authorizations and approvals required to make this First Mendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to de so. 10/17/91 7788u/2460/009 -4- NE The effective date of this First Amendment shell be the date of execution by the Agency. 19— REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Chairman ATTEST: Secretary APPROVED AS TO FORM: StraCling, Yocca, Carlson & Rauth, Special Counsel to the Agency Agency .Counsel ABDELMUTI DEVELOPMENT COMPANY, a California general partnership By: Ahmad Abdelmuti, General Partner "Participant" 10/17/91 7788u/2450/009 -5- )N REQUE',r,.)- FOR CITY COUNG,.,;/ . REDEVELOPMfENT pAOENCY ACTION RH91-29 -5 8 / / /'�� (�PMay 28. 1991 Dew Honorable Mayor/Chairman & City Council/Redevelopment Agency Members Submitted to: Submitted by: Prepared by: Subject: Michael T. Uberu:aga, City Administrator/Chief Executive Of ' �� Barbara A. Kaiser, Deputy City Administrator Economic Development Owner Participation Agreement between Abdelmuti Development Company and the Redevelopment Agency of the City of Huntington Beach/Main-Pier Redevelopment Project Area Zj ;* z13 Consistent with Council Policy? M Yes [) New Policy or Exception do--� Statement of Issue, Recomn- ndetion, Analysis, Funding Source, Alternative Actions, Attachments: Transmitted for City Council/Redevelopment Agency consideration is an Owner Participation Agreement with Abdelmuti Development Company. This agreement provides for the Agency to assist Abdelmuti Development Company in the development of a new three-story building, consisting of approximately 18,000 square feet of new commercial/retail on the ground floor, and a total of approximately 24,000 square feet of office use on the second and third floors. The property is located at Main Street and Pacific Coast Highway. Staff recommends the following actions be taken: 1) Conduct a joint public hearing on the Owner Participation Agreement; 2) Adopt City Council Resolution No. Z z f 8 and Agency Resolution No. .2 /3 , authorizing the execution and implementation of the Owner Participation Agreement between the Redevelopment Agency and Abdelmuti Development Company; and 3) Approve the allocation of $4,810,000 from redevelopment funds to cover project costs. Since late 1994, the Agency has been attempting to put together an Owner Participation/Disposition & Development Agreement with the remaining property owners and various developers for the Main -Pier Phase it project. This proposed mixed -use project consists of the two blocks bordered by Main and Sixth Streets, Pacific Coast Highway and Walnut Avenue. On September 17, 1990, the Agency authorized staff to prepare a Request for Proposals (RFPs) which was issued in October of 1990. Staff is presently negotiating with Coultrup Development and the Main Street Property Owners for development of the remainder of Block 104, excluding the Abdelmuti site and all of Block 105, excluding the Worthy site (site map attached). Mr. Abdelmuti did not respond formally under the RFP, but initiated negotiations with staff upon the closure of his building. �a On December 11, 1990, the city's Community Development Department determined that the existing building at 101 Main Street was "unsafe to occupy" due to the loosening and falling of bricks from the facade, and was therefore, vacated and closed. At that time. the property owner revived old plans that called for the rehabilitation of the existing two-story structure. Allowing the property owner to proceed with rehabilitation would ensure that the City/Agency would not receive the street and plaza dedications and setbacks as already provided across the street en the Pierside Pavilion project. Further, the owner would be permitted to retain the existing non -conforming second story apartment uses. Therefore, the Agency directed staff to negotiate an agreement with the property owner that would enable the Agency to achieve its goals of the Main -Pier Redevelopment Plan, and yet be an economically viable plan for the participant to develop. Under California Redevelopment Law, the Redevelopment Agency is authorized to provide certain types of assistance directed at supporting and promoting private sector investments in Redevelopment Project Areas. The proposed OPA obligates the respective parties to be responsible for the following: PaMir„jnant's Remrsibilitits: a) The Participant agrees to construct ground floor retail space of approximately 19.000 square feet, and second and third floor office space totaling approximately 24.000 square feet for a total building area of approximately 42,000 square feet. b) The Participant will provide approximately seven (7) parking spaces onsite. c) The three-story development will comply with the City's design standards. The Agency may, at its discretion, determine to change the use of the second and third stories to Yesidential use at some point in the future should the office market never materialize. d) The Agency retains the option to convert the office to a restaurant should the Participant transfer the property to non --family ownership. e) The Participant must contribute $1 million to the construction of the improvements. The Participant will barrow the remaining funds required to complete construction from the Agency on the basis of a 15 year promissory note at 7% interest. This amount is estimated at $3 million for a total building and tenant improvement cost of $4 million. f) The Participant shall demolish the existing buildings on the subject site and dedicate sufficient property to allow for the construction of a "Public Plaza," the widening of Main Street, and will also provide required setbacks. Agency Res2gnsjbili1ies The Agency is responsible for and shall commit the following to the project: a) Convey approximately 75% of the Agency -owned parcel on Pacific Coast Highway ("Agency Parcel"). or the portion necessary to accommodate 19,000 square feet of building area on the ground floor of the project. b) Finance offsite improvement costs estimated at 5254,000. c) Construct parking adjacent to the site. providing 121 parking spaces to serve the project or the number of spaces required by the City/Agency. d) Provide a loan (estimated at $3 million) at a maximum amount equal to $110 per square foot of building area, less the $1 million Participant contribution to the project. The Agency loan will be payable in monthly installments, fully amortized over fifteen (15) years, at an interest rate of 7.0%. e) Compensate the Participant for the difference between the defined fair market rent for office space of $1.55 per square foot, and the actual rent achieved by the office component of the project, with the exception of 50% of the third floor, which will be leased by the Participant. The Agency will have the right to approve prospective office leases to ensure that a reasonable rental rate is being assessed. f) Compensate the Participant for legitimate relocation and business interruption costs, (as determined by actual IRS statements) during the close -down period from December 11,1990, until open for business, in an amount not to exceed $1,560.000. Income from Insurance proceeds and other retail sales will be deducted from this amount. The Agency will also provide temporary trailers in an attempt to reduce business losses. Funds of $4,810,000 will be needed to cover the building construction loan ($3 million), potential business interruption losses ($1,560,000) and offsite improvements ($250,000). Sources of funds for the $4,910,000 include Main -Pier Unencumbered funds of $1,530,000, bond proceeds of $2,045,000, and payment by R. Kou^f as land sales proceeds $1,235.000. 1) Continue action on the CPA and related resolutions to allow for additional review time. 2) Direct staff to further negotiate specific points of the agreement with the developer. 1) Health & Safety Code Report 33433 2) QPA 3) Redevelopment Agency Resolutions 4) City Council Resolutions S) Site Map 6) Fiscal Impact Statement MTU/BAK/KBB:Is 9020r • CITE' OF HUNTINGTON BEACH i INTER -DEPARTMENT COMMUNICATION w..rwCro•. u•c� , To MICHAEL T. UBERUAGA From ROBERT J. FRANZ City Administrator Deputy City Administrator Svblect REQUEST FOR APPROPRIATION Date MAY 16. 1991 TO ACCOMMOOAT E MAIN PIER OWNER PARTICIPATION PROJECT j FIS 91--14 As required under the authority of Resolution•4832. a Fiscal Impact Statement has been prepared and submitted relative to the proposed funding for the development of a three—story commercial/retail office building at Main Street and Pacific Coast Highway. Anticipations are that an appropriation of $4.810,000 would be adequate for this project. Upon approval of the City Council. the balance of the City's undesignated Main Pier Redevelopment Project Area Fund would be reduced by $2,765,000 to $3,180.000. while the remaining balance of the City's currently reserved Tax Allocation Bond Proceeds, currently at $2,045.000. would ,bf reduced to zero. 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L.hlG d.rf•.'•IN � r.••••«ew l.�+l •aNw.•1.1 ,.fi •N'iH1 M,4'•;•r ,.•.11 1{n d.l l.u1111.1- ' /���;, yr,:Iwh•.h ., rwA PROPOSED Kl,r;rwe.f111H,�:�i: ;I,I U1hlr,4f rl• M•awA•4N ..Ir NIu 1'NIlry.r+ r}•i.lira lf 1 I". ♦`(i4•4/1•Sr�.l IW:Yx...••Nrll SITE C !-.`•41j:s +H• �JLNi1 11•r Ilf=Ir.1+YMla"•r•�++r•rw» ..� w•.-- � ,. . 1A«Jrrt,wvNl•� n'- I.twrtqunlfhV•l•�•Ir./Jaltywrii wir4g1.1i1:7a1.1r}dw4.a•N {•, ry111run111.1111�1i71•f1, +Ir 1!/MIpn11rIWNA•IM Kr YMuh�n1K1I611.p+.ah N••1 n,INl'•'vK P,N ypNHlUlr•!IN{,il•U ��.J1 ,• r.{,rr,.rMl+wly�1N.I,.0 y/1,N r!•L�i •G r w14'+.Ul��j'9T.'�•.l l.Q S�17AC K. ... ...w.r••1a.-•I,r1:I w.IM If.ly •Y�.a ,Ly,{rl}r••I,wl 14y..�,lrw:•wl-IMw.F J.r,.a»r•T1wok I,+•Mr14.1n•:.l.+i••.r.1 • Y -.lrw«�r�w/.�y.irYu�rl��.�w.........I No, 1'�i1^�1��x 1.• :,r••••l•txnn.w+ I,{ oviiilll I 11I I, T'C Nw.I,.`a,rl4.a r/.�f•�Ili.•. •- {..'•r••�•••• !r�/rrw1, •iY1!ylI11F�. •..:;.1:,��fl8'...:.,.Irr.rl.r.al 1'.Itl�;l•�Iill'i�laliS�tll X1� PACIFIC COAST HIGHWAY PACIFIC COAST HIGHWAY AND MAIN STREET (9 NORTH SCALE a-=ao'•()' MAY ?n IgQ1 W cc 0 V- 1!4 16ch ao•o9 r S." 110 ATTAM "A" FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTiNGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY THIS FIRST AMENDMENT ("First Amendment") is entered into this _ day of , 1991, by and between THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH (the "Agency") and ABDELMUTI DEVELOPMENT COMPANY (the "Participant"). B E C I I& L 5 WHEREAS, the Agency and the Participant entered into an Owner Participation Agreement, dated May 28, 1991 (the "OPA"), a copy of which is on file as a public record with the City Clerk of the City of'Huntington Beach and which is incorporated herein by reference; and WHEREAS, the Agency and the Participant agree that it is in their mutual best interest that the proposed project be expanded; NOW, THEREFORE, the Agency and the Participant do hereby agree to amend the OPA as follows: SgCtion 1. Amend Section 241(3), Project Design; Design and Construction Costs, to read as follows: 3 Participant shall at his cost design and construct the Project pursuant to the Scope of Development (Attachment No. 4) as a four-story building totaling a maximum of 48,437 square feet with an approximately 18,000 square foot commercial/retail ground floor *area and with high quality office/commercial on the second, third and fourth stories. Agency, at its sole discretion, may determine to change the use of all or a portion of the second, third and fourth stories from 'office/commercial to residential, or in the event of a transfer of the Participant's interest to an individual or entity that'is no closer in familial relationship than that of the third degree as that term would be defined under the California Probate Code, to a restaurant commercial use (provided that in the event such a change occurs, the access to the second and third stories shall remain at the back of the building). In the event Agency later determines to require'a change from office/commercial use, the Agency will pay those additional construction costs needed to convert the second, third or fourth floors to a residential or restaurant use. Section 2. Amend Section 201(6), Excess Parking Costs and Provision of Parking Spaces, to read as follows: 6. Excess —Parking. Costs and Provision of Parking Snar=. There shall be no on -site parking for the Project. Participant shall pay fifty percent (50%) of the offsite parking in -lieu fee of Twelve Thousand Dollars ($12,000) or Six Thousand Dollars ($6,000) per space necessary due to the increase in size of the proposed Project from 42,000 square feet to 48,000 square feet. The additional 6,000 square feet of office space requires four (4) parking spaces per 1,000 square feet, pursuant to the Huntington Beach Municipal Code, for a total of twenty-four (24) spaces at Six Thousand Dollars ($6,000) per space which equals One Hundred Forty -Four Thousand Dollars ($144,000) to be paid on or before issuance of a certificate of occupancy. In exchange for this, the Participant will provide upgraded site improvements from back of the building to the property line at the same quality as the plaza area located at the corner of Main Street and Pacific Coast Highway (i.e., pavers rather than asphalt). Agency shall pay any additional costs necessary to provide offsite parking for the Project ("Excess Parking Costs"). The determination of the necessity for and location of additional offsite parking for any commercial uses on the Site shall be at the sole discretion of the Agency and the City. In the event, however, that Agency authorizes upper -story residential uses on the Site, Agency shall be responsible for providing full code -required. parking for all residential units on the Site, with the parking spaces to be located off of the Site and within the block bounded by Main Street, Pacific Coast Highway, Fifth Street, and Walnut Avenue. Such parking spaces shall be reserved for the free and exclusive use of the occupants of the residential units on the Site. Such obligation shall run in perpetuity and shall be evidenced by a recorded covenant or other document reasonably satisfactory to Participant which runs with the land and benefits the Site and burdens the parcel(s) on.which the parking is to be located. Such covenant or other similar document may provide for Participant and the Site to bear the cost of maintaining and repairing the reserved parking for the Site after the initial completion of construction, provided that the cost to 10/17/91 7788u/2460/009 -2- 0 WE L� Participant shall not exceed the reasonable cost of maintaining and repairing at -grade surface parking spaces. Section 3. Amend Section 201(8), Differential Rent Payment, to read as follows: 8. Differential Rent Payment. In the event City or Agency requires upper -floor commercial use, the Agency will pay the difference, if any, between the rent that Participant is entitled to achieve based on the approved rental agreements and/or vacant units for the second floor and one-half of the third floor commercial units and the "Guaranteed Rental Rate", defined on a triple net basis as One Dollar and Fifty-five Cents ($1.55) per square foot as adjusted on an annual basis by the Consumer Price Index or "CFI" as defined herein (the "Differential Rent Payment"). In determining the third floor Differential Rent Payment pursuant to the approved rental agreements and/or vacant units for the third floor, all rents, including nonapproved rental agreement rents which exceed One Dollar and Fifty -Five Cents ($1.55) per square foot, shall be averaged and the Agency shall pay the Differential Rent Payment based on the amount necessary to insure that one-half of the total average per square foot amount is brought up to the Guaranteed Rental Rate. CPI shall mean the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage Earners and clerical Workers, Los Angeles -Anaheim - Riverside Average, Sub -Group, "All Items" (1982/84-100). As an alternative to the CPI adjustment, at the sole discretion of the Agency, the Agency may require that the Guaranteed Rental Rate be determined utilizing the appraisal method set out in Attachment No. 12 attached hereto and incorporated herein by this reference. In no event shall the Guaranteed Rental Rate be decreased below the Guaranteed Rental Rate then in effect as a result of the appraisal or appraisals conducted pursuant to Attachment No. 12. In the event that the Guaranteed Rental Rate is established by an appraisal or appraisals conducted pursuant to Attachment No. 12, such Guaranteed Rental Rate shall remain in effect for a period of three (3) year period, and the Guaranteed Rental Rate shall be adjusted on an annual basis by the CPI, or by the appraisal method set forth in Attachment No. 12 if so elected by Agency, in the manner set forth in this Section 201, paragraph 8. The Differential Rent Payment term shall corm-nence with the issuance of the Certificate of Occupancy for the second and third floor space and terminate on 10/17/91 7788u/2450/009 -3- January 1, 2017. The City/Agency shall have the option of leasing any vacant second or third floor office space at the Guaranteed Rental Rate. Any business affiliated with the Participant (including, but not limited to, Abdelmuti Development Company and/or Jack's Surf & Sport) must pay a minimum of One Dollar and Fifty -Five Cents ($1.55) per square foot. Agency shall have the right to approve all leases of second and third story space. Failure to obtain Agency written approval of a lease for the second or third floor shall result in a loss of the right to obtain the Differential Rent Payment as described in this Paragraph 8 of Section 201 for the space subject to the nonapproved lease. BCCtion A. Amend Section II of Attachment No. 4 (Scope of Development), Participant's Responsibilities, to read as follows: The Participant shall develop the Site with a four-story building totaling approximately 48,437 square feet. The ground floor shall consist of approximately 18,000 square feet of commercial/retail and approximately 30,000 total square feet of office on the second, third and fourth floors. The Participant shall be responsible for all on -site improvements relating to the development of the Site in accordance with the terms and schedules as set forth in this Agreement as the same may be amended from time to time. This First Amendment and the provisions of the OPA which remain in effect collectively constitute the "Amended OPA." The Amended OPA integrates all of the terms and conditions of agreement between the parties, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter hereof. Sect gn A. Each of the parties hereto warrants and represents to the other that it has the full power and authority to enter into and execute this First Amendment, that all authorizations and approvals required to make this First Amendment binding upon such party have been obtained, and that the person or persons executing this First Amendment on behalf of such parties has been fully authorized to do so. 10/17/91 77BBu/2450/009 -4- The effective date of this First Amendment shall be the date of execution by the Agency. 19^ REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH By: Chairman ATTEST: Secretary APPROVED AS TO FORM: Stradling, Yocca, Carlson & Rauth, Special Counsel to the Age Qf-i L, 'AuT-rcN4 t w V Agency Counsel ABDELHUTI DEVELOPMENT . ANY, California gen ral er By. e uti, Hera] Partner Participant" 10/17/91 7786u/2960/009 -5- k4d RESOLUTION NO. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a First Amended Owner Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential building and other public improvements, all as set forth in greater particularity in the Agreement; and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Healtb and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Ilealtb and Zafcty CQde, W� contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The Agency has reviewed the EIR for this project which was . certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983. NOW, THEREFORE, the Redevelopment Agency.of the City of Huntington Beach does hereby resolve as follows: Section 1. The Redevelopment Agency finds and determines that EIR 82-2, certified and approved including the finding of overriding considerations by the City Council in its position . as the lead agency, is adequate for this project. Section 2. The Redevelopment Agency finds and determines, based upon the testimony and information presented during the public hearing with respect to the Agreement that the consideration for the real property to be transferred to the - 2 - tiW) k,.,i Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The Redevelopment Agency hereby approves the Agreement and all of its provisions, icluding without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this day of , 1991. Chairman. ATTEST: APPROVED AS TO FORM: Agency Clerk Agency Counsel Special Counsel REVIEWED AND APPROVED: INITIATED AND APPROVED: Executive Director Director of Economic Development - 3 - RESOLUTION 110. A RESOLUTION OF THE CITY OF HUNTINGTON BEACH APPROVING THE DISPOSITION OF REAL PROPERTY AND CONSTRUCTION OF PUBLIC IMPROVEMENTS PURSUANT TO A FIRST AMENDED OWNER PARTICIPATION AGREEMENT BY AND AMONG THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND ABDELMUTI DEVELOPMENT COMPANY WHEREAS, the Redevelopment Agency of the City of Huntington Beach (the "Agency") is authorized to conduct redevelopment activities within the Main -Pier Redevelopment Project Area (the "Project Area"), which activities include the acquisition and conveyance of real property for private development; and The Agency desires to enter into a First Amended - Participation Agreement (the "Agreement") with Abdelmuti Development Company, a California general partnership (the ( "Participant"), which Agreement provides for the acquisition and imposition of certain portions of the Project Area situated at the corner of Main Street and Pacific Coast Highway and the provision of a commercial and/or residential use building and other public improvements, all as set forth in greater particularity in the Agreement; 'and The Agency and the City Council of the City ("City Council") have conducted a duly noticed joint public hearing regarding the proposed Agreement in accordance with California Health and Safety Code Sections 33431 and 33433; and The staff report pertaining to the Agreement, which has been on display prior to the joint public hearing in accordance with Section 33433 of the California Health_an Safety Code, - 1 - contains a detailed description of the provisions of the Agreement; and The Agreement provides for the development of a commercial and/or residential use building and certain public improvements, which are a benefit to the project area and are essential to its development according to the Main -Pier Redevelopment Plan, the cost of which renders Such improvements infeasible without the financial participation by the Agency; and Pursuant to the Agreement, the Agency shall provide certain improvements of public benefit, including the commercial and/or residential building, which improvements are enumerated in the Redevelopment Plan; and The City Council has reviewed the EIR for this project which was previously certified as being in conformance with CEQA requirements and approved as adequate by the City Council in its action to uphold the Planning Commission's determination to that effect on July 18, 1983. NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby resolve as follows: Section 1. The City Council finds and determines that EIR 82-2, as previously certified and approved including the finding of overriding considerations, is adequate for this project. Section 2. The City Council finds and determines, based upon the testimony and information presented during the public - 2 - M `.f hearing with respect to the Agreement that the consideration for the real property to be transferred to the Developer by Deed constitutes the fair -market value thereof determined by the highest use permitted under the Redevelopment Plan for the Project Area and based upon the covenants and restrictions established by the Agreement. The Redevelopment Agency further finds that the provision of the public improvements as provided for in the Agreement are necessary to effectuate the purpose of the Redevelopment Plan applicable to the Project Area, that such improvements would be infeasible without the participation of the Agency and approves the provision of such improvements by the Agency. Section 3. The City Council hereby approves the Agreement and all of its provisions, including without limitation, the attachments thereto and authorizes the Chairman and the Executive Director to execute all documents referenced in the Agreement and necessary to effectuate the provisions of the Agreement. PASSED AND ADOPTED this day of , 1991. ATTEST: City Clerk REVIEWED AND APPROVED: City Administrator Mayor APPROVED AS TO FORM: o� City Attorney INITIATED AND APPROVED: Director of Economic Development - 3 - nRC, /ED OFFICE SPACE LEASE between ABDELMUTI DEVELOPMENT COMPANY, a California general partnership AS LANDLORD and VISIONTEK INC a corporation AS TENANT 1 �� 6-tom NORTHWEST CORNER OF MAIN STREET AND PACIFIC COAST HIGHWAY HUNTINGTON BEACH CALIFORNIA F=38310118240001U1469961 &0/22193 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 A10 ADDRESS . . . . . . . . . 3 ARTICLEII. TERM . . . . . . . . . . . . . . . . . . . . 4 SECTION 2.1 GENERAL .. . . . . 4 SECTION 2.2 TENDER OF POSSESSION BY LANDLORD . . . . . 4 SECTION 2.3 OPTION TO EXTEND TERN: . . . . . . . . . . . 4 ARTICLE III. RENT AND SECURITY DEPOSIT . . . . . . . . . . 5 SECTION 3.1 BASIC ANNUAL RENT . . . . . . . . . . . . . 5 SECTION 3.2 SECURITY DEPOSIT . . . . . . . . . . . . . 5 SECTION 3.3 RENTAL TAX . . . . . . . . . . . . . . . . . 6 ARTICLEIV. USES . . . . . . . . . . . . . . . . . . . 6 SECTION 4.1 USE ... 6 SECTION 4.2 PROHIBITION AGAINST SOLICITATION ANDOTHER ACTIVITIES WITHOUT THE PERMISSION OF L UMLORD .. . . . . . . . . 7 SECTION 4.3 EXCLUSIVE CONTROL OVER COMVON AREA . . . . 7 SECTION 4.4 SIGNS . . . . . . . . . . . . . . . . . . . 7 ARTICLE V. SERVICES . . . . . . . . . . 7 SECTION 5.1 UTILITIES AND SERVICES .. . . . 7 SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON FACILITIES . . . . . . . . . 9 SECTION 5.3 USE 0? COMMON FACILITIES . . . . . . . . . 9 SECTION 5.4 PARKING . . . . . . . . . . . . . . . . . . 10 ARTICLE VI. MAINTENANCE OF THE PREMISES . . . . . . . . . 11 SECTION 6.1 TENA-Vr'S MAINTENANCE AND REPAIR . . . . . . 11 SECTION 6.2 •LANDLORD'S MAINTENANCE AND REPAIR . . . . . 12 SECTION 6.3 ALTERA':IONS BY LANDLORD . . . . . . . . . . 12 SECTION 6.4 T&Wrr'S ALTERATIONS . . . . . . . . . . . 12 SECTION 6.5 M.ECHANIC'S LIENS . . . . . . . . . . . . . 13 SECTION 6.6 ENTRY AND INSPECTION . . . . . . 13 SECTION 6.7 SPAC3 PLANNING AND SUBSTITUTION . . . . . . 14 F.RTICLE VII. TAXES AYJ ASSESSMENTS ON TENANT'S PROPERTY 14 SECTION 7.1 TAXES ON TENANT'S PROPERTY . . . . . . . . 14 ARTICLE VIII. ASSIGNMENT AIdD SUBLETTIrIG 15 SECTION 8.1 PROHIBITION AND CONSENT . . . . . . . . . . 15 SECTION 8.2 NO RELEASE OF TENANT . . . . . . . . . . . 16 SECTION 8.3 TRANSFER FEE . . . . . . . . . . . . . . . 16 ARTICLE IX. INSURANCE AND INDEMNITY . . . . . . . . . . . 16 SECTION 9.1 TENA-Vr'S INSURANCE . . . . . : . . . . . . 16 SECTION 9.2 TF-NANT'S INDEMNITY . . . . . . . . . . . . 18 T.RTICLE X. DAMAGE OR DESTRUCTION . . . . . . . . . . . . 18 SECTION 10.1 RESTORATION . . . . . . . . . . . . . . . 18 SECTION 10.2 LANDLORD'S NON -LIABILITY . . . . . . . . . 19 SECTION 10.3 TENANT'S WAIVER . . . . . . . . . . . . . 20 ARTICLE XI. EMINENT DOMAIN . . . . . . . . . . . . . . . . 20 ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE . . . . . 20 SECTION 12.1 SUBORDINATION . . . . . . . . . . . 20 SECTION 12.2 ESTOPPEL CERTIFICATE . . . . . . . . . . . .21 ARTICLE XIII. DEFAULTS AND REMEDIES . . . . . . . . . . . 21 SECTION 13.1 TENANT'S DEFAULTS . . . . . . . . . . . 21 SECTION 13.2 LANDLORD'S REMEDIES . . 22 SECTION 13.3 INTEREST ON TENANT'S OBLIGATIONS; LATE PAYM3NTS. . . . . . . . . . . . . . . . 23 rsWU'414S20MlU146W.I mW19/93 .. a . SECTION 13.4 RIGHT OF LANDLORD TO PERFORM . . . . . . . 24 SECTION 13.5 DEFAULT BY LANDLORD . . . . . . . . . 24 SECTION 23.6 EXPENSES AND LEGAL FEES . . . . . . . . . 25 ARTICLE XIV. END OF TERM . . . . . . . . . . . . . . . 25 SECTION 14.1 HOLDING OVER F . . . . 25 SECTION 14.2 SURRENDER OF PREMISES; REMOVAL OF PROPERTY . . . . . . . . . . . . . 25 SECTION 14.3 AFFIXED PROPERTY . . . . . . . . . . . . . 25 ARTICLE XV. NOTICES . . . . . . . . . . . . . . . . . . . 26 ARTICLE XVI. RULES AND REGULATIONS . . . . . . ... . . . . 26 ARTICLE XVII. BROKER'S COMMISSION . . . . . . . . . . . . . 26 ARTICLE XVIII. TRANSFER OF LA'MLORD'S INTEREST . . . . . . . 27 ARTICLE XIX. INTERPRETATION 27 SECTION 19.1 GENDER AND NUtXER 21 SECTION 19.2 HEADINGS . . . . . . . . . . . . . . . . . 27 ARTICLE XX. EXECUTION AND RECORDING . . . . . . . . . . . 27 SECTION 20.1 CORPORATE AUTHORITY . . . . . . . . . . . 27 SECTION 20.2 RECORDINv 27 SECTION 20.3 AMENDMENTS 27 ARTICLE XXI. MISCELLANEOUS 27 SECTION 21.1 NONDISCLOSURE,OF LEASE TERMS 27 SECTION 21.2 FURNISHING OF FINANCIAL STATEYM TTS . . . . 28 SECTION 21.3 CHAN:,ES REQUESTED BY LENDER . . . . . . . 28 SECTION 21.4 GOVERNMENTAL REQUIREMENTS . . . . . . . . 28 SECTION 21.5 COVENANTS Ah'D CONDITIONS . . . . . . . . . 28 SECTION 21.6 WORK LETTER .. . . . . . . . 28 SECTION 21.7 JOINT AND SEVERAL LIABILITY . . . . . . . 28 SECTION 21.8 SUCCESSORS . . . . . . . . . . . . . 28 SECTION 21.9 TIME OF ESSENCE . . . . . . . . . . . . . 29 SECTION 21.10 CONTROLLING LAW . . . . . . . . . . . . . 29 SECTION 21.11 SEVERABILITY •• . . . . . . . . . 29 SECTION 21.12 RELATIONSHIP OF PARTIES . . . . . . . . . 29 SECTION 21.13 INABILITY TO PERFORM . . . . . . . . . . . 29 SECTION 21.14 QUIET ENJOYMENT .• . . . . . . 29 SECTION 21.15 HAZARDOUS WASTE ANDMATERIALS. . . . . . 29 SECTION 21.16 ENTIRE AGREEMENT . . . . . . . . . . . . . 30 FS2uU%014U M0011I140%.l SWIM r OFFICE SPACE LEASE BASIC LEASE PROVISIONS The foregoing Basic Lease Provisions are presented here and 'represent the agreement of the parties hereto, subject to further definition and elaboration in the Additional Lease Provisions and elsewhere in this Lease. In the event of any conflict between any Basic Lease Provision and the balance of this Lease, the latter shall control. 1. Tenant's Name: VISIONTEK INC., a corporation. 2. Premises, including Floor, Suite No. and Rentable Area: Second Floor, Suite 2C. approximately 2,283 rentable square feet. 3. Estimated Commencement Date: July ^, 1995. 4. Lease Term: Thirty-six (36) months 5. Basic Annual Rent: $45,600.00; payable at $3,800.00 per month; provided, hcwever, that Tenant shall have free rent for months 2, 3 and 13. 6. Space Plan Approval Date: 1995. 7. Permitted Parking Spaces: Twelve (12) undesignated parking spaces. 8. Security Deposit: $3,800.00; payable on execution of Lease. 9. Prepaid Rent: $3,800.00; payable on execution of Lease. 20. Broker(s): Lee & Associates. 11. Address for Payments and Notices: To Landlord: Abdelmuti Development Ccmpany c/o Jack's Surf & Sport 113 Main Street Huntington Beach, CA 92648 Attn: Mike Abdelmuti Tel.: (714) 536-6567 To Tenant: Visiontek Inc. Attn: Tel.: 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 F0U23101412 QWt%2140%.1 s0IMM and of the Additional Lease Provisions and Exhibits which follow, as of 1995. THIS LEASE SHALL NYr ABDELMUTI DEVELOPYM,11T COM.PM-Y, BECOME EFFECTIVE UNTIL a California general partnership EXECUTED BY LANDLORD ACID DELIVERED TO TENANT ACID THE SUBMISSION OF TAIS By: FORM OF LEASE BY LA0- Ahmad H. Abdelmuti, general LORD, OR LANDLORDS partner AGENT, DOES NOT CONSTI- TUTE AN OFFER TO LEAS2. •Landlord* NO EMPLOYEE OR AGENT OF LANDLORD OR ANY PERSON k'ITH WHOM TENANT MAY HXTE VISION'TEA INC., a NEGOTIATED THIS LEASE ELA.S corporation ANY AUTHORITY TO N.ODIFY THE TERNS HEREOF OR TO MAKE ANY AGREEMIENTS, By: REPRESENTATIONS OR FROMISES UNLESS THE SA14E Its: ARE CONTAINED HEREIN OR ADDED HERETO IN WRITING. "Tenant* MEMORANDUM OF ACTUAL C01^21ENCEMENT AND EXPIRATION DATES Commencement Date: Expiration Date: MUSHMuo.00 U146M.1 amnW" -2- ` ADDITIONAL LEASE PROVIS ARTICLE I. PREMISES SECTION 1.1 jE&QEfl—PREMIX. Landlord hereby leases to Tenant and Tenant herety 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 PA-1' (the 'Premises'). 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-20 attached hereto. Said office and retail structure is hereinafter called the •Building•. The location of the Building and of certain parking facilities and related improvements on said property are shown on the site plan attached hereto as Exhibit •A-36. Said real property, the .:. Building, parking facilities and other related improvements and such additional buildings, parking structures 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 ACCE ANCE 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 cf 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 its standard build out or under 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 co=ences 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 malls 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 2.4 BUILDING NAME AN 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 tte 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. Fsnxswu:�0000iw.es+e.� .oan+ns -3. ARTICLE II. .TERM SECTION 2.1 rENE L. The term of this Lease shall be for the period shown in Item 4 of the Basic Lease Provisions, commencing on the estimated commencement date as shcwn in Item 3 of the Basic Lease Provisions, or such later date as the Premises shall be tendered to Tenant ready for occupancy or upon such earlier date as Tenant takes possession or commences use of the Premises for any purpose other than construction (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-40, stating the Commencement Date and the expiration date of the term cf this Lease. The term "ready for occupancy* shall mean when Landlord (a) has put in operation all Building services essential for the use of the Premises by Tenant; (b) has provided reasonable access to the Premises for Tenant, its agents, employees, licensees and invitees so that the same may be used without unnecessary ' interference; and (c) subject to the provisions of the Work Letter, if any, has 'substantially completed, (as defined in the Work _'. Letter) the work required to be done by Landlord within the Premises pursuant to the Work Letter. SECTION 2.2 TZMER OF POSSESSION BY LAA'DLORD. 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 fifteen (15) 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 stall not be void or '. voidable nor shall Landlord by liable to Tenant for any loss or damage resulting therefrom. SECTION 2.3 OPTION TO EXTENT) TERM. Tenant shall have one (1) option to extend the tertr. of this Lease for a period of three (3) .� years ("Extension Term*), provided that at the time of such election and at the expiration of such existing term Tenant is not then'in default under any of the terms or provisions of this Lease. Tenant shall exercise the option by giving written notice of Tenant's intent to exercise the option to Landlord at least one hundred eighty (180) days prior to the expiration of the existing term hereof. During the Extension Term, the basic annual rent shall be equal to ninety-five percent (95%) of the then fair market �• rental value of the Premises.- If Landlord and Tenant cannot agree • upon the fair market rental value of the Premises within sixty (60) days after Landlord's receipt of Tenant's notice exercising the option contained herein, Landlord and Tenant shall each appoint a •Qualified Arbitrator" (as defined below) within seven (7) days after the expiration of the aforementioned sixty (60) day period. Such arbitrator shall confer and select a third Qualified Arbitrator (the "Neutral Arbitrator•), who alone shall determine the fair market rental value of the Premises. Should the two (2) arbitrators fail to select a third Qualified Arbitrator to act as the Neutral Arbitrator within seven (7) days, the Neutral ' Arbitrator shall be designated pursuant to California Code of Civil ' Procedure Section 1281.6, as that section may be amended or redesignated from time to time; provided, however, that the Neutral Arbitrator so appointe3 must be a ■Qualified Arbitrator.* The determination of the Neutral Arbitrator shall be binding upon Landlord and Tenant. Landlord and Tenant shall bear the cost of the arbitrator appointed by such party and shall equally bear the cost of the Neutral Arbitrator. As used herein, the term ". *Qualified Arbitrator, shall mean a person who is a real estate broker with not less than five (5) years' experience in comiercial • office leasing in the Huntington Beach area. Notwithstanding ` anything in this secticn to the contrary, the basic annual rental for the Extension Term shall not be reduced below the basic annual rental in effect immediately preceding the arbitrator's decision. 'R FS'_U010ut]4000[4 MK6.1 -4- ARTICLE III. RENT A%M SECURITY DEPOSIT SECTION 3.1 (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 Coan.encement 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 11 of the Basic Lease Provisions, or to such other person or at such other place as Landlord may from time to time designate in writing. (b) As used herein "Lease Year■ shall be a period of twelve (12) consecutive months commencing on the first full calendar month during the lease term; provided that the first Lease Year shall also include any partial calendar month following the Commencement Date. (c) In the event that at any time during the term of this Lease, any governmental law, rule or regulation prohibits or postpones in whole or in part any increase in the rent or in the payment of other sums payable by Tenant hereunder to be made pursuant to this Lease, then, and in either of such events, such increase or payment shall be made to the maximum extent permissible by law at the time provided in this Lease, and/or at any time or times thereafter such increase or payment, or any portion thereof, may lawfully be made and any such increase in rent, or any portion thereof, or other sums payable hereunder, or portions thereof, the. payment of which has been so prohibited or postponed, shall thereafter become due and payable to the maximum extent and at the earliest time or times permitted by law. SECTION 3.2 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum stated in Item 8 of the Basic Lease Provisions, to be held by Landlord as security for the full and faithful performance of every Lease provision to be performed by Tenant. If Tenant defaults with respect to any provision of this Lease, including, but not linited 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 o_her 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 coVensate 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 ralance 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. Each time the basic annual rent is increased under Sections 3.1(c) Muu1014naOOM2144M.1 .a IM5 -5- and/or 3.1(d) above, Tenant shall deposit additional funds with Landlord sufficient to increase the security deposit to an amount which bears the same relationship to the adjusted basic annual rent 5 as the initial security deposit bore to the initial basic annual rent. SECTION 3.3 RENTAL TAX. Should the United States of America, the State of California or any political subdivision �. thereof, or any governmental authority having jurisdiction impose =°L a capital levy or a tax, assessment and/or surcharge of any kind or nature upon, against, in connection with, Measured by, or with respect to the rentals or other charges payable to Landlord by Tenant or other tenants in or occupants of the Building and/or the Project or on the income of Landlord derived from the Building and/or the Project or on Building and/or Project revenues, on Landlord's ownership of the Building and/or the Project, or any portion thereof or interest therein, or otherwise, other than on the value of real and personal property comprising the Building and/or the Project, but expressly excluding any general net income, franchise, or inheritance tax levied upon or payable by Landlord, then, in such case, such tax, assessment and/or surcharge shall be paid to Landlord by Tenant. ARTICLE IV. USES SECTION 4.1 IISE. 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'a expense, promptly comply with all present and future laws, ordinances, statutes, crders, rules, restrictions, regulations and 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 obstructs or interfere with the rights of ether 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 coma:on 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 businsss 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. e1w14n&4W3%214"%.1 00VIM - 6 - SECTION 4.2 PROHIBITION _AGAINST ,SOLID ATION_= OMB 1,CTIVITIES WITHOUT. THE PERMISSION_ OF LAtMLM. Tenant hereby delegates to .Landlord full power, authority and control to regulate, in accordance with the rules and regulations attached hereto as Exhibit 'B• and/or from time to time adopted pursuant to Lrticle 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 -hole 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 CON_"'.ON AREA. It is expressly agreed and understood that control over all uses of the 'Common Facilities" (defined in Section 5.2 below) shall reside with and be solely exercisable by Landlord in its sole and absolute discretion. Said areas shall not be available for use by Tenant, except as herein expressly provided, nor by vendors, surveyors, petitioners and others without the express written consent of Landlord, which Landlord may withhold in its sole and absolute discretion. SECTION 4.4 `L'. 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 cf 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 the patio area outside 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. AITICLE V. SERVICES SECTION 5.1 I=LITIES AND_ SERVICES. Subject to the provisions set forth below, Landlord shall furnish to the Premises ` between the hours of 7:00 a.m. and 6:00 p.m. Monday through Friday, and between the hours of 6:00 a.m. and 12:00 p.m. Saturday, except those legal holidays designated by Landlord, such amounts of air conditioning, heating and ventilation as Landlord furnishes for ' normal office purposes in other portions of the Building taking into consideration at any given time the availability of energy resources and prudent energy conservation practices. During other hours Landlord will provide such air conditioning, heating and ventilation upon not less than 48 hours advance written notice from Tenant to Landlord, aid Tenant, upon presentation of a bill therefor, shall pay Landlord for such service on an hourly basis at the then prevailing rates therefor as established by Landlord. If each service is not a continuation of that furnished during regular FSzUtM]4r-0.00W1214"%.1 - 7- business hours, Tenant shall pay for a minimum of two (2) hours of such service. Subject to provisions set forth below, Landlord ' shall at times furnish the Premises with elevator service, reasonable amounts of electric current for normal lighting by Fuilding Standard overhead fluorescent and incandescent fixtures and for fractional horsepower office machines and water for lavatory and drinking purposes. Landlord shall have no obligation ' to provide janitorial service for the Premises. Tenant will not without the prior written consent of Landlord use any apparatus or device in the Premises, including without limitation electronic data processing machines, punch card machines : and machines using current in excess of 110 volts which will in any way increase the amount of electricity, or water usually furnished • _ cr supplied for use of the Premises as general office space; nor connect any apparatus, machine or device with water pipes or +.. electric current (except through existing electrical outlets in the &remises), for the purpose of using electric current or water. Landlord may impose a reasonable charge for all electricity ' used by Tenant in the Premises. Landlord may cause an electric current meter to be installed in the Premises to measure the amount of electric current consumed for by the Premises. The cost of any such meter and of installation, maintenance and repair thereof ' shall be paid for by Tenant and Tenant shall reimburse Landlord promptly upon demand by Landlord for all such electric current consumed by the Premises as shown by said meter, at the rates • charged for such services by the local public utility furnishing the same, plus any additional expense incurred in keeping account of the electric current so consumed. If any lights, machines or equipment (including without limitation electronic data processing machines) are used by Tenant in the Premises which materially affect the temperature otherwise maintained by the air conditioning system, or generate : substantially more heat in the Premises than would be generated by the Building Standard lights and usual fractional horsepower office : equipment, Landlord shall have the right (but shall not be obligated) to install any machinery and equipment which Landlord reasonably deems necessary to restore temperature balance, including without limitation, modifications to the standard air conditioning equipment, and the cost thereof, including the cost of • installation and any additional cost of operation and maintenance '.'.: occasioned thereby, shall be paid by Tenant to Landlord upon demand by Landlord. 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 ' i•' 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. In the event that any such 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 wren 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 d- not exceed those which Tenant would be required to pay it 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 •'ti such service or utilities shall entitle Tenant to any damages, ' relieve Tenant of the obligation to pay the full rent reserved herein or constitute or be construed as a constructive or other eviction of Tenant. Tenant shall comply with all rules and ' regulations which Landlord may reasonably establish for the proper '•''`• functioning and protection of the air conditioning, 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 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, parking areas, driveways, truckways, • delivery passages, loading docks, sidewalks, rxTs, 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 1LSE CF MJ�MN FACILi![XIES. The use and occupancy ' by Tenant of the Premises shall include the use of the Cor.=n 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 fr= time to time by Landlord pursuant to Article XVS 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, upor. demand of Landlord, shall restrain such unauthorized use by appropriate proceedingd. Nothing herein shall ;r afLect the right of Landlord at any time to remove any such unauthorized persons or obstructions. Landlord may temporarily ~ . close any Common Facility fay 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. niuu�our�owoiu��e+9ea wu»ns -9- SECTION 5.4 Ea KI G (a) Landlord has constructed and shall maintain or cause to be constructed and maintained, an automobile parking area in the .' location shown on the site plan attached hereto as Exhibit 'A-30 and to maintain and operate, or cause to be maintained •and !; operated, said automobile parking area during the term of this Lease for the benefit and use of the visitors and patrons and except as otherwise provided, employees of Tenant, .and other tenants and occupants of the Project. Wherever the words "Parking Area' are used in this Lease, it is intended that the same shall include, whether in a surface parking area a parking structure, or subterranean parking garage, the automobile parking stalls, -.,,.. driveways, entrances, exists, sidewalks and pedestrian passageways in conjunction therewith and other areas designated for parking. Landlord shall at all times have the right and privilege of determining (1) the na=ure and extent of the automobile parking areas, whether the same shall be surface, underground or other structure, and of making such changes therein and thereto from time • to time which in its opinion are deemed to be desirable and for the efficient development of the Project, (2) the direction and flow of traffic, (3) the installation of restricted areas, traffic control signs, landscaped areas and the institution of valet parking systems for specific occupants, (4) the designation of outside sales areas, drive -through banking, restaurant or other drive - through facilities and/or areas to be used for seasonal and/or outside sales activities, and (5) all other facilities thereof. ' Landlord shall keep the Parking Area in a neat, clean and orderly condition, properly lighted and landscaped, and shall repair any damage to the facilities thereof. Nothing contained herein shall be deemed to create liability upon Landlord for any damage to motor vehicles of customers or employees or from loss of property from ' within such motor vehicles. Notwithstanding the foregoing, Landlord shall at all tires, subject only to condemnation and/or other governmental restriction, provide or cause to be provided sufficient parking spaces for the Project to satisfy the parking • requirements of the City of Huntington Beach then applicable to the Project. (b) Landlord may charge for parking and may establish for the •`'' harking Area, a system or systems of valet parking or permit Parking for Tenant, its employees and its visitors, which may include, but is not limited to, charged validation or other operation including, but not limited to, a system of charges against nonvalidated parking, verification of users and a set of regulations governing different parking locations based upon the charges paid and the identify of users. Landlord may also designate and limit specified parking spaces for use by certain ' occupants of the Project and/or their employees or invitees and may charge a premium for the use of such parking space. Tenant shall Comply with such system in its use and in the use of its visitors, patrons and employees with respect to said automobile parking area. provided, however, that all charges to Tenant for use of the Parking Area shall be no greater than those prevailing for comparable parking spaces in comparable parking garages in first class office/retail projects in the Huntington Beach area. (c) Tenant shall furnish Landlord with a list of its ` employees' names and of Tenant's and its employee's vehicle license nambers within fifteen (15) days after taking possession of the Premises and Tenant shall thereafter notify Landlord of any changes in such list within five (5) days after such change occurs. Tenant agrees to cause its e.`rtployees to park in those parking spaces or areas from time to time designated by Landlord for such purpose and to pay, or to cause its employees to pay, the parking rates from time to time applicable to such parking. If Tenant or its employees park in other than such designated parking areas then _ Landlord may charge Tenant, as an additional charge, FIFTEEN DOLLARS ($15.00) per day for each day or partial day each such vehicle is parking in any part of the Parking Area other than that designated. Tenant hereby authorized Landlord to tow away from the ,. Project any vehicle belonging to Tenant or to any of Tenant's '. - sr_►s�wue7a000�uuw9a.� .oui9ns -10- employees parking in violation of these provision, and/or to attach violation stickers or notices to such vehicles. In the event Landlord elects or is required to limit or control parking by tenants, employees, visitors or invitees of the Building, whether :. by validation of parking pickets, or any other method of assessment, or any program for free or reduced cost transportation, • ,. +errant agrees to participate in such validation, assessment or transportation program under such reasonable rules and regulations as are from time to time established by Landlord and/or any applicable governmental agency with respect thereto. y (d) Landlord may designate certain parking spaces for the use • of visitors and/or patrons of the occupants of the Project, and unless otherwise provided, employees and other users of the Parking ' Area who are not patrons and/or visitors doing business in the Project shall be prohibited from using such spaces. Such spaces • may but need not be located in that portion of the automobile • parking area which will allow patrons and visitors the easiest access to the Building and other buildings, if any, in the Project. Landlord shall at all times have the right to establish rules and regulations for employee parking pursuant to Article XVI below. Landlord may authorize persons other than those described above, ;". including occupants of other buildings, to utilize the Parking Area; provided, however, that in no event shall such use reduce the number of parking spaces in the Parking Area provided for patrons and visitors of the Project and employees of occupants of the Project below those reasonably required for such persons during . normal business hours on normal business days. (e) 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, on or account ' of the parking spaces thereon, by any governmental agency or ' authority pursuant to the "Clean Air Act', or any plan irplemented pursuant to such Act or any enactment amendatory or in substitution thereof, or pursuant to any other governmental act or decree, Landlord may institute or increase established parking charges to recover such fees. The foregoing parking provisions are subject to any governmental regulations which limit parking or otherwise seek to encourage the use of carpools, public transit or other alteknative transportaticn forms. (f) Notwithstanding the foregoing, throughout the term of this Lease, Tenant shall, for the use of its employees, be entitled to the use of the number of parking spaces specified in Item 7 of the Sasic Lease Provisions at no additional charge, unless a charge is imposed under (e) above. ARTICLE VI. MUNTENANCE OF THE PREMISES SECTION 6.1 TENANT'_S_YAINTENV (a) Tenant at its sole cost and expense shall make all repairs necessary to keep the Tremises, the 'HVAC system for the Premises and any utility facilities exclusively servicing 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 ;r Landlord. Landlord fray impose reasonable restrictions and requirements with respect to such repairs including, without limitation, those applicable to Tenant's alterations as set forth in Section 6.4. ' (b) Tenant, at its sole cost and expense, shall install and mi-tintain 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. rr.U" 014""WL%2J .1 .mn+ns .11- SECTION 6.2 LAND ORD'S MAINTENANCE = 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 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 wake 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. p (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. `��Lbw{•]►t7�i:� tr�l��lr�{•l►f-y.l'i�+:��4•)�:•]ti� (a) Landlord reserves the right at any time, and from time to time, to make changes in or to the Building and the fixtures and equipment thereof, to make alterations or additions to any building within the Project, to construct other buildings (including free standing buildings) and improvements within the Project, to enlarge cr reduce the Project ar-d 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 conprieiag the Project for the constriction thereon of buildings, which may or may not be part of the Project. Landlord reserves the right at any time to relocate the building, parking areas, Common Facilities and other areas shown en Exhibit •A-30 and to add or delete buildings and areas to or from the Project as defined for purposes of this Lease. Landlord further reserves the right at any time to change the size, configuration, shape, number and extent of the Common Facilities, or any of them, all as Landlord may deem necessary or desirable in its sole discretion. No such change described in this Section 6.3(a) shall entitle Tenant to any abatement of rent or other claim against Landlord; provided, however, such changes or alterations shall not deprive Tenant of reasonable access to or use of the Premises. (b) As a material inducement to Landlord's entering into this Lease, Tenant expressly waives and releases any rights it may have whether granted by statute or otherwise, to make repairs at Landlords expense, including, but not limited to, its rights as contained in Sections 1941, 1941.1 and 1942 o! the California Civil Code. SECTION 6.4 TENX.NT'S ALTERATIONS. Tenant shall not make alterations, additions or improvements to the Premises nor any repairs. replacements cr 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, way deem reasonable or desirable, including, but not limited to, a requirement that all work be covered by a surety bond in favor of Landlord, guaranteeing the completion of such work free and clear of all subcontractors', mechanics' and materialmen's liens (which bond s:uall be satisfactory to Landlord) and requirements as to the manner, time and contractor or contractors ag to or by which such work shall be done. Notwithstanding the FSn t3%014r0=1%7140%.t NO119MJ -12- foregoing, no improvements may be made that would diminish the value of the Premises and, in addition, no improvements may be made to any mechanical or utility system, the exterior walls or the roof of the Premises, nor may any improvements of a structural nature be ' made without Landlord's approval, which approval may be withheld in Landlord's sole and absolute discretion. In no event shall Tenant make or cause to be shade 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. Any request for Landlord's consent to such work shall be made in writing and shall contain three (3) sets of archi- tectural 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 aovernz.ent 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 an 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 MEMAHMS LIENS. Tenant shall keep the Premises ' free from any liens arising out of any work performed, materials furnished, or obligations incurred or alleged to have been incurred by, for or under Tenant. In the event that Tenant shall not, : within twenty (20) days following the imposition of any such lien (but in any event before an action is filed to foreclose such lien), cause the same to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided herein and by law, the right (but not the obligation) to cause the same to be released by such means as it _ shall deem proper, including payment of or defense against the •`' claim giving rise to suca 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 abcut 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 rsT3s3+014r20 01X?14&M.1 -13 - 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 j wgross 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 tern, 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 SEACE_PUMIr' 2U%M_sSUB5TT=T . Landlord shall have the right, upon providing Tenant thirty (30) days' written ' r_otice, to move Tenant to other space in the Building. Such new r• space shall be approximately the same size as the Premises, and be • =' provided with comparable improvements (upgrading only to the level of Tenant's prior space). Landlord shall pay the expenses reasonably incurred by Tenant in connection with such substitution of Premises, including but not limited to, costs of moving, door lettering, telephone relocation and reasonable quantities of new stationery. In the event of such relocation, this Lease shall remain in full force and effect and be deemed applicable to the new space except that Exhibit 'A-1' and Item 2 of the Basic Lease Provisions shall be amended to include and state all correct data as to the new space. ARTICLE VIZ. TAXES AND ASSESS4ENTS ON TMANT'S PROPERTY .. SECTION 7.1 =ES 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 i,. property of Tenant located in or about the Premises, and when ` %'•' possible, Tenant shall cause said fixtures, furnishings, equipment and other personal property to be assessed and billed separately from the real property of which the Premises form a part. If any _ such taxes on Tenant's personal property or trade fixtures are ,. levied against Landlord or Landlord's property and if Landlord pays the same (which Landlord shall have the right to do regardless of the validity of such levy), or if the assessed value of Landlord's property is increased by the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and if Landlord pays the taxes based upon such increased assessment, =� Tenant shall pay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment. ., (b) If the tenant improvements in the Premises, whether '- installed and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are '. assessed for real property tax purposes at a valuation higher than the valuation at which tenant improvements conforming to Landlord's building standards in other space in the Building are assessed, . FS:u AD14M000M21.e+%.t O 39193 -14 - 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. ASSIGh.Mh'T ALM SUBLETTING SECTION 8.1 ERQ$1-13ITION AND CONSENT. (a) Tenant shall not, either voluntarily or involuntarily, by • cperation of law or ctherwise, assign, sublet, sell, encumber, Fledge or otherwise transfer all or any part of the Premises or Tenant's leasehold estate hereunder, or permit the Premises to be cccupied by anyone other than Tenant or Tenant's employees, without Landlord's prior written consent in each instance. Any assignment cr 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 volun_ary 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 rmaning 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 M the name of the proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's business to be carried on in the Premises; (iii) the terms and provisions of the proposed sublease or assignment; (iv) such financial information as t Landlord may request concerning the proposed subtenant or assignee; and (v) such information as Landlord may request regarding the ` business experience concerning the proposed subtenant or assignee daring the preceding five (5) years. (c) At any time within thirty (301 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 Truant to Landlord for such space under this Lease, cr (b) of profit received by Tenant from such assignee; Ui) 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 no -:ice upon the same terms (excluding terms relating to purchase of personal property, the use of Tenant's name t rsiuuaiu:aaoonti�ese.i .ml�u�s -is- 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 wade 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. Landlord may exercise its rights under clauses (i) through (iv) above in its reasonable discretion. 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 te=.s 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 6.1. 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 VO RELEASE OF TEX=. 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 perfcrmed by Tenant hereunder. Each assignee or transferee. other than Landlord, shall assume, as provided above, all obligations of Tenant under this Lease and shall be and remain liable jointly and severally with Tenant for the payment of the rent, and for the due performance of all the terms, covenants, conditions and -agreements herein contained on Tenant's part to be performed for the term of this Lease. No assignment shall be binding on Landlord unless such assignee or Tenant shall deliver to Landlord a counterpart of such assignment which contains a covenant of assumption by the, assignee satisfactory in substance and form to Landlord, consistent with the requirements of this Article VIII, but the failure or refusal of the assignee to execute such instrument of assumption shall not release or discharge the assignee from its liability as set forth above. The acceptance of any payment due hereunder by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision of this Lease or to be a consent to any assignment or subletting. SECTION 8.3 3ZAH ?ER 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 FIVE HMDR£D DOLLARS ($500.00) in connection with the processing, documentation and other administrative costs thereof, along with Landlord's reasonable attorneys' fees incurred in connection therewith. ARTICLE IX. INSURANCE AND INDEMNITY SECTION 9.1 'ITNM'S TNSURAN;Z. (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 ray appear, policies of ins%:rance 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: FW3UN034M: M1469%.1 ruIMS -16- (i)' Worker's Compensation -- Statutory (including broad form all states) (ii) Comprehensive General Liability Insurance, including Blanket Contractual Liability, Broad Form Property Damage, Personal Injury, Completed Operations, Products Liability, Fire Legal Liability -- Not less than amount stated in Item 12 of Basic Lease Provisions. (iii) So-called 0F11-Risk Insurances including without limitation Fire and Extended Coverage, vandalism and Malicious Mischief, and Sprinkler Leakage Insurance, in an amount sufficient to cover the full ccst 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 cf same therein shall not be affected by any breach by Tenant of any policy provision for which such certificates evidence coverage. Further, all certificates shall expressly provide that 1) no less than thirty (30) days prior written notice shall be given Landlord and such other named insureds in the event of material alteration to or cancellation of the coverages evidenced by such certificates and 2) such coverage evidenced by the certificate is primary and that any coverage carried by Landlord and such other named insureds shall be excess and non-contributory with respect to any policies carried by Tenant. (c) Upon demand, Tenant shall provide Landlord, at Tenant's expense, with such increased amount of existing insurance, and such other insurance in such limits, as Landlord may require and such other hazard insurance as the nature and condition of the Premises may require in the sole judgment of Landlord, to afford Landlord and additional insureds designated by Landlord adequate protection for said risks. (d) Landlord makes no representation that the limits of liability specified to be carried by Tenant under this Article 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 t: 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 F3M&M11t2MM1%21469%.1 as+Iun -17- l• naives 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 telow. SECTION 9.2 MhNT' S TNDMCITTY. 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 cr 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 cr 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. ARTICLE X. DAMAGE OR DESTRUCTION SECTION 10.1 RESTORATION. (a) In the event the Building is damaged by fire or other perils covered by extended coverage insurance to an extent not exceeding twenty-five percent (25%).of the full insurable value thereof and if the damage thereto is such that the Building may be repaired, reconstructed or restored within a period of ninety (90) days from the date of the happening of such casualty and Landlord will receive insurance proceeds sufficient to cover the cost of such repairs, Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration and the Lease shall continue in full force and 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 (25%) of the full insurable value thereof or if said insurance proceeds will not be sufficient to cover the cost of such repairs, Landlord may either elect to so repair, reconstruct or restore and this Lease shall continue in full force and effect, or Landlord may elect not to repair, reconstruct or restore and the Lease shall in sach 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. fsasuwI412M I12146 se.1 AVIMS .18. (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 (L) 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 ty 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 Puilding when the damage occurs during the last twenty-four (24) nonths 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 tusiness 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. SECTION 10.2 LAONDL:RD'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 r:rsuauna000iui�aoga-t awl"s -19 - 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. ' y 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 TE An•T'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 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 snide 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 fz13931414 OODD2140M.s 1=9195 -2 0 - M covering the Premises, Tenant shall attorn to the purchaser upon any such foreclosure cr sale and recognize such purchaser as the Landlord under this Lease. SECTION 12.2 ESTOPPEL CER11FI=. 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 ro existing offsets and no right of offset against Landlord, and (iv) certifying that Tenant has accepted possession of the Fremises. 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 RIII. DEFAULTS AND RE=IES SECTION 13.1 TENANX'SIEFAULTS. 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 oE, and not in addition to, any notice required under California Code of Civil Procedure Section 1161 Ct sev. For purposes of these default and remedies provisions, the term "additional rent' shall be deemed to include all amounts of any type whatsoever other than basic annual rent to be paid by Tenant pursuant to the terms of this Lease. '• (c) Use of the Premises for any purpose other than as authorized in this Lease. (d) Assignment or sublease of this Lease or of any interest therein by Tenant, either voluntarily or by operation of law ,`. (including transfer by testacy or intestacy), whether by judgment, execution, or other means, without the prior written consent of Landlord. (e) The failure cr 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, i 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 Ct sea. (f) (i) The making by Tenant of any general assignment for the benefit of creditors; (ii) a case is commenced by or against Tenant under Chapters 7, 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 rs:�uw�a:a000�u��svvs.� .nu�ons -21- discharged within thirty (30) days; or (v) Tenant's convening of a rieeting of its creditors or any class thereof for the purpose of effecting a moratorium upon or composition of its debts. . s SECTION 13.2 IMRD' S _H LIES . (a) In the event of any default by Tenant, then, in addition to any other remedies available to Landlord at law 'or in equity, Landlord may exercise the following remedies: (i) Landlord may terminate this Lease and all rights of Tenant hereunder by giving written notice cf 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, tut 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 (1i) above, the "worth at the time of award" shall be computed by allowing interest at the maximum rate permitted by law. As used in subparagraph (iii) above, the •worth at the time of award* shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (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 tire 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. y �1 (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 -eater 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 additicnal rent reserved in this Lease for such period, unless Landlord or Tenant shall prove to the contrary by competent evidence. The various rights, powers and remedies reserved to Landlord herein, and those rights, powers and remedies of Landlord under any other agreement now or hereafter in force between Landlord and Tenant, including those not specifically described herein, shall be cumulative, and, except as otherwise provided by California statutory law in effect at the time, Landlord may pursue any or all of such rights and remedies, at the same time, or otherwise. (c) No delay or omission of Landlord to exercise any right or remedy shall be construed as a waiver of any such right or remedy or of any default by Tenant hereunder. The acceptance by Landlord of rent or any additional rent hereunder shall not be (i) a waiver of any preceding breach or default by Tenant of any provision thereof, other than the failure of Tenant to pay the particular rent or any additional rent accepted, regardless of Landlord's knowledge of such preceding breach or default at the time of acceptance of such rent or additional rent, or (ii) a waiver of Landlord's right to exercise any remedy available to Landlord by virtue of such breach or default. No payment by Tenant or receipt by Landlord of a lease= amount than the rent herein stipulated shall be deemed to be other than on account of the earliest due stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy in this Lease provided. Tenant hereby waives any right of redemption or relief from forfeiture under California Code of Civil Procedure Sections 1174 or 1179, or under any other present or future law, in the event Tenant is evicted or Landlord takes possession of the Premises by reason of any default by Tenant hereunder. No act or thing done by Landlord o= 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. SEC!'ION 13.3 INTEREST ON TENANT'S OBLIGATIONS! LATE PAy*—V,ITc (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 suers due hereunder will cause Pscu93w34120- 1%2146M.1 SWIM -23- Landlord to incur costE not contemplated by this Lease, the exact ' amount of which will be extremely difficult to ascertain. Such ' costs may include, but are not limited to, administrative, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any mortgage or trust deed covering the premises. Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee within five {5} days after the date due, then Tenant shall pay to Landlord, in addition to the interest provided • above, a late charge in the amount of - five percent (5%) of the delinquent installment of rent. The parties agree that such late charge represents a fair 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 o! 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 rest 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 Fecurity deposit required under Section 3.2 as listed in Item S of the Basic Lease Provisions by one hundred percent (100%), which additional security deposit shall be retained by Landlord, and may be applied by Landlord, in the manner provided In Section 3.2. SECTION 13.4 RIgHT OF LANDLORD TO PERFORM. All covenants and agreements to be performed by Tenant under any of the terms of this Lease shall be performed by Tenant at Tenant's sole cost and expense and without any abatement of rent. If Tenant shall fail to pay any sum of money, other than rent, required to be paid by it hereunder or shall fail to perform any other act on its part to be performed hereunder, or to provide any insurance or evidence of Y. 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, s but shall not be obligated so to do, and without waiving or ' releasing Tenant from any obligations of Tenant, make any such payment or perform any such act on Tenant's part to be made or ' performed as provided in this Lease or to provide such insurance. Any payment or performance of any act or the provision of any such insurance by Landlord on Tenant's behalf shall not give rise to any ' responsibility of Landlord to continue making the same or similar payments or performing the same or similar acts. All costs, expenses and other sums incurred or paid by Landlord in connection therewith, together with interest at the maximum rate permitted by • law from the date incurred or paid by Landlord shall be deemed to be additional rent hereunder and shall be paid by Tenant with and • at the same time as the next monthly installment of basic annual i,• rent hereunder, and any default therein shall constitute a breach o; the covenants and ccnditions of this Lease. •, SECTION 13.5 PMMT BY LANni�. Landlord shall not be • ;K deemed to be in default -in the performance of any obligation required to be performed by it under this Lease unless and until it • `'' : ' h-ts 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 o= 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 • etiuum��rla000�uiwsss. .oari9ns - 2 4 - • 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. L- Tenant hereby waives, to the extent waivable under law, any right . - to satisfy said money judgment against Landlord except from Incore received by Landlord for the operation of the Building. SECTION 13.6 EXP ISESAti'D�Z< .F� 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 in 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 24.1 H=INO OVER. This Lease shall terminate and ' tecome 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 cr 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 (lot) 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 r monthly installments thereof, shall be one hundred fifty percent (1501) of that payable at the date of expiration. SECTION 14.2 SURHMER OF PREMISES, REMOVAL OF PROPER'X. Upon the expiration of the term of this Lease, or upon any earlier termination of this Lease, Tenant shall quit and surrender possession of the Premises to Landlord in as good order, condition and repair as when received or as hereafter may be improved by Landlord or Tenant, reasonable wear and tear and repairs which are `. Landlord's obligation excepted, and shall, without expense to ' Landlord, remove or cause to be removed- from the Premises all debris and rubbish, all furniture, equipment, and trade fixtures, free-standing cabinet wcrk 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. r SECTION 14.3 AEE XED PROPERTY. All fixtures, equipment, alterations, additions, improvements and/or appurtenances attached to or built into the Premises prior to or during the term hereof, F32Uuw1412"W1g14" a.1 swit»s -25- 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, holding, 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 it 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 'M Tenants shall be deemed as service upon all of them. ARTICLE XVI. RULES AND REGULATIONS The Rules and Regulations attached hereto as Exhibit 'B' 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 ray 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 and/or any parking area) good order, ` cleanliness of the Premises, Building and/or the Project, or portions thereof. Such rules and regulations. however, shall provide for the Parking Area to be open for use at least between '. the hours of 7:00 a.m. and 6:00 p.m., Monday through Friday, and between the hours of 8:00 a.m. and 12:00 p.m. on Saturday, except those legal holidays designated by Landlord. Landlord shall -not be liable to Tenant for any violation of such Rules and Regulations or ' i^•. the breach of any covenant or condition in any lease by any other tenant. One or more waivers by Landlord of any breach of such Rales and Regulations by Tenant or by any other tenants) shall not be a waiver of any subsequent breach of that rule or any other. In " the case of any conflict between such Rules and Regulations and this Lease, this Lease shall control. - ARTICLE XVII. BROKER'S CODNISSION ;- 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 harmaess from any cost, expense or liability s31%38%014 WD1%2140%_t.o/1"S -26- (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. INTERPRETATION SECTION 19.1 GEND.FR AND IM ER. 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 +MDINGS. 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. EXEC[TTION AND RECORDING SECTION 20.1 COR292= AMOORITY. 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 re:rsest, deliver a certified copy of its board of directors' resolution authorizing or ratifying such execution. SECTION 20.2 REMFQTM. 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 fora:' memorandum of this Lease for recording purposes. SECTION 20.3 AM.M%1_7N-rS. No amendment, addition, revocation or ratification of this Lease shall be effective unless in writing signed by the parties hereto. No actions, policies, oral or informal arrangements, business dealings or other course of conduct by or between the parties shall be deemed to amend this Lease or revise this Lease in any respect. ARTICLE XXI. M.ISCELLANEODS SECTION 21.1 TER -VS. 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 vhall 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 term hereof to the independent accountants who audit its financial MU13NO34 OD0312146996.1 mW19195 - 2 7 - 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 -FISHING¢P FINAN91_A,STATE ANTS. 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 shall promptly furnish Landlord, upon request, with annual financial •. statements reflecting Tenant's then current financial condition throughout the term of this Lease. SECTION 21.3tA1:GE5 REQUESTED BY LEl�'DaR, If, in connection with obtaining financinc 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 r2OM •MEA'TAL REOUIREMS'NTS. Tenant Covenants at ;.• all times during the term of this Lease to comply with the requirements of the Occupational Safety and Health Act of 1970, 29 U.S.C., Section 651 et seq., and any analogous legislation in California (collectively, the "Act•), to the extent that the Act :. applies to the Premises and any activities therein, and to comply with all other Governmental Requirements, including, but not 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 •' •4 , from time to time be present upon the Premises. SECTION 21.5 COVEKWrS Ah'D 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 JMRF LETTER. Landlord and Tenant each agree to fully perform their obligations under the Work Letter, if any. Any default by either party in the performance of its obligations under the Work Letter shall constitute a default by such party trader this Lease. SECTION 21.7 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 SU{' ZSSORs. 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. . -r.,.- psrill7Wtai240a0R2faa9961.m11+n! -28- v SECTION 21.9 TI12: 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 CO`,�M0"ING LAW. This Lease shall be governed by and interpreted in accordance with the laws of the State of ' California. ' SECTION 21.11 JMMRABILM. If any term or provision of this .} Lease shall be held invalid or unenforceable to any extent, the remainder of this Lease shall not be affected thereby and each term and provision of this Lease shall be valid and enforceable to the fullest extent permitted by law. ' SECTION 21.12 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 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- menta; 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, cr 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 'r 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 frog any obligations, including payment of - rent, under this Lease. :• _ SECTION 21,14 QUIET,PN_ZQX=. 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 perfortred, Tenant shall peaceably and quietly hold and enjoy the Premises for the term hereby demised without hindrance or interruption by.Landlord or any -other person or persons lawfully or equitably claiming by, through or under Landlord. SECTION 21.15 HAZF W Tenant shall not engage in any activity on or about the Premises or the Center 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 Liab�lity Act of 1980 ('CBRCLA•), 42 U.S.C. • Sections 9601 g•t =.; (ii) the Resource Conservation and Recovery Act of 1976 (*RCRA•), 42 U.S.C. Sections 6901 gt seer.; (iii) Fs:uuwuaaaooiuua+vs.r .ou�uss - 29 - California Health and Safety Code Sections 25100 rt =.; (iv) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code Section 25249.5 it A=.; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 g =.; (vi) California water Code Section 1300 g1 $eo.; and lvii) California Civil Code Section 3479 gt "., as such laws are amended and the regulations and administrative codes applicable thereto. The term OHazardous Material• includes, without limitation, any material or substance which is (i) defined or listed as a •hazardous waste•, 4extrenely 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 ft I=. 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 21.26 =IRS AGREE=. 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 iy 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. v3xuano14MW01%21""e.1 ao I"S - 3 0 - EXHIBIT "A-1". Prior to the execution of the Lease to which this Exhibit A-1 is attached, attach a floor plan(s) of the Building designating the location of the Premises. _EXHIBIT _"A-1' TO OFFICE SPACE LEASE Fs?+ns 14rXWW112146"6.1 aviwgs EXHIBIT "A-20 Legal,rescriptior_ 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 FSND%014r2 WWW14&M.1 .031I"3 ;t. EXHIBIT "A-3" Prior to the execution of the Lease to which this Exhibit •A- 3' is attached, attach a site plan of the Project as Exhibit •A-3•. TO OFFICE SPACE LEASE EXHIBIT "A-4' CONFIRMATION OF M= The undersigned as the Landlord and Tenant under that certain Office Space Lease dated , for space within the , Huntington, Beach,, California, hereby confirm that the term of said Lease has co=enced , and that the expiration date of the term of said Lease is ABDELb=A I DEVnLOPNR'NT COMPANY, a California general partnership By: A.hmad H. Abdelmuti, general partner Landlord• VISIONTEK INC., a corporation By: Its: 'Tenant' EXHIBIT •A-42 TO OFFICE SPACE LEASE V.-JUMIM.SDOOLU146996.1 @M/19195 EXHIBIT •B' In addition to the mutual covenants contained in the Lease to which this Work Letter is attached, Landlord and Tenant further mutually agree as follcws: 1. PLANS AND SPECIFICATIONS FOR THE PREMISES (a) Tenant agrees to cooperate with Landlord's architects and engineers, who shall prepare detailed space plans and specifications for the Premises which shall include, but' not be limited to, locations of doors, partitioning, reflected ceiling, electrical fixtures, outlets and switches, telephone outlets, plumbing fixtures, extraordinary floor loads, and the other special requirements, and Tenant shall approve such space plans in writing on or before the Space Plan Approval Date set forth in the item 6 of the Basic Lease Provisions. Tenant may have its own architect prepare space plans and specifications at its expense and shall furnish a copy to Landlord at least ten (10) days prior, to the Space Plan Approval Date. If Tenant does so, Landlord shall have the right to approve same on or before the Space Plan Approval Date. and Landlord shall be entitled in all respects to rely upon all plans, drawings, and information so supplied by Tenant. All working drawings shall be prepared at Landlord's expense by Landlord's architect or engineer. The working drawings shall include architectural, mechanical, electrical and structural engineering drawings for Building Standard 'Work as described in Paragraph 2 hereof. (b) Tenant may require work (hereinafter referred to as "Non- Building Standard Work') different from or in addition to Building Standard Work as described in Paragraph 2 hereof. In such event, any architectural, mechanical, electrical and structural engineering drawings, plans and specifications required shall be prepared by Landlord's architect or engineer at Tenant's expense and shall be subject to the approval of Landlord. (c) If Tenant selects interior finish items, such as wall paint, or coverings, fixtures and carpeting other than Landlord's Building Standard, Tenant shall notify Landlord of all such selections in writing by the date specified in the Schedule of Approvals below. All interior decorating items and services selected by Tenant in excess of Building Standard shall be provided by Tenant at Tenant's sole cost and expense. (d) All plans, specifications and drawings referred to hereinabove•in subparagraphs (a) and (b) of this Paragraph 1 are subject to Landlord's approval, which approval shall not be unreasonably withheld.. (e) Tenant's plans and specifications shall not be in conflict with the building codes for the City of Costa Mesa or with insurance regulations for a fire resistive Class A building. All plans and specifications shall be in a form satisfactory to appropriate governmental authorities responsible for issuing permits and licenses required for construction. (f) Whether and to the extent which any of Tenant's requirements constitute Non -Building Standard Work or otherwise exceed Building Standard shall be determined by Landlord's architect or engineer, which determination shall be conclusive. EXHIBIT "B• TO OFFICE SPACE LEASE' Fsiu23w14n04001%2["9 e.1 .Wn"m Page 1 2 . BUILDING STA.'�ZDARD WORK AT LANI]LORD' S COST AND EXPENSE (a) Landlord agrees, at its sole cost and expense, to furnish and install all the following Building Standard Work. but only in the quantities specified by Landlord, as indicated on Tenant's final approved plans and specifications: (i) Partitions The interior partitions will be 3-3/4' nominal thickness, consisting of two (2) 5/80 thick gypsum boards, one each attached to each side of 2-1/2' metal studs and resilient base. One ' (1) linear foot of interior partition will be provided per twelve (12) square feet of 'Occupied Area' (as hereinafter defined). In addition to interior partitions, Landlord will ' provide one (1) demising partition per suite. (ii) Doors, Door Frames and Hardware Solid core oak doors with painted -aluminum frames. One (1) door and frame per three hundred fifty (350) square feet of Occupied Area. One (1) entry door per Premises if Premises is less than three thousand (3,000) ;;. sq•.tare feet of Occupied Area. Two (2) entry doors per Premises for Premises greater than three thousand (3,000) square feet of Occupied ` Area. Two (2) pairs of butt hinges and Building Standard latchset included with each door, except entrance door, which has lockset. s (iii) Painting All wall surfaces except doors finished with ` two (2) coats latex flat paint in one (1) color to be selected by Tenant from Building Standard selection. (iv) Ceilings Suspended 2' x 2' regular acoustical ceiling grid with fissured tiles throughout the Premises, except in passenger and service elevator lobby areas, and public restrooms, where Landlord may choose to specify other types of materials. (v) Lighting Fixtures J ' 2' x 4' three (3) tube 40-watt recessed :,.. fluorescent return air lighting fixtures with multi -cell parabolic lenses. One (1) fixture -• ",;. per one hundred (100) square feet of Occupied Area, including one (1) electrical wall light switch per three hundred (300) square feet of Occupied Area. (vi) Electrical System Electrical service usage shall nct exceed three (3) watts per square foot of Occupied Area, of which two (2) watts per square foot - �..:.'. shall be for fluorescent lighting requirements at 277 volts and one (1) watt per square foot for receptacles of 110 volts. EXHIBIT 'B' TO OFFICE SPACE LEASE F3tu13wI4VJ0-(WIUIWM.1 NMI"$ Page 2 (vii) Duplex Electrical Outlets One (1) duplex electrical wall convenience outlet per one hundred fifty (150) square feet of Occupied Area. (viii) Telephone Outlets One (1) telephone wall outlet per two hundred (2C0) square feet of Occupied Area. (ix) Carpeting Carpeting in elevator lobbies and coon corridors on all multiple -tenancy office flcors in color and type as selected by Landlord; carpeting within office space as required and selected by Tenant from Building Standard selection. (x) Window Coverings Horizontal one inch (111) mini -blinds on all exterior office windows in color and type selected by Landlord. (xi) Heating, Ventilating and Air Conditioning The HVAC system is a variable volune system. Landlord will install one (1) control zone per eight hundred (800) square feet of Occupied Area and one (1) thert:ostat per zone. (xii) Life/Safety Speakers One (1) life/safety speaker per three thousand (3,000) square feet of Occupied Area will be provided or at least one (1) speaker per Pre.'nises where Premises is less than three th7isand (3,000) square feet of Occupied Area. (xiii) Fire Sprinklers One (1) recessed type head with white enamel finish per one hundred fifty (150) square feet of Occupied Area. (xiv) Exit Signs ' Minimum of one (1) exit sign per premises. Additional exit signs shall be provided in accordance with building codes. (b) The term 00ccupied Area' shall mean the Rentable Area of the Premises, less the area of elevator lobbies, public corridors, public restrooms, mechanical rooms, electrical rooms, telephone closets and other common areas of the Building and vertical penetrations not constructed or provided for the EFecial use of Tenant. Landlord's architect shall determine and certify the Occupied Area of the Premises. 3. NON -BUILDING STANDARD WORK AT TENA.'�'T'S COST AA'D EXPENSE (a) Provided Tenant's plans and -specifications are approved not later than the time provided hereinabove in Paragraph 1, Lardlord shall cause Tenant's Nan -Building Standard Work to be installed by Landlord's contractor, but at Tenant's sole cost and expense. Prior to commencing any such Non -Building Standard Work, Landlord shall submit to Tenant a written estimate of the cost thereof. If Tenant approves such EXHIBIT "B" 10 OFFICE SPACE LEASE F3700*14SMOD0117u6oa6.1 AMI"7 Page 3 estimate, it shall notify Landlord in writing within the time limit specified on the Schedule of Approvals below and, at the same time, pay Landlord in full the amount of such estimate and Landlord's contractor shall proceed with such work. If Tenant shall fail to approve any such estimate in writing within the time limit specified on the Schedule of Approvals below, such failure shall be deemed a disapproval thereof, and Landlord's contractor shall not proceed with such work or the . Building Standard Work affected thereby. It is understood • that Tenant shall thereupon be liable for the delay and increased cost, if any, in completing the affected Building ' Standard Work. Tenant shall also be responsible for the ,- design, function and maintenance of such special improvements, whether or not installed by Landlord at Tenant's request. (b) Tenant agrees to pay Landlord, as set forth above, the cost of all such Non -Building Standard Work. Such cost shall include Landlord's contractor's charges. In addition, Tenant shall pay Landlord fifteen percent (15%) of such cost for Landlord's overhead and coordination of the work. 4. SUBSTITUTIONS AA'D CREDITS (a) Provided Tenant's plans and specifications are approved not later than the time provided hereinabove in Paragraph 1, except for exterior window draperies, Tenant may select different materials (hereinafter ■substituted materials•) in place of Building Standard materials which would otherwise he initially furnished and installed by ' Landlord in the interior of the Premises under the provisions of this Work Letter, provided such selection is indicated on Tenant's complete plans and specifications as approved by Landlord. If Tenant shall make any such selection and if the cost of the substituted materials shall exceed Landlord's cost of Building Standard materials thereby replaced, Tenant shall pay to Landlord, as hereinafter provided, the difference between the cost of the substituted materials and the credit given by Landlord for the materials thereby replaced, plus a fee of fifteen percent (15%) of such difference, for ;�.. Landlord's additional costs resulting from such substitution. (b) No substituted materials shall be furnished and installed in replacement for any Building Standard materials until Landlord has submitted to Tenant a written estimate of •- the increased cost thereof, and Landlord and Tenant have agreed in writing on the increased cost of the substituted materials, including the Cost of installation. If Tenant approves such estimate, it shall notify Landlord in writing within the time limit specified in the Schedule of Approvals >; below and, at the same time, pay Landlord in full, the anon: t ;,.. of such estimate and Landlord's contractor shall proceed with such work. If Tenant shall. fail to approve such estimate r�. within said time limit, such failure is to be deemed a disapproval thereof and Landlord's contractor shall not : proceed with the proposed substituted work or with the Building Standard Work affected thereby. Tenant shall -r'•= thereupon also be liable for the delay and increased cost, if any, in completing the affected Building Standard Work. .yl (c) All amounts payable by Tenant to Landlord pursuant to this Paragraph 4 shall be paid by Tenant as set forth above or, at Landlord's option, promptly after the rendering of . ;.;_. bills therefor by Landlord or its contractor to Tenant, it being understood that such bills may be rendered during the - - progress of the performance of the work and/or the furnishing and installation of the materials to which such bills relate. Any substituted materials shall be surrendered by Tenant to Landlord at the end of the initial or other expiration of the term of the Lease. No credit shall be granted for the ' omission of materials where no replacement in kind is made. There shall be credits only for substitutions in kind, e.g., EXHIBIT, ■B. ' TC OFFICE SPACE LEASE ' F51U83%0j412"M112140%A ,M,»ros Page 4 a lighting fixture credit may be applied only against the cost of another type of lighting fixture. S. COMPLETION AND RENTAL COM.%IENCEM= DATE The Commencement Date of the Lease as set forth in Article 1 of the Lease shall not be delayed by any of the following and the following shall be deemed delays caused by Tenant for purposes of Section 3.2 of the Lease: (a) Tenants failure to approve or furnish its apace • ti . y plans and specifications by the time specified in the Schedule • of Approvals, below, or ' (b) Delays of any nature, whether or not within Tenant's control, resulting from Tenant's decision to use any materials, finishes, or installations other than Building Standard, or (c) Tenant's changes - in its space plans and specifications after the approval or submission thereof to Landlord, or (d) Other changes in the Ron -Building Standard Work or substitutions for the Building Standard materials made after f• the deadlines for notification thereof as set forth in the Schedule of Approvals below, or (e) A delay in performance of Building Standard Work as =� a result of Tenant's failure to approve written estimates of the costs of Rcn-Building Standard Work or substituted ' materials in accordance with Paragraphs 3 and 4 hereof. 6. CHANGES IN THE WORK _ Once the space plans and specifications are approved, Tenant -�•. shall have the right to request of Landlord that changes be made to the work, but only as provided in this Section 6. landlord agrees not to withhold its approval to any such changes. Tenant shall be responsible for the cost of any such changes together with Landlord's fee of fifteen percent (15%) as provided in Paragraph 3(b). Prior to commencing any such changes, Landlord shall submit to Tenant a written estimate of the cost thereof. If Tenant approves such estimate, it shall notify Landlord in writing within three (3) business days following the date Landlord submits the written cost estimate to Tenant and, at the same time, pay Landlord in full the amount of such estimate, and Landlord's contractor �'• shall proceed with such work. If Tenant, shall fail to approve any such estimate in writing within the three (3) business day period, such failure shall be deemed a disapproval thereof, and Landlord's contractor shall not proceed with any such changes but shall continue with the work as though the changes had not been requested. Tenant may at its election waive the requirement that Landlord provide the cost estimate. If Tenant shall request any change without notifying Landlord or if Tenant waives the ' �.�'.• requirement that Landlord provide the cost estimate, Tenant shall pay for the actual cost of the changes together with Landlord's fee. Nothing herein shall be deemed to excuse Tenant from the consequences of its default in failing to notify Landlord of the ' requested changes. 7. SCHEDULE OF APPROVALS Tenant shall approve the matters listed in the •Event• column below by the corresponding time specified in the •Time• column as • follows. EXHIBIT �' ' TC OFFICE SPACE LEASE F"IM014924000M146 %.1 .MMS Page 5 v Event a. Space Plan Approval Date, (See Paragraph 1(a).) b. Deadline for notifying Landlord of Tenant's selection of Non-Euilding Standard materials. (See Paragraph 1(c).) C. Deadline for Tenant's approval of Landlord's cost estimate for Non - Building Standard Work and payment for same. (See Paragraph 3(a).) d. Deadline for notifying Landlord of Tenant's request for substitution for the Building Standard materials. (See Paragraph 4(a).) e. Deadline for Tenant's approval of Landlord's estimate of increa3ed cost of substituted materials and payment for same. (See Paragraph 4(b).) Time As specified in Item 6 of the Basic Lease Pro- visions. Twenty (20) days after Space Plan Approval Date. Seven (7) days after Tenant's receipt of cost estimate from Landlord. Twenty (20) days after Space Plan Approval Date. Seven (7) days after Tenant's receipt of cost estimate from Landlord. EXHIBrT_'D• TC OFFICE SPACE LEASE P5_VZ3*349M0W3%2140%.j AMI"s Page 6 EXHIBIT •C• V Mog M• l• : • Je •!, O 44000 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 written consent of Landlord. (2) No awnings or other projection shall be attached to the outside walls of the Building or to balconies without the prior written consent of Landlord. No ranging 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, Bash doors, skylights, windows and doors that reflect or admit light and air into the halls, passageways or other yublic 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. M 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 stall 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 -NCR TO OFFICE SPACE LEASE M0014MOM112149%.1 8019193 Page 1 curring or 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 of f ix 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,e otfice, 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 prerrdses 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. (la) Except with Me 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. (111 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, MUTT Oct, TO OFFICE SPACE LEASE f32uLAOM20- IX2140%.1 .mamas Page 2 V k�,Wl 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 eupplied 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 cr substance in the Premises, or permit or suffer the Premises to to occupied or used is a manner offensive or objectionable to Landlord or other occupants of the Building by reason of noise, cdors and/or vibrations, or interfere in anyway with other tenants cr 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 noti!ied 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 sates, 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 saes 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 erployed 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 aad 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 1:00 a.m. to 6:00 p.m, Monday through Friday. EXHIBIT "C• TO OFFICE SPACE LEASE ra= OMMA4MV40M.1 &WIMss 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 6:00 p.m. and 7:00 a.m., access to the Building or to ` the halls, corridors, elevators or stairways in the Building, or to the Premises may be refused unless the person seeking access is known to the building watchman, if any, in charge and has a pass or is properly identified. Landlord shall in no case be liable for damages for the admissicn to or exclusion from the Building of any person whom Landlord has the right to exclude. Each tenant shall be responsible for all persons for whom he requests after hours access and shall be liable to Landlord for all acts of such persons. In case of invasion, mob, riot, public excitement, or other commotion, Landlord reserves the right but shall not be obligated to prevent access to the Building during the continuance of the same by closing the doors or otherwise, for the safety of ' the tenants and protection of property in the Building. ' (21) All doors opening into public corridors shall be kept closed, except when in %use for ingress and egress. Tenants shall see that the windows, transoms and doors of their premises are closed and securely locked before leaving the Building. (22) The requirements of tenants will be attended to only upon ' application to the manager of the Building. (23) Canvassing, soliciting and peddling in the Building are prohibited and each tenant shall cooperate to prevent the same. (24) There shall not be used in any space, or in the public halls of the Building, either by any tenant or others, any hand •. ;.' trucks except those equipped with rubber tires and side guards. (25) No vending or coin operated machines shall be placed by any tenant within his prey-ises without the prior written consent of Landlord. -• ' '' ` - EXHIBIT "C"_ _ TO OFFICE SPACE LEASE MUM014VO-Miu146996.1 &WIMs Page 4