HomeMy WebLinkAboutClearview Capital Corporation/Abdelmuti Development Company - 1997-05-05Council/Agency Meeting Held: 4
Deferred/Continued to:
WrApp ved 0 Conditional y Approved O Denied
City erk's Signature
Council Meeting Date: May 5, 1997
Department ID Number. ED 97-12
CITY OF HUNTINGTON BEACH
REQUEST FOR REDEVELOPMENT AGENCY ACTION
SUBMITTED TO: Honorable Agency Chairman and Agencc�yMembers
SUBMITTED BY: Michael T. Uberuaga, City AdministratorI
PREPARED BY: David C. Biggs, Director of Economic Development
SUBJECT: Approval of Lease -- Clearview Capital Expansion In Oceanview
Promenade
Statement of Issue, Funding Source, Reconrnended Action, Alternative Action(s), Analysis, Environmental Status, AttacMnentm
Statement of Issue: The Owner Participation Agreement witItthe Abdelmuti Development
Company requires the Agency to subsidize the difference between the Guaranteed Rental
Rate and the amount of actual rents collected for a portion of the office space in the
Oceanview Promenade building. The Agreement requires Agency review of all leases.
Funding Source: Redevelopment Tax Increment
Recommended Action: Motion to: Approve as to form the attached lease between
Clearview Capital Corp. and Abdelmuti Development Company for office space within the
Oceanview Promenade.
Altemative Action(s): Do not approve the lease.
..�N
0
REQUEST FOR REDEVELOPMENT AGENCY ACTION
MEETING DATE: May 5, 1997 • DEPARTMENT ID NUMBER: ED 97-12
Analysis: On May 28, 1991, the Redevelopment Agency entered into an Owner
Participation Agreement (OPA) with Abdelmuti Development Company for the development
of a three story, 42,000 square foot mixed use development which was subsequently
amended in November 1991, approving a fourth story and a 'Guaranteed Rental Rate' for a
portion of the office space.
The Agency's obligation is based on the rent collected from office space on the second floor
and one-half of the third floor, approximately 20,600 square feet in total. If actual rents are
less than the guaranteed rate, the Agency pays the difference. The attached lease
represents the last remaining vacant space in that portion of the building subsidized by the
Agency. Because this space has been vacant since construction, approval of this lease will
create new revenue ($3,148/mo. or $37,775/yr.) towards the Guaranteed Rent and reduce
the Agency's payments by a concomitant amount..
Clearview Capital Corp. is a current tenant in Oceanview Promenade and this lease
represents its second expansion on site. The lease is identical to those previously approved
by the Agency and its important to note that the Agency's approval is solely `as to form.' The
Agency is not a party to the lease.
Environmental Status: N/A
Attachment(s):
Clearview Capital Corp. Lease
CLRVURAA.DOC -2- 25.04.97 3:17 PM
AUTHOR: Ima User
OFFICE SPACE LEASE
between
ABDELMUTI DEVELOPMENT COMPANY,
a California general partnership
AS LANDLORD
and
CLEARVIEW CAPITAL CORPORATION,
a California corporation
AS TENANT
SUITE 2E
OLEARVIEW PROMENADE
HUNTINGTON BEACH, CALIFORNIA
26710148:0.000113050557.2 43101197
L Q
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 IJID ADDRESS . . . . . . . . .
3
ARTICLE II.
TERM
. . . . . . . . . . . . . . . . . . . . . .
4
SECTION
2.1
GENERAL . . . . . . . . . . . . . . . . . .
4
SECTION
2.2
TENDER OF POSSESSION BY LANDLORD . . . . .
4
SECTION
2.3
OPTION TO EXTEND TERM . . . . . . . . . . .
4
SECTION
3.1
BASIC ANNUAL RENT . . . . . . . . . . . . .
5
SECTION
3.2
SECURITY DEPOSIT . . . . . . . . . . . . .
5
SECTION
3.3
OPERATING EXPENSES . . . . . . . . . . . .
6
ARTICLE IV.
USES
. . . . . . . . . . . . . . . . . . . . . .
9
SECTION
4.1
USE . . . . . . . . . . . . . . . .
9
SECTION
4.2
PROHIBITION AGAINST SOLICITATION AND OTHER
ACTIVITIES WITHOUT THE PERMISSION OF
LANDLORD . . . . . . . .
10
SECTION
4.3
EXCLUSIVE CONTROL OVER.COMMON AREA . .
10
SECTION
4.4
SIGNS . . . . . . . . . . . . . . . ... . .
10
ARTICLE V. SERVICES . . . . . . . . . . . . . ... . .
10
SECTION
5.1
UTILITIES AND SERVICES . . . . . . . . . .
10
SECTION
5.2
OPERATION AND MAINTENANCE OF COMMON
FACILITIES . . . . . . . . . . . . . �. . .
11
SECTION
5.3
USE OF COMMON FACILITIES . . . . . . . . .
12
SECTION
5.4
PARKING . . . . . . . . . . . . . . . . . .
12
ARTICLE VI.
MAINTENANCE OF THE PREMISES . . . . . . . . . .
12
SECTION
6.1
TENANT'S MAINTENANCE AND REPAIR . . . . . .
12
SECTION
6.2
LANDLORD'S MAINTENANCE AND REPAIR . . . . .
13
SECTION
6.3
ALTERATIONS BY LANDLORD . . . . . . . . . .
13
SECTION
6.4
TENANT'S ALTERATIONS . . . . . . . . . . .
13
SECTION
6.5
MECHANIC'S LIENS . . . . . . . . . . . . .
14
SECTION
6.6
ENTRY AND INSPECTION . . . . . . . . . . .
14
SECTION
6.7
Intentionally omitted . . . . . . . . . .
15
ARTICLE VII.
TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
15
SECTION
7.1
TAXES ON TENANT'S PROPERTY . . . . . . . .
15
SECTION
8.1
PROHIBITION AND CONSENT . . . . . . . . . .
16
SECTION
8.2
NO RELEASE OF TENANT . . . . . . . . . . .
17
SECTION
8.3
TRANSFER FEE . . . . . . . . . . . . . . .
17
SECTION
8.4
AFFILIATE TRANSFER . . . . . . . . . . . .
17
ARTICLE IX.
INSURANCE AND INDEMNITY . . . . . . . . . . . .
18
SECTION
9.1
TENANT'S INSURANCE . . . . . . . . . . . .
18
SECTION
9.2
TENANT'S INDEMNITY . . . . . . . . . . . .
19
ARTICLE X. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . .
19
SECTION
10.1
RESTORATION . . . . . . . . . . . . . . .
19
SECTION
10.2
LANDLORD'S NON -LIABILITY . . . . . . . . .
21
SECTION
10.3
TENANT'S WAIVER . . . . . . . . . . . . .
21
ARTICLE XI.
EMINENT DOMAIN . . . . . . . . . . . . . . . . .
21
ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE . . . . . . 22
SECTION 12.1 SUBORDINATION . . . . . . . . . . . . . . 22
SECTION 12.2 ESTOPPEL CERTIFICATE . . . . . . . . . . . 22
ARTICLE XIII.
DEFAULTS AND
REMEDIES . . . . . . . . . . .
. 22
SECTION
13.1
TENANT'S
DEFAULTS . . . . . . . . . . .
. 22
SECTION
13.2
LANDLORD'S
REMEDIES . . . . . . . . . .
. 23
SECTION
13.3
INTEREST
ON TENANT'S OBLIGATIONS; LATE
PAYMENTS
. . . . . . . . . . .
. 25
SECTION
13.4
RIGHT OF
LANDLORD TO PERFORM . . . . . .
. 25
SECTION
13.5
DEFAULT BY LANDLORD . . . . . . . . . .
. 26
2671014820.000113050557.2 s04101197
SECTION 13.6 EXPENSES AND LEGAL FEES . . . . . . . . . 26
ARTICLE XIV.
END OF TERM . . . . . . . . . . . . . . . . .
26
SECTION
14.1
HOLDING OVER . . . . . . . .
26
SECTION
14.2
SURRENDER OF PREMISES; REMOVAL OF
PROPERTY
. . . . . . . . . . . . . . . . . . . . .
27
SECTION
14.3
AFFIXED PROPERTY . . . . . . . . . . . . .
27
ARTICLE XV.
NOTICES . . . . . . . . . . . . . . . . . . . .
27
ARTICLE XVI.
RULES AND REGULATIONS . . . . . . . . . . . . .
27
ARTICLE XVII.
BROKER'S COMMISSION . . . . . . . . . . . . .
28
ARTICLE XVIII. TRANSFER OF LANDLORD'S INTEREST . . . . . . .
28
ARTICLE XIX.
INTERPRETATION . . . . . . . . . . . . . . . .
28
SECTION
19.1
GENDER AND NUMBER . . . . . . . . . . . .
26
SECTION
19.2
HEADINGS . . . . . . . . . . . . . . . . .
28
ARTICLE XX.
EXECUTION AND RECORDING . . . . . . . . . . .. .
28
SECTION
20.1
CORPORATE AUTHORITY . . . . . . . . . . .
28
SECTION
20.2
RECORDING . . . . . . . . . . . . . . . .
29
SECTION
20.3
AMENDMENTS . . . . . . . . . . . . . . . .
29
ARTICLE XXI.
MISCELLANEOUS . . . . . . . . . . . . . .
29
SECTION
21.1
NONDISCLOSURE OF LEASE TERMS . . . . . .
29
SECTION
21.2
FURNISHING OF FINANCIAL STATEMENTS . . .
29
SECTION
21.3
CHANGES REQUESTED BY LENDER . . . . . . .
29
SECTION
21.4
GOVERNMENTAL REQUIREMENTS . . . . . . . .
29
SECTION
21.5
COVENANTS AND CONDITIONS . . . . . . . .
30
SECTION
21.6
WORK LETTER . . . . . . . . . . . . . . .
30
SECTION
21.7
JOINT AND SEVERAL LIABILITY . . . . . . .
30
SECTION
21.8
SUCCESSORS . ... . . . . . . . . . . . .
30
SECTION
21.9
TIME OF ESSENCE . . . . . . . . . . . . .
30
SECTION
21.10
CONTROLLING LA79 . . . . . . . . . . . . .
30
SECTION
21.11
SEVERABILITY . . . . . . . . . . . . . .
30
SECTION
21.12
RELATIONSHIP OF PARTIES . . . . . . . . .
30
SECTION
21.13
INABILITY TO PERFORM . . . . . . . . . .
30
SECTION
21.14
QUIET ENJOYMENT . . . . . . . . . . . . .
31
SECTION
21.15
HAZARDOUS WASTE, AND MATERIALS . . . . . .
31
SECTION
21.16
ENTIRE AGREEMENT . . . . . . . . . . . .
31
257ro1W.0-000MOS0557.2 aUsf0119?
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: CLEARVIEW CAPITAL CORPORATION, a California
corporation
2. Premises, including Floor, Suite No. and Rentable Area:
Second Floor, Suite 2E, approximately 2,171 rentable square
feet.
3. Estimated Commencement Date: May 1, 1997.
4. Lease Term: Five (5) years and one five (5) year option.
5. Basic Annual Rent: $37,775.40 payable at $3,147.95 per month.
6. Base Year Operating Expense: 1997.
7. Space Plan Approval Date: On or before ten (10) days after the
Date of Lease.
S. Security Deposit: $3,147.95; payable on execution of Lease.
9. Prepaid Rent: $3,147.95; payable on execution of Lease.
10. Broker (s) : None
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 sl
Tel.: (714) 536-6567
To Tenant: Clearview Capital Corporation
101 Main Street, Suite 3A
Huntington Beach, CA 92648
Attn: Patrick Magee
Tel.: (714) 374-1263
12. Minimum Coverage for Comprehensive General Liability Policy:
$2,000,000.00 combined single limit.
13. Addendum: An Addendum consisting of None (if no Addendum
is attached, insert the word none) numbered paragraphs is
attached to and forms a part of this Lease.
14. Rentable Area of Building: Approximately 47,000
rentable square feet.
15. Lease Execution: In witness whereof the parties hereto have
executed this Lease, consisting of the foregoing provisions
2671014820-000113050557.2 004101/97
�.1
and of -the Additional Lease Provisions and Exhibits which
follow, as of %� 1 AV%
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.
110 EMPLOYEE OR AGENT OF
LANDLORD OR ANY PERSON
WITH WHOM TENANT MAY HAVE
NEGOTIATED THIS LEASE HAS
ANY AUTHORITY TO MODIFY
THE TERMS HEREOF OR TO
MAKE ANY AGREEMENTS,
REPRESENTATIONS OR
PROMISES UNLESS THE SAME
ARE CONTAINED HEREIN OR
ADDED HERETO IN WRITING.
ABDELMUTI DEVELOPMENT COMPANY,
a California gener 1 ar ership
By: ,lt .
d del ti,
general artn r
"Landlord"
CLEARVIEW CAPITAL CORPORATION,
a Califo 'Lcooration
By:
Patr esic�ent
"Tenant"
MEMORANDUM OF ACTUAL COMMENCEMENT AND EXPIRATION DATES
Commencement Date: Expiration Date:
2671014VO-MO 3050Ssl.2 10410lM7 - 2 -
ADDITIONAL _LEASE _PROVISIONS
ARTICLE 1. PREMISES
SECTION 1.1 LEASED PREMISES. Landlord hereby leases to
Tenant and Tenant hereby hires from Landlord, subject to all the
terms and conditions hereinafter set forth, those certain premises
identified in Item 2 of the Basic Lease Provisions and shown in the
drawing attached hereto as' Exhibit "A-1" A 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-24 attached hereto. Said office
and retail structure is hereinafter called the "Building". Said
real property, - the Building, and other related improvements and
such additional buildings, and other related improvements as from
time to time may be constructed upon said real property are
hereinafter referred to as the "Project".
SECTION 1.2 ACCEPTANCE OF PREMISES. Except as provided
herein, Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to
the Premises, the Building and/or the Project, or the suitability
or fitness thereof for the conduct of Tenant's business ,or for any
other purpose, except as set forth in this Lease. The -taking of
possession or use of the Premises by Tenant for any purpose other
than construction shall conclusively establish that the -Premises,
the Building and the Project were at such time in satisfactory
condition and in conformity with the provisions of this Lease in
all respects, except as to any items as to which Tenant Ehall give
Landlord written notice in reasonable detail, which item: 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"
r(the - "Work Letter")'.. Such written notice shall be given within
thirty (30) days after the term of this Lease commences as provided
in Article II below. Failure to submit such written notice in the
time provided shall constitute a waiver thereof. Landlord shall
promptly take such action as may be reasonably required to remedy
any actual defects and/or to complete any work of which it is
notified as provided above.
SECTION 1.3 USE RESERVATIONS. Tenant acknowledges that the
exterior demising walls of the Premises and the area between the
finished ceiling of the Premises and the slab of the Building floor
or roof thereabove and between the finished floor of the Premises
and the foundation or finished ceiling of the portion of the
Building therebelow have not been -leased to Tenant. Landlord
reserves the use thereof, together with the right to locate or
relocate (both vertically and horizontally), install, maintain,
use, repair and replace pipes, utility lines, ducts, conduits,
flues, refrigerant lines, drains, sprinkler gains and valves,
access panels, wires and appurtenant meters or equipment, and
structural elements leading through, under or above the Premises in
locations which will not materially interfere with Tenant's use of
the Premises.
SECTION 1.4 BUILDING NAME AND ADDRESS. Landlord may adopt
any name it may select for the Building and/or the Project, and
Landlord reserves the right to change the name and/or address of
the Building and/or the Project at any time. Tenant shall not use
the name of the Building, the Project or such developmen- 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,
,
20014920.000113050557.2 a03101M - 3 -
EXHIBIT "A-3"
NF RMAT Pi F TERM
The undersigned as the Landlord and Tenant under that certain
Office Space Lease dated . for space within the
Huntington Beach, California,
hereby confirm that the term of said Lease has commenced
, and that the expiration date of the term of said .
Lease is
ABDELMUTI DEVELOPMENT COMPANY, a
California general partnership
By:
Ahmad H. Abdelmuti,
general partner
By=
Its:
By:
Its:
"Landlord"
"Tenant"
c
i-EXHIBIT *A=3"-
TO OFFICE SPACE LEASE
267/0148.a0001n050557.2 A04101197
ARTICLE II. TERM
SECTION 2.1 GENERAL. The term of this Lease shall ;%)e 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-31;
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 be liable to Tenant for any loss or damage resulting
therefrom. Notwithstanding the foregoing, in the event Landlord
has not tendered possession of the Premises to Tenant before the
date that is twelve (12) months from the estimated commencement
date as shown in Item 3 of the Basic Lease Provisions (subject to
events of force majeure or delays caused by Tenant), then Tenant
shall thereafter have the right to terminate this Lease by giving
written notice to Landlord.
SECTION 2.3 QPTJQN TO„EXTEND TERM. Tenant shall have one (1)
option to extend the term of this Lease for a period of five (5)
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 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 appointed 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 commercial
office leasing in the Huntington Beach area. Notwithstanding
anything in this section to the contrary, the basic annual rental
26V014826.O00117030557.2 00410IN7 - 4 - .'1
for the Extension Term shall not be reduced below the basic annual
rental in effect immediately preceding the arbitrator's decision.
ARTICLE III. RENT AND SECURITY DEPOSIT
r
SECTION 3.1 BASIC ANNUAL RENT. i•
(a) Tenant shall pay the basic annual rent for the Premises
in the total amount, but payable in the equal monthly installments,
shown in Item 5 of the Basic Lease Provisions, due and payable on
the first day of each month in advance, commencing on the
Commencement Date and continuing throughout the term of this Lease,
except that if the Commencement Date occurs on a day othe+ 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) Intentionally omitted.
(d) The basic annual rent is calculated on the basis of the
product of the rentable square feet of the Premises shown in Item
2 of the Basic Lease Provisions, multiplied by ONE AND_45/100THS
DOLLARS ($1.45). Following delivery of possession of the Premises
to Tenant and from time to time thereafter, at Landlord's option,
Landlord shall cause Landlord's architect to determine the actual
rentable square feet of the Premises, which determination shall be
binding upon Tenant. Tenant shall immediately pay to Landlord the
amount of any deficiencies in basic annual rent and all other
additional rent determined by the rentable square feet of the
Premises if the actual rentable square feet is greater.!than set
forth in Item 2 of the Basic Lease Provisions. Landlord shall
credit basic annual rent and additional rent next payable by Tenant
if the actual -rentable square feet is less than set forth in Item
2 of the Basic Lease provisions. The foregoing adjustments shall
be effective as of the Commencement Date.
(e) In the event that at any time during the term of this
Lease, any governmental law, rule or regulation prohibits or
postpones in whole or in part any increase in the rent or in the
payment of other sums payable by Tenant hereunder to be made
pursuant to this Lease, then, and in either of such events, such
increase or payment shall be made to the maximum extent permissible
by law at the time provided in this Lease, and/or at any time or
times thereafter such increase or payment, or any portion thereof,
may lawfully be made and any such increase in rent, or any portion
thereof, or other sums payable hereunder, or portions thereof, the
payment of which has been so prohibited or postponed, shall
thereafter become due and payable to the maximum extent and at the
earliest time or times permitted by law.
SECTION 3.2 SECURITY DEPOSIT. Tenant has deposited with
Landlord the sum stated in Item 8 of the Basic Lease Provisions, to
be held by Landlord as security for the full and 'faithful
performance of every Lease provision to be performed by Tenant. If
267101482M00113050557.2 .04101197 - 5 -
Tenant defaults with respect to any provision of this Lease,
including, but not limited to, the provisions relating to the
payment of rent, Landlord may (but shall not be required to) use,
apply or retain all or any part of this security deposit for the
payment of any rent or other sum in default, or for the payment of
any other amount which Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of
Tenant's default to the full extent permitted by law. If any
portion of said deposit is so used or applied, Tenant shall, within
five (5) days after written demand therefor, deposit cash with
Landlord in an amount sufficient to restore the security deposit to
its original amount. Landlord shall not be required to keep this
security deposit separate from its general funds, and Tenant shall
not be entitled to interest on such deposit. If Tenant shall per-
form every provision of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned -to Tenant
(or, at Landlord's option, to the last assignee ofTenant'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 cccordance
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 finds with
Landlord sufficient to increase the security deposit to,.an amount
which bears the same relationship to the adjusted basic annual rent
as the initial security deposit bore to the initial basic annual
rent.
SECTION 3.3 OPERATIM9 EXPENSES.
(a) In addition to paying basic annual rent, Tenant shall pay
to Landlord in installments, as provided in (b) below, the amount
by which Tenant's proportionate share of all "Operating Expenses"
(as hereafter defined) incurred by Landlord in the operation of the
Building, (including the Building's percentage of Operating
Expenses for the Project) exceeds Tenant's proportionate share of
the Operating Expenses incurred during the Base Year specified in
Item 6 of the Basic Lease Provisions ("Increase Operating Costs").
Such payments shall be deemed additional rent. Tenant's obligation
to pay its proportionate share of Increased Operating Costs shall
commence as of the beginning of the first full calendar year
following the Base Year. Tenant's proportionate share shall be
computed by dividing the "rentable area" of the Premises identified
in Item 2 of the Basic Lease Provisions by the total "rentable
area" of the Building. The term "rentable area" as used herein
with respect to the Premises, the Building and any other, building
within the Project (exclusive of parking structures) shall be
computed by measuring from the inside surface of the permanent
outer building walls. As long as the Building shall be comprised
of retail and office uses, Landlord may in its reasonable
discretion, segregate the retail rentable area from the office
rentable area and Tenant shall pay its proportionate share on such
rentable area as reasonably allocated and segregated by Landlord.
Specifically included within the definition of rentable area
shall be all area within the outside walls, air conditioning shafts
and ducts where a central air conditioning system eliminates floor
fan rooms, private stairs, private elevators, toilets, air
conditioning rooms, fan rooms, air ducts, janitor's closets, slop
sinks, electrical closets, telephone closets, and all ;enclosing
walls for the above items, all of which exclusively serve the floor
in which they are located, and columns and projections necessary to
the Building. The area of air conditioning and fan rooms located
on a rental floor serving more than the one floor in which located,
together with their enclosing walls, shall be apportioned and
included as rentable area of the floors which they serve.
Except as provided above, there shall be excluded from
rentable area building stairs, fire towers, elevator shafts, flues,
vents, stacks, pipe shafts and vertical ducts, with their enclosing
walls serving more than one floor, lobby, public vestibules, public
2571414824000IMM557.2 *Wffif47 -6-
telephone boots, ramps, loading docks and other public areas on the
first floor of the building. Rentable area for divided floors shall
include a proportionate share of public corridors, public toilets,
air conditioning rooms, fan rooms, air ducts, janitor's closets,
electrical closets, telephone equipment closets and their enclosing
walls.
Prior to the Commencement Date, and from time to time
thereafter, at Landlord's option, Landlord's architect shall
determine and certify in writing to Tenant and Landlord the actual
rentable area of the Building and other buildings in the Project,
which determination and certification shall be binding upon Tenant.
(b) Prior to the start of each calendar year of the lease
term following the calendar year during which this Lease is
executed, Landlord shall furnish to Tenant a written estimate of
the Operating Expenses and Tenant's proportionate share of the
Increased Operating Costs for the next calendar year or portion
thereof. In addition to Tenant's basic annual rent payments,
Tenant shall pay to Landlord the amount by which its proportionate
share of Operating Expenses exceeds Tenant's proportionate share of
the Operating Expenses incurred during the Base Year identified in
Item 6 of the Basic Lease Provisions in equal monthly installments,
in advance, together with the monthly installments of basic annual
rent.
within one hundred twenty (120) days after the end of each
calendar year, including the calendar year during which the lease
term commences, Landlord shall furnish to Tenant a .statement
showing in reasonable detail the actual Operating Expenses incurred
by Landlord during the previous year and Tenant's proportionate
share thereof. The parties shall adjust Tenant's ,estimated
payment, if any, to Tenant's actual proportionate share a6 shown by
such annual statement. Any amount due Tenant shall be credited
against installments next coming due under this Section 3.3, and
any deficiency shall be paid by Tenant in the next such
installment. Tenant agrees to accept as final and determinative
the amounts shown in such statement and hereby waives all claims
arising from such statement, except those for which a claim is made
by Tenant within six (6) months after Landlord has furnished such
statement to Tenant. Not more than once in any calendar year, upon
at least twenty (20) days prior written notice, Tenant may inspect
Landlord's books and records with respect to Operating Expenses
provided such inspection is promptly accomplished and does not
unreasonably interfere with the operation of Landlord's business.
Should there be any dispute with respect to either the Landlord's
written estimate of Tenant's share of Operating Expenses or the
year end statement showing actual Operating Expenses, Tenant shall
nevertheless pay its proportionate share of such expenses but may
contest the accuracy thereof in accordance with the terms set forth
above, and any failure to so pay shall constitute a default by
Tenant under this Lease.
(c) Even though the Lease term has expired and Tenant has
vacated the Premises, when the final determination is made of
Tenant's Increased Operating Costs for the year in which the Lease
terminates, Tenant shall immediately pay to Landlord the amount by
which such Increased Operating Costs exceeds the estimated payments
made by Tenant under (b) above. Any overpayment made toward
Tenant's Increased Operating Costs shall be promptly rebated by
Landlord to Tenant. Tenant's payment of Increased Operating Costs
shall be prorated for any partial calendar year on a per diem basis
in any reasonable manner selected by Landlord.
(d) Landlord may from time to time during any calendar year
re -estimate Operating Expenses and/or tenant's proportionate share
thereof to reflect changes in circumstances. In such event,
Landlord shall notify Tenant of the change and of the '4ffect of
such change on the amount of the monthly installments to be paid by
Tenant pursuant to (b) above. Commencing on the date specified in
such notice from Landlord, the monthly installment payable by
- i -
267101d8:0.000117050557.2 a03101197
Tenant under (b) above shall be adjusted as specified in such
notice.
(e) The term "Operating Expenses" as used herein shall
include all costs of operation, maintenance, management and repair
in a manner deemed reasonable and appropriate by Landlord, and
shall include the following costs by way of illustration but not
limitation; property taxes, including any taxes described in
paragraph (f) next below; general or special assessments; -costs and
expenses in contesting the amount or validity of any property tax
by appropriate proceedings; cost of casualty, liability and other
insurance and Landlord's personal property used in connection
therewith, including rental loss, earthquake (if available at
commercially reasonable rates) and/or other endorsements from time
to time deemed appropriate by Landlord; costs of all accounting and
professional fees; water and sewer charges; insurance premiums;
license, permit, and inspection fees, heat; steam; trash pick up,
janitorial and security services (provided Landlord shall not be
required to provide any particular type of security or liable for
any failure of security); supplies, materials; equipment; tools;
cost of repayment of equipment and all maintenance, service and
warranty agreements on equipment, including alarm service, building
mechanical equipment, window cleaning and elevator maintenance
(provided that Landlord may elect to depreciate the cost of
personal property used in the maintenance, operation, and/or repair
of the Building on a straight line basis and treat such
depreciation as an operating expense, in which event replacement
cost shall be reduced by the accumulated depreciation of the item•
replaced); amortization of capital investments (such costs to be
amortized over such reasonable period as Landlord may determine
with a return on capital of ten percent (10t) per annum on the
unamortized balance or at such higher rate as may have been paid by
Landlord on funds borrowed for the purpose of constructing such
capital improvements) required by governmental authority or that
produced a reduction in operating costs or which result in energy
conservation; labor, wages and salaries, fringe benefits and
payroll taxes for administrative and other personnel; a management
fee not to exceed current market rates, which may be payable to
Landlord; and any expense incurred pursuant to Sections 5.1, 5.2
and 6.2 below. The term "property taxes" as used herein shall
include all real estate taxes or personal property taxes.and other
taxes, charges and assessments used in connection with the
operation of the Building and/or the Project and the land upon
which they are situated, and any tax, surcharge or assessri�ent which
shall be levied in addition to or in lieu of real estate of
personal property taxes, other than taxes covered by Article VII.
The Operating Expense shall be extrapolated, if neceosary, to
reflect a completed Building with at least ninety-five percent
(95t-) occupancy of the rentable area thereof, a full year of
operating and a full year of occupancy by Tenant.
(f) Should the United States of America, the State of
California or any political subdivision thereof, or any
governmental authority having jurisdiction (by way of substitution
for all or any part of the "taxes" otherwise required to be paid in
whole or in part by Tenant pursuant to this Section 3.3 or Section
7.1, or in addition thereto) 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/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 deemed to constitute a tax
and/or assessment against the Building and/or the Project and shall
be included in Operating Expenses.
2671014820-0001/3050557.2 a04101197 — 8 — 1
(g) Notwithstanding the foregoing, Operating Expenses shall
not include expenses for which the Landlord is reimbursed (either
by an insurer, condemnor, tenant or otherwise); expenses incurred
in leasing or procuring tenants (including, without limitation,
lease commissions, advertising expenses, legal expenses, and
expenses of renovating space for tenants); legal expenses arising
out of disputes with tenants or the enforcement of the provisions
of any lease of space in the Building; interest or amortization
payments on any mortgage or mortgages; wages, salaries or other
compensation paid to any executive employees above the grade of
building manager; or the cost of any work or service performed for
or facilities furnished to a tenant at the tenant's costs; and
charges metered separately to other premises within the.Building.
To the extent that any of the expenses described in the -preceding
paragraph are partially excluded from Operating Expenses due to
reimbursement or payment of a portion thereof by a tenant of the
Building, or by tenants of other floors of the Building, Tenant's
proportionate share of the balance of such expense shall be
appropriately adjusted by excluding the rentable area leased to
such tenant or tenants for purposes of the computation required by
Section 3.3.
(h) In the event that Tenant's obligations for the payment of
basic annual rent is abated, in whole or in part, under Article X
or Article XI below, Tenant's share of the Increased Operating
Costs shall be reduced in proportion to the reduction in basic
annual rent during any applicable calendar year and Landlord may
make an appropriate adjustment to the estimated payment required by
(b) above for the period of any such rent abatement.
ARTICLE IV. USES
SECTION 4.1 USE. Tenant shall use and occupy the Premises
for general office purposes only and for no other use or purpose
without the prior written consent of Landlord, which consent
Landlord may withhold in its sole and absolute discretion. Tenant
shall not use or occupy the Premises in violation or in conflict
with any "Governmental Requirement" (defined below) but shall, at
Tenant's expense, promptly comply with all present and future laws,
ordinances, statutes, including without limitation the Americans
with Disabilities Act, orders, rules, restrictions, regulations and
requirements of all governmental authorities having jurisdiction
over the Premises whether or not the same is substantial,; foreseen
or unforeseen, ordinary or extraordinary, or whether the same shall
necessitate Tenant making structural changes or improvements to the
Premises or interfere with the use and enjoyment of the Premises
(herein collectively, "Governmental Requirements"). Tenant shall
not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of other ten-
ants or occupants of the Project or of property adjacent to the
Project, or injure or annoy them, or use or allow the Premises to
be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance or
commit any waste in, on or about the Premises or the Project.
Without limiting the generality of the foregoing, Tenant shall not
(i) obstruct or store anything in the common areas (including
service or exit corridors) , (ii) place a load upon any floor of the
Premises which exceeds the floor load per square foot which such
floor was designed to carry, or (iii) permit any objectionable
sound or odors to carry outside the Premises. In particular,
Tenant agrees that business machines and mechanical equipment used
by Tenant which cause vibration or noise that may be transmitted to
any other porticn 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
26710t4320-00etn050557_2 &04101 •r - 9 -
requirements of the Pacific Fire Rating Bureau or other applicable
organization performing a similar function. Tenant shall promptly
upon demand reimburse Landlord for any additional premium charged
for such policy(ies) by reason of Tenant's failure to comply with
the provisions of this Section, but such reimbursement shall not be
construed as curing Tenant's default for failing to comply with the
provisions of this Section. Tenant shall not, under any
circumstances, allow alcoholic beverages to be served or consumed
within any portion of the Premises.
SECTION 4.2 RRQHIBITIQN AGATNET SOLTCITATION AND OTHER
ACTIVITIES WITHQUT THE PERMISSION OF LANDLQRD. 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 anti 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 e3tclude, 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 EXQUEIVE L Mi N AREA. It is
expressly agreed and understood that control over all uses of the
"Common Facilities" (defined in Section 5.2 below) shall reside
with and be solely exercisable by Landlord in its sole and absolute
discretion. Said areas shall not be available for use by Tenant,
except as herein expressly provided, nor by vendors, surveyors,
petitioners and others without the express written consent of
Landlord, which Landlord may withhold in its sole and absolute
discretion.
SECTION 4.4 SIGNS. Tenant may not affix a sign to the
exterior surface of the suite front or any other part of the
exterior or interior surface of the Building. Except with the
prior written approval of Landlord, which approval may be withheld
in Landlord's sole but reasonable discretion, Tenant shall not
place or allow to be placed, erected or maintained any sign, decal,
placard, name, insignia, trade name, decoration, flashing, moving
or hanging lights, lettering, or any other descriptive words or
advertising matter of any kind or description (herein collectively,
"sign" or "signs") on any exterior door, wall, window, surface or
roof of the Premises or of the Building or on the glass of any
window or door of the Building, or in any deck or balcony area
included within the Premises or on any sidewalk or other location
outside the Building, or within any entrance to the Premises. If
Tenant places or causes to be placed or maintained any of the
foregoing without Landlord's prior approval, the same may be
removed by Landlord at Tenant's expense without notice ar!d without
such removal constituting a breach of this Lease or ''entitling
Tenant to claim damages on account thereof. Notwithstanding the
foregoing, Tenant may affix a sign to the exterior surface of the
Building if permitted by the City of Huntington Beach and',approved
in advance by Landlord. 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
267;014s:a0001no5o557.2 s4 OU97 -10 -
electricity through a separate meter billed directly to Tenant.
Landlord shall provide window washing as reasonably required.
Tenant shall pay for replacement of all fluorescent fixtures and
bulbs as required.
Landlord shall furnish water for drinking, cleaning and
lavatory purposes only, but if Tenant requires, uses or consumes -
water for any purpose in addition to ordinary drinking, cleaning
and lavatory purposes, of which fact Tenant constitutes Landlord to
be the sole judge, Landlord may install a water meter and thereby
measure Tenant's water consumption for all purposes. Tenant shall
pay Landlord for the cost of the meter and the cost of the
installation thereof, and for consumption throughout the duration
of Tenant's occupancy. Tenant shall keep said meter and installed
equipment in good working order and repair at Tenant's own cost and
expense, in default of which Landlord may cause such meter to be
replaced, repaired and collect the cost thereof from Tenant.
To the extent any utility service to the Premises is
separately metered or billed to Tenant, Tenant shall pay all
charges for such utility service to the Premises. If any such
charges are not paid when due, Landlord may pay the same, and any
amount so paid by Landlord shall thereupon become due to Landlord
from Tenant as additional rent. if Landlord shall elect ,to furnish
any utility services to the Premises, Tenant shall purchase its
requirements thereof from Landlord so long as the rates charged
therefor by Landlord do not exceed those which Tenant would be
required to pay if such services were furnished it directly by a
public utility.
Landlord shall not be liable for any failure to furnish any of
the services or utilities described in this Section 5.1 when such
failure is caused by accidents, breakage, repairs,, strikes,
lockouts, other labor troubles or disputes, governmental water,
energy or other conservation programs or any other governmental
requirements, action or inaction, moratorium or other cause beyond
Landlord's reasonable control. Landlord may take into
consideration the availability of energy resources and prudent
energy conservation practices, including participation in any
energy conservation association or other arrangements for voluntary
cut -back, load shedding and the like. No failure to furnish any of
such service or utilities shall entitle Tenant to any damages,
relieve Tenant of the obligation to pay the full rent reserved
herein or constitute or be construed as a constructive or other
eviction of Tenant. Tenant shall comply with all rules and
regulations which Landlord may reasonably establish for the proper
functioning and protection of the air conditioning, heating,
elevator, plumbing and electrical systems. Landlord shall at all
reasonable times have free access to all mechanical installations
of Landlord, including, but not limited to, the air conditioning
equipment and vents, fans, ventilating and machine rooms and
electrical closets. If there is any failure, stoppage or
interruption in said utilities and/or services, Landlord shall use
reasonable diligence to correct the same, repairs and/or
corrections that are the responsibility of a public or private
utility company, excepted.
SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON FACILITIES.
Landlord shall operate and maintain during the term of this Lease
all common facilities within the Building and the Project. The
term "Common Facilities" shall mean all areas within the Project
which are not held, or designated by Landlord to be 'eld, for
exclusive use by persons entitled to occupy space in the Project.
The Common Facilities shall include, without limi ing the
generality of the foregoing, driveways, truckways, "delivery
passages, loading docks, sidewalks, ramps, landscaped and planted
areas, exterior stairways and balconies, hallways and :interior
stairwells not located within the premises of any tenant, common
entrances and lobbies, mezzanines, elevators, bus stops, retaining
walls, restrooms not located within the premises of any tenant,
lighting fixtures, Building and/or Project identification signs,
irrigation systems and controllers, drains and sewers.
26710I49:0-MI/3050557.2 a04101197 - 1 1 -
SECTION 5.3 USE_OF COMMON FACILITIES. The use and occupancy
by Tenant of the Premises shall include the use of the Common
Facilities in common with Landlord and with all others -for whose
convenience and use the Common Facilities have' been or may
hereafter be provided by Landlord, subject, however, to'rules and
regulations for the use thereof as prescribed from time ,to time by
Landlord pursuant to Article XVI below. Landlord shal operate,
nanage, equip, light, repair, clean and maintain tie Common
Facilities in such manner as Landlord may in its sole 'discretion
determine to be appropriate. Landlord shall at all times during
the term of this Lease have the sole and exclusive control of all
Common Facilities, and may at any time and from time to time during
the term hereof restrain any use or occupancy thereof, except as
authorized by such rules and regulations, as may be changed from
time to time. Tenant shall keep said Common Facilities free and
clear of any obstructions related to Tenant's operations. If, in
the opinion of Landlord, unauthorized persons are using any of said
Common Facilities by reason of the presence of Tenant in the
Building, Tenant, upon demand of Landlord, shall restrain such
unauthorized use by appropriate proceedings. Nothing herein shall
affect the right of Landlord at any time to remove any such
unauthorized persons or obstructions. Landlord may temporarily
close any Common Facility for repairs or alterations as provided in
Section 6.2 below, to prevent a dedication thereof or the accrual
of prescriptive rights therein, or for any other reason deemed
sufficient by Landlord.
SECTION 5.4 PARKING.
(a) Tenant acknowledges that no parking areas are provided at
the Project and that Tenant may use the parking structure provided
by the City of Huntington Beach located near the Project. 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 rate provided by the City to Jack's Surf & Sport,
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 to such Act or any`enactment
amendatory or in substitution thereof, or pursuant to !any other
governmental act or decree, Landlord may recover such fees as
Operating Expenses. The foregoing parking provisions are subject
to any governmental regulations which limit parking or..`otherwise
seek to encourage the use of carpools, public transit' or other
alternative transportation forms.
ARTICLE VI. MAINTENANCE OF THE PREMISES
SECTION 6.1 TENANT'S MAINTENANCE AND REPAIR.
(a) Tenant at its sole cost and expense shall make all
repairs necessary to keep the Premises in good order and repair and
in a safe, clean, sanitary, orderly and attractive condition. All
repairs shall be at least equal in quality to the original work,
shall be made only by a licensed, bonded contractor approved in
advance by Landlord and shall be made only at such time or times as
shall be approved by Landlord. Landlord may impose reasonable
restrictions and requirements with respect to such repairs
including, without limitation, those applicable to Tenant's alter-
ations as set forth in Section 6.4.
(b) Tenant, at its sole cost and expense, shall install and
maintain fire extinguishers within the Premises and other fire
protective devices as may be required from time to time by
Landlord, by any agency having jurisdiction and/or by the insurance
underwriters insuring the Premises.
267/0143240001130$0557.2 04101M -12 -
MW
SECTION 6.2 LANDLORD'S MAINTENANCE AND REPAIR.
(a) Landlord shall keep and maintain in good repair the roof
(including the structural integrity thereof),' foundations,
footings, the exterior surfaces of the exterior walls ; the HVAC
system for the Premises and any utility facilities, and the
electrical and mechanical systems in the Building, reasonable wear
and tear excepted, except to the extent such repair is Tenant's
responsibility under Section 6.1 above or the responsibility of a
public or private utility company and except that Tenant at its
expense shall make any such repairs relating to the act or
negligence of Tenant, its agents, employees, invitees, licensees or
contractors. Landlord shall not be liable for any faild;:e 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 on to any portion of the Project or the Building, including the
Premises, or in or to the fixtures, appurtenances and equipment
therein; provided, however, that in making such repairs,
alterations or improvements, Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant's business in the
Premises.
SECTION 6.3 ALTERATIONS BY LANDLORD.
(a) Landlord reserves the right at any time, and from time to
time, to make changes in or to the Building and the fixtures and
equipment thereof, to make alterations or additions to any building
within the Project, to construct other buildings (including free
standing 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 reasonable access to or materially
affect Tenant's use of the Premises. a
(b) As a material inducement to Landlord's entering into this
Lease, Tenant expressly waives and releases any rights it may have
whether granted by statute or otherwise, to make repairs at
Landlord's expense, including, but not limited to, its rights as
contained in Sections 1941, 1941.1 and 1942 of the California Civil
Code.
SECTION 6.4 TENANT'S ALTERATIONS. Tenant shall not make
alterations, additions or improvements to the Premises nor any
repairs, replacements or restorations to the Premises in excess of
TWO THOUSAND FIVE HUNDRED DOLLARS ($2,500.00) without the prior
written consent of Landlord. Landlord may impose, as a condition
to such consent, such requirements as Landlord, in its sole but
reasonable discretion, may deem reasonable or desirable, including,
but not limited to, a requirement that all work be covered by a
surety bond in favor of Landlord, guaranteeing the completion of
such work free and clear of all subcontractors', mechanics' and
materialmen's liens (which bond shall be satisfactory to Landlord)
and requirements as to the manner, time and contractor or
contractors as to or by which such work shall be done.
Notwithstanding the foregoing, no improvements may be made that
would diminish the value of the Premises and, in addition, no
2671014820-000Il3050537.2 0410W, - 1 3 -
improvements may be made to any mechanical or utility system, the
exterior walls or the roof of the Premises, nor may any
improvements of a structural nature be made without Landlord's
approval, which approval may be withheld in Landlord's sole and
absolute discretion. In no event shall Tenant make or cause to be
made any penetration through the roof or the floor of the Premises
without the prior written approval of Landlord, which approval may
be withheld in Landlord's sole and absolute discretion. Any
requirements of the Work Letter applicable to any initial
construction work performed by or under Tenant shall also be
applicable to any such alterations, additions and/or improvements.
All alterations made by Tenant shall be in accordance with all
Governmental Requirements and to the extent Tenant's alterations
trigger alterations or other modifications within the Building or
Project, such alterations or other modifications shall b%performed
by Landlord at'the expense of Tenant. Any request for,.Landlord's
consent to such work shall be made in writing and shall contain
three (3) sets of architectural plans and specificat�bns (with
square footages) describing such work in detail reasonahly satis-
factory 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 Wnroval of
same. Failure of Landlord to respond to such request within thirty
(30) days shall be deemed a denial of such request. ,flans and
specifications and governmental applications shall hpcome the
property of Landlord upon the termination or expiratiar, 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 fix"&ures 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 ro*ce to Tenant given at least thirty (30) days
prior to the end of, he 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 foregose 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 shm.11; 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 Landlordyp 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, replacemelts or
restorations in and about the Premises so that Landlord+may post
and maintain such notices of non -responsibility or other rJotices on
the Premises as Landlord deems necessary for protection from such
liens.
SECTION 6.6 ENTRY AND _INS PE I N. 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
2671OIa3'.-ODOI/3050557.2 AW01197 - 1 4 -
�4wi
Tenant and without abatement of rent and may for that purpose
erect scaffolding and other necessary structures and store
materials, supplies and tools where reasonably required by the
character of the work to be performed, provided that the business
of Tenant shall be interfered with as little as is reasonably
practicable. If during the last Month of the term hereof, Tenant
shall have removed substantially all of Tenant's property and
personnel from the Premises, Landlord may enter the Pv4mises and
repair, alter and redecorate the same, without abatement of rent
and without liability to Tenant, and such acts shall havF no effect
on this Lease. Tenant hereby waives any claim for ,*'amages or
abatement of rent for any injury, inconvenience to or ir_� erference
with Tenant's business, loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby; provided, however,
this provision shall not excuse Landlord for its own gross
negligence or willful misconduct. As used in this Lease,, the term
"gross negligence" shall mean the failure to perform a manifest
duty in reckless disregard of the consequences as affecting the
life or property of another. Landlord shall have the right to use
any and all means which Landlord may deem proper to open said doors
in an emergency in order to obtain entry to the Premises, and any
entry -to the Premises obtained by Landlord by any of said means
shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or
any eviction of Tenant from the Premises or any portion thereof.
During the last one hundred eighty (180) days of the lease term, or
when an uncured default on the part of Tenant exists hereunder,
Landlord may, at all reasonable times, enter the Premises for the
purpose of displaying the Premises to prospective tenants.
SECTION 6.7 Intentionally omitted.
ARTICLE VII. TAXES AND
ASSESSMENTS ON TENANT'S PROPERTY
SECTION 7.1 TAXE N ENANT'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 eeparately
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 ondlord'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 increise in the
assessment.
(b) If the tenant improvements in the Premises, whether
installed and/or paid for by Landlord or Tenant and whether or not
affixed to the real property so as to become a part thereof, are
assessed for real property tax purposes at a valuation higher than
the valuation at which tenant improvements conforming to Landlord's
building standards in other space in the Building are assessed,
then the real property taxes and assessments levied against
Landlord or Landlord's property by reason of such excess assessed
valuation may, at Landlord's option, be deemed to be taxes levied
against personal property of Tenant and shall, under such
circumstances, be governed by the Provisions of Section 7.1(a)
above.
(c) Upon request, Tenant agrees to provide receipts,
cancelled checks or other documents reasonably requested by
Landlord to confirm Tenant's payment of any taxes and/or
267ro148z0-00011305WS7.2 .O910u97 -15 -
assessments payable by Tenant directly to the taxing authority
under this Lease.
ARTICLE VIII. ASSIGNMENT AND SUBLETTING
SECTION 8.1 PR HIBITI N AND CQNSENT.
(a) Tenant shall not, either voluntarily or involuntarily, by
operation of law or otherwise, assign, sublet, sell, encumber,
pledge or otherwise transfer all or any part of the Premises or
Tenant's leasehold estate hereunder, or permit the Premises to be
occupied by anyone other than Tenant or Tenant's employees, without
Landlord's prior written consent in each instance. Any assignment
or subletting which is not in compliance with this Article Vill
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 sublettin_gs of the
Premises shall not operate to waive Landlord's rights under this
Article VIII. The voluntary or involuntary surrender of1rhis 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 Cor.missioner 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 forty-nine percent (49%-) or such lesser
interest as may constitute a controlling interest, shall`.be deemed
an assignment within the meaning and provisions of this .Section.
(b) If Tenant desires at any time to assign this Lease or to
sublet the Premises or any portion thereof, it shall first notify
Landlord of its desire to do so and shall submit in writing to
Landlord (i) the name of the proposed subtenant or assignee; (ii)
the nature of the proposed subtenant's or assignee's business to be
carried on in the Premises; (iii) the terms and provisions of the
proposed sublease or assignment; (iv) such financial information as
Landlord may request concerning the proposed subtenant or assignee;
and (v) such information as Landlord may request regarding the
business experience concerning the proposed subtenant or assignee
during the preceding five (5) years.
(c) At any time within thirty (30) days after Landlord's
receipt of the information specified in subparagraph (b) above,
Landlord may, by written notice to Tenant, elect to (i) consent to
the subletting or assignment upon the terms and to the subtenant or
assignee proposed, subject to any conditions deemed appropriate by
Landlord, as determined in its reasonable discretion, including,
but not limited to, the condition that Tenant pay to Landlord upon
receipt any and all amounts (a) by which the basic rent and
additional rent paid by such subtenant exceeds the sum of the rent
and additional rent to be paid by Tenant to Landlord for much space
under this Lease, or (b) of profit received by Tenant • from such
assignee; (ii) refuse to give its consent, (iii) sublease the
Premises or the portion thereof so proposed to be subleased by
Tenant or take an assignment of Tenant's leasehold estate; hereunder
or such part thereof as shall be specified in said notic:: upon the
same terms (excluding terms relating to purchase of personal
property, the use of Tenant's name or the continuation of Tenant's
business) as those offered to the proposed subtenant or assignee,
as the case may be; or (iv) terminate this Lease as to the portion
(including all) of the Premises so proposed to be subleased or
assigned with a proportionate abatement in the rent payable
hereunder, effective as of the date of the proposed sublease or
assignment. If the Lease is partially terminated as to the portion
of the Premises proposed to be assigned or subleased, a
proportionate abatement will be made in the rent payable hereunder
effective upon the last to occur of; (a) the date Tenant installs
267i0148:3-M0113050557.2 .04101197 -16 -
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 (50) days of such
election by Landlord, or (b) the effective date of the partial
termination of this Lease. If Landlord consents to such assignment
or subletting, Tenant may within ninety (90) days after the date of
Landlord's consent, enter into a valid assignment or sublease of
the Premises or portion thereof upon the terms and conditions
described in the information required to be furnished by Tenant to
Landlord pursuant to Section 8.1(b) above, or upon other terms not
more favorable to Tenant; provided, however, that any material
change in such terms shall be subject to Landlord's consent as
provided in this Section 8.1. Failure of Landlord to exercise any
option set forth in clauses (i) through (iv) above within the
thirty (30) day period for Landlord's notice shall be deemed
refusal of Landlord to consent to the proposed subletting or
assignment.
SECTION 8.2 NQ 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 znd remain
liable jointly and severally with Tenant for the payment of the
rent, and for the due performance of all the terms, iovenants,
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 disc:aarge the
assignee from its liability as set forth above. The acc6ptance of
any payment due hereunder by Landlord from any other person shall
not be deemed to be a waiver by Landlord of any provision of this
Lease or to be a consent to any assignment or subletting.
SECTION 8.3 TRANSFER FEE. If Landlord consents to an
assignment, sublease or any other transfer by Tenant of all or a
portion of Tenant's interest under this Lease, Tenant shall pay, or
cause to be paid, in each case a transfer fee of FIVE HUNDRED
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.
SECTION 8.4 AFFILIATE TRANSFER. Notwithstanding anything to
the contrary in this Article VIII or anything to the contrary
contained in this Lease, Tenant shall have the right, without
Landlord's consent, to assign this Lease and/or sublet the entire
Premises to any person, corporation or entity (a) which owns one
hundred percent (100t) of Tenant's stock (Tenant's parent); (b) any
corporation in which Tenant or Tenant's parent owns one hundred
percent (100%) of the stock thereof (Tenant's subsidiary or sister
corporation); (c) which succeeds to the assets or business of
Tenant or Tenant's parent as a result of merger or consolidation;
and/or (d) which acquires all or substantially all of Tenant's
capital stock or assets; provided that in each such instance (i)
Tenant shall not be in default under this Lease at the time of said
transfer; (ii) No change in use of the Premises shall `kesult by
reason of such transfer; (iii) Tenant shall give Landlord written
notice of said transfer at least thirty (30) days prior to said
transfer; (iv) the assignee shall furnish Landlord at least thirty
(30) days prior to the transfer a written instrument reasonably
satisfactory to Landlord by which such assignee agrees so assume
and perform all covenants and conditions of Tenant contained in
this Lease; and (v) in the event of an assignment to a parent or
subsidiary and in the event of an assignment to a company acquiring
all or substantially all of the assets or capital stock 9; Tenant,
the assignee has a net worth (in 1997 dollars) equal to or greater
i
267l01482-400015030337.2 &(M101 97 -17 -
than the net worth of Tenant at the time Tenant entered into this
Lease. No such assignment or other transfer shall release the
original Tenant or any assignee thereof from liability under this
Lease.
1
ARTICLE IX. INSURANCE AND INDEMNITY
SECTION 9.1 TENANT'S INSURANQE.
(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 clay from time to time designate, as their int(�rests may
appear, policies of insurance issued by a carrier rated as A+10, or
better, in the latest edition of Best's Insurance Guide (or a
comparable rating in a comparable guide selected by Landlord, if
Best's Insurance Guide is no longer published) which afford the
following coverages:
(i) Worker's Compensation -- Statutory
(including broad form all states)
(ii) Comprehensive General
Liability Insurance,
including Blanket
Contractual Liability,
Broad Form 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 replaces
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
znt sufficient to cover the
,ent of all improvements and
nises 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 first required to be carried by Tenant,
and thereafter at least twenty (20) days prior to expiration of
such policy, certificates of insurance evidencing the above
coverage with limits not less than those specified above. Such
certificates, with the exception of Worker's Compensation, shall
name Landlord and such other parties as Landlord may designate as
additional insureds and shall expressly provide that the interest
of same therein shall not be affected by any breach by Tenant of
any policy provision for which such certificates evidence coverage.
Further, all certificates shall expressly provide that 1) no less
than thirty (30) days prior written notice shall be given Landlord
and such other named insureds in the event of material alteration
to or cancellation of the coverages evidenced by such certificates
and 2) such coverage evidenced by the certificate is primary and
that any coverage carried by Landlord and such other named insureds
shall be excess and non-contributory with respect to any policies
carried by Tenant.
(c) Upon demand, Tenant shall provide Landlord, at Tenant's
expense, with such increased amount of existing insurance, and such
other insurance in such limits, as Landlord may require and such
other hazard insurance as the nature and condition of the Premises
may require in the sole judgment of Landlord, to afford Landlord
and additional insureds designated by Landlord adequate protection
for said risks.-
2671:01010-0001130505 7.2 x03101197 - 18 -
(d) Landlord makes no representation that the limits of
liability specified to be carried by Tenant under this Article IX,
are adequate to protect Tenant against Tenant's undertaking under
this Lease, and in the event Tenant believes that any such
insurance coverage called for under this Lease is insufficient,
Tenant shall provide at its own expense, such additional insurance
as Tenant deems adequate.
(e) Landlord and Tenant hereby release the other from any and
all liability from or to the other party of every kind and nature
which may result from the perils of fire, lightning or extended
coverage perils which cause damage on or to the Premises, the
Building and/or property within the Building owned by, it, such
waiver to include situations where the negligence of qne of the
parties hereto.or his agent, servant or representative causes or
contributes to the occurrence or the result of damage.
(f) Insurance carried by Tenant against loss or,.damage by
fire or other casualty shall contain a clause whereby the insurer
waives its right of subrogation against Landlord. Tenant shall
also obtain and furnish evidence to Landlord of the waiver by
Tenant's worker's compensation carrier of any right of subrogation
against Landlord.
(g) The policy of insurance required to be maintained by
Tenant pursuant to Section 9.1(a)(ii) shall include coverage of
Tenant's indemnity in favor of Landlord as provided in Section 9.2
below.
SECTION 9.2 TENANT'S INDEMNITY. Tenant shall defend,
indemnify and hold harmless Landlord, its agents, and any and all
affiliates of Landlord, including, without limitation, any
corporation or other entities controlling, controlled by or under
common control with Landlord, from and against any and all claims
or liabilities arising from Tenant's use or occupancy of the
Premises, the Building, the Project or the Common Facilities or the
conduct of its business or from any activity, work, or thing done,
permitted or suffered by Tenant in or about the Premises, the
Building, the Project and the Co:rn:on 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-bhall not
be liable for damage or injury occasioned by the gross negligence
or willful misconduct of Landlord or its designateq agents,
servants or employees, unless covered by insurance Tenant is
required to provide. This obligation to indemnify shall include
Tenant's payment of reasonable attorneys' fees and investigation
costs and all other reasonable costs, expenses and liabilities
incurred or suffered by Landlord from Landlord's receipt of the
first notice that any claim or demand is to be. made or may be made.
Landlord may, at its option, require Tenant to assume Landlord's
defense in any action covered by this Section 9.2 through counsel
satisfactory to Landlord. As used in this Lease, the term "gross
negligence" shall mean the failure to perform a manifest duty in
reckless disregard of the consequences as affecting the life or
property of another.
ARTICLE X. DAMAGE OR DESTRUCTION
SECTION 10.1 RESTORATION.
(a) In the event the Building is damaged by £ire or other
perils covered by extended coverage insurance to an extent not
exceeding twenty-five percent (25t) of the full insurable value
26V014920-000V30505V.2 .av01197 -19 -
r
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 (25t)
of the full insurable value thereof or if said insurance proceeds
will not be sufficient to cover the cost of such repairs, Landlord
may either elect to so repair, reconstruct or restore and this
Lease shall continue in full force and effect, or Landlord may
elect not to repair, reconstruct or restore and the Lease shall in
such event terminate. Under any of said conditions, Landlord shall
give written notice to Tenant of its intention within ninety (90)
days of the occurrence of such damage. In the event Landlord
elects not to restore the Building, this Lease shall terminate on
the date thirty (30) days following the date Tenant receives
Landlord's written notice indicating Landlord's election to
terminate.
(b) In the event the Premises or the Building is damaged or
destroyed to the extent of more than ten percent (MV) 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 ,Wdlordls
election to terminate this Lease. If such damage or destruction is
not to such extent, or if Landlord does not elect to terminate this
Lease following such damage, Landlord shall commence and proceed
diligently with the work of repair, reconstruction and restoration
and this Lease shall continue in full force and effect.
(c) In the event of any casualty damage, the rental provided
to be paid under this Lease shall be abated proportionately in the
ratio which the Premises are rendered unusable from the date of
destruction through the period of such repair, reconstruction or
restoration unless (i) the Premises were unusable for a period of
three (3) business days or less, or (ii) the damage is due to the
fault or neglect of Tenant, its agents or employees. Tenant shall
not be released from any of its obligations under this Lease except
to the extent and upon the conditions expressly stated in this
Section 10.1.
(d) If the then existing laws do not permit the restoration
described in this Section 10.1, Landlord may terminate this Lease
by giving written notice to Tenant, in which event this Lease shall
terminate thirty (30) days following Tenant's receipt of such
notice.
(e) Notwithstanding anything to the contrary contained in
this Article, Landlord shall not have any obligation whatsoever to
repair, reconstruct or restore the Premises or any portion of the
Building when the damage occurs during the last twenty-four (24)
months of the term of this Lease or any extension thereof.
(f) No damages, compensation or claim shall be payable by
Landlord by reason of any injury to or interference with Tenant's
business or property arising from any damage or destruction or the
making of any repairs, alterations or improvements in pr 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 car 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. '
267.0148:0.000113050557.2 a04101M - 2 0 -
M
SECTION 10.2 LANDLORD'S NQN-LIABILITX. Landlord shall not be
liable to Tenant, and Tenant hereby waives all claims against
Landlord for any injury or damage to any person or property in or
about the Premises, the Building or the Project from any cause
whatsoever, except to the extent caused by the gross negligence or
willful misconduct by Landlord, its agents or employees.
Specifically, Landlord or its agents or employees shall not be.
liable for any damage to property entrusted to Landlord's employees
in the Building, nor for loss of or damage to any property by theft
or otherwise, nor for any injury or damage to persons or property
by loss or interruption of business or loss of income resulting
from the following causes, except to the extent caused by the gross
negligence or willful misconduct of Landlord, its agents, servants
or employees; fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak or flow from or into any
part of the Premises or from the breakage, leakage, obstruction or
other defects of the pipes, sprinklers, wires, appliances or
plumbing or air-conditioning or electrical works therein, whether
such damage or injury results from conditions arising in the
Premises or in other portions of the Building, or from other
sources. Neither Landlord nor its agents shall be liable for
interference with the light or other incorporeal hereditaments, nor
shall Landlord be liable for damages from any latent defect in the
Premises, the Building or the Project. Tenant shall give prompt
notice to Landlord in case of fire or accidents in the Premises or
in the Building and of defects therein or in the fixtures or
equipment.
Tenant understands that Landlord will not carry insurance of
any kind on Tenant's furniture or furnishings, fi:;tures or
equipment, and that Landlord shall not be obligated to repair any
damage thereto or replace the same.
SECTION 10.3 TENANT'S WAIVER. With respect to Lny 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 3.933(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 pert of the
Premises taken, taking into account any restoration and repair by
Landlord.
ti
No temporary taking of the Premises and/or of Tenans rights
therein or under this Lease shall terminate this Lease, or give
Tenant any right to any abatement of rent hereunder. Any award
2671014820-000113050557.2 a041011V - 2 1 - •`
WM
made by reason of any such temporary taking shall belop, entirely
to Landlord and shall be applied by Landlord against the rent and
the other obligations of Tenant hereunder when such renLI and other
obligations first accrue. •1
Except as provided above, any award or damages payable in
connection with a taking of the Building and/or the Pro j e -.t, or any
portion thereof, under the power of eminent domain shall belong
entirely to Landlord and Tenant shall have no right or interest
therein.
ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE
SECTION 12.1 SUBORDINATION. On request of Landlord, Tenant
will in writing subordinate its rights hereunder to the lien of any
first mortgage or first deed of trust now or hereafter in force
against the Premises and to all advances made or hereafter to be
made upon the security thereof, in the form required by the holder
of such mortgage or deed of trust; provided, however, that Tenant's
rights under this Lease are recognized and its possession of the
Premises is not disturbed. In the event any proceedings are
brought for foreclosure, or in the event of the exercise of any
power of sale under any mortgage or deed of trust made by Landlord
covering the Premises, Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease.
SECTION 12.2 ESTOPPEL CERTIFICATE,. Tenant shall, at any time
and from time to time, within ten (10) days' after notice from
Landlord, execute, acknowledge and deliver to Landlord a statement
in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in
full force and effect) and the dates to which basic annual rental,
additional rent and other charges have been paid in advance, if
any, (ii) acknowledging that, to Tenant's knowledge, there are no
uncured defaults on the part of Landlord hereunder, or Lpecifying
such defaults if any are claimed, (iii) certifying that Tenant has
no existing offsets and no right of offset against Lan lord, 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 remises,
Building and/or Project. t
ARTICLE XIII. DEFAULTS AND REMEDIES
SECTION 13.1 TENANT'S DEFA T . The occurrence of any one or
more of the following events shall constitute a default hereunder
by Tenant:
(a) The abandonment or vacation of the Premises by Tenant.
(b) The failure by Tenant to make any payment of basic annual
rent or additional rent required to be made by Tenant hereunder, as
and when due, where such failure shall continue for a period of
three (3) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice shall be in lieu
of, and not in addition to, any notice required under California
Code of Civil Procedure Section 1161 et secx. 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
therein by Tenant,
(including transfer
or sublease of this Lease or of any, interest
either voluntarily or by operation of law
by testacy or intestacy), whether by judgment,
f
2671014s:0-000113050557.2 vW01 97 - 2 2 -
execution, or other means, without the prior written consent of
Landlord.
(e) The failure or inability by Tenant as may be determined
by Landlord to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed
by Tenant, other than those specified in (a) through (d) above,
where such failure shall continue for a period of fifteen (15 ) days
after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil
Procedure Section 1161 et seq.
(f) (i) The making by Tenant of any general assignment for
the benefit of.creditors; (ii) a case is commenced by wr against
Tenant under Chapters 7, 11 or 13 of the Bankruptcy Code, Title 11
of the United States Code as now in force or hereafter amended and
if so commenced against Tenant, the same is not dismissed within
sixty (60) days; (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where
possession is not restored to Tenant within thirty (30) days; (iv)
the attachment, execution or other judicial seizure of substan-
tially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a
meeting of its creditors or any class thereof for the purpose of
effecting a moratorium upon or composition of its debts.
SECTION 13.2 LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, then, in addition
to any other remedies available to Landlord at law or in equity,
Landlord may 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 t:_e balance
of the term hereof after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided;
Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to'
perform its obligations under this Lease or which in the'ordinary
course of things would be likely to result therefrom, including,
but not limited to, the cost of recovering possession of the
Premises, expenses of reletting, including brokerage commissions,
necessary repair, renovation and alteration of the Premises,
reasonable attorneys' fees, expert witness costs, and any other
reasonable costs; and
Any other amount which Landlord may by law hereafter
be permitted to recover from Tenant to compensate Landlord for the
detriment caused by Tenant's default. As used in subparagraphs (i)
and (ii) above, the "worth at the time of award" shall be computed
by allowing interest at the maximum rate permitted by law.
2671014820.000113050557.2 04101 97 - 2 3 -
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 (lot)
per annum.
(ii) Pursue the remedy described in California Civil Code
Section 1951.4 and continue this Lease in effect without
terminating Tenant's right to possession even though Tenant has
breached this Lease and abandoned the Premises and to enforce all
of Landlord's rights and remedies under this Lease, at law or in
equity, including the right to recover the rent as it becomes due
under this Lease; provided, however, that Landlord may at any time
thereafter elect to terminate this Lease for such previous breach
by notifying Tenant in writing that Tenant's right to possession of
the Premises has been terminated.
(iii) Nothing in this Article XIII shall be deemed to
affect Tenant's indemnity of Landlord, for liability or Z;Labilities
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 coy:•enants of
indemnification shall survive the termination of this Vase.
(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 94dition to
any and all rights or remedies of the Landlord hereunderfor by law
provided, it shall be lawful for the Landlord to declare the term
hereof ended and to re-enter the Premises and take possession
thereof and remove all persons therefrom, and Tenant and its
creditors (other than Landlord) shall have no further claim thereon
or hereunder.
(b) Landlord shall be under no obligation to observe or
perform any covenant of this Lease on its part to be observed or
performed which accrues after the date of any default by Tenant
hereunder. In any action for unlawful detainer commenced by
Landlord against Tenant by reason of any default hereunder, the
reasonable rental value of the Premises for the period of the
unlawful detainer shall be deemed to be the amount of the basic
annual rent and additional rent reserved in this Lease for such
period, unless Landlord or Tenant shall prove to the contrary by
competent evidence. The various rights, powers and remedies
reserved to Landlord herein, and those rights, powers and remedies
of Landlord under any other agreement now or hereafter in force
between Landlord and Tenant, including those not specifically
described herein, shall be cumulative, and, except as -otherwise
provided by California statutory law in effect at the time,
Landlord may pursue any or all of such rights and remedies, at the
same time,.or otherwise.
(c) No delay or omission of Landlord to exercise any right or
remedy shall be construed as a waiver of any such right,or remedy
or of any default by Tenant hereunder. The acceptance by Landlord
of rent or any additional rent hereunder shall not be (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 dr receipt
by Landlord of a lesser amount than the rent herein stipulated
shall be deemed to be other than on account of the earliest due
stipulated rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be
deemed an accord and satisfaction, and Landlord shall accept such
check or payment without prejudice to Landlord's right to recover
the balance of such rent or pursue any other remedy in this Lease
provided. Tenant hereby waives any right of redemption or relief
267t0148204=113050557.2 &04101197 - 2 4 -
- •G
from forfeiture under California Code of Civil Procedure Sections
1174 or 1179, or under any other present or future law, in the
event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder. No act or
thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises,
and no agreement to accept a surrender shall be valid unless in
writing and signed by Landlord. No employee of Landlord or of
Landlord's agents shall have any power to accept the keys to the
Premises prior to the termination of this Lease, and the delivery
of the keys to any such employee shall not operate a termination of
this Lease or a surrender of the Premises.
SECTION 13.3 INTEREST ON -TENANT'S OBLIGATIONS: LAT
PAYMENTS.
(a) Any installment of rent due under this Lease or any other
sum not paid to Landlord when due (other than interest) shall bear
interest at the maximum rate allowed by law from the date such
payment is due until paid, provided, however, that the payment of
such interest shall not excuse or cure the default.
(b) Tenant hereby acknowledges that the late payment by
Tenant to Landlord of rent and other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such
costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed
covering the premises. Accordingly, if any installment of rent or
any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days after the date due, then
Tenant shall pay to Landlord, in addition to the interest; provided
above, a late charge in the amount of five percent (5fl 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 payments of rent,
Landlord shall have the option (i) to require that beginning with
the first payment of rent next due, rent shall no longer be paid in
monthly installments but shall be payable quarterly three (3)
months in advance and/or (ii) to require that Tenant increase the
amount, if any, of the security deposit required under Section 3.2
as listed in Item 9 of the Basic Lease Provisions by one hundred
percent (100%-), which additional security deposit shall be retained
by Landlord, and may be applied by Landlord, in the manner provided
in Section 3.2.
SECTION 13.4 RIGHT QF LANDLORD IQ PERFORM. All covenants and
agreements to be performed by Tenant under any of the terms of this
Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of rent. If Tenant shall fail to
pay any sum of money, other than rent, required to be paid by it
hereunder or shall fail to perform any other act on its part to be
performed hereunder, or to provide any insurance or evidence of
insurance to be provided by Tenant, and such failure shall continue
beyond any applicable grace period set forth in Section 13.1, then
in addition to any other remedies provided herein, Landlord may,
but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make' any such.
payment or perform any such act on Tenant's part to be made or
performed as provided in this Lease or to provide such insurance.
Any payment or performance of any act or the provision of any such
insurance by Landlord on Tenant's behalf shall not give rise to any
responsibility of Landlord to continue making the same Lq� similar
payments or performing the same or similar acts. All costs,
expenses and other sums incurred or paid by Landlord in connection
1�
2671014320.000113050557.2 a04101M - 2 5
k./
therewith, together with interest at the maximum rate permitted by
law from the date incurred or paid by Landlord shall be deemed to
be additional rent hereunder and shall be paid by Tenant with and
at the same time as the next monthly installment of basic annual
rent hereunder, and any default therein shall constitute a breach
of the covenants and conditions of this Lease.
t
SECTION 13.5 DEFAULT BY LANDLORD. Landlord shz�ll not be
deemed to be in default in the performance of any ;obligation
required to be performed by it under this Lease unless and until it
has failed to perform such obligation within thirty (30) days after
written notice by Tenant to Landlord, and to any mortgagee or
beneficiary of a deed of trust with an interest in any encumbrance
affecting Landlord's interest in the Premises, specifying in
reasonable detail the nature and extent of any such, failure;
provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if
it commences such performance within such thirty (30) day period
and thereafter diligently prosecutes the same to completion. If,
after notice to Landlord of default, Landlord fails to cure such
default as provided herein, then Tenant shall have the right to
cure such default at Landlord's expense. Tenant shall not have the
right to terminate this Lease or to withhold, reduce or offset any
amount against any payments of basic annual rent or any other
charges due and payable hereunder, and Tenant's remedy shall be
limited to damages and/or an injunction. It is expressly
understood and agreed to that any money judgment resulting from any
default or other claim arising under this Lease shall be satisfied
only out of the rents, issues, profits or other income ("Income")
actually received from the operation of the Building and no other
real, personal or mixed property of Landlord (the term "Landlord"
for purposes of this Section only shall mean any and all partners,
both general and/or limited, if any, which comprise Landlord),
wherever situated, shall be subject to levy on any such judgment
obtained against Landlord and whether or not such Income is
sufficient for the payment of such judgment, Tenant will not
institute any further action, suit, claim or demand, in law or in
equity, against Landlord for or on the account of such deficiency.
Tenant hereby waives, to the extent waivable under law, any right
to satisfy said money judgment against Landlord except from Income
received by Landlord for the operation of the Building.
,t
SECTION 13.6 EXPENSES AND LEGAL FEES. If Tenant or Landlord
shall bring any action for any relief against the other,
declaratory or otherwise, arising out of or under this Lease,
including any suit by Landlord for the recovery of- rent or
possession of the Premises, the prevailing party shall be entitled
to recover its attorney's fees and costs, including without
limitation, expert witness fees, photocopying, facsimile, messenger
and postage costs, in connection with such suit, and such
attorney's fees and costs shall be deemed to have accrued on the
commencement of such action and shall be paid whether or not such
action is prosecuted to judgment.
ARTICLE XIV. END OF TERM
SECTION 14.1 HOLDING OVER. This Lease shall terminate and
become null and void without further notice upon the expiration of
the term herein specified, and any holding over by Tenant after
such expiration shall not constitute a renewal or extension hereof
or give Tenant any rights under this Lease, except when in writing
signed by both parties hereto or as otherwise herein provided. If
Tenant shall hold over for any period after the expiration of the
Lease term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only commencing on the first (ist) day following the
expiration of this Lease and subject to all of the terms and
conditions herein contained, except that the basic annual rent, and
monthly installments thereof, shall be one hundred fifty percent
(150%) of that payable at the date of expiration.
25710146:0.000lr3050557.2 &04.-007 - 2 6 -
`J �4.)
SECTION 14.2 SURRENDER OF PREMISES: REMOVAL OF PROPERTY.
Upon the expiration of the term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by
Landlord or Tenant, reasonable wear and tear and repairs which are
Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all
debris and rubbish, all furniture, equipment, and trade fixtures,
free-standing cabinet work and other articles of any other persons
claiming under Tenant unless Landlord exercises its option to have
any subleases or subtenancies assigned to it. Tenant shall repair
all damage to the Premises resulting from such removal, which
repair shall include the patching and filling of holes and repair
of structural damage. In the event that Tenant shall fail to
comply with the provisions of this Section 14.2, Landlord may make
such repairs and the cost thereof shall be additional rent payable
by Tenant upon demand. If requested by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord an insgrument in
writing releasing and quitclaiming to Landlord all right, E title and
interest of Tenant in and to the Premises by reason oftthis Lease
or otherwise.
SECTION 14.3 AFFIXED PROPERTY. All fixtures, ;equipment,
alterations, additions, improvements and/or appurtenances attached
to or built into the Premises prior to or during the term hereof,
whether by Landlord at its expense or at the expense of...Tenant or
both, shall be and remain part of the Premises and shall belong to
Landlord unless otherwise expressly provided for in this Lease or
unless such removal is required by Landlord pursuant to the pro-
visions of Section 6.4 hereof. Such fixtures, equipment,
alterations, additions, improvements and/or appurtenances shall
include, without limitation, floor coverings, drapes, paneling,
molding, built-in cabinets, doors, vaults, (exclusive of vault
doors), plumbing, electrical communications and lighting systems,
silencing equipment, all fixtures and outlets for the systems
mentioned above and for all telephone, radio, telegraph and
television purposes, and any special flooring or ceiling
installations. Notwithstanding the foregoing, cabinets that are
installed by Tenant and that are not built-in but are affixed to
the interior walls of the Premises that may be removed without
material damage to the Premises, may be removed by Tenant at the
termination or expiration of the term hereof, provided that any
damage caused by such removal shall be promptly repaired by Tenant.
ARTICLE XV. NOTICES
Any notice, election, demand, consent, approval or other
communication to be given or other document to be delivered by
either party to the other hereunder may be delivered in person to
an officer or duly authorized representative of the other party, or
may be deposited in the United States mail, duly registered or
certified, postage prepaid, return receipt requested, and addressed
to the other party at the address set forth in Item 11 of 'the Basic
Lease Provisions hereof, or if to Tenant, at such address or, from
and after the Commencement Date, at the Premises (whether or not
Tenant has departed from, abandoned or vacated the Premises).
Either party may from time to time, by written notice to she 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 or of said
Tenants shall be deemed as service upon all of them.
ARTICLE XVI. RULES AND REGULATIONS
The Rules and Regulations attached hereto as Michibit "C" by
this reference are hereby incorporated herein and made a part
hereof. Tenant agrees to observe faithfully and comply strictly
26't014923-0001n050557.2 .aroiror - 27 -
.a
with such Rules and Regulations, and any reasonable amendments,
modifications and/or additions thereto as may hereafter be adopted
and published by written notice to tenants by Landlord for the
safety, care, security (including restrictions on hours and manner
of access to the Building) good order, cleanliness of the Premises,
Building and/or the Project, or portions thereof. Landlord shall
not be liable to Tenant for any violation of such Rules and
Regulations or the breach of any covenant or condition in any lease
by any other tenant. One or more waivers by Landlord of any breach
of such Rules and Regulations by Tenant or by any other tenant(s)
shall not be a waiver of any subsequent breach of that rule or any
other. In the case of any conflict between such Rules and Regu-
lations and this Lease, this Lease shall control.
ARTICLE XVII. BROKER'S COMISSION
The parties recognize as the broker (s) who procured this Lease
the firm(s), if any, stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be solely responsible for
the payment of brokerage commissions to said broker(s), and that
Tenant shall have no responsibility therefor unless otherwise
provided in this Lease. Tenant warrants that it has had no
dealings with any other real estate broker or agent in connection
with the negotiation of this Lease, and agrees to indemnify, defend
and hold Landlord harmless from any cost, expense or liability
(including reasonable attorneys' fees in connection therewith) for
any compensation, commissions or charges claimed by any other real
estate broker or agent employed or claiming to represent }Dr 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, provided that the security
deposit is also transferred. It is intended hereby that the
covenants and obligations contained in this Lease on the part of
Landlord shall, subject to the foregoing, be binding on Landlord,
its successors and assigns, only during and in respect of their
respective periods of ownership.
ARTICLE XIX. INTERPRETATION
SECTION 19.1 GENDER AND NUMBER. Whenever the context of this
Lease requires, the words "Landlord" and "Tenant", as used herein,
shall include the plural as well as the singular and words used in
neuter, masculine or feminine genders shall include the others.
SECTION 19.2 HEADINGS. The captions, headings, titles,
numbering and indexing of the Articles and Sections of this Lease
are for convenience only, are not a part of this Lease and shall
have no effect upon the construction or interpretation of any part
hereof.
ARTICLE XX. EXECUTION AND RECORDING
SECTION 20.1 CORPQRATE AUTHORITY. If Tenant is a
corporation, each individual executing this Lease on behalf of said
corporation represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of said corporation in
accordance with said corporation's by -Laws or a duly, adopted
resolution of its board of directors, and that this Lease is
binding upon said corporation in accordance with its terms. Tenant
2671014820-0001/3050557.2 a04101 97 - 2 8 -
shall, at Landlord's request, deliver a certified copy of its board
of directors' resolution authorizing or ratifying such execution.
.I
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 "snort form"
memorandum of this Lease for recording purposes. '
SECTION 20.3 AMENDMENTS. No amendment, addition, revocation
or ratification of this Lease shall be effective unless in writing
signed by the parties hereto. No actions, policies, oral or
informal arrangements, business dealings or other course of conduct
by or between the parties shall be deemed to amend this Lease or
revise this Lease in any respect.
ARTICLE XXI. MISCELLANEOUS
SECTION 21.1 NONDISCLOSURE OF LEASE ,BERMS. Tenant
acknowledges and agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord.
Disclosure of the terms hereof could adversely affect the ability
of Landlord to negotiate other leases with respect to the Project.
Tenant agrees that it, and its partners, officers, directors,
employees and attorneys shall not disclose the terms and conditions
of this Lease to any other person without the prior written consent
of Landlord, provided, however, that Tenant may disclose the terms
hereof to the independent accountants who audit its financial
statements, or other persons or entities with a legitimate need to
know the information contained in this Lease. It is understood and
agreed that damages would be an inadequate remedy for the breach of
this provision by Tenant, and Landlord shall have the right to
specific performance of this provision and to injunctive relief to
prevent its breach or continued breach.
SECTION 21.2 FURNISHING ,QF_FINANTIAL STATEMENTS. Landlord
has reviewed financial statements and tax returns if so requested
of the Tenant and has relied upon the truth and accuracy thereof
with Tenant's knowledge and representations of the truth and
accuracy of same and that said statements accurately and fairly
depict the financial condition of Tenant. Said statements are an
inducing factor and consideration for the Tenant. Tenant and/or
guarantors shall promptly furnish Landlord, upon request, with
annual financial statements reflecting the then current`.Vinancial
condition of Tenant throughout the term of this Lease. ,
1�
SECTION 21.3 CHANGES REQUESTED BY LENDER. If, in connection
with obtaining financing for the Building, any lender shall request
reasonable modifications in this Lease as a condition to such
financing, Tenant will not unreasonably withhold, delay -or defer
its consent thereto, provided that such modificationdo not
materially increase the obligations of Tenant hereunder or
materially and adversely affect the leasehold interest hereby
created.
SECTION 21.4 GOVERNMENTAL REQUIREMENTS. Tenant covenants at
all times during the term of this Lease to comply with the
requirements of the Occupational Safety and Health Act of 1970, 29
U.S.C., Section 651 et seq., and any analogous legislation in
California (collectively, the "Act"), to the extent that the Act
applies to the Premises and any activities therein, and to comply
with all other Governmental Requirements, including, but not
limited to, all laws prohibiting discrimination against any person
or group of persons on account of race, color, creed, sex, national
origin or ancestry and all laws described in Section 4.1 above.
Without limiting the generality of the foregoing, Tenant covenants
to maintain all working areas, all machinery, equipment,
appliances, structures, electrical facilities and the like upon the
Premises in a condition that full complies with the requirements of
the Act, including such requirements as would be applicable with
respect to agents, employees or contractors of Landlord who may
from time to time be present upon the Premises.
2671014320-0001/3050557.2 sk04101197 - 2 9 -
SECTION 21.5 COVENANTS AND CONDITIONS. All of the provisions
of this Lease shall be construed to be "conditions" as well as
"covenants" as though the words specifically expressing or
imparting covenants and conditions were used in Bach 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. f
SECTION 21.7 JOINT AND SEVERAL LIABILITY. If theke be more
than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several and the act of or notice from, t or notice
or refund to, or the signature of, any one or more of such persons,
with respect to the tenancy of this Lease, shall be binding upon
each and all of. the persons executing this Lease as Tenant with the
same force and effect as if each and all of them had so acted or so
given or received such notice or refund or so signed.
SECTION 21.8 SUCCESSORS. Subject to Articles VIII�and XVIII
above, all rights and liabilities herein given to, or imposed upon,
the respective parties hereto shall extend to and bind the several
respective heirs, executors, administrators, successors, and
assigns of the parties. Nothing contained herein is intended, or
shall be construed, to confer upon or grant to any person other
than Landlord and Tenant any rights or remedies under this Lease.
SECTION 21.9 TIME , 2F ES$ENQE . 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 QPNTROLLING LAW. This Lease shall be governed
by and interpreted in accordance with the laws of the State of
California.
SECTION 21.11 SEVERABILIT If any term or provision of this
Lease shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected thereby and each term
and provision of this.Lease shall be valid and enforceable to the
fullest extent permitted by law.
SECTION 21.12 RELATIONSHIP OF PARTIES. Nothing contained
herein shall be deemed or construed by the parties hereto, or by
any third party, as creating the relationship of principal and
agent or of partnership or joint venture between the parties
hereto, it being understood and agreed that neither the 'nethod of
computation of rent, nor any other provision contained herein, nor
any acts of the parties herein, shall be deemed to deate any
relationship between the parties hereto other than the relationship
of Tenant and Landlord.
SECTION 21.13 INABI-LITY TO PERFORM. In the event that
Landlord shall be delayed or hindered in or prevented from the
performance of any work or in performing any act required hereunder
by reason of: strikes; lockouts; labor troubles; inability to
procure materials, labor or energy; failure of power; disruption,
reduction, interruption, curtailment or failure of utility, solid
waste disposal or other services; restrictive Governmental Require-
ments; voluntary or involuntary participation, at the request of a
governmental agency or otherwise, in any plan or program involving
allocations, priorities, limitations or restraints regarding water,
fuel or other energy, or otherwise; other governmental action or
inaction; riots, insurrection; war, fires; floods; earthquakes;
storms; droughts, other Acts of God; or any other reason of a
similar or dissimilar nature not the fault of Landlord in
performing work or doing acts required under the terms of this
Lease, then the performance of such work or the doing of such act
shall be excused for the period of the delay, and the period for
the performance of any work or the doing of such act shall be
extended for a period equivalent to the period of such delay. The
267101481-0.000113050557.2 &04101/97 - 3 0 -
k.�
occurrence of any event
shall not relieve Tenant
rent, under this Lease.
constituting a cause for excusable delay
from any obligations, including payment of
SECTION 21.14 QUIET ENJOYMENT. Upon payment by Tenant of the
basic annual rent, additional rent and all the charges herein
provided, and upon the observance and performance of all the
covenants, terms and conditions of this Lease on Tenant's part to
be observed and performed, Tenant shall peaceably and quietly hold
and enjoy the Premises for the term hereby demised without
hindrance or interruption by Landlord or any other person or
persons lawfully or equitably claiming by, through or under
Landlord.
SECTION 21.15 HAZARDOUS WASTE AND MATERIALS. Tenant shall
not engage in any activity on or about the Premises or the Project
that violates any Environmental Law, and shall promptly, at
Tenant's sole cost and expense, take all investigatory and/or
remedial action required or ordered by any governmental agency or
Environmental Law for clean-up and removal of any contamination
involving any Hazardous Material created or caused directly or
indirectly by Tenant. The term "Environmental Law" shall mean any
federal, state or local law, statute, ordinance or regulation
pertaining to health, industrial hygiene or the environmental
conditions on, under or about the Premises, including, without
limitation, (i) the Comprehensive Environmental .Response,
Compensation and Liability Act of 1980 ("CERCLA"), !12 U.S.C.
Sections 9601 gt g=.; (ii) the Resource Conservation and Recovery
Act of 1976 ("RCRA"), 42 U.S.C. Sections 6901 gt g�!q.; (iii)
California Health and Safety Code Sections 25100 gt fig.:; (iv) the
Safe Drinking Water and Toxic Enforcement Act of 1996, California
Health and Safety Code Section 25249.5 gt eeg.; (v) the Federal
Water Pollution Control Act, 33 U.S.C. Sections 1317 gt ;gq.; (vi)
California Water Code Section 1300 gi peer. ; and (vii) California
Civil Code Section 3479 gt Dea., 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 at seer.
Tenant shall provide prompt written notice to Landlord of the
existence of Hazardous Substances on the Premises and all notices
of violation of the Environmental Laws received by Tenant.
Tenant's obligations pursuant to this Section 21.15 shall be
referred to in this Lease as "Environmental Compliance".
SECTION 21.16 ENTIRE AGREEMENT. This Lease and the Exhibits
and other attachments hereto cover in full each and every agreement
of every kind or nature whatsoever between the parties hereto
concerning the Premises and the building or Project, and all
preliminary negotiations, oral agreements, understandings and/or
practices of whatsoever kind with respect to the Premises or the
Building or Project, except those contained herein or therein, are
superseddd and of no further force or effect; no persons firm or
corporation has at any time had an authority from Landlord to make
any representations or promises on behalf of Landlord,- and Tenant
agrees that if any such representations or promises have, been made
by Landlord or others, Tenant hereby waives all right to rely
thereon. No verbal agreement or implied covenant shall bje held to
vary the provisions hereof, any statute, law, or custom to the
contrary notwithstanding.
267ro148:0-oo0150505n.2 &44101►97 - 31-
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�:I"
TO OFFICE SPACE LEASE
257;0148',0-000113050357.2 r04:01147
Is
V
�W)
EXHIBIT "A-2"
begal Description of the Proiect
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
2671014320-00016050557.2 a04101197
EXHIBIT "B" 1,
l
THE WORK LETTER
In addition to the mutual covenants contained in the Lease to
which this Work Letter is attached, Landlord and Tenant further
mutually agree as follows: ,
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 Schedule of Approvals
below. Tenant may have its own architect prepare space plans
and specifications at its expense and shall furnish a copy to
Landlord at least five (5) 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. Tenant acknowledges that
it has received and approved the floor plan layout prepared
for the Premises by Landlord (the "Approved Layout").
(b) Tenant may require work (hereinafter refer:red 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. J".
(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 Huntington
Beach 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
267/014820-0001/3050557.2 a04/01/97 Page 1 `
v
2. BUILDING STANDARD WORK AT LANDLORD'S COST AND EXPENSE
Landlord agrees, at its sole cost and expense, to furnish
and install all the following Building Standard Work in a good
and workmanlike manner and in accordance with all applicable
laws and building codes, but only in the quantities.- specified
by Landlord, and substantially similar in quantities and
qualities used by Landlord for the build out of the Tenant's
existing third floor premises pursuant to that certain Office
Space Lease dated May 31, 1994 between Landlord and Tenant, as
indicated on Tenant's final approved plans and specifications:
(a) Partitions
The interior partitions will be 3-3/4" nominal
thickness, consisting of two (2) 5/8" thick gypsum
boards, one each attached to each side of 2-1/24
metal studs and resilient base, as depicted on the
Approved Layout.
(b) Doors, Door Frames and Hardware
Interior doors shall be hollow core paint grade
birch veneer, and exterior doors (excluding glass
door to deck) shall, be solid core birch, in the
locations indicated on the Approved Layout. Two
(2) pairs of butt hinges and Building Standard
latchset included with each door, except entrance
door, which has lockset.
(c) 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.
(d) Ceilings
Suspended 21x 4' 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.
(e) Lighting Fixtures
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 Rentable Area. �,
(f) Electrical System
120/208 volt 3 phase, 4 wire two hundred (200) amp
service.
(g) Duplex Electrical Outlets
Electrical wall outlets provided as per code.
(h) Telephone Outlets
One (1) telephone wall outlet per two hundred (200)
square feet of Rentable Area.
(i) Carpeting
Carpeting in elevator lobbies and common corridors
on all multiple -tenancy office floors in color and
type as selected by Landlord; carpeting within
EXHIBIT '"B"
TO OFFICE SPACELEASE
26710I43'NO 0113030537.2 44101M Page 2
office space as required and selected by Tenant
from Building Standard selection.
(j) Heating, Ventilating and Air Conditioning
The HVAC system is a
heat pump. Landlord
zone per nine hundred
Area.
(k) Fire Sprinklers
constant volume split system
will install one (1) control
(900) square feet of Rentable
One (1) recessed type head with white enamel finish
per one hundred fifty (150) square feet of Rentable
Area.
(1) Exit Signs
Minimum of one (1) exit sign per ,Premises.
Additional exit signs shall be provided in
accordance with building codes.
3. NON -BUILDING STANDARD WORK AT TENANT'S COST AND EXPENSE
.
(a) Provided Tenant's plans and specifications are
approved not later Than the time provided hereihabove in
Paragraph 1, Landlord shall cause Tenant's Nori-Building
Standard Work to be installed by Landlord's contractor, but at
Tenant's sole cost and expense. Prior to commencinq any such
Non -Building Standard Work, Landlord shall submit tp Tenant a
written estimate of the cost thereof. If Tenant approves such
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 (15V) of such cost
for Landlord's overhead and coordination of the work.
4. SUBSTITUTIONS AND CREDITS
(a) Provided Tenant's plans and specifications are
approved not later than the time provided hereinabove in
Paragraph 1, Tenant may select different materials
(hereinafter "substituted materials") in place of Building
Standard materials which would otherwise be .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.
' -:EXHIBIT - " B "
TO OFFICE SPACE LEASE
2671014820-0001/3050557.2 .0101/0 Page 3
(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 amount
of such estimate and Landlord's contractor shall proceed with
such work. If Tenant shall fail to approve such estimate
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
thereupon also be liable for the delay and increased cost, if
any, in completing the affected Building Standard Work.
(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.,
a lighting fixture credit may be applied only agains- the cost
of another type of lighting fixture.
5. COMPLETION AND RENTAL CODMNCEMENT DATE 1
The Commencement Date of the Lease as set forth in Item 3 of
the Basic Lease Provisions 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) Tenant's failure to approve or furnish its space
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 Non -Building Standard Work or
substitutions for the Building Standard materials made after
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 Non -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 (15t) as provided in Paragraph
°EXHIBIT • u B" -
TO OFFICE SPACE LEASE
2671014820.000113030557 2 00 101197 Page 4
�W)
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 rbut 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.
Event Time
a. Space Plan Approval Date. As specified in Item 7
(See Paragraph 1(a).) of the Basic Lease Pro-
visions.
b. Deadline for notifying Ten (14) days after
Landlord of Tenant's Space Plan Approval Date.
selection of Non -Building
Standard materials. (See
Paragraph I (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) . )
Three (3) days after
Tenant's receipt of cost
estimate from Landlord.
d. Deadline for notifying Ten (14) days after
Landlord of Tenant's Space Plan Approval Date.
request for substitution
for the Building Standard
materials. (See Paragraph
4(a) .)
e. Deadline for Tenant's
approval of Landlord's
estimate of increased
cost of substituted
materials and payment
for same. (See Paragraph
4(b).)
Three (3) days after
Tenant's receipt of cost
estimate from Landlord.
EXHIBIT nB"
TO OFFICE SPACE LEASE
Z61'0146.04MM0503n.2 .04101/47 Page 5
EXHIBIT "C"
LE AND-REgULATIONS
ATTACHED TO AND WHIR CONSTITUTE
PART OE OEFIr.E aPACE LEASE
The following Rules and Regulations shall be in effect at the
Project. Landlord reserves the right to adopt reasonable
modifications and additions hereto.
(1) The sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors or halls of the Building shall not
be obstructed by any tenant or used for any purpose other than
ingress and egress from the respective premises. The halls,
passages, entrances, elevators, stairways, balconies an,'J 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 shalljbe 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 hanging planters, television sets
or other objects shall be attached to or suspended from ceilings
without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used
in connection with, any window or door of the Premises without the
prior written consent of Landlord. All electrical ceiling fixtures
hung in offices or spaces along the perimeter of the Building must
be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord. No awnings, furniture, trees or plants or
other personal property shall be placed upon any balcony or patio,
without Landlord's prior written approval.
(3) No sign, advertisement or notice shall be exhibited,
painted or affixed by any tenant on any part of, or so as to be
seen from the outside of, the Premises or the Building without the
prior written consent of Landlord. In the event of the violation
of the foregoing by any tenant, Landlord may remove such sign,
advertisement or notice without any liability and may charge the
expense incurred in such removal to the tenant violating this rule.
Interior signs on doors and director tablet shall be inscribed,
painted or affixed for each tenant by Landlord at the expense of
such tenant, and shall be of a size, color and style acceptable to
Landlord.
(4) The sashes, sash doors, skylights, windows and doors that
reflect or admit light and air into the halls, passageways or other
public places in the Building shall not be covered or obstructed by
any tenant, nor shall any bottles, parcels or other articles be
placed on the windowsills, balcony or patio railings. i
(5) The water and wash closets and other plumbing fixtures
shall not be used for any purpose other than those for which they
were constructed, and no foreign substance of any kind shall be
thrown herein. All damages resulting from any misuse of the
fixtures shall be borne by the tenant who, or whose servants,
employees, agents, visitors or licensees shall have caused the
same.
(6) No tenant shall mark, paint, drill into, or in any way
deface any part of the Premises or the Building. No boring,
'EXHIBIT "C"
TO OFFICE SPACE LEASE
2671014820.00O r3a5oss7.2 AWMI s7 Page I
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 shalt not
affix the same to the floor of the Premises in any manner except by
a paste, or other material which may easily be removed with water,
the use of cement or other similar adhesive materials being
expressly prohibited. The method of affixing any such linoleum or
other similar floor covering to the floor, as well as the method of
affixing carpets or rugs to the Premises, shall be subject to
approval by Landlord. The expense of repairing any damage
resulting from a violation of this rule shall be borne by the
tenant by whom, or by those agents, clerks, employees or visitors,
the damage shall have been caused.
(7) If Tenant desires telephone or telegraph connections,
Landlord will direct electricians as to where and how the wires are
to be introduced.
(8) No bicycles, vehicles or animals of any kind shall be
brought into or kept in or about the Premises, and no cooking shall
be done or permitted by any tenant in the Premises, except that the
preparation of coffee, tea, hot chocolate and similar items for
tenants, their employees and visitors shall be permitted. No
tenant shall cause or permit any unusual or objectionable odors to
be produced in or permeate from or throughout the Premises.
(9) No portion of the Building shall be used for manu-
facturing or for the storage of merchandise except as such storage
may be incidental to the use of the Premises for general office
purposes without Landlord's prior written approval. No tenant
shall, without the prior written consent of the Landlord,, occupy or
permit any portion of his premises to be occupied or used for the
manufacture or sale of liquor, narcotics, or tobacco in any form,
as a medical office, chiropractor's office, as a barber or manicure
shop, or as an employment bureau or any business other -than that
specifically provided for in the Lease. No tenant shall engage or
pay any employees on its premises except those actually working for
such tenant on its premises nor advertise for laborers giving an
address at its premises. The Building shall not be. used for
lodging or sleeping or for any immoral or illegal purposes.
(10) Except with the prior written consent of the Landlord, no
tenant shall sell, or permit the sale at retail, of newspapers,
magazines, periodicals, or theater tickets, in or from the
Building, nor shall any tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Building for the
service or accommodation of occupants of any other portion of the
Building.
(11) Landlord reserves the right to prohibit personal goods
and services vendors (as such term is defined below) from access to
the Building. To the extent that Landlord permits such vendors
access to the Building, such access shall be upon such reasonable
terms and conditions, including but not limited to the payment of
a reasonable fee and provision for insurance coverage, as are
related to the safety, care and cleanliness of the Building, the
preservation of good order thereon,- and the relief of any financial
or other burden on Landlord occasioned by the presence of such
vendors or the sale by them of personal goods or services (as such
term is defined below) to a tenant or its employees. If reasonably
necessary for the accomplishment of the aforementioned purposes,
Landlord may exclude a particular vendor entirely or limit the
number of vendors who may be present at any one time in the
Building. The term "personal goods or services vendors" means
persons who periodically enter the Building for the purpose of
selling goods or services to a tenant, other than goods or services
which are used by a tenant only for the purpose of conducting its
business on its premises. "Personal goods or services" include,
OEXHIBIT-"C" J
TO OFFICE SPACE -LEASE 7
26710I4820-000113030557.2 a(9101M Page 2
but are not limited to, drinking water and other beverages, food,
barbering services, and shoe shining services.
(12) No tenant shall make, or permit to be made', any unseemly
or disturbing noises or disturb or interfere with occupants of this
or neighboring buildings or premises or those having business with
them by the use of any musical instrument, radio, phonograph or
unusual noise, or in any other way.
(13) No tenant shall throw anything out of doors, windows or
skylights or down the passageways.
(14) No tenant, nor any of a tenant' servants, employees,
agents, visitors or licensees, shall at any time bring, keep or use
on the Building any kerosene, gasoline, or inflammable,
combustible, explosive, or corrosive fluid, or any other
illuminating material, or use any method of heating other. than that
supplied by Landlord.
(15) No tenant shall sweep or throw or permit to be swept or
thrown from the Premises any dirt or other substance into'any of
the corridors or halls or elevators, or out of the doors, windows,
stairways, patios or balconies of the Building, and Tenant shall
not use, keep or permit to be used or kept any foul or noxious gas
or substance in the Premises, or permit or suffer the Premises to
be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise,
odors and/or vibrations, or interfere in any way with other tenants
or those having business therein, nor shall any animals or birds be
kept in or about the Building. smoking or carrying lighted cigars,
cigarettes, pipes, or other lighted smoking materials, in the
elevators and all other common and/or public areas of the Building
is prohibited.
(16) No additional locks or bolts or any kind shall be placed
upon any of the doors or windows by any tenant, nor shall any
changes be made in existing locks or the mechanisms thereof unless
Landlord is first notified thereof and gives written approval.
Each tenant must, upon termination of his tenancy, give to Landlord
all keys of stores, offices, or toilets and toilet rooms, either
furnished to, or otherwise procured by, such tenant, and in the
event of the loss of any keys so furnished, such tenant shall pay
Landlord the cost of replacing the same or of changing the lock or
locks opened by such lost key if Landlord shall deem it necessary
to make such change.
(17) All removals, or the carrying in or out of any safes,
freight, furniture, or bulky matter of any description must take
place during the hours which Landlord may determine from time to
time. The moving of safes or other fixtures or bulky matter of any
kind must be made upon previous notice to the manager of the
Building and under his/her supervision, and the persons employed by
any tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes, freight or other bulky
articles to be brought into the Building and to exclude from the
Building and all such bulky articles which violate any of the Rules
and Regulations or the Lease of which these Rules and Regulations
are a part. Landlord reserves the right to prescribe the weight
and position of all safes, which must be placed upon supports
approved by Landlord to distribute the weight.
(18) No tenant shall purchase janitorial, maintenance or other
services from any company or persons not approved by Landlord. Any
person employed by any tenant to do janitorial work shall, while in
the Building and outside of the Premises, be subject to and under
the control and direction of the office or management of the
Building (but not as an agent or servant of Landlord, and the
tenant shall be responsible for all acts of such persons). Except
with Landlord's prior written approval, no tenant shall permit
janitorial services to be performed during the hours of 7:00 a.m.
to 6:00 p.m, Monday through Friday.
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2671014820.0001/3050557.2 AW/01W 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 1:00 p.m. to 9:00 a.m., Sundays, those
legal holidays designated by Landlord, and on other days between
the hours of 6:00 p.m. and 7:30 a.m., access to the Building or to
the halls, corridors, elevators or stairways in the Building, or to
the Premises may be refused unless the person seeking access is
known to the building watchman, if any, in charge and has a pass or
is properly identified. Landlord shall in no case be liable for
damages for the admission to or exclusion from the Building of any
person whom Landlord has the right to exclude. Each tenant shall
be responsible for all persons for whom he requests after hours
access and shall be liable to Landlord for all acts of such
persons. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right but shall not be
obligated to prevent access to the Building during the continuance
of the same by closing the doors or otherwise, for the safety of
the tenants and protection of property in the Building.
(21) All doors opening into public corridors shall be kept
closed, except when in use for ingress and egress. Tenants shall
see that the windows, transoms and doors of their premises are
closed and securely locked before leaving the Building.
(22 ) The requirements of tenants will be attended to only upon
application to the manager of the Building.
(23) Canvassing, soliciting and peddling in the Building are
prohibited and each tenant shall cooperate to prevent the same.
(24) There shall not be used in any space, or in the public
halls of the Building, either by any tenant or others, any hand
trucks except those equipped with rubber tires and side guards.
(25) No vending or coin operated machines shall be placed by
any tenant within his premises without the prior written consent of
Landlord.
. EXHIBIT -" "
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