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EXHIBIT 10.27
Xxxxxxx Xxxxx CB Commercial Real Estate Group
Brokerage and Management
Licensed Real Estate Broker
ARTICLE ONE: BASIC TERMS
This Article One contains the Basic Terms of this Lease between the
Landlord and Tenant named below. Other Articles, Sections and Paragraphs of the
Lease referred to in this Article One explain and define the Basic Terms and are
to be read in conjunction with the Basic Terms.
SECTION 1.01 DATE OF LEASE: January 27, 1999.
SECTION 1.02 LANDLORD (INCLUDE LEGAL ENTITY): Westcap Properties, Inc.
(A California Corporation). Address of Landlord: 0000 Xxxxx Xxxxxx Xxxxx, Xxxxx
000, Xxx Xxxxx, XX 00000.
SECTION 1.03 TENANT (INCLUDE LEGAL ENTITY): DOCUMENT SCIENCES
CORPORATION (a Delaware Corporation). Address of Tenant: 0000 Xxxxxxxxx Xxxxx,
Xxxxx 000, Xxx Xxxxx, XX 00000-0000
SECTION 1.04 PROPERTY: (INCLUDE STREET ADDRESS, APPROXIMATE SQUARE
FOOTAGE AND DESCRIPTION): 0000 Xxxxx Xxx Xxxx, Xxxxxxxx, XX (containing
approximately 21,300 rentable square feet).
SECTION 1.05 LEASE TERM: six(6) years zero (0) months beginning on March
1, 1999, and ending on February 28, 2005.
SECTION 1.06 PERMITTED USES: (See Article Five) Office and Production of
Software Products.
SECTION 1.07 TENANT'S GUARANTOR: (If none, so state) None.
SECTION 1.08 BROKERS: (See Article Fourteen) (If none, so state).
Landlord's Broker: Xxxxxx Xxxxx - CB Xxxxxxx Xxxxx, Inc.
Tenant's Broker: Xxxxx Xxxxxxxxxx - Xxx & Associates
SECTION 1.09 COMMISSION PAYABLE TO LANDLORD'S BROKER: (See Article
Fourteen) $As per written agreement dated February 16, 1998.
SECTION 1.10 INITIAL SECURITY DEPOSIT: (See Section 3.03) $Eighteen
Thousand Five Hundred Thirty-One and no/100 ($18,531.00) Dollars.
SECTION 1.11 VEHICLE PARKING SPACES ALLOCATED TO TENANT: All parking
existing now on subject property (Approximately 80 spaces.)
SECTION 1.12 RENT AND OTHER CHARGES PAYABLE BY TENANT:
(a) BASE RENT: Eighteen Thousand Five Hundred Thirty-One &
no/100 Dollars ($18,531.00) per month, for the first twelve (12) months, as
provided in Section 3.01, and shall be increased on the first day of the 13th,
25th, 37th, 49th & 61st month(s) after the Commencement Date, either (i) as
provided in Section 3.02, or (ii) See Addendum. (If (ii) is completed, then (i)
and Section 3.02 are inapplicable.)
(b) OTHER PERIODIC PAYMENTS: (i) Real Property Taxes (See
Section 4.02); (ii) Utilities (See Section 4.03); (iii) Insurance Premiums (See
Section 4.04); (iv) Impounds for Insurance Premiums and Property Taxes (See
Section 4.07); (v) Maintenance Repairs and Alterations* (See Article Six). *
including common area maintenance.
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SECTION 1.13 LANDLORD'S SHARE OF PROFIT ON ASSIGNMENT OR SUBLEASE: (See
Section 9.05) Fifty percent (50%) of the Profit (the "Landlord's Share").
SECTION 1.14 RIDERS: The following Riders are attached to and made a
part of this Lease: (If none, so state): _________________
(1) Addendum
(2) Option to Extend
(3) Disclosures and Acknowledgement
ARTICLE TWO: LEASE TERM
SECTION 2.01 LEASE OF PROPERTY FOR LEASE TERM. Landlord leases the
Property to Tenant and Tenant leases the Property from Landlord for the Lease
Term. The Lease Term is for the period stated in Section 1.05 above and shall
begin and end on the dates specified in Section 1.05 above, unless the beginning
or end of the Lease Term is changed under any provision of this Lease. The
"Commencement Date" shall be the date specified in Section 1.05 above for the
beginning of the Lease Term, unless advanced or delayed under any provision of
this Lease.
SECTION 2.02 DELAY IN COMMENCEMENT. Landlord shall not be liable to
Tenant if Landlord does not deliver possession of the Property to Tenant on the
Commencement Date. Landlord's non-delivery of the Property to Tenant on that
date shall not affect this Lease or the obligations of Tenant under this Lease
except that the Commencement Date shall be delayed until Landlord delivers
possession of the Property to Tenant and the Lease Term shall be extended for a
period equal to the delay in delivery of possession of the Property to Tenant,
plus the number of days necessary to end the Lease Term on the last day of a
month. If Landlord does not deliver possession of the Property to Tenant within
sixty (60) days after the Commencement Date, Tenant may elect to cancel this
Lease by giving written notice to Landlord within ten (10) days after the sixty
(60)-day period ends. If Tenant gives such notice, the Lease shall be cancelled
and neither Landlord nor Tenant shall have any further obligations to the other.
If Tenant does not give such notice, Xxxxxx's right to cancel the Lease shall
expire and the Lease Term shall commence upon the delivery of possession of the
Property to Tenant. If delivery of possession of the Property to Tenant is
delayed, Landlord and Tenant shall, upon such delivery, execute an amendment to
this Lease setting forth the actual Commencement Date and expiration date of the
Lease. Failure to execute such amendment shall not affect the actual
Commencement Date and expiration date of the Lease.
SECTION 2.03 EARLY OCCUPANCY. If Tenant occupies the Property prior to
the Commencement Date, Xxxxxx's occupancy of the Property shall be subject to
all of the provisions of this Lease. Early occupancy of the Property shall not
advance the expiration date of this Lease. Tenant shall pay Base Rent and all
other charges specified in this Lease for the early occupancy period.
SECTION 2.04 HOLDING OVER. Tenant shall vacate the Property upon the
expiration or earlier termination of this Lease. Tenant shall reimburse Landlord
for and indemnify Landlord against all damages which Landlord incurs from
Xxxxxx's delay in vacating the Property. If Tenant does not vacate the Property
upon the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Xxxxxx's occupancy of the Property shall be a
"month-to-month" tenancy, subject to all of the terms of this Lease applicable
to a month-to-month tenancy, except that the Base Rent then in effect shall be
increased by twenty-five percent (25%).
ARTICLE THREE: BASE RENT
SECTION 3.01 TIME AND MANNER OF PAYMENT. Upon execution of this Lease.
Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph
1.12(a) above for the first month of the Lease Term. On the first day of the
second month of the Lease Term and each month thereafter, Tenant shall pay
Landlord the Base Rent, in advance, without offset, deduction or prior demand.
The Base Rent shall be payable at Landlord's address or at a such other place as
Landlord may designate in writing.
Section 3.02 Section deleted.
SECTION 3.03 SECURITY DEPOSIT; INCREASES.
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(a) Upon the execution of this Lease, Tenant shall deposit with
Landlord a cash Security Deposit in the amount set forth in Section 1.10 above.
Landlord may apply all or part of the Security Deposit to any unpaid rent or
other charges due from Tenant or to cure any other defaults of Tenant. If
Landlord uses any part of the Security Deposit, Tenant shall restore the
Security Deposit to its full amount within ten (10) days after Landlord's
written request. Tenant's failure to do so shall be a material default under
this Lease. No interest shall be paid on the Security Deposit. Landlord shall
not be required to keep the Security Deposit separate from its other accounts
and no trust relationship is created with respect to the Security Deposit.
(b) Each Time the Base Rent is increased, Tenant shall deposit
additional funds with Landlord sufficient to increase the Security Deposit to an
amount which bears the same relationship to the adjusted Base Rent as the
initial Security Deposit bore to the initial Base Rent.
SECTION 3.04 TERMINATION; ADVANCE PAYMENTS. Upon termination of this
Lease Article Seven Damage or Destruction), Article Eight (Condemnation) or any
other termination not resulting from Xxxxxx's default, and after Tenant has
vacated the Property in the manner required by this Lease, Landlord shall refund
or credit to Tenant (or Tenant's successor) the unused portion of the Security
Deposit, any advance rent or other advance payments made by Tenant to Landlord,
and any amounts paid for real property taxes and other reserves which apply to
any time periods after termination of the Lease.
ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT
SECTION 4.01 ADDITIONAL RENT. All charges payable by Tenant other than
Base Rent are called "Additional Rent." Unless this Lease provides otherwise,
Tenant shall pay all Additional Rent then due with the next monthly installment
of Base Rent. The term "rent" shall mean Base Rent and Additional Rent.
SECTION 4.02 PROPERTY TAXES.
(a) REAL PROPERTY TAXES. Tenant shall pay all real property
taxes on the Property (including any fees, taxes or assessments against, or as a
result of, any tenant improvements installed on the Property by or for the
benefit of Tenant) during the Lease Term. Subject to Paragraph 4.02(c) and
Section 4.07 below, such payment shall be made at least ten (10) days prior to
the delinquency date of the taxes. Prior to such ten (10) day period, Tenant
shall furnish Landlord with satisfactory evidence that the real property taxes
have been paid. Landlord shall reimburse Tenant for any real property taxes paid
by Tenant covering any period of time prior to or after the Lease Term. If
Tenant fails to pay the real property taxes when due, Landlord may pay the taxes
and Tenant shall reimburse Landlord for the amount of such tax payment as
Additional Rent.
(b) DEFINITION OF "REAL PROPERTY TAX." "Real property tax"
means: (i) any fee, license fee, license tax, business license fee, commercial
rental tax, levy, charge, assessment, penalty or tax imposed by any taxing
authority against the Property; (ii) any tax on the Landlord's right to receive,
or the receipt of, rent or income from the Property or against Landlord's
business of leasing the Property; (iii) any tax or charge for fire protection,
streets, sidewalks, road maintenance, refuse or other services provided to the
Property by any governmental agency; (iv) any tax imposed upon this transaction
or based upon a re-assessment of the Property due to a change of ownership, as
defined by applicable law, or other transfer of all or part of Landlord's
interest in the Property; and (v) any charge or fee replacing any tax previously
included within the definition of real property tax. "Real property tax" does
not, however, include Landlord's federal or state income, franchise, inheritance
or estate taxes.
(c) JOINT ASSESSMENT. If the Property is not separately
assessed, Landlord shall reasonably determine Tenant's share of the real
property tax payable by Tenant under Paragraph 4.02(a) from the assessor's
worksheets or other reasonably available information. Tenant shall pay such
share to Landlord within fifteen (15) days after receipt of Landlord's written
statement.
(d) PERSONAL PROPERTY TAXES.
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(i)Tenant shall pay all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to
Tenant. Tenant shall try to have personal property taxed separately from the
Property.
(ii) If any of Tenant's personal property is taxed with
the Property, Tenant shall pay Landlord the taxes for the personal property
within fifteen (15) days after Xxxxxx receives a written statement from Landlord
for such personal property taxes.
(e) TENANT'S RIGHT TO CONTEST TAXES. Tenant may attempt to have
the assessed valuation of the Property reduced or may initiate proceedings to
contest the real property taxes. If required by law, Landlord shall join in the
proceedings brought by Xxxxxx. However, Tenant shall pay all costs of the
proceedings, including any costs or fees incurred by Landlord. Upon the final
determination of any proceeding or contest, Xxxxxx shall immediately pay the
real property taxes due, together with all costs, charges, interest and
penalties incidental to the proceedings. If Tenant does not pay the real
property taxes when due and contests such taxes, Tenant shall not be in default
under this Lease for nonpayment of such taxes if Tenant deposits funds with
Landlord or opens an interest-bearing account reasonably acceptable to Landlord
in the joint names of Landlord and Xxxxxx. The amount of such deposit shall be
sufficient to pay the real property taxes plus a reasonable estimate of the
interest, costs, charges and penalties which may accrue if Tenant's action is
unsuccessful, less any applicable tax impounds previously paid by Tenant to
Landlord. The deposit shall be applied to the real property taxes due, as
determined at such proceedings. The real property taxes shall be paid under
protest from such deposit if such payment under protest is necessary to prevent
the Property from being sold under a "tax sale" or similar enforcement
proceeding.
SECTION 4.03 UTILITIES. Tenant shall pay, directly to the appropriate
supplier, the cost of all natural gas, heat, light, power, sewer service,
telephone, water, refuse disposal and other utilities and services supplied to
the Property. However, if any services or utilities are jointly metered with
other property, Landlord shall make a reasonable determination of Tenant's
proportionate share of the cost of such utilities and services and Tenant shall
pay such share to Landlord within fifteen (15) days after receipt of Landlord's
written statement.
SECTION 4.04 INSURANCE POLICIES.
(a) LIABILITY INSURANCE. During the Lease Term, Tenant shall
maintain a policy of commercial general liability insurance (sometimes known as
broad form comprehensive general liability insurance) insuring Tenant against
liability for bodily injury, property damage (including loss of use of property)
and personal injury arising out of the operation, use or occupancy of the
Property. Tenant shall name Landlord as an additional insured under such policy.
The initial amount of such insurance shall be One Million Dollars ($1,000,000)
per occurrence and shall be subject to periodic increase based upon inflation,
increased liability awards, recommendation of Landlord's professional insurance
advisers and other relevant factors. The liability insurance obtained by Tenant
under this Paragraph 4.04(a) shall (i) be primary and non-contributing; (ii)
contain cross-liability endorsements; and (iii) insure Landlord against Tenant's
performance under Section 5.05, if the matters giving rise to the indemnity
under Section 5.05 result from the negligence of Tenant. The amount and coverage
of such insurance shall not limit Tenant's liability nor relieve Tenant of any
other obligation under this Lease. Landlord may also obtain comprehensive public
liability insurance in an amount and with coverage determined by Landlord
insuring Landlord against liability arising out of ownership, operation, use or
occupancy of the Property. The policy obtained by Landlord shall not be
contributory and shall not provide primary insurance.
(b) PROPERTY AND RENTAL INCOME INSURANCE. During the Lease Term,
Landlord shall maintain policies of insurance covering loss of or damage to the
Property in the full amount of its replacement value. Such policy shall contain
an Inflation Guard Endorsement and shall provide protection against all perils
included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk), sprinkler leakage and
any other perils which Landlord deems reasonably necessary. Landlord shall have
the right to obtain flood and earthquake insurance. Landlord shall not obtain
insurance for Tenant's fixtures or equipment or building improvements installed
by Tenant on the Property. During the Lease Term, Landlord shall also maintain a
rental income insurance policy, with loss payable to Landlord, in an amount
equal to one year's Base Rent, plus estimated real property taxes and insurance
premiums. Tenant shall be liable for the payment of any deductible amount under
Landlord's or
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Tenant's insurance policies maintained pursuant to this Section 4.04, in an
amount not to exceed Ten Thousand Dollars ($10,000.00). Tenant shall not do or
permit anything to be done which invalidates any such insurance policies.
(c) PAYMENT OF PREMIUMS. Subject to Section 4.07, Tenant shall
pay all premiums for the insurance policies described in Paragraphs 4.04(a) and
(b) (whether obtained by Landlord or Tenant) within fifteen (15) days after
Xxxxxx's receipt of a copy of the premium statement or other evidence of the
amount due, except Landlord shall pay all premiums for non-primary comprehensive
public liability insurance which Landlord elects to obtain as provided in
Paragraph 4.04(a). If insurance policies maintained by Landlord cover
improvements on real property other than the Property, Landlord shall deliver to
Tenant a statement of the premium applicable to the Property showing in
reasonable detail how Tenant's share of the premium was computed. If the Lease
Term expires before the expiration of an insurance policy maintained by
Landlord, Tenant shall be liable for Tenant's prorated share of the insurance
premiums. Before the Commencement Date, Tenant shall deliver to Landlord a copy
of any policy of insurance which Tenant is required to maintain under this
Section 4.04. At least thirty (30) days prior to the expiration of any such
policy, Tenant shall deliver to Landlord a renewal of such policy. As an
alternative to providing a policy of insurance, Tenant shall have the right to
provide Landlord a certificate of insurance, executed by an authorized officer
of the insurance company, showing that the insurance which Tenant is required to
maintain under this Section 4.04 is in full force and effect and containing such
other information which Landlord reasonably requires.
(d) GENERAL INSURANCE PROVISIONS.
(i) Any insurance which Tenant is required to maintain
under this Lease shall include a provision which requires the insurance carrier
to give Landlord not less than thirty (30) day's written notice prior to any
cancellation or modification of such coverage.
(ii) If Tenant fails to deliver any policy, certificate
or renewal to Landlord required under this Lease within the prescribed time
period or if any such policy is cancelled or modified during the Lease Term
without Landlord's consent, Landlord may obtain such insurance, in which case
Tenant shall reimburse Landlord for the cost of such insurance within fifteen
(15) days after receipt of a statement that indicates the cost of such
insurance.
(iii) Tenant shall maintain all insurance required under
this Lease with companies holding a "General Policy Rating" or A-12 or better,
as set forth in the most current issue of "Best Key Rating Guide". Landlord and
Tenant acknowledge the insurance markets are rapidly changing and that insurance
in the form and amounts described in this Section 4.04 may not be available in
the future. Tenant acknowledges that the insurance described in this Section
4.04 is for the primary benefit of Landlord. If at any time during the Least
Term, Tenant is unable to maintain the insurance required under the Lease,
Tenant shall nevertheless maintain insurance coverage which is customary and
commercially reasonable in the insurance industry for Tenant's type of business,
as that coverage may change from time to time. Xxxxxxxx makes no representation
as to the adequacy of such insurance to protect Xxxxxxxx's or Xxxxxx's
interests. Therefore, Tenant shall obtain any such additional property or
liability insurance which Tenant deems necessary to protect Landlord and Tenant.
(iv) Unless prohibited under any applicable insurance
policies maintained, Landlord and Tenant each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents or
representatives of the other, for loss of or damage to its property or the
property of others under its control, if such loss or damage is covered by any
insurance policy in force (whether or not described in this Lease) at the time
of such loss or damage. Upon obtaining the required policies of insurance,
Landlord and Tenant shall give notice to the insurance carriers of this mutual
waiver of subrogation.
SECTION 4.05 LATE CHARGES. Xxxxxx's failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The exact amount of such costs are
impractical or extremely difficult to ascertain. Such costs may include, but are
not limited to, processing and accounting charges and late charges which may be
imposed on Landlord by any ground lease, mortgage or trust deed encumbering the
Property. Therefore, if Landlord does not receive any rent payment within ten
(10) days after it becomes due, Tenant shall pay Landlord a late charge equal to
ten percent (10%) of the overdue amount. The parties agree that such late charge
represents a fair and reasonably estimate of the costs Landlord will incur by
reason of such late payment.
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SECTION 4.06 INTEREST ON PAST DUE OBLIGATIONS. Any amount owed by Tenant
to Landlord which is not paid when due shall bear interest at the rate of ten
percent (10%) per annum from due date of such amount. However, interest shall
not be payable on late charges to be paid by Tenant under this Lease. The
payment of interest on such amounts shall not excuse or cure any default by
Tenant under this Lease. If the interest rate specified in this Lease is higher
than the rate permitted by law, the interest rate is hereby decreased to the
maximum legal interest rate permitted by law.
SECTION 4.07 IMPOUNDS FOR INSURANCE PREMIUMS AND REAL PROPERTY TAXES. If
requested by any ground lessor or lender to whom Landlord has granted a security
interest in the Property, or if Tenant is more than ten (10) days late in the
payment of rent more than once in any consecutive twelve (12)-month period,
Tenant shall pay Landlord a sum equal to one-twelfth (1/12) of the annual real
property taxes and insurance premiums payable by Tenant under this Lease,
together with each payment of Base Rent. Landlord shall hold such payments in a
non-interest bearing impound account. If unknown, Landlord shall reasonably
estimate the amount of real property taxes and insurance premiums when due.
Tenant shall pay any deficiency of funds in the impound account to Landlord upon
written request. If Tenant defaults under this Lease, Landlord may apply any
funds in the impound account to any obligation then due under this Lease.
ARTICLE FIVE: USE OF PROPERTY
SECTION 5.01 PERMITTED USES. Tenant may use the Property only for the
Permitted Uses set forth in Section 1.06 above.
SECTION 5.02 MANNER OF USE. Tenant shall not cause or permit the
property to be used in any way which constitutes a violation of any law,
ordinance, or governmental regulation or order, which annoys or interferes with
the rights of other tenants of Landlord, or which constitutes a nuisance or
waste. Tenant shall obtain and pay for all permits, including a Certificate of
Occupancy, required for Tenant's occupancy of the Property and shall promptly
take all actions necessary to comply with all applicable statutes, ordinances,
rules, regulations, orders and requirements regulating the use by Tenant of the
Property, including the Occupational Safety and Health Act.
SECTION 5.03 HAZARDOUS MATERIALS. As used in this Lease, the term
"Hazardous Material" means any flammable items, explosives, radioactive
materials, hazardous or toxic substances, material or waste or related
materials, including any substances defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials" or "toxic
substances" now or subsequently regulated under any applicable federal, state or
local laws or regulations, including without limitation petroleum-based
products, paints, solvents, lead, cyanide, DDT, printing inks, acids,
pesticides, ammonia compounds and other chemical products, asbestos, PCBs and
similar compounds, and including any different products and materials which are
subsequently found to have adverse effects on the environment or the health and
safety of persons. Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Property by Tenant, its agents, employees, contractors, sublessees or
invitees without the prior written consent of Landlord. Landlord shall be
entitled to take into account such other factors or facts as Landlord may
reasonably determine to be relevant in determining whether to grant or withhold
consent to Tenant's proposed activity with respect to Hazardous Material. In no
event, however, shall Landlord be required to consent to the installation or use
of any storage tanks on the Property.
SECTION 5.04 SIGNS AND AUCTIONS. Tenant shall not place any signs on the
Property without Landlord's prior written consent. Tenant shall not conduct or
permit any auctions or sheriff's sales at the Property.
SECTION 5.05 INDEMNITY. Tenant shall indemnify Landlord against and hold
Landlord harmless from any and all costs, claims or liability arising from: (a)
Tenant's use of the Property; (b) the conduct of Tenant's business or anything
else done or permitted by Tenant to be done in or about the Property, including
any contamination of the Property or any other property resulting from the
presence or use of Hazardous Material caused or permitted by Tenant; (c) any
breach or default in the performance of Tenant's obligations under this Lease;
(d) any misrepresentation or breach of warranty by Tenant under this Lease; or
(e) other acts or omissions of Tenant. Tenant shall defend Landlord against any
such cost, claim or liability at Xxxxxx's expense with counsel reasonably
acceptable to Landlord or, at Landlord's election, Tenant shall reimburse
Landlord for any legal fees or costs incurred by Landlord in connection with any
such claim. As a material part of the consideration to Landlord, Xxxxxx assumes
all risk of damage to property or
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injury to persons in or about the Property arising from any cause, and Tenant
hereby waives all claims in respect thereof against Landlord, except for any
claim arising out of Landlord's negligence or willful misconduct. As used in
this Section, the term "Tenant" shall include Tenant's employees, agents,
contractors and invitees, if applicable.
SECTION 5.06 LANDLORD'S ACCESS. Landlord or its agents may enter the
Property at all reasonable times to show the Property to potential buyers,
investors or tenants or other parties; to do any other act or to inspect and
conduct tests in order to monitor Tenant's compliance with all applicable
environmental laws and all laws governing the presence and use of Hazard
Material; or for any other purpose Landlord deems necessary. Landlord shall give
Tenant prior notice of such entry, except in the case of an emergency. Landlord
may place customary "For Sale" or "For Lease" signs on the Property.
SECTION 5.07 QUIET POSSESSION. If Tenant pays the rent and complies with
all other terms of this Lease, Tenant may occupy and enjoy the Property for the
full Lease Term, subject to the provisions of this Lease.
ARTICLE SIX: CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS
SECTION 6.01 EXISTING CONDITIONS. Tenant accepts the Property in its
condition as of the execution of the Lease, subject to all recorded matters,
laws, ordinances, and governmental regulations and orders. Except as provided
herein, Xxxxxx acknowledges that neither Xxxxxxxx nor any agent of Landlord has
made any representation as to the condition of the Property or the suitability
of the Property for Xxxxxx's intended use. Tenant represents and warrants that
Tenant has made its own inspection of any inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto. If Landlord or Landlord's Broker has provided a Property
Information Sheet or other Disclosure Statement regarding the Property, a copy
is attached as an exhibit to the Lease.
SECTION 6.02 EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be
liable for any damage or injury to the person, business (or any loss of income
therefrom), goods, wares, merchandise or other property of Tenant. Tenant's
employees, invitees, customers or any other person in or about the Property,
whether such damage or injury is caused by or results from: (a) fire, steam,
electricity, water, gas or rain; (b) the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or
lighting fixtures or any other cause; (c) conditions arising in or about the
Property or upon other portions of the Project; or from other sources or places;
or Landlord shall not be liable for any such damage or injury even though the
cause of or the means of repairing such damage or injury are not accessible to
Tenant. The provisions of this Section 6.02 shall not, however, exempt Landlord
from liability or Landlord's negligence or willful misconduct.
SECTION 6.03 LANDLORD'S OBLIGATIONS. Subject to the provisions of
Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord
shall have absolutely no responsibility to repair, maintain or replace any
portion of the Property at any time. Tenant waives the benefit of any present or
future law which might give Tenant the right to repair the Property at
Landlord's expense or to terminate the Lease due to the condition of the
Property.
SECTION 6.04 TENANT'S OBLIGATIONS.
(a) Except as provided in Article Seven (Damage or Destruction)
and Article Eight (Condemnation), Tenant shall keep all portions of the Property
(including structural, nonstructural, interior, exterior, and landscaped areas,
portions, systems and equipment) in good order, condition and repair (including
interior repainting and refinishing, as needed). If any portion of the Property
or any system or equipment on the Property which Tenant is obligated to repair
cannot be fully repaired or restored, Tenant shall promptly replace such portion
of the Property or system or equipment in the Property, regardless of whether
the benefit of such replacement extends beyond the Lease Term; but if the
benefit or useful life of such replacement extends beyond the Lease Term (as
such term may be extended by exercise of any options), the useful life of such
replacement shall be prorated over the remaining portion of the Lease Term (as
extended), and Tenant shall be liable only for that portion of the cost which is
applicable to the Lease Term (as extended). Tenant shall maintain a preventive
maintenance contract providing for the regular inspection and maintenance of the
heating and air conditioning system by a licensed heating and air conditioning
contractor. If any part of the Property is damaged by any act or omission of
Tenant, Tenant shall pay Landlord the cost of repairing or replacing such
damaged property, whether or not Landlord would otherwise be obligated to pay
the cost of maintaining or
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repairing such property. It is the intention of Landlord and Tenant that at all
times Tenant shall maintain the portions of the Property which Tenant is
obligated to maintain in an attractive, first-class and fully operative
condition.
(b) Tenant shall fulfill all of Tenant's obligations under this
Section 6.04 at Tenant's sole expense. If Tenant fails to maintain, repair or
replace the Property as required by this Section 6.04, Landlord may, upon ten
(10) days' prior notice to Tenant (except that no notice shall be required in
the case of an emergency), enter the Property and perform such maintenance or
repair (including replacement, as needed) on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs incurred in performing such
maintenance or repair immediately upon demand.
SECTION 6.05 ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
(a) Tenant shall not make any alterations, additions, or
improvements to the Property without Landlord's prior written consent. Landlord
may require Tenant to provide demolition and/or lien and completion bonds in
form and amount satisfactory to Landlord. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph 6.05(a) upon Landlord's written request. All alterations, additions,
and improvements shall be done in a good and workmanlike manner, in conformity
with all applicable laws and regulations, and by a contractor approved by
Landlord. Upon completion of any such work, Tenant shall provide Landlord with
"as built" plans, copies of all construction contracts, and proof of payment for
all labor and materials.
(b) Tenant shall pay when due all claims for labor and material
furnished to the Property. Tenant shall give Landlord at least twenty (20) days'
prior written notice of the commencement of any work on the Property. Landlord
may elect to record and post notices of non-responsibility on the Property.
SECTION 6.06 CONDITION UPON TERMINATION. Upon the termination of the
Lease, Xxxxxx shall surrender the Property to Landlord, broom clean and in the
same condition as received except for ordinary wear and tear which Tenant was
not otherwise obligated to remedy under any provision of this Lease. However,
Tenant shall not be obligated to repair any damage which Landlord is required to
repair under Article Seven (Damage or Destruction). In addition, Landlord may
require Tenant to remove any alterations, additions or improvements (whether or
not made with Xxxxxxxx's consent) prior to the expiration of the Lease and to
restore the Property to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not required Tenant
to remove shall become Landlord's property and shall be surrendered to Landlord
upon the expiration or earlier termination of the Lease, except that Tenant may
remove any of Tenant's machinery or equipment which can be removed without
material damage to the Property. Tenant shall repair, at Tenant's expense, any
damage to the Property caused by the removal of any such machinery or equipment.
In no event, however, shall Tenant remove any of the following materials or
equipment (which shall be deemed Landlord's property) without Landlord's prior
written consent: any power wiring or power panels; lighting or lighting
fixtures; wall coverings; drapes, blinds or other window coverings; carpets or
other floor coverings; heaters, air conditioners or any other heating or air
conditioning equipment; fencing or security gates; or other similar building
operating equipment and decorations.
ARTICLE SEVEN: DAMAGE OR DESTRUCTION
SECTION 7.01 PARTIAL DAMAGE TO PROPERTY.
(a) Tenant shall notify Landlord in writing immediately upon the
occurrence of any damage to the Property. If the Property is only partially
damaged (i.e., less than fifty percent (50%) of the Property is untenantable as
a result of such damage or less than fifty percent (50%) of Tenant's operations
are materially impaired) and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are sufficient to pay for the
necessary repairs, this Lease shall remain in effect and Landlord shall repair
the damage as soon as reasonably possible. Landlord may elect (but is not
required) to repair any damage to Tenant's fixtures, equipment, or improvements.
(b) If the insurance proceeds recorded by Landlord are not
sufficient to pay the entire cost of repair, or if the cause of the damage is
not covered by the insurance policies which Landlord maintains under Paragraph
4.04(b), Landlord may elect either to (i) repair the damage as soon as
reasonably possible, in which case this Lease shall remain in full force and
effect, or (ii) terminate this Lease as of the date the damage occurred.
Landlord shall notify Tenant within thirty (30) days after receipt of notice of
the occurrence of the damage whether Landlord elects to repair
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the damage or terminate the Lease. If Landlord elects to repair the damage,
Tenant shall pay Landlord the "deductible amount" (if any) under Landlord's
insurance policies and if the damage was due to an act or omission of Tenant, or
Tenant's employees, agents, contractors or invitees, the difference between the
actual cost of repair and any insurance proceeds received by Landlord. If
Landlord elects to terminate the Lease, Tenant may elect to continue this Lease
in full force and effect, in which case Tenant shall repair any damage to the
Property and any building in which the Property is located. Tenant shall pay the
cost of such repairs, except that upon satisfactory completion of such repairs.
Landlord shall deliver to Tenant any insurance proceeds received by Landlord for
the damage repaired by Xxxxxx. Tenant shall give Landlord written notice of such
election within ten (10) days after receiving Landlord's termination notice.
(c) If the damage to the Property occurs during the last six (6)
months of the Lease Term and such damage will require more than thirty (30) days
to repair, either Landlord or Tenant may elect to terminate this Lease as of the
date the damage occurred, regardless of the sufficiency of any insurance
proceeds. The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Xxxxxx's notice to Landlord of the occurrence of the damage.
Section 7.02 SUBSTANTIAL OR TOTAL DESTRUCTION. If the Property is
substantially or totally damaged by any cause whatsoever (i.e., the damage to
the Property is greater than partial damage is described in Section 7.01)
whether Landlord receives any insurance proceeds, this Lease shall terminate as
of the date the destruction occurred. Notwithstanding the preceding sentence, if
the Property can be rebuilt within six (6) months after the date of destruction,
Landlord may elect to rebuild the Property at Landlord's own expense, in which
case this Lease shall remain in full force and effect. Landlord shall notify
Tenant of such election within thirty (30) days after Xxxxxx's notice of the
occurrence of total or substantial destruction. If Landlord so elects, Landlord
shall rebuild the Property at Landlord's sole expense, except that if the
destruction was caused by an act or omission of Tenant, Tenant shall pay
Landlord the difference between the actual cost of rebuilding and any insurance
proceeds received by Landlord.
SECTION 7.03 TEMPORARY REDUCTION OF RENT. If the Property is destroyed
or damaged and Landlord or Tenant repairs or restores the Property pursuant to
the provisions of this Article Seven, any rent payable during the period of such
damage, repair and/or restoration shall be reduced according to the degree, if
any, to which Xxxxxx's use of the Property is impaired. However, the reduction
shall not exceed the sum of one year's payment of Base Rent, insurance premiums
and real property taxes. Except for such possible reduction in Base Rent,
insurance premiums and real property taxes, Tenant shall not be entitled to any
compensation, reduction, or reimbursement from Landlord as a result of any
damage, destruction, repair or restoration of or to the Property.
ARTICLE EIGHT: CONDEMNATION
If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called
"Condemnation"), this Lease shall terminate as to the part taken or sold on the
date the condemning authority takes title or possession, whichever occurs first.
If more than twenty percent (20%) of the floor area of the building in which the
Property is located, or which is located on the Property, is taken, either
Landlord or Tenant may terminate this Lease as of the date the condemning
authority takes title or possession, by delivering written notice to the other
within ten (10) days after receipt of written notice of such taking (or in the
absence of such notice within ten (10) days after the condemning authority takes
title or possession). If neither Landlord not Tenant terminates this Lease, this
Lease shall remain in effect as to the portion of the Property not taken, except
that the Base Rent and Additional Rent shall be reduced in proportion to the
reduction in the floor area of the Property. Any Condemnation award or payment
shall be distributed in the following order: (a) first, to any ground lessor,
mortgagee or beneficiary under a deed of trust encumbering the Property, the
amount of its interest in the Property; (b) second, to Tenant, only the amount
of any award specifically designated for loss of or damage to Tenant's trade
fixtures or removable personal property; and (c) third, to Landlord, the
remainder of such award, whether as compensation for reduction in the value of
the leasehold, the taking of the fee, or otherwise. If this Lease is not
terminated, Landlord shall repair any damage to the Property caused by the
Condemnation, except that Landlord shall not be obligated to repair any damage
for which Tenant has been reimbursed by the condemning authority. If the
severance damages received by Landlord are not sufficient to pay for such
repair, Landlord shall have the right to either terminate this Lease or make
such repair at Landlord's expense.
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ARTICLE NINE: ASSIGNMENT AND SUBLETTING
SECTION 9.01 LANDLORD'S CONSENT REQUIRED. No portion of the Property or
of Tenant's interest in this Lease may be acquired by any other person or
entity, whether by sale, assignment, mortgage, sublease, transfer, operation of
law, or act of Tenant, without Xxxxxxxx's prior written consent, except as
provided in Section 9.02 below. Landlord has the right to grant or withhold its
consent as provided in Section 9.05 below. Any attempted transfer without
consent shall be void and shall constitute a non-curable breach of this Lease.
If Tenant is a partnership, any cumulative transfer of more than twenty percent
(20%) of the partnership interests shall require Landlord's consent. It Tenant
is a corporation, any change in the ownership of a controlling interest of the
voting stock of the corporation shall require Landlord's consent.
SECTION 9.02 TENANT AFFILIATE. Tenant may assign this Lease or sublease
the Property, without Landlord's consent, to any corporation which controls, is
controlled by or is under common control with Tenant, or to any corporation
resulting from the merger of or consolidation with Tenant ("Tenant's
Affiliate"). In such case, any Tenant's Affiliate shall assume in writing all of
Tenant's obligations under this Lease.
SECTION 9.03 NO RELEASE OF TENANT. No transfer permitted by this Article
Nine, whether with or without Landlord's consent, shall release Tenant or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Xxxxxxxx's acceptance of rent from any other person
is not a waiver of any provision of this Article Nine. Consent to one transfer
is not a consent to any subsequent transfer. If Xxxxxx's transferee defaults
under this Lease, Landlord may proceed directly against Tenant without pursuing
remedies against the transferee. Landlord may consent to subsequent assignments
or modifications of this Lease by Xxxxxx's transferee, without notifying Tenant
or obtaining its consent. Such action shall not relieve Xxxxxx's liability under
this Lease.
SECTION 9.04 OFFER TO TERMINATE. If Tenant desires to assign the Lease
or sublease the Property, Tenant shall have the right to offer, in writing, to
terminate the Lease as of a date specified in the offer. If Landlord elects in
writing to accept the offer to terminate within twenty (20) days after notice of
the offer, the Lease shall terminate as of the date specified and all the terms
and provisions of the Lease governing termination shall apply. If Landlord does
not so elect, the Lease shall continue in effect until otherwise terminated and
the provisions of Section 9.05 with respect to any proposed transfer shall
continue to apply.
SECTION 9.05 LANDLORD'S CONSENT.
(a) Xxxxxx's request for consent to any transfer described in
Section 9.01 shall set forth in writing the details of the proposed transfer,
including the name, business and financial condition of the prospective
transferee, financial details of the proposed transfer (e.g., the term of and
the rent and security deposit payable under any proposed assignment or
sublease), and any other information Landlord deems relevant. Landlord shall
have the right to withhold consent, if reasonable, or to grant consent, based on
the following factors: (i) the business of the proposed assignee or subtenant
and the proposed use of the Property; (ii) the net worth and financial
reputation of the proposed assignee or subtenant, (iii) Tenant's compliance with
all of its obligations under the Lease; and (iv) such other factors as Landlord
may reasonably deem relevant. If Landlord objects to a proposed assignment
solely because of the net worth and/or financial reputation of the proposed
assignee, Tenant may nonetheless sublease (but not assign), all or a portion of
the Property to the proposed transferee, but only on the other terms of the
proposed transfer.
(b) If Tenant assigns or subleases, the following shall apply:
(i)Tenant shall pay to Landlord as Additional Rent under
the Lease the Landlord's Share (stated in Section 1.13) of the Profit (defined
below) on such transaction as and when received by Xxxxxx, unless Xxxxxxxx gives
written notice to Xxxxxx and the assignee or subtenant that Landlord's Share
shall be paid by the assignee or subtenant to Landlord directly. The "Profit"
means (A) all amounts paid to Tenant for such assignment or sublease, including
"key" money, monthly rent in excess of the monthly rent payable under the Lease,
and all fees and other consideration paid for the assignment or sublease,
including fees under any collateral agreements, less (B) costs and expenses
directly incurred by Tenant in connection with the execution and performance of
such assignment or sublease for real estate broker's commissions and costs of
renovation or construction of tenant improvements required under such assignment
or sublease. Tenant is entitled to recover such costs and expenses before Tenant
is obligated to pay the
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Xxxxxxxx's Share to Landlord. The Profit in the case of a sublease of less than
all the Property is the rent allocable to the subleased space as a percentage on
a square footage basis.
(ii) Tenant shall provide Landlord a written statement
certifying all amounts to be paid from any assignment or sublease of the
Property within thirty (30) days after the transaction documentation is signed.
and Landlord may inspect Xxxxxx's books and records to verity the accuracy of
such statement. On written request, Tenant shall promptly furnish to Landlord
copies of all the transaction documentation, all of which shall be certified by
Tenant to be complete, true and correct. Xxxxxxxx's receipt of Landlord's Share
shall not be a consent to any further assignment or subletting. The breach of
Tenant's obligation under this Paragraph 9.05(b) shall be a material default of
the Lease.
SECTION 9.06 NO MERGER. No merger shall result from Xxxxxx's sublease of
the Property under this Article Nine, Xxxxxx's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Xxxxxx as
sublandlord under any or all subtenancies.
ARTICLE TEN: DEFAULTS; REMEDIES
SECTION 10.01 COVENANTS AND CONDITIONS. Xxxxxx's performance of each of
Tenant's obligations under this Lease is a condition as well as a covenant.
Xxxxxx's right to continue in possession of the Property is conditioned upon
such performance.
SECTION 10.02 DEFAULTS. Tenant shall be in material default under this
Lease:
(a) If Xxxxxx abandons the Property or if Xxxxxx's vacation of
the Property results in the cancellation of any insurance described in Section
4.04;
(b) If Tenant fails to pay rent or any other charge when due;
(c) If Tenant fails to perform any of Xxxxxx's non-monetary
obligations under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30) days are required
to complete such performance, Tenant shall not be in default if Tenant commences
such performance within the thirty (30)-day period and thereafter diligently
pursues its completion. However, Landlord shall not be required to give such
notice if Xxxxxx's failure to perform constitutes a non-curable breach of this
Lease. The notice required by this Paragraph is intended to satisfy any and all
notice requirements imposed by law on Landlord and is not in addition to any
such requirement.
(d) (i) If Tenant makes a general assignment or general
arrangement for the benefit of creditors; (ii) if a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or against Tenant
and is not dismissed within thirty (30) days; (iii) if a trustee or receiver is
appointed to take possession of substantially all of Tenant's assets located at
the Property or of Tenant's interest in this Lease and possession is not
restored to Tenant within thirty (30) days; or (iv) if substantially all of
Tenant's assets located at the Property or of Tenant's interest in this Lease is
subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days. If a court of competent jurisdiction
determines that any of the acts described in this subparagraph (d) is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession) and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the excess, if any, of the rent (or any other consideration) paid in connection
with such assignment or sublease over the rent payable by Tenant under this
Lease.
(e) If any guarantor of the Lease revokes or otherwise
terminates, or purports to revoke or otherwise terminate, any guaranty of all or
any portion of Tenant's obligations under the Lease. Unless otherwise expressly
provided, no guaranty of the Lease is revocable.
SECTION 10.03 REMEDIES. On the occurrence of any material default by
Tenant, Landlord may, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have:
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(a) Terminate Xxxxxx's right to possession of the Property by
any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Property to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid Base Rent, Additional Rent and other charges which
Landlord had earned at the time of the termination: (ii) the worth at the time
of the award of the amount by which the unpaid base Rent, Additional Rent and
other charges which Xxxxxxxx would have earned after termination until the time
of the award exceeds the amount of such rental loss that Tenant proves Landlord
could have reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid Base Rent, Additional Rent and other charges which
Xxxxxx would have paid for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves Landlord could have
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Xxxxxx's failure to perform its
obligations under the Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or expenses
Landlord incurs in maintaining or preserving the Property after such default,
the cost of recovering possession of the Property, expenses of reletting,
including necessary renovation or alteration of the Property. Xxxxxxxx's
reasonable attorneys' fees incurred in Connection therewith, and any real estate
commission paid or payable. As used in subparts (i) and (ii) above, the "worth
at the time of the award" is computed by allowing interest on unpaid amounts at
the rate of fifteen percent (15%) per annum, or such lesser amount as may then
be the maximum lawful rate. As used in subpart (iii) above, the "worth at the
time of the award" is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of the award, plus one
percent (1%). If Tenant has abandoned the Property, Landlord shall have the
option of (i) retaking possession of the Property and recovering from Tenant the
amount specified in this Paragraph 10.03(a), or (ii) proceeding under Paragraph
10.03(b);
(b) Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant has abandoned the Property.
In such event, Landlord shall be entitled to enforce all of Landlord's rights
and remedies under this Lease, including the right to recover the rent as it
becomes due;
(c) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which the Property
is located.
SECTION 10.04 REPAYMENT OF "FREE" RENT. If this Lease provides for a
postponement of any monthly rental payments, a period of "free" rent or other
rent concession, such postponed rent or "free" rent is called the "Abated Rent,"
Tenant shall be credited with having paid all of the Abated Rent on the
expiration of the Lease Term only if Tenant has fully, faithfully, and
punctually performed all of Tenant's obligations hereunder, including the
payment of all rent (other than the Abated Rent) and all other monetary
obligations and the surrender of the Property in the physical condition required
by this Lease. Tenant acknowledges that its right to receive credit for the
Abated Rent is absolutely conditioned upon Tenant's full, faithful and punctual
performance of its obligations under this Lease. If Tenant defaults and does not
cure within any applicable grace period, the Abated Rent shall immediately
become due and payable in full and this Lease shall be enforced as if there were
no such rent abatement or other rent concession. In such case Abated Rent shall
be calculated based on the full initial rent payable under this Lease.
SECTION 10.05 AUTOMATIC TERMINATION. Notwithstanding any other term or
provision hereof to the contrary, the Lease shall terminate on the occurrence of
any act which affirms the Landlord's intention to terminate the Lease as
provided in Section 10.03 hereof, including the filing of an unlawful detainer
action against Tenant. On such termination, Xxxxxxxx's damages for default shall
include all costs and fees, including reasonable attorneys' fees that Landlord
incurs in connection with the filing, commencement, pursuing and/or defending of
any action in any bankruptcy court or other court with respect to the Lease; the
obtaining of relief from any stay in bankruptcy restraining any action to evict
Tenant; or the pursuing of any action with respect to Landlord's right to
possession of the Property. All such damages suffered (apart from Base Rent and
other rent payable hereunder) shall constitute pecuniary damages which must be
reimbursed to Landlord prior to assumption of the Lease by Tenant or any
successor to Xxxxxx in any bankruptcy or other proceeding.
SECTION 10.06 CUMULATIVE REMEDIES. Xxxxxxxx's exercise of any right or
remedy shall not prevent it from exercising any other right or remedy.
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ARTICLE ELEVEN: PROTECTION OF LENDERS
SECTION 11.01 SUBORDINATION. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or mortgage
encumbering the Property, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. Tenant shall cooperate with Landlord and any lender
which is acquiring a security interest in the Property or the Lease. Tenant
shall execute such further documents and assurances as such lender may require,
provided that Tenant's obligations under this Lease shall not be increased in
any material way (the performance of ministerial acts shall not be deemed
material), and Tenant shall not be deprived of its rights under this Lease.
Xxxxxx's right to quiet possession of the Property during the Lease Term shall
not be disturbed if Tenant pays the rent and performs all of Tenant's
obligations under this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior to the lien of
its ground lease, deed of trust or mortgage and gives written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, deed of trust or
mortgage whether this Lease is dated prior or subsequent to the date of said
ground lease, deed of trust or mortgage or the date of recording thereof.
SECTION 11.02 ATTORNMENT. If Xxxxxxxx's interest in the Property is
acquired by any ground lessor, beneficiary under a deed of trust, mortgagee, or
purchaser at a foreclosure sale. Tenant shall attorn to the transferee of or
successor to Xxxxxxxx's interest in the Property and recognize such transferee
or successor as Landlord under this Lease. Tenant waives the protection of any
statute or rule of law which gives or purports to give Tenant any right to
terminate this Lease or surrender possession of the Property upon the transfer
of Landlord's interest.
SECTION 11.03 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten (10)
days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
SECTION 11.04 ESTOPPEL CERTIFICATES.
(a) Upon Landlord's written request, Tenant shall execute,
acknowledge and deliver to Landlord a written statement certifying: (i) that
none of the terms or provisions of this Lease have been changed (or if they have
been changed, stating how they have been changed); (ii) that this Lease has not
been cancelled or terminated; (iii) the last date of payment of the Base Rent
and other charges and the time period covered by such payment; (iv) that
Landlord is not in default under this Lease (or, if Landlord is claimed to be in
default, stating why); and (v) such other representations or information with
respect to Tenant or the Lease as Landlord may reasonably request or which any
prospective purchaser or encumbrancer of the Property may require. Tenant shall
deliver such statement to Landlord within ten (10) days after Xxxxxxxx's
request. Landlord may give any such statement by Tenant to any prospective
purchaser or encumbrancer of the Property. Such purchaser or encumbrancer may
rely conclusively upon such statement as true and correct.
If Tenant does not deliver such statement to Landlord within such
ten(10) day period, Landlord, and any prospective purchaser or encumbrancer, may
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been cancelled or terminated except as
otherwise represented by Landlord; (iii) that not more than one month's Base
Rent or other charges have been paid in advance; and (iv) that Landlord is not
in default under the Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.
SECTION 11.05 TENANT'S FINANCIAL CONDITION. Within ten (10) days after
written request from Landlord, Tenant shall deliver to Landlord such financial
statements as Landlord reasonably requires to verify the net worth of Tenant or
any assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall
deliver to any lender designated by Landlord any financial statements required
by such lender to facilitate the financing or refinancing of the Property.
Tenant represents and warrants to Landlord that each such financial statement is
a true and accurate statement as of the date of such statement. All financial
statements shall be confidential and shall be used only for the purposes set
forth in this Lease.
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ARTICLE TWELVE: LEGAL COSTS
SECTION 12.01 LEGAL PROCEEDINGS. If Tenant or Landlord shall be in
breach or default under this Lease, such party (the "Defaulting Party") shall
reimburse the other party (the "Nondefaulting Party") upon demand for any costs
or expenses that the Nondefaulting Party incurs in connection with any breach or
default of the Defaulting Party under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the provisions
of this Lease is commenced, the court in such action shall award to the party in
whose favor a judgment is entered, a reasonable sum as attorneys' fees and
costs. The losing party in such action shall pay such attorneys' fees and costs.
Tenant shall also indemnify Landlord against and hold Landlord harmless from all
costs, expenses, demands and liability Landlord may incur if Landlord becomes or
is made a party to any claim or action (a) instituted by Tenant against any
third party, or by any third party against Tenant, or by or against any person
holding any interest under or using the Property by license of or agreement with
Tenant; (b) for foreclosure of any lien for labor or material furnished to or
for Tenant or such other person; (c) otherwise arising out of or resulting from
any act or transaction of Tenant or such other person; or (d) necessary to
protect Landlord's interest under this Lease in a bankruptcy proceeding, or
other proceeding under Title 11 of the United States Code, as amended. Tenant
shall defend Landlord against any such claim or action at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's election. Tenant
shall reimburse Landlord for any legal fees or costs Landlord incurs in any such
claim or action.
SECTION 12.02 LANDLORD'S CONSENT. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with Xxxxxx's request for Xxxxxxxx's
consent under Article Nine (Assignment and Subletting), or in connection with
any other act which Xxxxxx proposes to do and which requires Xxxxxxxx's consent.
ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS
SECTION 13.01 NON-DISCRIMINATION. Tenant promises, and it is a condition
to the continuance of this Lease, that there will be no discrimination against,
or segregation of, any person or group of persons on the basis of race, color,
sex, creed, national origin or ancestry in the leasing, subleasing,
transferring, occupancy, tenure or use of the Property or any portion thereof.
SECTION 13.02 LANDLORD'S LIABILITY; CERTAIN DUTIES.
(a) As used in this Lease, the term "Landlord" means only the
current owner or owners of the fee title to the Property or the leasehold estate
under a ground lease of the Property at the time in question. Each Landlord is
obligated to perform the obligations of Landlord under this Lease only during
the time such Landlord owns such interest or title. Any Landlord who transfers
its title or interest is relieved of all liability with respect to the
obligations of Landlord under this Lease to be performed on or after the date of
transfer. However, each Landlord shall deliver to its transferee all funds that
Tenant previously paid if such funds have not yet been applied under the terms
of this Lease.
(b) Tenant shall give written notice of any failure by Landlord
to perform any of its obligations under this Lease to Landlord and to any ground
lessor, mortgagee or beneficiary under any deed of trust encumbering the
Property whose name and address have been furnished to Tenant in writing.
Landlord shall not be in default under this Lease unless Landlord (or such
ground lessor, mortgagee or beneficiary) fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice. However, if such
non-performance reasonably requires more than thirty (30) days to cure, Landlord
shall not be in default if such cure is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
(c) Notwithstanding any term or provision herein to the
contrary, the liability of Landlord for the performance of its duties and
obligations under this Lease is limited to Landlord's interest in the Property,
and neither the Landlord nor its partners, shareholders, officers or other
principals shall have any personal liability under this Lease.
SECTION 13.03 SEVERABILITY. A determination by a court of competent
jurisdiction that any provision of this Lease or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
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SECTION 13.04 INTERPRETATION. The captions of the Articles or Sections
of this Lease are to assist the parties in reading this Lease and are not a part
of the terms or provisions of this Lease. Whenever required by the context of
this Lease, the singular shall include the plural and the plural shall include
the singular. The masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant's agents, employees, contractors,
invitees, successors or others using the Property with Xxxxxx's expressed or
implied permission.
SECTION 13.05 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This
Lease is the only agreement between the parties pertaining to the lease of the
Property and no other agreements are effective. All amendments to this Lease
shall be in writing and signed by all parties. Any other attempted amendment
shall be void.
SECTION 13.06 NOTICES. All notices required or permitted under this
Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be
delivered to the address specified in Section 1.03 above, except that upon
Xxxxxx's taking possession of the Property, the Property shall be Tenant's
address for notice purposes. Notices to Landlord shall be delivered to the
address specified in Section 1.02 above. All notices shall be effective upon
delivery. Either party may change its notice address upon written notice to the
other party.
SECTION 13.07 WAIVERS. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of this Lease or its
acceptance of rent shall not be a waiver and shall not prevent Landlord from
enforcing that provision or any other provision of this Lease in the future. No
statement on a payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or without notice to
Tenant, negotiate such check without being bound to the conditions of such
statement.
SECTION 13.08 NO RECORDATION. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord or Tenant may
require that a "Short Form" memorandum of this Lease executed by both parties be
recorded. The party requiring such recording shall pay all transfer taxes and
recording fees.
SECTION 13.09 BINDING EFFECT; CHOICE OF LAW. This Lease binds any party
who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Xxxxxx's successor unless
the rights or interests of Xxxxxx's successor are acquired in accordance with
the terms of this Lease. The laws of the state in which the Property is located
shall govern this Lease.
SECTION 13.10 CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within thirty (30) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person or entity signing this Lease for Tenant represents and warrants that he
or it is a general partner of the partnership, that he or it has full authority
to sign for the partnership and that this Lease binds the partnership and all
general partners of the partnership. Tenant shall give written notice to
Landlord of any general partner's withdrawal or addition. Within thirty (30)
days after this Lease is singed, Tenant shall deliver to Landlord a copy of
Xxxxxx's recorded statement of partnership or certificate of limited
partnership.
SECTION 13.11 JOINT AND SEVERAL LIABILITY. All parties signing this
Lease as Tenant shall be jointly and severally liable for all obligations of
Tenant.
SECTION 13.12 FORCE MAJEURE. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Xxxxxxxx's control include, but are not
limited to, acts of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
SECTION 13.13 EXECUTION OF LEASE. This Lease may be executed in
counterparts and, when all counterpart documents are executed, the counterparts
shall constitute a single binding instrument. Xxxxxxxx's delivery of this Lease
15
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to Tenant shall not be deemed to be an offer to lease and shall not be binding
upon either party until executed and delivered by both parties.
SECTION 13.14 SURVIVAL. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease.
ARTICLE FOURTEEN: BROKERS
SECTION 14.01 BROKER'S FEE. When this Lease is signed by and delivered
to both Landlord and Tenant, Landlord shall pay a real estate commission to
Landlord's Broker named in Section 1.08 above, if any, as provided in the
written agreement between Landlord and Xxxxxxxx's Broker, or the sum stated in
Section 1.09 above for services rendered to Landlord by Landlord's Broker in
this transaction. Landlord shall pay Landlord's Broker a commission if Tenant
exercises any option to extend the Lease Term or to buy the Property, or any
similar option or right which Landlord may grant to Tenant, or if Landlord's
Broker is the procuring cause of any other lease or sale entered into between
Landlord and Tenant covering the Property. Such commission shall be the amount
set forth in Landlord's Broker's commission schedule in effect as of the
execution of this Lease. If a Tenant's Broker is named in Section 1.08 above,
Xxxxxxxx's Broker shall pay an appropriate portion of its commission to Tenant's
Broker if so provided in any agreement between Xxxxxxxx's Broker and Xxxxxx's
Broker. Nothing contained in this Lease shall impose any obligation on Landlord
to pay a commission or fee to any party other than Xxxxxxxx's Broker.
SECTION 14.02 PROTECTION OF BROKERS. If Landlord sells the Property, or
assigns Landlord's interest in this Lease, the buyer or assignee shall, by
accepting such conveyance of the Property or assignment of the Lease, be
conclusively deemed to have agreed to make all payments to Landlord's Broker
thereafter required of Landlord under this Article Fourteen. Xxxxxxxx's Broker
shall have the right to bring a legal action to enforce or declare rights under
this provision. The prevailing party in such action shall be entitled to
reasonable attorneys' fees to be paid by the losing party. Such attorneys' fees
shall be fixed by the court in such action. This Paragraph is included in this
Lease for the benefit of Landlord's Broker.
SECTION 14.03 AGENCY DISCLOSURE; NO OTHER BROKERS.
Landlord and Tenant each warrant that they have dealt with no other real estate
broker(s) in connection with this transaction except: CB Xxxxxxx Xxxxx, Inc. who
represents the Landlord and Xxx & Associates, who represents the Tenant.
In the event that CB Xxxxxxx Xxxxx represents Landlord and Xxxxxx,
Landlord and Xxxxxx hereby confirm that they were timely advised of the dual
representation and that they consent to the same, and that they do not expect
said broker to disclose to either of them the confidential information of the
other party.
ARTICLE FIFTEEN: COMPLIANCE
The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, property or the subject matter of this Agreement,
including, but not limited to, the 1964 Civil Rights Act and all amendments
thereto, the Foreign Investment in Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The Americans With
Disabilities Act.
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Landlord and Xxxxxx have signed this Lease at the place and on the dates
specified adjacent to their signatures below and have initialled all Riders
which are attached to or incorporated by reference in this Lease.
"LANDLORD"
Signed on February 9 , 1999 WESTCAP PROPERTIES, INC.
-------------------------
at a California Corporation
---------------------------------
By:/s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Its: Secretary
------------------------------
By:
-------------------------------
Its:
------------------------------
"TENANT"
Signed on , 1999 DOCUMENT SCIENCES
-------------------------- CORPORATION,
at a Delaware Corporation
---------------------------------
By:/s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xx. Xxxxxxx X. Xxxxxx
Its: President/CEO
------------------------------
By:
-------------------------------
Its:
------------------------------
IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH
A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.
THIS PRINTED FORM LEASE HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE
DIRECTION OF THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND
OFFICE REALTORS, INC. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE REALTORS,
INC., ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR THEIR
EMPLOYEES OR AGENTS. AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS LEASE OR OF THIS TRANSACTION. LANDLORD AND TENANT SHOULD
RETAIN LEGAL COUNSEL TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE
ADVICE OF SUCH LEGAL COUNSEL.
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ADDENDUM TO LEASE DATED JANUARY 27, 1999, BY AND BETWEEN WESTCAP PROPERTIES,
INC., A CALIFORNIA CORPORATION, AS LANDLORD AND DOCUMENT SCIENCES CORPORATION, A
DELAWARE CORPORATION, AS TENANT.
1. RENT SCHEDULE
Accordingly, the net rent shall be as follows:
Months 1-12: $18,531.00
Months 13-24: $19,272.24
Months 25-36: $20,043.13
Months 37-48 $20,844.85
Months 49-60: $21,678.65
Months 61-72: $22,545.80
2. TENANT IMPROVEMENTS
Landlord shall provide a tenant improvement allowance to Tenant in the
form of a rent credit, in an amount not to exceed Three and no/100
($3.00) Dollars per square foot ($63,900.00).
It is the intention of the Tenant to make only minor modifications to
the building. The bulk of the allowance will go towards new carpeting
and painting in needed areas, solar tubes in the most southern open area
and expansion of the kitchen. Landlord shall approve all tenant
improvements prior to commencement of work. This rent credit shall be
given to Tenant at the time Tenant delivers to Landlord a paid bill, by
Xxxxxx, from a licensed California Contractor. This rent credit shall
not exceed $63,900.00
3. ADDITIONAL HAZARDOUS MATERIALS PROVISIONS
Tenant shall comply will all laws, ordinances and regulations in the
state where the property is located regarding the disclosure of the
presence or danger of hazardous materials. Tenant shall immediately
notify Landlord in writing if Tenant is aware of (a) any enforcement,
cleanup, removal or other governmental or regulatory action instituted,
completed or threatened pursuant to any laws, ordinances or regulations
concerning hazardous materials ("Hazardous Materials Laws"); (b) any
claim made or threatened by any person against Landlord, or the
property, relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from or claimed to result from any Hazardous
Materials; and (c) any release of a Hazardous Material that Tenant knows
or has reason to believe has or will come to be related or located
within, on, under or about the property. Tenant shall also provide to
Landlord, within five (5) days after Xxxxxx first receives or sends the
same, copies of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to the property or Xxxxxx's use
thereof. Tenant shall not perform or cause to be performed any hazardous
materials surveys, studies, reports or inspections, relating to the
property, without obtaining Landlord's prior written consent. The rights
and obligations under this section shall survive the expiration or
termination of this Lease.
--------------------------------------------------------------------------------
CONSULT YOUR ATTORNEY/ADVISOR -- This document has been prepared for approval by
your attorney. No representation or recommendation is made by CB XXXXXXX XXXXX,
INC. or the agents or employees as to the legal sufficiency, legal effect, or
tax consequences of this document or the transaction to which it relates. These
are questions for your attorney.
--------------------------------------------------------------------------------
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
---------------------------------- ------------------------------------
LANDLORD'S INITIALS TENANT'S INITIALS
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Xxxxxxx Xxxxx CB Commercial Real Estate Group
Brokerage and Management
Licensed Real Estate Broker
This Rider is attached to and made part of that certain Lease (the
"Lease") dated January 27, 1999 between WESTCAP PROPERTIES, a California
Corporation, as Landlord, and DOCUMENT SCIENCES CORPORATION, a Delaware
Corporation, as Tenant, covering the Property commonly known as 0000 Xxxxx Xxx
Xxxx, Xxxxxxxx, XX 00000 (containing approximately 21,300 rentable square feet)
(the "Property"). The terms used herein shall have the same definitions as set
forth in the Lease. The provisions of this Rider shall supersede any
inconsistent or conflicting provisions of the Lease.
A. OPTION(S) TO EXTEND TERM.
1. GRANT OF OPTION.
Landlord hereby grants to Tenant one (1) option(s) (the "Option(s)") to
extend the Lease Term for additional term(s) of five (5) years each (the
"Extension(s)"), on the same terms and conditions as set forth in the Lease, but
at an increased rent as set forth below. Each Option shall be exercised only by
written notice delivered to Landlord at least one hundred and eighty (180) days
before the expiration of the Lease Term or the preceding Extension of the Lease
Term, respectively. If Tenant fails to deliver Landlord written notice of
exercise of an Option within prescribed time period, such Option and any
succeeding Options shall lapse, and there shall be no further right to extend
the Lease Term. Each Option shall be exercisable by Tenant on the express
conditions that (a) at the time of the exercise, and at all times prior to the
commencement of such Extension, Tenant shall not be in default under any of the
provisions of the Lease and (b) Tenant has not been ten (10) or more days late
in the payment of rent more than a total of three (3) times during the Lease
Term and all preceding Extensions.
2. PERSONAL OPTIONS.
The Option(s) are personal to the Tenant named in Section 1.03 of the
Lease or any Tenant's Affiliate described in Section 9.02 of the Lease. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest under the Lease to an entity other than a Tenant Affiliate prior to
the exercise of an Option (whether with or without Landlord's consent), such
Option and any succeeding Options shall lapse. If Tenant subleases any portion
of the Property or assigns or otherwise transfers any interest of Tenant under
the Lease to an entity other than a Tenant Affiliate after the exercise of an
Option but prior to the commencement of the respective Extension (whether with
or without Landlord's consent), such Option and any succeeding Options shall
lapse and the Lease Term shall expire as if such Option were not exercised. If
Tenant subleases any portion of the Property or assigns or otherwise transfers
any interest of Tenant under the Lease in accordance with Article 9 of the Lease
after the exercise of an Option and after the commencement of the Extension
related to such Option, then the term of the Lease shall expire upon the
expiration of the Extension during which such sublease or transfer occurred and
only the succeeding Options shall lapse.
B. CALCULATION OF RENT.
The Base Rent during the Extension(s) shall be determined by one or a
combination of the following methods (INDICATE METHOD UPON EXECUTION OF THE
LEASE):
[ ] 1. COST OF LIVING ADJUSTMENT (Section B.1, below)
Rental Adjustment Date(s): The first day of the N/A months(s)
of the _______ Extension(s) of the Lease Term.
[ ] 2. FAIR RENTAL VALUE ADJUSTMENT (Section B.2, below) as
determined by appraiser [ ] or broker [ ]. Rental Adjustment
Date(s): The first day of the 1st month of the first Extension(s)
of the Lease Term at 4% fixed income.
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[ ] 3. FIXED ADJUSTMENT
The Base Rent shall be increased to the following amounts (the
"Adjusted Base Rent(s)") on the dates (the "Rental Adjustment
Date(s)") set forth below:
RENTAL ADJUSTMENT DATE(S) ADJUSTED BASE RENT(S)
13th month $ four percent (4%) fixed increase
---------------------------- ------------------------------------
25th month $ four percent (4%) fixed increase
---------------------------- ------------------------------------
37th month $ four percent (4%) fixed increase
---------------------------- ------------------------------------
49th month $ four percent (4%) fixed increase
---------------------------- ------------------------------------
1. COST OF LIVING ADJUSTMENT.
The Base Rent shall be increased on the dates specified in Section B.1,
above (the "Rental Adjustment Date(s)") by reference to the Index defined in
Section 3.02 of the Lease or the substitute index described in Paragraph 3.02(b)
of the Lease, as follows: The Base Rent in effect immediately prior to the
applicable Rental Adjustment Date (the "Comparison Base Rent") shall be
increased by the percentage that the index has increased from the month in which
the payment of the Comparison Base Rent commenced through the month in which the
applicable Rental Adjustment Date occurs. In no event shall the Base Rent be
reduced by reason of such computation.
2. FAIR RENTAL VALUE ADJUSTMENT.
The Base Rent shall be increased on the date(s) specified in Section B.2, above
(the "Rental Adjustment Date(s)") to the "fair rental value" of the Property,
determined in the following manner:
(a) Not later than one hundred (100) days prior to any applicable Rental
Adjustment Date, Landlord and Tenant shall meet in an effort to negotiate, in
good faith, the fair rental value of the Property as of such Rental Adjustment
Date. If Landlord and Tenant have not agreed upon the fair rental value of the
Property at least ninety (90) days prior to the applicable Rental Adjustment
Date, the fair rental value shall be determined by appraisal, by one or more
appraisers or brokers (herein called "Appraisers(s)"), as provided in Section
B.2(b), below. If appraiser(s) are used, such appraiser(s) shall have at least
five (5) years' experience in the appraisal of commercial/industrial real
property in the area in which the Property is located and shall be members of
professional organizations such as MAI or equivalent. If broker(s) are used,
such broker(s) shall have at least five (5) years' experience in the sales and
leasing of commercial/industrial real property in the area in which the Property
is located and shall be members of professional organizations such as the
Society of Industrial and Officer Realtors or equivalent.
(b) If Landlord and Tenant are not able to agree upon the fair rental
value of the Property within the prescribed time period, then Landlord and
Tenant shall attempt to agree in good faith upon a single Appraiser not later
than seventy-five (75) days prior to the applicable Rental Adjustment Date. If
Landlord and Tenant are unable to agree upon a single Appraiser within such time
period, then Landlord and Tenant shall each appoint one Appraiser not later than
sixty-five (65) days prior to the applicable Rental Adjustment Date. If Landlord
and Tenant are unable to agree upon a single Appraiser within such time period,
then Landlord and Tenant shall each appoint one Appraiser not later than
sixty-five (65) days prior to the applicable Rental Adjustment Date. Within ten
(10) days thereafter, the two (2) appointed Appraisers shall appoint a third
(3rd) Appraiser. If either Landlord or Tenant fails to appoint its Appraiser
within the prescribed time period, the single Appraiser appointed shall
determine the fair rental value of the Property. If both parties fail to appoint
Appraisers within the prescribed time periods, then the first Appraiser
thereafter selected by a party shall determine the fair rental value of the
Property. Each party shall bear the cost of its own Appraiser and the parties
shall share equally the cost of the single or third Appraiser, if applicable.
(c) For the purposes of such appraisal, the term "fair market value"
shall mean the price that a ready and willing tenant would pay, as of the
applicable Rental Adjustment Date, as monthly rent to a ready and willing
landlord of property comparable to the Property if such property were exposed
for lease on the open market for a reasonable period of time and taking into
account all of the purposes for which such property may be used. If a single
Appraiser is chosen, then such Appraiser shall determine the fair rental value
of the Property. Otherwise, the fair rental value of the Property shall be the
arithmetic average of the two (2) of the three (3) appraisals which are closest
in amount, and the third appraisal shall be disregarded. In no event, however,
shall the Base Rent be reduced by reason of such computation.
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Landlord and Tenant shall instruct the Appraiser(s) to complete the
determination of the fair rental value not later than thirty (30) days prior to
the applicable Rental Adjustment Date. If the fair rental value is not
determined prior to the applicable Rental Adjustment Date, then Tenant shall
continue to pay to Landlord the Base Rent applicable to the Property immediately
prior to such Extension, until the fair rental value is determined. When the
fair rental value of the Property is determined, Landlord shall deliver notice
thereof to Tenant, and Tenant shall pay to Landlord, within ten (10) days after
receipt of such notice, the difference between the Base Rent actually paid by
Tenant to Landlord and the new Base Rent determined hereunder.
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DISCLOSURES AND ACKNOWLEDGMENT
Addendum to Lease Listing Agreement/Proposal to Lease
CB XXXXXXX XXXXX, INC.
LICENSED REAL ESTATE BROKER
Date: January 27, 1999
Landlord Westcap Properties, Inc., (a California Corporation)
------------------------------------------------------------------------
Tenant Document Sciences Corporation (a Delaware Corporation)
------------------------------------------------------------------------
Property 6339 Paseo Del Lago, Carlsbad, CA
------------------------------------------------------------------------
Street Address, City, State
Also known as: Containing approximately 21,300 rentable square feet
------------------------------------------------------------------------
--------------------------------------------------------------------------------
I. NOTIFICATION RE: NATIONAL FLOOD INSURANCE PROGRAM (CBRE FORM 5230)
According to FIRM* [specify source], this Property IS / X IS NOT
--- ---
located in a Special Flood Hazard Area on United States Department of Housing
and Urban Development (HUD) "Special Flood Zone Area Maps." Federal law requires
that as a condition of obtaining federally related financing on most properties
located in "flood zones," banks, savings and loan associations, and some
insurance lenders require flood insurance to be carried where the Property, real
or personal, is security for a loan. This requirement is mandated by the
National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of
1973. The purpose of the program is to provide flood insurance to property
owners at a reasonable cost. Cities or counties participating in the National
Flood Insurance Program may have adopted building or zoning restrictions, or
other measures, as part of their participation in the program. You should
contact the city or county in which the Property is located to determine any
such restrictions. The extent of coverage available in your area and the cost of
this coverage may vary, and for further information, you should consult your
lender or insurance carrier. Tenant shall be solely responsible for confirming
the above stated Special Flood Hazard Area designation, and for investigation of
the impact of such designation on Tenant's intended use of the Property. FLOOD
ZONE DESIGNATION: ZONE __
II. XXXXXXX-XXXXXX NOTIFICATION; XXXXXXX-XXXXXX SPECIAL EARTHQUAKE FAULT
ZONING ACT (CBRE FORM 5228-5229)
According to Fault-Rupture Hazard Zones in California Special
Publication 42 [specify source] the Property described above IS / X IS NOT
--- ---
__ MAY OR MAY NOT be situated in an Earthquake Fault Zone as designated under
the Xxxxxxx-Xxxxxx Earthquake Fault Zoning Act, Sections 2621-2630, inclusive,
of the California Public Resources Code; and, as such, the construction or
development on the Property of any structure for human occupancy may be subject
to the findings of a geologic report prepared by a geologist registered in the
State of California, unless such report is waived by the city or county under
the terms of that Act. No representations on the subject are made by Landlord or
by CB XXXXXXX XXXXX, INC. or its agents or employees, and the Tenant should make
his/her/its own inquiry or investigation. Tenant shall be solely responsible for
confirming the above stated Special Flood Hazard Area designation, and for
investigation of the impact of such designation on Tenant's intended use of the
Property.
For further information you may wish to contact appropriate city or
county agencies:
III. HAZARDOUS WASTES OR SUBSTANCES AND UNDERGROUND STORAGE TANKS
Comprehensive federal and state laws and regulations have been enacted
in the past several years in an effort to control the use, storage, handling,
clean-up, removal and disposal of hazardous wastes or substances. Some of these
laws and regulations (such as, for example, the Comprehensive Environmental
Response Compensation and Liability Act [CERCLA]) provide for broad liability on
the part of owners, tenants, or other users of property for clean-up costs and
damages, regardless of fault. Another such statute is California Health and
Safety Code Section 25359.7(a), which provides in part that a seller/landlord of
nonresidential real property who knows, or has reasonable cause to believe, that
any release of a hazardous substance has come to be located on or beneath that
real property shall, prior to the sale or
--------
* Flood Insurance Rate Map #06073C/031 F
23
lease, give written notice of that condition to the purchaser/tenant; and that
failure of the seller/landlord to provide written notice as required shall
subject the seller/landlord to liability for damages. Other laws and regulations
set standards for the handling of asbestos, and establish requirements for the
use, modification, abandonment, and closure of underground storage tanks.
It is not practical or possible to list all such laws and regulations in
this Notice. Therefore, Landlords and Tenants are urged to consult legal counsel
to determine their respective rights and liabilities with respect to the issues
described in this Notice, as well as all other aspects of the proposed
transaction. If hazardous wastes or substances have been, or are going to be
used, stored, handled or disposed on the Property, or if the Property has been
or may have underground storage tanks, it is essential that legal and technical
advice be obtained to determine, among other things, the nature of permits and
approvals which have been obtained or may be required; the estimated costs and
expenses associated with the use, storage, handling, clean-up, disposal or
removal of hazardous wastes or substances; and the nature and extent of
contractual provisions necessary or desirable in this transaction. Xxxxxx
recommends expert assistance and site investigation to determine past uses of
the Property, which may provide valuable information as to the likelihood of
hazardous wastes or substances, or underground storage tanks, being on the
Property.
Xxxxxxxx agrees to disclose to Broker and to Tenant any and all
information which he/she/it has regarding present and future zoning and
environmental matters affecting the Property and regarding the condition of the
Property, including, but not limited to structural, mechanical and soils
conditions, the presence and location of asbestos, PCB transformers, other
toxic, hazardous or contaminated substances, and underground storage tanks, in,
on, or about the Property. Broker hereby requests that such information be
provided immediately so that it may be timely communicated to the Tenant.
Xxxxxx has conducted no investigation regarding the subject matter
hereof, except as may be contained in a separate written document signed by
Xxxxxx. Broker makes no representations concerning the existence or nonexistence
of hazardous wastes or substances, or underground storage tanks, in, on, or
about the Property. Xxxxxx should contact a professional, such as a civil
engineer, industrial hygienist or other persons with experience in these
matters, to advise on these matters.
The term "hazardous wastes or substances" is used herein in its very
broadest sense and includes, but is not limited to, petroleum based products,
paints and solvents, lead, cyanide, DDT, printing inks, acids, pesticides,
ammonium compounds, asbestos, PCBs and other chemical products. Hazardous wastes
or substances and underground storage tanks may be present on all types of real
property. This Notice is intended to apply to any transaction involving any type
of real property, whether improved or unimproved.
IV. BROKERS DISCLOSURE
The parties hereby expressly acknowledge that Broker has made no
independent determination or investigation regarding the following: present or
future use or zoning of the Property; environmental matters affecting the
Property; the condition of the Property, including, but not limited to
structural, mechanical and soils conditions, as well as issues surrounding
hazardous wastes or substances as set out above; violations of the Occupational
Safety and Health Act or any other federal, state, county or municipal laws,
ordinances, or statutes; measurements of land and/or buildings. Tenant agrees to
make its own investigation and determination regarding such items. A REAL ESTATE
BROKER IS QUALIFIED TO ADVISE ON REAL ESTATE. IF YOU DESIRE LEGAL ADVICE,
CONSULT YOUR ATTORNEY.
V. AMERICANS WITH DISABILITIES ACT (ADA)
Owners or tenants of real property may be subject to the Americans with
Disabilities Act (ADA), a federal law codified at 42 USC Section 12010 et seq.
Among other requirements of the ADA that could apply to your Property, Title III
of the Act requires owners and tenants of "public accommodations" to remove
barriers to access by disabled persons and provide auxiliary aids and services
for hearing, vision or speech impaired persons. The regulations under Title III
of the ADA are codified at 28 CFR Part 36.
Xxxxxx recommends that you and your attorney review the ADA and the
regulations, and, if appropriate, your proposed lease agreement, to determine if
this law would apply to you and the nature of the requirements. These are legal
issues. You are responsible for conducting your own independent investigation of
these issues.
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VI. RESIDENTIAL LEAD PAINT HAZARD REDUCTION ACT
LEAD WARNING: Every landlord of any interest in real property on which a
residential dwelling was built prior to 1978 is hereby notified that such
Property may present exposure to lead from lead-based paint that may place young
children at risk of developing lead poisoning. Lead poisoning in young children
may produce permanent neurological damage, including learning disabilities,
reduced intelligence quotient, behavioral problems, and impaired memory. Lead
poisoning also poses a particular risk to pregnant women.
Federal law (42 USC Section 4851 et seq.) requires that the landlord of
all "residential property" constructed prior to 1978 must provide to tenants any
information on lead-based paint hazards from risk assessments or inspections in
the landlord's possession, and must notify the Tenant of any known lead-based
paint hazards. For purposes of these statutes, "residential property" is defined
as any property which includes any residential dwelling unit(s).
A RISK ASSESSMENT OR INSPECTION FOR POSSIBLE LEAD-BASED PAINT HAZARDS IS
RECOMMENDED PRIOR TO LEASE.
Landlords are required to sign a lead-based paint disclosure form(s),
and the tenant must be provided with a copy of a booklet entitled "Protect Your
Family from Lead in Your Home."
Landlord hereby certifies that the above described Property IS /
---
X IS NOT is not "residential property" constructed prior to 1978, as described
---
by the statute.
LEAD DISCLOSURE: Landlord hereby certifies that, to the best of
Landlord's knowledge, the Property __DOES / __DOES NOT contain lead-based paint;
and that Landlord ___DOES / ___DOES NOT possess risk assessment or inspection
reports relating thereto. Landlord hereby certifies to have disclosed to the
Tenant and Xxxxxx all information known to the Landlord regarding the presence
of lead-based paint and lead-based paint hazards within this target housing, as
follows:
Date(s) of inspection(s) or report(s):________________[ ]report attached
Additional information regarding lead-based paint hazards regarding this
Property: additional pages attached
Landlord hereby agrees that it will provide the Tenant with any reports
or information related thereto now in its possession, or which it acquires prior
to the consummation of the transaction contemplated hereby.
The undersigned Xxxxxx and Landlord acknowledge that CB XXXXXXX XXXXX,
INC. has delivered this disclosure to the undersigned; that they have read and
understand the LEAD WARNING contained herein; and, if this Property is
residential property constructed prior to 1978, the Tenant hereby acknowledges
receipt of "Protect Your Family from Lead in Your Home".
VII. COMPLIANCE WITH LAWS
The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative orders having
jurisdiction over the parties, Property or the subject matter of this Agreement,
including, but not limited to, the 1964 Civil Rights Act and all amendments
thereto, the Foreign Investment, in Real Property Tax Act, the Comprehensive
Environmental Response Compensation and Liability Act, and The Americans With
Disabilities Act.
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RECEIPT OF A COPY OF THESE DISCLOSURES IS HEREBY ACKNOWLEDGED.
LANDLORD TENANT
WESTCAP PROPERTIES, INC. DOCUMENT SCIENCES CORPORATION
---------------------------------- ------------------------------------
A California Corporation A Delaware Corporation
By: /s/ Xxxxxxx X. Xxxxx By: Xxxxxxx X. Xxxxxx
---------------------------------- ------------------------------------
Xxxxxxx X. Patch Xxxxxxx X. Xxxxxx
President/CEO
Its: Secretary Its: President/CEO
---------------------------------- ------------------------------------
Dated: February 9, 1999 Dated:
---------------------------------- ------------------------------------
This portion to be completed in conjunction with negotiation and/or
consummation of lease agreement:
VIII. BROKER REPRESENTATION DISCLOSURE AND ACKNOWLEDGMENT
CB Xxxxxxx Xxxxx, Inc. herein represents Landlord.
Xxx & Associates represents Tenant.
____ Landlord's initials ____ Tenant's initials
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CONSULT YOUR ADVISORS NO REPRESENTATION OR RECOMMENDATION IS MADE BY CB XXXXXXX
XXXXX, INC. OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL EFFECT, INTERPRETATION,
OR ECONOMIC CONSEQUENCES OF THIS AGREEMENT, THE TRANSACTION CONTEMPLATED
HEREUNDER, THE NATIONAL FLOOD INSURANCE PROGRAM AND RELATED LEGISLATION, NOR OF
OTHER LEGISLATION REFERRED TO HEREIN. THESE ARE QUESTIONS THAT YOU SHOULD
ADDRESS WITH YOUR CONSULTANTS AND ADVISORS.
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