FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "First Amendment") is entered into
effective as of April 1, 1998 by and between XXXXXX REALTY, L.P, a Delaware
limited partnership ("Landlord") and PRINTRAK INTERNATIONAL INCORPORATED, a
California corporation ("Tenant") with respect to the following facts:
REALTY
A. Landlord is under contract to purchase certain real property commonly
known as 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx (the "Premises") from
RICOL, LLC, a California limited liability company ("RICOL"). Tenant is the
tenant of the Premises pursuant to the certain written Commercial Lease,
dated May 12, 1995, by and between RICOL and Tenant (the "Lease").
B. Subject to Landlord's acquisition of title to the Premises, Landlord
and Tenant desire to amend the Lease upon the terms and conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION OF the foregoing Recitals and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. CAPITALIZED TERMS. The defined terms used in this First Amendment,
as indicated by the first letter of a word being capitalized, shall have the
same meaning in this First Amendment as such terms and provisions have in the
Lease.
2. CONDITION TO FIRST AMENDMENT. The effectiveness of this First
Amendment shall be conditioned solely upon the close of escrow and Landlord's
acquisition of legal title to the Premises.
3. COMMENCEMENT DATE AND TERM. Section 2.1 of the Lease is hereby
amended to extend the Term of the Lease such that the Term shall be for a
period of six (6) years commencing May 1, 1998, and ending April 30, 2004,
unless sooner terminated in accordance with the provisions of the Lease. In
the event that Landlord obtains title to the Premises prior to May 1, 1998,
rent shall be prorated on a daily basis and payable by Tenant to Landlord
with the first installment of rent due under the Lease, unless April rent is
prorated through escrow in connection with Landlord's acquisition of the
Premises.
1
4. MONTHLY RENTAL. Section 4.1 of the Lease is hereby amended to
provide that Monthly Rental shall be Fifty-Eight Thousand Eighty-Seven
Dollars and Sixty-Five Cents ($58,087.65) per month, commencing May 1, 1998,
subject to adjustment as set forth in the Lease.
5. ADJUSTMENT TO RENTAL. Section 4.2 of the Lease is hereby amended to
provide that the annual increases in Monthly Rental pursuant to Section 4.2
shall not be greater than six percent (6%), nor less than three percent (3%),
for any single year during the Term.
6. OPTION TO RENEW: Tenant shall have the option to extend the Term of
the Lease for one (1) additional five (5) year period (the "Additional
Term"). Such option shall be exercised, if at all, by written notice of
Tenant's election to exercise the option delivered to Landlord no earlier
than two hundred seventy (270) days, nor later than one hundred eighty (180)
days, prior to the expiration of the Term of the Lease. If Tenant fails
timely to exercise or is not entitled to exercise this option to renew, then
Tenant's option to renew shall automatically lapse and thereafter not be
exercisable by Tenant. If Tenant is entitled to and does give notice in the
manner and within the time frame set forth in this paragraph, then the Term
shall be extended by the Additional Term, on all of the conditions set forth
in the original Lease; provided, however, that:
(1) Monthly Rental for the Additional Term shall be equal to the
then "Fair Market Rental Rate" (as defined below) of the Premises. Landlord
shall, in response to and within thirty (30) days after receipt of Tenant's
notice of exercise of the option to renew, give Tenant written notice of the
then applicable "Fair Market Rental Rate" as determined in good faith by
Landlord. "Fair Market Rental Rate" means the then prevailing annual rental
rate per square foot of rentable area in comparable buildings in the Anaheim,
CA, industrial area, comparable in area and location to a Premises. Not later
than thirty (30) days after Landlord's notice to Tenant of the applicable
"Fair Market Rental Rate", Tenant shall timely notify Landlord of Tenant's
election to (i) have the "Fair Market Rental Rate" determined by the
"appraisal" procedure described below, or (ii) accept Landlord's
determination of the "Fair Market Rental Rate", or (iii) elect not to
exercise Tenant's option to extend. If Tenant fails to notify Landlord within
such thirty (30) day period of Tenant's election, then Tenant shall be deemed
to have accepted Landlord's determination of "Fair Market Rental Rate" and to
have waived its right to an appraisal. Tenant's notice under subparagraphs
(i) or (ii) shall be deemed Tenant's exercise of the option to extend the
Term.
2
If Tenant exercises its option to renew and timely elects to have the
"Fair Market Rental Rate" determined by appraisal, then each party shall
appoint an appraiser within forty (40) days after such exercise date. The two
appraisers shall within a period of five additional days, agree upon and
appoint an additional appraiser. The three appraisers shall, within thirty
(30) days after the appointment of the third appraiser, determine the Fair
Market Rental Value of the Premises in writing and submit their report to all
of the parties. The Fair Market Rental Value shall be determined by
disregarding the appraiser's valuation that diverges the greatest from each
of the other two appraisers' valuations, and the arithmetic mean of the
remaining two appraisers' valuations shall be the Fair Market Rental Value.
Each party shall pay for the services of the appraiser selected by it, plus
one half of the fee charged by the third appraiser, and one half of all other
costs relating to the determination of Fair Market Rental Value;
(2) There shall be no commissions payable in connection with the
exercise of the option to renew; and
(3) This option is personal to Tenant and there shall be no further
options to extend the Term.
7. PERMITTED USE. Notwithstanding anything set forth in Section 7.1 of
the Lease to the contrary, Landlord's written consent to Tenant's request to
change the permitted use of the Premises shall not be unreasonably withheld.
8. POLICY FORM--DEDUCTIBLE. Notwithstanding the last sentence of
Section 11.2, the policies maintained by Tenant pursuant to Section 11.1(a)
(comprehensive or commercial general liability), Section 11.1(e) (leasehold
improvements) and Section 11.1(g) (all-risk, direct physical loss or damage)
may be subject to a deductible of not more than Twenty Five Thousand Dollars
($25,000).
9. ESTOPPEL CERTIFICATE AND NON-DISTURBANCE AGREEMENT. The Estoppel
Certificate referred to in Section 15.3, and the non-disturbance agreement
referred to in Section 15.4 of the Lease shall, at the option of Landlord or
Landlord's lender, each be in the customary, commercially reasonable, form of
the requesting lender or of the purchaser of all or a portion of the Premises.
10. MEMORANDUM OF LEASE. Section 19.14 is hereby deleted in its
entirety, and, at Tenant's option, Landlord and Tenant shall execute and
record a short form memorandum of lease in form and substance reasonably
acceptable to Landlord.
3
11. SERVICE CHARGE. Section 19.24 is hereby deleted in its entirety.
12. ENVIRONMENTAL MATTERS--TENANT'S OBLIGATIONS. Section 19.25(b)(1)(i)
is hereby amended by the addition of the following language: "provided,
however, that the foregoing covenant shall not extend to materials typically
found or used in computer software and hardware research and development
applications so long as (a) such materials and any equipment which generates
such materials are maintained only in such quantities as are reasonably
necessary for Tenant's operations in the Premises, (b) such materials are
used strictly in accordance with all Environmental Laws and the
manufacturers' instructions therefor, (c) such materials are not disposed of
in or about the Premises in a manner which would constitute a release or
discharge thereof, and (d) all such materials and any equipment which
generates such materials are removed from the Premises by Tenant upon the
expiration or earlier termination of this Lease."
In addition, Section 11.5 of the Lease is hereby amended by adding the
following to the end of both clauses (iv) and (v): "...as a result of the
negligence or willful misconduct of Tenant, its agents, employees, invitees
or contractors; provided, that Tenant acknowledges its duty to supervise and
control access to the Premises in a commercially reasonable and prudent
manner."
13. BROKERS. Tenant warrants and represents that it has not dealt with
any real estate broker or agent in connection with this First Amendment or
its negotiation. Tenant shall indemnify and hold Landlord harmless from any
cost, expense or liability (including costs of suit and reasonable attorneys'
fees) for any compensation, commission or fees claimed by any other real
estate broker or agent in connection with this First Amendment or its
negotiation by reason of any act of Tenant.
14. NOTICE. The address of Lessor for purposes of notices is hereby
amended to provide the following addresses for notice to Landlord:
To Landlord: Xxxxxx Realty, L.P.
c/o Kilroy Realty Corporation
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Phone No. (000) 000-0000
Fax No. (000) 000-0000
4
With a copy XxXxxxxx & XxXxxxxx
to: 0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx XxXxxxxx
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
15. IMPROVEMENTS. Notwithstanding Section 8.3, but subject to
Landlord's prior written approval of detailed plans and specifications to be
submitted by Tenant at least thirty (30) days prior to commencement, Tenant
shall be permitted to construct certain improvements and alterations to the
Premises consisting of administrative offices in the central area of the
first floor and the installation of an elevator near the lobby. Tenant shall
be responsible for all such construction and obtaining all necessary permits
and approvals therefor, and shall give Landlord at least twenty (20) days
notice prior to commencement to allow Landlord to record and post notices of
non-responsibility. Tenant shall maintain the Premises free of mechanic's or
materialmens' liens and shall indemnify defend and hold Landlord harmless
from and against any claims, liability or damages, including reasonable
attorneys' and experts' fees arising out of such construction. All such
improvements and alterations shall be the property of Landlord and shall
remain upon and be surrendered with the Premises upon expiration of the Term,
unless Landlord elects to require their removal. Landlord shall reimburse
Tenant for the actual costs, in the approximate amount of Two Hundred
Thousand Dollars ($200,000), incurred by Tenant in constructing the approved
improvements and alterations; provided, that the amount reimbursed, plus
interest thereon at the rate of ten percent (10%) per annum, shall be
amortized over the portion of the Term remaining as of the date of such
reimbursement payment, and shall be repaid to Landlord thereafter in monthly
installments which shall be added to and considered a part of the Monthly
Rental due and payable by Tenant under the Lease.
16. LEASE IN EFFECT. Landlord and Tenant acknowledge and agree that the
Lease, except as amended by this First Amendment, remains unmodified and in
full force and effect in accordance with its terms.
17. ENTIRE AGREEMENT. This First Amendment, together with the Lease,
embodies the entire understanding between Landlord and Tenant with respect to
the subject matter hereof and can be changed only by an instrument in writing
executed by both Landlord and Tenant.
5
18. CONFLICT OF TERMS. In the event that there is any conflict or
inconsistency between the terms and conditions of the Lease and those of this
First Amendment, the terms and conditions of this First Amendment shall
control and govern the rights and obligations of the parties.
19. COUNTERPARTS. This First Amendment may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this First
Amendment to be effective as of the date first above written.
"Landlord"
XXXXXX REALTY, L.P.,
a Delaware limited partnership
By: Xxxxxx Realty Corporation,
a Maryland corporation,
its general partner
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
"Tenant"
PRINTRAK INTERNATIONAL INCORPORATED,
a California corporation
By: /s/ X.X. Xxxxxxxxx, Xx.
-----------------------------------
Name: X.X. Xxxxxxxxx, Xx.
---------------------------------
Title: Vice Pres/CFO
--------------------------------
6
18. CONFLICT OF TERMS. In the event that there is any conflict or
inconsistency between the terms and conditions of the Lease and those of this
First Amendment, the terms and conditions of this First Amendment shall
control and govern the rights and obligations of the parties.
19. COUNTERPARTS. This First Amendment may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the undersigned have entered into this First
Amendment to be effective as of the date first above written.
"Landlord"
XXXXXX REALTY, L.P.,
a Delaware limited partnership
By: Xxxxxx Realty Corporation,
a Maryland corporation,
its general partner
By: /s/ X. Xxxxxxx [illegible]
------------------------------
Name:
----------------------------
Title:
---------------------------
"Tenant"
PRINTRAK INTERNATIONAL INCORPORATED,
a California corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
6
