Exhibit 10.21
OFFICE BUILDING LEASE
1. PARTIES This Lease, dated, for reference purposes only, July 10, 1993 is
made by and between The Xxxxxx and Xxx Xxxx Revocable Trust (herein
called "Landlord") and Fair, Xxxxx and Company, Incorporated (herein
called "Tenant").
2. PREMISES Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain office space (herein called "Premises")
indicated on Exhibit "A" attached hereto and reference thereto made a
part hereof, said Premises being agreed, for the purposes of this Lease,
to have an area of approximately 35,261 rentable square feet and 33,140
useable square feet, being situated in Suite 200 on the second floor of
that certain Building known as Regency Center, 000 Xxxxx Xxxxx Xxxx, Xxx
Xxxxxx, XX 00000.
Said Lease is subject to the terms, covenants and conditions herein set
forth and the Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of said terms, covenants
and conditions and that this Lease is made upon the condition of said
performance.
3. TERM The term of this Lease shall be for seven (7) years, commencing on
the 1st day of December, 1994, and ending on the 30th day of November,
2001.
See Addendum to Lease, P. 4, Commencement.
4. POSSESSION See Addendum to Lease, P. 3, Possession.
5. A. RENT Tenant agrees to pay to Landlord as rental for the premises,
without prior notice or demand, the sum of Seventy Thousand Five
Hundred Twenty-two Dollars ($70,522.00) on or before the first day
of the first full calendar month of the term hereof and a like sum
on or before the first day of each and every successive calendar
month thereafter during the term hereof, except that the first
month's rent shall be paid upon the execution of this Lease. Rent
for any period during the term which is for less than one (1) month
shall be a prorated portion of the monthly installment herein,
based upon a thirty (30) day month. Said rental shall be paid to
Landlord without deduction or offset in lawful money of the United
States of America, which shall be legal tender at the time of
payment at 000 Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxxxx
00000, or to such other place as Landlord may from time to time
designate in writing.
See Addendum to Lease, P. 5, Free Rent.
B. RENT ESCALATIONS Commencing on the 12th month of this lease
(December 1, 1995) and on each annual anniversary following, the
base rent shall be adjusted by the increase, if any, in the
Consumer Price Index of the Bureau of Labor Statistics of the U. S.
Department of Labor for All Urban Consumers, San
Francisco-Oakland-San Xxxx (1984=100), "All Items" herein referred
to as "C.P.I."
The C.P.I. increase shall be calculated as follows: The base rent
payable for the first month term of this lease shall be multiplied
by the percentage change in the C.P.I. for the 12 months preceding
December 1, 1995. On each anniversary following, the base rent
shall be multiplied by the percentage change in the C.P.I. for the
12 months preceding. No single increase shall exceed 4% of the
previous year's rental rate and in
no event shall the new monthly rent be less than the rent payable
for the month immediately preceding the date for rent adjustment.
6. SECURITY DEPOSIT Tenant shall deposit with Landlord the sum of Seventy
Thousand Five Hundred Twenty-two Dollars ($70,522.00), on or before the
Date of Possession, See Addendum to LeaseP. 3. Said sum shall be held by
Landlord as security for the faithful performance by Tenant of all the
terms, covenants, and conditions of this Lease to be kept and performed
by Tenant during the term hereof. If Tenant defaults with respect to any
provision of this Lease including, but not limited to, the provisions
relating to the payment of rent, Landlord may (but shall not be required
to) use, apply or retain all or any part of this security deposit for the
payment of any rent or any other sum in default, or for the payment of
any amount which Landlord may spend or become obligated to spend by
reason of Tenant's default to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with Landlord in an
amount sufficient to restore the security deposit to its original amount
and Tenant's failure to do so shall be a material breach of this Lease.
Landlord shall not be required to keep this security deposit separate
from its general fund and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the security deposit or
any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest hereunder) at the
expiration of the Lease term. In the event of termination of Landlord's
interest in this Lease, Landlord shall transfer said deposit to
Landlord's successor in interest.
7. OPERATING EXPENSE ADJUSTMENTS For the purposes of this Article, the
following terms are defined as follows:
BASE YEAR The Base Year shall be 1995.
COMPARISON YEAR Each calendar year of the term after the Base Year.
DIRECT EXPENSES All direct costs of operation and maintenance, as
determined by standard accounting practices,
including the following costs by way of
illustration, but not be limited to: real property
taxes and assessments; rent taxes, gross receipt
taxes, (whether assessed against the Landlord or
assessed against the Tenant and collected by the
Landlord, or both); water and sewer charges;
insurance premiums; utilities; janitorial services;
labor; costs incurred in the management of the
Building; air conditioning & heating; elevator
maintenance; supplies; materials; equipment and
tools; and maintenance, costs and upkeep of all
parking and common areas. ("Direct Expenses" shall
not include depreciation on the Building of which
the Premises are a part or equipment therein, loan
payments, executive salaries or real estate
broker's commissions.)
If the Direct Expenses paid or incurred by the Landlord for the
Comparison Year on account of the operation or maintenance of the
Building of which the Premises are a part are in excess of the Direct
Expenses paid or incurred for the Base Year, then the Tenant shall pay
33.90% of the increase. This percentage is that portion of the total
rentable area of the Building occupied by the Tenant hereunder. Landlord
shall endeavor to give to Tenant on or before the first day of March of
each year following the respective Comparison Year a statement of the
increase in rent payable by Tenant hereunder, but failure by Landlord to
give such statement
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by said date shall not constitute a waiver by Landlord of its right to
require an increase in rent. Upon receipt of the statement for the first
Comparison Year, Tenant shall pay in full the total amount of the
increase due for the first Comparison Year and, in addition for the then
current year, the amount of any such increase shall be used as an
estimate for said current year and this amount shall be divided into
twelve (12) equal monthly installments and Tenant shall pay to Landlord,
concurrently with the regular monthly rent payment next due following the
receipt of such statement, an amount equal to one (1) monthly installment
multiplied by the number of months from January in the calendar year in
which said statement is submitted to the month of such payment, both
months inclusive. Subsequent installments shall be payable concurrently
with the regular monthly rent payments for the balance of that calendar
year and shall continue until the next Comparison Year's statement is
rendered. If the next or any succeeding Comparison Year results in a
greater increase in Direct Expenses, then upon receipt of a statement
from Landlord, Tenant shall pay a lump sum equal to such total increase
in Direct Expenses over the Base Year, less the total of the monthly
installments to be paid for the next year, following said Comparison
Year, shall be adjusted to reflect such increase. If in any Comparison
Year the Tenant's share of Direct Expenses be less than the preceding
year, then upon receipt of Landlord's statement, any overpayment made by
Tenant on the monthly installment basis provided above shall be credited
towards the next monthly rent falling due and the estimated monthly
installments of Direct Expenses to be paid shall be adjusted to reflect
such lower Direct Expenses for the most recent Comparison Year.
Even though the term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's share of Direct Expenses
for the year in which this Lease terminates, Tenant shall immediately pay
any increase due over the estimated expenses paid and conversely any
overpayment made in the event said expenses decrease shall be immediately
rebated by Landlord to Tenant.
Notwithstanding anything contained in this Article, the rent payable by
Tenant shall in no event be less than the rent specified in Article 5
above.
See Addendum to Lease, P. 6, Operating Expense Adjustments.
8. USE Tenant shall use the Premises for general office purposes and shall
not use or permit the Premises to be used for any other purposes without
the prior written consent of Landlord.
General office purposes shall be defined for purposes of this Lease to
include computer rooms of any size required by Tenant.
Tenant shall not do or permit anything to be done in or about the
Premises nor bring or keep anything therein which will in any way
increase the existing rate of or affect any fire or other insurance upon
the Building or any of its contents, or cause cancellation of any
insurance policy covering said Building or any part thereof or any of its
contents. Tenant shall not do or permit anything to be done in or about
the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Building on injure or annoy them or
use or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, nor shall Tenant cause, maintain or permit any
nuisance in, on or about the Premises. Tenant shall not commit or suffer
to be committed any waste in or upon the Premises.
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9. COMPLIANCE WITH LAW Tenant shall not use the Premises or permit anything
to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in
force or which may hereafter be enacted or promulgated. Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes,
ordinances and governmental rules now in force or which may hereafter be
in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted,
relating to, or affecting the condition, use or occupancy of the
Premises, excluding changes not related to or affected by Tenant's
improvements or acts. The judgment of any court of competent jurisdiction
or the admission of Tenant in any action against Tenant, whether Landlord
be a party thereto or not, that Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement, shall be
conclusive of that fact as between the Landlord and Tenant.
10. ALTERATIONS AND ADDITIONS Tenant shall not make or suffer to be made any
alterations, additions or improvements to or of the Premises or any part
thereof without the written consent of Landlord first had and obtained.
Any alterations, additions or improvements to or of said Premises
including, but not limited to, wallcovering, paneling, air conditioning
units and built-in cabinet work, but excepting movable furniture and
trade fixtures, shall on the expiration of the term become a part of the
realty and belong to the Landlord and shall be surrendered with the
Premises. In the event Landlord consents to the making of any
alterations, additions or improvements to the Premises by Tenant, the
same shall be made by Tenant at Tenant's sole cost and expense, and any
contractor or persons, selected by the Tenant to make the same must first
be approved in writing by the Landlord. Such approval shall not be
unreasonably withheld. Upon the expiration or sooner termination of the
term hereof, Tenant shall, upon written demand by Landlord, which shall
be given at the time Landlord approves the tenant improvement work, at
Tenant's sole cost and expense, forthwith and with all due diligence,
remove any alterations, additions, or improvements made by Tenant,
designated by Landlord to be removed, and Tenant shall, forthwith and
with all due diligence at its sole cost and expense, repair any damage to
the Premises caused by such removal.
11. REPAIRS
A. By taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises as being in good, sanitary order,
condition and repair. Tenant shall, at Tenant's sole cost and
expense, keep the Premises and every part thereof in good condition
and repair damage thereto from causes beyond the reasonable control
of Tenant with ordinary wear and tear excepted. Tenant shall upon
the expiration or sooner termination of this Lease hereof surrender
the Premises to the Landlord in good condition, ordinary wear and
tear and damage from causes beyond the reasonable control of Tenant
excepted. Except as specifically provided in an addendum, if any,
to this Lease, Landlord shall have no obligation whatsoever to
alter, remodel, improve, repair, decorate or paint the Premises or
any part thereof once the initial tenant improvements are completed
and the parties hereto affirm that Landlord has made no
representations to Tenant respecting the condition of the Premises
or the Building except as specifically herein set forth.
B. Notwithstanding the provisions of Article 11. A. hereinabove,
Landlord shall repair and maintain the structural portions of the
Building, including the basic plumbing, air conditioning, heating
and electrical systems installed or furnished by Landlord unless
such maintenance and repairs are caused in part or in whole by the
act, neglect, fault or
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omission of any duty by the Tenant, its agents, servants, employees
or invitees, in which case Tenant shall pay to Landlord the
reasonable cost of such maintenance and repairs. Landlord shall not
be liable for any failure to make any such repairs or to perform
any maintenance unless such failure shall persist for an
unreasonable time after written notice of the need of such repairs
or maintenance is given to Landlord by Tenant. Except as provided
in Article 22 hereof, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or
the Premises, or in or to fixtures, appurtenances and equipment
therein. Tenant waives the right to make repairs at Landlord's
expense under any law, statute or ordinance now or hereafter in
effect, (including the provisions of California Civil Code Sections
1941 and 1942 and any successor sections or statutes of a similar
nature); provided, however, if Landlord fails to perform any repair
work required of Landlord with respect to the Premises pursuant to
this Paragraph, within thirty (30) days after Landlord receives
Tenant's written notice of the need for such repair (or such period
of time in excess of thirty (30) days as is reasonably necessary
based upon the nature of the required work), then Tenant shall be
permitted to make such repairs, using contractors reasonably
approved by Landlord, provided (i) Tenant first gives Landlord an
additional two (2) business days prior written notice indicating
that Tenant intends to undertake such repair, and (ii) Landlord
fails to commence such repair within such two (2) business day
period. If Tenant performs any repair as permitted under this
Paragraph, Landlord agrees to reimburse Tenant for the reasonable,
actual and documented costs of such repair performed by Tenant, but
without any off-set rights against rent or any other amounts
payable by Tenant under this Lease. Any repair work done by Tenant
shall be done in accordance with the provisions of this Lease,
including without limitation, Paragraph 12, keeping the premises
free from liens.
12. LIENS Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work
performed, materials furnished or obligations incurred by Tenant.
Landlord may require, at Landlord's sole option, that Tenant shall
provide to Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half (1-1/2) times any
and all estimated cost of any improvements, additions or alteration in
the Premises to insure Landlord against any liability for mechanics' and
materialmen's liens and to insure completion of the work.
13. ASSIGNMENT AND SUBLETTING Tenant shall not either voluntarily or by
operation of law, assign, transfer, mortgage, pledge, or encumber this
Lease or any interest therein, and shall not sublet the said Premises or
any part thereof, or any right or privilege appurtenant thereto, or
suffer any other person (the employees, agents, servants and invitees of
Tenant excepted) to occupy or use the said Premises or any portion
thereof, without written consent of Landlord first had and obtained,
which consent shall not be unreasonably withheld; provided however, that
Landlord in the exercise of its good faith business judgment may refuse
to approve the assignment or sublease and shall promptly provide Tenant
with the reasons for its refusal. In the event Tenant desires to assign
this Lease or any interest therein or sublet all or part of the Premises,
Tenant shall give Landlord written notice thereof, which notice shall
include (i) the name of the proposed assignee, subtenant or occupant
("Transferee"), (ii) reasonable financial information regarding the
Transferee, (iii) a description of the Transferee's business to be
carried on in the Premises, and (iv) the terms of the assignment or
sublease and a description of the portion of the Premises to be affected.
Tenant shall also provide Landlord such additional information regarding
the Transferee or the proposed assignment or sublease as Landlord may
reasonably request.
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Notwithstanding the foregoing, Tenant shall have the right to assign or
sublet the premises, or a portion thereof, to a wholly owned affiliated
company or subsidiary, without the Landlord's consent. Tenant shall be
required, however, to give written notice to Landlord in advance of such
assignment or sublet and to prepare assignment or sublet agreements on
forms that are reasonably satisfactory to Landlord. In no event shall
such assignment or sublet release Tenant from its obligations under the
terms of this Lease.
Consent to one assignment, subletting, occupation or use by any other
person shall not be deemed to a consent to any subsequent assignment,
subletting, occupation or use by another person. Any assignment or
subletting without such consent shall be void, and shall, at the option
of the Landlord, constitute a default under this Lease.
14. HOLD HARMLESS Tenant shall indemnify and hold harmless Landlord against
and from any and all claims arising from Tenant's use of Premises for the
conduct of its business or from any activity, work or other thing done,
permitted or suffered by the Tenant in or about the Building, and shall
further indemnify and hold harmless Landlord against and from any and all
claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this
Lease, or arising from any act or negligence of the tenant, or any
officer, agent, employee, guest or invitee of Tenant, and from and
against all cost, attorney's fees, expenses and liabilities incurred in
or about any such claim or any action or proceeding brought thereon and
in any case, action or proceeding brought against Landlord by reason of
any such claim. Tenant upon notice from Landlord shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant
as a material part of the consideration to Landlord hereby assumes all
risk of damage to property or injury to persons, in, upon or about the
Premises, from any cause other than Landlord's negligence or willful act,
and Tenant hereby waives all claims in respect thereof against Landlord.
Landlord or its agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any
property by theft or otherwise, nor for any injury to or damage to
persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water or rain which may leak dampness or any
other cause whatsoever, unless caused by or due to the negligence or
willful acts of Landlord, its agents, servant or employees. Landlord or
its agents shall not be liable for interference with the light or other
incorporeal hereditaments, less of business by Tenant, nor shall Landlord
be liable for any latent defect in the premises or in the Building.
Tenant shall give prompt notice to Landlord in case of fire or accidents
in the Premises or in the Building or of defects therein or in the
fixtures or equipment.
15. SUBROGATION Landlord and Tenant hereby mutually waive their respective
rights of recovery against each other for any loss insured by fire,
extended coverage and other property insurance policies existing for the
benefit of the respective parties. Each party shall obtain any special
endorsements, if required by their insurer to evidence compliance with
the aforementioned waiver.
16. LIABILITY INSURANCE Tenant shall, at Tenant's expense, obtain and keep in
force during the term of this Lease, (1) a policy of comprehensive
general liability insurance insuring Landlord and Tenant against any
liability arising out of the ownership, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. (2) workers compensation
insurance as may be required by law, and (3) "all risk" property
insurance on
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Tenant's above-standard tenant improvements (specifically those
improvements exceeding the Landlord's tenant improvement allowance as
defined in Addendum to LeaseP. 1.C), personal property, equipment,
furniture and fixtures. The limit of said insurance shall not, however,
limit the liability of the Tenant hereunder. Tenant may carry said
insurance under a blanket policy, providing, however, said insurance by
Tenant shall have a Landlord's protective liability endorsement attached
thereto. If Tenant shall fail to procure and maintain said insurance,
Landlord may, but shall not be required to, procure and maintain same,
but at the expense of Tenant. Insurance required hereunder, shall be in
companies rated A+ AAA or better in "Best's Insurance Guide." Tenant
shall deliver to Landlord prior to occupancy of the Premises copies of
policies of liability insurance required herein or certificates
evidencing the existence and amounts of such insurance with loss payable
clauses reasonably satisfactory to Landlord. No policy shall be
cancelable or subject to reduction of coverage except after ten (10) days
prior written notice to Landlord.
17. SERVICES AND UTILITIES See Addendum to Lease, P. 9, Services and
Utilities.
18. PROPERTY TAXES Tenant shall pay, or cause to be paid, before delinquency,
any and all taxes levied or assessed and which become payable during the
term hereof upon all Tenant's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Premises; except
that which has been paid for by Landlord, and is the standard of the
Building. In the event any or all of the Tenant's leasehold improvements,
equipment, furniture, fixtures and personal property shall be assessed
and taxed with the Building, Tenant shall pay to Landlord its share of
such taxes within ten (10) days after delivery to Tenant by Landlord of a
statement in writing setting forth the amount of such taxes applicable to
Tenant's property.
19. RULES AND REGULATIONS Tenant shall faithfully observe and comply with the
reasonable rules and regulations that Landlord shall from time to time
promulgate. Landlord reserves the right from time to time to make all
reasonable modifications to said rules. The additions and modifications
to those rules shall be binding upon Tenant upon delivery of a copy of
them to Tenant. Landlord shall not be responsible for the nonperformance
of any said rules by any other tenants or occupants. The rules and
regulations shall be applied equally to all tenants occupying Regency
Center.
20. HOLDING OVER If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be a tenancy from
month-to-month at a rental in the amount of the last monthly rental, plus
all other charges payable hereunder, and upon all the terms hereof
applicable to a month-to-month tenancy.
21. ENTRY BY LANDLORD Landlord reserves and shall at any and all times have
the right to enter the Premises, inspect the same, supply janitorial
service and any other service to be provided by Landlord to Tenant
hereunder, to submit said Premises to prospective purchasers or tenants,
to post notices of non-responsibility, and to alter, improve or repair
the Premises and any portion of the Building of which the Premises are a
part that Landlord may deem necessary or desirable, without abatement of
rent and may for that purpose erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, always providing that the entrance to the Premises shall not
be blocked thereby, and further providing that the business of the Tenant
shall not be interfered with unreasonably. Tenant hereby waives any claim
for damages or for any injury or inconvenience to or interference with
Tenant's business any loss of occupancy or quiet
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enjoyment of the Premises, and any other loss occasioned thereby. For
each of the aforesaid purposes, Landlord shall at all times have and
retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults, safes and files, and specific,
secured, sensitive and confidential offices and Landlord shall have the
right to use any and all means which Landlord may deem proper to open
said doors in any emergency, in order to obtain entry to the Premises
without liability to Tenant except for any failure to exercise due care
for Tenant's property. Any entry to the Premises obtained by Landlord by
any of said means, or otherwise shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an eviction of Tenant from the Premises or
any portion thereof.
22. RECONSTRUCTION In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by
extended coverage insurance, Landlord agrees to forthwith repair the
same, and this Lease shall remain in full force and effect, except that
Tenant shall be entitled to a proportionate reduction of the rent while
such repairs are being made, such proportionate reduction to be based
upon the extent to which the making of such repairs shall materially
interfere with the business carried on by the Tenant in the Premises. If
the damage is due to the fault or neglect of Tenant or its employees,
there shall be no abatement of rent.
In the event the Premises or the Building of which the Premises are a
part are damaged as a result of any cause other than the perils covered
by fire or extended coverage insurance, then Landlord shall forthwith
repair the same provided the extent of the destruction be less than ten
(10%) of the then full replacement cost of the Premises or the Building
of which the Premises are a part. In the event the destruction of the
Premises or the Building is to an extent greater than ten (10%) of the
full replacement cost, then Landlord shall have the option (1) to repair
or restore such damage, this Lease continuing in full force and effect,
but the rent to be proportionately reduced as hereinabove in this Article
provided; or (2) give notice to Tenant at any time within sixty (60) days
after such damage terminating this Lease as of the date specified in such
notice, which date shall be no less than thirty (30) and no more than
sixty (60) days after the giving of such notice. In the event of giving
such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate on the date so specified in such notice and
the Rent, reduced by a proportionate amount, based upon the extent, if
any, to which such damage materially interfered with the business carried
on by the Tenant in the Premises, shall be paid up to date of said such
termination.
Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct
or restore the damage to the Premises resulting from any casualty covered
under this Article which occurs during the last twelve (12) months of the
term of this Lease or any extension thereof.
Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs to replacements of any over-standard
tenant improvements (specifically those exceeding Landlord's tenant
improvement allowance as defined in Addendum to Lease P. 1.C.) or
Tenant's trade fixtures, equipment, furniture or personal property.
Except for abatement of rent as provided above, the Tenant shall not be
entitled to any compensation or damages from Landlord for loss of the use
of the whole or any part of the premises, Tenant's personal property or
any inconvenience or annoyance occasioned by such damage, repair,
reconstruction or restoration.
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23. DEFAULT The occurrence of any or more of the following events shall
constitute a default and breach of this Lease by Tenant:
A. The vacating or abandonment of the Premises by Tenant, except in
cases when Tenant is current with all rental payments.
B. The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of ten (10) days
after written notice thereof by Landlord to Tenant.
C. The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed
by the Tenant, other than described in Article 23.B. above, where
such failure shall continue for a period of thirty (30) days after
written notice thereof by Landlord to Tenant; provided, however,
that if the nature of Tenant's default is such that more than
thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences such cure
within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.
D. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors, or the filing by or
against Tenant of a petition to have Tenant adjudged a bankrupt, or
a petition or reorganization or arrangement under any law relating
to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); or the
appointment of a trustee or a receiver to take possession of
substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored
to Tenant within thirty (30) days; or the attachment, execution or
other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interests in this Lease,
where such seizure is not discharged in thirty (30) days.
24. REMEDIES IN DEFAULT In the event of any such material default or breach
by Tenant, Landlord may at any time thereafter, with or without notice or
demand and without limiting Landlord in the exercise of a right or remedy
which Landlord may have by reason of such default or breach:
A. Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord.
In such event Landlord shall be entitled to recover from Tenant all
damages incurred by necessary renovation and alteration of the
Premises, reasonable attorney's fees, any real estate commission
actually paid, the worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount
of such rental loss for the same period that Tenant proves could be
reasonably avoided, that portion of the leasing commission paid by
Landlord and applicable to the unexpired term of this Lease. Unpaid
installments of rent or other sums shall bear interest from the
date due at the rate of ten (10%) percent per annum. In the event
Tenant shall have abandoned the Premises, Landlord shall have the
option of (a) taking possession of the Premises and recovering from
Tenant the amount specified in this paragraph, or (b) proceeding
under the provisions of the following Article 24.B.
9
B. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned
the Premises. In such event Landlord shall be entitled to enforce
all of Landlord's right and remedies under this Lease, including
the right to recover the rent as it becomes due hereunder.
C. Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decision of the State in which the
Premises are located.
25. EMINENT DOMAIN If more than twenty-five (25%) percent of the Premises
shall be taken or appropriated by any public or quasi-public authority
under the power of eminent domain, either party hereto shall have the
right, at its option, to terminate this Lease, and Landlord shall be
entitled to any and all income, rent, award or any interest therein
whatsoever which may be paid or made in connection with such public or
quasi-public use or purpose, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease. If either
less than or more than twenty-five (25%) percent of the Premises is
taken, and neither party elects to terminate as herein provided, the
rental thereafter to be paid shall be equitably reduced. If any part of
the Building other than the Premises may be so taken or appropriated,
Landlord shall have the right at its option to terminate this Lease and
shall be entitled to the entire award as above provided. Notwithstanding
the foregoing, Tenant shall be entitled to that portion of any
condemnation award made specifically on account of Tenant's relocation
expenses, increased rental costs, improvements contracted at Tenant's
expense or disruption of Tenant's business.
26. OFFSET STATEMENT Tenant shall at any time and from time to time upon not
less than ten (10) days prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing (a) certifying
that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that
this Lease as so modified is in full force and effect) and the date to
which the rental and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of the Landlord hereunder or specifying such
defaults if any are claimed. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the real
property of which the Premises are a part.
27. PARKING Tenant shall have the right to use in common with other tenants
or occupants of the Building the parking facilities of the Building.
28. AUTHORITY OF PARTIES
A. Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation, in accordance with a duly
adopted resolution of the board of directors of said corporation or
in accordance with the by-laws of said corporation, and that this
Lease is binding upon said corporation in accordance with its
terms.
B. Limited Partnerships. If the Landlord herein is a limited
partnership, it is understood and agreed that any claims by Tenant
on Landlord shall be limited to the assets of the limited
partnership, and furthermore, Tenant expressly waives any and all
rights to proceed against the individual partners or the officers,
directors or shareholders of any corporate partner, except to the
extent of their interest in said limited partnership.
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29. GENERAL PROVISIONS
A. Plats and Riders. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease
are a part hereof.
B. Waiver. The waiver by Landlord of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term,
covenant or condition on any subsequent breach of the same or any
other term, covenant or condition herein contained. The subsequent
acceptances of rent hereunder by Landlord shall not be deemed to be
a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of the Tenant to
pay the particular rental so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of the acceptance of
such rent.
C. Notices. All notices and demands which may or are to be required or
permitted to be given by either party to the other hereunder shall
be in writing. All notices and demands by the Landlord to the
Tenant shall be sent by United States Mail, postage prepaid,
addressed to the Tenant at 000 Xxxxx Xxxxxxx Xxxxx, Xxx Xxxxxx,
Xxxxxxxxxx 00000, or to such other places as Tenant may from time
to time designate in a notice to the Landlord. All notices and
demands by the Tenant to the Landlord shall be sent by United
States Mail, postage prepaid, addressed to the Landlord at 000
Xxxxx Xxxxx Xxxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxxxxxx 00000, or to
such other person or place as the Landlord may from time to time
designate in a notice to the Tenant.
D. Joint Obligation. If there be more than one Tenant the obligations
hereunder imposed upon Tenants shall be joint and several.
E. Marginal Headings. The marginal headings and titles to the Articles
of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
F. Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
G. Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and
bind the heirs, successors, executors, administrators and assigns
of the parties hereto.
H. Recordation. Neither Landlord nor Tenant shall record this Lease or
a short form memorandum hereof without the prior written consent of
the other party.
I. Quiet Possession. Upon Tenant paying the rent reserved hereunder
and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder,
Tenant shall have quiet possession of the Premises for the entire
term hereof, subject to all the provisions of this Lease.
J. Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting
charges, and late charges
11
which may be imposed upon Landlord by terms of any mortgage or
trust deed covering the Premises. Accordingly, if any installment
of rent or of a sum due from Tenant shall not be received by
Landlord or Landlord's designee within ten (10) days after said
amount is past due, then Tenant shall pay to Landlord a late charge
equal to five (5%) percent of such overdue amount. The parties
hereby agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of the late
payment by Tenant. Acceptance of such late charges by Landlord
shall in no event constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
K. Prior Agreements. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in
this Lease, and no prior agreements or understanding pertaining to
any such matters shall be effective for any purpose. No provision
of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors
in interest. This Lease shall not be effective or binding on any
party until fully executed by both parties hereto.
L. Inability to Perform. This Lease and the obligations of the Tenant
hereunder shall not be affected or impaired because the Landlord is
unable to fulfill any of its obligations hereunder or is delayed in
doing so, if such inability or delay is caused by reason of strike,
labor troubles, acts of God, or any other cause beyond the
reasonable control of the Landlord.
M. Attorney's Fees. In the event of any action or proceeding brought
by either party against the other under this Lease the prevailing
party shall be entitled to recover all costs and expenses including
the fees of its attorneys in such action or proceeding in such
amount as the court may adjudge reasonable as attorney's fees.
N. Sale of Premises by Landlord. In the event of any sale of the
Building, Landlord shall be and is hereby entirely freed and
relieved of all liability under any and all of its covenants and
obligations contained in or derived from this Lease arising out of
any act, occurrence or omission occurring after the consummation of
such sale; and the purchaser, at such sale or any subsequent sale
of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the
parties and any such purchaser to have assumed and agreed to carry
out any and all of the covenants and obligations of the Landlord
under this lease.
O. Subordination Attornment. Upon request of the Landlord, Tenant will
in writing subordinate its rights hereunder to the lien of any
first mortgage, or first deed of trust to any bank, insurance
company or other lending institution, now or hereafter in force
against the land and Building of which the Premises are a part, and
upon any buildings hereafter placed upon the land of which the
Premises are a part, and to all advances made or hereafter to be
made upon the security thereof.
Notwithstanding such subordination, neither Tenant's right to quiet
possession of the Premises nor this Lease shall be disturbed or
affected if Tenant is not in default hereunder and so long as
Tenant shall pay the rent and observe and perform all of the
provisions of this Lease, unless this Lease is otherwise terminated
pursuant to its terms.
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P. In the event any proceedings are brought for foreclosure, or in the
event of the exercise of power of sale under any mortgage or deed
of trust made by the Landlord covering the Premises, the Tenant
shall attorn to the purchaser upon any such foreclosure or sale and
recognize such purchaser as the Landlord under this Lease.
Q. Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other
than as an address of the business to be conducted by the Tenant in
the Premises.
R. Separability. Any provision of this Lease which shall prove to be
invalid, void or illegal shall in no way effect, impair or
invalidate any other provision hereof and such other provision
shall remain in full force and effect.
S. Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with
all other remedies at law or in equity.
T. Choice of Law. This Lease shall be governed by the laws of the
State in which the Premises are located.
U. Signs and Auctions. Tenant shall not place any sign upon the
Premises or Building or conduct any auction thereon without
Landlord's prior written consent.
30. BROKERS Tenant warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this Lease and it
knows no real estate broker or agent who is entitled to a commission in
connection with this Lease.
THE XXXXXX AND XXX XXXX FAIR, XXXXX AND COMPANY,
REVOCABLE TRUST INCORPORATED
By: By:
---------------------------- -----------------------------
Xxxxxx Xxxx
Its: Its:
---------------------------- -----------------------------
By: Date:
---------------------------- -----------------------------
Xxx Xxxx
Its:
----------------------------
Date:
----------------------------
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RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or placard shall be
inscribed, displayed or printed or affixed on or to any part of the
outside or inside of the Building without the written consent of the
Landlord first had and obtained and Landlord shall have the right to
remove any such sign, placard, picture, advertisement, name or notice
without notice to and at the expense of Tenant.
All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly
from outside the Premises; provided, however, that Landlord may furnish
and install a Building standard window covering at all exterior windows.
Tenant shall not without prior written consent of Landlord cause or
otherwise sunscreen any window.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress and egress from their respective Premises.
3. Tenant shall not alter any lock or install any new or additional locks
without permission of Landlord, whose consent shall not be unreasonably
withheld, or any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein and
the expense of any breakage, stoppage, damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose
employees or invitees shall have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without the prior notice to Landlord and all moving of the same
into or out of the Building shall be done at such time and in such manner
as Landlord shall designate. Notwithstanding the above, Tenant shall have
the right to move furniture, freight or equipment into and out of the
building without prior notice to Landlord, provided that such moves do
not involve exclusive use of an elevator for an extended period of time,
nor does the move interfere with the operation of other tenants in the
building. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into the Building
and also the times and manner of moving the same in and out of the
Building. Safes or other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or properly from any cause and all damage done to
the Building by moving or maintaining any such safe or other property
shall be repaired at the expense of the Tenant.
2
7. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable to
the Landlord or other occupants of the Building by reason of noise, odors
and/or vibrations, or interfere in any way with other tenants or those
having business therein, nor shall any animals or birds be brought in or
kept in or about the Premises or the Building.
8. No cooking, except for microwave and coffee machines, shall be done or
permitted by any Tenant on the Premises, nor shall the Premises be used
for the storage of merchandise, for washing clothes, for lodging, or for
any improper, objectionable or immoral purposes.
9. Tenant shall not use or keep in the Premises of the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or
use any method of heating or air conditioning other than that supplied by
Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires will
be allowed without the consent of the Landlord. The location of
telephones, call boxes and other office equipment affixed to the Premises
shall be subject to the approval of Landlord.
11. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 p.m. and 8:00 a.m. the following day, access to the
Building, or to the halls, corridors, elevators or stairways in the
Building, or to the Premises may be refused unless the person seeking
access is known to the person or employee of the Building in charge and
has a pass or is properly identified. The Landlord shall in no case be
liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. In case of invasion, mob,
riot, public excitement, or other commotion, the Landlord reserves the
right to prevent access to the Building during the continuance of the
same by closing of the doors or otherwise, for the safety of the tenants
and protection of property in the Building and the Building.
12. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.
13. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of
the Landlord.
14. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the
Building of which the Premises are a part.
15. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent same.
16. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
17. Landlord shall have the right to control and operate the public portions
of the Building, and the public facilities, and heating and air
conditioning, as well as facilities furnished for the common use of the
tenants, in such manner as it deems best for the benefit of the tenants
generally.
3
18. All entrance doors in the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept
closed except for normal ingress and egress from the Premises.
4
FIRST ADDENDUM TO LEASE
BY AND BETWEEN
THE XXXXXX AND XXX XXXX REVOCABLE TRUST, LANDLORD
AND
FAIR, XXXXX AND COMPANY, INCORPORATED, TENANT
DATED JULY 10, 1993
1. TENANT IMPROVEMENTS
A. Working Drawings and Specifications ("Bid Package"): Tenant shall
authorize Xxxxxxx Xxxxxxx and Associates or any other architect or
architectural firm of Tenant's choice ("Architect") to prepare a
space plan, construction drawings and design specifications for the
Premises. Tenant may direct Architect to utilize the services of
consultants ("Consultants") to provide engineered drawings and
design specifications for the mechanical, electrical and plumbing
systems in the Premises, including, but not limited to any air
conditioning system, duct work, heating and electric facilities.
(All such architectural and engineering drawings and specifications
are herein referred to collectively as the "Bid Package"). In
putting together the Bid Package, Architect and Consultants shall
exert their best efforts to reuse all existing improvements in the
Premises where possible and in conformance with Tenant's
requirements in the Premises. Tenant shall not be required to reuse
existing light fixtures in the Premises, but rather shall specify
its own light fixtures. Landlord shall provide the Architect and
Consultants with the base building capacity for (1) electrical
power, (2) HVAC and (3) floor loading (live and dead load
capacities and design criteria for the Premises). The Bid Package
shall be submitted to Tenant for its review and written approval
which shall be evidenced by Tenant's signing the Bid Package. The
Bid Package shall also be submitted to Landlord for Landlord's
approval which shall also be evidenced by Landlord's signing the
Bid Package. Landlord's approval shall not be unreasonably
withheld. It is the understanding of the parties that Tenant
intends to provide its employees with high quality office space
which meets the current needs of the workforce and enhances the
work performance of the employees and the company, while remaining
flexible enough to accommodate the growth and changing needs of the
Tenant. In other words, the Tenant may not always be looking for
the most economical solution or method of construction, but rather
one which provides Tenant with the highest ability to perform its
work while maintaining flexibility for future needs.
All architectural design, engineering, and consulting fees shall be
included in the Tenant Improvement Allowance. See Addendum P. 1.C.
Tenant may require that certain subcontractors be used by the
Contractor in bidding and performing the work, including, but not
limited to, WBE Electrical, WBE Telecom and Peerless Lighting.
The Bid Package shall include the Construction Contract which shall
be provided by Tenant. Landlord shall have the right to review and
approve the Construction Contract and make any necessary changes
with respect to preserving and protecting Landlord's rights,
remedies and property.
1
The Bid Package shall be completed and accepted by both Landlord
and Tenant no later than July 1, 1994. Each party shall have at
least ten (10) working days to review the Bid Package. Tenant will
prepare a schedule for delivery and review of the Bid Package by
January 1, 1994.
B. Contractor: The Contractor who shall perform the tenant improvement
work in the Premises shall be selected from two bidders. Landlord
shall select one Contractor and Tenant shall select one Contractor.
No later than June 1, 1994, Landlord and Tenant shall provide each
other with the name and address of their respective Contractor.
Landlord shall have fourteen (14) days to evaluate the Contractor
selected by Tenant. Landlord's criteria for evaluation of Tenant's
Contractor shall include, but not be limited to, reputation and
quality of workmanship, record of completing previous jobs on
schedule and within budget, relationship with the City of San
Xxxxxx Building and Planning Departments, cooperativeness in
dealing with Landlord and its employees, financial strength and
billing procedure. Tenant shall have fourteen (14) days to evaluate
Landlord's Contractor. Tenant's criteria for evaluation of
Landlord's Contractor shall include, but not be limited to, cost
effectiveness, quality of workmanship, creativity, record of
completing work on schedule and within budget, and an understanding
of Tenant's current and future requirements and a good working
relationship with Tenant and Tenant's employees. Landlord and
Tenant shall each use best efforts in ensuring that their
evaluation process of each other's Contractors is fair and
reasonable. A copy of the Bid Package may be given to each
Contractor and may be used in evaluating the Contractor. Landlord
and Tenant shall have the right to reject each other's Contractor
based on any of the above criteria or any other relevant criteria.
If a Contractor is rejected, the reasons for the rejection shall be
stated in a letter to Landlord or Tenant. If a Contractor is
rejected by Landlord or Tenant, another Contractor shall be
selected and its name submitted in writing within five (5) days.
Each Contractor shall be evaluated using the same criteria stated
above. Neither Tenant nor Landlord may reject more than three
Contractors submitted by the other.
Landlord may submit its own name as a Contractor.
As soon as Landlord approves Tenant's choice of a Contractor
("Tenant's Contractor") and as soon as Tenant approves Landlord's
choice of a Contractor ("Landlord's Contractor") Tenant's
Contractor and Landlord's Contractor shall be requested in writing
to submit a bid on the Bid Package. Ten (10) working days after
receipt of the request for bid and the complete Bid Package, both
Contractors shall submit a sealed fixed price contract bid (on such
contract form as Landlord, Tenant and Architect shall designate) to
construct the tenant improvements specified in the Bid Package.
Landlord and Tenant shall jointly open and review the bids.
Landlord and Tenant (after adjustments for any inconsistent
assumptions to reflect an "apples-to-apples" comparison) shall
select the lowest price bidder as the Contractor ("Contractor").
The Contractor shall enter into a construction contract with Tenant
consistent with the terms of the Bid Package and its bid to
construct the tenant improvements. That contract must state that
Tenant shall hold Landlord harmless from any and all liability for
the work to be performed under the terms of that construction
contract.
If Landlord's Contractor is not selected as the successful bidder,
Tenant shall pay Landlord or its representative a reasonable
owner's representation fee to compensate Landlord for its time and
effort in inspecting and overseeing the construction of the tenant
improvement work and assuring itself of good quality materials and
2
workmanship, that the work contained in the Request for
Disbursement (see Addendum P. 1.D.) is complete, and that there is
no interference with the day-to-day operations of the Building as a
result of Tenant's construction. The parties agree that the maximum
fee chargeable by Landlord shall be $50.00 per hour for up to five
(5) hours per week. This fee shall be deducted from the Tenant
Improvement Allowance (see Addendum to Lease P. 1.C.
C. Tenant Improvement Allowance: Landlord shall contribute Seven
Hundred Sixty-two Thousand Two Hundred Twenty Dollars ($762,220.00)
($23.00 x 33,140 usable SF) toward the construction of the tenant
improvements for Tenant's Premises ("Tenant Improvement
Allowance"). The Tenant Improvement Allowance shall include all
architectural, engineering and consultant fees, and all other fees
charged in conjunction with preparation of the Bid Package. All
costs exceeding the Tenant Improvement Allowance shall be borne by
Tenant.
D. Disbursement of Tenant Improvement Allowance: Once a month, on or
before the 10th day of the month, Tenant shall present to Landlord
a Request for Disbursement ("Request for Disbursement") requesting
payment by Landlord of any costs associated with the design,
engineering or construction of the tenant improvements. The Request
for Disbursement shall include the following information:
1) A certificate from Tenant confirming that all of the work
contained in the Request for Disbursement has been completed
in accordance with the applicable contracts.
2) A Certificate from Tenant's Architect confirming that all of
the work contained in the Request for Disbursement has been
completed in accordance with the applicable contracts and
certifying that materials have arrived on the job.
3) Unconditional mechanics lien releases and copies of invoices
from the Contractor, subcontractors, suppliers and materialmen
marked "Paid."
4) And such other reasonable documentation as may be requested by
Landlord not later than the 25th day of the previous month.
Payment shall not be made on any Request for Disbursement until all
of the information and documentation above is complete.
Payment shall be made only for those materials which have been
installed or which have been delivered to the Premises. Landlord
shall have five (5) calendar days from the date of receipt of the
Request for Disbursement to review same and request clarification.
If Landlord is in Agreement with the Request for Disbursement,
payment shall be made to Tenant within ten (10) days of receipt of
the Request for Disbursement. If any items are in dispute, Landlord
shall not make payment on those items until the dispute is
resolved, but Landlord shall make payment to Tenant of all amounts
not in dispute within ten (10) days of receipt of the Request for
Disbursement. Landlord shall not unreasonably withhold its approval
of any Request for Disbursement or on any specific request for
payment made therein. A final disbursement of Twenty-five Thousand
Dollars ($25,000.00) shall be held until all punchlist items in
Tenant's Premises are complete, and the time for the filing of any
mechanics liens claimed or which might be filed on account of any
work performed by Tenant, Contractor, subcontractors, suppliers or
materialmen has passed. Any damage to Landlord's property will be
repaired to
3
Landlord's satisfaction. Once Landlord has disbursed the entire
amount of the Tenant Improvement Allowance (See Addendum P. 1.C.)
to Tenant, except the final disbursement of $25,000.00, any and all
costs associated with the design, engineering or construction of
Tenant's Premises shall be paid directly by Tenant.
E. Change Orders: Tenant may, but only by written instructions or
drawings issued to Landlord and Contractor ("Change Order
Request"), make changes to the work specified in the Bid Package,
including without limitation, requiring additional work, directing
the omission of work previously ordered or changing the quantity or
type of any materials, equipment or services. Promptly upon receipt
of a Change Order Request, Contractor will provide Tenant with a
statement in detail setting forth the cost of said change
(including a breakdown of costs attributable to labor and
materials, construction equipment exclusively necessary for the
change, and preparation or amendment to shop drawings resulting
from said change and any time delays anticipated to result from
said change). Tenant will have two (2) days after receipt of such
statement in which to confirm the Change Order Request and
authorize the work to be performed or to withdraw such request.
Change Orders will be signed by Landlord and Tenant in advance of
any work being performed on a Change Order.
F. Substantial Completion: For purposes of this Lease, "Substantial
Completion" shall mean that construction of the tenant improvements
has been completed in accordance with the Bid Package, except for
minor finishing details of construction, decoration, mechanical
adjustment, minor replacement of defective or damaged materials,
and other items of a type commonly found on architectural
punchlists, all of which do not materially interfere with the
occupancy and use of the Premises by Tenant or with Tenant's
ability to complete the improvements to the Premises to be made by
Tenant. Within three (3) days of Substantial Completion Tenant's,
Architect shall notify Landlord in writing that the Premises are
Substantially Complete. If Tenant is conducting business in any
part of the Premises the space shall be automatically deemed
Substantially Complete.
Within ten (10) calendar days after Substantial Completion of the
tenant improvements, Tenant, accompanied by Landlord or Landlord's
representative, shall make an inspection of the Premises and
prepare a punchlist of items needing additional work by the
Contractor. Contractor shall complete all punchlist items
reasonably identified by Tenant or Landlord within thirty (30)
calendar days after the inspection or as soon as practicable
thereafter. If there is any dispute as to whether Contractor has
substantially completed the work, a good faith decision of Tenant's
Architect shall be final and binding on the parties.
G. Standard of Construction: Contractor shall complete all work in
accordance with the Bid Package approved by Landlord and Tenant and
shall make no alterations, additions, or reinforcements to the
structure of the building except as specifically approved by
Landlord in the Bid package, or in writing thereafter. Tenant, or
Contractor, at its expense, shall procure all building and other
permits required for completion of Tenant's work. Tenant agrees
that all work done by Tenant, its Contractor and subcontractors
shall be performed in full compliance with all laws, rules, orders,
permits, ordinances, directions, regulations and requirements of
all governmental agencies, offices, and departments having
jurisdiction, including without limitation applicable provisions
pertaining to use of hazardous or toxic materials and the Americans
with Disabilities Act,
4
and in full compliance with the rules, orders, directions,
regulations and requirements of the Board of Fire Underwriters or
any other organization performing a similar function.
Landlord shall have the right to enter the Premises at any time to
post any Notice of Non-Responsibility or other notice on the
Premises during Tenant's construction. Contractor and all
contractors and subcontractors retained by Tenant or Contractor
shall be bondable and bonded, licensed contractors, possessing good
labor relations, adequate financials, and with a record of
performing quality workmanship.
During the course of construction, Tenant shall maintain builder's
risk insurance in form and content reasonably satisfactory to
Landlord. Tenant's insurance shall name Landlord as an additional
insured and shall provide that it may not be canceled or amended
without twenty (20) days prior written notice to Landlord. At least
seven (7) calendar days prior to commencement of construction,
Tenant shall provide Landlord with a certificate of such insurance
and evidence of any required bonds in form satisfactory to
Landlord.
Contractor shall complete the tenant improvement work with
diligence and in such a manner as not to interfere with the use or
enjoyment of other portions of the Project or common areas by
Landlord or other tenants. Contractor shall provide for all
temporary power, water and other utility facilities as required in
connection with the construction of Tenant's work. Contractor shall
provide its own dumpster for collection and disposition of
construction debris, which shall be located at a location approved
by Landlord, and all construction debris from construction shall be
disposed of in Contractor's dumpster and not in trash facilities
for the Project. Contractor's construction materials, tools,
equipment and debris shall be stored only within the Premises, or
in areas designated for that purpose by Landlord. Work space
exterior to the Premises shall be available only with the written
approval of Landlord. Tenant's construction work shall be subject
to the inspection and supervision of Landlord and Landlord's
representatives.
Tenant and Contractor shall indemnify and hold harmless Landlord
for any and all claims arising from Tenant's work. Tenant shall pay
for all damage to the Building, the Project, or appurtenant areas
or equipment, as well as all damage to tenants or occupants thereof
or their licensees, or invitees, including, but not limited to,
losses incurred as the result of power outages caused by Tenant's
or Contractor's work in the Building. Any such damages may be
deducted from the Tenant Improvement Allowance.
H. Liability: The parties acknowledge that Landlord is not an
architect or engineer and that the tenant improvement work will be
designed by independent Architects, Engineers and Consultants.
Accordingly, Landlord does not guarantee or warrant that any part
of the Bid Package will be free from errors or omissions, and
Landlord shall have no liability therefor.
Tenant shall be solely responsible for the adequacy in all respects
of the Bid Package, including without limitation compliance with
all governmental requirements, compatibility with the building
shell, and any special requirements of Tenant's proposed equipment
or machines with respect to ambient temperatures, electrical use or
current, or water availability. Landlord shall warrant only that
the information provided regarding the base building (referred to
in Addendum to Lease P. 1.A.) is true and correct to the best of
its knowledge. Tenant acknowledges that in connection with
obtaining Landlord's approval of the Bid Package, Tenant may
provide Landlord with certain information
5
regarding its specific needs relating to the Premises in developing
plans and specifications for Tenant's work and that Tenant may
provide some of its own equipment for installation in the Premises.
Tenant further acknowledges that Landlord will make no independent
review of any such information and that Landlord does not warrant,
either expressly or impliedly, the adequacy of the Bid Package for
Tenant's requirements or Tenant's equipment for Tenant's intended
purpose.
I. Ownership of Tenant Improvements: Upon termination of the Lease,
all of the tenant improvements shall remain in the Premises unless
Landlord shall consent in writing to the removal thereof by Tenant.
However, all Tenant's trade fixtures, equipment, furniture and
personal property shall remain the property of Tenant.
J. Life Safety: With respect to Life Safety System, Landlord believes
to the best of its knowledge that Regency Center meets all current
code requirements including handicap access compliance. If any code
requirements are not met with respect to the Building's Life Safety
System all costs to accomplish changes necessary to the Building
shall be covered by Landlord. All code compliance costs with
respect to Tenant's Premises shall be covered by the Tenant
Improvement Allowance or by Tenant.
K. Use of Current Fixtures in Space: Tenant shall have the right to
reuse the fixtures currently in the Premises including but not
limited to all cafeteria built-ins, the moveable partitions
(retractable wall) in the training rooms and fire extinguishers and
cases. The food trolley located in the cafeteria and the equipment
purchased or leased by the previous Tenant including, but not
limited to, the cafeteria tables and chairs, ice dispenser,
training room tables, chairs, white boards, projection screen,
reception desk, counter and hutch are not part of the fixtures in
the Premises.
3. POSSESSION
A. Possession of the Premises ("Possession") shall be delivered to
Tenant no later than October 1, 1994 for the purpose of
constructing the tenant improvements. If possession of the space
cannot be delivered by Landlord by that date, for any reason
whatsoever, this Lease shall not be void or voidable, nor shall
Landlord be liable to Tenant for any loss or damage resulting
therefrom, nor shall the expiration date of the term of Lease be in
any way extended, but in that event, of Commencement Date (as
defined in AddendumP. 4.A.) shall be extended by the exact number
of days of Landlord's delay in delivering possession. Landlord
shall inform Tenant of the date of Possession in writing at least
thirty (30) days prior to Possession.
B. If Landlord shall not have delivered Possession of the Premises
within ninety (90) days after the Commencement Date (as defined in
Addendum P. 4.A.), Tenant may, at Tenant's option, by notice in
writing to Landlord within ten (10) days thereafter, cancel this
Lease, in which event the parties shall be discharged from all
obligations hereunder; provided, however, that if such written
notice by Tenant is not received by Landlord within said ten (10)
day period, Tenant's right to cancel this lease hereunder shall
terminate and be of no further force or effect.
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4. COMMENCEMENT
A. If Possession is delivered on October 1, 1994 the Commencement Date
("Commencement") shall be defined as December 1, 1994 or five (5)
days after Substantial Completion of the tenant improvement work
(as defined in Addendum P. 1.E.) whichever is earlier. If
Possession is delivered prior to October 1, 1994, the Commencement
Date shall be sixty (60) calendar days after the date of Possession
or five (5) days after Substantial Completion of the tenant
improvement work, whichever is earlier.
Landlord shall notify Tenant in writing of the actual Commencement
Date no later than thirty (30) days after Substantial Completion.
In the event Substantial Completion is delayed by Tenant Caused
Delays (as defined in Addendum P. 4.C.) the same number of days
shall be deducted from total number of days of the build-out and
that date shall be the Commencement.
5. FREE RENT
Landlord shall allow Tenant and Contractor to occupy and perform the
tenant improvement work in the Premises without payment of rent after
Possession (as defined in Addendum P. 3) for a period of two (2) months.
Landlord shall allow Tenant to occupy one-half (1/2) of the Premises
(approximately 17,630 rentable square feet) for six (6) months after the
Commencement Date without payment of rent. Tenant's first month's rent
paid upon execution of this Lease shall cover the rent on the remaining
one-half (1/2) of the Premises for the first two (2) months after the
Commencement Date.
6. OPERATING EXPENSE ADJUSTMENTS (Continued from Article 7 of the Lease.)
A. During the initial term of this Lease, management costs for the
building shall not exceed three percent (3%) of the gross rental
income for the building.
B. Landlord shall keep full, accurate, and separate books of account
and records covering all Direct Expenses, which books of accounts
and records shall accurately reflect the total Direct Expenses, and
Landlord's xxxxxxxx to Tenant for Operating Expense Adjustments.
C. Tenant shall have the right to protest any charge to Tenant by
Landlord for Operating Expense Adjustments, provided that said
protest is made within thirty (30) days after receipt of Landlord's
notice of such charge. In the event that Tenant shall protest,
Tenant shall be entitled to audit Landlord's books of account,
records, and other pertinent data regarding Direct Expenses. The
audit shall be limited to the determination of direct Expenses and
charges to Tenant for Operating Expense Adjustments and shall be
conducted during normal business hours. If the audit shows that
there has been an overpayment by Tenant, the overpayment shall be
immediately due and repayable by Landlord to Tenant.
7. OPTION TO EXTEND
A. Landlord grants to Tenant the option to extend the term of this
Lease for two 3-year periods commencing when the prior term expires
upon each and all of the following terms and conditions:
7
(i) Tenant gives to Landlord and Landlord receives notice of
the exercise of the option to extend this Lease for said
additional term no later than twelve (12) months prior to
the time that the option period would commence if the
option were exercised, time being of the essence. If said
notification of the exercise of said option is not so given
and received, this option shall automatically expire;
(ii) At the time said written notification of exercise of option
is given and received, Tenant shall not be in default under
any of the material obligations of this Lease to be
performed by Tenant and this Lease shall not have
previously terminated nor terminated prior to the
commencement of the option term;
(iii) All of the terms and conditions of this Lease except where
specifically modified by this option shall apply;
(iv) The monthly rent for each month of the option period shall
be calculated as follows:
The rent payable by Tenant during the first option period shall be
the Fair Market Rental Value of the Premises (as defined below) at
the commencement date of the option period. There shall be an
annual C.P.I. increase not to exceed four percent (4%) in each
subsequent year of the first option period. The rent in the first
year of the second option period shall be the rent in the last year
of the first option period to which will be added a C.P.I. increase
not to exceed four percent (4%). There shall be an annual C.P.I.
increase not to exceed four percent (4%) in each subsequent year of
the second option period. All of the C.P.I. increases during the
option periods shall be calculated on the basis of the formula
provided in the Lease P. 5.B. If Landlord and Tenant cannot agree
on the Fair Market Rental Value of the Premises for the extension
periods within forty-five (45) days after the Tenant has notified
Landlord of its exercise of the option, Landlord and Tenant shall
each select, within forty-five (45) days of such notification, an
appraiser who must be a qualified M.A.I. appraiser to determine
said Fair Market Rental Value. If one party fails to so designate
an appraiser within the time required, the determination of Fair
Market Rental Value of the one appraiser who has been designated by
the other party hereto within the time required shall be binding
upon both parties. The appraisers shall submit their determinations
of Fair Market Rental Value to both parties within thirty (30) days
after their selection. If the difference between the two
determinations is ten percent (10%) or less of the higher
appraisal, then the average between the two determinations shall be
the Fair Market Rental Value of the Premises. If said difference is
greater than ten percent (10%), then the two appraisers shall
within twenty (20) days of the date that the later submittal is
submitted to the parties designate a third appraiser who must also
be a qualified M.A.I. appraiser. The sole responsibility of the
third appraiser will be to determine which of the determinations
made by the first appraisers is most accurate. The third appraiser
shall have no right to propose a middle ground or any modification
of either of the determinations made by the first two appraisers.
The third appraiser's choice shall be submitted to the parties
within thirty (30) days after his or her selection. Such
determination shall bind both of the parties and shall establish
the Fair Market Rental Value of the Premises. Each party shall pay
for their own appraiser and shall pay an equal share of the fees
and expenses of the third appraiser.
8
Fair Market Rental Value for purpose of this Lease shall mean the
then prevailing rent for premises comparable in size, quality, and
orientation to the demised Premises, located in buildings
comparable in size to, and in the general vicinity of, the building
which the demised Premises are located, leased on terms comparable
to the terms contained in this Lease.
8. RIGHT OF FIRST OPPORTUNITY TO LEASE ADDITIONAL PREMISES AT 100 XXXXX
RANCH ROAD, SAN XXXXXX
At any time during the term hereof, or any options to extend which Tenant
has exercised, provided that Tenant is not in default as defined herein,
Tenant shall have a right of First Opportunity to Lease for all office
space that becomes available for lease at 000 Xxxxx Xxxxx Xxxx, Xxx
Xxxxxx, based on the terms and conditions as outlined below.
Landlord and Tenant acknowledge that there are existing tenants at 000
Xxxxx Xxxxx Xxxx, which tenants have options to renew or wish to renew
their respective leases, and that these existing options and requests to
renew would take precedent over the Right of First Opportunity to Lease
described herein.
Landlord and Tenant further acknowledge that this Right of First
Opportunity to Lease shall apply only to premises, from which existing
tenants vacate or which is currently vacant.
Landlord shall notify Tenant in writing of the availability of additional
office premises at 000 Xxxxx Xxxxx Xxxx, Xxx Xxxxxx within thirty (30)
days of Landlord receiving notice from an existing Tenant at 000 Xxxxx
Xxxxx Xxxx of that Tenant's intent to vacate their premises. Landlord's
notice to Tenant shall include the size of premises, the projected date
at which the premises may be available, and a floor plan indicating the
current configuration of the premises.
Tenant shall have ten (10) days after receipt of notice from Landlord to
notify Landlord of Tenant's intent to lease the premises which was the
subject of the notice. In the event Landlord does not receive notice from
Tenant of Tenant's intent to lease said available space, Landlord shall
have the right to lease said space to any other Tenant which Landlord
chooses, and Tenant's Right of First Opportunity to lease that specific
premises shall be deemed waived.
In the event Tenant notifies Landlord of its intent to lease said
premises, Landlord and Tenant shall proceed as soon as is reasonably
possible to execute a lease agreement for the specific premises that
became available. Terms and conditions of the Lease shall be based on the
same terms and conditions of the lease(s) on the other space Tenant
occupies in the Building at the time the lease is executed. Landlord and
Tenant shall make a good faith effort to execute a Lease for the specific
available space within thirty (30) days after Tenant has notified
Landlord of its intent to lease said space.
This Right of First Opportunity to Lease shall in no way limit the
Landlord from executing leases with new tenants for terms of any length,
with options to renew for any length, for those spaces for which Tenant
has not exercised its Right of First Opportunity to lease as defined
herein.
9
9. SERVICES AND UTILITIES
A. Provided that Tenant is not in default hereunder, Landlord agrees
to furnish to the Premises five-day per week janitorial service.
Landlord shall also maintain and keep lighted, heated and air
conditioned during reasonable hours of generally recognized
business days, the common entries, common corridors, common stairs
and toilet rooms in the building of which Premises are a part.
Landlord shall not be liable for, and Tenant shall not be entitled
to, any reduction of rental by reason of Landlord's failure to
furnish any of the foregoing when such failure is caused by
accident, breakage, repairs, strikes, lockouts or other labor
disturbances or labor disputes of any character, or by any other
cause, similar or dissimilar, beyond the reasonable control of
Landlord. Landlord shall not be liable under any circumstances for
a loss of or injury to property, however occurring, through or in
connection with or incidental to failure to furnish any of the
foregoing.
B. Tenant shall have 24-hour per day, seven-day per week access to its
Premises.
C. Landlord shall provide Tenant a monthly allowance of $3,878.71
(35,261 rentable SF x $.11) for Tenant's electrical service. This
allowance is included in the Base Rent as defined in Article 5 of
the Lease.
Landlord and Tenant recognize that Tenant's electrical service
shall cost in excess of $.11 per square foot per month due to
Tenant's heavy electrical and air conditioning requirements.
Tenant shall be charged for all PG&E charges to the building over
and above the monthly allowance provided above, less any
over-standard charges to other tenant's in the building (any usage
over the $.11 allowance provided to each Tenant.) At the time of
Lease execution, no per square foot tenants in the Building other
than Fireman's Fund who currently occupies the entire second floor,
have any over-standard useage. Landlord shall notify Tenant as to
any changes in the existing tenant's electrical useage or any
over-standard useage of new tenants to the building. Tenant may at
any time notify Landlord that in Tenant's view, a particular tenant
may be using over-standard electrical and Landlord will investigate
that useage with the assistance of an electrical engineer and shall
report to Tenant its findings regarding the useage and shall charge
the other tenant for any actual over-standard useage, which amount
shall be deducted from Tenant's over-standard charges. If Tenant
does not agree with Landlord or Landlord's engineer's calculation,
Tenant may have its own engineer evaluate the other tenant's
useage.
For the first year of Tenant's occupancy, Landlord shall charge
Tenant $.11 per useable square foot per month for over-standard
electrical useage as a projected expense, which amount is an
average paid by Tenant in its other Premises located at 000 Xxxxx
Xxxxx Xxxx and 000 Xxxxx Xxxxxxx Xxxxx. This amount ($3,645.40)
shall be paid along with the monthly rent. At the end of the first
year of occupancy, Landlord shall prepare a PG&E invoice analysis
showing the actual cost of over-standard useage by Tenant. Landlord
shall credit Tenant for any amounts paid in excess of the actual
cost of over-standard useage. Tenant shall pay Landlord for any
costs in excess of the total projected sum paid by Tenant over the
first year of occupancy. The amount paid by Tenant for
over-standard electrical useage for each subsequent year of
occupancy shall be based on
10
the previous year's charges and a similar accounting between
Landlord and Tenant will occur annually.
D. The hours of operation of the heating and air conditioning system
for the building are as follows:
Monday thru Friday: 7:00 a.m. to 6:00 p.m.
Saturdays: 8:00 a.m. to 3:00 p.m.
E. In the event Tenant requires the operation of the heating and air
conditioning system beyond the normal hours of operation for the
building, Tenant shall notify the building manager in advance of
the required extended hour usage, and the building manager shall
program the heating and air conditioning system to operate during
the time period requested by Tenant.
F. In the event Tenant shall request that an override mechanism be
installed during the term of the Lease, an override mechanism shall
be installed on the heating and air conditioning system which
services Tenant's premises. The cost of this mechanism shall be
paid by the Tenant at the time of the installation. This mechanism
shall allow Tenant to have control of the heating and air
conditioning system for its premises in hours other than the normal
building hours stated above.
Along with the override mechanism, an hourly meter shall be
attached to the override mechanism which shall measure Tenant's use
of the heating and air conditioning system beyond the normal
building hours. On a monthly basis, Landlord shall charge Tenant
for this usage by multiplying the number of hours used by the per
hour charge for operating the heating and air conditioning system
which shall be determined by Landlord's electrical engineer and
heating and air conditioning contractor.
10. COMMUNICATIONS INSTALLATION
Tenant has installed certain communications equipment on the roof of the
Building.
Prior to the end of the term of this Lease, Tenant, at Tenant's sole cost
and expense, shall remove the communications equipment and shall,
forthwith and with all due diligence, repair any damage to the Premises
caused by such removal.
11
11. CONSENT
Landlord and Tenant agree that in the event their consent is required
pursuant to the provisions of the Lease, such consent shall not be
unreasonably withheld.
LANDLORD THE XXXXXX AND XXX XXXX REVOCABLE TRUST
By: Xxxxxx Xxxx
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Xxxxxx Xxxx
Its:
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By: Xxx Xxxx
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Xxx Xxxx
Its:
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Date: March 30, 1994
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TENANT FAIR, XXXXX AND COMPANY, INCORPORATED
By: Xxxxxx X. Xxxxxxxxx
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Its: Executive Vice President
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Date: March 10, 1994
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