EXHIBIT 10.71
AMERICAN INDUSTRIAL
REAL ESTATE AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION ASSOCIATION LOGO
STANDARD SUBLEASE
(LONG-FORM TO BE USED WITH PRE-1996 AIREA LEASES)
(NOTE: NOT DESIGNED FOR SITUATIONS WHERE LESS THAN ENTIRE PREMISES
ARE BEING SUBLET)
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This Sublease ("SUBLEASE"), dated for reference purposes only November 21, 2002, is made by and between Safeguard Business Systems, Inc., a
Delaware corporation ("SUBLESSOR") AND MTI Technology, a Delaware corporation ("SUBLESSEE"), (collectively the "PARTIES", or individually a "PARTY").
1.2 PREMISES: That certain real property, including all improvements therein, and commonly known by the street address of 14661 Franklin Avenue, Tustin. A two story building consisting of 41,130 sq. ft. located in the County of Orange, State of California and generally described as (describe briefly the nature of the property) a two story office building ("PREMISES").
1.3 TERM: Two (2) years and eight (8) months commencing February 1, 2003 ("COMMENCEMENT DATE") and ending September 30, 2005 ("EXPIRATION DATE").
1.4 EARLY POSSESSION: SEE paragraph 14 of Addendum ("EARLY POSSESSION DATE").
1.5 BASE RENT: $33, 726.60 per month ("BASE RENT"), payable on the first day of each month commencing February 1, 2003.
[x] If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted, See paragraph 15 of Addendum.
1.6 BASE RENT AND OTHER MONIES PAID UPON EXECUTION:
(a) BASE RENT: $ 33,726.60 for the period _____________.
(b) SECURITY DEPOSIT: $53,469.00 See paragraph 16 of Addendum ("SECURITY DEPOSIT").
(c) ASSOCIATION FEES: $ None for the period.
(d) OTHER: $ None for ____________.
(e) TOTAL DUE UPON EXECUTION OF THIS LEASE: $87,195.60
1.7 AGREED USE: General office and related legal uses.
1.8 REAL ESTATE BROKERS: See paragraph 17 of Addendum
(a) REPRESENTATION: The following real estate brokers (the "BROKERS") and brokerage relationships exist in this transaction (check applicable boxes):
[X] Julien J. Studley, attention Michael Kennedy represents Sublessor
exclusively ("SUBLESSOR'S BROKER");
[ ] Julien J. Studley, attention David Cantwell represents Sublessee
exclusively ("SUBLESSEE'S BROKER"); or
[ ] _____________________ represents both Sublessor and Sublessee ("DUAL
AGENCY").
(b) PAYMENT TO BROKERS: Upon execution and delivery of this Sublease by both Parties, ADC Telecommunications, Inc. shall pay to the Brokers the brokerage fee agreed to in a separate written agreement
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1.10 ATTACHMENTS. Attached hereto are the following, all of which constitute a part of this Sublease:
[X] an Addendum consisting of Paragraphs 14 through 21;
[ ] a plot plan depicting the Premises;
[ ] a Work Letter
[X] a copy of the Master Lease;
[ ] other (specify):
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2. PREMISES.
2.1 LETTING. Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Sublease. Unless otherwise provided herein, any statement of size set forth in this Sublease, or that may have been used in calculating Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision whether or not the actual size is more or less. NOTE: SUBLESSEE IS ADVISED TO VERIFY THE ACTUAL SIZE PRIOR TO EXECUTING THIS SUBLEASE.
2.2 CONDITION, See paragraph 18 of Addendum. Sublessor shall deliver the Premises to Sublessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs ("Start Date"), and warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning systems ("HVAC"), and any items which the Sublessor is obligated to construct pursuant to the Work Letter attached hereto, if any, other than those constructed by Sublessee, shall be in good operating condition on said date. If a non-compliance with such warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Sublessor shall, as Sublessor's sole obligation with respect to such matter, except as otherwise provided in this Sublease, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, malfunction or failure, rectify same at Sublessor's expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the remaining systems and other elements. If Sublessee does not give Sublessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Sublessee at Sublessee's sole cost and expense
2.3 COMPLIANCE. Sublessor warrants that any improvements, alterations or utility installations made or installed by or on behalf of Sublessor to or on the Premises comply with all applicable covenants or restrictions of record and applicable building codes, regulations and ordinances ("APPLICABLE REQUIREMENTS") in effect on the date that they were made or installed. Sublessor makes no warranty as to the use to which Sublessee will put the Premises or to modifications which may be required by the Americans with Disabilities Act or any similar laws as a result of Sublessee's use. NOTE: SUBLESSEE IS RESPONSIBLE FOR DETERMINING WHETHER OR NOT THE ZONING AND OTHER APPLICABLE REQUIREMENTS ARE APPROPRIATE FOR SUBLESSEE'S INTENDED USE, AND ACKNOWLEDGES THAT PAST USES OF THE PREMISES MAY NO LONGER BE ALLOWED. If the Premises do not comply with said warranty, Sublessor shall, except as otherwise provided, promptly after receipt of written notice from Sublessee setting forth with specificity the nature and extent of such non-compliance, rectify the same. If the Applicable Requirements are hereafter changed so as to require during the term of this Sublease the construction of an addition to or an alteration of the Building, the remediation of any Hazardous Substance, or the reinforcement or other physical modification of the Building ("Capital Expenditure"), Sublessor and Sublessee shall allocate the cost of such work as follows:
(a) If such Capital Expenditures are required as a result of the specific and unique use of the Premises by Sublessee as compared with uses by tenants in general, Sublessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last two years of this Sublease and the cost thereof exceeds 6 months' Base Rent, Sublessee may instead terminate this Sublease unless Sublessor notifies Sublessee in writing, within 10 days after receipt of Sublessee's termination notice that Sublessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months' Base Rent. If the Parties elect termination, Sublessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Sublessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall, however, in no event be earlier than the last day that Sublessee could legally utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Sublessee (such as governmentally mandated seismic modifications, then Sublessor shall pay for said Capital Expenditure and the cost thereof shall be prorated between the Sublessor and Sublessee and Sublessee shall only be obligated to pay, each month during the remainder of the term of this Sublease, on the date on which Rent is due, an amount equal to 1/144th the cost of such Capital Expenditure. Sublessee shall pay interest on the unamortized balance at a rate that is then commercially reasonable in the judgment of Sublessor's accountant. Sublessee may, however, prepay its obligation at any time. Provided, however, that if such Capital Expenditure is required during the last 2 years of this Sublease or if Sublessor reasonably determines that it is not economically feasible to pay its share thereof, Sublessor shall have the option to terminate this Sublease upon 90 days prior written notice to Sublessee unless Sublessee notifies Sublessor, in writing, within 10 days after receipt of Sublessor's termination notice that Sublessee will pay for such Capital Expenditure. If Sublessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Sublessee may advance such funds and deduct same, with interest, from Rent until Sublessor's share of such costs have been fully paid. If Sublessee is unable to finance Sublessor's share, or if the balance of the Rent due and payable for the remainder of this Sublease is not sufficient to fully reimburse Sublessee on an offset basis, Sublessee shall have the right to terminate this Sublease upon 10 days written notice to Sublessor.
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(c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary unexpected and new Applicable Requirements. If the Capital Expenditures are instead triggered by Sublessee as a result of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Sublessee shall be fully responsible for the cost thereof, and Sublessee shall not have any right to terminate this Sublease.
2.4 ACKNOWLEDGEMENTS. Sublessee acknowledges that: (a) it has been advised by Sublessor and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities Act), and their suitability for Sublessee's intended use (b) Sublessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither Sublessor, Sublessor's agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Sublease. In addition, Sublessor acknowledges that: (i) Brokers have made no representations, promises or warranties concerning Sublessee's ability to honor the Sublease or suitability to occupy the Premises, and (ii) it is Sublessor's sole responsibility to investigate the financial capability and/or suitability of all proposed tenants.
2.5 AMERICANS WITH DISABILITIES ACT. In the event that as a result of Sublessee's use, or intended use, of the Premises the Americans with Disabilities Act or any similar law requires modifications or the construction or installation of improvements in or to the Premises, Building, Project and/or Common Areas, the Parties agree that such modifications, construction or improvements shall be made at: [ ] Sublessor's expense [X] Sublessee's expense. Notwithstanding the Sublease shall not be responsible for costs associated with compliance to Americans With Disabilities Act unless Sublessee applies for a construction permit causing compliance to be reviewed.
3. POSSESSION.
3.1 Early Possession. See paragraph 14 of Addendum. If Sublessee totally or partially occupies the Premises prior to Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early possession. All other terms of this Sublease (including but not limited to the obligations to pay Sublessee's Share of Common Area Operating Expenses, Real Property Taxes and insurance premiums and to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date.
3.3 Sublessee Compliance. Sublessor shall not be required to tender possession of the Premises to Sublessee until Sublessee complies with its obligation to provide evidence of insurance. Pending delivery of such evidence, Sublessee shall be required to perform all ...