EXHIBIT 10.7
THIRD ADDENDUM TO LEASE BY AND BETWEEN
ADVENT REALTY LIMITED PARTNERSHIP AND
HOMELIFE REALTY SERVICES DATED JULY 8, 1993
FOR THE PROPERTY LOCATED AT
4100 NEWPORT PLACE, SUITE 730, NEWPORT BEACH, CALIFORNIA 92660
THIRD ADDENDUM TO LEASE
This Addendum to Lease dated July 17, 1996 shall modify that certain
lease (hereinafter referred to as the "Lease") by and between Advent Realty
Limited Partnership 11, successor in interest to Newport Place Associates
(hereinafter referred to as "Landlord"), and HomeLife Realty Services, Inc.,
a Delaware corporation (hereinafter referred to as "Tenant", for the Premises
located at 4100 Newport Place, Suite 730, Newport Beach, California 92660.
The Lease is amended s follows:
1. The term of said Lease is extended for a period of five (5) years
commencing July 1, 1996 and terminating on June 30, 2001.
2. The monthly rental payable by Tenant to Landlord shall be per the
following schedule:
7/1/96 through 6/30/98 $3,945.00 per month
7/1/98 through 6/30/99 $4,142.25 per month
7/l/99 through 6/30/00 $4,349.36 per month
7/1/00 through 6/30/01$4,566.83 per month
3. Landlord to waive 1993, 1994, 1995 and January through June 1996
operating expenses in the total sum of $6,937.00 sum of $6,937.00.
4. Landlord to waive 1993, 1994, 1995 and January through June 1996
operating expenses in the total Landlord to paint interior corridor walls of
Tenant's suite per the proposal attached as Exhibit A.
5. Landlord hereby grants to Tenant the option to extend the term of
the Lease for one (1) five (5)year period (the "Extension Option") commencing
when the lease term expires upon each and all of the following terms and
conditions:
a) Tenant shall give to Landlord on a date which is prior to the
date that the option period would commence (if exercised) by at least
one hundred eighty (180) days and not more than two hundred seventy
(270) days, a written notice of the exercise of the option to extend
the Lease for said additional term, time being of the essence. Such
notice shall be given in accordance with the provisions of the Lease.
If said notification of the exercise of said option is not so given
and received, this option shall automatically expire.
b) The provisions of the Lease apply to this option.
c) All of the terms and conditions of the Lease except where
specifically modified by this
d) The Base Rent payable during the option term shall be the Market
Rate on the date the option term commences.
e) The term "Market Rate" shall mean the annual amount per rentable
square foot that a willing, comparable renewal tenant would pay and a
willing, comparable Landlord of a similar high-rise Class-A building
would accept at arm's length for similar space, giving appropriate
consideration to the following matters: (i) annual rental rates per
rentable square foot; (ii) the type of escalation clauses (including,
but without limitation, operating expense, real estate taxes, and CPI)
and the extent of liability under the escalation clauses (LE., whether
determined on a "net lease" basis or by increases over a particular
base year or base dollar amount); (iii) rent abatement provisions
reflecting free rent and/or no rent during the lease term; (iv) length
of lease term; (v) size and location of premises being leased; and
(vi) other generally applicable terms and conditions of tenancy for
similar space; provided, however, Tenant shall not be entitled to any
tenant improvement or refurbishment allowance. The Market Rate may
also designate periodic rental increases, a new Base Year and similar
economic adjustments. The Market Rate shall be the Market Rate in
effect as of the beginning
of the option period, even though the determination may be made in
advance of that date, and the parties may use recent trends in
rental rates in determining the proper Market Rate as of the
beginning of the option period.
f) If Tenant exercises the Extension Option, Landlord shall
determine the Market Rate by using its good faith judgment. Landlord
shall provide Tenant with written notice of such amount within fifteen
(15) days after Tenant exercises its Extension Option. TENANT shall
have fifteen (15) days ("Tenant's Review Period") after receipt of
Landlord's notice of the new rental within which to accept such
rental. In the event Tenant fails to accept in writing such rental
proposal by Landlord, then such proposal shall be deemed rejected, and
Landlord and Tenant shall attempt to agree upon such Market Rate,
using their best good faith efforts. If Landlord and Tenant fail to
reach agreement within fifteen (15) days following Tenant's Review
Period ("Outside Agreement Date"), then each party shall place in a
separate sealed envelope their final proposal as to the Market Rate,
and such determination shall be submitted to arbitration in accordance
with subsections (i) through (v) below. In the event that Landlord
fails to timely generate the initial notice of Landlord's opinion of
the Market Rate, then Tenant may commence such negotiations by
providing the initial notice, in which event Landlord shall have
fifteen (15) days ("Landlord's Review Period") after receipt of
Tenant's notice of the new rental within which to accept such rental.
In the event Landlord fails to accept in writing such rental proposed
by Tenant, then such proposal shall be deemed rejected, and Landlord
and Tenant shall attempt in good faith to agree upon such Market Rate,
using their best good faith efforts. If Landlord and Tenant fail to
reach agreement within fifteen (15) days following Landlord's Review
Period (which shall be, in such event, the "Outside Agreement Date" in
lieu of the above definition of such date), then each party shall
place in a separate sealed envelope their final proposal as to Market
Rate, and such determination shall be submitted to arbitration in
accordance with subsections (i) through (v) below.
ARBITRATION OF DISPUTES
(i) LANDLORD AND TENANT SHALL MEET WITH EACH OTHER WITHIN FIVE
(5) BUSINESS DAYS AFTER THE OUTSIDE AGREEMENT DATE AND EXCHANGE THEIR SEALED
ENVELOPES AND THEN OPEN SUCH ENVELOPES IN EACH OTHER'S PRESENCE. IF LANDLORD
AND TENANT DO NOT MUTUALLY AGREE UPON THE MARKET RATE WITHIN ONE (1) BUSINESS
DAY OF THE EXCHANGE AND OPENING OF ENVELOPES, THEN, WITHIN TEN (10) BUSINESS
DAYS OF THE EXCHANGE AND OPENING OF ENVELOPES, LANDLORD AND TENANT SHALL
AGREE UPON AND JOINTLY APPOINT A SINGLE ARBITRATOR WHO SHALL BY PROFESSION BE
A REAL ESTATE BROKER OR AGENT WHO SHALL HAVE BEEN ACTIVE OVER THE FIVE (5)
YEAR PERIOD ENDING ON THE DATE OF SUCH APPOINTMENT IN THE LEASING OF
COMMERCIAL OFFICE BUILDINGS SIMILAR TO THE PREMISES IN THE GEOGRAPHICAL AREA
OF THE PREMISES. NEITHER LANDLORD NOR TENANT SHALL CONSULT WITH SUCH BROKER
OR AGENT AS TO HIS OR HER OPINION AS TO THE MARKET RATE PRIOR TO THE
APPOINTMENT. THE DETERMINATION OF THE ARBITRATOR SHALL BE LIMITED SOLELY TO
THE ISSUE OF WHETHER LANDLORD'S OR TENANT'S SUBMITTED MARKET RATE FOR THE
PREMISES IS THE CLOSEST TO THE ACTUAL MARKET RATE FOR THE PREMISES AS
DETERMINED BY THE ARBITRATOR, TAKING INTO ACCOUNT THE REQUIREMENTS FOR
DETERMINING MARKET RATE SET FORTH HEREIN. SUCH ARBITRATOR MAY HOLD SUCH
HEARINGS AND REQUIRE SUCH BRIEFS AS THE ARBITRATOR, IN HIS OR HER SOLE
DISCRETION, DETERMINES IS NECESSARY. IN ADDITION, LANDLORD OR TENANT MAY
SUBMIT TO THE ARBITRATOR WITH A COPY TO THE OTHER PARTY WITHIN FIVE (5)
BUSINESS DAYS AFTER THE APPOINTMENT OF THE ARBITRATOR ANY MARKET DATA AND
ADDITIONAL INFORMATION SUCH PARTY DEEMS RELEVANT TO THE DETERMINATION OF THE
MARKET RATE ("RR DATA"), AND THE OTHER PARTY MAY SUBMIT A REPLY IN WRITING
WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT OF SUCH RR DATA.
(ii) THE ARBITRATOR SHALL, WITHIN THIRTY (30) DAYS OF HIS OR
HER APPOINTMENT, REACH A DECISION AS TO WHETHER THE PARTIES SHALL USE
LANDLORD'S OR
TENANT'S SUBMITTED MARKET RATE AND SHALL NOTIFY LANDLORD AND TENANT OF SUCH
DETERMINATION.
(iii) THE DECISION OF THE ARBITRATOR SHALL BE FINAL AND
BINDING UPON LANDLORD AND TENANT.
(iv) IF LANDLORD AND TENANT FAIL TO AGREE UPON AND APPOINT AN
ARBITRATOR, THEN THE APPOINTMENT OF THE ARBITRATOR SHALL BE MADE BY THE
PRESIDING JUDGE OF THE ORANGE COUNTY SUPERIOR COURT, OR, IF HE OR SHE REFUSES
TO ACT, BY ANY JUDGE HAVING JURISDICTION OVER THE PARTIES.
(v) THE COST OF THE ARBITRATION SHALL BE PAID BY LANDLORD AND
TENANT EQUALLY.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE
ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA
LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE
LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE
GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS
ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU
REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE
COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MASTERS INCLUDED IN THE ARBITRATION OF DISPUTES" PROVISION
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE
GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL. BY INITIALIZING IN THE SPACE BELOW YOU ARE GIVING UP ANY
RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED
IN THE "ARBITRATION OF DISPUTES" PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT
TO THIS ARBITRATION PROVISION IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
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(Landlord, initials) (Tenant initials)
6. Except as explicitly set forth herein, nothing contained herein
shall be deemed or construed to modify, waive, impair or affect any of the
covenants, agreements, terms, provisions or conditions contained in the
Lease. In addition, the acceptance of rents by Landlord from Tenant or anyone
else liable under the Lease shall not be deemed saiver by Landlord of any
provisions of the Lease. The Amendment to Lease is the complete understanding
between the parties and supersedes all other prior agreements and
representations concerning its subject matter.
7. Except as explicitly set forth herein, nothing contained herein
shall be deemed or construed to modify, waive, impair or affect any of the
covenants, agreements, terms, provisions or conditions contained in the
Lease. This Amendment to Lease is the complete understanding between the
parties and supersedes all other prior agreements and representations
concerning its subject matter.
IN WITNESS WHEREOF, the parties hereto have respectively executed this Addendum.
LANDLORD:
ADVENT REALTY LIMITED PARTNERSHIP 11, a Delaware limited partnership
By: ADVENT REALTY GP 11 LIMITED PARTNERSHIP, a
Delaware limited partnership
Its: General Partner
By: ADVENT REALTY, INC., a Delaware corporation
Its: General Partner
By:
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Michael A. Ruane, Chairman*
OR
By: /s/ Arthur I. Segel
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Arthur I. Segel, President*
Tenant:
HOMELIFE REALTY SERVICES, INC., a Delaware corporation
By: /s/ Andrew Cimerman
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Name: Andrew Cimernan
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Andrew Cimerman
(please print)
Its:
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*It is the intention of the parties hereto that this Agreement will be executed
on behalf of Landlord by either Michael A. Ruane or Arthur 1. Segel and that the
signatures of both Michael A. Ruane and Arthur I. Segel will not be required.