Exhibit 10.11
[Net Lease]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 16th day of April, 1996, between
Security Capital Industrial Trust ("Landlord"), and the Tenant named below.
Tenant: Insync Systems, Inc.
Tenant's representative, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
address, and phone no.: ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Premises: That portion of the Building, containing approximately 70,400
rentable square feet, as determined by Landlord, as shown on
Exhibit A.
Project: Corridor ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇ Corp. Center, 6 ▇▇▇▇▇▇ Way (1H ▇▇ ▇▇▇ ▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇.)
Tenant's Proportionate Share
of Project: 100%
Tenant's Proportionate Share
of Building: 100%
Lease Term: Beginning on the Commencement Date and ending on the last day
of the 60th full calendar month thereafter.
Commencement Date: Earlier of (i) Substantial Completion of Building Shell and
Tenant Improvements; (ii) granting of beneficial use as
evidenced by the use of all or a portion of the Premises for
Tenant's operations and the commencement of production for end
user sales; or (iii) October 1, 1996, subject to Landlord's
delay as defined in Construction Addendum.
Initial Monthly Base Rent Base Rent $28,160.00
and TI Amortization: TI Amortization 28,923.00
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Total Rent $57,083.00
Initial Estimated Monthly 1. Utilities: $ N/A
Operating Expense Payments:
(estimates only and subject 2. Common Area Charges: $ 1,056.00
to adjustment to actual costs
and expenses according to the 3. Taxes: $ 4,693.33
provisions of this Lease)
4. Insurance: $ 293.33
5. Others: $ 1,026.00
Initial Estimated Monthly Operating
Expense Payments: $7,068.66
Initial Monthly Base Rent and
Operating Expense Payments: $64,151.66
Security Deposit: $65,000.00
Additional Security Deposit: $635,000 (See Addendum II)
Broker: ▇▇▇ ▇. ▇▇▇▇, SCI Client Services Incorporated
Addenda: Exhibit A (Site Plan); Rules and Regulations; Addendum I
(Construction Addendum); Addendum II (Additional Security
Deposit); Addendum IV (Three Renewal Options); Addendum V
(Right of First Offer [Lease and Sale]); Addendum VI
(Cancellation Option), Addendum VII (Hazardous Materials);
Exhibit I (Standard Specifications and Tenant Improvements);
Exhibit II (Tenant Improvement Scope of Work)
1. GRANTING CLAUSE. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease.
2. ACCEPTANCE OF PREMISES. Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant's intended purposes. Except as provided in Paragraph 10,
in no event shall Landlord have any obligation for any defects in the Premises
or any limitation on its use. The taking of possession of the Premises shall be
conclusive evidence that Tenant accepts the Premises and that the Premises were
in good condition at the time possession was taken except for items that are
Landlord's responsibility under Paragraph 10 and any punchlist items agreed to
in writing by Landlord and Tenant. Notwithstanding any provision to the contrary
in the Lease, at the Commencement Date, Landlord's Work shall conform to all
requirements of covenants, conditions, restrictions and encumbrances of record,
unless modified by binding variance from the governing entity ("CC&R's"), and
all Legal Requirements applicable thereto. Tenant shall not be required to
construct or pay the cost of complying with any CC&R's, Legal Requirements
requiring construction of improvements in the Premises which are properly
capitalized under general accounting principles, unless such compliance is
necessitated because of Tenant's particular use of the Premises or is mandated
by Legal Requirements enacted, or applicable to the Premises, subsequent to the
Commencement Date. The parties' obligations and liability to each other with
respect to Hazardous Materials shall not be governed by this Paragraph 2, but
shall be governed by Paragraph 30 of this Lease. Landlord shall remain liable
for correcting defects in Landlord's Work during the first 6 months of the Term
and for the compliance with Legal Requirements of Landlord's Work as of the
Commencement Date.
3. USE. The Premises shall be used only for the purpose of receiving,
storing, shipping and selling (but limited to wholesale sales) products,
materials and merchandise made and/or distributed by Tenant and for such other
lawful purposes as may be incidental thereto; provided, however, with Landlord's
prior written consent, Tenant may also use the Premises for light manufacturing
including an electroplating process provided such process emits no unreasonably
noxious fumes or odors. Tenant shall
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not conduct or give notice of any auction, liquidation, or going out of business
sale on the Premises. Tenant will use the Premises in a careful, safe and proper
manner and will not commit waste thereon. Tenant shall not permit any
objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to
emanate from the Premises, or take any other action that would constitute a
nuisance or would disturb, unreasonably interfere with, or endanger Landlord or
any tenants of the Project. Outside storage, including without limitation,
storage of trucks and other vehicles, is prohibited without Landlord's prior
written consent. Tenant, at its sole expense, shall use and occupy the Premises
in compliance with all laws, including, without limitation, the Americans With
Disabilities Act, orders, judgments, ordinances, regulations, codes, directives,
permits, licenses, covenants and restrictions now or hereafter applicable to the
Premises (collectively, "Legal Requirements"). The Premises shall not be used as
a place of public accommodation under the Americans With Disabilities Act or
similar state statutes or local ordinances or any regulations promulgated
thereunder, all as may be amended from time to time. Tenant shall, at its
expense, make any alterations or modifications, within or without the Premises,
that are required by Legal Requirements related to Tenant's use or occupation of
the Premises. Tenant will not use or permit the Premises to be used for any
purpose or in any manner that would void Tenant's or Landlord's insurance,
increase the insurance risk, or cause the disallowance of any sprinkler credits.
If any increase in the cost of any insurance on the Premises or the Project is
caused by Tenant's use or occupation of the Premises, or because Tenant vacates
the Premises, then Tenant shall pay the amount of such increase to Landlord.
4. TOTAL RENT. Tenant shall pay Base Rent plus TI Amortization, [defined
in Addendum 1, par. 7] (collectively the "Total Rent") in the amount set forth
above. The first month's Total Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses (as hereafter defined) shall be due
and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Total
Rent on or before the first day of each calendar month succeeding the
Commencement Date. Payments of Total Rent for any fractional calendar month
shall be prorated. All payments required to be made by Tenant to Landlord
hereunder shall be payable at such address as Landlord may specify from time to
time by written notice delivered in accordance herewith. The obligation of
Tenant to pay Total Rent and other sums to Landlord and the obligations of
Landlord under this Lease are independent obligations. Tenant shall have no
right at any time to ▇▇▇▇▇, reduce, or set-off any rent due hereunder except as
may be expressly provided in this Lease. Tenant waives and releases all
statutory liens and offset rights as to rent. If Tenant is delinquent in any
monthly installment of Total Rent or of estimated Operating Expenses beyond 5
days after the due date thereof, and after notice as provided below, Tenant
shall pay to Landlord on demand a late charge equal to 5 percent of such
delinquent sum. Tenant shall not be obligated to pay the late charge until
Landlord has given Tenant 5 days written notice of the delinquent payment (which
may be given at any time during the delinquency); provided, however, that such
notice shall not be required more than once in any 12-month period or four times
over the term of the Lease. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as a penalty or as limiting Landlord's remedies in any
manner.
5. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of Default
(hereinafter defined), Landlord may use all or part of the Security Deposit to
pay delinquent payments due under this Lease, and the cost of any damage,
injury, expense or liability caused by such Event of Default, without prejudice
to any other remedy provided herein or provided by law. Tenant shall pay
Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor,, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but any balance which has not been
used in accordance with this Paragraph 5 shall be paid to Tenant provided
Tenant's obligations under this Lease have been completely fulfilled within
thirty (30) days after expiration or
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sooner termination of this Lease. Landlord shall be released from any obligation
with respect to the Security Deposit upon transfer of this Lease and the
Premises to a person or entity assuming Landlord's obligations under this
Paragraph 5. So long as Tenant is not in default hereunder, upon the release of
the Security Deposit to Tenant, Landlord shall pay Tenant 3% on the cash portion
of the Security Deposit.
6. OPERATING EXPENSE PAYMENTS. During each month of the Lease Term, on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal
to 1/12 of the annual cost, as estimated by Landlord from time to time, of
Tenant's Proportionate Share (hereinafter defined) of Operating Expenses for the
Project. Payments thereof for any fractional calendar month shall be prorated.
The term "Operating Expenses" means all costs and expenses incurred by Landlord
with respect to the ownership, maintenance, and operation of the Project
including, but not limited to costs of: Taxes (hereinafter defined) and fees
payable to tax consultants and attorneys for consultation and contesting taxes;
insurance; utilities; maintenance, repair and replacement of all portions of the
Project, including without limitation, paving and parking areas, roads, roofs,
alleys, and driveways, mowing, landscaping, exterior painting, utility lines,
heating, ventilation and air conditioning systems, lighting, electrical systems
and other mechanical and building systems; amounts paid to contractors and
subcontractors for work or services performed in connection with any of the
foregoing; charges or assessments of any association to which the Project is
subject; property management fees payable to a property manager (not to exceed
3% of Base Rent plus Operating Expenses), including any affiliate of Landlord,
or if there is no property manager, an administration fee of 15 percent of
Operating Expenses payable to Landlord; security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project or the Building as a bulk
warehouse facility in the market area, provided that the cost of additions or
alterations that are required to be capitalized for federal income tax purposes
shall be amortized on a straight line basis over a period equal to the useful
life thereof for federal income tax purposes. Operating Expenses do not include
costs, expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease,
debt service under mortgages or ground rent under ground leases, costs of
restoration to the extent of net insurance proceeds received by Landlord with
respect thereto, leasing commissions, the costs of renovating space for tenants,
costs occasioned by fire, the exercise of the power of eminent domain, costs or
expenses incurred with respect to Hazardous Materials except to the extent
caused by the storage use transportation or disposal of Hazardous Materials by
Tenant or Tenant's agents, employees, contractors or invitees, or to comply with
any Legal Requirements applicable to the Landlord's Work as of the Commencement
Date.
Notwithstanding the priding provisions of this ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ shall
not be obligated to pay for Controllable Operating Expenses in any year to the
extent they have increased by more than seven percent (7%) per annum on a
cumulative basis from the first calendar year during the Lease Term. For
purposes hereof, "Controllable Operating Expenses" shall mean all costs and
expenses incurred by Landlord in the ownership, maintenance and operation of the
Project, as described and provided for in this Paragraph 6, except Taxes,
insurance, premiums and utility costs. Controllable Operating Expenses shall be
determined on an aggregate basis and not on an individual basis.
If Tenant's total payments of Operating Expenses for any year are less
than Tenant's Proportionate Share of actual operating Expenses for such year,
then Tenant shall pay the difference to Landlord within 30 days after demand,
and if more, then Landlord shall retain such excess and credit it against
Tenant's next payments, except for any credit which Tenant will not have an
opportunity to use, prior to expiration or sooner termination of the Lease, in
which case Landlord shall pay the amount of such excess to Tenant unless an
event of Tenant Default shall exist. For purposes of calculating Tenant's
Proportionate Share of Operating Expenses, a year shall mean a calendar year
except the first year, which shall begin on the Commencement Date, and the last
year, which shall end on the expiration of this Lease.
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With respect to Operating Expenses which Landlord allocates to the entire
Project, Tenant's "Proportionate Share" shall be the percentage set forth on the
first page of this Lease as Tenant's Proportionate Share of the Project as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Project; and, with respect to Operating Expenses which
Landlord allocates only to the Building, Tenant's "Proportionate Share" shall be
the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Building as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Building.
Landlord may equitably increase Tenant's Proportionate Share for any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement, or
service that benefits only the Premises or only a portion of the Project or
Building that includes the Premises or that varies with occupancy or use. The
estimated Operating Expenses for the Premises set forth on the first page of
this Lease are only estimates, and Landlord makes no guaranty or warranty that
such estimates will be accurate.
7. UTILITIES. Tenant shall pay for all water, gas, electricity,
heat, light, power, telephone, sewer, sprinkler services, refuse and trash
collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. Landlord shall have the right to cause at Tenant's
expense any of said services to be separately metered or charged directly to
Tenant by the provider.(1) Tenant shall pay its share of all charges for jointly
metered utilities based upon consumption, as reasonably determined by Landlord.
Landlord shall not be liable for any interruption or failure of utilities or any
other service to the Premises and no such interruption or failure shall result
in the abatement of rent hereunder.
8. TAXES. Landlord shall pay all taxes, assessments and
governmental charges (collectively referred to as "Taxes") that accrue against
the Project during the Lease Term, which shall be included as part of the
Operating Expenses charged to Tenant. Landlord may contest by appropriate legal
proceedings the amount, validity, or application of any Taxes or liens thereof.
All capital levies or other taxes assessed or imposed on Landlord upon the rents
payable to Landlord under this Lease and any franchise tax, any excise,
transaction, sales or privilege tax, assessment, levy or charge measured by or
based, in whole or in part, upon such rents from the Premises and/or the Project
or any portion thereof shall be paid by Tenant to Landlord monthly in estimated
installments or upon demand, at the option of Landlord, as additional rent;
provided, however, in no event shall Tenant be liable for any net income or
franchise taxes imposed on Landlord unless such net income taxes are in
substitution for any Taxes payable hereunder. If any such tax or excise is
levied or assessed directly against Tenant, then Tenant shall be responsible for
and shall pay the same at such times and in such manner as the taxing authority
shall require. Tenant shall be liable for all taxes levied or assessed against
any personal property or fixtures placed in the Premises, whether levied or
assessed against Landlord or Tenant. Tenant shall have no liability for
inheritance taxes of Landlord or its successors or any taxes levied with respect
to Hazardous Materials except to the extent the presence of such Hazardous
Materials was caused by Tenant, or Tenant's agents, employees, contractors or
invitees.
9. INSURANCE. Landlord shall maintain all risk property insurance
covering the full replacement cost of the Building. Landlord may, but is not
obligated to, maintain such other insurance and additional coverages as it may
deem necessary, including, but not limited to, commercial liability insurance
and rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of
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(1) Tenant shall be separately metered for water and sewer usage, the cost of
which meters shall be charged to the Tenant Improvements allowance.
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such insurance allocable to the Project or Building will be determined by
Landlord based upon the insurer's cost calculations). Tenant shall also
reimburse Landlord for any increased premiums or additional insurance that
Landlord reasonably deems necessary as a result of Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance (or a state law permitted alternative) with no
less than the minimum limits required by law; employer's liability insurance
with such limits as required by law; and commercial liability insurance, with a
minimum limit of $1,000,000 per occurrence and a minimum umbrella limit of
$1,000,000, for a total minimum combined general liability and umbrella limit of
$2,000,000 (together with such additional umbrella coverage as Landlord may
reasonably require) for property damage, personal injuries, or deaths of persons
occurring in or about the Premises. Landlord may from time to time require
reasonable increases in any such limits. The commercial general liability
policies shall name Landlord as an additional insured, insure on an occurrence
and not a claims-made basis, be issued by insurance companies which are
reasonably acceptable to Landlord, not be cancelable unless 30 days prior
written notice shall have been given to Landlord, contain a hostile fire
endorsement and a contractual liability endorsement (if such coverage is
available in a commercial general liability policy) and provide primary coverage
to Landlord (any policy issued to Landlord providing duplicate or similar
coverage shall be deemed excess over Tenant's policies). Such policies or
certificates thereof shall be delivered to Landlord by Tenant upon commencement
of the Lease Term and upon each renewal of said insurance.
The all risk property insurance obtained by Landlord and Tenant shall
include a waiver of subrogation by the insurers and all rights based upon an
assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.
10. LANDLORD'S REPAIRS. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded. The term "walls" as used in this
Paragraph 10 shall not include windows, glass or plate glass, doors or overhead
doors, special store fronts, dock bumpers, dock plates or levelers, or office
entries. Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Paragraph 10, after which Landlord shall
have a reasonable opportunity to repair, which shall not exceed 60 days subject
to causes of Force Majeure.
11. TENANT'S REPAIRS. Landlord, at Tenant's expense as provided in
Paragraph 6, shall maintain in good repair and condition the parking areas and
other common areas of the Building, including, but not limited to driveways,
alleys, landscape and grounds surrounding the Premises. Subject to Landlord's
obligation in Paragraphs 9, 10 and 15, Tenant, at its expense, maintain in good
repair and condition all portions of the Premises. If Tenant fails to perform
any repair for which it is responsible,
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Landlord may perform the repair if Tenant has not completed the repair within 10
days of Landlord's written notice, and be reimbursed by Tenant within 10 days
after demand therefor. Subject to Paragraphs 9 and 15, Tenant shall bear the
full cost of any repair to any part of the Building or Project that results from
damage caused by Tenant, its agents, contractors, or invitees and any repair
that benefits only the Premises. Heating, ventilation and air conditioning
systems and other mechanical and building systems serving the Premises shall be
maintained at Tenant's expense pursuant to maintenance service contracts entered
into by Tenant or, at Landlord's election, by Landlord. The scope of services
and contractors under such maintenance contracts shall be reasonably approved by
Landlord. At Landlord's request, Tenant shall enter into a joint maintenance
agreement with any railroad that services the Premises. If Tenant fails to
perform any repair or replacement for which it is responsible, Landlord, after
giving Tenant notice and a reasonable opportunity to perform, may perform such
work and be reimbursed by Tenant within 10 days after demand therefor. Subject
to Paragraphs 2, 6, 9, 10 and 15, Tenant shall bear the full cost of any repair
or replacement to any part of the Building or Project that results from damage
caused by Tenant, its agents, contractors, or invitees and any repair that
benefits only the Premises.
12. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent. Any alterations, additions or improvements made by or on behalf of
Tenant to the Premises, which are nonstructural, do not affect the roof membrane
and cost Five Thousand Dollars ($5,000) or less per project, but not to exceed
more than $50,000 over the term of the Lease ("Non-Structural Alterations")
shall be excluded, from the definition of "Tenant-Made Alterations." Tenant
shall cause, at its expense, all Tenant-Made Alterations and Non-Structural
Alterations to comply with insurance requirements and with Legal Requirements
and shall construct at its expense any alteration or modification required by
Legal Requirements as a result of any Tenant-Made Alterations, except for the
expense of any alteration or modification required by Legal Requirements
applicable or in effect as of the Commencement Date because Landlord's Work on
the Property failed to comply with such Legal Requirements as of the
Commencement Date. All Tenant-Made Alterations shall be constructed in a good
and workmanlike manner by contractors reasonably acceptable to Landlord and only
good grades of materials shall be used. All plans and specifications for any
Tenant-Made Alterations shall be submitted to Landlord for its approval.
Landlord may monitor construction of the Tenant-Made Alterations. Tenant shall
reimburse Landlord for its reasonable costs in reviewing plans and
specifications and in monitoring construction. Tenant shall provide Landlord
with the identities and mailing addresses of all persons performing work or
supplying materials, prior to beginning such construction, and Landlord may post
on and about the Premises notices of non-responsibility pursuant to applicable
law. Landlord's right to review plans and specifications and monitor
construction shall be solely for its own benefit, and Landlord shall have no
duty to see that such plans and specifications or construction comply with
applicable laws, codes, rules, or regulations. At Landlord's request, Tenant
shall obtain payment and performance bonds or to the extent permitted by law, to
obtain the waiver of lien in advance for any Tenant-Made Alterations in excess
of $5,000 which bonds or evidence of waiver shall be delivered to Landlord prior
to commencement of work on the Tenant-Made Alterations and shall be in form and
substance satisfactory to Landlord. Upon completion of any Tenant-Made
Alterations, Tenant shall deliver to Landlord sworn statements setting forth the
names of all contractors and subcontractors who did work on the Tenant-Made
Alterations and final lien waivers from all such contractors and subcontractors.
Tenant, at its own cost and expense and without Landlord's prior
approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") which Tenant uses in the ordinary course of its
business provided that such items do not alter the basic character of the
Premises, do not overload or damage the Premises, and may be removed without
injury to the Premises, and the construction, erection, and installation thereof
complies with all Legal Requirements and with Landlord's
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requirements. Subject to Paragraph 21, upon the expiration of the Lease Term,
Tenant shall remove its Trade Fixtures and shall repair any damage caused by
such removal, by the last day of the Lease Term.
13. SIGNS. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed from
the exterior of the Premises, without Landlord's prior written consent. Upon
surrender or vacation of the Premises, Tenant shall have removed all signs and
repair, paint, and/or replace the building facia surface to which its signs are
attached. Tenant shall obtain all applicable governmental permits and approvals
for sign and exterior treatments. All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord's
approval and conform in all respects to Landlord's requirements.
14. PARKING. Tenant shall be entitled to park in common with other
tenants of the Project in those areas designated for nonreserved parking and in
accordance with Exhibit A. Landlord may allocate parking spaces among Tenant and
other tenants in the Project if Landlord determines that such parking facilities
are becoming crowded. Landlord shall not be responsible for enforcing Tenant's
parking rights against any third parties. If Landlord allocates parking spaces
among Tenant and other tenants, Landlord will allocate to Tenant parking spaces
reasonably conveniently located to the Premises.
15. RESTORATION. If at any time during the Lease Term the Premises
are damaged by a fire or other casualty, Landlord shall notify Tenant within 60
days after such damage as to the amount of time Landlord reasonably estimates it
will take to restore the Premises. If the restoration time is estimated to
exceed 6 months, either Landlord or Tenant may elect to terminate this Lease
upon notice to the other party given no later than 30 days after Landlord's
notice. If neither party elects to terminate this Lease or if Landlord estimates
that restoration will ▇▇▇▇ ▇ months or less, then, subject to receipt of
sufficient insurance proceeds (when added to the amount of the deductible under
Landlord's insurance policy), Landlord shall promptly restore the Premises
excluding the improvements installed by Tenant or by Landlord and paid by
Tenant, subject to delays arising from the collection of insurance proceeds or
from Force Majeure events. Tenant at Tenant's expense shall promptly perform,
subject to delays arising from the collection of insurance proceeds, or from
Force Majeure events, all repairs or restoration not required to be done by
Landlord and shall promptly re-enter the Premises and commence doing business in
accordance with this Lease. Notwithstanding the foregoing, either ▇▇▇▇▇ may
terminate this Lease if the Premises are damaged during the last year of the
Lease Term and Landlord reasonably estimates that it will take more than one
month to repair such damage. Tenant shall pay to Landlord with respect to any
damage to the Premises the amount of the commercially reasonably deductible
under Landlord's insurance policy (not to exceed $10,000) within 10 days after
presentment of Landlord's invoice. If the damage involves the premises of other
tenants, Tenant shall pay the portion of the deductible that the cost of the
restoration of the Premises bears to the total cost of restoration, as
determined by Landlord. Base Rent and Operating Expenses shall be abated for the
period of repair and restoration in the proportion which the area of the
Premises, if any, which is not usable by Tenant bears to the total area of the
Premises. Such abatement shall be the sole remedy of Tenant, and except as
provided herein, Tenant waives any right to terminate the Lease by reason of
damage or casualty loss. Further, the Term shall be extended for the number of
months or partial months for which Rent is abated.
16. CONDEMNATION. If any part of the Premises or the Project should
be taken for any public or quasi-public use under governmental law, ordinance,
or regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord and with Tenant's commercially reasonable
consent this Lease shall terminate and Base Rent shall be apportioned as of said
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date. If part of the Premises shall be Taken, and this Lease is not terminated
as provided above, the Base Rent payable hereunder during the unexpired Lease
Term shall be reduced to such extent as may be fair and reasonable under the
circumstances. In the event of any such Taking, Landlord shall be entitled to
receive the entire price or award from any such Taking without any payment to
Tenant, and Tenant hereby assigns to Landlord Tenant's interest, if any, in such
award. Tenant shall have the right, to the extent that same shall not diminish
Landlord's award, to make a separate claim against the condemning authority (but
not Landlord) for such compensation as may be separately awarded or recoverable
by Tenant for moving expenses and damage to Tenant's Trade Fixtures, if a
separate award for such items is made to Tenant.
17. ASSIGNMENT AND SUBLETTING. Without Landlord's prior written
consent, Tenant shall not assign this Lease or sublease the Premises or any part
thereof or mortgage, pledge, or hypothecate its leasehold interest or grant any
concession or license within the Premises and any attempt to do any of the
foregoing shall be void and of no effect. For purposes of this paragraph, a
transfer of the ownership interests controlling Tenant shall be deemed an
assignment of this Lease unless such ownership interests are publicly traded.
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to any entity controlling Tenant, controlled by Tenant or under common
control with Tenant (a "Tenant Affiliate"), without the prior written consent of
Landlord. Tenant shall reimburse Landlord for all of Landlord's reasonable
out-of-pocket expenses in connection with any assignment or sublease. Upon
Landlord's receipt of Tenant's written notice of a desire to assign or sublet
substantially all of the Premises for substantially the balance of the Term, or
any part thereof (other than to a Tenant Affiliate), Landlord may, by giving
written notice to Tenant within 30 days after receipt of Tenant's notice,
terminate this Lease with respect to the space described in Tenant's notice, as
of the date specified in Tenant's notice for the commencement of the proposed
assignment or sublease. Notwithstanding anything to the contrary in the lease,
but provided Tenant is not in default hereunder, the transactions described in
this and the following sentence are not entered into for the primary purpose of
avoiding Tenant's liability hereunder, and the Permitted Assignee has a net
worth equal to or greater than Tenant as of the Commencement Date, Tenant may,
without Landlord's prior written consent and without any participation by
Landlord in assignment and subletting proceeds, sublet the Premises or assign
the Lease to: (i) a subsidiary, affiliate, division or corporation controlled or
under common control with Tenant; (ii) a successor corporation related to Tenant
by merger, consolidation, nonbankruptcy reorganization, or government action;
(iii) purchaser of substantially all of Tenant's assets located in the Premises
(collectively, "Permitted Assignees"). For the purpose of this Lease, sale or
transfer of Tenant's capital stock, including without limitation, a transfer in
connection with the merger, consolidation or nonbankruptcy reorganization of
Tenant and any sale through any public exchange, shall not be deemed an
assignment, subletting, or any other transfer of the Lease or the Premises.
Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of the rent and for compliance with
all of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has been obtained for any such assignments or sublettings).
In the event that the rent due and payable by a sublessee or assignee (or a
combination of the rental paid to Tenant under such sublease or assignment plus
any bonus or other consideration therefor or incident thereto) exceeds the
rental payable under this Lease (excluding the TI Amortization plus any
additional funds Tenant contributes to relet the space), then Tenant shall be
bound and obligated to pay Landlord as additional rent hereunder fifty percent
(50%) of all such excess rental and other excess consideration within 10 days
following receipt thereof by Tenant.
If this Lease be assigned or if the Premises be subleased (whether in
whole or in part) or in the event of the mortgage, pledge, or hypothecation of
Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other than
9
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from
the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant and,
except to the extent set forth in the preceding paragraph, apply the amount
collected to the next rent payable hereunder; and all such rentals collected by
Tenant shall be held in trust for Landlord and immediately forwarded to
Landlord. No such transaction or collection of rent or application thereof by
Landlord, however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties, or
obligations hereunder.
17.1 (a) Landlord shall not unreasonably withhold its consent to
Tenant's request for permission to assign the Lease or sublease all or part of
the Premises. It shall be reasonable for the Landlord to withhold its consent to
any assignment or sublease in any of the following instances:
(i) The assignee or sublessee does not have a net worth
calculated according to generally accepted accounting principles that in
the reasonable opinion of Landlord reflects an inability to service the
Lease or Sublease obligations;
(ii) The intended use of the Premises by the assignee or
sublessee is not reasonably satisfactory to Landlord;
(iii) The intended use of the Premises by the assignee or
sublessee would materially increase the pedestrian or vehicular traffic
to the Premises or the Project;
(iv) Occupancy of the Premises by the assignee or sublessee
would, in Landlord's opinion, violate any agreement binding upon
Landlord or the Project with regard to the identity of tenants, usage in
the Project, or similar matters;
(v) The identity or business reputation of the assignee or
sublessee will, in the good faith judgment of Landlord, tend to damage
the goodwill or reputation of the Project;
(vi) The assignment or sublet is to another tenant in the
Project and is at rates which are below those charged by Landlord for
comparable space in the Project;
(vii) In the case of a sublease, the subtenant has not
acknowledged that the Lease controls over any inconsistent provision in
the sublease; or
The foregoing criteria shall not exclude any other reasonable basis for Landlord
to refuse its consent to such assignment or sublease.
(b) Any approved assignment or sublease shall be expressly subject
to the terms and conditions of this Lease.
(c) Tenant shall provide to Landlord all information concerning the
assignee or sublessee as Landlord may request.
(d) Landlord may revoke its consent immediately and without notice
if, as of the effective date of the assignment or sublease, there has occurred
and is continuing any default under the Lease.
(e) Landlord's agreement to not unreasonably withhold its consent
shall only apply to the first assignment or sublease under the Lease.
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18. INDEMNIFICATION. Except for the negligence or misconduct of
Landlord, its agents, employees or contractors, and to the extent permitted by
law, Tenant agrees to indemnify, defend and hold harmless Landlord, and
Landlord's agents, employees and contractors, from and against any and all
losses, liabilities, damages, costs and expenses (including attorneys' fees)
resulting from claims by third parties for injuries to any person and damage to
or theft or misappropriation or loss of property occurring in or about the
Project and arising from the use arid occupancy of the Premises or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Premises or due to any other act or omission of Tenant, its subtenants,
assignees, invitees, employees, contractors and agents. The furnishing of
insurance required hereunder shall not be deemed to limit Tenant's obligations
under this Paragraph 18. The foregoing indemnification shall not apply to
Hazardous Materials, and the liability of the parties to each other with respect
to Hazardous Materials shall be governed solely by Paragraph 30 of this Lease.
19. INSPECTION AND ACCESS. Landlord and its agents, representatives,
and contractors may enter the Premises at any reasonable time, following
reasonable notice to Tenant, to inspect the Premises and to make such repairs as
may be required or permitted pursuant to this Lease and for any other business
purpose. Landlord and Landlord's representatives may enter the Premises during
business hours for the purpose of showing the Premises to prospective purchasers
and, during the last year of the Lease Term, to prospective tenants. Landlord
may elect a suitable sign on the Premises stating the Premises are available to
let or that the Project is available for sale. Landlord may grant easements,
make public dedications, designate common areas and create restrictions on or
about the Premises, provided that no such easement, dedication, designation or
restriction materially interferes with Tenant's use or occupancy of the
Premises. At Landlord's request, Tenant shall execute such instruments as may be
necessary for such easements, dedications or restrictions. Notwithstanding any
provision to the contrary in this Lease, Landlord may erect a sign on the
Premises stating that the Premises are available to let only during the last
year of the Lease Term.
20. QUIET ENJOYMENT. If Tenant shall not be in default hereunder,
Tenant shall, subject to the terms of this Lease, at all times during the Lease
Term, have peaceful and quiet enjoyment of the Premises against any person
claiming by, through or under Landlord.
21. SURRENDER. Upon termination of the Lease Term or earlier
termination of Tenant's right of possession, all Tenant Made Alterations and
Non-Structural Alterations and any improvements constructed by Landlord pursuant
to the Construction Addendum, if any, attached hereto ("Initial Improvements")
shall remain in the Premises as the property of Landlord. Tenant shall have the
right to remove its Trade Fixtures subject to the repair obligations set forth
herein. Alternatively, upon any such termination, but subject to other
provisions hereunder specifying a shorter notice period following an Event of
Default, Landlord may, by 90 days written notice to Tenant, require Tenant at
Tenant's expense to remove any or all Trade Fixtures and/or any or all
Tenant-Made Alterations and/or Non-Structural Alterations and/or the Initial
Improvements, and to repair any damage caused by such removal in the same
condition as received, broom clean, ordinary wear and tear and casualty loss and
condemnation covered by Paragraphs 15 and 16 excepted. Any Trade Fixtures,
Tenant-Made Alterations, Non Structural Alterations or Initial Improvements and
property not so removed by Tenant as permitted or required herein shall be
deemed abandoned and may be stored, removed, and disposed of by Landlord at
Tenant's expense, and Tenant waives all claims against Landlord for any damages
resulting from Landlord's retention and disposition of such property. All
obligations of Tenant hereunder not fully performed as of the termination of the
Lease Term shall survive the termination of the Lease Term, including without
limitation, indemnity obligations, payment obligations with respect to Operating
Expenses and obligations concerning the condition and repair of the Premises.
22. HOLDING OVER. If Tenant retains possession of the Premises after
the termination of the Lease Term with the written consent of Landlord, such
possession shall be on a month-to-month basis,
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terminable upon thirty (30) days' prior notice, or unless otherwise agreed in
writing, such possession shall be subject to immediate termination by Landlord
at any time, and all of the other terms and provisions of this Lease (excluding
any expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Base Rent for the holdover period, an amount
equal to one hundred fifty percent (150%) of the Base Rent in effect on the
termination date, computed on a monthly basis for each month or part thereof
during such holding over. All other payments shall continue under the terms of
this Lease. In addition, Tenant shall be liable for all damages incurred by
Landlord as a result of such holding over. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided, and this Paragraph 22 shall not be construed as
consent for Tenant to retain possession of the Premises.
23. EVENTS OF DEFAULT. Each of the following events shall be an
event of default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or
any other payment required herein when due, and such failure shall
continue for a period of 5 days from the date such payment was due.
Notwithstanding the forgoing, Tenant shall not be deemed in default
until Landlord has given Tenant 5 days written notice of the delinquent
payment (which may be given at any time during the delinquency);
provided, however, that such notice shall not be required more than once
in any 12-month period or four times over the term of the Lease.
(ii) Tenant or any guarantor or surety of Tenant's
obligations hereunder shall (A) make a general assignment for the
benefit of creditors; (B) commence any case, proceeding or other action
seeking to have an order for relief entered on its behalf as a debtor or
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or of any substantial part of
its property (collectively a "proceeding for relief"); (C) become the
subject of any proceeding for relief which is not dismissed within 120
days of its filing or entry provided all Tenant's obligations are being
currently satisfied in accordance with this Lease; or (D) be dissolved
or otherwise fail to maintain its legal existence.
(iii) Any insurance required to be maintained by Tenant
pursuant to this Lease shall be cancelled or terminated or shall expire
or shall be reduced or materially changed, except, in each case, as
permitted in this Lease.
(iv) Tenant shall not occupy or shall vacate the Premises or
shall fail to continuously operate its business at the Premises, for the
permitted use set forth herein, whether or not Tenant is in monetary or
other default under this Lease. Notwithstanding the foregoing, Tenant's
vacating of the Premises shall not constitute an Event of Default if,
prior to vacating the Premises, Tenant has made arrangements reasonably
acceptable to Landlord to (a) insure that Tenant's insurance for the
Premises will not be voided or cancelled with respect to the Premises as
a result of such vacancy, (b) insure that the Premises are secured and
not subject to vandalism, and (c) insure that the Premises will be
properly maintained after such vacation. Tenant shall inspect the
Premises at least once each month and report monthly in writing to
Landlord on the condition of the Premises.
(v) There shall occur any assignment, subleasing or other
transfer of Tenant's interest in or with respect to this Lease except as
otherwise permitted in this Lease.
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(vi) Tenant shall fail to discharge, or cause to be insured
over, any lien placed upon the Premises by a party claiming through
Tenant in violation of this Lease within 30 days after any such lien or
encumbrance is filed against the Premises.
(vii) Tenant shall fail to comply with any provision of this
Lease other than those specifically referred to in this Paragraph 23,
and except as otherwise expressly provided herein, such default shall
continue for more than 30 days after Landlord shall have given Tenant
written notice of such default, which period may be extended by an
additional 30 days provided Tenant has commenced the cure and is
pursuing such cure with due diligence.
24. LANDLORD'S REMEDIES. Upon each occurrence of an Event of Default
and so long as such Event of Default shall be continuing, Landlord may at any
time thereafter at its election: terminate this Lease or Tenant's right of
possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without format demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and equipment
at the Premises.
If Landlord terminates this Lease, Landlord may recover from Tenant the
sum of: all Base Rent and all other amounts accrued hereunder to the date of
such termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable eases
incurred by Landlord in pursuing its remedies, including reasonable attorneys'
fees and court costs; and the excess of the then present value of the Base Rent
and other amounts payable by Tenant under this Lease as would otherwise have
been required to be paid by Tenant to Landlord during the period following the
termination of this Lease measured from the date of such termination to the
expiration date stated in this Lease, over the present value of any net amounts
which Tenant establishes Landlord can reasonably expect to recover by reletting
the Premises for such period, taking into consideration the availability of
acceptable tenants and other market conditions affecting leasing. Such present
values shall be calculated at a discount rate equal to the 90-day U.S. Treasury
▇▇▇▇ rate at the date of such termination.
If Landlord terminates Tenant's right to possession without terminating
the Lease after an Event of Default, Landlord shall use commercially reasonable
efforts to relet the Premises; provided, however, (a) Landlord shall not be
obligated to accept any tenant proposed by Tenant, (b) Landlord shall have the
right to lease any other space controlled by Landlord first, and (c) any
proposed tenant shall meet all of Landlord's leasing criteria. Such reletting
shall be for the account of Tenant for such rent and upon such terms as shall be
satisfactory to Landlord without thereby releasing Tenant from any liability
hereunder and without demand or notice of any kind to Tenant. For the purpose of
such reletting Landlord is authorized to make any repairs, changes, alterations,
or additions in or to the Premises as Landlord deems reasonably necessary or
desirable. If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease for such
period or periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred in
any attempt by Landlord to relet the Premises. If the Premises are relet and a
sufficient sum shall not be realized from such reletting [after first deducting
therefrom, for retention by Landlord, the unpaid Base Rent and other amounts
accrued hereunder at the time of reletting, the cost of recovering possession
(including attorneys' fees and costs of suit), all of the costs and expense of
repairs, changes, alterations,
13
and additions, the expense of such reletting (including without limitation
brokerage fees and leasing commissions) and the cost of collection of the rent
accruing therefrom] to satisfy the rent provided for in this Lease to be paid,
then Tenant shall immediately satisfy and pay any such deficiency. Any such
payments due Landlord shall be made upon demand therefor from time to time and
Tenant agrees that Landlord may file suit to recover any sums falling due from
time to time. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect in writing to terminate this Lease for such
previous breach.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that such surrender and/or termination
can be effected only by the written agreement of Landlord and Tenant. Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord's right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms "enter," "re-enter," "entry" or "re-entry," as used in this Lease, are
not restricted to their technical legal meanings. Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, lease of
less than the entire Premises to any tenant and leasing any or all other
portions of the Project before reletting the Premises). Landlord shall not be
liable, nor shall Tenant's obligations hereunder be diminished because of,
Landlord's failure to relet the Premises or collect rent due in respect of such
reletting. Notwithstanding any provision to the contrary in the Lease, Landlord
shall have no right to commence an unlawful detainer or eviction proceeding
against Tenant until Tenant has received a written notice from Landlord stating
that an Event of Default (as defined under Paragraph 23 of this Lease) has
occurred and that unless Tenant cures such default within five (5) days
following receipt of such notice, Landlord shall have the right to commence an
unlawful detainer or eviction proceeding against Tenant.
25. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not be
in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary). All obligations of Landlord hereunder shall be
construed as covenants, not conditions; and, except as may be otherwise
expressly provided in this Lease, Tenant may not terminate this Lease for breach
of Landlord's obligations hereunder. All obligations of Landlord under this
Lease will be binding upon Landlord only during the period of its ownership of
the Premises and not thereafter. The term "Landlord" in this Lease shall mean
only the owner, for the time being of the Premises, and in the event of the
transfer by such owner of its interest in the Premises to a person or entity who
assumes Landlord's obligations under the Lease in writing, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Lease Term upon each
new owner for the duration of such owner's ownership. Any liability of Landlord
under this Lease shall be limited
14
solely to its interest in the Project, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord.
26. WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO
TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE PERTAINING
TO PAYMENT OF RENT OR OTHER AMOUNTS DUE HEREUNDER, MAINTENANCE OF THE PROJECT OR
PREMISES OR AN EVICTION OF THE TENANT FOR BREACH OF THE LEASE.
27. SUBORDINATION. This Lease and Tenant's interest end rights
hereunder are and shall be subject and subordinate at all times to the lien of
any first mortgage, now existing or hereafter created on or against the Project
or the Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Tenant hereby appoints Landlord attorney
in fact for Tenant irrevocably (such power of attorney being coupled with an
interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded. Notwithstanding the foregoing, any such holder may at any tithe
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust. Notwithstanding any provision to the contrary, this Lease shall
not be subject to or subordinate to any ground or underlying lease or to any
lien, mortgage, deed of trust, or security interest hereafter affecting the
Premises, nor shall Tenant be required to execute any documents subordinating
this Lease, unless the ground lessor, lender, or other holder of the interest to
which this Lease would or shall be subordinated executes a recognition and
nondisturbance agreement which (i) provides that this Lease shall not be
terminated so long as Tenant is not in default under this Lease and (ii)
recognizes all of Tenant's rights hereunder. Further, Tenant shall have no
obligation to attorn to any successor-in-interest or ground lessor, nor to
execute any documents evidencing attornment, unless the successor-in-interest or
ground lessor in question assumes, in writing, all obligations of the Landlord
under this Lease commencing as of the date of such successor Landlords
succession.
28. MECHANIC'S LIENS. Tenant has no express or implied authority to
create or place any lien or encumbrance of any kind upon, or in any manner to
bind the interest of Landlord or Tenant in, the Premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within 30 days of the filing or recording thereof;
provided, however, Tenant may contest such liens or encumbrances as long as such
contest prevents foreclosure of the lien or encumbrance and Tenant causes such
lien or encumbrance to be bonded or insured over in a manner satisfactory to
Landlord within such 30 day period.
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29. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within
10 days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect (or specifying in detail the reasons
that the Lease is not in full force and effect), the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such other
statements of fact pertaining to this Lease as may be requested by Landlord.
Tenant's obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for landlord's execution of this Lease.
30. ENVIRONMENTAL REQUIREMENTS. Except for Hazardous Materials
contained in products used by Tenant in de minimis quantities for ordinary
cleaning and office purposes, Tenant shall not permit or cause any party to
bring any Hazardous Material upon the Premises or store or use any Hazardous
Material in or about the Premises without Landlord's prior written consent.
Tenant, at its sole cost and expense, shall operate its business in the Premises
in compliance with all Environmental Requirements and shall immediately
remediate any Hazardous Materials released on or from the Project by Tenant, its
agents, employees, contractors, subtenants or invitees. The term "Environmental
Requirements" means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
governmental authority or agency regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the environment,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"); the Resource Conservation
and Recovery Act; and all state and local counterparts thereto, and any
regulations or policies promulgated or issued thereunder. The term "Hazardous
Materials" means and includes petroleum (as defined in CERCLA) and any
substance, material, waste, pollutant, or contaminant listed or defined as
hazardous or toxic, under any Environmental Requirements.
Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
corrective action, or cleanup expenses), and costs (including, without
limitation, actual attorneys' fees, consultant fees or expert fees) which are
brought or recoverable against, or suffered or incurred by Landlord as a result
of any release of Hazardous Materials for which Tenant is obligated to remediate
as provided above or any other breach of the requirements under this Paragraph
30 by Tenant, its agents, employees, contractors, subtenants, assignees or
invitees, regardless of whether Tenant had knowledge of such noncompliance. The
obligations of Tenant under this Paragraph 30 shall survive any termination of
this Lease.
Landlord shall have access to, and a right to perform inspections and
tests of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations. Such
inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.
31. RULES AND REGULATIONS. Tenant shall, at all times during the
Lease Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between said rules and regulations
and other provisions
16
of this Lease, the other terms and provisions of this Lease shall control.
Landlord shall not have any liability or obligation for the breach of any rules
or regulations by other tenants in the Project.
32. SECURITY SERVICE. Tenant acknowledges and agrees that, while
Landlord may patrol the Project, Landlord is not providing any security services
with respect to the Premises and that Landlord shall not be liable to Tenant
for, and Tenant waives any claim against Landlord with respect to, any loss by
theft or any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33. FORCE MAJEURE. Except for Tenant's monetary obligations
hereunder, neither Landlord nor Tenant shall be held responsible for delays in
the performance of its obligations hereunder when caused by strikes, lockouts,
labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, delay in issuance of permits, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of Landlord ("Force Majeure").
34. ENTIRE AGREEMENT. This Lease constitutes the complete agreement
of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.
35. SEVERABILITY. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby. It is also the intention of the parties to
this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this Lease, a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
36. BROKERS. Tenant represents and warrants that it has dealt with
no broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction.
37. MISCELLANEOUS. (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used
in this instrument, there is more than one person, firm or corporation, each
shall be jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this
Lease shall be in writing and shall be sent by registered or certified mail,
return receipt requested, or by a reputable national overnight courier service,
postage prepaid, or by hand delivery addressed to the parties at their addresses
below, and with a copy sent to Landlord at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Notices delivered by registered or certified mail, return
receipt requested, shall be deemed received on the date the United States Post
Office certifies delivery or refusal to accept delivery. Notices sent by a
reputable national overnight courier service shall be deemed received on the
next day scheduled for regular
17
delivery, without special request, by such courier. Notices delivered by hand
delivery shall be deemed received on the date of delivery. Either party may by
notice given aforesaid change its address for all subsequent notices. Except
where otherwise expressly provided to the contrary, notice shall be deemed given
upon delivery.
(d) Whenever the approval of any party is required
hereunder, such approval shall not be unreasonably withheld or delayed, unless
otherwise expressly provided herein.
(e) At Landlord's request from time to time Tenant shall
furnish Landlord with true and complete copies of its most recent annual and
quarterly financial statements prepared by Tenant or Tenant's accountants and
any other financial information or summaries that Tenant typically provides to
its lenders or shareholders. Notwithstanding any provision to the contrary in
this Lease, (i) Tenant shall provide Landlord with its annual financial
statements within 90 days of Tenant's fiscal year end, and (ii) Landlord shall
be entitled to request additional financial statements from Tenant only if
Landlord needs such statements to deliver to a proposed buyer or potential
lender of Landlord's, unless such reports are published for the general public,
Landlord shall disclose such financial information only to a prospective buyer
of the Project and to a prospective lender.
(f) Notwithstanding any provision to the contrary in this
Lease, provided Tenant shall require, at Tenant's sole cost, leasehold title
insurance, at the request of Tenant, Landlord will execute and acknowledge a
memorandum of lease which Tenant shall have the right to record in the public
records. In such event, Tenant shall also execute and deliver a recordable
release of such memorandum to be held by Landlord and to be recorded upon
termination of the Lease by expiration of its term, by agreement of the parties,
judicial order or as reasonably determined, upon 10 days notice to Tenant, by
Landlord. Landlord may prepare and file, and upon request by Landlord Tenant
will execute, a memorandum of lease.
(g) The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease shall
have no binding force or effect, shall not constitute an option for the leasing
of the Premises, nor confer any right or impose any obligations upon either
party until execution of this Lease by both parties.
(i) Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be
held to include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
(j) Any amount not paid by Tenant within 5 days after its
due date in accordance with the terms of this Lease shall bear interest from
such due date until paid in full at the lesser of the highest rate permitted by
applicable law or twelve percent (12%) percent per year. It is expressly the
intent of Landlord and Tenant at all times to comply with applicable law
governing the maximum rate or amount of any interest payable on or in connection
with this Lease. If applicable law is ever judicially interpreted so as to
render usurious any interest called for under this Lease, or contracted for,
charged, taken, reserved, or received with respect to this Lease, then it is
Landlord's and Tenant's express intent that all excess amounts theretofore
collected by landlord be credited on the applicable obligation (or, if the
obligation has been or would thereby be paid in full, refunded to Tenant), and
the provisions of this Lease immediately, shall be deemed reformed and the
amounts thereafter collectible hereunder reduced,
18
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding any
principles of conflicts of laws.
(l) Time is of the essence as to the performance of Tenant's
and Landlord's obligations under this Lease.
(m) All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.
(n) If there is any conflict between the terms and
provisions of this Lease and the Rules and Regulations (in the form attached
hereto, as reasonably modified by Landlord from time to time), the provisions of
this Lease shall prevail.
38. INTENTIONALLY DELETED.
39. LIMITATION OF LIABILITY OF TRUSTEES, SHAREHOLDERS, AND OFFICERS
OF SECURITY CAPITAL INDUSTRIAL TRUST. Any obligation or liability whatsoever of
Security Capital Industrial Trust, a Maryland real estate investment trust,
which may arise at any time under this Lease or any obligation or liability
which may be incurred by it pursuant to any other instrument, transaction, or
undertaking contemplated hereby shall not be personally binding upon, nor shall
resort for the enforcement thereof be had to the property of, its trustees,
directors, shareholders, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort, or otherwise.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
TENANT: LANDLORD:
INSYNC SYSTEMS, INC. SECURITY CAPITAL INDUSTRIAL TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------- --------------------------------
Title: V.P., CFO and Secretary Title: Managing Director
-------------------------------------- -----------------------------
Address: Local Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇ Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
19
Rules and Regulations
1. The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or its agents, or used by them for any purpose
other than ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas
outside of its Premises, or on the roof of the Project. Tenant may
install a nonpenetrating microwave antenna, and picnic and smoking
gazebo in designated areas, and in compliance with all laws and
covenants, conditions and restrictions of record with Landlord's prior
consent, which shall not be unreasonably withheld.
3. Except for seeing-eye dogs, no animals shall be allowed in the offices,
halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the making
of loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections
in the Premises, Landlord or its agent will direct the electrician as to
where and how the wires may be introduced; and, without such direction,
no boring or cutting of wires will be permitted. Any such installation
or connection shall be made at Tenant's expense.
6. Except as provided in ▇▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇ shall not install or operate
any steam or gas engine or boiler, or other mechanical apparatus in the
Premises, except as specifically approved in the Lease. The use of oil,
gas or inflammable liquids for heating, lighting or any other purpose is
expressly prohibited. Explosives or other articles deemed extra
hazardous shall not be brought into the Project.
7. Parking any type of recreational vehicles is specifically prohibited on
or about the Project. Except for the overnight parking of operative
vehicles, no vehicle of any type shall be stored in the parking areas at
any time. In the event that a vehicle is disabled, it shall be removed
within 48 hours. There shall be no "For Sale" or other advertising signs
on or about any parked vehicle. All vehicles shall be parked in the
designated parking areas in conformity with all signs and other
markings. All parking will be open parking, and no reserved parking
except as shown on Exhibit A, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.
8. Tenant shall maintain the Premises free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project 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 the Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to
the effects of Tenant by the janitors or any other employee or person.
11. Tenant shall give Landlord prompt notice of any defects in the water,
lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
heating apparatus, or any other service equipment affecting the
Premises.
12. Tenant shall not permit storage outside the Premises, including without
limitation, outside storage of trucks and other vehicles, or dumping of
waste or refuse or permit any harmful materials to be placed in any
drainage system or sanitary system in or about the Premises.
13. All moveable trash receptacles provided by the trash disposal firm for
the Premises must be kept in the trash enclosure areas, if any, provided
for that purpose.
14. No auction, public or private, will be permitted on the Premises or the
Project.
15. No awnings shall be placed over the windows in the Premises except with
the prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or cooking (other
than occasional cooking for occupants/employees) or for any immoral or
illegal purposes or for any purpose other than that specified in the
Lease. No gaming devices shall be operated in the Premises.
17. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account
the capacity of the electrical wiring in the Project and the Premises
and the needs of other tenants, and shall not use more than such safe
capacity. Landlord's consent to the installation of electric equipment
shall not relieve Tenant from the obligation not to use more electricity
than such safe capacity.
18. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage.
19. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.
CONSTRUCTION ADDENDUM
TO
BUILD-TO-SUIT LEASE AGREEMENT
Dated April 16, 1996, Between
Security Capital Industrial Trust
And
Insync Systems Inc.
1. Standard Specifications and Final Plans: Change Orders.
(a) Preparation of Final Plans. Landlord shall furnish or
perform at Landlord's sole cost and expense those items of construction and
those improvements ("Building Shell") provided for in the Landlord's standard
scope of work description and specifications (the "Standard Specifications")
attached as Exhibit 1, subject to the provisions of this Addendum. Landlord has
provided Tenant with final working drawings and specifications for the Building
Shell (the "Final Plans") which are consistent with the Standard Specifications.
When Landlord requests Tenant to specify details or layouts, Tenant shall
promptly specify same within 3 days thereafter so as not to delay completion of
the Building Shell. Any delay in the completion of the Building Shell caused by
any Tenant failure to respond promptly to Landlord's requests shall be an
Excusable Delay (as hereinafter defined). In addition, Tenant shall pay to
Landlord upon demand all increased costs incurred by Landlord in completing the
Building Shell to the extent such costs are attributable to any such Tenant
caused delays.
(b) Change Orders. The Standard Specifications define the
entire scope of Landlord's obligation to construct or provide the Building
Shell. Tenant shall not be entitled to specify or designate any finishes, grades
of materials, or other specifications or details of the construction of the
Building Shell which are not specifically provided for in or contemplated by the
Standard Specifications unless requested to do so by Landlord. Subject to this
paragraph, however, Landlord shall make additions or changes to the Standard
Specifications requested by Tenant. If Tenant shall desire any such changes,
Tenant shall so advise Landlord in writing (a "Change Order Request") as
promptly as possible so as not to delay the orderly development of the Final
Plans. All reasonable costs incurred by Landlord in having any Change Order
Request reviewed and evaluated shall be reimbursed by Tenant upon demand. Such
costs shall include, but not be limited to, the reasonable costs of architects,
engineers, and consultants in reviewing and designing any such changes and the
cost of contractors in providing cost estimates and constructability,
functionality and product availability analyses. Tenant acknowledges and agrees
that (i) Landlord shall not be obligated to accept any Change Order Request if
in the judgment of Landlord the requested change would have an adverse effect on
the quality, useful life, value, functionality or costs of operating or
maintaining the Building Shell; (ii) Tenant shall bear all costs and expenses
associated with incorporating into the Final Plans and the Building Shell any
Change Order Request accepted by Landlord, including without limitation an
administrative fee to Landlord equal to 15 percent of the increased cost
resulting from such change; (iii) Landlord shall not be obligated to accept the
least expensive method of incorporating the requested change if in the judgment
of Landlord, such method does not incorporate sound construction practices; (iv)
if the Change Order Request affects the roof, slab, structural components or
systems or equipment to be installed within the Building Shell or the future
serviceability of the Building Shell, and the Landlord determines that in order
to lease the building to any subsequent tenant, additional work will have to be
done to remove the effect of such change, the anticipated costs of restoring the
Building Shell to the condition it would have be in but for such change will
also be borne by the Tenant at the time the Tenant's change is incorporated into
the Building Shell; (v) any delays in the development of the Final Plans or
completion of the Building Shell caused by and directly related to Tenant's
Change Order Request and incorporating any such change into the Final Plans
and Building Shell shall constitute an Excusable Delay (as defined in Paragraph
5 below); and (vi) to the extent Tenant specifies any items which have not been
recommended by Landlord, Tenant assumes full responsibility for their
performance. Upon agreement between landlord and Tenant on the change that will
be incorporated into the Final Plans and Building Shell as a result of a Change
Order Request, and the cost of such change, the Landlord and Tenant shall
execute a change order (a "Change Order") setting forth the parties' agreement
as to such terms.
(c) Approval of Final Plans. Landlord has submitted the
Final Plans to Tenant and Tenant has approved the Final Plans. Landlord shall
have the right to modify the Final Plans provided such changes are reasonably
consistent with the Standard Specifications.
(d) Intentionally deleted.
(e) Change Orders During Construction. In the event that
subsequent to the completion and approval of the Final Plans, Tenant desires to
make a change in the work provided for therein, the parties shall proceed in
accordance with the foregoing provisions relating to changes requested during
the development of the Final Plans.
2. Project Representatives. Landlord hereby designates ▇▇▇▇▇▇▇
▇▇▇▇▇▇ to serve as Landlord's representative and Tenant hereby designates ▇▇▇▇▇
▇▇▇▇▇▇ to serve as Tenant's representative during the design and construction of
the Building Shell. All communications between Landlord and Tenant relating to
the design and construction of the Building Shell shall be forwarded to or made
by such party's representative. In addition, no Change Order shall be binding on
Landlord unless executed by a Vice President or Managing Director and no Change
Order shall be binding on Tenant unless executed by ▇▇▇▇▇ ▇▇▇▇▇▇, Director of
Facilities.
3. Dispute Resolution.
(a) Conference of Senior Representatives. The parties shall
make good faith efforts to resolve any dispute which may arise under this
Construction Addendum in an expedient manner. In the event, however, that any
dispute arises, either parry may notify the other party of its intent to invoke
the dispute resolution procedure herein set forth by delivering written notice
to the other party. In such event, if the parties' respective representatives
are unable to reach agreement on the subject dispute within 10 business days
after delivery of such notice, then each party shall, within 5 business days
thereafter, designate a senior executive officer of its management to meet at a
mutually agreed location to resolve the dispute.
(b) Arbitration. Subject to the dollar limitation set forth
below, disputes as to the date of Substantial Completion and any work required
to be performed by Landlord hereunder that are not resolved within 5 days by
agreement between the designated executive officers, may be submitted to
arbitration if either party so elects, by delivering written notice to the other
parry within 10 days after the expiration of such 5 day period. In such event,
the subject dispute shall be resolved by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, subject to
the requirement that a single arbitrator unaffiliated with either party shall
decide each matter in dispute within 15 days of the date of his selection, based
solely upon the written statements of position submitted by each party and
subject to the right of Landlord to join in any such arbitration the Architect
of Record and any contractor whose work is the subject of any such arbitration:
The parties consent to the jurisdiction of any appropriate court to enforce
these arbitration provisions and to enter judgments upon the decision of the
arbitration. Unless otherwise required by state law, arbitration shall be
conducted in Austin, Texas. In the event of an arbitration, the losing party
shall pay the cost of arbitrator and the arbitration, but each party shall bear
its own attorneys' fees and costs in preparing for and participating in
such arbitration. Only those disputes described above that do not involve an
amount exceeding $100,000.00 shall be subject to mandatory arbitration pursuant
to this Paragraph 3 provided that in any arbitration between Landlord and
contractor, either Landlord or Tenant shall be entitled to require that Tenant
participate and be bound as a party-in-interest. No other disputes shall be
subject to arbitration.
4. Tenant's Installations. Subject to applicable ordinances
and building codes governing Tenant's right to occupy or perform in the
Premises, and to the provisions of the Lease regarding Tenant-Made Alterations,
which apply to the Tenant's initial installations before Substantial Completion
as well as any after Substantial Completion, Tenant shall be allowed to install
its improvements, machinery, equipment, fixtures, or other personal property on
the Premises when, in Landlord's opinion, such installation will not interfere
with Landlord's completion of construction, provided that Tenant does hereby
agree to assume all risk of loss or damage to its machinery, equipment,
fixtures, and other personal property, including any loss or damage resulting
from the negligence of Landlord and to indemnify, defend, and hold Landlord
harmless from any and all liability, loss, or damage arising from any injury to
the property of Landlord, its contractors, subcontractors, or materialmen, and
any death or personal injury to any person or persons arising out of such
occupancy or installation. To the extent Tenant uses any of Landlord's
contractors or subcontractors in connection with the installation of its
improvements, Tenant acknowledges and agrees that Landlord's work shall take
priority over that of the Tenant and that Tenant shall not divert Landlord's
contractors or subcontractors from the performance of their work obligations for
Landlord.
Notwithstanding anything else to the contrary provided herein, subject
to delays caused by Force Majeure, Landlord shall pay liquidated damages to
Tenant equal to one hundred sixty-six dollars ($166.00) per day for each day
after July 1, 1996 and before the date on which Landlord provides Tenant access
to the Premises for purposes of installing its mechanical systems (in accordance
with the preceding paragraph); and one hundred sixty-six dollars ($166.00) per
day for each day after July 15, 1996 and before the date on which Landlord
provides Tenant access to the Premises for purposes of installing the balance of
its Tenant Improvements (subject to the preceding paragraph). Notwithstanding
anything to the contrary in the forgoing sentence, the maximum amount per day
payable by Landlord to Tenant shall be one hundred sixty-six dollars ($166.00).
In the event Landlord fails to grant Tenant the access described in the
foregoing sentence on the referenced dates, Landlord shall work in good faith
with Tenant to accelerate the pace of construction to return the Project to an
estimated Commencement Date of October 1, 1996.
Further, in the event Landlord has failed to grant Tenant the access
described in the preceding paragraph on the referenced dates, and the Premises
is not ready for Tenant's occupancy as of October 1, 1996, (the "Extended Rent
Commencement Date") the Extended Rent Commencement Date shall be extended for
each day for which Landlord has paid Tenant $166.00 as described in the
preceding paragraph.
5. Substantial Completion.
(a) Determination of Substantial Completion. Landlord shall
diligently proceed with the construction of the Building Shell to achieve
Substantial Completion on or before the dates set forth in the Schedule or as
otherwise agreed by the parties. "Substantial Completion" shall be deemed to
have occurred on the date upon which the architect who prepared the Final Plans
("Architect of Record") certifies that the Building Shell and Tenant
Improvements have been completed in substantial accordance with the Final Plans
subject only to completion of punch list items which do not materially interfere
with the utilization of the Building Shell for the purposes for which they were
intended.
(b) Inspection and Punch List. Landlord shall notify Tenant
in writing approximately [10] days before the estimated date of Substantial
Completion. Within [5] business days of the anticipated date of Substantial
Completion, Landlord and Tenant shall jointly inspect the Improvements and agree
upon a punch list of items in accordance with the Final Plans needing completion
or correction. As soon as Substantial Completion has been achieved, Landlord
shall notify Tenant in writing of the date certified by the Architect of Record
as the date of Substantial Completion. Landlord shall use all reasonable
diligent efforts to complete all punch list items within [30] days after
agreement upon the punch list, subject, however, to long lead time items which
must be ordered and to seasonal requirements for any landscaping and exterior
work.
(c) Acceptance. Upon the Commencement Date, Tenant shall,
upon demand, execute and deliver to Landlord a letter of acceptance of delivery
of the Premises and confirmation of the Commencement Date. If Tenant occupies
any portion of the Premises prior to Substantial Completion or the Commencement
Date, the terms of this Lease shall apply to such occupancy or use of the
Premises by Tenant. Except for incomplete punch list items referred to above,
Tenant upon the Commencement Date shall have and hold the Premises as the same
shall then be without any liability or obligation on the part of Landlord under
this Lease for making any further alterations improvements of any kind in or
about the Premises during the Lease Term, or any extension or renewal thereof.
(d) Tenant-Caused Delay. If Substantial Completion is
delayed as a direct result of Tenant Change Orders, Tenant's interference with
the construction of the Building Shell, delays resulting from Tenant's using
Landlord's contractors and/or subcontractors to complete Tenant's
installations), or Tenant's failure to promptly respond to Landlord's request to
specify details or layouts or other matters, then the Commencement Date shall be
deemed to have occurred when in the opinion of the Architect of Record,
Substantial Completion would have otherwise occurred, and, any additional costs
incurred by Landlord in completing the Building Shell as a result of such
Tenant-caused delays shall be reimbursed by Tenant upon Landlord's reasonable
determination that such costs were directly caused by Tenant's delay.
6. Excusable Delay. In connection with obtaining the necessary
permits and approvals for the Improvements and the construction of the
Improvements, if any delay in obtaining such permits and approvals or in such
construction is caused or contributed to by the act or neglect of Tenant, or
those acting for or under Tenant, or should there occur any delay in obtaining
any building permits or approvals required for the Improvements, labor disputes,
casualties, acts of God or the public enemy, governmental embargo restrictions,
shortages of fuel, labor or building materials, action or non-action of public
utilities, or of applicable governmental authority or building officers
affecting the work, adverse weather conditions, or other causes beyond
Landlord's reasonable control ("Excusable Delay"), then the time required in the
schedule to achieve Substantial Completion shall be extended for such period of
time as may be necessary to compensate for delay.
7. Tenant Improvements. Tenant will furnish or perform those items
of construction and those improvements (the "Tenant Improvements") specified or
referenced in Exhibit 2 attached hereto. Landlord shall pay for the Tenant
Improvements up to a maximum amount of $1,760,000.00 (the "TI Allowance"), and
in no event shall Landlord have any obligation to pay for any costs of the
Tenant Improvements in excess of such amount. If the cost of the Tenant
Improvements exceeds such amount, any estimated overage in excess of such amount
shall be paid by Tenant. Further, Tenant shall repay Landlord for $1,337,600.00
($19 psf) of the TI Allowance, together with interest at 10.75% per annum, in
equal monthly installments over the Lease Term of $28,923.00 (the "TI
Amortization"). Tenant shall have the right to select its own contractors
subject to Landlord's consent of such contractors, which shall not be
unreasonably withheld.
ADDENDUM II
LETTER OF CREDIT FOR ADDITIONAL SECURITY DEPOSIT
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 16, 1996, BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
The Additional Security Deposit shall be in the form of an
unconditional, irrevocable letter of credit from a bank reasonably acceptable to
Landlord. The letter of credit shall either provide that it does not expire
until the end of the Lease term or, if it is for less than the full term of the
Lease, shall be renewed by Tenant at least 30 days prior to its expiration
during the term of the Lease. The letter of credit shall provide that it may be
drawn down upon by Landlord at any time Landlord delivers its site draft to the
bank. If Landlord sells or conveys the Premises, Tenant shall, at Landlord's
request, cooperate in having the letter of credit transferred to the purchaser.
If the letter of credit is ever drawn upon by Landlord pursuant to the terms of
the Lease and this Addendum, Tenant shall within ten (10) days thereafter cause
the letter of credit to be restored to its original amount.
The form of the Letter of Credit, Sight Draft, Drawing Request and
Notice of Assignment are attached hereto as Annex II-1, II-2, II-3 and II-4
respectively.
Landlord will release the letter of credit after three years provided
Tenant meets the following criteria:
1. Timely compliance with all lease terms during the three years;
2. An increase in gross sales and net worth by 50% over the three
years (using as a base year the financial statements attached as
Annex II-6), as established by audited financial statements;
3. No decrease in operating margin during the period;
4. No increase in the debt-to-total-capital ratio over the period.
Further, the Letter of Credit shall be reduced annually on a pro rata
basis in accordance with Annex II-5.
ANNEX II-1
FORM OF LETTER OF CREDIT
[LETTERHEAD OF LETTER OF CREDIT BANK]
[DATE]
Security Capital Industrial Trust
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇
Re: Irrevocable Transferrable Letter of Credit
No.
---------------------------------------
Beneficiary:
By order of our client, Insync Systems, Inc. (the "Applicant"), we
hereby establish this Irrevocable Transferrable Letter of Credit No. in your
favor for an amount up to but not exceeding the aggregate sum of Six Hundred
Thirty-Five Thousand and No/100 Dollars ($635,000) (as reduced from time to time
in accordance with the terms hereof, the "Letter of Credit Amount"), effective
immediately, and expiring on the close of business at our office at the address
set forth above one year from the date hereof unless renewed as hereinafter
provided.
Funds under this Letter of Credit are available to you on or prior to
the expiry date against presentation by you of your (i) sight drafts drawn on us
in the form of Annex 1 hereto, indicating this Letter of Credit number and (ii)
request in the form of Annex 2 hereto (such sight draft and request, together
referred to as a "Drawing Request"), sight draft(s), completed and signed by one
of your officers. Presentation of your Drawing Requests may be made by you to us
at the address set forth above or may be made by facsimile transmission, to the
following facsimile number _____________. You may present to us one or more
Drawing Requests from time to time prior to the expiry date in an aggregate
amount not to exceed the Letter of Credit Amount then in effect (it being
understood that the honoring by us of each Drawing Request shall reduce the
Letter of Credit Amount then in effect).
This Letter of Credit will be automatically renewed for a one-year
period upon the expiration date set forth above and upon each anniversary of
such date, unless at least sixty (60) days prior to such expiration date, or
prior to any anniversary of such date, we notify both you and the Applicant in
writing by certified mail that we elect not to so renew the Letter of Credit.
This Letter of Credit sets forth in full the terms of our undertaking
and such undertaking shall not in any way be modified, amended or amplified by
reference to any document or instrument referred to herein or in which this
Letter of Credit is referred to or to which this Letter of Credit relates, and
no such reference shall be deemed to incorporate herein by reference any
document or instrument.
All bank charges and commissions incurred in this transaction are for
the Applicant's account.
This Letter of Credit is transferrable by you and your successors and
assigns any number of times in its entirety and not in part, but only by
delivery to us of a Notice of Assignment in the form of Annex 3 hereto.
We hereby agree with the drawers, endorsers, and bona fide holders of
drafts drawn under and in compliance with the terms of this Letter of Credit
that such drafts will be duly honored upon presentation to the drawee from our
own funds and not the funds of the Applicant and shall be available to such
drawers, endorsers, and bona fide holders, as the case may be, on or before
noon, New York time, on the Business Day (defined below) next following the date
on which such drafts are received by us. "Business Day" shall mean any day which
is not a Saturday, Sunday or day on which we are required or authorized by law
to be closed in New York, New York.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with, the
terms of the Uniform Customs and Practice for Commercial Documentary Credits
(1993 Revision), I.C.C. Publication No. 500 (the "UCP 500") and as to matters
not governed by the UCP 500, this Letter of Credit shall be governed by and
construed in accordance with the laws of the State of New York.
Very truly yours,
[NAME OF LETTER OF CREDIT BANK]
By:
---------------------------------
Name:
Title:
ANNEX II-2
SIGHT DRAFT
__________, 199_
For value received, at sight pay to the order of SECURITY CAPITAL
INDUSTRIAL TRUST, the sum of [Amount in words] [Amount in Figures] United States
Dollars drawn under [Name of Letter of Credit Bank] Irrevocable Transferrable
Letter of Credit No. ____________ dated ___________________, 199___.
SECURITY CAPITAL INDUSTRIAL TRUST
By:
---------------------------------
Name:
Title:
ANNEX II-3
DRAWING REQUEST
__________, 199_
[NAME AND ADDRESS OF LETTER
OF CREDIT BANK]
Re: Irrevocable Transferrable Letter of Credit No. ________________
(the "Letter of Credit")
The undersigned (the "Beneficiary"), hereby certifies to [Name of Letter
of Credit Bank] (the "Issuer") that:
(a) The Beneficiary is making a request for payment in lawful
currency of the United States of America under Irrevocable Transferrable Letter
of Credit No. (the "Letter of Credit") in the amount of $_________________.
(b) The Letter of Credit Amount (as defined in the Letter of Credit)
as of the date hereof and prior to payment of the amount demanded in this
Drawing Request is $_____________. The amount requested by this Drawing Request
does not exceed the Letter of Credit Amount.
[(c) Demand is made for payment under the Letter of Credit as a
result of the occurrence and continuation of an Event of Default (as defined in
the Lease Agreement).]
Please wire transfer the proceeds of the drawing to the following
account of the Beneficiary at the financial institution indicated below:
-----------------------------------------
-----------------------------------------
-----------------------------------------
Unless otherwise defined, all capitalized terms used herein have the
meanings provided in, or by reference in, the Letter of Credit.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Drawing Request as of the ___ day of _________, 199__.
SECURITY CAPITAL INDUSTRIAL TRUST
By:
---------------------------------
Name:
Title:
ANNEX II-4
NOTICE OF ASSIGNMENT
__________, 199_
[NAME AND ADDRESS OF
LETTER OF CREDIT BANK]
Re: Irrevocable Transferable Letter of Credit No. __________
The undersigned (the "Beneficiary"), hereby notifies [Name of Letter of
Credit Bank] (the "Issuer") that it has irrevocably assigned the
above-referenced Letter of Credit to (the "Assignee") with an address at
_________________ effective as of the date the Issuer receives this Notice of
Assignment. The Assignee acknowledges and agrees that the Letter of Credit
Amount may have been reduced pursuant to the terms thereof, and that the
Assignee is bound by any such reduction.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Notice of Assignment as of this ___________ day of _______, 199___.
SECURITY CAPITAL INDUSTRIAL TRUST
By:
---------------------------------
Name:
Title:
Agreed:
[Assignee]
------------------------------
ADDENDUM IV
THREE RENEWAL OPTIONS
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 16, 1996, BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
(a) Provided that as of the time of the giving of the First
Extension Notice and the Commencement Date of the First Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies not
less than 50% of the Premises initially demised under this Lease and any space
added to the Premises, and (z) no Event of Default exists or would exist but for
the passage of time or the giving of notice, or both; then Tenant shall have the
right to extend the Lease Term for that portion of the Premises then leased and
occupied by Tenant, excluding any square footage subleased by Tenant as of the
First Extension Notice, for an additional term of three (3) years (such
additional term is hereinafter called the "First Extension Term") commencing on
the day following the expiration of the Lease Term (hereinafter referred to as
the "Commencement Date of the First Extension Term"). Tenant shall give Landlord
notice (hereinafter called the "First Extension Notice") of its election to
extend the term of the Lease Term at least nine (9) months, but not more than 12
months, prior to the scheduled expiration date of the Lease Term.
(b) Provided that as of the time of the giving of the Second
Extension Notice and the Commencement Date of the Second Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies not
less than 50% of the Premises initially demised under this Lease and any space
added to the Premises, and (z) no Event of Default exists or would exist but for
the passage of time or the giving of notice, or both and provided Tenant has
exercised its option for the First Extension Term; then Tenant shall have the
right to extend the Lease Term for that portion of the Premises then leased and
occupied by Tenant, excluding any square footage subleased by Tenant as of the
Second Extension Notice, for an additional term of three (3) years (such
additional term is hereinafter called the "Second Extension Term") commencing on
the day following the expiration of the First Extension Term (hereinafter
referred to as the "Commencement Date of the Second Extension Term"). Tenant
shall give Landlord notice (hereinafter called the "Second Extension Notice") of
its election to extend the term of the Lease Term at least nine (9) months, but
not more than 12 months, prior to the scheduled expiration date of the First
Extension Term.
(c) Provided that as of the time of the giving of the Third
Extension Notice and the Commencement Date of the Third Extension Term, (x)
Tenant is the Tenant originally named herein, (y) Tenant actually occupies not
less than 50% of the Premises initially demised under this Lease and any space
added to the Premises, and (z) no Event of Default exists or would exist but for
the passage of time or the giving of notice, or both and provided Tenant has
exercised its option for the Second Extension Term; then Tenant shall have the
right to extend the Lease Term for that portion of the Premises then leased and
occupied by Tenant, excluding any square footage subleased by Tenant as of the
Third Extension Notice, for an additional term of three (3) years (such
additional term is hereinafter called the "Third Extension Term") commencing on
the day following the expiration of the Second Extension Term (hereinafter
referred to as the "Commencement Date of the Third Extension Term"). Tenant
shall give Landlord notice (hereinafter called the "Third Extension Notice") of
its election to extend the term of the Lease Term at least nine (9) months, but
not more than 12 months, prior to the scheduled expiration date of the First
Extension Term.
(d) The Base Rent payable by Tenant to Landlord during the First
Extension Term shall be the greater of (i) the Base Rent per square foot
applicable to the last year of the initial Lease term and (ii) the then
prevailing market rate for comparable space in the Project and comparable
buildings in the vicinity of the Project, taking into account the size of the
Lease, the length of the renewal term, market escalations and the credit of
Tenant. The Base Rent shall not be reduced by reason of any costs or expenses
saved by Landlord by reason of Landlord's not having to find a new tenant for
such premises (including, without limitation, brokerage commissions, costs of
improvements, rent concessions or lost rental income during any vacancy period)
nor increased for the value of the Tenant Improvements installed and paid for by
Tenant. In the event Landlord and Tenant fail to reach an agreement on such
rental rate and execute the Amendment (defined below) at least 8 months prior to
the expiration of the Lease, then Tenant's exercise of the renewal option shall
be deemed withdrawn and the Lease shall terminate at the end of the Initial
Term.
(e) The Base Rent payable by Tenant to Landlord during the Second
Extension Term shall be the greater of (i) the Base Rent per square foot
applicable to the last year of the First Extension term and (ii) the then
prevailing market rate for comparable space in the Project and comparable
buildings in the vicinity of the Project, taking into account the size of the
Lease, the length of the renewal term, market escalations and the credit of
Tenant. The Base Rent shall not be reduced by reason of any costs or expenses
saved by Landlord by reason of Landlord's not having to find a new tenant for
such premises (including, without limitation, brokerage commissions, costs of
improvements, rent concessions or lost rental income during any vacancy period)
nor increased for the value of the Tenant improvements installed and paid for by
Tenant. In the event Landlord and Tenant fail to reach an agreement on such
rental rate and execute the Amendment (defined below) at least 5 months prior to
the expiration of the Lease, then Tenant's exercise of the renewal option shall
be deemed withdrawn and the Lease shall terminate at the end of the First
Extension Term.
(f) The Base Rent payable by Tenant to Landlord during the Third
Extension Term shall be the greater of (i) the Base Rent per square foot
applicable to the last year of the Second Extension Term and (ii) the then
prevailing market rate for comparable space in the Project and comparable
buildings in the vicinity of the Project, taking into account the size of the
Lease, the length of the renewal term, market escalations and the credit of
Tenant. The Base Rent shall not be reduced by reason of any costs or expenses
saved by Landlord by reason of Landlord's not having to find a new tenant for
such premises (including, without limitation, brokerage commissions, costs of
improvements, rent concessions or lost rental income during any vacancy period)
nor increased for the value of the Tenant Improvements installed and paid for by
Tenant. In the event Landlord and Tenant fail to reach an agreement on such
rental rate and execute the Amendment (defined below) at least 5 months prior to
the expiration of the Lease, then Tenant's exercise of the renewal option shall
be deemed withdrawn and the Lease shall terminate at the end of the Second
Extension Term.
(g) The determination of Base Rent does not reduce the Tenant's
obligation to pay or reimburse Landlord for operating expenses and other
reimbursable items as set forth in the Lease, and Tenant shall reimburse and pay
Landlord as set forth in the Lease with respect to such operating expenses and
other items with respect to the Premises during the First Extension Term, Second
Extension Term and Third Extension Term without regard to any cap on such
expenses set forth in the Lease.
(h) Except for the Base Rent as determined above, Tenant's occupancy
of the Premises during the Extension Terms shall be on the same terms and
conditions as are in effect immediately prior to the expiration of the initial
Lease Term; provided, however, Tenant shall have no further right to any
allowances, credits or abatements or any options to expand, contract, renew or
extend the Lease.
(i) If Tenant does not give the First Extension Notice within the
period set forth in paragraph (a) above, Tenant's right to extend the Lease Term
for the First Extension Term, the Second Extension Term and the Third Extension
Term shall automatically terminate. If Tenant does not give the Second Extension
Notice within the period set forth in paragraph (b) above, Tenant's right to
extend the Lease Term for the Second Extension Term and the Third Extension Term
shall automatically terminate. If Tenant does not give the Third Extension
Notice within the period set forth in paragraph (c) above, Tenant's right to
extend the Lease Term for the Third Extension Term shall automatically
terminate. Time is of the essence as to the giving of the First Extension
Notice, Second Extension Notice, and Third Extension Notice.
(j) Landlord shall have no obligation to refurbish or otherwise
improve the Premises for the Extension Term. The Premises shall be tendered on
the Commencement Date of the First Extension Term, the Second Extension Term,
and the Third Extension Term in "as-is" condition.
(k) If the Lease is extended for the First Extension Term, Second
Extension Term, or Third Extension Term then Landlord shall prepare and Tenant
shall execute an amendment to the Lease confirming the extension of the Lease
Term and the other provisions applicable thereto (the "Amendment").
(l) If Tenant exercises its right to extend the term of the Lease
for the First Extension Term, Second Extension Term, or Third Extension Term
pursuant to this Addendum, the term "Lease Term" as used in the Lease, shall be
construed to include, when practicable, the First Extension Term, Second
Extension Term, or Third Extension Term as applicable, except as provided in (h)
above.
ADDENDUM V
RIGHT OF FIRST OFFER (LEASE)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 16, 1996 BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
(a) "Offered Space" shall mean (i) during the initial Term only,
space in Buildings 4 and 5 of Corridor Park Corporate Center, Austin, Texas,
which becomes available after an initial tenant has occupied such space and such
tenant has elected not to extend or renew its term; and (ii) during the First
Extension Term only, space in Building 5 of Corridor Park Corporate Center in
excess of 32,040 contiguous square feet which becomes available after the
initial or then current tenant has elected not to extend or renew its term.
There shall be no "offered Space" following the First Extension Term.
(b) Provided that as of the date of the giving of Landlord's Notice,
(x) Tenant is the Tenant originally named herein, (y) Tenant actually occupies
all of the Premises originally demised under this Lease and any premises added
to the Premises, and (z) no Event of Default or event which but for the passage
of time in the giving of notice, or both, would constitute an Event of Default
has occurred and is continuing, if at any time during that portion of the Lease
Term described in paragraph (a) above, any lease for any portion of the Offered
Space shall expire, then Landlord, before offering such Offered Space to anyone,
other than the tenant then occupying such space (or its affiliates), shall offer
to Tenant the right to include the Offered Space within the Premises on tile
same terms and conditions upon which Landlord intends to offer the Offered Space
for lease.
(c) Such offer shall be made by Landlord to Tenant in a written
notice (hereinafter called the "First Offer Notice") which offer shall designate
the space being offered and shall specify the terms which Landlord intends to
offer with respect to any such Offered Space. Tenant may accept the offer set
forth in the First Offer Notice by delivering to Landlord an unconditional
acceptance (hereinafter called "Tenant's Notice") of such offer within 15
business days after delivery by Landlord of the First Offer Notice to Tenant.
Time shall be of the essence with respect to the giving of Tenant's Notice. If
Tenant does not accept (or fails to timely accept) an offer made by Landlord
pursuant to the provisions of this Addendum with respect to the Offered Space
designated in the First Offer Notice, Landlord shall be under no further
obligation with respect to such space by reason of this Addendum, except as
provided in paragraph (e) below.
(d) Tenant must accept all Offered Space offered by Landlord at any
one time if it desires to accept any of such Offered Space and may not exercise
its right with respect to only part of such space. In addition, if Landlord
desires to lease more than just the Offered Space to one tenant, Landlord may
offer to Tenant pursuant to the terms hereof all such space which Landlord
desires to lease, and Tenant must exercise its rights hereunder with respect to
all such space and may not insist on receiving an offer for just the Offered
Space.
(e) If Tenant at any time declines any Offered Space offered by
Landlord, Tenant shall be deemed to have irrevocably waived all further rights
under this Addendum concerning that Offered Space, and Landlord shall be free to
lease the Offered Space to third parties including on terms which may be less
favorable to Landlord than those offered to Tenant. Notwithstanding the
foregoing, in the event Tenant waives its rights hereunder and Landlord is
subsequently willing to lease the Offered Space for less than 90% of the
net effective rent set forth in the Offer Notice, Landlord shall revise the
First
Offer Notice to reflect such terms and submit a Revised Offer Notice (the
"Revised Offer Notice") to Tenant. The procedures with respect to the Revised
Offer Notice shall be the same as those respecting the Offer Notice as set forth
above.
(f) Landlord shall not be required to give Tenant more than one
First Offer Notice in any 9 month period for any specific space.
ADDENDUM V-1
RIGHT OF FIRST OFFER (SALE OF BUILDING 6)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 16, 1996 BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
(a) "Offered Building" shall mean Building ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
(b) During the Initial Term hereof, and provided that as of the date
of the giving of Landlord's Notice, (x) Tenant is the Tenant originally named
herein, (y) Tenant actually occupies not less than 50% of the Premises
originally demised under this Lease and any premises added to the Premises, and
(z) no Event of Default or event which but for the passage of time in the giving
of notice, or both, would constitute an Event of Default has occurred and is
continuing, if at any time Landlord desires to sell the Offered Building
separately from any other building, then Landlord, before offering such Offered
Building to anyone, shall offer to Tenant the right to purchase the Offered
Building on the same terms and conditions upon which Landlord intends to offer
the Offered Building for sale.
(c) Such offer shall be made by Landlord to Tenant in a written
notice (hereinafter called the "First Offer Notice") which offer shall designate
the space being offered and shall specify the terms which Landlord intends to
offer with respect to the Offered Building, which may be set forth in Landlord's
standard form of sale contract. Tenant may accept the offer set forth in the
First Offer Notice by delivering to Landlord an unconditional acceptance
(hereinafter called "Tenant's Notice") of such offer within 15 business days
after delivery by Landlord of the First Offer Notice to Tenant. Time shall be of
the essence with respect to the giving of Tenant's Notice. If Tenant does not
accept (or fails to timely accept) an offer made by Landlord pursuant to the
provisions of this Addendum with respect to the Offered Building designated in
the First Offer Notice, Landlord shall be under no further obligation with
respect to such space by reason of this Addendum, except as provided in
paragraph (e) below.
(d) If Tenant at any time declines any Offered Building offered by
Landlord, Tenant shall be deemed to have irrevocably waived all further rights
under this Addendum, and Landlord shall be free to lease the Offered Building to
third parties including on terms which may be less favorable to Landlord than
those offered to Tenant. Notwithstanding the foregoing, in the event Tenant
waives its rights hereunder and Landlord is subsequently willing to sell the
Offered Space for less than 90% of the net effective economic terms set forth in
the Offer Notice, Landlord shall revise the First Offer Notice to reflect such
terms and submit a Revised Offer Notice (the "Revised Offer Notice") to Tenant.
The procedures with respect to the Revised Offer Notice shall be the same as
those respecting the Offer Notice as set forth above.
(e) Section 1031 Exchange. In the event Tenant and Landlord enter
into an Agreement of Purchase and Sale pursuant to this Addendum, Tenant agrees
that Landlord may consummate the sale of the Property as part of a so-called
like kind exchange (the "Exchange") pursuant to Section 1031 of the Internal
Revenue Code of 1986, as amended (the "Code"), provided that: (i) the Closing
shall not be delayed or affected by reason of the Exchange nor shall the
consummation or accomplishment of the Exchange be a condition precedent or
condition subsequent to Landlord's obligations under this Agreement; (ii)
Landlord shall effect the Exchange through an assignment of this Agreement, or
its rights under this Agreement, to a qualified intermediary; (iii) Landlord
shall pay any additional costs that would not
otherwise have been incurred by Landlord or Tenant had Landlord not consummated
its purchase through the Exchange. Tenant shall not by this agreement or
acquiescence to the Exchange (i) have its rights under the Purchase Agreement
affected or diminished in any manner or (2) be responsible for compliance with
or be deemed to have warranted to Landlord that the Exchange in fact complies
with Section 1031 of the Code.
Exhibit 1
STANDARD SPECIFICATIONS
AND TENANT IMPROVEMENTS
I. BUILDING SHELL:
GENERAL REQUIREMENTS
The Building Shell shall include the design and construction of exterior
site work, utility lines installed to the building (other than electric lines as
described below), landscaping, parking and truck court areas, building
foundation systems and slab, walls, and roof system. The total area of the shell
and building pad area will be as shown on the Final Plans previously sent to and
approved by Tenant.
The Building Shell shall exclude all interior improvements and related
design fees unless otherwise noted herein.
CLEAR HEIGHT
The clear height of the Building shall be 24' 0" to the bottom of the
deepest structural membrane.
LANDSCAPING
The Building Shell shall include landscaping as determined by Landlord;
however, with respect to the Detention Pond area, the Building Shell shall
include landscaping substantially similar to that shown by the Detention Pond
Landscape Plan previously agreed upon by Landlord and Tenant.
CONCRETE SLAB FLOOR
Flatness and levelness criteria of the flat areas (areas other than
those requiring drains and curvature) of the floor shall conform to the
following criteria:
Floor Flatness: FP - 25 minimum
Floor Levelness: FL - 25 minimum
Concrete slab floors shall be reinforced with a mat of deformed
reinforcing bars placed at mid-depth of the slab as designed by the project
structural engineer. Slabs shall be poured over a prepared base of compacted
aggregate base course material per the recommendations of the project
geotechnical engineer. Concrete strength shall be a minimum of 4,000 psi.
ADDENDUM VI
CANCELLATION OPTION
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 16, 1996, BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
Provided (i) no Event of Default shall then exist and no condition shall
then exist which with the passage of time or giving of notice, or both, would
constitute an Event of Default; and (ii) Tenant has entered into a binding lease
with Landlord (the "Replacement Lease") for the equivalent or greater square
footage as leased hereunder in the Austin metropolitan service area, for a term
of at lease five (5) years, Tenant shall have the right at any time to send
Landlord written notice (the "Termination Notice") that Tenant has elected to
terminate this Lease effective on the commencement date of the Replacement
Lease.
If Tenant elects to terminate this Lease pursuant to the immediately
preceding sentence, the effectiveness of such termination-shall be conditioned
upon Tenant paying to Landlord, contemporaneously with Tenant's delivery of the
Termination Notice to Landlord, the estimated amount of unamortized Tenant
Improvements and brokerage commissions paid by Landlord in connection with this
Lease as of the Replacement Lease commencement date. Such amount is
consideration for Tenant's option to terminate and shall not be applied to rent
or any other obligation of Tenant and shall be adjusted between Landlord and
Tenant when the actual amount is determinable. Landlord and Tenant shall be
relieved of all obligations accruing under this Lease after the effective date
of such termination but not any obligations accruing under the Lease prior to
the effective date of such termination.
Landlord shall negotiate the terms of a Replacement Lease, including a
"build to suit lease", requested by Tenant in good faith.
ADDENDUM VII
STORAGE AND USE OF PERMITTED MATERIALS
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED April __, 1996, BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS, INC.
1. Permitted Hazardous Materials and Use.
Tenant has requested Landlord's consent to use the Hazardous Materials
listed below is its business at the Premises (the "Permitted Hazardous
Material"). Subject to the conditions set forth herein, Landlord hereby consents
to the Use (hereinafter defined) of the Permitted Hazardous Materials. Any
Permitted Hazardous Materials on the Premises will be generated, used, received,
maintained, treated, stored, or disposed in a manner consistent with good
engineering practice and in compliance with all Environmental Requirements.
Permitted Hazardous Materials (including maximum quantities):
See Preliminary List set forth on Addendum VII-1. Tenant shall
update the Preliminary List with current quantities and such updated list shall
be attached hereto as a precondition to delivery of possession to Tenant. Tenant
may substitute comparable materials in comparable quantities which are
incidental .to Tenant's electroplating process without notice to Landlord, and
may substitute other comparable materials and quantities used in the
electroplating process with Landlord's prior written approval, which shall not
be unreasonably withheld, conditioned or delayed.
The storage, uses, or processes involving the Permitted Hazardous
Materials (the "Use") are described below.
Use [If limited to receiving and storage, so specify]
Tenant shall provide a description of its use of the Permitted
hazardous Materials and such description shall be attached hereto as a
precondition to delivery of possession to Tenant. Tenant has submitted a
description of its use to Landlord identified as "Level II Electropolishing
General Practices 7/05/95 Revision B (11/95) pages 1-6, 12 and Schedule K-1."
Tenant shall operate in accordance with such guidelines until guidelines are
prepared for operations conducted within the Premises.
Tenant represents and warrants to Landlord that it is not is the
business of manufacturing, processing, storing, transporting or disposing of
Hazardous Materials outside the scope of Tenant's electroplating process.
2. No Current Investigation. Tenant represents and warrants to the
best of its current actual knowledge that it is not currently subject to as
inquiry, regulatory investigation, enforcement order, or any other proceeding
regarding the generation, use, treatment, storage, or disposal of a Hazardous
Material.
3. Notice and Reporting. Tenant immediately shall notify Landlord
in writing of any spill, release, discharge, or disposal of any Hazardous
Material in, on, or under the Premises or the Project. All reporting obligations
imposed by Environmental Requirements are strictly the responsibility of Tenant.
Tenant shall supply to Landlord within 5 business days after Tenant first
receives or sends the same, copies of all claims, reports, complaints, notices,
or asserted violations relating in any way to Tenant's use of the Premises.
4. Indemnification. Tenant's indemnity obligation under the Lease
with respect to Hazardous Materials shall include for the liabilities, expenses
and other losses described therein as a result of the Use of the Hazardous
Materials or the breach of Tenant's obligations or representations set forth
above. It is the intent of this provision that Tenant be strictly liable to
Landlord as a result of the Use of Hazardous Materials without regard to the
fault or negligence of Tenant, Landlord or any third, party.
5. Disposal Upon Lease Termination. At the expiration or earlier
termination of the Lease, Tenant, at its sole coat and expense shall: (i) remove
and dispose off-site any drums, contains, receptacles, structures, or tanks
storing or containing Hazardous Materials (or which have stored or contained
Hazardous Materials) and the contents thereof; (ii) remove, empty, and purge all
underground and above ground storage tank systems, including connected piping,
of all vapors, liquids, sludges and residues; and (iii) restore the Premises to
its original condition. Such activities shall be performed in compliance with
all Environmental Requirements and to the reasonable satisfaction of Landlord.
Landlord's satisfaction with such activities or the condition of the Premises
does not waive, or release Tenant from, any obligations hereunder.
ADDENDUM VII-1
PERMITTED HAZARDOUS MATERIALS LIST
Item Qty Units Chemical Mixture
---- ----- ----- ----------------
#1 3000 gal Phosphoric Acid (64%)
Sulfuric Acid (25%)
Water (11%)
#2 250 gal Phosphoric Acid (5%)
Sulfuric Acid (5%)
Water (90%)
#3 250 gal Nitric Acid (10-20%)
Water (80-90%)
#4 500 gal Nitric Acid (10-20%)
Ammonium Hydroxide
Fluoride (3%)
Water (80%)
#5 250 gal Sodium Hydroxide (10%)
Water (90%)
#6 500 gal Sodium Hydroxide
#7 100 gal Magnesium Hydroxide (51-55%)
Water (45-49%)
#8 20 gal Acetone
#9 10 gal Isopropyl Alcohol
EXHIBIT 2
TENANT IMPROVEMENT SCOPE OF WORK
I. GENERAL CONDITIONS.
Tenant's long-range plan is to occupy the entire 70,400 sf of space (the "Total
Space"). The Tenant's initial objective is to occupy approximately 40,000 sf
(the "Initial Space") of the space to operate a light manufacturing facility in
accordance with the Lease. The remaining approximately 30,400 sf (the "Expansion
Space") will be finished during the initial Tenant Improvement -'Work with a
small office and restroom facility, open-bay warehouse, climate control, and
high tray lighting.
The TI plans for the Initial Space are being developed by RTG Partners, the
architectural firm selected by Tenant and approved by SCI. Landlord and Tenant
shall review and agree upon the construction documents for the Tenant
Improvement Work prior to commencement of its construction.
The following list shows the breakout description of how the Insync intends to
finish the Initial Space.
General open office with drop ceiling 8,000 sf
Restroom facilities for entire building. 1,600 sf
Drywall conference rooms with drop ceilings 3,000 sf
Open bay warehouse, machine shop, manufacturing; 12,000 sf
Class 100 clean room for orbital welding and assembly 6,400 sf
Lobby with restroom, conference room & interview rooms 2,500 sf
Utility rooms, closets and file rooms 5,000 sf
Electropolish area with chemical tanks 1,500 sf
STANDARD SPECIFICATIONS
Page 2
CONCRETE TRUCK COURTS
The truck courts at the west end of the building shall be 6" thick
cast-in-place concrete slabs, reinforced with #3 deformed reinforcing bars
placed at 18" on center. Sub-base shall be prepared per the recommendations of
the project geotechnical engineer.
ASPHALT PAVING
Asphalt paved areas serving automobiles shall be prepared and paved in
accordance with the project geotechnical engineer.
ROOF SYSTEM
The roof system shall be comprised of a 4-ply built-up, roof system.
Standards for fastening and prevention of uplift shall conform to 1-90
specifications. The roof structure shall slope 1/4" per foot to ensure positive
drainage. Installation of the roofing system shall be inspected according to
commercially reasonable standards by an independent testing firm.
DOCK DOORS AND EQUIPMENT
The Building Shell shall include manually-operated heavy-duty industrial
steel overhead doors mounted on heavy-duty steel "vertical" tracks with torsion
spring counterbalances. Dock doors shall be 10' 0" wide by 10' 0" tall. All
other dock equipment shall be a Tenant Improvement.
EXTERIOR FINISHES
The exterior of the building shall be of tilt-up concrete construction.
Except at otherwise provided in the Lease, design of the exterior of the
facility shall be as reasonably determined by Landlord.
FIRE SUPPRESSION SYSTEM
Except as otherwise noted, the fire suppression system shall be part of
the Building Shell. Except as otherwise required by Applicable Laws, the fire
suppression system in the warehouse area shall be an ESFR sprinkler system
designed and installed in accordance with NFPA, UBC and local ordinances.
The current building has been designed to accommodate Class 4
non-combustible commodity. Any underground fire line and associated hydrants
that are required to be placed onsite shall be part of the Building Shell.
STANDARD SPECIFICATIONS Page 3
Those portions of the fire suppression system directly attributable to
the Tenant Improvements shall be charged against the Tenant Improvements.
Additionally, all fire hose cabinets and portable fire extinguishers required
under NFPA, UBC and local ordinance shall also be charged against the Tenant
Improvements.
ELECTRICAL AND MECHANICAL SYSTEMS
The Building Shell work shall include but be limited to the design and
installation of a 1,200-amp, 480/277-volt, 3-phase main service electrical
system; including main switch gear and a house sub-panel to the electrical room.
All power distribution from the main switchgear to all subpanels shall be a part
of the tenant improvements.
The design and installation of all mechanical and ventilation systems
shall be a part of the Tenant Improvements.
SECURITY AND EXTERIOR LIGHTING
Exterior security lighting for the building shall be a part of the
Building Shell. The sprinkler system monitoring alarm shall be part of the
Building Shell.
II. TENANT IMPROVEMENTS
The tenant improvement funds provided by SCI are intended for use only
in the physical construction of the interior improvements of the facility and
fees associated with design and engineering costs. Prohibited uses include but
are not limited to costs of moving, furnishings, equipment, temporary occupancy
of other space, and consulting other than for the design and construction of the
project.
It is the intent of the parties that the Tenant Improvement allowance
may be used only for items materially consistent with the scope of work shown on
the Tenant Improvement Scope of Work attached as Exhibit 2 to the Construction
Addendum. Landlord shall have the right to refuse to disburse any portion of the
Tenant Improvement Allowance if in Landlord's reasonable opinion the work which
is the basis for the disbursement request does not materially conform to the
Tenant Improvement Scope or is not consistent with the preceding paragraph. If
the Landlord does not disburse the entire Tenant Improvement Allowance to Tenant
pursuant to the terms of the Lease, then the amount not used shall be retained
by Landlord and Tenant's TI Amortization will be reduced accordingly.
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "Amendment") is entered into as of the 12th
day of December, 1996 by and between SECURITY CAPITAL INDUSTRIAL TRUST (the
"Landlord") and INSYNC SYSTEMS, INC. (the "Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant entered into a Lease dated as of April 16th, 1996
pursuant to which Landlord has leased to Tenant certain premises aggregating
70,400 square feet located at ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇, ▇▇▇▇▇▇, ▇▇▇▇▇
(the "Lease").
WHEREAS, Landlord and Tenant desire to modify certain terms and conditions of
the Lease to reflect the foregoing as set forth below.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant agree as follows:
1. All capitalized terms used but not defined herein which are defined in
the Lease shall have the same meaning herein as in the Lease.
2. Landlord hereby consents to Tenant's request to cause the ornamental
ironwork on the Building to be painted the shade of red known as PMS 185 ("Red")
on the following conditions:
20. (i) Any premium charged by the shell building contractor for changing
the color of the exterior ornamental iron shall be paid by Tenant;
21. (ii) For maintenance purposes, Landlord shall have the right to repaint
the exterior ornamental iron (Red) every two years, for the term of the
Lease. The painting shall be performed by one of Landlord's approved
painting contractors and the expense incurred by Landlord in repainting
the iron shall be an operating expense for the building in accordance
with Section 6 of the Lease;
22. (iii) At the end of the Lease term Landlord shall have the exterior
ornamental iron repainted to match color of Corridor Park Corporate
Center 4 and 5 or Landlord's then standard corporate green logo color.
The painting shall be performed (at Tenant's sole expense) by one of
Landlord's approved painting contractors.
3. Landlord and Tenant agree that the Landlord's sign criteria, attached
hereto as Exhibit A, is hereby fully incorporated into the Lease and the parties
shall be bound as set forth therein, except that Tenant shall be allowed to
install an illuminated sign of the design and specifications attached as Exhibit
B. The expense of installing this sign shall be borne solely by Tenant; however,
to help defray the cost of complying with the design of such sign, Landlord
hereby waives Tenant's Base Rent obligation for the period of October 22,1996
through October 31, 1996. Tenant shall remove the illuminated temporary sign
currently installed on the building by January 20, 1997 and shall effect the
installation of the new illuminated sign by January 20, 1997.
4. Insofar as the specific terms and provisions of this Amendment purport
to amend or modify or are in conflict with the specific terms, provisions and
exhibits of the Lease, the terms and provisions of this Amendment shall govern
and control; in all other respects, the terms, provisions and exhibits of the
Lease shall remain unmodified and in full force and effect.
5. Landlord and Tenant hereby agree that (a) this Amendment is incorporated
into and made a part of the Lease, (b) any and all references to the Lease
hereinafter shall include this Amendment, and (c) the Lease and all terms,
conditions and provisions of the Lease are in full force and effect as of the
date hereof, except as expressly modified and amended hereinabove.
IN WITNESS WHEREOF, the parties hereto have signed this First Amendment to Lease
as of the day and year first above written.
Landlord: Tenant:
-------- ------
SECURITY CAPITAL INDUSTRIAL TRUST INSYNC SYSTEMS, INC., a California
corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------- ----------------------------
Title: Senior Vice President Title: President, COO
-------------------------- ----------------------------
EXHIBIT A
SIGN SPECIFICATIONS
ATTACHED TO AND A PART OF THE LEASE AGREEMENT DATED_____, 1996, BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
INSYNC SYSTEMS. INC.
Per Paragraph 13, Signage at your project is subject to restrictions as noted
below. This is controlled to maintain a consistent overall visual appeal of the
building. You may install white vinyl lettering on your front door, or the glass
next to the front door, with your company name only. The lettering may not
exceed 4" in height. No other storefront graphics are allowed. Alternatively,
you may install one exterior sign which meets the standard sign specifications
for your building. The standard sign specification for Corridor Park Corporate
Center is as follows:
I. INTRODUCTION
The intent of this sign criteria is to establish and maintain
guidelines consistent with the signage policies of the Landlord
and the City or County as appropriate. Further, the purpose is
to assure a standard conformance for the design, size,
fabrication techniques, and materials for signage for the
project and for tenant identification.
II. GENERAL REQUIREMENTS
23. A. Each Tenant will be supplied a copy of the sign
criteria prior to lease agreement.
24. B. Each Tenant sign shall be designed, fabricated and
installed in accordance with this sign criteria and
consistent with the Sign Code of the City or County as
amended from time to time by the governing authority.
25. C. Landlord's written approval of Design Drawings, and
Working Shop Drawings is required prior to the
commencement of Tenant construction.
26. D Sign permits must be obtained from the City or County
prior to installation of signage.
27. E. Signs installed without written approval of the
Landlord or the appropriate city permit maybe subject to
removal and proper reinstallation at Tenant's expense.
Damage may be assessed to cover costs of repairs to sign
band or removal of signage resulting from unapproved
installations.
28. F. Tenant and his sign contractor shall repair any
damage caused during installation of signage.
29. G. No labels shall be permitted on the exposed surface
of signs, except those required by local ordinance.
Those required must be installed in an inconspicuous
location.
30. H. Flashing, strobing, moving or audible signs are not
permitted.
31. I. No window signs with the exception of suite numbers
are permitted without the express approval of Landlord.
32. J. No portable signs are to be displayed on site.
33. K. No secondary exterior signs are to be placed on
building wall elevations.
34. L. No freestanding and/or pylon type exterior signs will
be permitted without Landlord's prior approval.
III. TENANT RESPONSIBILITIES
Each Tenant shall, at its own expense, provide and maintain its
own identification sign in accordance with specifications noted
herein.
IV. FASCIA-MOUNTED EXTERIOR SIGN
35. A. A sign fascia area will be provided for each Tenant
at the panels above the storefront lease line. Each
Tenant sign and/or logo sign shall be mounted in this
space in conformance with the attached sign exhibits.
Refer to Exhibits "A" and "A-1."
36. B. Each Tenant will be allowed to have only one
wall-mounted sign. Any variance to the quantity, size,
mounting method will be allowed only upon Landlord's
written approval.
37. C. The sign panel shall be a .080 aluminum pan type sign
with an acrylic urethane finish. The specified size of
the sign shall be:
(1) 4'x 10' (on 12' face panel)
(2) 4'x 12' (on 18'& 20' face panels)
The Tenant I.D. sign cannot exceed 80% of the building
wall panel space available.
38. D. The sign panel shall have 90-degree corners and 1"
flanges. The sign background color will be painted to
match the accent band on the building. The background
color of the sign will be visible on at least one-half
of the sign or as approved by SCI.
39. E. The program allows for the use of a corporate logo
and letter styles at the discretion of the Tenant. Final
approval of logo and letter style will be by the
Landlord. The logo colors are optional, however care
must be taken to select colors and images that will be
comparable and legible on the specified
background. The color of the lettering identifying the
Tenant will be PMS 343 (green) or as approved by the
Landlord.
40. F. Sign layouts and colors must have written approval by
the Landlord prior to fabrication. The logo, when
applicable, will not exceed more than 50% of the sign
face.
41. G. There are two approved methods for applying the copy
to the sign background:
(1) Acrylic urethane
(2) Vinyl (high performance -- seven year grade)
42. H. A margin equal to at least one-half of the height of
the type should appear to the left, right, top and
bottom of the Tenant name. Margin parameters will not
apply to the logo area of the sign. Neutral space
between a two line sign shall be a minimum of one-third
the height of the letter type. The sign panel will be
mounted on the building face in conformance with
Landlord standards; mounting clips (minimum 1/8" x 1" x
1" x 2" long aluminum angle w/ red head anchors -- no
Kwick bolts allowed), no exposed fasteners through the
face of the sign panel. The correct design, construction
and mounting of the sign panel. The correct design,
construction and mounting of the sign is the
responsibility of the Tenant and the sign contractor.
Any signage that is constructed/installed improperly
shall be removed and corrected and reinstalled by the
Tenant/Contractor at their expense.
43. I. All signs erected within the City of Austin and the
extra territorial jurisdiction that describe the
location of a business will require a sign permit. Sign
permits will require payment for:
(1) Site Inspection
(2) Construction Permit
(3) Application Fee
These costs are the responsibility of the Tenant.
Licensed sign contractors/companies are required to
acquire these permits prior to installation of the sign.
Failure to acquire permits will not release the Tenant
from responsibility to acquire a permit for the sign.
44. J. All Copy shall be installed vertically and
horizontally, centered on sign band fascia, and shall
not exceed a horizontal length of 80 percent of
allowable fascia panel.
V. MONUMENT SIGN
Monument sign will be provided by the Landlord. Tenant shall pay
to provide Tenant sign letters to match Landlord standards.
Refer to Exhibit "C."
VI. MISCELLANEOUS SIGNAGE
45. A. Front Door Signage: Business name, address and
operating hours shall be white vinyl in Landlord
approved letter style. Landlord to approve all front
door signage prior to installation.
46. B. Dock Door Numbers: Provided by Landlord. Refer to
Exhibit "B."
47. C. Suite Signs: Provided by Landlord. Refer to Exhibit
"D."
48. D. Building Address: Provided by Landlord. Refer to
Exhibit "A."
VII. TENANT SIGN SUBMISSIONS
49. A. Tenant sign contractors shall submit all Working Shop
Drawings to the Landlord or his appointed representative
for approval. Allow a minimum of ten working days, or
two weeks, for Landlord review and approval.
50. B. All submissions to include two (2) blueline prints.
An approved copy will be returned.
51. C. Shop Drawings must include:
(1) Full and complete dimensions
(2) Letter style, face (color, material and thickness),
returns (color, material and thickness).
VII. APPROVALS
No sign shall be installed without first securing the necessary
permits from the appropriate governing jurisdiction. Artwork and
sign location are to be approved in writing by the Landlord or
their appointed representative prior to installation. Landlord
reserves the right to reject any sign that does not comply with
the intent and spirit of this sign criteria.
EXHIBIT B
[DRAWING]
SECOND AMENDMENT TO LEASE AGREEMENT
BY AND BETWEEN
PROLOGIS TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST
FORMERLY KNOWN AS SECURITY CAPITAL INDUSTRIAL TRUST
AND
KINETICS FLUID SYSTEMS, INC., FORMERLY KNOWN AS INSYNC SYSTEMS, INC.
This Second Amendment to Lease Agreement is made and effective this 7th of July,
2000, by and between ProLogis Trust, formerly known as Security Capital
Industrial Trust (hereinafter, "Landlord") and Kinetics Fluid Systems, Inc.,
formerly known as Insync Systems, Inc. (hereinafter, "Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant previously entered into that certain Lease
Agreement dated the 16th day of April, 1996 and that certain First Amendment to
Lease dated the 12th day of December, 1996 (collectively the "Lease") providing
for the leasing by Landlord to Tenant of certain office/warehouse space
containing 70,400 square feet in ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ #▇,
located at ▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Premises");
and
WHEREAS, Landlord and Tenant desire to modify certain terms and
conditions set forth in the Lease;
NOW, THEREFORE, pursuant to the foregoing, and in consideration of
mutual covenants and agreements contained herein, the Lease is modified and
amended as set forth below:
1. Effective June 1, 2000, the Lease shall be extended for
sixty-seven (67) months (the "Extension Period") thus amending
the expiration date of the Lease Term to May 31, 2007.
2. With respect to the monthly Base Rent, the Lease shall be
amended to reflect the following:
The monthly Base Rent shall be as follows:
June 1, 2000 - October 31, 2001 $29,352.40 per month
November 1, 2001 - May 31, 2003 $32,161.56 per month
June 1, 2003 - May 31, 2005 $35,681.56 per month
June 1, 2005 - May 31, 2007 $39,201.56 per month
3. With respect to the condition of the Premises, Landlord will
provide an allowance of $2.00 per square foot ($140,800) for
construction of additional office space by Tenant. The
construction shall be governed by Paragraph 12 of the Lease
entitled "Tenant-Made Alterations".
4. With respect to the existing balance of unamortized above
standard improvement allowance of $454,093.32, Landlord agrees
to amortize the balance over the Extension Period at an interest
rate of 10.75%, for a monthly payment of $7,642.12. Landlord
further agrees to provide an additional $2.00 per square foot
($140,800.00) to be used for construction of additional office
space by Tenant. The additional allowance will be amortized by
Landlord over the Extension Period at an interest rate of 13%
for a monthly payment of $2,533.98, so that Tenant's total
payment of amortized above standard tenant improvements shall be
$10,181.10 per month, each installment to be due and payable on
the first day of each month along with the monthly Base Rent and
estimated Operating Expense payments.
5. With respect to the Security Deposit, Tenant will be required to
post an additional Security Deposit in the form of a Letter of
Credit for $304,400.00. The Letter of Credit shall be
irrevocable and of the form described in Addendum 11 to the
Lease. Provided Tenant is not in default under the terms of the
Lease, the amount of the Letter of Credit shall be reduced by
$60,880.00 annually, beginning on June 1, 2001.
6. Tenant, at Tenant's sole cost and expense, shall be allowed to
install additional landscaping, tables and benches at the South
end of the Building, according to a plan approved in advance by
Landlord.
7. Landlord shall install three (3) picnic tables with umbrellas in
the detention pond to the East of the building. Landlord will
provide the picnic tables, and Tenant acknowledges that in the
event that either the City of Round Rock or Corridor Park
Improvement Association requires their removal, Landlord shall
be under no further obligations with regards to the picnic
tables. Landlord shall also install, at its sole cost and
expense, ten (10) shade trees and some grass around the picnic
tables.
8. Addendum VI (Cancellation Option) is hereby deleted in its
entirety and shall be of no further force and effect.
IT IS HEREBY AGREED BY THE PARTIES HERETO that with the exception of
those terms and conditions specifically modified and amended herein, the herein
referenced Lease shall remain in full force and effect in accordance with all
its terms and conditions. In the event of any conflict between the provisions of
the Lease and the provisions of this Second Amendment, the provisions of this
Second Amendment shall supersede and control.
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment to Lease Agreement as of the day and year first above written.
LANDLORD: TENANT:
PROLOGIS TRUST, KINETICS FLUID SYSTEMS, INC.
a Maryland real estate investment trust
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------------- ------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director ▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President