Attached files
EXHIBIT 10.14
LEASE
THIS
LEASE is entered into to be effective on the 1st day of July, 1987, by and
between B.S.
ENTERPRISES, a California general partnership (hereinafter referred to as
“Lessor”) and DATA CIRCUIT SYSTEMS, INC., a California corporation (hereinafter
referred to as “Lessee”).
1. Premises: The Lessor
hereby leases to the Lessee and the Lessee hereby hires from Lessor for the
term, at the rental and upon the covenants and conditions hereinafter set forth,
the premises, sometimes hereinafter referred to as the “Leased Premises”, more
particularly described in Exhibit A, attached hereto and incorporated herein by
reference, and commonly known as 335-A and 335-B Turtle Creek
Court, in the City of San Jose, County of Santa Clara, State of
California, which premises consist of real property improved with a building and
site improvements. Upon the availability of
335-C and 335-D Turtle Creek Court, Lessor shall lease said portion of
the Leased Premises to Lessee upon the terms and conditions contained
herein.
2. Rental: Lessee shall
pay to Lessor without deduction, set off, prior notice or demand, as rental in
advance on the first day of each month during the term hereof the sum of $5,100.00 per month.
Lessee shall pay to Lessor monthly the sum of $2,210.00 for 335-D
and $2,853.28 for
335-C upon the possession by Lessee of said portions of the Leased
Premises.
3. Term: The term of
this Lease shall be for a period of five (5) full years commencing on the 1st day of July,
1987, and ending on the 30st day of June,
1992.
4. Option to Renew:
Lessee shall have the option to extend the term of this Lease for a total of
four (4) additional five (5) year terms following expiration of the initial term
as provided in Paragraph 3 hereinabove. Lessee shall exercise its option by
giving notice of exercise of the option (the “option notice”) to Lessor at least
six (6) months before the expiration of the initial term. With respect to any
further renewal, Lessee shall give the option notice to Lessor at least six (6)
months before the expiration of the additional renewal term. Notwithstanding the
foregoing, if Lessee is in default of this Lease on the date of giving the
option notice, the option notice shall be totally ineffective, or if Lessee is
in default on the date the extended term is to commence, the extended term shall
not commence and this Lease shall expire at the end of the initial term or the
previously extended term, as the case may be. The monthly rent for the extended
term shall be as determined by the mutual agreement of the parties; provided,
however, if the parties cannot so agree, then such monthly rent shall be equal
to the sum of: (i) the monthly rent in effect for the previous term and (ii) the
percentage increase in the Consumer Price Index (CPI) from the first month of
the previous term to the first month of the newly renewed term multiplied by the
monthly rent in effect for the previous term.
5. Use: Lessee shall use
the premises for any lawful purpose.
6. Utilities: Lessee
shall pay for all water, sewage removal, fuel, gas, oil, heat, electricity,
power, telephone, janitorial, landscaping and all other materials and services
which may be furnished to or used in or about said premises during the term of
this Lease.
7. Taxes:
A. Real Property.
Commencing on the lease commencement date and continuing for the entire term of
this Lease as part of the consideration of this Lease and as additional rent
hereunder, Lessee covenants and agrees to pay and discharge or cause to be paid
and discharged promptly as the same become due and before delinquency, all
taxes, assessments, rents and charges, license fees, municipal liens, levies,
excise or imposts, whether general or special, ordinary or extraordinary,
imposed by any governmental or quasi-governmental authority pursuant to law
directly as a result of ownership of the Leased Premises located thereon which
may be levied, assessed, charged or imposed, or may be or become a lien or
charge upon the Leased Premises, or any part thereof or upon the leasehold or
the estate hereby created, or upon the Lessor solely by reason of its ownership
of the Leased Premises including without limitation any license or privilege fee
or tax based and/or measured solely by the rentals due Lessor
hereunder; provided, however, that nothing herein contained shall be construed
as imposing upon Lessee any obligation to pay any estate, inheritance,
succession, capital levy or transfer tax of the Lessor growing out of or levied
in connection with this Lease or the right in the Leased Premises or any tax
measured by or based upon the net income of Lessor.
(1) Any
sums above required to be paid by Lessee, which shall relate to a fiscal year
during which the term of this Lease shall commence or terminate shall be
prorated between Lessor and Lessee as of the date of such commencement or
termination. If the law expressly permits the payment of such assessments in
installments, Lessee may utilize the permitted installment method, but shall pay
each installment coming due during the term hereof with any interest thereon
before delinquency.
(2) Lessor
shall make all payments of all sums required hereunder directly to the charging
authority before delinquency and before any fine, interest or penalty shall
become due or be imposed by operation of law for their nonpayment. If the law
expressly permits the payment of any such sums in installments, Lessor may, at
Lessor’s option, utilize the permitted installment payment method, but shall pay
each installment with any interest before delinquency. Lessee shall reimburse
Lessor within ten (10) days after payment by Lessor all amounts expended under
this paragraph which relate to the Leased Premises.
B. Personal Property.
Lessee shall pay when due all taxes levied against personal property and trade
fixtures on or about the premises prior to delinquency.
8. Fire and Property Damage
Insurance: Lessor shall maintain, as the minimum coverage required of it
by this Lease, a policy or policies of fire and property damage insurance in
so-called “fire and extended coverage” form insuring Lessor (and such others as
Lessor may designate) against loss of rents for a period of not less than twelve
(12) months and from physical damage to the building and other site improvements
with coverage of not less than one hundred percent (100%) of the full
replacement value thereof. The foregoing notwithstanding, such fire and property
damage insurance, at Lessor’s election, (i) may be written in so-called “all
risk” form to include such perils as are commonly covered by such form of
coverage, (ii) may be endorsed to cover loss caused by such additional perils
against which Lessor may elect to insure, including earthquake and/or flood, and
(iii) may contain “deductibles” not exceeding One Thousand Dollars ($1,000.00)
per occurrence. Lessor shall not be required to cause such insurance to cover
any trade fixtures, leasehold improvements, or any inventory or other personal
property of Lessee. The cost of the insurance carried by Lessor pursuant to this
section and any “deductible” amount not exceeding One Thousand Dollars
($1,000.00) per occurrence paid by Lessor and excluded from the coverage of such
insurance shall be reimbursed in full by Lessee.
9. Condition of
Premises: Lessee shall, at Lessee’s sole cost and expense, maintain,
repair and keep the interior and exterior of the Leased Premises and each and
every part thereof and all appurtenances (including without limitation,
sidewalks fronting thereon, wiring, plumbing, sewage system, heating and air
cooling installations, all glazing in or bordering the Leased Premises), in good
condition and repair during the term of this Lease, damage thereto by fire,
earthquake, act of God or the elements alone excepted. In the event Lessee
should fail to make the repairs required of Lessee forthwith upon notice by
Lessor, Lessor, in addition to all other remedies available hereunder by law,
and without waiving any alternative remedies, may make the same and Lessee
agrees to repay Lessor the cost as part of the rental payable as such on the
next day upon which rent becomes due. Lessee waives all rights to make repairs
at the expense of Lessor as provided for in any statute or law which may be now
or hereafter enacted during the term of this Lease and agrees upon the
expiration of the term of this Lease or sooner termination to surrender the
Leased Premises in the same condition as received, ordinary wear and tear and
damage by fire, earthquake or act of God.
10. Compliance With Laws:
Lessee shall not commit or permit to be committed any waste upon the Leased
Premises, and shall not commit or permit to be committed any public or private
nuisance, or any other act or thing prohibited by law. Lessee, at Lessee’s sole
cost and expense, shall comply with all laws, ordinances, orders and regulations
of all governmental authorities with respect to the use and occupancy of the
premises. The judgment of any court of competent jurisdiction or the admission
of Lessee in any action or proceeding against Lessee, whether Lessor be a party
thereto, or not, that Lessee has violated any such law, ordinance, requirement
or order in the use of the Leased Premises, shall be conclusive of that fact as
between Lessor and Lessee.
11. Alterations: Lessee
shall not make any alteration, addition or improvement to the Leased Premises
without first obtaining the written consent of Lessor. All such approvals,
additions and improvements,
including fixtures, made to or on the Leased Premises, except unattached
movable business fixtures, shall be made at the sole cost and expense of Lessee
and, upon completion, shall be the property of Lessor and shall become part of
the Leased Premises and be surrendered to Lessor. Lessee shall provide Lessor
with ten (10) days written notice before Lessee begins any such work, in order
to allow Lessor adequate time to post notices of non-responsibility. Lessor
shall notify Lessee within thirty (30) days before the end of this term whether
Lessor desires to have Lessee remove all or any part of the alterations or
improvements and to restore the Leased Premises to the condition existing prior
to the alterations and improvements and Lessee shall remove all required items
at Lessee’s sole cost and expense prior to expiration of the term of this
Lease.
12. Liens: Lessee shall
keep the Leased Premises and building of which the Leased Premises are a part,
free and clear of any liens and shall indemnify, hold harmless and defend Lessor
from any liens and encumbrances arising out of any work performed or materials
or labor furnished by or at the direction of Lessee. In the event any lien is
filed, Lessee shall do all acts necessary to discharge any lien within ten (10)
days of filing, or if Lessee desires to contest any lien, then Lessee shall
deposit with Lessor such security as Lessor shall demand to insure the payment
of the lien claim. In the event Lessee shall fail to pay any lien claim when due
or shall fail to deposit the security required hereunder with Lessor, then
Lessor shall have the right to expend all sums necessary to discharge the lien
claim, and Lessee shall pay as additional rental, when the next rental payment
is due, all sums expended by Lessor in discharging any lien, including
attorneys’ fees and costs.
13. Entry: Lessor and
Lessor’s agents may enter upon the Leased Premises at all reasonable times to
inspect the same, to show the Leased Premises to a prospective purchaser or
Lessee, or to make any changes or alterations or repairs, including the erection
and maintenance of scaffolding, canopies and other structures as may be needed,
which Lessor shall deem necessary for the protection, improvement or
preservation of the Leased Premises, or to post any notice provided for by law,
or otherwise to protect any and all rights of Lessor without any liability to
Lessee for damages or any abatement of rental. Nothing contained in this
paragraph 13 shall be construed to obligate Lessor to make any such changes,
alterations or repairs. Lessee further agrees that at any time after one hundred
twenty (120) days prior to the termination of this Lease, Lessor may place
thereon any usual or ordinary “To Let” or “To Lease” signs.
14. Assignment and
Subletting: Lessee shall not sublet or assign any portion or interest in
this Lease without first obtaining the written consent of Lessor, which consent
shall not be unreasonably withheld. In the event of an attempted subletting or
assignment without obtaining such consent, said subletting or assignment shall,
at the option of the Lessor be void. Such assignment or subletting shall
further, at the option of Lessor, be deemed a breach of this Lease.
15. Indemnification:
Lessee shall hold harmless, indemnify and defend Lessor from all liability,
penalties, losses, damages, costs, including reasonable attorneys’ fees and
other costs of suit, expenses, causes of action, claims and/or judgments arising
by reason of any injury or death to any person or persons, or damage to the
property of any person or persons, (including without limitation, Lessee and
Lessee’s servants, agents and employees), from any cause or causes whatsoever,
while said person’s property are in, upon or in any way connected with the
Leased Premises, during the term of this Lease or any occupancy
hereunder.
Lessee,
as a material part of the consideration to be rendered to Lessor, hereby waives
all claims against Lessor for damages to goods, wares and merchandise in, upon
or about said Leased Premises and for injuries to Lessee, his agents, or third
persons in or about said Leased Premises from any cause arising at any
time.
16. Insurance: Lessee
shall secure and maintain at its own expense during the term of this lease
comprehensive public liability insurance with combined single limit coverage of
One Million Dollars ($1,000,000.00). The coverage of Lessee’s liability
insurance shall be primary and in addition to any carried by Lessor. Said
insurance shall be in a company or companies qualified to do business in the
State of California and satisfactory to Lessor and shall designate Lessor as an
additional named insured thereunder and shall provide for ten (10) days notice
to Lessor prior to cancellation or termination thereof. Lessee shall furnish
evidence satisfactory to Lessor that such insurance has been obtained and that
the premiums have been paid as required.
17. Waiver of
Subrogation: The parties hereto release each other, and their respective
agents, employees, and contractors, from any claims for injury to any persons or
damage to property that are caused by or result from risks insured against under
any insurance policies carried by the parties and in force at the time of such
damage, but only to the extent such claims are covered by such insurance. This
release shall be in effect only so long as the applicable insurance policies
contain a clause to the effect that this release shall not affect the right of
the insured to recover under such policies. Each party shall cause each
insurance policy obtained by it to provide that the insurance company waives all
rights of recovery by way of subrogation against either party in connection with
any damage covered by such policy so long as such waiver is available without
unreasonable additional cost.
18. Default: In the event
of any default by Lessee, Lessor shall have the following remedies, in addition
to all other rights and remedies provided by any law or otherwise provided in
this Lease, to which Lessor may resort cumulatively, or in the
alternative:
A. Lessor
may, at Lessor’s election, keep this Lease in effect and enforce by an action at
law or in equity all of its rights and remedies under the Lease, including (i)
the right to recover the rent and other sums as they become due by appropriate
legal action, (ii) the right to make payments required of Lessee or perform
Lessee’s obligations and be reimbursed by Lessee for the cost thereof with
interest at twelve percent (12%) per annum from the date the sum is paid by
Lessor until Lessor is reimbursed by Lessee, and (iii) the remedies of
injunctive relief and specific performance to compel Lessee to perform its
obligations under this Lease.
B. Lessor
may, at Lessor’s election, terminate this Lease by giving Lessee written notice
of termination, in which event this Lease shall terminate on the date set forth
for termination in such notice. Any termination under this subparagraph shall
not relieve Lessee from its obligation to pay any sums then due Lessor or from
any claim against Lessor for damages or Monthly Rent. In no event shall any one
or more of the following actions by Lessor, in the absence of a written election
by Lessor to terminate this Lease, constitute a termination of this
Lease:
(1) Appointment
of a receiver or keeper in order to protect Lessor’s interest
hereunder;
(2) Consent
to any subletting of the Leased Premises or assignment of this Lease by Lessee,
whether pursuant to the provisions hereof or otherwise; or
(3) Any
other action by Lessor or Lessor’s agents intended to mitigate the adverse
effects of any breach of this Lease by Lessee, including without limitation any
action taken to maintain and preserve the Leased Premises or any action taken to
relet the Leased Premises or any portions thereof, for the account of Lessee and
in the name of Lessee.
C. In
the event Lessee breaches this Lease and abandons the Leased Premises, the Lease
shall not terminate unless Lessor gives Lessee written notice of its election to
so terminate this Lease. No act by or on behalf of Lessor intended to mitigate
the adverse effect of such breach, including those described by subparagraphs
B(l), (2) and (3) immediately preceding, shall constitute a termination of
Lessee’s right to possession unless Lessor gives Lessee written notice of
termination. Should Lessor not terminate this Lease by giving Lessee written
notice, Lessor may enforce all its rights and remedies under this Lease,
including the right to recover the rent as it becomes due under the Lease as
provided in California Civil Code Section 1951.4, as in effect on the effective
date of this Lease.
D. In
the event Lessor terminates this Lease, Lessor shall be entitled, at Lessor’s
election, to damages in an amount as set forth in California Civil Code Section
1951.2 as in effect on the effective date of this Lease. For purposes of
computing damages pursuant to said Section 1951.2, (i) twelve percent (12%)
interest per annum shall be used where permitted, and (ii) rent due under this
Lease shall be prorated on a monthly basis where necessary to compute such
damages. Such damages shall include without limitation:
(1) The
worth at the time of award of the amount by which the unpaid rent for the
balance of the term after the time of award exceeds the amount of such rental
loss that Lessee proves could be reasonably avoided, computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at
the time of award plus one percent (1%); and
(2) Any
other amount necessary to compensate Lessor for all detriment proximately caused
by Lessee’s failure to perform Lessee’s obligations under this Lease, or which
in the ordinary course of things would be likely to result therefrom, including,
without limitation, the following:
(i)
expenses for cleaning, repairing or restoring the Leased Premises; (ii) expenses
for altering, remodeling or otherwise improving the Leased Premises for the
purpose of reletting, including installation of leasehold improvements (whether
such installation be funded by a reduction of rent, direct payment or allowance
to a new tenant, or otherwise); (iii) broker’s fees, advertising costs and other
expenses of reletting the Leased Premises; (iv) costs of carrying the Leased
Premises, such as taxes, insurance premiums, utilities, and security
precautions; (v) expenses in retaking possession of the Leased Premises; and
(vi) attorneys’ fees and court costs incurred by Lessor in retaking possession
of the Leased Premises and in re-leasing the Leased Premises or otherwise
incurred as a result of Lessee’s default.
E. Nothing
in this paragraph shall limit Lessor’s right to indemnification from Lessee as
provided in paragraph 15.
In the
event Lessor fails to perform any of its obligations under this Lease and fails
to cure such default within thirty (30) days after written notice from Lessee
specifying the nature of such default where such default could reasonably be
cured within said thirty (30) day period, or fails to commence such cure within
said thirty (30) day period and thereafter continuously with due diligence
prosecute such cure to completion where such default could not reasonably be
cured within said thirty (3.0) day period, then Lessee shall have the following
remedies only:
A.
Lessee may proceed in equity or at law to compel Lessor to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except to the extent Lessee has waived its right to damages
resulting from injury to person or damage to property as provided
herein).
B.
Lessee, at its option, may cure any default of Lessor at Lessor’s cost. If
Lessee at any time by reason of Lessor’s default reasonably pays any sum or does
any act that requires the payment of any sum, the sum paid by Lessee shall be
immediately due from Lessor to Lessee at the time the sum is paid, and shall
bear interest at twelve percent (12%) per annum from the date the sum is paid by
Lessee until Lessee is reimbursed by Lessor.
C.
Lessee waives the provisions of Sections 1932(1), 1941 and 1942 of the
California Civil Code and/or any similar or successor law regarding Lessee’s
right to terminate this Lease or to make repairs and deduct the expenses of such
repairs from the rent due under the Lease. Lessee hereby waives any right of
redemption or relief from forfeiture under the laws of the State of California,
or under any other present or future law, in the event Lessee is evicted or
Lessor takes possession of the Leased Premises by reason of any default by
Lessee.
19. Attorneys’ Fees
Provision: Should either party commence any legal action or proceeding
against the other based on this lease, the prevailing party shall be entitled to
a reasonable amount for attorneys’ fees.
20. Destruction: In the
event of a total or partial destruction of the Leased Premises during the term
of this Lease from any cause actually covered by insurance then in full force
and effect, Lessee immediately shall give written notice thereof to Lessor and
Lessor shall to the extent of said insurance proceeds forthwith repair the same,
provided such repairs can be made within one hundred twenty (120) days after
such destruction, but such partial destruction shall in no way annul or void
this Lease. If such repairs are not so insured or cannot be made within one
hundred twenty (120) days from the date of such destruction, this Lease may be
terminated at the option of either party upon fifteen (15) days written notice
to the other party. Lessee and Lessor waive the provisions of Sections 1932(2)
and 1933(4) of the California Civil Code.
21. Condemnation:
A.
If any part of the Leased Premises be condemned for a public or quasi-public use
by right of eminent domain, with out without litigation, or transferred by
agreement in connection with such public or quasi-public uses, this Lease, as to
the part so taken, shall terminate as of the date title shall vest in the
condemnor, and the rent payable hereunder shall be adjusted so that Lessee shall
be required to pay for the remainder of the term only such portion of such rent
as the value of the Leased Premises remaining after condemnation bears to the
value of the entire premises at the date of condemnation; but in either such
event Lessor shall have the option to terminate this Lease as of the date when
title to the part so condemned vests in the condemnor.
B.
In the event so much of the Leased Premises is taken that the remainder is not
suitable for the purpose for which said premises were leased, this Lease shall
terminate as of the date of such taking.
C.
All compensation awarded upon such condemnation or taking shall belong and be
paid to Lessor and Lessee shall have no claim thereto, and Lessee hereby
irrevocably assigns and transfers to Lessor any right to compensation or damages
to which Lessee may become entitled during the term hereof by reason of the
condemnation of all or a part of the Leased Premises; provided, Lessee shall
receive any portion of such award specifically allocated to Lessee’s trade
fixtures or moving expenses.
22. Holding Over: Any
holding over after the expiration of the term of this Lease by Lessee with
the consent of Lessor shall be deemed to be a tenancy from month to month and
except for the term thereof shall be on the same terms and conditions specified
herein, so far as are applicable.
23. Sale of Premises: In
the event of a sale or conveyance by Lessor of Lessor’s interest in the Leased
Premises, Lessor shall be released from any future liability under this Lease,
with the successor in interest to Lessor to be solely liable to
Lessee.
24. Subordination and Estoppel
Certificate: This Lease is and shall be subordinate to any mortgage, deed
of trust or other instrument of security which have been or shall be placed on
the land and building or land or building of which the Leased Premises form a
part, and such subordination is hereby made effective without any further act by
Lessee. Lessee agrees that at any time or from time to time upon request by
Lessor to execute and deliver any instruments, releases or other documents that
may be required in connection with subjecting and subordinating this Lease
to the lien of said mortgage, deed of trust or other instrument of security.
Lessee hereby appoints Lessor as Lessee’s attorney in fact, irrevocably, to
execute and deliver any such instruments. Lessee shall execute, acknowledge and
deliver to Lessor, at any time within ten (10) days after request by Lessor, a
statement in writing certifying, if such be the case, that this Lease is
unmodified and in full force and effect (or if there have been modifications,
that this Lease is in full force and effect as modified), the date of
commencement of the Lease, the date on which the rent has been paid, and
such other information as Lessor shall reasonably request. Such statement by
Lessee shall be used by Lessor for delivery to and reliance upon by prospective
purchasers and lenders whose security consists of liens upon the building and
the real property of which the Leased Premises are a part.
25. Notice: All notices
or demands of any kind required or desired to be given by Lessor or Lessee
hereunder shall be in writing and shall be deemed delivered forty-eight (48)
hours after depositing the notice or demand in the United States mail, postage
prepaid, addressed to Lessee at the address of the Leased Premises, whether or
not Lessee has departed therefrom, abandoned or vacated the Leased Premises, and
as to Lessor at 335-B Turtle Creek Court, San Jose, California 94125, or as
Lessor shall designate in writing.
26. Waiver: No covenant,
term or condition or breach thereof shall be deemed waived, except by written
consent of Lessor, and any waiver or the breach of any covenant, term or
condition shall not be deemed to be a waiver of any preceding or succeeding
breach of the same or any other covenant, term or condition. Acceptance of all
or any portion of rent at any time shall not be deemed to be a waiver of any
covenant, term or condition except as to the rent payment accepted.
27. CPI: The term “CPI”
shall mean the Consumer Price Index, All Urban Consumers, Subgroup “All Items”,
San Francisco-Oakland Metropolitan Area (1967 = 100), now being published
bi-monthly by the United States Department of Labor, Bureau of Labor Statistics.
If the CPI is changed so that the base year is altered from that used as of the
effective date of this Lease, then the CPI shall be converted in accordance with
the conversion factor published by the United States Department of Labor, Bureau
of Labor Statistics, to obtain the same result that would have been obtained had
the base year not been changed. If no conversion factor is available, or if the
CPI is otherwise changed, revised or discontinued for any reason, there shall be
substituted in lieu thereof and the term “CPI” shall thereafter refer to the
most nearly comparable official price index of the United States Government
in order to obtain substantially the same result for any adjustment required by
this Lease as would have been obtained had the original CPI not been
discontinued, revised or changed.
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28. Miscellaneous:
A. All
the agreements herein contained upon the part of Lessee, whether technically
covenants or conditions, shall be deemed conditions for the purpose hereof,
conferring upon Lessor, in the event of breach of any of said agreements, the
right to terminate this Lease.
B. The
captions of the paragraphs contained in this Lease are for convenience only and
shall not be deemed in resolving any question of interpretation or construction
of any paragraph of this Lease to be relevant.
C. All
of the terms, covenants and conditions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors and
administrators, successors and assigns, except that nothing in this provision
shall be deemed to permit any assignment, subletting or use of the Leased
Premises other than as provided for herein.
D. This
Lease shall be governed and interpreted solely by the laws of the State of
California then in force.
E. Each
number, singular or plural, as used in this Lease shall include all numbers, and
each gender shall be deemed to include all genders.
F. Time
is of the essence of this Lease and each and every provision hereof, except as
to the conditions relating to the delivery of possession of the premises to
Lessee.
G. All
the terms, covenants and conditions contained in this Lease to be performed by
Lessee, if Lessee shall consist of more than one person or organization, shall
be deemed to be joint and several, and all rights and remedies granted to Lessor
or given to Lessor by law shall be cumulative and non-exclusive of any other
remedy.
IN
WITNESS WHEREOF, the parties hereto have hereunto subscribed their names the day
and date hereinbelow written.
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LESSOR:
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B.S.
ENTERPRISES, a California
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general
partnership
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Dated:
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7/1, 1987
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By:
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DONALD
G. BURNS, General Partner
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ADDENDUM
“C” TO LEASE DATED JULY 1, 1987 BY AND BETWEEN B.S. ENTERPRISES, aka Donald G.
Burns and Charlene Burns Trustees of the Burns 1991 Revocable Trust dated
6/25/91, hereinafter referred to as “LESSOR” and DATA CIRCUIT SYSTEMS, INC.
(hereinafter referred to as “LESSEE”).
IN
ACCORDANCE with the terms of the original lease described above, paragraph 4,
“Option to Renew”, Lessor hereby grants to Lessee the 2nd Option Period of 5
years. The terms and conditions of the original Lease shall remain the same
except as follows:
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2.
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Rental. The
rental amount for the 2nd Option Period of 5 years shall be $10,500.00
U.S. Dollars plus any additional rents/reimbursements required in the
original lease agreement.
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3.
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Term. The term
of the 1st Option Period shall commence on July 1, 1997 and end June 30,
2002.
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4.
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Option to Renew: As this
Addendum grants the 2nd of the 4 additional five-year terms specified in
the first sentence of paragraph 4, the balance remaining available is 2
additional 5-year terms. No new Option Periods have been
granted.
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Lessee
shall adhere to procedure for Option Notice to Lessor as specified in the
original lease, paragraph 4.
IN
WITNESS WHEREOF, the parties hereto have hereunto subscribed their names the day
and date herein below written.
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AGREED:
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LESSOR:
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Date:
7/1 , 1997
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/s/ Donald G. Burns
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Donald
G. Burns
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/s/ Charlene Burns
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Charlene
Burns
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LESSEE:
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Date:
7/1 , 1997
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/s/ Paul Zebg II
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Paul
Zebb II, President
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Data
Circuit Systems, Inc.
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Dated:
7/1, 1987
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By:
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/s/Charlene Burns
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CHARLENE
BURNS, General
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Partner
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Dated:
7-1, 1987
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By:
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/s/ Dean C. Schoborg
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DEAN
C. SCHOBORG
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General
Partner
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Dated:
7-1, 1987
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By:
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/s/ Beverly J. Schoborg
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BEVERLY
J. SCHOBORG
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General
Partner
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LESSEE:
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DATA
CIRCUIT SYSTEMS, INC.,
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|
a
California Corporation
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Dated:
7-1, 1987
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By:
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/s/ Dean C. Schoborg
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|
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President
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|||
|
Dated:
7-1, 1987
|
By:
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/s/ Donald G. Burns
|
|
|
Secretary
|
|||
--
EXHIBIT
A
DESCRIPTION
OF LEASED PREMISES:
The real
property situated in the City of San Jose, County of Santa Clara, State of
California, described as follows:
Parcel 2,
as shown on Parcel Map filed December 19, 1986 in Book 569 of Maps, at page(s)
9, Santa Clara County Records.
--
[EXECUTION
COPY]
REAL
PROPERTY LEASE AMENDMENT
THIS REAL
PROPERTY LEASE AMENDMENT (“Lease Amendment”) by and between B. S. ENTERPRISES, a
California general partnership (“Lessor”), and DATA CIRCUIT SYSTEMS, INC., a
California corporation (“Lessee”) is effective as of June 23, 2000 and is
entered into in contemplation of the following facts:
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A.
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Lessor owns that certain
real property commonly known as 335 Turtle Creek Court, San Jose,
California (“Leased Premises”), including 335-A, 335-B, 335-C and
335-D.
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B.
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Lessor
has been leasing the Leased Premises to Lessee under the terms of a Lease
entered into by and between Lessor and Lessee effective July 1, 1987, as
amended by Addendum C dated June 30, 1997, and as extended through June
30, 2002 (as amended and extended, “Original
Lease”).
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C.
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Effective
as of the date hereof, and contingent on Lessor and Lessee entering into
this Lease Amendment, the shareholders of Lessee are selling all of their
shares in Lessee pursuant to the Stock Purchase Agreement, dated as of May
18, 2000 (“Stock Purchase Agreement”), by and among Donald G. Burns and
Charlene Burns (“Sellers”), Data Circuit Holdings, Inc., a Delaware
corporation (“Buyer”), and Lessee.
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D.
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The
execution and delivery of this Lease Amendment by Lessor, which is a
partnership of Sellers, and Lessee is a condition to Buyer and Sellers
closing under the Stock Purchase
Agreement.
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WHEREFORE,
in consideration of the covenants and conditions contained herein. Lessor and
Lessee agree as follows:
1. Regardless
of whether consent is required under the Lease, Lessor hereby consents to the
acquisition of all of the shares of Lessee by Buyer.
2. Regardless
of whether consent is required under the Lease. Lessor consents to the
assignment, pledge or other use of this Lease as partial collateral for the
financing provided to Buyer by Bank of America Commercial Finance Corporation
(“B of A”) as more particularly set forth in the commitment letter dated May 19,
2000 from B of A to Saugatuck Capital Company, L.P.
3. The
parties hereto acknowledge and agree that, as of the date hereof: (a) the
Original Lease, as described above and as amended by this Lease Amendment
(collectively referred to hereinafter as “the Lease”) constitute the only lease
of the Leased Premises, and (b) the Lease is the only agreement of any kind
between Lessee and Lessor or Lessee and any Seller relating to the Leased
Premises (other than the Stock Purchase Agreement and documents entered into
in connection therewith).
I. Paragraph
2 of the Original Lease is amended to read in its entirety:
“2. Base Rent. Lessee
shall pay to Lessor without deduction, set off, prior notice or demand, as base
rent, in advance on the first day of each month during the term hereof the sum
of Ten Thousand Five Hundred Dollars ($10,500.00) per month.”
II. Paragraph
3 of the Original Lease is amended to read in its entirety:
“3. Term. The initial
term of this Lease shall be for a period of just over two full years commencing
on June 23, 2000 (the “Effective Date”) (but with the first base rent payment
due hereunder being due on July 1, 2000) and ending on the thirtieth day of
June, 2002. References herein to the term of this
Lease shall be deemed to include the initial term, together with any renewals,
extensions, or holding over thereof, Lessor hereby releases Lessee from all
claims or liabilities which arose or may arise under this Lease for any period
prior to the Effective Date (except monthly payments by Lessee to Lessor
reimbursing Lessor for taxes and sewer charges for the current year), it being
understood that this Lease will henceforth be deemed to have commenced on the
Effective Date.”
III. Paragraph
4 of the Original Lease is amended to read in its entirety:
“4. Options to Extend.
Lessee shall have the option to extend the term of this Lease for a total of
four additional periods following expiration of the initial term as provided in
paragraph 3 above and as further described in this paragraph 4. Lessee shall
exercise its option by giving written notice of exercise of the option (the
“Option Notice”) to Lessor at least six months and not more than 12 months
before the expiration of the initial term. With respect to any further
extension, Lessee shall give the Option Notice to Lessor at least six months
before the expiration of the prior extension period. Notwithstanding the
foregoing, if a Lessee event of default exists under this Lease on
the date of giving the Option Notice, the Option Notice shall be totally
ineffective, or if a Lessee event of default exists on the date the extension
period is to commence, the extension period shall not commence, and this Lease
shall expire at the end of the initial terms or the previous extension period,
as the case may
be.
4.1 The
lengths of the option periods are as follows: the first two option periods shall
be five years each; the third and fourth
option periods shall be three years each.
4.2 The
monthly rent for the option periods shall be as follows:
4.2.1 The
first five-year option period will begin July 1, 2002 at the base rental rate of
Thirteen Thousand Five Hundred Dollars ($13,500.00) per month;
4.2.2 The
second five-year option period, beginning July 1, 2007, will increase the then
current base rent by multiplying the then current base rent by a factor equal to
the increase from July 1, 2002 to June 30, 2007 in the Consumer Price Index,
Bureau of Labor Statistics, “All Urban Consumers” - “All Items”, as published
by the United States Department of Labor for San Francisco-Oakland-San Jose
(1982-1984 -100) (the “Index”); provided, however, that such factor shall be no
less than ten percent (10%) and no more than thirty percent (30%). If for any
reason the Index is not available, the said Consumer Price Index for the United
States shall be used, and if neither of the
Consumer Price Indices is available, then a comparable index shall be
used.
4.2.3 The
base rent during the third option period, commencing July 1, 2012, shall be ten
percent (10%) below the then market rate for similar commercial space in the San
Jose region; provided, however, that it shall not be lower than the base rent
during the prior option period.
4.2.4 The
base rent during the fourth option period, beginning July 1, 2015, will increase
over the then current rent by a factor equal to the increase from July 1, 2012
to June 30, 2015 in the Index; provided, however, that such factor shall be no
less than six percent (6%) and no more than eighteen percent (18%). If for any
reason the Index is not available, the said Consumer Price Index for the United
States shall be used, and if neither of the Consumer Price Indices is available,
then a comparable index shall be used.”
--
IV. Paragraph
8 of the Original Lease is amended to read in its entirety:
“8. Public Liability and
Property Damage Insurance.
8.1 Lessee,
at its expense, shall procure from companies having an A.M. Best rating of at
least B++ and an A.M. Best number rating of not less than 7, and maintain at all
times during the term of this Lease, a policy or policies of: (a) comprehensive
public liability and property damage insurance, insuring Lessee, and showing
Lessor as an additional insured as its interests may appear, against all claims
for personal injury, including death, and property damage, with not less than
Two Million Dollars ($2,000,000.00) combined single limit for both bodily injury
and property damage occurring in, on or about the
Leased Premises, with business interruption coverage; and (b) workers”
compensation insurance in compliance with applicable state law. Such policy or
policies of insurance shall contain a provision requiring not less than thirty (30) days’
prior written notice to Lessor and any mortgagee of Lessor in the event of
cancellation of material modification of the terms and conditions thereof, and
shall name Lessor as an additional insured. Such insurance may be provided under
a blanket policy. In addition to the foregoing, Lessee shall maintain insurance
against such other perils and in such amounts as Lessor may from time to time
reasonably require.
8.2 All
Risk Insurance. Lessor, at its expense, shall procure from companies having an
A.M. Best rating of at least B++ and an A.M. Best number rating of not less than
7, and maintain at
all times during the term of this Lease, a policy or policies of: (a)
comprehensive public liability and property damage insurance, insuring Lessor
against all claims for personal injury, including death, and property damage,
and (b) All Risk Insurance on the improvements and on the Leased Premises in
such amounts and with such deductibles as Lessor shall reasonably determine.
Lessee shall pay to Lessor, as additional rent, the cost of all premiums for
such insurance and any “deductible” amount not exceeding five thousand dollars
($5,000) per occurrence paid by Lessor that is excluded from coverage of such
insurance. Lessor shall not in any way or manner insure any property of Lessee
in the Leased Premises.
8.3 Indemnification.
Lessee shall indemnify, defend and hold harmless each of Lessor and its
officers and directors (the “Lessor Indemnified Parties”) from and against any
and all loss (including, without limitation, reasonable attorneys’ fees) and
against all claims, actions, damages, liability and expenses in connection with
loss of life, bodily and personal injury or damage to the real property or the
Leased Premises arising from any occurrence in, upon or at the real property or
the Leased Premises or any part thereof, or occasioned wholly or in part by any
act or omission of Lessee, its agents,
contractors, employees, servants, licensees, concessionaires or invitees, or by
anyone permitted to be on the real property or the Leased Premises by Lessee,
except any arising or occasioned wholly or in part by an act or omission of
Lessor, its agents, contractors, employees, servants, licensees, concessionaires
or invitees, or by anyone permitted to be on the real property or the Leased
Premises by Lessor. Lessor shall indemnify, defend and hold harmless each of
Lessee and its officers and directors (the “Lessee Indemnified Parties”) from
and against any and all loss (including, without limitation, reasonable
attorneys’ fees) and against all claims, actions, damages, liability and
expenses in connection with loss of life, bodily and personal injury or damage
to the real
property or the Leased Premises arising from or occasioned wholly or in part by
any act or omission of the Lessor, its agents, contractors, employees, servants,
licensees, concessionaires or invitees, or by anyone permitted to be on the real
property or the Leased Premises by Lessor. Lessee assumes all risks of and the
Lessor Indemnified Parties shall not be liable for injury to person or damage to
property resulting from the condition of the Leased Premises, except any
conditions which Lessor is obligated to repair or remedy under this Lease.
Lessee agrees, at all times, to defend, indemnify and hold harmless each of the
Lessor Indemnified Parties against all actions, claims, demands, costs, damages
or expenses of any kind (including,
without limitation, reasonable attorneys’ fees) which may be brought or made
against or which any Lessor Indemnified Party may pay or incur by reason of
Lessee’s occupancy of the Leased Premises or its negligent performance of or
failure to perform any of its obligations under this Lease. Lessor agrees, at
all times, to defend, indemnify and hold harmless each of the Lessee Indemnified
Parties against all actions, claims, demands, costs, damages or expenses of any
kind (including, without limitation, reasonable attorneys’ fees) which may be
brought or made against or which any Lessee Indemnified Party may pay or incur
by reason of Lessor’s occupancy of the Leased Premises or its negligent
performance of or failure to perform any of its obligations under this Lease. In
case any Lessor Indemnified Party shall, without fault on its part, be made a
party to any litigation commenced by or against Lessee, then Lessee shall
defend, indemnify, defend and hold harmless the same and shall pay all costs,
expenses and reasonable attorneys’ fees incurred by or on behalf of the same in
connection with such litigation. This provision shall survive expiration or
other termination of this Lease. In case any Lessee Indemnified Party shall,
without fault on its part, be made a party to any litigation commenced by or
against Lessor, then Lessor shall defend, indemnity, defend and hold harmless
the same and shall pay all costs, expenses and reasonable attorneys’ fees
incurred by or on behalf of the same in connection with such litigation. This
provision shall survive expiration or other termination of this
Lease.
8.4 Waiver
of Subrogation. Lessor and Lessee each agree that neither Lessor nor Lessee (nor
their successors and assigns) shall have any claim against the other for any
loss, damage or injury which is covered by insurance carried by either party and
for which recovery from such insurer is made, notwithstanding the negligence of
either party in causing the loss. This release shall be valid only if the
insurance policy in question expressly permits waiver of subrogation or if the
insurer agrees in writing that such waiver of subrogation will not affect
coverage under said policy. Each party agrees to use its best efforts to obtain
such an agreement from its insurer, if the policy does not expressly permit a
waiver of subrogation and if such a waiver is available at a reasonable and
nominal cost. If the obtaining party considers the cost for such an agreement to
be unreasonable or beyond a nominal fee, the obtaining party may notify the
benefited party of such cost and the benefitted party may opt to pay the fee or
forego such an agreement.
8.5 Evidence
of Insurance. Each party shall provide the other with copies or other evidence
of all policies of insurance required of such party under tills Paragraph 8
prior to commencement of the term of this Lease.”
V. Paragraph
9 of the Original Lease is amended to read in its entirety:
“9. Repairs and
Maintenance. Except in the case of damage to or destruction of the Leased
Premises from any cause covered by insurance, in which the provisions of
Paragraph 20 shall control, the parties shall have the following obligations and
responsibilities with respect to the repair and maintenance of the Leased
Premises:
9.1 Lessee shall at all
times during the term of this Lease, at its sole cost and expense (except as
otherwise provided below), provide regular janitorial service to the Leased Premises,
and keep and maintain the Leased Premises in good order, condition and repair,
except for: (a) ordinary wear and tear, (b) damage due to fire, earthquake, act
of god or the elements (which it shall be the responsibility of Lessor to
repair), (c) damage to or destruction of the Leased Premises from any cause
covered by insurance, in which the provisions of Paragraph 20 shall control, (d)
replacements of or major repairs to building systems during or after the last 6
months of the then current Lease term, and (e) Major Repairs (as defined in
paragraph 9.2 below). For this purpose, the Leased Premises shall include,
without limitation: (i) all its interior and exterior walls, floors, ceilings
and roof, (ii) all its windows, doors and skylights, (iii) all its electrical
wiring, conduits, connectors and fixtures, (iv) all its plumbing and bathroom
fixtures. (v) all its heating, ventilation and air conditioning equipment
including without limitation any rooftop compressors, and (vi) all its exterior
improvements, including, without limitation, any parking lots and driveways.
Lessee shall, at its sole cost and expense, repair all damage to the Leased
Premises, except ordinary wear and tear, caused exclusively by the activities of
Lessee, its employees, invitees or contractors on and after the Effective Date,
and, if Lessee fails to repair such damage. Lessor may, at its election and
without waiving, any other remedy it may otherwise have under this Lease or at
law or equity, perform such maintenance or make such repairs as are required of
Lessee hereunder, and charge the Lessee, as additional rent the reasonable costs
incurred by Lessor for the same. Lessee agrees upon the expiration of the term
of this Lease or sooner termination to surrender the Leased Premises in the same
condition as on the Effective Date, except for ordinary wear and tear, damage
due to fire, earthquake, act of god or the elements, and other destructions,
condemnations, damages or conditions which it is not obligated under this Lease
to repair.
9.2 Lessor
shall pay 100% of the replacement of, or major repairs (other than to repair
damage caused by Lessee)
to, the roof, exterior walls, floors, and structural elements of or on
the Leased Premises (“Major Repairs”). In addition:
9.2.1 Either
party shall notify the other party in writing if it believes that Major Repairs
are necessary. Within thirty (30) days of such notification, the notified party
shall respond to the notifying party that it either agrees or disagrees that the
proposed Major Repairs are necessary. If the parties agree that Major Repairs
are necessary. Lessor shall select a licensed contractor to perform the work and
shall confirm in writing that it agrees to the terms of the contract for the
work and that it agrees to cover all cost of the contract in accordance with
this paragraph 9.2.
9.2.2 If
within thirty (30) days from the date of notification set forth in section 9.2.1
above, the parties fail to agree about the need for the proposed Major Repairs
or about the licensed contractor to perform the work, they shall submit the
dispute to binding arbitration under the California Arbitration Act, Sections
1280-1294.2 of the California Code of Civil Procedure, as amended, and the
Commercial Arbitration Rules of the American
Arbitration Association.
9.3 Lessor
shall not be liable for any cost incurred by the interruption of Lessee’s
operations as a result of any repair, maintenance or Major Repairs carried out
on the Leased Premises, provided, the Leased Premises and related building
systems were in good working order on the Effective Date and provided the Lessor
has used reasonable efforts to
minimize any interruptions to Lessee’s business caused by such repair,
maintenance or Major Repairs.
9.4 for purposes of this
paragraph 9, “ordinary wear and tear” shall mean wear and tear ordinary for
general industrial use of the Leased Premises, expressly excluding any wear and
tear that is unique to the nature of Lessee’s business on the Leased
Premises.”
VI. Paragraph
10 of the Original Lease is amended to add at the end:
“10.1 Hazardous Materials.
Lessee shall comply in all material respects with all federal, state, and local
laws and regulations with respect to the use of any chemical, hazardous
material, or other substance on the Leased Premises, including, without
limitation, laws that (a) govern the treatment and storage of hazardous and
toxic materials and waste on and from the Leased Premises, or (b) regulate the
use and condition of waste water produced by Lessee on the Leased
Premises.
10.1.1 As
used in this Lease, the following terms have the following
definitions:
A. The
term “Environmental Laws” means any federal, state, or local law, statute,
ordinance, or regulation pertaining to protection of the environment or of human
health or employee health and safety, including any pertaining to environmental
conditions on, under, or about the Leased Premises, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (“CERCLA”) as amended, 42 U.S.C. Sections 9601 et seq., and the
Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. Sections 6901
et
seq.
B. The
term “Hazardous Substance” includes without limitation:
(1) Those
substances included within the definitions of “hazardous substances,” “hazardous
materials,” “toxic substances,” or “solid waste” in CERCLA, RCRA, and the
Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801
et seq., and in
regulations promulgated pursuant to said laws;
(2) Those
substances defined as “hazardous wastes” in Sections 25117 of the California
Health & Safety Code, or as “hazardous substances” in Section 25316 of the
California Health &
Safety Code and in the regulations promulgated pursuant to said
laws;
(3) Those
substances listed in the United States Department of Transportation Table (49
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto);
(4) Such
other substances, materials, and wastes which are or become regulated under any
Environmental Law; and
(5) Any
material, waste, or substance which is classified as any of the following: (a)
petroleum; (b) asbestos; (c) polychlorinated biphenyls; (d) designated as a
“hazardous substance” pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Sections 1251 et
seq. (33 U.S.C. Sections 1321) or listed pursuant to Section 307 of the
Clean Water Act (33 U.S.C. Section 1317); (e) flammable explosives; or (f)
radioactive materials.
C. The
term “Remedial Work” shall have the definition set forth in Paragraph 10.6 of
this Lease.
10.2 Each
of Lessee and Lessor agrees and covenants to comply in all material respects
with all Environmental Laws with respect to the use, generation, manufacture,
production, storage, release, discharge, or disposal of Hazardous Substances on,
under or about the Lessed Premises or transportation to or from the Leased
Premises of any Hazardous Substance.
10.3 Each
party shall give the other prompt written notice of any of the following of
which it has actual knowledge:
A. Any
proceeding or inquiry by any governmental authority (including, without
limitation, the California State Department of Health Services) with respect to
the presence of any Hazardous Substance on the Leased Premises or the migration
thereof from or to other
property.
B. All
claims made or threatened by any third party against either party or the Leased
Premises relating to any loss or injury resulting from any Hazardous
Substance.
C. Its
discovery of any occurrence or condition on the Leased Premises or on any real
property adjoining or in the vioinity of the Leased Premises that could cause
the Leased Premises or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability, or use of the Leased Premises under any
Environmental Law.
D. Its
discovery of any occurrence or condition on the Leased Premises or on any real
property adjoining
or in the vicinity of the Leased Premises that could cause the Leased Premises
or any part thereof to be classified as “border-zone property” under the
provisions of California Health and Safety Code Sections 25220 et seq. or any
regulation adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability, or use of the Leased
Premises under any Environmental Law.
10.4 Each
party shall have the right to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any
Environmental Law under or relating to which it might be liable.
10.5 (A)
Lessee shall indemnify, defend and hold harmless Lessor, its successors, and
assigns from and against any and all loss, damage, cost, expense, claim, fee, or
liability (including reasonable attorneys’ fees and costs) directly or
indirectly arising out of or attributable to the use, generation, manufacture,
production, storage, release, threatened release, discharge, or disposal by or
on behalf of Lessee on or after the Effective Date of a Hazardous Substance on,
under, or about the Leased Premises including, without limitation, all
foreseeable consequential damages, such as the costs of any required or
necessary repair, cleanup, or detoxification of the Leased Premises and the
preparation and implementation of any required or necessary closure, remedial,
or other plans; provided, however, that this indemnity expressly excludes any
loss, damage, cost, expense, claim, fee, liability, condition or state of facts
for which Buyer is indemnified by Sellers or Sellers are otherwise responsible
under the Stock Purchase Agreement (regardless of whether any such
indemnification or responsibility under the Stock Purchase Agreement is subject
to any floor, cap, basket, threshold, materiality standard or qualifier,
expiration date, statute of limitations, or other limitation of any
kind).
(B) Lessor
shall indemnify, defend and hold harmless Lessee, its successors, and assigns
from and against any and all loss, damage, cost, expense, claim, fee, or
liability (including reasonable attorneys’ fees and costs) directly or
indirectly arising out of or attributable to the use, generation, manufacture,
production, storage, release, threatened release, discharge, or disposal by or
on behalf of Lessor prior to, on or after the Effective Date, of a Hazardous
Substance on, under, or about the Leased Premises including, without limitation,
all foreseeable consequential damages, such as the costs of any required or
necessary repair, cleanup, or detoxification of the Leased Premises and the
preparation and implementation of any required or necessary closure, remedial,
or other plans.
--
10.6 In
the event that any investigation, monitoring, containment, cleanup, removal,
restoration, or other remedial work of any kind or nature (the “Remedial Work”)
is reasonably necessary or desirable under any applicable local, state, or
federal law or regulation, any judicial order, or by order of any governmental
entity or person because of, or in connection with, any breach by Lessee or
Lessor of its obligations under Paragraph 10.2 of this Lease that results in
the presence or release of a Hazardous Substance in or into the air, soil,
groundwater, surface water, or soil vapor at, on, about, under or within the
Leased Premises (or any portion thereof), the breaching party shall within
thirty (30) days after written demand for performance thereof by the other party
(or such shorter period of time as may be required under any applicable law,
regulation, order, or agreement), commence to perform, or cause to be commenced,
and thereafter diligently prosecuted to completion, all
such Remedial Work. All Remedial Work shall be performed by one or more
contractors, approved in advance in writing by the other party, and under the
supervision of a consulting engineer approved in advance in writing by the other
party, neither of such approvals to be unreasonably withheld or delayed. All
costs and expenses of such Remedial Work shall be paid by the breaching party
including, without limitation, the charges of such contractor(s) and/or the
consulting engineer, and the reasonable fees and costs of the attorneys for the
other party incurred in connection with monitoring or reviewing such Remedial
Work. In the event the breaching party shall without reasonable cause fail to
timely commence, or cause to be commenced, or fall to diligently prosecure to
completion, such Remedial Work, the other party may, but shall not be required
to, cause such Remedial Work to be performed and all costs and expenses thereof,
or incurred in connection therewith, shall be paid on demand to the other party
by the breaching party.
10.7 Any
reference herein to statutory or regulatory sections shall be deemed to include
any amendments thereto and any successor sections.
Lessee
and Lessor shall remain fully and completely liable, on termination of this
Lease, for any and all damages sustained by the other or any related person,
Including but not limited to fines and penalties, relating to the breaching
party’s failure to comply with the terms of this paragraph.”
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VII.
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Paragraph
11 of the Original Lease is amended to read in its
entirety:
|
“11.
Alterations and
Improvements:
11.1 By
Lessee: Any structural modifications, alterations and/or improvements to the
Leased Premises by Lessee must (A) first be approved by Lessor in writing, (B)
be made in substantial compliance with plans and specifications therefore first
approved by Lessor, and (C) be performed by a contractor first approved by
Lessor. Lessor agrees that such approvals shall not be unreasonably withheld or
delayed All Lessee modifications, alterations and/or improvements to the Leased
Premises shall be made, constructed or installed (w) at Lessee’s expense, (x)
using a licensed contractor, (y) in good and workmanlike manner, and (z) in
accordance with all applicable federal, state, and local law and regulations.
Lessee shall not commence the making of any Lessee modifications, alterations
and/or improvements until (i) all required governmental approvals and permits
have been obtained, (ii) all requirements ragarding Insurance imposed by this
Lease have been satisfied, (iii) Lassee has given Lessor at least
five business days prior written notice of its intention to commence any
structural work, so that Lessor may post and file notices of non-responsibility,
and (iv) if reasonably requested by Lessor, Lessee has obtained contingent
liability and broad form builder’s risk insurance in an amount reasonably
satisfactory Lessor to cover any perils relating to the proposed work not
covered by insurance carried by Lessee pursuant to this Lease. As used in the
Paragraph, the term “modifications, alterations and/or improvements” shall
expressly include, without limitation, the installation of additional electrical
service and systems, heating and ventilation, overhead lighting fixtures,
drains, sinks, built-in partitions, doorways, or the like, and shall expressly
exclude cosmetic changes.
--
11.2 Ownership
of improvements: All modifications, alterations and improvements made or added
to the Leased Premises by Lessee (other than Lessee’s inventory, equipment,
movable partitions and furniture, wall decorations and trade fixtures) shall be
deemed real property and are part of the Leased Premises, but shall remain the
property of the Lessee during the term of this Lease. Any such modification,
alterations or improvements, once completed, shall not be altered or removed
from the Leased Premises during the term of this Lease without Lessor’s written
approval first obtained in accordance with the provisions of Paragraph 11.1
above (if and to the extent so required). At the
expiration or sooner termination of this Lease, all such modifications,
alterations and improvements (other than Lessee’s inventory, equipment, movable
partitions and furniture, wall decorations and trade fixtures) shall
automatically become the property of the Lessor and shall be surrendered to
Lessor as part of the Leased Premises unless Lessor, at its sole discretion,
requires Lessee to remove any of such modifications, alterations or
improvements, in which case Lessee shall so remove same. Lessor shall have no
obligation to reimburse Lessee for all or any portion of the cost or value of
any such modifications, alterations or improvements so surrendered to Lessor.
All modifications, alterations or improvements that are installed or constructed
on or attached to the Lassed Premises by Lessor at Lessor’s expense shall be
deemed real property and a part of the Leased Premises and shall be the property
of Lessor. All lighting, plumbing, electrical, heating, ventilating and air
conditioning systems and fixtures, built-in partitioning, window coverings,
non-removable wall coverings and floor coverings installed by Lessee shall be
deemed improvements to the Leased Premises and not trade fixtures of
Lessee.
11.3 Alterations
Required By Law: Lessee shall make all modifications, alterations, and
improvements to the Leased Premises, at its sole cost (except as noted below),
that are required by law because of (i) Lessee’s unique use or occupancy of the
Leased Premises, (ii) Lessee’s application for any permit or governmental
approval, or (iii) Lessee’s making of any modifications, alterations, or
improvements to or within the Leased Promises; provided, however, that, (A) in
any case, Lessee may withdraw applications or cancel work contemplated upon
being informed that other modifications, alterations, and improvements might be
required as a result of or in connection therewith, and (B) in the case of
clauses (it) and (iii), if such application, modification, alteration or
improvement arises solely in connection with a Major Repair, such application
modification, alteration or improvement shall be deemed to be part of the Major
Repair and its costs paid by Lessor in accordance with Paragraph 9 rather than
this Paragraph 11.”
VIII. Paragraph
13 of the Original Lease is amended to read in its entirety:
“13. Entry: Lessor and
Lessor’s agents may enter upon the Leased Premises at all reasonable times to
inspect the same, to show the Leased Premises to a prospective purchaser or,
within the last 6 months of the term,
prospective lessees, or to make any changes or alterations or repairs, including
the erection and maintenance of scaffolding, canopies and other structures as
may be needed, which lessor shall deem necessary for the protection, improvement
or preservation of the Leased Premises (provided same to not adversely impact
upon the spaces currently usable by Lessee without Lessee’s prior written
consent), or to post any notice provided for by law, or otherwise to protect any
and all rights of
Lessor without any liability to Lessee for damages or any abstement of rental
except where due to the gross negligence or willful misconduct on the part of
Lessor, its agents, contractor, employees, servants, licensees, concessionaires
or invitees, or by anyone permitted to be on the real property or the Leased
Premises by Lessor, its agents, contractors or employees. Nothing contained in
this paragraph 13 shall be construed to obligate Lessor to make any such
changes, alterations or repairs. Lessee further agrees that at any time after
one hundred twenty (120) days prior to the termination of this Lease, Lessor may
place thereon any usual or ordinary “To Let” or “To Lease” signs.”
IX. Paragraph
14 of the Original Lease is to read in its entirely:
“14. Assignment and
Subletting: Lessee shall not sublet or assign any portion or interest in
this Lease without first obtaining the written consent of Lessor, which consent
shall not be unreasonably withheld or delayed. In the event of
an attempted subletting or assignment without obtaining such consent, said
subletting or assignment shall, at the option of Lessor, be void. In the event
that Lessee realizes a net profit on any sublet under this Lease. Lessee shall
pay such net profit over to Lessor. Such assignment or subletting shall further,
at the option of Lessor, be deemed a breach of this Lease. Notwithstanding the
foregoing, Lessee may, without Lessor’s consent, (i) transfer its interest in
this Lease in connection with a reorganization of its assets or business, whether by
merger, reorganization, assignment or sublet provided the transferee is a
person, corporation, partnership, limited liability company or other person or
entity controlling, controlled by or under common control with Lessee; (ii)
transfer its interest in this Lease in connection with a sale of all or
substantially all of its assets or all or substantially
all of its assets relating to the business conducted by Lessee on the Leased
Premises; or (iii) mortgage or otherwise pledge its interest in this Lease to
its current or future lender(s) (and such mortgagee, assignee or pledgee may,
without Lessor’s consent, foreclose on or otherwise transfer their interest or
title herein, or have Lessee transfer its interest or title herein in lieu of
foreclosure or similar proceedings, to a successor mortgagee or pledgee or a
third-party purchaser). Lessee shall notify Lessor of any assignment or sublet
under clauses (1) through (III).”
X. The
first paragraph of Paragraph 18 of the Original Lease is amended to read in its
entirety:
“18. Default: In the event
of any of the following (each an “event of default”):
(i) any default by Lessee in the payment of rent
hereunder, which default remains uncured for over fifteen days after Lessor has
given Lessee written notice thereof,
(ii) any other default by Lessee hereunder, which default
is curable within 30 days and which default remains uncured for over 30 days
after Lessor has given Lessee written notice thereof, or
(iii) any other default by Lessee,
which default is not capable of being cured within 30 days and which default
remains uncured for over 30 days after Lessor has given Lessee written notice
thereof and is not being diligently pursued by Lessee,
Lessor
shall have the following remedies, in addition to all other rights and remedies
provided by any law or otherwise provided in this Lease, to which Lessor may
resort cumulatively, or in the alternative:
AA. In
the event of an event of default under clause (i) above, Lessor shall be
entitled to a late fee of 10% of the rent to which the event of default applies.
”
and,
is Paragraph 18.E, the reference to Paragraph 15 shall be to Paragraph
8.
XI. Paragraph
20 of the Original Lease is hereby amended to insert at the end of
the first sentence, just before the period, the clause:
“but
rents shall be prorated in proportion to the length of time and amount of the
Leased Premises which are unusable during that time”
XII. Paragraph
22 of the Original
Lease is hereby amended to insert at the end, just before to the period, the
clause:
“, except that any remaining options to
extend under Paragraph 4 shall have expired upon expiration of the term of this
lease”
XIII. Paragraph 24 of the Original Lease is
hereby amended to insert after the word “part” the clause:
“provided
the beneficiaries of same agree not to disturb Lessee so long as Lessee is
complying with the terms of this
Lease”
and
to insert after the word “aubordination” the phrase:
“and non-disturbance”
and
to insert at the end of the first sentence, just before the period, the
phrase:
“and the related non-disturbance
agreement”
and
to delete the second sentence.
XIV. Paragraph
28 of the Original Lease is amended to add subparagraph H, which shall
read:
“H. No
Waiver. The receipt by Lessor of any rent with knowledge of the breach of
any covenant of
this Lease by Lessee shall not be deemed a waiver of such breach or any
subsequent breach of this Lease by Lessee and no provision of this Lease and no
breach of any provision of this Lease shall be deemed to have been waived by
Lessor or Lessee unless such waiver be in writing signed by such
party.”
XV. Paragraph 25 of the Original Lease is
hereby amended to replace the address for notice of Lessor (formerly 335-B
Turtle Creek Court, San Jose, California 94125) with the following
address:
“c/o Ashley, Quinn, Nelson, P.O. Box
7800, Incline Village, NV 89452, Attention: George Ashley”
and
to replace the reference to “United States mail” with the
following:
“Untied States certified mail with
return receipt requested”
XVI. Paragraphs
15, 16, 17, 26 and 27 of the Original Lease are hereby deleted.
Except as amended by Paragraphs 1
through XVI above, the terms and conditions of the Original Lease remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto
do hereby execute this Lease Amendment as of June 23, 2000.
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DATA
CIRCUIT SYSTEMS, INC.
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B.S.
ENTERPRISES
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By:
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/s/ Dean C. Schoborg
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By:
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/s/ Donald G. Burns
|
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Its:
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President
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Donald
G. Burns, Partner
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||
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By:
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/s/ Charlene Burns
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|||
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Charlene
Burns, Partner
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||||
--
ADDENDUM “D” To Original Lease
dated July 1, 1987 by and between B. S. Enterprises, aka Donald G. Burns and
Charlene Burns, Trustees of the Burns 1991 Revocable Trust dated 6/25/91,
LESSOR, and Data Circuit Systems, Inc., LESSEE and Real Property Lease Amendment
dated June 23, 2000 between same parties followed by May 24, 2007 Consent to Assignment of
Lessee to Merix Corporation, an Oregon Corporation.
In
ACCORDANCE with the terms of the original and amended lease described above,
paragraph 4, “Option to Extend” and paragraph 4.2.2, the Lessor hereby grants
the second five-year option period beginning July 1, 2007 under the same terms
and conditions except as follows:
Paragraph
2. Rental.
The
rental amount for the 5-year period beginning July 1, 2007
shall be
$16, 594.60. plus any additional rents/reimbursements
required
in the original/amended lease.
Paragraph
3. Term.
The term
of the 2nd
five-year option period shall commence on
July 1,
2007 and end June 30, 2012.
Paragraph
4. Option to Extend.
As this
Addendum grants the 2nd of
the additional 4 periods specified in
the
1st
sentence of Paragraph 4 of the June 23, 2000 Real Property Lease
Amendment,
the balance remaining available is 2 additional 3-year terms.
No new
Option Periods have been granted.
IN
WITNESS WHEREOF, the parties hereto do hereby execute this Addendum As of July
1, 2007.
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LESSEE:
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LESSOR:
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/s/ Michael D. Burger
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Michael
D. Burger
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Donald
G. Burns
|
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President
and CEO
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Charlene
Burns
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