EXHIBIT 10.16
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease ("Amendment") is made as of this 19th day of
March, 1999, by and between MONTAGUE OAKS ASSOCIATES PHASE III, a California
general partnership ("Landlord") and INTEGRATED SENSOR SOLUTIONS, INC., a
California corporation ("Tenant").
RECITALS
A. Pursuant to that certain Lease dated June 2, 1994, as amended by First
Amendment to Lease dated as of June 23, 1994 (collectively, "Lease"), Landlord
leases to Tenant approximately seventeen thousand four hundred seventy (17,470)
rentable square feet of space in that certain building commonly known as 000
Xxxxx Xxxx Xxxxxxx, Xxx Xxxx, Xxxxxxxxxx, more particularly described in the
Lease (the "Original Premises) and located in that certain project ("Project")
commonly referred to as "Montague Oaks Phase UI," as more particularly
described in the Lease and Exhibit "B" attached thereto.
B. Tenant desires to expand and lease additional space in the Project, and
Landlord is willing to lease such additional space to Tenant. The parties
desire to amend the Lease to make such additional space subject to the terms
and conditions of the Lease, as amended by this Amendment, and to extend the
term of the Lease.
C. Capitalized terms used in this Amendment shall have the meaning ascribed
to such terms in the Lease unless otherwise defined in this Amendment.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Lease of Additional Space. Landlord hereby leases to Tenant, and Tenant
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hereby leases from Landlord, those certain premises outlined in red on Exhibit
"A" (the "Additional Premises") commonly known as 000 Xxxxx Xxxx Xxxxxxx, Xxx
Xxxx, Xxxxxxxxxx, which Landlord and Tenant hereby agree consist of
approximately seventeen thousand four hundred seventy (17,470) rentable square
feet. Except to the extent set forth in this Amendment, the lease of the
Additional Premises shall be subject to all of the terms and conditions
contained in the Lease.
2. Term. The term of the Lease shall commence as to the Additional Premises
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as of April 1, 1999 or on such earlier date as Tenant first takes possession of
the Additional Premises (the "Additional Premises Commencement Date") and shall
expire concurrently with the expiration of the lease term as to the Original
Premises.
3. Possession. Tenant agrees that in the event of the inability of Landlord
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to deliver possession of the Additional Premises to Tenant on the Additional
Premises Commencement Date, the lease of the Additional Premises shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom, nor shall the term of the Lease as to the Additional
Premises be extended in any way, but in such event Tenant shall not be liable
for
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any rent or common area charges for the Additional Premises until such time as
Landlord tenders delivery of possession of the Additional Premises to Tenant.
4. Extension of Term. Notwithstanding anything contained in Paragraph 7 of
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the Summary of Lease or Paragraph 2(a) of the Lease, the term of the Lease is
hereby extended for a sixty-three month period commencing April 1, 1999 and
terminating on June 30, 2004 ("Extended Tern").
5. Monthly Rent.
(a) Basic Rent. Notwithstanding anything contained in Paragraph 8(a) of the
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Sumnmary of the Lease and Paragraph 4(a) of the Lease, Tenant shall pay to
Landlord basic rent for the Premises (including both the Original Premises and
the Additional Premises) during the Extended Term in monthly installments as
follows:
Lease Months Amount
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April 1, 1999 through December 31, 1999 $37,560.00
January 1, 2000 through June 30, 2000 $56,777.50
July 1, 2000 through June 30, 2001 $59,223.30
July 1,2001 through June 30, 2002 $61,319.70
July 1, 2002 through June 30, 2003 $64,114.90
July 1, 2003 through June 30, 2004 $66,560.70
Monthly installments of basic rent shall be paid at the same time and manner as
specified in Paragraph 4 of the Lease.
(b) Additional Premises Security Deposit. Concurrently with the execution
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of this Amendment, Tenant shall deposit with Landlord in cash the amount of
Thirty-three Thousand Two Hundred Eighty Dollars and Thirty-five Cents
($33,280.35) ("Additional Premises Security Deposit"). The Additional Premises
Security Deposit shall be held by Landlord, together with the existing security
deposit in the amount of Eleven Thousand One Hundred Eighty-one Dollars
($11,181) delivered by Tenant to Landlord for the Original Premises, as
security for the faithful performance by Tenant of all the terms and conditions
of the Lease, as amended by this Amendment, and in accordance with all the
terms and conditions of Paragraph 4(e) of the Lease.
6. Condition of Additional Premises. Landlord shall deliver the Additional
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Premises to Tenant with the electrical, mechanical and plumbing systems and
roof of the Additional Premises in good operating condition. Tenant shall give
Landlord written notice within thirty (30) days after the date of delivery of
possession if any of the electrical, mechanical or plumbing systems or the roof
of the Additional Premises is not in good operating condition on the date of
Landlord's delivery of possession of the Additional Premises. If Tenant gives
such notice, Landlord shall promptly make such repairs as are reasonably
necessary to cause the electrical, mechanical and plumbing systems and/or roof
to be in good operating condition. Tenant's
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failure to give written notice of the need for repairs to the electrical,
mechanical and plumbing systems and/or roof within said thirty (30) day period
shall be deemed Tenant's acceptance of such systems and roof in good operating
condition. Except as set forth above in this Xxxxxxxxx 0, Xxxxxx hereby agrees
that the Additional Premises shall be taken "as-is," "with all faults," and
"without any representations or warranties". Tenant hereby agrees and warrants
that it has inspected the condition of the Additional Premises and the
suitability of same for Tenant's purposes, and Tenant does hereby waive and
disclaim any objection to, cause of action based upon, or claim that its
obligations hereunder should be reduced or limited because of the condition of
the Additional Premises or the Project or the suitability of same for Tenant's
purposes. Tenant acknowledges that neither Landlord nor any agent nor any
employee of Landlord has made any representations or warranties with respect to
the Additional Premises or the Project or with respect to the suitability of
either for the conduct of Tenant's business. Except as expressly set forth in
this Paragraph 6, the taking of possession of the Additional Premises by Tenant
shall conclusively establish that the Additional Premises and the Project were
at such time in satisfactory condition.
7. Parking. Commencing with the Additional Premises Commencement Date,
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Tenant shall have the non-exclusive use of one hundred thirty-nine (139)
parking spaces in the Common Area as designated from time to time by Landlord
in accordance with the terms and conditions set forth in Paragraph 15 of the
Lease.
8. Common Area Charges. From and after the Additional Premises Commencement
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Date, Tenant shall pay to Landlord, as additional rent for the Premises, an
amount equal to thirty-nine and five tenths percent (39.5%) of the total common
area charges as defined in Paragraph 16 of the Lease.
9. Existing Option. Paragraph 54 of the Lease is hereby deleted in its
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entirety.
10. Option to Extend. Landlord grants to Tenant an option to extend the
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term for a period of five (5) years (such extension is hereafter referred to as
the "Second Extended Term"). The Second Extended Term shall follow the
expiration of the Extended Term. Tenant must exercise the option, if at all,
for both the Original Premises and the Additional Premises and shall have no
right to extend the term of the Lease for only the Original Premises or only
the Additional Premises. All the provisions of this Lease shall apply during
the Second Extended Term except for the amount of the basic rent. The basic
rent for the Second Extended Term shall be adjusted to market rate; provided
that in no event shall the basic rent for the Second Extended Term be less than
the basic rent in effect at the expiration of the Extended Term. The option is
further subject to the following terms and conditions:
(a) Tenant must deliver its irrevocable written notice of Tenant's exercise
of the option to Landlord not less than six (6) lease months, nor more than
twelve (12) lease months, prior to the expiration of the Second Extended Term.
Time is of the essence with respect to the time period during which Tenant must
deliver to Landlord its written notice of exercise and, therefore, if Tenant
fails to give Landlord its irrevocable written notice of its exercise of the
option within the applicable time period provided above, then the option shall
expire and be of no further force or effect.
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(b) The parties shall have thirty (30) days from the date Landlord receives
Tenant's notice of exercise in which to agree on the amount constituting the
market rate, If Landlord and Tenant agree on the amount of the market rate,
they shall immediately execute an amendment to this Lease setting forth the
expiration date of the Second Extended Term and the amount of the basic rent to
be paid by Tenant during the Second Extended Term. If Landlord and Tenant are
unable to agree on the amount of the market rate within thirty (30) days after
the commencement of such negotiations, then the market rate shall be determined
in the following manner:
Within forty-five (45) days after commencement of negotiations, Landlord and
Tenant shall each select an independent licensed commercial real estate broker
having not less than ten (10) years experience in the leasing of research and
development and industrial properties in Santa Xxxxx County, which broker shall
not have been employed by either party in this transaction. Within fifteen (15)
days of their employment, the two real estate brokers shall select a third real
estate broker who is similarly qualified. Within thirty (30) days from the
appointment of the third broker, the three brokers so selected shall, acting as
a board of arbitrators, determine the amount of the market rate, basing their
determination on standard procedures and tests normally employed in the
commercial real estate profession in determining market rate and applying the
factors included within the definition of market rate set forth above. The
decision of the majority of the brokers shall be final and binding upon the
parties hereto, if a majority of the brokers are unable to agree on the market
rate within the stipulated period of time, the three opinions of the market
rate shall be added together and their total divided by three, and the
resulting quotation shall be the market rate; provided, however, in no event
shall the market rate be less than the basic rent in effect at the expiration
of the Extended Term. Each party shall pay the expenses and charges of the
broker appointed by it and the parties shall pay the expenses and charges of
the third broker in equal shares. When the market rate has been so determined,
Landlord and Tenant shall immediately execute an amendment to the Lease stating
the basic rent for the Second Extended Term. Tenant shall pay the basic rent
determined for the Second Extended Term in accordance with the provisions of
Paragraph 4(a) of the Lease.
(c) As used herein, the "market rate" shall be the monthly rent (triple
net) then obtained for five (5) year leases of comparable terms for premises in
the Project and in buildings and/or projects within the same geographical area
of similar types and identity, quality and
location as the Project.
(d) Common area charges shall continue to be determined and payable as
provided in paragraph 16 of the Lease.
(e) Neither party shall have the right to have any court or other third
party (other than arbitration by brokers as set forth in subsection (b) above)
determine the market rate or the basic rent. Tenant shall not assign or
otherwise transfer this option or any interest therein and any attempt to do so
shall render this option or any interest therein null and void. Tenant shall
have no right to extend the term beyond the Second Extended Term. If Tenant is
in default under this Lease at the date of delivery of Tenant's notice of
exercise to Landlord, then such
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notice shall be of no effect and this Lease shall expire at the end of the
Extended Term. if Tenant is in default under this Lease on the last day of the
Extended Term, then Landlord may in its sole discretion elect to have Tenant's
exercise of the option be of no effect, in which case the Lease shall expire at
the end of the Extended Term.
11. Right of First Negotiation. Paragraph 55 of the Lease is hereby deleted
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in its entirety.
12. Real Estate Brokers. Each party represents and warrants to the other
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party that it has not had dealings with any real estate broker, finder or other
person with respect to the Additional Premises and the negotiation and
execution of this Amendment except Xxxxx & Xxxxx. Except as to commissions and
fees to be paid as provided in this paragraph, each party shall indemnify and
hold harmless the other party from all damage, loss, liability and expense
(including attorneys' fees and related costs) arising out of or resulting from
any claims for commissions or fees that may or have been asserted against the
other party by any broker, finder or other person with whom Tenant or Landlord
has purportedly dealt with in connection with the Additional Premises and the
negotiation and execution of this Amendment. To the extent agreed between
Landlord and Orubb & Xxxxx, Landlord shall pay all broker leasing commissions
to Xxxxx & Xxxxx incurred in connection with the Additional Premises and the
negotiation and execution of this Amendment.
13. Alteration Allowance: Landlord shall provide Tenant an allowance of One
Hundred Thirty-nine Thousand Seven Hundred Sixty Dollars ($139,760) which shall
be used by Tenant only for alterations in the Original Premises and Additional
Premises made in accordance with paragraph 8 of the Lease ("Additional
Allowance"). Notwithstanding the foregoing, in no event shall Tenant use the
Additional Allowance for the purchase, construction or installation of personal
property, movable furniture, trade fixtures, furnishings or equipment. Landlord
shall reimburse Tenant for all reasonable costs of alterations in the Original
Premises and Additional Premises up to the maximum amount of the Additional
Allowance within thirty (30) days after Landlord's receipt from Tenant of
copies of all invoices for such alterations together with any other
documentation reasonably requested by Landlord including, without limitation,
conditional and final unconditional lien releases from all contractors and
material suppliers supplying work or materials to the alterations (collectively
"Invoices"); provided, however, Tenant must submit to Landlord all Invoices
prior to September 30, 1999. Landlord shall have no obligation to reimburse
Tenant for any alterations in the Original Premises or Additional Premises for
Invoices submitted by Tenant to Landlord after September 30, 1999.
14. Use of Terms. Except to the extent otherwise expressly provided in this
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Amendment, the term "Premises" as used in the Lease shall refer to both the
Original Premises and the Additional Premises.
15. Corporate Authority. Each individual executing this Amendment on behalf
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of Tenant represents and warrants that he or she is duly authorized to and
deliver this Amendment on behalf of Tenant in accordance with a duly adopted
resolution of the Board of Directors of Tenant and that this Amendment is
binding upon Tenant in accordance with its terms. Tenant shall deliver to
Landlord, within ten (10) days after the date of execution of this Amendment, a
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IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this Amendment on the date first above written.
LANDLORD:
MONTAGUE OAKS ASSOCIATES PHASE Ill, a
California general partnership
By: 745 Property Investments, a
Massachusetts Voluntary Trust, a
general partner
By: _________________________
Its: ________________________
By: XxXxxxxxxx Group (Montague), a
California general partnership, a
general partner
By: ______________________
Xxxx 5. MeCandless as Trustee
of the Xxxx XxXxxxxxxx and
Xxxx XxXxxxxxxx Inter Vivos
Trust Agreement dated
February 17, 1982, a general
partner
TENANT:
INTEGRATED SENSOR SOLUTIONS, INC., a
California corporation
By: /s/ Xxxxx Xxxxxxxxxxx
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Xxxxx Xxxxxxxxxxx
Vice President Finance and Administration
By:
Print Name:
Its:
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