AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (this "Amendment") dated as of this 6th day of
August, 2003 (the "Execution Date"), is by and between TRI-VALLEY CAMPUS I, LLC,
as landlord ("Landlord"), and ADEPT TECHNOLOGY, INC., as tenant ("Tenant").
RECITALS
A. Landlord and Tenant entered into The Kontrabecki Group Industrial -
R&D Lease, including an addendum thereto (the "Addendum"), dated September 18,
2000 (collectively, the "Lease"), for certain premises consisting of
approximately Two Hundred Nineteen Thousand Eight Hundred Eighteen (219,818)
square feet of xxxx leasable area in various buildings commonly known as 3011,
3055 and 0000 Xxxxx Xxxxx in the City of Livermore, County of Alameda, State of
California, as more particularly described in the Lease (the "Original
Premises"). The Original Premises were defined in the Lease as the "Premises."
Except as expressly set forth herein to the contrary, all capitalized terms used
in the Amendment shall have the same meanings as ascribed to such terms in the
Lease.
B. The Original Premises consist of approximately Seventy Four Thousand
Seven Hundred Sixty Eight (74,768) square feet of gross leasable area in the
building at 0000 Xxxxx Xxxxx and approximately One Hundred Forty Five Thousand
Fifty (145,050) square feet of gross leasable area in the buildings at 3055 and
0000 Xxxxx Xxxxx (the "Expansion Premises").
C. Tenant has requested that Landlord modify the Lease (and subject to
the terms and conditions contained herein Landlord is willing to modify the
Lease) to, among other things, (i) reduce the area comprising the Original
Premises by eliminating the Expansion Premises from the area comporising the
Original Premises, (ii) permit Tenant to reduce the monthly installments of Rent
otherwise required to be paid by Tenant, and (iii) provide for Landlord to
forbear from taking certain actions against Tenant notwithstanding Tenant's
prior breach of the Lease.
D. Landlord and Tenant now desire to modify and supplement the Lease
upon the terms, conditions and covenants hereinafter provided.
NOW, THEREFORE, in consideration of the terms, conditions and covenants
contained in this Amendment and other valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Landlord and Tenant hereby agree to
amend the Lease as follows:
AGREEMENT
1. Acknowledgments by Tenant. Tenant advises Landlord that no default or
event that with the passage of time, the giving of notice, or both, that would
constitute a default or breach by Tenant has occurred and is continuing except
as disclosed on Exhibit "A" to this Amendment (collectively, the "Existing
Defaults"). Tenant acknowledges that, as result of the Existing Defaults,
Landlord has the right to terminate the Lease and to recover possession of the
Original Premises and damages for Tenant's breach in accordance with Paragraph
16 of the Lease. Tenant further acknowledges that by entering into this
Amendment, Tenant will receive substantial benefits, including the following:
(a) Tenant desires to retain a portion of the space comprising the Original
Premises but does not require all such space and will be allowed to surrender
such excess space to Landlord, (b) if Tenant timely makes each of the Minimum
Monthly Payments (as defined in Paragraph 4(a)(i) below) on or before the first
(1st) day of each calendar month during the remainder of the term of the Lease,
Landlord will forbear from requiring Tenant's satisfaction of the Accrued
Obligations (as defined in Paragraph 4(a)(ii) below), and (c) but for Landlord's
agreements in this Amendment, Tenant would be subject to damages and other
remedies as a result of the Existing Defaults and for failing to satisfy the
Accrued Obligations as and when due.
2. Surrender of Expansion Premises. On the Effective Date (as defined in
Paragraph 12), Tenant shall surrender to Landlord the Expansion Premises in
accordance with the terms set forth in Paragraph 26 of the Lease, and the
parties shall have no further rights or obligations to each other with respect
to the Expansion Premises, provided that any Rent (including Base Rent, Real
Property Taxes and Direct Operating Expenses) that otherwise would become
payable by Tenant with respect to the Expansion Premises shall be included in
the Accrued Obligations. Landlord shall have the right to relet the Expansion
Space on terms and conditions as Landlord may determine in its sole discretion.
3. Term. As of the Effective Date, the Expiration Date (as defined in the
Lease) of the term of the Lease shall be May 31, 2011, unless sooner terminated
pursuant to the terms of the Lease and this Amendment.
4. Minimum Monthly Payment; Forbearance; Deposit; Promissory Note.
(a) Definitions.
(i) Minimum Monthly Payment. As used in this Amendment, the term
"Minimum Monthly Payment" means the sum of the following (A) Eighty Two Thousand
Two Hundred Forty Four and 80/100 Dollars ($82,244.80) per month (the "Minimum
Base Monthly Payment") plus (B) Thirty Three and 88/100 Percent (33.88%) of the
Real Property Taxes and Direct Operating Expenses for the Property (the "Minimum
Additional Rent"). Until such time as Landlord provides Tenant with notice of
any change, the Minimum Additional Rent is estimated to be Twenty Seven Thousand
Dollars ($27,000.00) per month. The Minimum Base Monthly Payment shall be
adjusted once each year, effective as of June 1 of each year to and amount equal
to the greater of (i) one hundred four percent (104%) of the Minimum Base
Monthly Payment payable during the immediately preceding month and (ii) the fair
market value for the 74,768 gross leasable square feet space comprising the
Premises (the "Fair Market Value"), as determines below. Landlord shall provide
Tenant with notice of the Fair Market Value (the "Notice") on or before May 1 of
each year to be effective June 1 of each year. If Landlord fails to deliver the
Notice on or before May 1 of any year, beginning on June 1, Tenant nonetheless
shall pay to Landlord One Hundred Four Percent (104%) of the Minimum Base
Monthly Payment for the previous year until such time as Landlord delivers the
Notice to Tenant, at which time Tenant shall begin to pay the Minimum Base
Monthly Payment at the Fair Market
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Value and immediately pay Landlord the amount by which the monthly Fair Market
Value exceeds the Minimum Base Monthly Payment paid by Tenant for the period
from June 1 until the date on which Landlord provides Tenant with the Notice. If
Tenant disagrees with Landlord's determination of the Fair Market Value, then
Tenant shall provide Landlord with written objection to Landlord's determination
within seven (7) days after Tenant receives the Notice. If Tenant fails to
provide a written objection within the seven (7) day period, then Landlord's
determination shall be used as the Fair Market Value. If Tenant timely provides
Landlord with a written objection, then the Fair Market Value shall be
determined in accordance with the appraisal process set forth in the second
paragraph of Paragraph 1.2 of the Addendum, provided, however, that in no event
shall the Minimum Base Monthly Payment be less than One Hundred Four Percent
(104%) of the Minimum Base Monthly Payment payable for the last full month of
the immediately preceding year.
(ii) Accrued Obligations. As used in this Amendment, the term
"Accrued Obligations" shall mean the sum of the following: (A) the Base Rent
obligations of Tenant under the Lease from and after the Execution Date
attributable to the entire Original Premises, plus (B) Tenant's Share of Real
Property Taxes and Direct Operating Expenses for the entire Original Premises,
plus (C) four percent (4.0%) annual increases of the amount specified in the
preceding clause (A), plus (D) the amount by which the Deposit (as defined in
Paragraph 3(c) below), plus (E) interest on the unpaid amounts specified in
clauses (A), (B), (C) and (D) outstanding from time to time at a rate equal to
six percent (6.0%), compounded on a monthly basis, calculated on the basis of a
three hundred sixty (360) day year. Provided Tenant makes each of the Minimum
Monthly Payments when due, from and after the Execution Date, the Accrued
Obligations for the first year following the Execution Date shall accrue at an
amount equal to approximately Three Hundred Eighteen Thousand Seven Hundred
Thirty Six and 00/100 Dollars ($318,736.00) per month (which amount is
calculated as the monthly Base Rent) plus Tenant's Share of Real Property Taxes
and Direct Operating Operating Expenses attributable to the entire Original
Premises minus the Minimum Monthly Payment.
(b) Payments by Tenant: Forbearance by Landlord. From and after the
Effective Date, Tenant shall pay to Landlord the Minimum Monthly Payment, on or
before the first (1st) day of each calendar month during the term of the Lease,
without deduction or offset any kind. Provided that Tenant timely pays the
Minimum Monthly Payment on or before the first (1st) day of each calendar month
during the term of the Lease, Landlord temporarily and conditionally shall
forbear from requiring payment of the Accrued Obligations that would otherwise
be required to be satisfied or paid under the Lease. The Accrued Obligations
shall accrue but shall not be required to be paid unless and until Tenant fails
to pay the Minimum Monthly Payment as and when required, at which time such
amount shall be due and payable in full without notice or demand. Furthermore,
if Tenant pays all installments of the Minimum Monthly Payment, then starting on
the first day of the month that is thirteen (13) full calendar months after the
Effective Date, and on the first day of each month thereafter during the balance
of the term of the Lease, Landlord shall waive any right that it may have to
require the satisfaction or payment of the Accrued Obligations that relate to
any period that is more than twelve (12) full months prior to such date. By way
of example, if the first installment of the Minimum Monthly Payment is paid on
July 1, 2003, and if Tenant makes all payments thereafter
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due through and including July 31, 2004, then on August 1, 2004, the Accrued
Obligations attributable to the month of July 1, 2003, shall be waived.
Thereafter, so long as Tenant continues to make all payments of the Minimum
Monthly Payment required hereby, as of the first day of each month after August
1, 2004, the Accrued Obligations that are attributable to any period more than
twelve (12) full months prior to the month that the Accrued Obligations then due
are to be satisfied or paid by Tenant shall be waived. If Tenant fails to pay
Minimum Monthly Payment when due in any given month, then the Accrued
Obligations that have not previously been waived shall be due and payable in
full.
(c) Security Deposit. From and after the Execution Date, Tenant's
authorizes Landlord to apply the Deposit (as defined in the Lease) to defray a
portion of the unpaid Base Rent and Tenant's Share of Real Property Taxes and
Direct Operating Expenses attributable to the Original Premises for the period
prior to the Execution Date (collectively, "Delinquent Obligations"). Landlord
and Tenant acknowledge and agree that the Delinquent Obligations attributable to
the period prior to the Effective Date exceed the amount of the Deposit.
Notwithstanding any provision of the Lease to the contrary, effective as of the
date that is one hundred thirty-five (135) days after the Execution Date,
provided no default has occurred by Tenant under the Lease or this Amendment,
Tenant shall have no obligation to replenish the Deposit.
5. No Option to Extend or Right of First Negotiation to Purchase. As of the
Effective Date and notwithstanding Paragraphs 1 and 3 of the Addendum or any
other term, condition or covenant of the Lease to the contrary, Tenant shall not
have an option to extend the term of the Lease or a right of first offer or
refusal to purchase the Building, and the provisions of Paragraph 1 and 3 of the
Addendum shall be deemed deleted except to the extent that Paragraph 4(a)(i)
above incorporates the appraisal process set forth in the second Paragraph of
1.2 of the Addendum for determining the Fair Market Value.
6. Convertible Promissory Note. As additional consideration for Landlord's
execution of this Amendment, Tenant shall execute and deliver to Landlord an
unsecured convertible promissory note (the "Note") in the face amount equal to
Three Million and 00/100 Dollars ($3,000,000.00). The Note shall (a) be
convertible into capital stock of Tenant at a price of One and 00/100 Dollar
($1.00) per share, subject to certain adjustments in the event of a stock split,
stock dividend or similar change in outstanding stock or if any of Adept's
stockholder exercise their redemption rights with respect to Adept's stock, (b)
bear interest at six percent (6%) per annum, (c) mature on the date which is
three (3) years from the date that the Note is executed, and (d) otherwise be in
the form of Exhibit "B" attached hereto.
7. Relocation of Tenant. At any time after the Effective Date, Landlord
shall have the right to require that Tenant vacate the Premises during the term
of the Lease, in which event Landlord shall relocate Tenant to another facility
in the "South Bay Area" or the "East Bay Area" of California (defined as the
region bounded on the south by the City of San Xxxx, on the north by the City of
Oakland and on the east by the City of Livermore), provided, however, Landlord
shall: (a) provided Tenant with reasonable advance notice of the relocation, (b)
provide Tenant with reasonably comparable facility, (c) pay for Tenant's actual
moving costs and reasonable
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tenant improvements to the new facility, and (d) relocate Tenant only once
during the term of the Lease
8. Representations and Warranties by Tenant. In order to induce Landlord
to execute and deliver this Amendment, Tenant hereby represents and warrants to
Landlord as follows, each of which shall survive the Execution Date and the
Effective Date:
(a) Truth of Recitals Statements. Each statement made in this
Amendment including the recitals and each of the other acknowledgments and
representations of Tenant herein are true and correct.
(b) Authority; No Additional Consent Required. Tenant has the right,
power and authority to execute, deliver and perform its obligations under this
Amendment. Each of the persons signing this Amendment on behalf of Tenant has
full power and authority to do so. The execution, delivery and performance of
this Amendment has been duly authorized by any necessary action on the part of
Tenant.
(c) Validity of Lease. The Lease is a valid and binding obligation of
Tenant and is legally enforceable against Tenant in accordance with its express
terms.
(d) No Event of Default. Other than the Existing Defaults, no breach,
default or defined event of default (and no event which upon the giving of
notice, the passage of time or both would constitute a breach, default or event
of default) presently exists under the Lease. Landlord has fully performed and
observed all the obligations of Landlord under the Lease and Tenant has no
claims of any kind against Landlord or its employees, agents or representatives.
(e) Compliance. To the best of Tenant's knowledge and belief, after
due inquiry and investigation, Tenant has not violated any statute, law,
ordinance or regulation (including environmental laws) of any governmental
entity or any judgment, decree or order of any court
(f) Reaffirmation of Prior Representations. Tenant hereby reaffirms
and makes as of the Effective Date each of the representations, warranties and
covenants set forth in the Lease, which shall survive any investigations,
inspections or inquiries made by Landlord or any of its representatives, except
as expressly modified herein.
(g) Solvency. Tenant has not been insolvent (as defined under
Subdivision (32) of Section 1 of Title 11 of the United States Code) at any time
since inception of the Lease through and including the Execution Date, Tenant
will not be rendered insolvent by virtue of the Deposit being released by Tenant
to Landlord under Paragraph 4(c) of this Amendment, Tenant does not anticipate
being insolvent (as so defined), if ever, for at least one hundred thirty-five
(135) days after the Execution Date, and Tenant, as of the Execution Date, has
and after the release of the Deposit shall continue to have sufficient assets to
pay all current and all foreseeable obligations. Tenant does not anticipate
filing a petition for or having a petition involuntarily filed against Tenant
for any type of bankruptcy proceeding or action at any time in the next one
hundred thirty-five (135) days immediately following the Execution Date.
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(h) Deposit. Landlord is entitled to apply the Deposit to defray the
Delinquent Obligations of Tenant under the Lease.
(i) Financial Statements. All financial statements delivered by Tenant
to Landlord on or prior to the date of this Amendment relating to Tenant's
financial condition were and are true and correct as of the date of such
statements.
(j) Subleases. Tenant has not assigned or subleased all or any portion
of the Premises.
9. Release of Claims. As of the Effective Date, Tenant releases Landlord,
and its present and former members, agents, attorneys, employees, predecessors,
successors, and assigns (collectively, the "Landlord Parties") of and form any
and all claims, demands, damages, liabilities, losses, costs, and expenses of
every kind and nature whatsoever, whether now known or unknown, suspected or
unsuspected which it now has, owns or holds or at any time heretofore ever had,
owned or held or could, shall or may hereafter have, own or hold against any and
all of Landlord Parties based upon any matter, cause, fact, thing, act or
omission occurring or existing at any time through and including the Effective
Date arising out of, in connection with, or relating to the Lease and any other
agreements between Landlord and Tenant (the "Released Matters").
It is the intention of the parties in executing this Amendment that this
Amendment shall be effective as a general release of and from all Released
Matters. In furtherance of the intentions set forth herein, Tenant acknowledges
that it is familiar with Section 1542 of the Civil Code of the State of
California which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
Tenant, with respect to the Released Matters, hereby waives and relinquishes any
right or benefit which it has or may have under Section 1542 of the Civil Code
of the State of California or any similar provision of the statutory or
nonstatutory law of any other jurisdiction, to the full extent that it may
lawfully waive all such rights and benefits.
10. Events of Default. Paragraphs 16.1 (a) and (b) of the Lease shall be
deleted in their entirety and replaced with the following:
"(a) The failure by Tenant to make any payment of Base Rent or any
other payment required to be made by Tenant hereunder, as and when due, and such
failure shall not have been cured within three (3) days after a written notice
thereof from Landlord;
(b) Tenant's failure to perform any other term, covenant or condition
contained in the Lease and such failure shall have continued for five (5) days
after written notice of
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such failure is given to Tenant."
11. Brokers. Landlord and Tenant each represent and warrant to the other
that they have had no dealings with any real estate broker, agent or finder in
connection with the negotiation or execution of this Amendment. Each party
hereto shall indemnify and hold harmless the other party from any claims,
including reasonable attorney's fees, by a broker, agent or finder for any
leasing commission which may be claimed as a result of the actions of the
indemnifying party.
12. Conditions Precedent to Effectiveness of Admendment. Landlord's
obligations under this Amendment are subject to the following conditions
precedent, each of which is for the sole benefit of Landlord:
(a) Truth of Representations. Each of the representations, warranties,
acknowledgments and statements of fact in this Amendment, including those in the
recitals, schedules and exhibits hereto, shall be true, correct and complete.
(b) No Default. Other than the Existing Defaults, no default or event
of default shall have occurred under the Lease or would exist after the giving
of notice, the passage of time or both.
(c) Financial Condition. There shall have been no material adverse
change in the financial condition of any Tenant from and after the execution of
this Amendment.
(d) Lender Approval. Landlord shall have obtained written consent to
this Amendment from its lenders, Fremont Bank and Xxxxxx Brothers.
(e) Tenant Financing. Tenant shall have entered into agreements with
Silicon Valley Bank ("SVB") pursuant to which Tenant shall have the right,
subject to terms and conditions required by SVB, to borrow under a working
capital line of credit not less than One Million Five Hundred Thousand Dollar
($1,500,000.00).
(f) Surrender. Tenant shall have vacated and surrendered to Landlord
the Expansion Premises in the condition required by Paragraph 26 of the Lease.
(g) Convertible Note. Tenant shall have executed and delivered the
Note.
Tenant shall use its best faith efforts to satisfy each of the foregoing
conditions (other than the condition referred to in Paragraph 12(d), which is
not under its control). If for any reason any of the foregoing conditions are
not satisfied or waived in writing by Landlord on or before August 7, 2003
(unless such date is extended in Landlord's sole and absolute discretion), then
this Amendment shall be null and void and both parties shall be relieved of
their obligations hereunder and the Lease shall remain in full force and effect
without giving effect to this Amendment. The date upon which each of the
conditions precedent set forth above have been satisfied or waived in writing by
Landlord is referred to herein as the "Effective Date".
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13. No Additional Obligations of Landlord. Except as expressly set forth
herein, Landlord has no obligation to Tenant to extend the terms of the payment
of any rent or other indebtedness owing to Landlord, to amend or waive any
provisions of the Lease, or to otherwise alter any of Landlord's security,
rights or remedies, except as set forth herein. Tenant acknowledges that it has
been informed by Landlord that Landlord shall be entitled to exercise all of its
rights and remedies under the Lease to the maximum extent possible upon the
occurrence of an event of default (other than Exisiting Default).
14. No Claims. Tenant acknowledges and agrees that: (a) it has no claim or
cause of action against Landlord arising from or in connection with the Lease or
otherwise; (b) it has no offset or defense against rent or other obligations
owing to Landlord; and (c) Landlord has heretofore properly performed and
satisfied in a timely manner all of its obligations to and contracts with
Tenant.
15. Effect Of This Amendment. Except as expressly modified herein, the
Lease shall remain effective according to their terms and is hereby reaffirmed
and ratified and Tenant shall comply with all of the terms and conditions
thereof.
16. Relationship of Landlord and Tenant. Landlord and Tenant intend that
the relationship between them shall be solely that of landlord and tenant.
17. General Conditions.
(a) No Waiver. No delay or omission of Landlord in exercising any
right or power arising from any default by Tenant shall be construed as a waiver
of such default or as an acquiescence therein, nor shall any single or partial
exercise thereof preclude any further exercise thereof. Landlord may, at its
option, waive any of the conditions herein and any such waiver shall not he
deemed a waiver of Landlord's rights hereunder but shall be deemed to have been
made in pursuance of this Amendment and not in modification thereof. No waiver
of any event of default shall be construed to be a waiver of or acquiescence in
or consent to any preceding or subsequent event of default.
(b) No Third Party Benefits. This Amendment is made for the sole
benefit of Tenant and Landlord, their successors and assigns and no other person
or persons shall have any rights or remedies under or by reason of this
Amendment.
(c) Documentation. In addition to the instruments and documents
mentioned or referred to herein, Tenant shall, at its own cost and expense,
supply Landlord with such other instruments, documents, information and data as
may, in Landlord's opinion, be reasonably necessary for the purposes hereof, all
of which shall be in form and content acceptable to Landlord.
(d) Couse of Dealing; Waivers. No failure or delay by Landlord or its
officers, employees or agents in the exercise of any right under the Lease or
this Amendment shall operate as a waiver thereof, and any single or partial
exercise of any such right shall not preclude any later exercise of any such
right. Landlord's failure at any time to require strict
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performance by Tenant of any provision of this Amendment shall not thereafter
affect any right under this Amendment of Landlord to demand strict compliance
and performance. Any suspension or waiver of a right under this Amendment must
be in writing signed by an officer of Landlord.
(e) Headings. The headings used herein are for the convenience of the
parties only and shall not be used to interpret the terms of this Amendment.
(f) Attorney's Fees. If any action or proceeding at law or in equity,
or an arbitration proceeding (collectively an "action"), shall be brought under
this Amendment for or on account of any breach of or to enforce or interpret any
of the terms, covenants, or conditions of this Amendment, the prevailing party
shall be entitled to recover from the other party its reasonable attorneys' fees
and costs and expenses incurred in connection with the prosecution or defense of
such action or the settlement of such controversy.
(g) Waiver of Jury Trial. LANDLORD ANY TENANT EACH ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AMENDMENT OR THE LEASE
WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES, AND THEREFORE, TENANT AND
LANDLORD EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING (INCLUDING ACTIONS SOUNDING IN TORT) TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AMENDMENT OR THE LEASE RELATING HERETO OR ARISING FROM THE
TRANSACTION CONTEMPLATED HEREUNDER OR LANDLORD/TENANT RELATIONSHIP BETWEEN THE
PARTIES AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE AND NOT BY A JURY.
(h) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed one and the same instrument.
(i) Severabiltiy. If any provision of this Amendment or the documents
executed in connection herewith conflicts with applicable law, such provision
shalt be deemed severed from this Amendment or the documents executed in
connection herewith, as the case may be, and the balance thereof shall remain in
full force and effect.
(j) Advice of Counsel. Tenant acknowledges that it has sought the
advice of, and has been advised by, legal counsel of its choice, in connection
with the negotiation of this Amendment, and that Tenant has willingly entered
into this Amendment with full understanding of the legal and financial
consequences of this Amendment.
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be
executed as of the Execution Date.
"LANDLORD" "TENANT"
TRI-VALLEY CAMPUS I, LLC ADEPT TECHNOLOGY, INC.
By: /s/ Xxxx X. Xxxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
Print Name: Xxxx X. Xxxxxxxxxxx Print Name: Xxxxx X. Xxxxxxxx
--------------------- ----------------------
Its: Managing Member Its: President
-----------------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Print Name: Xxxxxxx X. Xxxxxx
----------------------
Its: Vice President
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EXHIBIT A
EXISTING DEFAULTS
Month Rent Triple Net Expense Total
----- ---- ------------------ -----
February 2003 331,485 77,501 408,986
March 2003 331,485 77,501 408,988
Apr11 2003 331,485 77,501 408,986
May 2003 331,485 77,501 408,986
------- ------ -------
Total $1,325,940 $310,004 $1,635,944
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Exhibit B
CONVERTIBLE SUBORDINATED NOTE
$3,000,000 July , 2003
FOR VALUE RECEIVED, the undersigned, ADEPT TECHNOLOGY, INC. ("Borrower"),
hereby promises to pay to TRI-VALLEY CAMPUS I, LLC ("Lender"), or order, the
principal sum or so much of the principal sum of Three Million Dollars
($3,000,000) as remains unpaid together with accrued interest as provided herein
on the Maturity Date.
A Interest. Interest shall accrue on all obligations hereunder at a per annum
rate equal to six percent (6.0%). Interest payable hereunder shall be
calculated on the basis of a three hundred sixty (360) day year for actual
days elapsed. All accrued interest shall be due and payable on the
Maturity Date. Notwithstanding the foregoing, the principal sum hereunder
shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a rate equal to five (5) percentage
points above the interest rate applicable immediately prior to the
occurrence of the Event of Default. In no event, however, will the interest
rate payable hereunder exceed the maximum interest rate allowed by
applicable usury and other laws (the "Maximum Legal Rate") and the
Borrower's obligations under this Note will be reduced if necessary to not
exceed the Maximum Legal Rate.
B Payment.
a. Principal Payments. On the Maturity Date, all outstanding principal
and all accrued and unpaid interest shall become immediately due and
payable.
b. Prepayment. Borrower shall have the right to prepay all or any portion
of the amounts outstanding under this Note at the rates stated herein,
upon providing fifteen business days notice of its intention to repay,
indicating the amount of such prepayment. Upon notice Lender would
have the right to convert this note during such five days from
delivery of notice of Borrower's intention to repay.
c. Form of Payment. Except as otherwise provided herein, principal and
interest and all other amounts due hereunder are to be paid in lawful
money of the United States of America in federal or other immediately
available funds.
C Events of Default; Remedies.
a. Definition of Event of Default. The occurrence of any one or more of
the following events shall constitute an "Event of Default" hereunder:
i. Payment Default. Borrower's breach of the obligation to pay the
principal outstanding and/or interest accrued hereunder on the
applicable due date.
ii. Bankruptcy. If Borrower becomes insolvent or the institution by
Borrower of an Insolvency Proceeding or the institution against
Borrower of an Insolvency Proceeding;
iii. Material Adverse Change. If there occurs a material adverse
effect on the business operations, condition (financial or
otherwise) or prospects of Borrower or the ability of Borrower to
repay or otherwise perform its obligations under this Note.
iv. Cross-Acceleration. The occurrence of any default or failure to
perform under any agreements entered into by Borrower subsequent
to the date of this note that constitute material agreements of
the Borrower, to which Borrower is a party or by which it is
bound resulting in a right by Lender, including without
limitation that certain Lease, dated September 18, 2000, as
amended, between Lender and Borrower, for premises located in
Livermore, California, whether or not exercised, to accelerate
the maturity of any indebtedness in an amount in excess of Fifty
Thousand Dollars ($50,000). Notwithstanding the foregoing, such
default shall not constitute a default for purposes of this
agreement if such default or failure to perform is corrected
within ten (10) business days after notice of such default is
delivered by Lender.
v. Change in Control. If a transaction occurs in which any "person"
or "group" (within the meaning of Section 13(d) and 14(d)(2) of
the Exchange Act) becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of a
sufficient number of shares of all classes of stock then
outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such "person" or "group" to
elect a majority of the Board of Directors of Borrower, who did
not have such power before such transaction. In any event Lender
will not unreasonably withhold approval.
vi. Remedies. Upon the occurrence of an Event of Default, upon
delivery of notice to Borrower of the Event of Default, Lender
may accelerate payment of the principal outstanding and interest
accrued hereunder, declare all such amounts immediately due and
payable, and may exercise all rights and remedies granted by law.
Upon the occurrence of any Event of Default described in Section
C.a., payment of the principal outstanding and interest accrued
hereunder shall be automatically accelerated without any action
by Lender. Notwithstanding the foregoing, a Change of
Control to which Lender has consented shall not give rise to an
Event of Default hereunder, including without limitation, payment
of the Event of Default interest rate.
D Conversion Rights.
a. Voluntary Conversion. Lender may, in its sole discretion, at any time
and from time to time after the date of this Note, elect to convert
(the "Voluntary Conversion Right") all or any part of the outstanding
principal balance hereunder into such number of fully paid and
nonassessable Shares as determined by dividing the principal being
converted by the Conversion Price subiect to Section 5 hereof.
b. Exercise of Conversion Right. To convert any of the principal
hereunder into Shares by exercise of the Voluntary Conversion Right,
Lender shall deliver to Borrower a written notice of election to
exercise the Voluntary Conversion Right (the "Voluntary Conversion
Notice"). Borrower shall, as soon as practicable thereafter, issue and
deliver to Lender a certificate or certificates, registered in
Lender's name, for the number of Shares to which Lender shall be
entitled by virtue of such exercise (the "Voluntary Conversion
Shares"). The conversion of the outstanding principal hereunder shall
be deemed to have been made on the date that Borrower receives the
Voluntary Conversion Notice (the "Conversion Date") and Lender shall
be treated for all purposes as the record holder of the Voluntary
Conversion Shares as of such date to the extent permitted under
applicable law.
c. Interest. If Lender exercises its Voluntary Conversion Right with
respect to any outstanding principal amount, Borrower shall,
concurrent with the issuance of the related Voluntary Conversion
Shares, pay to Lender all interest accrued with respect to the
principal converted, which payment shall be made in the form of cash,
by converting such interest into principal hereunder, or additional
Voluntary Shares. The form of the payment shall be at the discretion
of the Borrower.
d. Fractional Shares. Burrower shall not issue fractional Shares upon
exercise of the Voluntary Conversion Right. As to any fractional Share
which Lender would otherwise be entitled to receive, Lender shall
receive from borrower an amount in cash equal to an amount calculated
by multiplying such fractional Share by the fair market value of one
Share as determined by the closing price of a Share as reported on the
OTCBB or such other exchange where shares of Borrower's common stock
are traded (or if not traded, as determined in the good faith judgment
of the Board of Directors of Borrower) on the date of exerdse of the
Voluntary Conversion Right. Payment of such amount shall be made in
cash or by check payable to the order of Lender at the time of
delivery of any certificate or certificates.
