FIRST AMENDMENT TO LEASE
This First Amendment to Lease ("First Amendment"), dated as of
September 9, 1996, is entered into by and between Benicia Associates, a
California general partnership ("Lessor") and Signal Technology Corporation, a
Delaware corporation ("Lessee").
RECITALS
A. Lessor and ST Microwave Corporation, a Delaware corporation, entered
into a Standard Industrial Lease dated October 18, 1990 (the "Lease") for the
premises consisting of approximately 34,656 square feet ("Existing Premises") in
the building located at 000-000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx.
B. The term of the Lease is scheduled to expire on November 30, 1996.
C. ST Microwave Corporation now agrees to assign all of its rights and
obligations under the Lease to Lessee and Lessor and Lessee desire to extend the
term of the Lease, to expand the premises to include the remaining 19,624 square
feet of space in the building (the "Additional Premises") and to amend certain
other provisions of the Lease as provided herein. The Existing Premises and the
Additional Premises are sometimes collectively referred to herein as the
"Premises."
AGREEMENT
In consideration of the mutual covenants set forth herein and other
valuable consideration, Lessor and Lessee agree to amend the Lease as follows:
1. Premises. As of December 1, 1996 (the "Effective Date"), Lessee
shall lease from Lessor the Additional Premises, in addition to the Existing
Premises, and paragraph 2 of the Lease shall be deleted and replaced with the
following:
2. Premises. Lessor hereby leases to Lessee and Lessee hereby
leases from Lessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property situated in the
County of Santa Xxxxx, State of California, commonly known as 000-000
Xxxxxxx Xxxxxx, Xxxxxxxxx, more fully described on Exhibit A attached
hereto and made a part hereof, consisting of a single-story building
containing approximately 54,280 square feet ("Building"), together with
the exclusive right to use the parking areas, driveways, sidewalks and
other outside areas surrounding the Building (the "Outside Area").
2. Term. Paragraph 3.1 of the Lease is amended to extend the term of
the Lease for a period of seven (7) years, so that the term shall expire on
November 30, 2003.
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3. Rent. Paragraph 4 of the Lease is amended to provide that rent shall
be paid at $32,923.20 per month (34,656 square feet x $0.95 per square foot)
from December l, 1996 until the date which is 60 days after possession of the
Additional Premises is tendered to Lessee; at that time rent will be paid at
$51,566.00 per month, i.e., 54,280 square feet x $0.95 per square foot.
Thereafter, rent shall be paid in accordance with the following schedule:
Months of Term Monthly Rent
-------------- ------------
Possession of Additional Premises
plus 60 days - Nov 30, 1998 $51,566.00/month
Dec l, 1998 - Nov 30, 2000 $55,908.00/month
Dec l, 2000 - Nov 30, 2002 $60,251.00/month
Dec l, 2002 - Nov 30, 2003 $65,136.00/month
4. Security Deposit. Paragraph 5 of the Lease is amended to provide
that, as of the date that Tenant takes possession of the Additional Space, the
Security Deposit shall be increased to $50,000.00. Within ten (10) days after
Tenant takes possession of the Additional Space, Lessee shall deliver to Lessor
the sum of $29,206.00 to increase the Security. Deposit to such amount.
5. Maintenance, Repairs and Alterations. As of the Effective Date,
paragraph 7.1 of the Lease shall be deleted and replaced with the following:
Subject to the obligations of Lessor as hereinafter set forth,
Lessee shall at all times and at its own expense maintain and
repair all parts of the Premises in good, order, condition and
repair, including all plumbing, heating, air conditioning,
ventilating, electrical, and lighting facilities and equipment
within or serving the Premises; fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors,
windows, doors, entrances, plateglass and skylights; and all
landscaping, driveways, parking lots, sidewalks, fences, signs
and exterior lighting located on the Premises. Lessee shall
obtain preventive maintenance contracts for the heating, air
conditioning and ventilating ("HVAC") system with monthly
service in accordance with manufacturer recommendations, which
shall provide for and include replacement of filters, oiling
and lubricating of machinery, parts replacement, adjustment of
drive belts, oil changes and other preventive maintenance,
including annual maintenance of duct work, interior unit
drains and caulking at sheet metal, and recaulking of jacks
and vents on an annual basis. Lessee shall have the benefit of
all warranties available to Lessor regarding the equipment in
the HVAC system. Lessor may, at Lessor's election, have the
HVAC system inspected by a licensed HVAC contractor at the
expiration of the term to confirm whether Lessee has
maintained the HVAC system as required
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herein. The cost of such inspection shall be paid by Lessee
within thirty (30) days after Lessor's written request
therefor. Additionally, if any repairs and/or replacements to
the HVAC system are recommended by the contractor, Lessee
shall perform such repairs and/or replacements and shall
provide Lessor with evidence that such repairs and/or
replacements have been completed in accordance with the
contractor's recommendations.
The first sentence of paragraph 7.2 shall be deleted and replaced with the
following:
On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in
good condition and repair, ordinary wear and tear and damage
by fire or other casualty excepted. Lessee shall have the
right to remove Lessee's trade fixtures, furnishings,
equipment and other personal property from the Premises at any
time prior to the expiration or sooner termination of this
Lease.
The following language is added to paragraph 7.3:
If Lessor fails to perform any of its repair and maintenance
obligations under this paragraph 7, and such failure continues
for more than thirty (30) days after written notice from
Lessee, Lessee shall have the right, but not the obligation,
to perform such repairs and/or maintenance. If any repairs are
required to the roof of the Building, Lessee shall have the
right to perform such repairs if Lessor fails to do so within
ten (10) days after written notice from Lessee. In either
case, Lessor shall reimburse Lessee for the reasonable costs
incurred by Lessee to complete such repairs and/or maintenance
within thirty (30) days after receipt of Lessee's written
demand therefor, together with copies of paid invoices
evidencing the costs incurred by Lessee. If Lessor fails to
reimburse Lessee for such costs within such thirty (30) day
period, such amount shall accrue interest at the maximum rate
permitted by law from the date of expenditure by Lessee until
reimbursed by Lessor. Any repairs and/or maintenance permitted
herein shall be performed in a good and workmanlike manner by
licensed and insured contractors. If Lessor objects to the
repairs and/or maintenance performed by Lessee or the expenses
incurred by Lessee in performing such work, Lessor shall
deliver written notice of Lessor's objection to Lessee within
thirty (30) days after Lessor's receipt of Lessee's invoice
evidencing the expenses incurred by Lessee. Lessor's notice
shall set forth in reasonable detail Lessor's
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reasons for its claim that such repairs and/or maintenance
were not required or were not Lessor's obligation under the
terms of this Lease, and/or the reasons for Lessor's dispute
of the expenses incurred by Lessee in performing such work. If
Lessor and Lessee fail to resolve any such dispute within
thirty (30) days after Lessor has notified Lessee of Lessor's
objections, the matter shall be resolved by binding
arbitration in accordance with the provisions of California
Code of Civil Procedure Sections 1280 et seq.
As of the Effective Date, paragraph 7.4 shall be deleted and replaced with the
following:
Lessor shall at all times maintain the roof, foundation,
exterior walls of the Building (excluding interior surfaces of
exterior walls), and the structural condition of interior
loadbearing walls, in good order, condition and repair. Lessor
shall have no obligation to maintain or repair any other
portion of the Building or the Outside Area.
Lessor shall service all HVAC units in the Building prior to
delivering possession of the Additional Premises to Lessee so
that the HVAC system serving the Building shall be in good
working order and repair when Lessee assumes responsibility
for the maintenance and repair of HVAC system as provided in
paragraph 7.1. Lessee shall have thirty (30) days after
possession of the Additional Premises is delivered to Lessee
to inspect the HVAC system serving the Building. If the HVAC
system is not in good operating condition, Lessor shall
promptly perform such maintenance and/or repairs as are
necessary to the place the HVAC system in good operating
condition. In addition, prior to delivering possession of the
Additional Premises to Lessee, Lessor and Lessee shall inspect
the electrical system in the Additional Premises to determine
whether any repairs to such electrical system are necessary to
eliminate any electrical hazards and to determine whether the
existing electrical system in the Additional Premises was
installed in accordance with applicable code requirements.
Based upon the results of such inspection, Lessor and Lessee
shall agree upon the repairs and/or improvements to be made to
the electrical system in the Additional Premises and Lessor
shall perform such work at Lessor's expense as soon as
reasonably possible.
Subject to Lessor's completion of the foregoing, by taking
possession of the Additional Premises Lessee shall be deemed
to have accepted the Additional Premises and all
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improvements therein in their present condition, "as is,"
subject to all applicable zoning, municipal, county and state
laws, ordinances and regulations governing and regulating the
use of the Additional Premises. Lessee acknowledges that,
except as expressly stated herein, neither Lessor nor Lessor's
agents have made any representation or warranty as to the
condition of the Additional Premises nor any representation or
warranty as to the present or future suitability of the
Additional Premises for the conduct of Lessee's business.
Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the
right to make repairs at Lessor's expense or to terminate this
Lease because of Lessor's failure to keep the Premises in good
order, condition and repair.
The first two sentences of paragraph 7.5(a) of the Lease are deleted and
replaced with the following:
Lessee shall not, without Lessor's prior written consent,
which consent shall not be unreasonably withheld, delayed or
conditioned, make any alterations, improvements, additions, or
Utility Installations, in, on or about the Premises, except
for (i) nonstructural alterations not exceeding in the
aggregate $50,000.00 during the term of this Lease, and (ii)
alterations, improvements or additions in or to the Outside
Area not exceeding in the aggregate $10,000.00 during the term
of this Lease. In any event, whether or not in excess of such
amounts, Lessee shall not make any change or alteration to the
exterior of the Building nor remove any landscaping from the
Outside Area without Lessor's prior written consent. Lessor
hereby consents to Lessee's installation of storage cages in
the Building and/or the Outside Area provided that Lessee
obtains all necessary permits and approvals for such
installation and installs such storage cages in compliance
with all applicable laws.
6. Property Insurance. As of the Effective Date, the third and fourth
sentences of paragraph 8.1 shall be deleted and replaced with the following:
Whether the insuring party is the Lessor or the Lessee, Lessee
shall, as additional rent for the Premises, pay the cost of
all insurance required hereunder, except for that portion of
the cost attributable to Lessor's liability coverage in excess
of $1,000,000 per occurrence. If Lessor is the insuring party,
Lessee shall, within ten (10) days following demand by
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Lessor, reimburse Lessor for the cost of the insurance so
obtained.
As of the Effective Date, Paragraph 8.3(a) of the Addendum to Lease shall be
deleted.
7. Real Property Taxes. As of the Effective Date, Paragraph 10.1 of the
Lease and the Addendum to Lease shall be deleted and replaced with the
following:
Lessee shall pay the real property tax, as defined in
paragraph 10.2, applicable to the Premises during the term of
this Lease. All such payments shall be made at least ten (10)
days prior to the delinquency date of such payment. Lessee
shall promptly furnish Lessor with satisfactory evidence that
such taxes have been paid. If any such taxes paid by Lessee
shall cover any period of time prior to or after the
expiration of the term hereof, Lessee's share of such taxes
shall be equitably prorated to cover only the period of time
within the tax fiscal year during which this Lease shall be in
effect, and Lessor shall reimburse Lessee to the extent
required. If Lessee shall fail to pay any such taxes, Lessor
shall have the right to pay the same, in which case Lessee
shall repay such amount to Lessor with Lessee's next rent
installment together with interest at the maximum rate then
allowable by law.
8. Utilities. As of the Effective Date, paragraph 11 of the Addendum to
Lease shall be deleted.
9. Late Charges. The second sentence of paragraph 13.4 is deleted and
replaced with the following:
Accordingly, if any payment of rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee
within seven (7) days after such amount shall be due, then,
without any requirement for notice to Lessee, Lessee shall pay
to Lessor a late charge equal to 6% of such overdue amount.
10. Subordination. Paragraph 30(a) of the Lease is amended by adding
the following as the last sentence of that paragraph:
The nondisturbance and recognition agreement shall also
provide that, in the event of a foreclosure of the mortgage or
deed of trust, Lessee shall have the right to apply the
security deposit paid to Lessor by Lessee pursuant to
paragraph 5 of the Lease against the rent due for the last
month of the term, notwithstanding the fact that the mortgagee
or beneficiary or
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its successors or assigns may not have received the security
deposit from Lessor.
11. Consents. Paragraph 36 of the Lease is deleted and replaced with
the following:
Except for paragraph 33 hereof, wherever in this Lease the
consent of one party is required to an act of the other party,
such consent shall not be unreasonably withheld, delayed or
conditioned.
12. Parking. Paragraph 48 of the Lease shall be deleted and replaced
with the following:
As of the date that Lessor delivers possession of the
Additional Premises to Lessee, Lessee shall have the exclusive
right to use all parking spaces within the Outside Area of the
Premises.
13. Right of First Refusal. Paragraph 49 of the Lease is deleted.
14. Lessee's Remedy. The Lease shall be amended by adding the following
as paragraph 52:
52. Lessee's Remedy. If, as a consequence of a
default by Lessor under this Lease, Lessee recovers a money
judgment against Lessor, such judgment shall be satisfied only
out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and
interest of Lessor in the Premises and out of rent or other
income from such property received by Lessor or out of
consideration received by Lessor from the sale or other
disposition of all or any part of Lessor's right, title or
interest in the Premises, and neither Lessor nor its partners
shall be liable for any deficiency.
15. Option to Extend. The Lease shall be amended by adding the
following as paragraph 53:
53. Option to Extend.
53.1 Option Period. Provided that Lessee is not in
default hereunder, either at the time of exercise or at the
time the extended term commences, Lessee shall have the option
to extend the initial term of this Lease for two (2)
additional periods of five (5) years each (each an "Option
Period") on the same terms, covenants and conditions provided
herein,
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except that upon such renewal the monthly rent due hereunder
shall be determined pursuant to Paragraph 53.2. Lessee shall
exercise its option by giving Lessor written notice ("Option
Notice") at least one hundred eighty (180) days but not more
than two hundred seventy (270) days prior to the expiration of
the initial term of this Lease or the prior Option Period, as
applicable.
53.2 Option Period Monthly Rent. The monthly rent for
each Option Period shall be determined as follows:
(a) The parties shall have fifteen (15) days
after Lessor receives the Option Notice within which to agree
on the monthly rent for the Option Period in question based
upon the then fair market rental value of the Premises as
defined in Paragraph 53.2(b). If the parties agree on the
monthly rent for the Option Period within fifteen (15) days,
they shall immediately execute an amendment to this Lease
stating the monthly rent for the Option Period. If the parties
are unable to agree on the monthly rent for the Option Period
within fifteen (15) days, then, the monthly rent for the
Option Period shall be the then current fair market rental
value of the Premises as determined in accordance with
Paragraph 53.2(c).
(b) The "then fair market rental value of
the Premises" shall be defined to mean the fair market rental
value of the Premises as of the commencement of the Option
Period, taking into consideration the uses permitted under
this Lease, the quality, size, design and location of the
Premises, and the rent for comparable buildings located in
Sunnyvale. In no event shall the fair market monthly rental
value of the Premises for the Option Period be less than the
monthly rent last payable under the Lease.
(c) Within seven (7) days after the
expiration of the fifteen (15) day period set forth in
Paragraph 53.2(a), each party, at its cost and by giving
notice to the other party, shall appoint a real estate
appraiser with at least five (5) years' full-time commercial
appraisal experience in the area in which the Premises are
located to appraise and set the monthly rent. If a party does
not appoint an appraiser within ten (10) days after the other
party has given notice of the name of its appraiser, the
single appraiser appointed shall be the sole appraiser and
shall set the monthly rent. If the two (2) appraisers are
appointed by the parties as stated in this paragraph, they
shall meet promptly and attempt to set the monthly rent. If
they are unable to agree within thirty (30)
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days after the second appraiser has been appointed, they shall
attempt to elect a third appraiser meeting the qualifications
stated in this paragraph within ten (10) days after the last
day the two (2) appraisers are given to set the monthly rent.
If they are unable to agree on the third appraiser, either of
the parties to this Lease, by giving ten (10) days' notice to
the other party, can apply to the then Presiding Judge of the
Santa Xxxxx County Superior Court for the selection of a third
appraiser who meets the qualifications stated in this
paragraph. Each of the parties shall bear one-half (1/2) of
the cost of appointing the third appraiser and of paying the
third appraiser's fee. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity
for either party.
Within thirty (30) days after the selection of the
third appraiser, a majority of the appraisers shall set the
monthly rent. If a majority of the appraisers are unable to
set the monthly rent within the stipulated period of time, the
three (3) appraisals shall be added together and their total
divided by three (3); the resulting quotient shall be the
monthly rent.
If, however, the low appraisal and/or the high
appraisal are/is more than ten percent (10%) lower and/or
higher than the middle appraisal, the low appraisal and/or the
high appraisal shall be disregarded. If only one appraisal is
disregarded, the remaining two (2) appraisals shall be added
together and their total divided by two (2); the resulting
quotient shall be the monthly rent. If both the low appraisal
and the high appraisal are disregarded as stated in this
paragraph, then only the middle appraisal shall be used as the
result of the appraisal. After the monthly rent has been set,
the appraisers shall immediately notify the parties and the
parties shall amend this Lease to set forth such amount.
16. Delay in Possession of Additional Space. The Additional Premises
are currently occupied with a lease that expires on November 30, 1996. If Lessor
is unable to deliver possession of the Additional Premises to Lessee by December
1, 1996, Lessor shall use all commercially reasonable efforts, including
litigation, to regain possession of the Additional Premises as soon as legally
possible. However, if for any reason Lessor cannot deliver possession of the
Additional Premises to Lessee by December 1, 1996, Lessor shall not be subject
to any liability therefor, nor shall such failure affect the validity of this
Lease or the obligations of Lessee hereunder or extend the term of this Lease,
but in such event Lessee shall not be obligated to pay rent for the Additional
Premises until 60 days after possession of the Additional Premises is tendered
to Lessee, and Lessor shall reimburse Lessee for all reasonable attorneys' fees
incurred by Lessee as a direct result of Lessee's holdover of the premises at
000 Xxxxxxx Xxxxxx due to Lessor's inability to deliver
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possession of the Additional Premises to Lessee by December 1, 1996, plus the
difference between the rent Lessee pays for such premises during Lessee's
holdover thereof and $18,642.80 per month (19,624 square feet x $0.95 per square
foot) for the period of such holdover, both amounts to be prorated for any
partial months.
17. Assignment and Assumption. ST Microwave Corporation hereby
assigns and transfers to Signal Technology Corporation all of its right, title
and interest in and to the Lease arising from and after the Effective Date.
Signal Technology Corporation hereby accepts the assignment and assumes and
agrees to perform as a direct obligation to Lessor all obligations of ST
Microwave Corporation as Lessee under the Lease arising from and after the
Effective Date.
Except as set forth in this First Amendment, the Lease is unmodified
and in full force and effect.
LESSOR LESSEE
Benicia Associates, a California Signal Technology Corporation, a
general partnership Delaware corporation
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxxx
------------------------------ ----------------------------
Xxxxx X. Xxxxxx,
General Partner Its CEO
----------------------------
ASSIGNOR
ST Microwave Corporation, a
Delaware corporation
By /s/ Xxxx X. Xxxxxxxx
----------------------------
Its Sole Director
----------------------------
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