EXHIBIT 10.20
LEASE AGREEMENT
Existing Building
(Multi-Tenant)
STATE OF TEXAS
COUNTY OF Xxxxxx
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This Lease Agreement ("this lease"), made and entered into by and between
Industrial Properties Corporation ("Landlord") and SI Diamond Technology, Inc.
("Tenant");
1. Premises and Terms. In consideration of the obligation of Tenant to
pay rent as provided in this lease, and in consideration of the other terms,
provisions, and covenants of this lease, Landlord hereby demises and leases to
Tenant, and Tenant hereby takes from landlord certain premises described and
delineated on the demising plan contained in Exhibit A attached hereto and
incorporated herein by this reference, situated within a building (the
"Building") located on certain real property (the "Land") within the above-named
County and State and more particularly described as follows:
Approximately 9,667 square feet of space located at 0000 Xxxxxxxx
Xxxxxxxxx, Suites 107, 108 and 109, Xxxxxx, Xxxxxx County, Texas,
situated on xxx 0, xxxxx X, xxxxxxxxxxxxx xx Xxxxxxxxxx Xxxxxxx,
section 3,
together with the other Improvements erected upon said premises (the said
premises and the Improvements located therein being hereinafter referred to as
the "Premises").
To Have and to Hold the Premises, subject to the other terms and provisions
of this lease, for a term commencing on June 1, 1998 and ending 60 months
thereafter. Tenant acknowledges that it has inspected the Premises and accepts
the Premises in their present condition as suitable for the purpose for which
the Premises are leased. Tenant further acknowledges that no representations as
to the repair of the Premises, nor promises to alter, remodel, or improve the
Premises, have been made by Landlord, except for those expressly set forth in
this lease.
2. Rent. Tenant agrees to pay to Landlord rent for the Premises, without
deduction, set off, or abatement, for the term, at the rate of Seven thousand
fifty-six dollars and 91/100 **** Dollars ($7,056.91) per month. One such
monthly installment shall be due and payable on the commencement date recited
above, and a like monthly installment shall be due and payable in advance
without demand on or before the same day of each succeeding month during the
hereby demised term. However, if such commencement date should be a date other
than the first day of a calendar month, there shall be due and payable on said
commencement date as rent for the balance of the calendar month during which
said commence date shall fall, a sum equal to that portion of the rent for a
full month as herein provided which the number of days from said commencement
date to the end of the calender month during which said commencement date shall
fall bears to the total number of days in such month, and all succeeding
installments of rent shall be payable in advance on or before the first day of
each succeeding calendar month during the term. In addition, Tenant agrees to
deposit with Landlord on the date hereof the sum of Seven thousand two hundred
fifty and 25/100 Dollars ($7,250.25), which sum shall be held by Landlord,
without obligation for interest, as security for the performance of Tenant's
covenants and obligations under this lease, it being expressly understood and
agreed that such deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon the occurrence of any
event of default by Tenant, Landlord may, from time to time, without prejudice
to any other remedy provided herein as provided by law, use such fund to the
extent necessary to make good any arrears of rent and any other damage, injury,
expense, or liability caused by such event of default; and Tenant shall pay to
Landlord on demand the amount so applied in order to restore the security
deposit to its original amount. If there be no event of default by Tenant in
existence, any remaining balance of such deposit shall be returned by Landlord
to Tenant upon expiration of this lease. Notwithstanding anything contained in
this lease to the contrary, all amounts payable by Tenant to or on behalf of
Landlord under this lease, whether or not expressly denominated
as rent, shall constitute rent for the purposes of this lease and for
purposes of section 502(b)(6) (or comparable provision of any future
bankruptcy law) of the Federal Bankruptcy Code, 11 U.S.C. Sections 101 et
seq. (the "Bankruptcy Code").
3. Disclaimer of Warranties. BY EXECUTION OF THIS LEASE, TENANT
ACKNOWLEDGES AND AGREES THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE,
NEITHER LANDLORD NOR ANY OFFICER, PARTNER, AGENT, EMPLOYEE, OR REPRESENTATIVE OF
LANDLORD MAKES OR HAS MADE ANY WARRANTIES OR REPRESENTATIONS OR ANY KIND OR
CHARACTER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PREMISES, OR ANY PORTION
THEREOF, ITS PHYSICAL CONDITION, INCOME TO BE DERIVED THEREFROM, OR EXPENSES TO
BE INCURRED WITH RESPECT THERETO, ITS FITNESS OR SUITABILITY FOR ANY PARTICULAR
USE, OR ANY OTHER MATTER OR THING RELATING TO OR AFFECTING THE SAME. THERE ARE
NO ORAL AGREEMENTS, WARRANTIES, OR REPRESENTATIONS COLLATERAL TO OR AFFECTING
THE PREMISES OR ANY PORTION THEREOF, EXCEPT AS MAY BE OTHERWISE EXPRESSLY SET
FORTH IN THIS LEASE. LANDLORD AND TENANT EACH HEREBY AGREE THAT THE PREMISES
ARE LEASED IN AN AS IS CONDITION WITH ANY AND ALL LATENT OR PATENT DEFECTS. IN
NO EVENT SHALL TENANT HAVE THE RIGHT TO RECOVER CONSEQUENTIAL DAMAGES. TENANT
BY EXECUTION OF THIS LEASE, EXPRESSLY AGREES THAT LANDLORD HAS NOT MADE AND DOES
NOT MAKE ANY WARRANTIES WITH RESPECT TO THE PREMISES UPON WHICH AN ACTION UNDER
THE TEXAS DECEPTIVE TRADE PRACTICES ACT COULD BE BASED.
4. Use.
A. The Premises shall be used, to the extent permitted by applicable law,
only for general office purposes and, to the extent applicable, for the purpose
of receiving, storing, shipping, and selling (other than retail) products,
materials, and merchandise made and/or distributed by Tenant and for such other
lawful purposes as may be incidental thereto. Tenant shall at its own cost and
expense obtain and at all times maintain any and all licenses and permits
necessary for any such use. Tenant shall comply with all governmental laws,
ordinances, and regulations applicable to the use of the Premises by tenant and
shall promptly comply with all governmental orders and directives for the
correction, prevention, and abatement of nuisances in, upon, or connected with
the use of the Premises by tenant all at Tenant's sole expense. Without
Landlord's prior written consent, Tenant shall not receive, store, or otherwise
handle any product, material, or merchandise which is explosive or highly
inflammable or any material which may be corrosive or otherwise damaging to the
Premises or any appurtenances thereto. Tenant will not, without Landlord's
approval, permit the Premises to be used for any purpose which would render the
insurance thereon void or the insurance risk more hazardous or the premiums
therefor more expensive. In the event any such use of the Premises, or any part
thereof, whether approved by Landlord or not, shall ever cause the insurance
rates for policies carried by Landlord to increase, Tenant shall pay on demand
from Landlord, as additional rent, the full amount by which such insurance rates
increased solely as a result of Tenant's use, without regard to whether such
policy covers areas other than the Premises so long as such other covered areas
are adjacent thereto or otherwise affected by Tenant's hazardous use. Further,
Tenant will not introduce into the Premises or use therein any equipment or
fixtures which might be reasonably expected, due to excess weight, vibration, or
any other characteristic, to cause damage to the Premises or undue interference
with the occupancies of adjacent premises. Additionally, Tenant shall not store
any products, materials, or merchandise outside the exterior walls or interior
demising walls of the Premises without Landlord's prior written consent.
B. Without limiting the generality of the provisions of Paragraph 4.A
above, Tenant expressly agrees that (I) no activity will be conducted on the
Premises that will use or produce any "Hazardous Substance" (as hereinafter
defined), except for such activities as are part of the ordinary course of
Tenant's business activities (the "Permitted Activities"), provided said
Permitted Activities are at all times conducted in accordance with all
Environmental Laws and further provided that the Permitted Activities have been
approved in advance in writing by Landlord which approval shall not be
unreasonably withheld or delayed after disclosure to Landlord by Tenant of the
Hazardous Substances involved; (II) the Premises will not be used in any manner
for the storage of any Hazardous Substances except for the temporary storage of
such materials as are used in the ordinary course of Tenant's business (the
"Permitted Materials"), provided such Permitted Materials are at all times
properly stored in a manner and
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location meeting all Environmental Laws and further provided that the storage
of such Hazardous Substances is approved which approval shall not be
unreasonably withheld or delayed in advance in writing by Landlord after
disclosure to Landlord by Tenant of the Hazardous Substances involved; (III)
no portion of the Premises will be used as a landfill or a dump; (IV) Tenant
will not install any underground tanks of any type on the Premises or the
Land; (V) Tenant will not permit any Hazardous Substances to be brought onto,
stored, processed, disposed of on, released, discharged from (including
ground water contamination) or otherwise handled on the Premises, except for
the Permitted Materials which are used and disposed of (at a location other
than on the Land or Premises) in accordance with Environmental Law, and if so
brought or found located thereon, the same shall be immediately removed by
Tenant, at Tenant's sole cost and expense, with proper disposal (at a
location other than on the Land or Premises), and all required cleanup
procedures shall be diligently undertaken by Tenant pursuant to all
Environmental Laws. Landlord may condition any approval of Permitted
Activities or of Permitted Materials on compliance with such terms and
conditions as Landlord may reasonably deem appropriate, and may refuse to
grant its approval if the purposed Permitted Activities or the proposed
Permitted Materials require a permit, license, registration, hazardous waste
generator identification number, or other filing or approval under any
Environmental Law, or if, in Landlord's reasonable judgment, the propose
Permitted Activities or the proposed Permitted Materials would pose any
material adverse risk [see addendum 1]. Tenant shall immediately notify
Landlord should Tenant become aware of any Hazardous Substance or other
environmental problem or liability with respect to the Premises. Reasonable
amounts of copy machine toners and other normal office supplies as reasonably
necessary for the conduct of Tenant's regular office functions within the
Premises shall be considered Permitted Materials, and the normal use of such
office supplies and materials in the conduct of normal office operations
shall be considered Permitted Activities. For purposes of this lease
"Hazardous Substances" means any substance (i) the presence of which requires
removal, remediation, or investigation under any Environmental Law, (ii) that
is defined or classified as a hazardous waste, hazardous material, pollutant,
contaminant, or toxic or hazardous substance under any Environmental Law,
including without limitation, any hazardous substance within the meaning of
Section 101(14) of the Comprehensive Environmental Response, Compensation,
and Liability Act, as amended, 42 U.S.C. Section 9601(14), or (iii) that
contains or consists of gasoline, diesel fuel, oil, fuel oil, or other
petroleum hydrocarbons. Tenant shall indemnify and hold Landlord (and any
mortgagee and trustee under any deed of trust or mortgage on the Premises)
harmless from all claims, demands, actions, liabilities, costs (including
attorney's fees), expenses, damages and obligations of any nature arising
from or as a result of the use of the Premises by Tenant, its invitees,
agents, contractors or employees in violation of the foregoing provision
relating to Hazardous Substances. The foregoing indemnification shall
survive the termination or expiration of this lease.
5. Taxes.
A. Subject to the provisions of Paragraph 5.B, Landlord agrees to pay
before they become delinquent all taxes, assessments (both general and special),
or governmental charges (hereinafter collectively referred to as "taxes")
lawfully levied or assessed against the Premises or any part thereof; provided,
however, Landlord may, at its sole cost and expense (in its own name or in the
name of both Landlord and Tenant as Landlord may deem appropriate) dispute and
contest the same, and in such case such disputed item need not be paid until
finally adjudged to be valid and any right to appeal has lapsed. At the
conclusion of such contest, Landlord shall pay the items contested to the extent
that they are held valid, together with all items, court costs, interest, and
penalties relating thereto.
B. The maximum amount of taxes levied or assessed against the Premises
during any one real estate tax year to be paid by Landlord shall be those taxes
levied or assessed during the 1997 real estate tax year (the "maximum tax
amount"). If in any real estate tax year during the term, or any renewal or
extension, the taxes levied or assessed against the Building and Land are in an
amount which causes the portion thereof allocable to the Premises to exceed the
maximum tax amount, Landlord shall notify Tenant of the amount of taxes actually
paid by Landlord for such tax year, and the amount of the excess which is
payable by Tenant which excess shall be prorated between Tenant and all other
tenants of the Building based on Tenant's Share (hereinafter defined). Tenant
shall pay to Landlord on or before the payment date set forth in such notice
(which date shall be not less than ten (10) days from
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the date of such notice), as additional rent, the amount of such excess; and
the failure to pay such excess when due shall be treated as a failure to make
payment of rent when due. Any payment to be made pursuant to this Paragraph
5.B with respect to the real estate tax year in which this lease commences or
terminates shall bear the same ratio to the payment which would be required
to be made for the full tax year as that part of such tax year covered by the
term of this lease bears to a full tax year. Landlord's real estate tax
statements with respect to the Premises shall be made available for
inspection by Tenant At Landlord's offices during Landlord's business hours.
6. Landlord's Repair and Common Area Obligations.
A. Landlord shall at its expense maintain only the roof, foundation, and
the structural soundness of the exterior walls of the Building in good repair,
reasonable wear and tear excepted. Tenant shall repair and pay for any damage
caused by the negligence or willful misconduct of Tenant, or Tenant's employees,
agents, or invitees, or caused by Tenant's default hereunder. The term "walls"
as used herein shall not include windows, glass or plate glass, doors, or
special store fronts. Tenant shall promptly give Landlord written notice of any
defect or need for repairs, after which Landlord shall have a reasonable
opportunity to repair same or cure such defect. Landlord's liability hereunder
shall be limited to the cost of such repairs or curing such defect. In the
event the Premises have air conditioning installed therein on the date of this
lease, then Landlord represents that on the commencement date of this lease such
air-conditioning system shall be in good operating condition; provided, however,
that during the term of this lease Tenant shall at its own cost and expense
maintain such system in good operating condition, shall make all necessary
repairs, and upon termination of this lease shall deliver such system to
Landlord in good operating condition, ordinary wear and tear excepted.
B. Subject to the provisions of Paragraph 6.C, Landlord shall take
reasonable care of the grounds around the Building including exterior lighting,
mowing of grass, care of shrubs and trees, and general landscaping and will keep
the parking areas, driveways, and alleys in a reasonably clean, usable, and
sanitary condition.
C. In addition to and separate from the rent payable under Paragraph 2,
Tenant shall pay to Landlord Tenant's Share (hereinafter defined) of Maintenance
and Use Charge (as hereinafter defined), as adjusted from time to time, pursuant
to the provisions hereinafter stated. For purposes of this lease, the following
terms shall have the hereinafter indicated meanings:
(a) The phrase "Maintenance and Use Charge" shall mean, for each
calendar year (or portion thereof) during the term of this lease, the
aggregate of all costs, expenses and liabilities of every kind or nature
paid or incurred by Landlord in connection with the performance of its
obligations under Paragraph 6.B. In no event shall the phrase "Maintenance
and Use Charge" include any expenditure of cost attributable to capital
improvements or capital maintenance items.
(b) The term "Tenant's Share" shall refer to a fraction, the
numerator of which is the floor area (in square feet) of the Premises and
the denomination of which is the aggregate leaseable floor area (in square
feet) in all buildings (including the Building) now or hereafter situated
on the Land as of the first day of January for the relevant calendar year;
Landlord and Tenant hereby stipulate that Tenant's Share is 19.3%.
D. Monthly during the first year of the term of this lease, Tenant will
pay Landlord the sum of $193.34 per month, monthly in advance, as an initial
estimate of the Maintenance and Use Charge payable at the same time and place as
the rent is payable; provided, however, if the lease term does not begin on the
first day of a calendar month, Tenant shall pay a pro rata portion of such sum
for such partial month; such applicable amount being herein referred to as the
"Estimated Charge." Landlord shall have the right to adjust such monthly
estimate on an annual basis pursuant to Paragraph 6.E hereof.
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E. At the end of each calendar year occurring during the term of this
lease (and subsequent to the expiration or other termination of this lease if
such occur on a date other than the last day of a calendar year), Landlord will
give Tenant notice of the total amount(s) paid by Tenant for the relevant
calendar year together with the actual amount of Tenant's Share of the
Maintenance and Use Charge for such calendar year. If the actual amount of
Tenant's Share of the Maintenance and Use Charge with respect to such period
exceeds the aggregate amount(s) previously paid by Tenant with respect thereto
during such period, Tenant shall pay to Landlord the deficiency within ten (10)
days following notice from Landlord. However, if the aggregate amount(s)
previously paid by Tenant with respect thereto exceeds Tenant's Share of the
Maintenance and Use Charge for such period, then, at Landlord's election, such
surplus (net of any amounts then owing by Tenant to Landlord) shall be credited
against the next ensuing installment of the Maintenance and Use Charge due
hereunder by Tenant, or Landlord may refund such net surplus to Tenant within
thirty (30) days following Landlord's calculation of Tenant's Share of the
Maintenance and Use Charges with respect to each calendar year. Landlord shall
be entitled to adjust, in its reasonable discretion, the Estimated Charge, such
adjusted Estimated Charge to be payable on the first day of the second calendar
month immediately following Landlord's notice of such adjustment and to remain
in effect until further notice from Landlord.
7. Tenant's Repairs. Tenant shall, at its own cost and expense, keep all
other parts of the Premises, including but not limited to, windows, glass and
plate glass, doors (including overhead doors), any special store front, interior
walls and finish work, floors and floor covering, heating, ventilating and
air-conditioning systems, gutters, downspouts and protective posts therefor,
curbs, dock boards, dock bumpers, dock levelers, steps and landings, plumbing
work and fixtures, and gas, electric, water, and other utility lines, in good
condition and repair, ordinary wear and tear excepted, and shall take good
care of the Premises and its fixtures and suffer no waste. Tenant shall keep
the Premises free of all pest infestation, including, but not limited to,
termites and rodents, and shall maintain a regular pest control prevention
program. Except as set forth in the last sentence of this Xxxxxxxxx 0,
Xxxxxx shall not be obligated to repair any damage caused by fire, tornado,
or other casualty covered by items set forth under the extended coverage
provisions of Landlord's fire insurance policy. In the event the Premises
are served by rail track or spur track, then Tenant, notwithstanding the
provisions of any rail track agreements to the contrary, shall be liable and
responsible for maintaining, or reimbursing the rail carrier for the
maintenance of, the portion of the track and related facilities adjacent to
the Premises. Tenant shall also be obligated to repair any damage to the
Premises or any part thereof caused by the negligent Act or willful
misconduct of Tenant, its agents, customers, employees, or invitees
regardless of whether Tenant would otherwise be obligated to make such repair
by the provisions hereof.
8. Alterations. Tenant shall not make any major alterations, additions,
or improvements to the Premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. Tenant may,
without the consent of Landlord, but at Tenant's own cost and expense and in a
good, workmanlike manner, make such minor alterations, additions, or
improvements or erect, remove, or alter such partitions, or erect such shelves,
bins, machinery, and trade fixtures as it may deem advisable, without altering
the basic character of the Building or improvements, without affecting the
structural or loadbearing elements of the Building or improvements, without
overloading or damaging such Building or improvements or any utility systems
servicing same, and without interference to the other occupants of the Building
or any other of Landlord's tenants, and in each case complying with all
applicable governmental laws, ordinances, regulations, and other requirements.
At the termination of this lease, Tenant shall, if Landlord so elects, and at
Tenant's sole cost and expense, remove all alterations, additions, improvements,
and partitions erected by Tenant and restore the Premises to their original
condition; otherwise, such improvements shall be delivered to Landlord with the
Premises. All shelves, bins, machinery, and trade fixtures installed by Tenant
may be removed by Tenant at the termination of this lease, if Tenant so elects,
so long as no event of default by Tenant is then in existence, and shall be
removed if required by Landlord. All such removals and restorations shall be
accomplished in a good, workmanlike manner so as not to damage the primary
structure or structural qualities of the Building and other improvements
situated on the Premises. Any fixtures installed in the Premises by Tenant
other than shelves, bins, machinery, and similar trade fixtures shall become the
property of Landlord when installed.
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9. Signs. Tenant shall have the right to install signs upon the exterior
of the Building and other improvements situated on the Premises only when first
approved in writing by Landlord, which approval shall not be unreasonably
withheld or delayed, and subject to any applicable governmental laws,
ordinances, regulations, and other requirements and subject to applicable
restrictive covenants, if any. Tenant shall remove all such signs at the
termination of this lease. Such installations and removals shall be made in
such manner as to avoid injury or defacements of the Building and other
improvements situated on the Premises.
10. Inspection. Landlord and Landlord's agents and representatives shall
have the right to enter and inspect the Premises at any time during reasonable
business hours for the purpose of ascertaining the condition of the Premises or
in order to make such repairs as may be required to be made by Landlord under
the terms of this lease and for the purpose of showing the Premises and the
Building to prospective purchasers. During the period that is six (6) months
prior to the end of the term hereof, Landlord and Landlord's agents and
representatives shall have the right to enter the Premises at any time during
reasonable business hours for the purpose of showing the Premises to prospective
tenants and shall have the right to erect on the Premises a suitable sign
indicating that the Premises are for sale or lease.
11. Utilities. Landlord agrees to provide such water, electricity,
telephone, and other utility service connections into the Premises as may be
presently in place. Tenant shall pay all charges incurred for any utility
services used on or from the Premises and any maintenance charges for utilities,
shall be responsible for any costs associated in any manner with any additional
utility connections to the Premises which Tenant may require, and shall furnish
all electric light bulbs and tubes. Such payments shall be made directly to the
supplier of any utility separately metered (or submetered) to the Premises, or
to Landlord, if any such utilities are not separately submetered or metered.
Landlord shall calculate the cost of Tenant's share of any such utilities on
such equitable basis as may be determined by Landlord with respect to any such
utilities. Landlord shall in no event be liable for any interruption or failure
of utility services on the Premises.
12. Assignment and Subletting.
A. Tenant shall not have the right to assign this lease or to sublet the
whole or any part of the Premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld. Notwithstanding any
assignment or subletting, Tenant shall at all times remain fully responsible and
liable for the payment of the rent herein specified and for compliance with all
of the other obligations imposed on Tenant under the terms, provisions, and
covenants of this lease. Upon the occurrence of an "event of default" as
hereinafter defined, if the Premises or any part thereof are then assigned or
sublet, Landlord, in addition to any other remedies herein provided, or provided
by law, may at its option collect directly from such assignee or subtenant all
rents or payments becoming due to Tenant under such assignment or sublease and
apply such rent or payment against any sums due to Landlord by Tenant. No such
collection shall be construed to constitute a novation of a release of Tenant
from the further performance of its obligations under this lease. Landlord
shall have the right to assign any of its rights under this lease.
B. If Tenant is a corporation, then any transfer of this lease from
Tenant by merger, consolidation or dissolution or any change in ownership or
power to vote a majority of the voting stock in Tenant outstanding at the time
of execution of this instrument (or at any future time) shall constitute an
assignment for the purpose of this lease; provided, however, that acquisition of
all stock of a corporate Tenant by any corporation, the stock of which is listed
on either the New York or American Stock Exchange, or the merger of a corporate
Tenant into such a corporation, the stock of which is so listed, shall not
itself be deemed to be a violation of Paragraph 12 hereof. For purposes of this
Paragraph 12.B, the term "voting stock" shall refer to shares of stock regularly
entitled to vote for the election of directors of the corporation involved.
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C. If Tenant is a general partnership having one or more corporations as
partners or if Tenant is a limited partnership having one or more corporations
as general partners, the provision of the preceding Paragraph 12.B shall apply
to each of such corporations as if such corporation alone had been the Tenant
hereunder.
D. If Tenant is a general partnership, then the transfer of a majority of
the partnership interest of Tenant existing at the time of execution of this
instrument (or at any future time) shall constitute an assignment for the
purpose of this lease. If Tenant is a limited partnership, then the assignment
of all or any portion of the interest of a general partner of Tenant shall
constitute an assignment for the purpose of this lease.
13. Fire and Casualty Damage.
A. If the Premises should be damaged or destroyed by fire, tornado, or
other casualty, Tenant shall give immediate written notice thereof to Landlord.
B. If the Premises or the Building should be totally destroyed by fire,
tornado, or other casualty, or if the premises should be so damaged that
rebuilding or repairs cannot be completed within 200 days after the date upon
which Landlord is notified by Tenant of such damage, this lease shall terminate
and the rent shall be abated during the unexpired portion of this lease,
effective upon the date of the occurrence of such damage.
C. If the Premises or the Building should be damaged by fire, tornado, or
other casualty, but only to such extent that rebuilding or repairs can be
complete within 120 days after the date upon which Landlord is notified by
Tenant of such damage, this lease shall not terminate, but Landlord shall, at
its sole cost and expense, proceed with reasonable diligence to rebuild and
repair such Building to substantially the condition in which it existed prior to
such damage, except that (i) Landlord shall not be required to so rebuild or
repair if less than twelve (12) months remain in the term hereof after the
expiration of such 120 day period, (ii) Landlord shall not be required to
rebuild, repair, or replace any part of the partitions, fixtures, and other
improvements which may have been placed on the Premises by Tenant, and (iii) so
long as Landlord has complied with the provisions hereof relating to insurance
coverage. Landlord shall not be obligated to expend any funds in excess of
available insurance proceeds attributable to such damage in rebuilding the
Premises. If the Premises are untenantable in whole or in part following such
damage, the rent payable hereunder during the period the Premises are
untenantable shall be reduced to such extent as may be fair and reasonable under
all of the circumstances. In the event that Landlord should fail to complete
such repairs and rebuilding within 120 days after the date upon which Landlord
is notified by Tenant of such damages, Tenant may, at its option, terminate this
lease by delivering written notice of termination to Landlord within thirty (30)
days after the expiration of such 120-day period, as Tenant's exclusive remedy,
whereupon all rights and obligations hereunder shall cease and determine.
D. Notwithstanding anything herein to the contrary, in the event the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this lease by delivering written
notice of termination to Tenant, whereupon all rights and obligations hereunder
shall cease and determine.
E. Any insurance which may be carried by Landlord or Tenant against loss
or damage to the buildings and other improvements situated on the Premises shall
be for the sole benefit of the party carrying such insurance and under its sole
control.
F. Each of Landlord and Tenant hereby releases the other from any and all
liability or responsibility to the other or anyone claiming through or under
them by way of subrogation or otherwise for any loss or damage to property
caused by fire or any of the extended coverage casualties covered by the
insurance maintained hereunder, even if such fire or other casualty shall have
been caused by the fault or negligence of the other party, or anyone for whom
such party may be responsible; provided, however, that this release shall be
applicable and in force and effect only with respect to loss or damage occurring
during such time as the releaser's policies contain a clause or
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endorsement to the effect that any release shall not adversely affect or
impair said policies or prejudice the right of the releaser to recover
thereunder. Each of Landlord and Tenant agrees that it will request its
insurance carriers to include in its policies such a clause of endorsement.
G. Landlord covenants and agrees to maintain standard fire and extended
coverage insurance covering the Building (exclusive of any of Tenant's fixtures,
furnishings, and equipment attached thereto or located thereon) in an amount not
less than eighty percent (80%) of the replacement cost thereof. If during the
second full lease year after the commencement date of this lease, or during any
subsequent year of the primary term or any renewal or extension, the insurance
premiums for the fire and extended insurance carried by Landlord shall exceed
the premiums for such insurance for the first full lease year of the term
hereof, Tenant shall pay to Landlord, within fifteen (15) days after receipt by
Tenant of notice of the amount thereof, as additional rent, Tenant's Share of
the amount of such excess; and the failure to pay Tenant's Share of such excess
upon demand shall be treated in the same manner as a failure to make payment of
rent when due.
14. Liability. Landlord shall not be liable to Tenant or Tenant's
employees, agents, patrons, or visitors, or to any other person whomsoever, for
any injury to person or damage in property on or about the Premises caused by
the negligence or misconduct of Tenant, its agents, servants, or employees, or
of any other person entering upon the Premises or caused by the Building and
improvements located on the Premises becoming out of repair, or caused by
leakage of gas, oil, water, or steam or by electricity emanating from the
Premises, or due to any cause whatsoever, and Tenant agrees to indemnify
Landlord and hold it harmless from any loss, expense, or claims, including
attorneys' fees, arising out of any such damage or injury; except that any
injury to person or damage to property caused by the gross negligence of
Landlord or by the failure of Landlord to repair and maintain that part of the
Premises which Landlord is obligated to repair and maintain within a reasonable
time after the receipt of written notice from Tenant of needed repairs or
defects shall be the liability of Landlord and not of Tenant. Tenant shall
procure and maintain throughout the terms of this lease a policy or policies of
insurance, at its sole cost and expense, insuring both Landlord and Tenant
against all claims, demands or actions arising out of or in connection with
Tenant's use or occupancy of the Premises, or by the condition of the Premises,
the limits of such policy or policies to be in an amount not less than
$1,000,000 in respect of any one occurrence and a General Aggregate limit of
$2,000,000, and to be written by insurance companies qualified to do business in
the state in which the Premises are located. Such policies or duly executed
certificates of insurance shall be promptly delivered to Landlord and renewals
thereof as required shall be delivered to Landlord at least ten (10) days prior
to the expiration of the respective policy terms. All such policies shall
contain provisions requiring that the insurer give Landlord not less than thirty
(30) days' prior written notice of the cancellation of such policies.
15. Condemnation.
A. If the whole or any substantial part of the Premises or the Building
or Land upon which the Premises are located should be taken for any public or
quasi-public use under governmental law, ordinance, or regulation, or by right
of eminent domain, or by private purchase in lieu thereof, this lease shall
terminate and the rent shall be abated during the unexpired portion of this
lease, effective when the physical taking of said Premises shall occur. For the
purposes hereof, "substantial part of the Premises" shall be deemed to mean such
portion of the Premises the loss of which would, in Landlord's reasonable
opinion, materially lessen the usefulness of the Premises to Tenant for the
purposes for which Tenant is then using the Premises.
B. If less than a substantial part of the Premises or the Building or
Land upon which the Premises are located shall be taken for any public or
quasi-public use under any governmental law, ordinance, or regulation, or by
right of eminent domain, or by private purchase in lieu thereof, this lease
shall terminate but the rent payable hereunder during the unexpired portion
of this lease shall be reduced to such extent as may be fair and reasonable
under all of the circumstances.
8
C. In the event of any such taking or private purchase in lieu thereof,
Landlord and Tenant shall each be entitled to receive and retain such separate
awards and/or portion of lump sum awards as may be allocated to their respective
interests in any condemnation proceedings.
16. Holding Over. Should Tenant, or any of its successors in interest,
hold over the Premises, or any part thereof, after the expiration of the term of
this lease, as may be renewed or extended, unless otherwise agreed in writing,
such holding over shall constitute and be construed as creating a month-to-month
tenancy only, cancellable at the will of Landlord, at a rental equal to the
greater of (a) the then fair market rental value of the Premises or (b) the
total rental payable for the last month of the term hereof plus fifty percent
(50%) of such amount, payable in full on the first day on which Tenant holds
over and on the first day of each month thereafter during such holdover period.
The inclusion of the preceding sentence shall not be construed as Landlord's
permission for Tenant to hold over.
17. Quiet Enjoyment. Landlord covenants that it now has, or will acquire
before Tenant takes possession of the Premises, good title to the Premises, free
and clear of all liens and encumbrances, excepting only the lien for current
taxes not yet due, such mortgage or mortgages as are permitted by the terms of
this lease, zoning ordinances, and other building and fire ordinances and
governmental regulations relating to the use of such property, and easements,
restrictions and other conditions of record. In the event this lease is a
sublease, then Tenant agrees to take the Premises subject to the provisions of
the prior leases. Landlord represents and warrants that it has full right and
authority to enter into this lease and that Tenant, upon paying the rental and
performing its other covenants and agreements under the terms of this lease,
shall peaceably and quietly have, hold, and enjoy the Premises for the term
hereof without hindrance or molestation from Landlord, or anyone claiming by,
through, or under Landlord, but not otherwise, subject to the terms and
provisions of this lease.
18. Events of Default. The following events shall be deemed to be events
of default by Tenant under this lease:
(a) Tenant shall fail to pay any installment of the rent or
additional rent hereby reserved (including, without limitation, amounts
payable pursuant to Paragraphs 4, 5, 6, 11, and 13 hereof) or shall fail to
perform or discharge any other obligation or liability of Tenant under this
lease requiring the payment of money when any such payment is due.
(b) Tenant shall become insolvent, or shall make a transfer in fraud
of creditors, or shall make an assignment for the benefit of creditors.
(c) Tenant shall file a petition under any section or chapter of the
Bankruptcy Code or under any present or future bankruptcy, insolvency, or
similar law or statute of the United States or any state thereof heretofore
or hereinafter enacted; or Tenant shall have such a petition filed against
it involuntarily and such petition is not withdrawn or otherwise removed
within sixty (60) days of its being filed; or Tenant shall be adjudged
bankrupt or insolvent in proceedings filed against Tenant thereunder.
(d) A receiver, trustee, or custodian shall be appointed for, or
shall take possession of, all or substantially all of the assets of Tenant.
(e) Tenant shall abandon or vacate any substantial portion of the
Premises.
(f) Tenant shall fail to comply with any term, provision, or covenant
of this lease or shall fail to discharge any obligation or liability
hereunder not involving the payment of money, and shall not cure any such
failure within ten (10) days after written notice thereof to Tenant,
provided that if such default is not susceptible to cure within ten (10)
days, Tenant shall be deemed to have cured such default if Tenant has
9
commenced efforts to cure such default within such ten (10) day period and
diligently pursues and completes such curative actions within a reasonably
prompt period of time thereafter.
19. Remedies. Upon the occurrence of any of such events of default
described herein, Landlord shall have the option to pursue any one or more of
the following remedies without any notice or demand whatsoever (Tenant hereby
expressly waiving any such notice or demand):
(a) Terminate this lease, in which event Tenant shall immediately
surrender the Premises to Landlord without any payment therefor, and if
Tenant fails so to do, Landlord may, without prejudice to any other remedy
which it may have for possession or arrearages in rent, enter upon and take
possession of the Premises and expel or remove Tenant and any other person
who may be occupying such Premises or any part thereof, by any lawful
means, whether through judicial process or otherwise, and including the
lawful use of force, if necessary, without being liable for prosecution or
any claim of damages thereof; and Tenant agrees to pay to Landlord on
demand the amount of all loss and damage which Landlord may suffer by
reason of such termination, whether through inability to relet the Premises
on satisfactory terms or otherwise.
(b) Enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying such Premises or
any part thereof, by any lawful means, whether through judicial process or
otherwise, and including the lawful use of force, if necessary, without
being liable for prosecution or any claim for damages therefor, and relet
the Premises, in the name of Landlord or otherwise, for such term or terms
(which may be greater or lesser than the period which would otherwise have
constituted the balance of the term of this lease) and on such conditions
(which may include concessions as Landlord, in its sole discretion, may
determine, and receive the rent therefor. In the event of any such
re-entry or dispossession, Tenant shall not thereby be relieved of its
liability and obligations under this lease, which shall survive any such
re-entry or dispossession, and in that event (i) the rent and other charges
required to be paid by Tenant up to the time of such re-entry or
dispossession shall become due and payable, together with such reasonable
expense as Landlord may incur for reasonable attorneys' fees, brokerage
commissions, and/or expenses of putting the Premises in such condition as
the Tenant under the provisions hereof is required to maintain, or for
preparing the same for reletting and (ii) Tenant or the legal
representatives of Tenant shall also pay Landlord, as liquidated damages
for the failure of Tenant to observe and perform Tenant's covenants herein
contained, an amount equal to the sum of (A) the base rental set forth in
Paragraph 2 hereof and (B) all additional rental payable by Tenant under
the provisions hereof, as if this lease were still in effect less the net
amount, if any, of the rents and all other amounts collected on account of
the lease or leases of the Premises for each month of the period which
would otherwise have constituted the balance of the term of this lease as
the same may theretofore have been extended. In computing the amount of
such liquidated damages there shall be included such expenses as Landlord
may incur in connection with reletting, including reasonable attorneys'
fees, brokerage commissions, expenses of keeping the Premises in the
condition Tenant is required to maintain under the provisions of this
lease, or expenses of preparing the same for reletting. Any such
liquidated damages shall be paid in monthly installments by Tenant on the
day specified hereunder, and any suit brought to collect the amount of the
deficiency of any month shall not prejudice in any way the right of
Landlord to collect the deficiency for any subsequent month by a similar
proceeding.
(c) Enter upon the Premises by any lawful means, whether through
judicial process or otherwise, and including the lawful use of force, if
necessary, without terminating this lease and without being liable for
prosecution or any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this lease; and Tenant agrees to
reimburse Landlord on demand for any expenses which Landlord may incur in
thus effecting compliance with Tenant's obligations under this lease, and
Tenant further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by the negligence of
Landlord or otherwise.
10
In the event Tenant fails to pay any installment of rent or additional rent
hereunder within five (5) days after such installment is due, Tenant shall pay
to Landlord on demand a late charge in an amount equal to ten percent (10%) of
such installment; and the failure to pay such amount within ten (10) days after
demand therefor shall be an event of default hereunder. The provision for such
late charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any
of the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing to Landlord by
reason of the violation of any of the terms, provisions, and covenants herein
contained. No waiver by Landlord of any violation or breach of any of the
terms, provisions, and covenants herein contained shall be deemed or construed
to constitute a waiver of any other violation or breach of any of the terms,
provisions, and covenants herein contained. Landlord's acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default, unless Landlord
so notifies Tenant in writing. Forbearance by Landlord to enforce one or more
of the remedies herein provided upon an event of default shall not be deemed or
construed to constitute a wavier of such default. If, on account of any breach
or default by Tenant in Tenant's obligations under the terms and conditions of
this lease, it shall become necessary or appropriate for Landlord to employ or
consult with an attorney concerning, or to enforce or defend, any of Landlord's
rights or remedies hereunder, Tenant agrees to pay any reasonable attorneys'
fees. No act or thing done by the Landlord or its agents during the term hereby
granted shall be deemed an acceptance of the surrender of the Premises and no
agreement to accept the surrender of said Premises shall be valid unless in
writing signed by Landlord. The receipt by Landlord of rent with knowledge of
the breach of any covenant or other provision contained in this lease shall not
be deemed or construed to constitute a waiver of any other violation or breach
of any of the terms, provisions, and covenants contained herein.
20. Mortgages. Tenant accepts this lease subject and subordinate to any
mortgage(s) and/or deed(s) of trust now or at any time hereafter constituting a
lien or charge upon the Premises or the improvements situated thereon or any
portion thereof. Tenant shall at any time hereafter on demand execute any
instruments, releases or other documents which may be required by any mortgagee
for the purpose of subjecting and subordinating this lease to the lien of any
such mortgage. With respect to any mortgage(s) and/or deed(s) of trust at any
time hereafter created which constitute a lien or charge upon the Premises or
the improvements situated thereon, Landlord agrees to request the holder of such
mortgage to enter into a non-disturbance and attornment agreement with Tenant
providing for such lender to honor this lease and Tenant's interest in the
Premises so long as Tenant is not in default hereunder. However, Landlord makes
no warranty that any such agreement is obtainable, and Tenant's obligation to
subordinate this lease to any such mortgage shall not be dependent upon the
execution of any such agreement.
21. Landlord's Default. In the event Landlord should become in default in
any payments due on any such mortgage described in the above Paragraph 20, or in
the payment of taxes or any other items which might become a lien upon the
Premises and which Tenant is not obligated to pay under the terms and provisions
of this lease, Tenant is authorized and empowered, after giving Landlord (and
the holder of any mortgage or deed of trust lien encumbering the Premises of
which it has received notice) five (5) days' prior written notice of such
default and if Landlord fails to cure such default, to pay any such items for
and on behalf of Landlord, and the amount of any item so paid by Tenant for or
on behalf of Landlord, together with any interest or penalty required to be paid
in connection therewith, shall be credited against the installments of rent next
payable by Tenant hereunder; provided, however, that Tenant shall not be
authorized and empowered to make any payment under the terms of this Paragraph
21, unless the items paid shall be superior to Tenant's interest hereunder.
22. Mechanic's Liens. Tenant shall have no authority, express or implied,
to create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner to bind, the interest of Landlord in the Premises or to
charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs, and each such claim shall
11
affect and each such lien shall attach, if at all, only to the leasehold
interest granted to Tenant by this instrument. Tenant covenants and agrees
that it will pay or cause to be paid all sums legally due and payable by it
on account of any labor performed or materials furnished in connection with
any work performed on the Premises on which any lien is or can be validly and
legally asserted against its leasehold interest in the Premises or the
improvements thereof and that it will same and hold Landlord harmless from
any and all loss, cost, or expense based on or arising out of asserted claims
or liens against the leasehold estate or against the rights, titles, and
interest of Landlord in the Premises or under the terms of this lease.
Further, Tenant agrees that it will immediately remove and have released any
mechanics' materialmen's or similar lien which may become attached to the
Premises or any interest therein during the term hereof.
23. Notices. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing, or delivery of any notice or the making of
any payment by Landlord to Tenant or with reference to the sending, mailing, or
delivery of any notice or the making of any payment by Tenant to Landlord shall
be deemed to be complied with when and if the following steps are taken.
A. All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address hereinbelow set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith.
B. All payments required to be made by Landlord to Tenant hereunder shall
be payable to Tenant at the address hereinbelow set forth, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith.
C. Any notice or document required or permitted to be delivered hereunder
(other than a payment, which shall be deemed received only when actually
received) shall be deemed to be delivered whether actually received or not when
deposited in the United States Mail, postage prepaid, certified or registered
mail, addressed to the appropriate party hereto at the address set out opposite
its name below, or at such other address as it has theretofore specified by
written notice delivered in accordance herewith:
LANDLORD: TENANT:
Industrial Properties Corporation SI Diamond Technology, Inc.
000 Xxxx Xxxxxxxxx Xxxxxxx 0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000-0000 Xxxxxx, XX 00000
If and when included within the term "Landlord," as used in this instrument,
there are more than one person, firm, or corporation, all shall jointly arrange
among themselves for their joint execution of a notice specifying an individual
at a specific address for the receipt of notices and payments to Landlord; if
and when included within the term "Tenant," as used in this instrument, there
are more than one person, firm, or corporation, all shall jointly arrange among
themselves for their joint execution of a notice specifying an individual at a
specific address within the continental United States for the receipt of notices
and payments to Tenant. All parties included within the terms "Landlord" and
"Tenant," respectively, shall be bound by notices given in accordance with the
provisions of this paragraph to the same effect as if each had received such
notice.
24. Miscellaneous.
A. Words of any gender used in this lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural and vice versa, unless the context otherwise requires.
12
B. The terms, provisions, and covenants and conditions contained in this
lease shall apply to, inure to the benefit of, and be binding upon, the parties
hereto and upon their respective heirs, legal representatives, successors, and
permitted assigns, except as otherwise herein expressly provided.
C. The captions are inserted in this lease for convenience only and in no
way define, limit, or describe the scope or intent of this lease, or any
provision hereof, nor in any way affect the interpretation of this lease.
D. Tenant agrees, within ten (10) days after request of Landlord, to
deliver to Landlord, or Landlord's designee, an estoppel certificate stating
that this lease is in full force and effect, the date to which rent has been
paid, the unexpired term of this lease, and such other matters pertaining to
this lease as may be reasonably requested by Landlord.
E. This lease may not be altered, changed, or amended except by an
instrument in writing executed by Landlord and Tenant.
F. This instrument [including all Exhibits and Riders (signed or
initialled by Landlord and Tenant) which are attached hereto] constitutes the
entire agreement between Landlord and Tenant. No prior written or prior or
contemporaneous oral statements, promises, or representations shall be binding.
G. If any provision of this lease shall ever be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of the lease, but such other provisions shall continue in full force
and effect.
H. This lease shall be construed and enforced in accordance with the laws
and judicial decisions of the State of Texas.
I. Under no circumstances whatsoever shall Landlord ever be liable
hereunder for consequential damages or special damages; and all liability of
Landlord for damages for breach of any covenant, duty or obligation of Landlord
hereunder may be satisfied only out of the interest of Landlord in the Land and
Building existing at the time any such liability is finally adjudicated and all
rights to appeal have lapsed. The term "Landlord" means only the owner of the
Land, and in the event of the transfer by such owner of its interests in the
Land, such owner shall thereupon be released and discharged from all covenants
and obligations of Landlord thereafter accruing, but such covenants and
obligations shall be binding upon each new owner for the duration of such
owner's ownership.
J. In the event of any act or omission by Landlord which would give
Tenant the right to damages from Landlord or the right to terminate this lease
by reason of a constructive or actual eviction from all or part of the Premises
or otherwise, Tenant shall not xxx for such damages or exercise any such right
to terminate until (a) it shall have given written notice of such act or
omission to Landlord and to the holder(s) of the indebtedness or other
obligations secured by any first mortgage or first deed of trust affecting the
Premises. If the name and address of such holder(s) shall have previously been
furnished to Tenant; and (b) a reasonable period of time for remedying such act
or omission shall have elapsed following the giving of such notice, not to
exceed thirty (30) days, during which time Landlord and such holder(s) or either
of them, their agents or employees, shall be entitled to enter upon the Premises
and do therein whatever may be necessary to remedy such act or omission. See
Addendum 2.
K. Whenever a period of time is hereby prescribed for action to be taken
by Landlord or Tenant, Landlord or Tenant shall not be liable or responsible
for, and there shall be excluded from the computation for any such period of
time, any delays due to strikes, riots, acts of God, shortages of labor or
materials, war, governmental law regulations or restrictions or any other causes
of any kind whatsoever which are beyond the reasonable control of Landlord or
Tenant. See Addendum 3.
13
L. Landlord and Tenant agree and intend that this lease shall supersede
Section 92 of the Texas Property Code (and any successor statute) to the extent
of any conflict; without limiting the foregoing, none of the obligations or
duties imposed by such section shall be binding upon Landlord unless expressly
provided for in this lease.
25. Return of Premises. At the end of the term covered by this lease, or
upon such earlier termination of this lease as provided herein, Tenant shall
surrender the Premises to Landlord in the same good order and condition as the
Premises were in prior to the beginning of the term hereof, reasonable wear and
tear excepted; provided, that in any case the Premises shall be surrendered to
Landlord reasonably clean and free of debris. At such time Tenant shall deliver
to Landlord all keys to the Premises. Any equipment, trade fixtures, or other
property of Tenant left in the Premises after the end of the lease shall be
conclusively deemed to have been abandoned by Tenant, and Landlord may thereupon
without notice to Tenant take possession of such property and, at Landlord's
option, either (i) declare same to be the property of Landlord, or (ii) at the
sole cost and expense of Tenant, dispose of such property in any manner and for
whatever consideration Landlord in its sole discretion shall deem most
advisable. Tenant agrees that it will, promptly upon Landlord's request,
execute at Tenant's sole cost and expense, such bills of sale or other evidences
of title in such property as Landlord may request.
26. Special Provisions. Additional Provisions, if any, set forth on
Exhibits and Riders attached hereto and made a part hereof for all purposes are
incorporated herein as if fully set forth in this Paragraph. The attached
Exhibits and Riders are Exhibit "A" (Demising Plan), Exhibit "B" (Option Rider),
Exhibit "C" (Addendum to Lease Agreement). Further, the following special
provisions are set forth below and made a part hereof for all purposes:
27. All rent and other payments required to be made by Tenant to Landlord
shall be payable to Landlord at the following address:
Industrial Properties Corporation
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
EXECUTED the 2nd day of June, 1998.
LANDLORD:
Industrial Properties Corporation
By: /s/
------------------------------------
Its: Executive Vice President
-----------------------------
TENANT:
SI Diamond Technology, Inc.
By: /s/ Xxx Xxxxx
------------------------------------
Its: President
-----------------------------
14
EXHIBIT "B"
OPTION RIDER
ATTACHED TO LEASE BETWEEN
INDUSTRIAL PROPERTIES CORPORATION, LANDLORD
AND SI DIAMOND TECHNOLOGY, INC., TENANT
DATED JUNE 2, 1998
1. Provided that Tenant is not in default under the terms hereof at either the
time of its exercise of the option herein provided or at the end of term
provided in the lease (or the end of the then current option period, if
applicable), Tenant shall have 1 consecutive options to exceed this lease for a
period of 3 years, each at the end of the primary term of the lease. Each such
option must be exercised by Tenant giving Landlord written notice in accordance
with the notice provisions of the lease of its intention to exercise such option
not less than 180 nor more than 210 days prior to the end of the primary term,
or the previous option period, as the case may be.
2. For each option period exercised by Tenant in accordance herewith the lease
shall be deemed extended and shall be continued in full force and effect with
respect to every applicable term and condition contained therein, except that
the rent payable with respect to the Premises for such option period shall be as
follows:
Market Rental of Like Space -- Will reflect the current market rate,
but under no circumstances will be less than the rental paid in the
previous term. If the Landlord and Tenant cannot agree upon the
current market rate within thirty days following Tenant's exercise,
and Tenant does not withdraw its exercise within fifteen days
thereafter, then the Tenant and Landlord shall, within ten days, each
select an appraiser who shall complete their appraisals within ten
days after being selected. Should the two appraisals produced by
these appraisers not concur on the current market rate, then the two
appraisers shall pick a third appraiser and the results of the third
appraisal shall be the market rate (provided that such appraisal shall
state a rate that is not more than the higher and no less than the
lower rate determined by the two other appraisers). If the appraised
value is not determined prior to expiration of the Lease, Tenant shall
continue to pay rent at the former rate until such determination is
made, after which time the parties shall adjust the actual rent due
for the prior period within thirty days. The cost of the appraisal
shall be borne by the party employing the appraiser, and the parties
shall equally share the cost of the third appraiser, if any.
3. In the event Tenant fails to exercise any option within the time and in the
manner provided herein, such option, and all subsequent options, shall be deemed
waived by Tenant and shall not be exercisable thereafter.
4. The option provided herein is for the sole benefit of Tenant and may not be
exercised by any subtenant or assignee of Tenant, regardless of whether Landlord
has consented to or approved such subletting or assignment.
Initialed for Identification
Landlord /s/
--------------------------------
Tenant /s/ ZY
--------------------------------
EXHIBIT "C"
ADDENDUM TO LEASE AGREEMENT
1. Landlord and Tenant acknowledge and agree that Tenant shall have no
responsibility whatsoever for or with respect to any Hazardous Substance or
other environmental problem or liability with respect to the Premises
caused by Landlord or Landlord's tenants, agents, employees, contractors,
subcontractors, guests or invitees.
2. provided, however, that if such remedy cannot be completed within thirty
(30) days, Landlord shall not be in default so long as Landlord has
commenced to remedy such act or omission, and diligently pursues the
completion of such remedy.
3. provided, however, that this provision shall not apply to any obligation or
liability under this lease providing the payment of money when any such
payment is due.
