ADDENDUM TO LEASE
Exhibit 10.3
ADDENDUM TO AND MADE A
PART OF LEASE AGREEMENT DATED JUNE 28, 2000 BY AND BETWEEN JAGAR, L.L.C., A
MICHIGAN LIMITED LIABILITY COMPANY, AS LANDLORD, WHOSE ADDRESS IS 00000
XXXXXXXXX, XXXXX 000, XXXXXXXXXX XXXXX, XXXXXXXX 00000, AND PICOMETRIX, INC., A
MICHIGAN CORPORATION, AS TENANT, WHOSE ADDRESS IS X.X. XXX 000000, XXX XXXXX,
XXXXXXXX 00000-0000
1. Tenant Improvements.
Pursuant to Article VII, Section 3 of the Lease, Tenant has the right to
construct a clean room upon the leased premises and other related improvements
approved by Landlord (the "Tenant Improvements"). Landlord has agreed to provide
Tenant with an improvement allowance (the "Tenant Improvement Allowance") in an
amount not to exceed Six Hundred and Forty Thousand and no/100 ($640,000.00)
Dollars (the "Maximum Tenant Improvement Allowance") for the construction of the
clean room and other related items approved by Landlord. Within forty-five (45)
days (the "Determination Date") from the execution of this Lease, Tenant will
provide Landlord with the proposed budget (the "Budget") and the actual Tenant
Improvement Allowance (the "Actual Tenant Improvement Allowance") it will
require for the Tenant Improvements. In the event the Actual Tenant Improvement
Allowance exceeds the Maximum Tenant Improvement Allowance, Tenant shall be
solely liable for such excess amounts. Upon Landlord's receipt of the Budget and
Actual Tenant Improvement Allowance, Landlord and Tenant will enter into to an
amendment to the Lease to replace this Addendum to Lease and to reflect the
amount of the improvement rent (the "Improvement Rent") which shall be paid by
Tenant to Landlord during the Term of the Lease and the other terms and
conditions in this Addendum to Lease. The Improvement Rent shall be determined
as follows:
(a) The Actual Tenant Improvement Allowance
will be amortized over the ten (10) year term of the Lease at eight and one half
(8.5%) and such payments will be made monthly to Landlord in addition to the
base rent.
For example, if the Actual Tenant Improvement
Allowance required by Tenant is $640,000.00, the Tenant shall pay the
Improvement Rent during the one hundred twenty month period as
follows:
the sum of Nine Hundred Fifty Two Thousand and Ninety Three and 80/100
($952,093.80) Dollars, payable in monthly installments of Seven Thousand Nine
Hundred Thirty Four and 11/100 ($7,934.11) Dollars, due and payable on the first
day (1st) day of each and every month commencing as defined in Article II,
Section 1, (which first month's additional rental has already been received) for
the next one hundred nineteen (119) consecutive months.
2. Security for Tenant Improvement
Allowance. As a result
of the Actual Tenant Improvement
Allowance provided by Tenant to Landlord on the Determination Date, Tenant will
have elected to comply with paragraph 2(a) or 2(b) of this Addendum to Lease as
follows:
(a) In the event that the Actual Tenant
Improvement Allowance is in excess of Four Hundred Twenty Six Thousand and
no/100 ($426,000.00), Tenant will be required to deposit an unconditional
irrevocable letter of credit ("LOC") in the amount of $275,000 with Landlord as
security for the Actual Tenant Improvement Allowance (the "LOC Requirement"). In
the event that Tenant is required to comply with the LOC Requirement, Tenant
shall deliver the LOC to Landlord within thirty (30) days after the
Determination Date and prior to any materials or labor being furnished that are
subject to the Tenant Improvement Allowance and cause the LOC to be in effect
during the entire Term of the Lease as follows. The form and terms of the LOC
(and the bank issuing the same) shall be acceptable to Landlord, or its then
managing agent, Landlord, or its then managing agent, shall have the right to
draw down an amount up to the face amount of the LOC upon the presentation to
the issuing bank of Landlord's (or Landlord's then managing agent's) statement
that such amount is due to Landlord under the terms and conditions of this
Lease, it being understood that if Landlord or its managing agent be a
corporation, partnership, limited liability company, or other entity, then such
statement shall be signed by an officer (if a corporation), a general partner
(if a partnership), a member of manager (if a limited liability company), or any
authorized party (if another entity); and The LOC will be honored by the issuing
bank without inquiry as to the accuracy thereof and regardless of whether Tenant
disputes the content of such statement. Tenant shall pay all expenses, points,
or fees incurred by Tenant in obtaining the LOC. The LOC shall not be mortgaged,
assigned or encumbered in any manner whatsoever by Tenant without the prior
written consent or Landlord. Tenant acknowledges that Landlord has the right to
transfer or mortgage its interest in the Property or the leased premises and in
this Lease and Tenant agrees that in event of any such transfer or mortgage,
Landlord shall have the right to transfer or assign the LOC to the transferee or
mortgagee, and in the event of such transfer, Tenant shall look solely to such
transferee or mortgagee for the return of the LOC.
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If, after notice and failure to cure within any
applicable period provided in this Lease, Tenant defaults on any provision of
this Lease, Landlord may, without prejudice to any other remedy it has, draw on
that portion of the LOC necessary to (i) pay rent or other sum in default; (ii)
pay or reimburse Landlord for any amount that Landlord may spend or become
obligated to spend in exercising Landlord's rights under this Lease; and/or
(iii) compensate Landlord for any expense, loss, or damage that Landlord may
suffer because of Tenant's monetary default.
Notwithstanding anything in this Paragraph lea)
to the contrary and so long as Tenant is not in default under the terms and
conditions of this Lease, upon the time period when the amortized remaining
balance due and owing is less than Two Hundred Seventy Five Thousand and No/100
($275,000.00) for Improvement Rent, Landlord will release the LOC to Tenant
within five (5) business days.
(b) In the event that the Actual Tenant
Improvement Allowance is less than or equal to Four Hundred Twenty Six Thousand
and NO/100 ($426,000.00) (the "Cash Amount"), Tenant will not be required to
comply with the LOC Requirement. However, Landlord will not advance to Tenant
any amounts in excess of the Cash Amount. Tenant will be solely responsible for
paying all costs and expenses in excess of the Cash Amount incurred in
connection with the Tenant Improvements. In addition, Tenant acknowledges and
agrees that it shall have no power to do any act, make any contract, or obtain
any financing which may create or be the foundation for any lien, mortgage or
other encumbrance upon these Tenant Improvements and/or the leased
premises.
3. Payment of Tenant Improvement
Allowance. Landlord shall pay Tenant and/or its contractors such portions of the
Actual Tenant Improvement Allowance as requested when Tenant delivers to
Landlord mechanic's and materialmen's lien waivers for all work and materials
furnished to the leased premises and receipts evidencing that the amount sought
has been incurred by Tenant for improvements to the leased premises and such
improvements and materials have been furnished and installed on the leased
premises.
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IN WITNESS WHEREOF, the parties have
executed this Addendum to Lease as of June 28, 2000.
| LANDLORD: | ||
| JAGAR L.L.C., a Michigan limited liability company | ||
| By: | /s/ Xxxxxxx Xxxx | |
| Its: Member | ||
| TENANT: | ||
| PICOMETRIX, INC., a Michigan corporation | ||
| By: | /s/ Xxxxx X. Xxxxxx | |
| Its: Chief Executive Officer | ||
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