EXHIBIT 10
LEASE AGREEMENT
THIS LEASE, dated February 27, 2004 by and between: XXXX XXXXXX LATHING COMPANY,
LLC a California Limited Liability Company ("LESSOR") and CATAPULT
COMMUNICATIONS a Nevada Corporation, ("LESSEE"), is made with reference to the
following facts:
A. Lessor is the owner of certain industrial property (the
"Industrial Center") Hlocated at 000 Xxxxx Xxxxxxx, and 000 Xxxxx Xxxxxxx Xxxx
(Buildings A, B, C, D, E, F, G, and I) Mountain View, California, consisting of
(9) nine buildings having a floor area of approximately 106,518 square feet plus
related parking facilities and landscaped areas.
B. Lessee desires to rent a portion of the Industrial Center and
Lessor has agreed to lease the same to Lessee, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1. DEMISED PREMISES AND COMMON AREAS
1.01 Lessor does hereby lease to Lessee, and Lessee does hereby rent from
Lessor, that portion of the Industrial Center consisting of approximately 17,750
square feet of lease space known as 000 Xxxxx Xxxxxxx Xxxx, Xxxxxxxx F,
approximately 11,500 square feet of lease space known as 000 Xxxxx Xxxxxxx Xxxx,
Xxxxxxxx X and approximately 9,860 square feet of lease space known as 000 Xxxxx
Xxxxxxx Xxxx, Xxxxxxxx X for a total of approximately 39,110 square feet of
lease space as shown on the drawing attached hereto as exhibit "A" and made a
part hereof, (the "Demised Premises"), together with the right to use the Common
Areas of the Industrial Center as hereinafter described. The parties hereby
stipulate and agree that the Demised Premises constitutes 36.72% of the total
leasable floor area of the Industrial Center.
1.02 Lessee shall have the non-exclusive right to use the Common Areas of
the Industrial Center, subject to any reasonable rules and regulations
concerning such use as may be adopted from time to time by Lessor. The term
"Common Areas" shall mean those areas within the Industrial Center provided and
designated by Lessor for the general non-exclusive use by the occupants of the
Industrial Center and their respective employees, customers and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, driveways, and landscaped areas. Lessor reserves the right
of exclusive control and management of the Common Areas, including the right, in
Lessor's sole discretion:
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(a) To make alterations or construct additional improvements within the
Common Areas;
(b) To temporarily close any of the Common Areas for maint enance purposes,
so long as reasonable access to the Demised Premises remains available;
and
(c) To use the Common Areas while engaged in making additional improvements,
repairs or alterations to the Industrial Center, or any portion thereof.
ARTICLE 2. TERM
2.01 The term of this Lease shall be a period of five (5) years, commencing
on February 10, 2005 and ending on February 9, 2010 unless sooner terminated as
provided herein.
2.02 If Lessor, for any reason whatsoever, is unable to deliver possession
of the Demised Premises to Lessee on the commencement date specified in Section
2.01 above, Lessor shall not be liable to Lessee for any loss or damage
resulting therefrom, nor shall this Lease be void or voidable, but in such event
Lessee shall not be liable for rent or other sums due Lessor until possession of
the Demised Premises is offered to Lessee. No delay in delivery of possession
shall operate to extend the term hereof unless otherwise stipulated in writing
by the parties. However, if Lessor is unable to deliver possession of the
Demised Premises to Lessee within thirty (30) days after the commencement date,
Lessee will have the option to terminate this lease.
ARTICLE 3. RENT
3.01 Lessee shall pay to Lessor as Base Rent for the Demised Premises, in
lawful money of the United States, payable in advance on or before the
first day of each calendar month without any deduction, offset or
demand, the following sums.
MONTHS RENT/PER MTH.NNN RENT/SQ.FT.NNN
02-10-05 XX 00-00-00 FREE
04-10-05 XX 00-00-00 $24,639.30 $0.90
05-01-05 XX 00-00-00 $35,199.00 $0.90
02-01-06 XX 00-00-00 $10,559.70 $0.90
02-10-06 XX 00-00-00 $22,738.63 $0.92
03-01-06 XX 00-00-00 $35,902.98 $0.92
02-01-07 XX 00-00-00 $10,770.93 $0.92
02-10-07 XX 00-00-00 $23,193.30 $0.94
03-01-07 XX 00-00-00 $36,621.04 $0.94
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02-01-08 XX 00-00-00 $10,986.30 $0.94
02-10-08 XX 00-00-00 $24,902.40 $0.96
03-01-08 XX 00-00-00 $37,353.46 $0.96
02-01-09 XX 00-00-00 $11,206.08 $0.96
02-10-09 XX 00-00-00 $24,130.38 $0.98
03-01-09 XX 00-00-00 $38,100.53 $0.98
02-01-10 XX 00-00-00 $11,430.18 $0.98
3.02 If the commencement date is not the first day of a calendar month, or
if the termination date is not the last day of a calendar month, the monthly
rental for the fractional month shall be prorated on the basis of a thirty (30)
days month.
3.03 Lessee acknowledges that late payment of rent and any other charges
provided herein will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
determine. Such costs include, without limitation, processing and accounting
charges, late charges that may be imposed on Lessor by the terms of any
encumbrances against the Industrial Center and penalties on delinquent tax
payments. Lessee therefore agrees that if any installment of rent or other
charge payable by Lessee hereunder is not received by Lessor within ten (10)
days after the same becomes due, Lessor shall be entitled to collect an
additional sum equal to one and one half percent (1.5%) of the delinquent
payment for each month or fraction thereof that the rent or other charge remains
unpaid. Acceptance of any late charge shall not constitute a waiver of Lessee's
default with respect to the overdue amount, nor prevent Lessor from exercising
any other rights and remedies available to Lessor hereunder or provided by law.
ARTICLE 4. SECURITY DEPOSIT
4.01 Lessee has deposited with Lessor the sum of THREE THOUSAND THREE
HUNDRED THIRTY-TWO AND 45/100 DOLLARS ($3,332.45) as and for a security deposit
4.02 If Lessee defaults with respect to any provision of this Lease, Lessor
may use, apply or retain all or any part of the security deposit to cure such
default or to compensate Lessor for all damages sustained by Lessor resulting
from Lessee's default. If any portion of said deposit is so used or applied,
Lessee shall within ten (10) days after written demand therefore, deposit cash
with Lessor in an amount sufficient to restore the security deposit to its
original amount, and Lessee's failure to do so shall constitute a material
breach of this Lease. Lessor's obligations with respect to the security deposit
are those of a debtor and not a trustee. Lessor shall not be required to
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segregate the security deposit as a separate fund and Lessee shall not be
entitled to any interest thereon. If Lessee shall fully and faithfully perform
every provision of this Lease to be performed by Lessee, the security deposit or
any balance thereof shall be returned to Lessee within thirty (30) days after
termination of the Lease.
ARTICLE 5. USE
5.01 The Demised Premises shall be used and occupied by Lessee solely for
office/R&D/warehouse and for no other or additional purpose without the prior
written consent of Lessor.
5.02 The Lessee shall not use the Demised Premises or permit anything to be
done in or about the Demised Premises which is prohibited by or will in any way
conflict with any law, statute, ordinance or governmental rule or regulation now
in force or which may hereafter be in force, or which is prohibited by the
standard form of fire insurance policy, or will in any way increase the existing
rate of any fire or other insurance covering the Industrial Center or any of its
contents, or cause any change or cancellation of such insurance. The judgment of
any court of competent jurisdiction or the admission of Lessee in any action
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact as between Lessor and Lessee.
Lessee shall not do or permit anything to be done in or about the Demised
Premises which will in any way obstruct or interfere with the rights of other
tenants in the Industrial Center, or injure or annoy them, or use or allow the
Demised Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Lessee cause, maintain or permit any nuisance in, on or about
the Demised Premises or commit or suffer to be committed any waste in, on or
about the Demised Premises.
5.03 Lessee shall strictly comply with all statutes, laws, ordinances,
rules, regulations, and precautions now or hereafter mandated or advised by any
federal, state, local or other governmental agency with respect to the use,
generation, storage, or disposal of hazardous, toxic, or radioactive materials
(collectively, "Hazardous Materials"). Such statutes, laws, ordinances, rules,
regulations, and all regulations adopted pursuant to them: Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Sections 9601
et seq., the Superfund Amendments and Reauthorization Act., 42 U.S.C. Sections
1101 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Sections
6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801 et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.,
the
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Federal Insecticide, Fungicide, and Rodenticide Act 7 U.S.C. Sections 136 et
seq., the Occupational Safety and Health Act, 29 U.S.C. sections 651 et seq.,
the Hazard Communication Standard, 29 C.F.R. section 1910.1200, the Hazardous
Substance Account, Cal. Health & Safety Code Sections 25300 et seq., (including
new Section 25359.7, effective 1/1/88), the Hazardous Waste-Control Law, Cal.
Health & Safety Code Sections 25100 et seq., the Hazardous Materials release
Response Plans and Inventory, Cal. Health & Safety Code Sections 25500 et seq.,
(including new Section 25503.6 effective 2/19/88), the Safe Drinking Water and
Toxic Enforcement Act, Cal. Health & Safety Code Section 25249.5 et seq., the
C&I. Food & Agriculture Code Section 11401 et seq., and the California
Occupational safety & Health Act, Cal. Labor Code Section 6300 et seq. As herein
used, Hazardous materials shall include, but not be limited to, those materials
identified in Title 22 of the California code of Regulations Sections 66680
through 66685, Title 8 of the California Code of Regulations Section 339, those
materials listed pursuant to the Safe Drinking Water and Toxic Enforcement Act,
Ca. Health & Safety Code Section 25249.8, and those substances defined as
"hazardous wastes," or other similar designations in the Comprehensive
Environmental response, Compensation and Liability Act of 1980, and amended 42
U.S.C. Sections 9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801 et seq., and any other governmental statutes, laws,
ordinances, rules, regulations, and precautions. Except for products used in
typical office operations, such as cleaning materials and office machine
supplies, Lessee shall not cause, or authorize anyone else to cause, any
Hazardous Materials to be used, generated, stored, or disposed of on or about
the Premises or the Building without the prior written consent of Lessor, which
consent may be withheld in the sole discretion of Lessor. Furthermore, Lessee
shall notify Lessor in writing of any release, spill, use, generation, storage,
or disposal of Hazardous Materials on or about the Premises or Building. If
Hazardous Materials are used, generated, stored, or disposed of, Lessee shall
provide Lessor with a copy of all permits, reports, inventories and business
plans filed with any federal, state, local, or other governmental agency
pursuant to any statutes, laws, ordinances, rules or regulations. Furthermore,
Lessee shall notify Lessor in writing if Lessee is subject to reporting
requirements under particular statutes or regulations, and shall also notify
Lessor in writing that Lessee has complied with all reporting requirements.
Lessee shall indemnify and hold Lessor harmless from liability, including all
fines and penalties, and all reasonably foreseeable consequential damages,
directly or indirectly arising out of the use, generation, storage, or disposal
of Hazardous Materials on or about the Premises by Lessee or any agent,
employee, customer, vendor or invitee of Lessee, including, without limitation,
the cost of any required or necessary repair, cleanup or detoxification and the
preparation of any closure or other required plans, whether such action is
required or necessary prior to or following the termination of this Lease, to
the full
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extent that such action is attributable, directly or indirectly, to the use,
generation, storage, or disposal of Hazardous Materials by Lessee or any agent,
employee, customer, vendor or invitee of Lessee. Neither the written consent by
Lessor to the use, generation, storage, or disposal of Hazardous Materials nor
the strict compliance by Lessee with all statutes, laws, ordinances, rules,
regulations, and precautions pertaining to Hazardous Materials shall excuse
Lessee from Lessee's obligation to indemnification pursuant to this subsection.
ARTICLE 6. LEASEHOLD IMPROVEMENTS
6.01 Except as otherwise provided in an addendum to this Lease, Lessor shall
not be obligated to perform any alterations or improvements to the Demised
Premises. Acceptance of the Demised Premises shall constitute acceptance of any
alterations and improvements therein performed by Lessor and shall further
constitute an acknowledgment by Lessee that the Demised Premises are in good
order, condition, and repair.
6.02 Lessee may perform, at Lessee's own expense, the alterations and
improvements to the Demised Premises as required for conducting Lessee's
business, and Lessor hereby consents to the performance of such work. Lessee may
have access to the Demised Premises prior to the commencement of the lease term
for the purpose of installing Lessee's improvements, provided that such work
does not obstruct or interfere with the work being performed therein by Lessor.
No delay by Lessee in the completion of Lessee's work, shall delay commencement
of the lease term on the date specified in Section 2.01, unless such delay was
directly and primarily caused by Lessor. Lessor may submit a bid to Lessee for
performance of the alteration and improvement work but Lessee shall not be
obligated to utilize the services of Lessor and may select any licensed
contractor to perform such work. Lessee shall not be required to remove
leasehold improvements at the end of the lease term.
6.03 Except as expressly provided herein, Lessor shall have no obligation to
make any alterations or improvements to the Demised Premises for the benefit of
Lessee. Lessee acknowledges that neither Lessor nor anyone acting on Lessor's
behalf has made any representation or warranty as to the suitability or fitness
of the Demised Premises for the conduct of Lessee's business or for any other
purpose.
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ARTICLE 7. UTILITIES AND SERVICES
7.01 Lessor shall provide separate electricity meters and gas meter for the
Demised Premises. Lessee shall establish its own account with the utility
company to provide electricity and gas service to the Demised Premises and
Lessee shall pay all charges and fees for such services directly to the utility
company.
7.02 Lessee shall pay, as additional rent, Lessee's pro-rata share of the
cost of the following utilities and services furnished to the Demised Premises,
which pro-rata share shall be the proportion to which the Demised Premises bears
to all other buildings which share the common areas.
(a) 55.11% of all water and sewer, and 36.72% of all Common Area
maintenance charges for the Industrial Center, as billed to Lessee by Lessor,
including but not limited to, landscape maintenance, lighting maintenance,
utility charges, and parking lot sweeping.
(b) Garbage collection charges attributable to the Demised Premises, as
billed to Lessee by Lessor according to Lessee's actual usage thereof.
The foregoing charges shall be due and payable to Lessor within ten (10) days
after receipt of a billing therefore by Lessee. Billing shall occur on a monthly
basis. If requested, Lessor shall provide Lessee copies of the actual bills for
charges Lessee is responsible to pay his pro rata share of.
7.03 Lessor shall maintain the Common Areas of the Industrial Center in good
condition and repair, except for damage occasioned by the act of Lessee or
Lessee's agents or invitees, which damage shall be repaired by Lessor at
Lessee's expense. Lessor shall have no obligation to provide janitorial service
for the Demised Premises.
(a) Lessor shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the rent provided
herein be abated by reason of Lessor's failure to furnish or delay in furnishing
any utilities or services when such failure or delay is caused by accident,
breakage, repairs, strikes, lockouts or other labor dispute, or by limitation,
curtailment, rationing or restrictions on use of electricity, gas, water or
other utility, or any other cause, similar or dissimilar, beyond the reasonable
control of Lessor.
ARTICLE 8. INDEMNITY AND INSURANCE
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8.01 Lessee hereby waives any and all claims against Lessor for damage to
any property or injury to or death of any person in, upon or about the Demised
Premises, arising at any time and from any cause other than solely by reason of
the negligence or willful misconduct of Lessor. Lessee further expressly
indemnifies and holds Lessor harmless from and against any and all claims,
demands, causes of action, liabilities, costs or expenses, including attorney's
fees, occasioned by or in any way connected with the condition, use or misuse of
the Demised Premises, or occasioned by any act or omission of Lessee and
Lessee's agents, servants, employees, invitees or other persons who may come
upon the Demised Premises, except for damage to any property or injury to or
death of any person caused solely by the negligence or willful misconduct of
Lessor.
8.02 Lessee hereby agrees to maintain in full force and effect at all times
during the term of this Lease, at Lessee's expense, a policy or policies of
comprehensive general liability insurance, insuring against all liability of
Lessee and Lessee's authorized representatives, agents and invitees arising out
of or in connection with Lessee's use and occupancy of the Demised Premises and
also insuring performance by Lessee of the indemnity provisions set forth in
Section 8.01. The initial amount of such insurance shall be at least
$2,000,000.00, and shall be subject to periodic increase based upon inflation,
provided increased amount is commercially reasonable and available,
recommendations by Lessor's insurance advisors, and other relevant factors.
However, the amount of such general liability insurance shall not limit Lessee's
liability nor relieve Lessee of any obligations under this Lease. The general
liability insurance policy shall name Lessor as an additional insured party
thereunder, and no cancellation or reduction in coverage will be made without
thirty (30) days prior written notice by Lessee to Lessor unless Lessee is
prevented from giving thirty (30) days notice due to circumstances beyond
Lessee's control. A copy of the policy or a certificate of insurance shall be
furnished to Lessor.
8.03 Lessor shall maintain in full force and affect a policy or policies
covering loss or damage to the Industrial Center, to the extent of the
replacement value thereof. Such policy or policies shall provide protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, and any other perils (excluding flood
and earthquake) which Lessor deems necessary. Lessor shall also maintain in full
force and effect a rental income insurance policy, with loss payable to Lessor,
in an amount equal to one year's gross rent from the Industrial Center, which
insurance shall also cover all real estate taxes and insurance costs for said
period. Lessee shall pay to Lessor, as additional rent, an amount equal to 100%
of the premiums paid for each of Lessee's Industrial Buildings by Lessor for the
hazard and rental income insurance policies described herein, such amount to be
paid within ten (10) days after Lessee's receipt of a billing
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therefore from Lessor. Lessee shall be responsible for maintaining its own
insurance covering the personal property, trade fixtures and removable leasehold
improvements owned by Lessee and located upon the Demised Premises.
8.04 Lessor and Lessee each hereby waive any and all rights of recovery
against the other, or against the agents, employees or representatives of the
other, on account of loss or damage to the property of the waiving party to the
extent that such loss or damage is insured against under any insurance policies
which either Lessor or Lessee may have in force at the time of such loss or
damage. Lessee shall, upon obtaining the insurance required hereunder, give
notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease and Lessee shall cause each insurance policy obtained
by Lessee to provide that the insurance company waives all right of recovery by
way of subrogation against either Lessor or Lessee in connection with any damage
covered by such policy.
ARTICLE 9. REPAIRS AND MAINTENANCE
9.01 Lessee shall, at all times during the term hereof and at Lessee's own
expense, keep and maintain the Demised Premises and every part thereof in good
condition and repair. Lessee hereby waives all rights to make repairs at the
expense of Lessor or in lieu thereof to vacate the Demised Premises as provided
by California Civil Code Section 1942 or any other law, statute or ordinance now
or hereafter in effect.
a. The obligations of Lessee to maintain the Demised Premises shall not include
the roof or structural components of the building or any replacement of the air
conditioning units or replacement of the compressor or heat exchanger within
such units provided such replacement is not the result of any failure to
maintain or any negligent act or omission by Lessee. Moreover, Lessor hereby
warrants to Lessee that all mechanical, electrical, plumbing and other systems
within the Demised Premises are in good operating condition and repair and
Lessor will be responsible for any necessary repairs or replacements thereof,
beyond normal maintenance, for a period of ninety (90) days after the
commencement of the lease term, provided such repair or replacement is not the
result of any failure to maintain or any negligent act or omission by Lessee.
ARTICLE 10. TAXES AND ASSESSMENTS
10.01 Lessee shall pay to Lessor, as additional rent, 55.11% of all real
property taxes levied or assessed against the Demised Premises during the Lease
term, except that:
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(a) Lessee shall pay 100% of any increase in real property taxes
attributable to alterations or improvements to the Demised Premises constructed
by or for the benefit of Lessee;
(b) Lessee shall not be charged for any increase in real property
taxes after the date hereof solely attributable to alterations or improvements
constructed or installed within the Industrial Center as leasehold improvements
for the use and benefit of any other tenant or tenants.
(c) Lessee shall not be responsible for tax increases associated
with a sale or transfer of the property.
10.02 Payment by Lessee of the real property taxes referred to herein shall
be made within ten (10) days after Lessor furnishes to Lessee a copy of the tax
xxxx showing the total amount of property taxes levied or assessed against the
Industrial Center, the amount thereof payable by Lessee, and the calculation
utilized by Lessor to determine such amount. Billing shall be in two
installments made by Lessor on or about February 1, and November 1, of each year
of the Lease.
10.03 As used herein, the term "real property taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax imposed on the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal agency, or any
school, sanitary, fire, street, drainage, or other improvement district. The
term shall also include any tax, fee, levy, assessment, or charge imposed by any
taxing authority upon Lessor's right to receive, or the receipt of, rent or
income from the Industrial Center, or against Lessor's business of leasing the
Industrial Center. However, the term "real property taxes" does not include
Lessor's federal or state personal income or franchise taxes.
10.04 Lessee shall pay prior to delinquency all taxes levied or assessed
against the trade fixtures, equipment, furnishings, and other personal property
of Lessee located upon the Demised Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, equipment, furnishings, and other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten
(10) days after Lessor furnishes to Lessee a written statement describing the
property in question and showing the amount of tax thereon payable by Lessee.
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ARTICLE 11. ALTERATIONS AND IMPROVEMENTS
11.01 Lessee shall not, without the prior written consent of Lessor (which
consent shall not be unreasonably withheld), make any alterations, additions or
improvements in, on or about the Demised Premises. As a condition to giving such
consent, Lessor may require Lessee to provide Lessor a surety bond or other
security satisfactory to Lessor to insure Lessor against mechanics' and
materialmen's liens and to insure completion of the work.
11.02 All alterations, additions and improvements, whether temporary or
permanent in character, made by Lessee in, on or about the Demised Premises,
except movable trade fixtures installed at the expense of Lessee, shall, in the
absence of a written request by Lessor, which written request shall be given at
the time Lessee requests permission to make improvement, for their removal,
become the property of Lessor and shall remain upon and be surrendered with the
Demised Premises at the termination of this Lease by lapse of time or otherwise
without compensation to Lessee.
ARTICLE 12. DAMAGE OR DESTRUCTION
12.01 If the Demised Premises, or other portion of the Industrial Center of
which the Demised Premises constitute a part, are damaged, by fire or other
casualty, Lessor shall forthwith repair the same, provided such repairs can, in
Lessor's opinion, be completed within ninety (90) days. In such event, this
Lease shall remain in full force and effect except that if there is damage to
the Demised Premises and such damage was not the result of negligence or willful
misconduct of Lessee or Lessee's employees or invitees, the rent payable by
Lessee shall be abated while the repairs are being made by the extent to which
the Demised Premises are unusable by Lessee in the normal conduct of Lessee's
business. If the repairs cannot, in Lessor's opinion, be completed within ninety
(90) days, Lessor may, at Lessor's option, make the repairs and this Lease shall
continue in full force and effect, subject to abatement of rental as hereinabove
in this section provided. In the event Lessor does not elect to make the repairs
which cannot be completed within ninety (90) days, and provided the damage
affects the Demised Premises or common areas necessary to Lessee's use, Lessor
shall give written notice of such fact to Lessee within thirty (30) days after
the date on which the damage occurred and either Lessor or Lessee may, within
thirty (30) days after the giving of such notice, terminate this Lease. Lessee
shall have the right to make improvements and continue the lease, subject to
abatement of rental as provided in this section, if Lessor does not elect to
make the repairs which cannot be completed within ninety (90) days.
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12.02 Notwithstanding the provisions of Section 12.01 above, Lessor shall
have the option of terminating this Lease in any of the following circumstances:
(a) Where the damage or destruction arises from a casualty or
cause not covered by Lessor's insurance then in force.
(b) Where the building in which the Demised Premises are located
is damaged or destroyed to the extent of 33-1/3 percent or more of the
replacement cost thereof, whether the Demised Premises be insured or not.
(c) Where the repairs cannot be made by reason of any statute,
ordinance, rule or regulation of any governmental authority.
12.03 If Lessor is obligated or elects to repair any damage pursuant to this
Article, Lessor shall not be required to repair or replace any improvements
installed in the Demised Premises by Lessee, other than building standard tenant
improvements made by Lessor, and Lessee shall, at Lessee's own expense, repair
and restore Lessee's portion of such improvements.
12.04 A total destruction of the entire building in which the Demised
Premises are located shall automatically terminate this Lease.
12.05 Except as otherwise expressly provided in this Article, Lessee hereby
waives the provisions of California Civil Code Sections 1932(2) and 1933(4).
ARTICLE 13. CONDEMNATION
13.01 If all of the Demised Premises or so much thereof is taken by right of
eminent domain, or purchase in lieu thereof, such that the Demised Premises are
no longer reasonably suitable for Lessee's use, this Lease shall terminate as of
the date that possession of the Demised Premises or part thereof is taken.
13.02 If any part of the Demised Premises is taken and the remaining part
thereof (after reconstruction of the then existing building) is reasonably
suitable for Lessee's use, this Lease shall, as to the part so taken, terminate
as of the date that possession of such part is taken and the rent payable
hereunder shall be reduced in the same proportion that the floor area of the
portion of the Demised Premises so taken (less any addition thereto by reason of
any reconstruction) bears to the original floor area of the Demised Premises
immediately prior to the
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taking. Lessor shall, at Lessor's expense, make all necessary repairs or
alterations to restore the remaining Demised Premises to a complete
architectural unit.
13.03 No award for any partial or entire taking shall be apportioned and
Lessee hereby assigns to Lessor all of Lessee's interest therein, except that
Lessee shall be entitled to any portion of the award specifically designated as
compensation for the taking of personal property belonging to Lessee, for the
interruption of Lessee's business, for Lessee's moving costs or loss of goodwill
suffered by Lessee and for the cost of improvements to the premises paid by
Lessee. No temporary taking of the Demised Premises shall terminate this Lease
or give Lessee any right to abatement of rent hereunder; any award recovered by
Lessee for such temporary taking shall belong entirely to Lessee and Lessor
shall have no interest therein. Each party agrees to execute and deliver to the
other all instruments and documents that may be required to implement the
provisions of this Section.
ARTICLE 14. ASSIGNMENT AND SUBLETTING
14.01 Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, pledge, hypothecate or encumber all or any part of Lessee's
interest in this Lease or in the Demised Premises or any part thereof, without
Lessor's prior written consent and any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a breach
of this Lease. If Lessee is a corporation, or partnership any transfer of a
controlling ownership interest in the stock of Lessee shall constitute an
assignment hereunder.
14.02 If Lessee complies with the following conditions, Lessor shall not
unreasonably withhold Lessor's consent to the assignment of this Lease or the
subletting of the Demised Premises or any portion thereof. Lessee shall submit
in writing to Lessor:
(a) The name and legal composition of the proposed Assignee or
SubLessee;
(b) The terms and provisions of the proposed Assignment or
Sublease; and
(c) Such financial information as Lessor may reasonably request
concerning the proposed Assignee or SubLessee.
a. No consent by Lessor to any assignment or subletting by Lessee shall
relieve Lessee of any obligation to be performed by Lessee under this Lease,
whether occurring before or after such consent, assignment or subletting. The
consent by Lessor to any assignment or subletting shall not relieve Lessee from
the
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obligation to obtain Lessor's express written consent to any other assignment or
subletting. The acceptance of rent by Lessor from any other person shall not be
deemed to be a waiver by Lessor of any provisions of this Lease or to be a
consent to any assignment, subletting or other transfer. Consent to one
assignment, subletting or other transfer shall not be deemed to constitute
consent to any subsequent assignment, subletting or other transfer.
14.03 If lessee assigns or subleases the Demised Premises or any portion
thereof, the following shall apply:
(a) Lessee shall pay to Lessor as additional rent under the Lease
the "Landlord's Share" of the "Profit" (defined below) on such
transaction, which shall be 50% of the Profit as and when
received by the Lessee, unless lessor gives written notice to
Lessee and assignee or sublessee that Landlord's share shall
be paid by assignee or sublessee to Lessor directly.
(b) The "Profit" means all amounts paid to Lessee for such
assignment or sublease, including "Key" money, monthly rent in
excess of the monthly rent payable under the Lease, and all
fees and other consideration paid for the assignment or
sublease, including fees under any collateral agreements, less
any costs and expenses directly incurred by Lessee in
connection with the execution and performance of such
assignment or sublease for real estate broker's commissions
and costs of renovation or construction of tenant improvements
required under such assignment or sublease. Lessee is entitled
to recover such costs and expenses before Lessee is obligated
to pay the Landlord's Share to Lessor. The Profit in the case
of a sublease of less than all the Demised Premises is the
rent allocable to the subleased space as a percentage on a
square foot basis.
(c) Lessee shall provide Lessor a written statement certifying all
amounts to be paid from any assignment or sublease of the
Demised Premises within thirty (30) days after the transaction
is signed and Lessor may inspect Lessee's books and records to
verify the accuracy of such statement. On written request,
Lessee shall promptly furnish to Lessor, copies of all the
transaction documentation, all of which shall be certified by
Lessee to be complete, true and correct. Lessor's receipt of
Landlord's Share shall not be a consent to any further
assignment or subletting. The breach of Lessee's obligation
under this paragraph shall be a material default of the Lease.
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(d) No merger shall result from Lessee's sublease of the Demised
Premises under this paragraph, Lessee's surrender of this
lease or the termination of this Lease in any other manner. In
any such event, Lessor may terminate any and all subtenancies
or succeed to the interest of Lessee as sublessor under any
and all subtenancies.
ARTICLE 15. TRANSFER OF LESSOR'S INTEREST
15.01 Lessor shall have the right at any time to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of Lessor's interest in the Demised
Premises and in this Lease. In the event of any such sale, transfer, assignment,
pledge, hypothecation or other disposition, all obligations of Lessor hereunder
shall devolve upon the transferee and Lessor shall be released and discharged
from all further obligation or liability hereunder; provided, that Lessor shall
be responsible for any funds in the hands of Lessor in which Lessee has an
interest until such funds have been delivered to the transferee. Lessee agrees
to attorn to the transferee provided all of Lessor's obligations hereunder are
assumed by the transferee in writing for the benefit of Lessee.
ARTICLE 16. MECHANICS' LIENS
16.01 Lessee shall keep the Demised Premises free and clear of all mechanics'
liens resulting from any construction work done by or for Lessee. Lessee shall
have the right to contest the correctness or validity of any such lien if,
immediately on demand by Lessor, Lessee procures and records a lien release bond
issued by a corporation authorized to issue surety bonds in California in an
amount equal to one and one-half (1-1/2) times the amount of the claim of lien
or other security satisfactory to Lessor. If used, the bond shall meet the
requirements of Section 3143 of the California Civil Code and shall provide for
the payment of any sum that the claimant may recover on the claim, together with
costs of suit. Should Lessee fail to discharge any such lien or cause the same
to be released within sixty (60) days from the date the lien is filed, Lessor
may, without inquiring into the validity thereof, cause the same to be
discharged and all amounts so expended by Lessor, together with reasonable
attorney's fees and expenses, shall be paid by Lessee to Lessor as additional
rent hereunder, together with interest thereon at the rate of fifteen percent
(15%) per annum. Lessee shall give ten (10) days prior written notice to Lessor
of the date on which any construction work will be commenced so as to afford
Lessor the opportunity to post a notice of nonresponsibility.
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ARTICLE 17. ENTRY BY LESSOR
17.01 Lessor and Lessor's authorized representatives shall have the right to
enter the Demised Premises with 24 hour prior verbal notice unless in cases of
emergency at reasonable hours for any of the following purposes:
(a) To examine and inspect the Demised Premises;
(b) To supply any service to be provided by Lessor to Lessee
hereunder;
(c) To perform any necessary maintenance or repairs that Lessor is
required or permitted to perform hereunder;
(d) To serve, post or keep posted any notices required or allowed
under the provisions of this Lease;
(e) To post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last one hundred
twenty (120) days of the Lease term, or during any period
while Lessee is in default;
(f) To show the Demised Premises to prospective tenants, buyers,
lenders or other persons at any time during the Lease term;
(g) To do any other act or thing necessary for the safety or
preservation of the Demised Premises or the Industrial Center.
17.02 Lessor shall at all times have and retain a key with which to unlock
all of the doors in, on or about the Demised Premises (excluding Lessee's
vaults, safes and other secured areas designated in writing by Lessee in
advance); and Lessor shall have the right to use any and all means which Lessor
may deem proper to open said doors in an emergency in order to obtain entry to
the Demised Premises, and any entry to the Demised Premises obtained by Lessor
by any of said means, or otherwise, shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into or a detainer of the
Demised Premises, or an eviction, actual or constructive, of Lessee from the
Demised Premises, or any portion thereof.
ARTICLE 18. DEFAULT BY LESSEE
18.01 The occurrence of any one or more of the following events ("Events of
Default") shall constitute a material default and breach of this Lease by
Lessee:
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(a) Any failure by Lessee to pay any rental or any other sum
required to be paid by Lessee hereunder, as and when the same
becomes due and payable, and failure continues for a period of
more than five (5) days after receiving written notice to
Lessee by Lessor,
(b) Any failure by Lessee to observe and perform any other
provision of this Lease to be observed or performed by Lessee,
where such failure continues for fifteen (15) business days
after written notice thereof by Lessor to Lessee; provided,
however, that if the nature of such default is such that it
cannot reasonably be cured within such fifteen (15) business
days period, Lessee shall not be deemed to be in default if
Lessee shall within such period commence such cure and
thereafter diligently prosecute the same to completion.
(c) The making by Lessee of any general assignment or general
arrangement for the benefit of creditors; the filing by or
against Lessee of a petition to have Lessee adjudged a
bankrupt or a petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a
petition filed against Lessee, the same is dismissed within
ninety (90) days); the appointment of a trustee or receiver to
take possession of substantially all of Lessee's interest in
this Lease, where possession is not restored to Lessee within
sixty (60) days; or the attachment, execution or other
judicial seizure of substantially all of Lessee's assets
located at the Demised Premises or of Lessee's interest in
this Lease, where such seizure is not discharged within
forty-five (45) days.
18.02 Any notice given under this Article shall specify the Event of Default
and the applicable lease provisions, and shall demand that Lessee perform the
provisions of this Lease, within the applicable period of time. No such notice
shall be deemed a forfeiture or a termination of this Lease provided Lessee
cures the default within the applicable period of time.
ARTICLE 19. LESSOR'S REMEDIES UPON DEFAULT
19.01 Lessor shall have the following remedies upon the occurrence of an
Event of Default, such remedies being cumulative and not exclusive and in
addition to any other remedies available to Lessor as now or hereafter provided
by law:
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(a) Lessor can continue this Lease in full force and effect, and
the Lease will continue in effect as long as Lessor does not
terminate Lessee's right to possession, and Lessor shall have
the right to collect rent when due, irrespective of whether
Lessee shall have abandoned the Demised Premises. During the
period Lessee is in default, Lessor can enter the Demised
Premises and relet them, or any part of them, to third parties
for Lessee's account. Lessee shall be liable immediately to
Lessor for all costs Lessor incurs in such reletting,
including, without limitation, broker's commissions and like
costs. Reletting can be for a period shorter or longer than
the remaining term of this Lease. Lessee shall pay to Lessor
the rent specified in this Lease on the dates when the same
becomes due, less the rent Lessor receives from any reletting.
No act by Lessor allowed by this paragraph shall terminate
this Lease unless Lessor notifies Lessee that Lessor elects to
terminate this Lease. After Lessee's default and for as long
as Lessor does not terminate Lessee's right to possession of
the Demised Premises, Lessee shall have the right to assign or
sublet Lessee's interest in this Lease pursuant to Article 14,
but Lessor's consent may be conditioned upon all defaults by
Lessee being fully cured at the time of assignment or
subletting.
(b) Lessor can terminate Lessee's right to possession of the
Demised Premises at any time during Lessee's default. No act
by Lessor other than giving written notice to Lessee shall
terminate this Lease. Acts of maintenance, efforts to relet
the Demised Premises, or the appointment of a receiver on
Lessor's initiative to protect Lessor's interest under this
Lease shall not constitute a termination of Lessee's right to
possession. On termination, Lessor has the right to recover
from Lessee:
(l) The worth, at the time of the award, of the unpaid
rent that has been earned at the time of termination
of this Lease; plus
(2) The worth, at the time of the award, of the amount by
which the unpaid rent that would have been earned
after the date of termination of this Lease until the
time of award exceeds the amount of the loss of rent
that Lessee proves could have been reasonably
avoided; plus
(3) The worth, at the time of the award, of the amount
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by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the
loss of rent that Lessee proves could have been
reasonably avoided; and
(4) Any other amount, and court costs, necessary to
compensate Lessor for all detriment approximately
caused by Lessee's default.
"The worth, at the time of the award," as used in (l) and (2)
above, is to be computed by allowing interest at the rate of ten percent (10%)
per annum from the date of default. "The worth, at the time of the award" as
used in (3) above is to be computed by discounting the amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of the award, plus
one percent (1%). The term "rent," as used in this Article shall be deemed to
include all monetary sums required to be paid by Lessee pursuant to the terms of
this Lease.
ARTICLE 20. LESSOR'S RIGHT TO CURE DEFAULTS
a. If Lessee shall fail to pay any sum of money, other than rent, required
to be paid by Lessee hereunder, or shall fail to perform any other act on
Lessee's part to be performed hereunder, and such failure shall continue for ten
(10) days after notice thereof by Lessor, Lessor may, but shall not be obligated
to do so, and without waiving or releasing Lessee from any obligations of
Lessee, make such payment or perform any such other act on Lessee's part to be
made or performed hereunder. All sums expended by Lessor, including necessary
incidental costs, shall be deemed additional rent hereunder and shall be payable
to Lessor immediately upon demand, together with interest thereon at the rate of
fifteen percent (15%) per annum from the date of expenditure to the date of
reimbursement.
ARTICLE 21. COSTS OF SUIT
21.01 In the event legal action between Lessor and Lessee Shall become
necessary in order to enforce or interpret this Lease, or any provision
contained herein, the prevailing party shall be entitled to recover all costs
and expenses as may be incurred in connection therewith, including reasonable
attorney's fees.
21.02 Should Lessor, without fault on Lessor's part, be made a party to any
litigation instituted by Lessee or by any third party against Lessee, or by or
against any person holding under or using the Demised Premises by license of
Lessee, or for the foreclosure of any lien for labor or materials furnished to
or for Lessee or any such other person or otherwise arising out of or resulting
from any act or transaction of Lessee or of any such
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other person, Lessee covenants to save and hold Lessor harmless from any
judgment rendered against Lessor or the Demised Premises or any part thereof,
and all costs and expenses, including reasonable attorney's fees, incurred by
Lessor in connection with such litigation.
ARTICLE 22. SUBORDINATION
22.01 In the event the holder of any deed of trust hereafter to be placed
against the Demised Premises requires that this Lease be subordinate to any such
encumbrance, this Lease shall be subordinate to that encumbrance if Lessor first
obtains from the holder of the deed of trust a written agreement providing that
for so long as Lessee shall perform all of Lessee's duties and obligations
hereunder, no foreclosure, deed given in lieu of foreclosure or sale under such
deed of trust shall affect Lessee's rights under this Lease. Lessee shall attorn
to any purchaser at any foreclosure sale, or to any grantee or transferee
designated in any deed given in lieu of foreclosure. Lessee shall execute the
written agreement and any other documents required by the holder of the deed of
trust to accomplish the purposes of this Article, and upon Lessee's failure or
refusal to do so within five (5) days after demand, Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to execute such agreement or other documents
for and on behalf of Lessee. The power of attorney granted herein shall be
deemed to be coupled with an interest and to be irrevocable.
ARTICLE 23. ESTOPPEL CERTIFICATE
23.01 Each party, within ten (10) days after notice from the other, shall
execute and deliver to the other, in recordable form, a certificate provided by
Lessor at no cost to Lessee stating that this Lease is unmodified and in full
force and effect, or in full force and effect as modified stating the
modifications. The certificate also shall state the amount of monthly rent, the
dates to which the rent has been paid in advance, the amount of any security
deposit or prepaid rent, and shall further certify that there is no incurred
default by the other party under the Lease, or specify such default, if any is
claimed. Failure to deliver the certificate within the ten (10) days, shall be
conclusive upon the party failing to deliver the certificate for the benefit of
the party requesting the certificate, and any successor to the party requesting
the certificate, that this Lease is in full force and effect and has not been
modified except as may be represented by the party requesting the certificate,
that there are no incurred defaults by the party requesting the certificate and
that not more than one (l) month's rent has been paid in advance.
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ARTICLE 24. HOLDING OVER
24.01 If Lessee remains in possession of all or any part of the Demised
Premises after the expiration of the term hereof, such tenancy shall be from
month to month only, and not a renewal hereof or an extension for any further
term and in such case rent shall be double the rent paid during the final month
of the lease term, and such month to month tenancy and other monetary sums due
hereunder shall be subject to every other term, covenant and agreement contained
herein.
ARTICLE 25. SURRENDER
25.01 Upon the expiration or earlier termination of this Lease, Lessee shall
surrender the Demised Premises in the same condition as received, ordinary wear
and tear and damage by fire, earthquake, act of God or the elements alone
excepted. Lessee shall remove all of Lessee's personal property and trade
fixtures and shall repair, at Lessee's expense, any damage to the Demised
Premises or the Industrial Center caused by such removal, including, without
limitation, repair of floors and patching and repainting of walls where
required, and removal of all trash, garbage and debris all to Lessor's
reasonable satisfaction. Any personal property or trade fixtures not removed at
the expiration or earlier termination of this Lease shall be deemed abandoned by
Lessee. If Lessor so elects, Lessee shall also remove any alterations or
improvements installed by or for Lessee which would otherwise remain as part of
the Demised Premises and Lessee shall restore the Demised Premises to their
condition prior to such installation.
a. Should Lessee fail to remove any personal property or trade fixtures,
or fail to remove any alterations or improvements as requested by
Lessor, Lessee shall be liable to Lessor for any and all removal costs,
transportation and storage expenses, and the cost of restoring the
Demised Premises as required herein. Lessee shall indemnify Lessor
against any loss, damage or liability resulting from delay by Lessee in
so surrendering the Demised Premises, including, without limitation,
any claims made by any succeeding tenants founded on such delay.
ARTICLE 26. WAIVER
26.01 No covenant, term or condition or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of any covenant, term or condition shall not be deemed
to be a waiver of any preceding or succeeding breach of the same or any other
21
covenant, term or condition. Acceptance by Lessor of any performance by Lessee
after the time the same shall have become due shall not constitute a waiver by
Lessor of the breach or default of any covenant, term or condition unless
otherwise expressly agreed to by Lessor in writing. The receipt and acceptance
by Lessor of delinquent rent shall constitute only a waiver of timely payment
for the particular rent payment involved.
ARTICLE 27. QUIET ENJOYMENT
27.01 Lessor hereby covenants with Lessee that upon payment by Lessee of the
rent as aforesaid and upon observance and performance of the terms of this Lease
by Lessee, Lessee shall peaceably hold and enjoy the Demised Premises for the
term hereby demised without hindrance or interruption by Lessor or any person or
persons lawfully or equitably claiming by, through or under Lessor.
ARTICLE 28. NOTICES
28.01 All notices or demands required or permitted to be given hereunder
shall be in writing and shall be either personally served or mailed by certified
mail, return receipt requested, to the other party at the following addresses:
TO LESSOR: TO LESSEE:
XXXX XXXXXX LATHING COMPANY,LLC CATAPULT COMMUNICATIONS
000 XXXXX XXXXXX 000 XXXXX XXXXXXX XX., XXXX. X
XXX XXXXX, XX 00000 XXXXXXXX XXXX, XX 00000
28.02 Either party may change the foregoing address by giving notice to the
other in the manner provided herein. Any notice sent by mail shall be deemed
received on the second business day following deposit of the notice in the
United States Mail, with proper postage prepaid thereon.
ARTICLE 29. MISCELLANEOUS PROVISIONS
29.01 Captions. The captions used in this Lease are for convenience only and
shall not be deemed to be relevant in resolving any question of interpretation
or construction of any provision contained herein.
29.02 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any
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prior agreements or understandings, whether written or oral. This Agreement can
only be modified by a written amendment hereto executed by both parties.
29.03 Severability. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
29.04 Time. Time is hereby declared to be of the essence of this Lease and
each and every provision hereof.
29.05 Corporate Authority. If Lessee is a corporation, each of the persons
executing this Lease on behalf of Lessee does hereby represent and warrant that
Lessee currently is in good standing in the state of its incorporation, that
Lessee is qualified to do business in California, that the corporation has full
right and authority to enter into this Lease, and that each person executing
this Lease on behalf of the corporation is duly authorized and empowered to do
so.
29.06 Calendar Days. All references herein to any acts or obligations to be
performed within a certain number of days shall mean calendar days, unless
otherwise specified.
29.07 Effective Date. Submission of this instrument for examination or
signature by Lessee does not constitute a reservation of or option for lease,
and this instrument is not effective as a lease or otherwise until execution and
delivery by both Lessor and Lessee, in which event this Lease shall become
effective on the date of execution or such other date as may be specified in
writing signed by Lessor and Lessee.
29.08 Choice of Law. This Lease shall be governed by and interpreted in
accordance with the laws of the State of California.
29.09 Memorandum of Lease. This Lease Agreement shall not be recorded but the
parties may agree to execute and record a Memorandum of Lease, in form
satisfactory to Lessor and Lessee.
a. Successors and Assigns. Subject to the restrictions against assignment
and subletting by Lessee, this Lease shall be binding upon and inure to
the benefit of the respective heirs, executors, administrators,
personal representatives, successors and assigns of the parties hereto.
ARTICLE 30. RIGHT OF FIRST REFUSAL
30.01
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During the term of the Lease, Lessor grants to Lessee the "Right of First
Refusal" on all "Available Space" within the Industrial Park at "Fair Market
Value" and otherwise on the same terms and conditions as presented herein for
the Demised Premises. For purposes hereof, "Available Space" shall mean all
leasable premises in the Industrial Park for which a lease has expired, after
the commencement date of this Lease, and which has been vacated by its tenant.
Lessor shall present a notice ("Offer") to Lessee of any available space in the
Industrial Park, as such becomes available from time to time, describing the
available space, and Lessee shall have three (3) business days from the receipt
of the notice in which to elect to exercise its right hereunder with respect to
such available space. In the event Lessee elects to exercise its right
hereunder, then Lessor shall prepare, and the parties shall promptly execute, an
amendment to this Lease confirming the addition of the available space to the
Demised Premises. If Lessee does not elect to exercise its right hereunder with
respect to the available space within the three (3) business day period provided
herein, then Lessor shall be free to lease the available space to any third
party on any terms and provisions that Lessor may determine. The parties confirm
that any available space taken by Lessee shall be taken in "As Is" condition
with no obligation for Lessor to make any improvements on behalf of Lessee.
ARTICLE 31. OPTION TO EXTEND
31. Lessee will have one (1) option to extend the term of the Lease for a
period of three (3) years commencing on the termination date of the original
term at ninety-five percent (95%) of "Fair Market Value" to be mutually agreed
upon and subject to all other terms, covenants and conditions contained herein.
However, if Lessor and Lessee cannot agree upon "Fair Market Value", it will be
submitted for arbitration by choosing three (3) Real Estate Brokers: one (1) by
Lessor, one (1) by Lessee and the third by the first two (2) Brokers. The
decision of the three (3) Brokers will be binding upon Lessor and Lessee with
regards to "Fair Market Value". Lessee shall give Lessor written notice at least
ninety (90) days prior to the expiration date of this Lease of Lessee's
intention to exercise said option granted herein. In order for Lessee to avail
itself of said option period, Lessee must have lived up to and observed the
timely performance of all terms, covenants and conditions contained in the Lease
Agreement.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day and year
first above written.
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LESSOR:
XXXX XXXXXX LATHING COMPANY, LLC
By:
Date:_______________________________________
LESSEE:
CATAPULT COMMUNICATIONS
By:
Date:_______________________________________
25
