[THE MOZART DEVELOPMENT COMPANY LETTERHEAD]
January 31, 2000
Xx. Xxx Xxxxxxxxx
Vice President of Finance & Chief Financial Officer
Conductus, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 VIA FAX #000-000-000
RE: The Two (2) December 8, 1994 Lease Agreements, one for the property
at 000 Xxxx Xxxxx Xxxxxx and the other on the adjacent property at
000 Xxxx Xxxxx Xxxxxx, both by and between Xxxxxx-XxXxx Limited
Partnership and Conductus, Inc.
Dear Xxx:
Pursuant to Paragraph 40 of the Leases listed above, we have received your
Opinion Notice to exercise the extension options. In addition to the lease
extensions, you have requested that the terms of the two building leases be
made coterminous. The purpose of this letter is to propose terms for the
cotermination of leases and to establish the Market Rent for the two
properties.
The initial terms for the 965 and the 969 Xxxxx leases expire August 31, 2000
and August 31, 2001, respectively. To create the cotermination of leases, we
propose a 5.5-year extension as of September 1, 2000 for both buildings. The
extension would commence on September 1, 2000 and expire on February 28, 2006.
To establish a market rent for the two buildings, we reviewed the current
leasing activity on comparable space in the local market. We also consulted
Xxx Xxxxxx, a Vice President of Cornish & Xxxxx Commercial and Xxxxx Xxxxxx,
a Senior Vice President of CPS Corfac International. We have concluded that
the market rents for the 965 and the 969 Xxxxx buildings are $2.25/SF NNN and
$1.90/SF NNN, respectively, with 3% annual escalations.
In recognition of the 965 Xxxxx building tenant improvements that were paid
for by the Tenant, we propose a $0.15/SF discount in that building's rent.
This would reduce the rent for that building to $2.10/SF. To convert the two
building rents into one, the $2.10/SF and $1.90/SF are averaged. In
conclusion, the rent for the two buildings will be $2.00/SF with 3% annual
bumps.
January 31, 2000
Page 2
To recognize that the 969 Xxxxx building has one additional year left on the
initial lease term, the rent in first year of the 5.5-year extension period
will be $1.37/SF. This is an average of the new rent of $2.00/SF and the
existing rent of $0.75/SF in the 969 Xxxxx building. A schedule of monthly
base NNN rent is listed below:
STARTING SEPTEMBER 1
--------------------
OF THE YEAR
-----------
2000 $1.37/SF
2001 $2.06/SF
2002 $2.12/SF
2003 $2.19/SF
2004 $2.25/SF
2005 $2.32/SF
If you agree with and accept these terms and conditions, please execute the
letter and return it to me. If you have any questions, please do not hesitate
to call me or email; xxxxxxxx@xxxxxxxxx.xxx.
Sincerely,
THE MOZART DEVELOPMENT COMPANY
/s/ XXXXX XXXXXXX
----------------------
Xxxxx Xxxxxxx
AGREED AND ACCEPTED,
CONDUCTUS, INC.
/s/ XXX XXXXXXXXX
----------------------
Xxx Xxxxxxxxx
Vice President of Finance & Chief Financial Officer
