EXHIBIT 10.5
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE is made this 6/th/ day of November, 2001, between
4085 Associates L.P., a California limited partnership ("Landlord"), and Memry
Corporation, a Delaware corporation ("Tenant") (Landlord and Tenant together,
the "Parties").
WITNESSETH:
WHEREAS, Landlord and Tenant entered into a Lease entitled "Business Park
Lease" ("Lease") dated August 27, 2001, for certain demised premises
("Premises") located at 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx, as more
particularly described in said Lease; and
WHEREAS, Tenant initially desired to lease the Premises for a one (1) year
term and during the course of negotiations of the Lease Tenant requested and
Landlord agreed that the demised term of the Lease would be extended for an
additional six (6) months such that the demised term of the Lease is for a
period of eighteen (18) months commencing October 1, 2001, and expiring on March
31, 2003; and
WHEREAS, Tenant now desires to extend the demised term of the Lease for an
additional period of eighteen (18) months such that the demised term of the
Lease will be for a total of three (3) years, and Landlord is willing to extend
the demised term of the Lease pursuant to the terms hereof; and
WHEREAS, at the commencement of negotiations of the terms and conditions of
the Lease Landlord agreed to limit Tenant's obligation to reimburse Landlord for
certain additional rent items and made certain other revisions to the Lease
because the demised term of the Lease was contemplated to be for a period of one
(1) year; Landlord agreed to keep such limitations and revisions in the Lease
when the demised term was subsequently extended to eighteen months; the Parties
now agree that such limitations and revisions will be inappropriate for a three
year term and desire to revise the Lease, as more particularly set out herein
below.
NOW, THEREFORE, in consideration of the covenants and conditions contained
herein, Landlord and Tenant agree to amend the Lease as follows:
1. The demised term of the Lease is extended for a period of eighteen (18)
months commencing April 1, 2003, and ending September 30, 2004.
2. The annual base rent provided for in Section 2.1. of the Lease shall be
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increased effective April 1, 2003, by a sum determined by applying the formula
set forth below, and such base rent as established (by adding the increase to
the then existing base rent) shall be the base rent for the remaining term of
the Lease (i.e., from April 1, 2003, to and including September 30, 2004).
The applicable rental increase shall be the amount determined by
multiplying the annual base rent payable on March 31, 2003, by the net
percentage increase in the previous eighteen (18) month period in the Monthly
Consumer Price Index and, if the net change is zero (0) or negative (less than
zero), then the applicable rental increase shall be $0. For purposes of
illustration only, if the Monthly Consumer Price Index shall increase in the
pertinent period from
165 to 170, the percentage of increase is 5/165x100 or 3.03 and the factor to be
used in the above formula shall be 3.03%.
Pertinent Period. For the purpose of the computation of the adjustment
effective April 1, 2003, the comparison shall be between the Monthly Consumer
Price Index last issued prior to October 1, 2001, and the Monthly Consumer Price
Index last issued prior to April 1, 2003.
"Monthly Consumer Price Index" means the index generally known as the
Consumer Price Index prepared and issued by the Bureau of Labor Statistics of
the Department of Labor of the United States of America, measuring consumer
prices throughout the San Francisco Bay Area generally (i.e., the index
generally known as the "Consumer Price Index for Urban Wage Earners and Clerical
Workers San Francisco-Oakland-San Xxxx All Items (CPI-W)" 1982-84=100). If said
bureau should at any time or from time to time change the base period for said
index, then Consumer Price Index needed for the purpose of this subsection shall
be appropriately converted in accordance with good statistical methods to an
index comparable (except for changes mentioned in the following sentence) to the
present index issued by said bureau based upon the present base period. Subject
to the foregoing provisions of this subsection, said index for any period shall
be such as may as of the particular time be prepared and issued by said bureau
(or if said bureau should cease to issue such index and some other agency shall
perform the same function then of such agency) and no changes in the methods or
practices of said bureau shall affect the intentions of this subsection.
3. Effective October 1, 2001, Section 11.3. of the Lease shall be deleted
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in is entirety, and the following Section 11.3. shall be inserted in-lieu
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thereof:
"Section 11.3. Landlord shall provide the following services and Tenant
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shall, in addition to all other payments required to be made under other
provisions of this Lease, on demand reimburse Landlord for Landlord's
out-of-pocket costs of: (i) maintaining, repairing and replacing the roof;
(ii) painting, maintaining and repairing the exterior of the building;
(iii) maintenance and repair of the trash enclosure utilized in connection
with the building; (vi) maintenance, repair and replacement of the glass on
the exterior of the building and (vii) any other maintenance, repair and
replacement other than that which Landlord is required to perform at
Landlord's expense per Section 11.1, Tenant shall also, on demand,
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reimburse Landlord for Landlord's out-of-pocket costs of maintaining,
repairing and replacing the heating and air conditioning equipment serving
the demised premises, whether furnished by Landlord or Tenant (except any
work that is described in Section 3.2). Landlord's said costs as used in
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this Section 11.3, shall include all costs and expenses of every kind or
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nature incurred by Landlord in the performance of such maintenance, repair
or replacements and Landlord's determination of the amount of said costs
and expenses will be final absent manifest error. Upon Tenant's written
request, Landlord shall provide Tenant with reasonable evidence of such
costs and expenses.
Tenant's obligation to reimburse Landlord for the cost of any
replacement required to be made by Landlord pursuant to this Section 11.3.
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during the demised term and required under good accounting practice to be
amortized, shall be
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limited to a proportionate share (not greater than 100%) of such
replacement costs (the "Reimbursement Amounts") calculated as follows:
(a) if such costs are incurred during the initial demised term of this
Lease, by multiplying such replacement costs by a fraction, the numerator
of which is the number of days in the demised term and the denominator of
which is the number of days in the estimated useful life of the
replacement; and
(b) if Landlord and Tenant agree to extend the term of this Lease beyond
September 30, 2004, and if such costs are incurred during any such extended
term of this Lease, by multiplying such replacement costs by a fraction,
the numerator of which is the number of days in the demised term of this
Lease (including any extended term) and the denominator of which is the
number of days in the estimated useful life of the replacement.
If a Reimbursement Amount has been determined under subsection (a) above
with respect to any replacement costs, and Landlord and Tenant subsequently
agree to extend the term of this Lease beyond September 30, 2004, or if
Tenant holds over after September 30, 2004, Tenant shall also be
responsible for another Reimbursement Amount with respect to such
replacement costs determined by multiplying such replacement costs by a
fraction, the numerator of which is the number of days in the extended term
of this Lease and the denominator of which is the number of days in the
estimated useful life of the replacement.
The foregoing limitation shall not apply to equipment furnished by
Tenant and maintained by Landlord. Tenant shall pay any Reimbursement
Amounts, as additional rent, monthly on a straight-line basis amortized
over the remaining demised term of the Lease (including any extended or
holdover term) using an interest rate equal to ten percent (10%) per annum.
At Tenant's election, Tenant may pay any said Reimbursement Amount in a
lump sum upon billing by Landlord and accrue no further interest with
regard to such paid Reimbursement Amount.
The limitations on Tenant's liability for expenses hereunder shall in no
event apply to any costs for repairs or replacements occasioned by (x)
Tenant's negligent acts or omissions or those of its employees,
contractors, agents, invitees or servants, or (y) the particular nature of
Tenant's business, all of which costs shall be borne solely by Tenant.
For purposes of this Section 11.3., the term `initial demised term'
shall be the three year period from October 1, 2001, to and including
September 30, 2004," and the term `replacements' shall be replacements
which are reasonably necessary for the maintenance and/or preservation of
the property.
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4. Effective October 1, 2001, Section 18.3. of the Lease shall be
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deleted in its entirety, and the following Section 18.3. shall be inserted
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in-lieu thereof:
"Section 18.3. Tenant agrees during the demised term to pay to Landlord
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an annual charge which shall be Landlord's actual out-of-pocket costs of
operating, maintaining and/or replacing all of the areas and facilities
mentioned in this Article. The annual charge shall be an estimate computed
on the basis of periods of twelve (12) consecutive calendar months,
commencing and ending on such dates as may be designated by Landlord, and
shall be paid in monthly installments on the first day of each calendar
month in the amount estimated by Landlord. Within ninety (90) days after
the end of each such annual period, Landlord will determine (and furnish to
Tenant a statement showing in reasonable detail) the actual annual charge
for such period and the amounts so estimated and paid during such period
shall be adjusted within such ninety (90) days (including adjustments on a
pro rata basis of any partial such period at either end of the demised
term) and one party shall pay to the other on demand whatever amount is
necessary to effectuate such adjustment.
Landlord's said costs shall consist of and include all costs and
expenses of every kind or nature incurred by Landlord in the operation,
maintenance and/or replacement of all of the areas, facilities and
improvements mentioned in this Article determined in accordance with good
accounting practice by an accountant employed by Landlord. The
determination of such accountant shall be conclusive. Without otherwise
limiting the generality of the foregoing, there shall be included in such
costs public liability and property damage insurance, landscape
maintenance, maintenance of utilities, water, cleaning of areas, facilities
and improvements, operation of lighting, common area taxes and assessments
determined in the same manner as taxes and assessments on the demised
premises, policing and sweeping of parking areas, supervising with
attendants, repairs, replacements and maintenance, and an amount equal to
ten percent (10%) of the total of all of the above for administration of
the Parking and Accommodation Areas.
Tenant's obligation to reimburse Landlord for the cost of any
replacement required to be made by Landlord pursuant to this Section 18.3.
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during the demised term and required under good accounting practice to be
amortized, shall be limited to a proportionate share (not greater than
100%) of such replacement costs (the "Reimbursement Amounts") calculated as
follows:
(a) if such costs are incurred during the initial demised term of this
Lease, by multiplying such replacement costs by a fraction, the numerator
of which is the number of days in the demised term and the denominator of
which is the number of days in the estimated useful life of the
replacement; and
(b) if Landlord and Tenant agree to extend the term of this Lease beyond
September 30, 2004, and if such costs are incurred during any such extended
term of this Lease, by multiplying such replacement costs by a fraction,
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the numerator of which is the number of days in the demised term of this
Lease (including any extended term) and the denominator of which is the
number of days in the estimated useful life of the replacement.
If a Reimbursement Amount has been determined under subsection (a) above
with respect to any replacement costs, and Landlord and Tenant subsequently
agree to extend the term of this Lease beyond September 30, 2004, or if
Tenant holds over after September 30, 2004, Tenant shall also be
responsible for another Reimbursement Amount with respect to such
replacement costs determined by multiplying such replacement costs by a
fraction, the numerator of which is the number of days in the extended term
of this Lease and the denominator of which is the number of days in the
estimated useful life of the replacement.
The foregoing limitation shall not apply to equipment furnished by
Tenant and maintained by Landlord. Tenant shall pay any Reimbursement
Amounts, as additional rent, monthly on a straight-line basis amortized
over the remaining demised term of the Lease (including any extended or
holdover term) using an interest rate equal to ten percent (10%) per annum.
At Tenant's election, Tenant may pay any said Reimbursement Amount in a
lump sum upon billing by Landlord and accrue no further interest with
regard to such paid Reimbursement Amount.
The limitations on Tenant's liability for expenses hereunder shall in no
event apply to any costs for repairs or replacements occasioned by (x)
Tenant's negligent acts or omissions or those of its employees,
contractors, agents, invitees or servants, or (y) the particular nature of
Tenant's business, all of which costs shall be borne solely by Tenant.
For purposes of this Section 18.3, the term `initial demised term' shall
be the three year period from October 1, 2001, to and including September
30, 2004," and the term `replacements' shall be replacements which are
reasonably necessary for the maintenance and/or preservation of the
property.
5. It is understood and agreed that all other terms and conditions of
the Lease shall be and remain the same.
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IN WITNESS WHEREOF, the parties have executed this Amendment to Lease as
of the date first hereinabove written.
TENANT: LANDLORD:
MEMRY CORPORATION, 4065 ASSOCIATES, L.P.,
a Delaware corporation a California limited partnership
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Title: SVP & CFO Xxxxxxx X. Xxxxxx, Trustee
General Partner
By: /s/ Xxxxxx Xxxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Title: VP & GM Xxxxxx X. Xxxxxxx, Trustee
General Partner
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