EX-10(a)(1)(ii)
SECOND AMENDMENT TO LEASE
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This Second Amendment to Lease ("Amendment"), dated for reference
purposes only as November 1, 1998, is made and entered into by and between THE
REALTY ASSOCIATES FUND III, L.P. (successor-in-interest to CB Institutional Fund
VII) ("Landlord"), and METRO-TEL CORP., a Delaware corporation (collectively,
"Tenant").
RECITALS
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A. Landlord's predecessor-in-interest and Tenant entered into that
certain Industrial Real Estate lease dated April 1, 1991 ("Original Lease") for
certain Premises commonly known as 000 X. Xxxxxxxx Xxxxxxxxx, Xxxxxxxx,
Xxxxxxxxxx, which Original Lease has been amended pursuant to the terms of that
certain first Amendment to Lease dated as of December 5, 1995 ("First
Amendment"). For purposes of this Amendment, the term "Lease" shall mean the
Original Lease as amended by the First Amendment. The capitalized terms used and
not otherwise defined herein shall have the same meanings and definitions as set
forth in the Lease.
B. The Lease Term is presently scheduled to expire on March 31, 1999.
Landlord and Tenant desire to extend the Lease Term pursuant to the terms and
conditions set forth below.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Extension of Term. Landlord and Tenant acknowledge that the Lease
Term is presently scheduled to expire on March 31, 1999. The Term is hereby
extended for a period of three (3) years ("Extension Term"), commencing on April
1, 1999 and, unless sooner terminated pursuant to the terms of the Lease,
expiring on March 31, 2002. Such extension shall be on and subject to all the
terms and conditions of the Lease, as amended by this Amendment (and the term
"Lease Term" as used in the Lease shall be deemed to include the Extension
Term), and Landlord shall have no obligation to provide any Premises
improvements or any allowances therefor.
2. Base Rent. The Base Rent payable by Tenant under the Lease during
the Extension Term shall be as follows:
Months Base Rent
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April 1, 1999 - September 30, 2000 $13,976.95 per month
October 1, 2000 - March 31, 2002 $15,052.10 per month
3. Option to Extend Term.
3.1 Grant of Option. Landlord hereby grants to Tenant one (1)
option (referred to hereinafter as the "Option") to extend the Lease Term for an
additional consecutive term of two
(2) years (hereinafter called the "Extension") commencing on the day immediately
following the expiration of the Extension Term, on the same terms and conditions
as set forth in the Lease (as amended by this Amendment), except that the Base
Rent shall be the amount determined as set forth below. The Option shall be
exercised only by written notice delivered to Landlord not more than nine (9)
months and not less than six (6) months prior to the expiration of the Extension
Term. If Tenant fails to deliver to Landlord written notice of the exercise of
the Option within the time period prescribed above, the Option shall lapse and
there shall be no further right to extend the Term of the Lease. The Option
shall be exercisable by Tenant on the express conditions that (i) at the time of
the exercise of the Option, and thereafter at all times prior to the
commencement of the Extension, a default by Tenant shall not have occurred and
be continuing under the Lease, and (ii) Tenant has not been ten (10) or more
days late in the payment of any rent under the Lease more than a total of three
(3) times during the Lease Term. If Tenant properly exercises the Option, "Lease
Term", as used herein and in the Lease, shall be deemed to include the
Extension, unless specified otherwise herein or in the Lease.
3.2 Personal Option. The Option is personal to Metro-Tel
Corp., and shall not be assignable or transferable to any assignee of Tenant or
any sublessee of all or any portion of the Premises, whether voluntarily or
involuntarily or whether by operation of law or otherwise. If Tenant subleases
or assigns or otherwise transfers any interest under the Lease prior to the
exercise of the Option, the Option shall lapse. If Tenant subleases or assigns
or otherwise transfers any interest of Tenant under the Lease after the exercise
of the Option but prior to the commencement of the Extension, the Option shall
lapse and the Lease Term shall expire as if the Option was not exercised.
3.3 Calculation of Base Rent. The Base Rent payable by Tenant
under the Lease during the Extension shall be increased, as of the commencement
of the Extension (hereinafter called the "Extension Rental Adjustment Date") to
the "Fair Market Value" of the Premises, determined in the following manner: Not
later than one hundred (100) days prior to the Extension Rental Adjustment Date,
Landlord and Tenant shall meet in an effort to negotiate, in good faith, the
Fair Market Value of the Premises as of the Extension Rental Adjustment Date. If
Landlord and Tenant have not agreed upon the Fair Market Value of the Premises
at least ninety (90) days prior to the Extension Rental Adjustment Date, the
Fair Market Value shall be determined by the following appraisal method:
(i) If Landlord and Tenant are not able to agree upon
the Fair Market Value of the Premises within the time period described
above, then Landlord and Tenant shall attempt to agree in good faith
upon a single appraiser not later than seventy-five (75) days prior to
the Extension Rental Adjustment Date. If Landlord and Tenant are unable
to agree upon a single appraiser within such time period, then Landlord
and Tenant shall each appoint one appraiser not later than sixty-five
(65) days prior to the Extension Rental Adjustment Date, and Landlord
and Tenant shall each give written notice to the other of such
appointment at the time of such appointment. Within ten (10) days
thereafter, the two appointed appraisers shall appoint a third
appraiser. If either Landlord or Tenant fails to appoint its appraiser
and to give written notice thereof to the other party within the
prescribed
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time period, the single appraiser appointed shall determine the Fair
Market Value of the Premises. If both parties fail to appoint
appraisers within the prescribed time period, then the first appraiser
thereafter selected by a party (such selection to be by written notice
thereof to such appraiser and the other party) shall determine the Fair
Market Value of the Premises. Each party shall bear the cost of its own
appraiser and the parties shall share equally the cost of the single or
third appraiser if applicable. All appraisers shall have at least five
(5) years' experience in the appraisal of commercial/industrial real
property in the area in which the Premises are located and shall be
members of professional organizations such as MAI or its equivalent.
(ii) For the purposes of such appraisal, the term
"Fair Market Value" shall mean the price that a ready and willing
tenant would pay, as of the Extension Rental Adjustment Date, as
monthly rent, to a ready and willing landlord of property comparable to
the Premises if such property were exposed for lease on the open market
for a reasonable period of time and taking into account all of the
purposes for which such property may be used. If a single appraiser is
chosen, then such appraiser shall determine the Fair Market Value of
the Premises. Otherwise, the Fair Market Value of the Premises shall be
the arithmetic average of the two (2) of the three (3) appraisals which
are closest in amount, and the third appraisal shall be disregarded.
Landlord and Tenant shall instruct the appraiser(s) to complete their
determination of the Fair Market Value not later than thirty (30) days
prior to the Extension Rental Adjustment Date. If the Fair Market Value
is not determined prior to the Extension Rental Adjustment Date, then
Tenant shall continue to pay to Landlord the Base Rent applicable to
the Premises immediately prior to the Extension Rental Adjustment Date
until the Fair Market Value is determined. When the Fair Market Value
of the Premises is determined, Landlord shall deliver notice thereof to
Tenant, and Tenant shall pay to Landlord, within ten (10) days after
receipt of such notice, the difference between the Base Rent actually
paid by Tenant to Landlord for the period after the Extension Rental
Adjustment Date and the new Base Rent determined hereunder effective as
of the Extension Rental Adjustment Date. In no event shall the Base
Rent payable by Tenant during the Extension be reduced below the Base
Rent payable by Tenant under the Lease immediately prior to the
Extension Rental Adjustment Date.
4. Security Deposit. Landlord and Tenant acknowledge that Landlord is
currently holding the sum of $9,676.35 as the Security Deposit under the Lease.
The Security Deposit is hereby increased from $9,676.35 to $15,052.10.
Concurrently with Tenant's execution of this Amendment, Tenant shall pay to
Landlord the sum of $5,375.75, which amount shall be applied by Landlord toward
such increased Security Deposit.
5. Brokers. Tenant warrants and represents to Landlord that neither
Tenant nor any of its representatives have had any dealings with any real estate
broker, agent or finder in connection with the subject matter of this Agreement,
and that Tenant knows of no real estate broker, agent or finder who is or might
be entitled to a commission or fee in connection with the subject matter of this
Agreement. Tenant shall defend, indemnify and hold Landlord and its agents
harmless from and
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against any and all liabilities or expenses (including attorneys' fees and
costs) arising out of or in connection with claims made by any broker or
individual for commissions or fees related to the use or alleged use of the
services of such broker or individual by Tenant or its representatives in
connection with the subject matter of this Amendment. The foregoing defense,
indemnity and hold harmless obligation of Tenant shall survive the expiration or
sooner termination of the Lease.
6. General.
6.1 Effect of Amendment; Ratification. Except as otherwise
modified by this Amendment, the Lease shall remain unmodified and in full force
and effect. In the event of any conflict or inconsistency between the terms and
conditions of the Lease and the terms and conditions of this Amendment, the
terms and conditions of this Amendment shall prevail.
6.2 Attorneys' Fees. The provisions of the Lease respecting
payment of attorney's fees shall also apply to this Amendment.
6.3 Counterparts. If this Amendment is executed in
counterparts, each counterpart shall be deemed an original.
6.4 Authority to Execute Amendment. Each individual executing
this Amendment on behalf of a partnership or corporation represents that he or
she is duly authorized to execute and deliver this Amendment on behalf of the
partnership and/or corporation and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.
6.5 Governing Laws. This Amendment and any enforcement of the
agreements and modifications set forth above shall be governed by and construed
in accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first above written.
LANDLORD:
THE REALTY ASSOCIATES FUND III, L.P.
By: Realty Associates Fund III GP, Limited
Partnership (its general partner)
By: Realty Fund III GP, Inc. (its general
partner)
By:
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TENANT:
METRO-TEL CORP. a Delaware corporation
By:
Name:
Its:
By:
Name:
Its:
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