(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For fiscal year ended September 30, 2010 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to . |
Delaware
(State or Other Jurisdiction of Incorporation or Organization) 15 Elizabeth Drive Chelmsford, Massachusetts (Address of Principal Executive Offices) |
04-3040660
(I.R.S. Employer Identification No.) 01824 (Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $0.01 par value
|
The NASDAQ Stock Market LLC |
Large accelerated
filer
o
|
Accelerated filer þ |
Non-accelerated
filer
o
(Do not check if a smaller reporting company) |
Smaller reporting company o |
2
17
58
67
76
77
Item 1.
Business
2010
2009
84
%
71
%
9
%
14
%
7
%
15
%
100
%
100
%
3
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4
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Fiscal Year Ended September 30, 2010
Critical
Systems
Global Customer
Solutions
Solutions
Operations
70
%
96
%
85
%
20
%
10
%
10
%
4
%
5
%
100
%
100
%
100
%
Fiscal Year Ended September 30, 2009
Critical
Systems
Global Customer
Solutions
Solutions
Operations
56
%
82
%
86
%
27
%
8
%
17
%
18
%
6
%
100
%
100
%
100
%
5
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6
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7
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Item 1A.
Risk
Factors
8
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demand for our products as a result of the cyclical nature of
the semiconductor manufacturing industry and the markets upon
which it depends or otherwise;
changes in the timing and terms of product orders by our
customers as a result of our customer concentration or otherwise;
changes in the mix of products and services that we offer;
timing and market acceptance of our new product introductions;
delays or problems in the planned introduction of new products,
or in the performance of any such products following delivery to
customers;
new products, services or technological innovations by our
competitors, which can, among other things, render our products
less competitive due to the rapid technological change in our
industry;
the timing and related costs of any acquisitions, divestitures
or other strategic transactions;
our ability to reduce our costs in response to decreased demand
for our products and services;
disruptions in our manufacturing process or in the supply of
components to us;
write-offs for excess or obsolete inventory; and
competitive pricing pressures.
accurately identify and define new market opportunities and
products;
obtain market acceptance of our products;
timely innovate, develop and commercialize new technologies and
applications;
adjust to changing market conditions;
differentiate our offerings from our competitors offerings;
obtain intellectual property rights where necessary;
continue to develop a comprehensive, integrated product and
service strategy;
9
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properly price our products and services; and
design our products to high standards of manufacturability such
that they meet customer requirements.
longer sales-cycles and time to collection;
tariff and international trade barriers;
fewer legal protections for intellectual property and contract
rights abroad;
different and changing legal and regulatory requirements in the
jurisdictions in which we operate;
government currency control and restrictions on repatriation of
earnings;
fluctuations in foreign currency exchange and interest
rates; and
political and economic changes, hostilities and other
disruptions in regions where we operate.
10
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11
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variations in operating results from quarter to quarter;
changes in earnings estimates by analysts or our failure to meet
analysts expectations;
changes in the market price per share of our public company
customers;
market conditions in the semiconductor and other industries into
which we sell products;
general economic conditions;
political changes, hostilities or natural disasters such as
hurricanes and floods;
low trading volume of our common stock; and
the number of firms making a market in our common stock.
12
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Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
Square Footage
Ownership Status/Lease
(Approx.)
Corporate headquarters, training, manufacturing and R&D
214,000
Owned
Manufacturing
97,000
October 2014
Manufacturing and R&D
131,900
March 2016
Manufacturing
85,400
August 2015
Manufacturing and R&D
72,300
September 2011
Manufacturing and R&D
60,900
February 2015
Manufacturing, R&D and sales & support
34,100
November 2015
R&D and sales & support
31,300
Several leases with terms
that require 6-month notice
Item 3.
Legal
Proceedings
13
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Item 4.
Removed
and Reserved
Item 5.
Market
for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
9.11
$
6.13
10.82
7.20
10.23
6.63
9.17
5.46
$
8.26
$
2.58
6.28
3.33
6.48
3.85
8.15
4.16
14
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COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Brooks Automation, Inc., The NASDAQ/AMEX/NYSE Index,
the NYSE/NASDAQ/AMEX SIC Codes
3550-3559
and a Peer Group
*
$100 invested on 9/30/05 in stock or index, including
reinvestment of dividends.
Fiscal year ending September 30.
9/30/05
9/29/06
9/28/07
9/30/08
9/30/09
9/30/10
100.00
97.90
106.83
62.72
57.99
50.34
100.00
111.64
135.67
105.68
101.89
111.45
100.00
120.59
140.90
96.17
98.52
114.05
100.00
124.07
143.29
89.29
101.27
109.80
15
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Maximum
Number (or
Approximate
Total Number of
Dollar Value) of
Total
Shares Purchased as
Shares that May Yet
Number
Average Price
Part of Publicly
be Purchased Under
of Shares
Paid
Announced Plans
the Plans or
Purchased
per Share
or Programs
Programs
$
$
1,633
8.02
1,633
20,146
6.87
20,146
21,779
$
6.95
21,779
$
Item 6.
Selected
Financial Data
Year Ended September 30,
2010(7)
2009(5)
2008(4)
2007(1)(3)
2006(1)(2)
(In thousands, except per share data)
$
592,972
$
218,706
$
526,366
$
743,258
$
607,494
$
166,295
$
(5,996
)
$
126,828
$
219,595
$
186,650
$
56,064
$
(226,917
)
$
(236,152
)
$
55,636
$
24,067
$
59,025
$
(227,773
)
$
(236,678
)
$
54,369
$
21,680
$
58,982
$
(227,858
)
$
(235,946
)
$
151,472
$
25,930
$
0.92
$
(3.62
)
$
(3.67
)
$
0.74
$
0.31
$
0.92
$
(3.62
)
$
(3.67
)
$
0.73
$
0.31
63,777
62,911
64,542
73,492
72,323
64,174
62,911
64,542
74,074
72,533
16
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As of September 30,
2010
2009
2008
2007
2006
(In thousands)
$
518,224
$
413,322
$
663,638
$
1,014,838
$
992,577
$
219,176
$
150,700
$
235,795
$
346,883
$
252,633
$
388,815
$
319,129
$
541,995
$
859,779
$
799,134
Year Ended September 30, 2010
First
Second
Third
Fourth
Quarter
Quarter(7)
Quarter
Quarter
(In thousands, except per share data)
$
106,197
$
148,353
$
156,790
$
181,632
$
26,246
$
38,950
$
45,905
$
55,194
$
(2,877
)
$
20,948
$
16,646
$
24,308
$
(0.04
)
$
0.33
$
0.26
$
0.38
Year Ended September 30, 2009
First
Second
Third
Fourth
Quarter
Quarter(6)
Quarter
Quarter
(In thousands, except per share data)
$
73,446
$
37,299
$
43,876
$
64,085
$
6,388
$
(27,796
)
$
3,550
$
11,862
$
(35,170
)
$
(152,633
)
$
(25,502
)
$
(14,468
)
$
(0.56
)
$
(2.43
)
$
(0.41
)
$
(0.23
)
(1)
Amounts from continuing operations exclude results of operations
of the Specialty Equipment and Life Sciences division and the
Software division which were reclassified as a discontinued
operation in October 2006.
(2)
Amounts include results of operations of Helix Technology
Corporation (acquired October 26, 2005) and Synetics
Solutions Inc. (acquired June 30, 2006) for the
periods subsequent to their respective acquisitions.
(3)
Amounts include results of operations of Keystone Electronics
(Wuxi) Co., Ltd. (acquired effective July 1, 2007) for
the periods subsequent to its acquisition. Net income (loss)
attributable to Brooks Automation, Inc. includes a
$97.2 million gain from discontinued operations in
connection with the Software division.
(4)
Income (loss) from continuing operations before income taxes and
equity in earnings of joint ventures, income (loss) from
continuing operations and net income (loss) includes a
$197.9 million charge for the impairment of goodwill and a
$5.7 million charge for the impairment of long-lived assets.
(5)
Gross profit (loss) includes a $20.9 million impairment of
long-lived assets. Income (loss) from continuing operations
before income taxes and equity in earnings of joint ventures,
income (loss) from continuing operations and net income (loss)
includes a $71.8 million charge for the impairment of
goodwill and a $35.5 million charge for the impairment of
long-lived assets.
(6)
Gross profit (loss) includes a $20.5 million impairment of
long-lived assets. Income (loss) from continuing operations
before income taxes and equity in earnings of joint ventures,
income (loss) from continuing operations and net income (loss)
includes a $71.8 million charge for the impairment of
goodwill and a $35.1 million charge for the impairment of
long-lived assets.
(7)
Income (loss) from continuing operations before income taxes and
equity in earnings of joint ventures, income (loss) from
continuing operations and net income (loss) includes a
$7.8 million gain on the sale of certain patents and
patents pending related to a legacy product line.
Table of Contents
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
18
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19
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20
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21
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22
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23
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24
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25
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26
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27
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Year Ended
September 30, 2009
$
19,608
1,316
20,924
1,145
13,443
14,588
$
35,512
28
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29
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Less than
One to
Four to
Total
One Year
Three Years
Five Years
Thereafter
$
22,913
$
6,181
$
13,645
$
3,087
$
4,709
(1)
4,702
7
5,924
458
1,960
2,003
1,503
91,601
88,945
2,656
$
125,147
$
100,286
$
18,268
$
5,090
$
1,503
(1)
Amounts do not reflect approximately $1.4 million of
contractual sublease income.
30
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they do not reflect our cash expenditures for capital
expenditure or contractual commitments;
31
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they do not reflect changes in, or cash requirements for, our
working capital requirements;
other companies, including other companies in our industry, may
calculate these measures differently than we do, limiting their
usefulness as a comparative measure.
Year Ended September 30,
2010
2009
2008
$
58,982
$
(227,858
)
$
(235,946
)
(1,041
)
(2,265
)
(6,996
)
(2,746
)
643
1,233
18,420
25,856
34,538
$
73,615
$
(203,624
)
$
(207,171
)
Year Ended September 30,
2010
2009
2008
$
73,615
$
(203,624
)
$
(207,171
)
6,567
5,817
6,909
35,512
5,687
71,800
197,883
2,529
12,806
7,287
3,612
(7,840
)
(679
)
191
1,185
3,940
$
75,062
$
(72,892
)
$
13,856
32
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33
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Item 7A.
Quantitative
and Qualitative Disclosures About Market Risk
34
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36
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37
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Year Ended September 30,
2010
2009
2008
(In thousands, except per share data)
$
532,174
$
167,552
$
456,422
60,798
51,154
69,944
592,972
218,706
526,366
377,599
155,370
335,163
49,078
48,408
64,375
20,924
426,677
224,702
399,538
166,295
(5,996
)
126,828
31,162
31,607
42,924
85,597
91,231
110,516
71,800
197,883
14,588
5,687
2,529
12,806
7,287
119,288
222,032
364,297
47,007
(228,028
)
(237,469
)
1,121
2,719
7,403
80
454
407
7,840
191
1,185
3,940
(367
)
(31
)
1,739
56,064
(226,917
)
(236,152
)
(2,746
)
643
1,233
58,810
(227,560
)
(237,385
)
215
(213
)
707
59,025
(227,773
)
(236,678
)
679
679
$
59,025
$
(227,773
)
$
(235,999
)
(43
)
(85
)
53
$
58,982
$
(227,858
)
$
(235,946
)
Brooks Automation, Inc. common stockholders
$
0.92
$
(3.62
)
$
(3.67
)
0.01
$
0.92
$
(3.62
)
$
(3.66
)
Brooks Automation, Inc. common stockholders
$
0.92
$
(3.62
)
$
(3.67
)
0.01
$
0.92
$
(3.62
)
$
(3.66
)
63,777
62,911
64,542
64,174
62,911
64,542
38
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Year Ended September 30,
2010
2009
2008
(In thousands)
$
59,025
$
(227,773
)
$
(235,999
)
18,420
25,856
34,538
107,312
203,570
(7,840
)
6,567
5,817
6,909
942
127
(830
)
(215
)
213
(707
)
4
17
1,070
(679
)
191
1,185
3,940
(53,163
)
29,963
38,612
(31,341
)
21,779
(610
)
(499
)
4,527
5,790
39,352
(10,947
)
(20,601
)
1,487
(676
)
(1,892
)
2,483
(2,496
)
(2,772
)
(913
)
(3,869
)
(5,839
)
(4,123
)
(5,007
)
(3,089
)
(2,505
)
(2,522
)
(7,755
)
27,872
(56,494
)
13,656
(3,472
)
(11,339
)
(23,439
)
(117,473
)
(59,091
)
(151,231
)
84,546
75,628
190,592
7,840
(892
)
1,918
(1,000
)
243
1,055
(75
)
(29,208
)
6,253
16,765
(90,194
)
1,245
1,248
2,391
1,245
1,248
(87,803
)
(71
)
(1,291
)
(581
)
(162
)
(50,284
)
(57,963
)
59,985
110,269
168,232
$
59,823
$
59,985
$
110,269
$
80
$
454
$
407
$
(1,866
)
$
246
$
2,167
39
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Total
Accumulated
Brooks
Common
Other
Automation,
Common
Stock at
Additional
Comprehensive
Comprehensive
Inc.
Noncontrolling
Stock
Par
Paid-In
Income
Income
Accumulated
Treasury
Stockholders
Interests in
Total
Shares
Value
Capital
(Loss)
(Loss)
Deficit
Stock
Equity
Subsidiaries
Equity
76,483,603
$
765
$
1,780,401
$
18,202
$
(828,827
)
$
(110,762
)
$
859,779
$
462
$
860,241
561,134
5
1,581
1,586
1,586
6,909
6,909
6,909
(90,194
)
(90,194
)
(90,194
)
$
(235,999
)
(235,946
)
(235,946
)
(53
)
(235,999
)
(125
)
(125
)
(125
)
(125
)
962
962
962
962
(976
)
(976
)
(976
)
(976
)
$
(236,138
)
77,044,737
770
1,788,891
18,063
(1,064,773
)
(200,956
)
541,995
409
542,404
838,436
9
911
920
920
5,817
5,817
5,817
$
(227,773
)
(227,858
)
(227,858
)
85
(227,773
)
4,276
4,276
4,276
4,276
471
471
471
471
(6,492
)
(6,492
)
(6,492
)
(6,492
)
$
(229,518
)
77,883,173
779
1,795,619
16,318
(1,292,631
)
(200,956
)
319,129
494
319,623
986,158
10
935
945
945
6,567
6,567
6,567
$
59,025
58,982
58,982
43
59,025
4,229
4,229
4,229
4,229
(36
)
(36
)
(36
)
(36
)
(1,001
)
(1,001
)
(1,001
)
(1,001
)
$
62,217
78,869,331
$
789
$
1,803,121
$
19,510
$
(1,233,649
)
$
(200,956
)
$
388,815
$
537
$
389,352
40
Table of Contents
1.
Nature of
the Business
2.
Summary
of Significant Accounting Policies
41
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20 - 40 years
2 - 7 years
2 - 10 years
3 - 10 years
42
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7 - 15 years
2 - 10 years
5 years
3 - 6 years
3 - 5 years
4 - 11 years
43
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44
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Year Ended September 30,
2010
2009
2008
$
170
$
292
$
837
5,944
5,092
5,443
453
433
629
$
6,567
$
5,817
$
6,909
Year Ended September 30,
2010
2009
2008
0.2
%
0.7
%
2.8
%
58
%
70
%
46
%
6 months
6 months
6 months
0
%
0
%
0
%
45
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46
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3.
Marketable
Securities
47
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Gross
Gross
Amortized
Unrealized
Unrealized
Cost
Gains
Losses
Fair Value
$
38,319
$
62
$
(8
)
$
38,373
38,617
185
(4
)
38,798
1,771
23
(4
)
1,790
186
186
2,405
1
(2
)
2,404
1,053
1,053
$
82,351
$
271
$
(18
)
$
82,604
$
21,410
$
149
$
$
21,559
16,791
143
16,934
2,208
20
(80
)
2,148
2,629
5
2,634
7,015
(2
)
7,013
248
248
$
50,301
$
317
$
(82
)
$
50,536
(1)
Fair value amounts include approximately $0.8 million of
investments in the Federal Home Loan Mortgage and Federal
National Mortgage Association.
(2)
Fair value amounts include approximately $1.0 million of
investments in the Federal Home Loan Mortgage and Federal
National Mortgage Association.
48
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Fair Value
$
49,011
29,552
4,041
$
82,604
4.
Fair
Value Measurements
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Significant Other
Significant
Active Markets for
Observable
Unobservable
September 30,
Identical Assets
Inputs
Inputs
2010
(Level 1)
(Level 2)
(Level 3)
$
21,130
$
21,130
$
$
82,604
38,798
43,806
$
103,734
$
59,928
$
43,806
$
49
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Fair Value Measurements at Reporting Date Using
Quoted Prices in
Significant Other
Significant
Active Markets for
Observable
Unobservable
September 30,
Identical Assets
Inputs
Inputs
2009
(Level 1)
(Level 2)
(Level 3)
$
38,203
$
38,203
$
$
50,536
16,934
33,602
481
481
$
89,220
$
55,618
$
33,602
$
5.
Property,
Plant and Equipment
September 30,
2010
2009
$
43,455
$
43,260
69,278
68,327
50,499
49,271
10,817
10,951
22,758
22,329
1,201
2,238
198,008
196,376
(134,339
)
(121,583
)
$
63,669
$
74,793
50
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6.
Goodwill
and Intangible Assets
51
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52
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Year Ended
September 30,
2009
$
19,608
1,316
20,924
1,145
13,443
14,588
$
35,512
Critical
Systems
Global
Solutions
Solutions
Customer
Group
Group
Operations
Other
Total
$
353,253
$
151,184
$
151,238
$
7,421
$
663,096
353,253
151,184
151,238
7,421
663,096
$
353,253
$
151,184
$
151,238
$
7,421
$
663,096
$
(283,083
)
$
(146,368
)
$
(106,286
)
$
(7,421
)
$
(543,158
)
(22,032
)
(4,816
)
(44,952
)
(71,800
)
(305,115
)
(151,184
)
(151,238
)
(7,421
)
(614,958
)
$
(305,115
)
$
(151,184
)
$
(151,238
)
$
(7,421
)
$
(614,958
)
$
48,138
$
$
$
$
48,138
53
Table of Contents
September 30, 2010
September 30, 2009
Accumulated
Net Book
Accumulated
Net Book
Cost
Amortization
Value
Cost
Amortization
Value
$
7,808
$
6,886
$
922
$
6,915
$
6,812
$
103
43,502
37,108
6,394
43,502
35,280
8,222
3,779
3,379
400
3,779
3,060
719
18,860
15,453
3,407
18,860
13,823
5,037
$
73,949
$
62,826
$
11,123
$
73,056
$
58,975
$
14,081
3.7
3.5
1.6
0.9
0.8
0.6
7.
Investment
in Affiliates
54
Table of Contents
8.
Earnings
(Loss) Per Share
Year Ended September 30,
2010
2009
2008
$
58,982
$
(227,858
)
$
(235,946
)
63,777
62,911
64,542
397
64,174
62,911
64,542
$
0.92
$
(3.62
)
$
(3.66
)
$
0.92
$
(3.62
)
$
(3.66
)
9.
Income
Taxes
Year Ended September 30,
2010
2009
2008
$
(3,883
)
$
16
$
197
616
13
25
521
614
1,011
(2,746
)
643
1,233
$
(2,746
)
$
643
$
1,233
55
Table of Contents
Year Ended September 30,
2010
2009
2008
$
44,956
$
(213,687
)
$
(222,193
)
11,108
(13,230
)
(13,959
)
$
56,064
$
(226,917
)
$
(236,152
)
Year Ended September 30,
2010
2009
2008
$
19,622
$
(79,420
)
$
(82,653
)
699
(1,308
)
(766
)
(3,899
)
25,130
68,069
(1,650
)
(1,233
)
2,497
1,006
1,362
1,526
(18,423
)
55,211
13,697
(101
)
901
(1,137
)
$
(2,746
)
$
643
$
1,233
Year Ended September 30,
2010
2009
$
9,739
$
12,256
18,178
19,297
12,352
13,143
7,463
9,609
139,464
155,454
12,284
9,847
199,480
219,606
540
1,092
540
1,092
198,940
218,514
$
$
56
Table of Contents
Unrecognized
Interest and
Tax Benefit
Penalties
Total
$
13,119
$
1,354
$
14,473
216
607
823
291
13
304
(1,184
)
(226
)
(1,410
)
(205
)
(205
)
(994
)
(994
)
(1,228
)
(91
)
(1,319
)
243
243
10,463
1,452
11,915
43
483
526
228
5
233
(41
)
(41
)
(133
)
(169
)
(302
)
(223
)
(223
)
(426
)
(102
)
(528
)
(117
)
(117
)
9,794
1,669
11,463
3,287
506
3,793
468
468
57
Table of Contents
Unrecognized
Interest and
Tax Benefit
Penalties
Total
(40
)
(19
)
(59
)
(413
)
(413
)
(193
)
(4
)
(197
)
(87
)
(87
)
$
12,816
$
2,152
$
14,968
10.
Tender
Offer of the Companys Common Stock
11.
Postretirement
Benefits
Table of Contents
Year Ended
September 30,
2010
2009
$
14,390
$
9,409
100
100
775
702
1,380
6,515
(731
)
(2,336
)
$
15,914
$
14,390
Year Ended
September 30,
2010
2009
$
5,860
$
8,442
657
(246
)
(731
)
(2,336
)
4,204
$
9,990
$
5,860
September 30,
2010
2009
$
(5,924
)
$
(8,530
)
September 30,
2010
2009
$
458
$
617
5,466
7,913
59
Table of Contents
Year Ended September 30,
2010
2009
2008
$
100
$
100
$
146
775
702
731
(604
)
(709
)
(906
)
327
89
888
$
598
$
1,070
$
(29
)
September 30,
2010
2009
$
1,328
$
6,581
(327
)
(89
)
1,001
6,492
$
1,599
$
7,562
September 30,
2010
2009
$
15,914
$
14,390
15,914
14,390
9,990
5,860
Year Ended September 30,
2010
2009
2008
5.50
%
7.12
%
6.00
%
8.00
%
8.00
%
8.25
%
N/A
N/A
N/A
Year Ended September 30,
2010
2009
2008
4.75
%
5.50
%
7.12
%
N/A
N/A
N/A
60
Table of Contents
Percentage of
Target
Plan Assets at
Allocation at
September 30,
September 30,
2010
2011
27
%
30% - 50%
56
50% - 70%
17
0% - 10%
100
%
61
Table of Contents
As of September 30, 2010
Level 1
Level 2
Level 3
Total
$
491
$
491
1,561
1,561
3,539
3,539
1,596
1,596
85
85
356
356
623
623
1,739
1,739
$
9,011
$
979
$
$
9,990
$
621
607
622
767
687
4,143
62
Table of Contents
12.
Stockholders
Equity
13.
Stock
Plans
63
Table of Contents
2010
Weighted-
Average
Aggregate
Remaining
Weighted
Intrinsic
Contractual
Average
Value (In
Shares
Term
Price
Thousands)
1,189,897
$
17.54
(2,200
)
$
8.57
(423,076
)
$
15.05
764,621
1.0 year
$
18.94
$
5
764,506
1.0 year
$
18.94
$
5
744,621
1.0 year
$
19.10
$
5
5,604,327
64
Table of Contents
2010
Weighted
Average
Grant-Date
Shares
Fair Value
1,162,086
$
8.96
1,036,846
8.73
(845,022
)
8.13
(40,707
)
6.85
1,313,203
$
9.40
14.
Restructuring
Costs and Accruals
65
Table of Contents
Fiscal 2010 Activity
Balance
Balance
September 30,
September 30,
2009
Expense
Utilization
2010
$
6,289
$
1,584
$
(4,364
)
$
3,509
1,372
945
(2,317
)
$
7,661
$
2,529
$
(6,681
)
$
3,509
Fiscal 2009 Activity
Balance
Balance
September 30,
September 30,
2008
Expense
Utilization
2009
$
9,658
$
1,769
$
(5,138
)
$
6,289
3,005
11,037
(12,670
)
1,372
$
12,663
$
12,806
$
(17,808
)
$
7,661
66
Table of Contents
Fiscal 2008 Activity
Balance
Balance
September 30,
September 30,
2007
Expense
Utilization
2008
$
12,804
$
540
$
(3,686
)
$
9,658
2,907
6,747
(6,649
)
3,005
$
15,711
$
7,287
$
(10,335
)
$
12,663
15.
Segment
and Geographic Information
Table of Contents
Critical
Systems
Global
Solutions
Solutions
Customer
Group
Group
Operations
Total
$
242,236
$
286,588
$
3,350
$
532,174
60,798
60,798
$
242,236
$
286,588
$
64,148
$
592,972
$
94,339
$
57,969
$
13,987
$
166,295
$
33,311
$
21,951
$
(2,979
)
$
52,283
$
5,801
$
5,942
$
2,820
$
14,563
$
162,851
$
127,694
$
47,451
$
337,996
$
95,414
$
69,914
$
2,224
$
167,552
51,154
51,154
$
95,414
$
69,914
$
53,378
$
218,706
$
14,460
$
(3,171
)
$
3,639
$
14,928
$
(40,818
)
$
(38,879
)
$
(16,984
)
$
(96,681
)
$
4,912
$
6,256
$
4,474
$
15,642
$
138,930
$
70,537
$
56,007
$
265,474
$
252,571
$
197,149
$
6,702
$
456,422
69,944
69,944
$
252,571
$
197,149
$
76,646
$
526,366
$
85,379
$
32,573
$
8,876
$
126,828
$
17,380
$
(22,215
)
$
(10,914
)
$
(15,749
)
$
5,903
$
8,137
$
4,136
$
18,176
$
203,626
$
119,029
$
126,629
$
449,284
2010
2009
2008
$
166,295
$
14,928
$
126,828
(20,924
)
$
166,295
$
(5,996
)
$
126,828
68
Table of Contents
As of and for the Year Ended
September 30,
2010
2009
2008
$
52,283
$
(96,681
)
$
(15,749
)
778
6,592
3,819
1,969
4,637
7,044
71,800
197,883
35,512
5,687
2,529
12,806
7,287
$
47,007
$
(228,028
)
$
(237,469
)
$
337,996
$
265,474
$
449,284
180,228
147,728
205,582
120
8,772
$
518,224
$
413,322
$
663,638
Year Ended September 30,
2010
2009
2008
$
322,542
$
115,734
$
340,214
203,172
68,393
108,786
67,258
34,579
77,366
$
592,972
$
218,706
$
526,366
Year Ended September 30,
2010
2009
2008
$
60,263
$
71,363
$
76,306
3,076
3,084
4,835
330
346
463
$
63,669
$
74,793
$
81,604
16.
Significant
Customers
69
Table of Contents
17.
Other
Balance Sheet Information
September 30,
2010
2009
$
92,764
$
39,147
491
719
$
92,273
$
38,428
Balance at
Reversals of
Balance at
Beginning of
Bad Debt
Write-offs and
End of
Period
Provisions
Expense
Adjustments
Period
$
719
$
125
$
(192
)
$
(161
)
$
491
1,366
419
(1,066
)
719
1,469
720
(255
)
(568
)
1,366
September 30,
2010
2009
$
79,972
$
65,815
22,392
13,588
13,423
5,335
$
115,787
$
84,738
70
Table of Contents
$
10,986
10,344
(13,156
)
8,174
8,534
(11,010
)
5,698
17,948
(15,451
)
$
8,195
18.
Commitments
and Contingencies
Operating
Sublease
Leases
Income
$
10,884
$
1,442
4,860
4
4,702
4,090
2,489
598
$
27,623
$
1,446
71
Table of Contents
72
Table of Contents
Item 9.
Changes
In and Disagreements With Accountants on Financial Accounting
and Financial Disclosure
Item 9A.
Controls
and Procedures
pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and disposition
of our assets;
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that our receipts and expenditures are being made only in
accordance with authorization of our management and
directors; and
provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of our
assets that could have a material effect on the financial
statements.
73
Table of Contents
Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Item 11.
Executive
Compensation
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence
Item 14.
Principal
Accountant Fees and Services
Item 15.
Exhibits
and Financial Statement Schedules
74
Table of Contents
Exhibit
3
.01
Certificate of Incorporation of the Company (incorporated herein
by reference to Exhibit 3.1 of the Companys
registration statement on
Form S-4
(Reg.
No. 333-127945),
filed on August 30, 2005, as amended on September 26,
2005 (the Helix
S-4).
3
.02
Certificate of Designations of the Companys Series A
Junior Participating Preferred Stock (incorporated herein by
reference to Exhibit 3.03 of the Companys
registration statement on
Form S-3
(Registration
No. 333-
34487), filed on August 27, 1997).
3
.03
Certificate of Amendment of the Companys Certificate of
Incorporation (incorporated herein by reference to
Exhibit 3.3 of the Helix
S-4).
3
.04
Certificate of Amendment of the Companys Certificate of
Incorporation (incorporated herein by reference to
Exhibit 3.4 of the Helix
S-4).
3
.05
Certificate of Increase of Shares Designated as the
Companys Series A Junior Participating Preferred
Stock (incorporated herein by reference to Exhibit 3.5 of
the Helix
S-4).
3
.06
Certificate of Ownership and Merger of PRI Automation, Inc. into
the Company (incorporated herein by reference to
Exhibit 3.6 of the Helix
S-4).
3
.07
Certificate of Designations of Special Voting Preferred Stock of
the Company (incorporated herein by reference to
Exhibit 4.13 of the Companys registration statement
on
Form S-3
(Registration
No. 333-87194),
filed on April 29, 2002, as amended May 13, 2002).
3
.08
Certificate of Change of Registered Agent and Registered Office
of the Company (incorporated herein by reference to
Exhibit 3.8 of the Helix
S-4).
3
.09
Certificate of Amendment of Certificate of Incorporation of the
Company.
3
.10
Certificate of Amendment of Certificate of Incorporation of the
Company.
3
.11
Certificate of Elimination, Designation, Preference and Rights
of the Special Voting Preferred Stock of the Company.
3
.12
Certificate of Increase of Shares Designated as
Series A Junior Participating Preferred Stock.
3
.13
Amended and Restated Bylaws (incorporated herein by reference to
Exhibit 3.01 of the Companys current report on
Form 8-K,
filed on February 11, 2008).
4
.01
Specimen Certificate for shares of the Companys common
stock (incorporated herein by reference to the Companys
registration statement on
Form S-3
(Registration
No. 333-88320),
filed on May 15, 2002).
10
.01
Shareholders Agreement, dated as of June 30, 2006,
among Yaskawa Electric Corporation, Brooks Automation, Inc. and
Yaskawa Brooks Automation, Inc.
10
.02
U.S. Robot Supply Agreement, made as of June 30, 2006, by
and between Brooks Automation, Inc. and Yaskawa Electric
Corporation.
10
.03
Brooks Japan Robot Supply Agreement, made as of June 30,
2006, by and between Yaskawa Brooks Automation, Inc. and
Brooks Automation, Inc.
10
.04
Basic agreement between the Company and Ulvac Corporation dated
August 17, 1981 (incorporated by reference to
Exhibit 10.13 of the registration statement on
Form S-2
(Registration
No. 2-84880)
filed by Helix Technology Corporation)).
10
.05
Form of Indemnification Agreement for directors and officers of
the Company (incorporated herein by reference to the
Companys registration statement on
Form S-1
(Registration
No. 333-87296),
filed on December 13, 1994 (the Brooks
S-1))).
10
.06
Employment Agreement dated as of October 24, 2005, by and
between the Company and Thomas S. Grilk.
10
.07
Employment Agreement dated as of September 30, 2007, by and
between the Company and Robert Lepofsky (incorporated herein by
reference to Exhibit 10.14 to the Companys annual
report on
Form 10-K
for the fiscal year ended September 30, 2007, filed on
November 29, 2007 (the 2007
10-K)).
10
.08
Amendment to Employment Agreement dated as of January 1,
2009, by and between the Company and Robert Lepofsky
(incorporated herein by reference to Exhibit 10.01 to the
Companys quarterly report on
Form 10-Q
for the fiscal quarter ended March 31, 2009, filed on
May 7, 2009).
75
Table of Contents
Exhibit
10
.09
Employment Agreement, effective as of January 28, 2008, by
and between Brooks Automation, Inc. and Martin S. Headley
(incorporated herein by reference to Exhibit 10.1 to the
Companys current report on
Form 8-K
filed on January 31, 2008).
10
.10
Employment Agreement, effective as of October 26, 2005, by
and between Brooks Automation, Inc. and Steven A. Michaud
(incorporated herein by reference to Exhibit 10.09 to the
Companys annual report on
Form 10-K
for the fiscal year ended September 30, 2008, filed on
November 26, 2008 (the 2008
10-K)).
10
.11
1993 Nonemployee Director Stock Option Plan (incorporated herein
by reference to Exhibit 99.1 to the Companys
registration statement on
Form S-8
(Registration
No. 333-22717),
filed on March 4, 1997).
10
.12
1992 Combination Stock Option Plan (incorporated herein by
reference to Exhibit 99.2 to the Companys
registration statement on
Form S-8
(Registration
No. 333-07313),
filed on July 1, 1996).
10
.13
1995 Employee Stock Purchase Plan, as amended.
10
.14
Amended and Restated 2000 Equity Incentive Plan, restated as of
December 29, 2008 (incorporated herein by reference to
Exhibit 10.01 of the Companys quarterly report on
Form 10-Q
for the fiscal quarter ended December 31, 2008, filed on
February 9, 2009).
10
.15
Helix Technology Corporation 1996 Equity Incentive Plan
(incorporated herein by reference to Exhibit 4.1 of the
Companys registration statement on
Form S-8
(Registration
No. 333-129724),
filed on November 16, 2005).
10
.16
Helix Technology Corporation Amended and Restated Stock Option
Plan for Non-Employee Directors (incorporated herein by
reference to Exhibit 4.2 of the Companys registration
statement on
Form S-8
(Registration
No. 333-129724),
filed on November 16, 2005).
10
.17
Helix Technology Corporation 1981 Employee Stock Option Plan
(incorporated herein by reference to Exhibit 4.3. of the
Companys registration statement on
Form S-8
(Registration
No. 333-129724),
filed on November 16, 2005).
10
.18
Form of 2000 Equity Incentive Plan New Employee Nonqualified
Stock Option Agreement.
10
.19
Form of 2000 Equity Incentive Plan Existing Employee
Nonqualified Stock Option Agreement.
10
.20
Form of 2000 Equity Incentive Plan Director Stock Option
Agreement.
10
.21
Form of Restricted Stock Agreement.
10
.22
Restricted Stock Agreement, dated as of April 25, 2008, by
and between the Company and Robert J. Lepofsky (incorporated
herein by reference to Exhibit 10.03 to the Companys
quarterly report on
Form 10-Q
for the fiscal quarter ended June 30, 2008, filed on
August 7, 2008 (the 2008 Q3
10-Q)).
10
.23
Restricted Stock Agreement, dated as of April 25, 2008, by
and between the Company and Robert J. Lepofsky
(incorporated herein by reference to Exhibit 10.04 to the
2008 Q3
10-Q).
10
.24
Restricted Stock Agreement, dated as of April 25, 2008, by
and between the Company and Robert J. Lepofsky
(incorporated herein by reference to Exhibit 10.05 to the
2008 Q3
10-Q).
10
.25
Brooks Automation, Inc. Deferred Compensation Plan, as amended.
10
.26
Amendment
No. 2008-01
to the Brooks Automation, Inc. Deferred Compensation Plan
(incorporated herein by reference to Exhibit 10.01 to the
2008 Q3
10-Q).
10
.27
Amendment No. 2 to the Helix Technology Corporation
Employees Pension Plan effective as of May 20, 2009
(incorporated herein by reference to Exhibit 10.27 to the
2009
10-K).
10
.28
Lease between the Company and BerCar II, LLC for 12 Elizabeth
Drive, Chelmsford, Massachusetts dated October 23, 2002
(incorporated herein by reference to Exhibit 10.28 to the
Companys 2008
10-K).
10
.29
First Amendment to Lease between the Company and BerCar II, LLC
for 12 Elizabeth Drive, Chelmsford, Massachusetts dated
November 1, 2002 (incorporated herein by reference to
Exhibit 10.29 to the Companys 2008
10-K).
10
.30
Lease Agreement dated as of May 5, 1994 between the Company
and The Prudential Insurance Company of America for 805
Middlesex Turnpike, Billerica, MA (incorporated herein by
reference to the
Brooks S-1).
Table of Contents
Exhibit
10
.31
Amendment to Lease dated as of July 24, 2000 between the
Company and BCIA New England Holdings LLC (successor in interest
to The Prudential Insurance Company of America) for 805
Middlesex Turnpike, Billerica, MA.
10
.32
Lease Agreement dated as of October 12, 2000 between the
Company and Progress Road LLC for 17 Progress Road,
Billerica, MA.
10
.33
First Amendment to Lease dated as of March 21, 2001 between
the Company and Progress Road LLC for 17 Progress Road,
Billerica, MA.
10
.34
Lease, dated May 14, 1999, between MUM IV, LLC as Lessor
and the Company as Lessee.
10
.35
Multi-Tenant Industrial Triple Net Lease, effective
December 15, 2000, between Catellus Development Corporation
and Synetics Solutions, Inc., including amendments thereto.
10
.36
Factory Lease Advanced Agreement among Sang Chul Park, Young Ja
Kim, Joon Ho Park, Brooks Automation Asia, Ltd. and Brooks
Automation Korea, Inc.
10
.37
Lease dated September 6, 2001 between The Harry Friedman
and Edith B. Friedman Revocable Living Trust Dated
May 15, 1986 et al as Lessor and the Company
(IGC Polycold Systems Inc.) as Lessee.
10
.38
Lease dated August 8, 2008 between the Company and
Koll/Intereal Bay Area for 4051 Burton Drive, Santa Clara,
CA (incorporated herein by reference to Exhibit 10.38 to
the Companys 2008
10-K).
10
.39
Lease effective September 1, 2005 between Keystone
Technology Ltd (HK) and Wuxi New District for
J3-4
Wuxi
Export Processing Zone, Wuxi, China (incorporated herein by
reference to Exhibit 10.39 to the 2009
10-K).
10
.40
Lease effective September 30, 2010 between the Company and
Catellus Operating Limited Partnership for Southshore Corporate
Park Building A,
18550-18870
NE Riverside Pkwy, Gresham, OR.
10
.41
Employment Agreement, effective as of April 5, 2010, by and
between Brooks Automation, Inc. and Stephen S. Schwartz
(incorporated herein by reference to Exhibit 10.01 to the
Companys quarterly report on
Form 10-Q
for the fiscal quarter ended March 31, 2010, filed on
May 6, 2010).
10
.42
Non-Employee Directors Stock Grant/Restricted Stock Unit
Election Form.
21
.01
Subsidiaries of the Company.
23
.01
Consent of PricewaterhouseCoopers LLP (Independent registered
public accounting firm for the Company).
31
.01
Rule 13a-14(a),15d-14(a)
Certification.
31
.02
Rule 13a-14(a),15d-14(a)
Certification.
32
Section 1350 Certifications.
Table of Contents
By:
Director and Chief Executive Officer (Principal Executive
Officer)
November 23, 2010
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
November 23, 2010
Vice President and
Corporate Controller
(Principal Accounting Officer)
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
Director
November 23, 2010
78
EXHIBIT 3.09
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 10:30 AM 02/27/2003
030128713 - 2448446
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BROOKS-PRI AUTOMATION, INC.
*****
Brooks-PRI Automation, Inc., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), pursuant to Section 242 of the provisions of the General Corporation Law of the State of Delaware, hereby certifies as follows:
FIRST: That at a meeting of the Board of Directors of the Corporation resolutions were duly adopted setting forth a proposed amendment to die Certificate of Incorporation of the Corporation, declaring said amendment to be advisable and calling a meeting of the Stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendment is as follows:
"FURTHER
VOTED: That it is in the best interests of the Company that its name be changed back to Brooks Automation, Inc., and that in order to accomplish that objective, the Board of Directors recommend to stockholders an amendment to the certificate of incorporation whereby Article First be deleted in its entirety and replaced by a new Article FIRST to read as follows: 'FIRST: The name of the corporation (hereinafter called the "Corporation") is Brooks Automation, Inc.'" |
SECOND: That thereafter, pursuant to a resolution of the Corporation's Board of Directors, an annual meeting of the Stockholders of the Corporation was duly called and held upon notice duly provided in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting the necessary number of shares as required by statute was voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, said Brooks-PRI Automation, Inc. has caused this certificate to be signed by David H. Murphree, an Assistant Secretary, this 26th day of February, 2003.
BROOKS-PRI AUTOMATION, INC.
By: /s/ David H. Murphree ------------------------------ David H. Murphree Assistant Secretary |
BROOKS AUTOMATION, INC. | |||||
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|
By: | /s/ Thomas S. Grilk | |||
|
|||||
|
Name: | Thomas S. Grilk | |||
|
Title: | Senior Vice President and General Counsel |
RESOLVED
:
|
That no shares of Special Voting Preferred Stock, par value $0.01 per share (the Special Voting Preferred Stock) are outstanding and that none will be issued subject to the certificate of designations previously filed with the Secretary of State of the State of Delaware with respect to such stock. | |
|
||
RESOLVED
:
|
That the one (1) authorized and unissued share of Special Voting Preferred Stock be and hereby is returned to the status of authorized, unissued and undesignated Preferred Stock. | |
|
||
RESOLVED:
|
That the Chief Executive Officer, Chief Financial Officer and General Counsel be, and each acting singly hereby is, authorized to file with the Secretary of State of the State of Delaware a certificate pursuant to Sections 103 and 151 of the Delaware General Corporation Law to effect the foregoing resolutions. |
BROOKS AUTOMATION, INC. | |||||||
|
|||||||
By: | /s/ Thomas S. Grilk | ||||||
|
Name: | Thomas S. Grilk | |||||
|
Title: | Senior Vice President and General Counsel |
BROOKS AUTOMATION, INC. | |||||
|
|||||
|
By: | /s/ Thomas S. Grilk | |||
|
|||||
|
Name: | Thomas S. Grilk | |||
|
Title: | Senior Vice President, General | |||
|
Counsel and Secretary |
EX-10.01
Execution Copy
SHAREHOLDERS' AGREEMENT
AMONG
YASKAWA ELECTRIC CORPORATION
a corporation organized and existing under the laws of Japan
and having its registered head office in Kitakyushu shi,
hereinafter referred to as "YASKAWA"
BROOKS AUTOMATION, INC.
a corporation organized and existing under the laws of the State of Delaware, U.S.A.
hereinafter referred to as "BROOKS"
AND
YASKAWA BROOKS AUTOMATION, INC.
THIS SHAREHOLDERS' AGREEMENT (this "AGREEMENT") dated as of June 30, 2006 (the "EFFECTIVE DATE") among YASKAWA ELECTRIC CORPORATION, a corporation organized and existing under the laws of Japan ("YASKAWA"), BROOKS AUTOMATION, INC., a corporation organized and existing under the laws of the State of Delaware, U.S.A. ("BROOKS") and YASKAWA BROOKS AUTOMATION, INC., a corporation organized and existing under the laws of Japan (the "CORPORATION"). Brooks and Yaskawa are sometimes are referred to herein collectively as "SHAREHOLDERS" or individually as a "SHAREHOLDER."
WHEREAS, the Shareholders have established the Corporation as a joint venture for the purpose of marketing, selling, distributing and servicing the JV Products (as defined below) to Japanese Semiconductor Customers (as defined below);
WHEREAS, concurrently with the execution of this Agreement (i) Yaskawa and the Corporation are entering into the Yaskawa Japan Robot Supply Agreement, dated the date hereof and (ii) Brooks and the Corporation are entering into the Brooks Japan Robot Supply Agreement, dated the date hereof (collectively, the "SUPPLY AGREEMENTS");
NOW, THEREFORE, in consideration of the mutual covenants and premises set forth below, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1: CAPITALIZATION.
1.1 Initial Capital. The Shareholders agree that, in order to effectuate its business objectives, the Corporation shall require total equity capital of JY450,000,000. It is further understood and agreed that the Shareholders' respective shares of common stock of the Corporation to be purchased on the Operations Commencement Date (which excludes the shares of common stock that were purchased by the Shareholders in connection with the establishment of the Corporation) shall be:
Name Ratio Number of Shares Share Price ---- ----- ---------------- ----------- Yaskawa 50% 225 JY225,000,000 Brooks 50% 225 JY225,000,000 |
The "OPERATIONS COMMENCEMENT DATE" shall be September 21, 2006, which date may be changed by the mutual agreement of the Shareholders.
1.2 Additional Capital Requirements. In the event that the Corporation shall require additional funds for its operations and activities that the parties decide shall not be covered by the subscribed and paid-up capital, such additional funds shall be secured by the Corporation by such means (including procuring loans from independent sources and/or issuing bonds, debentures or other debt securities) as the Shareholders may mutually agree in writing.
1.3 Antidilution. Yaskawa and Brooks, as the original parties to this Agreement, acknowledge and understand that the initial capitalization of the Corporation calculated on a fully-diluted
basis, as of the date hereof and as of the Operations Commencement Date, shall be as follows: Yaskawa and Brooks each holds or will hold, as applicable, 50% of the outstanding capital stock of the Corporation. The Corporation shall not issue any additional capital stock or take any other action affecting the capitalization of the Corporation unless (i) appropriate measures are taken to preserve the above described percentages or (ii) each of the Shareholders consents in writing to such issuance or action.
ARTICLE 2: GOVERNANCE; ORGANIZATIONAL STRUCTURE.
2.1 Independence of the Corporation. The Shareholders agree that it is a fundamental principle that the Corporation be managed and operated as a company independent of the Shareholders. The Shareholders may provide guidance and advice to the Corporation, provided that, at all times, the Corporation shall, through its board of directors, have the complete discretion, subject to the provisions of this Agreement, of the Articles of Incorporation of the Corporation and of applicable Japanese law, to take its own decisions in the best interests of the Corporation.
2.2 Shareholders Meetings. The Shareholders shall have the right to vote on such activities and in the manner as set forth in the Articles of Incorporation of the Corporation and in accordance with applicable law. Each of Yaskawa and Brooks shall vote its shares in the Corporation so that the directors and corporate auditors of the Corporation are, at all times (subject only to such reasonable periods as are necessary for the filling of vacancies), the individuals specified in Section 2.4.1 and Section 4.5, respectively.
2.3 Steering Committee.
2.3.1 A steering committee of six members shall be formed that will be composed of the President and Executive Vice President of the Corporation and four additional members. Yaskawa shall have the right to appoint and have removed two of such additional members, and Brooks shall have the right to appoint and have removed the other two additional members.
2.3.2 The steering committee shall have the broadest powers to supervise the business and operations of the Corporation, except for those matters that are explicitly reserved for the shareholders of the Corporation or the directors of the Corporation or as may be otherwise required by applicable law.
2.3.3 Each of the Shareholders will appoint to serve on the steering committee individuals who have responsibility over the related business of the Corporation in such Shareholder's organization.
2.3.4 The steering committee may establish advisory committees for specific purposes and each such advisory committee shall consist of an equal number of members to be appointed by each of the Shareholders.
2.3.5 To the extent permitted by applicable law, certain of the actions of the board of directors, set forth in this Agreement and Exhibit I, shall be submitted for consideration to the steering committee and no action may be taken on such matters without its approval.
2.3.6 Further rules and procedures for the steering committee shall be as set forth on Exhibit I (the "STEERING COMMITTEE RULES").
2.4 Board of Directors.
2.4.1 The board of directors of the Corporation shall consist of four members, the President, the Executive Vice President, and two additional members, one of whom shall be nominated and may be removed by Yaskawa, and the remaining one of whom shall be nominated and may be removed by Brooks.
2.4.2 As indicated in Section 2.3.5 and the Steering Committee Rules, to the extent permitted by applicable law, certain actions of the board of directors shall require prior approval of the steering committee.
2.4.3 If unanimity on a decision to be taken by the board of directors cannot be reached, the matter shall be referred to the steering committee, and each of the Shareholders shall cause the directors nominated by the respective Shareholder to vote for such matter as determined by the steering committee in accordance with this Section.
2.4.4 Annually, the board shall, to the extent permitted by applicable law, submit a proposal for the Budget (as defined below) for the following fiscal year for approval by the steering committee as set forth in Section 6.1. For actions within the scope of the approved Budget, the board of directors shall not require additional approval of the steering committee, except as otherwise stated in the rules of procedure for the steering committee or as provided in this Agreement (subject to applicable law).
2.4.5 Further rules and procedures for the board of directors shall be as set forth on Exhibit II.
2.5 Management.
2.5.1 The top executives and representative directors of the Corporation shall be the President and the Executive Vice President. Other management employees shall be as determined by the board of directors. Yaskawa shall have the right to nominate and have removed the President, and Brooks shall have the right to nominate and have removed the Executive Vice President. The Shareholders shall cause their respective appointees or nominees (as applicable) on the steering committee and the board of directors to cause (i) the appointment (and, at the direction of Yaskawa, removal and replacement) of Yaskawa's nominee as the President and (ii) the appointment (and, at the direction of Brooks, removal and replacement) of Brooks' nominee as the Executive Vice President. Other executive managing directors and managing directors of the Corporation shall be elected by the board of directors as provided in the Articles of Incorporation of the Corporation.
2.5.2 The President and the Executive Vice President shall jointly manage and direct the business of the Corporation. The President and the Executive Vice President shall cooperate closely. The President shall be in charge of the overall business of the Corporation and shall supervise the actions of the other management employees of the Corporation (other than the Executive Vice President). The
authority of the President and the Executive Vice President shall be as established by the board of directors and, to the extent permitted by applicable law, the steering committee. The President and Executive Vice President shall jointly prepare all documents to be submitted to the steering committee and the general meeting of shareholders as well as the reports to be submitted to the shareholders.
2.6 Organizational Structure. The Corporation shall have the organizational structure set forth in the Business Plan attached hereto as Exhibit VI (the "ORGANIZATIONAL CHART"), as such structure may be amended from time to time by the President and the Executive Vice President acting jointly with the approval of the board of directors and, if permitted by applicable law, consent of the steering committee.
ARTICLE 3: TRANSFER OF COMMON STOCK.
3.1 Transfers by Shareholders Prohibited Without Consent. Unless otherwise expressly permitted by Section 3.2, no Shareholder, nor any successor and assign thereof, may directly or (subject to the last sentence of this Section 3.1) indirectly sell, assign, pledge, encumber, hypothecate or otherwise transfer ("TRANSFER") any interest in any of such Shareholder's common stock in the Corporation or permit any such interest to be subject to Transfer, directly or indirectly, by operation of law or agreement, without obtaining the prior written consent of the other Shareholder and their successors and assigns. Notwithstanding the receipt of prior written consent, any such permitted or approved Transfer shall be null and void and the Corporation shall, to the extent permitted by applicable law, refuse to recognize such Transfer: (i) if such Transfer would be made in a transaction which would violate any applicable securities laws, rules or regulations; and (ii) unless the transferee shall execute and deliver to each party hereto an agreement acknowledging that all shares of or interest in any common stock in Corporation so transferred are and shall remain subject to this Agreement, and agreeing to be personally bound hereby. Any purported Transfer in any other manner shall be null and void, and shall, to the extent permitted by applicable law, not be recognized or given effect by the parties hereto. Notwithstanding anything to the contrary in this Agreement, for the avoidance of doubt, a Change of Control of a Shareholder shall not constitute a Transfer for the purposes of this Section 3.1.
3.2 Transfers by Shareholders to Permitted Transferees.
3.2.1 Each Shareholder may at any time, after prior written notice to the other Shareholder, Transfer any or all of such Shareholder's shares of or interests in common stock in the Corporation to (i) a wholly-owned direct or indirect subsidiary of such Shareholder (a "PERMITTED TRANSFEREE") or (ii) in connection with the sale by a Shareholder of all or substantially all of such Shareholder's assets. A Permitted Transferee may Transfer shares of or any interest in any common stock (i) to the Shareholder from which it received such shares or interest or (ii) to another Permitted Transferee of such Shareholder.
3.2.2 Notwithstanding Section 3.2.1, any such Transfer shall be null and void and Corporation shall, to the extent permitted by applicable law, refuse to recognize such Transfer: (i) if such Transfer would be made in a transaction that would violate any applicable securities laws, rules or regulations; and (ii) unless the transferee executes and delivers to each party hereto an agreement
acknowledging that all shares of or interests in any common stock in Corporation so transferred are and shall remain subject to this Agreement and agreeing to be personally bound hereby. A Permitted Transferee under Section 3.2.1 must also agree, as a condition precedent to any Transfer under Section 3.2.1, to: (I) become a party to this Agreement in addition to and not as a substitute for the transferor and (II) appoint the original Shareholder of the shares or interest it is receiving as such transferee's proxy in voting all such transferred shares or interests and in any subsequent shares that may be issued by the Corporation to such Permitted Transferee, and in exercising its rights under Article 2 regarding the nomination, election and replacement of directors, the members of the steering committee, the corporate auditors, and the President or the Executive Vice President (as applicable), for so long as this Agreement remains in effect. Such proxy shall be irrevocable. No transfer by a Shareholder or any of its Permitted Transferees under Section 3.2.1 shall release such original Shareholder from any obligations or liabilities under this Agreement.
3.2.3 Any Shareholder or Permitted Transferee intending to Transfer
any shares of or interests in common stock in the Corporation pursuant to this
Section 3.2 shall notify the Shareholders of any intended Transfer 10 days prior
to such Transfer, giving the name and address of the intended Permitted
Transferee and the Permitted Transferee's status as set forth in Section 3.2.1
hereof; provided, however, that no otherwise valid Transfer shall be rendered
invalid solely as a result of a failure to give notice hereunder. The
Shareholders shall use their respective commercially reasonable efforts
(including, without limitation, causing their respective nominees then serving
on the board of directors to take all necessary actions) to cause the
Corporation to effect any Transfer to a Permitted Transferee made (or to be
made) in accordance with this Agreement.
ARTICLE 4: BOOKS AND RECORDS, FISCAL YEAR, AUDITS.
4.1 Full and accurate books of account, financial records and annual financial statements shall be made according to Japanese and internationally accepted accounting principles, specifically US GAAP, showing the true condition of the business and finances of the Corporation and the share ownership of each Shareholder. They shall be kept at the principal office of the Corporation. Each Shareholder, or its designated representatives, shall have access to and may inspect and copy any part thereof.
4.2 The Corporation shall forward internal monthly financial reports to each Shareholder. Additionally, the Corporation shall forward quarterly financial reports to each Shareholder, which reports shall be presented in such format and shall contain such information, and which reports shall be reviewed in accordance with accounting standards required of similar corporations in Japan by a reputable international firm of certified public accountants appointed by the steering committee (the "CORPORATION'S ACCOUNTANTS") to such extent, as either Shareholder shall reasonably request based on such Shareholder's reporting requirements. In addition, the Corporation shall prepare or cause to be prepared, in a manner reasonably calculated to allow Brooks to comply with its US financial reporting requirements (including earnings announcements), and furnished to each of the Shareholders (i) not later than 45 days after the end of each of the Corporation's fiscal quarters (other than the last quarter of the Corporation's fiscal year), quarterly financial statements of the Corporation and its subsidiaries (if any) on a consolidated basis, in customary form, prepared in accordance with US GAAP and reviewed by the Corporation's
Accountants, and (ii) not later than 45 days after the end of each fiscal year of the Corporation, annual financial statements of the Corporation and its subsidiaries (if any) on a consolidated basis, in customary form, prepared in accordance with US GAAP and audited by the Corporation's Accountants.
4.3 The initial fiscal year of the Corporation shall begin on the day of the calendar year that the Corporation was incorporated and shall end on March 20, 2007, and each succeeding fiscal year shall start with March 21 and end on March 20 of the following year. At the end of each fiscal year, an audit of the Corporation's financial statements, at the Corporation's expense, shall be performed by the Corporation's Accountants if required by Japanese law. In addition, if Brooks reasonably so requests, the Corporation shall cause an audit of the Corporation's financial statements to be performed by the Corporation's Accountants on an annual basis as of the end of Brooks' fiscal year, and such audit shall be performed, and the Corporation's audited financial statements resulting therefrom shall be furnished to the Shareholders, in such manner and at such time as to allow the inclusion of the Corporation's annual audited financial statements as of the end of Brooks' fiscal year in the annual audited financial statements of Brooks prepared for the purpose of compliance with Brooks' US financial reporting requirements.
4.4 Each of the Shareholders shall be entitled to have the books and accounts of the Corporation examined by their own audit division or by external auditors during office hours. The Shareholder who intends to perform such an audit shall inform the Corporation and the other Shareholder thereof with a 14 days' advance notice. The staff of the Corporation shall render all assistance if such examination takes place. The cost of the additional audit shall be borne by the Shareholder requesting the audit.
4.5 The Corporation shall have the corporate auditor(s) (Kansayaku) prescribed by law, provided that the Corporation shall have at least two such auditors. Yaskawa may nominate a full time auditor, Brooks shall be entitled to nominate an auditor, and the Corporation shall be entitled to nominate the third auditor, if required. The Shareholders shall approve appointments of these nominees as corporate directors at a shareholders meeting of the Corporation.
4.6 The Corporation shall bear and pay for the first US$50,000 per fiscal
year of the Corporation of incremental fees and disbursements of the
Corporation's Accountants payable by the Corporation in connection with the
financial reporting and auditing relating to such fiscal year and described in
the last sentence of Section 4.2 and the last sentence of Section 4.3 and any
other costs relating to reporting and auditing in accordance with US GAAP, as
compared with the fees and disbursements of the Corporation's Accountants
payable by the Corporation in connection with the financial reporting and
reviews relating to such fiscal year and described elsewhere in Section 4.2 and
Section 4.3. Brooks shall reimburse the Corporation for any excess of such
incremental fees and disbursements of the Corporation's Accountants (to the
extent the same are reasonable and documented) over US$50,000 per fiscal year of
the Corporation; provided that the Corporation shall allow Brooks, if Brooks
desires to do so, to discuss such incremental third party costs subject to
reimbursement by Brooks hereunder with the Corporation's Accountants prior to
the incurrence of the same by the Corporation.
ARTICLE 5: STOCK CERTIFICATES.
5.1 A copy of this Agreement shall be kept with the records of the Corporation. With regard to shares of stock of the Corporation, the Corporation shall initially not issue share certificates.
5.2 To the extent that share certificates are subsequently issued and exist, each of the Shareholders hereby agrees that each outstanding certificate representing shares of common stock of the Corporation shall bear an endorsement indicating that the securities represented by such certificate are subject to the provisions of a Shareholders' Agreement, dated as of __________, 2006, by and among the Corporation and its Shareholders and may not be sold, pledged, hypothecated, encumbered, disposed of or otherwise transferred except in accordance therewith.
ARTICLE 6: BUDGET; PROFIT-SHARING.
6.1 Budget
6.1.1 For each of the Corporation's fiscal years (or portions thereof), for so long as the Corporation continues in existence hereunder, the Corporation shall adopt an annual operating budget (the "BUDGET") in accordance with the provisions of this Section 6.1. The Business Plan for the initial fiscal year is attached hereto as Exhibit VI and the financial information contained in the Business Plan shall constitute the Budget for the fiscal year ending March 20, 2007.
6.1.2 The Shareholders desire that each Budget be approved (subject to applicable law) by the steering committee before the beginning of the fiscal year covered by the relevant Budget (the "BUDGET FINALIZATION DATE"). Accordingly, prior to the commencement of the second and each subsequent fiscal year of the Corporation, the board of directors shall submit guidelines for a proposed Budget for the next fiscal year to the steering committee. The guidelines for each proposed Budget shall include and set forth:
(i) a proposed detailed operating budget and capital budget for the next fiscal year of the Corporation (broken down by quarter), including line items and schedules for each significant aspect of the activities of the Corporation, projected income and cash flows, expenditures and expenses of the Corporation and all other direct costs of the Corporation, as well as a reserve for contingencies, and a projected balance sheet;
(ii) projections as to any and all cash requirements and/or financing needs for the next fiscal year of the Corporation; and
(iii) such supporting documents as may reasonably be requested by any member of the steering committee for purposes of verifying the accuracy, appropriateness and reasonableness of the particular Budget submitted, all in such detail as any member of the steering committee may reasonably request.
6.1.3 Prior to the meeting of the steering committee, each member of the steering committee shall have the right to propose, by notice delivered to the steering committee, revisions to the
proposed guidelines desired by such member. A meeting of the steering committee shall be called for the purpose of considering the guidelines and (subject to applicable law) adopting the relevant Budget, not later than the Budget Finalization Date for such Budget. At such meeting, the steering committee shall consider (i) whether to adopt the initially submitted guidelines as the relevant Budget, or (ii) whether to adopt the relevant Budget as modified by one or more such proposed revisions. If the steering committee does not approve a Budget for a fiscal year, the Budget for the preceding fiscal year shall continue in effect until the steering committee adopts a new Budget at a meeting of the steering committee.
6.2 Vacuum Business Economics. Promptly after the Effective Date, the members of the steering committee shall consider and make reasonable efforts to reach agreement on an allocation of the profits from sales of Brooks' Automation Products to Japanese Semiconductor Customers.
6.3 Employee. Brooks agrees to make available to the Corporation the services of one engineer of Brooks, who shall be reasonably acceptable to the Corporation, for the period from the Operations Commencement Date through February 28, 2007, to provide services and support, to the extent that the management of the Corporation determines that the services of such engineer are required.
ARTICLE 7: CONFIDENTIALITY; INTELLECTUAL PROPERTY.
7.1 Confidential Information. During the term of this Agreement, the
Shareholders may exchange certain of their respective Confidential Information
with one another and with the Corporation and may receive Confidential
Information of the Corporation or the other Shareholder from the Corporation.
"CONFIDENTIAL INFORMATION" shall mean all data and information owned by or in
possession of either of the Shareholders or the Corporation, that is not
generally known to the public, whether of a technical, business or other nature
(including, without limitation, inventions, trade secrets, know-how and
information relating to the customers, business plans, promotional and market
activities, finances and other business affairs of such party) that is disclosed
by a party (the "DISCLOSING PARTY"), to another party (the "RECEIVING PARTY") in
furtherance of this Agreement and the purposes of the Corporation. Confidential
Information shall not include information that (i) was in the public domain, in
its entirety in a unified form, at the time of disclosure to the Receiving
Party; (ii) was known by the Receiving Party prior to its disclosure by the
Disclosing Party; (iii) becomes part of the public domain after the date of
disclosure by the Disclosing Party through no fault of the Receiving Party; or
(iv) is disclosed by a third party to the Receiving Party after the date of
disclosure by the Disclosing Party, where the third party did not require the
Receiving Party to hold such information in confidence and did not acquire such
information directly or indirectly from the Disclosing Party.
7.2 Non-Disclosure and Non-Use. The Receiving Party agrees to treat as secret and hold in strict confidence all Confidential Information it receives from the Disclosing Party in connection with their cooperation or otherwise in connection with the Corporation or its business, activities or affairs. The Receiving Party agrees that it will not disclose any Confidential Information to any other Person without the prior written permission of the Disclosing Party (or as otherwise specifically provided in this Agreement). The Receiving Party also agrees that it will only use the Confidential Information received in connection with this Agreement and the business of the Corporation and (if the Receiving Party is a Shareholder) in connection with monitoring and evaluating the Receiving Party's investment in, and
business relationship with, the Corporation and the exercise of the Receiving Party's rights and performance of the Receiving Party's obligations under this Agreement, the Articles of Incorporation of the Corporation, the Supply Agreements and other instruments, agreements and arrangements that are or may be entered into by the parties in connection with the Corporation and its business. The Receiving Party agrees that only (i) its employees with a bona fide need to know, and who have signed an appropriate confidentiality agreement, (ii) its attorneys, accountants and other professional advisors subject to obligations of confidentiality, (iii) its officers and directors and (iv) any potential acquirer, investor or lender in connection with any potential sale of all or substantially all of the assets or equity securities of the Receiving Party or any potential merger or consolidation in which the Receiving Party, is a constituent party, or a potential investment in or loan to the Receiving Party as applicable (including any investment or commercial bankers, legal counsel, and any other advisors in connection with the performance of customary due diligence by such potential acquirer, investor or lender), in each case subject to obligations of confidentiality, shall be provided access to the Confidential Information of the Disclosing Party; provided that Confidential Information may not be provided pursuant to clause (iv) to any change of control entity of the Disclosing Party as indicated in Schedule C. In the event the Receiving Party is required by court order, by the rules of any exchange or market on which the Receiving Party's securities are traded, or by law or legal process, to disclose Confidential Information of the Disclosing Party, the Receiving Party shall, to the extent lawful, inform the Disclosing Party in writing prior to making such disclosure to provide sufficient time to request a protective order or other appropriate measure, and the Receiving Party will disclose only such information that is legally required and will use its commercially reasonable efforts to obtain confidential treatment for any Confidential Information that is so disclosed. The obligations imposed by this Section 7.2 shall survive the termination of this Agreement.
7.3 Ownership of Intellectual Property.
7.3.1 Existing Intellectual Property. All rights to Confidential Information, trade secrets, know-how, inventions, patents, patent applications, copyrights, trademarks and trade names ("INTELLECTUAL PROPERTY") owned or licensed by a Shareholder (the "SHAREHOLDER INTELLECTUAL PROPERTY") shall be fully retained by that Shareholder, and no rights or licenses are provided under this Agreement to the other Shareholder or the Corporation.
7.3.2 New Intellectual Property. In the event the Corporation develops any Intellectual Property that is an improvement to, modification of or otherwise based on the Shareholder Intellectual Property of only one Shareholder, the new Intellectual Property shall be owned by that Shareholder with a non-exclusive, fully-paid, non-transferable license being granted to the Corporation (but not to the other Shareholder) for use of that new Intellectual Property in connection with the development, manufacture, use, sale, or other distribution of all current and future products of the Corporation during the term of this Agreement. In the event that the Corporation develops any Intellectual Property that is not an improvement to, modification of or otherwise based on the Shareholder Intellectual Property of a Shareholder or is an improvement to, modification of or is otherwise based on the Shareholder Intellectual Property of both Shareholders, the new Intellectual Property shall be owned by the Corporation with a non-exclusive, fully-paid, non-transferable (except in connection with a permitted assignment of this Agreement), perpetual license to develop, make, have made, import, sell, offer to sell any products being
granted to each Shareholder, with no license to either Shareholder of any of the Shareholder Intellectual Property of the other Shareholder.
ARTICLE 8: SUPPLY AND DISTRIBUTION OF JV PRODUCTS
8.1 After the Operations Commencement Date and during the term of this Agreement, neither Yaskawa or its Affiliates or Permitted Transferees nor Brooks or its Affiliates or Permitted Transferees shall market, offer and/or sell, directly or indirectly, any JV Products, or replacements therefor, to a Japanese Semiconductor Customer, or license, finance or otherwise assist any other Entity to market or sell, directly or indirectly, the JV Products to a Japanese Semiconductor Customer, in each case except through the Corporation; provided, however, that, notwithstanding anything to the contrary herein, Yaskawa is permitted to manufacture, market and sell the JV Products listed on Schedule B to the Japanese Semiconductor Customers listed on Schedule B until such time as the marketing and sale of such JV Products may be transferred by Yaskawa to the Corporation without consent of any third party providing development funding for the relevant such JV Product. It is expressly understood that the direct and indirect sale and distribution of JV Products for applications other than in the Semiconductor Industry shall be allowed.
8.2 The Shareholders intend to make available to the Corporation, as contemplated by and subject to the terms and conditions of the Supply Agreements, their entire respective semiconductor automation product lines. The Corporation will select and combine the very best of these products lines to supply Japanese Semiconductor Customers with JV Products offering the highest product quality and service, all in accordance with and subject to the terms and conditions of this Agreement and the Supply Agreements. Towards this end, the parties acknowledge that: (i) Brooks has superior products in certain areas and, except for Yaskawa's current customer programs in place as of the time of this Agreement identified on Schedule A, which will continue through the current product cycle with respect to products being supplied to the relevant customer by Yaskawa and its Affiliates as of the date of this Agreement, and as otherwise provided on Schedule A, Brooks shall be the Corporation's preferred supplier for the Brooks Products; and (ii) Yaskawa has superior products in certain areas and shall be the Corporation's preferred supplier for Yaskawa Products. Any procurement by the Corporation of Brooks Products or Yaskawa Products that is inconsistent with the Shareholders' respective preferred supplier status as set forth in this Section 8.2 shall require the prior approval of the President and the Executive Vice President acting jointly. The Corporation may purchase JV Products, other than Brooks Products or Yaskawa Products, from either Yaskawa or Brooks.
8.3 The obligations of Yaskawa and Brooks set forth in this Section 8 shall survive any Transfer of shares of the Corporation to a Permitted Transferee as permitted by Section 3.2.1.
ARTICLE 9: TERM AND TERMINATION.
9.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for a period of 10 years thereafter (or such longer and/or additional period as may be necessary to effect the provisions of Section 13.11). At any time, at least 36 months prior to end of the initial 10-year term or any extension term, either Shareholder may send written notice to the
other Shareholder of the notifying Shareholder's desire to extend the term of this Agreement. If each Shareholder has timely expressed a desire to extend the then current term of the Agreement (with no other modifications) by written notice (an "EXTENSION NOTICE") to the other, then the term shall be automatically extended for an additional five-year term. If either Shareholder fails to timely provide an Extension Notice with respect to the applicable extension term, then the Agreement shall terminate at the end of the then current term, unless the Agreement is extended and/or modified by the mutual written agreement of the parties.
9.2 Termination. Prior to the end of the term, the Shareholders may terminate this Agreement, as provided below:
9.2.1 The Shareholders may terminate this Agreement by mutual written consent;
9.2.2 Subject to Section 9.3, either Shareholder may terminate this Agreement, in the event that the other Shareholder undergoes a Change of Control, by written notice (the "SECTION 9.2.2 NOTICE") to the other Shareholder and to the Corporation;
9.2.3 Either Shareholder may terminate this Agreement, by written notice to the other Shareholder and to the Corporation, in the event that a Governmental Entity of competent jurisdiction shall have issued a nonappealable final order, decree or ruling or taken any other nonappealable final action, in each case having the effect of restraining, enjoining, terminating or otherwise prohibiting (i) the continued existence of the Corporation, or (ii) the continued ownership by either Shareholder of shares of common stock of the Corporation; and
9.2.4 Subject to Section 9.3, a Shareholder with respect to which no Default Event has occurred (the "NON-DEFAULTING SHAREHOLDER") may terminate this Agreement by giving written notice (the "SECTION 9.2.4 NOTICE") to the other Shareholder with respect to which a Default Event has occurred (the "DEFAULTING SHAREHOLDER") and to the Corporation. The following are each a "DEFAULT EVENT":
(i) if (I) the Defaulting Shareholder has materially breached
this Agreement or its Supply Agreement with the Corporation (subject to Section
9.2.5), (II) the Non-Defaulting Shareholder has given the Defaulting Shareholder
written notice of such breach, describing such breach in reasonable detail,
(III) the Defaulting Shareholder has failed to cure such breach within 62 days
of receiving the notice of breach with respect thereto pursuant to clause
(i)(II) of this Section 9.2.4 (or, in the event that an additional cure period
is granted by the arbitrators in accordance with Section 11.2, during such
additional cure period), and (IV) the parties have not been able to agree upon
an adequate remedy (other than termination) for such breach;
(ii) the Defaulting Shareholder shall (I) file a petition in bankruptcy, (II) petition or apply to any tribunal for the appointment of a receiver or any trustee for it or a substantial part of its assets, (III) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, or (IV) make an assignment for the benefit of creditors or take any other similar action for the protection or benefit of creditors; or if there shall have been filed any such petition or application, or any such petition shall have
been commenced against it, in which an order for relief is entered or which remains un-dismissed for a period of 60 days or more; or the Shareholder shall consent in writing to any such petition, application or proceeding or order for relief or the appointment of a receiver or any trustee for it or any substantial part of any of its properties, or shall suffer any such receivership or trusteeship to continue un-discharged for a period of 60 days or more;
(iii) all or any portion of the Defaulting Shareholder's shares in the Corporation are levied upon or attached (other than by the Non-Defaulting Shareholder) in any proceeding, including any suit in equity, action at law or other judicial, arbitral or administrative proceeding, and that levy or attachment is not vacated or discharged within 60 days after the date on which it is made; or
(iv) there is a Transfer of the Defaulting Shareholder's shares of common stock in the Corporation, except in compliance with Article 3.
9.2.5 Notwithstanding anything to the contrary herein, no violation or breach of Section 7.1 or Section 7.2 of this Agreement by a Shareholder (or its officers, directors, employees, agents or representatives) shall constitute a Default Event unless such violation or breach is directly attributable to either Corporate Conduct or Disregard of Security (in each case, as defined below). For purposes of this Section 9.2.5:
(i) "CORPORATE CONDUCT" shall mean any action or omission of an officer, director, employee, agent or representative of the relevant Shareholder that is either (A) clearly sanctioned, knowingly condoned, directed or ratified by the senior management or the Board of Directors of such Shareholder, or (B) expressly permitted by the then-effective policies promulgated by the senior management or the Board of Directors of such Shareholders;
(ii) "DISREGARD OF SECURITY" shall mean the relevant Shareholder's failure to maintain reasonable measures, customary in the industry, calculated to protect confidential and/or proprietary information in the possession of such Shareholder (including Confidential Information) from impermissible disclosure and misuse, provided that any such failure shall be determined on an aggregate basis considering all such measures maintained by such Shareholder taken as a whole; and
(iii) For the avoidance of doubt, by way of example but not limitation, no Default Event shall be deemed to occur by reason of any (A) action or omission of any officer, director, employee, agent or representative of a Shareholder (whether intentional, willful, reckless, grossly negligent or otherwise) that does not satisfy the requirements of either clause (i)(A) or clause (i)(B) above, (B) any failure by a Shareholder to maintain a particular information security measure as long as the measures maintained by such Shareholder that are calculated to protect confidential and/or proprietary information in the possession of such Shareholder, when viewed in the aggregate, represent a level of information security that is reasonable and customary in the industry, or (C) any violation or breach of Section 7.1 or Section 7.2 does not satisfy the requirements of either clause (i)(A) or clause (i)(B) above and that does not cause actual harm or damage to the Disclosing Party or its business operations.
9.3 Limitations on Certain Termination Rights.
9.3.1 No Section 9.2.2 Notice may be given by a Shareholder with respect to a Change of Control affecting the other Shareholder, and this Agreement may not be terminated pursuant to
Section 9.2.2 by reason of such Change of Control, after expiration of 60 days after the date on which notice of the occurrence of such Change of Control is given to the terminating Shareholder.
9.3.2 No Section 9.2.4 Notice may be given by the Non-Defaulting Shareholder pursuant to Section 9.2.4(i) with respect to a material breach of this Agreement by the Defaulting Shareholder, and this Agreement may not be terminated by reason of such breach, after expiration of 120 days after the last day of the last cure period applicable hereunder with respect to such breach (including, without limitation, any additional cure period granted by the arbitrators in accordance with Article 11 or any other extension of such cure period granted by the Non-Defaulting Shareholder.
9.3.3 No Section 9.2.4 Notice shall be effective (other than for the
purpose of commencing the applicable cure period under Section 9.2.4(i)), and
this Agreement shall continue in full force and effect, until the earlier of:
(i) the date on which the Shareholders agree in writing that the Non-Defaulting
Shareholder has the right to terminate this Agreement; or (ii) one of the
following dates depending on whether or not either party elects to commence the
dispute resolution procedures under Article 11 (I) if either Shareholder
commences the dispute resolution procedures contemplated by Article 11 with
respect to such Section 9.2.4 Notice within 30 days after such delivery in
accordance with Section 13.3, then the date on which the final decision or award
of the arbitrators grants the Non-Defaulting Shareholder such right; or (II) if
neither party commences the procedures contemplated by Article 11 within 30 days
after such delivery, then the date on which the cure period, if any, expires
without the breach being remedied or cured or if there is no cure period, then
the date on which such notice is given.
9.4 Effects of Termination.
9.4.1 If this Agreement terminates pursuant to the provisions of
Section 9.2.1, 9.2.2, 9.2.3 or 9.2.4, unless the Shareholders otherwise agree in
writing:
(i) All of the rights and obligations of the parties under this Agreement shall terminate, except that the provisions of Sections 7.1, 7.2, 7.3 and 9.4.2 and Articles 11 and 13 (together with, in each case, all related definitions) shall survive such termination.
(ii) Each of the agreements between the Corporation, on the one hand, and either or both Shareholders (or their respective Affiliates), on the other hand, shall terminate as of the effective date of the termination of this Agreement.
(iii) Each of the Shareholders shall assume all of the rights, obligations and service commitments of the Corporation relating to the products of such Shareholder distributed by the Corporation.
(iv) Subject to Section 13.11, the Corporation shall be dissolved according to Article 10 and the Shareholders shall cause the Corporation to dissolve.
9.4.2 For a period of 10 years after termination of this Agreement,
(i) neither Yaskawa nor any of Yaskawa's Affiliates shall offer and/or sell,
directly or indirectly, Brooks Products to Japanese Semiconductor Customers or
license, finance or otherwise assist any other entity to market or sell Brooks
Products to Japanese Semiconductor Customers except to the extent Yaskawa's Brooks Products were being sold by Yaskawa to Japanese Semiconductor Customers at the time of termination of this Agreement in compliance with the terms of this Agreement and (ii) neither Brooks nor any of Brooks' Affiliates shall offer and/or sell, directly or indirectly, Yaskawa Products to Japanese Semiconductor Customers or license, finance or otherwise assist any other entity to market or sell Yaskawa Products to Japanese Semiconductor Customers except to the extent that Brooks' Yaskawa Products were being sold by Brooks to Japanese Semiconductor Customers at the time of termination of this Agreement in compliance with the terms of this Agreement. The parties acknowledge that, after termination of this Agreement (I) it would be difficult or impossible to separate and distinguish between Brooks' Intellectual Property and Yaskawa's Intellectual Property learned or acquired by the employees of the Corporation and/or the Shareholders (including employees of the Shareholders transferred to the Corporation and former employees of the Corporation engaged by a Shareholder after termination of this Agreement), and (II) the provisions of this Section 9.4.2 are reasonably necessary to protect Brooks' and Yaskawa's rights in their respective Intellectual Property and the goodwill associated therewith. If the termination of this Agreement is the result of a breach by a Defaulting Shareholder, then such Defaulting Shareholder shall have no right to enforce this Section 9.4.2 following the termination of this Agreement.
ARTICLE 10: DISSOLUTION.
10.1 Dissolution. The Corporation shall be dissolved if so decided by the Shareholders or as otherwise provided in this Agreement or by law. If the Corporation is to be dissolved it shall be liquidated and dissolved in accordance with the applicable laws and general practice in Japan. Except as otherwise provided in Section 9.4.1(iii), the net assets of the Corporation shall be distributed among the Shareholders pro rata to their respective holdings of shares of common stock of the Corporation at the time of dissolution.
ARTICLE 11: DISPUTE RESOLUTION.
11.1 Voluntary Resolution of Disputes. Any claims, differences, disputes or controversies arising out of or in connection with this Agreement, the Articles of Incorporation of the Corporation, either of the Supply Agreements or any other instrument, agreement or arrangement that is or may be entered into by the parties in connection with the Corporation and its business (each, a "DISPUTE"), including any question regarding its existence, validity, termination, breach or performance, before any arbitration is commenced, shall first be referred to the steering committee for resolution. If the Dispute is not resolved within 30 days, then the matter shall be referred to the chief executive officer of each Shareholder, each of whom shall in good faith and with diligent negotiation (including through at least one meeting in person) attempt to resolve the Dispute. If the Dispute is not resolved by such chief executives within 30 days from the day the Dispute was referred to the chief executives, any party to the Dispute may institute arbitration under this Article 11 (such party, the "INITIATING PARTY") by serving a demand for arbitration on each other party to the Dispute. During the attempted executive resolution or arbitration pursuant to this Article 11 neither party shall be prevented from seeking an injunction or temporary restraining order in a court of law as provided in Section 11.5. In deciding any arbitration under this Article 11, the arbitrators shall give significant weight to the good faith and diligence with which each party to the Dispute has sought to resolve it before the arbitration.
11.2 Mandatory Arbitration. If an attempt at resolution contemplated by
Section 11.1 has not resulted in the Dispute being resolved within the time
period set forth in Section 11.1, the Dispute shall be finally settled by
binding arbitration under the UNCITRAL Arbitration Rules (the "UNCITRAL RULES").
Each party shall appoint an arbitrator and the two arbitrators so appointed
shall jointly appoint a third arbitrator; provided, however, that if they cannot
agree (or if one party refuses to appoint an arbitrator) within 30 days after
the initiation of the arbitration, then this third arbitrator shall be appointed
by the International Chamber of Commerce pursuant to the Rules of ICC as
Appointing Authority in UNCITRAL or other Ad Hoc Arbitration Proceedings (and
the ICC shall otherwise serve as the Appointing Authority (the "APPOINTING
AUTHORITY") for the arbitration proceedings hereunder). Disputes about
arbitration procedure shall be resolved by the arbitrators. The arbitrators may
proceed to an award notwithstanding the failure of a party to the Dispute to
participate in the proceedings. Discovery shall be limited to mutual exchange of
documents relevant to the dispute, controversy or claim; depositions shall not
be permitted unless agreed to by both parties. All counterclaims shall be
resolved in the same proceeding in which the original claims are brought. The
arbitrators shall be authorized to grant interim relief, including to prevent
the destruction of goods or documents involved in the dispute, protect trade
secrets and provide for security for a prospective monetary award; shall be
authorized to grant permanent injunctive relief or other specific performance;
and shall be specifically authorized to grant the Defaulting Party a cure period
in addition to the cure period provided for in clause (i) of Section 9.2.4 in
the event that the arbitrators determine that a party has materially breached
this Agreement and thereby became a Defaulting Party under clause (i) of Section
9.2.4. Subject to Section 11.4, the award of the arbitrators shall be the sole
and exclusive remedy of the parties and shall be enforceable in any court of
competent jurisdiction, subject only to revocation on grounds of fraud or clear
bias on the part of the arbitrators.
11.3 Place and Language of Arbitration. Unless otherwise agreed by the Shareholders, the place of arbitration shall be in Boston, Massachusetts, USA if the Initiating Party is Yaskawa and shall be in Tokyo, Japan if the Initiating Party is Brooks. The procedural law of the place of arbitration shall apply where the UNCITRAL Rules are silent. The language to be used in the arbitration proceedings shall be English.
11.4 Matters that Parties May Litigate. Notwithstanding any other provision of this Agreement, a party may bring a suit or action in a court of law:
(i) to petition a court for injunctive relief with respect to a matter arising under or relating to the Agreement;
(ii) to seek judicial enforcement of an order or award granted by the arbitrators under this Article 11; or
(iii) as permitted under the Japanese Arbitration Law (Law No. 138 of 2003, as amended) or the U.S. Federal Arbitration Act, 9 U.S.C. Sections 1-16.
11.5 Allocation of Arbitration Expense. In any arbitration, each party shall bear the party's own expenses, including legal fees, except that:
(i) The parties shall share equally the payment of fees charged by the arbitrators and the Appointing Authority;
(ii) Subject to Section 11.5(iii), the arbitrators may allocate among the parties the costs, fees and other expenses relating to an arbitration in any manner that the arbitrators shall determine to be appropriate in their absolute discretion; and
(iii) If the arbitrators determine that a party has initiated an arbitration without a reasonable basis for doing so or that any claim or argument of a party in an arbitration is unreasonable, the arbitrator shall to that extent assess against that party the expenses incurred by the other parties in connection with the arbitration, including reasonable attorneys' fees.
ARTICLE 12: DEFINITIONS.
As used in this Agreement, the capitalized terms defined in the protocol and recitals have the meanings set forth next to them. Additionally, the following terms shall have the following respective meanings:
"AFFILIATE" shall mean, with respect to any Person, (i) any other Person that directly or indirectly controls such specified Entity or (ii) any Entity that directly or indirectly is controlled by, or is under common control with, such specified Person. "AGREEMENT" shall mean this Agreement and its attachments, as this Agreement and its attachments may be amended, restated or otherwise modified from time to time. "APPOINTING AUTHORITY" shall have the meaning set forth in Section 11.2. "BROOKS PRODUCTS" shall have the meaning given to the term "Brooks Products" in the Supply Agreements. "BUDGET" shall have the meaning set forth in Section 6.1.1. "BUDGET FINALIZATION DATE" shall have the meaning set forth in Section 6.1.2. "CHANGE OF CONTROL" shall mean, with respect to a Shareholder, the acquisition (whether by means of merger, consolidation, acquisition of securities or assets, or otherwise) by any Entity listed under the name of such Party on Schedule C (or by any Affiliate of such Entity) of (i) more than 50% of the outstanding voting securities of such Shareholder or (ii) all or substantially all of the assets of such Shareholder relating to such Party's obligations to supply products or services to the Corporation or otherwise to the business conducted by the Corporation as set forth in the first recital herein. |
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 7.1. "CORPORATION'S ACCOUNTANTS" shall have the meaning set forth in Section 4.2. "DEFAULTING SHAREHOLDER" shall have the meaning set forth in Section 9.2.4. "DISCLOSING PARTY" shall have the meaning set forth in Section 7.1. "DISPUTE" shall have the meaning set forth in Section 11.1. "ENTITY" shall mean any corporation, limited liability company, limited or general partnership, trust, estate, unincorporated association, governmental agency, bureau, department or other body, or any other organization or entity. "EXTENSION NOTICE" shall have the meaning set forth in Section 9.1. "INITIATING PARTY" shall have the meaning set forth in Section 11.1. "INTELLECTUAL PROPERTY" shall have the meaning set forth in Section 7.3. "JAPANESE SEMICONDUCTOR CUSTOMERS shall have the meaning given to the term "Semiconductor Customer" in the Supply Agreements. "JV PRODUCTS" shall mean the semiconductor robotics products to be supplied to the Corporation by the Shareholders pursuant to the Supply Agreements. "NON-DEFAULTING SHAREHOLDER" shall have the meaning set forth in Section 9.2.4. "ORGANIZATIONAL CHART" shall have the meaning set forth in Section 2.6. "PERMITTED TRANSFEREE" shall have the meaning set forth in Section 3.2.1. "PERSON" shall mean any Entity or individual. "RECEIVING PARTY" shall have the meaning set forth in Section 7.1. "SECTION 9.2.2 NOTICE" shall have the meaning set forth in Section 9.2.2. "SECTION 9.2.4 NOTICE" shall have the meaning set forth in Section 9.2.4. "SEMICONDUCTOR INDUSTRY" shall have the meaning set forth in the Supply Agreements. "SHAREHOLDER INTELLECTUAL PROPERTY" shall have the meaning set forth in Section 7.3.1. "TRANSFER" shall have the meaning set forth in Section 3.1. |
"UNCITRAL RULES" shall have the meaning set forth in Section 11.2. "YASKAWA PRODUCTS" shall have the meaning set forth in the Supply Agreements. |
ARTICLE 13: MISCELLANEOUS.
13.1 Remedies. The parties to this Agreement acknowledge and agree that breach of any of the covenants of Corporation and the Shareholders set forth in this Agreement is not fully compensable by payment of money damages and, therefore, that the covenants of Corporation and the Shareholders set forth in this Agreement may be enforced in equity by a decree requiring specific performance. Without limiting the foregoing, if any dispute arises concerning the sale or other disposition of any of the shares of stock subject to this Agreement, the parties to this Agreement agree that an injunction may be issued restraining the sale or other disposition of such shares of stock or rescinding any such sale or other disposition, ending resolution of such controversy. Such remedies shall be cumulative and nonexclusive and shall be in addition to any other rights and remedies the parties may have under this Agreement.
13.2 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Japan without giving effect to the principles of conflicts of law thereof.
13.3 Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
(i) in person, (ii) to the extent receipt is confirmed, by telecopy, facsimile
or other electronic transmission service, or (iii) by an internationally
recognized overnight courier service, to the parties at the following addresses:
IF TO BROOKS: IF TO YASKAWA: Brooks Automation, Inc. Yaskawa Electric Corporation 15 Elizabeth Drive 2-1 Shiroishi, Kurosaki Chelmsford, Massachusetts Kitakyushu, Japan 01824 U.S.A. Attention: Mr. Koki Nakamura Attention: Thomas Grilk, Esq. Fax: +81-93-645-7918 Fax: +1-978-262-2511 WITH COPY TO: WITH COPY TO: WilmerHale Masuda, Funai, Eifert & Mitchell, Ltd. 60 State Street 203 N. LaSalle Street, Suite 2500 Boston, Massachusetts 02109 Chicago, IL 60601-1262 Attention: Mark G. Borden Attention: Mary W. Shellenberg Fax: +1-617-526-5000 Fax: +1-312-245-7467 |
IF TO THE CORPORATION:
Yaskawa Brooks Automation, Inc.
2-1 Shiroishi, Kurosaki
Kitakyushu, Japan
Attention: President and Executive Vice President
Fax: +81__________________
The parties to this Agreement shall provide notice of any changes in the above listed addresses in accordance with the procedures described above.
13.4 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.
13.5 Amendments and Waivers. This Agreement may not be modified or amended, and the performance or compliance with any term of this Agreement may not be waived, in each case except by an instrument or instruments in writing signed each of the Shareholders. The waiver by any party hereto of a breach of any term or provision of this Agreement shall not be construed as a waiver of any subsequent breach.
13.6 Binding Effect. This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their respective heirs, legal representatives, successors and permitted assigns.
13.7 Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be an original instrument, but all of which together shall constitute one and the same instrument
13.8 Recapitalizations, Exchanges, Etc. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to shares of common stock of the Corporation, to any and all shares of capital stock of the Corporation or any successor or assign of the Corporation (whether by merger, consolidation, sale of assets, or otherwise) that may be issued in respect of, in exchange for, or in substitution of the shares of the common stock originally issued to the Shareholders, by reason of a stock dividend, stock split, stock issuance, reverse stock split, combination, recapitalization, reclassification, merger, consolidation, or otherwise.
13.9 Entire Agreement; Headings. This Agreement, the provisions of the Joint Venture Agreement, dated May 8, 2006, between the Shareholders that survive in accordance with its terms, the Supply Agreements, together with all exhibits attached hereto and therto, and the JV Agreement Section 4.1(C) Agreement, dated June 30, 2006 constitute the entire agreement among the parties hereto relating
to the subject matter hereof and thereof and supersede all prior agreements, understandings, and arrangements, oral or written, among the parties hereto with respect to the subject matter hereof and thereof. The headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
13.10 Rules of Construction. Words denoting the singular include the plural and vice versa. Words denoting a gender include all genders. References to a particular article, section, clause, exhibit or schedule shall be a reference to an article, section or clause of, or an exhibit or schedule to, this Agreement. Words such as "hereunder", "hereto", "hereof" and "herein" and other words of similar import shall, unless the context requires otherwise, refer to the whole of this Agreement and not to any particular article, section or clause hereof. A reference to "including" means including without limiting the generality of any description preceding such term and shall not be construed to limit a general statement, followed by or referable to an enumeration of specific matters, to matters similar to those specifically mentioned.
13.11 Further Assurances. Each of the parties to this Agreement, hereby
agrees, without any further consideration, to take any further actions and to
execute and deliver any further instruments or agreements, necessary or
advisable in order to effectuate the intents and purposes of this Agreement.
Each of the parties further agrees to take such commercially reasonable actions
as are necessary and available under applicable law to effect the parties'
intentions as set forth under the provisions of Section 9.4.2 in the event of
any challenge, legal or otherwise, to such Section 9.4.2; provided that in the
event of any challenge, legal or otherwise, to such Section 9.4.2 by the Japan
Fair Trade Commission, any other governmental authority in Japan or any third
party, Yaskawa shall (i) be responsible for responding to such challenge, (ii)
have the right to control and direct the representation of the parties in
connection with such challenge, including negotiations relating to such
challenge, (iii) keep Brooks reasonably informed as to the status and progress
of such challenge and the strategy of Yaskawa with respect to such challenge,
(iv) engage counsel who may be counsel to Yaskawa, at Yaskawa's cost to
represent and defend Yaskawa, Brooks and the Corporation in connection with any
such challenge (to the extent joint representation is ethically permissible),
including negotiations relating to such challenge, with such counsel being under
the direction and control of Yaskawa, and (v) bear all costs and expenses,
including legal fees, of Yaskawa, Brooks and the Corporation incurred in
connection with such challenge, other than (A) costs or expenses related to the
production of documents of Brooks, which shall be borne by Brooks, and (B) costs
or expenses, including legal fees, incurred by Brooks in connection with the
challenge in which separate counsel has been engaged. Without limiting the
generality of the foregoing, and notwithstanding anything to the contrary in
this Agreement, if the provisions of Section 9.4.2 above are found to be invalid
or unenforceable, in whole or in part, by any governmental, administrative,
regulatory, legislative, judicial or arbitral authority or tribunal, with the
effect that the term of the restrictive covenants set forth in the first
sentence of such Section 9.4.2 (the "SECTION 9.4.2 TERM") is reduced or
eliminated, then, unless Brooks and Yaskawa otherwise expressly agree in
writing, (i) if this Agreement remains in effect as of immediately prior to the
time of such finding of invalidity or unenforceability, then the term of this
Agreement specified in Section 9.1 above shall be extended by the period of such
reduction (or, if the Section 9.4.2 Term is eliminated, then by the full stated
amount of the Section 9.4.2 Term), or (ii) otherwise, the effectiveness of this
Agreement shall be reinstated, the
Corporation shall (to the extent necessary) be re-established by the Shareholders, and the business of the Corporation described in the first recital herein shall again be conducted through the Corporation in accordance with Article 8 of this Agreement, until expiration of the period of such reduction (or, if the Section 9.4.2 Term is eliminated, then by the full stated amount of the Section 9.4.2 Term); provided that if this Agreement was earlier terminated as a result of a breach by a Defaulting Shareholder, then the provisions of this sentence shall be operative solely at the option of the Non-Defaulting Shareholder, exercisable by written notice to the Defaulting Shareholder and, if the Corporation is then in existence, to the Corporation.
[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
YASKAWA ELECTRIC CORPORATION
By: /s/ Koji Toshima ------------------------------------ Title: President --------------------------------- |
BROOKS AUTOMATION, INC.
By: /s/ Edward C. Grady ------------------------------------ Title: President --------------------------------- |
YASKAWA BROOKS AUTOMATION, INC.
By: /s/ Hiroyuki Ougi ------------------------------------ Title: President --------------------------------- |
EX 10.02
EXECUTION COPY
U.S. ROBOT
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (this "AGREEMENT") is made as of June 30, 2006 (the "EFFECTIVE DATE"), by and between BROOKS AUTOMATION, INC., a Delaware corporation, having its principal business office at 15 Elizabeth Drive, Chelmsford, MA 01824 ("BUYER"), and YASKAWA ELECTRIC CORPORATION, a Japanese corporation having its principal business office at 2-1 Kurosaki-shiroishi, Yahatanishi-ku, Kitakyushu 806-0004 Japan ("SELLER").
WHEREAS, Seller is engaged in, among other things, the business of developing, designing, manufacturing and selling various semiconductor robotic products, and
WHEREAS, Buyer is engaged in, among other things, the business of
developing, designing, manufacturing and selling various integrated automation
and subsystems for the semiconductor wafer manufacturing and related industries:
and
WHEREAS, simultaneously herewith, Buyer is acquiring Seller's subsidiary, Synetics Solutions, Inc. ("SYNETICS SOLUTIONS") under an Agreement and Plan of Merger (the "MERGER AGREEMENT") dated as of May 8, 2006 (the "Signing Date"); and
WHEREAS, simultaneously herewith, Buyer and Seller are entering into a Shareholders' Agreement ("SHAREHOLDERS' AGREEMENT") for the formation and management of Yaskawa Brooks Automation, Inc., a joint venture between Buyer and Seller in Japan; and
WHEREAS, Seller and Buyer desire to enter into an agreement whereby Seller will supply certain Products (as hereinafter defined) to Buyer for resale.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller and Buyer agree as follows:
1. GRANT OF SALES RIGHTS.
1.1 DEFINITIONS.
"AFFILIATE" shall mean, with respect to any Person, (i) any other Person that directly or indirectly controls such specified Person or (ii) any other Person that directly or indirectly is controlled by, or is under common control with, such specified Person. A Person shall be deemed to control another Person if the controlling Person owns 50% or more of any class of voting securities (or other ownership interest) of the controlled Person.
"AGREEMENT" shall have the meaning set forth in the introductory paragraph to this agreement.
"ASSUMED CUSTOMER PROGRAMS" shall mean Seller's Product programs with Semiconductor Customers as set forth on Schedule B hereto.
"BROOKS PRODUCTS" means all vacuum robotics and other types of products for the Semiconductor Industry that are listed under the heading "Brooks Products" on Schedule A hereto; provided that the definition of "BROOKS PRODUCTS" excludes (i) products specifically targeted to flat
panel display automation and motor and motion control products (including tables driven by motion control products) on a stand-alone basis and (ii) articulated multi-axis robots (with 6-axes or greater).
"BUSINESS DAY" shall mean a day on which banks are open for business in both Boston, Massachusetts and Tokyo, Japan.
"BUYER" shall have the meaning set forth in the introductory paragraph to this Agreement.
"CHANGE OF CONTROL" shall have the meaning set forth in the Shareholders' Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 7.2 hereof.
"CORPORATE CONFIDENTIALITY BREACH" shall mean a material breach of
Section 7 of this Agreement that is either (A) clearly sanctioned, directed
or ratified by the senior management or the Board of Directors of Buyer, or
(B) expressly permitted by the then-effective policies promulgated by the
senior management or the Board of Directors of Buyer or (C) the result of
Buyer's failure to maintain reasonable measures, customary in the industry,
calculated to protect confidential and/or proprietary information in the
possession of Buyer (including Confidential Information and Embedded
Software) from impermissible disclosure and misuse, provided that any such
failure shall be determined on an aggregate basis considering all such
measures maintained by Buyer taken as a whole. For the avoidance of doubt,
by way of example but not limitation, no Corporate Confidentiality Breach
shall be deemed to occur by reason of any (i) action or omission of any
officer, director, employee, agent or representative of Buyer (whether
intentional, willful, reckless, grossly negligent or otherwise) which does
not satisfy the requirements of clauses (A), (B) or (C) above, (ii) any
failure by Buyer to maintain a particular information security measure as
long as the measures maintained by Buyer that are calculated to protect
confidential information and/or proprietary information in the possession
of Buyer, when viewed in the aggregate, represent a level of information
security that is reasonable and customary in the industry, or (iii) any
violation or breach of Section 7 that does not cause actual harm or damage
to Seller or its business operations.
"CUSTOMER AFFILIATE" shall mean any Subsidiary of a Primary Person, which Primary Person has its principal offices located in North America, wherever such Subsidiary may be located; provided that the following Persons shall be excluded from the meaning of Subsidiary for the purposes of this definition: Sumitomo Eaton Nova, MFSI Limited and MEMC Japan Limited.
"DELIVERY POINT" shall have the meaning set forth in Section 2.1 hereof.
"DROP IN PRODUCTS" shall have the meaning set forth in Section 1.3 hereof.
"EFFECTIVE DATE" shall have the meaning set forth in the introductory paragraph to this Agreement.
"INITIAL TERM" shall have the meaning set forth in Section 8.1 hereof.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section 10.1 hereof.
"MAJOR BREACH" shall mean the Buyer's:
(i) failure to use good faith efforts to meet the minimum purchase targets as required by Section 1.4 hereof,
(ii) repeated failure to make timely payments due and owing under this
Agreement,
(iii) failure to perform any of its material obligations under
Section 5.3.2,
(iv) Corporate Confidentiality Breach, and
(v) use of Seller's Intellectual Property in violation of
Section 10.1.
"OEM" means a Primary Person, which does not have its principal offices located in North America, or any of its Subsidiaries which do not have their principal offices located in North America, in either case that purchases Products for the purpose of adding value by incorporating Products as a minor component of a larger system that is sold by such Primary Person or its Subsidiaries.
"PARTS" shall have the meaning set forth in Section 3.3 hereof.
"PERSON" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association or joint venture.
"PRIMARY PERSON" shall mean a Person that is not under the control of any other Person (other than an individual). A Person shall be deemed to control another Person if the controlling Person owns 50% or more of any class of voting securities (or other ownership interest) of the controlled Person.
"PRODUCTS" means Yaskawa Products and/or Brooks Products, as applicable.
"PURCHASE ORDER" shall have the meaning set forth in Section 3.1 hereof.
"QUARTERLY BUSINESS REVIEW" or "QBR" shall have the meaning set forth in Section 1.4 hereof.
"REQUIRED BID INFORMATION" means the types of information relating to the Product desired by a customer under Section 1.5 hereof, as listed on Schedule C hereto, excluding any and all information that the customer refuses to provide to Buyer.
"SCARA" means Selective Compliant Articulated/Assembly Robot Arm.
"SELLER" shall have the meaning set forth in the introductory paragraph to this Agreement.
"SEMICONDUCTOR CUSTOMER" shall mean (i) all Primary Persons with principal offices located in North America that, either directly or through their Customer Affiliates, are current or prospective purchasers or users of Products and (ii) all Customer Affiliates it being agreed and acknowledged by both parties that Seller shall not knowingly sell Products to any customer (other than any OEM) for the purpose of selling or otherwise distributing such Products to any Person that meets the criteria set forth in clauses (i) or (ii) above.
"SEMICONDUCTOR INDUSTRY" means the design, development, manufacture, assembly, use, sale, repair, installation, testing, quality control, inspection or calibration of equipment or tools (including software), and all components and subassemblies thereof, that are used in the design, development, manufacture, patterning, assembly, testing or packaging of semiconductor, magnetic media, magnetic storage, and optical devices as well as reticles and masks used in connection therewith.
"SHAREHOLDERS' AGREEMENT" shall have the meaning set forth in the recitals.
"SPECIFICATIONS" shall have the meaning set forth in Section 5.1 hereof.
"SYNETICS SOLUTIONS" shall have the meaning set forth in the recitals.
"SUBSIDIARY" of any Person shall mean each of the Persons that, directly or indirectly, through one or more intermediaries, is owned or controlled by such Person. A Person shall be deemed to control another Person if the controlling Person owns 50% or more of any class of voting securities (or other ownership interest) of the controlled Person.
"YASKAWA PRODUCTS" means all atmospheric SCARA robotics products for the Semiconductor Industry that are under the heading "Yaskawa Products" on Schedule A provided that the definition of "YASKAWA PRODUCTS" (i) excludes products specifically targeted to flat panel display automation and motor and motion control products (including tables driven by motion control products) on a stand-alone basis (ii) excludes articulated multi-axis robots (with 6-axes or greater) and (iii) for the avoidance of doubt, excludes Brooks Products.
1.2 GRANT. Seller hereby grants to Buyer the exclusive right to market and distribute the Products to Semiconductor Customers. Buyer shall use its commercially reasonable efforts to promote, sell and service the Yaskawa Products to the Semiconductor Customers and to maintain adequate facilities and personnel as may be necessary to sell and support the Yaskawa Products, including, but not limited to, calling on and training Semiconductor Customers, collecting market data and acting as a liaison between the Semiconductor Customer and Seller with respect to Semiconductor Customers' technical, engineering and delivery requirements relating to the Yaskawa Products. Buyer shall use such efforts to sell Brooks Products as Buyer may deem in its best interests from time to time, in its sole discretion. Seller agrees to use commercially reasonable efforts to customize the Yaskawa Products to promote sales in the North American market as Buyer or its Semiconductor Customers may request from time to time. For the avoidance of doubt, the parties acknowledge that Seller shall have the right to market and distribute (i) any products specifically targeted to flat panel display automation and motor and motion control products (such as tables driven by motion control products) on a stand alone basis to any customer, including Semiconductor Customers and (ii) any products, including without limitation the Products, to customers other than Semiconductor Customers.
1.3 SUPPLY UNDER EXISTING SEMICONDUCTOR CUSTOMER CONTRACTS. Buyer shall not sell atmospheric robotics products that have substantially identical configurations to the Yaskawa Products ("DROP IN PRODUCTS") to Semiconductor Customers that are parties to Assumed Customer Programs in order to replace the sale of those same Yaskawa Products to such Semiconductor Customers that are sold under the applicable Assumed Customer Program; provided that Buyer may make such sale if Buyer follows the following process: (i) a Semiconductor Customer under such Assumed Customer Program first approaches Buyer for a replacement or alternative to such Yaskawa Products, (ii) Buyer obtains such Semiconductor Customer's stated reasons for such request ("CUSTOMER REASONS"), (iii) Buyer provides such Customer Reasons to Seller promptly after receipt of the Customer Reasons, (iv) Seller provides a response to such Customer Reasons at or before the next QBR (as discussed below) ("SELLER RESPONSE") and (v) if Seller provides a Seller Response in the foregoing timeframe, Buyer provides such Seller Response to the applicable Semiconductor Customer and offers the Semiconductor Customer an opportunity to meet with Seller. If, after such process is completed, the applicable Semiconductor Customer continues to request that Buyer sell such Drop In Products to such Semiconductor Customer, then Buyer shall be free to sell such Drop In Products to such Semiconductor Customer without limitation hereunder. For the avoidance of doubt, this Section 1.3 shall not apply to Brooks Products.
1.4 QUARTERLY BUSINESS REVIEWS; MINIMUM PURCHASE TARGETS. Buyer and Seller shall appoint key personnel of each party to meet quarterly to discuss the status of the parties' performance under this Agreement relating to Yaskawa Products, to raise any concerns and to discuss and plan for future business opportunities involving the sale of Yaskawa Products to Semiconductor Customers (such meetings,
herein referred to as "QUARTERLY BUSINESS REVIEWS" or "QBRS"). In such meetings, Buyer and Seller shall use good faith efforts to resolve any disputes or concerns regarding the supply and sale of the Yaskawa Products to the mutual satisfaction of the parties. Buyer and Seller each agree that such QBRs shall involve, without limitation, establishment of minimum purchase targets for the subsequent quarter. Both parties will use good faith efforts to implement any understandings reached at a QBR; without limitation, Buyer will use good faith efforts to meet the minimum purchase targets agreed in a QBR. If Buyer fails to meet such minimum purchase targets for the 3 months immediately prior to each of three consecutive QBRs, or if Buyer and Seller fail to agree to minimum purchase targets at a QBR, then the President of Buyer and President of Seller shall meet, either by phone or in person, to discuss the matter. It is hereby agreed and acknowledged by both parties hereto that (A) (i) Buyer's failure to meet such minimum purchase targets, or Buyer and Seller's failure to agree on minimum purchase targets, shall not be a breach of this Agreement nor of any other agreements between Buyer and Seller in which this Section 1.4 is not expressly and specifically superceded, (ii) Buyer shall not be required by law or court order to meet such minimum sales targets and (iii) Buyer's rights under this Agreement shall not be limited in any manner as a result of any such failure to agree to minimum purchase targets or to meet such minimum purchase targets, but (B) Buyer's failure to use good faith efforts to reach the minimum purchase targets agreed in a QBR will be a material breach of this Agreement. For the avoidance of doubt, this Section 1.4 shall not apply to Brooks Products.
1.5 PREFERRED VENDOR. Buyer will give Seller the same opportunity to sell its Yaskawa Products to Buyer for resale to Semiconductor Customers as Buyer provides to itself or any third party in their sale of atmospheric robotics products for such Semiconductor Customers, which means that (i) Buyer will keep Seller informed of its future (whether actual or potential) requirements of atmospheric robotic products for the Semiconductor Industry, (ii) Buyer shall notify Seller promptly after receipt of an inquiry from a Semiconductor Customer regarding the supply of an atmospheric robotics product for the Semiconductor Industry and will provide Seller with the Required Bid Information with such notice, (iii) within 10 Business Days (or such longer period as the parties may agree on a case by case basis based on the actual requirements of the Semiconductor Customer) of receipt of such notification and Required Bid Information from Buyer (the "DETERMINATION PERIOD"), Seller shall respond to Buyer indicating whether Seller elects to supply the Yaskawa Product and, if so, providing a preliminary estimate of the lead time and price for the same (each estimate, a "PROJECT BID") and (iv) if Seller provides a Project Bid to Buyer in the Determination Period, Buyer will present Seller's Project Bid to its Semiconductor Customer; provided that Buyer may inform its Semiconductor Customer of its obligations under the foregoing process and, if the Semiconductor Customer instructs Buyer that the Semiconductor Customer is not interested in acquiring Seller's atmospheric products, for any or no reason, Buyer shall be deemed to have complied with the foregoing process for such sale of Products to such Semiconductor Customer. If Buyer does not provide Seller with the Required Bid Information pursuant to clause (ii) above, (A) Seller shall provide Buyer with written notice within three (3) Business Days of receipt of notification from Buyer under clause (ii) of what Required Bid Information is missing and (B) if the notification under clause (A) is delivered in that timeframe, (1) The Determination Period shall recommence once the Buyer provides Seller with such Required Bid Information and (2) the process set forth in clauses (ii) through (iv) above shall recommence upon such delivery. Notwithstanding anything to the contrary herein, Buyer will use good faith efforts to obtain all the items set forth on Schedule C, but shall be deemed to have met its obligation to provide all Required Bid Information so long as Buyer provides all information made available by the customer to Buyer as a result of those efforts. Each Project Bid from the Seller shall be the Seller's Confidential Information and shall be subject to the provisions of Section 7.2, except that the Buyer is permitted to provide the Project Bid to the Semiconductor Customer. For the avoidance of doubt, Buyer shall be free to provide the Semiconductor Customer with other proposals for the sale of atmospheric robotic products for the Semiconductor Industry to such Semiconductor Customer before, during or after the above process, so long as Buyer does not actually sell such products to the Semiconductor Customer without following the above process. If a Semiconductor Customer selects Seller's Project Bid, then Buyer and Seller shall negotiate in good faith a comprehensive agreement for the development of such Yaskawa Product ("DEVELOPMENT AGREEMENT") for such Semiconductor Customer, which Development Agreement will set forth all of the
specific requirements for the development of the Yaskawa Product, including,
without limitation, Specifications, target pricing, preliminary volume
requirements, acceptance criteria, schedule for development, milestones,
prototypes, and ownership of intellectual property. Buyer and Seller each agree
and acknowledge that a Semiconductor Customer will be free to reject a Project
Bid by Seller, in whole or in part, at any time, even after acceptance, and, in
such event, Buyer is free to sell other products to such Semiconductor Customer
to satisfy the requirements set forth in the notice sent to Seller pursuant to
clause (ii) above (or requirements substantially identical thereto), on
condition that the Buyer will provide written notification to Seller of the
reasons why the Semiconductor Customer has elected not to purchase Seller's
Yaskawa Product. The Determination Period under clause (iii) of this Section 1.5
has been established based upon anticipated Semiconductor Customer requirements
and the parties agree that Seller's failure to respond within said Determination
Period shall not constitute a bar to Seller electing to supply the Yaskawa
Product and submitting a Project Bid, in each case solely to Buyer. If Buyer
determines, in its sole discretion, that late submission of Seller's Project Bid
to the Semiconductor Customer would not be disruptive to the sales cycle, and,
if the Semiconductor Customer has indicated that it will consider a Project Bid
for Seller's Yaskawa Products, then Buyer will submit Seller's Project Bid to
the Semiconductor Customer. However, Buyer shall not be subject to the
obligations of this Section 1.5 with respect to a Yaskawa Product for a
Semiconductor Customer if the Seller failed to respond within the applicable
Determination Period, regardless of whether the Seller provides such late
election and Project Bids. Notwithstanding anything to the contrary in this
Section 1.5, Buyer and Seller agree and acknowledge that the provisions of this
Section 1.5 shall not apply to the sale by Buyer of (i) any Yaskawa Products for
the Semiconductor Industry to a Semiconductor Customer where Buyer was selling
an identical or substantially similar product to such customer on or prior to
the Effective Date nor (ii) any products (such as, without limitation, Brooks
Products) that are not Yaskawa Products for the Semiconductor Industry. This
Section 1.5 shall terminate and be of no force or effect 36 months prior to the
expiration of the then-current term unless the parties have agreed to an
extension of such term pursuant to Section 8.1 hereof.
1.6 DEVELOPMENT OR CUSTOMIZATION. If Buyer and Seller agree that Seller will perform design or development work for Buyer, then a separate design and development agreement will be entered into between the parties, which agreement shall address ownership of resulting intellectual property rights in detail.
2. PRICE AND PAYMENT.
2.1 PRICE. The prices charged to Buyer for the Products to be supplied to
the Semiconductor Customers under the Assumed Customer Programs shall be
equivalent to the pricing that was in effect from Seller to Synetics Solutions
on June 13, 2005, subject to adjustment permitted by, or disclosed pursuant to,
the second sentence of Section 2.7 of the Merger Agreement and as provided in
Section 2.2 of this Agreement, between June 13, 2005 and the Effective Date and
thereafter. All other prices for Products purchased by Buyer under this
Agreement shall be agreed on a customer-by-customer, Product-by-Product basis.
All prices shall be payable in U.S. dollars, FCA (Incoterms 2000), Seller's
plant (the "DELIVERY POINT").
2.2 PRICE ADJUSTMENT.
2.2.1 SPECIFICATION CHANGES In the event that any Specification changes are made to the Products that adds to or decreases the cost of manufacture, the price of the Products will be increased or decreased by the actual additional or reduced cost incurred by Seller arising from such changes and a reasonable margin thereon; provided, however, that Seller shall make no such Specification changes, whether such Specification changes add to or decrease the cost of manufacture, to any of the Products without mutual written agreement to the resulting Specifications and price changes. If the parties cannot agree on a Specification or price change, then the applicable Specification change shall not be implemented and the matter will be discussed at the next QBR. No Specification or
price adjustment will take effect without mutual written agreement, if any, following the applicable QBR.
2.2.2 PRICE ADJUSTMENT. During the QBRs, either Buyer or Seller may request a reevaluation and adjustment of the price for the Products to reflect such items as increases or decreases in labor and material used to produce the Product, volumes, customer requirements, including cost down initiatives and the like. If such reevaluation and adjustment are requested, the parties will negotiate in good faith to equitably adjust the price of the Products. The party requesting the reevaluation and adjustment will provide detailed information supporting the requested price adjustment. No price adjustment will take effect without mutual written agreement, if any, following the applicable QBR.
2.2.3 COMMITTED PRICE REDUCTIONS TO KLA TENCOR CORPORATION. The Purchase Agreement, dated October 29, 2004, between KLA Tencor Corporation ("KLA") and Synetics Solutions, without amendment (the "KLA AGREEMENT"), requires that the purchase price paid by KLA for certain Yaskawa Products be reduced over time as set forth on Exhibit C to the KLA Agreement. Seller shall provide price reductions to Buyer for such Yaskawa Products purchased for resale to KLA on a schedule and in reduction amounts necessary to provide Buyer with a Gross Margin Percentage, for each purchase order for Yaskawa Products for resale to KLA, equal to Synetics Solutions' Gross Margin Percentage on January 6, 2006, on sales of such Yaskawa Products under the KLA Agreement for the term of the KLA Agreement, without amendment, extension or other modification after the Effective Date that affects pricing, and only for Products for which KLA is a components customer. Buyer will use good faith and commercially reasonable efforts to communicate and facilitate any necessary Product changes or Product Specification changes to KLA relating to required price reductions. For the purposes of this Section 2.2.3, "Gross Margin Percentages" shall mean the aggregate gross margin for all Yaskawa Products sold to KLA divided by the price charged by Buyer to KLA for such Yaskawa Products pursuant to the KLA Agreement (the "KLA Price"), and "gross margin" shall mean the difference between the KLA Price and the price charged to Buyer by Seller under this Agreement. Promptly after the Effective Date, Buyer will undertake commercially reasonable efforts to convert KLA from a components customer to a purchaser of EFEM systems, and in the event that KLA begins to purchase EFEM systems from the Buyer, then the provisions of this Section 2.2.3 shall not apply to Buyer's purchase of Yaskawa Products to fulfill KLA's orders of EFEM systems but will continue to apply to Buyer's purchase of any individual Yaskawa Products to fulfill KLA's orders of individual Yaskawa Products until such time as the parties agree through QBR discussions. Furthermore, notwithstanding Section 2.1, prices for Yaskawa Products to fulfill KLA's orders of EFEM systems shall be subject to change.
2.3 PAYMENT. Invoices for the Products shall be issued to Buyer upon delivery of the Products to the Delivery Point. Payment shall be made by Buyer by wire transfer to such account as Seller shall designate from time to time in writing to Buyer within 75 days after delivery of the Products to the Delivery Point. Any amounts not paid within 5 Business Days after the due date for such payment shall bear interest from and after the due date to the date of payment at the rate of 1 1/2 % per month or the highest rate permitted by law, whichever is less, and all such amounts shall be due and payable upon demand by Seller.
3. ORDERS AND FORECASTS.
3.1 PURCHASE ORDERS.
3.1.1 The term "PURCHASE ORDER" shall mean a written or electronic order for the Products or any other equivalent process by which Buyer orders quantities of the Products and spare Parts required to perform repair services from Seller. It is contemplated that, from time to time, Purchase Orders in forms prepared by Buyer, may be used in ordering the Products and that there
may be included in such forms certain stipulations, conditions or agreements not otherwise contained herein. It is expressly understood and agreed that the provisions of this Agreement shall be deemed a part of each Purchase Order accepted by Seller and, unless otherwise mutually agreed in writing, any provision in any Purchase Order which is inconsistent with, contrary or in addition to, or which otherwise adversely materially alters or increases Seller's or Buyer's obligations under this Agreement shall be deemed amended or deleted, as the case may be and that the terms of this Agreement shall control. Seller shall ship only the quantities of the Products ordered by Buyer in the applicable Purchase Order, unless otherwise agreed in writing by Buyer and Seller in accordance with Sections 3.3 and 3.4 of this Agreement. All Buyer Purchase Orders shall specify the quantity of the Products, the shipment date, and all other relevant information necessary to effectuate delivery of the Products to the Delivery Point.
3.1.2 Seller shall accept all Purchase Orders that are submitted in conformance with this Agreement. Unless otherwise agreed by Buyer and Seller on a case by case basis, Seller will deliver the ordered Products to the Delivery Point 8 weeks after receipt of the Purchase Order issued in accordance with the terms of this Agreement; provided, however, that, with respect to quantities of Products ordered under any Purchase Order issued in accordance with the terms of this Agreement that result in a quantity of Product ordered in a given month in excess of 130% of the average amount forecasted for said month in each Buyer forecast provided during the most recent four months of the preceding 6 month forecast period, Seller shall only be bound to a lead time for delivery of such excess quantity of Products on the Purchase Order as Buyer and Seller may agree for such Products on a case by case basis. Except as provided in Section 3.3 below, no Purchase Order shall be subject to cancellation or reduction after acceptance by Seller.
3.1.3 Notwithstanding the limitation on Purchase Orders in excess of forecast in Section 3.1.2, Seller agrees that with respect to Products ordered by Buyer for resale (i) to KLA that are subject to upside supply flexibility requirements under Section 17.1(b) of the KLA Agreement as of the Effective Date or (ii) to Applied Materials that are subject to similar requirements under Section 2.5 of the Applied Materials Global Supply Agreement, dated November 28, 2001 (as amended by the ITO Agreement, dated December 5, 2005, and as further extended on January 5, 2006, the "AMAT AGREEMENT") as of the Effective Date, Seller will use commercially reasonable efforts to fulfill Purchase Orders for a quantity of Product that are not more than: (I) 180% of the forecast provided for such week 12 weeks prior to such week for Products to KLA and (II) 180% of the forecast provided for such week 12 weeks prior to such week for Products to Applied Materials. Nothing in this Section 3.1.3 modifies or shortens the 8-week minimum lead time requirements of Sections 3.1.2 and 3.2 of this Agreement.
3.1.4 Seller further agrees that it shall be responsible for late delivery damages under Section 17.5 of the KLA Agreement if (i) such damages are the result of Seller's failure to meet its delivery obligations under Section 3.1.2 of this Agreement and (ii) Buyer actually is required by a claimant to pay such damages. The requirements under Sections 3.1.3 and 3.1.4 are dependent upon the Buyers' fulfillment of its obligations to provide proper forecasting on a weekly and biweekly basis and its obligations to maintain sufficient levels of inventory to fulfill the customers' lead time requirements under the KLA Agreement and the AMAT Agreements.
3.2 FORECASTS AND PURCHASE ORDER SCHEDULE. In order to meet Buyer's requirements and in order to assist Seller in its supply chain and inventory management, the parties agree to the following forecast and Purchase Order schedule.
DESCRIPTION COMMITMENT ----------- ---------- PURCHASE ORDER LEAD TIMES-Buyer will Binding and subject to cancellation or issue Purchase Orders to Seller not reduction after acceptance by Seller less than 8 weeks prior to the date only in accordance with Section 3.3 on which shipment of the Products below. from the Delivery Point is required. Seller shall not be obligated to accept or fulfill any Purchase Order which is received by Seller less than 8 weeks prior to the date on which shipment is required, unless otherwise agreed by Seller in writing on a case by case basis. SIX (6) MONTH ROLLING FORECAST - At Non-binding forecast for production least every two weeks, Buyer will scheduling purposes only. provide Seller with a good faith forecast of its actual anticipated monthly requirements of the Products for the six month period following the 8 week period covered by Purchase Orders (as set forth above). ANNUAL FORECAST - By no later than Non-binding forecast for planning February 1 of each year, Buyer will purposes only. provide Seller with a forecast of Buyer's anticipated requirements of the Products for each fiscal year of Seller (March 21 through March 20) |
3.3 CANCELLATION. Buyer may cancel a Purchase Order at any time. In such event, the cancelled Products will incur cancellation charges as follows:
Finished Goods: 100% of the then applicable price will be paid in exchange for delivery of the Finished Goods as purchased Product hereunder, it being mutually agreed that Seller will not deliver Finished Goods to Buyer until Seller has successfully completed the pre-shipment testing of such Finished Goods;
WIP: 50% of the then applicable finished goods price attributable to the
WIP;
Raw Material: 0% if returnable to the supplier or Buyer purchases Products utilizing such Raw Material within 6 months of cancellation, but otherwise 100% of the original applicable price attributable to the Raw Material.
"FINISHED GOODS" are defined as completely manufactured and/or assembled Products at the time of the cancellation. "WIP" is defined as incompletely manufactured and/or assembled Products at the time of the cancellation. "RAW MATERIAL" is defined as only those materials needed to make a Part and any purchased Parts. For the purposes of this Agreement, "PART" means a component line item on a bill of materials. Parts are collectively assembled to produce a Product. The above defined cancellation charges are in lieu of any other obligation of Buyer arising as a result of the cancellation. All amounts accrued above are payable within sixty (60) days of Seller's delivery of an invoice to Buyer. Finished Goods will be invoiced upon delivery of the Finished Goods to the Delivery Point.
3.4 RESCHEDULING DELIVERY OF PRODUCTS. Buyer may request rescheduling of the delivery date of any Product scheduled for shipment to the Delivery Point. Rescheduling of Products by Buyer will incur fees as follows:
(i) If Buyer requests an earlier delivery date than the currently scheduled date, Seller must approve or reject the new delivery date. Seller will promptly advise Buyer if it approves or rejects the requested new delivery date, and along with any approval will indicate any additional charges that will be imposed on Buyer as a result of the change.
(ii) If Buyer requests a later delivery date than the currently scheduled date, Seller approval is not required and no additional charges will be imposed on Buyer as a result of such rescheduling; so long as the rescheduled delivery date does not extend more than three months beyond the originally scheduled delivery date. Buyer will use good faith efforts to avoid rescheduling deliveries in a manner that would cause a product to be delivered in a different Seller fiscal quarter than the originally scheduled delivery date.
3.5 COPY EXACT; END OF LIFE.
(a) Copy Exact. Buyer requires that any and all changes to the product and components be submitted to Buyer for review 180 days before the planned cut-in date of the change. Change notification must be processed per the Buyer Seller Initiated Action Request Process (OP-000-00006-17). Buyer will review the proposed change for classification relative to Copy Exact (CE!) criteria and will respond to Seller within 10 Business Days of the change notification with the CE! Class. Changes that affect system operations performance or process performance will require Buyer approval before the change is cut-in. For any change to a Product that is approved by Buyer and implemented by Seller, Seller will provide Buyer with an updated set of Product documentation. Notwithstanding the foregoing, Seller and Buyer each agree that the process under this Section 3.5(a) may be (i) accelerated in the event of a supply chain emergency situation, upon Buyer's consent and/or (ii) extended upon mutual agreement on a case by case basis.
(b) End of Life. Seller will keep Buyer fully informed relative to the Product roadmap and Product life cycle. Buyer will be notified of end of life at least 12 months (or a lesser time as the parties may agree on a product-by-product basis from time to time) in advance and provided last buy privileges at the time of end of life.
4. SHIPMENT AND RISK OF LOSS.
4.1 SHIPMENT. The standard method of shipment shall be ocean carrier; provided, however, Products will be shipped by air at Buyer's request and expense. Seller shall ship Products or cause Products to be shipped from its manufacturing facilities to the Delivery Point on or before the ship date(s) set forth in the applicable Purchase Order. Prior to shipment, Seller will conduct the pre-shipment testing contemplated by Section 6.3 hereof and will include its standard shipment test report with each shipped Product.
4.2 TITLE. Risk of loss shall pass to Buyer according to Incoterms 2000 "FCA" and title shall transfer concurrently therewith.
5. WARRANTY.
5.1 SPECIFICATIONS. The term "SPECIFICATIONS" shall mean all, or any part, of the detailed description of Products provided with the Product and any other specifications agreed upon by Seller and Buyer. All Specifications shall be in writing.
5.2 WARRANTY.
5.2.1 WARRANTY. Seller warrants that the Products will (i) conform to the Specifications, and (ii) will be free from defects in materials, workmanship and designs (but only as to designs
provided by Seller and not designs provided by Buyer) for a period of 18 months from the date of the bill of lading for such Product. The term of the warranty set forth in the previous sentence shall be extended to 24 months starting from the date of delivery of Products (I) to KLA for Products covered by the KLA Agreement or (II) to AMAT for Products covered by the AMAT Agreement. Further, to the extent that AMAT or KLA have agreed, or agree in the future, in writing to a shorter warranty period for Products, then such shorter warranty period shall apply to sales to KLA and AMAT of such Products. This warranty is limited to Buyer, as the original purchaser of the Product, and cannot be assigned or transferred to any third person, without Seller's express, prior written consent, it being agreed and acknowledged that Buyer will make warranties to its Semiconductor Customers based on Seller's warranties hereunder and that Buyer shall continue to be the beneficiary of the warranties even after Buyer distributes Products to its Semiconductor Customers. No person is authorized to amend or expand this warranty or to grant any other warranty on behalf of Seller. Seller shall not be responsible for any repair, replacement or material charges incurred by Buyer or others within the period of this warranty, or otherwise, unless Seller gives its prior written consent to the incurring or payment of such charges. Seller's sole responsibility and liability with respect to any Product under this warranty shall be, at Seller's option, the repair or replacement of any Product which fails to comply with the terms of this warranty or, in the event Seller determines that such Product cannot be repaired or replaced, the refund to Buyer, through payment or credit, of the purchase price paid by Buyer for such defective or non-conforming Product. At Seller's request, Buyer shall return and/or hold any Product claimed to be defective or non-conforming for inspection, repair or replacement by Seller. Seller shall inspect such Products, and Products found not to be defective or non-conforming shall be returned to Buyer at Buyer's cost and expense. Products found to be defective or non-conforming within such warranty will be repaired or replaced at no charge to Buyer or, at Seller's option, Buyer shall receive the aforesaid refund/credit for the purchase price of such Product. Buyer acknowledges and agrees that Seller shall have no warranty obligations, and Buyer shall not assert any claim against Seller, with respect to defects or non-conformities arising out of (i) modifications to and/or unintended uses of a Product made by Buyer or Buyer's Semiconductor Customers or third parties where such modifications and/or uses have not been previously authorized in writing by Seller, (ii) the improper installation and operation of a Product according to Seller's manual(s) and instruction(s), or (iii) repairs made by Buyer or its agents or Buyer's Semiconductor Customers.
5.2.2 LIMITATIONS OF WARRANTY AND REMEDIES. EXCEPT AS EXPLICITLY STATED IN THIS SECTION 5, SELLER MAKES NO OTHER WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE AND EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3 HEREOF, THE PROVISIONS OF THIS SECTION 5 SHALL BE SELLER'S SOLE AND EXCLUSIVE OBLIGATION WITH REGARD TO DEFECTIVE OR NONCONFORMING PRODUCTS COVERED BY THE WARRANTY.
5.3 INDEMNITY
5.3.1 BY SELLER. Except to the extent Products are manufactured to designs or specifications of Buyer, Seller agrees to indemnify, defend (or, at its option, settle) and hold Buyer, Buyer's officers, directors and employees harmless from liability or damages, costs and attorneys' fees awarded a third party against Buyer for (i) infringement of any U.S. or Japanese patent, copyright, trademark or any trade secret of such third party by the use, manufacture, importation, offering for sale or sale of Products or any part thereof in the form in which such Product was
furnished by Seller to Buyer hereunder and (ii) damages or losses arising
out of or otherwise in connection with the Products delivered by Seller to
Buyer or its Semiconductor Customers hereunder not conforming to the
warranties provided hereunder (I) for injury to or death of any person or
(II) property damage suffered or allegedly suffered by any person or
entity, provided that Buyer has given Seller notice of any such claim or
suit for infringement asserted against Buyer promptly after the date Buyer
first receives any notice of claim of infringement, and Buyer has permitted
Seller to control the defense of such claim or suit. Buyer shall provide
reasonable cooperation and assistance to Seller with respect to such
defenses at Seller's expense. In the case the use or sale of the Product,
or any part thereof, is, or may be, enjoined, Seller will, at its own
expense, and at its option, either: (a) procure for Buyer and Buyer's
Semiconductor Customers the right to continue to sell and use the Product;
or (b) modify the Product, so that it becomes non-infringing; or, if
neither (a) nor (b) is commercially practicable, (c) accept return of the
Product and refund to Buyer the purchase price and the transportation and
installation cost, if any, thereof. In no event shall Seller be liable for
any patent or other infringement to the extent (i) based upon the sale or
use of the Products for purposes other than for which they are sold by
Seller to Buyer, or (ii) for any infringement arising out of any
modification to a Product by Buyer, Buyer's Semiconductor Customers or
third parties where such modification has not been expressly previously
authorized in writing by Seller. The foregoing shall constitute the sole
liability of Seller to Buyer (or those asserting claims through or on
behalf of Buyer) for patent or other intellectual property infringement.
5.3.2 BY BUYER. (a) With respect to any designs or specifications which Buyer provides to Seller and requests Seller to use or incorporate in connection with the manufacture or sale of Products, and/or with respect to any modification made by Buyer to the Product, Buyer agrees to indemnify, defend (or, at its option, settle) and hold Seller and Seller's officers, directors and employees, harmless from any liability for damages, costs and attorneys' fees awarded a third party against Seller for infringement of any U.S. or Japanese patent, copyright, trademark or any trade secret of such third party by the use, manufacture, importation, offering for sale or sale of Products, provided that Seller has given Buyer notice of any such claim or suit for infringement asserted against Seller promptly after the date Seller first receives any notice of claim of infringement, and Seller has permitted Buyer to control the defense of such suit. Seller shall provide reasonable cooperation and assistance to Buyer with respect to such defense at Buyer's expense. In the case the use or sale of such designs or specifications, or any part thereof, is, or may be, enjoined, Seller shall cease all use, manufacture, having manufactured, importation, offering for sale and sale of any products utilizing such designs or specifications.
(b) The Buyer agrees to defend, indemnify and hold harmless Seller and
its Affiliates and its officers, directors, employees, successors and
assigns from and against any and all losses, demands, claims, liabilities,
obligations and expenses (including punitive damages) incurred by or
threatened against Seller and its Affiliates and its officers, directors,
employees, successors and assigns, due to claims by the Buyer or any third
party (including, but not limited to Semiconductor Customers and any agents
or distributors) arising out of any act or omission of the Buyer,
including, but not limited to, (i) modifications to and/or unintended uses
of a Product made by Buyer or its subcontractors where such modifications
and/or uses have not been previously authorized in writing by Seller, (ii)
the improper installation of a Product by Buyer or its subcontractors or
(iii) repairs of a Product made by Buyer or its subcontractors, in each
case solely to the extent that Buyer's or its subcontractors' act or
omission was a contributing cause of the damage or loss, whether or not the
claim arose during the term of, or after the expiration or termination of
this Agreement.
5.3.3 APPORTIONMENT. In the event a claim is based partially on an indemnified claim described in Sections 5.3.1 or 5.3.2 above and partially on a non-indemnified claim, or is based partially on a claim indemnified by Seller pursuant to Section 5.3.1 above and partially on a claim indemnified by Buyer pursuant to Section 5.3.2 above, any payments and reasonable attorney fees
incurred in connection with such claims are to be apportioned between the parties in accordance with the degree of cause attributable to each party.
5.4 LAWS AND REGULATIONS. Seller represents and warrants that all the Products have been or shall be produced, packaged and delivered in compliance with the applicable requirements of federal, state and local laws, regulations, ordinances and administrative orders and rules of the United States and all other countries in which the Products are produced, packaged or delivered. Seller shall secure any and all permits, governmental licenses and inspections necessary for the manufacture and delivery of the Products hereunder.
5.5 NO WAIVER. Acceptance, inspection or payment by Buyer shall in no event constitute a waiver of Buyer's rights and remedies with regard to any subsequently discovered defect or nonconformity.
5.6 COMPLIANCE. Throughout the term of this Agreement, for all Products that Seller, on or prior to the Effective Date, tested, certified and supplied with a Declaration of Conformance or Declaration of Incorporation in conformance with the requirements for any CE marked product, Seller shall continue to perform such testing, certification and supply to Buyer. For all other Products, such testing and certification shall be performed as agreed in the Development Agreement for such Product.
6. WARRANTY AND SUPPORT SERVICES
6.1 BUYER SERVICES.
6.1.1 REPAIR AND WARRANTY SUPPORT SERVICES. During the applicable
warranty period or any subscription by a Semiconductor Customer to
post-warranty support services from Buyer, Buyer will (i) provide phone or
other technical support to Semiconductor Customers to whom Buyer has sold
Products, (ii) inspect, remove and replace Products with applicable FRUs or
replacement units from its Parts inventory first and then as provided by
Seller, (iii) where agreed by Seller, repair Products in exchange for
payment of a mutually agreed fee by Seller on a case by case basis, (iv)
accept provision of retrofits from Seller and assist the Semiconductor
Customer with the installation of such retrofits at Buyer's standard
professional services rates to be paid by Seller, (v) if Buyer and Seller
do not agree that Buyer shall repair a Product, or if Buyer cannot repair
such Product, return the Product to Seller as contemplated by Section 6.4
below and (vi) such sales and other support as Buyer and Seller may agree
on a case by case basis, with or without additional fees payable by Seller
as may be agreed by the parties in each case (collectively, the "BUYER
SERVICES"). Buyer shall perform the Buyer Services in a professional and
workmanlike manner and in accordance with generally accepted industry
standards. The repair and warranty services set forth in Section 6.1.1
(ii), (iii) and (iv) shall be performed only by authorized repair personnel
who have been trained by Seller and pursuant to Seller's rules and
procedures for inspection, diagnosis and repair provided at the time of
Seller's training. In the event that Buyer has undertaken the repair of a
Product and is unable to complete such repair, then Seller shall have no
obligation to pay Buyer for such repair services.
6.1.2 INVENTORY AND SPARES. Buyer shall stock, and Seller shall supply, sufficient inventory of Parts and FRUs to meet Buyer's and Seller's warranty obligations under this Agreement or to Semiconductor Customers that purchase Products from Buyer; Seller hereby consents to Buyer utilizing such Parts and FRUs to perform repair, replacement and support services for Semiconductor Customers at (i) for any repair, replacement or support covered by, or within the scope of, Seller's warranties or other support obligations hereunder, Buyer's cost of obtaining the applicable spares and replacements plus services rates to be agreed upon by the parties from time to time for Buyer's (or its subcontractor's) time in performing such services to be paid by Seller within 75 days of receipt of Buyer's invoice and (ii) for any other repair, replacement or support, fees agreed by Buyer and the Semiconductor Customer. If Buyer and Seller cannot agree on services
rates for a repair under clause (i) of this Section 6.1.2, then Buyer will not be obligated to perform the repair services and may return the applicable Product to Seller for repair.
6.2 SELLER SERVICES. Seller will provide the following services to Buyer ("SELLER SERVICES"):
6.2.1 TRAINING. Seller will provide Buyer with training, at Seller's facility in Japan, to the extent necessary for Buyer to provide the Buyer Services to Semiconductor Customers. Such training shall be at Seller's expense. Such training shall be provided in English. Buyer shall be responsible for its own travel, lodging and other expenses in attending such training.
6.2.2 DOCUMENTATION. Seller shall provide Buyer with information and service instructions and all documentation, manuals and spare parts lists that relate to Seller's Products, as in effect from time to time. All such documentation shall be provided in English. Product information shall be provided in English units and metric units. Notwithstanding the foregoing, for existing Products sold to existing customers, documentation and product information will be provided in a manner consistent with the standard practice in effect for such customer prior to the Effective Date, unless the customer requests otherwise.
6.2.3 SPARES. Buyer shall stock sufficient spare Products, FRUs and Parts as needed to meet all of Seller's warranty and repair services obligations under this Agreement, subject to Seller's supply of such Products, FRUs and Parts as contemplated by Section 6.1 above and Seller's provision of training as contemplated by this Section 6.2.
6.2.4 UPGRADES. Seller shall provide upgrades from time to time as agreed on a customer by customer basis, at mutually agreed rates.
Seller agrees that Seller will perform the Seller Services in a professional and workmanlike manner and in accordance with generally accepted industry standards.
6.3 INSPECTION AND TEST AT SELLER'S FACILITIES. All Products purchased by Buyer are subject to inspection and test procedures, as set forth in the Specification for the Product or as otherwise agreed by the parties in writing, and conducted by Seller, and, if Buyer so elects, also observed by Buyer, before to the applicable Products are shipped from Seller's factory. Inspection and test requirements will be agreed in writing by the parties. Seller shall provide Buyer with written certification that the Product tested has passed the final inspection and complies in all respects with the requirements described in the Specifications. From time to time, Buyer's Semiconductor Customers may request the right to review Seller's facilities and operations for the purpose of qualification and inspection of the Products. Seller agrees to permit such Semiconductor Customer surveys. Buyer shall provide Seller with written notice of such request. Such notice shall contain the names of the individuals making the visit, and the desired date of the visit. Buyer is permitted to accompany the Semiconductor Customer during these Semiconductor Customer surveys. Notwithstanding any inspection and testing at Seller's premises, all Products purchased by Buyer are subject to Buyer's inspection and test (qualification) at Buyer's or its Semiconductor Customer's premises before final acceptance ("Final Acceptance Testing"). Final Acceptance Testing requirements will be agreed in writing by the parties.
6.4 NOTIFICATION; PRODUCT RETURNS. During the applicable warranty period or any support subscription period, Buyer shall notify Seller promptly in writing of any alleged defect in a Product, with specificity. If Buyer and Seller agree that such defect requires that Buyer provide such Product to Seller for repair and/or replacement (such agreement not to be unreasonably withheld), then Seller shall provide an RMA number for such Product within twenty-four hours of such agreement. Seller acknowledges and agrees that more complicated repairs will often need to be performed by Seller, particularly in the first few years of this Agreement as Buyer becomes more familiar with the repair of Yaskawa Products. Upon receipt of such
RMA number, Buyer will forward the defective Product to Seller, FCA Buyer's
North American facility, with written specifications of the claimed defect. If
the defect is under warranty or under a current support subscription
contemplated in Section 6.5 below, Seller will ship the repaired or replaced
Product to Buyer, as quickly as is practical, but not later than 20 Business
Days from the date Seller received the Product from Buyer or Synetics Solutions,
Inc. If the average timeframe for completion of such repair or replacement by
Seller of all Products then in Seller's possession or control exceeds 20
Business Days at any point during the term of this Agreement, Seller and Buyer
shall promptly review and discuss (whether in person or by phone or e-mail) the
reasons for such delay and, unless Seller can demonstrate that there are good
reasons for the delay that are outside of the reasonable control of Seller, then
Buyer shall have the right to deliver, and Seller shall promptly acknowledge in
writing, debit memos (which memos shall be sufficient to transfer title in the
applicable Products from Buyer to Seller until return of the repaired Products
to Buyer and put such Products on Seller's books and remove such Products from
Buyer's books) to Seller for all Products then in inventory as a result of such
delays and all Products that are subsequently not repaired or replaced in the
required 20 Business Day period. If Seller is subject to debit memos under this
Section 6.4 but completes repairs so that the average timeframe for completion
of such repair or replacement by Seller of all Products then in Seller's
possession or control no longer exceeds 20 Business Days, the Buyer will issue
no further debit memos for additional Products under repair unless and until
Seller again exceeds the 20 Business Days threshold, in which case the above
debit memo process shall repeat. During the applicable warranty or support
subscription period, Seller shall be responsible for all freight charges and
duties in connection with the return of a Product under this Section 6.4 and
shipment of the repaired or replaced Product to Buyer. Seller's warranty period
for a Product shall toll during repair of a Product by either Seller or Buyer
and shall restart upon either Buyer's completion of the fix for such Product or
Seller's shipment of the repaired Product back to Buyer or its Semiconductor
Customer.
6.5 SUPPORT AVAILABILITY; POST-WARRANTY SUPPORT. Seller shall maintain support capabilities for each Product for a period of 5 years following the delivery date of the last such Product hereunder. On a Product by Product basis, post-warranty services that are identical to the warranty services applicable during the applicable warranty period will be provided to Buyer by Seller on an annual subscription basis and shall be provided in accordance with terms and conditions as may be negotiated in good faith between Seller and Buyer from time to time.
7. EMBEDDED SOFTWARE LICENSE AND CONFIDENTIAL INFORMATION.
7.1 EMBEDDED SOFTWARE LICENSE. The software included in the Products (the "EMBEDDED SOFTWARE") is licensed and not sold. Seller hereby grants to Buyer a non-exclusive, royalty-free, perpetual license to use the Embedded Software only in the operation of the Product in which it was delivered. Such Embedded Software may not be copied for use in any equipment other than the Products. Copies may be made for archival purposes only. Such Embedded Software and any copies thereof, and all copyright, trade secret, patent, trademark and other intellectual or industrial property rights therein ("EMBEDDED SOFTWARE RIGHTS"), is and shall remain the sole property of Seller. The ideas and the expressions thereof contained in the Embedded Software are confidential and proprietary information and trade secrets of Seller and/or its licensors that are disclosed to Buyer in confidence. Buyer shall not cause or permit reverse engineering, disassembly or decompilation of the Embedded Software or disclosure, copying, display, loan, publication, transfer of possession (whether by sale, exchange, gift, operation of law or otherwise) or other dissemination of the Embedded Software, in whole or in part, to any third party without prior written consent of Seller. Buyer shall not modify, enhance or otherwise change or supplement the Embedded Software. Buyer will be permitted to sublicense to Semiconductor Customers the Embedded Software solely for the operation of the Products sold by Buyer to Semiconductor Customers hereunder, provided that the sublicense is effected by agreement signed before the Embedded Software is provided and only if the sublicense includes the same provisions as used herein.
7.2 CONFIDENTIALITY. Each party ("RECEIVING PARTY") agrees to keep confidential and not disclose or use except in performance of its obligations under this Agreement, confidential or proprietary information related to the other party's ("DISCLOSING PARTY") technology or business that the Receiving Party learns in connection with this Agreement and any other information received from the other, including without limitation, to the extent previously, currently or subsequently disclosed to the Receiving Party hereunder or otherwise, information relating to products or technology of the Disclosing Party or to the Disclosing Party's business (including, without limitation data, know-how, processes, ideas, inventions (whether patentable or not), all information relating to customers and customer transactions and other technical, business, financial, customer and product development plans, forecasts, strategies and information), all of the foregoing, "CONFIDENTIAL INFORMATION". Confidential Information shall not include information the Receiving Party can document (a) is in or (through no improper action or inaction by the Receiving Party or any affiliate, agent or employee) enters the public domain (and is readily available without substantial effort), or (b) was rightfully in the Receiving Party's possession or known by it prior to receipt from the Disclosing Party, or (c) was rightfully disclosed to the Receiving Party by another person without restriction, or (d) was independently developed by the Receiving Party by persons without accessing such information and without use of any Confidential Information of the Disclosing Party. Each party, with prior written notice to the Disclosing Party, may disclose such Confidential Information to the minimum extent possible that is required to be disclosed to a governmental entity or agency in connection with seeking any governmental or regulatory approval, or pursuant to the lawful requirement or request of a governmental entity or agency, provided that reasonable measures are taken to guard against further disclosure, including without limitation, seeking appropriate confidential treatment or a protective order, or assisting the other party to do so. Each party shall use reasonable precautions to protect the other's Confidential Information and employ at least those precautions that such party employs to protect its own confidential or proprietary information.
8. TERM AND TERMINATION.
8.1 TERM. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect for a period of 10 years thereafter ("Initial Term"). At any time, at least 36 months prior to end of the Initial Term or any renewal term, each party shall send written notice to the other party of its intentions concerning its business relating to the Products and its interest in extending the Agreement. If both parties have expressed an interest in extending the current term of the Agreement by written notice to the other, then the then-current term shall be automatically extended for an additional five-year term. If one party has expressed an interest in allowing the Agreement to expire or in modifying the Agreement or has failed to provide notice, then the Agreement shall terminate at the end of the then-current term, unless the Agreement is extended and/or modified by the mutual written agreement of the parties.
8.2 TERMINATION. Notwithstanding the foregoing, and in addition to any other rights of termination set forth herein, this Agreement may be terminated prior to the expiration of the term upon or after the occurrence of any of the following events upon written notice to the other party, which notice shall specify the reason for termination and the effective date of such termination:
8.2.1 BREACH. By Seller if (A) Buyer has committed a Major Breach of this Agreement, (B) Buyer has not cured such Major Breach within 60 calendar days of receiving a notice of breach from Seller for such Major Breach, and (C) the parties have not been able to agree upon an adequate remedy (other than termination); or
8.2.2 BANKRUPTCY. By either party if a court of competent jurisdiction shall enter an order, judgment or decree appointing a custodian, receiver, trustee, liquidator or conservator of the other party, or approve a petition filed against the other party seeking reorganization or arrangement or any similar relief under the federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof or of the country in which Seller or Buyer is located, or, if under the provisions of any
other law for the relief or aid of debtors, a court of competent jurisdiction shall assume custody or control of the other party and such proceeding or petition remains undismissed for a period of 60 days.
8.2.3 CHANGE OF CONTROL. By Seller in the event of a Change of Control of Buyer; provided that, in the event of such a termination, this Agreement shall remain in full force and effect for a period of two years from Buyer's receipt of notice of such termination from Seller so that Buyer may continue to meet the expectations and Product demands of its Semiconductor Customers.
8.3 OBLIGATIONS UPON TERMINATION. The termination of this Agreement shall not discharge, affect, or otherwise modify the rights and obligations of parties established or incurred prior to the termination hereof or the right of either party to pursue any and all legal remedies it may have against the other party and such remedies shall survive the termination of the Agreement.
9. NON-COMPETITION AND NON-SOLICITATION.
9.1 NON-COMPETITION. During the term of this Agreement and for any remainder period set forth in the following sentence of this Section 9.1, (i) neither Seller nor any of its Affiliates shall knowingly offer and/or sell, directly or indirectly, any Yaskawa Products to Semiconductor Customers (other than any OEM) and (ii) neither Seller nor any of its Affiliates shall knowingly offer and/or sell, directly or indirectly, Brooks Products to any Semiconductor Customer (other than any OEM). If this Agreement is terminated by Buyer pursuant to Section 8.2 during the Initial Term or any renewal term, the rights and obligations of both parties pursuant to this Section 9.1 shall continue in full force and effect until the date on which such Initial Term or renewal term would have expired absent any termination pursuant to Section 8.2 above. If this Agreement is terminated by Seller pursuant to Section 8.2, then Seller shall have no obligation under this Section 9.1.
9.2 NON-SOLICITATION. During the term of this Agreement and for a period of 1 year after expiration or termination of this Agreement, neither party will employ, attempt to employ or solicit the employment of, any employee of or consultant to of the other party or otherwise induce or attempt to induce any employee of or consultant to leave the employ of other.
10. MISCELLANEOUS.
10.1 INTELLECTUAL PROPERTY. Seller shall have the sole ownership of Intellectual Property relating to the Products sold by Seller hereunder and the sole right to obtain, hold and renew, in its own name and/or for its own benefit, patents, copyrights, trademarks, trade secrets, registrations and/or other appropriate protection with respect to any of the Products sold by Seller hereunder. As used herein, "INTELLECTUAL PROPERTY" means any and all patents and rights to patent, copyrights, trademarks, trade secrets, Confidential Information of Seller, know-how and proprietary information of any kind or nature whatsoever. Buyer stipulates and agrees that under this Agreement Buyer will acquire no right, title or interest in or to any of such Intellectual Property, except as expressly provided in writing by the parties.
10.2 AUTHORITY. By signing this document, the undersigned represent that they have been duly authorized to execute this document on behalf of their respective corporations.
10.3 COUNTERPARTS. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other.
10.4 GOVERNING LAW; ARBITRATION. This Agreement shall be governed by and in accordance with the internal laws of the State of New York, excluding: (i) its conflicts of laws principles; (ii) the United Nations Convention on Contracts for the International Sale of Goods; (iii) the 1974 Convention on the Limitation Period in the International Sale of Goods (the "1974 Convention"); and (iv) the Protocol
amending the 1974 Convention, done at Vienna April 11, 1980. Any disputes under this Agreement shall be resolved through the process set forth in Article 11 of the Shareholders' Agreement by and between Buyer and Seller and dated of even date herewith, which Article 11 is hereby incorporated by reference and shall be effective as if set forth in full herein.
10.5 LIMITATION AND DISCLAIMER OF LIABILITY.
(a) EXCEPT WITH RESPECT TO: (1) EITHER PARTY'S BREACH OF CONFIDENTIALITY OBLIGATIONS, (2) DAMAGES ARISING FROM EITHER PARTY'S VIOLATION OF THE INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY OR (3) INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION 5.3.1(ii)(II)) AND SECTION 5.3.2(A)HEREUNDER WITH RESPECT TO DAMAGES OR LOSSES, NEITHER PARTY SHALL BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT OR ANY PURCHASE ORDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY,
IN NO EVENT WILL EITHER PARTY OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES,
CUSTOMERS AND AGENTS, INCUR ANY LIABILITY RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR THE PRODUCTS, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN
CONTRACT, WARRANTY, RELIANCE, TORT (INCLUDING NEGLIGENCE) OR OTHER LEGAL THEORY,
EXCEEDING IN THE AGGREGATE UNDER THIS AGREEMENT (I) $5,000,000 PER CLAIM NOR
(II) $10,000,000 IN THE AGGREGATE IN ANY CALENDAR YEAR. HOWEVER, FOR
INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION
5.3.1(ii)(II)) AND SECTION 5.3.2(A) AND FOR CORPORATE WILLFUL MISCONDUCT OF A
PARTY, THERE IS NO LIMITATION ON THE AMOUNT OF SUCH PARTY'S LIABILITY.
10.6 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended, nor will it be construed, to confer any rights or benefits upon any person (including, but not limited to, any employee or former employee of Buyer or Seller) other than the parties to this Agreement, and no other person will have any rights or remedies under this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement and the Schedule(s) annexed hereto, contain the entire agreement between the parties with respect to its subject matter, and there are no agreements or understandings between the parties other than those set forth or referred to in this Agreement, and in the various Schedules and/or attachments to same, and other than any such agreements or understandings which expressly provide otherwise by specific reference to this Agreement.
10.8 EXPENSES. Except as set forth in this Agreement, all legal and other costs and expenses incurred in connection with this Agreement will be paid by the party incurring such costs and expenses.
10.9 FORCE MAJEURE. Neither party shall be responsible for any delay or failure to perform any provision of this Agreement arising from causes beyond its reasonable control, including, without limitation, labor disputes, civil commotion, war, (declared or undeclared), riot, severe weather, heavy snow, floods, acts of God, governmental rules, laws, requisitions, mobilizations, embargoes, fires, explosions, shortages of transportation, inability to obtain freight space, unavailability of raw materials and restrictions on the use of power. The party relying on this paragraph as an excuse for nonperformance of its obligations hereunder shall use all reasonable efforts promptly to remove or remedy the cause giving rise to such nonperformance.
10.10 NOTICES. All notices hereunder shall be in writing and delivered personally, by documented overnight courier delivery service or by fax (with confirmation of receipt), in each case, to the appropriate address or number as set forth below.
IF TO BUYER: IF TO SELLER Brooks Automation, Inc. Yaskawa Electric Corporation 15 Elizabeth Drive 2-1 Kurosaki-shiroishi, Yahatanishi-ku Chelmsford, Massachusetts Kitakyushu 806-0004 Japan 01824 U.S.A. Attention: Koki Nakamura Attention: Thomas Grilk, Esq. Fax: +81.93.645.7918 Fax: 1.978.262.2511 WITH COPY TO: WITH COPY TO: WilmerHale 60 State Street Masuda, Funai, Eifert & Mitchell, Ltd. Boston, Massachusetts 02109 203 N. LaSalle Street, Suite 2500 Attention: Mark G. Borden Chicago, IL 60601-1262 Fax: +1.617.526.5000 Attention: Mary W. Shellenberg Fax: +1.312.245.7467 |
or to such other address and/or to the attention of such other person as the intended recipient may designate by written notice in accordance with this provision. Notices shall be effective upon receipt.
10.11 NONASSIGNMENT. Neither this Agreement, nor any right, duty, term or obligation thereof, may be assigned by either party to any individual or entity, without the prior written consent of the other party hereto. For the purposes of this Agreement, a change of control of a party, including through a sale or transfer of all or a portion of such party's voting securities shall not constitute an assignment. This Agreement shall be binding upon and inure to the benefit of the parties' successors and assigns.
10.12 HEADINGS; DEFINITIONS. The Section headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of the Agreement. All references to Sections contained herein mean Sections of this Agreement unless otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms.
10.13 AMENDMENTS AND WAIVERS. This Agreement may not be modified or amended except by instrument or instruments in writing signed by the party against whom enforcement of the modification or amendment is sought. Wavier of compliance with any term or provision of this Agreement must be in writing. Waiver of a breach of any term or provision of this Agreement will not be construed as a waiver of any subsequent breach. Consummation of the transactions contemplated by this Agreement will not constitute a waiver of any prior breach of the Agreement.
10.14 SEVERABILITY. If at any time any provision of this Agreement is or becomes illegal, invalid, void or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity, or enforceability of the remaining provisions hereof nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired thereby, and the remainder of the provisions of this Agreement will remain in full force and effect. The parties will endeavor in good faith negotiations to replace any invalid, illegal, void or unenforceable provision with a valid, legal and enforceable provision, the effect of which comes as close as possible to the invalid, illegal, void or unenforceable provision.
IN WITNESS WHEREOF, the parties have caused this U.S. ROBOT SUPPLY AGREEMENT to be executed by their duly authorized representative on the date set forth above.
BROOKS AUTOMATION, INC. YASKAWA ELECTRIC CORPORATION By: /s/ Edward C. Grady By: /s/ Koji Toshima --------------------------------- ------------------------------------ Title: President Title: President ------------------------------ --------------------------------- |
EX-10.03
EXECUTION COPY
BROOKS JAPAN ROBOT
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (this "AGREEMENT") is made as of June 30, 2006 (the "SIGNING DATE"), by and between YASKAWA BROOKS AUTOMATION, INC. a Japanese corporation having its principal business office at 2-1 Kurosaki-shiroishi, Yahatanishi-ku, Kitakyushu 806-0004 Japan ("BUYER") and BROOKS AUTOMATION, INC., a Delaware corporation, having its principal business office at 15 Elizabeth Drive, Chelmsford, MA 01824 ("SELLER").
WHEREAS, Seller is engaged in, among other things, the business of developing, designing, manufacturing and selling various semiconductor robotic products; and
WHEREAS, Buyer is engaged in the business of selling various integrated automation and subsystems for the semiconductor wafer manufacturing and related industries to Japanese based enterprises; and
WHEREAS, Buyer is a joint venture established by Seller and Yaskawa
Electric Corporation, a Japanese corporation having its principal business
office at 2-1 Shiroishi, Kurosaki, Yahatanishi-ku, Kitakyushu, Japan ("YASKAWA")
pursuant to a Joint Venture Agreement dated May 8, 2006 (the "JV AGREEMENT") and
a Shareholders Agreement dated as of the Signing Date (the "SHAREHOLDERS'
AGREEMENT"); and
WHEREAS, Seller and Buyer desire to enter into an agreement whereby Seller will supply certain Products (as hereinafter defined) to Buyer for resale.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller and Buyer agree as follows:
1. GRANT OF SALES RIGHTS.
1.1 Definitions.
"AGREEMENT" shall have the meaning set forth in the introductory paragraph to this agreement.
"ASSUMED CUSTOMER PROGRAMS" shall mean Seller's Product programs with Semiconductor Customers as set forth on Schedule B hereto.
"BROOKS PRODUCTS" means all vacuum robotics and other types of products for the Semiconductor Industry that are listed under the heading "Brooks Products" on Schedule A hereto; provided that the definition of "BROOKS PRODUCTS" excludes (i) products specifically targeted to flat panel display automation and motor and motion control products (including tables driven by motion control products) on a stand-alone basis, and (ii) articulated 6 (or more) axis robots.
"BUSINESS DAY" shall mean a day on which banks are open for business in both Boston, Massachusetts and Tokyo, Japan.
"BUYER" shall have the meaning set forth in the introductory paragraph to this Agreement.
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 7.2 hereof.
"CUSTOMER AFFILIATE" shall mean any Subsidiary of a Primary Person, which Primary Person has its principal offices located in Japan, wherever such Subsidiary may be located.
"DELIVERY POINT" shall have the meaning set forth in Section 2.1 hereof.
"EFFECTIVE DATE" means the Operations Commencement Date, as defined in the JV Agreement.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section 10.1 hereof.
"JV AGREEMENT" shall have the meaning set forth in the recitals.
"OEM" means a Primary Person, which does not have its principal offices located in Japan, or any of its Subsidiaries which do not have their principal offices located in Japan, in either case that purchases Products for the purpose of adding value by incorporating Products as a minor component of a larger system that is sold by such Primary Person or its Subsidiaries.
"PERSON" means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association or joint venture.
"PRIMARY PERSON" shall mean a Person that is not under the control of any other Person (other than an individual). A Person shall be deemed to control another Person if the controlling Person owns 50% or more of any class of voting securities (or other ownership interest) of the controlled Person.
"PRODUCTS" means Yaskawa Products and/or Brooks Products, as applicable.
"PURCHASE ORDER" shall have the meaning set forth in Section 3.1 hereof.
"QUARTERLY BUSINESS REVIEW" or "QBR" shall have the meaning set forth in Section 1.3 hereof.
"SCARA" means Selective Compliant Articulated/Assembly Robot Arm.
"SELLER" shall have the meaning set forth in the introductory paragraph to this Agreement.
"SEMICONDUCTOR CUSTOMER" shall mean (i) all Primary Persons with principal offices located in Japan that, either directly or through their Customer Affiliates, are current or prospective purchasers or users of Products and (ii) all Customer Affiliates it being agreed and acknowledged by both parties that Seller shall not knowingly sell Products to any customer (other than any OEM) for the purpose of selling or otherwise distributing such Products to any Person that meets the criteria set forth in clauses (i) or (ii) above.
"SEMICONDUCTOR INDUSTRY" means the design, development, manufacture, assembly, use, sale, repair, installation, testing, quality control, inspection or calibration of equipment or tools (including software), and all components and subassemblies thereof, that are used in the design, development, manufacture, patterning, assembly, testing or packaging of semiconductor,
magnetic media, magnetic storage, and optical devices as well as reticles and masks used in connection therewith.
"SHAREHOLDERS' AGREEMENT" shall have the meaning set forth in the recitals.
"SIGNING DATE" shall have the meaning set forth in the introductory paragraph to this Agreement
"SPECIFICATIONS" shall have the meaning set forth in Section 5.1 hereof.
"SUBSIDIARY" of any Person shall mean each of the Persons that, directly or indirectly, through one or more intermediaries, is owned or controlled by such Person. A Person shall be deemed to control another Person if the controlling Person owns 50% or more of any class of voting securities (or other ownership interest) of the controlled Person.
"YASKAWA PRODUCTS" means all atmospheric SCARA robotics products for the Semiconductor Industry that are under the heading "Yaskawa Products" on Schedule A provided that the definition of "YASKAWA PRODUCTS" (i) excludes products specifically targeted to flat panel display automation and motor and motion control products (including tables driven by motion control products) on a stand-alone basis (ii) excludes articulated 6 (or more) axis robots and (iii) for the avoidance of doubt, excludes Brooks Products.
1.2 GRANT. Seller hereby grants to Buyer the exclusive right to market and distribute the Products to Semiconductor Customers. Buyer shall use its best efforts to promote, sell and service the Brooks Products to the Semiconductor Customers and to maintain adequate facilities and personnel as may be necessary to sell and support the Brooks Products, including, but not limited to, calling on and training Semiconductor Customers, collecting market data and acting as a liaison between the Semiconductor Customer and Seller with respect to Semiconductor Customers' technical, engineering and delivery requirements relating to the Brooks Products. Buyer shall use such efforts to sell Yaskawa Products as Buyer may deem in its best interests from time to time, in its sole discretion. Seller agrees to use commercially reasonable efforts to customize the Brooks Products to promote sales in the Japanese market as Buyer or its Semiconductor Customers may request from time to time. For the avoidance of doubt, the parties acknowledge that Seller shall have the right to market and distribute (i) any products specifically targeted to flat panel display automation and motor and motion control products (such as tables driven by motion control products) on a stand alone basis to any customer, including Semiconductor Customers and (ii) any products, including without limitation the Products, to customers other than Semiconductor Customers.
1.3 QUARTERLY BUSINESS REVIEWS. Buyer and Seller shall appoint key personnel of each party to meet quarterly to discuss the status of the parties' performance under this Agreement relating to Brooks Products, to raise any concerns and to discuss and plan for future business opportunities involving the sale of Brooks Products to Semiconductor Customers (such meetings, herein referred to as "QUARTERLY BUSINESS REVIEWS" or "QBRS"). In such meetings, Buyer and Seller shall use good faith efforts to resolve any disputes or concerns regarding the supply and sale of the Brooks Products to the mutual satisfaction of the parties. For the avoidance of doubt, this Section 1.3 shall not apply to Yaskawa Products.
1.4 DEVELOPMENT OR CUSTOMIZATION. If Buyer and Seller agree that Seller will perform design or development work for Buyer, then a separate design and development agreement will be entered into between the parties, which agreement shall address ownership of resulting intellectual property rights in detail.
2. PRICE AND PAYMENT.
2.1 PRICE. All prices for Products purchased by Buyer under this Agreement shall be agreed by Buyer and Seller on a customer-by-customer, Product-by-Product basis. All prices shall be payable in U.S. dollars, FCA (Incoterms 2000), Seller's plant (the "DELIVERY POINT").
2.2 PAYMENT. Invoices for the Products shall be issued to Buyer upon delivery of the Products to the Delivery Point. Payment shall be made by Buyer by wire transfer to such account as Seller shall designate from time to time in writing to Buyer within one hundred fifty (150) days after delivery of the Products to the Delivery Point. Any amounts not paid within 5 Business Days after the due date for such payment shall bear interest from and after the due date to the date of payment at the rate of 1 1/2 % per month or the highest rate permitted by law, whichever is less, and all such amounts shall be due and payable upon demand by Seller.
3. ORDERS AND FORECASTS.
3.1 PURCHASE ORDERS. "PURCHASE ORDER" shall mean a written or electronic order for the Products or any other equivalent process by which Buyer orders quantities of the Products and spare Parts required to perform repair services from Seller. It is contemplated that, from time to time, Purchase Orders in forms prepared by Buyer, may be used in ordering the Products and that there may be included in such forms certain stipulations, conditions or agreements not otherwise contained herein. It is expressly understood and agreed that the provisions of this Agreement shall be deemed a part of each Purchase Order accepted by Seller and, unless otherwise mutually agreed in writing, any provision in any Purchase Order which is inconsistent with, contrary or in addition to, or which otherwise adversely materially alters or increases Seller's or Buyer's obligations under this Agreement shall be deemed amended or deleted, as the case may be and that the terms of this Agreement shall control. Seller shall ship only the quantities of the Products ordered by Buyer in the applicable Purchase Order, unless otherwise agreed in writing by Buyer and Seller in accordance with Sections 3.3 and 3.4 of this Agreement. All Buyer Purchase Orders shall specify the quantity of the Products, the shipment date, and all other relevant information necessary to effectuate delivery of the Products to the Delivery Point. Seller shall accept all Purchase Orders that are submitted in conformance with this Agreement. Unless otherwise agreed by Buyer and Seller on a case by case basis, Seller will deliver the ordered Products to the Delivery Point eight (8) weeks after receipt of the Purchase Order issued in accordance with the terms of this Agreement; provided, however, that, with respect to quantities of Products ordered under any Purchase Order issued in accordance with the terms of this Agreement that result in a quantity of Product ordered in a given month in excess of 130% of the average amount forecasted for said month in each Buyer forecast provided during the most recent two months of the preceding 6 month forecast period, Seller shall only be bound to a lead time for delivery of such excess quantity of Products on the Purchase Order as Buyer and Seller may agree for such Products on a case by case basis. Except as provided below, no Purchase Order shall be subject to cancellation or reduction after acceptance by Seller. Seller agrees that it shall be responsible for late delivery and quality damages under any Assumed Customer Programs if (i) such damages are the fault of Seller and (ii) Buyer actually is required by a claimant to pay such damages.
3.2 FORECASTS AND PURCHASE ORDER SCHEDULE. In order to meet Buyer's requirements and in order to assist Seller in its supply chain and inventory management, the parties agree to the following forecast and Purchase Order schedule.
DESCRIPTION COMMITMENT ----------- ---------- PURCHASE ORDER LEAD TIMES-Buyer will Binding and subject to cancellation or issue Purchase Orders to Seller not reduction after acceptance by Seller less than 8 weeks prior to the date only in accordance with Section on which shipment of the Products 3.3 below. from the Delivery Point is required. Seller shall not be obligated to accept or fulfill any Purchase Order which is received by Seller less than 8 weeks prior to the date on which shipment is required, unless otherwise agreed by Seller in writing on a case by case basis. SIX (6) MONTH ROLLING FORECAST - At Non-binding forecast for production least every two weeks, Buyer will scheduling purposes only. provide Seller with a good faith forecast of its actual anticipated monthly requirements of the Products for the six month period following the 8 week period covered by Purchase Orders (as set forth above). ANNUAL FORECAST - By no later than Non-binding forecast for planning August 15 of each year, Buyer will purposes only. provide Seller with a forecast of Buyer's anticipated requirements of the Products for each fiscal year of Seller (October 1 through September 30) |
3.3 CANCELLATION. Buyer may cancel a Purchase Order at any time. In such event, the cancelled Products will incur cancellation charges as follows:
Finished Goods: 100% of the then applicable price will be paid in exchange for delivery of the Finished Goods as purchased Product hereunder, it being mutually agreed that Seller will not deliver Finished Goods to Buyer until Seller has successfully completed the pre-shipment testing of such Finished Goods;
WIP: 50% of the then applicable finished goods price attributable to the
WIP;
Raw Material: 0% if returnable to the supplier or Buyer purchases Products utilizing such Raw Material within 6 months of cancellation, but otherwise 100% of the original applicable price attributable to the Raw Material.
"FINISHED GOODS" are defined as completely manufactured and/or assembled Products at the time of the cancellation. "WIP" is defined as incompletely manufactured and/or assembled Products at the time of the cancellation. "RAW MATERIAL" is defined as only those materials needed to make a Part and any purchased Parts. For the purposes of this Agreement, "PART" means a component line item on a bill of materials. Parts are collectively assembled to produce a Product. The above defined cancellation charges are in lieu of any other obligation of Buyer arising as a result of the cancellation. All amounts accrued above are payable within sixty (60) days of Seller's delivery of an invoice to Buyer. Finished Goods will be invoiced upon delivery of the Finished Goods to the Delivery Point.
3.4 RESCHEDULING DELIVERY OF PRODUCTS. Buyer may request rescheduling of the delivery date of any Product scheduled for shipment to the Delivery Point. Rescheduling of Products by Buyer will incur fees as follows:
(i) If Buyer requests an earlier delivery date than the currently scheduled date, Seller must approve or reject the new delivery date. Seller will promptly advise Buyer if it approves or rejects the requested new delivery date, and along with any approval will indicate any additional charges that will be imposed on Buyer as a result of the change.
(ii) If Buyer requests a later delivery date than the currently scheduled date, Seller approval is not required and no additional charges will be imposed on Buyer as a result of such rescheduling; so long as the rescheduled delivery date does not extend more than three months beyond the originally scheduled delivery date. Buyer will use good faith efforts to avoid rescheduling deliveries in a manner that would cause a product to be delivered in a different Seller fiscal quarter than the originally scheduled delivery date.
3.5 COPY EXACT; END OF LIFE.
(a) Copy Exact. Buyer requires that any and all changes to the product and components be submitted to Buyer for review 180 days before the planned cut-in date of the change. Change notification must be processed per a process determined by the Steering Committee of the Buyer.
(b) End of Life. Seller will keep Buyer fully informed relative to the Product roadmap and Product life cycle. Buyer will be notified of end of life at least 12 months (or a lesser time as the parties may agree on a product-by-product basis from time to time) in advance and provided last buy privileges at the time of end of life.
4. SHIPMENT AND RISK OF LOSS.
4.1 SHIPMENT. The standard method of shipment shall be ocean carrier; provided, however, Products will be shipped by air at Buyer's request and expense. Seller shall ship Products or cause Products to be shipped from its manufacturing facilities to the Delivery Point on or before the ship date(s) set forth in the applicable Purchase Order. Prior to shipment, Seller will conduct the pre-shipment testing contemplated by Section 6.3 hereof and will include its standard shipment test report with each shipped Product.
4.2 TITLE. Risk of loss shall pass to Buyer according to Incoterms 2000 "FCA" and title shall transfer concurrently therewith.
5. WARRANTY.
5.1 SPECIFICATIONS. The term "SPECIFICATIONS" shall mean all, or any part, of the detailed description of Products provided with the Product and any other specifications agreed upon by Seller and Buyer. All Specifications shall be in writing.
5.2 WARRANTY.
5.2.1 WARRANTY. Seller warrants that the Products will (i) conform to the Specifications, and (ii) will be free from defects in materials, workmanship and designs (but only as to designs provided by Seller and not designs provided by Buyer) for a period of eighteen (18) months from the date of the bill of lading for such Product. The term of the warranty set forth in the previous sentence shall be shortened or extended to the extent that Buyer has assumed a shorter or longer term warranty under any Assumed Customer Program. This warranty is limited to Buyer, as the original purchaser of the Product, and cannot be assigned or transferred to any third person, without Seller's express, prior written consent, it being agreed and acknowledged that Buyer will make warranties to its
Semiconductor Customers based on Seller's warranties hereunder and that Buyer shall continue to be the beneficiary of the warranties even after Buyer distributes Products to its Semiconductor Customers. No person is authorized to amend or expand this warranty or to grant any other warranty on behalf of Seller. Seller shall not be responsible for any repair, replacement or material charges incurred by Buyer or others within the period of this warranty, or otherwise, unless Seller gives its prior written consent to the incurring or payment of such charges. Seller's sole responsibility and liability with respect to any Product under this warranty shall be, at Seller's option, the repair or replacement of any Product which fails to comply with the terms of this warranty or, in the event Seller determines that such Product cannot be repaired or replaced, the refund to Buyer, through payment or credit, of the purchase price paid by Buyer for such defective or non-conforming Product. At Seller's request, Buyer shall return and/or hold any Product claimed to be defective or non-conforming for inspection, repair or replacement by Seller. Seller shall inspect such Products, and Products found not to be defective or non-conforming shall be returned to Buyer at Buyer's cost and expense. Products found to be defective or non-conforming within such warranty will be repaired or replaced at no charge to Buyer or, at Seller's option, Buyer shall receive the aforesaid refund/credit for the purchase price of such Product. Buyer acknowledges and agrees that Seller shall have no warranty obligations, and Buyer shall not assert any claim against Seller, with respect to defects or non-conformities arising out of (i) modifications to and/or unintended uses of a Product made by Buyer or Buyer's Semiconductor Customers or third parties where such modifications and/or uses have not been previously authorized in writing by Seller, (ii) the improper installation and operation of a Product according to Seller's manual(s) and instruction(s) or (iii) repairs made by Buyer or its agents or Buyer's Semiconductor Customers.
5.2.2 LIMITATIONS OF WARRANTY AND REMEDIES. EXCEPT AS EXPLICITLY STATED IN THIS SECTION 5, SELLER MAKES NO OTHER WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE AND, EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3 HEREOF, THE PROVISIONS OF THIS SECTION 5 SHALL BE SELLER'S SOLE AND EXCLUSIVE OBLIGATION WITH REGARD TO DEFECTIVE OR NONCONFORMING PRODUCTS COVERED BY THE WARRANTY.
5.3 INDEMNITY
5.3.1 BY SELLER. Except to the extent Products are manufactured to
designs or specifications of Buyer, Seller agrees to indemnify, defend (or,
at its option, settle) and hold Buyer, Buyer's officers, directors and
employees and Buyer's Semiconductor Customers harmless from liability or
damages, costs and attorneys' fees awarded a third party against Buyer for
(i) infringement of any U.S. or Japanese patent, copyright, trademark or
any trade secret of such third party by the use, manufacture, importation,
offering for sale or sale of Products or any part thereof in the form in
which such Product was furnished by Seller to Buyer hereunder and (ii)
damages or losses arising out of or otherwise in connection with the
Products delivered by Seller to Buyer or its Semiconductor Customers
hereunder not conforming to the warranties provided hereunder (I) for
injury to or death of any person or (II) property damage suffered or
allegedly suffered by any person or entity, provided that Buyer has given
Seller notice of any such claim or suit for infringement asserted against
Buyer promptly after the date Buyer first receives any notice of claim of
infringement, and Buyer has permitted Seller to control the defense of such
claim or suit. Buyer
shall provide reasonable cooperation and assistance to Seller with respect to such defenses at Seller's expense. In the case the use or sale of the Product, or any part thereof, is, or may be, enjoined, Seller will, at its own expense, and at its option, either: (a) procure for Buyer and Buyer's Semiconductor Customers the right to continue to sell and use the Product; or (b) modify the Product, so that it becomes non-infringing; or, if neither (a) nor (b) is commercially practicable, (c) accept return of the Product and refund to Buyer the purchase price and the transportation and installation cost, if any, thereof. In no event shall Seller be liable for any patent or other infringement to the extent (i) based upon the sale or use of the Products for purposes other than for which they are sold by Seller to Buyer, or (ii) for any infringement arising out of any modification to a Product by Buyer, Buyer's Semiconductor Customers or third parties where such modification has not been expressly previously authorized in writing by Seller. The foregoing shall constitute the sole liability of Seller to Buyer (or those asserting claims through or on behalf of Buyer) for patent or other intellectual property infringement.
5.3.2 BY BUYER. (a) With respect to any designs or specifications which Buyer provides to Seller and requests Seller to use or incorporate in connection with the manufacture or sale of Products, and/or with respect to any modification made by Buyer to the Product, Buyer agrees to indemnify, defend (or, at its option, settle) and hold Seller and Seller's officers, directors and employees, harmless from any liability for damages, costs and attorneys' fees awarded a third party against Seller for infringement of any U.S. or Japanese patent, copyright, trademark or any trade secret of such third party by the use, manufacture, importation, offering for sale or sale of Products, provided that Seller has given Buyer notice of any such claim or suit for infringement asserted against Seller promptly after the date Seller first receives any notice of claim of infringement, and Seller has permitted Buyer to control the defense of such suit. Seller shall provide reasonable cooperation and assistance to Buyer with respect to such defense at Buyer's expense. In the case the use or sale of such designs or specifications, or any part thereof, is, or may be, enjoined, Seller shall cease all use, manufacture, having manufactured, importation, offering for sale and sale of any products utilizing such designs or specifications.
(b) The Buyer agrees to defend, indemnify and hold harmless Seller and
its Affiliates and its officers, directors, employees, successors and
assigns from and against any and all losses, demands, claims, liabilities,
obligations and expenses (including punitive damages) incurred by or
threatened against Seller and its Affiliates and its officers, directors,
employees, successors and assigns, due to claims by the Buyer or any third
party (including, but not limited to Semiconductor Customers and any agents
or distributors) arising out of any act or omission of the Buyer,
including, but not limited to, (i) modifications to and/or unintended uses
of a Product made by Buyer or its subcontractors where such modifications
and/or uses have not been previously authorized in writing by Seller, (ii)
the improper installation of a Product by Buyer or its subcontractors or
(iii) repairs of a Product made by Buyer or its subcontractors, in each
case solely to the extent that Buyer's or its subcontractors' act or
omission was a contributing cause of the damage or loss, whether or not the
claim arose during the term of, or after the expiration or termination of
this Agreement.
5.3.3 APPORTIONMENT. In the event a claim is based partially on an indemnified claim described in Sections 5.3.1 or 5.3.2 above and partially on a non-indemnified claim, or is based partially on a claim indemnified by Seller pursuant to Section 5.3.1 above and partially on a claim indemnified by Buyer pursuant to Section 5.3.2 above, any payments and reasonable attorney fees incurred in connection with such claims are to be apportioned between the parties in accordance with the degree of cause attributable to each party.
5 .4 LAWS AND REGULATIONS. Seller represents and warrants that all the Products have been or shall be produced, packaged and delivered in compliance with the applicable requirements of federal, state and local laws, regulations, ordinances and administrative orders and rules of the United States and all other countries in which the Products are produced, packaged or delivered. Seller shall secure any and all permits, governmental licenses and inspections necessary for the manufacture and delivery of the Products hereunder.
5.5 NO WAIVER. Acceptance, inspection or payment by Buyer shall in no event constitute a waiver of Buyer's rights and remedies with regard to any subsequently discovered defect or nonconformity.
5.6 COMPLIANCE. Throughout the term of this Agreement, for all Products that Seller, on or prior to the Signing Date, tested, certified and supplied with a Declaration of Conformance or Declaration of Incorporation in conformance with the requirements for any CE marked product, Seller shall continue to perform such testing, certification and supply to Buyer. For all other Products, such testing and certification shall be performed as agreed in the Development Agreement for such Product.
6. WARRANTY AND SUPPORT SERVICES
6.1 BUYER SERVICES.
6.1.1 REPAIR AND WARRANTY SUPPORT SERVICES. During the applicable warranty period or any subscription by a Semiconductor Customer to post-warranty support services from Buyer, Buyer will (i) provide phone or other technical support to Semiconductor Customers to whom Buyer has sold Products, (ii) inspect, remove and replace Products with applicable FRUs or replacement units provided by Seller, (iii) where agreed by Seller, repair Products in exchange for payment of a mutually agreed fee by Seller on a case by case basis, (iv) accept provision of retrofits from Seller and assist the Semiconductor Customer with the installation of such retrofits at Buyer's standard professional services rates to be paid by Seller, (v) if Buyer and Seller do not agree that Buyer shall repair a Product, or if Buyer cannot repair such Product, return the Product to Seller as contemplated by Section 6.5 below and (vi) such sales and other support as Buyer and Seller may agree on a case by case basis, with or without additional fees payable by Seller as may be agreed by the parties in each case (collectively, the "BUYER SERVICES"). Buyer agrees that Buyer will perform the Buyer Services in a professional and workmanlike manner and in accordance with generally accepted industry standards. The repair and warranty services set forth in Section 6.1.1 (ii), (iii) and (iv) shall be performed only by authorized repair personnel who have been trained by Seller and pursuant to Seller's rules and procedures for inspection, diagnosis and repair provided at the time of Seller's training. In the event that Buyer has undertaken the repair of a Product and is unable to complete such repair, then Seller shall have no obligation to pay Buyer for such repair services. For the avoidance of doubt, "Buyer Services" shall not include any services relating to Products sold by Seller to Semiconductor Customers in any manner other than through Buyer pursuant to this Agreement, unless (i) Seller requests that Buyer provide Buyer Services for such Products on a case by case basis and (ii) Buyer and Seller agree in writing on fees payable by Seller to Buyer for the provision of such Buyer Services.
6.1.2 INVENTORY AND SPARES. Buyer shall stock, and Seller shall supply, sufficient inventory of Parts and FRUs to meet Buyer's and Seller's warranty obligations under this Agreement or to Semiconductor Customers that purchase Products from Buyer; Seller hereby consents to Buyer utilizing such Parts and FRUs to perform repair, replacement and support services for Semiconductor Customers at (i) for any repair, replacement or support covered by, or within the scope of, Seller's warranties or other support obligations hereunder, Buyer's cost of obtaining the applicable spares and replacements plus services rates to be agreed upon by the parties from time to
time for Buyer's (or its subcontractor's) time in performing such services to be paid by Seller within 75 days of receipt of Buyer's invoice and (ii) for any other repair, replacement or support, fees agreed by Buyer and the Semiconductor Customer. If Buyer and Seller cannot agree on services rates for a repair under clause (i) of this Section 6.1.2, then Buyer will not be obligated to perform the repair services and may return the applicable Product to Seller for repair.
6.2 SELLER SERVICES. Seller will provide the following services to Buyer ("SELLER SERVICES"):
6.2.1 TRAINING. Seller will provide Buyer with training, at Seller's facility in the United States, to the extent necessary for Buyer to provide the Buyer Services to Semiconductor Customers. Such training shall be at Seller's expense. Such training shall be provided in English. Buyer shall be responsible for its own travel, lodging and other expenses in attending such training.
6.2.2 DOCUMENTATION. Seller shall provide Buyer with information and service instructions and all documentation, manuals and spare parts lists that relate to Seller's Products, as in effect from time to time. All such documentation shall be provided in Japanese. Product information shall be provided in both English units and metric units. Notwithstanding the foregoing, for existing Products sold to existing customers, documentation and product information will be provided in a manner consistent with the standard practice in effect for such customer prior to the Effective Date, unless the customer requests otherwise.
6.2.3 SPARES. Buyer shall stock sufficient spare Products, FRUs and Parts as needed to meet all of Seller's warranty and repair services obligations under this Agreement, subject to Seller's supply of such Products, FRUs and Parts as contemplated by Section 6.1 above and Seller's provision of training as contemplated by this Section 6.2.
6.2.4 UPGRADES. Seller shall provide upgrades from time to time as agreed on a customer by customer basis, at mutually agreed rates.
Seller agrees that Seller will perform the Seller Services in a professional and workmanlike manner and in accordance with generally accepted industry standards.
6.3 INSPECTION AND TEST AT SELLER'S FACILITIES. All Products purchased by Buyer are subject to inspection and test procedures, as set forth in the Specification for the Product or as otherwise agreed by the parties in writing, and conducted by Seller, and, if Buyer so elects, also observed by Buyer, before to the applicable Products are shipped from Seller's factory. Inspection and test requirements will be agreed in writing by the parties. Seller shall provide Buyer with written certification that the Product tested has passed the final inspection and complies in all respects with the requirements described in the Specifications. From time to time, Buyer's Semiconductor Customers may request the right to review Seller's facilities and operations for the purpose of qualification and inspection of the Products. Seller agrees to permit such Semiconductor Customer surveys. Buyer shall provide Seller with written notice of such request. Such notice shall contain the names of the individuals making the visit, and the desired date of the visit. Buyer is permitted to accompany the Semiconductor Customer during these Semiconductor Customer surveys. Notwithstanding any inspection and testing at Seller's premises, all Products purchased by Buyer are subject to Buyer's inspection and test (qualification) at Buyer's or its Semiconductor Customer's premises before final acceptance ("Final Acceptance Testing"). Final Acceptance Testing requirements will be agreed in writing by the parties.
6.4 NOTIFICATION; PRODUCT RETURNS. During the applicable warranty period or any support subscription period, Buyer shall notify Seller promptly in writing of any alleged defect in a Product, with
specificity. If Buyer and Seller agree that such defect requires that Buyer provide such Product to Seller for repair and/or replacement (such agreement not to be unreasonably withheld), then Seller shall provide an RMA number for such Product within twenty-four hours of such agreement. Seller acknowledges and agrees that more complicated repairs will often need to be performed by Seller, particularly in the first few years of this Agreement as Buyer becomes more familiar with the repair of Brooks Products. Upon receipt of such RMA number, Buyer will forward the defective Product to Seller, FCA Buyer's North American facility, with written specifications of the claimed defect. If the defect is under warranty or under a current support subscription contemplated in Section 6.5 below, Seller will ship the repaired or replaced Product to Buyer, as quickly as is practical, but not later than 20 Business Days from the date Seller received the Product from Buyer. If the average timeframe for completion of such repair or replacement by Seller of all Products then in Seller's possession or control exceeds 20 Business Days at any point during the term of this Agreement, Seller and Buyer shall promptly review and discuss (whether in person or by phone or e-mail) the reasons for such delay and, unless Seller and Buyer mutually agree that there are good reasons for the delay that are outside of the reasonable control of Seller, then Buyer shall have the right to deliver, and Seller shall promptly acknowledge in writing, debit memos (which memos shall be sufficient to transfer title in the applicable Products from Buyer to Seller until return of the repaired Products to Buyer and put such Products on Seller's books and remove such Products from Buyer's books) to Seller for all Products then in inventory as a result of such delays and all Products that are subsequently not repaired or replaced in the required 20 Business Day period. If Seller is subject to debit memos under this Section 6.4 but completes repairs so that the average timeframe for completion of such repair or replacement by Seller of all Products then in Seller's possession or control no longer exceeds 20 Business Days, the Buyer will issue no further debit memos for additional Products under repair unless and until Seller again exceeds the 20 Business Days threshold, in which case the above debit memo process shall repeat. During the applicable warranty or support subscription period, Seller shall be responsible for all freight charges and duties in connection with the return of a Product under this Section 6.4 and shipment of the repaired or replaced Product to Buyer. Seller's warranty period for a Product shall toll during repair of a Product by either Seller or Buyer and shall restart upon either Buyer's completion of the fix for such Product or Seller's shipment of the repaired Product back to Buyer or its Semiconductor Customer.
6.5 SUPPORT AVAILABILITY; POST-WARRANTY SUPPORT. Seller shall maintain support capabilities for each Product for a period of 5 years following the delivery date of the last such Product hereunder. On a Product by Product basis, post-warranty services that are identical to the warranty services applicable during the applicable warranty period will be provided to Buyer by Seller on an annual subscription basis and shall be provided in accordance with terms and conditions as may be negotiated in good faith between Seller and Buyer from time to time.
7. EMBEDDED SOFTWARE LICENSE AND CONFIDENTIAL INFORMATION.
7.1 EMBEDDED SOFTWARE LICENSE. The software included in the Products (the "EMBEDDED SOFTWARE") is licensed and not sold. Seller hereby grants to Buyer a non-exclusive, royalty-free, perpetual license to use the Embedded Software only in the operation of the Product in which it was delivered. Such Embedded Software may not be copied for use in any equipment other than the Products. Copies may be made for archival purposes only. Such Embedded Software and any copies thereof, and all copyright, trade secret, patent, trademark and other intellectual or industrial property rights therein, is and shall remain the sole property of Seller. The ideas and the expressions thereof contained in the Embedded Software are confidential and proprietary information and trade secrets of Seller and/or its licensors that are disclosed to Buyer in confidence. Buyer shall not cause or permit reverse engineering, disassembly or decompilation of the Embedded Software or disclosure, copying, display, loan, publication, transfer of possession (whether by sale, exchange, gift, operation of law or otherwise) or other dissemination of the Embedded Software, in whole or in part, to any third party without prior written consent of Seller. Buyer shall not modify, enhance
or otherwise change or supplement the Embedded Software. Buyer will be permitted to sublicense to Semiconductor Customers the Embedded Software solely for the operation of the Products sold by Buyer to Semiconductor Customers hereunder, provided that the sublicense is effected by agreement signed before the Embedded Software is provided and only if the sublicense includes the same provisions as used herein.
7.2 CONFIDENTIALITY. Each party ("RECEIVING PARTY") agrees to keep confidential and not disclose or use except in performance of its obligations under this Agreement, confidential or proprietary information related to the other party's ("DISCLOSING PARTY") technology or business that the Receiving Party learns in connection with this Agreement and any other information received from the other, including without limitation, to the extent previously, currently or subsequently disclosed to the Receiving Party hereunder or otherwise, information relating to products or technology of the Disclosing Party or to the Disclosing Party's business (including, without limitation data, know-how, processes, ideas, inventions (whether patentable or not), all information relating to customers and customer transactions and other technical, business, financial, customer and product development plans, forecasts, strategies and information), all of the foregoing, "Confidential Information". Confidential Information shall not include information the Receiving Party can document (a) is in or (through no improper action or inaction by the Receiving Party or any affiliate, agent or employee) enters the public domain (and is readily available without substantial effort), or (b) was rightfully in the Receiving Party's possession or known by it prior to receipt from the Disclosing Party, or (c) was rightfully disclosed to the Receiving Party by another person without restriction, or (d) was independently developed by the Receiving Party by persons without accessing such information and without use of any Confidential Information of the Disclosing Party. Each party, with prior written notice to the Disclosing Party, may disclose such Confidential Information to the minimum extent possible that is required to be disclosed to a governmental entity or agency in connection with seeking any governmental or regulatory approval, or pursuant to the lawful requirement or request of a governmental entity or agency, provided that reasonable measures are taken to guard against further disclosure, including without limitation, seeking appropriate confidential treatment or a protective order, or assisting the other party to do so. Each party shall use reasonable precautions to protect the other's Confidential Information and employ at least those precautions that such party employs to protect its own confidential or proprietary information.
8. TERM AND TERMINATION.
8.1 TERM. The term of this Agreement shall commence on the Effective Date and shall continue in full force and effect until the termination of the JV Agreement.
8.2 TERMINATION. Notwithstanding the foregoing, and in addition to any other rights of termination set forth herein, this Agreement may be terminated only as provided in the Shareholders' Agreement.
8.3 OBLIGATIONS UPON TERMINATION. The termination of this Agreement shall not discharge, affect, or otherwise modify the rights and obligations of parties established or incurred prior to the termination hereof or the right of either party to pursue any and all legal remedies it may have against the other party and such remedies shall survive the termination of the Agreement.
9. NON-SOLICITATION.
During the term of this Agreement and for a period of 1 year after expiration or termination of this Agreement, neither party will employ, attempt to employ or solicit the employment of, any employee of or consultant to of the other party or otherwise induce or attempt to induce any employee of or consultant to leave the employ of other.
10. MISCELLANEOUS.
10.1 INTELLECTUAL PROPERTY. Seller shall have the sole ownership of Intellectual Property relating to the Products sold by Seller hereunder and the sole right to obtain, hold and renew, in its own name and/or for its own benefit, patents, copyrights, trademarks, trade secrets, registrations and/or other appropriate protection with respect to any of the Products sold by Seller hereunder. As used herein, "INTELLECTUAL PROPERTY" means any and all patents and rights to patent, copyrights, trademarks, trade secrets, Confidential Information of Seller, know-how and proprietary information of any kind or nature whatsoever. Buyer stipulates and agrees that under this Agreement Buyer will acquire no right, title or interest in or to any of such Intellectual Property, except as expressly provided in writing by the parties.
10.2 AUTHORITY. By signing this document, the undersigned represent that they have been duly authorized to execute this document on behalf of their respective corporations.
10.3 COUNTERPARTS. This Agreement may be executed in counterparts, all of which shall be considered one and the same agreement, and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other.
10.4 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and in accordance with the internal laws of the State of New York, excluding:
(i) its conflicts of laws principles; (ii) the United Nations Convention on
Contracts for the International Sale of Goods; (iii) the 1974 Convention on the
Limitation Period in the International Sale of Goods (the "1974 Convention");
and (iv) the Protocol amending the 1974 Convention, done at Vienna April 11,
1980. Disputes relating to any provision of this Agreement shall be handled in
accordance with the dispute resolution procedures of the Shareholders'
Agreement.
10.5 LIMITATION AND DISCLAIMER OF LIABILITY.
(a) EXCEPT WITH RESPECT TO: (1) EITHER PARTY'S BREACH OF CONFIDENTIALITY OBLIGATIONS, (2) DAMAGES ARISING FROM EITHER PARTY'S VIOLATION OF THE INTELLECTUAL PROPERTY RIGHTS OF THE OTHER PARTY OR (3) INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION 5.3.1(ii)(II)) AND SECTION 5.3.2(A)HEREUNDER WITH RESPECT TO DAMAGES OR LOSSES, NEITHER PARTY SHALL BE LIABLE TO THE OTHER UNDER ANY CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS IN CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT OR ANY PURCHASE ORDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(b) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, CUSTOMERS AND AGENTS, INCUR ANY LIABILITY RELATED TO OR ARISING OUT OF THIS AGREEMENT OR THE PRODUCTS, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT, WARRANTY, RELIANCE, TORT (INCLUDING NEGLIGENCE) OR OTHER LEGAL THEORY, EXCEEDING (I) $5,000,000 PER CLAIM NOR (II) $10,000,000 IN THE AGGREGATE IN ANY CALENDAR YEAR. HOWEVER, FOR INDEMNIFICATION OBLIGATIONS UNDER SECTION 5.3.1 (EXCEPT FOR SECTION 5.3.1(ii)(II)) AND SECTION 5.3.2(A) AND FOR
CORPORATE WILLFUL MISCONDUCT OF A PARTY, THERE IS NO LIMITATION ON THE AMOUNT OF SUCH PARTY'S LIABILITY.
10.6 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is intended, nor will it be construed, to confer any rights or benefits upon any person (including, but not limited to, any employee or former employee of Buyer or Seller) other than the parties to this Agreement, and no other person will have any rights or remedies under this Agreement.
10.7 ENTIRE AGREEMENT. This Agreement and the Schedule(s) annexed hereto, contain the entire agreement between the parties with respect to its subject matter, and there are no agreements or understandings between the parties other than those set forth or referred to in this Agreement, and in the various Schedules and/or attachments to same.
10.8 EXPENSES. Except as set forth in this Agreement, all legal and other costs and expenses incurred in connection with this Agreement will be paid by the party incurring such costs and expenses.
10.9 FORCE MAJEURE. Neither party shall be responsible for any delay or failure to perform any provision of this Agreement arising from causes beyond its reasonable control, including, without limitation, labor disputes, civil commotion, war, (declared or undeclared), riot, severe weather, heavy snow, floods, acts of God, governmental rules, laws, requisitions, mobilizations, embargoes, fires, explosions, shortages of transportation, inability to obtain freight space, unavailability of raw materials and restrictions on the use of power. The party relying on this paragraph as an excuse for nonperformance of its obligations hereunder shall use all reasonable efforts promptly to remove or remedy the cause giving rise to such nonperformance.
10.10 NOTICES. All notices hereunder shall be in writing and delivered personally, by documented overnight courier delivery service or by fax (with confirmation of receipt), in each case, to the appropriate address or number as set forth below.
IF TO SELLER: IF TO BUYER: Brooks Automation, Inc. Yaskawa Brooks Automation, Inc. 15 Elizabeth Drive 2-1 Kurosaki-shiroishi, Yahatanishi-ku Chelmsford, Massachusetts Kitakyushu 806-0004 Japan 01824 U.S.A. Attention: ______________________ Attention: Thomas Grilk, Esq. Fax: ____________________________ Fax: (978) 262-2511 |
WITH COPY TO: WITH COPY TO:
IF TO SELLER: IF TO BUYER: Brooks Automation, Inc. Yaskawa Brooks Automation, Inc. 15 Elizabeth Drive 2-1 Kurosaki-shiroishi, Yahatanishi-ku Chelmsford, Massachusetts Kitakyushu 806-0004 Japan 01824 U.S.A. Attention: _______________________ Attention: Thomas Grilk, Esq. Fax: _____________________________ Fax: (978) 262-2511 WITH COPY TO: WITH COPY TO: WilmerHale 60 State Street Masuda, Funai, Eifert & Mitchell, Ltd. Boston, Massachusetts 02109 203 N. LaSalle Street, Suite 2500 Attention: Mark G. Borden Chicago, IL 60601-1262 Fax: (617) 526-5000 Attention: Mary W. Shellenberg Fax: 312-245-7467 |
And
WilmerHale 60 State Street Boston, Massachusetts 02109 Attention: Mark G. Borden Fax: (617) 526-5000
or to such other address and/or to the attention of such other person as the intended recipient may designate by written notice in accordance with this provision. Notices shall be effective upon receipt.
10.11 NONASSIGNMENT. Neither this Agreement, nor any right, duty, term or obligation thereof, may be assigned by either party to any individual or entity, without the prior written consent of the other party hereto. For the purposes of this Agreement, a change of control of a party, including through a sale or transfer of all or a portion of such party's voting securities shall constitute an assignment. This Agreement shall be binding upon and inure to the benefit of the parties' successors and assigns.
10.12 HEADINGS; DEFINITIONS. The Section headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of the Agreement. All references to Sections contained herein mean Sections of this Agreement unless otherwise stated. All capitalized terms defined herein are equally applicable to both the singular and plural forms of such terms.
10.13 AMENDMENTS AND WAIVERS. This Agreement may not be modified or amended except by instrument or instruments in writing signed by the party against whom enforcement of the modification or amendment is sought. Wavier of compliance with any term or provision of this Agreement must be in writing. Waiver of a breach of any term or provision of this Agreement will not be construed as a waiver of any subsequent breach. Consummation of the transactions contemplated by this Agreement will not constitute a waiver of any prior breach of the Agreement.
10.14 SEVERABILITY. If at any time any provision of this Agreement is or becomes illegal, invalid, void or unenforceable in any respect under the law of any jurisdiction, neither the legality, validity, or enforceability of the remaining provisions hereof nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired thereby, and the remainder of the provisions of this Agreement will remain in full force and effect. The parties will endeavor in good faith negotiations to replace any invalid, illegal, void or unenforceable provision with a valid, legal and enforceable provision, the effect of which comes as close as possible to the invalid, illegal, void or unenforceable provision.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this BROOKS JAPAN ROBOT SUPPLY AGREEMENT to be executed by their duly authorized representative on the date set forth above.
BROOKS AUTOMATION, INC. YASKAWA BROOKS AUTOMATION, INC. By: /s/ Edward C. Grady By: /s/ Hiroyuki Ougi --------------------------------- ------------------------------------ Title: President Title: President ------------------------------ --------------------------------- |
Exhibit 10.06
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into in Chelmsford, Massachusetts by and between Brooks Automation, Inc., a Delaware corporation (the "Company") and Thomas S. Grilk (the "Executive"), as of October 24, 2005.
RECITALS
1. The Company desires to continue to employ the Executive as Senior Vice President and General Counsel of the Company upon the terms and conditions set forth herein.
2. In consideration of the employment to be provided hereby as provided herein and the Indemnification Agreement attached hereto as Exhibit A, the Executive has entered into the Executive Invention, Nondisclosure, Non-Competition and Non-Solicitation Agreement attached hereto as Exhibit B.
For and in consideration of the mutual promises, terms, provisions and conditions contained in this Agreement, the parties hereby agree as follows:
1. Duties. The Company shall continue to employ Executive on an at will basis as Senior Vice President and General Counsel of the Company. Executive shall report to the Company's President and CEO. Executive shall have such reasonable and appropriate duties as may from time to time be assigned by the President & CEO, which duties shall include, without limitation, responsibility for the Corporate Legal Affairs. Executive shall perform the duties of such office as are provided for in the bylaws of the Company subject to the general supervision and direction of the President and CEO and the Company's board of directors (the "Board of Directors").
2. At Will Employment. Subject to Section 6 and the termination provisions contained therein, the Executive's employment under this Agreement shall be on an at will basis (the actual period of Executive's employment with the Company is referred to herein as the "Employment Term").
3. Other Activities. Subject to the terms and conditions of the Executive Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement attached hereto as Exhibit B, Executive may serve on corporate, civic, charitable boards or committees, fulfill speaking engagements, teach at educational institutions or manage personal investments; provided that such activities do not individually or in the aggregate interfere or conflict with the performance of his duties or obligations under this Agreement.
4. Performance. During the Employment Term, Executive shall use his business judgment, skill and knowledge for the advancement of the Company's interests and to discharge his duties and responsibilities hereunder. Executive shall perform and discharge, faithfully, diligently and to the best of his ability, his duties and responsibilities hereunder. Subject to Section 3 hereof, Executive shall devote substantially all of his working time and efforts to the business and affairs of the Company.
5. Compensation and Benefits.
5.1. Base Salary. As consideration for Executive's services performed during the Employment Term, the Company agrees to pay Executive a base salary of $260,000 per year (the "Base Salary") payable in accordance with the normal payroll practices of the Company for its executives and subject to federal and state tax withholding. The Base Salary shall be reviewed annually by the compensation committee of the Board of Directors (the "Compensation Committee") and adjusted as determined by the Compensation Committee (the Base Salary as adjusted from time to time shall be referred to as the "Current Base Salary").
5.2. Annual Management Bonus. During the Employment Term, Executive shall be eligible to receive cash bonuses each year from the Company determined by the Chief Executive Officer of the Company (the "Chief Executive Officer") and the Compensation Committee (the "Annual Management Bonus"). The Annual Management Bonus shall be payable based upon performance criteria to be agreed upon by Executive and the Chief Executive Officer and approved by the Compensation Committee. The Annual Management Bonus may range from 0% to 150% of 50% of Current Base Salary and shall be reviewed at least annually by the Compensation Committee. Any such Annual Management Bonuses paid to Executive shall be in addition to the Current Base Salary.
5.3. Benefits. During the Employment Term, Executive shall be eligible for participation in and shall receive all benefits available under the Brooks Automation, Inc. 401(k) Plan, and the Company's welfare benefit plans, practices, policies and programs (including disability, salary continuance, group life, accidental death and travel accident insurance plans and programs) normally available to other senior executives except as any of these may be limited by law.
5.4. Business Expenses. Executive shall be entitled to receive prompt reimbursement during the Employment Term for all reasonable employment-related expenses incurred or paid by him in the performance of his services, subject to reasonable substantiation and documentation.
5.5. Corporate Opportunities. During the Employment Term, Executive agrees that he will first present to the Chief Executive Officer, or the Board of Directors, for acceptance or rejection on behalf of the Company, any opportunity to create or invest in any company which is or will be involved in providing or furnishing equipment, systems, components, products, software or services to customers in industries that the Company serves (including, without limitation, the semiconductor and flat panel display industries) which comes to his attention and in which he, or any affiliate, might desire to participate. If the Board of Directors, or the Chief Executive Officer, rejects the same or fails to act thereon in a reasonable time, Executive shall be free to invest in, participate or present such opportunity to any other person or entity, subject to the other terms of this Agreement.
6. Termination Events.
6.1. Death/Long-Term Disability. This Agreement shall terminate and any and all rights and obligations of the Company and Executive hereunder shall cease and be completely
void except as specifically set forth in this Agreement, upon the death or Long-Term Disability (as defined below) of Executive.
6.1.1. Long-Term Disability. For purposes of this Agreement, "LONG-TERM DISABILITY" shall mean any disability of Executive that prevents Executive from devoting to the business of the Company his best efforts, skill and attention, for a period of 180 consecutive days.
6.2. Termination by the Company. At the election of the Company, this Agreement shall terminate and any and all rights and obligations of the Company and Executive hereunder shall cease and be completely void except as specifically set forth in this Agreement, upon the earliest to occur of the following: (i) the termination of Executive by the Company with Cause (as defined below) under this Agreement and delivery of written notice in accordance with Sections 6, 7 and 13 or (ii) the termination of Executive by the Company without Cause upon delivery of written notice in accordance with Sections 6, 7 and 13.
6.2.1. Cause. For purposes of this Agreement, "CAUSE" shall include, without limitation, the occurrence of any of the following events during the Employment Term:
(i) Executive's conviction of, or the entry of a plea of guilty or nolo contendere to any misdemeanor involving moral turpitude or any felony;
(ii) fraud, embezzlement, or similar act of dishonesty; unauthorized disclosure, attempted disclosure, use or attempted use of confidential information of the company or of any other party if disclosed to the Company under the condition that it be kept confidential; acts prejudicial to the interest or reputation of the Company; or falsification, concealment or distortion of management information;
(iii) material misrepresentation in connection with the Executive's application for employment with the Company;
(iv) conduct by the Executive constituting an act of moral turpitude, or of physical violence while on duty;
(v) the Executive's willful failure or refusal to perform the duties on behalf of the Company which are consistent with the scope and nature of the Executive's responsibilities, or otherwise to comply with a lawful directive or policy of the Company, including without limitation, the Company's Standards of Conduct as then in effect as published on the Company's internal website;
(vi) any act of gross negligence, gross corporate waste or disloyalty by the Executive to the Company or the commission of any intentional tort by the Executive against the Company; or
(vii) material breach of this Agreement or the agreements referenced herein by the Executive.
6.3. Termination by Executive. At the election of the Executive, this Agreement shall terminate and any and all rights and obligations of the Company or Executive hereunder shall cease and be completely void except as specifically set forth in this Agreement, upon the earliest to occur of the following: (i) the Executive's resignation for Good Reason (as defined below); provided that Executive shall have first provided the Company with written notice in accordance with Section 13 of the occurrence of such action he believes constitutes Good Reason and the Company shall have failed to remedy such action within thirty (30) days of its receipt of such notice; or (ii) the Executive's resignation without Good Reason upon delivery of written notice in accordance with Section 13.
6.3.1. Good Reason. For purposes of this Agreement, "Good Reason" shall mean, without Executive's express written consent, the occurrence of any one or more of the following events:
(i) a material breach of this Agreement by the Company;
(ii) a diminution of the Executive's responsibilities and authority described in Section 1 resulting in responsibilities and authority in any material respect inconsistent with the responsibilities and authority of a senior officer of the Company, provided, however, that the parties may agree in writing to a waiver of this right by the Executive;
(iii) a material reduction of the Current Base Salary or of any benefit enjoyed by the Executive unless all senior executives suffer a substantially similar reduction;
(iv) the relocation of the Executive's office to a location more than 60 miles from Chelmsford, Massachusetts; or
(v) the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the assets of the Company within 15 days after a merger, consolidation, sale of assets or similar transaction.
6.4. Termination Date. The term "Termination Date" shall mean if the Executive's services are terminated (A) by his death, then the date of his death, or (B) by his Long-Term Disability, then the 180th day of such disability, or (C) for any other reason, then the date on which such termination is to be effective pursuant to the notice of termination to be given by the party terminating the employment relationship.
7. Effect of Termination.
7.1. Termination for Death or Disability. It is expressly acknowledged and agreed that if Executive's employment shall be terminated due to Executive's death or Long-Term Disability, all of the obligations under Sections 1 through 5 of the Company and Executive shall
cease except that the Company shall pay, or provide the following benefits, to Executive or his heirs, executors or administrators as applicable, without further recourse or liability to the Company:
(i) an amount equal to the unpaid portion of Executive's Current Base Salary earned through the Termination Date;
(ii) an amount equal to the prorata Annual Management Bonus, if any, for the completed portion of the current annual pay period where the total Annual Management Bonus is determined in accordance with Section 5.2; and
(iii) an amount equal to the value of Executive's vacation accrued as of the Termination Date.
7.2. Termination by the Company.
7.2.1. Termination by the Company for Cause. It is expressly acknowledged and agreed that if Executive is terminated by the Company for Cause, all of the obligations under Sections 1 through 5 of the Company and Executive shall cease except that the Company shall pay immediately after the Termination Date the following amounts to the Executive without further recourse or liability to the Company:
(i) an amount equal to the sum of Executive's Current Base Salary earned through the Termination Date; and
(ii) an amount equal to the value of Executive's vacation accrued as of the Termination Date.
7.2.2. Termination By the Company Without Cause. It is expressly acknowledged and agreed that if Executive's employment shall be terminated by Company for any reason, except as set forth in Sections 6.1, and 6.2.1, then all of the obligations under Sections 1 through 5 of the Company and Executive shall cease except that the Company shall pay, or provide the following benefits, to Executive without further recourse or liability to the Company:
(i) an amount equal to the unpaid portion of Executive's Current Base Salary earned through the Termination Date;
(ii) an amount equal to the prorata Annual Management Bonus, if any, for the completed portion of the current annual pay period where the total Annual Management Bonus is determined in accordance with Section 5.2;
(iii) an amount equal to the value of Executive's vacation accrued as of the Termination Date;
(iv) one (1) year's Current Base Salary as severance in pay continuation. Payment of this severance will be made in bi-weekly payments for one (1) year (the "Initial Salary Continuation Period");
(v) during the Initial Salary Continuation Period as it may be extended pursuant to subsection (vi) below (together, the "Total Salary Continuation Period"), Executive will continue to be eligible for medical, dental and vision plans in which Executive was a participant at the Termination Date. The Company will continue to pay the employer portion of the costs of these plans during the Total Salary Continuation Period;
(vi) if the Executive has not found a full time comparable executive position with another employer during the Initial Salary Continuation Period, the Company will extend the bi-weekly payment plan on a month to month basis until the earlier to occur of (A) one (1) additional year (26 additional bi-weekly payments) or (B) the date Executive secures full-time employment, in each case subject only to the Executive's obligation to inform the Company's Human Resources Department that Executive's search for replacement employment is ongoing and continuing in good faith. Said Notice from Executive shall be made on the 15th of the month commencing with the last month of the Initial Salary Continuation Period and monthly thereafter as applicable. Notice shall be made in accordance with Section 13 of this Agreement. Executive's rights under the Total Salary Continuation Period shall be offset by income earned from consulting fees with the Company, by short term and/or sporadic consulting fees earned from any other business entity or by income received for part time employment with another business entity; and
(vii) any and all payment by the Company under this Agreement are and shall be specifically conditioned upon full compliance by the Executive with all elements of the Executive Invention, Nondisclosure, Noncompetition and Nonsolicitation Agreement (attached as Exhibit B) and the other applicable provisions of this Agreement.
7.3. Termination by Executive
7.3.1. Termination by Executive Without Good Reason. It is expressly acknowledged and agreed that if Executive resigns without Good Reason, then all of the obligations under Sections 1 through 5 of the Company and Executive shall cease except that the Company shall pay, or provide the following benefits, to Executive without further recourse or liability to the Company:
(i) an amount equal to the unpaid portion of Executive's Current Base Salary earned through the Termination Date; and
(ii) an amount equal to the value of Executive's accrued vacation pay.
7.3.2. Termination by Executive For Good Reason. It is expressly acknowledged and agreed that if Executive's employment shall be terminated because the Executive resigns for Good Reason, then all of the obligations under Sections 1 through 5 of the Company and Executive shall cease except that the Company shall pay, or provide the following benefits, to Executive without further recourse or liability to the Company:
(i) an amount equal to the unpaid portion of Executive's Current Base Salary earned through the Termination Date;
(ii) an amount equal to the prorata Annual Management Bonus, if any, for the completed portion of the current annual pay period where the total Annual Management Bonus is determined in accordance with Section 5.2;
(iii) an amount equal to the value of Executive's vacation pay accrued as of the Termination Date;
(iv) one (1) year's Current Base Salary as severance in pay continuation. Payment will be made in bi-weekly payments during the Initial Salary Continuation Period;
(v) during the Total Salary Continuation Period, Executive will continue to be eligible for medical, dental and vision plans in which the Executive was a participant at the Termination Date. The Company will continue to pay the employer portion of the costs of these plans during the Total Salary Continuation Period;
(vi) if the Executive has not found full time comparable executive position with another employer during the Initial Salary Continuation Period, the Company will extend the bi-weekly payment plan on a month to month basis until the earlier to occur of (A) one (1) additional year (26 additional bi-weekly payments) or (B) the date Executive secures full-time employment, subject only to the Executive's obligation to inform the Company's Human Resources Department that Executive's search for replacement employment is ongoing and continuing in good faith. Said Notice from Executive shall be made on the 15 of the month commencing with the last month of the Initial Salary Continuation Period and monthly thereafter as applicable. Notice shall be made in accordance with Section 13 of this Agreement. Executive's rights under the Total Salary Continuation Period shall not be offset by income earned from consulting fees with the Company, by short term and/or sporadic consulting fees earned from any other business entity or by income received for part time employment with another business entity; and
(vii) any and all payment by the Company under this Agreement are and shall be specifically conditioned upon full compliance by the Executive with all elements of the Executive Invention, Nondisclosure, Noncompetition and
Nonsolicitation Agreement (attached as Exhibit B) and the other applicable provisions of this Agreement.
7.4. 280G. In the event that the Executive shall become entitled to payment
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments would be subject to the tax imposed by
Section 4999 of the Code (together with any similar tax that may hereafter be
imposed by any taxing authority, the "Excise Tax") the Executive shall be solely
responsible for the payment in full of any such Excise Tax and the Company shall
withhold any federal or state taxes as required by applicable law.
8. Noncompetition Agreement. The Executive shall execute the Executive Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement attached as Exhibit B to this Agreement.
9. Assignment. Neither the Company nor Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party; provided, however, that the Company may assign its rights and obligations under this Agreement without the consent of Executive if the Company shall hereafter effect a reorganization, consolidate with, or merge with or into any other entity or transfer all or substantially all of its properties or assets to any other person or entity. This Agreement shall be binding upon and inure to the benefit of the Company, Executive and their respective successors, executors, administrators, heirs and permitted assigns.
10. Indemnification. The Executive shall execute the Indemnification Agreement attached as Exhibit A to this Agreement.
11. Waiver. The waiver by any party hereto of a breach of any provision of this Agreement by any other party will not operate or be construed as a waiver of any other or subsequent breach by such other party.
12. Severability. The parties agree that each provision contained in this Agreement shall be treated as a separate and independent clause, and the unenforceability of any one clause shall in no way impair the enforceability of any of the other clauses herein. Moreover, if one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to scope, activity or subject, such provisions shall be construed by the appropriate judicial body by limiting and reducing it or them, so as to be enforceable to the extent compatible with the applicable law.
13. Notices. Any notice or other communication in connection with this Agreement shall be deemed to be delivered if in writing, addressed as provided below and actually delivered at said address:
If to Executive, to him at the following address:
Thomas S. Grilk
lO Underhill Road
Lynnfield, MA 01940
If to the Company, to it at the following address:
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
Attn: General Counsel
or to such other person or address as to which either party may notify the other in accordance with this Section 13.
14. Applicable Law. This Agreement shall be interpreted and construed in accordance with the laws of the Commonwealth of Massachusetts.
15. Remedies. Executive acknowledges that a breach of any of the promises or agreements contained herein could result in irreparable and continuing damage to the Company for which there may be no adequate remedy at law, and the Company shall be entitled to seek injunctive relief and/or a decree for specific performance, and such other relief as may be proper (including monetary damages if appropriate).
16. Integration. This Agreement, the Executive Invention, Non-Disclosure, Non-Competition and Nonsolicitation Agreement attached as Exhibit B hereto, the Indemnification Agreement attached as Exhibit A hereto, unless otherwise provided herein, form the entire agreement between the parties hereto with respect to the subject matter contained in this Agreement and shall supersede all prior agreements, oral discussions, promises and representations regarding employment, compensation, severance or other payments contingent upon termination of employment, whether in writing or otherwise.
17. Absence of Conflicting Obligations. Executive represents that he is not bound by any agreement or any other existing or previous business relationship which conflicts with or prevents the full performance of his duties and responsibilities under this Agreement. Executive further represents that his obligations under or in consideration with this Agreement do not breach and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by him.
18. Taxes. Any payments provided for hereunder shall be paid net of any applicable tax withholding required under federal, state or local law. Notwithstanding anything herein to the contrary, the Company shall accelerate the timing of any amounts payable to the Employee pursuant to Section 7 hereunder if and as necessary to prevent such amounts from being deemed "deferred compensation" pursuant to the American Jobs Creation Act of 2004 (or the rules and regulation promulgated thereunder).
19. Survival. Notwithstanding any provisions of this Agreement to the contrary, the obligations of Executive and the Company pursuant to Sections 6 through 21 hereof shall each survive termination of this Agreement.
20. Effect of Headings. Any title of a section heading contained herein is for convenience of reference only, and shall not affect the meaning of construction or any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of the date first above written.
/s/ Thomas S. Grilk ---------------------------------------- Thomas S. Grilk |
BROOKS AUTOMATION, INC.
By: /s/ Edward C. Grady ------------------------------------ Edward C. Grady President and CEO |
EXHIBIT 10.13
BROOKS AUTOMATION, INC.
1995 EMPLOYEE STOCK PURCHASE PLAN
(As amended through July 31, 2006)
1. PURPOSE
The Brooks Automation, Inc. 1995 Employee Stock Purchase Plan (the "Plan") is intended to provide a method whereby employees of Brooks Automation, Inc. (the "Company") will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Company's $.01 par value common stock (the "Common Stock"). It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that Section of the Code.
2. ELIGIBLE EMPLOYEES
(a) All employees of the Company or any of its participating subsidiaries shall be eligible to receive options under this Plan to purchase the Company's Common Stock. In no event may an employee be granted an option if such employee, immediately after the option is granted, owns stock possessing five (5%) percent or more of the total combined voting power or value of all classes of stock of the Company or of its parent corporation or subsidiary corporation as the terms "parent corporation" and "subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For purposes of determining stock ownership under this paragraph, the rules of Section 424(d) of the Code shall apply and stock which the employee may purchase under outstanding options shall be treated as stock owned by the employee.
(b) For the purpose of this Plan, the term employee shall not include an employee whose customary employment is for not more than twenty (20) hours per week or is for not more than five (5) months in any calendar year.
3. STOCK SUBJECT TO THE PLAN
The stock subject to the options granted hereunder shall be shares of the Company's authorized but unissued Common Stock or shares of Common Stock reacquired by the Company, including shares purchased in the open market. The aggregate number of shares which may be issued pursuant to the Plan is 3,000,000, subject to increase or decrease by reason of stock split-ups, reclassifications, stock dividends, changes in par value and the like. If the number of shares of Common Stock reserved and available for any Offering Period (as defined herein) is insufficient to satisfy all purchase requirements for that Offering Period, the reserved and available shares for that Offering Period shall be apportioned among participating employees in proportion to their options.
4. OFFERING PERIODS AND STOCK OPTIONS
(a) The time periods during which payroll deductions will be accumulated under the Plan shall consist of six month periods ("Offering Periods"), commencing on the first day of each Offering Period ("Offering Commencement Date") and ending on the last day of the Offering Period ("Offering Termination Date"). The Offering Periods for the 2003 calendar year shall consist of (i) an Offering Commencement Date of January 1 and an Offering Termination Date of June 30, and (ii) an Offering Commencement Date of July 1 that shall comprise a seven month period ending on the Offering Termination Date, January 31, 2004. Thereafter, each calendar year shall have two six-month Offering Periods, the first with an Offering Commencement Date of February 1 and an Offering Termination Date of July 31, and the second with an Offering Commencement Date of August 1 and Offering Termination Date of January 31. Notwithstanding the foregoing, the Offering Period beginning on February 1, 2006 shall have an Offering Termination Date of August 16, 2006 (rather than July 31, 2006), and the subsequent Offering Period shall have an Offering Commencement Date of August 17, 2006 (rather than August 1, 2006) and an Offering Termination Date of January 31, 2007. Each Offering Period includes only regular pay days falling within it.
(b) On each Offering Commencement Date, the Company will grant to each eligible employee who is then a participant in the Plan an option to purchase on the Offering Termination Date at the Option Exercise Price, as provided in this paragraph (b), that number of full shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on the Offering Termination Date (including any amount carried forward pursuant to Article 8 hereof) will pay for at the Option Exercise Price; provided that such employee remains eligible to participate in the Plan throughout such Offering Period. The Option Exercise Price for each Offering Period shall be the lesser of (i) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Commencement Date, or (ii) eighty-five percent (85%) of the fair market value of the Common Stock on the Offering Termination Date. In the event of an increase or decrease in the number of outstanding shares of Common Stock through stock split-ups, reclassifications, stock dividends, changes in par value and the like, an appropriate adjustment shall be made in the number of shares and Option Exercise Price per share provided for under the Plan, either by a proportionate increase in the number of shares and proportionate decrease in the Option Exercise Price per share, or by a proportionate decrease in the number of shares and a proportionate increase in the Option Exercise Price per share, as may be required to enable an eligible employee who is then a participant in the Plan to acquire on the Offering Termination Date that number of full shares of Common Stock as his or her accumulated payroll deductions on such date will pay for at the Option Exercise Price, as so adjusted.
(c) For purposes of this Plan, the term "fair market value" on any date means, if the Common Stock is listed on a national securities exchange or on the Nasdaq National Market, the average of the high and low sales prices of the Common Stock on such date on such exchange or as reported on the Nasdaq National Market or, if the Common Stock is traded in the over-the-counter securities market, but not on the Nasdaq National Market, the average of the high and low bid quotations for the Common Stock on such date, each as published by The Nasdaq National Market. If no shares of Common Stock are traded on the Offering Commencement Date or Offering Termination Date, the fair market value will be determined by taking the
average of the fair market values on the immediately preceding and the next following business days on which shares of Common Stock are traded.
(d) For purposes of this Plan the term "business day" as used herein means a day on which there is trading on the Nasdaq National Market or on a national securities exchange on which the Common Stock is listed.
(e) No employee shall be granted an option which permits his or her rights to purchase Common Stock under the Plan and any similar plans of the Company or any parent or participating subsidiary corporations to accrue at a rate which exceeds $25,000 of fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. The purpose of the limitation in the preceding sentence is to comply with and shall be construed in accordance with Section 423(b)(8) of the Code.
5. EXERCISE OF OPTION
Each eligible employee who continues to be a participant in the Plan on the Offering Termination Date shall be deemed to have exercised his or her option on such date and shall be deemed to have purchased from the Company such number of full shares of Common Stock reserved for the purpose of the Plan as his or her accumulated payroll deductions on such date, plus any amount carried forward pursuant to Article 8 hereof, will pay for at the Option Exercise Price, but in no event may an employee purchase shares of Common Stock in excess of 1,500 shares of Common Stock on any Offering Termination Date. If a participant is not an employee on the Offering Termination Date and throughout an Offering Period, he or she shall not be entitled to exercise his or her option. All options issued under the Plan shall, unless exercised as set forth herein, expire at the end of the Offering Termination Date with respect to the Offering Period during which such options were issued.
6. AUTHORIZATION FOR ENTERING PLAN
(a) An eligible employee may enter the Plan by filling out, signing and delivering to the Chief Financial Officer of the Company or his or her designee an authorization ("Authorization"):
(i) stating the amount to be deducted regularly from his or her pay;
(ii) authorizing the purchase of stock for him or her in each Offering Period in accordance with the terms of the Plan; and
(iii) specifying the exact name in which Common Stock purchased for him or her is to be issued in accordance with Article 11 hereof.
Such Authorization must be received by the Chief Financial Officer of the Company or his or her designee at least ten (10) business days before an Offering Commencement Date.
(b) The Company will accumulate and hold for the employee's account the amounts deducted from his or her pay. No interest will be paid thereon. Participating employees may not make any separate cash payments into their account.
(c) Unless an employee files a new Authorization or withdraws from the Plan, his or her deductions and purchases under the Authorization he or she has on file under the Plan will continue as long as the Plan remains in effect. An employee may increase or decrease the amount of his or her payroll deductions as of the next Offering Commencement Date by filling out, signing and delivering to the Chief Financial Officer of the Company or his or her designee a new Authorization. Such new Authorization must be received by the Chief Financial Officer of the Company or his or her designee at least ten (10) business days before the date of such next Offering Commencement Date.
7. ALLOWABLE PAYROLL DEDUCTIONS
Effective July, 1, 2002, an employee may authorize payroll deductions in any whole percentage amount up to but not more than ten percent (10%) of his or her base pay; provided, however, that the minimum deduction in respect of any payroll period shall be one percent (1%) of his or her base pay but in no event less than five dollars ($5); and provided further that the maximum percentage shall be reduced to meet the requirements of Section 4(e) hereof. Base pay means regular straight-time earnings and, if applicable, commissions, but excluding payments for overtime, bonuses, and other special payments.
8. UNUSED PAYROLL DEDUCTIONS
Only full shares of Common Stock may be purchased. Any balance remaining in an employee's account after a purchase will be reported to the employee and will be carried forward to the next Offering Period. However, in no event will the amount of the unused payroll deductions carried forward from a payroll period exceed the Option Exercise Price per share for the immediately preceding Offering Period. If for any Offering Period the amount of unused payroll deductions should exceed the Option Exercise Price per share, the amount of the excess for any participant shall be refunded to such participant, without interest.
9. CHANGE IN PAYROLL DEDUCTIONS
Deductions may not be increased or decreased during an Offering Period.
10. WITHDRAWAL FROM THE PLAN
(a) An employee may withdraw from the Plan and withdraw all but not less than all of the payroll deductions credited to his or her account under the Plan by delivering a written notice to the Chief Financial Officer of the Company or his or her designee ("Withdrawal Notice") no later than the Offering Termination Date (subject to such administrative procedures as the Company may reasonably impose), in which event the Company will promptly refund without interest the entire balance of such employee's deductions not theretofore used to purchase Common Stock under the Plan.
(b) If an employee withdraws from the Plan, the employee's rights under the Plan will be terminated and no further payroll deductions will be made. To reenter, such an employee must file a new Authorization at least ten (10) business days before the next Offering Commencement Date. Such Authorization will become effective for the Offering Period that commences on such Offering Commencement Date.
11. ISSUANCE OF STOCK
Upon written request, certificates for Common Stock will be issued and delivered to participants and uncertificated shares of Common Stock issued to or for the account of participants will be delivered, in either case as soon as practicable after each Offering Period. Common Stock purchased under the Plan will be issued only in the name of, or for the account of, the employee.
12. NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan are his or hers alone and may not be transferred or assigned to, or availed of by, any other person. Any option granted to an employee may be exercised only by him or her, except as provided in Article 13 in the event of an employee's death.
13. TERMINATION OF EMPLOYEE'S RIGHTS
(a) Except as set forth in the last paragraph of this Article 13, an employee's rights under the Plan will terminate when he or she ceases to be an employee because of retirement, resignation, lay-off, discharge, death, change of status, failure to remain in the customary employ of the Company for greater than twenty (20) hours per week, or for any other reason. A Withdrawal Notice will be considered as having been received from the employee on the day his or her employment ceases, and all payroll deductions not used to purchase Common Stock will be refunded.
(b) If an employee's payroll deductions are interrupted by any legal process, a Withdrawal Notice will be considered as having been received from him or her on the day the interruption occurs.
(c) Upon termination of the participating employee's employment because of death, the executor or administrator of the estate of the employee shall have the right to elect, by written notice given to the Chief Financial Officer of the Company or his or her designee prior to the earlier to occur of the 30th day following the date of the death of the employee or the next Offering Termination Date, either (i) to withdraw, without interest, all of the payroll deductions credited to the employee's account under the Plan, or (ii) to exercise the employee's option for the purchase of shares of Common Stock on the next Offering Termination Date following the date of the employee's death for the purchase of that number of full shares of Common Stock reserved for the purpose of the Plan which the accumulated payroll deductions in the employee's account at the date of the employee's death will purchase at the applicable Option Exercise Price
(subject to the maximum number set forth in Article 5), and any excess in such account will be returned to said executor or administrator. In the event that no such written notice of election shall be timely received by the Chief Financial Officer of the Company or his or her designee, the executor or administrator shall automatically be deemed to have elected to withdraw the payroll deductions credited to the employee's account at the date of the employee's death and the same will be paid promptly to said executor or administrator, without interest.
14. DEATH OF PARTICIPANT
In the event of the death of a participating employee, the Company shall deliver such Common Stock and/or cash to the executor or administrator of the estate of the employee, or if, to the knowledge of the Company, no such executor or administrator has been appointed, the Company, in the discretion of the Committee, may deliver such Common Stock and/or cash to the spouse or to any one or more dependents of the employee as the Committee may designate.
15. TERMINATION AND AMENDMENTS TO PLAN
(a) The Plan may be terminated at any time by the Company's Board of Directors, effective on the next following Offering Termination Date. Notwithstanding the foregoing, it will terminate when all of the shares of Common Stock reserved for the purposes of the Plan have been purchased. Upon such termination or any other termination of the Plan, all payroll deductions not used to purchase Common Stock will be refunded without interest.
(b) The Board of Directors reserves the right to amend the Plan from time to time in any respect; provided, however, that no amendment shall be effective without stockholder approval if the amendment would (a) except as provided in Articles 3, 4, 24 and 25, increase the aggregate number of shares of Common Stock to be offered under the Plan, or (b) change the class of employees eligible to receive options under the Plan.
16. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN
Employees who are subject to Section 16 of the Securities Exchange Act of
1934, as amended, may sell Common Stock purchased under the Plan at any time
provided that such sale qualifies for an exemption from Section 16(b) under Rule
16b-3, or otherwise does not give rise to Section 16(b) liability.
Notwithstanding the foregoing, because of certain Federal tax requirements, all
employees will agree by entering the Plan, promptly to give the Company notice
of any such Common Stock disposed of within two years after the Offering
Commencement Date on which the related option was granted showing the number of
such shares disposed of. The employee assumes the risk of any market
fluctuations in the price of such Common Stock.
17. COMPANY'S PAYMENT OF EXPENSES RELATED TO PLAN
The Company will bear all costs of administering and carrying out the Plan.
18. PARTICIPATING SUBSIDIARIES
The term "participating subsidiaries" shall mean any subsidiary of the Company which is designated by the Committee (as defined in Article 19) to participate in the Plan. The Committee shall have the power to make such designation before or after the Plan is approved by the stockholders.
19. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Compensation Committee of the Company's Board of Directors or such other committee designated by the Company's Board of directors (the "Committee").
(b) The interpretation and construction by the Committee of any provisions of the Plan or of any option granted under it shall be final. The Committee may from time to time adopt such rules and regulations for carrying out the Plan as it may deem best. With respect to persons subject to Section 16 of the Securities and Exchange Act of 1934, as amended, transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under said Act. To the extent any provision of the Plan or action by the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by that Committee.
(c) Annually, the Committee shall prepare and distribute to each participating employee in the Plan a report containing the amount of the participating employee's accumulated payroll deductions as of the Offering Termination Date, the Option Exercise Price for such Offering Period, the number of shares of Common Stock purchased by the participating employee with the participating employee's accumulated payroll deductions, and the amount of any unused payroll deductions either to be carried forward to the next Offering Period, or returned to the participating employee without interest.
(d) No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any option granted under it. The Company shall indemnify each member of the Board of Directors and the Committee to the fullest extent permitted by law with respect to any claim, loss, damage or expense (including counsel fees) arising in connection with their responsibilities under this Plan.
20. OPTIONEES NOT STOCKHOLDERS
Neither the granting of an option to an employee nor the deductions from his or her pay shall constitute such employee a stockholder of the Company with respect to the shares covered by such option until such shares have been purchased by and issued to him or her.
21. APPLICATION OF FUNDS
The proceeds received by the Company from the sale of Common Stock pursuant to options granted under the Plan may be used for any corporate purposes, and the Company shall not be obligated to segregate participating employees' payroll deductions.
22. GOVERNMENTAL REGULATION
(a) The Company's obligation to sell and deliver shares of the Company's Common Stock under this Plan is subject to the approval of any governmental authority required in connection with the authorization, issuance or sale of such stock.
(b) In this regard, the Board of Directors may, in its discretion, require as a condition to the exercise of any option that a Registration Statement under the Securities Act of 1933, as amended, with respect to the shares of Common Stock reserved for issuance upon exercise of the option shall be effective.
23. TRANSFERABILITY
Neither payroll deductions credited to an employee's account nor any rights with regard to the exercise of an option or to receive stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the employee. Any such attempted assignment, transfer, pledge, or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in accordance with Article 10.
24. EFFECT OF CHANGES OF COMMON STOCK
If the Company should subdivide or reclassify the Common Stock which has been or may be optioned under the Plan, or should declare thereon any dividend payable in shares of such Common Stock, or should take any other action of a similar nature affecting such Common Stock, then the number and class of shares of Common Stock which may thereafter be optioned (in the aggregate and to any individual participating employee) shall be adjusted accordingly.
25. MERGER OR CONSOLIDATION
If the Company should at any time merge into or consolidate with another corporation, the Board of Directors may, at its election, either (i) terminate the Plan and refund without interest the entire balance of each participating employee's payroll deductions, or (ii) entitle each participating employee to receive on the Offering Termination Date upon the exercise of such option for each share of Common Stock as to which such option shall be exercised the securities or property to which a holder of one share of the Common Stock was entitled upon and at the time of such merger or consolidation, and the Board of Directors shall take such steps in connection with such merger or consolidation as the Board of Directors shall deem necessary to assure that the provisions of this Article 25 shall thereafter be applicable, as nearly as reasonably possible. A sale of all or substantially all of the assets of the Company shall be deemed a merger or consolidation for the foregoing purposes.
26. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX
The Company will undertake such withholding in connection with the Plan as it determines is appropriate, in its sole discretion.
27. EQUAL TREATMENT
Notwithstanding any provision herein to the contrary, all Participants participating in any Offering Period shall have equal rights and privileges except as provided in Section 423(b)(5) of the Code.
28. APPROVAL OF STOCKHOLDERS
The Plan shall not take effect until approved by the holders of a majority of the outstanding shares of Common Stock of the Company, which approval must occur no later than the end of the first Offering Period after the date the Plan is adopted by the Board of Directors. Options may be granted under the Plan prior and subject to such stockholder approval. If the Plan is not so approved by the stockholders, all payroll deductions from participating employees shall be returned without interest and all options so granted shall terminate.
Dates of Approval by the Board of Directors or Compensation Committee: November 1, 1995, December 10, 1997, January 6, 2000, December 13, 2001, September 13, 2002, February 26, 2003, February 25, 2004, January 25, 2006 and July 31, 2006.
Dates of Approval by the Stockholders: February 22, 1996, February 26, 1998, February 24, 2000, May 13, 2002, April 27, 2004 and March 7, 2006.
EXHIBIT 10.18
BROOKS AUTOMATION, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
Nonqualified Stock Option Agreement (the "Option") made effective as of the <<OPTION_DATE>>, between Brooks Automation, Inc. (the "Corporation"), and <<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> (the "Recipient"), an employee of the Corporation, a Parent or a Subsidiary, pursuant to the Brooks Automation, Inc. 2000 Equity Incentive Plan, as it may be amended from time to time (the "2000 Plan").
W I T N E S S E T H:
WHEREAS, on February 24, 2000, the Corporation adopted the 2000 Plan which provides for the issuance of stock options, and
WHEREAS, the Corporation and the Recipient desire to enter into an agreement whereby the Corporation will grant the Recipient an option to purchase shares of the Common Stock, $.01 par value, of the Corporation (the "Stock"), and this option is intended to qualify as a Nonqualified Stock Option;
NOW, THEREFORE, for good and valuation consideration, the receipt and sufficiency of which is hereby acknowledged, the Corporation and the Recipient agrees as follows:
1. Grant of Option.
Pursuant to the terms and conditions of the 2000 Plan and this Option, the Corporation hereby grants to the Recipient an Option to purchase, as provided in Section 3 hereof, all or any part of a total of <<SHARES_GRANTED>> shares of Stock (the "Option Shares"). This Option is expressly subject to all of the terms and conditions contained in this Option or in the 2000 Plan, which is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan.
2. Purchase Price.
The price at which the Option Shares may be purchased shall be <<OPTION_PRICE>> per share (the "Option Exercise Price"). This price is not less than the Fair Market Value of the Stock on the date of this Option.
3. Vesting and Exercise of Option.
Subject to the provisions of Section 4 and the right of the Corporation to accelerate the date upon which any or all of the shares covered by this Option becomes exercisable, the Recipient shall become entitled to purchase the indicated percentage of the Option Shares as follows:
Period of Time Elapsed From Date of Option Percentage of Total Shares Vesting ------------------------------------------ ---------------------------------- One year 25% Each 3 month period thereafter for the next 36 months Additional 6.25% |
If Recipient has attained age 55 and completed at least five years of continuous employment with the Corporation on the date of termination of employment with the Corporation, other than termination due to death, Permanent Disability or termination for cause (a "Retirement"), then the Option Shares shall continue to vest in accordance with the original vesting schedule without regard to the continuous employment requirement.
Notwithstanding any provision herein to the contrary, in no event may this Option be exercised after seven years from the date of this Option (the "Expiration Date").
4. Termination of Relationship.
If the Recipient ceases to be employed by the Corporation (a "Termination"), then this Option may be exercised as to all vested Option Shares with respect to which Recipient could exercise this Option on the date of Termination, and which shares have not been previously purchased, until the earlier of Expiration Date, or:
(i) in the case of termination by reason of death or Permanent Disability, one year after termination of employment;
(ii) in the case of any other termination, other than termination for cause, three months after the termination of employment; or
(iii) in the case of a Retirement, the full life of the Option without regard to any requirement that the retiree continue his or her employment with the Corporation.
Notwithstanding any provision herein to the contrary the foregoing, in the case of termination for cause (as defined in the governing employment agreement, if any, or as determined in the Corporation's sole discretion), the ability to exercise this Option may be terminated on such earlier date as the Corporation may specify, and such date may be set so as to prevent the Recipient from further exercising any portion of this Option.
5. Nontransferability; Persons Able to Exercise.
The Option may not be transferred other than by will or the laws of descent and distribution. During the life of the Recipient, only the Recipient may exercise this Option. If the Recipient dies while still affiliated with the Corporation, or during the periods specified in Section 4, this Option may be exercised by his executors, administrators, legatees or distributees,
provided that such person or persons comply with the provisions of this Option applicable to the Recipient.
6. Method of Exercising Option.
The Option may be exercised, in whole or in part, by written notice to the Corporation. The written notice specified in this Section must be accompanied by payment of the Option Exercise Price for the shares being purchased. Payment shall be made in cash, unless the Corporation, in its sole discretion, authorizes payment to be made in shares of the Corporation or a combination of such shares and cash. As soon as practical after receipt of this notice and payment, the Corporation shall deliver a certificate or certificates representing the purchased shares registered in the name of the person or persons exercising this Option. In the event this Option is exercised by any person other than the Recipient, the notice shall be accompanied by appropriate proof of the right of such person to exercise this Option. All shares purchased upon the exercise of this Option and payment of the full Option Exercise Price will be fully paid and nonassessable.
7. Stock Adjustments.
If there shall be any change in the Stock through merger, consolidation, reorganization, recapitalization, or other change in the corporate structure of the Corporation, appropriate adjustments in the total number and kind of shares subject to this Option shall be made by the Corporation as provided in the 2000 Plan.
8. No Rights Other Than Those Expressly Created.
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Recipient any right to be retained in the employ of, or continue
to be affiliated with, the Corporation, (ii) giving the Recipient any equity or
interest of any kind in any assets of the Corporation, or (iii) creating a trust
of any kind or a fiduciary relationship of any kind between the Recipient and
the Corporation. As to any claim for any unpaid amounts under this Option, any
person having a claim for payments shall be unsecured creditor. The Recipient
shall not have any of the rights of a stockholder with respect to any Option
Shares until such time as this Option has been exercised and Option Shares have
been issued.
9. Compliance with Laws.
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or foreign laws, the Corporation may be required to collect or withhold income or other taxes from Recipient upon the grant of this Option, the exercise of this Option, or at some other time. The Corporation may require, as a condition to the exercise of this Option, or demand, at such other time as it may consider appropriate, that the Recipient pay the Corporation the amount of any taxes which the Corporation may determine is required to be collected or withheld, and the Recipient shall comply with the requirement or demand of the Corporation.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of this Option, the Recipient shall make such representations and furnish such information as may, in the opinion of counsel for the Corporation, be appropriate to permit the Corporation to issue or transfer the Option Shares in compliance with the provisions of applicable federal or state
securities laws. The Corporation, in its discretion, may postpone the issuance and delivery of Option Shares upon any exercise of this Option until completion of such registration or other qualification of such shares under any federal or state laws, or stock exchange listing, as the Corporation may consider appropriate. The Corporation may require that prior to the issuance or transfer of Option Shares upon exercise of this Option, the Recipient enter into a written agreement to comply with any restrictions on subsequent disposition that the Corporation deems necessary or advisable under any applicable federal and state securities laws. Certificates of Stock issued hereunder may bear a legend to reflect such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this Option unless and until the Corporation is satisfied, in its sole discretion, that there has been compliance with all legal requirements applicable to the issuance of such Option Shares.
10. Miscellaneous.
(a) Provisions of the Plan. The Option hereby granted is expressly subject to all of the terms and conditions contained in this Option and in the 2000 Plan, except those which are expressly applicable only to "2000 Plan ISOs", and the 2000 Plan is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan. This stock option is not intended to be an Incentive Stock Option, as that term is described in Section 422 of the Internal Revenue Code of 1986, as amended.
(b) Discretion of the Committee. Unless otherwise explicitly provided, the Committee, as defined in the Plan, shall make all determinations required to be made hereunder, including determinations required to be made by the Corporation, and shall interpret all provisions of this Option, as it deems necessary or desirable, in its sole and unfettered discretion. Such determinations and interpretations shall be binding and conclusive to the Corporation and the Recipient. The Committee, in its sole discretion, is authorized to accelerate the time at which this Option may be exercised.
(c) Reservation of Shares. During the term of this Option, the Corporation shall at all times reserve and keep available shares of Stock sufficient to satisfy the requirements of this Option.
(d) Amendment. This Option may only be modified or amended by a writing signed by both parties.
(e) Notices. Any notices required to be given under this Option shall be sufficient if in writing and if hand-delivered or if sent by first class mail and addressed as follows:
IF TO THE CORPORATION:
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
IF TO THE RECIPIENT:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> <<ADDRESS_LINE_1>> <<ADDRESS_LINE_2>> <<ADDRESS_LINE_3>> <<CITY>>, <<STATE>> <<ZIP_CODE>> <<COUNTRY>>
or to such other address as either party may designate under the provisions hereof.
(f) Successors and Assigns. The rights and obligations of the Corporation under this Option shall inure to the benefit of and be binding upon the successors and assigns of the Corporation.
(g) Applicable Law. All rights and obligations under this Option shall be governed by the laws of the Commonwealth of Massachusetts.
(h) Paragraph Headings. The paragraph headings used in this Option are for convenience of reference only, and are not to be construed as part of this Option.
IN WITNESS WHEREOF, the parties have executed this Option as an instrument under seal effective as of the date written on the first page of this Option.
BROOKS AUTOMATION, INC.
By: /s/ Lynda M. Avallone ------------------------- Lynda M. Avallone Vice President and Corporate Treasurer |
Recipient:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>>
EXHIBIT 10.19
BROOKS AUTOMATION, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
Nonqualified Stock Option Agreement (the "Option") made effective as of the <<OPTION_DATE>>, between Brooks Automation, Inc. (the "Corporation"), and <<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> (the "Recipient"), an employee of the Corporation, a Parent or a Subsidiary, pursuant to the Brooks Automation, Inc. 2000 Equity Incentive Plan, as it may be amended from time to time (the "2000 Plan").
W I T N E S S E T H:
WHEREAS, on February 24, 2000, the Corporation adopted the 2000 Plan which provides for the issuance of stock options, and
WHEREAS, the Corporation and the Recipient desire to enter into an agreement whereby the Corporation will grant the Recipient an option to purchase shares of the Common Stock, $.01 par value, of the Corporation (the "Stock"), and this option is intended to qualify as a Nonqualified Stock Option;
NOW, THEREFORE, for good and valuation consideration, the receipt and sufficiency of which is hereby acknowledged, the Corporation and the Recipient agrees as follows:
1. Grant of Option.
Pursuant to the terms and conditions of the 2000 Plan and this Option, the Corporation hereby grants to the Recipient an Option to purchase, as provided in Section 3 hereof, all or any part of a total of <<SHARES_GRANTED>> shares of Stock (the "Option Shares"). This Option is expressly subject to all of the terms and conditions contained in this Option or in the 2000 Plan, which is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan.
2. Purchase Price.
The price at which the Option Shares may be purchased shall be <<OPTION_PRICE>> per share (the "Option Exercise Price"). This price is not less than the Fair Market Value of the Stock on the date of this Option.
3. Vesting and Exercise of Option.
Subject to the provisions of Section 4 and the right of the Corporation to accelerate the date upon which any or all of the shares covered by this Option becomes exercisable, the Recipient shall become entitled to purchase the indicated percentage of the Option Shares as follows:
Period of Time Elapsed From Date of Option Percentage of Total Shares Vesting ------------------------------------------ ---------------------------------- Each 3 month period for the next 48 months 6.25% |
If Recipient has attained age 55 and completed at least five years of continuous employment with the Corporation on the date of termination of employment with the Corporation, other than termination due to death, Permanent Disability or termination for cause (a "Retirement"), then the Option Shares shall continue to vest in accordance with the original vesting schedule without regard to the continuous employment requirement.
Notwithstanding any provision herein to the contrary, in no event may this Option be exercised after seven years from the date of this Option (the "Expiration Date").
4. Termination of Relationship.
If the Recipient ceases to be employed by the Corporation (a "Termination"), then this Option may be exercised as to all vested Option Shares with respect to which Recipient could exercise this Option on the date of Termination, and which shares have not been previously purchased, until the earlier of Expiration Date, or:
(i) in the case of termination by reason of death or Permanent Disability, one year after termination of employment;
(ii) in the case of any other termination, other than termination for cause, three months after the termination of employment; or
(iii) in the case of a Retirement, the full life of the Option without regard to any requirement that the retiree continue his or her employment with the Corporation.
Notwithstanding any provision herein to the contrary the foregoing, in the case of termination for cause (as defined in the governing employment agreement, if any, or as determined in the Corporation's sole discretion), the ability to exercise this Option may be terminated on such earlier date as the Corporation may specify, and such date may be set so as to prevent the Recipient from further exercising any portion of this Option.
5. Nontransferability; Persons Able to Exercise.
The Option may not be transferred other than by will or the laws of descent and distribution. During the life of the Recipient, only the Recipient may exercise this Option. If the Recipient dies while still affiliated with the Corporation, or during the periods specified in Section 4, this Option may be exercised by his executors, administrators, legatees or distributees,
provided that such person or persons comply with the provisions of this Option applicable to the Recipient.
6. Method of Exercising Option.
The Option may be exercised, in whole or in part, by written notice to the Corporation. The written notice specified in this Section must be accompanied by payment of the Option Exercise Price for the shares being purchased. Payment shall be made in cash, unless the Corporation, in its sole discretion, authorizes payment to be made in shares of the Corporation or a combination of such shares and cash. As soon as practical after receipt of this notice and payment, the Corporation shall deliver a certificate or certificates representing the purchased shares registered in the name of the person or persons exercising this Option. In the event this Option is exercised by any person other than the Recipient, the notice shall be accompanied by appropriate proof of the right of such person to exercise this Option. All shares purchased upon the exercise of this Option and payment of the full Option Exercise Price will be fully paid and nonassessable.
7. Stock Adjustments.
If there shall be any change in the Stock through merger, consolidation, reorganization, recapitalization, or other change in the corporate structure of the Corporation, appropriate adjustments in the total number and kind of shares subject to this Option shall be made by the Corporation as provided in the 2000 Plan.
8. No Rights Other Than Those Expressly Created.
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Recipient any right to be retained in the employ of, or continue
to be affiliated with, the Corporation, (ii) giving the Recipient any equity or
interest of any kind in any assets of the Corporation, or (iii) creating a trust
of any kind or a fiduciary relationship of any kind between the Recipient and
the Corporation. As to any claim for any unpaid amounts under this Option, any
person having a claim for payments shall be unsecured creditor. The Recipient
shall not have any of the rights of a stockholder with respect to any Option
Shares until such time as this Option has been exercised and Option Shares have
been issued.
9. Compliance with Laws.
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or foreign laws, the Corporation may be required to collect or withhold income or other taxes from Recipient upon the grant of this Option, the exercise of this Option, or at some other time. The Corporation may require, as a condition to the exercise of this Option, or demand, at such other time as it may consider appropriate, that the Recipient pay the Corporation the amount of any taxes which the Corporation may determine is required to be collected or withheld, and the Recipient shall comply with the requirement or demand of the Corporation.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of this Option, the Recipient shall make such representations and furnish such information as may, in the opinion of counsel for the Corporation, be appropriate to permit the Corporation to issue or transfer the Option Shares in compliance with the provisions of applicable federal or state
securities laws. The Corporation, in its discretion, may postpone the issuance and delivery of Option Shares upon any exercise of this Option until completion of such registration or other qualification of such shares under any federal or state laws, or stock exchange listing, as the Corporation may consider appropriate. The Corporation may require that prior to the issuance or transfer of Option Shares upon exercise of this Option, the Recipient enter into a written agreement to comply with any restrictions on subsequent disposition that the Corporation deems necessary or advisable under any applicable federal and state securities laws. Certificates of Stock issued hereunder may bear a legend to reflect such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this Option unless and until the Corporation is satisfied, in its sole discretion, that there has been compliance with all legal requirements applicable to the issuance of such Option Shares.
10. Miscellaneous.
(a) Provisions of the Plan. The Option hereby granted is expressly subject to all of the terms and conditions contained in this Option and in the 2000 Plan, except those which are expressly applicable only to "2000 Plan ISOs", and the 2000 Plan is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan. This stock option is not intended to be an Incentive Stock Option, as that term is described in Section 422 of the Internal Revenue Code of 1986, as amended.
(b) Discretion of the Committee. Unless otherwise explicitly provided, the Committee, as defined in the Plan, shall make all determinations required to be made hereunder, including determinations required to be made by the Corporation, and shall interpret all provisions of this Option, as it deems necessary or desirable, in its sole and unfettered discretion. Such determinations and interpretations shall be binding and conclusive to the Corporation and the Recipient. The Committee, in its sole discretion, is authorized to accelerate the time at which this Option may be exercised.
(c) Reservation of Shares. During the term of this Option, the Corporation shall at all times reserve and keep available shares of Stock sufficient to satisfy the requirements of this Option.
(d) Amendment. This Option may only be modified or amended by a writing signed by both parties.
(e) Notices. Any notices required to be given under this Option shall be sufficient if in writing and if hand-delivered or if sent by first class mail and addressed as follows:
IF TO THE CORPORATION:
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
IF TO THE RECIPIENT:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> <<ADDRESS_LINE_1>> <<ADDRESS_LINE_2>> <<ADDRESS_LINE_3>> <<CITY>>, <<STATE>> <<ZIP_CODE>> <<COUNTRY>>
or to such other address as either party may designate under the provisions hereof.
(f) Successors and Assigns. The rights and obligations of the Corporation under this Option shall inure to the benefit of and be binding upon the successors and assigns of the Corporation.
(g) Applicable Law. All rights and obligations under this Option shall be governed by the laws of the Commonwealth of Massachusetts.
(h) Paragraph Headings. The paragraph headings used in this Option are for convenience of reference only, and are not to be construed as part of this Option.
IN WITNESS WHEREOF, the parties have executed this Option as an instrument under seal effective as of the date written on the first page of this Option.
BROOKS AUTOMATION, INC.
By:__________________________________________
Recipient:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>>
EXHIBIT 10.20
BROOKS AUTOMATION, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
Nonqualified Stock Option Agreement (the "Option") made effective as of the <<OPTION_DATE>>, between Brooks Automation, Inc. (the "Corporation"), and <<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> (the "Recipient"), a Director of the Corporation, pursuant to the Brooks Automation, Inc. 2000 Equity Incentive Plan, as it may be amended from time to time (the "2000 Plan").
W I T N E S S E T H:
WHEREAS, on February 24, 2000, the Corporation adopted the 2000 Plan which provides for the issuance of stock options, and
WHEREAS, on April 27, 2004 the Corporation amended the Plan to, among other things, allow the grant of stock options to, among other, independent directors pursuant to the Plan; and
WHEREAS, the Recipient is an independent director as provided for in the Plan; and
WHEREAS, the Corporation and the Recipient desire to enter into an agreement whereby the Corporation will grant the Recipient an option to purchase shares of the Common Stock, $.01 par value, of the Corporation (the "Stock"), and this option is intended to qualify as a Nonqualified Stock Option;
NOW, THEREFORE, for good and valuation consideration, the receipt and sufficiency of which is hereby acknowledged, the Corporation and the Recipient agrees as follows:
1. Grant of Option.
Pursuant to the terms and conditions of the 2000 Plan and this Option, the Corporation hereby grants to the Recipient an Option to purchase, as provided in Section 3 hereof, all or any part of a total of <<SHARES_GRANTED>> shares of Stock (the "Option Shares"). This Option is expressly subject to all of the terms and conditions contained in this Option or in the 2000 Plan, which is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan.
2. Purchase Price.
The price at which the Option Shares may be purchased shall be <<OPTION_PRICE>> per share (the "Option Exercise Price"). This price is not less than the Fair Market Value of the Stock on the date of this Option.
3. Vesting and Exercise of Option.
Subject to the provisions of Section 4 and the right of the Corporation to accelerate the date upon which any or all of the shares covered by this Option becomes exercisable, the Recipient shall become entitled to purchase the indicated percentage of the Option Shares as follows:
Period of Time Elapsed From Date of Option Percentage of Total Shares Vesting ------------------------------------------ ---------------------------------- Each 3 month period for the next 48 months 6.25% |
Notwithstanding any provision herein to the contrary, in no event may this Option be exercised after seven years from the date of this Option (the "Expiration Date").
4. Termination of Relationship.
If the Recipient ceases to be a Director of the Corporation (a "Termination"), then this Option may be exercised as to all vested Option Shares with respect to which Recipient could exercise this Option on the date the Recipient ceased to be a Director, and which shares have not been previously purchased, until the earlier of Expiration Date, or:
(i) in the case the Recipient ceases to be a Director by reason of death or permanent disability, 12 months after the Recipient ceases to be a Director;
(ii) in all other cases, the 30 days period following the date such person ceases to be a Director
5. Nontransferability; Persons Able to Exercise.
The Option may not be transferred other than by will or the laws of descent and distribution. During the life of the Recipient, only the Recipient may exercise this Option. If the Recipient dies while still affiliated with the Corporation, or during the periods specified in Section 4, this Option may be exercised by his executors, administrators, legatees or distributees, provided that such person or persons comply with the provisions of this Option applicable to the Recipient.
6. Method of Exercising Option.
The Option may be exercised, in whole or in part, by written notice to the Corporation. The written notice specified in this Section must be accompanied by payment of the Option Exercise Price for the shares being purchased. Payment shall be made in cash, unless the Corporation, in its sole discretion, authorizes payment to be made in shares of the Corporation or a combination of such shares and cash. As soon as practical after receipt of this notice and payment, the Corporation shall deliver a certificate or certificates representing the purchased shares registered in the name of the person or persons exercising this Option. In the event this Option is exercised by any person other than the Recipient, the notice shall be accompanied by appropriate proof of the right of such person to exercise this Option. All shares purchased upon
the exercise of this Option and payment of the full Option Exercise Price will be fully paid and nonassessable.
7. Stock Adjustments.
If there shall be any change in the Stock through merger, consolidation, reorganization, recapitalization, or other change in the corporate structure of the Corporation, appropriate adjustments in the total number and kind of shares subject to this Option shall be made by the Corporation as provided in the 2000 Plan.
8. No Rights Other Than Those Expressly Created.
Neither this Option nor any action taken hereunder shall be construed as
(i) giving the Recipient any right to continue to be affiliated with, the
Corporation, (ii) giving the Recipient any equity or interest of any kind in any
assets of the Corporation, or (iii) creating a trust of any kind or a fiduciary
relationship of any kind between the Recipient and the Corporation. As to any
claim for any unpaid amounts under this Option, any person having a claim for
payments shall be unsecured creditor. The Recipient shall not have any of the
rights of a stockholder with respect to any Option Shares until such time as
this Option has been exercised and Option Shares have been issued.
9. Compliance with Laws.
(a) Withholding of Taxes. Pursuant to applicable federal, state, local or foreign laws, the Corporation may be required to collect or withhold income or other taxes from Recipient upon the grant of this Option, the exercise of this Option, or at some other time. The Corporation may require, as a condition to the exercise of this Option, or demand, at such other time as it may consider appropriate, that the Recipient pay the Corporation the amount of any taxes which the Corporation may determine is required to be collected or withheld, and the Recipient shall comply with the requirement or demand of the Corporation.
(b) Securities Law Compliance. Upon exercise (or partial exercise) of this Option, the Recipient shall make such representations and furnish such information as may, in the opinion of counsel for the Corporation, be appropriate to permit the Corporation to issue or transfer the Option Shares in compliance with the provisions of applicable federal or state securities laws. The Corporation, in its discretion, may postpone the issuance and delivery of Option Shares upon any exercise of this Option until completion of such registration or other qualification of such shares under any federal or state laws, or stock exchange listing, as the Corporation may consider appropriate. The Corporation may require that prior to the issuance or transfer of Option Shares upon exercise of this Option, the Recipient enter into a written agreement to comply with any restrictions on subsequent disposition that the Corporation deems necessary or advisable under any applicable federal and state securities laws. Certificates of Stock issued hereunder may bear a legend to reflect such restrictions.
(c) General. No Option Shares shall be issued upon exercise of this Option unless and until the Corporation is satisfied, in its sole discretion, that there has been compliance with all legal requirements applicable to the issuance of such Option Shares.
10. Miscellaneous.
(a) Provisions of the Plan. The Option hereby granted is expressly subject to all of the terms and conditions contained in this Option and in the 2000 Plan and the 2000 Plan is hereby incorporated herein by reference. All capitalized terms not defined in this Option have the meanings specified in the 2000 Plan. This stock option is not intended to be an Incentive Stock Option, as that term is described in Section 422 of the Internal Revenue Code of 1986, as amended.
(b) Discretion of the Committee. Unless otherwise explicitly provided, the Committee, as defined in the Plan, shall make all determinations required to be made hereunder, including determinations required to be made by the Corporation, and shall interpret all provisions of this Option, as it deems necessary or desirable, in its sole and unfettered discretion. Such determinations and interpretations shall be binding and conclusive to the Corporation and the Recipient. The Committee, in its sole discretion, is authorized to accelerate the time at which this Option may be exercised.
(c) Reservation of Shares. During the term of this Option, the Corporation shall at all times reserve and keep available shares of Stock sufficient to satisfy the requirements of this Option.
(d) Amendment. This Option may only be modified or amended by a writing signed by both parties.
(e) Notices. Any notices required to be given under this Option shall be sufficient if in writing and if hand-delivered or if sent by first class mail and addressed as follows:
IF TO THE CORPORATION:
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824
IF TO THE RECIPIENT:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>> <<ADDRESS_LINE_1>> <<ADDRESS_LINE_2>> <<ADDRESS_LINE_3>> <<CITY>>, <<STATE>> <<ZIP_CODE>> <<COUNTRY>>
or to such other address as either party may designate under the provisions hereof.
(f) Successors and Assigns. The rights and obligations of the Corporation under this Option shall inure to the benefit of and be binding upon the successors and assigns of the Corporation.
(g) Applicable Law. All rights and obligations under this Option shall be governed by the laws of the Commonwealth of Massachusetts.
(h) Paragraph Headings. The paragraph headings used in this Option are for convenience of reference only, and are not to be construed as part of this Option.
IN WITNESS WHEREOF, the parties have executed this Option as an instrument under seal effective as of the date written on the first page of this Option.
BROOKS AUTOMATION, INC.
By:____________________________
Recipient:
<<FIRST_NAME>> <<MIDDLE_NAME>> <<LAST_NAME>>
Exhibit 10.21
BROOKS AUTOMATION, INC.
RESTRICTED STOCK AGREEMENT
AGREEMENT made this _____________ between Brooks Automation, Inc., a Delaware corporation (the "Company"), and _____________ (the "Employee").
WITNESSETH:
WHEREAS, as an inducement for the Employee to assist the Company to achieve long-range performance goals and to enable the Employee to participate in the long-term growth of the Company, the Company desires to grant to the Employee ______ shares (the "Shares") of the Company's common stock, $.01 par value per share (the "Common Stock"), pursuant to the Company's Amended and Restated 2000 Equity Incentive Plan (the "Plan") and subject to the terms and conditions set forth herein;
NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - ACQUISITION OF SHARES
1.1 Award of Shares. The Company has granted the Shares to the Employee, and the Employee hereby accepts the Shares, subject to the terms and conditions of the Plan and this Agreement. In the event of an inconsistency between this Agreement and the Plan, which is incorporated herein by reference, the Plan will control. All capitalized terms not defined in this Agreement have the meaning specified in the Plan.
1.2 Record ownership; custody of certificates, etc.
(a) In accordance with the Plan and Section 158 of the Delaware General Corporation Law, the Shares shall be evidenced in the books of the Company as owned by the Employee. The Shares shall be held in uncertificated form except as the Company otherwise determines. If at any time the Shares are represented by certificates or other evidence of ownership, the Company may retain custody of such certificates or other evidence of ownership until such time as the Shares are either forfeited to the Company or cease to be subject to the risk of forfeiture and transfer restrictions described herein and in the Plan. Notwithstanding the foregoing, except as set forth herein or in the Plan the Employee shall have the rights of an owner of the Shares, including the right to vote the shares and the right to dividends or other distributions.
(b) Upon the lapsing of the restrictions described herein with respect to the Shares, the Company shall take such steps as it determines to be necessary or appropriate to transfer certificates or other evidence of ownership to the Employee, including, if so determined by the Company, to a brokerage account held by or for the benefit of the Employee.
1.3 Employee Representations. The Employee represents, warrants and covenants as follows:
(a) The Employee has received and reviewed the Plan and the Prospectus related to the Plan, including the documents incorporated therein by reference.
(b) The Employee understands that (i) the Federal income tax
consequences to the Employee of the transfer of the Shares to the Employee will
vary depending upon whether the Employee makes an election under Section 83(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the Company
is not providing the Employee with any advice as to whether to make such
election, (iii) the Employee has been advised to seek the counsel of his or her
own tax advisor as to whether, and if so where and how to make such election,
(iv) such election, if made, must be filed with the Internal Revenue Service
within 30 days of the date of this Agreement, and (v) the Employee must notify
the Company upon making such election.
(c) The Employee understands, agrees and acknowledges that the Shares are subject to restrictions on transfer and may be forfeited if the conditions of this Agreement are not satisfied. The Employee also understands, agrees and acknowledges that if the Shares are ever certificated the Company may, at its election and in its sole discretion, require that the certificates have affixed thereto a legend in substantially the following form:
"The shares of stock represented by this certificate are subject to restrictions on transfer and a risk of forfeiture set forth in a certain Restricted Stock Agreement between the corporation and the registered owner of this certificate (or his or her predecessor in interest). Such Agreement is available for inspection without charge at the principal executive offices of the corporation."
ARTICLE 2 - FORFEITURE
2.1 Vesting and Forfeiture. For purposes of this Agreement, employment with the Company shall include employment with a consolidated subsidiary of the Company. The Shares shall vest as follows unless earlier forfeited in accordance with this Section 2.1:
(a) Unless earlier vested or forfeited, the Shares shall vest: (i) as to fifty (50%) percent of the Shares, on ___________, 200x [two years from date of grant]; (ii) as to an additional twenty-five (25%) of the Shares, on ____________, 200x [three years from date of grant]; and (iii) as to the final twenty-five (25%) of the Shares, on ___________, 20xx [four years from date of grant].
(b) If there is a Qualifying Termination of the Employee's employment with the Company and its subsidiaries that occurs either before a Change in Control or more than one year following a Change in Control, then in addition to any Shares previously vested under Section 2.1(a) above, a number of Shares equal to the relevant Earned Fraction shall be treated as having vested immediately prior to the Qualifying Termination.
(c) If there is a Qualifying Termination of the Employee's employment with the Company and its subsidiaries that occurs within the one-year period following a Change in Control, any Shares that were unvested but outstanding immediately prior to the Qualifying Termination shall be treated as having vested immediately prior to the Qualifying Termination.
For purposes of this Section 2.1:
(A) "Cause" means (i) the Employee's willful failure to perform, or serious negligence in the performance of, the Employee's duties and responsibilities for the Company or any of its subsidiaries that remains uncured, or continues, beyond the fifteenth (15th) day following the date on which the Company gives the Employee notice specifying in reasonable detail the nature of the failure or negligence; (ii) fraud, embezzlement or other dishonesty with respect to the Company or any of its subsidiaries or customers; (iii) conviction of, or a plea of guilty or nolo contendere with respect to, a felony or to any crime (whether or not a felony) that involves moral turpitude; or (iv) breach of fiduciary duty or violation of any covenant of confidentiality, assignment of rights to intellectual property, non-competition or non-solicitation of customers or employees; provided, that if at the time of termination of employment the Employee is party to an employment agreement or similar agreement with the Company or any of its subsidiaries that includes a definition of "Cause", the definition contained in such employment agreement or similar agreement shall apply for purposes of this Section 2.1 in lieu of the definition set forth above in this clause (A).
(B) "Qualifying Termination" means a termination by the Company or by a subsidiary of the Company of the Employee's employment with the Company and its subsidiaries, other than a termination for Cause.
(C) "Earned Fraction" means:
(I) for a Qualifying Termination occurring before __________, 200x, the number of unvested Shares outstanding immediately prior to the Qualifying Termination that would have vested on ___________, 200x had the Employee continued in the employ of the Company and its subsidiaries, multiplied by a fraction, the numerator of which is the number of days elapsed between ____________, 200x and the date of the Qualifying Termination, and the denominator of which is seven hundred thirty (730); and
(II) for a Qualifying Termination occurring after _________, 200x but before __________, 200x, the number of unvested Shares outstanding immediately prior to the Qualifying Termination that would have vested on _____________, 200x had the Employee continued in the employ of the Company and its subsidiaries, multiplied by a fraction, the numerator of which is the number of days elapsed between ___________, 200x and the date of the Qualifying Termination, and the denominator of which is three hundred sixty five (365); and
(III) for a Qualifying Termination occurring after ___________, 200x but before ___________, 20xx, the number of unvested Shares outstanding immediately prior to the Qualifying Termination that would have vested on ______________, 20xx had the Employee continued in the employ of the Company and its subsidiaries, multiplied by a fraction, the numerator of which is the number of days elapsed between ____________, 200x and the date of the Qualifying Termination, and the denominator of which is three hundred sixty five (365).
(D) "Change in Control" means the occurrence of any of the events described in subsections (i), (ii), (iii) or (iv) below:
(i) Any Person acquires beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of thirty-five (35%) percent or more of either (x) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (y) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, that for purposes of this subsection (D)(i) the following acquisitions shall not constitute a Change in Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Employer, or (IV) any Business Combination (but except as provided in subsection (D)(iii) below a Business Combination may nevertheless constitute a Change in Control under subsection (D)(iii)); and provided further, that an acquisition by a Person of thirty-five percent (35%) percent or more but less than fifty (50%) percent of the Outstanding Company Common Stock or of the combined voting power of the Outstanding Company Voting Securities shall not constitute a Change in Control under this subsection (D)(i) if within fifteen (15) days of the Board's being advised that such ownership level has been reached, a majority of the "Incumbent Directors" (as hereinafter defined) then in office adopt a resolution approving the acquisition of that level of securities ownership by such Person; or
(ii) Individuals who, as of ____________, 200x, constituted the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board; provided, that any individual who becomes a member of the Board subsequent to ____________, 200x and whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors shall be treated as an Incumbent Director unless he or she assumed office as a result of an actual or threatened election contest with respect to the election or removal of directors; or
(iii) There is consummated a reorganization, merger or consolidation involving the Company, or a sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case unless,
following such Business Combination, (x) the Persons who were the beneficial owners, respectively, of the Outstanding Company Common Stock and of the combined voting power of the Outstanding Company Voting Securities immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and of the combined voting power of the Outstanding Company Voting Securities, as the case may be, (y) unless in connection with such Business Combination a majority of the Incumbent Directors then in office determine that this clause (D)(iii)(y) does not apply to such Business Combination, no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Employer or of such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, thirty-five (35%) percent or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed prior to the Business Combination and (z) at least a majority of the members of the Board resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(iv) The stockholders of the Company approve a complete liquidation or dissolution of the Company;
provided, that if any payment or benefit payable hereunder upon or following a Change in Control (as defined herein) would be required to comply with the limitations of Section 409A(a)(2)(A)(v) of the Code and the guidance thereunder in order to avoid an additional tax under Section 409A of the Code, such payment or benefit shall be made only if such Change in Control constitutes a change in ownership or control of the Company, or a change in ownership of the Company's assets, described in IRS Notice 2005-1, the proposed regulations under Section 409A of the Code, or any successor guidance.
(E) "Board" means the Board of Directors of the Company.
(F) "Employer" means the Company and its subsidiaries.
(G) "Person" means any individual, entity or other person, including a group within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act.
(H) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
In the event the Employee ceases to be employed by the Company as a full-time employee for any reason or no reason, with or without cause, prior to ______________, 20xx, all unvested Shares shall be immediately and automatically forfeited to the Company.
2.2 Restrictions on Transfer.
(a) Except as otherwise provided in subsection (b) below, for so long as any of the Shares are subject to a risk of forfeiture as described above, the Employee shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of law or otherwise (collectively "transfer"), any such Shares or any interest therein. Any attempted transfer in contravention of the foregoing shall be null and void. The Company shall not be required to transfer record ownership on its books of any Shares subject to the restrictions herein that have been sold, assigned or otherwise transferred, hypothecated or disposed of in violation of this Agreement.
(b) Once the risk of forfeiture and the transfer restrictions described above lapse as to any Shares, such Shares may be sold, transferred or otherwise disposed of subject only to the restrictions of applicable law, including applicable securities law, and to any insider-trading or similar restrictions that may be imposed by the Company.
ARTICLE 3 - MISCELLANEOUS
3.1 Adjustments for Stock Splits, Stock Dividends, etc. If there is any stock split, reverse stock split, stock dividend, stock distribution or other reclassification of the Common Stock, any and all new, substituted or additional securities to which the Employee is entitled by reason of his ownership of the Shares shall be immediately subject to the risk of forfeiture and transfer restrictions described herein in the same manner and to the same extent, if any, as such Shares.
3.2 Restrictions on Distributions. If at any time while the Shares are subject to the risk of forfeiture and transfer restrictions described herein there is a dividend (other than a stock dividend described in Section 3.1) or other distribution with respect to the Shares, whether of cash, Common Stock, other securities or other property, the Company may require that the cash, securities, or other property so dividended or distributed be subjected to restrictions (including, without limitation, if the Company so determines, by holding any such amounts in escrow) similar to those to which the Shares are then subject.
3.3 Withholding Taxes.
(a) Pursuant to applicable federal, state, local or foreign laws, the Company may be required to collect income or other taxes on the transfer of the Shares to the Employee, the lapse of a restriction placed on the Shares, or at other times. The Company may require, at such time as it considers appropriate, that the Employee pay the Company the amount of any taxes that the Company may determine is required to be withheld or collected, and the Employee shall comply with the requirement or demand of the Company. The Company may withhold, collect
or offset against any amount owed by the Company to the Employee, the amount of any such taxes in any manner (including, without limitation, by payment in whole or in part in shares of Common Stock, including the Shares, valued at the Fair Market Value, by check, or by offsetting such amount against compensation otherwise due to the Employee), if in its sole discretion it deems any such method to be an appropriate method for withholding or collecting taxes.
(b) If the Employee elects, in accordance with Section 83(b) of the Code, to recognize ordinary income in the year of acquisition of the Shares, the Company may require that the Employee, at the time of such election, make an additional payment for withholding tax purposes based on the difference, if any, between the purchase price for such Shares and the fair market value of such Shares.
3.4 No Rights To Employment. Nothing contained in this Agreement shall be construed as giving the Employee any right to be retained as an employee of the Company.
3.5 Waiver; Disposition of Stock. From time to time the Company may waive its rights hereunder either generally or with respect to one or more specific transfers which have been proposed, attempted or made. Each such waiver shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver.
3.6 Successors and Assigns; Assignment. This Agreement shall be binding upon the parties hereto and their heirs, representatives, successors and assigns. The Company may assign its rights hereunder either generally or from time to time.
3.7 Notices. All notices to a party hereto shall be in writing and shall be deemed to have been adequately given if delivered in person or mailed, postage pre-paid and registered or certified mail or federal express or other recognized commercial courier service:
If to the Company:
Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, Massachusetts 01824
Attention: Chief Financial Officer
If to Employee:
or to such other address as any party may from time to time designate for itself by notice in writing given to the other parties hereto.
3.8 Amendments. This Agreement may be amended or modified in whole or in part only by an instrument in writing signed by the Company and the Employee.
3.9 Entire Agreement. This Agreement constitutes the entire agreement between the parties, and all premises, representations, understandings, warranties and agreements with reference to the subject matter hereof have been expressed herein or in the documents incorporated herein by reference.
3.10 Applicable Law; Severability. This Agreement shall be governed by and construed and enforced in accordance with Delaware law. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision hereof shall be prohibited by or invalid under any such law, that provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or nullifying the remainder of that provision or any other provisions of this Agreement.
3.11 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed in original but all of which together shall constitute one and the same instrument.
3.12 Effect of Headings. Any table of contents, title of an article or section heading herein contained is for convenience or reference only and shall not affect the meaning of construction of any of the provisions hereof.
IN WITNESS WHEREOF, the Employee has hereunto set his or her hand and the Company has authorized this instrument to be signed by its officers thereunder duly authorized, effective as an instrument under seal.
BROOKS AUTOMATION, INC.
EMPLOYEE
EX-10.25
BROOKS AUTOMATION, INC.
Deferred Compensation Plan
Master Plan Document
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.
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BROOKS AUTOMATION, INC.
Deferred Compensation Plan
Master Plan Document
TABLE OF CONTENTS
PAGE ---- ARTICLE 1 DEFINITIONS.................................................... 1 ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY............................. 3 2.1 SELECTION BY ADMINISTRATOR...................................... 3 2.2 ENROLLMENT AND ELIGIBILITY REQUIREMENTS; COMMENCEMENT OF PARTICIPATION................................................... 4 2.3 TERMINATION OF A PARTICIPANT'S ELIGIBILITY...................... 4 ARTICLE 3 ACCOUNT CREDITS................................................ 4 3.1 ELECTIVE DEFERRALS: MINIMUM REQUIREMENTS........................ 4 3.2 ELECTIVE DEFERRALS: MAXIMUM REQUIREMENTS........................ 5 3.3 ELECTIVE DEFERRALS: EFFECT OF ELECTION FORM..................... 5 3.4 ELECTIVE DEFERRALS: WITHHOLDING AND CREDITING OF DEFERRAL AMOUNTS......................................................... 5 3.5 COMPANY CREDITS................................................. 5 3.6 SERP CREDITS.................................................... 6 3.7 VESTING......................................................... 6 3.8 HYPOTHETICAL INVESTMENT RETURNS................................. 7 3.9 FICA AND OTHER TAXES............................................ 7 ARTICLE 4 SCHEDULED DISTRIBUTION OF DEFERRAL ACCOUNT; UNFORESEEABLE FINANCIAL EMERGENCIES................................................. 7 4.1 SCHEDULED DISTRIBUTION OF DEFERRAL ACCOUNT...................... 7 4.2 POSTPONING SCHEDULED DISTRIBUTIONS.............................. 8 4.3 OTHER BENEFITS TAKE PRECEDENCE OVER SCHEDULED DISTRIBUTIONS..... 8 4.4 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES..................................................... 8 ARTICLE 5 CHANGE IN CONTROL BENEFIT...................................... 9 ARTICLE 6 SEPARATION FROM SERVICE (OTHER THAN BY REASON OF DEATH)........ 9 6.1 SERP ACCOUNT.................................................... 9 6.2 ACCOUNTS OTHER THAN SERP ACCOUNT................................ 9 ARTICLE 7 DISTRIBUTIONS ON ACCOUNT OF DEATH.............................. 10 ARTICLE 8 DISTRIBUTION OF SMALL ACCOUNTS................................. 10 ARTICLE 9 BENEFICIARY DESIGNATION........................................ 10 9.1 BENEFICIARY..................................................... 10 |
BROOKS AUTOMATION, INC.
Deferred Compensation Plan
Master Plan Document
9.2 BENEFICIARY DESIGNATION AND CHANGE.............................. 10 9.3 ACKNOWLEDGEMENT................................................. 11 9.4 NO BENEFICIARY DESIGNATION...................................... 11 9.5 DOUBT AS TO BENEFICIARY......................................... 11 9.6 DISCHARGE OF OBLIGATIONS........................................ 11 ARTICLE 10 AMENDMENT AND TERMINATION..................................... 11 10.1 TERMINATION OF PLAN............................................. 11 10.2 AMENDMENT....................................................... 11 10.3 PLAN AGREEMENT.................................................. 11 ARTICLE 11 ADMINISTRATION................................................ 12 11.1 IN GENERAL...................................................... 12 11.2 ADMINISTRATION UPON CHANGE IN CONTROL........................... 12 11.3 AGENTS.......................................................... 12 11.4 BINDING EFFECT OF DECISIONS..................................... 12 11.5 INDEMNITY OF COMMITTEE.......................................... 13 11.6 EMPLOYER INFORMATION............................................ 13 ARTICLE 12 OTHER BENEFITS AND AGREEMENTS................................ 13 ARTICLE 13 CLAIMS PROCEDURES............................................. 13 ARTICLE 14 MISCELLANEOUS................................................. 13 14.1 STATUS OF PARTICIPANTS AND BENEFICIARIES AS GENERAL CREDITORS... 13 14.2 NON-ASSIGNABILITY............................................... 13 14.3 NOT A CONTRACT OF EMPLOYMENT.................................... 13 14.4 CAPTIONS........................................................ 14 14.5 GOVERNING LAW................................................... 14 14.6 NOTICE.......................................................... 14 14.7 SUCCESSORS...................................................... 14 14.8 INVALIDITY...................................................... 14 14.9 INCOMPETENTS.................................................... 14 14.10 DISTRIBUTION IN THE EVENT OF INCOME INCLUSION UNDER 409A........ 14 14.11 DEDUCTION LIMITATION ON BENEFIT PAYMENTS........................ 15 14.12 EFFECT OF RESTATEMENT........................................... 15 14.13 COMPLIANCE WITH SECTION 409A GENERALLY.......................... 15 |
BROOKS AUTOMATION, INC.
DEFERRED COMPENSATION PLAN
PURPOSE
The purpose of the Plan is to provide specified benefits to a select group of management or highly compensated Employees who contribute materially to the continued growth, development and future business success of Brooks Automation, Inc., a Delaware corporation, and its subsidiaries, if any, that sponsor the Plan.
The Plan is intended to constitute an unfunded "top hat" plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of Subtitle B of Title I of ERISA and shall be operated and construed accordingly. The Plan is also intended to provide for the effective deferral of income for tax purposes in accordance with its terms, consistent inter alia with the requirements of Code Section 409A, and shall be operated and construed accordingly. Without limiting the generality of the Company's authority under Article 11, the Company may at any time and from time to time amend or modify the Plan, including retroactively, to comply with the terms of Code Section 409A or other applicable law.
ARTICLE 1
DEFINITIONS
For the purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:
1.1 "Account": the sum of the bookkeeping accounts and sub-accounts maintained by the Administrator under the Plan with respect to a Participant to reflect the Employers' Plan-based obligations to the Participant.
1.2 "Administrator": As defined in Article 12.
1.3 "Account Balance": the balance of the Account (or, when the term is used with respect to any constituent account or sub-account, the balance of such account or sub-account).
1.4 "Annual Installment Method": an annual installment method for the payment of a vested Account Balance under which each installment equals the amount obtained by dividing the remaining vested Account Balance (as determined by the Administrator in its discretion) by the number of remaining annual installments due the Participant.
1.5 "Base Salary": the annual cash compensation relating to services performed by a Participant during any calendar year, excluding distributions in respect of nonqualified deferred compensation plans, bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards and other fees, and automobile and other allowances (whether or not includible in the Employee's gross income). Base Salary shall be calculated before reduction for deferrals under qualified or nonqualified plans, as determined by the Administrator.
1.6 "Beneficiary": any individual, trust, estate or other entity designated in accordance with Article 9 to receive Plan benefits, if any, remaining to be paid upon the death of a Participant.
1.7 "Beneficiary Designation Form": a form prescribed by or acceptable to the Administrator for the designation of Beneficiaries.
1.8 "Benefit Distribution Date": the date on which, or as soon as practicable after which, a Participant's vested Account Balance or applicable portion thereof will be distributed (if distributable as a lump sum) or commence to be distributed (if distributed in installments) in accordance with Article 4, 5, 6 or 7, as the case may be.
1.9 "Board": the board of directors of the Company.
1.10 "Bonus": compensation, if any, earned under an Employer's annual bonus or cash incentive plan(s) and such other amounts as the Administrator may specify from time to time.
1.11 "Change in Control": as defined in Appendix A.
1.12 "Code": the Internal Revenue Code of 1986, as amended and in effect from time to time.
1.13 "Commissions": cash commissions (as determined by the Administrator), if any, earned by a Participant from an Employer for services rendered during a Plan Year.
1.14 "Company": Brooks Automation, Inc., a Delaware corporation, and any successor to all or substantially all of the Company's assets or business that assumes the Plan.
1.15 "Company Credit Account": the portion of a Participant's Account that reflects Company Credits plus or minus notional investment adjustments with respect thereto, less all related distributions.
1.16 "Company Credits": amounts determined in accordance with Section 3.5.
1.17 "Deferral Account": the portion of a Participant's Account that reflects Elective Deferrals under the Plan plus or minus notional investment adjustments with respect thereto, less all related distributions.
1.18 "Election Form": a form prescribed by or acceptable to the Administrator for the making of permitted elections (other than Beneficiary designations) under the Plan.
1.19 "Elective Deferral": a deferral of Base Salary, Bonus or Commissions made under the Plan at the election of the Participant.
1.20 "Employee": an individual employed by an Employer.
1.21 "Employer": any or all, as the context requires, of the Company and its subsidiaries; provided, that only subsidiaries that are part of the same "controlled group" as the Company (determined under the rules of Sections 414(b) and (c) of the Code) shall be taken into account.
1.22 "ERISA": the Employee Retirement Income Security Act of 1974, as amended and in effect from time to time.
1.23 "Participant": any Employee (i) who is selected by the Administrator to participate in the Plan, (ii) whose executed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, and (iii) whose Plan Agreement has not terminated.
1.24 "Plan": the Brooks Automation, Inc. Deferred Compensation Plan as from time to time amended and in effect.
1.25 "Plan Agreement": a written agreement, in form prescribed by or acceptable to the Administrator, that evidences a Participant's agreement to the terms of the Plan and establishes the terms of Plan participation for such Participant. Except as the Administrator may otherwise determine, the most recent Plan Agreement with respect to a Participant shall supersede all prior Plan Agreements with respect to such Participant. Plan Agreement may vary among Participants and may provide additional benefits not set forth in the Plan or limit the benefits otherwise provided under the Plan. A binding agreement between a Participant and the Company (for example, but without limitation, an employment or severance agreement) that purports to affect the amount,
vesting, timing or any other term of a deferral, credit or benefit under the Plan, but that is not designated as a "Plan Agreement," shall nevertheless, to that extent, constitute a "Plan Agreement" under the Plan (and, to the extent of the relevant provision, shall, except as the Administrator otherwise determines, supersede any prior Plan Agreement governing such provision), but only if and to the extent that so treating it would not jeopardize the qualification of the Participant's Plan deferral(s) under Section 409A.
1.26 "Plan Year": the calendar year.
1.27 "Retirement" (along with correlative term such as "Retire(s)" or "Retired"): separation from service with all Employers, other than by reason of death, on or after the earlier of the attainment of (a) age sixty-five (65) or (b) age fifty-five (55) with five (5) Years of Service.
1.28 "Scheduled Distribution": a distribution described in Section 4.1.
1.29 "Section 409A": Section 409A of the Code.
1.30 "SERP Account": as defined in Section 3.6.
1.31 "SERP Credits": the credits described in Section 3.6.
1.32 "SERP Feature": a non-elective deferral feature available to that subset of otherwise eligible Employees, if any, whom the Administrator selects to benefit from the SERP Credit provisions of Section 3.6, and related provisions of the Plan.
1.33 "Separation from Service": separation from service with all Employers, voluntarily or involuntarily, other than by reason of death. Whether a leave of absence or other change in work status constitutes a separation from service shall be determined by the Administrator in a manner consistent with the requirements of Section 409A.
1.34 "Trust": a trust (if any) established by the Company in accordance with Article 15.
1.35 "Unforeseeable Financial Emergency": a severe financial hardship of the Participant resulting from (i) an illness or accident of the Participant, the Participant's spouse, or the Participant's dependent (as defined in Code Section 152(a)), (ii) a loss of the Participant's property due to casualty, or (iii) such other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, all as determined in the sole discretion of the Administrator.
1.36 "Years of Service": the total number of full years in which a Participant has been employed by one or more Employers. For purposes of this definition, a year of employment shall be a 365 day period (or 366 day period in the case of a leap year) that, for the first year of employment, commences on the Employee's date of hiring and that, for any subsequent year, commences on an anniversary of that hiring date. For purposes of determining a Participant's vested interest in his or her SERP Account, if any, Years of Service or portions thereof prior to January 1, 2006 shall not be taken into account.
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 SELECTION BY ADMINISTRATOR. Eligibility for the Plan shall be limited to those management or highly compensated Employees who are selected by the Administrator in its sole discretion. The Administrator shall separately select those management or highly compensated Employees, if any, who are eligible for the SERP Feature.
2.2 ENROLLMENT AND ELIGIBILITY REQUIREMENTS; COMMENCEMENT OF PARTICIPATION.
(a) To participate in the Plan, an eligible Employee must complete and execute (to the satisfaction of the Administrator) and return to the Administrator a Plan Agreement, an Election Form and a Beneficiary Designation Form. Except as herein provided or as otherwise permitted by the Administrator consistent with the requirements of Section 409A, any voluntary deferral under the Plan must be accomplished by the submission of the necessary forms prior to the first day of the Plan Year in which the relevant services are to be provided or by such earlier date as the Administrator may establish.
(b) An Employee who first becomes eligible to participate in this Plan after the first day of a Plan Year and who wishes to participate in elective deferrals for the remainder of such Plan Year must submit the necessary forms within thirty (30) days after he or she first becomes eligible to participate or by such earlier deadline as the Administrator may establish. A mid-year deferral election accomplished pursuant to this subsection (b) shall be effective only with respect to services performed after the election takes effect.
(c) An Employee who is selected to participate in the SERP Feature must complete such forms (including, if so required by the Administrator, an additional Plan Agreement, Election Form and Beneficiary Designation Form) as the Administrator may determine, regardless of whether the Employee is already a Participant under the non-SERP provisions of the Plan.
2.3 TERMINATION OF A PARTICIPANT'S ELIGIBILITY. The Administrator may at any
time terminate or curtail an individual's participation in the Plan as to
future deferrals, subject only to the caveat that any such termination or
curtailment shall be accomplished consistent with the requirements of
Section 409A.
ARTICLE 3
ACCOUNT CREDITS
3.1 ELECTIVE DEFERRALS: MINIMUM REQUIREMENTS. For any Plan Year, a Participant who wishes to participate in Elective Deferrals may do so subject to the following minimum deferral requirements:
DEFERRAL MINIMUM AMOUNT -------- -------------- Base Salary, Bonus and/or Commissions $2,000 aggregate |
If the Administrator determines, in its sole discretion, prior to the beginning of a Plan Year that a Participant has made an election for less than the stated minimum amounts, or if no election is made, the amount deferred shall be zero. If a Participant first becomes eligible to make Elective Deferrals during a Plan Year, the minimum Annual Deferral Amount shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12.
3.2 ELECTIVE DEFERRALS: MAXIMUM REQUIREMENTS. For any Plan Year, a Participant's Elective Deferrals, if any, shall be subject to the following percentage maxima:
DEFERRAL MAXIMUM PERCENTAGE -------- ------------------ Base Salary 90% Bonus 100% Commissions 100% |
If a Participant first becomes eligible to make Elective Deferrals during a Plan Year, the foregoing maximum percentages shall be applied to the future compensation affected by the Participant's mid-year election. For compensation that is earned based upon a specified performance period, "future compensation" shall be deemed for this purpose not to exceed the total amount of such compensation earned for the performance period, multiplied by a fraction, the numerator of which is the number of days remaining in the service period after the Participant's deferral election take effect, and the denominator of which is the total number of days in the performance period.
3.3 ELECTIVE DEFERRALS: EFFECT OF ELECTION FORM. Insofar as it relates to an Elective Deferral, an Election Form shall take effect not later than (i) the first day of the Plan Year next following the effective date of such form, or (ii) in the case of an Election Form relating to initial mid-year eligibility, a date specified by the Administrator that is not late than thirty (30) days following the date of such initial eligibility. Once it takes effect, the Election Form shall apply as follows: (A) to Base Salary and/or Commissions (other than Commissions described in clause (B)) earned with respect to services performed on or after the effective date, and (B) in the case of "performance-based compensation" (as determined in accordance with Section 409A) based on services performed over a period of at least twelve (12) months, to any such compensation payable with respect to a performance period ending at least six (6) months after the effective date. The Administrator shall prescribe such additional rules and limitations as it determines to be appropriate so that elective deferrals under the Plan comply with Section 409A.
3.4 ELECTIVE DEFERRALS: WITHHOLDING AND CREDITING OF DEFERRAL AMOUNTS. Elective Deferrals shall be credited to a Participant's Account on or as soon as practicable after the relevant payroll date on which the compensation, but for deferral, would have been paid.
3.5 COMPANY CREDITS. The Administrator may provide in a Plan Agreement, or on a discretionary basis outside of any Plan Agreement, for additional, non-elective credits (each, a "Company Credit") to the Participant's Account in accordance with this Section 3.5. Additional credits pursuant to this Section 3.5 may include, but are not necessarily limited to, credits intended to make up (in whole or in part) for matching contributions that could not be made under a tax-qualified defined contribution plan in which the Participant is a member; provided, that any such additional credit made hereunder shall be consistent with the requirements of Section 401(k)(4)(A) of the Code. Company Credit shall be credited to the Participant's Account at such times and in such amounts as the Administrator determines (consistent with the Plan Agreement, in the case of Company Credits provided for under a Plan Agreement). Company Credits, if any, need not be made with respect to all Participants and may vary as to amount and other terms from Participant to Participant.
3.6 SERP CREDITS.. In the case of a Participant who has been selected by the Administrator to participate in the SERP Feature, the Administrator shall establish a separate sub-account (the "SERP Account") and shall credit thereto such amounts or percentages of compensation as are specified in the Plan Agreement relating to the Participant's participation in the SERP Feature. Credits to a Participant's SERP Feature, where provided for by the applicable Plan Agreement, shall be made in accordance with the provisions of that Agreement regardless of whether the Participant is otherwise participating in the Plan.
3.7 VESTING.
(a) A Participant shall at all times be one hundred percent (100%) vested in his or her Deferral Account.
(b) A Participant shall be vested in his or her Company Credit Account and/or SERP Account, if any, in accordance with the vesting schedule(s) set forth in his or her Plan Agreement(s). If not addressed in such agreements, a Participant shall vest as follows:
COMPANY CREDIT ACCOUNT (IF ANY)
YEARS OF SERVICE VESTED PERCENTAGE ---------------- ----------------- Less than 1 year 0% 1 year or more, but fewer than 2 33% 2 years or more, but fewer than 3 66% 3 years or more 100% |
SERP ACCOUNT (IF ANY)
YEARS OF SERVICE VESTED PERCENTAGE ---------------- ----------------- Fewer than 5 years 0% 5 years or more, but fewer than 6 50% 6 years or more, but fewer than 7 60% 7 years or more, but fewer than 8 70% 8 or more years, but fewer than 9 80% 9 or more years, but fewer than 10 90% 10 or more years 100% |
(c) Except as otherwise expressly provided in the relevant Plan Agreement, in the event of a Change in Control or upon a Participant's Retirement or death while employed by an Employer, the unvested portion, if any, of a Participant's Company Credit Account (other than his or her SERP Account, if any) shall immediately become one hundred percent (100%) vested; provided, that except as otherwise provided in the Plan Agreement, if and to the extent the additional vesting described in this subsection (c) would, but for this proviso, cause the deductibility limitations of Section 280G of the Code to apply, vesting shall be accelerated only to such extent, if any, as will not result in the application of such deduction limitations. The Administrator shall make all determinations necessary or appropriate to implement the foregoing limitation but if so requested by an affected Participant in writing shall, within ninety (90) days of receiving such request, obtain at the Company's expense and provide to the Participant a copy of an opinion from a
nationally recognized accounting firm selected by the Participant (the "Accounting Firm"), with supporting computations, as to whether any limitation in the vested percentage hereunder is necessary to avoid the limits of Section 280G of the Code.
3.8 HYPOTHETICAL INVESTMENT RETURNS. Each Participant's Account shall be periodically adjusted (in such manner as the Administrator determines) to reflect hypothetical returns with respect to the Account, as follows:
(a) MEASUREMENT FUNDS. The Administrator shall select and may from time to time change (including as to existing Accounts that are deemed invested in an affected fund) a menu of investment funds (the "Measurement Funds") to be used to determine hypothetical investment experience under the Plan. The Participant may elect to have his or her Account invested on a hypothetical basis in one or more of the Measurement Funds, for the purpose of crediting or debiting additional amounts to his or her Account Balance, and may from time to time elect to reallocate such hypothetical investments. Any such election by the Participants shall be accomplished and given effect in accordance with such rules as the Administrator may prescribe. If a Participant does not elect a Measurement Fund, the Participant's Account Balance shall be treated as having been invested in such default Measurement Fund(s) as the Administrator may specify.
(b) NO ACTUAL INVESTMENT. The provisions of this Section 3.8 shall not be
construed to require the Administrator or any Employer to segregate,
set aside, or invest any assets for the payment of benefits under the
Plan. However, the Administrator in its discretion may provide for a
"rabbi trust" or similar vehicle to facilitate the payment of benefits
under the Plan so long as the existence, terms and funding of any such
trust or other vehicle do not cause the Plan to fail to be unfunded
for tax or ERISA purposes or to fail to satisfy the requirements of
Section 409A.
3.9 FICA AND OTHER TAXES. The Administrator may require that a Participant's cash or other compensation be reduced to satisfy any FICA tax or other tax due with respect to the deferral or vesting of any amount under the Plan or may require as part of a Plan Agreement or otherwise that the Participant make other arrangements for the payment of such taxes (which other arrangements may include, if the Administrator so determines, but shall not be limited to, a reduction in the Participant's Account Balance). Any distribution under the Plan shall be reduced by any required tax and other withholdings.
ARTICLE 4
SCHEDULED DISTRIBUTION OF DEFERRAL ACCOUNT; UNFORESEEABLE FINANCIAL EMERGENCIES
4.1 SCHEDULED DISTRIBUTION OF DEFERRAL ACCOUNT. Subject to such limitations (consistent with Section 409A) as the Administrator may prescribe, a Participant may specify in connection with the applicable annual or other deferral election pertaining to Elective Deferrals to have the portion of his or her Account attributable to such Elective Deferrals and related adjustments under Article 3 to be paid (a "Scheduled Distribution") in a lump sum during a sixty (60) day period commencing immediately after the first day of any Plan Year designated by the Participant (the "Scheduled Distribution Date"). The Scheduled Distribution Date designated by the Participant must be at least three (3) Plan Years after the end of the Plan Year to which the Participant's deferral election relates. By way of example, if a Scheduled Distribution is elected for Elective Deferral amounts earned in the Plan Year commencing January 1, 2006, the earliest Scheduled Distribution Date would be January 1, 2010, and the Scheduled Distribution would be payable during the sixty (60) day period commencing January 2, 2010.
4.2 POSTPONING SCHEDULED DISTRIBUTIONS. A Participant may elect to postpone a Scheduled Distribution described in Section 4.1 above, and have such amount paid out during a sixty (60) day period commencing immediately after an allowable alternative Scheduled Distribution Date designated by the Participant in accordance with this Section 4.2. In order to make this election, the Participant must submit a new Scheduled Distribution Election Form to the Administrator in accordance with the following:
(a) The new Scheduled Distribution Election Form must be submitted to and accepted by the Administrator (which has complete discretion as to whether to accept any new election) at least twelve (12) months prior to the Participant's previously designated Scheduled Distribution Date;
(b) The new Scheduled Distribution Date must be the first day of a Plan Year and must be at least five years after the previously designated Scheduled Distribution Date; and
(c) The new election shall not take effect until at least twelve (12) months after it is accepted by the Administrator.
4.3 OTHER BENEFITS TAKE PRECEDENCE OVER SCHEDULED DISTRIBUTIONS. Except as the Administrator otherwise determines to be necessary to comply with the requirements of Section 409A, a Deferral Account that become payable under Article 5, 6, 7 or 8 as of a date that precedes a Scheduled Distribution Date under this Article 4 shall be paid in accordance with Article 5, 6, 7 or 8, as the case may be, and not in accordance with this Article 4.
4.4 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES.
(a) If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Administrator to receive a partial or full payout from the Plan, subject to the provisions set forth below.
(b) The payout, if any, from the Plan shall not exceed the lesser of (i) the Participant's vested Account Balance, calculated as of the close of business on or around the date on which the amount becomes payable, as determined by the Committee in its sole discretion, or (ii) the amount necessary to satisfy the Unforeseeable Financial Emergency, plus amounts necessary to pay Federal, state, or local income taxes or penalties reasonably anticipated as a result of the distribution. Notwithstanding the foregoing, a Participant may not receive a payout from the Plan to the extent that the Unforeseeable Financial Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by cessation of deferrals under this Plan. The portion, if any, of a Participant's Account Balance attributable to his or her SERP Account shall not be taken into account in applying the provisions of this Section 4.4.
(c) If the Administrator approves a Participant's petition for payout, the Participant shall receive a payout from the Plan within sixty (60) days of the date of such approval, and the Participant's deferrals under the Plan shall be terminated as of the date of such approval.
(d) A Participant's deferral elections under this Plan shall also be terminated to the extent the Administrator determines that termination is required pursuant to applicable regulations to obtain a hardship distribution from an Employer's 401(k) plan and is consistent with the requirements of Section 409A.
ARTICLE 5
CHANGE IN CONTROL BENEFIT
If so elected by the Participant (any such election, except as the Administrator may otherwise determine, to be made irrevocably at commencement of participation in the Plan), the Participant's vested Account Balance shall be distributed in a lump sum payment within sixty (60) days following a Change in Control. Absent such election, the Participant's vested Account Balance shall be paid in accordance with the otherwise applicable provisions of the Plan.
ARTICLE 6
SEPARATION FROM SERVICE (OTHER THAN BY REASON OF DEATH)
6.1 SERP ACCOUNT. A Participant who participates in the SERP Feature and who separates from the service of the Employer shall be entitled to receive his or her vested SERP Account, if any, on (or, if payable in installments under the Annual Installment Method, commencing on) the later of (a) the date that is six months and one day after the date of separation from service), and (b) the date the Participant attains his or her 65th birthday. Any election by the Participant to receive payment of the SERP Account, if any, under the Annual Installment Method must be made (except as hereinafter provided) in connection with the Participant's commencement of participation in the SERP Feature and must specify the number of annual installments (not to exceed fifteen). A Participant who has elected or is deemed to have elected a lump sum payment of his or her vested SERP Account may subsequently elect installments instead, and a Participant who has elected installments may subsequently elect a lump sum instead; provided, that the new election shall not take effect for twelve (12) months and the new Benefit Distribution Date shall be the fifth (5th) anniversary of the Benefit Distribution Date that would otherwise have been applicable.
6.2 ACCOUNTS OTHER THAN SERP ACCOUNTS. That portion, if any, of a Participant's vested Account Balance that is not attributable to his or her SERP Account (if any) shall be distributed upon the Participant's separation from the service of the Employer as follows:
(a) If the separation is a Retirement, the applicable vested Account Balance shall be distributed on (or, if payable in installments under the Annual Installment Method, commencing on) the date that is six months and one day after the date of Retirement. Any election by the Participant to receive payment upon Retirement under the Annual Installment Method must be made (except as hereinafter provided) in connection with the Participant's commencement of participation and must specify the number of annual installments (not to exceed fifteen). A Participant who has elected or is deemed to have elected a lump sum payment of his or her vested Account Balance upon Retirement may subsequently elect installments instead, and a Participant who has elected installments may subsequently elect a lump sum instead; provided, that the new election shall not take effect for twelve (12) months and the new Benefit Distribution Date shall be the fifth (5th) anniversary of the Benefit Distribution Date that would otherwise have been applicable.
(b) If the separation is not a Retirement, the applicable vested Account Balance shall be distributed on (or, if payable in installments under the Annual Installment Method, commencing on) the date that is six months and one day after the date of separation. Any election by the Participant to receive payment upon Retirement under the Annual Installment Method must be made (except as hereinafter provided) in connection with the Participant's commencement of participation and must specify the number of annual installments (not to exceed five). A Participant who has elected or is deemed to have
elected a lump sum payment of his or her vested Account Balance upon Retirement may subsequently elect installments instead, and a Participant who has elected installments may subsequently elect a lump sum instead; provided, that the new election shall not take effect for twelve (12) months and the new Benefit Distribution Date shall be the fifth (5th) anniversary of the Benefit Distribution Date that would otherwise have been applicable.
ARTICLE 7
DISTRIBUTIONS ON ACCOUNT OF DEATH
The Beneficiary(ies) of a Participant who dies prior to the distribution of his or her entire vested Account Balance shall receive the remaining vested balance of the Account within (or, if payable in installments under the Annual Installment Method, commencing within) the sixty-day period immediately following the date on which the Administrator receives information satisfactory to the Administrator that the Participant has died, or by such earlier date as is required to comply with the requirements of Section 409A. The death benefit so payable to any Beneficiary shall be paid in a single lump sum unless the Participant elected, in connection with his or her participation, to have it paid under the Annual Installment Method. Any election of the Annual Installment Method must specify the number of annual installments (not to exceed three). A Participant who has elected or is deemed to have elected a lump sum payment of his or her vested Account Balance upon death may, during his or her remaining lifetime, subsequently elect installments instead, and a Participant who has elected installments may, during his or her remaining lifetime, elect a lump sum instead; provided, that the new election shall not take effect for twelve (12) months and the new Benefit Distribution Date shall be the fifth (5th) anniversary of the Benefit Distribution Date that would otherwise have been applicable.
ARTICLE 8
DISTRIBUTION OF SMALL ACCOUNTS
If, at the time an Account becomes payable under Article 4, 5, 6 or 7 thereof, the vested balance of such Account is $100,000 or less, payment shall be made in a single lump sum payment (or, if payable under Article 7 to more than one Beneficiaries, in lump sum payments) notwithstanding any election to have payment made under the Annual Installment Method.
ARTICLE 9
BENEFICIARY DESIGNATION
9.1 BENEFICIARY. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates.
9.2 BENEFICIARY DESIGNATION AND CHANGE. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Administrator. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Administrator's rules and procedures, as in effect from time to time. Upon the acceptance by the Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed by the Participant shall be canceled. The Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Administrator prior to his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Administrator.
9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a Beneficiary as provided above or if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then the Participant's designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the executor or personal representative of the Participant's estate.
9.5 DOUBT AS TO BENEFICIARY. If the Administrator has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, it shall have the right, exercisable in its discretion, to withhold payments until this matter is resolved to its satisfaction.
9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Administrator from all further obligations under this Plan with respect to the Participant, and that Participant's Plan Agreement shall terminate upon such full payment of benefits.
ARTICLE 10
AMENDMENT AND TERMINATION
10.1 TERMINATION OF PLAN. The Company has established the Plan with the expectation that it will continue the Plan indefinitely but reserves the right, exercisable in its absolute discretion, to terminate or suspend the Plan at any time. In the event of Plan termination or suspension, except as hereinafter provided, no additional amounts shall be credited to any Account pursuant to Article 3 other than positive or negative adjustments to reflect hypothetical investment performance under Section 3.8 and other than the crediting of such Elective Deferrals as to which a deferral election was in effect, prior to termination, for the Plan Year of termination and which the Administrator determines must continue to be given effect to comply with Section 409A. If the Plan is amended or terminated in accordance with the immediately preceding sentence, existing Accounts shall continue to be administered and paid out as though the Plan had not been terminated (and the Company shall have the continuing right to amend the Plan provisions affecting such Account, subject to Section 10.2 below). Notwithstanding the foregoing, if permitted by Section 409A and in accordance with such special rules as the Administrator may establish to comply with Section 409A, the Company may instead provide upon termination of the Plan that all Accounts shall be paid out in connection with such termination.
10.2 AMENDMENT. The Company may, at any time, amend or modify the Plan in whole or in part; provided, that no amendment or modification shall be effective if it would cause a Participant's Account Balance, determined immediately after the amendment takes effect, to be lower than it was immediately before the amendment took effect.
10.3 PLAN AGREEMENT. Despite the provisions of this Article 10, if a Participant's Plan Agreement contains benefits or limitations that are not in this Plan document, the Employer may only amend or terminate such provisions with the written consent of the Participant.
ARTICLE 11
ADMINISTRATION
11.1 IN GENERAL. The term "Administrator" as used in the Plan shall mean the person(s), board or committee principally charged with administrative responsibility under the Plan, as described in Section 11.2, and its or their delegates to the extent of the applicable delegation. The Administrator shall have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan, (ii) determine all issues of eligibility for participation in or benefits under the Plan, and (iii) subject to the terms of any procedures established pursuant to Article 13, decide or resolve any and all questions including interpretations of this Plan that may arise in connection with the Plan. No individual who has or to whom administrative responsibility is delegated hereunder, or who is a member of a board or committee that has or to which is delegated administrative responsibility hereunder, shall vote or act on any matter relating solely to himself or herself. When making a determination or calculation, the Administrator shall be entitled to rely on information furnished by a Participant or the Company.
11.2 ADMINISTRATION UPON CHANGE IN CONTROL. Prior to the occurrence of a Change
in Control, the Board or a committee of the Board shall (together with its
delegates) have the responsibility to administer the Plan. Within one
hundred and twenty (120) days following a Change in Control, the individual
who, immediately prior to the Change in Control, was the Company's Chief
Executive Officer or, if none, highest ranking officer (the "Ex-CEO") may
select an independent third party (with the approval of the trustee of any
trust that may have been established and funded to assist in the payment of
benefits under the Plan) to assume the administrative role of the Board or
committee of the Board; provided, that the Administrator as constituted
prior to the Change in Control shall continue to administer the Plan until
the earlier of (i) the date on which such independent third party is
selected and approved, or (ii) the expiration of the one hundred and twenty
(120) day period following the Change in Control; and further provided,
that if an independent third party is not selected and approved within one
hundred and twenty (120) days of such Change in Control, the Administrator
as constituted prior to the Change in Control shall continue to administer
the Plan. Upon and after a Change in Control, the Administrator shall have
no power to direct (or to appoint an investment manager to direct) the
investment of any assets that may have been set aside in trust to assist in
the payment of benefits under the Plan. Upon and after a Change in Control
the Company shall: (1) pay all reasonable administrative expenses and fees
of the Administrator; (2) indemnify the Administrator against any costs,
expenses and liabilities including, without limitation, attorney's fees and
expenses arising in connection with the performance of the Administrator
hereunder, except with respect to matters resulting from the gross
negligence or willful misconduct of the Administrator or its employees or
agents; and (3) supply full and timely information to the Administrator on
all matters relating to the Plan, any trust established in connection with
the Plan, the Participants and their Beneficiaries, the Account Balances of
the Participants, the date and circumstances of the Retirement, death or
other separation from service of the Participants, and such other pertinent
information as the Administrator may reasonably require.
11.3 AGENTS. In the administration of this Plan, the Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel, who may be counsel to any Employer.
11.4 BINDING EFFECT OF DECISIONS. The decision or action of the Administrator with respect to any question arising out of or in connection with the administration, interpretation and application of
the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
11.5 INDEMNITY OF ADMINISTRATOR. All Employers shall indemnify and hold harmless the members of the Administrator (including any Employee to whom administrative duties are delegated) against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct.
11.6 EMPLOYER INFORMATION. To enable the Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Administrator on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, death or separation from service of its Participants, and such other pertinent information as the Administrator may reasonably require.
ARTICLE 12
OTHER BENEFITS AND AGREEMENTS
The benefits provided for a Participant and Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided.
ARTICLE 13
CLAIMS PROCEDURES
The Administrator shall adopt and may from time to time amend procedures for the administration of claims and for the appeal of denied claims under the Plan, all in accordance with Section 503 of ERISA and the regulations thereunder.
ARTICLE 14
MISCELLANEOUS
14.1 STATUS OF PARTICIPANTS AND BENEFICIARIES AS GENERAL CREDITORS. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of any Employer. Their rights to benefits, if any, under the Plan shall be solely those of unsecured general creditors of the Employer and shall be limited to those contractual rights expressly set forth in the Plan and/or Plan Agreements applicable to them.
14.2 NON-ASSIGNABILITY. No Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, non-assignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
14.3 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant. Nothing in the Plan nor in any Plan Agreement shall limit in any way the Employer's rights to terminate any
Participant. The loss of benefits or potential benefits under the Plan by reason of the termination of a Participant's service with the Employer shall not constitute an element of damages in any claim brought by the Participant or his or her Beneficiary(ies) against the Employer.
14.4 CAPTIONS. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
14.5 GOVERNING LAW. Except as preempted by ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the Commonwealth of Massachusetts without regard to its conflicts of laws principles.
14.6 NOTICE. Any notice or filing required or permitted to be given to the Administrator or the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below:
Brooks Automation, Inc.
Attn: Chief Financial Officer
15 Elizabeth Drive
Chelmsford, MA 01824
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant as set forth in the records of the Company.
14.7 SUCCESSORS. The provisions of this Plan shall bind and inure to the benefit of the Company and other Employer and their successors and assigns, and on the Participant and the Participant's designated Beneficiaries. By executing and delivering a Plan Agreement, a Participant agrees on his or her own behalf and on behalf of all Beneficiaries to be bound by the terms of the Plan and the Plan Agreement.
14.8 INVALIDITY. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.
14.9 INCOMPETENTS. If the Administrator determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Administrator may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Administrator may require such documents and other information as it deems necessary or appropriate to administer the foregoing provisions. Any payment of a benefit shall be a payment for the account of the Participant or the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment.
14.10 DISTRIBUTION IN THE EVENT OF INCOME INCLUSION UNDER 409A. If any portion of a Participant's Account Balance under this Plan is required to be included in income by the Participant prior to receipt owing to a failure of this Plan to meet the requirements of Section 409A, the Participant may petition the Administrator for a distribution of that portion of his or her Account Balance that is required to be included in his or her income. Upon the grant of such a petition, which grant shall not be unreasonably withheld, the Participant's Employer shall distribute to the Participant immediately available funds in an amount equal to the lesser of (i) the portion of his
or her Account Balance required to be included in income as a result of the failure of the Plan to meet the requirements of Section 409A, or (ii) the unpaid vested Account Balance.
14.11 DEDUCTION LIMITATION ON BENEFIT PAYMENTS. If the Company reasonably
anticipates that the Employer's deduction with respect to any distribution
from this Plan would be limited or eliminated by application of Code
Section 162(m), then payment shall be delayed to the extent deemed
necessary by the Administrator to ensure that the entire amount of any
distribution from this Plan is deductible. The delayed amounts, adjusted
pursuant to Section 3.8, shall be distributed to the Participant (or his or
her Beneficiary in the event of the Participant's death) at the earliest
date the Employer reasonably anticipates that the deduction of the payment
of the amount will not be limited or eliminated by application of Code
Section 162(m) or, if earlier, by the close of the calendar year in which
the Participant separates from service.
14.12 EFFECT OF RESTATEMENT. The provisions of the Plan as set forth herein represent the amendment and restatement of the Plan effective June 20, 2006.
14.13 COMPLIANCE WITH SECTION 409A GENERALLY. The Administrator may deviate from the express terms of the Plan or any Plan Agreement if it determines such deviation to be necessary to comply with the requirements of Section 409A. The Administrator may also, notwithstanding the otherwise applicable restrictions on elections and payment under the Plan, establish opportunities for Participants and Beneficiaries to make any special elections permitted under the transition rules under Section 409A.
IN WITNESS WHEREOF, the Company has signed this amended and restated Plan document as of ___________________, 2006.
Brooks Automation, Inc., a Delaware corporation
APPENDIX A
Change in Control
For purposes of the Plan, the term "Change in Control" means the occurrence of any of the events described in subsections (i), (ii), (iii) or (iv) below:
(i) Any Person acquires beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of thirty-five (35%) percent or more
of either (x) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (y) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
that for purposes of this subsection (i) the following acquisitions shall not
constitute a Change in Control: (I) any acquisition directly from the Company,
(II) any acquisition by the Company, (III) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the Employer, or (IV)
any Business Combination (but except as provided in subsection (iii) below a
Business Combination may nevertheless constitute a Change in Control under
subsection (iii)); and provided further, that an acquisition by a Person of
thirty-five percent (35%) percent or more but less than fifty (50%) percent of
the Outstanding Company Common Stock or of the combined voting power of the
Outstanding Company Voting Securities shall not constitute a Change in Control
under this subsection (i) if within fifteen (15) days of the Board's being
advised that such ownership level has been reached, a majority of the "Incumbent
Directors" (as hereinafter defined) then in office adopt a resolution approving
the acquisition of that level of securities ownership by such Person; or
(ii) Individuals who, as of March 23, 2006, constituted the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board; provided, that any individual who becomes a member of the Board subsequent to March 23, 2006 and whose election or nomination for election was approved by a vote of at least two-thirds of the Incumbent Directors shall be treated as an Incumbent Director unless he or she assumed office as a result of an actual or threatened election contest with respect to the election or removal of directors; or
(iii) There is consummated a reorganization, merger or consolidation involving the Company, or a sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case unless, following such Business Combination, (x) the Persons who were the beneficial owners, respectively, of the Outstanding Company Common Stock and of the combined voting power of the Outstanding Company Voting Securities immediately prior to the Business Combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Business Combination in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and of the combined voting power of the Outstanding Company Voting Securities, as the case may be, (y) unless in connection with such Business Combination a majority of the Incumbent Directors then in office determine that this clause (iii)(y) does not apply to such Business Combination, no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Employer or of such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, thirty-five (35%) percent or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed prior to the Business Combination and (z) at least a majority of the members of the Board resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(iv) The stockholders of the Company approve a complete liquidation or dissolution of the Company;
provided, that if any payment or benefit payable hereunder upon or following a Change in Control (as defined herein) would be required to comply with the limitations of Section 409A(a)(2)(A)(v) of the Code and the guidance thereunder in order to avoid an additional tax under Section 409A of the Code, such payment or benefit shall be made only if such Change in Control constitutes a change in ownership or control of the Company, or a change in ownership of the Company's assets, described in IRS Notice 2005-1, the proposed regulations under Section 409A of the Code, or any successor guidance.
For purposes of this Appendix A, "Person" means any individual, entity or other person, including a group within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act; and "Exchange Act" means the Securities Exchange Act of 1934, as amended.
Exhibit 10.31
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (this "AMENDMENT") is entered into as of the 24th day of July, 2000, by and between BCIA NEW ENGLAND HOLDINGS LLC, a Delaware limited liability company with an address of One Boston Place, Boston, Massachusetts 02108-4406 ("LANDLORD") and PRI AUTOMATION, INC., a Massachusetts corporation, formerly known as Precision Robots, Inc., with an address of 805 Middlesex Turnpike, Billerica, Massachusetts 01821 ("TENANT").
RECITALS
A. Landlord is the owner of certain real property located and known as 805 Middlesex Turnpike, Billerica, Massachusetts (the "LOT") and the building thereon (the "BUILDING") (the Lot, together with the Building and all other improvements thereon, are hereinafter collectively referred to as the "PREMISES");
B. Reference is made to that certain lease dated as of May 5, 1994 entered into between The Prudential Insurance Company of America, as predecessor in interest to Landlord, as landlord (the "ORIGINAL Landlord"), and Precision Robots, Inc., as tenant, with respect to the Premises;
C. Landlord is the current owner of the Premises and the current holder of the landlord's interest under the Lease, and Tenant is the current holder of the tenant's interest under the Lease;
D. Pursuant to the Lease, Tenant has been, and is now, in occupancy of the Premises;
E. Pursuant to the Lease, the term thereof is set to expire on July 31, 2001;
F. Landlord and Tenant desire to amend the Lease in order to, among other things, extend the term of the Lease upon the terms and conditions set forth herein;
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which is hereby mutually acknowledged, Landlord and Tenant hereby agree as follows:
AGREEMENTS
1. CAPITALIZED TERMS. Each capitalized term appearing but not defined herein shall have the meaning, if any, ascribed to such term in the Lease.
2. RECITALS. The recitals above set forth are true and complete and are incorporated herein by reference.
3. AMENDMENTS. As of the date hereof, the Lease is amended as follows:
a. LANDLORD. Throughout the Lease, the words "The Prudential Insurance Company of America" are hereby deleted and the words "BCIA New England Holdings LLC, a Delaware limited liability company" are hereby inserted in lieu thereof.
b. TENANT. Throughout the Lease, the words "Precision Robots, Inc." are hereby deleted and the words "PRI Automation, Inc., a Massachusetts corporation" are hereby inserted in lieu thereof.
c. REFERENCE DATA. In Exhibit 1 to the Lease (REFERENCE DATA):
(i) In the section thereof in which the term "Premises" is defined, the words "consisting of 122,342 square feet (SF)" are hereby deleted and the words "agreed to contain 122,342 square feet (SF)" are hereby inserted in lieu thereof.
(ii) In the section thereof in which the term "Term" is defined, the words "Seven (7) years" are hereby deleted and the words "Seventeen (17) years" are hereby inserted in lieu thereof.
(iii) In the section thereof in which the term "Rent" is defined, the following language is hereby inserted at the end thereof:
"Year 8 $19.50 per SF Net, Net, Net, $2,385,669 per year; $198,805.75 per month Year 9 $19.50 per SF Net, Net, Net, $2,385,669 per year; $198,805.75 per month Year 10 $19.50 per SF Net, Net, Net, $2,385,669 per year; $198,805.75 per month Year 11 $19.50 per SF Net, Net, Net, $2,385,669 per year; $198,805.75 per month Year 12 $19.50 per SF Net, Net, Net, $2,385,669 per year; $198,805.75 per month Year 13 $23.50 per SF Net, Net, Net, $2,875,037 per year; $239,586.42 per month Year 14 $23.50 per SF Net, Net, Net, $2,875,037 per year; $239,586.42 per month Year 15 $23.50 per SF Net, Net, Net, $2,875,037 per year; $239,586.42 per month Year 16 $23.50 per SF Net, Net, Net, $2,875,037 per year; $239,586.42 per month Year 17 $23.50 per SF Net, Net, Net, $2,875,037 per year; $239,586.42 per month" |
d. EXPIRATION DATE. In ARTICLE I of the Lease (TERM), in the third
(3rd) line of the first (1st) paragraph thereof, the date "July
31, 2001" is hereby deleted and the date "July 31, 2011" is
hereby inserted in lieu thereof.
e. TAXES. In ARTICLE II of the Lease (PAYMENT OF RENT), in Section 2.2 thereof (Taxes), the second and third sentences thereof are hereby
deleted effective as of August 1, 2000 and the following sentences are hereby inserted in place thereof as of such date:
"Estimated payments by Tenant on account of Taxes shall be made on the first day of each and every calendar month during the Term of this Lease, in the fashion herein provided for the payment of fixed rent. The monthly amount so to be paid to Landlord shall be sufficient to provide Landlord by the time real estate tax payments are due with a sum equal to Tenant's required payment, as reasonably estimated by Landlord from time to time, on account of Taxes for the then current Tax Year as hereinafter defined. "Tax Year" shall mean a twelve (12) month period commencing on July 1 and falling wholly or partially within the Term. Once annually, Landlord shall advise Tenant of the amount of the tax bills for the prior Tax Year and the computation of Tenant's payment on account thereof. If estimated payments theretofore made by Tenant for the Tax Year covered by such bills exceed the required payment on account thereof for such Tax Year, Landlord shall credit the amount of overpayment against subsequent obligations of Tenant on account of Taxes (or promptly refund such overpayment if the Term of this Lease has ended and Tenant has no further obligation to Landlord); but if the required payments on account thereof for such Tax Year are greater than estimated payments theretofore made on account thereof for such Tax Year, Tenant shall pay the difference to Landlord as additional rent within thirty (30) days after being so advised by Landlord in writing, and the obligation to make such payment for any period within the Term shall survive the expiration or earlier termination of the Term."
f. INSURANCE. In ARTICLE II of the Lease (PAYMENT OF RENT), in
Section 2.2.3 thereof (Insurance), the following shall be added
to the end of the first sentence thereof:
"; provided, however, that from and after August 1, 2000, Tenant shall provide Comprehensive Liability Insurance indemnifying Landlord and Tenant against all claims and demands for any injury to person or property which may be claimed to have occurred on the Premises or at the Property as follows: $5,000,000.00 per occurrence/$10,000,000.00 aggregate (combined single limit) for property damage, bodily injury or death."
g. UTILITIES. Section 2.3 of the Lease is hereby deleted and the following is hereby inserted in its place: "2.3 UTILITIES Tenant agrees to pay directly to the utility companies providing utilities to the Premises all charges for utilities consumed at the Premises, including without limitation, gas, electricity, and water and sewer charges."
h. ADDITIONAL COVENANTS. In ARTICLE III of the Lease (ADDITIONAL COVENANTS OF TENANT):
(i) In Section 3.1.2 thereof, (A) the first sentence thereof is hereby amended to insert the words: "the roof and" before the word "both", (B) in the fourth sentence thereof, the phrase "make all repairs to the Building" is hereby replaced by the phrase: "make all repairs and replacements to the Premises except the Landlord's Repair Obligations, as defined below," and (C) the last sentence thereof is hereby deleted and replaced with the following:
"Notwithstanding anything to the contrary herein contained,
except as otherwise provided in this Lease, Landlord agrees
to perform the following ("Landlord's Repair Obligations"):
(a) to keep in good order, condition and repair the
Structure, as defined below, of the Building and (b) to
replace the roof of the Building and the HVAC system of the
Building when and if required in Landlord's sole reasonable
judgment. If, during the Term of this Lease, Landlord shall
make a capital expenditure for replacement of the HVAC
system of the Building, then, (1) to the extent that any
individual capital expenditure for such purpose shall be
less than $25,000.00 or any set of capital expenditures for
such purpose shall be less than $50,000.00 in any calendar
year, Tenant shall pay to Landlord the amount thereof as
additional rent hereunder within thirty (30) days of written
notice thereof and (2) to the extent that any individual
capital expenditure for such purpose shall exceed $25,000.00
or any set of capital expenditures for such purpose shall
exceed $50,000.00 in any calendar year, Tenant shall pay to
Landlord as additional rent hereunder, in equal monthly
installments for the remainder of the Term, from and after
the date of such expenditure(s), an amount for each such
calendar year equal to the annual charge-off of such capital
expenditure. Annual charge-off shall be determined by
dividing the original capital expenditure or expenditures
PLUS an interest factor, reasonably determined by Landlord,
as being the greater of (a) the per annum interest rate then
being charged for long-term mortgages by institutional
lenders on like properties within the locality in which the
Property is located or (b) twelve percent (12%) per annum,
by the number of years of useful life of the capital
expenditure or expenditures; and the useful life shall be
determined reasonably by Landlord in accordance with
generally accepted accounting principles and practices in
effect at the time of making such expenditure or
expenditures. As used herein the term "Structure" means the
load bearing portions of the walls, columns, beams, concrete
slab, footings, and structural beams of the roof, in each
case necessary to preserve the load bearing capacity
thereof, and the outer facade of the outer walls
(specifically excluding all windows, window casings, glass,
and doors)."
(ii) The following is hereby inserted at the end of Section 3.3:
"If Tenant assigns this Lease or sublets or otherwise
permits occupancy of the Premises or any portion thereof and
Landlord consents to the same, Tenant shall pay to Landlord
as additional rent, fifty percent (50%) of the amount, if
any, by which (a) any and all compensation received by
Tenant as a result of such assignment or sublease, or other
occupancy, net of reasonable expenses actually incurred by
Tenant in connection with such assignment or sublease or
other occupancy (with fit-up costs and brokerage fees being
amortized without interest over the remaining Term (or, with
respect to fit-up costs, the useful life thereof, if greater
than the remaining Term) and with such amortization and such
excess payments being recalculated upon any extension or
renewal of the Term hereof) exceeds (b) in the case of an
assignment, the Rent under this Lease, and in the case of a
sublease or other occupancy, the portion of the Rent
allocable to the portion of the Premises subject to such
subletting or other occupancy. Such payments shall be made
on the date the corresponding payments under this Lease are
due."
i. RIGHTS OF MORTGAGEES. In ARTICLE VII of the Lease (MISCELLANEOUS), Section 7.2 thereof is hereby amended and restated to read in its entirety as follows:
7.2 RIGHTS OF MORTGAGEES.
7.2.1 GENERAL. Provided Tenant receives a fully-executed original of the SNDA, as defined below, or a similar instrument reasonably acceptable to Tenant, this Lease shall be subject and subordinate to the lien and terms of any mortgage, deed of trust or ground
lease or similar encumbrance (collectively, a "Mortgage", and the holder thereof from time to time the "Holder") from time to time encumbering the Premises, whether executed and delivered prior to or subsequent to the date of this Lease; provided, however, that the Holder may at any time elect to subordinate the lien and terms of any such Mortgage to this Lease. If this Lease is subordinate to any Mortgage and the Holder or any other party shall succeed to the interest of Landlord pursuant to the Mortgage (such Holder or other party, a "Successor"), Tenant shall attorn to the Holder or Successor and this Lease shall continue in full force and effect between the Holder or Successor and Tenant. Tenant agrees to execute such instruments of subordination or attornment in confirmation of the foregoing agreement as the Holder or Successor reasonably may request. With respect to each Mortgage encumbering the Premises from time to time during the Term, Tenant agrees to execute a subordination, non-disturbance and attornment agreement ("SNDA") in substantially the form attached hereto as EXHIBIT C, and Landlord shall cause the current Holder of
the current Mortgage, and make reasonable efforts to cause any future Holder of any future Mortgage, to execute same, and upon any such execution Landlord shall deliver such executed SNDA to Tenant.
7.2.2 ASSIGNMENT OF RENTS AND TRANSFER OF TITLE. With reference to any assignment by Landlord of Landlord's interest in this Lease, or the rents payable hereunder, conditional in nature or otherwise, which assignment is made to the Holder of a Mortgage on property which includes the Premises, Tenant agrees that the execution thereof by Landlord, and the acceptance thereof by the Holder of such Mortgage shall never be treated as an assumption by such Holder of any of the obligations of Landlord hereunder unless such Holder shall, by notice sent to Tenant, specifically otherwise elect and, except as aforesaid, such Holder shall be treated as having assumed Landlord's obligations hereunder only upon foreclosure of such Holder's Mortgage and the taking of possession of the Premises.
(a) In no event shall the acquisition of Landlord's interest in the Premises by a purchaser which, simultaneously therewith, leases Landlord's entire interest in the Premises back to the seller thereof be treated as an assumption by operation of law or otherwise, of Landlord's obligations hereunder, but Tenant shall look solely to such seller-lessee, and its successors from time to time in title, for performance of Landlord's obligations hereunder. In any such event, this Lease shall be subject and subordinate to the lease to such purchaser. For all purposes, such seller-lessee, and its successors in title, shall be the Landlord hereunder unless and until Landlord's position shall have been assumed by such purchaser-lessor. Landlord shall, however, make reasonable efforts to cause such purchaser-lessor to execute an SNDA with Tenant substantially in the form of EXHIBIT C hereto, and upon any such execution Landlord shall deliver such executed SNDA to Tenant.
(b) Except as provided in subsection (a) above, in the event of any transfer of title to the Premises by Landlord, Landlord shall thereafter be entirely freed and relieved from the performance and observance of all covenants and obligations hereunder which accrue after the date of such transfer.
7.2.3 NOTICE TO MORTGAGEE. After receiving written notice from Landlord of any Holder of a Mortgage which includes the Premises, no
notice from Tenant to Landlord alleging any default by Landlord shall be effective unless and until a copy of the same is given to such Holder (provided Tenant shall have been furnished with the name and address of such Holder), and the curing of any of Landlord's defaults by such Holder shall be treated as performance by Landlord.
j. TENANT'S PREPARATION OF PREMISES. In ARTICLE VIII of the Lease (LEASEHOLD IMPROVEMENTS):
(i) In the last paragraph of Section 8.1 of the Lease (Landlord's Work), the $75,000 payment thereunder shall only be due and payable by Tenant if (a) Tenant is in default under the Lease beyond all applicable notice and cure periods, if any, and (b) Landlord exercises any of its remedies as set forth in Article V.
(ii) Section 8.2 (Tenant's Preparation of the Premises) is hereby
amended to insert the following language at the end of the
first paragraph thereof: "The foregoing provisions of this
Section 8.2 shall be applicable to Tenant's initial fit up
of the Premises at the commencement of the Term. Commencing
on August 1, 2000, Landlord shall provide Tenant with a
second leasehold improvement allowance (the "Second
Leasehold Improvement Allowance") of an amount not to exceed
$428,197.00 in the aggregate for painting, carpeting,
reconfiguring architecture, engineering and other costs
within thirty (30) days of presentation of invoices to
Landlord in reasonable detail. Any of the Second Leasehold
Improvement Allowance for which disbursement requests have
not been made by December 31, 2001 shall be forfeited by
Tenant and Landlord shall have no further obligation with
respect thereto.
(iii) The following is hereby inserted into the Lease as a new
Section 8.5:
"8.5 (Minor Alterations)
Notwithstanding any provision of this Lease to the contrary, without the consent of Landlord, Tenant shall have the right to make alterations to the interior of the Building so long as (a) the cost of the same does not exceed $25,000 in any calendar year, (b) the same does not adversely affect any building system or the Structure of the Building."
(iv) The following is hereby inserted as a new Section 8.6:
"8.6 (Reseal/Restripe)
Landlord agrees to use reasonable efforts to reseal and restripe the Parking Lot adjoining the Building on or before December 31, 2000 or if Landlord is unable to do so, then as soon thereafter as is reasonably practicable."
k. NOTICES. ARTICLE IX of the Lease (NOTICES) is hereby amended as follows:
(1) to change the provision for notice to Landlord to the following: "All notices for Landlord shall be addressed to Landlord c/o Boston Capital Institutional Advisors LLC, One Boston Place, Boston, Massachusetts 02108-4406, Attn: Karl W. Weller, Managing Director, with a copy to Michael F. Burke, Esq., Peabody & Arnold LLP, 50 Rowes Wharf, Boston, Massachusetts 02110, or at such other place as may be designated in written notice to Tenant"; and
(2) to delete the last sentence thereof and insert the following in its place: "Unless otherwise directed in writing, all rents shall be payable to Landlord c/o Fleet Lock Box, Boston Capital, Box 31130, 99 Founder's Plaza, Hartford, CT 06150 or at such other place as Landlord shall from time to time designate by notice to Tenant."
l. OPTION TO EXTEND. The following language is hereby inserted into the Lease as Article XIII:
"ARTICLE XIII
OPTION TO EXTEND
13.1 Provided that Tenant is not then in default hereunder beyond
applicable cure periods, if any, Tenant shall have the option (the
"Extension Option") to extend the Term of this Lease for an additional
period of five (5) years commencing on August 1, 2011 and expiring on
July 31, 2016 (the "Extension Term"). The Extension Option may be
exercised by Tenant delivering to Landlord written notice thereof (the
"Tenant Extension Notice") not earlier than February 1, 2010 and not
later than July 31, 2010. The Extension Term shall be upon all of the
same terms, covenants and conditions of this Lease as are in effect
upon Tenant's exercise of such Extension Option, except (i) as to
Annual Fixed Rent, which shall be determined as set forth below, and
(ii) that Tenant shall have no further extension rights unless
otherwise agreed to in writing by Landlord.
Notwithstanding any provision herein to the contrary, the Extension Option shall be null and void upon the occurrence of any of the following events: (i) Tenant's failure to exercise the Extension Option within the aforementioned time period in accordance with the provisions set forth herein, or (ii) Tenant assigning its interest in this Lease, or (iii)
Tenant at the time of such exercise having subleases in effect which total more than 25% of the square footage in the Building.
13.2 If Tenant exercises the Extension Option as provided in Section 13.1 above, then the annual fixed rental (Rent), as described in Section 2.1 of this Lease and in Exhibit 1 to this Lease, for the Extension Term shall be the greater of (i) $2,875,037 or (ii) the Fair Market Rent. As used herein, the term "Fair Market Rent" means the Annual Fixed Rent as determined: (i) by agreement between Landlord and Tenant, negotiating in good faith, no later than thirty (30) days after Tenant's timely exercise of the Extension Option, or (ii) if Landlord and Tenant shall not have agreed upon the Fair Market Rent by said date as aforesaid (an "Impasse"), then Fair Market Rent for the Extension Term shall be fixed by means of an Appraisers' Determination as defined below.
13.3 The term "Appraisers' Determination" refers to the following procedures and requirements:
If an Impasse, as defined in Section 13.2 of this Lease, occurs, then, for the purpose of fixing the Fair Market Rent for the Extension Term, Landlord and Tenant shall agree upon an appraiser who shall be a member of the M.A.I. or Counselors of Real Estate (CRE) (or successor professional organizations) and shall have at least ten (10) years experience appraising rental values of comparable properties in the greater Boston market area.
If Landlord and Tenant are not able to agree upon an appraiser by the
date which is ten (10) days after such an Impasse (the "Appraiser
Selection Deadline"), each of Landlord and Tenant shall, within ten
(10) additional days, that is, by the date which is twenty (20) days
after an Impasse, select an appraiser with the foregoing
qualifications whereupon each of said appraisers shall, within five
(5) days of their selection hereunder, select a third appraiser with
the foregoing qualifications. The Fair Market Rent for the Extension
Term shall thereafter be determined to be the amount equal to the
average of the two appraisals which are closest in dollar amount to
each other except that if all three appraisals are apart in equal
amounts, then the appraisal which falls in the middle shall be the
Fair Market Rent for the Extension Term. If either party fails to
select an appraiser by the Appraiser Selection Deadline, then the
appraiser selected by the other party, if selected by the Appraiser
Selection Deadline, shall be the sole appraiser. Landlord and Tenant
shall share equally the expense of any and all appraisers. The
appraiser(s) shall be obligated to make a determination of Fair Market
Rent within thirty (30) days of the appointment of either the single
appraiser (if only one) and within thirty (30) days of the appointment
of the third appraiser (if three are so appointed). In determining the
Fair Market Rent for the Extension Term, the appraisers shall
consider, among other things, the then current arms length basic rent
being charged to tenants for comparable properties in the greater Boston market area. The appraisers shall not have the right to modify any provision of this Lease and shall only determine the Fair Market Rent which shall constitute the annual fixed rent (Rent) under this Lease for the Extension Term.
m. EXHIBIT C attached to this Amendment is hereby inserted into the Lease as EXHIBIT C thereto.
4. BROKERS. Landlord and Tenant each represent that there are no brokers involved with respect to this Amendment other than Meredith & Grew Incorporated and Spaulding & Slye/Colliers and each party agrees to indemnify, defend and hold harmless the other with respect to any other broker in connection herewith. Landlord shall be responsible for any commission due to Meredith & Grew Incorporated and Spaulding & Slye/Colliers with respect to the transaction contemplated by this Amendment.
5. EFFECTIVE DATE. The parties agree that this Amendment shall be effective from and after the date hereof and not to any period of time prior thereto. To the extent this Amendment contains language which purports to amend the Lease with respect to periods of time prior to the date hereof, such language is for clarification purposes only and shall not be deemed to change the obligations of the parties with respect thereto. In no event shall this Amendment be construed to impose any liability on Landlord for any period of time preceding its ownership of the Premises.
6. RATIFICATION OF LEASE PROVISIONS. Except as otherwise expressly amended, modified and provided for in this Amendment, Tenant hereby ratifies all of the provisions, covenants and conditions of the Lease, and such provisions, covenants and conditions shall be deemed to be incorporated herein and made a part hereof and shall continue in full force and effect.
7. ENTIRE AMENDMENT. This Amendment contains all the agreements of the parties with respect to the subject matter hereof and supersedes all prior dealings between the parties with respect to such subject matter.
8. BINDING AMENDMENT. This Amendment shall be binding upon, and shall inure to the benefit of the parties hereto, and their respective successors and assigns.
9. GOVERNING LAW. This Amendment shall be governed by the law of the state in which the Premises is located and the parties hereby submit to the jurisdiction of such state.
10. SEVERABILITY. If any clause or provision of this Amendment is or should ever be held to be illegal, invalid or unenforceable under any present or future law applicable to the terms hereof, then and in that event, it is the intention of the parties hereto that the remainder of this Amendment shall not be affected thereby, and that in lieu of each such clause or provision of this Amendment that is illegal, invalid or unenforceable, such clause or provision shall be judicially construed and interpreted to be as similar in substance and content to such illegal,
invalid or unenforceable clause or provision, as the context thereof would reasonably suggest, so as to thereafter be legal, valid and enforceable.
11. NO RESERVATION. Submission of this Amendment for examination or signature is without prejudice and does not constitute a reservation, option or offer, and this Amendment shall not be effective until execution and delivery by all parties.
12. COUNTERPARTS. This Amendment may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
[The Remainder of this Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal as of the date and year first above written.
LANDLORD:
BCIA NEW ENGLAND HOLDINGS LLC, a Delaware
limited liability company
By: BCIA NEW ENGLAND HOLDINGS MASTER LLC,
a Delaware limited liability company,
its Manager
By: BCIA NEW ENGLAND HOLDINGS MANAGER LLC,
a Delaware limited liability company,
its Manager
By: BCIA NEW ENGLAND HOLDINGS MANAGER
CORP., a Delaware corporation,
its Manager
By: /s/ Karl W. Weller -------------------------------------- Name: Karl W. Weller Title: EVP |
TENANT:
PRI AUTOMATION, INC.,
a Massachusetts corporation
By: /s/ Cosmo S. Trapani -------------------------------------- Name: Cosmo S. Trapani Title: VP & CFO |
EXHIBIT C
Form of Subordination, Non-Disturbance and Attornment Agreement THIS AGREEMENT is made and entered into as of the _____ day of _________, _____ by and between THE CHASE MANHATTAN BANK, as Trustee under that certain Pooling and Servicing Agreement dated as of November 1, 1999 for Certificateholders of the Office Finance Corp Commercial Mortgage Pass-Through Certificates Series 1999-FL1 ("MORTGAGEE"), and Power-One, Inc., a Delaware corporation ("LESSEE").
RECITALS:
A. Mortgagee has made a loan (the "LOAN") to BCIA New England Holdings LLC, a Delaware limited liability company ("BORROWER"), secured by the Borrower's interest in the real property known and numbered 805 Middlesex Turnpike, Billerica, Massachusetts, and more particularly described in EXHIBIT A attached hereto and incorporated herein by reference (said real property and improvements being herein called the "PROJECT"), such Loan being secured by a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated _________________ (the "MORTGAGE"), and recorded with the _____________ Registry of Deeds in Book ____, Page ___, which Mortgage constitutes a lien or encumbrance on the Project; and
B. Lessee is the holder of a leasehold estate in and to the Project (the "DEMISED PREMISES"), under that Lease Agreement (the "LEASE") dated _______________, 2000, executed by Borrower, as Landlord (Borrower being sometimes hereinafter called "LESSOR"), and Lessee, as Tenant; and
C. Lessee and Mortgagee desire to confirm their understandings with respect to the Lease and the Mortgage.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, Lessee and Mortgagee agree and covenant as follows:
1. NON-DISTURBANCE. Mortgagee agrees that it will not disturb the possession of Lessee under the Lease upon any judicial or non-judicial foreclosure of the Mortgage or upon acquiring title to the Project by deed-in-lieu of foreclosure, or otherwise, if the Lease is in full force and effect and Lessee is not then in default under the Lease, and that Mortgagee will accept the attornment of Lessee thereafter so long as Lessee is not in default under the Lease.
2. ATTORNMENT. If the interests of Lessor in and to the Demised Premises are owned by Mortgagee by reason of any deed-in-lieu of foreclosure, judicial foreclosure, sale pursuant to any power of sale or other proceedings brought by it or by any other manner, including, but not limited to, Mortgagee's exercise of its rights under any assignment of leases and rents, and Mortgagee succeeds to the interest of Lessor under the Lease, Lessee shall be bound to Mortgagee under all of the terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any extension thereof duly exercised by Lessee with the same
force and effect as if Mortgagee were the Lessor under the Lease; and Lessee does hereby attorn to Mortgagee, as its lessor, said attornment to be effective and self-operative, without the execution of any further instruments on the part of any of the parties hereto, immediately upon Mortgagee's succeeding to the interest of Lessor under the Lease; provided, however, that Lessee shall be under no obligation to pay rent to Mortgagee until Lessee receives written notice from Mortgagee that Mortgagee has succeeded to the interest of the Lessor under the Lease or otherwise has the right to receive such rents. The respective rights and obligations of Lessee and Mortgagee upon such attornment, to the extent of the then remaining balance of the term of the Lease, shall be and are the same as now set forth therein, it being the intention of the parties hereto for this purpose to incorporate the Lease in this Agreement by reference, with the same force and effect as if set forth in full herein.
3. MORTGAGEE'S OBLIGATIONS. If Mortgagee shall succeed to the interest of Lessor under the Lease, Mortgagee, subject to the last sentence of this Paragraph 3, shall be bound to Lessee under all of the terms, covenants and conditions of the Lease; provided, however, that Mortgagee shall not be:
(a) Liable for any act or omission of any prior lessor (including Lessor); or
(b) Subject to the offsets or defenses which Lessee might have against any prior lessor (including Lessor); or
(c) Bound by any rent or additional rent or advance rent which Lessee might have paid for more than the current month to any prior lessor (including Lessor), and all such rent shall remain due and owing, notwithstanding such advance payment; or
(d) Bound by any security or advance rental deposit made by Lessee which is not delivered or paid over to Mortgagee and with respect to which Lessee shall look solely to Lessor for refund or reimbursement;
(e) Bound by any termination, amendment or modification of the Lease made without its consent and written approval;
(f) Liable under any warranty of construction contained in the Lease or any implied warranty of construction; or
(g) Liable for the performance or completion of any construction obligations under the Lease or for any loan or contribution or rent concession towards construction of the Demised Premises pursuant to the Lease.
Neither THE CHASE MANHATTAN BANK, as Trustee under that certain Pooling and Servicing Agreement dated as of November 1, 1999 for Certificateholders of the Office Finance Corp Commercial Mortgage Pass-Through Certificates Series 1999-FL1, nor any other party who from time to time shall be included in the definition of Mortgagee hereunder, shall have any liability or responsibility under or pursuant to the terms of this Agreement after it ceases to own an interest in the Project. Nothing in this Agreement shall be construed to require Mortgagee to see to the application of the proceeds of the Loan, and Lessee's agreements set forth herein shall
not be impaired on account of any modification of the documents evidencing and securing the Loan. Lessee acknowledges that Mortgagee is obligated only to Borrower to make the Loan only upon the terms and subject to the conditions set forth in the Loan Agreement between Mortgagee and Borrower pertaining to the Loan. In no event shall Mortgagee or any purchaser of the Project at foreclosure sale or any grantee of the Project named in a deed-in-lieu of foreclosure, nor any heir, legal representative, successor, or assignee of Mortgagee or any such purchaser or grantee (collectively the Mortgagee, such purchaser, grantee, heir, legal representative, successor or assignee, the "SUBSEQUENT LANDLORD") have any personal liability for the obligations of Lessor under the Lease and should the Subsequent Landlord succeed to the interests of the Lessor under the Lease, Tenant shall look only to the estate and property of any such Subsequent Landlord in the Project for the satisfaction of Tenant's remedies for the collection of a judgment (or other judicial process) requiring the payment of money in the event of any default by any Subsequent Landlord as landlord under the Lease, and no other property or assets of any Subsequent Landlord shall be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies under or with respect to the Lease; provided, however, that the Lessee may exercise any other right or remedy provided thereby or by law in the event of any failure by Lessor to perform any such material obligation.
4. SUBORDINATION. The Lease and all rights of Lessee thereunder are subject and subordinate to the lien and the terms of the Mortgage and to any deeds of trust, mortgages, ground leases or other instruments of security which do now or may hereafter cover the Project or any interest of Lessor therein (collectively, the "PRIOR ENCUMBRANCES") and to any and all advances made on the security thereof and to any and all increases, renewals, modifications, consolidations, replacements and extensions of the Mortgage or of any of the Prior Encumbrances. This provision is acknowledged by Lessee to be self-operative and no further instrument shall be required to effect such subordination of the Lease. Lessee shall, however, upon demand at any time or times execute, acknowledge and deliver to Mortgagee any and all instruments and certificates that in Mortgagee's judgment may be necessary or proper to confirm or evidence such subordination. If Lessee shall fail or neglect to execute, acknowledge and deliver any such instrument or certificate, Mortgagee may, in addition to any other remedies Mortgagee may have, as agent and attorney-in-fact of Lessee, execute, acknowledge and deliver the same and Lessee hereby irrevocably appoints Mortgagee as Lessee's agent and attorney-in-fact for such purpose. However, notwithstanding the generality of the foregoing provisions of this paragraph, Lessee agrees that Mortgagee shall have the right at any time to subordinate the Mortgage, and any such other mortgagee or ground lessor shall have the right at any time to subordinate any such Prior Encumbrances, to the Lease on such terms and subject to such conditions as Mortgagee, or any such other mortgagee or ground lessor, may deem appropriate in its discretion.
5. NEW LEASE. Upon the written request of either Mortgagee or Lessee to the other given at the time of any foreclosure, trustee's sale or conveyance in lieu thereof, the parties agree to execute a lease of the Demised Premises upon the same terms and conditions as the Lease between Lessor and Lessee, which lease shall cover any unexpired term of the Lease existing prior to such foreclosure, trustee's sale or conveyance in lieu of foreclosure.
6. NOTICE. Lessee agrees to give written notice to Mortgagee of any default by Lessor or Borrower under the Lease not less than thirty (30) days prior to terminating the
Lease or exercising any other right or remedy thereunder or provided by law. Lessee further agrees that it shall not terminate the Lease or exercise any such right or remedy provided such default is cured within such thirty (30) days; provided, however, that if such default cannot by its nature be cured within thirty (30) days, then Lessee shall not terminate the Lease or exercise any such right or remedy, provided the curing of such default is commenced within such thirty (30) days and is diligently prosecuted thereafter. Such notices shall be delivered by certified mail, return receipt requested to:
GE Capital Loan Services, Inc.
363 North Sam Houston Parkway East, Suite 1200
Houston, Texas 77060
Attention: Pat McEntee
and
General Electric Capital Corporation
Long Ridge Road
Stamford, Connecticut 06927
Attention: Vice President, Securitizations
7. MORTGAGEE. The term "Mortgagee" shall be deemed to include THE CHASE MANHATTAN BANK, as Trustee under that certain Pooling and Servicing Agreement dated as of November 1, 1999 for Certificateholders of the Office Finance Corp Commercial Mortgage Pass-Through Certificates Series 1999-FL1 and any of its successors and assigns, including anyone who shall have succeeded to Lessor's interest in and to the Lease and the Project by, through or under judicial foreclosure or sale under any power or other proceedings brought pursuant to the Mortgage, or deed in lieu of such foreclosure or proceedings, or otherwise.
8. ESTOPPEL. Lessee hereby certifies, represents and warrants to Mortgagee that:
(a) That the Lease is a valid lease and in full force and effect. That there is no existing default in any of the terms and conditions thereof and no event has occurred which, with the passing of time or giving of notice or both, would constitute an event of default;
(b) That the Lease has not been amended, modified, supplemented, extended, renewed or assigned, and represents the entire agreement of the parties;
(c) That, except as provided in the Lease, Lessee is entitled to no rent concessions or abatements;
(d) That Lessee shall not pay rental under the Lease for more than one (1) month in advance. Lessee agrees that Lessee shall, upon written notice by Mortgagee, pay to Mortgagee, when due, all rental under the Lease;
(e) That all obligations and conditions under the Lease to be performed to date have been satisfied, free of defenses and set-offs;
(f) That Lessee has not received written notice of any claim, litigation or proceedings, pending or threatened, against or relating to Lessee, or with respect to the Demised Premises which would affect its performance under the Lease. Lessee has not received written notice of any violations of any federal, state, county or municipal statutes, laws, codes, ordinances, rules, regulations, orders, decrees or directives relating to the use or condition of the Demised Premises or Lessee's operations thereon.
9. MODIFICATION AND SUCCESSORS. This Agreement may not be modified orally or in any manner other than by an agreement, in writing, signed by the parties hereto and their respective successors in interest. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their successors and assigns.
10. COUNTERPARTS. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement, binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
MORTGAGEE:
THE CHASE MANHATTAN BANK, as Trustee
under that certain Pooling and Servicing
Agreement dated as of November 1, 1999
for Certificateholders of the Office
Finance Corp Commercial Mortgage
Pass-Through Certificates Series
1999-FL1
BY: GE CAPITAL LOAN SERVICES, INC., as
Servicer pursuant to that certain
Pooling and Servicing Agreement
dated as of November 1, 1999 for
Certificateholders of the Office
Finance Corp Commercial Mortgage
Pass-Through Certificates Series
1999-FL1.
LESSEE:
This instrument was acknowledged before me on this ___________ day of ___________________, ______ by __________________________________, as __________________________________ of GE CAPITAL LOAN SERVICES, INC., a Delaware corporation, on behalf of said corporation.
(SEAL) ---------------------------------------- Notary Public in and for the State of --------------------------- ---------------------------------------- Print name of notary My Commission Expires: ----------------- |
This instrument was acknowledged before me on this __________ day of _______, _____ by ______________________, as _________________________ of _____________________, a _________________, on behalf of said _________________.
(SEAL) ---------------------------------------- Notary Public in and for the State of --------------------------- ---------------------------------------- Print name of notary My Commission Expires: ----------------- |
Exhibit 10.32
LEASE
THIS LEASE, dated as of October 12, 2000 is between PROGRESS ROAD LLC, a Massachusetts corporation with a principal address of 17 Progress Road Billerica, Massachusetts 01821 as lessor ("Landlord") and PRI AUTOMATION, a Massachusetts corporation with a principal address of 805 Middlesex Turnpike Burlington, Massachusetts 01821 as lessee ("Tenant").
ARTICLE ONE
PREMISES
1.1 DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant hires from Landlord, on the terms and conditions contained in this Lease, certain real property with the buildings and structures thereon located in the town of Billerica, Middlesex County, Massachusetts (as more particularly described in Exhibit "A" attached hereto), commonly known as 17 Progress Road Billerica, Massachusetts, and consisting of: (a) the existing building comprised of approximately 57,000 +/- rentable square feet of space (the "Existing Building"); and, subject to the provisions of Section 3.2 hereof; (b) an expansion/addition on the property of one more building which, once constructed, will consist of approximately 61,543 +/- rentable square feet of space (the "Proposed Building"); the total approximate rentable area of (a) and (b) to equal approximately 118,543 rentable square feet of space; (c) parking rights in the buildings and on the site, which as to the Existing Building and related site areas constitute approximately 126 spaces, and as to the Proposed Building and related site areas shall constitute approximately an additional 103 spaces; the foregoing totaling 229 spaces (the "Parking"); and (d) the land on which the Existing Building and the Proposed Building are sited along with all improvements thereon, hereditaments and appurtenances thereto (the "Property"); all of which (a), (b) (c) and (d) above are collectively referred to herein as the "Premises".
1.2 LANDLORD'S AND TENANT'S RESPECTIVE BUILD-OUTS OF THE PREMISES: The Landlord and Tenant shall each bear certain initial build-out responsibilities relative to the Premises, as follows:
A. Landlord's Build-Out: As to the Existing Building and the existing Parking areas and other existing elements on the Property as of the date of execution of this Lease, Landlord bears no responsibility whatsoever to perform any work prior to delivery of the Premises to the Tenant. As to the Proposed Building, proposed Parking areas, and other proposed elements on the Property, the Landlord's responsibility for construction is as set forth on the plans and specifications set forth on Exhibit B hereto (the "Landlord's Build-Out"). Landlord shall perform all such work on Landlord's Build-Out at its sole cost and expense, in accordance with all applicable local, state and federal laws, bylaws, rules and regulations, and in a good and workmanlike manner using materials of good quality.
Landlord and Tenant each hereby acknowledge that Tenant may make reasonable changes to the Landlord's Build-Out as set forth in Exhibit B, which Landlord shall incorporate in its Landlord's Build-Out, provided: (i) the changes do not materially delay or impede Landlord's ability to procure its permits or make its delivery deadlines hereunder; (ii) the changes do not materially increase the scope or nature of Landlord's work as set forth in Exhibit B hereto; (iii) the changes, to the extent they result in greater cost or expense to Landlord, are
paid for by Tenant in a manner to be mutually agreed by Landlord or Tenant at the time the changes are proposed and agreed to by them; (iv) the changes do not materially detract from the quality, appearance, or overall plan for the Proposed Building, or materially increase the size, area, equipment or appearance thereof, as set forth in Exhibit B hereto; and, (v) the changes, to the extent they result in a cost savings to Landlord, will be credited to Tenant in a manner to be mutually agreed by Landlord or Tenant at the time the changes are proposed and agreed to by them. To the extent any proposed changes are not agreed to by Landlord at the time proposed by Tenant, they shall become part of Tenant's Build-Out (if Tenant elects to pursue them) and shall be paid for exclusively by Tenant with no credit or offset of any kind.
Landlord shall undertake reasonable measures to perform its Landlord's Build-Out in such a manner as minimizes interference with Tenant's use of the Existing Building, existing Parking areas, and other existing elements on the Property; Tenant acknowledging however that it is accepting delivery of the Existing Building, existing Parking areas, and other existing elements on the Property in complete understanding of the significant construction activities which will be taking place prior to the delivery of the Proposed Building (including attendant noise, debris, dust, interruptions and inconveniences which will be occasioned thereby); Tenant hereby waiving any and all defenses or claims (including without limitation claims for interference with peaceful occupation, constructive eviction, etc.) which Tenant may have arising from any such construction activities.
B. Tenant's Build-Out: Upon Landlord's delivery of the Existing Building and subsequent delivery of the Proposed Building, respectively Tenant shall have the right to enter and commence its own construction thereon, in accord with its own plans and specifications (the "Tenant's Build-Out") submitted to and approved in writing in advance by Landlord, which approval shall not be unreasonably withheld or delayed. Landlord shall not be responsible for any delays in construction on Tenant's Build-Out. Tenant shall perform all such work on Tenant's Build-Out at its sole cost and expense, in accordance with all applicable local, state and federal laws, bylaws, rules and regulations, and in a good and workmanlike manner using materials of good quality. Tenant's Build-Out shall not interfere with Landlord's work on the Proposed Building, and Landlord's construction and site requirements shall take precedence. Notwithstanding the progress or completion of Tenant's Build-Out, Tenant shall be required to make its payments of Fixed Rent and Additional Rent at the times set forth in Article Four of this Lease.
C. Tenant's Build-Out Allowance: Landlord hereby grants to Tenant an allowance toward its actual work in place pursuant to Tenant's Build-Out, determined and applied as follows (the "Tenant's Build-Out Allowance"):
(i) Existing Building: Tenant's Build-Out Allowance as to Tenant's Build-Out of its space in the Existing Building shall be calculated on the basis of $ 4.20 per rentable square foot, not to exceed Two Hundred Fifty Thousand ($250,000.00) Dollars.
(ii) Proposed Building: Tenant's Build-Out Allowance as to Tenant's Build-Out of its space in the Proposed Building shall be calculated on the basis of $ 4.20 per rentable square foot, not to exceed Two Hundred Fifty Thousand ($250,000.00) Dollars.
(iii) Advances For Tenant's Build-Out Allowance: Tenant's Build-Out Allowance shall be advanced to Tenant based on work in place per Requisitions (as defined below), beginning with Tenant's Build-Out Allowance attributable to the Existing Building, then, after delivery of the Proposed Building, toward Tenant's Build-Out Allowance attributable to the Proposed Building. Tenant's Build-Out Allowance will be advanced by Landlord in monthly installments based on a monthly statement of work in place (the "Requisition") agreed to and delivered signed by the Tenant. Payment will be within thirty (30) days of the receipt of each such Requisition. Tenant shall not submit more than one (1) Requisition in any thirty (30) day period. Landlord shall have the right to inspect the Premises to certify that the work for which the credit is claimed is in fact, in place and in suitable condition. Landlord shall amortize the Tenant's Build-Out Allowance over the Term of the Lease, and shall assess interest on any unpaid balance at the annual rate of twelve (12%) percent, compounded, and these sums shall be paid by Tenant during the Term of the Lease (or upon any uncured event of default hereunder or earlier termination of this Lease). Tenant's repayment of the Tenant's Build-Out Allowance (plus interest as aforesaid) shall be in monthly installments with payments due on the first day of each calendar month based upon a statement provided by Landlord (or sooner, upon notice by Landlord and expiration of any cure periods in the event of default by Tenant or earlier termination of this Lease). All such payments shall be Additional Rent under this Lease.
1.3 ACCEPTANCE OF PREMISES: Tenant acknowledges that it is familiar with the condition of the Existing Building and the Property and is satisfied with the physical condition thereof. Tenant covenants and agrees to accept the Existing Building and Property (a) in their condition and state of repair as of the date hereof, reasonable use and wear excepted, "AS IS", subject only to the provisions of Section 1.3 below; and (b) subject to all laws, ordinance, rules, regulations, order and directives, governing, regulating or in any manner applicable to all or any part of the Premises or any interest therein or any use or occupancy thereof, (the Premises currently being in compliance with the foregoing), and to all liens, encumbrances, easements, rights of way, covenants, conditions, restrictions, servitude, licenses and other matters then of record or otherwise affecting the Premises, none of which shall materially interfere with Tenant's use of the Premises. Tenant's acceptance of possession of the Premises shall be deemed to be Tenant's acknowledgement that it is satisfied in all respects with the condition of the Premises at the time of accepting possession, and Tenant's failure to deliver written objection to Landlord upon delivery as to any conditions thereon shall be deemed a waiver of Tenant's rights to thereafter object to any physical conditions or attributes of the Existing Building and Property. Notwithstanding the foregoing, Landlord shall deliver the existing building systems, including the electrical, HVAC and mechanical systems, in good working condition on the Commencement Date.
Except as provided in the immediately preceding paragraph, Tenant further acknowledges that no person has made any representation or warranty to Tenant as to the condition of the Premises or their compliance with any such laws, ordinances, rules, regulations, orders, or directives, or their suitability for any use or purpose, other than the following:
A. HVAC Service In Existing Building: As set forth in Exhibit C hereto.
B. Electrical Service In Existing Building: As set forth in Exhibit D hereto.
C. General: Landlord represents and warrants that: (i) the Existing Building is free of harmful asbestos or other hazardous materials, and that no current indoor air quality problems currently exist; (ii) Landlord has completed Phase 1 and Phase 2 environmental assessments on the Existing Building and Property within the past three (3) years and has made available such reports to Tenant; (iii) the Existing Building is in compliance with current requirements of the Americans With Disabilities Act (ADA).
ARTICLE TWO
USE OF PREMISES
2.1 USE OF PREMISES: Tenant may use and occupy the Premises during the Term, as and when the Existing Building and related Property areas and the Proposed Building and related Property areas are each delivered to the Tenant, only for light industrial and ancillary warehouse and general business use, as permitted under the Billerica zoning ordinances and regulations, and for no other use. Except as otherwise provided in this Lease, during the Term hereof, Tenant shall keep the Premises and every part thereof, from the date(s) of delivery thereof to the Tenant, in good repair and condition at its sole cost and expense, reasonable use and wear, damage by casualty and taking by eminent domain excepted; provided however that Tenant shall have no obligation with respect to the Proposed Building and related Property areas until the Proposed Building and related Property areas are delivered by Landlord to Tenant. At the expiration of the Term (or upon the earlier termination of this Lease), Tenant shall surrender the Premises in substantially the same condition and repair as existed at the time Tenant took possession, reasonable wear and tear, damage by casualty and taking by eminent domain excepted.
2.2 GENERAL PROHIBITIONS: Tenant shall not create, or permit to be created, any public or private nuisance, hazard, waste, or illegal condition on or with respect to the Premises. Tenant shall not conduct its business operations on the Premises unless and until all necessary certificates of occupancy, permits, licenses and consents from all appropriate governmental authorities have been obtained by Tenant and are in full force and effect. Tenant shall immediately remove any and all liens which may be placed on the Premises, voluntarily or involuntarily, by or on account of the Tenant.
2.3 TENANT'S ENVIRONMENTAL COVENANTS: Tenant warrants and agrees that it will comply with all applicable environmental laws and regulations in connection with its use and occupancy of the Premises.
Tenant warrants and agrees that it will not store, treat, or dispose of any toxic or hazardous wastes on, above or below the Premises during its leasehold; provided, however, that Tenant may temporarily accumulate waste for off-site disposal if such accumulation is in full compliance with applicable laws and regulations. Notwithstanding the foregoing, Tenant may use ordinary household and office products generally used by consumers in ordinary quantities.
Tenant's warranties and agreements contained in this Section 2.3 shall survive the expiration or earlier termination of the Lease.
ARTICLE THREE
TERM OF LEASE
3.1 TERM OF LEASE: "Term" shall mean the initial term of this Lease and all
extensions and renewals thereof. The "Initial Term" of this Lease shall mean the
period beginning on the Commencement Date and continuing for a period of ten
(10) years from and after either (a) the Commencement Date or (b) if the
Commencement Date is other than the first day of the calendar month, then
beginning on the first day of the first calendar month following the
Commencement Date (i.e. the "Anniversary Date"), (the incremental portion
between the Commencement Date and the Anniversary Date to expand the first Lease
Year hereunder).
3.2 COMMENCEMENT DATE, DELIVERY, AND POSSESSION:
A. Commencement Date: The "Commencement Date" shall be October 15, 2000.
B. Delivery Dates: There shall be two separate delivery dates under this Lease, taking into account the Landlord's delivery of the Existing Building and related Property areas at the outset, and subsequent delivery of the Proposed Building and related Property areas:
(i) Landlord shall deliver the Existing Building and Property to the Tenant for its possession, use, and occupancy on the Commencement Date as set forth in subsection A above (the "Delivery Date") free and clear of all other tenants or occupants (subject to Landlord's Residual Occupancy as defined under subsection (iii) below). Tenant shall have reasonable access to the Existing Building prior to the Commencement Date to install Tenant's trade fixtures and systems, provided that Tenant shall not conduct its business therefrom; Tenant to access said space during this early access period subject to all the terms and conditions hereof (but for the obligation to pay Rent).
(ii) Landlord shall deliver the Proposed Building to the Tenant for
its possession, use, and occupancy on or before June 1, 2001 (the "Deferred
Delivery Date"); provided that the permitting contemplated therefor meets the
schedule prepared by Dacon Construction, which schedule is attached hereto as
Exhibit E; subject to any intervening events of Force Majeure as defined in
Section 14.15 hereof or any construction delays occasioned by unknown site
conditions, in which case the Deferred Delivery Date for the Proposed Building
shall be extended day for day to account of each day of such delay. Commencing
as of sixty (60) days prior to the expected Deferred Delivery Date, Landlord
shall in good faith entertain Tenant's request for early access to the Proposed
Building for the purpose of beginning preliminary work on its Tenant's Build-Out
and Landlord shall use reasonable efforts to accommodate such early access for
Tenant, but Landlord shall be under no obligation to grant any such access as my
interfere with Landlord's construction and delivery obligations hereunder, delay
the Deferred Delivery Date, or which would be unlawful or unsafe given the then
state of completion of said Proposed Building.
(iii) Notwithstanding Landlord's delivery of the Existing Building and related Property areas to Tenant on the Delivery Date, Landlord shall be entitled to continue its occupancy and use of the existing space therein which houses and is utilized for Landlord's "computer room", consisting of approximately 2,000 rentable square feet, for a period of ninety
(90) days from the Delivery Date (the "Landlord's Residual Occupancy"). Landlord shall use reasonable efforts to vacate said "computer room" and remove its equipment, furnishings and fixtures therefrom at the earliest feasible time but in no event later than the end of said ninety (90) day period. Landlord's activities from the Premises during the Landlord's Residual Occupancy shall not materially interfere with Tenant's business activities. Landlord acknowledges Tenant intends to commence its construction work within said ninety (90) day period and Landlord shall be responsible for the security of its equipment within the "computer room" within this timeframe. Additionally, Landlord acknowledges Tenant's right to temporarily from time to time suspend electrical service to the "computer room" during and notwithstanding Landlord's Residual Occupancy in order to accommodate Tenant's reasonable construction needs, and Tenant shall not be liable therefor provided reasonable prior notice is given to Landlord of the intended suspension.
C. Possession: Landlord shall deliver and Tenant shall accept possession of
the Existing Building and related Property areas as of the Delivery Date, in the
condition provided for in Section 1.3 hereof. Landlord shall deliver and Tenant
shall accept possession of the Proposed Building as of the Deferred Delivery
Date in its then existing condition; provided that Landlord's construction
obligations have been substantially completed pursuant to the plans and
specifications agreed to in advance by Landlord and Tenant (as contemplated in
Section 1.2 hereof), subject to any then remaining "punchlist" items to be
completed subsequent to the Deferred Delivery Date; and further provided that
any unfinished work on the Proposed Building (such as work on building systems
(i.e. electrical, mechanical, plumbing, HVAC, life safety), or
elevators/escalators; or work on finishes or cosmetic work), or work on the
Property (such as landscaping, paving, etc.) does not materially interfere with
Tenant's ability to substantially occupy and conduct its business on and from
the Proposed Building. Landlord agrees to complete all such punchlist and
unfinished work as soon as is reasonably practicable under the circumstances. To
the extent a Certificate of Occupancy for the Proposed Building can be obtained
from the Town of Billerica (given the scope of Landlord's Build-Out vis a vis
Tenant's Build-Out) then Landlord shall procure the same on or before the
Deferred Delivery Date. However, to the extent any element of Tenant's proposed
work on Tenant's Build-Out (whether included within the plans and specifications
or resulting from on-site construction conditions and/or coordination issues)
precludes issuance of the Certificate of Occupancy, then Landlord shall not be
required to deliver the Certificate of Occupancy on or before the Deferred
Delivery Date.
3.3 TENANT'S TERMINATION RIGHT:
This Lease contemplates that Landlord shall make reasonable good faith efforts to procure the requisite government permits and approvals for its construction of the Proposed Building on the Property, in a timely fashion, such that Tenant can begin its occupancy of the Proposed Building on or about June 1, 2001. Preliminarily, commencing upon execution of this Lease Landlord shall pursue its engineering studies of the site to determine the feasibility of the Proposed Building, and shall provide such information to Tenant. Additionally, within sixty (60) days from the date this Agreement is executed and delivered, Landlord shall provide Tenant with a commitment letter from a federal insured bank or major insurance company as to its sound interest in financing the Proposed Building, subject to the usual and customary commercial terms and conditions. If Landlord can not obtain such a letter Landlord shall so notify Tenant and
Tenant shall have the option to provide Landlord with options for such financing
on commercially reasonable non-recourse terms; which Landlord shall entertain in
good faith but which Landlord shall not be bound or required in any manner to
accept. If Landlord does not deliver a third party commitment letter (or
alternatively does not demonstrate an ability to fund Landlord's Build-Out with
its own resources) or does not accept Tenant's financing proposals as
contemplated above, then Tenant may terminate this Lease upon written notice to
Landlord as contemplated below. Landlord shall file for any and all requisite
permits and approvals needed for construction, use and occupancy of the Proposed
Building. If despite Landlord's efforts, all requisite government permits and
approvals for its construction of the Proposed Building on the Property are not
procured by January 1, 2001 (and Landlord does not actually deliver the Proposed
Building by June 1, 2001 if Landlord elects to proceed with and substantially
complete its construction by that date if such permits and approvals have been
delayed beyond January 1, 2001) then Tenant shall have the right to terminate
this Lease on the following terms and conditions: (a) Tenant shall deliver a
written notice to Landlord irrevocably terminating this Lease (the "Tenant's
Termination Notice") at least nine (9) full months prior to the Tenant's stated
date of termination, time being of the essence in the delivery of said Notice;
(b) no termination shall occur and no Tenant's Termination Notice shall be
delivered until the fifth (5th) Lease Year hereunder, and no termination shall
be effective until the beginning of the sixth Lease Year (i.e. the 61st month
under this Lease); (c) notwithstanding Tenant's rights to terminate this Lease,
Tenant shall continue to abide by all Lease terms and conditions as to the
Existing Building and related Property areas, including but not limited to the
payment of all Rent and other expenses due under this Lease, up to the effective
date of termination; (d) Tenant shall pay Landlord for the entire unamortized
portion of the Lease commission as of the termination date, prior to vacating
the Premises occupied by it. Tenant hereby acknowledges that its termination
rights as set forth in this Section 3.3 constitute its sole and exclusive remedy
accruing on account of Landlord's inability to procure permits and approvals and
to deliver the Proposed Building as contemplated above.
3.4 OPTION TO EXTEND TERM:
A. Two Consecutive Options: Provided that Tenant has not defaulted under this Lease, Tenant shall have the option to extend the term of this Lease for two (2) additional successive periods of five (5) years each ("Renewal Term(s)"), on the conditions contained in this Section.
B. Manner Of Exercise: Tenant shall exercise its option hereunder, in each instance, by giving written notice of its exercise said option (the "Tenant's Notice Of Intent") as to a given Renewal Term not less than twelve (12) months prior to the end of the initial Term (or twelve (12) months prior to the expiration of the first Renewal Term, as the case may be); irrevocably exercising its option to extend for that period. Tenant must exercise its option for the first Renewal Term before exercising its option as to the second Renewal Term. Upon receipt of Tenant's Notice Of Intent, Landlord shall deliver to Tenant a notice as to Landlord's requested Fixed Rent for the Premises for the Renewal Term in question reflecting fair market rent (including any annual escalations, as usual to the market at that time) projected as of the start of the Renewal Term. If Tenant does not agree with said Fixed Rent, then the Fair Market Rent for the purpose of this Section to be used in determining Fixed Rent for the Renewal Term shall be determined by appraisal and arbitration as follows (the "Rent Appraisal Process"). If Tenant
does not timely deliver Tenant's Notice of Intent then Tenant's rights hereunder shall lapse and the Term shall cease at the end of the initial Term or the first Renewal Term then in process, as applicable. Time is of the essence in the delivery of Tenant's Notice Of Intent.
Within thirty (30) days after Tenant's Notice Of Intent, Landlord and Tenant shall each appoint a person to make a Fair Market Rent determination (including appropriate escalators); which person shall be an individual who is not then employed by either party and who is a qualified real estate broker or appraiser, previously or currently affiliated with a recognized real estate brokerage or appraisal firm, with sufficient experience or credentials (i.e. MAI or comparable) and knowledge of the local commercial real estate rental markets. If either party shall fail to notify the other of its selection by the expiration of said fourteen (14) day period, and such failure shall continue for two (2) days after written notice to the other, then that party shall be deemed to have waived its right to select a representative. Each party shall be responsible for the costs of its selected representative.
The two selected representatives (or the lone selected representative in the case of failure to select) shall each prepare and simultaneously submit in writing their separate assessments of Fair Market Rent (including escalations) for the Premises projected for the Renewal Term, within fourteen (14) days. Within the next fourteen (14) days, the representatives shall meet and attempt in good faith to reconcile their positions and agree on a Fair Market Rent. If they so agree, they shall submit their recommendation to the parties in writing and that determination shall be the Fair Market Rent (including escalators) for said Renewal Term. If they do not agree, within said fourteen (14) days they shall submit the name of a mutually agreed and qualified person to serve as the arbitrator. Absent demonstrable conflict of interest with either party or its selected appraiser, bias, or prejudice, that individual shall review the two representatives' reports and make his own determination based on said reports as to Fair Market Rent (including escalators). Under no circumstances shall any Fair Market Rent determination be less than the fully escalated Fixed Rent for the last Lease Year of the initial Term as prescribed above (or in the case of the second Renewal Term, the last Lease Year of the first Renewal Term). The third arbitrator shall make a determination with fourteen (14) days of the submittal of the reports to him or her. The parties shall evenly share the reasonable costs of the third arbitrator.
C. Additional Rent: Tenant shall also be required to pay all Additional Rent due under this Lease during the Renewal Term(s).
D. Same Terms And Conditions Throughout: Except as modified in this Section, all terms and conditions of this Lease shall continue and shall remain in full force and effect throughout the Renewal Term(s).
ARTICLE FOUR
FIXED RENT AND ADDITIONAL RENT
4.1 OBLIGATION TO PAY RENT:
A. Rent: The Rent payable under this Lease shall consist of Fixed Rent and Additional Rent.
B. Fixed Rent: The Tenant shall pay Fixed Rent to Landlord in the amounts specified in this Lease, in advance, on the first day of each calendar month during the Term hereof, without previous demand and without offset or deduction of any kind whatsoever. Notwithstanding the foregoing, Tenant shall pay the first month's installment of Fixed Rent upon the execution of the Lease. The Tenant shall pay Additional Rent in the manner described in Section 4.3.
C. Late Charge: Should any payment of Rent be received later than the fifteenth day of the month for which it is due, then concurrently with such payment Tenant shall pay to Landlord as Additional Rent a late charge equal to three (3%) percent above the prime rate charged by Fleet Bank (or its successor) applied to the overdue Rent, compounded monthly from the due date.
D. Rent Obligation: The parties intend and agree that the obligations of Tenant to pay Rent shall be separate and independent covenants and agreements and shall continue unabated throughout the Term hereof unless modified or terminated pursuant to an express provision of this Lease.
4.2 FIXED RENT:
4.2.1 DEFINITION OF LEASE YEAR: "Lease Year" shall mean the consecutive twelve (12) month period following the Commencement Date or, if the Commencement Date is other than the first day of a calendar month, then the first Lease Year shall be extended to include the initial incremental number of days up to the Commencement Date (for which Tenant shall pay the pro rata portion of Fixed Rent for said incremental month with its first installment of Fixed Rent).
4.2.2 FIXED RENT FOR THE INITIAL TERM: The Fixed Rent for the each Lease Year of the initial Term of this Lease shall be as follows:
A. Fixed Rent as to Existing Building and Related Property Areas:
1st Lease Year: $396,150.00/annual; $33,012.50/mo. 2nd Lease Year: $396,150.00/annual; $33,012.50/mo. 3rd Lease Year: $404,700.00/annual: $33,725.00/mo. 4th Lease Year: $404,700.00/annual: $33,725.00/mo. 5th Lease Year: $413,250.00/annual: $34,437.50/mo. 6th Lease Year: $413,250.00/annual: $34,437.50/mo. 7th Lease Year: $421,800.00/annual: $35,150.00/mo. 8th Lease Year: $421,800:00/annual: $35,150.00/mo. 9th Lease Year: $421,800.00/annual: $35,150.00/mo. 10th Lease Year: $421,800.00/annual: $35,150.00/mo. |
B. Fixed Rent as to Proposed Building and Related Property Areas:
Subject to the completion and delivery of the Proposed Building as contemplated in Section 3.2 hereof, as of June 1, 2001 Tenant shall pay to Landlord Fixed Rent attributable to the Proposed Building and related Property areas as follows:
1st Lease Year: $7.85 per rentable square foot 2nd Lease Year: $7.85 per rentable square foot 3rd Lease Year: $8.00 per rentable square foot 4th Lease Year: $8.00 per rentable square foot 5th Lease Year: $8.15 per rentable square foot 6th Lease Year: $8.15 per rentable square foot 7th Lease Year: $8.30 per rentable square foot 8th Lease Year: $8.30 per rentable square foot 9th Lease Year: $8.30 per rentable square foot 10th Lease Year: $8.30 per rentable square foot |
4.2.3 FIXED RENT FOR EACH RENEWAL TERM:
The annual Fixed Rent for each Renewal Term shall be as determined under Section 3.4B hereof.
4.3 ADDITIONAL RENT: Landlord and Tenant agree that this Lease is a "triple
net" Lease. Consequently, Tenant shall also pay as additional rent as to the
entire Premises (as of the Delivery Date relative to the delivery of the
Existing Building and related Property areas, and as of June 1, 2001 (or the
date the Proposed Building is actually delivered to Tenant as provided in
Section 3.2(b)(ii) hereof) relative to the delivery of the Proposed Building)
all other amounts, liabilities and obligations required under this Lease
relating to the Premises ("Additional Rent"), including without limitation those
items defined as Expenses in Article Five below, together with all interest that
may accrue thereon if Tenant fails to pay such amounts when due, and all
damages, costs, and expenses which Landlord may incur by reason of any default
of Tenant. Items of Additional Rent which are payable to persons other than
Landlord shall be paid when or before such payment becomes due, before any
interest or penalty shall attach or accrue. Items of Additional Rent which are
payable to Landlord shall be paid on demand. If Tenant fails to pay any of the
Additional Rent, Landlord shall have all legal and equitable rights and remedies
provided either in the Lease or by statute or otherwise in the case of
nonpayment of the Fixed Rent.
4.4 SECURITY DEPOSIT: Prior to Commencement Date, Tenant shall deliver to Landlord the sum of (i) Thirty Three Thousand Twelve 50/100 ($33,012.50) Dollars, i.e. one full month's Fixed Rent under Section 4.2.2 A above; plus,(ii) within ten (10) days of receiving notice that Landlord has received its building permit for the Proposed Building, Tenant shall then also deliver to Landlord that amount which is equal to one full month's Fixed Rent under Section 4.2.2 B above; (i) and (ii) above equaling one full month's Fixed Rent as to the entire Premises (herein, the "Security Deposit"), as security for full performance by Tenant of all the terms, covenants and conditions herein. Provided that Tenant has fully carried out all of the terms, covenants and conditions herein, the Security Deposit shall be returned within thirty (30) days after the end of the Lease Term unless this Lease is extended. In the event of default by Tenant under this Lease beyond any applicable notice grace and cure period, Landlord may use, apply or retain all or any part of the Security Deposit in payment of any expense incurred by Landlord in curing the default by Tenant, in payment of any rent due, to repair damages to the Premises, or to maintain the Premises in the condition required hereunder. Unless otherwise required by law, Tenant shall not be entitled to any interest on the deposit and Landlord may place the Security
Deposit with its general funds. If Landlord fails to deliver the Proposed Building as contemplated under Section 3.2C hereof, then the delivery of the additional Security Deposit payment under subsection (ii) above is deemed waived and shall be returned to Tenant.
ARTICLE FIVE
EXPENSES
5.1 EXPENSES: "Expenses" are those costs which are attributable in whole or in part to the Premises, to be paid by Tenant. As used in this Lease, "Expenses" shall include:
(a) Taxes, as defined in Section 5.2;
(b) Insurance Premiums, as defined in Section 5.3;
(c) Operating Costs, as defined in Section 5.4:
(d) Utility Costs, as defined in Section 5.5.
5.2 TAXES
5.2.1 REQUIREMENT TO PAY TAXES: Tenant shall be responsible for and pay to the appropriate taxing authority all taxes and assessments (collectively "Taxes") applicable to the Premises. "Taxes" shall include, without limitation, all property taxes (whether real or personal), assessments (general or special), water and sewer connection or tap-in charges, supplemental property taxes, personal property taxes, privilege taxes, Tenant's gross income taxes, excise taxes, gross sales taxes, and all other governmental taxes, fees, impositions and charges of every kind and nature, which shall be or become due and payable under or by virtue of any law, statute, ordinance, regulation, or other requirement of any governmental authority, whether federal, state, county, city, municipal or otherwise, (i) which shall be levied, assessed or imposed upon Landlord or Tenant with respect to the Premises (other than Landlord's Federal or state income or transfer taxes), or (ii) which shall be levied, assessed or imposed upon the Premises or become liens upon or against the Premises or any portion thereof, or any interest of the owner of the Premises, Tenant, and sublessee or occupant of the Premises under any instrument creating a leasehold or other interest in the Premises or any portion thereof, or (iii) which shall be levied, assessed, or imposed or shall be or become liens upon any personal property used in connection with or any interest of the owner of the Premises therein arising out of or related to Tenant's use of the Premises, or (iv) which shall be levied or imposed upon or with respect to the possession, leasing, operation, management, maintenance, improvement, alteration, repair, use or occupancy of the Premises or any portion thereof by the owner of the Premises or any other person having ownership or security interest in the Premises. All betterment assessments shall be payable by Tenant when due the taxing authorities. In no event shall Tenant be responsible for sales taxes due for materials used to construct the Proposed Building. Landlord shall promptly deliver to Tenant copies of all real estate tax bills received by Landlord. To the extent any sums under this Section 5.2.1 are not paid by Tenant by that date upon which they become an enforceable municipal lien against the Premises, then Landlord may pay said amounts directly to the municipal taxing authority, whereupon Tenant shall be separately invoiced by Landlord and shall reimburse Landlord for such expenditure, together with interest and late fees in the same measure as if Fixed Rent had been overdue hereunder.
5.2.2 RIGHT TO CONTEST TAXES: Landlord shall promptly notify Tenant of any increase in assessed value of, or increases in Taxes attributable to, the Premises, of which Landlord receives notice or otherwise becomes aware. If Taxes are not contested by Landlord, Tenant shall have the right to contest such Taxes, at Tenant's sole cost and expense, by the appropriate proceedings diligently contested in good faith. Notwithstanding such proceedings, the contested Taxes shall be promptly paid and discharged, unless such proceedings (and where necessary the posting of an appropriate bond or other security) shall operate to prevent or stay the collection of the Taxes and secure any accruing penalties or interest, and also to cure Landlord's default in the payment of Taxes required under any mortgage upon the Premises. Landlord shall join Tenant in such proceedings, if necessary, provided that Tenant pays all costs and expenses incurred by Landlord including without limitation attorneys fees.
5.3 INSURANCE PREMIUMS: "Insurance Premiums" shall mean the premiums necessary to obtain and maintain the policies described in Article Seven below, which shall at Landlord's election either be payable to the Landlord (to the extent it is paying said premiums directly), or alternatively the companies providing such insurance.
5.4 OPERATING COSTS: "Operating Costs" shall mean the actual expenses incurred for the operation and maintenance of the Premises, in accordance with accepted principles of sound management and accounting practices, including but not limited to expenses incurred in satisfaction of Tenant's obligations under this Lease to keep and maintain the Premises in good condition and repair. Tenant shall make its own direct arrangements with service providers for all Operating Costs, unless otherwise and separately agreed to in writing by Landlord and Tenant. Upon reasonable request, Tenant shall inform Landlord as to the identity of all such providers, the nature of the services and the status of all such payments and accounts. Operating Costs shall include a management fee payable directly to Landlord equal to eighteen cents ($ 0.18) per rentable square feet of the Existing Building and Proposed Building under this Lease annually upon invoice. Operating Costs shall be payable by Tenant directly to the third parties which are arranged for by Tenant to provide the respective services. The following items are excluded from the definition of "Operating Costs": (a) expenses for repairs or other work occasioned by fire, windstorm or other insurable casualty (said expenses to be borne as set forth in Articles Seven and Eight hereof); and (b) interest or amortization payments of any mortgage placed on the Premises by the Landlord. To the extent Tenant fails to provide or pay for necessary services to the Property, or the level or quality of such services are deficient such that the Property or any portion thereof is jeopardized, or materially impaired, or falls below the physical standard and appearance of the Property as of the respective delivery dates to Tenant, or is in violation of any applicable building, sanitary, or environmental laws, codes, regulations or orders, then Landlord, upon reasonable prior notice to Tenant, may contract with third party providers of Landlord's own selection and Tenant shall be obligated to reimburse Landlord upon receipt of its invoice for any and all such costs incurred for such services.
5.5 UTILITY COSTS: "Utility Costs" shall include all charges made during the term of this Lease for water, sewer service, gas, electricity, trash removal, and other utilities and services supplied to the Premises, together with any taxes thereon. Tenant shall make its own direct arrangements with service providers for all Utility Costs, unless otherwise and separately agreed to in writing by Landlord and Tenant. Upon reasonable request, Tenant shall inform Landlord as to the identity of all such providers, the nature of the utilities and related services, and the status
of all such payments and accounts. Utility costs (to the extent not included in Operating Costs under Section 5.4 above) shall be payable by Tenant directly to the provider of such services in a coordinated fashion with any Landlord payments under Operating Costs under Section 5.4 above. To the extent Tenant fails to provide or pay for utilities to the Premises, or the level or quality of such utilities are deficient such that the Premises or any portion thereof is jeopardized, or materially impaired, or falls below the physical standard and appearance of the Premises as of the respective delivery dates to Tenant, or is in violation of any applicable building, sanitary, or environmental laws, codes, regulations or orders, then Landlord, upon reasonable prior notice to Tenant, may contract with third party providers of Landlord's own selection and Tenant shall be obligated to reimburse Landlord upon receipt of its invoice for any and all such costs incurred for such utilities.
ARTICLE SIX
MAINTENANCE, REPAIR AND ALTERATIONS
6.1 TENANT'S MAINTENANCE AND REPAIR OBLIGATIONS: Tenant shall, at all times during the Term and at its sole expense, maintain, repair, and replace the Premises, including, without limitation, the roof and interior and exterior walls of the building; all plumbing, water and sewer, heating, ventilation, air conditioning and electrical facilities and equipment; all improvements, alterations, and additions, structural members, foundations, partitions, ceilings, skylights, showcases, windows, doors, storage tanks, glass and plate glass, parking areas, paving, sidewalks, landscaping, drainage, and lighting facilities; and all fixtures, equipment and facilities appurtenant to any of the foregoing, and shall maintain the foregoing in good condition and repair. Such maintenance and repair obligation shall run to all portions of the Premises, expressly including the Parking areas and the Property, and shall include items deemed to be capital improvements for tax purposes. Tenant shall be responsible for its own cleaning of the Premises (interior and exterior). Tenant shall keep the whole of the Premises in a safe, clean, sanitary, orderly and attractive condition. Tenant shall paint as reasonably needed, the interior and exterior surface of exterior walls. Tenant shall store all trash and garbage in adequate containers located on the Premises. Tenant, at its sole expense, shall arrange for the regular removal of its trash and garbage from the Premises.
Notwithstanding the foregoing Tenant obligations, Landlord's sole responsibility for maintenance, repairs, and replacements (for which Landlord shall pay) shall be: (i) repairs due to defective workmanship or materials to shell and core and base systems, structure and roof installed by Landlord in the Proposed Building as delivered to Tenant, excluding any work on or attributable to Tenant's Improvements, and (ii) any reasonable and necessary repairs and replacements to the Existing Building (and its Parking area), or the site, which are occasioned solely by Landlord's construction of the Proposed Building up to its delivery to Tenant; and (iii) replacement of the roofs of the Existing Building and Proposed Building and their exteriors (exclusive of glass in the windows and doors and framing thereto which shall be Tenant's responsibility) during the first ten (10) Lease Years hereunder (Tenant to be responsible for such replacements during any Renewal Term(s); and (iv) replacement of the septic system servicing the Existing Building, Proposed Building and related Property areas during the first ten (10) Lease Years hereunder (Tenant to be responsible for such replacements during any Renewal Term(s). If the Tenant exercises its option to extend the Lease as provided hereunder, then Landlord shall also be responsible (and shall pay for) repairs to the floors slabs and structural
elements which may be reasonably necessary during the extended portion of the
Term. Landlord shall not be responsible for any such repairs or replacements to
the extent caused by the negligence of willful misconduct of the Tenant, its
employees or independent contractors or deliverymen. Specifically, Landlord
shall not be responsible for any damage or wear caused to the septic system by
any materials deposited by Tenant beyond normal wear and tear; it being Tenant's
sole responsibility to ensure that all materials and waste products are properly
disposed of and that there are: no oils, fuels, chemical cleaning agents or
other caustic, biological, or hazardous materials disposed of in any manner
which causes harm to the septic system. Payments for which Landlord is
responsible under this paragraph shall not be included as Operating Costs under
Section 5.4 hereof.
Tenant shall, at its sole expenses and without limitation, promptly make all additions to or alterations or repairs or replacements in and about the Premises which may be required by federal, state and local statutes, be required by federal, state and local statutes, ordinances, regulations, orders, and directives, which may hereafter apply in any manner whatsoever to the Premises, but only after written approval of Landlord and in accordance with the provisions of this Article.
6.2 REFUSAL TO MAINTAIN OR REPAIR: If Tenant refuses or neglects to make any alterations, additions or repairs, or to do any maintenance required hereunder in a manner reasonably satisfactory to Landlord, Landlord shall have the right, but not the obligation, after ten (10) days notice to Tenant, to make such alterations, replacements, additions, or repairs, or perform such maintenance on behalf of, and for the account of, Tenant. All costs incurred by Landlord for such work, together with interest thereon at the maximum rate then allowed under Massachusetts law, from the date of payment thereof by Landlord, shall be deemed Additional Rent hereunder and shall be payable by Tenant to Landlord.
6.3 ALTERATIONS AND ADDITIONS:
6.3.1 LANDLORD'S CONSENT REQUIRED: Tenant shall not make any alterations, improvements, additions, or utility installations (collectively "Alterations") in, on or about the Premises without Landlord's prior written consent, which shall not be unreasonably withheld so long as Tenant is not in default hereunder beyond any applicable notice grace and cure period hereunder. Notwithstanding the foregoing, Tenant may during each Lease Year make non-structural alterations which in the aggregate do not exceed $ 100,000., without Landlord's prior consent. As used in this Article, the term "utility installation" includes, but is not limited to, carpeting, window coverings, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air condition, plumbing, and fencing. Landlord may require Tenant to provide Landlord, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half times the estimated cost of such Alterations, to insure Landlord against any liability for mechanic's and materialman's liens and to insure completion of the work. If requested by Tenant, Landlord may choose to accept a cash bond or letter of credit in an amount equal to one and one-half times the estimated cost of such Alterations in lieu of the lien and completion bond. Should Tenant make any Alterations without the prior approval of Landlord, Landlord may require that Tenant remove any or all of the same.
6.3.2 OWNERSHIP OF ALTERATIONS: All fixtures and all carpeting and other floor, wall and ceiling coverings, and all lighting fixtures installed on the Premises by Tenant shall become the property of Landlord and shall remain upon and be surrendered with the Premises upon the termination of the Lease, provided however:
(a) Nothing in this Section shall be construed to give Landlord title to or to prevent Tenant's removal of trade fixtures and/or moveable office furniture and equipment;
(b) Landlord may require Tenant to remove any or all of any Alterations at the expiration of the Term of this Lease, so long as Landlord has at the time of approval of such Alteration advised Tenant that such removal will be required;
(c) Upon removal of any equipment, fixtures, and/or Alteration which Tenant is required or permitted to remove under this Lease, Tenant shall immediately and at its own expense repair and restore the Premises to the condition existing prior to installation (subject to ordinary wear and tear) and repair any damage to the Premises due to such removal.
All property that was permitted to be removed by Tenant at the end of the Term but which remains in the Premises for sixty (60) days after Tenant vacates the Premises shall be deemed abandoned and may, at the election of Landlord, either be retained as Landlord's property or may be removed from the Premises by Landlord.
6.3.4 SUBMISSION OF PLANS: Any Alterations in or about the Premises that Tenant shall desire to make and which require the consent of the Landlord shall be presented to Landlord, in written form, with proposed detailed plans. Landlord shall respond to Tenant within five (5) business days of its receipt of said plans. Landlord's consent, if any, shall be deemed conditioned upon Tenant's acquiring all permits, licenses, and other authorization to do so from appropriate governmental agencies at Tenant's cost, the furnishing of a copy thereof to Landlord prior to the commencement of work, and the compliance by Tenant with all conditions of said authorization in a prompt and expeditious manner.
All Alterations shall be performed in a first-class, workmanlike, manner and in accordance with any plans and specifications therefor approved by Landlord, which approval shall not be unreasonably withheld. All Alterations shall be commenced and completed promptly.
Landlord may condition its approval in this Article upon maintenance by Tenant, at its cost, of appropriate insurance coverage.
6.3.5 LANDLORD INSPECTION: Any Alteration shall be subject to inspection at any time by Landlord and its architect, or their duly authorized representatives, and if Landlord's architect upon such inspection shall be of the opinion that the Alteration is not being performed in accordance with the provisions of this Article or the plans and specifications, or that any of the materials or workmanship are not first-class or are unsound or improper, Tenant shall correct any such failure and shall replace any unsound or improper materials or workmanship.
Upon completion of any Alteration, Tenant, at Tenant's expense, shall obtain certificates of final approval of such Alteration required by any appropriate authority and shall furnish Landlord with copies thereof, together with "as-built" plans and specifications for such Alteration.
6.4 PAYMENT OF CLAIMS/MECHANICS LIENS: Tenant shall (a) pay when due and
before delinquency all costs and expenses of work done or caused to be done by
Tenant in the Premises; (b) keep the title to the Premises and every part
thereof free and clear of any lien or encumbrance in respect of such work; and
(c) indemnify and hold harmless Landlord against any claim, loss, cost and/or
demand (including legal fees), whether in respect of liens or otherwise, arising
out of the supply of material, services or labor for such work. Tenant shall
give Landlord not less than ten (10) days notice prior to the commencement of
any Alteration on the Premises, and Landlord shall have the right to post
notices of non-responsibility on the Premises.
Tenant shall immediately notify Landlord of any lien, claim of lien or other action of which Tenant has or reasonably should have knowledge and which affects the title to the Premises or any part thereof ("Lien"); and Tenant shall cause such Lien to be removed within thirty (30) days of the date of its attachment (or such additional time as Landlord may consent to in writing), either by paying and discharging such Lien or by posting a bond or such other security as may be reasonably satisfactory to Landlord.
If Tenant shall fail to remove any such Lien within the required time period, Landlord may take such action as Landlord deems necessary to remove same. Any and all costs incurred by Landlord in taking such action, including, without limitation, reasonable attorney fees, shall be repaid by Tenant to Landlord on demand, with interest thereon at the rate of ten percent (10) per annum from the date of payment; if unpaid, such amounts may be treated as Additional Rent.
6.5 LANDLORD NOT LIABLE FOR TENANT'S WORK: Landlord shall not under any circumstances be liable to pay for any work, labor or services rendered or materials furnished to Tenant in connection with the Premises, and no mechanic's or other lien for such Work, labor or services, or materials furnished shall under any circumstances attach to or affect the reversionary interest of Landlord in the Premises or in any alterations, repairs or improvements to be made thereon.
Nothing contained in the Lease shall be deemed or construed in any way as constituting the request or consent of Landlord, either express or implied, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration, or repair to the Premises or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials on behalf of Landlord that would give rise to the filing of any lien against the Premises.
ARTICLE SEVEN
INSURANCE
7.1 LIABILITY INSURANCE: Throughout the Term of this Lease, Tenant shall at its own expense provide and keep in force for the benefit of Landlord and Tenant:
(a) Property insurance covering the Premises for its full replacement (100%) cost, with deductibles reasonably acceptable to Landlord (as to which deductibles, Tenant shall be responsible for payment in the event of any casualty or loss);
(b) Commercial (Broad Form Comprehensive) general liability, including products, completed operations, and contractual liability coverage in limits of not less than $5,000,000.00 per occurrence combined single limit for personal injury and property damage, and naming Landlord as an additional insured:
(c) Workers compensation insurance covering all persons employed at the Premises to the extent required by the laws of Massachusetts;
(d) Employers liability coverage at limits not less than $250,000/250,000/250,000;
(e) Comprehensive automobile liability covering all owned, hired and non-owned vehicles in limits of not less than $5,000,000.00 per occurrence combined single limit for personal injury and property damage including all statutory coverages for all states of operation, and naming Landlord as an additional insured;
(f) Builder's risk insurance covering the construction of Tenant's Build-Out;
(g) Such other insurance, in such coverages and amounts and in such form, as is customarily obtained by owners of properties similarly constructed, operated, and maintained and reasonably acceptable to Landlord.
7.2 CASUALTY INSURANCE: Throughout the Term of this Lease, Landlord shall have the option as to the insurance required of Tenant in Section 7.1 (a) to obtain itself and keep in effect insurance for fire and special extended coverages (of such kind, in such amounts, and with such companies as Landlord may in its reasonable discretion determine) for the Premises. In the event that Landlord elects to obtain insurance policies for such coverages, Tenant shall upon demand reimburse Landlord for the premiums required to obtain and maintain such policies. Such premiums shall be deemed "Additional Rent" under Section 4.3.
7.3 REQUIREMENTS FOR ALL INSURANCE POLICIES: Notwithstanding anything contained herein to the contrary, Tenant shall be obligated to provide insurance for any of Tenant's property, including without limitation Tenant's furniture, fixtures, equipment, goods, inventory, and/or trade fixtures. All insurance required under this Section shall be primary and noncontributing and shall be written with companies reasonably acceptable to Landlord and its lenders. Tenant shall deliver to Landlord certificates evidencing the existence and amount of such insurance. No such policy shall be cancelable or subject to reduction of coverage or other modification except after twenty (20) days written notice to Landlord and its lenders and Landlord and its lenders shall be listed as "additional named insureds" under all policies relating to the Premises. Tenant shall not do nor permit to be done anything which would or shall invalidate the insurance policies referred to in this Article.
7.4 TENANT'S FAILURE TO PROVIDE INSURANCE: If Tenant fails to obtain or to keep in effect any of the insurance required under this Article, Landlord may, but shall have no
obligation to, procure such insurance at its option; any amounts advanced therefor shall be paid by Tenant as Additional Rent in accordance with Article IV.
ARTICLE EIGHT
DAMAGE OR DESTRUCTION
8.1 REPAIRS TO PREMISES: In the event the Premises are damaged or destroyed in whole or in part by fire or other casualty during the term of this Lease, and provided Landlord's lenders agree to the release of the insurance proceeds toward this end (which they may do in their sole discretion) then Landlord shall, after the adjustment of the insurance loss, immediately commence and diligently pursue the restoration of the Premises to good and tenantable condition. Landlord shall restore the Premises to substantially the same condition as before the occurrence of such casualty, and Landlord may elect to raze the damaged or destroyed improvement(s) and to use the insurance proceeds to replace the improvement(s) so razed. The completed work of repair, restoration or replacement shall be at least equal in value, quality and use to the condition of the Premises before such destruction.
8.2 APPLICATION OF INSURANCE PROCEEDS: The release of insurance proceeds shall at all times be subject to the approval and direction of Landlord's lender(s) as contemplated under Section 8.1 hereof. Tenant and Landlord shall cooperate fully, at Tenant's sole expense, to obtain the largest possible insurance recovery. If the insurance proceeds available for rebuilding are insufficient to cover the cost of repairs and restoration of the Premises as required hereunder, then Landlord may determine if the Premises shall be rebuilt. If the available insurance proceeds exceed the cost of such repairs and restoration, the excess shall be the property of the party obtaining and paying the premiums for such insurance, and the other party shall have no right or interest therein.
8.3 REDUCTION OF RENT/TERMINATION: In the event the Premises are damaged or destroyed in whole or in part by fire or other casualty during the Term of this Lease, (a) there shall be no abatement of reduction in Rent due under this Lease unless the restoration can not be completed within 180 days; and (b) neither party shall have the right to terminate this Lease on account of such damage or destruction without the consent of the other party unless the restoration can not be completed within 180 days.
ARTICLE NINE
CONDEMNATION
9.1 TOTAL TAKING: If the whole of the Premises or a substantial portion thereof such that Tenant can not continue any of its business operations, or if a material portion of the parking area portion of the Premises is taken by any public authority under the power of eminent domain, then this Lease shall terminate on the date possession of the Premises is delivered to such public authority. Fixed Rent and Additional Rent shall be paid to that date and prorated accordingly.
9.2 PARTIAL TAKING.
9.2.1 ADJUSTMENT TO RENT: If part (but less than a substantial portion of the Premises as contemplated in Section 9.1) of the Premises is taken by any public authority under the power of eminent domain, then, on the date possession is required by such public authority,
this Lease shall terminate as to the portion taken, and the Fixed Rent due hereunder shall be adjusted as follows:
(a) If part of either the Existing Building or Proposed Building which is included in the Premises is taken, then Fixed Rent shall be reduced on a square foot basis in proportion to the amount taken of such building which is taken.
(b) If no part of the Existing Building or Proposed Building is taken, but part of the land which is included in the Premises is taken, then Fixed Rent shall not be reduced or adjusted, unless said taking materially affects the tenant's use of the premises, in which case the fixed rent shall be reduced on a square foot basis in proportion to the amount of land taken.
9.2.2 RESPONSIBILITY TO REPAIR: Except, as otherwise provided in this Section, Landlord shall immediately commence and diligently pursue the restoration of the remaining Premises to the extent necessary to permit the continued use of the Premises, and shall use Landlord's Condemnation Award (as described below) therefor. Landlord shall restore the Premises to substantially the same condition as before the taking. In no event shall Landlord be required to repair or replace (a) Tenant's personal property (such as wall coverings, carpeting and window treatments); (b) Tenant's furnishings, operating equipment, trade fixtures, or merchandise; or (c) Tenant's Alterations; except to the extent that Landlord's Condemnation Award contains an amount allocated for reimbursement of any of the foregoing.
9.2.3 COST OF REPAIRS: If Landlord's Condemnation Award is insufficient to cover the cost of restoration required hereunder, Landlord may (but shall not be required to) complete such restoration and shall pay any and all amounts by which the cost to complete such work exceeds the Award.
9.3 LANDLORD'S OPTION TO TERMINATE: Notwithstanding anything to the contrary contained in this Lease, if part of the Premises is taken by any public authority under the power of eminent domain, Landlord shall have the right to terminate this Lease upon the occurrence of any of the following and upon written notice given to Tenant not later than ninety (90) days after commencement of condemnation proceedings against the Premises (or, if such proceedings are not commenced, not later than fourteen (14) days before Landlord delivers possession of the part so taken by such public authority):
(a) If the taking of part of the Premises significantly and adversely affects Tenant's use of the Premises; or
(b) If restoration of the remainder of the Premises cannot in Landlord's opinion be completed within 180 days after the date possession is required by the public authority; or
(c) If Landlord's Condemnation Award is insufficient to the necessary restoration; or
(d) If the taking (i.e., the date possession is required by the public authority) occurs within the last 180 days of the then current Term of the Lease, provided however
that the Lease may not be terminated under this Subsection if Tenant's option, if any, to further extend the term of this Lease is exercised after fifteen (15) days after Tenant receives from Landlord the termination notice described above.
Termination of the Lease pursuant to this Section shall be effective as of the later of the date possession is required by the public authority or sixty (60) days after Tenant receives the termination notice described above.
9.4 LANDLORD'S CONDEMNATION AWARD: All damages awarded for such taking shall belong to and be the property of the Landlord, whether such damages shall be awarded as compensation for diminution in value to the leasehold or to the fee of the Premises and/or for any improvements to the Premises whether made by Landlord or Tenant. The amount received by Landlord which is allocable to the Premises shall be "Landlord's Condemnation Award." However, Tenant shall be entitled to any award for removal and relocation expenses, Tenant's loss of business, and fixtures paid for by Tenant. Landlord and Tenant shall each seek their own award and pay their own expenses in connection therewith.
ARTICLE TEN
ASSIGNMENT SUBLETTING AND INSOLVENCY
10.1 ASSIGNMENT/CHANGE IN TENANT OWNERSHIP: Neither the Lease, nor any interest of Tenant in the Lease, shall be sold, assigned, or otherwise transferred, directly or indirectly, whether by operation of law or otherwise, and there shall be so subletting of the Premises or any part thereof, without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Should any such an assignment or transfer be permitted hereunder, Landlord may at its option (i) elect to enter into a new lease with the assignee pursuant to the assignment or (ii) require payment to Landlord of fifty (50%) percent of any and all amounts (after deduction of reasonable brokers and attorneys fees in connection with the transaction, as well as reasonable accommodations for tenant improvements and/or "free rent" periods, but only to the extent they are usual and customary in the office market at that time) collected by Tenant from the assignee pursuant to the assignment which are in excess of the Fixed and Additional Rent established by this Lease. No permitted assignment or other transfer as set forth above shall relieve Tenant of its direct and primary liability under this Lease.
The foregoing shall not apply to transactions with an entity into or with which Tenant is merged or consolidated or to which substantially all of Tenant's assets are transferred, or to any entity which controls or is controlled by Tenant or is under common control with Tenant, provided that in any of such events (i) the successor to Tenant has a net worth computed in accordance with generally accepted accounting principles at least equal to the net worth of the Tenant at the highest point within the two years preceding such proposed transfer; (ii) proof satisfactory to Landlord of such net worth is delivered to Landlord at least thirty (30) days prior to the effective date of any such transaction; (iii) the assignee agrees to be directly bound to Landlord and executes such documentation as may be reasonably requested by Landlord toward this end and (iv) the proposed assignee or subtenant or transferee makes substantially similar products to those made by Tenant from the Premises. Notwithstanding the foregoing, no permitted assignment shall relieve the Tenant from its direct and primary liability under this Lease.
10.2 SUBLETTING: Tenant shall not sublet the Premises, or any part thereof, at any time during the Term hereof without the prior written consent of Landlord, which consent shall not be unreasonably withheld. No permitted sublet shall relieve Tenant of its direct and primary liability under this Lease.
10.3 MORTGAGE OR PLEDGE: In no event shall Tenant mortgage, encumber, pledge, grant a security interest in, collaterally assign, or conditionally transfer as collateral, the Lease, any equipment or fixtures of Landlord incorporated in or used in connection with the Premises, provided however that this Section 10.3 shall not preclude assignment permitted pursuant to Section 10.1 hereof.
10.4 INSOLVENCY PROVISIONS
10.4.1 LANDLORD'S OPTION TO TERMINATE: If the estate of Tenant created hereby shall be taken in execution or by other process of law, or if Tenant shall be adjudicated insolvent pursuant to the provisions of any present or future insolvency law under state law, or if Tenant shall cease doing business as a going concern or generally not pay its debts as they become due, or if a receiver or trustee of the property of Tenant shall be appointed under state law by reason of Tenant's insolvency or inability to pay its debts as they become due or otherwise, or if any assignment shall be made of Tenant's property for the benefit of creditors under state law, then and in such event, Landlord may, at its option, terminate this Lease and all rights of Tenant hereunder declaring an Event of Default under Article Twelve.
10.4.2 TRANSFER OF TENANT'S INTEREST: Neither Tenant's interest in the Lease, nor any lesser interest of Tenant therein, nor any estate of Tenant hereby created shall pass to any trustee, receiver, assignee for the benefit of creditors or other person or entity or otherwise by operation of law under the laws of any state having jurisdiction of the person or property of Tenant unless Landlord shall consent to such transfer in writing. No acceptance by Landlord of Rent or any other payment from any such trustee, receiver, assignee, person or other entity shall be deemed to have waived, nor shall it waive, the requirement of Landlord's consent or the right of Landlord to terminate this Lease in the absence of such consent to any transfer of Tenant's interest in this lease.
10.4.3 TIME FOR ASSUMPTION OR REJECTION OF LEASE IN TENANT'S BANKRUPTCY: In the event that either a voluntary petition or involuntary petition for reorganization or liquidation or adjustment of debts is filed by or against Tenant under Chapter 7, 11 or 13 of the Bankruptcy Code, the Tenant or the bankruptcy trustee or the Tenant as debtor in possession must elect to assume or reject this Lease within 60 days after the date of filing of the petition. If the Tenant, trustee or debtor in possession shall elect to assume this Lease, whether for the purpose of assignment or otherwise, such election and assignment may only be made if all of the terms and conditions of Section 10.4.4 hereof are satisfied. If the Tenant, trustee or debtor in possession shall fail to elect or assume this Lease within 60 days after the date of filing the bankruptcy petition, this Lease shall be deemed to have been rejected. In the event of such rejection, Landlord shall thereupon be immediately entitled to possession of the Premises without further obligation to the Tenant, trustee or debtor in possession and this Lease shall be cancelled, but Landlord's right to be compensated for damages in such proceeding shall survive.
10.4.4 CONDITIONS TO THE ASSUMPTION OF LEASE IN BANKRUPTCY PROCEEDINGS: In the event that a voluntary or involuntary bankruptcy petition is filed by or against Tenant, and Tenant, trustee or debtor in possession elects to assume the Lease in accordance with the provisions of Section 10.4.3 above, such assumption shall only be effective if each of the following conditions, which Landlord and Tenant hereby acknowledge to be commercially reasonable in the context of a bankruptcy proceeding of Tenant, have been satisfied:
(a) The Tenant, trustee or the debtor in possession has cured or has provided Landlord adequate assurance that the Tenant, trustee or debtor in possession will cure all monetary defaults under the Lease within 10 days from the date of assumption of the Lease.
(b) The Tenant, trustee or the debtor in possession has cured or has provided Landlord adequate assurance that the Tenant, trustee or debtor in possession will cure all non-monetary defaults under the Lease within 30 days from the date of assumption of the Lease.
(c) The Tenant, trustee or the debtor in possession has compensated or has provided to Landlord adequate assurance that Landlord will be compensated for any pecuniary loss incurred by Landlord arising from the default of the Tenant, trustee or debtor in possession within 10 days from the date of assumption of the Lease.
(d) The Tenant, trustee or debtor in possession has provided Landlord with adequate assurance of the future performance of each of the Tenants, trustees or debtor in possessions obligations under this Lease; provided, however, that the Tenant, trustee or debtor in possession shall also deposit with the Landlord as security for the timely payment of rent an amount equal to two (2) months rent accruing under this Lease.
(e) The assumption of the Lease will not breach any provision in any other lease, mortgage, financing agreement or other agreement by which Landlord is bound relating to the premises.
10.4.5 ASSIGNMENT OF LEASE BY TENANT: Notwithstanding any provisions of this Article to the contrary, if this Lease is assigned to any person or entity pursuant to the provisions of the Bankruptcy Code:
(a) Any and all monies or other considerations, payable or otherwise, to be delivered in connection with such assignment, shall be paid or delivered to Landlord, shall be and remain the exclusive property of Landlord, and shall not constitute property of Tenant or the estate of Tenant within the meaning of the Bankruptcy Code. Any and all monies or other considerations constituting Landlord's property under the preceding sentence not paid or delivered to Landlord shall be held in trust for the benefit of Landlord and shall be promptly paid or delivered to Landlord; and
(b) Any person or entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such
assignment. Any such assignee shall upon demand execute and deliver to Landlord an instrument confirming such assumption.
10.4.5 MEASURE OF DAMAGES: Notwithstanding anything in this Lease to the contrary, all amounts payable by Tenant to or on behalf of Landlord under this lease, whether or not expressly denominated as rent, shall constitute rent for the purpose of Section 502(b)(6) of the Bankruptcy Code.
10.5 SURVIVE LEASE: The provisions of Article 10 hereof shall survive the expiration or earlier termination of the Lease.
ARTICLE ELEVEN
OBLIGATION OF LESSEE
11.1 COMPLIANCE WITH LAWS, ETC.: Tenant shall comply with all statutes, ordinances, rules and regulations, of all Federal, state, municipal, or other governmental or quasi-governmental authorities having jurisdiction over the Premises or any part thereof and the use and occupation thereof by Tenant, and tenant shall so comply, whether or not such statutes, ordinances, rules and regulations, shall hereafter be enacted, and whether or not the same may be said to be within the present contemplation of the parties hereto. Landlord represents that the Premises (i.e. Existing Building and related Property areas) are presently in compliance with all such statutes, ordinances, rules and regulations.
In the event compliance requires Alterations to the Premises, Landlord shall, at Tenant's request, contest or seek relief, but nothing herein shall relieve Tenant of the obligation, at Tenant's expense, to comply whenever Landlord shall so direct.
Notwithstanding anything herein to the contrary, Tenant shall not be required to make structural changes or changes to building systems unless required of Tenant's own particular use, in which case any and all such changes shall be at Tenant's sole cost and expense.
11.2 PERMANENT SIGNAGE: Tenant shall install corporate identity signs in accordance with the terms of the Zoning Board of Appeals of Billerica, only after obtaining any and all requisite permits and approvals therefor. Tenant agrees that it shall not erect nor cause to be erected any permanent signs, notices, or advertisements upon the Premises or affix such thereto without the prior written consent of Landlord, which shall not be unreasonably withheld, and unless such signs, notices or advertisements shall be erected and affixed according to all laws, local regulations and ordinances, and shall advertise only a business or use of the Premises specifically authorized by this lease. Tenant shall not erect any sign that by reason of its weight or size might damage the Premises, nor shall Tenant paint any signs, notices, or advertising on the exterior walls of the building or buildings without Landlord's prior written consent. Signs placed on the Premises by Tenant shall be removed by it not later than the end of the Term of this Lease as it may be extended hereunder, or any sooner termination thereof, unless Landlord and Tenant agree otherwise, and upon removal of any such signs, Tenant shall repair any damage to the Premises caused thereby.
11.3 SECURITY: Tenant shall be solely responsible for security of the Premises, and shall use such means and methods of assuring security for the premises as are reasonably
acceptable to the Landlord and appropriate for its business; and Tenant agrees to indemnify and hold harmless Landlord from and against any and all claims, losses, liabilities and damages arising from any breaches, lapses, or failure to provide adequate security for the persons and property on the Premises (including damage to the Premises itself).
11.4 INDEMNIFICATION: Tenant shall defend, indemnify and save harmless, Landlord and its officers, stockholders, directors, employees, or agents of Landlord (collectively "Indemnified Parties"), from (a) all liabilities, claims, causes of action, suits, damages, and expenses (collectively "Claims") arising from (i) any work or thing whatsoever done for or by Tenant, or any condition created in or about the Premises during the Term by Tenant; (ii) any use, nonuse, possession, occupation, alteration, repair, condition, operation, management, or maintenance of the Premises or any part thereof, or of any street, alley, sidewalk, curb, vault, passageway, common area or space, comprising a part thereof or adjacent thereto by Tenant; (iii) any negligent or otherwise wrongful act or omission of Tenant or its employees, agents, or contractors; (iv) any accident, injury (including death) or damage to any person or property occurring in, on or about the Premises, or any part thereof or in, on or about any street, alley, sidewalk, curb, vault, passageway, common area or space comprising a part thereof or adjacent thereto, not attributable to acts or omissions to act by Landlord; (v) any contest of matters permitted by the Lease; and (vi) any breach, violation, or nonperformance of any covenant, condition or agreement in the Lease to be observed or performed by Tenant; and (b) all costs, expenses, and liabilities incurred, including reasonable attorney fees and disbursements through and including appellate proceedings, in or in connection with any of such Claims. If any action or proceeding shall be brought against any of the Indemnified Parties by reason of any such Claims, Tenant, upon notice from any of the Indemnified Parties, shall resist and defend such action, at its sole cost and expense by counsel chosen by Tenant who shall be reasonably satisfactory to such Indemnified Party. Tenant or its counsel shall keep each Indemnified Party fully apprised at all time of the status of such defense. The provisions of this Section 11.4 shall survive the expiration or earlier termination of the Lease.
11.5 LANDLORD NOT LIABLE FOR LOSS OF TENANT'S PROPERTY: Neither Landlord nor its agents shall be liable for any loss of or damage to the property of Tenant or others by reason of casualty, theft, or otherwise, or for any injury or damage to any persons or property resulting from any cause unless due to the gross negligence or willful misconduct or Landlord, its agents, servants or employees acting with the scope of their employment.
ARTICLE TWELVE
DEFAULT BY TENANT
12.1 EVENTS OF DEFAULT: Each of the following shall be deemed an event of default ("Event of Default") and a breach of the Lease by Tenant.
(a) If the Fixed Rent shall not be paid when due and payable, provided that said default is not cured within ten (10) days after written notice (provided however, Landlord shall not be required to give written notice more than one time any any twelve month period).
(b) If Tenant shall fail to pay any Additional Rent required hereunder when due and payable, provided that said default is not cured within ten (10) days after written notice (provided however, Landlord shall not be required to give written notice more than one time any any twelve month period).
(c) If Tenant shall default in the performance or observance of
any of the other terms of the Lease, and such default shall continue for
thirty (30) days after written notice by Landlord to Tenant, or (if default
is such a nature that it cannot be completely remedied within said thirty
(30) day period) Tenant shall not commence within said thirty (30) day
period to remedy such default and thereafter diligently prosecute the same
to completion.
(d) If Tenant vacates or abandons the Premises, except pursuant to an assignment or sublease permitted by the terms of this Lease.
(e) If Landlord declares an Event of Default as permitted in Article Ten in the event of Tenant's Bankruptcy or insolvency.
(f) If Tenant shall cease to exist as a corporation in good standing in the state of its incorporation.
(g) If Tenant uses the Premises for any purpose other than the permitted use under this Lease. 12.2 REMEDIES:
12.2.1 RE-ENTRY AND POSSESSION: Upon the occurrence of an Event of Default, Landlord, without further notice to Tenant, may declare this Lease and/or Tenant's right of possession at an end and may re-enter the Premises by process of law, in which event Landlord shall have the right to recover from Tenant the following:
(a) The worth at the time of award of the unpaid Rent which has been earned at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination of this Lease until the time the award exceeds the amount of such rental loss the Tenant proves could have been reasonably avoided;
(c) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which, in the ordinary course of things, would be likely to result therefrom, including, but not limited to, the reasonable cost of recovering possession of the Premises, expenses of reletting including necessary renovations and alterations, reasonably attorney fees and real estate brokerage commissions. The "worth at the time of the award," as used in (a) and (b) of this Article 12.2.1, is to be computed by allowing interest at the rate of twelve (12%) percent per annum. Notwithstanding the foregoing, in no event shall Landlord be entitled to consequential damages.
No receipt of monies by Landlord from Tenant after termination of the Lease, or after the giving of any notice of the termination of the Lease, shall reinstate, continue or extend the Initial Term, or affect any prior notice given to Tenant, or operate as a waiver of the right of Landlord to enforce the payment of Rent payable by Tenant, or operate as a waiver of the right of Landlord to recover possession of the Premises, except herein provided. Except as provided herein or as prohibited by law, Tenant waives any right of redemption provided by any law now in force or hereafter enacted, or re-entry or repossession.
12.2.2 CONTINUATION OF LEASE: Upon the occurrence of an Event of Default Landlord may, at its option, continue this Lease in full force and effect without termination Tenant's right of possession, and collect Rent, Additional Rent, and other monetary charges when due. Landlord shall have the right to take the following action which shall not constitute a termination of Tenant's right of possession: (1) acts necessary to maintain, repair and preserve the Premises; (2) efforts to relet the Premises, or any part thereof, to third parties for Tenant's account; and (3) the appointment of a receiver to protect Landlord's interest in this Lease.
12.2.3 REMEDIES CUMULATIVE: These remedies of Landlord are cumulative and in addition to and not exclusive of any other remedy of Landlord herein given or which maybe permitted by law. These remedies may be exercised jointly or severally without constituting an election of remedies.
12.3 WAIVER: No failure by Landlord to require strict performance of any covenant or term of the Lease, or to exercise any right or remedy upon a breach, and no acceptance of full or partial Rent during any such breach, shall constitute a waiver of any such breach. No term of the Lease to be performed or complied with by Tenant, and no breach thereof, shall be waived or modified except in writing by Landlord. No waiver of any breach shall affect the Lease.
12.4 RIGHT TO CURE TENANT'S DEFAULT: If any Event of Default occurs, or if Tenant shall fail to comply with the Lease, Landlord shall have the right but not the obligation (a) to perform for Tenant if the same arises out of any obligation owed by Tenant to a third-party or (b) to make any expenditure or incur any obligation for the payment of money for any obligation owed to Landlord, including, but not limited to, reasonable attorney fees and disbursements in instituting, prosecuting or defend in any action, with interest thereon at eighteen percent (18) per annum or the maximum rate permitted by law ("Applicable Rate"). Such amounts shall be Additional Rent and shall be paid by Tenant to Landlord immediately.
ARTICLE THIRTEEN
QUIET ENJOYMENT
Upon payment of Rents and performance of all terms of the Lease, Tenant may, during the Term or any Renewal Term, peaceably and quietly have, hold and enjoy the Premises without any manner of suit, trouble or hindrance from any person claiming through Landlord subject to the terms of the Lease.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
14.1 NOTICE: All notices required or permitted hereunder shall be in writing and shall be given either by personal delivery, or by first class, certified mail, or by reliable overnight delivery service which provides receipts evidencing sending and delivery. If such notice is served personally, the notice shall be deemed made at the time of delivery, but only if a receipt evidencing delivery of the notice is obtained. If notice is by mail, the notice shall be deemed given five (5) days after the date when deposited in the United States mail, certified, return receipt requested, and postage prepaid. If notice is by overnight delivery service, the notice shall be deemed given one business day following the date such notice is deposited with the delivery service, all fees prepaid.
Any such notice shall be addressed to the parties as follows:
Landlord: Progress Road LLC 10 Waltham Street Wilmington, Mass. 01887 Attn: Michael Vetrano, CFO with a copy to: Paul A. Hedstrom, Esquire Hinckley, Allen & Snyder One Financial Center, Suite 4600 Boston, MA 02111-2625 Tenant: Terry Massood PRI Automation 17 Progress Road Billerica, Mass. 01821 with a copy to: Attorney Jacob Politan Foley Hoag & Eliot One Post Office Square Boston, Massachusetts 02109 |
Any party may change its address, or change or designate additional persons to receive such notices, by written notice as provided herein.
14.2 HOLDING OVER: Tenant acknowledges that possession of the Premises must be surrendered to Landlord at the expiration or sooner termination of the Term of the Lease, whichever is later. The parties agree that the damage to Landlord to timely surrender possession of the Premises as aforesaid will be substantial, will exceed the amount of the Fixed Rent and Additional Rent payable, and will be impossible to accurately measure. Tenant therefore agrees that if possession of the Premises is not surrendered to Landlord as required, then Tenant shall pay Landlord as liquidated damages for each month and each portion of any month during which Tenant holds over in the Premises in addition to any sums payable pursuant to the foregoing indemnity, a sum equal to two (2) times the aggregate of the Fixed Rent and Additional Rent which was payable for the last month of the Term. Nothing herein shall permit Tenant to retain
possession of the Premises after the expiration or sooner termination of the Term of the Lease. If Tenant holds over in possession after the expiration or sooner termination of the Term of the Lease, whichever is later, this shall not extend the term or renew the Lease, but the tenancy shall continue as a tenancy from month-to-month upon the terms and conditions of the Lease at the Fixed Rent and Additional Rent as herein increased. This provision shall survive the expiration or earlier termination of the Lease.
14.3 LANDLORD'S ACCESS TO PREMISES: In addition to the right of inspection described in Article Six, Landlord shall at all times during the Term have the right to enter the Premises at reasonable times and upon reasonable notice under the circumstances to inspect or to show to prospective purchasers. Landlord shall also have the right during the Term to display the customary "For Sale" sign on the Premises, provided that Landlord indicates that Tenant's business is not for sale. During the last nine (9) months of the Term, Landlord shall have the right to enter the Premises at reasonable times and upon reasonable notice to show to prospective new tenants and to display the customary "For Rent" signs on the Premises.
Further, Landlord shall at all times during the Term have the right to enter the Premises at reasonable times and upon reasonable prior notice to Tenant under the circumstances to make such repairs or alterations as Landlord deems necessary or advisable, but such right shall not be construed as obligating Landlord to make any repairs or inspections of the Premises. Landlord agrees to use reasonable efforts not to materially interfere with Tenant under the foregoing circumstances.
14.4 PROVISIONS RELATING TO LANDLORD
A. DEFINITION OF "LANDLORD": As used in this Lease, the term "Landlord" shall mean the owner or a mortgagee in possession, as the case may be. Nothing herein shall permit Tenant to retain possession of the Premises after the expiration or sooner termination of the Term of the Lease.
B. SUBORDINATION: On Landlord's demand, Tenant agrees to subordinate its rights hereunder to the lien of any mortgage or any other method of financing or refinancing, now or hereafter placed against all or any portion of the Premises and/or any improvements now or hereafter built by Landlord on the Premises, and to any and all advances made or to, be made thereunder, and to the interest thereon, and to all renewals, replacements, consolidations and extensions thereof by Landlord. Within ten (10) days after such demand, Tenant shall execute, acknowledge and deliver all instruments necessary or proper to effect such subordination; provided, however, that notwithstanding any such subordination, Tenant's rights under this Lease shall remain in full force and effect so long as Tenant is not in default beyond any applicable notice, grace and cure periods, but if proceedings are brought for foreclosure or to exercise a power of sale or the like, Tenant shall attorn to the purchaser. If Tenant shall fail, neglect or refuse to execute and deliver any such document within ten (10) days after receipt of written notice to so do and the receipt by Lessee of the document to be executed by it, Tenant hereby appoints Landlord, its successors and assigns, the attorney-in-fact of Tenant, irrevocably to execute and deliver any and all such documents for and on behalf of Tenant. Notwithstanding anything to the contrary herein, Landlord shall execute and deliver to Tenant no later than the Commencement Date, a Subordination Non-Disturbance and Attornment Agreement, executed
by Landlord's lender on its standard form, for Tenant's execution and return to Landlord for recording.
C. COLLECTION OF JUDGMENTS: Tenant shall look first to Landlord's interest in the Premises for the collection of any judgment requiring the payment of money by Landlord because of any default by Landlord under the Lease. In no case shall Tenant seek collection against the assets of Landlord greater in the aggregate than the fair market value of the Premises without deduction for any liens, mortgages, or encumbrances thereon. Neither Landlord's affiliates nor the officers, directors, stockholders, or employees of Landlord or its affiliates, shall be subject to levy execution or other procedure for the satisfaction of Tenant's remedies under the Lease. However, nothing contained herein shall be construed to permit Tenant to offset, and Tenant agrees that it shall not offset against the rents due a successor Landlord, for any judgment requiring the payment of money by reason of any default of a prior Landlord.
14.5 WAIVE JURY: INTENTIONALLY DELETED
14.6 NO BROKERS: Landlord agrees to pay a brokerage fee to the Stubblebine Company as broker in this transaction, pursuant to a separate written agreement between them. The parties acknowledge this is the only brokerage fee due from Landlord arising from this Lease. Tenant agrees to indemnify and save Landlord harmless from all claims from brokerage commission by any person or entity claiming to have brought about this Lease transaction, other than the Stubblebine Company. This Article shall survive the expiration or earlier termination to the Lease.
14.7 RECORDING: This Lease shall not be recorded, but the parties agree to execute and deliver for recording a Memorandum of Lease incorporating the basic terms and conditions hereof, but deleting any mention of the rental payments.
14.8 ATTORNEY FEES: Should either party hereto institute any action or proceeding in court to enforce any provision hereof or for damages by reason of an alleged breach of any provision of this Lease, the prevailing party shall be entitled to receive from the losing party such amount as the court may adjudge to be reasonable attorney fees for the services rendered the prevailing party in such action or proceeding.
14.9 ENFORCEABILITY: If any provision of the Lease shall be invalid or unenforceable, the remainder of the Lease shall not be affected and every provision of the Lease shall be enforceable to the fullest extent.
14.10 SUCCESSORS AND ASSIGNS: This Lease shall bind and inure to the benefit of Landlord and Tenant and their respective successors and, except as is otherwise provided herein, their assigns.
14.11 GOVERNING LAW: The Lease shall be governed by and construed in accordance with laws of the Commonwealth of Massachusetts.
14.12 ENTIRE AGREEMENT: This Lease contains the entire agreement between the parties and may not be extended, terminated or modified except in writing executed by the parties hereto. All prior understandings and agreements between the parties and all working drafts are
merged in the Lease. The parties agree that no inferences shall be drawn from changes from any working drafts of the Lease.
14.13 HEADINGS: The headings are only for convenience and in no way define, limit or describe the scope nor in any way affect the Lease.
14.14 LANDLORD'S RULES AND REGULATIONS: Landlord shall be entitled to promulgate, and Tenant shall abide by all reasonable rules and regulations governing the Premises and access thereto, (particularly during the period of Landlord's Build-Out of the Proposed Building) provided Tenant's rights under this Lease or its use of the Premises are not materially impaired thereby.
14.15 FORCE MAJEURE: In any case where either party is required to do any act other than the payment of money, delays caused by or resulting from acts of god; war; civil commotion; fire; flood or other casualty; labor difficulties; shortages of labor, materials or equipment; unusual or onerous government regulations; unusually severe weather or other causes of a like catastrophic nature and beyond such party's reasonable control ("Force Majeure"), shall not be counted in determining the time during which such act shall be completed and such time shall be deemed to be extended by the period of such delay.
ARTICLE FIFTEEN
TENANT'S RIGHT OF FIRST OFFER
Landlord hereby grants to Tenant the following "right of first offer" to acquire fee ownership of the Premises provided: (i) that Tenant has not been in material default under this Lease beyond any applicable notice grace and cure periods and (ii) that this Lease is in existence and in full force and effect. Prior to the execution of any final binding agreement for the sale of the Premises, Landlord shall first offer the Premises to the Tenant, in writing, stating Landlord's offering price, term and conditions; whereupon Tenant shall have a period of ten (10) business days to enter into a binding final agreement with Landlord to acquire the Premises on the price, terms and conditions set forth in Landlord's written notice. If Tenant fails to execute such binding final agreement, then the rights under this Section shall lapse and be deemed null and void; Landlord shall not be required to re-offer the Premises to Tenant (unless Landlord accepts an offer within the next six (6) months at a price which is more than ten (10%) percent less than that which was rejected by Tenant); and Landlord may convey the Premises to any party, at any time, on price, terms and conditions acceptable to Landlord.
IN WITNESS WHEREOF, the parties have executed this Lease under seal the day first written above.
WITNESS: PROGRESS ROAD LLC (Landlord) /s/ [ILLEGIBLE] By /s/ [ILLEGIBLE] ------------------------------------- ------------------------------------- |
WITNESS: PRI AUTOMATION (TENANT) /s/ [ILLEGIBLE] By /s/ Cosmo S. Trapani ------------------------------------- ------------------------------------- Attach Corporate Resolution/Evidence of Authority |
Exhibit 10.33
FIRST AMENDMENT TO LEASE
This First Amendment to Lease dated as of March 21, 2001, PROGRESS ROAD LLC, a Massachusetts limited liability company with a principal place of business at 10 Waltham Street, Wilmington, Massachusetts 01887, as Landlord ("Landlord"), and PRI AUTOMATION, a Massachusetts corporation with its principal place of business at 17 Progress Road, Billerica, Massachusetts as tenant ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant entered into that certain lease dated as of October 12, 2000, (the "Lease") of that certain Building located at 17 Progress Road, Billerica, Massachusetts, as more particularly described in the Lease (the "Premises"); and
WHEREAS, in connection with the Landlord's construction of the Proposed Building, Tenant has INTER ALIA requested certain revisions and additions in the Proposed Building and changes to the existing Building which changes require modification to the Lease as are hereafter set forth.
NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Landlord and the Tenant hereby agree to amend the Lease as follows:
1. Section 1.1. of the Lease is amended by deleting the following words in subsection (a) "57,000 +/- rentable square feet of space" replacing the same with the following: "58,250 rentable square feet of space which includes 1,250 feet of space in the catwalk to be constructed in the Premises at the same time as the construction of the Proposed Building as hereinafter defined."
2. Section 1.1 of the Lease is hereby further amended by deleting the following words in subsection (b) "61,543 +/- rentable square feet of space" and replacing the same with the following: "61,948 rentable square feet of space including 7,948 square feet of space on the mezzanine".
3. Section 1.1 of the Lease is hereby further amended by deleting the words "118,543 rentable square feet of space" and replacing with "120,198 rentable square feet of space."
4. Section 1.2 A is hereby amended by inserting the following paragraph between the existing second and third paragraphs thereof
"Landlord and Tenant acknowledge and agree that as of the date hereof the Tenant has requested certain revisions to the Proposed Building to be constructed by Landlord which are in excess of the costs and the scope of the work set forth in Exhibit B to the Lease. The parties have agreed, by correspondence dated January 30, 2001, as modified by correspondence dated March 16, 2001, copies of which are attached hereto as Exhibit 1 and incorporated herein, the Landlord will include certain items denoted with the letter X under the column labeled Colrane Company in the scope of the work the
Landlord will complete under this Lease and for the items listed with a dollar amount shown as Numbers 5 and 8 the Landlord agrees to expend up to such amount listed therein as an allowance, but not a guarantee of the total cost of such item with the Tenant agreeing to pay for the cost of any overage for such item(s). Tenant agrees that the items which have been marked with an X will be paid for by the Tenant in addition to other sums due and owing by the Tenant pursuant to the Lease. The Tenant will pay these sums either directly to the contractor completing such work or to Landlord upon presentation of an invoice therefore, but in any event prior to taking occupancy of the Proposed Building. Additionally, Landlord and Tenant agree to delete the current Exhibit B to the Lease and replace the same with Exhibit B-1 attached hereto and incorporated herein."
5. Section 3.2B(ii) is hereby amended by deleting the words "June l, 2001" and replacing the same with "September 15, 2001".
6. Section 3.2B(iii) is hereby deleted in its entirety and replaced with the following:
Notwithstanding any provision of this Lease to the contrary, in the event
that the Proposed Building is not substantially completed as provided in
Section 3.2(c) hereof on or prior to the Deferred Delivery Date (as such
date may be extended for reasons due to Force Majeure and/or to Tenant's
Delay), then Tenant may elect to receive from Landlord as liquidated
damages an abatement of Fixed Rent for the Proposed Building only
(following the commencement of rental obligations pursuant to Section 4.1
hereof) equal to (a) one hundred percent (100%) of the Fixed Rent due for
the Proposed Building for each day the Proposed Building is not
substantially completed as provided in Section 3.2(c) hereof beyond the
Deferred Delivery Date, as such date may be extended as aforesaid. The
foregoing remedies shall be Tenant's sole and exclusive remedies for not
having the Proposed Building not being ready for occupancy as required
hereunder. For purposes hereof, the Deferred Delivery Date shall be
September 15, 2001 as such date may be extended for a period equal to that
of (i) any delays due to Force Majeure, (ii) the number of delay days
caused by a Tenant's Delay as hereinbefore determined.
7. Section 3.3 is hereby deleted in its entirety.
8. Section 4.2.2 is hereby deleted in its entirety and replaced with the following:
"4.2.2 FIXED RENT FOR THE INITIAL TERM: The Fixed Rent for the each Lease Year of the initial Term of this Lease shall be as follows:
A. FIXED RENT AS TO EXISTING BUILDING AND RELATED PROPERTY AREAS:
1st Lease Year: $ 404,837.50/annual; $ 33,736.46/mo. 2nd Lease Year: $ 404,837.50/annual; $ 33,736.46/mo. 3rd Lease Year: $ 413,575.00/annual: $ 34,464.58/mo. 4th Lease Year: $ 413,575.00/annual: $ 34,464.58/mo. 5th Lease Year: $ 422,312.50/annual: $ 35,192.71/mo. 6th Lease Year: $ 422,312.50/annual: $ 35,192.71/mo. 7th Lease Year: $ 431,050.00/annual: $ 35,920.83/mo. 8th Lease Year: $ 431,050.00/annual: $ 35,920.83/mo. 9th Lease Year: $ 431,050.00/annual: $ 35,920.83/mo. 10th Lease Year: $ 431,050.00/annual: $ 35,920.83/mo. |
B. FIXED RENT AS TO PROPOSED BUILDING AND RELATED PROPERTY AREAS:
Subject to the completion and delivery of the Proposed Building as contemplated in Section 3.2 hereof, Tenant shall pay to Landlord Fixed Rent attributable to the Proposed Building and related Property areas as follows:
1st Lease Year: $486,291.80/annual: $ 40,524.82/mo. 2nd Lease Year: $486,291.80/annual: $ 40,524.82/mo. 3rd Lease Year: $495,584.00/annual: $ 41,298.67/mo. 4th Lease Year: $495,584.00/annual: $ 41,298.67/mo. 5th Lease Year: $504,876.20/annual: $ 42,073.00/mo. 6th Lease Year: $504,876.20/annual: $ 42,073.00/mo 7th Lease Year: $514,168.40/annual: $ 42,847.37/mo. 8th Lease Year: $514,168.40/annual: $ 42,847.37/mo. 9th Lease Year: $514,168.40/annual: $ 42,847.37/mo. 10th Lease Year: $514,168.40/annual: $ 42,847.37/mo." |
9. This First Amendment to Lease may be executed in two (2) or more counterparts, each of which shall be an original but such counterparts together shall constitute one and the same instrument notwithstanding that both Landlord and Tenant are not signatories to the same counterpart. Delivery of an executed counterpart of this First Amendment to Lease by telefacsimile shall be equally as effective as delivery of any original executed counterpart. Any party delivering an executed counterpart of this First Amendment to Lease by telefacsimile also shall deliver an original executed counterpart of this First Amendment to Lease, but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this First Amendment to Lease. Signature and acknowledgement pages may be detached from the counterparts and attached to a single copy of this First Amendment to Lease to physically form one (1) document.
10. All other terms, conditions, covenants and provisions as appear in the Lease are hereby ratified and confirmed and shall remain unchanged.
WITNESS OUR HANDS AND SEAL AS OF THIS 21st DAY OF MARCH 2001.
TENANT: LANDLORD: PRI AUTOMATION PROGRESS ROAD LLC By: By: --------------------------------- ----------------------------- Its: Its: -------------------------------- ---------------------------- |
Exhibit 10.34
LEASE
Boulder Tech Center
THIS LEASE ("Lease"), dated May 14, 1999, is between MUM IV, LLC, a Colorado limited liability company ("Landlord") and Helix Technology Corporation, a Delaware corporation ("Tenant").
For and in consideration of the covenants and agreements herein contained, Landlord and Tenant hereby agree as follows:
Section 1. ADDITIONAL DEFINED TERMS
In addition to those terms defined in the introductory paragraph of this Lease, the following terms shall have the following meanings when used in this Lease:
(a) Estimated Operating Cost: An amount equal to Two Dollars and Forty-five Cents ($2.45) per square foot per calendar year, which represents an estimate of the Operating Cost for the entire year in which the Term of this Lease begins.
(b) Base Rent: The annual amount of rent payable with respect to each Lease Year during the term of this Lease payable as set forth in Section 4(a). The amount of the Base Rent for the first Lease Year shall be Eight Dollars and Ninety-Five Cents ($8.95) per square foot of Rentable Area of the Premises. The amount of the Base Rent for all Lease Years after the first Lease Year shall be calculated in the manner set forth in Section 4(a). During each Lease Year, Base Rent shall include the previous year's Base Rent and any rental increase from the previous year.
(c) Building: The building to be constructed by Landlord upon the Premises
pursuant to Section 10 of this Lease, the plans and specifications for which are
shown on Exhibit B attached hereto, which building shall contain approximately
60,906 (sixty thousand nine hundred six) Rentable Square Feet and shall have two
(2) floors.
(d) Commencement Date: The date the Term of this Lease commences as determined in accordance with provisions of Section 30.
(e) Default Rate: An annual rate of interest equal to fifteen percent (15%).
(f) Lease Year:
(i) For the First Lease Year, the period beginning on the Commencement Date and ending on the last day of the same calendar month in which the Commencement Date occurred in the next calendar year; and
(ii) For Lease Years after the First Lease Year, the twelve-month period beginning on the next day following the expiration of the preceding Lease Year.
(g) Operating Cost: As defined in Section 6(b).
(h) Parking Lot: The on-grade parking lot to be constructed by
Landlord upon the Premises pursuant to Section 10 of this Lease and as shown on Exhibit B attached hereto, containing not less than 150 parking spaces for use by passenger motor vehicles.
(i) Premises: That certain parcel of real property described as: Lot 2E, Block 3, REPLAT E, BOULDER TECH CENTER, County of Boulder, State of Colorado, as shown on the recorded plat attached hereto as Exhibit A and incorporated herein (such plat has been recorded on Planfile P-39, F-1, #23) together with the Building, the Parking Lot and all other improvements from time to time hereafter located on such parcel of real property and any and all appurtenant rights relating thereto.
(j) Term: The period beginning at noon on the Commencement Date and ending
at 11:59 p.m. on the last day of the calendar month in which the fifteenth
(15th) anniversary of the Commencement Date occurs.
(k) Rentable Area or Rentable Square Feet: The sum of the area of each story of the Building expressed in square feet measured from the outside of the exterior walls.
Section 2. LEASE OF PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises. The Premises are leased on the terms and conditions set forth in this Lease.
Section 3. TERM
The term of this Lease shall be as set forth in Section 1(j), unless sooner terminated or extended pursuant to the terms of this Lease.
Section 4. RENT
(a) Tenant shall pay Landlord during each Lease Year the Base Rent, in equal monthly installments in the amount of one-twelfth of the Base Rent on the Commencement Date and on the first day of each succeeding calendar month during the Term of this Lease; provided that the rent payable on the Commencement Date shall be prorated for the remaining days left in the calendar month in which the Commencement Date occurs. Except as expressly set forth in this Lease to the contrary, all payments of Base Rent shall be paid in advance, without notice, set-off or deduction, in lawful money of the United States, at the address of Landlord set forth in Section 40 of this Lease, or at such other place as Landlord may from time to time designate in writing.
The amount of the Base Rent for each year after the first Lease Year shall be increased. The Base Rent shall increase at such times by an amount determined by multiplying the amount of the Base Rent in effect for the preceding Lease Year by an escalation factor which factor shall be calculated in the following manner.
(i) For the Lease Years two through 5 of the term of the Lease the escalation factor shall be two percent (2%) annually.
(ii) For the 6th through the 10th years of the Lease the escalation factor for each Lease Year shall be calculated in the following manner: 1) Calculate the average annual change in Lease Years 3, 4 and 5 of the All Items Revised Consumer Price Index for All Urban Consumers, CPI-U, Denver
(1982-84 equals 100), as determined by the United States Department of Labor, Bureau of Labor Statistics ("CPI"). 2) Add the annual increase used for the initial five Lease Years (two percent (2%)) to the average increase calculated in 1) above, but if the average increase calculated in (1) above is higher than 10%, use 10% as the calculation of (1) above; 3) Divide the sum by two. This result will be the escalation factor for Lease Years 6 through 10. By way of example, if the average annual CPI increase during Lease Years 3, 4 and 5 was 1%, you would add 2% to 1% for a sum of 3%, then divide that sum by two, for an annual increase in the rental rate for Lease Years 6 through 10 of 1 1/2 % per year.
(iii) For the 11th through the 15th Lease Years of the Lease the escalation factor for each Lease Year shall be calculated in the following manner: 1) Calculate the average annual change in Lease Years 8, 9 and 10 of the All Items Revised Consumer Price Index for All Urban Consumers, CPI-U, Denver (1982-84 equals 100), as determined by the United States Department of Labor, Bureau of Labor Statistics. 2) Add the annual increase used for the Lease Years 6 through 10 to the average increase calculated in 1) above, but if the average increase calculated in (1) above is higher than 10%, use 10% as the calculation of (1) above; 3) Divide the sum by two. This result will be the escalation factor for Lease Years 11 through 15. By way of example, if the average annual CPI increase in Lease Years 8, 9 and 10 was 20% and using the previous example's result where the annual increase for Lease Years 6-10 was 1 1/2%, you would add 1 1/2% to 10% for a sum of 11 1/2%, then divide that sum by two, for an annual increase in the rental rate for Lease Years 11-15 of 5 3/4%.
In no event shall the Base Rent for any Lease Year ever decrease below any previous Lease Year's Base Rent.
(b) If the index specified in Section 4(a) above is discontinued in its current form, or if the basis on which it was calculated should be revised, an appropriate conversion of the revised index to a common base will be made upon conversion factors published by the Bureau of Labor Statistics or upon conversion factors otherwise made available.
(c) For Lease Years 6 through 15, in the event that Tenant has not been notified of the escalation factor and the resulting adjustment in Base Rent by the first day of a Lease Year, the first monthly rental payment of Base Rent which includes new increased rent shall also include the new increased rent, if any, for each month in the then current Lease Year which elapsed prior to Tenant's receipt of Landlord's notice. The Base Rent due hereunder shall be apportioned for any fractional calendar months at the beginning and end of the Term of this Lease and any renewals and extensions thereof.
(d) In addition to the Base Rent (as increased each Lease Year), Tenant shall pay Landlord in monthly installments simultaneously with payments of the Base Rent, one-twelfth (1/12th) of the Estimated Operating Cost (or new estimate of Operating Cost) determined as set forth in Section 6, and such other charges as are required by the terms of this Lease to be made by Tenant, including, but not limited to, 100% of the Operating Cost adjustment. Any such adjustment or charge shall be deemed to be additional rent and shall be payable in the manner provided for the payment of Base Rent and shall be recoverable as Base Rent, and Landlord shall have all rights against Tenant for default in payment thereof as in the case of arrears of Base Rent.
(e) In the event the Building as constructed by Landlord is not substantially in accordance with the plans and specifications provided in
Exhibit B and as a result the Rentable Area of the Building is less than 60,906 Rentable Square Feet, Tenant shall have the right within thirty (30) days following the Commencement Date to cause the Rentable Area of the Building to be measured by the Architect (as defined in Section 10), at Landlord's expense, and the Base Rent hereunder shall be reduced on a pro rata basis by the same percentage amount by which the Rentable Area is less than 60,906 square feet. Promptly after such measurement, Landlord and Tenant shall enter into an amendment to this Lease documenting the Base Rent to be paid hereunder.
Section 5. USE
(a) Tenant shall use and occupy the Premises for manufacturing, warehousing, offices and other uses incidental thereto and for no other purpose without Landlord's consent, which shall not be unreasonably withheld, delayed or conditioned and shall be deemed to be given if Landlord has not responded within ten (10) days of Tenant's request for such consent. Tenant shall use the Premises in a careful, safe and proper manner and shall not use or permit the Premises to be used for any purpose prohibited by the certificate of occupancy issued for the Premises or the laws of the United States or the State of Colorado, or the ordinances of the County of Boulder. Neither Tenant nor Landlord shall do or permit to be done any act or thing upon the Premises which shall or might subject the other to any liability or responsibility for injury to any person or persons or to property by reason of any business or operation carried on upon the Premises or for any reason.
(b) In the event that any official shall hereafter at any time contend or declare by notice, violation, order or in any other manner whatsoever that the Premises are used for a purpose which is a violation of any permit, certificate of occupancy, statute, ordinance or other requirement of law applicable to the Premises, Tenant shall, upon ten (10) days' written notice from Landlord, immediately discontinue such use of the Premises.
(c) Tenant, at its sole expense, shall comply with all laws, orders and
regulations of federal, state, county and municipal authorities, and with any
direction of any public officer or officers, pursuant to law, which shall
declare any violation or impose any order or duty upon Landlord or Tenant with
respect to the Premises, or the use or occupation thereof. Notwithstanding the
foregoing, Tenant shall not be obligated to comply with any such laws, orders,
or regulations, including but not limited to the Americans With Disabilities
Act, which (a) relate to the design or construction of the Premises, (b) relate
to the structural portions of the Premises, or (c) may require structural
alterations, structural changes, structural repairs or structural additions, all
of which shall be the obligation of Landlord at its sole cost and expense;
provided, however, if such laws, orders or regulations relate to the specific
type or nature of the business being conducted or to be conducted by Tenant upon
the Premises or to the specific accommodations made or to be made for certain of
Tenant's employees as opposed to being related to industrial or office
buildings, generally, Tenant shall nevertheless be required to comply with them.
Without limiting the generality of the foregoing, but subject to the proviso in
the preceding sentence, Landlord, at it sole cost and expense, shall be
responsible for complying with the applicable provisions of the Americans With
Disabilities Act and the regulations and Accessibility Guidelines for Buildings
and Facilities issued pursuant thereto, as same may be amended (collectively,
the "ADA"), relating to (i) the design and construction of the Premises and the
work within the Premises to be performed by Landlord pursuant to this Lease, and
(ii) the structural portions of the Premises (collectively, "Landlord's Work").
Section 6. OPERATING COST ADJUSTMENT
(a) If in any calendar year the Operating Cost is greater than the
Estimated Operating Cost, Tenant shall pay to Landlord as additional rent an
amount equal to such excess. Any amount payable by Tenant to Landlord under this
Section 6 shall be paid within thirty (30) days after written notice thereof by
Landlord, such notice to be given by Landlord not later than March 31 of each
calendar year. Landlord may, either prior to the beginning of or during any
calendar year, compute a bona fide estimate of Operating Cost for such calendar
year. Upon receipt of written notice thereof, Tenant shall pay to Landlord, in
monthly installments simultaneously with payments of Base Rent under Section
4(a), one-twelfth of such new estimate of Operating Cost. An annual adjustment
shall be made between the parties within thirty (30) days after Landlord's
determination of Operating Cost. Any amounts of excess estimated Operating Cost
which Landlord is required to return may be offset by accrued amounts payable by
Tenant to Landlord. If the term of this Lease ends before the end of a calendar
year, any amount payable by Tenant or Landlord in respect of that year under
this Section 6 shall be adjusted proportionately on a daily basis utilizing the
previous year's determination of Operating Costs and the obligation to pay such
amount shall survive the expiration or earlier termination of this Lease.
(b) As used in this Lease, "Operating Cost" means an amount per calendar year (projected to an annual figure for the calendar year in which the Premises is first occupied) which represents the actual Operating Cost for any calendar year during the Term of this Lease. The Operating Cost shall be determined by Landlord and shall be equal to the sum of the items of cost listed in Section 6(b)(i) and Section 6(b)(ii) but not the items listed in Section 6(b)(iii) in respect of a calendar year:
(i) All general and special real estate taxes, special assessments, assessments for improvements, special district or improvement district assessments, water charges, sewer charges, vault charges and other ad valorem taxes, rates, levies and assessments payable in respect of the Term upon or in respect of the Premises imposed by any governmental or quasi-governmental authority and all taxes specifically imposed in lieu of any such taxes, but excluding any inheritance, estate, succession, transfer, gift, franchise, corporation, income, rental or profit tax or capital levy imposed on Landlord ("Taxes"). If due to a future change in the method of taxation, any franchise, income, profit or other tax shall be levied against Landlord in whole or in part in lieu of any tax which would otherwise constitute one of the foregoing taxes or charges or if there shall be levied against Landlord a tax or license fee measured by gross rents, such franchise, income, profit or other tax or license fee shall be deemed to be a real estate tax for the purposes hereof. The taxes described in this Section 6(b)(i) shall also include all of Landlord's expenses, including, but not limited to, attorney's fees, incurred by Landlord in any effort to minimize such taxes, whether by contesting proposed increases in assessments or by any other means or procedures appropriate in the circumstances; provided that Landlord and Tenant shall agree to the procedures to be taken prior to Landlord taking such procedures. If Landlord secures an abatement or refund of any Taxes, Landlord shall pass such abatement through to the Tenant as a credit to be applied against rent next becoming due, or if no further rent is due by Tenant, by cash payment from Landlord to Tenant.
(ii) Except as otherwise set forth in this Lease, all costs, charges and expenses (not directly reimbursed by insurance proceeds) which are attributable to the ownership, operation, maintenance and repair of the Premises, including, but not limited to, reasonable management fees that fall
within industry standards for the Boulder area, building supplies, window cleaning services, normal maintenance and repair of the Premises, including but not limited to, heating and air conditioning systems, electrical and plumbing systems, elevator system, landscaping, snow removal, Parking Lot repair and maintenance, insurance (including boiler and machinery, loss of rent, accidental and direct physical loss, all risk, public liability and other insurance as provided in Section 20) and labor costs incurred in the operation or maintenance of the Premises. Except as provided in Section 6(a)(iii), and except for repairs and replacements for which Landlord is reimbursed from insurance proceeds, all repairs and replacements shall either be made by Tenant directly or shall be made by Landlord at Tenant's expense as an Operating Cost.
Operating Costs shall be based upon competitive charges for similar services and materials that are available in the general vicinity of the Premises. Operating Costs shall be reduced by the proceeds of insurance or eminent domain awards of settlement received by Landlord with respect to items of Operating Cost (or the amount of any proceeds or awards which would have been received if Landlord had carried the insurance required by this Lease or diligently pursued its rights, as the case may be) or recoveries from warranty claims. Landlord shall not be permitted to recover more than the actual out-of-pocket cost incurred by Landlord on a non-profit basis for the Operating Cost. The Operating Cost shall be determined on a "cash basis" and costs which may be paid in installments without finance charges shall be paid in installments. Promptly upon receipt thereof, Landlord shall pay Tenant any refund or recovery made with respect to any Operating Cost previously paid by Tenant.
(iii) The following expenses and costs shall not be included within the "Operating Costs" for the Premises: Costs incurred in connection with the original construction of the Premises or in connection with any major change in the Premises; depreciation, interest and principal payments on mortgages and other debt costs, if any; costs of correcting patent and/or latent defects in, or design errors relating to the design, or construction of the Building located on the Premises; costs for which the Landlord is reimbursed by insurance proceeds; costs associated with the operation of the business of the Landlord as a separate entity, as the same are distinguished from the cost of operating the Premises; the wages and benefits of any executive or other employee at or above the level of building manager, or any employee who does not devote substantially all of his or her employee time to the Premises unless such wages and benefits are prorated to reflect time spent on operating and managing the Premises; fines, penalties and interests; tax penalties incurred as a result of the Landlord's negligence, inability, or unwillingness to make payments when due; any expense resulting from the negligence of, or any violation of law by, Landlord or its agents, contractors, employees or invitees; and Landlord's general overhead and general administrative expenses. Except where the need for repair or replacement results from the negligence of Tenant or its agents, employees or invitees, or as a result of the operations of Tenant's business, Landlord shall, upon reasonable notice from Tenant and at its expense and without reimbursement by Tenant (other than from insurance proceeds from insurance provided by Tenant), perform all replacement of, and structural repairs to the structural portions of the Premises as are necessary to keep the same in first class order, condition and repair, reasonable wear and tear excepted. For purposes of this Lease, "structural portions" of the Premises shall mean the foundation, supporting members of the roof, floor slabs, exterior walls, structural girders and columns, load-bearing walls and columns. (It is acknowledged that movement of floor slabs is normal and not generally repaired in first class industrial buildings, unless the movement is excessive.)
(c) Tenant shall have the right to inspect all documents reflecting any
part of the Operating Costs and the calculations of any amount payable under
Section 6(a) of this Lease, and Landlord shall provide written receipts and
accounting records supporting its itemized statements and calculations of
Operating Costs and the amounts due under Section 6(a) once each year upon
request by Tenant. If Tenant wishes to dispute the determination of Operating
Costs under Section 6(a) or the calculation of any amount payable under Section
6(a), Tenant shall give Landlord written notice of such dispute within ninety
(90) days after receipt of notice from Landlord of the matter giving rise to the
dispute. If Tenant does not provide Landlord such notice within such time,
Tenant shall have waived its right to dispute such determination or calculation.
Promptly after the giving of such written notice, Tenant shall cause to be made
a complete audit of Landlord's records relating to the matter in dispute by a
nationally recognized firm of independent certified public accountants mutually
agreed upon by Landlord and Tenant. The cost of such audit shall be borne by
Tenant unless such audit discloses an error which overstated Operating Cost by
more than two percent (2%) of the amount determined by the audit, in which event
Landlord shall bear the cost of such audit. If such audit reveals that the
amount previously determined by Landlord was incorrect, a correction shall be
made and either Landlord shall promptly return to Tenant any overpayment or
Tenant shall promptly pay to Landlord any underpayment which was based on such
incorrect amount. Notwithstanding the pendency of any dispute hereunder, Tenant
shall make payments based upon Landlord's determination or calculation until
such determination or calculation has been established hereunder to be
incorrect.
Section 7. UTILITIES & CLEANING.
Tenant shall directly contract for and pay for all utilities serving the Premises, including, but not limited to, gas, steam, water, fuel oil, electricity, sewer charges, telephone and communications systems and the like; and Landlord shall not be responsible for or involved in the payment of or the contracting for any said utilities. Likewise, Tenant shall directly contract for and pay for janitorial services and interior window cleaning and Landlord shall not be responsible for or involved in the payment of or contracting for any of said services.
Section 8. TAXES
Tenant shall pay before delinquency any and all taxes, assessments, license taxes and other charges levied, assessed or imposed and which become payable during the Term of this Lease upon Tenant's operations at, occupancy of, or conduct of business at the Premises or upon equipment, furniture, appliances, trade fixtures and other personal property of any kind installed or located at the Premises; provided, however, Tenant may pay such amounts after delinquency to the extent that such delay is necessary to Tenant's good faith and diligent contest of such amounts, but only so long as there is no risk of Tenant having any of its assets or Landlord's assets foreclosed upon or seized by the taxing authority.
Section 9. QUIET ENJOYMENT
Landlord covenants and agrees with Tenant that upon Tenant paying the Base Rent and additional rent hereunder and observing and performing all the terms, covenants and conditions of this Lease on Tenant's part to be observed and performed, Tenant may peaceably and quietly enjoy the Premises subject,
nevertheless, to the terms and conditions of this Lease and the matters shown as items 8-20 on Schedule B to the Landlord's title policy, a copy of which is attached hereto as Exhibit D.
Section 10. PREPARATION OF PREMISES
(a) Landlord shall Substantially Complete (as defined in Section 30) the work in the Premises required to be done by Landlord as specified in Exhibit B attached hereto ("Landlord's Work"). All Landlord's Work shall be performed in a good and workmanlike manner with new, first quality materials in compliance with all laws, codes and all regulations. Landlord will obtain a fifteen (15) year warranty on the roof naming the Landlord and Tenant on all related warranties. Landlord represents that the Premises will be in compliance with the ADA. If Landlord's Work is not performed as herein required, or if such work or the Premises in not in compliance with all laws, codes or other regulations, Landlord shall perform the necessary remedial work at its sole cost and expense. Landlord and Tenant agree that Wyatt Construction Company shall be the general contractor (the "Contractor") and RVP Architecture shall be the architect (the "Architect") used by the parties for the purposes of performing Landlord's Work subject to change in the event of failure or inability to perform. Landlord shall exercise due diligence in pursuit of completing Landlord's Work. Landlord shall permit Tenant to have access to the Premises prior to the commencement of the Lease for purposes of inspecting Landlord's Work or with Contractor's consent, for performing work in the Premises. Landlord agrees to proceed with due diligence to complete any portion of Landlord's Work that shall not have been completed as of the date of Substantial Completion of the foregoing by not later than thirty (30) days after the date of Substantial Completion (excluding seasonal landscaping, which shall be completed promptly as soon as the season permits).
(b) Except for minor changes to comply with applicable law or to correct
any mistakes in the plans or specifications, no change orders from the plans and
specifications set forth on Exhibit B shall be permitted, unless duly authorized
representatives of both Tenant and Landlord shall agree to the change order in
writing. Each change order shall set forth the changes in the plans and
specifications and an estimate of the increase in the price to be charged by the
Contractor and any delay in the construction schedule. Thereafter, within thirty
(30) days after receipt of documentation showing the amount charged to Landlord
by the Contractor for the change order, Tenant shall reimburse Landlord for such
amount, unless such amount is more than 10% more than the estimate set forth in
the change order, in which event Tenant shall pay Landlord the amount of the
estimate plus 10% of the amount of the estimate.
(c) Landlord acknowledges that it is a material provision of this Lease
that Landlord deliver the Premises to Tenant by the date Landlord sets forth in
its Official Estimate (defined below) and in the condition provided herein. An
Initial Estimate date shall be provided by Landlord to Tenant within fifteen
(15) days after the appropriate building permit has been issued by the
government authorities. In no case shall the Initial Estimate date be later than
the Substantially Complete date set forth in Section 30 herein. In recognition
thereof, Landlord agrees to provide Tenant with preliminary written statements
signed by both Landlord and the Contractor on the first day of each month, from
and after the commencement of construction until the Commencement Date of the
Lease, detailing the status of Landlord's Work compared to the Initial Estimate
date and/or the Official Estimate date and the estimated date of substantial
completion of Landlord's Work. Landlord's preliminary estimates may change the
Initial Estimate date of substantial completion of Landlord's work (reference
Section 30); provided that once Landlord's estimate of such date falls within ninety (90) days of the date of the Substantial Completion date, it shall be referred to as the "Official Estimate". In the event that the Commencement Date occurs on or after that date which is fifteen (15) days plus any days of delay caused by change orders or Tenant's work on the Premises after the Commencement Date set forth in the Official Estimate, Tenant shall be entitled to a rent reduction equal to $750.00 times the number of days after the fifteenth day plus any days of delay caused by change orders or Tenant's work on the Premises after the Commencement Date set forth in the Official Estimate, but before the actual Commencement Date.
Section 11. ACCEPTANCE OF PREMISES
Taking possession of the Premises by Tenant shall be conclusive evidence as against Tenant that the Premises were in good and satisfactory condition when Possession was taken subject to correction (by Landlord at its expense) of punch list or other defective items disclosed to Landlord prior to taking of possession of the Premises by Tenant, defects not reasonably discoverable prior to taking possession and disclosed to Landlord within a reasonable period of time after discovery of same by Tenant, but no later ninety (90) days after taking possession of the Premises, and latent defects disclosed to Landlord within a reasonable time after discovery of same by Tenant.
Section 12. ACCESS TO PREMISES
Landlord and Tenant acknowledge that Tenant shall be performing confidential work within the Premises, which confidential work shall not be accessible to Landlord. Accordingly, Landlord agrees that it will cooperate with Tenant so as to preserve the confidentiality of Tenant's work (and such cooperation shall include, but not be limited to, if requested by Tenant, the execution of confidentiality agreements by Landlord and its agents, assigns, employees and contractors, and other reasonable measures to preserve Tenant's confidentiality). Unless Tenant shall consent to a shorter time, Landlord will provide at least twenty-four (24) hours advance notice to Tenant prior to entering the Building, will schedule with Tenant the time and place of all entry by Landlord or its agents, assigns, employees or contractors, and will only enter upon the Building with a duly-authorized representative of Tenant, except in the event of an emergency. Landlord agrees to use its best efforts not to interfere unreasonably with the Tenant or the Tenant's business in the course of exercising its rights under this paragraph.
Section 13. ALTERATIONS BY TENANT
(a) Other than interior, non-structural alterations, for which Landlord's consent is not required, Tenant shall make no alterations, decorations, installations, additions or improvements in or to the Premises without first obtaining the written consent of Landlord. Tenant understands that Landlord's consent will be conditioned on Tenant's compliance with Landlord's requirements as in effect at the time permission is requested, which requirements will include, but not be limited to Landlord's approval of plans, specifications, contractors, insurance, and hours of construction. Prior to the commencement of any work in or to the Premises by Tenant's contractor, Tenant shall comply with all applicable laws (for example, by obtaining a building permit if required), and Tenant shall on request deliver to Landlord certificates issued by applicable insurance companies evidencing that workmen's compensation and public liability insurance and property damage insurance, all in amounts and with companies, and on forms reasonably satisfactory to Landlord,
are in force and effect and maintained by all contractors and subcontractors engaged by Tenant to perform such work. Each such certificate shall provide that it may not be cancelled without ten days' prior written notice to Landlord.
(b) All articles of personal property, and all movable business and trade fixtures, machinery and equipment, cabinetwork, furniture and movable partitions owned or installed by Tenant at its sole expense (and with respect to which no credit or allowance was granted to Tenant by Landlord) in the Premises shall remain the property of Tenant and may be removed by Tenant at any time, provided that Tenant, at its expense, shall repair any damage to the Premises caused by such removal. All alterations, decorations, installations, additions or improvements in or to the Premises other than those specified in the first sentence of this Section 13(b) shall, upon the completion thereof, become the property of Landlord and shall be surrendered to Landlord upon the expiration or other termination of the Term of this Lease. Landlord may elect to require Tenant to remove all or any part of the property described in the first sentence of this Section 13(b) at the expiration or other termination of the Term of this Lease, in which event such removal shall be done at Tenant's expense, and Tenant shall, at its expense, repair any damage to the Premises caused by such removal.
(c) Tenant shall be solely responsible for the consequences of Tenant's repairs and alterations on the Premises' structure and on the operation of its systems, such as heating, air conditioning, ventilating, electrical and plumbing, whether or not Tenant had received Landlord's consent to such repairs or alterations pursuant to this Section 13.
Section 14. MAINTENANCE AND REPAIRS
(a) Except for the maintenance, repairs and replacements Landlord is required to make pursuant to Section 13(b) of this Lease, and except for items expressly excluded from Operating Costs under Section 6(b)(iii), Tenant shall take good care of the Premises and the fixtures and improvements therein, and, at its sole cost and expense, make repairs, restorations or replacements as and when needed to keep the Premises in first class order, condition, and repair, reasonable wear and tear excepted. If Tenant fails, after notice to Tenant and the lapse of applicable grace periods in accordance with Section 31(b) of this Lease, to make any repairs, restorations or replacements required by this Lease, Landlord may (but without any obligation to do so) make such repairs, restorations, or replacements at the reasonable expense of Tenant and such expense shall be due within thirty (30) days of receipt by Tenant of written notice by Landlord, as additional rent. Tenant shall comply with all provisions of Section 13 and Section 15 of this Lease in connection with such repairs, restorations and replacements.
(b) Subject to Section 14(c), (d) and (e) hereof, and subject to Tenant's reimbursement of Landlord as provided in Section 6(b) hereunder, Landlord shall act as property manager for the Premises and, in such capacity, shall be responsible for the operation, maintenance and repair of the Premises, including but not limited to: Building maintenance, exterior window cleaning, normal maintenance and repair of the Premises (including heating and air conditioning systems, electrical and plumbing systems, landscaping, roof, roof membrane, elevator system, utility systems, Parking Lot, and snow removal) and security outside of the Building. In addition, Landlord shall make the structural repairs and replacements to the structural portion of the Premises that Landlord is required to make, at Landlord's cost and expense, without reimbursement from Tenant, pursuant to Section 6(b)(iii) of this Lease.
(c) Landlord agrees not to assign its responsibilities as property manager of the Premises to any other person or entity without first providing written notice to Tenant and obtaining Tenant's written consent to such assignment.
(d) Landlord agrees, by not later than 45 days prior to the Commencement Date, to provide Tenant's Facilities Manager with a detailed property management plan for the Premises, including proposed staffing levels and standards of management and maintenance of the Premises. Tenant shall respond with its comments or approval of such plan within thirty (30) days of receipt of the management plan and to any revised submittal within ten (10) days of its receipt of the same. Landlord and Tenant shall discuss who Landlord shall hire or contract with as major service providers for the Premises. Landlord shall have yearly inspections of the roof as required by the terms of the roof warranty and Landlord and Tenant shall cooperate in the enforcement of the roof warranty. Landlord shall advise Tenant in advance of any repair or maintenance cost believed to be in excess of $10,000. In the event Landlord or Tenant shall disagree about such plans, the need for such maintenance or repairs, or whom to hire as service providers, then Landlord and Tenant shall agree to a third party property manager, which third party property manager shall informally arbitrate such disputes.
(e) Except as provided elsewhere in this Lease to the contrary, there shall be no allowance to Tenant for a diminution of rental value and no liability on the part of Landlord, by reason of inconvenience, annoyance or injury to, or interruption of business, arising from Landlord, Tenant or others making any repairs, restorations, replacements, alterations, additions or improvements in or to any portion of the Premises, or in or to fixtures, appurtenances or equipment thereof; provided that such repairs, restorations, etc. do not prevent Tenant from operating in the Premises as anticipated hereunder for more than twenty-four hours. In such case, Rent hereunder shall be abated in proportion to the untenantable space in the Premises. Notwithstanding the provisions of Section 12, Section 14 or Section 21 or any other provision of this Lease to the contrary, in exercising its rights pursuant to this Lease, Landlord shall not unreasonably interfere with the access to the Premises or Tenant's business operations therein.
Section 15. MECHANIC'S LIENS
(a) Tenant shall, at Tenant's option, pay or cause to be paid or provide bond for all costs for work done by it or caused to be done by it on the Premises of a character which will or may result in liens on Landlord's interest therein and Tenant will keep the Premises free and clear of all mechanic's liens, and other liens on account of work done for Tenant or persons claiming under it. Tenant shall indemnify and hold Landlord harmless against any liability, loss, damage, costs or expenses, including reasonable attorney's fees, on account of any claims of any nature whatsoever, including claims of liens of laborers or materialmen or others for work performed for, or materials or supplies furnished to Tenant or persons claiming under Tenant.
(b) Should any liens be filed or recorded against the Premises or any action affecting the title thereto be commenced due to Tenant's contracts with third parties, Tenant shall give Landlord written notice thereof. Tenant shall thereafter cause such liens to be removed of record within ten days after the filing of the liens. If a final judgment establishing the validity or existence of a lien for any amount is entered, Tenant shall pay and satisfy the same at once. If Tenant shall be in default in paying any charge for which a mechanic's
lien or suit to foreclose the lien has been recorded or filed, Landlord may (but without being required to do so) pay such lien or judgment and any costs, and the amount so paid, together with reasonable attorney's fees incurred in connection therewith, shall be immediately due from Tenant to Landlord with interest at the Default Rate from the dates of Landlord's payments. Landlord shall be responsible for the payment for all work (including Landlord's Work), and the removal of all liens of record relating to work of Landlord occurring prior to the Commencement Date, or, thereafter, work performed by Landlord or its contractors.
(c) At least five days prior to the commencement of any work permitted to be done by persons requested by Tenant on the Premises in excess of $10,000.00, Tenant shall notify Landlord of the proposed work and the names and addresses of the persons supplying labor and materials for the proposed work so that Landlord may avail itself of the provisions of statutes such as Section 38-22-105(2) of Colorado Revised Statutes (1973, as amended). During any such work on the Premises, Landlord and its representatives shall have the right to go upon and inspect the Premises at all reasonable times, and shall have the right to post and keep posted thereon notices such as those provided for by Section 38-22-105(2).
Section 16. CASUALTY
(a) If the Building or the Parking Lot or means of access or ingress to the Premises shall be so damaged by fire or other casualty as to render the Premises untenantable, and if such damage shall be so great that an architect selected by Landlord and agreed to by Tenant shall certify in writing to Landlord and Tenant that the Premises with the exercise of reasonable diligence, but without the payment of overtime or other premiums cannot be made tenantable within 90 days from the happening of the fire or other casualty, or if the damage shall be such that Landlord's architect shall certify that the Premises can be made tenantable within the 90-day period from the happening of the fire or other casualty, but insurance proceeds are not made available to Landlord for repair of such damage, then Landlord or Tenant may terminate this Lease. If neither Landlord nor Tenant terminates this Lease as set forth above, then, except as hereinafter provided, Landlord shall with reasonable promptness, repair the damage so done except that Landlord shall not be required to repair, replace or restore any personal property of Tenant specified in the first sentence of Section 13(b). Until such repair is substantially completed, the Base Rent shall be abated in proportion to the part of the Premises which is unusable by Tenant in the reasonable conduct of its business or profession. There shall be no abatement of Base Rent by reason of any portion of the Premises being unusable for a period of one day or less, unless covered by Landlord's loss of rent insurance. If the damage is due to the fault or negligence of Tenant or Tenant's employees, agents or invitees, there shall be no abatement of Base Rent, unless covered by Landlord's loss of rent insurance.
(b) If the Premises shall be damaged by fire or other casualty, but not so as to render the entire Building untenantable, Landlord shall cause the damage to be repaired with reasonable promptness and, if not repaired sufficiently that the entire Premises is tenantable within one day, there shall be an abatement of Base Rent and all other amounts due under this Lease in proportion to the Rentable Square Footage of the Premises rendered untenantable. If the fire or other casualty causing damage to the Premises shall have been caused by the negligence of Tenant, or Tenant's employees, agents or invitees, such damage shall be repaired by Landlord and the amount paid for such repair shall be due from Tenant to Landlord with interest at the Default Rate from the
dates of Landlord's payments, unless Landlord is paid for such loss by insurance.
Section 17. EMINENT DOMAIN
(a) If any portion of the Premises shall be taken by right of eminent domain or shall be conveyed in lieu of any such taking, which shall render the Premises untenantable, then this Lease, at the option of either Landlord or Tenant exercised by either party giving written notice to the other of such termination within thirty (30) days after such taking or conveyance, shall forthwith cease and terminate and the Base Rent and all other sums payable hereunder shall be duly apportioned as of the date of such taking or conveyance. Tenant thereupon shall surrender to Landlord the Premises and all interest therein under this Lease, and Landlord may re-enter and take possession of the Premises and remove Tenant therefrom. If neither party exercises the option to terminate this Lease, Landlord shall make an equitable adjustment of the Base Rent payable by Tenant for the tenantable portion of the Premises.
(b) In the event of any taking or conveyance described above, Landlord shall receive the entire award or consideration for the lands and improvements so taken and Tenant hereby waives all claims against Landlord and assigns to Landlord all claims against the condemnor for or on account of or incident to such taking or conveyance, except that Tenant may separately claim and recover from the condemnor, the value of any personal property of Tenant which Tenant was entitled to remove pursuant to this Lease, as well as compensation for loss of leasehold estate, and leasehold improvements done and paid for by Tenant without contribution from Landlord, relocation expenses and lost profits.
Section 18. INJURY TO PERSON OR PROPERTY
(a) Subject to Section 19(a), Landlord hereby agrees to indemnify, defend and hold harmless Tenant from and against any and all demands, claims, causes of action, liabilities or judgments and any and all expenses (including, without limitation, reasonable attorney fees) incurred by Tenant, arising from (i) the neglect or fault of Landlord, its employees, contractors or agents; or (ii) Landlord's breach of its obligations under this Lease.
(b) Tenant shall neither hold nor attempt to hold Landlord or Landlord's employees or agents liable for, and subject to Section 19(a), Tenant shall hold harmless and indemnify Landlord and Landlord's employees or agents from and against, any and all demands, claims, causes of action, liabilities, or judgments, and any and all expenses (including, without limitation, reasonable attorney's fees) incurred by Landlord in investigating and resisting the same, arising from any of the following:
(i) Any injury or damage to the person or property of Tenant or to any other person rightfully on the Premises for any purpose whatsoever, to the extent the injury or damage is caused by the neglect or fault of Tenant or Tenant's employees, agents or invitees, or to the extent such injuries are the result of the violation of laws or ordinances, governmental orders of any kind, or of the provisions of this Lease including the rules and regulations provided for in Section 27 of this Lease, by any of such persons;
(ii) Any injury or damage of any nature suffered by Tenant or Tenant's employees, agents or invitees to the extent the injury or damage is caused by the loss or destruction by any person of furniture, inventory, valuables, files or any other property kept or stored on the Premises; and
(iii) Any injury or damage not specified above to the person or property of Tenant, or Tenant's employees, agents or invitees, to the extent the injury or damage is caused by any reason other than the fault or negligence of Landlord or Landlord's employees or agents, or breach of this Lease by Landlord, including, but not limited to any injury or damage resulting from fire, explosion, falling plaster or glass, steam, gas, electricity, water, rain or snow or leaks from any part of the Building, or from the pipes, appliances or plumbing works or from the roof, street, subsurface or from any other place or by dampness.
Section 19. TENANT'S INSURANCE
(a) At all times during the Term of this Lease, Tenant shall, at its own expense, maintain (i) public liability insurance for claims for personal injury or death and property damage with limits of not less than $1,000,000 combined single limit of liability plus umbrella coverage of not less than $5,000,000; and (ii) fire and extended coverage insurance on all property described in the first sentence of Section 13(b) to the extent of at least 90 percent of their insurable value. All such policies described in subsection (a)(i) only shall name Landlord as an additional insured and shall be with insurance companies and on forms reasonably satisfactory to Landlord. Tenant shall, prior to Tenant's occupancy of the Premises and thereafter at Landlord's request, furnish Landlord with certificates of all insurance to be maintained by Tenant and with evidence of payment of the premiums thereon. All such policies shall contain a clause or endorsement to the effect that they may not be terminated or amended during the Term of this Lease except after thirty days' written notice thereof to Landlord. All insurance policies maintained by or on behalf of Landlord and Tenant with respect to the Premises shall include a waiver of subrogation against Landlord and Tenant on the part of the respective insurance carriers and each of the parties hereby releases the other, to the extent of the releasing party's insurance coverage, from any and all liability for any loss or damage covered by such insurance which may be inflicted upon the property of such party even if such loss or damage shall be brought about by the fault or negligence of the other party, its agents or employees; provided, however, that this release shall be effective only with respect to loss or damage occurring during such time as the appropriate policy of insurance shall contain a clause to the effect or otherwise provide that this release shall not affect said policy or the right of the insured to recover thereunder.
(b) Tenant shall not use or suffer or permit any other firm or person to use the Premises for any hazardous purpose or in any manner that will violate, suspend, void, make inoperative or increase the rate of any policies of insurance of any kind at any time carried by Landlord upon the Premises and the Building, fixtures and property therein. Tenant at Tenant's sole expense shall comply with all rules, orders, regulations or requirements of the board of fire underwriters, or any other similar body, having jurisdiction over the Premises. Any increase in the cost of any insurance carried by Landlord attributable to Tenant's activities on the Premises or Tenant's failure to perform and observe Tenant's obligations and covenants hereunder shall be borne by Tenant and payable to Landlord, from time to time, on demand.
Section 20. LANDLORD'S INSURANCE
At all times during the Term of this Lease, Landlord shall maintain public liability insurance for claims for personal liability or death and property damage with limits of not less than $5,000,000. Landlord, with respect to all structures and improvements on the Premises, including leasehold improvements, shall, during the Term of this Lease, carry full and adequate insurance under a so-called all-risk policy, which shall include but not be limited to coverage for boiler and machinery, accidental and direct physical loss. Landlord's insurance shall also include rental value insurance for the protection of Landlord, which insurance shall provide for payment of net rental and other charges due hereunder for a minimum period of one (1) year following a casualty, such policy providing that payments will be made to Landlord regardless of whether this Lease is terminated as a result of such casualty.
During the period Landlord is performing Landlord's Work (and for any additional period prior to delivery of the Premises to Tenant), Landlord shall maintain, or cause its Contractor to maintain, property insurance under an all risk form or builder's risk coverage in amounts and in a form acceptable to Tenant. Landlord shall also require the Architect to carry errors and omissions coverage in an amount of not less than $1,000,000. Landlord's insurance policies shall be deposited with the Tenant and renewals thereof shall be deposited not less than ten (10) days prior to the expiration date of the then expiring policy. All such policies maintained by Landlord shall provide that the same shall not be amended or canceled without at least thirty (30) days' prior written notice to the Tenant.
Section 21. SERVICES PROVIDED BY LANDLORD
(a) Pursuant to Section 10 above, Landlord shall furnish or cause to be furnished on or before the Commencement Date the following services:
(i) Heating or air conditioning; provided that Tenant will be solely responsible to pay for the power to operate such heating and air conditioning on the Premises;
(ii) Domestic running water for the operation of lavatories, ordinary drinking fountains at all times (but paid for by Tenant);
(iii) 110-volt electric current for the office, warehouse and manufacturing portions of the Premises and 220-volt or 408-volt electric current for the manufacturing portion of the Premises, all as shown on Exhibit B; provided that Tenant will be solely responsible to pay the electric bill to operate such systems on the Premises; After the Commencement Date, the costs of maintaining the availability of such utilities shall be Operating Costs pursuant to Section 6(b)(ii).
(b) Tenant covenants and agrees that at all times its use of electric current shall never exceed the capacity of any wiring installation in or to the Premises.
(c) Landlord shall not be liable to Tenant or any other person, for direct or consequential damage, or otherwise, for breach of Section 21(a) above when Landlord uses reasonable diligence to supply such services. Landlord reserves the right temporarily to discontinue such services, or any of them, at such times as may be necessary by reason of accident, unavailability of employees, repairs, alterations or improvements, strikes, lockouts, riots, acts
of God, governmental preemption in connection with a national or local emergency, any rule, order or regulation of any governmental agency, conditions of supply and demand, Landlord's compliance with any mandatory governmental energy conservation or environmental protection program or any other happening beyond the control of Landlord. Landlord shall not be liable for damages to person or property or for injury to, or interruption of, business for any discontinuance permitted under this Section 21, nor shall such discontinuance in any way be construed as an eviction of Tenant or cause an abatement of rent or operate to release Tenant from any of Tenant's obligations hereunder, unless Landlord is negligent in its duties to maintain the heating and air conditioning system, the plumbing, and the electrical system.
Section 22. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not assign this Lease or any interest herein or sublet all or any part of the Premises, or suffer or permit the Premises or any part thereof to be occupied by others, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld. Any such attempted assignment, subletting, or occupancy without Landlord's prior written consent shall be void and shall confer no rights whatsoever on any party. Tenant will notify Landlord in writing of any interest in this Lease which Tenant wishes to assign or any portion of the Premises which Tenant wishes to sublet or permit others to occupy which notice shall specify the terms and conditions of such transaction and shall be accompanied by such information as Landlord may require with respect to the proposed assignee, sublessee or occupant. Upon receipt of such notice and information, Landlord shall have the right in its discretion, reasonably exercised, to either:
(i) Consent to such assignment, subletting or occupancy in which event one-half (1/2) of any rent or other consideration realized by Tenant under any such assignment, subletting or occupancy in excess of the Base Rent and other sums payable hereunder reasonably attributable to the space subject to the assignment, subletting or occupancy arrangement, after amortization of the reasonable costs incurred by Tenant for leasing commissions and leasehold improvements in connection with such assignment, subletting or occupancy over the term of such assignment, subletting or occupancy, shall be paid to Landlord by Tenant; or
(ii) Refuse to consent to such assignment, subletting or occupancy setting forth its reasons for such refusal in writing. If Landlord does not deliver written notice as to Landlord's election of one of the options referred to above within thirty (30) days after its receipt of the notice and information from Tenant, Landlord shall be deemed to have consented to the proposed assignment, subletting or occupancy. If this Lease or any interest herein is assigned, or if the Premises or any part thereof be sublet or occupied by anybody other than Tenant, with or without the consent of Landlord having first been obtained, Landlord may, after default by Tenant, collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the Base Rent and other sums due hereunder, but no collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupancy as the tenant hereof or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant contained in this Lease. The consent by Landlord to an assignment, subletting, or occupancy arrangement shall not relieve Tenant from primary liability hereunder or from the obligation to obtain the express consent in writing of Landlord to any further assignment, subletting, or occupancy arrangement.
(b) Notwithstanding anything contained in this Lease to the contrary and provided the assignee assumes this Lease, none of the following, nor any assignments or transfers of this Lease resulting from the following, shall require Landlord's prior written consent or the payment by Tenant of any fees or charges of any kind: (a) a transfer of stock or other ownership interests in Tenant; (b) the merger, consolidation or amalgamation of Tenant with a third party or the sale of all or substantially all of the stock or assets of Tenant; or (c) a transfer to a parent, subsidiary or "affiliate" of Tenant. An "affiliate" shall mean any trust, corporation, partnership or limited liability company (i) which owns or "controls" the majority of the ownership interest of Tenant, either directly or indirectly through other entities; (ii) the majority of whose ownership interests is owned or "controlled" by Tenant; or (iii) which owns or "controls" a majority of the ownership interests of Tenant. As used herein, the word "control" shall mean the right or power to direct or cause the direction of the management and policies of the entity in question.
Section 23. END OF TERM
Upon the expiration or other termination of the Term of this Lease, Tenant shall promptly quit and surrender to Landlord the Premises broom-clean, in good order and condition, ordinary wear, condemnation, casualty and Landlord's repair obligations excepted, and Tenant shall remove all of its movable furniture and other effects and such alterations, additions and improvements as Landlord shall require Tenant to remove pursuant to Section 13. For purposes of the foregoing sentence, items which are partially worn from normal use, but not yet in need of repair, shall be considered to be in good condition. Likewise, items which are worn from normal use and have been in such condition without Landlord repairing them shall be considered to be in good condition. All movable furniture and other effects and alterations, additions and improvements not so removed shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or any other person and without obligation to account therefor; and Tenant shall pay Landlord all reasonable expenses incurred in connection with such property, including, but not limited to, the cost of repairing any damage to the Building or Premises caused by removal of such property. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of this Lease.
Section 24. HOLDOVER
If Tenant or any party claiming through or under Tenant shall remain or continue to be in possession of the Premises or any part thereof after the termination of this Lease, and Landlord continues to accept rent payments, Tenant or such party or both shall be deemed to be a month to month tenant of the Premises on all the terms and conditions of this Lease, except that the Base Rent shall be 110% of the amount of the Base Rent for the final Lease Year. Nothing herein contained shall be construed to limit Landlord's right to obtain possession of the Premises upon termination of this Lease by unlawful detainer proceedings or otherwise in the event that Landlord does not continue to accept rent payments after termination of this Lease.
Section 25. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
(a) This Lease is subordinate to all mortgages, trust indentures and other encumbrances which may now or hereafter affect such leases or all or any portion of the Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. This clause shall be self-operative and no
further instrument or subordination shall be required in order to effectuate it. Tenant covenants and agrees nevertheless, to execute and deliver promptly any certificate or other assurance in confirmation of such subordination reasonably requested by any mortgagee.
(b) Tenant agrees that in the event any proceedings are brought for the foreclosure of any mortgage to which this Lease is subordinate, Tenant will attorn to the purchaser at any such foreclosure sale and will recognize such purchaser as its landlord under this Lease. Any attornment to a purchaser pursuant to this Section 25 shall occur automatically, but Tenant shall on request by and without cost to Landlord or any purchaser execute and deliver any reasonable instruments evidencing such attornment.
(c) Notwithstanding the foregoing, no subordination or attornment pursuant to the provisions of this Section 25 shall be effective unless prior to the date any party desiring such subordination or attornment obtains title to the Premises, such party has acknowledged by written notice to Tenant that this Lease and Tenant's rights hereunder shall continue undisturbed while Tenant is not in default hereunder; except that party shall not be:
(i) Liable for any act or omission of any prior Landlord; provided, however, such party shall not be released from liability if such act or omission constitutes a breach of the Landlord's obligations under the Lease and continues after the lender or purchaser succeeds to the interest of the Landlord under the Lease; or
(ii) Subject to any offsets or defenses which Tenant might have against any prior Landlord; or
(iii) Bound by any Base Rent which Tenant might have paid for more than one month in advance to any prior Landlord.
In addition, and notwithstanding the provisions of this Section 25, any subordination of this Lease or attornment by Tenant shall be subject to Tenant's receipt of written assurance from the mortgagee or deed of trust holder that (a) Tenant's possession and this Lease, including any options to extend the Lease, will not be disturbed so long as Tenant is not in default hereunder beyond any applicable notice and cure periods and attorns to the record owner of the Premises; and (b) in the event of foreclosure or sale, the Lease shall continue in full force and effect in accordance with its terms as a direct lease between Tenant and such mortgagee, deed of trust holder, or other purchaser; provided that such rights of Tenant shall be subject to the provisions of Section 25(c)(i) through (iii) above.
(d) In the event a foreclosure is commenced against the Premises, Landlord will give Tenant notice of such commencement at least thirty (30) days prior to the foreclosure sale.
Section 26. STATEMENT OF PERFORMANCE
Each party agrees at any time and from time to time, to execute and deliver to the other, within twenty (20) days following a request therefor, a statement in writing certifying that this Lease is in full force and effect, and unmodified (or specifying any modifications), that the requesting party is not in default hereunder (or specifying any alleged defaults by the requesting party), and any further information about this Lease or the Premises which the
requesting party may reasonably request. Each party understands that prospective purchasers, mortgagees or lessors of the Building and prospective assignees of this Lease or prospective subleases or occupants of the Building will rely on such certificates. Any failure by either party to respond to a request within twenty (20) days after receipt of the request shall constitute an admission that the matters set forth in the requested certificate are true.
Section 27. RULES AND REGULATIONS
The rules and regulations set forth on Exhibit C attached hereto are hereby made a part of this Lease. Landlord may from time to time amend, modify, delete or add new and additional reasonable rules and regulations for the use, safety, cleanliness and care of the Premises. Such new or modified rules and regulations shall be effective upon notice to Tenant from Landlord thereof. Tenant and Tenant's employees, agents and invitees, shall at all times observe faithfully and comply strictly with, the rules and regulations set forth on Exhibit C or as hereinafter modified by Landlord. In the event of any breach of any rules or regulations set forth on Exhibit C or any amendments or additions thereto, Landlord shall have all remedies in this Lease provided for in the event of default by Tenant and shall, in addition have any remedies available at law or in equity including the right to enjoin any breach of such rules and regulations. In the event of any conflict between the terms of this Lease and the terms of any rules and regulations issued by Landlord, including those set forth in Exhibit C, the terms of this Lease shall control.
Section 28. INTENTIONALLY LEFT BLANK.
Section 29. INDEMNITY; WAIVER
(a) Tenant shall indemnify and hold Landlord harmless from any and all demands, claims, causes of action, liabilities, judgments, fines and expenses (including, without limitation, reasonable attorney's fees) incurred or suffered by Landlord by reason of any breach of this Lease (beyond applicable grace and cure periods) by Tenant or Tenant's employees, agents or invitees of any covenant or provision of this Lease.
(b) Landlord has no knowledge of any present violations of applicable federal, state, or local laws and regulations, including all laws related to toxic hazardous waste and hereby agrees to indemnify and hold harmless Tenant from liability for any such hazardous waste existing prior to Tenant's occupancy of the Premises. The Tenant shall comply with all applicable federal, state, and local laws and regulations, including but not limited to the Federal Water Pollution Control Act, 33 U.S.C. ss.1251, et seq., the Oil Pollution Act, 33 U.S.C. ss.2701 et seq., the Clean Air Act, 42 U.S.C. ss.7401, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss.6901, et seq., and the Comprehensive Environmental Response, Control, and Liability Act, 42 U.S.C. ss.9601, et seq., as subsequently amended. Prior to the date that is thirty (30) days from the date hereof, Landlord agrees, as a material condition of this Lease, to provide Tenant with an environmental assessment of the Premises, in form and substance satisfactory to Tenant, certified by a third-party environmental consultant licensed to practice in the State of Colorado and reasonably acceptable to Tenant, which report shows to Tenant's satisfaction that the Premises are free and clear of Hazardous Materials and the Premises are not in violation of any environmental laws, rules, regulations or enactments (the "Environmental Assessment"). In the event Landlord is unable to timely deliver such report, Tenant shall be entitled to terminate this Lease upon written notice to Landlord delivered no later than July 1, 1999. The Tenant
shall indemnify, defend, and hold the Landlord harmless for any violations incurred under any such laws and regulations or for any costs, damages, claims, liabilities, and judgments to the extent arising from past, present, and future acts or omissions of the Tenant in connection with the use and/or occupancy authorized by the Lease or other acts of Tenant or its agents. This indemnification and hold harmless agreement includes, but is not limited to, acts and omissions of the Tenant in connection with the use and/or occupancy authorized by the Lease which result in: (1) violations of the above or any applicable laws and regulations; (2) judgments, claims, or demands assessed against the Landlord; (3) reasonable costs, expenses, and damages incurred by the Landlord; or (4) other releases or threatened releases on or into the land, property, and other interest of the Landlord by solid waste and/or hazardous substance(s).
(c) The Tenant's indemnification of the Landlord shall also include any damages to life or property arising from the Tenant's occupancy or use of land, property, and other interest of the Landlord. The Landlord has no duty to inspect leasehold area or to warn of hazards and, if the Landlord does inspect the area, it shall incur no additional duty nor liability for identified or non-identified hazards. This covenant may be enforced by the Landlord in a court of competent jurisdiction. This, and all other Tenant indemnifications of Landlord and Landlord indemnifications of Tenant under this Lease, shall survive the expiration or termination of this Lease.
(d) LANDLORD AND TENANT HEREBY MUTUALLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OTHER THAN CLAIMS FOR PERSONAL INJURY OR DEATH.
(e) Binding Arbitration.
(i) Any controversy, claim or dispute arising out of or relating to the construction provisions of this Lease (Section 10) or the breach, termination, enforceability or validity thereof, other than claims for personal injury or death, shall be determined exclusively by binding arbitration in Boulder County before three arbitrators. The arbitration shall be governed by the American Arbitration Association under its Commercial Arbitration Rules, provided that at least one member of the panel shall have relevant knowledge of or experience in the commercial real estate industry.
(ii) No provision of, nor the exercise of any rights under Section 29(e) shall limit the right of any party: (A) to bring a forcible entry and detainer, unlawful detainer, or eviction or constructive eviction action; (B) to exercise self-help remedies provided for in this Lease or by law; or (C) to request and obtain from a court having jurisdiction before, during or after the pendency of any arbitration, provisional or ancillary remedies and relief including, but not limited to, injunctive or mandatory relief or the appointment of a receiver. The institution and maintenance of an action or judicial proceeding for, or pursuit of, provisional or ancillary remedies or exercise of self-help remedies shall not constitute a waiver of the right of any party hereto, even if such party is the plaintiff, to submit the dispute to arbitration if such party would otherwise have such right.
(iii) At any such arbitration proceeding, the arbitrator shall not have the power or authority to award punitive damages to any party. Judgment
upon the award rendered may be entered in any court having jurisdiction.
(iv) Each of the parties shall, subject to the award of the arbitrators, pay an equal share of the arbitrators' fees.
(f) Landlord represents and warrants to Tenant as follows:
(i) Neither Landlord nor any of its agents, officers, employees or consultants has any knowledge of any (a) hazardous or toxic materials, wastes or substances ("Hazardous Materials") which are located in or which have been treated, stored, generated or disposed of upon the Premises; or (b) violation of any state, federal or local law enacted for the protection of the environment or the safety of workers at the Premises.
(ii) Tenant shall not have any responsibility or obligation for clean-up, remediation, defense or indemnification with respect to any environmental pollution, environmental impairment or Hazardous Materials not caused by Tenant, its suppliers, agents, contractors, employees, invitees, or as a result of Tenant's operations at the Premises.
Section 30. COMMENCEMENT OF THE TERM
Subject to Section 10 above, the Term of this Lease shall commence on whichever of the following dates shall first occur:
(a) The date on or after December 15, 1999 on which the Premises are "Substantially Complete" (which shall mean that (i) Landlord shall have substantially completed the work in the Premises required to be completed by Landlord as specified in Exhibit B (including the Building, the Parking Lot and all necessary access and egress thereto), exclusive of minor "punch list" items of mechanical and cosmetic adjustment that do not prevent Tenant from using or enjoying the Premises for the use intended hereunder, (ii) Landlord has furnished to Tenant a final unconditional certificate of occupancy for the Premises, and (iii) Landlord has delivered to Tenant an Environmental Assessment for the Premises (as defined in Section 29 herein) in form and substance satisfactory to Tenant; provided that, in the event Landlord shall be delayed in completing Landlord's Work by any interference with or hindrance of such work by Tenant, Tenant's contractor or any of their employees, servants or agents or by any changes in such work requested by Tenant and agreed to by Landlord ("Tenant-Caused Delays"), the Premises shall be deemed to have been Substantially Complete on the date on which Landlord would have Substantially Completed Landlord's Work had such Tenant-Caused Delay not occurred); or
(b) The date on which Tenant shall take possession and occupy the Premises.
Landlord and Tenant shall execute and record an agreement specifying the date, determined in the manner specified above, on which the term of this Lease commenced, which date shall be the Commencement Date for all purposes under this Lease.
Section 31. TENANT'S DEFAULT
The following shall constitute defaults of Tenant hereunder:
(a) Tenant shall fail to pay when due any installment of Base Rent or any other sum payable by Tenant under terms of this Lease, and Tenant shall fail
to remedy such failure within ten (10) days after Landlord shall have given Tenant written notice specifying such failure;
(b) Tenant shall neglect or fail to perform or observe any of the covenants herein contained on Tenant's part to be performed or observed and Tenant shall fail to remedy such default within thirty (30) days after Landlord shall have given to Tenant written notice specifying such neglect or failure (or within such period, if any, as may be reasonably required to cure such default if it is of such nature that it cannot be cured within such thirty-day period and Tenant proceeds with reasonable diligence thereafter to cure such default);
(c) This Lease or the Premises or any part thereof shall be taken upon execution or by other process of law directed against Tenant, or shall be taken upon or subject to any attachment at the instance of any creditor of or claimant against Tenant, and such, attachment shall not be discharged or disposed of within ninety (90) days after the levy thereof;
(d) Tenant shall lock the Premises so as to prevent the entry therein of Landlord or Landlord's representatives as permitted by the terms of this Lease and the same is not corrected within three (3) days of written notice by Landlord to Tenant;
(e) Tenant shall:
(i) Make an assignment of all or a substantial part of Tenant's property for the benefit of creditors;
(ii) Apply for or consent to or acquiesce in the appointment of a receiver, trustee or liquidator of Tenant or of all or a substantial part of Tenant's property or of the Premises or of Tenant's interest in this Lease; or
(iii) File a voluntary petition in bankruptcy or a petition or an answer seeking reorganization under any bankruptcy or insolvency law or an arrangement with creditors, or take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against Tenant in any bankruptcy, reorganization or insolvency proceedings; or
(f) The entry of a court order, judgment or decree without the application, approval or consent of Tenant, approving a petition seeking reorganization of Tenant under any bankruptcy or insolvency law or appointing a receiver, trustee or liquidator of Tenant or of all or a substantial part of Tenant's property or of the Premises or of Tenant's interest in this Lease, or adjudicating Tenant as bankrupt or insolvent, and such order, judgment or decree shall not be vacated, set aside or stayed within ninety (90) days from the date of entry.
Section 32. REMEDIES
If Tenant shall default under this Lease as set forth in Section 31, Landlord shall have the following rights and remedies in addition to all other remedies at law or equity, and none of the following, whether or not exercised by Landlord, shall preclude the exercise of any other right or remedy whether herein set forth or existing at law or equity:
(a) Landlord shall have the right to terminate this Lease by giving Tenant notice in writing, and upon the giving of such notice, this Lease and the
Term hereof as well as the right, title and interest of Tenant under this Lease shall wholly cease and expire in the same manner and with the same force and effect (except as to Tenant's liability on the date specified in such notice as if such date were the expiration date of the Term of this Lease) without the necessity of re-entry or any other act on Landlord's part. Upon any termination of this Lease, Tenant shall quit and surrender to Landlord the Premises as set forth in Section 23. If this Lease is terminated, Tenant shall remain liable to Landlord for all Base Rent accrued and unpaid and other sums due hereunder to the date of termination of this Lease. Landlord shall also be entitled to recover from Tenant the worth at the time of such termination of the excess, if any, of the amount of Base Rent reserved in this Lease for the balance of the Term of this Lease (which shall be calculated using a reasonable discount rate determined at that time) over the then reasonable rental value of the Premises for the same period.
(b) To the extent permitted in accordance with applicable law, Landlord may without demand or notice, re-enter and take possession of the Premises or any part thereof, and repossess the same as of Landlord's former estate and expel Tenant and those claiming through or under Tenant, and remove the effects of any and all such persons (forcibly, if necessary) without being deemed guilty of any manner of trespass and without prejudice to any remedies for arrears of rent or preceding breach of covenants. Should landlord elect to re-enter as provided in this Section 32(b), or should Landlord take possession pursuant to legal proceedings or pursuant to any notice provided for by law, Landlord may, from time to time, without terminating this Lease, relet the Premises or any part thereof for such term or terms and at such rental or rentals, and upon such other conditions as Landlord may deem advisable, with the right to make alterations and repairs to the Premises. No such re-entry or repossession of the Premises by Landlord shall be construed as an election on Landlord's part to terminate this Lease unless a written notice of termination is given to Tenant by Landlord. No such re-entry or repossession of the Premises shall relieve Tenant of its liability and obligation under this Lease, all of which shall survive such re-entry or repossession. Upon the occurrence of such re-entry or repossession, Landlord shall be entitled to the amount of the monthly Base Rent, and any other sums, which would be payable hereunder if such re-entry or repossession had not occurred, less the net proceeds, if any, of any reletting of the Premises after deducting all of Landlord's expenses in connection with such reletting, including but without limitation, all repossession costs, brokerage commissions, legal expenses, reasonable attorney's fees, expenses of employees, alteration costs and expenses of preparation for such reletting. Tenant shall pay such amount to Landlord on the days on which the Base Rent or any other sums due hereunder would have been payable hereunder if possession had not been retaken. In no event shall Tenant be entitled to receive the excess, if any, of net rent collected by Landlord as a result of such reletting over the sums payable by Tenant to Landlord hereunder. Notwithstanding the provisions of this Section 32 or any other provision of this Lease to the contrary, (a) Landlord shall not have the right to accelerate the rent and other charges due hereunder so long as Tenant is not in default in the payment of any rent or charges due under this Lease for a period of more than thirty (30) days; (b) any costs and expenses incurred by Landlord in attempting to relet the Premises (including renovation expenses, reasonable attorney fees and any free rent granted to a new tenant) shall be spread over the entire term of the new lease, and the rent to be received by Landlord shall be likewise determined at an average annual rate over the entire term of such lease, and Tenant shall be obligated only for the expenses attributable to the balance of the Term and Tenant shall receive credit for such rent attributable to the Term; and (c) in
exercising its remedies pursuant to this Lease, Landlord shall use commercially reasonable efforts to mitigate its damages.
(c) If Tenant shall default in making any payment required to be made by Tenant (other than payments of Base Rent) or shall default in performing any other obligations of Tenant under this Lease (after applicable grace and cure periods), Landlord may, but shall not be obligated to, make such payment or on behalf of Tenant, expend such sum as may be necessary to perform such obligation. All sums so expended by Landlord with interest thereon at the Default Rate shall be repaid by Tenant to Landlord as additional rent. No such payment or expenditure by Landlord shall be deemed a waiver of Tenant's default nor shall it affect any other remedy of Landlord by reason of such default.
If Tenant shall fail to pay by the fifth day of the month any installment of Base Rent due on the first of the month (even if such failure is timely cured), Landlord may charge and Tenant shall pay upon demand interest thereon at the Default Rate from the first day of the month and a collection charge (in addition to any reasonable attorney's fees incurred) equal to five percent (5%) of the amount of said late payment. If either party shall fail to pay when due any sum other than Base Rent due under this Lease (even if such failure is timely cured), the receiving party may charge and the paying party shall pay upon demand interest thereon at the Default Rate, and if any such amount is not paid within ten (10) days after written notice of delinquency, a collection charge (in addition to any reasonable attorney's fees incurred) equal to five percent (5%) of the amount of said late payment.
Section 33. LANDLORD'S DEFAULT
If Landlord defaults in the performance of any of its obligations, covenants and warranties hereunder and such default continues for a period of thirty (30) days after written notice thereof to Landlord from Tenant specifying the nature of such default, or such additional period as Landlord may reasonably require to cure the same (except in an emergency that Landlord shall fail to cure immediately), in addition to all other rights and remedies available to Tenant, Tenant may, at its option, cure the same on behalf of Landlord, whereupon the cost of such curing plus interest thereon at the Default Rate shall be immediately due and payable to Tenant from Landlord upon written demand therefor by Tenant. Failure of Landlord to reimburse Tenant shall entitle Tenant to deduct the costs thereof from the next subsequent rents due hereunder. Tenant shall not have the remedy of termination of this Lease unless Landlord's default is so substantial as to make the Premises untenantable, or Landlord is repeatedly in default in a persistent manner on a subject of a substantial nature; provided, however; any Tenant right of termination in such instances shall still be subject to Landlord's right to cure.
Section 34. LANDLORD'S WARRANTIES
Landlord represents, covenants and warrants (i) that it has lawful title to the Premises and has full right, power and authority to enter into this Lease; (ii) that in the construction of the Building, the Parking Lot and all other improvements on the Premises, it shall comply with all applicable laws, ordinances, regulations and requirements of governmental authorities having jurisdiction thereof; and (iii) the Premises will be developed, managed and maintained in a neat, attractive and reputable manner.
Section 35. NO IMPLIED SURRENDER OR WAIVER
The failure of either party to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease or any of the rules and regulations set forth in Exhibit C to this Lease or hereafter adopted by Landlord shall not prevent a subsequent act, which would have originally constituted a violation, from having all the force and effect of an original violation. The receipt by either party of any sums due hereunder with knowledge of the breach of any covenant of this Lease shall not be deemed a waiver of such breach. The failure of Landlord to enforce any of the rules and regulations set forth in Exhibit C, or hereafter adopted, against Tenant shall not be deemed a waiver of such rules and regulations or any part thereof. Except as set forth in this Lease, no provisions of this Lease shall be deemed to have been waived by either party hereto unless such waiver is in writing signed by such party. No act or thing done by Landlord or Landlord's agents during the Term of this Lease shall be deemed an acceptance of a surrender of the Premises, and no agreement to accept such surrender shall be valid unless in writing signed by Landlord. No employees of Landlord or of Landlord's agents shall have any power to accept the keys of the Premises prior to the termination of this Lease. The delivery of keys to any employee of Landlord, or of Landlord's agents, shall not operate as a termination of this Lease or a surrender of the Premises. No payment by one party, or receipt by the other party, of a lesser amount than any sums due hereunder, shall be deemed to be other than on account of the earliest stipulated amount, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and the receiving party may accept such check or payment without prejudice to such party's right to recover the balance of such amount or pursue any other remedy available to such party. Whenever the consent or approval of a party is required under this Lease, such consent or approval shall not be unreasonably withheld, delayed or conditioned unless expressly provided herein to the contrary, and shall be deemed given if such party has not responded within ten (10) days of the other party's request for the same if such request reminds the recipient that the request is deemed given if there is no response within ten (10) days. Further, in the event any costs or expenses (including attorney fees) are to be reimbursed by one party to the other, such expenses shall be reasonable in amount and the incurring of such expenses shall be reasonable. In the event either party commences arbitration or litigation in order to enforce its rights under this Lease or as a result of a default by the other party, the losing party shall pay the reasonable attorney fees and expenses incurred by the prevailing party.
Section 36. TIME IS OF THE ESSENCE
Time is of the essence hereof.
Section 37. PAYMENTS AFTER TERMINATION
No payment of money by Tenant to Landlord after the termination of this Lease, in any manner, or after the giving of any notice (other than a demand for payment of money) by Landlord to Tenant, shall reinstate, continue, or extend the Term of this Lease or make ineffective any notice given to Tenant prior to the payment of such money. After the service of notice or the commencement of a suit or after final judgment granting Landlord possession of the Premises, Landlord may receive and collect any sums due hereunder, and the payment of such sums shall not make ineffective any notice, or in any manner affect any pending suit or any judgment theretofore obtained.
Section 38. NO REPRESENTATIONS; ENTIRE AGREEMENT
Landlord, Tenant and their respective agents have made no representations, warranties, agreements or promises with respect to the Premises except such as are expressed herein. The entire contract of the parties is contained herein, and there are no promises, agreements, representations, warranties, conditions or understandings, either oral or written, between them, other than as are herein set forth.
Section 39. BROKERAGE
Except that Landlord has dealt with Callan and Company and has agreed to pay its brokerage fee in connection with this Lease, each party represents and warrants that it has dealt only with Landlord or Tenant, respectively, in connection with this Lease and that no broker negotiated this Lease or is entitled to any commission in connection herewith. Each party further agrees to indemnify and hold harmless the other party with respect to any claim for broker's commission or similar compensation brought by any person by reason of the indemnifying party's acts.
Section 40. NOTICE
Any notice, demand or communications concerning the Lease by Landlord to Tenant shall be in writing and shall be deemed sufficiently given or rendered if delivered personally to Tenant or any of its officers, or three days after having been sent by United States certified or registered mail, return receipt requested, postage prepaid, or one (1) business day after having been sent by a nationally recognized overnight delivery service, addressed to Tenant at the most current address of Tenant known by Landlord, or, after commencement of the Term of this Lease, at the Premises. Any notice, demand or communication concerning this Lease by Tenant to Landlord shall be in writing and must be served by certified or registered United States mail, postage prepaid, or sent by a nationally recognized overnight delivery service, addressed to Landlord at 6676 Gunpark Drive, Suite D, Boulder, Colorado 80301. Either party shall have the right to designate in writing, served as above, a different address to which any notice, demand or communication is to be mailed.
Section 41. AMENDMENT OR MODIFICATION
Except as herein otherwise provided, no amendment, alteration, modification of or addition to this Lease shall be valid or binding unless expressed in writing and signed by the party or parties to be bound thereby.
Section 42. DEFINITION OF LANDLORD
The term "Landlord" as used in this Lease, so far as covenants or obligations on the part of Landlord are concerned, shall be limited to mean and include only the owner or owners at the time in question of the Premises. In the event that the interest of the Landlord herein named in the Premises is transferred, whether by sale, lease or sublease, foreclosure, or otherwise, the named Landlord shall be and hereby is entirely freed and relieved of all covenants and obligations of Landlord hereunder, and it shall be deemed and construed without further agreement between the parties or their successors in interest, or between the parties and any such transferee that such transferee has assumed and agreed to carry out any and all covenants and obligations of the
named Landlord, whether accruing before or after the transfer, and is the Landlord hereunder.
Section 43. SEVERABILITY
If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future laws effective during the Term of this Lease, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby. It is also the intention of the parties to this Lease that in lieu of each clause or provision of this Lease that is illegal, invalid or unenforceable, there be added as a part of this Lease a clause or provision as similar in terms to such illegal, invalid or unenforceable clause or provision as may be possible and be legal, valid and enforceable.
Section 44. CAPTIONS; GENDER AND NUMBER
The caption of each Section is added as a matter of convenience only and shall be considered of no effect in the construction of any provision or provisions of this Lease. The term "Tenant" herein, or any pronoun used in place thereof, shall include the masculine, feminine, singular, plural, individuals, partnerships or corporations where applicable.
Section 45. SUCCESSORS, ASSIGNS; JOINT AND SEVERAL LIABILITY
The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, executors, administrators, and successors.
Section 46. GOVERNING LAW
This Lease shall be governed by and interpreted in accordance with the laws of the State of Colorado.
Section 47. MEMORANDUM
This Lease shall not be recorded, but Landlord and Tenant shall execute and record, at Tenant's option and expense, a memorandum of this Lease (including the right of first refusal) in the office of the Boulder County Clerk and Recorder.
Section 48. OPTIONS TO EXTEND
(a) Grant of First Option. Tenant shall have the option to extend the Term of this Lease for an additional five (5) years (the "First Option"); provided that Tenant is not in default under this Lease beyond any applicable notice and cure periods.
(b) Exercise of First Option. Tenant may only exercise its First Option by written notice to Landlord served upon Landlord during the time period between twelve (12) months and six (6) months prior to the end of the original Term. Once such notice is served, the Term of the Lease shall automatically be modified so that the Term of the Lease shall end at 11:59 p.m. on the last day of the calendar month in which the twentieth anniversary of the Commencement Date occurs.
(c) Grant of Second Option. Provided that Tenant has exercised its First Option, Tenant shall have the option to extend the Term of this Lease for another five (5) year additional period (the "Second Option"); provided that Tenant is not in default under this Lease beyond any applicable notice and cure periods, at the time the Second Option is exercised, the First Option and the Second Option shall also be referred to herein separately as the "Option Term" and together as the "Option Terms".
(d) Exercise of Second Option. Tenant may only exercise its Second Option by written notice to Landlord served upon Landlord during the time period between twelve (12) months and six (6) months prior to the end of the Term as modified by the exercise of the First Option. Once such notice is served, the Term of the Lease shall be automatically modified so that the Lease will end at 11:59 p.m. on the last day of the calendar month in which the twenty-fifth anniversary of the Commencement Date occurs.
(e) Option Rent. If Tenant exercises its option to extend in accordance with the provisions of this Section 48, this Lease shall be extended for the applicable Option Term at an annual Base Rent, as determined by agreement between Landlord and Tenant or, if no agreement is reached, equal to the market rental value of the Premises for the five-year Option Term as of the commencement date of the applicable Option Term as determined by appraisal in accordance with the provisions of this Section 48, provided, however, that such annual Base Rent for the Option Term shall not in any event be less than the annual Base Rent in effect as of the last day of the immediately preceding Term or Option Term.
After receipt of notice of Tenant's exercise of its option to extend, and after verbal discussion with Tenant as to the appropriate Base Rent, Landlord shall deliver to Tenant Landlord's proposed annual Base Rent for the applicable Option Term. If Tenant disagrees with Landlord's proposed annual Base Rent for the Option Term, and if the parties cannot agree upon an annual Base Rent by the date that is five (5) months prior to the expiration of then current Term or Option Term, then the annual Base Rent for the Option Term shall be determined as follows:
Landlord and Tenant will each promptly choose one disinterested commercial real estate appraisal firm of recognized competence and experience in the Boulder market and each firm shall designate an appraiser, who must have at least ten years of commercial appraising experience in eastern Colorado and who must be either a Senior Real Property Appraiser of the Society of Real Estate Appraisers or a member of the American Institute of Real Estate Appraisers, to perform an appraisal of the fair market rental value of the Premises for the applicable Option Term. By that date which is four (4) months prior to the expiration of the initial Term or Option Term, as the case may be, at a mutually agreeable time and place, Landlord and Tenant shall simultaneously exchange in writing the two fair market rental value appraisals of the Premises. If the two fair market rental values of the Premises, as determined by such appraisal firms, are within ten percent (10%) of each other (i.e., if the lower of the two appraised values, on a present value basis, is at least 90% of the higher of the two appraised values, on a present value basis), the fair market value of the Premises for the Option Term shall be deemed to be the average of such appraised rent values. Such average appraised rental values shall be final and conclusively binding on the two parties. Prior to submitting their appraisals, the two appraisal firms shall select (subject to the approval of Landlord and Tenant) a third disinterested commercial real estate appraisal firm of comparable qualifications to perform the same appraisal, if necessary. If the
two fair market rental values shown by the two appraisal firms are not within 10% of each other, then the third appraisal firm shall, within thirty (30) days after the exchange of the two fair market rental value appraisals, determine which of the two appraisals is closest to its opinion as to the fair market rental value of the Premises for the applicable Option Term in accordance with the foregoing instructions and such third appraisal firm shall notify Landlord and Tenant of its determination. The appraisal so chosen by the third appraisal firm shall be final and conclusively binding on the parties as to the fair market rental value of the Premises for the applicable Option Term. Landlord and Tenant will be responsible for compensating the appraisal firm selected by each, and the third appraisal firm, if any, shall be compensated equally by the parties.
In the event the annual Base Rent for the Option Term is not determined until after the commencement date of the applicable Option Term, Tenant shall continue paying the annual Base Rent payable under the Lease for the preceding Lease Year and, at such time as any increase in the annual Base Rent is determined, (i) the annual Base Rent shall be retroactively adjusted to the commencement date of the applicable Option Term, (ii) Tenant shall (within thirty (30) days of Landlord's written demand) pay to Landlord the increased annual Base Rent for the period between the commencement date of the applicable Option Term and the last day of the month in which Landlord's demand for such payment is made, and (iii) commencing on the first day of the month following the month in which such demand for the lump sum payment is made by Landlord, Tenant shall start making payments of monthly installments of annual Base Rent in the recomputed amount. Once annual Base Rent for the Option Term has been established, each of the parties agree, on the demand of the other, to execute an appropriate amendment to the Lease to incorporate the annual Base Rent established.
(f) All Other Provisions of the Lease to Remain the Same During Option Periods. All the provisions of the Lease shall remain the same during the extended Terms in the event either or both of the options granted hereunder are exercised (including the payment of Operating Costs), except for Option Rent, as provided in Section 48(d) above. If the Term of the Lease is extended as herein provided, the term "Term" as used herein shall include such Option Term or Terms.
Section 49. RIGHT OF FIRST REFUSAL
(a) Right of First Refusal. If at any time during the Term Landlord proposes to sell the Premises (for example, where Landlord receives an unsolicited offer it proposes to accept) or list them for sale, Landlord shall first make a written offer to sell the Premises to Tenant on the same terms and conditions on which the Landlord proposes to transfer or list the Premises.
(b) Acceptance of Offer. The Tenant shall have the right for a period of
thirty (30) days after receipt of the offer from the Landlord to elect to
purchase the Premises, during which time Tenant may conduct any and all
inspections of the Premises. The making of a counteroffer by Tenant shall not be
deemed a rejection of Landlord's offer or otherwise shorten Tenant's thirty (30)
day period to accept Landlord's offer. To exercise this right of first refusal,
the Tenant shall give written notice to the Landlord within said thirty-day
period. Upon exercise of the right of first refusal, the sale shall be closed
and payment made on the terms set forth in the offer made to Tenant pursuant to
Section 49(a), except that Tenant shall be entitled to a credit against the
purchase price in the amount of one-half of the amount of the brokerage
commission Landlord would have paid but avoided by selling to Tenant, and except
for the
time for closing which shall be conducted at a time and place acceptable to the parties, but in no event later than one hundred twenty (120) days after receipt by Tenant of Landlord's offer.
(c) Failure to Accept Offer. If Tenant does not elect to purchase the Premises in accordance with Section 49(b) above, or if the purchase is not closed, then Landlord may transfer the Premises within six (6) months after making the offer to Tenant to an unaffiliated third party pursuant to a bona fide arm's length agreement at a price not less than ninety percent (90%) of the price offered to Tenant or at a price not less than the Tenant's last counter-offer to Landlord, whichever is greater, and Tenant's first right of refusal shall thereupon terminate. In the event Landlord does not so transfer the Premises within such six (6) month period, then Tenant's first right of refusal shall continue. In any event, Tenant's first right of refusal shall terminate at the end of the Term or earlier termination of this Lease.
(d) Trade. The sale that Landlord may make after Tenant does not elect to purchase the Premises under Section 49(c), or such a purchase is not closed may be pursuant to a trade for other property so long as such other property has a fair market value of at least ninety percent (90%) of the price offered to Tenant pursuant to Section 49(a) above, or not less than the Tenant's last counter-offer to Landlord, whichever is greater.
(e) Transfer to Related Entity. The Tenant's right of first refusal granted under this Section 49 shall not apply to any transaction whereby Landlord transfers the Premises to Landlord's Members or relatives of the Members of Landlord or to an entity in which any of them own beneficial interests; provided, however, that in such event the first right of refusal shall continue and the interest of the transferee partnership or limited liability company shall be subject to this first right of refusal.
(f) Tenant's Rights. Landlord hereby agrees not to grant purchase, option or first refusal rights of any kind with respect to the Premises or any part thereof or any interest therein, to any person or party other than Tenant, unless the same are expressly made subject to the rights of Tenant hereunder.
(g) Sale of Property to a Third Party. If Tenant elects not to exercise its right of first refusal and the Premises are sold to a third-party, the sale shall be subject to this Lease except that this first right of refusal shall have terminated.
(h) Part of Premises. Tenant's first right of refusal shall also apply when Landlord proposes to sell or list a part of the Premises, in which event Landlord shall offer the part of the Premises it proposes to list or sell to Tenant and the provisions of this Section 49 shall also govern such offer and first right of refusal.
Section 50: LENDERS PROTECTION CLAUSE
Tenant agrees to give each holder of a mortgage, deed of trust or other encumbrance secured by the Premises, by certified or registered mail, or nationally recognized overnight delivery service, a copy of any notice of default served upon the Landlord, provided that prior to such notice Tenant has been notified in writing of the address of such holder. Tenant further agrees that all of such holders shall have thirty (30) days from the date of such notice within which to cure such default or if such default cannot be cured within that time, then in such additional time as may be necessary if within
such thirty (30) days, such holder has commenced and is diligently pursuing, the remedies necessary to cure such default (including, but not limited to, commencement of foreclosure proceedings, if necessary, to effect such cure) in which event this Lease shall not be terminated while such remedies are being so diligently pursued. The preceding sentence is not intended to alter or delay any rights the Tenant may have hereunder or by law, except to prohibit any Tenant right to terminate this Lease until the notice and cure opportunity set forth in the preceding sentence have been given.
EXECUTED as of the date first set forth above.
LANDLORD: TENANT: MUM IV, LLC HELIX TECHNOLOGY CORPORATION By /s/ Donald W. Unkefer By /s/ Michael El-Hillow ------------------------- --------------------------- Donald W. Unkefer Michael El-Hillow General Manager Senior Vice President and Chief Financial Officer |
EXHIBIT A
Recorded Plan of the Premises
EXHIBIT B
Building Plans and Specifications
EXHIBIT C
Rules and Regulations
The Rules and Regulations set forth in this Exhibit shall be and hereby are made a part of the Lease to which they are attached. Whenever the term "Tenant" is used in these rules and regulations, it shall be deemed to include Tenant, its employees, agents, or invitees. The following rules and regulations may from time to time be modified by Landlord in the manner set forth in Section 27 of the Lease.
1. Use of the Water Fixtures. Water closets and other water fixtures shall not be used for any purpose other than that for which they are intended, and any damage resulting to such fixtures from misuse on the part of the Tenant shall be paid for by Tenant, except to the extent such payment is made from proceeds of insurance to Landlord.
2. Trash. All trash shall be placed in receptacles provided by Tenant on the Premises.
3. Hazardous Operations and Items. Tenant shall not bring or permit to be brought or kept in or on the Premises by hazardous, flammable, combustible or explosive fluid, material, chemical or substance except those that shall be handled in a safe manner according to OSHA standards and the environmental laws set forth in Section 29.
4. Outside Storage. There shall be no outside storage of any articles of any nature unless it is screened from adjacent rights of way or other building sites in the subdivision in a manner approved by Landlord.
5. Captions. The caption for each of these rules and regulations is added as a matter of convenience only and shall be considered of no effect in the construction of any provision or provisions of these rules.
EXHIBIT D
Covenants and Restrictions
Exhibit 10.35
FIRST AMENDMENT
TO
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
THIS FIRST AMENDMENT (the "First Amendment") is made and entered into this 30 day of June, 2006, by and between CATELLUS OPERATING LIMITED PARTNERSHIP, a Delaware Limited Partnership, successor in interest to Catellus Development Corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon corporation ("Tenant").
RECITALS
A. Landlord and Tenant entered into a Multi-Tenant Industrial Triple Net Lease dated as of December 15, 2000 (the "Lease"), pursuant to which Landlord leased to Tenant certain premises located at Southshore Corporate Park - Building C, 4293 NE 185th Avenue; Gresham, Oregon 97230, as more particularly described in the Lease.
B. Landlord and Tenant desire to amend the Lease and provide for a Security Deposit in the amount of $23,564.42 and delete from the Lease, Section 3.3 Letter of Credit, to become effective on June 30, 2006; on the terms and conditions below
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties, intending to be legally bound, agree as follows:
1. Amendment to Section 3.3. Subject to the terms and conditions stated,
Section 3.3 Letter of Credit of the Lease is deleted and replaced with the
following:
"3.3 Security Deposit. Upon the execution of this First Amendment, Tenant shall pay to Landlord the Security Deposit, in the amount of $23,564.42. The Security Deposit shall secure the full and faithful performance of each provision of the Lease to be performed by Tenant. Landlord shall not be required to pay interest on the Security Deposit or to keep the Security Deposit separate from Landlord's own funds. If Tenant fails to perform fully and timely on all or any of Tenant's covenants and obligations hereunder, Landlord may, but without obligation, apply all or any portion of the Security Deposit toward fulfillment of Tenant's unperformed covenants and/or obligations. If Landlord does so apply any portion of the Security Deposit, Tenant shall immediately pay Landlord sufficient cash to restore the Security Deposit to the amount of the then current Base Rent per month. After Tenant vacates the Premises, upon the expiration or sooner termination of this Lease, if Tenant is not then in default, Landlord shall return to Tenant any unapplied balance of the Security Deposit. If a change in control of Tenant occurs during this Lease and following such change the financial condition of Tenant is, in Landlord's reasonable judgment, reduced, Tenant shall deposit such additional monies with Landlord as Landlord and Tenant shall agree in good faith to be sufficient to cause the Security Deposit to be at a commercially reasonable level based on said change in financial condition."
2. Effect of Lease. Except as expressly amended herein, all other terms, conditions and covenants of the Lease shall remain binding and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this First Amendment to be executed on the respective dates set forth below, effective of the day and year first above written.
LANDLORD: TENANT: CATTELLUS OPERATING LIMITED SYNETICS SOLUTIONS, INC., an Oregon PARTNERSHIP, corporation A DELAWARE LIMITED PARTNERSHIP BY: PALMTREE ACQUISITION CORPORATION, BY: /s/ Akira Hijikuro A DELAWARE CORPORATION, ITS GENERAL ------------------------------------ PARTNER SUCCESSOR IN INTEREST TO NAME: Akira Hijikuro CATELLUS DEVELOPMENT CORPORATION, TITLE: TreasureR DATE: -------------------- |
BY: /s/ W. Scott Lamson --------------------------------- |
Page 2 - FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
LEASE GUARANTY
The undersigned (collectively the "Guarantor") hereby absolutely and unconditionally, jointly and severally, guarantees the prompt, complete, and full and punctual payment, observance, and performance of all the terms, covenants, and conditions provided to be paid, kept, and performed by the tenant under that certain Lease Agreement (such lease, as amended, being herein referred to as the "Lease"), dated July 20, 2000, between Catellus Operating Limited Partnership, a Delaware Limited Partnership, as Landlord ("Landlord"), and Synetics Solutions Inc., an Oregon Corporation, as Tenant ("Tenant"), covering the premises located at 18870 NE Riverside Parkway, Gresham, OR 97230. United States of America and all renewals, amendments, expansions, and modifications of the Lease. This Guaranty shall include any liability of Tenant which shall accrue under the Lease for any period preceding as well as any period following the term of the Lease.
The obligation of the Guarantor is primary and independent of Tenant's obligations under the Lease and may be enforced directly against the Guarantor independently of and without proceeding against the Tenant or exhausting or pursuing any remedy against Tenant or any other person or entity. Guarantor waives any requirement that Landlord mitigate damages under the Lease.
This instrument may not be changed, modified, discharged, or terminated orally or in any manner other than by an agreement in writing signed by Guarantor and the Landlord.
The obligations of Guarantor under this Guaranty shall not be released or otherwise affected by reason of any sublease, assignment, or other transfer of the Tenant's interest under the Lease, whether or not Landlord consents to such sublease, assignment, or other transfer.
Any act of Landlord, or the successors or assigns of Landlord, consisting of a waiver of any of the terms or conditions of said Lease, or the giving of any consent to any manner or thing relating to said Lease, or the granting of any indulgences or extensions of time to Tenant, may be done without notice to Guarantor and without releasing the obligations of Guarantor hereunder.
The obligations of Guarantor hereunder shall not be released by Landlord's receipt, application, or release of security given for the performance and observance of covenants and conditions in said Lease contained on Tenant's part to be performed or observed nor by any modification of such Lease; but in case of any such modification, the liability of Guarantor shall be deemed modified in accordance with the terms of any such modification of the Lease.
Guarantor waives any defense or right arising by reason of any disability or lack of authority or power of Tenant and shall remain liable hereunder if Tenant or any other party shall not be liable under the Lease for such reason.
Until all the covenants and conditions in said Lease on Tenant's part to be performed and observed are fully performed and observed, Guarantor (i) shall have no right of subrogation against Tenant by reason of any payments or acts of performance by the Guarantor, in compliance with the obligations of the Guarantor hereunder; (ii) waives any right to enforce any remedy which Guarantor now or hereafter shall have against Tenant by reason of any one or more payments or acts of performance in compliance with the obligations of Guarantor hereunder; and (iii) subordinates any liability or indebtedness of Tenant now or hereafter held by Guarantor to the obligations of Tenant to the Landlord under said Lease.
The liability of Guarantor hereunder shall not be released or otherwise affected by (i) the release or discharge of Tenant in any insolvency, bankruptcy, reorganization, receivership, or other debtor relief proceeding involving Tenant (collectively "proceeding for relief); (ii) the impairment, limitation, or modification of the liability of Tenant or the estate of the Tenant in any proceeding for relief, or of any remedy for the enforcement of Tenant's liability under the Lease, resulting from the operation of any law relating to bankruptcy, insolvency, or similar proceeding or other law or from the decision in any court; (iii) the rejection or disaffirmance of the Lease in any proceeding for relief; or (iv) the cessation from any cause whatsoever of the liability of Tenant.
This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment by Tenant to Landlord under the Lease is rescinded or must otherwise be returned by Landlord upon the insolvency, bankruptcy, reorganization, receivership, or other debtor relief proceeding involving Tenant, all as though such payment had not been made.
This Guaranty is executed and delivered for the benefit of Landlord and its successors and assigns, and is and shall be binding upon Guarantor and its successors and assigns, but Guarantor may not assign its obligations hereunder without the prior written consent of Landlord, which may be withheld in Landlord's sole discretion.
GUARANTOR AND LANDLORD WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND GUARANTOR ARISING OUT OF THIS GUARANTY OR ANY OTHER DOCUMENT OR INSTRUMENT EXECUTED IN CONNECTION HEREWITH OR ANY TRANSACTION RELATED TO THIS GUARANTY.
Guarantor agrees to pay all costs and expenses, including reasonable attorneys' fees, incurred by Landlord in enforcing the terms of this Guaranty.
This Guaranty shall be governed by and construed in accordance with the internal laws of the State which governs the Lease excluding any principles of conflicts of laws. For the purpose solely of litigating any dispute under this Guaranty, the undersigned submits to the jurisdiction of the courts of said state.
if the Guarantor is more than one person or entity, the liability of each such Guarantor shall be joint and several.
WITNESS THE EXECUTION hereof this _____ day of June, 2006.
GUARANTOR:
Brooks Automation, Inc.
By: /s/ Edward C. Grady ------------------------------------ Name: Edward C. Grady Title: President & CEO |
FIRST AMENDMENT TO
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
AND COMMENCEMENT DATE MEMORANDUM
THIS FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE AND COMMENCEMENT DATE MEMORANDUM ("Amendment") is made and entered into as of the 19th day of December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation ("Landlord"), and SYNETICS SOLUTIONS, INC., an Oregon corporation ("Tenant").
RECITALS:
A. Landlord and Tenant are parties to that certain Multi-Tenant Industrial Triple Net Lease dated as of July 20, 2000 (the "Lease"), pursuant to which Landlord leased to Tenant certain premises located at Southshore Corporate Park - Building A, 18870 NE Riverside Parkway, Gresham, Oregon, as more particularly described in the Lease.
B. Landlord and Tenant desire (a) to acknowledge, among other things, the Commencement Date (as such term is defined in the Lease) and the rentable square footage of the Premises and (b) to amend the Lease on the terms and conditions set forth below.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby amend the Lease and Landlord and Tenant agree as follows:
1. INCORPORATION; DEFINED TERMS. The Lease, including all exhibits and schedules attached thereto, is incorporated into this Amendment by this reference. All capitalized terms used and not otherwise defined in this Amendment, but defined in the Lease, shall have the meaning set forth in the Lease.
2. CONFIRMATION OF COMMENCEMENT DATE AND BASE RENT. Notwithstanding any provision to the contrary contained in the Lease, Tenant's obligation to pay Shell Base Rent (as set forth in the Basic Lease Information) under the Lease, but subject to the terms of this Paragraph 2, commenced on December 12, 2000. Concurrently with the execution of this Amendment, Tenant shall pay to Landlord the amount of Twenty Two Thousand Two Hundred Twenty Nine and 38/100 Dollars ($22,229.38) as Shell Base Rent for the month of December 2000. Tenant shall be under no obligation to pay the First Allowance Rent or the Second Allowance Rent for December 2000. In no event shall Landlord's acceptance of Shell Base Rent for the month of December accelerate the Commencement Date which shall be
conclusively deemed to be January 1, 2001, and, notwithstanding any provision to the contrary contained in the Lease, the Term of the Lease shall commence on such date. In accordance with the foregoing, rather than enter into a separate Commencement Date Memorandum ("Memorandum"), as contemplated in Section 2 of the Lease, the parties desire to incorporate the provisions of the Memorandum herein as follows:
(a) The Commencement Date, as defined in the Lease, is January 1, 2001.
(b) The Premises contains 109,906 rentable square feet.
(c) Base Rent is payable on the Commencement Date (i.e., January 1, 2001) in accordance with the following rent schedule:
Months Shell Base Rent First Allowance Rent Second Allowance Rent* Total Base Rent ------ --------------- -------------------- ---------------------- --------------- 1-24 $36,269.00 $5,343.00 $11,535.00 $53,147.00 25-48 $38,487.00 $5,343.00 $11,535.00 $55,365.00 49-72 $40,821.00 $5,343.00 $11,535.00 $57,699.00 73-96 $43,307.00 $5,343.00 $11,535.00 $60,185.00 97 -120 $45,944.00 $5,343.00 $11,535.00 $62,822.00 121-144+ $48,742.00 $ 0 $ 0 $48,742.00 145-168+ $51,710.00 $ 0 $ 0 $51,710.00 169-180+ $54,859.00 $ 0 $ 0 $54,859.00 |
* Subject to prepayment pursuant to Section 9(d) of the Work Letter
+ Subject to the provisions of the Option to Extend set forth in Section 19 of the Addendum to Lease
3. RIGHT OF FIRST OFFER ON ADJACENT SPACE. A new Section 20 is hereby added to the Addendum to Lease as follows:
"20. Right of First Offer
20.1 Provided that (i) no Event of Default has occurred and is continuing under the Lease, (ii) Tenant is in occupancy of at least ninety percent (90%) of the Premises, (iii) Landlord has not given more than two (2) notices of default in any twelve (12) month period for nonpayment of monetary obligations, if at any time prior to the last twelve (12) months of the Term Landlord intends to offer the approximately 55,094 square feet portion of the Building not occupied by Tenant pursuant to the Lease (the "Additional Premises") for lease to third parties or to accept an offer of a third party to lease the Additional Premises, Landlord shall first give written notice to Tenant of the rental rate and other material terms upon which Landlord is willing to lease the Additional Premises ("Landlord's Lease Notice"). Landlord's Lease Notice shall constitute an offer to lease the Additional Premises to Tenant at the rental rate and upon the terms and conditions contained in Landlord's Lease Notice and shall state the anticipated date of availability of the Additional Premises. Tenant shall have five (5)
business days after receipt of Landlord's Lease Notice to accept such
offer. Tenant shall accept such offer, if at all, only by delivery to
Landlord of Tenant's irrevocable written commitment to lease the
Additional Premises at the rental rate and upon the terms and
conditions contained in Landlord's Lease Notice (the "Expansion
Commitment"). Notwithstanding the foregoing, such first offer right of
Tenant shall commence only following the expiration or earlier
termination of the initial lease of the Additional Premises, including
any renewal, extension or expansion rights set forth in such leases,
regardless of whether such renewal, extension or expansion rights are
executed strictly in accordance with their terms, or pursuant to a
lease amendment or a new lease (collectively, the "Superior Right
Holders") with respect to such Additional Premises. Tenant's right of
first offer shall be on the terms and conditions set forth in this
Section 20.
20.2 Provided that no Superior Right Holder wishes to lease the Additional Premises, if Tenant delivers to Landlord the Expansion Commitment within such five (5) business day period, all (but not part) of the Additional Premises shall be leased to Tenant commencing on the date Landlord delivers possession of the Additional Premises to Tenant and continuing for a period of time coterminous with the remaining Term of the Lease, including any options to extend the Term. Tenant shall lease the Additional Premises upon the same terms, conditions and covenants as are contained in the Lease except that (i) the Base Rent for the Additional Premises shall be at the rate set forth in Landlord's Lease Notice, and (ii) any terms and conditions set forth in Landlord's Lease Notice that are inconsistent with the terms and conditions of the Lease shall control.
20.3 Except as otherwise set forth in Landlord's Lease Notice, possession of the Additional Premises shall be delivered to Tenant on an "as-is" basis and the construction of improvements in the Additional Premises shall comply with the terms of Section 10 and Exhibit G of this Lease. Landlord shall prepare and Landlord and Tenant shall execute and deliver a written agreement modifying and supplementing the Lease and specifying that the Additional Premises are part of the Premises and, except as otherwise specified in Landlord's Lease Notice, subject to all of the terms and conditions of the Lease.
20.4 Time is of the essence with respect to the exercise by Tenant of its rights granted hereunder. In the event Tenant fails to deliver to Landlord Tenant's Expansion Commitment within the five (5) business day period prescribed above, all rights of Tenant to lease the Additional Premises shall terminate and Landlord shall have no further obligation to notify Tenant of any proposed leasing of the Additional Premises, and Landlord shall thereafter have the unconditional right to lease the Additional Premises to third parties or to accept offers from third parties to lease the Additional Premises without further obligation to Tenant. The rights granted to Tenant under this Section shall not apply to any sales or similar transfers of the Additional Premises. Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right of first offer, if at all, with
respect to all of the space offered by Landlord to Tenant at any particular time, and Tenant may not elect to lease only a portion thereof.
20.5 The rights granted to Tenant under this Section 20 are personal to Tenant, may not be exercised by or assigned to any person or entity other than Tenant, and shall terminate and be of no further force or effect upon any assignment of this Lease or subletting of the Premises unless specifically agreed and consented to in writing by Landlord in connection with any such sublease or assignment."
4. PAYMENT OF ABOVE-STANDARD TENANT IMPROVEMENT COSTS. Pursuant to Section 5(b) of the Work Letter, Landlord and Tenant have previously approved the Work Cost Estimate dated December 18, 2000, attached hereto as Exhibit A (the "Work Cost Statement"). The Work Cost Statement provides that the total costs associated with the completion of the Tenant Improvements are to be approximately Six Million Six Hundred Eighty Thousand Nine Hundred Twenty Seven Dollars ($6,680,927.00) (the "Total TI Costs"). In connection with the payment of the Total TI Costs, Landlord and Tenant hereby acknowledge that (i) the Allowance of One Million Two Hundred Thousand Dollars ($1,200,000.00) has been applied toward the Total TI Costs, and (ii) Tenant has previously paid to Landlord the Tenant Contribution pursuant to Section 9(a) of the Work Letter in the amount of Five Million Dollars ($5,000,000.00) which has also been applied toward the Total TI Costs. As of the date of this Amendment, the unpaid balance of the Total TI Costs set forth in the approved Work Cost Statement is Four Hundred Eighty Thousand Nine Hundred Twenty Seven Dollars ($480,927.00). Landlord and Tenant hereby agree that, notwithstanding any provision to the contrary contained in the Lease (including, without limitation, Section 9(b) of the Work Letter), Tenant shall pay to Landlord the balance of the Total TI Costs (which the parties estimate to be approximately $480,927.00) in accordance with the following schedule:
(a) On or before January 15, 2001, Tenant shall pay to Landlord in Immediately Available Funds the amount of Four Hundred Twenty Thousand Nine Hundred Twenty Seven Dollars ($420,927.00).
(b) On or about February 15, 2001, Tenant shall pay to Landlord in Immediately Available Funds the balance of the Total TI Costs, which the parties currently estimate to be approximately Sixty Thousand Dollars ($60,000.00), all in accordance with the terms and conditions set forth in the Lease; provided, however, any cost savings or cost increases shall be reconciled in connection with this final installment of the Total TI Costs.
If an any time Tenant does not timely make any installment of the outstanding Total TI Costs to Landlord in accordance with the foregoing, such failure shall constitute a Tenant Delay and Landlord may, but shall not be obligated to, instruct the Contractor to stop all Work until such time as Tenant has fulfilled its obligations hereunder to make payment(s) to Landlord. Tenant's failure to pay any installment of the Total TI Costs in accordance with schedule set forth above shall constitute an Event of Default under the Lease.
5. MISCELLANEOUS.
(a) Effect of Amendments. Except to the extent the Lease is modified by this Amendment, the remaining terms and provisions of the Lease shall remain unmodified and in full force and effect. In the event of conflict between the terms of the Lease and the terms of this Amendment, the terms of this Amendment shall prevail.
(b) Entire Agreement. This Amendment embodies the entire understanding between Landlord and Tenant with respect to its subject matter and can be changed only by an instrument in writing signed by Landlord and Tenant.
(c) Counterparts. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one in the same Amendment.
(d) Corporate and Partnership Authority. If Tenant is a corporation or partnership, or is comprised of either or both of them, each individual executing this Amendment for the corporation or partnership represents that he or she is duly authorized to execute and deliver this Amendment for the corporation or partnership and that this Amendment is binding upon the corporation or partnership in accordance with its terms.
(e) Attorneys' Fees. The provisions of the Lease respecting payment of attorneys' fees shall also apply to this Amendment.
"LANDLORD" "TENANT" CATELLUS DEVELOPMENT SYNETICS SOLUTIONS, INC., CORPORATION, a Delaware corporation an Oregon corporation By: Catellus Commercial Group, LLC, By: /s/ Greg Marvell a Delaware limited liability ------------------------------------ company Name: GREG MARVELL Its: Duly Authorized Agent Its: PRESIDENT By: By: /s/ Koki Nakamura --------------------------------- ------------------------------------ Name: Ted Antenucci Name: KOKI NAKAMURA Its: Executive Vice President Its: Chairman & CEO |
SYNETICS
WORK COST ESTIMATE FOR LEASED PREMISES
LOCATED AT 18870 NE RIVERSIDE PARKWAY, GRESHAM, OR
6/14/00 12/18/00 ------------- ------------- ARCHITECTURAL/ENGINEERING GROUP MACKENZIE/INTERFACE ENG. Architectural/Interiors $ 87,000.00 $ 87,000.00 Structural $ 27,000.00 $ 27,000.00 Mechanical/Electrical $ 132,000.00 $ 132,000.00 Reimbursable Expenses(prints, copying, faxing, mileage) $ 16,500.00 $ 16,500.00 Add. Design/Project mgmt. Fees(attached letter of 07/18/00) $ 24,220.00 $ 24,220.00 Interior design and finish services $ 9,100.00 Delete powder coat and metal fab. Misc. revisions $ 11,700.00 SUBTOTAL $ 286,720.00 $ 307,520.00 PRELIM. PERMIT FEES(ACTUAL FEES MAY VARY) Building $ 20,939.00 $ 20,939.00 Mechanical $ 6,176.00 $ 6,176.00 Plumbing $ 1,815.00 $ 1,930.00 Electrical $ 6,066.00 $ 5,427.00 Fire Alarm TBD TBD Low Voltage $ 43.00 $ 475.00 Fire Sprinklers $ 532.00 $ 533.00 Traffic Impact Fee- add. 2nd floor $ 19,373.00 $ 19,373.00 SUBTOTAL $ 54,944.00 $ 54,853.00 CDC ADMINISTRATIVE AND COORDINATION FEE 5% of design, permit and construct Tenant Improvement Work $ 286,817.00 $ 316,567.95 CONSTRUCTION COST FROM MCCORMACK PACIFIC $5,187,177.00 $5,217,821.00 Allowance for Powder Coat, Metal Fab and Mech Systems $ 200,000.00 N.A. Change order No. 1 Approved 8/24/00 $ 148,686.00 Change order No. 2 Approved 9/30/00 $ 344,934.00 Change order No. 3 Approved 10/26/00 $ 188,222.00 Change order No. 4 Approved 11/13/00 $ 20,643.00 Change order No. 5 Approved 11/28/00 $ (24,505.00) Contingency $ 259,358.00 $ 60,000.00 Testing and Inspections $ 7,500.00 $ 13,185.00 Subtotal $5,654,035.00 $5,968,986.00 POTENTIAL ADDITIONAL COST Front Entry Allowance (formerly carried at $100,000) By Synetics Misc. revisions still being estimated (Allowance) $ 33,000.00 Subtotal $ 33,000.00 Est. Total Work Cost: Design, permits, Const., CDC. Poten. Costs $6,282,516.00 $6,680,926.95 Synetics'$5MM prog. pay received and Catellus $1.2MM contribution ($6,200,000) Amount due per terms of lease $ 480,926.95 ------------- Partial progress payment for project work completed $ 420,927 ------------- Synetics to pay any remaining balance upon final const. accounting Approx. $ 60,000.00 ------------- Final costs should be done in early Feb.2001 |
EXHIBIT A
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) Beneficiary Metropolitan Life Insurance Company c/o Preston Gates and Ellis, LLP One Maritime Plaza, Suite 2400 San Francisco, California 94111 Attn: Susan Reid, Esq. ) Space above for Recorder's Use |
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement") is entered into as of the ________ day of March, 2001 by and among SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of Oregon, more particularly described in the attached Schedule 1 term "Property" herein means that real property together with all improvements (the "Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00) (the "Loan") as provided in a loan application (the "Loan Application"). The Loan is or will be evidenced by a promissory note (the "Note") which is or will be secured by a deed of trust encumbering the Property (the "Deed of Trust") with an assignment of rents. The Note, the Deed of Trust, this Agreement and all other documents and instruments identified in the Deed of Trust as "Loan Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December 15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the Improvements located within the Property and more particularly described in the Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among other things, to subordinate Tenant's rights under the Lease to the lien of the Loan Documents and to attorn to Beneficiary on the terms and conditions of this Agreement. Tenant is willing to agree to such subordination and attornment and other conditions, provided that Beneficiary agrees to a nondisturbance provision, all as set forth more fully below.
EXHIBIT I
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lieu on the Property prior and superior to the Lease, to the leasehold estate created by it, and to all rights and privileges of Tenant under it. The Lease and leasehold estate, together with all rights and privileges of Tenant under that Lease, are hereby unconditionally made subordinate to the lien of the Loan Documents in favor of Beneficiary. Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and the other Loan Documents. Tenant further declares, agrees and acknowledges that in making disbursements under the Loan Documents Beneficiary has no obligation or duty to, nor has Beneficiary represented that it will, see to the application of such proceeds by the person or persons to whom they are disbursed by Beneficiary, and any application or use of such proceeds for purposes other than those provided for in the Loan Documents shall not defeat the subordination made in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used herein, the term "Transfer of the Property" means any transfer of Borrower's interest in the Property by foreclosure, trustee's sale or other action or proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof. The term "Purchaser", as used herein, means any transferee, including Beneficiary, of the interest of Borrower as a result of any such Transfer of the Property and also includes any and all successors and assigns, including Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate the Lease or disturb Tenant in the possession and use of the Premises unless at the time of foreclosure Tenant is in significant default under the Lease or this Agreement beyond any applicable grace or cure periods, and Beneficiary or Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not have notice of the pre-foreclosure default, within 120 days of notice of the default that the Lease will be terminated by foreclosure because of such default. The nondisturbance herein granted is subject to Section 5 below. To the extent that the Lease is extinguished by law as a result of the foreclosure, a new lease shall automatically go into effect upon the same provisions as contained in the Lease, as modified by this Agreement, for the unexpired term of the Lease. This nondisturbance applies to any option to extend or renew the Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property should occur, Tenant shall and hereby does attorn to Purchaser, including Beneficiary if it should be the Purchaser, as the landlord under the Lease, and Tenant shall be bound to Purchaser under all of the terms, covenants and conditions of the Lease for the balance of the Lease term and any extensions or renewals of it which may then or later be in effect under any validly exercised extension or renewal option contained in the Lease, all with the same force and effect as if Purchaser had been the original landlord under the Lease. This attornment shall be effective and self-operative without the execution of any further instruments upon Purchaser's succeeding to the interest of the landlord under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to any existing or future right of Tenant, whether arising out of the Lease or otherwise, to exercise any option or right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the Property, any such purchase or expansion option or right of first refusal, whether now existing or in the future arising, shall terminate and be inapplicable to the Property notwithstanding the nondisturbance granted to Tenant in Section 3 above. If any option or right of first refusal to purchase is exercised prior to a Transfer of the Property, any title so acquired to all or any part of the Property shall be subject to the lien of the Loan Documents, which lien shall in no way be impaired by
EXHIBIT I
the exercise of such option or right of first refusal. Beneficiary specifically reserves all of its rights to enforce any accelerating transfer, due on sale, due on encumbrance or similar provision in the Deed of Trust or any other Loan Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure Default. Tenant shall send a copy of any notice of default or similar statement with respect to the Lease to Beneficiary at the same time such notice or statement is sent to Borrower. In the event of any act or omission by Borrower which would give Tenant the right to terminate the Lease or to claim a partial or total eviction, Tenant shall not exercise any such right or make any such claim until it has given Beneficiary written notice of such act or omission and has given Beneficiary either thirty (30) days to cure the default if the default is monetary or a reasonable time for Beneficiary to cure the default if the default is nonmonetary. Nothing in this Agreement, however, shall be construed as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall be deemed or construed to be an agreement by Beneficiary to perform any covenant of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary to a new owner, Beneficiary shall have no further liability under the Lease after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property shall have any obligation or liability beyond its interest in the Property. Purchaser shall not have any obligations or liability with respect to the completion of improvements which were part of the initial tenant improvements at the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease, without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or if it takes possession under the Deed of Trust, and any other Purchaser shall not (a) be liable for any damages or other relief attributable to any act or omission of any prior Landlord under the Lease including Borrower; or (b) be subject to any offset or defense which Tenant may have against any prior landlord under the Lease; or (c) be bound by any prepayment by Tenant of more than one month's installment of rent; or (d) be obligated for any security deposit not actually delivered to Purchaser; (e) be bound by any modification or amendment of or to the Lease unless the amendment or modification shall have been approved in writing by Beneficiary or (f) be liable to Tenant or any other party for any conflict between the provisions of the Lease and the provisions of any other lease affecting the Property which is not entered into by Purchaser; or (g) be liable with respect to any representation, warranty or indemnity not made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to Beneficiary that Schedule 2 accurately identifies the Lease and all amendments, supplements, side letters and other agreements and memoranda pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
(b) Tenant's Option Rights. Tenant has no right or option of any nature whatsoever, whether arising out of the Lease or otherwise, to purchase the Premises or the Property, or any interest or portion in or of either of them, to expand into other space in the Improvements or to extend or renew the term of the Lease, except as described in the attached Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has not used, generated, released, discharged, stored or disposed of any Hazardous Substances on, under, in or about the Property other than Hazardous Substances used in the ordinary and commercially reasonable course of Tenant's business in compliance with all applicable laws. Except for such legal and commercially reasonable use by Tenant, Tenant has no actual knowledge that any Hazardous Substance is present or has been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the Property. As used herein "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is similarly designated, classified or regulated under any federal, state or local law, regulation or ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and conditions of the parties' agreement regarding the subordination of the Lease to the Loan Documents, attornment, nondisturbance and the other matters contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other writings with respect to (a) such subordination (only to such extent, however, as would affect the priority between the Lease and the Loan Documents), including any provisions of the Lease which provide for the subordination of the Lease to a deed of trust or to a mortgage and (b) such attornment, non-disturbance and other matters contained herein. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including the Lease, the terms, conditions and provisions of this Agreement shall prevail. This Agreement may not be modified or amended except by a written agreement signed by the parties or their respective successors in interest. This Agreement may be executed in counterparts, each of which is an original but all of which shall constitute one and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and shall be given by personal delivery, overnight receipted courier or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below. Notices shall be effective upon receipt (or on the date when proper delivery is refused). Addresses for notices may be changed by any party by notice to all other parties in accordance with this Section. Service of any notice on any one Borrower shall be effective service on Borrower for all purposes.
To Beneficiary: Metropolitan Life Insurance Company 400 South El Camino Real, 8th Floor San Mateo, California 94402 Attn: Vice President-Real Estate Investments To Borrower: Catellus Development Corporation 201 Mission Street San Francisco, California 94105 Attn: Asset Management |
EXHIBIT I
To Tenant: Synetics Solutions Inc. 18870 NE Riverside Pkwy. Tigard, Oregon 97224 Attn: Koki Nakamura |
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is commenced which arises out of or relates to this Agreement, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys' fees, including the costs for any legal services by in-house counsel, in addition to costs and expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Agreement is governed by the laws of the State of Oregon without regard to the choice of law rules of that State. This Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement by Beneficiary. As used herein, the word "include(s)" means "inciude(s) without limitation," and the word "including" means "including but not limited to." Beneficiary, at its sole discretion, may but shall not be obligated to record this Agreement.
EXHIBIT I
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC., an Oregon corporation By: /s/ Koki Nakamura ------------------------------------ Name: Koki Nakamura Title: CEO & Chairman By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BORROWER" CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation By: Catellus Commercial Group, LLC, a Delaware limited liability company Its: Duly Authorized Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BENEFICIARY" Metropolitan Life Insurance Company, a New York corporation By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- |
EXHIBIT I
STATE OF Oregon ) )ss. COUNTY OF Multnomah ) |
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said state, personally appeared Koki Nakamura, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver ---------------------------------------- Notary Public in and for said State |
(STAMP)
(SEAL)
STATE OF _________________ ) )ss. COUNTY OF _________________ ) |
On _____________________, before me, _____________________________________, a Notary Public in and for said state, personally appeared _____________________ ___________________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF _________________ ) )ss. COUNTY OF _________________ ) |
On ______________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _________________ ) )ss. COUNTY OF _________________ ) |
On ____________, before me, ____________________, a Notary Public in and for said state, personally appeared __________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF _________________ ) )ss. COUNTY OF _________________ ) |
On _________________, before me, _____________________________, a Notary Public in and for said state, personally appeared ___________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _________________ ) )ss. COUNTY OF _________________ ) |
On ___________________, before me, ________________________________, a Notary Public in and for said state, personally appeared _______________________ ________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) Beneficiary Metropolitan Life Insurance Company c/o Preston Gates and Ellis, LLP One Maritime Plaza, Suite 2400 San Francisco, California 94111 Attn: Susan Reid, Esq. ) Space above for Recorder's Use |
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement") is entered into as of the ______ day of March, 2001 by and among SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of Oregon, more particularly described in the attached Schedule 1 term "Property" herein means that real property together with all improvements (the "Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00) (the "Loan") as provided in a loan application (the "Loan Application"). The Loan is or will be evidenced by a promissory note (the "Note") which is or will be secured by a deed of trust encumbering the Property (the "Deed of Trust") with an assignment of rents. The Note, the Deed of Trust, this Agreement and all other documents and instruments identified in the Deed of Trust as "Loan Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December 15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the Improvements located within the Property and more particularly described in the Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among other things, to subordinate Tenant's rights under the Lease to the lien of the Loan Documents and to attorn to Beneficiary on the terms and conditions of this Agreement. Tenant is willing to agree to such subordination and attornment and other conditions, provided that Beneficiary agrees to a nondisturbance provision, all as set forth more fully below.
EXHIBIT I
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to the Lease, to the leasehold estate created by it, and to all rights and privileges of Tenant under it. The Lease and leasehold estate, together with all rights and privileges of Tenant under that Lease, are hereby unconditionally made subordinate to the lien of the Loan Documents in favor of Beneficiary. Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and the other Loan Documents. Tenant further declares, agrees and acknowledges that in making disbursements under the Loan Documents Beneficiary has no obligation or duty to, nor has Beneficiary represented that it will, see to the application of such proceeds by the person or persons to whom they are disbursed by Beneficiary, and any application or use of such proceeds for purposes other than those provided for in the Loan Documents shall not defeat the subordination made in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used herein, the term "Transfer of the Property" means any transfer of Borrower's interest in the Property by foreclosure, trustee's sale or other action or proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof. The term "Purchaser", as used herein, means any transferee, including Beneficiary, of the interest of Borrower as a result of any such Transfer of the Property and also includes any and all successors and assigns, including Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate the Lease or disturb Tenant in the possession and use of the Premises unless at the time of foreclosure Tenant is in significant default under the Lease or this Agreement beyond any applicable grace or cure periods, and Beneficiary or Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not have notice of the pre-foreclosure default, within 120 days of notice of the default that the Lease will be terminated by foreclosure because of such default. The nondisturbance herein granted is subject to Section 5 below. To the extent that the Lease is extinguished by law as a result of the foreclosure, a new lease shall automatically go into effect upon the same provisions as contained in the Lease, as modified by this Agreement, for the unexpired term of the Lease. This nondisturbance applies to any option to extend or renew the Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property should occur, Tenant shall and hereby does attorn to Purchaser, including Beneficiary if it should be the Purchaser, as the landlord under the Lease, and Tenant shall be bound to Purchaser under all of the terms, covenants and conditions of the Lease for the balance of the Lease term and any extensions or renewals of it which may then or later be in effect under any validly exercised extension or renewal option contained in the Lease, all with the same force and effect as if Purchaser had been the original landlord under the Lease. This attornment shall be effective and self-operative without the execution of any further instruments upon Purchaser's succeeding to the interest of the landlord under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to any existing or future right of Tenant, whether arising out of the Lease or otherwise, to exercise any option or right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the Property, any such purchase or expansion option or right of first refusal, whether now existing or in the future arising, shall terminate and be inapplicable to the Property notwithstanding the nondisturbance granted to Tenant in Section 3 above. If any option or right of first refusal to purchase is exercised prior to a Transfer of the Property, any title so acquired to all or any part of the Property shall be subject to the lien of the Loan Documents, which lien shall in no way be impaired by
EXHIBIT I
the exercise of such option or right of first refusal. Beneficiary specifically reserves all of its rights to enforce any accelerating transfer, due on sale, due on encumbrance or similar provision in the Deed of Trust or any other Loan Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure Default. Tenant shall send a copy of any notice of default or similar statement with respect to the Lease to Beneficiary at the same time such notice or statement is sent to Borrower. In the event of any act or omission by Borrower which would give Tenant the right to terminate the Lease or to claim a partial or total eviction, Tenant shall not exercise any such right or make any such claim until it has given Beneficiary written notice of such act or omission and has given Beneficiary either thirty (30) days to cure the default if the default is monetary or a reasonable time for Beneficiary to cure the default if the default is nonmonetary. Nothing in this Agreement, however, shall be construed as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall be deemed or construed to be an agreement by Beneficiary to perform any covenant of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary to a new owner, Beneficiary shall have no further liability under the Lease after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property shall have any obligation or liability beyond its interest in the Property. Purchaser shall not have any obligations or liability with respect to the completion of improvements which were part of the initial tenant improvements at the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease, without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or if it takes possession under the Deed of Trust, and any other Purchaser shall not (a) be liable for any damages or other relief attributable to any act or omission of any prior Landlord under the Lease including Borrower; or (b) be subject to any offset or defense which Tenant may have against any prior landlord under the Lease; or (c) be bound by any prepayment by Tenant of more than one month's installment of rent; or (d) be obligated for any security deposit not actually delivered to Purchaser; (e) be bound by any modification or amendment of or to the Lease unless the amendment or modification shall have been approved in writing by Beneficiary or (f) be liable to Tenant or any other party for any conflict between the provisions of the Lease and the provisions of any other lease affecting the Property which is not entered into by Purchaser; or (g) be liable with respect to any representation, warranty or indemnity not made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to Beneficiary that Schedule 2 accurately identifies the Lease and all amendments, supplements, side letters and other agreements and memoranda pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
(b) Tenant's Option Rights. Tenant has no right or option of any nature whatsoever, whether arising out of the Lease or otherwise, to purchase the Premises or the Property, or any interest or portion in or of either of them, to expand into other space in the Improvements or to extend or renew the term of the Lease, except as described in the attached Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has not used, generated, released, discharged, stored or disposed of any Hazardous Substances on, under, in or about the Property other than Hazardous Substances used in the ordinary and commercially reasonable course of Tenant's business in compliance with all applicable laws. Except for such legal and commercially reasonable use by Tenant, Tenant has no actual knowledge that any Hazardous Substance is present or has been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the Property. As used herein "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is similarly designated, classified or regulated under any federal, state or local law, regulation or ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and conditions of the parties' agreement regarding the subordination of the Lease to the Loan Documents, attornment, nondisturbance and the other matters contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other writings with respect to (a) such subordination (only to such extent, however, as would affect the priority between the Lease and the Loan Documents), including any provisions of the Lease which provide for the subordination of the Lease to a deed of trust or to a mortgage and (b) such attornment, non-disturbance and other matters contained herein. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including the Lease, the terms, conditions and provisions of this Agreement shall prevail. This Agreement may not be modified or amended except by a written agreement signed by the parties or their respective successors in interest. This Agreement may be executed in counterparts, each of which is an original but all of which shall constitute one and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and shall be given by personal delivery, overnight receipted courier or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below. Notices shall be effective upon receipt (or on the date when proper delivery is refused). Addresses for notices may be changed by any party by notice to all other parties in accordance with this Section. Service of any notice on any one Borrower shall be effective service on Borrower for all purposes.
To Beneficiary: Metropolitan Life Insurance Company 400 South El Camino Real, 8th Floor San Mateo, California 94402 Attn: Vice President-Real Estate Investments To Borrower: Catellus Development Corporation 201 Mission Street San Francisco, California 94105 Attn: Asset Management |
EXHIBIT I
To Tenant: Synetics Solutions Inc. 18870 NE Riverside Pkwy. Tigard, Oregon 97224 Attn: Koki Nakamura |
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is commenced which arises out of or relates to this Agreement, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys' fees, including the costs for any legal services by in-house counsel, in addition to costs and expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Agreement is governed by the laws of the State of Oregon without regard to the choice of law rules of that State. This Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement by Beneficiary. As used herein, the word "include(s)" means "include(s) without limitation," and the word "including" means "including but not limited to." Beneficiary, at its sole discretion, may but shall not be obligated to record this Agreement.
EXHIBIT I
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC., an Oregon corporation By: /s/ Koki Nakamura ------------------------------------ Name: KOKI NAKAMURA Title: CEO & Chairman By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BORROWER" CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation By: Catellus Commercial Group, LLC, a Delaware limited liability company Its: Duly Authorized Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BENEFICIARY" Metropolitan Life Insurance Company, a New York corporation By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- |
EXHIBIT I
STATE OF Oregon )
)ss.
COUNTY OF Multnomah )
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said state, personally appeared Koki Nakamura, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver ---------------------------------------- Notary Public in and for said State |
(STAMP)
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF __________ )
)ss.
COUNTY OF _________ )
On ___________, before me, ___________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
TENANT ESTOPPEL CERTIFICATE
__________, 2001
Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402
Gentlemen:
The undersigned, Synetics Solutions, Inc., an Oregon corporation ("Tenant"), as tenant under a lease (the "Lease") of certain premises dated July 20, 2000 executed by Tenant and Catellus Development Corporation, a Delaware corporation, ("Landlord"), does hereby state, declare, represent and warrant as follows:
1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
First Amendment to Lease dated December 19, 2000.
2. Tenant has accepted possession of the premises demised under the Lease, and all items of an executory nature have been completed under the terms of the Lease, including, but not limited to, completion of construction of the demised premises (and all other improvements required under the Lease) in accordance with applicable plans and specifications and within the time periods set forth in the Lease and otherwise in accordance with the Lease, and payment of any improvement allowance or other funds owing by Landlord to Tenant. Tenant further acknowledges that the term commenced on January 1, 2001 and shall expire on December 31, 2010 unless sooner terminated or extended in accordance with the terms of the Lease.
3. No default or event that with the passing of time or the giving of notice, or both, would constitute a default (referred to herein collectively as a "default") on the part of the undersigned exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of the undersigned.
4. No default on the part of Landlord exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of Landlord.
5. Tenant has no option or right to purchase the property of which the premises are a part, or any part thereof.
6. No rentals are accrued and unpaid under the Lease.
7. No prepayments of rentals due under the Lease have been made and no security or deposits as security have been made thereunder, except as set forth in the Lease.
8. The undersigned has no defense as to its obligations under the Lease and claims no setoff or counterclaim against Landlord.
9. The undersigned has not received notice of any assignment, hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the rents or other amounts payable thereunder.
10. The undersigned agrees to notify you of any default on the part of Landlord under the Lease which would entitle the undersigned to cancel the Lease or to abate the rent payable thereunder, and further agrees that, notwithstanding any provisions of the Lease, no notice or cancellation thereof shall be effective unless you have received said notice and have failed within thirty (30) days after the expiration of the cure period provided to Landlord under the Lease to cure or commence to cure the default which gave rise to the notice of cancellation.
11. The undersigned understands and acknowledges that you are about to make a loan to Landlord and receive as part of the security for such loan (i) a Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee interest in the property of which the leased premises are a portion and the rents, issues and profits of the Lease and (ii) an Assignment of Leases which affects the Lease, and that you are relying upon the representations and warranties contained herein in making such loan.
Synetics Solutions, Inc., An Oregon corporation
By /s/ Koki Nakamura ------------------------------------- Name: KOKI NAKAMURA Its: CEO & Chairman |
EXHIBIT A
TO TENANT ESTOPPEL CERTIFICATE
Copy of Lease and Amendments to Lease
TENANT ESTOPPEL CERTIFICATE
__________, 2001
Metropolitan Life Insurance Company
400 S. El Camino Real, 8th Floor
San Mateo, California 94402
Gentlemen:
The undersigned, Synetics Solutions, Inc., an Oregon corporation ("Tenant"), as tenant under a lease (the "Lease") of certain premises dated December 15, 2000 executed by Tenant and Catellus Development Corporation, a Delaware corporation, ("Landlord"), does hereby state, declare, represent and warrant as follows:
1. The copy of the Lease attached hereto as Exhibit A is a true and
correct copy of the Lease and the Lease is in full force and effect and has not
been amended, supplemented or changed, except as follows [if none, so state]:
None
2. Tenant has accepted possession of the premises demised under the Lease, and all items of an executory nature have been completed under the terms of the Lease, including, but not limited to, completion of construction of the demised premises (and all other improvements required under the Lease) in accordance with applicable plans and specifications and within the time periods set forth in the Lease and otherwise in accordance with the Lease, and payment of any improvement allowance or other funds owing by Landlord to Tenant. Tenant further acknowledges that the term commenced on January 1, 2001 and shall expire on December 31, 2011 unless sooner terminated or extended in accordance with the terms of the Lease.
3. No default or event that with the passing of time or the giving of notice, or both, would constitute a default (referred to herein collectively as a "default") on the part of the undersigned exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of the undersigned.
4. No default on the part of Landlord exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of Landlord.
5. Tenant has no option or right to purchase the property of which the premises are a part, or any part thereof.
6. No rentals are accrued and unpaid under the Lease.
7. No prepayments of rentals due under the Lease have been made and no security or deposits as security have been made thereunder, except as set forth in the Lease.
8. The undersigned has no defense as to its obligations under the Lease and claims no setoff or counterclaim against Landlord.
9. The undersigned has not received notice of any assignment, hypothecation, mortgage, or pledge of Landlord's interest in the Lease or the rents or other amounts payable thereunder.
10. The undersigned agrees to notify you of any default on the part of Landlord under the Lease which would entitle the undersigned to cancel the Lease or to abate the rent payable thereunder, and further agrees that, notwithstanding any provisions of the Lease, no notice or cancellation thereof shall be effective unless you have received said notice and have failed within thirty (30) days after the expiration of the cure period provided to Landlord under the Lease to cure or commence to cure the default which gave rise to the notice of cancellation.
11. The undersigned understands and acknowledges that you are about to make a loan to Landlord and receive as part of the security for such loan (i) a Deed of Trust, Security Agreement and Fixture Filing encumbering Landlord's fee interest in the property of which the leased premises are a portion and the rents, issues and profits of the Lease and (ii) an Assignment of Leases which affects the Lease, and that you are relying upon the representations and warranties contained herein in making such loan.
Synetics Solutions. Inc., An Oregon corporation
By /s/ Koki Nakamura ------------------------------------- Name: KOKI NAKAMURA Its: CEO & Chairman |
EXHIBIT A
TO TENANT ESTOPPEL CERTIFICATE
Copy of Lease and Amendments to Lease
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) Beneficiary Metropolitan Life Insurance Company c/o Preston Gates and Ellis, LLP One Maritime Plaza, Suite 2400 San Francisco, California 94111 Attn: Susan Reid, Esq. ) Space above for Recorder's Use |
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement") is entered into as of the __________ day of March, 2001 by and among SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"), Catellus Development Corporation, a Delaware corporation ("Borrower") and Metropolitan Life Insurance Company (Beneficiary).
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of Oregon, more particularly described in the attached Schedule 1 term "Property" herein means that real property together with all improvements (the "Improvements") located on it.
B. Beneficiary has made or agreed to make a loan to Borrower in the principal amount of Two Hundred Million and no/100 Dollars ($200,000,000.00) (the "Loan") as provided in a loan application (the "Loan Application"). The Loan is or will be evidenced by a promissory note (the "Note") which is or will be secured by a deed of trust encumbering the Property (the "Deed of Trust") with an assignment of rents. The Note, the Deed of Trust, this Agreement and all other documents and instruments identified in the Deed of Trust as "Loan Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated December 15, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the Improvements located within the Property and more particularly described in the Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among other things, to subordinate Tenant's rights under the Lease to the lien of the Loan Documents and to attorn to Beneficiary on the terms and conditions of this Agreement. Tenant is willing to agree to such subordination and attornment and other conditions, provided that Beneficiary agrees to a nondisturbance provision, all as set forth more fully below.
EXHIBIT I
AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to the Lease, to the leasehold estate created by it, and to all rights and privileges of Tenant under it. The Lease and leasehold estate, together with all rights and privileges of Tenant under that Lease, are hereby unconditionally made subordinate to the lien of the Loan Documents in favor of Beneficiary. Tenant consents to Borrower and Beneficiary entering into the Deed of Trust and the other Loan Documents. Tenant further declares, agrees and acknowledges that in making disbursements under the Loan Documents Beneficiary has no obligation or duty to, nor has Beneficiary represented that it will, see to the application of such proceeds by the person or persons to whom they are disbursed by Beneficiary, and any application or use of such proceeds for purposes other than those provided for in the Loan Documents shall not defeat the subordination made in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used herein, the term "Transfer of the Property" means any transfer of Borrower's interest in the Property by foreclosure, trustee's sale or other action or proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof. The term "Purchaser", as used herein, means any transferee, including Beneficiary, of the interest of Borrower as a result of any such Transfer of the Property and also includes any and all successors and assigns, including Beneficiary, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate the Lease or disturb Tenant in the possession and use of the Premises unless at the time of foreclosure Tenant is in significant default under the Lease or this Agreement beyond any applicable grace or cure periods, and Beneficiary or Purchaser so notifies Tenant in writing by the later of (i) 120 days prior to or after the Transfer of the Property, or (ii) if Beneficiary and Purchaser did not have notice of the pre-foreclosure default, within 120 days of notice of the default that the Lease will be terminated by foreclosure because of such default. The nondisturbance herein granted is subject to Section 5 below. To the extent that the Lease is extinguished by law as a result of the foreclosure, a new lease shall automatically go into effect upon the same provisions as contained in the Lease, as modified by this Agreement, for the unexpired term of the Lease. This nondisturbance applies to any option to extend or renew the Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property should occur, Tenant shall and hereby does attorn to Purchaser, including Beneficiary if it should be the Purchaser, as the landlord under the Lease, and Tenant shall be bound to Purchaser under all of the terms, covenants and conditions of the Lease for the balance of the Lease term and any extensions or renewals of it which may then or later be in effect under any validly exercised extension or renewal option contained in the Lease, all with the same force and effect as if Purchaser had been the original landlord under the Lease. This attornment shall be effective and self-operative without the execution of any further instruments upon Purchaser's succeeding to the interest of the landlord under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to any existing or future right of Tenant, whether arising out of the Lease or otherwise, to exercise any option or right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the Property, any such purchase or expansion option or right of first refusal, whether now existing or in the future arising, shall terminate and be inapplicable to the Property notwithstanding the nondisturbance granted to Tenant in Section 3 above. If any option or right of first refusal to purchase is exercised prior to a Transfer of the Property, any title so acquired to all or any part of the Property shall be subject to the lien of the Loan Documents, which lien shall in no way be impaired by
EXHIBIT I
the exercise of such option, or right of first refusal. Beneficiary specifically reserves all of its rights to enforce any accelerating transfer, due on sale, due on encumbrance or similar provision in the Deed of Trust or any other Loan Document.
6. Notices of Default; Material Notices; Beneficiary's Rights to Cure Default. Tenant shall send a copy of any notice of default or similar statement with respect to the Lease to Beneficiary at the same time such notice or statement is sent to Borrower. In the event of any act or omission by Borrower which would give Tenant the right to terminate the Lease or to claim a partial or total eviction, Tenant shall not exercise any such right or make any such claim until it has given Beneficiary written notice of such act or omission and has given Beneficiary either thirty (30) days to cure the default if the default is monetary or a reasonable time for Beneficiary to cure the default if the default is nonmonetary. Nothing in this Agreement, however, shall be construed as a promise or undertaking by Beneficiary to cure any default of Borrower.
7. Limitation on Beneficiary's Performance. Nothing in this Agreement shall be deemed or construed to be an agreement by Beneficiary to perform any covenant of Borrower as landlord under the Lease. Tenant agrees that if Beneficiary becomes Purchaser then, upon subsequent transfer of the Property by Beneficiary to a new owner, Beneficiary shall have no further liability under the Lease after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property shall have any obligation or liability beyond its interest in the Property. Purchaser shall not have any obligations or liability with respect to the completion of improvements which were part of the initial tenant improvements at the commencement of the Lease.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease, without Beneficiary's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except as expressly permitted in the Lease.
10. Beneficiary Not Obligated. Beneficiary, if it becomes the Purchaser or if it takes possession under the Deed of Trust, and any other Purchaser shall not (a) be liable for any damages or other relief attributable to any act or omission of any prior Landlord under the Lease including Borrower, or (b) be subject to any offset or defense which Tenant may have against any prior landlord under the Lease; or (c) be bound by any prepayment by Tenant of more than one month's installment of rent; or (d) be obligated for any security deposit not actually delivered to Purchaser; (e) be bound by any modification or amendment of or to the Lease unless the amendment or modification shall have been approved in writing by Beneficiary or (f) be liable to Tenant or any other party for any conflict between the provisions of the Lease and the provisions of any other lease affecting the Property which is not entered into by Purchaser; or (g) be liable with respect to any representation, warranty or indemnity not made by Purchaser. Borrower agrees to deliver to Purchaser any security deposits in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to Beneficiary that Schedule 2 accurately identifies the Lease and all amendments, supplements, side letters and other agreements and memoranda pertaining to the Lease, the leasehold and/or the Premises.
EXHIBIT I
(b) Tenant's Option Rights. Tenant has no right or option of any nature whatsoever, whether arising out of the Lease or otherwise, to purchase the Premises or the Property, or any interest or portion in or of either of them, to expand into other space in the Improvements or to extend or renew the term of the Lease, except as described in the attached Schedule 3.
(c) No Default. As of the date of (his Agreement, Tenant represents
and warrants that to the best of Tenant's knowledge there exist no events
of default or events that with notice or the passage of time or both would
be events of default under the Lease on either the Tenant's part or the
Borrower's, nor is there any right of offset against any of Tenant's
obligations under the Lease, except as described in the attached Schedule
4. Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has not used, generated, released, discharged, stored or disposed of any Hazardous Substances on, under, in or about the Property other than Hazardous Substances used in the ordinary and commercially reasonable course of Tenant's business in compliance with all applicable laws. Except for such legal and commercially reasonable use by Tenant, Tenant has no actual knowledge that any Hazardous Substance is present or has been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the Property. As used herein "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is similarly designated, classified or regulated under any federal, state or local law, regulation or ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and conditions of the parties' agreement regarding the subordination of the Lease to the Loan Documents, attornment, nondisturbance and the other matters contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other writings with respect to (a) such subordination (only to such extent, however, as would affect the priority between the Lease and the Loan Documents), including any provisions of the Lease which provide for the subordination of the Lease to a deed of trust or to a mortgage and (b) such attornment, non-disturbance and other matters contained herein. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including the Lease, the terms, conditions and provisions of this Agreement shall prevail. This Agreement may not be modified or amended except by a written agreement signed by the parties or their respective successors in interest. This Agreement may be executed in counterparts, each of which is an original but all of which shall constitute one and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and shall be given by personal delivery, overnight receipted courier or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below. Notices shall be effective upon receipt (or on the date when proper delivery is refused). Addresses for notices may be changed by any party by notice to all other parties in accordance with this Section. Service of any notice on any one Borrower shall be effective service on Borrower for all purposes.
To Beneficiary:
Metropolitan Life Insurance Company 400 South El Camino Real, 8th Floor San Mateo, California 94402 Attn: Vice President-Real Estate Investments To Borrower: Catellus Development Corporation 201 Mission Street San Francisco, California 94105 Attn: Asset Management |
EXHIBIT I
To Tenant: Synetics Solutions Inc. 18870 NE Riverside Pkwy. Tigard, Oregon 97224 Attn: Koki Nakamura |
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is commenced which arises out of or relates to this Agreement, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys' fees, including the costs for any legal services by in-house counsel, in addition to costs and expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Agreement is governed by the laws of the State of Oregon without regard to the choice of law rules of that State. This Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement by Beneficiary. As used herein, the word "include(s)" means "include(s) without limitation," and the word "including" means "including but not limited to." Beneficiary, at its sole discretion, may but shall not be obligated to record this Agreement.
EXHIBIT I
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC., an Oregon corporation By: /s/ Koki Nakamura ------------------------------------ Name: KOKI NAKAMURA Title: CEO & Chairman By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BORROWER" CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation By: Catellus Commercial Group, LLC, a Delaware limited liability company Its: Duly Authorized Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BENEFICIARY" Metropolitan Life Insurance Company, a New York corporation By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- |
EXHIBIT I
STATE OF Oregon ) ) ss. COUNTY OF Multnomah ) |
On March 27, 2001, before me, Sarah Culver, a Notary Public in and for said state, personally appeared Koki Nakamura, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Sarah M. Culver ---------------------------------------- Notary Public in and for said State (STAMP) (SEAL) |
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _____________________, before me, _______________________, a Notary Public in and for said state, personally appeared __________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _______________________, before me, _____________________, a Notary Public in and for said state, personally appeared ______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _______________)
) ss.
COUNTY OF ______________)
On _______________________, before me, _______________________, a Notary Public in and for said state, personally appeared _______________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF ___________________________ )
)ss.
COUNTY OF __________________________ )
On _______________, before me, ____________________, a Notary Public in and for said state, personally appeared ________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF ___________________________ )
)ss.
COUNTY OF __________________________ )
On _________________, before me, __________________, a Notary Public in and for said state, personally appeared ________________________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1) Multi-Tenant Industrial Triple Net Lease dated December 15, 2000 between Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
1) One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
SCHEDULE 5
MODIFIED LEASE TERMS
None
SCHEDULE 5 to EXHIBIT I
MULTI-TENANT INDUSTRIAL TRIPLE NET LEASE
Effective Date: December 15, 2000
(the date set forth below Landlord's signature)
BASIC LEASE INFORMATION
Landlord: CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation Landlord's Address For 201 Mission Street Notice: San Francisco, California 94105 Attn: Asset Management & Office of General Counsel Telephone: (415)974-4500 Fax: (415)974-4687 With a Copy to: CB Richard Ellis 1300 SW 5th Avenue, Suite 2600 Portland, Oregon 97201 Attn: Property Management Telephone: (503)221-1900 Fax: (503)221-4873 Landlord's Address For File # 1918 Payment of Rent: P.O. Box 61000 San Francisco, California 94161-1918 Tenant: SYNETICS SOLUTIONS INC., an Oregon corporation Tenant's Address For 7440 S.W. Bonita Avenue Notice: Tigard, Oregon 97224 Attn: Koki Nakamura Telephone: (503) 670-9934 Fax: (503)639-2264 Project: Those portions of "Southshore Corporate Park" located in the City of Gresham, County of Multnomah, State of Oregon. A conceptual plot plan of Southshore Corporate Park (the "Site Plan") is attached hereto as Exhibit A-1 (which indicates thereon the approximate location of the Premises and other parcels of land within Southshore Corporate Park as presently contemplated by Landlord). Tenant acknowledges that Exhibit A-1 is intended to be used only for illustrative purposes and nothing contained therein shall constitute a representation or warranty by Landlord. Land: Approximately 10.2 acre parcel of land shown on the Site Plan attached hereto as Exhibit A-1. |
Building: An office/manufacturing/warehouse building located on the Land and containing approximately 180,000 rentable square feet. Premises: Approximately 44,930 rentable square feet located within the Building as shown on Exhibit A-2. Premises Address: Southshore Corporate Park - Building C Street: 4293 NE 189th Avenue City and State: Gresham, Oregon 97230 Term: One Hundred Twenty (120) months Possession Date: December 15, 2000 Commencement Date: January 1, 2001 Monthly Base Rent: Monthly Months Base Rent ------- ------------ 1-24 $16,399.45 25-48 $17,383.42 49-72 $18,462.42 73-96 $19,532.00 97-120 $20,703.93 121-144+ $21,946.16 145-168+ $23,262.93 169-180+ $24,658.71 + Subject to the provisions of the Option to Extend set forth in Section 19 of the Addendum to Lease Tenant's Share of Building 24.96% Operating Expenses: Tenant's Share of Project 10.01% Operating Expenses: Letter of Credit: $98,394.00, subject to adjustment pursuant to Section 3.3 Broker: Landlord's Broker: CB Richard Ellis Tenant's Broker: Macadam Forbes, Inc. |
Lease Year: Shall refer to each twelve (12) month period during the Term commencing on the Commencement Date. Permitted Uses: The manufacturing, warehousing and distribution of mini-clean room environment equipment and other related activities, together with collateral office space, all to the extent consistent with the character of the Project as a first-class industrial project. No other uses shall be permitted without the prior written consent of Landlord, which may be given or withheld in Landlord's sole and absolute discretion. In no event shall any use of the Premises violate the Prohibited Uses set forth in Exhibit E attached hereto or the terms of the CC&Rs (defined in Section 11 of the Lease) and all uses of the Premises shall at all times comply with and be consistent with all of the provisions of this Lease (including, without limitation, the Rules and Regulations attached hereto as Exhibit F) and applicable law. Parking Spaces: Forty-Eight (48) unreserved parking spaces, subject to the terms of Section 1.4 Rentable Square Feet of Shall mean (a) the total square footage of the Premises: Premises, measured from the outside of the exterior walls of the Building and to the center of any demising walls separating the Premises from other premises in the Building, plus (b) a pro rata share of any common utility rooms and/or electrical vaults located in the Building that do not exclusively serve the Premises or other premises leased to other tenants of the Building (which pro rata share shall be the same percentage as Tenant's Share of Building Operating Expenses). Rentable Square Feet of Shall mean the total square footage of the Building: Building, measured from the outside of the exterior walls of the Building to the center thereof. Option to Extend: One (1) five (5) year Option to Extend in accordance with Section 19 in the Addendum to Lease. |
ADDENDUM
EXHIBITS
A-1 Site Plan A-2 Premises B Work Letter C Commencement Date Memorandum D Insurance Certificate E Prohibited Uses F Rules and Regulations G Requirements for Improvements or Alterations by Tenant H Estoppel Certificate I Subordination, Non-Disturbance and Attornment Agreement J Arbitration Procedures K Form of Letter of Credit |
TABLE OF CONTENTS
PAGE ---- 1. PREMISES .......................................................... 1 1.1 Premises ................................................... 1 1.2 Common Area ................................................ 1 1.3 Reserved Rights ............................................ 1 1.4 Parking .................................................... 1 2. TERM .............................................................. 2 2.1 Commencement Date .......................................... 2 2.2 Intentionally Deleted ...................................... 2 2.3 Early Entry ................................................ 2 3. RENT .............................................................. 2 3.1 Rent ....................................................... 2 3.2 Late Charge and Interest ................................... 3 3.3 Letter of Credit ........................................... 3 4. UTILITIES ......................................................... 4 5. TAXES ............................................................. 4 5.1 Real Property Taxes ........................................ 4 5.2 Definition of Real Property Taxes .......................... 4 5.3 Personal Property Taxes .................................... 5 6. OPERATING EXPENSES ................................................ 5 6.1 Operating Expenses ......................................... 5 6.2 Definition of Operating Expenses ........................... 5 7. ESTIMATED EXPENSES ................................................ 6 7.1 Payment .................................................... 6 7.2 Adjustment ................................................. 6 7.3 Audit Right ................................................ 6 8. INSURANCE ......................................................... 7 8.1 Landlord ................................................... 7 8.2 Tenant ..................................................... 7 8.3 General .................................................... 8 8.4 Indemnity .................................................. 8 8.5 Exemption of Landlord from Liability ....................... 9 9. REPAIRS AND MAINTENANCE ........................................... 9 9.1 Tenant ..................................................... 9 9.2 Landlord ................................................... 10 9.3 Landlord's Failure to Perform .............................. 10 10. ALTERATIONS ....................................................... 11 10.1 Trade Fixtures; Alterations ................................ 11 10.2 Damage; Removal ............................................ 11 10.3 Liens ...................................................... 12 10.4 Standard of Work ........................................... 12 11. USE ............................................................... 12 12. ENVIRONMENTAL MATTERS ............................................. 13 12.1 Hazardous Materials ........................................ 13 12.2 Tenant's Indemnification ................................... 13 12.3 Pre-existing Conditions and Indemnification ................ 14 13. DAMAGE AND DESTRUCTION ............................................ 14 13.1 Casualty ................................................... 14 13.2 Tenant's Fault ............................................. 16 |
PAGE ---- 13.3 Uninsured Casualty ......................................... 16 13.4 Waiver ..................................................... 16 14. EMINENT DOMAIN .................................................... 16 14.1 Total Condemnation ......................................... 16 14.2 Partial Condemnation ....................................... 16 14.3 Award ...................................................... 17 14.4 Temporary Condemnation ..................................... 17 15. DEFAULT ........................................................... 17 15.1 Events of Defaults ......................................... 17 15.2 Remedies ................................................... 17 15.3 Cumulative ................................................. 18 16. ASSIGNMENT AND SUBLETTING ......................................... 19 17. ESTOPPEL, ATTORNMENT AND SUBORDINATION ............................ 19 17.1 Estoppel ................................................... 19 17.2 Subordination .............................................. 20 17.3 Attornment ................................................. 20 18. MISCELLANEOUS ..................................................... 20 18.1 General .................................................... 20 18.2 Signs ...................................................... 21 18.3 Waiver ..................................................... 21 18.4 Financial Statements ....................................... 21 18.5 Limitation of Liability .................................... 22 18.6 Notices .................................................... 22 18.7 Brokerage Commission ....................................... 22 18.8 Authorization .............................................. 22 18.9 Holding Over; Surrender .................................... 22 18.10 Join and Several ........................................... 23 18.11 Convenants and Conditions .................................. 23 18.12 Auctions ................................................... 23 18.13 Consents ................................................... 23 18.14 Force Majeure .............................................. 23 18.15 Mortgage Protection ........................................ 23 18.16 Hazardous Substance Disclosure ............................. 24 18.17 ADA Compliance ............................................. 24 18.18 Addenda .................................................... 24 |
1. PREMISES
1.1 Premises. Landlord hereby leases to Tenant that portion of the Building as shown on Exhibit A-2 attached hereto (the "Premises"), but excluding the Common Area (defined below) and any other portion of the Building, the Land and/or the Project. Tenant has determined that the Premises are acceptable for Tenant's use and Tenant acknowledges that, except as set forth in the Work Letter attached hereto as Exhibit B (the "Work Letter"), neither Landlord nor any broker or agent has made any representations or warranties in connection with the physical condition of the Premises or their fitness for Tenant's use upon which Tenant has relied directly or indirectly for any purpose. By taking possession of the Premises, Tenant accepts the Premises "AS-IS" and waives all claims of defect in the Premises, except as set forth herein or in the Work Letter. Tenant shall be responsible for confirming the street address of Premises with the City.
1.2 Common Area. Tenant may, subject to rules made by Landlord, use the following areas on the Land or within the Building ("Building Common Area") in common with Landlord and other tenants of the Building: hallways, stairwells, entranceways, restroom facilities, refuse facilities, landscaped areas, driveways necessary for access to the Premises, parking spaces and other common facilities located in the Building and/or on the Land designated by Landlord from time to time for the common use of all tenants of the Building. Tenant may, subject to the CC&Rs (as defined in Section 11 below) and any rules or regulations made by Landlord, use the following areas of the Project ("Project Common Area") in common with Landlord, tenants of the Building and/or other owners or lawful users of the Project: refuse facilities, landscaped areas, roads, driveways necessary for access to the Premises, parking spaces, retention basins and other common facilities designated by Landlord from time to time for the common use of all tenants and owners of the Project. The Building Common Area and the Project Common Area are collectively referred to herein as the "Common Area".
1.3 Reserved Rights. Landlord reserves the right to enter the Premises for any reason upon reasonable notice to Tenant (or without notice in case of an emergency) and/or to undertake the following all without abatement of rent or liability to Tenant: inspect the Premises and/or the performance by Tenant of the terms and conditions hereof; make such alterations, repairs, improvements or additions to the Premises as required or permitted hereunder; change boundary lines of the Land so long as such change does not materially and adversely impact Tenant's use of the parking area and/or access to the Premises; install, use, maintain, repair, alter, relocate or replace any pipes, ducts, conduits, wires, equipment and other facilities (including, without limitation, cabling and conduit for telecommunications facilities of any kind) in the Common Area or the Building; install, maintain and operate conduit cabling within the utility and/or conduit ducts and risers within the Building, as well as, grant lease, license or use rights to third parties, to utilize the foregoing grant easements or licenses on the Land and/or the Project; dedicate for public use portions of the Land and/or the Project and record covenants, conditions and restrictions affecting the Land and/or the Project and/or amendments to existing CC&Rs (as defined below in Section 11 below) which do not unreasonably interfere with Tenant's use of the Premises or impose additional material monetary obligations on Tenant; change the name of the Building and/or the Project; affix reasonable signs and displays on the Building and/or the Land; and, during the last six (6) months of the Term, place signs for the rental of, and show the Premises to prospective tenants.
1.4 Parking. So long as this Lease is in effect and provided Tenant is not in default hereunder, Landlord grants to Tenant and Tenant's customers, suppliers, employees and invitees ("Tenant's Authorized Users") a non-exclusive license to use up to forty-eight (48) parking spaces in the areas designated by Landlord as parking facilities for the Building. All visitor parking will be on a non-exclusive, in common basis with all other visitors and guests of the Project Tenant will not use or allow any of Tenant's Authorized Users to use any parking spaces which have been specifically assigned by Landlord for other uses such as visitor parking or which have been designated by any governmental entity as being restricted to certain uses. Landlord may assign any unreserved and unassigned parking spaces and/or make all or any portion of such spaces reserved, if Landlord reasonably determines that it is necessary for orderly and efficient parking or for any other reasonable reason. Tenant and Tenant's Authorized Users shall comply with all rules and regulations regarding parking set forth in Exhibit F attached hereto and Tenant agrees to cause Tenant's Authorized Users to comply with such rules and regulations. Landlord reserves the right from time to time to modify and/or adopt such other reasonable and non-discriminatory rules and regulations for the parking facilities as it deems reasonably necessary for the operation of the parking facilities, but in no event shall Landlord be entitled to charge fees for parking without the prior written consent of Tenant, which is not to be unreasonably withheld or delayed. Tenant may, at Tenant's sole cost and expense,
provide for the striping of additional parking spaces in the paved areas adjacent to Tenant's loading docks and the fifty foot (50') wide concrete dock apron, provided that (i) the addition of such spaces in the loading dock and apron areas is in compliance with all applicable laws and (ii) any and all costs associated with providing such parking spaces in the loading dock areas shall be at Tenant's sole cost and expense, including, without limitation, any landscaping requirements imposed by the City.
2. TERM
2.1 Commencement Date. The Term of the Lease shall commence ("Commencement
Date") on January 1, 2001; provided, however, Tenant's obligation to pay Rent
(as defined in Section 3.1 below) shall commence on December 15, 2000 (the
"Possession Date"). Rent shall be paid for the period between the Possession
Date and the Commencement Date (e.g., December 15 to January 1, 2001) at the
rate stated in the Basic Lease Information, prorated on the basis of a thirty
(30) day month, and shall be due and payable to Landlord on or before the
Possession Date. Concurrently with the execution of this Lease, Tenant shall
execute and deliver to Landlord the Commencement Date Memorandum attached hereto
as Exhibit C acknowledging (i) the Commencement Date, (ii) the Possession Date,
and (iii) the final square footage of the Premises.
2.2 Intentionally Deleted
2.3 Early Entry. Subject to the following provisions of this Section 2.3, Tenant shall have the right to enter the Premises no earlier than fifteen (15) days prior to the Possession Date to install phone systems, furniture, fixtures and equipment, etc. and such early entry for such purposes shall not constitute occupancy for operation of Tenant's business and shall not trigger the Possession Date or the Commencement Date. Tenant agrees (i) any such early entry by Tenant shall be at Tenant's sole risk, (ii) Tenant shall not interfere with Landlord or Landlord's contractors completing work within the Premises or cause any labor difficulties; Tenant, together with its employees, agents and independent contractors will be subject to and will work under the direction of Landlord's contractor, (iii) Tenant shall comply with and be bound by all provisions of this Lease during the period of any such early entry except for the payment of Rent, (iv) prior to entry upon the Premises by Tenant, Tenant agrees to pay for and provide to Landlord certificates evidencing the existence and amounts of liability insurance carried by Tenant, which coverage must comply with the provisions of this Lease relating to insurance, (v) Tenant and its agents and contractors agree to comply with all applicable laws, regulations, permits and other approvals required to perform its work during the early entry on the Premises, and (vi) Tenant agrees to indemnify, protect, defend and save Landlord and the Premises harmless from and against any and all liens, liabilities, losses, damages, costs, expenses, demands, actions, causes of action and claims (including, without limitation, attorneys' fees and legal costs) arising out of the early entry, use, construction, or occupancy of the Premises by Tenant or its agents, employees or contractors.
3. RENT
3.1 Rent. Tenant shall pay to Landlord, at Landlord's Address for Payment of Rent designated in the Basic Lease Information, or at such other address as Landlord may from time to time designate in writing to Tenant for the payment of Rent, the Base Rent, without notice, demand, offset or deduction, in advance, on the first day of each calendar month. Landlord shall have no obligation to notify Tenant of any increase in Rent and Tenant's obligation to pay all Rent (and any increases) when due shall not be modified or altered by such lack of notice from Landlord. It is intended that this Lease be a "triple net lease," and that the Rent to be paid hereunder by Tenant will be received by Landlord without any deduction or offset whatsoever by Tenant, foreseeable or unforeseeable. Except as expressly provided to the contrary in this Lease, Landlord shall not be required to make any expenditure, incur any obligation, or incur any liability of any kind whatsoever in connection with this Lease or the ownership, construction, maintenance, operation or repair of the Premises or the Project Upon the execution of this Lease, Tenant shall pay to Landlord the first month's Base Rent. If the Term commences (or ends) on a date other than the first (or last) day of a month, Base Rent shall be prorated on the basis of a thirty (30) day month. All sums other than Base Rent which Tenant is obligated to pay under this Lease shall be deemed to be additional rent due hereunder ("Additional Rent"), whether or not such sums are designated Additional Rent and, together with the Base Rent, shall be due and payable to Landlord commencing on the Possession Date. The term "Rent" means the Base Rent and all Additional Rent payable hereunder.
3.2 Late Charge and Interest. The late payment of any Rent will cause Landlord to incur additional costs, including administration and collection costs and processing and accounting expenses and increased debt service ("Delinquency Costs"). If Landlord has not received any installment of Rent within five (5) days after such amount is due, Tenant shall pay a late charge of five percent (5%) of the delinquent amount, which is agreed to represent a reasonable estimate of the Delinquency Costs incurred by Landlord. In addition, all such delinquent amounts shall bear interest from the date such amount was due until paid in full at a rate per annum ("Applicable Interest Rate") equal to the lesser of (a) the maximum interest rate permitted by law or (b) five percent (5%) above the rate publicly announced by Bank of America, N.A. (or if Bank of America, N.A. ceases to exist, the largest bank then headquartered in the State of California) ("Bank") as its "Reference Rate". If the use of the announced Reference Rate is discontinued by the Bank, then the term Reference Rate shall mean the announced rate charged by the Bank which is, from time to time, substituted for the Reference Rate. Landlord and Tenant recognize that the damage which Landlord shall suffer as a result of Tenant's failure to pay such amounts is difficult to ascertain and said late charge and interest are the best estimate of the damage which Landlord shall suffer in the event of late payment. If a late charge becomes payable for any three (3) installments of Rent within any twelve (12) month period, then the Rent shall automatically become due and payable quarterly in advance.
3.3 Letter of Credit
3.3.1 Form of Letter of Credit. Concurrently with Tenant's execution and delivery of this Lease, Tenant shall deliver to Landlord an unconditional, irrevocable, standby letter of credit (the "Letter of Credit") with an expiration date no earlier than twelve (12) months from the date of issuance in the amount of Ninety Eight Thousand Three Hundred Ninety Four and No/100 Dollars ($98,394.00). The Letter of Credit shall be in the same form as Exhibit K attached hereto. The Letter of Credit shall secure the full and faithful performance of each provision of this Lease to be performed by Tenant. The Letter of Credit shall be issued by a money-center bank, or another financial institution acceptable to Landlord in its sole discretion. The Letter of Credit must be presentable in San Francisco, California. If Tenant fails to pay Rent or otherwise defaults with respect to any provision of this Lease and fails to cure any such default within any applicable notice and cure period provided in this Lease, then Landlord may execute one or more drafts on the Letter of Credit for the payment of any Rent, or for the payment of any other sum for which Landlord may become obligated by reason of Tenant's default, or for any payment to which Landlord may become entitled by reason of Tenant's default, or for payment to Landlord for any loss or damage which Landlord may suffer thereby. The Letter of Credit shall contain language allowing Landlord to draw upon the Letter of Credit upon presentation to the issuer of the Letter of Credit of Landlord's written statement that Landlord is entitled to the funds represented by such Letter of Credit in accordance with the terms hereof. If Landlord so uses or applies all or any portion of the amount represented by the Letter of Credit, then Tenant shall, within ten (10) days after written demand therefor, at Landlord's sole option, (i) deposit cash with Landlord in lieu of the Letter of Credit in the amount drawn, or (ii) deliver a replacement letter of credit in the amount drawn so that the total amounts represented by the Letter of Credit and the replacement letter of credit equals Ninety Eight Thousand Three Hundred Ninety Four and No/100 Dollars ($98,394.00), and Tenant's failure to do so shall be an Event of Default
3.3.2 Annual Renewals. The Letter of Credit shall provide for
automatic annual renewals throughout the Term of this Lease unless, at least
sixty (60) days prior to any such date of expiration, the issuing bank shall
have given written notice to Landlord, by certified mail, return receipt
requested and at the Landlord's Address stated in the Basic Lease Information or
such other address as Landlord shall have given to the issuing bank, that the
Letter of Credit will not be renewed. Tenant shall, no later than thirty (30)
days prior to the expiration of the Letter of Credit or any replacement or
renewal thereof, deliver a new Letter of Credit substantially in the same form
as the then existing Letter of Credit except that the expiration date set forth
in such new Letter of Credit shall not be earlier than twelve (12) months after
the expiration date set forth in the Letter of Credit which is then being
replaced, and the issuer may be changed by Tenant to a financial institution
acceptable to Landlord in its sole discretion. If Tenant fails to deliver a new
Letter of Credit as required herein, then Landlord shall have the right, at its
sole option, to draw upon and present the then existing Letter of Credit for the
entire amount available thereunder. Until such time as Tenant shall thereafter
deliver a new Letter of Credit in the form and substance required hereunder,
Landlord shall retain possession of the funds so drawn as a security deposit to
secure Tenant's obligations under this Lease. Any such replacement Letter of
Credit shall satisfy and be subject to the provisions set forth in subparagraph
(a) above. Should the Letter of Credit then in effect be revoked or should the
creditworthiness of the issuer of the Letter of Credit then in effect become
impaired (in Landlord's sole judgment), then Tenant shall deliver a replacement
Letter of Credit in the form and substance required hereunder.
3.3.3 Changes. If the Permitted Use is amended (in Landlord's sole and absolute discretion) to accommodate a change in the business of Tenant or to accommodate a subtenant or assignee approved by Landlord, Landlord shall have the right to increase the amount of the Letter of Credit to the extent necessary, in Landlord's reasonable judgment, to account for any increased risk to the Premises or increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Tenant occurs during this Lease and following such change the financial condition of Tenant is, in Landlord's reasonable judgment, reduced, Tenant shall cause the amount of the Letter of Credit to be increased to an amount reasonably determined by Landlord based on said change in financial condition.
3.3.4 Return of Letter of Credit. After Tenant vacates the Premises, upon the expiration or sooner termination of this Lease, if Tenant is not then in default or breach of any provision of this Lease, Landlord shall return to Tenant the Letter of Credit and any unapplied cash balance of the Letter of Credit that bad been previously drawn upon.
4. UTILITIES. Tenant shall pay all charges for heat, water, gas, electricity, telephone and any other utilities used on or provided to the Premises. Landlord shall not be liable to Tenant for interruption in or curtailment of any utility service, nor shall any such interruption or curtailment constitute constructive eviction or grounds for rental abatement. In the event the Premises is not separately metered, Tenant shall have the option, subject to Landlord's prior written consent and the terms of this Lease, to cause the Premises to be separately metered at Tenant's cost and expense. If Tenant does not elect to cause the Premises to be separately metered, Tenant shall pay a reasonable proration of utilities, as determined by Landlord. Notwithstanding any provision to the contrary contained in this Lease, in no event shall Tenant use or be entitled to use more than 3,000 amps of power within the Premises. Notwithstanding any provision of this Lease to the contrary, Landlord shall be under no obligation to provide or cause to be provided any electrical service to the Premises prior to the Commencement Date.
5. TAXES
5.1 Real Property Taxes. Tenant shall pay to Landlord Tenant's Share of Real Property Taxes (as defined in Section 5.2) as a part of Operating Expenses for each full or partial calendar year during the Lease Term in accordance with the terms and provisions of Section 7.1 below.
5.2 Definition of Real Property Taxes. "Real Property Taxes" shall be the sum of the following: all real property taxes, assessments, supplementary taxes, escape taxes, possessory-interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit and traffic charges, housing fund assessments, open space charges, childcare fees, school, sewer and parking fees or any other assessments, levies, fees, exactions or charges, general and special, ordinary and extraordinary, unforeseen as well as foreseen (including fees "in-lieu" of any such tax or assessment) which are assessed, levied, charged, conferred or imposed by any public authority upon the Land, the Building or any other improvements located on the Land and/or Project (or any real property comprising any portion thereof) or its operations, together with all taxes, assessments or other fees imposed by any public authority upon or measured by any Rent or other charges payable hereunder, including any gross receipts tax or excise tax levied by any governmental authority with respect to receipt of rental income, or upon, with respect to or by reason of the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof, or documentary transfer taxes upon this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises, together with any tax imposed in substitution, partially or totally, of any tax previously included within the aforesaid definition or any additional tax the nature of which was previously included within the aforesaid definition, together with any and all costs and expenses (including, without limitation, attorneys', administrative and expert witness fees and costs) of challenging any of the foregoing or seeking the reduction in or abatement, redemption or return of any of the foregoing, but only to the extent of any such reduction, abatement, redemption or return. All references to Real Property Taxes during a particular year shall be deemed to refer to taxes accrued during such year, including supplemental tax bills regardless of when they are actually assessed and without regard to when such taxes are payable. Real Property Taxes shall expressly include One Hundred Percent (100%) of any increase or supplemental assessments accruing as a result of the construction of the Building, or any other improvements located on the Land. In addition to Tenant's Share of Real Property Taxes (paid as a part of Operating Expenses), Tenant shall pay to Landlord One Hundred Percent (100%) of any increase in the assessed value of the Land directly attributable to the value of any Tenant Improvements (as defined in the Work Letter, if
any). The obligation of Tenant to pay Real Property Taxes (including any supplemental taxes) for the last full and/or partial year(s) of the Term shall survive the expiration or early termination of this Lease. In no event shall Tenant or any Tenant Party (as defined in Section 12.1) be entitled to file any property tax assessment appeal; provided, however, Tenant may appeal any personal property taxes assessed on personal property which (x) is owned by Tenant, (y) is not affixed to any portion of the Premises and (z) is not deemed to be a fixture under the laws of the State of Oregon. Nothing contained in this Lease shall require Tenant to pay any franchise, corporate, estate or inheritance tax of Landlord, or any income, profits or revenue tax or charge upon the net income of Landlord. Subject to the terms of this Section 5.2, Real Property Taxes for partial years, if any, falling within the Term shall be prorated.
5.3 Personal Property Taxes. Prior to delinquency, Tenant shall pay all taxes and assessments levied upon trade fixtures, alterations, additions, improvements, inventories and other personal property located and/or installed on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts for payment of all such taxes and assessments. To the extent any such taxes are not separately assessed or billed to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
6. OPERATING EXPENSES
6.1 Operating Expenses. Tenant shall pay to Landlord Tenant's Share of the Building Operating Expenses and Tenant's Share of Project Operating Expenses for each full or partial calendar year during the Lease Term, as provided in Section 7.1 below.
6.2 Definition of Operating Expenses. "Operating Expenses" shall mean collectively the "Building Operating Expenses" and the "Project Operating Expenses" as defined in this Section 6.2.
6.2.1 "Building Operating Expenses" means the total costs and expenses incurred by Landlord in the ownership, operation, maintenance, repair and management of the Building, the Land and/or the Building Common Area, including, but not limited to: (a) repair, replacement, maintenance, utility costs and landscaping of the Building Common Area, including, but not limited to, any and all costs of maintenance, repair and replacement of all parking areas (including bumpers, sweeping, striping and slurry coating), common driveways, loading and unloading areas, trash areas, outdoor lighting, sidewalks, walkways, landscaping, irrigation systems, fences and gates and other costs which are allocable to the Building and/or the Land including any costs under the terms of any CC&Rs affecting the real property, (b) non-structural maintenance, repair and replacement of the roof (and roof membrane), skylights and exterior walls of the Premises (including painting); (c) insurance deductibles and the costs relating to the insurance maintained by Landlord as described in Section 8.1 below, including, without limitation, Landlord's cost of any deductible or self insurance retention; (d) maintenance contracts for, and the repair and replacement of, the heating, ventilation and air-conditioning (HVAC) systems and elevators, if any; (e) maintenance, repair, replacement, monitoring and operation of the fire/life safety and sprinkler system (to the extent Landlord is obligated to do so pursuant to Section 9.2); (f) trash collection; (g) capital improvements or capital replacements (excluding the roof structure) made to or capital assets acquired for the Building or the Land after the Commencement Date that in Landlord's good faith judgment are intended to reduce Building Operating Expenses or are reasonably necessary for the health and safety of the occupants of the Building or are required under any governmental law or regulation, which capital costs, or an allocable portion thereof, shall be amortized over the period determined by Landlord, together with interest on the unamortized balance at the Applicable Interest Rate, all in accordance with "generally accepted accounting principles" ("GAAP") consistently applied; (h) commercially reasonable reserves set aside for maintenance and repair; (i) Real Property Taxes attributable to the Land; and (j) any other costs, except as noted in this Lease, incurred by Landlord related to the Building and/or the Land and not related to the Project as a whole. Notwithstanding any provision to the contrary contained in this Section 6.2.1, Tenant shall pay to Landlord an amount equal to three percent (3%) of Rent for the costs and fees incurred by Landlord in connection with the management of this Lease, the Premises, the Building and/or the Land including the cost of those services which are customarily performed by a property management services company, whether performed internally or through an outside management company. Building Operating Expenses shall not include (i) replacement of or structural repairs to the roof, slab or the exterior walls; (ii) repairs to the extent covered by insurance proceeds, or paid by Tenant or other third parties; (iii) alterations solely attributable to tenants of the Project other than Tenant; (iv) marketing and legal expenses; (v) any cost or expense associated with compliance with any laws, ordinances, rules or regulations regarding any condition existing in the Building or on the Land if
such condition existed prior to the Commencement Date, including, but not limited to removal of any and all asbestos and other toxic and hazardous substances located in the Premises; and (vi) any costs or expenses being charged directly and solely to other tenants in the Building (other than pursuant to the operating expenses clauses of the lease(s) of such other tenant(s)).
62.2 Project Operating Expenses. "Project Operating Expenses" shall include all reasonable and necessary expenses incurred by Landlord in the ownership, operation, maintenance, repair and management of the Project Common Area, including, without limitation, Real Property Taxes attributable to the Project Common Area; provided, however that all improvements or replacements made to or assets acquired for the Project after the Commencement Date that are reasonably expected to reduce Project Operating Expenses or are reasonably necessary for the health and safety of the occupants of the Project or required under any government of law or regulation, which costs, or an allocable portion thereof, shall be amortized over the period determined by Landlord, together with interest on the unamortized balance at the Applicable interest Rate actually paid to third party lenders, all in accordance with GAAP consistently applied.
7. ESTIMATED EXPENSES
7.1 Payment. "Estimated Expenses" for any particular year shall mean Landlord's estimate of Operating Expenses for a calendar year. Tenant shall pay Tenant's Share of the Estimated Expenses with installments of Base Rent in monthly installments of one-twelfth (l/12th) thereof on the first day of each calendar month during such year. If at any time Landlord determines that Operating Expenses are projected to vary from the then Estimated Expenses, Landlord may, by notice to Tenant, revise such Estimated Expenses, and Tenant's monthly installments for the remainder of such year shall be adjusted so that by the end of such calendar year Tenant has paid to Landlord Tenant's Share of the revised Estimated Expenses for such year.
7.2 Adjustment. "Operating Expenses Adjustment" (or "Adjustment") shall mean the difference between Tenant's Share of Estimated Expenses and Tenant's Share of Operating Expenses for any calendar year. After the end of each calendar year, Landlord shall deliver to Tenant a statement of Tenant's Share of Operating Expenses for such calendar year, accompanied by a computation in sufficient detail of the Adjustment. If Tenant's payments are less than Tenant's Share, then Tenant shall pay the difference within twenty (20) days after receipt of such statement Tenant's obligation to pay such amount shall survive the expiration or termination of this Lease. If Tenant's payments exceed Tenant's Share, then (provided that Tenant is not in material default), Landlord shall credit such excess amount to future installments of Tenant's Share for the next calendar year. If Tenant is in material default, Landlord may, but shall not be required to, credit such amount to Rent arrearages.
7.3 Audit Right. In the event of any dispute as to the amount of Tenant's Share of Operating Expenses, Tenant or an accounting firm selected by Tenant and reasonably satisfactory to Landlord will have the right, by prior written notice ("Audit Notice") given within ninety (90) days ("Audit Period") following receipt of an actual statement of Operating Expenses ("Actual Statement") and at reasonable times during normal business hours, to audit Landlord's accounting records with respect to Operating Expenses relative to the year to which such Actual Statement relates at the office of Landlord at which records are kept or, at Landlord's election, the office of Landlord's property manager (if any). In no event will Landlord or its property manager be required to (i) photocopy any accounting records or other items or contracts, (ii) create any ledgers or schedules not already in existence, (iii) incur any costs or expenses relative to such inspection, or (iv) perform any other tasks other than making available such accounting records as aforesaid. Neither Tenant nor its auditor may leave the office of Landlord with originals of any materials supplied by Landlord. Tenant must pay Tenant's Share of Operating Expenses when due pursuant to the terms of this Lease and may not withhold payment of Operating Expenses or any other rent pending results of the audit or during a dispute regarding Operating Expenses. The audit must be completed within sixty (60) days of the date of Tenant's Audit Notice and the results of such audit shall be delivered to Landlord within seventy-five (75)days of the date of Tenant's Audit Notice. If Tenant does not comply with any of the aforementioned time frames, then such Actual Statement will be conclusively binding on Tenant. If such audit or review correctly reveals that Landlord has overcharged Tenant, then within thirty (30) days after the results of such audit are made available to Landlord, the amount of such overcharge shall be deducted from the installments of Tenant's Share of Operating Expenses next becoming due. If the audit reveals that Tenant was undercharged, then within thirty (30) days after the results of the audit are made available to Tenant, Tenant agrees to reimburse Landlord the amount of such undercharge. Tenant agrees to pay the cost of such audit, provided that if the audit
reveals that Landlord's determination of Tenant's Share of Operating Expenses as set forth in the relevant Actual Statement was in error in Landlord's favor by more than five percent (5%) of the amount charged by Landlord to Tenant pursuant to such Actual Statement, then Landlord agrees to pay the reasonable, third-party cost of such audit incurred by Tenant. To the extent Landlord must pay the cost of such audit, such cost shall not exceed a reasonable hourly charge for a reasonable amount of hours spent by such third-party in connection with the audit. Tenant agrees to keep the results of the audit confidential and will cause its agents, employees and contractors to keep such results confidential. To that end, Landlord may require Tenant and its auditor to execute a confidentiality agreement provided by Landlord.
8. INSURANCE
8.1 Landlord. Landlord shall maintain insurance through individual or
blanket policies insuring the Building against fire and extended coverage
(including, if Landlord elects, "all risk" coverage, earthquake/volcanic action,
flood and/or surface water insurance) for the full replacement cost of the
Building, with deductibles and the form and endorsements of such coverage as
selected by Landlord, together with rental abatement insurance against loss of
Rent in an amount equal to the amount of Rent for a period of at least twelve
(12) months commencing on the date of loss. Landlord may also carry such other
insurance as is commercially reasonable (when compared to insurance customarily
carried by sophisticated, institutional landlords for the protection of such
landlords and the production of properties similar to the Premises), including,
without limitation, liability insurance in such amounts and on such terms as
Landlord shall determine. Tenant shall pay to Landlord, as a portion of the
Operating Expenses, the costs of the insurance coverages described herein,
including, without limitation, Landlord's cost of any self-insurance deductible
or retention.
8.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force at all times the following insurance:
8.2.1 Commercial General Liability Insurance (Occurrence Form). A policy of commercial general liability insurance (occurrence form) having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant has multiple locations, providing coverage for, among other things, blanket contractual liability, premises, products/completed operations with an "Additional Insured-Managers or Lessors of Premises Endorsement" and containing the "Amendment of the Pollution Exclusion Endorsement" for damage caused by heat, smoke or fumes from a hostile fire, and personal and advertising injury coverage, with deletion of the exclusion for operations within fifty (50) feet of a railroad track (railroad protective liability), if applicable, and if applicable, and, if necessary, Tenant shall provide for restoration of the aggregate limit, and provided that the policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an "insured contract" for the performance of Tenant's indemnity obligations under this Lease;
8.2.2 Automobile Liability Insurance. Business automobile liability insurance having a combined single limit of not less than Two Million Dollars ($2,000,000) per occurrence and insuring Tenant against liability for claims arising out of ownership, maintenance, or use of any owned, hired or non-owned automobiles;
8.2.3 Workers' Compensation and Employer's Liability Insurance. Workers' compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and covering all persons employed by Tenant in the conduct of its operations on the Premises (including the all states endorsement and, if applicable, the volunteers endorsement), together with employer's liability insurance coverage in the amount of at least One Million Dollars ($1,000,000);
8.2.4 Property Insurance. "All risk" property insurance including boiler and machinery comprehensive form, if applicable, covering damage to or loss of any of Tenant's personal property, fixtures, equipment and alterations, including electronic data processing equipment (collectively "Tenant's Property") (and coverage for the full replacement cost thereof including business interruption of Tenant), together with, if the property of Tenant's invitees is to be kept in the Premises, warehouser's legal liability or bailee customers insurance for the full replacement cost of the property belonging to invitees and located in the Premises; and
8.2.5 Business Interruption. Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct or indirect loss of earnings attributable to all peril commonly insured against by prudent lessees in the business of Tenant or attributable to prevention of access to the Premises as a result of such perils.
8.3 General
8.3.1 Insurance Companies. Insurance required to be maintained by Tenant shall be written by companies licensed to do business in the state in which the Premises are located and having a "General Policyholders Rating" of at least "A-/VIII" (or such higher rating as may be required by a lender having a lien on the Premises) as set forth in the most current issue of "Best's Insurance Guide."
8.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
certificates of insurance for all insurance required to be maintained by Tenant
in the form of Exhibit D, attached hereto (or in a form acceptable to Landlord
in its sole discretion), no later than seven (7) days prior to the date of
possession of the Premises. Tenant shall, at least ten (10) days prior to
expiration of the policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after sixty
(60) days prior written notice to the parties named as additional insureds in
this Lease (except in the case of cancellation for nonpayment of premium in
which case cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). If Tenant fails to maintain any insurance
required in this Lease, Tenant shall be liable for all losses and costs suffered
or incurred by Landlord (including litigation costs and attorneys' fees and
expenses) resulting from said failure.
8.3.3 Additional Insureds. Landlord, Landlord's lender, if any, and any property management company of Landlord for the Premises shall be named as additional insureds on a form approved by Landlord under all of the policies required by Section 8.2.1. The policies required under Section 8.2.1 shall provide for severability of interest.
8.3.4 Primary Coverage. All insurance to be maintained by Tenant shall, except for workers' compensation and employer's liability insurance, be primary, without right of contribution from insurance of Landlord. Any umbrella liability policy or excess liability policy (which shall be in "following form") shall provide that if the underlying aggregate is exhausted, the excess coverage will drop down as primary insurance. The limits of insurance maintained by Tenant shall not limit Tenant's liability under this Lease.
8.3.5 Mutual Waiver of Subrogation. Subject to Section 13.2, whenever
(a) any loss, cost, damage or expense resulting from fire, explosion or any
other casualties incurred by either Landlord or Tenant or by anyone claiming by,
through or under Landlord or Tenant in connection with the Premises, and (b)
such party is covered in whole or in part by insurance (or would have been
covered but for such party's failure to maintain the coverage required in this
Section 8) with respect to such loss, cost, damage or expense or as required
under this Lease to be self-insured, then the party so insured (or so required)
hereby waives (on its own behalf and on behalf of its insured) any claims
against and releases the party from any liability said other party may have on
account of such loss, cost, damage or expense. All insurance which is carried by
either party to insure against damage or loss to property shall include
provisions denying to each respective insurer rights of subrogation and recovery
against the other party.
8.3.6 Notification of Incidents. Tenant shall notify Landlord within twenty-four (24) hours after the occurrence of any accidents or incidents in the Premises, the Building, Common Areas or the Project which could give rise to a claim under any of the insurance policies required under this Section 8.
8.4 Indemnity. Tenant shall indemnify, protect, defend (by counsel acceptable to Landlord) and hold harmless Landlord and Landlord's affiliated entities, and each of their respective members, managers, partners, directors, officers, employees, shareholders, lenders, agents, contractors, successors and assigns from and against any and all claims, judgments, causes of action, damages, penalties, costs, liabilities, and expenses, including all costs, reasonable attorneys' fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon, arising at any time during or after the Term as a result (directly or indirectly) of or in connection with (i) any default in the performance of any obligation on Tenant's part to be performed under the terms of this Lease, or (ii) Tenant's use of the Premises, the conduct of Tenant's business or any activity, work or
things done, permitted or suffered by Tenant or any Tenant Party in or about the
Premises, the Building, the Common Area or other portions of the Project, except
for claims caused solely by Landlord's gross negligence or willful misconduct.
The obligations of Tenant under this Section 8.4 shall survive the termination
of this Lease with respect to any claims or liability arising prior to such
termination. Landlord shall indemnify, protect, defend (by counsel reasonably
acceptable to Tenant) and hold harmless Tenant and Tenant's affiliated entities,
and each of their respective members, managers, partners, directors, officers,
employees, shareholders, lenders, agents, contractors, successors and assigns
from and against any and all claims, judgments, causes of action, damages,
penalties, costs, liabilities, and expenses, including all costs, reasonable
attorney's fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon caused solely by Landlord's
gross negligence or willful misconduct. The obligations of Landlord under this
Section 8.4 shall survive the termination of this Lease with respect to any
claims or liability arising prior to such termination.
8.5 Exemption of Landlord from Liability. Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage to property including, but not limited to, Tenant's fixtures, equipment, furniture and alterations or illness or injury to persons in, upon or about the Premises, the Building, the Land, the Common Area or other portions of the Project arising from any cause, and Tenant hereby expressly releases Landlord and waives all claims in respect thereof against Landlord, except only such claims which are caused solely by Landlord's gross negligence or willful misconduct or which are expressly provided for in Section 12.3 hereof. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant's business or any loss of income therefrom. Tenant hereby further agrees that Landlord shall not be liable for damage to the property of Tenant, or injury to or illness or death of Tenant or any Tenant Party or any other person in or about the Premises, the Building, the Common Area or the Project, whether such damage, illness or injury is caused by fire, steam, electricity, gas, water or rain, or from the breakage, leakage or other defects of sprinklers, wires, appliances, ventilation, plumbing, air conditioning or lighting fixtures, or from any other cause, and whether said damage, illness or injury results from conditions arising upon the Premises, upon other portions of the Building or from other sources or places, and regardless of whether the cause of such damage, illness or injury or the means of repairing the same is inaccessible to Tenant, except only damage, illness or injury caused solely by Landlord's gross negligence or willful misconduct or which is expressly provided to the contrary in Section 12.3 hereof. Landlord shall not be liable for any damages arising from any act or neglect of any contractor or other tenant, if any, of the Building or the Project or Landlord's failure to enforce the terms of any agreements with parties other than Tenant; provided that Landlord shall use its commercially reasonable efforts to enforce the terms of any agreements with parties other than Tenant.
9. REPAIRS AND MAINTENANCE
9.1 Tenant. Tenant, at Tenant's sole cost and expense, shall keep and
maintain the Premises (interior and exterior, excluding roofing and painting),
including, without limitation, loading docks, roll up doors and ramps, floors,
subfloors and floor coverings, walls and wall coverings, doors, windows, glass,
plate glass, locks, ceilings, skylights, lighting systems, interior plumbing,
electrical and mechanical systems and wiring, appliances and devices using or
containing refrigerants, fixtures and equipment in good repair and in a clean
and safe condition, and repair and/or replace any and all of the foregoing in a
clean and safe condition, in good order, condition and repair. Without limiting
the foregoing, Tenant shall, at Tenant's sole expense, immediately replace all
broken glass in the Premises with glass equal to or in excess of the
specification and quality of the original glass; and repair any area damaged by
Tenant, Tenant's agents, employees, invitees and visitors, including any damage
caused by any roof penetration, whether or not such roof penetration was
approved by Landlord. All repairs and replacements by Tenant shall be made and
performed: (a) at Tenant's cost and expense and at such time and in such manner
as Landlord may designate, (b) by contractors or mechanics approved by Landlord,
(c) so that same shall be at least equal in quality, value and utility to the
original work or installation, (d) in a manner and using equipment and materials
that will not interfere with or impair the operations, use or occupation of the
Building or any of the mechanical, electrical, plumbing or other systems in the
Building or the Project, and (e) in accordance with the Rules and Regulations
and all Applicable Laws (as defined in Section 11). In the event Tenant fails,
in the reasonable judgment of Landlord, to maintain the Premises in accordance
with the obligations under the Lease, which failure continues at the end of
fifteen (15) days following Tenant's receipt of written notice from Landlord
stating the nature of the failure, or in the case of an emergency immediately
without prior notice, Landlord shall have the right to enter the Premises and
perform such maintenance, repairs or refurbishing at Tenant's sole cost and
expense (including a sum for overhead to Landlord equal to ten percent (10%) of
the costs of maintenance, repairs or refurbishing). Tenant shall maintain
written records of maintenance and repairs, as required by any Applicable
Law, and shall use certified technicians to perform such maintenance and repairs, as so required. Tenant shall deliver full and complete copies of all service or maintenance contracts entered into by Tenant for the Premises to Landlord within one hundred twenty (120) days after the Commencement Date.
9.2 Landlord. Landlord shall, subject to the following limitations, repair damage to structural portions of the roof, foundation and load-bearing portions of walls (excluding wall coverings, painting, glass and doors) of the Building, and damage to the exterior walls and other structural portions of the Building; provided, if such damage is caused by an act or omission of Tenant, or any Tenant Party, then such repairs shall be at Tenant's sole expense. Landlord shall not be required to make any repair resulting from (i) any alteration or modification to the Building or to mechanical equipment within the Building performed by, for or because of Tenant or to special equipment or systems installed by, for or because of Tenant, (ii) the installation, use or operation of Tenant's property, fixtures and equipment, (iii) the moving of Tenant's property in or out of the Building or in and about the Premises, (iv) Tenant's use or occupancy of the Premises in violation of Section 11 of this Lease or in the manner not contemplated by the parties at the time of the execution of this Lease, (v) the acts or omissions of Tenant or any Tenant Party, (vi) fire and other casualty, except as provided by Section 13 of this Lease or (vii) condemnation, except as provided in Section 14 of this Lease. Landlord shall have no obligation to make repairs under this Section 9.2 until a reasonable time after receipt of written notice from Tenant of the need for such repairs. Subject to Section 9.3, there shall be no abatement of Rent during the performance of such work, provided that neither the access to nor use of the Premises is materially impaired in which case Tenant's exclusive remedy shall be determined in accordance with Section 9.3 below. Landlord shall not be liable to Tenant for injury or damage that may result from any defect in the construction or condition of the Premises, nor for any damage that may result from interruption of Tenant's use of the Premises during any repairs by Landlord, provided that Landlord shall use its commercially reasonable efforts to enforce the terms of any agreements with parties other than Tenant. Tenant waives any right to repair the Premises, the Building and/or the Common Area at the expense of Landlord under any Applicable Law.
9.3 Landlord's Failure to Perform. In the event Landlord fails to commence
the repair of the Premises as required by Section 9.2 above ("Landlord Repair
Obligations") and such failure to commence such repair(s) continues at the end
of thirty (30) days following Landlord's receipt of written notice from Tenant
stating with particularity the nature of such failure, Tenant shall
simultaneously give Landlord and Landlord's mortgagee (provided Tenant has been
provided written notice of the address of such mortgagee) written notice
specifying such default and containing the following phrase (or substantially
similar to the following phrase) on page 1 of the notice in all capital letters
and boldface type (or it shall not be deemed validly given to Landlord) "YOUR
FAILURE TO COMMENCE THE CURE OF LANDLORD'S REPAIR OBLIGATIONS SET FORTH IN THIS
NOTICE WITHIN TEN (10) BUSINESS DAYS SHALL ENTITLE THE UNDERSIGNED TO CURE SUCH
DEFAULT AT LANDLORD'S EXPENSE WITHOUT FURTHER NOTICE". Landlord shall thereupon
have ten (10) business days in which to commence to cure the applicable Landlord
Repair Obligation. In addition, Landlord's mortgagee shall have the right (but
not the obligation) to cure or remedy Landlord's Repair Obligations upon the
terms and conditions of any SNDA (as defined in Section 17.2 below) entered into
by and between Tenant and any such lender, and if no such SNDA exists, then upon
the terms and conditions described in Section 18.15. In the event Landlord fails
to commence to cure the applicable Landlord Repair Obligation within said ten
(10) business day period and Tenant undertakes a Landlord Repair Obligation,
Tenant shall use a qualified, licensed and bondable contractor which normally
and regularly performs similar work on concrete tilt-up industrial buildings. If
Tenant thereafter delivers to Landlord an invoice by Tenant of its costs of
taking action which Tenant claims should have been taken by Landlord (the
"Tenant Invoice"), and if such Tenant Invoice sets forth a reasonably
particularized breakdown of its costs and expenses in connection with
undertaking such Landlord Repair Obligation, then Tenant shall be entitled to
offset against Base Rent the amount set forth in such Tenant Invoice following
delivery of the additional written notice described below; provided, however,
the amount of offset during any single month shall not exceed the greater of (A)
fifteen percent (15%) of the total Base Rent payable by Tenant to Landlord for
each applicable month or (B) the amount necessary to amortize fully Tenant's
costs of cure (plus interest at ten percent (10%) per annum on such costs) from
the date of completion of such cure to the expiration date of the Lease Term
(without regard to any unexercised renewal options), but in no event greater
than twenty percent (20%) of the total monthly Base Rent for any one month. The
unpaid balance of the Tenant's Invoice, if any, shall bear interest at an annual
rate of ten percent (10%). If, at any time, Landlord delivers to Tenant a
written objection to Tenant's claim that a particular Landlord Repair Obligation
is not required under the terms of this Lease, setting forth with reasonable
particularity Landlord's reasons for its claim that such repair action did not
have to be taken by Landlord
pursuant to the terms of this Lease, then Tenant shall not be entitled to such offset, but as Tenant's sole remedy, Tenant may proceed to claim a Landlord default and, if elected by either Landlord or Tenant, the matter shall proceed to resolution by arbitration pursuant to the arbitration procedures set forth in attached Exhibit J. The costs of such arbitration (including reasonable attorneys fees and costs awarded to the prevailing party, if any) shall be paid to the prevailing party in the arbitration if and to the extent awarded by the arbitrator. In the event that Landlord fails to pay any amount to Tenant within twenty (20) days following delivery of the Tenant Invoice, then Tenant may provide to Landlord a written demand therefor ("Final Demand") which contains the following phrase (or substantially similar to the following phrase) on page 1 of the notice in all capital letters and boldface type (or it shall not be deemed validly delivered to Landlord) "YOUR FAILURE TO REIMBURSE TENANT AS REQUIRED HEREIN WITHIN FIFTEEN (15) DAYS SHALL ENTITLE THE UNDERSIGNED TO EXERCISE CERTAIN OFFSET RIGHTS AS SET FORTH IN THE LEASE WITHOUT FURTHER NOTICE." If Landlord fails to pay to Tenant the amount due to Tenant within fifteen (15) days following Landlord's receipt of the Final Demand or if Landlord fails to pay any award granted to Tenant pursuant to an arbitration proceeding in the manner described above within the time frame established pursuant to any such proceeding, then Tenant may offset from the next installments of rent and other charges coming due under this Lease the full amount owed by Landlord to Tenant (together with all accrued interest).
10. ALTERATIONS
10.1 Trade Fixtures; Alterations. Tenant may install necessary trade fixtures, equipment and furniture in the Premises, provided that such items are installed and are removable without structural or material damage to the Premises, or the Building. Without limiting the generality of the foregoing, Landlord and Tenant hereby acknowledge that Tenant intends to install within the Premises certain trade fixtures and equipment related to Tenant's Permitted Use including, without limitation, powder coat room equipment ("Tenant's Equipment"). Notwithstanding the foregoing, Tenant shall, prior to the installation of Tenant's Equipment, deliver to Landlord for Landlord's review and approval, which approval shall not be unreasonably withheld or delayed, an inventory of Tenant's Equipment, the proposed location of such equipment within the Premises and the specifications related to such items (including the gross weight of each item included in Tenant's Equipment). Tenant shall not install or locate any of Tenant's Equipment within the Premises unless and until Landlord has approved the same in accordance with the preceding sentence. Tenant shall not construct, nor allow to be constructed, any alterations or physical additions in, about or to the Premises without obtaining the prior written consent of Landlord, which consent shall be conditioned upon Tenant's compliance with the provisions of Exhibit G and any other applicable requirements of Landlord regarding construction of improvements and alterations. If Landlord does not respond to a written request from Tenant made in accordance with Exhibit G within ten (10) business days, then Landlord shall be deemed to disapprove such request. In the event Tenant makes any alterations to the Premises that trigger or give rise to a requirement that the Building or the Premises come into compliance with any governmental laws, ordinances, statutes, orders and/or regulations (such as ADA requirements), Tenant shall be fully responsible for complying, at its sole cost and expense, with same. Tenant shall file a notice of completion after completion of such work and provide Landlord with a copy thereof.
10.2 Damage; Removal. Tenant shall repair all damage to the Premises, the Building, the Common Area or the Project caused by the Installation or removal of Tenant's fixtures, equipment, furniture or alterations. Upon the expiration or earlier termination of this Lease, Tenant shall remove any or all trade fixtures, alterations, additions, improvements (including the Tenant Improvements [as defined in the Work Letter]) and partitions ("Alteration(s)") made or installed by or on behalf of Tenant; provided, however, Landlord has the absolute right to require Tenant to have all or any portion of such items designated by Landlord to remain on the Premises, in which event they shall be and become the property of Landlord upon the termination of this Lease. Should Tenant make any Alterations without the prior written approval of Landlord, Landlord may require that Tenant remove any or all of such Alterations and repair any damage to the Premises resulting from the installation and/or removal of such Alterations at any time and from time to time. Subject to the conditions set forth above, Tenant shall restore the Premises to its condition existing prior to the construction of any Alterations. Tenant shall further patch and fill all holes within the Premises. All penetrations of the roof shall be resealed to a water tight condition. In no event shall Tenant remove from the Building any mechanical or electrical systems or any wiring or any other aspect of any systems within the Premises, unless Landlord specifically permits such removal in writing. All such removals and restoration shall be accomplished in a good and workmanlike manner and so as not to cause any damage to the Premises, the Building, the Common Area or the Project whatsoever.
10.3 Liens. Tenant shall promptly pay and discharge all claims for labor performed, supplies furnished and services rendered at the request of Tenant and shall keep the Premises free of all mechanics' and materialmen's liens in connection therewith. Tenant shall provide at least ten (10) days prior written notice to Landlord before any labor is performed, supplies furnished or services rendered on or at the Premises and Landlord shall have the right to post on the Premises notices of non-responsibility. If any lien is filed, Tenant shall cause such lien to be released and removed within ten (10) days after the date of filing, and if Tenant fails to do so, Landlord may take such action as may be necessary to remove such lien and Tenant shall pay Landlord such amounts expended by Landlord together with interest thereon at the Applicable Interest Rate from the date of expenditure.
10.4 Standard of Work. All work to be performed by or for Tenant pursuant hereto shall be performed diligently and in a first class, workmanlike manner, and in compliance with the terms of provisions of Exhibit G, all Applicable Laws, and/or Tenant and Landlord's insurance carriers. Landlord shall have the right, but not the obligation, to inspect periodically the work on the Premises and Landlord may require changes in the method or quality of the work.
11. USE. The Premises shall be used only for the Permitted Uses set forth in the Basic Lease Information and for no other uses. Tenant's use of the Premises shall be in compliance with and subject to all applicable laws, statutes, codes, ordinances, orders, rules, regulations, conditions of approval and requirements of all federal, state, county, municipal and governmental authorities and all administrative or judicial orders or decrees and all permits, licenses, approvals and other entitlements issued by governmental entities, and rules of common law, relating to or affecting the Project, the Premises or the Building or the use or operation thereof, whether now existing or hereafter enacted, including, without limitation, the Americans with Disabilities Act of 1990, 42 U.S.C. 12111 et seg. (the "ADA") as the same may be amended from time to time, all Environmental Laws (as defined in Section 12.1), and any covenants, conditions and restrictions encumbering the Land and/or the Project or any supplement thereto recorded in any official or public records with respect to the Project or any portion thereof ("Applicable Laws"). From and after the date hereof Tenant shall use the Premises and permit the Premises to be used solely for uses permitted by that certain Declaration of Covenants, Conditions and Restrictions for Southshore Corporate Park executed by Catellus Development Corporation and recorded in the Official Records of Multnomah County, State of Oregon on June 7, 1999 as Instrument No. 99113258 (the "CC&Rs"). In addition, Tenant acknowledges that the Premises are subject to that certain Administrative Order on Consent made and entered into by and among the United States Environmental Protection Agency, the State of Oregon Department of Environmental Quality and Winmar Pacific, Inc. dated effective as of April 16, 1991 (the "Administrative Order"), which imposes certain covenants, conditions and restrictions on Southshore Corporate Park. Tenant shall be responsible for obtaining any permit, business license, or other permits or licenses required by any governmental agency permitting Tenant's use or occupancy of the Premises. In no event shall the Premises be used for any of the Prohibited Uses set forth on Exhibit E attached hereto, as such Exhibit has been modified to conform to Tenant's proposed use of the Premises. Notwithstanding any provision to the contrary in this Section 11, in the event that a change in technology or similar change in circumstances reasonably requires Tenant to use additional chemicals or increased quantities of the permitted chemicals set forth on Schedule 1 to Exhibit E (the "Permitted Hazardous Materials") in the manufacturing process related to Tenant's Permitted Use, Tenant may submit to Landlord a written request to modify Exhibit E which request shall identify the specific chemicals and quantities to be used on the Premises (the "Proposed Hazardous Materials"). Landlord shall have ten (10) days from receipt of such a Tenant request to approve or disapprove Tenant's request to modify the Permitted Hazardous Materials in which case Landlord and Tenant shall execute an amendment to Exhibit E of the Lease accordingly, provided, however, Landlord's approval rights related to the Proposed Hazardous Materials shall be limited to the Proposed Hazardous Materials' compliance with the CC&Rs and all Applicable Laws. Subject to Tenant's obligation to comply with all Applicable Laws and the CC&Rs, Landlord's failure to disapprove Tenant's requested modification to the Permitted Hazardous Materials within such ten (10) day period shall be deemed Landlord's approval thereof. Tenant shall comply with the rules and regulations attached hereto as Exhibit F, together with such additional rules and regulations as Landlord may from time to time prescribe. Tenant shall not commit waste, overload the floors or structure of the Building, subject the Premises, the Building, the Common Area or the Project to any use which would damage the same or increase the risk of loss or violate any insurance coverage, permit any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, take any action which would constitute a nuisance or would disturb, obstruct or endanger any other tenants, take any action which would abrogate any warranties, or use or allow the Premises to be used for any unlawful purpose. Tenant shall have the right in common with other tenants of Landlord to use the parking facilities of the Project. Tenant agrees not to overburden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of parking facilities. Landlord shall provide the number of parking spaces set forth in the Basic Lease Information for use by Tenant. Landlord shall not be responsible for non-compliance by any other tenant or occupant of the Project with, or Landlord's failure to enforce, any of the rules or regulations or CC&Rs or any other terms or provisions of such tenant's or occupant's lease. Tenant shall promptly comply with the reasonable requirements of any board of fire insurance underwriters or other similar body now or hereafter constituted. Tenant shall not do any act which shall in any way encumber the title of Landlord in and to the Premises, the Building or the Project.
12. ENVIRONMENTAL MATTERS
12.1 Hazardous Materials. Except as is specifically permitted pursuant to Exhibit E (as modified from time to time in accordance with Section 11 of the Lease), Tenant shall not cause nor permit, nor allow any of Tenant's employees, agents, customers, visitors, invitees, licensees, contractors, assignees or subtenants (individually, a "Tenant Party" and collectively, "Tenant's Parties") to cause or permit, any Hazardous Materials to be brought upon, stored, manufactured, generated, blended, handled, recycled, treated, disposed or used on, under or about the Premises, the Building, the Common Area or the Project, except for the Permitted Hazardous Materials and/or routine office and janitorial supplies in usual and customary quantities stored, used and disposed of in accordance with all applicable Environmental Laws. As used herein, "Hazardous Materials" means any chemical, substance, material, controlled substance, object, condition, waste, living organism or combination thereof, whether solid, semi-solid, liquid or gaseous, which is or may be hazardous to human health or safety or to the environment due to its radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity, carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or potentially harmful properties or effects, including, without limitation, tobacco smoke, petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls (PCBs), refrigerants (including those substances defined in the Environmental Protection Agency's "Refrigerant Recycling Rule," as amended from time to time) and all of those chemicals, substances, materials, controlled substances, objects, conditions, wastes, living organisms or combinations thereof which are now or become in the future listed, defined or regulated in any manner by any Environmental Law based upon, directly or indirectly, such properties or effects. As used herein, "Environmental Laws" means any and all federal, state or local environmental, health and/or safety-related laws, regulations, standards, decisions of courts, ordinances, rules, codes, orders, decrees, directives, guidelines, permits or permit conditions, currently existing and as amended, enacted, issued or adopted in the future which are or become applicable to Tenant, the Premises, the Building, the Common Area or the Project. Tenant and Tenant's Parties shall comply with all Environmental Laws and promptly notify Landlord in writing of the violation of any Environmental Law (or the presence of any Hazardous Materials, other than the Permitted Hazardous Materials and/or office and janitorial supplies as permitted above), or the spill and/or release of any Hazardous Materials (including the Permitted Hazardous Materials), in, on, under or about the Premises or the improvements or the soil or groundwater thereunder. Landlord shall have the right to enter upon and inspect the Premises and to conduct tests, monitoring and investigations. If such tests indicate the presence of any environmental condition caused or exacerbated by Tenant or any Tenant Party or arising during Tenant's or any Tenant Party's occupancy, Tenant shall reimburse Landlord for the cost of conducting such tests. The phrase "environmental condition" shall mean any adverse condition relating to any Hazardous Materials or the environment, including surface water, groundwater, drinking water supply, land, surface or subsurface strata or the ambient air and includes air, land and water pollutants, noise, vibration, light and odors. In the event of any such environmental condition, Tenant shall promptly take any and all steps necessary to rectify the same to the satisfaction of the applicable agencies and Landlord, or shall, at Landlord's election, reimburse Landlord, upon demand, for the cost to Landlord of performing rectifying work. The reimbursement shall be paid to Landlord in advance of Landlord's performing such work, based upon Landlord's reasonable estimate of the cost thereof; and upon completion of such work by Landlord, Tenant shall pay to Landlord any shortfall promptly after receipt of Landlord's bills therefor or Landlord shall promptly refund to Tenant any excess deposit, as the case may be.
12.2 Tenant's Indemnification. Tenant shall indemnify, protect, defend (by
counsel acceptable to Landlord) and hold harmless Landlord and Landlord's
affiliated entities, and each of their respective members, managers, partners,
directors, officers, employees, shareholders, lenders, agents, contractors,
successors and assigns (individually and collectively, "Indemnitees") from and
against any and all claims, judgments, causes of action, damages, penalties,
fines, taxes, costs, liabilities, losses and expenses arising at any time during
or after the Term as a result (directly or indirectly) of or in connection with
(a) Tenant and/or any Tenant Party's breach of this Section 12, or (b) the
presence, spill and/or release of Hazardous Materials on, under or about the
Premises or other property
as a result (directly or indirectly) of Tenant's and/or any Tenant Party's activities, including, without limitation, those involving any Hazardous Materials (including the Permitted Hazardous Materials), or failure to act with respect thereto, in connection with the Premises. This indemnity shall include, without limitation, the cost of any required or necessary repair, cleanup or detoxification, and the preparation and implementation of any closure, monitoring or other required plans, whether such action is required or necessary prior to or following the termination of this Lease. Neither the written consent by Landlord to the presence of Hazardous Materials on, under or about the Premises, nor the strict compliance by Tenant with all Environmental Laws, shall excuse Tenant from Tenant's obligation of indemnification pursuant hereto. Tenant's obligations pursuant to the foregoing indemnity shall survive the expiration or termination of this Lease.
12.3 Pre-existing Conditions and Indemnification
12.3.1 Landlord hereby represents to Tenant that, to its actual knowledge, no environmental condition (as defined in Section 12.1) in violation of law presently exists as of the Effective Date on, under, or within the Premises (a "Pre-existing Condition"). For purposes of this Lease, current "actual knowledge" shall mean the actual, present knowledge of Dan Marcus and Jim Adams as of the date of this Lease, without investigation or inquiry of any kind.
12.3.2 Landlord shall indemnify, protect, defend (by counsel reasonably acceptable to Tenant) and hold harmless Tenant and its directors, officers, employees, shareholders, lenders, and each of their respective successors and assigns, from and against any and all claims, judgments, causes of action, damages, penalties, fines, taxes, costs, liabilities, losses and expenses (collectively, a "Claim") arising at any time during or after the Term to the extent that such Claim results from any Pre-existing Condition which (i) constitutes a breach of the representation set forth in Section 12.3.1, or (ii) was authorized by Landlord or caused by the acts or omissions of Landlord (but not the agents or contractors of Landlord or any other third party). The indemnity obligation set forth in this Section 12.3.2 is limited to claims and shall not include any consequential damages including, without limitation, any relocation expenses, loss of revenue, or other losses incurred by any party. Landlord's obligations pursuant to the foregoing indemnity shall survive the termination of this Lease for a period of one (1) year and shall not apply to any Claim not presented to Landlord in writing within said one (1) year period.
12.3.3 Landlord shall indemnify, protect, defend (by counsel reasonably acceptable to Tenant) and hold harmless Tenant and its directors, officers, employees, shareholders, and lenders, and each of their respective successors and assigns, from and against any and all orders, penalties, fines, administrative actions, or other proceedings (collectively, a "Compliance Obligation") commenced by any governmental agency including, without limitation, the United States Environmental Protection Agency as a result of any Pre-existing Condition (except to the extent that such Pre-existing Condition is caused or aggravated by the act or omission of Tenant and/or Tenant's Parties). The indemnity obligation set forth in this Section 12.3.3 is limited to Compliance Obligations and shall not include any consequential damages including, without limitation, any relocation expenses, loss of revenue, or other losses incurred by any party. Landlord's obligations pursuant to the foregoing indemnity shall survive the termination of this Lease for a period of one (1) year and shall not apply to any Compliance Obligation not presented to Landlord in writing within said one (1) year period.
12.3.4 The indemnity obligations of Landlord set forth in Sections 12.3.2 and 12.3.3 above shall not be binding upon any lender acquiring Landlord's interest in the Premises and/or this Lease pursuant to any foreclosure proceeding, deed in lieu of foreclosure, or other enforcement action taken pursuant to a deed of trust or mortgage encumbering the Premises.
13. DAMAGE AND DESTRUCTION
13.1 Casualty. If the Premises or Building should be damaged or destroyed
by fire or other casualty, Tenant shall give immediate written notice to
Landlord. Within thirty (30) days after receipt from Tenant of such written
notice, Landlord shall notify Tenant whether, after the date of the issuance of
permits for the necessary repair or reconstruction of the portion of the
Building or the Premises which was damaged, the necessary repairs can reasonably
be made: (a) within ninety (90) days; (b) in more than ninety (90) days but in
less than one hundred eighty (180) days; or (c) in more than one hundred eighty
(180) days.
13.1.1 Less Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed within ninety (90) days after the issuance of permits for the
necessary repair or reconstruction of the portion of the Building or Premises
which was damaged or destroyed, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, subject to
Section 13.2 below, Landlord shall repair the Premises, except that Landlord
shall not be required to rebuild, repair or replace Tenant's Property which may
have been placed in, on or about the Premises by or for the benefit of Tenant.
If Tenant is required to vacate all or a portion of the Premises during
Landlord's repair thereof, the Rent payable hereunder shall be abated
proportionately on the basis of the size of the area of the Premises that is
damaged (i.e., the number of square feet of floor area of the Premises that is
damaged compared to the total square footage of the floor area of the Premises)
from the date Tenant vacates all or a portion of the Premises that was damaged
only to the extent rental abatement insurance proceeds are received by Landlord
(or would have been received but for Landlord's failure to carry the insurance
required to be carried by Landlord pursuant to Section 8.1 above) and only
during the period the Premises are unfit for occupancy.
13.1.2 Greater Than 90 Days. If the Premises or Building should be
damaged only to such extent that rebuilding or repairs can reasonably be
completed in more than ninety (90) days but in less than one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, then Landlord shall have the option of: (a) terminating the Lease
effective upon the occurrence of such damage, in which event the Rent shall be
abated from the date Tenant vacates the Premises; or (b) electing to repair the
Premises, provided insurance proceeds are available (or such proceeds would have
been available but for Landlord's failure to carry insurance as described in
Section 8.1 above) to fully repair the damage, except that Landlord shall not
be required to rebuild, repair or replace Tenant's Property which may have been
placed in, on or about the Premises by or for the benefit of Tenant. If Tenant
is required to vacate all or a portion of the Premises during Landlord's repair
thereof, the Rent payable hereunder shall be abated proportionately on the basis
of the size of the area of the Premises that is damaged (i.e., the number of
square feet of floor area of the Premises that is damaged compared to the total
square footage of the floor area of the Premises) from the date Tenant vacates
all or a portion of the Premises that was damaged only to the extent rental
abatement insurance proceeds are received by Landlord (or such proceeds would
have been received by Landlord but for Landlord's failure to carry rental
abatement insurance as described in Section 8.1 above) and only during the
period the Premises are unfit for occupancy. In the event that Landlord should
fail to substantially complete such repairs within one hundred eighty (180) days
after the issuance of permits for the necessary repair or reconstruction of the
portion of the Building or Premises which was damaged or destroyed, (such period
to be extended for delays caused by Tenant or because of any items of Force
Majeure, as hereinafter defined) and Tenant has not re-occupied the Premises,
Tenant shall have the right, as Tenant's exclusive remedy, within ten (10) days
after the expiration of such one hundred eighty (180) day period, and provided
that such repairs have not been substantially completed within such ten (10) day
period, to terminate this Lease by delivering written notice to Landlord as
Tenant's exclusive remedy, whereupon all rights hereunder shall cease and
terminate thirty (30) days after Landlord's receipt of such notice.
13.1.3 Greater Than 180 Days. If the Premises or Building should be so
damaged that rebuilding or repairs cannot be completed within one hundred eighty
(180) days after the issuance of permits for the necessary repair or
reconstruction of the portion of the Building or Premises which was damaged or
destroyed, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Building or Premises, provided
insurance proceeds are available (or such proceeds would have been available but
for Landlord's failure to carry insurance as described in Section 8.1 above) to
repair the damage except that Landlord shall not be required to rebuild, repair
or replace Tenant's Property which may have been placed in, on or about the
Premises by or for the benefit of Tenant. If Tenant is required to vacate all or
a portion of the Premises during Landlord's repair thereof, the Rent payable
hereunder shall be abated proportionately on the basis of the size of the area
of the Premises that is damaged (i.e., the number of square feet of floor area
of the Premises that is damaged compared to the total square footage of the
floor area of the Premises), from the date Tenant vacates all or a portion of
the Premises that was damaged only to the extent rental abatement insurance
proceeds are received by Landlord (or such proceeds would have been received by
Landlord but for Landlord's failure to carry rental abatement insurance as
described in Section 8.1 above) and only during the period that the Premises are
unfit for occupancy.
13.1.4 Casualty During the Last Year of the Lease term. Notwithstanding any other provisions hereof, if the Premises or the Building shall be damaged within the last year of the Lease Term, and if the cost to repair or reconstruct the portion of the Building or the Premises which was damaged or destroyed shall exceed Landlord's then-applicable insurance deductible, then, irrespective of the time necessary to complete such repair or reconstruction, Landlord shall have the right, in its sole discretion, to terminate the Lease effective upon the occurrence of such damage, in which event the Rent shall be abated from the date Tenant vacates the Premises. The foregoing right shall be in addition to any other right and option of Landlord under this Section 13.
13.2 Tenant's Fault. If the Premises or any portion of the Building is damaged resulting from the negligence or breach of this Lease by Tenant or any of Tenant's Parties, Rent shall not be reduced during the repair of such damage and Tenant shall be liable to Landlord for the cost of the repair caused thereby to the extent such cost is not covered by insurance proceeds received by Landlord.
13.3 Uninsured Casualty. Tenant shall be responsible for and shall pay to Landlord Tenant's Share of any deductible or retention amount payable under the property insurance for the Building. Notwithstanding Section 13.1, in the event that the Premises or any portion of the Building is damaged to the extent Tenant is unable to use the Premises and such damage is not covered by insurance proceeds received by Landlord or in the event that the holder of any indebtedness secured by the Premises requires that the insurance proceeds be applied to such indebtedness, then Landlord shall have the right at Landlord's option either (i) to repair such damage as soon as reasonably possible at Landlord's expense, or (ii) to give written notice to Tenant within thirty (30) days after the date of the occurrence of such damage of Landlord's intention to terminate this Lease as of the date of the occurrence of such damage. In the event Landlord elects to terminate this Lease, Tenant shall have the right within ten (10) days after receipt of such notice to give written notice to Landlord of Tenant's commitment to pay the cost of repair of such damage, in which event this Lease shall continue in full force and effect, and Landlord shall make such repairs as soon as reasonably possible subject to the following condition: Tenant shall deposit with Landlord Landlord's estimated cost of such repairs not later man ten (10) days prior to Landlord's commencement of the repair work. If the cost of such repairs exceeds the amount deposited, Tenant shall reimburse Landlord for such excess cost within fifteen (15) days after receipt of an invoice from Landlord. Any amount deposited by Tenant in excess of the cost of such repairs shall be refunded within thirty (30) days of Landlord's final payment to Landlord's contractor. If Tenant does not give such notice within the ten (10) day period, or fails to make such deposit as required, this Lease shall terminate automatically as of the date of the occurrence of the damage.
13.4 Waiver. With respect to any damage or destruction which Landlord is obligated to repair or may elect to repair, Tenant waives all rights to terminate this Lease pursuant to rights otherwise presently or hereafter accorded by law.
14. EMINENT DOMAIN
14.1 Total Condemnation. If all of the Premises is condemned by eminent domain, inversely condemned or sold under threat of condemnation for any public or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of the earlier of the date the condemning authority takes title to or possession of the Premises, and Rent shall be adjusted to the date of termination.
14.2 Partial Condemnation. If any portion of the Premises or the Building is Condemned and such partial condemnation materially impairs Tenant's ability to use the Premises for Tenant's business, Landlord shall have the option of either (i) relocating Tenant to comparable space within the Project or (ii) terminating this Lease as of the earlier of the date title vests in the condemning authority or as of the date an order of immediate possession is issued and Rent shall be adjusted to the date of termination. In the event of relocation, Landlord shall pay the cost of constructing tenant improvements in the new premises that are substantially equivalent to the improvements made pursuant to the Work Letter, provided that Landlord receive from the condemning authority proceeds sufficient to construct such improvements. If such partial condemnation does not materially impair Tenant's ability to use the Premises for the business of Tenant, Landlord shall promptly restore the Premises to the extent of any condemnation proceeds recovered by Landlord, excluding the portion thereof lost in such condemnation, and this Lease shall continue in full force and effect except that after the date of such title vesting or order of immediate possession Rent shall be adjusted as reasonably determined by Landlord.
14.3 Award. If the Premises are wholly or partially Condemned, Landlord shall be entitled to the entire award paid for such condemnation, and Tenant waives any claim to any part of the award from Landlord or the condemning authority; provided, however, Tenant shall have the right to recover from the condemning authority such compensation as may be separately awarded to Tenant in connection with costs in removing Tenant's merchandise, furniture, fixtures, leasehold improvements and equipment to a new location, for business interruption, loss of good will or other consequential damages. No condemnation of any kind shall be construed to constitute an actual or constructive eviction of Tenant or a breach of any express or implied covenant of quiet enjoyment.
14.4 Temporary Condemnation. In the event of a temporary condemnation not extending beyond the Term, this Lease shall remain in effect, Tenant shall continue to pay Rent and Tenant shall receive any award made for such condemnation except damages to any of Landlord's property. If a temporary condemnation is for a period which extends beyond the Term, this Lease shall terminate as of the date of initial occupancy by the condemning authority and any such award shall be distributed in accordance with the preceding section. If a temporary condemnation remains in effect at the expiration or earlier termination of this Lease, Tenant shall pay Landlord the reasonable cost of performing any obligations required of Tenant with respect to the surrender of the Premises.
15. DEFAULT
15.1 Events of Defaults. The occurrence of any of the following events shall, at Landlord's option, constitute an "Event of Default":
15.1.1 Abandonment of the Premises for a period of thirty (30) consecutive days;
15.1.2 Failure to pay Rent on the date when due and the failure continuing for a period of five (5) days after such payment is due;
15.1.3 Failure to perform Tenant's covenants and obligations hereunder (except default in the payment of Rent) where such failure continues for a period of thirty (30) days after written notice from Landlord; provided, however, if the nature of the default is such that more than thirty (30) days are reasonably required for its cure, Tenant shall not be deemed to be in default if Tenant commences the cure within ten (10) days after written notice from Landlord and diligently and continuously prosecutes such cure to completion;
15.1.4 The making of a general assignment by Tenant for the benefit of creditors; the filing of a voluntary petition by Tenant or the filing of an involuntary petition by any of Tenant's creditors seeking the rehabilitation, liquidation or reorganization of Tenant under any law relating to bankruptcy, insolvency or other relief of debtors and, in the case of an involuntary action, the failure to remove or discharge the same within sixty (60) days of such filing; the appointment of a receiver or other custodian to take possession of substantially all of Tenant's assets or this leasehold; Tenant's insolvency or inability to pay Tenant's debts or failure generally to pay Tenant's debts when due; any court entering a decree or order directing the winding up or liquidation of Tenant or of substantially all of Tenant's assets; Tenant taking any action toward the dissolution or winding up of Tenant's affairs; the cessation or suspension of Tenant's use of the Premises; or the attachment, execution or other judicial seizure of substantially all of Tenant's, assets or this leasehold;
15.1.5 The making of any material misrepresentation or omission by Tenant or any successor in interest of Tenant in any materials delivered by or on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or
15.1.6 The occurrence of an Event of Default set forth in Section 15.1.4 or 15.1.5 with respect to any guarantor of this Lease, if applicable.
15.2 Remedies
15.2.1 Termination. In the event of the occurrence of any Event of
Default, Landlord shall have the right to give a written termination notice to
Tenant (which notice may be the notice given under Section 15.1 above, if
applicable, and which notice shall be in lieu of any notice required by O.R.S.
Section 105.120 or any other
Oregon law) and, on the date specified in such notice, this Lease shall terminate unless on or before such date all arrears of Rent and all other sums payable by Tenant under this Lease and all costs and expenses incurred by or on behalf of Landlord hereunder shall have been paid by Tenant and all other Events of Default at the time existing shall have been fully remedied to the satisfaction of Landlord.
15.2.1.1 Repossession. Following termination, without prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom and any other persons occupying the Premises, using such legal proceedings, or other procedures permitted by applicable law, as may be available; (ii) repossess the Premises or relet the Premises or any part thereof for such term (which may be for a term extending beyond the Term), at such rental and upon such other terms and conditions as Landlord in Landlord's sole discretion shall determine, with the right to make reasonable alterations and repairs to the Premises; and (iii) remove all personal property therefrom.
15.2.1.2 Unpaid Rent. Landlord shall have all the rights and
remedies of a landlord provided by Applicable Law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that had been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) the worth, at
the time of award, of the amount 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 Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
15.2.2 Continuation. Even though an Event of Default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant's right to possession; and Landlord may enforce all of Landlord's rights and remedies under this Lease allowed by law ("lessor" may continue the Lease in effect after "lessee's" breach and abandonment and recover Rent as it becomes due) to recover Rent as it becomes due. Landlord, without terminating this Lease, may, during the period Tenant is in default, enter the Premises and relet the same, or any portion thereof, to third parties for Tenant's account and Tenant shall be liable to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers' commissions, expenses of remodeling the Premises and like costs. Reletting may be for a period shorter or longer than the remaining Term. Tenant shall continue to pay the Rent on the date the same is due. No act by Landlord hereunder, including acts of maintenance, preservation or efforts to lease the Premises or the appointment of a receiver upon application of Landlord to protect Landlord's interest under this Lease, shall terminate this Lease unless Landlord notifies Tenant that Landlord elects to terminate this Lease. In the event that Landlord elects to relet the Premises, the rent that Landlord receives from reletting shall be applied to the payment of, first, any indebtedness from Tenant to Landlord other than Base Rent and Tenant's Share of Operating Expenses (including Real Property Taxes); second, all costs, including maintenance, incurred by Landlord in reletting; and, third, Base Rent and Tenant's Share of Operating Expenses (including Real Property Taxes) under this. Lease. After deducting the payments referred to above, any sum remaining from the rental Landlord receives from reletting shall be held by Landlord and applied in payment of future Rent as Rent becomes due under this Lease. In no event, and notwithstanding anything in Section 16 to the contrary, shall Tenant be entitled to any excess rent received by Landlord. If, on the date Rent is due under this Lease, the rent received from the reletting is less than the Rent due on that date, Tenant shall pay to Landlord, in addition to the remaining Rent due, all costs, including maintenance, which Landlord incurred in reletting the Premises that remain after applying the rent received from reletting as provided hereinabove. So long as this Lease is not terminated, Landlord shall have the right to remedy any default of Tenant, to maintain or improve the Premises, to cause a receiver to be appointed to administer the Premises and new or existing subleases and to add to the Rent payable hereunder all of Landlord's reasonable costs in so doing, with interest at the Applicable Interest Rate from the date of such expenditure. Landlord shall have no duty to relet the Premises so long as it has other unleased space available in the Project.
15.3 Cumulative. Each right and remedy of Landlord provided for herein or now or hereafter existing at law, in equity, by statute or otherwise shall be cumulative and shall not preclude Landlord from exercising any other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity, by statute or
otherwise. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment as Rent shall be deemed an accord and satisfaction of full payment of Rent; and Landlord may accept such payment without prejudice to Landlord's right to recover the balance of such Rent or to pursue other remedies.
16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet or otherwise transfer, whether voluntarily or involuntarily or by operation of law, the Premises or any part thereof without Landlord's prior written approval, which shall not be unreasonably withheld; provided, however, Tenant agrees it shall be reasonable for Landlord to disapprove of a requested sublease or assignment, if the proposed subtenant or assignee does not have a tangible net worth (as determined in accordance with generally accepted accounting principles consistently applied) equal to or greater than that of Tenant as of the date of the Lease as shown in the financial information provided to Landlord, or if the proposed subtenant or assignee is currently a tenant in any other space leased by Landlord or if such proposed subtenant or assignee is in the process of negotiation with Landlord to lease other space owned or managed by Landlord. The merger of Tenant with any other entity in which Tenant does not retain a controlling ownership or beneficial interest or the transfer of any controlling or managing ownership or beneficial interest in Tenant, or the assignment of a substantial portion of the assets of Tenant, whether or not located at the Premises, shall constitute an assignment hereunder. If Tenant desires to assign this Lease or sublet any or all of the Premises, Tenant shall give Landlord written notice thereof with copies of all related documents and agreements associated with the assignment or sublease, including without limitation, the financial statements of any proposed assignee or subtenant, forty-five (45) days prior to the anticipated effective date of the assignment or sublease. Tenant shall pay Landlord's reasonable attorneys' fees incurred in the review of such documentation plus an administrative fee of Five Hundred Dollars ($500.00) for each proposed transfer. Landlord shall have a period of thirty (30) days following receipt of such notice and all related documents and agreements to notify Tenant in writing of Landlord's approval or disapproval of the proposed assignment or sublease. If Landlord fails to notify Tenant in writing of such election, Landlord shall be deemed to have disapproved such assignment or subletting. This Lease may not be assigned by operation of law. If the proposed assignment or sublease is for substantially the remainder of the Term, Landlord may terminate the Lease (or in the case of a partial sublease, terminate the Lease with respect to the portion of the Premises proposed to be subject to the sublease) by giving written notice to Tenant within such thirty (30) day period. Any purported assignment or subletting contrary to the provisions hereof shall be void and shall constitute an Event of Default hereunder. If Tenant receives rent or other consideration for any such transfer in excess of the Rent, or in case of the sublease of a portion of the Premises, in excess of such Rent that is fairly allocable to such portion, after appropriate adjustments to assure that all other payments required hereunder are appropriately taken into account, Tenant shall pay Landlord one hundred percent (100%) of the difference between each such payment of rent or other consideration and the Rent required hereunder. Landlord may, without waiving any rights or remedies, collect rent from the assignee, subtenant or occupant and apply the net amount collected to the Rent herein reserved and apportion any excess rent so collected in accordance with the terms of the preceding sentence. Such acceptance of Rent shall in no event be deemed to imply that Landlord is approving a subtenant or assignee which Landlord has not approved in writing pursuant to the requirements of this Section 16. Tenant shall continue to be liable as a principal and not as a guarantor or surety to the same extent as though no assignment had been made. Landlord may consent to subsequent assignments or subletting of this Lease or amendments or modifications to the Lease by assignees of Tenant without notifying Tenant or any successor of Tenant and without obtaining their consent. No permitted assignment (but excluding a permitted sublease) shall be effective until there has been delivered to Landlord a counterpart of the assignment instrument in which the assignee agrees to be and remain jointly and severally liable with Tenant for the payment of Rent pertaining to the Premises and for the performance of all the terms and provisions of this Lease relating thereto arising on or after the date of the transfer.
17. ESTOPPEL, ATTORNMENT AND SUBORDINATION
17.1 Estoppel. Within ten (10) days after written request by Landlord, Tenant shall deliver an estoppel certificate duly executed (and acknowledged if required by any lender), substantially in the form attached hereto as Exhibit H, or in such other form as may be acceptable to the lender, which form may include some or all of the provisions contained in Exhibit H, to any proposed mortgagee, purchaser or Landlord. Tenant's failure to deliver said statement in such time period shall be an Event of Default hereunder and shall be conclusive upon Tenant that (a) this Lease is in full force and effect, without modification except as may be represented by Landlord; (b) there are no uncured defaults in Landlord's performance and Tenant has no right of offset, counterclaim or deduction against Rent hereunder; and (c) no more than one month's Base Rent has been paid in advance. If any financier
should require that this Lease be amended (other than in the description of the Premises, the term, the Permitted Use, the Rent or as will substantially, materially or adversely affect the rights of Tenant), Landlord shall give written notice thereof to Tenant, which notice shall be accompanied by a Lease supplement embodying such amendments. Tenant shall, within ten (10) days after the receipt of Landlord's notice, execute and deliver to Landlord the tendered Lease supplement. If Tenant fails to deliver to Landlord the tendered Lease supplement within ten (10) days after receipt of Landlord's notice, Tenant shall be deemed to have given Landlord a power of attorney to execute such supplement on behalf of Tenant.
17.2 Subordination. This Lease shall be subject and subordinate to all ground leases, master leases and the lien of all mortgages and deeds of trust which now or hereafter affect the Premises or the Project or Landlord's interest therein, and all amendments thereto, provided that Tenant receives a Subordination, Nondisturbance and Attornment Agreement ("SNDA") in the form attached hereto as Exhibit I (or such other form as may be commercially reasonable which form may include some or all of the provisions contained in Exhibit I, so long as such form of SNDA includes a non-disturbance agreement in favor of Tenant) or as otherwise may be required by the applicable lender, ground lessee and/or master lessor (so long as such documentation includes a non-disturbance agreement in favor of Tenant). If requested, Tenant shall execute and deliver to Landlord within ten (10) days after Landlord's request whatever documentation that may reasonably be required to further effect the provisions of this paragraph including an SNDA in the form attached hereto as Exhibit I (or such other form as may be commercially reasonable which form may include some or all of the provisions contained in Exhibit I, so long as such form of SNDA includes a non-disturbance agreement in favor of Tenant) or as otherwise may be required by the applicable lender, ground lessee and/or master lessor (so long as such documentation includes a non-disturbance agreement in favor of Tenant).
17.3 Attornment. Tenant hereby agrees that Tenant will recognize as its landlord under this Lease and shall attorn to any person succeeding to the interest of Landlord in respect of the land and the buildings governed by this Lease upon any foreclosure of any mortgage upon such land or buildings or upon the execution of any deed in lieu of foreclosure in respect to such deed of trust. If requested, Tenant shall execute and deliver an instrument or instruments confirming its attornment as provided for herein; provided, however, that no such beneficiary or successor-in-interest shall be bound by any payment of Base Rent for more than one (1) month in advance, or any amendment or modification of this Lease made without the express written consent of such beneficiary where such consent is required under applicable loan documents.
18. MISCELLANEOUS
18.1 General
18.1.1 Entire Agreement. This Lease sets forth all the agreements between Landlord and Tenant concerning the Premises; and there are no agreements either oral or written other than as set forth herein.
18.1.2 Time of Essence. Time is of the essence of this Lease.
18.1.3 Attorneys' Fees. In any action or proceeding which either party brings against the other to enforce its rights hereunder, the nonprevailing party shall pay all costs incurred by the prevailing party, including reasonable attorneys' fees, which amounts shall be a part of the judgment in said action or proceeding.
18.1.4 Severability. If any provision of this Lease or the application of any such provision shall be held by a court of competent jurisdiction to be invalid, void or unenforceable to any extent, the remaining provisions of this Lease and the application thereof shall remain in full force and effect and shall not be affected, impaired or invalidated.
18.1.5 Law. This Lease shall be construed and enforced in accordance with the laws of the state in which the Premises are located.
18.1.6 No Option. Submission of this Lease to Tenant for examination or negotiation does not constitute an option to lease, offer to lease or a reservation of, or option for, the Premises; and this document shall become effective and binding only upon the execution and delivery hereof by Landlord and Tenant.
18.1.7 Successors and Assigns. This Lease shall be binding upon and inure to the benefit of the successors and assigns of Landlord and, subject to compliance with the terms of Section 16, Tenant.
18.1.8 Third Party Beneficiaries. Nothing herein is intended to create any third party benefit.
18.1.9 Memorandum of Lease. On or before fifteen (15) business days following a written request by either Landlord or Tenant, the parties agree to execute and record a short form memorandum of this Lease, in a recordable form reasonably acceptable to Landlord and Tenant. Within five (5) business days following the expiration or earlier termination of this Lease, Tenant shall execute (and have properly notarized) and deliver to Landlord a Quitclaim Deed, in recordable form, quitclaiming, terminating and forever surrendering any and all right, title or interests Tenant may have in or to the Premises.
18.1.10 Agency, Partnership or Joint Venture. Nothing contained herein nor any acts of the parties hereto shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture by the parties hereto or any relationship other than the relationship of landlord and tenant.
18.1.11 Merger. The voluntary or other surrender of this Lease by Tenant or a mutual cancellation thereof or a termination by Landlord shall not work a merger and shall, at the option of Landlord, terminate all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.
18.1.12 Headings. Section headings have been inserted solely as a matter of convenience and are not intended to define or limit the scope of any of the provisions contained therein.
18.1.13 Security Measures. Tenant hereby acknowledges that Landlord shall have no obligation to provide a guard service or other security measures whatsoever. Tenant assumes all responsibility for the protection of the Premises, Tenant, its agents and invitees and their property from the acts of third parties.
18.2 Signs. All signs and graphics of every kind visible in or from public view or corridors, the Common Areas or the exterior of the Premises (whether located inside or outside of the Premises) shall be subject to Landlord's prior written approval (not to be unreasonably withheld) and shall be subject to the CC&Rs and any applicable governmental laws, ordinances, and regulations and in compliance with Landlord's signage program (if any). Tenant shall remove all such signs and graphics prior to the termination of this Lease. Such installations and removals shall be made in such manner as to avoid injury or defacement of the Premises; and Tenant shall repair any injury or defacement, including without limitation, discoloration caused by such installation or removal.
18.3 Waiver. No waiver of any default or breach hereunder shall be implied from any omission to take action on account thereof, notwithstanding any custom and practice or course of dealing. No waiver by either party of any provision under this Lease shall be effective unless in writing and signed by such party. No waiver shall affect any default other than the default specified in the waiver and then such waiver shall be operative only for the time and to the extent therein stated. Waivers of any covenant shall not be construed as a waiver of any subsequent breach of the same.
18.4 Financial Statements. Tenant shall provide, and cause each Guarantor, if applicable, to provide to any lender, any purchaser of the Building and/or the Project or Landlord, within ten (10) days after request, a current, accurate, audited (or reviewed and certified by Tenant) financial statement for Tenant and Tenant's business and financial statements for Tenant and Tenant's business for each of the three (3) years prior to the current financial statement year prepared under generally accepted accounting principles consistently applied. Tenant shall also provide within said 10-day period such other financial information as may be reasonably required by Landlord, any
purchaser of the Building and/or the Project or any lender; Landlord shall keep or cause to be kept all such financial information strictly confidential.
18.5 Limitation of Liability. The obligations of Landlord under this Lease are not personal obligations of the individual partners, members, managers, directors, officers, shareholders, agents or employees of Landlord; and, subject to this Section 18.5, Tenant shall look solely to the Building and the Land for satisfaction of any liability of Landlord and shall not look to other assets of Landlord nor seek recourse against the assets of the individual partners, directors, officers, shareholders, agents or employees of Landlord. Whenever Landlord transfers its interest, Landlord shall be automatically released from further performance under this Lease and from all further liabilities and expenses hereunder and the transferee of Landlord's interest shall assume all liabilities and obligations of Landlord hereunder from the date of such transfer, provided, however, Landlord shall remain liable for any unperformed obligations arising prior to the date of such transfer.
18.6 Notices. All notices to be given hereunder shall be in writing and
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile,
electronically confirmed, (immediately followed by one of the preceding
methods), to Landlord's Address and Tenant's Address, or to such other place as
Landlord or Tenant may designate in a written notice given to the other party.
Notices shall be deemed served upon the first attempted delivery by the U.S.
Postal Service, the courier or a recognized overnight delivery service, or upon
receipt of the facsimile prior to 5 p.m. on any business day, or, if after 5
p.m., on the next business day.
18.7 Brokerage Commission. Landlord shall pay a brokerage commission to Landlord's Broker specified in the Basic Lease Information in accordance with a separate agreement between Landlord and Landlord's Broker. Landlord shall have no further or separate obligation for payment of any commissions or fees to any other broker or finder. Tenant warrants to Landlord that Tenant's sole contact with Landlord or with the Premises in connection with this transaction has been directly with Landlord, Landlord's Broker and Tenant's Broker specified in the Basic Lease Information, and that no other broker or finder can properly claim a right to a commission or a finder's fee based upon contacts between the claimant and Tenant. Any commissions or fees payable to Tenant's Broker with respect to this transaction shall be paid by Landlord's Broker, and Landlord and Tenant shall have no obligation with respect thereto. Subject to the foregoing, Tenant agrees to indemnify and hold Landlord harmless from any claims or liability, including reasonable attorneys' fees, in connection with a claim by any person for a real estate broker's commission, finder's fee or other compensation based upon any statement, representation or agreement of Tenant, and Landlord agrees to indemnify and hold Tenant harmless from any such claims or liability, including reasonable attorneys' fees, based upon any statement, representation or agreement of Landlord.
18.8 Authorization. Each individual executing this Lease on behalf of Tenant represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of Tenant and that such execution is binding upon Tenant.
18.9 Holding Over: Surrender
18.9.1 Holding Over. If Tenant holds over the Premises or any part thereof after expiration of the Term, such holding over shall, at Landlord's option, constitute a month-to-month tenancy, at a rent equal to one hundred fifty percent (150%) of the Base Rent in effect immediately prior to such holding over and shall otherwise be on all the other terms and conditions of this Lease. This paragraph shall not be construed as Landlord's permission for Tenant to hold over. Acceptance of Rent by Landlord following expiration or termination shall not constitute a renewal of this Lease or extension of the Term except as specifically set forth above. If Tenant fails to surrender the Premises upon expiration or earlier termination of this Lease, Tenant shall indemnify and hold Landlord harmless from and against all loss or liability resulting from or arising out of Tenant's failure to surrender the Premises, including, but not limited to, any amounts required to be paid to any tenant or prospective tenant who was to have occupied the Premises after the expiration or earlier termination of this Lease and any related attorneys' fees and brokerage commissions.
18.9.2 Surrender. Upon the expiration or earlier termination of this Lease, Tenant shall repair any damage to and restore the condition of the Premises in accordance with Section 10.2. Tenant shall surrender the Premises, together with all keys, to Landlord broom clean and in as good a condition as when received, ordinary
wear and tear and damage by fire or casualty excepted. In addition, Tenant shall remove any and all debris from the Common Area caused by Tenant and surrender any portion of the Common Area regularly used by Tenant broom clean and in as good a condition as when Tenant's use thereof commenced, ordinary wear and tear and damage by fire or casualty excepted. Conditions existing because of Tenant's failure to perform maintenance, repairs or replacements shall not be deemed "reasonable wear and tear."
18.10 Joint and Several. If Tenant consists of more than one person, the obligation of all such persons shall be joint and several.
18.11 Covenants and Conditions. Each provision to be performed by Tenant hereunder shall be deemed to be both a covenant and a condition.
18.12 Auctions. Tenant shall not conduct, nor permit to be conducted, any auction upon the Premises without Landlord's prior written consent. Landlord shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.
18.13 Consents. Except as otherwise provided elsewhere in this Lease, Landlord's actual reasonable costs and expenses (including, but not limited to, architects', attorneys', engineers' and other consultants' fees) incurred in the consideration of, or response to, a request by Tenant for any Landlord consent, including but not limited to, consents to an assignment, a subletting or the presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of an invoice and supporting documentation therefor. Landlord's consent to any act, assignment or subletting shall not constitute an acknowledgment that no Event of Default or breach by Tenant of this Lease exists, nor shall such consent be deemed a waiver of any then existing Event of Default or breach, except as may be otherwise specifically stated in writing by Landlord at the time of such consent. Except as otherwise set forth herein, the failure to specify herein any particular condition to Landlord's consent shall not preclude the imposition by Landlord at the time of consent of such further or other conditions as are then reasonable with reference to the particular matter for which consent is being given.
18.14 Force Majeure. "Force Majeure" as used herein means delays resulting from causes beyond the reasonable control of the other party, including, without limitation, any delay caused by any action, inaction, order, ruling, moratorium, regulation, statute, condition or other decision of any private party or governmental agency having jurisdiction over any portion of the Project, over the construction anticipated to occur thereon or over any uses thereof, or by delays in inspections or in issuing approvals by private parties or permits by governmental agencies, or by fire, flood, inclement weather, strikes, lockouts or other labor or industrial disturbance (whether or not on the part of agents or employees of either party hereto engaged in the construction of the Premises), civil disturbance, order of any government, court or regulatory body claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage, blockage, embargo, failure or inability to secure materials, supplies or labor through ordinary sources by reason of shortages or priority, discovery of hazardous or toxic materials, earthquake, or other natural disaster, delays caused by any dispute resolution process, or any cause whatsoever beyond the reasonable control (excluding financial inability) of the party whose performance is required, or any of its contractors or other representatives, whether or not similar to any of the causes hereinabove stated.
18.15 Mortgagee Protection. Tenant agrees to give any holder of any mortgage or deed of trust secured by the Real Property, by registered or certified mail or nationally recognized overnight delivery service, a copy of any notice of default served upon the Landlord by Tenant, provided that, prior to such notice, Tenant has been notified in writing (by way of service on Tenant of a copy of assignment of rents and leases or otherwise) of the address of such holder of a mortgage or deed of trust. Tenant further agrees that if Landlord shall have failed to cure such default within thirty (30) days after such notice to Landlord (or if such default cannot be cured or corrected within that time, then such additional time as may be necessary if Landlord has commenced within such thirty (30) day period and is diligently pursuing the remedies or steps necessary to cure or correct such default), then the holder of any mortgage or deed of trust shall have an additional sixty (60) days within which to cure or correct such default (or if such default cannot be cured or corrected within that time, then such additional time as may be necessary if such holder of any mortgage or deed of trust has commenced within such sixty (60) day period and is diligently pursuing the remedies or steps necessary to cure or correct such default). Notwithstanding the foregoing, in no event shall any holder of any mortgage or deed of trust have any obligation to cure any default of the Landlord.
l8.l6 Hazardous Substance Disclosure. Gasoline and other automotive fluids, asbestos containing materials, maintenance fluids, copying fluids and other office supplies and equipment, certain construction and finish materials, tobacco smoke, cosmetics and other personal items may be present on the project. Gasoline and other automotive fluids are found in the garage and parking areas of the Project. Cleaning, lubricating and hydraulic fluids used in the operation and maintenance of the Building are found in the utility areas of the Building not generally accessible to Building occupants or the public. Many Building occupants use copy machines and printers with associated fluids and toners, and pens, markers, inks, and office equipment that may contain Hazardous Materials. Certain adhesives, paints and other construction materials and finishes used in portions of the Building may contain Hazardous Materials. The Building may from time to time be exposed to tobacco smoke. Building occupants and other persons entering the Building from time to time may use or carry prescription and non-prescription drugs, perfumes, cosmetics and other toiletries, and foods and beverages, some of which may contain Hazardous Materials. By its execution of this Lease, Tenant acknowledges the notice set forth hereinabove.
18.17 ADA Compliance. Notwithstanding Section 1.1 above, Landlord warrants to Tenant that on the Commencement Date, the Premises (including any improvements constructed by Landlord pursuant to the Work Letter) shall comply with the requirements of the Americans with Disabilities Act [42 U.S.C. Section 12101 et seq.] ("ADA") as in effect and promulgated on the Commencement Date (the "ADA Warranty"). The ADA Warranty shall not apply to any improvements or alterations made by or at the request of Tenant (except as specifically set forth in the Work Letter). Except as otherwise provided in this Lease, if the Premises do not comply with the ADA Warranty, promptly after Landlord's receipt of written notice from Tenant given within six (6) months after the Commencement Date specifying in detail the nature and extent of such non-compliance, Landlord, at Landlord's sole cost and expense, shall take such action as is reasonably necessary to remedy such non-compliance.
18.18 Addenda. The Addenda attached hereto, if any, and identified with this Lease are incorporated herein by this reference as if fully set forth herein.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date set forth above.
"Landlord" "Tenant" CATELLUS DEVELOPMENT CORPORATION, SYNETICS SOLUTIONS INC., a Delaware corporation an Oregon corporation By: Catellus Commercial Group, LLC, By: /s/ Koki Nakamura a Delaware limited liability ------------------------------------ company Name: KOKI NAKAMURA Its: Duly Authorized Agent Its: CEO By: /s/ TWA Date: --------------------------------- ---------------------------------- Name: ------------------------------- Title: ------------------------------ Date: 12-20-00 By: /s/ GREG MARVELL ------------------------------------ Name: GREG MARVELL Its: PRESIDENT Date: 12/9/00 |
ADDENDUM TO LEASE
THIS ADDENDUM TO LEASE ("Addendum") is attached to and constitutes an integral part of the Lease between CATELLUS DEVELOPMENT CORPORATION, as Landlord, and SYNETICS SOLUTIONS, INC., Inc., as Tenant. The terms of this Addendum shall be incorporated in the Lease for all purposes. In the event of a conflict between the provisions of the Lease and the provisions of this Addendum, this Addendum shall control.
The following new Section is hereby added to the Lease which state in their entirety as follows:
19. Option to Extend Provided (i) Tenant is not in default under the terms of this Lease at the time this renewal option is exercised or at the commencement of the Extension Term (as hereinafter defined), (ii) Tenant is occupying at least ninety percent (90%) of the Premises, including any expansion space, and (iii) Landlord has not given more than two (2) notices of default in any twelve (12) month period for nonpayment of monetary obligations, Tenant shall have the option to renew this Lease for an additional period of sixty (60) months ("Extension Term"). The Extension Term shall be on all the terms and conditions of this Lease, except that Landlord shall have no additional obligation for free rent, leasehold improvements or for any other tenant inducements for the Extension Term. Base Rent during the Extension Term shall be equal to the Base Rent set forth in the Basic Lease Information for one hundred twenty-first (121st) month through the one hundred eightieth (180th) month of the Lease Term and the Security Deposit will be increased to reflect any increase in Base Rent payable under the Lease. There shall be no additional extension terms beyond the Extension Term set forth herein. Tenant must exercise its option to extend this Lease by giving Landlord written notice of its election to do so no later than one hundred eighty (180) nor earlier than three hundred sixty (360) days prior to the end of the initial Term (i.e. the last day of the one hundred twentieth (120th) month). Any notice not given in a timely manner, shall be void, and Tenant shall be deemed to have waived its extension rights. The extension option set forth herein is personal to Tenant and shall not be included in any assignment of this Lease.
T.A. K.N. ------------------------------------- ---------------------------------------- Landlord's Initials Tenant's Initials |
CATELLUS
(SOUTHSHORE CORPORATE PARK PLAN)
EXHIBIT A-1
(SITE PLAN)
EXHIBIT A-2
EXHIBIT B
WORK LETTER
THIS WORK LETTER ("Work Letter") is entered into as of this ____ day of December, 2000, by and between CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation ("Landlord"), and SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant").
RECITALS:
A. Landlord and Tenant have entered into that certain Multi-Tenant Industrial Triple Net Lease (the "Lease") dated as of the date hereof, covering certain premises (the "Premises") more particularly described in the Lease. This Work Letter is attached to the Lease as Exhibit B. The Lease is hereby incorporated into this Work Letter by this reference. Capitalized terms not defined in this Work Letter shall have the meanings given to such terms in the Lease.
B. In consideration of the mutual covenants contained in the Lease and this Work Letter, Landlord and Tenant hereby agree as follows:
AGREEMENT:
1. Definitions. As used in this Work Letter and in the Lease, the term "Shell" shall mean the completed concrete, precast industrial building containing approximately 180,000 square feet of floor area (the "Building") of which the Premises is a part, excluding the Tenant Improvements (as hereinafter defined). As used in this Work Letter and in the Lease, the term "Tenant Improvements" shall mean those certain improvements to be constructed in the Premises set forth on the "Final Plans" (defined in Section 5(c) of this Work Letter). As used in this Work Letter and in the Lease, "Improvements" shall mean the Shell and the Tenant Improvements. The construction and installation of the Tenant Improvements is sometimes referred to herein as the "Work".
2. Completion of Improvements. Subject to the terms of the Lease and this Work Letter and any "Tenant Delay" or "Force Majeure Delay" as provided herein, Landlord shall use its commercially reasonable and diligent efforts to cause the "Contractor" (defined in Section 7 of this Work Letter) to complete the construction and installation of the Tenant Improvements in accordance with the terms of this Work Letter.
3. Designation of Representatives. With respect to the planning, design and construction of the Tenant Improvements, Landlord hereby designates Dan Marcus, Jeffrey Lee and Bill Schmitt as "Landlord's Representatives" and Tenant hereby designates Phil Coons and Steve Burchett as "Tenant's Representatives". Tenant hereby confirms that Tenant's Representatives have full authority to act on behalf of and to bind Tenant with respect to all matters pertaining to the planning, design and construction of the Tenant Improvements. Landlord hereby confirms that Landlord's Representatives have limited authority to act on behalf of Landlord with respect to matters pertaining to the planning, design and construction of the Improvements. Either party may change its designated representative upon five (5) days prior written notice to the other party.
4. Architect. Deutsch & Associates ("Architect") shall act as the architect with respect to the design and construction of the Tenant Improvements. Landlord has previously provided to Tenant, and Tenant has approved, the form of contract to be entered into with Architect for such services (the "Architect Contract"). The parties acknowledge and agree that the Architect Contract entered into with the Architect will obligate the Architect to issue to both Landlord and Tenant an architect's certificate ("Architect's Certificate") upon substantial completion of the Tenant Improvements certifying the substantial completion of the Improvements in accordance with the Final Plans. Landlord reserves the right to retain a development consultant to assist Landlord in performing its obligations
EXHIBIT B
under this Work Letter and under the Lease. All costs associated with any such developer shall be included within the cost of the Work.
5. Improvement Plans
(a) Preliminary Plans. Attached hereto are the following preliminary plans, base building specifications and preliminary scope of work for the Tenant Improvements (collectively, the "Preliminary Plans"), which have been reviewed and approved by Landlord and Tenant: (i) Schedule 1 is a Tenant Improvement Site Plan; (ii) Schedule 2 is the "Base Building Specifications" for the Shell of the Building; and Schedule 3 is the Preliminary Scope of Work Outline for Tenant Improvements.
(b) Final Plans. Within ten (10) business days following the Effective Date of the Lease, the parties shall agree upon final plans and specifications and the final scope of Landlord's work related to the Tenant Improvements ("Final Plans") which shall be consistent with the Preliminary Plans, except for the changes, if any, mutually agreed to be made thereto by the parties. Included in the Final Plans will be the civil, architectural and structural plans for the Tenant Improvements. The Final Plans shall not include any equipment to be located or installed in the Premises in accordance with Section 10.2 of the Lease. When the Final Plans have been approved by Tenant and Landlord, Architect shall submit the Final Plans to the appropriate governmental agency for plan checking and the issuance of building permit for the Tenant Improvements. Architect shall make any and all changes to the Final Plans required by any applicable governmental entity to obtain a building permit for the Tenant Improvements.
(c) Work Cost Estimate. Prior to the commencement of construction of any of the Tenant Improvements, Landlord shall submit to Tenant a written estimate of the cost to complete the Tenant Improvements, which written estimate will be based upon the Final Plans taking into account any modifications which may be required to reflect changes in the Final Plans required by the appropriate governmental authorities in connection with the issuance of a building permit (the "Work Cost Estimate"). Tenant hereby acknowledges that Tenant has previously reviewed and approved that portion of the Tenant Improvement costs Telated to the construction of the 300' demising wall and the installation of an additional 2,000 Amps of electrical service to the Premises, all as more particularly set forth in that certain letter agreement between Landlord and Tenant dated November 15, 2000 which is attached hereto as Schedule 5, and that such costs shall be included in the Work Cost Estimate, in addition to the other costs related to the construction of the Tenant Improvements. Tenant will either approve the Work Cost Estimate, or disapprove specific items, and submit to Landlord revisions to the Final Plans in the form of a Change Order. Submission and approval of the Work Cost Estimate will proceed in accordance with the work schedule provided by Landlord. Upon Tenant's approval of the Work Cost Estimate (the "Work Cost Statement"), Landlord will have the right to purchase materials and to commence the construction of the items included in the Work Cost Statement. If the total costs reflected in the Work Cost Statement exceed the Allowance (as such term is defined in Section 9 below), Tenant shall pay such excess to Landlord in cash or by wire transfer of funds, within ten (10) days after Tenant's approval of the Work Cost Statement.
(d) No Representations. Notwithstanding anything to the contrary contained in the Lease or herein, Landlord's participation in the preparation of the Preliminary Plans, the Final Plans, the cost estimates for the Improvements and the construction thereof shall not constitute any representation or warranty, express or implied, that the Improvements, if built in accordance with the Preliminary Plans and/or the Final Plans, will be suitable for Tenant's intended purpose. Tenant acknowledges and agrees that the Improvements are intended for use by Tenant and the specifications and design requirements for such Improvements are not within the special knowledge or experience of Landlord. Landlord's sole obligation shall be to arrange the construction of the Improvements in accordance with the requirements of the Final Plans; and any additional costs or expense required for the modification thereof to more adequately meet Tenant's use, whether during or after Landlord's construction thereof, shall be borne entirely by Tenant except as otherwise provided in this Work Letter. Notwithstanding the foregoing, Landlord agrees to assign to Tenant on a non-exclusive basis the benefit of all construction and architectural warranties pertaining to the Tenant Improvements to the extent that they do not relate to structural or other portions of the Improvements that Landlord is required to maintain and repair under the Lease.
6. Change Orders. After the parties approve the Final Plans and a building permit for the Tenant Improvements is issued, any further changes to the Final Plans shall require the prior written approval of Tenant and
EXHIBIT B
Landlord (not to be unreasonably withheld or delayed), provided that Landlord
shall not need the consent or approval of Tenant for changes to the Final Plans
that do not affect the Tenant Improvements and/or the Premises or materially
alter the character of the Building. If Tenant desires any change in the Final
Plans relative to the Tenant Improvements which is reasonable and practical
(which shall be conclusively determined by the Architect), such changes may only
be requested by the delivery to Landlord by Tenant of a proposed written "Change
Order" specifically setting forth the requested change. Landlord shall have five
(5) business days from the receipt of the proposed Change Order to provide
Tenant with the Architect's disapproval of the proposed change stating the
reason(s) for such disapproval, or if the Architect approves the proposed
change, the following items: (i) a summary of any increase in the cost caused by
such change (the "Change Order Cost"), (ii) a statement of the number of days of
any delay caused by such proposed change (the "Change Order Delay"), and (iii) a
statement of the cost of the Change Order Delay (the "Change Order Delay
Expense"), which Change Order Delay Expense shall be the product of the number
of days of delay multiplied by the estimated daily Base Rent rate. Tenant shall
then have three (3) business days to approve the Change Order Cost, the Change
Order Delay and the Change Order Delay Expense. If Tenant approves these items,
Tenant shall pay to Landlord the Change Order Cost and Change Order Delay
Expense within two (2) business days after Tenant's approval thereof, and
Landlord shall promptly following receipt of such payment execute the Change
Order and cause the appropriate changes to the Final Plans to be made. If Tenant
fails to respond to Landlord within said three (3) business day period, the
Change Order Cost, the Change Order Delay and the Change Order Delay Expense
shall be deemed disapproved by Tenant and Landlord shall have no further
obligation to perform any Work set forth in the proposed Change Order. The
Change Order Cost shall include all costs associated with the Change Order,
including, without limitation, architectural fees, engineering fees and
construction costs, as conclusively determined by the Architect and the
Contractor (defined in Section 7), respectively, together with a five percent
(5%) fee of these costs as reimbursement for the expense of administration and
coordination of such Change Order by Landlord's Representative. The Change Order
Delay shall include all delays caused by the Change Order, including, without
limitation, all design and construction delays, as conclusively determined by
the Architect and the Contractor (defined in Section 7), respectively.
7. Contractor. McCormack Pacific, a contractor selected by Landlord and approved by Tenant ("Contractor"), shall be used to construct the Tenant Improvements.
8. Construction of the Improvements. Landlord shall enter into a construction contract with the Contractor on a form reasonably acceptable to Landlord ("Construction Contract") for the construction and installation of the Tenant Improvements in accordance with the Final Plans; provided, however, the Construction Contract shall contain substantially the same provisions set forth on Schedule 3 attached to this Work Letter and incorporated herein by this reference.
9. Payment for Cost of the Tenant Improvements.
(a) Allowance. Landlord hereby grants to Tenant a tenant improvement allowance for the work related to the Tenant Improvements described on the Final Plans of One Hundred Seventy Nine Thousand Seven Hundred Twenty Dollars ($179,720.00) (the "Allowance"). The Allowance may be used only for the following costs approved by Landlord:
(i) Payment of the cost of preparing the Preliminary Plans relative to the Tenant Improvements (including, without limitation, Architect's costs under the Architect Contract) and the Final Plans, including mechanical, electrical, plumbing and structural drawings and of all other aspects necessary to complete the Final Plans.
(ii) The payment of plan check, permit and license fees relating to construction of the Tenant Improvements.
(iii) Construction of the Tenant Improvements as provided in the Final Plans, including without limitation, the following:
(aa) Installation within the Premises of all partitioning, demising walls, doors, floor coverings, ceilings, wall coverings and painting and similar items;
EXHIBIT B
(bb) All electrical wiring, lighting fixtures, outlets and switches, and other electrical work necessary for the Premises including, without limitation, any electrical distribution work;
(cc) The furnishing, installation and screening of all HVAC units, duct work, terminal boxes, diffusers and accessories necessary for the heating, ventilation and air conditioning systems within the Premises;
(dd) Any additional improvements to the Premises required for Tenant's use of the Premises including, but not limited to, odor control, special heating, ventilation and air conditioning, noise or vibration control or other special systems or improvements;
(ee) All fire and life safety control systems such as fire walls, sprinklers, halon, fire alarms, including piping, wiring and accessories, necessary for the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary for the Premises;
(gg) Testing and inspection costs; and
(hh) Fees for the Contractor and tenant improvement coordinator including, but not limited to, fees and costs attributable to general conditions associated with the construction of the Tenant Improvements.
(iv) The payment of interest and reasonable loan fees incurred in connection with the Project Loan (defined in Section 11).
(v) An administrative and coordination fee charged by Landlord against the Allowance equal to five percent (5%) of the total cost to complete the design, permit process and construction of the Tenant Improvements.
In no event will the Allowance be used to pay for Tenant's moving expenses or for furniture, artifacts, equipment, telephone systems or any other item of personal property which is not affixed to the Premises.
(b) Costs in Excess of Allowance. The cost of each item referenced in
Section 9(a) above shall be charged against the Allowance. If the cost of
constructing the Tenant Improvements exceeds the Allowance, such Costs shall be
paid for by Tenant to the extent not already paid for in connection with
Tenant's approval of the Work Cost Estimate within ten (10) days after written
demand from Landlord.
(c) Unused Allowance Amounts. Any unused portion of the Allowance upon completion of the Tenant Improvements will not be refunded to Tenant or monies to which Tenant is entitled.
10. Payment for Cost of the Shell. Landlord shall pay the cost of designing and constructing the Shell as provided in the Final Plans.
11. Financing of Construction of Improvements. Landlord may elect to finance the construction of the Improvements with the proceeds of a loan ("Project Loan") from a third party lender ("Lender") at the then prevailing market rate and market terms for similar projects. The documents securing or given in connection with the Project Loan; if any, are herein collectively called "Loan Documents." Any Project Loan may be secured by the lien of a deed of trust encumbering the Land and Improvements. Tenant agrees to execute and/or provide all documents reasonably required by any Lender in connection with any Project Loan, including, without limitation, estoppel certificates, subordination agreements (subject to a commercially reasonable non-disturbance agreement), consents to the assignment of this Agreement, written confirmation of the satisfaction of closing conditions, and evidence of the due execution, validity and enforceability of this Agreement. The costs of any Project Loan shall be included within the cost of the Allowance for purposes of the provisions of this Work Letter.
EXHIBIT B
12. Commencement of Lease. Notwithstanding any provision to the contrary contained in this Work Letter, Tenant's obligation to pay Rent, independent and irrespective of whether the Tenant Improvements have been substantially completed, shall be governed in accordance with Section 2.1 of the Lease.
13. Tenant Delays; Force Majeure Delays. As used herein, "Tenant Delays" means any delay in the completion of the Improvements resulting from any or all of the following: (1) Tenant's failure to timely perform any of its obligations pursuant to this Work Letter, including Tenant's failure to process timely the building permit for the Tenant Improvements and any failure to complete, on or before the due date therefor, any action item which is Tenant's responsibility pursuant to this Work Letter, including Tenant's failure to grant approvals and/or make payments within the time frames described herein; (2) Tenant's requested modifications to the Preliminary Plans, the Final Plans or any Tenant-initiated Change Orders; (3) Tenant's request for materials, finishes, or installations which are not readily available, (4) any delay in any way whatsoever arising from Tenant's right to conduct "Inspections" under Section 14 below, (5) Change Order Delays, (6) any delay due to Tenant's failure to timely approve fee plans and specifications and/or the budget related to the Tenant Improvements, or (7) any other act or failure to act by Tenant, Tenant's Representative, Tenant's Architect, Tenant's employees, agents, independent contractors, consultants and/or any other person performing or required to perform services on behalf of Tenant. "Force Majeure Delays" as used herein means delays resulting from causes beyond the reasonable control of Landlord or the Contractor, including, without limitation, any delay caused by any action, inaction, order, ruling, moratorium, regulation, statute, condition or other decision of any private party or governmental agency having jurisdiction over any portion of the project, over the construction of the Improvements or over any uses thereof, or by delays in inspections or in issuing approvals by private parties or permits by governmental agencies, or by fire, flood, inclement weather, strikes, lockouts or other labor or industrial disturbance (whether or not on the part of agents or employees of either party hereto engaged in the construction of the Improvements), civil disturbance, order of any government, court or regulatory body claiming jurisdiction or otherwise, act of public enemy, war, riot, sabotage, blockage, embargo, failure or inability to secure materials, supplies or labor through ordinary sources by reason of shortages or priority, discovery of hazardous or toxic materials, earthquake, or other natural disaster, delays caused by any dispute resolution process, or any cause whatsoever beyond the reasonable control (excluding financial inability) of the party whose performance is required, or any of its contractors or other representatives, whether or not similar to any of the causes hereinabove stated.
14. Tenant's Inspection Rights. Landlord shall schedule and attend monthly progress meetings, walkthroughs and any other meetings with the Architect, the Contractor and Tenant to discuss the progress of the construction of the Tenant Improvements ("Meetings"). Landlord shall give Tenant at least twenty-four (24) hours prior notice (written or telephonic) of all such Meetings. Tenant shall designate in writing the person or persons appointed by Tenant to attend the Meetings and such designated party shall be entitled to be present at and to participate in the discussions during all Meetings; but Landlord may conduct the Meetings even if Tenant's appointees are not present. Tenant or its agents shall have the right at any and all reasonable times to conduct inspections, tests, surveys and reports of work in progress ("Inspections") for the purpose of reviewing whether the Tenant Improvements are being constructed in accordance with the Final Plans, as amended by any approved Change Orders or other agreed upon changes. Tenant agrees to protect, hold harmless and indemnify Landlord from all claims, demands, costs and liabilities (including reasonable attorneys' fees) arising from Tenant's or Tenant's agents entry onto the Land for the purpose of conducting Inspections.
15. Walk-Through and Punch List. Upon the issuance of the Architect's Certificate pursuant to Section 4 above, Tenant, Landlord, the Architect shall jointly conduct a walk-through of the Tenant Improvements and shall jointly prepare a punch list ("Punch List") of items needing additional work ("Punch List Items"); provided, however, the Punch List shall be limited to items which are required by the Construction Contract, the Final Plans, Change Orders and any other changes agreed to by the parties.
16. Miscellaneous Construction Covenants.
(a) Coordination with Lease. Nothing herein contained shall be construed as (i) constituting Tenant as Landlord's agent for any purpose whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms or provisions of the Lease. Any default by either party with respect to any portion of this Work Letter, shall be deemed a breach of the Lease for which Landlord and Tenant shall have all the rights and remedies as in the case of a breach of the Lease by the other party.
EXHIBIT B
(b) Cooperation. Landlord and tenant agree to cooperate with one another and to cause their respective employees, agents and contractors to cooperate with one another to coordinate any work being performed by Landlord and/or Tenant under this Work Letter, and their respective employees, agents and contractors so as to avoid unnecessary interference and delays with the completion of the Work.
17. No Representations. Landlord does not warrant that the Building or any component thereof will be free of latent defects or that it will not require maintenance and/or repair within any particular period of time, except as expressly provided herein. Tenant acknowledges and agrees that it shall rely solely on the warranty or guaranty, if any, from Contractor, Architect or other material and/or service providers relative to the proper design and construction of the Improvements or any component thereof. Notwithstanding the foregoing, Landlord represents and warrants to Tenant that the construction of the Tenant Improvements shall be completed in a lien-free condition and workmanlike manner.
IN WITNESS WHEREOF, this Work Letter is executed as of the date first written above.
"Landlord" "Tenant" CATELLUS DEVELOPMENT CORPORATION, SYNETICS SOLUTIONS INC, a Delaware corporation an Oregon corporation By: Catellus Commercial Group, LLC, By: /s/ Koki Nakamura a Delaware limited liability ------------------------------------ company Name: KOKI NAKAMURA Its: Duly Authorized Agent Its: CEO Date: __________________________________ By: /s/ TWA ----------------------------- Name: By: /s/ Greg Marvell --------------------------- ------------------------------------ Title: Name: GREG MARVELL -------------------------- Its: PRESIDENT Date: 12-20-00 Date: 12/9/00 |
EXHIBIT B
(BASE BUILDING SPECIFICATION PLAN)
SCHEDULE 1
to
EXHIBIT "B"
SCHEDULE 2 to EXHIBIT B
BASE BUILDING SPECIFICATIONS
Building Size: 180,000 SF (300x600) Clear Height: 30' clear Number of Dock Doors: (62)9'-0"xl0'0" Number of Drive-in Doors: (8)12'0"xl4'0" Concrete Slab: 6" thick 4,000 psi Concrete Dock Aprons: 6" thick Fire Sprinkler System: ESFR ready (.495/2,000) Heating: Freeze Protection Sanitary Sewer: 4" Roof lnsulation: R-19 Over-Door Protection: Z metal Column Spacing (Steel Column): 50' x 50' Smoke Vents: 75 vents; 1 sf vent/75 sf bldg. |
SCHEDULE 2 to EXHIBIT B
SCHEDULE 3 to EXHIBIT B
PRELIMINARY SCOPE OF WORK OUTLINE FOR TENANT IMPROVEMENTS
SCOPE OF LANDLORD'S WORK. THE FOLLOWING ITEMS SHALL BE INCLUDED IN THE SCOPE OF WORK TO BE PERFORMED BY LANDLORD PURSUANT TO THE WORK LETTER:
1. Installation of a 300' demising wall and certain electrical work described in letter dated November 15, 2000 attached to the Work Letter as Schedule 5.
2. 3,000 square feet of first floor office per Final Plans.
3. Electrical distribution to equipment areas; Final electrical hook-up of equipment shall be the sole responsibility of Tenant.
4. Interior demising wall on Gridline E, powder coat staging area and outside receiving area.
5. Permit and plan check fees.
6. Testing and inspections.
ITEMS EXCLUDED FROM LANDLORD'S SCOPE OF WORK/TENANT IMPROVEMENTS. ALL ITEMS NOT EXPRESSLY INCLUDED IN LANDLORD'S SCOPE OF WORK ABOVE SHALL BE THE RESPONSIBILITY OF TENANT AND SHALL BE COMPLETED IN ACCORDANCE WITH SECTION 10 OF THE LEASE AND EXHIBIT G THERETO, INCLUDING, WITHOUT LIMITATION, THE FOLLOWING:
1. Architectural and engineering related to the Tenant Improvements including the structural, mechanical, electrical and plumbing components thereof.
2. Manufacturing equipment and fixtures.
3. Manufacturing equipment hookup.
SCHEDULE 3 to EXHIBIT B
SCHEDULE 4 to EXHIBIT B
CONSTRUCTION CONTRACT PROVISIONS
1. Contractor's Warranty. Contractor shall warrant on behalf of itself, and its subcontractors, materialmen, suppliers and sureties, that all material and equipment incorporated into the Construction Contract will be new and free from any and all claims, liens and security interests of any third parties and that the work required thereunder ("Work") will be of good quality and free from defects (whether latent or patent) in workmanship and will conform to the requirements of the Contract Documents (as defined in the Construction Contract) and that the materials used in the Contractor's express warranty herein shall be in addition to, and not in lieu of, any other remedies Catellus may have under the Contract Documents, at law, or in equity for defective or nonconforming Work. No payment made by Catellus to Contractor, nor any acceptance, use or occupancy of the Project by Catellus or any other person, shall constitute acceptance of any defective Work or any Work not in compliance with the Contract Documents.
2. Other Warranties. Contractor shall assemble and transmit to Catellus two complete copies in loose-leaf binders of all applicable warranties and operating and maintenance data for all equipment furnished under the Construction Contract, in sufficient detail to allow inspections, testing, operating and maintenance. All warranties procured by Contractor from its subcontractors and materialmen shall be properly executed on a form approved by Catellus and shall be submitted to Catellus prior to the final acceptance of the Work. Whenever possible, Contractor shall cause such warranties to be made directly to Catellus, or, if the same shall be made to Contractor, Contractor, if possible, shall assign the same to Catellus on request. The parties have agreed that Catellus may assign any such warranties at any time and in its sole discretion without the consent of Contractor. During the Correction Period (as defined below), upon written request from Catellus, such warranties as may not be assignable shall be enforced by Contractor for Catellus' benefit.
3. Guaranty of Correction. As used herein, the term "Correction Period"
shall mean the period from Substantial Completion (as defined in the
Construction Contract) to the date one year after Substantial Completion, or,
for any portion of the Work which is completed after Substantial Completion, one
year after Final Completion (as defined in the Construction Contract).
Contractor shall, to Catellus' reasonable satisfaction, (i) re-execute or
otherwise remedy any parts of the Work that fail to conform with the
requirements of the Contract Documents and any defects in the Work due to faulty
materials or workmanship and that become apparent during the progress of the
Work or during the Correction Period, and (ii) replace, repair or restore any
other parts of the Project or the furniture, fixtures, equipment and other items
placed therein (whether by Catellus or any other party) that are damaged or
destroyed by any such parts of the Work that do not conform to the requirements
of the Contract Documents or as a result of defects in the Work or the
correction thereof. Contractor shall remove from the Project site portions of
the Work and materials which are not in conformance with the Contract Documents
and which are not either corrected by Contractor or accepted by Catellus. All
such corrective work shall be performed at such times as are acceptable to
Catellus and so as to avoid, to the extent practicable, disruption to the
activities of Catellus or the occupants of the Project. The provisions of this
Section shall apply to Work performed by subcontractors as well as work done
directly by employees of Contractor.
The cost to Contractor of performing any of its obligations under this
Section shall be paid for by Contractor, and Contractor shall receive no
reimbursement or compensation from Contractor for performing any such corrective
work, and all such work shall be at no cost to Catellus. Contractor's
obligations under this Section are in addition to and not in limitation of its
express warranty above, or any other obligation of Contractor under the Contract
Documents. Enforcement of Contractor's obligations under this Section shall be
in addition to and not in limitation of any other right or remedy of Catellus
under the Contract Documents or otherwise at law or in equity.
Notwithstanding the foregoing provisions of this Section, Catellus may, at its option, by notice to Contractor, elect to accept nonconforming or defective Work instead of requiring its removal or correction, in which case the Contract Sum shall be reduced by an amount equal to the difference between the value to Catellus of the Work had it been in conformance with the Contract Documents, and the value to Catellus of such nonconforming or defective Work. Such election shall be exercised only by written notice to Contractor and shall not be implied by any action or inaction of Catellus.
SCHEDULE 4 to EXHIBIT B
4. Warranties, Guaranties for Substitutions. In addition to the guarantee/warranties required on all materials, equipment and workmanship (which shall not be less than one year), Contractor and the material suppliers or equipment manufacturers, will provide the maximum available extended guarantee/warranty submitted on Contractor's business stationery and signed by both Contractor and the supplier and/or manufacturer for each substitution proposed by Contractor. In all cases in which a manufacturer's name, trade name or other proprietary designation is used in connection with materials or articles to be furnished under this Contract, whether or not the phrase "or equal" is used after such name, Contractor shall furnish the product of the named manufacturer(s) without substitution, unless a written request for a substitute has been submitted by Contractor and approved in writing by the Architect and Catellus.
SCHEDULE 4 to EXHIBIT B
SCHEDULE 5 TO EXHIBIT B
(CATELLUS LOGO)
CATELLUS
Date: November 15, 2000 DELIVERED BY HAND
To: Phil Coons
Synetics Solutions
7440 SW Bonita Road
Tigard, OR 97224
RE: Synetics Tenant Improvement to Building C(45,000sf) Southshore Corporate Park
Dear Phil:
We are submitting here with the cost estimate for the above referenced job.
DESCRIPTION:
1. CONSTRUCTION OF A 300' LONG DEMISING WALL SPLITTING THE 90,000SF VACANT SPACE INTO TWO 45,000SF SPACES.
General Conditions $ 4,800.00 Demolition/Patch 5,000.00 Landscape Repair 2,750.00 New Demising Wall 27,000.00 |
2. INSTALL ONE LAYER OF SHEETROCK TO THE VACANT SIDE OF THE EXISTING DEMISING WALL.
One Layer Sheetrock $ 6,000.00 |
3. 2,000 AMP SERVICE ADDED TO THE EXISTING BUILDING SERVICE.
Electrical Service $ 73,061.00 Contractor's Fee $ 5,931.00 ----------- SUBTOTAL: $124,542.00 Catellus Management Fee $ 6,227.00 ----------- TOTAL COST FOR PROPOSED WORK: $130,769.00 |
Please execute this project estimate by signing and returning to catellus within 3 days. Please fax to (415)974-4651 and return original to my attention. Thank you.
Sincerely, Approved & Accepted: Catellus Development Corporation Synetics Solutions /s/ Bill Schmitt By: /s/ Phil Coons ------------------------------------- ------------------------------------ Bill Schmitt Phil Coons Director Construction Services DATE: 11/14/00 Cc: Jeff Lee, CDC Dan Marcus, CDC |
201 MISSION STREET, 2ND FLOOR SAN FRANCISCO, CALIFORNIA 94105
- TEL (415) 974-4500 - FAX (415) 974-4687
SCHEDULE 5 TO EXHIBIT B
A Joint Venture
(PERLO MCCORMACK PACIFIC LOGO)
Construction Managers/General Contractors
7190, S.W. Sandburg St.
Portland, Oregon 97223
F: 503.639.4134
P: 503.624.2090
November 15, 2000
Mr. Jeffrey Lee
Catellus Development Corporation
201 Mission Street, 2nd Floor
San Francisco, California 94105
Re: Demising Wall and Electrical Services for Synetics at Bldg. 'C'
Gentlemen:
We are pleased to present the following costs to construct a 300 long demising wall splitting the 90,000 s.f. vacant space into two 45,000 s.f. spaces, and to install one layer of sheetrock to the vacant side of the existing demising wall (excluding permits, fees, and architectural costs). In addition, we present the following costs for a 2,000 Amp service added to the existing building service. At this time we do not believe there are any additional PGE fees or costs associated with the additional work. Should this change, an appropriate cost. change will be required.
With standard delivery, the service will be ready 13 weeks after a notice to proceed is received.
General Conditions $ 4,800.00 Demolition/Patch 5,000.00 Landscape Repair 2,750.00 New Demising Wall 27,000.00 One Layer Sheetrock 6,000.00 Electrical Service 73,061.00 ----------- $118,611.00 Fee 5,931.00 ----------- Total Bid $124,542.00 |
Please review and call should you have any questions.
Very truly yours,
PERLO McCORMACK PACIFIC
Construction Managers/General Contractors
/s/ Gayland R. Looney ------------------------------------- GAYLAND R. LOONEY DIRECTOR OF CONSTRUCTION |
GRL/cm
info@perlomccormackpacific.com
CCB# 144525
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
With respect to that certain Multi-Tenant Triple Net Industrial Lease ("Lease") dated December __, 2000, between Synetics Solutions Inc., an Oregon corporation ("Tenant"), and Catellus Development Corporation, a Delaware corporation ("Landlord"), whereby Landlord leased to Tenant and Tenant leased from Landlord approximately 44,930 rentable square feet of the building located at 4293 NE 189th Avenue, Gresham, Oregon ("Premises"), Tenant hereby acknowledges and certifies to Landlord as follows:
(1) The Possession Date occurred on December 15, 2000;
(2) The Commencement Date occurred on January 1, 2001; and
(3) The Premises contains 44,930 Rentable Square Feet (as defined in the Basic Lease Information).
IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this __ day of December, 2000.
"Tenant" SYNETICS SOLUTIONS INC, an Oregon corporation By: /s/ Koki Nakamura ------------------------------------ Its: C.E.O. By: /s/ Greg Marvell ------------------------------------ Its: PRESIDENT |
EXHIBIT C
ACORD. CERTIFICATE OF INSURANCE PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. COMPANIES AFFORDING COVERAGE COMPANY A INSURED COMPANY B COMPANY C COMPANY D COVERAGES THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE SEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. POLICY POLICY EFFECTIVE EXPIRATION CO POLICY DATE DATE LTR TYPE OF INSURANCE NUMBER (MM/DD/YY) (MM/DD/YY) LIMITS --- -------------------------------- ------ ---------- ---------- -------------------------------- GENERAL LIABILITY GENERAL AGGREGATE $_____ [ ] COMMERCIAL GENERAL LIABILITY PRODUCTS-COMP-OP AGG $_____ [ ] [ ] CLAIMS MADE [ ] OCCUR PERSONAL & ADV INJURY $_____ [ ] OWNERS & CONT PROT EACH OCCURRENCE $_____ [ ] _______________ FIRE DAMAGE (ANY ONE PRO) $_____ [ ] _______________ MED EXP (ANY ONE PERSON) $_____ AUTOMOBILE LIABILITY COMBINED SINGLE LIMIT $_____ [ ] ANY AUTO [ ] ALL OWNED AUTOS BOOILY INJURY $_____ [ ] SCHEDULED AUTOS (Per Person) [ ] HIRED AUTOS BOOILY INJURY $_____ [ ] NON-OWNED AUTOS (Per accident) [ ] _______________ [ ] _______________ PROPERTY DAMAGE $_____ GARAGE LIABILITY AUTO ONLY - EA ACCIDENT $_____ [ ] ANY AUTO OTHER THAN AUTO ONLY: [ ] _______________ EACH ACCIDENT $_____ [ ] _______________ AGGREGATE $_____ EXCESS LIABILITY [ ] UMBRELLA FORM EACH OCCURRENCE $_____ [ ] OTHER THAN UMBRELLA FORM AGGREGATE $_____ $_____ WORKERS COMPENSATION AND [ ] STATUTORY LIMITS EMPLOYERS' LIABILITY EACH ACCIDENT $_____ DISEASE - POLICY LIMIT $_____ THE PROPRIETOR/ [ ] INCL DISEASE - EACH EMPLOYEE $_____ PARTNERS/EXECUTIVE OFFICERS ARE: [ ] EXCL OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ___ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE AUTHORIZED REPRESENTATIVE ACORD 25-S (3/93) (C) ACORD CORPORATION |
EXHIBIT D
EXHIBIT E
PROHIBITED USES
Subject to the terms of the Lease and this Exhibit E, the following types of operations and activities are expressly prohibited on the Premises:
1. automobile/truck/forklift maintenance, repair or fueling; provided, however, Tenant may perform routine maintenance with respect to motorized material-handling equipment as required in the course of Tenant's day-to-day business operations;
2. battery manufacturing or reclamation;
3. ceramics and jewelry manufacturing or finishing;
4. chemical (organic or inorganic) storage, use or manufacturing; provided, however, Tenant may use the chemicals listed on Schedule 1 to this Exhibit E in an amount not to exceed the quantity specified thereon, all in accordance with the Lease and all applicable Environmental Laws;
5. drum recycling;
6. dry cleaning;
7. electronic components manufacturing (distribution of such components is permitted); provided, however, Tenant may assemble electronic components so long as such assembly does not involve any wet electronic chemical processes whatsoever;
8. electroplating and metal finishing; provided, however, Tenant may perform machining, welding, deburring and power coating activities as such activities relate to the finishing of Tenant's products;
9. explosives manufacturing, use or storage;
10. hazardous waste treatment, storage, or disposal;
11. leather production, tanning or finishing;
12. machinery and tool manufacturing; provided, however, Tenant may manufacture OEM equipment and tools consistent with Tenant's existing manufacturing facilities and the Permitted Use set forth in the Basic Lease Information;
13. medical equipment manufacturing and hospitals;
14. metal shredding, recycling or reclamation; provided, however, Tenant shall be permitted to recover and recycle naturally occurring materials so long as such materials are processed and recovered by an outside vendor. All storage and collection of this material will be limited to the inside of the Premises;
15. metal smelting and refining;
16. mining;
17. paint, pigment and coating operations; provided, however, Tenant may incorporate full powder coating processes, subject to any and all applicable governmental laws, rules, regulations and/or requirements;
18. petroleum refining;
19. plastic and synthetic materials manufacturing; provided, however, Tenant may use machine welding and extracting processes in the ordinary course of Tenant's business;
20. solvent reclamation;
21. tire and rubber manufacturing;
22. above- and/or underground storage tanks; provided, however, Tenant shall be permitted to transfer a limited amount of process water from the powder coat cleaning line to an evaporator tank with a closed loop system. Any secondary containment shall be subject to Landlord's prior review and/or approval; and
23. residential use or occupancy.
EXHIBIT E
SCHEDULE 1 to EXHIBIT E
CHEMICALS TO BE STORED AND
USED ON THE PREMISES*
1. Isopropyl Alcohol (one 55 gallon drum)
2. Diphenylmethane Diisocyanate (one 55 gallon drum)
3. Glycerol Polyether (one 55 gallon drum)
4. Simple Asphyxiant (Argon 75%, Co(2) 25%), in the quantity set forth in that certain Hazardous Substance Information Survey dated October 1, 1999 for Facility ID No. 064875 (the "Survey")
5. Acetylene, in the quantity set forth in the Survey
6. Ammonia/Air (5000 ppm), in the quantity set forth in the Survey
7. Gaseous NH(3) in air mixtures in 300 ft(3) cylinders
(a) (9)100 ppm
(b) (9)1000 ppm
(c) (17)5000 ppm
8. (1) Pure N(2),300 ft(3) cylinder
9. (1) Pure N(2),80 ft(3) cylinder
10. (2) NH(3) Permeation tubes (-20 ng/L emission) (2 grams)
11. N-methyl pyrrolidone permeation tube (-20 ng/L emission) (2 grams)
12. Dimethyl methylphosphonate (DMMP) permeation tube (2 grams)
13. (3) Ni63 radiation sources (-15 mCu)
14. Ammonium hydroxide, 1 gal.
15. Hydrochloric acid, 1 gal.
16. Acetone, 1 gal.
17. Colorimeter (Puremate) tubes
(a) Silica gel (2 grams)
(b) Phosphoric acid (2 grams)
(c) Bromomethyl blue (2 grams)
18. Trichloroethylene (less than one gallon)
19. Hydrochloric acid (less than one gallon)
20. Phosphoric acid (less than one gallon)
21. Citric acid (less than one gallon)
22. Nitric acid (less than one gallon)
23. Hydrofluoric acid (less than one gallon)
24. Acetic acid (less than one gallon)
25. Sulfuric acid (less than one gallon)
26. N-methyl pyrrolidone (less than one gallon)
* Subject to modification pursuant to Section 11 of the Lease.
SCHEDULE 1 to EXHIBIT E
EXHIBIT F
RULES AND REGULATIONS
1. No automobile, recreational vehicle or any other type of vehicle or equipment shall remain upon the Common Area longer than 72 hours and no vehicle or equipment of any kind shall be dismantled or repaired or serviced on the Common Area. All vehicle parking shall be restricted to areas designated and marked for vehicle parking. The foregoing restrictions shall not be deemed to prevent temporary parking for loading or unloading of vehicles in designated areas.
2. Signs will conform to sign standards and criteria established from time to time by Landlord. No other signs, placards, pictures, advertisements, names or notices shall be inscribed, displayed or printed or affixed on or to any part of the outside or inside of the building without the written consent of Landlord and Landlord shall have the right to remove any such non-conforming signs, placards, pictures, advertisements, names or notices without notice to and at the expense of Tenant.
3. No antenna, aerial, discs, dishes or other such device shall be erected on the roof or exterior walls of the Premises, or on the grounds, without the written consent of the Landlord in each instance. Any device so installed without such written consent shall be subject to removal without notice at any time.
4. No loud speakers, televisions, phonographs, radios or other devices shall be used in a manner so as to be heard or seen outside of the Premises without the prior written consent of the Landlord.
5. The outside areas immediately adjoining the Premises shall be kept clean and free from dirt and rubbish by the Tenant to the satisfaction of Landlord and Tenant shall not place or permit any obstruction or materials in such areas or permit any work to be performed outside the Premises.
6. No open storage shall be permitted in the Project.
7. All garbage and refuse shall be placed in containers placed at the location designated for refuse collection, in the manner specified by Landlord.
8. No vending machine or machines of any description shall be installed, maintained or operated upon the Common Area.
9. Tenant shall not disturb, solicit, or canvass any occupant of the building and shall cooperate to prevent same.
10. No noxious or offensive trade or activity shall be carried on upon any units or any part of the Common Area nor shall anything be done thereon which would in any way interfere with the quiet enjoyment of each of the other tenants of the Project or which would increase the rate of insurance or overburden utility facilities from time to time existing in the Project.
11. Landlord reserves the right to make commercially reasonable amendments to these rules and regulations from time to time as are nondiscriminatory and not inconsistent with the Lease, provided that Landlord provides Tenant with prior notice of any such change or amendment.
EXHIBIT F
EXHIBIT G
REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY TENANT
If Landlord shall permit Tenant to construct any initial tenant improvements in the Premises or to have any work performed in the Premises at any time prior to or during the Lease term by a contractor retained by Tenant ("Tenant's Work"), then Tenant shall comply with the requirements set forth herein. If tenant's Work has been properly authorized, Tenant will receive written approval and consent for alterations to the Premises.
1. SUBMITTAL OF PLANS. Prior to commencing any work in the Premises, Tenant shall submit to Landlord for approval its proposed plans for the work. Without limiting the foregoing, Tenant shall provide:
(a) A separate scale drawing denoting all proposed construction and/or demolition, if necessary.
(b) A separate drawing for each trade proposing structural, electrical, mechanical, civil or landscaping modifications.
(c) Specify all dimensions and complete references to all work to be performed in the affected areas.
(d) If adding extra electrical or mechanical equipment, provide complete operating and maintenance specifications for each item.
Landlord shall use its commercially reasonable efforts to respond to any written request from Tenant. Landlord's failure to respond to a written request from Tenant shall be deemed be Landlord's disapproval of the applicable request for approval hereunder.
2. CHECKLIST. With respect to each project, Landlord will provide Tenant with a checklist listing the items required to be furnished to Landlord in connection with the proposed work. Tenant shall furnish to Landlord prior to, during, or upon completion of Tenant's Work, as applicable, each of the items specified in the checklist attached hereto as Attachment 1.
3. CONTRACTORS PROVIDING TENANT IMPROVEMENT SERVICES.
(a) The contractor employed by Tenant and any subcontractors shall be
(i) duly licensed in the state in which the Premises are located, and (ii)
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld. If more than one trade is employed on a single job, state
law requires the services of a general contractor in addition to contractors for
specialty work being performed.
(b) Each contractor shall provide proof of licensing as a general or specialty contractor in accordance with state law. Additionally, each contractor shall furnish proof of licensing in the city or municipality in which the construction related activity is to take place.
(c) Tenant shall use Landlord's subcontractor for mechanical, electrical, plumbing, roofing and roofing consultant; provided, however, Tenant may, without the prior consent or approval of, but with notice to Landlord, engage Current Electric and/or Christenson Electric (collectively, the "Pre-Approved Electrical Contractors") to serve as the subcontractor(s) to perform any electrical work related to the Premises. Notwithstanding the foregoing, all work to be performed by the Pre-Approved Electrical Contractors shall otherwise comply with all of the terms and conditions of this Exhibit G.
(d) Tenant and Tenant's contractors shall comply with all Applicable Laws pertaining to the performance of Tenant's Work and the completed improvements and all applicable safety regulations established by Landlord or the general contractor.
EXHIBIT G
(e) Prior to commencement of any work in the Premises, Tenant and Tenant's contractors (and any subcontractors) shall obtain and provide Landlord with certificates evidencing Workers' Compensation, public liability and property damage insurance in amounts and forms and with companies satisfactory to Landlord. Each general contractor (and any subcontractor) employed on the Premises shall provide Landlord with a current certificate of insurance in effect for that contractor with a thirty day notice of cancellation or revocation clause. Insurance requirements are as follows:
(i) Comprehensive General Liability with a $2,000,000 Combined Single Limit covering the liability of Landlord and contractor for bodily injury and property damage arising as a result of the construction of the improvements and the services performed thereunder. Landlord shall be named as an additional insured.
(ii) Comprehensive Automobile Liability with a $2,000,000 Combined Single Limit covering Landlord and vehicles used by contractor (and any subcontractor) in connection with the construction of the improvements.
(iii) Workers' Compensation and Employer's Liability as required by law, for employees of the contractor (and any subcontractors) performing work on the Premises.
(f) The following requirements shall be incorporated as "Special Conditions" into the contract between Tenant and its contractors and a copy of the contract shall be furnished to Landlord prior to the commencement of Tenant's Work:
(i) Prior to start of Tenant's Work, Tenant's contractor shall provide Landlord with a construction schedule in "bar graph" form indicating the completion dates of all phases of Tenant's Work.
(ii) Tenant's contractor shall be responsible for the repair, replacement or clean-up of any damage done by it to other contractors' work which specifically includes accessways to the Premises which may be concurrently used by others.
(iii) Tenant's contractor shall accept the Premises prior to starting any trenching operations. Any rework of sub-base or compaction required after the contractor's initial acceptance of the Premises shall be done by Tenant's contractor, which shall include the removal from the Project of any excess dirt or debris.
(iv) Tenant's contractor shall contain its storage of materials and its operations within the Premises and such other space as it may be assigned by Landlord or Landlord's contractor. Should Tenant's contractor be assigned space outside the Premises, it shall move to such other space as Landlord or Landlord's contractor shall direct from time to time to avoid interference or delays with other work.
(v) Tenant's contractor shall clean up the construction area and surrounding exterior areas daily. All trash, demolition materials and surplus construction materials shall be stored within the Premises and promptly removed from the Premises and the Project and disposed of in an approved sanitation site.
(vi) Tenant's contractor shall provide temporary utilities, portable toilet facilities, and potable drinking water as required for its work within the Premises and shall pay to Landlord's contractor the cost of any temporary utilities and facilities provided by Landlord's contractor at Tenant's contractor's request.
(vii) Tenant's contractor shall notify Landlord or Landlord's project manager of any planned work to be done on weekends or other than normal job hours.
(viii) Tenant's contractor or subcontractors shall not post signs on any part of the Project or on the Premises, except for any notices required to be posted by any applicable federal, state or local law or regulation.
EXHIBIT G
(g) Tenant shall provide Landlord with a set of "As-Built" drawings for any work performed to the Premises.
4. COSTS.
(a) Tenant shall promptly pay any and all costs and expenses in connection with or arising out of the performance of Tenant's Work (including the costs of permits therefor) and shall furnish to Landlord evidence of such payment upon request.
(b) Tenant shall reimburse Landlord for all costs which Landlord may incur in connection with granting approval to Tenant for any alteration and/or addition, including any costs or expenses which Landlord may incur in electing to have outside architects and engineers review said matters. Tenant shall pay Landlord an amount equal to five percent (5%) of the total hard costs of construction and installation of Tenant's Work as compensation to Landlord for review of plans, use of facilities and other miscellaneous costs of Landlord incurred as a result of such work. Notwithstanding the foregoing, such five percent (5%) charge shall not apply to the work related to the tenant improvements contemplated in the Work Letter attached to the Lease as Exhibit B.
5. CONTRACTOR'S BONDS. Prior to the commencement of construction, Tenant shall obtain or cause its contractor to obtain and deliver evidence thereof to Landlord payment and performance bonds covering the faithful performance of the contract for the construction of the Tenant's Work and the payment of all obligations arising thereunder. In the alternative, and at Landlord's option, Tenant may appoint Landlord as its contractor, and in so doing, Tenant shall deposit with the Landlord a sum of money equal to the entire amount of the estimated construction cost, as is required for the installation of the Tenant improvements on the Premises. If Tenant deposits with Landlord monies for construction costs, it is agreed that Landlord will not be placed in a fiduciary capacity as a trustee, or any other fiduciary title, for the sums of monies in Landlord's possession. Tenant agrees to hold Landlord harmless from any and all claims, for workmanship and installation of improvements, and for merchantability and quality of goods used for the installation of Tenant's improvements, as are requested by Tenant. Any bonds obtained pursuant hereto shall be for the mutual benefit of both Landlord and Tenant as obligees and beneficiaries.
6. MECHANIC'S LIENS.
(a) Tenant shall not suffer or permit to be enforced against the Premises or any part of the Project any mechanic's, materialman's, contractor's or subcontractor's lien arising out of any work of improvement, however it may arise.
(b) Tenant shall notify Landlord at least ten (10) days prior to the commencement of construction of any Tenant's Work and Landlord shall have the right to post and record a notice of nonresponsibility in conformity with applicable law. Within ten (10) days following completion of Tenant's Work, Tenant shall file a Notice of Completion and deliver to Landlord an unconditional release and waiver of lien executed by each contractor, subcontractor and materialman involved in Tenant's Work.
(c) In the event any lien is filed against the Project or any portion thereof or against Tenant's leasehold interest therein, Tenant shall obtain the release and/or discharge of said lien, within ten (10) days after the filing thereof. In the event Tenant fails to do so, Landlord may obtain the release and/or discharge of said lien and Tenant shall indemnify Landlord for the costs thereof, including reasonable attorney's fees, together with interest at the Applicable Interest Rate from the date of demand. Nothing herein shall prohibit Tenant from contesting the validity of any such asserted claim, provided Tenant has furnished to Landlord a lien release bond freeing the Premises from the effect of the lien claim.
7. INDEMNITY. The respective indemnity obligations of Landlord and Tenant created pursuant to Section 8.4 of the Lease shall apply with respect to any and all of Tenant's Work (whether occurring on or before the Commencement Date) and with respect to any work to be performed by Landlord under this Exhibit G. Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord for the cost of repairing or replacing) any portion of the Building or item of Landlord's equipment or any of Landlord's real or personal property damaged, lost or destroyed in the performance of Tenant's Work.
EXHIBIT G
8. BUILDING STANDARDS. All work shall conform to Landlord's established building standards and specifications. Tenant is required to make these standards part of the construction documents.
9. ROOF PENETRATIONS. If improvements penetrate the roof membrane, the penetrations will be sealed per Landlord/IRC roofing specifications and inspected by IRC to maintain roof warranty. The cost of inspection and all corrective work shall be borne by Tenant. Tenant shall use Landlord's original roofing contractor.
10. BUILDING MODIFICATIONS. Work will only be approved within the confines of a given space. Tenant will not be allowed without Landlord's written consent to modify building exterior or mechanical and electrical service as provided to the building in common with other tenants.
11. ELECTRICAL WORK. All electrical work shall be approved from the unit space electrical panel only. Additional service requirements shall be. secured only by direction of Landlord. Tenant shall use Landlord's original electrical contractor.
12. SCHEDULE OF WORK. Tenant may be required to provide a schedule of all work to be performed, subject to Landlord approval. All costs to produce such schedule shall be borne solely by Tenant.
13. CLEAN UP AND DISPOSAL OF CONSTRUCTION DEBRIS. Building trash containers are provided for office generated trash only and are not to be used for disposal of construction-related materials and debris. Unapproved usage will result in a penalty assessment to the Tenant equal to the cost of an extra pick-up service as provided under the current rate schedule of regular trash removal service.
14. INSPECTION BY LANDLORD. Landlord reserves the following rights: (i) the right of inspection prior to, during and at completion of all construction and/or demolition, (ii) the right to post and record a notice of nonresponsibility in conformity with Oregon law, and (iii) the right to order a total stop to all improvements underway for non-compliance with any of the requirements hereof.
15. GENERAL PROVISIONS.
(a) If Landlord has agreed to provide an allowance toward the cost of tenant improvements, Landlord shall retain from such funds an amount determined by Landlord until Tenant has fully complied with the requirements hereof.
(b) All materials, work, installations and decorations of any nature whatsoever brought on or installed in the Premises before the commencement of the Term or throughout the Term shall be at Tenant's risk, and neither Landlord nor any party acting on Landlord's behalf shall be responsible for any damage thereto or loss or destruction thereof due to any reason or cause whatsoever.
(c) Nothing contained herein shall make or constitute Tenant as the agent of Landlord.
EXHIBIT G
ATTACHMENT TO EXHIBIT G
ITEMS TO BE FURNISHED TO LANDLORD FOR EACH WORK OF IMPROVEMENT
1. Plan of Alterations for Landlord Approval.
2. Contractor(s), Address, Telephone Number, Contact Person.
3. Copy of Contractor's State and City Business License.
4. Copy of Building Permit.
5. Copy of Final Inspection and Signed Building Permit Cards.
6. Copy of Certificate of Insurance Naming Catellus Development Corporation as Additional Insured. Insurance to include Comprehensive General Liability, Comprehensive Auto, Workers' Compensation and Employer's Liability.
7. Signed Unconditional Lien Waiver in Favor of Catellus Development Corporation.
8. Schedule of Work.
9. Copy of Completion and Payment Bond.
10. Architect's License and Expiration.
11. Tenant and Architect Agreement.
12. Tenant and Contractor Agreement.
13. Copy of Permit Plans.
14. Copy of As-Builts.
15. Copy of Recorded Notice of Completion.
16. Certificate of Occupancy.
17. Evidence of Insurance for All-Risk/builder's Risk Insurance to the Amount of Improvements.
ATTACHMENT to EXHIBIT G
EXHIBIT H
TENANT ESTOPPEL CERTIFICATE
To: [Insert name of party to rely on document] ("Relying Party")
Re: Lease Dated: ________________________ Current Landlord: ________________________ Current Tenant: ________________________ Square Feet: Approximately __________ Floor(s): ________________________ Located at: ________________________ |
("Tenant") hereby certifies that as of ______________, 200_:
1. Tenant is the present owner and holder of the tenant's interest under the lease described above, as it may be amended to date (the "Lease") with __________ as Landlord (who is called "Landlord" for the purposes of this Certificate). (USE THE NEXT SENTENCE IF THE LANDLORD OR TENANT NAMED IN THE LEASE IS A PREDECESSOR TO THE CURRENT LANDLORD OR TENANT.) [The original landlord under the Lease was __________, and the original tenant under the Lease was __________.] The Lease covers the premises commonly known as __________ (the "Premises") in the building (the "Building") at the address set forth above.
(CHOOSE ONE OF THE FOLLOWING SECTION 2(a)s BELOW)
[2. (a) A true, correct and complete copy of the Lease (including all modifications, amendments, supplements, side letters, addenda and riders of and to it) is attached to this Certificate as Exhibit A.]
[2 (a) The attached Exhibit A accurately identifies the Lease and all modifications, amendments, supplements, side letters, addenda and riders of and to it.]
(b) (IF APPLICABLE) [The Lease provides that in addition to the Premises, Tenant has the right to use or rent __________ [assigned/unassigned] parking spaces near the Building or in the garage portion of the building during the term of the Lease.]
(c) The term of the Lease commenced on ___________, 200_ and will
expire on ___________, _____, including any presently exercised option or
renewal term. (CHOOSE ONE OF THE FOLLOWING TWO SENTENCES.) [Tenant has no option
or right to renew, extend or cancel the Lease, or to lease additional space in
the Premises or Building, or to use any parking (IF APPLICABLE) [other than that
specified in Section 2(b) above].] [Except as specified in Paragraph(s)
___________ of the Lease (copy attached), Tenant has no option or right to
renew, extend or cancel the Lease, or to lease additional space in the Premises
or Building, or to use any parking (IF APPLICABLE) [other than that specified in
Section 2(b) above].]
(CHOOSE ONE OF THE FOLLOWING SECTION 2(d)s)
[(d) Tenant has no option or preferential right to purchase all or any part of the Premises (or the land of which the Premises are a part). Tenant has no right or interest with respect to the Premises or the Building other than as Tenant under the Lease.]
EXHIBIT H
[(d) Except as specified in Paragraph(s) ___________ of the Lease (copy attached), Tenant has no option or preferential right to purchase all or any part of the Premises (or the land of which the Premises are a part). Except for the foregoing, Tenant has no right or interest with respect to the Premises or the Building other than as Tenant under the Lease.]
(e) The annual minimum rent currently payable under the Lease is $__________ and such rent has been paid through ___________, 200_. (IF APPLICABLE) [The annual percentage rent currently payable under the Lease is at the rate of ___________ and such rent has been paid through ___________, 200_.]
(f) (IF APPLICABLE) [Additional rent is payable under the Lease for
(i) operating, maintenance or repair expenses, (ii) property taxes, (iii)
consumer price index cost of living adjustments, or (iv) percentage of gross
sales adjustments (i.e., adjustments made based on underpayments of percentage
rent). Such additional rent has been paid in accordance with Landlord's rendered
bills through ___________, 200_. The base year amounts for additional rental
items are as follows; (1) operating, maintenance or repair expenses
$___________, (2) property taxes $___________, and (3) consumer price index
___________ (please indicate base year CPI level).]
(g) Tenant has made no agreement with Landlord or any agent,
representative or employee of Landlord concerning free rent, partial rent,
rebate of rental payments or any other similar rent concession (IF APPLICABLE)
[except as expressly set forth in Paragraph(s) ___________ of the Lease (copy
attached)].
(h) Landlord currently holds a security deposit in the amount of $___________ which is to be applied by Landlord or returned to Tenant in accordance with Paragraph(s)___________ of the Lease. Tenant acknowledges and agrees that Relying Party shall have no responsibility or liability for any security deposit, except to the extent that any security deposit shall have been actually received by Relying Party.
3. (a) The Lease constitutes the entire agreement between Tenant and Landlord with respect to the Premises, has not been modified changed, altered or amended and is in full force and effect in the form (CHOOSE ONE) [attached as/described in] Exhibit A. There are no other agreements, written or oral, which affect Tenant's occupancy of the Premises.
(b) All insurance required of Tenant under the Lease has been provided by Tenant and all premiums have been paid.
(c) To the best knowledge of Tenant, no party is in default under the Lease. To the best knowledge of Tenant, no event has occurred which, with the giving of notice or passage of time, or both, would constitute such a default.
(d) The interest of Tenant in the Lease has not been assigned or encumbered. Tenant is not entitled to any credit against any rent or other charge or rent concession under the Lease except as set forth in the Lease. No rental payments have been made more than one month in advance.
4. All contributions required to be paid by Landlord to date for improvements to the Premises have been paid in full and all of Landlord's obligations with respect to tenant improvements have been fully performed. Tenant has accepted the Premises, subject to no conditions other than those set forth in the Lease.
5. Neither Tenant nor any guarantor of Tenant's obligations under the Lease is the subject of any bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor-creditor relationships.
6. (a) As used here, "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products) which is designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is similarly designated, classified or regulated, under any federal, state or local law, regulation or ordinance.
EXHIBIT H
(b) Tenant represents and warrants that it has not used, generated, released, discharged, stored or disposed of any Hazardous Substances on, under, in or about the Building or the land on which the Building is located (IF APPLICABLE) [, other than Hazardous Substances used in the ordinary and commercially reasonable course of Tenant's business in compliance with all applicable laws]. (IF APPLICABLE) [Except for such commercially reasonable use by Tenant,] Tenant has no actual knowledge that any Hazardous Substance is present, or has been used, generated, released, discharged, stored or disposed of by any party, on, under, in or about such Building or land.
7. Tenant hereby acknowledges that Landlord intends to [discuss action to be taken vis-a-vis Relying Party]. Tenant acknowledges the right of Landlord, Relying Party and any and all of Landlord's present and future lenders and their successors and assigns to rely upon the statements and representations of Tenant contained in this Certificate and further acknowledges that any action taken by such parties will be made and entered into in material reliance on this Certificate.
8. Tenant hereby agrees to furnish Relying Party with such other and further estoppel as Relying Party may reasonably request.
EXHIBIT H
EXHIBIT I
FORM OF SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
RECORDING REQUESTED BY ) AND WHEN RECORDED MAIL TO: ) Bank of America N.A. ) 600 Montgomery Street, 22nd Floor ) San Francisco, CA 94111 ) |
Attention: Donald H. Moses, Principal )
Space above for Recorder's Use
SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY INSTRUMENT.
This Subordination, Nondisturbance and Attornment Agreement ("Agreement") is entered into as of the __________ day of __________, 2000 by and among SYNETICS SOLUTIONS INC., an Oregon corporation ("Tenant"). Catellus Development Corporation, a Delaware corporation ("Borrower") and Bank of America National Trust and Savings Association ("Bank").
FACTUAL BACKGROUND
A. Borrower owns certain real property in the County of Multnomah, State of Oregon, more particularly described in the attached Schedule 1 term "Property" herein means that real property together with all improvements (the "Improvements") located on it.
B. Bank has made or agreed to make a loan to Borrower in the principal amount of __________ and _____ /100 Dollars ($__________) (the "Loan") as provided in a loan agreement (the "Loan Agreement"). The Loan is or will be evidenced by a promissory note (the "Note") which is or will be secured by a deed of trust encumbering the Property (the "Deed of Trust") with an assignment of rents. The Loan Agreement, the Note, the Deed of Trust, this Agreement and all other documents and instruments identified in the Loan Agreement as "Loan Documents" shall be collectively referred to herein as the "Loan Documents".
C. Tenant and Borrower (as landlord) entered into a lease dated ___________, 2000 (the "Lease") under which Borrower leased to Tenant a portion of the Improvements located within the Property and more particularly described in the Lease (the "Premises").
D. It is a requirement of the Loan to Borrower that Tenant agree, among other things, to subordinate Tenant's rights under the Lease to the lien of the Loan Documents and to attorn to Bank on the terms and conditions of this Agreement. Tenant is willing to agree to such subordination and attornment and other conditions, provided that Bank agrees to a nondisturbance provision, all as set forth more fully below.
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AGREEMENT:
Therefore, the parties agree as follows:
1. Subordination. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to the Lease, to the leasehold estate created by it, and to all rights and privileges of Tenant under it. The Lease and leasehold estate, together with all rights and privileges of Tenant under that Lease, are hereby unconditionally made subordinate to the lien of the Loan Documents in favor of Bank. Tenant consents to Borrower and Bank entering into the Deed of Trust and the other Loan Documents. Tenant further declares, agrees and acknowledges that in making disbursements under the Loan Documents Bank has no obligation or duty to, nor has Bank represented that it will, see to the application of such proceeds by the person or persons to whom they are disbursed by Bank, and any application or use of such proceeds for purposes other than those provided for in the Loan Documents shall not defeat the subordination made in this Agreement, in whole or in part.
2. Definitions of "Transfer of the Property" and "Purchaser". As used herein, the term "Transfer of the Property" means any transfer of Borrower's interest in the Property by foreclosure, trustee's sale or other action or proceeding for the enforcement of the Deed of Trust or by deed in lieu thereof. The term "Purchaser", as used herein, means any transferee, including Bank, of the interest of Borrower as a result of any such Transfer of the Property and also includes any and all successors and assigns, including Bank, of such transferee.
3. Nondisturbance. The enforcement of the Deed of Trust shall not terminate the Lease or disturb Tenant in the possession and use of the Premises unless at the time of foreclosure Tenant is in material default under the Lease or this Agreement beyond any applicable grace or cure periods, and Bank so notifies Tenant in writing at or prior to the time of the foreclosure sale that the Lease will be terminated by foreclosure because of such default. The nondisturbance herein granted is subject to Section 5 below. This nondisturbance applies to any option to extend or renew the Lease term which is set forth in the Lease as of the date of this Agreement.
4. Attornment. Subject to Section 3 above, if any Transfer of the Property should occur, Tenant shall and hereby does attorn to Purchaser, including Bank if it should be the Purchaser, as the landlord under the Lease, and Tenant shall be bound to Purchaser under all of the terms, covenants and conditions of the Lease for the balance of the Lease term and any extensions or renewals of it which may then or later be in effect under any validly exercised extension or renewal option contained in the Lease, all with the same force and effect as if Purchaser had been the original landlord under the Lease. This attornment shall be effective and self-operative without the execution of any further instruments upon Purchaser's succeeding to the interest of the landlord under the Lease.
5. Subordination of Options and Rights of First Refusal. The Loan Documents and all supplements, amendments, modifications, renewals, replacements and extensions of and to them shall unconditionally be and remain at all times a lien on the Property prior and superior to any existing or future right of Tenant, whether arising out of the Lease or otherwise, to exercise any option or right of first refusal to:
(a) purchase the Premises or the Property or any interest or portion in or of either of them; or
(b) expand into other space in the Improvements.
Tenant specifically agrees and acknowledges that upon any Transfer of the Property, any such purchase or expansion option or right of first refusal, whether now existing or in the future arising, shall terminate and be inapplicable to the Property notwithstanding the nondisturbance granted to Tenant in Section 3 above. If any option or right of first refusal to purchase is exercised prior to a Transfer of the Property, any title so acquired to all or any part of the Property shall be subject to the lien of the Loan Documents, which lien shall in no way be impaired by the exercise of such option or right of first refusal. Bank specifically reserves all of its rights to enforce any accelerating transfer, due on sale, due on encumbrance or similar provision in the Deed of Trust or any other Loan Document.
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6. Notices of Default; Material Notices; Bank's Rights to Cure Default. Tenant shall send a copy of any notice of default or similar statement with respect to the Lease to Bank at the same time such notice or statement is sent to Borrower. In the event of any act or omission by Borrower which would give Tenant the right to terminate the Lease or to claim a partial or total eviction, Tenant shall not exercise any such right or make any such claim until it has given Bank written notice of such act or omission and has given Bank either thirty (30) days to cure the default if the default is monetary or a reasonable time for Bank to cure the default if the default is nonmonetary. Nothing in this Agreement, however, shall be construed as a promise or undertaking by Bank to cure any default of Borrower.
7. Limitation on Bank's Performance. Nothing in this Agreement shall be deemed or construed to be an agreement by Bank to perform any covenant of Borrower as landlord under the Lease. Tenant agrees that if Bank becomes Purchaser then, upon subsequent transfer of the Property by Bank to a new owner, Bank shall have no further liability under the Lease after said transfer.
8. Limitation on Liability. No Purchaser who acquires title to the Property shall have any obligation or liability beyond its interest in the Property.
9. Tenant's Covenants. Tenant agrees that during the term of the Lease, without Bank's prior written consent, Tenant shall not:
(a) pay any rent or additional rent more than one month in advance to any landlord including Borrower; or
(b) cancel, terminate or surrender the Lease, except at the normal expiration of the Lease term or as provided in Section 6 above; or
(c) enter into any material amendment, modification or other agreement relating to the Lease; or
(d) assign or sublet any portion of the Lease or the Premises, except as expressly permitted in the Lease.
10. Bank Not Obligated. Bank, if it becomes the Purchaser or if it takes possession under the Deed of Trust, and any other Purchaser shall not (a) be liable for any damages or other relief attributable to any act or omission of any prior Landlord under the Lease including Borrower; or (b) be subject to any offset or defense not specifically provided for in the Lease which Tenant may have against any prior landlord under the Lease; or (c) be bound by any prepayment by Tenant of more than one month's installment of rent; or (d) be obligated for any security deposit not actually delivered to Purchaser; or (e) be bound by any modification or amendment of or to the Lease unless the amendment or modification shall have been approved in writing by Bank. Borrower agrees to deliver to Purchaser any security deposits in its possession at the time Purchaser takes possession of the Property.
11. Tenant's Estoppel Certificate.
(a) True and Complete Lease. Tenant represents and warrants to Bank that Schedule 2 accurately identifies the Lease and all amendments, supplements, side letters and other agreements and memoranda pertaining to the Lease, the leasehold and/or the Premises.
(b) Tenant's Option Rights. Tenant has no right or option of any nature whatsoever, whether arising out of the Lease or otherwise, to purchase the Premises or the Property, or any interest or portion in or of either of them, to expand into other space in the Improvements or to extend or renew the term of the Lease, except as described in the attached Schedule 3.
(c) No Default. As of the date of this Agreement, Tenant represents and warrants that to the best of Tenant's knowledge there exist no events of default or events that with notice or the passage of time or both would be events of default under the Lease on either the Tenant's part or the Borrower's, nor is there
EXHIBIT I
any right of offset against any of Tenant's obligations under the Lease, except as described in the attached Schedule 4. Tenant represents and warrants that the Lease is in full force and effect as of the date of this Agreement.
(d) Hazardous Substances. Tenant represents and warrants that it has not used, generated, released, discharged, stored or disposed of any Hazardous Substances on, under, in or about the Property other than Hazardous Substances used in the ordinary and commercially reasonable course of Tenant's business in compliance with all applicable laws. Except for such legal and commercially reasonable use by Tenant, Tenant has no actual knowledge that any Hazardous Substance is present or has been used, generated, released, discharged, stored or disposed of by any party on, under, in or about the Property. As used herein "Hazardous Substance" means any substance, material or waste (including petroleum and petroleum products), which is designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is similarly designated, classified or regulated under any federal, state or local law, regulation or ordinance.
12. Integration; Etc. This Agreement integrates all of the terms and conditions of the parties' agreement regarding the subordination of the Lease to the Loan Documents, attornment, nondisturbance and the other matters contained herein. This Agreement supersedes and cancels all oral negotiations and prior and other writings with respect to (a) such subordination (only to such extent, however, as would affect the priority between the Lease and the Loan Documents), including any provisions of the Lease which provide for the subordination of the Lease to a deed of trust or to a mortgage and (b) such attornment, non-disturbance and other matters contained herein. If there is any conflict between the terms, conditions and provisions of this Agreement and those of any other agreement or instrument, including the Lease, the terms, conditions and provisions of this Agreement shall prevail. This Agreement may not be modified, or amended except by a written agreement signed by the parties or their respective successors in interest. This Agreement may be executed in counterparts, each of which is an original but all of which shall constitute one and the same instrument.
13. Notices. All notices given under this Agreement shall be in writing and shall be given by personal delivery, overnight receipted courier or by registered or certified United States mail, postage prepaid, sent to the party at its address appearing below. Notices shall be effective upon receipt (or on the date when proper delivery is refused). Addresses for notices may be changed by any party by notice to all other parties in accordance with this Section. Service of any notice on any one Borrower shall be effective service on Borrower for all purposes.
To Bank: Bank of America N.A. San Francisco Structured Debt Group #9105 600 Montgomery Street, 22nd Floor San Francisco, California 94111 Attn: Donald H. Moses To Borrower: Catellus Development Corporation 201 Mission Street San Francisco, California 94105 Attn: Asset Management To Tenant: Synetics Solutions Inc. 7440 S.W. Bonita Avenue Tigard, Oregon 97224 Attn: Koki Nakamura |
14. Attorneys' Fees. If any lawsuit, judicial reference or arbitration is commenced which arises out of or relates to this Agreement, the prevailing party shall be entitled to recover from each other party such sums as the court, referee or arbitrator may adjudge to be reasonable attorneys' fees, including the costs for any legal services by in-house counsel, in addition to costs and expenses otherwise allowed by law.
15. Miscellaneous Provisions. This Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and assigns. This Agreement is governed by the laws of the State of
EXHIBIT I
California without regard to the choice of law rules of that State. This Agreement satisfies any condition or requirement in the Lease relating to the granting of a nondisturbance agreement by Bank. As used herein, the word "include(s)" means "include(s) without limitation," and the word "including" means "including but not limited to." Bank, at its sole discretion, may but shall not be obligated to record this Agreement.
16. Arbitration; Judicial Reference. Bank and Borrower have agreed in the Loan Agreement that any dispute shall be resolved by arbitration or judicial reference. Therefore any controversy or claim between or among the parties hereto (including Tenant) which arises out of or relates to this Agreement, including any claim based on or arising from an alleged tort, shall also be determined by arbitration or judicial reference as set forth below.
(a) Judicial Reference. In any judicial action between or among the parties, including any action or cause of action arising out of or relating to this Agreement or based on or arising from an alleged tort, all decisions of fact and law shall at the request of any party be referred to a referee in accordance with. California Code of Civil Procedure Sections 638 et seq. The parties shall designate to the court a referee or referees selected under the auspices of the American Arbitration Association ("AAA") in the same manner as arbitrators are selected in AAA-sponsored proceedings. The presiding referee of the panel, or the referee if there is a single referee, shall be an active attorney or retired judge. Judgment upon the award rendered by such referee or referees shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645.
(b) Mandatory Arbitration. After the Bank's Deed of Trust has been released, fully reconveyed or extinguished, any controversy or claim between or among the parties, including those arising out of or relating to this Agreement or any claim based on or arising from an alleged tort, shall at the request of any party be determined by arbitration. The arbitration shall be conducted in accordance with the United States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this Agreement, and under the Commercial Rules of the AAA. The arbitrator(s) shall give effect to statutes of limitation in determining any claim. Any controversy concerning whether an issue is arbitrable shall be determined by the arbitrator(s). Judgment upon the arbitration award may be entered in any court having jurisdiction. The institution and maintenance of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not constitute a waiver of the right of any party, including the plaintiff, to submit the controversy or claim to arbitration if any other party contests such action for judicial relief.
(c) Real Property Collateral. Notwithstanding the provisions of Subsection (b), no controversy or claim shall be submitted to arbitration without the consent of all parties if, at the time of the proposed submission, any obligation of Borrower to Bank is secured by real property collateral. If all parties do not consent to submission of such a controversy or claim to arbitration, the controversy or claim shall be determined by judicial reference as provided in Subsection (a).
(d) Provisional Remedies, Self-Help and Foreclosure. No provision of this Section shall limit the right of any party to this Agreement to exercise self-help remedies such as setoff, foreclosure against or sale of any real or personal property collateral or security, or to obtain provisional or ancillary remedies from a court of competent jurisdiction before, after, or during the pendency of any arbitration or other proceeding. The exercise of a remedy does not waive the right of a party to resort to arbitration or reference. At Bank's option, foreclosure under a deed of trust or mortgage may be accomplished either by exercise of power of sale under the deed of trust or mortgage or by judicial foreclosure.
(e) The parties agree that this arbitration and judicial reference provision shall not prohibit or limit summary proceedings to obtain possession of real property pursuant to Chapter 4 of the California Code of Civil Procedure (Section 1159 et, seq.) as amended from time to time, or any similar law, statute or ordinance now or hereafter in effect.
EXHIBIT I
NOTICE: THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN IMPROVEMENT OF THE PROPERTY.
"TENANT" SYNETICS SOLUTIONS INC., an Oregon corporation By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BORROWER" CATELLUS DEVELOPMENT CORPORATION, a Delaware corporation By: Catellus Commercial Group, LLC, a Delaware limited liability company Its: Duly Authorized Agent By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- "BANK" BANK OF AMERICA N.A., a national banking association By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- |
EXHIBIT I
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said State, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
STATE OF _________________________ )
)ss.
COUNTY OF ________________________ )
On ______________________, before me, ______________________, a Notary Public in and for said state, personally appeared _____________________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
(SEAL)
EXHIBIT I
SCHEDULE 1
PROPERTY DESCRIPTION
Lot 2, Southshore Corporate Park, in the City of Gresham, County of Multnomah and State of Oregon, Plat Book 1243 Pages 12 through 18 inclusive.
SCHEDULE 1 to EXHIBIT I
SCHEDULE 2
IDENTIFY LEASE AND LIST ALL AMENDMENTS,
SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS
AND MEMORANDA PERTAINING TO LEASE, PREMISES OR PROPERTY
1. Multi-Tenant Industrial Triple Net Lease dated ________, 2000 between Borrower and Tenant.
SCHEDULE 2 to EXHIBIT I
SCHEDULE 3
LIST OF PURCHASE, EXPANSION, FIRST REFUSAL
EXTENSION AND RENEWAL OPTIONS
One (1) five (5) year option to extend the term of the Lease pursuant to
Section 19 of the Addendum to Lease.
SCHEDULE 3 to EXHIBIT I
SCHEDULE 4
LIST ANY EXISTING DEFAULTS OR OFFSETS UNDER LEASE
None.
SCHEDULE 4 to EXHIBIT I
SCHEDULE 5
MODIFIED LEASE TERMS
None.
SCHEDULE 5 to EXHIBIT I
EXHIBIT J
ARBITRATION PROCEDURES
1.1 In the event of any dispute or disagreement between the parties concerning a Repair Action and any reimbursement obligation of Landlord to Tenant pursuant to Section 9.3 of the Lease (hereinafter an "Arbitration Matter"), the parties shall meet and confer in an effort to resolve such dispute.
1.2 Any Arbitration Matter which is not settled between the parties in accordance with Paragraph 1.1 above shall be decided, at either party's election, by neutral, binding arbitration and not by court action, except as provided by law for judicial review of arbitration proceedings, as follows.
(a) Governing Rules. The arbitration shall be conducted in accordance with the rules of either the American Arbitration Association ("AAA"). The parties to an arbitration may agree in writing to use different rules and/or arbitrator(s).
(b) Enforcement. The decision of the Arbitrator shall be final and binding upon the parties. Judgment upon the award rendered may be entered in any competent court having jurisdiction thereof.
(c) Discovery. The parties shall have the right to propound a demand for exchange of documents prior to the arbitration.
(d) Waiver. The filing of a judicial action to enable the recording of a notice of pending action, to comply with mechanic's lien foreclosure requirements, for order of attachment, receivership, injunction, or other provisional remedies, shall not constitute a waiver of the right to arbitrate under this provision.
(e) Scope of Issue of Decided. The Arbitrator shall be the sole judge of whether a dispute is arbitrable under the terms of this Lease.
(f) Accordance With Law. In rendering its decision and award, the Arbitrator shall have no power to modify any of the provisions of this Lease. The findings of the Arbitrator shall be in accord with the laws of the State of Oregon.
(g) Venue. The arbitration shall be filed with the office of AAA that is located in Portland, Oregon or if no such office exists, then in the office of AAA that is geographically nearest to the Premises.
(h) Attorney's Fees. The Arbitrator shall award reasonable attorneys' fees, expert fees, court reporter transcription fees (if any), filing fees and arbitrator fees to the prevailing party, if any, as a part of the decision.
(i) Confidentiality. In the event of filing of an arbitration proceeding, the parties agree that all documents produced in the proceeding shall be returned to the party from whom the documents were obtained. Any decision or settlement reached between the parties arising from or connected to the resolution of any dispute shall, in the absence of a court order, the express written agreement of the parties or as otherwise required by law, be considered strictly confidential.
EXHIBIT J
EXHIBIT K
[TO BE PRINTED ON BANK'S LETTERHEAD]
Irrevocable Standby Letter of Credit No. ___ APPLICANT/ACCOUNT PARTY: BENEFICIARY: ____________, a _______________ Catellus Development Corporation, [insert Tenant's address] a Delaware corporation 201 Mission Street San Francisco, California 94105 Attention: Asset Management AMOUNT: EXPIRATION DATE: U.S. Dollars _____________, 200_ Ninety Eight Thousand Three Hundred Ninety Four Dollars ($98,394.00) |
Gentlemen:
We hereby establish and issue our Irrevocable Standby Letter of Credit No.____ (the "Credit") in your favor. This Credit is available upon draft or demand presented to us on sight over our counters at any of our offices in the State of _________ located at _____________. We hereby irrevocably authorize you to draw upon us in one or more sight drafts up to the aggregate amount of Ninety Eight Thousand Three Hundred Ninety Four Dollars ($98,340.00).
Your draft must be accompanied by a written certificate stating that:
"Synthetic Solutions, Inc., a Oregon corporation, or its successors or assigns (collectively, "Tenant"), has failed to pay rent or perform one or more of its obligations under that certain Multi-Tenant Industrial Triple Net Lease (the "Lease") executed by and between Tenant and Catellus Development Corporation, a Delaware corporation, or Tenant has failed to replace this Letter of Credit as required under the terms of the Lease. The amount of the sight draft represents monies due and owing by Tenant under the Lease."
Partial drawings will be permitted under this Credit and all drafts hereon must bear the date and number of this Credit. This Credit is effective immediately and we hereby engage with you that so long as such drafts are presented on or before 5:00 P.M. (Pacific time) on the Expiration Date stated on the face of this Credit (subject to the automatic extensions provided below) and in conformity with the terms of this Credit, such drafts will be duly honored upon presentation.
You shall not be required to give notice or make any prior demand or presentment to Tenant with respect to the payment of any sum as to which a draw is made hereunder.
EXHIBIT K
Exhibit 10.36
Factory Lease Advanced Agreement
This Factory Lease Advanced Agreement (this "Agreement") is entered into among Sang Chul Park ("SC Park"), Young Ja Kim ("YJ Kim"), Joon Ho Park ("JH Park")(SC Park, YJ Kim and JH Park shall be referred to collectively as the "Lessors") Brooks Automation Asia, Ltd. (the "Lessee") and Brooks Automation Korea, Inc. ("BAK")(collectively, the "Parties").
Article 1. Purpose
The purpose of this Agreement is to set forth the rights and obligations of the Parties in relation to the performance of the construction by the Lessors as described in Article 2 below (the "Construction"), the lease agreement to be entered into between the Lessor and the Lessee for the factory to be made pursuant to the Construction (the "Factory") and the land upon which the Factory will be located (the "Lease Agreement"), the amendment of the existing lease agreement between SC Park and the Lessee, and the existing lease agreement between SC Park and BAK, and the termination of the existing lease agreement among SC Park, YJ Kim and the Lessee, pursuant to the Lease Agreement.
Article 2. Construction
(1) The Factory shall be constructed upon the land located at 400-2, Gomae-ri, Kiheung-eup, Yongin, Kyunggi-do (the "Construction Site"), which is owned by SC Park and YJ Kim, in order for the Lessors to lease the Factory to the Lessee as provided in Article 5, and the period for the Construction shall be from April 14 to August 30, 2005 (the "Construction Period").
(2) The detailed matters relating to the Construction shall be in accordance with the design plan and construction schedule chart separately agreed between the Lessors and the Lessee, as attached hereto (hereinafter the "DP/CSC"), and any matters not set forth in the DP/CSC shall be separately agreed between the Lessors and the Lessee.
Article 3. Performance of Construction By Lessors
(1) In performing the Construction, the Lessors shall faithfully observe the
requirements under the DP/CSC, and shall fully complete the Construction within the Construction Period provided in Article 2.
(2) In this Agreement, "full completion" of the Construction shall mean that the Factory has been constructed and has passed inspection by the Lessee as provided in Article 4, that approval has been granted for use of the Factory by the relevant governmental authority pursuant to the Construction Act, and that all governmental permits and licenses have been acquired by the Lessors as required for land and building owners under relevant laws and regulations.
Article 4. Inspection By Lessee
(1) At any time as deemed necessary in relation to the performance of the Construction, the Lessee may request the Lessors to confirm whether the Construction is proceeding in accordance with the DP/CSC, and upon such request, the Lessors shall forthwith comply with the request in good faith.
(2) In the event the Lessee discovers pursuant to the confirmation under paragraph (1) above that the Lessors are performing the Construction in a manner different from that which is set forth in the DP/CSC, and requests correction thereof, the Lessors shall comply with such request and forthwith take corrective measures.
(3) The Construction shall be completed in accordance with the details set forth in the DP/CSC by August 30, 2005, and upon completion, the Lessors shall request the Lessee in writing to perform inspection of the Construction.
(4) Within 1 week of the date of request made by the Lessors under paragraph 3 above, the Lessee shall perform inspection of the Construction and notify the Lessors in writing as to the results thereof (inspection passed or supplemental work necessary).
(5) In the event that the Lessee requests supplemental work on the Construction to be performed pursuant to paragraph 4 above, the Lessors shall forthwith perform supplemental work on the Construction as requested, and upon completion of such supplemental work, the Lessors shall request the Lessee in writing to re-inspect the Construction. Paragraph 4 shall apply in the same manner in the case of re-inspection, and if the Lessee shall supplemental work again after re-inspection, this paragraph 5
shall apply once again.
Article 5. Execution of the Lease Agreement
(1) Forthwith upon full completion of the Construction, the Lessors shall enter into the Lease Agreement with the Lessee in respect of the Factory and the Construction Site.
(2) The amount of security deposit under the Lease Agreement shall be 1 billion Won; provided, however, that 830 million Won of the amount of advanced payment made pursuant to Articles 6 and 8 shall be applied towards such security deposit and only the remaining amount of 170 million Won shall be paid at the time of entering into the Lease Agreement.
(3) The term of lease under the Lease Agreement shall be 10 years.
(4) Prior to the execution of the Lease Agreement, the Lessors shall extinguish the keun mortgage existing upon the Construction Site, and the building owned by SC Park and YJ Kim which is to be torn down pursuant to Article 8, which was established on January 9, 2004 up to maximum amount of 1,040,000,000 Won, and naming Kookmin Bank as the keun mortgage holder and YJ Kim as the debtor.
(5) Simultaneously with the execution of the Lease Agreement, the Lessors shall register chonsekwon upon the Factory and the Construction Site for the protection of the Lessee's rights under the Lease Agreement, naming the Lessee as the holder of such chonsekwon, in the amount of 1 billion Won and with an effective period of 10 years.
(6) The amount of rent and other terms and conditions of the Lease Agreement shall be agreed at a later time upon discussion between the Lessors and the Lessee.
Article 6. Advanced Payment
(1) In order that the Lessors may perform the Construction smoothly, the Lessee shall, subject to Article 9, pay 600 million Won of the security deposit under the Lease Agreement to the Lessors as advanced payment, of which 300 million Won shall be paid on May ___, 2005 and 300 million Won shall be paid on July 1, 2005.
(2) The Lessors shall not use the amount of advanced payment under paragraph 1 above for any purpose other than the Construction, and such amount of advanced payment shall be applied towards the security deposit to be paid under the Lease Agreement upon execution thereof.
Article 7. Amendment of Existing Lease Agreements Between SC Park and the Lessee, and BAK
(1) The lease agreement entered into between SC Park and the Lessee with respect to the 1st, 2nd and 4th floors of the building located at 398-1, Gomae-ri, Kiheung-eup, Yongin, Kyunggi-do, and the lease agreement entered into between SC Park and BAK with respect to the 3rd floor of the same building, shall be amended simultaneously with the execution of the Lease Agreement.
(2) In amending the lease agreements described in paragraph 1 above, the lease terms thereunder shall be amended such that they are of the same period as the lease term under the Lease Agreement. Other detailed provisions to be amended shall be agreed between SC Park and the Lessee, and BAK, and shall be in accordance with the Lease Agreement.
Article 8. Termination of Existing Lease Agreement Between YJ Kim and the Lessee
(1) Forthwith after the Construction has passed inspection by the Lessee under Article 4, the Lessors shall tear down the temporary building owned by SC Park and YJ Kim and existing at the Construction Site, and immediately after such temporary building has been torn down, shall apply for use approval regarding the Construction with the relevant governmental authority pursuant to the Construction Act.
(2) Simultaneously with the commencement of tear down work on the temporary building described in paragraph 1 above, the existing lease agreement entered into among SC Park, YJ Kim and the Lessee in relation to such temporary building shall be terminated; provided, however, that of the security deposit under such existing lease agreement, 230 million Won shall be regarded as applied towards the security deposit under the Lease Agreement instead of being returned to the Lessee, and simultaneously with the termination of the existing lease agreement stipulated in this paragraph 2, such
amount shall be regarded as paid in advance to the Lessors.
Article 9. Establishment of Keun Mortgage
(1) For the purpose of securing the rights of the Lessee to the advanced payments under Articles 6 and 8 and other claims that the Lessee acquires against the Lessors under this Agreement, the Lessors and the Lessee shall establish a keun mortgage upon the Factory Site naming the Lessee as creditor, up to the maximum amount of 900 million Won. All costs and expenses relating to the establishment of such keun mortgage shall be borne by the Lessee.
(2) The Lessors shall transfer all documents needed by the Lessee to establish the keun mortgage described in paragraph 1 above, simultaneously with the initial payment of 300 million Won of the advanced payment to be made under Article 6.
(3) The keun mortgage described in paragraph 1 above shall extinguish simultaneously with the establishment of chonsekwon upon the Factory and the Construction Site in favor of the Lessee pursuant to Article 5 paragraph 5.
Article 10. Prohibition on Transfer and Other Disposition
(1) The Lessors shall not, without the prior written consent of the Lessee, transfer, lease or otherwise dispose of the Factory Site, or allow a mortgage or any other security interest to be established upon the Factory Site. Further, the Lessors shall not transfer or otherwise dispose of any of its rights under this Agreement, or establish a pledge or any other security interest upon such rights.
(2) The obligations of the Lessors under paragraph 1 above shall remain effective even after execution of the Lease Agreement.
Article 11. Termination of Agreement
(1) In any of the following cases, the Lessee may terminate this Agreement forthwith upon written notice thereof to the Lessors, without demand for cure or any other prior procedures:
1. In case where a Lessor breaches this Agreement and fails to cure such breach within 3 days after a request for cure has been made by the Lessee in writing;
2. In case where either existing lease agreement under Article 7 has not been amended in breach thereof, or the temporary building under Article 8 has not be torn down in breach thereof;
3. In case where the Construction is not fully completed, or the Lease Agreement or amendment of the lease agreement under Article 7 is not executed, by September 30, 2005, regardless of the reasons; and
4. In case where application has been made for attachment, provisional attachment, provisional disposition, compulsory auction or other actions of similar legal effect of the Factory Site or the Factory, or work-out, bankruptcy, commencement of corporate reorganization proceedings or similar proceedings with respect to a Lessor.
(2) Forthwith upon termination of this Agreement pursuant to paragraph (1) above, the Lessors shall return the full amount of advanced payment made by the Lessee pursuant to Articles 6 and 8.
(3) The termination of this Agreement shall have no effect upon the existing lease agreements described in Articles 7 and 8.
Article 12. Dispute Resolution
The Seoul Central District Court shall have exclusive jurisdiction over any dispute arising out of or in relation to this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties in 5 original copies, with each Party holding 1 copy.
May ____, 2005
Sang Chul Park [SEAL]
/s/ Sang Chul Park ------------------------------------ Resident Registration Number _______ |
Young JA Kim [SEAL]
/s/ Young JA Kim ------------------------------------ Resident Registration Number _______ |
Joon Ho Park [SEAL]
/s/ Joon Ho Park ------------------------------------ Resident Registration Number _______ 400-2, Gomae-ri, Kiheung-eup, Yongin, Kyunggi-do |
Brooks Automation Asia, Ltd.
Representative Director Edward C. Grady [SEAL]
398-2, Gomae-ri, Kiheung-eup, Yongin, Kyunggi-do
Brooks Automation Korea, Inc.
Representative Director Edward C. Grady [SEAL]
Namkang Building, 1340-6, Seocho-dong, Seocho-ku, Seoul
Attachments: design plan and construction schedule chart
(Unit: Won)
Key Money(Refundable Deposit)
(a) | Base Rent: $48,442.00 for the period October 1-31, 2001. | ||
(b) | Common Area Operating Expenses: $___.00 for the period October 1-31, 2001. | ||
(c) | Security Deposit: $48, 442.00 (Security Deposit). (See also Paragraph 5.) | ||
(d) | Other: $ for . | ||
(e) | Total Due Upon Execution of this Lease: $97,863.00. |
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50. | TENANT IMPROVEMENT SCOPE : | |
Lessee accepts in as-is condition and repair as of the lease Commencement Date subject to the Base Building Improvements outlined herein. Lessee will obtain all necessary permits from the City of Petaluma to remodel and improve the subject space, including redesign and installation of parking and landscaping at its sole cost and expense in accordance with design specifications as outlined in Work Letter, attached hereto and incorporated by this reference as Exhibit B Tenant Improvements prepared by Lessee and subject to approval by Lessor. | ||
Lessor shall inspect said premises within three (3) days after notice from Lessee of Lessees completion of said improvements to ascertain that Tenant Improvements have been installed in accordance with plans and specifications. Lessee and Lessor shall provide a punch list of items not in accordance with plans and specifications or not installed in a good workmanlike manner. Lessee shall cause the punch list items to be corrected within thirty (30) days. Lessor shall have the right to inspect the Tenant Improvements at all times during the course of construction. | ||
Within 30 days after completion by Lessee of the Tenant Improvements, Lessee shall provide Lessor an itemized statement which sets forth the direct cost to lessee of Tenant Improvements excluding any costs or expenses allocated to employees of Tenant. Lessee shall provide workers compensation and liability insurance with a minimum $1,000,000.00 per occurrence for said installation and to name Lessor additional insured and completed operations insurance. Lessee shall indemnify and hold harmless Lessor for all claims of employees, invitees, materialmen, supplier arising out of said installation. | ||
BASE BUILDING IMPROVEMENTS | ||
Lessor, at Lessors sole cost and expense, shall be responsible for completing the following improvements to the Premises prior to the Lease Commencement Date: |
| Lessor to verify and warrants and represent to Lessee that the electrical to the Building is 1600 amps, however only 800 amps will be allocated to Lessees subject space. If additional space is leased by lessee then additional power will be available on a prorated basis as a percentage of occupancy. | ||
| The roof shall be in good condition and repair and leak free. | ||
| The existing HVAC units for the office portion of the building and gas fired heaters in the warehouse portion of the building shall be delivered in good operating condition and repair, and fully serviced per manufacture specifications. | ||
| Exterior Building ADA access, including ramps and parking. | ||
| If required by the Fire Department, paved access around the Building perimeter | ||
| Seismic upgrading if required by the City of Petaluma. | ||
| The Building shall comply with all applicable codes, ordinances and other government regulations other than those required solely due to Lessees intended use and occupancy of the Premises. | ||
| The Premises shall be delivered broom swept and free of debris. | ||
| Remove the HBJ placards attached to the Building. |
51. | FINANCIAL INFORMATION | |
Lessors have reviewed and approved Lessees financial statements. | ||
Lessor may deliver such financial information in Lessors possession to lending institutions, mortgage brokers, investors in the subject property or prospective purchasers. | ||
52. | PERMITS | |
Lessee will obtain a use permit if required from the appropriate municipality within thirty (30) days of acceptance hereof. Lessee shall use due diligence in pursuing such permits and pay all costs associated with them. Lessee shall have the responsibility to maintain any use permits and to comply with all terms and conditions of said use permits during the term of this Lease. If Lessees application for a use permit is denied, Lessor or Lessee may declare this lease void, in which event all deposits and prepaid rent shall be returned to Lessee. |
53. | HAZARDOUS WASTE | |
If Lessee uses, stores, or becomes aware of any hazardous waste or substances as listed by Proposition 65, he will advise Lessor within three (3) days of such existence and either obtain approval from Lessor and the appropriate governing agencies within thirty (30) days from notice or remove and clean up said hazardous waste to standards required by the Lessor and the appropriate governing agencies within sixty (60) days from notice. | ||
If Lessee, his invitees, employees, agents or associates cause or allow a spill, or contamination of the premises, common area, soil or surrounding area, then it will be the responsibility of Lessee to clean up said hazard to the degree required and within the time frame set by any public entity which has jurisdiction and particularly in response to the Super Fund Act and Proposition 65. | ||
Lessor is responsible for any hazardous waste violations, occurrences or clean-up required prior to lease commencement or caused by Lessor or other tenants during the lease term without reimbursement from Lessee. | ||
54. | AREA MEASUREMENT | |
Lessee has verified and approved the system of measurement, the usable square footage and rentable square footage of the subject premises. Lessee acknowledges the main entry into the office areas are a shared common area with the adjacent space. | ||
55. | BUILDING OPERATING EXPENSES & PASS THROUGH OF INCREASES | |
Lessee to review and approve the scope and delineation of Lessees and Lessors base year expenses, common area expenses, repairs and maintenance, taxes, insurance, capital replacements within ten (10) days of receipt from Lessor a summary of such responsibility. Lessee to pay its prorata share of the common area operating expenses on the first day of each month along with the monthly rent. | ||
Lessor shall have the right to pass through to Lessee increases in the Building Operating Expenses over the Base Year of the Lease term based upon Lessees prorata share of occupancy in the Building (72,301 / 172,656 sf) which is 41.9%. | ||
For the calculation of the Building Operating Expenses the Base Year shall be 2001. The following items will be considered Base Year Building Operating Expenses paid by Lessor, any increases in the following items over the base year will be prorated and passed through to the Lessee: |
| Property taxes (excluding bonds or assessments). | ||
| Building insurance (Lessee is also responsible for increases due to its use and occupancy of the Building). | ||
| Exterior building Maintenance and Repair, including roof maintenance and repair (excluding penetrations made by tenant), paint and glazing (excluding insurable events, a new roof or other capital expenditure required to be performed by Lessor). |
56. | RENT ESCALATION | |
(a) On the anniversary date and every 12 months thereafter, the monthly rent payable under Paragraph 4 of the attached lease shall be adjusted by the increase, if any, from the date this lease commenced, in the Consumer Price Index of the Bureau of Labor Statistics of the U. S. Department of Labor for all Urban Consumers, San Francisco-Oakland, California (1982-1984 base period) All Items, herein referred to as C.P.I., minimum rent escalation will be 4% per annum, not to exceed 7% per annum. | ||
(b) The monthly rent payable in accordance with paragraph (a) of this Addendum shall be calculated as follows: the rent payable for the first month of the term of this lease, as set forth in Paragraph 1.5 of the attached lease, shall be multiplied by a fraction, the numerator of which shall be the C.P.I. of the calendar month during which the adjustment is to take effect, and the denominator of which shall be the C.P.I. for the calendar month in which the original lease term commences. The rent escalation however will be a minimum of 4% per annum not to exceed 7% per annum. The sum so calculated shall constitute the new monthly rent hereunder, but in no event shall such new monthly rent be less than the rent payable for the month immediately preceding the date for rent adjustment. |
(c) Pending receipt of the required C.P.I. and determination of the actual adjustment, Lessee shall pay an estimated adjusted rental, as reasonably determined by Lessor by reference to the then available C.P.I. information. Upon notification of the actual adjustment after publication of the required C.P.I., any overpayment shall be credited against the next installment of rent due, and any underpayment shall be immediately due and payable by Lessee. Lessors failure to request payment of an estimated or actual rent adjustment shall not constitute a waiver of the right to any adjustment provide for in the lease or this addendum. | ||
(d) In the event the compilation and/or publication of the C.P.I. shall be transferred to any other governmental department or bureau or agency or shall be discontinued, then the index most nearly the same as the C.P.I. shall be used to make such calculation. In the event that Lessor and Lessee cannot agree on such alternative index, then the matter shall be submitted for decision to the American Arbitration Association in accordance with the then rules of said association and the decision of the arbitrators shall be binding upon the parties. The cost of said Arbitrators shall be paid equally by Lessor and Lessee. | ||
57. | OPTION TO EXTEND | |
Lessor hereby grants to Lessee the option to extend the term of this Lease for two (2) five (5) year periods each commencing when the prior term expires upon each and all of the following terms and conditions: | ||
(i) Lessee gives to Lessor, and Lessor actually receives, on a date which is prior to the date that the option period would commence (if exercised) by at least nine (9) months written notice of the exercise of the option to extend this lease for each said additional term, time being of the essence. If said notification of the exercise of said option is not so given and received, this option shall automatically expire; | ||
(ii) The provisions of paragraph 39, including the provision relating to default of Lessee set forth in paragraph 39.4 of this Lease are conditions of this Option; | ||
(iii) All of the terms and conditions of this Lease except where specifically modified by this option shall apply; | ||
(iv) The new monthly base rent for each of the option periods shall be calculated as follows: | ||
The rent payable by Lessee during the first year of the option period shall be the fair market rental value of the Premises at the commencement date of the option period. In no event shall the rent for any option period be less than the rent paid by Lessee during the year immediately preceding such option period. If Lessor and Lessee cannot agree on the fair market rental value of the Premises for the extension periods within forty-five (45) days after the Lessee has notified Lessor of its exercise of the option, Lessor and Lessee shall each select, within forty-five (45) days of such notification, an appraiser who must be a qualified M.A.I. appraiser to determine said fair market rental value. If one party fails to so designate an appraiser within the time required, the determination of fair market rental value of the one appraiser who has been designated by the other party hereto within the time required shall be binding upon both parties. The appraisers shall submit their determinations of fair market rental value to both parties within thirty (30) days after their selection. If the different between the two determinations is ten percent (10%) or less of the higher appraisal, then the average between the two determinations shall be the fair market rental value of the Premises. If said difference is greater than ten percent (10%), then the two appraisers shall within twenty (20) days of the date that the later submittal is submitted to the parties designate a third appraiser who must also be a qualified M.A.I. appraiser. The sole responsibility of the third appraiser will be to determine which of the determinations made by the first appraisers is most accurate. The third appraiser shall have no right to propose a middle ground or any modification of either of the determinations made by the first two appraisers. The third appraisers choice shall be submitted to the parties within thirty (30) days after his or her selection. Such determination shall bind both of the parties and shall establish the fair market rental value of the Premises. Each party shall pay equal share of the fees and expenses of the third appraiser. | ||
Fair market rental value for purpose of this Lease shall mean the then prevailing rent for office/warehouse premises comparable in size, quality, and orientation to the demised Premises, located in buildings with space of comparable in size with approximately 18% office buildout, and in the general vicinity of, the building which demised Premises are located, leased, on terms comparable to the terms contained in this Lease. | ||
The monthly rent payable by Lessee during the Option periods shall escalate annually per the Rent Escalation clause in paragraph 56 of this lease |
58. | PARKING | |
The current parking at the Building is one hundred thirty-six (136) spaces. Lessee at Lessees sole cost and expense, shall construct up to two hundred and four (204) additional parking spaces for the Building, which shall include all landscape, irrigation, and lighting modifications required by the City of Petaluma, excluding any parking development on the eastside of the building that is leased to Sola Optical, as shown on Site Plan Exhibit A-1. Out of the total parking spaces at the building, Lessee shall have the exclusive right to all of the parking with the exception of one hundred (100) parking spaces which shall be reserved for the future tenants of the northern and central portion of the Building. Lessee shall coordinate the design and construction of the additional parking, subject to Lessors prior written consent, which shall not be unreasonably withheld. Construction of the additional parking area for the northern section of the premises to be installed within twelve (12) months from lease execution. Lessees architect, The Fifth Resource Group is currently working on a site plan, which Lessee will provide Lessor as soon as possible for Lessors review and approval. | ||
Lessor has reserved for itself use of 100 spaces. Until completion of Lessees construction of the additional 204 parking spaces, Lessee may use such of Lessors parking spaces as Lessor, in its sole discretion shall allow. However in the event, because of Lessors needs or that of additional tenants of the Building, consent to use by Lessee of Lessors parking spaces is terminated, Lessee, at its sole cost and expense will seek other and additional parking spaces for its use. | ||
59. | TERMINATION | |
Lessee shall have the right to terminate this Lease after the sixtieth (60 th ) month and annually thereafter during the initial lease tern by providing Lessor with a minimum of twelve (12) months prior written notice to Lessor of Lessees intent to terminate the lease. This termination clause expires after the initial lease term and does not apply to any extension options. | ||
60. | FIRST RIGHTS OF FIRST OFFER TO LEASE | |
During the term of the lease, and options periods if exercised, Lessee shall have the first right of first offer to lease any portion of the remainder of the Building after one year of its lease term. Lessor shall provide Lessee with written notice via certified mail that Lessor has available space to lease. Lessee shall have five (5) business days to respond in writing its desire to begin negotiations, if after thirty (30) days from Lessees notice negotiations fail, Lessor may terminate Lessees right of first offer, and Lesser is free to negotiate with any third party to lease the available space with no further obligation to Lessee. | ||
61. | SUBLEASE / ASSIGNMENT | |
Lessee shall have the right to assign all or a portion of the Premises to a subsidiary or affiliated company or to any bona fide corporate successor, and shall have the right to sublease all or a portion of the Premises to any third party provided subtenants use and occupancy of the Premises does not violate the permitted uses provision of the Lease agreement, Lessor approves its financial statement, and lease guaranty remains in effect. In the event the Lessee subleases all or a portion of the Premises Lessee shall have the right to all rent in excess of that paid by Lessee to Lessor. | ||
62. | LEASE GUARANTY | |
IGC Polycold Inc. is a subsidiary of Intermagneties General Corporation, which is publicly traded on the Nasdaq the symbol of IMG. In consideration of Lessor entering into a lease with IGC polycold Inc., Intermagnetics General, herein after Guarantor, will guaranty the Lease for the full lease term. | ||
63. | NON-DISTURBANCE | |
Lessee shall be granted a non-disturbance agreement from the Lessors current mortgagee and Lessor will use its best efforts to obtain similar agreements from future mortgagees. |
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Lessee:
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Lessor:
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Acknowledgment: | ||||||||
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Lessee:
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Lessor:
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[ILLEGIBLE] | [ILLEGIBLE] |
(a) | A fiduciary duty of utmost care, integrity, honesty and loyalty in dealing with the Landlord. |
(a) | Diligent exercise of reasonable skill and care in performance of the agents duties. |
(b) | A duty of honest and fair dealing and good faith. |
(c) | A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. |
(a) | A fuduciary duty of utmost care, integrity, honesty and loyalty in dealings with the Tenant. |
(a) | Diligent exercise of reasonable skill and care in performance of the agents duties. |
(b) | A duty of honest and fair dealing and good faith. |
(c) | A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent attention and observation of, the parties. |
(a) | A fiduciary duty of utmost care, integrity, honest and loyalty in the dealings with either Landlord or Tenant. |
(b) | Other duties to the Landlord and the Tenants stated above in their assertive sections. |
Landlord
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Tenant
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Landlord:
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Agent:
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Keegan & Coppin Company, Inc. | By: | /s/ Illegible | Date | 9/06/01 | |||||||
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Tenant:
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/s/ Illegible | Date | 9/7/01 | |||||||||
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Tenant:
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Date | |||||||||||
[Illegible] | Date |
Tenant:
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Brooks Automation, Inc. | |
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Tenants
Representative,
Address, and
Telephone:
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Bruce MacGibbon
18870 NE Riverside Parkway |
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Gresham, OR 97230
(503) 465-6071 |
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Premises:
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That portion of the Building, containing approximately 165,000
rentable square feet, as determined by Landlord, as shown on
Exhibit A.
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Project:
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Southshore Corporate Park | |
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Building:
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Southshore Corporate Park Building A
18550-18870 NE Riverside Pkwy. |
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Gresham, OR 97230 | |
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Tenants
Proportionate Share
of Project:
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36.83% | |
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Tenants
Proportionate Share
of Building:
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100.00% | |
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Lease Term:
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Beginning on the Commencement Date
and ending on the last day of
the 63rd full calendar month thereafter.
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Commencement Date:
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January 1, 2011 |
Initial Monthly Base Rent:
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See Addendum 1 |
Initial
Estimated Monthly
Operating Expense Payments: |
1. Utilities: | | ||||
(estimates only and subject to
adjustment to
actual costs and
expenses according
to the provisions
of this Lease)
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2. Common Area Charges: | $ | 7,431.40 | |||
3. Taxes: |
$ |
10,965.20 |
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4. Insurance: |
$ |
1,161.33 |
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5. Others: Mgt. Fee |
$ |
2,813.21 |
Initial Estimated Monthly
Operating Expense Payments: |
$22,371.14 | |
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$86,721.14 |
Security Deposit:
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$53,147.00 | |
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Broker:
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None | |
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Addenda:
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1. Base Rent Adjustments 2. HVAC Maintenance Contract 3. Sign Specifications 4. Move Out Conditions 5. One Renewal Option at Market | |
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Exhibits:
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A. Site Plan |
- 1 -
- 2 -
- 3 -
- 4 -
- 5 -
- 6 -
- 7 -
- 8 -
- 9 -
- 10 -
- 11 -
TENANT: | LANDLORD: | |||||
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Brooks Automation, Inc. | CATELLUS OPERATING LIMITED | |||||
PARTNERSHIP, | ||||||
a Delaware limited partnership | ||||||
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By: | Palmtree Acquisition Corporation, | ||||
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a Delaware
corporation,
its general partner |
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By: | |||||
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Name: | |||||
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Title: | |||||
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- 12 -
1. |
The sidewalk, entries, and driveways of the Project shall not be obstructed by Tenant, or its
agents, or used by them for any purpose other than ingress and egress to and from the
Premises.
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2. |
Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the
parking areas, landscaped areas or other areas outside of its Premises, or on the roof of the
Project.
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3. |
Except for seeing-eye dogs, no animals shall be allowed in the offices, halls, or corridors in
the Project.
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4. |
Tenant shall not disturb the occupants of the Project or adjoining buildings by the use of
any radio or musical instrument or by the making of loud or improper noises.
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5. |
If Tenant desires telegraphic, telephonic or other electric connections in the Premises,
Landlord or its agent will direct the electrician as to where and how the wires may be
introduced; and, without such direction, no boring or cutting of wires will be permitted. Any
such installation or connection shall be made at Tenants expense.
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6. |
Tenant shall not install or operate any steam or gas engine or boiler, or other mechanical
apparatus in the Premises, except as specifically approved in the Lease. The use of oil, gas
or inflammable liquids for heating, lighting or any other purpose is expressly prohibited.
Explosives or other articles deemed extra hazardous shall not be brought into the Project.
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7. |
Parking any type of recreational vehicles is specifically prohibited on or about the Project.
Further, parking any type of trucks, trailers or other vehicles in the Premises is
specifically prohibited. Except for the overnight parking of operative vehicles, no vehicle
of any type shall be stored in the parking areas at any time. In the event that a vehicle is
disabled, it shall be removed within 48 hours. There shall be no For Sale or other
advertising signs on or about any parked vehicle. All vehicles shall be parked in the
designated parking areas in conformity with all signs and other markings. All parking will
be open parking, and no reserved parking, numbering or lettering of individual spaces will be
permitted except as specified by Landlord.
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8. |
Tenant shall maintain the Premises free from rodents, insects and other pests.
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9. |
Landlord reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs or who shall in
any manner do any act in violation of the Rules and Regulations of the Project.
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10. |
Tenant shall not cause any unnecessary labor by reason of Tenants carelessness or
indifference in the preservation of good order and cleanliness. Landlord shall not be
responsible to Tenant for any loss of property on the Premises, however occurring, or for any
damage done to the effects of Tenant by the janitors or any other employee or person.
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11. |
Tenant shall give Landlord prompt notice of any defects in the water, lawn sprinkler, sewage,
gas pipes, electrical lights and fixtures, heating apparatus, or any other service equipment
affecting the Premises.
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12. |
Tenant shall not permit storage outside the Premises, including without limitation, outside
storage of trucks and other vehicles, or dumping of waste or refuse or permit any harmful
materials to be placed in any drainage system or sanitary system in or about the Premises.
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13. |
All moveable trash receptacles provided by the trash disposal firm for the Premises must be
kept in the trash enclosure areas, if any, provided for that purpose.
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14. |
No auction, public or private, will be permitted on the Premises or the Project.
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15. |
No awnings shall be placed over the windows in the Premises except with the prior written
consent of Landlord.
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16. |
The Premises shall not be used for lodging, sleeping or cooking or for any immoral or illegal
purposes or for any purpose other than that specified in the Lease. No gaming devices shall
be operated in the Premises.
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17. |
Tenant shall ascertain from Landlord the maximum amount of electrical current which can
safely be used in the Premises, taking into account the capacity of the electrical wiring in
the Project and the Premises and the needs of other tenants, and shall not use more than such
safe capacity. Landlords consent to the installation of electric equipment shall not
relieve Tenant from the obligation not to use more electricity than such safe capacity.
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18. |
Tenant assumes full responsibility for protecting the Premises from theft, robbery and
pilferage.
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- 13 -
19. |
Tenant shall not install or operate on the Premises any machinery or mechanical
devices of a nature not directly related to Tenants ordinary use of the Premises and shall
keep all such machinery free of vibration, noise and air waves which may be transmitted beyond
the Premises.
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- 14 -
Period | Monthly Base Rent | |||||||||||
January 1, 2011
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to | March 31, 2011 | $ | 0.00 | * | |||||||
April 1, 2011
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to | March 31, 2013 | $ | 64,350.00 | ||||||||
April 1, 2013
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to | March 31, 2015 | $ | 68,211.00 | ||||||||
April 1, 2015
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to | March 31, 2016 | $ | 72,303.66 |
* | Tenant shall remain responsible for Operating Expenses and Utilities during the period of abated rent. |
- 15 -
Paragraph 11, captioned TENANT REPAIRS, is revised to include the following: |
1. | Adjust belt tension; | ||
2. | Lubricate all moving parts, as necessary; | ||
3. | Inspect and adjust all temperature and safety controls; | ||
4. | Check refrigeration system for leaks and operation; | ||
5. | Check refrigeration system for moisture; | ||
6. | Inspect compressor oil level and crank case heaters; | ||
7. | Check head pressure, suction pressure and oil pressure; | ||
8. | Inspect air filters and replace when necessary; | ||
9. | Check space conditions; | ||
10. | Check condensate drains and drain pans and clean, if necessary; | ||
11. | Inspect and adjust all valves; | ||
12. | Check and adjust dampers; | ||
13. | Run machine through complete cycle. |
- 16 -
- 17 -
1. |
All lighting is to be placed into good working order. This includes replacement of bulbs,
ballasts, and lenses as needed.
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2. |
All truck doors and dock levelers should be serviced and placed in good operating order.
This would include the necessary replacement of any dented truck door panels and adjustment of
door tension to insure proper operation. All door panels which are replaced need to be painted
to match the Building standard.
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3. |
All structural steel columns in the warehouse and office should be inspected for damage.
Repairs of this nature should be pre-approved by the Landlord prior to implementation.
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4. |
Heating/air-conditioning systems should be placed in good working order, including the
necessary replacement of any parts to return the unit to a well maintained condition. This
includes warehouse heaters and exhaust fans. Upon move-out, Landlord will have an exit
inspection performed by a certified mechanical contractor to determine the condition.
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5. |
All holes in the sheet rock walls should be repaired prior to move-out.
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6. |
The carpets and vinyl tiles should be in a clean condition and should not have any holes or
chips in them. Landlord will accept normal wear on these items provided they appear to be in a
maintained condition.
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7. |
Facilities should be returned in a clean condition which would include cleaning of the coffee
bar, restroom areas, windows, and other portions of the space.
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8. |
The warehouse should be in broom clean condition with all inventory and racking removed.
There should be no protrusion of anchors from the warehouse floor and all holes should be
appropriately patched. If machinery/equipment is removed, the electrical lines should be
properly terminated at the nearest junction box.
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9. |
All exterior windows with cracks or breakage should be replaced.
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10. |
The Tenant shall provide keys for all locks on the Premises, including front doors, rear
doors, and interior doors.
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11. |
Items that have been added by the Tenant and affixed to the Building will remain the property
of Landlord, unless agreed otherwise. This would include but is not limited to mini-blinds,
air conditioners, electrical, water heaters, cabinets, flooring, etc. Please note that if
modifications have been made to the space, such as the addition of office areas, Landlord
retains the right to have the Tenant remove these at Tenants expense.
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12. |
All electrical systems should be left in a safe condition that conforms to code. Bare wires
and dangerous installations should be corrected prior to move-out.
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13. |
All plumbing fixtures should be in good working order, including the water heater. Faucets
and toilets should not leak.
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14. |
All dock bumpers must be left in place and well secured.
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- 18 -
- 19 -
- 20 -
A . | Stock Grant or RSU Election ( please check only one box.) |
o | I wish to receive shares of Brooks stock that may be awarded to me during the calendar year _______ . | ||
o | I wish to receive Restricted Stock Units that may be awarded to me during the calendar year _______ . | ||
(Please complete section B only if you have chosen to receive RSUs.) |
B . | ELECTION TO DEFER RSUs |
o | I elect to defer receipt of payment of RSUs that may be awarded to me during the calendar year _______ . |
Time of Payment | ||
I elect to receive payment of my RSUs covered by this election at the following time ( check one box only ): |
o | The earlier of my attainment of age 65 or my separation from service from the Company. | ||
o | The later of my attainment of age 65 or my separation from service from the Company. | ||
o | The following specified date: ________________. |
Any RSUs covered by this election will be paid in a single lump sum share payment as soon as reasonably practicable following the relevant payment event, but in no event will such payment be made more than 90 days after the relevant event. Unless otherwise provided by the Plan, payment will be in the form of shares and the RSU award shall be subject to any applicable tax withholding. Separation from service shall have the meaning ascribed to such term under Section 409A of the Internal Revenue Code, but generally means when you cease to serve as a director of the Company. | ||
Death | ||
In the event of my death prior to the time elected for payment, then notwithstanding my election above, my RSUs covered by this election shall be paid to the following beneficiary in a lump sum: |
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Name: | |||||
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Address: | |||||
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Change in Control | ||
In the event of a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation 1.409A-3(i)(5), then notwithstanding my election above, my RSUs covered by this election shall be paid upon the consummation of such transaction. | ||
Specified Employee Status ( this provision applies only if you later become an employee of the Company ) | ||
If my RSUs covered by this election are payable due to my separation from service from the Company and I am a specified employee of the Company as defined by Section 409A (and as applied according to procedures of the Company) at the time of my separation, then I understand that any payment to me will be delayed until the first day of the 7 th month following my separation from service. |
C. | SIGNATURES |
AGREED AND ACKNOWLEDGED: | ACCEPTED: | |||||
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||||||
Signature of Participant | Date | For the Committee | Date |
Legal Entity
|
Jurisdiction
|
|
Brooks Automation (Delaware) LLC
|
USA | |
Brooks Automation (France) SAS
|
France | |
Brooks Automation (Germany) GmbH
|
Germany | |
Brooks Automation (Singapore) PTE LTD
|
Singapore | |
Brooks Automation Taiwan Company Ltd
|
Taiwan | |
Brooks Automation (the Netherlands) BV
|
The Netherlands | |
Brooks Automation (UK) Ltd
|
UK | |
Brooks Automation Asia Ltd (own 70%)
|
Korea | |
Brooks Automation Israel, Ltd
|
Israel | |
Brooks Automation Korea Inc.
|
Korea | |
Brooks Automation Luxembourg SARL
|
Luxembourg | |
Brooks Automation (Wuxi) Limited
|
China | |
Brooks Automation Limited
|
Hong Kong | |
Brooks Technology (Shanghai) Limited
|
China | |
CTI Nuclear, Inc.
|
USA | |
Granville Phillips Company
|
USA | |
Helix Securities Corp.
|
USA | |
Helix Technology KK
|
Japan | |
Helix Technology UK Limited
|
UK | |
Interval Logic Corporation (own 90%)
|
USA | |
Strathmore Corporation
|
USA | |
Ulvac Cryogenics Inc. (50% JV in Japan)
|
Japan | |
Yaskawa Brooks Automation, Inc. (50% JV in Japan)
|
Japan |
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