SECOND AMENDMENT TO LEASE
This Second Amendment to Lease ("Agreement") is made and entered
into as of December 1, 2003, by and between Glenborough Fund IX, LLC, a
Delaware limited liability company, ("Landlord") and NVE Corporation, a
Minnesota corporation ("Tenant").
R E C I T A L S
This Agreement is made with reference to the following facts and
objectives:
A. By Lease and Addendum to Lease by and between Glenborough
Properties, L.P., a California limited partnership, ("GPLP") and Nonvolatile
Electronics, Inc., a Minnesota corporation, dated as of October 1, 1998,
(together, the "Lease") Tenant leased the Premises depicted in Exhibit "A" to
the Lease, demised in Section 1. of the Lease, and described in Sections 1.,
2.13., and 2.14. as Suites 11405, 11409,11411, and 11415 deemed to contain
approximately 21,362 square feet of Usable Area located at 11405-11415 Valley
View Road, Eden Prairie, Minnesota, in the Project known as Bryant Lake
Business Center - Phase III. The actual mailing address for the Premises is
11409 Valley View Road, Eden Prairie, Minnesota.
B. Landlord has succeeded to the interests of GPLP in the Lease and in
the Premises. Tenant has succeeded to the interests and obligations of
Nonvolatile Electronics, Inc., in the Lease and in the Premises, by way of
corporate merger.
C. Landlord and Tenant desire to extend the Term, and to otherwise
modify and amend the Lease, on and subject to the terms, covenants, and
conditions set forth below.
NOW, THEREFORE, Landlord and Tenant hereby agree as follows:
A G R E E M E N T
1. Effective immediately, Section 2.5. of the Lease is modified and
amended to set forth a new Expiration Date of December 31, 2008.
2. Effective immediately, Sections 2.2. and 2.9. of the Lease shall be
modified and amended to add the following schedule of Monthly Installments of
Base Rent to the existing schedules:
January 1, 2007, through December 31, 2007, $10,243.35 / month
January 1, 2008, through December 31, 2008, $10,550.65 / month
3. Tenant desires to construct a "clean room" in its Premises and to
perform certain other work to be determined later, and Landlord has consented,
on and subject to the following provisions:
Landlord shall provide an allowance (the "Allowance") in an amount
not to exceed the lesser of $50,000.00, or Tenant's actual construction costs,
for construction of its clean room and other improvements in its Premises (such
work, hereafter, the "Leasehold Improvements"), as incurred prior to December
31, 2004. Landlord shall disburse the Allowance to Tenant, prior to completion
of such work, in the form of four (4) quarterly payments of $12,500.00 each
commencing March 31, 2004. Within not more than sixty (60) days after December
31, 2004, Tenant shall provide third-party invoices for all portions Leasehold
Improvements work performed prior to December 31, 2004, detailing the dates on
which such work was performed. Tenant understands and agrees that the Allowance
shall only be available for those portions of the Leasehold Improvements
performed prior to December 31, 2004, and Tenant shall return any portion of
the Allowance not applicable to Leasehold Improvements performed prior to such
date. Reimbursable categories of expense shall include design work; permitting
costs; plan check fees, engineering costs; generic HVAC upgrades, if required;
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clean-room specific HVAC upgrades as required; clean-room specific door,
window, ceiling, and floor modifications; cabling costs; and actual
construction costs. Non-reimbursable categories of expenses shall include
furniture, equipment, and other personal property costs.
Tenant may commence construction of the Leasehold Improvements at
any time after the date of this Agreement or execution by Landlord, whichever
is later.
Once commenced, Tenant shall diligently complete the Leasehold
Improvements, to minimize disruption in the Building, and shall secure a
guarantee of the Leasehold Improvements of not less than one (1) year. Landlord
shall reimburse Tenant for allowable costs of the Leasehold Improvements out of
the Allowance once construction is completed, as detailed above.
Construction of the Leasehold Improvement shall also be subject to
the following general conditions:
(a) The Leasehold Improvements shall be installed and/or constructed by or
under the direction of Tenant but be subject to Landlord's ongoing review
and approval. Tenant shall promptly and diligently install and/or construct
the Leasehold Improvements and the specifications for the Leasehold
Improvements shall be at least Building Standard, or the quality of the
pre-existing improvements in the Premises, except where waived in writing
by Landlord.
(b) If Tenant elects to perform work that requires any building permit or
involves relocating walls or doors, then Tenant shall provide Landlord with
copies of a preliminary space plan and specifications (collectively, the
"Space Plan") and, after Landlord has approved or made changes to the Space
Plan, with final construction drawings and specifications (collectively,
the "Construction Drawings") detailing such work for Landlord's review and
approval. No Space Plan or Construction Drawings shall be required for
carpet, paint, and updating lighting and other fixtures. Tenant shall
obtain all required building permits at its own cost (but subject to
subsequent reimbursement out of the Allowance) and shall provide Landlord
with copies. Landlord shall reasonably and promptly sign any building
permit applications where the owner's signature is required, provided that
Tenant hereby agrees to protect, defend, and indemnify Landlord from any
liabilities arising there from.
(c) Tenant's general contractor ("General Contractor") and all subcontractors
shall be subject to the reasonable approval of Landlord and, at request of
Landlord if generally required for work in the Building, shall employ only
union workers. General Contractor and all subcontractors shall be licensed
and qualified to do business in the State of Minnesota.
(d) Tenant's General Contractor shall provide Landlord with Certificates of
Insurance: (i) naming Landlord, its property manager, and any other
parties designated by Landlord, as additional insureds, as their respective
interests may appear; (ii) evidencing general liability, owner's and
contractor's protective ("OCP") liability, and property damage insurance
with respect to the work of Leasehold Improvements of at least One Million
Dollars ($1,000,000.00) combined single limit for bodily injury, death and
property damage liability or such other limits that seem appropriate to the
scope of the work and financial capacity of the contractor; and (iii)
evidencing Workers' Compensation insurance in compliance with State law.
The preceding insurance is in addition to Tenant's insurance obligations
under the Lease.
(e) Landlord reserves the right to enter the Premises (i) to post such notices,
including, without limitation, notices of non-responsibility for mechanics'
liens, as Landlord deems necessary, and (ii) to inspect the progress and
quality of the Leasehold Improvements.
(f) Tenant shall take all reasonable steps necessary to ensure that the
Leasehold Improvements shall be installed and/or constructed in a manner
that will not interfere with the quiet enjoyment of other tenants and of
guests entering the lobby including, without limitation, complying with
Landlord's existing rules and regulations, if any, for contractors and/or
for construction work in the Building and with any separate or additional
reasonable directives of Landlord. Tenant shall ensure that the work area
is kept clean and that construction material does not block any corridor,
hallway, walkway, driveway, or other passageway commonly used by other
tenants or by maintenance personnel. Tenant shall bring construction
materials to the Premises in the manner, and during time periods, specified
by Landlord to minimize impact on other tenants, on Building guests, and on
the Building. Tenant shall be responsible for all clean-up and disposal of
waste, which shall not be disposed of, other than in minor quantities
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consistent with normal Premises usage, in Building trash containers.
(g) Tenant shall diligently commence and pursue the Leasehold Improvements to
completion in accordance with the requirements of this Section and shall be
solely responsible for any delays in completion. Upon substantial
completion of the Leasehold Improvements, Landlord, Tenant, any space
planner or architect, and General Contractor shall walk the Premises
together and either agree the Leasehold Improvements are complete or agree
upon a list of minor corrective and finish items ("punch list" items)
remaining to be done. In addition, not later than ninety (90) days after
substantial completion, Tenant shall obtain, and provide Landlord with, any
applicable certificate of occupancy or other evidence of final approvals
from appropriate municipal authorities, if available, with copies of
invoices for the Leasehold Improvements indicating payment in full, and
with final, unconditional mechanics' lien releases. Tenant shall diligently
pursue correction and/or completion of any outstanding punch list items
and, at the request of Landlord, shall certify upon their completion that
the Leasehold Improvements have been completed according to "as-built"
plans and specifications, providing Landlord with one complete set of such
"as-built" plans and specifications for any Leasehold Improvements
requiring a building permit, in CD-ROM format if requested by Landlord.
(h) Landlord understands and agrees that the Leasehold Improvements may not be
completed prior to December 31, 2004. Tenant understands and agrees that
the Allowance is only applicable to work prior to such date.
(i) Landlord shall not be liable to Tenant for any noncompliance of the
Leasehold Improvements with building codes or other laws or regulations
notwithstanding Landlord's review and approval of the Space Plan and
Construction Drawings and any inspection and approval of the Leasehold
Improvements. Tenant shall be solely responsible for complying with all
laws and regulations including, without limitation, the American's with
Disabilities Act and with any energy conserving laws or requirements; but
Landlord shall be responsible for path of travel to the Premises, unless
Tenant has relocated entry doors.
4. All other terms, covenants, and conditions of the Lease, shall
remain in full force and effect.
This Agreement modifies and amends the Lease. To the extent there
are any inconsistencies between this Agreement and the Lease, the terms,
covenants, and conditions of this Agreement shall govern. Capitalized terms not
defined herein are defined in the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Agreement as of the date first above written.
LANDLORD:
GLENBOROUGH FUND IX, LLC,
a Delaware limited liability company
By: GRT IX, Inc.,
a Delaware corporation
Its Managing Member
By: /s/ Michael A. Steele
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Its Executive Vice President
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TENANT:
NVE CORPORATION,
a Minnesota corporation
By: /s/ Daniel A. Baker
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Its President and CEO
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By:
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Its
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