EXHIBIT 10.43
NINTH AMENDMENT TO LEASE
THIS NINTH AMENDMENT OF LEASE (this "Amendment") is made and entered
into as of this 8th day of December, 1998, by and between REGIONAL INDUSTRIAL
DEVELOPMENT CORPORATION OF SOUTHWESTERN PENNSYLVANIA ("Landlord") and TOLLGRADE
COMMUNICATIONS, INC. ("Tenant").
WITNESSETH THAT:
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated August
5, 1993 (the "Original Lease"); and
WHEREAS, the Original Lease Agreement was amended by First Amendment of
Lease Agreement dated March 15, 1994 (the "First Amendment"), Second Amendment
of Lease Agreement dated as of July 1, 1994 (the "Second Amendment), Third
Amendment of Lease Agreement dated as of September 15, 1994 (the "Third
Amendment"), Fourth Amendment of Lease Agreement dated as of September 15, 1994
(the "Fourth Amendment), Fifth Amendment of Lease Agreement dates as of March 6,
1995 (the "Fifth Amendment"), Sixth Amendment of Lease Agreement dated as of
September 18, 1995 (the "Sixth Amendment"), Seventh Amendment to Lease Agreement
dated July 9, 1996 (the "Seventh Amendment"), and Eighth Amendment of Lease
Agreement dated May 13, 1997. The Original Lease as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment, the Sixth Amendment, Seventh Amendment and Eighth Amendment is
hereinafter called the "Lease"; and
WHEREAS, the parties desire to further amend the Lease in accordance
with the terms of this Amendment;
WHEREAS, the term of the Lease will terminate on December 31, 1998; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, Landlord and Tenant covenant and agree as follows:
1. The Landlord additionally leases and demises unto Tenant 31,190
square feet of space in the Complex, referred to as UNITS 8-10B-D, 11B-E, 12B-D,
AND 13B-C, in its as is condition, for the period commencing September 1, 1998
and continuing throughout the term of this Lease, which space is more fully
shown on EXHIBIT "A" which is attached hereto and made a part hereof. Delivery
of UNITS 8-10B-D, 11B-E, 12B-D, AND 13B-C to Tenant and compliance with all
provisions of the Lease shall occur on September 1, 1998, unless otherwise
agreed between the two parties hereto. Tenant shall pay to Landlord rental for
UNITS 8-10B-D,11B-E,12B-D, AND 13B-C, in advance and without demand on the first
business day of each successive calendar month during the term of the Lease,
together with any escalations provided in the Lease. Monthly rental for any
partial month shall be prorated. No rent shall be payable for UNITS 8-10B-D,
11B-E,12B-D, AND 13B-C for the period August 10, 1998 through December 31, 1998.
Rental for the period from January 1, 1999 through December 31, 2001 shall be as
described in Section 3 of this Amendment and, if Tenant exercises the
option to renew, rental for the period January 1, 2002 through December 31, 2004
shall be as described in Section 4 of this Amendment. UNITS 8-10B-D, 11B-E,
12B-D, AND 13B-C shall be deemed to be part of the Premises under the Lease
except that Section 7(B)(b) and Section 33 of the Original Lease do not apply to
such space. Landlord and Tenant hereby agree that the Premises, including UNITS
8-10B-D, 1 1B-E, 12B-D, AND 13B-C, contain a total of 104,400 square feet of
space.
2. The lease is hereby extended for a period of three (3) years
commencing January 1, 1999 and terminating on December 31, 2001.
3. As rental for the Premises, Tenant shall pay to Landlord as Base Rent
for the Premises, payable in advance and without demand on the first business
day of each successive calendar month during the term of the Lease commencing as
of January 1, 1999, together with any Additional Rent escalations provided in
the Lease, the following sums:
For the period January 1, 1999 through December 31, 1999, FORTY-FIVE
THOUSAND SIX HUNDRED SEVENTY-FIVE AND 00/100 DOLLARS ($45,675.00);
For the period January 1, 2000 through December 31, 2000, FORTY-SIX
THOUSAND NINE HUNDRED EIGHTY AND 00/100 DOLLARS ($46,980.00);
For the period January 1, 2001 through December 31, 2001, FORTY-EIGHT
THOUSAND SEVEN HUNDRED TWENTY AND 00/100 DOLLARS ($48,720.00).
Contemporaneously herewith, Tenant shall pay to Landlord the sums of
$45,675.00, to be held by Landlord as a security deposit, subject to interest
payable to Tenant at the rate of three (3%) percent annually on January 15th of
each year beginning January 15, 1999, for the faithful payment of the rent
coming due under the Lease, and if there is no default under the Lease, said
deposit plus interest shall be returned to Tenant within thirty (30) days
following termination of this Lease. The monthly rent shall continue to be
payable when due, and the security deposit held by Landlord shall not be deemed
to cure any future default in payment of the rent by Tenant. Upon mutual consent
by Tenant and Landlord, such interest shall be applied to base rent due Landlord
under this Lease.
4. Tenant shall have the right and option to renew the term of this
Lease for one (1) additional term of three (3) years following the expiration of
the term described in Section 2 above, provided (i) that this Lease is full
force and effect immediately prior to the date of the commencement of such
renewal term; (ii) that the Tenant is not in default under any of the provisions
herein or under the Lease; and (iii) that Tenant is in full occupancy of the
Premises for its own use and intends to continue such occupancy. The renewal
term shall commence January 1, 2002 and terminate December 31, 2004. The renewal
term shall be exercised by Tenant serving on Landlord written notice to that
effect not later than March 31, 2001. Said renewal shall be upon the same terms,
covenants, conditions and limitations as in this Lease provided, except that in
the renewal term the monthly Base Rent shall be as follows, in addition to any
Additional Rent escalations as outlined in the Lease:
For the period January 1, 2002 through December 31, 2002, the sum of
FIFTY THOUSAND ONE HUNDRED NINETY-NINE AND 00/100 DOLLARS ($50,199.00);
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For the period January 1, 2003 through December 31, 2003, the sum of
FIFTY-ONE THOUSAND SIX HUNDRED SEVENTY-EIGHT AND 00/100 DOLLARS ($51,678.00);
and
For the period January 2004 through December 31, 2004, the sum of
FIFTY-THREE THOUSAND TWO HUNDRED FORTY-FOUR AND 00/100 DOLLARS ($53,244.00).
The notice of election to take the renewal when given by Tenant shall be
irrevocable and shall constitute an agreement between the parties for a renewal
of this Lease as herein stated.
5. Tenant shall provide plans and specifications for any material work
or improvements that Tenant plans to undertake within the Premises to Landlord
for Landlord's prior approval which shall not be unreasonably withheld and shall
be provided in a timely manner. All such approved work and improvements shall be
done in a good, workmanlike and lien free manner and as otherwise required in
the Lease.
6. Tenant shall have the option to lease certain additional space
adjacent to the Premises currently leased to Westinghouse Electric Company (the
"AUTTO Space") to the extent available by notifying Landlord in writing via
certified mail of its intent to do so twelve (12) months in advance. Landlord
agrees to use its best efforts to make such space available to Tenant upon
expiration of such twelve-(12) month notice period. The base rental rate for the
AUTTO Space shall be at the then current rate per square foot for the Premises.
7. During the course of the Lease, the parties acknowledge that Tenant
has installed, repaired and or replaced, at its sole cost and expense, those
heating, ventilation and air conditioning units identified on EXHIBIT B attached
hereto and incorporated herein and will install additional units in the
additional space rented by Tenant pursuant to this Amendment (such units are
hereinafter referred to as the "Tollgrade HVAC Units"). Upon the termination or
expiration of the Lease, Landlord shall notify Tenant in writing within eighteen
(18) months after such expiration or termination whether Landlord desires to
utilize the Tollgrade HVAC Units for subsequent tenants. In the event Landlord
elects to utilize the Tollgrade HVAC Units, Landlord shall pay to Tenant that
amount which shall be separately agreed to in a letter to be signed by the
Landlord and Tenant within sixty (60) days of execution of this Amendment. In
the event Landlord does not elect to utilize the Tollgrade HVAC Units, Tenant
(Tollgrade and not an unnamed future Tenant or Landlord) may, but shall not be
required to, remove the Tollgrade HVAC Units and return those sections of the
Premises affected by the installation by the Tollgrade HVAC Units to the
condition it was in prior to such installation. If Landlord decides not to
utilize the Tollgrade HVAC Units and Tollgrade elects to remove the Tollgrade
HVAC Units pursuant to this Section 7, Tollgrade shall remove such units within
three months after Landlord provides written notice that it does not desire to
utilize the Tollgrade HVAC Units.
8. Landlord is undertaking the provision of additional and reconfigured
parking as represented on EXHIBIT C attached hereto and incorporated herein (the
"Parking Improvements"). Landlord shall complete all such Parking Improvements
on or before December 15, 1998, except for certain landscaping which, due to
inclement weather conditions, may be delayed, but such delay shall not extend
beyond June 1, 1999. In the event the Parking Improvements are not completed by
December 15, 1998, Tenant shall have the following remedies, either of which may
be exercised at the
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option of Tenant: (a) Tenant shall be entitled to obtain or make arrangements
for alternative parking sufficient to address its parking needs until such time
that the Parking Improvements are completed, and to deduct from rental due under
the Lease its actual additional cost of providing such alternative parking after
presenting sufficient documentation and supporting calculation to Landlord; or
(b) Tenant shall have the right to terminate the Lease on or before January 15,
1999, by providing Landlord written notice of such termination if such Parking
Improvements are not completed except for certain landscaping.
9. In addition to completion of the Parking Improvements as set forth in
Section 8 above, Landlord also agrees to make available to Tenant up to (489)
total parking spaces for the remainder of the term (the current and future
shortfall of actual parking spaces compared to the 489 total parking spaces is
herein referred to as the "Additional Required Parking") pursuant to the terms
set forth herein. Tenant shall provide to Landlord written notice of its need
for the Additional Required Parking. Landlord shall provide or construct the
requested portion of parking spaces of the Additional Required Parking within
six (6) months following receipt of Tenant's notice; provided, however that if
construction of the Additional Required Parking requested cannot commence due to
inclement weather conditions or in the event asphalt plants are closed for the
winter, Landlord shall commence such construction as soon as favorable weather
conditions exist and asphalt is available, and diligently complete such
construction within six (6) months from such commencement date. From the date
Landlord receives Tenant's written notice for the need of the Additional
Required Parking requested and for each day thereafter that the Additional
Required Parking requested is not available for use by Tenant, Tenant shall be
entitled to obtain or make arrangements for additional parking equal to the
deficiency in the number of spaces of the Additional Required Parking requested
and deduct from any rental due under the Lease its actual additional cost of
obtaining the number of deficient additional required parking spaces after
presenting sufficient documentation and supporting calculation to Landlord. To
the extent Landlord fails to supply to Tenant such Additional Required Parking
requested pursuant to the terms of this Section 9, Tenant shall have the
following remedies, either of which may be exercised at the option of Tenant:
(a) Tenant shall be entitled to continue to obtain or make arrangements for the
additional required parking equal to the deficiency in number of spaces of the
Additional Required Parking requested and deduct from any rental due under the
Lease its actual additional cost of obtaining the number of deficient Additional
Required Parking spaces requested after presenting sufficient documentation and
supporting calculation to Landlord; or (b) Tenant shall have the right to
terminate the Lease within three (3) months after Tenant provides written notice
to Landlord that it has failed to supply the Additional Required Parking
requested pursuant to this Section 9.
10. Landlord will continue to complete the in progress planned phased
roof repair work, of which over one half of the building has already been
completed as of the date of this amendment, by December 31, 1998.
11. It is hereby acknowledged by Landlord that (i) since the inception
of this Lease, Tenant has substantially increased its rental area in the
Complex, and has invested substantial amounts of money and capital to make
improvements in the Complex; and (ii) such improvements have essentially
converted certain sections of the Complex from a warehouse facility to an office
complex. As such, notwithstanding anything set forth in the Original Lease or
any subsequent amendments, Landlord hereby agrees to use its best efforts to
relet the Complex as an office facility as opposed to a
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warehouse facility. If Landlord relets the complex as an office facility, then
upon the expiration or termination of the Lease, Tenant shall not be required to
remove any additions, alterations, improvements, installations, trade fixtures
or mechanical equipment installed or constructed by Tenant, and Tenant may
surrender the Premises in its then current state. If, after using its best
efforts, Landlord fails to rent the Complex as an office facility, but rather a
warehouse facility, then Tenant agrees to abide by the Original Lease in
connection with the removal of additions, alterations, improvements,
installations, trade fixtures or mechanical equipment installed or constructed
by Tenant.
12. Landlord acknowledges that (i) Tenant's business operations have
substantially increased in size over the term of the Lease; and (ii) it may be
difficult for Tenant to find alternate and acceptable office space to move its
business operations upon the expiration or termination of the Lease. As such,
notwithstanding anything set forth in the Original lease or any subsequent
amendments, Landlord agrees that upon the effective date of the expiration or
termination of this Lease, Tenant shall have the right and ability, but not the
obligation, to holdover and continue to occupy the Premises, , it being
acknowledged that such holdover may be necessary in order for Tenant to find
alternate and acceptable office space to move its business operations In the
event of holdover by Tenant pursuant to this Section 12, all of the terms and
conditions of this Lease shall continue to apply, except that the holdover
tenancy (the "Holdover Period") shall be set by the Tenant in the holdover
notice ("Notice") provided to Landlord. If Tenant continues to occupy the
Premises beyond the Holdover Period, all of the terms and conditions of this
Lease shall continue to apply except that the tenancy shall be on a
month-to-month basis and the monthly rental rate will increase 20% per month;
provided, however, that the monthly rental rate shall not exceed twice the
rental rate of the last month of the Holdover Period.
13. Any capitalized terms used herein and not defined herein but defined
in the Lease shall have the same definition as provided for in the Lease.
14. Except as specifically amended by this Amendment, the terms and
conditions of the Lease shall remain in full force and effect and shall be
binding on the parties hereto and their respective successors and assigns. In
the event of a conflict between the terms of this Amendment and the terms of the
Lease, the terms of this Amendment shall govern.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the day and year first above written.
ATTEST: REGIONAL INDUSTRIAL DEVELOPMENT
CORPORATION OF SOUTHWESTERN
PENNSYLVANIA
BY: /s/ Colleen B. Poremski BY: /s/ Frank Brooks Robinson
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(Corporate Seal) President
ATTEST: TOLLGRADE COMMUNICATIONS, INC.
BY: /s/ Samuel C. Knoch BY: /s/ Sara M. Antol
----------------------------- -----------------------------
(Corporate Seal)
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EXHIBIT A
[FLOOR PLAN OF LEASED SPACE]
EXHIBIT B
[TABLE OF HVAC NET BOOK VALUE]
EXHIBIT C
[MAP OF PARKING LOT OF LEASED SPACE]