Exhibit 10.9
LEASE
ENTERED INTO AS OF JUNE __, 2004
BETWEEN
VEECO COMPOUND SEMICONDUCTOR INC., Landlord
AND
APA OPTICS, INC., Tenant
LEASE
1. PARTIES. THIS LEASE is entered into as of this _____ day of June,
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2004, by and between Veeco Compound Semiconductor Inc., a Minnesota corporation
(hereinafter "Landlord"), and APA Optics, Inc. a Minnesota corporation
(hereinafter "Tenant"). For good and valuable consideration, the parties agree
to these terms as evidenced by their signatures below. From time to time this
agreement is referred to below as the "Lease."
2. EXHIBITS. Attached to and made a part of this Lease are the following
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exhibits:
Exhibit A. Site Plan showing the Building, the Leased Premises and
the Common Areas.
Exhibit B. List of Hazardous Materials to be used by Tenant in the
Leased Premises.
Exhibit C List of all waste materials to be generated by Tenant
on the Leased Premises.
3. DEFINITIONS. The following terms as used in this Lease shall have the
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meanings set forth below:
(a) "BUILDING": The structure located at 4900 Constellation Drive,
St. Paul, Minnesota 55127, known as the Process Integration
Center (PIC) and shown on Exhibit A attached hereto, in which the
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Leased Premises are located.
(b) "COMMON AREAS": The space marked as such on Exhibit A attached
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hereto and located in the PIC and available for the common or
joint use and benefit of the occupants of the Building.
(c) "HAZARDOUS MATERIALS": All substances, materials and wastes that
are or become regulated or classified as hazardous, toxic or
solid waste under any Applicable Environmental Law, including
without limitation, oil, flammable explosives, asbestos, area
formaldehyde, radioactive materials or waste, or other hazardous,
toxic, contaminated or polluting materials, substances or wastes.
(d) "APPLICABLE ENVIRONMENTAL LAW": Any applicable law, statute,
ordinance, order, rule or regulation relating to or imposing
liability or standards of conduct concerning any hazardous, toxic
or dangerous waste, substance or materials pertaining to health
or the environment, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, and the Resource Conservation and
Recovery Act of 1976, as amended.
(e) "LEASED PREMISES": The space marked as such on Exhibit A
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attached hereto and located in the PIC. The Leased Premises
include four undesignated parking spaces in the Landlord's
parking lot.
(f) "LANDLORD PREMISES": That portion of the Building which is not a
portion of the Leased Premises or the Common Areas.
4. TERM. Landlord hereby leases to Tenant and Tenant hereby leases from
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Landlord the Leased Premises for a term of three (3) years commencing on the
Rent Commencement Date (as defined in Section 5(a) below). This Lease may be
terminated by either party upon 90 days' prior written notice. The Tenant
agrees that prior to, or upon, the effective date of the termination of this
Lease, the Tenant will remove all equipment associated with it's business, at
the Tenant's expense, and without disruption to the Landlord's business. Tenant
agrees to the leave the Leased Premises in clean and working order, ordinary
wear and tear excepted, and free of any and all Hazardous Materials (other than
those which Tenant can prove were present when Tenant took possession).
5. RENT; SECURITY DEPOSIT.
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(a) Tenant shall pay no rent, and the term shall not commence, until
the improvements described in Section 5(d) of this Lease are
completed and the Tenant Machine, as defined in Section 5(d)
below, is ready for initial tool startup as provided in the
agreement between Landlord and Tenant for Tenant's purchase of
the Tenant Machine (the "Rent Commencement Date"). If the Rent
Commencement Date falls on a day other than the first day of a
calendar month, the rent for that month shall be prorated based
on the actual number of days in that month.
(b) Prior to commencement of Tenant's occupancy, Tenant shall pay
$28,200 as a security deposit and shall pay the first month's
rent ($9,400) in advance. Thereafter, Tenant shall pay the
monthly rent of $9,400 on or prior to the first of every month
for the term of this Lease.
(c) Any rent payment due hereunder that is not received by Landlord
within 5 business days after its due date shall be subject to a
1% late fee for each 5 business day period (or fraction thereof)
this it is late.
(d) The Landlord agrees to make the necessary lease hold improvements
to the clean room area necessary to house the Tenant owned, Veeco
D180 MOCVD equipment ("Tenant Machine"). Landlord shall complete
the leasehold improvements in accordance with the requirements of
applicable building codes and shall be responsible for building
code compliance for real property that houses the Tenant Machine.
6. USE. Tenant shall use the Leased Premises only for the growth and
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characterization of GaN epitaxial wafers using a MOCVD reactor, and other
activities directly related thereto. The Tenant is specifically prohibited from
using arsine (AsH3) or phosphine (PH3) gas within the Landlord's building.
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7. RENOVATIONS. Landlord shall retain a contractor (at Landlord's
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expense) to undertake any renovations Landlord deems necessary or appropriate in
order to separate the Leased Premises from the Landlord Premises and Common
Areas, including without limitation firewalls, dividing walls, cranes/winches,
card-key readers, etc., as well as a separate fan and stack for exhausting any
air emissions, and for removing all of the foregoing at the end of the term of
the Lease.
8. PEACEFUL POSSESSION. So long as Tenant is not in default under this
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Lease and subject to the remainder of this Section 8, Tenant shall have quiet
and peaceful possession of the Leased Premises, subject to all of the terms and
conditions set forth in this Lease. Tenant shall designate not more than four (
4) employees who shall have access to the Leased Premises at all times and shall
provide Landlord with written notice of the names of such employees. Tenant
shall perform suitable background, export clearance and other checks of such
employees to ensure their suitability to work in a sensitive area like the
Leased Premises. The four designated employees of Tenant will have 24-hour
access, 7 days per week, to the building, but only the Tenant owned equipment,
common areas, and characterization area and equipment. Any other employees or
other persons associated with Tenant may enter the Leased Premises only with the
prior written permission of Landlord. Tenant shall ensure that employees of
Tenant and other persons associated with Tenant at the Leased Premises will
communicate with Landlord personnel subject to the conditions of Section 20 of
this Lease.
9. COMMON AREAS. Subject to Section 8 of this Lease, Landlord hereby
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grants to Tenant and its representatives, agents, invitees and employees the
non-exclusive right of use of the Common Areas, subject to reasonable rules and
regulations for the use thereof as may be prescribed from time to time by
Landlord.
10. SIGNS. Other than those approved in writing by Landlord in its sole
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discretion, Tenant shall place no signs (portable, mobile or fixed), flags,
posters, or other advertising or promotional materials anywhere within or around
the exterior of the Building without first having obtained Landlord's prior
written approval of same.
11. REPAIRS; CLEANING; DISPOSAL OF HAZARDOUS MATERIALS WASTE.
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(a) Tenant shall, at its own cost and expense, take good care of and
make necessary repairs to the interior of the Leased Premises,
upon notification and approval of Landlord. Landlord is
responsible for janitorial services in the office and Common
Areas. Tenant shall be responsible for janitorial services or
self-cleaning in the clean room housing the Tenant's MOCVD
reactor (the "Tenant Machine"). Tenant shall maintain the Leased
Premises at a level of cleanliness and good repair as required by
Landlord, ordinary wear and tear excepted.
(b) Tenant shall store and dispose of all of Tenant's waste
containing Hazardous Materials at its own expense and in
accordance with applicable laws. Without limiting the foregoing,
whenever such waste is transported through the Building for
disposal, it shall be properly packaged, and an authorized
employee of Landlord shall accompany Tenant's personnel
throughout the process. No Hazardous Materials shall be disposed
of in
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any sink, drain, toilet or otherwise on the Leased Premises or
other premises of Landlord.
12. MECHANICS' LIENS. Should any mechanics' or other liens be filed
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against the Leased Premises or any part thereof by reason of Tenant's acts or
omissions or because of a claim against Tenant, Tenant shall cause the same to
be cancelled and discharged of record by bond or otherwise within ten (10) days
following notice from Landlord of the filing of such lien. However, in the
event Tenant believes such lien has been wrongfully filed, Tenant shall have the
right to defend itself against any such lien so long as Tenant notifies and
indemnifies Landlord.
13. UTILITY CHARGES. The rent shall include all utility charges, included
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water, CDA, sewer and septic, electrical, HVAC, and reasonable amounts of pure
H2 and N2 as determined necessary, by Landlord, to run a Veeco D180 MOCVD
reactor in a 24/7 production mode. Unreasonable amount of utilities, as
determined by Landlord, will be charged to Tenant in addition to the monthly
rent. In addition, Landlord will supply two office phone lines to be used by
Tenant for business purposes only. Unreasonable charges to these phone lines
will be charged separately to Tenant in addition to the rent. Tenant will not
have access to Landlord's computer network. Landlord will, at Tenant's request
and expense, install two analog phone lines for modem access or two DSL phone
lines (if available), one in each office, to be used by Tenant for internet
access, of which the billing of these lines will be direct to Tenant.
14. INDEMNITY AND RELATED PROVISIONS. Tenant will indemnify Landlord and
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save it harmless from and against any and all claims, actions, damages,
liability, expenses and attorneys' fees in connection with loss of life,
personal injury, and/or damage to property arising from or out of any occurrence
in, upon, or at the Leased Premises, or the occupancy or use by Tenant of the
Leased Premises, or any part thereof, or occasioned wholly or in part by any act
or omission of Tenant, its agents, contractors, employees, servants, lessees,
concessionaires, or invitees, including, without limitation, any and all claims,
actions, damages, liability, penalties, assessments, natural resource damages,
response costs (such as the cost of any testing, medical or other monitoring,
cleanup, or other required response action) expenses and consultants and
attorneys' fees resulting from or in any way connected with the presence,
release, threatened release, or disposal by Tenant, in on, or under the Leased
Premises of any hazardous substances (as defined in CERCLA), hazardous wastes
(as defined in RCRA), oils, radioactive materials, asbestos in any form or
condition, any pollutant or contaminant or hazardous, dangerous or toxic
chemicals, materials or substances within the meaning of any Applicable
Environmental Law, provided that in the event that both Landlord and Tenant are
at fault in any respect of any such claim, Tenant shall have no liability to
Landlord hereunder, except to the extent of the gross negligence or willful
misconduct of Landlord. In case Landlord shall be made a party to any
litigation commenced by or against Tenant, then Tenant shall protect and hold
Landlord harmless and shall pay all costs, expenses, and reasonable attorneys'
fees incurred or paid by Landlord in connection with such litigation. except to
the extent of the gross negligence or willful misconduct of Landlord, or Tenant
action against Landlord for any default hereunder or breach of this Lease by
Landlord.
Landlord will indemnify Tenant and save it harmless from and against any and all
claims, actions, damages, liability, expenses and attorneys' fees in connection
with loss of life, personal injury, and/or damage to property arising from or
out of any occurrence in, upon, or at the
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Landlord Premises, or the occupancy or use by Landlord of the Landlord Premises,
or any part thereof, or occasioned wholly or in part by any act or omission of
Landlord, its agents, contractors, employees, servants, lessees,
concessionaires, or invitees, including, without limitation, any and all claims,
actions, damages, liability, expenses and attorneys' fees resulting from or in
any way connected with the presence, release or disposal, in or under the
Landlord Premises of any hazardous substances (as defined in CERCLA), hazardous
wastes (as defined in RCRA), oils, radioactive materials, asbestos in any form
or condition, any pollutant or contaminant or hazardous, dangerous or toxic
chemicals, materials or substances within the meaning of any Applicable
Environmental Law; provided, that in the event that both Landlord and Tenant are
at fault in respect of any such claim, Landlord shall have no liability to
Tenant hereunder, except to the extent of the gross negligence or willful
misconduct of Tenant. In case Tenant shall be made a party to any litigation
commenced by or against Landlord , then Landlord shall protect and hold Tenant
harmless and shall pay all costs, expenses, and reasonable attorneys' fees
incurred or paid by Tenant in connection with such litigation. except to the
extent of the gross negligence or willful misconduct of Tenant, or any action by
Landlord against Tenant for any default hereunder or breach of this Lease by
Tenant.
15. INSURANCE.
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(a) Landlord shall maintain insurance against fire, vandalism and
malicious mischief and other perils as are from time to time
commonly included in the type of insurance known as "special form
coverage" (or its equivalent), insuring the building structure
for its full insurable value.
(b) During the Term, at Tenant's sole cost and expense, Tenant shall
maintain: (i) insurance against fire, vandalism and malicious
mischief and such other perils as are from time to time commonly
included in the type of insurance known as "special form
coverage" (or its equivalent) and business interruption, insuring
Tenant's fixtures, furniture, furnishings, floor coverings and
other Tenant improvements, alterations or additions in or to the
Leased Premises for 100% of the full replacement cost; (ii)
commercial general liability insurance for claims for personal
injury, death and property damage for risks occurring in or upon
or about the Leased Premises and on any sidewalks directly
adjacent to the Leased Premises with combined single limits in an
amount not less than $6,000,000; (iii) in a like amount,
contractual liability insurance covering Tenant's indemnity
obligations hereunder; (iv) commercial automobile liability
coverage; $1,000,000 combined single limit; must indicate
coverage for any auto or owned, hired or borrowed, and non-owned
vehicles; and (v) workers' compensation and employers liability
coverage of $500,000 each accident, $500,000 disease-policy
limit, $500,000 disease - each employee. All such policies shall
show Landlord as an additional insured and shall be satisfactory
to Landlord. All such policies shall contain express endorsements
that (i) such insurance may not be cancelled or amended with
respect to Landlord without ten (10) days written notice by
certified mail to Landlord by the insurance company, and (ii)
Tenant and insurer
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waive their right of subrogation against Landlord and its
affiliates. Policies should have minimum AM Best rating of A- and
a financial size of VII or higher. Satisfactory evidence of such
insurance shall be delivered to Landlord prior to Tenant's
possession of the Leased Premises, and renewal policies or
certificates shall be delivered to Landlord at least thirty (30)
days prior to the expiration of any existing policies.
(c) Tenant shall give Landlord prompt written notice of any
accidents, casualty, damage or other similar occurrence in or to
the Leased Premises of which Tenant has knowledge.
16. DAMAGE BY CASUALTY; CONDEMNATION. If the Leased Premises are damaged
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by fire, the elements or other casualty, Landlord, at its option, may either
repair all damage and restore the Leased Premises to their condition immediately
prior to the damage or terminate this Lease by notice to Tenant within sixty
(60) days of such casualty. Rent shall abate during the restoration period if
Tenant is precluded from doing business. If the Building is damaged or
destroyed to an extent of at least 25% of the then respective replacement cost
by any cause whatsoever (whether or not the Leased Premises are damaged),
Landlord shall be entitled to terminate this Lease by notice to Tenant given on
or before 60 days after the occurrence of such casualty. Tenant shall have the
right to terminate this Lease upon 60 days' written notice to Landlord in the
event of any casualty which prevents Tenant from full operation of its business
for more than 60 days, or if Landlord cannot repair the Leased Premises with in
90 days.
If the whole of the Leased Premises shall be condemned or taken either
permanently or temporarily for any public or quasi-public use or purpose under
any statute or by right of eminent domain, or by private purchase by the
government, in lieu thereof, then in that event, the term of this Lease shall
cease and terminate from the date when possession is taken thereunder pursuant
to such proceeding or purchase. The rent shall be adjusted as of the time of
such termination and any rent prepaid for a period thereafter shall be refunded.
Neither Landlord nor Tenant shall have any further liability in respect of such
termination. In the event a portion of the Leased Premises or a portion of the
Building shall be so taken (even though the Leased Premises may not have been
affected by the taking of some other portion of the Building) Landlord may elect
to terminate this Lease from the date when possession is taken thereunder
pursuant to such proceeding or purchase, or Landlord may elect to repair and
restore, at its own expense, the portion not taken and thereafter the rent shall
be reduced proportionately to the portion of the Leased Premises taken. If the
portion of the Leased Premises so taken substantially impairs the usefulness of
the Leased Premises for the use as provided in Section 6 of this Lease or
exceeds fifty percent (50%) of the square foot area of the Leased Premises,
either party may terminate this Lease on the date when Tenant is required to
yield possession. Tenant shall not be entitled to any portion of the award for
the fee or leasehold or any element thereof, and the entire award shall belong
to Landlord, provided, however, Tenant may apply for reimbursement from the
condemning authority for moving expenses, loss of good will, movable trade
fixtures, and equipment provided payment of any such reimbursement or award to
Tenant shall not reduce the amount of any condemnation award that would
otherwise be payable to Landlord.
17. INSURANCE HAZARDS. Except for the use as provided in Section 6 of
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this Lease, Tenant shall permit no use of the Leased Premises which might render
void, or cause the
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cancellation or rate increase of any insurance carried by Landlord or which
would increase the risk of fire or other catastrophe, or which may be a health
or safety hazard
18. DEFAULT BY TENANT. The occurrence of any one or more of the following
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events shall constitute a default and breach of this Lease by Tenant:
(a) failure to pay rent when due;
(b) failure to maintain insurance as required hereunder with Landlord
listed as a named insured;
(c) failure to comply with confidentiality, non-disparagement and
non-solicitation obligations hereof;
(d) the appointment of a receiver to take possession of all or
substantially all of the assets of Tenant, a general assignment
by Tenant for the benefit of creditors, or any action taken or
suffered by Tenant under insolvency or bankruptcy laws; or
(e) failure to comply with any other provision of this Lease.
If any such default is not cured within 30 days after written notice
thereof from Landlord to Tenant, Landlord may terminate this Lease and Tenant
shall immediately surrender possession of the Leased Premises to Landlord.
Notwithstanding the foregoing, if the default is related to a breach by Tenant
of its obligations under Sections 11(b) or 27 hereof, Landlord may terminate
this Lease immediately and Tenant shall have no opportunity to cure the default.
In addition, notwithstanding the foregoing, no notice shall be required, no cure
period shall be afforded and this Lease shall automatically and immediately
terminate upon the occurrence of the events described in Section 18(d) above.
If Landlord terminates this Lease because of a default by Tenant, Tenant
shall immediately pay Landlord all rent then due.
19. DEFAULT BY LANDLORD. The occurrence of any one or more of the
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following events shall constitute a default and breach of this Lease by
Landlord:
(a) failure to comply with confidentiality, non-disparagement and
non-solicitation provisions hereof;
(b) the appointment of a receiver to take possession of all or
substantially all of the assets of Landlord, a general assignment
by Landlord for the benefit of creditors, or any action taken or
suffered by Landlord under insolvency or bankruptcy laws; or
(c) failure to comply with any other provision of this Lease.
If any such default is not cured within 30 days after written notice
thereof from Tenant to Landlord, Tenant may terminate this Lease.
Notwithstanding the foregoing, if the default is
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related to a breach by Landlord of its obligations under Section 27 hereof,
Tenant may terminate this Lease immediately and Landlord shall have no
opportunity to cure the default.
20. CONFIDENTIALITY, NON-DISPARAGEMENT AND NON-SOLICITATION. Each of
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Landlord and Tenant shall keep confidential any information of whatever nature
it learns about the other party and the business and products of the other party
("Confidential Information") by virtue of being in the Building. Confidential
Information shall not include information that is in the public domain at the
time of its use or disclosure through no fault of the party receiving the
information ("Receiving Party"). If the Receiving Party is requested or
required to disclose any Confidential Information of the other party pursuant to
a subpoena, court order, statute, rule, regulation or similar requirement
("Legal Requirement"), the Receiving Party shall provide prompt notice thereof
to the other party so that the other party may seek an appropriate protective
order or other remedy or waive compliance with the provisions of this Agreement.
If the Receiving Party is legally compelled to disclose such Confidential
Information, or if the other party waives compliance with this provision of the
Lease in writing, the Receiving Party may disclose such Confidential Information
in accordance with, but solely to the extent necessary to comply with the Legal
Requirement.
Landlord and Tenant shall not, and shall not permit their employees to,
make any negative or disparaging statements about the other party or the
business or products of the other party to any third party.
During the term, Tenant shall not solicit for employment or hire any
employee of Landlord or any person employed by Landlord within the previous 90
days.
During the term, Landlord shall not solicit for employment or hire any
person then designated by Tenant pursuant to Section 8 of this Lease as a Tenant
employee entitled to access to the Leased Premises or any person designated as
such within the previous 90 days.
Tenant shall acknowledge that Landlord has on Landlord's premises United
States government owned equipment and is conducting US government research on
behalf of a government contracting company. Tenant is strictly prohibited from
access to this equipment, the wafers it produces, any and all data associated
with the contract, including, but not limited to, characterization data as a
result of the contract. Tenant agrees, under penalty of Lease default, that it
will not attempt to obtain any information, not matter how trivial, about this
equipment, wafers, or the contract in general. Tenant also agrees not to
solicit verbal information about this contract, in any form, from Landlord's
employees.
21. WAFER CHARACTERIZATION. During the term of this Lease, Tenant has
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shared access and a reasonable right of use to all Veeco-owned wafer
characterization equipment. Tenant will be held accountable for repairs to any
equipment that is damaged by improper use or abuse by Tenant or its agents or
employees. Tenant agrees to receive training on this equipment prior to use and
determined adequate, in writing, by Landlord. Tenant and Landlord agree to work
together in determining who has priority in the use of the characterization
equipment, with the final determination being made by Landlord.
22. HOLDOVER. Any holdover after the expiration of the term, with or
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without the consent of Landlord, shall be construed to be a tenancy from month
to month and shall otherwise
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be on the terms and conditions herein specified so far as applicable except that
the monthly rent shall be increased to 150% of the monthly rent in effect
immediately prior to the holdover.
23. ESTOPPEL STATEMENTS AND LANDLORD'S SUBORDINATION. Tenant agrees to
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complete and return to Landlord any reasonable written statements which Tenant
may truthfully make concerning the Leased Premises or this Lease as Landlord may
request. Such statements are limited to declarations: (a) ratifying this Lease;
(b) expressing the commencement and termination dates hereof; (c) certifying
that this Lease is in full force and effect and has not been assigned, modified,
supplemented or amended (except by such writings as shall be stated); (d) that
all conditions under this Lease to be performed by Landlord have been satisfied,
or stating those unsatisfied conditions claimed by Tenant; and (e) that there
are no defenses or offsets against the enforcement of this Lease by Landlord, or
stating those claimed by Tenant.
24. ASSIGNMENT AND SUBLETTING. Tenant shall not assign this Lease or
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sublet the Leased Premises without Landlord's prior written consent, which
consent may be withheld by Landlord in its sole discretion. Landlord's consent
to any assignment or subletting shall not constitute a waiver of the necessity
for such consent to any subsequent assignment or subletting. This prohibition
against assignment or subletting shall be construed to include a prohibition
against any assignment or subletting by operation of law. Notwithstanding any
consent given by Landlord, Tenant shall remain liable for all of its obligations
herein unless released in writing by Landlord.
Landlord may assign this Lease on written notice to Tenant.
25. WAIVER. Failure of Landlord or Tenant to insist upon the strict
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performance of any provision or to exercise any option hereunder shall not be
construed as a waiver of the future performance of any such provision or option.
No provision of this Lease shall be deemed to have been waived unless such
waiver is in writing and signed by the waiving party. No payment by Tenant or
receipt by Landlord of an amount less than the full amount of rent due shall be
deemed to be other than on account of the earliest rent then unpaid, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment of rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy provided in this Lease. Neither
acceptance of the keys nor any other act or thing done by Landlord or any agent
or employee of Landlord during the Term herein demised shall be deemed to be an
acceptance of a surrender of the Leased Premises, excepting only an agreement in
writing signed by Landlord, accepting or agreeing to accept such a surrender.
26. ACCESS TO PREMISES. Upon 24 hours' prior written notice, Landlord
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shall have the right to enter the Leased Premises during reasonable business
hours to make repairs, alterations or improvements (to the Leased Premises or
otherwise as Landlord may deem necessary or desirable, or to inspect, or to
exhibit the Leased Premises to prospective purchasers or mortgagees of Building.
In the event of an emergency, Landlord may enter the Leased Premises at any time
without prior notice to Tenant.
27. COMPLIANCE WITH LAW; ENVIRONMENTAL MATTERS. Tenant will obtain all
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necessary permits and approvals for the conduct of its business within the
Leased Premises and will comply with all Applicable Environmental Laws and all
lawful requirements
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of any governmental body, agency or department regarding the use, condition or
operation of the Leased Premises.
To the extent that the Leased Premises will house petroleum or any
petroleum products, asbestos, urea formaldehyde, foam insulation or any other
chemical, material or substance, exposure to which may or could pose a health
hazard, the possession and use of such materials will be in accordance with law,
including any applicable regulations. Tenant will not store or use within the
Leased Premises any hazardous material not listed on Exhibit B and will not use
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or store within the Leased Premises any of such materials in quantities greater
than those specified on Exhibit B. In addition, Tenant shall not generate any
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waste products other than such waste products set forth on Exhibit C.
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To the extent that the use which Tenant makes or intends to make of the
Leased Premises will result in the manufacturing, treatment, refining,
transportation, generation, storage, disposal or other release or presence of
any hazardous substance or solid waste on the Leased Premises, such use will be
in accordance with law, including any applicable regulations. For purposes of
this paragraph, the terms "hazardous substance" and "release" will have the
meanings specified in CERCLA, and the term "disposal" (or "disposed") will have
the meaning specified in RCRA; provided, in the event either CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning will apply subsequent to the effective date of such amendment, and
provided, further, to the extent that the laws of the State of Minnesota
establish a meaning for "hazardous substance," "release," or "disposal" which is
broader than that specified in either CERCLA or RCRA, such broader meaning will
apply; provided, further, that the term "hazardous substance" will also include
those listed in the U.S. Department of Transportation Table (49 C.F.R. 172.101)
and amendments thereto from time to time.
Tenant shall promptly notify Landlord of any violation or alleged violation
of any Applicable Environmental Laws of which Tenant becomes aware.
Tenant shall appoint one of its employees to be responsible for
environmental, health and safety ("EH&S") matters on the Leased Premises.
Tenant shall retain liability for any damages or injuries caused by Tenant.
Except as provided in Section 5(d) above, Tenant shall be responsible for
maintaining compliance with Applicable Environmental Law respecting the Leased
Premises and Tenant's activities therein and shall bear all associated costs to
the extent they relate to Tenant's activities on the Leased Premises. Tenant
shall pay its proportionate share of the cost of any environmental audits or
reports required by any governmental authority to the extent they relate to
Tenant's activities on the Leased Premises. In the event of an emergency
situation, Landlord may have immediate access to the Leased Premises. Tenant
shall be responsible for ensuring toxic material containment, and toward this
end, shall develop a program for equipment maintenance that eliminates any risk
of disruption of Landlord's operations.
Landlord shall be responsible for maintaining compliance with all
governmental regulations with respect to the Landlord Premises to the extent
necessary to permit Tenant to carry on its activities on the Leased Premises,
and shall consider Tenant's operations in its EH&S planning.
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28. PERSONAL PROPERTY TAXES. Tenant shall be responsible for any taxes
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levied or assessed against personal property, fixtures or furniture placed by
Tenant on the Leased Premises.
29. COMPLIANCE WITH APPLICABLE LAWS. Tenant agrees to comply with all
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applicable laws concerning its operations at the Leased Premises, including,
without limitation, requirements under ITAR and under U.S. export control laws
relating to the technology present at the Leased Premised and in Landlord's
portion of the Building. If Tenant determines that an export license is
required for its personnel working at the Leased Premises or otherwise in
connection with its activities at the Leased Premises, Tenant shall first obtain
the written consent of Landlord prior to applying for any such license or other
authority, which consent shall not be unreasonably withheld or delayed.
30 MISCELLANEOUS PROVISIONS.
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(a) Whenever the singular number is used in this Lease and when
required by the context, the same shall include the plural, and
the masculine gender shall include the feminine and neuter
genders, and the word "person" shall include corporation, firm,
partnership, association, or any other similar entity. If Tenant
constitutes more than one person, the obligations imposed under
this Lease upon Tenant shall be joint and several.
(b) The marginal headings or titles to the paragraphs of this Lease
are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part of this Lease.
(c) This instrument contains all of the agreements and conditions
made between the parties to this Lease and may not be modified
orally or in any other manner other than by an agreement in
writing signed by all the parties to this Lease or their
respective successors in interest.
(d) Time is of the essence of each term and provision of this Lease.
(e) Tenant warrants that it has not had any dealings with any
realtor, broker, or agent in connection with the negotiation of
this Lease and agrees to pay and to hold Landlord harmless from
any cost, expense, or liability for any compensation, commission,
or charges claimed by any realtor, broker, or agent with respect
to this Lease or the negotiation of this Lease.
(f) All rights and obligations under this Lease shall bind and inure
to the benefit of the successors and permitted assigns of the
parties hereto.
(g) If Landlord incurs legal fees to enforce any provision of this
Lease, Tenant shall pay such fees and any costs associated
therewith.
(h) Tenant shall, in the event any proceedings are brought for the
foreclosure of, or exercise of the power of sale under, any
mortgage or deed of trust made by Landlord covering the Leased
Premises, attorn to the purchaser
11
upon any such foreclosure or sale and recognize such purchaser as
the Landlord under this Lease so long as Landlord is not in
default under the Lease.
(i) Tenant agrees that this Lease shall, at the request of Landlord,
be subordinate to any first mortgage or deed of trust that may
hereafter be placed upon the Leased Premises and to any and all
advances to be made thereunder, and to the interest thereon, and
all renewals, replacements and extensions thereof, provided the
mortgagee or trustee named in such mortgage or deed of trust
shall agree to recognize the Lease of Tenant in the event of
foreclosure if Tenant is not in default. Tenant also agrees that
any mortgagee or trustee may elect to have this Lease a prior
lien to its mortgage or deed of trust, and in the event of such
election and upon notification by such mortgagee or trustee to
Tenant to that effect, this Lease shall be deemed prior in lien
to the said mortgage, or deed of trust, whether this Lease is
dated prior to or subsequent to the date of said mortgage or deed
of trust. Tenant agrees that, upon the request of Landlord, any
mortgagee or any trustee, it shall execute whatever instruments
may be required to carry out the intent of this paragraph.
(j) All notices must be sent in writing to Landlord at:
Veeco Compound Semiconductor Inc.
4900 Constellation Dr.
St. Paul, MN 55127
Attn: General Manager
with a copy to:
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Veeco Instruments Inc.
100 Sunnyside Blvd, Suite B
Woodbury, NY 11797
Attn: General Counsel
and to Tenant at:
APA Optics, Inc.
2950 NE 84th Avenue
Blaine, MN 55449
Attn: Dan Herzog, Controller
(n) This Lease shall be governed by, and construed in accordance with
the laws of the State of Minnesota.
(o) Tenant agrees that it shall pay on demand all expenses incurred
by Landlord in enforcing its rights hereunder, including, but not
limited to, collection costs and Landlord's reasonable attorneys'
fees. In addition, when Tenant requests Landlord to take any
action not specifically required
12
of it hereunder, Tenant shall reimburse Landlord for its
reasonable expenses therefor.
(p) LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT
THE LEASED PREMISES ARE SUITABLE FOR TENANTS INTENDED COMMERCIAL
PURPOSE, AND TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT
DEPENDENT ON THE CONDITION OF THE LEASED PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT
AS OTHERWISE PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE
RENT THROUGHOUT THE TERM, WITHOUT ABATEMENT, SETOFF, OR
DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED. LANDLORD AND
TENANT EXPRESSLY AGREE AND ACKNOWLEDGE THAT THE DISCLAIMER
PROVIDED IN THIS SECTION 30 DOES NOT APPLY TO ANY WARRANTY OF ANY
TYPE RESPECTING THE SEPARATE AGREEMENT FOR THE PURCHASE OF THE
TENANT MACHINE NOR TO WHETHER THE LEASEHOLD IMPROVEMENTS TO BE
INSTALLED BY LANDLORD ARE ADEQUATE FOR THE TENANT MACHINE TO
OPERATE IN THE MANNER PROVIDED FOR IN SAID PURCHASE AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands the
day and year first written above.
LANDLORD: TENANT:
Veeco Compound Semiconductor Inc. APA Optics, Inc.
By __________________________________ By _____________________________________
Its ______________________________ Its _________________________________
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EXHIBIT A
SITE PLAN SHOWING THE BUILDING, THE LEASED PREMISES AND THE COMMON AREAS
EXHIBIT A, CONT.
SITE PLAN SHOWING THE BUILDING, THE LEASED PREMISES AND THE COMMON AREAS
EXHIBIT B
LIST OF HAZARDOUS MATERIALS TO BE USED BY TENANT IN THE LEASED PREMISES
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1) SOURCE MATERIALS 2) CLEANING MATERIAL
a) TMG a) HNO3
b) TEG b) H2SO4
c) TMA c) HF
d) TEA d) H2O2
e) TMI e) NH4OH
f) SiH4 ( 10 ppm in H2 or N2) f) IPA
g) Si2H6 ( 10 ppm H2 or N2) g) Acetone
h) CP2Mg h) Methanol
i) NH3 i) Ethylene Glycol (coolant for bubblers)
j) HCl (gas: 5-15% in H2)
k) Fe(C5H5)2 (ferrocene)
l) (CH3)2NNH2 (Dimethylhydrazine)
m) (C6H5)NHNH2 (Phenylhydrazine)
n) CH3-(CH2)2-NH2/C3H9N (n-
propylamine)
- ----------------------------------------------------------------------------------------
EXHIBIT C
LIST OF ALL WASTE MATERIALS TO BE GENERATED BY TENANT ON THE LEASED PREMISES
GaN
AlN
AlGaN
InGaN
HNO3 (nitric acid)
H2SO4 (sulfuric acid)
HF (hydrofluoric acid)
H2O2 (hydrogen peroxide)
NH4OH (ammonium hydroxide)
IPA (isopropyl alcohol)
Acetone
Methanol
Ethylene Glycol (coolant for bubblers)
Ammonia
Nitrogen
Hydrogen
SUBSTRATE MATERIALS
Si
Al2O3
SiC
ZnO
GaN
AlN