LEASE

 

 

 

BY AND BETWEEN

 

 

BRUNACINI DEVELOPMENT, LTD. CO.,

a New Mexico limited liability company

("Landlord")

 

 

 

 

AND

 

SBS TECHNOLOGIES, INC., a New Mexico corporation

("Tenant")

 

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TABLE OF CONTENTS

Page

1. DEMISED PREMISES; CONTRACTION; EXPANSION 1

2. USE 3

3. TERM; EARLY TERMINATION; OPTION TO EXTEND 4

4. BASE RENT;REIMBURSABLE EXPENSES; HVAC; EXCLUSIONS FROM OPERATING EXPENSES;
SECURITY DEPOSIT 6

5. LATE PAYMENT PENALTY; DEFAULT INTEREST 12

6. LANDLORD AND TENANT IMPROVEMENTS 12

7. INDUSTRIAL REVENUE BONDS 17

8. REQUIREMENTS OF LAW 17

9. REPAIRS; TOUCH UP ALLOWANCE 18

10. UTILITIES; JANITORIAL; TAXES 19

11. ALTERATIONS BY TENANT; ROOF; GENERATOR 21

12. LANDLORD'S RIGHT OF ACCESS 22

13. FIRE INSURANCE; DESTRUCTION BY FIRE OR OTHER CAUSES 22

14. LIABILITY INSURANCE 24

15. EMINENT DOMAIN 24

16. SUBORDINATION; ESTOPPEL 25

17. NON-WAIVER OF LANDLORD'S OR TENANT'S RIGHTS 26

18. QUIET ENJOYMENT 26

19. SURRENDER 26

20. NOTICES 26

21. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT 27

22. ASSIGNMENT; SUBLETTING 27

23. HOLDOVER 28

24. REMEDIES OF LANDLORD FOR DEFAULT 28

25. ATTORNEY'S FEES 30

26. SEVERABILITY 30

27. CHOICE OF LAW 30

28. FORCE MAJEURE 30

29. LEVY 30

30. HAZARDOUS MATERIALS 30

31. RIGHT OF FIRST REFUSAL 32

32. WAIVER OF LANDLORD'S LIEN 32

33. INDEMNIFICATION 32

34. COMMISSIONS 33

35. FINANCIAL STATEMENTS 33

36. AMERICANS WITH DISABILITIES ACT 34

37. POWER LINES

38. OTHER TENANTS

39. COUNTERPARTS

EXHIBIT "A" 37

EXHIBIT "B" 38

EXHIBIT "C" 39

EXHIBIT "D" 41

EXHIBIT "E" 42

EXHIBIT "F" 43

EXHIBIT "G" 44

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LEASE

AGREEMENT of Lease dated for reference purposes the 12th day of July, 2004, by
and between BRUNACINI DEVELOPMENT, LTD. CO., a New Mexico limited liability
company (called "Landlord") and SBS TECHNOLOGIES, INC., a New Mexico corporation
(called "Tenant"),

WITNESSETH:

1. DEMISED PREMISES; CONTRACTION; EXPANSION

(a) DEMISED PREMISES. Landlord, for and in consideration of the covenants and
conditions hereinafter contained on the part of the Tenant to be performed, and
in consideration of the rent hereinafter reserved, does hereby grant, lease,
demise and let unto Tenant and Tenant does hereby agree to pay said rent, lease
and take from Landlord the Property (as hereinafter defined) described as:

A "Building" containing 47,529 square foot (more or less) at 7401 Snaproll,
N.E., Albuquerque, New Mexico 87109 immediately west of the intersection of
Snaproll N.E. and Rutledge N.E., together with all of the fixtures, apparatus,
equipment and improvements to be provided by Landlord and to be located therein
or thereon (collectively, together with the Building, "Improvements") and all
rights and easements appurtenant thereto, all of which are hereinafter called
the "Demised Premises". The Improvements are depicted on Exhibit "A" attached
hereto and incorporated herein by reference and are located on the real estate
described as follows:

SEE EXHIBIT "B" ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE. ("Land").

The Demised Premises and the Land are sometimes collectively referred to herein
as the "Property".

The square footage of the Building shall be calculated based upon the Building
Owners and Managers Association ("BOMA") International Guidelines for measuring
single tenant buildings ("Tenant's Rentable Area"). Tenant shall pay "Base Rent"
as hereinafter defined based upon Tenant's Rentable Area. Prior to the
"Commencement Date" (as hereinafter defined), the Landlord's architect shall
verify the Tenant's Rentable Area of the Building. If the Tenant's Rentable Area
is not 47,529 square feet, Landlord and Tenant shall acknowledge any such change
on Exhibit "C" which is attached hereto and incorporated herein by reference and
the Base Rent and "Reimbursable Expenses" (as hereinafter defined) payable by
Tenant shall be adjusted accordingly. In the event Tenant may disagree with
Landlord's architect on the calculation of Tenant's Rentable Area, Tenant may,
at Tenant's expense and prior to July 1, 2005, cause an architect to calculate
Tenant's Rentable Area, and if different than the calculation by Landlord's
architect, to work with Landlord's architect to resolve any discrepancies.

Landlord shall construct on the Land, at Landlord's sole cost and expense: (i) a
shell Building, parking, landscaping and those Improvements itemized and
depicted on Exhibit "D" attached hereto and incorporated herein ERR hereinafter
defined. The Landlord Improvements and Tenant Improvements comprise the initial
Improvements contemplated by this Lease.

Tenant acknowledges that the Property is within Journal Center 2, Unit 2 and
subject to covenants and assessments related thereto (respectively "Journal
Center Covenants" and "Journal Center Assessments").

(b) CONTRACTION. Provided Tenant is not in default under the terms of this
Lease, after all applicable cure periods, at the time it gives notice of the
proposed contraction date, and at the contraction date, and provided Tenant is
not in default beyond the applicable cure period on more than one occasion
between the notice and contraction date, and Tenant has not, within five (5)
years of the effective date of such contraction, expanded the Demised Premises
under Paragraph 1(c), Tenant shall have the right to contract Tenant's Rentable
Area by 10,000 square feet, which is denominated on Exhibit "E" as "Contraction
Area". The right to contract shall only be effective after the sixtieth (60th)
month following the "Rent Commencement Date" (as hereinafter defined). Tenant
shall provide Landlord not less than nine (9) months prior written notice of the
proposed contraction date, which date shall only be effective on the last day of
a calendar month. Coincident with providing Landlord notice of Tenant's intent
to contract the Demised Premises, Tenant shall pay to Landlord a "Contraction
Penalty" equal to the cost of construction of demising the premises plus all
unamortized lease up costs, allocated to the Contraction Area at a rate of seven
percent (7%) per annum, which shall include, but not be limited to, the "Tenant
Allowance", "Extra Tenant Allowance", "Touch up Allowance", if applicable and as
hereinafter defined, real estate commissions and any Expansion Allowance
expended by Landlord under Paragraph 1(c) (collectively "Lease Up Costs"). The
amortization period for the Lease Up Costs shall be ten (10) years from the Rent
Commencement Date ("Unamortized Lease Up Costs") and the calculation of the
allocated portion shall be based upon the ratio of the Tenant's Rentable Area in
the Contraction Area to the Tenant's Rentable Area in the Building. Landlord
shall have the right to lease the Contraction Area to a tenant and for a use not
inconsistent with Tenant's use. Landlord and Tenant shall amend this Lease to
reflect the contraction of the Demised Premises and the pro rata reduction in
Base Rent based on the square footage of the Contraction Area, and to permit
joint use of reasonable "common areas" necessary for the new tenant. At Tenant's
request, Landlord shall cooperate with Tenant to relocate the loading dock from
the Contraction Area to the remainder of the Demised Premises. Landlord will
construct such relocated loading dock at Tenant's request and expense; however,
Tenant shall have the right to obtain competitive bids for any such work to be
paid by Tenant or similar work relating to contraction provided that Landlord
approves the chosen contractor and the work, which approval shall not be
unreasonably withheld, conditioned or delayed. If Landlord does not agree to
match the competitive bid, Tenant may employ said contractor. The Property shall
remain as a single-tenant facility unless Tenant has exercised its right to
contract under this Paragraph 1(b).

(c) EXPANSION. Provided that Tenant is not in default under the terms of this
Lease after all applicable cure periods, at the time it gives notice of the
proposed expansion date and at the expansion date, and provided Tenant is not in
default beyond the applicable cure period on more than one occasion between the
notice and expansion date, Tenant shall have the option to expand the Demised
Premises into an additional 10,000 square feet of Tenant's Rentable Area
effective not later than the last day of the sixtieth (60th) month after the
Rent Commencement Date ("Expansion Addition"). The Expansion Addition shall be
located adjacent to the eastern portion of the Building which is denominated on
Exhibit "F" as "Expansion Area". Tenant shall provide Landlord not less than
nine (9) months prior written notice of its exercise of the right to expand and
coincidentally therewith, its waiver of its right to contract within five years
of the expansion pursuant to Paragraph 1(b) above. Landlord shall not construct
the Expansion Addition unless requested by Tenant pursuant to this Paragraph
1(c). Landlord shall provide Tenant $3.50 per square foot of new Tenant's
Rentable Area in the Expansion Addition per Lease Year remaining in the Initial
Term (prorated from the date Base Rent accrues on the Expansion Addition through
the end of the Initial Term) as an allowance ("Expansion Allowance") for tenant
improvements to the Expansion Addition ("Expansion Tenant Improvements"). The
construction of the Expansion Addition shall be of comparable kind and quality
to the original Building shell prior to inclusion of the Expansion Tenant
Improvements. Landlord and Tenant shall approve the plans for the Expansion
Addition and Expansion Tenant Improvements. To the extent the cost of the
Expansion Tenant Improvements exceed the Expansion Allowance, the costs thereof
shall be repaid as negotiated by Landlord and Tenant. Rent for the Expansion
Addition shall be at the same Base Rent as for the Building and the term shall
coincide with the "Initial Term" as hereinafter defined and all other terms of
this Lease shall apply to the Expansion Addition, including the option for
Extended Terms. The parties shall execute an amendment to this Lease reflecting
the addition of the Expansion Addition.

2. USE

Tenant shall use the Demised Premises for the purpose of normal and customary
office, light manufacturing, electronic assembly and testing, warehousing, such
other purposes allowed by the Journal Center Covenants, and for such other
lawful and permitted purposes as may be incidental thereto, and for no other
purposes without Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Landlord warrants and represents
to Tenant that to the best of Landlord's actual knowledge, the permitted use is
not prohibited by any business park restrictions and/or covenants.
Notwithstanding anything contained to the contrary in this Lease, the Tenant
shall have access to the Demised Premises twenty-four (24) hours per day and
seven (7) days per week.

  3. TERM; DELAYS IN POSSESSION READY DATE; EARLY TERMINATION; OPTION TO EXTEND

(a) Term. This Lease shall be effective from the date first above set forth
("Effective Date Hereof"). The initial term of this Lease ("Initial Term") shall
commence upon "Substantial Completion" (as hereinafter defined) of the initial
Landlord Improvements and Tenant Improvements in accordance with this Lease
("Possession Ready Premises") and delivery of the Demised Premises to Tenant
("Premises Ready Date"), which date is hereinafter called the "Commencement
Date" of this Lease. The Commencement Date shall not be earlier than May 1,
2005. The Initial Term shall extend and continue for a period of ten (10) years
and two (2) months from the Commencement Date and shall terminate on or about
June 30, 2015 ("Initial Expiration Date"). To the extent the Commencement Date
does not occur on or before August 31, 2005, through no fault of Tenant, Tenant
shall have the right to terminate this Lease upon prior written notice delivered
to Landlord prior to Landlord delivering the Possession Ready Premises to
Tenant. Within thirty (30) days after the Commencement Date, Landlord and Tenant
shall execute the document attached hereto as Exhibit "C" evidencing the actual
Commencement Date and Initial Termination Date. In the event the Commencement
Date is not the first day of a month, the Initial Term shall extend to the last
day of the month in which the Initial Expiration Date occurs.

"Lease Year" shall mean the period from the Rent Commencement Date to the day
before the anniversary of the Rent Commencement Date and every subsequent annual
period thereafter. If the Rent Commencement Date is not the first day of the
month, the first Lease Year shall commence on the first day of the month
following the Rent Commencement Date and end on the last day of the twelfth
month thereafter. All subsequent Lease Years shall commence and end on the
anniversaries of said dates.

(b) DELAYS IN PREMISES READY DATE. Landlord shall deliver the Premises on or
before May 1, 2005, provided that Landlord and Tenant agree that this Lease will
be fully executed by July 15, 2004. Landlord shall also have a tenant
improvement space plan agreed upon by August 1, 2004. Any delay on execution of
the tenant improvement space plan, or lease shall postpone the penalties
outlined below on a day-for-day basis. To the extent that the Premises Ready
Date does not occur on or before May 1, 2005, for reasons other than delays
caused by Tenant, the following shall occur:

For each day that the Premises Ready Date falls after May 1, 2005 and on or
before May 17, 2005, the Commencement Date shall be delayed on a day-for-day
basis.

For each day that the Premises Ready Date falls after May 17, 2005 and on or
before May 24, 2005, the Commencement Date shall be delayed on a day-for-day
basis, plus Tenant shall receive a rent credit of $500.00/day.

For each day that the Premises Ready Date falls after May 24, 2005, and on or
before May 31, 2005, the Commencement Date shall be delayed on a day-for-day
basis, plus Tenant shall receive a rent credit of $750.00/day.

For each day that the Premises Ready Date falls after May 31, 2005, and on or
before June 30, 2005, the Commencement Date shall be delayed on a day-for-day
basis, plus Tenant shall receive a rent credit of $1,000.00/day.

For each day that the Premises Ready Date falls after June 30, 2005, the
Commencement Date shall be delayed on a day-for-day basis, plus Landlord will
pay any of Tenant's actual holdover rent paid at its current location at 2400
Louisiana Blvd. NE, Building 5, not to exceed $47,658.00 per month, through
reasonable completion of Tenant's move to the Demised Premises.

None of the penalties outlined above shall arise from Landlord's failure to
complete the installation of any Landlord Financed Furniture (as defined herein)
or from Tenant's failure to provide equipment, materials or other improvements
for which it is responsible, to the Property, or from its failure to timely
secure the IRB(s) described in Paragraph 7 herein. In the event Tenant fails to
timely provide equipment, materials or improvements which are its
responsibility, or fails to secure the IRB(s) provided for in Paragraph 7 such
that Landlord may commence construction no later than September 30, 2004, the
May 1, 2005 deadline shall be extended on a day-for-day basis for each day
Landlord is delayed by Tenant's failure to provide those items.

(c) EARLY TERMINATION. Provided Tenant is not then in default under the terms of
this Lease beyond any applicable grace or cure period, Tenant shall have the
right to terminate this Lease at the expiration of the seventh (7th) Lease Year
from Rent Commencement Date by providing not less than nine (9) months prior
written notice to Landlord. Coincident with tendering the notice to Landlord,
Tenant shall pay an "Early Termination Penalty" as follows:

(i) The amount of the Unamortized Lease Up Costs at a rate of seven percent (7%)
annually, which shall include, but is not limited to Tenant Allowance, Extra
Tenant Improvement Allowance, Touch Up Allowance, Expansion Allowance and real
estate commissions applicable on the effective date of the early termination;
and

(ii) An amount equal to the Base Rent for the last two (2) months of the seventh
(7th) Lease Year, unless an early termination occurs subsequent to the seventh
(7th) Lease Year pursuant to the immediately following paragraph, in which case
the amount will be twice the Base Rent for the current month at the time of
termination.

Should Tenant exercise the option to expand the Demised Premises pursuant to
Paragraph 1(c) above, the right to early termination shall not be effective
until the later to occur of the expiration of the seventh (7th) Lease Year or
the sixtieth (60th) month following the date Base Rent is first due and owing
for the Expansion Addition.

(d) OPTION TO EXTEND. Provided Tenant is not in default under the terms of this
Lease after all applicable grace and cure periods, at the time it gives notice
of its intent to exercise its option and at the time the new extended Term
begins, and provided Tenant is not in default beyond the applicable cure period
on more than one occasion between the notice and the time the new extended Term
begins, Tenant shall have the right to extend the Initial Term for three (3)
additional five (5) year periods ("Extended Term(s)"). "Term", as used herein,
shall also include the Initial Term and Extended Term(s), if exercised. Tenant
shall provide Landlord not less than ten (10) months written notice prior to the
first day of said Extended Term of its intent to exercise each option for an
Extended Term. Rent for each Extended Term shall be calculated at ninety-five
percent (95%) of fair market rent for comparable space, including applicable
tenant improvement allowances, rent escalations, rent concessions or rent
abatements, then being offered in similar type buildings in the Albuquerque
market, but such fair market rent for comparable space shall exclude real
property taxes as long as the IRB is in place. In the event Landlord and Tenant
cannot agree upon rent for an Extended Term, within three (3) months after
Tenant exercises the option therefor, each party shall select one (1)
experienced commercial agent/broker familiar with comparable properties in the
Albuquerque area ("Commercial Broker"). Each party shall provide written notice
to the other party within thirty (30) days after the impasse of said party's
designated Commercial Broker and the two (2) Commercial Brokers shall select a
third Commercial Broker (the "Third Commercial Broker") within fifteen (15) days
after selection of the other two (2) Commercial Brokers. The three (3)
Commercial Brokers shall, within forty-five (45) days of appointment of the
Third Commercial Broker, determine Base Rent and other concessions, allowances,
etc. for the Extended Term, and the decision of the Commercial Brokers shall be
final. Each party shall pay the costs for the Commercial Broker it appointed and
the parties shall split the costs for the third Commercial Broker. If the three
Commercial Brokers cannot come to a unanimous decision, the decision of the
Third Commercial Broker shall be binding. In the event that such determination
is unacceptable to Tenant, Tenant may within ten (10) business days of receipt
of the determination by the Commercial Brokers provide notice to terminate the
option to extend the lease; provided however, nothing in this Lease shall
entitle Tenant to terminate the option to extend the Lease less than one hundred
twenty (120) days prior to the first day of the Extended Term. Should Tenant
fail to terminate the option to extend at least one hundred twenty (120) days
prior to the first day of the Extended Term, the terms of the Extended Period
shall be those determined by the Commercial Brokers. In the event Tenant timely
terminates the option to extend the Lease, Tenant shall be responsible for the
costs of all three Commercial Brokers.

4. BASE RENT; REIMBURSABLE EXPENSES; HVAC; EXCLUSIONS FROM OPERATING EXPENSES;
SECURITY DEPOSIT

(a) BASE RENT. "Base Rent" shall accrue commencing two (2) months after the
Commencement Date ("Rent Commencement Date") and shall be payable by Tenant in
lawful money of the United States of America, in advance on or before the first
day of each calendar month, as follows (month numbers are calculated from Rent
Commencement Date):

Months 1 through 12 - $13.60 per square foot, annually $646,394.40 and monthly
$53,866.20;

Months 13 through 24 - $13.85 per square foot, annually $658,276.68 and monthly
$54,856.39;

Months 25 through 36 - $14.11 per square foot, annually $670, 634.16 and monthly
$55,886.18;

Months 37 through 48 - $14.37 per square foot, annually $682,991.76 and monthly
$56,915.98;

Months 49 through 60 - $14.63 per square foot, annually $695,349.24 and monthly
$57,945.77;

Months 61 through 72 - $14.90 per square foot, annually $708,182.16 and monthly
$59,015.18;

Months 73 through 84 - $15.18 per square foot, annually $721,490.28 and monthly
$60,124.19;

Months 85 through 96 - $15.46 per square foot, annually $734,798.40 and monthly
$61,233.20;

Months 97 through 108 - $15.75 per square foot, annually $748,581.72 and monthly
$62,381.81;

Months 109 through 120 - $16.04 per square foot, annually $762,365.16 and
monthly $63,530.43.

No rent shall be payable by Tenant during the period commencing on the
Commencement Date and expiring on the day immediately preceding the Rent
Commencement Date. In the event the Commencement Date is not the first day of a
month, the Initial Term shall end, unless sooner terminated, pursuant to the
terms of this Lease, on the last day of the one hundred twenty- second (122nd)
entire calendar month after the Commencement Date. Further, Base Rent and
Reimbursable Expenses shall be prorated for the initial partial month in which
the Rent Commencement Date falls on the basis of the Base Rent of $13.60 per
square foot calculated on a per diem basis.

(b) REIMBURSABLE EXPENSES. Tenant agrees to pay Landlord a portion of certain
operating expenses related to the Property described in this Paragraph 4(b)
(collectively "Reimbursable Expenses").

Within thirty (30) days after the expiration of the first Lease Year, Landlord
shall provide to Tenant an itemization of actual Reimbursable Expenses for the
first Lease Year. To the extent any of the Reimbursable Expenses do not reflect
the Demised Premises being fully assessed, occupied and/or functioning, Landlord
shall stabilize and annualize those Reimbursable Expenses ("Adjusted
Reimbursable Expenses") and combine them with the actual Reimbursable Expenses
for the other components to arrive at "Base Year Reimbursable Expenses".
Thereafter, commencing thirty (30) days after the expiration of the second Lease
Year, Landlord shall provide Tenant a written itemization of actual Reimbursable
Expenses for the second Lease Year ("Current Year Reimbursable Expenses"). To
the extent the Current Year Reimbursable Expenses exceed the Base Year
Reimbursable Expenses ("Excess Reimbursable Expenses"), Landlord shall invoice
Tenant the amount thereof and Tenant shall remit payment to Landlord therefor
within thirty (30) days after the receipt of said invoice. In the event the
Current Year Reimbursable Expenses are less than the Base Year Reimbursable
Expenses, Tenant shall not be entitled to any rebate thereof. Annually, after
the expiration of each Lease Year thereafter, Landlord shall similarly provide a
reconciliation and invoice to Tenant, if appropriate, for Excess Reimbursable
Expenses.

Landlord shall keep records showing all Reimbursable Expenses for a period of
three (3) years following each Lease Year, and such records shall be made
available for inspection by Tenant and/or its agents during ordinary business
hours in the city in which the Demised Premises is located. Any dispute with
respect to Landlord's calculations of the Reimbursable Expenses shall be
resolved by the parties through consultation and good faith within sixty (60)
days. However, if the dispute cannot be resolved within such period, the parties
shall request an audit of the disputed matter from an independent, certified
public accountant selected by both Landlord and Tenant, whose decision shall be
based on generally accepted accounting principles consistently applied and shall
be final and binding on the parties. If there is a variance of five percent (5%)
or more between said decision and the Landlord's determination of Reimbursable
Expenses, Landlord shall pay the costs of said audit and shall credit any
overpayment toward the next Base Rent payment falling due or pay such
overpayment to Tenant within thirty (30) days. If the variance is less than five
percent (5%), Tenant shall pay the cost of said audit and shall receive a credit
for any overpayment.

Reimbursable Expenses shall include the following:

(1) Landscaping and Lawn Maintenance;

(2) All services, supplies, repairs, inspections or other expenses for
maintaining the interior and exterior of the Building, parking areas, walkways
and other Improvements constructed by Landlord, and including, but not limited
to, the replacement of light bulbs within Landlord installed fixtures, exterior
window washing twice per year, repairs and maintenance due to normal wear and
tear, but specifically excluding

● janitorial services (such as carpet, floor and window cleaning),

● consumables excluding light bulbs (such as paper towels and toilet paper), and

● damage caused by Tenant, its agents, employees, contractors and invitees not
constituting normal wear and tear, and

● HVAC Expenses (as defined in Paragraph 4(c)), except as otherwise stated in
Paragraph 4(c);

(3) Water, sewer and refuse (which includes only an eight yard dumpster with no
more than three-times-per-week pick up) for the Demised Premises;

(4) The costs of any other repairs that are not "Capital Improvements" (as
hereinafter defined). "Capital Improvements" are defined as roof and foundation
repairs/replacements, structural wall repairs/replacements, and the replacement
of any non-HVAC mechanical, utility or electrical systems servicing the
Property;

(5) Journal Center Assessments; and

(6) A property management fee equal to three percent (3%) of the Base Rent less
the Reimbursable Expenses, plus New Mexico gross receipts tax on such management
fee.

(c) HVAC. Landlord shall be responsible for all maintenance, repair and/or
replacement of the heating, ventilating and air conditioning systems servicing
the Demised Premises during the Term ("HVAC Expenses"). Landlord shall invoice
Tenant annually, within thirty (30) days after the expiration of each Lease
Year, the costs of HVAC Expenses to the extent the HVAC Expenses exceed $.25 per
square foot of Tenant's Rentable Area per Lease Year ("HVAC Expense Stop"),
which Tenant shall reimburse Landlord within thirty (30) days of billing
therefor ("Excess HVAC Expenses"). Provided however, to the extent any single
HVAC Expense for repair and/or replacement of the system, either partially or
completely, exceeds $3,500.00, said amount shall be amortized on a straight line
basis over the useful life of such repair or replacement and the amortized
annual amount thereof shall, together with all other HVAC Expenses for said
Lease Year, be combined and to the extent said HVAC Expenses exceed the HVAC
Expense Stop, the excess shall constitute Excess HVAC Expenses and be included
within Reimbursable Expenses for said Lease Year. Landlord will not charge for
any HVAC usage, and Tenant may set its own hours of operation. Landlord
guarantees that the Demised Premises will have cooling capacity to provide an
even temperature of not more than 74 degrees F when outside temperature is 100
degrees F, and 70 degrees F when outside temperature is 13 degrees F.

(d) EXCLUSIONS FROM REIMBURSABLE EXPENSES. For purposes of calculating
Reimbursable Expenses, the following items are specifically excluded:

(1) depreciation on the Building;

(2) expenses for any Capital Improvements;

(3) expenses for which the Landlord is reimbursed or indemnified (either by an
insurer, condemnor, Tenant or otherwise);

(4) expenses incurred in leasing or procuring new tenants (including, without
limitation, lease commissions, advertising expenses, space planning costs and
expenses of renovating space for new tenants);

(5) legal, engineering or architectural expenses arising out of the
construction, operation, use, occupation or maintenance of the Property or the
enforcement of the provisions of any agreements affecting the Property;

(6) interest or amortization payments on any mortgage or mortgages, and rental
under any ground or underlying lease or leases related to the Property;

(7) wages, salaries or other compensation or benefits paid to any executive
employees above the grade of building manager; wages, salaries or other
compensation paid for clerks or attendants in concessions or newsstands operated
by the Landlord; and fees, wages, salaries and other compensation to the extent
allocable to services not rendered directly in connection with the operation or
maintenance of the Property;

(8) the cost of any work or service performed for or facilities or utilities
furnished to the Tenant or other tenants at that party's cost;

(8A) expenses in connection with maintaining and operating any Covered Parking,

including any normal wear and tear but excluding any negligent or intentional
acts of Tenant, its agents, guests, invitees or employees;

(9) the cost of correcting defects (latent or otherwise) in the construction of
the Improvements, except that conditions (not occasioned by construction
defects) resulting from ordinary wear and tear shall not be deemed defects, or
of bringing the Property into compliance with the law, as qualified by Paragraph
8;

(10) the cost of installing, operating and maintaining a specialty improvement,
including, without limitation, an observatory, broadcasting, cafeteria or dining
facility, or athletic, luncheon or recreational club;

(11) any cost or expense representing an amount paid to a related corporation
which is in excess of the amount which would be paid in the absence of such
relationship, and the cost of signs in or on the Building identifying Landlord
or any tenant of the Building;

(12) dues and/or subscriptions;

(13) travel and/or entertainment;

(14) recruitment and interview;

(15) interest, fines or penalties;

(16) expenses resulting directly or indirectly from the negligence or willful
misconduct of Landlord or its agents, employees or contractors;

(17) any bad debts loss, rent loss, or reserves for bad debts or rent loss;

(18) costs associated with the operation of the business of the person or entity
which constitutes Landlord (as the same are distinguished from the costs of
operation of the Property), including costs of Landlord's general corporate
overhead and general administrative expenses;

(19) costs (including without limitation permit, license and inspection costs)
incurred in connection with tenant improvement work performed by Landlord for
its tenants (or in vacant rentable space) in the Building ERR

(20) repairs or replacements covered by warranties or guaranties;

(21) salaries or service personnel (including the property manager) to the
extent that such service personnel perform services other than in connection
with the management, operation, repair or maintenance of the Property;

(22) damage and repairs attributable to condemnation;

(23) any sale, syndication, financing or refinancing costs and expenses,
including, but not limited to, interest or amortization on debt and rent under
any ground or underlying lease;

(24) costs of changes that are required by law or governmental authorities
because of any act or failure to act by Landlord, its agents, servants or
contractors, including, without limitation, alterations required in connection
with the grant of any permit or approval to Landlord;

(25) contributions to employee pension plans;

(26) management office rental or any amount attributable thereto;

(27) any category of Reimbursable Expense which is not included in the Base Year
Reimbursable Expenses and HVAC Expenses, unless approved in advance by Tenant;

(28) tax penalties incurred as a result of Landlord's negligence or its
inability or unwillingness to make payments when due, except to the extent said
failure is due to Tenant's default under the terms of this Lease;

(29) costs incurred by the Landlord due to the violation by Landlord or any
other tenant of the terms and conditions of any lease of space in the Building;

(30) rentals or other related expenses incurred in leasing air conditioning
systems, elevators or other equipment ordinarily considered to be of a capital
nature;

(31) under no circumstances shall Landlord collect in excess of 100% of all
Landlord's Reimbursable Expenses, or recover, through said expenses, any item of
cost more than once; nor shall Landlord include in Reimbursable Expenses any
costs in excess of those that would be reasonably incurred by prudent operators
and managers of similar buildings in the area. Reimbursable Expenses shall be
reduced by the amount of any reimbursement, recoupment, payment, discount,
credit, reduction, allowance, or the like received or receivable by Landlord
that is allocable to any Reimbursable Expenses;

(32) acquisition costs of sculpture, paintings or works or art, and

(33) reserve accounts of all types.

(e) SECURITY DEPOSIT. Tenant shall not be required to provide a deposit or
advance rent at the time of the execution of this Lease, or prior to the Rent
Commencement Date. However, Landlord shall have the right to require Tenant to
pay a deposit equal to the Base Rent due the last month of the Term, being the
month of the Initial Expiration Date, Early Termination Date or last day of the
final Extended Term for which Tenant has exercised its option, whichever is
applicable ("Security Deposit"). Landlord shall provide written notice demanding
the payment of the Security Deposit given not earlier than seven (7) months
prior to the expiration of the Term, and Tenant shall have thirty (30) days
after the receipt thereof to pay the Security Deposit to Landlord. The Security
Deposit shall be placed by Landlord in a federally insured interest bearing
account under Tenant's federal tax id. no. 85-0359415. Interest shall accrue to
the benefit of Tenant. The Security Deposit shall be held and applied by
Landlord as security for the full and timely performance and observance of any
and all of the terms and conditions of this Lease on Tenant's part to be
performed and observed. Landlord in its discretion and from time to time and at
any time shall be entitled to apply any portion or all of the Security Deposit
to reimbursement or satisfaction of any and all defaults by Tenant of its
obligations under this Lease and/or any and all damages, losses, attorneys'
fees, costs or expenses of Landlord resulting therefrom, including those not
remedied by Tenant within the period, if any, expressly provided for in this
Lease for such remedial action. Upon Landlord giving Tenant notice of any such
application of the Security Deposit, Tenant shall, within ten (10) days
thereafter, pay to Landlord a sum sufficient to restore the amount of such
Security Deposit to the total, including interest expended by Landlord
therefrom. Within thirty (30) days following expiration of the Term (except as
otherwise provided by law), Landlord shall refund to Tenant any balance of the
Security Deposit, including interest earned thereon, which has not been applied
to reimbursement or satisfaction of the foregoing items, and Landlord shall have
no further liability with respect to the Security Deposit.

If Landlord shall cease to be the Landlord of the Property, Landlord shall
deliver the balance of the Security Deposit then on deposit with Landlord to its
successor-in-interest to the Property; and upon such delivery and written notice
to Tenant giving the name and mailing address of such successor-in-interest, and
the written assumption by such successor-in-interest of the Landlord's
obligations under this Lease, including those contained in this Paragraph 4(e),
Landlord shall have no further liability with respect to the Security Deposit.

5. LATE PAYMENT PENALTY; DEFAULT INTEREST

(a) LATE PAYMENT PENALTY. Tenant hereby acknowledges that late payment to
Landlord of Base Rent or other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. If any Base Rent or other sums due from Tenant
is not received by Landlord or Landlord's designated agent within ten (10) days
after its due date for any first late payment within a Lease Year and within
five (5) days after its due date for any subsequent late payment within a Lease
Year, then Tenant shall pay to Landlord a late charge equal to five percent (5%)
of such overdue amount, plus any reasonable attorney's fees incurred by Landlord
by reason of Tenant's failure to pay Base Rent and/or any other charges when due
hereunder ("Late Payment Penalty"). The parties hereby agree that the Late
Payment Penalty represents a fair and reasonable estimate of the costs that
Landlord will incur by reason of Tenant's late payment. Landlord's acceptance of
a payment without the Late Payment Penalty or acceptance of a payment with the
Late Payment Penalty shall not constitute a waiver of Tenant's default with
respect to such overdue amount or prevent Landlord from exercising any of the
other rights and remedies granted hereunder.

(b) DEFAULT INTEREST. Any amounts expended by Landlord on Tenant's behalf for
which Tenant is liable under this Lease, after applicable cure periods, shall
bear interest at the Prime Rate, as published from time to time under the
heading "Money Rates" in The Wall Street Journal, plus four percent (4%) until
repaid ("Default Interest Rate").

6. LANDLORD AND TENANT IMPROVEMENTS

Landlord shall use GA Brunacini Construction Co., Inc., a New Mexico corporation
("Brunacini Construction") as the general contractor for the construction of the
Improvements. The parties have agreed upon a preliminary site plan and building
plan for the Landlord Improvements which is attached as Exhibit "D". Landlord
and Tenant have agreed that Landlord will employ Claudio Vigil as the architect
for the Improvements.

(a) Landlord shall submit plans and specifications for the Landlord Improvements
("LI Plans") to Tenant for approval not later than August 15, 2004 and the LI
Plans shall be approved ("Final LI Plans") not later than September 1, 2004.

(b) Based upon Tenant's conceptual plan, Landlord shall provide Tenant an
initial space plan for the Tenant interior improvements ("Space Plan"), and
Landlord and Tenant shall have until August 1, 2004 to finalize the Space Plan
("Final Space Plan"). Landlord shall provide Tenant, for approval, the plans and
specifications for the Tenant Improvements ("TI Plans"), not later than
September 1, 2004, or one (1) month after finalizing the Space Plan, whichever
is later. Thereafter, the parties shall finalize the TI Plans ("Final TI Plans")
not later than September 15, 2004 or fifteen (15) days after submission thereof
to Tenant.

(c) The parties acknowledge and agree that for purposes of reviewing and
approving the Space Plan, LI Plans and TI Plans, each party shall respond within
five (5) business days after the receipt of documents related thereto, either
approving or disapproving said documents.

(d) Landlord shall provide Tenant an allowance of $35.00 per square foot of
Tenant's Rentable Area for the construction of the Improvements depicted on the
Final TI Plans, moving expenses and furniture acquisition ("Tenant Allowance").
The calculation of the construction costs within the Tenant Improvements
reflected on the Final TI Plans shall be at Brunacini Construction's
construction cost plus seven percent (7%). If Brunacini Construction self
performs any Tenant Improvements, if requested by Tenant, Landlord shall provide
Tenant two (2) competitive bids therefor, and the self- performed work shall be
done by Brunacini Construction at a cost no greater than the lowest responsive
bid. All cost information related to the Tenant Improvements shall be open book,
and Tenant shall have the right to review all pricing at all reasonable times
upon advance notice to Landlord. Any changes requested by either party to the
Final Space Plan, Final LI Plans and Final TI Plans shall be evidenced by a
written "Change Order" executed by both Landlord and Tenant reflecting the
additional cost or reduced cost, the party requesting the Change Order, and any
additional delay in the Commencement Date related to said Change Orders.

(e) Up to $15.00 per square foot of Tenant's Rentable Area of the Tenant
Allowance may be used by Tenant to offset costs associated with Tenant's move to
the Demised Premises, including, but not limited to, telephone, data system and
wiring installation, direct costs of the physical move, any furniture and
cubical procurement, security system purchase and/or set up, any equipment set
up costs, and any other reasonable expense related to the move ("Moving
Allowance"). The parties acknowledge and agree that not more than $2.00 per
square foot of Tenant's Rentable Area of the Moving Allowance may be utilized
for direct moving related costs ("Direct Moving Costs"). The unpaid invoices for
expenses for the Direct Moving Costs may be submitted by Tenant to Landlord, and
Landlord shall pay said invoices up to a total of $2.00 per square foot of
Tenant's Rentable Area directly to the vendor(s). The parties further
acknowledge and agree that any portion of the Moving Allowance actually used by
Tenant that exceeds $5 per square foot of the Tenant's Rentable Area shall be
used solely to purchase furniture for the Demised Premises. The balance of the
Moving Allowance including the portion for "Landlord Financed Furniture" shall
be reimbursed within thirty (30) days to Tenant upon presentment to Landlord of
paid invoices for the allowable expenses, or alternatively, shall be purchased
directly by Landlord at the request of Tenant to satisfy requirements of the
IRB(s). Tenant shall have the right to utilize all or any portion of the Moving
Allowance for the purchase of furniture ("Landlord Financed Furniture"). The
Landlord Financed Furniture shall remain at the Demised Premises and shall be
for the exclusive use of Tenant, its employees and invitees during the Term, and
Tenant shall be responsible for all maintenance, repair and replacement of the
Landlord Financed Furniture, normal wear and tear excepted. The Landlord
Financed Furniture shall be the property of Landlord, shall be returned to
Landlord at the expiration of the Term, and Landlord shall have the benefit of
all depreciation related thereto. The parties acknowledge and agree that any and
all equipment, fixtures, furniture or other improvements purchased with the
Tenant Allowance and Extra Tenant Allowance or Expansion Allowance shall remain
at the Property upon termination of the Lease; and, Tenant shall have no
ownership interest in such equipment, fixtures, furniture or other improvements.
Landlord and Tenant shall execute an inventory, attached hereto as Exhibit "G",
listing and describing all Landlord Financed Furniture, as well as describing
the installation and wiring of telephone and data systems.

(f) Tenant shall have the right to an additional allowance for Tenant
Improvements of $5.00 per square foot of Tenant's Rentable Area (the "Extra
Tenant Allowance") by providing a written request therefor, to Landlord not
later than the Commencement Date. The Extra Tenant Allowance may only be used
for actual Tenant Improvements and Landlord Financed Furniture, and not any
other items included within the "Moving Allowance" as hereinafter defined. Any
portion of the Extra Tenant Allowance utilized by Tenant will be amortized over
ten (10) years from the Rent Commencement Date at seven percent (7%) per annum
and shall be added to the Base Rent.

(g) The parties acknowledge and agree that the LI Plans shall provide for a
single electrical utility feed for the main electrical service to the Building.
Tenant, at Tenant's sole cost and expense, may add an additional utility feed to
the Building and upgrade the utility service.

(h) The Final LI Plans shall provide for two (2) conduits from the Building's
telecommunications room to the lot line of the Land to be mutually agreed upon
by Landlord and Tenant. Tenant, at Tenant's sole cost and expense, shall pay for
pulling all wiring or cabling to the Building and within the Building's chases
and ducts. Landlord represents that there currently exist telephone lines and
fiber optic at the boundary of the Property to the best of Landlord's actual
knowledge. Landlord will responsible for bringing telephone lines and fiber
optic to the boundary of the Property.

(i) Landlord shall install, as part of the Landlord Improvements, a security
system which shall include card access swipe cards for all of Tenant's employees
at each entrance to the Building ("Security System"). An allowance for the
Security System totaling $10,000.00 shall be included in the Landlord
Improvements. To the extent the cost of the Security System exceeds $10,000.00,
Tenant shall pay said costs from the Tenant Allowance, Extra Tenant Allowance or
as mutually agreed by Landlord and Tenant. All repair and replacement of the
Security System, after initial installation, shall be a Tenant Expense.

(j) Landlord shall install signs ("Signs") requested by Tenant on the Building
and monument on the Land which conform with all governmental requirements, the
Journal Center Covenants and which have been approved in writing by Landlord.
Landlord and Tenant shall agree upon the location, size and design of each of
the Signs, which approval shall not be unreasonably withheld, conditioned or
delayed. Tenant's name shall be included on the Building directory in the lobby,
per Tenant's standards, including the names of all executives, departments and
managers of Tenant. An allowance for the initial Signs, including the Building
directory, has been included in the Landlord Improvements totaling $5,000.00
("Sign Allowance"). To the extent the cost of the Signs exceeds $5,000.00,
Tenant shall pay said costs form the Tenant Allowance, Extra Tenant Allowance or
as mutually agreed by Landlord and Tenant. All repair and replacement of the
Signs, after initial installation, shall be a Reimbursable Expense.

(k) The parties acknowledge and agree that parking facilities for the Demised
Premises shall be at a ratio of four (4) spaces per 1,000 square feet of
Tenant's Rentable Area, as may contract or expand pursuant to the terms of this
Lease. Landlord and Tenant shall agree upon covered parking for the benefit of
Tenant and subject to Journal Center Covenants ("Covered Parking") and which
shall be included in the Final LI Plans. The use of the Covered Parking shall be
billed to Tenant as additional rent at the rate of $25.00 per parking space per
month for the Initial Term as follows:

 1. Tenant shall guarantee to Landlord payment of additional rent for twelve
    (12) Covered Parking spaces for the Initial Term and all Extended Terms
    exercised by Tenant.

(2) Landlord and Tenant shall negotiate the use and additional rent for any
additional Covered Parking spaces.

Additional rent for the Covered Parking during any Extended Term shall be
offered at the rate of ninety-five percent (95%) of the going market rate for
comparable covered parking at the commencement of each Extended Term, for which
the option was exercised by Tenant, provided however, that any additional rent
for Covered Parking shall not be less than $25.00 per month per space.

(l) Landlord agrees to use its best efforts in conjunction with Tenant to have
the public street accessing the Property to be named "SBS Technologies Drive".

(m) Except as otherwise specifically provided to the contrary in this Lease,
Substantial Completion of the Improvements and delivery of possession of the
Property to Tenant shall occur not later than May 1, 2005. For purposes of this
Lease, "Substantial Completion" shall mean: (i) the Improvements are complete in
accordance with the Final LI Plans and Final TI Plans (as the same may be
amended by mutually agreed upon Change Orders) and all of the Demised Premises'
heating, ventilating, air-conditioning, plumbing, life- safety, mechanical and
electrical systems are fully operational (except minor punch list items) such
that Tenant can conduct normal business operations from the Demised Premises;
(ii) a certificate of occupancy (or its equivalent) has been obtained for the
Demised Premises from applicable governmental authorities; (iii) all exterior
and common areas, including, without limitation all parking facilities, access
roads, curbs, curb cuts, sidewalks, landscaping, irrigation, and related
facilities are complete (subject only to minor punch-list type items which do
not materially impair use and enjoyment); and (iv) the Demised Premises are
broom clean and vacant. The completed installation of Landlord Financed
Furniture or other furniture purchased by Tenant shall not be required for
Substantial Completion of the initial Landlord Improvements and Tenant
Improvements. Furthermore, the denial or delay of a certificate of occupancy (or
its equivalent) due to the lack of the completion of furniture installation
shall not delay the Commencement Date. Landlord shall provide Tenant written
notice of the proposed Commencement Date not less than thirty (30) days prior
thereto. Within ten (10) days prior to the proposed Commencement Date, Landlord,
Brunacini Construction and Tenant shall inspect the Property and complete a
punch list of unfinished items of the Improvements (the "Punch List"). All items
on the Punch List shall be completed by Landlord within thirty (30) days, except
those items which cannot reasonably be completed within said time period, but
which items shall be completed as soon as reasonably possible. Within thirty
(30) days after the Commencement Date, Tenant shall add to the Punch List
additional items requiring correction, which Landlord shall complete within
thirty (30) days, or as soon thereafter as reasonably practicable.

(n) Landlord shall cause all Improvements to be constructed in a good and
workmanlike manner, consistent in all material respects with the Final Ll Plans
and the Final TI Plans, using only new materials of appropriate grade. Landlord,
through Brunacini Construction, shall and does hereby agree to warrant the
materials, equipment and workmanship of the Improvements, and Landlord shall
repair or replace all materials, equipment and workmanship related thereto found
to be defective within one (1) year following the Commencement Date or such
longer period, to the extent there are latent defects or defects that are not
readily apparent by visual inspection and not discovered prior to the first
anniversary of the Commencement Date. Tenant shall provide written notice to
Landlord of any patent or readily apparent defects within said one (1) year
anniversary of the Commencement Date, or be deemed to have waived the provisions
of this subparagraph as to said defects.

(o) If the Final Space Plan, Final LI Plans or Final TI Plans are not approved
by Landlord and Tenant on or before the dates established in this Paragraph 6,
the Commencement Date (as said date may be extended by Change Orders) shall be
extended one (1) day for each day after said deadline(s) until each final
approval is reached.

(p) Tenant shall not have the right to enter the Demised Premises for purposes
of preparing the same for occupancy prior to the Commencement Date, without the
prior written consent of Landlord. Additionally, if Landlord and Tenant agree to
permit Tenant to have access for said purposes, any such use shall not
unreasonably interfere with the construction of the Improvements and Tenant
shall provide all liability insurance required by Paragraph 14 hereinafter.

7. INDUSTRIAL REVENUE BONDS

Landlord, with the assistance of Tenant, shall seek industrial revenue bonds
("IRB(s)") in connection with the Property. Tenant has retained bond counsel in
connection with such IRBs, and such counsel will also represent Landlord. Tenant
agrees to pay all costs of the bond counsel in connection with the IRB(s) and
all other third party expenses, including costs imposed by Bernalillo County,
the fees of legal counsel for Bernalillo County and the costs of the bank
depository in connection with issuance of the IRB(s). In addition, Tenant shall
reimburse Landlord for all reasonable legal expenses incurred by Landlord, such
as any necessary corporate counsel opinions on behalf of Landlord, in connection
with the IRB(s). Landlord and Tenant shall cooperate in all aspects of the
IRB(s). Any tax benefits accruing for personal property and any real property
tax benefits during the term of this Lease shall be for the sole benefit of
Tenant. In the event the Lease is terminated for any reason, Tenant shall pay
all termination fees, penalties or other out of pocket expenses associated with
IRB(s) incurred by Landlord as a result of the termination. Tenant shall defend,
indemnify and hold Landlord harmless from any such expenses.

8. REQUIREMENTS OF LAW

Tenant shall promptly comply with all statutes, ordinances, rules, orders,
regulations, and requirements of the federal, state and municipal governments
and of any and all of their departments and bureaus, including without
limitation environmental requirements (collectively called "governmental
requirements") which are applicable to the use by Tenant of the Demised
Premises, or Tenant's business and operations within the Demised Premises during
the Term. Landlord shall, at its sole expense, comply with any governmental
requirements enacted after the Commencement Date requiring alteration of any
portion of the Property required to be maintained by Landlord pursuant to this
Lease, unless such alterations are required solely because of the nature of
Tenant's business and activities on the Property, rather than by virtue of
ownership of the Property. Tenant shall, at its sole expense, comply with any
such governmental requirements which require (i) alterations of any portion of
the Demised Premises required to be maintained by Tenant hereunder and (ii)
alterations of any portion of the Demised Premises required to be maintained by
Landlord which are required solely because of the nature of Tenant's business
and activities thereon; provided however, if such repairs by Tenant have a
depreciable life in excess of the balance of the Term (including the Extended
Terms) pursuant to Internal Revenue Service depreciation schedules in effect at
the time of such repairs, or other nationally recognized depreciation schedules,
Landlord shall reimburse Tenant upon demand for the portion of the cost of such
repairs attributable to the period of time after the Term (including Extended
Terms) expires. Either party may elect, by notifying the other party of such
election, to terminate this Lease in the event the cost of any repairs required
to be made by the electing party pursuant to governmental requirements enacted
after the Commencement Date exceeds twenty- five percent (25%) of the Base Rent
paid by Tenant for the immediately prior Lease Year. This Lease shall terminate
upon the date of such election unless the non-electing party notifies the
electing party within thirty (30) days of such election, of its intent to pay
such excess to make the required repairs on behalf of the electing party,
whereupon the termination election shall be null and void, this Lease shall
remain in full force and effect, and the non-electing party shall pay the excess
amount for such required alterations pursuant to the governmental requirements.
In the event either party, after the time required to remedy defaults under this
Lease, shall fail or neglect to comply with the governmental requirements set
forth in this Paragraph 8, or any of them, and required to be complied with by
that party, then the other party or its agents may, by entry if required, comply
with any and all of the governmental requirements at the risk and expense of the
defaulting party, and recover such expense from the defaulting party; with any
sums owing by Tenant to be added to the next monthly installment of Base Rent
and to be collectible as Base Rent, and any sums owing by Landlord to be
deductible from Base Rent or other sums otherwise payable by Tenant to Landlord.

9. REPAIRS; TOUCH UP ALLOWANCE

(a) Except as provided specifically elsewhere in this Lease, Landlord shall
maintain and repair the interior and exterior of the Building and the fixtures
therein, including but not limited to HVAC, plumbing and electrical fixtures and
systems, subject to reimbursement provided for in Paragraph 4 above. Landlord
shall also maintain and repair any additions to the Demised Premises made by
Tenant and approved by Landlord and shall replace glass broken during the Term,
unless breakage is caused by Tenant, its employees, agents, representatives,
contractors and invitees. Tenant shall not clog any plumbing, sewers, waste
pipes, drains or water closets used by Tenant. Tenant, at Tenant's sole cost and
expense, shall repair and replace all damage to the Demised Premises and all
Improvements, caused by the negligent or intentional acts or omissions of
Tenant, its employees, agents, representatives, contractors or invitees. If,
within thirty (30) days after written notice by Landlord, Tenant fails to
provide any of the maintenance or repairs required of Tenant and fails to
complete the same with reasonable diligence, then Landlord may provide such
repairs or maintenance for the account of Tenant and the costs thereof shall be
added to the next monthly installment of Base Rent payable hereunder and shall
be collectible as Base Rent.

(b) During the Term, Landlord shall be responsible for Capital Improvements and
for all other maintenance, repairs and replacements to the Property and all
Improvements (in the latter case, only if constructed by Landlord), and damage
due to fire or casualty, to the extent this Lease requires Landlord to insure
against such fire or casualty. All repairs and maintenance to be made by
Landlord shall be at Landlord's risk and expense.

(c) Landlord shall not be liable for any damage or injury to the person,
business (or any loss of income therefrom), goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers or any other person
in or about the Demised Premises, whether such damage or injury is caused by or
results from:

(i) Fire, steam, electricity, water, gas or rain;

(ii) The breakage, leakage, obstruction or other defects of pipes, sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures;

(iii) Conditions arising in or about the Demised Premises or upon other portions
of the Building and Land or from other sources or places, not caused by or
resulting from Landlord's breach of the Lease; or

(iv) In the event Tenant elects to exercise its right of contraction only, any
act or omission of any other tenant of any portion of the Building.

Landlord shall not be liable for any such damage or injury even though the cause
of or means of repairing such damage or injury are not accessible to Tenant. The
provisions of this subparagraph, however, shall not exempt Landlord from
liability for Landlord's negligence or willful misconduct.

(d) In the event Landlord fails to provide any of the maintenance or repairs
required of Landlord pursuant to the terms of this Lease within thirty (30) days
after Landlord's receipt of written notice thereof from Tenant (or such lesser
time period as is reasonable in the event of an emergency), Tenant shall have
the right to undertake said maintenance or repairs and offset the costs thereof
against rent and other amounts due under the terms of this Lease. In the event
the maintenance or repairs required of Landlord cannot reasonably be completed
within thirty (30) days, and Landlord commences the maintenance or repairs
within said thirty (30) days, and thereafter diligently pursues the maintenance
or repairs to completion, Landlord shall not be in default under the terms of
this subparagraph.

(e) TOUCH UP ALLOWANCE. During the sixth (6th) Lease Year, Landlord shall
provide Tenant an allowance of $1.00 per square foot of Tenant's Rentable Area
for repainting or other fix-up expenses (collectively "Fix-Up") incurred by
Tenant during said Lease Year ("Touch Up Allowance"). Tenant shall provide
written notice to Landlord of requested Fix-Up and Landlord shall perform said
Fix-Up for a cost calculated on the same basis as the formula for the Tenant
Improvements. To the extent the expenses for the Fix-Up exceed the Touch Up
Allowance, Landlord and Tenant shall mutually agree upon payment therefor.

10. UTILITIES; JANITORIAL; TAXES

(a) Tenant shall pay directly when billed all charges for gas, electricity,
janitorial, security/fire alarm monitoring, telephone, including two (2)
dedicated phone lines for security/fire and other utilities and services not
constituting Reimbursable Expenses used in connection with the Demised Premises
during the Term. Landlord agrees to pay the water, refuse and sewer charges, and
Tenant shall reimburse Landlord therefor as provided for in Paragraph 4 of this
Lease.

(b) Landlord shall bear the cost of and pay when due and in time to take
advantage of all discount allowances if any, otherwise before any of the same
shall be in default or carry interest or penalties for late payment, all real
estate taxes (collectively "real estate taxes") assessed against the Property.
Tenant shall reimburse and pay Landlord for such actual real estate taxes or
payments in lieu thereof required in connection with any IRB(s). If any tax
(gross receipts or otherwise, but not including Landlord's income taxes) on
rents is imposed by governmental authorities in lieu of or in addition to real
estate taxes, Tenant shall reimburse Landlord the amount thereof within fifteen
(15) days after receipt of an invoice therefor from Landlord. Any reduction in
real estate taxes arising through the issuance of industrial revenue bonds shall
reduce dollar-for-dollar Tenant's obligation under this Paragraph 10(b).

Except as specifically provided in this Lease, Landlord shall bear the cost of
and pay when due all assessments against the Property for municipal or public
improvements and service facilities.

(1) Tenant shall have the right, in good faith, by appropriate proceedings, to
contest any assessment or reassessment, or the real estate taxes, or the
validity of either, or of any increase in the assessment, or the rate, as
permitted by law, and Tenant shall provide written notice thereof to Landlord
coincident with providing notice to the governmental authority.

(2) Landlord shall, within five (5) days after receiving any assessment notice
or tax bill related to the real estate taxes

provide Tenant written notice thereof.

(3) In any contest of the real estate taxes, Tenant is authorized to act in its
own name and in the name of Landlord, if legally necessary or desirable to use
Landlord's name, and Landlord agrees that it will, at Tenant's request, provided
it is not put to any expense thereby, cooperate with Tenant in any way Tenant
may reasonably require in connection with such contest.

(4) Any contest conducted by Tenant hereunder shall be at Tenant's expense and
in the event any penalties, interest or late charges become payable with respect
to the real estate taxes as the result of such contest, Tenant shall pay same.

(5) Tenant shall pay to Landlord monthly with Base Rent, one-twelfth (1/12th) of
the estimated real estate taxes, and Landlord shall remit said amounts to the
First Mortgagee. Within two (2) months following the close of each calendar
year, Landlord shall provide Tenant an accounting showing the actual real estate
taxes paid by Landlord related to the Property and the estimated amount paid by
Tenant. In the event the accounting shows the total of the monthly payments made
by Tenant were less than the amount of the actual real estate taxes due from
Tenant under this subparagraph, the accounting shall be accompanied by an
invoice for the additional real estate taxes due. In the event the accounting
shows the total of the monthly payments for estimated real estate taxes made by
Tenant exceeds the amount of actual real estate taxes due from Tenant under this
subparagraph, Landlord shall provide a credit to Tenant for said amount against
the Base Rent and other amounts next falling due from Tenant. In addition to the
accounting provided for above, Landlord shall provide Tenant with a new monthly
estimated amount for real estate taxes for the current calendar year.

11. ALTERATIONS BY TENANT; ROOF;GENERATOR

(a) ALTERATIONS BY TENANT. After the completion of the Landlord Improvements and
Tenant Improvements, Tenant shall not make any alterations, additions or
improvements, which shall not include the purchase and installation of any
modular furniture or any relocation of existing modular furniture within the
Demised Premises ("Tenant Requested Alterations"), costing over $10,000.00 per
improvement project, to the Demised Premises without the prior written consent
of Landlord, which shall not be unreasonably withheld, conditioned or delayed.
Tenant may, with prior notice to Landlord, at its own cost and expense and in a
good and workmanlike manner, make such minor alterations, additions or
improvements or erect, remove or alter such partitions, or erect such shelves,
bins, machinery, racks and trade fixtures it may deem advisable, without
altering the basic character of the Building or Improvements and without
overloading or damaging the Building or Improvements, and in each case complying
with all applicable governmental laws, ordinances, regulations, and other
requirements. Tenant shall be responsible for maintaining all such minor
alterations, additions or Improvements. Upon the expiration or earlier
termination of this Lease, unless otherwise agreed upon in writing by the
parties, Tenant shall restore the Demised Premises to its original condition,
ordinary wear and tear excepted, and with all Landlord Financed Furniture left
in its then condition, except negligent or intentional damage thereto which
shall be repaired or replaced by Tenant. Notwithstanding anything aforesaid,
Tenant shall have the right to install and remove from time to time and at the
expiration or earlier termination of this Lease, whether the same be attached to
the Demised Premises or otherwise, Tenant's trade fixtures, equipment and other
personal property, to include, without limitation, moveable office partitions,
and furniture, as well as any machinery and equipment belonging to Tenant
("Tenant FF&E") provided however, if any portion of the Demised Premises
maintained by Landlord will be damaged by the installation or use of the Tenant
FF&E, Tenant shall have Landlord install and remove same, at Tenant's sole cost
and expense, which expense shall include repairing any damage to the Demised
Premises. Tenant shall also, at Tenant's sole cost and expense, repair any other
damage caused to the Demised Premises by Tenant in removing Tenant's FF& E.

(b) ROOF. Tenant shall have the right, at Tenant's sole cost and expense, to
install antennas, satellite dishes and other communications facilities, for
Tenant's use only, on the roof of the Building, subject to conformance with all
governmental requirements, Journal Center Covenants and the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord and Tenant shall mutually agree on the
installation, maintenance and removal of any such communications facilities to
avoid damage to the roof or invalidation of any warranties related to the roof.
Tenant shall not be charged any additional Base Rent or other fees for use of
the roof for communications facilities approved pursuant to the terms of this
subparagraph. Notwithstanding anything to the contrary in this Lease, such
communications facilities may be removed at Tenant's election at the expiration
of the Term and Tenant shall repair all damage to the roof caused by such
removal. Notwithstanding any of the provisions of this Lease, Landlord shall
have the right to install antennas, satellite dishes, and other communications
facilities, or otherwise utilize the roof in any manner permitted by law and
Journal Center Covenants provided the same do not interfere with the functioning
of Tenant's rooftop facilities.

(c) GENERATOR. Tenant, at Tenant's sole cost and expense, which may be used from
the Tenant Allowance or the Additional Tenant Allowance, shall have the right to
install a back-up generator adjacent to the Building on the pad site with the
natural gas stub-out which is installed by Landlord as a part of the Landlord
Improvements. Tenant, at Tenant's sole cost and expense, shall be responsible
for all maintenance, repair and replacement of the generator and shall comply
with all applicable governmental requirements and the Journal Center Covenants
related thereto. No additional Base Rent or other fees shall be charged to
Tenant for the use of the generator pad or any generator approved pursuant to
the terms of this subparagraph. Notwithstanding anything to the contrary in this
Lease, such generator, if not purchased with the Tenant Allowance or Additional
Tenant Allowance, may be removed at Tenant's election at the expiration of this
Lease.

12. LANDLORD'S RIGHT OF ACCESS

Landlord, its agents, servants and employees shall have the right to enter the
Demised Premises during business hours (or any time in the event of an emergency
after such notice, if any, as is feasible under the circumstances), with
reasonable frequency, upon reasonable notice to Tenant and in the presence of
Tenant's personnel (except in the event of an emergency) for the purpose of
inspecting the same to ascertain whether Tenant is performing the covenants of
this Lease, and during business hours or otherwise in the event of need, under
special arrangements with Tenant, for the purpose of making required repairs,
alterations, improvements or additions, and Landlord shall be allowed to take
all materials into and upon the Demised Premises that may be required therefor
without the same constituting an eviction of Tenant in whole or in part, and,
except as otherwise provided herein, the Base Rent shall in no way abate while
said repairs are being made by reason of loss or interruption of the business of
Tenant because of the prosecution of any such work except to the extent such
prosecution renders more than ten percent (10%) of Tenant's Rentable Area
unusable for Tenant's normal operations for a period of more than one business
day. Landlord agrees to cause as little inconvenience as reasonably possible to
Tenant in connection therewith. During the one hundred eighty (180) days
preceding the expiration of the Term, Tenant shall permit Landlord or Landlord's
agents to show the Demised Premises to prospective tenants with reasonable
frequency during business hours upon reasonable notice to Tenant and in the
presence of Tenant's personnel and to place and keep in one or more conspicuous
places within the parking/landscaped area of the Property, not interfering with
Tenant's use of the Property, a sign in the usual form "To Let", and at any time
a sign in the usual form "For Sale", which signs Tenant shall permit to remain
thereon without molestation.

13. FIRE INSURANCE; DESTRUCTION BY FIRE OR OTHER CAUSES

Landlord shall provide and maintain insurance on the Demised Premises against
loss or damage by fire, with extended coverage endorsement. The amount of such
insurance shall be equal to the full insurable replacement cost of the Demised
Premises and Landlord's Work, as the same shall exist from time to time, or the
amount required by Landlord's lender(s). In addition, Landlord shall have the
right to maintain loss of rent insurance for up to one year after a casualty
loss. Tenant shall reimburse and pay Landlord during the Term, the premiums for
such insurance as called for in this Paragraph by paying to Landlord monthly,
with Base Rent, one-twelfth of the applicable annual insurance premiums. In the
event of a loss covered by insurance, Landlord shall receive and apply all the
proceeds thereof to repair the damages. The insurer used by Landlord for the
fire and casualty insurance required by this Paragraph shall be duly licensed to
transact business in the State of New Mexico and shall maintain during the
entire policy term or terms, a "General Policyholder's Rating" of at least
A-VII, as set forth in the most current issue of "Best's Insurance Guide."
Landlord shall use commercially reasonable efforts to minimize the cost of
premiums for the insurance meeting the requirements of this Lease. In the event
of damage to or the destruction of the Demised Premises or a portion thereof by
fire, or other cause so that the Demised Premises cannot in the fair estimate of
either party be restored within one hundred eighty (180) days, either party may
terminate this Lease by written notice given within thirty (30) days after the
event, and thereafter, neither Landlord nor Tenant shall have any further
rights, duties or obligations under this Lease, except as otherwise expressly
provided in this Lease, and Base Rents and other sums payable by Tenant for the
remainder of the Term shall wholly abate. If the Demised Premises can be
restored in said one hundred eighty (180) day period, Landlord will undertake
immediately the repair and reconstruction of the Demised Premises at Landlord's
expenses and will complete such work with due and reasonable diligence. During
the period commencing with the date the damage occurred and ending with the
completion of the requisite repairs or restoration and a reasonable period of
time for Tenant's move-in, the rent payable hereunder shall fairly abate and the
obligation of Tenant to pay the same shall cease to the extent and in the
proportion to the area rendered unusable by Tenant in its normal operations by
the damage or by the work or restoration and repair.

14. LIABILITY INSURANCE

(a) Tenant shall at all times during the Term of this Lease carry public
liability insurance covering the Property which insurance shall insure against
liability for personal injury or death and property damage in an amount not less
than Two Million Dollars ($2,000,000.00). Landlord shall be named as an
additional insured on any such policy and the coverage shall require the
insurance company to provide thirty (30) days prior written notice to Landlord
of its intent to cancel the policy. In the event Tenant fails to maintain the
coverage required by this paragraph, Landlord shall have the right to provide
coverage and Tenant shall reimburse Landlord for said expenditure at the time of
the next Base Rent payment. The insurance company used by Tenant for the public
liability insurance required by this paragraph shall be duly licensed to
transact business in the State of New Mexico and shall maintain during the
entire policy term or terms, a "General Policyholder's Rating" of at least B+,
XII, as set forth in the most current issue of "Best's Insurance Guide", or such
other rating as may be required by a lender having a first lien on the Property.
A copy of the policy or certificate of insurance shall be delivered to Landlord
by Tenant upon request made by Landlord. Notwithstanding anything to the
contrary stated in this Lease, any insurance carried or required to be carried
by Tenant pursuant to this Lease, at Tenant's option may, be carried under an
insurance policy(ies), or pursuant to a master policy of insurance or so-called
blanket policy of insurance covering other locations of Tenant or its corporate
affiliates, or any combination thereof.

(b) Landlord shall also maintain liability insurance, in addition to, and not in
lieu of, the insurance required to be maintained by Tenant. Tenant shall not be
named as an additional insured therein. Tenant shall reimburse and pay Landlord
during the Term, the premiums for such insurance in the same manner as called
for in Paragraph 13.

(c) All insurance which is carried by either party with respect to the Demised
Premises, whether or not required, shall include provisions which either
designate the other party as one of the insureds or deny to the insurer
acquisition by subrogation of rights of recovery against the other party to the
extent such rights have been waived by the insured party prior to occurrence of
loss or injury, insofar as, and to the extent that such provisions may be
effective without making it impossible to obtain insurance coverage from
responsible companies qualified to do business in the state in which the Demised
Premises are located (even though extra premium may result therefrom). Each
party shall be entitled to have duplicates or certificates of any policies
containing such provisions. Both parties shall waive their insurers' right of
subrogation under all policies maintained hereunder, in favor of the other
party, with respects to claims that are covered, or should have been covered by
valid and collectible insurance, had such insurance been maintained.

15. EMINENT DOMAIN

If the whole or any part of the Demised Premises or sufficient portion of the
Property materially affecting Tenant's use (including any reduction in the
parking spaces on the Property below four (4) spaces per 1000 square feet of
Tenant's Rentable Area then in effect, plus any additional Tenant's Rentable
Area within the Expansion Addition, if such right remains in effect pursuant to
Paragraph 1(c)) of the Property shall be taken by lawful authority for any
public or a quasi-public use or purpose this Lease shall, as to the part so
taken, terminate on the date title shall be acquired by the condemning
authority, and the Base Rent and other payments due hereunder shall abate fairly
and in proportion to the part so taken and shall entirely abate if the entire
Demised Premises is taken. In all cases of a partial taking of the Demised
Premises or Property, if Tenant reasonably determines that the Demised Premises
after condemnation cannot be used with reasonable efficiency for Tenant's
business use, Tenant may, at its election, by delivering written notice within
thirty (30) days after Tenant receives notice of the proposed taking, terminate
this Lease and vacate the Demised Premises, and in that event, the liability of
Tenant for performance of this Lease shall terminate and come to an end and all
Base Rent and other payments due hereunder shall abate effective as of the
effective date of the taking. Any award or compensation granted in connection
with the taking shall be allocated between Landlord and Tenant fairly and
equitably and without giving preference to either party, taking into
consideration the respective interests of the parties in the Property, the
portion or portions of the Property taken, the utility of any remaining premises
and the income of the parties therefrom, the extent of abatement of the Base
Rent and other payments due hereunder, the period Tenant may continue in
possession after the taking and the terms and circumstances of such occupancy,
the extent Landlord is deprived of income, the remainder of the Term, the value
of Landlord's reversionary interest, the value of Tenant's leasehold interest,
the value of the Land taken, the depreciated cost of the Building and
Improvements and all other relevant matters; which determination shall be made,
if the parties cannot agree, by and in accordance with the procedures of the
American Arbitration Association upon application by either party. Any amount
due upon any mortgage on the Property shall be charged against and paid out of
the share of Landlord in the award. Notwithstanding the aforesaid, any award for
the taking of the personal property and fixtures of Tenant and any award for
moving expenses, shall belong to and be paid exclusively to Tenant. In the event
of a partial taking for which Tenant does not elect to terminate this Lease,
rent shall be equitably abated.

16. SUBORDINATION; ESTOPPEL

(a) This Lease and all the rights of Tenant hereunder are and shall be subject
and subordinate at all times to the lien or liens of any and all mortgages in
any amount or amounts whatsoever placed on the Property, or any portion thereof,
either prior or subsequent to the date hereof, provided that each such mortgagee
agrees with Tenant by a writing delivered to Tenant, that Tenant shall not be
disturbed in possession and this Lease shall remain in full effect as long as
Tenant performs its obligations hereunder within applicable grace or cure
periods. It shall not be necessary for Tenant to execute any further instrument
or act to effectuate such subordination, but Tenant shall execute and deliver
upon demand such further instrument or instruments (in form reasonably
acceptable to Tenant) evidencing such subordination of this Lease as may be
desired by the First Mortgagee or proposed mortgagee, or necessary to effectuate
the provisions of this Paragraph, which also contains the above-mentioned
non-disturbance provision.

(b) Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or, if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; and (iv) that Landlord is not in
default under this Lease (or, if Landlord is claimed to be in default, stating
why). Tenant shall deliver such statement to Landlord within fifteen (15) days
after Landlord's request. Any such statement by Tenant may be given by Landlord
to any prospective purchaser or encumbrancer of the Property. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct. If
Tenant does not deliver such statement to Landlord within such fifteen (15) day
period, Landlord shall provide Tenant a second, seven (7) day notice. If Tenant
does not deliver such statement to Landlord within such seven (7) day period,
Landlord and any prospective purchaser or encumbrancer may conclusively presume
and rely upon the following facts: (i) that the terms and provisions of this
Lease have not been changed except as otherwise represented by Landlord; (ii)
that this Lease has not been canceled or terminated except as otherwise
represented by Landlord; (iii) that not more than one (1) month's Base Rent or
other charges have been paid in advance; and (iv) that Landlord is not in
default under this Lease. In such event, Tenant shall be estopped from denying
the truth of such facts.

17. NON-WAIVER OF LANDLORD'S OR TENANT'S RIGHTS

The failure of either Landlord or Tenant to insist upon strict performance of
any of the covenants or conditions of this Lease or to exercise any right herein
conferred in any one or more instances, shall not be construed as a waiver or
relinquishment for the future of any such covenants, conditions or rights, but
the same shall be and remain in full force and effect.

18. QUIET ENJOYMENT

Landlord covenants that Tenant on paying the Base Rent and performing the
covenants aforesaid within any applicable grace or cure periods shall and may
peaceably and quietly have, hold and enjoy the Property for the Term.

19. SURRENDER

Tenant shall quit and surrender the Demised Premises at the expiration of the
Term, broom clean and in good order and condition, ordinary wear and use, damage
by fire or other casualty and repair and replacement obligations defaulted by
Landlord excepted.

20. NOTICES

All notices, approvals and demands permitted or required to be given under this
lease shall be in writing and sent by facsimile, overnight courier, or United
States Mail. Each such notice, request or other communication shall be
considered given and shall be deemed delivered (a) on the date delivered if by
personal delivery or courier service; (b) on the date of transmission with
confirmed answer back if by telecopier transmitted before 5:00 p.m. local time
of addressee on a business day, and on the next business day if transmitted
after 5:00 p.m. or on a non-business day; or (c) upon delivery after depositing
the notice or demand in the United States mail (certified or registered, postage
prepaid), addressed to the Landlord or Tenant respectively at the address set
forth herein below.

If to Landlord: Brunacini Development Ltd. Co.

c/o Angelo Brunacini

P.O. Box 6363

Albuquerque, New Mexico 87197

Telephone: (505) 833-2925

Fax: (505) 833-2928

with a copy to: Kenneth A. Hunt, Esq.

Hunt & Davis, P.C.

2632 Mesilla Street, N.E.

Albuquerque, New Mexico 87110

Telephone: (505) 881-3191

Fax: (505) 881-4255

If to Tenant: SBS Technologies, Inc.

Attention: CFO

2400 Louisiana Blvd. NE

AFC Building 5, Suite 600

Albuquerque, NM 87110

Telephone: (505) 875-0600

Fax: (505) 875-0404

 

 

with a copy to: SBS Technologies, Inc.

Attention: General Counsel

2400 Louisiana Blvd. NE

AFC Building 5, Suite 600

Albuquerque, NM 87110

Telephone: (505) 875-0600

Fax: (505) 875-0404

After the Rent Commencement Date, notice to Tenant shall also be sent to the
Demised Premises.

(b) The person and place to which notice may be given may be changed from time
to time by Landlord or Tenant respectively upon written notice to the other,
effective five (5) days after delivery of such notice.

 

21. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT

The terms, agreements, covenants and conditions contained in the Lease are
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. This Lease constitutes the entire
understanding between the parties hereto and the parties shall not be bound by
any agreements, understandings or conditions respecting the subject matter
hereof other than those expressly set forth in this Lease.

22. ASSIGNMENT; SUBLETTING

Tenant and its assignees may assign this Lease or sublet a portion or portions
or all of the Property, with Landlord's written consent, which consent shall not
be unreasonably delayed, conditioned or withheld. Notwithstanding the foregoing,
no consent of Landlord shall be required for: (a) a sale of all of Tenant's
assets; (b) an assignment by Tenant to a related entity or an entity controlled
by the same principals that control the Tenant; (c) an assignment resulting from
a merger or consolidation or conversion of the Tenant's form of business entity
into another entity; and (d) a sale of substantially all of the stock (or other
equity interest) of the Tenant ("Permitted Transfer(s)"). Each assignee or
subtenant shall hold subject to all provisions of this Lease, and no assignment
or subletting shall release Tenant from the obligations of this Lease.

23. HOLDOVER

If Tenant shall, without the written consent of Landlord, hold over after the
expiration or earlier termination of this Lease, such tenancy shall be deemed a
month-to-month tenancy, which tenancy may be terminated as provided by
applicable governmental requirements. During such tenancy, Tenant agrees to (a)
pay to Landlord, each month, one hundred fifty percent (150%) of the Base Rent
for the last month of the Term and (b) be bound by all of the terms, covenants
and conditions herein specified, so far as applicable.

24. REMEDIES OF LANDLORD FOR DEFAULT

On the occurrence of any material default by Tenant, Landlord may at any time,
after written notice to Tenant of not less than ten (10) days for monetary
defaults and thirty (30) days for non-monetary defaults (or such longer period
of time as is reasonably necessary to cure such non- monetary default if the
same cannot be reasonably cured within said 30 days), if Tenant does not cure
said defaults, exercise any right or remedy which Landlord may have, including:

(a) Terminate Tenant's right to possession of the Demised Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Demised Premises to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid rent and other charges which have accrued at the time of
the termination; (ii) the worth at the time of the award of the amount by which
the unpaid rent and other charges which would have accrued after termination
until the time of the award exceeds the amount of such rental loss that could
have been reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid rent and other charges which would have been paid for
the balance of the term after the time of award exceeds the amount of such
rental loss that could have been reasonably avoided; and (iv) any other amount
reasonable and necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under the
terms of this Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, any costs or expenses incurred
by Landlord in maintaining or preserving the Demised Premises after such
default, the costs of recovering possession of the Demised Premises, expenses of
reletting, including necessary renovations or alterations of the Demised
Premises, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commissions paid or payable.

As used in sub-parts (i) and (ii) above, the "worth at the time of the award" is
computed by allowing interest on the unpaid amounts at the rate of Default
Interest per annum, or such lesser amount as may then be the maximum lawful
rate. As used in sub-part (iii) above, the "worth at the time of the award" is
computed by discounting such amount at the Default Interest Rate.. If Tenant
shall have abandoned the Demised Premises, Landlord shall have the option of (i)
retaking the possession of the Demised Premises and recovering from Tenant the
amounts specified in this Paragraph 24(a) or (ii) proceeding under Paragraph
24(b) hereinafter;

(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Demised
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Base
Rent and other charges as they become due hereunder. Notwithstanding anything to
the contrary stated in this Section (b) in no event shall Landlord be entitled
to accelerate any sums due under this Lease. If the rents and other sums
received from such reletting during any month are less than the Base Rent and
other sums to be paid during that month by Tenant hereunder, Tenant shall pay
any such deficiency to Landlord. Such deficiency shall be calculated and paid
monthly. At any time Landlord may elect to terminate Tenant's right to
possession and pursue the remedy provided for in subparagraph (a) above;

(c) Pursue any other remedy now or hereafter available to Landlord under the
laws or judicial decisions of the State of New Mexico.

(d) Notwithstanding the foregoing, Landlord shall use reasonable efforts to
mitigate its damages. In addition, notwithstanding the foregoing, Tenant shall
not be liable for any indirect or consequential damages suffered by Landlord.

(e) If Landlord shall from time to time fail to pay any sum or sums due to
Tenant and if such failure continues for thirty (30) days after receipt of
notice from Tenant, or if Landlord shall from time to time fail to perform any
act or acts required of Landlord by this Lease and if such failure continues for
thirty (30) days after receipt of notice from Tenant, Tenant shall then have the
right, in addition to such remedies as may be available under law or in equity,
at Tenant's option, to perform such act or acts, in such manner as Tenant deems
reasonably necessary, and the full amount of the cost and expense so incurred
shall immediately be owing by Landlord to Tenant, and Tenant shall have the
right and is hereby irrevocably authorized and directed to deduct such amount
from fixed rent and other sums due Landlord. If Landlord shall in good faith
within said thirty (30) days commence to correct such breach, and diligently
proceed therewith to completion, then Landlord shall not be considered in
default.

25. ATTORNEY'S FEES

The non-prevailing party in any judicial proceedings to enforce the provisions
of this Lease shall pay the reasonable attorney's fees and court costs of the
prevailing party. Tenant shall pay Landlord's reasonable attorney's fees related
to any notices or other collection action related to defaults by Tenant under
the terms of this Lease if Tenant fails to cure any such default beyond the
applicable cure period as herein provided.

26. SEVERABILITY

A determination by a court of competent jurisdiction that any provision of this
Lease or any part hereof, is illegal or unenforceable, shall not cancel or
invalidate the remainder of such provision or this Lease, which shall remain in
full force and effect.

27. CHOICE OF LAW

The laws of the State of New Mexico shall govern this Lease.

28. FORCE MAJEURE

If Landlord or Tenant cannot perform any of their respective obligations under
the terms of this Lease due to event(s) beyond their control, the time provided
for performance of such obligations shall be extended by a period of time equal
to the duration of such event(s). If either party to the Lease desires to invoke
the provisions of this Paragraph,

it shall provide written notice to the other party of the reasons for the delay
and the invoking party shall use best reasonable efforts to mitigate the effects
of such occurrence. Event(s) beyond Landlord's or Tenant's control include, but
are not limited to, acts of God, war, civil commotion, labor disputes, strikes,
fire, flood, or other casualty, government regulation or restriction and weather
conditions, but shall in no event include defaults due to Landlord's or Tenant's
failure to meet their respective monetary obligations hereunder.

29. LEVY

Landlord agrees that Landlord will not levy or distrain upon, or otherwise
proceed against, by legal process or otherwise, any of the goods or property of
third parties in the possession of Tenant.

30. HAZARDOUS MATERIALS

(a) Tenant hereby agrees that Tenant shall be responsible for and shall comply
with, at Tenant's sole cost and expense, all governmental requirements
concerning any hazardous or toxic substance, material, or waste (collectively
"Hazardous Materials") which is located at the Demised Premises or the Land, but
only if brought to or caused to be brought to the Property by the Tenant. Tenant
shall operate its business on the Demised Premises in compliance with all
applicable environmental laws and/or requirements. Tenant shall be permitted to
bring Hazardous Materials onto the Property which are used in the ordinary
course of Tenant's business operations so long as Tenant uses, stores, handles
and disposes such Hazardous materials brought onto the Demised Premises in
compliance with all applicable governmental requirements. Landlord agrees that
the use of such Hazardous Materials in the Demised Premises in the manner in
which such products are designed to be used and in full compliance with
governmental requirements shall not be a violation by Tenant of this Paragraph
30. Tenant shall indemnify and save harmless Landlord from all reasonable costs
and expenses incurred by Landlord to the extent caused by Tenant's breach of its
covenants made in this Paragraph 30.

(b) Landlord hereby represents to Tenant that, to the best of its actual
knowledge, the Demised Premises is free and clear of Hazardous Materials as of
the date hereof. Nothing herein is intended to make Tenant liable for any
condition existing in the Demised Premises as of the date hereof, nor any
condition which arises after the date hereof by reason other than Tenant's use
of the Demised Premises (the conditions for which Tenant is not liable pursuant
to this sentence are hereinafter referred to as the "Excluded Conditions").
Landlord shall, at its sole cost and expense, comply with governmental laws
and/or requirements pertaining to Hazardous Materials relating to the Excluded
Conditions. Landlord shall indemnify and save harmless Tenant from all
reasonable costs and expenses incurred by Tenant resulting from the Excluded
Conditions.

(c) For purposes of this Lease, the term "Hazardous Materials" shall mean any
substance, chemical, or waste that is or shall be listed or defined as
hazardous, toxic, or dangerous under Applicable Environmental Law, and any
petroleum products.

(d) For purposes of this Lease, the term "Applicable Environmental Law" shall
include the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), 42 U.S.C. Sec. 9601 et seq.; the Resource Conversation and Recovery
Act ("RCRA"), 42 U.S.C. Sec. 6901 et seq.; the Federal Water Pollution Control
Act, 33 U.S.C. Sec. 1251 et seq.; the Clean Air Act, 42 U.S.C. Sec. 7401 et
seq.; the Hazardous Substances Transportation Act, 49 U.S.C. Sec. 1471 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 through 2629; and the Safe
Drinking Water Act, 42 U.S.C. sec. 300f through 300J; as have been amended from
time to time; and any similar state and local laws and ordinances and the
regulations implementing such statutes.

31. RIGHT OF FIRST REFUSAL.

Provided Tenant is not then in default under the terms of this Lease beyond any
applicable grace or cure period, Landlord hereby grants to Tenant a right of
first refusal to purchase the Property, at any time during the Term of this
Lease, including any exercised Extension Term, Landlord shall receive a bona
fide offer from a third party to purchase the Property ("Bona Fide Offer").
Landlord shall provide written notice thereof, including a copy of the Bona Fide
Offer to Tenant and Tenant shall have ten (10) days after the receipt of said
notification to agree to purchase the Property on the same terms and conditions
as provided for in the Bona Fide Offer. If Tenant fails and refuses to exercise
the right of first refusal, Landlord shall have the right to sell the Property
to the third party pursuant to the terms of the Bona Fide Offer and this right
shall thereafter terminate. If Landlord does not close on the sale of the
Property to the third party under the terms and conditions provided for in the
Bona Fide Offer, the provisions of this Paragraph shall remain in full force and
effect and shall apply to any subsequent bona fide offer from a third party. In
the event Tenant exercises the option to purchase the Property pursuant to the
terms of the Bona Fide Offer, Landlord and Tenant shall execute a purchase
agreement reflecting the terms of the Bona Fide Offer. In no event shall this
right of first refusal apply to any conveyance by Landlord to a third party of
which Landlord is a principal or to a third party who is a member of Landlord.

32. LANDLORD'S LIEN

Nothing in this Lease shall be construed as a waiver of Landlord's lien rights
accorded under New Mexico law. With respect to any existing secured debt of
Tenant, Landlord agrees to execute any waivers of its Landlord's lien reasonably
required by Tenant or any of its lenders. Nothing in this paragraph shall
require Tenant to seek a waiver of Landlord's lien in association with Tenant's
purchase of inventory, equipment, or fixtures to be used at the Property; and
Landlord hereby subordinates its interest in such inventory, equipment and
fixtures to the lien or claim any lender financing such inventory, equipment and
fixtures purchased by Tenant in the ordinary course of its business.

33. INDEMNIFICATION

(a) Except to the extent of the negligent or intentional acts or omissions of
Tenant or Tenant's agents or invitees, Landlord agrees to indemnify and hold
Tenant, its shareholders, directors, officers, employees and agents and their
respective heirs, successors and assigns harmless from and against and with
respect to any claim, demand, action, cause of action, loss, cost, expense,
liability, injury, administrative order, consent agreement and order, penalty or
interest or damage, including, without limitation, reasonable attorneys' fees,
and all costs and expenses of all actions, suits, proceedings, demands,
assessments, claims and judgments resulting from, occurring in connection with,
or arising out of the negligent or intentional acts or omissions of Landlord,
its agents or invitees, or the use, occupancy or operation of the Property prior
to the Commencement Date, specifically including but in no way limited to any
violations of governmental requirements.

(b) Except to the extent of the negligent or intentional acts or omissions of
Landlord or Landlord's employees, agents or invitees, Tenant agrees to indemnify
and hold Landlord, its shareholders, directors, officers, employees and agents
and their respective heirs, successors and assigns harmless from and against and
with respect to any claim, demand, action, cause of action, loss, cost, expense,
liability, injury, administrative order, consent agreement and order, penalty or
interest or damage, including, without limitation, reasonable attorneys' fees,
and all costs and expenses of all actions, suits, proceedings, demands,
assessments, claims and judgments resulting from, occurring in connection with,
or arising out of the negligent or intentional acts or omissions of Tenant, its
employees, agents or invitees, or the use, occupancy or operation of the Demised
Premises by Tenant after the Commencement Date, specifically including but in no
way limited to any violations of governmental requirements.

(c) Limitation of Indemnities. No indemnities contained herein shall extend to
those matters for which indemnification is prohibited pursuant to Section 56-7-1
N.M.S.A. 1978, as amended.

34. COMMISSIONS

The parties acknowledge and agree that neither has utilized the services of a
real estate broker, other than Karen Hudson, Dave Hill and Jim Chynoweth,
Maestas & Ward Commercial Real Estate, who represents Landlord, and Austin Koon,
Corporate Realty Advisors and Scott Throckmorton of Argus Realty Investors, who
represent Tenant in this transaction. Landlord agrees to pay commissions to the
above-named brokers, and such payment is reflected in a separate agreement
between brokers and Landlord. Except as provided for herein, each party agrees
to indemnify and hold the other party harmless from all claims for real estate
commissions arising through said party. Angelo Brunacini, a principal in
Landlord, is a New Mexico licensed real estate broker dealing with his own
account in this transaction.

35. FINANCIAL STATEMENTS

Tenant agrees to deliver to Landlord, within ten (10) days following a request
by Landlord, copies of Tenant's financial statements, including a balance sheet
and profit and loss statement, for the two (2) most recent fiscal years of
Tenant, all in accordance with generally accepted accounting principles
consistently applied. Tenant's failure to deliver such financial statements
pursuant to this paragraph shall constitute a material default of Tenant under
this Lease. Landlord agrees to hold all financial statements of Tenant and
estoppel certificates executed by Tenant confidential and agrees to only
disclose said items to lenders or prospective lenders, purchasers or prospective
purchasers and Landlord's representatives, as reasonably necessary, provided
Landlord shall advise third parties of the requirement to maintain said records
as confidential. Notwithstanding the provisions of this paragraph to the
contrary, so long as Tenant is a publicly traded company, no financial
statements need to be provided by Tenant.

36. AMERICANS WITH DISABILITIES ACT

Landlord represents to Tenant that the Property, as of the Commencement Date,
will meet all City of Albuquerque Code requirements in regards to the Americans
with Disabilities Act.

37. POWER LINES

Prior to the Commencement Date, Landlord shall cause all of the overhead power
lines currently running through the Property to be reduced to a line of single
poles running north and south near the eastern boundary of the Property.

38. OTHER TENANTS

Landlord shall not lease property retained by Landlord to the north of the
Property to any tenants other than uses that are primarily office, or nicely
appointed office/warehouse and reasonably acceptable to Tenant, which acceptance
shall not be unreasonably withheld or delayed.

39

. COUNTERPARTS

This Lease may be executed in several counterparts and all so executed
counterparts shall constitute one agreement binding on all parties hereto,
notwithstanding that all of the parties are not signatories to the original or
same counterpart.

The parties hereto have carefully read and reviewed this Lease and each Term and
provision contained herein, and by the execution of this Lease show their
consent hereto.

 

SEE SEPARATE SIGNATURE PAGES ONE AND TWO ATTACHED HERETO AND MADE A PART HEREOF
BY REFERENCE.

 

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SIGNATURE PAGE ONE TO LEASE

DATED JULY 12 , 2004 BY AND BETWEEN

BRUNACINI DEVELOPMENT, LTD CO. , LANDLORD AND

SBS TECHNOLOGIES, INC., TENANT

 

 

 

LANDLORD:

BRUNACINI DEVELOPMENT, LTD. CO.,

a New Mexico limited liability company

By: /S/ Angelo Brunacini Date: July 13, 2004

Its: Member

 

 

 

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SIGNATURE PAGE TWO TO LEASE

DATED JULY 12 , 2004 BY AND BETWEEN

BRUNACINI DEVELOPMENT, LTD CO. , LANDLORD AND

SBS TECHNOLOGIES, INC., TENANT

 

 

TENANT:

SBS TECHNOLOGIES, INC.,

a New Mexico corporation

By: /S/ James E. Dixon Date: July 12, 2004

Its: CFO

 

 

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EXHIBIT "A"

Improvements

To Be Attached

 

 

 

 

 

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EXHIBIT "B"

 

Land

 

Approximately 4.73 acres on the southwesterly portion of Tract Lettered "A" of
JOURNAL CENTER PHASE 2, UNIT 2, Albuquerque, New Mexico, as the same is shown
and designated on the plat thereof filed in the office of the County Clerk of
Bernalillo County, New Mexico on April 10, 2003 in Map Book 2003C, Folio 98, as
shown on Site Plan (attached as Exhibit "A")

 

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EXHIBIT "C"

Acknowledgment of Commencement Date,

Square Footage,

Base Rent and Reimbursable Expenses

 

THIS ACKNOWLEDGMENT is entered into effective the ____ day of ________, 2004 by
and between BRUNACINI DEVELOPMENT, LTD. CO., a New Mexico limited liability
company ("Landlord") SBS TECHNOLOGIES, INC., a New Mexico corporation
("Tenant").

WHEREAS, Landlord and Tenant entered into a Lease dated ________, 2004 ("Lease")
involving the premises located at ____, Albuquerque, New Mexico; and

WHEREAS, the parties desire to establish the commencement date of the Lease.

NOW, THEREFORE, in consideration of the above and other good and valuable
consideration, the receipt of which is hereby acknowledged, IT IS AGREED AS
FOLLOWS:

All capitalized terms shall have the definitions set forth in the Lease, unless
otherwise defined herein.

The Commencement Date is hereby acknowledged to be ___________.

The initial Term of the Lease shall terminate on _________.

Tenant's Usable Area is ___________ square feet and the Building Usable Area is
__________ square feet.

Tenant's Pro Rata Share is 100%.

The parties acknowledge and agree that Base Rent for ______ has been waived, and
Tenant only owes, when due, its proportionate share of Reimbursable Expenses in
the amount of $_______ per month.

The parties further acknowledge and agree that Tenant has prepaid the Base Rent
for ___ in the amount of $___.

Except as herein modified and amended, the remaining terms and provisions of the
Lease shall remain in full force and effect.

 

IN WITNESS WHEREOF, the parties have hereunto set their hands effective the date
first hereinabove set forth.

LANDLORD:

TENANT:

By: _________________________________

By: _________________________________

Its: ___________________________

Its: ___________________________

 

--------------------------------------------------------------------------------

  EXHIBIT "D"

Landlord Improvements

To Be Attached

 

 

--------------------------------------------------------------------------------

EXHIBIT "E"

Contraction Area

To Be Attached

 

 

--------------------------------------------------------------------------------

EXHIBIT "F"

Expansion Area

 

To Be Attached

 

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EXHIBIT "G"

Landlord Financed Furniture

To Be Attached