Document:

SBS Technologies, Inc.

 

EXHIBIT 10.ad

AMENDMENT #1

     TO LEASE DATED September 15, 1997 BY AND BETWEEN Lutheran Brotherhood, a
Minnesota corporation, AS LESSOR AND Bit 3 Computer Corporation, a wholly owned
subsidiary of SBS Technologies, AS LESSEE

     THIS AMENDMENT TO LEASE, entered into and made as of the 23rd day of
December, 1997, by and between Lutheran Brotherhood, a Minnesota corporation,
as
Lessor and Bit 3 Computer Corporation, a wholly owned subsidiary of SBS
Technologies, as Lessee.

WITNESSETH:

     WHEREAS, Lessor and Lessee have heretofore entered into a certain lease,
dated September 5, 1997, (the “Lease”), of a certain space at Oakview Business
Center, Suite 200, 1284 Corporate Center Drive, Eagan, Minnesota (the
“Premises”), upon terms and conditions described in said Lease; and

     WHEREAS, Lessor and Lessee desire to amend said lease as described below:

     NOW THEREFORE, in consideration of the rents reserved and of the covenants
and agreements herein set forth, it is agreed that the Lease be hereby amended
from and after the date hereof as follows:

     1.     DEMISED PREMISES: Suite 200, the Demised Premises, consist of
approximately 39,576 square feet (14,803 square feet office and 24,773 square
feet of warehouse space.)

     2.     ADDITIONAL RENT: Lessee’s prorata share of additional rent as defined
in Article 3 of the Lease shall be changed to Forty Six and 23/100 percent
(46.23%) for real estate taxes and Twenty Five and 14/100 percent (25.14%) of
annual aggregate operating expenses.

     3.     TERM: Pursuant to the provisions of the Lease relating to commencement
of the Term thereof, Lessor and Lessee, for themselves, their heirs, successors
and assigns, intending to be legally bound hereby, agree and stipulate that the
original Term of said Lease shall commence February 1, 1998, and will expire
January 31, 2003.

     4.     RENT COMMENCEMENT: Lessee shall pay to Lessor its prorata share of
Additional Rent as defined in Article 3 of the Lease, commencing January 1,
1998
through and including the Lease expiration date. Base Rent shall commence
February 1, 1998.

 

 

     5.     RENT PAYMENT ADDRESS: The address within Article 4 of the Lease to
which Lessee shall send rent payment to Lessor shall be changed to Welsh
Companies, Inc., CM 3650, St. Paul, Minnesota 55170-3650.

     Except as is hereinabove set forth, all other terms, provisions and
covenants of the Lease shall remain unchanged and in full force and effect.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.

	 	 	 	 	 	 	 
	
LESSEE:
	 	LESSOR:
	 	 	 	 	 	 	 
	
BIT 3 COMPUTER CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
SBS TECHNOLOGIES INC.
(A NEW MEXICO CORPORATION)
	 	LUTHERAN BROTHERHOOD

(A MINNESOTA CORPORATION)
	 	 	 	 	 	 	 
	By:	 	
/s/ David Greig
	 	By:
	 	/s/ Clifford W. Habeck
	 	 	

	 	 	 	

	 	 	
David Greig
	 	 	 	Clifford W. Habeck
	 	 	 	 	 	 	 
	Its:	 	
President
	 	Its:
	 	Vice PresidentSBS Technologies, Inc.

 

EXHIBIT 10.bw

	 	 	 
	LEASE

STATE OF NORTH CAROLINA	 	
:
	 	 	 
	COUNTY OF WAKE	 	
:

THIS LEASE, made this the  2 day
of  October ,  2002 , by and
between:

	 	 	 
	Teal Properties LLC	 	
, having, a notice address of:
	
	 	 
	309 West Millbrook Road, Suite 101	 	 
	
	 	 
	Raleigh, NC 27609-4305	 	
, hereinafter called “Landlord", and
	
	 	 
	 	 	 
	 	 	 
	SBS Technologies, Inc.	 	
, having a notice address of:
	
	 	 
	2400 Louisiana Blvd.NE, AFC Bdlg #5, Suite 600	 	 
	
	 	 
	Albuquerque, NM 87110	 	
, hereinafter called “Tenant";
	
	 	 

W I T N E S S E T H :

Upon the terms and conditions hereinafter set forth, the Landlord leases to
Tenant and the Tenant leases from Landlord, the property hereinafter
described:

     1.     DEMISED PREMISES. The property hereby leased to Tenant (the “Demised
Premises”) is that area shown on Exhibit A hereto attached, which consists of
approximately 11,693 square feet, located at 6301 Chapel
Hill Road, Raleigh, North
Carolina, together with the common areas, if any, in the building(s) and on
the lot(s) where the Demised Premises are located (said building(s) and
lot(s), including the Demised Premises, being hereafter called the “Landlord
Property”) described on Exhibit A attached hereto.

     2.     TERM.

     2.1. Initial Term. The Commencement Date of this Lease shall
December 1, 2002. This Lease shall terminate (unless extended
as herein provided) at midnight on January 31, 2008.

     2.2. Option Periods. Tenant may, by written notice delivered to Landlord not
less than sixty (60) days, prior to the commencement of the applicable
extension period, extend this Lease for 1 additional periods
of 3 years each (a separate notice being required for each
extension period), upon the same terms and conditions as are set forth in this
Lease for the initial term, and at the rental rate or rates hereafter set
forth. Tenant’s right to extend this Lease is subject to the further condition
that no uncured Default (as hereafter defined in Section 15.) by Tenant shall
exist, either at the time Tenant’s notice of extension is given, or at the
commencement of the applicable extension period.

     2.3. Year. The initial term of this Lease and any properly exercised extension
periods are hereafter together called the “Lease Term”. The first “Calendar
Year” of this Lease shall begin on January 1 of the year of the Commencement
date, and end December 31 of that same year.

     3.     USE. Tenant shall occupy the Demised Premises on commencement of the Lease
Term and thereafter continuously use the Demised Premises only for
office, warehouse and manufacturing purposes, but for
none other without Landlord’s prior written consent. In no event shall Tenant
make any use of the Demised Premises which: (a.) violates any governmental
laws, rules or regulations; (b.) violates any recorded restrictive covenants
applicable to the Demised Premises; (c.) is or might constitute a nuisance;
or (d.) makes hazard, liability, casualty, property, or other required
insurance unavailable to Landlord on Landlord’s Property. Tenant shall not
permit its agents, employees, contractors, or invitees to place damaging loads
on the parking lots and drives located thereon.

     4.     RENT.

     4.1. Minimum Rent. For the purposes of this Lease, all Minimum Rent payable
under Sections 4. and 5. of this Lease and all Additional Rent payable under
Section 6. of this Lease are hereafter together called “Rent.” All Rent
payable by Tenant shall be paid without previous demand by Landlord, and
without setoff or deduction. Subject to any adjustments provided in Section
5. hereof, Tenant shall pay Minimum Rent during the Lease Term in the amount
of $7,551.73 per month, payable in advance on or before the first
day of each calendar month during the Lease Term, unless the Lease Term
commences other than on the first day of the month, in which event Minimum
Rent at the above rate prorated until the end of the first calendar month of
the Lease Term, shall be due and payable on the Commencement Date, and on the
first day of each month thereafter. except as noted in 28.D.8.

     4.2. Late Fees - Bad Check Fees. In addition to such remedies as may be
provided under Section 15. of this Lease, Landlord shall be entitled to a late
charge for each monthly Minimum Rent payment which is past due more than ten (
10) days, equal to the greater of FIFTY DOLLARS ($50.00) or five percent (5%)
of such past due Minimum Rent payment. In addition to said late charge,
Landlord shall be entitled to receive a service charge of five percent (5%) of
the amount of any rent check given by Tenant to Landlord which is not honored
when first presented for payment by Landlord.

     5.     [INTENTIONALLY OMITTED]

     6.     TICAM EXPENSES.

     6.1. Defined. For the purposes of this Lease, “TICAM Expenses” (Taxes,
Insurance, and Common Area Maintenance Expenses) shall mean and include: all
costs and expenses incurred by Landlord attributable to the ownership,
operation, maintenance, and management of the Landlord Property, including,
but not limited to, (a.) the cost during the Lease Term, as reasonably
amortized by Landlord, with interest on the unamortized amount at the rate of
ten percent (10%) per annum, of any capital improvements made to the Landlord
Property after the shell and core of the Landlord Property have been
substantially completed which are intended to keep the Landlord Property in
compliance with all governmental laws, ordinances, rules and regulations
applicable to the Landlord Property, and which laws, ordinances, rules, or
regulations where first enacted or amended, or were first
made applicable to the Landlord Property, after the Commencement Date; (b.)
all ad valorem taxes, (c.) hazard and liability in-surance premiums, (d.)
common area maintenance; and (e.) the following additional expenses (if none
put “None”)
exterior lighting, cold water, dumpster service, cardboard recycling, CAM
fixed to 2/2008 then increases capped at 5%.

     6.2. Tenant Prorata Share. Tenant agrees to pay to Landlord, as Additional
Rent, Tenant’s Proportionate Share of all TICAM Expenses. Tenant’s
Proportionate Share of TICAM Expenses shall be calculated by dividing the
square footage of the Demised Premises by the total net rentable square
footage of the Landlord Property (18,258.00 square feet). As of the date
hereof, Tenant’s Proportionate Share of TICAM Expenses is 64.04%.

 

 

     6.3. Monthly TICAM Expense Payment. Tenant shall pay to Landlord in advance
with each monthly Minimum Rent payment, a sum equal to $1,598.04 per
month. except as noted in 28.D.2. & 28.D.8.

     6.4. Annual Adjustment. Each option year of the Lease Term, within thirty (30)
days after delivery of a statement of the actual TICAM Expenses for the
Calendar Year just concluded, Tenant shall pay to Landlord the amount by which
such estimated TICAM Expenses payments are less than the actual TICAM Expenses
due from Tenant, and Landlord shall likewise refund any excess of estimated
TICAM Expenses payments over actual TICAM Expenses within said thirty (30) day
period. See 28.D.2.

     7.     UTILITIES. Tenant shall promptly pay all charges for utilities serving the
Demised Premises, including, without limitation, electricity, telephone, gas,
water, and sewer. In the event any utilities are not separately metered for
Tenant, Tenant shall pay its proper prorata portion of such utilities in
common with others using off the same meter.

     8.     TENANT’S ACCEPTANCE AND MAINTENANCE OF DEMISED PREMISES

     8.1. “As-Is” Condition. Except for Punch List items described in any
Attachment appended hereto, Tenant’s occupancy of the Demised Premises
represents to the Landlord that Tenant has examined and inspected the same,
finds them to be as represented by the Landlord, and satisfactory for Tenant’s
intended use; and evidences Tenant’s acceptance of the Demised Premises in all
respects “AS IS” and “WHERE IS”. except as noted in 28.C.

     8.2. Landlord Maintenance. Landlord’s only obligations with respect to the
repair and maintenance of the Demised Premises under this Section shall be:
(a.) for repairs necessitated by structural defects in the original
construction of the Landlord Property, or by the negligence or willful acts of
Landlord or another tenant of the Landlord Property, or any of their agents,
employees, invitees, or contractors; (b.) to assign all warranties and use
reasonable best efforts to assist Tenant in enforcing any and all warranties
provided by any contractor, subcontractor, mechanic or materialmen with
respect to the Demised Premises; (c.) for maintenance, upkeep and repair of
the roof and structural portions of the Demised Premises (plate glass and
doors of every description); (d.) for repairs of all paved areas, including,
without limitation, all driveways, curbs and parking areas. see 28.D.7. for
additional Landlord maintenance items

     8.3. Tenant Maintenance. Tenant shall take good care of the Demised Premises
and the Landlord’s personal property, fixtures, and appurtenances therein and
thereon during the Lease Term, and shall perform all maintenance and make all
repairs to the Demised Premises thereon necessary to keep the same in good
order and condition, excepting only (a.) Landlord’s obligations set forth
above; (b.) ordinary wear and tear; (c.) loss or damage resulting from fire,
casualty or condemnation.

     8.4. Maintenance Contracts. Landlord during the entire Lease Term shall enter
into and maintain, at its expense, a maintenance contract covering the HVAC
system located in or serving exclusively the Demised Premises with a service
contractor acceptable to Tenant, which contract shall provide for routine
maintenance, including, but not limited to, timely changing of all filters (at
recommended intervals), adjustment and inspection of air handling mechanisms
and control equipment, performance of necessary lubrication, and testing and
other such normal maintenance procedures.

     8.5. Tenant’s Liability. Subject to the provisions of Section 9.7. hereof, all
damage or injury to the Demised Premises or the remainder of the Landlord
Property caused by any willful act or negligence of Tenant, its agents,
employees, licensees, contractors, invitees or visitors, shall be repaired by
Landlord at Tenant’s sole expense, and Tenant shall reimburse Landlord for all
costs and expenses thus incurred by Landlord within thirty (30) days after
receipt of invoice from Landlord.

     8.6. Tenant Alterations and Trade Fixtures. Tenant shall not make any
alterations or changes (See 28.D.9.) to the Demised Premises without
Landlord’s prior written consent. Tenant shall be permitted to install trade
fixtures in the Demised Premises, and. absent a Default by Tenant hereunder,
to remove said trade fixtures from the Demised Premises upon the termination
of this Lease. If Tenant does remove such trade fixtures, Tenant shall return
the Demised Premises to the same condition as existed at the time of original
entry, ordinary wear and tear excepted. Provided, however, Tenant shall not
remove permanent improvements made by Tenant to the Demised Premises; and all
such improvements shall belong to Landlord at the termination of this Lease,
and shall not be damaged in the removal of Tenant’s trade fixtures. If Tenant
does not remove the trade fixtures at the end of the Lease Term, Landlord
shall have the option either to declare such fixtures abandoned and Landlord
the owner thereof, or to demand that Tenant promptly remove the same at
Tenant’s expense, returning the Demised Premises to the condition required
herein. see 28.D.9.

     8.7. Licensed Contractors. Tenant shall not permit any work to be performed
anywhere within the Landlord Property except by duly licensed contractors,
each of whom must carry adequate general public liability, builder’s risk, and
workman’s compensation insurance, certificates of which shall be furnished
Landlord prior to the commencement of any such work on the Landlord Property.
At no time may Tenant do any work that results in a claim of lien against
Tenant’s or Landlord’s interest in the Demised Premises, and Tenant shall
release of record from the Landlord Property under N.C.G.S. 44A- 16 any lien
so filed, within thirty (30) days after actual notice of such lien has been
filed.

     8.8. No Dangerous Condition. Tenant shall not permit or allow any act or
deed to be performed on the Demised Premises which is likely to cause injury
to any person or to the Landlord Property. Tenant shall, at all times, keep
the Demised Premises and the entryways, parking areas, sidewalks and delivery
areas (if any) adjoining the Demised Premises in a clean, neat, and orderly
condition and free from rubbish, dirt, snow, standing water and ice.
8.9. Access by Landlord. Landlord shall have the right, either itself or
through its authorized agents, to enter the Demised Premises at all reasonable
times to examine the same, to show them to prospective tenants for other spaces
in the Landlord Property or for the Demised Premises, to allow inspection by
mortgagees, and to make such repairs, alterations, or changes as Landlord deems
necessary. and upon reasonable notice & minimal disturbance to Tenant’s
business operation

     9.     INDEMNIFICATION AND INSURANCE.

     9.1. Liability Insurance. Subject to the terms of Section 9.7. hereof, Tenant
shall indemnify Landlord and save Landlord harmless from and against all
claims, actions, damages, liability and expenses in connection with loss of
life, bodily injury, and damage to property occurring in or about the Demised
Premises, occasioned wholly or in part by any intentional or negligent act or
omission of Tenant, its agents, licensees, contractors, customers, invitees or
employees. Tenant shall, at all times, maintain in effect a comprehensive
general public liability policy applicable to the Demised Premises through an
insurance company approved by Landlord, with combined single limits of
liability of at least ONE MILLION AND 00/100 DOLLARS ($l,000,000.00). Such
policy shall show Landlord and Landlord’s Managing Agent, if any, as additional
insureds, and a duplicate original or a certified copy of such policy and
evidence of payment of premiums thereon shall be furnished to Landlord on or
before the Commencement Date, and at all other times requested by Landlord, but
not more often than twice annually, unless Tenant shall be in Default under
this Lease. At least fifteen (15) days prior to the expiration or termination
date of such policy, Tenant shall deliver to Landlord a renewal certificate or
replacement policy with proof of payment of twelve months’ premium thereon in
advance.

     9.2. [INTENTIONALLY OMITTED]

     9.3. Tenant’s Property and Insurance Thereon. Tenant shall properly maintain
and care for its property on the Demised Premises, and shall also carry, at
Tenant’s expense, hazard insurance with extended coverage, insuring against
loss or damage to Tenant’s property situated in or about the Demised Premises
to the full reasonable insurable value thereof with insurers acceptable to
Landlord.

     9.4. Thirty (30) Day Notice. All policies of insurance to be maintained by
Tenant under this Lease shall provide that: (a.) they may not be cancelled
except upon not less than thirty (30) days’ prior written notice to Landlord
and any mortgagee of Landlord of

-2-

 

which such insurer has actual notice; and (b.) coverage may not be denied
thereunder, nor may the amount payable thereunder be diminished, by any
negligent act or omission of Landlord or Tenant, or their successors or
assigns.

     9.5. Landlord’s Insurance. Landlord shall maintain during the Lease Term a
Commercial Package Policy of casualty insurance (or the successor to such
coverage) on Landlord’s interest in the Landlord Property for the full
replacement cost of the Landlord Property, and with agreed amount and inflation
cost endorsements; provided, however, Landlord shall not be obligated to insure
any furniture, equipment or other personal property placed in the Demised
Premises by or at the expense of Tenant.

     9.6. Tenant Increases Landlord’s Insurance. If, because of anything done,
caused to be done, permitted, or omitted by Tenant, the premium rate for any
casualty insurance maintained by Landlord shall be raised, Tenant agrees that
the amount of the increase in premium for insurance maintained by Landlord
shall be paid by Tenant to Landlord within thirty (30) days after receipt of
written demand from Landlord, and shall be in addition to all other payments to
be made by Tenant under this Lease. In addition, if Landlord shall demand that
Tenant remedy the condition which caused the increase in the insurance premium
rate, Tenant shall remedy such condition within thirty (30) days after receipt
of written demand from Landlord.

     9.7. Mutual Waiver of Subrogation. Each party waives all claims arising in any
manner in its (the Injured Party’s) favor and against the other party for loss
or damage to the Injured Party’s property located within or constituting a part
or all of the Landlord Property. This waiver applies to the extent the loss or
damage is covered by: (a.) the Injured Party’s insurance; or (b.) the
insurance the Injured Party is required to carry under this Lease, whichever is
greater. This waiver also applies to each party’s directors, officers,
employees, shareholders, partners, and agents, but does not apply to claims
caused by Landlord’s, Tenant’s, or such other parties’ willful misconduct. All
policies of insurance maintained by either Landlord or Tenant under the terms
of this Lease shall contain a provision whereby the insurer waives all rights
of subrogation against Landlord or Tenant.

     10.     CASUALTY LOSS.

     10.1. Landlord’s duty to restore. If the Demised Premises shall be partially
damaged by fire or other casualty insured under insurance policies which
Landlord maintains under this Lease (“Landlord’s Policies”), and if Landlord’s
lender(s) shall permit such insurance proceeds to be so used, then, upon
Landlord’s receipt of the insurance proceeds, Landlord shall, except as
otherwise provided herein, promptly repair and restore the same (exclusive of
Tenant’s property) substantially to the condition thereof existing immedi-ately
prior to such damage or destruction; limited, however, to the extent of the
insurance proceeds received by Landlord for such casualty. If, by reason of
such occurrence: (a.) the Demised Premises is rendered wholly untenantable;
(b.) the Demised Premises is damaged in whole or in part as a result of a risk
which is not covered by Landlord’s Policies; (c.) Landlord’s lender(s) shall
not permit a sufficient amount of the insurance proceeds to be used for
restoration purposes; (d.) the Demised Premises is damaged in whole or in part
during the final Lease Year of the Lease Term (including any then properly
exercised extension periods); or (e.) the im-provements included in the
Landlord Property are damaged (whether or not the Demised Premises is damaged)
to an extent of fifty percent (50) or more of their then fair market value;
Landlord may elect either to repair the damage, or to cancel this Lease by
written notice of cancellation given to Tenant within sixty (60) days after the
date of such casualty; and thereupon this Lease shall terminate, effective as
of the date of the casualty and Tenant shall vacate and surrender the Demised
Premises to Landlord within thirty (30) days after receipt of such notice. If
no such notice is given by Landlord within said sixty (60) day period, then
Landlord shall restore the Demised Premises, as provided above. In addition,
Tenant may also terminate this Lease, by written notice to Landlord at any time
between the one hundred eighty-first (181st) and one hundred ninety-fifth
(195th) days after the occurrence of any such casualty, if Landlord shall fail
to restore the damaged portions of the Demised Premises within one hundred
eighty (180) days after such casualty. However, if Landlord is prevented by any
cause beyond its reasonable control, from completing the restoration within
said one hundred eighty (180) day period, and if Landlord shall provide Tenant
with written notice of such cause for delay within thirty (30) days after the
occurrence thereof, then Landlord shall have an additional period beyond said
one hundred eighty (180) days, equal to the period Landlord is delayed by
causes beyond its reasonable control, in which to restore the damaged areas of
the Demised Premises; and Tenant may not elect to terminate this Lease until
said additional period has expired with Landlord having failed to complete such
restoration. In such case, Tenant’s fifteen (15) day right of termination shall
begin to run upon the expiration of Landlord’s additional period for
restoration. Upon the termination of this Lease, Tenant’s liability for the
Rent and other charges reserved hereunder shall cease as of the effective date
of the termination of this Lease.

     10.2. Tenant’s Insurance. Unless this Lease is terminated as aforesaid, Tenant
shall promptly repair or replace Tenant’s property in the Demised Premises to
at least the condition which existed prior to the casualty to the Demised
Premises, and the proceeds of all insurance carried by Tenant on its said
property shall be held and disbursed for the purposes of such repair or
replacement, to the extent required for such purposes.

     10.3. Rent Abatement. Except as hereafter provided to the contrary, if by
reason of such casualty the Demised Premises is rendered wholly unusable by
Tenant, the Rent and other charges payable by Tenant shall be fully abated, or
if only partially damaged, such Rent and other charges shall be abated
proportionately as to that portion of the Demised Premises rendered unusable
by Tenant, in either event (unless the Lease is terminated, as aforesaid) from
the date of such casualty until thirty (30) days after notice by Landlord to
Tenant that the Demised Premises have been substantially restored, or until
Tenant has resumed its business operations in the Demised Premises, whichever
shall occur sooner. Provided, however, and subject to the terms of Section
9.7. hereof, Tenant shall reimburse Landlord, within thirty (30) days after
the completion of such restoration, for the full cost of such restoration if
any such damage or casualty shall be caused by the negligence or other
wrongful act or negligent omission of Tenant, or of Tenant’s subtenants,
concessionaires, licensees, contractors, employees, agents, or invitees, and
there shall be no abatement of Rent or other charges which are Tenant’s
obligation under this Lease, except to the extent that such damages are
covered by insurance policies of Tenant or 3rd party. Except for the abatement
of the Rent and other charges hereinabove set forth, Tenant shall not be
entitled to, and hereby waives, all claims against Landlord for any
compensation or damage for loss of use of the whole or any part of the Demised
Premises, and for any inconvenience or annoyance occasioned by any such
damage, destruction, repair, or restoration.

     11.     ENVIRONMENTAL COMPLIANCE.

     11.1. Tenant’s Responsibility. Tenant covenants and agrees that the Demised
Premises will, at all times during its use or occupancy thereof, be kept and
maintained so as to comply with all now existing or hereafter enacted or issued
statutes, laws, rules, ordinances, orders, permits, and regulations of all
state, federal, local, and other governmental and regulatory authorities,
agencies, and bodies applicable to the Demised Premises pertaining to
environmental matters, or regulating, prohibiting or otherwise having to do
with asbestos, radon, PCB’s and all other toxic, radioactive, or hazardous
wastes or materials, including, but not limited to, the Federal Clean Air Act,
the Federal Water Pollution Control Act, and the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as from time to time amended
(all hereafter collectively called “Laws”). No material shall be installed
anywhere else within the Landlord’s Property, by Tenant, or any employee,
agent, or contractor of Tenant, which contains any asbestos or other toxic or
hazardous waste or substance; or which causes, or could cause all or any of
Landlord Property to be in violation of any Laws: (a.) when such material is
installed; (b.) while such material remains thereon; or (c.) when such material
is disturbed or removed.

     11.2. Tenant’s Liability. Tenant shall hold Landlord free, harmless, and
indemnified from any penalty, fine, claim, demand, liability, cost, or charge
whatsoever which Landlord does or may incur by reason of Tenant’s failure to
comply with this Section; including, but not limited to: (a.) the cost of
bringing the Landlord’s Property into compliance with all Laws; (b.) the
reasonable cost of all appropriate tests and examinations of the Landlord
Property to confirm that the same has been brought into compliance with all
Laws; and (c.) the reasonable fees and expenses of Landlord’s attorneys,
engineers, and consultants incurred by Landlord in enforcing and confirming
compliance with this Section.

-3-

 

     11.3. Inspections by Landlord. Landlord and its engineers, technicians, and
consultants (collectively the “Auditors”) may, from time to time as Landlord
deems appropriate, upon reasonable notice conduct periodic tests and
examinations (“Audits”) of the Demised Premises to confirm and monitor Tenant’s
compliance with this Section. Such Audits shall be conducted in such manner as
to minimize the interference with Tenant’s permitted activities on the Demised
Premises; however, in all cases, the Audits shall be of such nature and scope
as shall be reasonably required by then existing technology to confirm Tenant’s
compliance with this Section. Tenant shall fully cooperate with the Auditors in
the conduct of such Audits. The cost of such Audits shall be paid by Landlord
unless a Default has occurred under this Lease, or unless an Audit shall
disclose a material failure of Tenant to comply with this Section, in either of
which cases the cost of such Audit, and the cost of all subsequent Audits made
during the Lease Term and within thirty (30) days thereafter (not to exceed two
[2] such Audits in any consecutive twelve [12] month period), shall be paid for
by Tenant within thirty (30) days of receipt by Tenant of invoices for such
audits.

     11.4. Limitation on Tenant Liability. Provided, however, the foregoing
covenants and undertakings of Tenant contained in this Section shall not apply
to any condition or matter constituting a violation of any Law: (a.) which
existed prior to the commencement of Tenant’s use or occupancy of any portion
of the Demised Premises, and was not caused, in whole or in part, by Tenant or
Tenant’s agents, employees, officers, partners, contractors, or invitees; or
(b.) to the extent such violation is caused by, or results from, the acts or
neglects of Landlord, other tenants in the Landlord Property, or Landlord’s or
such other tenants’ employees, officers, partners, contractors, guests or
invitees.

     11.5. Tenant’s Liability After Termination of Lease. The covenants contained in
this Section shall survive the expiration or termination of this Lease, and
shall continue for so long as Landlord, or its successors and assigns, may be
subject to any expense, liability, charge, penalty, or obligation against which
Tenant has agreed to indemnify Landlord under this Section.

     12.     RULES AND REGULATIONS. Tenant shall comply with all applicable laws,
ordinances and regulations affecting the Demised Premises, and reasonable
general rules and regulations for tenants of the Landlord Property as may be
developed from time to time by Landlord and delivered to Tenant.

     13.     SUBORDINATION — ATTORNMENT. This Lease shall be subordinate to any mortgage
or deed of trust (both hereafter a “Mortgage”) which may heretofore or
hereafter be placed against the Demised Premises by Landlord, unless the
mortgagee or beneficiary thereunder (both hereafter a “mortgagee”) requests
that this Lease be superior to its Mortgage, in which event this Lease shall be
superior. In the event any proceedings are brought for foreclosure of any
Mortgage on the Demised Premises, Tenant will attorn to the purchaser at a
foreclosure sale, and any assignee thereof, and recognize such purchaser or
assignee as Landlord under this Lease provided such purchaser or assignee
agrees not to disturb Tenant’s possession or rights under this Lease or in the
Demised Premises, so long as Tenant is not in Default under the terms of this
Lease. Tenant shall execute, within five (5) days after Landlord’s request,
such instruments evidencing such attornment and subordination of this Lease and
related matters including non-disturbance as Landlord or its mortgagee shall
request reasonably; and, as often as requested, shall sign estoppel
certificates confirming any factual matter requested which is true and is
within Tenant’s knowledge regarding this Lease, the Demised Premises, or
Tenant’s use thereof. Tenant agrees to give any such mortgagee of whom Tenant
has been informed written notice of any Default or failure to perform by
Landlord under this Lease. Such mortgagee shall have a reasonable period of
time after such notice, in all events at least thirty (30) days, to cure any
Default; and Tenant shall accept such cure if timely made by such mortgagee.
Further, Tenant agrees to permit any such mortgagee, purchaser, or their
successors and assigns, on acquiring Landlord’s interest in the Demised
Premises or the Lease, to become substitute Landlord hereunder, with liability
only for such Landlord obligations under this Lease as accrue after Landlord’s
interest is so acquired. see also 28.E.

     14.     SIGNS. Tenant may not erect, install or display any sign or advertising
material upon the Landlord Property without the prior written consent of
Landlord.

     15.     DEFAULT.

     15.1. Remedies. If Tenant fails to pay any Rent or other sums payable by Tenant
as provided in this Lease within ten (10) days after the receipt of written
notice thereof; or breaches any other agreement or obligation herein set forth,
and fails to cure such breach within twenty (20) days after delivery of written
notice thereof from Landlord; then a “Default” by Tenant shall have occurred
under this Lease, and, in addition to any other legal right or remedy which
Landlord may have for such Default, Landlord may, at its sole election and
without further notice to Tenant, exercise one or more or all of the following
remedies:

     (a.) Re-enter the Demised Premises and correct or repair any condition
which shall constitute a failure on Tenant’s part to perform or abide by the
terms of this Lease, and Tenant shall reimburse Landlord within fifteen (15)
days of receipt of invoice by Tenant for any expenditures made by Landlord in
making such corrections or repairs;

     (b.) Re-enter the Demised Premises and remove therefrom Tenant and all
Tenant property, and place or store such Tenant property in any public
warehouse or place of safekeeping selected by Landlord, at the sole expense and
risk of Tenant, all of which property Tenant shall be deemed to have abandoned
and forfeited to Landlord if Tenant shall not claim and remove such property
and pay all reasonable storage charges applicable thereto within thirty (30)
days after delivery of written notice to remove from Landlord;

     (c.) Re-let the Demised Premises or any part thereof for such periods, and
at such rentals and other terms and conditions as Landlord, in its sole
discretion, may deem advisable, and Landlord may make alterations or repairs to
the Demised Premises which it may deem necessary or appropriate to facilitate
such re-letting; and Tenant shall pay on demand all costs of such re-letting
including the cost of any such repairs to the Demised Premises. If this Lease
shall not have been terminated, Tenant shall continue to pay all Rent due under
this Lease up to and including the date of beginning of payment of rent by any
subsequent tenant of part or all of the Demised Premises, and thereafter Tenant
shall pay monthly during the remainder of the Lease Term the difference, if
any, between the rent collected from any such subsequent tenant or tenants and
the Rent reserved in this Lease, but Tenant shall not be entitled to receive
any excess of any such rents collected over the Rents reserved herein; or

     (d.) Terminate this Lease, which termination shall be effected by delivery
to Tenant of written notice of such termination; and upon such termination,
Landlord shall recover from Tenant all damages Landlord may suffer by reason of
such termination, including, without limitation, the cost, including legal
expenses and reasonable attorneys’ fees, of recovering possession of the
Demised Premises, and the cost of any repairs to the Demised Premises which are
reasonably necessary to prepare the same for reletting.

     15.2. No Waiver of Rights. No course of dealing between Landlord and Tenant, or
any delay on the part of Landlord in exercising any rights it may have under
this Lease, shall operate as a waiver of any of the rights of Landlord
hereunder, nor shall any waiver of a prior Default operate as a waiver of any
subsequent Default or Defaults, and no express waiver shall affect any
condition, covenant, rule or regulation other than the one specified in such
waiver, and that one only for the time and in the manner specifically stated.

     15.3. Remedies are Cumulative. The exercise by Landlord of any one or more of
the remedies provided in this Lease shall not prevent the subsequent exercise
by Landlord of any one or more of the other remedies herein provided. All
remedies provided for in this Lease are cumulative, and may, at the election of
Landlord, be exercised alternatively, successively, or in any other manner, and
are in addition to any other rights provided by law.

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     15.4. Written Termination. No exercise of any right or remedy by Landlord under
this Lease shall effect a termination thereof unless Landlord shall elect to
terminate this Lease by written notice to Tenant; provided, however, this Lease
shall be deemed terminated upon delivery of such notice of termination.

     15.5. Attorney’s Fees. Tenant shall be liable to Landlord for all reasonable
attorney’s fees and expenses incurred by Landlord in enforcing all rights and
remedies afforded to Landlord under this Lease.

     16.     QUIET ENJOYMENT. If Tenant promptly complies with all of its obligations
hereunder, within applicable grace or cure periods it shall peacefully have
possession of the Demised Premises during the Lease Term. In addition, Landlord
shall not be liable to Tenant for injury or damage resulting from acts or
omissions of parties other than Landlord occupying or using any part of the
remainder of the Landlord Property.

     17.     CONDEMNATION. If the whole or at least twenty percent (20%) of the Demised
Premises are taken by any governmental body, whether by Court action or by
settlement in lieu thereof, and if the property so taken renders the remainder
of the Demised Premises unfit for the use thereof by Tenant, then Tenant shall
have the option to terminate this Lease by written notice to Landlord within
sixty (60) days of such taking. If the Tenant shall not elect to terminate, or
if the taking does not include at least twenty percent (20%) of the Demised
Premises, there shall be an adjustment of the Rent reflecting, on a pro rata
basis, any reduction in Tenant’s leased space. All of the condemnation award,
except for damage to or the taking of Tenant’s property and Tenant’s relocation
award, if any, shall be the exclusive property of Landlord.

     18.     NO TERMINATION BY SALE. No transfer or assignment of Landlord’s interest in
the Demised Premises of this Lease shall terminate this Lease, or modify or
amend the terms hereof, unless Tenant shall agree thereto in writing. The term
“Landlord” as used in this Lease means only the owner of the fee title to the
Landlord Property. The current Landlord, upon any transfer or conveyance of its
interest in the Demised Premises, shall be entirely freed and relieved of all
covenants and obligations of the Landlord hereunder, provided that the
transferee of Landlord’s interest in the Landlord Property has assumed and
agreed to carry out any and all covenants and obligations of Landlord
hereunder.

     19.     NO PERSONAL LIABILITY. The liability of Landlord and any partners, agents,
employees, stockholders, officers, or directors of Landlord shall be limited to
Landlord’s interest in the Landlord Property. No other assets of Landlord or
any such other party shall be liable for, or subject to, any liabilities
pertaining to this Lease.

     20.     HOLDING OVER. This Lease shall automatically terminate on the last day of
the Lease Term without the requirement of notice from either party. Provided,
however, if Tenant shall continue to occupy the Demised Premises after the last
day of the Lease Term with the prior written approval of Landlord, such
occupancy shall be on a month to month basis, and shall otherwise be upon the
same terms and conditions as herein set forth, except that either party may
terminate such month to month tenancy upon 30 days prior written notice to the
other party.

     21.     TENANT’S ASSIGNMENT — SUBLEASE. Tenant shall not transfer, mortgage,
encumber, assign, or sublease all or any part of the Demised Premises, or a
controlling or majority interest in the stock or partnership interests of
Tenant, or any partner of Tenant, without Landlord’s prior written consent,
which shall not be unreasonably withheld. see 28.D.4.

     22.     MISCELLANEOUS. (a.) This Lease shall be binding upon the respective parties
hereto, and upon their heirs, executors, successors and assigns. (b.) This
Lease supersedes and cancels all prior negotiations between the parties, and
all changes in this Lease shall be in writing and signed by the party affected
by such change. (c.) The singular shall include the plural, and the masculine
or neuter includes the other. (d.) Each party hereto which is a corporation or
partnership (hereafter an “Organization”) warrants and represents to the other
party hereto that the Organization, and any of its partners or constituent
members which are partnerships or corporations, are each valid and existing
legal entities, in good standing and duly authorized to transact business in
North Carolina, and, if different, their states of organization; and that all
persons executing this Lease on behalf of an Organization, or any partner or
constituent member thereof, have been duly authorized to do so. Further, the
execution of this Lease has been duly authorized by all appropriate action of
each Organization. (e.) The Demised Premises are leased subject to all recorded
easements, restrictions, and rights of way legally affecting the same.

     23.     RECORDING. This Lease shall not be recorded, but, at the request of either
party and at such party’s expense, a memorandum hereof, containing such
information as is necessary to provide adequate record notice of the existence
of the Lease and the terms hereof, including whether options to renew or
purchase exist, shall be prepared and recorded in the county where the Demised
Premises are located.

     24.     NOTICES. Any notices which Landlord or Tenant is required or desires to be
given to the other shall be deemed sufficiently given or rendered if in writing
and delivered personally, or sent by certified or registered mail, postage or
fees prepaid, to the address listed for such party at the beginning of the
Lease, or to such other address as the intended recipient shall have previously
provided to the sender by like notice. All such notices or other communications
shall be deemed delivered, given, and received on the earlier of: (a.) the date
of actual delivery; or (b.) refusal to accept delivery.

     25.     COMMISSIONS.

     25.1. Initial Term. No commission shall be payable by Tenant in connection with
this Lease. Landlord shall pay to Carolantic Realty, Inc., within ten (10) days
after the receipt of each month’s rent, a commission of 2.0% of the Minimum
Rent payable for the initial term of the Lease.
25.2. Option Periods. As above, during each exercised extension period,
Landlord shall pay to Carolantic Realty, Inc. a commission of two percent (2%)
of the Minimum Rent payable for such extension period.

     26.     SECURITY DEPOSIT. Landlord acknowledges receipt from Tenant of the sum of $
0.00.

     27.     PAYMENTS.
All Rent and other charges (which total $9,149.77 per
month as of the first full regular month’s payment called for in this lease)
shall be payable by Tenant to and addressed to:

	 	 
	Teal Properties LLC	 
	
	 
	309 West Millbrook Road, Suite 101	 
	
	 
	Raleigh, NC
27609-4305	 
	

        	 

	
	, or to such other payee and such other address as Landlord shall designate by prior written notice to Tenant.

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     28.     OTHER PROVISIONS. The following additional provisions are attached hereto
and by this reference made a part hereof (if none, insert “None” in the blank
space which follows):

28.A. Co-Broker Commission: No commission shall be payable by Tenant in
connection with this
Lease. Landlord shall pay to Corporate Realty Advisors, within ten (10) days
after commencement, a commission of 4.0% of the Minimum Rent due for the
initial term of the lease. Landlord shall pay to Corporate Realty Advisors, if
it is actively involved in the exercise, within ten (10) days after
commencement of any exercised Option Period or expansion, a commission of 4.0%
of the Minimum Rent due for the term of the exercised Option Period or
expansion space.

28.C. At its sole expense, Landlord shall make the following improvements prior
to December 15, 2002: 1.) Fix foundation sag, 2.) Fix or replace weather
stripping on all exterior doors, 3.) repair front door where it scrapes, 4.)
replace defective heater, 5.) repair sheetrock tears in corners, 6.) paint the
premises, 7.) repair all damaged ceiling tiles, 8.) strip and wax non-ESD area
floors, 9.) recarpet the premises, 10.) repair all roof leaks, 11.) install new
sign to read “SBS Technologies”.

28.D.1. Landlord shall notify Tenant in writing of the size, location, and
rental rates of all spaces that become available for lease in the building.
Tenant shall have 30 days after being informed of the available space, to
notify the Landlord in writing of its intent to lease the available space at
those terms, or waive its opportunity to lease that space until the next time
it becomes available.

2.     The TICAM charge may be increased during the term of the lease only by the
amount that Taxes and Insurance costs for the building have increased above
those paid in 2002. The CAM charge shall not increase by more than 5.0% in any
one lease renewal year.

3.     The Tenant may terminate this lease on November 30, 2005 by giving 120 days
prior written notice to the Landlord and paying $20,000 to the Landlord.

4.     Tenant shall have the right to assign this lease to any entity controlling,
controlled by or under common control with Tenant or which acquires
substantially all assets of Tenant in Raleigh, NC.

5.     Landlord waives all lien rights to Tenant’s equipment, trade fixtures,
furniture and other personal property.

6.     Tenant shall have the exclusive right to use the roof above its premises for
antennas, dishes, and the like.

7.     Landlord, at its sole expense, shall maintain repair and replace, as
required, the water heater, electrical systems, mechanical systems, plate
glass, doors, rear deck, and plumbing systems in the Demised Premises. Landlord
shall not take any action that will interrupt utility services to the premises,
except to as required for repairs or changes in the service to the Tenant.

See attached Exhibit B for additional conditions

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly
executed in duplicate originals, all as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:	 	 
	(By:) Signature:	 	
/s/ JAMES E. DIXON, JR
	 	(SEAL)
	 	(By:) Signature:
	 	/s/ JACOB A. WILLIAMSON, SR
	 	(SEAL)
	 	 	

	 	 	 	 	 	
	 	 
	(By:) Signature:	 	
James E. Dixon, Jr.
	 	(SEAL)
	 	(By:) Signature:
	 	Jacob A. Williamson, Sr.
	 	(SEAL)
	 	 	

	 	 	 	 	 	
	 	 
	Printed Name:	 	SBS Technologies, Inc.	 	 	 	Printed Name:	 	Teal Properties LLC	 	 
	 	 	

	 	 	 	 	 	
	 	 

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Exhibit A

[Sketch of Property]

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Exhibit B

Attachment to October 2, 2002 Lease

Teal Properties, Landlord and SBS Technologies, Inc., Tenant

28.D.8. Tenant shall pay no minimum rent or TICAM from December 1, 2002 to
January 31, 2003. Minimum rent shall increase by 2% per year, each year
beginning February 1, 2008.

28.D.9. Tenant’s requirement to obtain Landlord’s prior written consent to
make changes and alterations to the Demised Premises shall include only
those changes and alterations affecting the building’s structure or
building’s systems. Tenant shall not be charged a management fee by
Landlord for any improvements that Tenant installs in the Demised
Premises.

28.E. Concurrent with the execution of this Lease, Landlord will provide
Tenant with a subordination and non-disturbance agreement in a form
reasonably acceptable to Tenant from any ground lessors, mortgage holders,
or lien holders of the Landlord then in existence. Landlord shall also
provide Tenant with subordination and non-disturbance agreements in a form
reasonably acceptable to Tenant from any ground lessors, mortgage holders,
or lien holders of Landlord who later come into existence at any time
after the lease execution, during the initial lease term or any renewal
option if exercised. The Landlord does not have any outstanding mortgages,
liens or land leases on the Demised Premises as of the date of this lease.

28.F. Any consent or approval provided for in this Lease shall not be
unreasonably withheld, conditioned, or delayed.

28.G. Notwithstanding any provisions of this lease, each party shall use
commercially reasonable efforts to mitigate its damages, and neither party
shall be liable to the other for consequential damages.

28.H. Landlord shall not be deemed in default under this Lease unless it
shall have failed to cure any breach hereof thirty (30) days after receipt
of written notice thereof from Tenant. Upon any such uncured default,
Tenant shall have all remedies at a law or in equity, including
termination of this Lease.

28.I. Landlord shall keep the Landlord property in compliance with the
Americans with Disabilities Act.

28.J. Tenant shall have the right to parking immediately adjacent to the
Demised Premises for parking not fewer than 50 full sized vehicles.

9.2. In the event of any litigation arising from a dispute under this
Lease, the substantially prevailing party shall be entitled to an award of
its reasonable attorneys’ fees, expert witness fees, court costs and costs
of appeals.

-8-

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