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EXHIBIT 10.1
BEST BEST & KRIEGER LLP
[Letterhead]
June 11, 2000
VIA FACSIMILE FAX NO. (562) 926-3710
AND FIRST CLASS MAIL
Greg Geane
Burke Industries, Inc.
13767 Freeway Drive
Santa Fe Springs, CA 90670
Re: 14910 CARMENITA ROAD NORWALK, CALIFORNIA
Dear Mr. Geane:
This letter is intended to be a Letter Agreement (the "Letter
Agreement") which will serve to modify and amend the existing lease dated
November 17, 1995 (the "Lease") between the Donald M. Hypes Trust dated April
25, 1983 (the "Landlord") and Burke Industries, Inc., a California corporation
(the "Tenant") for the above-referenced real property (the "Property").
As you know the original lease term of the Lease expires at midnight on
July 25, 2000. On May 26, 2000 Mr. Elliott Stein exercised the option to extend
the term of the Lease for an additional five (5) year period commencing July 26,
2000 and ending July 25, 2005. In the meantime, we have discussed the desire of
the Tenant to shorten the Lease term and the desire of the Landlord to resolve
the Landlord's outstanding concerns. Based on these discussions, the Landlord is
willing to modify the Lease subject to the following terms and conditions.
All of the terms and conditions of the Lease shall continue to apply
during the remaining original term of the Lease and the extended term following
the expiration of the original lease term on July 25, 2000 with the following
modifications:
1. The term of the Lease upon expiration of the original lease
term on July 25, 2000 shall be extended to February 28, 2001.
Thereafter, the Lease shall be a month-to-month tenancy which
may be terminated by either party upon thirty (30) days prior
written notice.
2. In the event the tenancy is terminated for any reason and
Tenant holds over after such termination, then the monthly
rent shall be increased to two hundred percent
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Law Offices of
BEST BEST & KRIEGER LLP
Greg Geane Burke Industries, Inc.
June 11, 2000
Page 2
(200%) of the monthly rent payable by Tenant immediately
preceding the termination.
3. Rent during the term commencing on July 26, 2000 and ending on
February 28, 2001 shall be Eleven Thousand Nine Hundred
Dollars ($11,900.00) per month payable in accordance with the
terms of Section 4.1 of the Lease. The rent during the
month-to-month tenancy commencing on March 1, 2001 shall be
Twelve Thousand Five Hundred Dollars ($12,500.00) per month
payable in accordance with the terms of Section 4.1 of the
Lease.
4. Concurrent with Tenant's execution of this Letter Agreement,
Tenant shall pay to Landlord the sum of Ten Thousand Dollars
($10,000.00) to be held as an additional security deposit in
accordance with Section 4.8 of the Lease. Landlord
acknowledges that it currently holds Eight Thousand Dollars
($8,000.00) as a security deposit prior to the payment
required hereinabove.
5. Concurrent with Tenant's execution of this Letter Agreement,
Tenant's option to extend the term of the Lease under Section
3.2 of the Lease for an additional five (5) year period shall
be immediately terminated, canceled and revoked.
6. Concurrent with Tenant's execution of this Letter Agreement,
Tenant's right of first refusal under Section 15.18 of the
Lease to purchase the Property shall be immediately terminated
and revoked.
7. On or before termination of the Lease as extended by this
Letter Agreement, Tenant shall comply with Section 11 and 12
of the Lease and make those repairs and clean-up required
thereunder at Tenant's sole cost and expense, including
without limitation, the repairs listed on Exhibit "A" attached
hereto and incorporated herein by this reference.
8. Tenant agrees that Tenant's Property as defined in Section 11
of the Lease does NOT include the carpeting, window coverings,
air lines, power panels, electrical distribution, security,
fire protection systems, lighting, fixtures, heating,
ventilating, air conditioning equipment, plumbing, and
fencing. Moreover, Tenant's Property does NOT include all
electrical panels, distribution and buss ducting, air lines,
air compressors, gas lines, track systems, crane-ways, and
associated cranes.
9. Concurrent with Tenant's execution of this Letter Agreement,
Tenant shall use its best efforts to deliver to Landlord a
complete copy of Tenant's Material Safety Data Sheet file (the
"Data Sheet File") for the period commencing on the
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Law Offices of
BEST BEST & KRIEGER LLP
Greg Geane Burke Industries, Inc.
June 11, 2000
Page 3
commencement date of the Lease and ending on the execution
date of this Letter Agreement. Landlord agrees that the Data
Sheet File shall be used by Landlord for the sole purpose of
Landlord's environmental studies and assessments of the
Property.
10. At any time following the execution of this Letter Agreement
and at all times during the tenancy, Tenant shall continue to
permit Landlord and its agents the inspection and other rights
set forth in Section 15.4 of the Lease and the right to
continuously display "For Sale" signs.
If the Tenant agrees with the terms of this Letter Agreement please
have an authorized officer of the Tenant sign where indicated below and return
the signed original to the undersigned along with the Tenant's check payable to
the Landlord in the amount of Ten Thousand Dollars ($10,000.00) for the
additional security deposit and the copy of the Data Sheet File, within ten (10)
days from the date of this Letter Agreement.
If you have any questions please do not hesitate to contact me.
Very truly yours,
/s/ Brian M. Lewis
Brian M. Lewis
of BEST BEST & KRIEGER LLP
BML/dme
cc: Marjorie Hypes
Garrett Carter
AGREED:
Donald M. Hypes Trust dated April 24, 1983
By: /s/ Marjorie Hypes
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Marjorie Hypes, Trustee
AGREED AS TO FORM AND CONTENT:
Burke Industries, Inc., a California corporation
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Law Offices of
BEST BEST & KRIEGER LLP
Greg Geane Burke Industries, Inc.
June 11, 2000
Page 4
By: /s/ Stephen G. Geane
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Its Chief Financial Officer
July 19, 2000
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EXHIBIT "A"
1. Remove wood demising wall in the back side of the building.
2. Fill in existing depressed areas with sand and gravel base material 5"
thick concrete slab @ 2500 PS1 with dowels. Patch existing concrete
where the wall and machinery are removed from.
3. Fire Sprinklers. Labor to safe off existing to return to original
condition.
4. Electrical. Safe off electrical where wood demising wall is being
removed and where machinery is removed.
5. Electromechanical. All electromechanical systems shall be placed in
good working order including without limitation restroom fixtures and
loading doors.
6. Safe off gas and air lines.
7. Exterior Patch, slurry coat and restripe parking area and yard area.
