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EXHIBIT 10.20
FIRST AMENDMENT TO LEASE AND CONSENT TO ASSIGNMENT OF LEASE
This First Amendment to Lease and Consent to Assignment of Lease ("Agreement")
is made to be effective this 3rd day of October, 1994 (the "Effective Date") by
and between REISUNG ENTERPRISES, INC., a California corporation ("Landlord") and
EXOTIC MATERIALS, INC., a California corporation ("Tenant").
RECITALS
This Agreement is made with reference to the following facts:
A. Landlord and Tenant entered into that certain written Building Lease
Agreement (the "Lease") dated October 25, 1991 pursuant to which Tenant leased
from Landlord that certain parcel of land and that certain building consisting
of approximately Sixty Thousand (60,000) square feet of space commonly known as
00000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx.
B. Vinten Holdings, Inc., ("Vinten"), a California corporation and then
parent of Tenant, entered into a Stock Purchase Agreement dated June 30, 1993,
with Xxxx Xxxxxxx, Xxxxxx X. Xxxx, and Xxxxxx X. Xxxxxxx, as individuals (the
"Shareholders") for the purchase by the Shareholders of all of the when
outstanding capital stock of Tenant.
C. Pursuant to the certain Assignment Agreement dated July 2, 1993, the
Shareholders assigned and transferred all of their obligations, rights, title
and interest in, to and under the Stock Purchase Agreement to EMI Acquisition
Corporation ("EMI"), a California corporation ("EMI").
D. As of June 9, 1993 (the measurement date under the Stock Purchase
Agreement), Tenant owed Vinten and its affiliates Three Million Four Hundred
Sixty One Thousand Two Hundred Fifty Dollars ($3,461,250). On August 11, 1993,
Vinten contributed to the capital of Tenant One Million Four hundred Sixty One
Thousand Two Hundred Fifty Dollars ($1,461,250) by cancellation of the same
amount of indebtedness owed by Tenant to Vinten. Also on August 11, 1993, Tenant
issued that certain Promissory Note (the "Note") dated August 11, 1993, for the
sum of Two Million Dollars ($2,000,000) in favor of Vinten Group US Holdings,
Inc., a Delaware corporation (the "Holder") in satisfaction of all remaining
amounts owed by Tenant to Vinten and its affiliates. Among other things, the
Note requires Tenant to pay to Holder the sum of 75% of Tenant's net earnings
for the prior fiscal year.
E. Pursuant to the terms of the Stock Purchase Agreement and Assignment
Agreement, on August 12, 1993, EMI acquired all of the outstanding capital stock
of Tenant (the "Transaction").
F. Pursuant to section 14.2, Tenant may not transfer, assign, sublet,
mortgage or otherwise hypothecate the Lease or Tenant's interest in and to the
Premises without first obtaining Landlord's consent thereto. Pursuant to section
14.2.2 Landlord, in determining
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whether to consent to a proposed transfer, may consider, among other things, the
financial capacity of the proposed transferee to perform its obligations under
the Lease.
G. Pursuant to section 14.2, the Transaction set forth above is an
"assignment" or "transfer" of the Lease by Tenant. Tenant has heretofore failed
to obtain the consent of Landlord to the Transaction set forth above. Landlord
and Tenant disagree as to whether or not the financial capacity of the proposed
transferee is less than or greater than that of the Tenant prior to the
Transaction.
H. Tenant hereby seeks Landlord's consent and approval to the
Transaction and Landlord is willing to consent to the Transaction of the terms
and conditions set forth in this Agreement including, without limitation, the
condition that Tenant assigns its interest in the Lease to EMI.
I. As consideration for landlord's granting of consent, Landlord and
Tenant also agree to amend the Lease on the terms and conditions set forth in
this Agreement.
NOW THEREFORE, for good and valuable consideration, including, without
limitation, Landlord's agreement to not reasonably withhold its consent to the
Transaction, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows:
Landlord hereby grants its consent to the Transaction set forth above
conditional upon the satisfaction of the following express terms and conditions:
1. Line of Credit: Tenant shall use its best efforts to develop and
maintain a line of credit for the benefit of Tenant, shall provide to Landlord
copies of any written financing proposal or commitment that Tenant receives from
any proposed working capital lender, and shall otherwise keep Landlord advised
of the progress of such efforts.
2. Holder Agreement: Tenant has obtained the written agreement of the
Holder that the granting of the security deposit pursuant to this Agreement is
not a violation of the terms, conditions or covenants of the Note and that any
amount held as security by Landlord under the terms hereof shall be applied to
any amounts owing or due Landlord under the Lease and that Holder shall have no
claims to said funds.
3. Assignment of Lease to EMI: Tenant shall assign all of its right,
title and interest in and to the Lease to EMI. Landlord hereby consents to such
assignment and further sublease of the Premises by EMI to Tenant on the terms
and conditions specified in Attachment A, provided that EMI shall not be
released from it liabilities and obligations under the Lease by reason of such
sublease.
4. Amendment to Lease: The terms of the Lease shall be amended as
follows:
(a) Security Deposit: Tenant shall provide to landlord a
security deposit in the sum of Forty Thousand Dollars ($40,000) in cash (or
alternatively at Tenant's election in the
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form of a Letter of Credit for the benefit of Landlord, in form and substance
reasonably acceptable to Landlord). If Tenant elects to provide a cash security
deposit and any portion of such security deposit is used by Landlord, Tenant
shall, within five (5) days after written demand therefor by Landlord, deposit
cash with Landlord in an amount sufficient to restore the security deposit to
its original amount. If Tenant elects to provide the security deposit in the
form of a Letter of Credit and Landlord draws on such Letter of Credit, Tenant,
for each such draw, shall open a new Letter of Credit within five (5) days after
written demand therefor by Landlord, for the benefit of Landlord, in form and
substance reasonably acceptable to Landlord, and in the sum which is in like
amount of each said draw. Tenant shall renew each and every such letter of
Credit on or before the day that is thirty (30) days prior to the day that such
Letter of Credit expires. If Tenant fails to so renew such Letter of Credit,
Landlord may draw on each and every Letter of Credit opened by Tenant in
accordance herewith in the sum of any theretofore undrawn amounts.
(b) Financial Statements: within forth-five (45) days following the end
of each of Tenant's first fiscal quarters, Tenant shall provide to Landlord
quarterly financial statements, including, without limitation, a balance sheet
as of the quarter end, and statements of operations and cash flow for the
quarter and year-to-date period then ended, all prepared in accordance with
generally accepted accounting principles. Within ninety (90) days of the end of
each of Tenant's fiscal years, Tenant shall provide to landlord annual financial
statements of the Tenant including, without limitation, a balance sheet as of
the end of the fiscal year and statements of operation and cash flows for the
fiscal year, all prepared in accordance with generally accepted accounting
principles and accompanied by the report of the firm of independent auditors of
the Tenant if the Tenant engages such a firm. Tenant hereby represents to
Landlord that all said financial statements are and will be true, correct and
complete in all material respects.
(c) Accounts Receivable Aging: Tenant has provided to Landlord an aging
of Tenant's accounts receivable as of the fiscal month end immediately preceding
the execution of this Agreement. Tenant hereby represent that such aging is
inclusive of all present accounts receivable only and that it is true, and
complete in all material respects as of such date.
(d) Cost and Expenses: In accordance with section 14.2 of the Lease,
Tenant shall pay to Landlord, as additional rent, the costs and expenses
incurred by Landlord in connection with the Agreement, and the associated Ground
Lease Agreement, the sum of Four Thousand Five Hundred Twenty-Nine Dollars
($4,529). Such amount includes all costs an expenses of landlord payable by
Tenant pursuant to section 14.2 of the Lease and includes, without limitation,
the costs and expenses of Wilson, Sonsini, Xxxxxxxx & Xxxxxx and that of Xxxxxxx
X. Xxxxx of Financial Management Systems. Tenant shall pay such sum upon the
execution of this Agreement and the Landlord hereby acknowledges receipt
thereof.
5. No Further Assignment: This consent is not assignable, nor shall
this consent be a consent to any further amendment, modification, extension of
renewal of the Lease or to any other sublease or assignment of the Lease.
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6. No Other Modifications: Other than the terms herein specifically
amended, all terms and conditions of the Lease remain in full force and effect
without modification.
7. No Waiver. Landlord's consent to the Transaction shall not in any
manner waive any right Landlord may now or hereafter have under the Lease or
otherwise with respect to the Property, except as expressly herein provided.
TENANT: LANDLORD:
EXOTIC MATERIALS, INC. REISUNG ENTERPRISES, INC.
/s/ XXXX XXXXXXX /s/ XXXXXXX X. XXXXXX
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By: Xxxx Xxxxxxx By: Xxxxxxx X. Xxxxxx
Its: President Its:
Date: September 26, 1994 Date: October 10, 1994
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ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AN ASSUMPTION OF LEASE is made between EXOTIC MATERIALS, INC., a
California corporation ("ASSIGNOR") and EMI ACQUISITION CORP., a California
corporation ("ASSIGNEE").
1. Recitals. This Assignment and Assumption of Lease is made with reference to
the following facts:
A. Reisung Enterprises, Inc., ("Landlord") and Assignor entered into a
written lease dated October 25, 1991, as amended concurrently herewith (the
"Lease") with respect to those premises commonly known as 00000 Xxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Premises").
B. Assignor desires to assign all of its right title and interest in
the Lease to Assignee; and Assignee desires to assume all of Assignor's rights
and obligations under the Lease.
2. Assignment. Assignor does hereby grant, transfer, assign and set over to
Assignee all of the Assignor's right, title and interest of whatsoever nature or
kind in and to the Lease.
3. Acceptance and Assumption. Assignee hereby accepts the foregoing assignment
of the Lease and assumes the rights and obligations of Assignor under the lease
which accrue or accrued on and after October 3, 1994. Assignee hereby expressly
assumes and agrees to perform and fulfill all the terms and obligations to be
performed by the tenant under the Lease.
4. Successors. This assignment shall be binding upon and inure to the benefit of
the parties and their successors.
ASSIGNEE: ASSIGNOR:
EMI ACQUISITION CORP., EXOTIC MATERIALS, INC.,
a California corporation a California corporation
/s/ XXXX XXXXXXX /s/ XXXXXXX X. XXXXXX
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By: Xxxx Xxxxxxx By: Xxxxxxx X. Xxxxxx
Its: President Its: President
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EXHIBIT
Drafts are to be accompanied only by a written statement, signed by an officer
or director of Beneficiary, stating either of the following:
"The amount represented by the draft accompanying this statement is the
amount required to be paid to Beneficiary on account of the default of
the tenant under that certain Building Lease Agreement and amendments
thereto dated October 25, 1991 by and between Beneficiary, as landlord,
and Applicant, as the tenant/assignee"; or
"The amount represented by the draft accompanying this statement is the
amount required to be paid to Beneficiary on account of the failure of
the tenant to renew a Letter of Credit in favor of Beneficiary required
to be renewed under that certain Building Lease Agreement and
amendments thereto dated October 25, 1991 by and between Beneficiary,
as landlord, and Applicant, as the tenant/assignee."
