FIRST AMENDMENT TO
LEASE AGREEMENT
This First Amendment to Lease Agreement (the "Amendment") is entered
into as of September 30, 1996 by and between The Titan Corporation, a Delaware
corporation, as tenant ("Tenant") and Xxxxxx Xxxxx Limited Partnership, a
California limited partnership, as landlord ("Landlord").
RECITALS
A. Tenant and Landlord entered into that certain Lease Agreement
dated July 9, 1991 (the "Lease").
B. Tenant and Landlord desire to amend the Lease on the terms and
conditions set forth herein. Capitalized terms used herein without definition
have the meanings ascribed to them in the Lease.
AMENDMENT
NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Tenant and Landlord hereby agree as follows:
1. AMENDMENT TO EXHIBIT E. Section (a)(iii) of Exhibit E of the
Lease is hereby amended to read in its entirety as follows:
"(iii) Maintain at all times on a consolidated
basis a ratio of Indebtedness to Consolidated Tangible Net
Worth of not more than 3.32 to 1.00."
2. LETTER OF CREDIT. Within three business days of the closing of
Tenant's pending public offering of Convertible Debt, Tenant shall post an
irrevocable standby letter of credit (the "Letter of Credit") in an amount equal
to three months' rent under the Lease in favor of Landlord to secure payment by
Tenant of the Rent and all other charges or payments to be paid hereunder and
the performance of the covenants and obligations contained therein, and the
Letter of Credit shall be renewed at least 30 days prior to any expiration
thereof. Such Letter of Credit shall be in form and substance satisfactory to
the Lender and shall be issued by a commercial bank acceptable to Landlord and
shall be released to Tenant when both Tenant's Fixed Charge Coverage Ratio (as
defined below) has been greater than 1.50 to 1.00 and Tenant's ratio of
Indebtedness to Consolidated Tangible Net Worth shall have been not more than
1.35 to 1.00 for four consecutive quarters, provided an Event of Default does
not then exist. Upon such release, Section (a)(iii) of Exhibit E of the Lease
shall be amended to read in its entirety as follows:
"(iii) Maintain at all times on a consolidated
basis a ratio of Indebtedness to Consolidated Tangible Net
Worth of not more than 1.35 to 1.00."
For purposes of this Section 2, "Fixed Charge Coverage Ratio" means (a) income
before income taxes plus fixed charges, divided (b) by fixed charges. Fixed
charges consist of interest expense (including amortization of deferred
financing costs) and the portion of rental expense that is representative of an
interest factor.
3. AMENDMENTS TO LEASE. The Lease is hereby amended as follows:
A. Paragraph 22(a)(xiv) of the Lease is hereby amended to add
the phrase "or with respect to the Letter of Credit" to the second (2nd) line of
such Paragraph immediately following the phrase "the Warrant Agreement."
B. Section 23 of the Lease is hereby amended to add the
following new Paragraph 23(l) to the end of such Section:
"(l) Landlord shall be entitled to apply the proceeds from
the Letter of Credit to any amounts due under Paragraph
23(a) if this Lease shall be terminated, or, if this Lease
shall remain in full force and effect, to any amounts due
under Paragraph 23(b), or in the following order (i) to past
due Basic Rent, (ii) to cure any other monetary Event of
Default and (iii) to installments of Basic Rent in inverse
order of maturity commencing with the last installment of
the Term."
4. LEASE IN FULL FORCE AND EFFECT. Except as specifically amended
by this Agreement, the Lease shall remain unmodified and in full force and
effect.
5. COUNTERPARTS. This Amendment may be executed in one or more
counterparts which together shall constitute one and the same agreement among
the parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Tenant and Landlord have executed this Amendment
as of the date first written above.
"Tenant"
THE TITAN CORPORATION,
a Delaware Corporation
By: /s/ Xxxx X. Xxx
---------------
Its: President and CEO
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"Landlord"
XXXXXX XXXXX LIMITED PARTNERSHIP,
a California limited partnership
By: XXXXXX XXXXX (CA) QRS 10-6, INC.
Its: General Partner
By: /s/ Xxxxxxx Xxxxx
-----------------
Its: Executive Vice President
------------------------
CONSENT OF LENDER
The Northwestern Mutual Life Insurance Company ("Lender") hereby
consents to this First Amendment to Lease as of the date first written above.
"Lender"
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By:
-------------------------
Its:
--------------------
[Northwestern Mutual Life Letterhead]
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxxx
Xxx Xxxxx, XX 00000
Re: NML Loan 331527
Lease Agreement Dated July 1, 1991 (the "Lease Agreement")
between The Titan Corporation, as Tenant
and Xxxxxx Xxxxx Limited Partnership, as Landlord
Gentlemen:
We are in receipt of a copy of a First Amendment to Lease Agreement entered
into as of September 30, 1995 between The Titan Corporation, as Tenant and
Xxxxxx Xxxxx Limited Partnership, as Landlord (the "Amendment"). The
Northwestern Mutual Life Insurance Company, being the "Lender" referenced in the
Lease Agreement hereby consents to the First Amendment. Such consent is given
with the understanding that Landlord, Tenant and Lender will, within the next
thirty days, enter into such further amendment of the Lease Agreement and loan
documentation, satisfactory to each in its discretion, in order to assign the
"Letter of Credit" to the Lender, and shall take such actions as shall be
required to perfect such assignment.
Sincerely,
/s/ Xxxxxxx X. Xxx Xxxxx
Xxxxxxx X. Xxx Xxxxx
Director, Real Estate Production
cc: Xxxxxx Xxxxx Limited Partnership
