AMENDMENT #2 TO LEASE
DATED NOVEMBER 22, 1991 BY AND BETWEEN
ARGOSystems, INC., A WHOLLY OWNED SUBSIDIARY
OF THE BOEING COMPANY, AS LESSOR
AND POWER SPECTRA, INC. A CALIFORNIA CORPORATION, AS LESSEE
THIS AMENDMENT #2 TO LEASE, entered into and made as of the 9th day of
October, 1997, by and between ARGOSystems, Inc. as Lessor, and Power Spectra,
Inc., a California corporation, as Lessee.
WITNESSETH:
WHEREAS, Landlord and Tenant have heretofore entered into a certain lease,
dated November 22, 1991, as amended by Amendment No. 1 dated July 23, 1993
(collectively, the "Lease"), of certain space at 000 Xxxxxxx Xxxxx, Xxxxxxxxx,
XX, (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 covenant
and agreements herein set forth, it is agreed that the Lease be hereby amended
from and after the date hereof as follows:
1. The Option Term set forth in Section 3. "OPTION TO RENEW" of the Lease,
is reduced in duration from 2 years to 1 year ("Revised Option Term"). The
Revised Option Term is deemed to have commenced as of the first day following
the date upon which the original term ended, or February 1, 1997, and shall end
on January 31, 1998.
2. The provisions of Section 3., paragraph b. of the Lease with regard to
the method for setting the basic monthly rental rate for the Option Term are
hereby amended to provide that the monthly basic rent payable during the Revised
Option Term shall be fixed at $22,500 per month ("Revised Option Term Basic
Rent"), plus operating expenses.
3. Lessor shall have an option, exercisable upon Sixty (60) days prior
written notice to Lessee, to occupy certain premises (the "Take-back Premises")
constituting a portion of the Premises as defined in Article 1., "PREMISES" of
the Lease. The Take-back Premises approximate 9,000 square feet of the Premises
and are delineated on Exhibit "A", to this Amendment #2, attached hereto and by
this reference made a part hereof.
4. In the event that Lessor shall exercise its option to occupy the
Take-back Premises in accordance with this Amendment #2, Lessee shall promptly
surrender the Take-back Premises to Lessor in accordance with the terms of
Article 27., "SURRENDER" of the Lease and with the provisions of Paragraph 5. of
this Amendment #2; except that, solely with respect to the Take-back Premises,
Lessee shall not be obligated to paint or clean interior walls, clean carpets,
service air conditioning and heating systems, or clean and wax floors within the
Take-back Premises.
5. a. Lessor and Lessee acknowledge that certain capital equipment located
on the Premises at the date of this Amendment #2 has been transferred to Lessee
by the Boeing Corporation pursuant to a certain agreement entitled "Draft
Amendment Number 12 to Research Agreement 9-1110-JET-103" (the "Boeing
Amendment"). The capital equipment transferred pursuant to the Boeing Amendment
is listed on the Attachment thereto ("Attachment A"). A copy of the Boeing
Amendment with Attachment A is attached as Exhibit "B" to this Amendment #2 and
incorporated herein by this reference.
b. Lessee agrees, notwithstanding any other or different provisions in
the Lease proper regarding condition of the Premises upon surrender at
termination of Lessee's occupancy, that Lessee shall:
(i) remove from the Take-back Premises all items listed on
Attachment A to the Boeing Amendment within 30 days of receiving Lessor's notice
pursuant to Paragraph 3 of this Amendment #2; and
(ii) remove from the Premises all items listed on Attachment A to
the Boeing Amendment promptly upon termination of Lessee's occupancy of the
remainder of the Premises for any reason.
c. with respect to the capital equipment set forth on Attachment A to
the Boeing Amendment, Lessee hereby assumes all cost and expense and all legal
responsibility and liability therefor, whenever arising, including, without
limitation, the payment of all costs and expenses of: (1) removal from all or
any portions of the Premises; and (2) prompt restoration of such portions of the
Premises to the condition they were in prior to the installation thereof; and
(3) disposal or other disposition thereof after such removal.
d. Lessee agrees to defend, indemnify and hold Lessor harmless from any
and all loss, damage, cost or expense directly or indirectly caused to Lessor as
a result of Lessee's failure refusal or neglect to perform in full the
obligations assumed
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under subparagraph 5.(c), above.
Lessor and Lessee agree that except as specifically stated in Paragraphs 4.
and 5. of this Amendment #2, nothing herein shall be deemed to alter or amend
the obligations of Lessee under the terms of Article 27 of the Lease with
respect to the condition of the Premises at the time of Leasee's surrender.
6. From and after the date of Lessor's written exercise of its option set
forth herein, Lessee shall use its best efforts to surrender the Take-back
Premises to Lessor within sixty (60) days of the serving of Lessor's notice.
Failure of Lessee to surrender the Take-back Premises to Lessor within the time
provided shall entitle the Lessor to declare a default of the Lease, to serve
Lessee with a Notice to Quit, and, unless Lessee shall cure such default by
surrendering the Take-back Premises in accordance herewith prior to the
institution of unlawful detainer or other legal proceedings, to pursue, without
limitation, all remedies set forth in the Lease and otherwise provided to
Lessors under the laws of California in cases of default.
7. In the event that Lessee shall timely surrender the Take-back Premises
to Lessor in the condition specified under paragraphs 4 and 5 of this Amendment
#2, following Lessor's exercise of its option as set forth herein, all
post-surrender expenses of preparing the Take-back Premises for Lessor's
occupancy shall be borne by Lessor. Lessor's obligation for expenses of
occupying the Take-back Premises shall not include costs, if any, of Leesee's
preparations for occupancy, upgrades, alterations, reconfigurations, or other
improvements ("Improvements") to any portion of the Premises remaining occupied
by Lessee, which Lessee may wish to perform in connection with Lessee's
surrender of the Take-back Premises, regardless of whether caused, or claimed to
have been caused, by reason of Lessor's exercise of the option. All such
Improvements, if any, to the Premises which Lessee shall continue to occupy
shall be at Leasee's sole cost and expense.
8. Upon Leasee's surrender of the Take-back Premises after Lessor shall
have exercised its option set forth in Paragraph 3 of this Amendment #2,
thereafter monthly obligations for Revised Option Term Basic Rent and operating
expenses (and for Month-to-Month Extended Term, if any, as hereinafter defined)
shall be apportioned on a dollar-for-dollar basis between the Lessor and Lessee
according to a ratio of 9 (Lessor's share) to 16 (Leasee's share) ("Shared
Occupancy Ratio"). For example, if Revised Option Term Basic Rent for a
hypothetical month were $22,500 and an ordinary operating building expense line
item were $4,200 for the same hypothetical month, Leasee's share of such rent
payments for such month according to the Shared Occupancy Ratio would be $17,088
and Lessor's share of such rent payments for such month
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according to the Shared Occupancy Ratio would be $9,612. The parties stipulate
that the foregoing Shared Occupancy Ratio is a fair and reasonable approximation
which the parties have agreed to in consideration of the mutual agreements,
covenants, conditions, and undertakings of this Amendment #2 and of the Lease,
for other good and valuable consideration, and after negotiations conducted
having regard for all the relevant commercial circumstances. Accordingly, each
party waives any right, claim, or action it may have or assert at any time
hereafter to seek a re-computation of the foregoing ratio as the basis for
apportioning rent and operating expenses after Lessee surrenders the Take-back
Premises to Lessor upon Lessor's exercise of its option as set forth herein.
9. The provisions of Section 3., paragraph c. of the Lease are hereby
amended to provide that after January 31, 1998, the end of the Revised Option
Term, the Lessee may continue to occupy the Premises (exclusive of the Take-back
Premises, if Lessor shall have exercised the option provided for in this
Amendment #2) on a month-to-month basis for a duration not to exceed twenty-four
(24) months ("Month-to-month Extended Term"). The Month-to-month Extended Term
may be terminated prior to the end thereof by either party without cause on 90
days' written notice to the other. Basic rent and operating expenses shall be
payable monthly by the Lessee (subject to sharing with Lessor according to the
Shared Occupancy Ratio, if applicable) prior to the termination of the
Month-to-Month Extended Term. Basic rent during the Month-to-Month Extended Term
shall not exceed the following amounts for the following indicated periods
during the Month-to-month Extended Term:
Months 10, 11, 12: $27,500.00
Months 13, 14, 15: $32,500.00
Months 16, 17, 18: $37,500.00
Months 19, 20, 21: $42,500.00
Months 22, 23, 24: $45,000.00
(All such amounts are stated without application of the Shared Occupancy
Ratio, which would apply if Lessor shall have exercised its option set forth in
Paragraph 3 of this Amendment #2.)
Except as is hereinabove set forth, all terms, provisions and covenants of
the Lease shall remain unchanged and in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date and year first above written
LESSEE: LESSOR:
POWER SPECTRA, INC., a ARGOSystems, INC., a wholly-owned
California corporation subsidiary of the BOEING COMPANY
By: /s/ XXXXXX X. XXXX By: /s/ XXXXX X. XXXXX
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Its: Chief Financial Officer Its: Vice President
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