EXHIBIT 10.2
FIRST AMENDMENT TO LEASE
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This FIRST AMENDMENT TO LEASE is entered into as of June 29, 2004 by
and between TAURUS METHUEN LLC, as Landlord ("Landlord"), and PARLEX
CORPORATION, as Tenant ("Tenant") and amends that certain Lease dated June
12, 2003 between Landlord and Tenant and relating to certain real property
located at One Parlex Place, Methuen, Massachusetts (the "Lease").
Capitalized terms used herein and not otherwise defined have the meanings
set forth in the Lease.
Whereas, Landlord and Tenant desire to amend the Lease to remove
language relating to the increase of the Security Deposit;
AGREEMENT
Now therefor, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby
covenant and agree as follows:
1. The Lease is hereby amended by deleting the definition of the
term "Security Deposit" in Section 1.1 of the Lease and replacing such
definition with the following:
"SECURITY DEPOSIT: $750,000."
2. Section 8.1 of the Lease is hereby amended by inserting the
word "or" before clause (ix) of such section and deleting the following
phrase from such section: "or (x) a default occurs by the tenant under the
Cranston Lease and such default is not cured within any applicable notice
and cure period,".
3. Section 8.6 of the Lease is hereby deleted in its entirety and
the language set forth on Exhibit A hereto is hereby substituted in its
place.
4. Except as amended hereby, the Lease is hereby ratified and
confirmed to be in full force and effect.
5. This First Amendment to Lease may be executed in one or more
counterparts and it shall be sufficient that the signature of each party
appear on one or more such counterparts. All counterparts shall
collectively constitute a single agreement. A facsimile signature to this
First Amendment to Lease shall be sufficient to prove the execution hereby
by any person or entity.
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Executed under seal as of the date first written above.
TENANT: LANDLORD:
PARLEX CORPORATION, a duly organized Taurus Methuen, LLC, a Delaware
Massachusetts Corporation limited liability company
By: Taurus Cranston/Methuen Limited
By: /s/ Peter J. Murphy Partnership, a Massachusetts
------------------------------ limited partnership, its sole
Its (Vice) President member and manager
By: Taurus-New England XXIV Limited
By: /s/ Jonathan R. Kosheff Partnership, a Massachusetts
------------------------------ limited partnership, its sole
Its (Assistant) Treasurer general partner
By: Taurus Cranston/Methuen
LLC, a Massachusetts
limited liability company,
its sole general partner
By: /s/ Scott R. Tully
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Name: Scott R. Tully
Title: Vice President
Exhibit A
To First Amendment to Lease
8.6 Security Deposit. On the execution of this Lease, Tenant shall
deliver to Landlord as security for the performance of the obligations of
Tenant hereunder, a letter of credit (as renewed, replaced, and/or
increased pursuant to this Lease, and all proceeds thereof, the "Letter of
Credit") in the initial amount specified therefor in Section 1.1, in
accordance with this Section (as renewed, replaced, and/or increased
pursuant to this Lease, and all proceeds thereof, the "Security Deposit").
Tenant's failure to timely deliver the Security Deposit to Landlord shall
constitute a default under this Lease, without any notice or cure period
under Article VIII.
The Letter of Credit (i) shall be irrevocable and shall be issued by
a commercial bank reasonably acceptable to Landlord that has an office in
Boston, Massachusetts, (ii) shall require only the presentation to the
issuer of a certificate of the holder of the Letter of Credit stating that
either a default has occurred under this Lease after the expiration of any
applicable notice and cure period (or that Tenant has failed to timely pay
rent or is otherwise in default under the Lease and transmittal of a
default notice is barred by applicable law) or that Tenant has become the
subject of a bankruptcy, insolvency or similar proceeding, (iii) shall be
payable to Landlord or its successors in interest as the Landlord and shall
be freely transferable without cost to any such successor or any lender
holding a collateral assignment of Landlord's interest in the Lease, (iv)
shall be for an initial term of not less than one year and contain a
provision that such term shall be automatically renewed for successive one-
year periods unless the issuer shall, at least 45 days prior to the
scheduled expiration date, give Landlord written notice of such nonrenewal,
and (v) shall otherwise be in form and substance reasonably acceptable to
Landlord. Notwithstanding the foregoing, the term of the Letter of Credit
for the final period shall be for a term ending not earlier than the date
sixty (60) days after the last day of the Term or, if applicable, any
Extension Term.
Landlord shall be entitled to draw upon the Security Deposit for its
full amount (i) if Tenant shall be in default under the Lease, after the
expiration of any applicable notice or cure period (or if Tenant has failed
to timely pay rent or is otherwise in default under the Lease and
transmittal of a default notice is barred by applicable law), or (ii) in
the case of the Letter of Credit if, not less than 30 days before the
scheduled expiration of the Letter of Credit, Tenant has not delivered to
Landlord a new Letter of Credit in accordance with this Section (which
failure shall be deemed a default without notice or cure period). All
amounts so drawn shall be the exclusive property of Landlord and Landlord
may, but shall not be obligated to, apply the amount so drawn to the extent
necessary to cure Tenant's default under the Lease.
The Security Deposit may be commingled with other funds of Landlord
and shall not constitute an asset of Tenant, and no fiduciary relationship
shall be created with respect to such deposit, nor shall Landlord be liable
to pay Tenant interest thereon. If Tenant shall fail to perform any of its
obligations under this Lease, Landlord may, but shall not be obliged to,
apply the Security Deposit to the extent necessary to cure the default.
After any such application by Landlord of the Security Deposit, Tenant
shall reinstate the Letter of Credit to the amount originally required to
be maintained hereunder, upon demand. If Landlord has drawn on the Letter
of Credit under Section 8.6(ii), and to the extent Landlord has not applied
amounts to cure Tenant defaults, then after acceptance of a replacement
Letter of Credit, Landlord shall restore to Tenant the remaining amount of
such funds. Within sixty (60) days after the expiration or sooner
termination of the Term, and provided that no default exists under this
Lease, the Letter of Credit, to the extent not applied, shall be returned
to the Tenant, without interest.
In the event of a sale of the Premises or lease, conveyance or
transfer of the Premises, Landlord shall have the right to transfer the
Security Deposit to the transferee and Landlord shall thereupon be released
by Tenant from all liability for the return of such Security Deposit; and
subject to Article IX,
Tenant agrees to look to the transferee solely for the return of said
Security Deposit. The provisions hereof shall apply to every transfer or
assignment made of the Security Deposit to such a transferee. Tenant
further covenants that it will not assign or encumber or attempt to assign
or encumber the Letter of Credit or the monies deposited herein as
security, and that neither Landlord nor its successors or assigns shall be
bound by any assignment, encumbrance, attempted assignment or attempted
encumbrance. Tenant will enter into such agreements as Landlord's lender
may request with respect to the assignment of the Security Deposit to such
lender. In connection with any transfer of the Premises, Tenant shall
cooperate with Landlord in the assignment of the Letter of Credit to the
transferee and, if requested by the transferee, Tenant shall, within ten
(10) business days from such request, cause a substitute Letter of Credit
to be issued to the transferee that complies with the requirements of this
Section.
Tenant represents and warrants to Landlord that: (i) as of the date
of this Lease, Tenant has not less than $1,800,000 of immediate and
unrestricted availability under a credit facility (the "Credit Facility")
between Tenant and Silicon Valley Bank ("SVB"); and (ii) Tenant expects
that, on or before July 31, 2003, the immediate and unrestricted
availability under the Credit Facility will increase to at least
$3,000,000. No later than August 8, 2003, Tenant shall provide Landlord
with a written certification from SVB (the "SVB Certification") setting
forth the immediate and unrestricted availability under the Credit Facility
as of the date of such certification (such amount, the "Available Amount").
If Tenant fails to deliver the SVB Certification by August 8, 2003, the
Available Amount shall be deemed to be zero. If, by August 8, 2003, Tenant
has not provided Landlord with a SVB Certification demonstrating that the
Available Amount is at least $3,000,000, Tenant shall, no later than August
15, 2003, increase the Security Deposit by the amount by which $3,000,000
exceeds the Available Amount.