EXHIBIT 10.3
SECOND AMENDMENT TO LEASE
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This SECOND AMENDMENT TO LEASE is entered into as of February 18,
2005 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 Taurus Methuen LLC 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 further
define the plan for remediation and closure relating to the matters
outlined in the Phase II Report as defined in Paragraph 5.10 of the Lease;
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. Section 5.10 of the Lease is hereby amended by adding after the
last paragraph of that section the following:
It is further agreed that it shall be reasonable for Landlord to
reject any Activity and Use Limitation or other ongoing conditions or
requirements that would have a material adverse impact on the value or
marketability of the Property for retail uses.
Landlord and Tenant acknowledge that Tenant has not completed all
testing, remedial action, and cleanup, and has not achieved a Permanent
Solution Response Action Outcome within 360 days after the Closing Date as
required under this Paragraph 5.10 of the Lease. Notwithstanding the
foregoing, in view of Tenant's complying with the terms hereof and agreeing
to obtain the Permanent Solution Response Action Outcome as set forth
herein, Landlord hereby waives, effective upon the date of execution of
this Second Amendment, its rights and remedies on account of any Tenant
defaults as a result of Tenant's failure to achieve a Permanent Solution
Response Action Outcome within said above 360 days.
Tenant shall continue, at Tenant's sole expense, to perform testing,
investigation, and remedial action and cleanup as recommended in the Phase
II Report and in the Release Abatement Measure Plan dated February 25,
2004, and Second Release Abatement Measure Status Report dated December 27,
2004 (collectively the "RAM"), and shall, within twelve (12) months after
the date hereof, complete remediation in accordance with applicable law and
file a Permanent Solution Response Action Outcome Statement for the
Property pursuant to 310 CMR 40.000 et seq., all other applicable law, and
as provided herein, and thereafter take such actions and make such filings
as maybe necessary or appropriate until either the applicable audit periods
related to all filings with respect to the remedial action and cleanup
expire while the site is in regulatory compliance and without objection or
request for additional action from DEP or other regulatory authority, or,
with respect to such filings, Tenant has received so-called "no audit"
letters from DEP stating that no further action will be required (all of
which, "Achievement of a Permanent Solution Response Action Outcome"). In
addition to the procedures set forth in the Phase II Report and in the RAM,
Tenant shall perform such hydrogeologic and geochemical evaluations at the
times and with such frequency as may be recommended by Landlord's
consultant (GeoSyntec) in conjunction with the testing, investigation, and
remedial action and cleanup as provided for and in the Phase II Report and
the RAM, provided however, such evaluations recommended by GeoSyntec shall
first be approved by the current Licensed Site Professional ("LSP"), LFR
Levine Fricke ("Levine Fricke"), which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, the hydrogeologic and geochemical
evaluations listed on Exhibit B attached hereto are so approved. Tenant
shall not be responsible for Landlord's consultant fees for work performed
by Landlord's consultants during the above referenced twelve (12) month
period unless either the Lease has sooner been rejected or the Landlord has
sooner recovered possession or obtained a judgment for possession.
In addition, and pursuant to a certain Agreement between Tenant and
Taurus Methuen LLC, Tenant shall upon execution of this Second Amendment
pay to the Escrow Agent the sum of $400,000 ("Escrow Funds") to be held
pursuant to the Escrow Agreement which is attached hereto as Exhibit A.
The Escrow Agreement shall provide that in the event the Tenant has not
completed remediation in accordance with the Phase II Report and the RAM
such that within twelve (12) months from the date hereof a Permanent
Solution Response Action Outcome is not achieved for the Property or Tenant
has not filed a Permanent Solution Response Action Outcome Statement for
the Property pursuant to 310 CMR 40.000 et seq., and all other applicable
law, then (in addition to any other rights and remedies it may have
including, without limitation, noticing a default) the Landlord, at its
option and pursuant to the terms and provisions of the Escrow Agreement,
may draw on such Escrow Funds and may perform or have performed additional
or different testing, remedial action, and cleanup, all in an effort to
achieve a Permanent Solution Response Action Outcome reasonably
satisfactory to Landlord. In the event Landlord elects to perform such
additional work with the Escrow Funds, Landlord shall first notify the
current LSP, Levine Fricke. Such additional work shall be first approved
by, which approval shall not be unreasonably withheld, and performed under
the direction, supervision, and control of Levine Fricke or, if Landlord
chooses to designate a replacement LSP, such LSP as is designated by
Landlord and first reasonably approved by Levine Fricke or Tenant, which
approval shall not be unreasonably withheld or delayed, it being agreed
that GeoSyntec is so approved. In addition, at Landlord's reasonable
request, Tenant agrees that it will promptly (and without in any way
limiting its indemnification agreements under the Lease) complete and
submit to the Massachusetts Department of Environmental Protection and/or
any other appropriate governmental agency, documents (including, without
limitation, transfer of responsibility documents pursuant to the
Massachusetts Contingency Plan ("MCP")) concerning this release. If Levine
Fricke or any replacement LSP recommends use of Tenant's on-site treatment
facilities, Tenant will make the same fully available (including making
reasonable modifications) to Landlord and the LSP at no charge.
Notwithstanding the establishment of the escrow or Landlord's use of all
the Escrow Funds as provided herein, Tenant shall continue to be
responsible for the environmental condition of the Property as provided in
this Section 5.10 and
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under the Lease, with the exception of any damage caused to the Property by
the Landlord. In the event Landlord utilizes all of the Escrow Funds as
provided herein, Tenant shall not, under any circumstances, be required to
replace or replenish the Escrow Funds.
Tenant shall at all times take such measures and precautions as may
reasonably be required in order to prevent the migration of copper, zinc,
and nickel and any other contaminant from the Property at concentrations
above applicable Reportable Concentrations, as specified in the MCP.
Tenant shall provide copies of all environmental reports, logs, results or
correspondence in draft form to Landlord at least seven (7) business days
prior to the date the same are finalized and/or submitted to public
authority. Tenant shall cause Levine Fricke to consult with and advise
Landlord and its consultants from time to time upon Landlord's reasonable
request.
2. Section 11.2 of the Lease is hereby amended by adding
subparagraph (h) as follows:
(h) Landlord and Tenant agree that the determination of the
Purchase Price will not reflect and will not be reduced as a result of the
existence of any environmental conditions on the Property. The parties
also agree that the appraisers as defined above shall be instructed not to
consider the environmental condition of the Property when determining the
fair market value of the Property.
3. As amended hereby, the Lease is hereby ratified and confirmed
to be in full force and effect.
4. This Second 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
Second Amendment to Lease shall be sufficient to prove the execution hereby
by any person or entity.
Executed under seal as of the date first written above.
[Signature Page Follows]
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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/
----------------------
Name:
Title:
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EXHIBIT B
1. Use available water level measurements to conduct an evaluation of
the variability in groundwater levels for monitoring wells where
water levels have been monitored over a full year or more. The
evaluation will be based on common techniques such as time-series
analysis, comparison to nearby monitoring wells with long term
records, and correlation of water level variation with climatic
conditions (i.e. rainfall).
2. Combine water level information from item 1 with available synoptic
water level measurements for the entire monitoring well network to
assess the variability in groundwater flow direction and the
certainty with which it is known. Rose plots or other equivalent
method will be employed.
3. On a site plan showing all monitoring wells, indicate the location of
the sewer and indicate how water level data support, if appropriate,
its effect on groundwater flow.
4. Construct a hydrogeologic cross section oriented along the plume core
that also shows these features.
5. Install two monitoring wells downgradient of the suspected area of
the release between MW-11 and MW-4. The location of these wells will
be determined based on the analysis outline in items 1-4. The
analysis and well locations will be reviewed with the Landlord's
consultant prior to well installation.
6. Gauge water levels in the new and all existing monitoring wells,
sample all existing and new monitoring wells within and downgradient
of the plume and two background locations by the low-flow method
(approximately 12 locations). Analyze groundwater samples for the
parameters listed below.
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Metals (filtered
and unfiltered) Other Cations Anions Alkalinity Other
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<s> <c> <c> <c> <c>
Cu, Ni, Zn, As, Na, K, Ca, Mg, SO4, Cl, SiO4, CO3, HCO3, DIC, DOC, pH,
Se, Cr, Sb Mn, Fe Nitrate, Nitrite total Eh, Sp. Cond.,
DO, TDS, NH3,
NH4+
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Notes: filter at 0.45 um
Fe analysis for ferrous iron
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7. Conduct wellpoint permeability testing at MW-4 and both of the newly
installed monitoring wells.
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8. Develop a Risk Assessment Scope of Work consistent with 310 CMR
40.0900 for review by the Landlord. Include, as appropriate:
* applicable sediment and surface water screening values for
Contaminants of Concern (COCs);
* anticipated groundwater cleanup goals and their derivation; and
* exposure pathway analysis.
If the operating assumption for risk assessment is that there will never be
a complete exposure pathway (i.e., metals have not and will not migrate to
the wetland), then the basis for this conclusion should be explained and
supported as described in items 9 - 11 below.
9. Synthesize the monitoring and risk assessment information described
above to develop a quantitative evaluation of the short term
effectiveness of the RAM, including, but not limited to:
* verification that acidic, caustic, or metal-contaminated
groundwater is not migrating off the property;
* quantification of metal immobilization vs. dilution; and
* verification that the solubility of naturally-occurring metals
has not been enhanced due to pH adjustment.
10. Synthesize background and plume geochemical data, literature
information, and results of chemical equilibrium modeling (i.e.,
using PHREEQC, GeoChemists Workbench, or equivalent) to evaluate the
stability of precipitated/sorbed metal species under current and
post-RAM (i.e., background) conditions, and the potential for
migration of metals leading to significant risk given the risk
assessment approach. Provide the results and basis of this
evaluation to the Landlord upon completion.
11. If evaluation of site geochemical data, literature review, and
modeling are inconclusive, or if significant uncertainties are
otherwise identified during the evaluation, develop a bench scale
testing plan to measure the stability of stabilized metals, and,
after review and approval by the landlord's consultant, implement the
plan.
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