Exhibit
10.2
ADDENDUM NO. 2
TO CONSTRUCTION AND LEASE AGREEMENT
THIS AGREEMENT, made and entered into
effective the first day of __ June 8 ________, 2005, by and
between the PORT OF WALLA WALLA, a municipal corporation of the
State of Washington (hereinafter referred to as "Lessor"), and KEY
TECHNOLOGY, INC., an Oregon corporation (hereinafter referred to as
"Lessee"),
W I T
N E S S E T H:
WHEREAS, Lessor
and Lessee entered into a Construction and Lease Agreement
(hereinafter the "Agreement") dated October 17, 1989 and recorded
with the Walla Walla County Auditor under Auditor's File No.
9105334 regarding the construction and leasing of certain premises
located on Avery Street in Walla Walla, Washington, and
WHEREAS, Lessor
and Lessee entered into Addendum No. 1 to Construction and Lease
Agreement (hereinafter the "Addendum No. 1") dated January 1, 2002
regarding the Lessor’s reduction in the Lessee’s
monthly rent for the period of January 1, 2002 through December 31,
2002, and
WHEREAS, the parties
desire to further amend certain provisions of the Agreement,
NOW, THEREFORE, in consideration of the
Lessor's expansion of the Lessee’s Avery Facility located at
150 Avery Street, Walla Walla, Washington, the parties agree as
follows:
1. Section 3 of
said Agreement, as amended by Addendum No. 1, is amended to read as
follows:
"This Lease shall be
for a term of THIRTY (30) years, commencing at 12:01 a.m. effective
on September 20, 1990 and terminating at 11:59 p.m. on September
19, 2020."
2. Section 4,
Paragraph D of said Agreement, as amended by Addendum No. 1, is
amended to read as follows:
"D. It is agreed
by the parties that the rental due for the penultimate five (5)
years of this Agreement (September 21, 2010 through September 20,
2015) shall be the sum of FIFTY SIX THOUSAND ONE HUNDRED SEVENTY
FIVE DOLLARS AND THIRTEEN CENTS ($56,175.13) per month plus
applicable leasehold tax. It is further agreed by the parties that
the rental due for the last five (5) years of this Agreement
(September 21, 2015 through September 20, 2020) shall be the sum of
FIFTY SEVEN THOUSAND EIGHT HUNDRED SIXTY DOLLARS AND THIRTY EIGHT
CENTS ($57,860.38) per month plus applicable leasehold tax."
Addendum No. 2
to Construction and Lease Agreement, P. 1
Port of Walla
Walla—Key Technology, Inc.
3. Section 4 of
said Agreement is amended by adding new Paragraphs “E"and
“F” thereto to read as follows:
E. In addition
to the rental hereinbefore provided to be paid to Lessor, Lessee
agrees to pay additional monthly rent to the Lessor for the
Lessor's construction of a 20,160 sq. ft. manufacturing bay
expansion on the east side of Key’s Avery facility, the
construction of a 2,400 sq.ft. research and development area on the
north side of said facility, the construction of an additional 62
stall parking lot adjacent to said facility, the installation of
new carpeting in Key's administrative offices, and for certain
other construction costs associated with the expansion project. The
estimated project cost for said improvements is TWO MILLION EIGHT
HUNDRED FOUR THOUSAND SEVEN HUNDRED FORTY NINE DOLLARS
($2,804,749). The estimated additional monthly rental commencing
January 1, 2006 (subject to the issuance of a Certificate of
Occupancy by the City of Walla Walla) shall be the sum of NINETEEN
THOUSAND ONE HUNDRED TWENTY-SEVEN AND 03/100 DOLLARS ($19,127.03)
per month plus applicable state leasehold tax, pursuant to the
terms of the Letter of Authorization to Proceed executed by the
Lessee and dated April 27, 2005 (attached hereto and incorporated
herein as Exhibit 1). The additional monthly rental for said
improvements shall be adjusted and finalized based on the final
actual costs of construction. Any difference, positive or negative,
between the actual final cost of the project and the current budget
of $2,804,749 will result in an adjustment to the monthly lease
cost by applying a 3% rate and a 15 year term in the same manner
used in calculating the current expected lease rate as set forth in
Exhibit 1. The parties shall confirm the amount of additional
monthly rental in writing.
F. In
consideration that Lessee's rental payments to Lessor are based in
part on Lessor’s total cost to construct the addition to the
premises, the Lessee will receive the economic benefit of the
Lessor not paying sales and use taxes. Accordingly, Lessor will
obtain the required exemption certificate pursuant to Ch. 82.60
RCW. Lessee warrants that it plans to create sufficient "qualified
employment positions" at the pr
