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Exhibit 10.8.2
THIRD AMENDMENT TO LEASE AGREEMENT
THIS THIRD AMENDMENT TO LEASE AGREEMENT (this " Amendment
") is made and entered into on this 12th day of October, 2006 (the
" Effective Date ") by and between SWEETWELL INDUSTRIAL
ASSOCIATES, L.P., a Delaware limited partnership (" Landlord
"), and SYPRIS ELECTRONICS, LLC, a Delaware limited liability
company (" Tenant ").
WHEREAS, Tenant is the current lessee, and Landlord is the
current lessor, under that certain Lease Agreement dated
April 27, 1979 by and between John Hancock Mutual Life
Insurance Company, as lessor, and Honeywell, Inc., as lessee, which
Lease Agreement demises certain premises (the " Demised
Premises ") located in the City of Tampa, Hillsborough County,
Florida and legally described on Page 1 of the Lease Agreement; the
original Lease Agreement, as amended by First Amendment to Lease
Agreement made as of the 25th day of October 1991 (the " First
Amendment "), and by Agreement Relating to Fourth Renewal of
Lease last dated November 1, 2000 (the " Second
Amendment "), and as supplemented by that Letter Agreement
between Landlord and Tenant dated August 30, 2006 (the "Letter
Agreement"), is referred to in this Amendment as the " Lease
"; and
WHEREAS, the current term of the Lease expires on April 26,
2007, subject to one remaining five-year renewal option provided
for in the First Amendment in favor of Tenant to renew the Lease
for a fifth renewal term to expire on April 26, 2012, but
Landlord and Tenant have agreed that such fifth renewal term shall
be for a period of ten (10) years to commence on
January 1, 2007 (the " Fifth Renewal Term ") and, in
connection with the extension of the Lease for the Fifth Renewal
Term, to otherwise amend the Lease as provided for in this
Amendment.
NOW, THEREFORE, for and in consideration of the mutual promises
and covenants contained herein, along with other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Recitals and Definitions . The above Recitals
are true and correct and are a part of this Amendment. Words used
in this Amendment without definition, but which are defined in the
Lease, have the same meaning in this Amendment as in the Lease.
2. Extension of Lease for Fifth Renewal Term . The
Lease is hereby extended for a 10-year Fifth Renewal Term. The
Fourth Renewal Term shall expire on December 31, 2006 and the
Fifth Renewal Term shall commence on January 1, 2007 and
expire on December 31, 2016.
3. Basic Rental During Fifth Renewal Term . The
Basic Rent for the Fifth Renewal Term shall be as follows:
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(a) Initial Basic Rent . For the first year of the Fifth
Renewal Term, Tenant shall pay, as Basic Rent for the Demised
Premises, the sum of One Million Three
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Hundred Twenty-Five Thousand Seven Hundred
Seventy-Six and No/100 Dollars ($1,325,776) per year (or $4.30 per
square foot of rental space), payable, pursuant to the procedures
set forth in Paragraph 1.2 of the Lease, in equal monthly
installments of One Hundred Ten Thousand Four Hundred Eighty-One
and 33/100 Dollars ($110,481.33).
(b) Annual Adjustments to Basic Rent . Commencing
January 1, 2008 and continuing on each January 1
st during the
remainder of the Fifth Renewal Term and during the Sixth Renewal
Term, Seventh Renewal Term and Eighth Renewal Term, if exercised by
Tenant as provided for in Section 4 below (each, an "
Adjustment Date "), the monthly Basic Rent shall increase by
a percentage equal to the lesser of (i) two and one-half
percent (2.5%), or (ii) the same percentage as the increase,
if any, in the Consumer Price Index "U.S. City Average, All Items,
All Urban Consumers, 1982-1984 =100" published by the United States
Department of Labor, Bureau of Labor Statistics (the "CPI
"), during the 12-month period commencing with the month of October
in the calendar year two years prior to the Adjustment Date and
ending with the month of October in the calendar year immediately
preceding the Adjustment Date (the " CPI Reference Period ")
(by example, the CPI Reference Period for the Adjustment Date of
January 1, 2008 will commence with the CPI for October, 2006
and end with the CPI for October, 2007). Such percentage increase
in the CPI shall be determined annually based upon the increase in
the CPI for the CPI Reference Period, by comparing the CPI for
October of the prior year with the CPI for October of the then
current year. If, during the term of this Lease, the CPI shall
(i) become unavailable to the public because publication is
discontinued, or (ii) be substantially revised, Landlord and
Tenant shall use, in lieu of the CPI, the successor index that is
then being most commonly used in the real estate industry as a
substitute for the CPI to determine increase in rental in leases,
or, if no such successor index exists, Landlord and Tenant shall
designate a successor substantially equivalent index and make such
adjustments, if any, to the successor index as they deem
appropriate in order to obtain substantially the same result as
would have been obtained if the CPI had not been discontinued or
revised.
(c) Notice of Basic Rent Adjustment . On or before
December 10th of each lease year, Landlord shall submit to
Tenant a statement setting forth the adjustment to Basic Rent as a
result of the foregoing process. Commencing as of January of the
ensuing lease year and on the first day of each month thereafter,
Tenant shall pay to Landlord the increased Basic Rent in the manner
provided in Paragraph 1.2 of the Lease. The failure of Landlord to
submit the statement required pursuant to this Paragraph shall not
prejudice Landlord’s right to thereafter render such a
statement, but Tenant shall not be required to pay such adjustment
until such statement is rendered.
4. Additional Renewal Terms . At the end of the
Fifth Renewal Term, Tenant shall have three (3) separate
options to renew the Lease for three (3) consecutive renewal
terms of five (5) years each (hereinafter the " Sixth
Renewal Term ", the
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" Seventh Renewal Term " and the "
Eighth Renewal Term ", respectively) under the same terms
and conditions of this Lease. Such options shall be exercised by
Tenant giving written notice to Landlord at least twelve
(12) months prior to the end of the preceding renewal term of
its intention to so renew; provided that Tenant shall not be in
default (beyond the applicable notice and cure period) of any terms
of this Lease when it gives notice of its intent to renew and
Tenant shall not be in default (beyond the applicable notice and
cure period) at the beginning of any renewal term. During each
renewal term, the monthly Basic Rent shall increase annually on
each January 1 st
as provided for in Paragraph 3(b) above.
5. Additional Tenant Improvement Allowance .
Within ninety (90) days after the execution of this Third
Amendment, Landlord shall pay to Tenant a tenant improvement
allowance (the " Tenant Improvement Allowance ") in the sum
of One Million Two Thousand Forty and No/100 Dollars
($1,002,040.00) ($3.25 per square foot of rental space), which
allowance, at Tenant’s option, shall be (i) used, within
thirty (30) months after Tenant’s receipt of the Tenant
Improvement Allowance, to pay for the cost of the Landlord approved
improvements listed on Exhibit "B" (the "Contemplated
Improvements" ), and/or (ii) credited against Basic Rent
for up to a total of three (3) months during the remainder of
the Fourth Renewal Term or during the first year of the Fifth
Renewal Term. The Contemplated Improvements shall be
(i) subject to Landlord’s reasonable approval and other
conditions stated in Paragraph 2.1 of the Lease,
(ii) performed by Tenant or by contractors or subcontractors
obtained by Tenant, according to plans and specifications approved
by Landlord, which approval shall not be unreasonably withheld,
delayed or conditioned, and (iii) except for funding from the
Tenant Improvement Allowance, entirely paid for by Tenant
(including, without limitation, costs to design the work and
prepare drawings, costs of construction, labor and materials, as
well as related taxes and insurance costs). Until the earlier of
(i) thirty (30) months after Tenant’s receipt of
the Tenant Improvement Allowance or (ii) such time as Tenant
has provided Landlord evidence, reasonably satisfactory to
Landlord, that Tenant has fully spent the Tenant Improvement
Allowance in accordance with this Section 5, Tenant shall
provide the Landlord with regular accountings of Tenant’s
expenditures of the Tenant Improvement Allowance. If Tenant has not
accounted for spending the entire Tenant Improvement Allowance in
accordance with this Section 5 within thirty (30) months
after Tenant’s receipt of the funds, Tenant shall refund to
Landlord any such unused balance of the Tenant Improvement
Allowance no later than thirty (30) days after expiration of
the 30-month expenditure period. Tenant shall have no obligation to
remove any of the Contemplated Improvements (or any improvements
previously made to the Demised Premises) upon the expiration or
termination of the Lease.
6. Reduction in Demised Premises . Landlord and
Tenant have agreed that Landlord may obtain a release of certain
land from the original Demised Premises (a " Land Release
"), in accordance with the following:
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(a) Released Land and Retained Land . The exact land to
be released (" Released Land ") has not yet been determined,
but the Landlord and Tenant currently contemplate that, subject to
the terms of this Section, the Released Land will
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contain approximately 17 acres, more or less, as
shown on Exhibit "A" to this Amendment (subject to mutually
acceptable adjustments to be shown on the Approved Survey, which is
described below in Section 7(b)). Following any La
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