Exhibit
10.4


 


INTERIM
LEASE AND PROPOSED LEASE TERMS


 


AML Communications, Inc.

1000 Avenida Acaso

Camarillo, CA 93012


 


Microwave Holdings, LLC

3350 Scott Blvd.

Santa Clara, CA 95054


 


Re:                               Interim
Lease and Proposal for Lease by AML Communications, Inc. (“Tenant”) from
Microwave Holdings, LLC (“Landlord”) in Building 25 (the “Building”) located at
3350 Scott Blvd. Santa Clara, CA 95054.


 


INTERIM LEASE


 


Prior to the consummation of the transactions contemplated pursuant to
that certain Merger Agreement by and among Tenant, AML Holdings, LLC and
Microwave Power, Inc., a California corporation (“MPI”) dated of even date
herewith (the “Merger Agreement”), the Building was transferred to Landlord
from MPI and the Landlord now seeks to lease the Building to Tenant (the
“Lease”).  For a period beginning on the
Closing Date of the Merger Agreement and ending on the third month anniversary
of such Closing Date (the “Interim Period”), Landlord shall lease the Building
to Tenant for a monthly rental payment of $4,433 with terms consistent with the
Lease Proposal below.  During the
Interim Period, the parties shall negotiate and enter into a definitive two
year lease for the Building which shall commence upon the expiration of the Interim
Period having terms and conditions consistent with the following, provided that
if the parties fail to enter into a definitive agreement, a two-year lease
shall, at the option of Landlord by written notice to Tenant, ensue on the
terms of the Lease Proposal below:


 


LEASE PROPOSAL


 


	
  1.

  	
  BUILDING.

  	
  Building 25

  
	
   

  	
   

  	
   

  	
  3350 Scott Blvd.

  
	
   

  	
   

  	
   

  	
  Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  PREMISES.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  The Entire Building

  



 

















 


	
  3.

  	
  METHOD OF MEASUREMENT.

  	
  The rentable and usable square footages of the
  Building, and of the Premises, as and to the extent expanded, shall be
  calculated pursuant to the Standard Methods of Measuring Floor Area in Office
  Buildings, ANSI Z65.1-1980 (“BOMA”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PURPOSE OF USE.

  	
  The Premises will be used for general office
  purposes and any other legally permitted use.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  LEASE TERM

  	
  The term of the Lease (the “Lease Term”) shall be 2
  years commencing.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  OPTIONS TO RENEW.

  	
  Tenant shall have five 2 year option(s) to renew all
  space then under lease by Tenant, upon first providing Landlord with 3
  months’ prior notice so long as Tenant is not in default at such time. The
  terms and conditions for the option term shall be the same as the original
  terms of the lease. The rights granted to Tenant hereunder may be transferred
  by Tenant to any sublessee or assignee of Tenant.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.2

  	
  TENANT LEASE CANCELLATION OPTION WITH OR WITHOUT
  PAYMENT OF A TERMINATION FEE

  	
  Tenant shall have a one-time right to cancel the
  lease effective at the end of the 6 month of the initial Lease Term (the
  “Termination Date”). Tenant must give notice of its intention to cancel the
  lease not later than 1 month prior to the Termination Date.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  ANNUAL BASE RENT.

  	
  The annual base rent (the “Annual Base Rent”) per
  rentable square foot of the initial Premises during the Lease Term shall be
  determined by Market Terms as defined below.

  



 

















 


	
  7.

  	
  MARKET TERMS/APPRAISAL CLAUSE.

  	
  “Market Terms” shall be the terms and conditions,
  including rent, free rent, tenant improvement allowances, brokerage
  commissions, construction time and all other lease concessions, which
  non-renewing, non-equity tenants are then receiving in connection with the
  lease of comparable space, of comparable building height in buildings
  comparable to the Building in terms of age, quality, size, location,
  services, amenities, quality of construction, and appearance. In the event
  Landlord and Tenant cannot agree upon the Market Terms within thirty (30)
  days, then Landlord and Tenant shall seek two independent appraisers which
  will then determine the Market Terms for the Premises pursuant to “Baseball
  Style” arbitration. In the event the two appraisers cannot agree, then the
  two appraisers are to select a third appraiser, at which time the three
  appraisers will determine the Market Terms pursuant to “Baseball Style”
  arbitration.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  REAL PROPERTY TAX AND OPERATING

  EXPENSE ADJUSTMENTS

  	
  TRIPLE NET — During the Lease Term, Tenant shall pay
  its proportionate share of real property taxes and operating expenses for the
  Building. Operating expenses will be calculated on a grossed-up basis
  reflecting variable operating expenses as if the Building was 95% occupied. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If during the Lease Term, a sale or refinancing of
  the Building is consummated, and as a result thereof, the real property taxes
  for the Building increase pursuant to a reassessment under the terms of
  Proposition 13, then Tenant shall not be obligated to pay, during the Lease
  Term, any portion of such increase.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  ASSIGNMENT AND SUBLEASING

  	
  Tenant shall have the right during the Lease Term to
  sublease or assign all or any portion of the Premises to a related entity or
  affiliate upon notification to Landlord. 
  In addition, Tenant shall have the right to assign or sublease to
  unrelated entities as provided below.

  



 

















 


	
   

  	
   

  	
   

  	
  In addition, Tenant shall have the right to assign
  or sublease all or any portion of the Premises subject to Landlord’s consent,
  which consent will not be unreasonably withheld or delayed.  Tenant shall retain any and all profits
  paid in connection with any sublease or assignment in excess of Tenant’s rent
  obligations hereunder.  If Landlord
  does not respond within fifteen (15) days after Tenant’s request for consent,
  Landlord shall be deemed to have approved such transfer.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Landlord shall not have the right to recapture any
  sublease or assignment space.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  HEATING, VENTILATION AND AIR-CONDITIONING.

  	
  Landlord shall furnish heating, ventilation and
  air-conditioning (“HVAC”) during Tenant’s operating hours.  Landlord shall provide, upon Tenant’s
  request and at Tenant’s expense, after-hours HVAC on an hourly basis at
  Landlord’s actual cost with no administrative fee or start-up or minimum
  charge.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  ELECTRICITY.

  	
  Landlord shall provide Tenant with electricity for
  lighting and normal office equipment.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12.

  	
  CLEANING SPECIFICATIONS.

  	
  Landlord will clean Tenant’s Premises five (5) days
  per week, pursuant to a cleaning specifications exhibit to be attached to and
  made a part of the Lease.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  IDENTITY.

  	
  Tenant shall be permitted to install, at its expense
  and subject to Landlord’s consent, which will not be unreasonably withheld,
  signage in and on the Building.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  BUILDING SECURITY.

  	
  Tenant, at its own cost, shall be permitted to
  install its own security system for the Premises.

  



 

















 


	
  15.

  	
  SECURITY REQUIREMENTS.

  	
  Tenant shall pay a security deposit equal to 1 month
  Annual Base Rent (calculated as of the first month of the Lease Term) upon
  execution of the Lease.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  16.     ENVIORNMENTAL LAW
  VIOLATIONS AND

  TOXIC MATERIALS.

  	
  Landlord shall have the express responsibility to
  advise Tenant of any environmental law violations or toxic materials which
  are located in or about the Premises, parking areas, storage area or other
  parts of the Building. It shall be the responsibility of Landlord, at its
  sole cost and expense, to remove any toxic materials or to remedy any
  environmental law violations and to indemnify and hold Tenant harmless from
  any future action which might occur as a result of the presence of toxic
  materials or environmental law violations to the extent not directly caused
  by Tenant.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  ARBITRATION.

  	
  The Lease shall provide that any disputes shall be
  resolved by arbitration under the rules of the American Arbitration
  Association or such other procedures as are mutually acceptable to the
  parties.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  ABANDONMENT.

  	
  Tenant shall not be in default for vacating or
  abandoning the Premises so long as Tenant’s rent is paid per the lease.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  NON-DISTURBANCE AGREEMENT.

  	
  Landlord shall secure and deliver to Tenant
  non-disturbance agreements executed by all trust deed holders and ground
  lessors of the Building, if applicable.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  BUILDING PLANNING.

  	
  Landlord may not relocate the Premises to other
  space in the Building.

  



 

















 


	
  21.

  	
  TENANT’S RIGHT TO ABATE BASE RENT.

  	
  If the Premises is untenantable for Tenant, Tenant
  shall give Landlord notice, specifying such condition. If Landlord has not
  cured such condition within 15 business days after the receipt of the notice,
  Tenant may immediately abate all rent payable under the lease for the
  Premises, until the earlier of the date Landlord cures such condition or the
  date Tenant recommences use of the Premises.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  SUBORDINATION

  	
  The lease shall contain standard provisions
  regarding subordination of lease to any future lender; provided that such
  subordination is subject to tenant receiving a commercially reasonable
  non-disturbance agreement from such lender.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  REPAIRS

  	
  The lease shall have standard language regarding
  Tenant making repairs for damage Tenant causes to the Building.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  DEFAULT BY TENANT

  	
  In the event Tenant is in default which is not cured
  within 15 business days after receipt of notice, Landlord shall have the
  right to terminate the Lease and declare all rents for the remainder of the
  Lease term immediately due and payable.

  



 

















 


 


ACCEPTED AND AGREED TO:


 


DATED: 6/15/04


 


“LANDLORD”:


 


Microwave Holdings, LLC


 


 


	
  By:  

  	
  /s/ Marina Bujatti

  	
   

  
	
   

  	
  Marina Bujatti

  



 


 


“TENANT”


 


AML COMMUNICATIONS, INC.,

a Delaware corporation


 


 


	
  By:  

  	
  /s/ Jacob Inbar

  	
   

  
	
   

  	
  Jacob Inbar

  
	
   

  	
  President & CEO