Document:

Exhibit 10.1

 

FIRST AMENDMENT TO LEASE

 

This AMENDMENT TO LEASE (this “Amendment”),
dated as of the 1st day of September, 2009, is entered into by and
between WALTON CWTX CORPORATE PLACE 87, LP, a
Delaware limited partnership (“Landlord”) and INTRUSION
INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

WHEREAS, Landlord’s predecessor and Tenant entered
into that certain Lease Agreement dated January 12, 2004 (the “Lease”),
wherein Landlord leased to Tenant those certain premises consisting of
approximately 32,834 rentable square feet (the “Existing Premises”) at
the property commonly known as 1101 East Arapaho Road, Richardson, Texas; and

 

WHEREAS, Landlord and Tenant desire to extend the term
of the Lease and reduce the size of the Premises to those certain premises
shown on the attached Exhibit A and containing approximately 27,777
rentable square feet (the “New Premises”), and otherwise modify certain
terms and covenants of the Lease; and,

 

WHEREAS, the portion of the Existing Premises which
Tenant is vacating consists of 5,057 rentable square feet on the first floor
and is shown in the attached Exhibit B (the “First Floor Premises”).

 

NOW, THEREFORE, in consideration of the mutual
covenants and conditions contained herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:

 

1.                                       Definitions.  Unless otherwise specifically set forth
herein, all capitalized terms herein shall have the same meaning as set forth
in the Lease.

 

2.                                       Contraction.  As of September 1, 2009, (the “Effective
Date”) the Premises subject to the Lease shall be amended to be the New
Premises and Exhibit A attached to the Lease shall be deleted in its
entirety and the attached Exhibit A shall be substituted therefor.

 

3.                                       Term.  As of the Effective Date, the Termination
Date shall be extended to December 31, 2012.

 

4.                                       Rent
Adjustments.  As of the
Effective Date, the terms “Base Year (Taxes)” and “Base Year (Expenses)” shall
both mean the calendar year 2009 and “Tenant’s Proportionate Share” shall be
30.24%.  In calculating the total
Expenses for any Lease Year after the Base Year (Expenses), the Controllable
Expenses (defined below) for such Lease Year shall not exceed the Controllable
Expenses for the Base Year (Expenses) (such amount, the “Base Year Controllable
Expenses”), increased at a rate of seven percent (7%) per annum on a cumulative
basis.  As used 

 

 

herein, “Controllable Expenses” shall mean
those Expenses which are within the reasonable control of Landlord, and shall
not include any non-recurring capital expenditures or costs which are not with
the reasonable control of Landlord, including, without limitation, expenses
which are established by public utilities, government regulation or
multi-employer labor agreements; costs, such as snow removal, varying according
to weather conditions; or insurance costs. 
Thus, the portion of Expenses constituting Controllable Expenses for the
first Lease Year after the Base Year (Expenses) shall be limited to 107% of the
Base Year Controllable Expenses; the portion of Expenses constituting
Controllable Expenses for the second Lease Year after the Base Year (Expenses)
shall be limited to 114.49% of the Base Year Controllable Expenses; the portion
of Expenses constituting Controllable Expenses for the third Lease Year after
the Base Year (Expenses) shall be limited to 121.50% of the Base Year
Controllable Expenses; and so on.

 

The amounts which Landlord
claims are due from Tenant pursuant to Article 4 of the Lease for the
Expenses and Taxes accrued for calendar years 2007, 2008 (estimated to be
approximately $85,654) and 2009 prior to the Effective Date (estimated to be
approximately $57,128) and which have not been paid and are in dispute by
Tenant are hereby waived and forgiven; provided, however, that Tenant hereby
reserves all rights and remedies available to Tenant to, now or hereafter,
dispute such amounts are or were owed by Tenant.  Landlord and Tenant both hereby acknowledge
and agree that any dollar amounts included herein are only estimates and actual
amounts being forgiven pursuant to this Section 4 may exceed or be less
than such amounts.  Landlord hereby
represents to Tenant that, as of the Effective Date, Landlord has no knowledge
of any amounts which Landlord believes are owing by Tenant under the Lease,
other than the Expense and Tax amounts listed above and forgiven under this
Amendment.

 

5.                                       Rent.  As of the Effective Date, the Base Rent for
the Premises shall be as follows:

 

	
  PERIOD

  	
   

  	
  ANNUAL RENT

  	
   

  	
  ANNUAL

  RENT PSF

  	
   

  	
  MONTHLY

  INSTALLMENT OF

  ANNUAL RENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9/1/2009 – 12/31/2009

  	
   

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1/1/2010 – 6/30/2011

  	
   

  	
   

  	
  $

  	
  340,268.25

  	
   

  	
  $

  	
  12.25

  	
   

  	
  $

  	
  28,355.69

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7/1/2011 – 12/31/2012

  	
   

  	
   

  	
  $

  	
  368,045.25

  	
   

  	
  $

  	
  13.25

  	
   

  	
  $

  	
  30,670.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1/1/2013 – 2/28/2013

  (option period)

  	
   

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3/1/2013 – 2/29/2016

  (option period)

  	
   

  	
   

  	
  $

  	
  416,655.00

  	
   

  	
  $

  	
  15.00

  	
   

  	
  $

  	
  34,721.25

  	
   

  

 

6.                                       Option to
Extend.  Exhibit E of the Lease is
hereby deleted in its entirety and the following substituted therefor:

 

2

 

Tenant shall, provided the Lease is in full force and effect and Tenant
is not in default under any of the other terms and conditions of the Lease at
the time of notification or commencement, have the option to extend the term of
this Lease for one term of thirty-eight (38) months.  If Tenant elects to exercise said option,
then Tenant shall provide Landlord with written notice no later than December 31,
2011.  If Tenant fails to provide such
notice, Tenant shall have no further or additional right to extend or renew the
term of the Lease.  Such extension shall
be on an “as is, where is” basis and Landlord shall have no obligation to
provide any improvements or construction allowance to Tenant.  This option is not transferable; the parties
hereto acknowledge and agree that they intend that the aforesaid option to
renew this Lease shall be “personal” to Tenant as set forth above and that in
no event will any assignee or sublessee have any rights to exercise the
aforesaid option to renew.

 

7.                                       Condition of
New Premises.  Landlord
shall deliver the New Premises in “as-is, where-is” condition, with no
alterations, additions, repairs or improvements to be made by Landlord.

 

8.                                       Vacation of
First Floor Premises.  On or
before October 15, 2009 (the “Delivery Date”), Tenant shall deliver
full possession of the First Floor Premises to Landlord, in the condition
required as though the Lease were then terminating as to the Existing Premises,
with all personal property (including, but not limited to, furniture) removed
therefrom.  Tenant’s failure to so
deliver the Existing Premises to Landlord as of the Delivery Date shall be
considered a holding over pursuant to Article 14 of the Lease.  Except as otherwise provided in this
Amendment, as of the Effective Date, Tenant shall have no further obligation to
Landlord with respect to the First Floor Premises other than obligations
accrued on or prior to the Effective Date, and those obligations which would
survive the expiration or early termination of the Lease.

 

9.                                       Option to
Expand.  Provided Tenant is not then in
default under the terms, covenants and conditions of the Lease, Tenant shall
have the right to lease the First Floor Premises for occupancy as of the date
Landlord delivers the First Floor Premises to Tenant (the “Delivery Date”).  In the event that Tenant desires to exercise
its option, it shall deliver notice of such exercise to Landlord on or before August 31,
2010, failing which Landlord may lease the First Floor Premises to any third
party on whatever basis Landlord desires, and Tenant shall have no further
rights with respect to the First Floor Premises.  If Tenant exercises an expansion option
hereunder, effective as of the Delivery Date, the First Floor Premises shall
automatically be included within the Premises and subject to all the terms and
conditions of the Lease, except as follows: 
(i)  Tenant’s Proportionate Share shall be recalculated, using the
total square footage of the Premises, as increased by the First Floor Premises;
(ii) the First Floor Premises shall be leased on an “as is” basis and
Landlord shall have no obligation to improve the First Floor Premises or grant
Tenant any improvement allowance thereon; (iii) the Annual Rent for the
First Floor Premises shall be the same, on a per rentable square foot basis, as
the Annual Rent for the New Premises; and, (iv) if requested by Landlord,
Tenant shall, prior to the beginning of the term for the First Floor Premises,
execute a written memorandum confirming the inclusion of the First Floor
Premises and the Annual Rent for the First Floor Premises.  This option is not transferable; the parties
hereto acknowledge and agree that they intend that the aforesaid option 

 

3

 

to lease the First Floor Premises shall be “personal”
to Tenant as set forth above and that in no event will any assignee or
sublessee have any rights to exercise the aforesaid option.

 

10.                                 HVAC Expenses.  As of the Effective Date, any reference to “HVAC
Expenses” in the Lease shall be deleted and Tenant shall have no further
obligation to pay such sum; however, Tenant shall continue to be liable for any
such sums accrued up to the Effective Date.

 

1.                                       SNDA.  At Tenant’s request and at Tenant’s sole
expense, Landlord shall use commercially reasonable efforts to obtain a
reasonable and customary subordination and non-disturbance agreement from its
mortgagee, in a form reasonably acceptable to such lender, Landlord and Tenant,
but the failure to obtain such subordination and non-disturbance agreement
shall not be a breach or failure of condition of the Lease or this Amendment.  Tenant shall reimburse Landlord for any costs
and expenses actually charged or passed through to Landlord from its mortgagee in
connection therewith.

 

2.                                       Brokers.   Landlord and Tenant hereby represent to the
other that Landlord has been represented by CB Richard Ellis and that Tenant
has been represented by NAI Robert Lynn and they had no dealings with any other
brokers in connection with this Amendment and that they know of no other
brokers who are entitled to a commission or finder’s fee in connection with
this Lease. Each party agrees to indemnify and hold harmless the other party
from all claims demands, losses, liabilities, lawsuits, judgments, and costs
and expenses (including reasonable attorney fees) for any leasing commission,
finder’s fee, or equivalent compensation by any other brokers claiming to have
represented such party in connection with this Amendment.  Landlord hereby agrees to pay any commissions
due to the foregoing brokers.  Landlord
agrees that, if Tenant exercises its option to extend as set forth in Paragraph
6 above, Landlord shall pay the foregoing brokers as follows:

 

(a)                                  An amount equal to the Adjusted Rent (as
defined below) for the extended Term multiplied by four and one half percent
(4.50%), in the case of the commission due NAI Robert Lynn, and two and one
quarter percent (2.25%), in the case of the commission due CB Richard Ellis.

 

(b)                                 “Adjusted Rent” is the base rent payable
for the extended Term, not including in such amount any rents which are not
actually intended to be paid by Tenant, such as free rent or abated rent,
additional rents, percentage rents, reimbursements, amortized tenant
improvements in excess of the applicable building standard, or other amortized
concessions given to the tenant.

 

(c)                                  Such commission shall be paid upon the
later to occur of:  (i) commencement
of the extended Term; or (ii) thirty (30) days after Landlord’s receipt of
the broker’s invoice for such amount.

 

3.                                       Recapture Upon
Default.  Tenant understands and agrees
that in entering into this Amendment, Landlord is relying upon receipt of all
the Annual and Monthly Installments of Rent to become due over the full Term of
this Lease for amortization of the Concession Amount.  Therefore, the parties agree that the
Concession Amount, as defined in Section 19.3 of the Lease, 

 

4

 

includes the concessions for this Amendment,
namely:  brokers’ commissions, four
months’ abated rent and the Expenses and Taxes amounts forgiven under Paragraph
4 above.

 

4.                                       Incorporation.  Except as otherwise amended herein, all other
terms and conditions of the Lease shall remain in full force and effect and
Tenant hereby ratifies and confirms its obligations thereunder.  Tenant acknowledges that as of the date of
this Amendment, Tenant (i) is not in default under the terms of the Lease;
(ii) has no defense, set off or counterclaim to the enforcement by
Landlord of the terms of the Lease; and (iii) is not aware of any action
or inaction by Landlord that would constitute an event of default by Landlord
under the Lease.

 

5.                                       Limitation of
Landlord Liability.  Redress for
any claims against Landlord under this Amendment or the Lease shall be limited
to and enforceable only against and to the extent of Landlord’s interest in the
Property.  The obligations of Landlord
under this Amendment and the Lease are not intended to be and shall not be personally
binding on, nor shall any resort be had to the private properties of, any of
Landlord’s or its investment manager’s trustees, directors, officers, partners,
beneficiaries, members, stockholders, employees, or agents, and in no case
shall Landlord be liable to Tenant hereunder for any lost profits, damage to
business, or any form of special, indirect or consequential damages.

 

IN
WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the day
and year first written above.

 

	
  LANDLORD:

  

  WALTON CWTX CORPORATE PLACE 87, LP, a
  Delaware limited partnership

  	
   

  	
  TENANT:

  

  INTRUSION INC., a Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
  By:   WCV Commercial Properties Inc., an
  Illinois corporation, its authorized agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
  Title:

  	
   

  
					

 

5

 

EXHIBIT A

 

attached to and made a
part of the First Amendment to Lease

dated September 1,
2009 between

 WALTON CWTX CORPORATE PLACE 87, LP as
Landlord, and

INTRUSION INC. as Tenant

 

1101 E. Arapaho Road, Suite 100,
Richardson, Texas

 

NEW PREMISES

 

 

6

 

EXHIBIT B

 

attached to and made a
part of the First Amendment to Lease

dated September 1,
2009 between

 WALTON CWTX CORPORATE PLACE 87, LP as
Landlord, and

INTRUSION INC. as Tenant

 

1101 E. Arapaho Road, Suite 100,
Richardson, Texas

FIRST FLOOR PREMISES

 

 

7Exhibit 10.1

 

FIRST
AMENDMENT TO

EMPLOYMENT AGREEMENT

 

This
First Amendment to Employment Agreement (this “Amendment”) is entered
into as of September 16, 2009 by and between  Hi-Shear
Technology Corporation, a Delaware corporation (the “Company”) and George
W. Trahan  (“Executive”).

 

RECITALS:

 

WHEREAS,
the Company and Executive previously entered into that certain Employment
Agreement dated as of February 28, 2009 (the “Employment Agreement”),
which shall be amended by this Amendment;

 

WHEREAS,
the parties wish to amend certain terms regarding Executive’s employment with
the Company;

 

WHEREAS,
concurrently herewith, the Company is entering into an Agreement and Plan of
Merger (the “Merger Agreement”) with Chemring Group PLC, a company
organized under the laws of England and Wales (“Parent”), and Parkway
Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent (“Merger Sub”), pursuant to which Merger Sub will be merged with
and into the Company, and the Company shall continue as the surviving
corporation and a wholly-owned subsidiary of Parent (the “Transaction”);
and

 

WHEREAS,
as a condition and material inducement for Parent to enter into the Merger
Agreement and consummate the Transaction, Executive is entering into this
Amendment concurrently with the execution of the Merger Agreement.  The Employment Agreement, as amended by this
Amendment, will govern the employment relationship between Executive and the
Company from and after the Effective Time (as such term is defined in the Merger
Agreement).

 

AGREEMENT:

 

NOW,
THEREFORE, in consideration of the covenants, promises and representations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged the parties agree as follows:

 

1.             Effective as of the
Effective Time (as such term is defined in the Merger Agreement), the
Employment Agreement shall be amended by deleting in its entirety the last
sentence of Section 9.3.

 

2.             Effective as of the
Effective Time (as such term is defined in the Merger Agreement), the
Employment Agreement shall be amended by adding a new Section 21 to the
Employment Agreement, as follows:

 

“21.         Notwithstanding anything to
the contrary in this Agreement, if Executive’s employment is terminated by the
Company or Executive for any reason (including but not limited to automatic
termination on February 28, 2010), all rights and 

 

 

obligations
of the Company and Executive under this Agreement shall cease, except for (i) the
Company’s obligations to make any payments for (A) Executive’s accrued but
unpaid salary, (B), Executive’s accrued but unused vacation and (C) Executive’s
other benefits provided pursuant to Sections 7.1, 7.2, 7.3, 9.1, 9.2 and 9.3
attributable solely to time periods prior to such termination (collectively,
the “Accrued Compensation”); provided, however, that if Executive’s employment
is terminated prior to February 28, 2010 and other than pursuant to Section 6.1
or 6.2, the Accrued Compensation shall be calculated as though Executive had
remained employed by the Company through February 28, 2010 at the same
level of base salary and (ii) Executive’s obligations pursuant to Section 5.1
of this Agreement.  Subject to Section 20,
the Accrued Compensation shall be made in a lump sum payment to Executive or
his estate, as applicable, within five business days of the date of
termination.”

 

3.             Defined Terms.  Except as otherwise set forth herein, all
capitalized terms used in this Amendment and not defined herein shall have the
meanings provided in the Employment Agreement.

 

4.             Full Force and Effect.  Except as above amended, the Employment
Agreement shall remain in full force and effect.  To the extent any provision in this Amendment
conflicts with any provision in the Employment Agreement, the provisions of
this Amendment shall govern.  Any matter
not specifically addressed in this Amendment but addressed in the Employment
Agreement shall be determined in accordance with the provisions of the
Employment Agreement.  In the event the
Merger Agreement is terminated, this Amendment shall terminate without any
further action on the part of any party hereto and shall be of no further force
and effect.

 

5.             Amendments.  No amendment or modification of the terms or
conditions of this Amendment shall be valid unless in writing and signed by
both parties.

 

6.             Governing Law.  This Amendment shall be interpreted,
construed, governed and enforced according to the laws of the State of
California.

 

7.             Counterparts and PDF
Signatures.  This
Amendment may be executed and delivered in multiple counterparts (including by
facsimile or other form of electronic transmission), all of which together
shall constitute one and the same instrument.

 

8.             Incorporation of Recitals.  All of the recitals contained herein are
hereby incorporated into and made a part of this Amendment.

 

[Signature Page Follows]

 

 

IN
WITNESS WHEREOF, the parties have executed this First Amendment to Employment
Agreement as of the day and year first above written.

 

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  HI-SHEAR
  TECHNOLOGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jan L. Hauhe

  
	
   

  	
  Name:

  	
  Jan
  L. Hauhe

  
	
   

  	
  Its:

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jack Bunis

  
	
   

  	
  Name:

  	
  Jack
  Bunis

  
	
   

  	
  Its:

  	
  Chairman
  of the Special

  
	
   

  	
   

  	
  Committee
  of the Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  George W. Trahan

  
	
   

  	
  George
  W. Trahan

  

 

[SIGNATURE
PAGE TO FIRST AMENDMENT TO EMPLOYMENT AGREEMENT]

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