EXHIBIT 10.11
LEASE
This Lease is made this 29th day of
December, 2005 (this “Lease” ), between 55
HERITAGE (SALEM) LLC, a New Hampshire limited liability company (
“Landlord” ) and STOCKERYALE, INC., a
Massachusetts corporation ( “Tenant” ). The term
“Building” as used herein refers to the building
located at 32 Hampshire Drive, Salem, New Hampshire, together with
the pedestrian walkways, parking garage and outdoor plaza and park
areas, all adjacent thereto. The land on which the Building is
located is hereinafter referred to as the “Land”
. The Building and the Land are hereinafter collectively called the
“Property” . The following Schedule is an
integral part of this Lease.
SCHEDULE
1. Description of Leased Premises:
The Building, consisting of approximately 95,000 square feet of net
rentable area, more or less.
2. Tenant’s type of business:
designer and manufacturer of structured light lasers, specialized
fiber optic, fluorescent, and LED technologies as well as phase
masks, specialty optical fiber, and diffractive optics.
3. Base Rent: the sum of the
following: (i) with respect to the area depicted on the
attached Exhibit A , which consists of approximately 32,000
square feet (the “Primary Space” ), during the
term, the annual base rent will be $192,000.00 ($16,000.00 per
month); and (ii) with respect to the remaining area in the
Building excluding the Primary Space, which consists of
approximately 63,000 square feet (the “Other Space”),
subject to the terms set forth below, during the first two years of
the term, the annual base rent will be $315,000.00 ($26,250.00 per
month), during the third and fourth years of the term, the annual
base rent will be $252,000.00 ($21,000.00 per month), and during
the fifth year of the term, the annual base rent will be $220,500
($18,375.00 per month).
4. Monthly installment of Base Rent:
Initially, $42,250.00 and thereafter Tenant shall pay equal monthly
installments of the Base Rent as adjusted from time to time
pursuant to Paragraph 3 above.
5. Tenant’s Expense Share: On
the commencement date, 100%, subject to the terms set forth below
(the ratio of the number of square feet of net rentable area in the
Leased Premises, from time to time, to the number of square feet of
net rentable area in the Building, from time to time); provided,
however, if less than 100% of the Building’s rentable area
shall have been leased by tenants at any time during any Lease
Year, then at Landlord’s election Operating Expenses for such
Lease Year shall be the amount which Landlord in good faith
determines is the amount Operating Expenses would have been for
such Lease Year had tenancy been 100% throughout such Lease
Year.
6. Term: Five years and three days,
commencing on December 29, 2005, and terminating on
December 31, 2010.
7. Security Deposit: $770,500.00.
Provided no default shall have occurred and not cured within any
applicable grace or cure period, or otherwise waived by Landlord,
Landlord will apply a portion of the security deposit to Base Rent
as follows: (i) $10,000.00 promptly upon receipt by Landlord
of a survey (that Landlord will promptly order) acceptable to
Landlord’s lender and title insurer and an endorsement to
Landlord’s title insurance policy insuring over the survey
exception; (ii) $42,250.00 per each month during the last six
months of the first year of the term; (iii) $14,083.33 per
each month during the second year of the term; (iv) $15,833.33
per each month during the third year of the term; and
(v) $9,666.66 per each month during the fourth year of the
term, with any remaining portion of the security deposit to be held
by Landlord until the expiration of the Lease.
11. Broker: None.
12. Addresses for
Notices:
If to Landlord:
55 Heritage (Salem) LLC
c/o Jeffrey P. Gray
1025 Mohawk Drive
Wilmette, IL 60091-1271
If to Tenant:
StockerYale, Inc.
32 Hampshire Road
Salem, NH 03079
Attention: Chief Financial
Officer
13. Property Manager: CPManagement,
Inc. at such time as Landlord shall advise Tenant that such firm
has commenced services.
This Lease is subject to the Terms
and Conditions and the provisions of any Exhibits or riders
attached hereto, which Terms and Conditions and Exhibits and riders
are hereby made a part of this Lease.
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LANDLORD :
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TENANT :
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55 HERITAGE (SALEM) LLC
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STOCKERYALE, INC.
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By:
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55 Heritage (Salem Manager) LLC,
Manager
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By:
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/s/ J
EFFREY P. G RAY
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By:
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/s/ M
ARIANNE M OLLEUR
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Name:
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Jeffrey P. Gray
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Name:
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Marianne Molleur
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Title:
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Manager
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Title:
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Sr. VP and CFO
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TERMS AND
CONDITIONS
Landlord hereby leases to Tenant,
and Tenant hereby leases from Landlord, the premises (hereinafter
referred to as the “Leased Premises” ) described
in the Schedule to this Lease (hereinafter referred to as the
“Schedule” ) and designated on the plan attached
hereto as Exhibit A in the Building, including all air
conditioning, mechanical, electrical, plumbing, heating and
ventilating systems, exclusively serving the Leased Premises, but
reserving and excluding therefrom all area above the ceiling and
all area below the concrete floor, subject to the covenants, terms,
provisions and conditions of this Lease. Tenant shall also have the
right to use, on a non-exclusive, unreserved basis, at least
Tenant’s pro rata share of all available parking spaces,
which shall initially be 49 spaces, in the parking area at the
Building.
The term of this Lease (the
“Term” ) shall be as set forth in the Schedule,
subject to extension as provided in Paragraph 31.
All payments due under this Lease
from Tenant shall be mailed to Landlord at the address listed
above, or to such other persons or at such other place as Landlord
may from time to time designate in writing, in coin, currency or
check which, at the time of payment, is legal tender for private or
public debts in the United States of America.
Tenant agrees to pay the applicable
annual Base Rent set forth in the Schedule, payable in equal
monthly installments in the applicable amounts set forth in the
Schedule, in advance, on or before the first day of each and every
month during the Term, without demand or billing and without any
set-off or deduction whatsoever, except that (i) Tenant shall
pay an amount equal to one full monthly installment of Base Rent at
the time of execution of this Lease, which amount shall be credited
to the first full monthly installment of Base Rent payable
hereunder; and (ii) if either the Term or the obligation to
pay Base Rent commences other than on the first day of a month or
ends other than on the last day of a month, the Base Rent for such
month shall be prorated on a per diem basis. The prorated Base Rent
for the portion of the month in which the Term or the obligation to
pay Base Rent commences shall also be paid at the time of execution
of this Lease.
In addition to paying the Base Rent
specified in Paragraph 3 hereof, Tenant shall pay as
“Additional Charges” the amounts determined
pursuant to subparagraphs B. and C. of this Paragraph 4.
Additional Charges shall be payable in the same manner, time and
place as Base Rent and without demand or billing and without any
set-off or deduction whatsoever, except as expressly provided for
in this Paragraph 4. Without limitation on other obligations of
Tenant which shall survive the expiration of the Term, the
obligations of Tenant to pay the Additional Charges provided for in
this Paragraph 4 shall survive the expiration of the
Term.
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A. Definitions . As used in
this Paragraph 4, the following terms shall have the following
meanings:
(i) “Lease Year”
shall mean each calendar year in which any part of the Term falls,
including the calendar years in which the Commencement Date and
Termination Date occur.
(ii) “Operating
Expenses” shall mean all expenses, costs and
disbursements of every kind and nature (determined for each
calendar year on an accrual basis) paid or incurred by Landlord in
connection with the ownership, management, operation, repair and
replacement of the Property, except the following:
(a) Taxes (as such term is
hereinafter defined);
(b) Costs of initial improvements
to, or Alterations (as such term is hereinafter defined) of, any
tenant’s premises;
(c) Principal or interest payments
on loans secured by mortgages or trust deeds on the Property and
ground lease payments, if any;
(d) Costs of capital improvements
(other than repairs and replacements of parts of the Building or
personal property used in connection with the Building), except
that Operating Expenses shall include (i) the cost during the
Term, as reasonably amortized by Landlord with interest on the
unamortized amount at the rate of 8%, of any capital improvement
which is intended to reduce any component cost included within
Operating Expenses and (ii) the cost of any capital
improvements which are intended to keep the Property in compliance
with all governmental rules and regulations applicable from time to
time thereto;
(e) Depreciation or amortization of
any improvements, except as specifically set forth in this
Lease;
(f) Costs of repairs, alterations or
replacements caused by casualty losses to the extent customarily
insured against by owners of office buildings of similar size, age
and construction in the Chicago metropolitan area;
(g) Costs of repairs, alterations or
replacements caused by the exercise of the rights of eminent domain
to the extent Landlord receives net condemnation proceeds
therefor;
(h) Costs of electricity or natural
gas for individual tenant spaces, to the extent such costs are paid
for by tenants;
(i) Costs of any special services
rendered or costs reimbursed to any tenants which are not generally
reimbursed or rendered to either retail or office tenants in the
Building;
(j) Costs and expenses incurred in
connection with leasing space in the Building, such as legal fees
for the preparation of leases, tenant allowances, space
planner
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fees, real estate brokers’
leasing commissions and advertising and promotional expenses,
expenses of any leasing office incurred with regard to leasing the
Building, or portions thereof; or
(k) Court costs and legal fees
incurred with regard to enforcing the obligations of tenants under
other leases.
(iii) “Taxes”
shall mean (a) real estate taxes and assessments, both general
and special, assessed or imposed with respect to the Land or the
Building, (b) ad valorem taxes assessed or imposed upon
personal property owned by Landlord or Property Manager and used in
the operation of the Land or the Building, (c) transit taxes,
(d) taxes based upon leases or the receipt of rent which
either supplement, are in addition to or are in lieu of any item
described in (a) through (c) above, and (e) fees and
expenses incurred by Landlord to obtain a reduction of or a limit
on the increase in any of the items (a) through
(d) above, regardless of whether or not any such reduction or
limitation is obtained; provided, however, that except as provided
above, Taxes shall not include any inheritance, estate, succession,
transfer, gift, franchise, general net income or capital stock tax
imposed upon Landlord. In determining the amount of Taxes for any
year, the amount of special assessments to be included shall be
limited to the amount of the installment (plus any interest payable
thereon) of such special assessment required to be paid during such
year had Landlord elected to have such special assessment paid over
the maximum period of time permitted by law. Except as provided in
the preceding sentence, all references to Taxes “for” a
particular year shall be deemed to refer to Taxes levied or
assessed with respect to such year without regard to when such
Taxes are paid or payable. The amount of any refund of Taxes
received by Landlord shall be credited against Taxes for the year
in which such refund is received but only to the extent such refund
relates to Taxes levied or assessed for a year within the
Term.
B. Expense Adjustment .
Tenant shall pay, as Additional Charges, an amount (hereinafter
referred to as the “Expense Adjustment Amount” )
equal to Tenant’s Expense Share of the amount of Operating
Expenses incurred with respect to each Lease Year; except that
Tenant shall be required to pay only a pro rata amount of the
Expense Adjustment Amount for the Lease Years in which the first
and last days of the Term occur pro rated on a per diem basis. The
Expense Adjustment Amount with respect to each Lease Year shall be
paid in monthly installments in advance on the first day of each
and every calendar month during such Lease Year, commencing on the
Commencement Date, in an amount estimated from time to time by
Landlord and communicated by written notice to Tenant. Landlord
shall cause to be kept books and records showing Operating Expenses
in accordance with an appropriate system of accounts and accounting
practices consistently maintained. Tenant shall not, however, have
any right to audit Landlord’s books and records pertaining to
Operating Expenses. Following the close of each Lease Year,
Landlord shall deliver to Tenant a statement setting forth
(i) the actual Expense Adjustment Amount for such Lease Year;
(ii) the total of the estimated monthly installments of the
Operating Expense Adjustment Amount paid to Landlord for such Lease
Year; and (iii) the amount of any excess or deficiency with
respect to such Lease Year. Tenant shall pay any deficiency to
Landlord as shown by such statement within 30 days after receipt of
such statement. If the total of the estimated monthly installments
paid by Tenant during any Lease Year exceeds the actual Expense
Adjustment Amount due from Tenant for such Lease Year, at
Landlord’s
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option such excess shall be either credited
against payments next due hereunder or refunded by Landlord,
provided Tenant is not then in default hereunder.
C. Tax Adjustment . Tenant
shall pay, as Additional Charges, an amount (hereinafter referred
to as the “Tax Adjustment Amount” ) equal to
Tenant’s Expense Share of the amount of Taxes incurred with
respect to each Lease Year; except that Tenant shall be required to
pay only a pro rata amount of the Tax Adjustment Amount for the
Lease Years in which the first and last days of the Term occur pro
rated on a per diem basis. Tenant shall not, however, have any
right to audit Landlord’s books and records pertaining to
Taxes. The Tax Adjustment Amount with respect to each Lease Year
shall be paid in monthly installments in advance on the first day
of each and every calendar month during such Lease Year, commencing
on the Commencement Date, in an amount estimated from time to time
by Landlord and communicated by written notice to Tenant. Following
receipt of actual tax bills, Landlord shall deliver to Tenant a
statement setting forth (i) the actual Tax Adjustment Amount
for such Lease Year; (ii) the total of the estimated monthly
installments of the Tax Adjustment Amount paid to Landlord for such
Lease Year; and (iii) the amount of any excess or deficiency
with respect to such Lease Year. Tenant shall pay any deficiency to
Landlord as shown by such statement within 30 days after receipt of
such statement. If the total of the estimated monthly installments
paid by Tenant during any Lease Year exceeds the actual Tax
Adjustment Amount due from Tenant for such Lease Year, at
Landlord’s option such excess shall be either credited
against payments next due hereunder or refunded by Landlord,
provided Tenant is not then in default hereunder.
D. Delay in Computing Additional
Charges . Delay in computing any item of Additional Charges
shall neither be deemed a default by Landlord or a waiver of the
right to collect the item of Additional Charges in question.
Notwithstanding anything seemingly to the contrary in this Lease,
Tenant shall make monthly payments on account of each item of
Additional Charges, the amount of which is to be estimated by
Landlord, based on Landlord’s most recent estimate thereof
until Landlord notifies Tenant of a revision to such
Estimate.
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5.
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USE OF
LEASED PREMISES .
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Tenant shall use and occupy the
Leased Premises as an office and for light manufacturing for the
type of business set forth in the Schedule and for no other
purpose.
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6.
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CONDITION
OF LEASED PREMISES .
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A. Delivery Condition .
Landlord shall deliver possession of the Leased Premises to Tenant
in its “AS IS, WHERE IS” condition. No promise of
Landlord to alter, remodel or improve the Leased Premises or the
Property and no representation by Landlord or its agents respecting
the condition of the Leased Premises or the Property have been made
to Tenant or relied upon by Tenant. Tenant acknowledges that it
sold the Property to Landlord and has superior knowledge with
respect to all aspects of the condition of the Property.
B. Signage . Tenant shall be
entitled to retain and maintain its current signage at the
Property. Otherwise, without Landlord’s consent, Tenant will
not place on the exterior of the Building (including both interior
and exterior surfaces of doors and interior surfaces of windows),
or on any part of the Property outside of the Building, any sign,
symbol,
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advertisement or the like visible to public
view. Landlord will not withhold consent for signs or lettering on
the entry doors to the Premises, provided such signs conform to
sign standards for the Building adopted by Landlord in its sole
discretion and all applicable laws, codes, rules and regulations,
and Tenant has submitted to Landlord a plan or sketch in reasonable
detail (showing, without limitation, size, color, location,
materials and method of affixation) of the sign to be placed on
such entry doors. Notwithstanding the foregoing, in the event the
size of Tenant’s signage precludes any other tenant of the
Building from having exterior signage, Tenant shall reduce the size
of such signage in order to allow any tenant with at least 20,000
square feet of rentable square feet to have a sign in proportion to
the sign Tenant maintains.
A. List of Services .
Landlord shall provide the following services on all days during
the Term, except Sundays and holidays, unless otherwise
stated:
(i) Heating and air conditioning to
the extent necessary for normal comfort in the Leased Premises from
Monday through Friday, during the period from 8:00 a.m. to 6:00
p.m. and on Saturday during the period from 8:00 a.m. to 1:00 p.m.,
provided that Tenant’s requirements for heating and air
conditioning do not exceed standards set forth by Landlord from
time to time. Tenant will pay for all heating and air conditioning
requested and furnished prior to or following such hours at rates
to be established from time to time by Landlord, subject to all
governmental rules, regulations and guidelines applicable
thereto.
(ii) Electrical wiring facilities
adequate for lighting fixtures provided by Landlord and for
Tenant’s incidental uses. Tenant acknowledges that
electricity to the Leased Premises shall be supplied by an electric
utility company and not by Landlord. Furthermore, Landlord shall
have the right to designate the electric utility company that will
provide service to the Building and as described in Paragraph 7.C.
below, Landlord shall not be liable to Tenant, or responsible, for
the provision of such electricity service to the Leased Premises.
Tenant shall bear the cost of replacement of all lamps, tubes,
ballasts and starters for lighting fixtures.
(iii) Water from the regular
Building outlets for drinking, lavatory and toilet
purposes.
(iv) Window washing on the inside
and outside of windows in the Building’s perimeter walls as
may be situated in the Leased Premises at intervals to be
determined by Landlord.
Until such time as Landlord exercises its
Takeover Rights (as defined below), Tenant shall have the sole
responsibility to provide the foregoing services for the
Building.
B. Billing For Electricity and
Natural Gas .
(i) Separate Metering .
Tenant shall pay for the use of all electrical and natural gas
service to the Leased Premises directly to the utility companies
furnishing such service provided that Landlord can make
satisfactory arrangements with the utility companies supplying the
electricity and natural gas to the Leased Premises for separate
metering and billing. Tenant shall pay the cost of the installation
of separate meters for the Primary Space. Tenant
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shall be billed directly by such
utility companies, and Tenant agrees to pay each bill promptly in
accordance with its terms. In the event that for any reason Tenant
cannot be billed directly, Landlord shall forward each bill
received by it with respect to the Leased Premises to Tenant and
Tenant shall pay it promptly in accordance with its
terms.
(ii) Lack of Separate
Metering . If the Leased Premises cannot be separately metered
for any reason, Tenant shall pay Landlord as Additional Charges, in
monthly installments at the time prescribed for monthly
installments of Base Rent, an annual amount, as estimated by
Landlord from time to time, which Tenant would pay for such
electricity if the same were separately metered to the Leased
Premises by the local electric and natural gas utility companies
and billed to Tenant at such utility company’s then current
rates.
C. Interruption of Services .
Tenant agrees that Landlord shall not be liable in damages, by
abatement of Base Rent or otherwise, for failure to furnish or
delay in furnishing any service or for any diminution in the
quality or quantity thereof, or for the failure of any utility
company to furnish or delay furnishing any utility service or for
any dimunition in the quality or quantity thereof, when such
failure or delay or diminution is occasioned, in whole or in part,
by governmental rule, regulation or guideline (whether or not
having the force of law), repairs, renewals, or improvements, by
any strike, lockout or other labor trouble, by inability to secure
electricity, gas, water or other fuel at the Building after prompt
reasonable effort so to do, by any accident or casualty whatsoever,
with respect to utility companies if such utility company fails or
refuses to provide service for any reason whatsoever, by act or
default of Tenant or other parties, or by any other cause beyond
Landlord’s reasonable control; and such failures or delays or
diminution shall never be deemed to constitute an eviction or
disturbance of Tenant’s use and possession of the Leased
Premises or relieve Tenant from paying Base Rent or performing any
of its obligations under this Lease. Landlord agrees to use
reasonable efforts to cause the prompt restoration of services it
is responsible for providing in the event of any failure, delay or
diminution described in this paragraph.
D. Charges For Services .
Landlord shall have no obligation to furnish services to Tenant
other than those specified in Paragraph 7.A. above. Should Landlord
provide additional services to Tenant, Tenant shall pay separately
for such additional services (including, but not limited to,
heating and air conditioning and freight elevator services provided
during hours other than those set forth in the applicable
provisions of Paragraph 7.A.), at rates to be established from time
to time by Landlord. Charges for any service for which Tenant is
required to pay (other than electricity and natural gas, for which
Tenant shall pay in the manner prescribed in Paragraph 7.B.
hereof), shall be due and payable within 10 days after they are
billed. If Tenant fails to make payment for any such services,
Landlord, in addition to all other rights and remedies available to
Landlord under this Lease or at law or in equity, may, with notice
to Tenant, discontinue any or all of such services and such
discontinuance shall not be deemed to constitute an eviction or
disturbance of Tenant’s use and possession of the Leased
Premises or relieve Tenant from paying Base Rent or performing any
of its other obligations under this Lease.
E. Energy Conservation .
Notwithstanding anything to the contrary in this Paragraph 7 or
elsewhere in this Lease, Landlord shall have the right to institute
such policies, programs and measures as may be necessary or
desirable, in Landlord’s discretion, for the conservation
and
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preservation of energy or energy related
services, or as may be required to comply with any applicable
codes, rules and regulations, whether mandatory or
voluntary.
Tenant shall, at Tenant’s own
expense, keep the Leased Premises in good order, repair and
condition at all times during the Term, and Tenant shall promptly
and adequately repair all damage to the Leased Premises and replace
or repair all damaged or broken fixtures and appurtenances under
the supervision and subject to the approval of Landlord within any
reasonable period of time specified by Landlord. In addition,
Tenant shall, at Tenant’s expense, make all repairs,
installations and additions to the Leased Premises as may be
required by any law, ordinance, regulation or ruling of any
governmental authority having jurisdiction over the Leased
Premises. If Tenant does not do so, Landlord may, but need not,
make any repairs, replacements, installations, and additions which
Tenant is obligated to make and Tenant shall pay Landlord the cost
thereof, forthwith upon being billed for same. Landlord may also
make repairs, installations and additions to or in the Leased
Premises as Landlord shall desire or deem necessary, or as Landlord
may be required to do by governmental authority or court order or
decree. No such entry or repairs by Landlord shall be deemed
or construed to be a disturbance of Tenant’s quiet or
peaceable possession of the Leased Premises or of any rights of
Tenant under this Lease. Landlord may, but shall not be required
to, enter the Leased Premises at all reasonable times to make such
repairs, installations, alterations, improvements and additions to
the Leased Premises or to the Building or to any equipment located
in the Building as Landlord shall desire or deem
necessary.
A. Tenant shall not make any
alterations, improvements or additions to the Leased Premises
(collectively “Alterations” ) which may affect
the structure of the Building or the Building systems. Any other
Alterations shall be subject to the prior written consent of
Landlord, which consent shall not be unreasonably withheld. If
Landlord consents to any Alterations, it may impose such conditions
with respect thereto as Landlord deems appropriate, including,
without limitation, requiring Tenant to furnish Landlord with
(i) security for the payment of all costs to be incurred in
connection with the Alterations, (ii) insurance against
liabilities which may arise out of the Alterations and
(iii) copies of plans and specifications and all permits
necessary for the Alterations. Any Alterations shall be done at
Tenant’s expense by employees of or contractors hired by
Landlord, except to the extent Landlord gives its prior written
consent to Tenant’s hiring its own contractors. In all
events, Tenant shall use Landlord’s contractors for
Alterations to and Alterations affecting any of the following:
heating, ventilation, air conditioning, electrical, plumbing and
life safety systems. Tenant shall promptly pay to Landlord or
Tenant’s contractors, as the case may be, when due, the cost
of all such Alterations. Tenant shall only use union contractors
and subcontractors. Tenant shall also pay to Property Manager,
whether the Alterations are made by Landlord, Tenant or
Tenant’s contractors, a percentage of the cost of such
Alterations sufficient to reimburse Property Manager for all costs
and expenses arising from the involvement of Landlord or Property
Manager with the Alterations. Said percentage shall be payable as
follows: 50% within five days after Landlord grants its consent to
the Alterations, and the balance within 30 days after completion of
the Alterations. Upon completion of the Alterations, Tenant shall
deliver to Landlord, if payment is made by Tenant directly
to
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contractors, evidence of payment, all
contractors’ and subcontractors’ affidavits, full and
final waivers of all liens for labor, services or materials and
such other supplemental documentation as Landlord may reasonably
require, all in form and substance satisfactory to Landlord. Tenant
shall defend and hold Landlord and the Property harmless from, and
shall pay, all liabilities, claims, judgments, costs, damages,
liens and expenses related to the Alterations. All repairs and
Alterations done by Tenant or its contractors pursuant to
Paragraphs 8 or 9 shall be done in a first-class workmanlike manner
using only good grades of materials and shall comply with all
insurance requirements and all applicable laws, ordinances, rules,
regulations and orders of all courts and other tribunals,
governmental and quasi-governmental departments and agencies. At
all times Tenant shall cause contractors and others performing
Alterations for Tenant to work in harmony with the contractors,
agents and employees performing work in the Building for Landlord
or others.
B. All Alterations, whether
temporary or permanent in character, made or paid for by Landlord
or Tenant, shall without compensation to Tenant become
Landlord’s property at the termination of this Lease by lapse
of time or otherwise and shall, unless Landlord requests their
removal (in which case Tenant shall remove the same in the same
manner and time as is provided in Paragraph 17 with respect to
Tenant’s property) be relinquished to Landlord in good
condition, order and repair, ordinary wear and tear excepted. At
such time as Tenant requests Landlord’s consent to make
Alterations to the Leased Premises, Tenant may also request
Landlord’s consent to leave such Alterations at the
termination of this Lease, by lapse of time or otherwise.
Landlord’s consent or refusal to consent to Tenant leaving
such Alterations at the termination of this Lease shall be given at
the same time as (but shall be an independent determination from)
Landlord’s consent to the making of such Alterations. Such
Alterations to which Landlord has given its consent to leave
pursuant to this Paragraph 9.B., and which are in good working
order and condition at the end of the Lease (hereinafter called
“Approved Alterations” ) may be left by the
Tenant at the termination of this Lease. Landlord may also grant,
at the time Tenant requests consent to make Alterations, the right
to remove such Alterations to the Leased Premises which were paid
for by Tenant if (i) such removal in Landlord’s
reasonable judgment shall not damage the Leased Premises or the
Building; (ii) Tenant shall pay the cost of any damage caused
in the removal; and (iii) Tenant indemnifies and holds
Landlord harmless from and against any loss, cost or damage arising
from the removal.
C. Subject to the terms set forth
above, Tenant shall be obligated to construct a demising wall from
material reasonably required by Landlord (i) between the
Primary Space and the rest of the Building at such time as Tenant
subleases a portion of the Other Space adjacent to the Primary
Space or Landlord advises Tenant that it has entered into a lease
for a portion of the Other Space adjacent to the Primary Space
(which cost shall be borne equally by Landlord and Tenant,
provided, however, in no event shall Landlord be obligated to pay
more than $50,000), and (ii) between the space Onvio Server
LLC (“Onvio”) is occupying pursuant to the subtenancy
described in Section 16.H. below. Tenant shall diligently
complete such walls.
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10.
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COVENANT
AGAINST LIENS .
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Tenant has no authority or power to
cause or permit any lien or encumbrance of any kind whatsoever,
whether created by act of Tenant, operation of law or otherwise, to
attach to or be placed upon Landlord’s title or interest in
the Land, Building or Leased Premises, and any and all
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liens and encumbrances created by Tenant shall
attach to Tenant’s interest only. Tenant covenants and agrees
not to suffer or permit any lien of mechanics or materialmen or
others to be placed against the Land, Building or the Leased
Premises or Tenant’s interest in the Leased Premises, with
respect to work or services performed or claimed to have been
performed for or materials furnished or claimed to have been
furnished to Tenant or the Leased Premises, and, in case of any
such lien attaching or claim thereof being asserted, Tenant
covenants and agrees no later than 10 days from the filing thereof
or such claim being asserted (i) to cause it to be released
and removed of record or (ii) to provide Landlord with
endorsements (satisfactory to Landlord and Landlord’s
mortgagee) to Landlord and Landlord’s mortgagee’s title
insurance policies insuring against the existence of or attempted
enforcement of such lien or (iii) to provide Landlord with a
bond from a company satisfactory to Landlord and in form, substance
and amount satisfactory to Landlord, insuring against loss arising
from the existence or attempted enforcement of such lien. In the
event that such lien is not released, removed, insured or bonded
over within said 10 day period Landlord, at its sole option, may
take all action necessary to release and remove such lien (without
any duty to investigate the validity thereof) and Tenant shall
promptly upon notice, either before or after such release and
removal, pay or reimburse Landlord for all sums, costs and expenses
(including reasonable attorneys’ fees) incurred by Landlord
in connection with such lien, together with interest thereon at the
Interest Rate (as defined below).
A. Waiver of
Claims/Subrogation . To the extent not prohibited by applicable
law, Landlord and Tenant each hereby waive any and all claims and
rights of recovery against the other, or against the officers,
directors, employees, agents and representatives of the other, for
loss damage or injury to their property (including business
interruption and rent loss) sustained by such waiving party,
regardless of fault or negligence and regardless of the amount of
insurance proceeds collected or collectible under any insurance
policies in effect; except, that nothing contained herein shall
waive or limit any of Landlord’s or Tenant’s respective
termination, abatement or self-help rights or remedies expressly
set forth in this Lease. Landlord and Tenant each agree to give
written notice of the terms of this mutual waiver to each insurance
company which has issued, or in the future may issue, policies of
physical damage to it, and to have said insurance policies properly
endorsed to waive subrogation rights and, if necessary, to prevent
the invalidation of said insurance coverage by reason of said
waiver.
B. Coverage . Tenant shall
purchase and maintain insurance during the entire Term for the
benefit of Tenant and Landlord, its beneficiaries and managing
agent (as their interests may appear) with terms, coverages and in
companies satisfactory to Landlord, and with such increases in
limits as Landlord may from time to time request. Tenant shall
initially maintain the following coverages in the following
amounts:
(i) Commercial general liability
insurance covering claims of bodily injury, personal injury and
property damage arising out of Tenant’s operations, assumed
liabilities or use of the Leased Premises, for limits of liability
not less than $3,000,000 combined single limit for bodily injury
liability, personal injury liability, and property damage
liability.
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(ii) “Special Form”
insurance covering all additions, improvements and alterations to
the Leased Premises and all office furniture, trade fixtures,
office equipment, merchandise and all other items of Tenant’s
property in the Leased Premises. Such insurance shall be written on
“all risks” of physical loss or damage basis, for the
full replacement cost value of the covered items and in amounts
that meet any coinsurance clauses of the policies of
insurance.
Tenant shall, prior to the
commencement of the Term, furnish to Landlord certificates
evidencing the coverages required by this Paragraph, which
certificates shall state that such insurance coverage may not be
changed or canceled without at least 60 days prior written notice
to Landlord. All insurance policies obtained by Tenant pursuant to
this Section shall be endorsed to name as additional insureds
(i) Landlord and the partners in Landlord, (ii) the owner
or owners of the Land and Building, if such are other than Landlord
and Tenant is given notice of such fact, (iii) the beneficiary
or beneficiaries of Landlord, if Landlord is a land trust,
(iv) Property Manager, (v) the holder of each mortgage
encumbering the Property of which Landlord shall have notified
Tenant, and (vi) such other persons as Landlord may from time
to time designate.
Until such time as Landlord
exercises its Takeover Rights, Tenant shall also be obligated to
maintain casualty insurance in a form, amounts and from an insurer
required by Landlord’s mortgagee. Landlord’s mortgagee
accepted the coverages set forth in the certificates of insurance
previously provided to Landlord by Tenant.
C. Avoid Action Increasing
Rates . Tenant shall comply with all applicable laws and
ordinances, all orders and decrees of court, all requirements of
other governmental authorities, and requirements and
recommendations of insurance rating agencies with respect to the
Leased Premises, and shall not, directly or indirectly, make any
use of the Leased Premises which may thereby be prohibited or be
dangerous to person or property, which may jeopardize any insurance
coverage, increase the cost of insurance or require additional
insurance coverage. If Tenant fails to comply with the provisions
of this subparagraph C., Landlord, in addition to any other rights
or remedies available to Landlord, shall have the option to
terminate this Lease and may require Tenant to make immediate
payment of any increase in Landlord’s insurance
costs.
A. Paragraph 8 hereof
notwithstanding, if the Leased Premises or the Building (including
machinery or equipment used in its operation) shall be damaged by
fire or other casualty and if such damage does not, in the judgment
of Landlord, render all or a substantial portion of the Leased
Premises or Building untenantable, then Landlord shall, subject to
the limitations set forth below, repair or restore such damage to
the Building (but not the Leased Premises) with reasonable
promptness, subject to reasonable delays for insurance adjustments
and delays caused by matters beyond Landlord’s reasonable
control. Landlord shall not be obligated to expend in repairs and
restoration an amount in excess of the proceeds of insurance
recovered with respect to such casualty. If any such damage renders
all or a substantial portion of the Leased Premises or Building
untenantable, Landlord shall have the right to terminate this Lease
as of the date of such damage (with appropriate prorations of Base
Rent being made for Tenant’s possession after the date of
such damage of any tenantable portions of the Leased Premises) upon
giving written notice to Tenant at any time within 120 days after
the date of such damage.
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Landlord shall have no liability to Tenant, and
Tenant shall not be entitled to terminate this Lease by virtue of
any delays in completion of repairs and restoration. However, Base
Rent shall abate as to those portions of the Leased Premises as
are, from time to time, untenantable as a result of such damage
until Landlord shall have completed the repairs and restorations
required of Landlord hereunder.
B. In the event the Leased Premises
or the Building is damaged by fire or other casualty resulting from
the intentional misconduct of Tenant, its agents, contractors,
employees or invitees and if this Lease shall not be terminated by
Landlord as a result of such damage, Tenant shall not be released
from any of its obligations hereunder, including, without
limitation, its duty to repair the Leased Premises and its
liability to Landlord for damages caused by such fire or other
casualty and its duty to pay Base Rent and Additional Charges,
which Base Rent and Additional Charges shall not be
abated.
C. Tenant shall repair the Leased
Premises and all Alterations at the sole cost and expense of
Tenant. All such repair or restoration shall be done in accordance
with the provisions of Paragraphs 8 and 9 hereof. In the event the
Leased Premises are not repaired or reconstructed, all proceeds of
insurance whether carried by Landlord or Tenant shall be payable to
Landlord.
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13.
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WAIVER OF
CLAIMS - INDEMNIFICATION .
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A. Without limiting the generality
of the waiver of claims contained in Paragraph 11.A. above, Tenant
hereby waives all claims and rights of recovery against Landlord
and the Landlord Indemnitees (hereinafter defined) for any loss or
damage to the Tenant’s property or interests (including
business interruption), which loss is insured against, or required
to be insured against, by the Tenant pursuant to Paragraph 8.B.,
regardless of fault or negligence and regardless of the amount of
insurance proceeds collected or collectible under any insurance
policies in effect, and the Tenant represents and warrants that all
such policies permit such waiver and contain, and will contain,
enforceable waiver of subrogation endorsements. In addition, and
without limiting the generality of Paragraph 11.A., the Tenant
agrees in the event of any loss or damage to the Tenant’s
property or interests (including business interruption), the Tenant
shall resort to the Tenant’s insurance coverage prior to
asserting any claim or demand against Landlord, the Landlord
Indemnitees or any of their respective assets.
B. Tenant shall indemnify, defend
and hold harmless Landlord, the property manager of the Property
and their respective directors, officers, employees, agents and
contractors (collectively, the “Landlord
Indemnitees” ) against any claims by any third party for
injury to any person or damage to or loss of any property occurring
in the Property and arising from any act or omission of Tenant or
any of Tenant’s employees, agents or contractors. If any such
proceeding is filed by a third party against Landlord or any such
Landlord Indemnitee, Tenant shall defend Landlord or such Landlord
Indemnitee, or both, as the case may be, in such proceeding at
Tenant’s sole cost by legal counsel reasonably satisfactory
to Landlord and such Landlord Indemnitee, if requested by Landlord.
In no event shall the Tenant be obligated to indemnify Landlord or
any of the Landlord Indemnitees for any willful or negligent acts
or omissions of Landlord or any of the Landlord
Indemnitees.
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C. Landlord shall indemnify, defend
and hold harmless Tenant and its directors, officers, employees,
agents and contractors (collectively, the “Tenant
Indemnitees” ) against any claims by any third party for
injury to any person or damage to or loss of any property occurring
in the Property and arising from any act or omission of Landlord or
any of the Landlord’s employees, agents or contractors. If
any such proceeding is filed by a third party against Tenant or any
such Tenant Indemnitee, or both, as the case may be, Landlord shall
defend Tenant or such Tenant Indemnitee in such proceeding at
Landlord’s sole cost by legal counsel reasonably satisfactory
to Tenant and such Tenant Indemnitee, if requested by Tenant. In no
event shall the Landlord be obligated to indemnify Tenant or any of
the Tenant Indemnitees for any willful or negligent acts
or
