Exhibit 10.17
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STATE OF SOUTH CAROLINA
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TRIDENT RESEARCH CENTER
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LEASE
AGREEMENT
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COUNTY OF
CHARLESTON
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THIS LEASE AGREEMENT, is made and
entered into on this 11 th day of March, 2005, by and between
the SOUTH CAROLINA RESEARCH AUTHORITY, a South Carolina public
non-profit corporation, (hereinafter referred to as the
“Landlord”) and SAFLINK (hereinafter referred to as the
“Tenant”).
WITNESSETH
1. Premises : The Landlord
hereby leases to the Tenant, and the Tenant hereby leases from the
Landlord, the premises of approximately 4,484 rentable square feet
(hereinafter referred to as the “Premises”) in Building
C at the Trident Research Center, 5300 International Blvd.,
Charleston, SC 29418 (the “Building”) and being more
particularly described in and shown on the floor plan attached
hereto as Exhibit “A” and made a part
hereof.
TO HAVE AND TO HOLD THE PREMISES
upon the terms and conditions hereinafter set forth.
1. Term : The term of this
Lease shall be for a period of one (1) year, commencing on February
26, 2005 (the “Commencement Date”), and ending at
midnight on February 25, 2006, unless sooner terminated in
accordance with the terms hereinafter provided.
2. Possession : If the Tenant
accepts possession of the Premises before the Commencement Date
specified hereinabove, the term and rental shall commence on such
earlier date. If for any reason Landlord does not substantially
complete construction of the Premises prior to the Commencement
Date, such failure will not affect the validity of this lease, but
in such case Tenant shall not be obligated to pay rent until such
construction is substantially completed and possession of the
Premises is delivered to Tenant. Landlord shall have no liability
to Tenant for failure to substantially complete construction prior
to any date or dates. Tenant’s occupancy of the Premises
shall constitute acceptance of the work performed and completed by
Landlord, unless otherwise agreed in writing by the
parties.
3. Rent : The Tenant shall
pay to the Landlord an total rental for the initial lease term of
$92,677.52 (hereinafter referred to as the “Base
Rent”), payable in advance, on the first day of each and
every calendar month during the term thereof. The first installment
shall be in the amount of $8,415.69, for the period of February 26,
2005 through March 31, 2005. The remaining monthly installments
shall be in the amount of $7,660.17. All rent payments shall be
made to Landlord at its principal office at 1330 Lady Street, Suite
503, Columbia, South Carolina 29201, or at such other place as the
Landlord may designate in writing to Tenant. If rental commences on
a date other than the first day of the month, rent for the first
month shall be prorated and paid on or before date of possession.
All rentals due hereunder which are not received by the Landlord by
the tenth (10th) day of each month shall be subject to a
delinquency charge of one and one-half (1.5%) percent per month on
the unpaid balance, computed from the first day of every month for
which rental is due. Said delinquency charge shall be subject to
the default provisions herein.
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4. Base Rent Adjustment : On
the first anniversary of the Commencement Date of this lease, and
annually thereafter, the Base Rent payable by Tenant shall be
increased in proportion to the percent change in the Consumer Price
Index figure, as hereinafter defined, between the most recent
Consumer Price Index figure published prior to the Commencement
Date, and the most recent Consumer Price Index figure published
prior to the particular anniversary date; provided, however, that
in no event shall the rent for any month after such anniversary be
less than the rent for the month immediately preceding such
anniversary. As used herein, the term “Consumer Price
Index” shall mean Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average of All Items,
l982-l984=l00, or the successor of that Index, as published by the
Bureau of Labor Statistics, U.S. Department of Labor. Should
Landlord lack sufficient data to make the proper determination on
the date of any adjustment, Tenant shall continue to pay the
monthly rent payable immediately prior to the adjustment date. As
soon as Landlord obtains the necessary data, Landlord shall
determine the rent payable from and after such adjustment date and
shall notify Tenant of the adjustment in writing via ordinary mail.
Should the monthly rent for the period following the adjustment
date exceed the amount previously paid by Tenant for that period,
Tenant shall forthwith pay the difference to Landlord. Should the
Consumer Price Index as above described cease to be published, a
reasonably comparable successor index shall be selected by
Landlord.
5. Use : The Tenant shall use
and occupy the Premises solely for business office purposes and
shall comply with all laws, ordinances, orders, or regulations of
any lawful authority having jurisdiction over the Premises and the
use thereof.
6. Assignment and Subletting
: The Tenant shall not, without the prior written consent of the
Landlord, such consent not to be unreasonably withheld, assign this
Lease or any interest therein, or sublet the Premises or any part
thereof, or permit the use of the Premises by any party other than
the Tenant. Consent to one assignment or sublease shall not
constitute a waiver of this provision with respect to subsequent
transactions. Each subtenant or assignee shall be liable to
Landlord for all obligations of the Tenant hereunder, but the
Tenant shall not be thereby relieved of such
obligations.
7. Improvements : The Demised
Premises are being provided “as is”. All other
improvements, alterations and additions to the Premises desired by
Tenant shall be made only at Tenant’s expense, in good and
workmanlike manner and in accordance with plans and specifications
which have been previously approved in writing by the Landlord. If
the improvements, alterations, or additions are to be made by a
contractor other than Landlord’s, Landlord reserves the right
to approve such contractor, which approval shall not be
unreasonably withheld, and to require adequate lien waivers, bonds,
permits, licenses and insurance. All improvements and additions
made by the Tenant and permanently attached to the Premises,
including without limitation all partitions, carpets, lighting
fixtures, doors, hardware, shelves, cabinets and ceilings, shall
remain in the Premises and shall remain with the Buildings at the
expiration or earlier termination of this Lease .
8. Utilities and Services :
Landlord shall, during the term hereof, furnish Tenant, without
charge: (a) reasonable quantities of water to lavatories, toilets
and water fountains in or appurtenant to the Premises; (b) electric
power for lighting and small business machines purposes only, such
as electric
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typewriters and calculators including personal
computers and calculators; (c) heat and air conditioning reasonably
sufficient to heat or cool the Premises from 8:00 a.m. to 6:00 p.m.
on Mondays through Fridays except for legal holidays, and from 8:00
a.m. to 1:00 p.m. on Saturdays, and in conformity with all
applicable federal and state regulations; (d) janitorial services,
on Monday through Friday, for general care and cleaning of the
Premises; and (e) adequate parking space to be provided at no
additional cost to Tenant. Landlord shall not be liable for loss or
damage arising from failure to provide the foregoing utilities or
services as a result of strike, casualty, repairs, or other causes
beyond Landlord’s reasonable control. Tenant shall furnish,
at its own expense and without damage or threat of damage to the
Building or any part of the Building, any other utilities or
services required for its use of the Premises, including, but not
limited to, telephone service and electric power and connections
for electronic data processing equipment and other large business
equipment.
9. Maintenance : The Landlord
shall, at its own expense, after notice from the Tenant of the need
thereof, make any repairs to the Buildings’ structure and
concealed systems (plumbing, electrical, heating and air
conditioning) within or serving the Premises as may be necessary
for safety and occupancy, except that Landlord shall not be
required to make, and Tenant shall make, any such repairs made
necessary by the act or neglect of Tenant, its agents, employees or
visitors. Landlord shall not be liable for loss or damage resulting
from any defective condition in or about the Premises unless such
loss or damage results from Landlord’s negligent or willful
failure to remedy such condition within a reasonable time after
Landlord receives notice of or becomes aware of such condition.
Except as expressly provided above, Tenant shall, at its own
expense, keep and maintain the Premises in good order and repair
during the term of this Lease, and shall surrender same to Landlord
at the expiration or earlier termination of this Lease in as good
condition as they were when received (or subsequently improved or
altered), normal wear and tear excepted. Landlord shall have the
right to make alterations on or additions and repairs to the
Premises, to build additional stories on the Premises, and to build
adjacent to or adjoining the Premises; and shall have an easement
for construction through the Premises for such alterations,
modifications, additions or repairs, provided that said easement
shall not unreasonably interfere with Tenant’s right of quiet
enjoyment of the Premises.
10. Property of Tenant :
Tenant may, and at the expiration or earlier termination hereof,
shall, remove all furniture, equipment, and other personal property
which Tenant shall have purchased and placed in the Premises;
provided that Tenant shall repair any damage to the Premises caused
by such removal. All such property shall, during the term thereof,
be at the risk of Tenant only, and Landlord shall not be liable for
any loss thereof or damage thereto resulting from any cause
whatsoever; and each policy of insurance covering such property
shall contain a standard waiver of subrogation endorsement. Any
such property not removed at the expiration or earlier termination
of this Lease shall be deemed abandoned and may be disposed of by
the Landlord in any manner whatsoever.
11. Increase In Cost of
Services : For purposes of this and other covenants requiring
similar proration, it is agreed that the Premises contains 4,484
rentable square feet and total rentable area belonging to Landlord
is 178,082 rentable square feet. Tenant’s prorata share is
2.52 %. As used herein, Base Year shall be defined as July 1, 2005
and June 30, 2006 and Comparison Year shall be defined as each year
of the lease term after the Base Year. Direct Expenses are defined
as those expenses reasonably incurred by Landlord with respect to
the maintenance and operation (excluding capital expenses) of the
Building, including water and sewer, heating, lighting, power,
fuel, labor, supplies, janitor service, insurance and all other
items properly constituting direct operating costs according to
standard accounting practices published by the American Institute
of Certified Public Accountants.
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If the Direct Expenses for any
Comparison Year are in excess of the Direct Expenses for the for
the Base Year, Tenant shall pay Tenant’s prorata share of
such excess as additional rent to Landlord. As soon as possible
after the end of the Base Year, Landlord shall provide Tenant with
a written statement via ordinary mail of the estimated Direct
Expenses for the Comparison Year. Beginning in the thirteenth
(13 th ) month of the lease term after the
commencement of the Base Year, Tenant shall pay as additional
monthly rent an amount equal to one-twelfth (1/12) of
Tenant’s prorata share of the estimated increase in Direct
Expenses for the Comparison Year. As soon as possible after the end
of the Comparison Year, Landlord shall provide Tenant by ordinary
mail with a written statement of actual Direct Expenses. Any
overpayments shall be credited against subsequent rent payments and
any underpayments shall be paid by Tenant in a lump sum within
thirty (30) days of receipt of said statement. The schedule set
forth herein shall be maintained throughout the term of the lease.
Tenant maintains the right to audit Landlord’s records in
order to verify the accuracy of Direct Expenses. Unless Tenant
shall take exception to any items of such Direct Expenses within
thirty (30) days after delivery of the foregoing statement by
providing written notice to Landlord, such statement shall be
considered as final and accepted by Tenant.
12. Taxes : Tenant shall pay
prior to delinquency, all taxes and assessments of every kind or
nature imposed or assessed upon or with respect to furnishings,
fixtures, equipment, and other property of Tenant placed in the
Premises. Landlord does not currently pay real estate taxes. In the
event Landlord becomes so obligated in the future, Tenant shall pay
as additional rent Tenant’s prorata share of any and all
increases in the taxes and other assessments assessed or levied
against the property of which the premises is a part, over and
above amounts assessed for the initial full year taxed as well as
any special assessments imposed upon the premises for any purpose
whatsoever during the term, whether the increase in taxation
results from the imposition of taxes, a higher tax rate or an
increase in the assessed valuation of the demised premises or of
both. Such payment shall be made by Tenant to Landlord not later
than thirty (30) days following date on which Landlord provides
Tenant with written evidence of such tax liability by ordinary
mail. If the final year of the lease fails to coincide with the tax
year, then the amount due shall be prorated for the number of
months of the Lease term during the year. This obligation shall
survive the termination or expiration of this Lease, and if this
Lease shall expire prior to the receipt of the current year’s
tax or assessment notice, Landlord shall require Tenant to deposit
an amount with the Landlord based upon the prior year’s tax
or assessment increase. This amount shall be due upon delivery of
written notice via ordinary mail from Landlord at any time prior to
the expiration or termination of this Lease. An appropriate
adjustment will be made upon the receipt of the current
year’s tax or assessment notice. In the event that the
documentary stamp tax, or tax levied on the rental, leasing or
letting of the premises