Exhibit 10.3
OFFICE BUILDING
LEASE
THIS OFFICE BUILDING
LEASE (the
“Lease”) dated this 21st day of August, 2002, by and
between JOHN C BILLS ENTERPRISES, LTD., a Florida Limited
Partnership, (hereinafter called “LESSOR”), whose
address for purposes hereof is 3950 RCA Boulevard, Suite 5000, Palm
Beach Gardens, Florida 33410 and CROSS MATCH TECHNOLOGIES,
INC., a Delaware corporation (hereinafter called
“LESSEE”), whose address for purposes hereof, until
commencement of the terms of this Lease is 3960 RCA Boulevard,
Suite 6001, Palm Beach Gardens, Florida 33410.
1. LEASED PREMISES : Subject
to and upon the terms, provisions, covenants and conditions
hereinafter set forth, and each in consideration of the duties,
covenants and obligations of the other hereunder, LESSOR does
hereby lease, demise and let to LESSEE and LESSEE does hereby
lease, demise and let from LESSOR those certain premises
(hereinafter sometimes called the “Premises” or
“Leased Premises”) with an address of Suite #5001, in
that certain building known as the NorthCorp Office Building, (the
“building”) located on RCA Blvd., within the NORTHCORP
PLANNED COMMUNITY DISTRICT, Palm Beach Gardens, Florida (the
“Development”). Leased Premises are more specifically
defined as 71,716 Net Rentable Square Feet of office/light
industrial space, (Area I = 36,080 s/f; Area II = 35,636 s/f),
expanding after twelve (12) months to 77,351 Net Rentable
Square Feet of office/light industrial space (Area I = 36,080 s/f;
Area II = 41,271 s/f), as depicted on Five Year Schedule and Floor
Plan, which are attached hereto and made a part hereof as Exhibit
“A” and Exhibit “B”.
2.
TERM : This
Lease shall be for a term of Seven (7) years and Fifteen
(15) days, commencing on the 16 th
day of
December, 2002 and ending on the 31 st
day of
December, 2009, hereinafter referred to as the “Lease
Term” or “Term”.
3. RENTAL : LESSEE agrees to pay LESSOR an initial Annual
Rental (“Rental”) of FIVE HUNDRED FIFTY NINE THOUSAND,
NINE HUNDRED SEVENTEEN AND 60/100 DOLLARS ($559,917.60), plus state
sales tax. Said initial Annual Rental shall be due and payable in
advance in equal monthly installments of FORTY SIX THOUSAND, SIX
HUNDRED FIFTY NINE AND 80/100 DOLLARS ($46,659.80), plus state
sales tax, if any. Said balance shall be due and payable on the
first day of each and every calendar month during the term of this
Lease, until such time as the rental amount is increased, in
accordance with paragraph #5 below. Payment of amounts due under
this Lease, shall be made in lawful (legal tender for public or
private debts) money of the United States of America, at the
Management Office of LESSOR or elsewhere as designated from time to
time by LESSOR’S written notice to LESSEE.
4. SECURITY DEPOSIT
: LESSEE, concurrently with the
execution of this Lease, will deposit with LESSOR the sum of TWO
HUNDRED SIXTY FIVE THOUSAND, ONE HUNDRED FORTY FIVE AND 79/100
DOLLARS ($265,145.79), which sum represents first month’s
Rental plus State Sales Tax, last month’s Rental plus State
sales Tax, and a Security deposit, which sums shall be retained by
LESSOR as Security for the executed Lease. Said DEPOSIT shall be
retained by LESSOR as security for the faithful performance by
LESSEE of the terms, provisions, and conditions of this Lease. Any
Security Deposit remaining in LESSOR’S possession after the
termination of the Lease, which has not been utilized as rent, or
offset for repairs or expenses allowed under this Lease, shall be
promptly returned to LESSEE, following LESSEE’S vacation of
the Leased Premises.
5. COST OF LIVING
INCREASE : The annual
Rental shall be increased by 3.00% on the anniversary date of the
Commencement Date, for each year of the lease term, and each year
during any extension thereof, in accordance with the amounts set
forth on Exhibit A, attached hereto.
6. REPAIRS, MAINTENANCE AND
OPERATING COSTS : The
parties hereto acknowledge and agree, that it is the intent of the
LESSOR and the LESSEE, that this Lease be a “Modified
Gross” Lease. LESSEE shall, at all times during the term, and
at its own cost and expense, put, keep, replace and maintain in
thorough repair and in good, safe and substantial order and
condition, all improvements of the Leased Premises, in existence at
the commencement of the term and thereafter erected in the Leased
Premises, or forming a part thereof, and their full equipment and
appurtenances, whether or not necessitated by wear, tear or
defects, and shall use all reasonable precautions to prevent waste,
damage or injury. LESSEE will replace at its own expense any and
all broken glass caused by LESSEE in and about said Leased
Premises. LESSEE shall not be responsible for any damage caused by
any negligent or intentional act or omission of LESSOR, its agents,
employees or invitees.
LESSEE shall also be responsible for
its Pro-Rata Share , based on the percentage of total
building square footage leased by LESSEE, of any increases in
real estate taxes and insurance of the development, above the base
year, 2002 .
LESSOR shall be responsible for the
maintenance and upkeep of the foundations, exterior walls,
downspouts, gutters and roof, to include roof supports. LESSOR
reserves the right to make any structural changes, or repairs to
the premises, that may be reasonably or legally required. LESSOR
shall complete such changes with all due diligence, and in a manner
that is least disruptive to LESSEE’S operations.
LESSOR shall be responsible for
maintenance and operation of common areas of the Development, of
which the Leased Premises is a part. For the purposes of this
Section 6, maintenance and operating costs shall mean the
costs incurred by LESSOR in maintaining and operating common areas
of the Development, and shall include common area utilities,
property management, common area air conditioning maintenance,
parking lot maintenance, pest control, security services salaries,
wages and costs of engineers, superintendents, watchmen and other
employees, grounds maintenance, common area maintenance and repair
expense, supplies, water/sewer service to the Leased Premises,
sanitation pick-up, real estate taxes and property insurance and,
in general, all common area costs and expenses.
6 (a). HVAC:
During the term of this lease and
any extensions thereof, LESSEE shall inspect, repair, replace (when
applicable), and maintain in good operating condition, all HVAC
systems and equipment which service the Leased Premises. LESSEE
shall comply with all governmental mandates regarding temperature
control. LESSOR and LESSEE acknowledge that some of the HVAC
systems serving the Leased Premises, are under warranty as of the
commencement of this Lease, and that LESSOR and LESSEE shall share
equally in any and all benefits derived from said
warranties.
7. UTILITIES AND
SERVICE: LESSOR shall pay
all charges and expenses for water and sewer service to the Leased
Premises. LESSEE shall pay all other charges and expenses for
utilities and services used upon and in connection with the Leased
Premises, including but not limited to electricity, telephone
service, pest control and janitorial services and shall pay same
not more than ten (10) days after each bill shall become due
and payable. LESSOR, at LESSOR’S cost, shall supply trash
disposal bins in a location of LESSOR’S choice, which LESSEE
shall utilize for the disposal of its office debris.
8. USE: The LESSEE will use and occupy the Leased
Premises for the following use or purpose and for no other use or
purpose: GENERAL OFFICE AND MANUFACTURING/ASSEMBLY
.
9. TENANT
IMPROVEMENTS: LESSOR
shall provide a buildout allowance of approximately $15.00 p/s/f,
based upon 41,271 s/f, toward the Lessee Improvements, in
accordance with floor plan drawings for Area II, as depicted in
Exhibit “B” attached hereto. (as described, the
“Lessee Improvements”) Further, Area I is
approximately 36,080 n/r/s/f of existing “As Is” office
space, located in Building 50 (3950 RCA Blvd.); Area II ,
initially , is approximately 35,636 n/r/s/f of space,
expanding after twelve (12) months to approximately 41,271 s/f
of space, located in Building 60 (3960 RCA Blvd.), and will be
constructed by Lessor. Interior finish applicable to Area II
., shall be in accordance with the space plan prepared by
Owner’s architect, D. William Beebe, which Lessee hereby
approves , and will include paint, finished floors, carpeted
office areas, ceiling tiles, lighting, sprinklers, HVAC, electrical
panels and outlets, and restrooms. The Lessee Improvements shall be
constructed by LESSOR in accordance with that Work Letter Agreement
executed by LESSEE and LESSOR simultaneously herewith, a copy of
which is attached hereto as Exhibit “C”. The Lessee
Improvements shall be completed on or before March 1, 2003. If
not, LESSEE may terminate this Lease, upon which this Lease shall
be null and void. Any delay(s) resulting from changes to
Lessee’s interior space plan, which may delay completion of
the Lessee improvements, or LESSEE’s occupancy of the
Premises, shall not effect the commencement date of the Lease, nor
the payment of rent, as set forth in paragraphs #11 and #39
herein.
LESSEE shall be permitted to install
LESSEE’s fixtures, personal property, and equipment, during
the thirty days prior to LESSEE’s occupancy, without any cost
to Tenant. LESSOR will grant LESSEE reasonable access to common
areas for the purpose of installing and maintaining LESSEE’s
own telephone system, and network computer system. LESSEE hereby
indemnifies and holds LESSOR harmless, with regard to all systems
and equipment mentioned in this paragraph number nine. LESSEE also
indemnifies LESSOR against any potential negative or detrimental
impact said system might have upon the capacity, quality, or
condition of existing telephone equipment and service in the
building.
LESSOR warrants that the
building’s telephone and electric systems, which are made
available to the Leased Premises, are of sufficient quality and
capacity to support any normal business office telephone and
computer requirements, including network computer
systems.
All Lessee improvements, structural
or permanent in nature, made to the Leased Premises shall be the
property of the LESSOR during the Term of this Lease and shall
remain the property of the LESSOR upon termination of this
Lease.
10. GUARANTY:
In lieu of a guaranty of the Lease,
LESSEE shall provide LESSOR with a Letter Of Credit, in the form
attached hereto as Exhibit “D”, in the amount of
$200,000. Said Letter of Credit, will be released by LESSOR,
conditioned upon LESSEE’s stock being publicly traded, at or
above $12.00 per share, for not less than 90 consecutive days, any
time during the Lease Term.
11. POSSESSION AND COMMENCEMENT
OF RENT: This Lease,
and the payment of rent for both Area I and Area II, shall commence
not later than December 16, 2002, at which time Lessee
shall be forever released and discharged from its obligations under
its prior Lease for Suite 6001.
12. LESSEE’S RIGHTS AND
RESTRICTIONS AS TO BUSINESS SIGNS: LESSEE or LESSEE’S designee may, at its
own expense, erect or place, of a quality and in a manner approved
in writing by LESSOR, and based on LESSOR’S building
standard, a sign concerning its business, at the entrance door of
its office suite or as designated by LESSOR, it being understood
between the Parties hereto that the maintenance of such signs shall
be kept in a good state of repair and LESSEE shall repair any
damage that may have been done to the premises by LESSEE’S
erection, existence or removal of such signs. At the end of the
Lease term, LESSEE shall remove any signs installed by LESSEE at
its expense. It is the intent of LESSOR to have uniform LESSEE
signs.
Except as provided above, no sign,
notice or other advertisement shall be inscribed, painted, affixed
or displayed on any of the windows or on the exterior of any of the
doors of the subject premises, nor anywhere outside the Leased
Premises without prior written consent of LESSOR or its agents.
LESSOR’S consent shall not be unreasonably withheld,
conditioned, or delayed. It is understood, that all exterior signs
are subject to regulation and approval by the City of Palm Beach
Gardens, Florida.
13. CONDITION OF
PREMISES: Possession of
the Leased Premises by LESSEE shall be conclusive evidence as
against LESSEE that the Leased Premises were in good and
satisfactory condition when possession was so taken. Taking
possession of the Leased Premises shall not constitute
LESSEE’S acceptance of any material latent defect.
LESSOR represents that, to the best
of its knowledge, all Lessee improvements in the leased premises,
will be constructed in accordance with governmental laws, and in
compliance with local building codes.
14. QUIET POSSESSION:
Upon payment by LESSEE of the rental
herein provided and upon the observance and performance of all
terms, provisions, covenants and conditions on LESSEE’S part
to be observed and performed, LESSEE shall, subject to all of the
terms, provisions, covenants and conditions of this Lease
Agreement, peaceably and quietly hold and enjoy the Leased Premises
for the term hereby leased. In the event space contiguous to the
Leased Premises is occupied by a user other than office, then and
in that event LESSOR will be responsible for providing adequate
insulation to ensure that said use does not prevent the quiet
enjoyment of LESSEE’S Leased Premises. LESSOR is responsible
at its sole expense to ensure that other Tenants and nature of
other Tenants’ business does not interfere with
LESSEE’S conduct of business and quiet enjoyment of the
Leased Premises. LESSOR will not intentionally interfere with
LESSEE’S beneficial enjoyment of the leased premises. LESSOR
further agrees that it will not cause the leased premises to be
rendered unsafe, unfit, or unsuitable for occupancy, in whole or in
substantial part, for the purposes for which it was
leased.
15. LESSEE ELECTRICAL:
LESSEE shall use only office
machines and equipment that operate on the Building’s
standard electric circuits, but which in no event shall overload
the Building’s standard electric circuits from which the
LESSEE obtains electric current or which will, in the opinion of
LESSOR, interfere with the reasonable use of the Building by LESSOR
or other Tenants, or which shall create a hazard within the Leased
Premises.
16. CHARGES FOR
SERVICE: It is understood
and agreed upon between the Parties hereto that any charges against
LESSEE by LESSOR for services or for work done on the Leased
Premises by order of LESSEE, or otherwise accruing under this
Lease, shall be considered as rent due and shall be included in any
lien for rent.
17. DEFAULTS:
A. NON-PAYMENT:
LESSEE agrees that LESSEE will
promptly pay said rent at the times and place stated herein; that
LESSEE will pay charges for work performed on order of LESSEE, and
will pay any other charges that accrue under this Lease. LESSEE
shall be required to pay LESSOR a late charge equal to five percent
(5%) on any rental due that remains unpaid fifteen
(15) days after said rental is due. Said late charge shall be
deemed additional rent and shall be treated as such in any lien for
rents due.
Faithful payment by LESSEE of the
rent at the time stated shall be of essence in the performance of
this Lease and should said rent herein provided at any time remain
due and unpaid for a period of thirty (30) days after same
shall become due, and written notice of LESSEE’S failure to
make timely payment has been provided to LESSEE, then LESSOR may
consider the LESSEE a LESSEE at sufferance and LESSOR may
immediately re-enter upon said premises and the entire rent for the
remainder of the entire term shall automatically become due and
payable and may be collected forthwith by distress or
otherwise.
B. NON-MONETARY:
If LESSEE shall fail to perform any
of the terms, provisions, covenants, or conditions of this Lease,
on LESSEE’S part to be performed; or, if this Lease, or the
term thereof, be transferred or pass to or devolve upon any
persons, firms, officers, or corporations other than LESSEE, by
dissolution of the LESSEE, operation of law, or otherwise, except
as permitted herein, then, and in any such event, this Lease and
the term of this Lease, at LESSOR’s option, shall expire and
end forty five (45) days after LESSOR has given LESSEE written
notice of such act, condition, or default, and LESSEE has failed to
cure or remedy such act, condition, or default, then LESSEE hereby
agrees immediately then to quit and surrender said Leased Premises
to LESSOR; but this shall not impair or affect LESSOR’s right
to maintain summary proceeding for the recovery of the possession
of the Leased Premises, in all cases as provided for by law. If the
term of this Lease shall be so terminated, LESSOR may immediately,
or at any time thereafter, re-enter or re-possess the Leased
Premises, and remove all persons and property therefrom, without
being liable for trespass or damages.
18. ALTERATIONS AND
REPAIRS: LESSEE will, at
LESSEE’S own expense, keep the Leased Premises in good repair
and leaseable condition during the Lease Term (as required by
Section 6 of this lease) and will replace at its own expense
any and all broken glass, due to fault, actions, or willful
misconduct of LESSEE, or LESSEE’s guests or agents, in and
about said Leased Premises. LESSEE will make no alteration,
additions or improvements, with a value in excess of $5,000 in or
to the Leased Premises without the written consent of LESSOR, which
shall not be unreasonably withheld, and all additions, fixtures,
carpet or improvements, except office furniture and fixtures which
shall be readily removable without injury to the Leased Premises,
shall be and remain a part of the Leased Premises at the expiration
of this Lease. Under no circumstances, shall LESSEE perform or
cause to be performed, any demolition of interior walls or
structural components of the Leased Premises, without the written
consent of the LESSOR. ‚
19. LIENS:
LESSEE further agrees that LESSEE
will pay all liens of contractors, subcontractors, mechanics,
laborers, materialmen, and other items of like character, and will
indemnify LESSOR against all reasonable expenses, costs and
charges, including bond premiums for release of liens and
attorney’s fees reasonably incurred in and about the defense
of any suit in discharging the said Premises or any part thereof
from any liens, judgments or encumbrances caused by LESSEE. In the
event any such lien shall be made or filed, LESSEE shall bond
against or discharge the same within ten (10) days after the
same has been made or filed. In the event LESSOR has incurred any
such proven expenses, then it is understood and agreed between the
Parties hereto, that the expenses, costs, and charges above
referred to shall be considered as rent due and shall be included
in any lien for rent.
The LESSEE herein shall not have any
authority to create any liens for labor or materials on the
LESSOR’S interest in the Leased Premises and all persons
contracting with the LESSEE for the destruction or removal of any
facilities or other improvements or for the erection, installation,
alteration or repair of any facilities or other improvements on or
about the Leased Premises, and all materialmen, contractors,
mechanics and laborers, are hereby charged with notice that they
must look only to the LESSEE’S interest in the Leased
Premises to secure the payment of any bill for work done or
material furnished at the request or instruction of
LESSEE.
20. PARKING:
LESSOR grants to LESSEE the right to
use, at no additional cost, and in common with other Tenants in the
building entitled to similar use thereof, the parking areas for
parking automobiles of LESSEE’S employees, customers, clients
and invitees. LESSOR grants to LESSEE ten (10) reserved parking
spaces, at no additional charge, in areas designated by LESSOR.
LESSOR reserves the right to relocate the reserved parking spaces,
from time to time, if required by Lessor’s further
development of the site.
21. ESTOPPEL
CERTIFICATE: LESSEE
agrees that from time to time, upon not less than ten (10) days
prior request by LESSOR, LESSEE will deliver an Estoppel
Certificate certifying: (a) that this Lease is unmodified and
in full force and effect (or, if there have been modifications that
the Lease, as modified, is in full force and effect and stating the
modifications); (b) the dates to which the rent and other charges
have been paid; and (c) that the requesting party is not in default
under any provisions of this Lease, or if in default, the nature
thereof in detail. LESSEE also agrees to provide corporate
financial statements, upon request by LESSOR.
22. ASSIGNMENT BY
LESSOR: If the interests
of LESSOR under this Lease shall be transferred voluntarily or by
reason of foreclosure or other proceedings for enforcement of any
first mortgage on the Leased Premises, LESSEE shall be bound to
such transferee (herein sometimes called the
“Purchaser”), for the balance of the term hereof
remaining and any extensions or renewals thereof which may be
effected in accordance with the terms and provisions hereof, with
the same force and effect as if the Purchaser were the LESSOR under
this Lease, and LESSEE does hereby agree to attorn to the
Purchaser, including the Mortgagee under any such mortgage if it be
the Purchaser, as its LESSOR, said attornment to be effective and
self-operative without the execution of any further instruments
upon the Purchaser succeeding to the interest of the LESSOR under
this Lease. The respective rights and obligations of LESSEE and the
Purchaser upon such attornment to the extent of the then remaining
balance of the term of this Lease and any such extensions and
renewals, shall be and are the same as those set forth herein. In
the event of such transfer of LESSOR’S interest, unless
LESSOR shall be in breach hereunder, LESSOR shall be released and
relieved from all liability and responsibility thereafter accruing
to LESSEE under this Lease or otherwise and LESSOR’S
successor by acceptance of rent from LESSEE hereunder shall become
liable and responsible to LESSEE in respect to all obligations of
the LESSOR under this Lease.
23. ASSIGNMENT BY
LESSEE: Without the
written consent of LESSOR first obtained in each case, which cannot
be unreasonably withheld, LESSEE shall not assign, transfer,
mortgage, pledge, or otherwise encumber or dispose of this Lease
for the Term hereof, or underlet the Leased Premises or any part
thereof or permit the Leased Premises to be occupied by other
persons, unless such sub-Lessee, assignee or transferee, is a
related entity in which LESSEE holds an ownership interest.
Lessor’s consent to such assignment or sublet does not
release Lessee from full responsibility in accordance with the
terms and conditions set forth in this Lease. In the event of such
assignment or sublet, it will be the responsibility of Lessee to
assure the existence and maintenance of current and valid
occupational permits and general liability insurance for every
occupant of the leased premises. If this Lease is assigned, or if
the Leased Premises or any part thereof are underlet or occupied by
anybody other than the LESSEE, the LESSOR may after default by the
LESSEE collect or accept rent and pro rata expense payments from
the assignee, sub-Lessee, or occupant and apply the net amount
collected or accepted to the rent herein reserved, but no such
collection or acceptance shall be deemed a waiver of this covenant
or the acceptance of the assignee, sub-Lessee or occupant as
LESSEE, nor shall it be construed as, or implied to be, a release
of the LESSEE from the further observance and performance by the
LESSEE of the term, provisions, covenants and conditions herein
contained. Any costs incurred by LESSOR arising from LESSEE’S
assignment, including attorney’s fees shall be paid by
LESSEE.
24. SUCCESSORS AND
ASSIGNS: All terms,
provisions, covenants and conditions to be observed and performed
by LESSEE shall be applicable to and binding upon LESSEE’S
respective heirs, administrators, executors, successors and
assigns, subject, however, to the restrictions as to assignment or
subletting by LESSEE as provided herein. All expressed covenants of
this Lease shall be deemed to be covenants running with the
land.
25. INSURANCE:
A. LESSEE shall, during the entire
term hereof, at its sole cost and expense, provide and keep in full
force and effect a policy of Commercial General Liability insurance
covering the Leased Premises, and the business operation by LESSEE
in an amount of not less than $1,000,000.00 combined single limit
liability for bodily injury and property damage. The policy shall
name LESSOR, any person, firms or corporations designated by LESSOR
as an additional insured, and LESSEE as insured, and shall contain
a clause that the insurance will not be canceled or reduced below
the limits stated herein without first giving the LESSOR thirty
(30) days prior written notice. The insurance shall be provided by
an insurance company approved by LESSOR, which insurance company
shall provide LESSOR a true and certified copy of said policy or
certificate of insurance.
B. LESSEE agrees to pay any increase
in premiums for fire and extended coverage insurance that may be
charged during the term of this Lease resulting from the
type of activity or merchandise stored, distributed or sold by
LESSEE in the Leased Premises, whether or not LESSOR has consented
to the same. Bills for such additional premiums shall be rendered
by LESSOR to LESSEE at such times as LESSOR may elect, and shall be
due from, and payable by, LESSEE when rendered, and the amount
thereof shall be deemed to be, and be paid, as additional
rent.
C. It is understood that the LESSOR
hereby waives any and all rights of recovery against the LESSEE,
its officers, employees and agents, for loss occurring to the
described premises for which insurance coverage exists, and that it
will cause to be inserted in all fire and extended coverage
insurance policies which are carried on the described premises, a
provision substantially as follows: “It is hereby stipulated
that this insurance shall not be invalidated should the insured
waive in writing prior to loss, any and all rights of recovery
against any party for loss occurring to the property covered by
this policy.” It is also understood that the LESSEE hereby
waives any and all rights of recovery against the LESSOR, its
officers, employees and agents, for loss occurring to the described
premises for which insurance coverage exists, and that it will
cause to be inserted in all fire and extended coverage insurance
policies which are carried on its property at the described
premises, a provision substantially as follows: “It is hereby
stipulated that this insurance shall not be invalidated should
the
