Exhibit 10.2
OFFICE LEASE
AGREEMENT
300 Nickerson Road, Marlborough,
Massachusetts
BETWEEN
NORMANDY NICKERSON ROAD, LLC, a
Delaware limited liability company
(“LANDLORD”)
and
BIO-KEY INTERNATIONAL, INC., a
Delaware corporation
(“TENANT”)
OFFICE LEASE
AGREEMENT
THIS OFFICE LEASE
AGREEMENT (the “
Lease ”) is made and entered into as of June 30,
2008, by and between NORMANDY NICKERSON ROAD, LLC, a
Delaware limited liability company (“ Landlord
”) and BIO-KEY INTERNATIONAL, INC. , a Delaware
corporation (“ Tenant ”). The following
exhibits and attachments are incorporated into and made a part of
the Lease: Exhibit A (Outline and Location of
Premises), Exhibit B (Expenses and Taxes),
Exhibit C (Intentionally Omitted),
Exhibit D (Commencement Letter), Exhibit E
(Building Rules and Regulations), Exhibit F
(Landlord’s Work) and Exhibit G (Form of
Letter of Credit).
1.
Basic Lease Information.
1.1
“
Building ” shall mean the
building located at 300 Nickerson Road, Marlborough, Massachusetts
01752. “ Rentable
Square Footage of the Building ” is deemed to
be 80,724
square feet.
1.2
“
Premises ” shall mean the area
shown on Exhibit A to this Lease. The
Premises is located on the first floor of the Building as shown on
Exhibit A. The “ Rentable Square Footage of the Premises
” is deemed
to be 14,907
rentable square
feet. Landlord and Tenant stipulate and agree that the Rentable
Square Footage of the Building and the Rentable Square Footage of
the Premises are correct.
1.3
“
Base Rent ”:
|
Period or Months of Term
|
|
Monthly
Base Rent
|
|
|
Lease Months 1 - 12
|
|
$
|
20,250.00
|
|
|
Lease Months 13 - 24
|
|
$
|
26,397.81
|
|
|
Lease Months 25 - 36
|
|
$
|
27,640.06
|
|
1.4
“
Tenant’s Pro Rata Share
”: 18.5%
for the Building and 2.3% for the Complex. Tenant’s Pro
Rata Share shall be adjusted for changes in the Rentable Square
Footage of the Premises and/or the Rentable Square Footage of the
Building and/or Complex, including, without limitation, changes
which may result from any condemnation or other taking of a portion
of the Building and/or Complex.
1.5
“
Base Year ” for Taxes:
Fiscal Year (defined below) 2009 (i.e., July 1, 2008 to
June 30, 2009); “ Base Year ” for Expenses (defined
in Exhibit B
): calendar
year 2009.
For purposes hereof, “
Fiscal Year ” shall mean the Base Year for Taxes and
each period of July 1 to June 30 thereafter.
1.6
“
Term ”: A period of
thirty-six (36) Lease Months. The Term shall commence
on September 1,
2008 (the “
Commencement Date
”) and,
unless terminated early in accordance with this Lease, end on the
last day of the thirty-sixth (36 th ) Lease Month
following the Commencement Date (the “ Termination Date ”). As used
herein, the term
1
“
Lease Month ” shall mean a calendar
month (or, if the Commencement Date is not the first day of a
calendar month, the first Lease Month shall be such partial
calendar month in which the Commencement Date occurs plus the first
full calendar month thereafter).
1.7
“
Complex ”: Those certain
parcels of land (approximately 85 acres) and the buildings, the
parking areas and other improvements thereon, including the
Building, collectively known as 100-700 Nickerson Road,
Marlborough, Middlesex County, Massachusetts, also commonly known
as Marlborough Technology Complex, as well as any additional
buildings or amenities that may be constructed on the Complex
property.
1.8
“
Security Deposit ”:
$40,500.00
, as more fully
described in Section 6.
1.9
Intentionally
Omitted.
1.10
“
Broker ”: Richards Barry
Joyce & Partners.
1.11
“
Permitted Use ”: General office
use with ancillary computer server rooms.
1.12
“
Notice Address(es
)”:
Landlord :
Steve Smith
Normandy Real Estate
Management
1776 On the Green
67 Park Place East
Morristown, New Jersey
07960
With a copy to:
Raymond P. Trevisan
Principal, General
Counsel
Normandy Real Estate
Partners
67 Park Place East
Morristown, New Jersey
07960
Tenant :
BIO-key
International, Inc.
300 Nickerson Road
Marlborough, Massachusetts
01752
1.13
“
Business Day(s) ” are Monday through
Friday of each week, exclusive of New Year’s Day, Presidents
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day
2
and Christmas
Day (“ Holidays
”).
Landlord may designate additional Holidays that are commonly
recognized by other office buildings in the area where the Building
is located. “ Building Service Hours ” are 8:00 a.m.
to 6:00 p.m. on Business Days and 9:00 a.m. to
1:00 p.m. on Saturdays (excluding Holidays).
2.
Lease Grant.
The Premises are hereby leased to
Tenant from Landlord, together with the right to use any portions
of the Complex that are from time to time designated by Landlord
for the common use of tenants and others, such as sidewalks,
driveways, parking areas, common corridors, elevator foyers, common
restrooms and lobby areas (the “ Common Areas
”). Nothing contained herein shall affect
Landlord’s right to add to, subtract from, or alter the
Common Areas, including but not limited to making such changes in
or to the Building and/or Complex and the fixtures and equipment
thereof, as well as in or to the street entrances, halls, passages,
elevators, stairways and other improvements thereof, as Landlord
may deem necessary or desirable, so long as the same does not
materially adversely affect Tenant’s access to or use of the
Premises.
Landlord may adopt any name for the
Building and/or Complex and Landlord reserves the right to change
the name or address of the Building at any time.
Tenant shall have access to the
Premises twenty-four (24) hours per day, seven (7) days per
week.
3.
Possession; Landlord’s
Work.
3.1
Tenant
acknowledges that as of the date hereof, Tenant is currently in
possession of the Premises pursuant to a sublease between Aether
Systems, Inc., as sublessor, and Tenant, as
sublessee.
3.2
Subject to
substantial completion of Landlord’s Work (as defined in
Exhibit F), the Premises are accepted by Tenant in “as
is” condition and configuration without any representations
or warranties by Landlord except as expressly provided herein. By
having already taken possession of the Premises as of the date
hereof, Tenant agrees that the Premises are in good order and
satisfactory condition. Tenant acknowledges that
Landlord’s Work shall commence upon the Commencement Date
and, subject to the provisions of Exhibit F, Landlord shall
use commercially reasonable efforts to complete the
Landlord’s Work as soon as reasonably possible. Tenant
shall reasonably cooperate with Landlord in Landlord’s
performance of the Landlord’s Work (including without
limitation internally relocating within the Premises, at
Tenant’s sole cost, Tenant’s personnel and/or
furniture, fixtures and equipment so as not to interfere with
Landlord’s Work), Tenant hereby acknowledging that such work
shall be performed on Business Days during Building Service
Hours.
3
4.
Rent.
4.1
Tenant shall pay
Landlord, without any setoff or deduction, unless expressly set
forth in this Lease, all Base Rent and Additional Rent due for the
Term (collectively referred to as “ Rent ”). “
Additional Rent ” means all sums
(exclusive of Base Rent) that Tenant is required to pay Landlord
under this Lease. Tenant shall pay and be liable for all rental,
sales and use taxes (but excluding income taxes), if any, imposed
upon or measured by Rent. Base Rent and recurring monthly
charges of Additional Rent shall be due and payable in advance on
the first day of each calendar month without notice or demand,
provided that the installment of Base Rent for the first full
calendar month of the Term, and the first monthly installment of
Additional Rent for Expenses and Taxes, shall be payable upon the
execution of this Lease by Tenant. Unless otherwise
specifically set forth herein, all other items of Rent shall be due
and payable by Tenant on or before thirty (30) days after billing
by Landlord. Rent shall be made payable to the entity, and
sent to the address, Landlord designates and shall be made by good
and sufficient check or by other means acceptable to Landlord and
initially shall be made as follows:
If by Regular
Mail:
|
Normandy
Nickerson Road, LLC
|
|
P.O. Box
30930
|
|
New York, New
York 10087-0930
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If by Overnight
Mail/Courier:
|
JP Morgan Chase -
Lockbox Processing
|
|
Normandy
Nickerson Road, LLC
|
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Lockbox
30930
|
|
4 Chase Metrotech
Center
|
|
Ground Level
Courier on Willoughby Street
|
|
Brooklyn, NY
11245
|
|
|
If by Wire
Transfer:
|
Normandy
Nickerson Road, LLC
|
|
Account
No. 230460283
|
|
ABA :
021000021
|
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Bank: JPMorgan
Chase Bank
|
|
401 Madison
Avenue
|
|
New York, NY
10017
|
Tenant shall pay
Landlord an administration fee equal to 5% of all past due Rent
that is not paid within five (5) days of the date when
due. In addition, past due Rent shall accrue interest at the
lesser of 12% per annum or the maximum rate allowed by law from the
due date until actually paid. Landlord’s acceptance of
less than the correct amount of Rent shall be considered a payment
on account of the earliest Rent due. Rent for any partial month
during the Term shall be prorated. No endorsement or statement on a
check or letter accompanying payment shall be considered an accord
and satisfaction. Tenant’s covenant to pay Rent is
independent of every other covenant in this Lease.
4.2
Tenant shall pay
Tenant’s Pro Rata Share of Taxes and Expenses in accordance
with Exhibit B
of this
Lease.
4
4.3
Tenant waives all
rights (i) to any abatement, suspension, deferment or
reduction of or from Rent, and (ii) to quit, terminate or
surrender this Lease or the Premises or any part thereof, except,
in either case, as expressly provided herein. Tenant hereby
acknowledges and agrees that the obligations of Tenant hereunder
shall be separate and independent covenants and agreements, that
Rent shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected, unless
the requirement to pay or perform the same shall have been
terminated pursuant to an express provision of this Lease.
Landlord and Tenant each acknowledges and agrees that the
independent nature of the obligations of Tenant hereunder
represents fair, reasonable and accepted commercial practice with
respect to the type of property subject to this Lease, and that
this agreement is the product of free and informed negotiation
during which both Landlord and Tenant were represented by counsel
skilled in negotiating and drafting commercial leases in
Massachusetts, and that the acknowledgements and agreements
contained herein are made with full knowledge of the holding in
Wesson v. Leone Enterprises, Inc. , 437 Mass. 708
(2002). Such acknowledgements, agreements and waivers by
Tenant are a material inducement to Landlord entering into this
Lease.
5.
Compliance with Laws;
Use.
The Premises shall be used for the
Permitted Use and for no other use whatsoever. Tenant shall comply
with all statutes, codes, ordinances, orders, rules and
regulations of any municipal or governmental entity whether in
effect now or later, including the Americans with Disabilities Act
(“ Law(s) ”), regarding the operation of
Tenant’s business and the use, condition, configuration and
occupancy of the Premises. In addition, Tenant shall, at its sole
cost and expense, promptly comply with any Laws that relate to the
base building to the extent such obligations are triggered by
Tenant’s use of the Premises, other than for the Permitted
Use, or Alterations or improvements in the Premises performed or
requested by Tenant. Tenant shall promptly provide Landlord with
copies of any notices it receives regarding an alleged violation of
Law involving the Premises. Tenant shall comply with the
rules and regulations of the Building attached as
Exhibit E and such other reasonable rules and
regulations adopted by Landlord from time to time, including
rules and regulations for the performance of Alterations
(defined below). Landlord agrees that such rules and
regulations shall be established and applied by Landlord in a
non-discriminatory fashion, such that all rules and
regulations shall be generally applicable to all other tenants of
the Building of a similar nature of Tenant. Landlord makes no
warranty or representation that the Building and/or Premises are
suitable for Tenant’s use, including without limitation the
Permitted Use.
6.
Security Deposit.
The Security Deposit shall be
delivered to Landlord upon the execution of this Lease by Tenant
and held by Landlord without liability for interest (unless
required by Law) as security for the performance of Tenant’s
obligations. Unless otherwise required by Law, the Security
Deposit may be commingled with Landlord’s general
accounts. The Security Deposit is not an advance payment of
Rent or a measure of damages. Landlord may use all or a
portion of the Security Deposit to satisfy past-due Rent or to cure
any Default (defined below) by Tenant. If Landlord uses any
portion of the Security Deposit,
5
Tenant shall, within ten
(10) days after demand, restore the Security Deposit to its
original amount. Landlord shall return any unapplied portion of the
Security Deposit to Tenant within 45 days after the later to occur
of: (a) determination of the final Rent due from Tenant; or
(b) the later to occur of the Termination Date or the date
Tenant surrenders the Premises to Landlord in compliance with
Section 25. Landlord may assign the Security Deposit to
a successor or transferee and, following the assignment, Landlord
shall have no further liability for the return of the Security
Deposit. Landlord shall not be required to keep the Security
Deposit separate from its other accounts.
The Security Deposit shall be in the
form of an irrevocable letter of credit (the “ Letter of
Credit ”), which Letter of Credit shall:
(a) be in the amount of $40,500.00 ; (b) be
issued on the form attached hereto as Exhibit G
; (c) name Landlord as its beneficiary; and (d) be drawn
on an FDIC insured financial institution satisfactory to the
Landlord. The Letter of Credit (and any renewals or
replacements thereof) shall be for a term of not less than one
(1) year. Tenant agrees that it shall from time to time,
as necessary, whether as a result of a draw on the Letter of Credit
by Landlord pursuant to the terms hereof or as a result of the
expiration of the Letter of Credit then in effect, renew or replace
the original and any subsequent Letter of Credit so that a Letter
of Credit, in the amount required hereunder, is in effect until a
date which is at least sixty (60) days after the Termination Date
of the Lease. If Tenant fails to furnish such renewal or
replacement at least sixty (60) days prior to the stated expiration
date of the Letter of Credit then held by Landlord, Landlord may
draw upon such Letter of Credit and hold the proceeds thereof (and
such proceeds need not be segregated) as a Security Deposit
pursuant to the terms of this Section 6. Any renewal or
replacement of the original or any subsequent Letter of Credit
shall meet the requirements for the original Letter of Credit as
set forth above, except that such replacement or renewal shall be
issued by a national bank satisfactory to Landlord at the time of
the issuance thereof.
If Landlord draws on the Letter of
Credit as permitted in this Lease or the Letter of Credit, then,
promptly upon demand of Landlord, Tenant shall restore the amount
available under the Letter of Credit to its original amount by
providing Landlord with an amendment to the Letter of Credit
evidencing that the amount available under the Letter of Credit has
been restored to its original amount.
7.
Building Services.
7.1
Landlord shall
furnish Tenant with the following services: (a) water for use
in the base building lavatories; (b) customary heat and air
conditioning in season during the Building Service Hours; provided
that Tenant may receive HVAC service during hours other than the
Building Service Hours by paying Landlord’s then standard
charge for additional HVAC service so long as Tenant requests same
by written notice to Landlord not later than 12:00 noon on the
Business Day preceding the day of such overtime usage;
(c) standard janitorial service on Business Days;
(d) Electricity in accordance with the terms and conditions in
Section 7.2; (d) maintenance services as described in
Section 9.2 below; and (f) such other services as
Landlord reasonably determines are necessary or appropriate for the
Building or Complex.
6
7.2
Electricity shall
be distributed to the Premises either by the electric utility
company selected by Landlord to provide electricity service for the
Building and/or the Complex, or, at Landlord’s option, by
Landlord; and Landlord shall permit Landlord’s wires and
conduits, to the extent available, suitable and safely capable, to
be used for such distribution. If and so long as Landlord is
distributing electricity to the Premises, Tenant shall obtain all
of its electricity from Landlord and shall pay all of
Landlord’s charges, which charges shall be based, at
Landlord’s option, either on meter readings or on
Landlord’s reasonable estimate of Tenant’s electrical
usage or on Tenant’s pro rata share of all space, including
the Premises, which is commonly metered with the Premises. In
calculating such charges, there shall be included all costs to
Landlord to obtain electric service to the Building and/or the
Complex, including all costs of whatever nature incurred in
connection with entering agreements for obtaining such service from
utility suppliers. Initially, such charges will be based on
Landlord’s estimated cost of $1.75 per annum per rentable
square foot of floor area in the Premises ($2,173.94 per
month). If the electric utility company selected by Landlord
to provide electricity service for the Building and/or the Complex
is distributing electricity to the Premises, Landlord may elect to
require Tenant, at its cost, to make all necessary arrangements
with such electric utility company for metering and paying for
electric current furnished to the Premises. All electricity used
during the performance of janitorial service, or the making of any
alterations or repairs in or to the Premises, or the operation of
any special air conditioning system serving the Premises, shall be
paid by Tenant.
Landlord reserves the right at any
time and from time to time before or during the Term to with an
electric service provider (“ Electric Service Provider
”) of its choice to provide electricity service for the
Building. Tenant shall cooperate with Landlord and the
Electric Service Provider at all times and, as reasonably
necessary, shall allow Landlord and the Electric Service Provider
reasonable access to the Building’s and Complex’s
electric lines, feeders, risers, wiring and other machinery within
the Premises.
Without the
consent of Landlord, Tenant’s use of electrical service shall
not exceed, either in voltage, rated capacity, use beyond the
Building Service Hours or overall load, that which Landlord
reasonably deems to be standard for the Building. Landlord shall
have the right to measure electrical usage by commonly accepted
methods. If it is determined that Tenant is using excess
electricity, Tenant shall pay Landlord for the cost of such excess
electrical usage as Additional Rent. All electricity used during
the performance of janitorial service, or the making of any
alterations or repairs in or to the Premises, or the operation of
any special air conditioning system serving the Premises, shall be
paid by Tenant.
7.3
Landlord’s
failure to furnish, or any interruption, diminishment or
termination of services due to the application of Laws, the failure
of any equipment, the performance of repairs, improvements or
alterations, utility interruptions or the occurrence of an event of
Force Majeure (defined below) (collectively a “
Service Failure ”) shall not render
Landlord liable to Tenant, constitute a constructive eviction of
Tenant, give rise to an abatement of Rent, nor relieve Tenant from
the obligation to fulfill any covenant or agreement.
Notwithstanding the foregoing, in the event a Service Failure that
is within the reasonable
7
control of
Landlord continues for a period in excess of five
(5) consecutive business days, Tenant’s Base Rent shall
abate on a day-by-day basis in proportion to the portion of the
Premises that Tenant is unable to use for the Permitted Use.
The foregoing rent abatement shall be the Tenant’s sole
remedy for any interruption of Tenant’s business operations
due to such Service Failure.
8.
Leasehold Improvements.
All improvements in and to the
Premises, including any Alterations (collectively, “
Leasehold Improvements ”) shall remain upon the
Premises at the end of the Term without compensation to
Tenant. Landlord, however, by written notice to Tenant at
least forty-five (45) days prior to the Termination Date, may
require Tenant, at its expense, to remove (a) any Cable
(defined below) installed by or for the benefit of Tenant, and
(b) any Alterations (defined below) that, in Landlord’s
reasonable judgment, are of a nature that would require removal and
repair costs that are materially in excess of the removal and
repair costs associated with standard office improvements
(collectively referred to as “ Required Removables
”). Required Removables shall include, without
limitation, internal stairways, raised floors, personal restrooms
and showers, vaults, rolling file systems and structural
alterations and modifications. The designated Required Removables
shall be removed by Tenant before the Termination Date. Tenant
shall repair damage caused by the installation or removal of
Required Removables. If Tenant fails to perform its
obligations in a timely manner, Landlord may perform such work at
Tenant’s expense. Tenant, at the time it requests approval
for a proposed Alteration, may request in writing that Landlord
advise Tenant whether the Alteration or any portion of the
Alteration is a Required Removable. In addition, Tenant shall
be entitled to remove all articles of personal property and all
machinery, equipment and furniture owned and installed by Tenant;
provided that Tenant shall repair damage caused by the removal of
such items.
9.
Repairs and Alterations.
9.1
Tenant shall
periodically inspect the Premises to identify any conditions that
are dangerous or in need of maintenance or repair. Tenant
shall promptly provide Landlord with notice of any such conditions.
Tenant shall, at its sole cost and expense, perform all maintenance
and repairs to the Premises that are not Landlord’s express
responsibility under this Lease, and keep the Premises in good
condition and repair, reasonable wear and tear and damage by fire
or other casualty and as a consequence of the exercise of the power
of eminent domain excepted. Tenant’s repair and maintenance
obligations include, without limitation, repairs to: (a) floor
covering; (b) interior partitions; (c) doors;
(d) the interior side of demising walls; (e) electronic,
phone and data cabling and related equipment that is installed by
or for the exclusive benefit of Tenant (collectively,
“ Cable
”);
(f) supplemental air conditioning units, kitchens, hot water
heaters, plumbing, and similar facilities exclusively serving
Tenant; and (g) Alterations. To the extent Landlord is not
reimbursed by insurance proceeds, Tenant shall reimburse Landlord
for the cost of repairing damage to the Building caused by the acts
of Tenant, Tenant Related Parties and their respective contractors
and vendors. If Tenant fails to make any repairs to the Premises
for more than fifteen (15) days after notice from Landlord
(although notice
8
shall not be
required in an emergency), Landlord may make the repairs, and
Tenant shall pay the reasonable cost of the repairs, together with
an administrative charge in an amount equal to 5% of the cost of
such repairs. “ Tenant Related Parties ” shall mean
Tenant’s officers, directors, shareholders, employees and
agents.
9.2
Landlord shall
keep and maintain in good repair and working order, in a manner
generally commensurate with first class office buildings located in
the suburban metropolitan Boston area and perform maintenance upon
(a) structural elements of the Building; (b) mechanical
(including HVAC), electrical, plumbing and fire/life safety systems
serving the Building in general; (c) Common Areas;
(d) roof of the Building; (e) exterior windows of the
Building; and (f) elevators serving the Building. Landlord
shall promptly make repairs for which Landlord is
responsible.
9.3
Tenant shall not
make alterations, repairs, additions or improvements or install any
Cable (collectively referred to as “ Alterations ”) without first
obtaining the written consent of Landlord in each instance.
However, Landlord’s consent shall not be required for any
Alteration that satisfies all of the following criteria (a
“ Cosmetic
Alteration ”): (a) is
of a cosmetic nature such as painting, wallpapering, hanging
pictures and installing carpeting; (b) is not visible from the
exterior of the Premises or Building; (c) will not affect the
Base Building; and (d) does not require work to be performed
inside the walls, below the floor, or above the ceiling of the
Premises and (e) the cost of such work does not exceed
$25,000. Cosmetic Alterations shall be subject to all the
other provisions of this Section 9.3. Prior to starting
any Alteration work, Tenant shall furnish Landlord with plans and
specifications; names of contractors reasonably acceptable to
Landlord (provided that Landlord may designate specific contractors
with respect to base building work); required permits and
approvals; evidence of contractor’s and subcontractor’s
insurance in amounts reasonably required by Landlord and naming
Landlord as an additional insured; and any security for performance
in amounts reasonably required by Landlord. Changes to the
plans and specifications must also be submitted to Landlord for its
approval. Alterations shall be constructed in a good and
workmanlike manner using new materials of a quality reasonably
approved by Landlord but in all instances at least equal to the
then current quality of materials in the Premises. Tenant shall
reimburse Landlord for any sums paid by Landlord for third party
examination of Tenant’s plans for non-Cosmetic
Alterations. In addition, Tenant shall pay Landlord, as
Additional Rent, a fee for Landlord’s oversight and
coordination of any Alterations other than Cosmetic Alterations
equal to 5% of the cost of the Alterations (excluding the Landlord
Work set forth in Exhibit F except for any Additional
Construction Cost as defined in Exhibit F). Upon
completion, Tenant shall furnish “as-built” plans for
all Alterations other than Cosmetic Alterations, completion
affidavits and full and final lien waivers. Landlord’s
approval of an Alteration shall not be deemed a representation by
Landlord that the Alteration complies with Law. If at any
time construction by or on behalf of Tenant shall cause disharmony,
interference or union disputes of any nature whatsoever, whether
with contractors of the Landlord and/or other tenants or occupants
of the Building, Landlord reserves the right, without any liability
to Landlord whatsoever, to immediately halt such construction
and/or bar any offending contractors and/or subcontractors from the
Building until such disharmony, interference or union disputes may
be resolved. Notwithstanding anything to the contrary
contained
9
herein, Tenant
shall be entitled to replace rugs, and repaint and patch walls, in
the Premises without Landlord’s consent or the prior
submission of plans and specifications.
10.
Entry by Landlord.
Landlord may enter the Premises to
inspect, show or clean the Premises or to perform or facilitate the
performance of repairs, alterations or additions to the Premises or
any portion of the Building (including for the purpose of checking,
calibrating, adjusting and balancing controls and other parts of
the Building’s systems). Except in emergencies or to
provide Building services, Landlord shall provide Tenant with
reasonable prior verbal notice of entry and shall use reasonable
efforts to minimize any interference with Tenant’s use of the
Premises. If reasonably necessary, Landlord may temporarily
close all or a portion of the Premises to perform repairs,
alterations and additions. However, except in emergencies,
Landlord will not close the Premises if the work can reasonably be
completed on weekends and after Building Service Hours. Entry
by Landlord shall not constitute a constructive eviction or entitle
Tenant to an abatement or reduction of Rent.
11.
Assignment and
Subletting.
11.1
Except in
connection with a Permitted Transfer (defined below), Tenant shall
not assign, sublease, transfer or encumber any interest in this
Lease or allow any third party to use any portion of the Premises
(collectively or individually, a “ Transfer ”) without the prior
written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed if Landlord does not
exercise its recapture rights under Section 11.2. If the
entity which controls the voting shares/rights of Tenant changes at
any time, such change of ownership or control shall constitute a
Transfer unless Tenant is an entity whose outstanding stock is
listed on a recognized securities exchange or if at least 80% of
its voting stock is owned by another entity, the voting stock of
which is so listed. Any attempted Transfer in violation of
this Section is voidable by Landlord. In no event shall any
Transfer, including a Permitted Transfer, release or relieve Tenant
from any obligation under this Lease. Notwithstanding
the foregoing, in the event a Default exists either at the time
Tenant requests consent for such sublease or assignment or at the
commencement of such sublease or assignment (including without
limitation a Permitted Transfer), Landlord may, at its sole
discretion, refuse consent to such assignment or sublease and/or
declare such assignment or sublease void and without force or
effect. Tenant shall not be entitled to receive monetary
damages based upon a claim that Landlord unreasonably withheld its
consent to a proposed transfer and Tenant’s sole remedy shall
be an action to enforce any such provision through specific
performance or declaratory judgment.
11.2
Tenant shall
provide Landlord with financial statements for the proposed
transferee, a fully executed copy of the proposed assignment,
sublease or other Transfer documentation and such other information
as Landlord may reasonably request. Within fifteen (15) Business
Days after receipt of the required information and documentation,
Landlord shall either: (a) consent to the Transfer by
execution of a consent agreement in a form reasonably designated by
Landlord; (b) reasonably refuse to consent to the
10
Transfer in
writing; or (c) recapture the portion of the Premises that
Tenant is proposing to Transfer; provided, however, Tenant may
rescind its proposal to assign, sublease or otherwise Transfer and
thereby nullify Landlord’s recapture of the portion of the
Premises being transferred by giving written notice to Landlord
within three (3) business days after receiving
Landlord’s notice of recapture. If Landlord exercises
its right to recapture, this Lease shall automatically be amended
(or terminated if the entire Premises is being assigned or sublet)
to delete the applicable portion of the Premises effective on the
proposed effective date of the Transfer. Tenant shall pay to
Landlord, as Additional Rent, a review fee of $1,500.00 for
Landlord’s review of any Permitted Transfer or requested
Transfer.
11.3
Tenant shall pay
Landlord, as Additional Rent, 50% of all rent and other
consideration which Tenant receives as a result of a Transfer that
is in excess of the Rent payable to Landlord for the portion of the
Premises and Term covered by the Transfer. Tenant shall pay
Landlord for Landlord’s share of the excess within thirty
(30) days after Tenant’s receipt of the excess. Tenant
may deduct from the excess, on a straight-line basis, all
reasonable and customary expenses directly incurred by Tenant
attributable to the Transfer including leasing commissions (but
excluding tenant improvement allowances or other incentives).
If Tenant is in Default, Landlord may require that all sublease
payments be made directly to Landlord, in which case Tenant shall
receive a credit against Rent in the amount of Tenant’s share
of payments received by Landlord.
11.4
Tenant may assign
this Lease to a successor to Tenant by purchase, merger,
consolidation or reorganization (an “ Ownership Change ”) or assign this Lease
or sublet all or a portion of the Premises to an Affiliate without
the consent of Landlord, provided that all of the following
conditions are satisfied (a “ Permitted Transfer ”):
(a) Tenant is not in Default; (b) in the event of an
Ownership Change, Tenant’s successor shall own substantially
all of the assets of Tenant and have a net worth which is at least
equal to Tenant’s net worth as of the day prior to the
proposed Ownership Change; (c) the use is only for the
Permitted Use; and (d) Tenant shall give Landlord written
notice at least ten (10) days prior to the effective date of
the Permitted Transfer. Tenant’s notice to Landlord shall
include information and documentation evidencing the Permitted
Transfer and showing that each of the above conditions has been
satisfied. If requested by Landlord, Tenant’s successor
shall sign a commercially reasonable form of assumption agreement.
“ Affiliate
” shall
mean an entity controlled by, controlling or under common control
with Tenant (for such period of time as such entity continues to be
controlled by, controlling or under common control with Tenant, it
being agreed that the subsequent sale or transfer of stock
resulting in a change in voting control, or any other
transaction(s) having the overall effect that such entity
ceases to be controlled by, controlling or under common control
with Tenant, shall be treated as if such sale or transfer or
transaction(s) were, for all purposes, an assignment of this
Lease governed by the provisions of this Section).
12.
Liens.
Tenant shall not permit
mechanics’ or other liens to be placed upon the Complex,
Premises or Tenant’s leasehold interest in connection with
any work or service done or
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purportedly done by or for the
benefit of Tenant or its transferees. Tenant shall give
Landlord notice at least fifteen (15) days prior to the
commencement of any work in the Premises to afford Landlord the
opportunity, where applicable, to post and record notices of
non-responsibility. Tenant shall immediately fully discharge any
lien or like filing, including any notice of contract, by
settlement, by bonding or by insuring over the lien in the manner
prescribed by the applicable lien Law. If Tenant fails to do
so, such failure shall be a default hereunder and Landlord may
bond, insure over or otherwise discharge the lien. Tenant
shall reimburse Landlord for any amount paid by Landlord,
including, without limitation, reasonable attorneys’
fees. Landlord shall have the right to require Tenant to post
a performance or payment bond in connection with any work or
service done or purportedly done by or for the benefit of
Tenant. Tenant acknowledges and agrees that all such work or
service is being performed for the sole benefit of Tenant and not
for the benefit of Landlord.
13.
Indemnity and Waiver of
Claims.
Except to the extent caused by the
gross negligence or willful misconduct of Landlord or any Landlord
Related Parties, Tenant hereby waives all claims against and
releases Landlord and its trustees, members, principals,
beneficiaries, partners, officers, directors, employees, Mortgagees
(defined below) and agents (the “ Landlord Related
Parties ”) from all claims for any injury to or death of
persons, damage to property or business loss in any manner related
to (a) Force Majeure, (b) acts of third parties,
(c) the bursting or leaking of any tank, water closet, drain
or other pipe, (d) the inadequacy or failure of any security
services, personnel or equipment, or (e) any matter not within
the reasonable control of Landlord. In addition to the
foregoing Tenant agrees that Landlord shall have no responsibility
or liability whatsoever for any loss or damage, however caused, to
furnishings, fixtures, equipment, or other personal property of
Tenant or of any persons claiming by, through, or under Tenant.
Except to the extent caused by the negligence or willful misconduct
of Landlord or any Landlord Related Parties, Tenant shall
indemnify, defend and hold Landlord and Landlord Related Parties
harmless against and from all liabilities, obligations, damages,
penalties, claims, actions, costs, charges and expenses, including,
without limitation, reasonable attorneys’ fees and other
professional fees (if and to the extent permitted by Law)
(collectively referred to as “ Losses ”), which
may be imposed upon, incurred by or asserted against Landlord or
any of the Landlord Related Parties by any third party and arising
out of or in connection with any damage or injury occurring in the
Premises or any acts or omissions (including violations of Law) of
Tenant, the Tenant Related Parties or any of Tenant’s
transferees, contractors or licensees.
14.
Insurance.
14.1
Tenant shall
maintain the following insurance (“ Tenant’s Insurance ”):
(a) Commercial General Liability Insurance applicable to the
Premises and its appurtenances providing, on an occurrence basis, a
minimum combined single limit of $3,000,000.00; (b)
Property/Business Interruption Insurance written on an All Risk or
Special Perils form, with coverage for broad form water damage, at
replacement cost value and with a replacement cost endorsement
covering all of Tenant’s business and trade
fixtures,
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equipment,
movable partitions, furniture, merchandise and other personal
property within the Premises (“ Tenant’s Property ”) and any Leasehold
Improvements performed by or for the benefit of Tenant;
(c) Workers’ Compensation Insurance in amounts required
by Law; and (d) Employers Liability Coverage of at least
$1,000,000.00 per occurrence. Any company writing
Tenant’s Insurance shall have an A.M. Best rating of not
less than A-VIII. All Commercial General Liability Insurance
policies shall name as additional insureds Landlord (or its
successors and assignees), the holder(s) of any
mortgage(s) encumbering the Premises, the managing agent for
the Building (or any successor), and their respective members,
principals, beneficiaries, partners, officers, directors,
employees, and agents, and other designees of Landlord and its
successors as the interest of such designees shall appear. All
policies of Tenant’s Insurance shall contain endorsements
that the insurer(s) shall give Landlord and its designees at
least thirty (30) days’ advance written notice of any
cancellation, termination, material change or lapse of insurance.
Tenant shall provide Landlord with a certificate of insurance
evidencing Tenant’s Insurance prior to the Commencement Date,
and thereafter as necessary to assure that Landlord always has
current certificates evidencing Tenant’s Insurance.
Tenant’s insurance requirements stipulated herein are based
upon current industry standards, and Landlord reserves the right to
require additional coverage and/or to increase limits as industry
standards change and/or as required by Landlord’s mortgagees
from time to time. So long as the same is available at
commercially reasonable rates, Landlord shall maintain so called
All Risk property insurance on the Building at replacement cost
value as reasonably estimated by Landlord.
14.2
Tenant shall not
store any article or do anything in or about the Premises which may
be prohibited by Landlord’s insurance policies or any
endorsements or forms attached thereto, or which will increase any
insurance rates and premiums on the Premises or the Building.
Tenant shall pay within ten (10) days of written demand any
increase in premiums for Landlord’s insurance that may be
charged on such insurance carried by Landlord resulting from
Tenant’s use and occupancy of the Premises or the Building,
whether or not Landlord has consented to the same. In
determining whether increased premiums are the result of
Tenant’s use, occupancy or vacancy of the Premises, a
schedule issued by the organization making the fire insurance,
extended coverage, vandalism and malicious mischief, special
extended coverage or any all-risk insurance rates for said Premises
or any rule books issued by the rating organization or similar
bodies or by rating procedures or rules of Landlord’s
insurance companies shall be conclusive evidence of the several
items and charges which make up the insurance rates on the Premises
and the Building.
15.
Subrogation.
Landlord and Tenant hereby waive and
shall cause their respective insurance carriers to waive any and
all rights of recovery, claims, actions or causes of action against
the other for any loss or damage with respect to Tenant’s
Property, Leasehold Improvements, the Building, the Premises, or
any contents thereof, including rights, claims, actions and causes
of action based on negligence, which loss or damage is (or would
have been, had the insurance required by this Lease been carried)
covered by insurance.
13
16.
Casualty Damage.
16.1
If all or any
portion of the Premises becomes untenantable by fire or other
casualty to the Premises (collectively a “
Casualty ”), Landlord, with
reasonable promptness, shall cause a general contractor selected by
Landlord to provide Landlord and Tenant with a written estimate of
the amount of time required using standard working methods to
Substantially Complete the repair and restoration of the Premises
and any Common Areas necessary to provide access to the Premises
(“ Completion
Estimate ”). If the
Completion Estimate indicates that the Premises or any Common Areas
necessary to provide access to the Premises cannot be made
tenantable within 270 days from the date the repair is started,
then either party shall have the right to terminate this Lease upon
written notice to the other within ten (10) days after receipt
of the Completion Estimate. Tenant, however, shall not have
the right to terminate this Lease if the Casualty was caused by the
negligence or intentional misconduct of Tenant or any Tenant
Related Parties. In addition, Landlord, by notice to Tenant within
ninety (90) days after the date of the Casualty, shall have the
right to terminate this Lease if: (1) the Premises have
been materially damaged and there is less than two (2) years
of the Term remaining on the date of the Casualty; (2) any
Mortgagee requires that the insurance proceeds be applied to the
payment of the mortgage debt; or (3) a material uninsured loss
to the Building occurs.
16.2
If this Lease is
not terminated, Landlord shall promptly and diligently, subject to
reasonable delays for insurance adjustment or other matters beyond
Landlord’s reasonable control, restore the Premises and
Common Areas. Such restoration shall be to substantially the same
condition that existed prior to the Casualty to the extent of
insurance proceeds received by Landlord, except for modifications
required by Law or any other modifications to the Common Areas
deemed desirable by Landlord. Upon notice from Landlord, Tenant
shall assign to Landlord (or to any party designated by Landlord)
all property insurance proceeds payable to Tenant under
Tenant’s Insurance with respect to any Leasehold Improvements
performed by or for the benefit of Tenant; provided if the
estimated cost to repair such Leasehold Improvements exceeds the
amount of insurance proceeds received by Landlord from
Tenant’s insurance carrier, the excess cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord’s
commencement of repairs. Within fifteen (15) days of demand,
Tenant shall also pay Landlord for any additional excess costs that
are determined during the performance of the repairs. Landlord
shall not be liable for any inconvenience to Tenant, or injury to
Tenant’s business resulting in any way from the Casualty or
the repair thereof. Provided that Tenant is not in Default,
during any period of time that all or a material portion of the
Premises is rendered untenantable as a result of a Casualty, the
Rent shall abate for the portion of the Premises that is
untenantable and not used by Tenant. If for any reason the
work to repair or rebuild the Premises following a Casualty is not
substantially completed within 270 days after the casualty, Tenant
shall have the right to terminate this Lease by giving Landlord
thirty (30) days prior written notice of Tenant’s election so
to do after the expiration of such 270-day period, whereupon this
Lease shall terminate on the date of such notice with the same
force and effect as if such date were the date originally
established as the expiration date hereof; provided that if
Landlord substantially
14
completes such
work prior to the end of such 30-day period, such election to
terminate shall be void and of no force or effect.
17.
Condemnation.
Either party may terminate this
Lease if any material part of the Premises is taken or condemned
for any public or quasi-public use under Law, by eminent domain or
private purchase in lieu thereof (a “ Taking
”). For the purposes of this Section, a
“material” part of the Premises shall be over 30% of
the Premises. Landlord shall also have the right to terminate
this Lease if there is a Taking of any portion of the Building or
the Complex which would have a material adverse effect on
Landlord’s ability to profitably operate the remainder of the
Building. The terminating party shall provide written notice
of termination to the other party within forty-five (45) days after
it first receives notice of the Taking. The termination shall
be effective on the date the physical taking occurs. If this
Lease is not terminated, Base Rent and Tenant’s Pro Rata
Share shall be appropriately adjusted to account for any reduction
in the square footage of the Building or Premises. All compensation
awarded for a Taking shall be the property of Landlord. The
right to receive compensation or proceeds are expressly waived by
Tenant, however, Tenant may file a separate claim for
Tenant’s Property and Tenant’s reasonable relocation
expenses, provided the filing of the claim does not diminish the
amount of Landlord’s award. If only a part of the
Premises is subject to a Taking and this Lease is not terminated,
Landlord, with reasonable diligence, will restore the remaining
portion of the Premises as nearly as practicable to the condition
immediately prior to the Taking.
18.
Events of Default.
Each of the following occurrences
shall be a “ Default ”: (a) Tenant’s
failure to pay any portion of Rent when due, if the failure
continues for five (5) d
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