OFFICE LEASE AGREEMENT

EXHIBIT 10.1

OFFICE LEASE AGREEMENT

 

BETWEEN

 

NS 7/57 ACQUISITION LLC

(“ LANDLORD ”)

 

AND

 

[[AMBIENT CORPORATION, a Delaware corporation]]

(“ TENANT ”)

 

 

 

 

 

 

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OFFICE LEASE AGREEMENT

 

THIS OFFICE LEASE AGREEMENT (the “ Lease ”) is made and entered into as of May 21, 2009, by and between NS 7/57 ACQUISITION LLC, Delaware limited liability company (“ Landlord ”) and [[ AMBIENT CORPORATION, a Delaware corporation]] (“ Tenant ”).

The following exhibits and attachments are incorporated into and made a part of the Lease: Exhibit A, Sheets 1 and 2 (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 (Additional Provisions), Exhibit G (Intentionally Omitted) and Exhibit H (Janitorial Specifications).

1.

Basic Lease Information.

1.01

“ Building ” shall mean the building located at 7/57 Wells Avenue, Newton, Massachusetts 02459, and commonly known as 7/57 Wells Avenue.  “ Rentable Square Footage of the Building ” is deemed to be 89,297 square feet.

1.02

“ Premises ” shall mean the area shown on Exhibit A to this Lease, comprising (i) 10,647 rentable square feet located on the lower level of the Building (the “ Lower Level Premises ”), as shown on Exhibit A , attached hereto, and (ii) 9,595 rentable square feet located on the 1 ^st floor of the Building (the “ First Floor Premises ”), as shown on Exhibit A-1 , attached hereto.  The Premises is located on the lower level and the 1 ^st floor of the Building.  If the Premises include one or more floors in their entirety, all corridors and restroom facilities located on such full floor(s) shall be considered part of the Premises.  The “ Rentable Square Footage of the Premises ” is deemed to be 20,242 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.  Except as otherwise specifically referred to in this Lease, the Lower Level Premises and the First Floor Premises shall hereinafter collectively be referred to as the “Premises”.

1.03

“ Base Rent ”:

(a)

Lower Level  Premises (10,647 rentable square feet) :

 

(b)

First Floor Premises (9,595 rentable square feet):

 

 

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1.04

“ Tenant’s Pro Rata Share ”:  22.67%.  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, including, without limitation, changes which may result from any condemnation or other taking of a portion of the Building.

1.05

“ Base Year ” for Taxes:  Fiscal Year (defined below) 2010 (i.e., July 1, 2009, to June 30, 2010); “ 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.

 

1.06

“ Term ”:  A period of forty (40) months.  The Term shall commence on September 1, 2009 (the “ Commencement Date ”), and, unless terminated early in accordance with this Lease, end on December 31, 2012 (the “ Termination Date ”).   

1.07

“Improvement Allowance(s)” :  None.

1.08

“ Security Deposit ”:  $50,409.00, as more fully described in Section 6.

1.09

“ Guarantor(s) ”:  None.

1.10

“ Broker ”:  Jones Lang LaSalle.

1.11

“ Permitted Use ”:  General Business Office and, as incidental thereto, if and to the extent permitted under applicable Law, for storage, research and development, light assembly, and product testing.

1.12

“ Notice Addresses ”:

Landlord’s Notice Address :

NS 7/57 Acquisition, LLC

c/o Normandy Real Estate Management, LLC

400 5 ^th Avenue

Waltham, Massachusetts 02459

 

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And a copy to:

 

Raymond P. Trevisan

Principal, General Counsel

Normandy Real Estate Partners

1776 On the Green

67 Park Place East, 8 ^th Floor

Morristown, New Jersey 07960

 

And a copy to:

 

Goulston & Storrs, P.C.

400 Atlantic Avenue

Boston, Massachusetts 02110

Attention: Normandy Real Estate

 

Landlord’s Rent Address :

 

NS 7/57 Acquisition, LLC

c/o Normandy Real Estate Management, LLC

P.O. Box 30173

New York, New York 10087-0173

 

Tenant’s Notice Address :

 

[PLEASE PROVIDE]

 

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 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 8:00 A.M. to 1:00 P.M. on Saturdays.

1.14

“ Landlord Work ”:  None.

1.15

“ Property ” means the Building and the parcel(s) of land on which it is located and, at Landlord’s discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located.

2.

Lease Grant.

The Premises are hereby leased to Tenant from Landlord, together with the right to use any portions of the Property that are from time to time designated by Landlord for the common use of tenants and others (the “ Common Areas ”).  Nothing contained herein shall affect Landlord’s right to add to, subtract from, or alter the Common Areas, so long as the same does not materially adversely affect Tenant’s access to the Premises.

 

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3.

Acceptance of Possession.

3.01

Intentionally Omitted.

Subject to all electrical outlets, light fixtures and existing plumbing fixtures in the Premises as of the Commencement Date then being in good and working condition, the Premises are accepted by Tenant in broom clean, “as is” condition and configuration without any representations or warranties by Landlord.  Tenant acknowledges that certain items of furniture and equipment purchased by Tenant from the previous occupant of the Premises will remain in the Premises as of the Commencement Date and agrees that Landlord has no obligation to remove same.  By taking possession of the Premises, Tenant agrees that the Premises are in good order and satisfactory condition.  Landlord shall not be liable for a failure to deliver possession of the Premises or any other space due to the holdover or unlawful possession of such space by another party; provided, however, that Landlord shall use reasonable efforts to obtain possession of the space.  If Tenant takes possession of the Premises before the Commencement Date, such possession shall be subject to the terms and conditions of this Lease and Tenant shall pay Rent (defined in Section 4.01) to Landlord for each day of possession before the Commencement Date.  However, except for the cost of services requested by Tenant (e.g. freight elevator usage), Tenant shall not be required to pay Rent for any days of possession before the Commencement Date during which Tenant, with the approval of Landlord, is deemed to be in possession of the Premises for the sole purpose of performing improvements or installing furniture, equipment or other personal property. Prior to the Commencement Date, Landlord shall ensure that all Base Building systems are in good working order.

3.02

Landlord shall permit Tenant access for installing Tenant’s trade fixtures, phone, data, and furniture systems in portions of the Premises forty-five (45) days prior to the Commencement Date. Any such access by Tenant shall be upon all of the terms and conditions of the Lease (other than the payment of Annual Base Rent) and shall be at Tenant’s sole risk, and Landlord shall not be responsible for any injury to persons or damage to property resulting from such early access by Tenant.  Tenant shall not use or occupy the Premises for business purposes until the Commencement Date.

4.

Rent.

4.01

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.  All other items of Rent shall be due and payable by Tenant on or before 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.  Tenant shall pay Landlord an administration fee equal to 5% of all past due Rent, provided that Tenant shall be entitled to a grace period of 5 business days for the first 2 late payments of Rent in a calendar year.  In addition, past due Rent shall accrue interest at 12% per annum 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

 

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letter accompanying payment shall be considered an accord and satisfaction.  The first month of Base Rent for the First Floor Premises ($19,190.00) which commences March 1, 2010, shall be paid in advance by Tenant to Landlord on September 1, 2009.  The first 2 months of Base Rent for the Lower Level Premises (aggregate of $22,571.00) which commences November 1, 2010, shall be paid in advance by Tenant to Landlord on October 1, 2009.  Tenant’s covenant to pay Rent is independent of every other covenant in this Lease.

4.02

Tenant shall pay Tenant’s Pro Rata Share of Taxes and Expenses in accordance with Exhibit B of 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" (defined below), but only 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.  " Base Building " shall include the structural portions of the Building, the public restrooms and the Building mechanical, electrical, air-conditioning and plumbing systems and equipment located in the internal core of the Building on the floor or floors on which the Premises are located. Tenant shall promptly provide Landlord with copies of any notices it receives regarding an alleged violation of Law.  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 in Section 9).  As of the date hereof, Landlord has not received notice from any governmental agencies that the Building is in violation of Title III of the Americans with Disabilities Act.

6.

Security Deposit.

.The Security Deposit shall be in the form of cash and 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.  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 in Section 18) by Tenant.  If Landlord uses any portion of the Security Deposit, Tenant shall, within 5 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.

7.

Building Services.

701

.Landlord shall furnish Tenant with the following services: (a) water for use in the Base Building lavatories and in the Premises; (b) customary heat and air conditioning in season during Building Service Hours similar to other Class A and Class B buildings in Newton, MA; provided that Tenant shall have the right to receive HVAC service during hours other than

 

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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 in accordance with the Janitorial Specifications attached hereto as Exhibit H ; (d) Elevator service; (e) Electricity in accordance with the terms and conditions in Section 7.02; and (f) such other services as Landlord reasonably determines are necessary or appropriate for the Property.  As of the date hereof, Landlord's charge for after-Building Service Hours heating service is $75.00 per hour, and Landlord’s charge for after-Building Service Hours air conditioning service is $75.00 per hour (which Landlord represents are the actual costs of providing such services, including maintenance and depreciation but excluding any mark-up for profit or administrative charges), in each case for the entire Premises, subject to change from time to time.  Access to the Building for Tenant and its employees shall be available 24 hours per day/7 days per week, subject to the terms of this Lease and such security or monitoring systems as Landlord may reasonably impose, including, without limitation, sign-in procedures and/or presentation of identification cards.

7.02

(a)

Electricity shall be distributed to the Premises either by the electric utility company selected by Landlord to provide electricity service for the Building 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 actual costs to Landlord to obtain electric service to the Building, including all actual 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.  If the electric utility company selected by Landlord to provide electricity service for the Building is distributing electricity to the Premises, Landlord may elect to require Tenant, at Landlord’s 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 during the making of any alterations or repairs in or to the Premises by Tenant or at the request of Tenant, or in the operation of any special air conditioning system serving the Premises, shall be paid by Tenant.

Landlord has advised Tenant that presently NStar (the “ Electric Service Provider ”) is the electric utility company selected by Landlord to provide electricity service for the Building.  Notwithstanding the foregoing, Landlord reserves the right at any time and from time to time before or during the Term to either contract for electric service from a different company or companies providing electricity service (each such company shall hereinafter be referred to as an “ Alternative Service Provider ”) or continue to contract for electricity service from the Electric Service Provider, provided such service is at commercially reasonable rates. Tenant shall cooperate with Landlord, the Electric Service Provider and any Alternative Service Provider at all times and, as reasonably necessary, shall allow Landlord, the Electric Service Provider and any Alternative Service Provider reasonable access to the Building’s electric lines, feeders, risers, wiring and other machinery within the Premises.

 

 

 

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(b)

Without the consent of Landlord, Tenant’s use of electrical service shall not exceed, either in voltage, rated capacity, 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.

7.03

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 in Section 26.03) (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.  However, if, as a result of a Service Failure that is reasonably within the control of Landlord to correct, the Premises are made untenantable for a period in excess of 3 consecutive Business Days after Tenant notifies Landlord of such failure, then Tenant, as its sole remedy, shall be entitled to receive an abatement of Rent payable hereunder during the period beginning on the 4 ^th consecutive Business Day after Tenant so notifies Landlord and ending on the day the service has been restored.  If the entire Premises have not been rendered untenantable by the Service Failure, the amount of abatement shall be equitably prorated.

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 30 days prior to the Termination Date, may require Tenant, at its expense, to remove (a) any Cable (defined in Section 9.01) installed by or for the benefit of Tenant, and (b) any Landlord Work or Alterations 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.  Within 10 days after receipt of Tenant’s request, Landlord shall advise Tenant in writing as to which portions of the Alteration are Required Removables.  However, it is agreed that Required Removables shall not include any usual office improvements such as gypsum board, partitions, ceiling grids and tiles, fluorescent lighting panels, Building standard doors and non-glued down carpeting.

9.

Repairs and Alterations.

9.01

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 casualty (subject to the terms of Section 16) excepted, provided that, subject to the provisions of Section 15, Tenant shall not be responsible for repairs to the Premises to the extent that any damage is caused by the negligence or willful acts of Landlord or Landlord’s employees and agents excepted, and Landlord shall be responsible to repair such damage. 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, including 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 negligent or willful 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 15 days after notice from Landlord (although notice 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 10% of the cost of the repairs.

9.02

Landlord shall keep and maintain in good repair and working order and perform maintenance upon the:  (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.

9.03

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, which consent shall not be unreasonably withheld or delayed.  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 or flooring; (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 $10,000.00.  Cosmetic Alterations shall be subject to all the other provisions of this Section 9.03.   Prior to starting 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); 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 materials of a quality reasonably approved by Landlord.  Tenant shall reimburse Landlord for any reasonable sums paid by Landlord for third party examination of Tenant’s plans for non-Cosmetic Alterations.  In addition, if Landlord provides oversight and coordination of Alterations, other than merely the review of plans for said Alterations, Tenant shall pay Landlord a fee for Landlord’s oversight and coordination of any Alterations, other than Cosmetic Alterations, equal to 10% of the cost of the Alterations, provided, however, that such fee shall not be payable with respect to Tenant’s initial leasehold improvements to the Premises (i.e., Alterations performed before the initial occupancy of the Premises by Tenant).  Tenant acknowledges that Landlord’s oversight and coordination activities are limited to ensuring that any Alterations are consistent with the construction of the Building’s structure and utility and Building service systems and coordinating construction activities with the operation of the Building (e.g., use of elevators).  In no event will such oversight and coordination activities require Landlord to act as Tenant’s construction manager or otherwise to inspect and supervise the work of performing the Alterations, which shall remain the responsibility of Tenant.  Upon completion, Tenant shall furnish “as-built” plans for all Alterations other than Cosmetic Alterations, completion affidavits and full and final waivers of lien.  Landlord’s approval of an Alteration shall not be deemed a representation by Landlord that the Alteration complies with Law.

10.

Entry by Landlord.

Landlord may enter the Premises to (i) inspect and show (i.e., to any mortgagee, prospective purchaser, prospective mortgagee, or prospective assignee of any mortgage of the Building, and, during the last 9 months of the Term of the Lease, to any prospective tenant contemplating leasing of the Premises or any part thereof) or (ii) clean the Premises in accordance with Exhibit H of this Lease.  Except in emergencies or to provide janitorial services, Landlord or its agents shall provide Tenant with reasonable prior verbal notice of entry.  With prior coordination, Landlord may enter the Premises with Tenant to perform or facilitate the performance of repairs, alterations or additions to the Premises or any portion of the Building, and if reasonably necessary, Landlord may temporarily close all or a portion of the Premises to perform such repairs, alterations and additions.  In all cases, Landlord shall use reasonable efforts to minimize any interference with Tenant’s use of the Premises.  If Tenant shall not be personally present to open and permit entry into the Premises at any time in the case of an emergency or as otherwise permissible under the Lease, Landlord or its agents may enter the Premises by a master key, or may forcibly enter the Premises without rendering Landlord or Landlord’s agents liable therefor.  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.

11.01

Except in connection with a Permitted Transfer (defined in Section 11.04), 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 11.02.  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 quoted on the Pink Sheets or Bulletin Board 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.

11.02

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 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 Transfer in writing; or (c)  in the event of an assignment of this Lease or subletting of more than 35% of the Rentable Area of the Premises for more than 50% of the remaining Term (excluding unexercised options), recapture the portion of the Premises that Tenant is proposing to Transfer.  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 Landlord a review fee of $1,500.00 for Landlord’s review of any Permitted Transfer or requested Transfer.

11.03

Tenant shall pay Landlord 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 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 in connection with the Transfer, including tenant improvement allowances, brokerage fees and attorneys’ fees.  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.

11.04

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 Permitted Use does not allow the Premises to be used for retail purposes; and (d) Tenant shall give Landlord written notice at least 15 Business 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 Article 11).

12.

Liens.

Tenant shall not permit mechanics’ or other liens to be placed upon the Property, Premises or Tenant’s leasehold interest in connection with any work or service done or purportedly done by or for the benefit of Tenant or its transferees.  Tenant shall give Landlord notice at least 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, within 10 days of notice from Landlord, shall fully discharge any lien 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, 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.

Tenant hereby waives all claims against and releases Landlord and its trustees, members, principals, beneficiaries, partners, officers, directors, employees, Mortgagees (defined in Section 23) 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, unless due to or arising out of the gross negligence or willful misconduct of the Landlord or Landlord Related Parties, (d) the inadequacy or failure of any security services, personnel or equipment, unless due to or arising out of the gross negligence or willful misconduct of the Landlord or Landlord Related Parties,  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 the same results from the gross negligence or willful misconduct of Landlord, its agents, contractors, or employees.  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.  Except to the extent caused by the negligence or willful misconduct of Tenant or any Tenant Related Parties, Landlord shall indemnify, defend and hold Tenant, its trustees, members, principals, beneficiaries, partners, officers, directors, employees and agents (“ Tenant Related Parties ”) harmless against and from all Losses which may be imposed upon, incurred by or asserted against Tenant or any of the Tenant Related Parties by any third party and arising out of or in connection with the acts or omissions (including violations of Law) of Landlord or the Landlord Related Parties.

14.

Insurance.

Tenant shall maintain the following insurance (“ Tenant’s Insurance ”):  (a) Commercial General Liability Insurance applicable to the Premises and its appurtenances, including blanket contractual and personal liability, with broad form endorsement, in the amount of $3,000,000 per occurrence and $3,000,000 in the aggregate; (b)  Property/Business Interruption Insurance written on an All Risk or Special Perils form, with coverage for broad form water damage including earthquake sprinkler leakage, at replacement cost value and with a replacement cost endorsement covering all of Tenant’s business and trade fixtures, 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; (d) Employers Liability Coverage of at least $1,000,000 per occurrence; (e) Automobile Insurance (Hired and Owned) in a combined single limit of $1,000,000; and (f) Excess/Umbrella Liability Insurance in the amount of $5,000,000 per occurrence and $5,000,000 in the aggregate.  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), Normandy Real Estate Partners, LLC, Normandy Real Estate Management, LLC, and all of their affiliates, members, officers, employees, agents and representatives, managing agents and premises owners, 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 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 earlier to occur of the Commencement Date or the date Tenant is provided with possession of the Premises, and thereafter as necessary to assure that Landlord always has current certificates evidencing Tenant’s Insurance.  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.  

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.

16.

Casualty Damage.

16.01

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 good faith 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 180 days from the date the repair is started, then either party shall have the right to terminate this Lease upon written notice given to the other within 10 days after receipt of the Completion Estimate, and the effective date of termination shall be the date that is ninety (90) days after the date of said termination notice.  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 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 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.  If Landlord so elects, then this Lease shall terminate on the date that is ninety (90) days after Landlord delivers such termination notice.  

16.02

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, 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 restoration performed by or for the ben