SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Alarmguard Holdings, Inc.
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(Exact name of registrant as specified in its charter)
May 1, 1997
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Date of Report (Date of earliest event reported)
Delaware 001-08138 33-0318116
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(State or other juris- (Commission (I.R.S. employer
diction of incorporation file number) identification no.)
125 Frontage Road, Orange, Connecticut 06477
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(Address of principal executive offices) (Zip Code)
(203) 795-9000
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
On May 1, 1997, Security Systems Holdings, Inc., a Delaware corporation
and a wholly-owned subsidiary of the Registrant ("SSH"), acquired (the
"Acquisition") all of the outstanding capital stock of Protective Alarms, Inc.,
a Connecticut corporation ("Pro"), from Steven Levine, Fritzie Levine and the
other existing stockholders of Pro (collectively, the "Sellers") pursuant to a
Stock Purchase and Sale Agreement, dated as of December 20, 1996, as amended
(the "Stock Purchase Agreement"), among SSH and the Sellers. In addition, on May
1, 1997, immediately after the consummation of the Acquisition, Pro was merged
with and into Alarmguard, Inc., a Delaware corporation and a wholly-owned
subsidiary of SSH.
Pro (together with its subsidiary, "Protective Alarms") is a security
alarm installation and monitoring company doing business primarily in
Connecticut and Westchester County, New York, that provides security equipment
and monitoring services to homeowners and businesses. In addition, Protective
Alarms specializes in providing security and monitoring services to businesses
with multiple locations, under the name "Pro National," primarily in the
Northeastern United States. On May 1, 1997, Protective Alarms had approximately
9,000 alarm subscribers and approximately $400,000 of monthly recurring revenue
("MRR"). (MRR means monthly recurring revenue that a company is entitled to
receive under contracts in effect at the end of such period. MRR is a term
commonly used in the security alarm industry as a measure of the size of a
company. It does not measure profitability or performance, and does not include
any allowance for future subscriber attrition or for uncollectible accounts
receivable.)
At the closing of the Acquisition (the "Closing"), SSH paid to the
Sellers, as the purchase price for the Pro stock, (i) $14,339,014 in cash (which
included $250,000 previously paid as a cash deposit) and (ii) a promissory note
in the amount of $1,755,000, bearing interest at the rate of 10% per annum and
secured by an irrevocable letter of credit, due upon the completion of certain
post-closing adjustments to the purchase price based upon a review of the value
of Protective Alarm's assets as of the Closing. In addition, SSH repaid at the
Closing an aggregate of $1,488,955 of Protective Alarms' bank and other
third-party debt. Pursuant to the Stock Purchase Agreement, SSH also paid to the
Seller at the Closing $1.3 million in additional consideration as an advance on
amounts payable to the Sellers upon the installation, during the 12 month period
following the Closing, of alarm monitoring systems under national account
contracts which are in effect as of the Closing. Additional amounts to be paid
with respect to such installations will not exceed $1.6 million.
Pursuant to the Stock Purchase Agreement, the Sellers have agreed to
indemnify SSH and Alarmguard, Inc. against losses due to breaches of
representations or covenants contained in the Stock Purchase Agreement or due to
liabilities to third parties arising prior to the Closing. In connection with
the Closing, Alarmguard, Inc. entered into a one-year employment agreement (the
"Employment Agreement") with Steven Levine, and each of the Sellers entered into
a non-compete agreement (the "Non-Compete Agreement") with SSH. In addition,
Alarmguard, Inc. entered into
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a five year lease agreement (the "Lease Agreement") with a partnership, one of
whose partners is Steven Levine.
The purchase price for the Pro stock and the repayment of Protective
Alarm's third-party debt at the Closing was funded with cash balances of the
Registrant and with borrowings under Alarmguard Inc.'s senior secured revolving
credit facility with the Bank of Boston Connecticut, General Electric Capital
Corporation and IBJ Schroeder Bank & Trust Company. The amount of the purchase
price was based primarily on Protective Alarm's MRR as of the date of Closing
and was determined in arm's-length negotiations between SSH and the Sellers. The
acquisition will be accounted for under the purchase method of accounting,
whereby the purchase price will be allocated to the assets acquired and
liabilities assumed based on their relative fair values on the date of Closing.
The Stock Purchase Agreement, the Employment Agreement, the Non-Compete
Agreement and the Lease Agreement are filed as exhibits to this Report on Form
8-K and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired.
It is impracticable at this time to file the required financial
statements for the acquired business. The Registrant will file such
financial statements as soon as practicable, but not later than 60 days
after the date on which this Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
It is impracticable to provide the required pro forma financial
statements for the acquired business. The Registrant will file such
financial statements as soon as practicable, but not later than 60 days
after the date on which this Report on Form 8-K is required to be filed.
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(c) Exhibits.
Number Exhibit
2.1 Stock Purchase Agreement, dated December 20, 1996,
between Security Systems Holdings, Inc. and the Sellers
(restated to reflect the Amendment to Stock Purchase
Agreement dated as of February 28, 1997) (incorporated
by reference to Exhibit 10.26 to the Registration
Statement on Form S-4 (file No. 333-23307) of the
Registrant).
2.2 Amendment No. 2 to Stock Purchase Agreement, dated May
1, 1997.
2.3 Employment Agreement, between Alarmguard, Inc. and
Steven Levine, dated May 1, 1997.
2.4 Non-Compete Agreement between Security Systems Holdings,
Inc. and the Sellers, dated as of May 1, 1997.
2.5 Lease Agreement between One River Associates and
Alarmguard, Inc., dated April 30, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALARMGUARD HOLDINGS, INC.
Dated: May 15, 1997 By:/s/David Heidecorn
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Name: David Heidecorn
Title: Executive Vice President & Chief
Financial Officer
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EXHIBIT INDEX
Exhibit
No. Exhibit
2.1 Stock Purchase Agreement, dated December 20, 1996, between Security
Systems Holdings, Inc. and the Sellers (restated to reflect the
Amendment to Stock Purchase Agreement dated as of February 28, 1997)
(incorporated by reference to Exhibit 10.26 to the Registration
Statement on Form S-4 (file No. 333-23307) of the Registrant).
2.2 Amendment No. 2 to Stock Purchase Agreement, dated May 1, 1997.
2.3 Employment Agreement, between Alarmguard, Inc. and Steven Levine,
dated May 1, 1997.
2.4 Non-Compete Agreement between Security Systems Holdings, Inc. and
the Sellers, dated as of May 1, 1997.
2.5 Lease Agreement between One River Associates and Alarmguard, Inc.,
dated April 30, 1997.
EXHIBIT 2.2
SECOND AMENDMENT TO STOCK PURCHASE AND SALE AGREEMENT
THIS AGREEMENT (the "Amendment Agreement") is made as of this 1st
day of May, 1997, by and between Steven Levine, an individual, ("Levine")
Fritzie Levine, an individual, Walter Levine as trustee of The Lori Levine
Esposito Trust, (the "Lori Trust") and Walter Levine as trustee of The Leslie
Levine Oxfeld Trust (the "Leslie Trust") (each a "Seller" and collectively
"Sellers"), on the one hand, and Security Systems Holdings, Inc., a Delaware
corporation ("Purchaser"), on the other hand. The Lori Levine Espositio Trust
and the Leslie Levine Oxfeld Trust are herein referred to as the "Trusts."
Levine and Fritzie Levine are sometimes referred to herein collectively as the
"Principal Sellers."
W I T N E S S E T H:
WHEREAS, the parties are parties to a certain Stock Purchase and Sale
Agreement dated as of the 20th day of December, 1996 and amended by agreement
dated the 28th day of February, 1997 (the "Agreement"); and
WHEREAS, the parties now wish to amend certain provisions of the
Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and provisions hereof, the parties hereby agree as follows:
1. Section 6.1.3 of the Agreement is hereby amended to read in its
entirety as follows:
"6.1.3 sell, transfer or otherwise dispose of, or agree to sell, transfer
or otherwise dispose of (other than in the ordinary course of business),
any of its assets, properties, services or rights, including inventories,
or cancel or otherwise terminate, or agree to cancel or otherwise
terminate, any debts or claims (other than ordinary course credits or
adjustments to accounts receivable), except the foregoing shall not
prohibit the disposition to Sellers of accounts of terminated customers
which have been turned over to collection, two one-year term life
insurance policies on the life of Levine in the face amounts of $3,000,000
and $2,000,000, respectively, the capital stock of Interstate Central
Systems, Inc. and the distribution to Levine described in Schedule 4;"
2. The alarm monitoring contracts in Interstate Central Systems, Inc. have
been transferred to Protective and the stock of Interstate Central Systems, Inc.
has been transferred to the Sellers. Section 9.1.1 is hereby amended by adding
two additional subsections (f) and (g), as follows:
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"(f) any claim made against Protective by, or liability of
Protective to, a third party of any nature on account of a liability of
Interstate Central Systems, Inc. arising after the date of transfer of its
monitoring contracts to Protective other than any liability attributable
to the monitoring contracts; and
(g) accounts at no cost, which executives are listed on Exhibit A
attached to this amendment agreement and Purchaser agrees to honor such
agreements."
9. Except as amended herein, the Agreement remains in full force and
effect.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
SELLERS: PURCHASER:
Security Systems Holdings, Inc.
/s/ Steven Levine
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Steven Levine
By: /s/ Russell R. MacDonnell
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Russell R. MacDonnell
/s/ Fritzie Levine Chairman
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Fritzie Levine
The Lori Levine Esposito Trust
By /s/ Walter Levine
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Walter Levine, trustee
The Leslie Levine Oxfeld Trust
By /s/ Walter Levine
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Walter Levine, trustee
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EXHIBIT 2.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated May 1, 1997 by and between Steven Levine,
residing at 16 Taylor Lane, Westport, Connecticut 06880 ("Employee"), and
Alarmguard, Inc., a Delaware corporation, with an office at One River Road, Cos
Cob, Connecticut 06830 (the "Company").
RECITALS
The Company is engaged in the conduct of a residential and commercial
security alarm business in, among other areas, the metro New York area and has
acquired through merger with Protective Alarms, Inc., a Connecticut corporation
("Protective"), of which the Employee was President and majority shareholder, a
national account business with monitored locations throughout the United States.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained and for other valuable consideration, is mutually
covenanted and agreed as follows:
1. Employment. The Company shall employ the Employee and the Employee
shall serve the Company, initially as a Vice President of the Company and as
President of the Company's Protective Alarms Division (for so long, during the
term of the Employee's employment hereunder as the Company shall maintain such a
Division), and the Employee shall devote his full working time and his best
efforts to his services for the Company, and shall, under no circumstances, take
any action inimical to the best interests of the Company. Employer's duties
shall include, among other things, oversight over collections and cancellations
of the former customers of Protective.
2. Term of Employment. The term of the Employee's employment under this
Agreement shall commence on this date and, subject to the provisions for
termination provided herein, shall continue for a term of twelve months
thereafter.
3. Compensation. As full compensation for services rendered by the
Employee under this Agreement, he shall be entitled to receive a salary at the
annual rate of $289,000, in equal installments payable at least monthly and
otherwise in accordance with the normal payroll practices of the Company, in
effect from time to time.
4. Expenses; Benefits. (a) The Company shall reimburse the Employee for
all reasonable expenses (including attendance at alarm association meetings)
properly incurred by him in connection with the performance of his duties under
this Agreement, upon presentation of appropriate vouchers covering such
expenses, in each case in accordance with the Company's rules and regulations as
in effect from time to time.
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(b) The Employee shall be entitled to three weeks paid vacation, holiday
and other similar benefits on the same basis as other management employees of
the Company as in effect from time to time.
(c) The Employee shall be eligible to participate, in accordance with
their terms, in all medical and health plans (which shall be fully paid for
Employee and Employee's dependents), life insurance and pension plans as are
maintained by the Company or its affiliates for other management employees
performing similar services; provided that the Company and its affiliates shall
at all times be free to terminate, modify or amend such plans. The foregoing
notwithstanding, the Employee shall not participate in or receive benefits under
any disability insurance plan in effect for senior management of the Company,
the parent corporation of the Company or affiliates of the Company or under any
stock option plan in effect for employees of the Company, the parent corporation
of the Company or affiliates of the Company.
(d) The Employee shall be entitled to receive a car allowance of $500 per
month, plus the cost of gasoline consumed.
5. Termination. (a) The Employee's employment under this Agreement shall
terminate on the expiration of the one year term referred to above or upon his
earlier death unless sooner terminated for cause (as defined below) or in
accordance with Section 5(b) hereof.
(b) If, as the result of any mental or physical disability by a physician
acceptable to the Company, the Employee shall fail or be unable to perform his
duties hereunder for a period of 90 days (whether or not consecutive) during any
12-month period of his employment under this Agreement, the Company may, by
notice to the Employee, terminate his employment under this Agreement as of the
date of such notice.
(c) Upon expiration of the term of this Agreement, the Employee shall
thereupon become an employee at will unless his employment shall have previously
terminated.
(d) For purposes of this Agreement "cause" shall mean breach of a
fiduciary duty owed to the Company, material breach of any written agreement
with the Company, conviction of a felony (which shall be deemed to include an
admission of guilt or a plea of no contest), gross negligence, willful
misconduct or conduct beyond the scope of the Employee's authority as an
employee of the Company, but shall not include matters relating solely to the
competence of the Employee in the performance of his duties as an employee.
6. Confidentiality. The Employee shall not, directly or indirectly, either
during the term of his employment under this Agreement or at any time
thereafter, disclose to anyone (except in the regular course of the Company's
business) any information with respect to any confidential or secret aspects of
the business or affairs of the Company or any of its affiliates. The Employee
acknowledges that the remedy at law for breach of any of his covenants under
this paragraph will be inadequate and, accordingly, in the event of any such
breach or threatened breach by him
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<PAGE>
Company shall be entitled, in addition to all other remedies, to an injunction
restraining any such breach, without any bond or other security being required.
7. Noncompetition. As a condition to his employment hereunder, the
Employee agrees that (i) for a period of three years following the termination
of his employment with the Company for any reason (including termination after
becoming an employee at will) he will not become a partner, shareholder, owner,
principal, agent or employee of, or consultant to, any entity engaged in the
residential and/or commercial security alarm business or any business that
competes with such a business, in any county in the state of Connecticut or in
Westchester or Rockland Counties in the state of New York and (ii) for a period
of ten years following termination of his employment with the Company for any
reason, he will not, directly or indirectly, contact, solicit or otherwise seek
to do business in the residential or commercial security alarm business with, or
engage in any such business with, any clients or customers to whom the Company
has at any time during his employment by the Company (regardless whether under
this Agreement) rendered services or sold products. If Russell R. MacDonnell is
no longer the Chairman (or comparable position) of the Company or of any parent
corporation of the Company, at any time after the expiration of six years
following termination of the Employee's employment with the Company, the
provisions of subpart (ii) shall no longer be binding on the Employee. For
purposes of subpart (ii) general advertising such as yellow page or media
advertising (but not including direct mail, telemarketing or other targeted
marketing efforts) shall not be considered solicitation, provided that the
prohibition on engaging in business with the clients or customers identified in
subpart (ii) shall remain in effect.
8. Miscellaneous. (a) Any notice or other communication under this
Agreement shall be in writing and shall be considered given when delivered
personally or mailed by registered mail, return receipt requested, to the
Employee and the Company and their respective addresses set forth above (or at
such other address as a party may specify by notice to the other).
(b) This Agreement may not be amended, except in writing signed by both of
the parties hereto.
(c) This Agreement shall be binding upon and inure to the benefit of the
parties hereto and successors to the Company, but neither this Agreement nor any
rights hereunder may be assigned, pledged or encumbered by the Employee without
the prior written consent of the Company. This Agreement may be assigned by the
Company to any parent, subsidiary, affiliated or related entity or any entity
acquiring or succeeding to control of ownership of the Company or substantially
all of the assets thereof.
(d) This Agreement shall be governed by and construed in accordance with
the law of the State of Connecticut.
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In Witness Whereof, the parties have signed this Agreement as of the date
first written above.
The Company:
The Employee:
Alarmguard, Inc.
/s/ Steven Levine By: /s/ Russell R. MacDonnell
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Steven Levine Russell R. MacDonnell
Chairman
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EXHIBIT 2.4
NON-COMPETE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of this first day of May,
1997, by and between Steven Levine, an individual, ("Levine") Fritzie Levine, an
individual, Walter Levine as trustee of The Lori Levine Esposito Trust, (the
"Lori Trust") and Walter Levine as trustee of The Leslie Levine Oxfeld Trust
(the "Leslie Trust") (each a "Seller" and collectively "Sellers"), on the one
hand, and Security Systems Holdings, Inc., a Delaware corporation ("Purchaser"),
on the other hand.
W I T N E S S E T H:
WHEREAS, the Sellers collectively own 100% of the issued and outstanding
capital shares of Protective Alarms, Inc., a Connecticut corporation
("Protective");
WHEREAS, Protective is engaged in the burglar and fire alarm business in
the tri-state, metropolitan New York area (the "Business"); and
WHEREAS, Sellers and Purchaser have executed a certain Stock Purchase
Agreement dated December 20, 1996 (the "Stock Purchase Agreement"), pursuant to
which Sellers agree to sell, and Purchaser agrees to buy, all of the issued and
outstanding shares of the capital stock of Protective, all upon the terms and
conditions therein set forth;
WHEREAS, Purchaser would not purchase the stock of Protective from Sellers
pursuant to the Stock Purchase Agreement but for the agreements and covenants of
Sellers contained herein;
WHEREAS, the agreements and covenants contained herein are necessary and
essential to protect the value of the Business acquired by Purchaser; and
NOW, THEREFORE, the parties hereto agree as follows:
1. Confidential Information and Covenant Not To Compete.
On and after the date of this Agreement, Purchaser (or its successors or
assigns) operates and will operate Protective's residential and/or commercial
security business either in Protective or in a successor by merger with
Protective, based in the tri-state, metropolitan New York area, the payment for
which will benefit Sellers. In recognition and specific acknowledgment of
Purchaser's legitimate need to protect its business, Sellers each covenant and
agree that they shall not:
(a) at any time disclose to any person other than Purchaser, or use,
in competition with or in a manner otherwise detrimental to the interests of
Purchaser, for the benefit of itself or others, any confidential information
related to the Business, including but not limited to, trade
<PAGE>
secrets, customer lists, details of client or customer contracts, pricing
policies, operational methods, marketing plans or strategies, and sales records,
for any reason or purpose whatsoever;
(b) except for the performance of services, if any, for Protective
or its successor by merger as an employee, for a period of three years following
the later of the date of this Agreement or termination of employment by
Protective, for any reason, become a partner, shareholder, owner, principal,
agent or employee of, or consultant to, any entity engaged, or engage
individually, in the residential and/or commercial security business or any
business that competes with such a business, in any county in the state of
Connecticut or in Westchester or Rockland Counties in the state of New York (the
"Restricted Area");
(c) for a period of ten years following the later of the date of
this Agreement or termination of employment by Protective or its successor by
merger, for any reason, directly or indirectly contact, solicit or otherwise
seek to do business in the residential or commercial security business with, or
engage in any such business with, any clients or customers to whom Protective
has at any time prior to the date hereof rendered services or sold products. If
Russell R. MacDonnell is no longer the Chairman (or comparable position) of the
Company or of any parent corporation of the Company, at any time after the
expiration of six years following the date of this Agreement, the provisions of
this subpart (c) shall no longer be binding on the Sellers. For purposes of this
subpart (c) general advertising such as yellow page or media advertising (but
not including direct mail, telemarketing or other targeted marketing efforts)
shall not be considered solicitation, provided that the prohibition on engaging
in business with the clients or customers identified in this subpart (c) shall
remain in effect.
2. Rights and Remedies Upon Breach. If any Seller breaches, or threatens
to commit a breach of, any of the provisions of Section 1 (the "Restrictive
Covenants"), Purchaser shall have the following rights and remedies, each of
which rights and remedies shall be independent of any others and severally
enforceable, and shall be in addition to, and not in lieu of, any other rights
and remedies available to Purchaser at law or in equity:
(a) The right and remedy to have the Restrictive Covenants specifically
enforced by any court of competent jurisdiction, including, without limitation,
the right to an entry against such Seller of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations, threatened
or actual, and whether or not then continuing, of any of the Restrictive
Covenants, it being acknowledged and agreed by Sellers that any breach or
threatened breach of any of the Restrictive Covenants would cause irreparable
and continuing injury to Purchaser and that money damages would not provide an
adequate remedy to Purchaser; or
(b) The right and remedy to require such Seller to account for and pay
over to Purchaser all compensation, profits, monies, accruals, increments or
other benefits derived or received by any of them as the result of any
transactions constituting a breach of any of the Restrictive Covenants.
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3. Severability of Covenants. Sellers acknowledge and agree that the
Restrictive Covenants are reasonable and valid in geographical and temporal
scope and in all other respects. If any court determines that any of the
Restrictive Covenants, or any part of any of the Restrictive Covenants, is
invalid or unenforceable, the remainder of the Restrictive Covenants and parts
thereof shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
4. Blue-Pencilling. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable because of the
geographic or temporal scope of such provision, it is the intention and
agreement of the parties that such court shall have the power to reduce the
geographic or temporal scope of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable.
5. Enforceability in Jurisdictions. Sellers and Purchaser intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of Connecticut.
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
7. Benefit. This Agreement shall be binding upon the heirs, executors,
administrators, legal representatives, nominees, successors and assigns of
Sellers and shall inure to the benefit of the successors and assigns of
Purchaser.
8. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed, or caused a duly
authorized officer to execute, this Agreement as of the date first written
above.
SELLERS: PURCHASER:
Security Systems Holdings, Inc.
/s/ Steven Levine
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Steven Levine
By /s/ Russell R. MacDonnell
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Russell R. MacDonnell
/s/ Fritzie Levine Chairman
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Fritzie Levine
The Lori Levine Esposito Trust The Leslie Levine Oxfeld Trust
By /s/ Walter Levine By /s/ Walter Levine
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Walter Levine, trustee Walter Levine, trustee
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EXHIBIT 2.5
LEASE AGREEMENT
THIS LEASE AGREEMENT, made by and between ONE RIVER ROAD ASSOCIATES , a
Connecticut general partnership, with its offices at 16 Taylor Lane, Westport,
Connecticut 06880 (hereinafter referred to as "Landlord") and ALARMGUARD, INC.,
whose address is 125 Frontage Road, Orange, Connecticut 06477 (hereinafter
referred to as the "Tenant").
WITNESSETH:
1.(a) Premises: Landlord hereby leases to Tenant and Tenant hereby hires
from Landlord Unit I (the "Demised Premises") as defined in the Declaration of
Condominium of One River Road, dated July 14, 1988 (the "Declaration of
Condominium") and shown on the survey entitled "Survey & Plan of One River Road,
a Condominium Common Interest Community declared by Viewpoint Company Greenwich,
Conn." dated June 10, 1988 prepared by Robert A. Deval of S.E. Minor Co., Inc.,
which is Schedule A-3 to the said Declaration of Condominium at One River Road,
Cos Cob, Connecticut which Landlord represents is a building comprising
approximately 9,912 rentable square feet (including the basement/warehouse and
storage rooms (hereinafter sometimes referred to as the "Demised Premises"), and
as shown on Schedule "A" attached hereto and made a part hereof, together with
all rights to use the Common Elements or the Common Areas and Limited Common
Elements or the Limited Common Areas appurtenant to said Unit 1 in said
Declaration of Condominium, but not including the area shown on Schedule A
attached to this Lease designated as "Sprint Lease Area".
The Landlord reserves all right in and to the Sprint Lease Area and
the Tenant acknowledges Landlord's right to lease the Sprint Lease Area for the
purpose of installation, maintenance and operation of an antenna tower to Sprint
together with the right to grant a non exclusive easement for reasonable access
to the source of electric and telephone service on the Demised Premises,
provided Sprint does not unreasonably interfere with Tenant's use of the Demised
Premises. Tenant shall not go upon the Sprint Lease Area, interfere with the
Landlord's rights to said area, or share in any rent or revenue derived
therefrom. The term "Condominium" shall mean the entire parcel declared as One
River Road Condominium.
(b) Tenant Improvements. Tenant shall erect, install, and construct,
at its sole cost and expense, improvements to the interior of the Demised
Premises, subject to Landlord's approval which shall not be unreasonably
withheld. Within ninety (90) days after commencement of the term of this Lease,
Tenant shall submit to Landlord plans for Tenant's improvements, such
improvements to begin as soon as reasonably practicable after receipt of
Landlord's approval.
2.(a) Term and Rental: The term of this Lease shall be for a period of
five (5) years commencing May 1, 1997, and terminating April 30, 2002 (the
"Initial Term").
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The annual rent for the Demised Premises shall be Twenty and 00/100
($20. 00) Dollars per square foot of rentable space in the Demised Premises. The
Landlord represents that there are 9,912 rentable square feet measured from the
interior of the building walls. Based upon this represented square footage, the
rent calculation equals:
Lease Year Annual Rental Monthly Rental
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Year 1 through and
including Year 5 $198,240.00 $16,520.00
All rental payments shall be payable in monthly installments as set forth
above, (hereinafter the "Rent" or "Base Rent"). Said rental shall be payable on
the first day of each month in advance.
(b) Additional Rent: This Lease shall be on a triple net basis and,
therefore, all additional sums, charges or amounts of whatever nature to be paid
by Tenant to Landlord in accordance with the provisions of this Lease, whether
or not such sums, charges or amounts are referred to as additional rental
(collectively referred to as "Additional Rent").
3. Repairs and Maintenance:
(a) The Landlord shall repair and maintain in good order and
condition at its expense throughout the term of this Lease, the exterior and
structure of the Demised Premises, including roof, parking areas and exterior
structure, as well as all parts of the plumbing and electrical systems not
within the Demised Premises and the Landlord shall make any repairs necessary to
make all exterior doors and windows air and water tight and in a safe condition.
(b) The Tenant shall repair and maintain in good order and condition
the interior of said Demised Premises, including all glass in windows, doors or
skylights, heating, plumbing, electrical and air conditioning systems which are
within or on the Leased Premises. The Tenant agrees to keep both sides of all
outside glass areas in a neat and clean condition, and to store all trash and
garbage within the Demised Premises.
(c) From the Commencement Date through the end of the fifth year of
the Lease, Tenant will repair and maintain any plumbing, HVAC and electrical
systems in the Demised Premises and Tenant shall be liable for the cost of said
repairs up to $500.00 per repair to the plumbing or electrical systems and up to
$750.00 per repair to the heating, ventilation and air-conditioning system
("HVAC"). Any repair to the electrical or plumbing systems in excess of $500.00
(or $750.00 in the case of HVAC) ("Excess Repair") will be at the expense of the
Landlord, except if due to Tenant's willful or negligent acts. Tenant will be
responsible for the repair of all glass in the building, except if the damage is
due to Landlord's willful or negligent acts.
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Tenant shall, prior to having any Excess Repair commenced,
obtain the consent of Landlord, which should not be unreasonably withheld unless
Landlord is able to have said repair completed at a lower cost.
Upon approval and completion of the Excess Repair, Tenant
shall invoice Landlord for the cost of any such repair in excess of the amounts
stated in this paragraph together with copies of invoices received by Tenant for
such repairs and Landlord shall promptly remit such excess amounts to Tenant.
4. Tenant agrees to pay as provided below, as additional rent, Tenant's
proportionate share of all reasonable costs and expenses of every kind and
nature as may be paid or incurred by Landlord by common charge, which common
charge for the Demised Premises is defined as 50% of the total common charges
for the Common Interest Community known as One River Road, pursuant to the
Condominium Declaration and By-laws during the Lease Term in operating,
managing, insuring, equipping, lighting, repairing, replacing and maintaining
the "Common Areas" and "Limited Common Areas" and in providing such security
protection and fire protection for the Demised Premises as Landlord reasonably
deems necessary. The term "Common Areas" and "Limited Common Areas" shall mean
those areas and facilities defined as "Common Elements" and "Limited Common
Elements" in the Declaration of Condominium and includes generally, those areas
furnished by Landlord for the exclusive or non-exclusive general common use of
unit owners and other occupants of the Condominium, their agents, officers,
employees, and customers including, (without limitation), all parking areas,
access roads, driveways, delivery passages, sidewalks, ramps, landscaped and
planted areas, retaining walls, stairways and lighting facilities. Such cost and
expenses shall include, but shall not be limited to: general cleaning of the
parking and driveway area, cleaning and repair of sidewalks, curbs, stairways,
maintenance and repair of the landscaping and the irrigation systems,
maintenance and repair of the Condominium and Demised Premises signs and the
directional signs, the lighting systems in the parking and walkway areas, storm
drainage and sanitary sewer systems, trash disposal or other utility systems,
the cost of water service, the cost of electricity for lighting in the public
areas; the reasonable wages and related payroll costs of personnel employed by
Landlord or Condominium Association to implement such services, to the extent
that such services are actually provided by such personnel to the Condominium;
premiums for Landlord's public liability, property damage, "all risk" fire and
extended coverage insurance for the entire Condominium, as well as flood
insurance, and all buildings and improvements therein; personal property taxes
of Landlord that relate to the common areas; fees, licenses and permits required
to be obtained by Landlord for the Condominium; supplies, and all property taxes
or assessments levied or assessed against the Demised Premises and the limited
common elements appurtenant thereto. Landlord represents to Tenant that such
Common Charges for each of the past four (4) years have been: $2,500.00,
$3,000.00, $3,500.00 and $3,500.00 and Landlord does not know of any reason why
Common Charges for the term of this Lease should significantly exceed such
amounts.
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Tenant will be responsible for its proportionate share of all common
charge expenses or assessments for repairs to the Common Areas up to $500.00 per
repair, except if due to Tenant's willful or negligent acts.
Landlord shall not be liable in damages or otherwise for any failure or
interruption of any common area services being furnished the Condominium, which
failure or interruption is not the result of Landlord's negligence or willful
wrongdoing, and no such failure or interruption, except as provided in Section
16A of this Lease, shall entitle Tenant to terminate this Lease. Notwithstanding
the foregoing, Tenant shall however be entitled to a rent abatement pro rata
corresponding to the time during which and the extent to which it is unable to
operate its business as normally operated because of such failure or
interruption of Common Area Service for thirty (30) days or more.
5 Fixtures and Alterations:
(a) The Tenant shall have the right to install any lighting fixtures
or other trade fixtures or equipment, and may at its expense at any time, repair
or redecorate the Demised Premises and may install movable partitions. The
Tenant shall make no structural changes or alterations to the Demised Premises,
unless prior written approval from the Landlord is obtained, which shall not be
unreasonably withheld.
(b) Upon expiration or sooner termination hereof, the Tenant may
remove any lighting fixtures, trade fixtures, partitions or other equipment
installed by it in the Demised Premises, but the Tenant shall make any repairs,
structural and nonstructural, to the Demised Premises necessitated by such
removal in order to restore the Premises to good repair and the original
condition of the Demised Premises.
6. Parking Areas and Common Facilities: Except as provided in this Lease,
the Tenant, its customers, employees, and all those having business with it,
shall have the right to use, in common with others, all parking areas, walks,
approaches, entrances, exists, roadways and service roads. The Tenant shall use
reasonable diligence to cause all of its employees to park their motor vehicles
within areas designated in the Declaration of Condominium as parking spaces
allocated to Unit 1. Tenant shall conform to all reasonable and uniform rules
and regulations which the Condominium Association may make in the management and
use of the parking areas and common facilities of the Condominium, provided that
a copy thereof shall have been delivered to it by Landlord, and provided also
that such rules shall be applicable to all other tenants in the Condominium.
Landlord will provide Tenant with the 25 reserved parking spaces as set
forth in the Declaration of Condominium.
7. Uses: Tenant shall use the Demised Premises for the conduct thereon of
a security (burglar and fire) alarm business. Landlord represents that such use
is in conformity with all applicable zoning and other laws, rules and
ordinances.
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8. Utilities: The Tenant shall pay for all electric, water, fuel oil, gas,
heat and telephone charges incurred by it in Demised Premises. The Tenant shall
have access at all times to all utility systems and meters which serve the
Demised Premises. In the event annual sewer rents are charged, Tenant shall pay,
as additional rent, its pro rata share of any such sewer use charges. A pro rata
adjustment shall be made for any sewer use charges levied during the year the
Lease terminates. Tenant will pay for all utilities in conjunction with its use
of the Demised Premises. Landlord shall be responsible for having electric,
water, fuel oil, gas and telephone service provided to the Demised Premises
during the term of this Lease to the extent the same are currently servicing the
Demised Premises.
9. Covenants by Tenants:
(a) To pay when due the said rent at the time and in the manner set
forth in this Lease, including any additional rent.
(b) To procure any licenses and permits required for any use made of
said Demised Premises by Tenant; and upon the expiration or termination of this
Lease, to remove its goods and effects and those of all persons claiming under
it and to yield up peaceable to Landlord the Demised Premises in good order,
repair and conditions in all respects, damaged by fire, taking, casualty,
structural defects and reasonable wear and tear only accepted.
(c) Not to make any use of the Demised Premises which is improper,
offensive or contrary to any law or ordinance; nor to permit any act or thing to
be done on the Demised Premises which shall constitute a nuisance or which
Tenant may reasonably determine may make void or voidable any insurance on said
Premises or the building of which they are a part, and to pay any increased or
extra premium payable for any such insurance resulting from any act done by
Tenant.
(d) To pay promptly when due the entire cost of any work to the
Demised Premises undertaken by Tenant so that said Premises shall at all times
be free of liens for labor and materials; to procure all necessary permits
before undertaking such work; to do all of such work in a good and workmanlike
manner, employing materials of good quality and complying with all governmental
requirements; and to save Landlord harmless and indemnify Landlord from any and
all injury, loss, claim or damage to any person or property occasioned by or
arising out of such work.
10. Liability and Indemnity:
(a) Indemnity by Tenant. Tenant shall indemnify, hold harmless and
defend Landlord from and against any and all claims, actions, damages, liability
and expense, proven in a court of competent jurisdiction, including, but not
limited to, attorney's and other professional fees, in connection with loss of
life, personal injury and/or damage to property arising from or out of the
occupancy or use by Tenant of the Demised Premises or any part thereof or any
other part of the Condominium, occasioned wholly or in part by any act or
omission of Tenant, its officers, agents,
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contractors, employees or invitees, so long as Landlord is not contributorily
negligent or strictly liable in connection with any and all claims, actions
damages, liability and expense.
(b) Landlord Not Responsible for Acts of Others. Except with respect
to Landlord's warranty as to Quiet Enjoyment set forth in Section 15 of this
Lease, Landlord shall not be responsible or liable to Tenant, or to those
claiming by, through or under Tenant, for any loss or damage which may be
occasioned by or through the acts or omissions of persons occupying space
adjoining the Demised Premises or any part of the premises adjacent to or
connecting with the Demised Premises or any other part of the Condominium, or
otherwise, or for any loss or damage resulting to Tenant, or those claiming by,
through or under Tenant, or its or their property, from the breaking, bursting,
stoppage or leaking of electrical cable and wires, and water, gas, sewer or
steam pipes, so long as Landlord is not negligent or strictly liable for any
such damage.
(c) Tenant's Insurance. At all times after the execution of this
Lease, Tenant will carry and maintain, at its expense, a non-deductible:
(i) public liability insurance, including, but not limited to,
insurance against assumed or contractual liability under this Lease, with
respect to the Demised Premises, to afford protection with limits, for each
occurrence, of not less than Two Million ($2,000,000.00) Dollars with respect to
personal injury or death, and One Million ($1,000,000.00) Dollars with respect
to building property damage (without co-insurance and with replacement value
coverage);
(ii) all-risk property and casualty insurance, written at
replacement cost value and with replacement cost endorsement, covering all of
Tenant's personal property in the Premises (including, without limitation,
inventory, trade fixtures, floor covering, furniture and other property
removable by Tenant under the provisions of this Lease) and all leasehold
improvements installed in the Demised Premises by or on behalf of Tenant; and
(iii) flood insurance in an amount not less than $500,000.00;
(iv) if and to the extent required by law, workmen's
compensation or similar insurance in form and amounts required by law.
(v) Tenant, at its sole cost and expense, shall, from and
after the date of the execution of this Lease, keep the Demised Premises, or the
building of which the Demised Premises are a part, as the case may be, insured
against loss or damage by fire and any of the casualties included in the
extended coverage or supplementary contract endorsements, in an amount not less
than full replacement cost without co-insurance with an insurer reasonably
acceptable to Tenant.
(d) All policies required to be obtained by Tenant hereunder shall
name the Landlord as an additional insured and shall provide that insured agrees
that such policy shall not be canceled except after thirty (30) days' prior
notice to Landlord.
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11. Assignment and Sublease: Tenant shall not assign this Lease, or sublet
the Demised Premises without obtaining the prior written consent of the
Landlord, which consent shall not unreasonably be withheld and further provided
assignee or subtenant is of equal or greater financial strength as Tenant and
provided the proposed assignee or subtenant's business is of good reputation.
The assignee or subtenant will be deemed to be of equal or greater financial
strength as Tenant if assignee or subtenant has a net worth and net income equal
or greater than Tenant as set forth in Tenants audited financial statements
dated September 30, 1996.
12. Signs: Tenants shall not erect, maintain or place any signs or
fixtures on the exterior of the Demised Premises unless it has received prior
written permission from the Landlord for the erection of such sign, which shall
not be reasonably withheld.
13. Waiver of Subrogation: Both Landlord and Tenant hereby release the
other from any and all liability or responsibility (to others or anyone claiming
through or under them by way of subrogation or otherwise) for any loss or damage
to property caused by fire or any of the extended coverage or supplementary
contract casualties, even if such fire or other casualty shall have been caused
by the fault or negligence of the other party, any one from whom such party may
be responsible; provided, however, that this release shall be applicable and in
force and effect only with respect to loss or damages occurring during such time
as the releasor's policies shall contain a clause or endorsement to the effect
that any such release shall not adversely affect or impair said policies or
prejudice the right of the releasor to recover thereunder. Both Landlord and
Tenant agree that their policies will include such a clause or endorsement so
long as the same shall be obtainable without extra cost, or if extra cost shall
be chargeable therefor, each party shall advise the other thereof and of the
amount of the extra cost, and the other party, at its election, may pay the
same, but shall not be obligated so to do.
14. Damage: If the Demised Premises, or the building in which it forms a
part, is partially damaged by fire or other casualty not caused by negligence or
willful act or omission of Tenant, which damage substantially impairs Tenant's
ability to carry on its business, and such damage can be repaired within 90 days
of the date of such occurrence, this Lease shall remain in full force and
effect, and the Landlord shall promptly repair such damage at its expense, and
in that event, there shall be a proportionate abatement of rent for so much of
the Demised Premises as are reasonably agreed to by Landlord and Tenant as
unusable by Tenant in its day-to-day business during the period of repair or
restoration. If in the opinion of a registered architect or engineer appointed
by mutual agreement of the Landlord and Tenant, the Demised Premises are damaged
by fire or other casualty, as aforesaid, to such an extent as to make them
totally unusable by the Tenant in its day-to-day business for a period of ninety
(90) days or more from the date of such occurrence, and such damage cannot be
repaired or the Premises restored within said time, this Lease shall terminate
at the option of either party upon the written notice given within thirty (30)
days after such occurrence. If fifty (50%) percent or more of the building of
which the Demised Premises form a part are damaged by fire or other casualty, as
aforesaid, to such extent that the same cannot, in the opinion of such an
architect or engineer, be repaired or restored within ninety (90) days of the
date of such occurrence, this Lease may be canceled at the option of either
party upon thirty (30) days
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written notice from the date of such occurrence, even though the Demised
Premises occupied by the Tenant have not become untenantable, and there shall be
an adjustment of rent to said date of termination. In addition, there shall be
no obligation upon the part of Landlord to repair or rebuild during the last
year of the term of this Lease, provided Landlord shall notify Tenant of it
decision not to rebuild or repair during such last year within thirty (30) days
of the occurrence of such an event, at which time this Lease shall terminate. In
no such circumstance shall rent be payable after the period from the date of the
occurrence to the date of termination. Landlord's obligation to repair or
rebuild pursuant to this Paragraph shall be limited to the basic building
(including wiring, plumbing and HVAC systems as they were prior to the casualty
loss) and replacement of any interior work which may have originally been
installed at Landlord's cost.
15. Quiet Enjoyment: Landlord covenants and agrees with Tenant that it has
good right to lease said Demised Premises, and upon Tenant paying the Rent,
Additional Rent and observing and performing all the terms, covenants and
conditions, on Tenant's part to be observed and performed, Tenant may peaceably
and quietly have, hold, occupy and enjoy the Demised Premises and all said
common facilities of the Condominium without hindrance or molestation.
16. Default by Tenant: Upon Tenant's failure to pay any installment of
rent or Additional Rent when due or if Tenant shall fail to observe and perform
any of the other conditions, agreements, or provisions of this Lease in any
material respect, it shall be lawful thereupon, after ten (10) days' written
notice stating the event or nature of the default, and without any legal process
(unless Tenant shall have remedied the failure within said ten (10) days period
or for defaults other than non-payment of rent or Additional Rent shall have
commenced in good faith within said ten (10) day period to remedy said failure
and diligently continues thereafter until said failure is remedied) for Landlord
to re-enter and repossess the Leased Premises, to remove all persons therefrom
and to take exclusive possession of and remove all property therefrom, and any
and all rights of Tenant as a tenant shall, at Landlord's option, immediately
cease and terminate. The failure on the part of the Landlord to re-enter or
repossess the Premises, or to exercise any of its rights hereunder upon any
default, shall not be deemed a waiver of any of the terms and conditions of this
Lease, and shall not preclude said Landlord from the exercise of any of such
rights upon any subsequent occurring default or defaults.
If Tenant shall fail to pay Rent or Additional Rent within ten (10) days
after same is due, Tenant shall also be obligated to pay a late fee equal to
three (3%) percent of the Rent and/or Additional Rent due.
16.(a) Default by Landlord: Upon Landlord's failure to observe and perform
any of the material conditions, agreements, or provisions of this Lease, which
materially affect the Tenant's quiet enjoyment of the Premises, this Lease shall
terminate after ten (10) days' written notice stating the event or nature of the
default, (unless Landlord shall have remedied the failure within said ten (10)
days period or for defaults which may not be remedied within such a ten (10) day
period, shall have commenced in good faith within said ten (10) day period to
remedy said failure and diligently continues thereafter until said failure is
remedied) and, and any and all obligations of Tenant as a
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tenant shall immediately cease and terminate, except for payment of Rent or
Additional Rent due prior to said default.
The failure on the part of the Tenant to exercise any of its rights
hereunder upon any default, shall not be deemed a waiver of any rights of Tenant
to exercise any such rights upon any subsequent occurring default or defaults.
17. Reservations by Landlord: Landlord expressly reserves the following
rights:
(a) to enter said Leased Premises at any time to examine or to make
such repairs, additions or alterations as it may deem necessary for the safety,
improvement or preservation thereof, or of said building, but Landlord assumes
no obligation to make repairs by virtue of this reservation, provided that,
except in the case of an emergency, Landlord's entry shall be at reasonable
times and upon reasonable notice;
(b) during or after the time Tenant abandons or vacates the Demised
Premises or otherwise defaults hereunder, to enter and decorate, remodel,
repair, alter or otherwise prepare the Demised Premises for re-occupancy. The
exercise of any reserved right by Landlord shall never be deemed an eviction or
disturbance of Tenant's use and possession of the Demised Premises and shall
never render Landlord liable in any manner to Tenant or to any person.
18. Eminent Domain: If the whole or any part of the floor area of the
Demised Premises shall be taken under the power of eminent domain, this Lease
shall terminate as to the part so taken on the date Tenant is required to yield
possession thereof to the condemning authority. Landlord shall make such repairs
and alterations as may be necessary in order to restore the part not taken to
useful condition and all Rent (other than any Additional Rental due Landlord by
reason of Tenant's failure to perform any of its obligations hereunder) shall be
reduced in the same proportion as the portion of the floor area of the Demised
Premises so taken bears to Tenant's total floor area. If the aforementioned
taking renders the remainder of the Demised Premises unsuitable for the
permitted use, either party may terminate this Lease as of the date when Tenant
is required to yield possession by giving notice to that effect within thirty
(30) days after such date. If twenty (20%) percent or more of the Demised
Premises Floor Area is taken as aforesaid, or if parking spaces in the
Condominium assigned to the Demised Premises are so taken thereby substantially
reducing the number of parking spaces, and Landlord does not deem it reasonably
feasible to or does not, within thirty (30) days after such taking, replace such
parking spaces with other parking spaces on the portion of the Condominium not
taken, then Tenant may elect to terminate this Lease as of the date on which
possession thereof is required to be yielded to the condemning authority, by
giving notice of such election within ninety (90) days after such date. If any
notice of termination is given pursuant to this Section, this Lease and the
rights and obligations of the parties hereunder shall cease as of the date of
such notice and Rent (other than any Additional Rental due Landlord by reason of
Tenant's failure to perform any of its obligations hereunder) shall be adjusted
as of the date of such termination.
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19. Real Estate Taxes:
(a) The expression "Real Estate Taxes" shall mean all ad valorem
taxes and betterment assessments, water and sewer use charges, where applicable,
imposed or assessed upon or against the real estate constituting the Demised
Premises, Common Areas or Limited Common Areas of the Condominium (or any
portion thereof) by any public authority having jurisdiction, or any property
taxes assessed in lieu of such, except only that if any betterment assessment,
water or sewer use charge is payable in installments, the Real Estate Taxes for
any year shall include only such installments of such betterment assessment,
water and sewer use charge, and interest thereon, as is allocable to said year.
If Landlord shall have the right to elect the period over which any betterment
assessment is payable, Landlord agrees to elect the longest period of time
available. Real Estate Taxes shall not include any income, excess profit,
estate, inheritance, succession, transfer, franchise, capital or other tax or
assessment upon landlord or upon the rentals payable under s Lease, all of which
shall be the obligation of Landlord; provided, however, that if any time during
the Lease term the methods of taxation prevailing at the execution of this Lease
shall be altered so that in lieu of or as a substitute for or in addition to the
whole or any part of the taxes levied, assessed or imposed on real estate as
such there shall be levied, assessed or imposed (i) a tax on the rents received
from such real estate, or (ii) a license fee measured by the rents receivable by
Landlord from the Demised Premises or any portion thereof, or (iii) a tax or
license fee imposed upon Landlord which is otherwise measured by or based in
whole or in part upon the Demised Premises or any portion thereof, then the same
shall be included in the computation of Real Estate Taxes hereunder, computed as
if the amount of such tax or fee so payable were that due if the Demised
Premises were the only property of Landlord subject thereto.
(b) The Tenant shall pay to the Landlord as "Additional Rent" all
real estate taxes due on the Demised Premises, its proportionate share of
Limited Common Elements and Common Elements, less the amount attributable to the
Sprint Lease Area, during the terms of this Lease, pro rated for partial years.
The Landlord shall bill the Tenant's semi-annually on July 1 and January 1 of
each year, based on the Tenant's annual share of Real Estate Taxes, which
payment shall be due within fifteen (15) days of said billing.
(c) Tenant shall also pay any and all water or sewer charges
assessed against the Demised Premises (not including hook-up charges).
20. Subordination:
(a) Tenant's Notice of Intent to Cancel. Tenant shall, upon the
request of the Landlord in writing, subordinate this Lease and the lien hereof
to the lien of any present or future mortgage or mortgages upon the Demised
Premises or any property of which the Demised Premises are a part irrespective
of the time of execution or the time of recording of any such mortgage or
mortgages, provided that the holder of any such mortgage shall enter into a
written agreement with Tenant to the effect that in the event of foreclosure or
other action taken under the mortgage by the holder thereof, this Lease and the
rights of the Tenant hereunder shall not be disturbed but shall
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continue in full force and effect as long as Tenant shall not be in default
hereunder. The word "mortgage" as used herein includes mortgages, deeds or trust
or other similar instruments, and modifications, extension renewals and
replacements thereof, and any, and all advances thereunder.
(b) Anything herein to the contrary notwithstanding, the Tenant
shall not elect to exercise any right or option to cancel and terminate this
Lease for any default by the Landlord without having first given any assignee of
the rents hereunder or mortgagee of the Demised Premises prior written notice of
its election to so cancel and terminate, and the assignee and/or mortgagee,
their successors and assigns, shall have the same period of time as would be
applicable to Landlord after the receipt of such notice in which to remedy or
have remedied any default of the Landlord and thereby void Tenant's election to
cancel and terminate this Lease. No such notice shall extend Landlord's time to
remedy any such default, however.
21. Renewal Option: The Tenant shall have an option to renew the term of
this Lease for an additional five (5) years at the expiration of the Initial
Term; provided however, that the Tenant is not in default hereunder and gives
Landlord notice in writing, at least ninety (90) days prior to the expiration of
the Initial Term (the "Option Term"). The terms and conditions of the Lease
during the Option Term shall be the same as set forth herein, except that the
rental charged hereunder shall be equal to the Annual Rent payable in the fifth
year of this Lease, modified by the change in the Consumer Price Index for Urban
Wage Earners in metropolitan New York from May 1, 1997 to the end of the Lease
term or upon a comparable index if the above index no longer exists.
22. Grace Period: In any case where either party hereto is required to do
any act, the time of the performance thereof shall be extended by a period equal
to any delay caused by or resulting from Act of God, war, civil commotion, fire
or other casualty, labor difficulties, shortages of labor, materials, or
equipment, government regulation or any other causes beyond such party's
reasonable control, whether such time be designated by affixed date, a fixed
time or a "reasonable time".
23. Hazardous Waste: The Tenant hereby irrevocably and unconditionally
agrees to indemnify and hold the Landlord harmless, at all times, from and
against all liabilities, claims, liens, losses, costs, damages and expenses,
including but not limited to, attorney's fees incurred by the Landlord, claim
paid, whether as a result of final judgment or in the settlement of contested
claims, which the Landlord, may incur, sustain or be liable for, directly or
indirectly, in connection with the exercise by the Connecticut Department of
Environmental ("DEP") Protection of any rights it may now or hereafter be
entitled to exercise with respect to Public Act 85-443, or any amendment or
modification thereof, and for any other matter arising directly or indirectly as
a result of said act including, but not limited to, the removal of any
"Hazardous Waste" as defined in the Connecticut General Statutes whether or not
ordered by the State of Connecticut Department of Environmental Protection, and
injuries or damage suffered by third parties, as the result of discharge of oil,
petroleum liquids or other hazardous waste by the Tenant, provided however, that
Landlord shall give prompt notice to Tenant of any such claim and shall allow
the Tenant to defend any such claim. The Landlord may require the Tenant to post
a bond in favor of the Landlord in an amount sufficient
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to indemnify the Landlord under this Paragraph, the amount of said bond to be
determined by the Landlord. Failure of the Tenant to post said bond when
required by the Landlord shall be a default under the Lease. The provision of
this Paragraph shall be binding on the Tenant, its successors and assigns, and
inure to the benefit of the Landlord, its successors and assigns. Nothing
contained in this Paragraph shall limit the rights and obligations of the
parties under any other part of this Lease. Landlord hereby represents that it
has no knowledge of any violations of environmental laws on the Demised Premises
and it has not received any notices of violations of environmental laws from DEP
or any other governmental agency. Landlord acknowledges that there is an
abandoned petroleum product storage tank buried within the Condominium.
Landlord shall indemnify, defend and hold Tenant harmless from and against
any loss, cost, damages or expense arising out of any claim or action alleging
facts which would indicate that any of the contents of such tank may have leaked
into the surrounding area or that there may have been any spill of petroleum
products or other hazardous substances prior to the commencement of the term of
this Lease or during the term of this Lease by Landlord, Sprint or any invitee
or licensee of Landlord. In the case of a claim or action against the Tenant as
a result of any leakage or spill from said underground petroleum tank, the
Tenant may require Landlord to post a bond in favor of Tenant in an amount
sufficient to indemnify Tenant under this paragraph, the amount of said bond to
be determined by an environmental engineering firm selected by Landlord. If
Tenant shall disagree with the amount of the bond set by Landlord's
environmental engineering firm, Tenant shall be entitled to select, at its sole
cost of expense, a qualified licensed environmental engineering firm to
recommend a bond amount based upon its analysis of the potential cost to Tenant
under this indemnity provision. If the Landlord's and Tenant's environmental
engineering firms cannot agree on a proposed bond based upon the potential cost
of indemnity hereunder, then each firm shall select a third environmental
engineering firm and the proposed bond amount recommended by the third
environmental engineering firm shall be binding upon Tenant and Landlord. The
provisions of this Paragraph shall be binding upon Landlord and its successors
and assigns and inure to the benefit of Tenant and its successor and assigns.
24. Recorded Notice of Lease: Upon the execution of this Lease, the
parties hereto shall execute a "Notice of Lease" for recording purposes, which
notice shall be duly witnessed and acknowledged. Said notice shall set forth the
name of the Landlord and Tenant, the term of the Lease and renewal option, if
any, a description of the Demised Premises and the office in which the Lease may
be examined and referred to for other terms and conditions.
25. Notices: Any notice required to be given hereunder shall be deemed
duly given if mailed in any post office by registered or certified mail,
addressed to the Landlord at 16 Taylor Lane, Westport, Connecticut 06880, and
addressed to the Tenant at c/o Alarmguard, 125 Frontage Road, Orange,
Connecticut 06477, Attention: Russell R. MacDonnell, or at such other address as
either party may give to the other in writing, in accordance with this Section.
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26. Succession: Except as otherwise provided herein, terms and provision
of this Lease shall be binding upon and inure to the benefit of the heirs,
executors, administrators, successors and assigns respectively, of Landlord and
Tenant.
27. Security Deposit: Tenant shall pay to Landlord the sum of Twenty Four
Thousand Seven Hundred Eighty and 00/100 ($24,780.00) Dollars as the Security
Deposit. Said "Security Deposit" shall be held by Landlord in an escrow or trust
account and shall be promptly repaid to Tenant upon termination of the term of
this Lease except in the event of termination due to Tenant's default and except
as needed to repair damage caused by Tenant or for sums due Landlord from Tenant
upon termination of this Lease.
28. Tenant Fit-Up: Landlord shall give Tenant an allowance for fit-up of
the Demised Premises in the amount of Sixty Five Thousand and 00/1 00
($65,000.00) Dollars. Said allowance shall be credited against Tenant's monthly
rent over the first twelve (12) months, which credit shall equal Five Thousand
Four Hundred Sixteen and 67/100 ($5,416.67) Dollars per month. Tenant fit-up
shall be for work reasonably necessary for the operation of the business and
proposed use of the building based upon plans to be submitted by Tenant to
Landlord and subject to Landlord's prior approval. Tenant or its agents shall
have all work performed and shall deliver absolute lien waivers to Landlord
prior to commencing work and shall keep the Demised Premises free of all liens.
The obligation of Tenant to begin rent payments hereunder shall start on the
commencement date set forth in Section 2(a), regardless of whether Tenant has
completed said improvements or not.
29. Notwithstanding anything stated herein to the contrary, M. Walter
Levine shall have a period of ninety (90) days from the commencement of this
Lease, without payment of rent or other charges by M. Walter Levine for said
space, to utilize his existing office and secretarial area outside his office to
conduct his business without interference to or from Tenant. M. Walter Levine
shall vacate this space within ninety (90) days of Lease Commencement. The
Tenant shall not have any reduction in Rent or Additional Rent for its being
unable to use this office space for said ninety (90) days.
IN WITNESS WHEREOF, the parties hereto have executed this Lease
under seal this 30th day of April, 1997.
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Signed, Sealed and Delivered ONE RIVER ROAD
In the Presence of: ASSOCIATES
/S/ Scott M. Gerrard BY: /s/ Steven Levine
------------------ -----------------------
/S/ Mark Sandler Steven Levine
------------------ Its Partner
Duly Authorized
ALARMGUARD, INC.
/S/ Scott M. Gerard BY: /s/ Russell R. MacDonnell
------------------ --------------------------
/S/ Tracy B. Ambler Russell R. MacDonnell
------------------ Its Chairman
Duly Authorized
STATE OF CONNECTICUT )
) ss Greenwich. April 30, 1997
COUNTY OF FAIRFIELD )
On this the 30th day of April, 1997, before me, Tracy B. Ambler , the
undersigned officer, personally appeared, Russell R. MacDonnell, who
acknowledged himself to be the Chairman of ALARM GUARD, INC., a corporation, and
that he as such Chairman, being authorized so to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as such Chairman.
IN WITNESS WHEREOF, I hereunto set my hand.
/s/ Tracy B. Ambler
-------------------------------
Commissioner of the Superior Court
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STATE OF CONNECTICUT )
) ss Greenwich April 30, 1997
COUNTY OF FAIRFIELD )
On this the 30th day of April, 1997, before me, Scott M. Gerard, the
undersigned officer, personally appeared, Steven Levine, who acknowledged
himself to be the general partner of One River Road Associates., a Connecticut
partnership, and that he as such general partner, being authorized so to do,
executed the foregoing instrument for the purposes therein contained by signing
the name of the partnership by himself as such general partner.
IN WITNESS WHEREOF, I hereunto set my hand.
----------------------------------
Commissioner of the Superior Court
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